Deere & Co. (DE) 10-K risk factor changes: FY2020 vs FY2019

The following risks are considered [removed: the most significant] [added: material] to John Deere’s business based upon current knowledge, information and assumptions.

This discussion of risk factors should be considered closely in conjunction with Management’s Discussion and Analysis beginning on page [removed: 22,] [added: 24,] including the risks and uncertainties described in the Safe Harbor Statement on pages [removed: 24] [added: 27] – [removed: 26,] [added: 29,] and the Notes to Consolidated Financial Statements beginning on page [removed: 38.][added: 44.]

Some of these risks and uncertainties could affect particular lines of [added: business, while others could affect all of the Company’s businesses.]

Although [added: the risks are organized by headings, and] each risk is discussed separately, many are interrelated.

International, national and regional laws, regulations and policies directly or indirectly related to or restricting the import and export of John Deere’s products, services and technology, [added: or those of our customers,] including protectionist policies in particular jurisdictions or for the benefit of favored industries or sectors, could harm John Deere’s multinational business and subject John Deere to civil and criminal sanctions for violations.

Trade restrictions, including withdrawal from or modification of existing trade agreements, [removed: the failure to ratify the United States-Mexico-Canada Agreement,] negotiation of new trade agreements, and imposition of new (and retaliatory) tariffs against certain countries or covering certain products, including developments in U.S.-China trade relations, could limit John Deere’s ability to capitalize on current and future growth opportunities in international markets and impair John Deere’s ability to expand the business by offering new technologies, products and services.

Furthermore, [added: market access and] the ability to export agricultural and forestry commodities is critical to John Deere’s agricultural and forestry customers.

Furthermore, [removed: sanctions] [added: embargoes, sanctions,] and export controls imposed by the U.S. and other governments restricting or prohibiting transactions with certain [removed: persons,] [added: persons or entities,] including financial institutions, to certain [removed: countries,] [added: countries] or [added: regions, or] involving certain [added: products, limit the sales of Deere] products [added: and] expose John Deere to potential criminal and civil sanctions.

[removed: Embargoes] [added: Embargoes, sanctions,] and [removed: sanctions] [added: export control] laws are changing rapidly for certain geographies, including with respect to Russia, [added: China,] Venezuela, [removed: Nicaragua] and [removed: Turkey.][added: Nicaragua.]

Although John Deere has a compliance program in place designed to reduce the likelihood of potential violations of import and export laws and sanctions, violations of these laws or sanctions could [added: harm John Deere’s reputation and business, and may subject John Deere to civil and criminal sanctions, any of which could] have [removed: an] [added: a material] adverse effect on John Deere’s [removed: reputation, business,] results of operations and financial condition.

_Changing worldwide demand for food and different forms of bio-energy could [removed: have an effect on] [added: affect] the price of farm commodities and consequently the demand for certain John Deere equipment and could also result in higher research and development costs related to changing machine fuel requirements._

Furthermore, changing [removed: bio-fuel] [added: bio-energy] demands may cause farmers to change the types or quantities of the crops they raise, with corresponding changes in equipment demands.

[removed: _As John Deere seeks to expand its business globally, growth opportunities may be impacted by greater] [added: _Greater] political, economic and social uncertainty and the [removed: continuing and accelerating] [added: evolving] globalization of businesses could significantly change the dynamics of John Deere’s competition, customer base and product [removed: offerings._][added: offerings and impact John Deere’s growth opportunities globally._]

_John Deere’s [removed: business results depend largely on its] ability to understand its customers’ specific preferences and requirements, and to develop, manufacture and market products that meet customer [removed: demand._][added: demand, could significantly affect its business results._]

This requires a thorough understanding of John Deere’s existing and potential customers on a global basis, particularly in [removed: potentially high-growth and emerging markets, including] [added: Argentina,] Brazil, [removed: China, India] and [removed: Russia.][added: India.]

Sustained negative economic conditions and outlook affect housing [removed: starts] [added: starts, energy demand,] and other construction which dampens demand for certain construction equipment.

John Deere’s turf operations and its [added: construction and forestry business are dependent on construction activity and general economic conditions.]

In addition, uncertain or negative outlook with respect to [removed: ongoing] [added: pervasive] U.S. [removed: budget] [added: fiscal] issues as well as general economic conditions and outlook can cause significant changes in market liquidity conditions.

In addition, demand for John Deere’s products and services can be significantly reduced by concerns regarding the diverse economic and political circumstances of the individual countries in the eurozone, the debt burden of certain eurozone countries and their ability to meet future financial obligations, uncertainty [removed: related to] [added: following] the [removed: anticipated] withdrawal of the United Kingdom from the European Union, the risk that one or more other European Union countries could come under increasing pressure to leave the European Union, or the long term stability of the euro as a single common currency.

_Because the financial services segment provides financing for a significant portion of John Deere’s sales worldwide, [removed: John Deere’s operations and financial results could be impacted materially should] negative economic conditions [removed: affect] [added: in] the financial [removed: industry._][added: industry could materially impact John Deere’s operations and financial results._]

[removed: Changes] [added: _Because John Deere’s equipment operations and financial services segments are subject to interest rate risks, changes] in interest rates can reduce demand for equipment, adversely affect interest margins and limit [removed: the ability to] access [added: to] capital markets while increasing borrowing costs._

While the Company strives to match the interest rate characteristics of our 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 [added: earnings.]

_The potential loss of John Deere intellectual property through trade secret theft, infringement of patents, trademark counterfeiting, or other loss of rights to exclusive use of John Deere intellectual property [removed: may] [added: could] have a material adverse effect on the Company.

Infringement of the intellectual property rights of others by Deere [removed: may] [added: could] also have a material adverse effect on the Company._

_John Deere is subject to extensive anti-corruption laws and [removed: regulations._][added: regulations, the violation of which could adversely affect John Deere._]

[removed: _John Deere’s business may be directly and indirectly affected by unfavorable] [added: _Unfavorable] weather conditions or natural calamities that reduce agricultural production and demand for agriculture and turf [removed: equipment._][added: equipment could directly and indirectly affect John Deere’s business._]

_Changes in the availability and price of certain raw materials, [removed: components] [added: components,] and whole goods could result in [removed: production] [added: significant] disruptions [removed: or] [added: to the supply chain, production disruptions, and] increased costs and lower profits on sales of John Deere products._

John Deere requires access to various raw materials, [removed: components] [added: components,] and whole goods at competitive prices to manufacture and distribute its products.

Changes in the availability and price of these raw materials, [removed: components] [added: components,] and whole goods, which have fluctuated significantly in the past and are more likely to fluctuate during times of economic volatility, regulatory instability or change in import tariffs or trade agreements, can significantly increase the costs of production which could have a material negative effect on the profitability of the business, particularly if John Deere, due to pricing considerations or other factors, is unable to recover the increased costs from its customers.

John Deere relies on suppliers to acquire raw materials, [removed: components] [added: components,] and whole goods required to manufacture its products.

Supply chain disruptions due to supplier financial distress, capacity constraints, trade barriers, labor shortages, business continuity, quality, [added: cyber attacks,] delivery issues or disruptions due to [removed: weather-related or] [added: weather-related,] natural [removed: disaster] [added: disaster, or pandemic] events could affect John Deere’s operations and profitability.

[removed: _John Deere’s operations, suppliers and customers are subject to and affected by increasingly] [added: _Increasingly] rigorous environmental,_ _health and safety laws and regulations_ _of federal, state and local authorities in the U.S. and various [added: international] regulatory authorities [removed: with jurisdiction over] [added: apply to] John Deere’s [removed: international operations._ _In addition, private] [added: operations, suppliers and customers, and enforcement actions or] civil litigation [removed: on these subjects has increased, primarily in the U.S._][added: related to those requirements could adversely affect John Deere’s business results._]

Enforcement actions arising from violations of environmental, health and safety laws or regulations can lead to investigation and [removed: defense] [added: legal] costs, and result in significant fines or penalties.

[added: Further, civil litigation on these subjects continues to increase, primarily in the U.S.] There can be no assurance that violations of such [removed: legislation] [added: laws] and/or regulations, [removed: or private] civil claims for damages to property or personal injury arising from the environmental, health or safety impacts of John Deere’s operations, or those of our suppliers and customers, [added: or other civil claims in which John Deere becomes a party,] would not have consequences that result in a material adverse effect on John Deere’s business, financial condition or results of operations.

[removed: _John Deere may incur increased costs due to new] [added: _New] or more stringent greenhouse gas emission standards designed to address climate change [removed: and] could [removed: be further impacted by] [added: increase costs to John Deere and the] physical effects attributed to climate change [removed: on] [added: could further impact] its facilities, suppliers and customers._

These considerations may lead to [added: new] international, national, regional or local legislative or regulatory [removed: responses in the future.][added: responses.]

These may include [added: extreme weather events and] long-term changes in temperature levels and water availability.

[removed: 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.

Despite security measures and business continuity plans, John Deere’s information technology networks and infrastructure may be vulnerable to damage, disruptions or shutdowns due to attacks by cyber criminals or breaches due to employee or supplier error or malfeasance or other disruptions during [added: the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures, terrorist acts, natural disasters or other catastrophic events.]

_John Deere is subject to governmental laws, regulations and other legal obligations related to privacy and data [removed: protection._][added: protection and any inability or perceived inability of the Company to address these requirements could adversely affect our business._]

Risks Related to the COVID Pandemic

_The COVID pandemic resulted in additional risks that could materially adversely affect John Deere’s business, financial condition, results of operations and/or cash flows._

COVID was identified in late 2019 and has spread globally.

The pandemic has resulted in governments and other authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders and business closures.

These measures have impacted and may further impact all or portions of the Company’s workforce and operations and the operations of customers and suppliers.

Countries around the world have been affected by the pandemic and have taken containment actions.

Considerable uncertainty exists regarding such measures and potential future measures.

Restrictions on access to the Company’s manufacturing facilities or on the support operations or workforce, or similar limitations for suppliers and dealers, restrictions or disruptions of transportation, port closures, increased border controls or closures, and material and component shortages have limited and could continue to limit the Company’s ability to meet customer demand, which could have a material adverse effect on the Company’s financial condition, cash flows and results of operations.

There is no certainty that measures taken by governmental authorities will be sufficient to mitigate the risks posed by the virus, and the Company’s ability to perform critical functions could be harmed.

The COVID pandemic caused a global recession and there is no certainty about when a sustained economic recovery may occur.

The COVID pandemic has also significantly increased economic and demand uncertainty and has led to disruption and volatility in demand for the Company’s products and services, suppliers’ ability to fill orders, and global capital markets.

Economic uncertainties could continue to affect demand for the Company’s products and services, the value of the equipment financed or leased, the demand for financing and the financial condition and credit risk of our dealers and customers.

Uncertainties related to the magnitude and duration of the COVID pandemic may significantly adversely affect our business and outlook.

These uncertainties include: the duration and impact of the resurgence in COVID cases in any country, state, or region; prolonged reduction or closure of the Company’s operations, or a delayed recovery in our operations; additional closures as mandated or otherwise made necessary by governmental authorities; disruptions in the supply chain and a prolonged delay in resumption of operations by one or more key suppliers, or the failure of any key suppliers; the Company’s ability to meet commitments to our customers on a timely basis as a result of increased costs and supply challenges; the ability to receive goods on a timely basis and at anticipated costs; increased logistics costs; delays in the Company’s strategic initiatives as a result of reduced spending on research and development; additional operating costs due to remote working arrangements, adherence to social distancing guidelines and other COVID-related challenges; increased risk of cyber attacks on network connections used in remote working arrangements; increased privacy-related risks due to processing health-related personal information; legal claims related to personal protective equipment designed, made, or provided by the Company or alleged exposure to COVID on Company premises; absence of employees due to illness; the impact of the pandemic on the Company’s customers and dealers, and their delays in their plans to invest in new equipment; requests by the Company’s customers or dealers for payment deferrals and contract modifications; the impact of disruptions in the global capital markets and/or declines in our financial performance, outlook or credit ratings, which could impact the Company’s ability to obtain funding in the future; and the impact of the pandemic on demand for our products and services as discussed above.

It is unclear when a sustained economic recovery could occur and what a recovery may look like.

All of these factors could materially and adversely affect our business, liquidity, results of operations and financial position.

The ultimate magnitude of COVID effects, including the extent of its impact on the Company’s financial and operational results, which could be material, will be determined by the length of time that the pandemic continues, its effect on the demand for the Company’s products and services and the supply chain, as well as the effect of governmental regulations imposed in response to the pandemic.

We cannot at this time predict the impact of the COVID pandemic, but it could have a material adverse effect on our business, financial condition, results of operations and/or cash flows.

Geopolitical Uncertainties

In particular, changing U.S. export controls and sanctions on China, as well as other restrictions affecting transactions involving China and Chinese parties, could affect John Deere’s ability to collect receivables, provide aftermarket and warranty support for John Deere equipment, sell products, and otherwise impact Deere’s reputation and business.

Uncertain Economic Conditions

As discussed under Risks Related to the COVID Pandemic–_The COVID pandemic resulted in additional risks that could materially adversely affect John Deere’s business, financial condition, results of operations and/or cash flows_, the COVID pandemic caused a global recession and significantly increased economic and demand uncertainty.

Financial Risks

Market Conditions

_John Deere’s ability to adapt in highly competitive markets could affect its business, results of operations and financial condition._

Manufacturing and Operations

Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods can adversely affect John Deere’s ability to meet commitments to customers.

For example, during fiscal 2020, some of the Company’s operations were temporarily impacted by certain material or component shortages due to COVID.

Data Security and Privacy

John Deere uses information technology

Intellectual Property Risks

Human Capital Risks

Further, John Deere’s success depends, in part, on its ability to develop, engage, and retain qualified employees.

could impair John Deere’s ability to execute its business strategy, and could adversely affect John Deere’s business.

Employee-separation programs may adversely affect the Company through decreased employee morale, the loss of knowledge of departing employees, and the devotion of resources to reorganizing and reassigning job roles and responsibilities.

The Company’s ability to meet its business objectives may be affected by the departure of employees, and the expected cost savings of the employee-separation programs may not be achieved due to delays or other factors.

Further, the departure of groups of employees could increase the risk to the Company of claims or litigation from former employees.

_Disputes with labor unions could adversely affect 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.

Disruptions to John Deere’s manufacturing and parts-distribution facilities, through various forms of labor disputes, could adversely affect the Company.

business, while others could affect all of the Company’s businesses.

As these emerging geographic markets become more important to John Deere, its competitors are also seeking to expand their production capacities and sales in these same markets.

_John Deere operates in highly competitive markets._

construction and forestry business are dependent on construction activity and general economic conditions.

_John Deere’s equipment operations and financial services segments are subject to interest rate risks.

earnings.

the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures, terrorist acts, natural disasters or other catastrophic events.

In particular, John Deere is dependent on its ability to identify, attract, motivate, train and retain qualified personnel with the requisite education, background and industry experience.

See the information under the caption “Management’s Discussion and Analysis” on pages [removed: 22] [added: 24] – [removed: 32.][added: 38.]

See the information under “Management’s Discussion and Analysis” beginning on page [removed: 22] [added: 24, under “Financial Instrument Market Risk Information” on page 38] and in Note [removed: 28] [added: 27] to the Consolidated Financial Statements.

The _agriculture and turf_ segment primarily manufactures and distributes a full line of agriculture and turf equipment and related service parts, including: large, medium, and utility tractors; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters; harvesting front-end equipment; sugarcane loaders and pull-behind scrapers; tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery; hay and forage equipment, including self-propelled forage harvesters and attachments, balers and mowers; turf and utility equipment, including riding lawn [removed: equipment and walk-behind mowers,] [added: equipment,] golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements; integrated agricultural [removed: management systems technology] [added: solutions] and [removed: solutions;] [added: precision technologies;] and other outdoor power products.

The _construction and forestry_ segment primarily manufactures and distributes a broad range of machines and service parts used in construction, earthmoving, [removed: road building,] [added: roadbuilding,] material handling and timber harvesting, including: backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; milling machines; recyclers; slipform pavers; surface miners; asphalt pavers; compactors; tandem and static rollers; mobile crushers and screens; mobile and stationary asphalt plants; log skidders; feller bunchers; log loaders; log forwarders; log harvesters and related logging [removed: attachments.][added: attachments; and precision technologies.]

The products and services produced by the segments above are marketed primarily through independent retail dealer networks and major retail [removed: outlets.][added: outlets, and, as it relates to roadbuilding products, primarily through Company-owned sales and service subsidiaries.]

Additional information is presented in the discussion of business segment and geographic area results on pages [removed: 23] [added: 26] – [removed: 24.][added: 27.]

Market [removed: Conditions and Outlook][added: Conditions]

[added: _Agriculture and Turf._] Industry sales of agricultural equipment in the U.S. and Canada are forecast to [removed: be down about] [added: increase] 5 [removed: percent,] [added: to 10 percent] driven by [removed: lower demand for large equipment.][added: gains in larger models.]

[removed: Asian] [added: Global forestry industry] sales are forecast to be about the same [removed: as 2019.][added: to 5 percent higher in 2021.]

Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same [added: to 5 percent higher] for [removed: 2020.][added: 2021.]

[removed: _Financial Services._ Fiscal-year 2020] [added: The financial services operations reported] net income attributable to the Company [added: of $566 million] for [removed: the financial services operations is expected to be approximately $600 million.][added: fiscal 2020 compared with $539 million in fiscal 2019.]

[removed: 2019] [added: 2020] Consolidated Results Compared with [removed: 2018][added: 2019]

For fiscal [removed: 2019,] [added: 2020,] worldwide net income attributable to the Company was [removed: $3.253] [added: $2.751] billion, or [removed: $10.15] [added: $8.69] per share, compared with [removed: $2.368] [added: $3.253] billion, or [removed: $7.24] [added: $10.15] per share, in [removed: 2018.][added: 2019.]

Worldwide net sales and revenues [removed: increased 5] [added: decreased 9] percent to [removed: $39.258] [added: $35.540] billion in [removed: 2019,] [added: 2020,] compared with [removed: $37.358] [added: $39.258] billion in [removed: 2018.][added: 2019.]

Net sales of worldwide equipment operations [removed: increased] [added: decreased] in fiscal [removed: 2019] [added: 2020] to [removed: $34.886] [added: $31.272] billion, compared with [removed: $33.351] [added: $34.886] billion last year.

[added: Both] Agriculture [removed: &] [added: and] Turf [added: and Construction and Forestry] sales [removed: increased] [added: decreased] for [removed: 2019] [added: 2020] due to [removed: price realization and higher] [added: lower] shipment [removed: volumes, partially offset by] [added: volumes and] the unfavorable effects of currency [removed: translation.][added: translation, partially offset by price realization.]

Worldwide equipment operations had an operating profit of [removed: $3.721] [added: $3.559] billion in fiscal [removed: 2019,] [added: 2020,] compared with [removed: $3.684] [added: $3.721] billion in fiscal [removed: 2018.][added: 2019.]

Operating profit for Agricultural [removed: &] [added: and] Turf [removed: decreased for 2019,] [added: increased] largely due to [removed: higher productions costs, the unfavorable effects of currency exchange, increased research and development costs, higher] [added: price realization, reduced] selling, administrative, and general expenses, [added: lower research] and [removed: a less-favorable sales mix, partially offset by price realization] [added: development expenses, lower warranty expenses,] and [removed: higher shipment volumes.][added: improved production costs.]

Net income of the Company’s equipment operations was [removed: $2.698] [added: $2.185] billion for fiscal [removed: 2019,] [added: 2020,] compared with [removed: $1.404] [added: $2.714] billion in fiscal [removed: 2018.][added: 2019.]

[removed: Excluding tax-reform adjustments, the decrease] [added: The increase] was mainly due to [added: lower] impairments and [removed: higher] [added: reduced] losses on [removed: operating-lease] [added: operating lease] residual values and [removed: unfavorable financing spreads, partially offset by] income earned on a higher average [removed: portfolio.][added: portfolio, partially offset by a higher provision for credit losses, employee-separation expenses, and unfavorable financing spreads.]

The cost of sales to net sales ratio for [removed: 2019] [added: 2020] was [removed: 76.8] [added: 75.7] percent, compared with [removed: 76.7] [added: 76.8] percent for [removed: 2018.][added: 2019.]

The cost of sales to net sales ratio [removed: increased] [added: decreased] compared to [removed: 2018] [added: 2019] mainly due to [removed: higher] [added: price realization, improved] production costs, [added: and lower warranty expenses, partially offset by impairments, employee-separation expenses (see Note 5), and] the unfavorable effects of foreign currency [removed: exchange, and a less favorable product mix, partially offset by price realization.][added: exchange.]

Additional information on fiscal [removed: 2019] [added: 2020] results is presented on pages [removed: 22] [added: 24] – [removed: 24.][added: 27.]

The segment consolidates all markets into four geographical customer focus areas to [removed: facilitate deep customer understanding and] deliver [removed: world-class] [added: measurable] customer [removed: service.][added: value.]

[removed: The segment’s operations are consolidated into five product platforms — crop harvesting (combines,] [added: This equipment includes large, medium and utility tractors and related attachments; tractor loaders; combines;] cotton [removed: pickers,] [added: pickers;] cotton [removed: strippers, and] [added: strippers;] sugarcane [removed: harvesters,] [added: harvesters;] related harvesting front-end [removed: equipment,] [added: equipment;] sugarcane [removed: loaders and] [added: loaders;] pull-behind [removed: scrapers);] [added: scrapers;] turf and utility [removed: (utility vehicles,] [added: equipment, including] riding lawn equipment, [removed: walk-behind mowers,] commercial mowing equipment, golf course equipment, [added: utility vehicles,] implements for mowing, tilling, snow and debris handling, aerating and many other residential, commercial, golf and sports turf care applications and other outdoor power [removed: products);] [added: products;] hay and forage [removed: (self-propelled] [added: equipment, including self-propelled] forage harvesters and attachments, balers and [removed: mowers); crop care (tillage,] [added: mowers; and tillage,] seeding and application equipment, including sprayers, nutrient management and soil preparation [removed: machinery); and tractors (loaders and large, medium and utility tractors and related attachments).][added: machinery.]

The segment also provides integrated [added: agricultural solutions and] precision [removed: agriculture] technologies across its portfolio of large equipment.

[added: John Deere’s advanced telematics systems remotely] connect agricultural equipment owners, business managers and dealers to agricultural equipment in the field, providing real-time alerts and information about equipment location, utilization, performance and maintenance to improve productivity and efficiency.

The segment also manufactures and sells sprayers under the Hagie and Mazzotti brand names, planters and cultivators under the Monosem brand name, sprayers and planters under the PLA brand name, [added: and] carbon fiber sprayer booms under the King Agro brand [removed: name, and walk-behind mowers and scarifiers in select European countries under the SABO brand] name.

A large proportion of the equipment operations’ total agricultural equipment sales in the U.S. and Canada, and a [removed: significant] [added: large] proportion of sales in many countries outside the U.S. and Canada, are comprised of tractors over 100 horsepower, self-propelled combines, self-propelled cotton pickers, self-propelled forage harvesters, self-propelled sprayers and seeding equipment.

However, small tractors are an [removed: increasingly] important part of our global tractor business.

Dealers can use these funds to defray the costs of carrying or marketing used equipment inventory or to provide [removed: financing] incentives to customers purchasing the used equipment.

John Deere also manufactures and distributes [removed: road building] [added: roadbuilding] equipment through its wholly-owned subsidiaries of the Wirtgen Group.

The construction and forestry machines are distributed under the John Deere brand name, except for the Wirtgen Group products, which are manufactured and distributed under six brand names: Wirtgen, Vögele, Hamm, [added: Kleeman, Benninghoven, and Ciber.]

The segment also provides [removed: comprehensive fleet management] [added: advanced connectivity and] telematics solutions designed to improve customer [removed: productivity] [added: productivity, efficiency,] and [removed: efficiency] [added: worksite management] through access to fleet location, utilization, [added: performance,] and maintenance information.

The prevailing levels of residential, commercial and public construction, [added: investment in infrastructure,] and the condition of the forestry products industry influence retail sales of John Deere construction, earthmoving, [removed: road building,] [added: roadbuilding,] material handling, and forestry equipment.

General economic conditions, the level of interest rates, the availability of credit and certain commodity prices, such as [added: oil and gas and] those applicable to pulp, paper and saw logs also influence sales.

The segment has a number of initiatives in the rent-to-rent, or short-term rental, market for construction, earthmoving, [removed: road building,] [added: roadbuilding,] and material handling equipment.

The competitive environment for the agriculture and turf segment includes some global competitors, including AGCO Corporation, CLAAS KGaA mbH, CNH [removed: Global] [added: Industrial] N.V., Kubota Tractor Corporation, Mahindra, and The Toro Company and many regional and local competitors.

[removed: Because of] [added: The agricultural equipment] industry [removed: conditions, including the merger of certain large integrated competitors] [added: continues to undergo significant changes] and [added: is becoming even more competitive through] the emergence and expanding global capability of many competitors, particularly in [removed: emerging and] high potential markets such as [removed: Brazil, China,] [added: Brazil] and India where John Deere seeks to increase market [removed: share, the agricultural equipment business continues to undergo significant change and is becoming even more competitive.][added: share.]

Global competitors of the construction and forestry segment include Caterpillar Inc., CNH [removed: Global] [added: Industrial] N.V., Doosan Infracore Co., Ltd. and its subsidiary Doosan Bobcat Inc., Fayat Group, Komatsu Ltd., Kubota Tractor Corporation, Ponsse Plc, [added: SANY Group Co., Ltd.,] Terex, Tigercat Industries Inc., Volvo Construction Equipment (part of Volvo Group AB) and XCMG.

The forestry and [removed: road building] [added: roadbuilding] businesses operate globally.

The segment manufactures over 90 percent of the types of construction equipment used in the U.S. and Canada, including construction, forestry, earthmoving, [removed: road building,] [added: roadbuilding,] and material handling equipment.

Full year industry sales in Europe are forecast to be about the same as 2020 to 5 percent higher.

In South America, industry sales of tractors and combines are forecast to be about 5 percent higher while Asian sales are expected to be slightly lower than 2020.

_Construction and Forestry._ Full year 2021 North American construction equipment industry sales are expected to be down about 5 percent with sales of compact equipment up about 5 percent.

_Financial Services._ Results for the full year 2021 are expected to benefit from favorable financing spreads, lower losses on operating lease residual values, and income earned on a higher average portfolio, partially offset by a higher provision for credit losses.

Net income in 2020 was negatively affected by impairment charges and employee-separation costs of $458 million after-tax (see Notes 4 and 5).

In 2019, the similar charges were $82 million.

In addition, the provision for income taxes was adversely affected by non-deductible impairments and charges in 2020 and less favorably affected by discrete adjustments in 2020 than in 2019.

These items were partially offset by lower sales volumes / mix, employee-separation expenses, impairments, and the unfavorable effects of currency exchange.

Construction and Forestry’s operating profit declined mainly due to lower sales volume / mix, employee-separation expenses, impairments, and the unfavorable effects of currency exchange.

The operating profit decrease was partially offset by price realization, lower research and development expenses, reduced selling, administrative and general expenses, and improved production costs.

The equipment operations’ provision for income taxes and net income were adversely affected by non-deductible impairments and charges in 2020 and less favorably affected by discrete adjustments to the provision for income taxes in 2020 than in 2019.

Beginning in fiscal 2021, the segment’s operations are organized around the systems used by customers to produce output.

These production systems include large grains (such as corn and soy), small grains (such as wheat, oats, and barley), sugarcane, and cotton.

John Deere has developed a unique, system-level approach designed to improve customer profitability, productivity, and sustainability.

This approach includes precise global navigation satellite systems technology, advanced connectivity and telematics, on-board sensors and

computing power, automation software, digital tools, and applications and analytics that together enable seamless integration of information, designed to improve customer decision making and execution of jobs.

The segment also sells sugarcane harvester aftermarket parts under the Unimil brand name.

These customers are increasingly adopting and integrating precision agricultural technologies like guidance, telematics, and data management in their operations.

As technology becomes increasingly important to enable productivity in agriculture, the industry is attracting non-traditional competitors including more technology-focused companies and start-up ventures.

sales, service, and administration office located in Nashville, Tennessee.

In fiscal 2020, some of John Deere’s operations were temporarily impacted by certain material or component shortages due to the COVID-19 pandemic (COVID).

Backlog orders for the agricultural and turf and construction and forestry segments include all orders deemed to be firm as of the referenced date.

The Company was in compliance with all of its obligations under this agreement as of November 1, 2020, and no payments were required under this agreement in fiscal 2020 or 2019.

The Company does not expect to incur material capital expenditures for environmental control facilities during fiscal 2021.

GOVERNMENT REGULATIONS

John Deere is subject to a wide variety of local, state, and federal laws and regulations in the countries where it conducts business.

Compliance with these laws and regulations often requires the dedication of time and effort of employees, as well as financial resources.

In fiscal 2020, compliance with the regulations applicable to John Deere did not have a material effect on John Deere’s capital expenditures, earnings, or competitive position.

Additional information about the impact of government regulations on John Deere’s business is included in Item 1A.

“Risk Factors” under the headings Geopolitical Uncertainties; Data Security and Privacy; Environmental, Climate and Weather Risks; and Bribery and Corruption Risks.

HUMAN CAPITAL

John Deere’s employees, its human capital, are guided by the company’s higher purpose: We run so life can leap forward.

The employees are further guided by the company’s code of business conduct, helping them to uphold and strengthen the standards of honor and integrity that have defined John Deere since its founding.

In their everyday work, employees embody John Deere’s core values of integrity, quality, commitment and innovation, and in doing so, directly contribute to the company’s long-standing character and reputation.

Employees take pride in their work and value learning from one another.

While they hold many values in common, John Deere employees appreciate different perspectives and embrace the opportunity to work with those of diverse backgrounds.

John Deere encourages employees to become involved in their communities and many employees do contribute their time and talents to community efforts.

John Deere’s employees contribute to the company’s efforts to provide a safe and healthy workplace for all, especially through 2020.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

Net income attributable to Deere & Company for fiscal 2020 is forecast to be in a range of $2.7 billion to $3.1 billion.

_Agriculture & Turf._ The Company’s worldwide sales of agriculture and turf equipment are forecast to be down about 5 to 10 percent for fiscal-year 2020, including price realization of 2 percent and a negative currency-translation effect of 1 percent.

Full-year industry sales in the European Union (EU28) member nations are forecast to be about the same as are South American industry sales of tractors and combines.

_Construction & Forestry._ The Company’s worldwide sales of construction and forestry equipment are anticipated to be down about 10 to 15 percent for 2020, with price realization having a favorable effect of 1 percent and foreign-currency translation having an unfavorable effect of 1 percent.

The outlook reflects slowing construction activity as well as the Company’s efforts to assist dealers to manage their inventory levels.

In forestry, global industry sales are expected to be about the same as 2019.

Net income is expected to benefit from lower losses on lease residual values as well as income earned on a higher average portfolio.

These items are forecast to be partially offset by a higher provision for credit losses, less-favorable financing spreads, and higher selling and administrative expenses.

Wirtgen results are included for the full year while 2018 contained ten months of Wirtgen activity.

The two additional months added about 1 percent to the Company’s 2019 net sales.

Construction & Forestry sales were higher for 2019 primarily due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation.

The inclusion of Wirtgen’s sales for two additional months in 2019 accounted for about 4 percent of Construction & Forestry’s net sales increase.

Wirtgen’s operating profit was $343 million for 2019, compared with $116 million for 2018.

Excluding Wirtgen, Construction & Forestry’s operating profit was higher in 2019 primarily driven by price realization and higher shipment volumes, partially offset by higher production costs and a less-favorable sales mix.

Net income was favorably affected by discrete adjustments to the provision for income taxes of $65 million related to U.S. tax reform legislation (tax reform), while adjustments related to tax reform had an unfavorable impact of $1.045 billion for fiscal 2018.

The financial services operations reported net income attributable to the Company of $539 million for fiscal 2019 compared with $942 million in fiscal 2018.

John Deere has developed a leading approach to precision agriculture technology through advanced communications and telematics, on board sensors and computers, and precise global navigation satellite systems technology to enable farmers to better control input costs and yields, improve soil conservation, minimize chemical use, and to gather information.

John Deere’s advanced telematics systems remotely

Kleeman, Benninghoven, and Ciber.

In fiscal 2019, no significant work stoppages occurred due to shortages of raw materials or other commodities.

By the end of fiscal 2019, John Deere produced and shipped its construction and forestry equipment on average within approximately 90 days after an order was deemed to become firm.

offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts).

For fiscal 2019 and 2018, Capital Corporation’s ratios were 1.51 to 1 and 1.78 to 1, respectively, and never less than 1.36 to 1 and 1.69 to 1 for any fiscal quarter of 2019 and 2018, respectively.

No payments were required under this agreement in fiscal 2019 or 2018.

identified or will identify all adverse environmental conditions.

EMPLOYEES

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Samuel R. Allen | | 66 | | Chairman | | 2010 | | 2010 – 2019 Chairman and Chief Executive Officer ​ | |

| James M. Field | ​ | 56 | ​ | President, Worldwide Construction & Forestry and Power Systems | ​ | 2019 | ​ | 2018 – 2019 President, Worldwide Construction & Forestry Division, 2012 – 2018 President, Agriculture & Turf Division-Global Harvesting & Turf Platforms, Americas and Australia ​ | |

Item 103 of Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that the Company reasonably believes could exceed [removed: $100,000.][added: $300,000.]

The following matter is disclosed solely pursuant to that requirement: on October 3, 2018, the Provincia Santa Fe Ministerio de Medio Ambiente [added: of Argentina] issued a Notice of Violation to Industrias John Deere Argentina in connection with alleged groundwater contamination at the site; the Company [removed: continues to work] [added: worked] with the appropriate authorities to implement corrective actions to remediate the site.

On December 16, 2019, the Provincia Santa Fe Ministerio de Medio Ambiente issued a Notice of Fine.

The current amount of the fine is approximately $354,000.

The Company has filed an appeal with the Provincia Santa Fe Ministerio de Medio Ambiente.

For the fiscal year ended November [removed: 3, 2019][added: 1, 2020]

The aggregate quoted market price of voting stock of registrant held by non-affiliates at [removed: April 26, 2019] [added: May 1, 2020] was [removed: $52,198,315,583.][added: $43,155,250,076.]

At November 30, [removed: 2019, 313,275,755] [added: 2020, 313,361,302] shares of common stock, $1 par value, of the registrant were outstanding.

Portions of the proxy statement for the annual meeting of stockholders to be held on February [removed: 26, 2020] [added: 24, 2021] are incorporated by reference into Part III of this Form 10-K.

| [ITEM 1A.](#Item1a_RiskFactors__194719) | [RISK FACTORS](#Item1a_RiskFactors__194719) | [removed: 10] [added: 11] |

| [ITEM 1B.](#Item1b_UnresolvedStaffComments__194818) | [UNRESOLVED STAFF COMMENTS](#Item1b_UnresolvedStaffComments__194818) | [removed: 17] [added: 19] |

| [ITEM 2.](#Item2_Properties__194819) | [PROPERTIES](#Item2_Properties__194819) | [removed: 17] [added: 19] |

| [ITEM 3.](#Item3_LegalProceedings__194821) | [LEGAL PROCEEDINGS](#Item3_LegalProceedings__194821) | [removed: 18] [added: 19] |

| [ITEM 4.](#Item4_MineSafetyDisclosures__194822) | [MINE SAFETY DISCLOSURES](#Item4_MineSafetyDisclosures__194822) | [removed: 18] [added: 20] |

| [ITEM 5.](#Item5_MarketForRegistrantsCommonE_194831) | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](#Item5_MarketForRegistrantsCommonE_194831) | [removed: 18] [added: 20] |

| [ITEM 6.](#Item6_SelectedFinancialData__200525) | [SELECTED FINANCIAL DATA](#Item6_SelectedFinancialData__200525) | [removed: 19] [added: 20] |

| [ITEM 7.](#Item7_ManagementsDiscussionAndAna_200608) | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#Item7_ManagementsDiscussionAndAna_200608) | [removed: 19] [added: 21] |

| [ITEM 7A.](#Item7a_QuantitativeAndQualitative_200609) | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#Item7a_QuantitativeAndQualitative_200609) | [removed: 19] [added: 21] |

| [ITEM 8.](#Item8_FinancialStatementsAndSuppl_200627) | [FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#Item8_FinancialStatementsAndSuppl_200627) | [removed: 19] [added: 21] |

| [ITEM 9.](#Item9_ChangesInAndDisagreementsWi_200628) | [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](#Item9_ChangesInAndDisagreementsWi_200628) | [removed: 19] [added: 21] |

| [ITEM 9A.](#Item9a_ControlsAndProcedures__200629) | [CONTROLS AND PROCEDURES](#Item9a_ControlsAndProcedures__200629) | [removed: 19] [added: 21] |

| [ITEM 9B.](#Item9b_OtherInformation__200633) | [OTHER INFORMATION](#Item9b_OtherInformation__200633) | [removed: 20] [added: 21] |

| [ITEM 10.](#Item10_DirectorsExecutiveOfficers_200634) | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](#Item10_DirectorsExecutiveOfficers_200634) | [removed: 20] [added: 21] |

| [ITEM 11.](#Item11_ExecutiveCompensation__200641) | [EXECUTIVE COMPENSATION](#Item11_ExecutiveCompensation__200641) | [removed: 20] [added: 22] |

| [ITEM 12.](#Item12_SecurityOwnershipOfCertain_200642) | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](#Item12_SecurityOwnershipOfCertain_200642) | ​ [removed: 20] [added: 22] |

| [ITEM 13.](#Item13_CertainRelationshipsAndRel_200647) | [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](#Item13_CertainRelationshipsAndRel_200647) | [removed: 20] [added: 22] |

| [ITEM 14.](#Item14_PrincipalAccountantFeesAnd_200653) | [PRINCIPAL ACCOUNTANT FEES AND SERVICES](#Item14_PrincipalAccountantFeesAnd_200653) | [removed: 20] [added: 22] |

| [ITEM [removed: 15.](#Item15_ExhibitsAndFinancialStatementSche)] [added: 15.](#Partiv_200742)] | [EXHIBITS AND FINANCIAL STATEMENT [removed: SCHEDULES](#Item15_ExhibitsAndFinancialStatementSche)] [added: SCHEDULES](#Partiv_200742)] | [removed: 21] [added: 23] |

| [ITEM 16.](#Item16_Form_10K_Summary) | [FORM 10-K SUMMARY](#Item16_Form_10K_Summary) | [removed: 21] [added: 23] |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

(Check one):

Outside the U.S. and Canada, the equipment operations also own or lease and occupy [removed: 14] [added: 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 [removed: and] [added: or] leases [removed: 16] [added: 12] facilities for the manufacture and distribution of other brands of replacement parts.

The Company owns [removed: and] [added: or] leases [removed: 37] [added: 40] administrative offices and research facilities globally and many other smaller, miscellaneous facilities globally.

Overall, John Deere owns approximately [removed: 67.5] [added: 67.0] million square feet of facilities and leases approximately [removed: 10.3] [added: 10.2] million additional square feet in various locations.

| (a) | The Company’s common stock is listed on the New York Stock Exchange under the symbol “DE”. See the information concerning the number of stockholders and the data on dividends declared and paid per share in Notes [removed: 30] [added: 29] and [removed: 31] [added: 30] to the Consolidated Financial Statements. |

| (c) | The Company’s purchases of its common stock during the fourth quarter of [removed: 2019] [added: 2020] were as follows: |

| ​ | ​ | Purchased | ​ | Paid Per | | ​ | or Programs (1) | ​ | Programs [removed: (1)(3)] [added: (1)] | |

| Period | ​ | [removed: (thousands) (2)] [added: (thousands)] | ​ | Share | | ​ | (thousands) | ​ | (millions) | |

| (1) | [removed: During the fourth quarter of 2019, the] [added: The] Company [removed: had] [added: announced] a share repurchase plan [removed: that was announced] in December 2013 to purchase up to $8,000 million of shares of the Company’s common stock. [added: In December 2019, the Company announced an additional share repurchase plan authorizing the purchase of up to an additional $8,000 million of shares of the Company’s common stock.] The maximum number of shares [removed: above] that may yet be purchased under [removed: the $8,000 million plan] [added: these two plans] was based on the end of the fourth quarter closing share price of [removed: $176.11] [added: $225.91] per share. At the end of the fourth quarter of [removed: 2019, $1,075] [added: 2020, $8,339] million of common stock remains to be purchased under this plan. |

| Aug 3 to Aug 30 | | ​ | ​ | ​ | ​ | | ​ | | 39.1 | ​ |

| Aug 31 to Sept 27 | | 925 | ​ | $ | 216.22 | | 925 | | 38.2 | ​ |

| Sept 28 to Nov 1 | | 1,231 | ​ | | 232.72 | | 1,231 | | 36.9 | ​ |

| Total | | 2,156 | ​ | ​ | ​ | | 2,156 | ​ | ​ | ​ |

| --- | --- |

| Jul 29 to Aug 25 | | 596 | ​ | $ | 152.30 | | 595 | | 7.7 | ​ |

| Aug 26 to Sept 29 | | 1,082 | ​ | | 158.80 | | 1,082 | | 6.7 | ​ |

| Sept 30 to Nov 3 | | 654 | ​ | | 169.40 | | 654 | | 6.1 | ​ |

| Total | | 2,332 | ​ | ​ | ​ | | 2,331 | ​ | ​ | ​ |

| (2) | In the fourth quarter of 2019, approximately 1 thousand shares were purchased from plan participants to pay payroll taxes on certain restricted stock awards. The shares were valued at a weighted-average market price of $158.70. |

| (3) | In December 2019, the Board of Directors authorized the repurchase of up to $8,000 million of additional common stock. This additional repurchase amount may be repurchased after November 3, 2019 and is not included in the amounts above (see Note 31). |

| ​ | ​ | November [added: 1 | | ​ | November] 3 | | ​ | October 28 | | ​ | October 29 | | ​ | October 30 | | ​ | [removed: November 1 | | ​ |]

| (Millions of dollars except per share amounts) | | [added: 2020 | | |] 2019 | | | 2018 | | | 2017 | | | 2016 | | | [removed: 2015 | | |]

| Total net sales and revenues | ​ | $ | [removed: 39,258] [added: 35,540] | ​ | $ | [removed: 37,358] [added: 39,258] | ​ | $ | [removed: 29,738] [added: 37,358] | ​ | $ | [removed: 26,644] [added: 29,738] | ​ | $ | [removed: 28,863] [added: 26,644] | ​ |

| Net income attributable to Deere & Company | ​ | $ | [removed: 3,253] [added: 2,751] | ​ | $ | [removed: 2,368] [added: 3,253] | ​ | $ | [removed: 2,159] [added: 2,368] | ​ | $ | [removed: 1,524] [added: 2,159] | ​ | $ | [removed: 1,940] [added: 1,524] | ​ |

| Net income per share — basic | ​ | $ | [removed: 10.28] [added: 8.77] | ​ | $ | [removed: 7.34] [added: 10.28] | ​ | $ | [removed: 6.76] [added: 7.34] | ​ | $ | [removed: 4.83] [added: 6.76] | ​ | $ | [removed: 5.81] [added: 4.83] | ​ |

| Net income per share — diluted | ​ | $ | [removed: 10.15] [added: 8.69] | ​ | $ | [removed: 7.24] [added: 10.15] | ​ | $ | [removed: 6.68] [added: 7.24] | ​ | $ | [removed: 4.81] [added: 6.68] | ​ | $ | [removed: 5.77] [added: 4.81] | ​ |

| Dividends declared per share | ​ | $ | 3.04 | ​ | $ | [removed: 2.58] [added: 3.04] | ​ | $ | [removed: 2.40] [added: 2.58] | ​ | $ | 2.40 | ​ | $ | 2.40 | ​ |

| Total assets | ​ | $ | [removed: 73,011] [added: 75,091] | ​ | $ | [removed: 70,108] [added: 73,011] | ​ | $ | [removed: 65,786] [added: 70,108] | ​ | $ | [removed: 57,918] [added: 65,786] | ​ | $ | [removed: 57,883] [added: 57,918] | ​ |

| Long-term borrowings | ​ | $ | [removed: 30,229] [added: 32,734] | ​ | $ | [removed: 27,237] [added: 30,229] | ​ | $ | [removed: 25,891] [added: 27,237] | ​ | $ | [removed: 23,703] [added: 25,891] | ​ | $ | [removed: 23,775] [added: 23,703] | ​ |

See the Consolidated Financial Statements and notes thereto and supplementary data on pages [removed: 33] [added: 39] – [removed: 75.][added: 81.]

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of November [removed: 3, 2019,] [added: 1, 2020,] based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of November [removed: 3, 2019,] [added: 1, 2020,] 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 November [removed: 3, 2019,] [added: 1, 2020,] the Company’s internal control over financial reporting was effective.

The information regarding directors required by Item 401(a) of Regulation S-K in the definitive proxy statement for the annual meeting of stockholders to be held on February [removed: 26, 2020] [added: 24, 2021] (proxy statement), under the [removed: captions] [added: caption] "Item 1 — Election of Directors" is incorporated herein by reference.

The information regarding reports required by Item 405(a) of Regulation S-K in the proxy statement under the caption “Delinquent Section 16(a) Reports” is incorporated herein by reference.

| ​ | [Statement of Consolidated Income for the years ended November [added: 1, 2020, November] 3, 2019, [removed: October 28, 2018,] and October [removed: 29, 2017](#StatementOfConsolidatedIncom_162154)] [added: 28, 2018](#StatementOfConsolidatedIncom_162154)] | [removed: 33] [added: 39] |

| ​ | [Statement of Consolidated Comprehensive Income for the years ended November [added: 1, 2020, November] 3, 2019, [removed: October 28, 2018,] and October [removed: 29, 2017](#StatementOfConsolidatedComprehens_162202)] [added: 28, 2018](#StatementOfConsolidatedComprehens_162202)] | [removed: 34] [added: 40] |

| ​ | [Consolidated Balance Sheet as of November [removed: 3, 2019] [added: 1, 2020] and [removed: October 28, 2018](#ConsolidatedBalanceSheet)] [added: November 3, 2019](#ConsolidatedBalanceSheet)] | [removed: 35] [added: 41] |

| ​ | [Statement of Consolidated Cash Flows for the years ended November [added: 1, 2020, November] 3, 2019, [removed: October 28, 2018,] and October [removed: 29, 2017](#StatementOfConsolidatedCashF_162215)] [added: 28, 2018](#StatementOfConsolidatedCashF_162215)] | [removed: 36] [added: 42] |

| ​ | [Statement of Changes in Consolidated Stockholders’ Equity for the years ended October [removed: 29, 2017, October] 28, 2018, [removed: and] November 3, [removed: 2019](#StatementOfChangesInConsolidatedS_162223)] [added: 2019, and November 1, 2020](#StatementOfChangesInConsolidatedS_162223)] | [removed: 37] [added: 43] |

| ​ | [Notes to Consolidated Financial [removed: Statements](#Notes_to_Financial_Statements)] [added: Statements](#Item15_ExhibitsAndFinancialStatementSche)] | [removed: 38] [added: 44] |

| ​ | See the “[Index to Exhibits](#IndexToExhibits_072013)” on pages [removed: 80] [added: 86] – [removed: 82] [added: 89] of this report | ​ |

NOVEMBER [added: 1, 2020, NOVEMBER] 3, 2019, [removed: OCTOBER 28, 2018,] AND OCTOBER [removed: 29, 2017][added: 28, 2018]

The equipment operations manufacture and distribute a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, [removed: road building,] [added: roadbuilding,] and forestry.

The company’s agriculture and turf equipment sales [removed: increased 2] [added: decreased 6] percent in [removed: 2019 and are forecast to decrease 5 to 10 percent for] 2020.

Industry agricultural machinery sales in the U.S. and Canada for [removed: 2020] [added: 2021] are forecast to [removed: decline about] [added: increase] 5 [added: to 10] percent, compared to [removed: 2019.][added: 2020.]

Industry sales in [added: Europe are forecast to be about] the [removed: European Union (EU)28 member nations] [added: same to 5 percent higher,] and South American industry sales of tractors and combines are forecast to be about [removed: the same] [added: 5 percent higher] in [removed: 2020.][added: 2021.]

Asian sales are also forecast to be [removed: about the same in 2020.][added: slightly lower.]

Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the [removed: same.][added: same to 5 percent higher.]

The company’s construction and forestry sales [removed: increased 10] [added: decreased 20] percent in [removed: 2019.][added: 2020.]

Global forestry industry sales are expected to be about the same [removed: as 2019] [added: to about 5 percent higher than 2020] sales.

Items of concern include [removed: trade agreements, the] uncertainty of the effectiveness of governmental [added: and private sector] actions [removed: in respect] to [added: address COVID, trade agreements, the uncertainty of the results of] monetary and fiscal policies, the impact of [added: elevated levels of] sovereign [removed: debt, Eurozone] and [removed: Argentine issues,] [added: state debt,] capital market disruptions, changes in demand and pricing for [added: new and] used equipment, and geopolitical events.

| ​ | ​ | [added: 2020 | | ​ |] 2019 | | [removed: ​] [added: ​] | 2018 | | ​ | [added: 2020 | | ​ | 2019 | | ​ | 2018 | | ​ | 2020 | | ​ | 2019 | | ​ | 2018 | | ​ | 2020 | | ​ | 2019 | | ​ | 2018 | | ​ | ​ | ​ |]

| [removed: Net income attributable] [added: Net Income Attributable] to Deere & [removed: Company] [added: Company] | [added: ​ | $ | 2,751 |] ​ | $ | 3,253 | ​ | $ | 2,368 | ​ |

| Diluted earnings per share | ​ | ​ | [removed: 10.15] [added: 8.69] | ​ | ​ | [removed: 7.24] [added: 10.15] | ​ |

| Basic earnings per share | ​ | ​ | [removed: 10.28] [added: 8.77] | ​ | ​ | [removed: 7.34] [added: 10.28] | ​ |

| ​ | ​ | [removed: 2019] [added: 2020] | | [removed: ​] [added: ​] | [removed: 2018] [added: 2019] | | [removed: ​] [added: ​] | % Change | ​ |

| Worldwide net sales and revenues | ​ | $ | [removed: 39,258] [added: 35,540] | ​ | $ | [removed: 37,358] [added: 39,258] | ​ | [removed: +5] [added: \-9] | ​ |

| Worldwide equipment operations net sales | ​ | ​ | [removed: 34,886] [added: 31,272] | ​ | ​ | [removed: 33,351] [added: 34,886] | ​ | [removed: +5] [added: \-10] | ​ |

| Currency translation (unfavorable) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | [removed: \-3] [added: \-2] | ​ |

| U.S. and Canada equipment operations net sales | ​ | ​ | [removed: 20,264] [added: 17,954] | ​ | ​ | [removed: 18,847] [added: 20,264] | ​ | [removed: +8] [added: \-11] | ​ |

| Outside U.S. and Canada equipment operations net sales | ​ | ​ | [removed: 14,622] [added: 13,318] | ​ | ​ | [removed: 14,504] [added: 14,622] | ​ | [removed: +1] [added: \-9] | ​ |

| Currency translation (unfavorable) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | [removed: \-5] [added: \-4] | ​ |

| Equipment operations operating profit | ​ | $ | [removed: 3,721] [added: 3,559] | ​ | $ | [removed: 3,684] [added: 3,721] | ​ | [removed: +1] [added: \-4] | ​ |

| Equipment operations net [removed: income] [added: income*] | ​ | ​ | [removed: 2,698] [added: 2,185] | ​ | ​ | [removed: 1,404] [added: 2,714] | ​ | [removed: +92] [added: \-19] | ​ |

| Financial services net income | ​ | ​ | [removed: 539] [added: 566] | ​ | ​ | [removed: 942] [added: 539] | ​ | [removed: \-43] [added: +5] | ​ |

The discussion on net sales and operating profit [removed: are] [added: is] included in the Business Segment and Geographic Area Results below.

[removed: Excluding the tax reform adjustments, the financial] [added: Financial] services segment net income [removed: decreased] [added: increased] compared to [removed: 2018] [added: 2019 mainly] due to [added: lower] impairments and [removed: higher] [added: reduced] losses on operating lease residual values and [removed: unfavorable financing spreads, partially offset by] income earned on a higher average [removed: portfolio.][added: portfolio, partially offset by a higher provision for credit losses, employee-separation expenses, and unfavorable financing spreads.]

| Cost of sales to net sales | ​ | ​ | [removed: 76.8%] [added: 75.7%] | ​ | ​ | [removed: 76.7%] [added: 76.8%] | ​ | ​ | ​ |

| Finance and interest income | ​ | [removed: $] | [removed: 3,493] [added: 3,450] | ​ | [removed: $] | [removed: 3,107] [added: 3,493] | ​ | [removed: +12] | [added: 3,107 |] ​ |

| Research and development expenses | ​ | ​ | [added: 1,644 | ​ | ​ |] 1,783 | ​ | ​ | 1,658 | ​ | [removed: +8] [added: ​] | ​ | [added: ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 1,644 | ​ | ​ | 1,783 | ​ | ​ | 1,658 | ​ | ​ | ​ |]

| Selling, administrative and general expenses | ​ | [removed: ​] | [removed: 3,551] [added: 3,477] | ​ | [removed: ​] | [removed: 3,455] [added: 3,551] | ​ | [removed: +3] | [added: 3,455 |] ​ |

| Interest expense | ​ | [removed: ​] | [removed: 1,466] [added: 1,247] | ​ | [removed: ​] | [removed: 1,204] [added: 1,466] | ​ | [removed: +22] | [added: 1,204 |] ​ |

| Other operating expenses | ​ | [removed: ​] | [removed: 1,578] [added: 1,612] | ​ | [removed: ​] | [removed: 1,399] [added: 1,578] | ​ | [removed: +13] | [added: 1,399 |] ​ |

The cost of sales to net sales ratio [removed: increased] [added: decreased] compared to [removed: 2018] [added: 2019] mainly due to [removed: higher] [added: price realization, improved] production costs, [added: and lower warranty expenses, partially offset by impairments, employee-separation expenses (see Note 5), and] the unfavorable effects of foreign currency [removed: exchange, and a less favorable product mix, partially offset by price realization.][added: exchange.]

Selling, administrative and general expenses [removed: increased] [added: decreased] primarily due to [removed: employee separation costs] [added: spending reductions] and [removed: acquisition related amortization, partially offset by] the favorable effects of currency [removed: translation] [added: translation, mostly offset by employee-separation expenses (see Note 5)] and [removed: lower incentive compensation.][added: an increase in the provision for credit losses.]

Interest expense [removed: increased] [added: decreased] in [removed: 2019] [added: 2020] due to [removed: higher] [added: lower] average borrowing [removed: rates and] [added: rates, partially offset by] higher average borrowings.

The company’s costs for these plans in [removed: 2019] [added: 2020] were [removed: $235] [added: $341] million, compared with [removed: $353] [added: $235] million in [removed: 2018.][added: 2019.]

The long-term expected return on plan assets, which is reflected in these costs, was an expected gain of [removed: 6.5] [added: 6.4] percent in [removed: 2019] [added: 2020] and [removed: 6.8] [added: 6.5] percent in [removed: 2018,] [added: 2019,] or [removed: $838] [added: $869] million and [removed: $797] [added: $838] million, respectively.

The actual return was a gain of [removed: $2,163] [added: $1,177] million in [removed: 2019] [added: 2020] and [removed: $322] [added: $2,163] million in [removed: 2018.][added: 2019.]

In [removed: 2020,] [added: 2021,] the expected return will be approximately [removed: 6.4] [added: 5.9] percent.

The company’s costs under these plans in [removed: 2020] [added: 2021] are expected to [removed: increase] [added: decrease] approximately [removed: $75] [added: $150] million.

The equipment operations represents the enterprise without financial services.

On an industry basis, North American construction equipment sales are expected to be down about 5 percent with sales of compact equipment up about 5 percent.

The future financial effects of COVID are unknown due to many factors.

As a result, predicting the company’s forecasted financial performance is difficult and subject to many assumptions.

In the face of the ongoing challenges associated with managing the global pandemic, the company was able to complete a successful year and is positioned to continue providing differentiated solutions for customers.

The company expects to benefit from improving conditions in the farm economy and stabilization in construction and forestry markets.

In addition, the manufacturing location and product reviews that started in 2020 as part of the company’s transition to an updated strategy will continue in 2021.

COVID Effects and Actions

During 2020, the effects of COVID and the related actions of governments and other authorities to contain COVID, have affected the company’s operations, results, cash flows, and forecasts.

The U.S. government and many other governments in countries where the company operates have designated the company an essential critical infrastructure business.

This designation allows the company to operate in support of its customers to the extent possible.

The company’s first priority in addressing the effects of COVID continues to be the health, safety, and overall welfare of its employees.

The company effectively activated previously established business continuity plans and proactively implemented health and safety measures at its operations around the world.

The economic effects of COVID have reduced customer demand for some of the company’s products and services, particularly construction and forestry equipment (see Note 6), which resulted in lower shipment volumes.

During most of 2020, all of the company’s factories have operated, some at reduced capacity due to component shortages or lower demand.

During the year, the company broadened the supply base and increased the inventory level of certain essential materials and components to address potential supplier issues.

The measures taken beginning in the second quarter to aggressively decrease operational and selling, administrative and general expenses have been effective.

Additional information is presented in “Business Segment and Geographic Area Results.”

In addition, the company’s actions taken in the second quarter to increase borrowings, along with significant cash generated from operations, provided a strong financial position (see Note 20 for additional information on long-term borrowings).

Cash and cash equivalents were $7,066 million at November 1, 2020 and the company’s revolving credit facilities were undrawn.

The company’s share repurchase programs were suspended in the second quarter and all of the third quarter.

These programs were reinstated in the fourth quarter with $487 million of shares repurchased.

Additional information is presented in “Capital Resources and Liquidity.”

The company continued to work closely with distribution channel and equipment user customers during 2020, and, as necessary, provided short-term payment relief on obligations owed to the company.

The payment relief provided on balances of trade receivables, financing receivables, and operating lease payments outstanding at November 1, 2020 was about 2 percent, 4 percent,

and 4 percent of the portfolio balances, respectively.

Additional information is presented in Notes 13 and 25.

2020 COMPARED WITH 2019

Net income in 2020 was negatively affected by impairment charges and employee-separation costs of $458 million after-tax (see Notes 4 and 5).

Annual savings from the separation programs are estimated to be approximately $250 million, of which $85 million was realized in 2020.

In 2019, the similar charges were $82 million.

In addition, the provision for income taxes was adversely affected by non-deductible impairments and charges in 2020 and less favorably affected by discrete adjustments in 2020 than in 2019.

| ​ | ​ | 2020 | | ​ | 2019 | | ​ | % Change | ​ |

*Includes equity income (loss) from unconsolidated affiliates.

The equipment operations’ provision for income taxes and net income were adversely affected by non-deductible impairments and charges in 2020 and was less favorably affected by discrete adjustments to the provision for income taxes in 2020 than in 2019.

| ​ | ​ | 2020 | | ​ | 2019 | | ​ | % Change | ​ |

| Other income | ​ | ​ | 818 | ​ | ​ | 879 | ​ | \-7 | ​ |

Finance and interest income decreased slightly in 2020 due to lower average interest rates, largely offset by a higher average credit portfolio.

Other income declined primarily due to lower service income compared to 2019.

Research and development expenses decreased compared to 2019 as a result of targeted project reductions related to COVID spending adjustments.

The segment’s sales are forecast to decrease 10 to 15 percent in 2020.

Net income of the company’s financial services operations attributable to Deere & Company in 2020 is expected to be approximately $600 million.

The company’s results reflected continued uncertainties in the agricultural sector.

Trade tensions and difficult growing and harvesting conditions have caused farmers to become cautious about major equipment purchases.

Financial services’ results were also pressured by operating lease losses.

The favorable general economic conditions supported demand for smaller equipment and led to strong sales and operating profit for the construction and forestry operations.

Despite the present challenges, the longer-term outlook for the company’s businesses remains

positive.

The company believes it is well positioned to be a leader in the delivery of smarter, more efficient, and sustainable solutions.

In addition, a series of measures to create a leaner organization structure have been initiated that will allow the company to operate with more speed and agility.

Net income in 2019 and 2018 was affected by discrete adjustments to the provision for income taxes, including those related to the U.S. tax reform legislation enacted on December 22, 2017 (tax reform) (see Note 9).

The adjustments in 2019 related to tax reform reduced the provision for income taxes by $68 million and in 2018 increased the provision by $704 million.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Wirtgen - two additional months | ​ | ​ | ​ | ​ | ​ | ​ | ​ | +1 | ​ |

| Wirtgen - two additional months | ​ | ​ | ​ | ​ | ​ | ​ | ​ | +3 | ​ |

The equipment operations’ 2019 and 2018 net income included a discrete income tax benefit related to tax reform of $65 million and expense of $1,045 million, respectively (see Note 9).

Financial

services’ net income was affected by favorable income tax benefits related to tax reform of $3 million and $341 million for 2019 and 2018, respectively.

Finance and interest income increased in 2019 due to a larger average credit portfolio and higher average interest rates.

Research and development expenses increased as a result of spending to support new, advanced products.

Other operating expenses increased in 2019 primarily due to impairments and higher losses on operating lease residual values and increased depreciation of equipment on operating leases, partially offset by lower pension and postretirement benefit costs excluding the service cost component.

deductible contributions.

The inclusion of Wirtgen’s sales for two additional months in 2019 accounted for about 4 percent of the sales increase.

Wirtgen’s operating profit was $343 million in 2019, compared with $116 million in the prior year.

Excluding Wirtgen, the operating profit improvement in 2019 was primarily

driven by price realization and higher shipment volumes, partially offset by higher production costs and a less favorable sales mix.

| Consolidated ratio of earnings to fixed charges | ​ | ​ | 1.57 | ​ | ​ | 1.87 | ​ | ​ | ​ |

The decline was largely offset by price realization and higher shipment volumes.

Net sales increased in 2019 due primarily to price realization and higher shipment volumes.

Net sales increased 1 percent in 2019, with Wirtgen adding 3 percent, compared to 2018.

The physical volume of sales, excluding the effect of acquisitions, was the same as 2018.

Net income attributable to Deere & Company for fiscal 2020 is forecast to be in a range of $2,700 million to $3,100 million.

During the first quarter of 2020, the company announced a broad voluntary employee-separation program.

The program’s total pretax expenses are estimated to be about $140 million with annual savings of about $115 million (see Note 31).

Agriculture and Turf. The company’s worldwide sales of agriculture and turf equipment are forecast to decline about 5 to 10 percent for fiscal year 2020, including price realization of 2 percent and a negative currency translation effect of 1 percent.

Construction and Forestry. The company’s worldwide sales of construction and forestry equipment are anticipated to decrease about 10 to 15 percent for 2020, with price realization having a favorable effect of 1 percent and foreign currency translation having an unfavorable effect of 1 percent.

The outlook reflects slowing construction activity as well as the company’s efforts to assist dealers to manage their inventory levels.

In forestry, global industry sales are expected to be about the same as 2019.

Financial Services. Fiscal year 2020 net income attributable to Deere & Company for the financial services operations is expected to be approximately $600 million.