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 February 2, 2020

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: 1-4121

DEERE  &  COMPANY

(Exact name of registrant as specified in its charter)

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

One John Deere Place

Moline, Illinois 61265

(Address of principal executive offices)

Telephone Number: (309) 765-8000

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

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $1 par value	DE	New York Stock Exchange
8½% Debentures Due 2022	DE22	New York Stock Exchange
6.55% Debentures Due 2028	DE28	New York Stock Exchange

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

Yes ☒ No ☐

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

Yes ☒ No ☐

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

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 2, 2020, 313,619,999 shares of common stock, $1 par value, of the registrant were outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars and shares except per share amounts) Unaudited
	2020		2019
Net Sales and Revenues
Net sales	$	6,530	$	6,941
Finance and interest income		896		815
Other income		205		228
Total		7,631		7,984
Costs and Expenses
Cost of sales		5,077		5,432
Research and development expenses		425		407
Selling, administrative and general expenses		809		764
Interest expense		336		353
Other operating expenses		415		351
Total		7,062		7,307
Income of Consolidated Group before Income Taxes		569		677
Provision for income taxes		50		184
Income of Consolidated Group		519		493
Equity in income (loss) of unconsolidated affiliates		(1)		7
Net Income		518		500
Less: Net income attributable to noncontrolling interests		1		2
Net Income Attributable to Deere & Company	$	517	$	498
Per Share Data
Basic	$	1.65	$	1.56
Diluted	$	1.63	$	1.54
Average Shares Outstanding
Basic		313.5		318.5
Diluted		317.2		322.7

See Condensed Notes to Interim Consolidated Financial Statements.

2

DEERE & COMPANY
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited
	2020		2019
Net Income	$	518	$	500
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment		230		20
Cumulative translation adjustment		43		(162)
Unrealized loss on derivatives				(9)
Unrealized gain on debt securities		5		8
Other Comprehensive Income (Loss), Net of Income Taxes		278		(143)
Comprehensive Income of Consolidated Group		796		357
Less: Comprehensive income attributable to noncontrolling interests		1		2
Comprehensive Income Attributable to Deere & Company	$	795	$	355

See Condensed Notes to Interim Consolidated Financial Statements.

3

DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited
	February 2		November 3		January 27
	2020		2019		2019
Assets
Cash and cash equivalents	$	3,602	$	3,857	$	3,626
Marketable securities		609		581		523
Receivables from unconsolidated affiliates		38		46		36
Trade accounts and notes receivable – net		5,360		5,230		5,497
Financing receivables – net		27,294		29,195		25,150
Financing receivables securitized – net		4,478		4,383		4,563
Other receivables		1,367		1,487		1,651
Equipment on operating leases – net		7,504		7,567		6,904
Inventories		6,482		5,975		7,402
Property and equipment – net		5,900		5,973		5,785
Investments in unconsolidated affiliates		217		215		212
Goodwill		2,945		2,917		3,048
Other intangible assets – net		1,349		1,380		1,507
Retirement benefits		900		840		1,348
Deferred income taxes		1,414		1,466		834
Other assets		2,362		1,899		1,832
Total Assets	$	71,821	$	73,011	$	69,918
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	10,008	$	10,784	$	10,738
Short-term securitization borrowings		4,416		4,321		4,464
Payables to unconsolidated affiliates		147		142		144
Accounts payable and accrued expenses		8,630		9,656		9,086
Deferred income taxes		491		495		525
Long-term borrowings		30,475		30,229		27,855
Retirement benefits and other liabilities		5,710		5,953		5,759
Total liabilities		59,877		61,580		58,571
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest		14		14		14
Stockholders’ Equity
Common stock, $1 par value (issued shares at February 2, 2020 – 536,431,204)		4,675		4,642		4,512
Common stock in treasury		(17,549)		(17,474)		(16,422)
Retained earnings		30,129		29,852		27,816
Accumulated other comprehensive income (loss)		(5,329)		(5,607)		(4,578)
Total Deere & Company stockholders’ equity		11,926		11,413		11,328
Noncontrolling interests		4		4		5
Total stockholders’ equity		11,930		11,417		11,333
Total Liabilities and Stockholders’ Equity	$	71,821	$	73,011	$	69,918

See Condensed Notes to Interim Consolidated Financial Statements.

4

DEERE & COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited
	2020		2019
Cash Flows from Operating Activities
Net income	$	518	$	500
Adjustments to reconcile net income to net cash used for operating activities:
Provision for credit losses		15		2
Provision for depreciation and amortization		538		503
Share-based compensation expense		19		20
Undistributed earnings of unconsolidated affiliates				(7)
Credit for deferred income taxes		(29)		(56)
Changes in assets and liabilities:
Trade, notes, and financing receivables related to sales		70		(507)
Inventories		(642)		(1,396)
Accounts payable and accrued expenses		(1,134)		(698)
Accrued income taxes payable/receivable		(53)		98
Retirement benefits		36		(4)
Other		154		(106)
Net cash used for operating activities		(508)		(1,651)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)		5,664		5,496
Proceeds from maturities and sales of marketable securities		18		8
Proceeds from sales of equipment on operating leases		426		371
Cost of receivables acquired (excluding receivables related to sales)		(4,303)		(4,213)
Purchases of marketable securities		(34)		(32)
Purchases of property and equipment		(271)		(297)
Cost of equipment on operating leases acquired		(517)		(361)
Other		43		(3)
Net cash provided by investing activities		1,026		969
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		(473)		476
Proceeds from long-term borrowings		1,702		2,211
Payments of long-term borrowings		(1,651)		(1,941)
Proceeds from issuance of common stock		53		51
Repurchases of common stock		(114)		(144)
Dividends paid		(242)		(220)
Other		(38)		(30)
Net cash provided by (used for) financing activities		(763)		403
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		(1)		(13)
Net Decrease in Cash, Cash Equivalents, and Restricted Cash		(246)		(292)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		3,956		4,015
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	3,710	$	3,723

See Condensed Notes to Interim Consolidated Financial Statements.

5

DEERE & COMPANY
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited
			Total Stockholders’ Equity
			Deere & Company Stockholders
									Accumulated
	Total								Other				Redeemable
	Stockholders’		Common		Treasury		Retained		Comprehensive		Noncontrolling		Noncontrolling
	Equity		Stock		Stock		Earnings		Income (Loss)		Interests		Interest
Balance October 28, 2018	$	11,291	$	4,474	$	(16,312)	$	27,553	$	(4,427)	$	3	$	14
ASU No. 2016-01 adoption								8		(8)
Net income		500						498				2
Other comprehensive loss		(143)								(143)
Repurchases of common stock		(144)				(144)
Treasury shares reissued		34				34
Dividends declared		(243)						(243)
Stock options and other		38		38
Balance January 27, 2019	$	11,333	$	4,512	$	(16,422)	$	27,816	$	(4,578)	$	5	$	14
Balance November 3, 2019	$	11,417	$	4,642	$	(17,474)	$	29,852	$	(5,607)	$	4	$	14
Net income		517						517						1
Other comprehensive income		278								278
Repurchases of common stock		(114)				(114)
Treasury shares reissued		39				39
Dividends declared		(239)						(239)						(1)
Stock options and other		32		33				(1)
Balance February 2, 2020	$	11,930	$	4,675	$	(17,549)	$	30,129	$	(5,329)	$	4	$	14

See Condensed Notes to Interim Consolidated Financial Statements.

6

Condensed Notes to Interim Consolidated Financial Statements (Unaudited)

(1)  Organization and Consolidation

The information in the notes and related commentary are presented in a format which includes data grouped as follows:

Equipment Operations – Includes the Company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis.

Financial Services – Includes primarily the Company’s financing operations.

Consolidated – Represents the consolidation of the equipment operations and financial services. References to "Deere & Company" or "the Company" refer to the entire enterprise.

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 year 2020 and 2019 were February 2, 2020 and January 27, 2019, respectively. Both periods contained 13 weeks.

Variable Interest Entities

The Company consolidates certain Variable Interest Entities (VIEs) related to retail note securitizations (see Note 12).

The Company also has an interest in a joint venture that manufactures construction equipment in Brazil for local and overseas markets. The joint venture is a VIE; however, the Company is not the primary beneficiary. Therefore, the entity’s financial results are not fully consolidated in the Company’s consolidated financial statements, but are included on the equity basis. The maximum exposure to loss was $19 million, $22 million, and $27 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

(2)  Summary of Significant Accounting Policies and Cash Flow Information

The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that 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 that 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.

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.

Cash Flow Information

All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities.

The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $112 million and $106 million in the first three months of 2020 and 2019, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $48 million and $33 million at February 2, 2020 and January 27, 2019, respectively.

7

The Company’s restricted cash held at February 2, 2020, November 3, 2019, January 27, 2019, and October 28, 2018 was as follows in millions of dollars:

	February 2		November 3		January 27		October 28
	2020		2019		2019		2018
Equipment operations	$	21	$	21	$	10	$	7
Financial services		87		78		87		104
Total	$	108	$	99	$	97	$	111

The equipment operations’ restricted cash relates to miscellaneous operational activities. The financial services restricted cash primarily relates to securitization of financing receivables (see Note 12). The restricted cash is recorded in “Other assets” in the consolidated balance sheet.

(3)  New Accounting Standards

New Accounting Standards Adopted

In the first quarter of 2020, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes Accounting Standards Codification (ASC) 840, Leases. This ASU was adopted using a modified-retrospective approach. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU did not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU adds new disclosures about the Company’s leasing activities. The Company elected the optional practical expedients to not reassess whether existing contracts contain leases, not reassess lease classification, and not reassess initial direct costs for existing leases. The Company did not elect the hindsight practical expedient. In addition, the Company elected to combine lease and non-lease components for all asset classes and to not recognize a right of use asset or lease liability for arrangements that qualify as short-term leases.

The operating lease liabilities are recorded in “Accounts payable and accrued expenses” and the operating lease right of use assets are recorded in “Other assets.” The finance lease liabilities are recorded in “Short-term borrowings” or “Long-term borrowings” based on the remaining lease term, and the finance lease right of use assets are recorded in “Property and equipment - net.” In addition to the lease liabilities and right of use assets, land use rights were reclassified from “Other intangible assets - net” to “Other assets” and finance lease liabilities were reclassified from “Accounts payable and accrued expenses” to “Short-term borrowings” and “Long-term borrowings.” The effect of adopting the ASU on the consolidated balance sheet follows in millions of dollars:

	November 3, 2019		Cumulative Effect from Adoption		November 4, 2019
Assets
Other intangible assets - net	$	1,380	$	(23)	$	1,357
Other assets		1,899		402		2,301
Liabilities
Short-term borrowings	$	10,784	$	11	$	10,795
Accounts payable and accrued expenses		9,656		348		10,004
Long-term borrowings		30,229		20		30,249

The Company implemented a new system for lessee accounting with new processes and controls at the time of adopting the ASU. The adoption did not have a material effect on the Company’s operating results or cash flows. See Note 15 for additional information.

8

The Company also adopted the following standards in the first quarter of 2020, none of which had a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

2017-08	Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs
2018-07	Improvements to Nonemployee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation
2019-04	Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The adoption was for clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities

New Accounting Standards to be Adopted

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments – Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021. The ASU will be adopted using a modified-retrospective approach. The Company is developing models to estimate expected credit losses, assessing appropriate assumptions, designing new procedures and controls, and evaluating the potential effects on the consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. This ASU requires customers in a hosting arrangement that is a service contract to evaluate the implementation costs of the hosting arrangement using the guidance to develop internal-use software. The project development stage determines the implementation costs that are capitalized or expensed. Capitalized implementation costs are amortized over the term of the service arrangement and are presented in the same income statement line item as the service contract costs. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted. The Company will adopt the ASU on a prospective basis. The Company is evaluating the potential effects on the Company’s consolidated financial statements.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The effective dates for the separate portions of the ASU and the expected effect on the consolidated financial statements are as follows for the portions that have not yet been adopted: (1) clarifications to ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, is the first quarter of fiscal year 2021, which is under evaluation, and (2) clarifications to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities is the first quarter of fiscal year 2021, which will not have a material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes. This ASU simplifies the accounting for income taxes by modifying the treatment of intraperiod tax allocation in certain circumstances, eliminating an exception to recognizing deferred tax liabilities for outside basis differences for foreign equity method investments and foreign subsidiaries when ownership or control changes, and modifying interim period tax calculations when a loss is forecast. In addition, the ASU also provides guidance for the accounting of a franchise tax that is partially based on income, requires that enacted changes in tax laws or rates be included in the annual effective rate determination in the period that includes the enactment date, and clarifies the tax accounting of a step up in tax basis of goodwill. The effective date will be the first quarter of fiscal year 2022, with early adoption permitted. The guidance related to the foreign equity method investments, foreign subsidiaries, and franchise taxes will be adopted using a modified-retrospective approach. The remaining provisions will be adopted prospectively. The adoption is not expected to have a material effect on the Company’s consolidated financial statements.

9

(4)  Revenue Recognition

The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition in millions of dollars follow:

	Three Months Ended February 2, 2020
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,500	$	1,020	$	643	$	4,163
Canada		138		172		156		466
Western Europe		778		339		22		1,139
Central Europe and CIS		220		159		10		389
Latin America		455		159		66		680
Asia, Africa, Australia, New Zealand, and Middle East		504		256		34		794
Total	$	4,595	$	2,105	$	931	$	7,631
Major product lines:
Large Agriculture	$	2,139					$	2,139
Small Agriculture		1,765						1,765
Turf		468						468
Construction			$	841				841
Compact Construction				288				288
Roadbuilding				605				605
Forestry				274				274
Financial Products		27		7	$	931		965
Other		196		90				286
Total	$	4,595	$	2,105	$	931	$	7,631
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,540	$	2,079	$	26	$	6,645
Revenue recognized over time		55		26		905		986
Total	$	4,595	$	2,105	$	931	$	7,631

	Three Months Ended January 27, 2019
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,628	$	1,163	$	575	$	4,366
Canada		172		248		157		577
Western Europe		848		337		20		1,205
Central Europe and CIS		148		171		9		328
Latin America		548		150		64		762
Asia, Africa, Australia, New Zealand, and Middle East		453		263		30		746
Total	$	4,797	$	2,332	$	855	$	7,984
Major product lines:
Large Agriculture	$	2,167					$	2,167
Small Agriculture		1,808						1,808
Turf		506						506
Construction			$	1,009				1,009
Compact Construction				265				265
Roadbuilding				598				598
Forestry				352				352
Financial Products		20		6	$	855		881
Other		296		102				398
Total	$	4,797	$	2,332	$	855	$	7,984
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,755	$	2,313			$	7,068
Revenue recognized over time		42		19	$	855		916
Total	$	4,797	$	2,332	$	855	$	7,984

10

Following is a description of the Company’s major product lines:

Large Agriculture – Includes net sales of tractors with more than approximately 200 horsepower and associated attachments, combines, cotton pickers, cotton strippers, self-propelled forage harvesters and related attachments, and sugarcane harvesters, harvesting front-end equipment, sugarcane loaders and pull behind scrapers, tillage, seeding, and application equipment, including sprayers, nutrient management and soil preparation machinery, and related attachments and service parts.

Small Agriculture – Includes net sales of medium and utility tractors with less than approximately 200 horsepower, hay and forage equipment, balers, mowers, and related attachments and service parts.

Turf – Includes net sales of turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements, other outdoor power products, and related attachments and service parts.

Construction – Includes net sales of a broad range of machines used in construction, earthmoving, and material handling, including backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, and related attachments and service parts.

Compact Construction – Includes net sales of smaller construction equipment, including compact excavators, compact track loaders, compact wheel loaders, skid steers, landscape loaders, and related attachments and service parts.

Roadbuilding – Includes net sales of equipment used in roadbuilding and renovation, including milling machines, recyclers, slipform pavers, surface miners, asphalt pavers, compactors, tandem and static rollers, mobile crushers and screens, mobile and stationary asphalt plants, and related attachments and service parts.

Forestry – Includes net sales of equipment used in timber harvesting, including log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments and service parts.

Financial Products – Includes finance and interest income primarily from retail notes related to sales of John Deere equipment to end customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties.

Other – Includes sales of certain components to other equipment manufacturers, revenue earned over time from precision guidance, telematics, and other information enabled solutions, revenue from service performed at company owned dealerships and service centers, gains on disposition of property and businesses, trademark licensing revenue, and other miscellaneous revenue items.

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for premiums for extended warranties, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 16, was $1,070 million, $1,010 million, and $956 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended February 2, 2020 and January 27, 2019, $181 million and $156 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year.

The Company entered into contracts with customers to deliver equipment and services that have not been recognized at February 2, 2020 because the equipment or services have not been provided. These contracts primarily relate to extended warranty and certain precision guidance and telematic services. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $887 million at February 2, 2020. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2020 - $275, 2021 - $274, 2022 - $182, 2023 - $101, 2024 - $42, and later years - $13. The Company discloses unsatisfied performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and end customers for equipment, service parts, repair services, and certain telematics services.

11

(5)  Other Comprehensive Income Items

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

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance October 28, 2018	$	(3,237)	$	(1,203)	$	15	$	(2)	$	(4,427)
ASU No. 2016-01 adoption								(8)		(8)
Other comprehensive income (loss) items before reclassification		1		(162)		(7)		8		(160)
Amounts reclassified from accumulated other comprehensive income		19				(2)				17
Net current period other comprehensive income (loss)		20		(162)		(9)		8		(143)
Balance January 27, 2019	$	(3,217)	$	(1,365)	$	6	$	(2)	$	(4,578)
Balance November 3, 2019	$	(3,915)	$	(1,651)	$	(60)	$	19	$	(5,607)
Other comprehensive income (loss) items before reclassification		186		43		(1)		5		233
Amounts reclassified from accumulated other comprehensive income		44				1				45
Net current period other comprehensive income (loss)		230		43				5		278
Balance February 2, 2020	$	(3,685)	$	(1,608)	$	(60)	$	24	$	(5,329)

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended February 2, 2020	Amount		Credit		Amount
Cumulative translation adjustment	$	43			$	43
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(2)	$	1		(1)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		2		(1)		1
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		6		(1)		5
Net unrealized gain (loss) on debt securities		6		(1)		5
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		62		(26)		36
Prior service (credit) cost		3		(1)		2
Settlements		3		(1)		2
OPEB
Net actuarial gain (loss)		245		(60)		185
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		7		(2)		5
Prior service (credit) cost		(1)				(1)
Net unrealized gain (loss) on retirement benefits adjustment		320		(90)		230
Total other comprehensive income (loss)	$	369	$	(91)	$	278

(continued)

12

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 27, 2019	Amount		Credit		Amount
Cumulative translation adjustment	$	(162)			$	(162)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(9)	$	2		(7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(2)				(2)
Net unrealized gain (loss) on derivatives		(11)		2		(9)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		10		(2)		8
Net unrealized gain (loss) on debt securities		10		(2)		8
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		35		(8)		27
Prior service (credit) cost		3		(1)		2
OPEB
Reclassification to other operating expense through amortization of: *
Actuarial (gain) loss		5		(1)		4
Prior service (credit) cost		(18)		4		(14)
Net unrealized gain (loss) on retirement benefits adjustment		26		(6)		20
Total other comprehensive income (loss)	$	(137)	$	(6)	$	(143)

* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.

In the first quarter of 2020 and 2019, the noncontrolling interests’ comprehensive income was $1 million and $2 million, respectively, which consisted of net income.

(6)  Dividends Declared and Paid

Dividends declared and paid on a per share basis were as follows:

	Three Months Ended
	February 2		January 27
	2020		2019
Dividends declared	$	.76	$	.76
Dividends paid	$	.76	$	.69

(7)  Earnings Per Share

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

	Three Months Ended
	February 2		January 27
	2020		2019
Net income attributable to Deere & Company	$	517	$	498
Average shares outstanding		313.5		318.5
Basic per share	$	1.65	$	1.56
Average shares outstanding		313.5		318.5
Effect of dilutive share-based compensation		3.7		4.2
Total potential shares outstanding		317.2		322.7
Diluted per share	$	1.63	$	1.54

During the first quarter of 2020 and 2019, .2 million and .6 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive.

13

(8)  Pension and Other Postretirement Benefits

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

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	84	$	66
Interest cost		87		111
Expected return on plan assets		(205)		(200)
Amortization of actuarial loss		62		35
Amortization of prior service cost		3		3
Settlements		3
Net cost	$	34	$	15

The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	12	$	10
Interest cost		37		54
Expected return on plan assets		(12)		(9)
Amortization of actuarial loss		7		5
Amortization of prior service credit		(1)		(18)
Curtailments		21
Net cost	$	64	$	42

The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income.

In the first quarter of 2020, the Company remeasured the U.S. OPEB health care plans. The wage plan was remeasured due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021. The salary plans were remeasured due to the U.S. voluntary employee-separation program (see Note 20), which resulted in a $21 million curtailment loss. The combined effect of the remeasurements was to reduce the benefit obligation by $245 million.

During the first three months of 2020, the Company contributed approximately $24 million to its pension plans and $43 million to its OPEB plans. The Company presently anticipates contributing an additional $68 million to its pension plans and $397 million to its OPEB plans during the remainder of fiscal year 2020. The anticipated OPEB contributions include a voluntary $300 million in the fourth quarter to a U.S. plan, which will increase plan assets. These pension and remaining OPEB contributions primarily include direct benefit payments from Company funds.

(9)  Income Taxes

The lower effective tax rate in the first quarter of 2020 primarily resulted from two discrete items. In January 2020, the Company changed the corporate structure of two foreign holding subsidiaries to be indirect branches of Deere & Company. The change in tax status generated a capital loss that will be carried back in the Company’s U.S. income tax return resulting in a $43 million benefit. In addition, a discrete benefit of $24 million was recognized for the excess tax benefits related to vesting or exercise of share-based compensation awards.

The Company’s unrecognized tax benefits at February 2, 2020 were $557 million, compared to $553 million at November 3, 2019. The liability at February 2, 2020, November 3, 2019, and January 27, 2019 consisted of approximately $105 million, $153 million, and $143 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The changes in the

14

unrecognized tax benefits for the first three months of 2020 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant.

(10)  Segment Reporting

Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended
	February 2		January 27		%
	2020		2019		Change
Net sales and revenues:
Agriculture and turf	$	4,486	$	4,681	-4
Construction and forestry		2,044		2,260	-10
Total net sales		6,530		6,941	-6
Financial services		931		855	+9
Other revenues		170		188	-10
Total net sales and revenues	$	7,631	$	7,984	-4
Operating profit: *
Agriculture and turf	$	373	$	348	+7
Construction and forestry		93		229	-59
Financial services		179		192	-7
Total operating profit		645		769	-16
Reconciling items **		(78)		(87)	-10
Income taxes		(50)		(184)	-73
Net income attributable to Deere & Company	$	517	$	498	+4
Intersegment sales and revenues:
Agriculture and turf net sales	$	7	$	9	-22
Construction and forestry net sales				1
Financial services		67		72	-7
Equipment operations outside the U.S. and Canada:
Net sales	$	2,780	$	2,818	-1
Operating profit		225		176	+28

	February 2		November 3
	2020		2019
Identifiable assets:
Agriculture and turf	$	10,817	$	10,379	+4
Construction and forestry		9,376		9,387
Financial services		47,279		48,483	-2
Corporate		4,349		4,762	-9
Total assets	$	71,821	$	73,011	-2

* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

15

(11)  Financing Receivables

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

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	February 2, 2020
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	150	$	65	$	3	$	218
Construction and forestry		96		36		19		151
Other:
Agriculture and turf		66		21		1		88
Construction and forestry		29		11				40
Total	$	341	$	133	$	23	$	497
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	218	$	283	$	18,514	$	19,015
Construction and forestry		151		131		3,488		3,770
Other:
Agriculture and turf		88		100		7,457		7,645
Construction and forestry		40		28		1,431		1,499
Total	$	497	$	542	$	30,890		31,929
Less allowance for credit losses								157
Total financing receivables – net							$	31,772

16

	November 3, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	138	$	73	$	1	$	212
Construction and forestry		79		29		4		112
Other:
Agriculture and turf		39		19		1		59
Construction and forestry		26		7				33
Total	$	282	$	128	$	6	$	416
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	212	$	268	$	18,931	$	19,411
Construction and forestry		112		127		3,450		3,689
Other:
Agriculture and turf		59		28		8,986		9,073
Construction and forestry		33		26		1,496		1,555
Total	$	416	$	449	$	32,863		33,728
Less allowance for credit losses								150
Total financing receivables – net							$	33,578

	January 27, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	162	$	63	$	1	$	226
Construction and forestry		102		47		1		150
Other:
Agriculture and turf		65		23		1		89
Construction and forestry		16		8				24
Total	$	345	$	141	$	3	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	226	$	296	$	17,408	$	17,930
Construction and forestry		150		107		3,092		3,349
Other:
Agriculture and turf		89		28		7,213		7,330
Construction and forestry		24		10		1,247		1,281
Total	$	489	$	441	$	28,960		29,890
Less allowance for credit losses								177
Total financing receivables – net							$	29,713

17

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

	Three Months Ended February 2, 2020
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	89	$	40	$	21	$	150
Provision (credit)		15		(1)		7		21
Write-offs		(17)		(7)		(1)		(25)
Recoveries		2		8				10
Translation adjustments		(1)				2		1
End of period balance *	$	88	$	40	$	29	$	157
Financing receivables:
End of period balance	$	22,785	$	2,733	$	6,411	$	31,929
Balance individually evaluated **	$	170			$	86	$	256

	Three Months Ended January 27, 2019
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	113	$	43	$	22	$	178
Provision (credit)		6		(1)		2		7
Write-offs		(11)		(4)		(1)		(16)
Recoveries		4		5				9
Translation adjustments		(1)						(1)
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	21,279	$	2,737	$	5,874	$	29,890
Balance individually evaluated **	$	118	$	2	$	13	$	133

* Individual allowances were not significant.

** Remainder is collectively evaluated.

18

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
February 2, 2020*
Receivables with specific allowance ***	$	117	$	116	$	22	$	119
Receivables without a specific allowance **		31		30				32
Total	$	148	$	146	$	22	$	151
Agriculture and turf	$	120	$	120	$	17	$	123
Construction and forestry	$	28	$	26	$	5	$	28
November 3, 2019*
Receivables with specific allowance **	$	40	$	39	$	13	$	40
Receivables without a specific allowance **		32		31				37
Total	$	72	$	70	$	13	$	77
Agriculture and turf	$	49	$	48	$	8	$	52
Construction and forestry	$	23	$	22	$	5	$	25
January 27, 2019*
Receivables with specific allowance **	$	30	$	30	$	12	$	30
Receivables without a specific allowance **		36		34				36
Total	$	66	$	64	$	12	$	66
Agriculture and turf	$	49	$	48	$	9	$	49
Construction and forestry	$	17	$	16	$	3	$	17

*   Finance income recognized was not material.

**  Primarily retail notes.

***   Primarily retail notes and wholesale receivables.

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first three months of 2020, the Company identified 88 receivable contracts, primarily wholesale receivables in Argentina, as troubled debt restructurings with aggregate balances of $85 million pre-modification and $74 million post-modification. During the first three months of 2019, there were 70 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $2 million pre-modification and $2 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At February 2, 2020, the Company had commitments to lend approximately $14 million to borrowers whose accounts were modified in troubled debt restructurings.

19

(12)  Securitization of Financing Receivables

The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did 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.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,490 million, $2,895 million, and $2,137 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,442 million, $2,847 million, and $2,092 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $638 million, $491 million, and $790 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $609 million, $465 million, and $743 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,441 million, $1,079 million, and $1,745 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,370 million, $1,015 million, and $1,632 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

20

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	February 2, 2020
Carrying value of liabilities	$	1,370
Maximum exposure to loss		1,441

The total assets of unconsolidated VIEs related to securitizations were approximately $41 billion.

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Financing receivables securitized (retail notes)	$	4,487	$	4,395	$	4,573
Allowance for credit losses		(9)		(12)		(10)
Other assets		91		82		109
Total restricted securitized assets	$	4,569	$	4,465	$	4,672

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Short-term securitization borrowings	$	4,416	$	4,321	$	4,464
Accrued interest on borrowings		5		6		3
Total liabilities related to restricted securitized assets	$	4,421	$	4,327	$	4,467

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At February 2, 2020, the maximum remaining term of all securitized retail notes was approximately seven years.

(13)  Inventories

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

	February 2		November 3		January 27
	2020		2019		2019
Raw materials and supplies	$	2,311	$	2,285	$	2,506
Work-in-process		818		747		1,026
Finished goods and parts		4,946		4,613		5,693
Total FIFO value		8,075		7,645		9,225
Less adjustment to LIFO value		1,593		1,670		1,823
Inventories	$	6,482	$	5,975	$	7,402

21

(14)  Goodwill and Other Intangible Assets-Net

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

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 28, 2018	$	583	$	2,518	$	3,101
Translation adjustments and other		2		(55)		(53)
Goodwill at January 27, 2019	$	585	$	2,463	$	3,048
Goodwill at November 3, 2019	$	574	$	2,343	$	2,917
Translation adjustments and other		(3)		31		28
Goodwill at February 2, 2020	$	571	$	2,374	$	2,945

There were no accumulated impairment losses in the reported periods.

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

	February 2		November 3		January 27
	2020		2019		2019
Amortized intangible assets:
Customer lists and relationships	$	517	$	511	$	538
Technology, patents, trademarks, and other		1,013		1,028		1,053
Total at cost		1,530		1,539		1,591
Less accumulated amortization *		304		282		207
Total		1,226		1,257		1,384
Unamortized intangible assets:
In-process research and development		123		123		123
Other intangible assets – net	$	1,349	$	1,380	$	1,507

*   Accumulated amortization at February 2, 2020, November 3, 2019, and January 27, 2019 for customer lists and relationships totaled $86 million, $77 million, and $54 million and technology, patents, trademarks, and other totaled $218 million, $205 million, and $153 million, respectively.

The amortization of other intangible assets in the first quarter of 2020 and 2019 was $25 million and $27 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2020 – $77, 2021 – $101, 2022 – $100, 2023 – $98, and 2024 – $96.

(15)  Leases

The Company is both a lessee and a lessor. The Company leases for its own use, under leases with expected use periods generally ranging from less than one year to 20 years, primarily warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The Company’s financial services segment leases to users equipment produced or sold by the Company. These leases are usually written for periods of less than one year to seven years.

The Company determines if an arrangement is or contains a lease at the contract inception.

Lessee

The Company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than 12 months for both operating and finance leases.

The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than 12 months and that do not meet the finance lease criteria are classified as operating leases.

22

Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from one to 10 years. Options that the Company is reasonably certain to exercise are included in the lease term.

The Company has elected to combine lease and non-lease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of 12 months or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense primarily includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement.

The lease expense by type consisted of the following in millions of dollars:

	Three Months Ended
	February 2, 2020
Operating lease expense	$	32
Short-term lease expense		4
Variable lease expense		10
Finance lease depreciation expense		5
Total lease expense	$	51

Operating and finance lease right of use assets and liabilities follow in millions of dollars:

	February 2, 2020
Operating leases
Other assets	$	376
Accounts payable and accrued expenses		361
Finance leases
Property and equipment — net	$	37
Short-term borrowings		12
Long-term borrowings		23
Total finance lease liabilities	$	35

The weighted-average remaining lease term in years and discount rates follows:

	February 2, 2020
Weighted-average remaining lease terms
Operating leases	7
Finance leases	3
Weighted-average discount rate
Operating leases	2.5%
Finance leases	3.2%

Lease payment amounts in each of the next five years at February 2, 2020 follow in millions of dollars:

	Operating		Finance
February 2, 2020	Leases		Leases
Remainder of 2020	$	93	$	12
2021		80		11
2022		69		8
2023		53		3
2024		38		2
2025		19
Later years		33		1
Total lease payments		385		37
Less imputed interest		24		2
Total lease liabilities	$	361	$	35

23

Future minimum lease payments under the previous lease standard for operating and finance leases at November 3, 2019 follow in millions of dollars:

	Operating		Capital
November 3, 2019	Leases		Leases
2020	$	111	$	12
2021		77		10
2022		56		6
2023		39		2
2024		28		1
Later years		26		1
Total minimum lease payments	$	337	$	32

Cash paid for amounts included in the measurement of lease liabilities:

	Three Months Ended
	February 2, 2020
Operating cash flows from operating leases	$	30
Financing cash flows from finance leases		5

Right of use assets obtained in exchange for lease liabilities:

	Three Months Ended
	February 2, 2020
Operating leases	$	16
Finance leases		9

Lessor

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

Leases offered by the Company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the Company for remarketing.

The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment.

The Company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the retail customer. The Company has also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses” on the statement of consolidated income. Variable lease revenues primarily relate to property taxes on leased assets in certain markets and late fees.

24

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

	Three Months Ended
	February 2, 2020
Sales-type and direct finance lease revenues	$	36
Operating lease revenues		374
Variable lease revenues		5
Total lease revenues	$	415

At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method.

Sales-type and direct financing lease receivables by product category were as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	863	$	897
Construction and forestry		1,007		1,033
Total		1,870		1,930
Guaranteed residual values		152		232
Unguaranteed residual values		98		101
Less unearned finance income		209		212
Financing leases receivables	$	1,911	$	2,051

Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at February 2, 2020 follow in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	732
2021		614
2022		380
2023		188
2024		86
2025		18
Later years		4
Total	$	2,022

Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 follow in millions of dollars:

	November 3
	2019
Due in:
2020	$	833
2021		557
2022		321
2023		153
2024		53
Later years		13
Total	$	1,930

Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases.

25

The cost of equipment on operating leases by product category was as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	7,260	$	7,257
Construction and forestry		2,163		2,165
Total		9,423		9,422
Less accumulated depreciation		1,919		1,855
Equipment on operating leases - net	$	7,504	$	7,567

The total operating lease residual values at February 2, 2020 and November 3, 2019 were $5,299 million and $5,259 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $652 million and $647 million at February 2, 2020 and November 3, 2019, respectively.

Lease payments for equipment on operating leases at February 2, 2020 were scheduled as follows in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	948
2021		871
2022		513
2023		248
2024		80
2025		3
Total	$	2,663

Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows in millions of dollars:

	November 3
	2019
Due in:
2020	$	1,086
2021		759
2022		419
2023		193
2024		41
Total	$	2,498

The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at February 2, 2020 and November 3, 2019 were $130 million and $163 million, respectively.

(16)  Commitments and Contingencies

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

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $588 million and $514 million at February 2, 2020 and January 27, 2019, respectively.

26

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

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1,800	$	1,652
Payments		(230)		(228)
Amortization of premiums received		(59)		(54)
Accruals for warranties		222		253
Premiums received		65		65
Foreign exchange		(6)		(1)
End of period balance	$	1,792	$	1,687

At February 2, 2020, the Company had approximately $360 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At February 2, 2020, the Company had accrued losses of approximately $14 million under these agreements. The maximum remaining term of the receivables guaranteed at February 2, 2020 was approximately seven years.

At February 2, 2020, the Company had commitments of approximately $264 million for the construction and acquisition of property and equipment. Also, at February 2, 2020, the Company had restricted assets of $83 million, primarily as collateral for borrowings and restricted other assets. See Note 12 for additional restricted assets associated with borrowings related to securitizations.

The Company also had other miscellaneous contingent liabilities totaling approximately $50 million at February 2, 2020. The accrued liability for these contingencies was not material at February 2, 2020.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark 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.

(17)  Fair Value Measurements

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

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

27

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	February 2, 2020				November 3, 2019				January 27, 2019
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations	$	130	$	123	$	65	$	61	$	102	$	99
Financial services		27,164		27,177		29,130		29,106		25,048		24,900
Total	$	27,294	$	27,300	$	29,195	$	29,167	$	25,150	$	24,999
Financing receivables securitized – net:
Equipment operations	$	42	$	40	$	44	$	43	$	67	$	65
Financial services		4,436		4,464		4,339		4,362		4,496		4,454
Total	$	4,478	$	4,504	$	4,383	$	4,405	$	4,563	$	4,519
Short-term securitization borrowings:
Equipment operations	$	42	$	42	$	44	$	45	$	67	$	67
Financial services		4,374		4,403		4,277		4,302		4,397		4,391
Total	$	4,416	$	4,445	$	4,321	$	4,347	$	4,464	$	4,458
Long-term borrowings due within one year: **
Equipment operations	$	567	$	567	$	642	$	645	$	928	$	937
Financial services		6,638		6,650		6,786		6,788		5,198		5,186
Total	$	7,205	$	7,217	$	7,428	$	7,433	$	6,126	$	6,123
Long-term borrowings: **
Equipment operations	$	5,544	$	6,403	$	5,415	$	6,138	$	4,712	$	4,989
Financial services		24,908		25,299		24,814		25,122		23,143		23,217
Total	$	30,452	$	31,702	$	30,229	$	31,260	$	27,855	$	28,206

* Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** Carrying values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Notes 3 and 15).

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

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

28

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*:

	February 2		November 3		January 27
	2020		2019		2019
Level 1:
Marketable securities
International equity securities ***	$	3
Equity fund ***		62	$	59	$	51
U.S. government debt securities		52		50		44
Total Level 1 marketable securities		117		109		95
Level 2:
Marketable securities
U.S. government debt securities		87		81		76
Municipal debt securities		62		60		51
Corporate debt securities		173		165		141
International debt securities		4		5		9
Mortgage-backed securities**		165		160		145
Total Level 2 marketable securities		491		471		422
Other assets
Derivatives:
Interest rate contracts		443		363		76
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total Level 2 other assets		481		384		138
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		57		65		232
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total Level 2 accounts payable and accrued expenses		101		139		298
Level 3:
Marketable securities
International debt securities		1		1		6

* Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds and time deposits.

**  Primarily issued by U.S. government sponsored enterprises.

***During the first quarter of 2020 and 2019 net unrealized gains on equity securities recorded in “Other income” were $6 million and none, respectively.

The contractual maturities of debt securities at February 2, 2020 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	28	$	24
Due after one through five years		96		99
Due after five through 10 years		96		103
Due after 10 years		143		153
Mortgage-backed securities		159		165
Debt securities	$	522	$	544

29

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1	$	8
Principal payments				(3)
Other				1
End of period balance	$	1	$	6

Fair value, nonrecurring Level 3 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended
	February 2	November 3		January 27	February 2	January 27
	2020	2019		2019	2020	2019
Equipment on operating leases – net		$	855
Other assets		$	142

*  See financing receivables with specific allowances in Note 11. Losses were not significant.

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

Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data.

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

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

Equipment on Operating Leases – Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values.

Other Assets – The impairments are measured at the fair value of the matured operating lease inventory. The valuations were based on a market approach. The inputs include sales of comparable assets.

(18)  Derivative Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate exposure at certain

30

equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. 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 February 2, 2020, November 3, 2019, and January 27, 2019 were $2,900 million, $3,150 million, and $2,800 million, respectively. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of loss recorded in OCI at February 2, 2020 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $9 million after-tax. There were no gains or losses 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 February 2, 2020, November 3, 2019, and January 27, 2019 were $9,424 million, $8,717 million, and $8,622 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow:

			Cumulative Increase (Decrease) of Fair
			Value Hedging Adjustments Included in
			the Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
	Hedged Item		Relationships		Relationships		Total
February 2, 2020
Long-term borrowings due within one year*	$	220	$	(1)	$	(5)	$	(6)
Long-term borrowings		9,521		379		(21)		358
November 3, 2019
Long-term borrowings due within one year*	$	412	$	(1)	$	(4)	$	(5)
Long-term borrowings		8,532		295		(32)		263
January 27, 2019
Long-term borrowings due within one year*	$	192	$	1	$	(4)	$	(3)
Long-term borrowings		8,177		(179)		(41)		(220)

* Presented in short-term borrowings

Derivatives not designated as hedging instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings, purchases or sales of inventory, and below market retail

31

financing programs. The total notional amounts of these interest rate swaps at February 2, 2020, November 3, 2019, and January 27, 2019 were $9,102 million, $9,166 million, and $8,225 million, the foreign exchange contracts were $5,249 million, $4,962 million, and $6,500 million, and the cross-currency interest rate contracts were $102 million, $92 million, and $87 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	February 2		November 3		January 27
Other Assets	2020		2019		2019
Designated as hedging instruments:
Interest rate contracts	$	409	$	332	$	47
Total designated		409		332		47
Not designated as hedging instruments:
Interest rate contracts		34		31		29
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total not designated		72		52		91
Total derivative assets	$	481	$	384	$	138
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	17	$	28	$	205
Total designated		17		28		205
Not designated as hedging instruments:
Interest rate contracts		40		37		27
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total not designated		84		111		93
Total derivative liabilities	$	101	$	139	$	298

32

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

	Three Months Ended
	February 2		January 27
	2020		2019
Fair Value Hedges:
Interest rate contracts - Interest expense	$	96	$	133
Cash Flow Hedges:
Recognized in OCI
Interest rate contracts - OCI (pretax)		(2)		(9)
Reclassified from OCI
Interest rate contracts - Interest expense		(2)		2
Not Designated as Hedges:
Interest rate contracts - Net sales	$	(4)	$	(10)
Interest rate contracts - Interest expense *		2		(8)
Foreign exchange contracts - Cost of sales		11		(5)
Foreign exchange contracts - Other operating *		(1)		20
Total not designated	$	8	$	(3)

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

Counterparty Risk and Collateral

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

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at February 2, 2020, November 3, 2019, and January 27, 2019, was $60 million, $68 million, and $233 million, respectively. In accordance with the limits established in these agreements, the Company received $26 million in cash collateral at February 2, 2020 and posted $8 million in cash collateral at January 27, 2019. No cash collateral was posted or received at November 3, 2019.

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

	Gross Amounts		Netting		Collateral
February 2, 2020	Recognized		Arrangements		Received		Net Amount
Assets	$	481	$	(60)	$	(26)	$	395
Liabilities		101		(60)				41

	Gross Amounts		Netting		Collateral
November 3, 2019	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	384	$	(70)		$	314
Liabilities		139		(70)			69

	Gross Amounts		Netting		Collateral
January 27, 2019	Recognized		Arrangements		Paid		Net Amount
Assets	$	138	$	(75)			$	63
Liabilities		298		(75)	$	(8)		215

33

(19)  Stock Option and Restricted Stock Awards

In December 2019, the Company granted stock options to employees for the purchase of 495 thousand shares of common stock at an exercise price of $169.70 per share and a binomial lattice model fair value of $35.83 per share at the grant date. At February 2, 2020, options for 6.8 million shares were outstanding with a weighted-average exercise price of $99.21 per share. The Company also granted 342 thousand restricted stock units to employees in the first three months of 2020, of which 275 thousand are subject to service based only conditions and 67 thousand are subject to performance/service based conditions. The fair value of the service based only units at the grant date was $169.70 per unit based on the market price of a share of underlying common stock. The fair value of the performance/service based units at the grant date was $160.81 per unit based on the market price of a share of underlying common stock excluding dividends. At February 2, 2020, the Company was authorized to grant an additional 6.8 million shares related to stock option and restricted stock awards.

(20)  Employee-Separation Program

During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continues the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The program’s total estimated pretax expenses are approximately $136 million, of which $127 million was recorded in the first quarter. The payments for the program were also substantially made in the first quarter. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “Other operating expense.” The first quarter 2020 expenses that are included in operating profit of $105 million are allocated 37 percent “Cost of sales,” 15 percent “Research and development,” and 48 percent “Selling, administrative and general.” In addition, the expenses are allocated 75 percent to the agriculture and turf operations, 23 percent to the construction and forestry operations, and 2 percent to the financial services operations. Annual savings from these programs are estimated to be approximately $85 million with about $65 million in 2020.

34

(21) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Net Sales and Revenues
Net sales	$	6,530	$	6,941
Finance and interest income		27		23	$	936	$	866
Other income		209		215		62		60
Total		6,766		7,179		998		926
Costs and Expenses
Cost of sales		5,078		5,432
Research and development expenses		425		407
Selling, administrative and general expenses		672		645		138		121
Interest expense		63		71		275		287
Interest compensation to Financial Services		64		69
Other operating expenses		72		71		408		325
Total		6,374		6,695		821		733
Income of Consolidated Group before Income Taxes		392		484		177		193
Provision for income taxes		9		144		41		40
Income of Consolidated Group		383		340		136		153
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Financial Services		137		154		1		1
Other		(2)		6
Total		135		160		1		1
Net Income		518		500		137		154
Less: Net income attributable to noncontrolling interests		1		2
Net Income Attributable to Deere & Company	$	517	$	498	$	137	$	154

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

35

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	February 2		November 3		January 27		February 2		November 3		January 27
	2020		2019		2019		2020		2019		2019
Assets
Cash and cash equivalents	$	2,862	$	3,175	$	2,671	$	740	$	682	$	955
Marketable securities		4		1		8		605		580		515
Receivables from unconsolidated subsidiaries and affiliates		1,425		2,017		274
Trade accounts and notes receivable – net		1,115		1,482		1,177		5,707		5,153		5,746
Financing receivables – net		130		65		102		27,164		29,130		25,048
Financing receivables securitized – net		42		44		67		4,436		4,339		4,496
Other receivables		1,252		1,376		1,485		131		116		184
Equipment on operating leases – net								7,504		7,567		6,904
Inventories		6,482		5,975		7,402
Property and equipment – net		5,857		5,929		5,739		43		44		46
Investments in unconsolidated subsidiaries and affiliates		5,317		5,326		5,175		17		16		16
Goodwill		2,945		2,917		3,048
Other intangible assets – net		1,349		1,380		1,507
Retirement benefits		871		836		1,291		58		58		57
Deferred income taxes		1,821		1,896		1,507		56		57		70
Other assets		1,546		1,158		1,241		818		741		593
Total Assets	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	947	$	987	$	1,494	$	9,061	$	9,797	$	9,244
Short-term securitization borrowings		42		44		67		4,374		4,277		4,397
Payables to unconsolidated subsidiaries and affiliates		146		142		227		1,387		1,970		155
Accounts payable and accrued expenses		8,325		9,232		8,711		1,786		1,836		1,821
Deferred income taxes		408		414		470		546		568		798
Long-term borrowings		5,567		5,415		4,712		24,908		24,814		23,143
Retirement benefits and other liabilities		5,639		5,912		5,666		100		94		93
Total liabilities		21,074		22,146		21,347		42,162		43,356		39,651
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest		14		14		14
Stockholders’ Equity
Common stock, $1 par value (issued shares at February 2, 2020 – 536,431,204)		4,675		4,642		4,512		2,107		2,107		2,099
Common stock in treasury		(17,549)		(17,474)		(16,422)
Retained earnings		30,129		29,852		27,816		3,390		3,378		3,219
Accumulated other comprehensive income (loss)		(5,329)		(5,607)		(4,578)		(380)		(358)		(339)
Total Deere & Company stockholders' equity		11,926		11,413		11,328		5,117		5,127		4,979
Noncontrolling interests		4		4		5
Total stockholders’ equity		11,930		11,417		11,333		5,117		5,127		4,979
Total Liabilities and Stockholders’ Equity	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the consolidated financial statements.

36

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Cash Flows from Operating Activities
Net income	$	518	$	500	$	137	$	154
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses		1		(1)		14		3
Provision for depreciation and amortization		261		260		311		276
Undistributed earnings of unconsolidated subsidiaries and affiliates		(11)		39		(1)
Credit for deferred income taxes		(7)		(31)		(22)		(25)
Changes in assets and liabilities:
Trade receivables and Equipment Operations' financing receivables		312		186
Inventories		(530)		(1,290)
Accounts payable and accrued expenses		(1,058)		(535)		(19)		(12)
Accrued income taxes payable/receivable		(43)		(429)		(10)		527
Retirement benefits		30		(6)		6		2
Other		147		(127)		30		47
Net cash provided by (used for) operating activities		(380)		(1,434)		446		972
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						6,056		5,885
Proceeds from maturities and sales of marketable securities				3		18		5
Proceeds from sales of equipment on operating leases						426		371
Cost of receivables acquired (excluding trade and wholesale)						(4,569)		(4,448)
Purchases of marketable securities				(2)		(34)		(30)
Purchases of property and equipment		(271)		(297)
Cost of equipment on operating leases acquired						(669)		(505)
Increase in trade and wholesale receivables						(382)		(1,021)
Other		(9)		(6)		11		26
Net cash provided by (used for) investing activities		(280)		(302)		857		283
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		20		88		(493)		388
Change in intercompany receivables/payables		572		1,526		(572)		(1,526)
Proceeds from long-term borrowings		167		91		1,535		2,120
Payments of long-term borrowings		(83)		(142)		(1,568)		(1,799)
Proceeds from issuance of common stock		53		51
Repurchases of common stock		(114)		(144)
Dividends paid		(242)		(220)		(125)		(200)
Other		(29)		(23)		(9)		(8)
Net cash provided by (used for) financing activities		344		1,227		(1,232)		(1,025)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		3		(12)		(4)		(1)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(313)		(521)		67		229
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		3,196		3,202		760		813
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	2,883	$	2,681	$	827	$	1,042

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

37

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

RESULTS OF OPERATIONS

Overview

Organization

The Company’s equipment operations generate revenues and cash primarily from the sale of equipment to John Deere dealers and distributors. The equipment operations manufacture and distribute a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. The Company’s financial services primarily provide credit services, which mainly finance sales and leases of equipment by John Deere dealers and trade receivables purchased from the equipment operations. In addition, financial services offers extended equipment warranties. The information in the following discussion is presented in a format that includes information grouped as consolidated, equipment operations, and financial services. The Company also views its operations as consisting of two geographic areas, the U.S. and Canada, and outside the U.S. and Canada. The Company’s operating segments consist of agriculture and turf, construction and forestry, and financial services.

Trends and Economic Conditions

Industry sales of agricultural machinery in the U.S. and Canada are forecast to be down about 5 percent for fiscal year 2020. Industry sales in Europe are forecast to be about the same in 2020. In South America, industry sales of tractors and combines are projected to be approximately the same as 2019 levels. Asian sales are forecast to be about the same in 2020. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same in 2020. The Company’s agriculture and turf segment sales decreased 4 percent in the first quarter and are forecast to decrease about 5 to 10 percent for fiscal year 2020. Construction industry sales in North America for 2020 are expected to decline 5 to 10 percent. In forestry, global industry sales are expected to be about 5 to 10 percent lower. The Company’s construction and forestry segment sales decreased 10 percent in the first quarter, and are forecast to decrease about 10 to 15 percent in 2020 reflecting slowing construction activity as well as efforts to bring down field inventory levels. Net income attributable to Deere & Company for the Company’s financial services operations is forecast to be approximately $600 million in 2020.

Items of concern include trade agreements, the uncertainty of the effectiveness of governmental actions in respect to monetary and fiscal policies, the impact of sovereign debt, Eurozone and Argentine issues, capital market disruptions, changes in demand and pricing for used equipment, potential effects of epidemics, and geopolitical events. Significant fluctuations in foreign currency exchange rates and volatility in the price of many commodities could also impact the Company’s results.

The Company’s results reflect early signs of stabilization in the U.S. farm sector. The Company is encouraged by the broad use of precision technologies and believes it is well positioned to strengthen its leadership position in this area. For the quarter, construction sector activity slowed leading to lower sales and profit for the construction and forestry division. Actions to reduce factory production and lower inventories in response to construction equipment market conditions also negatively affected results. Additionally, the quarter included costs of a voluntary employee-separation program, which is intended to improve the Company’s flexibility. The Company is also proceeding with a series of measures to create a more focused organizational structure. These steps are leading to improved efficiencies and helping the Company focus its resources and investments on areas that have the most impact on performance.

38

2020 Compared with 2019

The following table provides the net income attributable to Deere & Company in millions of dollars and diluted earnings per share in dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Net income attributable to Deere & Company	$	517	$	498
Diluted earnings per share		1.63		1.54

The voluntary employee-separation program’s total pretax expense recognized in the first quarter of 2020 was $127 million, with another $9 million to be recorded over the remainder of the year. Included in first quarter expense was $22 million for items excluded from operating profit and $3 million recorded by financial services. Annual estimated savings from the separation program are approximately $85 million, with about $65 million expected in 2020 (see Note 20). Discrete income tax benefits also affected the quarter’s net income (see Note 9).

The worldwide net sales and revenues, price realization, and the effect of currency translation for worldwide, U.S. and Canada, and outside U.S. and Canada in millions of dollars follows:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Worldwide net sales and revenues	$	7,631	$	7,984	-4
Worldwide equipment operations net sales		6,530		6,941	-6
Price realization					+2
Currency translation (unfavorable)					-1
U.S. and Canada equipment operations net sales		3,750		4,123	-9
Price realization					+2
Outside U.S. and Canada equipment operations net sales		2,780		2,818	-1
Price realization					+3
Currency translation (unfavorable)					-3

The Company’s equipment operations operating profit and net income and financial services operations net income follow in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Equipment operations operating profit	$	466	$	577	-19
Equipment operations net income		383		340	+13
Financial services net income		137		154	-11

The discussion on net sales and operating profit are included in the Business Segment Results below.

39

Business Segment Results

Agriculture and Turf. The agriculture and turf segment results in millions of dollars follow:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Net sales	$	4,486	$	4,681	-4
Operating profit		373		348	+7
Operating margin		8.3%		7.4%

Agriculture and turf sales for the quarter declined due to lower shipment volumes and the unfavorable effects of currency translation, partially offset by price realization. Operating profit increased mainly as a result of price realization, improved production costs, and lower warranty related expenses, partially offset by lower shipment volumes / sales mix and voluntary employee-separation expenses.

40

Construction and Forestry. The construction and forestry segment results in millions of dollars follow:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Net sales	$	2,044	$	2,260	-10
Operating profit		93		229	-59
Operating margin		4.5%		10.1%

Construction and forestry sales decreased for the quarter primarily due to lower shipment volumes and the unfavorable effects of currency translation, partially offset by price realization. Operating profit moved lower as a result of lower shipment volumes / sales mix and voluntary employee-separation expenses, partially offset by price realization.

Financial Services. The financial services segment revenue, interest expense, and operating profit in millions of dollars, along with the ratio of earnings to fixed charges follow:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Revenue (including intercompany revenue)	$	998	$	926	+8
Interest expense		275		287	-4
Operating profit		179		192	-7
Consolidated ratio of earnings to fixed charges		1.64		1.68

Operating profit decreased due to higher losses on lease residual values, an increased provision for credit losses, and higher selling, administrative and general expenses, partially offset by income earned on a higher average portfolio. The average balance of receivables and leases financed was 7 percent higher in the first three months of 2020, compared with the same period last year. Interest expense decreased 4 percent in the first quarter of 2020 primarily as a result of lower average borrowing rates, partially offset by higher average borrowings.

41

The cost of sales to net sales ratio and other significant statement of consolidated income changes not previously discussed follow:

	Three Months Ended
	February 2		January 27
	2020		2019		% Change
Cost of sales to net sales		77.7%		78.3%
Research and development expenses	$	425	$	407	+4
Selling, administrative and general expenses		809		764	+6
Other operating expenses		415		351	+18

The cost of sales ratio improved due to price realization and lower production costs, partially offset by costs of the voluntary employee-separation program. Research and development expenses and selling, administrative and general expenses increased primarily as a result of voluntary employee-separation costs. Other operating expenses increased primarily as a result of higher depreciation of equipment on operating leases and a curtailment in certain OPEB plans (see Note 8).

Market Conditions and Outlook

Net income attributable to Deere & Company is forecast to be in a range of $2,700 million to $3,100 million.

● Agriculture and Turf. The Company’s worldwide sales of agriculture and turf equipment are forecast to decline 5 to 10 percent for fiscal year 2020, including a negative currency translation effect of about 1 percent. Industry sales of agricultural equipment in the U.S. and Canada are forecast to be down about 5 percent, driven by lower demand for large equipment in Canada. Full year industry sales in Europe are forecast to be about the same as are South American industry sales of tractors and combines. Asian sales are forecast to be about the same as the prior year. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same as 2019.

● Construction and Forestry. The Company’s worldwide sales of construction and forestry equipment are anticipated to be down 10 to 15 percent for 2020, with foreign currency rates having an unfavorable translation effect of about 1 percent. The outlook reflects slowing construction activity as well as efforts to bring down field inventory levels. Industry construction equipment sales in North America are expected to decline by 5 to 10 percent for the year. In forestry, global industry sales are expected to be down 5 to 10 percent due to weaker demand in North America and Russia.

● Financial Services. Fiscal year 2020 results are expected to benefit from lower losses on lease residual values and income earned from a higher average portfolio, partially offset by a higher provision for credit losses and prior year favorable discrete adjustments to the provision for income taxes. Net income attributable to Deere & Company for the financial services operations is expected to be approximately $600 million.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements under “Overview,” “Market Conditions and Outlook,” and other forward-looking statements herein that relate to future events, expectations, and trends involve factors that are subject to change, and risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of the Company’s businesses.

The Company’s agricultural equipment business is subject to a number of uncertainties including the factors that affect farmers’ confidence and financial condition. These factors include demand for agricultural products, world grain stocks, weather conditions, soil conditions, harvest yields, prices for commodities and livestock, crop and livestock production expenses, availability of transport for crops, trade restrictions and tariffs (e.g., China), global trade agreements (e.g., the United States-Mexico-Canada Agreement), the level of farm product exports (including concerns about genetically modified organisms), the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production), real estate values, available acreage for farming, the land ownership policies of governments, changes in government farm programs and policies, international reaction to such programs, changes in and effects of crop insurance programs, changes in environmental regulations and their impact on farming practices, animal diseases (e.g., African swine fever) and their effects on poultry, beef and pork consumption and prices and on livestock feed demand, and crop pests and diseases.

42

Factors affecting the outlook for the Company’s turf and utility equipment include consumer confidence, weather conditions, customer profitability, labor supply, consumer borrowing patterns, consumer purchasing preferences, housing starts and supply, infrastructure investment, spending by municipalities and golf courses, and consumable input costs.

Consumer spending patterns, real estate and housing prices, the number of housing starts, interest rates and the levels of public and non-residential construction are important to sales and results of the Company’s construction and forestry equipment. Prices for pulp, paper, lumber and structural panels are important to sales of forestry equipment.

All of the Company’s businesses and its results are affected by general economic conditions in the global markets and industries in which the Company operates; customer confidence in general economic conditions; government spending and taxing; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates (including the availability of IBOR reference rates); inflation and deflation rates; changes in weather patterns; the political and social stability of the global markets in which the Company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts; natural disasters; and the spread of major epidemics (including Coronavirus) and responses to epidemics such as government-imposed travel restrictions and extended shut down of businesses.

Significant changes in market liquidity conditions, changes in the Company’s credit ratings and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the Company’s earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the Company’s products and customer confidence and purchase decisions, borrowing and repayment practices, and the number and size of customer loan delinquencies and defaults. A debt crisis, in Europe or elsewhere, could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, suppliers, demand for equipment, and Company operations and results. The Company’s investment management activities could be impaired by changes in the equity, bond and other financial markets, which would negatively affect earnings.

The withdrawal of the United Kingdom from the European Union and the perceptions as to the impact of the withdrawal may adversely affect business activity, political stability and economic conditions in the United Kingdom, the European Union and elsewhere. The economic conditions and outlook could be further adversely affected by (i) uncertainty regarding any new or modified trade arrangements between the United Kingdom and the European Union and/or other countries, (ii) the risk that one or more other European Union countries could come under increasing pressure to leave the European Union, or (iii) the risk that the euro as the single currency of the Eurozone could cease to exist. Any of these developments, or the perception that any of these developments are likely to occur, could affect economic growth or business activity in the United Kingdom or the European Union, and could result in the relocation of businesses, cause business interruptions, lead to economic recession or depression, and impact the stability of the financial markets, availability of credit, currency exchange rates, interest rates, financial institutions, and political, financial and monetary systems. Any of these developments could affect our businesses, liquidity, results of operations and financial position.

Additional factors that could materially affect the Company’s operations, access to capital, expenses and results include changes in, uncertainty surrounding and the impact of governmental trade, banking, monetary and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs and other areas, and governmental programs, policies, tariffs and sanctions in particular jurisdictions or for the benefit of certain industries or sectors; retaliatory actions to such changes in trade, banking, monetary and fiscal policies; actions by central banks; actions by financial and securities regulators; actions by environmental, health and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, noise and the effects of climate change; changes to GPS radio frequency bands or their permitted uses; changes in labor and immigration regulations; changes to accounting standards; changes in tax rates, estimates, laws and regulations and Company actions related thereto; changes to and compliance with privacy regulations; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies.

Other factors that could materially affect results include production, design and technological innovations and difficulties, including capacity and supply constraints and prices; the loss of or challenges to intellectual property rights whether through theft, infringement, counterfeiting or otherwise; the availability and prices of strategically sourced materials, components and whole goods; delays or disruptions in the Company’s supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations or distribution; the failure of suppliers or the Company to comply with laws, regulations and Company policy pertaining to

43

employment, human rights, health, safety, the environment, anti-corruption, privacy and data protection and other ethical business practices; events that damage the Company’s reputation or brand; significant investigations, claims, lawsuits or other legal proceedings; start-up of new plants and products; the success of new product initiatives; changes in customer product preferences and sales mix; gaps or limitations in rural broadband coverage, capacity and speed needed to support technology solutions; oil and energy prices, supplies and volatility; the availability and cost of freight; actions of competitors in the various industries in which the Company competes, particularly price discounting; dealer practices especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; labor relations and contracts; changes in the ability to attract, train and retain qualified personnel; acquisitions and divestitures of businesses; greater than anticipated transaction costs; the integration of new businesses; the failure or delay in closing or realizing anticipated benefits of acquisitions, joint ventures or divestitures; the implementation of organizational changes; the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts; difficulties related to the conversion and implementation of enterprise resource planning systems; security breaches, cybersecurity attacks, technology failures and other disruptions to the Company’s and suppliers’ information technology infrastructure; changes in Company declared dividends and common stock issuances and repurchases; changes in the level and funding of employee retirement benefits; changes in market values of investment assets, compensation, retirement, discount and mortality rates which impact retirement benefit costs; and significant changes in health care costs.

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

The Company’s outlook is based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The Company, except as required by law, undertakes no obligation to update or revise its outlook, whether as a result of new developments or otherwise. Further information concerning the Company and its businesses, including factors that could materially affect the Company’s financial results, is included in the Company’s other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q).

Critical Accounting Policies

See the Company’s critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent annual report filed on Form 10-K. There have been no material changes to these policies.

CAPITAL RESOURCES AND LIQUIDITY

The discussion of capital resources and liquidity has been organized to review separately, where appropriate, the Company’s consolidated totals, equipment operations, and financial services operations.

Consolidated

Negative cash flows from consolidated operating activities in the first three months of 2020 were $508 million. This resulted primarily from a decrease in accounts payable and accrued expenses, a seasonal increase in inventories, and a change in accrued income taxes payable / receivable, which were partially offset by net income adjusted for non-cash provisions and a decrease in receivables related to sales. Cash inflows from investing activities were $1,026 million in the first three months of this year, primarily due to collections of receivables (excluding receivables related to sales) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $1,270 million, partially offset by purchases of property and equipment of $271 million. Negative cash flows from financing activities were $763 million in the first three months of 2020 primarily due to a decrease in borrowings of $422 million, dividends paid of $242 million, and repurchases of common stock of $114 million, partially offset by proceeds from issuance of common stock of $53 million (resulting from the exercise of stock options). Cash, cash equivalents, and restricted cash decreased $246 million during the first three months of this year.

Negative cash flows from consolidated operating activities in the first three months of 2019 were $1,651 million. This resulted primarily from a seasonal increase in inventories, a decrease in accounts payable and accrued expenses, and an increase in receivables related to sales, which were partially offset by net income adjusted for non-

44

cash provisions and a change in accrued income taxes payable / receivable. Cash inflows from investing activities were $969 million in the first three months of 2019, primarily due to collections of receivables (excluding receivables related to sales) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $1,293 million, partially offset by purchases of property and equipment of $297 million. Positive cash flows from financing activities were $403 million in the first three months of 2019 primarily due to an increase in borrowings of $746 million and proceeds from issuance of common stock of $51 million (resulting from the exercise of stock options), partially offset by dividends paid of $220 million and repurchases of common stock of $144 million. Cash, cash equivalents, and restricted cash decreased $292 million during the first three months of 2019.

The Company has access to most global markets at a reasonable cost and expects to have sufficient sources of global funding and liquidity to meet its funding needs. Sources of liquidity for the Company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and committed and uncommitted bank lines of credit. The Company’s commercial paper outstanding at February 2, 2020, November 3, 2019, and January 27, 2019 was $2,149 million, $2,698 million, and $3,760 million, respectively, while the total cash and cash equivalents and marketable securities position was $4,211 million, $4,438 million, and $4,149 million, respectively. The total cash and cash equivalents and marketable securities held by foreign subsidiaries, was $2,572 million, $2,731 million, and $2,076 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

Lines of Credit. The Company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,484 million at February 2, 2020, $5,692 million of which were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were primarily considered to constitute utilization. Included in the total credit lines at February 2, 2020 was a 364-day credit facility agreement of $2,800 million, expiring in fiscal April 2020. In addition, total credit lines included long-term credit facility agreements of $2,500 million, expiring in April 2023, and $2,500 million, expiring in April 2024. These credit agreements require John Deere Capital Corporation (Capital Corporation) to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the 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. The credit agreements also require the equipment operations to maintain a ratio of total debt to total capital (total debt and stockholders’ equity excluding accumulated other comprehensive income (loss) of 65 percent or less at the end of each fiscal quarter. Under this provision, the Company’s excess equity capacity and retained earnings balance free of restriction at February 2, 2020 was $13,729 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $25,497 million at February 2, 2020. All of these requirements of the credit agreement have been met during the periods included in the financial statements.

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

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

Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. Trade receivables increased $130 million during the first three months of 2020, primarily due to a seasonal increase. These receivables decreased $137 million, compared to a year ago, primarily due to lower shipment volumes and foreign currency translation. The ratios of worldwide trade accounts and notes receivable to the last 12 months’ net sales were 16 percent at February 2, 2020, compared to 15 percent at November 3, 2019 and 16 percent at January 27, 2019. Agriculture and turf trade receivables decreased $69 million and construction and forestry trade receivables decreased $68 million, compared to a year ago. The percentage of total worldwide trade receivables outstanding for

45

periods exceeding 12 months was 3 percent at February 2, 2020, 3 percent at November 3, 2019, and 1 percent at January 27, 2019.

Deere & Company stockholders’ equity was $11,926 million at February 2, 2020, compared with $11,413 million at November 3, 2019 and $11,328 million at January 27, 2019. The increase of $513 million during the first three months of 2020 resulted primarily from net income attributable to Deere & Company of $517 million, a change in the retirement benefits adjustment of $230 million, a change in the cumulative translation adjustment of $43 million, and an increase in common stock of $33 million, partially offset by dividends declared of $239 million and an increase in treasury stock of $75 million.

Equipment Operations

The Company’s equipment businesses are capital intensive and are subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. The equipment operations sell a significant portion of their trade receivables to financial services. To the extent necessary, funds provided from operations are supplemented by external financing sources.

Cash used for operating activities of the equipment operations, including intercompany cash flows, in the first three months of 2020 was $380 million. This resulted primarily from a decrease in accounts payable and accrued expenses, a seasonal increase in inventories, and a change in accrued income taxes payable / receivable. Partially offsetting these operating cash outflows were cash inflows from net income adjusted for non-cash provisions and a decrease in trade and financing receivables held by the equipment operations. Cash, cash equivalents, and restricted cash decreased $313 million in the first three months of 2020.

Cash used for operating activities of the equipment operations, including intercompany cash flows, in the first three months of 2019 was $1,434 million. This resulted primarily from a seasonal increase in inventories, a decrease in accounts payable and accrued expenses, and a change in accrued income taxes payable / receivable. Partially offsetting these operating cash outflows were cash inflows from net income adjusted for non-cash provisions and a decrease in trade and financing receivables held by the equipment operations. Cash, cash equivalents, and restricted cash decreased $521 million in the first three months of 2019.

Trade receivables held by the equipment operations decreased $367 million during the first three months of 2020 and decreased $62 million from a year ago. The equipment operations sell a significant portion of their trade receivables to financial services. See the previous consolidated discussion of trade receivables.

Inventories increased by $507 million during the first three months, primarily due to a seasonal increase. Inventories decreased $920 million, compared to a year ago, primarily due to lower production volumes and the effect of foreign currency translation. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to the last 12 months’ cost of sales were 31 percent at February 2, 2020, compared to 29 percent at November 3, 2019 and 35 percent at January 27, 2019.

Total interest-bearing debt of the equipment operations was $6,556 million at February 2, 2020, compared with $6,446 million at November 3, 2019 and $6,273 million at January 27, 2019. The ratios of debt to total capital (total interest-bearing debt and stockholders’ equity) were 35 percent, 36 percent, and 36 percent at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

The Company may from time to time seek to retire portions of its outstanding debt securities through cash repurchases or exchanges for other securities, in open-market purchases, privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will be subject to and depend on prevailing market conditions, the company’s liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.

Property and equipment cash expenditures for the equipment operations in the first three months of 2020 were $271 million, compared with $297 million in the same period last year. Capital expenditures for the equipment operations in 2020 are estimated to be approximately $1,100 million.

In October 2019, the Company entered into a definitive agreement to acquire Unimil, a privately held Brazilian company in the aftermarket service parts business for sugarcane harvesters. The expected cash purchase price is R$375 million (or approximately US$90 million based on the exchange rate at the end of the fiscal quarter). The Company expects to fund the acquisition and the transaction expenses with current cash. The transaction requires customary regulatory approval and is expected to close within six months.

46

Financial Services

The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Their primary sources of funds for this purpose are a combination of commercial paper, term debt, securitization of retail notes, equity capital, and borrowings from Deere & Company.

During the first three months of 2020, the cash provided by operating and investing activities was used for financing activities. Cash flows provided by operating activities, including intercompany cash flows, were $446 million in the first three months of 2020. Cash provided by investing activities totaled $857 million in the first three months of 2020 primarily due to the collection of receivables (excluding trade and wholesale) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $1,244 million, partially offset by an increase in trade and wholesale receivables of $382 million. Cash used for financing activities totaled $1,232 million, resulting primarily from a decrease in borrowings from Deere & Company of $572 million, a decrease in external borrowings of $526 million, and dividends paid to Deere & Company of $125 million. Cash, cash equivalents, and restricted cash increased $67 million in the first three months of 2020.

During the first three months of 2019, the cash provided by operating and investing activities was used for financing activities. Cash flows provided by operating activities, including intercompany cash flows, were $972 million in the first three months of 2019. Cash provided by investing activities totaled $283 million in the first three months of 2019 primarily due to the collection of receivables (excluding trade and wholesale) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $1,303 million, partially offset by an increase in trade and wholesale receivables of $1,021 million. Cash used for financing activities totaled $1,025 million, resulting primarily from a decrease in borrowings from Deere & Company of $1,526 million and dividends paid to Deere & Company of $200 million, partially offset by an increase in external borrowings of $709 million. Cash, cash equivalents, and restricted cash increased $229 million in the first three months of 2019.

Receivables and leases held by the financial services operations consist of retail notes originated in connection with retail sales of new and used equipment by dealers of John Deere products, retail notes from non-Deere equipment customers, trade receivables, wholesale notes, revolving charge accounts, credit enhanced international export financing generally involving John Deere products, sales-type and direct financing leases, and operating leases. Total receivables and leases decreased $1,378 million during the first quarter of 2020 and increased $2,617 million in the past 12 months. Acquisition volumes of receivables (excluding trade and wholesale) and leases were 6 percent higher in the first three months of 2020, compared with the same period last year, as volumes of retail notes and operating leases were higher, while volumes of sales-type and direct financing leases and revolving charge accounts were lower. The amount of total trade receivables and wholesale notes increased compared to November 3, 2019 and decreased compared to January 27, 2019.

Total external interest-bearing debt of the financial services operations was $38,343 million at February 2, 2020, compared with $38,888 million at November 3, 2019 and $36,784 million at January 27, 2019. Total external borrowings have generally changed corresponding with the level of receivable and lease portfolio, the level of cash and cash equivalents, the change in payables owed to Deere & Company, and the change in investment from Deere & Company. The financial services operations’ ratio of interest-bearing debt to stockholder’s equity was 7.8 to 1 at February 2, 2020, compared with 8.0 to 1 at November 3, 2019 and 7.4 to 1 at January 27, 2019.

Capital Corporation has a revolving credit agreement to utilize bank conduit facilities to securitize retail notes (see Note 12). During November 2019, the agreement was renewed with a total capacity, or “financing limit,” of $3,500 million of secured financings at any time. After a two-year revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected. At February 2, 2020, $1,935 million of secured short-term borrowings were outstanding under the agreement.

In the first three months of 2020, the financial services operations issued $760 million and retired $664 million of retail note securitization borrowings. In addition, during the first three months of 2020, the financial services operations issued $1,535 million and retired $1,568 million of long-term borrowings, which were primarily medium-term notes.

Dividends

The Company’s Board of Directors at its meeting on February 26, 2020 declared a quarterly dividend of $.76 per share payable May 8, 2020, to stockholders of record on March 31, 2020.

47

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 4. CONTROLS AND PROCEDURES

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of February 2, 2020, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. The Company implemented a new system for lessee accounting with the adoption of ASU No. 2016-02, Leases. The Company began using this system on November 4, 2019 to account for all lease transactions when the Company is the user of the equipment. In addition, controls were implemented to properly account for leasing arrangements in accordance with the new lease standard. During the first quarter, there were no other changes that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

48

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 product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that John Deere reasonably believes could exceed $100,000. The following matter is disclosed solely pursuant to that requirement: on October 3, 2018, the Provincia Santa Fe Ministerio de Medio Ambiente of Argentina issued a Notice of Violation to Industrias John Deere Argentina in connection with alleged groundwater contamination at the site; the Company worked with the appropriate authorities to implement corrective actions to remediate the site. On December 16, 2019, the Provincia Santa Fe Ministerio de Medio Ambiente issued a Notice of Fine of approximately $328,000; the Company is determining its response. The Company believes the reasonably possible range of losses for this and other unresolved legal actions would not have a material effect on its financial statements.

Item 1A.  Risk Factors

See the Company’s most recent annual report filed 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 “Safe Harbor Statement” 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

The Company’s purchases of its common stock during the first quarter of 2020 were as follows:

				Total Number of
				Shares Purchased as	Maximum Number of
	Total Number of			Part of Publicly	Shares that May Yet Be
	Shares			Announced Plans or	Purchased under the
	Purchased (2)	Average Price		Programs (1)	Plans or Programs (1)
Period	(thousands)	Paid Per Share		(thousands)	(millions)
Nov 4 to Dec 1	79	$	175.18	79	6.7
Dec 2 to Dec 29	156		169.97	70	57.1
Dec 30 to Feb 2	426		173.17	426	56.6
Total	661			575

(1) During the first quarter of 2020, the Company had a share repurchase plan that was announced in December 2013 to purchase up to $8,000 million of shares of the Company’s common stock. In December 2019, the Company announced an additional share repurchase plan authorizing the purchase of up to $8,000 million of shares of the Company’s common stock. The maximum number of shares that may yet be purchased under these plans was based on the end of the first quarter closing share price of $158.58 per share. At the end of the first quarter of 2020, $8,975 million of common stock remains to be purchased under the plans.

(2) In the first quarter of 2020, approximately 86 thousand shares were purchased from plan participants at a market price to pay payroll taxes on certain restricted stock awards. The shares were valued at a weighted-average market price of $172.51.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

49

Item 5.  Other Information

Not applicable.

Item 6.  Exhibits

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

3.1	Certificate of Incorporation (Exhibit 3.1 to Form 10-Q of registrant for the quarter ended July 28, 2019, Securities and Exchange Commission File Number 1-4121*)
3.2	Bylaws, as amended (Exhibit 3.2 to Form 10-Q of registrant for the quarter ended January 27, 2019, Securities and Exchange Commission File Number 1-4121*)
10.1	Second Amendment, dated as of February 21, 2020, to the Asset Purchase Agreement dated October 29, 2001, between registrant and Deere Capital, Inc. (including conformed copy of the Asset Purchase Agreement as Exhibit A thereto)
10.2	Second Amendment, dated as of February 21, 2020, to the Asset Purchase Agreement dated October 29, 2001, between John Deere Construction & Forestry Company and Deere Capital, Inc. (including conformed copy of the Asset Purchase Agreement as Exhibit A thereto)
31.1	Rule 13a-14(a)/15d-14(a) Certification
31.2	Rule 13a-14(a)/15d-14(a) Certification
32	Section 1350 Certifications
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. Copies of these exhibits are available from the Company upon request.

50

SIGNATURES

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

		DEERE & COMPANY
Date:	February 27, 2020	By:	/s/ Ryan D. Campbell
			Ryan D. Campbell Senior Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

51

EX-10.1

EXHIBIT 10.1

SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is entered into as of this 21st day of February, 2020, by and between DEERE CAPITAL, INC., a Nevada corporation with its principal office located in Reno, Nevada (“Purchaser”), and DEERE & COMPANY, a Delaware corporation with its principal office located in Moline, Illinois (“Seller”).

RECITALS

WHEREAS, Seller and Purchaser previously entered into that certain Asset Purchase Agreement dated as of October 29, 2001, whereby Seller sold certain current and future assets to Purchaser, as amended by that certain First Amendment to Asset Purchase Agreement dated as of February 2010 (the “Agreement”); and

WHEREAS, Seller and Purchaser wish to modify the scope of the Agreement to exclude certain U.S. wholesale receivables.

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged by the parties hereto, the parties agree as follows:

1.         Amendments to Agreement.  The definition of “Receivables” set forth in Article I of the Agreement is, effective November 4, 2019, amended and restated in its entirety with the following:

“"Receivables" means, as of any date, each and all of Seller's outstanding accounts receivable or notes receivable as of such date with a United States Dealer as an account debtor or notemaker, other than those accounts receivable or notes receivable that have been identified and/or sold by Seller to Deere Credit, Inc. pursuant to that certain Asset Purchase Agreement dated as of November 4, 2019 by and between Seller and Deere Credit, Inc.”

2.         Reference to and Effect Upon Agreement.  Except as expressly amended by this Amendment, the terms and conditions of the Agreement remain in full force and effect.  For ease of reference, a conformed copy of the Agreement incorporating all amendments to date is attached hereto as Exhibit A. This Amendment constitutes the entire understanding of the parties hereto and supersedes all prior understandings of the parties relating to the matters discussed herein.  This Amendment may only be amended or modified by the terms of a written instrument signed by all parties hereto.

3.         Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

4.         Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument.

[signature page follows]

1

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the day and year first written above.

DEERE & COMPANY		DEERE CAPITAL, INC.
By:	/s/ Ryan D. Campbell	By:	/s/ Rajesh Kalathur
Name:	Ryan D. Campbell	Name:	Rajesh Kalathur
Title:	Senior Vice President and Chief Financial Officer	Title:	President

2

Exhibit A

This document is a composite conformed copy of the Asset Purchase Agreement dated October 29, 2001 as amended through the Second Amendment as of February 21, 2020.

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of 29 October, 2001 between DEERE CAPITAL, INC. a Nevada corporation with its principal office located in Reno, Nevada ("Purchaser"), and DEERE & COMPANY, a Delaware corporation located in Moline, Illinois ("Seller").

RECITALS

A.  Seller is in the business of manufacturing and selling equipment to Dealers and in the operation of this business is the owner of certain Receivables.

B.  Seller expects, in continuing to conduct its business, to generate Future Receivables.

C.  Seller has invited Purchaser to purchase the Receivables and Future Receivables and Purchaser has agreed to purchase the Receivables and Future Receivables under the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I. DEFINITIONS

1.Certain Definitions.  The following capitalized terms shall have the meanings ascribed to them below:

"Account" means the total amount of Receivables or Future Receivables that are currently owed, or may in the future be owed, to Seller by any particular Dealer or other Obligor, together with the obligation to make future advances to such Dealer or other Obligor.

"Adverse Consequences" means any claim, damage, loss, cost or expense (including, attorneys' fees and expenses) or any other liability of every nature, kind and description whatsoever including, without limitation, acts or liabilities to third parties incurred or suffered by an Indemnified Party, but excluding lost profits, by reason of or resulting from or arising out of any of the occurrences described in Article IX of this Agreement.

"Agreement" means this Asset Purchase Agreement, together with all schedules, exhibits, supplements and documents that are attached hereto or incorporated by reference.

"Assets" means, collectively, the Purchased Assets and the Subsequent Assets.

1

"Audited Closing Payment" means the payment adjustment which shall be made in response to the Verification Audit.

"Books and Records" means (a) all information, in whatever form maintained (and if maintained electronically, then with the relevant electronic file layout), about the Accounts, the Receivables, the Files and the Dealers or other Obligors contained in the Seller's Systems, excluding Seller's proprietary or confidential management information, and, if requested, reasonable explanations of any data field which is derived from a calculation; (b) the Files and the alphabetical and numerical indices necessary to access such microfilmed or microfiche documents; and (c) all collection and other customer service notes and other historical information with respect to the Receivables and the Dealers or other Obligors.

"Closed Account" means any Account that has been terminated by either the Dealer or Seller for any reason, whether or not such Account has an outstanding principal balance.

"Closing" has the meaning provided in Section 2.1(E) of this Agreement.

"Closing Audit" means the audit of a Closing Statement including all reports, statements and documents referred to therein or related thereto, conducted pursuant to Section 2.2(D) hereof.

"Closing Date" means (i) the Initial Closing Date and (ii) each Subsequent Closing Date.

"Closing Electronic Record" means the record provided by Seller and delivered to Purchaser as part of a Closing that reflects the Receivables as of the close of business on the day prior to the Closing Date. 

"Closing Statement" means a statement, in the form set forth in Exhibit 2.2 (C) attached hereto, which sets forth the calculation of the relevant Purchase Price.

"Collateral" has the meaning provided in Section 2.1(A) of this Agreement.

"Dealer" means any Person who has currently (i) an effective appointment as a John Deere Company Authorized Agricultural Dealer and/or (ii) an effective appointment as a John Deere Company Authorized Lawn and Garden Dealer and/or (iii) any other appointment to sell goods which are manufactured or distributed by Seller and whose name appears on the Master Account List.

"Federal Funds Rate" means the Federal Funds Rate, as published in the Money Rates section of The Wall Street Journal for overnight deposits on the business day prior to the date any Payment is made, as quoted by Purchaser or Seller, as the case may be, which quotation shall be deemed correct in the absence of manifest error.

"File" means, with respect to each Account, the original or copy and any microfilm, microfiche, electronic or other copy of all Account information,

2

statements, documents and correspondence from or to the related Dealer or other Obligor or which otherwise is about the Receivables in such Account, all to the extent included within the definition of Books and Records.

"Future Receivables" means any of Seller's Receivables which are generated on or after the Initial Closing Date.

"Indemnified Party" means a party to whom an indemnification payment, as described in Article IX, may be due and owing.

"Indemnifying Party" means a party from whom an indemnification payment, as described in Article IX, may be due and owing.

"Initial Closing Date" means the date specified in Section 2.1(E).

"Knowledge" means the best knowledge, information and belief upon due inquiry.

"Lien" means a security interest or lien of any kind affecting any or all of the Accounts, specific Receivables or any Collateral.

"Master Account List" means the list provided by Seller and delivered to Purchaser on or before the Initial Closing Date that identifies every Account being sold to Purchaser as of the close of business on the business day immediately preceding the Initial Closing Date, together with the balances contained in such Account as of such date.

"Material Adverse Effect" means the material and adverse change in: (a) the ownership or enforceability of the Assets, or any of them; (b) the ability of Seller or Purchaser to perform its respective obligations under this Agreement or the ability of Seller or Purchaser to consummate any of the transactions contemplated hereby.

"Obligor" means, and shall only include with respect to any Account, any Person obligated to make payments with respect to such Account, including any guarantor thereof.

"Payments" means the Purchase Price paid on the Closing Date or upon any future purchase of Receivables and any payments pursuant to Section 2.2 (E).

"Person" means any legal person, including, without limitation, any natural person, corporation, partnership, joint venture, association, limited liability company, joint-stock company, business trust, unincorporated organization, governmental entity or any other entity of every nature, kind and  description.

"Portfolio" means the Receivables, whether such Receivables have been generated prior to or subsequent to this Agreement.

"Purchased Assets" means those assets identified in Section 2.1(A)(i) through (vii).

"Purchase Price" with respect to the Purchased Assets or the Subsequent

3

Assets, means the purchase price determined pursuant to the terms and provisions of this Agreement.

"Receivables" means, as of any date, each and all of Seller's outstanding accounts receivable or notes receivable as of such date with a United States Dealer as an account debtor or notemaker, other than those accounts receivable or notes receivable that have been identified and/or sold by Seller to Deere Credit, Inc. pursuant to that certain Asset Purchase Agreement dated as of November 4, 2019 by and among Seller, Purchaser, and Deere Credit, Inc.

"Receivable Agreement(s)" means the promissory notes, credit agreements, guaranties, applications, security agreements and other agreements entered into by and between Seller and Dealer or other Obligor or otherwise evidencing or governing the obligations of such Dealer or other Obligor under the Account. The Receivable Agreements exist in microfilm or microfiche form derived from signed paper Receivable Agreements identified by Account codes on microfiche or microfilm rolls.

"Repurchase Price" means, with respect to any Receivable, a sum equal to (a) the unpaid principal balance of the Receivable at the time of repurchase, plus (b) any billed and unpaid fees for such Receivable as of the date of repurchase by Seller, plus (c) interest from the last payment of interest on the Receivable to the date of such repurchase at the applicable interest rate charged on the Receivable as of the date of repurchase.

"Requirements of Law" with respect to any Person, means any certificate of incorporation, by-laws, agreements, or other organizational or governing documents of such Person, and any law, ordinance, statute, treaty, rule, judgment, regulation or determination or finding of any arbitrator or governmental authority applicable to or binding upon such Person or to which such Person is subject, whether federal, state, county, local or otherwise, (including, without limitation, usury or other credit laws, the Fair Debt Collection Practices Act, the Federal Equal Credit Opportunity Act, the Fair Credit Reporting Act, Regulation B of the Board of Governors of the Federal Reserve System, and any licensing requirement.)

"Seller's Policies and Procedures" means the standard methods which Seller uses to administer on an ongoing basis the Accounts and Receivables, whether the methods are written or oral. "Seller's System" means that or those systems, whether proprietary or commercial, used by Seller, or any agent thereof in the origination and servicing of the Receivables or payments thereon, including without limitation, any such system as Seller uses in collection of the Receivables, to capture checks and payments for processing or to track Receivable Agreements for Seller's Receivables.

"Subsequent Assets" means those assets identified in Section 2.1(B)(i) through (vi).

"Subsequent Closing Date" means any date on which Subsequent Assets are purchased after the Initial Closing Date.

4

"Supplemental Interest Fee" has the meanng specified in Section 3.2 of this Agreement.

"Supplemental Interest Schedule" has the meaning provided to it in Section 3.2 of this Agreement.

"Supplemental Interest Receivables" means those Receivables which bear no interest rate .

"Tax" means any federal, state or local tax of the United States or of any state, including without limitation any income tax, franchise tax, real or personal property tax, employment tax, sales and use tax, value tax and any interest and penalties thereon including, without limitation, those levied on any failure to make appropriate withholdings and fines, penalties, other charges resulting from the failure to pay such amounts when due, but not including any tax that is levied on this transaction or chargeable on this Agreement or any documents or instruments required to be executed hereunder or pursuant hereto.

"UCC" means the Uniform Commercial Code.

"Verification Audit" means a post-Closing Date audit as described in Section 2.2(D).

"Verification Statement" means a statement by Purchaser of any perceived discrepancy or adjustment after a Verification Audit.

ARTICLE II. PURCHASE OF PORTFOLIO; ASSUMPTION OF LIABILITIES

2.1         Purchase of Portfolio; Closing.

(A)    Purchased Assets. On the Initial Closing Date and subject to all of the terms and conditions set forth herein, Seller shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and receive from Seller subject to the terms of this Agreement, all of Seller's right, title and interest in and to the following: (i) all Receivables in the Accounts as of the close of business on the business day immediately preceding the Initial Closing Date; (ii) all rights to payment of interest, charges and fees on such Receivables; (iii) all rights to any and all collateral (the "Collateral") which secures the Dealer's or any other Obligor's obligations to Seller pertaining to such Receivables; (iv) all of the rights of Seller provided by any Receivable Agreements (but only to the extent that the rights of Seller provided by any Receivable Agreements relate to Receivables), guaranties and promissory notes (in each case, to the extent they apply to such Receivables), (v) all security agreements, financing statements or other instruments which relate to the Collateral (but only to the extent that such security agreements, financing statements or other instruments relate to the Receivables being purchased by Purchaser on the Initial Closing Date); (vi) the Files and (vii) the Books and Records.

(B)   Subsequent Assets. To the extent that the parties wish to engage in sales of Future Receivables subsequent to the Initial Closing Date, then immediately upon the generation of any such Future Receivables, Seller may sell, assign, transfer and convey to Purchaser, and Purchaser may purchase and receive from Seller subject to the terms of this Agreement, all of Seller's right, title

5

and interest in and to the following: (i) all such Future Receivables; (ii) all rights to payment of interest, charges and fees on such Future Receivables; (iii) all rights to the Collateral which secures the Dealer's or any other Obligor's obligations to Seller pertaining to such Future Receivables; (iv) all of the rights of Seller provided by any Receivable Agreements (but only to the extent that the rights of Seller provided by any Receivable Agreements relate to such Future Receivables ), guaranties and promissory notes (in each case, to the extent they apply to such Receivables ); (v) all security agreements, financing statements or other instruments which relate to the Collateral (but only to the extent that such security agreements, financing statements or other instruments relate to the Future Receivables being purchased by Purchaser); (vi) the Files (as they relate to the Future Receivables) and the Books and Records (as they relate to the Future Receivables). Notwithstanding the provisions of this Section 2.1(B), the parties agree that the Seller shall be under no obligation to sell any Future Receivable to Purchaser and Purchaser shall be under no obligation to purchase any Future Receivable from Seller.

(C)   Retained Assets. All assets of Seller not specifically listed and sold in Sections 2.1(A) and 2.1(B) of this Agreement shall remain the property of Seller.

(D)   Credit Loss.  Upon the purchase of the Assets, the risk of credit loss on the Receivables shall become Purchaser's.

(E)   The Closing. The Closing (the "Closing") of the transactions described in Section 2.1(A) contemplated by this Agreement shall take place on 29 October 2001 and at Moline, Illinois, or such other mutually acceptable location, commencing at such time and on such date as Seller and Purchaser mutually may determine (the " Initial Closing Date"). The sales of all Future Receivables shall occur automatically in accordance with the provisions of Section 2.1(B) of this Agreement without the delivery of the documents described in Section 2.1(F)(i) and 2.1(F)(ii), but with the delivery of the Purchase Price described in Section 2.2.(A). The parties agree that the sale of assets subsequent to the Initial Closing Date may occur through mutually satisfactory accounting entries which may be entries only on the Purchaser’s books and records and/or by other activities related to the acceptance of such assets by Purchaser as agreed upon by the parties. On a periodic basis, the parties may deliver a schedule which will summarize, in a form reasonably satisfactory to both Seller and Purchaser, the sales of Future Receivables which shall have occurred since the date of the last summary.

(F)   Deliveries at the Closing. At the Closing, (i) Seller shall deliver to Purchaser the various certificates, instruments and documents referred to in Section 8.1 below, (ii) Purchaser shall deliver to Seller the various certificates, instruments and documents referred to in Section 8.2, and (iii) Purchaser shall deliver to Seller the consideration specified in Section 2.2(A) of this Agreement.

(G)   Intent of the Parties. It is the expressed intent of the parties hereto that the conveyance of the Assets by Seller be, and be construed as, an absolute sale of such Assets by Seller to Purchaser, and not a pledge by Seller to Purchaser to secure a debt or other obligations of Seller. However, in the event that, notwithstanding the aforementioned intent of the parties, such conveyance is held or deemed not to be an absolute sale or is held or deemed to

6

be a pledge of security for a loan, then it is the express intent of the parties to this Agreement that this Agreement constitutes a "security agreement" under the UCC and applicable law, and Seller shall be deemed to have granted to Purchaser a first priority, continuing lien and security interest in all right, title and interest of Seller in, to and under the Assets sold pursuant to this Agreement, and all proceeds in respect thereof. Seller shall take such actions, as may be necessary to ensure that if this Agreement were deemed to create a security interest, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as such for the term of this Agreement.

In connection with such sales, Seller agrees to record and file, at its own expense, a financing statement on form UCC-1 or any other applicable form (and continuation statements when applicable) naming Seller as " debtor" and Purchaser as " secured party" thereon with respect to the Receivables now existing and hereafter created for the sale of chattel paper, general intangibles or accounts (as defined in Sections 9-105 and 9-106 of the UCC as in effect in any relevant state) meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect the sale and assignment of the Assets to Purchaser, and to deliver a file-stamped copy of such financing statements or other evidence of such filing to Purchaser on or prior to the Initial Closing Date, and (if any additional filing is necessary) the applicable Subsequent Closing Date provided that following the adoption of revised Article 9 of the UCC by any relevant State, such steps shall be taken toperfect each transfer and pledge as necessary to achieve perfection thereofunder such revised Article 9. In addition, Seller shall cause to be timely filedin the appropriate filing office any continuation statement necessary to perfectany sale of Assets to Purchaser. Purchaser shall be under no obligationwhatsoever to file such financing statement, or a continuation statement to suchfinancing statement, or to make any other filing under the UCC in connectionwith such sales.

In connection with such sales and contributions, Seller further agrees,at its own expense, on or prior to the Initial Closing Date, or the applicableSubsequent Closing Date in the case of Subsequent Assets to deliver to Purchasera computer file or microfiche or written list containing a true and completelist of all such Accounts sold. Such file or list, as supplemented from time totime to reflect Future Receivables, shall be marked as Exhibit 2.1(G) to thisAgreement and is hereby incorporated into and made a part of this Agreement.

2.2        Purchase Price.

(A)   Purchase Price Calculation. Subject to the adjustment described inSection 2.2(E) of this Agreement, the Purchase Price for the Purchased Assetswill be the principal balance of the Receivables as of the close of business onthe business day immediately preceding the Initial Closing Date plus all accruedbut unpaid interest, without premium or discount but net of all deferred taxesand net of all reserves established by Seller for uncollectible Purchased Assets,which reserve shall be reasonably acceptable to Purchaser as of the InitialClosing Date. Subject to the adjustment described in Section 2.2(E) of thisAgreement, for all Subsequent Assets, the Purchase Price shall equal the unpaidprincipal balance of the Future Receivables as of the relevant Subsequent

7

Closing Date plus all accrued but unpaid interest, without premium or discount.

(B)   Purchase Price Payment. Purchaser shall pay each Purchase Price orany other amounts payable under this Agreement by inter-company transactionsystem memos.

(C)   Closing Statement and Closing Electronic Record Reviews. Purchasershall be afforded thirty (30) days after actual receipt of the ClosingElectronic Record, Master Account List and Closing Statement in which to reviewthe same for accuracy and give Seller written notice of any adjustment to theClosing Statement ("Adjustment Notice"). The Adjustment Notice shall set forthany adjustment items on the Closing Statement and will also reflect any proposedpost-closing adjustments.

(D)   Right to Audit as to Purchase.

(1)   At any reasonable time, and from time to time duringSeller's regular business hours, up to ninety (90) days following theInitial Closing Date, at Purchaser's option, Purchaser may directly orthrough its designated representatives conduct a Verification Audit forthe purpose of verifying any or each amount and for compliance withthis Agreement, as Purchaser deems appropriate, on any ClosingStatement and to reconcile the amount to the appropriate Books andRecords.

(2)   If Purchaser conducts a Verification Audit and theVerification Audit results in a dispute or discrepancy between anyClosing Statement and the results of the Verification Audit, Purchaserwill provide to Seller a Verification Statement which sets forth eachamount on each Closing Statement where there is an adjustment, theamount of the adjustment, a general statement as to the basis forPurchaser's determination to the extent reasonably possible based onthe data examined by Purchaser in the Verification Audit, and theamount of the Audited Closing Payment which Purchaser believes shouldreplace the Audited Closing Payment provided by Seller. The partieswill use reasonable and good faith efforts to resolve each adjustmentwithin 30 days of the date of the Verification Statement. If theparties are unable to mutually agree in good faith as to the amount ofthe adjustment, no adjustment to the Purchase Price shall be made.

(3)   If Purchaser has any questions relating to the purchase ofa Future Receivable, Purchaser may request that it be allowed toconduct a Verification Audit of such purchase. If the Purchaserconducts a Verification Audit and the Verification Audit results in adispute or discrepancy between the amount paid by the Purchaser and theresults of the Verification Audit, Purchaser and Seller shall followthe procedures provided in Sections 2.2(D)(2) and 2.2(E) of thisAgreement to resolve the dispute or discrepancy.

(E)   Adjustment to Purchase Price Payment. If the final adjustmentsreflect that Seller owes Purchaser or Purchaser owes Seller a refund or payment,respectively, such payment shall be made, plus interest at the Federal FundsRate from the Closing Date to and including the date of payment. For the purpose

8

of calculating the Purchase Price only, if Purchaser fails to notify Seller ofits adjustment with such items within the Purchaser's review period as describedin Section 2.2(D) of this Agreement, the parties hereto will be deemed to haveagreed to the amount set forth in the Closing Statement prepared by Seller.

2.3        Assumption of Liabilities.

(A)   Assumption of Liabilities. Purchaser shall not assume anyliability, commitment, or obligation of Seller, whether absolute or contingent,known or unknown, of any nature, kind or description whatsoever, arising from orrelated to the Assets, including, without limitation, liabilities arising underor related to any contract, agreement or course of dealing between Seller andits lessors, vendors, servicers, consultants, suppliers, brokers or any otherparty or parties.

(B)   Pre-Closing Date Credit Balances; Administrative Costs. Selleragrees that it solely shall be responsible for any chargebacks, presentments,credit balances or incorrectly posted transactions with respect to Accounttransactions prior to the Closing Date, as appropriate. Seller further agreesthat it will be responsible for all expenses related to the Receivables andactivity thereon prior to the Closing Date, including, but not limited to, theprocessing and other fees of Seller.

(C)   Post-Closing Date Credit Balances and Administrative Costs.Purchaser agrees that subsequent to the Initial Closing Date it solely shall beresponsible for any chargebacks, presentments, credit balances or incorrectlyposted transactions with respect to Account transactions subsequent to theInitial Closing Date, as appropriate, including, but not limited to, theprocessing and other fees of Purchaser

(D)   Responsibility for Taxes. Seller shall pay any Tax, including anytransfer tax, sales or use tax arising from the transfer of the Assets, providedhowever that this sentence shall not apply with respect to income taxes(including, without limitation, branch profit taxes, minimum taxes and taxescomputed under alternative methods, at least one of which is based on netincome) and franchise taxes that are based upon income or any other Tax upon ormeasured by income or gross receipts imposed on any party (any excluded Taximposed on any party shall be the sole responsibility of the party upon whom thetax is imposed). Purchaser shall be liable for any Tax that relates to or arisesfrom the ownership or use of the Assets with respect to periods on and after therelevant Closing Date for such Assets and Seller shall be liable for any Taxthat relates to or arises from the ownership or use of the Assets with respectto periods prior to such Closing Date.

2.4        Post-Closing Adjustments. Following each Closing Date, Seller shall,with Purchaser's cooperation and assistance, determine and account to Purchaserfor any items or transactions that affect any of the Receivables purchased onsuch Closing Date, but that were posted, un-posted or unaccounted for on orbefore such Closing Date, including without limitation, cash, letters in processrelating to cash or other advances, access checks, payments in process,unidentified or unallocated items, or errors.

2.5        Additional Documentation. Seller further agrees that, if Purchaser

9

reasonably requests Seller to execute and deliver additional assignments totransfer such interests or to take such other or further actions as reasonablynecessary to achieve the purposes of this Agreement, Seller will takeappropriate actions. Seller's initial designee for these purposes will be theperson designated for notices under Section 10.2 hereof. If Purchaser requestssuch actions, Purchaser shall furnish Seller with copies of the proposedadditional documentation. Costs, fees and expenses of preparing, executing anddelivering such additional assignments shall be borne by the party incurringsuch cost, fee or expense. Such documents may include lost note affidavits.

2.6        True Sale. The parties intend the transactions described herein to bea true sale and an absolute and irrevocable (except as provided in Section7.1(F) hereof) transfer, sale and assignment of the Assets from Seller toPurchaser for all purposes.

ARTICLE III. POST-CLOSING ADMINISTRATION

3.1        Post-Closing Administration of Portfolio. Purchaser agrees thatsubsequent to the Closing or the purchase of a Future Receivable, it, or itsdesignee, shall administer the Portfolio.

3.2        Supplemental Interest Rate. The parties acknowledge that a portion ofthe Portfolio includes Supplemental Interest Receivables. Seller wishesPurchaser to continue to provide non-interest bearing financing to the Dealersunder the Receivables Agreement. To compensate Purchaser for the SupplementalInterest Receivables, Seller shall pay Purchaser a supplemental interest fee(the "Supplemental Interest Fee") on a monthly basis, which fee is intended bythe parties to approximate the normal, market rate of interest for likereceivables and shall be computed on terms mutually agreeable to the parties. Tocalculate the amount of the Supplemental Interest Fee, Purchaser shall deliverto Seller on the __ day of each month, a schedule (the "Supplemental InterestSchedule"), which may be in electronic form, listing the total amount ofSupplemental Interest Receivables and the total amount of interest, if any,payable on such Supplemental Interest Receivables. On the ___ day of each month,Seller shall pay Purchaser an amount equal to the Supplemental Interest Fee.Seller shall have the right to review, on a periodic basis, Purchaser'scalculations of the amount of the Supplemental Interest Receivables and if thereare disagreements as to the total amount of the Supplemental InterestReceivables or as to the appropriate calculation of the Supplemental Interest Fee, the parties agree to work together in good faith to resolve these differences and adjust, if necessary, the amount of the Supplemental Interest Fee.

ARTICLE IV. SELLER'S REPRESENTATIONS AND WARRANTIES

Seller hereby represents and warrants to Purchaser that the statementsmade in this Section 4 are correct and complete as of the date of this Agreementand will be true, correct and complete on the Initial Closing Date and eachSubsequent Closing Date (as though made then and as though the Initial ClosingDate or Subsequent Closing Date, as the case may be, were substituted for thedate of this Agreement throughout this Section 4).

4.1        Due Organization.  Seller is a Delaware corporation, duly organized,validly existing and in good standing, with its principal office located at One

10

John Deere Road, Moline, Illinois 61265.

4.2        Authorization and Binding Effect. Seller has full power and authority,corporate and otherwise, to enter into this Agreement. Execution, delivery andconsummation of this Agreement by Seller have been duly authorized by allnecessary corporate action and do not require any consent or approval of anyperson that has not been obtained. This Agreement constitutes the valid andbinding obligation of Seller, enforceable against Seller in accordance with theterms and conditions hereof.

4.3        No Breach of Other Agreements. The execution, delivery, and performanceof this Agreement will not violate, be in conflict with, or constitute a defaultunder (a) Seller's Certificate of Incorporation, by-laws, or other documents ofcorporate self-governance; (b) any agreement, instrument or other obligation towhich Seller is a party or by which Seller is bound; or (c) any Requirement ofLaw of any governmental authority whatsoever.

4.4        Books and Records Complete. With respect to each Obligor: (i) the Booksand Records are true and complete in all material respects, and (ii) allmaterial information relating to the credit, charges, fees, payment history,customer inquiries, information about the Obligor and regulatory correspondencewhich is known and available to Seller relating to such Obligor's Receivables iscontained in the Books and Records.

4.5        No Consent. No consent of any Person and no consent, license, permit orapproval or authorization or exemption by notice or report, or registration,filing or declaration with any governmental authority having jurisdiction overSeller is required (other than those previously obtained and delivered toPurchaser) in connection with the execution or delivery by Seller of thisAgreement and the consummation of the series of transactions contemplatedhereby, or the performance by Seller of its duties and obligations hereunder.

4.6        Claims; Litigation and Audits. There are no administrative or courtactions, suits or proceedings of any kind now pending, or, to Seller'sknowledge, threatened that, if adversely decided, would have a Material AdverseEffect. There are no outstanding judgments, orders or decisions of anyarbitrator or governmental authority with jurisdiction over Seller which couldadversely affect any of the Receivables. There were no audits, investigations,inspection or any other reviews or inquiries of any governmental authority orinternal auditing group concerning Seller's administration of the Portfolioconducted during the current calendar year or the four (4) calendar yearsimmediately preceding the date of this Agreement which revealed problems orissues with regard to the Receivables which would have a Material AdverseEffect.

4.7        Tax Returns and Liabilities. Seller has not, by conduct or omission,become subject to any federal, state, county, local or other tax liens, howeverthe same may have arisen, that would attach to the Assets but, to the extent anysuch sum(s) arise, Seller agrees to promptly pay such sum(s).

4.8        Disclosure. No employee or representative of Seller or its agentsintentionally made material untrue or misleading assertion in any statementprovided by such Person in connection with the transactions contemplated hereby,

11

and the Closing Electronic Records provided by Seller to Purchaser were and willbe complete and accurate reflections of the Receivables as of the dates thereof.

4.9        Undisclosed Liability. Except for any credit balances on Receivables orFuture Receivables and unfunded commitments to extend future credit to Dealers,Seller has no material obligations, commitments or any other liabilities,absolute or contingent, known or unknown, relating to the Assets or theReceivables which will affect the Assets after the Closing Date. No Account norsuch Receivable is subject to any right of set-off, recission, counterclaim ordefense arising out of any action or failure to act by Seller and to Seller'sknowledge, no right of recission, set-off, counterclaim or defense due to an actor a failure to act of the Seller has been asserted with respect thereto.

ARTICLE V. ACCOUNT SPECIFIC REPRESENTATIONS AND WARRANTIES

With respect to each Account and each Receivable, Seller herebyrepresents and warrants to Purchaser that the statements made in this Section 5are correct and complete as of the Initial Closing Date with respect to theReceivables.

5.1        Enforceability; Ownership. Each Account represents the legal, valid andbinding obligation of the Obligors thereunder and is enforceable against suchObligors in accordance with its terms, except as the same may be limited bybankruptcy, insolvency, moratorium or other laws or regulations, in effect nowor in the future, that affect the enforcement of creditors' rights generally.Seller has full legal title to the Accounts and has not assigned any right,title or interest in such Accounts to any other Person.

5.2        Documentation. Each Obligor's obligations to Seller in respect of suchReceivable are subject to a Receivable Agreement and, if applicable, a guarantybetween such Obligor and Seller which is enforceable in accordance with itsterms and has not been amended or altered other than in accordance with Seller'sPolicies and Procedures. All such agreements are freely assignable by Seller toPurchaser in accordance with the terms of such agreements, without the approvalor consent of any Obligor or other person to effectuate the valid assignment ofthe same in favor of Purchaser and are governed by and construed in accordancewith the laws of the State of Illinois. Seller has provided Purchaser withcopies of the forms of agreement used to document the Account and Receivable.

5.3        Set-off; Defenses.  No Account nor such Receivable is the subject ofpending or, to the Knowledge of Seller, threatened litigation. Seller hasadministered all Accounts in all material respects in accordance with allRequirements of Law and Seller's Policies and Procedures.

5.4        Collateral. With respect to the Receivables purchased on the InitialClosing Date only, Seller has filed all financing statements in each appropriateoffice and has sent all notifications that are legally required to grant Sellera first priority perfected security interest in the Collateral, subject to anyproperly perfected purchase money security interests which may have priorityover Seller's security interest in the Collateral, as provided by the relevantUCC in effect as of the date of this Agreement.

5.5        Lien. No Account nor Receivable is subject to any Lien, interest or

12

right of any person other than Seller, or to any bankruptcy proceeding, oraltered or reduced payment program.

5.6        Ordinary Course of Business. Seller has generated each Receivable andwill generate each Future Receivable, in the ordinary course of its businesspursuant to and substantially in accordance with Seller's Policies andProcedures.

5.7        Servicing of Receivables. All payments or monies received by Seller orits affiliated or third party contractors with respect to the payment of anyReceivable or Future Receivable have been properly applied. Each Account hasbeen maintained and serviced by Seller in accordance with Seller's Policies andProcedures as well as all Requirements of Law.

ARTICLE VI. PURCHASER'S REPRESENTATIONS AND WARRANTIES

Purchaser represents and warrants to Seller on each Closing Date (as though madethen and as though such Closing Date were substituted for the date of thisAgreement throughout Section 6) as follows:

6.1        Due Organization.  Purchaser is a Nevada corporation, duly organized,validly existing and in good standing, with its registered office located at OneEast First Street, Reno, Nevada.

6.2        Authorization and Binding Effect. Purchaser has full power andauthority, corporate and otherwise, to enter into this Agreement. Execution,delivery and consummation of this Agreement by Purchaser have been dulyauthorized by all necessary corporate action and do not require any consent orapproval of any Person that has not been obtained. This Agreement constitutesthe valid and binding obligation of Purchaser, enforceable against Purchaser inaccordance with the terms and conditions hereof.

6.3        No Breach of Other Agreements. The execution, delivery, and performanceof this Agreement will not violate, be in conflict with, or constitute a defaultunder (a) Purchaser's certificate of incorporation, by-laws, or other documentsof corporate self-governance; (b) any agreement, instrument or other obligationto which Purchaser is a party or by which Purchaser is bound; or (c) anyRequirement of Law of any governmental authority whatsoever.

6.4        No Consents. No consent of any Person and no consent, license, permit,or approval, or authorization, or exemption by notice, or report, orregistration, filing, or declaration with, any governmental authority isrequired (other than those previously obtained and delivered to Seller) inconnection with the execution or delivery by Purchaser of this Agreement and theconsummation of the series of transactions contemplated hereby, or theperformance by Purchaser of its duties and obligations hereunder.

6.5        Claims and Litigation. There are no administrative or court actions,suits or proceedings of any kind now pending, and, to Purchaser's knowledge, nosuch actions, suits or proceedings are threatened, that if adversely decidedwould have a Material Adverse Effect on Purchaser's ability to consummate thetransaction set forth in this Agreement. There are no pending or outstandingadministrative or court actions, suits or proceedings or, outstanding judgments,

13

orders, or decisions of any arbitrator or governmental authority withjurisdiction over Purchaser which could adversely affect Purchaser's ability toconsummate the transactions set forth in this Agreement.

ARTICLE VII. COVENANTS

7.1        Affirmative Covenants of Seller.

(A)   Purchaser Examination of Assets.  Upon reasonable advance notice,Seller shall give Purchaser and its representatives full access during Seller'snormal business hours to examine the Assets; provided that Seller must approve the number of representatives and the work station locations so as not to disrupt or interfere with Seller's other businesses with such approval not to be unreasonably withheld.

(B)   Cooperation. Following the Closing, Seller agrees to provide timelyassistance to Purchaser which shall include, without limitation, obtainingtransaction records, the production of documents, and the interpretation of anyrelevant collection comments, to resolve any dispute or claim of any Dealer orother Obligor relating to all pre-Closing transactions.

(C)   Delivery of Files. Notwithstanding the sale of the Files to Purchaser, the parties agree that at Purchaser's direction, Seller may maintainphysical possession of the Files.

(D)   Seller Advances on Receivables. Seller has generated Receivablesonly in accordance with Seller's Policies and Procedures.

(E)   Tax Reporting Obligations. Seller hereby agrees to perform all itsobligations with respect to federal and/or state Tax reporting relating to orarising out of the Receivables, the Collateral and/or the Books and Recordssold, transferred and assigned pursuant to this Agreement for the portion of theyear 2001 that Seller owned the Receivables and for prior years. Purchaser shallfile such reporting forms relating to the period of the year 2001 for whichPurchaser owned the Receivables and thereafter while Purchaser continues to ownsuch Receivables.

(F)   Remedies for Breach of Account Specific Representations andWarranties. All representations and warranties shall survive for five years fromthe relevant Closing Date, except for the representations and warrantiesdescribed in Sections 4.1, 4.2, 6.1 and 6.2 that shall survive indefinitely. Ifany of the representations and warranties contained in Section 5 is not true andcorrect as of the date specified therein and Purchaser incurs a financial lossdue to such breach of representation and warranty, Purchaser shall, withinthirty days of such loss, notify Seller of the occurrence of such a loss. Withinthirty (30) days of the receipt of such notice, Seller shall repurchase theReceivable or Future Receivable with respect to which there has been such abreach of representation and warranty and on which a loss has been incurred foran amount equal to the Repurchase Price. If the parties disagree regarding theexistence of the breach of representation and warranty or the amount of theRepurchase Price, the parties agree to consult to determine in good faithwhether there has been a breach of representation or warranty and the amount ofthe Repurchase Price. Upon the payment of the Repurchase Price, Seller shall

14

prepare, with the cooperation and assistance of Purchaser, and Purchaser willexecute and deliver appropriate transfer documentation to return a repurchasedAccount to Seller.

7.2        Mutual Covenants.

(A)   Efforts to Comply. Subject to the terms and conditions hereinprovided, each party shall cooperate fully with the other and shall usecommercially reasonable best efforts to take all action necessary or appropriatehereunder and under any Requirements of Law to consummate the series oftransactions contemplated by this Agreement. Each party further agrees to useits commercially reasonable best efforts for the consummation of the series oftransactions contemplated by this Agreement.

(B)   No Material Omissions. Between the date hereof and Closing, eachparty shall promptly advise the other in writing of any fact which, if existingor known at the date hereof, would have been required to be set forth ordisclosed in or pursuant to this Agreement or of any fact which, if existing orknown at the date hereof, would have made any of such party's representationscontained herein untrue.

ARTICLE VIII. CONDITIONS PRECEDENT TO CLOSING

8.1        Seller. On the Initial Closing Date (unless otherwise stated or unless otherwise waived by Purchaser), Seller shall deliver or cause to be delivered toPurchaser the following:

(A)   Written evidence of transfer to convey to Purchaser all of Seller'srights, title and interest in and good and marketable title to the PurchasedAssets, free and clear of any and all Liens in the form attached hereto asExhibit 8.1(A), to be delivered by Seller and approved by Purchaser on theInitial Closing Date;

(B)   A certificate, dated as of the Initial Closing Date, signed by theSecretary or an Assistant Secretary of Seller, certifying the incumbency of theofficers or other representatives of Seller signing this Agreement on behalf ofSeller and the related documents and instruments to be delivered in connectionherewith to be delivered by Seller and approved by Purchaser;

(C)   Evidence, in form and substance satisfactory to Purchaser, that theexecution of this Agreement by Seller and the performance of all of Seller'sobligations hereunder have been duly authorized by the Seller;

(D)   The Closing Statement;

(E)   The Master Account List;

(F)   All written documents, instruments and manuals which describeSeller's Policies and Procedures; and

(G)   Such additional instruments, documents or certificates as may bereasonably requested by Purchaser and necessary for the consummation of theclosing on the Initial Closing Date and the transactions contemplated hereby.

15

8.2        Purchaser. On each Closing Date (unless otherwise stated or unlessotherwise waived by Seller), Purchaser shall deliver or cause to be delivered toSeller the following:

(A)   The Purchase Price;

(B)   With respect to the Initial Closing Date, a certificate, dated asof the Closing Date, signed by the Secretary or an Assistant Secretary ofPurchaser, certifying the incumbency of the officers or other representatives ofPurchaser signing this Agreement on behalf of Purchaser and the relateddocuments and instruments to be delivered in connection herewith, to bedelivered by Purchaser and approved by Seller; and

(C)   Evidence, in form and substance satisfactory to Seller, that theexecution of this Agreement by Purchaser and the performance of all ofPurchaser's obligations hereunder have been duly authorized by the Purchaser.

ARTICLE IX. INDEMNIFICATION

9.1        Seller's Indemnification of Purchaser. In addition to Seller'srepurchase obligations described in Section 7.1(F), but subject to the durationof its representations and warranties provided in Section 7.1 (F), Seller shallindemnify, defend and hold Purchaser, its employees, officers, directors andagents harmless from Adverse Consequences arising out of:

(A)   The extension of credit to the Dealers and other Obligors made onor prior to the close of business on the Initial Closing Date other than incompliance with Requirements of Law (whether known or unknown, contingent ormatured), as appropriate;

(B)   The maintenance of micrographic records by Seller and thecooperation of Seller with Purchaser for delivering documents for which nowritten or electronic image copies have been delivered to Purchaser;

(C)   Any material breach of any representations, warranties or covenantsof Seller contained herein or in any document or instrument delivered by Seller;and

(D)   Seller's intentional misconduct or negligence relating to theperformance of Seller's obligations hereunder.

9.2        Limitations on Amount of Seller's Indemnification of Purchaser. Exceptfor the repurchase obligations described in Section 7.1(F) which shall not besubject to the limitations contained in this Section 9.2, Seller's totalobligations pursuant to Section 9 of this Agreement shall not exceed theaggregate Purchase Price.

9.3        Purchaser's Indemnification of Seller. Notwithstanding any provision ofSection 2.3 hereof and subject to the duration of its representations andwarranties and the maximum indemnity provided in Section 9.4, Purchaser agreesto indemnify, defend and hold harmless Seller, its officers, directors,employees and agents from any Adverse Consequences, by reason of or resulting

16

from or arising out of any material breach of any representation, warranty orcovenant of Purchaser contained herein or in any document or instrumentdelivered by Purchaser hereunder or due to the ongoing administration of thePortfolio by Purchaser subsequent to the close of business on the InitialClosing Date other than in compliance with the Requirements of Law with respectto its Receivables (whether known or unknown, contingent or mature).

9.4        Limitation on Amount of Purchaser's Indemnification. Purchaser's totalobligations pursuant to Section 9 of this Agreement shall not exceed thePurchase Price.

9.5        Manner of Handling Claims. If either party obtains knowledge of: (a)facts that would give rise to a right of indemnification for that party; or (b)commencement of an action that may require indemnification, the IndemnifiedParty shall give written notice to the Indemnifying Party as promptly aspracticable after its receipt of that knowledge. Following receipt of suchnotice, the Indemnifying Party shall be entitled to participate in the defenseof such claim, and, upon notice delivered promptly to the Indemnified Party, toassume the defense thereof, with counsel reasonably satisfactory to theIndemnified Party. Within a reasonable period following the assumption of suchdefense by the Indemnifying Party, the Indemnified Party shall be permitted toparticipate in the defense of such claim and may retain additional counsel ofits choice at its own expense. The Indemnified Party shall not settle any claimor action the defense of which has been assumed by the Indemnifying Partywithout the consent of the Indemnifying Party. If, however, the defendants insuch action include both parties and the Indemnified Party shall have concludedthat there may be legal defenses available to it that are different from oradditional to those available to the Indemnifying Party, the Indemnified Partyshall be entitled to separate counsel, reasonably acceptable to the IndemnifyingParty, which shall be paid for by the Indemnifying Party, provided such legaldefenses are, in fact, rendered in favor of such party by the court or concededby the plaintiff-third party. The parties hereto shall cooperate with oneanother in responding to and defending against any third party claims givingrise to indemnification rights hereunder.

9.6        Subrogation. The Indemnifying Party shall be subrogated to any claims orrights of the Indemnified Party as against any other persons with respect to anyamounts paid by the Indemnifying Party under this Section. The Indemnified Partyshall cooperate with the Indemnifying Party, at the Indemnifying Party'sexpense, in the Indemnifying Party's assertion of any such claim.

9.7        Survival. Any rights to indemnification with respect to any claim orcontroversy as to which the process described in Section 9.5 has been initiatedby tender of formal notice, or any third party claim, delivered in writing priorto the expiration of the limitations periods set forth herein, shall surviveuntil such claim or controversy is finally resolved.

9.8        Mitigation of Damages. Seller and Purchaser further mutually agree toexercise best efforts and prudent judgment to minimize and mitigate the exposurefor loss, damage or claims against each other, as well as claims or disputesarising from third parties. Each shall inform the other as promptly as possibleof any alleged claim, adjustment or dispute to afford as early a determinationas possible of the merits, extent and potential monetary value or significance

17

of the event or claim.

ARTICLE X. GENERAL PROVISIONS

10.1      Confidentiality. The parties shall keep confidential and cause theirrespective officers, directors, employees and agents to keep confidential, anyand all information obtained from the other party concerning the assets,properties and business of the other party, and shall not use such informationfor any purpose other than those contemplated by this Agreement; provided,however, that neither party shall be subject to the obligations set forth in thepreceding sentence with respect to any such information provided by the otherparty which either: (a) was in the receiving party's possession or in the publicdomain at the time of disclosure, or subsequently enters the public domainthrough no act or failure to act on the part of the receiving party; (b) islawfully obtained by the receiving party from a third party; or (c) is requiredby law or regulatory authority. Public announcements regarding the series oftransactions contemplated herein shall be made only with the prior consent ofthe parties hereto, which consent shall not be unreasonably withheld. Thissection shall survive the Initial Closing for a period of two (2) yearsfollowing the Closing Date.

10.2      Notices. Except as otherwise expressly set forth herein, any notice,payment, demand or any other communication required or permitted to be givenhereunder shall be in writing and delivered via overnight courier, facsimile ordelivered by hand to the applicable party or parties at the address indicatedbelow:

If to Seller:

DEERE & COMPANY

One John Deere Place

Moline, Illinois 61265

Attention: Treasurer

Telecopier: 309-749-0006

If to Purchaser:

DEERE CAPITAL, INC.

One East First Street, Suite 600

Reno, Nevada 89501

Attention: Manager

Telecopier: 775-786-4145

With a copy to:

DEERE CAPITAL, INC.

c/o Deere Credit Services, Inc.

6400 NW 86/th/ Street

Johnston, Iowa 50131-6600

Attention: Chief Counsel

Telecopier: (515)267-4256

or as to each party at such other address as may be designated from time to time

18

by such party or parties by like notice to the other parties, complying withthis Section. All such notices, payments, demands or other communications shallbe deemed validly given and legally effective when received.

10.3      Severability. If any term or condition of this Agreement should be heldinvalid by a court, arbitrator or tribunal of competent jurisdiction in anyrespect such invalidity shall not affect the validity of any other term orcondition hereof. If any term or condition of this Agreement should be held tobe unreasonable as to time, scope or otherwise by such a court, arbitrator ortribunal, it shall be construed by limiting or reducing it to a minimum extentso as to be enforceable under then applicable law. The parties heretoacknowledge that they would have executed this Agreement with any such invalidterm or condition excluded or with any such unreasonable term or condition solimited or reduced.

10.4      Entire Agreement; Amendments. This Agreement and its exhibits and theagreements it incorporates by reference constitute the entire agreement of theparties with regard to the specific subject matter hereof and supersede allprior written and/or oral understandings between the parties. This Agreement maynot be amended except pursuant to a writing signed by both parties.

10.5      Waiver. Any waiver by either party of a breach of any provision of thisAgreement shall not operate as or be construed to be a waiver of any otherbreach of such provision or of any breach of any other provision of thisAgreement. Any waiver must be in writing and signed by the party to be chargedtherewith.

10.6      Binding Effect. Neither party shall assign this Agreement without theprior written consent of the other and any attempted assignment without saidconsent shall be null, void and without any effect whatsoever; provided,however, that Purchaser may assign any or all of its rights hereunder (ordelegate any or all of its obligations hereunder) to any affiliate or subsidiaryof Purchaser, and Seller may assign any or all of its rights to any affiliate orsubsidiary of Seller. In such latter event, Purchaser and Seller agree to givenotice to the other of its assignment to its affiliate, subsidiary or parent.

10.7      Exhibits and Schedules. The exhibits attached hereto or referencedherein and each certificate, schedule, list, summary or other document providedor delivered pursuant to this Agreement or in connection with the transactionscontemplated hereby are incorporated herein by this reference and made a parthereof.

10.8      No Third Party Beneficiaries. This Agreement is for the sole andexclusive benefit of the parties hereto. Nothing in this Agreement shall beconstrued to grant to any person other than the parties hereto, and theirrespective successors and permitted assigns, any right, remedy or claim under orin respect of this Agreement or any provision hereof

10.9      Further Assurances.  The parties hereto hereby agree to do such furtheracts and things, and to execute and deliver such additional conveyances,assignments, agreements and instruments, as either may at any time reasonably request in order to better assure and confirm unto each party their respective rights, powers and remedies conferred hereunder.

19

10.10      Counterparts. Provided that both parties hereto execute a copy of thisAgreement, this Agreement may be executed in counterparts, each of which shallbe deemed an original and all of which together shall constitute one and thesame instrument.

10.11      Headings. The headings contained herein are included solely for ease ofreference and in no way shall limit, expand or otherwise affect either thesubstance or construction of the terms and conditions of this Agreement or theintent of the parties hereto.

10.12      Non-Merger/Survival. Each and every covenant, representation, warrantyand obligation set forth herein made by Purchaser or Seller and any indemnityshall survive the execution and delivery of the documents at Closing, asprovided in this Agreement, and this Agreement shall not merge into suchdocuments, but instead shall be independently enforceable.

10.13      Expenses. All costs and expenses arising from the sale of the Assetsand in connection with the series of transactions contemplated hereby, and alllevies or other charges of any nature, kind or description imposed by anygovernmental authority, which in either case are not otherwise provided forpursuant to the terms and provisions of this Agreement, shall be borne by theparty incurring such expense.

20

EX-10.2

EXHIBIT 10.2

SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is entered into as of this 21st day of February 2020, by and between DEERE CAPITAL, INC., a Nevada corporation with its principal office located in Reno, Nevada (“Purchaser”), and JOHN DEERE CONSTRUCTION & FORESTRY COMPANY, a Delaware corporation with its principal office located in Moline, Illinois (“Seller”).

RECITALS

WHEREAS, Seller and Purchaser previously entered into that certain Asset Purchase Agreement dated as of October 29, 2001, whereby Seller sold certain current and future assets to Purchaser, as amended by that certain First Amendment to Asset Purchase Agreement dated as of December 1, 2009 (the “Agreement”); and

WHEREAS, Seller and Purchaser wish to modify the scope of the Agreement to exclude certain U.S. wholesale receivables.

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged by the parties hereto, the parties agree as follows:

1.          Amendments to Agreement.  The definition of “Receivables” set forth in Article I of the Agreement is, effective November 4, 2019, amended and restated in its entirety with the following:

“"Receivables" means, as of any date, each and all of Seller's outstanding accounts receivable or notes receivable as of such date with a United States Dealer as an account debtor or notemaker, other than those accounts receivable or notes receivable that have been identified and/or sold by Seller to Deere Credit, Inc. pursuant to that certain Asset Purchase Agreement dated as of November 4, 2019 by and between Seller and Deere Credit, Inc.”

2.          Reference to and Effect Upon Agreement.  Except as expressly amended by this Amendment, the terms and conditions of the Agreement remain in full force and effect.  For ease of reference, a conformed copy of the Agreement incorporating all amendments to date is attached hereto as Exhibit A. This Amendment constitutes the entire understanding of the parties hereto and supersedes all prior understandings of the parties relating to the matters discussed herein.  This Amendment may only be amended or modified by the terms of a written instrument signed by all parties hereto.

3.          Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

4.          Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument.

[signature page follows]

1

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the day and year first written above.

JOHN DEERE CONSTRUCTION
& FORESTRY COMPANY		DEERE CAPITAL, INC.
By:	/s/ James M. Field	By:	/s/ Rajesh Kalathur
Name:	James M. Field	Name:	Rajesh Kalathur
Title:	President	Title:	President

2

Exhibit A

This document is a composite conformed copy of the Asset Purchase Agreement dated October 29, 2001 as amended through the Second Amendment as of February 21, 2020.

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of October 29, 2001 between DEERE CAPITAL, INC. a Nevada corporation with its principal office located in

Reno, Nevada ("Purchaser"), and JOHN DEERE CONSTRUCTION & FORESTRY COMPANY, a Delaware corporation located in Moline, Illinois ("Seller").

RECITALS

A.          Seller is in the business of manufacturing and selling equipment to Dealers and in the operation of this business is the owner of certain Receivables.

B.          Seller expects, in continuing to conduct its business, to generate Future Receivables.

C.          Seller has invited Purchaser to purchase the Receivables and Future Receivables and Purchaser has agreed to purchase the Receivables and Future Receivables under the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as

follows:

ARTICLE I. DEFINITIONS

1.          Certain Definitions.  The following capitalized terms shall have the meanings ascribed to them below:

"Account" means the total amount of Receivables or Future Receivables that are currently owed, or may in the future be owed, to Seller by any particular Dealer or other Obligor, together with the obligation to make future advances to such Dealer or other Obligor.

"Adverse Consequences" means any claim, damage, loss, cost or expense (including, attorneys' fees and expenses) or any other liability of every nature, kind and description whatsoever including, without limitation, acts or liabilities to third parties incurred or suffered by an Indemnified Party, but excluding lost profits, by reason of or resulting from or arising out of any of the occurrences described in Article IX of this Agreement.

"Agreement" means this Asset Purchase Agreement, together with all schedules, exhibits, supplements and documents that are attached hereto or incorporated by reference.

"Assets" means, collectively, the Purchased Assets and the Subsequent Assets.

1

"Audited Closing Payment" means the payment adjustment which shall be made in response to the Verification Audit.

"Books and Records" means (a) all information, in whatever form maintained (and if maintained electronically, then with the relevant electronic file layout), about the Accounts, the Receivables, the Files and the Dealers or other Obligors contained in the Seller's Systems, excluding Seller's proprietary or confidential management information, and, if requested, reasonable explanations of any data field which is derived from a calculation; (b) the Files and the alphabetical and numerical indices necessary to access such microfilmed or microfiche documents; and (c) all collection and other customer service notes and other historical information with respect to the Receivables and the Dealers or other Obligors.

"Closed Account" means any Account that has been terminated by either the Dealer or Seller for any reason, whether or not such Account has an outstanding principal balance.

"Closing" has the meaning provided in Section 2.1(E) of this Agreement.

"Closing Audit" means the audit of a Closing Statement including all reports, statements and documents referred to therein or related thereto,conducted pursuant to Section 2.2(D) hereof.

"Closing Date" means (i) the Initial Closing Date and (ii) each Subsequent Closing Date.

"Closing Electronic Record" means the record provided by Seller and delivered to Purchaser as part of a Closing that reflects the Receivables as of the close of business on the day prior to the Closing Date.

"Closing Statement" means a statement, in the form set forth in Exhibit 2.2 (C) attached hereto, which sets forth the calculation of the relevant Purchase Price.

"Collateral" has the meaning provided in Section 2.1(A) of this Agreement.

"Dealer" means any Person who has currently (i) an effective appointment as a John Deere Company Authorized Construction and Forestry Dealer and/or (ii) any other appointment to sell goods which are manufactured or distributed by Seller and whose name appears on the Master Account List.

"Federal Funds Rate" means the Federal Funds Rate, as published in the Money Rates section of The Wall Street Journal for overnight deposits on the business day prior to the date any Payment is made, as quoted by Purchaser or Seller, as the case may be, which quotation shall be deemed correct in the absence of manifest error.

"File" means, with respect to each Account, the original or copy and any microfilm, microfiche, electronic or other copy of all Account information, statements, documents and correspondence from or to the related Dealer or other

2

Obligor or which otherwise is about the Receivables in such Account, all to the extent included within the definition of Books and Records.

"Future Receivables" means any of Seller's Receivables which are generated on or after the Initial Closing Date.

"Indemnified Party" means a party to whom an indemnification payment, as described in Article IX, may be due and owing.

"Indemnifying Party" means a party from whom an indemnification payment, as described in Article IX, may be due and owing.

"Initial Closing Date" means the date specified in Section 2.1(E).

"Knowledge" means the best knowledge, information and belief upon due inquiry.

"Lien" means a security interest or lien of any kind affecting any or all of the Accounts, specific Receivables or any Collateral.

"Master Account List" means the list provided by Seller and delivered to Purchaser on or before the Initial Closing Date that identifies every Account being sold to Purchaser as of the close of business on the business day immediately preceding the Initial Closing Date, together with the balances contained in such Account as of such date.

"Material Adverse Effect" means the material and adverse change in: (a) the ownership or enforceability of the Assets, or any of them; (b) the ability of Seller or Purchaser to perform its respective obligations under this Agreement or the ability of Seller or Purchaser to consummate any of the transactions contemplated hereby.

"Obligor" means, and shall only include with respect to any Account, any Person obligated to make payments with respect to such Account, including any guarantor thereof.

"Payments" means the Purchase Price paid on the Closing Date or upon any future purchase of Receivables and any payments pursuant to Section 2.2 (E).

"Person" means any legal person, including, without limitation, any natural person, corporation, partnership, joint venture, association, limited liability company, joint-stock company, business trust, unincorporated organization, governmental entity or any other entity of every nature, kind and description.

"Portfolio" means the Receivables, whether such Receivables have been generated prior to or subsequent to this Agreement.

"Purchased Assets" means those assets identified in Section 2.1(A)(i) through (vii).

"Purchase Price" with respect to the Purchased Assets or the Subsequent Assets, means the purchase price determined pursuant to the terms and provisions

3

of this Agreement.

"Receivables" means, as of any date, each and all of Seller's outstanding accounts receivable or notes receivable as of such date with a United States Dealer as an account debtor or notemaker, other than those accounts receivable or notes receivable that have been identified and/or sold by Seller to Deere Credit, Inc. pursuant to that certain Asset Purchase Agreement dated as of November 4, 2019 by and among Seller, Purchaser, and Deere Credit, Inc.

"Receivable Agreement(s)" means the promissory notes, credit agreements, guaranties, applications, security agreements and other agreements entered into by and between Seller and Dealer or other Obligor or otherwise evidencing or governing the obligations of such Dealer or other Obligor under the Account. The Receivable Agreements exist in microfilm or microfiche form derived from signed paper Receivable Agreements identified by Account codes on microfiche or microfilm rolls.

"Repurchase Price" means, with respect to any Receivable, a sum equal to (a) the unpaid principal balance of the Receivable at the time of repurchase, plus (b) any billed and unpaid fees for such Receivable as of the date of repurchase by Seller, plus (c) interest from the last payment of interest on the Receivable to the date of such repurchase at the applicable interest rate charged on the Receivable as of the date of repurchase.

"Requirements of Law" with respect to any Person, means any certificate of incorporation, by-laws, agreements, or other organizational or governing documents of such Person, and any law, ordinance, statute, treaty, rule, judgment, regulation or determination or finding of any arbitrator or governmental authority applicable to or binding upon such Person or to which such Person is subject, whether federal, state, county, local or otherwise, (including, without limitation, usury or other credit laws, the Fair Debt Collection Practices Act, the Federal Equal Credit Opportunity Act, the Fair Credit Reporting Act, Regulation B of the Board of Governors of the Federal Reserve System, and any licensing requirement.)

"Seller's Policies and Procedures" means the standard methods which Seller uses to administer on an ongoing basis the Accounts and Receivables, whether the methods are written or oral.

"Seller's System" means that or those systems, whether proprietary or commercial, used by Seller, or any agent thereof in the origination and servicing of the Receivables or payments thereon, including without limitation, any such system as Seller uses in collection of the Receivables, to capture checks and payments for processing or to track Receivable Agreements for Seller's Receivables.

"Subsequent Assets" means those assets identified in Section 2.1(B)(i) through (vi).

"Subsequent Closing Date" means any date on which Subsequent Assets are purchased after the Initial Closing Date.

"Supplemental Interest Fee" has the meaning specified in Section 3.2 of

4

this Agreement.

"Supplemental Interest Schedule" has the meaning provided to it in Section 3.2 of this Agreement.

"Supplemental Interest Receivables" means those Receivables which bear no interest rate.

"Tax" means any federal, state or local tax of the United States or of any state, including without limitation any income tax, franchise tax, real or personal property tax, employment tax, sales and use tax, value tax and any interest and penalties thereon including, without limitation, those levied on any failure to make appropriate withholdings and fines, penalties, other charges resulting from the failure to pay such amounts when due, but not including any tax that is levied on this transaction or chargeable on this Agreement or any documents or instruments required to be executed hereunder or pursuant hereto.

"UCC" means the Uniform Commercial Code.

"Verification Audit" means a post-Closing Date audit as described in Section 2.2(D).

"Verification Statement" means a statement by Purchaser of any perceived discrepancy or adjustment after a Verification Audit.

ARTICLE II.  PURCHASE OF PORTFOLIO; ASSUMPTION OF LIABILITIES

2.1         Purchase of Portfolio; Closing.

(A)         Purchased Assets. On the Initial Closing Date and subject to all of the terms and conditions set forth herein, Seller shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and receive from Seller subject to the terms of this Agreement, all of Seller's right, title and interest in and to the following: (i) all Receivables in the Accounts as of the close of business on the business day immediately preceding the Initial Closing Date; (ii) all rights to payment of interest, charges and fees on such Receivables; (iii) all rights to any and all collateral (the "Collateral") which secures the Dealer's or any other Obligor's obligations to Seller pertaining to such Receivables; (iv) all of the rights of Seller provided by any Receivable Agreements (but only to the extent that the rights of Seller provided by any Receivable Agreements relate to Receivables), guaranties and promissory notes (in each case, to the extent they apply to such Receivables), (v) all security agreements, financing statements or other instruments which relate to the Collateral (but only to the extent that such security agreements, financing statements or other instruments relate to the Receivables being purchased by Purchaser on the Initial Closing Date); (vi) the Files and (vii) the Books and Records.

(B)         Subsequent Assets. To the extent that the parties wish to engage in sales of Future Receivables subsequent to the Initial Closing Date, then immediately upon the generation of any such Future Receivables, Seller may sell, assign, transfer and convey to Purchaser, and Purchaser may purchase and receive from Seller subject to the terms of this Agreement, all of Seller's right, title

5

and interest in and to the following: (i) all such Future Receivables; (ii) all rights to payment of interest, charges and fees on such Future Receivables; (iii) all rights to the Collateral which secures the Dealer's or any other Obligor's obligations to Seller pertaining to such Future Receivables; (iv) all of the rights of Seller provided by any Receivable Agreements (but only to the extent that the rights of Seller provided by any Receivable Agreements relate to such Future Receivables ), guaranties and promissory notes (in each case, to the extent they apply to such Receivables ); (v) all security agreements, financing statements or other instruments which relate to the Collateral (but only to the extent that such security agreements, financing statements or other instruments relate to the Future Receivables being purchased by Purchaser); (vi) the Files (as they relate to the Future Receivables) and the Books and Records (as they relate to the Future Receivables). Notwithstanding the provisions of this Section 2.1(B), the parties agree that the Seller shall be under no obligation to sell any Future Receivable to Purchaser and Purchaser shall be under no obligation to purchase any Future Receivable from Seller.

(C)        Retained Assets. All assets of Seller not specifically listed and sold in Sections 2.1(A) and 2.1(B) of this Agreement shall remain the property of Seller.

(D)        Credit Loss. Upon the purchase of the Assets, the risk of credit loss on the Receivables shall become Purchaser's.

(E)         The Closing. The Closing (the "Closing") of the transactions described in Section 2.1(A) contemplated by this Agreement shall take place on 29 October 2001 and at Moline, Illinois, or such other mutually acceptable location, commencing at such time and on such date as Seller and Purchaser mutually may determine (the " Initial Closing Date"). The sales of all Future Receivables shall occur automatically in accordance with the provisions of Section 2.1(B) of this Agreement without the delivery of the documents described in Section 2.1(F)(i) and 2.1(F)(ii), but with the delivery of the Purchase Price described in Section 2.2.(A). The parties agree that the sale of assets subsequent to the Initial Closing Date may occur through mutually satisfactory accounting entries which may be entries only on the Purchaser’s books and records and/or by other activities related to the acceptance of such assets by Purchaser as agreed upon by the parties. On a periodic basis, the parties may deliver a schedule which will summarize, in a form reasonably satisfactory to both Seller and Purchaser, the sales of Future Receivables which shall have occurred since the date of the last summary.

(F)         Deliveries at the Closing. At the Closing, (i) Seller shall deliver to Purchaser the various certificates, instruments and documents referred to in Section 8.1 below, (ii) Purchaser shall deliver to Seller the various certificates, instruments and documents referred to in Section 8.2, and (iii) Purchaser shall deliver to Seller the consideration specified in Section 2.2(A) of this Agreement.

(G)        Intent of the Parties. It is the expressed intent of the parties hereto that the conveyance of the Assets by Seller be, and be construed as, an absolute sale of such Assets by Seller to Purchaser, and not a pledge by Seller to Purchaser to secure a debt or other obligations of Seller. However, in the event that, notwithstanding the aforementioned intent of the parties, such conveyance is held or deemed not to be an absolute sale or is held or deemed to

6

be a pledge of security for a loan, then it is the express intent of the parties to this Agreement that this Agreement constitutes a "security agreement" under the UCC and applicable law, and Seller shall be deemed to have granted to Purchaser a first priority, continuing lien and security interest in all right, title and interest of Seller in, to and under the Assets sold pursuant to this Agreement, and all proceeds in respect thereof. Seller shall take such actions, as may be necessary to ensure that if this Agreement were deemed to create a security interest, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as such for the term of this Agreement.

In connection with such sales, Seller agrees to record and file, at its own expense, a financing statement on form UCC-1 or any other applicable form (and continuation statements when applicable) naming Seller as "debtor" and Purchaser as " secured party" thereon with respect to the Receivables now existing and hereafter created for the sale of chattel paper, general intangibles or accounts (as defined in Sections 9-105 and 9-106 of the UCC as in effect in any relevant state) meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect the sale and assignment of the Assets to Purchaser, and to deliver a file-stamped copy of such financing statements or other evidence of such filing to Purchaser on or prior to the Initial Closing Date, and (if any additional filing is necessary) the applicable Subsequent Closing Date provided that following the adoption of revised Article 9 of the UCC by any relevant State, such steps shall be taken to perfect each transfer and pledge as necessary to achieve perfection thereof under such revised Article 9. In addition, Seller shall cause to be timely filed in the appropriate filing office any continuation statement necessary to perfect any sale of Assets to Purchaser. Purchaser shall be under no obligation whatsoever to file such financing statement, or a continuation statement to such financing statement, or to make any other filing under the UCC in connection with such sales.

In connection with such sales and contributions, Seller further agrees, at its own expense, on or prior to the Initial Closing Date, or the applicable Subsequent Closing Date in the case of Subsequent Assets to deliver to Purchaser a computer file or microfiche or written list containing a true and complete list of all such Accounts sold. Such file or list, as supplemented from time to time to reflect Future Receivables, shall be marked as Exhibit 2.1(G) to this Agreement and is hereby incorporated into and made a part of this Agreement.

2.2         Purchase Price.

(A)         Purchase Price Calculation. Subject to the adjustment described in Section 2.2(E) of this Agreement, the Purchase Price for the Purchased Assets will be the principal balance of the Receivables as of the close of business on the business day immediately preceding the Initial Closing Date plus all accrued but unpaid interest, without premium or discount but net of all deferred taxes and net of all reserves established by Seller for uncollectible Purchased Assets, which reserve shall be reasonably acceptable to Purchaser as of the Initial Closing Date. Subject to the adjustment described in Section 2.2(E) of this Agreement, for all Subsequent Assets, the Purchase Price shall equal the unpaid principal balance of the Future Receivables as of the relevant Subsequent Closing Date plus all accrued but unpaid interest, without premium or discount.

7

(B)         Purchase Price Payment. Purchaser shall pay each Purchase Price or any other amounts payable under this Agreement by inter-company transaction system memos.

(C)        Closing Statement and Closing Electronic Record Reviews. Purchaser shall be afforded thirty (30) days after actual receipt of the Closing Electronic Record, Master Account List and Closing Statement in which to review the same for accuracy and give Seller written notice of any adjustment to the Closing Statement ("Adjustment Notice"). The Adjustment Notice shall set forth any adjustment items on the Closing Statement and will also reflect any proposed post-closing adjustments.

(D)        Right to Audit as to Purchase.

(1)         At any reasonable time, and from time to time during Seller's regular business hours, up to ninety (90) days following the Initial Closing Date, at Purchaser's option, Purchaser may directly or through its designated representatives conduct a Verification Audit for the purpose of verifying any or each amount and for compliance with this Agreement, as Purchaser deems appropriate, on any Closing Statement and to reconcile the amount to the appropriate Books and Records.

(2)         If Purchaser conducts a Verification Audit and the Verification Audit results in a dispute or discrepancy between any Closing Statement and the results of the Verification Audit, Purchaser will provide to Seller a Verification Statement which sets forth each amount on each Closing Statement where there is an adjustment, the amount of the adjustment, a general statement as to the basis for Purchaser's determination to the extent reasonably possible based on the data examined by Purchaser in the Verification Audit, and the amount of the Audited Closing Payment which Purchaser believes should replace the Audited Closing Payment provided by Seller. The parties will use reasonable and good faith efforts to resolve each adjustment within 30 days of the date of the Verification Statement. If the parties are unable to mutually agree in good faith as to the amount of

the adjustment, no adjustment to the Purchase Price shall be made.

(3)         If Purchaser has any questions relating to the purchase of a Future Receivable, Purchaser may request that it be allowed to conduct a Verification Audit of such purchase. If the Purchaser conducts a Verification Audit and the Verification Audit results in a dispute or discrepancy between the amount paid by the Purchaser and the results of the Verification Audit, Purchaser and Seller shall follow the procedures provided in Sections 2.2(D)(2) and 2.2(E) of this Agreement to resolve the dispute or discrepancy.

(E)         Adjustment to Purchase Price Payment. If the final adjustments reflect that Seller owes Purchaser or Purchaser owes Seller a refund or payment, respectively, such payment shall be made, plus interest at the Federal Funds Rate from the Closing Date to and including the date of payment. For the purpose of calculating the Purchase Price only, if Purchaser fails to notify Seller of

8

its adjustment with such items within the Purchaser's review period as described in Section 2.2(D) of this Agreement, the parties hereto will be deemed to have agreed to the amount set forth in the Closing Statement prepared by Seller.

2.3        Assumption of Liabilities.

(A)         Assumption of Liabilities. Purchaser shall not assume any liability, commitment, or obligation of Seller, whether absolute or contingent, known or unknown, of any nature, kind or description whatsoever, arising from or related to the Assets, including, without limitation, liabilities arising under or related to any contract, agreement or course of dealing between Seller and its lessors, vendors, servicers, consultants, suppliers, brokers or any other party or parties.

(B)         Pre-Closing Date Credit Balances; Administrative Costs. Seller agrees that it solely shall be responsible for any chargebacks, presentments, credit balances or incorrectly posted transactions with respect to Account transactions prior to the Closing Date, as appropriate. Seller further agrees that it will be responsible for all expenses related to the Receivables and activity thereon prior to the Closing Date, including, but not limited to, the processing and other fees of Seller.

(C)        Post-Closing Date Credit Balances and Administrative Costs. Purchaser agrees that subsequent to the Initial Closing Date it solely shall be responsible for any chargebacks, presentments, credit balances or incorrectly posted transactions with respect to Account transactions subsequent to the Initial Closing Date, as appropriate, including, but not limited to, the processing and other fees of Purchaser

(D)        Responsibility for Taxes. Seller shall pay any Tax, including any transfer tax, sales or use tax arising from the transfer of the Assets, provided however that this sentence shall not apply with respect to income taxes (including, without limitation, branch profit taxes, minimum taxes and taxes computed under alternative methods, at least one of which is based on net income) and franchise taxes that are based upon income or any other Tax upon or measured by income or gross receipts imposed on any party (any excluded Tax imposed on any party shall be the sole responsibility of the party upon whom the tax is imposed). Purchaser shall be liable for any Tax that relates to or arises from the ownership or use of the Assets with respect to periods on and after the relevant Closing Date for such Assets and Seller shall be liable for any Tax that relates to or arises from the ownership or use of the Assets with respect to periods prior to such Closing Date.

2.4         Post-Closing Adjustments. Following each Closing Date, Seller shall, with Purchaser's cooperation and assistance, determine and account to Purchaser for any items or transactions that affect any of the Receivables purchased on such Closing Date, but that were posted, un-posted or unaccounted for on or before such Closing Date, including without limitation, cash, letters in process relating to cash or other advances, access checks, payments in process, unidentified or unallocated items, or errors.

2.5         Additional Documentation. Seller further agrees that, if Purchaser reasonably requests Seller to execute and deliver additional assignments to

9

transfer such interests or to take such other or further actions as reasonably necessary to achieve the purposes of this Agreement, Seller will take appropriate actions. Seller's initial designee for these purposes will be the person designated for notices under Section 10.2 hereof. If Purchaser requests such actions, Purchaser shall furnish Seller with copies of the proposed additional documentation. Costs, fees and expenses of preparing, executing and delivering such additional assignments shall be borne by the party incurring such cost, fee or expense. Such documents may include lost note affidavits.

2.6         True Sale. The parties intend the transactions described herein to be a true sale and an absolute and irrevocable (except as provided in Section 7.1(F) hereof) transfer, sale and assignment of the Assets from Seller to Purchaser for all purposes.

ARTICLE III. POST-CLOSING ADMINISTRATION

3.1         Post-Closing Administration of Portfolio. Purchaser agrees that subsequent to the Closing or the purchase of a Future Receivable, it, or its designee, shall administer the Portfolio.

3.2         Supplemental Interest Rate. The parties acknowledge that a portion of the Portfolio includes Supplemental Interest Receivables. Seller wishes Purchaser to continue to provide non-interest bearing financing to the Dealers under the Receivables Agreement. To compensate Purchaser for the Supplemental Interest Receivables, Seller shall pay Purchaser a supplemental interest fee (the "Supplemental Interest Fee") on a monthly basis, which fee is intended by the parties to approximate the normal, market rate of interest for like receivables and shall be computed on terms mutually agreeable to the parties. To calculate the amount of the Supplemental Interest Fee, Purchaser shall deliver to Seller on the __ day of each month, a schedule (the "Supplemental Interest Schedule"), which may be in electronic form, listing the total amount of Supplemental Interest Receivables and the total amount of interest, if any, payable on such Supplemental Interest Receivables. On the ___ day of each month, Seller shall pay Purchaser an amount equal to the Supplemental Interest Fee. Seller shall have the right to review, on a periodic basis, Purchaser's calculations of the amount of the Supplemental Interest Receivables and if there are disagreements as to the total amount of the Supplemental Interest Receivables or as to the appropriate calculation of the Supplemental Interest Fee, the parties agree to work together in good faith to resolve these differences and adjust, if necessary, the amount of the Supplemental Interest Fee.

ARTICLE IV. SELLER'S REPRESENTATIONS AND WARRANTIES

Seller hereby represents and warrants to Purchaser that the statements made in this Section 4 are correct and complete as of the date of this Agreement and will be true, correct and complete on the Initial Closing Date and each Subsequent Closing Date (as though made then and as though the Initial Closing Date or Subsequent Closing Date, as the case may be, were substituted for the date of this Agreement throughout this Section 4).

4.1         Due Organization.  Seller is a Delaware corporation, duly organized, validly existing and in good standing, with its principal office located at One

10

John Deere Place, Moline, Illinois 61265.

4.2         Authorization and Binding Effect. Seller has full power and authority, corporate and otherwise, to enter into this Agreement. Execution, delivery and consummation of this Agreement by Seller have been duly authorized by all necessary corporate action and do not require any consent or approval of any person that has not been obtained. This Agreement constitutes the valid and binding obligation of Seller, enforceable against Seller in accordance with the terms and conditions hereof.

4.3         No Breach of Other Agreements. The execution, delivery, and performance of this Agreement will not violate, be in conflict with, or constitute a default under (a) Seller's Certificate of Incorporation, by-laws, or other documents of corporate self-governance; (b) any agreement, instrument or other obligation to which Seller is a party or by which Seller is bound; or (c) any Requirement of Law of any governmental authority whatsoever.

4.4         Books and Records Complete. With respect to each Obligor: (i) the Books and Records are true and complete in all material respects, and (ii) all material information relating to the credit, charges, fees, payment history, customer inquiries, information about the Obligor and regulatory correspondence which is known and available to Seller relating to such Obligor's Receivables is contained in the Books and Records.

4.5         No Consent. No consent of any Person and no consent, license, permit or approval or authorization or exemption by notice or report, or registration, filing or declaration with any governmental authority having jurisdiction over Seller is required (other than those previously obtained and delivered to Purchaser) in connection with the execution or delivery by Seller of this Agreement and the consummation of the series of transactions contemplated hereby, or the performance by Seller of its duties and obligations hereunder.

4.6         Claims; Litigation and Audits. There are no administrative or court actions, suits or proceedings of any kind now pending, or, to Seller's knowledge, threatened that, if adversely decided, would have a Material Adverse Effect. There are no outstanding judgments, orders or decisions of any arbitrator or governmental authority with jurisdiction over Seller which could adversely affect any of the Receivables. There were no audits, investigations, inspection or any other reviews or inquiries of any governmental authority or internal auditing group concerning Seller's administration of the Portfolio conducted during the current calendar year or the four (4) calendar years immediately preceding the date of this Agreement which revealed problems or issues with regard to the Receivables which would have a Material Adverse Effect.

4.7         Tax Returns and Liabilities. Seller has not, by conduct or omission, become subject to any federal, state, county, local or other tax liens, however the same may have arisen, that would attach to the Assets but, to the extent any such sum(s) arise, Seller agrees to promptly pay such sum(s).

4.8         Disclosure. No employee or representative of Seller or its agents intentionally made material untrue or misleading assertion in any statement provided by such Person in connection with the transactions contemplated hereby,

11

and the Closing Electronic Records provided by Seller to Purchaser were and will be complete and accurate reflections of the Receivables as of the dates thereof.

4.9         Undisclosed Liability. Except for any credit balances on Receivables or Future Receivables and unfunded commitments to extend future credit to Dealers, Seller has no material obligations, commitments or any other liabilities, absolute or contingent, known or unknown, relating to the Assets or the Receivables which will affect the Assets after the Closing Date. No Account nor such Receivable is subject to any right of set-off, recission, counterclaim or defense arising out of any action or failure to act by Seller and to Seller's knowledge, no right of recission, set-off, counterclaim or defense due to an act or a failure to act of the Seller has been asserted with respect thereto.

ARTICLE V. ACCOUNT SPECIFIC REPRESENTATIONS AND WARRANTIES

With respect to each Account and each Receivable, Seller hereby represents and warrants to Purchaser that the statements made in this Section 5 are correct and complete as of the Initial Closing Date with respect to the Receivables.

5.1         Enforceability; Ownership. Each Account represents the legal, valid and binding obligation of the Obligors thereunder and is enforceable against such Obligors in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, moratorium or other laws or regulations, in effect now or in the future, that affect the enforcement of creditors' rights generally. Seller has full legal title to the Accounts and has not assigned any right, title or interest in such Accounts to any other Person.

5.2         Documentation. Each Obligor's obligations to Seller in respect of such Receivable are subject to a Receivable Agreement and, if applicable, a guaranty between such Obligor and Seller which is enforceable in accordance with its terms and has not been amended or altered other than in accordance with Seller's Policies and Procedures. All such agreements are freely assignable by Seller to Purchaser in accordance with the terms of such agreements, without the approval or consent of any Obligor or other person to effectuate the valid assignment of the same in favor of Purchaser and are governed by and construed in accordance with the laws of the State of Illinois. Seller has provided Purchaser with copies of the forms of agreement used to document the Account and Receivable.

5.3         Set-off; Defenses.  No Account nor such Receivable is the subject of pending or, to the Knowledge of Seller, threatened litigation. Seller has administered all Accounts in all material respects in accordance with all Requirements of Law and Seller's Policies and Procedures.

5.4         Collateral. With respect to the Receivables purchased on the Initial Closing Date only, Seller has filed all financing statements in each appropriate office and has sent all notifications that are legally required to grant Seller a first priority perfected security interest in the Collateral, subject to any properly perfected purchase money security interests which may have priority over Seller's security interest in the Collateral, as provided by the relevant UCC in effect as of the date of this Agreement.

5.5         Lien. No Account nor Receivable is subject to any Lien, interest or

12

right of any person other than Seller, or to any bankruptcy proceeding, or altered or reduced payment program.

5.6         Ordinary Course of Business. Seller has generated each Receivable and will generate each Future Receivable, in the ordinary course of its business pursuant to and substantially in accordance with Seller's Policies and Procedures.

5.7         Servicing of Receivables. All payments or monies received by Seller or its affiliated or third party contractors with respect to the payment of any Receivable or Future Receivable have been properly applied. Each Account has been maintained and serviced by Seller in accordance with Seller's Policies and Procedures as well as all Requirements of Law.

ARTICLE VI. PURCHASER'S REPRESENTATIONS AND WARRANTIES

Purchaser represents and warrants to Seller on each Closing Date (as though made then and as though such Closing Date were substituted for the date of this Agreement throughout Section 6) as follows:

6.1         Due Organization. Purchaser is a Nevada corporation, duly organized, validly existing and in good standing, with its registered office located at One East First Street, Reno, Nevada.

6.2         Authorization and Binding Effect. Purchaser has full power and authority, corporate and otherwise, to enter into this Agreement. Execution, delivery and consummation of this Agreement by Purchaser have been duly authorized by all necessary corporate action and do not require any consent or approval of any Person that has not been obtained. This Agreement constitutes the valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with the terms and conditions hereof.

6.3         No Breach of Other Agreements. The execution, delivery, and performance of this Agreement will not violate, be in conflict with, or constitute a default under (a) Purchaser's certificate of incorporation, by-laws, or other documents of corporate self-governance; (b) any agreement, instrument or other obligation to which Purchaser is a party or by which Purchaser is bound; or (c) any Requirement of Law of any governmental authority whatsoever.

6.4         No Consents. No consent of any Person and no consent, license, permit, or approval, or authorization, or exemption by notice, or report, or registration, filing, or declaration with, any governmental authority is required (other than those previously obtained and delivered to Seller) in connection with the execution or delivery by Purchaser of this Agreement and the consummation of the series of transactions contemplated hereby, or the performance by Purchaser of its duties and obligations hereunder.

6.5         Claims and Litigation. There are no administrative or court actions, suits or proceedings of any kind now pending, and, to Purchaser's knowledge, no such actions, suits or proceedings are threatened, that if adversely decided would have a Material Adverse Effect on Purchaser's ability to consummate the transaction set forth in this Agreement. There are no pending or outstanding administrative or court actions, suits or proceedings or, outstanding judgments,

13

orders, or decisions of any arbitrator or governmental authority with jurisdiction over Purchaser which could adversely affect Purchaser's ability to consummate the transactions set forth in this Agreement.

ARTICLE VII. COVENANTS

7.1         Affirmative Covenants of Seller.

(A)         Purchaser Examination of Assets.  Upon reasonable advance notice, Seller shall give Purchaser and its representatives full access during Seller's normal business hours to examine the Assets; provided that Seller must approve the number of representatives and the work station locations so as not to disrupt or interfere with Seller's other businesses with such approval not to be unreasonably withheld.

(B)         Cooperation. Following the Closing, Seller agrees to provide timely assistance to Purchaser which shall include, without limitation, obtaining transaction records, the production of documents, and the interpretation of any relevant collection comments, to resolve any dispute or claim of any Dealer or other Obligor relating to all pre-Closing transactions.

(C)        Delivery of Files. Notwithstanding the sale of the Files to Purchaser, the parties agree that at Purchaser's direction, Seller may maintain physical possession of the Files.

(D)        Seller Advances on Receivables. Seller has generated Receivables only in accordance with  Seller's Policies and Procedures.

(E)         Tax Reporting Obligations. Seller hereby agrees to perform all its obligations with respect to federal and/or state Tax reporting relating to or arising out of the Receivables, the Collateral and/or the Books and Records sold, transferred and assigned pursuant to this Agreement for the portion of the year 2001 that Seller owned the Receivables and for prior years. Purchaser shall file such reporting forms relating to the period of the year 2001 for which Purchaser owned the Receivables and thereafter while Purchaser continues to own such Receivables.

(F)         Remedies for Breach of Account Specific Representations and Warranties. All representations and warranties shall survive for five years from the relevant Closing Date, except for the representations and warranties described in Sections 4.1, 4.2, 6.1 and 6.2 that shall survive indefinitely. If any of the representations and warranties contained in Section 5 is not true and correct as of the date specified therein and Purchaser incurs a financial loss due to such breach of representation and warranty, Purchaser shall, within thirty days of such loss, notify Seller of the occurrence of such a loss. Within thirty (30) days of the receipt of such notice, Seller shall repurchase the Receivable or Future Receivable with respect to which there has been such a breach of representation and warranty and on which a loss has been incurred for an amount equal to the Repurchase Price. If the parties disagree regarding the existence of the breach of representation and warranty or the amount of the Repurchase Price, the parties agree to consult to determine in good faith whether there has been a breach of representation or warranty and the amount of the Repurchase Price. Upon the payment of the Repurchase Price, Seller shall

14

prepare, with the cooperation and assistance of Purchaser, and Purchaser will execute and deliver appropriate transfer documentation to return a repurchased Account to Seller.

7.2         Mutual Covenants.

(A)         Efforts to Comply. Subject to the terms and conditions herein provided, each party shall cooperate fully with the other and shall use commercially reasonable best efforts to take all action necessary or appropriate hereunder and under any Requirements of Law to consummate the series of transactions contemplated by this Agreement. Each party further agrees to use its commercially reasonable best efforts for the consummation of the series of transactions contemplated by this Agreement.

(B)         No Material Omissions. Between the date hereof and Closing, each party shall promptly advise the other in writing of any fact which, if existing or known at the date hereof, would have been required to be set forth or disclosed in or pursuant to this Agreement or of any fact which, if existing or known at the date hereof, would have made any of such party's representations contained herein untrue.

ARTICLE VIII. CONDITIONS PRECEDENT TO CLOSING

8.1         Seller. On the Initial Closing Date (unless otherwise stated or unless otherwise waived by Purchaser), Seller shall deliver or cause to be delivered to Purchaser the following:

(A)         Written evidence of transfer to convey to Purchaser all of Seller's rights, title and interest in and good and marketable title to the Purchased Assets, free and clear of any and all Liens in the form attached hereto as Exhibit 8.1(A), to be delivered by Seller and approved by Purchaser on the Initial Closing Date;

(B)         A certificate, dated as of the Initial Closing Date, signed by the Secretary or an Assistant Secretary of Seller, certifying the incumbency of the officers or other representatives of Seller signing this Agreement on behalf of Seller and the related documents and instruments to be delivered in connection herewith to be delivered by Seller and approved by Purchaser;

(C)        Evidence, in form and substance satisfactory to Purchaser, that the execution of this Agreement by Seller and the performance of all of Seller's obligations hereunder have been duly authorized by the Seller;

(D)        The Closing Statement;

(E)         The Master Account List;

(F)         All written documents, instruments and manuals which describe Seller's Policies and Procedures; and

(G)        Such additional instruments, documents or certificates as may be reasonably requested by Purchaser and necessary for the consummation of the closing on the Initial Closing Date and the transactions contemplated hereby.

15

8.2         Purchaser. On each Closing Date (unless otherwise stated or unless otherwise waived by Seller), Purchaser shall deliver or cause to be delivered to Seller the following:

(A)         The Purchase Price;

(B)         With respect to the Initial Closing Date, a certificate, dated as of the Closing Date, signed by the Secretary or an Assistant Secretary of Purchaser, certifying the incumbency of the officers or other representatives of Purchaser signing this Agreement on behalf of Purchaser and the related documents and instruments to be delivered in connection herewith, to be delivered by Purchaser and approved by Seller; and

(C)        Evidence, in form and substance satisfactory to Seller, that the execution of this Agreement by Purchaser and the performance of all of Purchaser's obligations hereunder have been duly authorized by the Purchaser.

ARTICLE IX. INDEMNIFICATION

9.1         Seller's Indemnification of Purchaser. In addition to Seller's repurchase obligations described in Section 7.1(F), but subject to the duration of its representations and warranties provided in Section 7.1 (F), Seller shall indemnify, defend and hold Purchaser, its employees, officers, directors and agents harmless from Adverse Consequences arising out of:

(A)         The extension of credit to the Dealers and other Obligors made on or prior to the close of business on the Initial Closing Date other than in compliance with Requirements of Law (whether known or unknown, contingent or matured), as appropriate;

(B)         The maintenance of micrographic records by Seller and the cooperation of Seller with Purchaser for delivering documents for which no written or electronic image copies have been delivered to Purchaser;

(C)        Any material breach of any representations, warranties or covenants of Seller contained herein or in any document or instrument delivered by Seller; and

(D)        Seller's intentional misconduct or negligence relating to the performance of Seller's obligations hereunder.

9.2         Limitations on Amount of Seller's Indemnification of Purchaser. Except for the repurchase obligations described in Section 7.1(F) which shall not be subject to the limitations contained in this Section 9.2, Seller's total obligations pursuant to Section 9 of this Agreement shall not exceed the aggregate Purchase Price.

9.3         Purchaser's Indemnification of Seller. Notwithstanding any provision of Section 2.3 hereof and subject to the duration of its representations and warranties and the maximum indemnity provided in Section 9.4, Purchaser agrees to indemnify, defend and hold harmless Seller, its officers, directors,employees and agents from any Adverse Consequences, by reason of or resulting 

16

from or arising out of any material breach of any representation, warranty or covenant of Purchaser contained herein or in any document or instrument delivered by Purchaser hereunder or due to the ongoing administration of the Portfolio by Purchaser subsequent to the close of business on the Initial Closing Date other than in compliance with the Requirements of Law with respect to its Receivables (whether known or unknown, contingent or mature).

9.4         Limitation on Amount of Purchaser's Indemnification.  Purchaser's total obligations pursuant to Section 9 of this Agreement shall not exceed the Purchase Price.

9.5         Manner of Handling Claims. If either party obtains knowledge of: (a)facts that would give rise to a right of indemnification for that party; or (b) commencement of an action that may require indemnification, the Indemnified Party shall give written notice to the Indemnifying Party as promptly as practicable after its receipt of that knowledge. Following receipt of such notice, the Indemnifying Party shall be entitled to participate in the defense of such claim, and, upon notice delivered promptly to the Indemnified Party, to assume the defense thereof, with counsel reasonably satisfactory to the Indemnified Party. Within a reasonable period following the assumption of such defense by the Indemnifying Party, the Indemnified Party shall be permitted to participate in the defense of such claim and may retain additional counsel of its choice at its own expense. The Indemnified Party shall not settle any claim or action the defense of which has been assumed by the Indemnifying Party without the consent of the Indemnifying Party. If, however, the defendants in such action include both parties and the Indemnified Party shall have concluded that there may be legal defenses available to it that are different from or additional to those available to the Indemnifying Party, the Indemnified Party shall be entitled to separate counsel, reasonably acceptable to the Indemnifying Party, which shall be paid for by the Indemnifying Party, provided such legal defenses are, in fact, rendered in favor of such party by the court or conceded by the plaintiff-third party. The parties hereto shall cooperate with one another in responding to and defending against any third party claims giving rise to indemnification rights hereunder.

9.6         Subrogation. The Indemnifying Party shall be subrogated to any claims or rights of the Indemnified Party as against any other persons with respect to any amounts paid by the Indemnifying Party under this Section. The Indemnified Party shall cooperate with the Indemnifying Party, at the Indemnifying Party's expense, in the Indemnifying Party's assertion of any such claim.

9.7         Survival. Any rights to indemnification with respect to any claim or controversy as to which the process described in Section 9.5 has been initiated by tender of formal notice, or any third party claim, delivered in writing prior to the expiration of the limitations periods set forth herein, shall survive until such claim or controversy is finally resolved.

9.8         Mitigation of Damages. Seller and Purchaser further mutually agree to exercise best efforts and prudent judgment to minimize and mitigate the exposure for loss, damage or claims against each other, as well as claims or disputes arising from third parties. Each shall inform the other as promptly as possible of any alleged claim, adjustment or dispute to afford as early a determination as possible of the merits, extent and potential monetary value or significance 

17

of the event or claim.

ARTICLE X. GENERAL PROVISIONS

10.1       Confidentiality. The parties shall keep confidential and cause their respective officers, directors, employees and agents to keep confidential, any and all information obtained from the other party concerning the assets, properties and business of the other party, and shall not use such information for any purpose other than those contemplated by this Agreement; provided, however, that neither party shall be subject to the obligations set forth in the preceding sentence with respect to any such information provided by the other party which either: (a) was in the receiving party's possession or in the public domain at the time of disclosure, or subsequently enters the public domain through no act or failure to act on the part of the receiving party; (b) is lawfully obtained by the receiving party from a third party; or (c) is required by law or regulatory authority. Public announcements regarding the series of transactions contemplated herein shall be made only with the prior consent of the parties hereto, which consent shall not be unreasonably withheld. This section shall survive the Initial Closing for a period of two (2) years following the Closing Date.

10.2       Notices. Except as otherwise expressly set forth herein, any notice, payment, demand or any other communication required or permitted to be given hereunder shall be in writing and delivered via overnight courier, facsimile or delivered by hand to the applicable party or parties at the address indicated below:

If to Seller:

JOHN DEERE CONSTRUCTION & FORESTRY COMPANY

One John Deere Place

Moline, Illinois  61265

Attention: Treasurer

Telecopier: 309-749-0006

If to Purchaser:

DEERE CAPITAL, INC.

One East First Street, Suite 600

Reno, Nevada 89501

Attention: Director, Wholesale Finance

Telecopier: 775-786-4145

With a copy to:

DEERE CAPITAL, INC.

c/o Deere Credit Services, Inc.

6400 NW 86/th/ Street

Johnston, Iowa 50131-6600

Attention: Chief Counsel

Telecopier: (515)267-4256

or as to each party at such other address as may be designated from time to time

18

by such party or parties by like notice to the other parties, complying with this Section. All such notices, payments, demands or other communications shall be deemed validly given and legally effective when received.

10.3       Severability. If any term or condition of this Agreement should be held invalid by a court, arbitrator or tribunal of competent jurisdiction in any respect such invalidity shall not affect the validity of any other term or condition hereof. If any term or condition of this Agreement should be held to be unreasonable as to time, scope or otherwise by such a court, arbitrator or tribunal, it shall be construed by limiting or reducing it to a minimum extent so as to be enforceable under then applicable law. The parties hereto acknowledge that they would have executed this Agreement with any such invalid term or condition excluded or with any such unreasonable term or condition so limited or reduced.

10.4       Entire Agreement; Amendments. This Agreement and its exhibits and the agreements it incorporates by reference constitute the entire agreement of the parties with regard to the specific subject matter hereof and supersede all prior written and/or oral understandings between the parties. This Agreement may not be amended except pursuant to a writing signed by both parties. 

10.5       Waiver. Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. Any waiver must be in writing and signed by the party to be charged therewith.

10.6       Binding Effect. Neither party shall assign this Agreement without the prior written consent of the other and any attempted assignment without said consent shall be null, void and without any effect whatsoever; provided, however, that Purchaser may assign any or all of its rights hereunder (or delegate any or all of its obligations hereunder) to any affiliate or subsidiary of Purchaser, and Seller may assign any or all of its rights to any affiliate or subsidiary of Seller. In such latter event, Purchaser and Seller agree to give notice to the other of its assignment to its affiliate, subsidiary or parent.

10.7       Exhibits and Schedules. The exhibits attached hereto or referenced herein and each certificate, schedule, list, summary or other document provided or delivered pursuant to this Agreement or in connection with the transactions contemplated hereby are incorporated herein by this reference and made a part hereof.

10.8       No Third Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the parties hereto. Nothing in this Agreement shall be construed to grant to any person other than the parties hereto, and their respective successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof

10.9       Further Assurances.  The parties hereto hereby agree to do such further acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments, as either may at any time reasonably request in order to better assure and confirm unto each party their respective rights, powers and remedies conferred hereunder.

19

10.10     Counterparts. Provided that both parties hereto execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

10.11     Headings. The headings contained herein are included solely for ease of reference and in no way shall limit, expand or otherwise affect either the substance or construction of the terms and conditions of this Agreement or the intent of the parties hereto.

10.12     Non-Merger/Survival. Each and every covenant, representation, warranty and obligation set forth herein made by Purchaser or Seller and any indemnity shall survive the execution and delivery of the documents at Closing, as provided in this Agreement, and this Agreement shall not merge into such documents, but instead shall be independently enforceable.

10.13     Expenses. All costs and expenses arising from the sale of the Assets and in connection with the series of transactions contemplated hereby, and all levies or other charges of any nature, kind or description imposed by any governmental authority, which in either case are not otherwise provided for pursuant to the terms and provisions of this Agreement, shall be borne by the party incurring such expense.

20

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 Deere & Company;

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 27, 2020	By:	/s/ John C. May
			John C. May
			Chief Executive Officer, President and Director
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ryan D. Campbell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Deere & Company;

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 27, 2020	By:	/s/ Ryan D. Campbell
			Ryan D. Campbell
			Senior Vice President and Chief Financial Officer
			(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 Deere & Company (the “Company”) on Form 10-Q for the period ending February 2, 2020, 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 27, 2020	/s/ John C. May	Chief Executive Officer, President and Director
	John C. May	(Principal Executive Officer)
February 27, 2020	/s/ Ryan D. Campbell	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal
	Ryan D. Campbell	Accounting Officer)

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

XML

REVENUE RECOGNITION - Advanced Customer Payments (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Advanced customer payments
Deferred revenue received	$ 1,070	$ 956	$ 1,010
Revenue recognized from deferred revenue	$ 181	$ 156

XML

ORGANIZATION AND CONSOLIDATION

3 Months Ended

Feb. 02, 2020

ORGANIZATION AND CONSOLIDATION

ORGANIZATION AND CONSOLIDATION

(1)  Organization and Consolidation

The information in the notes and related commentary are presented in a format which includes data grouped as follows:

Equipment Operations – Includes the Company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis.

Financial Services – Includes primarily the Company’s financing operations.

Consolidated – Represents the consolidation of the equipment operations and financial services. References to "Deere & Company" or "the Company" refer to the entire enterprise.

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 year 2020 and 2019 were February 2, 2020 and January 27, 2019, respectively. Both periods contained 13 weeks.

Variable Interest Entities

The Company consolidates certain Variable Interest Entities (VIEs) related to retail note securitizations (see Note 12).

The Company also has an interest in a joint venture that manufactures construction equipment in Brazil for local and overseas markets. The joint venture is a VIE; however, the Company is not the primary beneficiary. Therefore, the entity’s financial results are not fully consolidated in the Company’s consolidated financial statements, but are included on the equity basis. The maximum exposure to loss was $19 million, $22 million, and $27 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

XML

OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests
Comprehensive income (loss) attributable to noncontrolling interests	$ 1	$ 2
Net income attributable to noncontrolling interests	$ 1	$ 2

XML

CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Feb. 02, 2020	Nov. 04, 2019	Nov. 03, 2019	Jan. 27, 2019	Oct. 28, 2018
ASSETS
Cash and cash equivalents	$ 3,602		$ 3,857	$ 3,626
Marketable securities	609		581	523
Receivables from unconsolidated affiliates	38		46	36
Trade accounts and notes receivable - net	5,360		5,230	5,497
Financing receivables - net	27,294		29,195	25,150
Financing receivables securitized - net	4,478		4,383	4,563
Other receivables	1,367		1,487	1,651
Equipment on operating leases - net	7,504		7,567	6,904
Inventories	6,482		5,975	7,402
Property and equipment - net	5,900		5,973	5,785
Investments in unconsolidated affiliates	217		215	212
Goodwill	2,945		2,917	3,048	$ 3,101
Other intangible assets - net	1,349	$ 1,357	1,380	1,507
Retirement benefits	900		840	1,348
Deferred income taxes	1,414		1,466	834
Other assets	2,362	2,301	1,899	1,832
Total Assets	71,821		73,011	69,918
LIABILITIES
Short-term borrowings	10,008	10,795	10,784	10,738
Short-term securitization borrowings	4,416		4,321	4,464
Payables to unconsolidated affiliates	147		142	144
Accounts payable and accrued expenses	8,630	10,004	9,656	9,086
Deferred income taxes	491		495	525
Long-term borrowings	30,475	$ 30,249	30,229	27,855
Retirement benefits and other liabilities	5,710		5,953	5,759
Total liabilities	59,877		61,580	58,571
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest	14		14	14
STOCKHOLDERS' EQUITY
Common stock, $1 par value (issued shares at February 2, 2020 - 536,431,204)	4,675		4,642	4,512
Common stock in treasury	(17,549)		(17,474)	(16,422)
Retained earnings	30,129		29,852	27,816
Accumulated other comprehensive income (loss)	(5,329)		(5,607)	(4,578)
Total Deere & Company stockholders' equity	11,926		11,413	11,328
Noncontrolling interests	4		4	5
Total stockholders' equity	11,930		11,417	11,333	$ 11,291
Total Liabilities and Stockholders' Equity	$ 71,821		$ 73,011	$ 69,918

XML

INCOME TAXES - (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
INCOME TAXES
Capital loss carryback	$ 43
Excess tax benefits on equity compensation	(24)
UNRECOGNIZED TAX BENEFITS
Unrecognized tax benefits	557	$ 553
Unrecognized tax benefits affecting effective tax rate if recognized	$ 105	$ 153	$ 143

XML

LEASES - Cash Flows (Details) $ in Millions	3 Months Ended
	Feb. 02, 2020 USD ($)
Cash Paid Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from operating leases	$ 30
Financing cash flows from finance leases	5
Right of Use Assets Obtained in Exchange for Lease Liabilities
Operating leases	16
Finance leases	$ 9

XML

FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 04, 2019	Nov. 03, 2019	Jan. 27, 2019
Fair Values of Financial Instruments
Financing receivables - net	$ 27,294		$ 29,195	$ 25,150
Financing receivables securitized - net	4,478		4,383	4,563
Short-term securitization borrowings	4,416		4,321	4,464
Long-term borrowings	30,475	$ 30,249	30,229	27,855
Level 2
Fair Values of Financial Instruments
Long-term borrowings due within one year	7,217		7,433	6,123
Long-term borrowings	31,702		31,260	28,206
Level 3
Fair Values of Financial Instruments
Financing receivables - net	27,300		29,167	24,999
Financing receivables securitized - net	4,504		4,405	4,519
Level 2 and Level 3
Fair Values of Financial Instruments
Short-term securitization borrowings	4,445		4,347	4,458
Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	27,294		29,195	25,150
Financing receivables securitized - net	4,478		4,383	4,563
Short-term securitization borrowings	4,416		4,321	4,464
Long-term borrowings due within one year	7,205		7,428	6,126
Long-term borrowings	30,452		30,229	27,855
Equipment Operations
Fair Values of Financial Instruments
Financing receivables - net	130		65	102
Financing receivables securitized - net	42		44	67
Short-term securitization borrowings	42		44	67
Long-term borrowings	5,567		5,415	4,712
Equipment Operations | Level 2
Fair Values of Financial Instruments
Long-term borrowings due within one year	567		645	937
Long-term borrowings	6,403		6,138	4,989
Equipment Operations | Level 3
Fair Values of Financial Instruments
Financing receivables - net	123		61	99
Financing receivables securitized - net	40		43	65
Short-term securitization borrowings	42		45	67
Equipment Operations | Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	130		65	102
Financing receivables securitized - net	42		44	67
Short-term securitization borrowings	42		44	67
Long-term borrowings due within one year	567		642	928
Long-term borrowings	5,544		5,415	4,712
Financial Services
Fair Values of Financial Instruments
Financing receivables - net	27,164		29,130	25,048
Financing receivables securitized - net	4,436		4,339	4,496
Short-term securitization borrowings	4,374		4,277	4,397
Long-term borrowings	24,908		24,814	23,143
Financial Services | Level 2
Fair Values of Financial Instruments
Short-term securitization borrowings	4,403		4,302	4,391
Long-term borrowings due within one year	6,650		6,788	5,186
Long-term borrowings	25,299		25,122	23,217
Financial Services | Level 3
Fair Values of Financial Instruments
Financing receivables - net	27,177		29,106	24,900
Financing receivables securitized - net	4,464		4,362	4,454
Financial Services | Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	27,164		29,130	25,048
Financing receivables securitized - net	4,436		4,339	4,496
Short-term securitization borrowings	4,374		4,277	4,397
Long-term borrowings due within one year	6,638		6,786	5,198
Long-term borrowings	$ 24,908		$ 24,814	$ 23,143

XML

LEASES - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 9,423	$ 9,422
Less accumulated depreciation	1,919	1,855
Equipment on operating leases - net	7,504	7,567	$ 6,904
Operating lease residual value	5,299	5,259
Operating lease residual value guarantees	652	647
Agriculture and Turf
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	7,260	7,257
Construction and Forestry
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 2,163	$ 2,165

XML

LEASES - Lease Right of Use Assets and Liabilities - (Details) $ in Millions	Feb. 02, 2020 USD ($)
Lessee
Operating leases - Other assets	$ 376
Operating lease, right-of-use asset, Condensed Consolidated Balance Sheet location	us-gaap:OtherAssets
Operating leases - Accounts payable and accrued expenses	$ 361
Operating lease, liability, Condensed Consolidated Balance Sheet location	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent
Finance leases - Property and equipment - net	$ 37
Finance lease, right-of-use asset, Condensed Consolidated Balance Sheet location	us-gaap:PropertyPlantAndEquipmentNet
Finance leases - Short-term borrowings	$ 12
Finance lease, liability, short-term, Condensed Consolidated Balance Sheet location	de:ShortTermBorrowingsIncludingLongTermDebtCurrent
Finance leases - Long-term borrowings	$ 23
Finance lease, liability, long-term, Condensed Consolidated Balance Sheet location	us-gaap:LongTermDebtNoncurrent
Total finance lease liabilities	$ 35

XML

DIVIDENDS DECLARED AND PAID

3 Months Ended

Feb. 02, 2020

DIVIDENDS DECLARED AND PAID

DIVIDENDS DECLARED AND PAID

(6)  Dividends Declared and Paid

Dividends declared and paid on a per share basis were as follows:

	Three Months Ended
	February 2		January 27
	2020		2019
Dividends declared	$	.76	$	.76
Dividends paid	$	.76	$	.69

XML

SEGMENT REPORTING

3 Months Ended

Feb. 02, 2020

SEGMENT REPORTING

SEGMENT REPORTING

(10)  Segment Reporting

Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended
	February 2		January 27		%
	2020		2019		Change
Net sales and revenues:
Agriculture and turf	$	4,486	$	4,681	-4
Construction and forestry		2,044		2,260	-10
Total net sales		6,530		6,941	-6
Financial services		931		855	+9
Other revenues		170		188	-10
Total net sales and revenues	$	7,631	$	7,984	-4
Operating profit: *
Agriculture and turf	$	373	$	348	+7
Construction and forestry		93		229	-59
Financial services		179		192	-7
Total operating profit		645		769	-16
Reconciling items **		(78)		(87)	-10
Income taxes		(50)		(184)	-73
Net income attributable to Deere & Company	$	517	$	498	+4
Intersegment sales and revenues:
Agriculture and turf net sales	$	7	$	9	-22
Construction and forestry net sales				1
Financial services		67		72	-7
Equipment operations outside the U.S. and Canada:
Net sales	$	2,780	$	2,818	-1
Operating profit		225		176	+28

	February 2		November 3
	2020		2019
Identifiable assets:
Agriculture and turf	$	10,817	$	10,379	+4
Construction and forestry		9,376		9,387
Financial services		47,279		48,483	-2
Corporate		4,349		4,762	-9
Total assets	$	71,821	$	73,011	-2

* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

XML

FINANCING RECEIVABLES (Tables)

3 Months Ended

Feb. 02, 2020

FINANCING RECEIVABLES

Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	February 2, 2020
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	150	$	65	$	3	$	218
Construction and forestry		96		36		19		151
Other:
Agriculture and turf		66		21		1		88
Construction and forestry		29		11				40
Total	$	341	$	133	$	23	$	497
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	218	$	283	$	18,514	$	19,015
Construction and forestry		151		131		3,488		3,770
Other:
Agriculture and turf		88		100		7,457		7,645
Construction and forestry		40		28		1,431		1,499
Total	$	497	$	542	$	30,890		31,929
Less allowance for credit losses								157
Total financing receivables – net							$	31,772

	November 3, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	138	$	73	$	1	$	212
Construction and forestry		79		29		4		112
Other:
Agriculture and turf		39		19		1		59
Construction and forestry		26		7				33
Total	$	282	$	128	$	6	$	416
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	212	$	268	$	18,931	$	19,411
Construction and forestry		112		127		3,450		3,689
Other:
Agriculture and turf		59		28		8,986		9,073
Construction and forestry		33		26		1,496		1,555
Total	$	416	$	449	$	32,863		33,728
Less allowance for credit losses								150
Total financing receivables – net							$	33,578

	January 27, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	162	$	63	$	1	$	226
Construction and forestry		102		47		1		150
Other:
Agriculture and turf		65		23		1		89
Construction and forestry		16		8				24
Total	$	345	$	141	$	3	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	226	$	296	$	17,408	$	17,930
Construction and forestry		150		107		3,092		3,349
Other:
Agriculture and turf		89		28		7,213		7,330
Construction and forestry		24		10		1,247		1,281
Total	$	489	$	441	$	28,960		29,890
Less allowance for credit losses								177
Total financing receivables – net							$	29,713

Analysis of the Allowance for Credit Losses and Investment in Financing Receivables

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

	Three Months Ended February 2, 2020
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	89	$	40	$	21	$	150
Provision (credit)		15		(1)		7		21
Write-offs		(17)		(7)		(1)		(25)
Recoveries		2		8				10
Translation adjustments		(1)				2		1
End of period balance *	$	88	$	40	$	29	$	157
Financing receivables:
End of period balance	$	22,785	$	2,733	$	6,411	$	31,929
Balance individually evaluated **	$	170			$	86	$	256

	Three Months Ended January 27, 2019
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	113	$	43	$	22	$	178
Provision (credit)		6		(1)		2		7
Write-offs		(11)		(4)		(1)		(16)
Recoveries		4		5				9
Translation adjustments		(1)						(1)
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	21,279	$	2,737	$	5,874	$	29,890
Balance individually evaluated **	$	118	$	2	$	13	$	133

* Individual allowances were not significant.

** Remainder is collectively evaluated.

Analysis of the Impaired Financing Receivables

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
February 2, 2020*
Receivables with specific allowance ***	$	117	$	116	$	22	$	119
Receivables without a specific allowance **		31		30				32
Total	$	148	$	146	$	22	$	151
Agriculture and turf	$	120	$	120	$	17	$	123
Construction and forestry	$	28	$	26	$	5	$	28
November 3, 2019*
Receivables with specific allowance **	$	40	$	39	$	13	$	40
Receivables without a specific allowance **		32		31				37
Total	$	72	$	70	$	13	$	77
Agriculture and turf	$	49	$	48	$	8	$	52
Construction and forestry	$	23	$	22	$	5	$	25
January 27, 2019*
Receivables with specific allowance **	$	30	$	30	$	12	$	30
Receivables without a specific allowance **		36		34				36
Total	$	66	$	64	$	12	$	66
Agriculture and turf	$	49	$	48	$	9	$	49
Construction and forestry	$	17	$	16	$	3	$	17

*   Finance income recognized was not material.

**  Primarily retail notes.

***   Primarily retail notes and wholesale receivables.

XML

DIVIDENDS DECLARED AND PAID (Tables)

3 Months Ended

Feb. 02, 2020

DIVIDENDS DECLARED AND PAID

Dividends Declared and Paid

Dividends declared and paid on a per share basis were as follows:

	Three Months Ended
	February 2		January 27
	2020		2019
Dividends declared	$	.76	$	.76
Dividends paid	$	.76	$	.69

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Feb. 02, 2020

CASH FLOW INFORMATION

Restricted Cash Held

The Company’s restricted cash held at February 2, 2020, November 3, 2019, January 27, 2019, and October 28, 2018 was as follows in millions of dollars:

	February 2		November 3		January 27		October 28
	2020		2019		2019		2018
Equipment operations	$	21	$	21	$	10	$	7
Financial services		87		78		87		104
Total	$	108	$	99	$	97	$	111

XML

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

3 Months Ended

Feb. 02, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

(14)  Goodwill and Other Intangible Assets-Net

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

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 28, 2018	$	583	$	2,518	$	3,101
Translation adjustments and other		2		(55)		(53)
Goodwill at January 27, 2019	$	585	$	2,463	$	3,048
Goodwill at November 3, 2019	$	574	$	2,343	$	2,917
Translation adjustments and other		(3)		31		28
Goodwill at February 2, 2020	$	571	$	2,374	$	2,945

There were no accumulated impairment losses in the reported periods.

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

	February 2		November 3		January 27
	2020		2019		2019
Amortized intangible assets:
Customer lists and relationships	$	517	$	511	$	538
Technology, patents, trademarks, and other		1,013		1,028		1,053
Total at cost		1,530		1,539		1,591
Less accumulated amortization *		304		282		207
Total		1,226		1,257		1,384
Unamortized intangible assets:
In-process research and development		123		123		123
Other intangible assets – net	$	1,349	$	1,380	$	1,507

*   Accumulated amortization at February 2, 2020, November 3, 2019, and January 27, 2019 for customer lists and relationships totaled $86 million, $77 million, and $54 million and technology, patents, trademarks, and other totaled $218 million, $205 million, and $153 million, respectively.

The amortization of other intangible assets in the first quarter of 2020 and 2019 was $25 million and $27 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2020 – $77, 2021 – $101, 2022 – $100, 2023 – $98, and 2024 – $96.

XML

DERIVATIVE INSTRUMENTS

3 Months Ended

Feb. 02, 2020

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

(18)  Derivative Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate exposure at certain

equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. 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 February 2, 2020, November 3, 2019, and January 27, 2019 were $2,900 million, $3,150 million, and $2,800 million, respectively. Fair value gains or losses on cash flow hedges were recorded in OCI and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of loss recorded in OCI at February 2, 2020 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $9 million after-tax. There were no gains or losses 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 February 2, 2020, November 3, 2019, and January 27, 2019 were $9,424 million, $8,717 million, and $8,622 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow:

			Cumulative Increase (Decrease) of Fair
			Value Hedging Adjustments Included in
			the Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
	Hedged Item		Relationships		Relationships		Total
February 2, 2020
Long-term borrowings due within one year*	$	220	$	(1)	$	(5)	$	(6)
Long-term borrowings		9,521		379		(21)		358
November 3, 2019
Long-term borrowings due within one year*	$	412	$	(1)	$	(4)	$	(5)
Long-term borrowings		8,532		295		(32)		263
January 27, 2019
Long-term borrowings due within one year*	$	192	$	1	$	(4)	$	(3)
Long-term borrowings		8,177		(179)		(41)		(220)

* Presented in short-term borrowings

Derivatives not designated as hedging instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings, purchases or sales of inventory, and below market retail

financing programs. The total notional amounts of these interest rate swaps at February 2, 2020, November 3, 2019, and January 27, 2019 were $9,102 million, $9,166 million, and $8,225 million, the foreign exchange contracts were $5,249 million, $4,962 million, and $6,500 million, and the cross-currency interest rate contracts were $102 million, $92 million, and $87 million, respectively. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	February 2		November 3		January 27
Other Assets	2020		2019		2019
Designated as hedging instruments:
Interest rate contracts	$	409	$	332	$	47
Total designated		409		332		47
Not designated as hedging instruments:
Interest rate contracts		34		31		29
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total not designated		72		52		91
Total derivative assets	$	481	$	384	$	138
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	17	$	28	$	205
Total designated		17		28		205
Not designated as hedging instruments:
Interest rate contracts		40		37		27
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total not designated		84		111		93
Total derivative liabilities	$	101	$	139	$	298

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

	Three Months Ended
	February 2		January 27
	2020		2019
Fair Value Hedges:
Interest rate contracts - Interest expense	$	96	$	133
Cash Flow Hedges:
Recognized in OCI
Interest rate contracts - OCI (pretax)		(2)		(9)
Reclassified from OCI
Interest rate contracts - Interest expense		(2)		2
Not Designated as Hedges:
Interest rate contracts - Net sales	$	(4)	$	(10)
Interest rate contracts - Interest expense *		2		(8)
Foreign exchange contracts - Cost of sales		11		(5)
Foreign exchange contracts - Other operating *		(1)		20
Total not designated	$	8	$	(3)

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

Counterparty Risk and Collateral

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

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at February 2, 2020, November 3, 2019, and January 27, 2019, was $60 million, $68 million, and $233 million, respectively. In accordance with the limits established in these agreements, the Company received $26 million in cash collateral at February 2, 2020 and posted $8 million in cash collateral at January 27, 2019. No cash collateral was posted or received at November 3, 2019.

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

	Gross Amounts		Netting		Collateral
February 2, 2020	Recognized		Arrangements		Received		Net Amount
Assets	$	481	$	(60)	$	(26)	$	395
Liabilities		101		(60)				41

	Gross Amounts		Netting		Collateral
November 3, 2019	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	384	$	(70)		$	314
Liabilities		139		(70)			69

	Gross Amounts		Netting		Collateral
January 27, 2019	Recognized		Arrangements		Paid		Net Amount
Assets	$	138	$	(75)			$	63
Liabilities		298		(75)	$	(8)		215

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies)

3 Months Ended

Feb. 02, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

Fiscal Period, Policy

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 year 2020 and 2019 were February 2, 2020 and January 27, 2019, respectively. Both periods contained 13 weeks.

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.

Financing Receivables - Non-Performing, Policy

Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

Troubled Debt Restructuring, Policy

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest.

Inventory Valuation, Policy

Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method.

Lessee Lease, Policy

The Company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than 12 months for both operating and finance leases.

The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than 12 months and that do not meet the finance lease criteria are classified as operating leases.

Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from one to 10 years. Options that the Company is reasonably certain to exercise are included in the lease term.

Lease and Non-lease Components, Policy

The Company has elected to combine lease and non-lease components, such as maintenance and utilities costs included in a lease contract, for all asset classes.

Short-term lease, Policy

Leases with an initial term of 12 months or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense.

Lessor Leases, Policy

The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment.

Product Warranties

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

Extended Product Warranty, Policy

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period.

Fair Value of Financial Instruments, Policy

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

Derivative Financial Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, the Company has interest rate exposure at certain

equipment operations units for below market retail financing programs that are used as sales incentives and are offered for extended periods.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. 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.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019	Oct. 28, 2018
Transfer of inventory to equipment on operating leases	$ 112	$ 106
Accounts payable related to purchases of property and equipment	48	33
Restricted cash	108	97	$ 99	$ 111
Equipment Operations
Restricted cash	21	10	21	7
Financial Services
Restricted cash	$ 87	$ 87	$ 78	$ 104

XML

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Feb. 02, 2020

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	February 2, 2020				November 3, 2019				January 27, 2019
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations	$	130	$	123	$	65	$	61	$	102	$	99
Financial services		27,164		27,177		29,130		29,106		25,048		24,900
Total	$	27,294	$	27,300	$	29,195	$	29,167	$	25,150	$	24,999
Financing receivables securitized – net:
Equipment operations	$	42	$	40	$	44	$	43	$	67	$	65
Financial services		4,436		4,464		4,339		4,362		4,496		4,454
Total	$	4,478	$	4,504	$	4,383	$	4,405	$	4,563	$	4,519
Short-term securitization borrowings:
Equipment operations	$	42	$	42	$	44	$	45	$	67	$	67
Financial services		4,374		4,403		4,277		4,302		4,397		4,391
Total	$	4,416	$	4,445	$	4,321	$	4,347	$	4,464	$	4,458
Long-term borrowings due within one year: **
Equipment operations	$	567	$	567	$	642	$	645	$	928	$	937
Financial services		6,638		6,650		6,786		6,788		5,198		5,186
Total	$	7,205	$	7,217	$	7,428	$	7,433	$	6,126	$	6,123
Long-term borrowings: **
Equipment operations	$	5,544	$	6,403	$	5,415	$	6,138	$	4,712	$	4,989
Financial services		24,908		25,299		24,814		25,122		23,143		23,217
Total	$	30,452	$	31,702	$	30,229	$	31,260	$	27,855	$	28,206

* Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** Carrying values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Notes 3 and 15).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*:

	February 2		November 3		January 27
	2020		2019		2019
Level 1:
Marketable securities
International equity securities ***	$	3
Equity fund ***		62	$	59	$	51
U.S. government debt securities		52		50		44
Total Level 1 marketable securities		117		109		95
Level 2:
Marketable securities
U.S. government debt securities		87		81		76
Municipal debt securities		62		60		51
Corporate debt securities		173		165		141
International debt securities		4		5		9
Mortgage-backed securities**		165		160		145
Total Level 2 marketable securities		491		471		422
Other assets
Derivatives:
Interest rate contracts		443		363		76
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total Level 2 other assets		481		384		138
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		57		65		232
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total Level 2 accounts payable and accrued expenses		101		139		298
Level 3:
Marketable securities
International debt securities		1		1		6

* Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds and time deposits.

**  Primarily issued by U.S. government sponsored enterprises.

***During the first quarter of 2020 and 2019 net unrealized gains on equity securities recorded in “Other income” were $6 million and none, respectively.

Contractual Maturities of Debt Securities

The contractual maturities of debt securities at February 2, 2020 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	28	$	24
Due after one through five years		96		99
Due after five through 10 years		96		103
Due after 10 years		143		153
Mortgage-backed securities		159		165
Debt securities	$	522	$	544

Fair Value, Recurring, Level 3 Measurements

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1	$	8
Principal payments				(3)
Other				1
End of period balance	$	1	$	6

Fair Value, Nonrecurring Level 3 Measurements From Impairments

Fair value, nonrecurring Level 3 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended
	February 2	November 3		January 27	February 2	January 27
	2020	2019		2019	2020	2019
Equipment on operating leases – net		$	855
Other assets		$	142

*  See financing receivables with specific allowances in Note 11. Losses were not significant.

XML

INVENTORIES (Tables)

3 Months Ended

Feb. 02, 2020

INVENTORIES

Major Classification of Inventories

If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows:

	February 2		November 3		January 27
	2020		2019		2019
Raw materials and supplies	$	2,311	$	2,285	$	2,506
Work-in-process		818		747		1,026
Finished goods and parts		4,946		4,613		5,693
Total FIFO value		8,075		7,645		9,225
Less adjustment to LIFO value		1,593		1,670		1,823
Inventories	$	6,482	$	5,975	$	7,402

XML

FINANCING RECEIVABLES - Impaired (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Analysis of Impaired Financing Receivables
Recorded investment, with specific allowance	$ 117	$ 30	$ 40
Recorded investment, without specific allowance	31	36	32
Recorded Investment	148	66	72
Unpaid principal balance, with specific allowance	116	30	39
Unpaid principal balance, without specific allowance	30	34	31
Unpaid Principal Balance	146	64	70
Specific Allowance	22	12	13
Average recorded investment, with specific allowance	119	30	40
Average recorded investment, without specific allowance	32	36	37
Average Recorded Investment	151	66	77
Agriculture and Turf
Analysis of Impaired Financing Receivables
Recorded Investment	120	49	49
Unpaid Principal Balance	120	48	48
Specific Allowance	17	9	8
Average Recorded Investment	123	49	52
Construction and Forestry
Analysis of Impaired Financing Receivables
Recorded Investment	28	17	23
Unpaid Principal Balance	26	16	22
Specific Allowance	5	3	5
Average Recorded Investment	$ 28	$ 17	$ 25

XML

DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Interest Rate Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 9,102	$ 9,166	$ 8,225
Foreign Exchange Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	5,249	4,962	6,500
Cross-Currency Interest Rate Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 102	$ 92	$ 87

XML

STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands	1 Months Ended	3 Months Ended
	Dec. 29, 2019	Feb. 02, 2020
Share-based Compensation, Aggregate Disclosures
Number of additional shares authorized for grant related to stock option and restricted stock awards		6,800
Stock Options
Share-based Compensation, Aggregate Disclosures
Options granted (in shares)	495
Options granted, exercise price (in dollars per share)	$ 169.70
Options granted, fair value (in dollars per share)	$ 35.83
Options outstanding (in shares)		6,800
Options outstanding, weighted-average exercise price (in dollars per share)		$ 99.21
Fair value assumptions method used	lattice model
Restricted Stock Units
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		342
Restricted Stock Units Subject to Service Based Conditions
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		275
Restricted stock units granted, weighted-average fair value (in dollars per unit)		$ 169.70
Restricted Stock Units Subject to Performance/Service Based Conditions
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		67
Restricted stock units granted, weighted-average fair value (in dollars per unit)		$ 160.81

XML

GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	$ 2,917	$ 3,101
Translation adjustments and other	28	(53)
Goodwill - net, ending balance	2,945	3,048
Accumulated impairment loss	0	0
Agriculture and Turf
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	574	583
Translation adjustments and other	(3)	2
Goodwill - net, ending balance	571	585
Construction and Forestry
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	2,343	2,518
Translation adjustments and other	31	(55)
Goodwill - net, ending balance	$ 2,374	$ 2,463

XML

SUPPLEMENTAL CONSOLIDATING DATA

3 Months Ended

Feb. 02, 2020

SUPPLEMENTAL CONSOLIDATING DATA

SUPPLEMENTAL CONSOLIDATING DATA

(21) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Net Sales and Revenues
Net sales	$	6,530	$	6,941
Finance and interest income		27		23	$	936	$	866
Other income		209		215		62		60
Total		6,766		7,179		998		926
Costs and Expenses
Cost of sales		5,078		5,432
Research and development expenses		425		407
Selling, administrative and general expenses		672		645		138		121
Interest expense		63		71		275		287
Interest compensation to Financial Services		64		69
Other operating expenses		72		71		408		325
Total		6,374		6,695		821		733
Income of Consolidated Group before Income Taxes		392		484		177		193
Provision for income taxes		9		144		41		40
Income of Consolidated Group		383		340		136		153
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Financial Services		137		154		1		1
Other		(2)		6
Total		135		160		1		1
Net Income		518		500		137		154
Less: Net income attributable to noncontrolling interests		1		2
Net Income Attributable to Deere & Company	$	517	$	498	$	137	$	154

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	February 2		November 3		January 27		February 2		November 3		January 27
	2020		2019		2019		2020		2019		2019
Assets
Cash and cash equivalents	$	2,862	$	3,175	$	2,671	$	740	$	682	$	955
Marketable securities		4		1		8		605		580		515
Receivables from unconsolidated subsidiaries and affiliates		1,425		2,017		274
Trade accounts and notes receivable – net		1,115		1,482		1,177		5,707		5,153		5,746
Financing receivables – net		130		65		102		27,164		29,130		25,048
Financing receivables securitized – net		42		44		67		4,436		4,339		4,496
Other receivables		1,252		1,376		1,485		131		116		184
Equipment on operating leases – net								7,504		7,567		6,904
Inventories		6,482		5,975		7,402
Property and equipment – net		5,857		5,929		5,739		43		44		46
Investments in unconsolidated subsidiaries and affiliates		5,317		5,326		5,175		17		16		16
Goodwill		2,945		2,917		3,048
Other intangible assets – net		1,349		1,380		1,507
Retirement benefits		871		836		1,291		58		58		57
Deferred income taxes		1,821		1,896		1,507		56		57		70
Other assets		1,546		1,158		1,241		818		741		593
Total Assets	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	947	$	987	$	1,494	$	9,061	$	9,797	$	9,244
Short-term securitization borrowings		42		44		67		4,374		4,277		4,397
Payables to unconsolidated subsidiaries and affiliates		146		142		227		1,387		1,970		155
Accounts payable and accrued expenses		8,325		9,232		8,711		1,786		1,836		1,821
Deferred income taxes		408		414		470		546		568		798
Long-term borrowings		5,567		5,415		4,712		24,908		24,814		23,143
Retirement benefits and other liabilities		5,639		5,912		5,666		100		94		93
Total liabilities		21,074		22,146		21,347		42,162		43,356		39,651
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest		14		14		14
Stockholders’ Equity
Common stock, $1 par value (issued shares at February 2, 2020 – 536,431,204)		4,675		4,642		4,512		2,107		2,107		2,099
Common stock in treasury		(17,549)		(17,474)		(16,422)
Retained earnings		30,129		29,852		27,816		3,390		3,378		3,219
Accumulated other comprehensive income (loss)		(5,329)		(5,607)		(4,578)		(380)		(358)		(339)
Total Deere & Company stockholders' equity		11,926		11,413		11,328		5,117		5,127		4,979
Noncontrolling interests		4		4		5
Total stockholders’ equity		11,930		11,417		11,333		5,117		5,127		4,979
Total Liabilities and Stockholders’ Equity	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the consolidated financial statements.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Cash Flows from Operating Activities
Net income	$	518	$	500	$	137	$	154
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses		1		(1)		14		3
Provision for depreciation and amortization		261		260		311		276
Undistributed earnings of unconsolidated subsidiaries and affiliates		(11)		39		(1)
Credit for deferred income taxes		(7)		(31)		(22)		(25)
Changes in assets and liabilities:
Trade receivables and Equipment Operations' financing receivables		312		186
Inventories		(530)		(1,290)
Accounts payable and accrued expenses		(1,058)		(535)		(19)		(12)
Accrued income taxes payable/receivable		(43)		(429)		(10)		527
Retirement benefits		30		(6)		6		2
Other		147		(127)		30		47
Net cash provided by (used for) operating activities		(380)		(1,434)		446		972
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						6,056		5,885
Proceeds from maturities and sales of marketable securities				3		18		5
Proceeds from sales of equipment on operating leases						426		371
Cost of receivables acquired (excluding trade and wholesale)						(4,569)		(4,448)
Purchases of marketable securities				(2)		(34)		(30)
Purchases of property and equipment		(271)		(297)
Cost of equipment on operating leases acquired						(669)		(505)
Increase in trade and wholesale receivables						(382)		(1,021)
Other		(9)		(6)		11		26
Net cash provided by (used for) investing activities		(280)		(302)		857		283
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		20		88		(493)		388
Change in intercompany receivables/payables		572		1,526		(572)		(1,526)
Proceeds from long-term borrowings		167		91		1,535		2,120
Payments of long-term borrowings		(83)		(142)		(1,568)		(1,799)
Proceeds from issuance of common stock		53		51
Repurchases of common stock		(114)		(144)
Dividends paid		(242)		(220)		(125)		(200)
Other		(29)		(23)		(9)		(8)
Net cash provided by (used for) financing activities		344		1,227		(1,232)		(1,025)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		3		(12)		(4)		(1)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(313)		(521)		67		229
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		3,196		3,202		760		813
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	2,883	$	2,681	$	827	$	1,042

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

XML

INVENTORIES

3 Months Ended

Feb. 02, 2020

INVENTORIES

INVENTORIES

(13)  Inventories

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

	February 2		November 3		January 27
	2020		2019		2019
Raw materials and supplies	$	2,311	$	2,285	$	2,506
Work-in-process		818		747		1,026
Finished goods and parts		4,946		4,613		5,693
Total FIFO value		8,075		7,645		9,225
Less adjustment to LIFO value		1,593		1,670		1,823
Inventories	$	6,482	$	5,975	$	7,402

XML

FAIR VALUE MEASUREMENTS

3 Months Ended

Feb. 02, 2020

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

(17)  Fair Value Measurements

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

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

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	February 2, 2020				November 3, 2019				January 27, 2019
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations	$	130	$	123	$	65	$	61	$	102	$	99
Financial services		27,164		27,177		29,130		29,106		25,048		24,900
Total	$	27,294	$	27,300	$	29,195	$	29,167	$	25,150	$	24,999
Financing receivables securitized – net:
Equipment operations	$	42	$	40	$	44	$	43	$	67	$	65
Financial services		4,436		4,464		4,339		4,362		4,496		4,454
Total	$	4,478	$	4,504	$	4,383	$	4,405	$	4,563	$	4,519
Short-term securitization borrowings:
Equipment operations	$	42	$	42	$	44	$	45	$	67	$	67
Financial services		4,374		4,403		4,277		4,302		4,397		4,391
Total	$	4,416	$	4,445	$	4,321	$	4,347	$	4,464	$	4,458
Long-term borrowings due within one year: **
Equipment operations	$	567	$	567	$	642	$	645	$	928	$	937
Financial services		6,638		6,650		6,786		6,788		5,198		5,186
Total	$	7,205	$	7,217	$	7,428	$	7,433	$	6,126	$	6,123
Long-term borrowings: **
Equipment operations	$	5,544	$	6,403	$	5,415	$	6,138	$	4,712	$	4,989
Financial services		24,908		25,299		24,814		25,122		23,143		23,217
Total	$	30,452	$	31,702	$	30,229	$	31,260	$	27,855	$	28,206

* Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** Carrying values exclude finance lease liabilities that are presented as borrowings beginning in 2020 (see Notes 3 and 15).

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

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

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow*:

	February 2		November 3		January 27
	2020		2019		2019
Level 1:
Marketable securities
International equity securities ***	$	3
Equity fund ***		62	$	59	$	51
U.S. government debt securities		52		50		44
Total Level 1 marketable securities		117		109		95
Level 2:
Marketable securities
U.S. government debt securities		87		81		76
Municipal debt securities		62		60		51
Corporate debt securities		173		165		141
International debt securities		4		5		9
Mortgage-backed securities**		165		160		145
Total Level 2 marketable securities		491		471		422
Other assets
Derivatives:
Interest rate contracts		443		363		76
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total Level 2 other assets		481		384		138
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts		57		65		232
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total Level 2 accounts payable and accrued expenses		101		139		298
Level 3:
Marketable securities
International debt securities		1		1		6

* Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds and time deposits.

**  Primarily issued by U.S. government sponsored enterprises.

***During the first quarter of 2020 and 2019 net unrealized gains on equity securities recorded in “Other income” were $6 million and none, respectively.

The contractual maturities of debt securities at February 2, 2020 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	28	$	24
Due after one through five years		96		99
Due after five through 10 years		96		103
Due after 10 years		143		153
Mortgage-backed securities		159		165
Debt securities	$	522	$	544

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1	$	8
Principal payments				(3)
Other				1
End of period balance	$	1	$	6

Fair value, nonrecurring Level 3 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended
	February 2	November 3		January 27	February 2	January 27
	2020	2019		2019	2020	2019
Equipment on operating leases – net		$	855
Other assets		$	142

*  See financing receivables with specific allowances in Note 11. Losses were not significant.

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

Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data.

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

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

Equipment on Operating Leases – Net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values.

Other Assets – The impairments are measured at the fair value of the matured operating lease inventory. The valuations were based on a market approach. The inputs include sales of comparable assets.

XML

DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Feb. 02, 2020

DERIVATIVE INSTRUMENTS

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

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships in millions of dollars follow:

			Cumulative Increase (Decrease) of Fair
			Value Hedging Adjustments Included in
			the Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
	Hedged Item		Relationships		Relationships		Total
February 2, 2020
Long-term borrowings due within one year*	$	220	$	(1)	$	(5)	$	(6)
Long-term borrowings		9,521		379		(21)		358
November 3, 2019
Long-term borrowings due within one year*	$	412	$	(1)	$	(4)	$	(5)
Long-term borrowings		8,532		295		(32)		263
January 27, 2019
Long-term borrowings due within one year*	$	192	$	1	$	(4)	$	(3)
Long-term borrowings		8,177		(179)		(41)		(220)

* Presented in short-term borrowings

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	February 2		November 3		January 27
Other Assets	2020		2019		2019
Designated as hedging instruments:
Interest rate contracts	$	409	$	332	$	47
Total designated		409		332		47
Not designated as hedging instruments:
Interest rate contracts		34		31		29
Foreign exchange contracts		37		20		59
Cross-currency interest rate contracts		1		1		3
Total not designated		72		52		91
Total derivative assets	$	481	$	384	$	138
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	17	$	28	$	205
Total designated		17		28		205
Not designated as hedging instruments:
Interest rate contracts		40		37		27
Foreign exchange contracts		40		71		64
Cross-currency interest rate contracts		4		3		2
Total not designated		84		111		93
Total derivative liabilities	$	101	$	139	$	298

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 statement of consolidated income consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Fair Value Hedges:
Interest rate contracts - Interest expense	$	96	$	133
Cash Flow Hedges:
Recognized in OCI
Interest rate contracts - OCI (pretax)		(2)		(9)
Reclassified from OCI
Interest rate contracts - Interest expense		(2)		2
Not Designated as Hedges:
Interest rate contracts - Net sales	$	(4)	$	(10)
Interest rate contracts - Interest expense *		2		(8)
Foreign exchange contracts - Cost of sales		11		(5)
Foreign exchange contracts - Other operating *		(1)		20
Total not designated	$	8	$	(3)

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

Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral

The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows:

	Gross Amounts		Netting		Collateral
February 2, 2020	Recognized		Arrangements		Received		Net Amount
Assets	$	481	$	(60)	$	(26)	$	395
Liabilities		101		(60)				41

	Gross Amounts		Netting		Collateral
November 3, 2019	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	384	$	(70)		$	314
Liabilities		139		(70)			69

	Gross Amounts		Netting		Collateral
January 27, 2019	Recognized		Arrangements		Paid		Net Amount
Assets	$	138	$	(75)			$	63
Liabilities		298		(75)	$	(8)		215

XML

GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables)

3 Months Ended

Feb. 02, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

Changes in Goodwill by Operating Segments

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

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 28, 2018	$	583	$	2,518	$	3,101
Translation adjustments and other		2		(55)		(53)
Goodwill at January 27, 2019	$	585	$	2,463	$	3,048
Goodwill at November 3, 2019	$	574	$	2,343	$	2,917
Translation adjustments and other		(3)		31		28
Goodwill at February 2, 2020	$	571	$	2,374	$	2,945

There were no accumulated impairment losses in the reported periods.

Components of Other Intangible Assets

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

	February 2		November 3		January 27
	2020		2019		2019
Amortized intangible assets:
Customer lists and relationships	$	517	$	511	$	538
Technology, patents, trademarks, and other		1,013		1,028		1,053
Total at cost		1,530		1,539		1,591
Less accumulated amortization *		304		282		207
Total		1,226		1,257		1,384
Unamortized intangible assets:
In-process research and development		123		123		123
Other intangible assets – net	$	1,349	$	1,380	$	1,507

*   Accumulated amortization at February 2, 2020, November 3, 2019, and January 27, 2019 for customer lists and relationships totaled $86 million, $77 million, and $54 million and technology, patents, trademarks, and other totaled $218 million, $205 million, and $153 million, respectively.

XML

NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Nov. 04, 2019	Nov. 03, 2019	Jan. 27, 2019
New accounting standards
Other intangible assets - net	$ 1,349	$ 1,357	$ 1,380	$ 1,507
Other assets	2,362	2,301	1,899	1,832
Short-term borrowings	10,008	10,795	10,784	10,738
Accounts payable and accrued expenses	8,630	10,004	9,656	9,086
Long-term borrowings	$ 30,475	30,249	$ 30,229	$ 27,855
ASU 2016-02
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List]	Modified Retrospective
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Use of Hindsight [true false]	false
ASU 2017-08
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2018-07
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2016-13
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false
ASU 2018-15
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false
ASU 2019-12
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false
Cumulative Effect from Adoption | ASU 2016-02
New accounting standards
Other intangible assets - net		(23)
Other assets		402
Short-term borrowings		11
Accounts payable and accrued expenses		348
Long-term borrowings		$ 20

XML

FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Allowance:
Beginning of period balance	$ 150	$ 178
Provision (credit)	21	7
Write-offs	(25)	(16)
Recoveries	10	9
Translation adjustments	1	(1)
End of period balance	157	177
Financing receivables:
End of period balance	31,929	29,890	$ 33,728
Balance individually evaluated	256	133
Retail Notes
Allowance:
Beginning of period balance	89	113
Provision (credit)	15	6
Write-offs	(17)	(11)
Recoveries	2	4
Translation adjustments	(1)	(1)
End of period balance	88	111
Financing receivables:
End of period balance	22,785	21,279
Balance individually evaluated	170	118
Revolving Charge Accounts
Allowance:
Beginning of period balance	40	43
Provision (credit)	(1)	(1)
Write-offs	(7)	(4)
Recoveries	8	5
End of period balance	40	43
Financing receivables:
End of period balance	2,733	2,737
Balance individually evaluated		2
Other Financing Receivables
Allowance:
Beginning of period balance	21	22
Provision (credit)	7	2
Write-offs	(1)	(1)
Translation adjustments	2
End of period balance	29	23
Financing receivables:
End of period balance	6,411	5,874
Balance individually evaluated	$ 86	$ 13

XML

DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Fair Value Hedges | Designated as Hedging Instruments
Fair Value Hedges
Notional amount of interest rate fair value hedge derivatives	$ 9,424	$ 8,717	$ 8,622
Long-term Borrowings Due in One Year
Borrowings Designated in Fair Value Hedging Relationships
Carrying Amount of Hedged Item	220	412	192
Active Hedging Relationships	(1)	(1)	1
Discontinued Relationships	(5)	(4)	(4)
Total	(6)	(5)	(3)
Long-term Borrowings
Borrowings Designated in Fair Value Hedging Relationships
Carrying Amount of Hedged Item	9,521	8,532	8,177
Active Hedging Relationships	379	295	(179)
Discontinued Relationships	(21)	(32)	(41)
Total	$ 358	$ 263	$ (220)

XML

DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
DERIVATIVE INSTRUMENTS
Fair value of derivatives with credit-risk-related contingent features in a liability position	$ 60	$ 68	$ 233
Cash collateral received	26	0
Cash collateral paid		0	8
Derivative Assets
Gross amounts recognized	481	384	138
Netting arrangements	(60)	(70)	(75)
Collateral received	(26)	0
Net amount	395	314	63
Derivative Liabilities
Gross amounts recognized	101	139	298
Netting arrangements	(60)	(70)	(75)
Collateral paid		0	(8)
Net amount	$ 41	$ 69	$ 215

XML

INVENTORIES (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
INVENTORIES
Raw materials and supplies	$ 2,311	$ 2,285	$ 2,506
Work-in-process	818	747	1,026
Finished goods and parts	4,946	4,613	5,693
Total FIFO value	8,075	7,645	9,225
Less adjustment to LIFO value	1,593	1,670	1,823
Inventories	$ 6,482	$ 5,975	$ 7,402

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical)	Feb. 02, 2020 $ / shares shares
CONDENSED CONSOLIDATED BALANCE SHEET
Common stock, par value (in dollars per share) | $ / shares	$ 1
Common stock, issued shares | shares	536,431,204

XML

PENSION AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Net Periodic Cost
Location of costs excluding the service component	us-gaap:OtherCostOfOperatingRevenue	us-gaap:OtherCostOfOperatingRevenue
Pensions
Net Periodic Cost
Service cost	$ 84	$ 66
Interest cost	87	111
Expected return on plan assets	(205)	(200)
Amortization of actuarial (gain) loss	62	35
Amortization of prior service (credit) cost	3	3
Settlements	3
Net cost	34	15
Employer Contributions
Defined benefit plan employer contributions	24
Defined benefit plan employer contributions expected for the remainder of the fiscal year	68
OPEB
Net Periodic Cost
Service cost	12	10
Interest cost	37	54
Expected return on plan assets	(12)	(9)
Amortization of actuarial (gain) loss	7	5
Amortization of prior service (credit) cost	(1)	(18)
Curtailments	21
Net cost	64	$ 42
Benefit obligation reduction	(245)
Employer Contributions
Defined benefit plan employer contributions	43
Defined benefit plan employer contributions expected for the remainder of the fiscal year	397
OPEB | United States
Employer Contributions
Defined benefit plan employer contributions expected for the remainder of the fiscal year	300
OPEB | Employee-Separation Program | United States
Net Periodic Cost
Curtailments	$ 21

XML

Document and Entity Information	3 Months Ended
	Feb. 02, 2020 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Feb. 02, 2020
Entity File Number	1-4121
Entity Registrant Name	DEERE & CO
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2382580
Entity Address, Address Line One	One John Deere Place
Entity Address, City or Town	Moline
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61265
City Area Code	309
Local Phone Number	765-8000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	313,619,999
Current Fiscal Year End Date	--11-01
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000315189
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common stock, $1 par value
Trading Symbol	DE
Security Exchange Name	NYSE
8-1/2% Debentures Due 2022
Document Information [Line Items]
Title of 12(b) Security	8½% Debentures Due 2022
Trading Symbol	DE22
Security Exchange Name	NYSE
6.55% Debentures Due 2028
Document Information [Line Items]
Title of 12(b) Security	6.55% Debentures Due 2028
Trading Symbol	DE28
Security Exchange Name	NYSE

XML

REVENUE RECOGNITION - Primary Geograhical Market, Major Product Lines, and Timing (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Revenue Recognition
Net sales and revenues	$ 7,631	$ 7,984
Revenue recognized at a point in time
Revenue Recognition
Net sales and revenues	6,645	7,068
Revenue recognized over time
Revenue Recognition
Net sales and revenues	986	916
Large Agriculture
Revenue Recognition
Net sales	2,139	2,167
Small Agriculture
Revenue Recognition
Net sales	1,765	1,808
Turf
Revenue Recognition
Net sales	468	506
Construction
Revenue Recognition
Net sales	841	1,009
Compact Construction
Revenue Recognition
Net sales	288	265
Roadbuilding
Revenue Recognition
Net sales	605	598
Forestry
Revenue Recognition
Net sales	274	352
Financial Products
Revenue Recognition
Net sales and revenues	965	881
Other
Revenue Recognition
Net sales and revenues	286	398
United States
Revenue Recognition
Net sales and revenues	4,163	4,366
Canada
Revenue Recognition
Net sales and revenues	466	577
Western Europe
Revenue Recognition
Net sales and revenues	1,139	1,205
Central Europe and CIS
Revenue Recognition
Net sales and revenues	389	328
Latin America
Revenue Recognition
Net sales and revenues	680	762
Asia, Africa, Australia, New Zealand, and Middle East
Revenue Recognition
Net sales and revenues	794	746
Agriculture and Turf
Revenue Recognition
Net sales and revenues	4,595	4,797
Agriculture and Turf | Revenue recognized at a point in time
Revenue Recognition
Net sales and revenues	4,540	4,755
Agriculture and Turf | Revenue recognized over time
Revenue Recognition
Net sales and revenues	55	42
Agriculture and Turf | Large Agriculture
Revenue Recognition
Net sales	2,139	2,167
Agriculture and Turf | Small Agriculture
Revenue Recognition
Net sales	1,765	1,808
Agriculture and Turf | Turf
Revenue Recognition
Net sales	468	506
Agriculture and Turf | Financial Products
Revenue Recognition
Net sales and revenues	27	20
Agriculture and Turf | Other
Revenue Recognition
Net sales and revenues	196	296
Agriculture and Turf | United States
Revenue Recognition
Net sales and revenues	2,500	2,628
Agriculture and Turf | Canada
Revenue Recognition
Net sales and revenues	138	172
Agriculture and Turf | Western Europe
Revenue Recognition
Net sales and revenues	778	848
Agriculture and Turf | Central Europe and CIS
Revenue Recognition
Net sales and revenues	220	148
Agriculture and Turf | Latin America
Revenue Recognition
Net sales and revenues	455	548
Agriculture and Turf | Asia, Africa, Australia, New Zealand, and Middle East
Revenue Recognition
Net sales and revenues	504	453
Construction and Forestry
Revenue Recognition
Net sales and revenues	2,105	2,332
Construction and Forestry | Revenue recognized at a point in time
Revenue Recognition
Net sales and revenues	2,079	2,313
Construction and Forestry | Revenue recognized over time
Revenue Recognition
Net sales and revenues	26	19
Construction and Forestry | Construction
Revenue Recognition
Net sales	841	1,009
Construction and Forestry | Compact Construction
Revenue Recognition
Net sales	288	265
Construction and Forestry | Roadbuilding
Revenue Recognition
Net sales	605	598
Construction and Forestry | Forestry
Revenue Recognition
Net sales	274	352
Construction and Forestry | Financial Products
Revenue Recognition
Net sales and revenues	7	6
Construction and Forestry | Other
Revenue Recognition
Net sales and revenues	90	102
Construction and Forestry | United States
Revenue Recognition
Net sales and revenues	1,020	1,163
Construction and Forestry | Canada
Revenue Recognition
Net sales and revenues	172	248
Construction and Forestry | Western Europe
Revenue Recognition
Net sales and revenues	339	337
Construction and Forestry | Central Europe and CIS
Revenue Recognition
Net sales and revenues	159	171
Construction and Forestry | Latin America
Revenue Recognition
Net sales and revenues	159	150
Construction and Forestry | Asia, Africa, Australia, New Zealand, and Middle East
Revenue Recognition
Net sales and revenues	256	263
Financial Services
Revenue Recognition
Net sales and revenues	931	855
Financial Services | Revenue recognized at a point in time
Revenue Recognition
Net sales and revenues	26
Financial Services | Revenue recognized over time
Revenue Recognition
Net sales and revenues	905	855
Financial Services | Financial Products
Revenue Recognition
Net sales and revenues	931	855
Financial Services | United States
Revenue Recognition
Net sales and revenues	643	575
Financial Services | Canada
Revenue Recognition
Net sales and revenues	156	157
Financial Services | Western Europe
Revenue Recognition
Net sales and revenues	22	20
Financial Services | Central Europe and CIS
Revenue Recognition
Net sales and revenues	10	9
Financial Services | Latin America
Revenue Recognition
Net sales and revenues	66	64
Financial Services | Asia, Africa, Australia, New Zealand, and Middle East
Revenue Recognition
Net sales and revenues	$ 34	$ 30

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

3 Months Ended

Feb. 02, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2)  Summary of Significant Accounting Policies and Cash Flow Information

The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that 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 that 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.

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.

CASH FLOW INFORMATION

Cash Flow Information

All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities.

The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $112 million and $106 million in the first three months of 2020 and 2019, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $48 million and $33 million at February 2, 2020 and January 27, 2019, respectively.

The Company’s restricted cash held at February 2, 2020, November 3, 2019, January 27, 2019, and October 28, 2018 was as follows in millions of dollars:

	February 2		November 3		January 27		October 28
	2020		2019		2019		2018
Equipment operations	$	21	$	21	$	10	$	7
Financial services		87		78		87		104
Total	$	108	$	99	$	97	$	111

The equipment operations’ restricted cash relates to miscellaneous operational activities. The financial services restricted cash primarily relates to securitization of financing receivables (see Note 12). The restricted cash is recorded in “Other assets” in the consolidated balance sheet.

XML

OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Other Comprehensive Income (Loss), Before Tax
Interest expense	$ (336)	$ (353)
Total other comprehensive income (loss), before tax	369	(137)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Total other comprehensive income (loss), tax (expense) credit	(91)	(6)
Other Comprehensive Income (Loss), After Tax
Other Comprehensive Income (Loss), Net of Income Taxes	278	(143)
Cumulative Translation Adjustment
Other Comprehensive Income (Loss), Before Tax
Total other comprehensive income (loss), before tax	43	(162)
Other Comprehensive Income (Loss), After Tax
Other Comprehensive Income (Loss), Net of Income Taxes	43	(162)
Unrealized Gain (Loss) on Derivatives
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	(2)	(9)
Total other comprehensive income (loss), before tax		(11)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	1	2
Total other comprehensive income (loss), tax (expense) credit		2
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	(1)	(7)
Other Comprehensive Income (Loss), Net of Income Taxes		(9)
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of accumulated other comprehensive income (loss)
Other Comprehensive Income (Loss), Before Tax
Interest expense	2	(2)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(1)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	1
Other Comprehensive Income (Loss), Net of Income Taxes		(2)
Unrealized Gain (Loss) on Debt Securities
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	6	10
Total other comprehensive income (loss), before tax	6	10
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	(1)	(2)
Total other comprehensive income (loss), tax (expense) credit	(1)	(2)
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	5	8
Other Comprehensive Income (Loss), Net of Income Taxes	5	8
Retirement Benefits Adjustment
Other Comprehensive Income (Loss), Before Tax
Total other comprehensive income (loss), before tax	320	26
Other Comprehensive Income (Loss), Tax (Expense) Credit
Total other comprehensive income (loss), tax (expense) credit	(90)	(6)
Other Comprehensive Income (Loss), After Tax
Other Comprehensive Income (Loss), Net of Income Taxes	230	20
Retirement Benefits Adjustment | Pensions
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	1	1
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	1	1
Retirement Benefits Adjustment | OPEB
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	245
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	(60)
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	185
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	62	35
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(26)	(8)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	36	27
Actuarial (Gain) Loss | Reclassification out of accumulated other comprehensive income (loss) | OPEB
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	7	5
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(2)	(1)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	5	4
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	3	3
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(1)	(1)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	2	2
Prior Service (Credit) Cost | Reclassification out of accumulated other comprehensive income (loss) | OPEB
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	(1)	(18)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit		4
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	(1)	$ (14)
Settlements | Reclassification out of accumulated other comprehensive income (loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	3
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(1)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	$ 2

XML

LEASES - Lessor Lease Terms (Details)	3 Months Ended
	Feb. 02, 2020
Lessor
Sales-type lease early termination options	true
Sales-type lease renewal options	true
Sales-type lease option to purchase the underlying equipment	true
Direct financing lease early termination options	true
Direct financing lease renewal options	true
Direct financing lease option to purchase the underlying equipment	true
Operating lease early termination options	true
Operating lease renewal options	true
Operating lease option to purchase the underlying equipment	true
Elected to combine lease and nonlease components	true
Elected to report consideration related to sales and value added taxes net of the related tax expense	true

XML

FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	$ 609	$ 523	$ 581
Derivative assets	481	138	384
Derivative liabilities	101	298	139
Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	481	138	384
Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	101	298	139
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	117	95	109
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Unrealized gain on equity securities	6	0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | International Equity Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	3
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	62	51	59
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. government debt securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	52	44	50
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	491	422	471
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	481	138	384
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 a Recurring Basis
Derivative liabilities	101	298	139
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	443	76	363
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	57	232	65
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	37	59	20
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	40	64	71
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	1	3	1
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	4	2	3
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | U.S. government debt securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	87	76	81
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	62	51	60
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	173	141	165
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	4	9	5
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	165	145	160
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	$ 1	$ 6	$ 1

XML

LEASES - Lease Payments for Equipment on Operating Leases (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019
Lease Payments for Equipment on Operating Leases
Remainder of 2020	$ 948
2021	871
2022	513
2023	248
2024	80
2025	3
Total	2,663
Matured operating lease inventory	$ 130	$ 163
Rental Payments for Equipment on Operating Leases
2020		1,086
2021		759
2022		419
2023		193
2024		41
Total		$ 2,498

XML

LEASES - Weighted Average Remaining Lease Term and Discount Rates - (Details)	Feb. 02, 2020
Lessee
Weighted-average remaining lease term - operating leases	7 years
Weighted-average remaining lease term - finance leases	3 years
Weighted-average discount rate - operating leases (as a percent)	2.50%
Weighted-average discount rate - finance leases (as a percent)	3.20%

XML

OTHER COMPREHENSIVE INCOME ITEMS

3 Months Ended

Feb. 02, 2020

OTHER COMPREHENSIVE INCOME ITEMS

OTHER COMPREHENSIVE INCOME ITEMS

(5)  Other Comprehensive Income Items

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

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance October 28, 2018	$	(3,237)	$	(1,203)	$	15	$	(2)	$	(4,427)
ASU No. 2016-01 adoption								(8)		(8)
Other comprehensive income (loss) items before reclassification		1		(162)		(7)		8		(160)
Amounts reclassified from accumulated other comprehensive income		19				(2)				17
Net current period other comprehensive income (loss)		20		(162)		(9)		8		(143)
Balance January 27, 2019	$	(3,217)	$	(1,365)	$	6	$	(2)	$	(4,578)
Balance November 3, 2019	$	(3,915)	$	(1,651)	$	(60)	$	19	$	(5,607)
Other comprehensive income (loss) items before reclassification		186		43		(1)		5		233
Amounts reclassified from accumulated other comprehensive income		44				1				45
Net current period other comprehensive income (loss)		230		43				5		278
Balance February 2, 2020	$	(3,685)	$	(1,608)	$	(60)	$	24	$	(5,329)

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended February 2, 2020	Amount		Credit		Amount
Cumulative translation adjustment	$	43			$	43
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(2)	$	1		(1)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		2		(1)		1
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		6		(1)		5
Net unrealized gain (loss) on debt securities		6		(1)		5
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		62		(26)		36
Prior service (credit) cost		3		(1)		2
Settlements		3		(1)		2
OPEB
Net actuarial gain (loss)		245		(60)		185
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		7		(2)		5
Prior service (credit) cost		(1)				(1)
Net unrealized gain (loss) on retirement benefits adjustment		320		(90)		230
Total other comprehensive income (loss)	$	369	$	(91)	$	278

(continued)

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 27, 2019	Amount		Credit		Amount
Cumulative translation adjustment	$	(162)			$	(162)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(9)	$	2		(7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(2)				(2)
Net unrealized gain (loss) on derivatives		(11)		2		(9)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		10		(2)		8
Net unrealized gain (loss) on debt securities		10		(2)		8
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		35		(8)		27
Prior service (credit) cost		3		(1)		2
OPEB
Reclassification to other operating expense through amortization of: *
Actuarial (gain) loss		5		(1)		4
Prior service (credit) cost		(18)		4		(14)
Net unrealized gain (loss) on retirement benefits adjustment		26		(6)		20
Total other comprehensive income (loss)	$	(137)	$	(6)	$	(143)

* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.

In the first quarter of 2020 and 2019, the noncontrolling interests’ comprehensive income was $1 million and $2 million, respectively, which consisted of net income.

XML

INCOME TAXES

3 Months Ended

Feb. 02, 2020

INCOME TAXES

INCOME TAXES

(9)  Income Taxes

The lower effective tax rate in the first quarter of 2020 primarily resulted from two discrete items. In January 2020, the Company changed the corporate structure of two foreign holding subsidiaries to be indirect branches of Deere & Company. The change in tax status generated a capital loss that will be carried back in the Company’s U.S. income tax return resulting in a $43 million benefit. In addition, a discrete benefit of $24 million was recognized for the excess tax benefits related to vesting or exercise of share-based compensation awards.

The Company’s unrecognized tax benefits at February 2, 2020 were $557 million, compared to $553 million at November 3, 2019. The liability at February 2, 2020, November 3, 2019, and January 27, 2019 consisted of approximately $105 million, $153 million, and $143 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The changes in the

unrecognized tax benefits for the first three months of 2020 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant.

XML

EARNINGS PER SHARE (Tables)

3 Months Ended

Feb. 02, 2020

EARNINGS PER SHARE

Reconciliation of Basic and Diluted Net Income Per Share

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

	Three Months Ended
	February 2		January 27
	2020		2019
Net income attributable to Deere & Company	$	517	$	498
Average shares outstanding		313.5		318.5
Basic per share	$	1.65	$	1.56
Average shares outstanding		313.5		318.5
Effect of dilutive share-based compensation		3.7		4.2
Total potential shares outstanding		317.2		322.7
Diluted per share	$	1.63	$	1.54

XML

NEW ACCOUNTING STANDARDS (Tables)

3 Months Ended

Feb. 02, 2020

Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Lease Guidance

In addition to the lease liabilities and right of use assets, land use rights were reclassified from “Other intangible assets - net” to “Other assets” and finance lease liabilities were reclassified from “Accounts payable and accrued expenses” to “Short-term borrowings” and “Long-term borrowings.” The effect of adopting the ASU on the consolidated balance sheet follows in millions of dollars:

	November 3, 2019		Cumulative Effect from Adoption		November 4, 2019
Assets
Other intangible assets - net	$	1,380	$	(23)	$	1,357
Other assets		1,899		402		2,301
Liabilities
Short-term borrowings	$	10,784	$	11	$	10,795
Accounts payable and accrued expenses		9,656		348		10,004
Long-term borrowings		30,229		20		30,249

XML

SECURITIZATION OF FINANCING RECEIVABLES (Tables)

3 Months Ended

Feb. 02, 2020

SECURITIZATION OF FINANCING RECEIVABLES

Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	February 2, 2020
Carrying value of liabilities	$	1,370
Maximum exposure to loss		1,441

Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Financing receivables securitized (retail notes)	$	4,487	$	4,395	$	4,573
Allowance for credit losses		(9)		(12)		(10)
Other assets		91		82		109
Total restricted securitized assets	$	4,569	$	4,465	$	4,672

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Short-term securitization borrowings	$	4,416	$	4,321	$	4,464
Accrued interest on borrowings		5		6		3
Total liabilities related to restricted securitized assets	$	4,421	$	4,327	$	4,467

XML

LEASES

3 Months Ended

Feb. 02, 2020

LEASES

LEASES

(15)  Leases

The Company is both a lessee and a lessor. The Company leases for its own use, under leases with expected use periods generally ranging from less than one year to 20 years, primarily warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The Company’s financial services segment leases to users equipment produced or sold by the Company. These leases are usually written for periods of less than one year to seven years.

The Company determines if an arrangement is or contains a lease at the contract inception.

Lessee

The Company recognizes on the balance sheet a lease liability and a right of use asset for leases with a term greater than 12 months for both operating and finance leases.

The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using the Company’s incremental borrowing rate since the rate implicit in the lease is generally not readily determinable. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than 12 months and that do not meet the finance lease criteria are classified as operating leases.

Certain real estate leases contain one or more options to terminate or renew, with terms that can generally extend the lease term from one to 10 years. Options that the Company is reasonably certain to exercise are included in the lease term.

The Company has elected to combine lease and non-lease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of 12 months or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense primarily includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement.

The lease expense by type consisted of the following in millions of dollars:

	Three Months Ended
	February 2, 2020
Operating lease expense	$	32
Short-term lease expense		4
Variable lease expense		10
Finance lease depreciation expense		5
Total lease expense	$	51

Operating and finance lease right of use assets and liabilities follow in millions of dollars:

	February 2, 2020
Operating leases
Other assets	$	376
Accounts payable and accrued expenses		361
Finance leases
Property and equipment — net	$	37
Short-term borrowings		12
Long-term borrowings		23
Total finance lease liabilities	$	35

The weighted-average remaining lease term in years and discount rates follows:

	February 2, 2020
Weighted-average remaining lease terms
Operating leases	7
Finance leases	3
Weighted-average discount rate
Operating leases	2.5%
Finance leases	3.2%

Lease payment amounts in each of the next five years at February 2, 2020 follow in millions of dollars:

	Operating		Finance
February 2, 2020	Leases		Leases
Remainder of 2020	$	93	$	12
2021		80		11
2022		69		8
2023		53		3
2024		38		2
2025		19
Later years		33		1
Total lease payments		385		37
Less imputed interest		24		2
Total lease liabilities	$	361	$	35

Future minimum lease payments under the previous lease standard for operating and finance leases at November 3, 2019 follow in millions of dollars:

	Operating		Capital
November 3, 2019	Leases		Leases
2020	$	111	$	12
2021		77		10
2022		56		6
2023		39		2
2024		28		1
Later years		26		1
Total minimum lease payments	$	337	$	32

Cash paid for amounts included in the measurement of lease liabilities:

	Three Months Ended
	February 2, 2020
Operating cash flows from operating leases	$	30
Financing cash flows from finance leases		5

Right of use assets obtained in exchange for lease liabilities:

	Three Months Ended
	February 2, 2020
Operating leases	$	16
Finance leases		9

Lessor

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

Leases offered by the Company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the Company for remarketing.

The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment.

The Company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the retail customer. The Company has also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses” on the statement of consolidated income. Variable lease revenues primarily relate to property taxes on leased assets in certain markets and late fees.

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

	Three Months Ended
	February 2, 2020
Sales-type and direct finance lease revenues	$	36
Operating lease revenues		374
Variable lease revenues		5
Total lease revenues	$	415

At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method.

Sales-type and direct financing lease receivables by product category were as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	863	$	897
Construction and forestry		1,007		1,033
Total		1,870		1,930
Guaranteed residual values		152		232
Unguaranteed residual values		98		101
Less unearned finance income		209		212
Financing leases receivables	$	1,911	$	2,051

Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at February 2, 2020 follow in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	732
2021		614
2022		380
2023		188
2024		86
2025		18
Later years		4
Total	$	2,022

Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 follow in millions of dollars:

	November 3
	2019
Due in:
2020	$	833
2021		557
2022		321
2023		153
2024		53
Later years		13
Total	$	1,930

Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases.

The cost of equipment on operating leases by product category was as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	7,260	$	7,257
Construction and forestry		2,163		2,165
Total		9,423		9,422
Less accumulated depreciation		1,919		1,855
Equipment on operating leases - net	$	7,504	$	7,567

The total operating lease residual values at February 2, 2020 and November 3, 2019 were $5,299 million and $5,259 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $652 million and $647 million at February 2, 2020 and November 3, 2019, respectively.

Lease payments for equipment on operating leases at February 2, 2020 were scheduled as follows in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	948
2021		871
2022		513
2023		248
2024		80
2025		3
Total	$	2,663

Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows in millions of dollars:

	November 3
	2019
Due in:
2020	$	1,086
2021		759
2022		419
2023		193
2024		41
Total	$	2,498

The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at February 2, 2020 and November 3, 2019 were $130 million and $163 million, respectively.

XML

STOCK OPTION AND RESTRICTED STOCK AWARDS

3 Months Ended

Feb. 02, 2020

STOCK OPTION AND RESTRICTED STOCK AWARDS

STOCK OPTION AND RESTRICTED STOCK AWARDS

(19)  Stock Option and Restricted Stock Awards

In December 2019, the Company granted stock options to employees for the purchase of 495 thousand shares of common stock at an exercise price of $169.70 per share and a binomial lattice model fair value of $35.83 per share at the grant date. At February 2, 2020, options for 6.8 million shares were outstanding with a weighted-average exercise price of $99.21 per share. The Company also granted 342 thousand restricted stock units to employees in the first three months of 2020, of which 275 thousand are subject to service based only conditions and 67 thousand are subject to performance/service based conditions. The fair value of the service based only units at the grant date was $169.70 per unit based on the market price of a share of underlying common stock. The fair value of the performance/service based units at the grant date was $160.81 per unit based on the market price of a share of underlying common stock excluding dividends. At February 2, 2020, the Company was authorized to grant an additional 6.8 million shares related to stock option and restricted stock awards.

XML

SEGMENT REPORTING (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Net Sales and Revenues
Net sales and revenues	$ 7,631	$ 7,984
% Change - Net sales and revenues	(4.00%)
Operating Profit (Loss)
Total operating profit	$ 645	769
% Change - Operating profit	(16.00%)
Net income attributable to Deere & Company	$ 517	498
% Change - Net income attributable to Deere & Company	4.00%
Identifiable Assets
Total Assets	$ 71,821	69,918	$ 73,011
% Change - Identifiable assets	(2.00%)
Operating Segments (Other)
Reconciling items	$ (78)	(87)
% Change - Reconciling items	(10.00%)
Income taxes	$ (50)	(184)
% Change - Income taxes	(73.00%)
Equipment Operations
Net Sales and Revenues
Net sales and revenues	$ 6,766	7,179
Operating Profit (Loss)
Net income attributable to Deere & Company	517	498
Identifiable Assets
Total Assets	33,018	32,694	33,577
Operating Segments (Other)
Income taxes	(9)	(144)
Equipment Operations | Outside U.S. and Canada:
Net Sales and Revenues
Net sales and revenues	$ 2,780	2,818
% Change - Net sales and revenues	(1.00%)
Operating Profit (Loss)
Total operating profit	$ 225	176
% Change - Operating profit	28.00%
Corporate
Identifiable Assets
Total Assets	$ 4,349		4,762
% Change - Identifiable assets	(9.00%)
Other Revenues
Net Sales and Revenues
Net sales and revenues	$ 170	188
% Change - Net sales and revenues	(10.00%)
Agriculture and Turf
Net Sales and Revenues
Net sales and revenues	$ 4,595	4,797
Intersegment sales and revenues	$ 7	9
% Change - Intersegment sales and revenues	(22.00%)
Operating Profit (Loss)
Total operating profit	$ 373	348
% Change - Operating profit	7.00%
Identifiable Assets
Total Assets	$ 10,817		10,379
% Change - Identifiable assets	4.00%
Construction and Forestry
Net Sales and Revenues
Net sales and revenues	$ 2,105	2,332
Intersegment sales and revenues		1
Operating Profit (Loss)
Total operating profit	$ 93	229
% Change - Operating profit	(59.00%)
Identifiable Assets
Total Assets	$ 9,376		9,387
Financial Services
Net Sales and Revenues
Net sales and revenues	$ 931	855
% Change - Net sales and revenues	9.00%
Intersegment sales and revenues	$ 67	72
% Change - Intersegment sales and revenues	(7.00%)
Operating Profit (Loss)
Total operating profit	$ 179	192
% Change - Operating profit	(7.00%)
Identifiable Assets
Total Assets	$ 47,279		$ 48,483
% Change - Identifiable assets	(2.00%)
Net Sales
Net Sales and Revenues
Net sales	$ 6,530	6,941
% Change - Net sales	(6.00%)
Net Sales | Equipment Operations
Net Sales and Revenues
Net sales	$ 6,530	6,941
Net Sales | Agriculture and Turf
Net Sales and Revenues
Net sales	$ 4,486	4,681
% Change - Net sales	(4.00%)
Net Sales | Construction and Forestry
Net Sales and Revenues
Net sales	$ 2,044	$ 2,260
% Change - Net sales	(10.00%)

XML

FAIR VALUE MEASUREMENTS - Nonrecurring Measurements (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Equipment on operating leases - net	$ 7,504	$ 7,567	$ 6,904
Fair Value, Nonrecurring Measurements | Level 3
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Equipment on operating leases - net		855
Other assets		$ 142

XML

DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Fair Value of Derivative Instruments
Total derivative assets	$ 481	$ 384	$ 138
Total derivative liabilities	101	139	298
Other Assets
Fair Value of Derivative Instruments
Total derivative assets	481	384	138
Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	101	139	298
Designated as Hedging Instruments | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	409	332	47
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	17	28	205
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	409	332	47
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	17	28	205
Not Designated as Hedging Instruments | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	72	52	91
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	84	111	93
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	34	31	29
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	40	37	27
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	37	20	59
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	40	71	64
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	1	1	3
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	$ 4	$ 3	$ 2

XML

FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions	3 Months Ended
	Feb. 02, 2020 USD ($) item	Jan. 27, 2019 USD ($) item
Financing Receivables Related to Troubled Debt Restructurings
Financing receivable contracts in troubled debt restructuring, number | item	88	70
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification	$ 85	$ 2
Financing receivables in troubled debt restructurings, aggregate balances, post-modification	74	$ 2
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings	$ 14

XML

GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 04, 2019	Nov. 03, 2019	Jan. 27, 2019
Amortized intangible assets:
Total at cost	$ 1,530		$ 1,539	$ 1,591
Less accumulated amortization	304		282	207
Total amortized intangible assets - net	1,226		1,257	1,384
Unamortized intangible assets:
Other intangible assets - net	1,349	$ 1,357	1,380	1,507
Customer Lists and Relationships
Amortized intangible assets:
Total at cost	517		511	538
Less accumulated amortization	86		77	54
Technology, Patents, Trademarks, and Other
Amortized intangible assets:
Total at cost	1,013		1,028	1,053
Less accumulated amortization	218		205	153
In-process Research and Development
Unamortized intangible assets:
Unamortized intangible assets	$ 123		$ 123	$ 123

XML

EMPLOYEE-SEPARATION PROGRAM (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Feb. 02, 2020	Oct. 31, 2021	Nov. 01, 2020
OPEB
Employee-Separation Program
Curtailment expense	$ (21)
Employee-Separation Program
Employee-Separation Program
Total employee-separation programs' expenses, pretax	127
Employee-Separation Program | OPEB | United States
Employee-Separation Program
Curtailment expense	$ (21)
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List]	Cost of Revenue
Employee-Separation Program | Forecasted
Employee-Separation Program
Total employee-separation programs' expenses, pretax			$ 136
Employee-separation programs savings		$ 85	$ 65
Employee-Separation Program | Agriculture and Turf
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	75.00%
Employee-Separation Program | Construction and Forestry
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	23.00%
Employee-Separation Program | Financial Services
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	2.00%
Employee-Separation Program | Operating Profit
Employee-Separation Program
Total employee-separation programs' expenses, pretax	$ 105
Employee-Separation Program | Cost of Sales
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	37.00%
Employee-Separation Program | Research and Development
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	15.00%
Employee-Separation Program | Selling, Administrative and General Expenses
Employee-Separation Program
Employee-separation programs' expenses allocation (as a percent)	48.00%

XML

ORGANIZATION AND CONSOLIDATION (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019	Nov. 03, 2019
Fiscal period duration	91 days	91 days
Maximum Exposure to Losses
Maximum exposure to loss	$ 1,441
VIE-Not Primary Beneficiary
Maximum Exposure to Losses
Maximum exposure to loss	$ 19	$ 27	$ 22

XML

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Feb. 02, 2020

COMMITMENTS AND CONTINGENCIES

Reconciliation of the Changes in Warranty Liability and Unearned Premiums

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

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1,800	$	1,652
Payments		(230)		(228)
Amortization of premiums received		(59)		(54)
Accruals for warranties		222		253
Premiums received		65		65
Foreign exchange		(6)		(1)
End of period balance	$	1,792	$	1,687

XML

FAIR VALUE MEASUREMENTS - Recurring, Level 3 Measurements (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Fair Value, Recurring Level 3 Measurements from Available-for-Sale Marketable Securities
Beginning of period balance	$ 1	$ 8
Principal payments		(3)
Other		1
End of period balance	$ 1	$ 6

XML

LEASES - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions	Feb. 02, 2020	Nov. 03, 2019
Sales-type and Direct Financing Lease Receivables
Total sales-type and direct financing lease receivables	$ 1,870	$ 1,930
Guaranteed residual values	152	232
Unguaranteed residual values	98	101
Less unearned finance income	209	212
Financing lease receivables	1,911	2,051
Agriculture and Turf
Sales-type and Direct Financing Lease Receivables
Total sales-type and direct financing lease receivables	863	897
Construction and Forestry
Sales-type and Direct Financing Lease Receivables
Total sales-type and direct financing lease receivables	$ 1,007	$ 1,033

XML

LEASES - Minimum Lease Payments (Details) $ in Millions	Nov. 03, 2019 USD ($)
Operating Leases, Future Minimum Lease Payments under Previous Lease Standard
2020	$ 111
2021	77
2022	56
2023	39
2024	28
Later years	26
Total minimum lease payments under operating leases	337
Capital Leases, Future Minimum Lease Payments under Previous Lease Standard
2020	12
2021	10
2022	6
2023	2
2024	1
Later years	1
Total minimum lease payments under finance leases	$ 32

XML

COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions	3 Months Ended
	Feb. 02, 2020 USD ($)
Long Term Purchase Commitments
Commitments for the construction and acquisition of property and equipment	$ 264
Restricted Assets and Other Contingent Liabilities
Other restricted assets	83
Miscellaneous contingent liabilities	50
Guarantees, Third-party Receivables
Guarantee Obligations
Guarantee obligations maximum exposure	360
Guarantee obligations accrued losses	$ 14
Guarantee obligations term	7 years

XML

LEASES - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Prior Year (Details) $ in Millions	Nov. 03, 2019 USD ($)
Scheduled Payments on Finance Leases under the Previous Lease Standard
2020	$ 833
2021	557
2022	321
2023	153
2024	53
Later years	13
Total	$ 1,930

XML

LEASES - Lease Expense By Type - (Details) $ in Millions	3 Months Ended
	Feb. 02, 2020 USD ($)
Lease Expense by Type
Operating lease expense	$ 32
Short-term lease expense	4
Variable lease expense	10
Finance lease depreciation expense	5
Total lease expense	$ 51

XML

STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions	Common Stock	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Total
Balance at Oct. 28, 2018	$ 4,474	$ (16,312)	$ 27,553	$ (4,427)	$ 3	$ 11,291
Increase (Decrease) in Stockholders' Equity
Net income			498		2	500
Other comprehensive income (loss)				(143)		(143)
Repurchases of common stock		(144)				(144)
Treasury shares reissued		34				34
Dividends declared			(243)			(243)
Stock options and other	38					38
Balance at Jan. 27, 2019	4,512	(16,422)	27,816	(4,578)	5	11,333
Redeemable Noncontrolling Interest - Balance at Oct. 28, 2018						14
Redeemable Noncontrolling Interest - Balance at Jan. 27, 2019						14
Increase (Decrease) in Stockholders' Equity
ASU No. 2016-01 adoption			8	(8)
Balance at Nov. 03, 2019	4,642	(17,474)	29,852	(5,607)	4	11,417
Increase (Decrease) in Stockholders' Equity
Net income			517			517
Other comprehensive income (loss)				278		278
Repurchases of common stock		(114)				(114)
Treasury shares reissued		39				39
Dividends declared			(239)			(239)
Stock options and other	33		(1)			32
Balance at Feb. 02, 2020	$ 4,675	$ (17,549)	$ 30,129	$ (5,329)	$ 4	11,930
Redeemable Noncontrolling Interest - Balance at Nov. 03, 2019						14
Increase (Decrease) in Redeemable Noncontrolling Interest
Net income						1
Dividends declared						(1)
Redeemable Noncontrolling Interest - Balance at Feb. 02, 2020						$ 14

XML

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
Net income	$ 518	$ 500
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment	230	20
Cumulative translation adjustment	43	(162)
Unrealized loss on derivatives		(9)
Unrealized gain on debt securities	5	8
Other Comprehensive Income (Loss), Net of Income Taxes	278	(143)
Comprehensive Income of Consolidated Group	796	357
Less: Comprehensive income attributable to noncontrolling interests	1	2
Comprehensive Income Attributable to Deere & Company	$ 795	$ 355

XML

SUPPLEMENTAL CONSOLIDATING DATA - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions	Feb. 02, 2020	Nov. 04, 2019	Nov. 03, 2019	Jan. 27, 2019	Oct. 28, 2018
Assets
Cash and cash equivalents	$ 3,602		$ 3,857	$ 3,626
Marketable securities	609		581	523
Receivables from unconsolidated subsidiaries and affiliates	38		46	36
Trade accounts and notes receivable - net	5,360		5,230	5,497
Financing receivables - net	27,294		29,195	25,150
Financing receivables securitized - net	4,478		4,383	4,563
Other receivables	1,367		1,487	1,651
Equipment on operating leases - net	7,504		7,567	6,904
Inventories	6,482		5,975	7,402
Property and equipment - net	5,900		5,973	5,785
Investments in unconsolidated subsidiaries and affiliates	217		215	212
Goodwill	2,945		2,917	3,048	$ 3,101
Other intangible assets - net	1,349	$ 1,357	1,380	1,507
Retirement benefits	900		840	1,348
Deferred income taxes	1,414		1,466	834
Other assets	2,362	2,301	1,899	1,832
Total Assets	71,821		73,011	69,918
Liabilities
Short-term borrowings	10,008	10,795	10,784	10,738
Short-term securitization borrowings	4,416		4,321	4,464
Payables to unconsolidated subsidiaries and affiliates	147		142	144
Accounts payable and accrued expenses	8,630	10,004	9,656	9,086
Deferred income taxes	491		495	525
Long-term borrowings	30,475	$ 30,249	30,229	27,855
Retirement benefits and other liabilities	5,710		5,953	5,759
Total liabilities	59,877		61,580	58,571
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest	14		14	14
Stockholders' Equity
Common stock, $1 par value (issued shares at February 2, 2020 - 536,431,204)	$ 4,675		4,642	4,512
Common stock, par value (in dollars per share)	$ 1
Common stock, issued shares	536,431,204
Common stock in treasury	$ (17,549)		(17,474)	(16,422)
Retained earnings	30,129		29,852	27,816
Accumulated other comprehensive income (loss)	(5,329)		(5,607)	(4,578)
Total Deere & Company stockholders' equity	11,926		11,413	11,328
Noncontrolling interests	4		4	5
Total stockholders' equity	11,930		11,417	11,333	$ 11,291
Total Liabilities and Stockholders' Equity	71,821		73,011	69,918
Equipment Operations
Assets
Cash and cash equivalents	2,862		3,175	2,671
Marketable securities	4		1	8
Receivables from unconsolidated subsidiaries and affiliates	1,425		2,017	274
Trade accounts and notes receivable - net	1,115		1,482	1,177
Financing receivables - net	130		65	102
Financing receivables securitized - net	42		44	67
Other receivables	1,252		1,376	1,485
Inventories	6,482		5,975	7,402
Property and equipment - net	5,857		5,929	5,739
Investments in unconsolidated subsidiaries and affiliates	5,317		5,326	5,175
Goodwill	2,945		2,917	3,048
Other intangible assets - net	1,349		1,380	1,507
Retirement benefits	871		836	1,291
Deferred income taxes	1,821		1,896	1,507
Other assets	1,546		1,158	1,241
Total Assets	33,018		33,577	32,694
Liabilities
Short-term borrowings	947		987	1,494
Short-term securitization borrowings	42		44	67
Payables to unconsolidated subsidiaries and affiliates	146		142	227
Accounts payable and accrued expenses	8,325		9,232	8,711
Deferred income taxes	408		414	470
Long-term borrowings	5,567		5,415	4,712
Retirement benefits and other liabilities	5,639		5,912	5,666
Total liabilities	21,074		22,146	21,347
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest	14		14	14
Stockholders' Equity
Common stock, $1 par value (issued shares at February 2, 2020 - 536,431,204)	$ 4,675		$ 4,642	$ 4,512
Common stock, par value (in dollars per share)	$ 1		$ 1	$ 1
Common stock, issued shares	536,431,204
Common stock in treasury	$ (17,549)		$ (17,474)	$ (16,422)
Retained earnings	30,129		29,852	27,816
Accumulated other comprehensive income (loss)	(5,329)		(5,607)	(4,578)
Total Deere & Company stockholders' equity	11,926		11,413	11,328
Noncontrolling interests	4		4	5
Total stockholders' equity	11,930		11,417	11,333
Total Liabilities and Stockholders' Equity	33,018		33,577	32,694
Financial Services
Assets
Cash and cash equivalents	740		682	955
Marketable securities	605		580	515
Trade accounts and notes receivable - net	5,707		5,153	5,746
Financing receivables - net	27,164		29,130	25,048
Financing receivables securitized - net	4,436		4,339	4,496
Other receivables	131		116	184
Equipment on operating leases - net	7,504		7,567	6,904
Property and equipment - net	43		44	46
Investments in unconsolidated subsidiaries and affiliates	17		16	16
Retirement benefits	58		58	57
Deferred income taxes	56		57	70
Other assets	818		741	593
Total Assets	47,279		48,483	44,630
Liabilities
Short-term borrowings	9,061		9,797	9,244
Short-term securitization borrowings	4,374		4,277	4,397
Payables to unconsolidated subsidiaries and affiliates	1,387		1,970	155
Accounts payable and accrued expenses	1,786		1,836	1,821
Deferred income taxes	546		568	798
Long-term borrowings	24,908		24,814	23,143
Retirement benefits and other liabilities	100		94	93
Total liabilities	42,162		43,356	39,651
Commitments and contingencies (Note 16)
Stockholders' Equity
Common stock, $1 par value (issued shares at February 2, 2020 - 536,431,204)	2,107		2,107	2,099
Retained earnings	3,390		3,378	3,219
Accumulated other comprehensive income (loss)	(380)		(358)	(339)
Total Deere & Company stockholders' equity	5,117		5,127	4,979
Total stockholders' equity	5,117		5,127	4,979
Total Liabilities and Stockholders' Equity	$ 47,279		$ 48,483	$ 44,630

XML

REVENUE RECOGNITION - Unsatisfied Performance Obligations (Details) $ in Millions	Feb. 02, 2020 USD ($)
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 887
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-02-03
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 275
Period estimated revenue to be recognized	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-02
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 274
Period estimated revenue to be recognized	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 182
Period estimated revenue to be recognized	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-31
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 101
Period estimated revenue to be recognized	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-30
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 42
Period estimated revenue to be recognized	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-28
Unsatisfied performance obligations
Performance obligations for contracts with an original duration greater than one year	$ 13
Period estimated revenue to be recognized	24 months

XML

DIVIDENDS DECLARED AND PAID (Details) - $ / shares	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
DIVIDENDS DECLARED AND PAID
Dividends declared (in dollars per share)	$ 0.76	$ 0.76
Dividends paid (in dollars per share)	$ 0.76	$ 0.69

XML

SEGMENT REPORTING (Tables)

3 Months Ended

Feb. 02, 2020

SEGMENT REPORTING

Schedule of Segment Reporting Information

Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended
	February 2		January 27		%
	2020		2019		Change
Net sales and revenues:
Agriculture and turf	$	4,486	$	4,681	-4
Construction and forestry		2,044		2,260	-10
Total net sales		6,530		6,941	-6
Financial services		931		855	+9
Other revenues		170		188	-10
Total net sales and revenues	$	7,631	$	7,984	-4
Operating profit: *
Agriculture and turf	$	373	$	348	+7
Construction and forestry		93		229	-59
Financial services		179		192	-7
Total operating profit		645		769	-16
Reconciling items **		(78)		(87)	-10
Income taxes		(50)		(184)	-73
Net income attributable to Deere & Company	$	517	$	498	+4
Intersegment sales and revenues:
Agriculture and turf net sales	$	7	$	9	-22
Construction and forestry net sales				1
Financial services		67		72	-7
Equipment operations outside the U.S. and Canada:
Net sales	$	2,780	$	2,818	-1
Operating profit		225		176	+28

	February 2		November 3
	2020		2019
Identifiable assets:
Agriculture and turf	$	10,817	$	10,379	+4
Construction and forestry		9,376		9,387
Financial services		47,279		48,483	-2
Corporate		4,349		4,762	-9
Total assets	$	71,821	$	73,011	-2

* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

XML

OTHER COMPREHENSIVE INCOME ITEMS (Tables)

3 Months Ended

Feb. 02, 2020

OTHER COMPREHENSIVE INCOME ITEMS

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

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

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance October 28, 2018	$	(3,237)	$	(1,203)	$	15	$	(2)	$	(4,427)
ASU No. 2016-01 adoption								(8)		(8)
Other comprehensive income (loss) items before reclassification		1		(162)		(7)		8		(160)
Amounts reclassified from accumulated other comprehensive income		19				(2)				17
Net current period other comprehensive income (loss)		20		(162)		(9)		8		(143)
Balance January 27, 2019	$	(3,217)	$	(1,365)	$	6	$	(2)	$	(4,578)
Balance November 3, 2019	$	(3,915)	$	(1,651)	$	(60)	$	19	$	(5,607)
Other comprehensive income (loss) items before reclassification		186		43		(1)		5		233
Amounts reclassified from accumulated other comprehensive income		44				1				45
Net current period other comprehensive income (loss)		230		43				5		278
Balance February 2, 2020	$	(3,685)	$	(1,608)	$	(60)	$	24	$	(5,329)

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

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended February 2, 2020	Amount		Credit		Amount
Cumulative translation adjustment	$	43			$	43
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(2)	$	1		(1)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		2		(1)		1
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		6		(1)		5
Net unrealized gain (loss) on debt securities		6		(1)		5
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		62		(26)		36
Prior service (credit) cost		3		(1)		2
Settlements		3		(1)		2
OPEB
Net actuarial gain (loss)		245		(60)		185
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		7		(2)		5
Prior service (credit) cost		(1)				(1)
Net unrealized gain (loss) on retirement benefits adjustment		320		(90)		230
Total other comprehensive income (loss)	$	369	$	(91)	$	278

(continued)

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended January 27, 2019	Amount		Credit		Amount
Cumulative translation adjustment	$	(162)			$	(162)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(9)	$	2		(7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(2)				(2)
Net unrealized gain (loss) on derivatives		(11)		2		(9)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		10		(2)		8
Net unrealized gain (loss) on debt securities		10		(2)		8
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		1				1
Reclassification to other operating expenses through amortization of: *
Actuarial (gain) loss		35		(8)		27
Prior service (credit) cost		3		(1)		2
OPEB
Reclassification to other operating expense through amortization of: *
Actuarial (gain) loss		5		(1)		4
Prior service (credit) cost		(18)		4		(14)
Net unrealized gain (loss) on retirement benefits adjustment		26		(6)		20
Total other comprehensive income (loss)	$	(137)	$	(6)	$	(143)

* These accumulated other comprehensive income amounts are included in net periodic pension and OPEB costs. See Note 8 for additional detail.

XML

NEW ACCOUNTING STANDARDS

3 Months Ended

Feb. 02, 2020

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS

(3)  New Accounting Standards

New Accounting Standards Adopted

In the first quarter of 2020, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes Accounting Standards Codification (ASC) 840, Leases. This ASU was adopted using a modified-retrospective approach. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU did not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU adds new disclosures about the Company’s leasing activities. The Company elected the optional practical expedients to not reassess whether existing contracts contain leases, not reassess lease classification, and not reassess initial direct costs for existing leases. The Company did not elect the hindsight practical expedient. In addition, the Company elected to combine lease and non-lease components for all asset classes and to not recognize a right of use asset or lease liability for arrangements that qualify as short-term leases.

The operating lease liabilities are recorded in “Accounts payable and accrued expenses” and the operating lease right of use assets are recorded in “Other assets.” The finance lease liabilities are recorded in “Short-term borrowings” or “Long-term borrowings” based on the remaining lease term, and the finance lease right of use assets are recorded in “Property and equipment - net.” In addition to the lease liabilities and right of use assets, land use rights were reclassified from “Other intangible assets - net” to “Other assets” and finance lease liabilities were reclassified from “Accounts payable and accrued expenses” to “Short-term borrowings” and “Long-term borrowings.” The effect of adopting the ASU on the consolidated balance sheet follows in millions of dollars:

	November 3, 2019		Cumulative Effect from Adoption		November 4, 2019
Assets
Other intangible assets - net	$	1,380	$	(23)	$	1,357
Other assets		1,899		402		2,301
Liabilities
Short-term borrowings	$	10,784	$	11	$	10,795
Accounts payable and accrued expenses		9,656		348		10,004
Long-term borrowings		30,229		20		30,249

The Company implemented a new system for lessee accounting with new processes and controls at the time of adopting the ASU. The adoption did not have a material effect on the Company’s operating results or cash flows. See Note 15 for additional information.

The Company also adopted the following standards in the first quarter of 2020, none of which had a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

2017-08	Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs
2018-07	Improvements to Nonemployee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation
2019-04	Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The adoption was for clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities

New Accounting Standards to be Adopted

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments – Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021. The ASU will be adopted using a modified-retrospective approach. The Company is developing models to estimate expected credit losses, assessing appropriate assumptions, designing new procedures and controls, and evaluating the potential effects on the consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. This ASU requires customers in a hosting arrangement that is a service contract to evaluate the implementation costs of the hosting arrangement using the guidance to develop internal-use software. The project development stage determines the implementation costs that are capitalized or expensed. Capitalized implementation costs are amortized over the term of the service arrangement and are presented in the same income statement line item as the service contract costs. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted. The Company will adopt the ASU on a prospective basis. The Company is evaluating the potential effects on the Company’s consolidated financial statements.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The effective dates for the separate portions of the ASU and the expected effect on the consolidated financial statements are as follows for the portions that have not yet been adopted: (1) clarifications to ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, is the first quarter of fiscal year 2021, which is under evaluation, and (2) clarifications to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities is the first quarter of fiscal year 2021, which will not have a material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes. This ASU simplifies the accounting for income taxes by modifying the treatment of intraperiod tax allocation in certain circumstances, eliminating an exception to recognizing deferred tax liabilities for outside basis differences for foreign equity method investments and foreign subsidiaries when ownership or control changes, and modifying interim period tax calculations when a loss is forecast. In addition, the ASU also provides guidance for the accounting of a franchise tax that is partially based on income, requires that enacted changes in tax laws or rates be included in the annual effective rate determination in the period that includes the enactment date, and clarifies the tax accounting of a step up in tax basis of goodwill. The effective date will be the first quarter of fiscal year 2022, with early adoption permitted. The guidance related to the foreign equity method investments, foreign subsidiaries, and franchise taxes will be adopted using a modified-retrospective approach. The remaining provisions will be adopted prospectively. The adoption is not expected to have a material effect on the Company’s consolidated financial statements.

XML

EARNINGS PER SHARE

3 Months Ended

Feb. 02, 2020

EARNINGS PER SHARE

EARNINGS PER SHARE

(7)  Earnings Per Share

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

	Three Months Ended
	February 2		January 27
	2020		2019
Net income attributable to Deere & Company	$	517	$	498
Average shares outstanding		313.5		318.5
Basic per share	$	1.65	$	1.56
Average shares outstanding		313.5		318.5
Effect of dilutive share-based compensation		3.7		4.2
Total potential shares outstanding		317.2		322.7
Diluted per share	$	1.63	$	1.54

During the first quarter of 2020 and 2019, .2 million and .6 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive.

XML

FINANCING RECEIVABLES

3 Months Ended

Feb. 02, 2020

FINANCING RECEIVABLES

FINANCING RECEIVABLES

(11)  Financing Receivables

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

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	February 2, 2020
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	150	$	65	$	3	$	218
Construction and forestry		96		36		19		151
Other:
Agriculture and turf		66		21		1		88
Construction and forestry		29		11				40
Total	$	341	$	133	$	23	$	497
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	218	$	283	$	18,514	$	19,015
Construction and forestry		151		131		3,488		3,770
Other:
Agriculture and turf		88		100		7,457		7,645
Construction and forestry		40		28		1,431		1,499
Total	$	497	$	542	$	30,890		31,929
Less allowance for credit losses								157
Total financing receivables – net							$	31,772

	November 3, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	138	$	73	$	1	$	212
Construction and forestry		79		29		4		112
Other:
Agriculture and turf		39		19		1		59
Construction and forestry		26		7				33
Total	$	282	$	128	$	6	$	416
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	212	$	268	$	18,931	$	19,411
Construction and forestry		112		127		3,450		3,689
Other:
Agriculture and turf		59		28		8,986		9,073
Construction and forestry		33		26		1,496		1,555
Total	$	416	$	449	$	32,863		33,728
Less allowance for credit losses								150
Total financing receivables – net							$	33,578

	January 27, 2019
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	162	$	63	$	1	$	226
Construction and forestry		102		47		1		150
Other:
Agriculture and turf		65		23		1		89
Construction and forestry		16		8				24
Total	$	345	$	141	$	3	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	226	$	296	$	17,408	$	17,930
Construction and forestry		150		107		3,092		3,349
Other:
Agriculture and turf		89		28		7,213		7,330
Construction and forestry		24		10		1,247		1,281
Total	$	489	$	441	$	28,960		29,890
Less allowance for credit losses								177
Total financing receivables – net							$	29,713

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

	Three Months Ended February 2, 2020
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	89	$	40	$	21	$	150
Provision (credit)		15		(1)		7		21
Write-offs		(17)		(7)		(1)		(25)
Recoveries		2		8				10
Translation adjustments		(1)				2		1
End of period balance *	$	88	$	40	$	29	$	157
Financing receivables:
End of period balance	$	22,785	$	2,733	$	6,411	$	31,929
Balance individually evaluated **	$	170			$	86	$	256

	Three Months Ended January 27, 2019
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	113	$	43	$	22	$	178
Provision (credit)		6		(1)		2		7
Write-offs		(11)		(4)		(1)		(16)
Recoveries		4		5				9
Translation adjustments		(1)						(1)
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	21,279	$	2,737	$	5,874	$	29,890
Balance individually evaluated **	$	118	$	2	$	13	$	133

* Individual allowances were not significant.

** Remainder is collectively evaluated.

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
February 2, 2020*
Receivables with specific allowance ***	$	117	$	116	$	22	$	119
Receivables without a specific allowance **		31		30				32
Total	$	148	$	146	$	22	$	151
Agriculture and turf	$	120	$	120	$	17	$	123
Construction and forestry	$	28	$	26	$	5	$	28
November 3, 2019*
Receivables with specific allowance **	$	40	$	39	$	13	$	40
Receivables without a specific allowance **		32		31				37
Total	$	72	$	70	$	13	$	77
Agriculture and turf	$	49	$	48	$	8	$	52
Construction and forestry	$	23	$	22	$	5	$	25
January 27, 2019*
Receivables with specific allowance **	$	30	$	30	$	12	$	30
Receivables without a specific allowance **		36		34				36
Total	$	66	$	64	$	12	$	66
Agriculture and turf	$	49	$	48	$	9	$	49
Construction and forestry	$	17	$	16	$	3	$	17

*   Finance income recognized was not material.

**  Primarily retail notes.

***   Primarily retail notes and wholesale receivables.

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first three months of 2020, the Company identified 88 receivable contracts, primarily wholesale receivables in Argentina, as troubled debt restructurings with aggregate balances of $85 million pre-modification and $74 million post-modification. During the first three months of 2019, there were 70 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $2 million pre-modification and $2 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At February 2, 2020, the Company had commitments to lend approximately $14 million to borrowers whose accounts were modified in troubled debt restructurings.

XML

LEASES - Lease Payments - (Details) $ in Millions	Feb. 02, 2020 USD ($)
Operating Leases
Remainder of 2020	$ 93
2021	80
2022	69
2023	53
2024	38
2025	19
Later years	33
Total lease payments	385
Less imputed interest	24
Total operating lease liabilities	361
Finance Leases
Remainder of 2020	12
2021	11
2022	8
2023	3
2024	2
Later years	1
Total lease payments	37
Less imputed interest	2
Total finance lease liabilities	$ 35

XML

COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
COMMITMENTS AND CONTINGENCIES
Historical claims rate, review period	5 years
Unamortized extended warranty premiums (deferred revenue)	$ 588	$ 514
Change in Warranty Liability and Unearned Premiums
Beginning of period balance	1,800	1,652
Payments	(230)	(228)
Amortization of premiums received	(59)	(54)
Accruals for warranties	222	253
Premiums received	65	65
Foreign exchange	(6)	(1)
End of period balance	$ 1,792	$ 1,687

XML

LEASES - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Current Year (Details) $ in Millions	Feb. 02, 2020 USD ($)
Payments on Sales-type and Direct Financing Leases Receivables
Remainder of 2020	$ 732
2021	614
2022	380
2023	188
2024	86
2025	18
Later years	4
Total	$ 2,022

XML

LEASES - Lease Terms (Details)	3 Months Ended
	Feb. 02, 2020
Lessee
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Lessee, Finance Lease, Existence of Option to Extend [true false]	true
Lessee, Operating Lease, Existence of Option to Terminate [true false]	true
Lessee, Finance Lease, Existence of Option to Terminate [true false]	true
Minimum
Lessee
Expected use period under lease	1 year
Renewal Term	1 year
Lessor
Financial Services segment lease period	1 year
Maximum
Lessee
Expected use period under lease	20 years
Renewal Term	10 years
Lessor
Financial Services segment lease period	7 years

XML

FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions	Feb. 02, 2020 USD ($)
Contractual Maturities of Debt Securities, Amortized Cost
Amortized cost, due in one year or less	$ 28
Amortized cost, due after one through five years	96
Amortized cost, due after five through 10 years	96
Amortized cost, due after 10 years	143
Amortized cost, mortgage-backed securities	159
Amortized cost, debt securities	522
Contractual Maturities of Debt Securities, Fair Value
Fair value, due in one year or less	24
Fair value, due after one through five years	99
Fair value, due after five through 10 years	103
Fair value, due after 10 years	153
Fair value, mortgage-backed securities	165
Fair value, debt securities	$ 544

XML

LEASES - Lease Revenues (Details) $ in Millions	3 Months Ended
	Feb. 02, 2020 USD ($)
Lessor
Sales-type and direct finance lease revenues	$ 36
Operating lease revenues	374
Variable lease revenues	5
Total lease revenues	$ 415

XML

SUPPLEMENTAL CONSOLIDATING DATA - Statement of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Cash Flows from Operating Activities
Net income	$ 518	$ 500
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses	15	2
Provision for depreciation and amortization	538	503
Undistributed earnings of unconsolidated subsidiaries and affiliates		(7)
Credit for deferred income taxes	(29)	(56)
Changes in assets and liabilities:
Trade receivables and Equipment Operations' financing receivables	70	(507)
Inventories	(642)	(1,396)
Accounts payable and accrued expenses	(1,134)	(698)
Accrued income taxes payable/receivable	(53)	98
Retirement benefits	36	(4)
Other	154	(106)
Net cash provided by (used for) operating activities	(508)	(1,651)
Cash Flows from Investing Activities
Proceeds from maturities and sales of marketable securities	18	8
Proceeds from sales of equipment on operating leases	426	371
Purchases of marketable securities	(34)	(32)
Purchases of property and equipment	(271)	(297)
Cost of equipment on operating leases acquired	(517)	(361)
Other	43	(3)
Net cash provided by (used for) investing activities	1,026	969
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings	(473)	476
Proceeds from long-term borrowings	1,702	2,211
Payments of long-term borrowings	(1,651)	(1,941)
Proceeds from issuance of common stock	53	51
Repurchases of common stock	(114)	(144)
Dividends paid	(242)	(220)
Other	(38)	(30)
Net cash provided by (used for) financing activities	(763)	403
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash	(1)	(13)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	(246)	(292)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,956	4,015
Cash, Cash Equivalents, and Restricted Cash at End of Period	3,710	3,723
Equipment Operations
Cash Flows from Operating Activities
Net income	518	500
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses	1	(1)
Provision for depreciation and amortization	261	260
Undistributed earnings of unconsolidated subsidiaries and affiliates	(11)	39
Credit for deferred income taxes	(7)	(31)
Changes in assets and liabilities:
Trade receivables and Equipment Operations' financing receivables	312	186
Inventories	(530)	(1,290)
Accounts payable and accrued expenses	(1,058)	(535)
Accrued income taxes payable/receivable	(43)	(429)
Retirement benefits	30	(6)
Other	147	(127)
Net cash provided by (used for) operating activities	(380)	(1,434)
Cash Flows from Investing Activities
Proceeds from maturities and sales of marketable securities		3
Purchases of marketable securities		(2)
Purchases of property and equipment	(271)	(297)
Other	(9)	(6)
Net cash provided by (used for) investing activities	(280)	(302)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings	20	88
Change in intercompany receivables/payables	572	1,526
Proceeds from long-term borrowings	167	91
Payments of long-term borrowings	(83)	(142)
Proceeds from issuance of common stock	53	51
Repurchases of common stock	(114)	(144)
Dividends paid	(242)	(220)
Other	(29)	(23)
Net cash provided by (used for) financing activities	344	1,227
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash	3	(12)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	(313)	(521)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,196	3,202
Cash, Cash Equivalents, and Restricted Cash at End of Period	2,883	2,681
Financial Services
Cash Flows from Operating Activities
Net income	137	154
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses	14	3
Provision for depreciation and amortization	311	276
Undistributed earnings of unconsolidated subsidiaries and affiliates	(1)
Credit for deferred income taxes	(22)	(25)
Changes in assets and liabilities:
Accounts payable and accrued expenses	(19)	(12)
Accrued income taxes payable/receivable	(10)	527
Retirement benefits	6	2
Other	30	47
Net cash provided by (used for) operating activities	446	972
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)	6,056	5,885
Proceeds from maturities and sales of marketable securities	18	5
Proceeds from sales of equipment on operating leases	426	371
Cost of receivables acquired (excluding trade and wholesale)	(4,569)	(4,448)
Purchases of marketable securities	(34)	(30)
Cost of equipment on operating leases acquired	(669)	(505)
Increase in trade and wholesale receivables	(382)	(1,021)
Other	11	26
Net cash provided by (used for) investing activities	857	283
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings	(493)	388
Change in intercompany receivables/payables	(572)	(1,526)
Proceeds from long-term borrowings	1,535	2,120
Payments of long-term borrowings	(1,568)	(1,799)
Dividends paid	(125)	(200)
Other	(9)	(8)
Net cash provided by (used for) financing activities	(1,232)	(1,025)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash	(4)	(1)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	67	229
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	760	813
Cash, Cash Equivalents, and Restricted Cash at End of Period	$ 827	$ 1,042

XML

OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Accumulated other comprehensive income (loss)
Balance	$ 11,413
Net current period other comprehensive income (loss)	278	$ (143)
Balance	11,926	11,328
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss)
Balance	(5,607)	(4,427)
ASU No. 2016-01 adoption		(8)
Other comprehensive income (loss) items before reclassification	233	(160)
Amounts reclassified from accumulated other comprehensive income	45	17
Net current period other comprehensive income (loss)	278	(143)
Balance	(5,329)	(4,578)
Retirement Benefits Adjustment
Accumulated other comprehensive income (loss)
Balance	(3,915)	(3,237)
Other comprehensive income (loss) items before reclassification	186	1
Amounts reclassified from accumulated other comprehensive income	44	19
Net current period other comprehensive income (loss)	230	20
Balance	(3,685)	(3,217)
Cumulative Translation Adjustment
Accumulated other comprehensive income (loss)
Balance	(1,651)	(1,203)
Other comprehensive income (loss) items before reclassification	43	(162)
Net current period other comprehensive income (loss)	43	(162)
Balance	(1,608)	(1,365)
Unrealized Gain (Loss) on Derivatives
Accumulated other comprehensive income (loss)
Balance	(60)	15
Other comprehensive income (loss) items before reclassification	(1)	(7)
Amounts reclassified from accumulated other comprehensive income	1	(2)
Net current period other comprehensive income (loss)		(9)
Balance	(60)	6
Unrealized Gain (Loss) on Debt Securities
Accumulated other comprehensive income (loss)
Balance	19
ASU No. 2016-01 adoption		(8)
Other comprehensive income (loss) items before reclassification	5	8
Net current period other comprehensive income (loss)	5	8
Balance	$ 24	(2)
Unrealized Gain (Loss) on Investments
Accumulated other comprehensive income (loss)
Balance		$ (2)

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
EARNINGS PER SHARE
Net income attributable to Deere & Company	$ 517	$ 498
Average shares outstanding	313.5	318.5
Basic (in dollars per share)	$ 1.65	$ 1.56
Diluted Earnings Per Share
Average shares outstanding	313.5	318.5
Effect of dilutive share-based compensation (in shares)	3.7	4.2
Total potential shares outstanding	317.2	322.7
Diluted (in dollars per share)	$ 1.63	$ 1.54
Antidilutive incremental shares excluded from computation of earnings per share	0.2	0.6

XML

STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Cash Flows from Operating Activities
Net income	$ 518	$ 500
Adjustments to reconcile net income to net cash used for operating activities:
Provision for credit losses	15	2
Provision for depreciation and amortization	538	503
Share-based compensation expense	19	20
Undistributed earnings of unconsolidated affiliates		(7)
Credit for deferred income taxes	(29)	(56)
Changes in assets and liabilities:
Trade, notes, and financing receivables related to sales	70	(507)
Inventories	(642)	(1,396)
Accounts payable and accrued expenses	(1,134)	(698)
Accrued income taxes payable/receivable	(53)	98
Retirement benefits	36	(4)
Other	154	(106)
Net cash used for operating activities	(508)	(1,651)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)	5,664	5,496
Proceeds from maturities and sales of marketable securities	18	8
Proceeds from sales of equipment on operating leases	426	371
Cost of receivables acquired (excluding receivables related to sales)	(4,303)	(4,213)
Purchases of marketable securities	(34)	(32)
Purchases of property and equipment	(271)	(297)
Cost of equipment on operating leases acquired	(517)	(361)
Other	43	(3)
Net cash provided by investing activities	1,026	969
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings	(473)	476
Proceeds from long-term borrowings	1,702	2,211
Payments of long-term borrowings	(1,651)	(1,941)
Proceeds from issuance of common stock	53	51
Repurchases of common stock	(114)	(144)
Dividends paid	(242)	(220)
Other	(38)	(30)
Net cash provided by (used for) financing activities	(763)	403
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash	(1)	(13)
Net Decrease in Cash, Cash Equivalents, and Restricted Cash	(246)	(292)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,956	4,015
Cash, Cash Equivalents, and Restricted Cash at End of Period	$ 3,710	$ 3,723

XML

STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Net Sales and Revenues
Net sales and revenues	$ 7,631	$ 7,984
Costs and Expenses
Research and development expenses	425	407
Selling, administrative and general expenses	809	764
Interest expense	336	353
Total	7,062	7,307
Income of Consolidated Group before Income Taxes	569	677
Provision for income taxes	50	184
Income of Consolidated Group	519	493
Equity in income (loss) of unconsolidated affiliates	(1)	7
Net Income	518	500
Less: Net income attributable to noncontrolling interests	1	2
Net Income Attributable to Deere & Company	$ 517	$ 498
Per Share Data
Basic (in dollars per share)	$ 1.65	$ 1.56
Diluted (in dollars per share)	$ 1.63	$ 1.54
Average Shares Outstanding
Basic (in shares)	313.5	318.5
Diluted (in shares)	317.2	322.7
Net Sales
Net Sales and Revenues
Net sales	$ 6,530	$ 6,941
Costs and Expenses
Costs and expenses	5,077	5,432
Finance and Interest Income
Net Sales and Revenues
Net sales and revenues	896	815
Other
Net Sales and Revenues
Net sales and revenues	205	228
Costs and Expenses
Costs and expenses	$ 415	$ 351

XML

PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

3 Months Ended

Feb. 02, 2020

PENSION AND OTHER POSTRETIREMENT BENEFITS

Schedule of Components of Net Periodic Pension and OPEB Cost

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	84	$	66
Interest cost		87		111
Expected return on plan assets		(205)		(200)
Amortization of actuarial loss		62		35
Amortization of prior service cost		3		3
Settlements		3
Net cost	$	34	$	15

The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	12	$	10
Interest cost		37		54
Expected return on plan assets		(12)		(9)
Amortization of actuarial loss		7		5
Amortization of prior service credit		(1)		(18)
Curtailments		21
Net cost	$	64	$	42

XML

REVENUE RECOGNITION (Tables)

3 Months Ended

Feb. 02, 2020

REVENUE RECOGNITION

Schedule of Revenue Recognition

The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition in millions of dollars follow:

	Three Months Ended February 2, 2020
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,500	$	1,020	$	643	$	4,163
Canada		138		172		156		466
Western Europe		778		339		22		1,139
Central Europe and CIS		220		159		10		389
Latin America		455		159		66		680
Asia, Africa, Australia, New Zealand, and Middle East		504		256		34		794
Total	$	4,595	$	2,105	$	931	$	7,631
Major product lines:
Large Agriculture	$	2,139					$	2,139
Small Agriculture		1,765						1,765
Turf		468						468
Construction			$	841				841
Compact Construction				288				288
Roadbuilding				605				605
Forestry				274				274
Financial Products		27		7	$	931		965
Other		196		90				286
Total	$	4,595	$	2,105	$	931	$	7,631
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,540	$	2,079	$	26	$	6,645
Revenue recognized over time		55		26		905		986
Total	$	4,595	$	2,105	$	931	$	7,631

	Three Months Ended January 27, 2019
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,628	$	1,163	$	575	$	4,366
Canada		172		248		157		577
Western Europe		848		337		20		1,205
Central Europe and CIS		148		171		9		328
Latin America		548		150		64		762
Asia, Africa, Australia, New Zealand, and Middle East		453		263		30		746
Total	$	4,797	$	2,332	$	855	$	7,984
Major product lines:
Large Agriculture	$	2,167					$	2,167
Small Agriculture		1,808						1,808
Turf		506						506
Construction			$	1,009				1,009
Compact Construction				265				265
Roadbuilding				598				598
Forestry				352				352
Financial Products		20		6	$	855		881
Other		296		102				398
Total	$	4,797	$	2,332	$	855	$	7,984
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,755	$	2,313			$	7,068
Revenue recognized over time		42		19	$	855		916
Total	$	4,797	$	2,332	$	855	$	7,984

XML

SECURITIZATION OF FINANCING RECEIVABLES

3 Months Ended

Feb. 02, 2020

SECURITIZATION OF FINANCING RECEIVABLES

SECURITIZATION OF FINANCING RECEIVABLES

(12)  Securitization of Financing Receivables

The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did 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.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the financing receivables securitized or a fixed percentage of the outstanding balance of the securitized financing receivables. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,490 million, $2,895 million, and $2,137 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,442 million, $2,847 million, and $2,092 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $638 million, $491 million, and $790 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $609 million, $465 million, and $743 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,441 million, $1,079 million, and $1,745 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,370 million, $1,015 million, and $1,632 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively.

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	February 2, 2020
Carrying value of liabilities	$	1,370
Maximum exposure to loss		1,441

The total assets of unconsolidated VIEs related to securitizations were approximately $41 billion.

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Financing receivables securitized (retail notes)	$	4,487	$	4,395	$	4,573
Allowance for credit losses		(9)		(12)		(10)
Other assets		91		82		109
Total restricted securitized assets	$	4,569	$	4,465	$	4,672

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	February 2		November 3		January 27
	2020		2019		2019
Short-term securitization borrowings	$	4,416	$	4,321	$	4,464
Accrued interest on borrowings		5		6		3
Total liabilities related to restricted securitized assets	$	4,421	$	4,327	$	4,467

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At February 2, 2020, the maximum remaining term of all securitized retail notes was approximately seven years.

XML

REVENUE RECOGNITION

3 Months Ended

Feb. 02, 2020

REVENUE RECOGNITION

REVENUE RECOGNITION

(4)  Revenue Recognition

The Company’s revenue by primary geographical market, major product line, and timing of revenue recognition in millions of dollars follow:

	Three Months Ended February 2, 2020
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,500	$	1,020	$	643	$	4,163
Canada		138		172		156		466
Western Europe		778		339		22		1,139
Central Europe and CIS		220		159		10		389
Latin America		455		159		66		680
Asia, Africa, Australia, New Zealand, and Middle East		504		256		34		794
Total	$	4,595	$	2,105	$	931	$	7,631
Major product lines:
Large Agriculture	$	2,139					$	2,139
Small Agriculture		1,765						1,765
Turf		468						468
Construction			$	841				841
Compact Construction				288				288
Roadbuilding				605				605
Forestry				274				274
Financial Products		27		7	$	931		965
Other		196		90				286
Total	$	4,595	$	2,105	$	931	$	7,631
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,540	$	2,079	$	26	$	6,645
Revenue recognized over time		55		26		905		986
Total	$	4,595	$	2,105	$	931	$	7,631

	Three Months Ended January 27, 2019
	Agriculture and Turf		Construction and Forestry		Financial Services		Total
Primary geographical markets:
United States	$	2,628	$	1,163	$	575	$	4,366
Canada		172		248		157		577
Western Europe		848		337		20		1,205
Central Europe and CIS		148		171		9		328
Latin America		548		150		64		762
Asia, Africa, Australia, New Zealand, and Middle East		453		263		30		746
Total	$	4,797	$	2,332	$	855	$	7,984
Major product lines:
Large Agriculture	$	2,167					$	2,167
Small Agriculture		1,808						1,808
Turf		506						506
Construction			$	1,009				1,009
Compact Construction				265				265
Roadbuilding				598				598
Forestry				352				352
Financial Products		20		6	$	855		881
Other		296		102				398
Total	$	4,797	$	2,332	$	855	$	7,984
Timing of revenue recognition:
Revenue recognized at a point in time	$	4,755	$	2,313			$	7,068
Revenue recognized over time		42		19	$	855		916
Total	$	4,797	$	2,332	$	855	$	7,984

Following is a description of the Company’s major product lines:

Large Agriculture – Includes net sales of tractors with more than approximately 200 horsepower and associated attachments, combines, cotton pickers, cotton strippers, self-propelled forage harvesters and related attachments, and sugarcane harvesters, harvesting front-end equipment, sugarcane loaders and pull behind scrapers, tillage, seeding, and application equipment, including sprayers, nutrient management and soil preparation machinery, and related attachments and service parts.

Small Agriculture – Includes net sales of medium and utility tractors with less than approximately 200 horsepower, hay and forage equipment, balers, mowers, and related attachments and service parts.

Turf – Includes net sales of turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements, other outdoor power products, and related attachments and service parts.

Construction – Includes net sales of a broad range of machines used in construction, earthmoving, and material handling, including backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, and related attachments and service parts.

Compact Construction – Includes net sales of smaller construction equipment, including compact excavators, compact track loaders, compact wheel loaders, skid steers, landscape loaders, and related attachments and service parts.

Roadbuilding – Includes net sales of equipment used in roadbuilding and renovation, including milling machines, recyclers, slipform pavers, surface miners, asphalt pavers, compactors, tandem and static rollers, mobile crushers and screens, mobile and stationary asphalt plants, and related attachments and service parts.

Forestry – Includes net sales of equipment used in timber harvesting, including log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments and service parts.

Financial Products – Includes finance and interest income primarily from retail notes related to sales of John Deere equipment to end customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties.

Other – Includes sales of certain components to other equipment manufacturers, revenue earned over time from precision guidance, telematics, and other information enabled solutions, revenue from service performed at company owned dealerships and service centers, gains on disposition of property and businesses, trademark licensing revenue, and other miscellaneous revenue items.

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These items are primarily for premiums for extended warranties, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheet. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 16, was $1,070 million, $1,010 million, and $956 million at February 2, 2020, November 3, 2019, and January 27, 2019, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended February 2, 2020 and January 27, 2019, $181 million and $156 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year.

The Company entered into contracts with customers to deliver equipment and services that have not been recognized at February 2, 2020 because the equipment or services have not been provided. These contracts primarily relate to extended warranty and certain precision guidance and telematic services. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $887 million at February 2, 2020. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2020 - $275, 2021 - $274, 2022 - $182, 2023 - $101, 2024 - $42, and later years - $13. The Company discloses unsatisfied performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are generally for sales to dealers and end customers for equipment, service parts, repair services, and certain telematics services.

XML

PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Feb. 02, 2020

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

(8)  Pension and Other Postretirement Benefits

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

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	84	$	66
Interest cost		87		111
Expected return on plan assets		(205)		(200)
Amortization of actuarial loss		62		35
Amortization of prior service cost		3		3
Settlements		3
Net cost	$	34	$	15

The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars:

	Three Months Ended
	February 2		January 27
	2020		2019
Service cost	$	12	$	10
Interest cost		37		54
Expected return on plan assets		(12)		(9)
Amortization of actuarial loss		7		5
Amortization of prior service credit		(1)		(18)
Curtailments		21
Net cost	$	64	$	42

The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income.

In the first quarter of 2020, the Company remeasured the U.S. OPEB health care plans. The wage plan was remeasured due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021. The salary plans were remeasured due to the U.S. voluntary employee-separation program (see Note 20), which resulted in a $21 million curtailment loss. The combined effect of the remeasurements was to reduce the benefit obligation by $245 million.

During the first three months of 2020, the Company contributed approximately $24 million to its pension plans and $43 million to its OPEB plans. The Company presently anticipates contributing an additional $68 million to its pension plans and $397 million to its OPEB plans during the remainder of fiscal year 2020. The anticipated OPEB contributions include a voluntary $300 million in the fourth quarter to a U.S. plan, which will increase plan assets. These pension and remaining OPEB contributions primarily include direct benefit payments from Company funds.

XML

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Feb. 02, 2020

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

(16)  Commitments and Contingencies

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

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $588 million and $514 million at February 2, 2020 and January 27, 2019, respectively.

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

	Three Months Ended
	February 2		January 27
	2020		2019
Beginning of period balance	$	1,800	$	1,652
Payments		(230)		(228)
Amortization of premiums received		(59)		(54)
Accruals for warranties		222		253
Premiums received		65		65
Foreign exchange		(6)		(1)
End of period balance	$	1,792	$	1,687

At February 2, 2020, the Company had approximately $360 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At February 2, 2020, the Company had accrued losses of approximately $14 million under these agreements. The maximum remaining term of the receivables guaranteed at February 2, 2020 was approximately seven years.

At February 2, 2020, the Company had commitments of approximately $264 million for the construction and acquisition of property and equipment. Also, at February 2, 2020, the Company had restricted assets of $83 million, primarily as collateral for borrowings and restricted other assets. See Note 12 for additional restricted assets associated with borrowings related to securitizations.

The Company also had other miscellaneous contingent liabilities totaling approximately $50 million at February 2, 2020. The accrued liability for these contingencies was not material at February 2, 2020.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark 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.

XML

EMPLOYEE-SEPARATION PROGRAM

3 Months Ended

Feb. 02, 2020

EMPLOYEE-SEPARATION PROGRAM

EMPLOYEE-SEPARATION PROGRAM

(20)  Employee-Separation Program

During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continues the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The program’s total estimated pretax expenses are approximately $136 million, of which $127 million was recorded in the first quarter. The payments for the program were also substantially made in the first quarter. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “Other operating expense.” The first quarter 2020 expenses that are included in operating profit of $105 million are allocated 37 percent “Cost of sales,” 15 percent “Research and development,” and 48 percent “Selling, administrative and general.” In addition, the expenses are allocated 75 percent to the agriculture and turf operations, 23 percent to the construction and forestry operations, and 2 percent to the financial services operations. Annual savings from these programs are estimated to be approximately $85 million with about $65 million in 2020.

XML

GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Amortized Intangible Assets:
Amortization expense of other intangible assets	$ 25	$ 27
Amortization expense of other intangible assets - remainder of 2020	77
Amortization expense of other intangible assets - 2021	101
Amortization expense of other intangible assets - 2022	100
Amortization expense of other intangible assets - 2023	98
Amortization expense of other intangible assets - 2024	$ 96

XML

SUPPLEMENTAL CONSOLIDATING DATA - Income Statement (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Net Sales and Revenues
Net sales and revenues	$ 7,631	$ 7,984
Costs and Expenses
Research and development expenses	425	407
Selling, administrative and general expenses	809	764
Interest expense	336	353
Total	7,062	7,307
Income of Consolidated Group before Income Taxes	569	677
Provision for income taxes	50	184
Income of Consolidated Group	519	493
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Net Income	518	500
Less: Net income attributable to noncontrolling interests	1	2
Net Income Attributable to Deere & Company	517	498
Net Sales
Net Sales and Revenues
Net sales	6,530	6,941
Costs and Expenses
Costs and expenses	5,077	5,432
Finance and Interest Income
Net Sales and Revenues
Net sales and revenues	896	815
Other
Net Sales and Revenues
Net sales and revenues	205	228
Costs and Expenses
Costs and expenses	415	351
Equipment Operations
Net Sales and Revenues
Net sales and revenues	6,766	7,179
Costs and Expenses
Research and development expenses	425	407
Selling, administrative and general expenses	672	645
Interest expense	63	71
Interest compensation to Financial Services	64	69
Total	6,374	6,695
Income of Consolidated Group before Income Taxes	392	484
Provision for income taxes	9	144
Income of Consolidated Group	383	340
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates	135	160
Net Income	518	500
Less: Net income attributable to noncontrolling interests	1	2
Net Income Attributable to Deere & Company	517	498
Equipment Operations | Financial Services
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates	137	154
Equipment Operations | Other
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates	(2)	6
Equipment Operations | Net Sales
Net Sales and Revenues
Net sales	6,530	6,941
Costs and Expenses
Costs and expenses	5,078	5,432
Equipment Operations | Finance and Interest Income
Net Sales and Revenues
Net sales and revenues	27	23
Equipment Operations | Other
Net Sales and Revenues
Net sales and revenues	209	215
Costs and Expenses
Costs and expenses	72	71
Financial Services
Net Sales and Revenues
Net sales and revenues	998	926
Costs and Expenses
Selling, administrative and general expenses	138	121
Interest expense	275	287
Total	821	733
Income of Consolidated Group before Income Taxes	177	193
Provision for income taxes	41	40
Income of Consolidated Group	136	153
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates	1	1
Net Income	137	154
Net Income Attributable to Deere & Company	137	154
Financial Services | Financial Services
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates	1	1
Financial Services | Finance and Interest Income
Net Sales and Revenues
Net sales and revenues	936	866
Financial Services | Other
Net Sales and Revenues
Net sales and revenues	62	60
Costs and Expenses
Costs and expenses	$ 408	$ 325

XML

FINANCING RECEIVABLES - Past Due Age Analysis (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019	Oct. 28, 2018
Financing Receivable, Past Due
Minimum number of days for a financing receivable to be considered past due	30 days
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
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	$ 497	$ 416	$ 489
Total Non-Performing	542	449	441
Current	30,890	32,863	28,960
Total Financing Receivables	31,929	33,728	29,890
Less allowance for credit losses	157	150	177	$ 178
Total financing receivables - net	31,772	33,578	29,713
30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	341	282	345
60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	133	128	141
90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	23	6	3
Retail Notes
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Financing Receivables	22,785		21,279
Less allowance for credit losses	88	89	111	$ 113
Retail Notes | Agriculture and Turf
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	218	212	226
Total Non-Performing	283	268	296
Current	18,514	18,931	17,408
Total Financing Receivables	19,015	19,411	17,930
Retail Notes | Agriculture and Turf | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	150	138	162
Retail Notes | Agriculture and Turf | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	65	73	63
Retail Notes | Agriculture and Turf | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	3	1	1
Retail Notes | Construction and Forestry
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	151	112	150
Total Non-Performing	131	127	107
Current	3,488	3,450	3,092
Total Financing Receivables	3,770	3,689	3,349
Retail Notes | Construction and Forestry | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	96	79	102
Retail Notes | Construction and Forestry | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	36	29	47
Retail Notes | Construction and Forestry | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	19	4	1
Other Financing Receivables | Agriculture and Turf
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	88	59	89
Total Non-Performing	100	28	28
Current	7,457	8,986	7,213
Total Financing Receivables	7,645	9,073	7,330
Other Financing Receivables | Agriculture and Turf | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	66	39	65
Other Financing Receivables | Agriculture and Turf | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	21	19	23
Other Financing Receivables | Agriculture and Turf | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	1	1	1
Other Financing Receivables | Construction and Forestry
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	40	33	24
Total Non-Performing	28	26	10
Current	1,431	1,496	1,247
Total Financing Receivables	1,499	1,555	1,281
Other Financing Receivables | Construction and Forestry | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	29	26	16
Other Financing Receivables | Construction and Forestry | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	$ 11	$ 7	$ 8

XML

DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Cash Flow Hedges
Cash flow hedge loss recorded in OCI to be reclassified within twelve months	$ 9
Gains or losses reclassified from OCI to earnings	0
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments
Cash Flow Hedges
Notional amount of cash flow hedge derivatives	$ 2,900	$ 3,150	$ 2,800

XML

DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Jan. 27, 2019
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ 8	$ (3)
Interest Rate Contracts
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, recognized in OCI	(2)	(9)
Interest Rate Contracts | Net Sales
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	(4)	(10)
Interest Rate Contracts | Interest Expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Fair value hedges, gains (losses)	96	133
Cash flow hedges, reclassified from OCI	(2)	2
Not designated as hedges, gains (losses)	2	(8)
Foreign Exchange Contracts | Cost of Sales
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	11	(5)
Foreign Exchange Contracts | Other Operating Expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ (1)	$ 20

XML

SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions	3 Months Ended
	Feb. 02, 2020	Nov. 03, 2019	Jan. 27, 2019
Securitization Transactions
Unconsolidated conduits, carrying value of liabilities	$ 1,370
Unconsolidated conduits, maximum exposure to loss	1,441
Short-term securitization borrowings	4,416	$ 4,321	$ 4,464
Accrued interest on borrowings - securitization transactions	5	6	3
Total liabilities related to restricted securitized assets - securitization transactions	$ 4,421	4,327	4,467
Maximum remaining term of all restricted securitized retail notes	7 years
Securitized
Securitization Transactions
Financing receivables securitized (retail notes)	$ 4,487	4,395	4,573
Allowance for credit losses - securitization transactions	(9)	(12)	(10)
Other assets - securitization transactions	91	82	109
Total restricted securitized assets - securitization transactions	4,569	4,465	4,672
VIE-Primary Beneficiary
Securitization Transactions
Total restricted securitized assets - securitization transactions	2,490	2,895	2,137
Total liabilities related to restricted securitized assets - securitization transactions	2,442	2,847	2,092
Non-VIE Banking Operation
Securitization Transactions
Total restricted securitized assets - securitization transactions	638	491	790
Total liabilities related to restricted securitized assets - securitization transactions	609	465	743
VIE-Not Primary Beneficiary
Securitization Transactions
Unconsolidated conduits, maximum exposure to loss	19	22	27
Total Assets	41,000
Total restricted securitized assets - securitization transactions	1,441	1,079	1,745
Total liabilities related to restricted securitized assets - securitization transactions	$ 1,370	$ 1,015	$ 1,632

XML

SUPPLEMENTAL CONSOLIDATING DATA (Tables)

3 Months Ended

Feb. 02, 2020

SUPPLEMENTAL CONSOLIDATING DATA

Supplemental Consolidating Data Income Statement

(21) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Net Sales and Revenues
Net sales	$	6,530	$	6,941
Finance and interest income		27		23	$	936	$	866
Other income		209		215		62		60
Total		6,766		7,179		998		926
Costs and Expenses
Cost of sales		5,078		5,432
Research and development expenses		425		407
Selling, administrative and general expenses		672		645		138		121
Interest expense		63		71		275		287
Interest compensation to Financial Services		64		69
Other operating expenses		72		71		408		325
Total		6,374		6,695		821		733
Income of Consolidated Group before Income Taxes		392		484		177		193
Provision for income taxes		9		144		41		40
Income of Consolidated Group		383		340		136		153
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates
Financial Services		137		154		1		1
Other		(2)		6
Total		135		160		1		1
Net Income		518		500		137		154
Less: Net income attributable to noncontrolling interests		1		2
Net Income Attributable to Deere & Company	$	517	$	498	$	137	$	154

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

Supplemental Consolidating Data Condensed Balance Sheet

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	February 2		November 3		January 27		February 2		November 3		January 27
	2020		2019		2019		2020		2019		2019
Assets
Cash and cash equivalents	$	2,862	$	3,175	$	2,671	$	740	$	682	$	955
Marketable securities		4		1		8		605		580		515
Receivables from unconsolidated subsidiaries and affiliates		1,425		2,017		274
Trade accounts and notes receivable – net		1,115		1,482		1,177		5,707		5,153		5,746
Financing receivables – net		130		65		102		27,164		29,130		25,048
Financing receivables securitized – net		42		44		67		4,436		4,339		4,496
Other receivables		1,252		1,376		1,485		131		116		184
Equipment on operating leases – net								7,504		7,567		6,904
Inventories		6,482		5,975		7,402
Property and equipment – net		5,857		5,929		5,739		43		44		46
Investments in unconsolidated subsidiaries and affiliates		5,317		5,326		5,175		17		16		16
Goodwill		2,945		2,917		3,048
Other intangible assets – net		1,349		1,380		1,507
Retirement benefits		871		836		1,291		58		58		57
Deferred income taxes		1,821		1,896		1,507		56		57		70
Other assets		1,546		1,158		1,241		818		741		593
Total Assets	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	947	$	987	$	1,494	$	9,061	$	9,797	$	9,244
Short-term securitization borrowings		42		44		67		4,374		4,277		4,397
Payables to unconsolidated subsidiaries and affiliates		146		142		227		1,387		1,970		155
Accounts payable and accrued expenses		8,325		9,232		8,711		1,786		1,836		1,821
Deferred income taxes		408		414		470		546		568		798
Long-term borrowings		5,567		5,415		4,712		24,908		24,814		23,143
Retirement benefits and other liabilities		5,639		5,912		5,666		100		94		93
Total liabilities		21,074		22,146		21,347		42,162		43,356		39,651
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest		14		14		14
Stockholders’ Equity
Common stock, $1 par value (issued shares at February 2, 2020 – 536,431,204)		4,675		4,642		4,512		2,107		2,107		2,099
Common stock in treasury		(17,549)		(17,474)		(16,422)
Retained earnings		30,129		29,852		27,816		3,390		3,378		3,219
Accumulated other comprehensive income (loss)		(5,329)		(5,607)		(4,578)		(380)		(358)		(339)
Total Deere & Company stockholders' equity		11,926		11,413		11,328		5,117		5,127		4,979
Noncontrolling interests		4		4		5
Total stockholders’ equity		11,930		11,417		11,333		5,117		5,127		4,979
Total Liabilities and Stockholders’ Equity	$	33,018	$	33,577	$	32,694	$	47,279	$	48,483	$	44,630

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the "Equipment Operations" and "Financial Services" have been eliminated to arrive at the consolidated financial statements.

Supplemental Consolidating Data Statement of Cash Flows

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Three Months Ended February 2, 2020 and January 27, 2019
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2020		2019		2020		2019
Cash Flows from Operating Activities
Net income	$	518	$	500	$	137	$	154
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses		1		(1)		14		3
Provision for depreciation and amortization		261		260		311		276
Undistributed earnings of unconsolidated subsidiaries and affiliates		(11)		39		(1)
Credit for deferred income taxes		(7)		(31)		(22)		(25)
Changes in assets and liabilities:
Trade receivables and Equipment Operations' financing receivables		312		186
Inventories		(530)		(1,290)
Accounts payable and accrued expenses		(1,058)		(535)		(19)		(12)
Accrued income taxes payable/receivable		(43)		(429)		(10)		527
Retirement benefits		30		(6)		6		2
Other		147		(127)		30		47
Net cash provided by (used for) operating activities		(380)		(1,434)		446		972
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						6,056		5,885
Proceeds from maturities and sales of marketable securities				3		18		5
Proceeds from sales of equipment on operating leases						426		371
Cost of receivables acquired (excluding trade and wholesale)						(4,569)		(4,448)
Purchases of marketable securities				(2)		(34)		(30)
Purchases of property and equipment		(271)		(297)
Cost of equipment on operating leases acquired						(669)		(505)
Increase in trade and wholesale receivables						(382)		(1,021)
Other		(9)		(6)		11		26
Net cash provided by (used for) investing activities		(280)		(302)		857		283
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		20		88		(493)		388
Change in intercompany receivables/payables		572		1,526		(572)		(1,526)
Proceeds from long-term borrowings		167		91		1,535		2,120
Payments of long-term borrowings		(83)		(142)		(1,568)		(1,799)
Proceeds from issuance of common stock		53		51
Repurchases of common stock		(114)		(144)
Dividends paid		(242)		(220)		(125)		(200)
Other		(29)		(23)		(9)		(8)
Net cash provided by (used for) financing activities		344		1,227		(1,232)		(1,025)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		3		(12)		(4)		(1)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(313)		(521)		67		229
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		3,196		3,202		760		813
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	2,883	$	2,681	$	827	$	1,042

* Deere & Company with Financial Services on the equity basis.

The supplemental consolidating data is presented for informational purposes. Transactions between the “Equipment Operations” and “Financial Services” have been eliminated to arrive at the consolidated financial statements.

XML

LEASES (Tables)

3 Months Ended

Feb. 02, 2020

LEASES

Summary of Lease Expense by Type

The lease expense by type consisted of the following in millions of dollars:

	Three Months Ended
	February 2, 2020
Operating lease expense	$	32
Short-term lease expense		4
Variable lease expense		10
Finance lease depreciation expense		5
Total lease expense	$	51

Schedule of Operating and Finance Lease Right of Use Assets and Liabilities, Location in Condensed Consolidated Balance Sheet

Operating and finance lease right of use assets and liabilities follow in millions of dollars:

	February 2, 2020
Operating leases
Other assets	$	376
Accounts payable and accrued expenses		361
Finance leases
Property and equipment — net	$	37
Short-term borrowings		12
Long-term borrowings		23
Total finance lease liabilities	$	35

Schedule of Weighted-Average Remaining Lease Term in Years and Discount Rates

The weighted-average remaining lease term in years and discount rates follows:

	February 2, 2020
Weighted-average remaining lease terms
Operating leases	7
Finance leases	3
Weighted-average discount rate
Operating leases	2.5%
Finance leases	3.2%

Schedule of Operating Lease Payment Amounts

Lease payment amounts in each of the next five years at February 2, 2020 follow in millions of dollars:

	Operating		Finance
February 2, 2020	Leases		Leases
Remainder of 2020	$	93	$	12
2021		80		11
2022		69		8
2023		53		3
2024		38		2
2025		19
Later years		33		1
Total lease payments		385		37
Less imputed interest		24		2
Total lease liabilities	$	361	$	35

Schedule of Finance Lease Payment Amounts

Lease payment amounts in each of the next five years at February 2, 2020 follow in millions of dollars:

	Operating		Finance
February 2, 2020	Leases		Leases
Remainder of 2020	$	93	$	12
2021		80		11
2022		69		8
2023		53		3
2024		38		2
2025		19
Later years		33		1
Total lease payments		385		37
Less imputed interest		24		2
Total lease liabilities	$	361	$	35

Schedule of Future Minimum Payments under Previous Lease Standard for Operating Leases

Future minimum lease payments under the previous lease standard for operating and finance leases at November 3, 2019 follow in millions of dollars:

	Operating		Capital
November 3, 2019	Leases		Leases
2020	$	111	$	12
2021		77		10
2022		56		6
2023		39		2
2024		28		1
Later years		26		1
Total minimum lease payments	$	337	$	32

Schedule of Future Minimum Payments under Previous Lease Standard for Capital Leases

Future minimum lease payments under the previous lease standard for operating and finance leases at November 3, 2019 follow in millions of dollars:

	Operating		Capital
November 3, 2019	Leases		Leases
2020	$	111	$	12
2021		77		10
2022		56		6
2023		39		2
2024		28		1
Later years		26		1
Total minimum lease payments	$	337	$	32

Schedule of Cash Paid for Amounts Included in the Measurement of Lease Liabilities and Right of Use Assets Obtained in Exchange for Lease Liabilities

Cash paid for amounts included in the measurement of lease liabilities:

	Three Months Ended
	February 2, 2020
Operating cash flows from operating leases	$	30
Financing cash flows from finance leases		5

Right of use assets obtained in exchange for lease liabilities:

	Three Months Ended
	February 2, 2020
Operating leases	$	16
Finance leases		9

Schedule of Lease Revenues Earned

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

	Three Months Ended
	February 2, 2020
Sales-type and direct finance lease revenues	$	36
Operating lease revenues		374
Variable lease revenues		5
Total lease revenues	$	415

Schedule of Sales-type and Direct Financing Lease Receivables by Product Category

Sales-type and direct financing lease receivables by product category were as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	863	$	897
Construction and forestry		1,007		1,033
Total		1,870		1,930
Guaranteed residual values		152		232
Unguaranteed residual values		98		101
Less unearned finance income		209		212
Financing leases receivables	$	1,911	$	2,051

Schedule of Scheduled Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Leases Receivables

Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at February 2, 2020 follow in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	732
2021		614
2022		380
2023		188
2024		86
2025		18
Later years		4
Total	$	2,022

Schedule of Finance Lease Scheduled Payments under the Previous Lease Standard

Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 follow in millions of dollars:

	November 3
	2019
Due in:
2020	$	833
2021		557
2022		321
2023		153
2024		53
Later years		13
Total	$	1,930

Schedule of Cost of Equipment on Operating Leases by Product Category

The cost of equipment on operating leases by product category was as follows in millions of dollars:

	February 2		November 3
	2020		2019
Agriculture and turf	$	7,260	$	7,257
Construction and forestry		2,163		2,165
Total		9,423		9,422
Less accumulated depreciation		1,919		1,855
Equipment on operating leases - net	$	7,504	$	7,567

Schedule of Lease Payments for Equipment on Operating Leases

Lease payments for equipment on operating leases at February 2, 2020 were scheduled as follows in millions of dollars:

	February 2
	2020
Due in:
Remainder of 2020	$	948
2021		871
2022		513
2023		248
2024		80
2025		3
Total	$	2,663

Schedule of Rental Payments for Equipment on Operating Leases under the Previous Lease Standard

Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows in millions of dollars:

	November 3
	2019
Due in:
2020	$	1,086
2021		759
2022		419
2023		193
2024		41
Total	$	2,498