COMMITMENTS AND CONTINGENCIES

6 Months Ended

Apr. 28, 2024

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

(9) COMMITMENTS AND CONTINGENCIES

We provide guarantees related to certain financial instruments issued by John Deere Financial Inc., a John Deere finance subsidiary in Canada. At April 28, 2024, the following notional amounts were guaranteed by us:

● Medium-term notes: $3,368.4

● Commercial paper: $2,320.2

● Derivatives: $4,011.4, with a fair value liability of $101.2

The weighted-average interest rate on the medium-term notes at April 28, 2024 was 3.3 percent with a maximum remaining maturity of five years.

We have commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. We apply the same credit policies and approval process for these commitments to extend credit as we do for our Receivables and Leases, and generally have the right to unconditionally cancel, alter, or amend the terms at any time. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. 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 unused commitments at April 28, 2024 were as follows:

● John Deere dealers: $7,660.8

● Customers: $33,549.5, primarily related to revolving charge accounts

We have a reserve for credit losses of $4.3 on unfunded commitments that are not unconditionally cancellable at April 28, 2024, which is recorded in “Accounts payable and accrued expenses.”

At April 28, 2024, we 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 April 28, 2024.

We are subject to various unresolved legal actions which arise in the normal course of our business, the most prevalent of which relate to retail credit matters. We believe the reasonably possible range of losses for these unresolved legal actions would not have a material effect on our consolidated financial statements.