UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from ____ to ____
Commission file no:
(Exact name of registrant as specified in its charter)
|
|
(Address of principal executive offices)
Telephone Number: (
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol | Name of each exchange on which registered | ||
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.
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).
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.
☒ | 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
At July 28, 2024,
PART I. FINANCIAL INFORMATION
Item 1.FINANCIAL STATEMENTS
DEERE & COMPANY | |||||||||||||
STATEMENTS OF CONSOLIDATED INCOME | |||||||||||||
For the Three and Nine Months Ended July 28, 2024 and July 30, 2023 | |||||||||||||
(In millions of dollars and shares except per share amounts) Unaudited | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |||||
Net Sales and Revenues | |||||||||||||
Net sales |
| $ | $ |
| $ | $ | |||||||
Finance and interest income |
|
| |||||||||||
Other income |
|
| |||||||||||
Total |
|
| |||||||||||
Costs and Expenses | |||||||||||||
Cost of sales |
|
| |||||||||||
Research and development expenses |
|
| |||||||||||
Selling, administrative and general expenses |
|
| |||||||||||
Interest expense |
|
| |||||||||||
Other operating expenses |
|
| |||||||||||
Total |
|
| |||||||||||
Income of Consolidated Group before Income Taxes |
|
| |||||||||||
Provision for income taxes |
|
| |||||||||||
Income of Consolidated Group |
|
| |||||||||||
Equity in income of unconsolidated affiliates |
|
| |||||||||||
Net Income |
|
| |||||||||||
Less: Net loss attributable to noncontrolling interests | ( |
| ( | ( |
| ( | |||||||
Net Income Attributable to Deere & Company |
| $ | $ |
| $ | $ | |||||||
Per Share Data | |||||||||||||
Basic |
| $ | $ |
| $ | $ | |||||||
Diluted |
|
| |||||||||||
Dividends declared | |||||||||||||
Dividends paid | |||||||||||||
Average Shares Outstanding | |||||||||||||
Basic |
|
| |||||||||||
Diluted |
|
| |||||||||||
See Condensed Notes to Interim Consolidated Financial Statements.
2
DEERE & COMPANY | |||||||||||||
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME | |||||||||||||
For the Three and Nine Months Ended July 28, 2024 and July 30, 2023 | |||||||||||||
(In millions of dollars) Unaudited | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| |||||
Net Income |
| $ | $ |
| $ | $ | |||||||
Other Comprehensive Income (Loss), Net of Income Taxes | |||||||||||||
Retirement benefits adjustment | ( |
| ( | ( |
| ( | |||||||
Cumulative translation adjustment | ( |
| ( |
| |||||||||
Unrealized gain (loss) on derivatives | ( |
| ( |
| ( | ||||||||
Unrealized gain (loss) on debt securities |
| ( |
| ||||||||||
Other Comprehensive Income (Loss), Net of Income Taxes | ( |
| ( |
| |||||||||
Comprehensive Income of Consolidated Group |
|
| |||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( |
| ( | ( |
| ||||||||
Comprehensive Income Attributable to Deere & Company |
| $ | $ |
| $ | $ | |||||||
See Condensed Notes to Interim Consolidated Financial Statements.
3
DEERE & COMPANY | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(In millions of dollars) Unaudited | ||||||||||
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 |
| |||||||
Assets | ||||||||||
Cash and cash equivalents |
| $ | $ | $ | ||||||
Marketable securities |
|
| ||||||||
Trade accounts and notes receivable – net |
|
| ||||||||
Financing receivables – net |
|
| ||||||||
|
| |||||||||
Other receivables |
|
| ||||||||
Equipment on operating leases – net |
|
| ||||||||
Inventories |
|
| ||||||||
Property and equipment – net |
|
| ||||||||
Goodwill |
|
| ||||||||
Other intangible assets – net |
|
| ||||||||
Retirement benefits |
|
| ||||||||
Deferred income taxes |
|
| ||||||||
Other assets |
|
| ||||||||
Assets held for sale |
|
|
| |||||||
Total Assets |
| $ | $ | $ | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Liabilities | ||||||||||
Short-term borrowings | $ | $ | $ | |||||||
Short-term securitization borrowings |
|
| ||||||||
Accounts payable and accrued expenses |
|
| ||||||||
Deferred income taxes |
|
| ||||||||
Long-term borrowings |
|
| ||||||||
Retirement benefits and other liabilities |
|
| ||||||||
Liabilities held for sale |
|
|
| |||||||
Total liabilities |
|
| ||||||||
Commitments and contingencies (Note 16) | ||||||||||
Redeemable noncontrolling interest | ||||||||||
Stockholders’ Equity | ||||||||||
Common stock, $ |
|
| ||||||||
Common stock in treasury | ( |
| ( |
| ( | |||||
Retained earnings |
|
| ||||||||
Accumulated other comprehensive income (loss) | ( |
| ( |
| ( | |||||
Total Deere & Company stockholders’ equity |
|
| ||||||||
Noncontrolling interests |
|
| ||||||||
Total stockholders’ equity |
|
| ||||||||
Total Liabilities and Stockholders’ Equity | $ | $ | $ | |||||||
See Condensed Notes to Interim Consolidated Financial Statements.
4
DEERE & COMPANY | |||||||
STATEMENTS OF CONSOLIDATED CASH FLOWS | |||||||
For the Nine Months Ended July 28, 2024 and July 30, 2023 | |||||||
(In millions of dollars) Unaudited | |||||||
| 2024 |
| 2023 |
| |||
Cash Flows from Operating Activities |
|
| |||||
Net income |
| $ | $ | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision (credit) for credit losses |
| ( | |||||
Provision for depreciation and amortization |
| ||||||
Impairments and other adjustments |
| ||||||
Share-based compensation expense |
| ||||||
Credit for deferred income taxes | ( |
| ( | ||||
Changes in assets and liabilities: | |||||||
Receivables related to sales | ( |
| ( | ||||
Inventories |
| ( | |||||
Accounts payable and accrued expenses | ( |
| |||||
Accrued income taxes payable/receivable |
| ( | |||||
Retirement benefits | ( |
| ( | ||||
Other | ( |
| |||||
Net cash provided by operating activities |
| ||||||
Cash Flows from Investing Activities | |||||||
Collections of receivables (excluding receivables related to sales) |
| ||||||
Proceeds from maturities and sales of marketable securities |
| ||||||
Proceeds from sales of equipment on operating leases |
| ||||||
Cost of receivables acquired (excluding receivables related to sales) | ( |
| ( | ||||
Purchases of marketable securities | ( |
| ( | ||||
Purchases of property and equipment | ( |
| ( | ||||
Cost of equipment on operating leases acquired | ( |
| ( | ||||
Collateral on derivatives – net | |||||||
Other | ( |
| ( | ||||
Net cash used for investing activities | ( |
| ( | ||||
Cash Flows from Financing Activities | |||||||
Net proceeds (payments) in short-term borrowings (original maturities three months or less) | ( |
| |||||
Proceeds from borrowings issued (original maturities greater than three months) |
| ||||||
Payments of borrowings (original maturities greater than three months) | ( |
| ( | ||||
Repurchases of common stock | ( |
| ( | ||||
Dividends paid | ( |
| ( | ||||
Other | ( |
| ( | ||||
Net cash provided by (used for) financing activities | ( |
| |||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | ( |
| |||||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | ( | ||||||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
| ||||||
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ | $ | |||||
Components of Cash, Cash Equivalents, and Restricted Cash | |||||||
Cash and cash equivalents | $ | $ | |||||
Cash, cash equivalents, and restricted cash (Assets held for sale) | |||||||
Restricted cash (Other assets) | |||||||
Total Cash, Cash Equivalents, and Restricted Cash | $ | $ | |||||
See Condensed Notes to Interim Consolidated Financial Statements.
5
DEERE & COMPANY | |||||||||||||||||||||||
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
For the Three and Nine Months Ended July 28, 2024 and July 30, 2023 | |||||||||||||||||||||||
(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 | |||||||||
Three Months Ended July 30, 2023 | |||||||||||||||||||||||
Balance April 30, 2023 |
| $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||
Net income (loss) |
|
| ( | ||||||||||||||||||||
Other comprehensive income |
|
| |||||||||||||||||||||
Repurchases of common stock |
| ( | ( | ||||||||||||||||||||
Treasury shares reissued |
| ||||||||||||||||||||||
Dividends declared |
| ( | ( | ( |
| ||||||||||||||||||
Share based awards and other |
| ( | |||||||||||||||||||||
Balance July 30, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
Nine Months Ended July 30, 2023 |
|
| |||||||||||||||||||||
Balance October 30, 2022 |
| $ | $ | $ | ( | $ | $ | ( | $ | $ |
| ||||||||||||
Net income (loss) |
| ( | |||||||||||||||||||||
Other comprehensive income |
|
| |||||||||||||||||||||
Repurchases of common stock |
| ( | ( | ||||||||||||||||||||
Treasury shares reissued |
| ||||||||||||||||||||||
Dividends declared |
| ( | ( | ( |
| ||||||||||||||||||
Share based awards and other |
| ( | |||||||||||||||||||||
Balance July 30, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
|
| ||||||||||||||||||||||
Three Months Ended July 28, 2024 | |||||||||||||||||||||||
Balance April 28, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
Net income (loss) |
| ( | |||||||||||||||||||||
Other comprehensive loss | ( | ( |
|
| |||||||||||||||||||
Repurchases of common stock | ( | ( | |||||||||||||||||||||
Treasury shares reissued | |||||||||||||||||||||||
Dividends declared | ( | ( | ( |
| |||||||||||||||||||
Noncontrolling interest redemption (Note 21) | ( | ||||||||||||||||||||||
Share based awards and other |
|
| ( | ||||||||||||||||||||
Balance July 28, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
Nine Months Ended July 28, 2024 | |||||||||||||||||||||||
Balance October 29, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
Net income (loss) | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( |
| ||||||||||||||||||||
Repurchases of common stock | ( | ( | |||||||||||||||||||||
Treasury shares reissued | |||||||||||||||||||||||
Dividends declared | ( | ( | ( |
| |||||||||||||||||||
Noncontrolling interest redemption (Note 21) | ( | ||||||||||||||||||||||
Share based awards and other | ( |
| |||||||||||||||||||||
Balance July 28, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||
See Condensed Notes to Interim Consolidated Financial Statements.
6
Condensed Notes to Interim Consolidated Financial Statements (Unaudited)
(1) Organization and Consolidation
Deere & Company has been developing innovative solutions to help its customers become more profitable for more than 185 years. References to “Deere & Company,” “John Deere,” “we,” “us,” or “our” include our consolidated subsidiaries. We manage our business through the following operating segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS). References to “agriculture and turf” include both PPA and SAT.
We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2024 and 2023 were July 28, 2024 and July 30, 2023, respectively. Both third quarters contained
All amounts are presented in millions of dollars, unless otherwise specified.
(2) Summary of Significant Accounting Policies and New Accounting PROnouncements
Quarterly Financial Statements
The interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in our latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.
Use of Estimates in Financial Statements
Certain accounting policies require management to make estimates and assumptions in determining the amounts reflected in the financial statements and related disclosures. Actual results could differ from those estimates.
New Accounting Pronouncements
We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance.
Accounting Pronouncements Adopted
We adopted the following standards in 2024, none of which had a material effect on our consolidated financial statements.
Accounting Pronouncements to be Adopted
In December 2023, the FASB issued
We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements.
7
(3) Revenue Recognition
Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow:
Three Months Ended July 28, 2024 | ||||||||||||||||
| Production & Precision Ag |
| Small Ag & Turf |
| Construction |
| Financial |
| Total | |||||||
Primary geographic markets: |
|
| ||||||||||||||
United States | $ | $ | $ | $ | $ | |||||||||||
Canada |
|
| ||||||||||||||
Western Europe |
|
| ||||||||||||||
Central Europe and CIS |
|
| ||||||||||||||
Latin America |
|
| ||||||||||||||
Asia, Africa, Oceania, and Middle East | ||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Major product lines: |
|
| ||||||||||||||
Production agriculture | $ |
|
|
| $ | |||||||||||
Small agriculture |
| $ |
|
|
|
| ||||||||||
Turf |
|
|
|
|
| |||||||||||
Construction |
|
| $ |
|
|
| ||||||||||
Compact construction |
|
|
| |||||||||||||
Roadbuilding |
|
|
|
|
| |||||||||||
Forestry |
|
|
|
|
| |||||||||||
Financial products | $ |
| ||||||||||||||
Other |
|
|
| |||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Revenue recognized: |
|
| ||||||||||||||
At a point in time | $ | $ | $ | $ | $ | |||||||||||
Over time | ||||||||||||||||
Total | $ | $ | $ | $ | $ |
| Nine Months Ended July 28, 2024 | |||||||||||||||
Production & Precision Ag |
| Small Ag & Turf |
| Construction |
| Financial |
| Total | ||||||||
Primary geographic markets: | ||||||||||||||||
United States | $ | $ | $ | $ | $ | |||||||||||
Canada |
|
| ||||||||||||||
Western Europe |
|
| ||||||||||||||
Central Europe and CIS |
|
| ||||||||||||||
Latin America |
|
| ||||||||||||||
Asia, Africa, Oceania, and Middle East | ||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Major product lines: |
|
| ||||||||||||||
Production agriculture | $ |
|
|
| $ | |||||||||||
Small agriculture |
| $ |
|
|
|
| ||||||||||
Turf |
|
|
|
|
| |||||||||||
Construction |
|
| $ |
|
|
| ||||||||||
Compact construction |
|
|
| |||||||||||||
Roadbuilding |
|
|
|
|
| |||||||||||
Forestry |
|
|
|
| ||||||||||||
Financial products | $ |
| ||||||||||||||
Other |
|
|
| |||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Revenue recognized: |
|
| ||||||||||||||
At a point in time | $ | $ | $ | $ | $ | |||||||||||
Over time | ||||||||||||||||
Total | $ | $ | $ | $ | $ |
8
Three Months Ended July 30, 2023 | ||||||||||||||||
| Production & Precision Ag |
| Small Ag & Turf |
| Construction |
| Financial |
| Total | |||||||
Primary geographic markets: |
|
| ||||||||||||||
United States | $ | $ | $ | $ | $ | |||||||||||
Canada |
|
| ||||||||||||||
Western Europe |
| |||||||||||||||
Central Europe and CIS |
| |||||||||||||||
Latin America |
| |||||||||||||||
Asia, Africa, Oceania, and Middle East | ||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Major product lines: |
|
| ||||||||||||||
Production agriculture | $ |
|
| $ | ||||||||||||
Small agriculture | $ |
|
|
|
| |||||||||||
Turf |
|
|
|
| ||||||||||||
Construction |
| $ |
|
|
| |||||||||||
Compact construction |
|
| ||||||||||||||
Roadbuilding |
|
|
|
| ||||||||||||
Forestry |
|
|
|
| ||||||||||||
Financial products | $ |
| ||||||||||||||
Other |
|
|
| |||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Revenue recognized: |
|
| ||||||||||||||
At a point in time | $ | $ | $ | $ | $ | |||||||||||
Over time | ||||||||||||||||
Total | $ | $ | $ | $ | $ |
Nine Months Ended July 30, 2023 | ||||||||||||||||
| Production & Precision Ag |
| Small Ag & Turf |
| Construction |
| Financial |
| Total | |||||||
Primary geographic markets: | ||||||||||||||||
United States | $ | $ | $ | $ | $ | |||||||||||
Canada |
| |||||||||||||||
Western Europe |
| |||||||||||||||
Central Europe and CIS |
| |||||||||||||||
Latin America |
| |||||||||||||||
Asia, Africa, Oceania, and Middle East | ||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Major product lines: |
|
| ||||||||||||||
Production agriculture | $ |
|
|
| $ | |||||||||||
Small agriculture |
| $ |
|
|
| |||||||||||
Turf |
|
|
|
| ||||||||||||
Construction |
|
| $ |
|
| |||||||||||
Compact construction |
|
|
| |||||||||||||
Roadbuilding |
|
|
|
| ||||||||||||
Forestry |
|
|
|
| ||||||||||||
Financial products | $ |
| ||||||||||||||
Other |
|
| ||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||
Revenue recognized: |
|
| ||||||||||||||
At a point in time | $ | $ | $ | $ | $ | |||||||||||
Over time | ||||||||||||||||
Total | $ | $ | $ | $ | $ |
9
We invoice in advance of recognizing the sale of certain products and the revenue for certain services. These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance, telematic services, and other information enabled solutions. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received, but not recognized in revenue, was $
The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $
(4) Other Comprehensive Income Items
The after-tax components of accumulated other comprehensive income (loss) follow:
July 28 | October 29 | July 30 | ||||||||
2024 | 2023 | 2023 | ||||||||
Retirement benefits adjustment | $ | ( | $ | ( | $ | ( | ||||
Cumulative translation adjustment | ( | ( | ( | |||||||
Unrealized gain (loss) on derivatives | ( | ( | ( | |||||||
Unrealized gain (loss) on debt securities | ( | ( | ( | |||||||
Total accumulated other comprehensive income (loss) | $ | ( | $ | ( | $ | ( |
The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss).
| Before |
| Tax |
| After |
| ||||
Tax | (Expense) | Tax |
| |||||||
Three Months Ended July 28, 2024 | Amount | Credit | Amount |
| ||||||
Cumulative translation adjustment |
| $ | ( |
|
|
| $ | ( | ||
Unrealized gain (loss) on derivatives: | ||||||||||
Unrealized hedging gain (loss) | ( | $ | ( | |||||||
Reclassification of realized (gain) loss to: | ||||||||||
Interest rate contracts – Interest expense | ( | ( | ||||||||
Net unrealized gain (loss) on derivatives | ( | ( | ||||||||
Unrealized gain (loss) on debt securities: | ||||||||||
Unrealized holding gain (loss) | ( | |||||||||
Net unrealized gain (loss) on debt securities | ( | |||||||||
Retirement benefits adjustment: | ||||||||||
Net actuarial gain (loss) | ( | ( | ||||||||
Reclassification to Other operating expenses through amortization of: | ||||||||||
Actuarial (gain) loss | ( | ( | ||||||||
Prior service (credit) cost | ( | |||||||||
Settlements | ( |
| ||||||||
Net unrealized gain (loss) on retirement benefits adjustment | ( | ( | ||||||||
Total other comprehensive income (loss) |
| $ | ( | $ | $ | ( |
10
| Before |
| Tax |
| After |
| ||||
Tax | (Expense) | Tax |
| |||||||
Nine Months Ended July 28, 2024 | Amount | Credit | Amount |
| ||||||
Cumulative translation adjustment |
| $ | ( | $ | $ | ( | ||||
Unrealized gain (loss) on derivatives: | ||||||||||
Unrealized hedging gain (loss) |
| |||||||||
Reclassification of realized (gain) loss to: | ||||||||||
Interest rate contracts – Interest expense | ( | ( | ||||||||
Net unrealized gain (loss) on derivatives | ( | ( | ||||||||
Unrealized gain (loss) on debt securities: | ||||||||||
Unrealized holding gain (loss) | ||||||||||
Reclassification of realized (gain) loss – Other income | ( | |||||||||
Net unrealized gain (loss) on debt securities | ( | |||||||||
Retirement benefits adjustment: | ||||||||||
Net actuarial gain (loss) | ( | ( | ||||||||
Reclassification to Other operating expenses through amortization of: | ||||||||||
Actuarial (gain) loss | ( | ( | ||||||||
Prior service (credit) cost | ( | |||||||||
Settlements | ( | |||||||||
Net unrealized gain (loss) on retirement benefits adjustment | ( | ( | ||||||||
Total other comprehensive income (loss) |
| $ | ( | $ | $ | ( |
| Before |
| Tax |
| After |
| ||||
Tax | (Expense) | Tax |
| |||||||
Three Months Ended July 30, 2023 | Amount | Credit | Amount |
| ||||||
Cumulative translation adjustment |
| $ | $ |
| $ | |||||
Unrealized gain (loss) on derivatives: | ||||||||||
Unrealized hedging gain (loss) | ( | |||||||||
Reclassification of realized (gain) loss to: |
| |||||||||
Interest rate contracts – Interest expense | ( | ( | ||||||||
Net unrealized gain (loss) on derivatives | ( | |||||||||
Unrealized gain (loss) on debt securities: | ||||||||||
Unrealized holding gain (loss) | ( | ( | ||||||||
Net unrealized gain (loss) on debt securities | ( | ( | ||||||||
Retirement benefits adjustment: | ||||||||||
Net actuarial gain (loss) | ( |
| ( | |||||||
Reclassification to Other operating expenses through amortization of: |
| |||||||||
Actuarial (gain) loss | ( | ( | ||||||||
Prior service (credit) cost | ( | |||||||||
Net unrealized gain (loss) on retirement benefits adjustment | ( | ( | ||||||||
Total other comprehensive income (loss) |
| $ | $ | $ |
11
| Before |
| Tax |
| After |
| ||||
Tax | (Expense) | Tax |
| |||||||
Nine Months Ended July 30, 2023 | Amount | Credit | Amount |
| ||||||
Cumulative translation adjustment |
| $ | $ | $ | ||||||
Unrealized gain (loss) on derivatives: | ||||||||||
Unrealized hedging gain (loss) | ( | |||||||||
Reclassification of realized (gain) loss to: |
| |||||||||
Interest rate contracts – Interest expense | ( | ( | ||||||||
Net unrealized gain (loss) on derivatives | ( | ( | ||||||||
Unrealized gain (loss) on debt securities: | ||||||||||
Unrealized holding gain (loss) | ( | |||||||||
Net unrealized gain (loss) on debt securities | ( | |||||||||
Retirement benefits adjustment: | ||||||||||
Net actuarial gain (loss) | ( | ( | ||||||||
Reclassification to Other operating expenses through amortization of: |
| |||||||||
Actuarial (gain) loss | ( | ( | ||||||||
Prior service (credit) cost | ( | |||||||||
Settlements | ( | |||||||||
Net unrealized gain (loss) on retirement benefits adjustment | ( | ( | ||||||||
Total other comprehensive income (loss) |
| $ | $ | $ |
(5) Earnings Per Share
A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:
| Three Months Ended | Nine Months Ended |
| ||||||||||
July 28 | July 30 | July 28 | July 30 |
| |||||||||
2024 | 2023 | 2024 | 2023 |
| |||||||||
Net income attributable to Deere & Company |
| $ |
| $ |
| $ |
| $ | |||||
Average shares outstanding |
|
| |||||||||||
Basic per share | $ | $ | $ | $ | |||||||||
Average shares outstanding |
|
| |||||||||||
Effect of dilutive stock options and restricted stock awards |
|
| |||||||||||
Total potential shares outstanding |
|
| |||||||||||
Diluted per share | $ | $ | $ | $ | |||||||||
Shares excluded from EPS calculation, as antidilutive |
12
(6) Pension and Other Postretirement Benefits
We have several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans. These plans cover U.S. employees and certain foreign employees.
Three Months Ended | Nine Months Ended |
| |||||||||||
July 28 | July 30 | July 28 | July 30 |
| |||||||||
2024 | 2023 | 2024 | 2023 |
| |||||||||
Pensions: | |||||||||||||
Service cost |
| $ |
| $ |
| $ |
| $ | |||||
|
| ||||||||||||
( |
| ( | ( |
| ( | ||||||||
( |
| ( | ( |
| ( | ||||||||
|
| ||||||||||||
|
|
| |||||||||||
Net benefit | $ | ( | $ | ( | $ | ( | $ | ( | |||||
OPEB: | |||||||||||||
Service cost |
| $ |
| $ |
| $ |
| $ | |||||
|
| ||||||||||||
( |
| ( | ( |
| ( | ||||||||
( |
| ( | ( |
| ( | ||||||||
( |
| ( | ( |
| ( | ||||||||
Net cost | $ | $ | $ | $ |
The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.”
During the first nine months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans:
Pensions | OPEB | ||||||
Contributed |
| $ |
| $ |
| ||
Expected contributions remainder of the year |
|
13
(7) Segment DATA
Information relating to operations by operating segment follows:
Three Months Ended | Nine Months Ended |
| |||||||||||||||
| July 28 | July 30 | % | July 28 | July 30 | % |
| ||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change |
| |||||||||||
Net sales and revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||||
Production & precision ag net sales |
| $ | $ | - |
| $ | $ | - | |||||||||
Small ag & turf net sales | - | - | |||||||||||||||
Construction & forestry net sales |
| - |
| - | |||||||||||||
Financial services revenues |
| + |
| + | |||||||||||||
Other revenues |
| - |
| + | |||||||||||||
Total net sales and revenues |
| $ | $ | - |
| $ | $ | - | |||||||||
Operating profit: | |||||||||||||||||
Production & precision ag |
| $ | $ | - |
| $ | $ | - | |||||||||
Small ag & turf | - | - | |||||||||||||||
Construction & forestry |
| - |
| - | |||||||||||||
Financial services |
| - |
| + | |||||||||||||
Total operating profit |
| - |
| - | |||||||||||||
Reconciling items |
| - |
| + | |||||||||||||
Income taxes | ( |
| ( | - | ( |
| ( | - | |||||||||
Net income attributable to Deere & Company |
| $ | $ | - |
| $ | $ | - | |||||||||
Intersegment sales and revenues: | |||||||||||||||||
Production & precision ag net sales |
| $ | $ | - |
| $ | $ | - | |||||||||
Small ag & turf net sales |
| - | - | ||||||||||||||
Construction & forestry net sales |
|
|
|
|
| ||||||||||||
Financial services revenues |
| - |
| - |
Operating profit for PPA, SAT, and CF is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit of financial services includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and OPEB benefit (cost) amounts excluding the service cost component, and net income attributable to noncontrolling interests.
Identifiable operating assets were as follows:
| July 28 |
| October 29 | July 30 |
| |||||
2024 | 2023 | 2023 |
| |||||||
Production & precision ag |
| $ | $ | $ | ||||||
Small ag & turf | ||||||||||
Construction & forestry |
|
| ||||||||
Financial services |
|
| ||||||||
Corporate |
|
| ||||||||
Total assets |
| $ | $ | $ |
(8)
We monitor the credit quality of financing receivables based on delinquency status, defined as follows:
● | Past due balances represent any payments |
● | Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are |
● | Write-offs generally occur when receivables are |
14
The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows:
July 28, 2024 | |||||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior Years | Revolving Charge Accounts | Total | ||||||||||||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due |
|
|
| ||||||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current | |||||||||||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due |
|
| |||||||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Total retail customer receivables | $ | $ | $ | $ | $ | $ | $ | $ |
October 29, 2023 | |||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Charge Accounts | Total | ||||||||||||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due | |||||||||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current | |||||||||||||||||||||||||
30-59 days past due |
| ||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due |
|
|
| ||||||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Total retail customer receivables | $ | $ | $ | $ | $ | $ | $ | $ |
July 30, 2023 | |||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Charge Accounts | Total | ||||||||||||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due |
|
|
|
|
|
| |||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current | |||||||||||||||||||||||||
30-59 days past due | |||||||||||||||||||||||||
60-89 days past due | |||||||||||||||||||||||||
90+ days past due |
|
|
|
| |||||||||||||||||||||
Non-performing | |||||||||||||||||||||||||
Total retail customer receivables | $ | $ | $ | $ | $ | $ | $ | $ |
15
The credit quality analysis of wholesale receivables by year of origination was as follows:
July 28, 2024 | |||||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving | Total | ||||||||||||||||||
Wholesale receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30+ days past due |
|
|
|
|
|
| |||||||||||||||||||
Non-performing |
|
|
|
|
|
| |||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current |
|
| |||||||||||||||||||||||
30+ days past due |
|
|
|
|
|
| |||||||||||||||||||
Non-performing |
|
|
|
|
|
|
|
| |||||||||||||||||
Total wholesale receivables | $ | $ | $ | $ | $ | $ | $ | $ |
October 29, 2023 | |||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving | Total | ||||||||||||||||||
Wholesale receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30+ days past due |
| ||||||||||||||||||||||||
Non-performing |
| ||||||||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current |
|
| |||||||||||||||||||||||
30+ days past due |
| ||||||||||||||||||||||||
Non-performing |
| ||||||||||||||||||||||||
Total wholesale receivables | $ | $ | $ | $ | $ | $ | $ |
July 30, 2023 | |||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving | Total | ||||||||||||||||||
Wholesale receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | |||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
30+ days past due |
|
|
|
|
|
|
|
| |||||||||||||||||
Non-performing |
|
|
|
|
|
| |||||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Current |
| ||||||||||||||||||||||||
30+ days past due |
|
|
|
|
|
|
|
| |||||||||||||||||
Non-performing |
|
|
|
|
|
|
|
| |||||||||||||||||
Total wholesale receivables | $ | $ | $ | $ | $ | $ | $ | $ |
16
An analysis of the allowance for credit losses and investment in financing receivables follows:
Retail Notes | Revolving | ||||||||||||
& Financing | Charge | Wholesale | |||||||||||
Leases | Accounts | Receivables | Total | ||||||||||
Three Months Ended July 28, 2024 | |||||||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period balance |
| $ |
| $ | $ | $ | |||||||
Provision |
| ||||||||||||
Provision reversal for assets held for sale | ( |
| ( | ||||||||||
Provision subtotal |
| ||||||||||||
Write-offs | ( | ( |
| ( | |||||||||
Recoveries |
| ||||||||||||
Translation adjustments | ( |
|
| ( | |||||||||
End of period balance |
| $ |
| $ | $ | $ | |||||||
Nine Months Ended July 28, 2024 | |||||||||||||
Allowance: |
| ||||||||||||
Beginning of period balance |
| $ |
| $ | $ | $ | |||||||
Provision |
| ||||||||||||
Provision reversal for assets held for sale | ( |
|
| ( | |||||||||
Provision subtotal |
| ||||||||||||
Write-offs | ( | ( |
| ( | |||||||||
Recoveries |
| ||||||||||||
Translation adjustments | ( |
| ( | ( | |||||||||
End of period balance |
| $ |
| $ | $ | $ | |||||||
Financing receivables: | |||||||||||||
End of period balance |
| $ |
| $ | $ | $ |
Retail Notes | Revolving |
| |||||||||||
& Financing | Charge | Wholesale |
| ||||||||||
Leases | Accounts | Receivables | Total | ||||||||||
Three Months Ended July 30, 2023 | |||||||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
| |
Beginning of period balance | $ |
| $ | $ | $ | ||||||||
Provision |
|
|
| ||||||||||
Write-offs |
| ( | ( |
|
| ( | |||||||
Recoveries |
|
|
| ||||||||||
Translation adjustments |
|
|
|
| |||||||||
End of period balance | $ | | $ | | $ | | $ | | |||||
Nine Months Ended July 30, 2023 | |||||||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
| |||
Beginning of period balance | $ |
| $ | $ | $ | ||||||||
Provision |
| | | ||||||||||
Provision reversal for assets held for sale | ( |
|
| ( | |||||||||
Provision (credit) subtotal | ( | | ( | ||||||||||
Write-offs |
| ( | ( |
| ( | ||||||||
Recoveries |
| | |
| |||||||||
Translation adjustments | ( |
| ( |
| ( | ||||||||
End of period balance | $ | $ | $ | $ | |||||||||
Financing receivables: | |||||||||||||
End of period balance | $ | |
| $ | | $ | | $ |
In the third quarter of 2024, we determined that the financial services business in Brazil met the held for sale criteria. The receivables in Brazil were reclassified to “Assets held for sale.” The associated allowance for credit losses was reversed and a valuation allowance for the assets held for sale was recorded (see Note 21). Excluding the business in Brazil, the allowance for credit losses on retail notes and financing lease receivables increased in the third quarter and first nine months of 2024,
17
primarily due to higher expected losses as a result of elevated delinquencies and a decline in market conditions. This increase was partially offset by a decrease in the allowance on revolving charge accounts, driven by write-offs of seasonal financing program accounts and recoveries expected on those accounts in the future.
In the first quarter of 2023, the financial services business in Russia met the held for sale criteria. The allowance for credit losses for the financing receivables in Russia was reversed and a valuation allowance for the assets held for sale was recorded. These operations were sold in the second quarter of 2023 (see Note 20).
Write-offs by year of origination were as follows:
Nine Months Ended July 28, 2024 | |||||||||||||||||||||||||
2024 | 2023 | 2022 | 2021 | 2020 | Prior Years | Revolving Charge Accounts | Total | ||||||||||||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Agriculture and turf | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Construction and forestry | |||||||||||||||||||||||||
Total retail customer receivables | $ | $ | $ | $ | $ | $ | $ | $ |
Modifications
We occasionally grant contractual modifications to customers experiencing financial difficulties. Before offering a modification, we evaluate the ability of the customer to meet the modified payment terms. Modifications offered include payment deferrals, term extensions, or a combination thereof. Finance charges continue to accrue during the deferral or extension period with the exception of modifications related to bankruptcy proceedings. Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers. Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan.
The ending amortized cost of modified loans with borrowers experiencing financial difficulty during the third quarter and the nine months ended July 28, 2024 were $
Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the third quarter or the first nine months of 2024. In addition, at July 28, 2024, commitments to provide additional financing to these customers were not significant.
(9) Securitization of Financing Receivables
Our funding strategy includes receivable securitizations, which allows us to receive cash for financing receivables immediately. While these securitization programs are administered in various forms, they are accomplished in the following basic steps:
1. | We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE). |
2. | The SPE issues debt to investors. The debt is secured by the financing receivables. |
3. | Investors are paid back based on cash receipts from the financing receivables. |
As part of step 1, these receivables are legally isolated from the claims of our general creditors. This ensures cash receipts from the financing receivables are accessible to pay back securitization program investors. The structure of these transactions does not meet the accounting criteria for a sale of receivables. As a result, they are accounted for as a secured borrowing. The receivables and borrowings remain on our balance sheet and are separately reported as “Financing receivables securitized – net” and “Short-term securitization borrowings,” respectively.
The components of securitization programs were as follows:
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 |
| |||||||
Financing receivables securitized (retail notes) |
| $ | $ | $ | ||||||
Allowance for credit losses | ( |
| ( |
| ( | |||||
Other assets (primarily restricted cash) |
|
| ||||||||
Total restricted securitized assets |
| $ | $ | $ | ||||||
Short-term securitization borrowings | $ | $ | $ | |||||||
Accrued interest on borrowings |
| |||||||||
Total liabilities related to restricted securitized assets | $ | $ | $ |
18
(10) Inventories
A majority of inventories owned by us are valued at cost on the “last-in, first-out” (LIFO) basis.
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 |
| |||||||
Raw materials and supplies |
| $ | $ | $ | ||||||
Work-in-process |
|
| ||||||||
Finished goods and parts |
|
| ||||||||
Total FIFO value |
|
| ||||||||
Excess of FIFO over LIFO |
|
| ||||||||
Inventories |
| $ | $ | $ |
(11) Goodwill and Other Intangible Assets – Net
The changes in amounts of goodwill by operating segments were as follows. There were no accumulated goodwill impairment losses.
| Production & |
| Small Ag |
| Construction |
|
|
|
| ||||
Precision Ag | & Turf | & Forestry | Total |
| |||||||||
Goodwill at October 30, 2022 |
| $ | $ | $ | $ | ||||||||
Acquisitions |
|
| |||||||||||
Translation adjustments |
| ||||||||||||
Goodwill at July 30, 2023 | $ | $ | $ | $ | |||||||||
Goodwill at October 29, 2023 | $ | $ | $ | $ | |||||||||
Translation adjustments | ( | ||||||||||||
Goodwill at July 28, 2024 | $ | $ | $ | $ |
The components of other intangible assets were as follows:
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 |
| |||||||
Customer lists and relationships | $ | $ | $ | |||||||
Technology, patents, trademarks, and other |
|
| ||||||||
Total at cost |
|
| ||||||||
Less accumulated amortization: |
|
| ||||||||
Customer lists and relationships | ||||||||||
Technology, patents, trademarks, and other | ||||||||||
Total accumulated amortization | ||||||||||
Other intangible assets – net | $ | $ | $ |
The amortization of other intangible assets in the third quarter and the first nine months of 2024 was $
(12) Short-Term Borrowings
Short-term borrowings were as follows:
July 28 | October 29 | July 30 | ||||||||
| 2024 |
| 2023 |
| 2023 | |||||
Commercial paper | $ | $ | $ | |||||||
Notes payable to banks | ||||||||||
Finance lease obligations due within one year | ||||||||||
Long-term borrowings due within one year |
|
|
| |||||||
Short-term borrowings | $ | $ | $ |
19
(13) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 | ||||||||
Accounts payable: |
|
|
|
|
|
|
|
|
| |
Trade payables | $ |
| $ |
| $ | |||||
Dividends payable |
|
|
| |||||||
Deposits withheld from dealers and merchants | ||||||||||
Payables to unconsolidated affiliates | ||||||||||
Other |
|
|
| |||||||
Accrued expenses: | ||||||||||
Employee benefits |
|
|
| |||||||
Product warranties |
|
|
| |||||||
Accrued taxes | ||||||||||
Derivative liabilities | ||||||||||
Dealer sales discounts |
|
|
| |||||||
Extended warranty premium | ||||||||||
Unearned revenue (contractual liability) |
|
|
| |||||||
Unearned operating lease revenue | ||||||||||
Accrued interest | ||||||||||
Parts return liability | ||||||||||
Other |
|
|
| |||||||
Accounts payable and accrued expenses |
| $ |
| $ | $ |
Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $
(14) Long-Term Borrowings
Long-term borrowings consisted of:
July 28 | October 29 | July 30 | ||||||||
| 2024 |
| 2023 |
| 2023 | |||||
Underwritten term debt |
|
|
| |||||||
U.S. dollar notes and debentures: | ||||||||||
| $ | $ | ||||||||
$ |
|
| ||||||||
|
|
| ||||||||
|
|
| ||||||||
|
|
| ||||||||
|
|
| ||||||||
Euro notes: | ||||||||||
Serial issuances | ||||||||||
Medium-term notes |
| |||||||||
Other notes and finance lease obligations |
|
|
| |||||||
Less debt issuance costs and debt discounts | ( | ( | ( | |||||||
Long-term borrowings |
| $ | $ | $ |
Medium-term notes due through 2034 are primarily offered by prospectus and issued at fixed and variable rates. The principal balances of the medium-term notes were $
20
(15) Leases – Lessor
We lease equipment manufactured or sold by us through John Deere Financial. Sales-type and direct financing leases are reported in “Financing receivables – net.” Operating leases are reported in “Equipment on operating leases – net.”
Lease revenues earned by us follow:
Three Months Ended | Nine Months Ended | ||||||||||||
July 28 | July 30 | July 28 | July 30 | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
Sales-type and direct finance lease revenues | $ | $ | $ | $ | |||||||||
Operating lease revenues | |||||||||||||
Variable lease revenues |
| ||||||||||||
Total lease revenues | $ | $ | $ | $ |
(16) Commitments and Contingencies
A standard warranty is provided as assurance that the equipment will function as intended. The standard warranty period varies by product and region. At the time a sale is recognized, we record an estimate of future warranty costs based on historical claims rate experience and estimated population under warranty.
The reconciliation of the changes in the warranty liability follows:
Three Months Ended | Nine Months Ended |
| |||||||||||
July 28 | July 30 | July 28 | July 30 |
| |||||||||
2024 | 2023 | 2024 | 2023 |
| |||||||||
Beginning of period balance |
| $ |
| $ |
| $ |
| $ | |||||
Warranty claims paid | ( |
| ( | ( |
| ( | |||||||
New product warranty accruals |
|
| |||||||||||
Foreign exchange | ( |
| ( |
| |||||||||
End of period balance | $ | $ | $ | $ |
The costs for extended warranty programs are recognized as incurred.
In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment. At July 28, 2024, the notional value of these guarantees was $
We also had other miscellaneous contingent liabilities and guarantees totaling approximately $
At July 28, 2024, we had commitments of approximately $
We are subject to various unresolved legal actions. The accrued losses on these matters were not material at July 28, 2024. We believe the reasonably possible range of losses for these unresolved legal actions would not have a material effect on our financial statements. The most prevalent legal claims relate to product liability (including asbestos-related liability), retail credit, employment, patent, trademark, and antitrust matters.
(17) FAIR VALUE MEASUREMENTS
The fair values of financial instruments that do not approximate the carrying values were as follows. Long-term borrowings exclude finance lease liabilities.
July 28, 2024 | October 29, 2023 | July 30, 2023 |
| ||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair |
| |||||||||||||
Financing receivables – net | $ | $ | $ | $ | $ | $ | |||||||||||||
Financing receivables securitized – net | |||||||||||||||||||
Short-term securitization borrowings | |||||||||||||||||||
Long-term borrowings due within one year | |||||||||||||||||||
Long-term borrowings |
Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings.
21
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 us for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. In May 2024, we acquired a held-to-maturity marketable security that matures in less than one year. The carrying value of the held-to-maturity marketable security was $
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.
Assets and liabilities measured at fair value on a recurring basis follow, excluding our cash equivalents, which were carried at a cost that approximates fair value and consisted of money market funds and time deposits.
| July 28 |
| October 29 |
| July 30 |
| ||||
2024 | 2023 | 2023 |
| |||||||
Level 1 | ||||||||||
Marketable securities: | ||||||||||
International equity securities |
| $ | $ | |||||||
International mutual funds securities |
|
| ||||||||
U.S. equity fund |
| |||||||||
U.S. fixed income fund |
|
|
| |||||||
U.S. government debt securities | $ |
|
| |||||||
Total Level 1 marketable securities | ||||||||||
Level 2 | ||||||||||
Marketable securities: | ||||||||||
Corporate debt securities |
|
| ||||||||
International debt securities | ||||||||||
Mortgage-backed securities |
|
| ||||||||
Municipal debt securities |
|
| ||||||||
U.S. government debt securities | ||||||||||
Total Level 2 marketable securities |
|
| ||||||||
Other assets – Derivatives |
| |||||||||
Accounts payable and accrued expenses – Derivatives |
| |||||||||
Level 3 | ||||||||||
Accounts payable and accrued expenses – Deferred consideration |
The mortgage-backed securities are primarily issued by U.S. government-sponsored enterprises.
The contractual maturities of available-for-sale debt securities at July 28, 2024 follow:
| Amortized |
| Fair |
| |||
Cost | Value |
| |||||
Due in one year or less |
| $ | $ | ||||
Due after one through five years | |||||||
Due after five through 10 years | |||||||
Due after 10 years | |||||||
Mortgage-backed securities | |||||||
Debt securities |
| $ |
| $ |
Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity.
Fair value, nonrecurring Level 3 measurements from impairments were as follows:
Fair Value | Losses | |||||||||||||||||||||
|
|
|
|
|
|
|
|
| Three Months Ended | Nine Months Ended | ||||||||||||
July 28 | October 29 | July 30 | July 28 | July 30 | July 28 | July 30 | ||||||||||||||||
| 2024 |
| 2023 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||||||
Assets held for sale | $ | | $ | | $ | |
22
The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value:
Marketable securities – The portfolio of investments is 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 valued using the fund’s net asset value, based on the fair value of the underlying securities. International debt securities are valued using quoted prices for identical assets in inactive markets.
Derivatives – Our derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.
Assets held for sale – The impairment was measured at the lower of the carrying amount or fair value less cost to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 21).
(18) Derivative Instruments
Fair values of our derivative instruments and the associated notional amounts were as follows. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”
July 28, 2024 | October 29, 2023 | July 30, 2023 |
| |||||||||||||||||||||||||
Fair Value | Fair Value | Fair Value |
| |||||||||||||||||||||||||
Notional | Assets | Liabilities | Notional | Assets | Liabilities | Notional | Assets | Liabilities |
| |||||||||||||||||||
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts |
| $ | $ | $ |
| $ | $ |
| $ | $ | $ | |||||||||||||||||
| ||||||||||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Interest rate contracts | $ | |||||||||||||||||||||||||||
Cross-currency interest rate contracts | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Not designated as hedging instruments: | ||||||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||||||
Foreign exchange contracts |
|
|
|
| ||||||||||||||||||||||||
Cross-currency interest rate contracts |
|
|
|
|
|
The amounts recorded in the consolidated balance sheets related to borrowings designated in fair value hedging relationships were as follows. Fair value hedging adjustments are included in the carrying amount of the hedged item.
Active Hedging Relationships | Discontinued Hedging Relationships | ||||||||||||
Carrying Amount | Cumulative Fair Value | Carrying Amount of | Cumulative Fair Value | ||||||||||
of Hedged Item | Hedging Amount | Formerly Hedged Item | Hedging Amount | ||||||||||
July 28, 2024 | |||||||||||||
Short-term borrowings | $ | $ | ( | $ | $ | ||||||||
Long-term borrowings | ( | ( | |||||||||||
October 29, 2023 | |||||||||||||
Short-term borrowings | $ | $ | |||||||||||
Long-term borrowings | $ | ( | ( | ||||||||||
July 30, 2023 | |||||||||||||
Short-term borrowings | $ | $ | |||||||||||
Long-term borrowings | $ | $ | ( | ( |
23
The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following:
Three Months Ended | Nine Months Ended |
| |||||||||||
July 28 | July 30 | July 28 | July 30 |
| |||||||||
2024 | 2023 | 2024 | 2023 |
| |||||||||
Fair Value Hedges |
|
|
|
|
|
|
|
|
| ||||
Interest rate contracts – Interest expense* |
| $ | $ | ( |
| $ | $ | ( | |||||
| |||||||||||||
Cash Flow Hedges | |||||||||||||
Recognized in OCI: | |||||||||||||
Interest rate contracts – OCI (pretax) | $ | ( | $ | $ | $ | ||||||||
Reclassified from OCI: | |||||||||||||
Interest rate contracts – Interest expense |
|
| |||||||||||
| |||||||||||||
Not Designated as Hedges | |||||||||||||
Interest rate contracts – Net sales |
| $ |
|
| |||||||||
Interest rate contracts – Interest expense* |
| $ |
| $ | $ | ||||||||
Foreign exchange contracts – Net sales | ( |
| |||||||||||
Foreign exchange contracts – Cost of sales |
| ( | ( | ||||||||||
Foreign exchange contracts – Other operating expenses* |
| ( | ( |
| ( | ||||||||
Total not designated |
| $ | $ | ( |
| $ | ( | $ | ( |
* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.
Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at July 28, 2024, October 29, 2023, and July 30, 2023, was $
Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral follows:
Gross Amounts | Netting |
| |||||||||||
| Recognized |
| Arrangements |
| Collateral |
| Net Amount |
| |||||
July 28, 2024 |
|
|
|
|
|
|
|
|
|
|
|
| |
Assets |
| $ |
| $ | ( |
|
|
| $ | ||||
Liabilities | ( | $ | ( | ||||||||||
| |||||||||||||
October 29, 2023 |
|
|
|
|
| ||||||||
Assets | $ |
| $ | ( |
|
|
| $ | |||||
Liabilities |
| ( | $ | ( | |||||||||
|
| ||||||||||||
July 30, 2023 |
| ||||||||||||
Assets | $ |
| $ | ( |
| $ | ( | $ | |||||
Liabilities |
| ( | ( |
|
(19) Share-Based Awards
We are authorized to grant shares for stock options and restricted stock units. The outstanding shares authorized were
24
During the nine months ended July 28, 2024, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date, in dollars follow:
Grant Date | ||||||
Shares | Fair Value | |||||
Service-based |
|
| $ |
| ||
Performance/service-based | ||||||
Market/service-based |
In December 2023, we granted market/service-based RSUs. The vesting period for the market/service-based RSUs is
(20) Disposition
In March 2023, we sold our financial services business in Russia to Insight Investment Group. The total proceeds, net of restricted cash sold, were $
(21) Special ItemS
2024
Employee-Separation Programs
In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs’ main purpose was to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period.
The programs’ total pretax expenses are estimated to be approximately $
PPA |
| SAT |
| CF |
| FS |
| Total | ||||||||
Employee-Separation Programs: |
| |||||||||||||||
Cost of sales | $ | $ | $ | $ | ||||||||||||
Research and development expenses | ||||||||||||||||
Selling, administrative and general expenses | $ | |||||||||||||||
Total operating profit decrease | $ | $ | $ | $ | ||||||||||||
Non-operating profit expenses* | ||||||||||||||||
Total | $ |
* Relates primarily to corporate expenses.
Banco John Deere S.A.
In the third quarter of 2024, our board of directors authorized the sale of
25
The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows:
July 28 | ||||
2024 | ||||
Cash and cash equivalents | $ | |||
Trade accounts and notes receivable – net | ||||
Financing receivables – net | ||||
Deferred income taxes | ||||
Other miscellaneous assets* | ||||
Valuation allowance | ( | |||
Total assets held for sale | $ | |||
Short-term borrowings | ||||
Accounts payable and accrued expenses | ||||
Long-term borrowings | ||||
Retirement benefits and other liabilities | ||||
Total liabilities held for sale | $ | |||
Total intercompany payables | $ |
* Includes $
In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become
Redeemable Noncontrolling Interest
In the third quarter of 2024, we exercised our right to purchase the remaining
2023
Brazil Tax Ruling
In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed us to record a $
Financial Services Financing Incentives Correction
In the second quarter of 2023, we corrected the
Summary of 2024 and 2023 Special Items
The following table summarizes the operating profit impact of the special items recorded for the three months and nine months ended July 28, 2024 and July 30, 2023.
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
PPA |
| SAT |
| CF |
| FS |
| Total | PPA | SAT |
| CF |
| FS |
| Total | |||||||||||||||
2024 Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Employee-separation programs | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
BJD remeasurement | |||||||||||||||||||||||||||||||
Total 2024 expense | |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||
2023 Expense: | |||||||||||||||||||||||||||||||
Financing incentives correction |
| ||||||||||||||||||||||||||||||
Period over period change | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( |
(22) Subsequent EventS
In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A., to invest and become
On
26
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
All amounts are presented in millions of dollars unless otherwise specified.
Overview
Organization
Deere & Company is a global leader in the production of agricultural, turf, construction, and forestry equipment and solutions. John Deere Financial provides financing for John Deere equipment, parts, services, and other input costs customers need to run their operations. Our operations are managed through the production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.
Smart Industrial Operating Model and Leap Ambitions
We announced the Smart Industrial Operating Model in 2020. This operating model is based on three focus areas:
(a) | Production systems: A strategic alignment of products and solutions around our customers’ operations. |
(b) | Technology stack: Investments in technology, as well as research and development, that deliver intelligent solutions to our customers through digital capabilities, automation, autonomy, and alternative power technologies. |
(c) | Lifecycle solutions: The integration of our aftermarket and support capabilities to more effectively manage customer equipment, service, and technology needs across the full lifetime of a John Deere product. |
Our Leap Ambitions were launched in 2022. These ambitions are designed to boost economic value and sustainability for our customers. The ambitions align across our customers’ production systems seeking to optimize their operations to deliver better outcomes with fewer resources.
Trends and Economic Conditions
Industry Sales Outlook for Fiscal Year 2024
Agriculture and Turf
Construction and Forestry
Company Trends
Customers seek to improve profitability, productivity, and sustainability through technology. Integration of technology into equipment is a persistent market trend. Our Smart Industrial Operating Model and Leap Ambitions are intended to capitalize on this market trend. These technologies are incorporated into products within each of our operating segments. We expect this trend to persist for the foreseeable future. Our progress is demonstrated, in part, by the growing use of the John Deere Operations Center (our digital operations management system) engaging more agricultural acres globally. Engaged acres give us a foundational understanding of customer utilization of John Deere technology. The investments in these technologies and establishing a Solutions as a Service business model may increase our operating costs and decrease operating margins during the transition period.
Company Outlook for 2024
Production volumes are expected to continue to decline during the remainder of 2024 due to reduced demand amid challenges in the global agricultural and turf sectors and construction industry coupled with inventory management through planned underproduction to retail demand.
27
Agriculture and Turf Outlook for 2024
● | We expect large and small agricultural equipment sales to be down from 2023 levels across all our major markets. |
● | Agricultural fundamentals are expected to continue to moderate in 2024 due to rising global grain stocks from excellent growing conditions, lower commodity prices, elevated interest rates, and geopolitical uncertainty. |
● | Demand in the U.S. and Canada continues to be affected by declining farm income margins partially offset by stable farm balance sheets. |
● | The U.S. equipment fleet age is elevated for tractors and in line with historic averages for combines. However, increases in used inventory levels are impacting purchasing decisions. |
● | Sales of compact utility tractors in the U.S. are forecasted to be down due to higher interest rates, partially offset by small and mid-tractor tailwinds from improving dairy and livestock fundamentals. |
● | In Europe, volatile weather conditions continue to drive uncertainty about crop yields and along with elevated input costs are impacting demand in the region, while the dairy and livestock sector remains steady due to stronger pricing and lower feed costs. |
● | Demand in Brazil is expected to be down due to strong global yields driving down commodity prices and persistently high interest rates. |
● | Industry sales in Asia are forecasted to be down moderately due to commodity price changes, inventory reductions, and weather impacts. |
Construction and Forestry Outlook for 2024
● | Construction equipment industry sales are forecasted to be down from 2023 levels. |
● | Benefits from strong U.S. infrastructure spending and increasing manufacturing investment levels are expected to partially offset declines in housing starts, decreases in rental purchases, low levels of commercial real estate construction, and the effect of inventory levels having recovered from historical lows. |
● | Roadbuilding demand remains strong in the U.S., largely offset by continuing softness in Europe. |
Financial Services Outlook for 2024
Net Income | Up moderately | ||||||
+ Higher average portfolio | Favorable | ||||||
+ Prior period special item | Favorable | ||||||
(-) Provision for credit losses | Unfavorable | ||||||
(-) Financing spreads | Unfavorable |
Additional Trends
Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, and government policies. These factors affect farmers’ income and may result in lower demand for equipment. We may experience any of the following effects during unfavorable market conditions: lower net sales, higher sales discounts, higher receivable write-offs, and losses on equipment on operating leases.
In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs’ total pretax expenses are estimated to be approximately $150, of which $124 was recorded in the third quarter of 2024. Annual pretax savings from these programs are estimated to be approximately $230, with $100 estimated to be realized in 2024 (See Note 21).
Interest Rates. Central bank policy interest rates increased in 2023 and have remained elevated. Increased rates impacted us in several ways, primarily affecting the demand for our products and financing spreads for the financial services operations.
The markets for our agriculture, turf, and construction products were negatively impacted by elevated interest rates and their effect on borrowing costs for our customers.
Most retail customer receivables are fixed rate. Wholesale financing receivables generally are variable rate. Both types of receivables are financed with fixed and floating rate borrowings. We manage our exposure to interest rate fluctuations by matching our receivables with our funding sources. We also enter into interest rate swap agreements to match our interest rate exposure.
Rising interest rates have historically impacted our borrowings sooner than the benefit is realized from receivable and lease portfolios. As a result, our financial services operations experienced $66 (after-tax) less favorable financing spreads in 2024 compared to 2023. We expect to continue experiencing spread compression in 2024.
Higher interest rates are driven by factors outside of our control, and as a result we cannot reasonably foresee when this condition will subside.
28
Other Items of Concern and Uncertainties
Other items that could impact our results are:
● | global and regional political conditions, including the ongoing war between Russia and Ukraine and the conflict in the Middle East, |
● | economic, tax, and trade policies, |
● | new or retaliatory tariffs, |
● | capital market disruptions, |
● | foreign currency and capital control policies, |
● | regulations and legislation regarding right to repair or right to modify, |
● | weather conditions, |
● | marketplace adoption, and monetization of technologies we have invested in, |
● | our ability to strengthen our digital capabilities, automation, autonomy, and alternative power technologies, |
● | workforce reductions impact on employee retention, morale, and institutional knowledge, |
● | changes in demand and pricing for new and used equipment, |
● | delays or disruptions in our supply chain, |
● | significant fluctuations in foreign currency exchange rates, |
● | volatility in the prices of many commodities, and |
● | slower economic growth or recession. |
Consolidated Results – 2024 Compared with 2023
Three Months Ended | Nine Months Ended | ||||||||||||||||
Deere & Company | July 28 | July 30 | % | July 28 | July 30 | % | |||||||||||
(In millions of dollars, except per share amounts) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Net sales and revenues | $ | 13,152 | $ | 15,801 | -17 | $ | 40,572 | $ | 45,839 | -11 | |||||||
Net income attributable to Deere & Company | 1,734 | 2,978 | -42 | 5,855 | 7,797 | -25 | |||||||||||
Diluted earnings per share | 6.29 | 10.20 | 21.04 | 26.35 |
Net sales and revenues decreased for both the quarter and year-to-date periods primarily due to lower sales volumes. Net income and diluted EPS decreased driven by lower sales. The discussion of net sales and operating profit is included in the Business Segment Results below. Net income in each of the periods presented were impacted by special items. See Note 21 for additional details.
An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:
Three Months Ended | Nine Months Ended | ||||||||||||||||
July 28 | July 30 | % | July 28 | July 30 | % | ||||||||||||
Deere & Company | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Cost of sales to net sales | 68.9% | 67.4% | 68.2% | 67.7% | |||||||||||||
Increased for both periods mostly due to higher overhead costs from reduced volumes resulting in production inefficiencies, partially offset by sales price realization, lower material cost, and reduced inbound freight costs. | |||||||||||||||||
Other income | $ | 304 | $ | 264 | +15 | $ | 881 | $ | 748 | +18 | |||||||
Higher for the first nine months primarily due to investment income earned on international mutual funds securities. | |||||||||||||||||
Research and development expenses | 567 | 528 | +7 | 1,664 | 1,571 | +6 | |||||||||||
Higher for both periods due to continued focus on developing and incorporating technology solutions. | |||||||||||||||||
Selling, administrative and general expenses | 1,278 | 1,110 | +15 | 3,608 | 3,392 | +6 | |||||||||||
Increased mostly due to a higher provision for credit losses, higher employee pay driven by inflationary conditions and profit sharing incentives, and employee-separation programs’ expenses. | |||||||||||||||||
Interest expense | 840 | 623 | +35 | 2,478 | 1,671 | +48 | |||||||||||
Increased for both periods primarily due to higher average borrowing rates and higher average borrowings. | |||||||||||||||||
Other operating expenses | 264 | 310 | -15 | 930 | 971 | -4 | |||||||||||
Lower in both periods due to higher pension benefits (see Note 6) and lower foreign exchange losses. | |||||||||||||||||
Provision for income taxes | 625 | 636 | -2 | 1,845 | 2,164 | -15 | |||||||||||
Decreased for both periods as a result of lower pretax income, partially offset by the prior periods’ favorable income tax ruling in Brazil. | |||||||||||||||||
29
Business Segment Results – 2024 Compared with 2023
Three Months Ended | Nine Months Ended | ||||||||||||||||
July 28 | July 30 | % | July 28 | July 30 | % | ||||||||||||
Production and Precision Agriculture | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Net sales | $ | 5,099 | $ | 6,806 | -25 | $ | 16,529 | $ | 19,826 | -17 | |||||||
Operating profit | 1,162 | 1,782 | -35 | 3,857 | 5,160 | -25 | |||||||||||
Operating margin | 22.8% | 26.2% | 23.3% | 26.0% | |||||||||||||
Price realization | +3 | +3 | |||||||||||||||
Currency translation impact on Net sales | -1 |
Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in the U.S., Europe, Brazil, and Asia) driven mainly by lower commodity prices and higher interest rates, partially offset by price realization in the U.S. and Canada. Operating profit decreased primarily due to lower shipment volumes and employee-separation programs’ expenses, partially offset by price realization and lower warranty expenses.
Production & Precision Agriculture Operating Profit
Third Quarter 2024 Compared to Third Quarter 2023
Sales for the first nine months decreased as a result of lower shipment volumes (primarily in Brazil, the U.S., and Europe) partially offset by price realization in the U.S. and Canada. Operating profit for the first nine months decreased due to lower sales volume, higher selling, administrative, and general expenses and research and development expenses, partially offset by price realization and lower warranty expenses.
Production & Precision Agriculture Operating Profit
First Nine Months 2024 Compared to First Nine Months 2023
30
Three Months Ended | Nine Months Ended | ||||||||||||||||
July 28 | July 30 | % | July 28 | July 30 | % | ||||||||||||
Small Agriculture and Turf | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Net sales | $ | 3,053 | $ | 3,739 | -18 | $ | 8,663 | $ | 10,886 | -20 | |||||||
Operating profit | 496 | 732 | -32 | 1,393 | 2,028 | -31 | |||||||||||
Operating margin | 16.2% | 19.6% | 16.1% | 18.6% | |||||||||||||
Price realization | +2 | +2 | |||||||||||||||
Currency translation impact on Net sales |
Small agriculture and turf sales decreased for the quarter due to lower shipment volumes (primarily in Europe, the U.S., and Mexico) driven mainly by uncertainty in commodity prices and higher interest rates, partially offset by price realization in the U.S. and Europe. Operating profit decreased due to lower shipment volumes and higher warranty expenses, partially offset by price realization.
Small Agriculture & Turf Operating Profit
Third Quarter 2024 Compared to Third Quarter 2023
Sales for the first nine months decreased as a result of lower shipment volumes (primarily in the U.S., Europe, and Mexico), partially offset by price realization. Operating profit for the first nine months decreased primarily as a result of lower sales volumes and higher warranty expenses. These items were partially offset by price realization and lower production costs.
Small Agriculture & Turf Operating Profit
First Nine Months 2024 Compared to First Nine Months 2023
31
Three Months Ended | Nine Months Ended | ||||||||||||||||
July 28 | July 30 | % | July 28 | July 30 | % | ||||||||||||
Construction and Forestry | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Net sales | $ | 3,235 | $ | 3,739 | -13 | $ | 10,292 | $ | 11,053 | -7 | |||||||
Operating profit | 448 | 716 | -37 | 1,682 | 2,179 | -23 | |||||||||||
Operating margin | 13.8% | 19.1% | 16.3% | 19.7% | |||||||||||||
Price realization | -1 | +1 | |||||||||||||||
Currency translation impact on Net sales | -1 |
Construction and forestry sales decreased for the quarter due to lower U.S. shipment volumes, driven by moderating demand and efforts to reduce field inventory. Operating profit decreased due to lower sales volumes, unfavorable mix, and unfavorable price realization.
Construction & Forestry Operating Profit
Third Quarter 2024 Compared to Third Quarter 2023
Sales for the first nine months decreased due to lower worldwide shipment volumes, partially offset by price realization. Operating profit for the first nine months decreased due to lower sales volumes, increased production costs driven by low volume inefficiencies, and higher selling, administrative, and general expenses and research and development expenses. These factors were partially offset by price realization.
Construction & Forestry Operating Profit
First Nine Months 2024 Compared to First Nine Months 2023
32
Three Months Ended | Nine Months Ended | ||||||||||||||||
July 28 | July 30 | % | July 28 | July 30 | % | ||||||||||||
Financial Services | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
Revenue (including intercompany) | $ | 1,667 | $ | 1,445 | +15 | $ | 4,807 | $ | 3,987 | +21 | |||||||
Interest expense | 812 | 622 | +31 | 2,354 | 1,604 | +47 | |||||||||||
Net income | 153 | 216 | -29 | 523 | 429 | +22 |
The average balance of receivables and leases financed was 12 percent higher in the third quarter of 2024 and 16 percent higher in the first nine months of 2024 compared with the same periods last year. Revenue also increased due to higher average financing rates in both periods. Interest expense increased compared to both prior periods as a result of higher average borrowing rates and higher average borrowings. Financial services net income decreased in the third quarter of 2024 due to a higher provision for credit losses and less favorable financing spreads, partially offset by income earned on higher average portfolio balances and favorable discrete tax items. Excluding the impact of an accounting correction in the prior year, financial services net income decreased in the first nine months of 2024 due to a higher provision for credit losses and less favorable financing spreads, partially offset by income earned on higher average portfolio balances. Net income for the first nine months of 2023 was affected by a correction of the accounting treatment for financing incentives offered to John Deere dealers. The cumulative effect of this correction, $173 pretax ($135 after-tax), was recorded in the second quarter of 2023.
Critical Accounting Estimates
See our critical accounting estimates discussed in the Management’s Discussion and Analysis of the most recently filed Annual Report on Form 10-K. There have been no material changes to these policies.
Capital Resources and Liquidity – 2024 Compared with 2023
We have access to global markets at a reasonable cost. Sources of liquidity include:
● | cash, cash equivalents, and marketable securities on hand, |
● | funds from operations, |
● | the issuance of commercial paper and term debt, |
● | the securitization of retail notes, and |
● | bank lines of credit. |
We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We are forecasting lower operating cash flows from equipment operations in 2024 compared with 2023 driven by a decrease in net income adjusted for non-cash provisions and a reduction in accounts payable and accrued expenses.
We operate in multiple industries, which have unique funding requirements. The equipment operations are capital intensive. Historically, these operations have been subject to seasonal variations in financing requirements for inventories and receivables from dealers.
The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Banco John Deere S.A. assets and liabilities were reclassified to held for sale in the third quarter of 2024 (see Note 21).
Key metrics are provided in the following table:
July 28 | October 29 | July 30 | ||||||||
2024 | 2023 | 2023 | ||||||||
Cash, cash equivalents, and marketable securities | $ | 8,144 | $ | 8,404 | $ | 7,417 | ||||
Trade accounts and notes receivable – net | 7,469 | 7,739 | 9,297 | |||||||
Ratio to prior 12 month’s net sales | 15% | 14% | 17% | |||||||
Inventories | 7,696 | 8,160 | 9,350 | |||||||
Ratio to prior 12 month’s cost of sales | 23% | 22% | 24% | |||||||
Unused credit lines | 4,917 | 841 | 950 | |||||||
Financial Services: | ||||||||||
Ratio of interest-bearing debt to stockholder’s equity | 8.5 to 1 | 8.4 to 1 | 8.1 to 1 |
33
In 2024, we invested $177 in U.S. dollar denominated bonds issued by the central bank of Argentina. The bonds are recorded in “Marketable securities,” classified as “International debt securities.” These bonds can be held until maturity or sold in a secondary market outside of Argentina to settle intercompany debt.
The increase in unused credit lines in 2024 compared to both prior periods relates to a decrease in commercial paper outstanding.
There have been no material changes to the contractual obligations and other cash requirements identified in our most recently filed Annual Report on Form 10-K.
Cash Flows
Nine Months Ended | |||||||
July 28, 2024 | July 30, 2023 | ||||||
Net cash provided by operating activities | $ | 4,139 | $ | 2,896 | |||
Net cash used for investing activities | (3,671) | (4,563) | |||||
Net cash provided by (used for) financing activities | (789) | 3,379 | |||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (6) | 125 | |||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | $ | (327) | $ | 1,837 |
Cash inflows from consolidated operating activities in the first nine months of 2024 were $4,139. This resulted mainly from net income adjusted for non-cash provisions, partially offset by a working capital change. Included in the working capital change was a cash outflow of $1,015 from accounts payable and accrued expenses due to less trade payables consistent with our forecasted decrease in production and lower accrued expenses related to dealer sales discounts and employee benefits. Cash outflows from investing activities were $3,671 in the first nine months of this year. The primary drivers were growth in the retail customer receivable portfolio and equipment on operating leases and purchases of property and equipment. Cash outflows from financing activities were $789 in the first nine months of 2024, as cash returned to shareholders was partially offset by higher external borrowings. Cash returned to shareholders was $4,429 in the first nine months of 2024. Cash, cash equivalents, and restricted cash decreased $327 during the first nine months of 2024.
Key Metrics and Balance Sheet Changes
Trade Accounts and Notes Receivable. Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables decreased $270 during the first nine months of 2024 and decreased $1,828 compared to a year ago, primarily due to lower sales volumes. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 3 percent at July 28, 2024, 1 percent at October 29, 2023, and 1 percent at July 30, 2023.
Financing Receivables and Equipment on Operating Leases. Financing receivables and equipment on operating leases consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases increased $1,363 during the first nine months of 2024 and increased $4,276 in the past 12 months due to higher dealer inventory levels and an increase in the retail customer receivable portfolio, partially offset by the reclassification of Banco John Deere S.A. receivables to “Assets held for sale” in the third quarter of 2024 (see Note 21). Total acquisition volumes of financing receivables and equipment on operating leases were 8 percent higher in the first nine months of 2024, compared with the same period last year, as volumes of wholesale notes, operating leases, financing leases, and retail notes were higher, while revolving charge accounts were flat compared to July 30, 2023.
Inventories. Inventories decreased by $464 during the first nine months of 2024 and decreased by $1,654 compared to a year ago. The decreases were due to lower forecasted shipment volumes. A majority of these inventories are valued on the last-in, first out (LIFO) method.
Property and Equipment. Property and equipment cash expenditures in the first nine months of 2024 were $1,043 compared with $887 in the same period last year. Capital expenditures in 2024 are estimated to be approximately $1,850.
Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased by $1,733 in the first nine months of 2024, primarily due to decreased accounts payable associated with trade payables, and a decrease in accrued expenses associated with derivative liabilities, dealer sales discounts, and employee benefits. Accounts payable and accrued expenses decreased $943 compared to a year ago due to a decrease in accounts payable associated with trade payables and a decrease in accrued expenses associated with derivative liabilities, partially offset by an increase in extended warranty liabilities.
34
Borrowings. Total external borrowings increased by $2,444 in the first nine months of 2024 and increased $3,992 compared to a year ago, generally corresponding with the level of the receivable and lease portfolios, as well as other working capital requirements. The change in borrowings was also impacted by the reclassification of Banco John Deere S.A. borrowings to “Liabilities held for sale” in the third quarter of 2024 (see Note 21).
John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 9). The facility was renewed in November 2023 with an expiration in November 2024 and with an increase in the total capacity or “financing limit” from $1,500 to $2,000. At July 28, 2024, $1,566 of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected.
In the first nine months of 2024, the financial services operations issued $3,722 and retired $2,849 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).”
Lines of Credit. We have access to bank lines of credit with various banks throughout the world.
Worldwide lines of credit totaled $10,930 at July 28, 2024, consisting primarily of:
● | a 364-day credit facility agreement of $5,000 expiring in the second quarter of 2025, |
● | a credit facility agreement of $2,750 expiring in the second quarter of 2028, and |
● | a credit facility agreement of $2,750 expiring in the second quarter of 2029. |
At July 28, 2024, $4,917 of these worldwide lines of credit were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings were considered to constitute utilization. These credit agreements require Capital Corporation and other parts of our business to maintain certain performance metrics and liquidity targets. All requirements in the credit agreements have been met during the periods included in the financial statements.
Debt Ratings. To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt 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 our securities. A credit rating agency may change or withdraw ratings based on its assessment of our 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 securities by the rating agencies engaged by us are as follows:
| Senior |
|
|
| |||
Long-Term | Short-Term | Outlook |
| ||||
Fitch Ratings | A+ | F1 | Stable | ||||
Moody’s Investors Service, Inc. |
| A1 |
| Prime-1 |
| Stable | |
Standard & Poor’s |
| A |
| A-1 |
| Stable |
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in the section entitled “Overview” relating to future events, expectations, and trends constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of our operations generally while others could more heavily affect a particular line of business.
Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, we expressly disclaim any obligation to update or revise our forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:
● | changes in and compliance with U.S., foreign and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emissions), and farming policies; |
● | political, economic, and social instability of the geographies in which we operate, including the ongoing war between Russia and Ukraine and the conflict in the Middle East; |
● | adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints; |
● | worldwide demand for food and different forms of renewable energy; |
35
● | the ability to execute business strategies, including our Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions; |
● | the ability to understand and meet customers’ changing expectations and demand for John Deere products and solutions; |
● | accurately forecasting customer demand for products and services and adequately managing inventory; |
● | the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers; |
● | changes to governmental communications channels (radio frequency technology); |
● | the ability to adapt in highly competitive markets; |
● | dealer practices and their ability to manage inventory and distribution of John Deere products and to provide support and service precision technology solutions; |
● | changes in climate patterns, unfavorable weather events, and natural disasters; |
● | governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy; |
● | higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions; |
● | availability and price of raw materials, components, and whole goods; |
● | delays or disruptions in our supply chain; |
● | our equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations; |
● | the ability to attract, develop, engage, and retain qualified employees; |
● | the impact of workforce reductions on employee retention, morale, and institutional knowledge; |
● | security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products; |
● | loss of or challenges to intellectual property rights; |
● | legislation introduced or enacted that could affect our business model and intellectual property, such as right to repair or right to modify legislation; |
● | investigations, claims, lawsuits, or other legal proceedings; |
● | events that damage our reputation or brand; |
● | the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, available farm acres, acreage planted, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and |
● | housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment. |
Further information concerning us and our businesses, including factors that could materially affect our financial results, is included in our other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q). There also may be other factors that we cannot anticipate or that are not described herein because we do not currently perceive them to be material.
SUPPLEMENTAL CONSOLIDATING DATA
The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. Equipment operations represents the enterprise without financial services. Equipment operations includes production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements.
Equipment operations and financial services participate in different industries. Equipment operations primarily generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial services finances sales and leases by dealers of new and used equipment that is largely manufactured by equipment operations. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences.
36
DEERE & COMPANY | ||||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA | ||||||||||||||||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||||||||||||
For the Three Months Ended July 28, 2024 and July 30, 2023 | ||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||
EQUIPMENT | FINANCIAL | |||||||||||||||||||||||||
OPERATIONS | SERVICES | ELIMINATIONS | CONSOLIDATED |
| ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| ||||||||||||||||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net sales | $ | 11,387 | $ | 14,284 | $ | 11,387 | $ | 14,284 | ||||||||||||||||||
Finance and interest income | 155 |
| 210 | $ | 1,537 | $ | 1,335 | $ | (231) | $ | (292) | 1,461 | 1,253 | 1 | ||||||||||||
Other income | 246 |
| 222 | 130 |
| 110 | (72) |
| (68) | 304 |
| 264 | 2, 3 | |||||||||||||
Total | 11,788 |
| 14,716 | 1,667 |
| 1,445 | (303) |
| (360) | 13,152 |
| 15,801 | ||||||||||||||
Costs and Expenses | ||||||||||||||||||||||||||
Cost of sales | 7,855 |
| 9,630 | (7) |
| (6) | 7,848 | 9,624 | 4 | |||||||||||||||||
Research and development expenses | 567 |
| 528 | 567 | 528 | |||||||||||||||||||||
Selling, administrative and general expenses | 962 |
| 913 | 318 |
| 199 | (2) |
| (2) | 1,278 |
| 1,110 | 4 | |||||||||||||
Interest expense | 91 |
| 94 | 812 |
| 622 | (63) |
| (93) | 840 |
| 623 | 1 | |||||||||||||
Interest compensation to Financial Services | 168 |
| 199 | (168) |
| (199) |
|
| 1 | |||||||||||||||||
Other operating expenses | (16) |
| 34 | 343 |
| 336 | (63) |
| (60) | 264 |
| 310 | 3, 5 | |||||||||||||
Total | 9,627 |
| 11,398 | 1,473 |
| 1,157 | (303) |
| (360) | 10,797 |
| 12,195 | ||||||||||||||
Income before Income Taxes | 2,161 |
| 3,318 | 194 |
| 288 |
|
|
| 2,355 |
| 3,606 | ||||||||||||||
Provision for income taxes | 583 |
| 564 | 42 |
| 72 |
|
|
| 625 |
| 636 | ||||||||||||||
Income after Income Taxes | 1,578 |
| 2,754 | 152 |
| 216 |
|
|
| 1,730 |
| 2,970 | ||||||||||||||
Equity in income of unconsolidated affiliates |
|
| 2 | 1 |
|
| 1 | 2 | ||||||||||||||||||
Net Income | 1,578 |
| 2,756 | 153 |
| 216 |
|
|
| 1,731 |
| 2,972 | ||||||||||||||
Less: Net loss attributable to noncontrolling interests | (3) |
| (6) |
|
|
|
| (3) | (6) | |||||||||||||||||
Net Income Attributable to Deere & Company | $ | 1,581 | $ | 2,762 | $ | 153 | $ | 216 |
|
| $ | 1,734 | $ | 2,978 | ||||||||||||
1 Elimination of intercompany interest income and expense.
2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.
3 Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.
4 Elimination of intercompany service fees.
5 Elimination of financial services’ lease depreciation expense related to inventory transferred to equipment on operating leases.
37
DEERE & COMPANY | ||||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) | ||||||||||||||||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||||||||||||
For the Nine Months Ended July 28, 2024 and July 30, 2023 | ||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||
EQUIPMENT | FINANCIAL | |||||||||||||||||||||||||
OPERATIONS | SERVICES | ELIMINATIONS | CONSOLIDATED |
| ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| ||||||||||||||||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net sales | $ | 35,484 | $ | 41,765 | $ | 35,484 | $ | 41,765 | ||||||||||||||||||
Finance and interest income | 441 |
| 444 | $ | 4,466 | $ | 3,609 | $ | (700) | $ | (727) | 4,207 | 3,326 | 1 | ||||||||||||
Other income | 732 |
| 639 | 341 |
| 378 | (192) |
| (269) | 881 |
| 748 | 2, 3 | |||||||||||||
Total | 36,657 |
| 42,848 | 4,807 |
| 3,987 | (892) |
| (996) | 40,572 |
| 45,839 | ||||||||||||||
Costs and Expenses | ||||||||||||||||||||||||||
Cost of sales | 24,226 |
| 28,306 | (21) |
| (18) | 24,205 | 28,288 | 4 | |||||||||||||||||
Research and development expenses | 1,664 |
| 1,571 | 1,664 | 1,571 | |||||||||||||||||||||
Selling, administrative and general expenses | 2,844 |
| 2,630 | 771 |
| 769 | (7) |
| (7) | 3,608 |
| 3,392 | 4 | |||||||||||||
Interest expense | 314 |
| 298 | 2,354 |
| 1,604 | (190) |
| (231) | 2,478 |
| 1,671 | 1 | |||||||||||||
Interest compensation to Financial Services | 510 |
| 496 | (510) |
| (496) |
|
| 1 | |||||||||||||||||
Other operating expenses | 76 |
| 172 | 1,018 |
| 1,043 | (164) |
| (244) | 930 |
| 971 | 3, 5 | |||||||||||||
Total | 29,634 |
| 33,473 | 4,143 |
| 3,416 | (892) |
| (996) | 32,885 |
| 35,893 | ||||||||||||||
Income before Income Taxes | 7,023 |
| 9,375 | 664 |
| 571 |
|
|
| 7,687 |
| 9,946 | ||||||||||||||
Provision for income taxes | 1,700 |
| 2,020 | 145 |
| 144 |
|
|
| 1,845 |
| 2,164 | ||||||||||||||
Income after Income Taxes | 5,323 |
| 7,355 | 519 |
| 427 |
|
|
| 5,842 |
| 7,782 | ||||||||||||||
Equity in income of unconsolidated affiliates |
|
| 3 | 4 |
| 2 | 4 | 5 | ||||||||||||||||||
Net Income | 5,323 |
| 7,358 | 523 |
| 429 |
|
|
| 5,846 |
| 7,787 | ||||||||||||||
Less: Net loss attributable to noncontrolling interests | (9) |
| (10) |
|
|
| (9) | (10) | ||||||||||||||||||
Net Income Attributable to Deere & Company | $ | 5,332 | $ | 7,368 | $ | 523 | $ | 429 |
|
| $ | 5,855 | $ | 7,797 | ||||||||||||
1 Elimination of intercompany interest income and expense.
2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.
3 Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.
4 Elimination of intercompany service fees.
5 Elimination of financial services’ lease depreciation expense related to inventory transferred to equipment on operating leases.
38
DEERE & COMPANY | ||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) | ||||||||||||||||||||||||||||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||
EQUIPMENT | FINANCIAL | |||||||||||||||||||||||||||||||||||||
OPERATIONS | SERVICES | ELIMINATIONS | CONSOLIDATED | |||||||||||||||||||||||||||||||||||
Jul 28 | Oct 29 | Jul 30 | Jul 28 | Oct 29 | Jul 30 | Jul 28 | Oct 29 | Jul 30 | Jul 28 | Oct 29 | Jul 30 | |||||||||||||||||||||||||||
2024 | 2023 | 2023 | 2024 | 2023 | 2023 | 2024 | 2023 | 2023 | 2024 | 2023 | 2023 | |||||||||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash and cash equivalents | $ | 5,385 | $ | 5,720 | $ | 4,858 | $ | 1,619 | $ | 1,738 | $ | 1,718 |
|
|
| $ | 7,004 | $ | 7,458 | $ | 6,576 | |||||||||||||||||
Marketable securities | 155 |
| 104 |
| 3 | 985 |
| 842 |
| 838 |
|
|
|
|
| 1,140 |
| 946 |
| 841 | ||||||||||||||||||
Receivables from Financial Services | 3,951 |
| 4,516 |
| 5,312 | $ | (3,951) | $ | (4,516) | $ | (5,312) |
|
|
| 6 | |||||||||||||||||||||||
Trade accounts and notes receivable – net | 1,150 |
| 1,320 |
| 1,589 | 8,890 |
| 8,687 |
| 9,991 | (2,571) |
| (2,268) |
| (2,283) | 7,469 |
| 7,739 |
| 9,297 | 7 | |||||||||||||||||
Financing receivables – net | 82 |
| 64 |
| 60 | 43,814 |
| 43,609 |
| 41,242 |
|
|
|
|
| 43,896 |
| 43,673 |
| 41,302 | ||||||||||||||||||
Financing receivables securitized – net | 2 |
|
| 8,272 |
| 7,335 |
| 7,001 |
|
|
|
|
| 8,274 |
| 7,335 |
| 7,001 | ||||||||||||||||||||
Other receivables | 1,821 |
| 1,813 |
| 2,599 | 494 |
| 869 |
| 599 | (45) |
| (59) |
| (80) | 2,270 |
| 2,623 |
| 3,118 | 7 | |||||||||||||||||
Equipment on operating leases – net | 7,118 |
| 6,917 |
| 6,709 |
|
|
|
|
| 7,118 |
| 6,917 |
| 6,709 | |||||||||||||||||||||||
Inventories | 7,696 |
| 8,160 |
| 9,350 |
|
|
| 7,696 | 8,160 | 9,350 | |||||||||||||||||||||||||||
Property and equipment – net | 7,058 |
| 6,843 |
| 6,385 | 34 |
| 36 |
| 33 |
|
|
|
|
| 7,092 |
| 6,879 |
| 6,418 | ||||||||||||||||||
Goodwill | 3,960 |
| 3,900 |
| 3,994 |
|
|
| 3,960 | 3,900 | 3,994 | |||||||||||||||||||||||||||
Other intangible assets – net | 1,030 |
| 1,133 |
| 1,199 |
|
|
|
|
|
|
| 1,030 |
| 1,133 |
| 1,199 | |||||||||||||||||||||
Retirement benefits | 3,047 |
| 2,936 |
| 3,503 | 80 |
| 72 |
| 71 | (1) |
| (1) |
| (1) | 3,126 |
| 3,007 |
| 3,573 | 8 | |||||||||||||||||
Deferred income taxes | 2,192 |
| 2,133 |
| 1,393 | 35 |
| 68 |
| 65 | (329) |
| (387) |
| (98) | 1,898 |
| 1,814 |
| 1,360 | 9 | |||||||||||||||||
Other assets | 2,236 |
| 1,948 |
| 2,083 | 675 |
| 559 |
| 583 | (8) |
| (4) |
| (7) | 2,903 |
| 2,503 |
| 2,659 | ||||||||||||||||||
Assets held for sale |
|
|
|
| 2,965 |
|
|
|
|
| 2,965 |
|
| |||||||||||||||||||||||||
Total Assets | $ | 39,765 | $ | 40,590 | $ | 42,328 | $ | 74,981 | $ | 70,732 | $ | 68,850 | $ | (6,905) | $ | (7,235) | $ | (7,781) | $ | 107,841 | $ | 104,087 | $ | 103,397 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Short-term borrowings | $ | 983 | $ | 1,230 | $ | 1,773 | $ | 14,311 | $ | 16,709 | $ | 15,370 |
|
|
| $ | 15,294 | $ | 17,939 | $ | 17,143 | |||||||||||||||||
Short-term securitization borrowings | 1 |
|
| 7,868 |
| 6,995 |
| 6,608 |
|
|
|
|
| 7,869 |
| 6,995 |
| 6,608 | ||||||||||||||||||||
Payables to Equipment Operations |
|
|
|
|
| 3,951 |
| 4,516 |
| 5,312 | $ | (3,951) | $ | (4,516) | $ | (5,312) |
|
|
|
|
| 6 | ||||||||||||||||
Accounts payable and accrued expenses | 13,880 |
| 14,862 |
| 14,403 | 3,141 |
| 3,599 |
| 3,307 | (2,624) |
| (2,331) |
| (2,370) | 14,397 |
| 16,130 |
| 15,340 | 7 | |||||||||||||||||
Deferred income taxes | 420 |
| 452 |
| 420 | 390 |
| 455 |
| 184 | (329) |
| (387) |
| (98) | 481 |
| 520 |
| 506 | 9 | |||||||||||||||||
Long-term borrowings | 6,592 |
| 7,210 |
| 7,299 | 36,100 |
| 31,267 |
| 30,813 |
|
|
|
|
| 42,692 |
| 38,477 |
| 38,112 | ||||||||||||||||||
Retirement benefits and other liabilities | 2,048 |
| 2,032 |
| 2,423 | 109 |
| 109 |
| 114 | (1) |
| (1) |
| (1) | 2,156 |
| 2,140 |
| 2,536 | 8 | |||||||||||||||||
Liabilities held for sale |
|
|
|
| 1,803 |
|
|
|
|
| 1,803 |
|
| |||||||||||||||||||||||||
Total liabilities | 23,924 | 25,786 | 26,318 | 67,673 | 63,650 | 61,708 | (6,905) | (7,235) | (7,781) | 84,692 | 82,201 | 80,245 | ||||||||||||||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interest | 84 | 97 | 101 |
|
|
|
|
|
| 84 | 97 | 101 | ||||||||||||||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Total Deere & Company stockholders’ equity | 23,062 |
| 21,785 |
| 23,048 | 7,308 | 7,082 | 7,142 | (7,308) | (7,082) | (7,142) | 23,062 | 21,785 | 23,048 | 10 | |||||||||||||||||||||||
Noncontrolling interests | 3 |
| 4 |
| 3 |
|
|
|
|
|
| 3 | 4 | 3 | ||||||||||||||||||||||||
Financial Services’ equity | (7,308) |
| (7,082) |
| (7,142) |
|
|
| 7,308 | 7,082 | 7,142 |
|
|
| 10 | |||||||||||||||||||||||
Adjusted total stockholders’ equity | 15,757 |
| 14,707 |
| 15,909 | 7,308 |
| 7,082 |
| 7,142 |
|
|
|
|
| 23,065 |
| 21,789 |
| 23,051 | ||||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 39,765 | $ | 40,590 | $ | 42,328 | $ | 74,981 | $ | 70,732 | $ | 68,850 | $ | (6,905) | $ | (7,235) | $ | (7,781) | $ | 107,841 | $ | 104,087 | $ | 103,397 | ||||||||||||||
6 Elimination of receivables / payables between equipment operations and financial services.
7 Primarily reclassification of sales incentive accruals on receivables sold to financial services.
8 Reclassification of net pension assets / liabilities.
9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
10 Elimination of financial services’ equity.
39
DEERE & COMPANY | ||||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) | ||||||||||||||||||||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||||
For the Nine Months Ended July 28, 2024 and July 30, 2023 | ||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||
EQUIPMENT | FINANCIAL | |||||||||||||||||||||||||
OPERATIONS | SERVICES | ELIMINATIONS | CONSOLIDATED | |||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 5,323 | $ | 7,358 | $ | 523 | $ | 429 |
|
| $ | 5,846 | $ | 7,787 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||||
Provision (credit) for credit losses |
| 10 |
| 3 |
| 212 |
| (67) |
|
|
|
|
| 222 |
| (64) | ||||||||||
Provision for depreciation and amortization |
| 932 |
| 872 |
| 773 |
| 757 | $ | (107) | $ | (102) |
| 1,598 |
| 1,527 | 11 | |||||||||
Impairments and other adjustments |
|
|
|
| 53 |
| 173 |
|
|
|
|
| 53 |
| 173 | |||||||||||
Share-based compensation expense |
|
|
|
| 159 | 112 | 159 | 112 | 12 | |||||||||||||||||
Distributed earnings of Financial Services |
| 250 |
| 31 |
|
|
|
|
| (250) |
| (31) |
|
|
|
| 13 | |||||||||
Credit for deferred income taxes |
| (49) |
| (322) |
| (76) |
| (107) |
|
|
|
|
| (125) |
| (429) | ||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||||||||
Receivables related to sales |
| 106 |
| (293) |
|
| (2,552) | (4,766) | (2,446) | (5,059) | 14, 16 | |||||||||||||||
Inventories |
| 391 |
| (534) |
|
| (157) | (129) | 234 | (663) | 15 | |||||||||||||||
Accounts payable and accrued expenses |
| (924) |
| 730 |
| 212 |
| 303 |
| (303) |
| (986) |
| (1,015) |
| 47 | 16 | |||||||||
Accrued income taxes payable/receivable |
| 13 |
| (619) |
| 18 |
| 24 |
|
|
|
|
| 31 |
| (595) | ||||||||||
Retirement benefits |
| (241) |
| (115) |
| (5) |
| (1) |
|
|
|
|
| (246) |
| (116) | ||||||||||
Other |
| (109) |
| 247 |
| 44 |
| (15) |
| (107) |
| (56) |
| (172) |
| 176 | 11, 12, 15 | |||||||||
Net cash provided by operating activities |
| 5,702 |
| 7,358 |
| 1,754 |
| 1,496 |
| (3,317) |
| (5,958) |
| 4,139 |
| 2,896 | ||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||||||||
Collections of receivables (excluding receivables related to sales) |
|
|
| 19,826 |
| 18,440 |
| (683) |
| (848) |
| 19,143 |
| 17,592 | 14 | |||||||||||
Proceeds from maturities and sales of marketable securities |
| 56 |
| 68 |
| 277 |
| 59 |
|
|
|
|
| 333 |
| 127 | ||||||||||
Proceeds from sales of equipment on operating leases |
|
|
| 1,451 |
| 1,445 |
|
|
|
|
| 1,451 |
| 1,445 | ||||||||||||
Cost of receivables acquired (excluding receivables related to sales) |
|
|
| (21,395) |
| (21,043) |
| 282 |
| 329 |
| (21,113) |
| (20,714) | 14 | |||||||||||
Purchases of marketable securities | (220) |
| (19) |
| (352) |
| (194) |
|
|
|
|
| (572) |
| (213) | |||||||||||
Purchases of property and equipment |
| (1,041) |
| (885) |
| (2) |
| (2) |
|
|
|
|
| (1,043) |
| (887) | ||||||||||
Cost of equipment on operating leases acquired |
|
|
| (2,377) |
| (2,143) |
| 212 |
| 175 |
| (2,165) |
| (1,968) | 15 | |||||||||||
Decrease (increase) in investment in Financial Services | 11 | (811) |
|
|
|
|
| (11) |
| 811 |
|
|
|
| 17 | |||||||||||
Increase in trade and wholesale receivables |
|
|
| (3,255) |
| (6,270) |
| 3,255 |
| 6,270 |
|
|
|
| 14 | |||||||||||
Collateral on derivatives – net |
|
| 390 | 240 |
|
| 390 | 240 | ||||||||||||||||||
Other |
| (88) |
| (210) |
| (8) |
| 24 |
| 1 |
| 1 |
| (95) |
| (185) | ||||||||||
Net cash used for investing activities |
| (1,282) |
| (1,857) |
| (5,445) |
| (9,444) |
| 3,056 |
| 6,738 |
| (3,671) |
| (4,563) | ||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||||||||
Net proceeds (payments) in short-term borrowings (original maturities three months or less) |
| 81 |
| (152) |
| (1,073) |
| 5,192 |
|
|
|
|
| (992) |
| 5,040 | ||||||||||
Change in intercompany receivables/payables |
| 558 |
| 1,476 |
| (558) |
| (1,476) |
|
|
|
|
|
|
|
| ||||||||||
Proceeds from borrowings issued (original maturities greater than three months) |
| 115 |
| 60 |
| 15,397 |
| 9,912 |
|
|
|
|
| 15,512 |
| 9,972 | ||||||||||
Payments of borrowings (original maturities greater than three months) |
| (1,061) |
| (116) |
| (9,731) |
| (5,746) |
|
|
|
|
| (10,792) |
| (5,862) | ||||||||||
Repurchases of common stock |
| (3,227) |
| (4,663) |
|
|
|
| (3,227) | (4,663) | ||||||||||||||||
Capital investment from Equipment Operations |
|
|
| (11) | 811 | 11 | (811) |
|
| 17 | ||||||||||||||||
Dividends paid |
| (1,202) |
| (1,065) |
| (250) | (31) |
| 250 | 31 |
| (1,202) | (1,065) | 13 | ||||||||||||
Other |
| (37) |
| 4 |
| (51) |
| (47) |
|
|
|
|
| (88) |
| (43) | ||||||||||
Net cash provided by (used for) financing activities |
| (4,773) |
| (4,456) |
| 3,723 |
| 8,615 |
| 261 |
| (780) |
| (789) |
| 3,379 | ||||||||||
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash |
| 12 |
| 108 |
| (18) |
| 17 |
|
|
|
|
| (6) |
| 125 | ||||||||||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash |
| (341) |
| 1,153 |
| 14 |
| 684 |
|
|
|
|
| (327) |
| 1,837 | ||||||||||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
| 5,755 |
| 3,781 |
| 1,865 |
| 1,160 |
|
|
|
|
| 7,620 |
| 4,941 | ||||||||||
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ | 5,414 | $ | 4,934 | $ | 1,879 | $ | 1,844 |
|
| $ | 7,293 | $ | 6,778 | ||||||||||||
Components of Cash, Cash Equivalents, and Restricted Cash | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 5,385 | $ | 4,858 | $ | 1,619 | $ | 1,718 |
|
| $ | 7,004 | $ | 6,576 | ||||||||||||
Cash, cash equivalents, and restricted cash (Assets held for sale) | 108 | 108 | ||||||||||||||||||||||||
Restricted cash (Other assets) | 29 | 76 | 152 | 126 | 181 | 202 | ||||||||||||||||||||
Total Cash, Cash Equivalents, and Restricted Cash | $ | 5,414 | $ | 4,934 | $ | 1,879 | $ | 1,844 |
|
| $ | 7,293 | $ | 6,778 | ||||||||||||
11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
12 Reclassification of share-based compensation expense.
13 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations’ operating activities.
14 Primarily reclassification of receivables related to the sale of equipment.
15 Reclassification of direct lease agreements with retail customers.
16 Reclassification of sales incentive accruals on receivables sold to financial services.
17 Elimination of change in investment from equipment operations to financial services.
40
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See our most recently filed Annual Report on Form 10-K (Part II, Item 7A). There have been no material changes in this information.
Item 4.CONTROLS AND PROCEDURES
Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of July 28, 2024, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. During the third quarter of 2024, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
We are subject to various unresolved legal actions, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, trademark, and antitrust matters. We believe the reasonably possible range of losses for these unresolved legal actions would not have a material effect on our consolidated financial statements.
Item 1A.Risk Factors
See our most recently filed Annual Report on Form 10-K (Part I, Item 1A). The risks described in the Annual Report on Form 10-K, and the “Forward-Looking Statements” in this report, are not the only risks we face. Additional risks and uncertainties may also materially affect our business, financial condition, or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Purchases of our common stock during the third quarter of 2024 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 | Average Price | Programs (1) | Plans or Programs (1) |
|
| ||||||
Period | (thousands) | Per Share | (thousands) | (millions) |
|
| |||||
Apr 29 to May 26 | 900 |
| $ | 403.24 | 900 | 26.3 | |||||
May 27 to Jun 23 | 659 | 375.46 | 659 | 25.7 | |||||||
Jun 24 to Jul 28 | 537 | 375.06 | 537 | 25.2 | |||||||
Total | 2,096 | 2,096 |
(1) | We have a share repurchase plan that was announced in December 2022 to purchase up to $18.0 billion of shares of our common stock. The maximum number of shares that may yet be purchased under this plan was 25.2 million based on the closing price of our common stock on the New York Stock Exchange as of the end of the third quarter of 2024 of $386.55 per share. At the end of the third quarter of 2024, $9.7 billion of common stock remained to be purchased under this plan. |
41
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
Not applicable.
Item 5.Other Information
Item 6.Exhibits
Certain instruments relating to long-term borrowings constituting less than 10 percent of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will furnish copies of such instruments to the Commission upon request of the Commission.
3.1 | |
3.2 | |
31.1 | |
31.2 | |
32 | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
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.
42
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: | August 29, 2024 | By: | /s/ Joshua A. Jepsen | |
Joshua A. Jepsen (Principal Financial Officer and Principal Accounting Officer) |
43
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: | August 29, 2024 | | | By: | /s/ John C. May | |||
| | | | | John C. May | |||
| | | | | Chairman and Chief Executive Officer | |||
| | | | | (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Joshua A. Jepsen, 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: | August 29, 2024 | | | By: | /s/ Joshua A. Jepsen | ||||
| | | | | Joshua A. Jepsen | ||||
| | | | | Senior Vice President and Chief Financial Officer | ||||
| | | | | (Principal Financial Officer and Principal Accounting Officer) |
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 ended July 28, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certify that to the best of his 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. |
August 29, 2024 | /s/ John C. May | | Chairman and Chief Executive Officer |
| John C. May | | (Principal Executive Officer) |
| | | |
| | | Senior Vice President and Chief Financial Officer |
August 29, 2024 | /s/ Joshua A. Jepsen | | (Principal Financial Officer and Principal |
| Joshua A. Jepsen | | Accounting Officer) |
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end
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end
*;*VO]'DAN[D6D!92920,$'CK4^@6UU9Z-:0WLIFN
MD3$DA8L6/U/6H/%,%E '?% N/&+^#AH=CJ6HZ1;V44$":EJQ="G[T+Y,2%$P -2.B
MLT:,1W*@UO444 %%%% !7+^)?AAX2\9:O9:IKGAW3M5U&RQY%S=0*[H P8#)
MZ@, <'O7444 <7XY^#'@7XFR&3Q7X3TK7W,?E,;ZV63 -OCQXG\$VNFI'H6DZ/!?VVJLQ+WLC7$T,I0=/+5H2H/4LC
M'[I4G*\"_ 7Q3X0\:ZEJ]WXMT+5]/O0UHJ/X>N([^UT\#;%:07/V\I&J +EA
M#\Q&XC.,7/AY^S/IGPT^*S^+]+\0:Q-9#08=#ATB^NY;A8Q'-++O\QW.5_>X
M";?E(+9RQP >RT444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110
M 4444 %%%% '*?%B_N=+^%_BZ\LYY+6[M])NI89XF*O&ZQ,0RD<@@C.:^4=8
M^-'BZ;]GK0= B\0WT?C:PE@;5M4639 (1) Organization and Consolidation Deere & Company has been developing innovative solutions to help its customers become more profitable for more than 185 years. References to “Deere & Company,” “John Deere,” “we,” “us,” or “our” include our consolidated subsidiaries. We manage our business through the following operating segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS). References to “agriculture and turf” include both PPA and SAT. We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2024 and 2023 were July 28, 2024 and July 30, 2023, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to our fiscal years generally ending in October and the associated periods in those fiscal years. All amounts are presented in millions of dollars, unless otherwise specified.
(2) Summary of Significant Accounting Policies and New Accounting PROnouncements Quarterly Financial Statements The interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in our latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. Use of Estimates in Financial Statements Certain accounting policies require management to make estimates and assumptions in determining the amounts reflected in the financial statements and related disclosures. Actual results could differ from those estimates. New Accounting Pronouncements We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. Accounting Pronouncements Adopted We adopted the following standards in 2024, none of which had a material effect on our consolidated financial statements. 2022-04 — Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations 2022-02 — Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures 2022-01 — Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method 2021-08 — Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Accounting Pronouncements to be Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash income taxes paid both in the U.S. and foreign jurisdictions. The effective date of the ASU is fiscal year 2026. We are assessing the effect of this update on our related disclosures. We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements. 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures 2023-06 — Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative 2023-05 — Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement 2022-03 — Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
(3) Revenue Recognition Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow: Three Months Ended July 28, 2024 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 2,839 $ 1,824 $ 1,967 $ 1,076 $ 7,706 Canada 489 207 183 191 1,070 Western Europe 522 542 432 64 1,560 Central Europe and CIS 201 70 106 12 389 Latin America 841 125 305 94 1,365 Asia, Africa, Oceania, and Middle East 350 360 300 52 1,062 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Major product lines: Production agriculture $ 5,038 $ 5,038 Small agriculture $ 2,168 2,168 Turf 825 825 Construction $ 1,308 1,308 Compact construction 643 643 Roadbuilding 961 961 Forestry 269 269 Financial products 65 33 8 $ 1,489 1,595 Other 139 102 104 345 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Revenue recognized: At a point in time $ 5,143 $ 3,084 $ 3,269 $ 35 $ 11,531 Over time 99 44 24 1,454 1,621 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Nine Months Ended July 28, 2024 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 9,441 $ 5,011 $ 6,563 $ 3,041 $ 24,056 Canada 1,475 492 635 538 3,140 Western Europe 1,684 1,747 1,263 144 4,838 Central Europe and CIS 655 223 291 28 1,197 Latin America 2,510 326 895 346 4,077 Asia, Africa, Oceania, and Middle East 1,199 1,074 829 162 3,264 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Major product lines: Production agriculture $ 16,336 $ 16,336 Small agriculture $ 5,984 5,984 Turf 2,491 2,491 Construction $ 4,528 4,528 Compact construction 1,964 1,964 Roadbuilding 2,804 2,804 Forestry 832 832 Financial products 164 91 43 $ 4,259 4,557 Other 464 307 305 1,076 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Revenue recognized: At a point in time $ 16,707 $ 8,753 $ 10,395 $ 97 $ 35,952 Over time 257 120 81 4,162 4,620 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Three Months Ended July 30, 2023 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 3,394 $ 2,098 $ 2,346 $ 860 $ 8,698 Canada 397 179 288 165 1,029 Western Europe 833 802 421 35 2,091 Central Europe and CIS 302 85 98 6 491 Latin America 1,326 220 371 117 2,034 Asia, Africa, Oceania, and Middle East 720 422 271 45 1,458 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Major product lines: Production agriculture $ 6,721 $ 6,721 Small agriculture $ 2,688 2,688 Turf 964 964 Construction $ 1,745 1,745 Compact construction 614 614 Roadbuilding 987 987 Forestry 334 334 Financial products 89 28 15 $ 1,228 1,360 Other 162 126 100 388 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Revenue recognized: At a point in time $ 6,857 $ 3,769 $ 3,767 $ 30 $ 14,423 Over time 115 37 28 1,198 1,378 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Nine Months Ended July 30, 2023 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 10,079 $ 6,005 $ 6,807 $ 2,339 $ 25,230 Canada 1,303 514 865 468 3,150 Western Europe 2,092 2,254 1,278 95 5,719 Central Europe and CIS 897 420 263 26 1,606 Latin America 4,106 577 1,098 318 6,099 Asia, Africa, Oceania, and Middle East 1,709 1,291 906 129 4,035 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 Major product lines: Production agriculture $ 19,565 $ 19,565 Small agriculture $ 7,835 7,835 Turf 2,782 2,782 Construction $ 5,040 5,040 Compact construction 1,750 1,750 Roadbuilding 2,939 2,939 Forestry 1,119 1,119 Financial products 149 66 40 $ 3,375 3,630 Other 472 378 329 1,179 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 Revenue recognized: At a point in time $ 19,965 $ 10,970 $ 11,142 $ 80 $ 42,157 Over time 221 91 75 3,295 3,682 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 We invoice in advance of recognizing the sale of certain products and the revenue for certain services. These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance, telematic services, and other information enabled solutions. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received, but not recognized in revenue, was $1,895, $1,697, and $1,753 at July 28, 2024, October 29, 2023, and July 30, 2023, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended July 28, 2024 and July 30, 2023, $126 and $96, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the nine months ended July 28, 2024 and July 30, 2023, $484 and $440, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $1,677 at July 28, 2024. The estimated revenue to be recognized by fiscal year follows: remainder of (4) Other Comprehensive Income Items The after-tax components of accumulated other comprehensive income (loss) follow: July 28 October 29 July 30 2024 2023 2023 Retirement benefits adjustment $ (974) $ (845) $ (656) Cumulative translation adjustment (2,264) (2,151) (1,669) Unrealized gain (loss) on derivatives (44) (8) (5) Unrealized gain (loss) on debt securities (86) (110) (81) Total accumulated other comprehensive income (loss) $ (3,368) $ (3,114) $ (2,411) The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss). Before Tax After Tax (Expense) Tax Three Months Ended July 28, 2024 Amount Credit Amount Cumulative translation adjustment $ (170) $ (170) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (15) $ 3 (12) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (22) 5 (17) Net unrealized gain (loss) on derivatives (37) 8 (29) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 29 (6) 23 Net unrealized gain (loss) on debt securities 29 (6) 23 Retirement benefits adjustment: Net actuarial gain (loss) (19) 5 (14) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (18) 4 (14) Prior service (credit) cost 8 (1) 7 Settlements 1 (1) Net unrealized gain (loss) on retirement benefits adjustment (28) 7 (21) Total other comprehensive income (loss) $ (206) $ 9 $ (197) Before Tax After Tax (Expense) Tax Nine Months Ended July 28, 2024 Amount Credit Amount Cumulative translation adjustment $ (114) $ 1 $ (113) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3 3 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (49) 10 (39) Net unrealized gain (loss) on derivatives (46) 10 (36) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 1 18 Reclassification of realized (gain) loss – Other income 8 (2) 6 Net unrealized gain (loss) on debt securities 25 (1) 24 Retirement benefits adjustment: Net actuarial gain (loss) (145) 35 (110) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (54) 14 (40) Prior service (credit) cost 26 (6) 20 Settlements 2 (1) 1 Net unrealized gain (loss) on retirement benefits adjustment (171) 42 (129) Total other comprehensive income (loss) $ (306) $ 52 $ (254) Before Tax After Tax (Expense) Tax Three Months Ended July 30, 2023 Amount Credit Amount Cumulative translation adjustment $ 143 $ 1 $ 144 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 24 (5) 19 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (18) 4 (14) Net unrealized gain (loss) on derivatives 6 (1) 5 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (16) 3 (13) Net unrealized gain (loss) on debt securities (16) 3 (13) Retirement benefits adjustment: Net actuarial gain (loss) (1) (1) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (20) 5 (15) Prior service (credit) cost 9 (2) 7 Net unrealized gain (loss) on retirement benefits adjustment (12) 3 (9) Total other comprehensive income (loss) $ 121 $ 6 $ 127 Before Tax After Tax (Expense) Tax Nine Months Ended July 30, 2023 Amount Credit Amount Cumulative translation adjustment $ 914 $ 11 $ 925 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 19 (4) 15 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (52) 11 (41) Net unrealized gain (loss) on derivatives (33) 7 (26) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 (4) 13 Net unrealized gain (loss) on debt securities 17 (4) 13 Retirement benefits adjustment: Net actuarial gain (loss) (351) 83 (268) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (61) 15 (46) Prior service (credit) cost 28 (7) 21 Settlements 36 (10) 26 Net unrealized gain (loss) on retirement benefits adjustment (348) 81 (267) Total other comprehensive income (loss) $ 550 $ 95 $ 645
(5) Earnings Per Share A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Net income attributable to Deere & Company $ 1,734 $ 2,978 $ 5,855 $ 7,797 Average shares outstanding 274.5 290.8 277.1 294.4 Basic per share $ 6.32 $ 10.24 $ 21.13 $ 26.48 Average shares outstanding 274.5 290.8 277.1 294.4 Effect of dilutive stock options and restricted stock awards 1.1 1.3 1.1 1.5 Total potential shares outstanding 275.6 292.1 278.2 295.9 Diluted per share $ 6.29 $ 10.20 $ 21.04 $ 26.35 Shares excluded from EPS calculation, as antidilutive .4 .2 .3 .1
(6) Pension and Other Postretirement Benefits We have several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans. These plans cover U.S. employees and certain foreign employees. The components of net periodic pension and OPEB (benefit) cost consisted of the following: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Pensions: Service cost $ 56 $ 62 $ 171 $ 186 136 133 410 400 (241) (223) (723) (655) (4) (5) (13) (16) 9 10 29 30 1 2 36 Net benefit $ (43) $ (23) $ (124) $ (19) OPEB: Service cost $ 4 $ 7 $ 13 $ 20 44 44 131 132 (27) (29) (81) (87) (14) (15) (41) (45) (1) (1) (3) (2) Net cost $ 6 $ 6 $ 19 $ 18 The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.” During the first nine months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans: Pensions OPEB Contributed $ 74 $ 118 Expected contributions remainder of the year 26 22
(7) Segment DATA Information relating to operations by operating segment follows: Three Months Ended Nine Months Ended July 28 July 30 % July 28 July 30 % 2024 2023 Change 2024 2023 Change Net sales and revenues: Production & precision ag net sales $ 5,099 $ 6,806 -25 $ 16,529 $ 19,826 -17 Small ag & turf net sales 3,053 3,739 -18 8,663 10,886 -20 Construction & forestry net sales 3,235 3,739 -13 10,292 11,053 -7 Financial services revenues 1,489 1,228 +21 4,259 3,375 +26 Other revenues 276 289 -4 829 699 +19 Total net sales and revenues $ 13,152 $ 15,801 -17 $ 40,572 $ 45,839 -11 Operating profit: Production & precision ag $ 1,162 $ 1,782 -35 $ 3,857 $ 5,160 -25 Small ag & turf 496 732 -32 1,393 2,028 -31 Construction & forestry 448 716 -37 1,682 2,179 -23 Financial services 191 286 -33 657 565 +16 Total operating profit 2,297 3,516 -35 7,589 9,932 -24 Reconciling items 62 98 -37 111 29 +283 Income taxes (625) (636) -2 (1,845) (2,164) -15 Net income attributable to Deere & Company $ 1,734 $ 2,978 -42 $ 5,855 $ 7,797 -25 Intersegment sales and revenues: Production & precision ag net sales $ 4 $ 9 -56 $ 18 $ 21 -14 Small ag & turf net sales 2 -100 2 10 -80 Construction & forestry net sales Financial services revenues 178 217 -18 548 612 -10 Operating profit for PPA, SAT, and CF is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit of financial services includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and OPEB benefit (cost) amounts excluding the service cost component, and net income attributable to noncontrolling interests. Identifiable operating assets were as follows: July 28 October 29 July 30 2024 2023 2023 Production & precision ag $ 8,750 $ 8,734 $ 9,523 Small ag & turf 4,079 4,348 4,482 Construction & forestry 7,129 7,139 7,415 Financial services 74,981 70,732 68,850 Corporate 12,902 13,134 13,127 Total assets $ 107,841 $ 104,087 $ 103,397 (8) Financing Receivables We monitor the credit quality of financing receivables based on delinquency status, defined as follows: The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows: July 28, 2024 2024 2023 2022 2021 2020 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 10,349 $ 9,686 $ 5,849 $ 3,286 $ 1,276 $ 394 $ 4,409 $ 35,249 30-59 days past due 37 90 56 28 10 4 31 256 60-89 days past due 15 65 25 12 5 2 10 134 90+ days past due 1 1 2 5 9 Non-performing 12 101 85 59 24 17 15 313 Construction and forestry Current 2,261 2,067 1,249 583 147 60 111 6,478 30-59 days past due 40 59 34 14 4 1 4 156 60-89 days past due 12 25 14 9 2 1 1 64 90+ days past due 1 5 2 2 1 11 Non-performing 21 94 72 38 13 6 2 246 Total retail customer receivables $ 12,748 $ 12,193 $ 7,387 $ 4,033 $ 1,486 $ 486 $ 4,583 $ 42,916 October 29, 2023 2023 2022 2021 2020 2019 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 15,191 $ 8,430 $ 5,120 $ 2,334 $ 853 $ 280 $ 4,526 $ 36,734 30-59 days past due 62 75 39 21 9 3 29 238 60-89 days past due 18 26 18 10 4 2 9 87 90+ days past due 2 1 3 3 9 Non-performing 30 78 62 33 22 22 8 255 Construction and forestry Current 2,927 1,961 1,084 353 84 29 119 6,557 30-59 days past due 49 34 27 9 4 4 127 60-89 days past due 19 14 12 5 2 2 54 90+ days past due 6 1 1 8 Non-performing 42 80 55 23 9 4 1 214 Total retail customer receivables $ 18,340 $ 10,705 $ 6,421 $ 2,791 $ 987 $ 341 $ 4,698 $ 44,283 July 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 10,554 $ 9,701 $ 5,792 $ 2,779 $ 1,080 $ 402 $ 4,388 $ 34,696 30-59 days past due 59 85 53 26 13 4 21 261 60-89 days past due 19 30 17 10 5 1 7 89 90+ days past due 1 1 Non-performing 19 80 71 36 24 27 8 265 Construction and forestry Current 2,167 2,200 1,284 449 124 39 114 6,377 30-59 days past due 39 46 38 13 5 2 4 147 60-89 days past due 12 23 16 8 2 1 1 63 90+ days past due 2 1 1 4 Non-performing 20 83 61 26 11 5 1 207 Total retail customer receivables $ 12,889 $ 12,251 $ 7,333 $ 3,348 $ 1,264 $ 481 $ 4,544 $ 42,110 The credit quality analysis of wholesale receivables by year of origination was as follows: July 28, 2024 2024 2023 2022 2021 2020 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 557 $ 232 $ 36 $ 7 $ 1 $ 1 $ 7,326 $ 8,160 30+ days past due 1 1 Non-performing 1 1 Construction and forestry Current 13 12 4 19 1,260 1,308 30+ days past due 3 3 Non-performing Total wholesale receivables $ 571 $ 244 $ 40 $ 26 $ 1 $ 2 $ 8,589 $ 9,473 October 29, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 631 $ 93 $ 21 $ 4 $ 1 $ 160 $ 5,175 $ 6,085 30+ days past due Non-performing 1 1 Construction and forestry Current 23 5 20 76 712 836 30+ days past due Non-performing Total wholesale receivables $ 654 $ 98 $ 41 $ 4 2 $ 236 $ 5,887 $ 6,922 July 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 449 $ 139 $ 28 $ 7 $ 1 $ 1 $ 4,940 $ 5,565 30+ days past due Non-performing 1 1 Construction and forestry Current 20 6 23 1 1 752 803 30+ days past due Non-performing Total wholesale receivables $ 469 $ 145 $ 51 $ 8 $ 2 $ 2 $ 5,692 $ 6,369 An analysis of the allowance for credit losses and investment in financing receivables follows: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 28, 2024 Allowance: Beginning of period balance $ 207 $ 21 $ 2 $ 230 Provision 84 25 109 Provision reversal for assets held for sale (38) (38) Provision subtotal 46 25 71 Write-offs (45) (46) (91) Recoveries 4 8 12 Translation adjustments (3) (3) End of period balance $ 209 $ 8 $ 2 $ 219 Nine Months Ended July 28, 2024 Allowance: Beginning of period balance $ 172 $ 21 $ 4 $ 197 Provision 183 46 229 Provision reversal for assets held for sale (38) (38) Provision subtotal 145 46 191 Write-offs (112) (81) (193) Recoveries 9 22 31 Translation adjustments (5) (2) (7) End of period balance $ 209 $ 8 $ 2 $ 219 Financing receivables: End of period balance $ 38,333 $ 4,583 $ 9,473 $ 52,389 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 30, 2023 Allowance: Beginning of period balance $ 157 $ 19 $ 4 $ 180 Provision 14 11 25 Write-offs (23) (18) (41) Recoveries 5 6 11 Translation adjustments 1 1 End of period balance $ 154 $ 18 $ 4 $ 176 Nine Months Ended July 30, 2023 Allowance: Beginning of period balance $ 299 $ 22 $ 4 $ 325 Provision 59 15 1 75 Provision reversal for assets held for sale (142) (142) Provision (credit) subtotal (83) 15 1 (67) Write-offs (60) (36) (96) Recoveries 15 17 32 Translation adjustments (17) (1) (18) End of period balance $ 154 $ 18 $ 4 $ 176 Financing receivables: End of period balance $ 37,566 $ 4,544 $ 6,369 $ 48,479 In the third quarter of 2024, we determined that the financial services business in Brazil met the held for sale criteria. The receivables in Brazil were reclassified to “Assets held for sale.” The associated allowance for credit losses was reversed and a valuation allowance for the assets held for sale was recorded (see Note 21). Excluding the business in Brazil, the allowance for credit losses on retail notes and financing lease receivables increased in the third quarter and first nine months of 2024, primarily due to higher expected losses as a result of elevated delinquencies and a decline in market conditions. This increase was partially offset by a decrease in the allowance on revolving charge accounts, driven by write-offs of seasonal financing program accounts and recoveries expected on those accounts in the future. In the first quarter of 2023, the financial services business in Russia met the held for sale criteria. The allowance for credit losses for the financing receivables in Russia was reversed and a valuation allowance for the assets held for sale was recorded. These operations were sold in the second quarter of 2023 (see Note 20). Write-offs by year of origination were as follows: Nine Months Ended July 28, 2024 2024 2023 2022 2021 2020 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf $ 2 $ 17 $ 17 $ 6 $ 7 $ 3 $ 75 $ 127 Construction and forestry 2 23 21 8 4 2 6 66 Total retail customer receivables $ 4 $ 40 $ 38 $ 14 $ 11 $ 5 $ 81 $ 193 Modifications We occasionally grant contractual modifications to customers experiencing financial difficulties. Before offering a modification, we evaluate the ability of the customer to meet the modified payment terms. Modifications offered include payment deferrals, term extensions, or a combination thereof. Finance charges continue to accrue during the deferral or extension period with the exception of modifications related to bankruptcy proceedings. Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers. Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan. The ending amortized cost of modified loans with borrowers experiencing financial difficulty during the third quarter and the nine months ended July 28, 2024 were $23 and $67, respectively, of which $56 were current, $4 were 30-59 days past due, $3 were 60-89 days past due, $1 were 90 days or greater past due, and $3 were non-performing. These modifications represented 0.04 and 0.13 percent of our financing receivable portfolio for the same periods, respectively. Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the third quarter or the first nine months of 2024. In addition, at July 28, 2024, commitments to provide additional financing to these customers were not significant. (9) Securitization of Financing Receivables Our funding strategy includes receivable securitizations, which allows us to receive cash for financing receivables immediately. While these securitization programs are administered in various forms, they are accomplished in the following basic steps: As part of step 1, these receivables are legally isolated from the claims of our general creditors. This ensures cash receipts from the financing receivables are accessible to pay back securitization program investors. The structure of these transactions does not meet the accounting criteria for a sale of receivables. As a result, they are accounted for as a secured borrowing. The receivables and borrowings remain on our balance sheet and are separately reported as “Financing receivables securitized – net” and “Short-term securitization borrowings,” respectively. The components of securitization programs were as follows: July 28 October 29 July 30 2024 2023 2023 Financing receivables securitized (retail notes) $ 8,313 $ 7,357 $ 7,019 Allowance for credit losses (39) (22) (18) Other assets (primarily restricted cash) 178 152 153 Total restricted securitized assets $ 8,452 $ 7,487 $ 7,154 Short-term securitization borrowings $ 7,869 $ 6,995 $ 6,608 Accrued interest on borrowings 14 13 15 Total liabilities related to restricted securitized assets $ 7,883 $ 7,008 $ 6,623 (10) Inventories A majority of inventories owned by us are valued at cost on the “last-in, first-out” (LIFO) basis. If all inventories had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows: July 28 October 29 July 30 2024 2023 2023 Raw materials and supplies $ 3,586 $ 4,080 $ 4,492 Work-in-process 988 1,010 1,307 Finished goods and parts 5,689 5,435 6,164 Total FIFO value 10,263 10,525 11,963 Excess of FIFO over LIFO 2,567 2,365 2,613 Inventories $ 7,696 $ 8,160 $ 9,350 (11) Goodwill and Other Intangible Assets – Net The changes in amounts of goodwill by operating segments were as follows. There were no accumulated goodwill impairment losses. Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at October 30, 2022 $ 646 $ 318 $ 2,723 $ 3,687 Acquisitions 41 39 80 Translation adjustments 23 8 196 227 Goodwill at July 30, 2023 $ 710 $ 365 $ 2,919 $ 3,994 Goodwill at October 29, 2023 $ 702 $ 363 $ 2,835 $ 3,900 Translation adjustments (1) 2 59 60 Goodwill at July 28, 2024 $ 701 $ 365 $ 2,894 $ 3,960 The components of other intangible assets were as follows: July 28 October 29 July 30 2024 2023 2023 Customer lists and relationships $ 507 $ 501 $ 524 Technology, patents, trademarks, and other 1,413 1,387 1,415 Total at cost 1,920 1,888 1,939 Less accumulated amortization: Customer lists and relationships 222 195 201 Technology, patents, trademarks, and other 668 560 539 Total accumulated amortization 890 755 740 Other intangible assets – net $ 1,030 $ 1,133 $ 1,199 The amortization of other intangible assets in the third quarter and the first nine months of 2024 was $41 and $124, and for the third quarter and the first nine months of 2023 was $42 and $126, respectively. The estimated amortization expense for the next five years is as follows: remainder of 2024 – $49, 2025 – $145, 2026 – $121, 2027 – $119, 2028 – $87, and 2029 – $74. (12) Short-Term Borrowings Short-term borrowings were as follows: July 28 October 29 July 30 2024 2023 2023 Commercial paper $ 5,572 $ 9,100 $ 9,003 Notes payable to banks 418 483 352 Finance lease obligations due within one year 31 25 23 Long-term borrowings due within one year 9,273 8,331 7,765 Short-term borrowings $ 15,294 $ 17,939 $ 17,143 (13) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following: July 28 October 29 July 30 2024 2023 2023 Accounts payable: Trade payables $ 2,580 $ 3,467 $ 3,308 Dividends payable 407 388 365 258 281 308 Deposits withheld from dealers and merchants 151 163 158 Payables to unconsolidated affiliates 4 6 4 Other 173 153 173 Accrued expenses: Employee benefits 1,802 2,152 1,808 Product warranties 1,513 1,610 1,619 Accrued taxes 1,497 1,558 1,595 Derivative liabilities 582 1,130 948 Dealer sales discounts 846 1,243 902 Extended warranty premium 1,129 1,021 999 Unearned revenue (contractual liability) 766 676 754 Unearned operating lease revenue 480 451 428 Accrued interest 478 434 402 Parts return liability 404 392 378 Other 1,327 1,005 1,191 Accounts payable and accrued expenses $ 14,397 $ 16,130 $ 15,340 Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $2,535 at July 28, 2024, $2,228 at October 29, 2023, and $2,240 at July 30, 2023. Other eliminations were made for accrued taxes and other accrued expenses. (14) Long-Term Borrowings Long-term borrowings consisted of: July 28 October 29 July 30 2024 2023 2023 Underwritten term debt U.S. dollar notes and debentures: 2.75% notes due 2025 $ 700 $ 700 6.55% debentures due 2028 $ 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: 1.85% notes due 2028 (€600 principal) 651 634 659 2.20% notes due 2032 (€600 principal) 651 634 659 1.65% notes due 2039 (€650 principal) 705 687 713 Serial issuances Medium-term notes 36,057 29,638 29,355 Other notes and finance lease obligations 232 1,769 1,605 Less debt issuance costs and debt discounts (154) (135) (129) Long-term borrowings $ 42,692 $ 38,477 $ 38,112 Medium-term notes due through 2034 are primarily offered by prospectus and issued at fixed and variable rates. The principal balances of the medium-term notes were $36,716, $30,902, and $30,348, at July 28, 2024, October 29, 2023, and July 30, 2023, respectively. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other. (15) Leases – Lessor We lease equipment manufactured or sold by us through John Deere Financial. Sales-type and direct financing leases are reported in “Financing receivables – net.” Operating leases are reported in “Equipment on operating leases – net.” Lease revenues earned by us follow: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Sales-type and direct finance lease revenues $ 50 $ 41 $ 141 $ 120 Operating lease revenues 358 332 1,039 974 Variable lease revenues 4 13 11 Total lease revenues $ 412 $ 373 $ 1,193 $ 1,105 (16) Commitments and Contingencies A standard warranty is provided as assurance that the equipment will function as intended. The standard warranty period varies by product and region. At the time a sale is recognized, we record an estimate of future warranty costs based on historical claims rate experience and estimated population under warranty. The reconciliation of the changes in the warranty liability follows: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Beginning of period balance $ 1,566 $ 1,562 $ 1,610 $ 1,427 Warranty claims paid (325) (314) (959) (851) New product warranty accruals 280 363 871 1,006 Foreign exchange (8) 8 (9) 37 End of period balance $ 1,513 $ 1,619 $ 1,513 $ 1,619 The costs for extended warranty programs are recognized as incurred. In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment. At July 28, 2024, the notional value of these guarantees was $151. We may repossess the equipment collateralizing the receivables. At July 28, 2024, the accrued losses under these agreements were not material. We also had other miscellaneous contingent liabilities and guarantees totaling approximately $130 at July 28, 2024. The accrued liability for these contingencies was $20 at July 28, 2024. At July 28, 2024, we had commitments of approximately $585 for the construction and acquisition of property and equipment. Also, at July 28, 2024, we had restricted assets of $234, classified as “Other assets.” We are subject to various unresolved legal actions. The accrued losses on these matters were not material at July 28, 2024. We believe the reasonably possible range of losses for these unresolved legal actions would not have a material effect on our financial statements. The most prevalent legal claims relate to product liability (including asbestos-related liability), retail credit, employment, patent, trademark, and antitrust matters. (17) FAIR VALUE MEASUREMENTS The fair values of financial instruments that do not approximate the carrying values were as follows. Long-term borrowings exclude finance lease liabilities. July 28, 2024 October 29, 2023 July 30, 2023 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net $ 43,896 $ 43,713 $ 43,673 $ 42,777 $ 41,302 $ 40,675 Financing receivables securitized – net 8,274 8,139 7,335 7,056 7,001 6,818 Short-term securitization borrowings 7,869 7,872 6,995 6,921 6,608 6,538 Long-term borrowings due within one year 9,273 9,190 8,331 8,156 7,765 7,568 Long-term borrowings 42,617 42,076 38,428 36,873 38,064 37,121 Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by us for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts. In May 2024, we acquired a held-to-maturity marketable security that matures in less than one year. The carrying value of the held-to-maturity marketable security was $12 as of July 28, 2024, which approximated its 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. Assets and liabilities measured at fair value on a recurring basis follow, excluding our cash equivalents, which were carried at a cost that approximates fair value and consisted of money market funds and time deposits. July 28 October 29 July 30 2024 2023 2023 Level 1 Marketable securities: International equity securities $ 3 $ 3 International mutual funds securities 101 U.S. equity fund 86 101 U.S. fixed income fund 32 85 U.S. government debt securities $ 413 78 63 Total Level 1 marketable securities 413 300 252 Level 2 Marketable securities: Corporate debt securities 220 244 221 International debt securities 145 1 2 Mortgage-backed securities 154 185 163 Municipal debt securities 69 75 69 U.S. government debt securities 127 141 134 Total Level 2 marketable securities 715 646 589 Other assets – Derivatives 361 292 324 Accounts payable and accrued expenses – Derivatives 582 1,130 948 Level 3 Accounts payable and accrued expenses – Deferred consideration 153 186 202 The mortgage-backed securities are primarily issued by U.S. government-sponsored enterprises. The contractual maturities of available-for-sale debt securities at July 28, 2024 follow: Amortized Fair Cost Value Due in one year or less $ 21 $ 21 Due after one through five years 299 258 Due after five through 10 years 557 540 Due after 10 years 185 155 Mortgage-backed securities 182 154 Debt securities $ 1,244 $ 1,128 Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity. Fair value, nonrecurring Level 3 measurements from impairments were as follows: Fair Value Losses Three Months Ended Nine Months Ended July 28 October 29 July 30 July 28 July 30 July 28 July 30 2024 2023 2023 2024 2023 2024 2023 Assets held for sale $ 2,965 $ 53 $ 53 The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value: Marketable securities – The portfolio of investments is 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 valued using the fund’s net asset value, based on the fair value of the underlying securities. International debt securities are valued using quoted prices for identical assets in inactive markets. Derivatives – Our derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Assets held for sale – The impairment was measured at the lower of the carrying amount or fair value less cost to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 21). (18) Derivative Instruments Fair values of our derivative instruments and the associated notional amounts were as follows. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.” July 28, 2024 October 29, 2023 July 30, 2023 Fair Value Fair Value Fair Value Notional Assets Liabilities Notional Assets Liabilities Notional Assets Liabilities Cash flow hedges: Interest rate contracts $ 3,475 $ 14 $ 18 $ 1,500 $ 45 $ 1,500 $ 48 $ 3 Fair value hedges: Interest rate contracts 15,165 119 486 12,691 $ 970 12,160 4 729 Cross-currency interest rate contracts 975 16 Not designated as hedging instruments: Interest rate contracts 13,656 103 59 13,853 169 98 13,233 221 109 Foreign exchange contracts 7,529 99 16 8,117 75 54 8,630 51 82 Cross-currency interest rate contracts 190 10 3 176 3 8 155 25 The amounts recorded in the consolidated balance sheets related to borrowings designated in fair value hedging relationships were as follows. Fair value hedging adjustments are included in the carrying amount of the hedged item. Active Hedging Relationships Discontinued Hedging Relationships Carrying Amount Cumulative Fair Value Carrying Amount of Cumulative Fair Value of Hedged Item Hedging Amount Formerly Hedged Item Hedging Amount July 28, 2024 Short-term borrowings $ 286 $ (4) $ 1,458 $ 9 Long-term borrowings 15,386 (394) 8,414 (264) October 29, 2023 Short-term borrowings $ 1,814 $ 15 Long-term borrowings 11,660 $ (976) 7,144 (288) July 30, 2023 Short-term borrowings $ 2,324 $ 25 Long-term borrowings $ 11,379 $ (728) 6,319 (265) The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Fair Value Hedges Interest rate contracts – Interest expense* $ 373 $ (375) $ 269 $ (146) Cash Flow Hedges Recognized in OCI: Interest rate contracts – OCI (pretax) $ (15) $ 24 $ 3 $ 19 Reclassified from OCI: Interest rate contracts – Interest expense 22 18 49 52 Not Designated as Hedges Interest rate contracts – Net sales $ 6 Interest rate contracts – Interest expense* $ 4 48 $ 2 $ 45 Foreign exchange contracts – Net sales (3) 3 2 Foreign exchange contracts – Cost of sales 36 (78) 15 (14) Foreign exchange contracts – Other operating expenses* 17 (142) (118) (157) Total not designated $ 54 $ (163) $ (101) $ (124) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at July 28, 2024, October 29, 2023, and July 30, 2023, was $566, $1,076, and $865, respectively. In accordance with the limits established in these agreements, we posted $269, $659, and $435 of cash collateral at July 28, 2024, October 29, 2023, and July 30, 2023, respectively. In addition, we paid $8 of collateral that was outstanding at July 28, 2024, October 29, 2023, and July 30, 2023 to participate in an international futures market to hedge currency exposure, not included in the table below. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral follows: Gross Amounts Netting Recognized Arrangements Collateral Net Amount July 28, 2024 Assets $ 361 $ (154) $ 207 Liabilities 582 (154) $ (269) 159 October 29, 2023 Assets $ 292 $ (152) $ 140 Liabilities 1,130 (152) $ (659) 319 July 30, 2023 Assets $ 324 $ (160) $ (28) $ 136 Liabilities 948 (160) (435) 353 (19) Share-Based Awards We are authorized to grant shares for stock options and restricted stock units. The outstanding shares authorized were 14.9 million at July 28, 2024. In December 2023, we granted stock options to employees for the purchase of 216 thousand shares of common stock at an exercise price of $377.01 per share and a binomial During the nine months ended July 28, 2024, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date, in dollars follow: Grant Date Shares Fair Value Service-based 378 $ 377.37 Performance/service-based 52 360.53 Market/service-based 52 370.87 In December 2023, we granted market/service-based RSUs. The vesting period for the market/service-based RSUs is three years and dividend equivalents are not earned during the vesting period. The market/service-based RSUs are subject to a market related metric based on total shareholder return, compared to a benchmark group of companies, and award common stock in a range of zero to 200 percent for each unit granted based on the level of the metric achieved. The fair value of the market/service-based RSUs was determined using a (20) Disposition In March 2023, we sold our financial services business in Russia to Insight Investment Group. The total proceeds, net of restricted cash sold, were $36. The operations were included in the financial services operating segment through the date of sale. At the disposal date, the total assets were $31, consisting primarily of financing receivables, the total liabilities were $5, and the cumulative translation loss was $10. We did not incur additional gains or losses upon disposition. (21) Special ItemS 2024 Employee-Separation Programs In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs’ main purpose was to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. The programs’ total pretax expenses are estimated to be approximately $150, with $124 recorded in the third quarter of 2024. The remaining expenses are expected to be recorded primarily in 2025. Payments made during the third quarter of 2024 with respect to these program expenses totaled $30. The expenses for the three months and nine months ended July 28, 2024 were recorded as follows: PPA SAT CF FS Total Employee-Separation Programs: Cost of sales $ 18 $ 9 $ 8 $ 35 Research and development expenses 19 6 1 26 Selling, administrative and general expenses 25 14 11 $ 9 59 Total operating profit decrease $ 62 $ 29 $ 20 $ 9 120 Non-operating profit expenses* 4 Total $ 124 * Relates primarily to corporate expenses. Banco John Deere S.A. In the third quarter of 2024, our board of directors authorized the sale of 50 percent ownership in our wholly owned subsidiary, Banco John Deere S.A. (BJD). BJD, located in Brazil, is included in our financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. The transaction will reduce our incremental risk as we continue to grow in the Brazilian market. As a result, we reclassified the BJD business as held for sale, including a reversal of $38 in allowance for credit losses, and the establishment of a $53 valuation allowance on the assets held for sale. The net impact of these entries was a pretax and The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows: July 28 2024 Cash and cash equivalents $ 107 Trade accounts and notes receivable – net 231 Financing receivables – net 2,624 Deferred income taxes 42 Other miscellaneous assets* 14 Valuation allowance (53) Total assets held for sale $ 2,965 Short-term borrowings 563 Accounts payable and accrued expenses 101 Long-term borrowings 1,137 Retirement benefits and other liabilities 2 Total liabilities held for sale $ 1,803 Total intercompany payables $ 673 * Includes $1 restricted cash balance. In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become 50 percent owner of BJD. On the transaction date, which is expected to occur in the second quarter of 2025, subject to usual and customary regulatory approval, Bradesco will contribute capital equal to our equity investment in BJD. We will retain a 50 percent equity interest in BJD and report the results of the joint venture as an equity investment in unconsolidated affiliates. Redeemable Noncontrolling Interest In the third quarter of 2024, we exercised our right to purchase the remaining 20 percent interest in SurePoint Ag Systems, Inc. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statements of consolidated income. 2023 Brazil Tax Ruling In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed us to record a $243 reduction in the provision for income taxes and $47 of interest income. Financial Services Financing Incentives Correction In the second quarter of 2023, we corrected the Summary of 2024 and 2023 Special Items The following table summarizes the operating profit impact of the special items recorded for the three months and nine months ended July 28, 2024 and July 30, 2023. Three Months Ended Nine Months Ended PPA SAT CF FS Total PPA SAT CF FS Total 2024 Expense: Employee-separation programs $ 62 $ 29 $ 20 $ 9 $ 120 $ 62 $ 29 $ 20 $ 9 $ 120 BJD remeasurement 15 15 15 15 Total 2024 expense 62 29 20 24 135 62 29 20 24 135 2023 Expense: Financing incentives correction 173 173 Period over period change $ 62 $ 29 $ 20 $ 24 $ 135 $ 62 $ 29 $ 20 $ (149) $ (38)
(22) Subsequent EventS In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A., to invest and become 50 percent owner of Banco John Deere S.A. (see Note 21). On August 28, 2024, a quarterly dividend of $1.47 per share was declared at the Board of Directors meeting, payable on November 8, 2024, to stockholders of record on September 30, 2024. We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2024 and 2023 were July 28, 2024 and July 30, 2023, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to our fiscal years generally ending in October and the associated periods in those fiscal years. Certain accounting policies require management to make estimates and assumptions in determining the amounts reflected in the financial statements and related disclosures. Actual results could differ from those estimates. We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. Accounting Pronouncements Adopted We adopted the following standards in 2024, none of which had a material effect on our consolidated financial statements. 2022-04 — Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations 2022-02 — Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures 2022-01 — Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method 2021-08 — Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Accounting Pronouncements to be Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash income taxes paid both in the U.S. and foreign jurisdictions. The effective date of the ASU is fiscal year 2026. We are assessing the effect of this update on our related disclosures. We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements. 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures 2023-06 — Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative 2023-05 — Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement 2022-03 — Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
We monitor the credit quality of financing receivables based on delinquency status, defined as follows: Our funding strategy includes receivable securitizations, which allows us to receive cash for financing receivables immediately. While these securitization programs are administered in various forms, they are accomplished in the following basic steps: As part of step 1, these receivables are legally isolated from the claims of our general creditors. This ensures cash receipts from the financing receivables are accessible to pay back securitization program investors. The structure of these transactions does not meet the accounting criteria for a sale of receivables. As a result, they are accounted for as a secured borrowing. The receivables and borrowings remain on our balance sheet and are separately reported as “Financing receivables securitized – net” and “Short-term securitization borrowings,” respectively. Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow: Three Months Ended July 28, 2024 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 2,839 $ 1,824 $ 1,967 $ 1,076 $ 7,706 Canada 489 207 183 191 1,070 Western Europe 522 542 432 64 1,560 Central Europe and CIS 201 70 106 12 389 Latin America 841 125 305 94 1,365 Asia, Africa, Oceania, and Middle East 350 360 300 52 1,062 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Major product lines: Production agriculture $ 5,038 $ 5,038 Small agriculture $ 2,168 2,168 Turf 825 825 Construction $ 1,308 1,308 Compact construction 643 643 Roadbuilding 961 961 Forestry 269 269 Financial products 65 33 8 $ 1,489 1,595 Other 139 102 104 345 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Revenue recognized: At a point in time $ 5,143 $ 3,084 $ 3,269 $ 35 $ 11,531 Over time 99 44 24 1,454 1,621 Total $ 5,242 $ 3,128 $ 3,293 $ 1,489 $ 13,152 Nine Months Ended July 28, 2024 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 9,441 $ 5,011 $ 6,563 $ 3,041 $ 24,056 Canada 1,475 492 635 538 3,140 Western Europe 1,684 1,747 1,263 144 4,838 Central Europe and CIS 655 223 291 28 1,197 Latin America 2,510 326 895 346 4,077 Asia, Africa, Oceania, and Middle East 1,199 1,074 829 162 3,264 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Major product lines: Production agriculture $ 16,336 $ 16,336 Small agriculture $ 5,984 5,984 Turf 2,491 2,491 Construction $ 4,528 4,528 Compact construction 1,964 1,964 Roadbuilding 2,804 2,804 Forestry 832 832 Financial products 164 91 43 $ 4,259 4,557 Other 464 307 305 1,076 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Revenue recognized: At a point in time $ 16,707 $ 8,753 $ 10,395 $ 97 $ 35,952 Over time 257 120 81 4,162 4,620 Total $ 16,964 $ 8,873 $ 10,476 $ 4,259 $ 40,572 Three Months Ended July 30, 2023 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 3,394 $ 2,098 $ 2,346 $ 860 $ 8,698 Canada 397 179 288 165 1,029 Western Europe 833 802 421 35 2,091 Central Europe and CIS 302 85 98 6 491 Latin America 1,326 220 371 117 2,034 Asia, Africa, Oceania, and Middle East 720 422 271 45 1,458 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Major product lines: Production agriculture $ 6,721 $ 6,721 Small agriculture $ 2,688 2,688 Turf 964 964 Construction $ 1,745 1,745 Compact construction 614 614 Roadbuilding 987 987 Forestry 334 334 Financial products 89 28 15 $ 1,228 1,360 Other 162 126 100 388 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Revenue recognized: At a point in time $ 6,857 $ 3,769 $ 3,767 $ 30 $ 14,423 Over time 115 37 28 1,198 1,378 Total $ 6,972 $ 3,806 $ 3,795 $ 1,228 $ 15,801 Nine Months Ended July 30, 2023 Production & Precision Ag Small Ag & Turf Construction Financial Total Primary geographic markets: United States $ 10,079 $ 6,005 $ 6,807 $ 2,339 $ 25,230 Canada 1,303 514 865 468 3,150 Western Europe 2,092 2,254 1,278 95 5,719 Central Europe and CIS 897 420 263 26 1,606 Latin America 4,106 577 1,098 318 6,099 Asia, Africa, Oceania, and Middle East 1,709 1,291 906 129 4,035 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 Major product lines: Production agriculture $ 19,565 $ 19,565 Small agriculture $ 7,835 7,835 Turf 2,782 2,782 Construction $ 5,040 5,040 Compact construction 1,750 1,750 Roadbuilding 2,939 2,939 Forestry 1,119 1,119 Financial products 149 66 40 $ 3,375 3,630 Other 472 378 329 1,179 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 Revenue recognized: At a point in time $ 19,965 $ 10,970 $ 11,142 $ 80 $ 42,157 Over time 221 91 75 3,295 3,682 Total $ 20,186 $ 11,061 $ 11,217 $ 3,375 $ 45,839 The after-tax components of accumulated other comprehensive income (loss) follow: July 28 October 29 July 30 2024 2023 2023 Retirement benefits adjustment $ (974) $ (845) $ (656) Cumulative translation adjustment (2,264) (2,151) (1,669) Unrealized gain (loss) on derivatives (44) (8) (5) Unrealized gain (loss) on debt securities (86) (110) (81) Total accumulated other comprehensive income (loss) $ (3,368) $ (3,114) $ (2,411) The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss). Before Tax After Tax (Expense) Tax Three Months Ended July 28, 2024 Amount Credit Amount Cumulative translation adjustment $ (170) $ (170) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (15) $ 3 (12) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (22) 5 (17) Net unrealized gain (loss) on derivatives (37) 8 (29) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 29 (6) 23 Net unrealized gain (loss) on debt securities 29 (6) 23 Retirement benefits adjustment: Net actuarial gain (loss) (19) 5 (14) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (18) 4 (14) Prior service (credit) cost 8 (1) 7 Settlements 1 (1) Net unrealized gain (loss) on retirement benefits adjustment (28) 7 (21) Total other comprehensive income (loss) $ (206) $ 9 $ (197) Before Tax After Tax (Expense) Tax Nine Months Ended July 28, 2024 Amount Credit Amount Cumulative translation adjustment $ (114) $ 1 $ (113) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3 3 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (49) 10 (39) Net unrealized gain (loss) on derivatives (46) 10 (36) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 1 18 Reclassification of realized (gain) loss – Other income 8 (2) 6 Net unrealized gain (loss) on debt securities 25 (1) 24 Retirement benefits adjustment: Net actuarial gain (loss) (145) 35 (110) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (54) 14 (40) Prior service (credit) cost 26 (6) 20 Settlements 2 (1) 1 Net unrealized gain (loss) on retirement benefits adjustment (171) 42 (129) Total other comprehensive income (loss) $ (306) $ 52 $ (254) Before Tax After Tax (Expense) Tax Three Months Ended July 30, 2023 Amount Credit Amount Cumulative translation adjustment $ 143 $ 1 $ 144 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 24 (5) 19 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (18) 4 (14) Net unrealized gain (loss) on derivatives 6 (1) 5 Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (16) 3 (13) Net unrealized gain (loss) on debt securities (16) 3 (13) Retirement benefits adjustment: Net actuarial gain (loss) (1) (1) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (20) 5 (15) Prior service (credit) cost 9 (2) 7 Net unrealized gain (loss) on retirement benefits adjustment (12) 3 (9) Total other comprehensive income (loss) $ 121 $ 6 $ 127 Before Tax After Tax (Expense) Tax Nine Months Ended July 30, 2023 Amount Credit Amount Cumulative translation adjustment $ 914 $ 11 $ 925 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 19 (4) 15 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (52) 11 (41) Net unrealized gain (loss) on derivatives (33) 7 (26) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) 17 (4) 13 Net unrealized gain (loss) on debt securities 17 (4) 13 Retirement benefits adjustment: Net actuarial gain (loss) (351) 83 (268) Reclassification to Other operating expenses through amortization of: Actuarial (gain) loss (61) 15 (46) Prior service (credit) cost 28 (7) 21 Settlements 36 (10) 26 Net unrealized gain (loss) on retirement benefits adjustment (348) 81 (267) Total other comprehensive income (loss) $ 550 $ 95 $ 645
A reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Net income attributable to Deere & Company $ 1,734 $ 2,978 $ 5,855 $ 7,797 Average shares outstanding 274.5 290.8 277.1 294.4 Basic per share $ 6.32 $ 10.24 $ 21.13 $ 26.48 Average shares outstanding 274.5 290.8 277.1 294.4 Effect of dilutive stock options and restricted stock awards 1.1 1.3 1.1 1.5 Total potential shares outstanding 275.6 292.1 278.2 295.9 Diluted per share $ 6.29 $ 10.20 $ 21.04 $ 26.35 Shares excluded from EPS calculation, as antidilutive .4 .2 .3 .1
Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Pensions: Service cost $ 56 $ 62 $ 171 $ 186 136 133 410 400 (241) (223) (723) (655) (4) (5) (13) (16) 9 10 29 30 1 2 36 Net benefit $ (43) $ (23) $ (124) $ (19) OPEB: Service cost $ 4 $ 7 $ 13 $ 20 44 44 131 132 (27) (29) (81) (87) (14) (15) (41) (45) (1) (1) (3) (2) Net cost $ 6 $ 6 $ 19 $ 18 During the first nine months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans: Pensions OPEB Contributed $ 74 $ 118 Expected contributions remainder of the year 26 22
Information relating to operations by operating segment follows: Three Months Ended Nine Months Ended July 28 July 30 % July 28 July 30 % 2024 2023 Change 2024 2023 Change Net sales and revenues: Production & precision ag net sales $ 5,099 $ 6,806 -25 $ 16,529 $ 19,826 -17 Small ag & turf net sales 3,053 3,739 -18 8,663 10,886 -20 Construction & forestry net sales 3,235 3,739 -13 10,292 11,053 -7 Financial services revenues 1,489 1,228 +21 4,259 3,375 +26 Other revenues 276 289 -4 829 699 +19 Total net sales and revenues $ 13,152 $ 15,801 -17 $ 40,572 $ 45,839 -11 Operating profit: Production & precision ag $ 1,162 $ 1,782 -35 $ 3,857 $ 5,160 -25 Small ag & turf 496 732 -32 1,393 2,028 -31 Construction & forestry 448 716 -37 1,682 2,179 -23 Financial services 191 286 -33 657 565 +16 Total operating profit 2,297 3,516 -35 7,589 9,932 -24 Reconciling items 62 98 -37 111 29 +283 Income taxes (625) (636) -2 (1,845) (2,164) -15 Net income attributable to Deere & Company $ 1,734 $ 2,978 -42 $ 5,855 $ 7,797 -25 Intersegment sales and revenues: Production & precision ag net sales $ 4 $ 9 -56 $ 18 $ 21 -14 Small ag & turf net sales 2 -100 2 10 -80 Construction & forestry net sales Financial services revenues 178 217 -18 548 612 -10 Operating profit for PPA, SAT, and CF is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit of financial services includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and OPEB benefit (cost) amounts excluding the service cost component, and net income attributable to noncontrolling interests. Identifiable operating assets were as follows: July 28 October 29 July 30 2024 2023 2023 Production & precision ag $ 8,750 $ 8,734 $ 9,523 Small ag & turf 4,079 4,348 4,482 Construction & forestry 7,129 7,139 7,415 Financial services 74,981 70,732 68,850 Corporate 12,902 13,134 13,127 Total assets $ 107,841 $ 104,087 $ 103,397 An analysis of the allowance for credit losses and investment in financing receivables follows: Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 28, 2024 Allowance: Beginning of period balance $ 207 $ 21 $ 2 $ 230 Provision 84 25 109 Provision reversal for assets held for sale (38) (38) Provision subtotal 46 25 71 Write-offs (45) (46) (91) Recoveries 4 8 12 Translation adjustments (3) (3) End of period balance $ 209 $ 8 $ 2 $ 219 Nine Months Ended July 28, 2024 Allowance: Beginning of period balance $ 172 $ 21 $ 4 $ 197 Provision 183 46 229 Provision reversal for assets held for sale (38) (38) Provision subtotal 145 46 191 Write-offs (112) (81) (193) Recoveries 9 22 31 Translation adjustments (5) (2) (7) End of period balance $ 209 $ 8 $ 2 $ 219 Financing receivables: End of period balance $ 38,333 $ 4,583 $ 9,473 $ 52,389 Retail Notes Revolving & Financing Charge Wholesale Leases Accounts Receivables Total Three Months Ended July 30, 2023 Allowance: Beginning of period balance $ 157 $ 19 $ 4 $ 180 Provision 14 11 25 Write-offs (23) (18) (41) Recoveries 5 6 11 Translation adjustments 1 1 End of period balance $ 154 $ 18 $ 4 $ 176 Nine Months Ended July 30, 2023 Allowance: Beginning of period balance $ 299 $ 22 $ 4 $ 325 Provision 59 15 1 75 Provision reversal for assets held for sale (142) (142) Provision (credit) subtotal (83) 15 1 (67) Write-offs (60) (36) (96) Recoveries 15 17 32 Translation adjustments (17) (1) (18) End of period balance $ 154 $ 18 $ 4 $ 176 Financing receivables: End of period balance $ 37,566 $ 4,544 $ 6,369 $ 48,479 Write-offs by year of origination were as follows: Nine Months Ended July 28, 2024 2024 2023 2022 2021 2020 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf $ 2 $ 17 $ 17 $ 6 $ 7 $ 3 $ 75 $ 127 Construction and forestry 2 23 21 8 4 2 6 66 Total retail customer receivables $ 4 $ 40 $ 38 $ 14 $ 11 $ 5 $ 81 $ 193 The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows: July 28, 2024 2024 2023 2022 2021 2020 Prior Years Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 10,349 $ 9,686 $ 5,849 $ 3,286 $ 1,276 $ 394 $ 4,409 $ 35,249 30-59 days past due 37 90 56 28 10 4 31 256 60-89 days past due 15 65 25 12 5 2 10 134 90+ days past due 1 1 2 5 9 Non-performing 12 101 85 59 24 17 15 313 Construction and forestry Current 2,261 2,067 1,249 583 147 60 111 6,478 30-59 days past due 40 59 34 14 4 1 4 156 60-89 days past due 12 25 14 9 2 1 1 64 90+ days past due 1 5 2 2 1 11 Non-performing 21 94 72 38 13 6 2 246 Total retail customer receivables $ 12,748 $ 12,193 $ 7,387 $ 4,033 $ 1,486 $ 486 $ 4,583 $ 42,916 October 29, 2023 2023 2022 2021 2020 2019 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 15,191 $ 8,430 $ 5,120 $ 2,334 $ 853 $ 280 $ 4,526 $ 36,734 30-59 days past due 62 75 39 21 9 3 29 238 60-89 days past due 18 26 18 10 4 2 9 87 90+ days past due 2 1 3 3 9 Non-performing 30 78 62 33 22 22 8 255 Construction and forestry Current 2,927 1,961 1,084 353 84 29 119 6,557 30-59 days past due 49 34 27 9 4 4 127 60-89 days past due 19 14 12 5 2 2 54 90+ days past due 6 1 1 8 Non-performing 42 80 55 23 9 4 1 214 Total retail customer receivables $ 18,340 $ 10,705 $ 6,421 $ 2,791 $ 987 $ 341 $ 4,698 $ 44,283 July 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Charge Accounts Total Retail customer receivables: Agriculture and turf Current $ 10,554 $ 9,701 $ 5,792 $ 2,779 $ 1,080 $ 402 $ 4,388 $ 34,696 30-59 days past due 59 85 53 26 13 4 21 261 60-89 days past due 19 30 17 10 5 1 7 89 90+ days past due 1 1 Non-performing 19 80 71 36 24 27 8 265 Construction and forestry Current 2,167 2,200 1,284 449 124 39 114 6,377 30-59 days past due 39 46 38 13 5 2 4 147 60-89 days past due 12 23 16 8 2 1 1 63 90+ days past due 2 1 1 4 Non-performing 20 83 61 26 11 5 1 207 Total retail customer receivables $ 12,889 $ 12,251 $ 7,333 $ 3,348 $ 1,264 $ 481 $ 4,544 $ 42,110 The credit quality analysis of wholesale receivables by year of origination was as follows: July 28, 2024 2024 2023 2022 2021 2020 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 557 $ 232 $ 36 $ 7 $ 1 $ 1 $ 7,326 $ 8,160 30+ days past due 1 1 Non-performing 1 1 Construction and forestry Current 13 12 4 19 1,260 1,308 30+ days past due 3 3 Non-performing Total wholesale receivables $ 571 $ 244 $ 40 $ 26 $ 1 $ 2 $ 8,589 $ 9,473 October 29, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 631 $ 93 $ 21 $ 4 $ 1 $ 160 $ 5,175 $ 6,085 30+ days past due Non-performing 1 1 Construction and forestry Current 23 5 20 76 712 836 30+ days past due Non-performing Total wholesale receivables $ 654 $ 98 $ 41 $ 4 2 $ 236 $ 5,887 $ 6,922 July 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Wholesale receivables: Agriculture and turf Current $ 449 $ 139 $ 28 $ 7 $ 1 $ 1 $ 4,940 $ 5,565 30+ days past due Non-performing 1 1 Construction and forestry Current 20 6 23 1 1 752 803 30+ days past due Non-performing Total wholesale receivables $ 469 $ 145 $ 51 $ 8 $ 2 $ 2 $ 5,692 $ 6,369 The components of securitization programs were as follows: July 28 October 29 July 30 2024 2023 2023 Financing receivables securitized (retail notes) $ 8,313 $ 7,357 $ 7,019 Allowance for credit losses (39) (22) (18) Other assets (primarily restricted cash) 178 152 153 Total restricted securitized assets $ 8,452 $ 7,487 $ 7,154 Short-term securitization borrowings $ 7,869 $ 6,995 $ 6,608 Accrued interest on borrowings 14 13 15 Total liabilities related to restricted securitized assets $ 7,883 $ 7,008 $ 6,623 July 28 October 29 July 30 2024 2023 2023 Raw materials and supplies $ 3,586 $ 4,080 $ 4,492 Work-in-process 988 1,010 1,307 Finished goods and parts 5,689 5,435 6,164 Total FIFO value 10,263 10,525 11,963 Excess of FIFO over LIFO 2,567 2,365 2,613 Inventories $ 7,696 $ 8,160 $ 9,350 The changes in amounts of goodwill by operating segments were as follows. There were no accumulated goodwill impairment losses. Production & Small Ag Construction Precision Ag & Turf & Forestry Total Goodwill at October 30, 2022 $ 646 $ 318 $ 2,723 $ 3,687 Acquisitions 41 39 80 Translation adjustments 23 8 196 227 Goodwill at July 30, 2023 $ 710 $ 365 $ 2,919 $ 3,994 Goodwill at October 29, 2023 $ 702 $ 363 $ 2,835 $ 3,900 Translation adjustments (1) 2 59 60 Goodwill at July 28, 2024 $ 701 $ 365 $ 2,894 $ 3,960 The components of other intangible assets were as follows: July 28 October 29 July 30 2024 2023 2023 Customer lists and relationships $ 507 $ 501 $ 524 Technology, patents, trademarks, and other 1,413 1,387 1,415 Total at cost 1,920 1,888 1,939 Less accumulated amortization: Customer lists and relationships 222 195 201 Technology, patents, trademarks, and other 668 560 539 Total accumulated amortization 890 755 740 Other intangible assets – net $ 1,030 $ 1,133 $ 1,199 Short-term borrowings were as follows: July 28 October 29 July 30 2024 2023 2023 Commercial paper $ 5,572 $ 9,100 $ 9,003 Notes payable to banks 418 483 352 Finance lease obligations due within one year 31 25 23 Long-term borrowings due within one year 9,273 8,331 7,765 Short-term borrowings $ 15,294 $ 17,939 $ 17,143 Accounts payable and accrued expenses consisted of the following: July 28 October 29 July 30 2024 2023 2023 Accounts payable: Trade payables $ 2,580 $ 3,467 $ 3,308 Dividends payable 407 388 365 258 281 308 Deposits withheld from dealers and merchants 151 163 158 Payables to unconsolidated affiliates 4 6 4 Other 173 153 173 Accrued expenses: Employee benefits 1,802 2,152 1,808 Product warranties 1,513 1,610 1,619 Accrued taxes 1,497 1,558 1,595 Derivative liabilities 582 1,130 948 Dealer sales discounts 846 1,243 902 Extended warranty premium 1,129 1,021 999 Unearned revenue (contractual liability) 766 676 754 Unearned operating lease revenue 480 451 428 Accrued interest 478 434 402 Parts return liability 404 392 378 Other 1,327 1,005 1,191 Accounts payable and accrued expenses $ 14,397 $ 16,130 $ 15,340 Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $2,535 at July 28, 2024, $2,228 at October 29, 2023, and $2,240 at July 30, 2023. Other eliminations were made for accrued taxes and other accrued expenses. Long-term borrowings consisted of: July 28 October 29 July 30 2024 2023 2023 Underwritten term debt U.S. dollar notes and debentures: 2.75% notes due 2025 $ 700 $ 700 6.55% debentures due 2028 $ 200 200 200 5.375% notes due 2029 500 500 500 3.10% notes due 2030 700 700 700 8.10% debentures due 2030 250 250 250 7.125% notes due 2031 300 300 300 3.90% notes due 2042 1,250 1,250 1,250 2.875% notes due 2049 500 500 500 3.75% notes due 2050 850 850 850 Euro notes: 1.85% notes due 2028 (€600 principal) 651 634 659 2.20% notes due 2032 (€600 principal) 651 634 659 1.65% notes due 2039 (€650 principal) 705 687 713 Serial issuances Medium-term notes 36,057 29,638 29,355 Other notes and finance lease obligations 232 1,769 1,605 Less debt issuance costs and debt discounts (154) (135) (129) Long-term borrowings $ 42,692 $ 38,477 $ 38,112 Medium-term notes due through 2034 are primarily offered by prospectus and issued at fixed and variable rates. The principal balances of the medium-term notes were $36,716, $30,902, and $30,348, at July 28, 2024, October 29, 2023, and July 30, 2023, respectively. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other. Lease revenues earned by us follow: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Sales-type and direct finance lease revenues $ 50 $ 41 $ 141 $ 120 Operating lease revenues 358 332 1,039 974 Variable lease revenues 4 13 11 Total lease revenues $ 412 $ 373 $ 1,193 $ 1,105 The reconciliation of the changes in the warranty liability follows: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Beginning of period balance $ 1,566 $ 1,562 $ 1,610 $ 1,427 Warranty claims paid (325) (314) (959) (851) New product warranty accruals 280 363 871 1,006 Foreign exchange (8) 8 (9) 37 End of period balance $ 1,513 $ 1,619 $ 1,513 $ 1,619 The fair values of financial instruments that do not approximate the carrying values were as follows. Long-term borrowings exclude finance lease liabilities. July 28, 2024 October 29, 2023 July 30, 2023 Carrying Fair Carrying Fair Carrying Fair Financing receivables – net $ 43,896 $ 43,713 $ 43,673 $ 42,777 $ 41,302 $ 40,675 Financing receivables securitized – net 8,274 8,139 7,335 7,056 7,001 6,818 Short-term securitization borrowings 7,869 7,872 6,995 6,921 6,608 6,538 Long-term borrowings due within one year 9,273 9,190 8,331 8,156 7,765 7,568 Long-term borrowings 42,617 42,076 38,428 36,873 38,064 37,121 Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings. Assets and liabilities measured at fair value on a recurring basis follow, excluding our cash equivalents, which were carried at a cost that approximates fair value and consisted of money market funds and time deposits. July 28 October 29 July 30 2024 2023 2023 Level 1 Marketable securities: International equity securities $ 3 $ 3 International mutual funds securities 101 U.S. equity fund 86 101 U.S. fixed income fund 32 85 U.S. government debt securities $ 413 78 63 Total Level 1 marketable securities 413 300 252 Level 2 Marketable securities: Corporate debt securities 220 244 221 International debt securities 145 1 2 Mortgage-backed securities 154 185 163 Municipal debt securities 69 75 69 U.S. government debt securities 127 141 134 Total Level 2 marketable securities 715 646 589 Other assets – Derivatives 361 292 324 Accounts payable and accrued expenses – Derivatives 582 1,130 948 Level 3 Accounts payable and accrued expenses – Deferred consideration 153 186 202 The mortgage-backed securities are primarily issued by U.S. government-sponsored enterprises. The contractual maturities of available-for-sale debt securities at July 28, 2024 follow: Amortized Fair Cost Value Due in one year or less $ 21 $ 21 Due after one through five years 299 258 Due after five through 10 years 557 540 Due after 10 years 185 155 Mortgage-backed securities 182 154 Debt securities $ 1,244 $ 1,128 Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity. Fair value, nonrecurring Level 3 measurements from impairments were as follows: Fair Value Losses Three Months Ended Nine Months Ended July 28 October 29 July 30 July 28 July 30 July 28 July 30 2024 2023 2023 2024 2023 2024 2023 Assets held for sale $ 2,965 $ 53 $ 53 Fair values of our derivative instruments and the associated notional amounts were as follows. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.” July 28, 2024 October 29, 2023 July 30, 2023 Fair Value Fair Value Fair Value Notional Assets Liabilities Notional Assets Liabilities Notional Assets Liabilities Cash flow hedges: Interest rate contracts $ 3,475 $ 14 $ 18 $ 1,500 $ 45 $ 1,500 $ 48 $ 3 Fair value hedges: Interest rate contracts 15,165 119 486 12,691 $ 970 12,160 4 729 Cross-currency interest rate contracts 975 16 Not designated as hedging instruments: Interest rate contracts 13,656 103 59 13,853 169 98 13,233 221 109 Foreign exchange contracts 7,529 99 16 8,117 75 54 8,630 51 82 Cross-currency interest rate contracts 190 10 3 176 3 8 155 25 The amounts recorded in the consolidated balance sheets related to borrowings designated in fair value hedging relationships were as follows. Fair value hedging adjustments are included in the carrying amount of the hedged item. Active Hedging Relationships Discontinued Hedging Relationships Carrying Amount Cumulative Fair Value Carrying Amount of Cumulative Fair Value of Hedged Item Hedging Amount Formerly Hedged Item Hedging Amount July 28, 2024 Short-term borrowings $ 286 $ (4) $ 1,458 $ 9 Long-term borrowings 15,386 (394) 8,414 (264) October 29, 2023 Short-term borrowings $ 1,814 $ 15 Long-term borrowings 11,660 $ (976) 7,144 (288) July 30, 2023 Short-term borrowings $ 2,324 $ 25 Long-term borrowings $ 11,379 $ (728) 6,319 (265) The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following: Three Months Ended Nine Months Ended July 28 July 30 July 28 July 30 2024 2023 2024 2023 Fair Value Hedges Interest rate contracts – Interest expense* $ 373 $ (375) $ 269 $ (146) Cash Flow Hedges Recognized in OCI: Interest rate contracts – OCI (pretax) $ (15) $ 24 $ 3 $ 19 Reclassified from OCI: Interest rate contracts – Interest expense 22 18 49 52 Not Designated as Hedges Interest rate contracts – Net sales $ 6 Interest rate contracts – Interest expense* $ 4 48 $ 2 $ 45 Foreign exchange contracts – Net sales (3) 3 2 Foreign exchange contracts – Cost of sales 36 (78) 15 (14) Foreign exchange contracts – Other operating expenses* 17 (142) (118) (157) Total not designated $ 54 $ (163) $ (101) $ (124) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral follows: Gross Amounts Netting Recognized Arrangements Collateral Net Amount July 28, 2024 Assets $ 361 $ (154) $ 207 Liabilities 582 (154) $ (269) 159 October 29, 2023 Assets $ 292 $ (152) $ 140 Liabilities 1,130 (152) $ (659) 319 July 30, 2023 Assets $ 324 $ (160) $ (28) $ 136 Liabilities 948 (160) (435) 353 During the nine months ended July 28, 2024, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date, in dollars follow: Grant Date Shares Fair Value Service-based 378 $ 377.37 Performance/service-based 52 360.53 Market/service-based 52 370.87 The programs’ total pretax expenses are estimated to be approximately $150, with $124 recorded in the third quarter of 2024. The remaining expenses are expected to be recorded primarily in 2025. Payments made during the third quarter of 2024 with respect to these program expenses totaled $30. The expenses for the three months and nine months ended July 28, 2024 were recorded as follows: PPA SAT CF FS Total Employee-Separation Programs: Cost of sales $ 18 $ 9 $ 8 $ 35 Research and development expenses 19 6 1 26 Selling, administrative and general expenses 25 14 11 $ 9 59 Total operating profit decrease $ 62 $ 29 $ 20 $ 9 120 Non-operating profit expenses* 4 Total $ 124 * Relates primarily to corporate expenses. The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows: July 28 2024 Cash and cash equivalents $ 107 Trade accounts and notes receivable – net 231 Financing receivables – net 2,624 Deferred income taxes 42 Other miscellaneous assets* 14 Valuation allowance (53) Total assets held for sale $ 2,965 Short-term borrowings 563 Accounts payable and accrued expenses 101 Long-term borrowings 1,137 Retirement benefits and other liabilities 2 Total liabilities held for sale $ 1,803 Total intercompany payables $ 673 * Includes $1 restricted cash balance. The following table summarizes the operating profit impact of the special items recorded for the three months and nine months ended July 28, 2024 and July 30, 2023. Three Months Ended Nine Months Ended PPA SAT CF FS Total PPA SAT CF FS Total 2024 Expense: Employee-separation programs $ 62 $ 29 $ 20 $ 9 $ 120 $ 62 $ 29 $ 20 $ 9 $ 120 BJD remeasurement 15 15 15 15 Total 2024 expense 62 29 20 24 135 62 29 20 24 135 2023 Expense: Financing incentives correction 173 173 Period over period change $ 62 $ 29 $ 20 $ 24 $ 135 $ 62 $ 29 $ 20 $ (149) $ (38)
7Y.5PW NQ5.8?%W_/1ZN
M.;O%T&P^<'$7_QIM+I1F$?DK3$_'!J[8 F\NX$Y4)!COE6?T(6Q(9C@"BDABBQ13&)
M0]BUX.!:X'3M6JU$T?(#')O NC$AH3DV@"BH=H^."[:(8AS!+H0'%T*G"S.]
M/C8ZQ2JD\Z-.] 57:?Z ,J'37-D_+J$=\G97=D[9HB#&H>$4( J]&'8J.C@5
M.9VZR!^U1[+H62V1W?D@-E;"U!9%>H,R.F^+8NI[<.?C0^=C9^>_%-4PJ.=Z
MI8C#\/0.16Q[X\7$\,86!5%H+A% Q/KF%_::W.\Y_?E=RN63SN5@'O?L*1V;
M49Z"*L\<"U 5LY[NM] %'['&TUSQ_"&M]BI>ED(YEL;>7F *EJGX$V0J*N1V.^?M)5 I"DH34)J$TA0GUL%UA%PK5AR[).WH
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M#T[M/IUC0NP--% \!FX0(/V
MO?%VJ>/?M]X@CTBW=XQHZ':H'(RQY)8?EQ6O:?'^\\6R:A)#YJF)RUM;0Y5_
M+V\Y ^\<^XKYI=S)(SN2S,
MR+,5EQGK$@KT3X$^"-?^'GPWLM$\2ZJ-8U2*>XD:=7=U2-YG>.,,Y+$*K*N3
MZ4 =]+"DZ%)$#J>H89%85YX)TZY8LBM 3_'Y5T%% '*+\/K4-DW,I'I@5I
MV'A33K!@RP^8X_BD.:V** $ &!P*6BB@ HHHH *YWQU?:=I^A^;JEI]MM?-
M4>5_M
C&OH#X?^,=4L
M?C+XZ^'VMWCW[6\-OXCT>YD #?8+EI(V@8CJ8IX9 #_R98+657:V%/%L5U927]M$Q>!)&;9+L(W'@GC&>>E:FO?'C
MPO\ #S0_ACX;\':A+XKM?"NJ'5;K4Y;1K43$N28D1_F'RNPS]* .R\3>$O"'
MQ(TOXP^&M.\%Z/X?N/!"QRZ5J.FP^5<2A0X<3O\ QYV=_7U&:XC_ ()^?\EY
ME_[ ]Q_Z'%6WXM^,_P .?#6B_$[5O".NWVL:_P"/!''_ &?+8O --7#%]SL-
MK\N?ND]O \4>(?AW8.\*^!K^^\<6RPC9MGEQ
M)IZ8Z%3)->OZ;H5JK8>/KO4M-'BK3K[4-*U7XD:M?:O!+'J5MIMM#86D,-K"
M;FZFCD945(A((X8I&9IF)& Q'V>ME;K<2W MXA/,H224(-SJ,X!/4@9/!]35
M.Y\+Z->VUI;W&D6,]O:,'MXI;9&6%AT* C"GW% 'Q)H7Q=^(OC+X,6?BJ7QK
MJ&GZK;>!='U(K:10K'+>W,IBEED4H0,$ ;\6?VH--^%
MFJ3:5>^'=7BN9B]O8:C/]E6UGN/)=T'E?:!
,\\UZ#0!$]M#+-%,\2/+
M%GRY&4%DSUP>V:EHHH *YCQM\0M,\"1V*7D=Y?:A?R&*RTW3;
3 LDTZ0J
M\LF#LC4R!F;!PH- 'H5%?/WPF^,OQ$U;P;XMUOQ)X;T_Q#;:9'>3:==>$I3*
M;^2&:5/LJPDE]Y"*5<95@PZ&KOA[XQ^.-"^(W@[PU\0=&T.S3Q=8W=U9-HT\
MIEL)+>)99(KA)/O#8Q'F)@!EP0-PH ]THKYH^!/[1'B[XQ:UI,KZI\/+73;T
MRW#:%!>S/K4=J&<1L8]VT,P",>,8:OI>@ HHHH **** "OA?]H31=3TGXS>*
M/%/P_P!?\/>))9-0LU\3^#?$5J=D4\6FOY8$V.(Y+8M&K/&K7"21+ @WDO@D\8('-<]'\#O'?PU\7^+=1\%#0O
M$=GXKTC3M.N_^$BN989;22TMC;*ZE(W\V-E(8QG;\V[GYJY'Q?\ LV_$VW\+
M?#CX?:4F@^+?AKX;TB],UC59[(ZO=H>%F5(9,VZX!$><'@$87D W]"^/?
MBV#X"^"OBCJUW%
$ in Millions3 Months Ended
9 Months Ended
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
Net Income
$ 1,731
$ 2,972
$ 5,846
$ 7,787
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment
(21)
(9)
(129)
(267)
Cumulative translation adjustment
(170)
144
(113)
925
Unrealized gain (loss) on derivatives
(29)
5
(36)
(26)
Unrealized gain (loss) on debt securities
23
(13)
24
13
Other Comprehensive Income (Loss), Net of Income Taxes
(197)
127
(254)
645
Comprehensive Income of Consolidated Group
1,534
3,099
5,592
8,432
Less: Comprehensive income (loss) attributable to noncontrolling interests
(3)
(5)
(8)
2
Comprehensive Income Attributable to Deere & Company
$ 1,537
$ 3,104
$ 5,600
$ 8,430
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share) | $ / shares
$ 1
Common stock, issued shares | shares
536,431,204
9 Months Ended
ORGANIZATION AND CONSOLIDATION
ORGANIZATION AND CONSOLIDATION
9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS
9 Months Ended
REVENUE RECOGNITION
REVENUE RECOGNITION
& Forestry
Services
& Forestry
Services
& Forestry
Services
& Forestry
Services
9 Months Ended
OTHER COMPREHENSIVE INCOME ITEMS
OTHER COMPREHENSIVE INCOME ITEMS
9 Months Ended
EARNINGS PER SHARE
EARNINGS PER SHARE
9 Months Ended
PENSION AND OTHER POSTRETIREMENT BENEFITS
PENSION AND OTHER POSTRETIREMENT BENEFITS
9 Months Ended
SEGMENT DATA
SEGMENT DATA
9 Months Ended
FINANCING RECEIVABLES
FINANCING RECEIVABLES
● Past due balances represent any payments 30 days or more past the due date. ● Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are 90 days delinquent. ● Write-offs generally occur when receivables are 120 days delinquent. In these situations, the estimated uncollectible amount is written off to the allowance for credit losses. Any expected recovery is presented as non-performing.
Years
Years
Years
Years
Years
9 Months Ended
SECURITIZATION OF FINANCING RECEIVABLES
SECURITIZATION OF FINANCING RECEIVABLES
1. We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE). 2. The SPE issues debt to investors. The debt is secured by the financing receivables. 3. Investors are paid back based on cash receipts from the financing receivables.
9 Months Ended
INVENTORIES
INVENTORIES
9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS - NET
GOODWILL AND OTHER INTANGIBLE ASSETS - NET
9 Months Ended
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS
9 Months Ended
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
9 Months Ended
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS
9 Months Ended
LEASES - LESSOR
LEASES - LESSOR
9 Months Ended
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
9 Months Ended
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
Value
Value
Value
Value
Value
Value
9 Months Ended
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS
9 Months Ended
SHARE-BASED AWARDS
SHARE-BASED AWARDS
9 Months Ended
DISPOSITION
DISPOSITION
9 Months Ended
SPECIAL ITEMS
SPECIAL ITEMS
9 Months Ended
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
$ in Millions3 Months Ended
9 Months Ended
Pay vs Performance Disclosure
Net Income (Loss)
$ 1,734
$ 2,978
$ 5,855
$ 7,797
3 Months Ended
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted
false
Non-Rule 10b5-1 Arrangement Adopted
false
Rule 10b5-1 Arrangement Terminated
false
Non-Rule 10b5-1 Arrangement Terminated
false
9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS
Fiscal Period, Policy
Use of Estimates in Financial Statements, Policy
New Accounting Pronouncements, Policy
Financing Receivables - Allowance for Credit Losses, Policy
● Past due balances represent any payments 30 days or more past the due date. ● Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are 90 days delinquent. ● Write-offs generally occur when receivables are 120 days delinquent. In these situations, the estimated uncollectible amount is written off to the allowance for credit losses. Any expected recovery is presented as non-performing.
Securitization of Financing Receivables, Policy
1. We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE). 2. The SPE issues debt to investors. The debt is secured by the financing receivables. 3. Investors are paid back based on cash receipts from the financing receivables.
9 Months Ended
REVENUE RECOGNITION
Schedule of Revenue Recognition
& Forestry
Services
& Forestry
Services
& Forestry
Services
& Forestry
Services
9 Months Ended
OTHER COMPREHENSIVE INCOME ITEMS
Schedule of After-Tax Components of Accumulated Other Comprehensive Income (Loss)
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects
9 Months Ended
EARNINGS PER SHARE
Reconciliation of Basic and Diluted Net Income Per Share
9 Months Ended
PENSION AND OTHER POSTRETIREMENT BENEFITS
Schedule of Components of Net Periodic Pension and OPEB (Benefit) Cost
The components of net periodic pension and OPEB (benefit) cost consisted of the following:
Schedule of Pension and OPEB Contributions and Expected Contributions
9 Months Ended
SEGMENT DATA
Schedule of Segment Reporting Information
9 Months Ended
Financing Receivables
Analysis of the Allowance for Credit Losses and Investment in Financing Receivables
Write-offs by Year of Origination
Retail Customer Receivables
Financing Receivables
Credit Quality Analysis
Years
Years
Wholesale Receivables
Financing Receivables
Credit Quality Analysis
Years
Years
Years
9 Months Ended
SECURITIZATION OF FINANCING RECEIVABLES
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions
9 Months Ended
INVENTORIES
Major Classification of Inventories
If all inventories had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows:
9 Months Ended
GOODWILL AND OTHER INTANGIBLE ASSETS - NET
Changes in Goodwill by Operating Segments
Components of Other Intangible Assets
9 Months Ended
SHORT-TERM BORROWINGS
Short-Term Borrowings
9 Months Ended
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts Payable and Accrued Expenses
9 Months Ended
LONG-TERM BORROWINGS
Long-Term Borrowings
9 Months Ended
LEASES - LESSOR
Schedule of Lease Revenues Earned
9 Months Ended
COMMITMENTS AND CONTINGENCIES
Warranty Reconciliation
9 Months Ended
FAIR VALUE MEASUREMENTS
Fair Values of Financial Instruments
Value
Value
Value
Value
Value
Value
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Contractual Maturities of Debt Securities
Fair Value, Nonrecurring Level 3 Measurements from Impairments
9 Months Ended
DERIVATIVE INSTRUMENTS
Fair Values of Derivative Instruments in Consolidated Balance Sheets
Amounts Recorded in the Consolidated Balance Sheets Related to Borrowings Designated in Fair Value Hedging Relationships
Gains (Losses) Related to Derivative Instruments on Statements of Consolidated Income
Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral
9 Months Ended
SHARE-BASED AWARDS
Restricted Stock Units Granted and Weighted-Average Grant Date Fair Values
9 Months Ended
SPECIAL ITEMS
Schedule of Employee-Separation Programs' Pretax Expenses
Schedule of Consolidated Assets and Liabilities Classified as Held for Sale and Other Intercompany Payables
Schedule of Special Items
3 Months Ended
9 Months Ended
ORGANIZATION AND CONSOLIDATION
Fiscal period duration
91 days
91 days
273 days
273 days
$ in Millions3 Months Ended
9 Months Ended
Deferred Revenue
Deferred revenue received
$ 1,895
$ 1,753
$ 1,895
$ 1,753
$ 1,697
Revenue recognized from deferred revenue
$ 126
$ 96
$ 484
$ 440
$ / shares in Units, shares in Millions, $ in Millions3 Months Ended
9 Months Ended
EARNINGS PER SHARE
Net income attributable to Deere & Company
$ 1,734
$ 2,978
$ 5,855
$ 7,797
Average shares outstanding
274.5
290.8
277.1
294.4
Basic (in dollars per share)
$ 6.32
$ 10.24
$ 21.13
$ 26.48
Diluted Earnings Per Share
Average shares outstanding
274.5
290.8
277.1
294.4
Effect of dilutive stock options and restricted stock awards (in shares)
1.1
1.3
1.1
1.5
Total potential shares outstanding
275.6
292.1
278.2
295.9
Diluted (in dollars per share)
$ 6.29
$ 10.20
$ 21.04
$ 26.35
Shares excluded from EPS calculation, as antidilutive
0.4
0.2
0.3
0.1
$ in Millions3 Months Ended
9 Months Ended
Pensions
Net Periodic (Benefit) Cost
Service cost
$ 56
$ 62
$ 171
$ 186
Interest cost
$ 136
$ 133
$ 410
$ 400
Location of interest cost
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Expected return on plan assets
$ (241)
$ (223)
$ (723)
$ (655)
Location of expected return on plan assets
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Amortization of actuarial gain
$ (4)
$ (5)
$ (13)
$ (16)
Location of amortization of actuarial gain
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Amortization of prior service (credit) cost
$ 9
$ 10
$ 29
$ 30
Location of amortization of prior service (credit) cost
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Settlements
$ 1
$ 2
$ 36
Location of settlements
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Net (benefit) cost
$ (43)
$ (23)
$ (124)
$ (19)
OPEB
Net Periodic (Benefit) Cost
Service cost
4
7
13
20
Interest cost
$ 44
$ 44
$ 131
$ 132
Location of interest cost
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Expected return on plan assets
$ (27)
$ (29)
$ (81)
$ (87)
Location of expected return on plan assets
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Amortization of actuarial gain
$ (14)
$ (15)
$ (41)
$ (45)
Location of amortization of actuarial gain
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Amortization of prior service (credit) cost
$ (1)
$ (1)
$ (3)
$ (2)
Location of amortization of prior service (credit) cost
Other operating expenses
Other operating expenses
Other operating expenses
Other operating expenses
Net (benefit) cost
$ 6
$ 6
$ 19
$ 18
$ in Millions9 Months Ended
Pensions
Employer Contributions
Contributed
$ 74
Expected contributions remainder of the year
26
OPEB
Employer Contributions
Contributed
118
Expected contributions remainder of the year
$ 22
9 Months Ended
FINANCING RECEIVABLES
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false]
false
Threshold for past due balances
30 days
Generally the threshold for a financing receivable to be considered non-performing
90 days
Generally the threshold when a receivable is delinquent and the estimated uncollectible amount is written off
120 days
$ in Millions3 Months Ended
9 Months Ended
Write-offs by Year of Origination
Total
$ 91
$ 41
$ 193
$ 96
Retail Customer Receivables
Write-offs by Year of Origination
2024
4
2023
40
2022
38
2021
14
2020
11
Prior Years
5
Revolving Charge Accounts
81
Total
193
Retail Customer Receivables | Agriculture and Turf
Write-offs by Year of Origination
2024
2
2023
17
2022
17
2021
6
2020
7
Prior Years
3
Revolving Charge Accounts
75
Total
127
Retail Customer Receivables | Construction and Forestry
Write-offs by Year of Origination
2024
2
2023
23
2022
21
2021
8
2020
4
Prior Years
2
Revolving Charge Accounts
6
Total
$ 66
$ in Millions3 Months Ended
9 Months Ended
Modifications
Amortized cost of modified loans
$ 23
$ 67
Modifications (as a percent)
0.04%
0.13%
30-59 Days Past Due
Modifications
Amortized cost of modified loans
$ 4
60-89 Days Past Due
Modifications
Amortized cost of modified loans
3
90 Days or Greater Past Due
Modifications
Amortized cost of modified loans
1
Current
Modifications
Amortized cost of modified loans
56
Non-performing
Modifications
Amortized cost of modified loans
$ 3
$ in Millions
Securitization of Financing Receivables
Other assets
$ 2,903
$ 2,503
$ 2,659
Total Assets
107,841
104,087
103,397
Short-term securitization borrowings
7,869
6,995
6,608
Accrued interest on borrowings - securitization transactions
14
13
15
Total liabilities related to restricted securitized assets
7,883
7,008
6,623
Securitized
Securitization of Financing Receivables
Financing receivables securitized (retail notes)
8,313
7,357
7,019
Allowance for credit losses
(39)
(22)
(18)
Other assets
178
152
153
Total Assets
$ 8,452
$ 7,487
$ 7,154
$ in Millions
INVENTORIES
Inventory cost methods
us-gaap:CostMethodFifoMember, us-gaap:CostMethodLifoMember
us-gaap:CostMethodFifoMember, us-gaap:CostMethodLifoMember
us-gaap:CostMethodFifoMember, us-gaap:CostMethodLifoMember
Raw materials and supplies
$ 3,586
$ 4,080
$ 4,492
Work-in-process
988
1,010
1,307
Finished goods and parts
5,689
5,435
6,164
Total FIFO value
10,263
10,525
11,963
Excess of FIFO over LIFO
2,567
2,365
2,613
Inventories
$ 7,696
$ 8,160
$ 9,350
$ in Millions9 Months Ended
Changes in Amounts of Goodwill
Goodwill - net, beginning balance
$ 3,900
$ 3,687
Acquisitions
80
Translation adjustments
60
227
Goodwill - net, ending balance
3,960
3,994
Production & Precision Ag (PPA)
Changes in Amounts of Goodwill
Goodwill - net, beginning balance
702
646
Acquisitions
41
Translation adjustments
(1)
23
Goodwill - net, ending balance
701
710
Small Ag & Turf (SAT)
Changes in Amounts of Goodwill
Goodwill - net, beginning balance
363
318
Acquisitions
39
Translation adjustments
2
8
Goodwill - net, ending balance
365
365
Construction & Forestry (CF)
Changes in Amounts of Goodwill
Goodwill - net, beginning balance
2,835
2,723
Translation adjustments
59
196
Goodwill - net, ending balance
$ 2,894
$ 2,919
$ in Millions
Amortized intangible assets:
Total at cost
$ 1,920
$ 1,888
$ 1,939
Total accumulated amortization
890
755
740
Other intangible assets - net
1,030
1,133
1,199
Customer Lists and Relationships
Amortized intangible assets:
Total at cost
507
501
524
Total accumulated amortization
222
195
201
Technology, Patents, Trademarks and Other
Amortized intangible assets:
Total at cost
1,413
1,387
1,415
Total accumulated amortization
$ 668
$ 560
$ 539
$ in Millions3 Months Ended
9 Months Ended
Amortized Intangible Assets:
Amortization expense of other intangible assets
$ 41
$ 42
$ 124
$ 126
Amortization expense of other intangible assets - remainder of 2024
49
49
Amortization expense of other intangible assets - 2025
145
145
Amortization expense of other intangible assets - 2026
121
121
Amortization expense of other intangible assets - 2027
119
119
Amortization expense of other intangible assets - 2028
87
87
Amortization expense of other intangible assets - 2029
$ 74
$ 74
$ in Millions
Short-term borrowings
Short-term borrowings
$ 15,294
$ 17,939
$ 17,143
Commercial Paper
Short-term borrowings
Short-term borrowings
5,572
9,100
9,003
Notes Payable to Banks
Short-term borrowings
Short-term borrowings
418
483
352
Finance Lease Obligations Due Within One Year
Short-term borrowings
Short-term borrowings
31
25
23
Long-term Borrowings Due Within One Year
Short-term borrowings
Short-term borrowings
$ 9,273
$ 8,331
$ 7,765
$ in Millions3 Months Ended
9 Months Ended
LEASES - LESSOR
Sales-type and direct finance lease revenues
$ 50
$ 41
$ 141
$ 120
Operating lease revenues
358
332
1,039
974
Variable lease revenues
4
13
11
Total lease revenues
$ 412
$ 373
$ 1,193
$ 1,105
$ in Millions3 Months Ended
9 Months Ended
Warranty Liability Reconciliation
Beginning of period balance
$ 1,566
$ 1,562
$ 1,610
$ 1,427
Warranty claims paid
(325)
(314)
(959)
(851)
New product warranty accruals
280
363
871
1,006
Foreign exchange
(8)
8
(9)
37
End of period balance
$ 1,513
$ 1,619
$ 1,513
$ 1,619
$ in Millions9 Months Ended
Long Term Purchase Commitments
Commitments for the construction and acquisition of property and equipment
$ 585
Restricted Assets and Other Miscellaneous Contingent Liabilities and Guarantees
Other miscellaneous contingent liabilities and guarantees
130
Accrued other miscellaneous contingent liabilities and guarantees
20
Other Assets
Restricted Assets and Other Miscellaneous Contingent Liabilities and Guarantees
Restricted assets
234
Guarantees, Third-party Receivables
Guarantee Obligations
Guarantee obligations maximum exposure
$ 151
$ in Millions
Contractual Maturities of Debt Securities, Amortized Cost
Amortized cost, due in one year or less
$ 21
Amortized cost, due after one through five years
299
Amortized cost, due after five through 10 years
557
Amortized cost, due after 10 years
185
Amortized cost, mortgage-backed securities
182
Amortized cost, debt securities
1,244
Contractual Maturities of Debt Securities, Fair Value
Fair value, due in one year or less
21
Fair value, due after one through five years
258
Fair value, due after five through 10 years
540
Fair value, due after 10 years
155
Fair value, mortgage-backed securities
154
Fair value, debt securities
$ 1,128
$ in Millions3 Months Ended
9 Months Ended
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets held for sale
$ 2,965
$ 2,965
Losses, Assets held for sale
53
Fair Value, Nonrecurring Measurements | Level 3
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets held for sale
2,965
2,965
Losses, Assets held for sale
$ 53
$ 53
$ in Millions
Active Hedging Relationships
Carrying Amount of Hedged Item
$ 11,660
$ 11,379
Location of hedged item
Long-term borrowings
Long-term borrowings
Short-term Borrowings
Active Hedging Relationships
Carrying Amount of Hedged Item
$ 286
Cumulative Fair Value Hedging Amount
(4)
Discontinued Hedging Relationships
Carrying Amount of Formerly Hedged Item
1,458
$ 1,814
$ 2,324
Cumulative Fair Value Hedging Amount - Discontinued
9
15
25
Long-term Borrowings
Active Hedging Relationships
Carrying Amount of Hedged Item
15,386
Cumulative Fair Value Hedging Amount
(394)
(976)
(728)
Discontinued Hedging Relationships
Carrying Amount of Formerly Hedged Item
8,414
7,144
6,319
Cumulative Fair Value Hedging Amount - Discontinued
$ (264)
$ (288)
$ (265)
$ in Millions
Derivative instruments
Fair value of derivatives with credit-risk-related contingent features in a liability position
$ 566
$ 1,076
$ 865
Cash collateral posted
269
659
435
Derivative Assets
Gross amounts recognized
361
292
324
Netting arrangements
(154)
(152)
(160)
Collateral received
(28)
Net amount
207
140
136
Derivative Liabilities
Gross amounts recognized
582
1,130
948
Netting arrangements
(154)
(152)
(160)
Collateral paid
(269)
(659)
(435)
Net amount
159
319
353
International Futures Market
Derivative instruments
Collateral paid to participate in an international futures market
$ 8
$ 8
$ 8
shares in Thousands1 Months Ended
Share-based Awards, Aggregate Disclosures
Number of outstanding shares authorized for grant related to stock options and restricted stock units
14,900
Stock Options
Share-based Awards, Aggregate Disclosures
Options granted (in shares)
216
Options granted, exercise price (in dollars per share)
$ 377.01
Options granted, fair value (in dollars per share)
$ 98.04
Options outstanding (in shares)
1,700
Options outstanding, weighted-average exercise price (in dollars per share)
$ 228.10
Fair value assumption method used
us-gaap:BinomialModelMember
$ in Millions
Disposition
Total assets
$ 2,965
Total liabilities
$ 1,803
Sale of Financial Services Business in Russia | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Financial Services (FS)
Disposition
Total proceeds, net of restricted cash sold
$ 36
Total assets
31
Total liabilities
5
Cumulative translation loss
$ (10)
$ in Millions3 Months Ended
Redeemable Noncontrolling Interest
Noncontrolling interest redemption (as a percent)
20.00%
Noncontrolling interest redemption gain or loss
$ 0
$ in Millions3 Months Ended
9 Months Ended
Special Items
Provision (credit) for income taxes
$ 625
$ 636
$ 1,845
$ 2,164
Brazil | Foreign Tax Authority
Special Items
Provision (credit) for income taxes
(243)
Interest income
$ 47
$ in Millions
3 Months Ended
9 Months Ended
Financial Services Financing Incentives
Selling, administrative and general expenses
$ 1,278
$ 1,110
$ 3,608
$ 3,392
Revision of Prior Period, Error Correction, Adjustment | Financial Services (FS)
Financial Services Financing Incentives
Selling, administrative and general expenses
$ 173
Financing incentives correction, after-tax
$ 135
Type of error correction
de:CorrectionOfTimingAndExpenseClassificationForPortionOfFinancialServicesIncentiveProgramsMember
Error Correction, Previously Immaterial [true false]
true
1 Months Ended
Subsequent Events | Financial Services (FS)
Subsequent Events
Percentage of ownership to be sold (as a percent)
50.00%
1 Months Ended
3 Months Ended
9 Months Ended
Subsequent Events
Quarterly dividend declared (in dollars per share)
$ 1.47
$ 1.25
$ 4.41
$ 3.70
Subsequent Events | Third Quarter 2024 Dividend
Subsequent Events
Dividend declared date
Aug. 28, 2024
Quarterly dividend declared (in dollars per share)
$ 1.47
Dividend payable date
Nov. 08, 2024
Stockholders of record date
Sep. 30, 2024
7^7H%_0
MGZL8_?3#SZC>LHK7*"O079;G,LSU!_3#Z>WE0LA/:H@7Z^/K;[O7DXG74W17
M%F);HZ1(>0JTC\WM(T/[A71%[P_RYH];8B3\_9#/$0D_(.(0%_B>Y3N:4Z=M
M3B%S_K^W)__X[2-GT#XY:,M')_@^RX%JQ7(9
2G?#(>9"@52>9RYS2.6'M,>3
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MB3.9&_.#7R;I2:?/ TUS%KJ;;NJU9%UIE$4W%+G^361_X+@/J$YDS
MD5L^8I9%Z;E!J['U,\=P/,ULPD&$Z\=_F710#/M-S<_D,HRF.&];S34\>*LP
MHE@XMUKSG4:&E[UU(Z^9J6WQ$"V1ACMZJ(<1%M/H"D"!.PKD)^L++ZZJ36&U
M[,7A$BICIG(P7F-N@JFDXH!X'=?N+SJ^IH\_#;B*OB$@=G197XW;W M6V-IC
MH&Y1VDNMFJMS=)Z!<@2'&9!Z37/;:[)=,UA;O":>8?\UR[5E^):":X9_:=_V
M$=UWKA( 5U,.C_Z9P*D%1JZ:YN?B>.L'8:_U70!
GO^_G J@+"LGB8;(F\Z(G2$2(S>
ME858UNBL2'FJ]Y^"0+U4="O5&WHKP?\T^4M$(XRH0[U;Z+G]*-V6GONP479$
M/#L1:1ZOZC5+^-$$]+_FU26?'+_XA03.ZUM$]'H1O=NH[RKB[41^=?^%7OP2
MD=A_O4G0!;_D1<,A3323\N* IO/Q@X'7*"U'!DFYX2=LX??O1
M,AABE"D2][25J2(#=U>9GC^9R$#K5KS*$G,B(\_D0ZAOE+G.4!:K8W.#H>*D
MSAA&)W/)":/SA+-"%L@QOLO2-.?HC-7"I.V; W,#2YECEOGF,L#:!D.I;D '
MR,=46;H#Y&)"(RU/8U?)$ZSJ&N2A@X7I/YV^,_SN/^ 2%*_'%J $$/