--- ticker: DE company: Deere & Company filing_type: 10-K year_current: 2023 year_prior: 2022 risks_added: 32 risks_removed: 34 risks_modified: 61 risks_unchanged: 9 source: SEC EDGAR url: https://riskdiff.com/de/2023-vs-2022/ markdown_url: https://riskdiff.com/de/2023-vs-2022/index.md generated: 2026-06-01 --- # Deere & Company: 10-K Risk Factor Changes 2023 vs 2022 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 32 | | Risks removed | 34 | | Risks modified | 61 | | Unchanged | 9 | --- ## New in Current Filing: Increasingly stringent engine emission regulations or bans on internal combustion engines may impact our ability to manufacture and distribute certain engines or equipment, which could negatively affect business results. Our equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard, which limits the amount of certain substances in exhaust gases that off-road engines can emit into the environment. Governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines we manufacture, including those used in agriculture and CF equipment. We have incurred, and continue to incur, substantial research and development costs related to the implementation of these more rigorous laws and regulations. While we have developed and are executing comprehensive plans to meet these requirements, these plans are subject to variables that could delay or otherwise affect our ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned, or may in the future ban, internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by us, our business, results of operations, and financial condition could be negatively affected. --- ## New in Current Filing: Our business may suffer if our equipment fails to perform as expected. If our equipment does not perform as expected, we may receive warranty claims and have to perform post-sales repairs or recalls. We may also be subject to regulatory requirements and penalties that will impact our ability to develop, market, and sell equipment. This may result in product delivery delays. It could also lead to product liability, breach of warranty, and consumer protection claims. These claims and warranty expenses could be significant. As a manufacturer of equipment, we must manage the cost and risk associated with product warranties, post-sale repairs and recalls, regulatory penalties, and product liability, breach of warranty, and consumer protection claims with respect to our products. In addition to post-sale repairs or recalls initiated by us for various reasons, investigations into our products by government regulators may compel us to initiate product recalls or may result in negative public perceptions about the safety of our products, even if we disagree with the regulator's determination. Such post-sale repairs or recalls, whether voluntary or involuntary, could result in significant expense, supply chain complications, and may harm our brand, business, prospects, financial condition, and operating results. --- ## New in Current Filing: Any unauthorized control or manipulation of our products' systems could result in loss of confidence in us and our products. Some of our products include connectivity hardware and software typically used for remote system updates. While we have implemented security measures intended to protect against unauthorized remote access to these products, malicious threat actors have attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to our products, systems, and data, regardless of their reliability, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of our products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against us, government investigations, liability, or regulatory penalties, which could adversely affect our business, results of operations, and financial condition. --- ## New in Current Filing: Our reputation and brand could be damaged by negative publicity. Our brand has worldwide recognition and significantly contributes to the success of our business. Our reputation is critical to growing our customer base. Our brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving us, our products or services, our culture and values, our stance on environmental, social, and governance topics, customer data, or any of our key employees or suppliers, could damage our reputation and brand image, regardless of whether such claims are accurate. In addition, our stance on environmental, social, and governance topics damage to our reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. For example, we have been the subject of negative media articles relating to our customers' right to maintain and safely repair their equipment. 23 23 23 Table of ContentsAdditionally, negative or inaccurate postings, articles, or comments on social media and the internet about us could generate negative publicity that could damage the reputation of our brand. Further, adverse publicity about regulatory or legal action against us, or legal proceedings initiated by us, could also damage our reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to our operations. If the reputation, culture, or image of our brands are damaged, or we receive negative publicity, then our sales, financial condition, and results of operations could be materially and adversely affected.Unexpected events have increased and may in the future increase our cost of doing business or disrupt our operations. The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which we operate, or in which our suppliers are located, have adversely affected and could in the future adversely affect our operations and financial performance. Such events have caused and could cause complete or partial closure of one or more of our manufacturing facilities or distribution centers, temporary or long-term disruptions in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events.The potential physical impacts of climate change on our facilities, suppliers, and customers, and therefore on our operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for our products and the cost, production, sales, and financial performance of our operations. ​ITEM 1B.UNRESOLVED STAFF COMMENTS.None.ITEM 2.PROPERTIES.In the U.S. and Canada, the equipment operations own and operate 23 factory locations and lease and operate another 3 locations. Outside of the U.S. and Canada, the equipment operations own or lease and operate 45 factory locations in Argentina, Austria, Brazil, China, Finland, France, Germany, India, Israel, Italy, Mexico, the Netherlands, New Zealand, and Spain. In addition, the equipment operations own or lease 12 facilities comprised of three locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 11 total facilities with centralized parts distribution centers in Brazil, Germany, and India and regional parts depots and distribution centers in Argentina, Australia, China, India, Mexico, South Africa, Sweden, and the United Kingdom. We also own or lease eight facilities for the manufacture and distribution of other brands of replacement parts.Our manufacturing facility in Russia was shut down in 2022. Our Eurasian parts distribution center in Russia was also closed, and the leased premises were returned to the landlord in the second quarter of fiscal year 2023. Premises owned by Wirtgen in Russia operating in the roadbuilding business were sold in the fourth quarter of fiscal year 2023.We own or lease 53 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities.Overall, we own approximately 70.0 million square feet of facilities and lease approximately 13.1 million additional square feet in various locations. These properties are adequate and suitable for our business as presently conducted and are well maintained.ITEM 3.LEGAL PROCEEDINGS.We are subject to various unresolved legal actions that arise in the normal course of business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. Currently we believe the reasonably possible range of losses for other unresolved legal actions would not have a material effect on our financial statements; however, the outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims, or investigations could require us to pay substantial damages or fines, undertake service actions, initiate recall campaigns, or take other costly actions. It is therefore possible that legal judgements could give rise to expenses that are not covered, or not fully covered by our insurance programs and could affect our financial position and results.ITEM 4.MINE SAFETY DISCLOSURES.Not applicable.24 Table of Contents Table of Contents Table of Contents Additionally, negative or inaccurate postings, articles, or comments on social media and the internet about us could generate negative publicity that could damage the reputation of our brand. Further, adverse publicity about regulatory or legal action against us, or legal proceedings initiated by us, could also damage our reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to our operations. If the reputation, culture, or image of our brands are damaged, or we receive negative publicity, then our sales, financial condition, and results of operations could be materially and adversely affected.Unexpected events have increased and may in the future increase our cost of doing business or disrupt our operations. The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which we operate, or in which our suppliers are located, have adversely affected and could in the future adversely affect our operations and financial performance. Such events have caused and could cause complete or partial closure of one or more of our manufacturing facilities or distribution centers, temporary or long-term disruptions in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events.The potential physical impacts of climate change on our facilities, suppliers, and customers, and therefore on our operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for our products and the cost, production, sales, and financial performance of our operations. ​ITEM 1B.UNRESOLVED STAFF COMMENTS.None.ITEM 2.PROPERTIES.In the U.S. and Canada, the equipment operations own and operate 23 factory locations and lease and operate another 3 locations. Outside of the U.S. and Canada, the equipment operations own or lease and operate 45 factory locations in Argentina, Austria, Brazil, China, Finland, France, Germany, India, Israel, Italy, Mexico, the Netherlands, New Zealand, and Spain. In addition, the equipment operations own or lease 12 facilities comprised of three locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 11 total facilities with centralized parts distribution centers in Brazil, Germany, and India and regional parts depots and distribution centers in Argentina, Australia, China, India, Mexico, South Africa, Sweden, and the United Kingdom. We also own or lease eight facilities for the manufacture and distribution of other brands of replacement parts.Our manufacturing facility in Russia was shut down in 2022. Our Eurasian parts distribution center in Russia was also closed, and the leased premises were returned to the landlord in the second quarter of fiscal year 2023. Premises owned by Wirtgen in Russia operating in the roadbuilding business were sold in the fourth quarter of fiscal year 2023.We own or lease 53 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities.Overall, we own approximately 70.0 million square feet of facilities and lease approximately 13.1 million additional square feet in various locations. These properties are adequate and suitable for our business as presently conducted and are well maintained.ITEM 3.LEGAL PROCEEDINGS.We are subject to various unresolved legal actions that arise in the normal course of business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. Currently we believe the reasonably possible range of losses for other unresolved legal actions would not have a material effect on our financial statements; however, the outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims, or investigations could require us to pay substantial damages or fines, undertake service actions, initiate recall campaigns, or take other costly actions. It is therefore possible that legal judgements could give rise to expenses that are not covered, or not fully covered by our insurance programs and could affect our financial position and results.ITEM 4.MINE SAFETY DISCLOSURES.Not applicable. Additionally, negative or inaccurate postings, articles, or comments on social media and the internet about us could generate negative publicity that could damage the reputation of our brand. Further, adverse publicity about regulatory or legal action against us, or legal proceedings initiated by us, could also damage our reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to our operations. If the reputation, culture, or image of our brands are damaged, or we receive negative publicity, then our sales, financial condition, and results of operations could be materially and adversely affected. --- ## New in Current Filing: Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K. ​ ​ ​ ​ ​ ​ OVERVIEW ​ 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, service, 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. --- ## New in Current Filing: Industry Sales Outlook for Fiscal 2024 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. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023. --- ## New in Current Filing: Financial Services Outlook for 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ Up moderately ​ + Nonrecurring prior period special items ​ Favorable ​ + Higher average portfolio ​ Favorable ​ (-) Financing spreads ​ Unfavorable ​ (-) Recoveries on operating lease dispositions ​ Unfavorable ​ --- ## New in Current Filing: Additional Trends - We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below. Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels. --- ## New in Current Filing: Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products. 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 $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024.Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside.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, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins.Other Items of Concern and Uncertainties - Other items that could impact our results are:●global and regional political conditions, including the war in Ukraine and the Israel-Hamas war, ●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,●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,●changes in demand and pricing for new and used equipment, ●significant fluctuations in foreign currency exchange rates, ●volatility in the prices of many commodities, and ●slower economic growth or possible recession. ​​​ 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 $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024. Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024. Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside. Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, and government policies. These factors affect farmers' income and may result in lower demand for equipment. We may experience any of the following effects during unfavorable market conditions: lower net sales, higher sales discounts, higher receivable write-offs, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins. --- ## New in Current Filing: Other Items of Concern and Uncertainties - Other items that could impact our results are: ​ ​ ​ ​ ​ ​ ​ 30 30 30 Table of Contents​CONSOLIDATED RESULTS2023 compared to 2022Highlights●Net income rose in 2023 compared to 2022, driven by strong market conditions.●We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers.Net Sales and RevenuesNet Sales (Equipment Operations) ●Favorable industry fundamentals and strong demand for farm and construction equipment drove the sales increases in 2023.Net Income (Attributable to Deere & Company)Diluted Earnings Per Share (EPS) ($ per share)●Net income and diluted EPS grew at a faster rate than sales due to our ability to keep cost increases below price realization.Other Significant Statement of Consolidated Income Changes - An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​​​Deere & Company​2023​2022​% Change​Cost of sales to net sales​​67.9%​​73.7%​-8​+ Price realization​Favorable​(-) Production costs​Unfavorable​Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions.​​​​​​​​​​​Other income​$ 1,003​$ 1,295​-23​Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022.​​​​​​​​​​​Research and development expenses​​ 2,177​​ 1,912​+14​Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions.​​​​​​​​​​​Selling, administrative and general expenses​​ 4,595​​ 3,863​+19​Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4).​​​​​​​​​​​Interest expense​​ 2,453​​ 1,062​+131​Interest expense increased due to higher average borrowing rates and higher average borrowings.​​​​​​​​​​​Other operating expenses​​ 1,292​​ 1,275​+1​See Note 9 for more information.​​​​​​​​​​​Provision for income taxes​​ 2,871​​ 2,007​+43​Consistent with higher pretax income.​​​​​​31 Table of Contents​ Table of Contents Table of Contents ​ CONSOLIDATED RESULTS2023 compared to 2022Highlights●Net income rose in 2023 compared to 2022, driven by strong market conditions.●We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers.Net Sales and RevenuesNet Sales (Equipment Operations) ●Favorable industry fundamentals and strong demand for farm and construction equipment drove the sales increases in 2023.Net Income (Attributable to Deere & Company)Diluted Earnings Per Share (EPS) ($ per share)●Net income and diluted EPS grew at a faster rate than sales due to our ability to keep cost increases below price realization.Other Significant Statement of Consolidated Income Changes - An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​​​Deere & Company​2023​2022​% Change​Cost of sales to net sales​​67.9%​​73.7%​-8​+ Price realization​Favorable​(-) Production costs​Unfavorable​Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions.​​​​​​​​​​​Other income​$ 1,003​$ 1,295​-23​Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022.​​​​​​​​​​​Research and development expenses​​ 2,177​​ 1,912​+14​Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions.​​​​​​​​​​​Selling, administrative and general expenses​​ 4,595​​ 3,863​+19​Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4).​​​​​​​​​​​Interest expense​​ 2,453​​ 1,062​+131​Interest expense increased due to higher average borrowing rates and higher average borrowings.​​​​​​​​​​​Other operating expenses​​ 1,292​​ 1,275​+1​See Note 9 for more information.​​​​​​​​​​​Provision for income taxes​​ 2,871​​ 2,007​+43​Consistent with higher pretax income.​​​​​​ CONSOLIDATED RESULTS2023 compared to 2022Highlights●Net income rose in 2023 compared to 2022, driven by strong market conditions.●We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers.Net Sales and RevenuesNet Sales (Equipment Operations) ●Favorable industry fundamentals and strong demand for farm and construction equipment drove the sales increases in 2023.Net Income (Attributable to Deere & Company)Diluted Earnings Per Share (EPS) ($ per share)●Net income and diluted EPS grew at a faster rate than sales due to our ability to keep cost increases below price realization.Other Significant Statement of Consolidated Income Changes - An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​​​Deere & Company​2023​2022​% Change​Cost of sales to net sales​​67.9%​​73.7%​-8​+ Price realization​Favorable​(-) Production costs​Unfavorable​Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions.​​​​​​​​​​​Other income​$ 1,003​$ 1,295​-23​Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022.​​​​​​​​​​​Research and development expenses​​ 2,177​​ 1,912​+14​Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions.​​​​​​​​​​​Selling, administrative and general expenses​​ 4,595​​ 3,863​+19​Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4).​​​​​​​​​​​Interest expense​​ 2,453​​ 1,062​+131​Interest expense increased due to higher average borrowing rates and higher average borrowings.​​​​​​​​​​​Other operating expenses​​ 1,292​​ 1,275​+1​See Note 9 for more information.​​​​​​​​​​​Provision for income taxes​​ 2,871​​ 2,007​+43​Consistent with higher pretax income.​​​​​​ CONSOLIDATED RESULTS2023 compared to 2022Highlights●Net income rose in 2023 compared to 2022, driven by strong market conditions.●We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers.Net Sales and RevenuesNet Sales (Equipment Operations) ●Favorable industry fundamentals and strong demand for farm and construction equipment drove the sales increases in 2023.Net Income (Attributable to Deere & Company)Diluted Earnings Per Share (EPS) ($ per share)●Net income and diluted EPS grew at a faster rate than sales due to our ability to keep cost increases below price realization. --- ## New in Current Filing: Diluted Earnings Per Share (EPS) ($ per share) Other Significant Statement of Consolidated Income Changes - An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​​​Deere & Company​2023​2022​% Change​Cost of sales to net sales​​67.9%​​73.7%​-8​+ Price realization​Favorable​(-) Production costs​Unfavorable​Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions.​​​​​​​​​​​Other income​$ 1,003​$ 1,295​-23​Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022.​​​​​​​​​​​Research and development expenses​​ 2,177​​ 1,912​+14​Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions.​​​​​​​​​​​Selling, administrative and general expenses​​ 4,595​​ 3,863​+19​Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4).​​​​​​​​​​​Interest expense​​ 2,453​​ 1,062​+131​Interest expense increased due to higher average borrowing rates and higher average borrowings.​​​​​​​​​​​Other operating expenses​​ 1,292​​ 1,275​+1​See Note 9 for more information.​​​​​​​​​​​Provision for income taxes​​ 2,871​​ 2,007​+43​Consistent with higher pretax income.​​​​​​ --- ## New in Current Filing: Deere & Company ​ 2023 ​ 2022 ​ % Change ​ Cost of sales to net sales ​ ​ 67.9% ​ ​ 73.7% ​ -8 ​ + Price realization ​ Favorable ​ (-) Production costs ​ Unfavorable ​ Price realization was 12 percent driven by strong demand. Production costs increased due to a moderate rise in material cost and manufacturing overhead. These factors were partially offset by lower freight costs and production efficiencies generated by easing supply chain disruptions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ $ 1,003 ​ $ 1,295 ​ -23 ​ Other income was lower due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture in 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 2,177 ​ ​ 1,912 ​ +14 ​ Research and development expenditures were higher due to continued focus on developing new technology solutions and new product introductions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, administrative and general expenses ​ ​ 4,595 ​ ​ 3,863 ​ +19 ​ Selling, administrative and general expenses rose due to higher salary expenses driven by inflationary conditions, profit-sharing incentives, and an increase in expenses to support the Leap Ambitions framework. Also impacting the current year was a cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 2,453 ​ ​ 1,062 ​ +131 ​ Interest expense increased due to higher average borrowing rates and higher average borrowings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating expenses ​ ​ 1,292 ​ ​ 1,275 ​ +1 ​ See Note 9 for more information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes ​ ​ 2,871 ​ ​ 2,007 ​ +43 ​ Consistent with higher pretax income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 31 31 31 Table of Contents​BUSINESS SEGMENT RESULTS2023 compared to 2022Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year.Production and Precision Agriculture Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 26,790​$ 22,002​+22​Sales volume and other​​​​​​​+7​Price realization​​​​​​​+15​Currency translation​​​​​​​​​Operating profit​​ 6,996​​ 4,386​+60​Operating margin​​26.1%​​19.9%​​​​Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4). Small Agriculture and Turf Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 13,980​$ 13,381​+4​Sales volume and other​​​​​​​-4​Price realization​​​​​​​+9​Currency translation​​​​​​​-1​Operating profit​​ 2,472​​ 1,949​+27​Operating margin​​17.7%​​14.6%​​​​Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe. Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand.Construction and Forestry Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 14,795​$ 12,534​+18​Sales volume and other​​​​​​​+9​Price realization​​​​​​​+10​Currency translation​​​​​​​-1​Operating profit​​ 2,695​​ 2,014​+34​Operating margin​​18.2%​​16.1%​​​​Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4). ​32 Table of Contents​ Table of Contents Table of Contents ​ BUSINESS SEGMENT RESULTS2023 compared to 2022Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year.Production and Precision Agriculture Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 26,790​$ 22,002​+22​Sales volume and other​​​​​​​+7​Price realization​​​​​​​+15​Currency translation​​​​​​​​​Operating profit​​ 6,996​​ 4,386​+60​Operating margin​​26.1%​​19.9%​​​​Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4). Small Agriculture and Turf Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 13,980​$ 13,381​+4​Sales volume and other​​​​​​​-4​Price realization​​​​​​​+9​Currency translation​​​​​​​-1​Operating profit​​ 2,472​​ 1,949​+27​Operating margin​​17.7%​​14.6%​​​​Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe. Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand.Construction and Forestry Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 14,795​$ 12,534​+18​Sales volume and other​​​​​​​+9​Price realization​​​​​​​+10​Currency translation​​​​​​​-1​Operating profit​​ 2,695​​ 2,014​+34​Operating margin​​18.2%​​16.1%​​​​Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4). ​ BUSINESS SEGMENT RESULTS2023 compared to 2022Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year.Production and Precision Agriculture Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 26,790​$ 22,002​+22​Sales volume and other​​​​​​​+7​Price realization​​​​​​​+15​Currency translation​​​​​​​​​Operating profit​​ 6,996​​ 4,386​+60​Operating margin​​26.1%​​19.9%​​​​Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4). Small Agriculture and Turf Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 13,980​$ 13,381​+4​Sales volume and other​​​​​​​-4​Price realization​​​​​​​+9​Currency translation​​​​​​​-1​Operating profit​​ 2,472​​ 1,949​+27​Operating margin​​17.7%​​14.6%​​​​Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe. Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand.Construction and Forestry Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 14,795​$ 12,534​+18​Sales volume and other​​​​​​​+9​Price realization​​​​​​​+10​Currency translation​​​​​​​-1​Operating profit​​ 2,695​​ 2,014​+34​Operating margin​​18.2%​​16.1%​​​​Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4). ​ BUSINESS SEGMENT RESULTS2023 compared to 2022Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year.Production and Precision Agriculture Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 26,790​$ 22,002​+22​Sales volume and other​​​​​​​+7​Price realization​​​​​​​+15​Currency translation​​​​​​​​​Operating profit​​ 6,996​​ 4,386​+60​Operating margin​​26.1%​​19.9%​​​​Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4). Small Agriculture and Turf Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 13,980​$ 13,381​+4​Sales volume and other​​​​​​​-4​Price realization​​​​​​​+9​Currency translation​​​​​​​-1​Operating profit​​ 2,472​​ 1,949​+27​Operating margin​​17.7%​​14.6%​​​​Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe. --- ## New in Current Filing: 2023 compared to 2022 Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year. --- ## New in Current Filing: Production and Precision Agriculture Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Change ​ Net sales ​ $ 26,790 ​ $ 22,002 ​ +22 ​ Sales volume and other ​ ​ ​ ​ ​ ​ ​ +7 ​ Price realization ​ ​ ​ ​ ​ ​ ​ +15 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 6,996 ​ ​ 4,386 ​ +60 ​ Operating margin ​ ​ 26.1% ​ ​ 19.9% ​ ​ ​ ​ Sales volumes increased 10 percent in the U.S. and Canada, 32 percent in Australia, and 9 percent in Western Europe, partially offset by the effect of suspension of shipments to Russia. Price realization was 17 percent in the U.S. and Canada and 12 percent outside the U.S. and Canada, driven by strong demand. Prior period results were impacted by special items (see Note 4). --- ## New in Current Filing: Small Agriculture and Turf Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Change ​ Net sales ​ $ 13,980 ​ $ 13,381 ​ +4 ​ Sales volume and other ​ ​ ​ ​ ​ ​ ​ -4 ​ Price realization ​ ​ ​ ​ ​ ​ ​ +9 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -1 ​ Operating profit ​ ​ 2,472 ​ ​ 1,949 ​ +27 ​ Operating margin ​ ​ 17.7% ​ ​ 14.6% ​ ​ ​ ​ Sales volumes decreased 8 percent in the U.S. and Canada but increased 18 percent in Mexico and 2 percent in Western Europe. Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand.Construction and Forestry Operations​​​​​​​​​​​​​2023​2022​% Change​Net sales​$ 14,795​$ 12,534​+18​Sales volume and other​​​​​​​+9​Price realization​​​​​​​+10​Currency translation​​​​​​​-1​Operating profit​​ 2,695​​ 2,014​+34​Operating margin​​18.2%​​16.1%​​​​Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4). ​ Price realization was 8 percent in the U.S. and Canada driven by inflation and 12 percent in Western Europe driven by strong demand. --- ## New in Current Filing: Financial Services Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Change ​ Revenue (including intercompany) ​ $ 5,554 ​ $ 4,085 ​ +36 ​ Average balance of receivables and leases ​ ​ ​ ​ ​ ​ ​ +19 ​ Interest expense ​ ​ 2,362 ​ ​ 799 ​ +196 ​ Average borrowings ​ ​ ​ ​ ​ ​ ​ +20 ​ Average borrowing rates ​ ​ ​ ​ ​ ​ ​ +143 ​ Net income ​ ​ 619 ​ ​ 880 ​ -30 ​ ​ Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services' investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the "Other" bar below. ​ ​ ​ ​ ​ ​ --- ## New in Current Filing: 2022 compared to 2021 Please refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K. 2022 Form 10-K ​ ​ ​ ​ ​ ​ --- ## New in Current Filing: 2023 compared to 2022 Each equipment operation segment experienced price realization during 2023, as orderbooks were full and most product lines were on allocation. These factors contributed to higher shipment volumes for large agriculture and construction equipment. Production costs were unfavorable in 2023 due to higher material costs, profit-sharing incentive compensation, and manufacturing overhead costs, partially offset by lower freight costs and improved production efficiency. Material costs were higher in the first three quarters of 2023 but continued to moderate through the year. In the fourth quarter of 2023, material costs were lower than in the prior year. --- ## New in Current Filing: 2023, 2022, and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ Net cash provided by operating activities ​ $ 8,589 ​ $ 4,699 ​ $ 7,726 ​ Net cash used for investing activities ​ ​ (8,749) ​ ​ (8,485) ​ ​ (5,750) ​ Net cash provided by (used for) financing activities ​ ​ 2,808 ​ ​ 826 ​ ​ (1,078) ​ Effect of exchange rate changes on cash, cash equivalents, and restricted cash ​ ​ 31 ​ ​ (224) ​ ​ 55 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ $ 2,679 ​ $ (3,184) ​ $ 953 ​ ​ Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution. Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment. Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid. --- ## New in Current Filing: Cash Returned to Shareholders Cash returned to shareholders increased $3.7 billion in 2023. ​ ​ ​ ​ ​ ​ ​ DEBT RATINGS​To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity.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​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​​​​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS2024 and BeyondOur material cash requirements include the following:Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to our contractual obligations, we have the following commitments:●capital expenditures of $1.9 billion are planned for 2024,●expected quarterly cash dividend throughout 2024 (subject to change at the discretion of our Board of Directors), and●total pension and OPEB contributions in 2024 are expected to be approximately $225.Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met. ​​ --- ## New in Current Filing: DEBT RATINGS ​ To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity. 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. A2 Prime-1 Positive Standard & Poor's A A-1 Stable ​ ​ ​ ​ ​ ​ ​ ​ --- ## New in Current Filing: Sales Incentives We provide sales incentives to dealers. These incentives are offered in two forms: The estimated cost of these programs is based on: At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale. There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales." --- ## New in Current Filing: Product Warranties A standard warranty is provided as an assurance that our 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 the following calculation: The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments. --- ## New in Current Filing: Product Warranty Accruals The increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate. --- ## New in Current Filing: October 29, 2023 ​ 2024 ​ ​ ​ ​ ​ Increase ​ Increase ​ ​ ​ Percentage ​ (Decrease) ​ (Decrease) ​ Assumptions Change PBO/APBO* Expense Pension ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate** +/-.5 ​ $ (414)/456 ​ $ 3/(3) ​ Expected return on assets ​ +/-.5 ​ ​ ​ ​ (63)/63 ​ OPEB ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate** +/-.5 ​ (120)/130 ​ (4)/5 ​ Expected return on assets +/-.5 ​ ​ ​ ​ (10)/10 ​ Health care cost trend rate** +/-1.0 ​ 231/(202) ​ 39/(34) ​ * Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans. ** Pretax impact on service cost, interest cost, and amortization of gains or losses. ​ --- ## New in Current Filing: Operating Lease Residual Values Equipment on operating leases is depreciated to the estimated residual value over the lease term. The residual values are based on several factors, including: We review residual value estimates during the lease term. Depreciation is adjusted over the remaining lease term if residual estimates are revised. Impairments are recorded when events or circumstances necessitate. At the end of the majority of leases, the equipment is disposed in the following sequence: --- ## New in Current Filing: Operating Lease Residual Values Equipment on operating leases is depreciated to the estimated residual value over the lease term. The residual values are based on several factors, including: We review residual value estimates during the lease term. Depreciation is adjusted over the remaining lease term if residual estimates are revised. Impairments are recorded when events or circumstances necessitate. At the end of the majority of leases, the equipment is disposed in the following sequence: --- ## New in Current Filing: CONSOLIDATED ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ --- ## New in Current Filing: CONSOLIDATED ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ --- ## New in Current Filing: LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings ​ $ 1,230 ​ $ 1,040 ​ $ 16,709 ​ $ 11,552 ​ ​ ​ ​ ​ ​ ​ $ 17,939 ​ $ 12,592 ​ ​ ​ Short-term securitization borrowings ​ ​ ​ ​ ​ ​ ​ ​ 6,995 ​ ​ 5,711 ​ ​ ​ ​ ​ ​ ​ ​ 6,995 ​ ​ 5,711 ​ ​ ​ Payables to Equipment Operations ​ ​ ​ ​ ​ 4,516 ​ 6,569 ​ $ (4,516) ​ $ (6,569) ​ ​ ​ ​ ​ 7​ ​ Accounts payable and accrued expenses ​ 14,862 ​ 12,962 ​ 3,599 ​ 3,170 ​ (2,331) ​ (1,310) ​ 16,130 ​ 14,822 ​ 8​ ​ Deferred income taxes ​ 452 ​ 380 ​ 455 ​ 276 ​ (387) ​ (161) ​ 520 ​ 495 ​ 10​ ​ Long-term borrowings ​ 7,210 ​ 7,917 ​ 31,267 ​ 25,679 ​ ​ ​ ​ ​ 38,477 ​ 33,596 ​ ​ ​ Retirement benefits and other liabilities ​ 2,032 ​ 2,351 ​ 109 ​ 108 ​ (1) ​ (2) ​ 2,140 ​ 2,457 ​ 9​ ​ Total liabilities ​ 25,786 ​ 24,650 ​ 63,650 ​ 53,065 ​ (7,235) ​ (8,042) ​ 82,201 ​ 69,673 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 20) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interest (Note 3) ​ ​ 97 ​ ​ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 97 ​ ​ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## New in Current Filing: CONSOLIDATED ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ --- ## New in Current Filing: Total Cash, Cash Equivalents, and Restricted Cash ​ $ 5,755 ​ $ 3,781 ​ $ 7,200 ​ $ 1,865 ​ $ 1,160 ​ $ 925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,620 ​ $ 4,941 ​ $ 8,125 ​ ​ ​ ​ ​ 12 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6). 13 Reclassification of share-based compensation expense. 14 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities. 15 Primarily reclassification of receivables related to the sale of equipment. 16 Reclassification of direct lease agreements with retail customers. 17 Reclassification of sales incentive accruals on receivables sold to financial services. 18 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts. 19 Elimination of investment from equipment operations to financial services. 41 41 41 --- ## No Match in Current: Governmental actions designed to address climate change and the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and its customers. *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including John Deere, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to John Deere in the form of taxes or emission allowances, required facilities improvements, and increased energy costs, which would increase John Deere's operating costs through higher utility, transportation, and materials costs. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for John Deere equipment. John Deere's financial services is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the lending operations and climate-risk processes developed by John Deere's financial services. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. --- ## No Match in Current: Security breaches with respect to John Deere's products could interfere with the business of John Deere, its dealers, and/or customers, exposing John Deere to liability that would cause its business and reputation to suffer. *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* Some of John Deere's products include connectivity hardware and software typically used for remote system updates. While John Deere has implemented security measures intended to protect against unauthorized remote access to its products, third party security 21 21 21 Table of Contentsresearchers and malicious threat actors, have reportedly attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to John Deere's products, systems, and data, regardless of their veracity, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of John Deere products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against John Deere, government investigations, liability or regulatory penalties, which could adversely affect John Deere's business, results of operations, and financial condition. The potential loss of John Deere intellectual property through trade secret theft, infringement of patents, trademark counterfeitings, or other loss of rights to exclusive use of John Deere intellectual property, could have a material adverse effect on the Company. Infringement of the intellectual property rights of others by John Deere could also have a material adverse effect on the Company.John Deere relies on a combination of patents, trademarks, copyrights, trade secret laws, and confidentiality agreements to protect its intellectual property rights. John Deere heavily relies on certain trademarks that contribute to John Deere's identity and the recognition of its products and services, including but not limited to the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, the prefix "JD" associated with many products, and the green and yellow color combination. These trademarks, as well as the many patents used in our products, are integral to the John Deere business, and their loss could have a material adverse effect on the Company. Additionally, third parties may initiate litigation to challenge the validity of John Deere's patents or allege that John Deere infringes their patents or proprietary rights. John Deere may incur substantial costs if its competitors or other third parties initiate such litigation, or if John Deere initiates any proceedings to protect its proprietary rights. If the outcome of any such litigation is unfavorable to John Deere, our business could be adversely affected. LEGAL AND COMPLIANCE RISKS John Deere's global operations are subject to complex and changing laws and regulations, the violation of which could expose John Deere to potential liabilities, increased costs, and other adverse effects.John Deere's global operations are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a broad spectrum of subject areas, including advertising; anti-money laundering; antitrust; consumer finance; environmental, climate-related, health, and safety; foreign exchange controls and cash repatriation restrictions; foreign ownership and investment; import/export and trade; human rights, labor, and employment; product liability; and telematics and data privacy and connectivity. These laws may vary substantially within the different markets in which John Deere operates. Compliance with these laws and regulations is costly and may further increase the cost of conducting John Deere's global operations. In addition, John Deere must comply with the U.S. Foreign Corrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act, which generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although John Deere has a compliance program in place designed to reduce the likelihood of potential violations of such laws and regulations, there can be no assurance that John Deere's employees, contractors, or agents will not violate such laws and regulations or John Deere's policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on John Deere's reputation, business, results of operations, and financial condition.Changes to existing laws and regulations or changes to how they are interpreted or the implementation of new, more stringent laws or regulations could adversely affect John Deere's business by increasing compliance costs, limiting John Deere's ability to offer a product or service, requiring changes to John Deere's business practices, or otherwise making John Deere's products and services less attractive to customers. For example, so-called "right to repair" legislation proposals in certain states and at the federal level in the U.S. could require John Deere to provide access to the software code embedded in its products, which, among other harmful consequences, could result in product safety issues, compromise engine emissions and performance controls, adversely affect the protection of John Deere's intellectual property rights, and discourage innovation and investments in research and development. Legislative and regulatory changes and other actions that could potentially affect John Deere's business may be announced with little or no advance notice and John Deere may not be able to effectively mitigate all adverse effects from such measures.22 Table of Contents Table of Contents Table of Contents researchers and malicious threat actors, have reportedly attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to John Deere's products, systems, and data, regardless of their veracity, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of John Deere products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against John Deere, government investigations, liability or regulatory penalties, which could adversely affect John Deere's business, results of operations, and financial condition. The potential loss of John Deere intellectual property through trade secret theft, infringement of patents, trademark counterfeitings, or other loss of rights to exclusive use of John Deere intellectual property, could have a material adverse effect on the Company. Infringement of the intellectual property rights of others by John Deere could also have a material adverse effect on the Company.John Deere relies on a combination of patents, trademarks, copyrights, trade secret laws, and confidentiality agreements to protect its intellectual property rights. John Deere heavily relies on certain trademarks that contribute to John Deere's identity and the recognition of its products and services, including but not limited to the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, the prefix "JD" associated with many products, and the green and yellow color combination. These trademarks, as well as the many patents used in our products, are integral to the John Deere business, and their loss could have a material adverse effect on the Company. Additionally, third parties may initiate litigation to challenge the validity of John Deere's patents or allege that John Deere infringes their patents or proprietary rights. John Deere may incur substantial costs if its competitors or other third parties initiate such litigation, or if John Deere initiates any proceedings to protect its proprietary rights. If the outcome of any such litigation is unfavorable to John Deere, our business could be adversely affected. LEGAL AND COMPLIANCE RISKS John Deere's global operations are subject to complex and changing laws and regulations, the violation of which could expose John Deere to potential liabilities, increased costs, and other adverse effects.John Deere's global operations are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a broad spectrum of subject areas, including advertising; anti-money laundering; antitrust; consumer finance; environmental, climate-related, health, and safety; foreign exchange controls and cash repatriation restrictions; foreign ownership and investment; import/export and trade; human rights, labor, and employment; product liability; and telematics and data privacy and connectivity. These laws may vary substantially within the different markets in which John Deere operates. Compliance with these laws and regulations is costly and may further increase the cost of conducting John Deere's global operations. In addition, John Deere must comply with the U.S. Foreign Corrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act, which generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although John Deere has a compliance program in place designed to reduce the likelihood of potential violations of such laws and regulations, there can be no assurance that John Deere's employees, contractors, or agents will not violate such laws and regulations or John Deere's policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on John Deere's reputation, business, results of operations, and financial condition.Changes to existing laws and regulations or changes to how they are interpreted or the implementation of new, more stringent laws or regulations could adversely affect John Deere's business by increasing compliance costs, limiting John Deere's ability to offer a product or service, requiring changes to John Deere's business practices, or otherwise making John Deere's products and services less attractive to customers. For example, so-called "right to repair" legislation proposals in certain states and at the federal level in the U.S. could require John Deere to provide access to the software code embedded in its products, which, among other harmful consequences, could result in product safety issues, compromise engine emissions and performance controls, adversely affect the protection of John Deere's intellectual property rights, and discourage innovation and investments in research and development. Legislative and regulatory changes and other actions that could potentially affect John Deere's business may be announced with little or no advance notice and John Deere may not be able to effectively mitigate all adverse effects from such measures. researchers and malicious threat actors, have reportedly attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to John Deere's products, systems, and data, regardless of their veracity, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of John Deere products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against John Deere, government investigations, liability or regulatory penalties, which could adversely affect John Deere's business, results of operations, and financial condition. --- ## No Match in Current: John Deere's reputation and brand could be damaged by negative publicity. *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* John Deere's brand has worldwide recognition and significantly contributes to the success of its business. John Deere's reputation is critical to growing its customer base. John Deere's brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving John Deere, its products or services, its culture and values, customer data, or any of its key employees or suppliers, could damage John Deere's reputation and brand image, regardless of whether such claims are accurate. Damage to John Deere's reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. Additionally, negative or inaccurate postings, articles, or comments on social media and the internet about John Deere could generate negative publicity that could damage the reputation of the brand or John Deere. Further, adverse publicity about regulatory or legal action against John Deere, or by John Deere, could also damage the reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to John Deere's operations. If the reputation, culture or image of John Deere's brands are damaged, or John Deere receives negative publicity, then the Company's sales, financial condition, and results of operations could be materially and adversely affected. --- ## No Match in Current: Organization *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The company generates net sales from the sale of equipment to John Deere dealers and distributors. The company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the "equipment operations") are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The company's financial services segment provides credit services, which finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. --- ## No Match in Current: Deere & Company *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ (In millions of dollars, except per share amounts) ​ 2022 ​ 2021 ​ Net sales and revenues ​ $ 52,577 ​ $ 44,024 ​ Net income attributable to Deere & Company ​ ​ 7,131 ​ ​ 5,963 ​ Diluted earnings per share ​ ​ 23.28 ​ ​ 18.99 ​ ​ --- ## No Match in Current: Deere & Company *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ (In millions of dollars, except per share amounts) ​ 2022 ​ 2021 ​ Net sales and revenues ​ $ 52,577 ​ $ 44,024 ​ Net income attributable to Deere & Company ​ ​ 7,131 ​ ​ 5,963 ​ Diluted earnings per share ​ ​ 23.28 ​ ​ 18.99 ​ ​ --- ## No Match in Current: BUSINESS SEGMENT RESULTS *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The following discussion relates to operating results by reportable segment. Operating profit is income before corporate expenses, certain external interest expense, certain foreign exchange gains or losses, and income taxes. For the equipment operations, higher production costs were mostly due to elevated material and inbound freight expenses. Overhead spend was also higher for the year as factories continued to experience some production inefficiencies due to supply chain challenges and clearing partially completed machines in inventory. --- ## No Match in Current: Production and Precision Agriculture Operations *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions of dollars) ​ 2022 ​ 2021 ​ % Change ​ Net sales ​ $ 22,002 ​ $ 16,509 ​ +33 ​ Operating profit ​ ​ 4,386 ​ ​ 3,334 ​ +32 ​ Operating margin ​ ​ 19.9% ​ ​ 20.2% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +14 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -2 ​ ​ Segment sales increased due to higher shipment volumes and price realization. Operating profit benefitted from price realization and higher shipment volumes / sales mix. These items were partially offset by higher production costs, higher research and development expenses and selling, administrative and general expenses, the impact of higher reserves and impairments related to events in Russia / Ukraine, and the UAW contract ratification bonus. The prior year was also impacted by a favorable indirect tax ruling in Brazil (see Note 4). Small Agriculture and Turf Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Net sales​$ 13,381​$ 11,860​+13​Operating profit​​ 1,949​​ 2,045​-5​Operating margin​​14.6%​​17.2%​​​Price realization​​​​​​​+9​Currency translation​​​​​​​-4​​Segment sales were higher in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit decreased as a result of higher production costs, higher selling, administrative and general expenses and research and development expenses, and the unfavorable effects of foreign exchange, partially offset by price realization and improved shipment volumes. Results for the current year were affected by the impact of higher reserves and impairments related to events in Russia / Ukraine and the UAW contract ratification bonus, while results of the prior year were positively impacted by a gain on the sale of a factory in China (see Note 4).​ --- ## No Match in Current: Small Agriculture and Turf Operations *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions of dollars) ​ 2022 ​ 2021 ​ % Change ​ Net sales ​ $ 13,381 ​ $ 11,860 ​ +13 ​ Operating profit ​ ​ 1,949 ​ ​ 2,045 ​ -5 ​ Operating margin ​ ​ 14.6% ​ ​ 17.2% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +9 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -4 ​ ​ Segment sales were higher in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit decreased as a result of higher production costs, higher selling, administrative and general expenses and research and development expenses, and the unfavorable effects of foreign exchange, partially offset by price realization and improved shipment volumes. Results for the current year were affected by the impact of higher reserves and impairments related to events in Russia / Ukraine and the UAW contract ratification bonus, while results of the prior year were positively impacted by a gain on the sale of a factory in China (see Note 4). ​ 30 30 30 Table of Contents​Construction and Forestry Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Net sales​$ 12,534​$ 11,368​+10​Operating profit​​ 2,014​​ 1,489​+35​Operating margin​​16.1%​​13.1%​​​Price realization​​​​​​​+10​Currency translation​​​​​​​-3​​Segment sales increased in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit increased mainly due to price realization, partially offset by higher production costs. The current year results included a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture, partially offset by the impact of higher reserves and impairments related to events in Russia / Ukraine (see Note 4). Financial Services Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Revenue (including intercompany)​$ 4,085​$ 3,794​+8​Interest expense​​ 799​​ 687​+16​Net income​​ 880​​ 881​​​​The average balance of receivables and leases financed was 8 percent higher in 2022, consistent with revenue growth. Interest expense increased in 2022 as a result of higher average borrowings and higher average borrowing rates. Net income in 2022 was roughly the same mainly due to income earned on a higher average portfolio, partially offset by less favorable financing spreads and unfavorable discrete income tax adjustments. The provision for credit losses increased, primarily due to economic uncertainty in Russia. The financial services operations received an intercompany benefit from the equipment operations, as the equipment operations guarantees financial services' investments in certain international markets, including Russia (see Note 4). 2021 COMPARED WITH 2020The comparison of the 2021 results with 2020 can be found under the heading "2021 Compared With 2020" in the "Management's Discussion and Analysis" section of the company's 2021 Form 10-K.CAPITAL RESOURCES AND LIQUIDITYSOURCES OF LIQUIDITY, KEY METRICS, AND BALANCE SHEET DATAThe company has access to most global markets at a reasonable cost. Sources of liquidity for the company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels. As a result, the company may not experience typical seasonal reduction in inventory during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. 31 Table of Contents​ Table of Contents Table of Contents ​ Construction and Forestry Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Net sales​$ 12,534​$ 11,368​+10​Operating profit​​ 2,014​​ 1,489​+35​Operating margin​​16.1%​​13.1%​​​Price realization​​​​​​​+10​Currency translation​​​​​​​-3​​Segment sales increased in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit increased mainly due to price realization, partially offset by higher production costs. The current year results included a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture, partially offset by the impact of higher reserves and impairments related to events in Russia / Ukraine (see Note 4). Financial Services Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Revenue (including intercompany)​$ 4,085​$ 3,794​+8​Interest expense​​ 799​​ 687​+16​Net income​​ 880​​ 881​​​​The average balance of receivables and leases financed was 8 percent higher in 2022, consistent with revenue growth. Interest expense increased in 2022 as a result of higher average borrowings and higher average borrowing rates. Net income in 2022 was roughly the same mainly due to income earned on a higher average portfolio, partially offset by less favorable financing spreads and unfavorable discrete income tax adjustments. The provision for credit losses increased, primarily due to economic uncertainty in Russia. The financial services operations received an intercompany benefit from the equipment operations, as the equipment operations guarantees financial services' investments in certain international markets, including Russia (see Note 4). 2021 COMPARED WITH 2020The comparison of the 2021 results with 2020 can be found under the heading "2021 Compared With 2020" in the "Management's Discussion and Analysis" section of the company's 2021 Form 10-K.CAPITAL RESOURCES AND LIQUIDITYSOURCES OF LIQUIDITY, KEY METRICS, AND BALANCE SHEET DATAThe company has access to most global markets at a reasonable cost. Sources of liquidity for the company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels. As a result, the company may not experience typical seasonal reduction in inventory during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Construction and Forestry Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Net sales​$ 12,534​$ 11,368​+10​Operating profit​​ 2,014​​ 1,489​+35​Operating margin​​16.1%​​13.1%​​​Price realization​​​​​​​+10​Currency translation​​​​​​​-3​​Segment sales increased in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit increased mainly due to price realization, partially offset by higher production costs. The current year results included a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture, partially offset by the impact of higher reserves and impairments related to events in Russia / Ukraine (see Note 4). Financial Services Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Revenue (including intercompany)​$ 4,085​$ 3,794​+8​Interest expense​​ 799​​ 687​+16​Net income​​ 880​​ 881​​​​The average balance of receivables and leases financed was 8 percent higher in 2022, consistent with revenue growth. Interest expense increased in 2022 as a result of higher average borrowings and higher average borrowing rates. Net income in 2022 was roughly the same mainly due to income earned on a higher average portfolio, partially offset by less favorable financing spreads and unfavorable discrete income tax adjustments. The provision for credit losses increased, primarily due to economic uncertainty in Russia. The financial services operations received an intercompany benefit from the equipment operations, as the equipment operations guarantees financial services' investments in certain international markets, including Russia (see Note 4). 2021 COMPARED WITH 2020The comparison of the 2021 results with 2020 can be found under the heading "2021 Compared With 2020" in the "Management's Discussion and Analysis" section of the company's 2021 Form 10-K.CAPITAL RESOURCES AND LIQUIDITYSOURCES OF LIQUIDITY, KEY METRICS, AND BALANCE SHEET DATAThe company has access to most global markets at a reasonable cost. Sources of liquidity for the company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels. As a result, the company may not experience typical seasonal reduction in inventory during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Construction and Forestry Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Net sales​$ 12,534​$ 11,368​+10​Operating profit​​ 2,014​​ 1,489​+35​Operating margin​​16.1%​​13.1%​​​Price realization​​​​​​​+10​Currency translation​​​​​​​-3​​Segment sales increased in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit increased mainly due to price realization, partially offset by higher production costs. The current year results included a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture, partially offset by the impact of higher reserves and impairments related to events in Russia / Ukraine (see Note 4). Financial Services Operations​​​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Revenue (including intercompany)​$ 4,085​$ 3,794​+8​Interest expense​​ 799​​ 687​+16​Net income​​ 880​​ 881​​​​The average balance of receivables and leases financed was 8 percent higher in 2022, consistent with revenue growth. Interest expense increased in 2022 as a result of higher average borrowings and higher average borrowing rates. Net income in 2022 was roughly the same mainly due to income earned on a higher average portfolio, partially offset by less favorable financing spreads and unfavorable discrete income tax adjustments. The provision for credit losses increased, primarily due to economic uncertainty in Russia. The financial services operations received an intercompany benefit from the equipment operations, as the equipment --- ## No Match in Current: Construction and Forestry Operations *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions of dollars) ​ 2022 ​ 2021 ​ % Change ​ Net sales ​ $ 12,534 ​ $ 11,368 ​ +10 ​ Operating profit ​ ​ 2,014 ​ ​ 1,489 ​ +35 ​ Operating margin ​ ​ 16.1% ​ ​ 13.1% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +10 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -3 ​ ​ Segment sales increased in 2022 due to price realization and higher shipment volumes, partially offset by the negative effects of currency translation. Operating profit increased mainly due to price realization, partially offset by higher production costs. The current year results included a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture, partially offset by the impact of higher reserves and impairments related to events in Russia / Ukraine (see Note 4). --- ## No Match in Current: 2021 COMPARED WITH 2020 *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The comparison of the 2021 results with 2020 can be found under the heading "2021 Compared With 2020" in the "Management's Discussion and Analysis" section of the company's 2021 Form 10-K. 2021 Form 10-K --- ## No Match in Current: Product Warranties *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* For most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is determined by a review of five-year claims costs and consideration of current quality developments. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The company also offers extended warranty arrangements for purchase at the customer's option. The premiums for extended warranties are recognized in "Other income" in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in "Accounts payable and accrued expenses" in the consolidated balance sheets (see Note 18). The product warranty accruals, excluding extended warranty unamortized premiums, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,427 million, $1,312 million, and $1,105 million, respectively. The increase in each of 2022 and 2021 related to higher sales volume, partially offset by a decrease in the warranty rate. Estimates used to determine the product warranty accruals are significantly affected by the historical percent of warranty claims costs to sales. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .11 percent, compared to the average warranty costs to sales percent during that period. Holding other assumptions constant, if this estimated cost experience percent would have increased or decreased .11 percent, the warranty accrual at October 30, 2022 would have increased or decreased by approximately $57 million. --- ## No Match in Current: October 30, 2022 *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ 2023 ​ ​ ​ ​ ​ Increase ​ Increase ​ ​ ​ Percentage ​ (Decrease) ​ (Decrease) ​ Assumptions Change PBO/APBO* Expense Pension ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate** +/-.5 ​ $ (485)/547 ​ $ 0/1 ​ Expected return on assets ​ +/-.5 ​ ​ ​ ​ (63)/63 ​ OPEB ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate** +/-.5 ​ (149)/162 ​ (2)/2 ​ Expected return on assets +/-.5 ​ ​ ​ ​ (10)/10 ​ Health care cost trend rate** +/-1.0 ​ 291/(250) ​ 40/(29) ​ * Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans. ** Pretax impact on service cost, interest cost, and amortization of gains or losses. ​ Goodwill Goodwill is not amortized and is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying amount. The end of the fiscal third quarter is the annual measurement date. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, a loss is measured as the excess of the reporting unit's carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit. An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows. These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies, and competition. The company has not identified a reporting unit for which the goodwill was impaired in 2022, 2021, or 2020. For all reporting units, a 10 percent decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2022. --- ## No Match in Current: FORWARD-LOOKING STATEMENTS *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* 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 the company's operations generally while others could more heavily affect a particular line of business. Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). --- ## No Match in Current: Production & Precision Agriculture and Small Agriculture & Turf Operations *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The company's agricultural equipment operations are subject to a number of uncertainties, including customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; and consumable input costs. Additionally, these operations are subject to certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; availability of technological innovations; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases. Production and Precision Agriculture Operations In addition to the uncertainties discussed above, the production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's production and precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes. Small Agriculture and Turf Equipment In addition to the uncertainties discussed above, factors affecting the company's small agriculture and turf equipment operations include spending by municipalities and golf courses. --- ## No Match in Current: Construction and Forestry *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* Factors affecting the company's construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure, while prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. --- ## No Match in Current: SUPPLEMENTAL CONSOLIDATING INFORMATION *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. The equipment operations represents the enterprise without financial services. The equipment operations includes the company's production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the "equipment operations" and "financial services" have been eliminated to arrive at the consolidated financial statements. The equipment operations and financial services participate in different industries. The equipment operations 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 the company. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences. ​ 38 38 38 Table of Contents​SUPPLEMENTAL CONSOLIDATING DATA​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​INCOME STATEMENTS​​​For the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL ​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2022​2021​2020​2022​2021​2020​2022​2021​2020​2022​2021​2020​​​Net Sales and Revenues​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net sales​$ 47,917​$ 39,737​$ 31,272​​​​​​​​​​​​​​​​​​​$ 47,917​$ 39,737​$ 31,272​​​Finance and interest income​​ 213​​ 133​​ 112​$ 3,583​$ 3,442​$ 3,610​$ (431)​$ (279)​$ (272)​​ 3,365​​ 3,296​​ 3,450​ 1​​Other income​​ 1,261​​ 941​​ 808​​ 502​​ 352​​ 257​​ (468)​​ (302)​​ (247)​​ 1,295​​ 991​​ 818​2, 3​​Total​​ 49,391​​ 40,811​​ 32,192​​4,085​​ 3,794​​ 3,867​​ (899)​​ (581)​​ (519)​​ 52,577​​ 44,024​​ 35,540​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cost of sales​​ 35,341​​ 29,119​​ 23,679​​ ​​​​​​​​​ (3)​​ (3)​​ (2)​​ 35,338​​ 29,116​​ 23,677​ 4​​Research and development expenses​​ 1,912​​ 1,587​​ 1,644​​ ​​​​​​​​​ ​​​ ​​​​​​ 1,912​​ 1,587​​ 1,644​​​Selling, administrative and general expenses​​ 3,137​​ 2,887​​ 2,878​​ 735​​ 504​​ 606​​ (9)​​ (8)​​ (7)​​ 3,863​​ 3,383​​ 3,477​ 4​​Interest expense​​ 390​​ 368​​ 329​​ 799​​ 687​​ 942​​ (127)​​ (62)​​ (24)​​ 1,062​​ 993​​ 1,247​ 5​​Interest compensation to Financial Services​​ 299​​ 217​​ 248​​ ​​​ ​​​​​​ (299)​​ (217)​​ (248)​​ ​​​ ​​​ ​​ 5​​Other operating expenses​​ 350​​ 181​​ 278​​ 1,386​​ 1,453​​ 1,572​​ (461)​​ (291)​​ (238)​​ 1,275​​ 1,343​​ 1,612​6, 7​​Total​​ 41,429​​ 34,359​​ 29,056​​ 2,920​​ 2,644​​ 3,120​​ (899)​​ (581)​​ (519)​​ 43,450​​ 36,422​​ 31,657​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income before Income Taxes​​ 7,962​​ 6,452​​ 3,136​​ 1,165​​ 1,150​​ 747​​ ​​​ ​​​ ​​​ 9,127​​ 7,602​​ 3,883​​​Provision for income taxes​​ 1,718​​ 1,386​​ 899​​ 289​​ 272​​ 183​​ ​​​​​​​​​ 2,007​​ 1,658​​ 1,082​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income after Income Taxes​​ 6,244​​ 5,066​​ 2,237​​ 876​​ 878​​ 564​​ ​​​ ​​​ ​​​ 7,120​​ 5,944​​ 2,801​​​Equity in income (loss) of unconsolidated affiliates​​ 6​​ 18​​ (50)​​ 4​​ 3​​ 2​​ ​​​​​​​​​ 10​​ 21​​ (48)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Income​​ 6,250​ ​ 5,084​​ 2,187​​ 880​​ 881​​ 566​​ ​​​ ​​​ ​​​ 7,130​​ 5,965​​ 2,753​​​Less: Net income (loss) attributable to noncontrolling interests​​ (1)​​ 2​​ 2​​ ​​​​​​​​​ ​​​​​​​​​ (1)​​ 2​​ 2​​​Net Income Attributable to Deere & Company​$ 6,251​$ 5,082​$ 2,185​$ 880​$ 881​$ 566​​ ​​​ ​​​ ​​$ 7,131​$ 5,963​$ 2,751​​​​​1 Elimination of financial services' interest income earned from equipment operations. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6).3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets.4 Elimination of intercompany service fees.5 Elimination of equipment operations' interest expense to financial services.6 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.7 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets.​​​​39 Table of Contents Table of Contents Table of Contents ​SUPPLEMENTAL CONSOLIDATING DATA​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​INCOME STATEMENTS​​​For the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL ​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2022​2021​2020​2022​2021​2020​2022​2021​2020​2022​2021​2020​​​Net Sales and Revenues​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net sales​$ 47,917​$ 39,737​$ 31,272​​​​​​​​​​​​​​​​​​​$ 47,917​$ 39,737​$ 31,272​​​Finance and interest income​​ 213​​ 133​​ 112​$ 3,583​$ 3,442​$ 3,610​$ (431)​$ (279)​$ (272)​​ 3,365​​ 3,296​​ 3,450​ 1​​Other income​​ 1,261​​ 941​​ 808​​ 502​​ 352​​ 257​​ (468)​​ (302)​​ (247)​​ 1,295​​ 991​​ 818​2, 3​​Total​​ 49,391​​ 40,811​​ 32,192​​4,085​​ 3,794​​ 3,867​​ (899)​​ (581)​​ (519)​​ 52,577​​ 44,024​​ 35,540​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cost of sales​​ 35,341​​ 29,119​​ 23,679​​ ​​​​​​​​​ (3)​​ (3)​​ (2)​​ 35,338​​ 29,116​​ 23,677​ 4​​Research and development expenses​​ 1,912​​ 1,587​​ 1,644​​ ​​​​​​​​​ ​​​ ​​​​​​ 1,912​​ 1,587​​ 1,644​​​Selling, administrative and general expenses​​ 3,137​​ 2,887​​ 2,878​​ 735​​ 504​​ 606​​ (9)​​ (8)​​ (7)​​ 3,863​​ 3,383​​ 3,477​ 4​​Interest expense​​ 390​​ 368​​ 329​​ 799​​ 687​​ 942​​ (127)​​ (62)​​ (24)​​ 1,062​​ 993​​ 1,247​ 5​​Interest compensation to Financial Services​​ 299​​ 217​​ 248​​ ​​​ ​​​​​​ (299)​​ (217)​​ (248)​​ ​​​ ​​​ ​​ 5​​Other operating expenses​​ 350​​ 181​​ 278​​ 1,386​​ 1,453​​ 1,572​​ (461)​​ (291)​​ (238)​​ 1,275​​ 1,343​​ 1,612​6, 7​​Total​​ 41,429​​ 34,359​​ 29,056​​ 2,920​​ 2,644​​ 3,120​​ (899)​​ (581)​​ (519)​​ 43,450​​ 36,422​​ 31,657​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income before Income Taxes​​ 7,962​​ 6,452​​ 3,136​​ 1,165​​ 1,150​​ 747​​ ​​​ ​​​ ​​​ 9,127​​ 7,602​​ 3,883​​​Provision for income taxes​​ 1,718​​ 1,386​​ 899​​ 289​​ 272​​ 183​​ ​​​​​​​​​ 2,007​​ 1,658​​ 1,082​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income after Income Taxes​​ 6,244​​ 5,066​​ 2,237​​ 876​​ 878​​ 564​​ ​​​ ​​​ ​​​ 7,120​​ 5,944​​ 2,801​​​Equity in income (loss) of unconsolidated affiliates​​ 6​​ 18​​ (50)​​ 4​​ 3​​ 2​​ ​​​​​​​​​ 10​​ 21​​ (48)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Income​​ 6,250​ ​ 5,084​​ 2,187​​ 880​​ 881​​ 566​​ ​​​ ​​​ ​​​ 7,130​​ 5,965​​ 2,753​​​Less: Net income (loss) attributable to noncontrolling interests​​ (1)​​ 2​​ 2​​ ​​​​​​​​​ ​​​​​​​​​ (1)​​ 2​​ 2​​​Net Income Attributable to Deere & Company​$ 6,251​$ 5,082​$ 2,185​$ 880​$ 881​$ 566​​ ​​​ ​​​ ​​$ 7,131​$ 5,963​$ 2,751​​​​​1 Elimination of financial services' interest income earned from equipment operations. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6).3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets.4 Elimination of intercompany service fees.5 Elimination of equipment operations' interest expense to financial services.6 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.7 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets.​​​​ ​ --- ## No Match in Current: SUPPLEMENTAL CONSOLIDATING DATA *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: CONSOLIDATED *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ --- ## No Match in Current: CONSOLIDATED *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ --- ## No Match in Current: LIABILITIES *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings ​ $ 1,040 ​ $ 1,509 ​ $ 11,552 ​ $ 9,410 ​ ​ ​ ​ ​ ​ ​ $ 12,592 ​ $ 10,919 ​ ​ ​ Short-term securitization borrowings ​ ​ ​ ​ ​ 10 ​ ​ 5,711 ​ ​ 4,595 ​ ​ ​ ​ ​ ​ ​ ​ 5,711 ​ ​ 4,605 ​ ​ ​ Payables to Equipment Operations ​ ​ ​ ​ ​ 6,569 ​ 5,564 ​ $ (6,569) ​ $ (5,564) ​ ​ ​ ​ ​ 8​ ​ Accounts payable and accrued expenses ​ 12,962 ​ 11,198 ​ 3,170 ​ 2,015 ​ (1,310) ​ (865) ​ 14,822 ​ 12,348 ​ 9​ ​ Deferred income taxes ​ 380 ​ 438 ​ 276 ​ 369 ​ (161) ​ (231) ​ 495 ​ 576 ​ 11​ ​ Long-term borrowings ​ 7,917 ​ 8,915 ​ 25,679 ​ 23,973 ​ ​ ​ ​ ​ 33,596 ​ 32,888 ​ ​ ​ Retirement benefits and other liabilities ​ 2,351 ​ 4,239 ​ 108 ​ 107 ​ (2) ​ (2) ​ 2,457 ​ 4,344 ​ 10​ ​ Total liabilities ​ 24,650 ​ 26,309 ​ 53,065 ​ 46,033 ​ (8,042) ​ (6,662) ​ 69,673 ​ 65,680 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 20) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interest (Note 3) ​ ​ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: CONSOLIDATED *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ --- ## No Match in Current: Total cash, cash equivalents, and restricted cash *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ $ 3,781 ​ $ 7,200 ​ $ 6,156 ​ $ 1,160 ​ $ 925 ​ $ 1,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 4,941 ​ $ 8,125 ​ $ 7,172 ​ ​ ​ ​ ​ 13 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6). 14 Reclassification of share-based compensation expense. 15 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities, and capital investments in financial services from the equipment operations. 16 Primarily reclassification of receivables related to the sale of equipment. 17 Reclassification of direct lease agreements with retail customers. 18 Reclassification of sales incentive accruals on receivables sold to financial services 19 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts. ​ 41 41 41 Table of Contents​FINANCIAL INSTRUMENT MARKET RISK INFORMATIONThe company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to manage certain of these exposures that arise in the normal course of business and not for the purpose of creating speculative positions or trading. The company's financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations while responding to favorable financing opportunities. In addition, the company has interest rate exposure at certain equipment operations units for sales incentive programs. Accordingly, from time to time, these operations enter into interest rate swap agreements to manage their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. The company has entered into derivative agreements related to the management of these foreign currency transaction risks.Interest Rate RiskInterest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Quarterly, the company uses a combination of cash flow models to assess the sensitivity of its financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows: cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio, cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads, cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers, cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates. The net impact in these financial instruments' fair values which would be caused by increasing or decreasing the interest rates by 10 percent from the market rates at October 30, 2022 and October 31, 2021 would have been approximately $50 million and $20 million, respectively.The company continues to transition its financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates. These transition activities are not expected to have a material impact on the company's financial statements.Foreign Currency RiskIn the equipment operations, the company's practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, the company estimates that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2023 would decrease the 2023 expected net cash inflows by approximately $125 million, with the estimated impacts by currency as follows: ​​​​​​(In millions of dollars)​2023​Australian dollar​$ (100)​Brazilian real​​ (150)​British pound​​ (25)​Canadian dollar​​ (25)​Euro​​ 50​Japanese yen​​ 125​Mexican peso​​ 25​All other​​ (25)​Total increase (decrease)​$ (125)​​At October 31, 2021, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $110 million decrease on the 2022 net cash inflows.In the financial services operations, the company's policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.​​​​​42 Table of Contents​ Table of Contents Table of Contents ​ FINANCIAL INSTRUMENT MARKET RISK INFORMATIONThe company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to manage certain of these exposures that arise in the normal course of business and not for the purpose of creating speculative positions or trading. The company's financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations while responding to favorable financing opportunities. In addition, the company has interest rate exposure at certain equipment operations units for sales incentive programs. Accordingly, from time to time, these operations enter into interest rate swap agreements to manage their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. The company has entered into derivative agreements related to the management of these foreign currency transaction risks.Interest Rate RiskInterest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Quarterly, the company uses a combination of cash flow models to assess the sensitivity of its financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows: cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio, cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads, cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers, cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates. The net impact in these financial instruments' fair values which would be caused by increasing or decreasing the interest rates by 10 percent from the market rates at October 30, 2022 and October 31, 2021 would have been approximately $50 million and $20 million, respectively.The company continues to transition its financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates. These transition activities are not expected to have a material impact on the company's financial statements.Foreign Currency RiskIn the equipment operations, the company's practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, the company estimates that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2023 would decrease the 2023 expected net cash inflows by approximately $125 million, with the estimated impacts by currency as follows: ​​​​​​(In millions of dollars)​2023​Australian dollar​$ (100)​Brazilian real​​ (150)​British pound​​ (25)​Canadian dollar​​ (25)​Euro​​ 50​Japanese yen​​ 125​Mexican peso​​ 25​All other​​ (25)​Total increase (decrease)​$ (125)​​At October 31, 2021, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $110 million decrease on the 2022 net cash inflows.In the financial services operations, the company's policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.​​​​​ FINANCIAL INSTRUMENT MARKET RISK INFORMATIONThe company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to manage certain of these exposures that arise in the normal course of business and not for the purpose of creating speculative positions or trading. The company's financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations while responding to favorable financing opportunities. In addition, the company has interest rate exposure at certain equipment operations units for sales incentive programs. Accordingly, from time to time, these operations enter into interest rate swap agreements to manage their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. The company has entered into derivative agreements related to the management of these foreign currency transaction risks.Interest Rate RiskInterest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Quarterly, the company uses a combination of cash flow models to assess the sensitivity of its financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows: cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio, cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads, cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers, cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates. The net impact in these financial instruments' fair values which would be caused by increasing or decreasing the interest rates by 10 percent from the market rates at October 30, 2022 and October 31, 2021 would have been approximately $50 million and $20 million, respectively.The company continues to transition its financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates. These transition activities are not expected to have a material impact on the company's financial statements.Foreign Currency RiskIn the equipment operations, the company's practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, the company estimates that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2023 would decrease the 2023 expected net cash inflows by approximately $125 million, with the estimated impacts by currency as follows: ​​​​​​(In millions of dollars)​2023​Australian dollar​$ (100)​Brazilian real​​ (150)​British pound​​ (25)​Canadian dollar​​ (25)​Euro​​ 50​Japanese yen​​ 125​Mexican peso​​ 25​All other​​ (25)​Total increase (decrease)​$ (125)​​At October 31, 2021, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $110 million decrease on the 2022 net cash inflows.In the financial services operations, the company's policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.​​​​​ FINANCIAL INSTRUMENT MARKET RISK INFORMATIONThe company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to manage certain of these exposures that arise in the normal course of business and not for the purpose of creating speculative positions or trading. The company's financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations while responding to favorable financing opportunities. In addition, the company has interest rate exposure at certain equipment operations units for sales incentive programs. Accordingly, from time to time, these operations enter into interest rate swap agreements to manage their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. The company has entered into derivative agreements related to the management of these foreign currency transaction risks.Interest Rate RiskInterest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Quarterly, the company uses a combination of cash flow models to assess the sensitivity of its financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows: cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio, cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads, cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers, cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates. The net impact in these financial instruments' fair values which would be caused by increasing or decreasing the interest rates by 10 percent from the market rates at October 30, 2022 and October 31, 2021 would have been approximately $50 million and $20 million, respectively.The company continues to transition its financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates. These transition activities are not expected to have a material impact on the company's financial statements. --- ## No Match in Current: FINANCIAL INSTRUMENT MARKET RISK INFORMATION *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* The company is naturally exposed to various interest rate and foreign currency risks. As a result, the company enters into derivative transactions to manage certain of these exposures that arise in the normal course of business and not for the purpose of creating speculative positions or trading. The company's financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations while responding to favorable financing opportunities. In addition, the company has interest rate exposure at certain equipment operations units for sales incentive programs. Accordingly, from time to time, these operations enter into interest rate swap agreements to manage their interest rate exposure. The company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. The company has entered into derivative agreements related to the management of these foreign currency transaction risks. --- ## No Match in Current: Interest Rate Risk *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023. Quarterly, the company uses a combination of cash flow models to assess the sensitivity of its financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows: cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio, cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads, cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers, cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers, and cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates. The net impact in these financial instruments' fair values which would be caused by increasing or decreasing the interest rates by 10 percent from the market rates at October 30, 2022 and October 31, 2021 would have been approximately $50 million and $20 million, respectively. The company continues to transition its financing, funding, and hedging portfolios from the London Interbank Offered Rate (LIBOR) to alternative reference rates. These transition activities are not expected to have a material impact on the company's financial statements. Foreign Currency RiskIn the equipment operations, the company's practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, the company estimates that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2023 would decrease the 2023 expected net cash inflows by approximately $125 million, with the estimated impacts by currency as follows: ​​​​​​(In millions of dollars)​2023​Australian dollar​$ (100)​Brazilian real​​ (150)​British pound​​ (25)​Canadian dollar​​ (25)​Euro​​ 50​Japanese yen​​ 125​Mexican peso​​ 25​All other​​ (25)​Total increase (decrease)​$ (125)​​At October 31, 2021, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $110 million decrease on the 2022 net cash inflows.In the financial services operations, the company's policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.​​​​​ --- ## No Match in Current: Foreign Currency Risk *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* In the equipment operations, the company's practice is to hedge significant currency exposures. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, the company estimates that a hypothetical 10 percent strengthening of the U.S. dollar relative to other currencies through 2023 would decrease the 2023 expected net cash inflows by approximately $125 million, with the estimated impacts by currency as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions of dollars) ​ 2023 ​ Australian dollar ​ $ (100) ​ Brazilian real ​ ​ (150) ​ British pound ​ ​ (25) ​ Canadian dollar ​ ​ (25) ​ Euro ​ ​ 50 ​ Japanese yen ​ ​ 125 ​ Mexican peso ​ ​ 25 ​ All other ​ ​ (25) ​ Total increase (decrease) ​ $ (125) ​ ​ At October 31, 2021, a hypothetical 10 percent strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $110 million decrease on the 2022 net cash inflows. In the financial services operations, the company's policy is to manage foreign currency risk through hedging strategies if the currency of the borrowings does not match the currency of the receivable portfolio. As a result, a hypothetical 10 percent adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows. ​ ​ ​ ​ ​ 42 42 42 Table of ContentsDEERE & COMPANYSTATEMENTS OF CONSOLIDATED INCOMEFor the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020(In millions of dollars and shares except per share amounts)​​​​​​​​​​​​ 2022 2021 2020 Net Sales and Revenues​​​​​​​​​​Net sales ​$ 47,917​$ 39,737​$ 31,272​Finance and interest income ​ 3,365​ 3,296​ 3,450​Other income ​ 1,295​ 991​ 818​Total ​ 52,577​ 44,024​ 35,540​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​Cost of sales ​ 35,338​ 29,116​ 23,677​Research and development expenses ​ 1,912​ 1,587​ 1,644​Selling, administrative and general expenses ​ 3,863​ 3,383​ 3,477​Interest expense ​ 1,062​ 993​ 1,247​Other operating expenses ​ 1,275​ 1,343​ 1,612​Total ​ 43,450​ 36,422​ 31,657​​​​​​​​​​​​Income of Consolidated Group before Income Taxes ​ 9,127​ 7,602​ 3,883​Provision for income taxes ​ 2,007​ 1,658​ 1,082​​​​​​​​​​​​Income of Consolidated Group ​ 7,120​ 5,944​ 2,801​Equity in income (loss) of unconsolidated affiliates​ 10​ 21​ (48)​​​​​​​​​​​​Net Income ​ 7,130​ 5,965​ 2,753​Less: Net income (loss) attributable to noncontrolling interests​ (1)​ 2​ 2​Net Income Attributable to Deere & Company ​$ 7,131​$ 5,963​$ 2,751​​​​​​​​​​​​Per Share Data​​​​​​​​​​Basic ​$23.42 ​$ 19.14​$ 8.77​Diluted ​$23.28 ​$ 18.99​$ 8.69​Dividends declared ​$4.36 ​$ 3.61​$ 3.04​Dividends paid​$4.28 ​$ 3.32​$ 3.04​​​​​​​​​​​​Average Shares Outstanding​​​​​​​​​​Basic ​ 304.5 ​ 311.6​ 313.5​Diluted ​ 306.3 ​ 314.0​ 316.6​​The notes to consolidated financial statements are an integral part of this statement.​43 Table of Contents Table of Contents Table of Contents DEERE & COMPANYSTATEMENTS OF CONSOLIDATED INCOMEFor the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020(In millions of dollars and shares except per share amounts)​​​​​​​​​​​​ 2022 2021 2020 Net Sales and Revenues​​​​​​​​​​Net sales ​$ 47,917​$ 39,737​$ 31,272​Finance and interest income ​ 3,365​ 3,296​ 3,450​Other income ​ 1,295​ 991​ 818​Total ​ 52,577​ 44,024​ 35,540​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​Cost of sales ​ 35,338​ 29,116​ 23,677​Research and development expenses ​ 1,912​ 1,587​ 1,644​Selling, administrative and general expenses ​ 3,863​ 3,383​ 3,477​Interest expense ​ 1,062​ 993​ 1,247​Other operating expenses ​ 1,275​ 1,343​ 1,612​Total ​ 43,450​ 36,422​ 31,657​​​​​​​​​​​​Income of Consolidated Group before Income Taxes ​ 9,127​ 7,602​ 3,883​Provision for income taxes ​ 2,007​ 1,658​ 1,082​​​​​​​​​​​​Income of Consolidated Group ​ 7,120​ 5,944​ 2,801​Equity in income (loss) of unconsolidated affiliates​ 10​ 21​ (48)​​​​​​​​​​​​Net Income ​ 7,130​ 5,965​ 2,753​Less: Net income (loss) attributable to noncontrolling interests​ (1)​ 2​ 2​Net Income Attributable to Deere & Company ​$ 7,131​$ 5,963​$ 2,751​​​​​​​​​​​​Per Share Data​​​​​​​​​​Basic ​$23.42 ​$ 19.14​$ 8.77​Diluted ​$23.28 ​$ 18.99​$ 8.69​Dividends declared ​$4.36 ​$ 3.61​$ 3.04​Dividends paid​$4.28 ​$ 3.32​$ 3.04​​​​​​​​​​​​Average Shares Outstanding​​​​​​​​​​Basic ​ 304.5 ​ 311.6​ 313.5​Diluted ​ 306.3 ​ 314.0​ 316.6​​The notes to consolidated financial statements are an integral part of this statement.​ DEERE & COMPANY --- ## No Match in Current: For the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020 *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ (In millions of dollars) Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ --- ## No Match in Current: Net Sales and Revenues *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 47,917 ​ $ 39,737 ​ $ 31,272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 47,917 ​ $ 39,737 ​ $ 31,272 ​ ​ ​ Finance and interest income ​ ​ 213 ​ ​ 133 ​ ​ 112 ​ $ 3,583 ​ $ 3,442 ​ $ 3,610 ​ $ (431) ​ $ (279) ​ $ (272) ​ ​ 3,365 ​ ​ 3,296 ​ ​ 3,450 ​ 1​ ​ Other income ​ ​ 1,261 ​ ​ 941 ​ ​ 808 ​ ​ 502 ​ ​ 352 ​ ​ 257 ​ ​ (468) ​ ​ (302) ​ ​ (247) ​ ​ 1,295 ​ ​ 991 ​ ​ 818 ​ 2, 3​ ​ Total ​ ​ 49,391 ​ ​ 40,811 ​ ​ 32,192 ​ ​ 4,085 ​ ​ 3,794 ​ ​ 3,867 ​ ​ (899) ​ ​ (581) ​ ​ (519) ​ ​ 52,577 ​ ​ 44,024 ​ ​ 35,540 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: Costs and Expenses *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 35,341 ​ ​ 29,119 ​ ​ 23,679 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3) ​ ​ (3) ​ ​ (2) ​ ​ 35,338 ​ ​ 29,116 ​ ​ 23,677 ​ 4​ ​ Research and development expenses ​ ​ 1,912 ​ ​ 1,587 ​ ​ 1,644 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,912 ​ ​ 1,587 ​ ​ 1,644 ​ ​ ​ Selling, administrative and general expenses ​ ​ 3,137 ​ ​ 2,887 ​ ​ 2,878 ​ ​ 735 ​ ​ 504 ​ ​ 606 ​ ​ (9) ​ ​ (8) ​ ​ (7) ​ ​ 3,863 ​ ​ 3,383 ​ ​ 3,477 ​ 4​ ​ Interest expense ​ ​ 390 ​ ​ 368 ​ ​ 329 ​ ​ 799 ​ ​ 687 ​ ​ 942 ​ ​ (127) ​ ​ (62) ​ ​ (24) ​ ​ 1,062 ​ ​ 993 ​ ​ 1,247 ​ 5​ ​ Interest compensation to Financial Services ​ ​ 299 ​ ​ 217 ​ ​ 248 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (299) ​ ​ (217) ​ ​ (248) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5​ ​ Other operating expenses ​ ​ 350 ​ ​ 181 ​ ​ 278 ​ ​ 1,386 ​ ​ 1,453 ​ ​ 1,572 ​ ​ (461) ​ ​ (291) ​ ​ (238) ​ ​ 1,275 ​ ​ 1,343 ​ ​ 1,612 ​ 6, 7​ ​ Total ​ ​ 41,429 ​ ​ 34,359 ​ ​ 29,056 ​ ​ 2,920 ​ ​ 2,644 ​ ​ 3,120 ​ ​ (899) ​ ​ (581) ​ ​ (519) ​ ​ 43,450 ​ ​ 36,422 ​ ​ 31,657 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: Income of Consolidated Group before Income Taxes *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ 9,127 ​ 7,602 ​ 3,883 ​ Provision for income taxes ​ 2,007 ​ 1,658 ​ 1,082 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: Income of Consolidated Group *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ 7,120 ​ 5,944 ​ 2,801 ​ Equity in income (loss) of unconsolidated affiliates ​ 10 ​ 21 ​ (48) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ 7,130 ​ 5,965 ​ 2,753 ​ Less: Net income (loss) attributable to noncontrolling interests ​ (1) ​ 2 ​ 2 ​ --- ## No Match in Current: Net Income Attributable to Deere & Company *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ $ 6,251 ​ $ 5,082 ​ $ 2,185 ​ $ 880 ​ $ 881 ​ $ 566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,131 ​ $ 5,963 ​ $ 2,751 ​ ​ ​ ​ ​ 1 Elimination of financial services' interest income earned from equipment operations. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6). 3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets. 4 Elimination of intercompany service fees. 5 Elimination of equipment operations' interest expense to financial services. 6 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases. 7 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets. ​ ​ ​ ​ 39 39 39 Table of ContentsSUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 30, 2022 and October 31, 2021​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2022 2021​2022 2021​2022 2021​2022 2021​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 3,767​$ 7,188​$ 1,007​$ 829​​ ​​​ ​​$ 4,774​$ 8,017​​​Marketable securities ​ 61​ 3​ 673​ 725​ ​​ ​​ 734​ 728​​​Receivables from Financial Services ​ 6,569​ 5,564​ ​​ ​​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Trade accounts and notes receivable - net ​ 1,273​ 1,155​ 6,434​ 3,895​ (1,297)​ (842)​ 6,410​ 4,208​ 9​​Financing receivables - net ​ 47​ 73​ 36,587​ 33,726​ ​​ ​​ 36,634​ 33,799​​​Financing receivables securitized - net ​​ ​​​ 10​​ 5,936​​ 4,649​​ ​​​ ​​​ 5,936​​ 4,659​​​Other receivables ​ 1,670​ 1,629​ 832​ 159​ (10)​ (23)​ 2,492​ 1,765​ 9​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,623​​ 6,988​​ ​​​ ​​​ 6,623​​ 6,988​​​Inventories ​ 8,495​ 6,781​ ​​ ​​ ​​ ​​ 8,495​ 6,781​​​Property and equipment - net ​ 6,021​ 5,783​ 35​ 37​ ​​ ​​ 6,056​ 5,820​​​Goodwill ​ 3,687​ 3,291​ ​​ ​​ ​​ ​​ 3,687​ 3,291​​​Other intangible assets - net ​ 1,218​ 1,275​ ​​ ​​ ​​ ​​ 1,218​ 1,275​​​Retirement benefits ​ 3,666​ 3,539​ 66​ 64​ (2)​ (2)​ 3,730​ 3,601​ 10​​Deferred income taxes ​ 940​ 1,215​ 45​ 53​ (161)​ (231)​ 824​ 1,037​ 11​​Other assets ​ 1,794​ 1,646​ 626​ 499​ (3)​ ​​ 2,417​ 2,145​​​Total Assets ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,040​$ 1,509​$ 11,552​$ 9,410​​ ​​​ ​​$ 12,592​$ 10,919​​​Short-term securitization borrowings ​​ ​​​ 10​​ 5,711​​ 4,595​​ ​​​ ​​​ 5,711​​ 4,605​​​Payables to Equipment Operations ​ ​​ ​​ 6,569​ 5,564​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Accounts payable and accrued expenses ​ 12,962​ 11,198​ 3,170​ 2,015​ (1,310)​ (865)​ 14,822​ 12,348​ 9​​Deferred income taxes ​ 380​ 438​ 276​ 369​ (161)​ (231)​ 495​ 576​ 11​​Long-term borrowings ​ 7,917​ 8,915​ 25,679​ 23,973​ ​​ ​​ 33,596​ 32,888​​​Retirement benefits and other liabilities ​ 2,351​ 4,239​ 108​ 107​ (2)​ (2)​ 2,457​ 4,344​ 10​​Total liabilities ​ 24,650​ 26,309​ 53,065​ 46,033​ (8,042)​ (6,662)​ 69,673​ 65,680​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 92​​ ​​​ ​​​ ​​​ ​​​​​​ 92​​ ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 20,262​ 18,431​ 5,799​ 5,591​ (5,799)​ (5,591)​ 20,262​ 18,431​ 12​​Noncontrolling interests ​ 3​ 3​ ​​ ​​ ​​ ​​ 3​ 3​​​Financial Services' equity​​ (5,799)​​ (5,591)​​ ​​​ ​​​ 5,799​​ 5,591​​ ​​​ ​​ 12​​Adjusted total stockholders' equity​ 14,466​ 12,843​ 5,799​ 5,591​ ​​ ​​ 20,265​ 18,434​​​Total Liabilities and Stockholders' Equity ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​8 Elimination of receivables / payables between equipment operations and financial services.9 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 10 Reclassification of net pension assets / liabilities.11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.12 Elimination of financial services' equity.​40 Table of Contents Table of Contents Table of Contents SUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 30, 2022 and October 31, 2021​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2022 2021​2022 2021​2022 2021​2022 2021​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 3,767​$ 7,188​$ 1,007​$ 829​​ ​​​ ​​$ 4,774​$ 8,017​​​Marketable securities ​ 61​ 3​ 673​ 725​ ​​ ​​ 734​ 728​​​Receivables from Financial Services ​ 6,569​ 5,564​ ​​ ​​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Trade accounts and notes receivable - net ​ 1,273​ 1,155​ 6,434​ 3,895​ (1,297)​ (842)​ 6,410​ 4,208​ 9​​Financing receivables - net ​ 47​ 73​ 36,587​ 33,726​ ​​ ​​ 36,634​ 33,799​​​Financing receivables securitized - net ​​ ​​​ 10​​ 5,936​​ 4,649​​ ​​​ ​​​ 5,936​​ 4,659​​​Other receivables ​ 1,670​ 1,629​ 832​ 159​ (10)​ (23)​ 2,492​ 1,765​ 9​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,623​​ 6,988​​ ​​​ ​​​ 6,623​​ 6,988​​​Inventories ​ 8,495​ 6,781​ ​​ ​​ ​​ ​​ 8,495​ 6,781​​​Property and equipment - net ​ 6,021​ 5,783​ 35​ 37​ ​​ ​​ 6,056​ 5,820​​​Goodwill ​ 3,687​ 3,291​ ​​ ​​ ​​ ​​ 3,687​ 3,291​​​Other intangible assets - net ​ 1,218​ 1,275​ ​​ ​​ ​​ ​​ 1,218​ 1,275​​​Retirement benefits ​ 3,666​ 3,539​ 66​ 64​ (2)​ (2)​ 3,730​ 3,601​ 10​​Deferred income taxes ​ 940​ 1,215​ 45​ 53​ (161)​ (231)​ 824​ 1,037​ 11​​Other assets ​ 1,794​ 1,646​ 626​ 499​ (3)​ ​​ 2,417​ 2,145​​​Total Assets ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,040​$ 1,509​$ 11,552​$ 9,410​​ ​​​ ​​$ 12,592​$ 10,919​​​Short-term securitization borrowings ​​ ​​​ 10​​ 5,711​​ 4,595​​ ​​​ ​​​ 5,711​​ 4,605​​​Payables to Equipment Operations ​ ​​ ​​ 6,569​ 5,564​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Accounts payable and accrued expenses ​ 12,962​ 11,198​ 3,170​ 2,015​ (1,310)​ (865)​ 14,822​ 12,348​ 9​​Deferred income taxes ​ 380​ 438​ 276​ 369​ (161)​ (231)​ 495​ 576​ 11​​Long-term borrowings ​ 7,917​ 8,915​ 25,679​ 23,973​ ​​ ​​ 33,596​ 32,888​​​Retirement benefits and other liabilities ​ 2,351​ 4,239​ 108​ 107​ (2)​ (2)​ 2,457​ 4,344​ 10​​Total liabilities ​ 24,650​ 26,309​ 53,065​ 46,033​ (8,042)​ (6,662)​ 69,673​ 65,680​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 92​​ ​​​ ​​​ ​​​ ​​​​​​ 92​​ ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 20,262​ 18,431​ 5,799​ 5,591​ (5,799)​ (5,591)​ 20,262​ 18,431​ 12​​Noncontrolling interests ​ 3​ 3​ ​​ ​​ ​​ ​​ 3​ 3​​​Financial Services' equity​​ (5,799)​​ (5,591)​​ ​​​ ​​​ 5,799​​ 5,591​​ ​​​ ​​ 12​​Adjusted total stockholders' equity​ 14,466​ 12,843​ 5,799​ 5,591​ ​​ ​​ 20,265​ 18,434​​​Total Liabilities and Stockholders' Equity ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​8 Elimination of receivables / payables between equipment operations and financial services.9 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 10 Reclassification of net pension assets / liabilities.11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.12 Elimination of financial services' equity.​ --- ## No Match in Current: Per Share Data *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 23.42 ​ $ 19.14 ​ $ 8.77 ​ Diluted ​ $ 23.28 ​ $ 18.99 ​ $ 8.69 ​ Dividends declared ​ $ 4.36 ​ $ 3.61 ​ $ 3.04 ​ Dividends paid ​ $ 4.28 ​ $ 3.32 ​ $ 3.04 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## No Match in Current: Average Shares Outstanding *This section from the 2022 filing does not have a high-confidence textual match in 2023. It may have been removed, merged, or substantially reworded.* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 304.5 ​ 311.6 ​ 313.5 ​ Diluted ​ 306.3 ​ 314.0 ​ 316.6 ​ ​ The notes to consolidated financial statements are an integral part of this statement. ​ 43 43 43 --- ## Modified: Cash, Cash Equivalents, and Restricted Cash at End of Year **Key changes:** - Reworded sentence: "​ $ 5,755 ​ $ 3,781 ​ $ 7,200 ​ $ 1,865 ​ $ 1,160 ​ $ 925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,620 ​ $ 4,941 ​ $ 8,125 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ $ 3,781 ​ $ 7,200 ​ $ 6,156 ​ $ 1,160 ​ $ 925 ​ $ 1,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 4,941 ​ $ 8,125 ​ $ 7,172 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ $ 5,755 ​ $ 3,781 ​ $ 7,200 ​ $ 1,865 ​ $ 1,160 ​ $ 925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,620 ​ $ 4,941 ​ $ 8,125 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Because the financial services segment provides financing for a significant portion of our sales worldwide, negative economic conditions in the financial industry could materially impact our operations and financial results. **Key changes:** - Reworded sentence: "The financial services segment provides financing for a significant portion of our sales worldwide." - Reworded sentence: "The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity." **Prior (2022):** Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of John Deere's sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed its expectations and adversely affect its financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support its financing activities could have a material adverse effect on John Deere's business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed its expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity. **Current (2023):** Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of our sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed our expectations and adversely affect our financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support our financing activities could have a material adverse effect on our business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity. --- ## Modified: Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash **Key changes:** - Reworded sentence: "​ ​ 1,974 ​ ​ (3,419) ​ ​ 1,044 ​ ​ 705 ​ ​ 235 ​ ​ (91) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,679 ​ ​ (3,184) ​ ​ 953 ​ ​ ​" **Prior (2022):** ​ ​ (3,419) ​ ​ 1,044 ​ ​ 2,960 ​ ​ 235 ​ ​ (91) ​ ​ 256 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,184) ​ ​ 953 ​ ​ 3,216 ​ ​ ​ **Current (2023):** ​ ​ 1,974 ​ ​ (3,419) ​ ​ 1,044 ​ ​ 705 ​ ​ 235 ​ ​ (91) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,679 ​ ​ (3,184) ​ ​ 953 ​ ​ ​ --- ## Modified: Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business. **Key changes:** - Reworded sentence: "We are subject to income taxes in the U.S." - Reworded sentence: "Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions." - Reworded sentence: "Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations." **Prior (2022):** John Deere is subject to income taxes in the U.S. and numerous foreign jurisdictions. John Deere's domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. John Deere's effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If John Deere's effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, John Deere's operating results, cash flows, and financial condition could be adversely affected. **Current (2023):** We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If our effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected. --- ## Modified: We are subject to governmental laws, regulations, and other legal obligations related to privacy and data protection. Any inability or perceived inability of addressing these requirements could adversely affect our business. **Key changes:** - Reworded sentence: "We collect personal information and other data as integral parts of our business processes and activities." - Reworded sentence: "Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions." - Reworded sentence: "Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business." **Prior (2022):** The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. John Deere collects personal information and other data as integral parts of its business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the European Union, China, Canada, and other relevant jurisdictions where John Deere conducts business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The European Union General Data Protection Regulation, the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to the Company or Company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business. **Current (2023):** The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. We collect personal information and other data as integral parts of our business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The EU General Data Protection Regulation (GDPR), the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business. --- ## Modified: We could be impacted by changes to or reallocation of radio frequency (RF) bands which could disrupt or degrade the reliability of our high precision augmented Global Positioning System (GPS) or other RF technology, which could impair our ability to develop and market GPS- and RF-based technology solutions, as well as significantly reduce agricultural and construction customers' profitability. **Key changes:** - Reworded sentence: "Our current and planned integrated agricultural business and equipment management systems, as well as our fleet management telematics solutions for construction equipment, depend upon the use of RF signals." - Reworded sentence: "Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions." **Prior (2022):** John Deere's current and planned integrated agricultural business and equipment management systems, as well as its fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of John Deere's GPS-based products, which could negatively affect John Deere's ability to develop and market GPS-based technology solutions. For John Deere's agricultural customers, the inability to use high-precision augmented GPS signals or other RF signals could result in lower crop yields and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, disrupting GPS or RF applications could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability and demand for John Deere products. **Current (2023):** Our current and planned integrated agricultural business and equipment management systems, as well as our fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions. In addition, disruptions with GPS signals or the failure of telecommunications network operators to supply the bandwidth we need to support our products could interfere with the speed, availability, and usability of our equipment and services. If these GPS signals or RF signals become unavailable, our customers could be unable to use their equipment indefinitely. For our agricultural customers, this could result in lower crop yields, decreased operational efficiency, and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, this could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability, sustainability, and demand for our products. As a result, our sales and revenue could significantly decrease, which would have a material adverse effect on our results of operations and our business. --- ## Modified: Components of Cash, Cash Equivalents, and Restricted Cash **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 5,720 ​ $ 3,767 ​ $ 7,188 ​ $ 1,738 ​ $ 1,007 ​ $ 829 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,458 ​ $ 4,774 ​ $ 8,017 ​ ​ ​ Restricted cash (Other assets) ​ ​ 35 ​ ​ 14 ​ ​ 12 ​ ​ 127 ​ ​ 153 ​ ​ 96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 162 ​ ​ 167 ​ ​ 108 ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 3,767 ​ $ 7,188 ​ $ 6,145 ​ $ 1,007 ​ $ 829 ​ $ 921 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 4,774 ​ $ 8,017 ​ $ 7,066 ​ ​ ​ Restricted cash (Other assets) ​ ​ 14 ​ ​ 12 ​ ​ 11 ​ ​ 153 ​ ​ 96 ​ ​ 95 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 167 ​ ​ 108 ​ ​ 106 ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 5,720 ​ $ 3,767 ​ $ 7,188 ​ $ 1,738 ​ $ 1,007 ​ $ 829 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,458 ​ $ 4,774 ​ $ 8,017 ​ ​ ​ Restricted cash (Other assets) ​ ​ 35 ​ ​ 14 ​ ​ 12 ​ ​ 127 ​ ​ 153 ​ ​ 96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 162 ​ ​ 167 ​ ​ 108 ​ ​ ​ --- ## Modified: Changes in Internal Control Over Financial Reporting **Key changes:** - Reworded sentence: "During the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting." - Reworded sentence: "The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for our 2024 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting." - Reworded sentence: "Information required by this Item 14, including aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No." - Reworded sentence: "​ 27 27 27 Table of ContentsPART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.​​​​​Page(1) Financial Statements​​​​​Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202144​​​​Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202145​​​​Consolidated Balance Sheets as of October 29, 2023 and October 30, 202246​​​​Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 202147​​​​Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 202348​​​​Notes to Consolidated Financial Statements49​​​(2) Exhibits​​​​​See the "Index to Exhibits" on pages 83 - 86 of this report​​​​​Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K." - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Page (1) Financial Statements ​ ​ ​ ​ ​ Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 44 ​ ​ ​ ​ Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 45 ​ ​ ​ ​ Consolidated Balance Sheets as of October 29, 2023 and October 30, 2022 Consolidated Balance Sheets as of October 29, 2023 and October 30, 2022 46 ​ ​ ​ ​ Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 47 ​ ​ ​ ​ Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 2023 Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 2023 48 ​ ​ ​ ​ Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements 49 ​ ​ ​ (2) Exhibits ​ ​ ​ ​ ​ See the "Index to Exhibits" on pages 83 - 86 of this report ​ ​ ​ ​ ​ Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K." **Prior (2022):** During the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Disclosure Pursuant to Section 13(r) of the Exchange Act. Under Section 13(r) of the Exchange Act, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly conducted transactions or dealing with entities or individuals designated pursuant to certain executive orders issued by the U.S. government. On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service (FSB) as a blocked party under Executive Order 13382. On that same day, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) updated General License No. 1B to authorize certain transactions and activities with the FSB related to the importation, distribution, or use of certain information technology products in the Russian Federation. In the ordinary course of business, during the six-month period ended May 1, 2022, certain of the Company's subsidiaries requested and/or received legally required administrative notifications with the FSB in connection with the importation and/or use of certain of the Company's products in the Russian Federation, as authorized by General License No. 1B. Neither the Company nor its subsidiaries made any payments, nor did they receive gross revenues or net profits, in connection with these activities. The Company expects that in the future certain of its subsidiaries may continue to engage with the FSB in activities necessary to conduct business in the Russian Federation in accordance with applicable U.S. laws and regulations so long as it remains lawful to do so. However, no such activities have been conducted after May 1, 2022. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for the Company's 2023 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers." The Company has adopted a code of ethics that applies to its executives, including its principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and the Company's corporate governance policies are posted on the Company's website at http://www.deere.com/governance. The Company intends to satisfy disclosure requirements regarding amendments to or waivers from its code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of the Company's Board of Directors are available on the Company's website as well. This information is also available in print free of charge to any person who requests it. ITEM 11. EXECUTIVE COMPENSATION. The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Information required by this Item 14, including aggregate fees billed to us by the Company's principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission. 34 ​ 26 26 26 Table of ContentsPART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.​​​​​​Page(1) Financial Statements​​​​​Statements of Consolidated Income for the years ended October 30, 2022, October 31, 2021, and November 1, 202043​​​​Statements of Consolidated Comprehensive Income for the years ended October 30, 2022, October 31, 2021, and November 1, 202044​​​​Consolidated Balance Sheets as of October 30, 2022 and October 31, 202145​​​​Statements of Consolidated Cash Flows for the years ended October 30, 2022, October 31, 2021, and November 1, 202046​​​​Statements of Changes in Consolidated Stockholders' Equity for the years ended November 1, 2020, October 31, 2021, and October 30, 202247​​​​Notes to Consolidated Financial Statements48​​​(2) Exhibits​​​​​See the "Index to Exhibits" on pages 86 - 89 of this report​​​​​Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission.​​​​​Financial Statement Schedules Omitted​​​​​The following schedules for the Company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V.​​​​ITEM 16.FORM 10-K SUMMARY.None.​​​​27 Table of Contents Table of Contents Table of Contents PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.​​​​​​Page(1) Financial Statements​​​​​Statements of Consolidated Income for the years ended October 30, 2022, October 31, 2021, and November 1, 202043​​​​Statements of Consolidated Comprehensive Income for the years ended October 30, 2022, October 31, 2021, and November 1, 202044​​​​Consolidated Balance Sheets as of October 30, 2022 and October 31, 202145​​​​Statements of Consolidated Cash Flows for the years ended October 30, 2022, October 31, 2021, and November 1, 202046​​​​Statements of Changes in Consolidated Stockholders' Equity for the years ended November 1, 2020, October 31, 2021, and October 30, 202247​​​​Notes to Consolidated Financial Statements48​​​(2) Exhibits​​​​​See the "Index to Exhibits" on pages 86 - 89 of this report​​​​​Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission.​​​​​Financial Statement Schedules Omitted​​​​​The following schedules for the Company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V.​​​​ITEM 16.FORM 10-K SUMMARY.None.​​​​ PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Page (1) Financial Statements ​ ​ ​ ​ ​ Statements of Consolidated Income for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 Statements of Consolidated Income for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 43 ​ ​ ​ ​ Statements of Consolidated Comprehensive Income for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 Statements of Consolidated Comprehensive Income for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 44 ​ ​ ​ ​ Consolidated Balance Sheets as of October 30, 2022 and October 31, 2021 Consolidated Balance Sheets as of October 30, 2022 and October 31, 2021 45 ​ ​ ​ ​ Statements of Consolidated Cash Flows for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 Statements of Consolidated Cash Flows for the years ended October 30, 2022, October 31, 2021, and November 1, 2020 46 ​ ​ ​ ​ Statements of Changes in Consolidated Stockholders' Equity for the years ended November 1, 2020, October 31, 2021, and October 30, 2022 Statements of Changes in Consolidated Stockholders' Equity for the years ended November 1, 2020, October 31, 2021, and October 30, 2022 47 ​ ​ ​ ​ Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements 48 ​ ​ ​ (2) Exhibits ​ ​ ​ ​ ​ See the "Index to Exhibits" on pages 86 - 89 of this report ​ ​ ​ ​ ​ Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission. ​ ​ ​ ​ ​ **Current (2023):** During the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Director and Executive Officer Trading Arrangements None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for our 2024 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers." We have adopted a code of ethics that applies to our executives, including our principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and our corporate governance policies are posted on our website at http://www.deere.com/governance. We intend to satisfy disclosure requirements regarding amendments to or waivers from our code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of our Board of Directors are available on our website as well. This information is also available in print free of charge to any person who requests it. ITEM 11. EXECUTIVE COMPENSATION. The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Information required by this Item 14, including aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission. ​ 27 27 27 Table of ContentsPART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.​​​​​Page(1) Financial Statements​​​​​Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202144​​​​Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202145​​​​Consolidated Balance Sheets as of October 29, 2023 and October 30, 202246​​​​Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 202147​​​​Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 202348​​​​Notes to Consolidated Financial Statements49​​​(2) Exhibits​​​​​See the "Index to Exhibits" on pages 83 - 86 of this report​​​​​Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission.​​​​​Financial Statement Schedules Omitted​​​​​The following schedules for the company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V.​​​​ITEM 16.FORM 10-K SUMMARY.None.​​​​28 Table of Contents Table of Contents Table of Contents PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.​​​​​Page(1) Financial Statements​​​​​Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202144​​​​Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 202145​​​​Consolidated Balance Sheets as of October 29, 2023 and October 30, 202246​​​​Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 202147​​​​Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 202348​​​​Notes to Consolidated Financial Statements49​​​(2) Exhibits​​​​​See the "Index to Exhibits" on pages 83 - 86 of this report​​​​​Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission.​​​​​Financial Statement Schedules Omitted​​​​​The following schedules for the company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V.​​​​ITEM 16.FORM 10-K SUMMARY.None.​​​​ PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Page (1) Financial Statements ​ ​ ​ ​ ​ Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 44 ​ ​ ​ ​ Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Comprehensive Income for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 45 ​ ​ ​ ​ Consolidated Balance Sheets as of October 29, 2023 and October 30, 2022 Consolidated Balance Sheets as of October 29, 2023 and October 30, 2022 46 ​ ​ ​ ​ Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 Statements of Consolidated Cash Flows for the years ended October 29, 2023, October 30, 2022, and October 31, 2021 47 ​ ​ ​ ​ Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 2023 Statements of Changes in Consolidated Stockholders' Equity for the years ended October 31, 2021, October 30, 2022, and October 29, 2023 48 ​ ​ ​ ​ Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements 49 ​ ​ ​ (2) Exhibits ​ ​ ​ ​ ​ See the "Index to Exhibits" on pages 83 - 86 of this report ​ ​ ​ ​ ​ Certain instruments relating to long-term borrowings constituting less than 10 percent of registrant's total assets are not filed as exhibits herewith pursuant to Item 601(b)4(iii)(A) of Regulation S-K. Registrant agrees to file copies of such instruments upon request of the Commission. ​ ​ ​ ​ ​ --- ## Modified: We may be unable to accurately forecast customer demand for products and services, and to adequately manage inventory, which could adversely affect our operating results. **Key changes:** - Reworded sentence: "To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers." - Reworded sentence: "In fiscal year 2022, supply chain disruptions resulted in higher inventory levels." **Prior (2022):** To ensure adequate inventory supply, John Deere must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for particular products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In response to recent supply chain constraints, John Deere has worked with suppliers to ensure optimum inventory levels. John Deere's ability to accurately forecast demand could be affected by many factors, including changes in customer demand for John Deere's products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, John Deere has in the past and may in the future experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies. **Current (2023):** To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In fiscal year 2022, supply chain disruptions resulted in higher inventory levels. Although production schedules in fiscal year 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns, our ability to accurately forecast demand in the future could be affected by many factors, including changes in customer demand for our products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, we may experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies. --- ## Modified: We may be affected by changing worldwide demand for food and different forms of renewable energy, which could impact the price of farm commodities and consequently the demand for our equipment. This could result in higher research and development costs related to changing machine fuel requirements. **Key changes:** - Reworded sentence: "Changing worldwide demand for farm outputs to meet the world's growing food and renewable energy demands, driven in part by government policies, including those related to climate change, and a growing world population, are likely to result in fluctuating agricultural commodity prices, which directly affect sales of agricultural equipment." - Reworded sentence: "While higher commodity prices benefit our crop-producing agricultural equipment customers, they could result in greater feed costs for livestock and poultry producers, which in turn may result in lower levels of equipment purchased by these customers." **Prior (2022):** Changing worldwide demand for farm outputs to meet the world's growing food and bio-energy demands, driven in part by government policies, including those related to climate change, and a growing world population, are likely to result in fluctuating agricultural commodity prices, which directly affect sales of agricultural equipment. Lower agricultural commodity prices directly affect farm incomes, which could negatively affect sales of agricultural equipment and result in higher credit losses. While higher commodity prices benefit John Deere's crop-producing agricultural equipment customers, higher commodity prices also could result in greater feed costs for livestock and poultry producers, which in turn may result in lower levels of equipment purchased by these customers. Furthermore, changing bio-energy demands may cause farmers to change the types or quantities of the crops they raise, with corresponding changes in equipment demands. Finally, changes in governmental policies regulating bio-fuel utilization could affect commodity demand and commodity prices, demand for John Deere's diesel-fueled equipment, and result in higher research and development costs related to equipment fuel standards. **Current (2023):** Changing worldwide demand for farm outputs to meet the world's growing food and renewable energy demands, driven in part by government policies, including those related to climate change, and a growing world population, are likely to result in fluctuating agricultural commodity prices, which directly affect sales of agricultural equipment. Lower agricultural commodity prices directly affect farm incomes, which could negatively affect sales of agricultural equipment and result in higher credit losses. While higher commodity prices benefit our crop-producing agricultural equipment customers, they could result in greater feed costs for livestock and poultry producers, which in turn may result in lower levels of equipment purchased by these customers. In addition, changing energy renewable demands may cause farmers to change the types or quantities of the crops they raise, with corresponding changes in equipment demands. Finally, changes in governmental policies regulating bio-fuel utilization could affect commodity demand and commodity prices, demand for our diesel-fueled equipment, and result in higher research and development costs related to equipment fuel standards. --- ## Modified: Our consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in foreign currencies, creating currency exchange and translation risk. **Key changes:** - Reworded sentence: "We are a global company with transactions denominated in a variety of currencies." **Prior (2022):** John Deere operates in many areas of the world, involving transactions denominated in a variety of currencies. John Deere is subject to currency exchange risk to the extent that its costs are denominated in currencies other than those in which John Deere earns revenues. Additionally, the reporting currency for the Company's consolidated financial statements is the U.S. dollar. Certain of John Deere's assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates in the Company's reported consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in the Company's consolidated financial statements, even if their value remains unchanged in their original currencies. While the use of currency hedging instruments may provide us with protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. **Current (2023):** We are a global company with transactions denominated in a variety of currencies. We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which we earn our revenues. Additionally, the reporting currency for our consolidated financial statements is the U.S. dollar. Certain of our assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates and reported in our consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in the original currencies. While the use of currency hedging instruments may provide us with some protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. In Argentina, we have employed mechanisms to convert Argentine pesos into U.S. dollars to the extent possible. These mechanisms are short-term in nature, leaving us exposed to long-term currency fluctuations. --- ## Modified: Management's Report on Internal Control Over Financial Reporting **Key changes:** - Reworded sentence: "Management is responsible for establishing and maintaining adequate internal control over financial reporting." - Reworded sentence: "Management assessed the effectiveness of our internal control over financial reporting as of October 29, 2023, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission." **Prior (2022):** The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles. 25 25 25 Table of ContentsManagement assessed the effectiveness of the Company's internal control over financial reporting as of October 30, 2022, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management believes that, as of October 30, 2022, the Company's internal control over financial reporting was effective.The Company's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting. That report is included herein.Changes in Internal Control Over Financial ReportingDuring the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.ITEM 9B.OTHER INFORMATION.Disclosure Pursuant to Section 13(r) of the Exchange Act. Under Section 13(r) of the Exchange Act, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly conducted transactions or dealing with entities or individuals designated pursuant to certain executive orders issued by the U.S. government. On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service (FSB) as a blocked party under Executive Order 13382. On that same day, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) updated General License No. 1B to authorize certain transactions and activities with the FSB related to the importation, distribution, or use of certain information technology products in the Russian Federation. In the ordinary course of business, during the six-month period ended May 1, 2022, certain of the Company's subsidiaries requested and/or received legally required administrative notifications with the FSB in connection with the importation and/or use of certain of the Company's products in the Russian Federation, as authorized by General License No. 1B. Neither the Company nor its subsidiaries made any payments, nor did they receive gross revenues or net profits, in connection with these activities. The Company expects that in the future certain of its subsidiaries may continue to engage with the FSB in activities necessary to conduct business in the Russian Federation in accordance with applicable U.S. laws and regulations so long as it remains lawful to do so. However, no such activities have been conducted after May 1, 2022.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.Not applicable.PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for the Company's 2023 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers."The Company has adopted a code of ethics that applies to its executives, including its principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and the Company's corporate governance policies are posted on the Company's website at http://www.deere.com/governance. The Company intends to satisfy disclosure requirements regarding amendments to or waivers from its code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of the Company's Board of Directors are available on the Company's website as well. This information is also available in print free of charge to any person who requests it.ITEM 11.EXECUTIVE COMPENSATION.The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.Information required by this Item 14, including aggregate fees billed to us by the Company's principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission.​26 Table of Contents Table of Contents Table of Contents Management assessed the effectiveness of the Company's internal control over financial reporting as of October 30, 2022, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management believes that, as of October 30, 2022, the Company's internal control over financial reporting was effective.The Company's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting. That report is included herein.Changes in Internal Control Over Financial ReportingDuring the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.ITEM 9B.OTHER INFORMATION.Disclosure Pursuant to Section 13(r) of the Exchange Act. Under Section 13(r) of the Exchange Act, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly conducted transactions or dealing with entities or individuals designated pursuant to certain executive orders issued by the U.S. government. On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service (FSB) as a blocked party under Executive Order 13382. On that same day, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) updated General License No. 1B to authorize certain transactions and activities with the FSB related to the importation, distribution, or use of certain information technology products in the Russian Federation. In the ordinary course of business, during the six-month period ended May 1, 2022, certain of the Company's subsidiaries requested and/or received legally required administrative notifications with the FSB in connection with the importation and/or use of certain of the Company's products in the Russian Federation, as authorized by General License No. 1B. Neither the Company nor its subsidiaries made any payments, nor did they receive gross revenues or net profits, in connection with these activities. The Company expects that in the future certain of its subsidiaries may continue to engage with the FSB in activities necessary to conduct business in the Russian Federation in accordance with applicable U.S. laws and regulations so long as it remains lawful to do so. However, no such activities have been conducted after May 1, 2022.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.Not applicable.PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for the Company's 2023 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers."The Company has adopted a code of ethics that applies to its executives, including its principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and the Company's corporate governance policies are posted on the Company's website at http://www.deere.com/governance. The Company intends to satisfy disclosure requirements regarding amendments to or waivers from its code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of the Company's Board of Directors are available on the Company's website as well. This information is also available in print free of charge to any person who requests it.ITEM 11.EXECUTIVE COMPENSATION.The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.Information required by this Item 14, including aggregate fees billed to us by the Company's principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission.​ Management assessed the effectiveness of the Company's internal control over financial reporting as of October 30, 2022, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management believes that, as of October 30, 2022, the Company's internal control over financial reporting was effective. The Company's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting. That report is included herein. **Current (2023):** Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles. 26 26 26 Table of ContentsAll internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles.Management assessed the effectiveness of our internal control over financial reporting as of October 29, 2023, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, as of October 29, 2023, our internal control over financial reporting was effective.Our independent registered public accounting firm has issued an audit report on the effectiveness of our internal control over financial reporting. That report is included herein.Changes in Internal Control Over Financial ReportingDuring the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.ITEM 9B.OTHER INFORMATION.Director and Executive Officer Trading ArrangementsNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.Not applicable.PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for our 2024 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers."We have adopted a code of ethics that applies to our executives, including our principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and our corporate governance policies are posted on our website at http://www.deere.com/governance. We intend to satisfy disclosure requirements regarding amendments to or waivers from our code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of our Board of Directors are available on our website as well. This information is also available in print free of charge to any person who requests it.ITEM 11.EXECUTIVE COMPENSATION.The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.Information required by this Item 14, including aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission.​27 Table of Contents Table of Contents Table of Contents All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles.Management assessed the effectiveness of our internal control over financial reporting as of October 29, 2023, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, as of October 29, 2023, our internal control over financial reporting was effective.Our independent registered public accounting firm has issued an audit report on the effectiveness of our internal control over financial reporting. That report is included herein.Changes in Internal Control Over Financial ReportingDuring the fourth quarter, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.ITEM 9B.OTHER INFORMATION.Director and Executive Officer Trading ArrangementsNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.Not applicable.PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.The information regarding directors required by this Item 10 will be set forth in the definitive proxy statement for our 2024 annual meeting of stockholders (proxy statement) to be filed with the Commission in advance of such meeting. Information regarding executive officers is presented in Item 1 of this report under the caption "Information about our Executive Officers."We have adopted a code of ethics that applies to our executives, including our principal executive officer, principal financial officer, and principal accounting officer. This code of ethics and our corporate governance policies are posted on our website at http://www.deere.com/governance. We intend to satisfy disclosure requirements regarding amendments to or waivers from our code of ethics by posting such information on this website. The charters of the Audit Review, Corporate Governance, Compensation, and Finance committees of our Board of Directors are available on our website as well. This information is also available in print free of charge to any person who requests it.ITEM 11.EXECUTIVE COMPENSATION.The information required by this Item 11 will be set forth in the proxy statement to be filed with the Commission.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.The information required by this Item 12 will be set forth in the proxy statement to be filed with the Commission.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.The information required by this Item 13 will be set forth in the proxy statement to be filed with the Commission.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.Information required by this Item 14, including aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34), will be set forth in the proxy statement to be filed with the Commission.​ All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles. Management assessed the effectiveness of our internal control over financial reporting as of October 29, 2023, using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, as of October 29, 2023, our internal control over financial reporting was effective. Our independent registered public accounting firm has issued an audit report on the effectiveness of our internal control over financial reporting. That report is included herein. --- ## Modified: Our ability to attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy. **Key changes:** - Reworded sentence: "Our continued success depends, in part, on our ability to identify and attract qualified candidates with the requisite education, background, and experience as well as our ability to develop, engage, and retain qualified employees." **Prior (2022):** John Deere's continued success depends, in part, on its ability to identify and attract qualified candidates with the requisite education, background, and experience as well as its ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair John Deere's ability to execute its business strategy and could adversely affect John Deere's business. In addition, while John Deere strives to reduce the impact of the departure of employees, John Deere's operations or ability to execute its business strategy and meet its business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those John Deere could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect John Deere through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. **Current (2023):** Our continued success depends, in part, on our ability to identify and attract qualified candidates with the requisite education, background, and experience as well as our ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair our ability to execute our business strategy and could adversely affect our business, results of operations, and financial condition. In addition, while we strive to reduce the impact of the departure of employees, our operations or ability to execute our business strategy and meet our business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those we could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect us through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. --- ## Modified: We may not realize all anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected. **Key changes:** - Reworded sentence: "From time to time, we make strategic acquisitions and divestitures and participate in joint ventures." **Prior (2022):** From time to time, John Deere makes strategic acquisitions and divestitures and participates in joint ventures. In an effort to enhance its Smart Industrial operating model by adding technology and talent, during fiscal year 2022, the Company acquired majority ownership in Kreisel Electric Inc., which designs and manufactures high-durability battery packs and high-powered charging stations; a 40 percent equity method investment in GUSS Automation LLC, a producer of semi-autonomous orchard and vineyard sprayers; and LGT, LLC (Light), which specializes in depth sensing and camera-based perception for autonomous vehicles. Acquisitions and joint ventures that John Deere has entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance John Deere's business strategy or fail to produce satisfactory returns on investment. John Deere may encounter difficulties in integrating acquisitions with its operations, applying internal control processes to these acquisitions, managing strategic investments, and assimilating new capabilities to meet the future needs of John Deere's businesses. Integrating acquisitions is often costly and may require significant attention from management. Furthermore, John Deere may not realize all the anticipated benefits of acquisitions or joint ventures, or the realized benefits may be significantly delayed. While our evaluation of any potential transaction includes business, legal, and financial due diligence with the goal of identifying and evaluating the material risks involved, these due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target's or joint venture partner's previous activities or costs associated with any quality issues with an acquisition target's or joint venture's products or services. John Deere may decide to divest businesses if it determines any such divestiture is in the best interests of its shareholders, and joint ventures may be terminated at or before their stated expiration, such as the joint venture between the Company and Hitachi, which the Company agreed to voluntarily terminate in fiscal 2021. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to John Deere, and negative effects on John Deere's product offerings, which may adversely affect John Deere's business, results of operations, and financial condition. Divestitures of businesses or dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect the Company's future financial results. **Current (2023):** From time to time, we make strategic acquisitions and divestitures and participate in joint ventures. Acquisitions and joint ventures we have entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance our business strategy, or fail to produce satisfactory returns on investment. Other risks include: We may also decide to divest businesses if in the best interests of our shareholders and joint ventures may be terminated at or before their stated expiration. For example, in March and October 2023, we sold our financial services and roadbuilding businesses in Russia following the outbreak of the war in Ukraine. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to us, and negative effects on our product offerings, which may adversely affect our business, results of operations, and financial condition. Divestitures of businesses and dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect our future financial results. --- ## Modified: Changes in government banking, monetary, and fiscal policies could have a negative effect on us. **Key changes:** - Reworded sentence: "and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues could have a material impact on our customers and markets." **Prior (2022):** Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues may not be effective and could have a material impact on John Deere's customers and markets. John Deere's operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on John Deere's customers by limiting their ability to enter into hedging transactions or to finance purchases of John Deere products. Government policies on spending can also affect John Deere, especially the construction and forestry segment, due to the impact of government spending on infrastructure development. John Deere's operations, including those outside of the United States, may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. **Current (2023):** Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues could have a material impact on our customers and markets. Central bank policy interest rates continued to increase in fiscal year 2023. Most of our retail receivables are fixed rate, while wholesale financing receivables are variable rate. We have both fixed and variable rate borrowings. Historically, rising interest rates impact our borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. Our operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on our customers by limiting their ability to enter hedging transactions or to finance purchases of our products. Government policies on spending can also affect us, especially the CF segment, due to the impact of government spending on infrastructure development. Our operations, including those outside of the U.S., may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. --- ## Modified: We may not realize the anticipated benefits of our Smart Industrial Operating Model and Leap Ambitions. **Key changes:** - Reworded sentence: "Failure to realize the anticipated benefits of our Smart Industrial Operating Model and related business strategies in production systems, precision technologies, and aftermarket support could adversely affect results of our operations and financial condition." **Prior (2022):** John Deere's failure to realize the anticipated benefits of its Smart Industrial operating model and related business strategies in production systems, precision technologies, and aftermarket support could adversely affect the Company's results of operations and financial condition. Several factors could impact John Deere's ability to successfully execute the Smart Industrial operating model, including, among other things, failure to accurately assess market opportunity and the technology required to address such 15 15 15 Table of Contentsopportunity; failure to develop and introduce new technologies or lack of adoption of such technologies by John Deere's customers; and failure to holistically execute lifecycle solutions. In addition, if the Company is unable to optimize its capital allocation in connection with the operating model, it may not be able to realize the full benefits, which could have an adverse effect on the Company's financial condition or results of operations. Similarly, John Deere may not realize the anticipated benefits of its Leap Ambitions and related goals in the expected timeline, or at all. As part of its Leap Ambitions framework, John Deere adopted various goals that it expects to achieve by 2026 or 2030, as applicable. John Deere may not be able to achieve these goals for a number of reasons, some of which may be out of its control. For example, John Deere's estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; certain materials, such as quality battery cells, may become unavailable or too costly; or infrastructure required to achieve our goals, such as sufficient charging stations, may become too costly or may not occur on the expected timeline. The actual or perceived failure to achieve our Leap Ambitions could negatively impact our ability to execute the Smart Industrial operating model, and could harm our reputation and our business. John Deere may not realize all anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected. From time to time, John Deere makes strategic acquisitions and divestitures and participates in joint ventures. In an effort to enhance its Smart Industrial operating model by adding technology and talent, during fiscal year 2022, the Company acquired majority ownership in Kreisel Electric Inc., which designs and manufactures high-durability battery packs and high-powered charging stations; a 40 percent equity method investment in GUSS Automation LLC, a producer of semi-autonomous orchard and vineyard sprayers; and LGT, LLC (Light), which specializes in depth sensing and camera-based perception for autonomous vehicles. Acquisitions and joint ventures that John Deere has entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance John Deere's business strategy or fail to produce satisfactory returns on investment. John Deere may encounter difficulties in integrating acquisitions with its operations, applying internal control processes to these acquisitions, managing strategic investments, and assimilating new capabilities to meet the future needs of John Deere's businesses. Integrating acquisitions is often costly and may require significant attention from management. Furthermore, John Deere may not realize all the anticipated benefits of acquisitions or joint ventures, or the realized benefits may be significantly delayed. While our evaluation of any potential transaction includes business, legal, and financial due diligence with the goal of identifying and evaluating the material risks involved, these due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target's or joint venture partner's previous activities or costs associated with any quality issues with an acquisition target's or joint venture's products or services. John Deere may decide to divest businesses if it determines any such divestiture is in the best interests of its shareholders, and joint ventures may be terminated at or before their stated expiration, such as the joint venture between the Company and Hitachi, which the Company agreed to voluntarily terminate in fiscal 2021. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to John Deere, and negative effects on John Deere's product offerings, which may adversely affect John Deere's business, results of operations, and financial condition. Divestitures of businesses or dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect the Company's future financial results. John Deere's ability to understand its customers' specific preferences and requirements, and to develop, manufacture, and market products that meet customer demand, could significantly affect its business results.John Deere's ability to match new product offerings to diverse global customers' anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to its success. This requires a thorough understanding of John Deere's existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices ahead of competitors could have a significant adverse effect on John Deere's business.Customer preferences in the markets served by John Deere could change as these markets transition to less carbon-intensive business models. Ongoing social and regulatory focus on sustainability and the impact of policies and consumer preferences on the construction, forestry, and agriculture industries mean that change is imminent. As regulations and social pressure drive change, John Deere must be proactive in monitoring trends and developing alternatives and enhancements that complement our product offerings. For example, the Company may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment.16 Table of Contents Table of Contents Table of Contents opportunity; failure to develop and introduce new technologies or lack of adoption of such technologies by John Deere's customers; and failure to holistically execute lifecycle solutions. In addition, if the Company is unable to optimize its capital allocation in connection with the operating model, it may not be able to realize the full benefits, which could have an adverse effect on the Company's financial condition or results of operations. Similarly, John Deere may not realize the anticipated benefits of its Leap Ambitions and related goals in the expected timeline, or at all. As part of its Leap Ambitions framework, John Deere adopted various goals that it expects to achieve by 2026 or 2030, as applicable. John Deere may not be able to achieve these goals for a number of reasons, some of which may be out of its control. For example, John Deere's estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; certain materials, such as quality battery cells, may become unavailable or too costly; or infrastructure required to achieve our goals, such as sufficient charging stations, may become too costly or may not occur on the expected timeline. The actual or perceived failure to achieve our Leap Ambitions could negatively impact our ability to execute the Smart Industrial operating model, and could harm our reputation and our business. John Deere may not realize all anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected. From time to time, John Deere makes strategic acquisitions and divestitures and participates in joint ventures. In an effort to enhance its Smart Industrial operating model by adding technology and talent, during fiscal year 2022, the Company acquired majority ownership in Kreisel Electric Inc., which designs and manufactures high-durability battery packs and high-powered charging stations; a 40 percent equity method investment in GUSS Automation LLC, a producer of semi-autonomous orchard and vineyard sprayers; and LGT, LLC (Light), which specializes in depth sensing and camera-based perception for autonomous vehicles. Acquisitions and joint ventures that John Deere has entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance John Deere's business strategy or fail to produce satisfactory returns on investment. John Deere may encounter difficulties in integrating acquisitions with its operations, applying internal control processes to these acquisitions, managing strategic investments, and assimilating new capabilities to meet the future needs of John Deere's businesses. Integrating acquisitions is often costly and may require significant attention from management. Furthermore, John Deere may not realize all the anticipated benefits of acquisitions or joint ventures, or the realized benefits may be significantly delayed. While our evaluation of any potential transaction includes business, legal, and financial due diligence with the goal of identifying and evaluating the material risks involved, these due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target's or joint venture partner's previous activities or costs associated with any quality issues with an acquisition target's or joint venture's products or services. John Deere may decide to divest businesses if it determines any such divestiture is in the best interests of its shareholders, and joint ventures may be terminated at or before their stated expiration, such as the joint venture between the Company and Hitachi, which the Company agreed to voluntarily terminate in fiscal 2021. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to John Deere, and negative effects on John Deere's product offerings, which may adversely affect John Deere's business, results of operations, and financial condition. Divestitures of businesses or dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect the Company's future financial results. John Deere's ability to understand its customers' specific preferences and requirements, and to develop, manufacture, and market products that meet customer demand, could significantly affect its business results.John Deere's ability to match new product offerings to diverse global customers' anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to its success. This requires a thorough understanding of John Deere's existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices ahead of competitors could have a significant adverse effect on John Deere's business.Customer preferences in the markets served by John Deere could change as these markets transition to less carbon-intensive business models. Ongoing social and regulatory focus on sustainability and the impact of policies and consumer preferences on the construction, forestry, and agriculture industries mean that change is imminent. As regulations and social pressure drive change, John Deere must be proactive in monitoring trends and developing alternatives and enhancements that complement our product offerings. For example, the Company may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment. opportunity; failure to develop and introduce new technologies or lack of adoption of such technologies by John Deere's customers; and failure to holistically execute lifecycle solutions. In addition, if the Company is unable to optimize its capital allocation in connection with the operating model, it may not be able to realize the full benefits, which could have an adverse effect on the Company's financial condition or results of operations. Similarly, John Deere may not realize the anticipated benefits of its Leap Ambitions and related goals in the expected timeline, or at all. As part of its Leap Ambitions framework, John Deere adopted various goals that it expects to achieve by 2026 or 2030, as applicable. John Deere may not be able to achieve these goals for a number of reasons, some of which may be out of its control. For example, John Deere's estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; certain materials, such as quality battery cells, may become unavailable or too costly; or infrastructure required to achieve our goals, such as sufficient charging stations, may become too costly or may not occur on the expected timeline. The actual or perceived failure to achieve our Leap Ambitions could negatively impact our ability to execute the Smart Industrial operating model, and could harm our reputation and our business. **Current (2023):** Failure to realize the anticipated benefits of our Smart Industrial Operating Model and related business strategies in production systems, precision technologies, and aftermarket support could adversely affect results of our operations and financial condition. Several factors could impact our ability to successfully execute our Smart Industrial Operating Model, including, among other things: 15 15 15 Table of ContentsSimilarly, we may not realize the anticipated benefits of our Leap Ambitions and related goals within the expected timelines, or at all. As part of our Leap Ambitions we adopted various goals we expect to achieve by 2026 or 2030. We may not be able to achieve these goals for a variety reasons, some of which may be beyond our control. Examples include:●Our estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; ●Certain materials, such as quality battery cells and cameras, may become unavailable or too costly; ●The infrastructure required to achieve our goals, such as sufficient charging stations or fuel availability, may become too costly or may not be developed on the expected timeline; and ●The actual or perceived failure to achieve our Leap Ambitions could negatively impact our ability to execute the Smart Industrial Operating Model. We may not realize all anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected. From time to time, we make strategic acquisitions and divestitures and participate in joint ventures. Acquisitions and joint ventures we have entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance our business strategy, or fail to produce satisfactory returns on investment. Other risks include:●We may encounter difficulties in integrating acquisitions with our operations, applying internal control processes to these acquisitions, managing strategic investments, assimilating new capabilities to meet the future needs of our businesses, and/or combining business cultures;●We may choose not to fully integrate businesses and may face regulatory or compliance exposure until appropriate processes and controls are put in place;●Integrating acquisitions is often costly and may require significant attention from management and personnel; ●We may not realize all the anticipated benefits of acquisitions or joint ventures, or the realized benefits may be significantly delayed; and●Due diligence evaluations of potential transactions include business, legal, and financial reviews with the goal of identifying and evaluating the material risks involved. These due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target's or joint venture partner's previous activities or costs associated with any quality issues with an acquisition target's or joint venture's products or services. We may also decide to divest businesses if in the best interests of our shareholders and joint ventures may be terminated at or before their stated expiration. For example, in March and October 2023, we sold our financial services and roadbuilding businesses in Russia following the outbreak of the war in Ukraine. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to us, and negative effects on our product offerings, which may adversely affect our business, results of operations, and financial condition. Divestitures of businesses and dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect our future financial results. Our ability to understand our customers' preferences and requirements and to develop, manufacture, and market products that meet customer demand could significantly affect our business results.Our ability to match new product offerings to global customers' preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success. This requires a thorough understanding of our existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices could have an adverse effect on our business.In addition, customer preferences in the markets we serve are changing as a result of ongoing social and regulatory focus on sustainability as these markets transition to less carbon-intensive business models. As regulations and social pressure drive change, we must continue to proactively monitor trends and develop alternatives and enhancements that elevate and complement our product offerings. For example, even though we plan to offer electric, hybrid-electric, and battery electric equipment solutions, we may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment.16 Table of Contents Table of Contents Table of Contents Similarly, we may not realize the anticipated benefits of our Leap Ambitions and related goals within the expected timelines, or at all. As part of our Leap Ambitions we adopted various goals we expect to achieve by 2026 or 2030. We may not be able to achieve these goals for a variety reasons, some of which may be beyond our control. Examples include:●Our estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; ●Certain materials, such as quality battery cells and cameras, may become unavailable or too costly; ●The infrastructure required to achieve our goals, such as sufficient charging stations or fuel availability, may become too costly or may not be developed on the expected timeline; and ●The actual or perceived failure to achieve our Leap Ambitions could negatively impact our ability to execute the Smart Industrial Operating Model. We may not realize all anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected. From time to time, we make strategic acquisitions and divestitures and participate in joint ventures. Acquisitions and joint ventures we have entered, or may enter in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance our business strategy, or fail to produce satisfactory returns on investment. Other risks include:●We may encounter difficulties in integrating acquisitions with our operations, applying internal control processes to these acquisitions, managing strategic investments, assimilating new capabilities to meet the future needs of our businesses, and/or combining business cultures;●We may choose not to fully integrate businesses and may face regulatory or compliance exposure until appropriate processes and controls are put in place;●Integrating acquisitions is often costly and may require significant attention from management and personnel; ●We may not realize all the anticipated benefits of acquisitions or joint ventures, or the realized benefits may be significantly delayed; and●Due diligence evaluations of potential transactions include business, legal, and financial reviews with the goal of identifying and evaluating the material risks involved. These due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target's or joint venture partner's previous activities or costs associated with any quality issues with an acquisition target's or joint venture's products or services. We may also decide to divest businesses if in the best interests of our shareholders and joint ventures may be terminated at or before their stated expiration. For example, in March and October 2023, we sold our financial services and roadbuilding businesses in Russia following the outbreak of the war in Ukraine. Divestitures of businesses or dissolutions of joint ventures may involve significant challenges and risks, including failure to advance our business strategy, costs or disruptions to us, and negative effects on our product offerings, which may adversely affect our business, results of operations, and financial condition. Divestitures of businesses and dissolutions of joint ventures may result in ongoing financial or legal involvement in the divested business through indemnifications or other financial arrangements, such as retained liabilities, which could affect our future financial results. Our ability to understand our customers' preferences and requirements and to develop, manufacture, and market products that meet customer demand could significantly affect our business results.Our ability to match new product offerings to global customers' preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success. This requires a thorough understanding of our existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices could have an adverse effect on our business.In addition, customer preferences in the markets we serve are changing as a result of ongoing social and regulatory focus on sustainability as these markets transition to less carbon-intensive business models. As regulations and social pressure drive change, we must continue to proactively monitor trends and develop alternatives and enhancements that elevate and complement our product offerings. For example, even though we plan to offer electric, hybrid-electric, and battery electric equipment solutions, we may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment. Similarly, we may not realize the anticipated benefits of our Leap Ambitions and related goals within the expected timelines, or at all. As part of our Leap Ambitions we adopted various goals we expect to achieve by 2026 or 2030. We may not be able to achieve these goals for a variety reasons, some of which may be beyond our control. Examples include: --- ## Modified: Allowance for Credit Losses **Key changes:** - Reworded sentence: "The allowance is measured on a collective basis for receivables with similar risk characteristics." - Reworded sentence: "●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools." **Prior (2022):** The allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing receivables are included in the estimate of expected credit losses. The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. In 2021, the company adopted ASU No. 2016-13, which revised the measurement of credit losses from an incurred loss to an expected loss methodology. Upon adoption the company's allowance for credit losses increased with an offset to retained earnings. The allowance for credit losses at November 1, 2020 was not restated under the expected loss methodology. The total allowance for credit losses at October 30, 2022, October 31, 2021, and November 1, 2020 was $361 million, $207 million, and $223 million, respectively. The allowance increased in 2022 compared to 2021 due to higher reserves related to the economic uncertainty in Russia. The allowance decreased in 2021 compared to 2020 due to lower expected losses in the construction and forestry market, continued improvement in the agriculture and turf market, and better than expected performance of accounts granted payment relief due to the economic effects of COVID. As previously mentioned, the allowance decrease was partially offset by the adoption of ASU No. 2016-13. The assumptions used in evaluating the company's exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company's wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. The company's transition matrix models, which are utilized to estimate credit losses for more than 90 percent of retail customer receivables, use historical portfolio performance and current delinquency levels to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. Holding all other factors constant, a 10 percent increase in the transition matrix models' forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $40 million increase to the allowance for credit losses at October 30, 2022.Operating Lease Residual ValuesThe carrying value of equipment on operating leases is affected by the estimated fair values of the equipment at the end of the lease (residual values). Upon termination of the lease, the equipment is models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. In 2021, the company adopted ASU No. 2016-13, which revised the measurement of credit losses from an incurred loss to an expected loss methodology. Upon adoption the company's allowance for credit losses increased with an offset to retained earnings. The allowance for credit losses at November 1, 2020 was not restated under the expected loss methodology. The total allowance for credit losses at October 30, 2022, October 31, 2021, and November 1, 2020 was $361 million, $207 million, and $223 million, respectively. The allowance increased in 2022 compared to 2021 due to higher reserves related to the economic uncertainty in Russia. The allowance decreased in 2021 compared to 2020 due to lower expected losses in the construction and forestry market, continued improvement in the agriculture and turf market, and better than expected performance of accounts granted payment relief due to the economic effects of COVID. As previously mentioned, the allowance decrease was partially offset by the adoption of ASU No. 2016-13. The assumptions used in evaluating the company's exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company's wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. The company's transition matrix models, which are utilized to estimate credit losses for more than 90 percent of retail customer receivables, use historical portfolio performance and current delinquency levels to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. Holding all other factors constant, a 10 percent increase in the transition matrix models' forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $40 million increase to the allowance for credit losses at October 30, 2022. **Current (2023):** The allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include: ●market, ●geography, ●credit risk, and ●remaining balance. We utilize the following loss forecast models to estimate expected credit losses:●Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. ●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools. ●Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk. The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: ●commodity prices, ●industry equipment sales, ●unemployment rates, and ●housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary.Allowance for Credit LossesThe allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia. While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:●For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses.●Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts. We utilize the following loss forecast models to estimate expected credit losses: The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. --- ## Modified: Income after Income Taxes **Key changes:** - Reworded sentence: "​ ​ 9,532 ​ ​ 6,244 ​ ​ 5,066 ​ ​ 616 ​ ​ 876 ​ ​ 878 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,148 ​ ​ 7,120 ​ ​ 5,944 ​ ​ ​ Equity in income of unconsolidated affiliates ​ ​ 4 ​ ​ 6 ​ ​ 18 ​ ​ 3 ​ ​ 4 ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ ​ 10 ​ ​ 21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 9,536 ​ ​ 6,250 ​ ​ 5,084 ​ ​ 619 ​ ​ 880 ​ ​ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,155 ​ ​ 7,130 ​ ​ 5,965 ​ ​ ​ Less: Net income (loss) attributable to noncontrolling interests ​ ​ (11) ​ ​ (1) ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11) ​ ​ (1) ​ ​ 2 ​ ​ ​" **Prior (2022):** ​ ​ 6,244 ​ ​ 5,066 ​ ​ 2,237 ​ ​ 876 ​ ​ 878 ​ ​ 564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,120 ​ ​ 5,944 ​ ​ 2,801 ​ ​ ​ Equity in income (loss) of unconsolidated affiliates ​ ​ 6 ​ ​ 18 ​ ​ (50) ​ ​ 4 ​ ​ 3 ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ 21 ​ ​ (48) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 6,250 ​ ​ 5,084 ​ ​ 2,187 ​ ​ 880 ​ ​ 881 ​ ​ 566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,130 ​ ​ 5,965 ​ ​ 2,753 ​ ​ ​ Less: Net income (loss) attributable to noncontrolling interests ​ ​ (1) ​ ​ 2 ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) ​ ​ 2 ​ ​ 2 ​ ​ ​ **Current (2023):** ​ ​ 9,532 ​ ​ 6,244 ​ ​ 5,066 ​ ​ 616 ​ ​ 876 ​ ​ 878 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,148 ​ ​ 7,120 ​ ​ 5,944 ​ ​ ​ Equity in income of unconsolidated affiliates ​ ​ 4 ​ ​ 6 ​ ​ 18 ​ ​ 3 ​ ​ 4 ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ ​ 10 ​ ​ 21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 9,536 ​ ​ 6,250 ​ ​ 5,084 ​ ​ 619 ​ ​ 880 ​ ​ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,155 ​ ​ 7,130 ​ ​ 5,965 ​ ​ ​ Less: Net income (loss) attributable to noncontrolling interests ​ ​ (11) ​ ​ (1) ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (11) ​ ​ (1) ​ ​ 2 ​ ​ ​ --- ## Modified: Income before Income Taxes **Key changes:** - Reworded sentence: "​ ​ 12,217 ​ ​ 7,962 ​ ​ 6,452 ​ ​ 802 ​ ​ 1,165 ​ ​ 1,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,019 ​ ​ 9,127 ​ ​ 7,602 ​ ​ ​ Provision for income taxes ​ ​ 2,685 ​ ​ 1,718 ​ ​ 1,386 ​ ​ 186 ​ ​ 289 ​ ​ 272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,871 ​ ​ 2,007 ​ ​ 1,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ 7,962 ​ ​ 6,452 ​ ​ 3,136 ​ ​ 1,165 ​ ​ 1,150 ​ ​ 747 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9,127 ​ ​ 7,602 ​ ​ 3,883 ​ ​ ​ Provision for income taxes ​ ​ 1,718 ​ ​ 1,386 ​ ​ 899 ​ ​ 289 ​ ​ 272 ​ ​ 183 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,007 ​ ​ 1,658 ​ ​ 1,082 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ 12,217 ​ ​ 7,962 ​ ​ 6,452 ​ ​ 802 ​ ​ 1,165 ​ ​ 1,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13,019 ​ ​ 9,127 ​ ​ 7,602 ​ ​ ​ Provision for income taxes ​ ​ 2,685 ​ ​ 1,718 ​ ​ 1,386 ​ ​ 186 ​ ​ 289 ​ ​ 272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,871 ​ ​ 2,007 ​ ​ 1,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: We rely on a network of independent dealers to manage the distribution of our products and services. If dealers are unsuccessful with their sales and business operations, it could have an adverse effect on our overall sales and revenue. **Key changes:** - Reworded sentence: "We rely on the capability of our dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that dealers purchase from us." - Reworded sentence: "Dealers may exit or we may seek to terminate relationships with certain dealers if they are unable to meet customer needs." - Reworded sentence: "Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including us, are continuing to look for ways to reduce GHG emissions." - Added sentence: "The EU recently adopted the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) that will impose disclosure of the risks and opportunities arising from social and environmental issues, and on the impact of companies' activities on people and the environment." - Added sentence: "The CSRD will need to be transposed into Member State law before it becomes effective, which is expected to occur in 2024." **Prior (2022):** John Deere relies on the capability of its dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that the dealers purchase from John Deere. If John Deere's dealers are not 17 17 17 Table of Contentssuccessful in these endeavors, then John Deere will be unable to grow its sales and revenue, which would have an adverse effect on its financial condition. In addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or John Deere may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any John Deere dealers could lead to inadequate market coverage, negative customer impressions of John Deere, and may adversely impact John Deere's ability to collect receivables that are associated with that dealer. ENVIRONMENTAL, CLIMATE, AND WEATHER RISKSUnfavorable weather conditions or natural calamities that reduce agricultural production and demand for agriculture and turf equipment could directly and indirectly affect John Deere's business.Poor or unusual weather conditions, particularly during the planting and early growing season, can significantly affect the purchasing decisions of John Deere's customers, particularly the purchasers of agriculture and turf equipment. The timing and quantity of rainfall are two of the most important factors in agricultural production. Insufficient levels of rain prevent farmers from planting new crops and may cause growing crops to die or result in lower yields. Excessive rain or flooding can prevent planting from occurring at optimal times and may cause crop loss through increased disease or mold growth. Temperature affects the rate of growth, maturity, and quality of crops. Temperatures outside normal ranges can also cause crop failure or decreased yields and may also affect disease incidence. Natural calamities such as regional floods, hurricanes or other storms, droughts, diseases, and pests, either as a physical effect of climate change or otherwise, have had and could in the future have significant negative effects on agricultural and livestock production. The resulting negative impact on farm income can strongly affect demand for agricultural equipment and the financial condition and credit risk of John Deere's dealers and customers. Adverse weather conditions in a particular geographic region, particularly during the important spring selling season, may adversely affect sales of some turf equipment. Drought conditions can adversely affect sales of certain mowing equipment and unusually rainy weather can similarly cause lower sales volumes.Governmental actions designed to address climate change and the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and its customers. There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including John Deere, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to John Deere in the form of taxes or emission allowances, required facilities improvements, and increased energy costs, which would increase John Deere's operating costs through higher utility, transportation, and materials costs. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for John Deere equipment. John Deere's financial services is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the lending operations and climate-risk processes developed by John Deere's financial services. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. Increasingly stringent engine emission regulations or bans on internal combustion engines could impact John Deere's ability to manufacture and distribute certain engines or equipment, which could negatively affect business results.John Deere's equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard which limits the amount of harmful substances in exhaust gases that off-road engines can emit into the environment. In addition, governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines manufactured by John Deere, including those used in John Deere agriculture and construction and forestry equipment. John Deere has incurred and continues to incur substantial research and development costs related to the implementation of these more rigorous laws and regulations. While John Deere has developed and is executing comprehensive plans to meet these requirements, these plans are subject to many variables that could delay or otherwise affect John Deere's ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned or may in the future ban internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by John Deere, our business, results of operations, and financial condition could be negatively affected.18 Table of Contents Table of Contents Table of Contents successful in these endeavors, then John Deere will be unable to grow its sales and revenue, which would have an adverse effect on its financial condition. In addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or John Deere may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any John Deere dealers could lead to inadequate market coverage, negative customer impressions of John Deere, and may adversely impact John Deere's ability to collect receivables that are associated with that dealer. ENVIRONMENTAL, CLIMATE, AND WEATHER RISKSUnfavorable weather conditions or natural calamities that reduce agricultural production and demand for agriculture and turf equipment could directly and indirectly affect John Deere's business.Poor or unusual weather conditions, particularly during the planting and early growing season, can significantly affect the purchasing decisions of John Deere's customers, particularly the purchasers of agriculture and turf equipment. The timing and quantity of rainfall are two of the most important factors in agricultural production. Insufficient levels of rain prevent farmers from planting new crops and may cause growing crops to die or result in lower yields. Excessive rain or flooding can prevent planting from occurring at optimal times and may cause crop loss through increased disease or mold growth. Temperature affects the rate of growth, maturity, and quality of crops. Temperatures outside normal ranges can also cause crop failure or decreased yields and may also affect disease incidence. Natural calamities such as regional floods, hurricanes or other storms, droughts, diseases, and pests, either as a physical effect of climate change or otherwise, have had and could in the future have significant negative effects on agricultural and livestock production. The resulting negative impact on farm income can strongly affect demand for agricultural equipment and the financial condition and credit risk of John Deere's dealers and customers. Adverse weather conditions in a particular geographic region, particularly during the important spring selling season, may adversely affect sales of some turf equipment. Drought conditions can adversely affect sales of certain mowing equipment and unusually rainy weather can similarly cause lower sales volumes.Governmental actions designed to address climate change and the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and its customers. There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including John Deere, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to John Deere in the form of taxes or emission allowances, required facilities improvements, and increased energy costs, which would increase John Deere's operating costs through higher utility, transportation, and materials costs. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for John Deere equipment. John Deere's financial services is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the lending operations and climate-risk processes developed by John Deere's financial services. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. Increasingly stringent engine emission regulations or bans on internal combustion engines could impact John Deere's ability to manufacture and distribute certain engines or equipment, which could negatively affect business results.John Deere's equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard which limits the amount of harmful substances in exhaust gases that off-road engines can emit into the environment. In addition, governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines manufactured by John Deere, including those used in John Deere agriculture and construction and forestry equipment. John Deere has incurred and continues to incur substantial research and development costs related to the implementation of these more rigorous laws and regulations. While John Deere has developed and is executing comprehensive plans to meet these requirements, these plans are subject to many variables that could delay or otherwise affect John Deere's ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned or may in the future ban internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by John Deere, our business, results of operations, and financial condition could be negatively affected. successful in these endeavors, then John Deere will be unable to grow its sales and revenue, which would have an adverse effect on its financial condition. In addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or John Deere may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any John Deere dealers could lead to inadequate market coverage, negative customer impressions of John Deere, and may adversely impact John Deere's ability to collect receivables that are associated with that dealer. **Current (2023):** We rely on the capability of our dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that dealers purchase from us. If our dealers are unsuccessful in these endeavors, we will be unable to grow our sales and revenue, which would have an adverse effect on our financial condition. 17 17 17 Table of ContentsIn addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. The unavailability of specialized technicians to service our equipment may result in overburdening dealers' servicing capacity. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or we may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any of our dealers could lead to inadequate market coverage, negative customer impressions, and may adversely impact our ability to collect receivables that are associated with that dealer. ENVIRONMENTAL, CLIMATE, AND WEATHER RISKSUnfavorable weather conditions or natural catastrophes that reduce agricultural production and demand for agriculture and turf equipment could directly and indirectly affect our business.The purchasing decisions of our customers, particularly the purchasers of agriculture and turf equipment, can be significantly affected by poor or unusual weather conditions. Such conditions include: ●Insufficient levels of rain, which prevent farmers from planting new crops and may cause growing crops to die or result in lower yields; ●Excessive rain or flooding can prevent planting from occurring at optimal times and may cause crop loss through increased disease or mold growth; ●Temperatures outside normal ranges, which can cause crop failure or decreased yields and may also affect disease incidence; ●Natural disasters such as regional floods, hurricanes or other storms, droughts, diseases, wildfires, and pests, either as a physical effect of climate change or otherwise, which have had, and could in the future have, significant negative effects on agricultural and livestock production;●Adverse weather conditions in a particular geographic region, particularly during the important spring selling season; and●Drought conditions can adversely affect sales of certain mowing equipment and can similarly cause lower sales volume.Each of these conditions could have a negative impact on farm income which can affect demand for agricultural equipment and the financial condition and credit risk of our dealers and customers. Governmental actions designed to address climate change based on the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and our customers. There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including us, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to us in the form of taxes or emission allowances, required facilities improvements, and increased energy costs. These results would increase our operating costs through higher utility, transportation, and materials cost and could prevent us from selling products into certain markets. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for our equipment. Further, our financial services segment is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the financing operations and climate-risk processes developed by the segment. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The EU recently adopted the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) that will impose disclosure of the risks and opportunities arising from social and environmental issues, and on the impact of companies' activities on people and the environment. The CSRD will need to be transposed into Member State law before it becomes effective, which is expected to occur in 2024. Similarly, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. 18 Table of Contents Table of Contents Table of Contents In addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. The unavailability of specialized technicians to service our equipment may result in overburdening dealers' servicing capacity. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or we may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any of our dealers could lead to inadequate market coverage, negative customer impressions, and may adversely impact our ability to collect receivables that are associated with that dealer. ENVIRONMENTAL, CLIMATE, AND WEATHER RISKSUnfavorable weather conditions or natural catastrophes that reduce agricultural production and demand for agriculture and turf equipment could directly and indirectly affect our business.The purchasing decisions of our customers, particularly the purchasers of agriculture and turf equipment, can be significantly affected by poor or unusual weather conditions. Such conditions include: ●Insufficient levels of rain, which prevent farmers from planting new crops and may cause growing crops to die or result in lower yields; ●Excessive rain or flooding can prevent planting from occurring at optimal times and may cause crop loss through increased disease or mold growth; ●Temperatures outside normal ranges, which can cause crop failure or decreased yields and may also affect disease incidence; ●Natural disasters such as regional floods, hurricanes or other storms, droughts, diseases, wildfires, and pests, either as a physical effect of climate change or otherwise, which have had, and could in the future have, significant negative effects on agricultural and livestock production;●Adverse weather conditions in a particular geographic region, particularly during the important spring selling season; and●Drought conditions can adversely affect sales of certain mowing equipment and can similarly cause lower sales volume.Each of these conditions could have a negative impact on farm income which can affect demand for agricultural equipment and the financial condition and credit risk of our dealers and customers. Governmental actions designed to address climate change based on the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and our customers. There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including us, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to us in the form of taxes or emission allowances, required facilities improvements, and increased energy costs. These results would increase our operating costs through higher utility, transportation, and materials cost and could prevent us from selling products into certain markets. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for our equipment. Further, our financial services segment is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the financing operations and climate-risk processes developed by the segment. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The EU recently adopted the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) that will impose disclosure of the risks and opportunities arising from social and environmental issues, and on the impact of companies' activities on people and the environment. The CSRD will need to be transposed into Member State law before it becomes effective, which is expected to occur in 2024. Similarly, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. In addition, the dealer channel's ability to support and service precision technology solutions and emerging power solutions may affect customers' acceptance and adoption rates of these products. The unavailability of specialized technicians to service our equipment may result in overburdening dealers' servicing capacity. Dealers may have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors. Dealers may exit or we may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplanned loss of any of our dealers could lead to inadequate market coverage, negative customer impressions, and may adversely impact our ability to collect receivables that are associated with that dealer. --- ## Modified: Our ability to adapt in highly competitive markets could affect our business, results of operations, and financial condition. **Key changes:** - Reworded sentence: "We compete in a variety of highly competitive global and regional markets with other manufacturers and distributors that produce and sell similar products." **Prior (2022):** John Deere operates in a variety of highly competitive global and regional markets. John Deere competes worldwide with a number of other manufacturers and distributors that produce and sell similar products. In addition, John Deere's industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. John Deere competes on the basis of product performance, innovation and quality, distribution, customer service, and price. Aggressive pricing or other strategies pursued by competitors, unanticipated product or manufacturing delays, or John Deere's failure to price its products competitively could adversely affect its business, results of operations, and financial condition. **Current (2023):** We compete in a variety of highly competitive global and regional markets with other manufacturers and distributors that produce and sell similar products. In addition, our industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. We compete on product performance, innovation and quality, distribution, sustainability, customer service, and price. Aggressive pricing or other strategies of competitors, unanticipated product or manufacturing delays, or our failure to price products competitively could adversely affect our business, results of operations, and financial condition. --- ## Modified: Total Liabilities and Stockholders' Equity **Key changes:** - Reworded sentence: "​ $ 40,590 ​ $ 39,208 ​ $ 70,732 ​ $ 58,864 ​ $ (7,235) ​ $ (8,042) ​ $ 104,087 ​ $ 90,030 ​ ​ ​ ​ ​ 7 Elimination of receivables / payables between equipment operations and financial services." **Prior (2022):** ​ $ 39,208 ​ $ 39,152 ​ $ 58,864 ​ $ 51,624 ​ $ (8,042) ​ $ (6,662) ​ $ 90,030 ​ $ 84,114 ​ ​ ​ ​ ​ 8 Elimination of receivables / payables between equipment operations and financial services. 9 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 10 Reclassification of net pension assets / liabilities. 11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions. 12 Elimination of financial services' equity. ​ 40 40 40 Table of ContentsSUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STATEMENTS OF CASH FLOWS​​​For the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2022​2021​2020​2022​2021​2020​2022​2021​2020​2022​2021​2020​​​Cash Flows from Operating Activities​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net income​$6,250​$ 5,084​$ 2,187​$ 880​$ 881​$ 566​​ ​​​​​​​​$ 7,130​$ 5,965​$ 2,753​​​Adjustments to reconcile net income to net cash provided by operating activities:​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Provision (credit) for credit losses​​ 3​​ 7​​ 5​​ 189​​ (13)​​ 105​​ ​​​​​​​​​ 192​​ (6)​​ 110​​​Provision for depreciation and amortization​​ 1,041​​ 1,043​​ 1,016​​ 1,050​​ 1,140​​ 1,227​$ (196)​$ (133)​$ (125)​​ 1,895​​ 2,050​​ 2,118​ 13​​Impairment charges​​ 88​​ 50​​ 162​​ ​​​ ​​​ 32​​ ​​​ ​​​ ​​​ 88​​ 50​​ 194​​​Share-based compensation expense​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ 85​​ 82​​ 81​​ 85​​ 82​​ 81​ 14​​Loss on sale of businesses and unconsolidated affiliates​​ ​​​ ​​​ 24​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​ ​​​ 24​​​Gain on remeasurement of previously held equity investment​​ (326)​​ ​​​​​​ ​​​ ​​​​​​ ​​​ ​​​​​​ (326)​​​​​​​​​Undistributed earnings of Financial Services​​ 444​​ 555​​ 386​​ ​​​ ​​​ ​​​ (444)​​ (555)​​ (386)​​​​​ ​​​ ​​ 15​​Provision (credit) for deferred income taxes​​ 8​​ (369)​​ 105​​ (74)​​ (72)​​ (116)​​ ​​​ ​​​ ​​​ (66)​​ (441)​​ (11)​​​Changes in assets and liabilities:​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​​​​​​​​Trade, notes, and financing receivables related to sales ​​ (189)​​ (105)​​ 373​​ ​​​ ​​​ ​​​(2,294)​​ 1,074​​ 1,636​​ (2,483)​​ 969​​ 2,009​16, 18, 19​​Inventories​​(1,924)​​ (1,835)​​ 1,011​​ ​​​ ​​​ ​​​ (167)​​ (662)​​ (614)​​ (2,091)​​ (2,497)​​ 397​ 17​​Accounts payable and accrued expenses​​ 1,444​​ 1,589​​ (331)​​ 143​​ 57​​ (1)​​ (454)​​ 238​​ 325​​ 1,133​​ 1,884​​ (7)​ 18​​Accrued income taxes payable/receivable​​ 166​​ 13​​ (14)​​ (25)​​ (2)​​ 22​​ ​​​ ​​​ ​​​ 141​​ 11​​ 8​​​Retirement benefits​​ (1,016)​​ 30​​ (544)​​ 1​​ (1)​​ 7​​ ​​​ ​​​ ​​​ (1,015)​​ 29​​ (537)​​​Other​​ 250​​ (162)​​ 380​​ (287)​​ (25)​​ 134​​ 53​​ (183)​​ (170)​​ 16​​ (370)​​ 344​13, 14, 17​​Net cash provided by operating activities​​6,239​​ 5,900​​ 4,760​​ 1,877​​ 1,965​​ 1,976​​ (3,417)​​ (139)​​ 747​​ 4,699​​ 7,726​​ 7,483​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Investing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Collections of receivables (excluding receivables related to sales)​​ ​​​ ​​​ ​​​ 22,400​​ 20,527​​ 18,829​​ (1,493)​​ (1,568)​​ (1,448)​​ 20,907​​ 18,959​​ 17,381​ 16​​Proceeds from sales of equipment on operating leases​​ ​​​ ​​​ ​​​ 2,093​​ 2,094​​ 1,783​​ ​​​ ​​​ ​​​ 2,093​​ 2,094​​ 1,783​​​Cost of receivables acquired (excluding receivables related to sales) ​​ ​​​ ​​​ ​​​ (26,903)​​ (25,305)​​ (21,360)​​ 603​​ 1,652​​ 1,395​​ (26,300)​​ (23,653)​​ (19,965)​ 16​​Acquisitions of businesses, net of cash acquired​​ (498)​​ (244)​​ (66)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ (498)​​ (244)​​ (66)​​​Purchases of property and equipment​​ (1,131)​​ (845)​​ (816)​​ (3)​​ (3)​​ (4)​​ ​​​ ​​​ ​​​ (1,134)​​ (848)​​ (820)​​​Cost of equipment on operating leases acquired​​ ​​​ ​​​ ​​​ (2,879)​​ (2,627)​​ (2,666)​​ 225​​ 895​​ 830​​ (2,654)​​ (1,732)​​ (1,836)​ 17​​Decrease (increase) in trade and wholesale receivables​​ ​​​ ​​​ ​​​ (3,601)​​ 1,364​​ 1,999​​ 3,601​​ (1,364)​​(1,999)​​​​​ ​​​ ​​ 16​​Collateral on derivatives - net ​​ 5​​ (7)​​ (6)​​ (647)​​ (274)​​ 274​​ ​​​ ​​​ ​​​ (642)​​ (281)​​ 268​​​Other​​ (206)​​ 62​​ (103)​​ (81)​​ (84)​​ (71)​​ 30​​ (23)​​ 110​​ (257)​​ (45)​​ (64)​15, 19​​Net cash used for investing activities​​(1,830)​​ (1,034)​​ (991)​​ (9,621)​​ (4,308)​​ (1,216)​​ 2,966​​ (408)​​ (1,112)​​ (8,485)​​ (5,750)​​ (3,319)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Financing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Increase (decrease) in total short-term borrowings​​ 136​​ 65​​ (177)​​ 3,716​​ 753​​ (1,183)​​ ​​​​​​​​​ 3,852​​ 818​​ (1,360)​​​Change in intercompany receivables/payables​​ (1,633)​​ (354)​​(3,207)​​ 1,633​​ 354​​ 3,207​​ ​​​​​​​​​​​​ ​​​ ​​​​Proceeds from long-term borrowings​​ 138​​ 11​​ 4,586​​ 10,220​​ 8,711​​ 4,685​​ ​​​​​​​​​ 10,358​​ 8,722​​ 9,271​​​Payments of long-term borrowings​​ (1,356)​​ (94)​​ (607)​​ (7,089)​​ (6,996)​​ (6,776)​​ ​​​​​​​​​ (8,445)​​ (7,090)​​ (7,383)​​​Proceeds from issuance of common stock​​ 63​​ 148​​ 331​​ ​​​ ​​​ ​​​ ​​​​​​​​​ 63​​ 148​​ 331​​​Repurchases of common stock​​(3,597)​​ (2,538)​​ (750)​​ ​​​ ​​​ ​​​ ​​​​​​​​​ (3,597)​​ (2,538)​​ (750)​​​Dividends paid​​ (1,313)​​ (1,040)​​ (956)​​ (444)​​ (555)​​ (386)​​ 444​​ 555​​ 386​​ (1,313)​​ (1,040)​​ (956)​ 15​​Other​​ (57)​​ (61)​​ (105)​​ (42)​​ (29)​​ (7)​​ 7​​ (8)​​ (21)​​ (92)​​ (98)​​ (133)​ 15​​Net cash provided by (used for) financing activities​​(7,619)​​(3,863)​​ (885)​​ 7,994​​ 2,238​​ (460)​​ 451​​ 547​​ 365​​ 826​​ (1,078)​​ (980)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash​​ (209)​​ 41​​ 76​​ (15)​​ 14​​ (44)​​ ​​​​​​​​​ (224)​​ 55​​ 32​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash​​ (3,419)​​ 1,044​​ 2,960​​ 235​​ (91)​​ 256​​ ​​​ ​​​ ​​​ (3,184)​​ 953​​ 3,216​​​Cash, Cash Equivalents, and Restricted Cash at Beginning of Year​​ 7,200​​ 6,156​​ 3,196​​ 925​​ 1,016​​ 760​​ ​​​​​​​​​ 8,125​​ 7,172​​ 3,956​​​Cash, Cash Equivalents, and Restricted Cash at End of Year​$ 3,781​$ 7,200​$ 6,156​$ 1,160​$ 925​$ 1,016​​ ​​​ ​​​ ​​$ 4,941​$ 8,125​$ 7,172​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Components of cash, cash equivalents, and restricted cash​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash and cash equivalents​$ 3,767​$ 7,188​$ 6,145​$ 1,007​$ 829​$ 921​​​​​​​​​​$4,774​$ 8,017​$ 7,066​​​Restricted cash (Other assets)​​ 14​​ 12​​ 11​​ 153​​ 96​​ 95​​​​​​​​​​​ 167​​ 108​​ 106​​​Total cash, cash equivalents, and restricted cash​$ 3,781​$ 7,200​$ 6,156​$ 1,160​$ 925​$ 1,016​​ ​​​ ​​​ ​​$ 4,941​$ 8,125​$ 7,172​​​​​13 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).14 Reclassification of share-based compensation expense.15 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities, and capital investments in financial services from the equipment operations.16 Primarily reclassification of receivables related to the sale of equipment.17 Reclassification of direct lease agreements with retail customers.18 Reclassification of sales incentive accruals on receivables sold to financial services19 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.​41 Table of Contents Table of Contents Table of Contents SUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STATEMENTS OF CASH FLOWS​​​For the Years Ended October 30, 2022, October 31, 2021, and November 1, 2020​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2022​2021​2020​2022​2021​2020​2022​2021​2020​2022​2021​2020​​​Cash Flows from Operating Activities​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net income​$6,250​$ 5,084​$ 2,187​$ 880​$ 881​$ 566​​ ​​​​​​​​$ 7,130​$ 5,965​$ 2,753​​​Adjustments to reconcile net income to net cash provided by operating activities:​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Provision (credit) for credit losses​​ 3​​ 7​​ 5​​ 189​​ (13)​​ 105​​ ​​​​​​​​​ 192​​ (6)​​ 110​​​Provision for depreciation and amortization​​ 1,041​​ 1,043​​ 1,016​​ 1,050​​ 1,140​​ 1,227​$ (196)​$ (133)​$ (125)​​ 1,895​​ 2,050​​ 2,118​ 13​​Impairment charges​​ 88​​ 50​​ 162​​ ​​​ ​​​ 32​​ ​​​ ​​​ ​​​ 88​​ 50​​ 194​​​Share-based compensation expense​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ 85​​ 82​​ 81​​ 85​​ 82​​ 81​ 14​​Loss on sale of businesses and unconsolidated affiliates​​ ​​​ ​​​ 24​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​ ​​​ 24​​​Gain on remeasurement of previously held equity investment​​ (326)​​ ​​​​​​ ​​​ ​​​​​​ ​​​ ​​​​​​ (326)​​​​​​​​​Undistributed earnings of Financial Services​​ 444​​ 555​​ 386​​ ​​​ ​​​ ​​​ (444)​​ (555)​​ (386)​​​​​ ​​​ ​​ 15​​Provision (credit) for deferred income taxes​​ 8​​ (369)​​ 105​​ (74)​​ (72)​​ (116)​​ ​​​ ​​​ ​​​ (66)​​ (441)​​ (11)​​​Changes in assets and liabilities:​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​​​​​​​​Trade, notes, and financing receivables related to sales ​​ (189)​​ (105)​​ 373​​ ​​​ ​​​ ​​​(2,294)​​ 1,074​​ 1,636​​ (2,483)​​ 969​​ 2,009​16, 18, 19​​Inventories​​(1,924)​​ (1,835)​​ 1,011​​ ​​​ ​​​ ​​​ (167)​​ (662)​​ (614)​​ (2,091)​​ (2,497)​​ 397​ 17​​Accounts payable and accrued expenses​​ 1,444​​ 1,589​​ (331)​​ 143​​ 57​​ (1)​​ (454)​​ 238​​ 325​​ 1,133​​ 1,884​​ (7)​ 18​​Accrued income taxes payable/receivable​​ 166​​ 13​​ (14)​​ (25)​​ (2)​​ 22​​ ​​​ ​​​ ​​​ 141​​ 11​​ 8​​​Retirement benefits​​ (1,016)​​ 30​​ (544)​​ 1​​ (1)​​ 7​​ ​​​ ​​​ ​​​ (1,015)​​ 29​​ (537)​​​Other​​ 250​​ (162)​​ 380​​ (287)​​ (25)​​ 134​​ 53​​ (183)​​ (170)​​ 16​​ (370)​​ 344​13, 14, 17​​Net cash provided by operating activities​​6,239​​ 5,900​​ 4,760​​ 1,877​​ 1,965​​ 1,976​​ (3,417)​​ (139)​​ 747​​ 4,699​​ 7,726​​ 7,483​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Investing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Collections of receivables (excluding receivables related to sales)​​ ​​​ ​​​ ​​​ 22,400​​ 20,527​​ 18,829​​ (1,493)​​ (1,568)​​ (1,448)​​ 20,907​​ 18,959​​ 17,381​ 16​​Proceeds from sales of equipment on operating leases​​ ​​​ ​​​ ​​​ 2,093​​ 2,094​​ 1,783​​ ​​​ ​​​ ​​​ 2,093​​ 2,094​​ 1,783​​​Cost of receivables acquired (excluding receivables related to sales) ​​ ​​​ ​​​ ​​​ (26,903)​​ (25,305)​​ (21,360)​​ 603​​ 1,652​​ 1,395​​ (26,300)​​ (23,653)​​ (19,965)​ 16​​Acquisitions of businesses, net of cash acquired​​ (498)​​ (244)​​ (66)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ (498)​​ (244)​​ (66)​​​Purchases of property and equipment​​ (1,131)​​ (845)​​ (816)​​ (3)​​ (3)​​ (4)​​ ​​​ ​​​ ​​​ (1,134)​​ (848)​​ (820)​​​Cost of equipment on operating leases acquired​​ ​​​ ​​​ ​​​ (2,879)​​ (2,627)​​ (2,666)​​ 225​​ 895​​ 830​​ (2,654)​​ (1,732)​​ (1,836)​ 17​​Decrease (increase) in trade and wholesale receivables​​ ​​​ ​​​ ​​​ (3,601)​​ 1,364​​ 1,999​​ 3,601​​ (1,364)​​(1,999)​​​​​ ​​​ ​​ 16​​Collateral on derivatives - net ​​ 5​​ (7)​​ (6)​​ (647)​​ (274)​​ 274​​ ​​​ ​​​ ​​​ (642)​​ (281)​​ 268​​​Other​​ (206)​​ 62​​ (103)​​ (81)​​ (84)​​ (71)​​ 30​​ (23)​​ 110​​ (257)​​ (45)​​ (64)​15, 19​​Net cash used for investing activities​​(1,830)​​ (1,034)​​ (991)​​ (9,621)​​ (4,308)​​ (1,216)​​ 2,966​​ (408)​​ (1,112)​​ (8,485)​​ (5,750)​​ (3,319)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Financing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Increase (decrease) in total short-term borrowings​​ 136​​ 65​​ (177)​​ 3,716​​ 753​​ (1,183)​​ ​​​​​​​​​ 3,852​​ 818​​ (1,360)​​​Change in intercompany receivables/payables​​ (1,633)​​ (354)​​(3,207)​​ 1,633​​ 354​​ 3,207​​ ​​​​​​​​​​​​ ​​​ ​​​​Proceeds from long-term borrowings​​ 138​​ 11​​ 4,586​​ 10,220​​ 8,711​​ 4,685​​ ​​​​​​​​​ 10,358​​ 8,722​​ 9,271​​​Payments of long-term borrowings​​ (1,356)​​ (94)​​ (607)​​ (7,089)​​ (6,996)​​ (6,776)​​ ​​​​​​​​​ (8,445)​​ (7,090)​​ (7,383)​​​Proceeds from issuance of common stock​​ 63​​ 148​​ 331​​ ​​​ ​​​ ​​​ ​​​​​​​​​ 63​​ 148​​ 331​​​Repurchases of common stock​​(3,597)​​ (2,538)​​ (750)​​ ​​​ ​​​ ​​​ ​​​​​​​​​ (3,597)​​ (2,538)​​ (750)​​​Dividends paid​​ (1,313)​​ (1,040)​​ (956)​​ (444)​​ (555)​​ (386)​​ 444​​ 555​​ 386​​ (1,313)​​ (1,040)​​ (956)​ 15​​Other​​ (57)​​ (61)​​ (105)​​ (42)​​ (29)​​ (7)​​ 7​​ (8)​​ (21)​​ (92)​​ (98)​​ (133)​ 15​​Net cash provided by (used for) financing activities​​(7,619)​​(3,863)​​ (885)​​ 7,994​​ 2,238​​ (460)​​ 451​​ 547​​ 365​​ 826​​ (1,078)​​ (980)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash​​ (209)​​ 41​​ 76​​ (15)​​ 14​​ (44)​​ ​​​​​​​​​ (224)​​ 55​​ 32​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash​​ (3,419)​​ 1,044​​ 2,960​​ 235​​ (91)​​ 256​​ ​​​ ​​​ ​​​ (3,184)​​ 953​​ 3,216​​​Cash, Cash Equivalents, and Restricted Cash at Beginning of Year​​ 7,200​​ 6,156​​ 3,196​​ 925​​ 1,016​​ 760​​ ​​​​​​​​​ 8,125​​ 7,172​​ 3,956​​​Cash, Cash Equivalents, and Restricted Cash at End of Year​$ 3,781​$ 7,200​$ 6,156​$ 1,160​$ 925​$ 1,016​​ ​​​ ​​​ ​​$ 4,941​$ 8,125​$ 7,172​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Components of cash, cash equivalents, and restricted cash​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash and cash equivalents​$ 3,767​$ 7,188​$ 6,145​$ 1,007​$ 829​$ 921​​​​​​​​​​$4,774​$ 8,017​$ 7,066​​​Restricted cash (Other assets)​​ 14​​ 12​​ 11​​ 153​​ 96​​ 95​​​​​​​​​​​ 167​​ 108​​ 106​​​Total cash, cash equivalents, and restricted cash​$ 3,781​$ 7,200​$ 6,156​$ 1,160​$ 925​$ 1,016​​ ​​​ ​​​ ​​$ 4,941​$ 8,125​$ 7,172​​​​​13 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).14 Reclassification of share-based compensation expense.15 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities, and capital investments in financial services from the equipment operations.16 Primarily reclassification of receivables related to the sale of equipment.17 Reclassification of direct lease agreements with retail customers.18 Reclassification of sales incentive accruals on receivables sold to financial services19 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.​ **Current (2023):** ​ $ 40,590 ​ $ 39,208 ​ $ 70,732 ​ $ 58,864 ​ $ (7,235) ​ $ (8,042) ​ $ 104,087 ​ $ 90,030 ​ ​ ​ ​ ​ 7 Elimination of receivables / payables between equipment operations and financial services. 8 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 9 Reclassification of net pension assets / liabilities. 10 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions. 11 Elimination of financial services' equity. ​ 40 40 40 Table of ContentsSUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STATEMENTS OF CASH FLOWS​​​For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021​​​Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2023​2022​2021​2023​2022​2021​2023​2022​2021​2023​2022​2021​​​Cash Flows from Operating Activities​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net income​$ 9,536​$ 6,250​$ 5,084​$ 619​$ 880​$ 881​​ ​​​ ​​​​​$ 10,155​$ 7,130​$ 5,965​​​Adjustments to reconcile net income to net cash provided by operating activities:​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Provision (credit) for credit losses​​ 7​​ 3​​ 7​​ (23)​​ 189​​ (13)​​ ​​​ ​​​​​​ (16)​​ 192​​ (6)​​​Provision for depreciation and amortization​​ 1,123​​ 1,041​​ 1,043​​ 1,016​​ 1,050​​ 1,140​$ (135)​$ (196)​$ (133)​​ 2,004​​ 1,895​​ 2,050​ 12​​Impairments and other adjustments​​ 18​​ 88​​ 50​​ 173​​ ​​​ ​​​ ​​​ ​​​ ​​​ 191​​ 88​​ 50​​​Share-based compensation expense​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ 130​​ 85​​ 82​​ 130​​ 85​​ 82​ 13​​Gain on remeasurement of previously held equity investment​​ ​​​ (326)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​ (326)​​​​​​Distributed earnings of Financial Services​​ 215​​ 444​​ 555​​ ​​​ ​​​ ​​​ (215)​​ (444)​​ (555)​​​​​ ​​​ ​​ 14​​Provision (credit) for deferred income taxes​​ (959)​​ 8​​ (369)​​ 169​​ (74)​​ (72)​​ ​​​ ​​​ ​​​ (790)​​ (66)​​ (441)​​​Changes in assets and liabilities:​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​​​​​​​​Receivables related to sales ​​ (58)​​ (189)​​ (105)​​ ​​​ ​​​ ​​​ (4,195)​​ (2,294)​​ 1,074​​ (4,253)​​ (2,483)​​ 969​15, 17, 18​​Inventories​​ 474​​ (1,924)​​ (1,835)​​ ​​​ ​​​ ​​​ (195)​​ (167)​​ (662)​​ 279​​ (2,091)​​ (2,497)​ 16​​Accounts payable and accrued expenses​​ 1,352​​ 1,444​​ 1,589​​ 449​​ 143​​ 57​​ (971)​​ (454)​​ 238​​ 830​​ 1,133​​ 1,884​ 17​​Accrued income taxes payable/receivable​​ 8​​ 166​​ 13​​ (31)​​ (25)​​ (2)​​ ​​​ ​​​ ​​​ (23)​​ 141​​ 11​​​Retirement benefits​​ (164)​​ (1,016)​​ 30​​ (6)​​ 1​​ (1)​​ ​​​ ​​​ ​​​ (170)​​ (1,015)​​ 29​​​Other​​ 367​​ 250​​ (162)​​ (51)​​ (287)​​ (25)​​ (64)​​ 53​​ (183)​​ 252​​ 16​​ (370)​12, 13, 16​​Net cash provided by operating activities​​ 11,919​​ 6,239​​ 5,900​​ 2,315​​ 1,877​​ 1,965​​ (5,645)​​ (3,417)​​ (139)​​ 8,589​​ 4,699​​ 7,726​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Investing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Collections of receivables (excluding receivables related to sales)​​ ​​​ ​​​ ​​​ 24,128​​ 22,400​​ 20,527​​ (1,077)​​ (1,493)​​ (1,568)​​ 23,051​​ 20,907​​ 18,959​ 15​​Proceeds from sales of equipment on operating leases​​ ​​​ ​​​ ​​​ 1,981​​ 2,093​​ 2,094​​ ​​​ ​​​ ​​​ 1,981​​ 2,093​​ 2,094​​​Cost of receivables acquired (excluding receivables related to sales) ​​ ​​​ ​​​ ​​​ (29,229)​​ (26,903)​​ (25,305)​​ 457​​ 603​​ 1,652​​ (28,772)​​ (26,300)​​ (23,653)​ 15​​Acquisitions of businesses, net of cash acquired​​ (82)​​ (498)​​ (244)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ (82)​​ (498)​​ (244)​​​Purchases of property and equipment​​ (1,494)​​ (1,131)​​ (845)​​ (4)​​ (3)​​ (3)​​ ​​​ ​​​ ​​​ (1,498)​​ (1,134)​​ (848)​​​Cost of equipment on operating leases acquired​​ ​​​ ​​​ ​​​ (3,234)​​ (2,879)​​ (2,627)​​ 264​​ 225​​ 895​​ (2,970)​​ (2,654)​​ (1,732)​ 16​​Increase (decrease) in investment in Financial Services​​ (870)​​ 7​​ (8)​​ ​​​ ​​​ ​​​ 870​​ (7)​​ 8​​​​​ ​​​ ​​ 19​​Decrease (increase) in trade and wholesale receivables​​ ​​​ ​​​ ​​​ (5,783)​​ (3,601)​​ 1,364​​ 5,783​​ 3,601​​ (1,364)​​​​​ ​​​ ​​ 15​​Collateral on derivatives - net ​​ (1)​​ 5​​ (7)​​ (11)​​ (647)​​ (274)​​ ​​​ ​​​ ​​​ (12)​​ (642)​​ (281)​​​Other​​ (290)​​ (213)​​ 70​​ (160)​​ (81)​​ (84)​​ 3​​ 37​​ (31)​​ (447)​​ (257)​​ (45)​18​​Net cash used for investing activities​​ (2,737)​​ (1,830)​​ (1,034)​​ (12,312)​​ (9,621)​​ (4,308)​​ 6,300​​ 2,966​​ (408)​​ (8,749)​​ (8,485)​​ (5,750)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Financing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net proceeds (payments) in short-term borrowings (original maturities three months or less)​​ (113)​​ 136​​ 65​​ 4,121​​ 3,716​​ 753​​ ​​​​​​​​​ 4,008​​ 3,852​​ 818​​​Change in intercompany receivables/payables​​ 2,090​​ (1,633)​​ (354)​​ (2,090)​​ 1,633​​ 354​​ ​​​​​​​​​​​​ ​​​ ​​​​Proceeds from borrowings issued (original maturities greater than three months)​​ 342​​ 138​​ 11​​ 15,087​​ 10,220​​ 8,711​​ ​​​​​​​​​ 15,429​​ 10,358​​ 8,722​​​Payments of borrowings (original maturities greater than three months)​​ (901)​​ (1,356)​​ (94)​​ (7,012)​​ (7,089)​​ (6,996)​​ ​​​​​​​​​ (7,913)​​ (8,445)​​ (7,090)​​​Repurchases of common stock​​ (7,216)​​(3,597)​​ (2,538)​​ ​​​ ​​​ ​​​ ​​​​​​​​​ (7,216)​​ (3,597)​​ (2,538)​​​Capital investment from Equipment Operations​​ ​​​ ​​​ ​​​ 870​​ (7)​​ 8​​ (870)​​ 7​​ (8)​​​​​ ​​​ ​​ 19​​Dividends paid​​ (1,427)​​ (1,313)​​ (1,040)​​ (215)​​ (444)​​ (555)​​ 215​​ 444​​ 555​​ (1,427)​​ (1,313)​​ (1,040)​ 14​​Other​​ (7)​​ 6​​ 87​​ (66)​​ (35)​​ (37)​​ ​​​ ​​​ ​​​ (73)​​ (29)​​ 50​​​Net cash provided by (used for) financing activities​​ (7,232)​​ (7,619)​​ (3,863)​​ 10,695​​ 7,994​​ 2,238​​ (655)​​ 451​​ 547​​ 2,808​​ 826​​ (1,078)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash​​ 24​​ (209)​​ 41​​ 7​​ (15)​​ 14​​ ​​​​​​​​​ 31​​ (224)​​ 55​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash​​ 1,974​​ (3,419)​​ 1,044​​ 705​​ 235​​ (91)​​ ​​​ ​​​ ​​​ 2,679​​ (3,184)​​ 953​​​Cash, Cash Equivalents, and Restricted Cash at Beginning of Year​​ 3,781​​ 7,200​​ 6,156​​ 1,160​​ 925​​ 1,016​​ ​​​​​​​​​ 4,941​​ 8,125​​ 7,172​​​Cash, Cash Equivalents, and Restricted Cash at End of Year​$ 5,755​$ 3,781​$ 7,200​$ 1,865​$ 1,160​$ 925​​ ​​​ ​​​ ​​$ 7,620​$ 4,941​$ 8,125​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Components of Cash, Cash Equivalents, and Restricted Cash​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash and cash equivalents​$ 5,720​$ 3,767​$ 7,188​$ 1,738​$ 1,007​$ 829​​​​​​​​​​$ 7,458​$ 4,774​$ 8,017​​​Restricted cash (Other assets)​​ 35​​ 14​​ 12​​ 127​​ 153​​ 96​​​​​​​​​​​ 162​​ 167​​ 108​​​Total Cash, Cash Equivalents, and Restricted Cash​$ 5,755​$ 3,781​$ 7,200​$ 1,865​$ 1,160​$ 925​​ ​​​ ​​​ ​​$ 7,620​$ 4,941​$ 8,125​​​​​12 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).13 Reclassification of share-based compensation expense.14 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities.15 Primarily reclassification of receivables related to the sale of equipment.16 Reclassification of direct lease agreements with retail customers.17 Reclassification of sales incentive accruals on receivables sold to financial services.18 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.19 Elimination of investment from equipment operations to financial services.41 Table of Contents Table of Contents Table of Contents SUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STATEMENTS OF CASH FLOWS​​​For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021​​​Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2023​2022​2021​2023​2022​2021​2023​2022​2021​2023​2022​2021​​​Cash Flows from Operating Activities​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net income​$ 9,536​$ 6,250​$ 5,084​$ 619​$ 880​$ 881​​ ​​​ ​​​​​$ 10,155​$ 7,130​$ 5,965​​​Adjustments to reconcile net income to net cash provided by operating activities:​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Provision (credit) for credit losses​​ 7​​ 3​​ 7​​ (23)​​ 189​​ (13)​​ ​​​ ​​​​​​ (16)​​ 192​​ (6)​​​Provision for depreciation and amortization​​ 1,123​​ 1,041​​ 1,043​​ 1,016​​ 1,050​​ 1,140​$ (135)​$ (196)​$ (133)​​ 2,004​​ 1,895​​ 2,050​ 12​​Impairments and other adjustments​​ 18​​ 88​​ 50​​ 173​​ ​​​ ​​​ ​​​ ​​​ ​​​ 191​​ 88​​ 50​​​Share-based compensation expense​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ 130​​ 85​​ 82​​ 130​​ 85​​ 82​ 13​​Gain on remeasurement of previously held equity investment​​ ​​​ (326)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​ (326)​​​​​​Distributed earnings of Financial Services​​ 215​​ 444​​ 555​​ ​​​ ​​​ ​​​ (215)​​ (444)​​ (555)​​​​​ ​​​ ​​ 14​​Provision (credit) for deferred income taxes​​ (959)​​ 8​​ (369)​​ 169​​ (74)​​ (72)​​ ​​​ ​​​ ​​​ (790)​​ (66)​​ (441)​​​Changes in assets and liabilities:​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​​​​​​​​​​​Receivables related to sales ​​ (58)​​ (189)​​ (105)​​ ​​​ ​​​ ​​​ (4,195)​​ (2,294)​​ 1,074​​ (4,253)​​ (2,483)​​ 969​15, 17, 18​​Inventories​​ 474​​ (1,924)​​ (1,835)​​ ​​​ ​​​ ​​​ (195)​​ (167)​​ (662)​​ 279​​ (2,091)​​ (2,497)​ 16​​Accounts payable and accrued expenses​​ 1,352​​ 1,444​​ 1,589​​ 449​​ 143​​ 57​​ (971)​​ (454)​​ 238​​ 830​​ 1,133​​ 1,884​ 17​​Accrued income taxes payable/receivable​​ 8​​ 166​​ 13​​ (31)​​ (25)​​ (2)​​ ​​​ ​​​ ​​​ (23)​​ 141​​ 11​​​Retirement benefits​​ (164)​​ (1,016)​​ 30​​ (6)​​ 1​​ (1)​​ ​​​ ​​​ ​​​ (170)​​ (1,015)​​ 29​​​Other​​ 367​​ 250​​ (162)​​ (51)​​ (287)​​ (25)​​ (64)​​ 53​​ (183)​​ 252​​ 16​​ (370)​12, 13, 16​​Net cash provided by operating activities​​ 11,919​​ 6,239​​ 5,900​​ 2,315​​ 1,877​​ 1,965​​ (5,645)​​ (3,417)​​ (139)​​ 8,589​​ 4,699​​ 7,726​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Investing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Collections of receivables (excluding receivables related to sales)​​ ​​​ ​​​ ​​​ 24,128​​ 22,400​​ 20,527​​ (1,077)​​ (1,493)​​ (1,568)​​ 23,051​​ 20,907​​ 18,959​ 15​​Proceeds from sales of equipment on operating leases​​ ​​​ ​​​ ​​​ 1,981​​ 2,093​​ 2,094​​ ​​​ ​​​ ​​​ 1,981​​ 2,093​​ 2,094​​​Cost of receivables acquired (excluding receivables related to sales) ​​ ​​​ ​​​ ​​​ (29,229)​​ (26,903)​​ (25,305)​​ 457​​ 603​​ 1,652​​ (28,772)​​ (26,300)​​ (23,653)​ 15​​Acquisitions of businesses, net of cash acquired​​ (82)​​ (498)​​ (244)​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​ (82)​​ (498)​​ (244)​​​Purchases of property and equipment​​ (1,494)​​ (1,131)​​ (845)​​ (4)​​ (3)​​ (3)​​ ​​​ ​​​ ​​​ (1,498)​​ (1,134)​​ (848)​​​Cost of equipment on operating leases acquired​​ ​​​ ​​​ ​​​ (3,234)​​ (2,879)​​ (2,627)​​ 264​​ 225​​ 895​​ (2,970)​​ (2,654)​​ (1,732)​ 16​​Increase (decrease) in investment in Financial Services​​ (870)​​ 7​​ (8)​​ ​​​ ​​​ ​​​ 870​​ (7)​​ 8​​​​​ ​​​ ​​ 19​​Decrease (increase) in trade and wholesale receivables​​ ​​​ ​​​ ​​​ (5,783)​​ (3,601)​​ 1,364​​ 5,783​​ 3,601​​ (1,364)​​​​​ ​​​ ​​ 15​​Collateral on derivatives - net ​​ (1)​​ 5​​ (7)​​ (11)​​ (647)​​ (274)​​ ​​​ ​​​ ​​​ (12)​​ (642)​​ (281)​​​Other​​ (290)​​ (213)​​ 70​​ (160)​​ (81)​​ (84)​​ 3​​ 37​​ (31)​​ (447)​​ (257)​​ (45)​18​​Net cash used for investing activities​​ (2,737)​​ (1,830)​​ (1,034)​​ (12,312)​​ (9,621)​​ (4,308)​​ 6,300​​ 2,966​​ (408)​​ (8,749)​​ (8,485)​​ (5,750)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash Flows from Financing Activities​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net proceeds (payments) in short-term borrowings (original maturities three months or less)​​ (113)​​ 136​​ 65​​ 4,121​​ 3,716​​ 753​​ ​​​​​​​​​ 4,008​​ 3,852​​ 818​​​Change in intercompany receivables/payables​​ 2,090​​ (1,633)​​ (354)​​ (2,090)​​ 1,633​​ 354​​ ​​​​​​​​​​​​ ​​​ ​​​​Proceeds from borrowings issued (original maturities greater than three months)​​ 342​​ 138​​ 11​​ 15,087​​ 10,220​​ 8,711​​ ​​​​​​​​​ 15,429​​ 10,358​​ 8,722​​​Payments of borrowings (original maturities greater than three months)​​ (901)​​ (1,356)​​ (94)​​ (7,012)​​ (7,089)​​ (6,996)​​ ​​​​​​​​​ (7,913)​​ (8,445)​​ (7,090)​​​Repurchases of common stock​​ (7,216)​​(3,597)​​ (2,538)​​ ​​​ ​​​ ​​​ ​​​​​​​​​ (7,216)​​ (3,597)​​ (2,538)​​​Capital investment from Equipment Operations​​ ​​​ ​​​ ​​​ 870​​ (7)​​ 8​​ (870)​​ 7​​ (8)​​​​​ ​​​ ​​ 19​​Dividends paid​​ (1,427)​​ (1,313)​​ (1,040)​​ (215)​​ (444)​​ (555)​​ 215​​ 444​​ 555​​ (1,427)​​ (1,313)​​ (1,040)​ 14​​Other​​ (7)​​ 6​​ 87​​ (66)​​ (35)​​ (37)​​ ​​​ ​​​ ​​​ (73)​​ (29)​​ 50​​​Net cash provided by (used for) financing activities​​ (7,232)​​ (7,619)​​ (3,863)​​ 10,695​​ 7,994​​ 2,238​​ (655)​​ 451​​ 547​​ 2,808​​ 826​​ (1,078)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash​​ 24​​ (209)​​ 41​​ 7​​ (15)​​ 14​​ ​​​​​​​​​ 31​​ (224)​​ 55​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash​​ 1,974​​ (3,419)​​ 1,044​​ 705​​ 235​​ (91)​​ ​​​ ​​​ ​​​ 2,679​​ (3,184)​​ 953​​​Cash, Cash Equivalents, and Restricted Cash at Beginning of Year​​ 3,781​​ 7,200​​ 6,156​​ 1,160​​ 925​​ 1,016​​ ​​​​​​​​​ 4,941​​ 8,125​​ 7,172​​​Cash, Cash Equivalents, and Restricted Cash at End of Year​$ 5,755​$ 3,781​$ 7,200​$ 1,865​$ 1,160​$ 925​​ ​​​ ​​​ ​​$ 7,620​$ 4,941​$ 8,125​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Components of Cash, Cash Equivalents, and Restricted Cash​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cash and cash equivalents​$ 5,720​$ 3,767​$ 7,188​$ 1,738​$ 1,007​$ 829​​​​​​​​​​$ 7,458​$ 4,774​$ 8,017​​​Restricted cash (Other assets)​​ 35​​ 14​​ 12​​ 127​​ 153​​ 96​​​​​​​​​​​ 162​​ 167​​ 108​​​Total Cash, Cash Equivalents, and Restricted Cash​$ 5,755​$ 3,781​$ 7,200​$ 1,865​$ 1,160​$ 925​​ ​​​ ​​​ ​​$ 7,620​$ 4,941​$ 8,125​​​​​12 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).13 Reclassification of share-based compensation expense.14 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities.15 Primarily reclassification of receivables related to the sale of equipment.16 Reclassification of direct lease agreements with retail customers.17 Reclassification of sales incentive accruals on receivables sold to financial services.18 Elimination and reclassification of the effects of financial services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.19 Elimination of investment from equipment operations to financial services. --- ## Modified: CRITICAL ACCOUNTING ESTIMATES **Key changes:** - Reworded sentence: "​ ​ The timely preparation of financial statements requires management to make estimates and assumptions." **Prior (2022):** The preparation of the company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. The accounting policies below are those management believes are the most critical to the preparation of the company's financial statements and require the most difficult, subjective, or complex judgments. The company's other accounting policies are described in the Notes to the Consolidated Financial Statements. **Current (2023):** ​ ​ The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements: These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements. --- ## Modified: Governmental actions designed to address climate change based on the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and our customers. **Key changes:** - Reworded sentence: "There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate." - Reworded sentence: "Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business.We are subject to income taxes in the U.S." - Reworded sentence: "Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions." - Reworded sentence: "Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations." - Reworded sentence: "Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business.We are subject to income taxes in the U.S." **Prior (2022):** John Deere's equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard which limits the amount of harmful substances in exhaust gases that off-road engines can emit into the environment. In addition, governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines manufactured by John Deere, including those used in John Deere agriculture and construction and forestry equipment. John Deere has incurred and continues to incur substantial research and development costs related to the implementation of these more rigorous laws and regulations. While John Deere has developed and is executing comprehensive plans to meet these requirements, these plans are subject to many variables that could delay or otherwise affect John Deere's ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned or may in the future ban internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by John Deere, our business, results of operations, and financial condition could be negatively affected. 18 18 18 Table of ContentsFINANCIAL RISKS Sustained increases in funding obligations under the Company's pension plans may impair the Company's liquidity or financial condition.The Company maintains certain defined benefit pension plans for certain employees, which impose funding obligations. The Company uses many assumptions in calculating its future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. The Company may be required to make significant contributions to its pension plans in the future. These factors could significantly increase the Company's payment obligations under the plans and adversely affect its business, results of operations, and financial condition.Changes in government banking, monetary, and fiscal policies could have a negative effect on John Deere.Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues may not be effective and could have a material impact on John Deere's customers and markets. John Deere's operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on John Deere's customers by limiting their ability to enter into hedging transactions or to finance purchases of John Deere products. Government policies on spending can also affect John Deere, especially the construction and forestry segment, due to the impact of government spending on infrastructure development. John Deere's operations, including those outside of the United States, may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on John Deere.John Deere is subject to income taxes in the U.S. and numerous foreign jurisdictions. John Deere's domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. John Deere's effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If John Deere's effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, John Deere's operating results, cash flows, and financial condition could be adversely affected. The Company's consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in the currencies of other countries, creating currency exchange and translation risk.John Deere operates in many areas of the world, involving transactions denominated in a variety of currencies. John Deere is subject to currency exchange risk to the extent that its costs are denominated in currencies other than those in which John Deere earns revenues. Additionally, the reporting currency for the Company's consolidated financial statements is the U.S. dollar. Certain of John Deere's assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates in the Company's reported consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in the Company's consolidated financial statements, even if their value remains unchanged in their original currencies. While the use of currency hedging instruments may provide us with protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. Because John Deere's equipment operations and financial services segment are subject to interest rate risks, changes in interest rates can reduce demand for equipment, adversely affect interest margins, and limit access to capital markets while increasing borrowing costs.Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of John Deere's customers, either or both of which could negatively affect customer demand for John Deere equipment and customers' ability to repay obligations to John Deere. In response to increasing inflation, the U.S. Federal Reserve began to raise interest rates in March 2022 for the first time in over three years, and has signaled it expects to make additional rate increases. Rising interest rates could cause credit market dislocations, which could have an impact on funding costs, which are important to the financial services segment because such costs affect the segment's ability to offer customers competitive financing rates. While the Company strives to match the interest rate characteristics of its financial assets and liabilities, changing interest rates could have an adverse effect on the Company's net interest rate margin - the difference between the yield the Company earns on its assets and the interest rates the Company pays for funding, which could in turn affect the Company's net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for the Company and can increase the Company's cost of capital and hurt its competitive position.19 Table of Contents Table of Contents Table of Contents FINANCIAL RISKS Sustained increases in funding obligations under the Company's pension plans may impair the Company's liquidity or financial condition.The Company maintains certain defined benefit pension plans for certain employees, which impose funding obligations. The Company uses many assumptions in calculating its future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. The Company may be required to make significant contributions to its pension plans in the future. These factors could significantly increase the Company's payment obligations under the plans and adversely affect its business, results of operations, and financial condition.Changes in government banking, monetary, and fiscal policies could have a negative effect on John Deere.Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues may not be effective and could have a material impact on John Deere's customers and markets. John Deere's operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on John Deere's customers by limiting their ability to enter into hedging transactions or to finance purchases of John Deere products. Government policies on spending can also affect John Deere, especially the construction and forestry segment, due to the impact of government spending on infrastructure development. John Deere's operations, including those outside of the United States, may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on John Deere.John Deere is subject to income taxes in the U.S. and numerous foreign jurisdictions. John Deere's domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. John Deere's effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If John Deere's effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, John Deere's operating results, cash flows, and financial condition could be adversely affected. The Company's consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in the currencies of other countries, creating currency exchange and translation risk.John Deere operates in many areas of the world, involving transactions denominated in a variety of currencies. John Deere is subject to currency exchange risk to the extent that its costs are denominated in currencies other than those in which John Deere earns revenues. Additionally, the reporting currency for the Company's consolidated financial statements is the U.S. dollar. Certain of John Deere's assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates in the Company's reported consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in the Company's consolidated financial statements, even if their value remains unchanged in their original currencies. While the use of currency hedging instruments may provide us with protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. Because John Deere's equipment operations and financial services segment are subject to interest rate risks, changes in interest rates can reduce demand for equipment, adversely affect interest margins, and limit access to capital markets while increasing borrowing costs.Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of John Deere's customers, either or both of which could negatively affect customer demand for John Deere equipment and customers' ability to repay obligations to John Deere. In response to increasing inflation, the U.S. Federal Reserve began to raise interest rates in March 2022 for the first time in over three years, and has signaled it expects to make additional rate increases. Rising interest rates could cause credit market dislocations, which could have an impact on funding costs, which are important to the financial services segment because such costs affect the segment's ability to offer customers competitive financing rates. While the Company strives to match the interest rate characteristics of its financial assets and liabilities, changing interest rates could have an adverse effect on the Company's net interest rate margin - the difference between the yield the Company earns on its assets and the interest rates the Company pays for funding, which could in turn affect the Company's net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for the Company and can increase the Company's cost of capital and hurt its competitive position. **Current (2023):** There is global scientific consensus that greenhouse gas (GHG) emissions continue to alter the composition of Earth's atmosphere in ways that are affecting and are expected to continue to affect the global climate. These considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including us, are continuing to look for ways to reduce GHG emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to us in the form of taxes or emission allowances, required facilities improvements, and increased energy costs. These results would increase our operating costs through higher utility, transportation, and materials cost and could prevent us from selling products into certain markets. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for our equipment. Further, our financial services segment is subject to additional international and national European regulations relating to climate and environmental risk, which are continually evolving and could affect the financing operations and climate-risk processes developed by the segment. Regulators in Europe and the U.S. have also focused efforts on increased disclosure related to climate change and mitigation efforts. The EU recently adopted the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) that will impose disclosure of the risks and opportunities arising from social and environmental issues, and on the impact of companies' activities on people and the environment. The CSRD will need to be transposed into Member State law before it becomes effective, which is expected to occur in 2024. Similarly, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. 18 18 18 Table of ContentsIncreasingly stringent engine emission regulations or bans on internal combustion engines may impact our ability to manufacture and distribute certain engines or equipment, which could negatively affect business results.Our equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard, which limits the amount of certain substances in exhaust gases that off-road engines can emit into the environment. Governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines we manufacture, including those used in agriculture and CF equipment. We have incurred, and continue to incur, substantial research and development costs related to the implementation of these more rigorous laws and regulations. While we have developed and are executing comprehensive plans to meet these requirements, these plans are subject to variables that could delay or otherwise affect our ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned, or may in the future ban, internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by us, our business, results of operations, and financial condition could be negatively affected.FINANCIAL RISKS Changes in government banking, monetary, and fiscal policies could have a negative effect on us.Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues could have a material impact on our customers and markets. Central bank policy interest rates continued to increase in fiscal year 2023. Most of our retail receivables are fixed rate, while wholesale financing receivables are variable rate. We have both fixed and variable rate borrowings. Historically, rising interest rates impact our borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. Our operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on our customers by limiting their ability to enter hedging transactions or to finance purchases of our products. Government policies on spending can also affect us, especially the CF segment, due to the impact of government spending on infrastructure development. Our operations, including those outside of the U.S., may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business.We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If our effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected. Our consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in foreign currencies, creating currency exchange and translation risk.We are a global company with transactions denominated in a variety of currencies. We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which we earn our revenues. Additionally, the reporting currency for our consolidated financial statements is the U.S. dollar. Certain of our assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates and reported in our consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in the original currencies. While the use of currency hedging instruments may provide us with some protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. In Argentina, we have employed mechanisms to convert Argentine pesos into U.S. dollars to the extent possible. These mechanisms are short-term in nature, leaving us exposed to long-term currency fluctuations.Changes in interest rates or market liquidity conditions could adversely affect our financials and our earnings and/or cash flows. Central bank policy interest rates continued to increase in fiscal year 2023. Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our equipment and customers' ability to repay their obligations to us. Rising interest rates may cause credit market 19 Table of Contents Table of Contents Table of Contents Increasingly stringent engine emission regulations or bans on internal combustion engines may impact our ability to manufacture and distribute certain engines or equipment, which could negatively affect business results.Our equipment operations must meet increasingly stringent engine emission reduction regulations throughout the world, including the European Union's Stage V standard, which limits the amount of certain substances in exhaust gases that off-road engines can emit into the environment. Governmental agencies throughout the world are enacting more stringent laws and regulations to reduce off-road engine emissions. These laws and regulations are applicable to engines we manufacture, including those used in agriculture and CF equipment. We have incurred, and continue to incur, substantial research and development costs related to the implementation of these more rigorous laws and regulations. While we have developed and are executing comprehensive plans to meet these requirements, these plans are subject to variables that could delay or otherwise affect our ability to manufacture and distribute certain equipment or engines, which could negatively impact business results. Additionally, in certain locations governments have banned, or may in the future ban, internal combustion engines for some types of products completely. To the extent these bans affect products manufactured and sold by us, our business, results of operations, and financial condition could be negatively affected.FINANCIAL RISKS Changes in government banking, monetary, and fiscal policies could have a negative effect on us.Policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues could have a material impact on our customers and markets. Central bank policy interest rates continued to increase in fiscal year 2023. Most of our retail receivables are fixed rate, while wholesale financing receivables are variable rate. We have both fixed and variable rate borrowings. Historically, rising interest rates impact our borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. Our operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on our customers by limiting their ability to enter hedging transactions or to finance purchases of our products. Government policies on spending can also affect us, especially the CF segment, due to the impact of government spending on infrastructure development. Our operations, including those outside of the U.S., may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets. Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business.We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If our effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected. Our consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in foreign currencies, creating currency exchange and translation risk.We are a global company with transactions denominated in a variety of currencies. We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which we earn our revenues. Additionally, the reporting currency for our consolidated financial statements is the U.S. dollar. Certain of our assets, liabilities, expenses, and revenues are denominated in other countries' currencies, which are then translated into U.S. dollars at the applicable exchange rates and reported in our consolidated financial statements. Therefore, fluctuations in foreign exchange rates affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in the original currencies. While the use of currency hedging instruments may provide us with some protection from adverse fluctuations in currency exchange rates, by utilizing these instruments we potentially forego any benefits that may result from favorable fluctuations in such rates. In Argentina, we have employed mechanisms to convert Argentine pesos into U.S. dollars to the extent possible. These mechanisms are short-term in nature, leaving us exposed to long-term currency fluctuations.Changes in interest rates or market liquidity conditions could adversely affect our financials and our earnings and/or cash flows. Central bank policy interest rates continued to increase in fiscal year 2023. Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our equipment and customers' ability to repay their obligations to us. Rising interest rates may cause credit market --- ## Modified: If we are unable to deliver precision technology and agricultural solutions to our customers, it could affect our business, results of operations, and financial condition. **Key changes:** - Reworded sentence: "Our approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy." - Reworded sentence: "We utilize automation and machine learning and intelligence in some of our products." **Prior (2022):** John Deere's approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. To create and maintain a competitive differentiation through precision technology solutions, John Deere needs to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for customers through the production systems. John Deere may make significant investments in research and development, connectivity solutions, data security for precision technology solutions, and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. If John Deere is not able to deliver precision technology solutions with differentiated features and functionality, customers may not adopt technology solutions, which could have a material adverse effect on the Company's reputation and business. **Current (2023):** Our approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. Customers continue to adopt technology integrated in our portfolio of "smart" machines, systems, and solutions. We expect this trend to persist for the foreseeable future. To create and maintain a competitive differentiation, we need to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for our customers. We may make significant investments in research and development, connectivity solutions, digital security for precision technology solutions, and dealer and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. We utilize automation and machine learning and intelligence in some of our products. While the use of these emerging technologies can present significant benefits, it also creates risks and challenges. Data sourcing, technology, integration and process issues, program bias into decision-making algorithms, security problems, and the protection of privacy could impair the adoption and acceptance of autonomous machine solutions. If the output from these solutions is deemed to be inaccurate or questionable, our brand and reputation may be harmed and we may be subject to legal liability claims. Automation and machine learning and intelligence may also become the subject of local, state, federal, and foreign regulatory efforts limiting the features and capabilities of the technology. If we are not able to deliver precision technology solutions with differentiated features and functionality, or these solutions are not effective, customers may not adopt technology solutions, which could have a material adverse effect on our reputation and business. --- ## Modified: Allowance for Credit Losses **Key changes:** - Reworded sentence: "The allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11)." **Prior (2022):** The carrying value of equipment on operating leases is affected by the estimated fair values of the equipment at the end of the lease (residual values). Upon termination of the lease, the equipment is 35 35 35 Table of Contents​either purchased by the lessee or sold to a third party, in which case the company may record a gain or a loss for the difference between the estimated residual value and the sale price. The estimated residual values are based on several factors, including lease term, expected hours of usage, historical wholesale sales prices, return experience, intended equipment use, market dynamics and trends, and dealer residual value guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating leases for impairment when events or circumstances necessitate. Changes in residual value assumptions would affect the amount of depreciation expense and the amount of investment in equipment on operating leases. Depreciation is adjusted prospectively on a straight-line basis over the remaining lease term if residual estimates are revised. The total operating lease residual values at October 30, 2022, October 31, 2021, and November 1, 2020 were $4,640 million, $5,025 million, and $5,254 million, respectively. The decreases in 2022 and 2021 related to a lower average operating lease portfolio.Estimates used in determining end of lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. Hypothetically, if future market values for this equipment were to decrease 10 percent from the company's present estimates and all the equipment on operating leases were returned to the company for remarketing at the end of the lease term, the total effect would be to increase the company's annual depreciation for equipment on operating leases by approximately $40 million, after consideration of dealer residual value guarantees.Income TaxesThe company's income tax provision, deferred income tax assets and liabilities, and liabilities for uncertain tax benefits represent the company's best estimate of current and future income taxes to be paid. The annual tax rate is based on income tax laws, statutory tax rates, taxable income levels, and tax planning opportunities available in various jurisdictions where the company operates. These tax laws are complex, and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, regulations, statutory tax rates, and estimates of the company's future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements.Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. These assets are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities, and tax planning strategies. To the extent the company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates.Uncertain tax positions are determined based on whether it is more likely than not the tax positions will be sustained based on the technical merits of the position. For those positions that meet the more likely than not criteria, an estimate of the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority is recognized. The ultimate resolution of the tax position could take many years and result in a payment that is significantly different from the original estimate.A provision for foreign withholding taxes has not been recorded on undistributed profits of the company's non-U.S. subsidiaries that are determined to be indefinitely reinvested outside the U.S. If management intentions change in the future, there may be a significant impact on the provision for income taxes in the period the change occurs. For further information on income taxes, see Note 8 to the consolidated financial statements.FORWARD-LOOKING STATEMENTSCertain 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 the company's operations generally while others could more heavily affect a particular line of business.Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).Factors Affecting All Lines of BusinessAll of the company's businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, customer access to capital, and overall demand for our products; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the company operates; the effects of, or response to, wars and other conflicts, including the current conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic).Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial 36 Table of Contents​ Table of Contents Table of Contents ​ either purchased by the lessee or sold to a third party, in which case the company may record a gain or a loss for the difference between the estimated residual value and the sale price. The estimated residual values are based on several factors, including lease term, expected hours of usage, historical wholesale sales prices, return experience, intended equipment use, market dynamics and trends, and dealer residual value guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating leases for impairment when events or circumstances necessitate. Changes in residual value assumptions would affect the amount of depreciation expense and the amount of investment in equipment on operating leases. Depreciation is adjusted prospectively on a straight-line basis over the remaining lease term if residual estimates are revised. The total operating lease residual values at October 30, 2022, October 31, 2021, and November 1, 2020 were $4,640 million, $5,025 million, and $5,254 million, respectively. The decreases in 2022 and 2021 related to a lower average operating lease portfolio.Estimates used in determining end of lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. Hypothetically, if future market values for this equipment were to decrease 10 percent from the company's present estimates and all the equipment on operating leases were returned to the company for remarketing at the end of the lease term, the total effect would be to increase the company's annual depreciation for equipment on operating leases by approximately $40 million, after consideration of dealer residual value guarantees.Income TaxesThe company's income tax provision, deferred income tax assets and liabilities, and liabilities for uncertain tax benefits represent the company's best estimate of current and future income taxes to be paid. The annual tax rate is based on income tax laws, statutory tax rates, taxable income levels, and tax planning opportunities available in various jurisdictions where the company operates. These tax laws are complex, and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, regulations, statutory tax rates, and estimates of the company's future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements.Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. These assets are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities, and tax planning strategies. To the extent the company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates.Uncertain tax positions are determined based on whether it is more likely than not the tax positions will be sustained based on the technical merits of the position. For those positions that meet the more likely than not criteria, an estimate of the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority is recognized. The ultimate resolution of the tax position could take many years and result in a payment that is significantly different from the original estimate.A provision for foreign withholding taxes has not been recorded on undistributed profits of the company's non-U.S. subsidiaries that are determined to be indefinitely reinvested outside the U.S. If management intentions change in the future, there may be a significant impact on the provision for income taxes in the period the change occurs. For further information on income taxes, see Note 8 to the consolidated financial statements.FORWARD-LOOKING STATEMENTSCertain 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 the company's operations generally while others could more heavily affect a particular line of business.Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).Factors Affecting All Lines of BusinessAll of the company's businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, customer access to capital, and overall demand for our products; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the company operates; the effects of, or response to, wars and other conflicts, including the current conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic).Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial either purchased by the lessee or sold to a third party, in which case the company may record a gain or a loss for the difference between the estimated residual value and the sale price. The estimated residual values are based on several factors, including lease term, expected hours of usage, historical wholesale sales prices, return experience, intended equipment use, market dynamics and trends, and dealer residual value guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating leases for impairment when events or circumstances necessitate. Changes in residual value assumptions would affect the amount of depreciation expense and the amount of investment in equipment on operating leases. Depreciation is adjusted prospectively on a straight-line basis over the remaining lease term if residual estimates are revised. The total operating lease residual values at October 30, 2022, October 31, 2021, and November 1, 2020 were $4,640 million, $5,025 million, and $5,254 million, respectively. The decreases in 2022 and 2021 related to a lower average operating lease portfolio.Estimates used in determining end of lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. Hypothetically, if future market values for this equipment were to decrease 10 percent from the company's present estimates and all the equipment on operating leases were returned to the company for remarketing at the end of the lease term, the total effect would be to increase the company's annual depreciation for equipment on operating leases by approximately $40 million, after consideration of dealer residual value guarantees.Income TaxesThe company's income tax provision, deferred income tax assets and liabilities, and liabilities for uncertain tax benefits represent the company's best estimate of current and future income taxes to be paid. The annual tax rate is based on income tax laws, statutory tax rates, taxable income levels, and tax planning opportunities available in various jurisdictions where the company operates. These tax laws are complex, and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, regulations, statutory tax rates, and estimates of the company's future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements.Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. These assets are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities, and tax planning strategies. To the extent the company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates.Uncertain tax positions are determined based on whether it is more likely than not the tax positions will be sustained based on the technical merits of the position. For those positions that meet the more likely than not criteria, an estimate of the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority is recognized. The ultimate resolution of the tax position could take many years and result in a payment that is significantly different from the original estimate.A provision for foreign withholding taxes has not been recorded on undistributed profits of the company's non-U.S. subsidiaries that are determined to be indefinitely reinvested outside the U.S. If management intentions change in the future, there may be a significant impact on the provision for income taxes in the period the change occurs. For further information on income taxes, see Note 8 to the consolidated financial statements.FORWARD-LOOKING STATEMENTSCertain 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 the company's operations generally while others could more heavily affect a particular line of business.Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).Factors Affecting All Lines of BusinessAll of the company's businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, customer access to capital, and overall demand for our products; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the company operates; the effects of, or response to, wars and other conflicts, including the current conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic).Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial either purchased by the lessee or sold to a third party, in which case the company may record a gain or a loss for the difference between the estimated residual value and the sale price. The estimated residual values are based on several factors, including lease term, expected hours of usage, historical wholesale sales prices, return experience, intended equipment use, market dynamics and trends, and dealer residual value guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating leases for impairment when events or circumstances necessitate. Changes in residual value assumptions would affect the amount of depreciation expense and the amount of investment in equipment on operating leases. Depreciation is adjusted prospectively on a straight-line basis over the remaining lease term if residual estimates are revised. The total operating lease residual values at October 30, 2022, October 31, 2021, and November 1, 2020 were $4,640 million, $5,025 million, and $5,254 million, respectively. The decreases in 2022 and 2021 related to a lower average operating lease portfolio.Estimates used in determining end of lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. Hypothetically, if future market values for this equipment were to decrease 10 percent from the company's present estimates and all the equipment on operating leases were returned to the company for remarketing at the end of the lease term, the total effect would be to increase the company's annual depreciation for equipment on operating leases by approximately $40 million, after consideration of dealer residual value guarantees.Income TaxesThe company's income tax provision, deferred income tax assets and liabilities, and liabilities for uncertain tax benefits represent the company's best estimate of current and future income taxes to be paid. The annual tax rate is based on income tax laws, statutory tax rates, taxable income levels, and tax planning opportunities available in various jurisdictions where the company operates. These tax laws are complex, and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, regulations, statutory tax rates, and estimates of the company's future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements.Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. These assets are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities, and tax planning strategies. To the extent the company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates. either purchased by the lessee or sold to a third party, in which case the company may record a gain or a loss for the difference between the estimated residual value and the sale price. The estimated residual values are based on several factors, including lease term, expected hours of usage, historical wholesale sales prices, return experience, intended equipment use, market dynamics and trends, and dealer residual value guarantees. The company reviews residual value estimates during the lease term and tests the carrying value of its operating leases for impairment when events or circumstances necessitate. Changes in residual value assumptions would affect the amount of depreciation expense and the amount of investment in equipment on operating leases. Depreciation is adjusted prospectively on a straight-line basis over the remaining lease term if residual estimates are revised. The total operating lease residual values at October 30, 2022, October 31, 2021, and November 1, 2020 were $4,640 million, $5,025 million, and $5,254 million, respectively. The decreases in 2022 and 2021 related to a lower average operating lease portfolio. Estimates used in determining end of lease market values for equipment on operating leases significantly impact the amount and timing of depreciation expense. Hypothetically, if future market values for this equipment were to decrease 10 percent from the company's present estimates and all the equipment on operating leases were returned to the company for remarketing at the end of the lease term, the total effect would be to increase the company's annual depreciation for equipment on operating leases by approximately $40 million, after consideration of dealer residual value guarantees. **Current (2023):** The allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include: ●market, ●geography, ●credit risk, and ●remaining balance. We utilize the following loss forecast models to estimate expected credit losses:●Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. ●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools. ●Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk. The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: ●commodity prices, ●industry equipment sales, ●unemployment rates, and ●housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary.Allowance for Credit LossesThe allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia. While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:●For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses.●Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts. We utilize the following loss forecast models to estimate expected credit losses: The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. --- ## Modified: Disputes with labor unions may adversely affect our ability to operate in our facilities as well as impact our financial results. **Key changes:** - Reworded sentence: "Many of our production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates." **Prior (2022):** Many of John Deere's production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. The failure of John Deere to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. Disruptions to John Deere's manufacturing and parts-distribution facilities, through various forms of labor disputes, adversely affect the Company. On October 14, 2021, the UAW initiated a labor strike affecting more than 10,000 workers at 14 John Deere facilities across the U.S. The strike ended after a new collective bargaining agreement was approved on November 17, 2021. The UAW strike had an adverse effect on John Deere's results of operations in the first quarter of fiscal 2022 because of reduced production and shipments. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect John Deere's reputation, and could materially adversely affect the Company's business, results of operations, and financial condition. **Current (2023):** Many of our production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. Our failure to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. For example, the UAW initiated a labor strike that had an adverse effect on our results of operations in fiscal 2022 because of reduced productions and shipments. Certain of our labor agreements expire as early as 2024. Disruptions to our manufacturing and parts-distribution facilities through various forms of labor disputes could adversely affect us. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect our reputation, and could materially adversely affect our business, results of operations, and financial condition. --- ## Modified: Our global operations are subject to complex and changing laws and regulations, the violation of which could expose us to potential liabilities, increased costs, and other adverse effects. **Key changes:** - Reworded sentence: "We are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations." - Reworded sentence: "Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions." - Reworded sentence: "Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which we are, and may in the future be, involved could harm our business, financial condition, reputation, and brand." - Reworded sentence: "Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions." - Reworded sentence: "Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which we are, and may in the future be, involved could harm our business, financial condition, reputation, and brand." **Prior (2022):** John Deere's global operations are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a broad spectrum of subject areas, including advertising; anti-money laundering; antitrust; consumer finance; environmental, climate-related, health, and safety; foreign exchange controls and cash repatriation restrictions; foreign ownership and investment; import/export and trade; human rights, labor, and employment; product liability; and telematics and data privacy and connectivity. These laws may vary substantially within the different markets in which John Deere operates. Compliance with these laws and regulations is costly and may further increase the cost of conducting John Deere's global operations. In addition, John Deere must comply with the U.S. Foreign Corrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act, which generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although John Deere has a compliance program in place designed to reduce the likelihood of potential violations of such laws and regulations, there can be no assurance that John Deere's employees, contractors, or agents will not violate such laws and regulations or John Deere's policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on John Deere's reputation, business, results of operations, and financial condition. Changes to existing laws and regulations or changes to how they are interpreted or the implementation of new, more stringent laws or regulations could adversely affect John Deere's business by increasing compliance costs, limiting John Deere's ability to offer a product or service, requiring changes to John Deere's business practices, or otherwise making John Deere's products and services less attractive to customers. For example, so-called "right to repair" legislation proposals in certain states and at the federal level in the U.S. could require John Deere to provide access to the software code embedded in its products, which, among other harmful consequences, could result in product safety issues, compromise engine emissions and performance controls, adversely affect the protection of John Deere's intellectual property rights, and discourage innovation and investments in research and development. Legislative and regulatory changes and other actions that could potentially affect John Deere's business may be announced with little or no advance notice and John Deere may not be able to effectively mitigate all adverse effects from such measures. 22 22 22 Table of ContentsJohn Deere is subject to governmental laws, regulations, and other legal obligations related to privacy and data protection, and any inability or perceived inability of John Deere to address these requirements could adversely affect our business.The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. John Deere collects personal information and other data as integral parts of its business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the European Union, China, Canada, and other relevant jurisdictions where John Deere conducts business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The European Union General Data Protection Regulation, the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to the Company or Company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which John Deere is, and may in the future, be involved could harm the Company's business, financial condition, reputation, and brand. John Deere is subject to a variety of legal proceedings and legal compliance risks around the world. John Deere faces risks of exposure to various types of claims, lawsuits, and government inquires or investigations in the ordinary course of business. The uncertainty associated with substantial unresolved claims and lawsuits may harm John Deere's business, financial condition, reputation, and brand. The defense of lawsuits and government inquiries or investigations has resulted and may result in the expenditures of significant financial resources and the diversion of management's time and attention away from business operations. Such legal proceedings may also affect our assessment and estimates of loss contingencies recorded as a reserve and require us to make payments exceeding our reserves. In addition to the ordinary course of business proceedings, John Deere is currently subject to a series of antitrust class action lawsuits alleging that it is unlawfully monopolizing the market for repair services for its agricultural equipment. If these lawsuits result in adverse findings for John Deere, we could be exposed to damages and may be required to implement actions impacting our business model.GENERAL RISKSJohn Deere's reputation and brand could be damaged by negative publicity. John Deere's brand has worldwide recognition and significantly contributes to the success of its business. John Deere's reputation is critical to growing its customer base. John Deere's brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving John Deere, its products or services, its culture and values, customer data, or any of its key employees or suppliers, could damage John Deere's reputation and brand image, regardless of whether such claims are accurate. Damage to John Deere's reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. Additionally, negative or inaccurate postings, articles, or comments on social media and the internet about John Deere could generate negative publicity that could damage the reputation of the brand or John Deere. Further, adverse publicity about regulatory or legal action against John Deere, or by John Deere, could also damage the reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to John Deere's operations. If the reputation, culture or image of John Deere's brands are damaged, or John Deere receives negative publicity, then the Company's sales, financial condition, and results of operations could be materially and adversely affected. Unexpected events have and may in the future increase our cost of doing business or disrupt our operations. The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which John Deere operates, or in which John Deere suppliers are located, have and could in the future adversely affect the Company's operations and financial performance. Such events have and could cause complete or partial closure of one or more of John Deere manufacturing facilities or distribution centers, temporary or long-term disruption in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events.23 Table of Contents Table of Contents Table of Contents John Deere is subject to governmental laws, regulations, and other legal obligations related to privacy and data protection, and any inability or perceived inability of John Deere to address these requirements could adversely affect our business.The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. John Deere collects personal information and other data as integral parts of its business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the European Union, China, Canada, and other relevant jurisdictions where John Deere conducts business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The European Union General Data Protection Regulation, the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to the Company or Company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which John Deere is, and may in the future, be involved could harm the Company's business, financial condition, reputation, and brand. John Deere is subject to a variety of legal proceedings and legal compliance risks around the world. John Deere faces risks of exposure to various types of claims, lawsuits, and government inquires or investigations in the ordinary course of business. The uncertainty associated with substantial unresolved claims and lawsuits may harm John Deere's business, financial condition, reputation, and brand. The defense of lawsuits and government inquiries or investigations has resulted and may result in the expenditures of significant financial resources and the diversion of management's time and attention away from business operations. Such legal proceedings may also affect our assessment and estimates of loss contingencies recorded as a reserve and require us to make payments exceeding our reserves. In addition to the ordinary course of business proceedings, John Deere is currently subject to a series of antitrust class action lawsuits alleging that it is unlawfully monopolizing the market for repair services for its agricultural equipment. If these lawsuits result in adverse findings for John Deere, we could be exposed to damages and may be required to implement actions impacting our business model.GENERAL RISKSJohn Deere's reputation and brand could be damaged by negative publicity. John Deere's brand has worldwide recognition and significantly contributes to the success of its business. John Deere's reputation is critical to growing its customer base. John Deere's brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving John Deere, its products or services, its culture and values, customer data, or any of its key employees or suppliers, could damage John Deere's reputation and brand image, regardless of whether such claims are accurate. Damage to John Deere's reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. Additionally, negative or inaccurate postings, articles, or comments on social media and the internet about John Deere could generate negative publicity that could damage the reputation of the brand or John Deere. Further, adverse publicity about regulatory or legal action against John Deere, or by John Deere, could also damage the reputation and brand image, undermine customer confidence, and reduce long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to John Deere's operations. If the reputation, culture or image of John Deere's brands are damaged, or John Deere receives negative publicity, then the Company's sales, financial condition, and results of operations could be materially and adversely affected. Unexpected events have and may in the future increase our cost of doing business or disrupt our operations. The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which John Deere operates, or in which John Deere suppliers are located, have and could in the future adversely affect the Company's operations and financial performance. Such events have and could cause complete or partial closure of one or more of John Deere manufacturing facilities or distribution centers, temporary or long-term disruption in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events. **Current (2023):** We are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a variety of subjects, including advertising, anti-money laundering, antitrust, consumer finance, environmental, climate-related, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, import/export and trade, human rights, labor and employment, product liability reporting, cybersecurity, data privacy, telematics, and connectivity. These laws may vary substantially within the different markets in which we operate. Compliance with these laws and regulations is expensive and may further increase the cost of conducting our global operations. In addition, we must comply with the U.S. Foreign 22 22 22 Table of ContentsCorrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act. These laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although we have a compliance program in place designed to reduce the likelihood of potential violations of these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on our reputation, business, results of operations, and financial condition.Changes to existing laws and regulations, or changes to how they are interpreted, or the implementation of new, more stringent laws or regulations, could adversely affect our business by increasing compliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and services less attractive to customers. Legislative and regulatory changes, and other actions that could potentially affect our business may be announced with little or no advance notice and we may not be able to effectively mitigate all adverse effects from such measures.We are subject to governmental laws, regulations, and other legal obligations related to privacy and data protection. Any inability or perceived inability of addressing these requirements could adversely affect our business.The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. We collect personal information and other data as integral parts of our business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The EU General Data Protection Regulation (GDPR), the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which we are, and may in the future be, involved could harm our business, financial condition, reputation, and brand. We routinely are a party to claims and legal actions incidental to our business. These include claims for personal injury or property by users of our equipment, environmental, health, and safety claims, disputes with distributors, vendors and others with respect to commercial matters, and disputes with taxing and other governmental authorities regarding the conduct of our business. The defense of lawsuits and government inquiries or investigations has resulted and may result in expenditures of significant financial resources and the diversion of management's time and attention away from business operations. We are currently subject to a consolidated multidistrict class action lawsuit in the Northern District of Illinois alleging that we have engaged in attempted monopolization, exclusionary conduct, and restraint of the market for repair services for John Deere brand agricultural equipment by limiting repair resources only to our authorized technicians or independent authorized John Deere dealers. In addition, the Federal Trade Commission (FTC) is investigating whether we have violated laws in connection with the repair of John Deere brand agriculture equipment, as well as our information security practices and statements as they relate to the risk of unauthorized access to our computer systems, products, and services. We are fully cooperating with the FTC. We are currently unable to predict the outcome of these matters. The development and resolution of these matters could have a material adverse effect on our business, operations, and financial results.GENERAL RISKSOur reputation and brand could be damaged by negative publicity. Our brand has worldwide recognition and significantly contributes to the success of our business. Our reputation is critical to growing our customer base. Our brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving us, our products or services, our culture and values, our stance on environmental, social, and governance topics, customer data, or any of our key employees or suppliers, could damage our reputation and brand image, regardless of whether such claims are accurate. In addition, our stance on environmental, social, and governance topics damage to our reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. For example, we have been the subject of negative media articles relating to our customers' right to maintain and safely repair their equipment. 23 Table of Contents Table of Contents Table of Contents Corrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act. These laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although we have a compliance program in place designed to reduce the likelihood of potential violations of these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on our reputation, business, results of operations, and financial condition.Changes to existing laws and regulations, or changes to how they are interpreted, or the implementation of new, more stringent laws or regulations, could adversely affect our business by increasing compliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and services less attractive to customers. Legislative and regulatory changes, and other actions that could potentially affect our business may be announced with little or no advance notice and we may not be able to effectively mitigate all adverse effects from such measures.We are subject to governmental laws, regulations, and other legal obligations related to privacy and data protection. Any inability or perceived inability of addressing these requirements could adversely affect our business.The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. We collect personal information and other data as integral parts of our business processes and activities. This data is subject to a variety of U.S. and foreign laws and regulations, including oversight by various regulatory and other governmental bodies. Many foreign countries and governmental bodies, including the EU, China, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of personal information and other data obtained from their residents or by businesses operating within their jurisdictions. The EU General Data Protection Regulation (GDPR), the California Consumer Privacy Act, and the China Personal Information Protection Law, among others, impose stringent data protection requirements and provide significant penalties for noncompliance. New privacy laws will continue to come into effect around the world in the future. Any inability or perceived inability to adequately address privacy and data protection concerns (even if unfounded), or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us, damage our reputation, inhibit sales, and otherwise adversely affect our business.Legal proceedings and disputes in which we are, and may in the future be, involved could harm our business, financial condition, reputation, and brand. We routinely are a party to claims and legal actions incidental to our business. These include claims for personal injury or property by users of our equipment, environmental, health, and safety claims, disputes with distributors, vendors and others with respect to commercial matters, and disputes with taxing and other governmental authorities regarding the conduct of our business. The defense of lawsuits and government inquiries or investigations has resulted and may result in expenditures of significant financial resources and the diversion of management's time and attention away from business operations. We are currently subject to a consolidated multidistrict class action lawsuit in the Northern District of Illinois alleging that we have engaged in attempted monopolization, exclusionary conduct, and restraint of the market for repair services for John Deere brand agricultural equipment by limiting repair resources only to our authorized technicians or independent authorized John Deere dealers. In addition, the Federal Trade Commission (FTC) is investigating whether we have violated laws in connection with the repair of John Deere brand agriculture equipment, as well as our information security practices and statements as they relate to the risk of unauthorized access to our computer systems, products, and services. We are fully cooperating with the FTC. We are currently unable to predict the outcome of these matters. The development and resolution of these matters could have a material adverse effect on our business, operations, and financial results.GENERAL RISKSOur reputation and brand could be damaged by negative publicity. Our brand has worldwide recognition and significantly contributes to the success of our business. Our reputation is critical to growing our customer base. Our brand depends on the ability to maintain a positive customer perception of the business, including the core values of integrity, quality, innovation, and commitment. Negative claims or publicity involving us, our products or services, our culture and values, our stance on environmental, social, and governance topics, customer data, or any of our key employees or suppliers, could damage our reputation and brand image, regardless of whether such claims are accurate. In addition, our stance on environmental, social, and governance topics damage to our reputation could adversely impact the ability to attract new and maintain existing customers, employees, dealers, and business relationships. For example, we have been the subject of negative media articles relating to our customers' right to maintain and safely repair their equipment. Corrupt Practices Act and all applicable foreign anti-corruption laws, including the U.K. Bribery Act. These laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although we have a compliance program in place designed to reduce the likelihood of potential violations of these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures. Violations of these laws and regulations could result in criminal or civil sanctions and have a material adverse effect on our reputation, business, results of operations, and financial condition. Changes to existing laws and regulations, or changes to how they are interpreted, or the implementation of new, more stringent laws or regulations, could adversely affect our business by increasing compliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and services less attractive to customers. Legislative and regulatory changes, and other actions that could potentially affect our business may be announced with little or no advance notice and we may not be able to effectively mitigate all adverse effects from such measures. --- ## Modified: (thousands) **Key changes:** - Reworded sentence: "​ (millions) Jul 31 to Aug 27 682 ​ $ 424.30 681 42.3 ​ Aug 28 to Sept 24 2,204 ​ ​ 410.43 2,204 39.8 ​ Sept 25 to Oct 29 3,593 ​ 384.94 3,593 35.9 ​ Total 6,479 ​ ​ ​ 6,478 ​ ​ ​ ​ ​ STOCK PERFORMANCE GRAPH The graph compares the total shareholder returns (TSR) of Deere & Company, the Standard & Poor's (S&P) 500 Construction Machinery & Heavy Transportation Equipment Index, the S&P 500 Industrials, and the S&P 500 Stock Index over a five-year period." - Reworded sentence: "We are exposed to a variety of market risks, including interest rates and currency exchange rates." **Prior (2022):** ​ (millions) Aug 1 to Aug 28 996 ​ $ 354.90 996 7.5 ​ Aug 29 to Sept 25 888 ​ ​ 366.56 888 6.7 ​ Sept 26 to Oct 30 1,242 ​ 355.43 1,242 5.6 ​ Total 3,126 ​ ​ ​ 3,126 ​ ​ ​ ​ ITEM 6. [RESERVED] ​ ​ ​ ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. See the information under the caption "Management's Discussion and Analysis." ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The Company is exposed to a variety of market risks, including interest rates and currency exchange rates. The Company attempts to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. See the Consolidated Financial Statements and notes thereto and supplementary data. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. ITEM 9A. CONTROLS AND PROCEDURES. **Current (2023):** ​ (millions) Jul 31 to Aug 27 682 ​ $ 424.30 681 42.3 ​ Aug 28 to Sept 24 2,204 ​ ​ 410.43 2,204 39.8 ​ Sept 25 to Oct 29 3,593 ​ 384.94 3,593 35.9 ​ Total 6,479 ​ ​ ​ 6,478 ​ ​ ​ ​ ​ STOCK PERFORMANCE GRAPH The graph compares the total shareholder returns (TSR) of Deere & Company, the Standard & Poor's (S&P) 500 Construction Machinery & Heavy Transportation Equipment Index, the S&P 500 Industrials, and the S&P 500 Stock Index over a five-year period. It assumes $100 was invested on October 26, 2018 and that dividends were reinvested. Our stock price at October 27, 2023, was $361.15. Going forward, we intend to use the S&P 500 Industrials to replace the S&P 500 Construction Machinery & Heavy Transportation Equipment. We believe the S&P 500 Industrials provides a better benchmark to compare our cumulative total returns against the industry because it comprises those companies included in the S&P 500 that are classified as members of the GICS industrials sector, and therefore, have many characteristics similar to us, regardless of the specific types of products they offer. In contrast, the S&P's 500 Construction Machinery & Heavy Transportation Equipment Index is made up of only four companies (Caterpillar (CAT), Cummins (CMI), Paccar (PCAR), and Wabtec (WAB)). The stock performance shown in the graph is not intended to forecast and does not necessarily indicate future price performance. 25 25 25 Table of Contents​ITEM 6.[RESERVED]​​​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.See the information under the caption "Management's Discussion and Analysis."ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.We are exposed to a variety of market risks, including interest rates and currency exchange rates. We attempt to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.See the Consolidated Financial Statements and notes thereto and supplementary data.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.Not applicable.ITEM 9A.CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur principal executive officer and our 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 October 29, 2023, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act.Management's Report on Internal Control Over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles.26 Table of Contents Table of Contents Table of Contents ​ITEM 6.[RESERVED]​​​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.See the information under the caption "Management's Discussion and Analysis."ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.We are exposed to a variety of market risks, including interest rates and currency exchange rates. We attempt to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.See the Consolidated Financial Statements and notes thereto and supplementary data.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.Not applicable.ITEM 9A.CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur principal executive officer and our 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 October 29, 2023, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act.Management's Report on Internal Control Over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles. ​ ITEM 6. [RESERVED] ​ ​ ​ ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. See the information under the caption "Management's Discussion and Analysis." ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to a variety of market risks, including interest rates and currency exchange rates. We attempt to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. See the Consolidated Financial Statements and notes thereto and supplementary data. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. ITEM 9A. CONTROLS AND PROCEDURES. --- ## Modified: Our ability to understand our customers' preferences and requirements and to develop, manufacture, and market products that meet customer demand could significantly affect our business results. **Key changes:** - Reworded sentence: "Our ability to match new product offerings to global customers' preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success." - Reworded sentence: "We utilize automation and machine learning and intelligence in some of our products." - Reworded sentence: "Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions." - Reworded sentence: "We utilize automation and machine learning and intelligence in some of our products." - Reworded sentence: "Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions." **Prior (2022):** John Deere's ability to match new product offerings to diverse global customers' anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to its success. This requires a thorough understanding of John Deere's existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices ahead of competitors could have a significant adverse effect on John Deere's business. Customer preferences in the markets served by John Deere could change as these markets transition to less carbon-intensive business models. Ongoing social and regulatory focus on sustainability and the impact of policies and consumer preferences on the construction, forestry, and agriculture industries mean that change is imminent. As regulations and social pressure drive change, John Deere must be proactive in monitoring trends and developing alternatives and enhancements that complement our product offerings. For example, the Company may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment. 16 16 16 Table of ContentsThe development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels, could change farmers' business models and equipment needs. If John Deere fails to properly develop or invest in new technologies to meet changing customer demands, John Deere will be at risk of losing potential sources of revenue, which could affect the Company's future financial results. The inability to accurately forecast customer demand for products and services, and to adequately manage inventory, could adversely affect our operating results.To ensure adequate inventory supply, John Deere must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for particular products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In response to recent supply chain constraints, John Deere has worked with suppliers to ensure optimum inventory levels. John Deere's ability to accurately forecast demand could be affected by many factors, including changes in customer demand for John Deere's products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, John Deere has in the past and may in the future experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies. If John Deere is unable to deliver precision technology and agricultural solutions to its customers, it could affect its business, results of operations, and financial condition. John Deere's approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. To create and maintain a competitive differentiation through precision technology solutions, John Deere needs to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for customers through the production systems. John Deere may make significant investments in research and development, connectivity solutions, data security for precision technology solutions, and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. If John Deere is not able to deliver precision technology solutions with differentiated features and functionality, customers may not adopt technology solutions, which could have a material adverse effect on the Company's reputation and business.Changes to or reallocation of radio frequency (RF) bands could disrupt or degrade the reliability of John Deere's high precision augmented Global Positioning System (GPS) or other RF technology, which could impair John Deere's ability to develop and market GPS- and RF-based technology solutions as well as significantly reduce agricultural and construction customers' profitability.John Deere's current and planned integrated agricultural business and equipment management systems, as well as its fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of John Deere's GPS-based products, which could negatively affect John Deere's ability to develop and market GPS-based technology solutions. For John Deere's agricultural customers, the inability to use high-precision augmented GPS signals or other RF signals could result in lower crop yields and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, disrupting GPS or RF applications could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability and demand for John Deere products.John Deere's ability to adapt in highly competitive markets could affect its business, results of operations, and financial condition.John Deere operates in a variety of highly competitive global and regional markets. John Deere competes worldwide with a number of other manufacturers and distributors that produce and sell similar products. In addition, John Deere's industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. John Deere competes on the basis of product performance, innovation and quality, distribution, customer service, and price. Aggressive pricing or other strategies pursued by competitors, unanticipated product or manufacturing delays, or John Deere's failure to price its products competitively could adversely affect its business, results of operations, and financial condition. John Deere relies on a network of independent dealers to manage the distribution of its products. If dealers are unsuccessful with their sales and business operations, it could have an adverse effect on overall sales and revenue. John Deere relies on the capability of its dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that the dealers purchase from John Deere. If John Deere's dealers are not 17 Table of Contents Table of Contents Table of Contents The development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels, could change farmers' business models and equipment needs. If John Deere fails to properly develop or invest in new technologies to meet changing customer demands, John Deere will be at risk of losing potential sources of revenue, which could affect the Company's future financial results. The inability to accurately forecast customer demand for products and services, and to adequately manage inventory, could adversely affect our operating results.To ensure adequate inventory supply, John Deere must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for particular products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In response to recent supply chain constraints, John Deere has worked with suppliers to ensure optimum inventory levels. John Deere's ability to accurately forecast demand could be affected by many factors, including changes in customer demand for John Deere's products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, John Deere has in the past and may in the future experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies. If John Deere is unable to deliver precision technology and agricultural solutions to its customers, it could affect its business, results of operations, and financial condition. John Deere's approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. To create and maintain a competitive differentiation through precision technology solutions, John Deere needs to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for customers through the production systems. John Deere may make significant investments in research and development, connectivity solutions, data security for precision technology solutions, and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. If John Deere is not able to deliver precision technology solutions with differentiated features and functionality, customers may not adopt technology solutions, which could have a material adverse effect on the Company's reputation and business.Changes to or reallocation of radio frequency (RF) bands could disrupt or degrade the reliability of John Deere's high precision augmented Global Positioning System (GPS) or other RF technology, which could impair John Deere's ability to develop and market GPS- and RF-based technology solutions as well as significantly reduce agricultural and construction customers' profitability.John Deere's current and planned integrated agricultural business and equipment management systems, as well as its fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of John Deere's GPS-based products, which could negatively affect John Deere's ability to develop and market GPS-based technology solutions. For John Deere's agricultural customers, the inability to use high-precision augmented GPS signals or other RF signals could result in lower crop yields and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, disrupting GPS or RF applications could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability and demand for John Deere products.John Deere's ability to adapt in highly competitive markets could affect its business, results of operations, and financial condition.John Deere operates in a variety of highly competitive global and regional markets. John Deere competes worldwide with a number of other manufacturers and distributors that produce and sell similar products. In addition, John Deere's industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. John Deere competes on the basis of product performance, innovation and quality, distribution, customer service, and price. Aggressive pricing or other strategies pursued by competitors, unanticipated product or manufacturing delays, or John Deere's failure to price its products competitively could adversely affect its business, results of operations, and financial condition. John Deere relies on a network of independent dealers to manage the distribution of its products. If dealers are unsuccessful with their sales and business operations, it could have an adverse effect on overall sales and revenue. John Deere relies on the capability of its dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that the dealers purchase from John Deere. If John Deere's dealers are not The development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels, could change farmers' business models and equipment needs. If John Deere fails to properly develop or invest in new technologies to meet changing customer demands, John Deere will be at risk of losing potential sources of revenue, which could affect the Company's future financial results. **Current (2023):** Our ability to match new product offerings to global customers' preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success. This requires a thorough understanding of our existing and potential customers on a global basis, particularly in growth markets such as Argentina, Brazil, and India. Failure to deliver quality products that meet customer needs at competitive prices could have an adverse effect on our business. In addition, customer preferences in the markets we serve are changing as a result of ongoing social and regulatory focus on sustainability as these markets transition to less carbon-intensive business models. As regulations and social pressure drive change, we must continue to proactively monitor trends and develop alternatives and enhancements that elevate and complement our product offerings. For example, even though we plan to offer electric, hybrid-electric, and battery electric equipment solutions, we may be unable to keep up with the rising demand for electric agriculture, turf, and construction equipment. 16 16 16 Table of ContentsThe development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels are changing farmers' business models and equipment needs. If we fail to continue to develop or invest in emerging technologies to meet changing customer demands, we will be at risk of losing potential sources of revenue, which could affect our future financial results. If we are unable to deliver precision technology and agricultural solutions to our customers, it could affect our business, results of operations, and financial condition. Our approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. Customers continue to adopt technology integrated in our portfolio of "smart" machines, systems, and solutions. We expect this trend to persist for the foreseeable future. To create and maintain a competitive differentiation, we need to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for our customers. We may make significant investments in research and development, connectivity solutions, digital security for precision technology solutions, and dealer and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. We utilize automation and machine learning and intelligence in some of our products. While the use of these emerging technologies can present significant benefits, it also creates risks and challenges. Data sourcing, technology, integration and process issues, program bias into decision-making algorithms, security problems, and the protection of privacy could impair the adoption and acceptance of autonomous machine solutions. If the output from these solutions is deemed to be inaccurate or questionable, our brand and reputation may be harmed and we may be subject to legal liability claims. Automation and machine learning and intelligence may also become the subject of local, state, federal, and foreign regulatory efforts limiting the features and capabilities of the technology. If we are not able to deliver precision technology solutions with differentiated features and functionality, or these solutions are not effective, customers may not adopt technology solutions, which could have a material adverse effect on our reputation and business.We could be impacted by changes to or reallocation of radio frequency (RF) bands which could disrupt or degrade the reliability of our high precision augmented Global Positioning System (GPS) or other RF technology, which could impair our ability to develop and market GPS- and RF-based technology solutions, as well as significantly reduce agricultural and construction customers' profitability.Our current and planned integrated agricultural business and equipment management systems, as well as our fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions. In addition, disruptions with GPS signals or the failure of telecommunications network operators to supply the bandwidth we need to support our products could interfere with the speed, availability, and usability of our equipment and services. If these GPS signals or RF signals become unavailable, our customers could be unable to use their equipment indefinitely. For our agricultural customers, this could result in lower crop yields, decreased operational efficiency, and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, this could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability, sustainability, and demand for our products. As a result, our sales and revenue could significantly decrease, which would have a material adverse effect on our results of operations and our business.Our ability to adapt in highly competitive markets could affect our business, results of operations, and financial condition.We compete in a variety of highly competitive global and regional markets with other manufacturers and distributors that produce and sell similar products. In addition, our industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. We compete on product performance, innovation and quality, distribution, sustainability, customer service, and price. Aggressive pricing or other strategies of competitors, unanticipated product or manufacturing delays, or our failure to price products competitively could adversely affect our business, results of operations, and financial condition.We rely on a network of independent dealers to manage the distribution of our products and services. If dealers are unsuccessful with their sales and business operations, it could have an adverse effect on our overall sales and revenue. We rely on the capability of our dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that dealers purchase from us. If our dealers are unsuccessful in these endeavors, we will be unable to grow our sales and revenue, which would have an adverse effect on our financial condition. 17 Table of Contents Table of Contents Table of Contents The development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels are changing farmers' business models and equipment needs. If we fail to continue to develop or invest in emerging technologies to meet changing customer demands, we will be at risk of losing potential sources of revenue, which could affect our future financial results. If we are unable to deliver precision technology and agricultural solutions to our customers, it could affect our business, results of operations, and financial condition. Our approach to precision technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, and autonomy. Customers continue to adopt technology integrated in our portfolio of "smart" machines, systems, and solutions. We expect this trend to persist for the foreseeable future. To create and maintain a competitive differentiation, we need to successfully develop and introduce new precision technology solutions that improve profitability and sustainability for our customers. We may make significant investments in research and development, connectivity solutions, digital security for precision technology solutions, and dealer and employee training. These investments may not produce solutions that provide the desired results for customers' profitability or sustainability outcomes. We utilize automation and machine learning and intelligence in some of our products. While the use of these emerging technologies can present significant benefits, it also creates risks and challenges. Data sourcing, technology, integration and process issues, program bias into decision-making algorithms, security problems, and the protection of privacy could impair the adoption and acceptance of autonomous machine solutions. If the output from these solutions is deemed to be inaccurate or questionable, our brand and reputation may be harmed and we may be subject to legal liability claims. Automation and machine learning and intelligence may also become the subject of local, state, federal, and foreign regulatory efforts limiting the features and capabilities of the technology. If we are not able to deliver precision technology solutions with differentiated features and functionality, or these solutions are not effective, customers may not adopt technology solutions, which could have a material adverse effect on our reputation and business.We could be impacted by changes to or reallocation of radio frequency (RF) bands which could disrupt or degrade the reliability of our high precision augmented Global Positioning System (GPS) or other RF technology, which could impair our ability to develop and market GPS- and RF-based technology solutions, as well as significantly reduce agricultural and construction customers' profitability.Our current and planned integrated agricultural business and equipment management systems, as well as our fleet management telematics solutions for construction equipment, depend upon the use of RF signals. These signals include, but are not limited to, GPS signals, other GPS-like satellite signals, augmented GPS services, and other RF technologies that link equipment, operations, owners, dealers, and technicians. These radio services depend on frequency allocations governed by international and national government agencies. Any international or national reallocation of frequency bands, including frequency bands segmentation and band spectrum sharing, or other modifications concerning the regulation of frequency bands, could significantly disrupt or degrade the utility and reliability of our GPS-based products, which could negatively affect our ability to develop and market GPS-based technology solutions. In addition, disruptions with GPS signals or the failure of telecommunications network operators to supply the bandwidth we need to support our products could interfere with the speed, availability, and usability of our equipment and services. If these GPS signals or RF signals become unavailable, our customers could be unable to use their equipment indefinitely. For our agricultural customers, this could result in lower crop yields, decreased operational efficiency, and higher equipment maintenance, seed, fertilizer, fuel, and wage costs. For construction customers, this could result in higher fuel and equipment maintenance costs, as well as lower construction design and project management efficiencies. These cost increases could significantly reduce customers' profitability, sustainability, and demand for our products. As a result, our sales and revenue could significantly decrease, which would have a material adverse effect on our results of operations and our business.Our ability to adapt in highly competitive markets could affect our business, results of operations, and financial condition.We compete in a variety of highly competitive global and regional markets with other manufacturers and distributors that produce and sell similar products. In addition, our industry is attracting non-traditional competitors, including technology-focused companies and start-up ventures. We compete on product performance, innovation and quality, distribution, sustainability, customer service, and price. Aggressive pricing or other strategies of competitors, unanticipated product or manufacturing delays, or our failure to price products competitively could adversely affect our business, results of operations, and financial condition.We rely on a network of independent dealers to manage the distribution of our products and services. If dealers are unsuccessful with their sales and business operations, it could have an adverse effect on our overall sales and revenue. We rely on the capability of our dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services that dealers purchase from us. If our dealers are unsuccessful in these endeavors, we will be unable to grow our sales and revenue, which would have an adverse effect on our financial condition. The development of alternative farming techniques, carbon sequestration technologies, and new low-carbon biofuels are changing farmers' business models and equipment needs. If we fail to continue to develop or invest in emerging technologies to meet changing customer demands, we will be at risk of losing potential sources of revenue, which could affect our future financial results. --- ## Modified: For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021 **Key changes:** - Reworded sentence: "​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​" **Prior (2022):** ​ ​ ​ (In millions of dollars) Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ **Current (2023):** ​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ --- ## Modified: For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021 **Key changes:** - Reworded sentence: "​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​" **Prior (2022):** ​ ​ ​ (In millions of dollars) Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ **Current (2023):** ​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ --- ## Modified: Cash Flows from Investing Activities **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collections of receivables (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24,128 ​ ​ 22,400 ​ ​ 20,527 ​ ​ (1,077) ​ ​ (1,493) ​ ​ (1,568) ​ ​ 23,051 ​ ​ 20,907 ​ ​ 18,959 ​ 15​ ​ Proceeds from sales of equipment on operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,981 ​ ​ 2,093 ​ ​ 2,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,981 ​ ​ 2,093 ​ ​ 2,094 ​ ​ ​ Cost of receivables acquired (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (29,229) ​ ​ (26,903) ​ ​ (25,305) ​ ​ 457 ​ ​ 603 ​ ​ 1,652 ​ ​ (28,772) ​ ​ (26,300) ​ ​ (23,653) ​ 15​ ​ Acquisitions of businesses, net of cash acquired ​ ​ (82) ​ ​ (498) ​ ​ (244) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (82) ​ ​ (498) ​ ​ (244) ​ ​ ​ Purchases of property and equipment ​ ​ (1,494) ​ ​ (1,131) ​ ​ (845) ​ ​ (4) ​ ​ (3) ​ ​ (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,498) ​ ​ (1,134) ​ ​ (848) ​ ​ ​ Cost of equipment on operating leases acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,234) ​ ​ (2,879) ​ ​ (2,627) ​ ​ 264 ​ ​ 225 ​ ​ 895 ​ ​ (2,970) ​ ​ (2,654) ​ ​ (1,732) ​ 16​ ​ Increase (decrease) in investment in Financial Services ​ ​ (870) ​ ​ 7 ​ ​ (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 870 ​ ​ (7) ​ ​ 8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19​ ​ Decrease (increase) in trade and wholesale receivables ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (5,783) ​ ​ (3,601) ​ ​ 1,364 ​ ​ 5,783 ​ ​ 3,601 ​ ​ (1,364) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15​ ​ Collateral on derivatives - net ​ ​ (1) ​ ​ 5 ​ ​ (7) ​ ​ (11) ​ ​ (647) ​ ​ (274) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (12) ​ ​ (642) ​ ​ (281) ​ ​ ​ Other ​ ​ (290) ​ ​ (213) ​ ​ 70 ​ ​ (160) ​ ​ (81) ​ ​ (84) ​ ​ 3 ​ ​ 37 ​ ​ (31) ​ ​ (447) ​ ​ (257) ​ ​ (45) ​ 18​ ​ Net cash used for investing activities ​ ​ (2,737) ​ ​ (1,830) ​ ​ (1,034) ​ ​ (12,312) ​ ​ (9,621) ​ ​ (4,308) ​ ​ 6,300 ​ ​ 2,966 ​ ​ (408) ​ ​ (8,749) ​ ​ (8,485) ​ ​ (5,750) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collections of receivables (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 22,400 ​ ​ 20,527 ​ ​ 18,829 ​ ​ (1,493) ​ ​ (1,568) ​ ​ (1,448) ​ ​ 20,907 ​ ​ 18,959 ​ ​ 17,381 ​ 16​ ​ Proceeds from sales of equipment on operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,093 ​ ​ 2,094 ​ ​ 1,783 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,093 ​ ​ 2,094 ​ ​ 1,783 ​ ​ ​ Cost of receivables acquired (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (26,903) ​ ​ (25,305) ​ ​ (21,360) ​ ​ 603 ​ ​ 1,652 ​ ​ 1,395 ​ ​ (26,300) ​ ​ (23,653) ​ ​ (19,965) ​ 16​ ​ Acquisitions of businesses, net of cash acquired ​ ​ (498) ​ ​ (244) ​ ​ (66) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (498) ​ ​ (244) ​ ​ (66) ​ ​ ​ Purchases of property and equipment ​ ​ (1,131) ​ ​ (845) ​ ​ (816) ​ ​ (3) ​ ​ (3) ​ ​ (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,134) ​ ​ (848) ​ ​ (820) ​ ​ ​ Cost of equipment on operating leases acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,879) ​ ​ (2,627) ​ ​ (2,666) ​ ​ 225 ​ ​ 895 ​ ​ 830 ​ ​ (2,654) ​ ​ (1,732) ​ ​ (1,836) ​ 17​ ​ Decrease (increase) in trade and wholesale receivables ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,601) ​ ​ 1,364 ​ ​ 1,999 ​ ​ 3,601 ​ ​ (1,364) ​ ​ (1,999) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 16​ ​ Collateral on derivatives - net ​ ​ 5 ​ ​ (7) ​ ​ (6) ​ ​ (647) ​ ​ (274) ​ ​ 274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (642) ​ ​ (281) ​ ​ 268 ​ ​ ​ Other ​ ​ (206) ​ ​ 62 ​ ​ (103) ​ ​ (81) ​ ​ (84) ​ ​ (71) ​ ​ 30 ​ ​ (23) ​ ​ 110 ​ ​ (257) ​ ​ (45) ​ ​ (64) ​ 15, 19​ ​ Net cash used for investing activities ​ ​ (1,830) ​ ​ (1,034) ​ ​ (991) ​ ​ (9,621) ​ ​ (4,308) ​ ​ (1,216) ​ ​ 2,966 ​ ​ (408) ​ ​ (1,112) ​ ​ (8,485) ​ ​ (5,750) ​ ​ (3,319) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collections of receivables (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24,128 ​ ​ 22,400 ​ ​ 20,527 ​ ​ (1,077) ​ ​ (1,493) ​ ​ (1,568) ​ ​ 23,051 ​ ​ 20,907 ​ ​ 18,959 ​ 15​ ​ Proceeds from sales of equipment on operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,981 ​ ​ 2,093 ​ ​ 2,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,981 ​ ​ 2,093 ​ ​ 2,094 ​ ​ ​ Cost of receivables acquired (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (29,229) ​ ​ (26,903) ​ ​ (25,305) ​ ​ 457 ​ ​ 603 ​ ​ 1,652 ​ ​ (28,772) ​ ​ (26,300) ​ ​ (23,653) ​ 15​ ​ Acquisitions of businesses, net of cash acquired ​ ​ (82) ​ ​ (498) ​ ​ (244) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (82) ​ ​ (498) ​ ​ (244) ​ ​ ​ Purchases of property and equipment ​ ​ (1,494) ​ ​ (1,131) ​ ​ (845) ​ ​ (4) ​ ​ (3) ​ ​ (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,498) ​ ​ (1,134) ​ ​ (848) ​ ​ ​ Cost of equipment on operating leases acquired ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,234) ​ ​ (2,879) ​ ​ (2,627) ​ ​ 264 ​ ​ 225 ​ ​ 895 ​ ​ (2,970) ​ ​ (2,654) ​ ​ (1,732) ​ 16​ ​ Increase (decrease) in investment in Financial Services ​ ​ (870) ​ ​ 7 ​ ​ (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 870 ​ ​ (7) ​ ​ 8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19​ ​ Decrease (increase) in trade and wholesale receivables ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (5,783) ​ ​ (3,601) ​ ​ 1,364 ​ ​ 5,783 ​ ​ 3,601 ​ ​ (1,364) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15​ ​ Collateral on derivatives - net ​ ​ (1) ​ ​ 5 ​ ​ (7) ​ ​ (11) ​ ​ (647) ​ ​ (274) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (12) ​ ​ (642) ​ ​ (281) ​ ​ ​ Other ​ ​ (290) ​ ​ (213) ​ ​ 70 ​ ​ (160) ​ ​ (81) ​ ​ (84) ​ ​ 3 ​ ​ 37 ​ ​ (31) ​ ​ (447) ​ ​ (257) ​ ​ (45) ​ 18​ ​ Net cash used for investing activities ​ ​ (2,737) ​ ​ (1,830) ​ ​ (1,034) ​ ​ (12,312) ​ ​ (9,621) ​ ​ (4,308) ​ ​ 6,300 ​ ​ 2,966 ​ ​ (408) ​ ​ (8,749) ​ ​ (8,485) ​ ​ (5,750) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: We may be impacted by general negative economic conditions and outlook, causing weakened demand for our equipment and services, limiting access to funding, and resulting in higher funding costs. **Key changes:** - Reworded sentence: "The demand for our products and services depends on the fundamentals in the markets in which we operate and can be significantly reduced in an economic environment characterized by high unemployment, high interest rates, cautious consumer spending, inflation, lower corporate earnings, and lower business investment." **Prior (2022):** The demand for John Deere's products and services can be significantly reduced in an economic environment characterized by high unemployment, rising interest rates, cautious consumer spending, changes in consumer practices due to a possible recession, lower corporate earnings, and lower business investment. Negative or uncertain economic conditions that cause John Deere's customers to lack confidence in the general economic outlook can significantly reduce their likelihood of purchasing John Deere's equipment. The COVID pandemic, geopolitical instability, including the conflict between Russia and Ukraine, and other global events have significantly increased economic and demand uncertainty. Some of the results of these events include supply chain challenges, inflation, high interest rates, foreign currency exchange volatility, and volatility in global capital markets. Supply chain challenges, including delays caused by shortages of raw materials, shipping containers and labor, have increased production costs and reduced our profit margins. Additionally, the cost of raw materials used in John Deere's products and the cost of freight have increased due to heightened inflation. These adverse economic events have and may continue to adversely affect John Deere's operations. Sustained negative economic conditions and outlook also affect housing starts, energy prices and demand, and other construction, which dampens demand for certain construction equipment. John Deere's turf operations and its construction and forestry segments are dependent on construction activity and have also been affected by recent adverse economic conditions. In fiscal 2022, supply constraints, shortage of turf inventory, and softening customer demand have affected our production and sales of consumer products within these segments. Decreases in construction activity and housing starts could have a material adverse effect on John Deere's results of operations. If negative economic conditions affect the overall farm economy, there could be a similar effect on John Deere's agricultural equipment sales. In addition, uncertain or negative outlook with respect to pervasive U.S. fiscal issues as well as general economic conditions and outlook, such as market volatility and continued interest rate increases by the Federal Reserve, have caused and could continue to cause significant changes in market liquidity conditions. Such changes could impact access to funding and associated funding costs, which could reduce the Company's earnings and cash flows. Additionally, the Company's investment management activities could be adversely affected by changes in the equity and bond markets, including the recent volatility of the United Kingdom's bond market, which would negatively affect earnings. **Current (2023):** The demand for our products and services depends on the fundamentals in the markets in which we operate and can be significantly reduced in an economic environment characterized by high unemployment, high interest rates, cautious consumer spending, inflation, lower corporate earnings, and lower business investment. Negative or uncertain economic conditions that cause our customers to lack confidence in the general economic outlook can significantly reduce their likelihood of purchasing our equipment. These economic events adversely affected and may continue to adversely affect our operations. Sustained general negative economic conditions and outlook also affect housing starts, energy prices and demand, and other construction, which dampens demand for certain construction equipment. Our turf operations and our construction and forestry segments are dependent on construction activity and have also been affected by recent adverse economic conditions. Decreases in construction activity and housing starts could have a material adverse effect on our financial results. If negative economic conditions affect the overall farm economy, there could be a similar effect on our agricultural equipment sales. Uncertain or negative outlook with respect to pervasive U.S. fiscal issues as well as general economic conditions and outlook, such as market volatility and continuing interest rate increases by the Federal Reserve, have caused and could continue to cause significant changes in market liquidity conditions. Such changes could impact access to funding and associated funding costs, which could reduce our earnings and cash flows. --- ## Modified: We may sustain increases in funding obligations under our pension plans which may impair our liquidity or financial condition. **Key changes:** - Reworded sentence: "We maintain certain defined benefit pension plans for certain employees, which impose funding obligations." - Reworded sentence: "Regulatory changes could cause a deterioration in the statutory funded status of our plans." **Prior (2022):** The Company maintains certain defined benefit pension plans for certain employees, which impose funding obligations. The Company uses many assumptions in calculating its future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. The Company may be required to make significant contributions to its pension plans in the future. These factors could significantly increase the Company's payment obligations under the plans and adversely affect its business, results of operations, and financial condition. **Current (2023):** We maintain certain defined benefit pension plans for certain employees, which impose funding obligations. We use various assumptions in calculating our future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. Regulatory changes could cause a deterioration in the statutory funded status of our plans. We may be required to make significant contributions to our pension plans in the future. These factors could significantly increase our payment obligations under the plans and adversely affect our business, results of operations, and financial condition. --- ## Modified: Unfavorable weather conditions or natural catastrophes that reduce agricultural production and demand for agriculture and turf equipment could directly and indirectly affect our business. **Key changes:** - Reworded sentence: "The purchasing decisions of our customers, particularly the purchasers of agriculture and turf equipment, can be significantly affected by poor or unusual weather conditions." **Prior (2022):** Poor or unusual weather conditions, particularly during the planting and early growing season, can significantly affect the purchasing decisions of John Deere's customers, particularly the purchasers of agriculture and turf equipment. The timing and quantity of rainfall are two of the most important factors in agricultural production. Insufficient levels of rain prevent farmers from planting new crops and may cause growing crops to die or result in lower yields. Excessive rain or flooding can prevent planting from occurring at optimal times and may cause crop loss through increased disease or mold growth. Temperature affects the rate of growth, maturity, and quality of crops. Temperatures outside normal ranges can also cause crop failure or decreased yields and may also affect disease incidence. Natural calamities such as regional floods, hurricanes or other storms, droughts, diseases, and pests, either as a physical effect of climate change or otherwise, have had and could in the future have significant negative effects on agricultural and livestock production. The resulting negative impact on farm income can strongly affect demand for agricultural equipment and the financial condition and credit risk of John Deere's dealers and customers. Adverse weather conditions in a particular geographic region, particularly during the important spring selling season, may adversely affect sales of some turf equipment. Drought conditions can adversely affect sales of certain mowing equipment and unusually rainy weather can similarly cause lower sales volumes. **Current (2023):** The purchasing decisions of our customers, particularly the purchasers of agriculture and turf equipment, can be significantly affected by poor or unusual weather conditions. Such conditions include: Each of these conditions could have a negative impact on farm income which can affect demand for agricultural equipment and the financial condition and credit risk of our dealers and customers. --- ## Modified: Cash Flows from Operating Activities **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 9,536 ​ $ 6,250 ​ $ 5,084 ​ $ 619 ​ $ 880 ​ $ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 10,155 ​ $ 7,130 ​ $ 5,965 ​ ​ ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (credit) for credit losses ​ ​ 7 ​ ​ 3 ​ ​ 7 ​ ​ (23) ​ ​ 189 ​ ​ (13) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (16) ​ ​ 192 ​ ​ (6) ​ ​ ​ Provision for depreciation and amortization ​ ​ 1,123 ​ ​ 1,041 ​ ​ 1,043 ​ ​ 1,016 ​ ​ 1,050 ​ ​ 1,140 ​ $ (135) ​ $ (196) ​ $ (133) ​ ​ 2,004 ​ ​ 1,895 ​ ​ 2,050 ​ 12​ ​ Impairments and other adjustments ​ ​ 18 ​ ​ 88 ​ ​ 50 ​ ​ 173 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 191 ​ ​ 88 ​ ​ 50 ​ ​ ​ Share-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 130 ​ ​ 85 ​ ​ 82 ​ ​ 130 ​ ​ 85 ​ ​ 82 ​ 13​ ​ Gain on remeasurement of previously held equity investment ​ ​ ​ ​ ​ (326) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (326) ​ ​ ​ ​ ​ ​ Distributed earnings of Financial Services ​ ​ 215 ​ ​ 444 ​ ​ 555 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (215) ​ ​ (444) ​ ​ (555) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 14​ ​ Provision (credit) for deferred income taxes ​ ​ (959) ​ ​ 8 ​ ​ (369) ​ ​ 169 ​ ​ (74) ​ ​ (72) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (790) ​ ​ (66) ​ ​ (441) ​ ​ ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Receivables related to sales ​ ​ (58) ​ ​ (189) ​ ​ (105) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4,195) ​ ​ (2,294) ​ ​ 1,074 ​ ​ (4,253) ​ ​ (2,483) ​ ​ 969 ​ 15, 17, 18​ ​ Inventories ​ ​ 474 ​ ​ (1,924) ​ ​ (1,835) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (195) ​ ​ (167) ​ ​ (662) ​ ​ 279 ​ ​ (2,091) ​ ​ (2,497) ​ 16​ ​ Accounts payable and accrued expenses ​ ​ 1,352 ​ ​ 1,444 ​ ​ 1,589 ​ ​ 449 ​ ​ 143 ​ ​ 57 ​ ​ (971) ​ ​ (454) ​ ​ 238 ​ ​ 830 ​ ​ 1,133 ​ ​ 1,884 ​ 17​ ​ Accrued income taxes payable/receivable ​ ​ 8 ​ ​ 166 ​ ​ 13 ​ ​ (31) ​ ​ (25) ​ ​ (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (23) ​ ​ 141 ​ ​ 11 ​ ​ ​ Retirement benefits ​ ​ (164) ​ ​ (1,016) ​ ​ 30 ​ ​ (6) ​ ​ 1 ​ ​ (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (170) ​ ​ (1,015) ​ ​ 29 ​ ​ ​ Other ​ ​ 367 ​ ​ 250 ​ ​ (162) ​ ​ (51) ​ ​ (287) ​ ​ (25) ​ ​ (64) ​ ​ 53 ​ ​ (183) ​ ​ 252 ​ ​ 16 ​ ​ (370) ​ 12, 13, 16​ ​ Net cash provided by operating activities ​ ​ 11,919 ​ ​ 6,239 ​ ​ 5,900 ​ ​ 2,315 ​ ​ 1,877 ​ ​ 1,965 ​ ​ (5,645) ​ ​ (3,417) ​ ​ (139) ​ ​ 8,589 ​ ​ 4,699 ​ ​ 7,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 6,250 ​ $ 5,084 ​ $ 2,187 ​ $ 880 ​ $ 881 ​ $ 566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,130 ​ $ 5,965 ​ $ 2,753 ​ ​ ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (credit) for credit losses ​ ​ 3 ​ ​ 7 ​ ​ 5 ​ ​ 189 ​ ​ (13) ​ ​ 105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 192 ​ ​ (6) ​ ​ 110 ​ ​ ​ Provision for depreciation and amortization ​ ​ 1,041 ​ ​ 1,043 ​ ​ 1,016 ​ ​ 1,050 ​ ​ 1,140 ​ ​ 1,227 ​ $ (196) ​ $ (133) ​ $ (125) ​ ​ 1,895 ​ ​ 2,050 ​ ​ 2,118 ​ 13​ ​ Impairment charges ​ ​ 88 ​ ​ 50 ​ ​ 162 ​ ​ ​ ​ ​ ​ ​ ​ 32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 88 ​ ​ 50 ​ ​ 194 ​ ​ ​ Share-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 85 ​ ​ 82 ​ ​ 81 ​ ​ 85 ​ ​ 82 ​ ​ 81 ​ 14​ ​ Loss on sale of businesses and unconsolidated affiliates ​ ​ ​ ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24 ​ ​ ​ Gain on remeasurement of previously held equity investment ​ ​ (326) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (326) ​ ​ ​ ​ ​ ​ ​ ​ ​ Undistributed earnings of Financial Services ​ ​ 444 ​ ​ 555 ​ ​ 386 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (444) ​ ​ (555) ​ ​ (386) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15​ ​ Provision (credit) for deferred income taxes ​ ​ 8 ​ ​ (369) ​ ​ 105 ​ ​ (74) ​ ​ (72) ​ ​ (116) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (66) ​ ​ (441) ​ ​ (11) ​ ​ ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade, notes, and financing receivables related to sales ​ ​ (189) ​ ​ (105) ​ ​ 373 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2,294) ​ ​ 1,074 ​ ​ 1,636 ​ ​ (2,483) ​ ​ 969 ​ ​ 2,009 ​ 16, 18, 19​ ​ Inventories ​ ​ (1,924) ​ ​ (1,835) ​ ​ 1,011 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (167) ​ ​ (662) ​ ​ (614) ​ ​ (2,091) ​ ​ (2,497) ​ ​ 397 ​ 17​ ​ Accounts payable and accrued expenses ​ ​ 1,444 ​ ​ 1,589 ​ ​ (331) ​ ​ 143 ​ ​ 57 ​ ​ (1) ​ ​ (454) ​ ​ 238 ​ ​ 325 ​ ​ 1,133 ​ ​ 1,884 ​ ​ (7) ​ 18​ ​ Accrued income taxes payable/receivable ​ ​ 166 ​ ​ 13 ​ ​ (14) ​ ​ (25) ​ ​ (2) ​ ​ 22 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 141 ​ ​ 11 ​ ​ 8 ​ ​ ​ Retirement benefits ​ ​ (1,016) ​ ​ 30 ​ ​ (544) ​ ​ 1 ​ ​ (1) ​ ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,015) ​ ​ 29 ​ ​ (537) ​ ​ ​ Other ​ ​ 250 ​ ​ (162) ​ ​ 380 ​ ​ (287) ​ ​ (25) ​ ​ 134 ​ ​ 53 ​ ​ (183) ​ ​ (170) ​ ​ 16 ​ ​ (370) ​ ​ 344 ​ 13, 14, 17​ ​ Net cash provided by operating activities ​ ​ 6,239 ​ ​ 5,900 ​ ​ 4,760 ​ ​ 1,877 ​ ​ 1,965 ​ ​ 1,976 ​ ​ (3,417) ​ ​ (139) ​ ​ 747 ​ ​ 4,699 ​ ​ 7,726 ​ ​ 7,483 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 9,536 ​ $ 6,250 ​ $ 5,084 ​ $ 619 ​ $ 880 ​ $ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 10,155 ​ $ 7,130 ​ $ 5,965 ​ ​ ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (credit) for credit losses ​ ​ 7 ​ ​ 3 ​ ​ 7 ​ ​ (23) ​ ​ 189 ​ ​ (13) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (16) ​ ​ 192 ​ ​ (6) ​ ​ ​ Provision for depreciation and amortization ​ ​ 1,123 ​ ​ 1,041 ​ ​ 1,043 ​ ​ 1,016 ​ ​ 1,050 ​ ​ 1,140 ​ $ (135) ​ $ (196) ​ $ (133) ​ ​ 2,004 ​ ​ 1,895 ​ ​ 2,050 ​ 12​ ​ Impairments and other adjustments ​ ​ 18 ​ ​ 88 ​ ​ 50 ​ ​ 173 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 191 ​ ​ 88 ​ ​ 50 ​ ​ ​ Share-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 130 ​ ​ 85 ​ ​ 82 ​ ​ 130 ​ ​ 85 ​ ​ 82 ​ 13​ ​ Gain on remeasurement of previously held equity investment ​ ​ ​ ​ ​ (326) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (326) ​ ​ ​ ​ ​ ​ Distributed earnings of Financial Services ​ ​ 215 ​ ​ 444 ​ ​ 555 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (215) ​ ​ (444) ​ ​ (555) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 14​ ​ Provision (credit) for deferred income taxes ​ ​ (959) ​ ​ 8 ​ ​ (369) ​ ​ 169 ​ ​ (74) ​ ​ (72) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (790) ​ ​ (66) ​ ​ (441) ​ ​ ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Receivables related to sales ​ ​ (58) ​ ​ (189) ​ ​ (105) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4,195) ​ ​ (2,294) ​ ​ 1,074 ​ ​ (4,253) ​ ​ (2,483) ​ ​ 969 ​ 15, 17, 18​ ​ Inventories ​ ​ 474 ​ ​ (1,924) ​ ​ (1,835) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (195) ​ ​ (167) ​ ​ (662) ​ ​ 279 ​ ​ (2,091) ​ ​ (2,497) ​ 16​ ​ Accounts payable and accrued expenses ​ ​ 1,352 ​ ​ 1,444 ​ ​ 1,589 ​ ​ 449 ​ ​ 143 ​ ​ 57 ​ ​ (971) ​ ​ (454) ​ ​ 238 ​ ​ 830 ​ ​ 1,133 ​ ​ 1,884 ​ 17​ ​ Accrued income taxes payable/receivable ​ ​ 8 ​ ​ 166 ​ ​ 13 ​ ​ (31) ​ ​ (25) ​ ​ (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (23) ​ ​ 141 ​ ​ 11 ​ ​ ​ Retirement benefits ​ ​ (164) ​ ​ (1,016) ​ ​ 30 ​ ​ (6) ​ ​ 1 ​ ​ (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (170) ​ ​ (1,015) ​ ​ 29 ​ ​ ​ Other ​ ​ 367 ​ ​ 250 ​ ​ (162) ​ ​ (51) ​ ​ (287) ​ ​ (25) ​ ​ (64) ​ ​ 53 ​ ​ (183) ​ ​ 252 ​ ​ 16 ​ ​ (370) ​ 12, 13, 16​ ​ Net cash provided by operating activities ​ ​ 11,919 ​ ​ 6,239 ​ ​ 5,900 ​ ​ 2,315 ​ ​ 1,877 ​ ​ 1,965 ​ ​ (5,645) ​ ​ (3,417) ​ ​ (139) ​ ​ 8,589 ​ ​ 4,699 ​ ​ 7,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: 2024 and Beyond **Key changes:** - Reworded sentence: "Our material cash requirements include the following: Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion." - Reworded sentence: "These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024." - Reworded sentence: "Other Cash Requirements - In addition to our contractual obligations, we have the following commitments: Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met." **Prior (2022):** The company's material cash requirements include the following: Borrowings - As of October 30, 2022, the company had $15,274 million of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $1,460 million. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2023. Purchase Obligations - As of October 30, 2022, the company's outstanding purchase obligations were $4,701 million, with $4,121 million payable within one year. These purchase obligations are noncancelable. Other Cash Requirements - In addition to its contractual obligations, the company's quarterly cash dividend is $1.20 per share, subject to change at the discretion of the company's Board of Directors. Total company pension and OPEB contributions in 2023 are expected to be approximately $200 million. The company also plans capital expenditures of $1,400 million in 2023. The company will consider share repurchases as a means of deploying excess cash to shareholders once the previously mentioned requirements are met. CRITICAL ACCOUNTING ESTIMATESThe preparation of the company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. The accounting policies below are those management believes are the most critical to the preparation of the company's financial statements and require the most difficult, subjective, or complex judgments. The company's other accounting policies are described in the Notes to the Consolidated Financial Statements.Sales IncentivesThe company provides sales incentives to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction to the sales price. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. This is due to numerous programs available at any particular time and new programs that may be announced after the company records the equipment sale. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."The sales incentive accruals at October 30, 2022, October 31, 2021, and November 1, 2020 were $2,364 million, $1,680 million, and $1,718 million, respectively. The total accruals recorded were $1,320 million, $880 million, and $1,109 million in trade accounts and notes receivable - net, and $1,044 million, $800 million, and $609 million in accounts payable and accrued expenses at October 30, 2022, October 31, 2021, and November 1, 2020, respectively. The accruals recorded against receivables relate to programs where the company has the contractual right and the intent to offset against existing receivables. The increase in each of 2022 and 2021 primarily resulted from higher retail demand. Additional factors in 2022 were higher incentives expected to be paid for dealer market share and incentives provided to offset elevated interest rates. The estimation of the retail sales incentive accrual is impacted by many assumptions. One of the key assumptions is the predictive value of the historical percent of retail sales incentive costs to retail sales from dealers. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .8 percent, compared to the average retail sales incentive costs to retail sales percent during that period. Holding other assumptions constant, if this estimated retail incentive cost experience percent would have increased or decreased .8 percent, the sales incentive accrual at October 30, 2022 would have increased or decreased by approximately $74 million. **Current (2023):** Our material cash requirements include the following: Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024. Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable. Other Cash Requirements - In addition to our contractual obligations, we have the following commitments: Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met. ​ ​ ​ ​ ​ ​ 34 34 34 Table of Contents​CRITICAL ACCOUNTING ESTIMATES​​The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements: ●sales incentives,●product warranties,●postretirement benefit obligations,●allowance for credit losses,●operating lease residual values, and●income taxes. These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.Sales IncentivesWe provide sales incentives to dealers. These incentives are offered in two forms:●volume bonuses - awarded based on a dealer's sales volume and performance, and●retail sales incentive programs - discounts or financing programs that are due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on:●historical data, ●announced and expected incentive programs, ●field inventory levels, and ●forecasted sales volumes. At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale. There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."Sales Incentive AccrualsThe accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in 2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates. A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105.Product WarrantiesA standard warranty is provided as an assurance that our 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 the following calculation:●historical claims rate experience - multiplied by -●the estimated population. The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments. Product Warranty AccrualsThe increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate. Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. During this time, the percent has varied plus or minus .12 percent. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased .12 percent, the warranty accrual at October 29, 2023 would have changed by approximately $81.Postretirement Benefit ObligationsThe pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). The key assumptions used by our actuaries to calculate the estimates include:●discount rates, ●health care cost trend rates, ●expected long-term return on plan assets, ●compensation increases, 35 Table of Contents​ Table of Contents Table of Contents ​ CRITICAL ACCOUNTING ESTIMATES​​The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements: ●sales incentives,●product warranties,●postretirement benefit obligations,●allowance for credit losses,●operating lease residual values, and●income taxes. These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.Sales IncentivesWe provide sales incentives to dealers. These incentives are offered in two forms:●volume bonuses - awarded based on a dealer's sales volume and performance, and●retail sales incentive programs - discounts or financing programs that are due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on:●historical data, ●announced and expected incentive programs, ●field inventory levels, and ●forecasted sales volumes. At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale. There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."Sales Incentive AccrualsThe accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in 2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates. A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105.Product WarrantiesA standard warranty is provided as an assurance that our 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 the following calculation:●historical claims rate experience - multiplied by -●the estimated population. The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments. Product Warranty AccrualsThe increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate. Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. During this time, the percent has varied plus or minus .12 percent. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased .12 percent, the warranty accrual at October 29, 2023 would have changed by approximately $81.Postretirement Benefit ObligationsThe pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). The key assumptions used by our actuaries to calculate the estimates include:●discount rates, ●health care cost trend rates, ●expected long-term return on plan assets, ●compensation increases, CRITICAL ACCOUNTING ESTIMATES​​The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements: ●sales incentives,●product warranties,●postretirement benefit obligations,●allowance for credit losses,●operating lease residual values, and●income taxes. These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.Sales IncentivesWe provide sales incentives to dealers. These incentives are offered in two forms:●volume bonuses - awarded based on a dealer's sales volume and performance, and●retail sales incentive programs - discounts or financing programs that are due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on:●historical data, ●announced and expected incentive programs, ●field inventory levels, and ●forecasted sales volumes. At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale. There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."Sales Incentive AccrualsThe accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in 2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates. A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105.Product WarrantiesA standard warranty is provided as an assurance that our 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 the following calculation:●historical claims rate experience - multiplied by -●the estimated population. The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments. Product Warranty AccrualsThe increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate. Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. During this time, the percent has varied plus or minus .12 percent. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased .12 percent, the warranty accrual at October 29, 2023 would have changed by approximately $81.Postretirement Benefit ObligationsThe pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). The key assumptions used by our actuaries to calculate the estimates include:●discount rates, ●health care cost trend rates, ●expected long-term return on plan assets, ●compensation increases, CRITICAL ACCOUNTING ESTIMATES​​The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements: ●sales incentives,●product warranties,●postretirement benefit obligations,●allowance for credit losses,●operating lease residual values, and●income taxes. These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.Sales IncentivesWe provide sales incentives to dealers. These incentives are offered in two forms:●volume bonuses - awarded based on a dealer's sales volume and performance, and●retail sales incentive programs - discounts or financing programs that are due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on:●historical data, ●announced and expected incentive programs, ●field inventory levels, and ●forecasted sales volumes. At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale. There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."Sales Incentive AccrualsThe accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in --- ## Modified: As of October 29, 2023 and October 30, 2022 **Key changes:** - Reworded sentence: "​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​" **Prior (2022):** ​ ​ ​ (In millions of dollars) Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ **Current (2023):** ​ ​ ​ Unaudited ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ --- ## Modified: Unexpected events have increased and may in the future increase our cost of doing business or disrupt our operations. **Key changes:** - Reworded sentence: "The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which we operate, or in which our suppliers are located, have adversely affected and could in the future adversely affect our operations and financial performance." - Reworded sentence: "The potential physical impacts of climate change on our facilities, suppliers, and customers, and therefore on our operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions." - Reworded sentence: "and Canada, the equipment operations own and operate 23 factory locations and lease and operate another 3 locations." - Added sentence: "24 24 24 Table of ContentsPART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.(a)Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol "DE." We have a history of paying quarterly cash dividends." - Added sentence: "While we currently expect a cash dividend to be paid in the future, future dividend payments will depend on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors." **Prior (2022):** The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which John Deere operates, or in which John Deere suppliers are located, have and could in the future adversely affect the Company's operations and financial performance. Such events have and could cause complete or partial closure of one or more of John Deere manufacturing facilities or distribution centers, temporary or long-term disruption in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events. 23 23 23 Table of ContentsThe potential physical impacts of climate change on John Deere's facilities, suppliers, and customers, and therefore on John Deere's operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for John Deere's products and the cost, production, sales, and financial performance of John Deere's operations.ITEM 1B.UNRESOLVED STAFF COMMENTS.None.ITEM 2.PROPERTIES.See "Manufacturing" in Item 1.The equipment operations own or lease 11 facilities comprised of two locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 12 centralized parts distribution centers in Brazil, Germany, India, and Russia and regional parts depots and distribution centers in Argentina, Australia, China, Mexico, South Africa, Sweden, and the United Kingdom. John Deere also owns or leases eight facilities for the manufacture and distribution of other brands of replacement parts. The Company owns or leases 47 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities.Overall, John Deere owns approximately 68.1 million square feet of facilities and leases approximately 12.8 million additional square feet in various locations. These properties are adequate and suitable for John Deere's business as presently conducted and are well maintained.ITEM 3.LEGAL PROCEEDINGS.The Company is subject to various unresolved legal actions that arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its financial statements. ITEM 4.MINE SAFETY DISCLOSURES.Not applicable.PART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.(a)The Company's common stock is listed on the New York Stock Exchange under the symbol "DE." The Company has a history of paying quarterly cash dividends. While the Company currently expects a cash dividend to be paid in the future, future dividend payments will depend on the Company's earnings, capital requirements, financial condition, and other factors considered relevant by the Company's Board of Directors. See the information concerning the number of stockholders in Note 21 to the Consolidated Financial Statements.(b)Not applicable.24 Table of Contents Table of Contents Table of Contents The potential physical impacts of climate change on John Deere's facilities, suppliers, and customers, and therefore on John Deere's operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for John Deere's products and the cost, production, sales, and financial performance of John Deere's operations.ITEM 1B.UNRESOLVED STAFF COMMENTS.None.ITEM 2.PROPERTIES.See "Manufacturing" in Item 1.The equipment operations own or lease 11 facilities comprised of two locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 12 centralized parts distribution centers in Brazil, Germany, India, and Russia and regional parts depots and distribution centers in Argentina, Australia, China, Mexico, South Africa, Sweden, and the United Kingdom. John Deere also owns or leases eight facilities for the manufacture and distribution of other brands of replacement parts. The Company owns or leases 47 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities.Overall, John Deere owns approximately 68.1 million square feet of facilities and leases approximately 12.8 million additional square feet in various locations. These properties are adequate and suitable for John Deere's business as presently conducted and are well maintained.ITEM 3.LEGAL PROCEEDINGS.The Company is subject to various unresolved legal actions that arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its financial statements. ITEM 4.MINE SAFETY DISCLOSURES.Not applicable.PART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.(a)The Company's common stock is listed on the New York Stock Exchange under the symbol "DE." The Company has a history of paying quarterly cash dividends. While the Company currently expects a cash dividend to be paid in the future, future dividend payments will depend on the Company's earnings, capital requirements, financial condition, and other factors considered relevant by the Company's Board of Directors. See the information concerning the number of stockholders in Note 21 to the Consolidated Financial Statements.(b)Not applicable. The potential physical impacts of climate change on John Deere's facilities, suppliers, and customers, and therefore on John Deere's operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for John Deere's products and the cost, production, sales, and financial performance of John Deere's operations. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. See "Manufacturing" in Item 1. The equipment operations own or lease 11 facilities comprised of two locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 12 centralized parts distribution centers in Brazil, Germany, India, and Russia and regional parts depots and distribution centers in Argentina, Australia, China, Mexico, South Africa, Sweden, and the United Kingdom. John Deere also owns or leases eight facilities for the manufacture and distribution of other brands of replacement parts. The Company owns or leases 47 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities. Overall, John Deere owns approximately 68.1 million square feet of facilities and leases approximately 12.8 million additional square feet in various locations. These properties are adequate and suitable for John Deere's business as presently conducted and are well maintained. ITEM 3. LEGAL PROCEEDINGS. The Company is subject to various unresolved legal actions that arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its financial statements. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. 24 24 24 Table of Contents(c)The Company's purchases of its common stock during the fourth quarter of 2022 were as follows:ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​ ​​ ​ Maximum ​​​​​​​Total Number of​Number of Shares ​​​​​​​Shares Purchased​that May Yet Be ​​Total Number of​​​​as Part of Publicly​Purchased under ​​Shares​Average Price​Announced Plans​the Plans or ​​Purchased​Paid Per​or Programs (1)​Programs (1) (2) Period​(thousands)​Share​(thousands)​(millions) Aug 1 to Aug 28 996 ​$354.90 996 7.5 ​Aug 29 to Sept 25 888 ​​366.56 888 6.7 ​Sept 26 to Oct 30 1,242 ​ 355.43 1,242 5.6 ​Total 3,126 ​​​ 3,126 ​​​​(1)The Company announced a share repurchase plan in December 2019 to purchase up to $8,000 million of shares of the Company's common stock. The maximum number of shares that may yet be purchased under this plan was based on the closing share price as at end of the fourth quarter of $396.85 per share. At the end of the fourth quarter of 2022, $2,228 million of common stock remained to be purchased under this plan.(2)In December 2022, the Board of Directors authorized the repurchase of up to $18,000 million of additional common stock. This additional repurchase amount may be repurchased after October 30, 2022 and is not included in the amounts above (see Note 28).ITEM 6.[RESERVED]​​​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.See the information under the caption "Management's Discussion and Analysis."ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.The Company is exposed to a variety of market risks, including interest rates and currency exchange rates. The Company attempts to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.See the Consolidated Financial Statements and notes thereto and supplementary data.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.Not applicable.ITEM 9A.CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresThe Company's principal executive officer and its principal financial officer have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of October 30, 2022, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act.Management's Report on Internal Control Over Financial ReportingThe Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles.All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles.25 Table of Contents Table of Contents Table of Contents (c)The Company's purchases of its common stock during the fourth quarter of 2022 were as follows:ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​ ​​ ​ Maximum ​​​​​​​Total Number of​Number of Shares ​​​​​​​Shares Purchased​that May Yet Be ​​Total Number of​​​​as Part of Publicly​Purchased under ​​Shares​Average Price​Announced Plans​the Plans or ​​Purchased​Paid Per​or Programs (1)​Programs (1) (2) Period​(thousands)​Share​(thousands)​(millions) Aug 1 to Aug 28 996 ​$354.90 996 7.5 ​Aug 29 to Sept 25 888 ​​366.56 888 6.7 ​Sept 26 to Oct 30 1,242 ​ 355.43 1,242 5.6 ​Total 3,126 ​​​ 3,126 ​​​​(1)The Company announced a share repurchase plan in December 2019 to purchase up to $8,000 million of shares of the Company's common stock. The maximum number of shares that may yet be purchased under this plan was based on the closing share price as at end of the fourth quarter of $396.85 per share. At the end of the fourth quarter of 2022, $2,228 million of common stock remained to be purchased under this plan.(2)In December 2022, the Board of Directors authorized the repurchase of up to $18,000 million of additional common stock. This additional repurchase amount may be repurchased after October 30, 2022 and is not included in the amounts above (see Note 28).ITEM 6.[RESERVED]​​​ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.See the information under the caption "Management's Discussion and Analysis."ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.The Company is exposed to a variety of market risks, including interest rates and currency exchange rates. The Company attempts to actively manage these risks. See the information under "Management's Discussion and Analysis," under "Financial Instrument Market Risk Information" and in Note 26 to the Consolidated Financial Statements.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.See the Consolidated Financial Statements and notes thereto and supplementary data.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.Not applicable.ITEM 9A.CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresThe Company's principal executive officer and its principal financial officer have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of October 30, 2022, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act.Management's Report on Internal Control Over Financial ReportingThe Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles.All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with generally accepted accounting principles. **Current (2023):** The occurrence of one or more unexpected events, including war, acts of terrorism, epidemics and pandemics (such as the COVID pandemic), civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, floods, and other forms of severe weather in the United States or in other countries in which we operate, or in which our suppliers are located, have adversely affected and could in the future adversely affect our operations and financial performance. Such events have caused and could cause complete or partial closure of one or more of our manufacturing facilities or distribution centers, temporary or long-term disruptions in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers, end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events. The potential physical impacts of climate change on our facilities, suppliers, and customers, and therefore on our operations, are highly uncertain and will be particular to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for our products and the cost, production, sales, and financial performance of our operations. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. In the U.S. and Canada, the equipment operations own and operate 23 factory locations and lease and operate another 3 locations. Outside of the U.S. and Canada, the equipment operations own or lease and operate 45 factory locations in Argentina, Austria, Brazil, China, Finland, France, Germany, India, Israel, Italy, Mexico, the Netherlands, New Zealand, and Spain. In addition, the equipment operations own or lease 12 facilities comprised of three locations supporting centralized parts distribution and nine regional parts depots and distribution centers throughout the U.S. and Canada. Outside the U.S. and Canada, the equipment operations also own or lease and occupy 11 total facilities with centralized parts distribution centers in Brazil, Germany, and India and regional parts depots and distribution centers in Argentina, Australia, China, India, Mexico, South Africa, Sweden, and the United Kingdom. We also own or lease eight facilities for the manufacture and distribution of other brands of replacement parts. Our manufacturing facility in Russia was shut down in 2022. Our Eurasian parts distribution center in Russia was also closed, and the leased premises were returned to the landlord in the second quarter of fiscal year 2023. Premises owned by Wirtgen in Russia operating in the roadbuilding business were sold in the fourth quarter of fiscal year 2023. We own or lease 53 administrative offices and research facilities globally as well as many other smaller, miscellaneous facilities. Overall, we own approximately 70.0 million square feet of facilities and lease approximately 13.1 million additional square feet in various locations. These properties are adequate and suitable for our business as presently conducted and are well maintained. ITEM 3. LEGAL PROCEEDINGS. We are subject to various unresolved legal actions that arise in the normal course of business, the most prevalent of which relate to product liability (including asbestos related liability), retail credit, employment, patent, trademark, and antitrust matters. Currently we believe the reasonably possible range of losses for other unresolved legal actions would not have a material effect on our financial statements; however, the outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims, or investigations could require us to pay substantial damages or fines, undertake service actions, initiate recall campaigns, or take other costly actions. It is therefore possible that legal judgements could give rise to expenses that are not covered, or not fully covered by our insurance programs and could affect our financial position and results. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 24 24 24 Table of ContentsPART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.(a)Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol "DE." We have a history of paying quarterly cash dividends. While we currently expect a cash dividend to be paid in the future, future dividend payments will depend on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors. See the information concerning the number of stockholders in Note 21 to the Consolidated Financial Statements.(b)Not applicable.(c)Purchases of our common stock during the fourth quarter of 2023 were as follows:ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​ ​​ ​ Maximum ​​​​​​​Total Number of​Number of Shares ​​​​​​​Shares Purchased​that May Yet Be ​​Total Number of​​​​as Part of Publicly​Purchased under ​​Shares​​​Announced Plans​the Plans or ​​Purchased (2)​Average Price​or Programs (1)​Programs (1) Period​(thousands)​Per Share​(thousands)​(millions) Jul 31 to Aug 27 682 ​$424.30 681 42.3 ​Aug 28 to Sept 24 2,204 ​​410.43 2,204 39.8 ​Sept 25 to Oct 29 3,593 ​ 384.94 3,593 35.9 ​Total 6,479 ​​​ 6,478 ​​​​​(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 repurchased under this plan was 35.9 million based on the closing price of our common stock on the NYSE as of the end of the fourth quarter of $361.15 per share. At the end of the fourth quarter of 2023, $13.0 billion of common stock remains to be repurchased under this plan.(2)In the fourth quarter of 2023, 1 thousand shares were acquired from a plan participant at a market price of $431.68 to pay payroll taxes on the vesting of a restricted stock award. STOCK PERFORMANCE GRAPHThe graph compares the total shareholder returns (TSR) of Deere & Company, the Standard & Poor's (S&P) 500 Construction Machinery & Heavy Transportation Equipment Index, the S&P 500 Industrials, and the S&P 500 Stock Index over a five-year period. It assumes $100 was invested on October 26, 2018 and that dividends were reinvested. Our stock price at October 27, 2023, was $361.15. Going forward, we intend to use the S&P 500 Industrials to replace the S&P 500 Construction Machinery & Heavy Transportation Equipment. We believe the S&P 500 Industrials provides a better benchmark to compare our cumulative total returns against the industry because it comprises those companies included in the S&P 500 that are classified as members of the GICS industrials sector, and therefore, have many characteristics similar to us, regardless of the specific types of products they offer. In contrast, the S&P's 500 Construction Machinery & Heavy Transportation Equipment Index is made up of only four companies (Caterpillar (CAT), Cummins (CMI), Paccar (PCAR), and Wabtec (WAB)). The stock performance shown in the graph is not intended to forecast and does not necessarily indicate future price performance.25 Table of Contents Table of Contents Table of Contents PART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.(a)Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol "DE." We have a history of paying quarterly cash dividends. While we currently expect a cash dividend to be paid in the future, future dividend payments will depend on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors. See the information concerning the number of stockholders in Note 21 to the Consolidated Financial Statements.(b)Not applicable.(c)Purchases of our common stock during the fourth quarter of 2023 were as follows:ISSUER PURCHASES OF EQUITY SECURITIES​​​​​​​​​​​​​ ​ ​​ ​ Maximum ​​​​​​​Total Number of​Number of Shares ​​​​​​​Shares Purchased​that May Yet Be ​​Total Number of​​​​as Part of Publicly​Purchased under ​​Shares​​​Announced Plans​the Plans or ​​Purchased (2)​Average Price​or Programs (1)​Programs (1) Period​(thousands)​Per Share​(thousands)​(millions) Jul 31 to Aug 27 682 ​$424.30 681 42.3 ​Aug 28 to Sept 24 2,204 ​​410.43 2,204 39.8 ​Sept 25 to Oct 29 3,593 ​ 384.94 3,593 35.9 ​Total 6,479 ​​​ 6,478 ​​​​​(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 repurchased under this plan was 35.9 million based on the closing price of our common stock on the NYSE as of the end of the fourth quarter of $361.15 per share. At the end of the fourth quarter of 2023, $13.0 billion of common stock remains to be repurchased under this plan.(2)In the fourth quarter of 2023, 1 thousand shares were acquired from a plan participant at a market price of $431.68 to pay payroll taxes on the vesting of a restricted stock award. STOCK PERFORMANCE GRAPHThe graph compares the total shareholder returns (TSR) of Deere & Company, the Standard & Poor's (S&P) 500 Construction Machinery & Heavy Transportation Equipment Index, the S&P 500 Industrials, and the S&P 500 Stock Index over a five-year period. It assumes $100 was invested on October 26, 2018 and that dividends were reinvested. Our stock price at October 27, 2023, was $361.15. Going forward, we intend to use the S&P 500 Industrials to replace the S&P 500 Construction Machinery & Heavy Transportation Equipment. We believe the S&P 500 Industrials provides a better benchmark to compare our cumulative total returns against the industry because it comprises those companies included in the S&P 500 that are classified as members of the GICS industrials sector, and therefore, have many characteristics similar to us, regardless of the specific types of products they offer. In contrast, the S&P's 500 Construction Machinery & Heavy Transportation Equipment Index is made up of only four companies (Caterpillar (CAT), Cummins (CMI), Paccar (PCAR), and Wabtec (WAB)). The stock performance shown in the graph is not intended to forecast and does not necessarily indicate future price performance. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. --- ## Modified: Security breaches and other disruptions to our information technology infrastructure could interfere with our operations and could compromise our information as well as information of our employees, customers, suppliers, and/or dealers, exposing us to liability that could cause our business and reputation to suffer. **Key changes:** - Reworded sentence: "In the ordinary course of business, we rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of our equipment and from customers of the financial services segment." **Prior (2022):** In the ordinary course of business, John Deere relies upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of John Deere equipment and from customers of the financial services segment. John Deere uses information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, John Deere collects and stores sensitive data, including intellectual property, proprietary business information, and the proprietary business information of John Deere's customers, suppliers, and dealers, as well as personally identifiable information of John Deere's customers and employees, in data centers, which are often owned by third parties, and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to John Deere's business operations and strategy. Despite security measures, including a vulnerability disclosure program, and business continuity plans, John Deere's information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employee, supplier, or dealer error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although John Deere has not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise John Deere's networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption to John Deere's operations, and damage to John Deere's reputation, which could adversely affect John Deere's business, results of operations, and financial condition. In addition, as security threats continue to evolve and increase in frequency and sophistication, John Deere may need to invest additional resources to protect information security. **Current (2023):** In the ordinary course of business, we rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of our equipment and from customers of the financial services segment. We use information technology systems to record, process, and 21 21 21 Table of Contentssummarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information, and the proprietary business information of our customers, suppliers, and dealers, as well as personally identifiable information of our customers and employees in data centers which are often owned by third parties and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to our business operations and strategy.Despite security measures, including a vulnerability disclosure program, and business continuity plans, our information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employees', suppliers', or dealers' error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although we have not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise our networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse, or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption or shut down of our operations, and damage to our reputation, which could adversely affect our business, results of operations, and financial condition. Furthermore, as security threats continue to evolve and increase in frequency and sophistication, we may need to invest additional resources to protect information security.Any unauthorized control or manipulation of our products' systems could result in loss of confidence in us and our products. Some of our products include connectivity hardware and software typically used for remote system updates. While we have implemented security measures intended to protect against unauthorized remote access to these products, malicious threat actors have attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to our products, systems, and data, regardless of their reliability, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of our products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against us, government investigations, liability, or regulatory penalties, which could adversely affect our business, results of operations, and financial condition. Our business could be adversely affected by the infringement or loss of intellectual property rights.We protect our intellectual property with a combination of patents, trademarks, copyrights, trade secret laws, and legal agreements. We heavily rely on certain trademarks to protect our identity and customer recognition of our products and services, including, but not limited to, the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, and the green and yellow color combination. These trademarks, as well as the many patents that protect innovations used in our products, are integral to our business, and their loss could have a material adverse effect on us. Additionally, third parties may initiate legal proceedings to challenge the validity of our intellectual property or allege that we infringe on their intellectual property. We may incur substantial costs if third parties initiate such legal proceedings, or if we initiate legal proceedings to protect or enforce our intellectual property. If the outcome of any such legal proceedings is unfavorable to us, our business could be adversely affected. LEGAL AND COMPLIANCE RISKS Our global operations are subject to complex and changing laws and regulations, the violation of which could expose us to potential liabilities, increased costs, and other adverse effects.We are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a variety of subjects, including advertising, anti-money laundering, antitrust, consumer finance, environmental, climate-related, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, import/export and trade, human rights, labor and employment, product liability reporting, cybersecurity, data privacy, telematics, and connectivity. These laws may vary substantially within the different markets in which we operate. Compliance with these laws and regulations is expensive and may further increase the cost of conducting our global operations. In addition, we must comply with the U.S. Foreign 22 Table of Contents Table of Contents Table of Contents summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information, and the proprietary business information of our customers, suppliers, and dealers, as well as personally identifiable information of our customers and employees in data centers which are often owned by third parties and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to our business operations and strategy.Despite security measures, including a vulnerability disclosure program, and business continuity plans, our information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employees', suppliers', or dealers' error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although we have not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise our networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse, or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption or shut down of our operations, and damage to our reputation, which could adversely affect our business, results of operations, and financial condition. Furthermore, as security threats continue to evolve and increase in frequency and sophistication, we may need to invest additional resources to protect information security.Any unauthorized control or manipulation of our products' systems could result in loss of confidence in us and our products. Some of our products include connectivity hardware and software typically used for remote system updates. While we have implemented security measures intended to protect against unauthorized remote access to these products, malicious threat actors have attempted, and may attempt in the future, to gain unauthorized access to such products in order to gain control of the products, change the products' functionality, user interface, or performance characteristics, interfere with the products' operations, or gain access to data stored in or generated by the products or to systems to which they connect. In addition, reports of unauthorized access to our products, systems, and data, regardless of their reliability, may result in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of our products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in legal claims or proceedings against us, government investigations, liability, or regulatory penalties, which could adversely affect our business, results of operations, and financial condition. Our business could be adversely affected by the infringement or loss of intellectual property rights.We protect our intellectual property with a combination of patents, trademarks, copyrights, trade secret laws, and legal agreements. We heavily rely on certain trademarks to protect our identity and customer recognition of our products and services, including, but not limited to, the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, and the green and yellow color combination. These trademarks, as well as the many patents that protect innovations used in our products, are integral to our business, and their loss could have a material adverse effect on us. Additionally, third parties may initiate legal proceedings to challenge the validity of our intellectual property or allege that we infringe on their intellectual property. We may incur substantial costs if third parties initiate such legal proceedings, or if we initiate legal proceedings to protect or enforce our intellectual property. If the outcome of any such legal proceedings is unfavorable to us, our business could be adversely affected. LEGAL AND COMPLIANCE RISKS Our global operations are subject to complex and changing laws and regulations, the violation of which could expose us to potential liabilities, increased costs, and other adverse effects.We are subject to numerous international, federal, state, and local laws and regulations, many of which are complex, frequently changing, and subject to varying interpretations. These laws and regulations cover a variety of subjects, including advertising, anti-money laundering, antitrust, consumer finance, environmental, climate-related, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, import/export and trade, human rights, labor and employment, product liability reporting, cybersecurity, data privacy, telematics, and connectivity. These laws may vary substantially within the different markets in which we operate. Compliance with these laws and regulations is expensive and may further increase the cost of conducting our global operations. In addition, we must comply with the U.S. Foreign summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information, and the proprietary business information of our customers, suppliers, and dealers, as well as personally identifiable information of our customers and employees in data centers which are often owned by third parties and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to our business operations and strategy. Despite security measures, including a vulnerability disclosure program, and business continuity plans, our information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employees', suppliers', or dealers' error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although we have not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise our networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse, or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption or shut down of our operations, and damage to our reputation, which could adversely affect our business, results of operations, and financial condition. Furthermore, as security threats continue to evolve and increase in frequency and sophistication, we may need to invest additional resources to protect information security. --- ## Modified: Postretirement Benefit Obligations **Key changes:** - Reworded sentence: "The pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates." - Reworded sentence: "●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools." - Reworded sentence: "●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools." - Reworded sentence: "●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools." **Prior (2022):** The estimation of defined benefit pension and OPEB plan obligations and expenses requires the use of estimates of the present value of the projected future benefit payments. Plan obligations and expenses are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which the company is presently committed (e.g., in existing labor contracts). The key assumptions used in developing the required estimates used by the company's actuaries include discount rates, health care cost trend rates, expected long-term return on plan assets, compensation increases, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions and changes in assumptions affect future expenses and obligations. Assumptions are set at each year-end and are not changed during the year unless there is a significant plan event, such as a curtailment or settlement that would trigger a plan remeasurement. The company's pension and OPEB costs in 2022 were $176 million, compared with $197 million in 2021 and $341 million in 2020. The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of 5.0 percent in 2022 and 5.9 percent in 2021, or $836 million and $876 million, respectively. The actual return was a loss of $3,565 million in 2022 and a gain of $3,616 million in 2021. In 2023, the expected return is approximately 6.0 percent. The company's costs under these plans in 2023 are expected to decrease by $225 million compared to 2022, resulting in a net periodic benefit. The reduction in the company's cost is due to increases in the expected long-term rates of return on plan assets and increases in discount rates. The pension assets, net of pension liabilities, recognized on the balance sheets at October 30, 2022 and October 31, 2021 were $2,690 million and $2,665 million, respectively. The pension liabilities, net of pension assets, recognized on the balance sheets at November 1, 2020 were $447 million. The increase in the pension net assets in 2022 was due to an increase in discount rates offset by losses on plan assets and UAW contract impacts. The increase in the pension net assets in 2021 was due to returns on plan assets.The OPEB liabilities, net of OPEB assets, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,205 million, $3,175 million, and $3,892 million, respectively. The decrease in OPEB net liabilities in 2022 was due to an increase in discount rates and a $1,000 million contribution to a U.S. OPEB plan. The decrease in OPEB net liabilities in 2021 was due to returns on plan assets and favorable changes to medical assumptions.The company employs de-risking strategies for the global funded pension plans that increase the matching characteristics of the plan assets relative to the obligations, through an increased allocation to fixed income assets, as the funded status improves. Changes in interest rates, which directly influence changes in discount rates, in addition to other factors, have a significant impact on the value of the pension obligation and the fixed income asset portfolio. The company anticipates that changes in interest rates will likely result in offsetting effects in the value of the pension obligation and the value of the fixed income asset portfolio, reducing funded status volatility. The company's pension and OPEB costs in 2022 were $176 million, compared with $197 million in 2021 and $341 million in 2020. The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of 5.0 percent in 2022 and 5.9 percent in 2021, or $836 million and $876 million, respectively. The actual return was a loss of $3,565 million in 2022 and a gain of $3,616 million in 2021. In 2023, the expected return is approximately 6.0 percent. The company's costs under these plans in 2023 are expected to decrease by $225 million compared to 2022, resulting in a net periodic benefit. The reduction in the company's cost is due to increases in the expected long-term rates of return on plan assets and increases in discount rates. The pension assets, net of pension liabilities, recognized on the balance sheets at October 30, 2022 and October 31, 2021 were $2,690 million and $2,665 million, respectively. The pension liabilities, net of pension assets, recognized on the balance sheets at November 1, 2020 were $447 million. The increase in the pension net assets in 2022 was due to an increase in discount rates offset by losses on plan assets and UAW contract impacts. The increase in the pension net assets in 2021 was due to returns on plan assets. The OPEB liabilities, net of OPEB assets, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,205 million, $3,175 million, and $3,892 million, respectively. The decrease in OPEB net liabilities in 2022 was due to an increase in discount rates and a $1,000 million contribution to a U.S. OPEB plan. The decrease in OPEB net liabilities in 2021 was due to returns on plan assets and favorable changes to medical assumptions. The company employs de-risking strategies for the global funded pension plans that increase the matching characteristics of the plan assets relative to the obligations, through an increased allocation to fixed income assets, as the funded status improves. Changes in interest rates, which directly influence changes in discount rates, in addition to other factors, have a significant impact on the value of the pension obligation and the fixed income asset portfolio. The company anticipates that changes in interest rates will likely result in offsetting effects in the value of the pension obligation and the value of the fixed income asset portfolio, reducing funded status volatility. 34 34 34 Table of Contents​The effect of hypothetical changes to selected assumptions on the company's major U.S. retirement benefit plans would be as follows in millions of dollars:​​​​​​​​​​​​​​​October 30, 2022​2023​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(485)/547​$0/1​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (149)/162​ (2)/2​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 291/(250)​ 40/(29)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​GoodwillGoodwill is not amortized and is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying amount. The end of the fiscal third quarter is the annual measurement date. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, a loss is measured as the excess of the reporting unit's carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit.An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows. These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies, and competition.The company has not identified a reporting unit for which the goodwill was impaired in 2022, 2021, or 2020. For all reporting units, a 10 percent decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2022.Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing receivables are included in the estimate of expected credit losses.The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. In 2021, the company adopted ASU No. 2016-13, which revised the measurement of credit losses from an incurred loss to an expected loss methodology. Upon adoption the company's allowance for credit losses increased with an offset to retained earnings. The allowance for credit losses at November 1, 2020 was not restated under the expected loss methodology. The total allowance for credit losses at October 30, 2022, October 31, 2021, and November 1, 2020 was $361 million, $207 million, and $223 million, respectively. The allowance increased in 2022 compared to 2021 due to higher reserves related to the economic uncertainty in Russia. The allowance decreased in 2021 compared to 2020 due to lower expected losses in the construction and forestry market, continued improvement in the agriculture and turf market, and better than expected performance of accounts granted payment relief due to the economic effects of COVID. As previously mentioned, the allowance decrease was partially offset by the adoption of ASU No. 2016-13. The assumptions used in evaluating the company's exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company's wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. The company's transition matrix models, which are utilized to estimate credit losses for more than 90 percent of retail customer receivables, use historical portfolio performance and current delinquency levels to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. Holding all other factors constant, a 10 percent increase in the transition matrix models' forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $40 million increase to the allowance for credit losses at October 30, 2022.Operating Lease Residual ValuesThe carrying value of equipment on operating leases is affected by the estimated fair values of the equipment at the end of the lease (residual values). Upon termination of the lease, the equipment is 35 Table of Contents​ Table of Contents Table of Contents ​ The effect of hypothetical changes to selected assumptions on the company's major U.S. retirement benefit plans would be as follows in millions of dollars:​​​​​​​​​​​​​​​October 30, 2022​2023​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(485)/547​$0/1​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (149)/162​ (2)/2​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 291/(250)​ 40/(29)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​GoodwillGoodwill is not amortized and is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying amount. The end of the fiscal third quarter is the annual measurement date. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, a loss is measured as the excess of the reporting unit's carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit.An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows. These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies, and competition.The company has not identified a reporting unit for which the goodwill was impaired in 2022, 2021, or 2020. For all reporting units, a 10 percent decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2022.Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing receivables are included in the estimate of expected credit losses.The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. In 2021, the company adopted ASU No. 2016-13, which revised the measurement of credit losses from an incurred loss to an expected loss methodology. Upon adoption the company's allowance for credit losses increased with an offset to retained earnings. The allowance for credit losses at November 1, 2020 was not restated under the expected loss methodology. The total allowance for credit losses at October 30, 2022, October 31, 2021, and November 1, 2020 was $361 million, $207 million, and $223 million, respectively. The allowance increased in 2022 compared to 2021 due to higher reserves related to the economic uncertainty in Russia. The allowance decreased in 2021 compared to 2020 due to lower expected losses in the construction and forestry market, continued improvement in the agriculture and turf market, and better than expected performance of accounts granted payment relief due to the economic effects of COVID. As previously mentioned, the allowance decrease was partially offset by the adoption of ASU No. 2016-13. The assumptions used in evaluating the company's exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company's wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. The company's transition matrix models, which are utilized to estimate credit losses for more than 90 percent of retail customer receivables, use historical portfolio performance and current delinquency levels to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. Holding all other factors constant, a 10 percent increase in the transition matrix models' forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $40 million increase to the allowance for credit losses at October 30, 2022.Operating Lease Residual ValuesThe carrying value of equipment on operating leases is affected by the estimated fair values of the equipment at the end of the lease (residual values). Upon termination of the lease, the equipment is The effect of hypothetical changes to selected assumptions on the company's major U.S. retirement benefit plans would be as follows in millions of dollars:​​​​​​​​​​​​​​​October 30, 2022​2023​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(485)/547​$0/1​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (149)/162​ (2)/2​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 291/(250)​ 40/(29)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​GoodwillGoodwill is not amortized and is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying amount. The end of the fiscal third quarter is the annual measurement date. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, a loss is measured as the excess of the reporting unit's carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit.An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows. These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies, and competition.The company has not identified a reporting unit for which the goodwill was impaired in 2022, 2021, or 2020. For all reporting units, a 10 percent decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2022.Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing receivables are included in the estimate of expected credit losses.The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex retail customer receivable pools, while weighted average remaining maturity models are used for smaller and less complex retail customer receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, with consideration of current economic conditions and dealer financial risk. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary. In 2021, the company adopted ASU No. 2016-13, which revised the measurement of credit losses from an incurred loss to an expected loss methodology. Upon adoption the company's allowance for credit losses increased with an offset to retained earnings. The allowance for credit losses at November 1, 2020 was not restated under the expected loss methodology. The total allowance for credit losses at October 30, 2022, October 31, 2021, and November 1, 2020 was $361 million, $207 million, and $223 million, respectively. The allowance increased in 2022 compared to 2021 due to higher reserves related to the economic uncertainty in Russia. The allowance decreased in 2021 compared to 2020 due to lower expected losses in the construction and forestry market, continued improvement in the agriculture and turf market, and better than expected performance of accounts granted payment relief due to the economic effects of COVID. As previously mentioned, the allowance decrease was partially offset by the adoption of ASU No. 2016-13. The assumptions used in evaluating the company's exposure to credit losses involve estimates and significant judgment. While the company believes its allowance is sufficient to provide for losses over the life of its existing receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses. Historically, changes in economic conditions have had limited impact on credit losses within the company's wholesale receivable portfolio. Within the retail customer receivables portfolio, credit loss estimates are dependent on a number of factors, including historical portfolio performance, current delinquency levels, and estimated recoveries on defaulted accounts. The company's transition matrix models, which are utilized to estimate credit losses for more than 90 percent of retail customer receivables, use historical portfolio performance and current delinquency levels to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. Holding all other factors constant, a 10 percent increase in the transition matrix models' forecasted defaults and a simultaneous 10 percent decrease in recovery rates would have resulted in a $40 million increase to the allowance for credit losses at October 30, 2022.Operating Lease Residual ValuesThe carrying value of equipment on operating leases is affected by the estimated fair values of the equipment at the end of the lease (residual values). Upon termination of the lease, the equipment is The effect of hypothetical changes to selected assumptions on the company's major U.S. retirement benefit plans would be as follows in millions of dollars:​​​​​​​​​​​​​​​October 30, 2022​2023​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(485)/547​$0/1​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (149)/162​ (2)/2​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 291/(250)​ 40/(29)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​GoodwillGoodwill is not amortized and is tested for impairment annually and when events or circumstances change such that it is more likely than not that the fair value of a reporting unit is reduced below its carrying amount. The end of the fiscal third quarter is the annual measurement date. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, a loss is measured as the excess of the reporting unit's carrying value over the fair value, with a limit of the goodwill allocated to that reporting unit.An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows. These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies, and competition.The company has not identified a reporting unit for which the goodwill was impaired in 2022, 2021, or 2020. For all reporting units, a 10 percent decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2022.Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis when similar risk characteristics exist. Risk characteristics considered by the company include finance product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing receivables are included in the estimate of expected credit losses.The company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix The effect of hypothetical changes to selected assumptions on the company's major U.S. retirement benefit plans would be as follows in millions of dollars: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** The pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades. The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). The key assumptions used by our actuaries to calculate the estimates include: 35 35 35 Table of Contents​●retirement rates, ●mortality rates, and ●expected contributions. Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.The key pension and OPEB amounts follow:​​​​​​​​​​​​​ 2023 2022 2021 Pension and OPEB net (benefit) cost​$ (13)​$ 176​$ 197​Long-term expected return on pension and OPEB plan assets (as a percent) ​6.2​​5.0​​5.9​Long-term expected return on pension and OPEB plan assets​​ 995​​ 836​ 876​Actual return (loss) on pension and OPEB plan assets​​ (395)​​ (3,565)​​ 3,616​Pension assets, net of pension liabilities 2,076​ 2,690​ 2,665​OPEB liabilities, net of OPEB assets 1,001​ 1,205​ 3,175​​​The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates.The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:​​​​​​​​​​​​​​​October 29, 2023​2024​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(414)/456​$3/(3)​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (120)/130​ (4)/5​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 231/(202)​ 39/(34)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:●finance product category, ●market, ●geography, ●credit risk, and ●remaining balance. We utilize the following loss forecast models to estimate expected credit losses:●Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. ●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools. ●Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk. The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: ●commodity prices, ●industry equipment sales, ●unemployment rates, and ●housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary.Allowance for Credit LossesThe allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia. While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:●For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses.●Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts. 36 Table of Contents​ Table of Contents Table of Contents ​ ●retirement rates, ●mortality rates, and ●expected contributions. Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.The key pension and OPEB amounts follow:​​​​​​​​​​​​​ 2023 2022 2021 Pension and OPEB net (benefit) cost​$ (13)​$ 176​$ 197​Long-term expected return on pension and OPEB plan assets (as a percent) ​6.2​​5.0​​5.9​Long-term expected return on pension and OPEB plan assets​​ 995​​ 836​ 876​Actual return (loss) on pension and OPEB plan assets​​ (395)​​ (3,565)​​ 3,616​Pension assets, net of pension liabilities 2,076​ 2,690​ 2,665​OPEB liabilities, net of OPEB assets 1,001​ 1,205​ 3,175​​​The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates.The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:​​​​​​​​​​​​​​​October 29, 2023​2024​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(414)/456​$3/(3)​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (120)/130​ (4)/5​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 231/(202)​ 39/(34)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:●finance product category, ●market, ●geography, ●credit risk, and ●remaining balance. We utilize the following loss forecast models to estimate expected credit losses:●Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. ●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools. ●Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk. The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: ●commodity prices, ●industry equipment sales, ●unemployment rates, and ●housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary.Allowance for Credit LossesThe allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia. While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:●For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses.●Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts. ●retirement rates, ●mortality rates, and ●expected contributions. Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.The key pension and OPEB amounts follow:​​​​​​​​​​​​​ 2023 2022 2021 Pension and OPEB net (benefit) cost​$ (13)​$ 176​$ 197​Long-term expected return on pension and OPEB plan assets (as a percent) ​6.2​​5.0​​5.9​Long-term expected return on pension and OPEB plan assets​​ 995​​ 836​ 876​Actual return (loss) on pension and OPEB plan assets​​ (395)​​ (3,565)​​ 3,616​Pension assets, net of pension liabilities 2,076​ 2,690​ 2,665​OPEB liabilities, net of OPEB assets 1,001​ 1,205​ 3,175​​​The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates.The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:​​​​​​​​​​​​​​​October 29, 2023​2024​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(414)/456​$3/(3)​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (120)/130​ (4)/5​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 231/(202)​ 39/(34)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:●finance product category, ●market, ●geography, ●credit risk, and ●remaining balance. We utilize the following loss forecast models to estimate expected credit losses:●Transition matrix models are used for large and complex retail customer receivable pools. These models are used for more than 90 percent of retail customer receivables. Historical portfolio performance and current delinquency levels are used to forecast future defaults. Estimated recovery rates are applied to the estimated default balance to calculate the expected credit losses. ●Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools. ●Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk. The model output is adjusted for forecasted economic conditions, which may include the following economic indicators: ●commodity prices, ●industry equipment sales, ●unemployment rates, and ●housing starts. Management reviews each model's output quarterly, and qualitative adjustments are incorporated as necessary.Allowance for Credit LossesThe allowance decreased in 2023 due to the disposition of the receivable portfolio in Russia (see Note 11). Excluding the portfolio in Russia, the allowance increased slightly as higher portfolio balances and higher expected losses on turf and construction customer accounts. The allowance increased in 2022 due to higher reserves related to the economic uncertainty in Russia. While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses, specifically:●For the wholesale receivable portfolio: Changes in economic conditions have historically had limited impact on credit losses.●Within the retail customer receivable portfolio: Credit loss estimates are dependent on a number of factors, including historical portfolio performance, current economic conditions, current delinquency levels, and estimated recoveries on defaulted accounts. ●retirement rates, ●mortality rates, and ●expected contributions. Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.The key pension and OPEB amounts follow:​​​​​​​​​​​​​ 2023 2022 2021 Pension and OPEB net (benefit) cost​$ (13)​$ 176​$ 197​Long-term expected return on pension and OPEB plan assets (as a percent) ​6.2​​5.0​​5.9​Long-term expected return on pension and OPEB plan assets​​ 995​​ 836​ 876​Actual return (loss) on pension and OPEB plan assets​​ (395)​​ (3,565)​​ 3,616​Pension assets, net of pension liabilities 2,076​ 2,690​ 2,665​OPEB liabilities, net of OPEB assets 1,001​ 1,205​ 3,175​​​The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates.The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:​​​​​​​​​​​​​​​October 29, 2023​2024​​​​​Increase​Increase​​​Percentage​(Decrease)​(Decrease)​Assumptions Change PBO/APBO* Expense Pension​​​​​​​​​Discount rate** +/-.5​$(414)/456​$3/(3)​Expected return on assets​+/-.5​​​​ (63)/63​OPEB​​​​​​​​​Discount rate** +/-.5​ (120)/130​ (4)/5​Expected return on assets +/-.5​​​​ (10)/10​Health care cost trend rate** +/-1.0​ 231/(202)​ 39/(34)​*Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.**Pretax impact on service cost, interest cost, and amortization of gains or losses.​Allowance for Credit LossesThe allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:●finance product category, Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations. The key pension and OPEB amounts follow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 Pension and OPEB net (benefit) cost ​ $ (13) ​ $ 176 ​ $ 197 ​ Long-term expected return on pension and OPEB plan assets (as a percent) ​ 6.2 ​ ​ 5.0 ​ ​ 5.9 ​ Long-term expected return on pension and OPEB plan assets ​ ​ 995 ​ ​ 836 ​ 876 ​ Actual return (loss) on pension and OPEB plan assets ​ ​ (395) ​ ​ (3,565) ​ ​ 3,616 ​ Pension assets, net of pension liabilities 2,076 ​ 2,690 ​ 2,665 ​ OPEB liabilities, net of OPEB assets 1,001 ​ 1,205 ​ 3,175 ​ ​ ​ The reduction in the 2023 pension and OPEB net (benefit) cost was due to increased expected long-term return rates on plan assets and increased discount rates. The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Net Sales and Revenues **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 55,565 ​ $ 47,917 ​ $ 39,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 55,565 ​ $ 47,917 ​ $ 39,737 ​ ​ ​ Finance and interest income ​ ​ 636 ​ ​ 213 ​ ​ 133 ​ $ 5,055 ​ $ 3,583 ​ $ 3,442 ​ $ (1,008) ​ $ (431) ​ $ (279) ​ ​ 4,683 ​ ​ 3,365 ​ ​ 3,296 ​ 1​ ​ Other income ​ ​ 858 ​ ​ 1,261 ​ ​ 941 ​ ​ 499 ​ ​ 502 ​ ​ 352 ​ ​ (354) ​ ​ (468) ​ ​ (302) ​ ​ 1,003 ​ ​ 1,295 ​ ​ 991 ​ 2, 3​ ​ Total ​ ​ 57,059 ​ ​ 49,391 ​ ​ 40,811 ​ ​ 5,554 ​ ​ 4,085 ​ ​ 3,794 ​ ​ (1,362) ​ ​ (899) ​ ​ (581) ​ ​ 61,251 ​ ​ 52,577 ​ ​ 44,024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 47,917 ​ $ 39,737 ​ $ 31,272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 47,917 ​ $ 39,737 ​ $ 31,272 ​ ​ ​ Finance and interest income ​ ​ 213 ​ ​ 133 ​ ​ 112 ​ $ 3,583 ​ $ 3,442 ​ $ 3,610 ​ $ (431) ​ $ (279) ​ $ (272) ​ ​ 3,365 ​ ​ 3,296 ​ ​ 3,450 ​ 1​ ​ Other income ​ ​ 1,261 ​ ​ 941 ​ ​ 808 ​ ​ 502 ​ ​ 352 ​ ​ 257 ​ ​ (468) ​ ​ (302) ​ ​ (247) ​ ​ 1,295 ​ ​ 991 ​ ​ 818 ​ 2, 3​ ​ Total ​ ​ 49,391 ​ ​ 40,811 ​ ​ 32,192 ​ ​ 4,085 ​ ​ 3,794 ​ ​ 3,867 ​ ​ (899) ​ ​ (581) ​ ​ (519) ​ ​ 52,577 ​ ​ 44,024 ​ ​ 35,540 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 55,565 ​ $ 47,917 ​ $ 39,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 55,565 ​ $ 47,917 ​ $ 39,737 ​ ​ ​ Finance and interest income ​ ​ 636 ​ ​ 213 ​ ​ 133 ​ $ 5,055 ​ $ 3,583 ​ $ 3,442 ​ $ (1,008) ​ $ (431) ​ $ (279) ​ ​ 4,683 ​ ​ 3,365 ​ ​ 3,296 ​ 1​ ​ Other income ​ ​ 858 ​ ​ 1,261 ​ ​ 941 ​ ​ 499 ​ ​ 502 ​ ​ 352 ​ ​ (354) ​ ​ (468) ​ ​ (302) ​ ​ 1,003 ​ ​ 1,295 ​ ​ 991 ​ 2, 3​ ​ Total ​ ​ 57,059 ​ ​ 49,391 ​ ​ 40,811 ​ ​ 5,554 ​ ​ 4,085 ​ ​ 3,794 ​ ​ (1,362) ​ ​ (899) ​ ​ (581) ​ ​ 61,251 ​ ​ 52,577 ​ ​ 44,024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Total Assets **Key changes:** - Reworded sentence: "​ $ 40,590 ​ $ 39,208 ​ $ 70,732 ​ $ 58,864 ​ $ (7,235) ​ $ (8,042) ​ $ 104,087 ​ $ 90,030 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ $ 39,208 ​ $ 39,152 ​ $ 58,864 ​ $ 51,624 ​ $ (8,042) ​ $ (6,662) ​ $ 90,030 ​ $ 84,114 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ $ 40,590 ​ $ 39,208 ​ $ 70,732 ​ $ 58,864 ​ $ (7,235) ​ $ (8,042) ​ $ 104,087 ​ $ 90,030 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Income Taxes **Key changes:** - Reworded sentence: "We are subject to federal, state, and foreign income taxes." **Prior (2022):** The company's income tax provision, deferred income tax assets and liabilities, and liabilities for uncertain tax benefits represent the company's best estimate of current and future income taxes to be paid. The annual tax rate is based on income tax laws, statutory tax rates, taxable income levels, and tax planning opportunities available in various jurisdictions where the company operates. These tax laws are complex, and require significant judgment to determine the consolidated provision for income taxes. Changes in tax laws, regulations, statutory tax rates, and estimates of the company's future taxable income levels could result in actual realization of deferred taxes being materially different from amounts provided for in the consolidated financial statements. Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities, which will result in taxable or deductible amounts in the future. Deferred tax assets also include loss carryforwards and tax credits. These assets are regularly assessed for the likelihood of recoverability from estimated future taxable income, reversal of deferred tax liabilities, and tax planning strategies. To the extent the company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates. Uncertain tax positions are determined based on whether it is more likely than not the tax positions will be sustained based on the technical merits of the position. For those positions that meet the more likely than not criteria, an estimate of the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority is recognized. The ultimate resolution of the tax position could take many years and result in a payment that is significantly different from the original estimate.A provision for foreign withholding taxes has not been recorded on undistributed profits of the company's non-U.S. subsidiaries that are determined to be indefinitely reinvested outside the U.S. If management intentions change in the future, there may be a significant impact on the provision for income taxes in the period the change occurs. For further information on income taxes, see Note 8 to the consolidated financial statements.FORWARD-LOOKING STATEMENTSCertain 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 the company's operations generally while others could more heavily affect a particular line of business.Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).Factors Affecting All Lines of BusinessAll of the company's businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, customer access to capital, and overall demand for our products; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the company operates; the effects of, or response to, wars and other conflicts, including the current conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic).Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial Uncertain tax positions are determined based on whether it is more likely than not the tax positions will be sustained based on the technical merits of the position. For those positions that meet the more likely than not criteria, an estimate of the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority is recognized. The ultimate resolution of the tax position could take many years and result in a payment that is significantly different from the original estimate. A provision for foreign withholding taxes has not been recorded on undistributed profits of the company's non-U.S. subsidiaries that are determined to be indefinitely reinvested outside the U.S. If management intentions change in the future, there may be a significant impact on the provision for income taxes in the period the change occurs. For further information on income taxes, see Note 8 to the consolidated financial statements. **Current (2023):** We are subject to federal, state, and foreign income taxes. These tax laws can be complex. Significant judgment and interpretation is required to implement them. Changes in tax laws could materially affect our consolidated financial statements. We record our tax positions in the following categories: Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities. This will result in taxable or deductible amounts in the future. Loss carryforwards and tax credits are significant components of deferred tax asset balances. These assets are reviewed regularly for the following: ●the likelihood of recoverability from future taxable income, ●reversal of deferred tax liabilities, and ●tax planning strategies. Valuation allowances are established when we determine that the deferred tax benefit may not be realized. The recoverability analysis requires significant judgment and relies on estimates. The valuation allowance as of October 29, 2023 was $1.6 billion. Changes in foreign income tax laws, income for certain jurisdictions, or our tax structure could impact the valuation allowance balance.Some tax positions contain significant uncertainties. These positions may be challenged or disallowed by taxing authorities. If it is likely the position will be disallowed, no tax benefit is recorded. If it is likely the position will be sustained, a tax benefit is recognized. The ultimate resolution could take many years. This may result in a payment that is significantly different from the original estimate.See Note 8 for further information on income taxes.FORWARD-LOOKING STATEMENTSCertain 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 U.S., foreign and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies; ●political, economic, and social instability of the geographies in which we operate, including the ongoing wars between Russia and Ukraine and between Israel and Hamas;●adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and regional or global liquidity constraints; This will result in taxable or deductible amounts in the future. Loss carryforwards and tax credits are significant components of deferred tax asset balances. These assets are reviewed regularly for the following: Valuation allowances are established when we determine that the deferred tax benefit may not be realized. The recoverability analysis requires significant judgment and relies on estimates. The valuation allowance as of October 29, 2023 was $1.6 billion. Changes in foreign income tax laws, income for certain jurisdictions, or our tax structure could impact the valuation allowance balance. Some tax positions contain significant uncertainties. These positions may be challenged or disallowed by taxing authorities. If it is likely the position will be disallowed, no tax benefit is recorded. If it is likely the position will be sustained, a tax benefit is recognized. The ultimate resolution could take many years. This may result in a payment that is significantly different from the original estimate. See Note 8 for further information on income taxes. --- ## Modified: Changes in interest rates or market liquidity conditions could adversely affect our financials and our earnings and/or cash flows. **Key changes:** - Reworded sentence: "Central bank policy interest rates continued to increase in fiscal year 2023." - Reworded sentence: "The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.We may sustain increases in funding obligations under our pension plans which may impair our liquidity or financial condition.We maintain certain defined benefit pension plans for certain employees, which impose funding obligations." - Reworded sentence: "The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.We may sustain increases in funding obligations under our pension plans which may impair our liquidity or financial condition.We maintain certain defined benefit pension plans for certain employees, which impose funding obligations." **Prior (2022):** Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of John Deere's customers, either or both of which could negatively affect customer demand for John Deere equipment and customers' ability to repay obligations to John Deere. In response to increasing inflation, the U.S. Federal Reserve began to raise interest rates in March 2022 for the first time in over three years, and has signaled it expects to make additional rate increases. Rising interest rates could cause credit market dislocations, which could have an impact on funding costs, which are important to the financial services segment because such costs affect the segment's ability to offer customers competitive financing rates. While the Company strives to match the interest rate characteristics of its financial assets and liabilities, changing interest rates could have an adverse effect on the Company's net interest rate margin - the difference between the yield the Company earns on its assets and the interest rates the Company pays for funding, which could in turn affect the Company's net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for the Company and can increase the Company's cost of capital and hurt its competitive position. 19 19 19 Table of ContentsFurther, due to the cessation of the London Interbank Offered Rate ("LIBOR"), the Company has entered into financial transactions such as credit agreements, receivables, derivatives, and notes that use the Secured Overnight Financing Rate ("SOFR") or the Sterling Overnight Index Average ("SONIA") as interest rate benchmarks. SOFR and SONIA are calculated differently from LIBOR and have inherent differences, which could give rise to uncertainties, including the limited historical data and volatility in the benchmark rates. The full effects of the transition to SOFR, SONIA, or other rates remain uncertain.Because the financial services segment provides financing for a significant portion of John Deere's sales worldwide, negative economic conditions in the financial industry could materially impact John Deere's operations and financial results.Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of John Deere's sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed its expectations and adversely affect its financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support its financing activities could have a material adverse effect on John Deere's business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed its expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.MANUFACTURING AND OPERATIONAL RISKSChanges in the availability and price of certain raw materials, components, and whole goods have resulted and could continue to result in significant disruptions to the supply chain causing production disruptions, increased costs, and lower profits on sales of John Deere products.John Deere requires access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute its products. The price and availability of these materials have varied significantly in the last 24 months and are expected to continue to fluctuate due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if John Deere is unable to recover the increased costs due to market considerations or other factors. John Deere relies on suppliers to acquire raw materials, components, and whole goods required to manufacture its products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods has and could continue to adversely affect John Deere's ability to meet commitments to customers. During fiscal 2022, the supply chain challenges in combination with demand for John Deere's products resulted in a heavier back-end loaded year for industry retail orders. As the result of the COVID pandemic, geopolitical instability, and other global events, John Deere has experienced changes in the availability and prices of these raw materials, components, whole goods, and freight. Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, and railway and airfreight capacity, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased the Company's overall production and overhead costs. Increases in such costs have had an adverse effect on John Deere's business operations. In an effort to mitigate raw material shortages and supply chain constraints, John Deere has increased the list price of its products and worked with suppliers to ensure optimum inventory levels. However, if customers are unwilling to accept price increases in John Deere products or John Deere is unable to offset the increase in costs, raw material shortages could have an adverse effect on John Deere's operations. Continued or increased fluctuations in costs of materials or inflation generally and continued supply chain challenges could have a material adverse effect on the Company's results of operations and financial condition. Certain materials and components used in John Deere's products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. As discussed under Item 1, "Business - Construction and Forestry," the Company agreed to voluntarily terminate its joint venture agreement with Hitachi in a transaction that closed in the first half of fiscal 2022. In connection with this termination, John Deere Construction & Forestry Company, a wholly-owned subsidiary of the Company, has entered into a supply agreement with Hitachi pursuant to which Hitachi will continue to provide John Deere-branded excavators, components, and service parts. Any delay or failure by Hitachi to deliver these supplies, or failure by Hitachi to produce such supplies in a manner that meets John Deere's quality and quantity requirements, could adversely affect John Deere's business, results of operations, cash flow, and financial condition or its ability to meet commitments to its customers. 20 Table of Contents Table of Contents Table of Contents Further, due to the cessation of the London Interbank Offered Rate ("LIBOR"), the Company has entered into financial transactions such as credit agreements, receivables, derivatives, and notes that use the Secured Overnight Financing Rate ("SOFR") or the Sterling Overnight Index Average ("SONIA") as interest rate benchmarks. SOFR and SONIA are calculated differently from LIBOR and have inherent differences, which could give rise to uncertainties, including the limited historical data and volatility in the benchmark rates. The full effects of the transition to SOFR, SONIA, or other rates remain uncertain.Because the financial services segment provides financing for a significant portion of John Deere's sales worldwide, negative economic conditions in the financial industry could materially impact John Deere's operations and financial results.Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of John Deere's sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed its expectations and adversely affect its financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support its financing activities could have a material adverse effect on John Deere's business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed its expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.MANUFACTURING AND OPERATIONAL RISKSChanges in the availability and price of certain raw materials, components, and whole goods have resulted and could continue to result in significant disruptions to the supply chain causing production disruptions, increased costs, and lower profits on sales of John Deere products.John Deere requires access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute its products. The price and availability of these materials have varied significantly in the last 24 months and are expected to continue to fluctuate due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if John Deere is unable to recover the increased costs due to market considerations or other factors. John Deere relies on suppliers to acquire raw materials, components, and whole goods required to manufacture its products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods has and could continue to adversely affect John Deere's ability to meet commitments to customers. During fiscal 2022, the supply chain challenges in combination with demand for John Deere's products resulted in a heavier back-end loaded year for industry retail orders. As the result of the COVID pandemic, geopolitical instability, and other global events, John Deere has experienced changes in the availability and prices of these raw materials, components, whole goods, and freight. Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, and railway and airfreight capacity, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased the Company's overall production and overhead costs. Increases in such costs have had an adverse effect on John Deere's business operations. In an effort to mitigate raw material shortages and supply chain constraints, John Deere has increased the list price of its products and worked with suppliers to ensure optimum inventory levels. However, if customers are unwilling to accept price increases in John Deere products or John Deere is unable to offset the increase in costs, raw material shortages could have an adverse effect on John Deere's operations. Continued or increased fluctuations in costs of materials or inflation generally and continued supply chain challenges could have a material adverse effect on the Company's results of operations and financial condition. Certain materials and components used in John Deere's products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. As discussed under Item 1, "Business - Construction and Forestry," the Company agreed to voluntarily terminate its joint venture agreement with Hitachi in a transaction that closed in the first half of fiscal 2022. In connection with this termination, John Deere Construction & Forestry Company, a wholly-owned subsidiary of the Company, has entered into a supply agreement with Hitachi pursuant to which Hitachi will continue to provide John Deere-branded excavators, components, and service parts. Any delay or failure by Hitachi to deliver these supplies, or failure by Hitachi to produce such supplies in a manner that meets John Deere's quality and quantity requirements, could adversely affect John Deere's business, results of operations, cash flow, and financial condition or its ability to meet commitments to its customers. Further, due to the cessation of the London Interbank Offered Rate ("LIBOR"), the Company has entered into financial transactions such as credit agreements, receivables, derivatives, and notes that use the Secured Overnight Financing Rate ("SOFR") or the Sterling Overnight Index Average ("SONIA") as interest rate benchmarks. SOFR and SONIA are calculated differently from LIBOR and have inherent differences, which could give rise to uncertainties, including the limited historical data and volatility in the benchmark rates. The full effects of the transition to SOFR, SONIA, or other rates remain uncertain. **Current (2023):** Central bank policy interest rates continued to increase in fiscal year 2023. Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our equipment and customers' ability to repay their obligations to us. Rising interest rates may cause credit market 19 19 19 Table of Contentsdislocations, that can impact funding costs, which can affect the financial services segment's ability to offer customers competitive financing rates. While we strive to match the interest rate characteristics of our financial assets and liabilities, changing interest rates have had an adverse effect on our net interest rate margin - the difference between the yield we earn on our assets and the interest rates we pay for funding, which has affected our net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for us and can increase our costs of capital and hurt our competitive position.Because the financial services segment provides financing for a significant portion of our sales worldwide, negative economic conditions in the financial industry could materially impact our operations and financial results.Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of our sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed our expectations and adversely affect our financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support our financing activities could have a material adverse effect on our business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.We may sustain increases in funding obligations under our pension plans which may impair our liquidity or financial condition.We maintain certain defined benefit pension plans for certain employees, which impose funding obligations. We use various assumptions in calculating our future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. Regulatory changes could cause a deterioration in the statutory funded status of our plans. We may be required to make significant contributions to our pension plans in the future. These factors could significantly increase our payment obligations under the plans and adversely affect our business, results of operations, and financial condition.MANUFACTURING AND OPERATIONAL RISKSWe may be unable to accurately forecast customer demand for products and services, and to adequately manage inventory, which could adversely affect our operating results.To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In fiscal year 2022, supply chain disruptions resulted in higher inventory levels. Although production schedules in fiscal year 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns, our ability to accurately forecast demand in the future could be affected by many factors, including changes in customer demand for our products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, we may experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies.Changes in the availability and price of certain raw materials, components, and whole goods have resulted and could continue to result in disruptions to the supply chain causing production disruptions, increased costs, and lower profits on sales of our products.We require access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute our products. The price and availability of these materials have varied significantly in the last 36 months. For example, in fiscal year 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels. We experienced supply chain improvements in fiscal year 2023 with a return to normal in the second half of the fiscal year. While we have seen stabilization in the supply chain and some commodity pricing improvements, we anticipate potential fluctuations due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if we are unable to recover the increased costs due to market considerations or other ​20 Table of Contents Table of Contents Table of Contents dislocations, that can impact funding costs, which can affect the financial services segment's ability to offer customers competitive financing rates. While we strive to match the interest rate characteristics of our financial assets and liabilities, changing interest rates have had an adverse effect on our net interest rate margin - the difference between the yield we earn on our assets and the interest rates we pay for funding, which has affected our net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for us and can increase our costs of capital and hurt our competitive position.Because the financial services segment provides financing for a significant portion of our sales worldwide, negative economic conditions in the financial industry could materially impact our operations and financial results.Negative economic conditions could have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of our sales worldwide. The financial services segment is exposed to the risk that customers and others will default on contractual obligations and may experience credit losses that exceed our expectations and adversely affect our financial condition and results of operations. The financial services segment's inability to access funds at cost-effective rates to support our financing activities could have a material adverse effect on our business. The financial services segment's liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. Additionally, negative market conditions could reduce customer confidence levels, resulting in declines in credit applications and increases in delinquencies and default rates, which could materially impact the financial services segment's write-offs and provision for credit losses. The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.We may sustain increases in funding obligations under our pension plans which may impair our liquidity or financial condition.We maintain certain defined benefit pension plans for certain employees, which impose funding obligations. We use various assumptions in calculating our future payment obligations under these plans. Significant adverse changes in credit or market conditions could result in actual rates of return on pension investments being lower than expected. Regulatory changes could cause a deterioration in the statutory funded status of our plans. We may be required to make significant contributions to our pension plans in the future. These factors could significantly increase our payment obligations under the plans and adversely affect our business, results of operations, and financial condition.MANUFACTURING AND OPERATIONAL RISKSWe may be unable to accurately forecast customer demand for products and services, and to adequately manage inventory, which could adversely affect our operating results.To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for products and services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, manufacturing delays, increased costs, or excess inventory. In fiscal year 2022, supply chain disruptions resulted in higher inventory levels. Although production schedules in fiscal year 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns, our ability to accurately forecast demand in the future could be affected by many factors, including changes in customer demand for our products and services, changes in demand for the products and services of competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, we may experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies.Changes in the availability and price of certain raw materials, components, and whole goods have resulted and could continue to result in disruptions to the supply chain causing production disruptions, increased costs, and lower profits on sales of our products.We require access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute our products. The price and availability of these materials have varied significantly in the last 36 months. For example, in fiscal year 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels. We experienced supply chain improvements in fiscal year 2023 with a return to normal in the second half of the fiscal year. While we have seen stabilization in the supply chain and some commodity pricing improvements, we anticipate potential fluctuations due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if we are unable to recover the increased costs due to market considerations or other ​ dislocations, that can impact funding costs, which can affect the financial services segment's ability to offer customers competitive financing rates. While we strive to match the interest rate characteristics of our financial assets and liabilities, changing interest rates have had an adverse effect on our net interest rate margin - the difference between the yield we earn on our assets and the interest rates we pay for funding, which has affected our net interest income and earnings. In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for us and can increase our costs of capital and hurt our competitive position. --- ## Modified: Costs and Expenses **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 37,739 ​ ​ 35,341 ​ ​ 29,119 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (24) ​ ​ (3) ​ ​ (3) ​ ​ 37,715 ​ ​ 35,338 ​ ​ 29,116 ​ 4​ ​ Research and development expenses ​ ​ 2,177 ​ ​ 1,912 ​ ​ 1,587 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,177 ​ ​ 1,912 ​ ​ 1,587 ​ ​ ​ Selling, administrative and general expenses ​ ​ 3,611 ​ ​ 3,137 ​ ​ 2,887 ​ ​ 994 ​ ​ 735 ​ ​ 504 ​ ​ (10) ​ ​ (9) ​ ​ (8) ​ ​ 4,595 ​ ​ 3,863 ​ ​ 3,383 ​ 4​ ​ Interest expense ​ ​ 411 ​ ​ 390 ​ ​ 368 ​ ​ 2,362 ​ ​ 799 ​ ​ 687 ​ ​ (320) ​ ​ (127) ​ ​ (62) ​ ​ 2,453 ​ ​ 1,062 ​ ​ 993 ​ 1​ ​ Interest compensation to Financial Services ​ ​ 687 ​ ​ 299 ​ ​ 217 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (687) ​ ​ (299) ​ ​ (217) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1​ ​ Other operating expenses ​ ​ 217 ​ ​ 350 ​ ​ 181 ​ ​ 1,396 ​ ​ 1,386 ​ ​ 1,453 ​ ​ (321) ​ ​ (461) ​ ​ (291) ​ ​ 1,292 ​ ​ 1,275 ​ ​ 1,343 ​ 5, 6​ ​ Total ​ ​ 44,842 ​ ​ 41,429 ​ ​ 34,359 ​ ​ 4,752 ​ ​ 2,920 ​ ​ 2,644 ​ ​ (1,362) ​ ​ (899) ​ ​ (581) ​ ​ 48,232 ​ ​ 43,450 ​ ​ 36,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 35,341 ​ ​ 29,119 ​ ​ 23,679 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3) ​ ​ (3) ​ ​ (2) ​ ​ 35,338 ​ ​ 29,116 ​ ​ 23,677 ​ 4​ ​ Research and development expenses ​ ​ 1,912 ​ ​ 1,587 ​ ​ 1,644 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,912 ​ ​ 1,587 ​ ​ 1,644 ​ ​ ​ Selling, administrative and general expenses ​ ​ 3,137 ​ ​ 2,887 ​ ​ 2,878 ​ ​ 735 ​ ​ 504 ​ ​ 606 ​ ​ (9) ​ ​ (8) ​ ​ (7) ​ ​ 3,863 ​ ​ 3,383 ​ ​ 3,477 ​ 4​ ​ Interest expense ​ ​ 390 ​ ​ 368 ​ ​ 329 ​ ​ 799 ​ ​ 687 ​ ​ 942 ​ ​ (127) ​ ​ (62) ​ ​ (24) ​ ​ 1,062 ​ ​ 993 ​ ​ 1,247 ​ 5​ ​ Interest compensation to Financial Services ​ ​ 299 ​ ​ 217 ​ ​ 248 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (299) ​ ​ (217) ​ ​ (248) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5​ ​ Other operating expenses ​ ​ 350 ​ ​ 181 ​ ​ 278 ​ ​ 1,386 ​ ​ 1,453 ​ ​ 1,572 ​ ​ (461) ​ ​ (291) ​ ​ (238) ​ ​ 1,275 ​ ​ 1,343 ​ ​ 1,612 ​ 6, 7​ ​ Total ​ ​ 41,429 ​ ​ 34,359 ​ ​ 29,056 ​ ​ 2,920 ​ ​ 2,644 ​ ​ 3,120 ​ ​ (899) ​ ​ (581) ​ ​ (519) ​ ​ 43,450 ​ ​ 36,422 ​ ​ 31,657 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 37,739 ​ ​ 35,341 ​ ​ 29,119 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (24) ​ ​ (3) ​ ​ (3) ​ ​ 37,715 ​ ​ 35,338 ​ ​ 29,116 ​ 4​ ​ Research and development expenses ​ ​ 2,177 ​ ​ 1,912 ​ ​ 1,587 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,177 ​ ​ 1,912 ​ ​ 1,587 ​ ​ ​ Selling, administrative and general expenses ​ ​ 3,611 ​ ​ 3,137 ​ ​ 2,887 ​ ​ 994 ​ ​ 735 ​ ​ 504 ​ ​ (10) ​ ​ (9) ​ ​ (8) ​ ​ 4,595 ​ ​ 3,863 ​ ​ 3,383 ​ 4​ ​ Interest expense ​ ​ 411 ​ ​ 390 ​ ​ 368 ​ ​ 2,362 ​ ​ 799 ​ ​ 687 ​ ​ (320) ​ ​ (127) ​ ​ (62) ​ ​ 2,453 ​ ​ 1,062 ​ ​ 993 ​ 1​ ​ Interest compensation to Financial Services ​ ​ 687 ​ ​ 299 ​ ​ 217 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (687) ​ ​ (299) ​ ​ (217) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1​ ​ Other operating expenses ​ ​ 217 ​ ​ 350 ​ ​ 181 ​ ​ 1,396 ​ ​ 1,386 ​ ​ 1,453 ​ ​ (321) ​ ​ (461) ​ ​ (291) ​ ​ 1,292 ​ ​ 1,275 ​ ​ 1,343 ​ 5, 6​ ​ Total ​ ​ 44,842 ​ ​ 41,429 ​ ​ 34,359 ​ ​ 4,752 ​ ​ 2,920 ​ ​ 2,644 ​ ​ (1,362) ​ ​ (899) ​ ​ (581) ​ ​ 48,232 ​ ​ 43,450 ​ ​ 36,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Legal proceedings and disputes in which we are, and may in the future be, involved could harm our business, financial condition, reputation, and brand. **Key changes:** - Reworded sentence: "We routinely are a party to claims and legal actions incidental to our business." **Prior (2022):** John Deere is subject to a variety of legal proceedings and legal compliance risks around the world. John Deere faces risks of exposure to various types of claims, lawsuits, and government inquires or investigations in the ordinary course of business. The uncertainty associated with substantial unresolved claims and lawsuits may harm John Deere's business, financial condition, reputation, and brand. The defense of lawsuits and government inquiries or investigations has resulted and may result in the expenditures of significant financial resources and the diversion of management's time and attention away from business operations. Such legal proceedings may also affect our assessment and estimates of loss contingencies recorded as a reserve and require us to make payments exceeding our reserves. In addition to the ordinary course of business proceedings, John Deere is currently subject to a series of antitrust class action lawsuits alleging that it is unlawfully monopolizing the market for repair services for its agricultural equipment. If these lawsuits result in adverse findings for John Deere, we could be exposed to damages and may be required to implement actions impacting our business model. **Current (2023):** We routinely are a party to claims and legal actions incidental to our business. These include claims for personal injury or property by users of our equipment, environmental, health, and safety claims, disputes with distributors, vendors and others with respect to commercial matters, and disputes with taxing and other governmental authorities regarding the conduct of our business. The defense of lawsuits and government inquiries or investigations has resulted and may result in expenditures of significant financial resources and the diversion of management's time and attention away from business operations. We are currently subject to a consolidated multidistrict class action lawsuit in the Northern District of Illinois alleging that we have engaged in attempted monopolization, exclusionary conduct, and restraint of the market for repair services for John Deere brand agricultural equipment by limiting repair resources only to our authorized technicians or independent authorized John Deere dealers. In addition, the Federal Trade Commission (FTC) is investigating whether we have violated laws in connection with the repair of John Deere brand agriculture equipment, as well as our information security practices and statements as they relate to the risk of unauthorized access to our computer systems, products, and services. We are fully cooperating with the FTC. We are currently unable to predict the outcome of these matters. The development and resolution of these matters could have a material adverse effect on our business, operations, and financial results. --- ## Modified: Changes in the availability and price of certain raw materials, components, and whole goods have resulted and could continue to result in disruptions to the supply chain causing production disruptions, increased costs, and lower profits on sales of our products. **Key changes:** - Reworded sentence: "We require access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute our products." **Prior (2022):** John Deere requires access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute its products. The price and availability of these materials have varied significantly in the last 24 months and are expected to continue to fluctuate due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if John Deere is unable to recover the increased costs due to market considerations or other factors. John Deere relies on suppliers to acquire raw materials, components, and whole goods required to manufacture its products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods has and could continue to adversely affect John Deere's ability to meet commitments to customers. During fiscal 2022, the supply chain challenges in combination with demand for John Deere's products resulted in a heavier back-end loaded year for industry retail orders. As the result of the COVID pandemic, geopolitical instability, and other global events, John Deere has experienced changes in the availability and prices of these raw materials, components, whole goods, and freight. Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, and railway and airfreight capacity, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased the Company's overall production and overhead costs. Increases in such costs have had an adverse effect on John Deere's business operations. In an effort to mitigate raw material shortages and supply chain constraints, John Deere has increased the list price of its products and worked with suppliers to ensure optimum inventory levels. However, if customers are unwilling to accept price increases in John Deere products or John Deere is unable to offset the increase in costs, raw material shortages could have an adverse effect on John Deere's operations. Continued or increased fluctuations in costs of materials or inflation generally and continued supply chain challenges could have a material adverse effect on the Company's results of operations and financial condition. Certain materials and components used in John Deere's products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. As discussed under Item 1, "Business - Construction and Forestry," the Company agreed to voluntarily terminate its joint venture agreement with Hitachi in a transaction that closed in the first half of fiscal 2022. In connection with this termination, John Deere Construction & Forestry Company, a wholly-owned subsidiary of the Company, has entered into a supply agreement with Hitachi pursuant to which Hitachi will continue to provide John Deere-branded excavators, components, and service parts. Any delay or failure by Hitachi to deliver these supplies, or failure by Hitachi to produce such supplies in a manner that meets John Deere's quality and quantity requirements, could adversely affect John Deere's business, results of operations, cash flow, and financial condition or its ability to meet commitments to its customers. 20 20 20 Table of ContentsDisputes with labor unions have adversely affected John Deere's ability to operate its facilities as well as its financial results. Many of John Deere's production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. The failure of John Deere to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. Disruptions to John Deere's manufacturing and parts-distribution facilities, through various forms of labor disputes, adversely affect the Company. On October 14, 2021, the UAW initiated a labor strike affecting more than 10,000 workers at 14 John Deere facilities across the U.S. The strike ended after a new collective bargaining agreement was approved on November 17, 2021. The UAW strike had an adverse effect on John Deere's results of operations in the first quarter of fiscal 2022 because of reduced production and shipments. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect John Deere's reputation, and could materially adversely affect the Company's business, results of operations, and financial condition.RESOURCES RISKS John Deere's ability to attract, develop, engage, and retain qualified employees could affect its ability to execute its strategy. John Deere's continued success depends, in part, on its ability to identify and attract qualified candidates with the requisite education, background, and experience as well as its ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair John Deere's ability to execute its business strategy and could adversely affect John Deere's business. In addition, while John Deere strives to reduce the impact of the departure of employees, John Deere's operations or ability to execute its business strategy and meet its business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those John Deere could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect John Deere through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. Security breaches and other disruptions to John Deere's information technology infrastructure could interfere with John Deere's operations and could compromise the information of John Deere as well as its customers, suppliers, and/or dealers, exposing John Deere to liability that could cause John Deere's business and reputation to suffer.In the ordinary course of business, John Deere relies upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of John Deere equipment and from customers of the financial services segment. John Deere uses information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, John Deere collects and stores sensitive data, including intellectual property, proprietary business information, and the proprietary business information of John Deere's customers, suppliers, and dealers, as well as personally identifiable information of John Deere's customers and employees, in data centers, which are often owned by third parties, and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to John Deere's business operations and strategy. Despite security measures, including a vulnerability disclosure program, and business continuity plans, John Deere's information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employee, supplier, or dealer error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although John Deere has not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise John Deere's networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption to John Deere's operations, and damage to John Deere's reputation, which could adversely affect John Deere's business, results of operations, and financial condition. In addition, as security threats continue to evolve and increase in frequency and sophistication, John Deere may need to invest additional resources to protect information security.Security breaches with respect to John Deere's products could interfere with the business of John Deere, its dealers, and/or customers, exposing John Deere to liability that would cause its business and reputation to suffer.Some of John Deere's products include connectivity hardware and software typically used for remote system updates. While John Deere has implemented security measures intended to protect against unauthorized remote access to its products, third party security 21 Table of Contents Table of Contents Table of Contents Disputes with labor unions have adversely affected John Deere's ability to operate its facilities as well as its financial results. Many of John Deere's production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. The failure of John Deere to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. Disruptions to John Deere's manufacturing and parts-distribution facilities, through various forms of labor disputes, adversely affect the Company. On October 14, 2021, the UAW initiated a labor strike affecting more than 10,000 workers at 14 John Deere facilities across the U.S. The strike ended after a new collective bargaining agreement was approved on November 17, 2021. The UAW strike had an adverse effect on John Deere's results of operations in the first quarter of fiscal 2022 because of reduced production and shipments. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect John Deere's reputation, and could materially adversely affect the Company's business, results of operations, and financial condition.RESOURCES RISKS John Deere's ability to attract, develop, engage, and retain qualified employees could affect its ability to execute its strategy. John Deere's continued success depends, in part, on its ability to identify and attract qualified candidates with the requisite education, background, and experience as well as its ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair John Deere's ability to execute its business strategy and could adversely affect John Deere's business. In addition, while John Deere strives to reduce the impact of the departure of employees, John Deere's operations or ability to execute its business strategy and meet its business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those John Deere could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect John Deere through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. Security breaches and other disruptions to John Deere's information technology infrastructure could interfere with John Deere's operations and could compromise the information of John Deere as well as its customers, suppliers, and/or dealers, exposing John Deere to liability that could cause John Deere's business and reputation to suffer.In the ordinary course of business, John Deere relies upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of John Deere equipment and from customers of the financial services segment. John Deere uses information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Additionally, John Deere collects and stores sensitive data, including intellectual property, proprietary business information, and the proprietary business information of John Deere's customers, suppliers, and dealers, as well as personally identifiable information of John Deere's customers and employees, in data centers, which are often owned by third parties, and on information technology networks. The secure operation of these information technology networks and the processing and maintenance of this information is critical to John Deere's business operations and strategy. Despite security measures, including a vulnerability disclosure program, and business continuity plans, John Deere's information technology networks and infrastructure have been and may be vulnerable to intrusion, damage, disruptions, or shutdowns due to attacks by cyber criminals, employee, supplier, or dealer error or malfeasance, supply chain compromise, disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, ransomware or other malware, telecommunication or utility failures, terrorist acts, natural disasters, or other events. Although John Deere has not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been the target of malicious cyber threat actors. The occurrence of any significant event could compromise John Deere's networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, disclosure, alteration, misuse or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption to John Deere's operations, and damage to John Deere's reputation, which could adversely affect John Deere's business, results of operations, and financial condition. In addition, as security threats continue to evolve and increase in frequency and sophistication, John Deere may need to invest additional resources to protect information security.Security breaches with respect to John Deere's products could interfere with the business of John Deere, its dealers, and/or customers, exposing John Deere to liability that would cause its business and reputation to suffer.Some of John Deere's products include connectivity hardware and software typically used for remote system updates. While John Deere has implemented security measures intended to protect against unauthorized remote access to its products, third party security **Current (2023):** We require access to various raw materials, components, and whole goods at competitive prices to manufacture and distribute our products. The price and availability of these materials have varied significantly in the last 36 months. For example, in fiscal year 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels. We experienced supply chain improvements in fiscal year 2023 with a return to normal in the second half of the fiscal year. While we have seen stabilization in the supply chain and some commodity pricing improvements, we anticipate potential fluctuations due to inflation, geopolitical and economic uncertainty, and regulatory and policy instability, including import tariffs and trade agreements. The latter have the potential to significantly increase production and logistics costs and have a material negative effect on the profitability of the business, particularly if we are unable to recover the increased costs due to market considerations or other ​ 20 20 20 Table of Contentsfactors. We have experienced changes in the availability and prices of these raw materials, components, whole goods, and freight over the past several years, especially in fiscal years 2021 and 2022.Global logistics network challenges resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased our overall production and overhead costs. Increases in such costs have had an adverse effect on our business operations.We rely on our suppliers to acquire the raw materials, components, and whole goods required to manufacture their products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods have and could continue to adversely affect our ability to meet commitments to our customers. In addition, certain materials and components used in our products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. Furthermore, if our customers are unwilling to accept price increases for our products, or if we are unable to offset the increases in costs, raw material costs or shortages could have a material adverse effect on our operational or financial results. Disputes with labor unions may adversely affect our ability to operate in our facilities as well as impact our financial results. Many of our production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. Our failure to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. For example, the UAW initiated a labor strike that had an adverse effect on our results of operations in fiscal 2022 because of reduced productions and shipments. Certain of our labor agreements expire as early as 2024. Disruptions to our manufacturing and parts-distribution facilities through various forms of labor disputes could adversely affect us. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect our reputation, and could materially adversely affect our business, results of operations, and financial condition. Our business may suffer if our equipment fails to perform as expected.If our equipment does not perform as expected, we may receive warranty claims and have to perform post-sales repairs or recalls. We may also be subject to regulatory requirements and penalties that will impact our ability to develop, market, and sell equipment. This may result in product delivery delays. It could also lead to product liability, breach of warranty, and consumer protection claims. These claims and warranty expenses could be significant. As a manufacturer of equipment, we must manage the cost and risk associated with product warranties, post-sale repairs and recalls, regulatory penalties, and product liability, breach of warranty, and consumer protection claims with respect to our products. In addition to post-sale repairs or recalls initiated by us for various reasons, investigations into our products by government regulators may compel us to initiate product recalls or may result in negative public perceptions about the safety of our products, even if we disagree with the regulator's determination. Such post-sale repairs or recalls, whether voluntary or involuntary, could result in significant expense, supply chain complications, and may harm our brand, business, prospects, financial condition, and operating results.RESOURCES RISKS Our ability to attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy.Our continued success depends, in part, on our ability to identify and attract qualified candidates with the requisite education, background, and experience as well as our ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair our ability to execute our business strategy and could adversely affect our business, results of operations, and financial condition. In addition, while we strive to reduce the impact of the departure of employees, our operations or ability to execute our business strategy and meet our business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those we could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect us through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. Security breaches and other disruptions to our information technology infrastructure could interfere with our operations and could compromise our information as well as information of our employees, customers, suppliers, and/or dealers, exposing us to liability that could cause our business and reputation to suffer.In the ordinary course of business, we rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of our equipment and from customers of the financial services segment. We use information technology systems to record, process, and 21 Table of Contents Table of Contents Table of Contents factors. We have experienced changes in the availability and prices of these raw materials, components, whole goods, and freight over the past several years, especially in fiscal years 2021 and 2022.Global logistics network challenges resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased our overall production and overhead costs. Increases in such costs have had an adverse effect on our business operations.We rely on our suppliers to acquire the raw materials, components, and whole goods required to manufacture their products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods have and could continue to adversely affect our ability to meet commitments to our customers. In addition, certain materials and components used in our products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. Furthermore, if our customers are unwilling to accept price increases for our products, or if we are unable to offset the increases in costs, raw material costs or shortages could have a material adverse effect on our operational or financial results. Disputes with labor unions may adversely affect our ability to operate in our facilities as well as impact our financial results. Many of our production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. Our failure to successfully renegotiate labor agreements as they expire has from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. For example, the UAW initiated a labor strike that had an adverse effect on our results of operations in fiscal 2022 because of reduced productions and shipments. Certain of our labor agreements expire as early as 2024. Disruptions to our manufacturing and parts-distribution facilities through various forms of labor disputes could adversely affect us. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect our reputation, and could materially adversely affect our business, results of operations, and financial condition. Our business may suffer if our equipment fails to perform as expected.If our equipment does not perform as expected, we may receive warranty claims and have to perform post-sales repairs or recalls. We may also be subject to regulatory requirements and penalties that will impact our ability to develop, market, and sell equipment. This may result in product delivery delays. It could also lead to product liability, breach of warranty, and consumer protection claims. These claims and warranty expenses could be significant. As a manufacturer of equipment, we must manage the cost and risk associated with product warranties, post-sale repairs and recalls, regulatory penalties, and product liability, breach of warranty, and consumer protection claims with respect to our products. In addition to post-sale repairs or recalls initiated by us for various reasons, investigations into our products by government regulators may compel us to initiate product recalls or may result in negative public perceptions about the safety of our products, even if we disagree with the regulator's determination. Such post-sale repairs or recalls, whether voluntary or involuntary, could result in significant expense, supply chain complications, and may harm our brand, business, prospects, financial condition, and operating results.RESOURCES RISKS Our ability to attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy.Our continued success depends, in part, on our ability to identify and attract qualified candidates with the requisite education, background, and experience as well as our ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, could impair our ability to execute our business strategy and could adversely affect our business, results of operations, and financial condition. In addition, while we strive to reduce the impact of the departure of employees, our operations or ability to execute our business strategy and meet our business objectives may be affected by the loss of employees, particularly when departures involve larger numbers of employees, such as those we could experience if a surge occurs in the number of employees voluntarily leaving their jobs. Higher rates of employee separations may adversely affect us through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to recruiting and onboarding new employees. Security breaches and other disruptions to our information technology infrastructure could interfere with our operations and could compromise our information as well as information of our employees, customers, suppliers, and/or dealers, exposing us to liability that could cause our business and reputation to suffer.In the ordinary course of business, we rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including supply chain, manufacturing, distribution, invoicing, and collection of payments from dealers and other purchasers of our equipment and from customers of the financial services segment. We use information technology systems to record, process, and factors. We have experienced changes in the availability and prices of these raw materials, components, whole goods, and freight over the past several years, especially in fiscal years 2021 and 2022.Global logistics network challenges resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which increased our overall production and overhead costs. Increases in such costs have had an adverse effect on our business operations. We rely on our suppliers to acquire the raw materials, components, and whole goods required to manufacture their products. Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods have and could continue to adversely affect our ability to meet commitments to our customers. In addition, certain materials and components used in our products are acquired from a single supplier or are proprietary in nature and cannot be alternatively sourced expeditiously. Furthermore, if our customers are unwilling to accept price increases for our products, or if we are unable to offset the increases in costs, raw material costs or shortages could have a material adverse effect on our operational or financial results. --- ## Modified: Property and Equipment **Key changes:** - Reworded sentence: "33 33 33 Table of Contents​Borrowings●Borrowings increased corresponding with the level of the financing receivable and lease portfolios." - Reworded sentence: "These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year." - Reworded sentence: "These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year." - Reworded sentence: "These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year." **Prior (2022):** The company has access to most global markets at a reasonable cost. Sources of liquidity for the company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels. As a result, the company may not experience typical seasonal reduction in inventory during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. 31 31 31 Table of Contents​Key metrics are provided in the following table, in millions of dollars:​​​​​​​​​​​​​​2022​2021​2020​Cash, cash equivalents, and marketable securities​$ 5,508​$ 8,745​$ 7,707​​​​​​​​​​​​Trade accounts and notes receivable - net​​ 6,410​​ 4,208​​ 4,171​Ratio to prior 12 month's net sales​​13%​​11%​​13%​​​​​​​​​​​​Inventories​​ 8,495​​ 6,781​​ 4,999​Ratio to prior 12 month's cost of sales​​24%​​23%​​21%​​​​​​​​​​​​Unused credit lines​​ 3,284​​ 5,770​​ 6,801​​​​​​​​​​​​Financial Services:​​​​​​​​​​Ratio of interest-bearing debt to stockholder's equity​​8.5 to 1​​7.8 to 1​​7.8 to 1​​Due to the uncertainties around the COVID-19 pandemic, the company temporarily increased its cash, cash equivalents, and marketable securities balance beginning in March 2020. The cash balance decrease in 2022 was driven by working capital requirements. The reduction in unused credit lines in 2022 compared to both prior periods relates to an increase in commercial paper outstanding to fund growth in the receivable portfolio. The company forecasts higher operating cash flows in 2023 as identified previously in Trends and Economic Conditions. Cash Flows​​​​​​​​​​​​​​2022​2021​2020​Net cash provided by operating activities​$ 4,699​$ 7,726​$ 7,483​Net cash used for investing activities​​ (8,485)​​ (5,750)​​ (3,319)​Net cash provided by (used for) financing activities​​ 826​​ (1,078)​​ (980)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ (224)​​ 55​​ 32​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ (3,184)​$ 953​$ 3,216​​Positive cash flows from consolidated operating activities in 2022 were $4,699 million. This resulted from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, and a $1,000 million voluntary contribution to a U.S. other postretirement benefit (OPEB) plan. Cash outflows from investing activities were $8,485 million in 2022. The primary drivers were growth in the retail customer receivable and lease portfolios; purchases of property and equipment; a change in collateral on derivatives - net; and acquisitions of businesses, net of cash acquired. Cash inflows from financing activities were $826 million in 2022, due to an increase in borrowings, partially offset by repurchases of common stock and dividends paid. Cash, cash equivalents, and restricted cash decreased $3,184 million during 2022. Cash and Marketable Securities Held by Foreign Subsidiaries - The amount of the total cash and cash equivalents and marketable securities held by foreign subsidiaries was $3,379 million at October 30, 2022 and $5,817 million at October 31, 2021. During 2022, the company's foreign subsidiaries returned $5,643 million of cash and cash equivalents to the U.S. Distributions of profits from foreign subsidiaries are not expected to cause a significant incremental U.S. tax impact. However, these distributions may be subject to withholding taxes outside the U.S.Trade Accounts and Notes Receivable - Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $2,202 million in 2022. The collection period for trade receivables averages less than 12 months. The percentage of trade receivables outstanding for a period exceeding 12 months was 1 percent at each of October 30, 2022 and October 31, 2021.Financing Receivables and Equipment on Operating Leases - Financing receivables and 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 by $3,747 million in 2022, compared with 2021. Total acquisition volumes of financing receivables and equipment on operating leases were 7 percent higher in 2022 compared with the same period last year, as volumes of revolving charge accounts, operating leases, wholesale notes, and retail notes increased primarily due to higher sales by the company, while volumes of finance leases decreased. Inventories - Inventories increased by $1,714 million in 2022 due to higher production schedules and supply chain disruptions. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to fiscal year cost of sales were 31 percent at each of October 30, 2022 and October 31, 2021.Property and Equipment - Property and equipment cash expenditures in 2022 were $1,134 million, compared with $848 million in 2021. Borrowings - Total external borrowings increased by $3,487 million in 2022, corresponding with the level of the receivable and the lease portfolio, as well as the level of cash and cash equivalents. 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 12). At October 30, 2022, $948 million of short-term 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. The agreement was renewed in November 2022 with an expiration in November 2023 and a capacity of $1,500 million.During 2022, the company issued $4,085 million and retired $2,965 million of retail note securitization borrowings, which are presented in "Increase (decrease) in total short-term borrowings" on the statements of consolidated cash flows. 32 Table of Contents​ Table of Contents Table of Contents ​ Key metrics are provided in the following table, in millions of dollars:​​​​​​​​​​​​​​2022​2021​2020​Cash, cash equivalents, and marketable securities​$ 5,508​$ 8,745​$ 7,707​​​​​​​​​​​​Trade accounts and notes receivable - net​​ 6,410​​ 4,208​​ 4,171​Ratio to prior 12 month's net sales​​13%​​11%​​13%​​​​​​​​​​​​Inventories​​ 8,495​​ 6,781​​ 4,999​Ratio to prior 12 month's cost of sales​​24%​​23%​​21%​​​​​​​​​​​​Unused credit lines​​ 3,284​​ 5,770​​ 6,801​​​​​​​​​​​​Financial Services:​​​​​​​​​​Ratio of interest-bearing debt to stockholder's equity​​8.5 to 1​​7.8 to 1​​7.8 to 1​​Due to the uncertainties around the COVID-19 pandemic, the company temporarily increased its cash, cash equivalents, and marketable securities balance beginning in March 2020. The cash balance decrease in 2022 was driven by working capital requirements. The reduction in unused credit lines in 2022 compared to both prior periods relates to an increase in commercial paper outstanding to fund growth in the receivable portfolio. The company forecasts higher operating cash flows in 2023 as identified previously in Trends and Economic Conditions. Cash Flows​​​​​​​​​​​​​​2022​2021​2020​Net cash provided by operating activities​$ 4,699​$ 7,726​$ 7,483​Net cash used for investing activities​​ (8,485)​​ (5,750)​​ (3,319)​Net cash provided by (used for) financing activities​​ 826​​ (1,078)​​ (980)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ (224)​​ 55​​ 32​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ (3,184)​$ 953​$ 3,216​​Positive cash flows from consolidated operating activities in 2022 were $4,699 million. This resulted from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, and a $1,000 million voluntary contribution to a U.S. other postretirement benefit (OPEB) plan. Cash outflows from investing activities were $8,485 million in 2022. The primary drivers were growth in the retail customer receivable and lease portfolios; purchases of property and equipment; a change in collateral on derivatives - net; and acquisitions of businesses, net of cash acquired. Cash inflows from financing activities were $826 million in 2022, due to an increase in borrowings, partially offset by repurchases of common stock and dividends paid. Cash, cash equivalents, and restricted cash decreased $3,184 million during 2022. Cash and Marketable Securities Held by Foreign Subsidiaries - The amount of the total cash and cash equivalents and marketable securities held by foreign subsidiaries was $3,379 million at October 30, 2022 and $5,817 million at October 31, 2021. During 2022, the company's foreign subsidiaries returned $5,643 million of cash and cash equivalents to the U.S. Distributions of profits from foreign subsidiaries are not expected to cause a significant incremental U.S. tax impact. However, these distributions may be subject to withholding taxes outside the U.S.Trade Accounts and Notes Receivable - Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $2,202 million in 2022. The collection period for trade receivables averages less than 12 months. The percentage of trade receivables outstanding for a period exceeding 12 months was 1 percent at each of October 30, 2022 and October 31, 2021.Financing Receivables and Equipment on Operating Leases - Financing receivables and 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 by $3,747 million in 2022, compared with 2021. Total acquisition volumes of financing receivables and equipment on operating leases were 7 percent higher in 2022 compared with the same period last year, as volumes of revolving charge accounts, operating leases, wholesale notes, and retail notes increased primarily due to higher sales by the company, while volumes of finance leases decreased. Inventories - Inventories increased by $1,714 million in 2022 due to higher production schedules and supply chain disruptions. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to fiscal year cost of sales were 31 percent at each of October 30, 2022 and October 31, 2021.Property and Equipment - Property and equipment cash expenditures in 2022 were $1,134 million, compared with $848 million in 2021. Borrowings - Total external borrowings increased by $3,487 million in 2022, corresponding with the level of the receivable and the lease portfolio, as well as the level of cash and cash equivalents. 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 12). At October 30, 2022, $948 million of short-term 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. The agreement was renewed in November 2022 with an expiration in November 2023 and a capacity of $1,500 million.During 2022, the company issued $4,085 million and retired $2,965 million of retail note securitization borrowings, which are presented in "Increase (decrease) in total short-term borrowings" on the statements of consolidated cash flows. Key metrics are provided in the following table, in millions of dollars:​​​​​​​​​​​​​​2022​2021​2020​Cash, cash equivalents, and marketable securities​$ 5,508​$ 8,745​$ 7,707​​​​​​​​​​​​Trade accounts and notes receivable - net​​ 6,410​​ 4,208​​ 4,171​Ratio to prior 12 month's net sales​​13%​​11%​​13%​​​​​​​​​​​​Inventories​​ 8,495​​ 6,781​​ 4,999​Ratio to prior 12 month's cost of sales​​24%​​23%​​21%​​​​​​​​​​​​Unused credit lines​​ 3,284​​ 5,770​​ 6,801​​​​​​​​​​​​Financial Services:​​​​​​​​​​Ratio of interest-bearing debt to stockholder's equity​​8.5 to 1​​7.8 to 1​​7.8 to 1​​Due to the uncertainties around the COVID-19 pandemic, the company temporarily increased its cash, cash equivalents, and marketable securities balance beginning in March 2020. The cash balance decrease in 2022 was driven by working capital requirements. The reduction in unused credit lines in 2022 compared to both prior periods relates to an increase in commercial paper outstanding to fund growth in the receivable portfolio. The company forecasts higher operating cash flows in 2023 as identified previously in Trends and Economic Conditions. Cash Flows​​​​​​​​​​​​​​2022​2021​2020​Net cash provided by operating activities​$ 4,699​$ 7,726​$ 7,483​Net cash used for investing activities​​ (8,485)​​ (5,750)​​ (3,319)​Net cash provided by (used for) financing activities​​ 826​​ (1,078)​​ (980)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ (224)​​ 55​​ 32​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ (3,184)​$ 953​$ 3,216​​Positive cash flows from consolidated operating activities in 2022 were $4,699 million. This resulted from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, and a $1,000 million voluntary contribution to a U.S. other postretirement benefit (OPEB) plan. Cash outflows from investing activities were $8,485 million in 2022. The primary drivers were growth in the retail customer receivable and lease portfolios; purchases of property and equipment; a change in collateral on derivatives - net; and acquisitions of businesses, net of cash acquired. Cash inflows from financing activities were $826 million in 2022, due to an increase in borrowings, partially offset by repurchases of common stock and dividends paid. Cash, cash equivalents, and restricted cash decreased $3,184 million during 2022. Cash and Marketable Securities Held by Foreign Subsidiaries - The amount of the total cash and cash equivalents and marketable securities held by foreign subsidiaries was $3,379 million at October 30, 2022 and $5,817 million at October 31, 2021. During 2022, the company's foreign subsidiaries returned $5,643 million of cash and cash equivalents to the U.S. Distributions of profits from foreign subsidiaries are not expected to cause a significant incremental U.S. tax impact. However, these distributions may be subject to withholding taxes outside the U.S.Trade Accounts and Notes Receivable - Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $2,202 million in 2022. The collection period for trade receivables averages less than 12 months. The percentage of trade receivables outstanding for a period exceeding 12 months was 1 percent at each of October 30, 2022 and October 31, 2021.Financing Receivables and Equipment on Operating Leases - Financing receivables and 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 by $3,747 million in 2022, compared with 2021. Total acquisition volumes of financing receivables and equipment on operating leases were 7 percent higher in 2022 compared with the same period last year, as volumes of revolving charge accounts, operating leases, wholesale notes, and retail notes increased primarily due to higher sales by the company, while volumes of finance leases decreased. Inventories - Inventories increased by $1,714 million in 2022 due to higher production schedules and supply chain disruptions. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to fiscal year cost of sales were 31 percent at each of October 30, 2022 and October 31, 2021.Property and Equipment - Property and equipment cash expenditures in 2022 were $1,134 million, compared with $848 million in 2021. Borrowings - Total external borrowings increased by $3,487 million in 2022, corresponding with the level of the receivable and the lease portfolio, as well as the level of cash and cash equivalents. 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 12). At October 30, 2022, $948 million of short-term 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. The agreement was renewed in November 2022 with an expiration in November 2023 and a capacity of $1,500 million.During 2022, the company issued $4,085 million and retired $2,965 million of retail note securitization borrowings, which are presented in "Increase (decrease) in total short-term borrowings" on the statements of consolidated cash flows. Key metrics are provided in the following table, in millions of dollars:​​​​​​​​​​​​​​2022​2021​2020​Cash, cash equivalents, and marketable securities​$ 5,508​$ 8,745​$ 7,707​​​​​​​​​​​​Trade accounts and notes receivable - net​​ 6,410​​ 4,208​​ 4,171​Ratio to prior 12 month's net sales​​13%​​11%​​13%​​​​​​​​​​​​Inventories​​ 8,495​​ 6,781​​ 4,999​Ratio to prior 12 month's cost of sales​​24%​​23%​​21%​​​​​​​​​​​​Unused credit lines​​ 3,284​​ 5,770​​ 6,801​​​​​​​​​​​​Financial Services:​​​​​​​​​​Ratio of interest-bearing debt to stockholder's equity​​8.5 to 1​​7.8 to 1​​7.8 to 1​​Due to the uncertainties around the COVID-19 pandemic, the company temporarily increased its cash, cash equivalents, and marketable securities balance beginning in March 2020. The cash balance decrease in 2022 was driven by working capital requirements. The reduction in unused credit lines in 2022 compared to both prior periods relates to an increase in commercial paper outstanding to fund growth in the receivable portfolio. The company forecasts higher operating cash flows in 2023 as identified previously in Trends and Economic Conditions. Cash Flows​​​​​​​​​​​​​​2022​2021​2020​Net cash provided by operating activities​$ 4,699​$ 7,726​$ 7,483​Net cash used for investing activities​​ (8,485)​​ (5,750)​​ (3,319)​Net cash provided by (used for) financing activities​​ 826​​ (1,078)​​ (980)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ (224)​​ 55​​ 32​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ (3,184)​$ 953​$ 3,216​​Positive cash flows from consolidated operating activities in 2022 were $4,699 million. This resulted from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, and a $1,000 million voluntary contribution to a U.S. other postretirement benefit (OPEB) plan. Cash outflows from investing activities were $8,485 million in 2022. The primary drivers were growth in the retail customer receivable and lease portfolios; purchases of property and equipment; a change in collateral on derivatives - net; and acquisitions of businesses, net of cash acquired. Cash inflows from financing activities were $826 million in 2022, due to an increase in borrowings, partially offset by repurchases of common stock and dividends paid. Cash, cash equivalents, and restricted cash decreased $3,184 million during 2022. Cash and Marketable Securities Held by Foreign Subsidiaries - The amount of the total cash and cash equivalents and marketable securities held by foreign subsidiaries was $3,379 million at Key metrics are provided in the following table, in millions of dollars: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ Cash, cash equivalents, and marketable securities ​ $ 5,508 ​ $ 8,745 ​ $ 7,707 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts and notes receivable - net ​ ​ 6,410 ​ ​ 4,208 ​ ​ 4,171 ​ Ratio to prior 12 month's net sales ​ ​ 13% ​ ​ 11% ​ ​ 13% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories ​ ​ 8,495 ​ ​ 6,781 ​ ​ 4,999 ​ Ratio to prior 12 month's cost of sales ​ ​ 24% ​ ​ 23% ​ ​ 21% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unused credit lines ​ ​ 3,284 ​ ​ 5,770 ​ ​ 6,801 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Services: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of interest-bearing debt to stockholder's equity ​ ​ 8.5 to 1 ​ ​ 7.8 to 1 ​ ​ 7.8 to 1 ​ ​ Due to the uncertainties around the COVID-19 pandemic, the company temporarily increased its cash, cash equivalents, and marketable securities balance beginning in March 2020. The cash balance decrease in 2022 was driven by working capital requirements. The reduction in unused credit lines in 2022 compared to both prior periods relates to an increase in commercial paper outstanding to fund growth in the receivable portfolio. The company forecasts higher operating cash flows in 2023 as identified previously in Trends and Economic Conditions. Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ Net cash provided by operating activities ​ $ 4,699 ​ $ 7,726 ​ $ 7,483 ​ Net cash used for investing activities ​ ​ (8,485) ​ ​ (5,750) ​ ​ (3,319) ​ Net cash provided by (used for) financing activities ​ ​ 826 ​ ​ (1,078) ​ ​ (980) ​ Effect of exchange rate changes on cash, cash equivalents, and restricted cash ​ ​ (224) ​ ​ 55 ​ ​ 32 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ $ (3,184) ​ $ 953 ​ $ 3,216 ​ ​ Positive cash flows from consolidated operating activities in 2022 were $4,699 million. This resulted from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, and a $1,000 million voluntary contribution to a U.S. other postretirement benefit (OPEB) plan. Cash outflows from investing activities were $8,485 million in 2022. The primary drivers were growth in the retail customer receivable and lease portfolios; purchases of property and equipment; a change in collateral on derivatives - net; and acquisitions of businesses, net of cash acquired. Cash inflows from financing activities were $826 million in 2022, due to an increase in borrowings, partially offset by repurchases of common stock and dividends paid. Cash, cash equivalents, and restricted cash decreased $3,184 million during 2022. Cash and Marketable Securities Held by Foreign Subsidiaries - The amount of the total cash and cash equivalents and marketable securities held by foreign subsidiaries was $3,379 million at October 30, 2022 and $5,817 million at October 31, 2021. During 2022, the company's foreign subsidiaries returned $5,643 million of cash and cash equivalents to the U.S. Distributions of profits from foreign subsidiaries are not expected to cause a significant incremental U.S. tax impact. However, these distributions may be subject to withholding taxes outside the U.S.Trade Accounts and Notes Receivable - Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $2,202 million in 2022. The collection period for trade receivables averages less than 12 months. The percentage of trade receivables outstanding for a period exceeding 12 months was 1 percent at each of October 30, 2022 and October 31, 2021.Financing Receivables and Equipment on Operating Leases - Financing receivables and 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 by $3,747 million in 2022, compared with 2021. Total acquisition volumes of financing receivables and equipment on operating leases were 7 percent higher in 2022 compared with the same period last year, as volumes of revolving charge accounts, operating leases, wholesale notes, and retail notes increased primarily due to higher sales by the company, while volumes of finance leases decreased. Inventories - Inventories increased by $1,714 million in 2022 due to higher production schedules and supply chain disruptions. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to fiscal year cost of sales were 31 percent at each of October 30, 2022 and October 31, 2021.Property and Equipment - Property and equipment cash expenditures in 2022 were $1,134 million, compared with $848 million in 2021. Borrowings - Total external borrowings increased by $3,487 million in 2022, corresponding with the level of the receivable and the lease portfolio, as well as the level of cash and cash equivalents. 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 12). At October 30, 2022, $948 million of short-term 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. The agreement was renewed in November 2022 with an expiration in November 2023 and a capacity of $1,500 million.During 2022, the company issued $4,085 million and retired $2,965 million of retail note securitization borrowings, which are presented in "Increase (decrease) in total short-term borrowings" on the statements of consolidated cash flows. October 30, 2022 and $5,817 million at October 31, 2021. During 2022, the company's foreign subsidiaries returned $5,643 million of cash and cash equivalents to the U.S. Distributions of profits from foreign subsidiaries are not expected to cause a significant incremental U.S. tax impact. However, these distributions may be subject to withholding taxes outside the U.S. Trade Accounts and Notes Receivable - Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $2,202 million in 2022. The collection period for trade receivables averages less than 12 months. The percentage of trade receivables outstanding for a period exceeding 12 months was 1 percent at each of October 30, 2022 and October 31, 2021. Financing Receivables and Equipment on Operating Leases - Financing receivables and 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 by $3,747 million in 2022, compared with 2021. Total acquisition volumes of financing receivables and equipment on operating leases were 7 percent higher in 2022 compared with the same period last year, as volumes of revolving charge accounts, operating leases, wholesale notes, and retail notes increased primarily due to higher sales by the company, while volumes of finance leases decreased. Inventories - Inventories increased by $1,714 million in 2022 due to higher production schedules and supply chain disruptions. A majority of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 13), which approximates current cost, to fiscal year cost of sales were 31 percent at each of October 30, 2022 and October 31, 2021. Property and Equipment - Property and equipment cash expenditures in 2022 were $1,134 million, compared with $848 million in 2021. Borrowings - Total external borrowings increased by $3,487 million in 2022, corresponding with the level of the receivable and the lease portfolio, as well as the level of cash and cash equivalents. 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 12). At October 30, 2022, $948 million of short-term 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. The agreement was renewed in November 2022 with an expiration in November 2023 and a capacity of $1,500 million. During 2022, the company issued $4,085 million and retired $2,965 million of retail note securitization borrowings, which are presented in "Increase (decrease) in total short-term borrowings" on the statements of consolidated cash flows. 32 32 32 Table of Contents​Lines of Credit - The company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,402 million at October 30, 2022, $3,284 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were considered to constitute utilization. See Note 17 for more information.Debt Ratings - To access public debt capital markets, the company relies on credit rating agencies to assign short-term and long-term credit ratings to the company's securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold company securities. A credit rating agency may change or withdraw company ratings based on its assessment of the company's current and future ability to meet interest and principal repayment obligations. Each agency's rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by the company are as follows:​​​​​​​​​ Senior ​ ​​Long-Term​Short-Term​Outlook​​​​​​​​​​​​​​Fitch Ratings​A​F1​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTSThe company's material cash requirements include the following:Borrowings - As of October 30, 2022, the company had $15,274 million of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $1,460 million. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2023.Purchase Obligations - As of October 30, 2022, the company's outstanding purchase obligations were $4,701 million, with $4,121 million payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to its contractual obligations, the company's quarterly cash dividend is $1.20 per share, subject to change at the discretion of the company's Board of Directors. Total company pension and OPEB contributions in 2023 are expected to be approximately $200 million. The company also plans capital expenditures of $1,400 million in 2023. The company will consider share repurchases as a means of deploying excess cash to shareholders once the previously mentioned requirements are met.CRITICAL ACCOUNTING ESTIMATESThe preparation of the company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. The accounting policies below are those management believes are the most critical to the preparation of the company's financial statements and require the most difficult, subjective, or complex judgments. The company's other accounting policies are described in the Notes to the Consolidated Financial Statements.Sales IncentivesThe company provides sales incentives to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction to the sales price. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. This is due to numerous programs available at any particular time and new programs that may be announced after the company records the equipment sale. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."The sales incentive accruals at October 30, 2022, October 31, 2021, and November 1, 2020 were $2,364 million, $1,680 million, and $1,718 million, respectively. The total accruals recorded were $1,320 million, $880 million, and $1,109 million in trade accounts and notes receivable - net, and $1,044 million, $800 million, and $609 million in accounts payable and accrued expenses at October 30, 2022, October 31, 2021, and November 1, 2020, respectively. The accruals recorded against receivables relate to programs where the company has the contractual right and the intent to offset against existing receivables. The increase in each of 2022 and 2021 primarily resulted from higher retail demand. Additional factors in 2022 were higher incentives expected to be paid for dealer market share and incentives provided to offset elevated interest rates. The estimation of the retail sales incentive accrual is impacted by many assumptions. One of the key assumptions is the predictive value of the historical percent of retail sales incentive costs to retail sales from dealers. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .8 percent, compared to the average retail sales incentive costs to retail sales percent during that period. Holding other assumptions constant, if this estimated retail incentive cost experience percent would have increased or decreased .8 percent, the sales incentive accrual at October 30, 2022 would have increased or decreased by approximately $74 million.33 Table of Contents​ Table of Contents Table of Contents ​ Lines of Credit - The company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,402 million at October 30, 2022, $3,284 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were considered to constitute utilization. See Note 17 for more information.Debt Ratings - To access public debt capital markets, the company relies on credit rating agencies to assign short-term and long-term credit ratings to the company's securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold company securities. A credit rating agency may change or withdraw company ratings based on its assessment of the company's current and future ability to meet interest and principal repayment obligations. Each agency's rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by the company are as follows:​​​​​​​​​ Senior ​ ​​Long-Term​Short-Term​Outlook​​​​​​​​​​​​​​Fitch Ratings​A​F1​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTSThe company's material cash requirements include the following:Borrowings - As of October 30, 2022, the company had $15,274 million of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $1,460 million. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2023.Purchase Obligations - As of October 30, 2022, the company's outstanding purchase obligations were $4,701 million, with $4,121 million payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to its contractual obligations, the company's quarterly cash dividend is $1.20 per share, subject to change at the discretion of the company's Board of Directors. Total company pension and OPEB contributions in 2023 are expected to be approximately $200 million. The company also plans capital expenditures of $1,400 million in 2023. The company will consider share repurchases as a means of deploying excess cash to shareholders once the previously mentioned requirements are met.CRITICAL ACCOUNTING ESTIMATESThe preparation of the company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. The accounting policies below are those management believes are the most critical to the preparation of the company's financial statements and require the most difficult, subjective, or complex judgments. The company's other accounting policies are described in the Notes to the Consolidated Financial Statements.Sales IncentivesThe company provides sales incentives to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction to the sales price. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. This is due to numerous programs available at any particular time and new programs that may be announced after the company records the equipment sale. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."The sales incentive accruals at October 30, 2022, October 31, 2021, and November 1, 2020 were $2,364 million, $1,680 million, and $1,718 million, respectively. The total accruals recorded were $1,320 million, $880 million, and $1,109 million in trade accounts and notes receivable - net, and $1,044 million, $800 million, and $609 million in accounts payable and accrued expenses at October 30, 2022, October 31, 2021, and November 1, 2020, respectively. The accruals recorded against receivables relate to programs where the company has the contractual right and the intent to offset against existing receivables. The increase in each of 2022 and 2021 primarily resulted from higher retail demand. Additional factors in 2022 were higher incentives expected to be paid for dealer market share and incentives provided to offset elevated interest rates. The estimation of the retail sales incentive accrual is impacted by many assumptions. One of the key assumptions is the predictive value of the historical percent of retail sales incentive costs to retail sales from dealers. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .8 percent, compared to the average retail sales incentive costs to retail sales percent during that period. Holding other assumptions constant, if this estimated retail incentive cost experience percent would have increased or decreased .8 percent, the sales incentive accrual at October 30, 2022 would have increased or decreased by approximately $74 million. Lines of Credit - The company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,402 million at October 30, 2022, $3,284 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were considered to constitute utilization. See Note 17 for more information.Debt Ratings - To access public debt capital markets, the company relies on credit rating agencies to assign short-term and long-term credit ratings to the company's securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold company securities. A credit rating agency may change or withdraw company ratings based on its assessment of the company's current and future ability to meet interest and principal repayment obligations. Each agency's rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by the company are as follows:​​​​​​​​​ Senior ​ ​​Long-Term​Short-Term​Outlook​​​​​​​​​​​​​​Fitch Ratings​A​F1​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTSThe company's material cash requirements include the following:Borrowings - As of October 30, 2022, the company had $15,274 million of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $1,460 million. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2023.Purchase Obligations - As of October 30, 2022, the company's outstanding purchase obligations were $4,701 million, with $4,121 million payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to its contractual obligations, the company's quarterly cash dividend is $1.20 per share, subject to change at the discretion of the company's Board of Directors. Total company pension and OPEB contributions in 2023 are expected to be approximately $200 million. The company also plans capital expenditures of $1,400 million in 2023. The company will consider share repurchases as a means of deploying excess cash to shareholders once the previously mentioned requirements are met.CRITICAL ACCOUNTING ESTIMATESThe preparation of the company's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. Changes in these estimates and assumptions could have a significant effect on the financial statements. The accounting policies below are those management believes are the most critical to the preparation of the company's financial statements and require the most difficult, subjective, or complex judgments. The company's other accounting policies are described in the Notes to the Consolidated Financial Statements.Sales IncentivesThe company provides sales incentives to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction to the sales price. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. This is due to numerous programs available at any particular time and new programs that may be announced after the company records the equipment sale. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales."The sales incentive accruals at October 30, 2022, October 31, 2021, and November 1, 2020 were $2,364 million, $1,680 million, and $1,718 million, respectively. The total accruals recorded were $1,320 million, $880 million, and $1,109 million in trade accounts and notes receivable - net, and $1,044 million, $800 million, and $609 million in accounts payable and accrued expenses at October 30, 2022, October 31, 2021, and November 1, 2020, respectively. The accruals recorded against receivables relate to programs where the company has the contractual right and the intent to offset against existing receivables. The increase in each of 2022 and 2021 primarily resulted from higher retail demand. Additional factors in 2022 were higher incentives expected to be paid for dealer market share and incentives provided to offset elevated interest rates. The estimation of the retail sales incentive accrual is impacted by many assumptions. One of the key assumptions is the predictive value of the historical percent of retail sales incentive costs to retail sales from dealers. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .8 percent, compared to the average retail sales incentive costs to retail sales percent during that period. Holding other assumptions constant, if this estimated retail incentive cost experience percent would have increased or decreased .8 percent, the sales incentive accrual at October 30, 2022 would have increased or decreased by approximately $74 million. Lines of Credit - The company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,402 million at October 30, 2022, $3,284 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were considered to constitute utilization. See Note 17 for more information.Debt Ratings - To access public debt capital markets, the company relies on credit rating agencies to assign short-term and long-term credit ratings to the company's securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold company securities. A credit rating agency may change or withdraw company ratings based on its assessment of the company's current and future ability to meet interest and principal repayment obligations. Each agency's rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by the company are as follows:​​​​​​​​​ Senior ​ ​​Long-Term​Short-Term​Outlook​​​​​​​​​​​​​​Fitch Ratings​A​F1​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTSThe company's material cash requirements include the following:Borrowings - As of October 30, 2022, the company had $15,274 million of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $1,460 million. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2023.Purchase Obligations - As of October 30, 2022, the company's outstanding purchase obligations were $4,701 million, with $4,121 million payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to its contractual obligations, the company's quarterly cash dividend is $1.20 per share, subject to change at the discretion of the company's Board of Directors. Total company pension and OPEB contributions in 2023 are expected to be approximately $200 million. The company also plans capital expenditures of $1,400 million in 2023. The company will consider share repurchases as a means of deploying excess cash to shareholders once the previously mentioned requirements are met. Lines of Credit - The company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,402 million at October 30, 2022, $3,284 million of which were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were considered to constitute utilization. See Note 17 for more information. Debt Ratings - To access public debt capital markets, the company relies on credit rating agencies to assign short-term and long-term credit ratings to the company's securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold company securities. A credit rating agency may change or withdraw company ratings based on its assessment of the company's current and future ability to meet interest and principal repayment obligations. Each agency's rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets. The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by the company are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior ​ ​ ​ Long-Term ​ Short-Term ​ Outlook ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fitch Ratings ​ A ​ F1 ​ Stable Moody's Investors Service, Inc. A2 Prime-1 Positive Standard & Poor's A A-1 Stable ​ **Current (2023):** 33 33 33 Table of Contents​Borrowings●Borrowings increased corresponding with the level of the financing receivable and lease portfolios. Unused Credit Lines●The decrease in unused credit lines was due to an increase in commercial paper outstanding to fund growth in the receivable portfolios.Financial Services Ratio of Interest-Bearing Debt to Stockholder's Equity​​​CASH FLOWS2023, 2022, and 2021​​​​​​​​​​​​​​2023​2022​2021​Net cash provided by operating activities​$ 8,589​$ 4,699​$ 7,726​Net cash used for investing activities​​ (8,749)​​ (8,485)​​ (5,750)​Net cash provided by (used for) financing activities​​ 2,808​​ 826​​ (1,078)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ 31​​ (224)​​ 55​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ 2,679​$ (3,184)​$ 953​​Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution. Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment.Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid.Cash Returned to ShareholdersCash returned to shareholders increased $3.7 billion in 2023.​​​DEBT RATINGS​To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity.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​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​​​​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS2024 and BeyondOur material cash requirements include the following:Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to our contractual obligations, we have the following commitments:●capital expenditures of $1.9 billion are planned for 2024,●expected quarterly cash dividend throughout 2024 (subject to change at the discretion of our Board of Directors), and●total pension and OPEB contributions in 2024 are expected to be approximately $225.Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met. ​​34 Table of Contents​ Table of Contents Table of Contents ​ Borrowings●Borrowings increased corresponding with the level of the financing receivable and lease portfolios. Unused Credit Lines●The decrease in unused credit lines was due to an increase in commercial paper outstanding to fund growth in the receivable portfolios.Financial Services Ratio of Interest-Bearing Debt to Stockholder's Equity​​​CASH FLOWS2023, 2022, and 2021​​​​​​​​​​​​​​2023​2022​2021​Net cash provided by operating activities​$ 8,589​$ 4,699​$ 7,726​Net cash used for investing activities​​ (8,749)​​ (8,485)​​ (5,750)​Net cash provided by (used for) financing activities​​ 2,808​​ 826​​ (1,078)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ 31​​ (224)​​ 55​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ 2,679​$ (3,184)​$ 953​​Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution. Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment.Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid.Cash Returned to ShareholdersCash returned to shareholders increased $3.7 billion in 2023.​​​DEBT RATINGS​To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity.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​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​​​​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS2024 and BeyondOur material cash requirements include the following:Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to our contractual obligations, we have the following commitments:●capital expenditures of $1.9 billion are planned for 2024,●expected quarterly cash dividend throughout 2024 (subject to change at the discretion of our Board of Directors), and●total pension and OPEB contributions in 2024 are expected to be approximately $225.Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met. ​​ Borrowings●Borrowings increased corresponding with the level of the financing receivable and lease portfolios. Unused Credit Lines●The decrease in unused credit lines was due to an increase in commercial paper outstanding to fund growth in the receivable portfolios.Financial Services Ratio of Interest-Bearing Debt to Stockholder's Equity​​​CASH FLOWS2023, 2022, and 2021​​​​​​​​​​​​​​2023​2022​2021​Net cash provided by operating activities​$ 8,589​$ 4,699​$ 7,726​Net cash used for investing activities​​ (8,749)​​ (8,485)​​ (5,750)​Net cash provided by (used for) financing activities​​ 2,808​​ 826​​ (1,078)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ 31​​ (224)​​ 55​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ 2,679​$ (3,184)​$ 953​​Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution. Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment.Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid.Cash Returned to ShareholdersCash returned to shareholders increased $3.7 billion in 2023.​​​DEBT RATINGS​To access debt markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt. These ratings are an indicator of credit quality for fixed income investors. A debt rating is not a recommendation by the rating agency to buy, sell, or hold. A credit rating agency may change or withdraw company ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Lower credit ratings or negative changes to ratings outlooks generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets, and may adversely impact our liquidity.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​StableMoody's Investors Service, Inc. A2 Prime-1 PositiveStandard & Poor's A A-1 Stable​​​​CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS2024 and BeyondOur material cash requirements include the following:Borrowings - As of October 29, 2023, we had $21.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.2 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to grow in 2024.Purchase Obligations - As of October 29, 2023, our outstanding purchase obligations were $4.5 billion, with $4.1 billion payable within one year. These purchase obligations are noncancelable.Other Cash Requirements - In addition to our contractual obligations, we have the following commitments:●capital expenditures of $1.9 billion are planned for 2024,●expected quarterly cash dividend throughout 2024 (subject to change at the discretion of our Board of Directors), and●total pension and OPEB contributions in 2024 are expected to be approximately $225.Share repurchases will be considered as a means of deploying excess cash to shareholders, once the previously mentioned requirements are met. ​​ Borrowings●Borrowings increased corresponding with the level of the financing receivable and lease portfolios. Unused Credit Lines●The decrease in unused credit lines was due to an increase in commercial paper outstanding to fund growth in the receivable portfolios.Financial Services Ratio of Interest-Bearing Debt to Stockholder's Equity​​​CASH FLOWS2023, 2022, and 2021​​​​​​​​​​​​​​2023​2022​2021​Net cash provided by operating activities​$ 8,589​$ 4,699​$ 7,726​Net cash used for investing activities​​ (8,749)​​ (8,485)​​ (5,750)​Net cash provided by (used for) financing activities​​ 2,808​​ 826​​ (1,078)​Effect of exchange rate changes on cash, cash equivalents, and restricted cash​​ 31​​ (224)​​ 55​Net increase (decrease) in cash, cash equivalents, and restricted cash​$ 2,679​$ (3,184)​$ 953​​Operating cash flows in 2023 were higher due to an increase in net income and lower inventory offset by higher receivables related to sales, while operating cash flows in 2022 were impacted by a $1 billion other postretirement benefit (OPEB) contribution. Cash outflows from investing activities were $8.7 billion in 2023 due to growth in the financing receivable and lease portfolios, and purchases of property and equipment.Cash inflows from financing activities were $2.8 billion in 2023, as higher borrowings were partially offset by repurchases of common stock and dividends paid.Cash Returned to ShareholdersCash returned to shareholders increased $3.7 billion in 2023.​​​ Borrowings --- ## Modified: Construction and Forestry Operations **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Change ​ Net sales ​ $ 14,795 ​ $ 12,534 ​ +18 ​ Sales volume and other ​ ​ ​ ​ ​ ​ ​ +9 ​ Price realization ​ ​ ​ ​ ​ ​ ​ +10 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -1 ​ Operating profit ​ ​ 2,695 ​ ​ 2,014 ​ +34 ​ Operating margin ​ ​ 18.2% ​ ​ 16.1% ​ ​ ​ ​ Sales volumes increased 18 percent in the U.S." - Reworded sentence: "Key Metrics and Balance Sheet ChangesCash, Cash Equivalents and Marketable Securities●See the detailed cash flow discussion in the next section." **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions of dollars) ​ 2022 ​ 2021 ​ % Change ​ Revenue (including intercompany) ​ $ 4,085 ​ $ 3,794 ​ +8 ​ Interest expense ​ ​ 799 ​ ​ 687 ​ +16 ​ Net income ​ ​ 880 ​ ​ 881 ​ ​ ​ ​ The average balance of receivables and leases financed was 8 percent higher in 2022, consistent with revenue growth. Interest expense increased in 2022 as a result of higher average borrowings and higher average borrowing rates. Net income in 2022 was roughly the same mainly due to income earned on a higher average portfolio, partially offset by less favorable financing spreads and unfavorable discrete income tax adjustments. The provision for credit losses increased, primarily due to economic uncertainty in Russia. The financial services operations received an intercompany benefit from the equipment operations, as the equipment operations guarantees financial services' investments in certain international markets, including Russia (see Note 4). 2021 COMPARED WITH 2020The comparison of the 2021 results with 2020 can be found under the heading "2021 Compared With 2020" in the "Management's Discussion and Analysis" section of the company's 2021 Form 10-K.CAPITAL RESOURCES AND LIQUIDITYSOURCES OF LIQUIDITY, KEY METRICS, AND BALANCE SHEET DATAThe company has access to most global markets at a reasonable cost. Sources of liquidity for the company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and bank lines of credit. The company closely monitors its liquidity sources against the cash requirements and expects to have sufficient sources of global funding and liquidity to meet its funding needs in the short term (next 12 months) and long term (beyond 12 months). The company operates in multiple industries, which have different funding requirements. The production and precision agriculture, small agriculture and turf, and construction and forestry segments are capital intensive and are typically subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. However, the patterns of seasonality in inventory have been affected by increases in production rates and supply chain disruptions experienced during fiscal year 2022, which continue to impact inventory levels. As a result, the company may not experience typical seasonal reduction in inventory during 2023. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. operations guarantees financial services' investments in certain international markets, including Russia (see Note 4). **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ % Change ​ Net sales ​ $ 14,795 ​ $ 12,534 ​ +18 ​ Sales volume and other ​ ​ ​ ​ ​ ​ ​ +9 ​ Price realization ​ ​ ​ ​ ​ ​ ​ +10 ​ Currency translation ​ ​ ​ ​ ​ ​ ​ -1 ​ Operating profit ​ ​ 2,695 ​ ​ 2,014 ​ +34 ​ Operating margin ​ ​ 18.2% ​ ​ 16.1% ​ ​ ​ ​ Sales volumes increased 18 percent in the U.S. and Canada but decreased 6 percent outside the U.S. and Canada driven by lower sales in Brazil and the suspension of shipments to Russia. Price realization was 12 percent in the U.S. and Canada driven by strong demand, and 7 percent outside the U.S. and Canada. Results in both periods were impacted by special items (see Note 4). ​ 32 32 32 Table of Contents​Financial Services Operations​​​​​​​​​​​​​2023​2022​% Change​Revenue (including intercompany)​$ 5,554​$ 4,085​+36​Average balance of receivables and leases​​​​​​​+19​Interest expense​​ 2,362​​ 799​+196​Average borrowings​​​​​​​+20​Average borrowing rates​​​​​​​+143​Net income​​ 619​​ 880​-30​​Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services' investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the "Other" bar below. ​​BUSINESS SEGMENT RESULTS2022 compared to 2021Please refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​CAPITAL RESOURCES AND LIQUIDITY2023 compared to 2022We 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). Weare forecasting lower operating cash flows in 2024 compared with 2023 as identified previously in Trends and Economic Conditions. 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. However, the patterns of seasonality have been affected by the supply chain disruptions experienced during fiscal year 2022. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Key Metrics and Balance Sheet ChangesCash, Cash Equivalents and Marketable Securities●See the detailed cash flow discussion in the next section. ●The increase was primarily driven by higher operating cash flow.Trade Accounts and Notes Receivable - Net●Receivables are generated from the sales of goods to customers. ●The increase was driven by higher sales.Financing Receivables and Equipment on Operating Leases●Acquisition volumes were 30 percent higher driven by higher retail volumes due to increased retail sales and higher wholesale receivables.Inventories●Inventories decreased due to easing of supply disruption constraints and moderation of future demand.Property and Equipment●Cash expenditures were $1.5 billion in 2023. ●Capital expenditures are forecast to be $1.9 billion in 2024.33 Table of Contents​ Table of Contents Table of Contents ​ Financial Services Operations​​​​​​​​​​​​​2023​2022​% Change​Revenue (including intercompany)​$ 5,554​$ 4,085​+36​Average balance of receivables and leases​​​​​​​+19​Interest expense​​ 2,362​​ 799​+196​Average borrowings​​​​​​​+20​Average borrowing rates​​​​​​​+143​Net income​​ 619​​ 880​-30​​Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services' investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the "Other" bar below. ​​BUSINESS SEGMENT RESULTS2022 compared to 2021Please refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​CAPITAL RESOURCES AND LIQUIDITY2023 compared to 2022We 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). Weare forecasting lower operating cash flows in 2024 compared with 2023 as identified previously in Trends and Economic Conditions. 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. However, the patterns of seasonality have been affected by the supply chain disruptions experienced during fiscal year 2022. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Key Metrics and Balance Sheet ChangesCash, Cash Equivalents and Marketable Securities●See the detailed cash flow discussion in the next section. ●The increase was primarily driven by higher operating cash flow.Trade Accounts and Notes Receivable - Net●Receivables are generated from the sales of goods to customers. ●The increase was driven by higher sales.Financing Receivables and Equipment on Operating Leases●Acquisition volumes were 30 percent higher driven by higher retail volumes due to increased retail sales and higher wholesale receivables.Inventories●Inventories decreased due to easing of supply disruption constraints and moderation of future demand.Property and Equipment●Cash expenditures were $1.5 billion in 2023. ●Capital expenditures are forecast to be $1.9 billion in 2024. Financial Services Operations​​​​​​​​​​​​​2023​2022​% Change​Revenue (including intercompany)​$ 5,554​$ 4,085​+36​Average balance of receivables and leases​​​​​​​+19​Interest expense​​ 2,362​​ 799​+196​Average borrowings​​​​​​​+20​Average borrowing rates​​​​​​​+143​Net income​​ 619​​ 880​-30​​Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services' investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the "Other" bar below. ​​BUSINESS SEGMENT RESULTS2022 compared to 2021Please refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​CAPITAL RESOURCES AND LIQUIDITY2023 compared to 2022We 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). Weare forecasting lower operating cash flows in 2024 compared with 2023 as identified previously in Trends and Economic Conditions. 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. However, the patterns of seasonality have been affected by the supply chain disruptions experienced during fiscal year 2022. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Key Metrics and Balance Sheet ChangesCash, Cash Equivalents and Marketable Securities●See the detailed cash flow discussion in the next section. ●The increase was primarily driven by higher operating cash flow.Trade Accounts and Notes Receivable - Net●Receivables are generated from the sales of goods to customers. ●The increase was driven by higher sales.Financing Receivables and Equipment on Operating Leases●Acquisition volumes were 30 percent higher driven by higher retail volumes due to increased retail sales and higher wholesale receivables.Inventories●Inventories decreased due to easing of supply disruption constraints and moderation of future demand.Property and Equipment●Cash expenditures were $1.5 billion in 2023. ●Capital expenditures are forecast to be $1.9 billion in 2024. Financial Services Operations​​​​​​​​​​​​​2023​2022​% Change​Revenue (including intercompany)​$ 5,554​$ 4,085​+36​Average balance of receivables and leases​​​​​​​+19​Interest expense​​ 2,362​​ 799​+196​Average borrowings​​​​​​​+20​Average borrowing rates​​​​​​​+143​Net income​​ 619​​ 880​-30​​Average wholesale receivables increased 72 percent and retail notes increased 13 percent driven by higher equipment sales. Revenue also increased due to higher average financing rates. Net income declined as a result of unfavorable financing spreads and a correction of the accounting treatment for financing incentives offered to John Deere dealers (see Note 4). In 2022, financial services increased the provision for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees financial services' investments in certain international markets, including Russia (see Note 4). The Russia-related impacts are displayed in the "Other" bar below. ​​BUSINESS SEGMENT RESULTS2022 compared to 2021Please refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​CAPITAL RESOURCES AND LIQUIDITY2023 compared to 2022We 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 --- ## Modified: Net Income Attributable to Deere & Company **Key changes:** - Reworded sentence: "​ $ 9,547 ​ $ 6,251 ​ $ 5,082 ​ $ 619 ​ $ 880 ​ $ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 10,166 ​ $ 7,131 ​ $ 5,963 ​ ​ ​ ​ ​ 1 Elimination of intercompany interest income and expense." - Reworded sentence: "3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues." - Reworded sentence: "5 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases." **Prior (2022):** ​ $ 6,251 ​ $ 5,082 ​ $ 2,185 ​ $ 880 ​ $ 881 ​ $ 566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,131 ​ $ 5,963 ​ $ 2,751 ​ ​ ​ ​ ​ 1 Elimination of financial services' interest income earned from equipment operations. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6). 3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets. 4 Elimination of intercompany service fees. 5 Elimination of equipment operations' interest expense to financial services. 6 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases. 7 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets. ​ ​ ​ ​ 39 39 39 Table of ContentsSUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 30, 2022 and October 31, 2021​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2022 2021​2022 2021​2022 2021​2022 2021​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 3,767​$ 7,188​$ 1,007​$ 829​​ ​​​ ​​$ 4,774​$ 8,017​​​Marketable securities ​ 61​ 3​ 673​ 725​ ​​ ​​ 734​ 728​​​Receivables from Financial Services ​ 6,569​ 5,564​ ​​ ​​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Trade accounts and notes receivable - net ​ 1,273​ 1,155​ 6,434​ 3,895​ (1,297)​ (842)​ 6,410​ 4,208​ 9​​Financing receivables - net ​ 47​ 73​ 36,587​ 33,726​ ​​ ​​ 36,634​ 33,799​​​Financing receivables securitized - net ​​ ​​​ 10​​ 5,936​​ 4,649​​ ​​​ ​​​ 5,936​​ 4,659​​​Other receivables ​ 1,670​ 1,629​ 832​ 159​ (10)​ (23)​ 2,492​ 1,765​ 9​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,623​​ 6,988​​ ​​​ ​​​ 6,623​​ 6,988​​​Inventories ​ 8,495​ 6,781​ ​​ ​​ ​​ ​​ 8,495​ 6,781​​​Property and equipment - net ​ 6,021​ 5,783​ 35​ 37​ ​​ ​​ 6,056​ 5,820​​​Goodwill ​ 3,687​ 3,291​ ​​ ​​ ​​ ​​ 3,687​ 3,291​​​Other intangible assets - net ​ 1,218​ 1,275​ ​​ ​​ ​​ ​​ 1,218​ 1,275​​​Retirement benefits ​ 3,666​ 3,539​ 66​ 64​ (2)​ (2)​ 3,730​ 3,601​ 10​​Deferred income taxes ​ 940​ 1,215​ 45​ 53​ (161)​ (231)​ 824​ 1,037​ 11​​Other assets ​ 1,794​ 1,646​ 626​ 499​ (3)​ ​​ 2,417​ 2,145​​​Total Assets ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,040​$ 1,509​$ 11,552​$ 9,410​​ ​​​ ​​$ 12,592​$ 10,919​​​Short-term securitization borrowings ​​ ​​​ 10​​ 5,711​​ 4,595​​ ​​​ ​​​ 5,711​​ 4,605​​​Payables to Equipment Operations ​ ​​ ​​ 6,569​ 5,564​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Accounts payable and accrued expenses ​ 12,962​ 11,198​ 3,170​ 2,015​ (1,310)​ (865)​ 14,822​ 12,348​ 9​​Deferred income taxes ​ 380​ 438​ 276​ 369​ (161)​ (231)​ 495​ 576​ 11​​Long-term borrowings ​ 7,917​ 8,915​ 25,679​ 23,973​ ​​ ​​ 33,596​ 32,888​​​Retirement benefits and other liabilities ​ 2,351​ 4,239​ 108​ 107​ (2)​ (2)​ 2,457​ 4,344​ 10​​Total liabilities ​ 24,650​ 26,309​ 53,065​ 46,033​ (8,042)​ (6,662)​ 69,673​ 65,680​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 92​​ ​​​ ​​​ ​​​ ​​​​​​ 92​​ ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 20,262​ 18,431​ 5,799​ 5,591​ (5,799)​ (5,591)​ 20,262​ 18,431​ 12​​Noncontrolling interests ​ 3​ 3​ ​​ ​​ ​​ ​​ 3​ 3​​​Financial Services' equity​​ (5,799)​​ (5,591)​​ ​​​ ​​​ 5,799​​ 5,591​​ ​​​ ​​ 12​​Adjusted total stockholders' equity​ 14,466​ 12,843​ 5,799​ 5,591​ ​​ ​​ 20,265​ 18,434​​​Total Liabilities and Stockholders' Equity ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​8 Elimination of receivables / payables between equipment operations and financial services.9 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 10 Reclassification of net pension assets / liabilities.11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.12 Elimination of financial services' equity.​40 Table of Contents Table of Contents Table of Contents SUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 30, 2022 and October 31, 2021​​​(In millions of dollars) Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2022 2021​2022 2021​2022 2021​2022 2021​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 3,767​$ 7,188​$ 1,007​$ 829​​ ​​​ ​​$ 4,774​$ 8,017​​​Marketable securities ​ 61​ 3​ 673​ 725​ ​​ ​​ 734​ 728​​​Receivables from Financial Services ​ 6,569​ 5,564​ ​​ ​​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Trade accounts and notes receivable - net ​ 1,273​ 1,155​ 6,434​ 3,895​ (1,297)​ (842)​ 6,410​ 4,208​ 9​​Financing receivables - net ​ 47​ 73​ 36,587​ 33,726​ ​​ ​​ 36,634​ 33,799​​​Financing receivables securitized - net ​​ ​​​ 10​​ 5,936​​ 4,649​​ ​​​ ​​​ 5,936​​ 4,659​​​Other receivables ​ 1,670​ 1,629​ 832​ 159​ (10)​ (23)​ 2,492​ 1,765​ 9​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,623​​ 6,988​​ ​​​ ​​​ 6,623​​ 6,988​​​Inventories ​ 8,495​ 6,781​ ​​ ​​ ​​ ​​ 8,495​ 6,781​​​Property and equipment - net ​ 6,021​ 5,783​ 35​ 37​ ​​ ​​ 6,056​ 5,820​​​Goodwill ​ 3,687​ 3,291​ ​​ ​​ ​​ ​​ 3,687​ 3,291​​​Other intangible assets - net ​ 1,218​ 1,275​ ​​ ​​ ​​ ​​ 1,218​ 1,275​​​Retirement benefits ​ 3,666​ 3,539​ 66​ 64​ (2)​ (2)​ 3,730​ 3,601​ 10​​Deferred income taxes ​ 940​ 1,215​ 45​ 53​ (161)​ (231)​ 824​ 1,037​ 11​​Other assets ​ 1,794​ 1,646​ 626​ 499​ (3)​ ​​ 2,417​ 2,145​​​Total Assets ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,040​$ 1,509​$ 11,552​$ 9,410​​ ​​​ ​​$ 12,592​$ 10,919​​​Short-term securitization borrowings ​​ ​​​ 10​​ 5,711​​ 4,595​​ ​​​ ​​​ 5,711​​ 4,605​​​Payables to Equipment Operations ​ ​​ ​​ 6,569​ 5,564​$ (6,569)​$ (5,564)​ ​​ ​​ 8​​Accounts payable and accrued expenses ​ 12,962​ 11,198​ 3,170​ 2,015​ (1,310)​ (865)​ 14,822​ 12,348​ 9​​Deferred income taxes ​ 380​ 438​ 276​ 369​ (161)​ (231)​ 495​ 576​ 11​​Long-term borrowings ​ 7,917​ 8,915​ 25,679​ 23,973​ ​​ ​​ 33,596​ 32,888​​​Retirement benefits and other liabilities ​ 2,351​ 4,239​ 108​ 107​ (2)​ (2)​ 2,457​ 4,344​ 10​​Total liabilities ​ 24,650​ 26,309​ 53,065​ 46,033​ (8,042)​ (6,662)​ 69,673​ 65,680​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 92​​ ​​​ ​​​ ​​​ ​​​​​​ 92​​ ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 20,262​ 18,431​ 5,799​ 5,591​ (5,799)​ (5,591)​ 20,262​ 18,431​ 12​​Noncontrolling interests ​ 3​ 3​ ​​ ​​ ​​ ​​ 3​ 3​​​Financial Services' equity​​ (5,799)​​ (5,591)​​ ​​​ ​​​ 5,799​​ 5,591​​ ​​​ ​​ 12​​Adjusted total stockholders' equity​ 14,466​ 12,843​ 5,799​ 5,591​ ​​ ​​ 20,265​ 18,434​​​Total Liabilities and Stockholders' Equity ​$ 39,208​$ 39,152​$ 58,864​$ 51,624​$ (8,042)​$ (6,662)​$ 90,030​$ 84,114​​​​​8 Elimination of receivables / payables between equipment operations and financial services.9 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 10 Reclassification of net pension assets / liabilities.11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.12 Elimination of financial services' equity.​ **Current (2023):** ​ $ 9,547 ​ $ 6,251 ​ $ 5,082 ​ $ 619 ​ $ 880 ​ $ 881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 10,166 ​ $ 7,131 ​ $ 5,963 ​ ​ ​ ​ ​ 1 Elimination of intercompany interest income and expense. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6). 3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues. 4 Elimination of intercompany service fees. 5 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases. 6 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses. ​ 39 39 39 Table of ContentsSUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 29, 2023 and October 30, 2022​​​Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2023 2022​2023 2022​2023 2022​2023 2022​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 5,720​$ 3,767​$ 1,738​$ 1,007​​ ​​​ ​​$ 7,458​$ 4,774​​​Marketable securities ​ 104​ 61​ 842​ 673​ ​​ ​​ 946​ 734​​​Receivables from Financial Services ​ 4,516​ 6,569​ ​​ ​​$ (4,516)​$ (6,569)​ ​​ ​​ 7​​Trade accounts and notes receivable - net ​ 1,320​ 1,273​ 8,687​ 6,434​ (2,268)​ (1,297)​ 7,739​ 6,410​ 8​​Financing receivables - net ​ 64​ 47​ 43,609​ 36,587​ ​​ ​​ 43,673​ 36,634​​​Financing receivables securitized - net ​​ ​​​ ​​​ 7,335​​ 5,936​​ ​​​ ​​​ 7,335​​ 5,936​​​Other receivables ​ 1,813​ 1,670​ 869​ 832​ (59)​ (10)​ 2,623​ 2,492​ 8​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,917​​ 6,623​​ ​​​ ​​​ 6,917​​ 6,623​​​Inventories ​ 8,160​ 8,495​ ​​ ​​ ​​ ​​ 8,160​ 8,495​​​Property and equipment - net ​ 6,843​ 6,021​ 36​ 35​ ​​ ​​ 6,879​ 6,056​​​Goodwill ​ 3,900​ 3,687​ ​​ ​​ ​​ ​​ 3,900​ 3,687​​​Other intangible assets - net ​ 1,133​ 1,218​ ​​ ​​ ​​ ​​ 1,133​ 1,218​​​Retirement benefits ​ 2,936​ 3,666​ 72​ 66​ (1)​ (2)​ 3,007​ 3,730​ 9​​Deferred income taxes ​ 2,133​ 940​ 68​ 45​ (387)​ (161)​ 1,814​ 824​ 10​​Other assets ​ 1,948​ 1,794​ 559​ 626​ (4)​ (3)​ 2,503​ 2,417​​​Total Assets ​$ 40,590​$ 39,208​$ 70,732​$ 58,864​$ (7,235)​$ (8,042)​$ 104,087​$ 90,030​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,230​$ 1,040​$ 16,709​$ 11,552​​ ​​​ ​​$ 17,939​$ 12,592​​​Short-term securitization borrowings ​​ ​​​ ​​​ 6,995​​ 5,711​​ ​​​ ​​​ 6,995​​ 5,711​​​Payables to Equipment Operations ​ ​​ ​​ 4,516​ 6,569​$ (4,516)​$ (6,569)​ ​​ ​​ 7​​Accounts payable and accrued expenses ​ 14,862​ 12,962​ 3,599​ 3,170​ (2,331)​ (1,310)​ 16,130​ 14,822​ 8​​Deferred income taxes ​ 452​ 380​ 455​ 276​ (387)​ (161)​ 520​ 495​ 10​​Long-term borrowings ​ 7,210​ 7,917​ 31,267​ 25,679​ ​​ ​​ 38,477​ 33,596​​​Retirement benefits and other liabilities ​ 2,032​ 2,351​ 109​ 108​ (1)​ (2)​ 2,140​ 2,457​ 9​​Total liabilities ​ 25,786​ 24,650​ 63,650​ 53,065​ (7,235)​ (8,042)​ 82,201​ 69,673​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 97​​ 92​​ ​​​ ​​​ ​​​​​​ 97​​ 92​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 21,785​ 20,262​ 7,082​ 5,799​ (7,082)​ (5,799)​ 21,785​ 20,262​ 11​​Noncontrolling interests ​ 4​ 3​ ​​ ​​ ​​ ​​ 4​ 3​​​Financial Services' equity​​ (7,082)​​ (5,799)​​ ​​​ ​​​ 7,082​​ 5,799​​ ​​​ ​​ 11​​Adjusted total stockholders' equity​ 14,707​ 14,466​ 7,082​ 5,799​ ​​ ​​ 21,789​ 20,265​​​Total Liabilities and Stockholders' Equity ​$ 40,590​$ 39,208​$ 70,732​$ 58,864​$ (7,235)​$ (8,042)​$ 104,087​$ 90,030​​​​​7 Elimination of receivables / payables between equipment operations and financial services.8 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 9 Reclassification of net pension assets / liabilities.10 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.11 Elimination of financial services' equity.​40 Table of Contents Table of Contents Table of Contents SUPPLEMENTAL CONSOLIDATING DATA (continued)​​​​​​​​​​​​​​​​​​​​​​​​​​​​​CONDENSED BALANCE SHEETS​​​As of October 29, 2023 and October 30, 2022​​​Unaudited​​​​​EQUIPMENT​FINANCIAL​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​ 2023 2022​2023 2022​2023 2022​2023 2022​​​ASSETS​​ ​​ ​​ ​​ ​​​​​​​​​​​​​​​Cash and cash equivalents ​$ 5,720​$ 3,767​$ 1,738​$ 1,007​​ ​​​ ​​$ 7,458​$ 4,774​​​Marketable securities ​ 104​ 61​ 842​ 673​ ​​ ​​ 946​ 734​​​Receivables from Financial Services ​ 4,516​ 6,569​ ​​ ​​$ (4,516)​$ (6,569)​ ​​ ​​ 7​​Trade accounts and notes receivable - net ​ 1,320​ 1,273​ 8,687​ 6,434​ (2,268)​ (1,297)​ 7,739​ 6,410​ 8​​Financing receivables - net ​ 64​ 47​ 43,609​ 36,587​ ​​ ​​ 43,673​ 36,634​​​Financing receivables securitized - net ​​ ​​​ ​​​ 7,335​​ 5,936​​ ​​​ ​​​ 7,335​​ 5,936​​​Other receivables ​ 1,813​ 1,670​ 869​ 832​ (59)​ (10)​ 2,623​ 2,492​ 8​​Equipment on operating leases - net ​​ ​​​ ​​​ 6,917​​ 6,623​​ ​​​ ​​​ 6,917​​ 6,623​​​Inventories ​ 8,160​ 8,495​ ​​ ​​ ​​ ​​ 8,160​ 8,495​​​Property and equipment - net ​ 6,843​ 6,021​ 36​ 35​ ​​ ​​ 6,879​ 6,056​​​Goodwill ​ 3,900​ 3,687​ ​​ ​​ ​​ ​​ 3,900​ 3,687​​​Other intangible assets - net ​ 1,133​ 1,218​ ​​ ​​ ​​ ​​ 1,133​ 1,218​​​Retirement benefits ​ 2,936​ 3,666​ 72​ 66​ (1)​ (2)​ 3,007​ 3,730​ 9​​Deferred income taxes ​ 2,133​ 940​ 68​ 45​ (387)​ (161)​ 1,814​ 824​ 10​​Other assets ​ 1,948​ 1,794​ 559​ 626​ (4)​ (3)​ 2,503​ 2,417​​​Total Assets ​$ 40,590​$ 39,208​$ 70,732​$ 58,864​$ (7,235)​$ (8,042)​$ 104,087​$ 90,030​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES AND STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​LIABILITIES​​​​​​​​​​​​​​​​​​​​​​​​​​​Short-term borrowings ​$ 1,230​$ 1,040​$ 16,709​$ 11,552​​ ​​​ ​​$ 17,939​$ 12,592​​​Short-term securitization borrowings ​​ ​​​ ​​​ 6,995​​ 5,711​​ ​​​ ​​​ 6,995​​ 5,711​​​Payables to Equipment Operations ​ ​​ ​​ 4,516​ 6,569​$ (4,516)​$ (6,569)​ ​​ ​​ 7​​Accounts payable and accrued expenses ​ 14,862​ 12,962​ 3,599​ 3,170​ (2,331)​ (1,310)​ 16,130​ 14,822​ 8​​Deferred income taxes ​ 452​ 380​ 455​ 276​ (387)​ (161)​ 520​ 495​ 10​​Long-term borrowings ​ 7,210​ 7,917​ 31,267​ 25,679​ ​​ ​​ 38,477​ 33,596​​​Retirement benefits and other liabilities ​ 2,032​ 2,351​ 109​ 108​ (1)​ (2)​ 2,140​ 2,457​ 9​​Total liabilities ​ 25,786​ 24,650​ 63,650​ 53,065​ (7,235)​ (8,042)​ 82,201​ 69,673​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Commitments and contingencies (Note 20)​​​​​​​​​​​​​​​​​​​​​​​​​​​Redeemable noncontrolling interest (Note 3)​​ 97​​ 92​​ ​​​ ​​​ ​​​​​​ 97​​ 92​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​STOCKHOLDERS' EQUITY​​​​​​​​​​​​​​​​​​​​​​​​​​​Total Deere & Company stockholders' equity ​ 21,785​ 20,262​ 7,082​ 5,799​ (7,082)​ (5,799)​ 21,785​ 20,262​ 11​​Noncontrolling interests ​ 4​ 3​ ​​ ​​ ​​ ​​ 4​ 3​​​Financial Services' equity​​ (7,082)​​ (5,799)​​ ​​​ ​​​ 7,082​​ 5,799​​ ​​​ ​​ 11​​Adjusted total stockholders' equity​ 14,707​ 14,466​ 7,082​ 5,799​ ​​ ​​ 21,789​ 20,265​​​Total Liabilities and Stockholders' Equity ​$ 40,590​$ 39,208​$ 70,732​$ 58,864​$ (7,235)​$ (8,042)​$ 104,087​$ 90,030​​​​​7 Elimination of receivables / payables between equipment operations and financial services.8 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 9 Reclassification of net pension assets / liabilities.10 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.11 Elimination of financial services' equity.​ --- ## Modified: Financial Statement Schedules Omitted **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ The following schedules for the company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V." - Reworded sentence: "​ ​ ​ ​ 28 28 28 Table of ContentsMANAGEMENT'S DISCUSSION AND ANALYSISManagement's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations." **Prior (2022):** ​ ​ ​ ​ ​ The following schedules for the Company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V. ​ ​ ​ ​ ITEM 16.FORM 10-K SUMMARY. ITEM 16. None. ​ ​ ​ ​ 27 27 27 Table of ContentsMANAGEMENT'S DISCUSSION AND ANALYSISThe following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).RESULTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 30, 2022, OCTOBER 31, 2021, AND NOVEMBER 1, 2020OVERVIEWOrganizationThe company generates net sales from the sale of equipment to John Deere dealers and distributors. The company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the "equipment operations") are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The company's financial services segment provides credit services, which finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.Smart Industrial Operating Model and Leap AmbitionsThe company's Smart Industrial operating model is focused on making significant investments, strengthening the company's capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The company's Leap Ambitions are goals designed to boost economic value and sustainability for the company's customers. The company anticipates opportunities in this area, as the company and its customers have a vested interest in sustainable practices.Trends and Economic ConditionsIndustry Trends for Fiscal Year 2023 - Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be flat to down 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 percent in 2023. Asia industry sales are forecasted to be down moderately in 2023 as the demand in India, the world's largest tractor market by unit, stabilizes. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat. Company Trends - Customers' demand for integration of technology into equipment is a market trend underlying the company's Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The company's approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and electrification. This technology is incorporated into products within each of the company's operating segments. Customers continue to adopt technology integrated in the John Deere portfolio of "smart" machines, systems, and solutions. The company expects this trend to persist for the foreseeable future. Demand for the company's equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The company expects dealer stock inventory replenishment to occur in 2024. The North American retail customer fleet age remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains and lower exports from the Black Sea region. The company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend will offset moderation in residential home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and sluggish demand in Asia. Net income for the company's financial services operations is expected to be slightly higher than fiscal year 2022 due to a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating leases. Excluding the portfolio in Russia, a higher provision for credit losses is forecasted for 2023. Additional Trends - The company experienced supply chain disruptions and inflationary pressures in 2022. While these are two distinct issues and discussed separately below, their impact may be intertwined. ​28 Table of ContentsMANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents Table of Contents **Current (2023):** ​ ​ ​ ​ ​ The following schedules for the company and consolidated subsidiaries are omitted because of the absence of the conditions under which they are required: I, II, III, IV, and V. ​ ​ ​ ​ ITEM 16.FORM 10-K SUMMARY. ITEM 16. None. ​ ​ ​ ​ 28 28 28 Table of ContentsMANAGEMENT'S DISCUSSION AND ANALYSISManagement's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​OVERVIEW​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, service, 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.Net Sales and Revenues by Segment in 2023Smart Industrial Operating Model and Leap AmbitionsWe 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 & ECONOMIC CONDITIONS​Industry Sales Outlook for Fiscal 2024Company 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. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023.Company Outlook for 2024●Demand is expected to decline in 2024.●Production volumes will decline to more normal levels in 2024.Agriculture and Turf Outlook for 2024●We expect large agricultural equipment sales to decline in 2024 in North America, Europe, and South America. ●Demand for small agricultural equipment is expected to moderate in Europe.●Turf and utility equipment product sales are expected to be lower due to the overall U.S. economic condition and elevated interest rates. Market Conditions:●Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by declining input costs and improved customer financials.29 Table of ContentsMANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents Table of Contents --- ## Modified: Sales Incentive Accruals **Key changes:** - Reworded sentence: "The accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables." **Prior (2022):** The company provides sales incentives to dealers. At the time a sale to a dealer is recognized, the company records an estimate of the future sales incentive costs as a reduction to the sales price. These incentives may be based on a dealer's purchase volume, or on retail sales incentive programs for allowances and financing programs that will be due when the dealer sells the equipment to a retail customer. The estimated cost of these programs is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to the retail customer. This is due to numerous programs available at any particular time and new programs that may be announced after the company records the equipment sale. Changes in the mix and types of programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in "Net sales." The sales incentive accruals at October 30, 2022, October 31, 2021, and November 1, 2020 were $2,364 million, $1,680 million, and $1,718 million, respectively. The total accruals recorded were $1,320 million, $880 million, and $1,109 million in trade accounts and notes receivable - net, and $1,044 million, $800 million, and $609 million in accounts payable and accrued expenses at October 30, 2022, October 31, 2021, and November 1, 2020, respectively. The accruals recorded against receivables relate to programs where the company has the contractual right and the intent to offset against existing receivables. The increase in each of 2022 and 2021 primarily resulted from higher retail demand. Additional factors in 2022 were higher incentives expected to be paid for dealer market share and incentives provided to offset elevated interest rates. The estimation of the retail sales incentive accrual is impacted by many assumptions. One of the key assumptions is the predictive value of the historical percent of retail sales incentive costs to retail sales from dealers. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .8 percent, compared to the average retail sales incentive costs to retail sales percent during that period. Holding other assumptions constant, if this estimated retail incentive cost experience percent would have increased or decreased .8 percent, the sales incentive accrual at October 30, 2022 would have increased or decreased by approximately $74 million. 33 33 33 Table of Contents​Product WarrantiesFor most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is determined by a review of five-year claims costs and consideration of current quality developments. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The company also offers extended warranty arrangements for purchase at the customer's option. The premiums for extended warranties are recognized in "Other income" in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in "Accounts payable and accrued expenses" in the consolidated balance sheets (see Note 18).The product warranty accruals, excluding extended warranty unamortized premiums, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,427 million, $1,312 million, and $1,105 million, respectively. The increase in each of 2022 and 2021 related to higher sales volume, partially offset by a decrease in the warranty rate.Estimates used to determine the product warranty accruals are significantly affected by the historical percent of warranty claims costs to sales. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .11 percent, compared to the average warranty costs to sales percent during that period. Holding other assumptions constant, if this estimated cost experience percent would have increased or decreased .11 percent, the warranty accrual at October 30, 2022 would have increased or decreased by approximately $57 million.Postretirement Benefit ObligationsThe estimation of defined benefit pension and OPEB plan obligations and expenses requires the use of estimates of the present value of the projected future benefit payments. Plan obligations and expenses are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which the company is presently committed (e.g., in existing labor contracts). The key assumptions used in developing the required estimates used by the company's actuaries include discount rates, health care cost trend rates, expected long-term return on plan assets, compensation increases, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions and changes in assumptions affect future expenses and obligations. Assumptions are set at each year-end and are not changed during the year unless there is a significant plan event, such as a curtailment or settlement that would trigger a plan remeasurement.The company's pension and OPEB costs in 2022 were $176 million, compared with $197 million in 2021 and $341 million in 2020. The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of 5.0 percent in 2022 and 5.9 percent in 2021, or $836 million and $876 million, respectively. The actual return was a loss of $3,565 million in 2022 and a gain of $3,616 million in 2021. In 2023, the expected return is approximately 6.0 percent. The company's costs under these plans in 2023 are expected to decrease by $225 million compared to 2022, resulting in a net periodic benefit. The reduction in the company's cost is due to increases in the expected long-term rates of return on plan assets and increases in discount rates. The pension assets, net of pension liabilities, recognized on the balance sheets at October 30, 2022 and October 31, 2021 were $2,690 million and $2,665 million, respectively. The pension liabilities, net of pension assets, recognized on the balance sheets at November 1, 2020 were $447 million. The increase in the pension net assets in 2022 was due to an increase in discount rates offset by losses on plan assets and UAW contract impacts. The increase in the pension net assets in 2021 was due to returns on plan assets.The OPEB liabilities, net of OPEB assets, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,205 million, $3,175 million, and $3,892 million, respectively. The decrease in OPEB net liabilities in 2022 was due to an increase in discount rates and a $1,000 million contribution to a U.S. OPEB plan. The decrease in OPEB net liabilities in 2021 was due to returns on plan assets and favorable changes to medical assumptions.The company employs de-risking strategies for the global funded pension plans that increase the matching characteristics of the plan assets relative to the obligations, through an increased allocation to fixed income assets, as the funded status improves. Changes in interest rates, which directly influence changes in discount rates, in addition to other factors, have a significant impact on the value of the pension obligation and the fixed income asset portfolio. The company anticipates that changes in interest rates will likely result in offsetting effects in the value of the pension obligation and the value of the fixed income asset portfolio, reducing funded status volatility.34 Table of Contents​ Table of Contents Table of Contents ​ Product WarrantiesFor most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is determined by a review of five-year claims costs and consideration of current quality developments. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The company also offers extended warranty arrangements for purchase at the customer's option. The premiums for extended warranties are recognized in "Other income" in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in "Accounts payable and accrued expenses" in the consolidated balance sheets (see Note 18).The product warranty accruals, excluding extended warranty unamortized premiums, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,427 million, $1,312 million, and $1,105 million, respectively. The increase in each of 2022 and 2021 related to higher sales volume, partially offset by a decrease in the warranty rate.Estimates used to determine the product warranty accruals are significantly affected by the historical percent of warranty claims costs to sales. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .11 percent, compared to the average warranty costs to sales percent during that period. Holding other assumptions constant, if this estimated cost experience percent would have increased or decreased .11 percent, the warranty accrual at October 30, 2022 would have increased or decreased by approximately $57 million.Postretirement Benefit ObligationsThe estimation of defined benefit pension and OPEB plan obligations and expenses requires the use of estimates of the present value of the projected future benefit payments. Plan obligations and expenses are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which the company is presently committed (e.g., in existing labor contracts). The key assumptions used in developing the required estimates used by the company's actuaries include discount rates, health care cost trend rates, expected long-term return on plan assets, compensation increases, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions and changes in assumptions affect future expenses and obligations. Assumptions are set at each year-end and are not changed during the year unless there is a significant plan event, such as a curtailment or settlement that would trigger a plan remeasurement.The company's pension and OPEB costs in 2022 were $176 million, compared with $197 million in 2021 and $341 million in 2020. The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of 5.0 percent in 2022 and 5.9 percent in 2021, or $836 million and $876 million, respectively. The actual return was a loss of $3,565 million in 2022 and a gain of $3,616 million in 2021. In 2023, the expected return is approximately 6.0 percent. The company's costs under these plans in 2023 are expected to decrease by $225 million compared to 2022, resulting in a net periodic benefit. The reduction in the company's cost is due to increases in the expected long-term rates of return on plan assets and increases in discount rates. The pension assets, net of pension liabilities, recognized on the balance sheets at October 30, 2022 and October 31, 2021 were $2,690 million and $2,665 million, respectively. The pension liabilities, net of pension assets, recognized on the balance sheets at November 1, 2020 were $447 million. The increase in the pension net assets in 2022 was due to an increase in discount rates offset by losses on plan assets and UAW contract impacts. The increase in the pension net assets in 2021 was due to returns on plan assets.The OPEB liabilities, net of OPEB assets, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,205 million, $3,175 million, and $3,892 million, respectively. The decrease in OPEB net liabilities in 2022 was due to an increase in discount rates and a $1,000 million contribution to a U.S. OPEB plan. The decrease in OPEB net liabilities in 2021 was due to returns on plan assets and favorable changes to medical assumptions.The company employs de-risking strategies for the global funded pension plans that increase the matching characteristics of the plan assets relative to the obligations, through an increased allocation to fixed income assets, as the funded status improves. Changes in interest rates, which directly influence changes in discount rates, in addition to other factors, have a significant impact on the value of the pension obligation and the fixed income asset portfolio. The company anticipates that changes in interest rates will likely result in offsetting effects in the value of the pension obligation and the value of the fixed income asset portfolio, reducing funded status volatility. Product WarrantiesFor most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is determined by a review of five-year claims costs and consideration of current quality developments. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The company also offers extended warranty arrangements for purchase at the customer's option. The premiums for extended warranties are recognized in "Other income" in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in "Accounts payable and accrued expenses" in the consolidated balance sheets (see Note 18).The product warranty accruals, excluding extended warranty unamortized premiums, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,427 million, $1,312 million, and $1,105 million, respectively. The increase in each of 2022 and 2021 related to higher sales volume, partially offset by a decrease in the warranty rate.Estimates used to determine the product warranty accruals are significantly affected by the historical percent of warranty claims costs to sales. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .11 percent, compared to the average warranty costs to sales percent during that period. Holding other assumptions constant, if this estimated cost experience percent would have increased or decreased .11 percent, the warranty accrual at October 30, 2022 would have increased or decreased by approximately $57 million.Postretirement Benefit ObligationsThe estimation of defined benefit pension and OPEB plan obligations and expenses requires the use of estimates of the present value of the projected future benefit payments. Plan obligations and expenses are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which the company is presently committed (e.g., in existing labor contracts). The key assumptions used in developing the required estimates used by the company's actuaries include discount rates, health care cost trend rates, expected long-term return on plan assets, compensation increases, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions and changes in assumptions affect future expenses and obligations. Assumptions are set at each year-end and are not changed during the year unless there is a significant plan event, such as a curtailment or settlement that would trigger a plan remeasurement.The company's pension and OPEB costs in 2022 were $176 million, compared with $197 million in 2021 and $341 million in 2020. The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of 5.0 percent in 2022 and 5.9 percent in 2021, or $836 million and $876 million, respectively. The actual return was a loss of $3,565 million in 2022 and a gain of $3,616 million in 2021. In 2023, the expected return is approximately 6.0 percent. The company's costs under these plans in 2023 are expected to decrease by $225 million compared to 2022, resulting in a net periodic benefit. The reduction in the company's cost is due to increases in the expected long-term rates of return on plan assets and increases in discount rates. The pension assets, net of pension liabilities, recognized on the balance sheets at October 30, 2022 and October 31, 2021 were $2,690 million and $2,665 million, respectively. The pension liabilities, net of pension assets, recognized on the balance sheets at November 1, 2020 were $447 million. The increase in the pension net assets in 2022 was due to an increase in discount rates offset by losses on plan assets and UAW contract impacts. The increase in the pension net assets in 2021 was due to returns on plan assets.The OPEB liabilities, net of OPEB assets, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,205 million, $3,175 million, and $3,892 million, respectively. The decrease in OPEB net liabilities in 2022 was due to an increase in discount rates and a $1,000 million contribution to a U.S. OPEB plan. The decrease in OPEB net liabilities in 2021 was due to returns on plan assets and favorable changes to medical assumptions.The company employs de-risking strategies for the global funded pension plans that increase the matching characteristics of the plan assets relative to the obligations, through an increased allocation to fixed income assets, as the funded status improves. Changes in interest rates, which directly influence changes in discount rates, in addition to other factors, have a significant impact on the value of the pension obligation and the fixed income asset portfolio. The company anticipates that changes in interest rates will likely result in offsetting effects in the value of the pension obligation and the value of the fixed income asset portfolio, reducing funded status volatility. Product WarrantiesFor most equipment and service parts sales, the company provides a standard warranty to provide assurance that the equipment will function as intended for a specified period of time. At the time a sale is recognized, the company records the estimated future warranty costs. The company determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is determined by a review of five-year claims costs and consideration of current quality developments. Variances in claims experience and the type of warranty programs affect these estimates, which are reviewed quarterly. The company also offers extended warranty arrangements for purchase at the customer's option. The premiums for extended warranties are recognized in "Other income" in the statements of consolidated income in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in "Accounts payable and accrued expenses" in the consolidated balance sheets (see Note 18).The product warranty accruals, excluding extended warranty unamortized premiums, at October 30, 2022, October 31, 2021, and November 1, 2020 were $1,427 million, $1,312 million, and $1,105 million, respectively. The increase in each of 2022 and 2021 related to higher sales volume, partially offset by a decrease in the warranty rate.Estimates used to determine the product warranty accruals are significantly affected by the historical percent of warranty claims costs to sales. Over the last five fiscal years, this percent has varied by an average of approximately plus or minus .11 percent, compared to the average warranty costs to sales percent during that period. Holding other assumptions constant, if this estimated cost experience percent would have increased or decreased .11 percent, the warranty accrual at October 30, 2022 would have increased or decreased by approximately $57 million.Postretirement Benefit ObligationsThe estimation of defined benefit pension and OPEB plan obligations and expenses requires the use of estimates of the present value of the projected future benefit payments. Plan obligations and expenses are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which the company is presently committed (e.g., in existing labor contracts). The key assumptions used in developing the required estimates used by the company's actuaries include discount rates, health care cost trend rates, expected long-term return on plan assets, compensation increases, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions and changes in assumptions affect future expenses and obligations. Assumptions are set at each year-end and are not changed during the year unless there is a significant plan event, such as a curtailment or settlement that would trigger a plan remeasurement. **Current (2023):** The accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The increase in each of 2023 and 2022 primarily resulted from higher retail sales. Additional factors in 2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates. A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105.Product WarrantiesA standard warranty is provided as an assurance that our 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 the following calculation:●historical claims rate experience - multiplied by -●the estimated population. The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments. Product Warranty AccrualsThe increase in each of 2023 and 2022 related to higher sales volumes, partially offset by a decrease in the warranty rate. Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. During this time, the percent has varied plus or minus .12 percent. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased .12 percent, the warranty accrual at October 29, 2023 would have changed by approximately $81.Postretirement Benefit ObligationsThe pension and OPEB plan obligations (defined benefit) and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). The key assumptions used by our actuaries to calculate the estimates include:●discount rates, ●health care cost trend rates, ●expected long-term return on plan assets, ●compensation increases, 2023 were higher incentives for dealer market share and incentives provided to offset elevated interest rates. A key assumption of the retail sales incentive accrual is the predictive value of the historical percent of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of .7 percent. Holding other assumptions constant, .7 percent change would have modified the sales incentive accrual by $105. --- ## Modified: FORWARD-LOOKING STATEMENTS **Key changes:** - Reworded sentence: "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." **Prior (2022):** All of the company's businesses and their results are affected by general global macroeconomic conditions, including but not limited to inflation, including rising costs for materials used in our production, slower growth or recession, higher interest rates and currency fluctuations which could adversely affect the U.S. dollar and customer confidence, customer access to capital, and overall demand for our products; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; shipping delays; government spending and taxing; changes in weather and climate patterns; the political and social stability of the markets in which the company operates; the effects of, or response to, wars and other conflicts, including the current conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic). Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial 36 36 36 Table of Contents​covenants in credit agreements could impact our access to or terms of future funding, which could reduce the company's earnings and cash flows. A debt crisis in Europe (including the recent volatility of the United Kingdom's bond market), Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.Additional factors that could materially affect the company's operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; speed of research and development; effectiveness of partnerships with third parties; the dealer channel's ability to support and service precision technology solutions; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses.Production & Precision Agriculture and Small Agriculture & Turf OperationsThe company's agricultural equipment operations are subject to a number of uncertainties, including customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; and consumable input costs. Additionally, these operations are subject to certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; availability of technological innovations; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases.Production and Precision Agriculture Operations In addition to the uncertainties discussed above, the production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's production and precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes.Small Agriculture and Turf Equipment In addition to the uncertainties discussed above, factors affecting the company's small agriculture and turf equipment operations include spending by municipalities and golf courses. Construction and ForestryFactors affecting the company's construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure, while prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. John Deere Financial The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend on timely access to capital to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate further or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.37 Table of Contents​ Table of Contents Table of Contents ​ covenants in credit agreements could impact our access to or terms of future funding, which could reduce the company's earnings and cash flows. A debt crisis in Europe (including the recent volatility of the United Kingdom's bond market), Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.Additional factors that could materially affect the company's operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; speed of research and development; effectiveness of partnerships with third parties; the dealer channel's ability to support and service precision technology solutions; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses.Production & Precision Agriculture and Small Agriculture & Turf OperationsThe company's agricultural equipment operations are subject to a number of uncertainties, including customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; and consumable input costs. Additionally, these operations are subject to certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; availability of technological innovations; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases.Production and Precision Agriculture Operations In addition to the uncertainties discussed above, the production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's production and precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes.Small Agriculture and Turf Equipment In addition to the uncertainties discussed above, factors affecting the company's small agriculture and turf equipment operations include spending by municipalities and golf courses. Construction and ForestryFactors affecting the company's construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure, while prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. John Deere Financial The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend on timely access to capital to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate further or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses. covenants in credit agreements could impact our access to or terms of future funding, which could reduce the company's earnings and cash flows. A debt crisis in Europe (including the recent volatility of the United Kingdom's bond market), Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.Additional factors that could materially affect the company's operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; speed of research and development; effectiveness of partnerships with third parties; the dealer channel's ability to support and service precision technology solutions; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses.Production & Precision Agriculture and Small Agriculture & Turf OperationsThe company's agricultural equipment operations are subject to a number of uncertainties, including customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; and consumable input costs. Additionally, these operations are subject to certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; availability of technological innovations; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases.Production and Precision Agriculture Operations In addition to the uncertainties discussed above, the production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's production and precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes.Small Agriculture and Turf Equipment In addition to the uncertainties discussed above, factors affecting the company's small agriculture and turf equipment operations include spending by municipalities and golf courses. Construction and ForestryFactors affecting the company's construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure, while prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. John Deere Financial The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend on timely access to capital to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate further or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses. covenants in credit agreements could impact our access to or terms of future funding, which could reduce the company's earnings and cash flows. A debt crisis in Europe (including the recent volatility of the United Kingdom's bond market), Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.Additional factors that could materially affect the company's operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; speed of research and development; effectiveness of partnerships with third parties; the dealer channel's ability to support and service precision technology solutions; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses. covenants in credit agreements could impact our access to or terms of future funding, which could reduce the company's earnings and cash flows. A debt crisis in Europe (including the recent volatility of the United Kingdom's bond market), Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings. Additional factors that could materially affect the company's operations, financial condition, and results include changes in governmental trade, banking, monetary, and fiscal policies, including policies and tariffs for the benefit of certain industries or sectors; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands and their permitted uses; speed of research and development; effectiveness of partnerships with third parties; the dealer channel's ability to support and service precision technology solutions; changes to accounting standards; changes to and compliance with economic sanctions and export controls laws and regulations (including those in place for Russia); and compliance with evolving U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; the loss of or challenges to intellectual property rights; the availability and prices of strategically sourced materials, components, and whole goods; introduction of legislation that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; the success or failure of new product initiatives or business strategies; changes in product preferences, sales mix, and take rates of products and life cycle solutions; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; the inability to deliver precision technology and agricultural solutions to customers; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; and the integration of acquired businesses. Production & Precision Agriculture and Small Agriculture & Turf OperationsThe company's agricultural equipment operations are subject to a number of uncertainties, including customer profitability; consumer purchasing preferences; housing starts and supply; infrastructure investment; and consumable input costs. Additionally, these operations are subject to certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; availability and cost of fertilizer; availability of transport for crops; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; availability of technological innovations; available acreage for farming; changes in government farm programs and policies; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases.Production and Precision Agriculture Operations In addition to the uncertainties discussed above, the production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's production and precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes.Small Agriculture and Turf Equipment In addition to the uncertainties discussed above, factors affecting the company's small agriculture and turf equipment operations include spending by municipalities and golf courses. Construction and ForestryFactors affecting the company's construction and forestry equipment operations include real estate and housing prices; the number of housing starts; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure, while prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. John Deere Financial The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend on timely access to capital to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate further or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses. **Current (2023):** 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: 37 37 37 Table of Contents​●growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);●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 our products and solutions;●accurately forecasting customer demand for products and services and adequately managing inventory;●our 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);●our ability to adapt in highly competitive markets;●dealer practices and their ability to manage distribution of our products and 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 our products and solutions;●stress in the banking sector may have adverse impacts on vendors or customers as well as on our ability to access cash deposits;●availability and price of raw materials, components, and whole goods;●delays or disruptions in our supply chain;●labor relations and contracts, including work stoppages and other disruptions;●the ability to attract, develop, engage, and retain qualified personnel;●security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products; ●loss of or challenges to intellectual property rights; ●compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;●legislation introduced or enacted that could affect our business model and intellectual property, such as so-called right to repair or right to modify legislation;●investigations, claims, lawsuits, or other legal proceedings;●events that damage our reputation or brand;●world grain stocks, available farm acres, 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 our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K). 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.​38 Table of Contents​ Table of Contents Table of Contents ​ ●growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);●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 our products and solutions;●accurately forecasting customer demand for products and services and adequately managing inventory;●our 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);●our ability to adapt in highly competitive markets;●dealer practices and their ability to manage distribution of our products and 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 our products and solutions;●stress in the banking sector may have adverse impacts on vendors or customers as well as on our ability to access cash deposits;●availability and price of raw materials, components, and whole goods;●delays or disruptions in our supply chain;●labor relations and contracts, including work stoppages and other disruptions;●the ability to attract, develop, engage, and retain qualified personnel;●security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products; ●loss of or challenges to intellectual property rights; ●compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;●legislation introduced or enacted that could affect our business model and intellectual property, such as so-called right to repair or right to modify legislation;●investigations, claims, lawsuits, or other legal proceedings;●events that damage our reputation or brand;●world grain stocks, available farm acres, 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 our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K). 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.​ ●growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);●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 our products and solutions;●accurately forecasting customer demand for products and services and adequately managing inventory;●our 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);●our ability to adapt in highly competitive markets;●dealer practices and their ability to manage distribution of our products and 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 our products and solutions;●stress in the banking sector may have adverse impacts on vendors or customers as well as on our ability to access cash deposits;●availability and price of raw materials, components, and whole goods;●delays or disruptions in our supply chain;●labor relations and contracts, including work stoppages and other disruptions;●the ability to attract, develop, engage, and retain qualified personnel;●security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products; ●loss of or challenges to intellectual property rights; ●compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;●legislation introduced or enacted that could affect our business model and intellectual property, such as so-called right to repair or right to modify legislation;●investigations, claims, lawsuits, or other legal proceedings;●events that damage our reputation or brand;●world grain stocks, available farm acres, 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 our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K). 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.​ ●growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);●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 our products and solutions;●accurately forecasting customer demand for products and services and adequately managing inventory;●our 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);●our ability to adapt in highly competitive markets;●dealer practices and their ability to manage distribution of our products and 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 our products and solutions;●stress in the banking sector may have adverse impacts on vendors or customers as well as on our ability to access cash deposits;●availability and price of raw materials, components, and whole goods;●delays or disruptions in our supply chain;●labor relations and contracts, including work stoppages and other disruptions;●the ability to attract, develop, engage, and retain qualified personnel;●security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products; ●loss of or challenges to intellectual property rights; ●compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;●legislation introduced or enacted that could affect our business model and intellectual property, such as so-called right to repair or right to modify legislation;●investigations, claims, lawsuits, or other legal proceedings;●events that damage our reputation or brand;●world grain stocks, available farm acres, 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 our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K). 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.​ Further information concerning our businesses, including factors that could materially affect our financial results, is included in our filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K). 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. ​ 38 38 38 Table of Contents​SUPPLEMENTAL CONSOLIDATING DATAThe supplemental consolidating data presented on the subsequent pages is presented for informational purposes. The equipment operations represents the enterprise without financial services. The 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.The equipment operations and financial services participate in different industries. The equipment operations 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 us. 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.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​INCOME STATEMENTS​​​For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021​​​Unaudited​​​​​EQUIPMENT​FINANCIAL ​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2023​2022​2021​2023​2022​2021​2023​2022​2021​2023​2022​2021​​​Net Sales and Revenues​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net sales​$ 55,565​$ 47,917​$ 39,737​​​​​​​​​​​​​​​​​​​$ 55,565​$ 47,917​$ 39,737​​​Finance and interest income​​ 636​​ 213​​ 133​$ 5,055​$ 3,583​$ 3,442​$ (1,008)​$ (431)​$ (279)​​ 4,683​​ 3,365​​ 3,296​ 1​​Other income​​ 858​​ 1,261​​ 941​​ 499​​ 502​​ 352​​ (354)​​ (468)​​ (302)​​ 1,003​​ 1,295​​ 991​2, 3​​Total​​ 57,059​​ 49,391​​ 40,811​​ 5,554​​ 4,085​​ 3,794​​ (1,362)​​ (899)​​ (581)​​ 61,251​​ 52,577​​ 44,024​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cost of sales​​ 37,739​​ 35,341​​ 29,119​​ ​​​​​​​​​ (24)​​ (3)​​ (3)​​ 37,715​​ 35,338​​ 29,116​ 4​​Research and development expenses​​ 2,177​​ 1,912​​ 1,587​​ ​​​​​​​​​ ​​​ ​​​​​​ 2,177​​ 1,912​​ 1,587​​​Selling, administrative and general expenses​​ 3,611​​ 3,137​​ 2,887​​ 994​​ 735​​ 504​​ (10)​​ (9)​​ (8)​​ 4,595​​ 3,863​​ 3,383​ 4​​Interest expense​​ 411​​ 390​​ 368​​ 2,362​​ 799​​ 687​​ (320)​​ (127)​​ (62)​​ 2,453​​ 1,062​​ 993​ 1​​Interest compensation to Financial Services​​ 687​​ 299​​ 217​​ ​​​ ​​​​​​ (687)​​ (299)​​ (217)​​ ​​​ ​​​ ​​ 1​​Other operating expenses​​ 217​​ 350​​ 181​​ 1,396​​ 1,386​​ 1,453​​ (321)​​ (461)​​ (291)​​ 1,292​​ 1,275​​ 1,343​5, 6​​Total​​ 44,842​​ 41,429​​ 34,359​​ 4,752​​ 2,920​​ 2,644​​ (1,362)​​ (899)​​ (581)​​ 48,232​​ 43,450​​ 36,422​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income before Income Taxes​​ 12,217​​ 7,962​​ 6,452​​ 802​​ 1,165​​ 1,150​​ ​​​ ​​​ ​​​ 13,019​​ 9,127​​ 7,602​​​Provision for income taxes​​ 2,685​​ 1,718​​ 1,386​​ 186​​ 289​​ 272​​ ​​​​​​​​​ 2,871​​ 2,007​​ 1,658​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income after Income Taxes​​ 9,532​​ 6,244​​ 5,066​​ 616​​ 876​​ 878​​ ​​​ ​​​ ​​​ 10,148​​ 7,120​​ 5,944​​​Equity in income of unconsolidated affiliates​​ 4​​ 6​​ 18​​ 3​​ 4​​ 3​​ ​​​​​​​​​ 7​​ 10​​ 21​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Income​​ 9,536​ ​ 6,250​​ 5,084​​ 619​​ 880​​ 881​​ ​​​ ​​​ ​​​ 10,155​​ 7,130​​ 5,965​​​Less: Net income (loss) attributable to noncontrolling interests​​ (11)​​ (1)​​ 2​​ ​​​​​​​​​ ​​​​​​​​​ (11)​​ (1)​​ 2​​​Net Income Attributable to Deere & Company​$ 9,547​$ 6,251​$ 5,082​$ 619​$ 880​$ 881​​ ​​​ ​​​ ​​$ 10,166​$ 7,131​$ 5,963​​​​​1 Elimination of intercompany interest income and expense. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6).3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues.4 Elimination of intercompany service fees.5 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.6 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.​39 Table of Contents Table of Contents Table of Contents ​SUPPLEMENTAL CONSOLIDATING DATAThe supplemental consolidating data presented on the subsequent pages is presented for informational purposes. The equipment operations represents the enterprise without financial services. The 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.The equipment operations and financial services participate in different industries. The equipment operations 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 us. 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.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​INCOME STATEMENTS​​​For the Years Ended October 29, 2023, October 30, 2022, and October 31, 2021​​​Unaudited​​​​​EQUIPMENT​FINANCIAL ​​​​​​​​​OPERATIONS​SERVICES​ELIMINATIONS​CONSOLIDATED​​​​​2023​2022​2021​2023​2022​2021​2023​2022​2021​2023​2022​2021​​​Net Sales and Revenues​​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​​Net sales​$ 55,565​$ 47,917​$ 39,737​​​​​​​​​​​​​​​​​​​$ 55,565​$ 47,917​$ 39,737​​​Finance and interest income​​ 636​​ 213​​ 133​$ 5,055​$ 3,583​$ 3,442​$ (1,008)​$ (431)​$ (279)​​ 4,683​​ 3,365​​ 3,296​ 1​​Other income​​ 858​​ 1,261​​ 941​​ 499​​ 502​​ 352​​ (354)​​ (468)​​ (302)​​ 1,003​​ 1,295​​ 991​2, 3​​Total​​ 57,059​​ 49,391​​ 40,811​​ 5,554​​ 4,085​​ 3,794​​ (1,362)​​ (899)​​ (581)​​ 61,251​​ 52,577​​ 44,024​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Costs and Expenses​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Cost of sales​​ 37,739​​ 35,341​​ 29,119​​ ​​​​​​​​​ (24)​​ (3)​​ (3)​​ 37,715​​ 35,338​​ 29,116​ 4​​Research and development expenses​​ 2,177​​ 1,912​​ 1,587​​ ​​​​​​​​​ ​​​ ​​​​​​ 2,177​​ 1,912​​ 1,587​​​Selling, administrative and general expenses​​ 3,611​​ 3,137​​ 2,887​​ 994​​ 735​​ 504​​ (10)​​ (9)​​ (8)​​ 4,595​​ 3,863​​ 3,383​ 4​​Interest expense​​ 411​​ 390​​ 368​​ 2,362​​ 799​​ 687​​ (320)​​ (127)​​ (62)​​ 2,453​​ 1,062​​ 993​ 1​​Interest compensation to Financial Services​​ 687​​ 299​​ 217​​ ​​​ ​​​​​​ (687)​​ (299)​​ (217)​​ ​​​ ​​​ ​​ 1​​Other operating expenses​​ 217​​ 350​​ 181​​ 1,396​​ 1,386​​ 1,453​​ (321)​​ (461)​​ (291)​​ 1,292​​ 1,275​​ 1,343​5, 6​​Total​​ 44,842​​ 41,429​​ 34,359​​ 4,752​​ 2,920​​ 2,644​​ (1,362)​​ (899)​​ (581)​​ 48,232​​ 43,450​​ 36,422​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income before Income Taxes​​ 12,217​​ 7,962​​ 6,452​​ 802​​ 1,165​​ 1,150​​ ​​​ ​​​ ​​​ 13,019​​ 9,127​​ 7,602​​​Provision for income taxes​​ 2,685​​ 1,718​​ 1,386​​ 186​​ 289​​ 272​​ ​​​​​​​​​ 2,871​​ 2,007​​ 1,658​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Income after Income Taxes​​ 9,532​​ 6,244​​ 5,066​​ 616​​ 876​​ 878​​ ​​​ ​​​ ​​​ 10,148​​ 7,120​​ 5,944​​​Equity in income of unconsolidated affiliates​​ 4​​ 6​​ 18​​ 3​​ 4​​ 3​​ ​​​​​​​​​ 7​​ 10​​ 21​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Net Income​​ 9,536​ ​ 6,250​​ 5,084​​ 619​​ 880​​ 881​​ ​​​ ​​​ ​​​ 10,155​​ 7,130​​ 5,965​​​Less: Net income (loss) attributable to noncontrolling interests​​ (11)​​ (1)​​ 2​​ ​​​​​​​​​ ​​​​​​​​​ (11)​​ (1)​​ 2​​​Net Income Attributable to Deere & Company​$ 9,547​$ 6,251​$ 5,082​$ 619​$ 880​$ 881​​ ​​​ ​​​ ​​$ 10,166​$ 7,131​$ 5,963​​​​​1 Elimination of intercompany interest income and expense. 2 Elimination of equipment operations' margin from inventory transferred to equipment on operating leases (see Note 6).3 Elimination of financial services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues.4 Elimination of intercompany service fees.5 Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.6 Elimination of equipment operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.​ ​ --- ## Modified: Our business could be adversely affected by the infringement or loss of intellectual property rights. **Key changes:** - Reworded sentence: "We protect our intellectual property with a combination of patents, trademarks, copyrights, trade secret laws, and legal agreements." **Prior (2022):** John Deere relies on a combination of patents, trademarks, copyrights, trade secret laws, and confidentiality agreements to protect its intellectual property rights. John Deere heavily relies on certain trademarks that contribute to John Deere's identity and the recognition of its products and services, including but not limited to the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, the prefix "JD" associated with many products, and the green and yellow color combination. These trademarks, as well as the many patents used in our products, are integral to the John Deere business, and their loss could have a material adverse effect on the Company. Additionally, third parties may initiate litigation to challenge the validity of John Deere's patents or allege that John Deere infringes their patents or proprietary rights. John Deere may incur substantial costs if its competitors or other third parties initiate such litigation, or if John Deere initiates any proceedings to protect its proprietary rights. If the outcome of any such litigation is unfavorable to John Deere, our business could be adversely affected. **Current (2023):** We protect our intellectual property with a combination of patents, trademarks, copyrights, trade secret laws, and legal agreements. We heavily rely on certain trademarks to protect our identity and customer recognition of our products and services, including, but not limited to, the "John Deere" mark, the leaping deer logo, the "Nothing Runs Like a Deere" slogan, and the green and yellow color combination. These trademarks, as well as the many patents that protect innovations used in our products, are integral to our business, and their loss could have a material adverse effect on us. Additionally, third parties may initiate legal proceedings to challenge the validity of our intellectual property or allege that we infringe on their intellectual property. We may incur substantial costs if third parties initiate such legal proceedings, or if we initiate legal proceedings to protect or enforce our intellectual property. If the outcome of any such legal proceedings is unfavorable to us, our business could be adversely affected. --- ## Modified: Smart Industrial Operating Model and Leap Ambitions **Key changes:** - Reworded sentence: "We announced the Smart Industrial Operating Model in 2020." **Prior (2022):** The company's Smart Industrial operating model is focused on making significant investments, strengthening the company's capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The company's Leap Ambitions are goals designed to boost economic value and sustainability for the company's customers. The company anticipates opportunities in this area, as the company and its customers have a vested interest in sustainable practices. **Current (2023):** We announced the Smart Industrial Operating Model in 2020. This operating model is based on three focus areas: 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 & ECONOMIC CONDITIONS​Industry Sales Outlook for Fiscal 2024Company 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. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023.Company Outlook for 2024●Demand is expected to decline in 2024.●Production volumes will decline to more normal levels in 2024.Agriculture and Turf Outlook for 2024●We expect large agricultural equipment sales to decline in 2024 in North America, Europe, and South America. ●Demand for small agricultural equipment is expected to moderate in Europe.●Turf and utility equipment product sales are expected to be lower due to the overall U.S. economic condition and elevated interest rates. Market Conditions:●Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by declining input costs and improved customer financials. ​ ​ ​ ​ ​ ​ --- ## Modified: STOCKHOLDERS' EQUITY **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deere & Company stockholders' equity ​ 21,785 ​ 20,262 ​ 7,082 ​ 5,799 ​ (7,082) ​ (5,799) ​ 21,785 ​ 20,262 ​ 11​ ​ Noncontrolling interests ​ 4 ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 ​ 3 ​ ​ ​ Financial Services' equity ​ ​ (7,082) ​ ​ (5,799) ​ ​ ​ ​ ​ ​ ​ ​ 7,082 ​ ​ 5,799 ​ ​ ​ ​ ​ ​ ​ 11​ ​ Adjusted total stockholders' equity ​ 14,707 ​ 14,466 ​ 7,082 ​ 5,799 ​ ​ ​ ​ ​ 21,789 ​ 20,265 ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deere & Company stockholders' equity ​ 20,262 ​ 18,431 ​ 5,799 ​ 5,591 ​ (5,799) ​ (5,591) ​ 20,262 ​ 18,431 ​ 12​ ​ Noncontrolling interests ​ 3 ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ 3 ​ ​ ​ Financial Services' equity ​ ​ (5,799) ​ ​ (5,591) ​ ​ ​ ​ ​ ​ ​ ​ 5,799 ​ ​ 5,591 ​ ​ ​ ​ ​ ​ ​ 12​ ​ Adjusted total stockholders' equity ​ 14,466 ​ 12,843 ​ 5,799 ​ 5,591 ​ ​ ​ ​ ​ 20,265 ​ 18,434 ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deere & Company stockholders' equity ​ 21,785 ​ 20,262 ​ 7,082 ​ 5,799 ​ (7,082) ​ (5,799) ​ 21,785 ​ 20,262 ​ 11​ ​ Noncontrolling interests ​ 4 ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 ​ 3 ​ ​ ​ Financial Services' equity ​ ​ (7,082) ​ ​ (5,799) ​ ​ ​ ​ ​ ​ ​ ​ 7,082 ​ ​ 5,799 ​ ​ ​ ​ ​ ​ ​ 11​ ​ Adjusted total stockholders' equity ​ 14,707 ​ 14,466 ​ 7,082 ​ 5,799 ​ ​ ​ ​ ​ 21,789 ​ 20,265 ​ ​ ​ --- ## Modified: Cash Flows from Financing Activities **Key changes:** - Reworded sentence: "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net proceeds (payments) in short-term borrowings (original maturities three months or less) ​ ​ (113) ​ ​ 136 ​ ​ 65 ​ ​ 4,121 ​ ​ 3,716 ​ ​ 753 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,008 ​ ​ 3,852 ​ ​ 818 ​ ​ ​ Change in intercompany receivables/payables ​ ​ 2,090 ​ ​ (1,633) ​ ​ (354) ​ ​ (2,090) ​ ​ 1,633 ​ ​ 354 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from borrowings issued (original maturities greater than three months) ​ ​ 342 ​ ​ 138 ​ ​ 11 ​ ​ 15,087 ​ ​ 10,220 ​ ​ 8,711 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15,429 ​ ​ 10,358 ​ ​ 8,722 ​ ​ ​ Payments of borrowings (original maturities greater than three months) ​ ​ (901) ​ ​ (1,356) ​ ​ (94) ​ ​ (7,012) ​ ​ (7,089) ​ ​ (6,996) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,913) ​ ​ (8,445) ​ ​ (7,090) ​ ​ ​ Repurchases of common stock ​ ​ (7,216) ​ ​ (3,597) ​ ​ (2,538) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,216) ​ ​ (3,597) ​ ​ (2,538) ​ ​ ​ Capital investment from Equipment Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 870 ​ ​ (7) ​ ​ 8 ​ ​ (870) ​ ​ 7 ​ ​ (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19​ ​ Dividends paid ​ ​ (1,427) ​ ​ (1,313) ​ ​ (1,040) ​ ​ (215) ​ ​ (444) ​ ​ (555) ​ ​ 215 ​ ​ 444 ​ ​ 555 ​ ​ (1,427) ​ ​ (1,313) ​ ​ (1,040) ​ 14​ ​ Other ​ ​ (7) ​ ​ 6 ​ ​ 87 ​ ​ (66) ​ ​ (35) ​ ​ (37) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (73) ​ ​ (29) ​ ​ 50 ​ ​ ​ Net cash provided by (used for) financing activities ​ ​ (7,232) ​ ​ (7,619) ​ ​ (3,863) ​ ​ 10,695 ​ ​ 7,994 ​ ​ 2,238 ​ ​ (655) ​ ​ 451 ​ ​ 547 ​ ​ 2,808 ​ ​ 826 ​ ​ (1,078) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" **Prior (2022):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase (decrease) in total short-term borrowings ​ ​ 136 ​ ​ 65 ​ ​ (177) ​ ​ 3,716 ​ ​ 753 ​ ​ (1,183) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,852 ​ ​ 818 ​ ​ (1,360) ​ ​ ​ Change in intercompany receivables/payables ​ ​ (1,633) ​ ​ (354) ​ ​ (3,207) ​ ​ 1,633 ​ ​ 354 ​ ​ 3,207 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from long-term borrowings ​ ​ 138 ​ ​ 11 ​ ​ 4,586 ​ ​ 10,220 ​ ​ 8,711 ​ ​ 4,685 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10,358 ​ ​ 8,722 ​ ​ 9,271 ​ ​ ​ Payments of long-term borrowings ​ ​ (1,356) ​ ​ (94) ​ ​ (607) ​ ​ (7,089) ​ ​ (6,996) ​ ​ (6,776) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (8,445) ​ ​ (7,090) ​ ​ (7,383) ​ ​ ​ Proceeds from issuance of common stock ​ ​ 63 ​ ​ 148 ​ ​ 331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 63 ​ ​ 148 ​ ​ 331 ​ ​ ​ Repurchases of common stock ​ ​ (3,597) ​ ​ (2,538) ​ ​ (750) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3,597) ​ ​ (2,538) ​ ​ (750) ​ ​ ​ Dividends paid ​ ​ (1,313) ​ ​ (1,040) ​ ​ (956) ​ ​ (444) ​ ​ (555) ​ ​ (386) ​ ​ 444 ​ ​ 555 ​ ​ 386 ​ ​ (1,313) ​ ​ (1,040) ​ ​ (956) ​ 15​ ​ Other ​ ​ (57) ​ ​ (61) ​ ​ (105) ​ ​ (42) ​ ​ (29) ​ ​ (7) ​ ​ 7 ​ ​ (8) ​ ​ (21) ​ ​ (92) ​ ​ (98) ​ ​ (133) ​ 15​ ​ Net cash provided by (used for) financing activities ​ ​ (7,619) ​ ​ (3,863) ​ ​ (885) ​ ​ 7,994 ​ ​ 2,238 ​ ​ (460) ​ ​ 451 ​ ​ 547 ​ ​ 365 ​ ​ 826 ​ ​ (1,078) ​ ​ (980) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ **Current (2023):** ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net proceeds (payments) in short-term borrowings (original maturities three months or less) ​ ​ (113) ​ ​ 136 ​ ​ 65 ​ ​ 4,121 ​ ​ 3,716 ​ ​ 753 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,008 ​ ​ 3,852 ​ ​ 818 ​ ​ ​ Change in intercompany receivables/payables ​ ​ 2,090 ​ ​ (1,633) ​ ​ (354) ​ ​ (2,090) ​ ​ 1,633 ​ ​ 354 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from borrowings issued (original maturities greater than three months) ​ ​ 342 ​ ​ 138 ​ ​ 11 ​ ​ 15,087 ​ ​ 10,220 ​ ​ 8,711 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 15,429 ​ ​ 10,358 ​ ​ 8,722 ​ ​ ​ Payments of borrowings (original maturities greater than three months) ​ ​ (901) ​ ​ (1,356) ​ ​ (94) ​ ​ (7,012) ​ ​ (7,089) ​ ​ (6,996) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,913) ​ ​ (8,445) ​ ​ (7,090) ​ ​ ​ Repurchases of common stock ​ ​ (7,216) ​ ​ (3,597) ​ ​ (2,538) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (7,216) ​ ​ (3,597) ​ ​ (2,538) ​ ​ ​ Capital investment from Equipment Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 870 ​ ​ (7) ​ ​ 8 ​ ​ (870) ​ ​ 7 ​ ​ (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19​ ​ Dividends paid ​ ​ (1,427) ​ ​ (1,313) ​ ​ (1,040) ​ ​ (215) ​ ​ (444) ​ ​ (555) ​ ​ 215 ​ ​ 444 ​ ​ 555 ​ ​ (1,427) ​ ​ (1,313) ​ ​ (1,040) ​ 14​ ​ Other ​ ​ (7) ​ ​ 6 ​ ​ 87 ​ ​ (66) ​ ​ (35) ​ ​ (37) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (73) ​ ​ (29) ​ ​ 50 ​ ​ ​ Net cash provided by (used for) financing activities ​ ​ (7,232) ​ ​ (7,619) ​ ​ (3,863) ​ ​ 10,695 ​ ​ 7,994 ​ ​ 2,238 ​ ​ (655) ​ ​ 451 ​ ​ 547 ​ ​ 2,808 ​ ​ 826 ​ ​ (1,078) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ --- ## Modified: Agriculture and Turf Outlook for 2024 **Key changes:** - Reworded sentence: "Market Conditions: 29 29 29 Table of Contents​●The dairy and livestock sector continues to benefit from elevated protein and hay prices.●Farm input costs in Europe are declining." **Prior (2022):** Industry Trends for Fiscal Year 2023 - Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be flat to down 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 percent in 2023. Asia industry sales are forecasted to be down moderately in 2023 as the demand in India, the world's largest tractor market by unit, stabilizes. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat. Company Trends - Customers' demand for integration of technology into equipment is a market trend underlying the company's Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The company's approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and electrification. This technology is incorporated into products within each of the company's operating segments. Customers continue to adopt technology integrated in the John Deere portfolio of "smart" machines, systems, and solutions. The company expects this trend to persist for the foreseeable future. Demand for the company's equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The company expects dealer stock inventory replenishment to occur in 2024. The North American retail customer fleet age remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains and lower exports from the Black Sea region. The company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend will offset moderation in residential home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and sluggish demand in Asia. Net income for the company's financial services operations is expected to be slightly higher than fiscal year 2022 due to a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating leases. Excluding the portfolio in Russia, a higher provision for credit losses is forecasted for 2023. Additional Trends - The company experienced supply chain disruptions and inflationary pressures in 2022. While these are two distinct issues and discussed separately below, their impact may be intertwined. ​ Company Trends - Customers' demand for integration of technology into equipment is a market trend underlying the company's Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The company's approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and electrification. This technology is incorporated into products within each of the company's operating segments. Customers continue to adopt technology integrated in the John Deere portfolio of "smart" machines, systems, and solutions. The company expects this trend to persist for the foreseeable future. Demand for the company's equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The company expects dealer stock inventory replenishment to occur in 2024. The North American retail customer fleet age remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains and lower exports from the Black Sea region. The company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend will offset moderation in residential home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and sluggish demand in Asia. Net income for the company's financial services operations is expected to be slightly higher than fiscal year 2022 due to a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating leases. Excluding the portfolio in Russia, a higher provision for credit losses is forecasted for 2023. Additional Trends - The company experienced supply chain disruptions and inflationary pressures in 2022. While these are two distinct issues and discussed separately below, their impact may be intertwined. ​ 28 28 28 Table of Contents​Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and more partially completed machines in inventory. Past due deliveries from suppliers were at elevated levels. Late part deliveries incurred expedited freight charges and rework of partially built machines, contributing to production inefficiencies and higher overhead costs. The company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand:•Worked with the supply base to obtain allocations and improve on-time deliveries of parts. •Multi-sourced some parts and materials. •Provided resources to suppliers to address constraints. •Entered into long-term contracts for some critical components. •Utilized alternative freight carriers to expedite delivery.While supply chain disruptions are expected to persist into 2023, the company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably.Inflation was a pervasive feature throughout 2022, increasing the cost of material, freight, energy, salaries, and wages. Higher costs due to general business inflation were offset by price realization, which mitigated the impact of inflation on the company's operating results. The company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the company's operations and financial condition.Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Most retail customer receivables are fixed rate, while wholesale financing receivables are floating rate. The company has both fixed and floating rate borrowings. The company manages the risk of interest rate fluctuations through balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the company enters into interest rate swap agreements to manage its interest rate exposure. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the company's control, and as a result, the company cannot reasonably foresee when these conditions will subside.Items of Concern and Uncertainties - Other items of concern include global and regional political conditions, economic and trade policies, imposition of new or retaliatory tariffs against certain countries or covering certain products, the ongoing effects of the pandemic, capital market disruptions, changes in demand and pricing for new and used equipment, significant fluctuations in foreign currency exchange rates, volatility in the prices of many commodities, and potential recession. These items could impact the company's results. The company is making investments in technology and in strengthening its capabilities in digital, automation, autonomy, and electrification. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty. 2022 COMPARED WITH 2021CONSOLIDATED RESULTS​​​​​​​​​Deere & Company​​​​​​​(In millions of dollars, except per share amounts)​2022​2021​Net sales and revenues​$ 52,577​$ 44,024​Net income attributable to Deere & Company​​ 7,131​​ 5,963​Diluted earnings per share​​ 23.28​​18.99​​Net income in 2022 and 2021 was impacted by special items. See Notes 3 and 4 for additional details. The discussion on net sales and operating profit is included in the Business Segment Results below.An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​Deere & Company​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Cost of sales to net sales​​73.7%​​73.3%​​​​​​​​​​​​​Other income​$ 1,295​$ 991​+31​Research and development expenses​​ 1,912​​ 1,587​+20​Selling, administrative and general expenses​​ 3,863​​ 3,383​+14​Interest expense​​ 1,062​​ 993​+7​Other operating expenses​​ 1,275​​ 1,343​-5​Provision for income taxes​​ 2,007​​ 1,658​+21​​The cost of sales to net sales ratio increased compared to 2021 mainly due to higher production costs partially offset by price realization. Other income increased due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture. Research and development expenses were higher in 2022 largely due to continued focus on developing and incorporating technology solutions. Selling, administrative and general expenses increased mostly due to higher provision for credit losses, including higher reserves due to the economic uncertainty in Russia (see Note 4), as well as a higher merit pay increase due to inflationary conditions. Interest expense increased in 2022 due to higher average borrowings and higher average borrowing rates. Other operating expenses were lower compared to 2021 largely due to reduced depreciation of equipment on operating leases and lower retirement benefit costs. The provision for income taxes increased consistent with higher pretax income.29 Table of Contents​ Table of Contents Table of Contents ​ Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and more partially completed machines in inventory. Past due deliveries from suppliers were at elevated levels. Late part deliveries incurred expedited freight charges and rework of partially built machines, contributing to production inefficiencies and higher overhead costs. The company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand:•Worked with the supply base to obtain allocations and improve on-time deliveries of parts. •Multi-sourced some parts and materials. •Provided resources to suppliers to address constraints. •Entered into long-term contracts for some critical components. •Utilized alternative freight carriers to expedite delivery.While supply chain disruptions are expected to persist into 2023, the company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably.Inflation was a pervasive feature throughout 2022, increasing the cost of material, freight, energy, salaries, and wages. Higher costs due to general business inflation were offset by price realization, which mitigated the impact of inflation on the company's operating results. The company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the company's operations and financial condition.Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Most retail customer receivables are fixed rate, while wholesale financing receivables are floating rate. The company has both fixed and floating rate borrowings. The company manages the risk of interest rate fluctuations through balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the company enters into interest rate swap agreements to manage its interest rate exposure. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the company's control, and as a result, the company cannot reasonably foresee when these conditions will subside.Items of Concern and Uncertainties - Other items of concern include global and regional political conditions, economic and trade policies, imposition of new or retaliatory tariffs against certain countries or covering certain products, the ongoing effects of the pandemic, capital market disruptions, changes in demand and pricing for new and used equipment, significant fluctuations in foreign currency exchange rates, volatility in the prices of many commodities, and potential recession. These items could impact the company's results. The company is making investments in technology and in strengthening its capabilities in digital, automation, autonomy, and electrification. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty. 2022 COMPARED WITH 2021CONSOLIDATED RESULTS​​​​​​​​​Deere & Company​​​​​​​(In millions of dollars, except per share amounts)​2022​2021​Net sales and revenues​$ 52,577​$ 44,024​Net income attributable to Deere & Company​​ 7,131​​ 5,963​Diluted earnings per share​​ 23.28​​18.99​​Net income in 2022 and 2021 was impacted by special items. See Notes 3 and 4 for additional details. The discussion on net sales and operating profit is included in the Business Segment Results below.An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​Deere & Company​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Cost of sales to net sales​​73.7%​​73.3%​​​​​​​​​​​​​Other income​$ 1,295​$ 991​+31​Research and development expenses​​ 1,912​​ 1,587​+20​Selling, administrative and general expenses​​ 3,863​​ 3,383​+14​Interest expense​​ 1,062​​ 993​+7​Other operating expenses​​ 1,275​​ 1,343​-5​Provision for income taxes​​ 2,007​​ 1,658​+21​​The cost of sales to net sales ratio increased compared to 2021 mainly due to higher production costs partially offset by price realization. Other income increased due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture. Research and development expenses were higher in 2022 largely due to continued focus on developing and incorporating technology solutions. Selling, administrative and general expenses increased mostly due to higher provision for credit losses, including higher reserves due to the economic uncertainty in Russia (see Note 4), as well as a higher merit pay increase due to inflationary conditions. Interest expense increased in 2022 due to higher average borrowings and higher average borrowing rates. Other operating expenses were lower compared to 2021 largely due to reduced depreciation of equipment on operating leases and lower retirement benefit costs. The provision for income taxes increased consistent with higher pretax income. Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and more partially completed machines in inventory. Past due deliveries from suppliers were at elevated levels. Late part deliveries incurred expedited freight charges and rework of partially built machines, contributing to production inefficiencies and higher overhead costs. The company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand:•Worked with the supply base to obtain allocations and improve on-time deliveries of parts. •Multi-sourced some parts and materials. •Provided resources to suppliers to address constraints. •Entered into long-term contracts for some critical components. •Utilized alternative freight carriers to expedite delivery.While supply chain disruptions are expected to persist into 2023, the company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably.Inflation was a pervasive feature throughout 2022, increasing the cost of material, freight, energy, salaries, and wages. Higher costs due to general business inflation were offset by price realization, which mitigated the impact of inflation on the company's operating results. The company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the company's operations and financial condition.Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Most retail customer receivables are fixed rate, while wholesale financing receivables are floating rate. The company has both fixed and floating rate borrowings. The company manages the risk of interest rate fluctuations through balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the company enters into interest rate swap agreements to manage its interest rate exposure. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the company's control, and as a result, the company cannot reasonably foresee when these conditions will subside.Items of Concern and Uncertainties - Other items of concern include global and regional political conditions, economic and trade policies, imposition of new or retaliatory tariffs against certain countries or covering certain products, the ongoing effects of the pandemic, capital market disruptions, changes in demand and pricing for new and used equipment, significant fluctuations in foreign currency exchange rates, volatility in the prices of many commodities, and potential recession. These items could impact the company's results. The company is making investments in technology and in strengthening its capabilities in digital, automation, autonomy, and electrification. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty. 2022 COMPARED WITH 2021CONSOLIDATED RESULTS​​​​​​​​​Deere & Company​​​​​​​(In millions of dollars, except per share amounts)​2022​2021​Net sales and revenues​$ 52,577​$ 44,024​Net income attributable to Deere & Company​​ 7,131​​ 5,963​Diluted earnings per share​​ 23.28​​18.99​​Net income in 2022 and 2021 was impacted by special items. See Notes 3 and 4 for additional details. The discussion on net sales and operating profit is included in the Business Segment Results below.An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​Deere & Company​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Cost of sales to net sales​​73.7%​​73.3%​​​​​​​​​​​​​Other income​$ 1,295​$ 991​+31​Research and development expenses​​ 1,912​​ 1,587​+20​Selling, administrative and general expenses​​ 3,863​​ 3,383​+14​Interest expense​​ 1,062​​ 993​+7​Other operating expenses​​ 1,275​​ 1,343​-5​Provision for income taxes​​ 2,007​​ 1,658​+21​​The cost of sales to net sales ratio increased compared to 2021 mainly due to higher production costs partially offset by price realization. Other income increased due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture. Research and development expenses were higher in 2022 largely due to continued focus on developing and incorporating technology solutions. Selling, administrative and general expenses increased mostly due to higher provision for credit losses, including higher reserves due to the economic uncertainty in Russia (see Note 4), as well as a higher merit pay increase due to inflationary conditions. Interest expense increased in 2022 due to higher average borrowings and higher average borrowing rates. Other operating expenses were lower compared to 2021 largely due to reduced depreciation of equipment on operating leases and lower retirement benefit costs. The provision for income taxes increased consistent with higher pretax income. Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and more partially completed machines in inventory. Past due deliveries from suppliers were at elevated levels. Late part deliveries incurred expedited freight charges and rework of partially built machines, contributing to production inefficiencies and higher overhead costs. The company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand:•Worked with the supply base to obtain allocations and improve on-time deliveries of parts. •Multi-sourced some parts and materials. •Provided resources to suppliers to address constraints. •Entered into long-term contracts for some critical components. •Utilized alternative freight carriers to expedite delivery.While supply chain disruptions are expected to persist into 2023, the company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably.Inflation was a pervasive feature throughout 2022, increasing the cost of material, freight, energy, salaries, and wages. Higher costs due to general business inflation were offset by price realization, which mitigated the impact of inflation on the company's operating results. The company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the company's operations and financial condition.Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Most retail customer receivables are fixed rate, while wholesale financing receivables are floating rate. The company has both fixed and floating rate borrowings. The company manages the risk of interest rate fluctuations through balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the company enters into interest rate swap agreements to manage its interest rate exposure. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023.Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the company's control, and as a result, the company cannot reasonably foresee when these conditions will subside.Items of Concern and Uncertainties - Other items of concern include global and regional political conditions, economic and trade policies, imposition of new or retaliatory tariffs against Supply chain disruptions impacted many aspects of the business, including parts availability, increased production costs, and more partially completed machines in inventory. Past due deliveries from suppliers were at elevated levels. Late part deliveries incurred expedited freight charges and rework of partially built machines, contributing to production inefficiencies and higher overhead costs. The company implemented the following mitigation efforts to minimize the impact of supply chain disruptions on its ability to meet customer demand: While supply chain disruptions are expected to persist into 2023, the company is working diligently to secure the parts and components that customers need to deliver essential food and infrastructure more profitably and sustainably. Inflation was a pervasive feature throughout 2022, increasing the cost of material, freight, energy, salaries, and wages. Higher costs due to general business inflation were offset by price realization, which mitigated the impact of inflation on the company's operating results. The company expects inflation to continue in 2023 resulting in higher costs. If customers are unwilling to accept increases in cost of John Deere products, or the company is otherwise unable to offset increases in production costs, inflation could have an adverse effect on the company's operations and financial condition. Interest rates rose in 2022 and further central bank policy rate increases are projected in 2023. Most retail customer receivables are fixed rate, while wholesale financing receivables are floating rate. The company has both fixed and floating rate borrowings. The company manages the risk of interest rate fluctuations through balancing the types and amounts of its funding sources to its financing receivable and equipment on operating lease portfolios. Accordingly, the company enters into interest rate swap agreements to manage its interest rate exposure. Rising interest rates have historically impacted the company's borrowings sooner than the benefit is realized from the financing receivable and equipment on operating lease portfolios. As a result, the company's financial services operations experienced spread compression in 2022. If interest rates continue to rise, the company expects to continue experiencing spread compression in 2023. Supply chain disruptions, inflationary pressures, and rising interest rates are driven by factors outside of the company's control, and as a result, the company cannot reasonably foresee when these conditions will subside. Items of Concern and Uncertainties - Other items of concern include global and regional political conditions, economic and trade policies, imposition of new or retaliatory tariffs against certain countries or covering certain products, the ongoing effects of the pandemic, capital market disruptions, changes in demand and pricing for new and used equipment, significant fluctuations in foreign currency exchange rates, volatility in the prices of many commodities, and potential recession. These items could impact the company's results. The company is making investments in technology and in strengthening its capabilities in digital, automation, autonomy, and electrification. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty. 2022 COMPARED WITH 2021CONSOLIDATED RESULTS​​​​​​​​​Deere & Company​​​​​​​(In millions of dollars, except per share amounts)​2022​2021​Net sales and revenues​$ 52,577​$ 44,024​Net income attributable to Deere & Company​​ 7,131​​ 5,963​Diluted earnings per share​​ 23.28​​18.99​​Net income in 2022 and 2021 was impacted by special items. See Notes 3 and 4 for additional details. The discussion on net sales and operating profit is included in the Business Segment Results below.An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:​​​​​​​​​​​Deere & Company​​​​​​​​​(In millions of dollars)​2022​2021​% Change​Cost of sales to net sales​​73.7%​​73.3%​​​​​​​​​​​​​Other income​$ 1,295​$ 991​+31​Research and development expenses​​ 1,912​​ 1,587​+20​Selling, administrative and general expenses​​ 3,863​​ 3,383​+14​Interest expense​​ 1,062​​ 993​+7​Other operating expenses​​ 1,275​​ 1,343​-5​Provision for income taxes​​ 2,007​​ 1,658​+21​​The cost of sales to net sales ratio increased compared to 2021 mainly due to higher production costs partially offset by price realization. Other income increased due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture. Research and development expenses were higher in 2022 largely due to continued focus on developing and incorporating technology solutions. Selling, administrative and general expenses increased mostly due to higher provision for credit losses, including higher reserves due to the economic uncertainty in Russia (see Note 4), as well as a higher merit pay increase due to inflationary conditions. Interest expense increased in 2022 due to higher average borrowings and higher average borrowing rates. Other operating expenses were lower compared to 2021 largely due to reduced depreciation of equipment on operating leases and lower retirement benefit costs. The provision for income taxes increased consistent with higher pretax income. certain countries or covering certain products, the ongoing effects of the pandemic, capital market disruptions, changes in demand and pricing for new and used equipment, significant fluctuations in foreign currency exchange rates, volatility in the prices of many commodities, and potential recession. These items could impact the company's results. The company is making investments in technology and in strengthening its capabilities in digital, automation, autonomy, and electrification. As with most technology investments, marketplace adoption and monetization of these features holds an elevated level of uncertainty. **Current (2023):** Market Conditions: 29 29 29 Table of Contents​●The dairy and livestock sector continues to benefit from elevated protein and hay prices.●Farm input costs in Europe are declining. Grain prices vary from favorable in Western Europe to depressed in Eastern Europe due to the Russia/Ukraine war.●Dealer inventories are elevated in Brazil due to inventory oversupply driven by weakening demand in the second half of 2023.●Industry sales in Asia are impacted by moderating demand in India, the world's largest tractor market by number of units.●The fleet average age is older than in prior business cycles. Combines are in line with the historical average age, while tractors are slightly older than historical averages.Construction and Forestry Outlook for 2024Market Conditions:●Construction equipment industry sales are forecasted to be down from 2023 levels. ●Benefits from rental fleet replenishment, the energy industry, and U.S. infrastructure spending are expected to partially offset moderation in residential home, office, and retail construction.●Roadbuilding demand remains strong, similar to 2023 in the U.S., largely offset by softening demand in Europe. Financial Services Outlook for 2024​​​​​​​​Net Income​Up moderately​+ Nonrecurring prior period special items​Favorable​+ Higher average portfolio​Favorable​(-) Financing spreads​Unfavorable​(-) Recoveries on operating lease dispositions​Unfavorable​Additional Trends - We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below. Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels.Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products.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 $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024.Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside.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, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins.Other Items of Concern and Uncertainties - Other items that could impact our results are:●global and regional political conditions, including the war in Ukraine and the Israel-Hamas war, ●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,●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,●changes in demand and pricing for new and used equipment, ●significant fluctuations in foreign currency exchange rates, ●volatility in the prices of many commodities, and ●slower economic growth or possible recession. ​​​30 Table of Contents​ Table of Contents Table of Contents ​ ●The dairy and livestock sector continues to benefit from elevated protein and hay prices.●Farm input costs in Europe are declining. Grain prices vary from favorable in Western Europe to depressed in Eastern Europe due to the Russia/Ukraine war.●Dealer inventories are elevated in Brazil due to inventory oversupply driven by weakening demand in the second half of 2023.●Industry sales in Asia are impacted by moderating demand in India, the world's largest tractor market by number of units.●The fleet average age is older than in prior business cycles. Combines are in line with the historical average age, while tractors are slightly older than historical averages.Construction and Forestry Outlook for 2024Market Conditions:●Construction equipment industry sales are forecasted to be down from 2023 levels. ●Benefits from rental fleet replenishment, the energy industry, and U.S. infrastructure spending are expected to partially offset moderation in residential home, office, and retail construction.●Roadbuilding demand remains strong, similar to 2023 in the U.S., largely offset by softening demand in Europe. Financial Services Outlook for 2024​​​​​​​​Net Income​Up moderately​+ Nonrecurring prior period special items​Favorable​+ Higher average portfolio​Favorable​(-) Financing spreads​Unfavorable​(-) Recoveries on operating lease dispositions​Unfavorable​Additional Trends - We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below. Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels.Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products.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 $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024.Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside.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, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins.Other Items of Concern and Uncertainties - Other items that could impact our results are:●global and regional political conditions, including the war in Ukraine and the Israel-Hamas war, ●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,●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,●changes in demand and pricing for new and used equipment, ●significant fluctuations in foreign currency exchange rates, ●volatility in the prices of many commodities, and ●slower economic growth or possible recession. ​​​ ●The dairy and livestock sector continues to benefit from elevated protein and hay prices.●Farm input costs in Europe are declining. Grain prices vary from favorable in Western Europe to depressed in Eastern Europe due to the Russia/Ukraine war.●Dealer inventories are elevated in Brazil due to inventory oversupply driven by weakening demand in the second half of 2023.●Industry sales in Asia are impacted by moderating demand in India, the world's largest tractor market by number of units.●The fleet average age is older than in prior business cycles. Combines are in line with the historical average age, while tractors are slightly older than historical averages.Construction and Forestry Outlook for 2024Market Conditions:●Construction equipment industry sales are forecasted to be down from 2023 levels. ●Benefits from rental fleet replenishment, the energy industry, and U.S. infrastructure spending are expected to partially offset moderation in residential home, office, and retail construction.●Roadbuilding demand remains strong, similar to 2023 in the U.S., largely offset by softening demand in Europe. Financial Services Outlook for 2024​​​​​​​​Net Income​Up moderately​+ Nonrecurring prior period special items​Favorable​+ Higher average portfolio​Favorable​(-) Financing spreads​Unfavorable​(-) Recoveries on operating lease dispositions​Unfavorable​Additional Trends - We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below. Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels.Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products.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 $170 (after-tax) less favorable financing spreads in 2023 compared to 2022. If interest rates continue to rise, we expect to continue experiencing spread compression in 2024.Demand for our products is negatively impacted by rising interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024.Rising interest rates are driven by factors outside of our control, and as a result, we cannot reasonably foresee when this condition will subside.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, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins.Other Items of Concern and Uncertainties - Other items that could impact our results are:●global and regional political conditions, including the war in Ukraine and the Israel-Hamas war, ●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,●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,●changes in demand and pricing for new and used equipment, ●significant fluctuations in foreign currency exchange rates, ●volatility in the prices of many commodities, and ●slower economic growth or possible recession. ​​​ ●The dairy and livestock sector continues to benefit from elevated protein and hay prices.●Farm input costs in Europe are declining. Grain prices vary from favorable in Western Europe to depressed in Eastern Europe due to the Russia/Ukraine war.●Dealer inventories are elevated in Brazil due to inventory oversupply driven by weakening demand in the second half of 2023.●Industry sales in Asia are impacted by moderating demand in India, the world's largest tractor market by number of units.●The fleet average age is older than in prior business cycles. Combines are in line with the historical average age, while tractors are slightly older than historical averages.Construction and Forestry Outlook for 2024Market Conditions:●Construction equipment industry sales are forecasted to be down from 2023 levels. ●Benefits from rental fleet replenishment, the energy industry, and U.S. infrastructure spending are expected to partially offset moderation in residential home, office, and retail construction.●Roadbuilding demand remains strong, similar to 2023 in the U.S., largely offset by softening demand in Europe. Financial Services Outlook for 2024​​​​​​​​Net Income​Up moderately​+ Nonrecurring prior period special items​Favorable​+ Higher average portfolio​Favorable​(-) Financing spreads​Unfavorable​(-) Recoveries on operating lease dispositions​Unfavorable​Additional Trends - We experienced supply chain disruptions and inflationary pressures in 2022. While these issues moderated in 2023, the effect on production schedules and central bank policy interest rates continued in 2023. These changes are discussed below. Supply Chain Impact on Production Schedules. We experienced supply chain improvements compared to 2022, with a return to normal in 2023. The ease in supply chain disruptions contributed to higher levels of production compared to prior year. As a result, our production schedules in 2023 were more aligned with the customers' seasonal use of our products, marking a return to historical seasonal production patterns and on-time product delivery. Additionally, supply chain improvements contributed to reductions in premium freight costs, moderation in material cost increases, and disciplined inventory management in 2023. In 2022, supply chain disruptions impacted many aspects of our business, including receiving past due deliveries from suppliers, parts availability, increased production costs, and higher inventory levels.Interest Rates. Central bank policy interest rates increased in 2022 and 2023. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations, and may impact future demand for our products.Most retail customer receivables are fixed rate. Wholesale financing receivables generally are variable rate. Both types of --- ## Modified: MANAGEMENT'S DISCUSSION AND ANALYSIS **Key changes:** - Reworded sentence: "Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations." **Prior (2022):** The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).RESULTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 30, 2022, OCTOBER 31, 2021, AND NOVEMBER 1, 2020OVERVIEWOrganizationThe company generates net sales from the sale of equipment to John Deere dealers and distributors. The company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the "equipment operations") are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The company's financial services segment provides credit services, which finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.Smart Industrial Operating Model and Leap AmbitionsThe company's Smart Industrial operating model is focused on making significant investments, strengthening the company's capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The company's Leap Ambitions are goals designed to boost economic value and sustainability for the company's customers. The company anticipates opportunities in this area, as the company and its customers have a vested interest in sustainable practices.Trends and Economic ConditionsIndustry Trends for Fiscal Year 2023 - Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be flat to down 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 percent in 2023. Asia industry sales are forecasted to be down moderately in 2023 as the demand in India, the world's largest tractor market by unit, stabilizes. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat. Company Trends - Customers' demand for integration of technology into equipment is a market trend underlying the company's Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The company's approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and electrification. This technology is incorporated into products within each of the company's operating segments. Customers continue to adopt technology integrated in the John Deere portfolio of "smart" machines, systems, and solutions. The company expects this trend to persist for the foreseeable future. Demand for the company's equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The company expects dealer stock inventory replenishment to occur in 2024. The North American retail customer fleet age remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains and lower exports from the Black Sea region. The company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend will offset moderation in residential home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and sluggish demand in Asia. Net income for the company's financial services operations is expected to be slightly higher than fiscal year 2022 due to a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating leases. Excluding the portfolio in Russia, a higher provision for credit losses is forecasted for 2023. Additional Trends - The company experienced supply chain disruptions and inflationary pressures in 2022. While these are two distinct issues and discussed separately below, their impact may be intertwined. ​ The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).RESULTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 30, 2022, OCTOBER 31, 2021, AND NOVEMBER 1, 2020OVERVIEWOrganizationThe company generates net sales from the sale of equipment to John Deere dealers and distributors. The company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the "equipment operations") are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The company's financial services segment provides credit services, which finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.Smart Industrial Operating Model and Leap AmbitionsThe company's Smart Industrial operating model is focused on making significant investments, strengthening the company's capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The company's Leap Ambitions are goals designed to boost economic value and sustainability for the company's customers. The company anticipates opportunities in this area, as the company and its customers have a vested interest in sustainable practices.Trends and Economic ConditionsIndustry Trends for Fiscal Year 2023 - Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be flat to down 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 percent in 2023. Asia industry sales are forecasted to be down moderately in 2023 as the demand in India, the world's largest tractor market by unit, stabilizes. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat. Company Trends - Customers' demand for integration of technology into equipment is a market trend underlying the company's Smart Industrial operating model and Leap Ambitions framework. Customers have sought to improve profitability, productivity, and sustainability through technology. The company's approach to technology involves hardware and software, guidance, connectivity and digital solutions, automation and machine intelligence, autonomy, and electrification. This technology is incorporated into products within each of the company's operating segments. Customers continue to adopt technology integrated in the John Deere portfolio of "smart" machines, systems, and solutions. The company expects this trend to persist for the foreseeable future. Demand for the company's equipment remains strong, as order books are full through a majority of 2023. Agricultural fundamentals are expected to remain solid into 2023, and retail demand will comprise most of 2023 sales. The company expects dealer stock inventory replenishment to occur in 2024. The North American retail customer fleet age remains above average, and dealer inventories are historically low due to the manufacturing and supply chain constraints over the past few years. Crop prices remain favorable to our customers in part due to low stock-to-use ratios for key grains and lower exports from the Black Sea region. The company expects to sell more large agricultural equipment in 2023 than 2022 in North America, Europe, and South America. Demand for small agricultural equipment remains stable, while turf and utility equipment product sales are expected to be lower due to the overall U.S. economic conditions. Construction equipment markets are forecasted to be steady. Rental fleets replenishment, the energy industry, and U.S. infrastructure spend will offset moderation in residential home construction. Roadbuilding demand remains strongest in the U.S., largely offset by softening demand in Europe and sluggish demand in Asia. Net income for the company's financial services operations is expected to be slightly higher than fiscal year 2022 due to a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating leases. Excluding the portfolio in Russia, a higher provision for credit losses is forecasted for 2023. Additional Trends - The company experienced supply chain disruptions and inflationary pressures in 2022. While these are two distinct issues and discussed separately below, their impact may be intertwined. ​ The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).RESULTS OF OPERATIONS FOR THE YEARS ENDED OCTOBER 30, 2022, OCTOBER 31, 2021, AND NOVEMBER 1, 2020OVERVIEWOrganizationThe company generates net sales from the sale of equipment to John Deere dealers and distributors. The company manufactures and distributes a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, roadbuilding, and forestry. These operations (collectively known as the "equipment operations") are managed through the production and precision agriculture, small agriculture and turf, and construction and forestry operating segments. The company's financial services segment provides credit services, which finance sales and leases of equipment by John Deere dealers. In addition, the financial services segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.Smart Industrial Operating Model and Leap AmbitionsThe company's Smart Industrial operating model is focused on making significant investments, strengthening the company's capabilities in digital, automation, autonomy, and alternative propulsion technologies. These technologies are intended to increase worksite efficiency, improve yields, lower input costs, and ease labor constraints. The company's Leap Ambitions are goals designed to boost economic value and sustainability for the company's customers. The company anticipates opportunities in this area, as the company and its customers have a vested interest in sustainable practices.Trends and Economic ConditionsIndustry Trends for Fiscal Year 2023 - Industry sales of large agricultural machinery in the U.S. and Canada for 2023 are forecasted to increase 5 to 10 percent compared to 2022. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be flat to down 5 percent in 2023. Industry sales of agricultural machinery in Europe are forecasted to be flat to up 5 percent, while South American industry sales of tractors and combines are expected to be flat to up 5 percent in 2023. Asia industry sales are forecasted to be down moderately in 2023 as the demand in India, the world's largest tractor market by unit, stabilizes. On an industry basis, North American construction equipment and compact construction equipment sales are both expected to be flat to up 5 percent in 2023. Global forestry and global roadbuilding industry sales are each expected to be flat. **Current (2023):** Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​OVERVIEW​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, service, 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.Net Sales and Revenues by Segment in 2023Smart Industrial Operating Model and Leap AmbitionsWe 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 & ECONOMIC CONDITIONS​Industry Sales Outlook for Fiscal 2024Company 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. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023.Company Outlook for 2024●Demand is expected to decline in 2024.●Production volumes will decline to more normal levels in 2024.Agriculture and Turf Outlook for 2024●We expect large agricultural equipment sales to decline in 2024 in North America, Europe, and South America. ●Demand for small agricultural equipment is expected to moderate in Europe.●Turf and utility equipment product sales are expected to be lower due to the overall U.S. economic condition and elevated interest rates. Market Conditions:●Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by declining input costs and improved customer financials. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​OVERVIEW​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, service, 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.Net Sales and Revenues by Segment in 2023Smart Industrial Operating Model and Leap AmbitionsWe 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 & ECONOMIC CONDITIONS​Industry Sales Outlook for Fiscal 2024Company 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. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. Most notably in 2023, we introduced See & Spray™ Ultimate and a new model of See & Spray™ Premium. These technologies were introduced on a limited basis and did not represent a significant percentage of our sales in 2023.Company Outlook for 2024●Demand is expected to decline in 2024.●Production volumes will decline to more normal levels in 2024.Agriculture and Turf Outlook for 2024●We expect large agricultural equipment sales to decline in 2024 in North America, Europe, and South America. ●Demand for small agricultural equipment is expected to moderate in Europe.●Turf and utility equipment product sales are expected to be lower due to the overall U.S. economic condition and elevated interest rates. Market Conditions:●Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by declining input costs and improved customer financials. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of dollars, unless otherwise specified. For comparison of 2022 to 2021 results, refer to the "Management's Discussion and Analysis" section of our 2022 Form 10-K.​​OVERVIEW​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, service, 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.Net Sales and Revenues by Segment in 2023Smart Industrial Operating Model and Leap AmbitionsWe 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. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*