10-Q

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 January 29, 2023

or

☐ 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: 1-6458

JOHN DEERE CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State of Incorporation)	36-2386361 (IRS Employer Identification No.)
P.O. Box 5328 Madison, Wisconsin 53705-0328 (Address of principal executive offices)
Telephone Number: (800) 438-7394

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

Title of each class	Trading symbol	Name of each exchange on which registered
2.00% Senior Notes Due 2031	JDCC 31	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 February 23, 2023 2,500 shares of common stock, without par value, of the registrant were outstanding, all of which were owned by John Deere Financial Services, Inc., a wholly-owned subsidiary of Deere & Company.

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with certain reduced disclosures as permitted by those instructions.

PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements.

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Income

(Unaudited)

(in millions)

	Three Months Ended
	January 29		January 30
	2023		2022
Revenues
Finance income earned on retail notes	$	315.9	$	240.0
Lease revenues		240.7		241.5
Revolving charge account income		82.9		66.5
Finance income earned on wholesale receivables		151.5		59.9
Other income		29.6		35.0
Total revenues		820.6		642.9
Expenses
Interest expense		301.0		99.5
Operating expenses:
Depreciation of equipment on operating leases		164.5		168.8
Administrative and operating expenses		108.5		96.4
Fees and interest paid to John Deere		57.6		39.7
Provision (credit) for credit losses		3.5		(1.2)
Total operating expenses		334.1		303.7
Total expenses		635.1		403.2
Income of consolidated group before income taxes		185.5		239.7
Provision for income taxes		39.6		52.0
Income of consolidated group		145.9		187.7
Equity in income of unconsolidated affiliate		1.0		1.9
Net income		146.9		189.6
Less: Net loss attributable to noncontrolling interests		(.2)
Net income attributable to the Company	$	147.1	$	189.6

See Condensed Notes to Interim Consolidated Financial Statements.

2

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Comprehensive Income

(Unaudited)

(in millions)

	Three Months Ended
	January 29		January 30
	2023		2022
Net income	$	146.9	$	189.6
Other comprehensive income (loss), net of income taxes
Cumulative translation adjustment		66.2		(36.4)
Unrealized gain (loss) on derivatives		(14.3)		13.0
Unrealized gain (loss) on debt securities		.4		(.2)
Other comprehensive income (loss), net of income taxes		52.3		(23.6)
Comprehensive income of consolidated group		199.2		166.0
Less: Comprehensive loss attributable to noncontrolling interests		(.2)
Comprehensive income attributable to the Company	$	199.4	$	166.0

See Condensed Notes to Interim Consolidated Financial Statements.

3

John Deere Capital Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in millions)

	January 29		October 30		January 30
	2023		2022		2022
Assets
Cash and cash equivalents	$	1,055.0	$	661.8	$	664.5
Marketable securities		1.8		1.1		1.8
Receivables:
Retail notes		23,937.2		22,860.3		22,336.1
Retail notes securitized		5,101.4		5,951.6		3,517.9
Revolving charge accounts		2,834.0		4,165.8		2,684.8
Wholesale receivables		9,752.1		8,404.5		6,312.0
Financing leases		1,030.8		1,120.7		878.4
Total receivables		42,655.5		42,502.9		35,729.2
Allowance for credit losses		(121.7)		(128.4)		(121.4)
Total receivables – net		42,533.8		42,374.5		35,607.8
Other receivables		108.2		91.4		91.5
Receivables from John Deere		171.2		214.8		156.8
Equipment on operating leases – net		4,693.4		4,853.5		4,745.6
Notes receivable from John Deere		494.4		370.7		371.7
Investment in unconsolidated affiliate		25.8		22.6		22.7
Deferred income taxes		24.4		23.3		30.4
Other assets		298.4		314.3		334.4
Total Assets	$	49,406.4	$	48,928.0	$	42,027.2
Liabilities and Stockholder’s Equity
Short-term external borrowings:
Commercial paper and other notes payable	$	3,637.8	$	2,402.3	$	568.6
Securitization borrowings		4,863.9		5,710.9		3,473.8
Current maturities of long-term external borrowings		6,080.1		5,989.6		6,104.0
Total short-term external borrowings		14,581.8		14,102.8		10,146.4
Notes payable to John Deere		4,416.2		5,225.5		5,306.4
Other payables to John Deere		664.2		1,024.2		186.3
Accounts payable and accrued expenses		893.4		866.1		782.8
Deposits held from dealers and merchants		127.8		137.3		126.1
Deferred income taxes		225.5		239.4		260.5
Long-term external borrowings		23,493.4		22,527.8		20,566.5
Total liabilities		44,402.3		44,123.1		37,375.0
Commitments and contingencies (Note 9)
Stockholder’s equity:
Common stock, without par value (issued and outstanding – 2,500 shares owned by John Deere Financial Services, Inc.)		1,482.8		1,482.8		1,482.8
Retained earnings		3,572.4		3,425.3		3,240.6
Accumulated other comprehensive loss		(52.4)		(104.7)		(73.0)
Total Company stockholder’s equity		5,002.8		4,803.4		4,650.4
Noncontrolling interests		1.3		1.5		1.8
Total stockholder’s equity		5,004.1		4,804.9		4,652.2
Total Liabilities and Stockholder’s Equity	$	49,406.4	$	48,928.0	$	42,027.2

See Condensed Notes to Interim Consolidated Financial Statements.

4

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Cash Flows

(Unaudited)

(in millions)

	Three Months Ended
	January 29		January 30
	2023		2022
Cash Flows from Operating Activities:
Net income	$	146.9	$	189.6
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision (credit) for credit losses		3.5		(1.2)
Provision for depreciation and amortization		170.1		175.1
Credit for deferred income taxes		(11.3)		(5.8)
Change in accounts payable and accrued expenses		29.1		(72.6)
Change in accrued income taxes payable/receivable		10.0		11.7
Other		(9.6)		(28.1)
Net cash provided by operating activities		338.7		268.7
Cash Flows from Investing Activities:
Cost of receivables acquired (excluding wholesale)		(5,686.3)		(5,197.5)
Collections of receivables (excluding wholesale)		6,902.4		6,294.1
Increase in wholesale receivables – net		(1,148.5)		(457.9)
Cost of equipment on operating leases acquired		(375.3)		(317.4)
Proceeds from sales of equipment on operating leases		386.2		362.0
Cost of notes receivable acquired from John Deere		(120.8)		(107.1)
Collections of notes receivable from John Deere		2.2		106.3
Other		(12.9)		(6.5)
Net cash provided by (used for) investing activities		(53.0)		676.0
Cash Flows from Financing Activities:
Increase (decrease) in commercial paper and other notes payable – net		1,223.2		(110.3)
Decrease in securitization borrowings – net		(849.3)		(1,122.6)
Decrease in short-term borrowings with John Deere – net		(964.7)		(181.0)
Proceeds from issuance of long-term external borrowings		2,298.9		1,799.3
Payments of long-term external borrowings		(1,618.5)		(1,302.4)
Dividends paid				(40.0)
Debt issuance costs		(8.6)		(6.1)
Net cash provided by (used for) financing activities		81.0		(963.1)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		13.1		(5.2)
Net increase (decrease) in cash, cash equivalents, and restricted cash		379.8		(23.6)
Cash, cash equivalents, and restricted cash at beginning of period		766.1		772.8
Cash, cash equivalents, and restricted cash at end of period	$	1,145.9	$	749.2
Components of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	1,055.0	$	664.5
Restricted cash*		90.9		84.7
Total cash, cash equivalents, and restricted cash	$	1,145.9	$	749.2

* Restricted cash is reported in other assets on the consolidated balance sheets and primarily relates to the securitization of receivables (see Note 5).

See Condensed Notes to Interim Consolidated Financial Statements.

5

John Deere Capital Corporation and Subsidiaries

Statements of Changes in Consolidated Stockholder’s Equity

For the Three Months Ended January 29, 2023 and January 30, 2022

(Unaudited)

(in millions)

			Company Stockholder
							Accumulated
	Total						Other		Non-
	Stockholder’s		Common		Retained		Comprehensive		Controlling
	Equity		Stock		Earnings		Income (Loss)		Interests
Balance October 31, 2021	$	4,526.2	$	1,482.8	$	3,091.0	$	(49.4)	$	1.8
Net income		189.6				189.6
Other comprehensive loss		(23.6)						(23.6)
Dividends declared		(40.0)				(40.0)
Balance January 30, 2022	$	4,652.2	$	1,482.8	$	3,240.6	$	(73.0)	$	1.8
Balance October 30, 2022	$	4,804.9	$	1,482.8	$	3,425.3	$	(104.7)	$	1.5
Net income (loss)		146.9				147.1				(.2)
Other comprehensive income		52.3						52.3
Balance January 29, 2023	$	5,004.1	$	1,482.8	$	3,572.4	$	(52.4)	$	1.3

See Condensed Notes to Interim Consolidated Financial Statements.

6

John Deere Capital Corporation and Subsidiaries

Condensed Notes to Interim Consolidated Financial Statements

(Unaudited)

(1)  Organization and Consolidation

John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company’s production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations and used equipment taken in trade for this equipment. References to “agriculture and turf” include both production and precision agriculture and small agriculture and turf. The Company generally purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere generally acquires these retail notes through independent John Deere retail dealers. The Company also purchases and finances a limited amount of non-John Deere retail notes. In addition, the Company finances and services revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). The Company also provides wholesale financing to dealers of John Deere agriculture and turf equipment and construction and forestry equipment, primarily to finance inventories of equipment for those dealers (wholesale receivables). Further, the Company leases John Deere equipment and a limited amount of non-John Deere equipment to retail customers (financing and operating leases). The Company also offers credit enhanced international export financing to select customers and dealers, which primarily involves John Deere products. Retail notes, revolving charge accounts, and financing leases are collectively called “Customer Receivables.” Customer Receivables and wholesale receivables are collectively called “Receivables.” Receivables and equipment on operating leases are collectively called “Receivables and Leases.” The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral security in the goods associated with those Receivables or with the use of other collateral.

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

The Company is the primary beneficiary of and consolidates certain variable interest entities (VIEs) that are special purpose entities (SPEs) related to the securitization of receivables. See Note 5 for more information on these SPEs.

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

Quarterly Financial Statements

The Company has prepared its interim consolidated financial statements, 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 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.

7

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.

New Accounting Standards

The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. ASUs adopted in 2023 did not have a material impact on the Company’s financial statements.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which will be effective in the first quarter of fiscal year 2024. The ASU eliminates the accounting guidance for troubled debt restructurings, enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. ASU No. 2022-02 and other 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.

(3)  Other Comprehensive Income Items

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

	January 29		October 30		January 30
	2023		2022		2022
Cumulative translation adjustment	$	(102.8)	$	(169.0)	$	(90.9)
Unrealized gain on derivatives		52.5		66.8		19.8
Unrealized loss on debt securities		(2.1)		(2.5)		(1.9)
Total accumulated other comprehensive income (loss)	$	(52.4)	$	(104.7)	$	(73.0)

8

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 29, 2023	Amount		Credit		Amount
Cumulative translation adjustment	$	66.2			$	66.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.9)	$	.4		(1.5)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(16.3)		3.5		(12.8)
Net unrealized gain (loss) on derivatives		(18.2)		3.9		(14.3)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.7		(.3)		.4
Total other comprehensive income (loss)	$	48.7	$	3.6	$	52.3
Three Months Ended January 30, 2022
Cumulative translation adjustment	$	(36.4)			$	(36.4)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15.4	$	(3.3)		12.1
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.1		(.2)		.9
Net unrealized gain (loss) on derivatives		16.5		(3.5)		13.0
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.3)		.1		(.2)
Total other comprehensive income (loss)	$	(20.2)	$	(3.4)	$	(23.6)

(4)  Receivables

Credit Quality

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of 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 Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when Customer Receivables are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income and lease revenue previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. During the first three months of 2023 and 2022, $2.8 million and $3.8 million, respectively, of accrued finance income and lease revenue was reversed on non-performing Receivables. Finance income and lease revenue for non-performing Receivables is recognized on a cash basis. Accrual of finance income and lease revenue is resumed when the receivable becomes contractually current and collections are reasonably assured. During the first quarter of both 2023 and 2022, $3.1 million of finance income and lease revenue was recognized from cash payments on non-performing Receivables.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

9

The credit quality analysis of Customer Receivables by year of origination was as follows (in millions of dollars):

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,458.1	$	10,776.6	$	6,318.7	$	3,112.2	$	1,292.6	$	566.4	$	2,686.3	$	27,210.9
30-59 days past due		1.7		29.4		29.2		48.2		10.4		42.8		27.2		188.9
60-89 days past due		1.3		12.2		10.5		18.0		3.7		14.1		5.9		65.7
90+ days past due				1.2		.2		2.9		1.0		.2				5.5
Non-performing		.3		35.1		43.3		29.1		15.0		19.6		7.8		150.2
Construction and forestry
Current		553.7		2,156.3		1,339.0		538.4		177.7		68.5		99.0		4,932.6
30-59 days past due		1.5		9.9		23.6		34.3		15.7		52.1		4.6		141.7
60-89 days past due		.4		4.3		15.7		17.7		6.4		23.0		2.0		69.5
90+ days past due				.1		.2		.4		.2						.9
Non-performing				38.9		51.8		26.1		13.0		6.5		1.2		137.5
Total Customer Receivables	$	3,017.0	$	13,064.0	$	7,832.2	$	3,827.3	$	1,535.7	$	793.2	$	2,834.0	$	32,903.4

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,764.5	$	6,958.0	$	3,488.7	$	1,519.7	$	582.8	$	153.2	$	4,022.7	$	28,489.6
30-59 days past due		40.1		55.8		31.4		15.0		6.4		2.7		18.4		169.8
60-89 days past due		11.8		19.5		10.8		4.4		2.0		1.1		4.5		54.1
90+ days past due		.4		.2		.2										.8
Non-performing		24.7		38.4		29.2		13.7		11.2		10.2		7.8		135.2
Construction and forestry
Current		2,373.7		1,526.3		658.1		230.7		57.2		10.5		107.7		4,964.2
30-59 days past due		44.5		40.6		20.7		7.6		1.8		.6		3.1		118.9
60-89 days past due		18.1		11.4		6.0		3.0		.7		.1		1.0		40.3
90+ days past due		.3		1.3				1.4								3.0
Non-performing		19.3		51.2		27.6		15.4		5.5		2.9		.6		122.5
Total Customer Receivables	$	14,297.4	$	8,702.7	$	4,272.7	$	1,810.9	$	667.6	$	181.3	$	4,165.8	$	34,098.4

10

	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,181.1	$	10,156.1	$	5,099.4	$	2,469.2	$	1,175.8	$	539.0	$	2,565.0	$	24,185.6
30-59 days past due		4.4		67.7		39.7		23.8		12.6		5.7		23.5		177.4
60-89 days past due		.2		17.5		13.3		7.6		4.2		2.2		4.7		49.7
90+ days past due				1.5				.1		.1		.1				1.8
Non-performing		.4		27.9		45.0		26.0		22.1		20.0		5.9		147.3
Construction and forestry
Current		625.7		2,131.1		1,050.4		471.3		159.0		39.5		80.8		4,557.8
30-59 days past due		7.4		58.5		32.1		18.0		5.5		1.6		2.6		125.7
60-89 days past due				20.5		15.1		6.5		1.9		.7		1.1		45.8
90+ days past due				1.0		1.8		2.0								4.8
Non-performing		.4		26.4		44.7		30.2		12.1		6.3		1.2		121.3
Total Customer Receivables	$	2,819.6	$	12,508.2	$	6,341.5	$	3,054.7	$	1,393.3	$	615.1	$	2,684.8	$	29,417.2

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

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	114.6	$	283.2	$	45.7	$	20.2	$	3.7	$	1.2	$	7,349.9	$	7,818.5
30+ days past due				.3										9.2		9.5
Non-performing														5.9		5.9
Construction and forestry
Current		5.8		3.8		23.7		1.0		.3		.1		1,875.8		1,910.5
30+ days past due														7.7		7.7
Non-performing
Total wholesale receivables	$	120.4	$	287.3	$	69.4	$	21.2	$	4.0	$	1.3	$	9,248.5	$	9,752.1

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	381.3	$	62.7	$	25.0	$	3.8	$	.3	$	1.1	$	6,238.1	$	6,712.3
30+ days past due				.1										8.3		8.4
Non-performing														5.5		5.5
Construction and forestry
Current		4.8		28.2		1.4		.4		.1				1,633.8		1,668.7
30+ days past due														9.6		9.6
Non-performing
Total wholesale receivables	$	386.1	$	91.0	$	26.4	$	4.2	$	.4	$	1.1	$	7,895.3	$	8,404.5

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	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	101.1	$	237.1	$	54.2	$	11.3	$	6.5	$	2.1	$	4,510.5	$	4,922.8
30+ days past due														12.6		12.6
Non-performing														6.3		6.3
Construction and forestry
Current		3.5		35.7		2.3		2.7		.2				1,324.9		1,369.3
30+ days past due														1.0		1.0
Non-performing
Total wholesale receivables	$	104.6	$	272.8	$	56.5	$	14.0	$	6.7	$	2.1	$	5,855.3	$	6,312.0

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.

Recoveries from freestanding credit enhancements, such as dealer deposits, and certain credit insurance contracts are not included in the estimate of expected credit losses. Recoveries from dealer deposits are recognized in other income on the statements of consolidated income when the dealer’s withholding account is charged. During the three months ended January 29, 2023 and January 30, 2022, recoveries from freestanding credit enhancements recorded in other income were $2.0 million and $1.1 million, respectively.

An analysis of the allowance for credit losses and investment in Receivables during 2023 was as follows (in millions of dollars):

	Three Months Ended
	January 29, 2023
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	95.4	$	21.9	$	11.1	$	128.4
Provision (credit) for credit losses*		6.8		(3.7)		(.5)		2.6
Write-offs		(10.2)		(7.5)		(.1)		(17.8)
Recoveries		2.4		5.3		.6		8.3
Translation adjustments		.4				(.2)		.2
End of period balance	$	94.8	$	16.0	$	10.9	$	121.7
Receivables:
End of period balance	$	30,069.4	$	2,834.0	$	9,752.1	$	42,655.5

*Excludes provision for credit losses on unfunded commitments of $.9 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

The allowance for credit losses decreased $6.7 million in the first three months of 2023, primarily driven by a lower allowance on revolving charge accounts, which continue to benefit from strong fundamentals within the

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agricultural market. The allowance for credit losses on retail notes and financing leases was relatively flat during the first quarter of 2023, as the impacts of favorable agricultural conditions were offset by higher expected losses on turf customer accounts. The Company continues to monitor the economy as part of the allowance setting process, including potential impacts of inflation and interest rates, among other factors, and qualitative adjustments to the allowance are incorporated as necessary.

An analysis of the allowance for credit losses and investment in Receivables during 2022 was as follows (in millions of dollars):

	Three Months Ended
	January 30, 2022
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	96.5	$	20.8	$	11.7	$	129.0
Provision (credit) for credit losses*		7.9		(9.4)		.1		(1.4)
Write-offs		(12.5)		(4.0)				(16.5)
Recoveries		2.9		7.8				10.7
Translation adjustments		(.1)				(.3)		(.4)
End of period balance	$	94.7	$	15.2	$	11.5	$	121.4
Receivables:
End of period balance	$	26,732.4	$	2,684.8	$	6,312.0	$	35,729.2

*Excludes provision for credit losses on unfunded commitments of $.2 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

Troubled Debt Restructuring

A troubled debt restructuring is a significant 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. The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes (in millions of dollars):

	Three Months Ended
	January 29		January 30
	2023		2022
Number of receivable contracts		36		87
Pre-modification balance	$	1.0	$	3.1
Post-modification balance		1.0		2.2

During the same periods as the table above, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At January 29, 2023, the Company had no commitments to provide additional financing to customers whose accounts were modified in troubled debt restructurings.

(5)  Securitization of Receivables

As a part of its overall funding strategy, the Company periodically transfers certain Receivables (retail notes) into VIEs that are 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

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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):

	January 29		October 30		January 30
	2023		2022		2022
Retail notes securitized	$	5,101.4	$	5,951.6	$	3,517.9
Allowance for credit losses		(12.5)		(15.7)		(10.1)
Other assets (primarily restricted cash)		97.2		155.2		100.3
Total restricted securitized assets	$	5,186.1	$	6,091.1	$	3,608.1
Securitization borrowings	$	4,863.9	$	5,710.9	$	3,473.8
Accrued interest on borrowings		5.9		6.1		1.2
Total liabilities related to restricted securitized assets	$	4,869.8	$	5,717.0	$	3,475.0

(6)  Leases

The Company leases John Deere equipment 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 leases on the consolidated balance sheets. Operating leases are reported in equipment on operating leases – net on the consolidated balance sheets.

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

	Three Months Ended
	January 29		January 30
	2023		2022
Sales-type and direct financing lease revenues	$	18.8	$	13.0
Operating lease revenues		217.1		223.1
Variable lease revenues		5.6		6.2
Total lease revenues	$	241.5	$	242.3

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 and were $.8 million in the first quarter of both 2023 and 2022.

The cost of equipment on operating leases by market was as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Agriculture and turf	$	4,893.6	$	5,017.3	$	4,903.2
Construction and forestry		1,084.9		1,138.0		1,244.3
Total		5,978.5		6,155.3		6,147.5
Accumulated depreciation		(1,285.1)		(1,301.8)		(1,401.9)
Equipment on operating leases - net	$	4,693.4	$	4,853.5	$	4,745.6

Total operating lease residual values at January 29, 2023, October 30, 2022, and January 30, 2022 were $3,257.1 million, $3,366.7 million, and $3,409.5 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $467.1 million, $440.7 million, and $319.9 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively. The increase in residual value guarantees is primarily due to guarantees provided by John Deere dealers, which generally provide a first-loss residual value guarantee on operating lease originations effective after January 2020.

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The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to operating lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at January 29, 2023, October 30, 2022, and January 30, 2022 were $11.8 million, $10.8 million, and $18.8 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheets.

(7)  Notes Receivable from and Payable to John Deere

The Company provides loans to and holds other receivables from affiliated companies. The loan agreements mature over the next seven years and charge interest at competitive market rates. Interest earned from John Deere is recorded in other income and was $6.9 million for the three months of 2023, compared with $5.4 million for the same period last year.

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Limited Liability Company John Deere Financial					$	196.9
Banco John Deere S.A.	$	494.4	$	370.0		174.8
John Deere Agricultural Holdings, Inc.				.7
Total Notes Receivable from John Deere	$	494.4	$	370.7	$	371.7

The Company also obtains funding from affiliated companies. At January 29, 2023, October 30, 2022, and January 30, 2022, the Company had notes payable to John Deere of $4,416.2 million, $5,225.5 million and $5,306.4 million, respectively. The intercompany borrowings are primarily short-term in nature or contain a due on demand call option. At January 29, 2023, $544.6 million of the intercompany borrowings were long-term loans without a due on demand call option, which mature in 2024. The Company pays interest to John Deere for these borrowings based on competitive market rates. Interest expense paid to John Deere, which is recorded in fees and interest paid to John Deere, was $40.0 million and $16.4 million for the three months ended January 29, 2023 and January 30, 2022 respectively.

(8)  Long-Term External Borrowings

Long-term external borrowings of the Company at January 29, 2023, October 30, 2022, and January 30, 2022 consisted of the following (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Senior Debt:
Medium-term notes	$	23,564.2	$	22,595.4	$	20,614.7
Other notes		.5		2.5		8.4
Total senior debt		23,564.7		22,597.9		20,623.1
Unamortized debt discount and debt issuance costs		(71.3)		(70.1)		(56.6)
Total	$	23,493.4	$	22,527.8	$	20,566.5

Medium-term notes are primarily offered by prospectus and issued at fixed and variable rates. The medium-term notes in the table above include unamortized fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $24,265.7 million, $23,564.6 million, and $20,541.0 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively, and have serial maturity dates through 2032. All outstanding medium-term notes and other notes in the table above are senior unsecured borrowings and generally rank equally with each other.

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(9)  Commitments and Contingencies

At January 29, 2023, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $2,101.8 million of medium-term notes outstanding, and a fair value liability of $118.7 million for derivatives outstanding, prior to considering applicable netting provisions, with notional amounts of $2,702.3 million that were guaranteed by Capital Corporation. The weighted-average interest rate on the medium-term notes at January 29, 2023 was 2.0 percent with a maximum remaining maturity of six years.

Capital Corporation has a variable interest in John Deere Canada Funding Inc. (JDCFI), a wholly-owned subsidiary of John Deere Financial Inc., which was created as a VIE to issue debt in public markets to fund the operations of affiliated companies in Canada. Capital Corporation has a variable interest in JDCFI because it provides guarantees for all debt issued by JDCFI, however it does not consolidate JDCFI because it does not have the power to direct the activities that most significantly impact JDCFI’s economic performance. Capital Corporation has no carrying value of assets or liabilities related to JDCFI. Its maximum exposure to loss is the amount of the debt issued by JDCFI and guaranteed by Capital Corporation, which was $150.1 million at January 29, 2023. The interest rate on the debt at January 29, 2023 was 3.0 percent with a remaining maturity less than one year. No additional support beyond what was previously contractually required has been provided to JDCFI during the reporting periods.

The Company has commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. The Company applies the same credit policies and approval process for these commitments to extend credit as it does for its Receivables. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. At January 29, 2023, the  amount of unused commitments to extend credit to customers and John Deere dealers was $33.3 billion and $7.7 billion, respectively. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of the unused commitments to extend credit to customers relate to revolving charge accounts. The Company has a reserve for credit losses of $2.9 million on unfunded commitments that are not unconditionally cancellable at January 29, 2023, which is recorded in accounts payable and accrued expenses on the consolidated balance sheets.

At January 29, 2023, the Company had restricted other assets associated with borrowings related to securitizations (see Note 5). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of 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 retail credit 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.

(10)   Fair Value Measurements

The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	January 29, 2023				October 30, 2022				January 30, 2022
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	37,444.9	$	36,668.3	$	36,438.6	$	35,562.4	$	32,100.0	$	32,055.4
Retail notes securitized – net		5,088.9		4,868.9		5,935.9		5,696.3		3,507.8		3,521.4
Securitization borrowings		4,863.9		4,784.8		5,710.9		5,576.6		3,473.8		3,459.3
Current maturities of long- term external borrowings		6,080.1		5,957.2		5,989.6		5,887.7		6,104.0		6,110.6
Long-term external borrowings		23,493.4		23,126.2		22,527.8		21,792.7		20,566.5		20,629.5

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

Fair values of 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 Receivables. The fair values of the remaining Receivables approximated the carrying amounts.

Fair values of long-term external borrowings and 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 external borrowings have been swapped to current variable interest rates. The carrying values of these long-term external borrowings include adjustments related to fair value hedges.

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Marketable securities
International debt securities	$	1.8	$	1.1	$	1.8
Receivables from John Deere
Derivatives		171.2		214.8		156.8
Other assets
Derivatives		1.2		1.3		27.3
Total assets	$	174.2	$	217.2	$	185.9
Other payables to John Deere
Derivatives	$	664.2	$	1,024.2	$	186.3
Accounts payable and accrued expenses
Derivatives		29.1		14.1		1.4
Total liabilities	$	693.3	$	1,038.3	$	187.7

All fair value measurements in the table above were Level 2. Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds.

The international debt securities mature over the next eight years. At January 29, 2023, the amortized cost basis and fair value of these available-for-sale debt securities were $5.0 million and $1.8 million, respectively. Unrealized losses at January 29, 2023 were not recognized in income due to the ability and intent to hold to maturity.

There were no assets or liabilities measured at fair value on a nonrecurring basis, other than Receivables with specific allowances which were not material, during each of the periods ended January 29, 2023, October 30, 2022, and January 30, 2022.

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

Marketable securities – The international debt securities are valued using quoted prices for identical assets in inactive markets.

Derivatives – The Company’s derivative financial instruments consist of interest rate contracts (swaps and caps), 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.

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).

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(11)  Derivative Instruments

The Company’s policy is to execute derivative transactions to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios 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 financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheets. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheets. The cash flows from the derivative contracts are 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 January 29, 2023, October 30, 2022, and January 30, 2022 were $1,950.0 million, $1,950.0 million, and $2,700.0 million, respectively. Fair value gains or losses on cash flow hedges are recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate changes on the related borrowings.

The amount of gain recorded in OCI at January 29, 2023 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is $41.0 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 January 29, 2023, October 30, 2022, and January 30, 2022 were $10,126.7 million, $9,448.9 million, and $7,600.8 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.

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The amounts recorded in the consolidated balance sheets 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
	Carrying		Cumulative		Carrying Amount		Cumulative
	Amount of		Fair Value		of Formerly		Fair Value
January 29, 2023	Hedged Item		Hedging Adjustment		Hedged Item		Hedging Adjustment
Current maturities of long-term external borrowings					$	1,914.8	$	15.3
Long-term external borrowings	$	9,461.7	$	(618.6)		5,505.8		(82.9)
October 30, 2022
Current maturities of long-term external borrowings					$	2,514.9	$	15.5
Long-term external borrowings	$	8,453.6	$	(950.1)		5,519.6		(19.1)
January 30, 2022
Current maturities of long-term external borrowings	$	177.4	$	1.7	$	2,356.9	$	8.1
Long-term external borrowings		7,283.2		(107.6)		5,447.0		181.3

Derivatives Not Designated as Hedging Instruments

The Company has certain interest rate contracts (swaps and caps), 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 for certain borrowings. The total notional amounts of the interest rate swaps at January 29, 2023, October 30, 2022, and January 30, 2022 were $4,847.8 million, $3,931.3 million, and $2,798.0 million, the foreign currency exchange contracts were $1,297.8 million, $1,069.0 million, and $967.9 million, and the cross-currency interest rate contracts were $119.3 million, $134.2 million, and $302.9 million, respectively. To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $788.8 million, $1,020.3 million, and $1,469.4 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively. Interest rate caps were also purchased with notional amounts of $788.8 million, $1,020.3 million, and $1,469.4 million at the same dates, 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.

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Fair values of derivative instruments in the consolidated balance sheets were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	90.0	$	87.5	$	102.7
Not designated as hedging instruments:
Interest rate contracts		80.9		124.5		30.6
Cross-currency interest rate contracts		.3		2.8		23.5
Total not designated		81.2		127.3		54.1
Other Assets
Not designated as hedging instruments:
Foreign currency exchange contracts		1.2		1.3		27.3
Total derivative assets	$	172.4	$	216.1	$	184.1
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	629.0	$	947.9	$	164.1
Not designated as hedging instruments:
Interest rate contracts		28.7		74.2		21.9
Cross-currency interest rate contracts		6.5		2.1		.3
Total not designated		35.2		76.3		22.2
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign currency exchange contracts		29.1		14.1		1.4
Total derivative liabilities	$	693.3	$	1,038.3	$	187.7

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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
	January 29		January 30
	2023		2022
Fair Value Hedges
Interest rate contracts - Interest expense	$	235.3	$	(139.5)
Cash Flow Hedges
Recognized in OCI:
Interest rate contracts - OCI (pretax)	$	(1.9)	$	15.4
Reclassified from OCI:
Interest rate contracts - Interest expense		16.3		(1.1)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(1.9)	$	(3.3)
Foreign currency exchange contracts - Administrative and operating expenses *		(135.1)		67.8
Total not designated	$	(137.0)	$	64.5

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

Included in the table above are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amounts the Company recognized on these affiliate party transactions for the three months ended January 29, 2023 and January 30, 2022 were a gain of $242.5 million and a loss of $122.6 million, respectively.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual unrelated external counterparty exposure by setting limits that consider the credit rating of the unrelated external counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the unrelated external counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Each master agreement permits the net settlement of amounts owed in the event of default or termination. None of the Company’s derivative agreements contain credit-risk-related contingent features.

The Company’s outstanding derivatives transactions are with both unrelated external counterparties and with John Deere. For derivatives transactions with John Deere, the Company utilizes a centralized hedging structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with the Company. Except for collateral provisions, the terms of the transaction between the Company and John Deere are identical to the terms of the transaction between John Deere and its unrelated external counterparty.

The Company has ISDA agreements with John Deere that permit the net settlement of amounts owed between counterparties in the event of early termination. In addition, the Company has a loss sharing agreement with John Deere in which the Company has agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage exposures of the Company. The loss sharing agreement did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of January 29, 2023, October 30, 2022, and January 30, 2022.

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Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

January 29, 2023
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.2				$	1.2
John Deere		171.2	$	(129.1)			42.1
Liabilities
External		29.1					29.1
John Deere		664.2		(129.1)			535.1

October 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.3	$	(1.1)		$	.2
John Deere		214.8		(128.3)			86.5
Liabilities
External		14.1		(1.1)			13.0
John Deere		1,024.2		(128.3)			895.9

January 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	27.3	$	(1.4)		$	25.9
John Deere		156.8		(130.9)			25.9
Liabilities
External		1.4		(1.4)
John Deere		186.3		(130.9)			55.4

(12)  Subsequent Events

On February 13, 2023, Deere & Company increased its investment in JDFS by $240.0 million. JDFS, in turn, increased its investment in Capital Corporation by the same amount.

In February 2023, the Company entered into two retail note securitization transactions. The first transaction resulted in $306.6 million of secured borrowings. The second transaction will result in $982.6 million of secured borrowings and is expected to settle in March 2023.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Overview

Organization

The Company primarily generates revenues and cash by financing John Deere dealers’ sales and leases of new and used production and precision agriculture, small agriculture and turf, and construction and forestry equipment. In addition, the Company also provides wholesale financing to dealers of the foregoing equipment and finances retail revolving charge accounts.

Smart Industrial Operating Model and Leap Ambitions

John Deere’s Smart Industrial operating model is focused on making significant investments in strengthening its 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. John Deere’s Leap Ambitions are goals designed to boost economic value and sustainability for John Deere’s customers. As an enabling business, the Company is fully integrated with John Deere’s Smart Industrial operating model and is focused on providing financial solutions to help John Deere achieve its Leap Ambitions. John Deere and the Company anticipate opportunities in this area, as John Deere, the Company, and their customers have a vested interest in sustainable practices.

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

Trends and Economic Conditions

The Company’s volume of Receivables and Leases is largely dependent upon the level of retail sales and leases of John Deere products. The level of John Deere retail sales and leases is responsive to a variety of economic, financial, climatic, legislative, and other factors that influence supply and demand for its products.

Industry Trends for Fiscal Year 2023

Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be down about 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 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 in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat.

John Deere Trends

Customers’ demand for integration of technology into equipment is a market trend underlying John Deere’s Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. John Deere’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 John Deere’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 John Deere’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

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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. John Deere expects the replenishment of dealer stock inventory to occur in 2024. Crop prices remain favorable to John Deere customers in part due to low stock-to-use ratios for key grains. John Deere 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.

John Deere experienced supply chain disruptions in 2022, which continued into 2023. Supply chain disruptions impacted many aspects of John Deere’s 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, John Deere experienced improvement during the first quarter of 2023. The reduction in supply chain disruptions contributed to higher levels of production. John Deere implemented mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand. While supply chain disruptions are expected to persist into 2023, John Deere is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably. Although John Deere experienced some improvement in this area during the first quarter of 2023, concerns remain, and this issue could impact John Deere’s ability to meet customer demand in the remainder of 2023.

Company Trends

Net income for the Company in fiscal 2023 is expected to be lower than fiscal 2022 primarily due to less favorable financing spreads, higher selling, administrative, and general expenses, and lower gains on operating lease dispositions. These factors are expected to be partially offset by income earned on a higher average portfolio, driven by strong demand of John Deere’s products in 2023, which is favorably impacting forecasted financing volumes.

Central bank policy interest rates increased in the first quarter of 2023 and are projected to continue to increase during 2023, but at a moderating pace compared to 2022. Most of the Company’s Customer Receivables are fixed rate, while its wholesale receivables generally earn a 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 Receivable and 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 Receivable and Lease portfolio. As a result, the Company’s financing spread was unfavorably impacted by $50.0 million (after-tax) in the first quarter of 2023 compared to 2022. The Company expects spread compression to persist during 2023.

Inflation was a pervasive feature throughout 2022, and the Company expects inflation to continue in 2023. The Company’s estimation of credit losses may be negatively impacted in the event customers’ operations are negatively impacted due to inflation or rising interest rates. As part of the process to establish the allowance for credit losses, the Company continues to monitor the economy, including potential impacts of inflation and rising interest rates, among other factors, and qualitative adjustments to the allowance are incorporated as necessary. As of January 29, 2023, impacts of inflation and interest rates did not have a material impact on the Company’s allowance.

As the Company’s volume of Receivables and Leases is largely dependent upon the level of retail sales and leases of John Deere products, supply chain disruptions could impact the Company’s future volumes. Despite supply chain challenges, the Company’s volumes are forecast to grow in 2023, driven by strong demand for John Deere equipment.

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.

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For additional information regarding the impact of supply chain disruptions, including mitigation efforts to minimize the impact of potential supply chain disruptions on John Deere’s ability to meet customer demand, as well as inflationary pressures, refer to Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Trends and Economic Conditions” included in Deere & Company’s Quarterly Report on Form 10-Q for the quarter ended January 29, 2023.

Items of Concern and Uncertainties

Other items of concern include global and regional political conditions, economic and trade policies, 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, significant fluctuations in foreign currency exchange rates, and volatility in the prices of many commodities. These items could impact the Company’s results. John Deere and the Company are making investments in technology and in strengthening capabilities in digital, automation, autonomy, and alternative propulsion technologies. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty.

2023 Compared with 2022

The total revenues and net income attributable to the Company were as follows (in millions of dollars):

	Three Months Ended
	January 29		January 30
	2023		2022
Total revenues	$	820.6	$	642.9
Net income attributable to the Company		147.1		189.6

Total revenues increased for the first quarter of 2023 primarily due to a 16% increase in average portfolio balances, in addition to higher average financing rates compared to the same period last year. Net income for the first quarter was lower compared to the same period in 2022 primarily due to less favorable financing spreads, higher selling, administrative, and general expenses, and lower gains on operating lease dispositions, partially offset by income earned on higher average portfolio balances.

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Revenues

Finance income, lease revenues, and other income earned by the Company were as follows (in millions of dollars):

	Three Months Ended
	January 29		January 30		%
	2023		2022		Change
Finance income earned on:
Retail notes	$	315.9	$	240.0	32
Revolving charge accounts		82.9		66.5	25
Wholesale receivables		151.5		59.9	153
Lease revenues		240.7		241.5
Other income		29.6		35.0	(15)

Finance income earned on retail notes, revolving charge accounts, and wholesale receivables increased during the first quarter of 2023 compared to 2022, due to higher average financing rates and higher average portfolio balances. Lease revenues were about the same for each period.

Other income decreased in the first quarter of 2023 due to lower gains on operating lease dispositions. While demand for used equipment remains strong, lease gains declined in the first quarter as end-of-lease book values are now more closely aligned with equipment sale proceeds. This decrease was partially offset by higher interest earned on the Company’s cash and cash equivalents.

Revenues earned from John Deere totaled $208.2 million for the first quarter of 2023, compared with $138.7 million for the same period last year. The increase was primarily due to increased compensation paid by John Deere on wholesale receivables and retail notes, driven by a higher interest rate environment, in addition to higher average portfolio balances. Revenues earned from John Deere are included in each of the revenue amounts discussed above.

Expenses

Expenses incurred by the Company were as follows (in millions of dollars):

	Three Months Ended
	January 29		January 30		%
	2023		2022		Change
Interest expense	$	301.0	$	99.5	203
Depreciation of equipment on operating leases		164.5		168.8	(3)
Administrative and operating expenses		108.5		96.4	13
Fees and interest paid to John Deere		57.6		39.7	45
Provision (credit) for credit losses		3.5		(1.2)
Provision for income taxes		39.6		52.0	(24)

The increase in interest expense for the first quarter of 2023 was primarily due to higher average borrowing rates and higher average borrowings.

Depreciation of equipment on operating leases for the first quarter of 2023 decreased slightly due to lower average balances of equipment on operating leases.

Administrative and operating expenses increased in the first quarter of 2023 compared to 2022 due to higher dealer incentive program costs and higher employment costs, including incentive compensation.

Fees and interest paid to John Deere increased in 2023 primarily due to higher interest on intercompany borrowings from John Deere driven by higher average borrowing rates.

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The provision (credit) for credit losses increased slightly in the first quarter of 2023 compared to the same period last year, primarily due to net recoveries on revolving charge accounts in the prior year period, which did not recur this year. The annualized provision (credit) for credit losses, as a percentage of the average balance of total Receivables, was .03 percent for the first quarter of 2023, compared with (.01) percent for the same period last year.

The provision for income taxes decreased during the first quarter of 2023 primarily due to lower pretax income in the current quarter.

Receivables and Leases

Receivable and Lease (excluding wholesale) volumes were as follows (in millions of dollars):

	Three Months Ended
	January 29		January 30		$		%
	2023		2022		Change		Change
Retail notes:
Agriculture and turf	$	2,684.5	$	2,319.9	$	364.6	16
Construction and forestry		630.6		674.5		(43.9)	(7)
Total retail notes		3,315.1		2,994.4		320.7	11
Revolving charge accounts		2,212.7		2,088.5		124.2	6
Financing leases		128.5		100.2		28.3	28
Equipment on operating leases		377.2		307.5		69.7	23
Total Receivables and Leases (excluding wholesale)	$	6,033.5	$	5,490.6	$	542.9	10

Total Receivables and Leases owned were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Retail notes:
Agriculture and turf	$	24,049.9	$	23,857.8	$	21,253.9
Construction and forestry		4,988.7		4,954.1		4,600.1
Total retail notes		29,038.6		28,811.9		25,854.0
Revolving charge accounts		2,834.0		4,165.8		2,684.8
Wholesale receivables		9,752.1		8,404.5		6,312.0
Financing leases		1,030.8		1,120.7		878.4
Equipment on operating leases		4,693.4		4,853.5		4,745.6
Total Receivables and Leases	$	47,348.9	$	47,356.4	$	40,474.8

Customer Receivables decreased $1,195.0 million during the first three months of 2023 mostly due to a seasonal decrease in revolving charge account receivables. Customer Receivables increased $3,486.2 million compared to one year ago due to strong John Deere retail sales. Wholesale receivables increased $1,347.6 million in the first three months of 2023 and $3,440.1 million compared to one year ago due to higher shipment volumes of John Deere equipment.

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Total Receivables 30 days or more past due, non-performing Receivables, and the allowance for credit losses were as follows (in millions of dollars and as a percentage of the Receivables balance):

	January 29			October 30			January 30
	2023			2022			2022
	Dollars		Percent	Dollars		Percent	Dollars		Percent
Receivables 30 days or more past due	$	489.4	1.15	$	404.9	.95	$	418.8	1.17
Non-performing Receivables		293.6	.69		263.2	.62		274.9	.77
Allowance for credit losses		121.7	.29		128.4	.30		121.4	.34

Receivables 30 days or more past due continue to accrue finance income. The Company ceases to accrue finance income once Receivables are considered non-performing. An allowance for credit losses is recorded for the estimated credit losses expected over the life of the Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses. While the Company believes its allowance is sufficient to provide for losses over the life of its existing Receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses and the provision for credit losses. See Note 4 for additional information related to the allowance for credit losses.

Deposits held from dealers and merchants amounted to $127.8 million at January 29, 2023, compared with $137.3 million at October 30, 2022 and $126.1 million at January 30, 2022. These balances primarily represent the aggregate dealer retail note and lease withholding accounts from individual John Deere dealers to which losses from retail notes and leases originating from the respective dealers can be charged. Recoveries from dealer deposits are recognized in other income when the dealer’s withholding account is charged. Recoveries from dealer deposits and other freestanding credit enhancements recorded in other income were $2.0 million in the first quarter of 2023, compared with $1.1 million for the same period last year.

Write-offs and recoveries of Receivables, by product, and as an annualized percentage of average balances held during the period, were as follows (in millions of dollars):

	Three Months Ended
	January 29, 2023			January 30, 2022
	Dollars		Percent	Dollars		Percent
Write-offs:
Retail notes and financing leases:
Agriculture and turf	$	(7.1)	(.11)	$	(6.1)	(.11)
Construction and forestry		(3.1)	(.24)		(6.4)	(.54)
Total retail notes and financing leases		(10.2)	(.14)		(12.5)	(.19)
Revolving charge accounts		(7.5)	(.91)		(4.0)	(.53)
Wholesale receivables		(.1)
Total write-offs		(17.8)	(.17)		(16.5)	(.19)
Recoveries:
Retail notes and financing leases:
Agriculture and turf		1.6	.03		2.0	.04
Construction and forestry		.8	.06		.9	.08
Total retail notes and financing leases		2.4	.03		2.9	.04
Revolving charge accounts		5.3	.64		7.8	1.04
Wholesale receivables		.6	.03
Total recoveries		8.3	.08		10.7	.12
Total net write-offs	$	(9.5)	(.09)	$	(5.8)	(.07)

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Critical Accounting Estimates

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

Capital Resources and Liquidity

For additional information on the Company’s dependence on, and relationship with, Deere & Company, see the Company’s most recently filed Annual Report on Form 10-K.

Sources of Liquidity, Key Metrics and Balance Sheet Data

The Company relies on its ability to raise substantial amounts of funds to finance its Receivable and Lease portfolios. The Company has access to most global markets at a reasonable cost. The Company’s ability to meet its debt obligations is supported in several ways. The assets of the Company are self-liquidating in nature. A solid equity position is available to absorb unusual losses on these assets, and all commercial paper is backed by unsecured, committed borrowing lines from various banks. Liquidity is also provided by the Company’s ability to securitize its retail notes and through the issuance of term debt in both public and private markets. Additionally, liquidity may be provided through loans from John Deere. 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).

Key metrics and certain balance sheet data are provided in the following table, in millions of dollars:

	January 29		October 30		January 30
	2023		2022		2022
Cash, cash equivalents, and marketable securities	$	1,056.8	$	662.9	$	666.3
Receivables and Leases – net		47,227.2		47,228.0		40,353.4
Interest-bearing debt		42,491.4		41,856.1		36,019.3
Unused credit lines		1,580.5		3,283.9		5,865.2
Ratio of interest-bearing debt to stockholder’s equity		8.5 to 1		8.7 to 1		7.7 to 1

The reduction in unused credit lines compared to both prior periods relates to an increase in commercial paper outstanding, by both the Company and John Deere, due to changes in Receivables and funding mix.

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

	Three Months Ended
	January 29		January 30
(In millions of dollars)	2023		2022
Net cash provided by operating activities	$	338.7	$	268.7
Net cash provided by (used for) investing activities		(53.0)		676.0
Net cash provided by (used for) financing activities		81.0		(963.1)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		13.1		(5.2)
Net increase (decrease) in cash, cash equivalents, and restricted cash	$	379.8	$	(23.6)

Net cash was used for investing activities during the first three months of 2023 primarily due to growth in wholesale receivables and notes receivable from John Deere, partially offset by a seasonal decrease in revolving charge account receivables. Net cash used by investing activities was funded primarily through external borrowings and cash provided by operating activities, partially offset by a reduction in borrowings from John Deere.

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Borrowings

Total borrowings increased $635.3 million in the first three months of 2023 and increased $6,472.1 million compared to a year ago, generally corresponding with the level of the Receivable and Lease portfolios, as well as the level of cash and cash equivalents. During the first three months of 2023, the Company issued $2,298.9 million and retired $1,618.5 million of long-term external borrowings, which primarily consisted of medium-term notes. During the first three months of 2023, the Company also retired $849.3 million of retail note securitization borrowings and maintained an average commercial paper balance of $3,331.5 million. The Company’s funding profile may be altered to reflect such factors as relative costs of funding sources, assets available for securitizations, and capital market accessibility.

The Company has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 5). The facility was renewed in November 2022 with an expiration in November 2023 and increased the total capacity or “financing limit” from $1,000.0 million to $1,500.0 million. At January 29, 2023, $786.0 million of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and the Company agree to renew, the Company would liquidate the secured borrowings over time as payments on the retail notes are collected.

Lines of Credit

The Company has access to bank lines of credit with various banks throughout the world. Some of the lines are available to both the Company and Deere & Company. Worldwide lines of credit totaled $8,029.0 million at January 29, 2023, $1,580.5 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings of the Company and John Deere, excluding secured borrowings and the current portion of long-term external borrowings, were considered to constitute utilization. Included in the total credit lines at January 29, 2023 was a 364-day credit facility agreement of $3,000.0 million, expiring in the second quarter of 2023. In addition, total credit lines included long-term credit facility agreements of $2,500.0 million, expiring in the second quarter of 2026, and $2,500.0 million, expiring in the second quarter of 2027. The Company expects to extend the terms of these credit facilities. These credit agreements require the Company to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and its ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. All of these credit agreement requirements have been met during the periods included in the consolidated financial statements.

Debt Ratings

The Company’s ability to obtain funding is affected by its debt ratings, which are closely related to the outlook for and the financial condition of John Deere, and the nature and availability of support facilities, such as the Company’s lines of credit and the support agreement from Deere & Company.

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 the Company’s securities. A credit rating agency may change or withdraw 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.

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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 the same as those for John Deere. Those ratings are as follows:

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

Forward-Looking Statements

Certain statements contained herein, including in the section entitled “Overview” relating to future events, expectations, and trends constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially.

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:

● volume of Receivables and Leases being dependent upon the level of retail sales and leases of John Deere products;

● 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 John Deere and the Company operate;

● 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);

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

● John Deere’s and the Company’s ability to understand and meet their customers’ changing expectations and demand for John Deere products and the Company’s financing solutions;

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

● John Deere’s 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 John Deere’s and the Company’s 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 John Deere’s supply chain;

● 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 John Deere or the Company and its products;

● compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, environmental, anti-money laundering, and consumer finance laws and regulations;

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● legislation introduced or enacted that could affect John Deere’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 John Deere’s or 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 business, 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 Annual Report on Form 10-K).

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

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

Omitted pursuant to General Instruction H.

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 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 first quarter, 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.

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 retail credit 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.

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.

Omitted pursuant to General Instruction H.

Item 3.     Defaults Upon Senior Securities.

Omitted pursuant to General Instruction H.

32

Item 4.     Mine Safety Disclosures.

Not applicable.

Item 5.     Other Information.

None.

Item 6.     Exhibits.

Certain instruments relating to long-term debt, 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 SEC.

3.1	Certificate of Incorporation, as amended (Exhibit 3.1 to Form 10-K of the registrant for the year ended October 31, 1999, Securities and Exchange Commission file number 1-6458*)
3.2	Bylaws, as amended (Exhibit 3.2 to Form 10-K of the registrant for the year ended October 31, 1999, Securities and Exchange Commission file number 1-6458*)
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.

33

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.

		JOHN DEERE CAPITAL CORPORATION
Date:	February 23, 2023	By:	/s/ Joshua A. Jepsen
			Joshua A. Jepsen
			Senior Vice President and Principal Financial Officer and Principal Accounting Officer

34

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John C. May, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of John Deere Capital Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 23, 2023	By:	/s/ John C. May
			John C. May
			Chairman and Chief Executive Officer and Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Joshua A. Jepsen, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of John Deere Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 23, 2023	By:	/s/ Joshua A. Jepsen
			Joshua A. Jepsen
			Senior Vice President and Principal Financial Officer and Principal Accounting Officer

EX-32

Exhibit 32

STATEMENT PURSUANT TO
18 U.S.C. SECTION 1350
AS REQUIRED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John Deere Capital Corporation (the “Company”) on Form 10-Q for the period ending January 29, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that to the best of our knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 23, 2023	/s/ John C. May	Chairman and Chief Executive Officer and Principal Executive Officer
	John C. May
February 23, 2023	/s/ Joshua A. Jepsen	Senior Vice President and Principal Financial Officer and Principal Accounting Officer
	Joshua A. Jepsen

A signed original of this written statement required by Section 906 has been provided to John Deere Capital Corporation and will be retained by John Deere Capital Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Jan. 29, 2023	Feb. 23, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jan. 29, 2023
Entity File Number	1-6458
Entity Registrant Name	DEERE JOHN CAPITAL CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2386361
Entity Address, Address Line One	P.O. Box 5328
Entity Address, City or Town	Madison
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53705-0328
City Area Code	800
Local Phone Number	438-7394
Title of 12(b) Security	2.00% Senior Notes Due 2031
Trading Symbol	JDCC 31
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,500
Current Fiscal Year End Date	--10-29
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000027673
Amendment Flag	false

XML

Statements of Consolidated Income - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Revenues
Finance income earned on retail notes	$ 315.9	$ 240.0
Lease revenues	240.7	241.5
Revolving charge account income	82.9	66.5
Finance income earned on wholesale receivables	151.5	59.9
Other income	29.6	35.0
Total revenues	820.6	642.9
Expenses
Interest expense	301.0	99.5
Operating expenses:
Depreciation of equipment on operating leases	164.5	168.8
Administrative and operating expenses	108.5	96.4
Fees and interest paid to John Deere	57.6	39.7
Provision (credit) for credit losses	3.5	(1.2)
Total operating expenses	334.1	303.7
Total expenses	635.1	403.2
Income of consolidated group before income taxes	185.5	239.7
Provision for income taxes	39.6	52.0
Income of consolidated group	145.9	187.7
Equity in income of unconsolidated affiliate	1.0	1.9
Net income	146.9	189.6
Less: Net loss attributable to noncontrolling interests	(0.2)
Net income attributable to the Company	$ 147.1	$ 189.6

XML

Statements of Consolidated Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Statements of Consolidated Comprehensive Income
Net income	$ 146.9	$ 189.6
Other comprehensive income (loss), net of income taxes
Cumulative translation adjustment	66.2	(36.4)
Unrealized gain (loss) on derivatives	(14.3)	13.0
Unrealized gain (loss) on debt securities	0.4	(0.2)
Other comprehensive income (loss), net of income taxes	52.3	(23.6)
Comprehensive income of consolidated group	199.2	166.0
Less: Comprehensive loss attributable to noncontrolling interests	(0.2)
Comprehensive income attributable to the Company	$ 199.4	$ 166.0

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Assets
Cash and cash equivalents	$ 1,055.0	$ 661.8	$ 664.5
Marketable securities	1.8	1.1	1.8
Receivables:
Total receivables	42,655.5	42,502.9	35,729.2
Allowance for credit losses	(121.7)	(128.4)	(121.4)
Total receivables - net	42,533.8	42,374.5	35,607.8
Other receivables	108.2	91.4	91.5
Receivables from John Deere	171.2	214.8	156.8
Equipment on operating leases - net	4,693.4	4,853.5	4,745.6
Notes receivable from John Deere	494.4	370.7	371.7
Investment in unconsolidated affiliate	25.8	22.6	22.7
Deferred income taxes	24.4	23.3	30.4
Other assets	298.4	314.3	334.4
Total Assets	49,406.4	48,928.0	42,027.2
Short-term external borrowings:
Commercial paper and other notes payable	3,637.8	2,402.3	568.6
Securitization borrowings	4,863.9	5,710.9	3,473.8
Current maturities of long-term external borrowings	6,080.1	5,989.6	6,104.0
Total short-term external borrowings	14,581.8	14,102.8	10,146.4
Notes payable to John Deere	4,416.2	5,225.5	5,306.4
Other payables to John Deere	664.2	1,024.2	186.3
Accounts payable and accrued expenses	893.4	866.1	782.8
Deposits held from dealers and merchants	127.8	137.3	126.1
Deferred income taxes	225.5	239.4	260.5
Long-term external borrowings	23,493.4	22,527.8	20,566.5
Total liabilities	44,402.3	44,123.1	37,375.0
Commitments and contingencies (Note 9)
Stockholder's equity:
Common stock, without par value (issued and outstanding - 2,500 shares owned by John Deere Financial Services, Inc.)	1,482.8	1,482.8	1,482.8
Retained earnings	3,572.4	3,425.3	3,240.6
Accumulated other comprehensive loss	(52.4)	(104.7)	(73.0)
Total Company stockholder's equity	5,002.8	4,803.4	4,650.4
Noncontrolling interests	1.3	1.5	1.8
Total stockholder's equity	5,004.1	4,804.9	4,652.2
Total Liabilities and Stockholder's Equity	49,406.4	48,928.0	42,027.2
Securitized
Receivables:
Other assets	97.2	155.2	100.3
Retail notes | Unrestricted
Receivables:
Total receivables	23,937.2	22,860.3	22,336.1
Retail notes | Securitized
Receivables:
Total receivables	$ 5,101.4	$ 5,951.6	$ 3,517.9
Location of liability for pledged asset	Securitization borrowings	Securitization borrowings	Securitization borrowings
Revolving charge accounts
Receivables:
Total receivables	$ 2,834.0	$ 4,165.8	$ 2,684.8
Allowance for credit losses	(16.0)	(21.9)	(15.2)
Wholesale Receivables
Receivables:
Total receivables	9,752.1	8,404.5	6,312.0
Allowance for credit losses	(10.9)	(11.1)	(11.5)
Financing Leases
Receivables:
Total receivables	$ 1,030.8	$ 1,120.7	$ 878.4

XML

Consolidated Balance Sheets (Parenthetical) - shares	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Consolidated Balance Sheets
Common stock, issued shares	2,500	2,500	2,500
Common stock, outstanding shares	2,500	2,500	2,500

XML

Statements of Consolidated Cash Flows - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Cash Flows from Operating Activities:
Net income	$ 146.9	$ 189.6
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses	3.5	(1.2)
Provision for depreciation and amortization	170.1	175.1
Credit for deferred income taxes	(11.3)	(5.8)
Change in accounts payable and accrued expenses	29.1	(72.6)
Change in accrued income taxes payable/receivable	10.0	11.7
Other	(9.6)	(28.1)
Net cash provided by operating activities	338.7	268.7
Cash Flows from Investing Activities:
Cost of receivables acquired (excluding wholesale)	(5,686.3)	(5,197.5)
Collections of receivables (excluding wholesale)	6,902.4	6,294.1
Increase in wholesale receivables - net	(1,148.5)	(457.9)
Cost of equipment on operating leases acquired	(375.3)	(317.4)
Proceeds from sales of equipment on operating leases	386.2	362.0
Cost of notes receivable acquired from John Deere	(120.8)	(107.1)
Collections of notes receivable from John Deere	2.2	106.3
Other	(12.9)	(6.5)
Net cash provided by (used for) investing activities	(53.0)	676.0
Cash Flows from Financing Activities:
Increase (decrease) in commercial paper and other notes payable - net	1,223.2	(110.3)
Decrease in securitization borrowings - net	(849.3)	(1,122.6)
Decrease in short-term borrowings with John Deere - net	(964.7)	(181.0)
Proceeds from issuance of long-term external borrowings	2,298.9	1,799.3
Payments of long-term external borrowings	(1,618.5)	(1,302.4)
Dividends paid		(40.0)
Debt issuance costs	(8.6)	(6.1)
Net cash provided by (used for) financing activities	81.0	(963.1)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	13.1	(5.2)
Net increase (decrease) in cash, cash equivalents, and restricted cash	379.8	(23.6)
Cash, cash equivalents, and restricted cash at beginning of period	766.1	772.8
Cash, cash equivalents, and restricted cash at end of period	1,145.9	749.2
Components of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	1,055.0	664.5
Restricted cash	$ 90.9	$ 84.7
Balance sheet location of restricted cash	Other assets	Other assets
Total cash, cash equivalents, and restricted cash	$ 1,145.9	$ 749.2

XML

Statements of Changes in Consolidated Stockholder's Equity - USD ($) $ in Millions	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-Controlling Interests	Total
Balance at Oct. 31, 2021	$ 1,482.8	$ 3,091.0	$ (49.4)	$ 1.8	$ 4,526.2
Increase (Decrease) in Stockholder's Equity
Net income (loss)		189.6			189.6
Other comprehensive income (loss)			(23.6)		(23.6)
Dividends declared		(40.0)			(40.0)
Balance at Jan. 30, 2022	1,482.8	3,240.6	(73.0)	1.8	4,652.2
Balance at Oct. 30, 2022	1,482.8	3,425.3	(104.7)	1.5	4,804.9
Increase (Decrease) in Stockholder's Equity
Net income (loss)		147.1		(0.2)	146.9
Other comprehensive income (loss)			52.3		52.3
Balance at Jan. 29, 2023	$ 1,482.8	$ 3,572.4	$ (52.4)	$ 1.3	$ 5,004.1

XML

Organization and Consolidation

3 Months Ended

Jan. 29, 2023

Organization and Consolidation

Organization and Consolidation

(1)  Organization and Consolidation

John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company’s production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations and used equipment taken in trade for this equipment. References to “agriculture and turf” include both production and precision agriculture and small agriculture and turf. The Company generally purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere generally acquires these retail notes through independent John Deere retail dealers. The Company also purchases and finances a limited amount of non-John Deere retail notes. In addition, the Company finances and services revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). The Company also provides wholesale financing to dealers of John Deere agriculture and turf equipment and construction and forestry equipment, primarily to finance inventories of equipment for those dealers (wholesale receivables). Further, the Company leases John Deere equipment and a limited amount of non-John Deere equipment to retail customers (financing and operating leases). The Company also offers credit enhanced international export financing to select customers and dealers, which primarily involves John Deere products. Retail notes, revolving charge accounts, and financing leases are collectively called “Customer Receivables.” Customer Receivables and wholesale receivables are collectively called “Receivables.” Receivables and equipment on operating leases are collectively called “Receivables and Leases.” The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral security in the goods associated with those Receivables or with the use of other collateral.

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

The Company is the primary beneficiary of and consolidates certain variable interest entities (VIEs) that are special purpose entities (SPEs) related to the securitization of receivables. See Note 5 for more information on these SPEs.

XML

Summary of Significant Accounting Policies and New Accounting Standards

3 Months Ended

Jan. 29, 2023

Summary of Significant Accounting Policies and New Accounting Standards

Summary of Significant Accounting Policies and New Accounting Standards

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

Quarterly Financial Statements

The Company has prepared its interim consolidated financial statements, 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 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.

New Accounting Standards

The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. ASUs adopted in 2023 did not have a material impact on the Company’s financial statements.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which will be effective in the first quarter of fiscal year 2024. The ASU eliminates the accounting guidance for troubled debt restructurings, enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. ASU No. 2022-02 and other 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.

XML

Other Comprehensive Income Items

3 Months Ended

Jan. 29, 2023

Other Comprehensive Income Items

Other Comprehensive Income Items

(3)  Other Comprehensive Income Items

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

	January 29		October 30		January 30
	2023		2022		2022
Cumulative translation adjustment	$	(102.8)	$	(169.0)	$	(90.9)
Unrealized gain on derivatives		52.5		66.8		19.8
Unrealized loss on debt securities		(2.1)		(2.5)		(1.9)
Total accumulated other comprehensive income (loss)	$	(52.4)	$	(104.7)	$	(73.0)

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 29, 2023	Amount		Credit		Amount
Cumulative translation adjustment	$	66.2			$	66.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.9)	$	.4		(1.5)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(16.3)		3.5		(12.8)
Net unrealized gain (loss) on derivatives		(18.2)		3.9		(14.3)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.7		(.3)		.4
Total other comprehensive income (loss)	$	48.7	$	3.6	$	52.3
Three Months Ended January 30, 2022
Cumulative translation adjustment	$	(36.4)			$	(36.4)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15.4	$	(3.3)		12.1
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.1		(.2)		.9
Net unrealized gain (loss) on derivatives		16.5		(3.5)		13.0
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.3)		.1		(.2)
Total other comprehensive income (loss)	$	(20.2)	$	(3.4)	$	(23.6)

XML

Receivables

3 Months Ended

Jan. 29, 2023

Receivables

Receivables

(4)  Receivables

Credit Quality

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of 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 Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when Customer Receivables are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income and lease revenue previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. During the first three months of 2023 and 2022, $2.8 million and $3.8 million, respectively, of accrued finance income and lease revenue was reversed on non-performing Receivables. Finance income and lease revenue for non-performing Receivables is recognized on a cash basis. Accrual of finance income and lease revenue is resumed when the receivable becomes contractually current and collections are reasonably assured. During the first quarter of both 2023 and 2022, $3.1 million of finance income and lease revenue was recognized from cash payments on non-performing Receivables.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

The credit quality analysis of Customer Receivables by year of origination was as follows (in millions of dollars):

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,458.1	$	10,776.6	$	6,318.7	$	3,112.2	$	1,292.6	$	566.4	$	2,686.3	$	27,210.9
30-59 days past due		1.7		29.4		29.2		48.2		10.4		42.8		27.2		188.9
60-89 days past due		1.3		12.2		10.5		18.0		3.7		14.1		5.9		65.7
90+ days past due				1.2		.2		2.9		1.0		.2				5.5
Non-performing		.3		35.1		43.3		29.1		15.0		19.6		7.8		150.2
Construction and forestry
Current		553.7		2,156.3		1,339.0		538.4		177.7		68.5		99.0		4,932.6
30-59 days past due		1.5		9.9		23.6		34.3		15.7		52.1		4.6		141.7
60-89 days past due		.4		4.3		15.7		17.7		6.4		23.0		2.0		69.5
90+ days past due				.1		.2		.4		.2						.9
Non-performing				38.9		51.8		26.1		13.0		6.5		1.2		137.5
Total Customer Receivables	$	3,017.0	$	13,064.0	$	7,832.2	$	3,827.3	$	1,535.7	$	793.2	$	2,834.0	$	32,903.4

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,764.5	$	6,958.0	$	3,488.7	$	1,519.7	$	582.8	$	153.2	$	4,022.7	$	28,489.6
30-59 days past due		40.1		55.8		31.4		15.0		6.4		2.7		18.4		169.8
60-89 days past due		11.8		19.5		10.8		4.4		2.0		1.1		4.5		54.1
90+ days past due		.4		.2		.2										.8
Non-performing		24.7		38.4		29.2		13.7		11.2		10.2		7.8		135.2
Construction and forestry
Current		2,373.7		1,526.3		658.1		230.7		57.2		10.5		107.7		4,964.2
30-59 days past due		44.5		40.6		20.7		7.6		1.8		.6		3.1		118.9
60-89 days past due		18.1		11.4		6.0		3.0		.7		.1		1.0		40.3
90+ days past due		.3		1.3				1.4								3.0
Non-performing		19.3		51.2		27.6		15.4		5.5		2.9		.6		122.5
Total Customer Receivables	$	14,297.4	$	8,702.7	$	4,272.7	$	1,810.9	$	667.6	$	181.3	$	4,165.8	$	34,098.4

	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,181.1	$	10,156.1	$	5,099.4	$	2,469.2	$	1,175.8	$	539.0	$	2,565.0	$	24,185.6
30-59 days past due		4.4		67.7		39.7		23.8		12.6		5.7		23.5		177.4
60-89 days past due		.2		17.5		13.3		7.6		4.2		2.2		4.7		49.7
90+ days past due				1.5				.1		.1		.1				1.8
Non-performing		.4		27.9		45.0		26.0		22.1		20.0		5.9		147.3
Construction and forestry
Current		625.7		2,131.1		1,050.4		471.3		159.0		39.5		80.8		4,557.8
30-59 days past due		7.4		58.5		32.1		18.0		5.5		1.6		2.6		125.7
60-89 days past due				20.5		15.1		6.5		1.9		.7		1.1		45.8
90+ days past due				1.0		1.8		2.0								4.8
Non-performing		.4		26.4		44.7		30.2		12.1		6.3		1.2		121.3
Total Customer Receivables	$	2,819.6	$	12,508.2	$	6,341.5	$	3,054.7	$	1,393.3	$	615.1	$	2,684.8	$	29,417.2

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

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	114.6	$	283.2	$	45.7	$	20.2	$	3.7	$	1.2	$	7,349.9	$	7,818.5
30+ days past due				.3										9.2		9.5
Non-performing														5.9		5.9
Construction and forestry
Current		5.8		3.8		23.7		1.0		.3		.1		1,875.8		1,910.5
30+ days past due														7.7		7.7
Non-performing
Total wholesale receivables	$	120.4	$	287.3	$	69.4	$	21.2	$	4.0	$	1.3	$	9,248.5	$	9,752.1

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	381.3	$	62.7	$	25.0	$	3.8	$	.3	$	1.1	$	6,238.1	$	6,712.3
30+ days past due				.1										8.3		8.4
Non-performing														5.5		5.5
Construction and forestry
Current		4.8		28.2		1.4		.4		.1				1,633.8		1,668.7
30+ days past due														9.6		9.6
Non-performing
Total wholesale receivables	$	386.1	$	91.0	$	26.4	$	4.2	$	.4	$	1.1	$	7,895.3	$	8,404.5

	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	101.1	$	237.1	$	54.2	$	11.3	$	6.5	$	2.1	$	4,510.5	$	4,922.8
30+ days past due														12.6		12.6
Non-performing														6.3		6.3
Construction and forestry
Current		3.5		35.7		2.3		2.7		.2				1,324.9		1,369.3
30+ days past due														1.0		1.0
Non-performing
Total wholesale receivables	$	104.6	$	272.8	$	56.5	$	14.0	$	6.7	$	2.1	$	5,855.3	$	6,312.0

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.

Recoveries from freestanding credit enhancements, such as dealer deposits, and certain credit insurance contracts are not included in the estimate of expected credit losses. Recoveries from dealer deposits are recognized in other income on the statements of consolidated income when the dealer’s withholding account is charged. During the three months ended January 29, 2023 and January 30, 2022, recoveries from freestanding credit enhancements recorded in other income were $2.0 million and $1.1 million, respectively.

An analysis of the allowance for credit losses and investment in Receivables during 2023 was as follows (in millions of dollars):

	Three Months Ended
	January 29, 2023
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	95.4	$	21.9	$	11.1	$	128.4
Provision (credit) for credit losses*		6.8		(3.7)		(.5)		2.6
Write-offs		(10.2)		(7.5)		(.1)		(17.8)
Recoveries		2.4		5.3		.6		8.3
Translation adjustments		.4				(.2)		.2
End of period balance	$	94.8	$	16.0	$	10.9	$	121.7
Receivables:
End of period balance	$	30,069.4	$	2,834.0	$	9,752.1	$	42,655.5

*Excludes provision for credit losses on unfunded commitments of $.9 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

The allowance for credit losses decreased $6.7 million in the first three months of 2023, primarily driven by a lower allowance on revolving charge accounts, which continue to benefit from strong fundamentals within the

agricultural market. The allowance for credit losses on retail notes and financing leases was relatively flat during the first quarter of 2023, as the impacts of favorable agricultural conditions were offset by higher expected losses on turf customer accounts. The Company continues to monitor the economy as part of the allowance setting process, including potential impacts of inflation and interest rates, among other factors, and qualitative adjustments to the allowance are incorporated as necessary.

An analysis of the allowance for credit losses and investment in Receivables during 2022 was as follows (in millions of dollars):

	Three Months Ended
	January 30, 2022
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	96.5	$	20.8	$	11.7	$	129.0
Provision (credit) for credit losses*		7.9		(9.4)		.1		(1.4)
Write-offs		(12.5)		(4.0)				(16.5)
Recoveries		2.9		7.8				10.7
Translation adjustments		(.1)				(.3)		(.4)
End of period balance	$	94.7	$	15.2	$	11.5	$	121.4
Receivables:
End of period balance	$	26,732.4	$	2,684.8	$	6,312.0	$	35,729.2

*Excludes provision for credit losses on unfunded commitments of $.2 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

Troubled Debt Restructuring

A troubled debt restructuring is a significant 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. The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes (in millions of dollars):

	Three Months Ended
	January 29		January 30
	2023		2022
Number of receivable contracts		36		87
Pre-modification balance	$	1.0	$	3.1
Post-modification balance		1.0		2.2

During the same periods as the table above, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At January 29, 2023, the Company had no commitments to provide additional financing to customers whose accounts were modified in troubled debt restructurings.

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Securitization of Receivables

3 Months Ended

Jan. 29, 2023

Securitization of Receivables

Securitization of Receivables

(5)  Securitization of Receivables

As a part of its overall funding strategy, the Company periodically transfers certain Receivables (retail notes) into VIEs that are 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):

	January 29		October 30		January 30
	2023		2022		2022
Retail notes securitized	$	5,101.4	$	5,951.6	$	3,517.9
Allowance for credit losses		(12.5)		(15.7)		(10.1)
Other assets (primarily restricted cash)		97.2		155.2		100.3
Total restricted securitized assets	$	5,186.1	$	6,091.1	$	3,608.1
Securitization borrowings	$	4,863.9	$	5,710.9	$	3,473.8
Accrued interest on borrowings		5.9		6.1		1.2
Total liabilities related to restricted securitized assets	$	4,869.8	$	5,717.0	$	3,475.0

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Leases

3 Months Ended

Jan. 29, 2023

Leases

Leases

(6)  Leases

The Company leases John Deere equipment 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 leases on the consolidated balance sheets. Operating leases are reported in equipment on operating leases – net on the consolidated balance sheets.

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

	Three Months Ended
	January 29		January 30
	2023		2022
Sales-type and direct financing lease revenues	$	18.8	$	13.0
Operating lease revenues		217.1		223.1
Variable lease revenues		5.6		6.2
Total lease revenues	$	241.5	$	242.3

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 and were $.8 million in the first quarter of both 2023 and 2022.

The cost of equipment on operating leases by market was as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Agriculture and turf	$	4,893.6	$	5,017.3	$	4,903.2
Construction and forestry		1,084.9		1,138.0		1,244.3
Total		5,978.5		6,155.3		6,147.5
Accumulated depreciation		(1,285.1)		(1,301.8)		(1,401.9)
Equipment on operating leases - net	$	4,693.4	$	4,853.5	$	4,745.6

Total operating lease residual values at January 29, 2023, October 30, 2022, and January 30, 2022 were $3,257.1 million, $3,366.7 million, and $3,409.5 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $467.1 million, $440.7 million, and $319.9 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively. The increase in residual value guarantees is primarily due to guarantees provided by John Deere dealers, which generally provide a first-loss residual value guarantee on operating lease originations effective after January 2020.

The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to operating lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at January 29, 2023, October 30, 2022, and January 30, 2022 were $11.8 million, $10.8 million, and $18.8 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheets.

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Notes Receivable from and Payable to John Deere

3 Months Ended

Jan. 29, 2023

Notes Receivable from and Payable to John Deere

Notes Receivable from and Payable to John Deere

(7)  Notes Receivable from and Payable to John Deere

The Company provides loans to and holds other receivables from affiliated companies. The loan agreements mature over the next seven years and charge interest at competitive market rates. Interest earned from John Deere is recorded in other income and was $6.9 million for the three months of 2023, compared with $5.4 million for the same period last year.

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Limited Liability Company John Deere Financial					$	196.9
Banco John Deere S.A.	$	494.4	$	370.0		174.8
John Deere Agricultural Holdings, Inc.				.7
Total Notes Receivable from John Deere	$	494.4	$	370.7	$	371.7

The Company also obtains funding from affiliated companies. At January 29, 2023, October 30, 2022, and January 30, 2022, the Company had notes payable to John Deere of $4,416.2 million, $5,225.5 million and $5,306.4 million, respectively. The intercompany borrowings are primarily short-term in nature or contain a due on demand call option. At January 29, 2023, $544.6 million of the intercompany borrowings were long-term loans without a due on demand call option, which mature in 2024. The Company pays interest to John Deere for these borrowings based on competitive market rates. Interest expense paid to John Deere, which is recorded in fees and interest paid to John Deere, was $40.0 million and $16.4 million for the three months ended January 29, 2023 and January 30, 2022 respectively.

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Long-Term External Borrowings

3 Months Ended

Jan. 29, 2023

Long-Term External Borrowings

Long-Term External Borrowings

(8)  Long-Term External Borrowings

Long-term external borrowings of the Company at January 29, 2023, October 30, 2022, and January 30, 2022 consisted of the following (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Senior Debt:
Medium-term notes	$	23,564.2	$	22,595.4	$	20,614.7
Other notes		.5		2.5		8.4
Total senior debt		23,564.7		22,597.9		20,623.1
Unamortized debt discount and debt issuance costs		(71.3)		(70.1)		(56.6)
Total	$	23,493.4	$	22,527.8	$	20,566.5

Medium-term notes are primarily offered by prospectus and issued at fixed and variable rates. The medium-term notes in the table above include unamortized fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $24,265.7 million, $23,564.6 million, and $20,541.0 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively, and have serial maturity dates through 2032. All outstanding medium-term notes and other notes in the table above are senior unsecured borrowings and generally rank equally with each other.

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Commitments and Contingencies

3 Months Ended

Jan. 29, 2023

Commitments and Contingencies

Commitments and Contingencies

(9)  Commitments and Contingencies

At January 29, 2023, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $2,101.8 million of medium-term notes outstanding, and a fair value liability of $118.7 million for derivatives outstanding, prior to considering applicable netting provisions, with notional amounts of $2,702.3 million that were guaranteed by Capital Corporation. The weighted-average interest rate on the medium-term notes at January 29, 2023 was 2.0 percent with a maximum remaining maturity of six years.

Capital Corporation has a variable interest in John Deere Canada Funding Inc. (JDCFI), a wholly-owned subsidiary of John Deere Financial Inc., which was created as a VIE to issue debt in public markets to fund the operations of affiliated companies in Canada. Capital Corporation has a variable interest in JDCFI because it provides guarantees for all debt issued by JDCFI, however it does not consolidate JDCFI because it does not have the power to direct the activities that most significantly impact JDCFI’s economic performance. Capital Corporation has no carrying value of assets or liabilities related to JDCFI. Its maximum exposure to loss is the amount of the debt issued by JDCFI and guaranteed by Capital Corporation, which was $150.1 million at January 29, 2023. The interest rate on the debt at January 29, 2023 was 3.0 percent with a remaining maturity less than one year. No additional support beyond what was previously contractually required has been provided to JDCFI during the reporting periods.

The Company has commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. The Company applies the same credit policies and approval process for these commitments to extend credit as it does for its Receivables. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. At January 29, 2023, the  amount of unused commitments to extend credit to customers and John Deere dealers was $33.3 billion and $7.7 billion, respectively. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of the unused commitments to extend credit to customers relate to revolving charge accounts. The Company has a reserve for credit losses of $2.9 million on unfunded commitments that are not unconditionally cancellable at January 29, 2023, which is recorded in accounts payable and accrued expenses on the consolidated balance sheets.

At January 29, 2023, the Company had restricted other assets associated with borrowings related to securitizations (see Note 5). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of 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 retail credit 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.

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Fair Value Measurements

3 Months Ended

Jan. 29, 2023

Fair Value Measurements

Fair Value Measurements

(10)   Fair Value Measurements

The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	January 29, 2023				October 30, 2022				January 30, 2022
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	37,444.9	$	36,668.3	$	36,438.6	$	35,562.4	$	32,100.0	$	32,055.4
Retail notes securitized – net		5,088.9		4,868.9		5,935.9		5,696.3		3,507.8		3,521.4
Securitization borrowings		4,863.9		4,784.8		5,710.9		5,576.6		3,473.8		3,459.3
Current maturities of long- term external borrowings		6,080.1		5,957.2		5,989.6		5,887.7		6,104.0		6,110.6
Long-term external borrowings		23,493.4		23,126.2		22,527.8		21,792.7		20,566.5		20,629.5

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

Fair values of 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 Receivables. The fair values of the remaining Receivables approximated the carrying amounts.

Fair values of long-term external borrowings and 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 external borrowings have been swapped to current variable interest rates. The carrying values of these long-term external borrowings include adjustments related to fair value hedges.

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Marketable securities
International debt securities	$	1.8	$	1.1	$	1.8
Receivables from John Deere
Derivatives		171.2		214.8		156.8
Other assets
Derivatives		1.2		1.3		27.3
Total assets	$	174.2	$	217.2	$	185.9
Other payables to John Deere
Derivatives	$	664.2	$	1,024.2	$	186.3
Accounts payable and accrued expenses
Derivatives		29.1		14.1		1.4
Total liabilities	$	693.3	$	1,038.3	$	187.7

All fair value measurements in the table above were Level 2. Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds.

The international debt securities mature over the next eight years. At January 29, 2023, the amortized cost basis and fair value of these available-for-sale debt securities were $5.0 million and $1.8 million, respectively. Unrealized losses at January 29, 2023 were not recognized in income due to the ability and intent to hold to maturity.

There were no assets or liabilities measured at fair value on a nonrecurring basis, other than Receivables with specific allowances which were not material, during each of the periods ended January 29, 2023, October 30, 2022, and January 30, 2022.

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

Marketable securities – The international debt securities are valued using quoted prices for identical assets in inactive markets.

Derivatives – The Company’s derivative financial instruments consist of interest rate contracts (swaps and caps), 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.

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).

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Derivative Instruments

3 Months Ended

Jan. 29, 2023

Derivative Instruments

Derivative Instruments

(11)  Derivative Instruments

The Company’s policy is to execute derivative transactions to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios 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 financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheets. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheets. The cash flows from the derivative contracts are 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 January 29, 2023, October 30, 2022, and January 30, 2022 were $1,950.0 million, $1,950.0 million, and $2,700.0 million, respectively. Fair value gains or losses on cash flow hedges are recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate changes on the related borrowings.

The amount of gain recorded in OCI at January 29, 2023 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is $41.0 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 January 29, 2023, October 30, 2022, and January 30, 2022 were $10,126.7 million, $9,448.9 million, and $7,600.8 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 sheets 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
	Carrying		Cumulative		Carrying Amount		Cumulative
	Amount of		Fair Value		of Formerly		Fair Value
January 29, 2023	Hedged Item		Hedging Adjustment		Hedged Item		Hedging Adjustment
Current maturities of long-term external borrowings					$	1,914.8	$	15.3
Long-term external borrowings	$	9,461.7	$	(618.6)		5,505.8		(82.9)
October 30, 2022
Current maturities of long-term external borrowings					$	2,514.9	$	15.5
Long-term external borrowings	$	8,453.6	$	(950.1)		5,519.6		(19.1)
January 30, 2022
Current maturities of long-term external borrowings	$	177.4	$	1.7	$	2,356.9	$	8.1
Long-term external borrowings		7,283.2		(107.6)		5,447.0		181.3

Derivatives Not Designated as Hedging Instruments

The Company has certain interest rate contracts (swaps and caps), 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 for certain borrowings. The total notional amounts of the interest rate swaps at January 29, 2023, October 30, 2022, and January 30, 2022 were $4,847.8 million, $3,931.3 million, and $2,798.0 million, the foreign currency exchange contracts were $1,297.8 million, $1,069.0 million, and $967.9 million, and the cross-currency interest rate contracts were $119.3 million, $134.2 million, and $302.9 million, respectively. To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $788.8 million, $1,020.3 million, and $1,469.4 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively. Interest rate caps were also purchased with notional amounts of $788.8 million, $1,020.3 million, and $1,469.4 million at the same dates, 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.

Fair values of derivative instruments in the consolidated balance sheets were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	90.0	$	87.5	$	102.7
Not designated as hedging instruments:
Interest rate contracts		80.9		124.5		30.6
Cross-currency interest rate contracts		.3		2.8		23.5
Total not designated		81.2		127.3		54.1
Other Assets
Not designated as hedging instruments:
Foreign currency exchange contracts		1.2		1.3		27.3
Total derivative assets	$	172.4	$	216.1	$	184.1
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	629.0	$	947.9	$	164.1
Not designated as hedging instruments:
Interest rate contracts		28.7		74.2		21.9
Cross-currency interest rate contracts		6.5		2.1		.3
Total not designated		35.2		76.3		22.2
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign currency exchange contracts		29.1		14.1		1.4
Total derivative liabilities	$	693.3	$	1,038.3	$	187.7

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
	January 29		January 30
	2023		2022
Fair Value Hedges
Interest rate contracts - Interest expense	$	235.3	$	(139.5)
Cash Flow Hedges
Recognized in OCI:
Interest rate contracts - OCI (pretax)	$	(1.9)	$	15.4
Reclassified from OCI:
Interest rate contracts - Interest expense		16.3		(1.1)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(1.9)	$	(3.3)
Foreign currency exchange contracts - Administrative and operating expenses *		(135.1)		67.8
Total not designated	$	(137.0)	$	64.5

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

Included in the table above are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amounts the Company recognized on these affiliate party transactions for the three months ended January 29, 2023 and January 30, 2022 were a gain of $242.5 million and a loss of $122.6 million, respectively.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual unrelated external counterparty exposure by setting limits that consider the credit rating of the unrelated external counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the unrelated external counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Each master agreement permits the net settlement of amounts owed in the event of default or termination. None of the Company’s derivative agreements contain credit-risk-related contingent features.

The Company’s outstanding derivatives transactions are with both unrelated external counterparties and with John Deere. For derivatives transactions with John Deere, the Company utilizes a centralized hedging structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with the Company. Except for collateral provisions, the terms of the transaction between the Company and John Deere are identical to the terms of the transaction between John Deere and its unrelated external counterparty.

The Company has ISDA agreements with John Deere that permit the net settlement of amounts owed between counterparties in the event of early termination. In addition, the Company has a loss sharing agreement with John Deere in which the Company has agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage exposures of the Company. The loss sharing agreement did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of January 29, 2023, October 30, 2022, and January 30, 2022.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

January 29, 2023
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.2				$	1.2
John Deere		171.2	$	(129.1)			42.1
Liabilities
External		29.1					29.1
John Deere		664.2		(129.1)			535.1

October 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.3	$	(1.1)		$	.2
John Deere		214.8		(128.3)			86.5
Liabilities
External		14.1		(1.1)			13.0
John Deere		1,024.2		(128.3)			895.9

January 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	27.3	$	(1.4)		$	25.9
John Deere		156.8		(130.9)			25.9
Liabilities
External		1.4		(1.4)
John Deere		186.3		(130.9)			55.4

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Subsequent Events

3 Months Ended

Jan. 29, 2023

Subsequent Events

Subsequent Events

(12)  Subsequent Events

On February 13, 2023, Deere & Company increased its investment in JDFS by $240.0 million. JDFS, in turn, increased its investment in Capital Corporation by the same amount.

In February 2023, the Company entered into two retail note securitization transactions. The first transaction resulted in $306.6 million of secured borrowings. The second transaction will result in $982.6 million of secured borrowings and is expected to settle in March 2023.

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Organization and Consolidation (Policies)

3 Months Ended

Jan. 29, 2023

Organization and Consolidation

Fiscal Year

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

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.

Allowance for Credit Losses, Policy

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of 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 Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when Customer Receivables are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income and lease revenue previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. During the first three months of 2023 and 2022, $2.8 million and $3.8 million, respectively, of accrued finance income and lease revenue was reversed on non-performing Receivables. Finance income and lease revenue for non-performing Receivables is recognized on a cash basis. Accrual of finance income and lease revenue is resumed when the receivable becomes contractually current and collections are reasonably assured. During the first quarter of both 2023 and 2022, $3.1 million of finance income and lease revenue was recognized from cash payments on non-performing Receivables.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.

Troubled Debt Restructuring, Policy

A troubled debt restructuring is a significant 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.

Derivative Financial Instruments

The Company’s policy is to execute derivative transactions to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios 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 financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheets. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheets. The cash flows from the derivative contracts are 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.

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Other Comprehensive Income Items (Tables)

3 Months Ended

Jan. 29, 2023

Other Comprehensive Income Items

Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss)

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

	January 29		October 30		January 30
	2023		2022		2022
Cumulative translation adjustment	$	(102.8)	$	(169.0)	$	(90.9)
Unrealized gain on derivatives		52.5		66.8		19.8
Unrealized loss on debt securities		(2.1)		(2.5)		(1.9)
Total accumulated other comprehensive income (loss)	$	(52.4)	$	(104.7)	$	(73.0)

Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 29, 2023	Amount		Credit		Amount
Cumulative translation adjustment	$	66.2			$	66.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.9)	$	.4		(1.5)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(16.3)		3.5		(12.8)
Net unrealized gain (loss) on derivatives		(18.2)		3.9		(14.3)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.7		(.3)		.4
Total other comprehensive income (loss)	$	48.7	$	3.6	$	52.3
Three Months Ended January 30, 2022
Cumulative translation adjustment	$	(36.4)			$	(36.4)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15.4	$	(3.3)		12.1
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.1		(.2)		.9
Net unrealized gain (loss) on derivatives		16.5		(3.5)		13.0
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.3)		.1		(.2)
Total other comprehensive income (loss)	$	(20.2)	$	(3.4)	$	(23.6)

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Receivables (Tables)

3 Months Ended

Jan. 29, 2023

Receivables

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables during 2023 was as follows (in millions of dollars):

	Three Months Ended
	January 29, 2023
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	95.4	$	21.9	$	11.1	$	128.4
Provision (credit) for credit losses*		6.8		(3.7)		(.5)		2.6
Write-offs		(10.2)		(7.5)		(.1)		(17.8)
Recoveries		2.4		5.3		.6		8.3
Translation adjustments		.4				(.2)		.2
End of period balance	$	94.8	$	16.0	$	10.9	$	121.7
Receivables:
End of period balance	$	30,069.4	$	2,834.0	$	9,752.1	$	42,655.5

*Excludes provision for credit losses on unfunded commitments of $.9 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

The allowance for credit losses decreased $6.7 million in the first three months of 2023, primarily driven by a lower allowance on revolving charge accounts, which continue to benefit from strong fundamentals within the

agricultural market. The allowance for credit losses on retail notes and financing leases was relatively flat during the first quarter of 2023, as the impacts of favorable agricultural conditions were offset by higher expected losses on turf customer accounts. The Company continues to monitor the economy as part of the allowance setting process, including potential impacts of inflation and interest rates, among other factors, and qualitative adjustments to the allowance are incorporated as necessary.

An analysis of the allowance for credit losses and investment in Receivables during 2022 was as follows (in millions of dollars):

	Three Months Ended
	January 30, 2022
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	96.5	$	20.8	$	11.7	$	129.0
Provision (credit) for credit losses*		7.9		(9.4)		.1		(1.4)
Write-offs		(12.5)		(4.0)				(16.5)
Recoveries		2.9		7.8				10.7
Translation adjustments		(.1)				(.3)		(.4)
End of period balance	$	94.7	$	15.2	$	11.5	$	121.4
Receivables:
End of period balance	$	26,732.4	$	2,684.8	$	6,312.0	$	35,729.2

*Excludes provision for credit losses on unfunded commitments of $.2 million. The estimated credit losses related to unfunded commitments are recorded in accounts payable and accrued expenses on the consolidated balance sheets.

Schedule of Troubled Debt Restructuring Modifications

The following table includes Receivable contracts identified as troubled debt restructurings, which were primarily retail notes (in millions of dollars):

	Three Months Ended
	January 29		January 30
	2023		2022
Number of receivable contracts		36		87
Pre-modification balance	$	1.0	$	3.1
Post-modification balance		1.0		2.2

Customer Receivables

Receivables

Credit Quality Analysis

The credit quality analysis of Customer Receivables by year of origination was as follows (in millions of dollars):

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,458.1	$	10,776.6	$	6,318.7	$	3,112.2	$	1,292.6	$	566.4	$	2,686.3	$	27,210.9
30-59 days past due		1.7		29.4		29.2		48.2		10.4		42.8		27.2		188.9
60-89 days past due		1.3		12.2		10.5		18.0		3.7		14.1		5.9		65.7
90+ days past due				1.2		.2		2.9		1.0		.2				5.5
Non-performing		.3		35.1		43.3		29.1		15.0		19.6		7.8		150.2
Construction and forestry
Current		553.7		2,156.3		1,339.0		538.4		177.7		68.5		99.0		4,932.6
30-59 days past due		1.5		9.9		23.6		34.3		15.7		52.1		4.6		141.7
60-89 days past due		.4		4.3		15.7		17.7		6.4		23.0		2.0		69.5
90+ days past due				.1		.2		.4		.2						.9
Non-performing				38.9		51.8		26.1		13.0		6.5		1.2		137.5
Total Customer Receivables	$	3,017.0	$	13,064.0	$	7,832.2	$	3,827.3	$	1,535.7	$	793.2	$	2,834.0	$	32,903.4

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	11,764.5	$	6,958.0	$	3,488.7	$	1,519.7	$	582.8	$	153.2	$	4,022.7	$	28,489.6
30-59 days past due		40.1		55.8		31.4		15.0		6.4		2.7		18.4		169.8
60-89 days past due		11.8		19.5		10.8		4.4		2.0		1.1		4.5		54.1
90+ days past due		.4		.2		.2										.8
Non-performing		24.7		38.4		29.2		13.7		11.2		10.2		7.8		135.2
Construction and forestry
Current		2,373.7		1,526.3		658.1		230.7		57.2		10.5		107.7		4,964.2
30-59 days past due		44.5		40.6		20.7		7.6		1.8		.6		3.1		118.9
60-89 days past due		18.1		11.4		6.0		3.0		.7		.1		1.0		40.3
90+ days past due		.3		1.3				1.4								3.0
Non-performing		19.3		51.2		27.6		15.4		5.5		2.9		.6		122.5
Total Customer Receivables	$	14,297.4	$	8,702.7	$	4,272.7	$	1,810.9	$	667.6	$	181.3	$	4,165.8	$	34,098.4

	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	2,181.1	$	10,156.1	$	5,099.4	$	2,469.2	$	1,175.8	$	539.0	$	2,565.0	$	24,185.6
30-59 days past due		4.4		67.7		39.7		23.8		12.6		5.7		23.5		177.4
60-89 days past due		.2		17.5		13.3		7.6		4.2		2.2		4.7		49.7
90+ days past due				1.5				.1		.1		.1				1.8
Non-performing		.4		27.9		45.0		26.0		22.1		20.0		5.9		147.3
Construction and forestry
Current		625.7		2,131.1		1,050.4		471.3		159.0		39.5		80.8		4,557.8
30-59 days past due		7.4		58.5		32.1		18.0		5.5		1.6		2.6		125.7
60-89 days past due				20.5		15.1		6.5		1.9		.7		1.1		45.8
90+ days past due				1.0		1.8		2.0								4.8
Non-performing		.4		26.4		44.7		30.2		12.1		6.3		1.2		121.3
Total Customer Receivables	$	2,819.6	$	12,508.2	$	6,341.5	$	3,054.7	$	1,393.3	$	615.1	$	2,684.8	$	29,417.2

Wholesale Receivables

Receivables

Credit Quality Analysis

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

	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	114.6	$	283.2	$	45.7	$	20.2	$	3.7	$	1.2	$	7,349.9	$	7,818.5
30+ days past due				.3										9.2		9.5
Non-performing														5.9		5.9
Construction and forestry
Current		5.8		3.8		23.7		1.0		.3		.1		1,875.8		1,910.5
30+ days past due														7.7		7.7
Non-performing
Total wholesale receivables	$	120.4	$	287.3	$	69.4	$	21.2	$	4.0	$	1.3	$	9,248.5	$	9,752.1

	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	381.3	$	62.7	$	25.0	$	3.8	$	.3	$	1.1	$	6,238.1	$	6,712.3
30+ days past due				.1										8.3		8.4
Non-performing														5.5		5.5
Construction and forestry
Current		4.8		28.2		1.4		.4		.1				1,633.8		1,668.7
30+ days past due														9.6		9.6
Non-performing
Total wholesale receivables	$	386.1	$	91.0	$	26.4	$	4.2	$	.4	$	1.1	$	7,895.3	$	8,404.5

	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	101.1	$	237.1	$	54.2	$	11.3	$	6.5	$	2.1	$	4,510.5	$	4,922.8
30+ days past due														12.6		12.6
Non-performing														6.3		6.3
Construction and forestry
Current		3.5		35.7		2.3		2.7		.2				1,324.9		1,369.3
30+ days past due														1.0		1.0
Non-performing
Total wholesale receivables	$	104.6	$	272.8	$	56.5	$	14.0	$	6.7	$	2.1	$	5,855.3	$	6,312.0

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Securitization of Receivables (Tables)

3 Months Ended

Jan. 29, 2023

Securitization of Receivables

Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to 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):

	January 29		October 30		January 30
	2023		2022		2022
Retail notes securitized	$	5,101.4	$	5,951.6	$	3,517.9
Allowance for credit losses		(12.5)		(15.7)		(10.1)
Other assets (primarily restricted cash)		97.2		155.2		100.3
Total restricted securitized assets	$	5,186.1	$	6,091.1	$	3,608.1
Securitization borrowings	$	4,863.9	$	5,710.9	$	3,473.8
Accrued interest on borrowings		5.9		6.1		1.2
Total liabilities related to restricted securitized assets	$	4,869.8	$	5,717.0	$	3,475.0

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Leases (Tables)

3 Months Ended

Jan. 29, 2023

Leases

Schedule of Lease Revenues Earned

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

	Three Months Ended
	January 29		January 30
	2023		2022
Sales-type and direct financing lease revenues	$	18.8	$	13.0
Operating lease revenues		217.1		223.1
Variable lease revenues		5.6		6.2
Total lease revenues	$	241.5	$	242.3

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 and were $.8 million in the first quarter of both 2023 and 2022.

Schedule of Cost of Equipment on Operating Leases by Market

The cost of equipment on operating leases by market was as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Agriculture and turf	$	4,893.6	$	5,017.3	$	4,903.2
Construction and forestry		1,084.9		1,138.0		1,244.3
Total		5,978.5		6,155.3		6,147.5
Accumulated depreciation		(1,285.1)		(1,301.8)		(1,401.9)
Equipment on operating leases - net	$	4,693.4	$	4,853.5	$	4,745.6

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Notes Receivable from and Payable to John Deere (Tables)

3 Months Ended

Jan. 29, 2023

Notes Receivable from and Payable to John Deere

Notes Receivable from John Deere

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Limited Liability Company John Deere Financial					$	196.9
Banco John Deere S.A.	$	494.4	$	370.0		174.8
John Deere Agricultural Holdings, Inc.				.7
Total Notes Receivable from John Deere	$	494.4	$	370.7	$	371.7

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Long-Term External Borrowings (Tables)

3 Months Ended

Jan. 29, 2023

Long-Term External Borrowings

Long-Term Borrowings

Long-term external borrowings of the Company at January 29, 2023, October 30, 2022, and January 30, 2022 consisted of the following (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Senior Debt:
Medium-term notes	$	23,564.2	$	22,595.4	$	20,614.7
Other notes		.5		2.5		8.4
Total senior debt		23,564.7		22,597.9		20,623.1
Unamortized debt discount and debt issuance costs		(71.3)		(70.1)		(56.6)
Total	$	23,493.4	$	22,527.8	$	20,566.5

Medium-term notes are primarily offered by prospectus and issued at fixed and variable rates. The medium-term notes in the table above include unamortized fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $24,265.7 million, $23,564.6 million, and $20,541.0 million at January 29, 2023, October 30, 2022, and January 30, 2022, respectively, and have serial maturity dates through 2032.

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Fair Value Measurements (Tables)

3 Months Ended

Jan. 29, 2023

Fair Value Measurements

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	January 29, 2023				October 30, 2022				January 30, 2022
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	37,444.9	$	36,668.3	$	36,438.6	$	35,562.4	$	32,100.0	$	32,055.4
Retail notes securitized – net		5,088.9		4,868.9		5,935.9		5,696.3		3,507.8		3,521.4
Securitization borrowings		4,863.9		4,784.8		5,710.9		5,576.6		3,473.8		3,459.3
Current maturities of long- term external borrowings		6,080.1		5,957.2		5,989.6		5,887.7		6,104.0		6,110.6
Long-term external borrowings		23,493.4		23,126.2		22,527.8		21,792.7		20,566.5		20,629.5

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Marketable securities
International debt securities	$	1.8	$	1.1	$	1.8
Receivables from John Deere
Derivatives		171.2		214.8		156.8
Other assets
Derivatives		1.2		1.3		27.3
Total assets	$	174.2	$	217.2	$	185.9
Other payables to John Deere
Derivatives	$	664.2	$	1,024.2	$	186.3
Accounts payable and accrued expenses
Derivatives		29.1		14.1		1.4
Total liabilities	$	693.3	$	1,038.3	$	187.7

All fair value measurements in the table above were Level 2. Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds.

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Derivative Instruments (Tables)

3 Months Ended

Jan. 29, 2023

Derivative Instruments

Amounts Recorded in the Consolidated Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships

The amounts recorded in the consolidated balance sheets 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
	Carrying		Cumulative		Carrying Amount		Cumulative
	Amount of		Fair Value		of Formerly		Fair Value
January 29, 2023	Hedged Item		Hedging Adjustment		Hedged Item		Hedging Adjustment
Current maturities of long-term external borrowings					$	1,914.8	$	15.3
Long-term external borrowings	$	9,461.7	$	(618.6)		5,505.8		(82.9)
October 30, 2022
Current maturities of long-term external borrowings					$	2,514.9	$	15.5
Long-term external borrowings	$	8,453.6	$	(950.1)		5,519.6		(19.1)
January 30, 2022
Current maturities of long-term external borrowings	$	177.4	$	1.7	$	2,356.9	$	8.1
Long-term external borrowings		7,283.2		(107.6)		5,447.0		181.3

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheets were as follows (in millions of dollars):

	January 29		October 30		January 30
	2023		2022		2022
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	90.0	$	87.5	$	102.7
Not designated as hedging instruments:
Interest rate contracts		80.9		124.5		30.6
Cross-currency interest rate contracts		.3		2.8		23.5
Total not designated		81.2		127.3		54.1
Other Assets
Not designated as hedging instruments:
Foreign currency exchange contracts		1.2		1.3		27.3
Total derivative assets	$	172.4	$	216.1	$	184.1
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	629.0	$	947.9	$	164.1
Not designated as hedging instruments:
Interest rate contracts		28.7		74.2		21.9
Cross-currency interest rate contracts		6.5		2.1		.3
Total not designated		35.2		76.3		22.2
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign currency exchange contracts		29.1		14.1		1.4
Total derivative liabilities	$	693.3	$	1,038.3	$	187.7

Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income

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
	January 29		January 30
	2023		2022
Fair Value Hedges
Interest rate contracts - Interest expense	$	235.3	$	(139.5)
Cash Flow Hedges
Recognized in OCI:
Interest rate contracts - OCI (pretax)	$	(1.9)	$	15.4
Reclassified from OCI:
Interest rate contracts - Interest expense		16.3		(1.1)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(1.9)	$	(3.3)
Foreign currency exchange contracts - Administrative and operating expenses *		(135.1)		67.8
Total not designated	$	(137.0)	$	64.5

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

Impact on Derivative Assets and Liabilities for External Derivatives and those with John Deere Related to Netting Arrangements and Collateral

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

January 29, 2023
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.2				$	1.2
John Deere		171.2	$	(129.1)			42.1
Liabilities
External		29.1					29.1
John Deere		664.2		(129.1)			535.1

October 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	1.3	$	(1.1)		$	.2
John Deere		214.8		(128.3)			86.5
Liabilities
External		14.1		(1.1)			13.0
John Deere		1,024.2		(128.3)			895.9

January 30, 2022
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	27.3	$	(1.4)		$	25.9
John Deere		156.8		(130.9)			25.9
Liabilities
External		1.4		(1.4)
John Deere		186.3		(130.9)			55.4

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Organization and Consolidation (Details)	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Fiscal Year
Fiscal period duration	91 days	91 days

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Summary of Significant Accounting Policies and New Accounting Standards (Details)	Jan. 29, 2023
ASU 2022-02
New Accounting Standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false

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Other Comprehensive Income Items - After-Tax Components (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
After-tax components of accumulated other comprehensive income (loss)
Total accumulated other comprehensive income (loss)	$ 5,002.8	$ 4,803.4	$ 4,650.4
Accumulated Other Comprehensive Income (Loss)
After-tax components of accumulated other comprehensive income (loss)
Total accumulated other comprehensive income (loss)	(52.4)	(104.7)	(73.0)
Cumulative Translation Adjustment
After-tax components of accumulated other comprehensive income (loss)
Total accumulated other comprehensive income (loss)	(102.8)	(169.0)	(90.9)
Unrealized Gain (Loss) on Derivatives
After-tax components of accumulated other comprehensive income (loss)
Total accumulated other comprehensive income (loss)	52.5	66.8	19.8
Unrealized Gain (Loss) on Debt Securities
After-tax components of accumulated other comprehensive income (loss)
Total accumulated other comprehensive income (loss)	$ (2.1)	$ (2.5)	$ (1.9)

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Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Other comprehensive income (loss), before tax
Interest expense	$ (301.0)	$ (99.5)
Administrative and operating expenses	(108.5)	(96.4)
Total other comprehensive income (loss), before tax	48.7	(20.2)
Other comprehensive income (loss), tax (expense) credit
Total other comprehensive income (loss), tax (expense) credit	3.6	(3.4)
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	52.3	(23.6)
Cumulative Translation Adjustment
Other comprehensive income (loss), before tax
Total other comprehensive income (loss), before tax	66.2	(36.4)
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	66.2	(36.4)
Unrealized Gain (Loss) on Derivatives
Other comprehensive income (loss), before tax
Other comprehensive income (loss) before reclassification, before tax	(1.9)	15.4
Total other comprehensive income (loss), before tax	(18.2)	16.5
Other comprehensive income (loss), tax (expense) credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	0.4	(3.3)
Total other comprehensive income (loss), tax (expense) credit	3.9	(3.5)
Other comprehensive income (loss), after tax
Other comprehensive income (loss) before reclassification, after tax	(1.5)	12.1
Other comprehensive income (loss), net of income taxes	(14.3)	13.0
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts (Swaps) | Reclassifications of gains (losses) out of accumulated other comprehensive income
Other comprehensive income (loss), before tax
Interest expense	(16.3)	1.1
Other comprehensive income (loss), tax (expense) credit
Reclassification of realized (gain) loss, tax expense (credit)	3.5	(0.2)
Other comprehensive income (loss), after tax
Reclassification of realized (gain) loss, after tax	(12.8)	0.9
Unrealized Gain (Loss) on Debt Securities
Other comprehensive income (loss), before tax
Total other comprehensive income (loss), before tax	0.7	(0.3)
Other comprehensive income (loss), tax (expense) credit
Total other comprehensive income (loss), tax (expense) credit	(0.3)	0.1
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	$ 0.4	$ (0.2)

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Receivables - Financing Receivables Past Due (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Receivable, Past Due
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false]	false
Minimum number of days for a receivable to be considered past due	30 days
Non-performing
Receivable, Past Due
Accrued finance income and lease revenue reversed on non-performing Receivables	$ 2.8	$ 3.8
Finance income and lease revenue recognized from cash payments on non-performing receivables	$ 3.1	$ 3.1
Customer Receivables
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	90 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	120 days
Wholesale Receivables
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	60 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	60 days

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Receivables - Customer Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Allowance for Credit Losses and Credit Quality of Receivables
Total Receivables	$ 42,655.5	$ 42,502.9	$ 35,729.2
Customer Receivables
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	3,017.0	14,297.4	2,819.6
2022 and 2021, respectively	13,064.0	8,702.7	12,508.2
2021 and 2020, respectively	7,832.2	4,272.7	6,341.5
2020 and 2019, respectively	3,827.3	1,810.9	3,054.7
2019 and 2018, respectively	1,535.7	667.6	1,393.3
Prior years	793.2	181.3	615.1
Revolving	2,834.0	4,165.8	2,684.8
Total Receivables	32,903.4	34,098.4	29,417.2
Customer Receivables | Agriculture and turf | 30-59 Days Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	1.7	40.1	4.4
2022 and 2021, respectively	29.4	55.8	67.7
2021 and 2020, respectively	29.2	31.4	39.7
2020 and 2019, respectively	48.2	15.0	23.8
2019 and 2018, respectively	10.4	6.4	12.6
Prior years	42.8	2.7	5.7
Revolving	27.2	18.4	23.5
Total Receivables	188.9	169.8	177.4
Customer Receivables | Agriculture and turf | 60-89 Days Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	1.3	11.8	0.2
2022 and 2021, respectively	12.2	19.5	17.5
2021 and 2020, respectively	10.5	10.8	13.3
2020 and 2019, respectively	18.0	4.4	7.6
2019 and 2018, respectively	3.7	2.0	4.2
Prior years	14.1	1.1	2.2
Revolving	5.9	4.5	4.7
Total Receivables	65.7	54.1	49.7
Customer Receivables | Agriculture and turf | 90 Days or Greater Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively		0.4
2022 and 2021, respectively	1.2	0.2	1.5
2021 and 2020, respectively	0.2	0.2
2020 and 2019, respectively	2.9		0.1
2019 and 2018, respectively	1.0		0.1
Prior years	0.2		0.1
Total Receivables	5.5	0.8	1.8
Customer Receivables | Agriculture and turf | Current
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	2,458.1	11,764.5	2,181.1
2022 and 2021, respectively	10,776.6	6,958.0	10,156.1
2021 and 2020, respectively	6,318.7	3,488.7	5,099.4
2020 and 2019, respectively	3,112.2	1,519.7	2,469.2
2019 and 2018, respectively	1,292.6	582.8	1,175.8
Prior years	566.4	153.2	539.0
Revolving	2,686.3	4,022.7	2,565.0
Total Receivables	27,210.9	28,489.6	24,185.6
Customer Receivables | Agriculture and turf | Non-performing
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	0.3	24.7	0.4
2022 and 2021, respectively	35.1	38.4	27.9
2021 and 2020, respectively	43.3	29.2	45.0
2020 and 2019, respectively	29.1	13.7	26.0
2019 and 2018, respectively	15.0	11.2	22.1
Prior years	19.6	10.2	20.0
Revolving	7.8	7.8	5.9
Total Receivables	150.2	135.2	147.3
Customer Receivables | Construction and forestry | 30-59 Days Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	1.5	44.5	7.4
2022 and 2021, respectively	9.9	40.6	58.5
2021 and 2020, respectively	23.6	20.7	32.1
2020 and 2019, respectively	34.3	7.6	18.0
2019 and 2018, respectively	15.7	1.8	5.5
Prior years	52.1	0.6	1.6
Revolving	4.6	3.1	2.6
Total Receivables	141.7	118.9	125.7
Customer Receivables | Construction and forestry | 60-89 Days Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	0.4	18.1
2022 and 2021, respectively	4.3	11.4	20.5
2021 and 2020, respectively	15.7	6.0	15.1
2020 and 2019, respectively	17.7	3.0	6.5
2019 and 2018, respectively	6.4	0.7	1.9
Prior years	23.0	0.1	0.7
Revolving	2.0	1.0	1.1
Total Receivables	69.5	40.3	45.8
Customer Receivables | Construction and forestry | 90 Days or Greater Past Due
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively		0.3
2022 and 2021, respectively	0.1	1.3	1.0
2021 and 2020, respectively	0.2		1.8
2020 and 2019, respectively	0.4	1.4	2.0
2019 and 2018, respectively	0.2
Total Receivables	0.9	3.0	4.8
Customer Receivables | Construction and forestry | Current
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	553.7	2,373.7	625.7
2022 and 2021, respectively	2,156.3	1,526.3	2,131.1
2021 and 2020, respectively	1,339.0	658.1	1,050.4
2020 and 2019, respectively	538.4	230.7	471.3
2019 and 2018, respectively	177.7	57.2	159.0
Prior years	68.5	10.5	39.5
Revolving	99.0	107.7	80.8
Total Receivables	4,932.6	4,964.2	4,557.8
Customer Receivables | Construction and forestry | Non-performing
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively		19.3	0.4
2022 and 2021, respectively	38.9	51.2	26.4
2021 and 2020, respectively	51.8	27.6	44.7
2020 and 2019, respectively	26.1	15.4	30.2
2019 and 2018, respectively	13.0	5.5	12.1
Prior years	6.5	2.9	6.3
Revolving	1.2	0.6	1.2
Total Receivables	$ 137.5	$ 122.5	$ 121.3

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Receivables - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Allowance for Credit Losses and Credit Quality of Receivables
Total Receivables	$ 42,655.5	$ 42,502.9	$ 35,729.2
Wholesale Receivables
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	120.4	386.1	104.6
2022 and 2021, respectively	287.3	91.0	272.8
2021 and 2020, respectively	69.4	26.4	56.5
2020 and 2019, respectively	21.2	4.2	14.0
2019 and 2018, respectively	4.0	0.4	6.7
Prior years	1.3	1.1	2.1
Revolving	9,248.5	7,895.3	5,855.3
Total Receivables	9,752.1	8,404.5	6,312.0
Wholesale Receivables | Agriculture and turf | 30+ days past due
Allowance for Credit Losses and Credit Quality of Receivables
2022 and 2021, respectively	0.3	0.1
Revolving	9.2	8.3	12.6
Total Receivables	9.5	8.4	12.6
Wholesale Receivables | Agriculture and turf | Current
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	114.6	381.3	101.1
2022 and 2021, respectively	283.2	62.7	237.1
2021 and 2020, respectively	45.7	25.0	54.2
2020 and 2019, respectively	20.2	3.8	11.3
2019 and 2018, respectively	3.7	0.3	6.5
Prior years	1.2	1.1	2.1
Revolving	7,349.9	6,238.1	4,510.5
Total Receivables	7,818.5	6,712.3	4,922.8
Wholesale Receivables | Agriculture and turf | Non-performing
Allowance for Credit Losses and Credit Quality of Receivables
Revolving	5.9	5.5	6.3
Total Receivables	5.9	5.5	6.3
Wholesale Receivables | Construction and forestry | 30+ days past due
Allowance for Credit Losses and Credit Quality of Receivables
Revolving	7.7	9.6	1.0
Total Receivables	7.7	9.6	1.0
Wholesale Receivables | Construction and forestry | Current
Allowance for Credit Losses and Credit Quality of Receivables
2023 and 2022, respectively	5.8	4.8	3.5
2022 and 2021, respectively	3.8	28.2	35.7
2021 and 2020, respectively	23.7	1.4	2.3
2020 and 2019, respectively	1.0	0.4	2.7
2019 and 2018, respectively	0.3	0.1	0.2
Prior years	0.1
Revolving	1,875.8	1,633.8	1,324.9
Total Receivables	$ 1,910.5	$ 1,668.7	$ 1,369.3

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Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022	Oct. 30, 2022
Receivable, Allowance for Credit Losses
Recoveries from freestanding credit enhancements	$ 2.0	$ 1.1
Allowance:
Beginning of period balance	128.4	129.0
Provision (credit) for credit losses	2.6	(1.4)
Write-offs	(17.8)	(16.5)
Recoveries	8.3	10.7
Translation adjustments	0.2	(0.4)
End of period year balance	121.7	121.4
Receivables:
End of period balance	42,655.5	35,729.2	$ 42,502.9
Increase (decrease) in allowance for credit losses	(6.7)
Unfunded Commitments
Allowance:
Provision (credit) for credit losses	0.9	0.2
Customer Receivables
Receivables:
End of period balance	32,903.4	29,417.2	34,098.4
Retail Notes and Financing Leases
Allowance:
Beginning of period balance	95.4	96.5
Provision (credit) for credit losses	6.8	7.9
Write-offs	(10.2)	(12.5)
Recoveries	2.4	2.9
Translation adjustments	0.4	(0.1)
End of period year balance	94.8	94.7
Receivables:
End of period balance	30,069.4	26,732.4
Revolving charge accounts
Allowance:
Beginning of period balance	21.9	20.8
Provision (credit) for credit losses	(3.7)	(9.4)
Write-offs	(7.5)	(4.0)
Recoveries	5.3	7.8
End of period year balance	16.0	15.2
Receivables:
End of period balance	2,834.0	2,684.8	4,165.8
Wholesale Receivables
Allowance:
Beginning of period balance	11.1	11.7
Provision (credit) for credit losses	(0.5)	0.1
Write-offs	(0.1)
Recoveries	0.6
Translation adjustments	(0.2)	(0.3)
End of period year balance	10.9	11.5
Receivables:
End of period balance	$ 9,752.1	$ 6,312.0	$ 8,404.5

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Receivables - Troubled Debt Restructurings (Details) $ in Millions	3 Months Ended
	Jan. 29, 2023 USD ($) item	Jan. 30, 2022 USD ($) item
Receivables Related to Troubled Debt Restructurings
Number of receivable contracts | item	36	87
Pre-modification balance	$ 1.0	$ 3.1
Post-modification balance	1.0	2.2
Receivable contracts in troubled debt restructuring, subsequently defaulted	0.0	$ 0.0
Commitments to lend additional funds to customers whose accounts were modified in troubled debt restructurings	$ 0.0

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Securitization of Receivables (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Securitization of Receivables
Total receivables	$ 42,655.5	$ 42,502.9	$ 35,729.2
Other assets	298.4	314.3	334.4
Securitization borrowings	4,863.9	5,710.9	3,473.8
Accrued interest on borrowings - securitization transactions	5.9	6.1	1.2
Total liabilities related to restricted securitized assets	4,869.8	5,717.0	3,475.0
Securitized
Securitization of Receivables
Other assets	97.2	155.2	100.3
Total Assets	5,186.1	6,091.1	3,608.1
Retail notes | Securitized
Securitization of Receivables
Total receivables	$ 5,101.4	$ 5,951.6	$ 3,517.9
Location of liability for pledged asset	Securitization borrowings	Securitization borrowings	Securitization borrowings
Allowance for credit losses	$ (12.5)	$ (15.7)	$ (10.1)

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Leases - Lease Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Lessor
Sales-type and direct finance lease revenues	$ 18.8	$ 13.0
Operating lease revenues	217.1	223.1
Variable lease revenues	5.6	6.2
Total lease revenues	241.5	242.3
Excess use and damage fees	$ 0.8	$ 0.8

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Leases - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 5,978.5	$ 6,155.3	$ 6,147.5
Accumulated depreciation	(1,285.1)	(1,301.8)	(1,401.9)
Equipment on operating leases - net	4,693.4	4,853.5	4,745.6
Operating lease residual value	3,257.1	3,366.7	3,409.5
Operating lease residual value guarantees	467.1	440.7	319.9
Matured operating lease inventory	11.8	10.8	18.8
Agriculture and turf equipment
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	4,893.6	5,017.3	4,903.2
Construction and forestry
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 1,084.9	$ 1,138.0	$ 1,244.3

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Notes Receivable from and Payable to John Deere (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022	Oct. 30, 2022
Notes Receivable from and Payable to John Deere
Notes payable to John Deere	$ 4,416.2	$ 5,306.4	$ 5,225.5
John Deere
Notes Receivable from and Payable to John Deere
Maximum remaining term for related party notes receivable	7 years
Interest earned	$ 6.9	5.4
Notes receivable from John Deere	494.4	371.7	370.7
Notes payable to John Deere	4,416.2	5,306.4	5,225.5
Long-term intercompany loans	544.6
Interest expense	40.0	16.4
Limited Liability Company John Deere Financial
Notes Receivable from and Payable to John Deere
Notes receivable from John Deere		196.9
Banco John Deere S.A.
Notes Receivable from and Payable to John Deere
Notes receivable from John Deere	$ 494.4	$ 174.8	370.0
John Deere Agricultural Holdings, Inc.
Notes Receivable from and Payable to John Deere
Notes receivable from John Deere			$ 0.7

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Long-Term External Borrowings (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Long-Term Borrowings
Total senior debt	$ 23,564.7	$ 22,597.9	$ 20,623.1
Unamortized debt discount and debt issuance costs	(71.3)	(70.1)	(56.6)
Total	23,493.4	22,527.8	20,566.5
Medium-term notes
Long-Term Borrowings
Total senior debt	23,564.2	22,595.4	20,614.7
Principal amount	24,265.7	23,564.6	20,541.0
Other notes
Long-Term Borrowings
Total senior debt	$ 0.5	$ 2.5	$ 8.4

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Commitments and Contingencies - Guarantees (Details) $ in Millions	3 Months Ended
	Jan. 29, 2023 USD ($)
John Deere Financial Inc. | Guarantees of debt and derivatives | Medium-term notes.
Guarantee Obligations
Guarantee obligations maximum exposure	$ 2,101.8
Weighted average interest rate (as a percent)	2.00%
Maximum remaining maturity	6 years
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments
Guarantee Obligations
Guarantee obligations maximum exposure	$ 118.7
Notional amount	2,702.3
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary
Guarantee Obligations
Carrying value of assets or liabilities related to JDCFI	0.0
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives
Guarantee Obligations
Guarantee obligations maximum exposure	$ 150.1
Weighted average interest rate (as a percent)	3.00%
Maximum remaining maturity	1 year

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Commitments and Contingencies - Commitments (Details) $ in Millions	Jan. 29, 2023 USD ($)
Unfunded Commitments
Commitments
Reserve for credit losses on unfunded commitments	$ 2.9
Customer Receivables
Commitments
Unused commitments	$ 33,300.0
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts	95.00%
Wholesale Receivables
Commitments
Unused commitments	$ 7,700.0

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Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Fair Values of Financial Instruments
Receivables financed - net	$ 42,533.8	$ 42,374.5	$ 35,607.8
Securitization borrowings	4,863.9	5,710.9	3,473.8
Current maturities of long-term external borrowings	6,080.1	5,989.6	6,104.0
Long-term external borrowings	23,493.4	22,527.8	20,566.5
Level 3 | Unrestricted
Fair Values of Financial Instruments
Receivables financed - net	36,668.3	35,562.4	32,055.4
Level 3 | Securitized
Fair Values of Financial Instruments
Receivables financed - net	$ 4,868.9	$ 5,696.3	$ 3,521.4
Location of liability for pledged asset	Securitization borrowings	Securitization borrowings	Securitization borrowings
Level 2
Fair Values of Financial Instruments
Securitization borrowings	$ 4,784.8	$ 5,576.6	$ 3,459.3
Current maturities of long-term external borrowings	5,957.2	5,887.7	6,110.6
Long-term external borrowings	23,126.2	21,792.7	20,629.5
Carrying Value
Fair Values of Financial Instruments
Securitization borrowings	4,863.9	5,710.9	3,473.8
Current maturities of long-term external borrowings	6,080.1	5,989.6	6,104.0
Long-term external borrowings	23,493.4	22,527.8	20,566.5
Carrying Value | Unrestricted
Fair Values of Financial Instruments
Receivables financed - net	37,444.9	36,438.6	32,100.0
Carrying Value | Securitized
Fair Values of Financial Instruments
Receivables financed - net	$ 5,088.9	$ 5,935.9	$ 3,507.8
Location of liability for pledged asset	Securitization borrowings	Securitization borrowings	Securitization borrowings

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Fair Value Measurements - Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Marketable securities	$ 1.8	$ 1.1	$ 1.8
Derivative assets	172.4	216.1	184.1
Derivative liabilities	693.3	1,038.3	187.7
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Total assets	174.2	217.2	185.9
Total liabilities	693.3	1,038.3	187.7
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Receivables from John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative assets	171.2	214.8	156.8
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other Assets
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative assets	1.2	1.3	27.3
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other payables to John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative liabilities	664.2	1,024.2	186.3
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Accounts payable and accrued expenses
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative liabilities	29.1	14.1	1.4
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | Marketable Securities
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Marketable securities	$ 1.8	$ 1.1	$ 1.8

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Fair Value Measurements - Contractual Maturities of Debt Securities (Details) $ in Millions	Jan. 29, 2023 USD ($)
Contractual Maturities of Debt Securities, Amortized Cost
Amortized cost basis	$ 5.0
Contractual Maturities of Debt Securities, Fair Value
Fair value	$ 1.8

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Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Cash Flow Hedges
Cash flow hedge gain (loss) recorded in OCI to be reclassified within twelve months	$ 41.0
Gains or losses reclassified from OCI to earnings	0.0
Interest Rate Contracts (Swaps) | Cash flow hedges | Designated as Hedging Instruments
Cash Flow Hedges
Notional amounts	$ 1,950.0	$ 1,950.0	$ 2,700.0

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Derivative Instruments - Fair Value Hedges (Details) - Interest Rate Contracts (Swaps) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Fair Value Hedges | Designated as Hedging Instruments
Fair Value Hedges
Notional amounts	$ 10,126.7	$ 9,448.9	$ 7,600.8
Current Maturities of Long-term External Borrowings
Active Hedging Relationships
Carrying Amount of Hedged Item			177.4
Cumulative Fair Value Hedging Adjustment			1.7
Discontinued Hedging Relationships
Carrying Amount of Formerly Hedged Item	1,914.8	2,514.9	2,356.9
Cumulative Fair Value Hedging Adjustment - Discontinued	15.3	15.5	8.1
Long-term External Borrowings
Active Hedging Relationships
Carrying Amount of Hedged Item	9,461.7	8,453.6	7,283.2
Cumulative Fair Value Hedging Adjustment	(618.6)	(950.1)	(107.6)
Discontinued Hedging Relationships
Carrying Amount of Formerly Hedged Item	5,505.8	5,519.6	5,447.0
Cumulative Fair Value Hedging Adjustment - Discontinued	$ (82.9)	$ (19.1)	$ 181.3

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Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Interest Rate Contracts (Swaps)
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 4,847.8	$ 3,931.3	$ 2,798.0
Interest rate caps | Sold
Derivatives Not Designated as Hedging Instruments
Notional amounts	788.8	1,020.3	1,469.4
Interest rate caps | Purchased
Derivatives Not Designated as Hedging Instruments
Notional amounts	788.8	1,020.3	1,469.4
Foreign currency exchange contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	1,297.8	1,069.0	967.9
Cross-currency interest rate contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 119.3	$ 134.2	$ 302.9

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Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Fair Value of Derivative Instruments
Total derivative assets	$ 172.4	$ 216.1	$ 184.1
Total derivative liabilities	693.3	1,038.3	187.7
Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	90.0	87.5	102.7
Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	629.0	947.9	164.1
Not Designated as Hedging Instruments | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	81.2	127.3	54.1
Not Designated as Hedging Instruments | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	35.2	76.3	22.2
Not Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	80.9	124.5	30.6
Not Designated as Hedging Instruments | Interest Rate Contracts (Swaps) | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	28.7	74.2	21.9
Not Designated as Hedging Instruments | Foreign currency exchange contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	1.2	1.3	27.3
Not Designated as Hedging Instruments | Foreign currency exchange contracts | Accounts payable and accrued expenses
Fair Value of Derivative Instruments
Total derivative liabilities	29.1	14.1	1.4
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	0.3	2.8	23.5
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	$ 6.5	$ 2.1	$ 0.3

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Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 29, 2023	Jan. 30, 2022
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ (137.0)	$ 64.5
John Deere
Classification and gains (losses) including accrued interest expense related to derivative instruments
Gain (loss) on derivative transactions with affiliate party	$ 242.5	$ (122.6)
Location of gain (loss) on derivative transactions with affiliate party	Interest expense, Administrative and operating expenses	Interest expense, Administrative and operating expenses
Interest Rate Contracts (Swaps)
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, recognized in OCI	$ (1.9)	$ 15.4
Interest Rate Contracts (Swaps) | Interest expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Fair value hedges, gains (losses)	235.3	(139.5)
Cash flow hedges, reclassified from OCI	16.3	(1.1)
Not designated as hedges, gains (losses)	(1.9)	(3.3)
Foreign currency exchange contracts | Administrative and operating expenses
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ (135.1)	$ 67.8

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Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Derivative assets
Gross Amounts Recognized	$ 172.4	$ 216.1	$ 184.1
Derivative liabilities
Gross Amounts Recognized	693.3	1,038.3	187.7
John Deere
Derivative assets
Gross Amounts Recognized	171.2	214.8	156.8
Netting Arrangements	(129.1)	(128.3)	(130.9)
Net Amount	42.1	86.5	25.9
Derivative liabilities
Gross Amounts Recognized	664.2	1,024.2	186.3
Netting Arrangements	(129.1)	(128.3)	(130.9)
Net Amount	535.1	895.9	55.4
External
Derivative assets
Gross Amounts Recognized	1.2	1.3	27.3
Netting Arrangements		(1.1)	(1.4)
Net Amount	1.2	0.2	25.9
Derivative liabilities
Gross Amounts Recognized	29.1	14.1	1.4
Netting Arrangements		(1.1)	(1.4)
Net Amount	29.1	13.0
Derivative Instruments | John Deere
Counterparty Risk and Collateral
Increase in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement	$ 0.0	$ 0.0	$ 0.0

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Subsequent Events - Investment in JDFS (Details) $ in Millions	Feb. 13, 2023 USD ($)
Subsequent Event | John Deere Financial Services, Inc.
Subsequent Events
Increase in investment	$ 240.0

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Subsequent Events - Securitization Borrowings (Details) - USD ($) $ in Millions	Mar. 26, 2023	Feb. 26, 2023	Jan. 29, 2023	Oct. 30, 2022	Jan. 30, 2022
Subsequent Events
Securitization borrowings			$ 4,863.9	$ 5,710.9	$ 3,473.8
Subsequent Event | First Transaction
Subsequent Events
Securitization borrowings		$ 306.6
Subsequent Event | Second Transaction
Subsequent Events
Securitization borrowings	$ 982.6