~~0000315189de:ConstructionAndForestryIndustryMemberus-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2021-08-01~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July 31,~~January 29, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file no: 1-4121

DEERE & COMPANY

(Exact name of registrant as specified in its charter)


Delaware (State of incorporation)		36-2382580 (IRS employer identification no.)

One John Deere Place

Moline, Illinois 61265

(Address of principal executive offices)

Telephone Number: (309) 765-8000

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $1 par value	DE	New York Stock Exchange
6.55% Debentures Due 2028	DE28	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐☐	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐No ☒

At ~~July 31, 2022, 301,819,630~~January 29, 2023, 296,322,273 shares of common stock, $1 par value, of the registrant were outstanding.

PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS	ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY	DEERE & COMPANY
STATEMENTS OF CONSOLIDATED INCOME	STATEMENTS OF CONSOLIDATED INCOME
For the Three and Nine Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars and shares except per share amounts) Unaudited	(In millions of dollars and shares except per share amounts) Unaudited
		Three Months Ended				Nine Months Ended
		2022		2021		2022		2021		2023		2022
Net Sales and Revenues
Net sales		$	13,000	$	10,413	$	33,565	$	29,461	$	11,402	$	8,531
Finance and interest income			846		825		2,441		2,468		994		800
Other income			256		289		1,035		768		256		238
Total			14,102		11,527		37,041		32,697		12,652		9,569

Costs and Expenses
Cost of sales			9,511		7,574		25,124		21,307		7,934		6,695
Research and development expenses			481		394		1,336		1,137		495		402
Selling, administrative and general expenses			959		841		2,672		2,448		952		781
Interest expense			296		244		713		783		479		229
Other operating expenses			316		324		954		1,033		299		311
Total			11,563		9,377		30,799		26,708		10,159		8,418

Income of Consolidated Group before Income Taxes			2,539		2,150		6,242		5,989		2,493		1,151
Provision for income taxes			654		491		1,364		1,328		537		250

Income of Consolidated Group			1,885		1,659		4,878		4,661		1,956		901
Equity in income of unconsolidated affiliates					8		8		21		1		3

Net Income			1,885		1,667		4,886		4,682		1,957		904
Less: Net income attributable to noncontrolling interests			1				1		2
Less: Net income (loss) attributable to noncontrolling interests											(2)		1
Net Income Attributable to Deere & Company		$	1,884	$	1,667	$	4,885	$	4,680	$	1,959	$	903

Per Share Data
Basic		$	6.20	$	5.36	$	15.97	$	14.98	$	6.58	$	2.94
Diluted		$	6.16	$	5.32	$	15.88	$	14.86		6.55		2.92
Dividends declared		$	1.13	$	.90	$	3.23	$	2.56		1.20		1.05
Dividends paid		$	1.05	$	.90	$	3.15	$	2.42		1.13		1.05

Average Shares Outstanding
Basic			304.1		311.0		305.8		312.4		297.6		307.4
Diluted			305.7		313.4		307.7		314.9		299.1		309.4

See Condensed Notes to Interim Consolidated Financial Statements.


DEERE & COMPANY	DEERE & COMPANY
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME	STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
For the Three and Nine Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited	(In millions of dollars) Unaudited
		Three Months Ended				Nine Months Ended
		2022		2021		2022		2021		2023		2022

Net Income		$	1,885	$	1,667	$	4,886	$	4,682	$	1,957	$	904

Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment			79		54		(137)		208		(11)		(345)
Cumulative translation adjustment			(269)		(114)		(784)		319		681		(267)
Unrealized gain (loss) on derivatives			(1)		1		41		8		(13)		14
Unrealized gain (loss) on debt securities			6		8		(57)		(7)		27		(15)
Other Comprehensive Income (Loss), Net of Income Taxes			(185)		(51)		(937)		528		684		(613)

Comprehensive Income of Consolidated Group			1,700		1,616		3,949		5,210		2,641		291
Less: Comprehensive income (loss) attributable to noncontrolling interests			(3)				(8)		2
Less: Comprehensive income attributable to noncontrolling interests											6		1
Comprehensive Income Attributable to Deere & Company		$	1,703	$	1,616	$	3,957	$	5,208	$	2,635	$	290

See Condensed Notes to Interim Consolidated Financial Statements.


DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars) Unaudited
	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Assets
Cash and cash equivalents	$	4,359	$	8,017	$	7,519	$	3,976	$	4,774	$	4,472
Marketable securities		719		728		688		852		734		735
Trade accounts and notes receivable – net		6,696		4,208		5,268		7,609		6,410		4,855
Financing receivables – net		35,056		33,799		31,449		36,882		36,634		33,191
Financing receivables securitized – net		5,141		4,659		5,401		5,089		5,936		3,516
Other receivables		1,999		1,765		1,702		1,992		2,492		1,936
Equipment on operating leases – net		6,554		6,988		6,982		6,502		6,623		6,624
Inventories		9,121		6,781		6,410		10,056		8,495		7,935
Property and equipment – net		5,666		5,820		5,649		6,212		6,056		5,665
Goodwill		3,754		3,291		3,148		3,891		3,687		3,192
Other intangible assets – net		1,281		1,275		1,267		1,255		1,218		1,209
Retirement benefits		3,125		3,601		990		3,793		3,730		3,158
Deferred income taxes		1,110		1,037		1,767		914		824		923
Other assets		2,236		2,145		2,448		2,597		2,417		2,203
Total Assets	$	86,817	$	84,114	$	80,688	$	91,620	$	90,030	$	79,614

Liabilities and Stockholders’ Equity

Liabilities
Short-term borrowings	$	14,176	$	10,919	$	10,404	$	14,129	$	12,592	$	10,990
Short-term securitization borrowings		4,920		4,605		5,277		4,864		5,711		3,482
Accounts payable and accrued expenses		12,986		12,348		11,207		13,108		14,822		10,651
Deferred income taxes		561		576		515		519		495		556
Long-term borrowings		32,132		32,888		32,280		35,071		33,596		32,838
Retirement benefits and other liabilities		2,911		4,344		5,272		2,493		2,457		3,289
Total liabilities		67,686		65,680		64,955		70,184		69,673		61,806

Commitments and contingencies (Note 15)
Redeemable noncontrolling interest (Note 19)		95
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest								100		92

Stockholders’ Equity
Common stock, $1 par value (issued shares at July 31, 2022 – 536,431,204)		5,139		5,054		5,031
Common stock, $1 par value (issued shares at January 29, 2023 – 536,431,204)								5,191		5,165		5,066
Common stock in treasury		(22,976)		(20,533)		(19,780)		(25,333)		(24,094)		(21,139)
Retained earnings		40,346		36,449		35,491		43,846		42,247		37,029
Accumulated other comprehensive income (loss)		(3,476)		(2,539)		(5,011)		(2,372)		(3,056)		(3,152)
Total Deere & Company stockholders’ equity		19,033		18,431		15,731		21,332		20,262		17,804
Noncontrolling interests		3		3		2		4		3		4
Total stockholders’ equity		19,036		18,434		15,733		21,336		20,265		17,808
Total Liabilities and Stockholders’ Equity	$	86,817	$	84,114	$	80,688	$	91,620	$	90,030	$	79,614

See Condensed Notes to Interim Consolidated Financial Statements.


DEERE & COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited
	2022		2021		2023		2022
Cash Flows from Operating Activities
Net income	$	4,886	$	4,682	$	1,957	$	904
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used for operating activities:
Provision (credit) for credit losses		62		(17)		(130)
Provision for depreciation and amortization		1,443		1,569		494		486
Impairment charges		81		50
Share-based compensation expense		64		64		23		18
Gain on remeasurement of previously held equity investment		(326)
Undistributed earnings of unconsolidated affiliates		(1)		4
Credit for deferred income taxes		(6)		(271)
Provision (credit) for deferred income taxes						(56)		210
Changes in assets and liabilities:
Trade, notes, and financing receivables related to sales		(2,357)		(444)		(1,015)		(106)
Inventories		(2,526)		(1,817)		(1,279)		(1,297)
Accounts payable and accrued expenses		(15)		742		(1,577)		(1,554)
Accrued income taxes payable/receivable		82		34		199		(184)
Retirement benefits		(1,014)		13		(48)		(1,010)
Other		45		(295)		186		(20)
Net cash provided by operating activities		418		4,314
Net cash used for operating activities						(1,246)		(2,553)

Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)		15,774		14,480		7,198		6,435
Proceeds from sales of equipment on operating leases		1,501		1,510		497		479
Cost of receivables acquired (excluding receivables related to sales)		(18,578)		(17,161)		(6,322)		(5,603)
Acquisitions of businesses, net of cash acquired		(488)		(19)				(24)
Purchases of property and equipment		(596)		(492)		(315)		(193)
Cost of equipment on operating leases acquired		(1,717)		(1,210)		(497)		(391)
Collateral on derivatives – net		(193)		(189)
Collateral on derivatives - net						345		(13)
Other		(133)		(21)		(146)		(42)
Net cash used for investing activities		(4,430)		(3,102)
Net cash provided by investing activities						760		648

Cash Flows from Financing Activities
Increase in total short-term borrowings		4,267		929
Increase (decrease) in total short-term borrowings						697		(1,018)
Proceeds from long-term borrowings		6,281		5,877		2,505		2,353
Payments of long-term borrowings		(6,578)		(5,172)		(1,925)		(1,940)
Proceeds from issuance of common stock		55		136		21		11
Repurchases of common stock		(2,477)		(1,780)		(1,257)		(623)
Dividends paid		(971)		(761)		(341)		(327)
Other		(62)		(80)		(39)		(33)
Net cash provided by (used for) financing activities		515		(851)
Net cash used for financing activities						(339)		(1,577)

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		(143)		106		62		(74)

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(3,640)		467
Net Decrease in Cash, Cash Equivalents, and Restricted Cash						(763)		(3,556)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		8,125		7,172		4,941		8,125
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	4,485	$	7,639	$	4,178	$	4,569

Components of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	4,359	$	7,519	$	3,976	$	4,472
Restricted cash (Other assets)		126		120		202		97
Total cash, cash equivalents, and restricted cash	$	4,485	$	7,639	$	4,178	$	4,569

See Condensed Notes to Interim Consolidated Financial Statements.


DEERE & COMPANY	DEERE & COMPANY															DEERE & COMPANY
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY	STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY															STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY
For the Three and Nine Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022																For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited	(In millions of dollars) Unaudited															(In millions of dollars) Unaudited
				Total Stockholders’ Equity															Total Stockholders’ Equity
				Deere & Company Stockholders															Deere & Company Stockholders
										Accumulated															Accumulated
		Total								Other				Redeemable			Total								Other				Redeemable
		Stockholders’		Common		Treasury		Retained		Comprehensive		Noncontrolling		Noncontrolling			Stockholders’		Common		Treasury		Retained		Comprehensive		Noncontrolling		Noncontrolling
		Equity		Stock		Stock		Earnings		Income (Loss)		Interests		Interest			Equity		Stock		Stock		Earnings		Income (Loss)		Interests		Interest

Three Months Ended August 1, 2021
Balance May 2, 2021		$	15,096	$	4,999	$	(19,052)	$	34,105	$	(4,960)	$	4
Balance October 31, 2021																	$	18,434	$	5,054	$	(20,533)	$	36,449	$	(2,539)	$	3
Net income			1,667						1,667									904						903				1
Other comprehensive loss			(51)								(51)							(613)								(613)
Repurchases of common stock			(736)				(736)											(623)				(623)
Treasury shares reissued			8				8											17				17
Dividends declared			(282)						(280)				(2)					(323)						(323)
Stock options and other			31		32				(1)
Balance August 1, 2021		$	15,733	$	5,031	$	(19,780)	$	35,491	$	(5,011)	$	2
Share based awards and other																		12		12
Balance January 30, 2022																	$	17,808	$	5,066	$	(21,139)	$	37,029	$	(3,152)	$	4

Nine Months Ended August 1, 2021
Balance November 1, 2020		$	12,944	$	4,895	$	(18,065)	$	31,646	$	(5,539)	$	7
ASU No. 2016-13 adoption			(35)						(35)
Net income			4,682						4,680				2

Balance October 30, 2022																	$	20,265	$	5,165	$	(24,094)	$	42,247	$	(3,056)	$	3	$	92
Net income (loss)																		1,960						1,959				1		(3)
Other comprehensive income			528								528							684								684				8
Repurchases of common stock			(1,780)				(1,780)											(1,257)				(1,257)
Treasury shares reissued			65				65											18				18
Dividends declared			(802)						(800)				(2)					(356)						(356)
Stock options and other			131		136								(5)
Balance August 1, 2021		$	15,733	$	5,031	$	(19,780)	$	35,491	$	(5,011)	$	2
Share based awards and other																		22		26				(4)						3
Balance January 29, 2023																	$	21,336	$	5,191	$	(25,333)	$	43,846	$	(2,372)	$	4	$	100

Three Months Ended July 31, 2022
Balance May 1, 2022		$	18,907	$	5,117	$	(21,727)	$	38,805	$	(3,291)	$	3	$	99
Net income			1,884						1,884						1
Other comprehensive loss			(185)								(185)				(4)
Repurchases of common stock			(1,251)				(1,251)
Treasury shares reissued			2				2
Dividends declared			(343)						(343)
Stock options and other			22		22										(1)
Balance July 31, 2022		$	19,036	$	5,139	$	(22,976)	$	40,346	$	(3,476)	$	3	$	95

Nine Months Ended July 31, 2022
Balance October 31, 2021		$	18,434	$	5,054	$	(20,533)	$	36,449	$	(2,539)	$	3
Acquisitions (see Note 19)														$	105
Net income (loss)			4,887						4,885				2		(1)
Other comprehensive loss			(937)								(937)				(9)
Repurchases of common stock			(2,477)				(2,477)
Treasury shares reissued			34				34
Dividends declared			(990)						(988)				(2)
Stock options and other			85		85
Balance July 31, 2022		$	19,036	$	5,139	$	(22,976)	$	40,346	$	(3,476)	$	3	$	95

See Condensed Notes to Interim Consolidated Financial Statements.

Condensed Notes to Interim Consolidated Financial Statements (Unaudited)

(1) Organization and Consolidation

Deere & Company has been developing innovative solutions to help ~~our~~its customers become more profitable for more than 185 years. References to Deere & Company, John Deere, Deere, or the Company include ~~our~~its consolidated subsidiaries ~~including our~~and consolidated variable interest entities (VIEs). The Company is managed through the following operating segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS). References to “equipment operations” include production and precision agriculture, small agriculture and turf, and construction and forestry, while references to “agriculture and turf” include both production and precision agriculture and small agriculture and turf.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The ~~third~~first quarter ends for fiscal year 2023 and 2022 were January 29, 2023 and ~~2021 were July 31,~~January 30, 2022, ~~and August 1, 2021,~~ respectively. Both ~~third quarters~~periods contained 13 ~~weeks, while both year-to-date periods contained 39~~ weeks. Unless otherwise stated, references to particular years, quarters, or ~~quarters~~months refer to the Company’s fiscal years generally ending in October and the associated periods in those fiscal years.

Prior to fiscal year 2021, the operating results of the Wirtgen Group (Wirtgen) were incorporated into the Company’s consolidated financial statements using a one-month lag period. The reporting lag was eliminated resulting in one additional month of Wirtgen activity in both the first quarter and the year-to-date period of 2021. The effect was an increase to Net sales of $270 million, which the Company considers immaterial to construction and forestry’s annual Net sales.

As a result of recent acquisitions (see Note 19), the Company updated the presentation on the consolidated balance sheet to remove the following lines: Receivables from unconsolidated affiliates, Investments in unconsolidated affiliates, and Payables to unconsolidated affiliates. These balances are now immaterial to the Company’s consolidated balance sheet and have been reclassified into Other receivables, Other assets, and Accounts payable and accrued expenses, respectively.

~~The Company consolidates certain VIEs related to retail note securitizations (see Note 9).~~

(2)Summary of Significant Accounting Policies and New Accounting Standards

Quarterly Financial Statements

The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All ~~adjustments, consisting of~~ normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

~~Revenue Recognition~~

Prior to fiscal year 2022, certain goods were shipped to Canadian dealers on a consignment basis under which the risk and rewards of ownership were not transferred to the dealer at the time the goods were delivered. Accordingly, sales were not recorded until a retail customer purchased the goods. The dealer contract in Canada was changed for goods delivered after November 1, 2021, resulting in transfer of control and revenue recognition upon delivery. For certain goods delivered to Canadian dealers prior to November 1, 2021, the dealer consignment terms already in place remain in effect. As of July 31, 2022 and October 31, 2021, the remaining consigned inventory was $26 million and $150 million, respectively.

New Accounting Standards

The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board and other authoritative guidance. ASUs adopted in ~~2022~~2023 did not have a material impact on the Company’s financial ~~statements, and~~statements. ASUs to be adopted in future periods are being evaluated and at this point are not expected to have a material impact on the Company’s financial ~~statements~~.statements.

(3)Revenue Recognition

The Company’s ~~Net~~net sales and revenues by primary geographic market, major product line, and timing of revenue recognition in millions of dollars follow:


	Three Months Ended July 31, 2022										Three Months Ended January 29, 2023
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total		Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	2,904	$	2,177	$	1,789	$	602	$	7,472	$	2,628	$	1,665	$	1,901	$	713	$	6,907
Canada		451		185		288		149		1,073		360		146		275		150		931
Western Europe		645		646		380		25		1,696		501		564		365		29		1,459
Central Europe and CIS		348		109		111		14		582		202		123		75		12		412
Latin America		1,327		155		459		77		2,018		1,237		156		339		95		1,827
Asia, Africa, Australia, New Zealand, and Middle East		510		419		296		36		1,261
Asia, Africa, Oceania, and Middle East												375		400		300		41		1,116
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102	$	5,303	$	3,054	$	3,255	$	1,040	$	12,652

Major product lines:
Production agriculture	$	6,019							$	6,019	$	5,112							$	5,112
Small agriculture			$	2,705						2,705			$	2,194						2,194
Turf				842						842				719						719
Construction					$	1,506				1,506					$	1,483				1,483
Compact construction						460				460						473				473
Roadbuilding						910				910						818				818
Forestry						316				316						356				356
Financial products		17		15		6	$	903		941		31		18		13	$	1,040		1,102
Other		149		129		125				403		160		123		112				395
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102	$	5,303	$	3,054	$	3,255	$	1,040	$	12,652

Revenue recognized:
At a point in time	$	6,154	$	3,672	$	3,303	$	27	$	13,156	$	5,248	$	3,029	$	3,230	$	23	$	11,530
Over time		31		19		20		876		946		55		25		25		1,017		1,122
Total	$	6,185	$	3,691	$	3,323	$	903	$	14,102	$	5,303	$	3,054	$	3,255	$	1,040	$	12,652


	Nine Months Ended July 31, 2022										Three Months Ended January 30, 2022
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total		Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	6,946	$	5,718	$	5,157	$	1,744	$	19,565	$	1,608	$	1,438	$	1,260	$	573	$	4,879
Canada		899		468		975		450		2,792		139		122		332		152		745
Western Europe		1,648		1,836		1,202		76		4,762		467		532		358		26		1,383
Central Europe and CIS		954		386		452		36		1,828		202		126		195		11		534
Latin America		3,229		393		1,020		218		4,860		776		104		228		68		1,176
Asia, Africa, Australia, New Zealand, and Middle East		1,118		1,170		833		113		3,234
Asia, Africa, Oceania, and Middle East												241		352		219		40		852
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041	$	3,433	$	2,674	$	2,592	$	870	$	9,569

Major product lines:
Production agriculture	$	14,333							$	14,333	$	3,283							$	3,283
Small agriculture			$	7,305						7,305			$	1,932						1,932
Turf				2,286						2,286				627						627
Construction					$	4,198				4,198					$	1,175				1,175
Compact construction						1,208				1,208						321				321
Roadbuilding						2,619				2,619						692				692
Forestry						946				946						305				305
Financial products		39		35		17	$	2,637		2,728		12		11		5	$	870		898
Other		422		345		651				1,418		138		104		94				336
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041	$	3,433	$	2,674	$	2,592	$	870	$	9,569

Revenue recognized:
At a point in time	$	14,694	$	9,919	$	9,580	$	77	$	34,270	$	3,396	$	2,654	$	2,570	$	24	$	8,644
Over time		100		52		59		2,560		2,771		37		20		22		846		925
Total	$	14,794	$	9,971	$	9,639	$	2,637	$	37,041	$	3,433	$	2,674	$	2,592	$	870	$	9,569

Three Months Ended August 1, 2021


Production & Precision Ag

Small Ag & Turf

Construction
& Forestry

Financial
Services

Total

Primary geographic markets:





United States

$
1,995

$
1,753

$
1,559

$
605

$
5,912

Canada

253

153

285

162

853

Western Europe

566

679

455

27

1,727

Central Europe and CIS

398

117

241

10

766

Latin America

758

125

227

60

1,170

Asia, Africa, Australia, New Zealand, and Middle East

368

385

308

38

1,099

Total

$
4,338

$
3,212

$
3,075

$
902

$
11,527

Major product lines:





Production agriculture

$
4,179

$
4,179

Small agriculture

$
2,355

2,355

Turf

719

719

Construction

$
1,283

1,283

Compact construction

398

398

Roadbuilding

948

948

Forestry

342

342

Financial products

13

12

5

$
902

932

Other

146

126

99

371

Total

$
4,338

$
3,212

$
3,075

$
902

$
11,527

Revenue recognized:





At a point in time

$
4,293

$
3,191

$
3,052

$
27

$
10,563

Over time

45

21

23

875

964

Total

$
4,338

$
3,212

$
3,075

$
902

$
11,527

Nine Months Ended August 1, 2021


Production & Precision Ag

Small Ag & Turf

Construction
& Forestry

Financial
Services

Total

Primary geographic markets:

United States

$
5,814

$
5,014

$
4,242

$
1,812

$
16,882

Canada

617

376

793

469

2,255

Western Europe

1,604

1,903

1,408

77

4,992

Central Europe and CIS

1,090

361

628

28

2,107

Latin America

1,971

305

617

179

3,072

Asia, Africa, Australia, New Zealand, and Middle East

991

1,230

1,054

114

3,389

Total

$
12,087

$
9,189

$
8,742

$
2,679

$
32,697

Major product lines:





Production agriculture

$
11,656

$
11,656

Small agriculture

$
6,583

6,583

Turf

2,268

2,268

Construction

$
3,402

3,402

Compact construction

1,140

1,140

Roadbuilding

2,924

2,924

Forestry

975

975

Financial products

41

32

17

$
2,679

2,769

Other

390

306

284

980

Total

$
12,087

$
9,189

$
8,742

$
2,679

$
32,697

Revenue recognized:





At a point in time

$
11,960

$
9,137

$
8,666

$
77

$
29,840

Over time

127

52

76

2,602

2,857

Total

$
12,087

$
9,189

$
8,742

$
2,679

$
32,697

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These ~~items are primarily for~~relate to extended warranty premiums, ~~for extended warranties,~~ advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in ~~Accounts~~“Accounts payable and accrued ~~expenses~~expenses” in the consolidated balance sheets. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note ~~15,~~16, was ~~$1,424~~$1,502 million, ~~$1,344~~$1,423 million, and ~~$1,259~~$1,348 million at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021,~~January 30, 2022, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended ~~July 31,~~January 29, 2023 and January 30, 2022, ~~and August 1, 2021, $93~~$215 million and $108 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the nine months ended July 31, 2022 and August 1, 2021, $488 million and $442$265 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is ~~$1,167~~$1,282 million at ~~July 31, 2022.~~January 29, 2023. The estimated revenue to be recognized by fiscal year ~~follows~~ in millions of ~~dollars:~~dollars follows: remainder of~~2022~~ ~~- $104,~~ 2023 - ~~$337,~~$278, 2024 - ~~$283,~~$332, 2025 - ~~$196,~~$260, 2026 - ~~$109,~~$168, 2027 - ~~$60~~$100, 2028 - $61, and later years - ~~$78.~~$83. As permitted, the Company elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are ~~generally~~ for sales of equipment, service parts, repair services, and certain telematics services.

(4) Other Comprehensive Income Items

The after-tax components of accumulated other comprehensive income (loss) in millions of dollars follow:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Retirement benefits adjustment	$	(1,171)	$	(1,034)	$	(3,710)	$	(400)	$	(389)	$	(1,379)
Cumulative translation adjustment		(2,262)		(1,478)		(1,277)		(1,913)		(2,594)		(1,745)
Unrealized loss on derivatives		(1)		(42)		(50)
Unrealized gain (loss) on debt securities		(42)		15		26
Unrealized gain (loss) on derivatives								8		21		(28)
Unrealized loss on debt securities								(67)		(94)
Total accumulated other comprehensive income (loss)	$	(3,476)	$	(2,539)	$	(5,011)	$	(2,372)	$	(3,056)	$	(3,152)

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial (gain) loss, prior service (credit) cost, and ~~settlements/curtailment~~settlements are included in net periodic pension and other postretirement benefit costs (see Note 6).

Before

Tax

After

Tax

(Expense)

Tax

Three Months Ended July 31, 2022

Amount

Credit

Amount

Cumulative translation adjustment

$
(267)

$
(2)

$
(269)

Unrealized gain (loss) on derivatives:

Unrealized hedging gain (loss)

1

1

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

(3)

1

(2)

Net unrealized gain (loss) on derivatives

(2)

1

(1)

Unrealized gain (loss) on debt securities:

Unrealized holding gain (loss)

6

(1)

5

Reclassification of realized (gain) loss – Other income

1

1

Net unrealized gain (loss) on debt securities

7

(1)

6

Retirement benefits adjustment:

Net actuarial gain (loss)

34

(9)

25

Reclassification to Other operating expenses through amortization of:

Actuarial (gain) loss

27

(7)

20

Prior service (credit) cost

8

(2)

6

Settlements/curtailment

36

(8)

28

Net unrealized gain (loss) on retirement benefits adjustment

105

(26)

79

Total other comprehensive income (loss)

$
(157)

$
(28)

$
(185)


	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 29, 2023	Amount		Credit		Amount
Cumulative translation adjustment	$	669	$	12	$	681
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1)				(1)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(15)		3		(12)
Net unrealized gain (loss) on derivatives		(16)		3		(13)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		34		(7)		27
Net unrealized gain (loss) on debt securities		34		(7)		27
Retirement benefits adjustment:
Net actuarial gain (loss)		(1)				(1)
Reclassification to other operating expenses through amortization of:
Actuarial (gain) loss		(21)		5		(16)
Prior service (credit) cost		9		(3)		6
Net unrealized gain (loss) on retirement benefits adjustment		(13)		2		(11)
Total other comprehensive income (loss)	$	674	$	10	$	684

109

Before

Tax

After

Tax

(Expense)

Tax

Nine Months Ended July 31, 2022

Amount

Credit

Amount

Cumulative translation adjustment

$
(774)

$
(10)

$
(784)

Unrealized gain (loss) on derivatives:

Unrealized hedging gain (loss)

52

(11)

41

Net unrealized gain (loss) on derivatives

52

(11)

41

Unrealized gain (loss) on debt securities:

Unrealized holding gain (loss)

(74)

16

(58)

Reclassification of realized (gain) loss – Other income

1

1

Net unrealized gain (loss) on debt securities

(73)

16

(57)

Retirement benefits adjustment:

Net actuarial gain (loss) and prior service (cost)

(338)

81

(257)

Reclassification to Other operating expenses through amortization of:

Actuarial (gain) loss

94

(24)

70

Prior service (credit) cost

22

(6)

16

Settlements/curtailment

44

(10)

34

Net unrealized gain (loss) on retirement benefits adjustment

(178)

41

(137)

Total other comprehensive income (loss)

$
(973)

$
36

$
(937)

Before

Tax

After

Tax

(Expense)

Tax

Three Months Ended August 1, 2021

Amount

Credit

Amount

Cumulative translation adjustment

$
(112)

$
(2)

$
(114)

Unrealized gain (loss) on derivatives:

Unrealized hedging gain (loss)

(1)

(1)

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

3

(1)

2

Net unrealized gain (loss) on derivatives

2

(1)

1

Unrealized gain (loss) on debt securities:

Unrealized holding gain (loss)

11

(3)

8

Net unrealized gain (loss) on debt securities

11

(3)

8

Retirement benefits adjustment:

Net actuarial gain (loss)

(5)

1

(4)

Reclassification to Other operating expenses through amortization of:

Actuarial (gain) loss

71

(17)

54

Prior service (credit) cost

1

1

Settlements

4

(1)

3

Net unrealized gain (loss) on retirement benefits adjustment

71

(17)

54

Total other comprehensive income (loss)

$
(28)

$
(23)

$
(51)


	Before		Tax		After		Before		Tax		After
	Tax		(Expense)		Tax		Tax		(Expense)		Tax
Nine Months Ended August 1, 2021	Amount		Credit		Amount
Three Months Ended January 30, 2022							Amount		Credit		Amount
Cumulative translation adjustment	$	319			$	319	$	(264)	$	(3)	$	(267)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1)				(1)		15		(3)		12
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		11	$	(2)		9		2				2
Net unrealized gain (loss) on derivatives		10		(2)		8		17		(3)		14
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(6)		(1)		(7)		(19)		4		(15)
Net unrealized gain (loss) on debt securities		(6)		(1)		(7)		(19)		4		(15)
Retirement benefits adjustment:
Net actuarial gain (loss)		35		(8)		27
Reclassification to Other operating expenses through amortization of:
Net actuarial gain (loss) and prior service credit (cost)								(500)		120		(380)
Reclassification to other operating expenses through amortization of:
Actuarial (gain) loss		213		(53)		160		40		(10)		30
Prior service (credit) cost		5		(1)		4		6		(2)		4
Settlements		22		(5)		17		1				1
Net unrealized gain (loss) on retirement benefits adjustment		275		(67)		208		(453)		108		(345)
Total other comprehensive income (loss)	$	598	$	(70)	$	528	$	(719)	$	106	$	(613)

(5) Earnings Per Share

A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:


	Three Months Ended				Nine Months Ended				Three Months Ended
	July 31		August 1		July 31		August 1		January 29		January 30
	2022		2021		2022		2021		2023		2022
Net income attributable to Deere & Company	$	1,884	$	1,667	$	4,885	$	4,680	$	1,959	$	903
Average shares outstanding		304.1		311.0		305.8		312.4		297.6		307.4
Basic per share	$	6.20	$	5.36	$	15.97	$	14.98	$	6.58	$	2.94

Average shares outstanding		304.1		311.0		305.8		312.4		297.6		307.4
Effect of dilutive share-based compensation		1.6		2.4		1.9		2.5		1.5		2.0
Total potential shares outstanding		305.7		313.4		307.7		314.9		299.1		309.4
Diluted per share	$	6.16	$	5.32	$	15.88	$	14.86	$	6.55	$	2.92

Shares excluded from EPS calculation, as antidilutive										.1		.1

~~During both the third quarter and first nine months of 2022, .2 million shares were excluded from the computation because the incremental shares would have been antidilutive.~~

1210

(6) Pension and Other Postretirement Benefits

The Company has several defined benefit pension plans and postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries.

The components of net periodic pension and OPEB (benefit) cost consisted of the following in millions of dollars:


	Three Months Ended				Nine Months Ended				Three Months Ended
	July 31		August 1		July 31		August 1		January 29		January 30
	2022		2021		2022		2021		2023		2022
Pension
Service cost	$	86	$	83	$	265	$	251	$	60	$	85
Interest cost		85		69		242		207		133		77
Expected return on plan assets		(182)		(199)		(544)		(599)		(212)		(182)
Amortization of actuarial loss		31		64		107		192
Amortization of actuarial (gain) loss										(5)		39
Amortization of prior service cost		9		2		25		8		10		7
Settlements/curtailment		36		4		44		22
Settlements												1
Net (benefit) cost									$	(14)	$	27

OPEB
Service cost									$	7	$	12
Interest cost										43		26
Expected return on plan assets										(29)		(28)
Amortization of actuarial (gain) loss										(16)		1
Amortization of prior service credit										(1)		(1)
Net cost	$	65	$	23	$	139	$	81	$	4	$	10

The ~~components of~~reduction in the 2023 pension net ~~periodic OPEB~~(benefit) cost ~~consisted of~~is due to increases in the ~~following~~expected long-term return rates on plan assets and increases in ~~millions of dollars:~~

Three Months Ended

Nine Months Ended

July 31

August 1

July 31

August 1

2022

2021

2022

2021

Service cost

$
11

$
12

$
34

$
36

Interest cost

25

25

74

76

Expected return on plan assets

(28)

(19)

(83)

(58)

Amortization of actuarial (gain) loss

(4)

7

(13)

21

Amortization of prior service credit

(1)

(1)

(3)

(3)

Net cost

$
3

$
24

$
9

$
72

discount rates. The components of net periodic pension and OPEB ~~costs~~(benefit) cost excluding the service cost component are included in the line item ~~Other~~“Other operating ~~expenses~~expenses” in the statements of consolidated income.

On November 17, 2021, employees represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) approved a new collective bargaining agreement. In the first quarter of 2022, the Company remeasured the U.S. hourly pension plan due to the new collective bargaining agreement, which decreased the plan’s funded status by approximately $495 million and will increase pension expense in 2022 by nearly $80 million with $35 million negatively impacting operating profit in 2022.

~~During the third quarter of~~ ~~2022~~, the Company remeasured the U.S. hourly pension plan when 10 percent of active, eligible employees elected to freeze their defined benefit pension plan benefit for an enhanced defined contribution benefit. The remeasurement resulted in a $34 million curtailment loss, while the impact to the plan’s funded status was not material.

During the first nine months of 2022, the Company contributed $67 million to its pension plans and $1,109 million to its OPEB plans. The OPEB contributions include a voluntary contribution of $1,000 million to a U.S. plan on November 30, 2021. The Company presently anticipates contributing an additional $16 million to its pension plans and $28 million to its OPEB plans during the remainder of 2022. The remaining pension and OPEB contributions are primarily direct benefit payments from Company funds.

1311

(7) Segment Reporting

Worldwide Net sales and revenues, operating profit, and identifiable assets by segment were as follows in millions of ~~dollars:~~dollars.

Three Months Ended

Nine Months Ended

July 31

August 1

%

July 31

August 1

%

  2022

  2021

Change

   2022

   2021

Change

Net sales and revenues:














Production & precision ag net sales

$
6,096

$
4,250

+43

$
14,568

$
11,848

+23

Small ag & turf net sales

3,635

3,147

+16

9,836

9,051

+9

Construction & forestry net sales

3,269

3,016

+8

9,161

8,562

+7

Financial services revenues

903

902

2,637

2,679

-2

Other revenues

199

212

-6

839

557

+51

Total net sales and revenues

$
14,102

$
11,527

+22

$
37,041

$
32,697

+13

Operating profit:

Production & precision ag

$
1,293

$
906

+43

$
2,646

$
2,557

+3

Small ag & turf

552

583

-5

1,443

1,699

-15

Construction & forestry

514

463

+11

1,599

1,220

+31

Financial services

287

291

-1

864

844

+2

Total operating profit

2,646

2,243

+18

6,552

6,320

+4

Reconciling items

(108)

(85)

+27

(303)

(312)

-3

Income taxes

(654)

(491)

+33

(1,364)

(1,328)

+3

Net income attributable to Deere & Company

$
1,884

$
1,667

+13

$
4,885

$
4,680

+4

Intersegment sales and revenues:

Production & precision ag net sales

$
5

$
8

-38

$
15

$
21

-29

Small ag & turf net sales

2

2

8

9

-11

Construction & forestry net sales

Financial services revenues

81

61

+33

214

172

+24


	Three Months Ended
	January 29		January 30		%
	2023		2022		Change
Net sales and revenues:
Production & precision ag net sales	$	5,198	$	3,356	+55
Small ag & turf net sales		3,001		2,631	+14
Construction & forestry net sales		3,203		2,544	+26
Financial services revenues		1,040		870	+20
Other revenues		210		168	+25
Total net sales and revenues	$	12,652	$	9,569	+32
Operating profit:
Production & precision ag	$	1,208	$	296	+308
Small ag & turf		447		371	+20
Construction & forestry		625		272	+130
Financial services		238		296	-20
Total operating profit		2,518		1,235	+104
Reconciling items		(22)		(82)	-73
Income taxes		(537)		(250)	+115
Net income attributable to Deere & Company	$	1,959	$	903	+117

Intersegment sales and revenues:
Production & precision ag net sales	$	5	$	4	+25
Small ag & turf net sales		3		2	+50
Construction & forestry net sales
Financial services revenues		204		46	+343

Operating profit for production and precision ag, small ag and turf, and construction and forestry is income from continuing operations before reconciling items and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest ~~expense,~~expenses, certain foreign exchange gains and losses, pension and OPEB benefit ~~costs~~amounts excluding the service cost component, and net income attributable to noncontrolling interests.


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Identifiable assets:
Production & precision ag	$	8,728	$	7,021	$	6,910	$	9,393	$	8,414	$	7,683
Small ag & turf		4,361		3,959		3,643		4,893		4,451		4,260
Construction & forestry		6,824		6,457		6,378		7,232		6,754		6,358
Financial services		56,008		51,624		51,647		59,721		58,864		50,499
Corporate		10,896		15,053		12,110		10,381		11,547		10,814
Total assets	$	86,817	$	84,114	$	80,688	$	91,620	$	90,030	$	79,614

(8) Financing Receivables

The Company monitors the credit quality of financing receivables based on delinquency status. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent receivables for which the Company has ceased accruing finance income. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

1412

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows in millions of dollars:


	July 31, 2022																January 29, 2023
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total		2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	9,161	$	9,169	$	4,713	$	2,234	$	935	$	378	$	3,962	$	30,552	$	2,939	$	12,435	$	7,228	$	3,660	$	1,600	$	823	$	2,753	$	31,438
30-59 days past due		40		70		38		23		8		4		18		201		2		39		39		54		13		44		28		219
60-89 days past due		15		24		15		7		3		1		5		70		1		15		14		20		5		15		6		76
90+ days past due																				1				3		1						5
Non-performing		17		62		48		37		19		27		7		217				40		58		41		27		34		8		208
Construction and forestry
Current		2,336		2,249		1,004		382		106		20		102		6,199		674		2,692		1,702		684		224		80		99		6,155
30-59 days past due		47		54		26		12		4		1		3		147		2		18		29		36		16		52		5		158
60-89 days past due		14		14		12		4		1				1		46				9		17		18		8		24		2		78
90+ days past due				11		3		1				3				18				1		2		1		2		1				7
Non-performing		13		63		49		25		9		4		1		164				46		58		30		16		7		1		158
Total retail customer receivables	$	11,643	$	11,716	$	5,908	$	2,725	$	1,085	$	438	$	4,099	$	37,614	$	3,618	$	15,296	$	9,147	$	4,547	$	1,912	$	1,080	$	2,902	$	38,502


	October 31, 2021																October 30, 2022
	2021		2020		2019		2018		2017		Prior Years		Revolving Charge Accounts		Total		2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	12,877	$	6,676	$	3,463	$	1,738	$	728	$	211	$	3,704	$	29,397	$	13,500	$	7,984	$	4,091	$	1,875	$	785	$	200	$	4,111	$	32,546
30-59 days past due		43		53		29		16		7		3		14		165		46		63		36		17		7		3		19		191
60-89 days past due		16		23		12		6		3		1		4		65		14		25		13		6		2		1		5		66
90+ days past due				1												1		1														1
Non-performing		23		57		53		32		17		23		7		212		27		60		44		28		18		19		8		204
Construction and forestry
Current		3,122		1,575		754		273		57		7		92		5,880		2,964		1,974		842		292		73		12		108		6,265
30-59 days past due		50		40		27		7		4		1		3		132		53		52		23		9		2		1		3		143
60-89 days past due		15		11		9		6		1				1		43		19		16		7		3		1				1		47
90+ days past due		1		2		3		3		4		2				15		1		4		1		3				1				10
Non-performing		26		56		39		17		7		3				148		25		61		34		19		7		3				149
Total retail customer receivables	$	16,173	$	8,494	$	4,389	$	2,098	$	828	$	251	$	3,825	$	36,058	$	16,650	$	10,239	$	5,091	$	2,252	$	895	$	240	$	4,255	$	39,622


	August 1, 2021																January 30, 2022
	2021		2020		2019		2018		2017		Prior Years		Revolving Charge Accounts		Total		2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	9,159	$	7,516	$	3,938	$	2,053	$	910	$	317	$	3,658	$	27,551	$	2,492	$	11,580	$	5,988	$	3,038	$	1,440	$	761	$	2,634	$	27,933
30-59 days past due		38		54		35		19		7		3		13		169		5		82		52		30		15		6		25		215
60-89 days past due		14		28		15		6		3		1		4		71		1		23		18		10		5		3		5		65
90+ days past due				1												1				1												1
Non-performing		12		58		63		42		22		30		6		233		1		33		58		52		31		36		6		217
Construction and forestry
Current		2,327		1,845		938		357		84		13		86		5,650		764		2,795		1,376		615		204		49		81		5,884
30-59 days past due		35		44		26		9		4		1		3		122		8		68		35		21		6		2		3		143
60-89 days past due		13		19		10		5		1		1		1		50				30		17		7		3		1		1		59
90+ days past due		4		2		9		5		6		2				28				2		3		3		1		8				17
Non-performing		12		47		41		19		8		4		1		132				33		48		37		14		7		1		140
Total retail customer receivables	$	11,614	$	9,614	$	5,075	$	2,515	$	1,045	$	372	$	3,772	$	34,007	$	3,271	$	14,647	$	7,595	$	3,813	$	1,719	$	873	$	2,756	$	34,674

1513

The credit quality analysis of wholesale receivables by year of origination was as follows in millions of dollars:


	July 31, 2022																January 29, 2023
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total		2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	289	$	99	$	34	$	6	$	1	$	1	$	2,022	$	2,452	$	115	$	285	$	48	$	21	$	4	$	1	$	2,654	$	3,128
30+ days past due
Non-performing								1								1								1								1
Construction and forestry
Current		11		32		3		1				1		283		331		7		7		24		2				1		459		500
30+ days past due												1				1
Non-performing
Total wholesale receivables	$	300	$	131	$	37	$	8	$	1	$	3	$	2,305	$	2,785	$	122	$	292	$	72	$	24	$	4	$	2	$	3,113	$	3,629


	October 31, 2021																October 30, 2022
	2021		2020		2019		2018		2017		Prior Years		Revolving		Total		2022		2021		2020		2019		2018	Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	346	$	80	$	22	$	9	$	3			$	1,696	$	2,156	$	387	$	64	$	27	$	4		$	2	$	2,371	$	2,855
30+ days past due
Non-performing						12										12								1							1
Construction and forestry
Current		41		7		7				1	$	1		340		397		7		29		2		1			1		377		417
30+ days past due												1				1
Non-performing
Total wholesale receivables	$	387	$	87	$	41	$	9	$	4	$	2	$	2,036	$	2,566	$	394	$	93	$	29	$	6		$	3	$	2,748	$	3,273


	August 1, 2021																January 30, 2022
	2021		2020		2019		2018		2017		Prior Years		Revolving		Total		2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	263	$	110	$	38	$	13	$	3	$	1	$	2,256	$	2,684	$	101	$	244	$	56	$	11	$	7	$	2	$	1,426	$	1,847
30+ days past due
Non-performing						18										18								7								7
Construction and forestry
Current		8		8		8		1		1		1		287		314		5		38		4		3				1		285		336
30+ days past due												1				1												1				1
Non-performing
Total wholesale receivables	$	271	$	118	$	64	$	14	$	4	$	3	$	2,543	$	3,017	$	106	$	282	$	60	$	21	$	7	$	4	$	1,711	$	2,191

1614

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:


	Retail Notes		Revolving						Three Months Ended January 29, 2023
	& Financing		Charge		Wholesale				Retail Notes		Revolving
	Leases		Accounts		Receivables		Total		& Financing		Charge		Wholesale
Three Months Ended July 31, 2022
									Leases		Accounts		Receivables		Total
Allowance:
Beginning of period balance	$	168	$	17	$	5	$	190	$	299	$	22	$	4	$	325
Provision (credit)		14		3		(1)		16		15		(4)				11
Provision transferred to held for sale										(142)						(142)
Provision (credit) subtotal										(127)		(4)				(131)
Write-offs		(12)		(10)				(22)		(18)		(7)				(25)
Recoveries		8		7				15		4		5		1		10
Translation adjustments		3						3		(18)				(1)		(19)
End of period balance	$	181	$	17	$	4	$	202	$	140	$	16	$	4	$	160

Nine Months Ended July 31, 2022
Allowance:
Beginning of period balance	$	138	$	21	$	7	$	166
Provision (credit)		66		(4)		(3)		59
Write-offs		(47)		(22)				(69)
Recoveries		17		22				39
Translation adjustments		7						7
End of period balance	$	181	$	17	$	4	$	202
Financing receivables:
End of period balance	$	33,515	$	4,099	$	2,785	$	40,399	$	35,600	$	2,902	$	3,629	$	42,131

Retail Notes

Revolving

& Financing

Charge

Wholesale

Leases

Accounts

Receivables

Total

Three Months Ended August 1, 2021

Allowance:













Beginning of period balance

$
152

$
19

$
7

$
178

Provision

3

3

Write-offs

(14)

(9)

(23)

Recoveries

8

8

16

End of period balance

$
149

$
18

$
7

$
174

Nine Months Ended August 1, 2021

Allowance:











Beginning of period balance

$
133

$
43

$
8

$
184

ASU No. 2016-13 adoption

44

(13)

31

Provision (credit)

(9)

(16)

(1)

(26)

Write-offs

(38)

(23)

(61)

Recoveries

17

27

44

Translation adjustments

2

2

End of period balance

$
149

$
18

$
7

$
174

Financing receivables:

End of period balance

$
30,235

$
3,772

$
3,017

$
37,024


	Three Months Ended January 30, 2022
	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total
Allowance:
Beginning of period balance	$	138	$	21	$	7	$	166
Provision (credit)		13		(9)		(2)		2
Write-offs		(17)		(5)				(22)
Recoveries		4		8				12
End of period balance	$	138	$	15	$	5	$	158

Financing receivables:
End of period balance	$	31,918	$	2,756	$	2,191	$	36,865

In the first quarter of 2023, the Company determined that the financial services business in Russia met the held for sale criteria. The financing receivables in Russia were reclassified to “Other assets” and the associated allowance for credit losses ~~increased~~was reversed (see Note 20). Excluding the portfolio in Russia, the ~~third quarter and~~allowance for credit losses decreased during the first ~~nine months~~quarter of ~~2022 mainly due~~2023, as the financing receivables continue to ~~higher reserves related to~~benefit from strong fundamentals within the events in Russia / Ukraine and higher portfolio balances. As part of the allowance setting process, the Company continues to monitor the economy, including potential impacts of inflation, commodity prices, and interest rates on portfolio performance and adjustments to the allowance are incorporated, as necessary.agricultural market.

A troubled debt restructuring is the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first nine months of 2022, the Company identified 230 receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $10 million pre-modification and $9 million post-modification. During the first nine months of 2021, the Company identified 304 receivable contracts, primarily retail notes, as troubled debt

restructurings with aggregate balances of $12 million pre-modification and $10 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At July 31, 2022, the Company had no commitments to lend to borrowers whose accounts were modified in troubled debt restructurings.

(9) Securitization of Financing Receivables

As a part of its overall funding strategy, the Company periodically transfers certain financing receivables (retail notes) into VIEs that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

The components of consolidated restricted assets, secured borrowings, and other liabilities related to secured borrowings in securitization transactions were as follows in millions of dollars:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Financing receivables securitized (retail notes)	$	5,156	$	4,673	$	5,421	$	5,102	$	5,952	$	3,526
Allowance for credit losses		(15)		(14)		(20)		(13)		(16)		(10)
Other assets (primarily restricted cash)		136		107		113		97		155		100
Total restricted securitized assets	$	5,277	$	4,766	$	5,514	$	5,186	$	6,091	$	3,616

Short-term securitization borrowings	$	4,920	$	4,605	$	5,277	$	4,864	$	5,711	$	3,482
Accrued interest on borrowings		4		2		2		6		6		1
Total liabilities related to restricted securitized assets	$	4,924	$	4,607	$	5,279	$	4,870	$	5,717	$	3,483

(10) Inventories

~~Most inventories~~A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost on the ~~last-in, first-out~~“last-in, first-out” (LIFO) basis. If all of the Company’s inventories had been valued on a ~~first-in, first-out~~“first-in, first-out” (FIFO) basis, estimated inventories by major classification in millions of dollars would have been as follows:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Raw materials and supplies	$	4,508	$	3,524	$	2,895	$	4,975	$	4,442	$	4,034
Work-in-process		1,621		994		1,124		1,478		1,190		1,460
Finished goods and parts		5,434		4,373		4,176		6,347		5,363		4,790
Total FIFO value		11,563		8,891		8,195		12,800		10,995		10,284
Less adjustment to LIFO value		2,442		2,110		1,785		2,744		2,500		2,349
Inventories	$	9,121	$	6,781	$	6,410	$	10,056	$	8,495	$	7,935

(11) Goodwill and Other Intangible ~~Assets~~–~~Net~~Assets-Net

The changes in amounts of goodwill by operating ~~segments~~segment were as follows in millions of dollars:


	Production &		Small Ag		Construction				Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Total
	Precision Ag		& Turf		& Forestry		Total
Goodwill at November 1, 2020	$	333	$	268	$	2,480	$	3,081
Goodwill at October 31, 2021									$	542	$	265	$	2,484	$	3,291
Acquisition		12						12		7		7		4		18
Translation adjustments		13		(3)		45		55		(5)		(2)		(110)		(117)
Goodwill at August 1, 2021	$	358	$	265	$	2,525	$	3,148
Goodwill at January 30, 2022									$	544	$	270	$	2,378	$	3,192

Goodwill at October 31, 2021	$	542	$	265	$	2,484	$	3,291
Acquisitions		132		69		597		798
Goodwill at October 30, 2022									$	646	$	318	$	2,723	$	3,687
Translation adjustments		(23)		(11)		(301)		(335)		15		7		182		204
Goodwill at July 31, 2022	$	651	$	323	$	2,780	$	3,754
Goodwill at January 29, 2023									$	661	$	325	$	2,905	$	3,891

There were no accumulated goodwill impairment losses in the reported periods.

1816

The components of other intangible assets were as follows in millions of dollars:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Amortized intangible assets:
Customer lists and relationships	$	507	$	542	$	545	$	522	$	493	$	526
Technology, patents, trademarks, and other		1,320		1,104		1,080		1,387		1,301		1,066
Total at cost		1,827		1,646		1,625		1,909		1,794		1,592
Less accumulated amortization:
Customer lists and relationships		162		151		144		184		166		156
Technology, patents, trademarks, and other		384		343		337		470		410		350
Total accumulated amortization		546		494		481		654		576		506
Amortized intangible assets, net		1,281		1,152		1,144
Amortized intangible assets								1,255		1,218		1,086
Unamortized intangible assets:
In-process research and development				123		123						123
Other intangible assets – net	$	1,281	$	1,275	$	1,267	$	1,255	$	1,218	$	1,209

In September 2017, the Company acquired Blue River Technology’s in-process research and development related to machine learning technology to optimize the use of farm inputs. Those research and development activities were completed, and the Company started amortizing the acquired technology in the second quarter of 2022.

The amortization of other intangible assets in the ~~third~~first quarter of 2023 and ~~the first nine months of~~ 2022 was ~~$42~~$39 million and ~~$104 million, and for 2021 was $27 million and $89~~$28 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of ~~2022 – $62,~~ 2023 – ~~$164,~~$132, 2024 – ~~$160,~~$167, 2025 – ~~$133,~~$139, 2026 – ~~$113, and~~$119, 2027 – ~~$112.~~$118, and 2028 – $86.

(12)Short-Term Borrowings

Short-term borrowings were as follows in millions of dollars:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Commercial paper	$	6,035	$	2,230	$	1,882	$	6,425	$	4,703	$	2,135
Notes payable to banks		427		336		133		303		402		519
Finance lease obligations due within one year		21		23		23		23		21		23
Long-term borrowings due within one year		7,693		8,330		8,366		7,378		7,466		8,313
Short-term borrowings	$	14,176	$	10,919	$	10,404	$	14,129	$	12,592	$	10,990

1917

(13)Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses were as follows in millions of dollars:


	January 29		October 30		January 30
	2023		2022		2022
Accounts payable:
Trade payables	$	3,616	$	3,894	$	3,035
Payables to unconsolidated affiliates		10		11		172
Dividends payable		358		343		325
Operating lease liabilities		305		302		267
Deposits withheld from dealers and merchants		153		163		148
Other		156		214		160
Accrued expenses:
Dealer sales discounts		256		1,044		182
Product warranties		1,444		1,427		1,283
Employee benefits		1,015		1,528		765
Accrued taxes		1,336		1,255		974
Unearned operating lease revenue		406		399		385
Unearned revenue (contractual liability)		601		557		567
Extended warranty premium		901		866		781
Accrued interest		371		288		280
Derivative liabilities		891		1,231		276
Other		1,289		1,300		1,051
Total accounts payable and accrued expenses	$	13,108	$	14,822	$	10,651

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $1,540 million at January 29, 2023, $1,280 million at October 30, 2022, and $983 million at January 30, 2022. Other eliminations were made for accrued taxes and other accrued expenses.

~~(13)~~(14)Long-Term Borrowings

Long-term borrowings were as follows in millions of dollars:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Underwritten term debt
U.S. dollar notes and debentures:
2.75% notes due 2025	$	700	$	700	$	700	$	700	$	700	$	700
6.55% debentures due 2028		200		200		200		200		200		200
5.375% notes due 2029		500		500		500		500		500		500
3.10% notes due 2030		700		700		700		700		700		700
8.10% debentures due 2030		250		250		250		250		250		250
7.125% notes due 2031		300		300		300		300		300		300
3.90% notes due 2042		1,250		1,250		1,250		1,250		1,250		1,250
2.875% notes due 2049		500		500		500		500		500		500
3.75% notes due 2050		850		850		850		850		850		850
Euro notes:
.5% notes due 2023 (€500 principal)		510		584		594						557
1.375% notes due 2024 (€800 principal)		816		934		951		871		797		891
1.85% notes due 2028 (€600 principal)		612		701		713		653		598		669
2.20% notes due 2032 (€600 principal)		612		701		713		653		598		669
1.65% notes due 2039 (€650 principal)		663		759		773		708		648		724
Serial issuances
Medium-term notes (principal as of: July 31, 2022 - $22,983, October 31, 2021 - $22,647, August 1, 2021 - $21,892)		22,593		22,899		22,346
Serial issuances:
Medium-term notes: (principal as of: January 29, 2023 - $26,367, October 30, 2022 - $25,629, January 30, 2022 - $22,896)								25,618		24,604		22,947
Other notes and finance lease obligations		1,191		1,178		1,059		1,440		1,223		1,246
Less debt issuance costs and debt discounts		(115)		(118)		(119)		(122)		(122)		(115)
Long-term borrowings	$	32,132	$	32,888	$	32,280	$	35,071	$	33,596	$	32,838

Medium-term notes serially due ~~2023~~ through 2032 are primarily offered by prospectus and issued at fixed and variable rates. These notes are presented in the table above with fair value adjustments related to interest rate swaps. All outstanding notes and debentures are senior unsecured borrowings and ~~generally~~ rank equally with each other.

In April 2022, the Company issued $600 million of sustainability-linked medium-term notes with an initial interest rate of 3.35 percent, which are due in 2029. This transaction supports the Company’s commitment to environmental sustainability. Failure to meet the stated sustainability performance target will result in a 25-basis point increase to the interest rate payable on the 2029 notes from and including April 2026.

~~(14)~~(15)Leases - Lessor

The Company leases equipment manufactured or sold by the Company and a limited amount of non-John Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in Financing receivables -– net on the consolidated balance sheets, while operating leases are reported in Equipment on operating leases -– net.

Lease revenues earned by the Company were as follows in millions of dollars:


	Three Months Ended				Nine Months Ended				Three Months Ended
	July 31, 2022		August 1, 2021		July 31, 2022		August 1, 2021		January 29, 2023		January 30, 2022
Sales-type and direct finance lease revenues	$	39	$	37	$	113	$	107	$	41	$	39
Operating lease revenues		326		359		991		1,079		321		336
Variable lease revenues		6		8		20		23		6		7
Total lease revenues	$	371	$	404	$	1,124	$	1,209	$	368	$	382

Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets, late fees, and excess use and damage fees. Excess use and damage fees are reported in other income on the statements of consolidated income. Excess use and damage fees were $1 million and $2 million for the third quarter and first nine months ended July 31, 2022, respectively, compared with $2 million and $5 million for the same periods last year, respectively.

~~(15)~~(16)Commitments and Contingencies

The Company ~~generally~~ determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is ~~primarily~~ determined by a review of five-year claims costs and current quality developments.

The premiums for extended warranties are ~~primarily~~ recognized in Other income in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. ~~These~~The unamortized extended warranty premiums (deferred revenue) included in the following table totaled ~~$839~~$901 million and ~~$709~~$781 million at ~~July 31,~~January 29, 2023 and January 30, 2022, ~~and August 1, 2021,~~ respectively.

A reconciliation of the changes in the warranty liability and unearned premiums ~~was as follows~~ in millions of ~~dollars:~~dollars follows:


	Three Months Ended				Nine Months Ended				Three Months Ended
	July 31		August 1		July 31		August 1		January 29		January 30
	2022		2021		2022		2021		2023		2022
Beginning of period balance	$	2,095	$	1,876	$	2,086	$	1,743	$	2,293	$	2,086
Payments		(240)		(209)		(657)		(626)		(263)		(193)
Amortization of premiums received		(70)		(66)		(200)		(193)		(83)		(66)
Accruals for warranties		358		299		762		794		255		181
Premiums received		103		96		277		258		106		83
Foreign exchange		(10)		(2)		(32)		18		37		(27)
End of period balance	$	2,236	$	1,994	$	2,236	$	1,994	$	2,345	$	2,064

At ~~July 31, 2022,~~January 29, 2023, the Company had ~~approximately $330~~$235 million of guarantees issued ~~primarily~~ to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At ~~July 31, 2022,~~January 29, 2023, the ~~Company had~~ accrued losses ~~of $4 million~~ under these ~~agreements.~~agreements were not material. The maximum remaining term of the receivables guaranteed at ~~July 31, 2022~~January 29, 2023 was ~~approximately six~~about seven years.

At ~~July 31, 2022,~~January 29, 2023, the Company had commitments of ~~$468~~$467 million for the construction and acquisition of property and equipment. Also, at ~~July 31, 2022,~~January 29, 2023, the Company had restricted assets of ~~$77~~$269 million, classified as ~~Other~~“Other assets. ~~See Note 9 for additional restricted assets associated with borrowings related to securitizations.~~”

The Company also had other miscellaneous contingent liabilities and guarantees totaling approximately $90 million at ~~July 31, 2022.~~January 29, 2023. The accrued liability for these contingencies was not material at ~~July 31, 2022.~~January 29, 2023.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, trademark, and antitrust matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial ~~statements.~~statements.

~~(16)~~(17) Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities.

July 31, 2022

October 31, 2021

August 1, 2021

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value

Financing receivables – net

$
35,056

$
34,158

$
33,799

$
33,718

$
31,449

$
31,515

Financing receivables securitized – net

5,141

4,990

4,659

4,704

5,401

5,467

Short-term securitization borrowings

4,920

4,862

4,605

4,610

5,277

5,302

Long-term borrowings due within one year

7,693

7,608

8,330

8,364

8,366

8,440

Long-term borrowings

32,101

31,741

32,850

34,506

32,238

34,345


	January 29, 2023				October 30, 2022				January 30, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financing receivables – net	$	36,882	$	35,894	$	36,634	$	35,526	$	33,191	$	33,033
Financing receivables securitized – net		5,089		4,869		5,936		5,698		3,516		3,530
Short-term securitization borrowings		4,864		4,785		5,711		5,577		3,482		3,468
Long-term borrowings due within one year		7,378		7,220		7,466		7,322		8,313		8,322
Long-term borrowings		35,035		34,149		33,566		31,852		32,806		33,843

Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings.

Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts.

Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges.

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted ~~primarily~~ of money market funds and time deposits.


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Level 1:
Marketable securities
International equity securities	$	2	$	2	$	3	$	2	$	3	$	2
U.S. equity fund		75		75		74		86		70		72
U.S. fixed income fund								118
U.S. government debt securities		63		59		60		64		62		63
Total Level 1 marketable securities		140		136		137		270		135		137

Level 2:
Marketable securities
U.S. government debt securities		134		139		124		127		121		138
Municipal debt securities		70		73		71		71		63		74
Corporate debt securities		213		224		217		209		200		229
International debt securities		1		2		3		18		60		2
Mortgage-backed securities		161		154		136		157		155		155
Total Level 2 marketable securities		579		592		551		582		599		598
Other assets
Derivatives		280		275		432
Accounts payable and accrued expenses
Derivatives		667		228		152
Other assets – Derivatives								360		373		299
Accounts payable and accrued expenses – Derivatives								891		1,231		276
				��
Level 3:
Accounts payable and accrued expenses – Deferred consideration		252						225		236

2220

The contractual maturities of debt securities at ~~July 31, 2022~~January 29, 2023 in millions of dollars are shown below. Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Mortgage-backed securities were primarily issued by U.S. government-sponsored enterprises. Unrealized losses of debt securities at July 31, 2022 were not recognized in income due to the ability and intent to hold to maturity.


	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	23	$	23	$	35	$	35
Due after one through five years		98		95		111		105
Due after five through 10 years		189		175		197		176
Due after 10 years		211		188		204		173
Mortgage-backed securities		176		161		182		157
Debt securities	$	697	$	642	$	729	$	646

Fair value, nonrecurring Level 3 measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. ~~Property and equipment – net and Other assets fair values for October 31, 2021 represent the fair value assessments at January 31, 2021.~~


	Fair Value					Losses							Fair Value				Losses
						Three Months Ended			Nine Months Ended								Three Months Ended
	July 31		October 31		August 1	July 31		August 1	July 31		August 1		January 29	October 30		January 30	January 29	January 30
	2022		2021		2021	2022		2021	2022		2021		2023	2022		2022	2023	2022
Inventories	$	13				$	4		$	12				$	19
Property and equipment – net			$	41					$	41	$	44			15
Other intangible assets – net									$	28
Other assets			$	1							$	6

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet ~~items~~ at fair value:

Marketable securities – The portfolio of investments is ~~primarily~~ valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are ~~primarily~~ valued using closing prices in the ~~fund’s net asset value, based on~~active market in which the ~~fair value of the underlying securities.~~investment trades.

Derivatives – The Company’s derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Financing receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). ~~Inputs include a selection of realizable values.~~

Inventories – The ~~service parts inventory~~ impairment was based on net realizable ~~value, less reasonably predictable selling and disposal costs.~~value.

Property and equipment –- net – The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence.

~~Other intangible assets – net – The Company considered external valuations based on the Company’s probability weighted cash flow analysis.~~

~~Other assets – The impairments were measured at the fair value of the right of use operating lease asset.~~

~~(17)~~(18) Derivative Instruments

~~It is the~~The Company’s policy ~~that~~is to execute derivative transactions ~~are executed only~~ to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The ~~Company’s~~ financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to

diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate and foreign currency ~~exposures~~exposure at certain equipment operations units for sales incentive programs.

All derivatives are recorded at fair value on the balance ~~sheet.~~sheets. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. The cash flows from ~~these~~the derivative contracts ~~are~~were recorded in operating activities in the statements of consolidated cash flows. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at

inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

Cash Flow Hedges

Certain interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021~~January 30, 2022 were ~~$2,350~~$1,950 million, ~~$2,700~~$1,950 million, and ~~$1,750~~$2,700 million, respectively. Fair value gains or losses on cash flow hedges were recorded in other comprehensive income (OCI) and are subsequently reclassified into interest expense in the same periods during which the hedged transactions ~~affects~~impact earnings. These amounts offset the effects of interest rate changes on the related borrowings.

The amount of gain recorded in OCI at ~~July 31, 2022~~January 29, 2023 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is ~~approximately $31~~$38 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair Value Hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021~~January 30, 2022 were ~~$8,303~~$10,802 million, ~~$8,043~~$10,112 million, and ~~$8,658~~$8,307 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows in millions of dollars. Fair value hedging adjustments are included in the carrying amount of the hedged item.


	Active Hedging Relationships				Discontinued Hedging Relationships				Active Hedging Relationships				Discontinued Hedging Relationships
	Carrying Amount		Cumulative Fair Value		Carrying Amount of		Cumulative Fair Value		Carrying Amount		Cumulative Fair Value		Carrying Amount of		Cumulative Fair Value
	of Hedged Item		Hedging Amount		Formerly Hedged Item		Hedging Amount		of Hedged Item		Hedging Amount		Formerly Hedged Item		Hedging Amount
July 31, 2022
January 29, 2023
Short-term borrowings					$	2,605	$	5					$	1,915	$	15
Long-term borrowings	$	7,835	$	(430)		5,728		39	$	10,088	$	(666)		5,506		(83)

October 31, 2021
October 30, 2022
Short-term borrowings	$	191	$	3	$	1,997	$	(2)					$	2,515	$	15
Long-term borrowings		7,847		29		6,287		223	$	9,060	$	(1,006)		5,520		(19)
								��
August 1, 2021
January 30, 2022
Short-term borrowings	$	189	$	4	$	1,898	$	(1)	$	177	$	2	$	2,357	$	8
Long-term borrowings		8,698		263		5,831		190		7,966		(130)		5,447		181

Derivatives ~~Not Designated~~not designated as ~~Hedging Instruments~~hedging instruments

The Company has certain interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures ~~primarily~~ for certain borrowings, purchases or sales of inventory, and sales incentive programs. The total notional amounts of these interest rate swaps at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021~~January 30, 2022 were ~~$9,880~~$11,147 million, ~~$10,848~~$10,568 million, and ~~$9,195~~$10,210 million, the foreign exchange contracts were ~~$7,457~~$9,304 million, ~~$7,584~~$8,185 million, and ~~$6,328~~$7,864 million, and the cross-currency interest rate contracts were ~~$276~~$234 million, ~~$238~~$260 million, and ~~$197~~$303 million, respectively. The fair value gains or losses from derivatives not designated as hedging instruments were recorded in the statements of consolidated income, generally offsetting over time the exposure on the hedged item.

2422

Fair values of derivative instruments in the condensed consolidated balance sheets ~~were as follows~~ in millions of ~~dollars:~~dollars follow:


	July 31		October 31		August 1		January 29		October 30		January 30
Other Assets	2022		2021		2021		2023		2022		2022
Designated as hedging instruments:
Interest rate contracts	$	82	$	166	$	332	$	90	$	87	$	102

Not designated as hedging instruments:
Interest rate contracts		163		73		57		188		212		82
Foreign exchange contracts		30		31		41		71		66		91
Cross-currency interest rate contracts		5		5		2		11		8		24
Total not designated		198		109		100		270		286		197

Total derivative assets	$	280	$	275	$	432	$	360	$	373	$	299

Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	434	$	99	$	40	$	678	$	1,004	$	185

Not designated as hedging instruments:
Interest rate contracts		79		33		43		97		107		27
Foreign exchange contracts		149		94		67		110		118		64
Cross-currency interest rate contracts		5		2		2		6		2
Total not designated		233		129		112		213		227		91

Total derivative liabilities	$	667	$	228	$	152	$	891	$	1,231	$	276

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statements of consolidated income consisted of the following in millions of dollars:


	Three Months Ended				Nine Months Ended				Three Months Ended
	July 31		August 1		July 31		August 1		January 29		January 30
	2022		2021		2022		2021		2023		2022
Fair Value Hedges:
Fair Value Hedges
Interest rate contracts - Interest expense	$	149	$	146	$	(507)	$	(79)	$	239	$	(141)

Cash Flow Hedges:
Recognized in OCI
Cash Flow Hedges
Recognized in OCI:
Interest rate contracts - OCI (pretax)	$	1	$	(1)	$	52	$	(1)	$	(1)	$	15
Reclassified from OCI

Reclassified from OCI:
Interest rate contracts - Interest expense		3		(3)				(11)		15		(2)

Not Designated as Hedges:
Not Designated as Hedges
Interest rate contracts - Net sales			$	(2)	$	44	$	3	$	(7)	$	13
Interest rate contracts - Interest expense *	$	(18)		(2)		41		(6)		(8)		(1)
Foreign exchange contracts - Net sales		(1)				(2)				1
Foreign exchange contracts - Cost of sales		(29)		(7)		(109)		(107)		5		(1)
Foreign exchange contracts - Other operating expenses *		(20)		(5)		153		(209)		(142)		147
Total not designated	$	(68)	$	(16)	$	127	$	(319)	$	(151)	$	158

* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination.

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with

credit-risk-related contingent features that were in a net liability position at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021,~~January 30, 2022 was ~~$518~~$781 million, ~~$135~~$1,113 million, and ~~$87~~$213 million, respectively. In accordance with the limits established in these agreements, the Company posted ~~$238~~$349 million, $701 million, and $18 million of cash collateral at ~~July 31, 2022. The Company posted no cash collateral in accordance with the limits established in those agreements at either~~January 29, 2023, October ~~31, 2021 or August 1, 2021.~~30, 2022, and January 30, 2022, respectively. In addition, the Company paid $8 million of ~~cash~~ collateral that was outstanding at ~~July 31,~~January 29, 2023, October 30, 2022, ~~October 31, 2021,~~ and ~~August 1, 2021~~January 30, 2022 to participate in an international futures market to hedge currency exposure, not included in the table below.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid ~~was as follows~~ in millions of ~~dollars:~~dollars follows:

Gross Amounts

Netting

July 31, 2022

Recognized

Arrangements

Collateral

Net Amount

Assets

$
280

$
(125)

$
(40)

$
115

Liabilities

667

(125)

(238)

304


	Gross Amounts		Netting
January 29, 2023	Recognized		Arrangements		Collateral		Net Amount
Assets	$	360	$	(162)	$	(47)	$	151
Liabilities		891		(162)		(349)		380

October 30, 2022
Assets	$	373	$	(179)	$	(54)	$	140
Liabilities		1,231		(179)		(701)		351

January 30, 2022
Assets	$	299	$	(91)			$	208
Liabilities		276		(91)	$	(19)		166

Gross Amounts

Netting

October 31, 2021

Recognized

Arrangements

Collateral

Net Amount

Assets

$
275

$
(105)

$
170

Liabilities

228

(105)

$
(5)

118

Gross Amounts

Netting




August 1, 2021

Recognized

Arrangements

Collateral

Net Amount

Assets

$
432

$
(94)

$
(88)

$
250

Liabilities

152

(94)

(2)

56

~~(18)~~(19) Stock Option and Restricted Stock Unit Awards

In December ~~2021,~~2022, the Company granted stock options to employees for the purchase of ~~197~~161 thousand shares of common stock at an exercise price of ~~$343.94~~$438.44 per share and a binomial lattice model fair value of ~~$89.20~~$136.46 per share at the grant date. At ~~July 31, 2022,~~January 29, 2023, options for ~~2.1~~2.0 million shares were outstanding with a weighted-average exercise price of ~~$152.12~~$178.86 per share. The Company also granted ~~165~~112 thousand of service-based restricted stock units and 41 thousand of performance/service-based restricted stock units to employees ~~and non-employee directors~~ in the first ~~nine~~three months of ~~2022, of which 128 thousand are subject to service-based only conditions and 37 thousand are subject to performance/service-based conditions.~~2023. The weighted-average fair value of the service-based ~~only~~restricted stock units at the grant date was ~~$346.46~~$434.02 per unit based on the market price of a share of underlying common stock. The fair value of the performance/service-based restricted stock units at the grant date was ~~$331.47~~$424.93 per unit based on the market price of a share of underlying common stock excluding dividends. At ~~July 31, 2022,~~January 29, 2023, the Company was authorized to grant awards for an additional ~~17.3~~16.6 million shares under the equity incentive ~~plan.~~plans.

~~(19)~~ (20) S~~Acquisitions~~pecial Items

~~Kreisel Acquisition~~

OnIn the first quarter of 2022, Net sales from the Company’s Russian operations represented 2 percent of Deere’s consolidated Net sales. Sales in the region were impacted as the Company suspended shipments of machines and service parts to Russia beginning in February 7,2022. As of January 29, 2023 and October 30, 2022, the ~~Company acquired majority ownership~~Company’s net exposure in ~~Kreisel Electric Inc. (Kreisel), a pioneer in the development of immersion-cooled battery technology. The Austrian company manufactures high-density, high-durability electric battery modules~~Russia / Ukraine was approximately $229 million and ~~packs for high-performance and off-highway applications and has created a battery-buffered, high-powered charging infrastructure platform.~~

The transaction includes a call option to purchase the remaining ownership interest in Kreisel in 2027. The minority interest holders also have a put option that would require the Company to purchase the holder’s ownership interest in 2027. The put and call options cannot be separated from the noncontrolling interest. Due to the redemption features, the minority interest is classified as redeemable noncontrolling interest in the Company’s consolidated balance sheets.

~~The total cash purchase price was $276~~$266 million, consisting of $253 million for the acquired equity interests, $21 million to reduce the option price, and customary working capital adjustments, net of cash acquired. The preliminary fair values assignedrespectively.

2624

In January 2023, the Company reached an agreement to ~~the assets and liabilities~~sell its financial services business in Russia (registered in Russia as a leasing company). The completion of the ~~acquired entity~~transaction is expected in ~~millions of dollars, which is based on information as of the acquisition date and available at July 31, 2022 follows:~~

February 7

2022

Trade accounts and notes receivable

$
2

Other receivables

11

Inventories

11

Property and equipment

11

Goodwill

218

Other intangible assets

178

Other assets

6

Total assets

$
437

Accounts payable and accrued expenses

$
27

Deferred income taxes

38

Redeemable noncontrolling interest

$
96

The identifiable intangible assets were related to technology, trade name, and customer relationships with a weighted average amortization period of 12 years. The goodwill is not deductible for income tax purposes. Kreisel will be allocated amongst the Company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments.

~~Acquisition of Excavator Factories~~

On February 28, 2022, the Company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi Construction Machinery (Hitachi). The two companies also ended their joint venture manufacturing and marketing agreements. The former joint venture factories will continue to manufacture Deere-branded construction excavators and forestry equipment. Through a new supply agreement with Hitachi, Deere will continue to offer a full portfolio of excavators. Deere’s marketing arrangement for Hitachi-branded construction excavators and mining equipment in the Americas has ended with Hitachi assuming distribution and support of these products. John Deere dealers may continue to support their existing field population of Hitachi-branded excavators.

With the completion of this acquisition, the Company now has complete control over its excavator design, product, and feature updates, making it possible to more rapidly respond to customer requirements and integrate excavators with other construction products in the John Deere product portfolio. The Company can leverage technology developed for other product lines and production systems across the enterprise and extend those advanced solutions to Deere-designed excavators, strengthening the entire product portfolio.

~~The total invested capital follows:~~

February 28

2022

Cash consideration for factories

$
205

Cash consideration for license agreement

70

Deferred consideration

271

Total purchase price consideration

546

Less: Cash obtained

(187)

Less: Settlement of intercompany balances

(113)

Net purchase price consideration

246

Fair value of previously held equity investment

444

Total invested capital

$
690

The total purchase price consideration includes deferred consideration that will be paid as the Company purchases Deere-branded excavators, components, and service parts from Hitachi under the new supply agreement with a duration that ranges from 5 to 30 years. The deferred consideration represents the price increases under the new supply arrangement. Excluding inflation adjustments, the price increases for products to be acquired by the Company from Hitachi are as much as 27 percent higher than the prior supply arrangement. At July 31, 2022, the net present value of the deferred consideration was approximately $252 million, subject to changes in market conditions, developments in the Company’s product offerings, and sourcing changes. The Company financed the acquisition and associated transaction expenses from cash on hand. The fair value of the previously held equity investment created a non-cash gain of $326 million (pretax and ~~after-tax), which was recorded in Other income and included in the construction and forestry segment’s operating profit.~~

Prior to the acquisition, the Company purchased Deere and Hitachi-branded excavators, components, and parts from the Deere-Hitachi joint venture factories for sale to John Deere dealers. These purchases were included in Cost of sales, while the sales to John Deere dealers were included in Net sales. Cost of sales also included profit-sharing payments to Hitachi in accordance with the previous marketing agreements. Following the acquisition, Net sales will only include the sale of Deere-branded excavators to John Deere dealers, while Cost of sales will reflect market pricing to purchase and manufacture excavators, as well as the related components and service parts.

The preliminary fair values assigned to the assets and liabilities of the acquired factories in millions of dollars, which are based on information as of the acquisition date and available at July 31, 2022, follows:

February 28

2022

Other receivables

$
29

Inventories

286

Property and equipment

182

Goodwill

527

Other intangible assets

70

Deferred income taxes

56

Total assets

$
1,150

Accounts payable and accrued expenses

$
297

Long-term borrowings

163

Total liabilities

$
460

~~The identifiable intangible assets were related to technology with a~~ ~~10-year~~ ~~amortization period. The goodwill is not deductible for income tax purposes. The excavator factories will be reported in the Company’s construction and forestry segment.~~

~~Other Acquisitions~~

In the first nine months of the year, the Company acquired AgriSync Inc. (AgriSync), a technology service provider; an 80 percent stake in both SureFire Ag Systems, Inc. and SureFire Electronics, LLC (together SureFire), which design and manufacture liquid fertilizer application and spray tendering systems; a 40 percent equity method investment in GUSS Automation LLC (GUSS Automation), a pioneer in semi-autonomous orchard and vineyard sprayers; and LGT, LLC (Light), which specializes in depth sensing and camera-based perception for autonomous vehicles. The combined cost of the acquisitions was $124 million, net of cash acquired of $3 million. The preliminary asset and liability fair values at the respective acquisition dates follow in millions of dollars:

July 31

2022

Trade accounts and notes receivable

$
8

Inventories

8

Property and equipment

4

Goodwill

53

Other intangible assets

21

Other assets

50

Total assets

$
144

Accounts payable and accrued expenses

$
6

Deferred income taxes

5

Total liabilities

$
11

Redeemable noncontrolling interest

$
9

The identifiable intangible assets were related to trade name, technology, and customer relationships with a weighted average amortization period of 7 years. AgriSync will be allocated amongst the Company’s production and precision agriculture, small agriculture and turf, and construction and forestry segments, while SureFire and Light will be allocated to the production and precision agriculture segment. GUSS Automation will be assigned to the small agriculture and turf segment.

For all acquisitions, the goodwill was the result of future cash flows and related fair value exceeding the fair value of the identified assets and liabilities. Presenting the pro forma results of operations as if these acquisitions had occurred at the beginning of the current or comparative fiscal year would not differ significantly from the reported results.

~~(20)~~ S~~pecial Items~~

~~2022 Special Items~~

~~Impact of Events in Russia / Ukraine~~

The events in Russia / Ukraine have resulted in the Company suspending shipments of machines and service parts to Russia. The Company manufactures and markets equipment in Russia / Ukraine, and provides financial services in Russia. As of July 31, 2022, the Company’s net exposure in Russia / Ukraine was approximately $436 million. Net sales from the Company’s Russian operations represented 2 percent of consolidated annual Net sales from 2017 to 2021. The Ukraine operations were not material to the consolidated financial statements.

The suspension of shipments to Russia will reduce forecasted revenue for the region, which makes it probable future cash flows will not cover the carrying value of certain assets. The accounting consequences during the second quarter of ~~2022 were impairments of most long-lived assets, an increase in reserves of certain financial~~2023. The assets and ~~an accrual for various contractual uncertainties. No significant reserves~~liabilities were ~~established on trade receivables or complete goods inventory,~~classified as “Other assets” and “Accounts payable and accrued expenses”, respectively, which include $100 million of restricted cash. In the first quarter of 2023, the Company ~~continues to experience strong payment performance and requires prepayment of existing inventories. During~~reversed the ~~third quarter of 2022, the Company initiated a voluntary employee-separation program, updated reserves on assets, and reassessed accruals~~allowance for contractual uncertainties. The Russian government has imposed certain restrictions on companies’ abilities to repatriate or remit cash from their Russian-based operations to locations outside of Russia. Cash in excess of what is required to fund operations in Russia has been reclassified as restrictedcredit losses and recorded a valuation allowance on the assets held for sale in ~~Other assets.~~“Selling, administrative and general expenses.” The Company continues to closely monitor all financial risks to its operations in the region. A summary of the reserves, impairments, voluntary-separation costs, and contingent liabilities recorded in the first nine months of 2022 follows in millions of dollars:

Nine Months Ended July 31, 2022

PPA

SAT

CF

FS

Total

2022 Expense:

Inventory reserve – Cost of sales

$
8

$
4

$
12

Fixed asset impairment – Cost of sales

30

11

41

Intangible asset impairment – Cost of sales

28

28

Allowance for credit losses – Financing receivables – SA&G expenses

$
32

32

Voluntary-separation program – Cost of sales

1

1

Voluntary-separation program – SA&G expenses

3

4

1

8

Contingent liabilities – Other operating expenses

3

$
1

1

5

Total Russia/Ukraine events pretax expense

$
45

$
1

$
48

$
33

127

Net tax impact

(8)

Total Russia/Ukraine events after-tax expense

$
119

~~Gain on Previously Held Equity Investment~~

On February 28, 2022, the Company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi. The fair value of the previous equity investment resulted indoes not expect a ~~non-cash~~significant gain ~~of $326 million (pretax and~~ ~~after-tax; see Note 19).~~

~~UAW Collective Bargaining Agreement~~or loss upon disposition.

On November 17, 2021, employees represented by the ~~UAW~~International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) approved a new collective bargaining agreement. The agreement, which has a term of six years, covers the wages, hours, benefits, and other terms and conditions of employment for the Company’s UAW-represented employees at 14 U.S. facilities. The labor agreement ~~includes~~included a lump sum ratification bonus payment of $8,500 per eligible employee, totaling $90 million, and an immediate wage increase of 10 percent plus further wage increases over the term of the contract. The lump sum payment was expensed in the first quarter of 2022. ~~The Company remeasured the U.S. hourly pension plan as of November 30, 2021 due to the new collective bargaining agreement. See Note 6 for more information on the U.S. hourly plan remeasurement.~~

~~2021 Special Items~~

In the third quarter of 2021, the Company sold a closed factory that previously produced small agricultural equipment in China, resulting in a $27 million pretax gain. During the first quarter of 2021, the fixed assets in an asphalt plant factory in Germany were impaired by $38 million, pretax and ~~after-tax~~. The Company also continued to assess its manufacturing locations, resulting in additional long-lived asset impairments of $12 million pretax. The impairments were the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. These impairments were offset by a favorable indirect tax ruling in Brazil of $58 million pretax. See Note 16 for fair value measurement information.

The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months ended January 30, 2022:


	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Total
UAW ratification bonus – Cost of sales	$	53	$	9	$	28	$	90

(21)Subsequent Events

In February 2023, the Company entered into two retail note securitization transactions. The first transaction resulted in $307 million of secured borrowings. The second transaction will result in $983 million of secured borrowings and ~~nine months ended July~~is expected to settle in March 2023.

On February 22, 2023, the Company’s Board of Directors declared a quarterly dividend of $1.25 per share payable on May 8, 2023, to stockholders of record on March 31, ~~2022 and August 1, 2021:~~2023.

Three Months

Nine Months

PPA

SAT

CF

FS

Total

PPA

SAT

CF

FS

Total

2022 Expense (benefit):

Gain on remeasurement of equity investment – Other income (see Note 19)

$
(326)

$
(326)

Total Russia/Ukraine events pretax expense

$
(1)

$
1

$
7

$
7

$
45

$
1

48

$
33

127

UAW ratification bonus – Cost of sales

53

9

28

90

Total expense (benefit)

(1)

1

7

7

98

10

(250)

33

(109)

2021 Expense (benefit):

Gain on sale – Other income

$
(27)

(27)

(27)

(27)

Long-lived asset impairments – Cost of sales

5

3

42

50

Brazil indirect tax – Cost of sales

(53)

(5)

(58)

Total expense (benefit)

(27)

(27)

(48)

(24)

37

(35)

Period over period change

$
(1)

$
27

$
1

$
7

$
34

$
146

$
34

$
(287)

$
33

$
(74)

3025

~~ITEM~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Overview

Organization

The Company generates net sales ~~primarily~~ from the sale of equipment to John Deere dealers and distributors. The Company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the “equipment operations”) are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The Company’s financial services segment ~~primarily~~ provides credit services, which ~~mainly~~ finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.

Smart Industrial Operating Model and Leap Ambitions

The Company’s Smart Industrial operating model is focused on making significant investments, strengthening the Company’s capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The Company’s Leap Ambitions are goals designed to boost economic value and sustainability for the Company’s customers. The Company anticipates opportunities in this area, as the Company and its customers have a vested interest in sustainable practices.

In February 2023, the Company released its 2022 Sustainability Report, available at JohnDeere.com/sustainability. This report identifies important progress on the Company’s Leap Ambitions in fiscal year 2022. The information in our 2022 Sustainability Report is not incorporated by reference into, and does not form a part of, this Form 10-Q.

Trends and Economic Conditions

Industry Trends for Fiscal Year ~~2022~~2023

– Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are ~~expected~~forecasted to ~~be up about 15 percent.~~increase 5 to 10 percent compared to 2022. Industry sales of small ~~agriculture~~agricultural and turf equipment in the U.S. and Canada are expected to be ~~flat.~~down about 5 percent in 2023. Industry sales of agricultural machinery in Europe are ~~forecast~~forecasted to be ~~flat. In~~flat to up 5 percent, while South ~~America,~~American industry sales of tractors and combines are projected to be up about 10 to 15 percent. Asia industry sales of agricultural machinery are forecast to be down moderately. Construction equipment industry sales in the U.S. and Canada are expected to increase about 10 percent, while compact construction equipment industry sales in the U.S. and Canada are anticipated to be flat to down 5 percent. Forestry global industry equipment sales are expected to be flat to ~~down~~up 5 ~~percent. Global roadbuilding equipment~~percent in 2023. Asia industry sales are forecasted to be down moderately in 2023. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 ~~percent.~~percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat.

Company Trends – Customers’ demand for integration of technology into equipment is a market trend underlying the Company’s Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The Company’s approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and alternative propulsion technologies. This technology is incorporated into products within each of the Company’s operating segments.

Customers continue to adopt technology integrated in the John Deere portfolio of “smart” machines, systems, and solutions. The Company expects this trend to persist for the foreseeable future.

Demand for the Company’s equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The North American retail customer fleet age of combines and large tractors remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. The Company expects the replenishment of dealer stock inventory to occur in 2024. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains. The Company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend are expected to offset moderation in residential

home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and parts of Asia. Net income for the Company’s financial services operations is expected to be ~~slightly~~ lower than fiscal year ~~2021~~2022 due to ~~a higher provision for credit losses,~~ less-favorable financing spreads ~~and~~as a result of heightened interest rates, higher selling, administrative and general ~~expenses.~~expenses, and lower gains on operating-lease dispositions, partially offset by higher average portfolio balances.

Additional Trends – The Company experienced supply chain disruptions and inflationary pressures in 2022. These ~~factors~~trends continued into 2023. While these are two distinct issues and discussed separately below, their impact may be intertwined.

Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and higher inventory levels. Past due deliveries from suppliers were at elevated levels during 2022. Although past due deliveries remain elevated, the Company experienced improvement during the first quarter of 2023. The reduction in supply chain disruptions contributed to higher levels of production. The Company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand:

•Worked with the supply base to obtain allocations and improve on-time deliveries of parts.

•Multi-sourced some parts and materials.

•Provided resources to suppliers to address constraints.

•Entered into long-term contracts for some critical components.

•Utilized alternative freight carriers to expedite delivery.

While supply chain disruptions are expected to persist into 2023, the Company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably. Although the Company experienced some improvement in this area during the first quarter of 2023, concerns remain and this issue could impact our ability to meet customer demand in the remainder of 2023.

Inflation has continued to be ~~partially~~a pervasive feature in 2023, increasing the cost of purchased components, energy, salaries, and wages. Higher costs due to general business inflation were offset by ~~income earned~~price realization, which mitigated the impact of inflation on the Company’s operating results. The Company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the Company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the Company’s operations and financial condition.

Central bank policy interest rates increased in the first quarter of 2023 and are projected to continue to increase during 2023 but at a ~~higher average portfolio.~~moderating pace compared to 2022. Most retail receivables are fixed rate, while wholesale financing receivables are floating rate. The Company has both fixed and floating rate borrowings. The Company manages the risk of interest rate fluctuations by balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the Company enters into interest rate swap agreements to manage its interest rate exposure. Historically, rising interest rates impact the Company’s borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the Company’s financial services operations experienced $53 million (after-tax) of less favorable financing spreads in the first quarter of 2023 compared to 2022. The Company expects spread compression to persist during 2023.

Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the Company’s control, and as a result, the Company cannot reasonably foresee when these conditions will subside.

Items of Concern and Uncertainties – Other items of concern include global and regional political conditions, economic and trade policies, ~~inflationary pressures, the ongoing pandemic,~~imposition of new or retaliatory tariffs against certain countries or covering certain products, post-pandemic effects, capital market disruptions, changes in demand and pricing for new and used equipment, ~~and the other items discussed in the “Forward-Looking Statements” below. Significant~~significant fluctuations in foreign currency exchange rates, and volatility in the prices of many ~~commodities, and supply chain disruptions~~commodities. These items could ~~also~~ impact the Company’s results.

The Company’s third quarter results reflect increased factory output and shipments to customers while supply chain pressures endure. Also during the third quarter, the Company experienced higher costs and production inefficiencies from these supply chain pressures. The Company is ~~confident favorable conditions will continue into fiscal year 2023 based on strong underlying fundamentals~~making investments in technology and ~~customer responses to early-order programs. The Company’s factories~~in strengthening its capabilities in digital, automation, autonomy, and ~~suppliers are also preparing for higher levels~~alternative propulsion technologies. As with most technology investments, marketplace adoption and monetization of customer demand in 2023. Additionally, the Company believes the smart industrial operating model and recently announced leap ambitions will create value for customers through the Company’s advanced technologies and solutions.

~~Impact~~these features holds an elevated level of ~~Events in Russia / Ukraine~~

The events in Russia / Ukraine have impacted the safety, welfare, and well-being of the Company’s employees in the region. The Company’s top priority is to support and maintain close communication with its affected teams, providing necessary resources when possible. The Company has suspended shipments of machines and service parts to Russia. These events are impacting business continuity, liquidity, and asset values for the Company’s operations in Russia / Ukraine (see Note 20).uncertainty.

3127

~~2022~~2023 Compared with ~~2021~~2022


	Three Months Ended					Nine Months Ended					Three Months Ended
Deere & Company	July 31		August 1		%	July 31		August 1		%	January 29		January 30
(In millions of dollars, except per share amounts)	2022		2021		Change	2022		2021		Change	2023		2022
Net sales and revenues	$	14,102	$	11,527	+22	$	37,041	$	32,697	+13	$	12,652	$	9,569
Net income attributable to Deere & Company		1,884		1,667	+13		4,885		4,680	+4		1,959		903
Diluted earnings per share		6.16		5.32			15.88		14.86			6.55		2.92

~~Results for~~Net income in the ~~third~~first quarter ~~and year-to-date periods~~ of 2022 ~~and 2021 were~~was impacted by special items. ~~More information on these special items is provided in~~See Note ~~20.~~20 for additional details. The discussion ~~on Net~~of net sales and operating profit is included in the Business Segment Results below.

Three Months Ended

Nine Months Ended

Deere & Company

July 31

August 1

%

July 31

August 1

%

(In millions of dollars)

2022

2021

Change

2022

2021

Change

Cost of sales to net sales

73.2%

72.7%

74.9%

72.3%

Other income

$
256

$
289

-11

$
1,035

$
768

+35

Research and development expenses

481

394

+22

1,336

1,137

+18

Selling, administrative and general expenses

959

841

+14

2,672

2,448

+9

Other operating expenses

316

324

-2

954

1,033

-8

Provision for income taxes

654

491

+33

1,364

1,328

+3

~~The~~An explanation of the cost of sales to net sales ratio ~~increased in the third quarter~~ and ~~the first nine months~~other significant statement of ~~fiscal 2022 primarily~~consolidated income changes follows:


	Three Months Ended
Deere & Company	January 29		January 30
(In millions of dollars)	2023		2022		% Change
Cost of sales to net sales		69.6%		78.5%

Other income	$	256	$	238	+8
Research and development expenses		495		402	+23
Selling, administrative and general expenses		952		781	+22
Other operating expenses		299		311	-4
Provision for income taxes		537		250	+115

The cost of sales ratio decreased due to ~~higher production costs~~price realization, partially offset by ~~price realization. Other income decreased in the third quarter~~higher production costs. Inefficiencies due to athe delayed ratification of the UAW labor agreement and contract-ratification bonus costs affected the prior period ~~gain on sale~~cost of ~~a closed factory in China. Other income increased in the first nine months due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture.~~sales ratio (see Note 20). Research and development expenses were higher ~~for both periods~~ due to continued focus on developing and incorporating technology solutions. Selling, administrative and general expenses increased ~~in the third quarter and the first nine months primarily~~mostly due to a higher ~~provision for credit losses, including higher reserves due to the events in Russia / Ukraine, as well as a higher merit~~employee pay ~~increase due to~~driven by inflationary ~~conditions. Other operating expenses decreased in the third quarter~~conditions and ~~the first nine months primarily due to lower depreciation of equipment on operating leases, while lower retirement benefit costs impacted the first nine months.~~profit-sharing incentives. The provision for income taxes ~~increased in the third quarter due to~~was higher as a result of higher pretax ~~income and unfavorable discrete income-tax adjustments.~~income.

3228

Business Segment Results

For the equipment operations, higher production costs were mostly due to elevated cost of purchased components, energy, salaries, and wages.

Three Months Ended

Nine Months Ended

Production and Precision Agriculture

July 31

August 1

%

July 31

August 1

%

(In millions of dollars)

2022

2021

Change

2022

2021

Change

Net sales

$
6,096

$
4,250

+43

$
14,568

$
11,848

+23

Operating profit

1,293

906

+43

2,646

2,557

+3

Operating margin

21.2%

21.3%

18.2%

21.6%

Price realization

+15

+12

Currency translation

-4

-2


	Three Months Ended
Production and Precision Agriculture	January 29		January 30
(In millions of dollars)	2023		2022		% Change
Net sales	$	5,198	$	3,356	+55
Operating profit		1,208		296	+308
Operating margin		23.2%		8.8%
Price realization					+22
Currency translation					-1

Production and precision agriculture sales increased for the quarter ~~due to~~as a result of higher shipment volumes (primarily in the U.S., Canada, and Latin America) and price realization ~~partially offset by the unfavorable impact of currency translation.~~in most end markets. Operating profit ~~rose~~improved primarily due to price realization and ~~higher~~improved shipment ~~volumes~~volume / ~~sales mix.~~mix as a result of improved supply chain conditions. These items were partially offset by higher production costs ~~higher~~and increased selling, administrative and general expenses and research and development expenses. The UAW contract-ratification bonus costs affected the prior period.


	Three Months Ended
Small Agriculture and Turf	January 29		January 30
(In millions of dollars)	2023		2022		% Change
Net sales	$	3,001	$	2,631	+14
Operating profit		447		371	+20
Operating margin		14.9%		14.1%
Price realization					+11
Currency translation					-4

Small agriculture and turf sales increased for the quarter due to price realization in most end markets and higher shipment volumes (primarily in the U.S., Canada, India, and Mexico), partially offset by the negative effects of foreign currency translation mostly due to a stronger U.S. dollar. Operating profit improved primarily as a result of price realization and improved shipment volumes due to improved supply chain conditions. These items were partially offset by higher production costs, increased selling, administrative and general expenses and research and development expenses, and the unfavorable effects of foreign currency exchange.

Sales for the first nine months increased mainly as a result of higher shipment volumes and price realization. Operating profit for the first nine months increased primarily resulting from price realization, higher sales volume / mix, and the favorable effects of foreign currency exchange. Partially offsetting these factors were higher production costs, higher research and development and selling, administrative, and general expenses, the UAW contract ratification bonus, and the impact of impairments related to events in Russia / Ukraine. The prior year was also impacted by a favorable indirect tax ruling in Brazil.

3330

Three Months Ended

Nine Months Ended

Small Agriculture and Turf

July 31

August 1

%

July 31

August 1

%

(In millions of dollars)

2022

2021

Change

2022

2021

Change

Net sales

$
3,635

$
3,147

+16

$
9,836

$
9,051

+9

Operating profit

552

583

-5

1,443

1,699

-15

Operating margin

15.2%

18.5%

14.7%

18.8%

Price realization

+10

+8

Currency translation

-5

-3

Small agriculture and turf sales for the quarter increased due to higher shipment volumes and price realization partially offset by the unfavorable impact of currency translation. Operating profit decreased primarily due to higher production costs, higher selling, administrative, and general expenses, increased research and development expenses, and the unfavorable effects of foreign currency exchange. These items were partially offset by price realization and higher sales volumes. Results for the prior period included a gain on the sale of a closed factory in China that had produced small agricultural equipment.

Sales for the first nine months increased mainly as a result of price realization and higher shipment volumes, partially offset by the unfavorable impact of currency translation. Operating profit for the first nine months decreased primarily resulting from higher production costs and higher selling, administrative, and general and research and development expenses. Partially offsetting these factors was price realization. Results for the prior period included a gain on the sale of a closed factory in China that had produced small agricultural equipment.


	Three Months Ended					Nine Months Ended					Three Months Ended
Construction and Forestry	July 31		August 1		%	July 31		August 1		%	January 29		January 30
(In millions of dollars)	2022		2021		Change	2022		2021		Change	2023		2022		% Change
Net sales	$	3,269	$	3,016	+8	$	9,161	$	8,562	+7	$	3,203	$	2,544	+26
Operating profit		514		463	+11		1,599		1,220	+31		625		272	+130
Operating margin		15.7%		15.4%			17.5%		14.2%			19.5%		10.7%
Price realization					+10					+9					+13
Currency translation					-4					-3					-3

Construction and forestry sales moved higher for the quarter primarily due to ~~price realization. Operating profit increased due to price realization, partially offset by~~ higher ~~production costs.~~

~~The segment’s nine-month sales also increased due to~~shipment volumes (primarily in the U.S. and Brazil) and price realization, partially offset by the ~~unfavorable impact~~negative effects of foreign currency ~~translation. The first nine-month’s operating~~translation from a stronger U.S. dollar. Operating profit ~~moved higher mainly~~improved due to price realization and improved shipment volumes as a ~~non-cash gain on the remeasurement~~result of ~~the previously held equity investment in the Deere-Hitachi joint venture,~~improved supply chain conditions, partially offset by higher production costs. The UAW contract-ratification bonus costs ~~and unfavorable product mix.~~affected the prior period.


	Three Months Ended					Nine Months Ended					Three Months Ended
Financial Services	July 31		August 1		%	July 31		August 1		%	January 29		January 30
(In millions of dollars)	2022		2021		Change	2022		2021		Change	2023		2022		% Change
Revenue (including intercompany)	$	984	$	963	+2	$	2,851	$	2,851		$	1,244	$	916	+36
Interest expense		223		169	+32		493		539	-9		442		158	+180
Net income		209		227	-8		649		654	-1		185		231	-20

~~While the~~The average balance of receivables and leases financed ~~increased 9~~was 15 percent ~~in the third quarter and 8 percent~~higher in the first ~~nine~~three months of ~~2022~~2023, compared with the same ~~periods~~period last ~~year, revenues~~year. Revenue also increased ~~2 percent in the third quarter and were unchanged in the first nine months. Lower operating lease revenue partially offset the~~due to higher average ~~receivable balances in both periods.~~financing rates. Interest expense increased in the ~~third~~first quarter ~~due to~~of 2023 as a result of higher average borrowing rates and higher average borrowings. ~~Interest expense~~Net income for the quarter decreased ~~in the first nine months of 2022 primarily~~mainly due to less favorable financing spreads as a result of ~~non-designated derivative gains, partially offset by~~heightened interest rates, higher ~~average borrowings. Net income decreased for the quarter mainly due to unfavorable discrete income-tax adjustments, a higher provision for credit losses,~~selling, administrative and general expenses, and lower gains on operating lease ~~residual values. These items were partially offset by income earned on a higher average portfolio. Results for the first nine months decreased slightly due to a higher provision for credit losses,~~dispositions, partially offset by income earned on higher average portfolio balances.

Critical Accounting Estimates

See the Company’s critical accounting estimates discussed in the Management’s Discussion and Analysis of the most recently filed Annual Report on Form 10-K. There have been no material changes to these ~~estimates.~~policies.

CAPITAL RESOURCES AND LIQUIDITY

Sources of Liquidity, ~~including~~ Key Metrics and Balance Sheet Data

The Company has access to most global markets at a reasonable ~~cost and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term and long term.~~cost. Sources of liquidity for the Company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The Company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The Company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. ~~The key~~

Key metrics are provided in the following table, in millions of dollars:


	July 31		October 31		August 1		January 29		October 30		January 30
	2022		2021		2021		2023		2022		2022
Cash, cash equivalents, and marketable securities	$	5,078	$	8,745	$	8,207	$	4,828	$	5,508	$	5,207

Trade accounts and notes receivable – net		6,696		4,208		5,268		7,609		6,410		4,855
Ratio to prior 12 month’s net sales		15%		11%		14%		15%		13%		12%

Inventories		9,121		6,781		6,410		10,056		8,495		7,935
Ratio to prior 12 month’s cost of sales		28%		23%		23%		27%		24%		26%

Unused credit lines		1,957		5,770		6,131		1,581		3,284		5,865

Financial Services:
Ratio of interest-bearing debt to stockholder’s equity		8.2 to 1		7.8 to 1		7.6 to 1		8.2 to 1		8.5 to 1		7.4 to 1

~~Due to the uncertainties around the COVID-19 pandemic, the Company temporarily increased its cash, cash equivalents, and marketable securities target beginning in March 2020.~~ The reduction in unused credit lines in 2023 compared to both prior periods relates to an increase in commercial paper outstanding to ~~fund growth in the receivable portfolio.~~support working capital requirements. The Company ~~expects to generate excess~~forecasts higher operating cash flows in ~~2022, as evidenced~~2023 driven by ~~the common stock dividend~~an increase ~~declared on May 25, 2022,~~in net income adjusted for non-cash provisions and ~~$2,477 million of share repurchases during the first nine months of 2022. As the underlying fundamentals remain strong~~a favorable change in ~~the Company’s operating segments, the Company expects to generate long-term cash flows.~~working capital.

There have been no material changes to the contractual and other cash requirements identified in the Company’s most recently issued Annual Report on Form 10-K.

Cash Flows

Nine Months Ended

July 31, 2022

August 1, 2021

Net cash provided by operating activities

$
418

$
4,314

Net cash used for investing activities

(4,430)

(3,102)

Net cash provided by (used for) financing activities

515

(851)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(143)

106

Net increase (decrease) in cash, cash equivalents, and restricted cash

$
(3,640)

$
467


	Three Months Ended
(In millions of dollars)	January 29, 2023		January 30, 2022
Net cash used for operating activities	$	(1,246)	$	(2,553)
Net cash provided by investing activities		760		648
Net cash used for financing activities		(339)		(1,577)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		62		(74)
Net decrease in cash, cash equivalents, and restricted cash	$	(763)	$	(3,556)

Cash ~~inflows~~outflows from consolidated operating activities in the first ~~nine~~three months of ~~2022~~2023 were ~~$418~~$1,246 million. This resulted mainly from a working capital change, partially offset by net income adjusted for non-cash ~~provisions, partially offset by a working capital change and a $1,000 million voluntary contribution to a U.S. OPEB plan.~~provisions. Cash ~~outflows~~inflows from investing activities were ~~$4,430~~$760 million in the first ~~nine~~three months of ~~2022.~~this year. The primary drivers were ~~growth in~~collections of receivables (excluding receivables related to sales) exceeding the ~~retail customer receivable portfolio; purchases~~cost of ~~property and equipment; acquisitions of businesses, net of cash acquired;~~receivables acquired and a change in collateral on derivatives – ~~net.~~net, partially offset by purchases of property and equipment. Cash ~~inflows~~outflows from financing activities were ~~$515~~$339 million in the first ~~nine~~three months of ~~2022, as higher external borrowings of $3,970 million were mainly offset by repurchases of common stock and dividends paid.~~2023. Cash, cash equivalents, and restricted cash decreased ~~$3,640~~by $763 million during the first ~~nine~~three months of this ~~year as the Company lowered its targeted cash balance, as previously noted.~~

~~Cash and Marketable Securities Held by Foreign Subsidiaries~~. The total cash and cash equivalents and marketable securities held by foreign subsidiaries was $2,713 million, $5,817 million, and $5,690 million at July 31, 2022, October 31, 2021, and August 1, 2021, respectively. During the first nine months of 2022, the Company’s foreign subsidiaries returned $4,460 million of cash and cash equivalents to the U.S.year.

Trade Accounts and Notes ~~Receivable.~~Receivable – Trade accounts and notes receivable ~~primarily~~ arise from sales of goods to ~~dealers.~~customers. Trade receivables increased ~~$2,488~~by $1,199 million during the first ~~nine~~three months of ~~2022, primarily~~2023, mostly due to a seasonal ~~increase and higher overall demand, partially offset by the effect of foreign currency translation.~~increase. These receivables increased ~~$1,428~~$2,754 million, compared to a year ago, ~~primarily~~ due to higher ~~overall demand partially offset by the effect of foreign currency translation.~~shipment volumes. The

percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1 percent at ~~July 31,~~each of January 29, 2023, October 30, 2022, ~~1 percent at October 31, 2021,~~ and ~~2 percent at August 1, 2021.~~January 30, 2022.

Financing Receivables and Equipment on Operating Leases~~. These~~ – Financing receivables and equipment on operating leases ~~primarily~~ consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases ~~increased $1,305~~decreased by $720 million during the first ~~nine months~~quarter of ~~2022~~2023, primarily due to seasonal payments, and increased ~~$2,919~~by $5,142 million in the past 12 months, ~~primarily~~ due to ~~higher equipment~~strong retail sales. Total acquisition volumes of financing receivables and equipment on operating leases were 231 percent higher in the first ~~nine~~three months of ~~2022,~~2023, compared with the same period last year, as volumes of wholesale notes, operating leases, retail notes, and revolving charge accounts ~~retail notes, and operating leases~~ were higher, while ~~volumes of financing~~finance leases ~~and wholesale notes~~ were ~~lower.~~lower compared to January 30, 2022.

Inventories. – Inventories increased by ~~$2,340~~$1,561 million during the first ~~nine~~three months, ~~of 2022 and~~primarily due to a seasonal increase. Inventories increased ~~by $2,711~~$2,121 million, compared to a year ~~ago. The higher levels in both periods are~~ago, due to ~~increased overall demand~~higher forecasted shipment volumes and ~~the impact of~~ supply chain disruptions, partially offset by the effect of foreign currency translation. A majority of these inventories are valued on the last-in, first-out (LIFO) method.

Property and Equipment. – Property and equipment cash expenditures in the first ~~nine~~three months of ~~2022~~2023 were ~~$596~~$315 million, compared with ~~$492~~$193 million in the same period last year. Capital expenditures in ~~2022~~2023 are estimated to be approximately ~~$1,100~~$1,400 million.

Accounts Payable and Accrued Expenses – Decreased by $1,714 million in the first three months of 2023, primarily due to a decrease in accrued expenses associated with dealer sales discounts, employee benefits, and derivative liabilities. Accounts payable and accrued expenses increased $2,457 million compared to a year ago, due to an increase in accrued expenses associated with derivative liabilities, accrued taxes, and employee benefits, and an increase in accounts payable associated with trade payables.

Borrowings. – Total external borrowings ~~have changed~~increased by $2,165 million in the first three months of 2023 and increased $6,754 million compared to a year ago, generally corresponding with the level of the receivable and the lease portfolio, as well as ~~the level of cash and cash equivalents.~~other working capital requirements.

John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 9). The facility was renewed in November ~~2021~~2022 with an expiration in November ~~2022~~2023 and ~~a reduction of~~increased the total capacity or “financing limit” from ~~$2,000~~$1,000 million to ~~$1,000~~$1,500 million. As a result of the reduced capacity, Capital Corporation repurchased $511 million of outstanding short-term securitization borrowings in November 2021, in addition to the normal payments collected on the retail notes. At ~~July 31, 2022, $891~~January 29, 2023, $786 million of securitization borrowings ~~was~~were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected.

In the first ~~nine~~three months of ~~2022,~~2023, the ~~Company issued $2,669 million and~~financial services operations retired ~~$2,343~~$849 million of retail note securitization borrowings, which are presented in ~~Increase~~“Increase (decrease) in total short-term borrowings on the statements of consolidated cash flows. In April 2022, the Company issued $600 million of sustainability-linked medium-term notes with an initial interest rate of 3.35 percent, which are due in 2029. This transaction supports the Company’s commitment to environmental sustainability by linking financing to the achievement of its ambitious and comprehensive environmental, social, and governance (ESG) targets. Failure to meet the stated sustainability performance target will result in a 25-basis point increase to the interest rate payable on the 2029 notes from and including April 2026.borrowings.”

Lines of Credit. – The Company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled ~~$8,427~~$8,327 million at ~~July 31, 2022, $1,957~~January 29, 2023, $1,581 million of which were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were ~~primarily~~ considered to constitute utilization. Included in the total credit lines at ~~July 31, 2022~~January 29, 2023 was a 364-day credit facility agreement of $3,000 million, expiring in the second quarter of 2023. In addition, total credit lines included long-term credit facility agreements of $2,500 million, expiring in the second quarter of 2026, and $2,500 million, expiring in the second quarter of 2027. These credit agreements require Capital Corporation and other parts of the Company to maintain certain performance metrics and liquidity targets. The Company expects to extend the terms of these credit facilities. All of these requirements of the credit ~~agreement requirements~~agreements have been met during the periods included in the financial statements.

Debt Ratings. – To access public debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings to the Company’s securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold Company securities. A credit rating agency may change or withdraw ~~Company~~ ratings based on its assessment of the Company’s current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets. The senior long-term and short-term debt ratings and

outlook currently assigned to unsecured Company ~~debt~~ securities by the rating agencies engaged by the Company are as follows:


	Senior
	Long-Term	Short-Term	Outlook
Fitch Ratings	AA+	F1	Stable
Moody’s Investors Service, Inc.	A2	Prime-1	~~Stable~~Positive
Standard & Poor’s	A	A-1	Stable

~~Subsequent Events~~

On August 16, 2022, the U.S. federal government enacted the Inflation Reduction Act of 2022. The bill contains numerous tax provisions, including a 15 percent corporate minimum tax. The Company has not yet completed its analysis of the newly enacted tax legislation. At this point, however, this legislation is not expected to have a material impact on the Company’s financial statements.

~~On August 31, 2022, the Company’s Board of Directors declared a quarterly dividend of $1.13 per share payable November 8, 2022 to stockholders of record on September 30, 2022.~~

Forward-Looking Statements

Certain statements contained herein, including in the section entitled “~~Overview~~”“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 the Company’s 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, the Company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

●	changes in U.S. and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;

●	political, economic, and social instability of the geographies in which the Company operates;

●	wars and other conflicts, including the current conflict between Russia and Ukraine, and natural disasters;

●	adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and liquidity constraints;

●	growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);

●	the Company’s ability to execute business strategies, including the Company’s Smart Industrial operating model, Leap Ambitions, and mergers and acquisitions;

●	the ability to understand and meet its customers’ changing expectations and demand for John Deere products;

●	accurately forecasting customer demand for products and services and adequately managing inventory;

●	changes to governmental communications channels (radio frequency technology);

●	gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions;

●	the Company’s ability to adapt in highly competitive markets;

●	dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;

●	changes in climate patterns and unfavorable weather events;

●	higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products;

●	changes in the Company’s credit ratings, and failure to comply with financial covenants in credit agreements could impact access to funding;

●	availability and price of raw materials, components, and whole goods;

●	delays or disruptions in the Company’s supply chain;

●	labor relations and contracts, including work stoppages and other disruptions;

●	the ability to attract, develop, engage, and retain qualified personnel;

●	security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the Company and its products;

●	loss of or challenges to intellectual property rights;

●	compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;

●	legislation introduced or enacted that could affect the Company’s business model and intellectual property, such as so-called right to repair or right to modify legislation;

●	investigations, claims, lawsuits, or other legal proceedings;

●	events that damage the Company’s reputation or brand;

●	world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs (e.g., fertilizer), and availability of transport for crops; and

●	housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the Company and its businesses, including factors that could materially affect the Company’s financial results, is included in the Company’s other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of ~~the Company’s most recent~~our Annual Report on Form ~~10-K and subsequent Quarterly Reports on Form 10-Q)~~10-K).

~~Factors Affecting All Lines of Business~~

All of the Company’s businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, and customer access to capital and overall demand for our products; delays or disruptions in the Company’s supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the Company operates; the effects of, or response to, wars and other conflicts, including the current military conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic). The sustainability of economic recovery from COVID-19 remains unclear and significant volatility could continue for a prolonged period.

Significant changes in market liquidity conditions, changes in the Company’s credit ratings, and any failure to comply with financial covenants in credit agreements could impact our access to or terms of future funding, which could reduce the Company’s earnings and cash flows. A debt crisis in Europe, Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The Company’s investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.

Additional factors that could materially affect the Company’s operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise.

Other factors that could materially affect the Company’s results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the Company and its suppliers and dealers; security breaches with respect to the Company’s products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the Company’s business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the Company’s reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the Company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses.

~~Production & Precision Agriculture and Small Agriculture & Turf Operations~~

The Company’s agricultural equipment operations are subject to a number of uncertainties, including certain factors that affect farmers’ confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases.

~~Production and Precision Agriculture Operations~~

The production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the Company’s precision agriculture sales and results, including the impact to customers’ profitability and/or sustainability outcomes;

availability of technological innovations; speed of research and development; effectiveness of partnerships with third parties; and the dealer channel’s ability to support and service precision technology solutions.

~~Small Agriculture and Turf Equipment~~

Factors affecting the Company’s small agriculture and turf equipment operations include customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; spending by municipalities and golf courses; and consumable input costs.

~~Construction and Forestry~~

Factors affecting the Company’s construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure. Prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment.

~~John Deere Financial~~

The liquidity and ongoing profitability of John Deere Capital Corporation and the Company’s other financial services subsidiaries depend on timely access to capital to meet future cash flow requirements, and to fund operations, costs, and purchases of the Company’s products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.

Supplemental Consolidating Information

The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. The equipment operations ~~represent~~represents the enterprise without financial services. The equipment operations ~~include~~includes the Company’s 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 primarily generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial services ~~primarily~~ finances sales and leases by dealers of new and used equipment that is largely manufactured by the Company. 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. ~~These~~The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences.

4035


DEERE & COMPANY	DEERE & COMPANY																		DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA	SUPPLEMENTAL CONSOLIDATING DATA																		SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME	STATEMENTS OF INCOME																		STATEMENTS OF INCOME
For the Three Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022																			For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited	(In millions of dollars) Unaudited																		(In millions of dollars) Unaudited
		EQUIPMENT				FINANCIAL														EQUIPMENT				FINANCIAL
		OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED						OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
		2022		2021		2022		2021		2022		2021		2022		2021				2023		2022		2023		2022		2023		2022		2023		2022
Net Sales and Revenues
Net sales		$	13,000	$	10,413									$	13,000	$	10,413			$	11,402	$	8,531									$	11,402	$	8,531
Finance and interest income			60		33	$	905	$	867	$	(119)	$	(75)		846		825	¹			114		34	$	1,067	$	829	$	(187)	$	(63)		994		800	¹
Other income			228		263		79		96		(51)		(70)		256		289	²			234		217		177		87		(155)		(66)		256		238	^{2, 3}
Total			13,288		10,709		984		963		(170)		(145)		14,102		11,527				11,750		8,782		1,244		916		(342)		(129)		12,652		9,569

Costs and Expenses
Cost of sales			9,512		7,574						(1)				9,511		7,574	³			7,940		6,696						(6)		(1)		7,934		6,695	⁴
Research and development expenses			481		394										481		394				495		402										495		402
Selling, administrative and general expenses			805		702		156		141		(2)		(2)		959		841	³			783		657		172		126		(3)		(2)		952		781	⁴
Interest expense			109		92		223		169		(36)		(17)		296		244	⁴			101		90		442		158		(64)		(19)		479		229	⁵
Interest compensation to Financial Services			83		58						(83)		(58)					⁴			123		44						(123)		(44)					⁵
Other operating expenses			47		32		317		360		(48)		(68)		316		324	⁵			53		39		392		335		(146)		(63)		299		311	^{6, 7}
Total			11,037		8,852		696		670		(170)		(145)		11,563		9,377				9,495		7,928		1,006		619		(342)		(129)		10,159		8,418

Income before Income Taxes			2,251		1,857		288		293						2,539		2,150				2,255		854		238		297						2,493		1,151
Provision for income taxes			574		425		80		66						654		491				483		182		54		68						537		250

Income after Income Taxes			1,677		1,432		208		227						1,885		1,659				1,772		672		184		229						1,956		901
Equity in income (loss) of unconsolidated affiliates			(1)		8		1										8
Equity in income of unconsolidated affiliates																							1		1		2						1		3

Net Income			1,676		1,440		209		227						1,885		1,667				1,772		673		185		231						1,957		904
Less: Net income attributable to noncontrolling interests			1												1
Less: Net income (loss) attributable to noncontrolling interests																					(2)		1										(2)		1
Net Income Attributable to Deere & Company		$	1,675	$	1,440	$	209	$	227					$	1,884	$	1,667			$	1,774	$	672	$	185	$	231					$	1,959	$	903
			��

¹ Elimination of financial services’ interest income earned from equipment operations.

² Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.

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

⁴ Elimination of intercompany service fees.

⁴⁵ Elimination of equipment operations’ interest expense to financial services.

⁵⁶ Elimination of financial services’ lease depreciation expense related to inventory transferred to equipment on operating leases.

⁷ Elimination of equipment operations’ expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

4136

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF INCOME

For the Nine Months Ended July 31, 2022 and August 1, 2021

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2022

2021

2022

2021

2022

2021

2022

2021

Net Sales and Revenues

















Net sales

$
33,565

$
29,461

$
33,565

$
29,461

Finance and interest income

131

95

$
2,580

$
2,582

$
(270)

$
(209)

2,441

2,468
¹

Other income

1,028

712

271

269

(264)

(213)

1,035

768
²

Total

34,724

30,268

2,851

2,851

(534)

(422)

37,041

32,697

Costs and Expenses

Cost of sales

25,126

21,309

(2)

(2)

25,124

21,307
³

Research and development expenses

1,336

1,137

1,336

1,137

Selling, administrative and general expenses

2,215

2,089

463

365

(6)

(6)

2,672

2,448
³

Interest expense

297

287

493

539

(77)

(43)

713

783
⁴

Interest compensation to Financial Services

189

166

(189)

(166)

⁴

Other operating expenses

186

140

1,028

1,098

(260)

(205)

954

1,033
⁵

Total

29,349

25,128

1,984

2,002

(534)

(422)

30,799

26,708

Income before Income Taxes

5,375

5,140

867

849

6,242

5,989

Provision for income taxes

1,142

1,130

222

198

1,364

1,328

Income after Income Taxes

4,233

4,010

645

651

4,878

4,661

Equity in income of unconsolidated affiliates

4

18

4

3

8

21

Net Income

4,237

4,028

649

654

4,886

4,682

Less: Net income attributable to noncontrolling interests

1

2

1

2

Net Income Attributable to Deere & Company

$
4,236

$
4,026

$
649

$
654

$
4,885

$
4,680

¹ ~~Elimination of financial services’ interest income earned from equipment operations.~~

² ~~Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.~~

³ ~~Elimination of intercompany service fees.~~

⁴ ~~Elimination of equipment operations’ interest expense to financial services.~~

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


DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEETS
(In millions of dollars) Unaudited
	EQUIPMENT						FINANCIAL
	OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
	Jan 29		Oct 30		Jan 30		Jan 29		Oct 30		Jan 30		Jan 29		Oct 30		Jan 30		Jan 29		Oct 30		Jan 30
	2023		2022		2022		2023		2022		2022		2023		2022		2022		2023		2022		2022
Assets
Cash and cash equivalents	$	2,665	$	3,767	$	3,596	$	1,311	$	1,007	$	876							$	3,976	$	4,774	$	4,472
Marketable securities		18		61		2		834		673		733								852		734		735
Receivables from Financial Services		5,348		6,569		5,307							$	(5,348)	$	(6,569)	$	(5,307)							⁸
Trade accounts and notes receivable – net		1,342		1,273		996		7,827		6,434		4,843		(1,560)		(1,297)		(984)		7,609		6,410		4,855	⁹
Financing receivables – net		51		47		56		36,831		36,587		33,135								36,882		36,634		33,191
Financing receivables securitized – net						9		5,089		5,936		3,507								5,089		5,936		3,516
Other receivables		1,583		1,670		1,818		489		832		153		(80)		(10)		(35)		1,992		2,492		1,936	⁹
Equipment on operating leases – net								6,502		6,623		6,624								6,502		6,623		6,624
Inventories		10,056		8,495		7,935														10,056		8,495		7,935
Property and equipment – net		6,178		6,021		5,629		34		35		36								6,212		6,056		5,665
Goodwill		3,891		3,687		3,192														3,891		3,687		3,192
Other intangible assets – net		1,255		1,218		1,209														1,255		1,218		1,209
Retirement benefits		3,728		3,666		3,095		67		66		65		(2)		(2)		(2)		3,793		3,730		3,158	¹⁰
Deferred income taxes		1,015		940		1,095		53		45		50		(154)		(161)		(222)		914		824		923	¹¹
Other assets		1,936		1,794		1,730		684		626		477		(23)		(3)		(4)		2,597		2,417		2,203	⁹
Total Assets	$	39,066	$	39,208	$	35,669	$	59,721	$	58,864	$	50,499	$	(7,167)	$	(8,042)	$	(6,554)	$	91,620	$	90,030	$	79,614

Liabilities and Stockholders’ Equity

Liabilities
Short-term borrowings	$	969	$	1,040	$	1,516	$	13,160	$	11,552	$	9,474							$	14,129	$	12,592	$	10,990
Short-term securitization borrowings						8		4,864		5,711		3,474								4,864		5,711		3,482
Payables to Equipment Operations								5,348		6,569		5,307	$	(5,348)	$	(6,569)	$	(5,307)							⁸
Accounts payable and accrued expenses		11,819		12,962		9,704		2,952		3,170		1,970		(1,663)		(1,310)		(1,023)		13,108		14,822		10,651	⁹
Deferred income taxes		404		380		425		269		276		353		(154)		(161)		(222)		519		495		556	¹¹
Long-term borrowings		8,155		7,917		8,760		26,916		25,679		24,078								35,071		33,596		32,838
Retirement benefits and other liabilities		2,384		2,351		3,182		111		108		109		(2)		(2)		(2)		2,493		2,457		3,289	¹⁰
Total liabilities		23,731		24,650		23,595		53,620		53,065		44,765		(7,167)		(8,042)		(6,554)		70,184		69,673		61,806

Commitments and contingencies (Note 16)
Redeemable noncontrolling interest		100		92																100		92

Stockholders’ Equity
Total Deere & Company stockholders’ equity		21,332		20,262		17,804		6,101		5,799		5,734		(6,101)		(5,799)		(5,734)		21,332		20,262		17,804	¹²
Noncontrolling interests		4		3		4														4		3		4
Financial Services’ equity		(6,101)		(5,799)		(5,734)								6,101		5,799		5,734							¹²
Adjusted total stockholders’ equity		15,235		14,466		12,074		6,101		5,799		5,734								21,336		20,265		17,808
Total Liabilities and Stockholders’ Equity	$	39,066	$	39,208	$	35,669	$	59,721	$	58,864	$	50,499	$	(7,167)	$	(8,042)	$	(6,554)	$	91,620	$	90,030	$	79,614

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

CONDENSED BALANCE SHEETS

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

Jul 31

Oct 31

Aug 1

Jul 31

Oct 31

Aug 1

Jul 31

Oct 31

Aug 1

Jul 31

Oct 31

Aug 1

2022

2021

2021

2022

2021

2021

2022

2021

2021

2022

2021

2021

Assets



































Cash and cash equivalents

$
3,540

$
7,188

$
6,638

$
819

$
829

$
881

$
4,359

$
8,017

$
7,519

Marketable securities

2

3

3

717

725

685

719

728

688

Receivables from Financial Services

5,055

5,564

5,913

$
(5,055)

$
(5,564)

$
(5,913)

⁶

Trade accounts and notes receivable – net

1,342

1,155

1,127

6,738

3,895

5,319

(1,384)

(842)

(1,178)

6,696

4,208

5,268
⁷

Financing receivables – net

45

73

89

35,011

33,726

31,360

35,056

33,799

31,449

Financing receivables securitized – net

2

10

13

5,139

4,649

5,388

5,141

4,659

5,401

Other receivables

1,676

1,629

1,545

371

159

171

(48)

(23)

(14)

1,999

1,765

1,702
⁷

Equipment on operating leases – net

6,554

6,988

6,982

6,554

6,988

6,982

Inventories

9,121

6,781

6,410

9,121

6,781

6,410

Property and equipment – net

5,630

5,783

5,612

36

37

37

5,666

5,820

5,649

Goodwill

3,754

3,291

3,148

3,754

3,291

3,148

Other intangible assets – net

1,281

1,275

1,267

1,281

1,275

1,267

Retirement benefits

3,062

3,539

986

65

64

63

(2)

(2)

(59)

3,125

3,601

990
⁸

Deferred income taxes

1,248

1,215

1,959

48

53

59

(186)

(231)

(251)

1,110

1,037

1,767
⁹

Other assets

1,727

1,646

1,747

510

499

702

(1)

(1)

2,236

2,145

2,448

Total Assets

$
37,485

$
39,152

$
36,457

$
56,008

$
51,624

$
51,647

$
(6,676)

$
(6,662)

$
(7,416)

$
86,817

$
84,114

$
80,688

Liabilities and Stockholders’ Equity

Liabilities

Short-term borrowings

$
471

$
1,509

$
1,376

$
13,705

$
9,410

$
9,028

$
14,176

$
10,919

$
10,404

Short-term securitization borrowings

2

10

12

4,918

4,595

5,265

4,920

4,605

5,277

Payables to Equipment Operations

5,055

5,564

5,913

$
(5,055)

$
(5,564)

$
(5,913)

⁶

Accounts payable and accrued expenses

11,925

11,198

10,484

2,494

2,015

1,916

(1,433)

(865)

(1,193)

12,986

12,348

11,207
⁷

Deferred income taxes

436

438

371

311

369

395

(186)

(231)

(251)

561

576

515
⁹

Long-term borrowings

8,481

8,915

8,982

23,651

23,973

23,298

32,132

32,888

32,280

Retirement benefits and other liabilities

2,799

4,239

5,219

114

107

112

(2)

(2)

(59)

2,911

4,344

5,272
⁸

Total liabilities

24,114

26,309

26,444

50,248

46,033

45,927

(6,676)

(6,662)

(7,416)

67,686

65,680

64,955

Commitments and contingencies (Note 15)

Redeemable noncontrolling interest (Note 19)

95

95

Stockholders’ Equity

Total Deere & Company stockholders’ equity

19,033

18,431

15,731

5,760

5,591

5,720

(5,760)

(5,591)

(5,720)

19,033

18,431

15,731
¹⁰

Noncontrolling interests

3

3

2

3

3

2

Financial Services’ equity

(5,760)

(5,591)

(5,720)

5,760

5,591

5,720

¹⁰

Adjusted total stockholders’ equity

13,276

12,843

10,013

5,760

5,591

5,720

19,036

18,434

15,733

Total Liabilities and Stockholders’ Equity

$
37,485

$
39,152

$
36,457

$
56,008

$
51,624

$
51,647

$
(6,676)

$
(6,662)

$
(7,416)

$
86,817

$
84,114

$
80,688

⁶⁸ Elimination of receivables / payables between equipment operations and financial services.

⁷⁹ Primarily reclassification of sales incentive accruals on receivables sold to financial services.

⁸¹⁰ Reclassification of net pension assets / liabilities.

⁹¹¹ Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

¹⁰¹² Elimination of financial services’ equity.

4337


DEERE & COMPANY	DEERE & COMPANY																		DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)	SUPPLEMENTAL CONSOLIDATING DATA (Continued)																		SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF CASH FLOWS	STATEMENTS OF CASH FLOWS																		STATEMENTS OF CASH FLOWS
For the Nine Months Ended July 31, 2022 and August 1, 2021
For the Three Months Ended January 29, 2023 and January 30, 2022																			For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited																			(In millions of dollars) Unaudited
		EQUIPMENT				FINANCIAL														EQUIPMENT				FINANCIAL
		OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED						OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
		2022		2021		2022		2021		2022		2021		2022		2021				2023		2022		2023		2022		2023		2022		2023		2022
Cash Flows from Operating Activities
Net income		$	4,237	$	4,028	$	649	$	654					$	4,886	$	4,682			$	1,772	$	673	$	185	$	231					$	1,957	$	904
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses					5		62		(22)						62		(17)				1		(2)		(131)		2						(130)
Provision for depreciation and amortization			806		803		790		866	$	(153)	$	(100)		1,443		1,569	¹¹			279		257		252		266	$	(37)	$	(37)		494		486	¹³
Impairment charges			81		50										81		50
Share-based compensation expense											64		64		64		64	¹²											23		18		23		18	¹⁴
Gain on remeasurement of previously held equity investment			(326)												(326)
Undistributed earnings of unconsolidated affiliates			370		246		(3)		(2)		(368)		(240)		(1)		4	¹³
Distributed earnings of Financial Services																					3		42						(3)		(42)					¹⁵
Provision (credit) for deferred income taxes			44		(218)		(50)		(53)						(6)		(271)				(39)		223		(17)		(13)						(56)		210
Changes in assets and liabilities:
Trade, notes, and financing receivables related to sales			(215)		(73)						(2,142)		(371)		(2,357)		(444)	^{14, 16, 17}			(23)		158						(992)		(264)		(1,015)		(106)	^{16, 18, 19}
Inventories			(2,415)		(1,367)						(111)		(450)		(2,526)		(1,817)	¹⁵			(1,254)		(1,277)						(25)		(20)		(1,279)		(1,297)	¹⁷
Accounts payable and accrued expenses			491		860		36		(20)		(542)		(98)		(15)		742	¹⁶			(1,458)		(1,346)		145		(66)		(264)		(142)		(1,577)		(1,554)	¹⁸
Accrued income taxes payable/receivable			52		43		30		(9)						82		34				192		(192)		7		8						199		(184)
Retirement benefits			(1,020)		8		6		5						(1,014)		13				(49)		(1,012)		1		2						(48)		(1,010)
Other			101		(200)		(105)		26		49		(121)		45		(295)	^{11, 12, 15}			17		(12)		163		(19)		6		11		186		(20)	^{13, 14, 17}
Net cash provided by operating activities			2,206		4,185		1,415		1,445		(3,203)		(1,316)		418		4,314
Net cash provided by (used for) operating activities																					(559)		(2,488)		605		411		(1,292)		(476)		(1,246)		(2,553)

Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)							16,927		15,704		(1,153)		(1,224)		15,774		14,480	¹⁴							7,495		6,845		(297)		(410)		7,198		6,435	¹⁶
Proceeds from sales of equipment on operating leases							1,501		1,510						1,501		1,510								497		479						497		479
Cost of receivables acquired (excluding receivables related to sales)							(19,069)		(18,349)		491		1,188		(18,578)		(17,161)	¹⁴							(6,375)		(5,719)		53		116		(6,322)		(5,603)	¹⁶
Acquisitions of businesses, net of cash acquired			(488)		(19)										(488)		(19)						(24)												(24)
Purchases of property and equipment			(595)		(491)		(1)		(1)						(596)		(492)				(315)		(193)										(315)		(193)
Cost of equipment on operating leases acquired							(1,868)		(1,818)		151		608		(1,717)		(1,210)	¹⁵							(531)		(419)		34		28		(497)		(391)	¹⁷
Increase in trade and wholesale receivables							(3,318)		(481)		3,318		481					¹⁴							(1,499)		(684)		1,499		684					¹⁶
Collateral on derivatives – net			5		(4)		(198)		(185)						(193)		(189)						4		345		(17)						345		(13)
Other			(87)		(10)		(74)		(42)		28		31		(133)		(21)	^{13, 17}			(9)		(22)		(137)		(36)				16		(146)		(42)	¹⁹
Net cash used for investing activities			(1,165)		(524)		(6,100)		(3,662)		2,835		1,084		(4,430)		(3,102)
Net cash provided by (used for) investing activities																					(324)		(235)		(205)		449		1,289		434		760		648

Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings			58		(93)		4,209		1,022						4,267		929				(136)		123		833		(1,141)						697		(1,018)
Change in intercompany receivables/payables			70		(624)		(70)		624												1,469		150		(1,469)		(150)
Proceeds from long-term borrowings			137				6,144		5,877						6,281		5,877				1		18		2,504		2,335						2,505		2,353
Payments of long-term borrowings			(1,372)		(71)		(5,206)		(5,101)						(6,578)		(5,172)						(124)		(1,925)		(1,816)						(1,925)		(1,940)
Proceeds from issuance of common stock			55		136										55		136				21		11										21		11
Repurchases of common stock			(2,477)		(1,780)										(2,477)		(1,780)				(1,257)		(623)										(1,257)		(623)
Dividends paid			(971)		(761)		(368)		(240)		368		240		(971)		(761)	¹³			(341)		(327)		(3)		(42)		3		42		(341)		(327)	¹⁵
Other			(39)		(50)		(23)		(22)				(8)		(62)		(80)	¹³			(27)		(22)		(12)		(11)						(39)		(33)
Net cash provided by (used for) financing activities			(4,539)		(3,243)		4,686		2,160		368		232		515		(851)
Net cash used for financing activities																					(270)		(794)		(72)		(825)		3		42		(339)		(1,577)

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			(148)		77		5		29						(143)		106				48		(75)		14		1						62		(74)

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(3,646)		495		6		(28)						(3,640)		467				(1,105)		(3,592)		342		36						(763)		(3,556)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			7,200		6,156		925		1,016						8,125		7,172				3,781		7,200		1,160		925						4,941		8,125
Cash, Cash Equivalents, and Restricted Cash at End of Period		$	3,554	$	6,651	$	931	$	988					$	4,485	$	7,639			$	2,676	$	3,608	$	1,502	$	961					$	4,178	$	4,569

Components of cash, cash equivalents, and restricted cash
Cash and cash equivalents		$	3,540	$	6,638	$	819	$	881					$	4,359	$	7,519			$	2,665	$	3,596	$	1,311	$	876					$	3,976	$	4,472
Restricted cash (Other assets)			14		13		112		107						126		120				11		12		191		85						202		97
Total cash, cash equivalents, and restricted cash		$	3,554	$	6,651	$	931	$	988					$	4,485	$	7,639			$	2,676	$	3,608	$	1,502	$	961					$	4,178	$	4,569

¹¹¹³ Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.

¹²¹⁴ Reclassification of share-based compensation expense.

¹³¹⁵ Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations’ operating ~~activities, and capital investments in financial services from the equipment operations.~~activities.

¹⁴¹⁶ Primarily reclassification of receivables related to the sale of equipment.

¹⁵¹⁷ Reclassification of direct lease agreements with retail customers.

¹⁶¹⁸ Reclassification of sales incentive accruals on receivables sold to financial services.

¹⁷¹⁹ Elimination and reclassification of the effects of financial ~~services’~~services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.

4438

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the Company’s most recently filed Annual Report on Form 10-K (Part II, Item 7A). There has been no material change in this information.

Item 4. CONTROLS AND PROCEDURES

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of ~~July 31, 2022,~~January 29, 2023, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. During the ~~third~~first quarter of ~~2022,~~2023, there were no changes that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

See the Company’s most recently filed Annual Report on Form 10-K (Part I, Item 1A). There has been no material change in this information. The risks described in the Annual Report on Form 10-K, and the “Forward-Looking Statements” in this report, are not the only risks faced by the Company. Additional risks and uncertainties may also materially affect the Company’s business, financial condition, or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Issuer Purchases of Equity Securities~~

The Company’s purchases of its common stock during the ~~third~~first quarter of ~~2022~~2023 were as follows:


				Total Number of					Total Number of
				Shares Purchased as	Maximum Number of				Shares Purchased as	Maximum Number of
	Total Number of			Part of Publicly	Shares that May Yet Be	Total Number of			Part of Publicly	Shares that May Yet Be
	Shares			Announced Plans or	Purchased under the	Shares			Announced Plans or	Purchased under the
	Purchased	Average Price		Programs (1)	Plans or Programs (1)	Purchased (2)	Average Price		Programs (1)	Plans or Programs (1)
Period	(thousands)	Paid Per Share		(thousands)	(millions)	(thousands)	Per Share		(thousands)	(millions)
May 2 to May 29	611	$	360.10	611	12.8
May 30 to Jun 26	1,309		337.72	1,309	11.5
Jun 27 to Jul 31	1,933		304.62	1,933	9.8
Oct 31 to Nov 27						569	$	402.45	569	47.8
Nov 28 to Dec 25						1,831		436.23	1,774	46.0
Dec 26 to Jan 29						538		427.11	538	45.4
Total	3,853			3,853		2,938			2,881

(1)

The Company has a share repurchase plan that was announced in December 2019 to purchase up to $8,000 million of shares of the Company’s common stock. The maximum number of shares that may yet be purchased under ~~this~~the December 2019 plan was 2.4 million shares based on the end of the ~~third~~first quarter 2023 closing share price of ~~$343.18~~$418.18 per share. At the end of the ~~third~~first quarter of ~~2022, $3,348~~2023, $995 million of common stock ~~remained~~remains to be purchased under the December 2019 plan. In December 2022, the Board of Directors authorized the repurchase of up to $18,000 million of additional common stock. Based on the first quarter 2023 closing share price, the maximum number of shares that may be repurchased under the December 2022 plan was 43.0 million shares.

(2)

In the first quarter of 2023, 57 thousand shares were acquired from plan participants at a market price to pay payroll taxes on certain restricted stock awards. The shares were valued at a weighted-average market price of $434.88.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Certain instruments relating to long-term borrowings constituting less than 10 percent of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will file copies of such instruments upon request of the Commission.



3.1		Certificate of Incorporation (Exhibit 3.1 to Form 10-Q of registrant for the quarter ended July 28, 2019, Securities and Exchange Commission File Number 1-4121*)

3.2		Bylaws, as amended (Exhibit 3.1 to Form 8-K of registrant filed on December 3, 2020, Securities and Exchange Commission File Number 1-4121*)

10.1		John Deere ERISA Supplementary Pension Benefit Plan, as amended October 31, 2022

31.1		Rule 13a-14(a)/15d-14(a) Certification

31.2		Rule 13a-14(a)/15d-14(a) Certification

32		Section 1350 Certifications (furnished herewith)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Incorporated by reference.

4640

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		DEERE & COMPANY


Date:	~~September 1, 2022~~February 23, 2023	By:	/s/ ~~Rajesh Kalathur~~Joshua A. Jepsen
			~~Rajesh Kalathur~~Joshua A. Jepsen Senior Vice President ~~John Deere Financial~~ and Chief Financial Officer
			(Principal Financial ~~Officer)~~Officer and Principal Accounting Officer)

4741


	Three Months Ended August 1, 2021
	Production & Precision Ag		Small Ag & Turf		Construction & Forestry		Financial Services		Total
Primary geographic markets:
United States	$	1,995	$	1,753	$	1,559	$	605	$	5,912
Canada		253		153		285		162		853
Western Europe		566		679		455		27		1,727
Central Europe and CIS		398		117		241		10		766
Latin America		758		125		227		60		1,170
Asia, Africa, Australia, New Zealand, and Middle East		368		385		308		38		1,099
Total	$	4,338	$	3,212	$	3,075	$	902	$	11,527

Major product lines:
Production agriculture	$	4,179							$	4,179
Small agriculture			$	2,355						2,355
Turf				719						719
Construction					$	1,283				1,283
Compact construction						398				398
Roadbuilding						948				948
Forestry						342				342
Financial products		13		12		5	$	902		932
Other		146		126		99				371
Total	$	4,338	$	3,212	$	3,075	$	902	$	11,527

Revenue recognized:
At a point in time	$	4,293	$	3,191	$	3,052	$	27	$	10,563
Over time		45		21		23		875		964
Total	$	4,338	$	3,212	$	3,075	$	902	$	11,527


	February 7
	2022
Trade accounts and notes receivable	$	2
Other receivables		11
Inventories		11
Property and equipment		11
Goodwill		218
Other intangible assets		178
Other assets		6
Total assets	$	437

Accounts payable and accrued expenses	$	27
Deferred income taxes		38

Redeemable noncontrolling interest	$	96


	February 28
	2022
Cash consideration for factories	$	205
Cash consideration for license agreement		70
Deferred consideration		271
Total purchase price consideration		546
Less: Cash obtained		(187)
Less: Settlement of intercompany balances		(113)
Net purchase price consideration		246
Fair value of previously held equity investment		444
Total invested capital	$	690


	Nine Months Ended July 31, 2022
	PPA		SAT		CF		FS		Total
2022 Expense:
Inventory reserve – Cost of sales	$	8			$	4			$	12
Fixed asset impairment – Cost of sales		30				11				41
Intangible asset impairment – Cost of sales						28				28
Allowance for credit losses – Financing receivables – SA&G expenses							$	32		32
Voluntary-separation program – Cost of sales		1								1
Voluntary-separation program – SA&G expenses		3				4		1		8
Contingent liabilities – Other operating expenses		3	$	1		1				5
Total Russia/Ukraine events pretax expense	$	45	$	1	$	48	$	33		127

Net tax impact										(8)
Total Russia/Ukraine events after-tax expense									$	119


	Three Months										Nine Months
	PPA		SAT		CF		FS		Total		PPA		SAT		CF		FS		Total
2022 Expense (benefit):
Gain on remeasurement of equity investment – Other income (see Note 19)															$	(326)			$	(326)
Total Russia/Ukraine events pretax expense	$	(1)			$	1	$	7	$	7	$	45	$	1		48	$	33		127
UAW ratification bonus – Cost of sales												53		9		28				90
Total expense (benefit)		(1)				1		7		7		98		10		(250)		33		(109)

2021 Expense (benefit):
Gain on sale – Other income			$	(27)						(27)				(27)						(27)
Long-lived asset impairments – Cost of sales												5		3		42				50
Brazil indirect tax – Cost of sales												(53)				(5)				(58)
Total expense (benefit)				(27)						(27)		(48)		(24)		37				(35)

Period over period change	$	(1)	$	27	$	1	$	7	$	34	$	146	$	34	$	(287)	$	33	$	(74)