Cover and table of contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file no: 1-4121

DEERE & COMPANY

(Exact name of registrant as specified in its charter)

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

​

One John Deere Place

Moline**,** Illinois 61265

(Address of principal executive offices)

Telephone Number: (309) 765-8000

​

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

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

​

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

Yes ☒ No ☐

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

Yes ☒ No ☐

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
	​	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At April 30, 2023, 293,192,141 shares of common stock, $1 par value, of the registrant were outstanding.

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PART I. FINANCIAL INFORMATION

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ITEM 1. FINANCIAL STATEMENTS													​
DEERE & COMPANY													​
STATEMENTS OF CONSOLIDATED INCOME													​
For the Three and Six Months Ended April 30, 2023 and May 1, 2022													​
(In millions of dollars and shares except per share amounts) Unaudited													​
​	​	Three Months Ended					​	Six Months Ended					​
​		2023			2022			2023			2022
Net Sales and Revenues	​	​	​	​	​	​	​	​	​	​	​	​	​
Net sales		$	16,079	​	$	12,034		$	27,481	​	$	20,565	​
Finance and interest income	​	​	1,079	​		796	​	​	2,073	​		1,595	​
Other income	​	​	229	​		540	​	​	484	​		779	​
Total	​	​	17,387	​		13,370	​	​	30,038	​		22,939	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Costs and Expenses	​	​	​	​	​	​	​	​	​	​	​	​	​
Cost of sales	​	​	10,730	​		8,918	​	​	18,663	​		15,613	​
Research and development expenses	​	​	547	​		453	​	​	1,043	​		855	​
Selling, administrative and general expenses	​	​	1,330	​		932	​	​	2,283	​		1,713	​
Interest expense	​	​	569	​		187	​	​	1,049	​		417	​
Other operating expenses	​	​	363	​		328	​	​	660	​		638	​
Total	​	​	13,539	​		10,818	​	​	23,698	​		19,236	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Income of Consolidated Group before Income Taxes	​	​	3,848	​		2,552	​	​	6,340	​		3,703	​
Provision for income taxes	​	​	991	​		461	​	​	1,528	​		710	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Income of Consolidated Group	​	​	2,857	​		2,091	​	​	4,812	​		2,993	​
Equity in income of unconsolidated affiliates	​	​	2	​		6	​	​	3	​		8	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Income	​	​	2,859	​		2,097	​	​	4,815	​		3,001	​
Less: Net loss attributable to noncontrolling interests	​	​	(1)	​		(1)	​	​	(4)	​		​	​
Net Income Attributable to Deere & Company		$	2,860	​	$	2,098		$	4,819	​	$	3,001	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Per Share Data	​	​	​	​	​	​	​	​	​	​	​	​	​
Basic		$	9.69	​	$	6.85		$	16.26	​	$	9.78	​
Diluted		​	9.65	​	​	6.81		​	16.18	​	​	9.72	​
Dividends declared	​	​	1.25	​	​	1.05	​	​	2.45	​	​	2.10	​
Dividends paid	​	​	1.20	​	​	1.05	​	​	2.33	​	​	2.10	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Shares Outstanding	​	​	​	​	​	​	​	​	​	​	​	​	​
Basic	​	​	295.1	​		306.2	​	​	296.3	​		306.8	​
Diluted	​	​	296.5	​		308.1	​	​	297.8	​		308.8	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​

​

See Condensed Notes to Interim Consolidated Financial Statements.

​

​

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​	​	​	​	​	​	​	​	​	​	​	​	​	​
DEERE & COMPANY													​
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME													​
For the Three and Six Months Ended April 30, 2023 and May 1, 2022													​
(In millions of dollars) Unaudited													​
​	​	Three Months Ended					​	Six Months Ended					​
​		2023			2022			2023			2022
​	​	​	​	​	​	​	​	​	​	​	​	​
Net Income		$	2,859	​	$	2,097		$	4,815	​	$	3,001	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Other Comprehensive Income (Loss), Net of Income Taxes	​	​	​	​	​	​	​	​	​	​	​	​	​
Retirement benefits adjustment	​	​	(247)	​		129	​	​	(258)	​		(216)	​
Cumulative translation adjustment	​	​	100	​		(248)	​	​	781	​		(515)	​
Unrealized gain (loss) on derivatives	​	​	(18)	​		28	​	​	(31)	​		42	​
Unrealized gain (loss) on debt securities	​	​	(1)	​		(48)	​	​	26	​		(63)	​
Other Comprehensive Income (Loss), Net of Income Taxes	​	​	(166)	​		(139)	​	​	518	​		(752)	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Comprehensive Income of Consolidated Group	​	​	2,693	​		1,958	​	​	5,333	​		2,249	​
Less: Comprehensive income (loss) attributable to noncontrolling interests	​	​	1	​		(5)	​	​	6	​		(4)	​
Comprehensive Income Attributable to Deere & Company		$	2,692	​	$	1,963		$	5,327	​	$	2,253	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​

​

See Condensed Notes to Interim Consolidated Financial Statements.

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​	​	​	​	​	​	​	​	​	​	​
DEERE & COMPANY	​	​	​	​	​	​	​	​	​	​
CONDENSED CONSOLIDATED BALANCE SHEETS	​	​	​	​	​	​	​	​	​	​
(In millions of dollars) Unaudited	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​	​	2023		​	2022		​	2022
Assets	​	​	​	​	​	​	​	​	​	​
Cash and cash equivalents		$	5,267	​	$	4,774	​	$	3,878	​
Marketable securities	​	​	856	​		734	​		682	​
Trade accounts and notes receivable – net	​	​	9,971	​		6,410	​		6,258	​
Financing receivables – net	​	​	38,954	​		36,634	​		34,085	​
Financing receivables securitized – net	​	​	5,659	​		5,936	​		4,073	​
Other receivables	​	​	2,593	​		2,492	​		2,306	​
Equipment on operating leases – net	​	​	6,524	​		6,623	​		6,465	​
Inventories	​	​	9,713	​		8,495	​		9,030	​
Property and equipment – net	​	​	6,288	​		6,056	​		5,715	​
Goodwill	​	​	3,963	​		3,687	​		3,812	​
Other intangible assets – net	​	​	1,222	​		1,218	​		1,352	​
Retirement benefits	​	​	3,519	​		3,730	​		3,059	​
Deferred income taxes	​	​	1,308	​		824	​		1,104	​
Other assets	​	​	2,510	​		2,417	​		2,280	​
Total Assets		$	98,347	​	$	90,030	​	$	84,099	​
​	​	​	​	​	​	​	​	​	​	​
Liabilities and Stockholders’ Equity	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Liabilities	​	​	​	​	​	​	​	​	​	​
Short-term borrowings	​	$	17,109	​	$	12,592	​	$	12,413	​
Short-term securitization borrowings	​	​	5,379	​		5,711	​		4,006	​
Accounts payable and accrued expenses	​	​	14,716	​		14,822	​		12,679	​
Deferred income taxes	​	​	511	​		495	​		584	​
Long-term borrowings	​	​	35,611	​		33,596	​		32,447	​
Retirement benefits and other liabilities	​	​	2,520	​		2,457	​		2,964	​
Total liabilities	​	​	75,846	​		69,673	​		65,093	​
​	​	​	​	​	​	​	​	​	​	​
Commitments and contingencies (Note 16)	​	​	​	​	​	​	​	​	​	​
Redeemable noncontrolling interest	​	​	102	​	​	92	​	​	99	​
​	​	​	​	​	​	​	​	​	​	​
Stockholders’ Equity	​	​	​	​	​	​	​	​	​	​
Common stock, $1 par value (issued shares at April 30, 2023 – 536,431,204)	​	​	5,227	​		5,165	​		5,117	​
Common stock in treasury	​	​	(26,630)	​		(24,094)	​		(21,727)	​
Retained earnings	​	​	46,336	​		42,247	​		38,805	​
Accumulated other comprehensive income (loss)	​	​	(2,538)	​		(3,056)	​		(3,291)	​
Total Deere & Company stockholders’ equity	​	​	22,395	​		20,262	​		18,904	​
Noncontrolling interests	​	​	4	​		3	​		3	​
Total stockholders’ equity	​	​	22,399	​		20,265	​		18,907	​
Total Liabilities and Stockholders’ Equity	​	$	98,347	​	$	90,030	​	$	84,099	​
​	​	​	​	​	​	​	​	​	​	​

​

See Condensed Notes to Interim Consolidated Financial Statements.

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​	​	​	​	​	​	​	​
DEERE & COMPANY	​	​	​	​	​	​	​
STATEMENTS OF CONSOLIDATED CASH FLOWS	​	​	​	​	​	​	​
For the Six Months Ended April 30, 2023 and May 1, 2022	​	​	​	​	​	​	​
(In millions of dollars) Unaudited	​	​	​	​	​	​	​
​		2023			2022
Cash Flows from Operating Activities	​	​		​	​		​
Net income		$	4,815	​	$	3,001	​
Adjustments to reconcile net income to net cash used for operating activities:	​	​	​	​	​	​	​
Provision (credit) for credit losses	​	​	(89)	​		45	​
Provision for depreciation and amortization	​	​	995	​		933	​
Impairments and other adjustments	​	​	173	​		77	​
Share-based compensation expense	​	​	54	​		44	​
Gain on remeasurement of previously held equity investment	​	​	​	​		(326)	​
Provision (credit) for deferred income taxes	​	​	(377)	​		37	​
Changes in assets and liabilities:	​	​	​	​	​	​	​
Receivables related to sales	​	​	(4,407)	​		(1,535)	​
Inventories	​	​	(982)	​		(2,265)	​
Accounts payable and accrued expenses	​	​	(313)	​		(443)	​
Accrued income taxes payable/receivable	​	​	(96)	​		(139)	​
Retirement benefits	​	​	(68)	​		(1,020)	​
Other	​	​	148	​		(171)	​
Net cash used for operating activities	​	​	(147)	​		(1,762)	​
​	​	​	​	​	​	​	​
Cash Flows from Investing Activities	​	​	​	​	​	​	​
Collections of receivables (excluding receivables related to sales)	​	​	12,593	​		11,190	​
Proceeds from sales of equipment on operating leases	​	​	993	​		1,035	​
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold	​	​	36	​		​	​
Cost of receivables acquired (excluding receivables related to sales)	​	​	(13,451)	​		(11,971)	​
Acquisitions of businesses, net of cash acquired	​	​	(41)	​		(473)	​
Purchases of property and equipment	​	​	(584)	​		(346)	​
Cost of equipment on operating leases acquired	​	​	(1,229)	​		(1,004)	​
Collateral on derivatives - net	​	​	367	​	​	(248)	​
Other	​	​	(178)	​		(71)	​
Net cash used for investing activities	​	​	(1,494)	​		(1,888)	​
​	​	​	​	​	​	​	​
Cash Flows from Financing Activities	​	​	​	​	​	​	​
Increase in total short-term borrowings	​	​	3,992	​		812	​
Proceeds from long-term borrowings	​	​	4,868	​		4,298	​
Payments of long-term borrowings	​	​	(3,567)	​		(3,625)	​
Proceeds from issuance of common stock	​	​	30	​		50	​
Repurchases of common stock	​	​	(2,546)	​		(1,226)	​
Dividends paid	​	​	(697)	​		(649)	​
Other	​	​	(63)	​		(46)	​
Net cash provided by (used for) financing activities	​	​	2,017	​		(386)	​
​	​	​	​	​	​	​	​
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash	​	​	70	​		(110)	​
​	​	​	​	​	​	​	​
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	​	​	446	​	​	(4,146)	​
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	​	​	4,941	​		8,125	​
Cash, Cash Equivalents, and Restricted Cash at End of Period	​	$	5,387	​	$	3,979	​
​	​	​	​	​	​	​	​
Components of Cash, Cash Equivalents, and Restricted Cash	​	​	​	​	​	​	​
Cash and cash equivalents	​	$	5,267	​	$	3,878	​
Restricted cash (Other assets)	​	​	120	​	​	101	​
Total Cash, Cash Equivalents, and Restricted Cash	​	$	5,387	​	$	3,979	​
​	​	​	​	​	​	​	​

​

See Condensed Notes to Interim Consolidated Financial Statements.

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DEERE & COMPANY																							​
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY																							​
For the Three and Six Months Ended April 30, 2023 and May 1, 2022																							​
(In millions of dollars) Unaudited																							​
​	​	​	​	​	Total Stockholders’ Equity														​	​	​	​	​
​	​	​	​	​	Deere & Company Stockholders											​	​		​	​	​	​	​
​	​	​		​	​		​	​		​	​		​	Accumulated		​	​		​	​	​		​
​	​	Total		​	​		​	​		​	​		​	Other		​	​		​	​	Redeemable		​
​	​	Stockholders’		​	Common		​	Treasury		​	Retained		​	Comprehensive		​	Noncontrolling		​	​	Noncontrolling		​
​		Equity			Stock			Stock			Earnings			Income (Loss)			Interests				Interest		​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​		​	​	​		​
Three Months Ended May 1, 2022				​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance January 30, 2022		$	17,808	​	$	5,066	​	$	(21,139)	​	$	37,029	​	$	(3,152)	​	$	4	​	​	​	​	​
Acquisitions	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	$	105	​
Net income (loss)	​		2,098	​	​	​	​	​	​	​	​	2,098	​	​	​	​	​	​	​	​	​	(1)	​
Other comprehensive loss	​		(139)	​	​	​	​	​	​	​	​	​	​	​	(139)	​	​	​	​	​	​	(4)	​
Repurchases of common stock	​		(603)	​	​	​	​	​	(603)	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury shares reissued	​		15	​	​	​	​	​	15	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Dividends declared	​		(323)	​	​	​	​	​	​	​	​	(322)	​	​	​	​	​	(1)	​	​	​	​	​
Share based awards and other	​		51	​	​	51	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	(1)	​
Balance May 1, 2022	​	$	18,907	​	$	5,117	​	$	(21,727)	​	$	38,805	​	$	(3,291)	​	$	3	​	​	$	99	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Six Months Ended May 1, 2022				​	​	​	​	​	​	​	​	​	​	​	​	​	​		​	​	​		​
Balance October 31, 2021		$	18,434	​	$	5,054	​	$	(20,533)	​	$	36,449	​	$	(2,539)	​	$	3	​	​	​	​
Acquisitions	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	$	105	​
Net income (loss)	​		3,002	​	​	​	​	​	​	​	​	3,001	​	​	​	​	​	1	​	​	​	(1)	​
Other comprehensive loss	​		(752)	​	​	​	​	​	​	​	​	​	​	​	(752)	​	​	​	​	​	​	(4)	​
Repurchases of common stock	​		(1,226)	​	​	​	​	​	(1,226)	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury shares reissued	​		32	​	​	​	​	​	32	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Dividends declared	​		(646)	​	​	​	​	​	​	​	​	(645)	​	​	​	​	​	(1)	​	​	​	​	​
Share based awards and other	​		63	​	​	63	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	(1)	​
Balance May 1, 2022	​	$	18,907	​	$	5,117	​	$	(21,727)	​	$	38,805	​	$	(3,291)	​	$	3	​	​	$	99	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Three Months Ended April 30, 2023				​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance January 29, 2023	​	$	21,336	​	$	5,191	​	$	(25,333)	​	$	43,846	​	$	(2,372)	​	$	4	​	​	$	100	​
Net income (loss)	​	​	2,861	​	​	​	​	​	​	​	​	2,860	​	​	​	​	​	1	​	​	​	(2)	​
Other comprehensive income (loss)	​	​	(166)	​	​	​	​	​	​	​	​	​	​	​	(166)	​	​	​	​	​	​	2	​
Repurchases of common stock	​	​	(1,301)	​	​	​	​	​	(1,301)	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury shares reissued	​	​	4	​	​	​	​	​	4	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Dividends declared	​	​	(370)	​	​	​	​	​	​	​	​	(369)	​	​	​	​	​	(1)	​	​	​	​	​
Share based awards and other	​	​	35	​	​	36	​	​	​	​	​	(1)	​	​	​	​	​	​	​	​	​	2	​
Balance April 30, 2023	​	$	22,399	​	$	5,227	​	$	(26,630)	​	$	46,336	​	$	(2,538)	​	$	4	​	​	$	102	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Six Months Ended April 30, 2023				​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance October 30, 2022	​	$	20,265	​	$	5,165	​	$	(24,094)	​	$	42,247	​	$	(3,056)	​	$	3	​	​	$	92	​
Net income (loss)	​	​	4,820	​	​	​	​	​	​	​	​	4,819	​	​	​	​	​	1	​	​	​	(5)	​
Other comprehensive income	​	​	518	​	​	​	​	​	​	​	​	​	​	​	518	​	​	​	​	​	​	10	​
Repurchases of common stock	​	​	(2,558)	​	​	​	​	​	(2,558)	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury shares reissued	​	​	22	​	​	​	​	​	22	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Dividends declared	​	​	(726)	​	​	​	​	​	​	​	​	(725)	​	​	​	​	​	(1)	​	​	​	​	​
Share based awards and other	​	​	58	​	​	62	​	​	​	​	​	(5)	​	​	​	​	​	1	​	​	​	5	​
Balance April 30, 2023	​	$	22,399	​	$	5,227	​	$	(26,630)	​	$	46,336	​	$	(2,538)	​	$	4	​	​	$	102	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

​

​

See Condensed Notes to Interim Consolidated Financial Statements.

​

Condensed Notes to Interim Consolidated Financial Statements (Unaudited)

(1)  Organization and Consolidation

Deere & Company has been developing innovative solutions to help its customers become more profitable for more than 185 years. References to Deere & Company, John Deere, Deere, or the Company include its consolidated subsidiaries and consolidated variable interest entities (VIEs). The Company is managed through the following operating segments: production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS). References to “equipment operations” include production and precision agriculture, small agriculture and turf, and construction and forestry, while references to “agriculture and turf” include both production and precision agriculture and small agriculture and turf.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2023 and 2022 were April 30, 2023 and May 1, 2022, respectively. Both second quarters contained 13 weeks, while both year-to-date periods contained 26 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company’s fiscal years generally ending in October and the associated periods in those fiscal years.

​

(2)  Summary of Significant Accounting Policies and New Accounting Standards

Quarterly Financial Statements

The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

New Accounting Standards

The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board and other authoritative guidance. ASUs adopted in 2023 did not have a material impact on the Company’s financial statements. ASUs to be adopted in future periods are being evaluated and at this point are not expected to have a material impact on the Company’s financial statements.

​

(3)  Revenue Recognition

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended April 30, 2023														​
​		Production & Precision Ag			Small Ag & Turf			Construction & Forestry			Financial Services			Total		​
Primary geographic markets:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
United States	​	$	4,058	​	$	2,241	​	$	2,561	​	$	766	​	$	9,626	​
Canada	​	​	546	​	​	189	​	​	302	​		153	​		1,190	​
Western Europe	​	​	758	​	​	888	​	​	492	​		31	​		2,169	​
Central Europe and CIS	​	​	393	​	​	212	​	​	90	​		8	​		703	​
Latin America	​	​	1,543	​	​	201	​	​	388	​		106	​		2,238	​
Asia, Africa, Oceania, and Middle East	​	​	614	​	​	469	​	​	335	​	​	43	​	​	1,461	​
Total	​	$	7,912	​	$	4,200	​	$	4,168	​	$	1,107	​	$	17,387	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Major product lines:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
Production agriculture	​	$	7,733	​	​	​	​	​	​	​	​	​	​	$	7,733	​
Small agriculture	​	​	​	​	$	2,952	​	​	​	​		​	​		2,952	​
Turf	​	​	​	​	​	1,099	​	​	​	​		​	​		1,099	​
Construction	​	​	​	​	​	​	​	$	1,813	​		​	​		1,813	​
Compact construction	​	​	​	​	​	​	​	​	663	​	​	​	​	​	663	​
Roadbuilding	​	​	​	​	​	​	​	​	1,134	​		​	​		1,134	​
Forestry	​	​	​	​	​	​	​	​	429	​		​	​		429	​
Financial products	​	​	29	​	​	20	​	​	12	​	$	1,107	​		1,168	​
Other	​	​	150	​	​	129	​	​	117	​		​	​		396	​
Total	​	$	7,912	​	$	4,200	​	$	4,168	​	$	1,107	​	$	17,387	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Revenue recognized:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
At a point in time	​	$	7,861	​	$	4,171	​	$	4,146	​	$	27	​	$	16,205	​
Over time	​	​	51	​	​	29	​	​	22	​	​	1,080	​	​	1,182	​
Total	​	$	7,912	​	$	4,200	​	$	4,168	​	$	1,107	​	$	17,387	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​		Six Months Ended April 30, 2023														​
​	​	Production & Precision Ag			Small Ag & Turf			Construction & Forestry			Financial Services			Total		​
Primary geographic markets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
United States	​	$	6,686	​	$	3,906	​	$	4,461	​	$	1,479	​	$	16,532	​
Canada	​	​	906	​	​	335	​	​	577	​		303	​		2,121	​
Western Europe	​	​	1,259	​	​	1,452	​	​	857	​		60	​		3,628	​
Central Europe and CIS	​	​	595	​	​	335	​	​	165	​		20	​		1,115	​
Latin America	​	​	2,780	​	​	357	​	​	727	​		201	​		4,065	​
Asia, Africa, Oceania, and Middle East	​	​	989	​	​	869	​	​	635	​	​	84	​	​	2,577	​
Total	​	$	13,215	​	$	7,254	​	$	7,422	​	$	2,147	​	$	30,038	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Major product lines:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
Production agriculture	​	$	12,845	​	​	​	​	​	​	​	​	​	​	$	12,845	​
Small agriculture	​	​	​	​	$	5,146	​	​	​	​		​	​		5,146	​
Turf	​	​	​	​	​	1,818	​	​	​	​		​	​		1,818	​
Construction	​	​	​	​	​	​	​	$	3,295	​		​	​		3,295	​
Compact construction	​	​	​	​	​	​	​	​	1,136	​	​	​	​	​	1,136	​
Roadbuilding	​	​	​	​	​	​	​	​	1,952	​		​	​		1,952	​
Forestry	​	​	​	​	​	​	​	​	785	​	​	​	​		785	​
Financial products	​	​	60	​	​	38	​	​	25	​	$	2,147	​		2,270	​
Other	​	​	310	​	​	252	​	​	229	​		​	​		791	​
Total	​	$	13,215	​	$	7,254	​	$	7,422	​	$	2,147	​	$	30,038	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Revenue recognized:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
At a point in time	​	$	13,109	​	$	7,200	​	$	7,375	​	$	50	​	$	27,734	​
Over time	​	​	106	​	​	54	​	​	47	​	​	2,097	​	​	2,304	​
Total	​	$	13,215	​	$	7,254	​	$	7,422	​	$	2,147	​	$	30,038	​

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended May 1, 2022														​
​		Production & Precision Ag			Small Ag & Turf			Construction & Forestry			Financial Services			Total		​
Primary geographic markets:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
United States	​	$	2,434	​	$	2,103	​	$	2,108	​	$	569	​	$	7,214	​
Canada	​	​	309	​	​	161	​	​	355	​		149	​		974	​
Western Europe	​	​	536	​	​	658	​	​	464	​	​	25	​		1,683	​
Central Europe and CIS	​	​	404	​	​	151	​	​	146	​	​	11	​		712	​
Latin America	​	​	1,126	​	​	134	​	​	333	​	​	73	​		1,666	​
Asia, Africa, Oceania, and Middle East	​	​	367	​	​	399	​	​	318	​	​	37	​	​	1,121	​
Total	​	$	5,176	​	$	3,606	​	$	3,724	​	$	864	​	$	13,370	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Major product lines:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
Production agriculture	​	$	5,032	​	​	​	​	​	​	​	​	​	​	$	5,032	​
Small agriculture	​	​	​	​	$	2,668	​	​	​	​		​	​		2,668	​
Turf	​	​	​	​	​	817	​	​	​	​		​	​		817	​
Construction	​	​	​	​	​	​	​	$	1,516	​		​	​		1,516	​
Compact construction	​	​	​	​	​	​	​	​	427	​	​	​	​	​	427	​
Roadbuilding	​	​	​	​	​	​	​	​	1,017	​		​	​		1,017	​
Forestry	​	​	​	​	​	​	​	​	325	​		​	​		325	​
Financial products	​	​	10	​	​	9	​	​	6	​	$	864	​		889	​
Other	​	​	134	​	​	112	​	​	433	​		​	​		679	​
Total	​	$	5,176	​	$	3,606	​	$	3,724	​	$	864	​	$	13,370	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Revenue recognized:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
At a point in time	​	$	5,144	​	$	3,593	​	$	3,707	​	$	26	​	$	12,470	​
Over time	​	​	32	​	​	13	​	​	17	​	​	838	​	​	900	​
Total	​	$	5,176	​	$	3,606	​	$	3,724	​	$	864	​	$	13,370	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended May 1, 2022														​
​		Production & Precision Ag			Small Ag & Turf			Construction & Forestry			Financial Services			Total		​
Primary geographic markets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
United States	​	$	4,042	​	$	3,541	​	$	3,368	​	$	1,142	​	$	12,093	​
Canada	​	​	448	​	​	283	​	​	687	​	​	301	​		1,719	​
Western Europe	​	​	1,003	​	​	1,190	​	​	822	​	​	51	​		3,066	​
Central Europe and CIS	​	​	606	​	​	277	​	​	341	​	​	22	​		1,246	​
Latin America	​	​	1,902	​	​	238	​	​	561	​	​	141	​		2,842	​
Asia, Africa, Oceania, and Middle East	​	​	608	​	​	751	​	​	537	​	​	77	​	​	1,973	​
Total	​	$	8,609	​	$	6,280	​	$	6,316	​	$	1,734	​	$	22,939	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Major product lines:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
Production agriculture	​	$	8,315	​	​	​	​	​	​	​	​	​	​	$	8,315	​
Small agriculture	​	​	​	​	$	4,600	​	​	​	​	​	​	​		4,600	​
Turf	​	​	​	​	​	1,444	​	​	​	​	​	​	​		1,444	​
Construction	​	​	​	​	​	​	​	$	2,691	​	​	​	​		2,691	​
Compact construction	​	​	​	​	​	​	​	​	748	​	​	​	​	​	748	​
Roadbuilding	​	​	​	​	​	​	​	​	1,709	​	​	​	​		1,709	​
Forestry	​	​	​	​	​	​	​	​	630	​	​	​	​		630	​
Financial products	​	​	22	​	​	20	​	​	11	​	$	1,734	​		1,787	​
Other	​	​	272	​	​	216	​	​	527	​	​	​	​		1,015	​
Total	​	$	8,609	​	$	6,280	​	$	6,316	​	$	1,734	​	$	22,939	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Revenue recognized:	​	​	​	​	​	​	​	​	​	​	​		​	​		​
At a point in time	​	$	8,540	​	$	6,247	​	$	6,277	​	$	50	​	$	21,114	​
Over time	​	​	69	​	​	33	​	​	39	​	​	1,684	​	​	1,825	​
Total	​	$	8,609	​	$	6,280	​	$	6,316	​	$	1,734	​	$	22,939	​

​

​

The Company invoices in advance of recognizing the sale of certain products and the revenue for certain services. These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance and telematic services. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses” in the consolidated balance sheets. The deferred revenue received, but not recognized in revenue, including extended warranty premiums also shown in Note 16, was $1,622 million, $1,423 million, and $1,423 million at April 30, 2023, October 30, 2022, and May 1, 2022, respectively. The contract liability is reduced as the revenue is recognized. During the three months ended April 30, 2023 and May 1, 2022, $129 million and $130 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year. During the six months ended April 30, 2023 and May 1, 2022, $343 million and $395 million, respectively, of revenue was recognized from deferred revenue that was recorded as a contract liability at the beginning of the respective fiscal year.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $1,378 million at April 30, 2023. The estimated revenue to be recognized by fiscal year follows in millions of dollars: remainder of 2023 - $238, 2024 - $376, 2025 - $294, 2026 - $191, 2027 - $111, 2028 - $68 and later years - $100. As permitted, the Company elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are for sales of equipment, service parts, repair services, and certain telematics services.

​

(4)  Other Comprehensive Income Items

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

​	​	​	​	​	​	​	​	​	​	​
​	​	April 30		​	October 30		​	May 1		​
​	​	2023		​	2022		​	2022		​
Retirement benefits adjustment	​	$	(647)	​	$	(389)	​	$	(1,250)	​
Cumulative translation adjustment	​	​	(1,813)	​	​	(2,594)	​	​	(1,993)	​
Unrealized gain (loss) on derivatives	​	​	(10)	​	​	21	​	​	​	​
Unrealized gain (loss) on debt securities	​	​	(68)	​	​	(94)	​	​	(48)	​
Total accumulated other comprehensive income (loss)	​	$	(2,538)	​	$	(3,056)	​	$	(3,291)	​

​

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars. Retirement benefits adjustment reclassifications for actuarial (gain) loss, prior service (credit) cost, and settlements are included in net periodic pension and other postretirement benefit costs (see Note 6).

​	​	​	​	​	​	​	​	​	​	​
​		Before			Tax			After
​	​	Tax		​	(Expense)		​	Tax
Three Months Ended April 30, 2023	​	Amount		​	Credit		​	Amount
Cumulative translation adjustment	​	$	100	​	​	​	​	$	100	​
Unrealized gain (loss) on derivatives:	​	​	​	​	​	​	​	​	​	​
Unrealized hedging gain (loss)	​	​	(4)	​	$	1	​	​	(3)	​
Reclassification of realized (gain) loss to:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts – Interest expense	​	​	(19)	​	​	4	​	​	(15)	​
Net unrealized gain (loss) on derivatives	​	​	(23)	​	​	5	​	​	(18)	​
Unrealized gain (loss) on debt securities:	​	​	​	​	​	​	​	​	​	​
Unrealized holding gain (loss)	​	​	(2)	​	​	1	​	​	(1)	​
Net unrealized gain (loss) on debt securities	​	​	(2)	​	​	1	​	​	(1)	​
Retirement benefits adjustment:	​	​	​	​	​	​	​	​	​	​
Net actuarial gain (loss)	​	​	(349)	​	​	83	​	​	(266)	​
Reclassification of amortized amounts:	​	​	​	​	​	​	​	​	​	​
Actuarial (gain) loss – Other operating expenses	​	​	(20)	​	​	5	​	​	(15)	​
Prior service (credit) cost – Other operating expenses	​	​	10	​	​	(2)	​	​	8	​
Settlements – Other operating expenses	​	​	36	​	​	(10)	​	​	26	​
Net unrealized gain (loss) on retirement benefits adjustment	​	​	(323)	​	​	76	​	​	(247)	​
Total other comprehensive income (loss)		$	(248)	​	$	82	​	$	(166)	​

​

​

​	​	​	​	​	​	​	​	​	​	​
​		Before			Tax			After
​	​	Tax		​	(Expense)		​	Tax
Six Months Ended April 30, 2023	​	Amount		​	Credit		​	Amount
Cumulative translation adjustment		$	771	​	$	10	​	$	781	​
Unrealized gain (loss) on derivatives:	​	​	​	​	​	​	​	​	​	​
Unrealized hedging gain (loss)	​	​	(5)	​	​	1	​	​	(4)	​
Reclassification of realized (gain) loss to:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts – Interest expense	​	​	(34)	​	​	7	​	​	(27)	​
Net unrealized gain (loss) on derivatives	​	​	(39)	​	​	8	​	​	(31)	​
Unrealized gain (loss) on debt securities:	​	​	​	​	​	​	​	​	​	​
Unrealized holding gain (loss)	​	​	33	​	​	(7)	​	​	26	​
Net unrealized gain (loss) on debt securities	​	​	33	​	​	(7)	​	​	26	​
Retirement benefits adjustment:	​	​	​	​	​	​	​	​	​	​
Net actuarial gain (loss)	​	​	(350)	​	​	83	​	​	(267)	​
Reclassification of amortized amounts:	​	​	​	​	​	​	​	​	​	​
Actuarial (gain) loss – Other operating expenses	​	​	(41)	​	​	10	​	​	(31)	​
Prior service (credit) cost – Other operating expenses	​	​	19	​	​	(5)	​	​	14	​
Settlements – Other operating expenses	​	​	36	​	​	(10)	​	​	26	​
Net unrealized gain (loss) on retirement benefits adjustment	​	​	(336)	​	​	78	​	​	(258)	​
Total other comprehensive income (loss)		$	429	​	$	89	​	$	518	​

​

​	​	​	​	​	​	​	​	​	​	​
​		Before			Tax			After
​	​	Tax		​	(Expense)		​	Tax
Three Months Ended May 1, 2022	​	Amount		​	Credit		​	Amount
Cumulative translation adjustment		$	(243)	​	$	(5)	​	$	(248)	​
Unrealized gain (loss) on derivatives:	​	​	​	​	​	​	​	​	​	​
Unrealized hedging gain (loss)	​	​	35	​	​	(7)	​	​	28	​
Reclassification of realized (gain) loss to:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts – Interest expense	​	​	1	​	​	(1)	​	​	​	​
Net unrealized gain (loss) on derivatives	​	​	36	​	​	(8)	​	​	28	​
Unrealized gain (loss) on debt securities:	​	​	​	​	​	​	​	​	​	​
Unrealized holding gain (loss)	​	​	(61)	​	​	13	​	​	(48)	​
Net unrealized gain (loss) on debt securities	​	​	(61)	​	​	13	​	​	(48)	​
Retirement benefits adjustment:	​	​	​	​	​	​	​	​	​	​
Net actuarial gain (loss)	​	​	128	​	​	(30)	​	​	98	​
Reclassification of amortized amounts:	​	​	​	​	​	​	​	​	​	​
Actuarial (gain) loss – Other operating expenses	​	​	27	​	​	(7)	​	​	20	​
Prior service (credit) cost – Other operating expenses	​	​	8	​	​	(2)	​	​	6	​
Settlements – Other operating expenses	​	​	7	​	​	(2)	​	​	5	​
Net unrealized gain (loss) on retirement benefits adjustment	​	​	170	​	​	(41)	​	​	129	​
Total other comprehensive income (loss)		$	(98)	​	$	(41)	​	$	(139)	​

​

​

​	​	​	​	​	​	​	​	​	​	​
​		Before			Tax			After
​	​	Tax		​	(Expense)		​	Tax
Six Months Ended May 1, 2022	​	Amount		​	Credit		​	Amount
Cumulative translation adjustment		$	(507)		$	(8)	​	$	(515)	​
Unrealized gain (loss) on derivatives:	​	​	​	​	​	​	​	​	​	​
Unrealized hedging gain (loss)	​	​	50	​	​	(10)	​	​	40	​
Reclassification of realized (gain) loss to:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts – Interest expense	​	​	3	​	​	(1)	​	​	2	​
Net unrealized gain (loss) on derivatives	​	​	53	​	​	(11)	​	​	42	​
Unrealized gain (loss) on debt securities:	​	​	​	​	​	​	​	​	​	​
Unrealized holding gain (loss)	​	​	(80)	​	​	17	​	​	(63)	​
Net unrealized gain (loss) on debt securities	​	​	(80)	​	​	17	​	​	(63)	​
Retirement benefits adjustment:	​	​	​	​	​	​	​	​	​	​
Net actuarial gain (loss) and prior service credit (cost)	​	​	(372)	​	​	90	​	​	(282)	​
Reclassification of amortized amounts:	​	​	​	​	​	​	​	​	​	​
Actuarial (gain) loss – Other operating expenses	​	​	67	​	​	(17)	​	​	50	​
Prior service (credit) cost – Other operating expenses	​	​	14	​	​	(4)	​	​	10	​
Settlements – Other operating expenses	​	​	8	​	​	(2)	​	​	6	​
Net unrealized gain (loss) on retirement benefits adjustment	​	​	(283)	​	​	67	​	​	(216)	​
Total other comprehensive income (loss)		$	(817)	​	$	65	​	$	(752)	​

​

​

(5)  Earnings Per Share

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

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
	​	Three Months Ended					​	Six Months Ended
​	​	April 30		​	May 1		​	April 30		​	May 1
​	​	2023		​	2022		​	2023		​	2022
Net income attributable to Deere & Company		$	2,860		$	2,098		$	4,819		$	3,001	​
Average shares outstanding	​	​	295.1	​		306.2	​	​	296.3	​		306.8	​
Basic per share	​	$	9.69	​	$	6.85	​	$	16.26	​	$	9.78	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average shares outstanding	​	​	295.1	​		306.2	​	​	296.3	​		306.8	​
Effect of dilutive share-based compensation	​	​	1.4	​		1.9	​	​	1.5	​		2.0	​
Total potential shares outstanding	​	​	296.5	​		308.1	​	​	297.8	​		308.8	​
Diluted per share	​	$	9.65	​	$	6.81	​	$	16.18	​	$	9.72	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Shares excluded from EPS calculation, as antidilutive	​	​	.2	​	​	.2	​	​	.1	​	​	.1	​

​

​

​

(6)  Pension and Other Postretirement Employee Benefits

The Company has several defined benefit pension plans and other postretirement employee benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries. The components of net periodic pension and OPEB (benefit) cost consisted of the following in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Six Months Ended
​	​	April 30		​	May 1		​	April 30		​	May 1
​	​	2023		​	2022		​	2023		​	2022
Pension	​	​	​	​	​	​	​	​	​	​	​	​	​
Service cost		$	64		$	94		$	124		$	179	​
Interest cost	​	​	134	​		80	​	​	267	​		157	​
Expected return on plan assets	​	​	(220)	​		(180)	​	​	(432)	​		(362)	​
Amortization of actuarial (gain) loss	​	​	(6)	​		37	​	​	(11)	​		76	​
Amortization of prior service cost	​	​	10	​		9	​	​	20	​		16	​
Settlements	​	​	36	​		7	​	​	36	​		8	​
Net cost	​	$	18	​	$	47	​	$	4	​	$	74	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
OPEB	​	​	​	​	​	​	​	​	​	​	​	​	​
Service cost		$	6		$	11		$	13		$	23	​
Interest cost	​	​	45	​		23	​	​	88	​		49	​
Expected return on plan assets	​	​	(29)	​		(27)	​	​	(58)	​		(55)	​
Amortization of actuarial gain	​	​	(14)	​		(10)	​	​	(30)	​		(9)	​
Amortization of prior service credit	​	​	​	​		(1)	​	​	(1)	​		(2)	​
Net (benefit) cost	​	$	8	​	$	(4)	​	$	12	​	$	6	​

​

The reduction in the 2023 pension net cost is due to increases in the expected long-term return rates on plan assets and increases in discount rates. The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses” in the statements of consolidated income.

During the second quarter of 2023, an international pension plan paid a premium to an insurance company to irrevocably transfer the benefit obligations and administration for the majority of its retired participants. The transaction did not impact the benefits to be received by the retired participants. In connection with the transaction, the Company recognized a one-time, non-cash, pre-tax pension settlement charge of $36 million in the second quarter of 2023 related to the accelerated recognition of actuarial losses included within “Accumulated other comprehensive income (loss)” in the statements of changes in consolidated stockholders’ equity.

​

​

​

(7)  Segment Reporting

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended							​	Six Months Ended
	​	April 30		​	May 1		​	%	​	April 30		​	May 1		​	%
​	​	2023		​	2022		​	Change	​	2023		​	2022		​	Change
Net sales and revenues:		​			​					​	​		​				​
Production & precision ag net sales		$	7,822	​	$	5,117	​	+53		$	13,021	​	$	8,473	​	+54	​
Small ag & turf net sales	​	​	4,145	​	​	3,570	​	+16	​	​	7,146	​	​	6,201	​	+15	​
Construction & forestry net sales	​	​	4,112	​		3,347	​	+23	​	​	7,314	​		5,891	​	+24	​
Financial services revenues	​	​	1,107	​		864	​	+28	​	​	2,147	​		1,734	​	+24	​
Other revenues	​	​	201	​		472	​	-57	​	​	410	​		640	​	-36	​
Total net sales and revenues		$	17,387	​	$	13,370	​	+30		$	30,038	​	$	22,939	​	+31	​
Operating profit:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Production & precision ag		$	2,170	​	$	1,057	​	+105		$	3,378	​	$	1,353	​	+150	​
Small ag & turf	​	​	849	​	​	520	​	+63	​	​	1,296	​	​	891	​	+45	​
Construction & forestry	​	​	838	​		814	​	+3	​	​	1,463	​		1,085	​	+35	​
Financial services	​	​	41	​		279	​	-85	​	​	279	​		577	​	-52	​
Total operating profit	​	​	3,898	​		2,670	​	+46	​	​	6,416	​		3,906	​	+64	​
Reconciling items	​	​	(47)	​		(111)	​	-58	​	​	(69)	​		(195)	​	-65	​
Income taxes	​	​	(991)	​		(461)	​	+115	​	​	(1,528)	​		(710)	​	+115	​
Net income attributable to Deere & Company		$	2,860	​	$	2,098	​	+36		$	4,819	​	$	3,001	​	+61	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Intersegment sales and revenues:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Production & precision ag net sales		$	8	​	$	6	​	+33		$	12	​	$	10	​	+20	​
Small ag & turf net sales	​	​	4	​	​	4	​	​	​	​	7	​	​	6	​	+17	​
Construction & forestry net sales	​	​	​	​	​	​	​	​	​	​	​	​		​	​	​	​
Financial services revenues	​	​	190	​		87	​	+118	​	​	395	​		133	​	+197	​

​

Operating profit for production and precision ag, small ag and turf, and construction and forestry is income from continuing operations before reconciling items and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains and losses. Reconciling items to net income are primarily corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, pension and OPEB benefit amounts excluding the service cost component, equity in income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30		​	May 1
​	​	2023		​	2022		​	2022
Identifiable assets:	​	​	​	​	​	​	​	​	​	​
Production & precision ag		$	9,504	​	$	8,414	​	$	8,680	​
Small ag & turf	​	​	4,743	​	​	4,451	​	​	4,431	​
Construction & forestry	​	​	7,299	​		6,754	​		6,984	​
Financial services	​	​	65,233	​		58,864	​		53,110	​
Corporate	​	​	11,568	​		11,547	​		10,894	​
Total assets		$	98,347	​	$	90,030	​	$	84,099	​

​

​

(8)  Financing Receivables

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

​

​

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	April 30, 2023																							​
​	​	2023		​	2022		​	2021		​	2020		​	2019		​	Prior Years		​	Revolving Charge Accounts		​	Total		​
Retail customer receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	6,718	​	$	10,947	​	$	6,435	​	$	3,155	​	$	1,305	​	$	619	​	$	3,621	​	$	32,800	​
30-59 days past due	​	​	10	​	​	55	​	​	55	​	​	31	​	​	18	​	​	9	​	​	16	​	​	194	​
60-89 days past due	​	​	2	​	​	15	​	​	24	​	​	19	​	​	4	​	​	2	​	​	8	​	​	74	​
90+ days past due	​	​	​	​	​	1	​	​	1	​	​	​	​	​	​	​	​	​	​	​	​	​	​	2	​
Non-performing	​	​	5	​	​	51	​	​	51	​	​	36	​	​	25	​	​	29	​	​	25	​	​	222	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	1,442	​	​	2,434	​	​	1,490	​	​	557	​	​	169	​	​	56	​	​	106	​	​	6,254	​
30-59 days past due	​	​	7	​	​	35	​	​	29	​	​	25	​	​	21	​	​	10	​	​	4	​	​	131	​
60-89 days past due	​	​	1	​	​	8	​	​	16	​	​	12	​	​	14	​	​	12	​	​	2	​	​	65	​
90+ days past due	​	​	​	​	​	7	​	​	1	​	​	1	​	​	2	​	​	​	​	​	​	​	​	11	​
Non-performing	​	​	5	​	​	71	​	​	61	​	​	33	​	​	12	​	​	6	​	​	1	​	​	189	​
Total	​	$	8,190	​	$	13,624	​	$	8,163	​	$	3,869	​	$	1,570	​	$	743	​	$	3,783	​	$	39,942	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	October 30, 2022																							​
​	​	2022		​	2021		​	2020		​	2019		​	2018		​	Prior Years		​	Revolving Charge Accounts		​	Total		​
Retail customer receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	13,500	​	$	7,984	​	$	4,091	​	$	1,875	​	$	785	​	$	200	​	$	4,111	​	$	32,546	​
30-59 days past due	​	​	46	​	​	63	​	​	36	​	​	17	​	​	7	​	​	3	​	​	19	​	​	191	​
60-89 days past due	​	​	14	​	​	25	​	​	13	​	​	6	​	​	2	​	​	1	​	​	5	​	​	66	​
90+ days past due	​	​	1	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	1	​
Non-performing	​	​	27	​	​	60	​	​	44	​	​	28	​	​	18	​	​	19	​	​	8	​	​	204	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	2,964	​	​	1,974	​	​	842	​	​	292	​	​	73	​	​	12	​	​	108	​	​	6,265	​
30-59 days past due	​	​	53	​	​	52	​	​	23	​	​	9	​	​	2	​	​	1	​	​	3	​	​	143	​
60-89 days past due	​	​	19	​	​	16	​	​	7	​	​	3	​	​	1	​	​	​	​	​	1	​	​	47	​
90+ days past due	​	​	1	​	​	4	​	​	1	​	​	3	​	​	​	​	​	1	​	​	​	​	​	10	​
Non-performing	​	​	25	​	​	61	​	​	34	​	​	19	​	​	7	​	​	3	​	​	​	​	​	149	​
Total	​	$	16,650	​	$	10,239	​	$	5,091	​	$	2,252	​	$	895	​	$	240	​	$	4,255	​	$	39,622	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	May 1, 2022																							​
​	​	2022		​	2021		​	2020		​	2019		​	2018		​	Prior Years		​	Revolving Charge Accounts		​	Total		​
Retail customer receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	5,540	​	$	10,141	​	$	5,318	​	$	2,684	​	$	1,286	​	$	723	​	$	3,381	​	$	29,073	​
30-59 days past due	​	​	20	​	​	75	​	​	36	​	​	20	​	​	9	​	​	5	​	​	12	​	​	177	​
60-89 days past due	​	​	4	​	​	29	​	​	14	​	​	9	​	​	5	​	​	2	​	​	4	​	​	67	​
90+ days past due	​	​	​	​	​	​	​	​	1	​	​	​	​	​	​	​	​	​	​	​	​	​	​	1	​
Non-performing	​	​	3	​	​	40	​	​	44	​	​	41	​	​	25	​	​	31	​	​	14	​	​	198	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	1,506	​	​	2,404	​	​	1,211	​	​	577	​	​	234	​	​	105	​	​	91	​	​	6,128	​
30-59 days past due	​	​	20	​	​	52	​	​	33	​	​	17	​	​	6	​	​	2	​	​	3	​	​	133	​
60-89 days past due	​	​	7	​	​	25	​	​	15	​	​	6	​	​	1	​	​	1	​	​	1	​	​	56	​
90+ days past due	​	​	​	​	​	1	​	​	1	​	​	1	​	​	1	​	​	5	​	​	​	​	​	9	​
Non-performing	​	​	3	​	​	46	​	​	50	​	​	29	​	​	12	​	​	5	​	​	1	​	​	146	​
Total	​	$	7,103	​	$	12,813	​	$	6,723	​	$	3,384	​	$	1,579	​	$	879	​	$	3,507	​	$	35,988	​

​

​

The credit quality analysis of wholesale receivables by year of origination was as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	April 30, 2023																							​
​	​	2023		​	2022		​	2021		​	2020		​	2019		​	Prior Years		​	Revolving		​	Total		​
Wholesale receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	265	​	$	198	​	$	36	​	$	15	​	$	2	​	$	1	​	$	3,653	​	$	4,170	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	​	​	​	1	​	​	​	​	​	​	​	​	1	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	10	​	​	6	​	​	24	​	​	1	​	​	​	​	​	1	​	​	638	​	​	680	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total	​	$	275	​	$	204	​	$	60	​	$	16	​	$	3	​	$	2	​	$	4,291	​	$	4,851	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	October 30, 2022																							​
​	​	2022		​	2021		​	2020		​	2019		​	2018		​	Prior Years		​	Revolving		​	Total		​
Wholesale receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	387	​	$	64	​	$	27	​	$	4	​	​	​	​	$	2	​	$	2,371	​	$	2,855	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	1	​	​	​	​	​	​	​	​	​	​	​	1	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	7	​	​	29	​	​	2	​	​	1	​	​	​	​	​	1	​	​	377	​	​	417	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total	​	$	394	​	$	93	​	$	29	​	$	6	​	​	​	​	$	3	​	$	2,748	​	$	3,273	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	May 1, 2022																							​
​	​	2022		​	2021		​	2020		​	2019		​	2018		​	Prior Years		​	Revolving		​	Total		​
Wholesale receivables:																									​
Agriculture and turf	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	$	224	​	$	155	​	$	43	​	$	8	​	$	1	​	$	2	​	$	1,605	​	$	2,038	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	5	​	​	​	​	​	​	​	​	​	​	​	5	​
Construction and forestry	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Current	​	​	6	​	​	35	​	​	4	​	​	2	​	​	​	​	​	1	​	​	268	​	​	316	​
30+ days past due	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	1	​	​	​	​	​	1	​
Non-performing	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total	​	$	230	​	$	190	​	$	47	​	$	15	​	$	1	​	$	4	​	$	1,873	​	$	2,360	​

​

​

​

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Retail Notes		​	Revolving		​	​	​	​	​	​	​
​	​	& Financing		​	Charge		​	Wholesale		​	​	​	​
​	​	Leases		​	Accounts		​	Receivables		​	Total		​
Three Months Ended April 30, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance:											​	​
Beginning of period balance		$	140		$	16	​	$	4	​	$	160	​
Provision	​	​	30	​	​	8	​	​	​	​	​	38	​
Write-offs	​	​	(19)	​	​	(11)	​	​	​	​	​	(30)	​
Recoveries	​	​	6	​	​	6	​	​	​	​	​	12	​
End of period balance		$	157		$	19	​	$	4	​	$	180	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Six Months Ended April 30, 2023	​	​	​
Allowance:		​	​	​	​	​	​	​	​	​	​	​	​
Beginning of period balance		$	299		$	22	​	$	4	​	$	325	​
Provision	​	​	45	​	​	4	​	​	​	​	​	49	​
Provision transferred to held for sale	​	​	(142)	​	​	​	​	​	​	​	​	(142)	​
Provision (credit) subtotal	​	​	(97)	​	​	4	​	​	​	​	​	(93)	​
Write-offs	​	​	(37)	​	​	(18)	​	​	​	​	​	(55)	​
Recoveries	​	​	10	​	​	11	​	​	​	​	​	21	​
Translation adjustments	​	​	(18)	​	​	​	​	​	​	​	​	(18)	​
End of period balance		$	157		$	19	​	$	4	​	$	180	​
Financing receivables:	​	​	​	​	​	​	​	​	​	​	​	​	​
End of period balance		$	36,159		$	3,783	​	$	4,851	​	$	44,793	​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Retail Notes		​	Revolving		​	​	​	​	​	​
​	​	& Financing		​	Charge		​	Wholesale		​	​	​
​	​	Leases		​	Accounts		​	Receivables		​	Total		​
Three Months Ended May 1, 2022	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance:		​			​			​			​		​
Beginning of period balance	​	$	138		$	15	​	$	5	​	$	158	​
Provision	​		39	​	​	3	​	​	​	​		42	​
Write-offs	​		(18)	​	​	(8)	​	​	​	​		(26)	​
Recoveries	​		5	​	​	7	​	​	​	​		12	​
Translation adjustments	​		4	​	​	​	​	​	​	​		4	​
End of period balance	​	$	168	​	$	17	​	$	5	​	$	190	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Six Months Ended May 1, 2022	​	​											​
Allowance:											​	​	​
Beginning of period balance	​	$	138		$	21	​	$	7	​	$	166	​
Provision (credit)	​		52	​	​	(7)	​	​	(2)	​	​	43	​
Write-offs	​		(35)	​	​	(12)	​	​	​	​	​	(47)	​
Recoveries	​		9	​	​	15	​	​	​	​	​	24	​
Translation adjustments	​	​	4	​	​	​	​	​	​	​		4	​
End of period balance	​	$	168	​	$	17	​	$	5	​	$	190	​
Financing receivables:	​	​	​	​	​	​	​	​	​	​	​	​	​
End of period balance	​	$	32,481		$	3,507	​	$	2,360	​	$	38,348	​

​

In the first quarter of 2023, the Company determined that the financial services business in Russia met the held for sale criteria. The financing receivables in Russia were reclassified to “Other assets” and the associated allowance for credit losses was reversed in the first quarter of 2023. These operations were sold in the second quarter of 2023 (see Note 20).

Excluding the portfolio in Russia, the allowance for credit losses increased in the second quarter and the first six months of 2023 mainly due to higher portfolio balances and higher expected losses on turf and construction financing receivables. As part of the allowance setting process, the Company continues to monitor the economy, including potential impacts of inflation and interest rates, among other factors, on portfolio performance and adjustments to the allowance are incorporated, as necessary.

​

(9)  Securitization of Financing Receivables

As a part of its overall funding strategy, the Company periodically transfers certain financing receivables (retail notes) into VIEs that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

The components of consolidated restricted assets, secured borrowings, and other liabilities related to secured borrowings in securitization transactions were as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​	​	2023		​	2022		​	2022
Financing receivables securitized (retail notes)		$	5,674	​	$	5,952	​	$	4,085	​
Allowance for credit losses	​	​	(15)	​		(16)	​		(12)	​
Other assets (primarily restricted cash)	​	​	115	​		155	​		124	​
Total restricted securitized assets		$	5,774	​	$	6,091	​	$	4,197	​
​	​	​	​	​	​	​	​	​	​	​
Short-term securitization borrowings	​	$	5,379	​	$	5,711	​	$	4,006	​
Accrued interest on borrowings	​	​	8	​	​	6	​		2	​
Total liabilities related to restricted securitized assets	​	$	5,387	​	$	5,717	​	$	4,008	​

​

​

(10)  Inventories

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

​

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​	​	2023		​	2022		​	2022
Raw materials and supplies		$	4,647	​	$	4,442	​	$	4,384	​
Work-in-process	​	​	1,262	​		1,190	​		1,640	​
Finished goods and parts	​	​	6,435	​		5,363	​		5,434	​
Total FIFO value	​	​	12,344	​		10,995	​		11,458	​
Less adjustment to LIFO value	​	​	2,631	​		2,500	​		2,428	​
Inventories		$	9,713	​	$	8,495	​	$	9,030	​

​

​

​

(11)  Goodwill and Other Intangible Assets–Net

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​		Production &			Small Ag			Construction			​	​
​	​	Precision Ag		​	& Turf		​	& Forestry		​	Total
Goodwill at October 31, 2021	​	$	542	​	$	265	​	$	2,484	​	$	3,291	​
Acquisitions	​		122	​	​	69	​	​	600	​	​	791	​
Translation adjustments	​		(11)	​	​	(7)	​	​	(252)	​	​	(270)	​
Goodwill at May 1, 2022	​	$	653	​	$	327	​	$	2,832	​	$	3,812	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Goodwill at October 30, 2022	​	$	646	​	$	318	​	$	2,723	​	$	3,687	​
Acquisition	​	​	41	​	​	​	​	​	​	​	​	41	​
Translation adjustments	​	​	18	​	​	8	​	​	209	​	​	235	​
Goodwill at April 30, 2023	​	$	705	​	$	326	​	$	2,932	​	$	3,963	​

There were no accumulated goodwill impairment losses in the reported periods.

​

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

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​	​	2023		​	2022		​	2022
Amortized intangible assets:	​	​	​	​	​	​	​	​	​	​
Customer lists and relationships	​	$	525	​	$	493	​	$	520	​
Technology, patents, trademarks, and other	​	​	1,397	​		1,301	​		1,350	​
Total at cost	​	​	1,922	​		1,794	​		1,870	​
Less accumulated amortization:	​	​	​	​		​	​		​	​
Customer lists and relationships	​	​	193	​	​	166	​	​	158	​
Technology, patents, trademarks, and other	​	​	507	​	​	410	​	​	360	​
Total accumulated amortization	​	​	700	​	​	576	​	​	518	​
Other intangible assets – net	​	$	1,222	​	$	1,218	​	$	1,352	​

​

The amortization of other intangible assets in the second quarter and the first six months of 2023 was $45 million and $84 million, and for the second quarter and the first six months of 2022 was $34 million and $62 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2023 – $88, 2024 – $168, 2025 – $139, 2026 – $120, 2027 – $119, and 2028 –$86.

(12)  Short-Term Borrowings

Short-term borrowings were as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​
​	​	April 30		​	October 30		​	May 1		​
​		2023			2022			2022		​
Commercial paper	​	$	9,184	​	$	4,703	​	$	3,403	​
Notes payable to banks	​	​	284	​	​	402	​	​	555	​
Finance lease obligations due within one year	​	​	23	​	​	21	​	​	21	​
Long-term borrowings due within one year	​		7,618	​		7,466	​		8,434	​
Short-term borrowings	​	$	17,109	​	$	12,592	​	$	12,413	​

​

(13)  Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses were as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​		2023			2022		​	2022		​
Accounts payable:	​	​	​	​	​	​	​	​	​	​
Trade payables		$	3,680		$	3,894	​	$	3,631	​
Payables to unconsolidated affiliates	​	​	9	​	​	11	​	​	7	​
Dividends payable	​		371	​		343	​		325	​
Operating lease liabilities	​	​	294	​	​	302	​	​	260	​
Deposits withheld from dealers and merchants	​	​	157	​	​	163	​	​	150	​
Other	​		131	​		214	​		163	​
Accrued expenses:	​	​	​	​	​	​	​	​	​	​
Dealer sales discounts	​		605	​		1,044	​		400	​
Product warranties	​		1,562	​		1,427	​		1,286	​
Employee benefits	​		1,475	​		1,528	​		1,069	​
Accrued taxes	​	​	1,691	​	​	1,255	​	​	1,150	​
Unearned operating lease revenue	​	​	441	​	​	399	​	​	391	​
Unearned revenue (contractual liability)	​		673	​		557	​		614	​
Extended warranty premium	​	​	949	​	​	866	​	​	809	​
Accrued interest	​	​	354	​	​	288	​	​	256	​
Derivative liabilities	​	​	758	​	​	1,231	​	​	780	​
Other	​		1,566	​		1,300	​		1,388	​
Total accounts payable and accrued expenses		$	14,716		$	14,822	​	$	12,679	​

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $1,979 million at April 30, 2023, $1,280 million at October 30, 2022, and $1,173 million at May 1, 2022. Other eliminations were made for accrued taxes and other accrued expenses.

​

(14)  Long-Term Borrowings

Long-term borrowings were as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​
​	​	April 30		​	October 30		​	May 1		​
​		2023			2022			2022		​
Underwritten term debt	​	​		​	​		​	​		​
U.S. dollar notes and debentures:	​	​	​	​	​	​	​	​	​	​
2.75% notes due 2025	​	$	700	​	$	700	​	$	700	​
6.55% debentures due 2028	​		200	​		200	​		200	​
5.375% notes due 2029	​		500	​		500	​		500	​
3.10% notes due 2030	​	​	700	​	​	700	​	​	700	​
8.10% debentures due 2030	​		250	​		250	​		250	​
7.125% notes due 2031	​		300	​		300	​		300	​
3.90% notes due 2042	​		1,250	​		1,250	​		1,250	​
2.875% notes due 2049	​	​	500	​	​	500	​	​	500	​
3.75% notes due 2050	​	​	850	​	​	850	​	​	850	​
Euro notes:	​	​	​	​	​	​	​	​	​	​
.5% notes due 2023 (€500 principal)	​	​	​	​	​	​	​	​	525	​
1.375% notes due 2024 (€800 principal)	​	​	​	​	​	797	​	​	840	​
1.85% notes due 2028 (€600 principal)	​	​	662	​	​	598	​	​	630	​
2.20% notes due 2032 (€600 principal)	​	​	662	​	​	598	​	​	630	​
1.65% notes due 2039 (€650 principal)	​	​	717	​	​	648	​	​	682	​
Serial issuances	​	​	​	​	​	​	​	​	​	​
Medium-term notes: (principal as of: April 30, 2023 - $27,428, October 30, 2022 - $25,629, May 1, 2022 - $23,247)		​	26,734	​	​	24,604	​	​	22,740	​
Other notes and finance lease obligations	​		1,707	​		1,223	​		1,266	​
Less debt issuance costs and debt discounts	​	​	(121)	​	​	(122)	​	​	(116)	​
Long-term borrowings		$	35,611	​	$	33,596	​	$	32,447	​

Medium-term notes serially due through 2032 are primarily offered by prospectus and issued at fixed and variable rates. These notes are presented in the table above with fair value adjustments related to interest rate swaps. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other.

(15)  Leases - Lessor

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

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Six Months Ended					​
​		April 30, 2023			May 1, 2022			April 30, 2023			May 1, 2022		​
Sales-type and direct finance lease revenues	​	$	37	​	$	35	​	$	79	​	$	74	​
Operating lease revenues	​	​	321	​	​	330	​	​	642	​	​	665	​
Variable lease revenues	​	​	5	​	​	7	​	​	11	​	​	14	​
Total lease revenues	​	$	363	​	$	372	​	$	732	​	$	753	​

​

​

​

(16)  Commitments and Contingencies

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 current quality developments.

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) included in the following table totaled $949 million and $809 million at April 30, 2023 and May 1, 2022, respectively.

​

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Six Months Ended
​	​	April 30		​	May 1		​	April 30		​	May 1
​	​	2023		​	2022		​	2023		​	2022
Beginning of period balance		$	2,345		$	2,064		$	2,293		$	2,086	​
Payments	​	​	(274)	​		(224)	​	​	(537)	​		(417)	​
Amortization of premiums received	​	​	(63)	​		(64)	​	​	(146)	​		(130)	​
Accruals for warranties	​	​	392	​		223	​	​	647	​		404	​
Premiums received	​	​	108	​		91	​	​	215	​		174	​
Foreign exchange	​	​	3	​		5	​	​	39	​		(22)	​
End of period balance	​	$	2,511	​	$	2,095	​	$	2,511	​	$	2,095	​

​

At April 30, 2023, the Company had $207 million of guarantees issued to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere equipment. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At April 30, 2023, the accrued losses under these agreements were not material.

At April 30, 2023, the Company had commitments of $524 million for the construction and acquisition of property and equipment. Also, at April 30, 2023, the Company had restricted assets of $189 million, classified as Other assets.

The Company also had other miscellaneous contingent liabilities and guarantees totaling approximately $65 million at April 30, 2023. The accrued liability for these contingencies was not material at April 30, 2023.

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

​

(17)  Fair Value Measurements

The fair values of financial instruments that do not approximate the carrying values were as follows in millions of dollars. Long-term borrowings exclude finance lease liabilities.

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	April 30, 2023					​	October 30, 2022					​	May 1, 2022
​	​	Carrying Value		​	Fair Value		​	Carrying Value		​	Fair Value		​	Carrying Value		​	Fair Value
Financing receivables – net	​	$	38,954	​	$	38,337	​	$	36,634	​	$	35,526	​	$	34,085	​	$	33,540	​
Financing receivables securitized – net	​	​	5,659	​	​	5,494	​	​	5,936	​	​	5,698	​	​	4,073	​	​	4,016	​
Short-term securitization borrowings	​	​	5,379	​	​	5,271	​	​	5,711	​	​	5,577	​	​	4,006	​	​	3,944	​
Long-term borrowings due within one year	​	​	7,618	​	​	7,461	​	​	7,466	​	​	7,322	​	​	8,434	​	​	8,398	​
Long-term borrowings	​	​	35,571	​	​	34,802	​	​	33,566	​	​	31,852	​	​	32,410	​	​	31,975	​

​

Fair value measurements above were Level 3 for all financing receivables and Level 2 for all borrowings.

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

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

​

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow, excluding the Company’s cash equivalents, which were carried at cost that approximates fair value and consisted of money market funds and time deposits.

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
​	​	2023		​	2022		​	2022
Level 1:	​	​	​	​	​	​	​	​	​	​
Marketable securities	​	​	​	​	​	​	​	​	​	​
International equity securities	​	$	2	​	$	3	​	$	2	​
International mutual funds	​	​	11	​	​	​	​	​	​	​
U.S. equity fund	​	​	92	​	​	70	​	​	65	​
U.S. fixed income fund	​	​	97	​		​	​		​	​
U.S. government debt securities	​	​	64	​		62	​		59	​
Total Level 1 marketable securities	​	​	266	​	​	135	​	​	126	​
​	​	​	​	​	​	​	​	​	​	​
Level 2:	​	​	​	​	​	​	​	​	​	​
Marketable securities	​	​	​	​	​	​	​	​	​	​
U.S. government debt securities	​	​	138	​	​	121	​	​	130	​
Municipal debt securities	​	​	70	​		63	​		67	​
Corporate debt securities	​	​	213	​		200	​		206	​
International debt securities	​	​	1	​	​	60	​	​	2	​
Mortgage-backed securities	​	​	168	​		155	​		151	​
Total Level 2 marketable securities	​	​	590	​		599	​		556	​
Other assets - Derivatives		​	367	​	​	373	​	​	407	​
Accounts payable and accrued expenses - Derivatives		​	758	​	​	1,231	​	​	780	​
​	​	​	​	​	​	​	​	​	​	​
Level 3:	​	​	​	​	​	​	​	​	​	​
Accounts payable and accrued expenses - Deferred consideration	​	​	214	​	​	236	​	​	262	​

​

The contractual maturities of debt securities at April 30, 2023 in millions of dollars are shown below. Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Unrealized losses were not recognized in income due to the ability and intent to hold to maturity. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

​	​	​	​	​	​	​	​
​	​	Amortized		​	Fair		​
​	​	Cost		​	Value		​
Due in one year or less		$	25	​	$	25	​
Due after one through five years	​	​	123	​	​	116	​
Due after five through 10 years	​	​	192	​	​	171	​
Due after 10 years	​	​	206	​	​	174	​
Mortgage-backed securities	​	​	193	​	​	168	​
Debt securities		$	739		$	654	​

​

Fair value, nonrecurring Level 3 measurements from impairments, excluding financing receivables with specific allowances which were not significant, were as follows in millions of dollars. Inventories and property and equipment – net fair values for October 30, 2022 represent the fair value assessment at May 1, 2022.

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fair Value								​	Losses											​
​	​	​	​	​	​	​	​	​	​	​	Three Months Ended					​	Six Months Ended					​
​	​	April 30		​	October 30		​	May 1		​	April 30		​	May 1		​	April 30		​	May 1		​
​		2023			2022			2022			2023			2022			2023			2022
Inventories	​	​	​	​	$	19	​	$	19	​	​	​	​	$	8	​	​	​	​	$	8	​
Property and equipment – net	​	​	​	​	​	15	​	​	15	​	​	​	​	​	41	​	​	​	​	​	41	​
Other intangible assets – net	​	​	​	​	​	​	​	​	​	​	​	​	​	​	28	​	​	​	​	​	28	​

​

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

Marketable securities – The portfolio of investments is valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are valued using closing prices in the active market in which the investment trades.

​

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

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

Inventories – The impairment was based on net realizable value.

Property and equipment - net – The valuations were based on cost and market approaches. The inputs include replacement cost estimates adjusted for physical deterioration and economic obsolescence.

Other intangible assets - net – The Company considered external valuations based on the Company’s probability weighted cash flow analysis.

(18)  Derivative Instruments

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

All derivatives are recorded at fair value on the balance sheets. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. The cash flows from the derivative contracts were recorded in operating activities in the statements of consolidated cash flows. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

Cash Flow Hedges

Certain interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at April 30, 2023, October 30, 2022, and May 1, 2022 were $2,250 million, $1,950 million, and $2,450 million, respectively. Fair value gains or losses on cash flow hedges were recorded in other comprehensive income (OCI) and are subsequently reclassified into interest expense in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate changes on the related borrowings.

The amount of gain recorded in OCI at April 30, 2023 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $30 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair Value Hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at April 30, 2023, October 30, 2022, and May 1, 2022 were $10,943 million, $10,112 million, and $8,655 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

​

​

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows in millions of dollars. Fair value hedging adjustments are included in the carrying amount of the hedged item.

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Active Hedging Relationships					​	Discontinued Hedging Relationships					​
​	​	Carrying Amount		​	Cumulative Fair Value		​	Carrying Amount of		​	Cumulative Fair Value		​
​	​	of Hedged Item		​	Hedging Amount		​	Formerly Hedged Item		​	Hedging Amount		​
April 30, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​
Short-term borrowings	​	​	​	​	​	​	​	$	1,213	​	$	14	​
Long-term borrowings	​	$	10,334	​	$	(562)	​	​	5,657	​	​	(132)	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
October 30, 2022	​	​	​	​	​	​	​	​	​	​	​	​	​
Short-term borrowings	​	​	​	​	​	​	​	$	2,515	​	$	15	​
Long-term borrowings	​	$	9,060	​	$	(1,006)	​	​	5,520	​	​	(19)	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
May 1, 2022	​	​	​	​	​	​	​	​	​	​	​	​	​
Short-term borrowings	​	$	178	​	$	1	​	$	2,607	​	$	7	​
Long-term borrowings	​	​	7,827	​	​	(613)	​	​	5,120	​	​	106	​

​

Derivatives Not Designated as Hedging Instruments

The Company has certain interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures for certain borrowings, purchases or sales of inventory, and sales incentive programs. The total notional amounts of these interest rate swaps at April 30, 2023, October 30, 2022, and May 1, 2022 were $11,956 million, $10,568 million, and $9,912 million, the foreign exchange contracts were $9,163 million, $8,185 million, and $7,640 million, and the cross-currency interest rate contracts were $163 million, $260 million, and $264 million, respectively. The fair value gains or losses from derivatives not designated as hedging instruments were recorded in the statements of consolidated income, generally offsetting over time the exposure on the hedged item.

Fair values of derivative instruments in the condensed consolidated balance sheets were as follows in millions of dollars:

​	​	​	​	​	​	​	​	​	​	​
​		April 30			October 30			May 1
Other Assets	​	2023		​	2022		​	2022
Designated as hedging instruments:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts		$	104	​	$	87	​	$	63	​
	​	​	​	​	​	​	​	​	​	​
Not designated as hedging instruments:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts	​	​	171	​		212	​		180	​
Foreign exchange contracts	​	​	91	​		66	​		125	​
Cross-currency interest rate contracts	​	​	1	​		8	​		39	​
Total not designated	​	​	263	​		286	​		344	​
	​	​	​	​	​	​	​	​	​	​
Total derivative assets		$	367	​	$	373	​	$	407	​
	​	​	​	​	​	​	​	​	​	​
Accounts Payable and Accrued Expenses	​	​	​	​	​	​	​	​	​	​
Designated as hedging instruments:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts		$	611	​	$	1,004	​	$	591	​
	​	​	​	​	​	​	​	​	​	​
Not designated as hedging instruments:	​	​	​	​	​	​	​	​	​	​
Interest rate contracts	​	​	91	​	​	107	​	​	75	​
Foreign exchange contracts	​	​	42	​		118	​		114	​
Cross-currency interest rate contracts	​	​	14	​		2	​		​	​
Total not designated	​	​	147	​		227	​		189	​
	​	​	​	​	​	​	​	​	​	​
Total derivative liabilities		$	758	​	$	1,231	​	$	780	​

​

​

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

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Six Months Ended
​	​	April 30		​	May 1		​	April 30		​	May 1
​	​	2023		​	2022		​	2023		​	2022
Fair Value Hedges:					​	​					​	​
Interest rate contracts - Interest expense		$	(10)	​	$	(514)		$	229	​	$	(656)	​
	​	​	​	​	​	​	​	​	​	​	​	​	​
Cash Flow Hedges:	​	​	​	​	​	​	​	​	​	​	​	​	​
Recognized in OCI	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest rate contracts - OCI (pretax)	​	$	(4)	​	$	35	​	$	(5)	​	$	50	​
Reclassified from OCI	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest rate contracts - Interest expense	​	​	19	​		(1)	​	​	34	​		(3)	​
	​	​	​	​	​	​	​	​	​	​	​	​	​
Not Designated as Hedges:	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest rate contracts - Net sales	​	$	1	​	$	31	​	$	(6)	​	$	44	​
Interest rate contracts - Interest expense *		​	5	​	​	61		​	(3)	​	​	59	​
Foreign exchange contracts - Net sales	​	​	(2)	​	​	(1)	​	​	(1)	​	​	(1)	​
Foreign exchange contracts - Cost of sales	​	​	59	​		(79)	​	​	64	​	​	(80)	​
Foreign exchange contracts - Other operating expenses *	​	​	127	​		26	​	​	(15)	​		173	​
Total not designated		$	190	​	$	38		$	39	​	$	195	​

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

​

Counterparty Risk and Collateral

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

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at April 30, 2023, October 30, 2022, and May 1, 2022, was $716 million, $1,113 million, and $673 million, respectively. In accordance with the limits established in these agreements, the Company posted $308 million, $701 million, and $254 million of cash collateral at April 30, 2023, October 30, 2022, and May 1, 2022, respectively. In addition, the Company paid $8 million of collateral that was outstanding at April 30, 2023, October 30, 2022, and May 1, 2022 to participate in an international futures market to hedge currency exposure, not included in the table below.

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

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Gross Amounts		​	Netting		​	​		​	​	​
April 30, 2023		Recognized			Arrangements			Collateral			Net Amount
Assets		$	367		$	(168)		$	(29)		$	170	​
Liabilities	​	​	758	​	​	(168)	​	​	(308)	​	​	282	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Gross Amounts		​	Netting		​	​		​	​	​
October 30, 2022		Recognized			Arrangements			Collateral			Net Amount
Assets	​	$	373		$	(179)	​	$	(54)		$	140	​
Liabilities	​	​	1,231	​	​	(179)	​	​	(701)	​	​	351	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​		Gross Amounts			Netting			​			​	​
May 1, 2022	​	Recognized		​	Arrangements		​	Collateral		​	Net Amount
Assets	​	$	407	​	$	(110)	​	​	​	​	$	297	​
Liabilities	​		780	​		(110)	​	$	(254)	​		416	​

​

​

​

(19)  Stock Option and Restricted Stock Unit Awards

In December 2022, the Company granted stock options to employees for the purchase of 161 thousand shares of common stock at an exercise price of $438.44 per share and a binomial lattice model fair value of $136.46 per share at the grant date. At April 30, 2023, options for 1.9 million shares were outstanding with a weighted-average exercise price of $181.91 per share. The Company also granted 117 thousand of service-based restricted stock units and 41 thousand of performance/service-based restricted stock units to employees in the first six months of 2023. The weighted-average fair value of the service-based restricted stock units at the grant date was $433.30 per unit based on the market price of a share of underlying common stock. The fair value of the performance/service-based restricted stock units at the grant date was $424.93 per unit based on the market price of a share of underlying common stock excluding dividends. At April 30, 2023, the Company was authorized to grant awards for an additional 16.6 million shares under the equity incentive plans.

​

(20)  Disposition

​

On March 7, 2023, the Company sold its financial services business in Russia (registered in Russia as a leasing company) to Insight Investment Group. The total proceeds, net of restricted cash sold, were $36 million. The operations were included in the Company’s financial services operating segment through the date of sale. At the disposal date, the total assets were $31 million, consisting primarily of financing receivables, the total liabilities were $5 million, and the cumulative translation loss was $10 million. The Company did not incur additional gains or losses upon disposition. At January 29, 2023, the assets and liabilities were classified as “Other assets” and “Accounts payable and accrued expenses”, respectively, which included $100 million of restricted cash. In the first quarter of 2023, the Company reversed the allowance for credit losses and recorded a valuation allowance on the assets held for sale in “Selling, administrative and general expenses.”

(21)  S****pecial Items

​

2023

Financial Services Financing Incentives Correction

In the second quarter of 2023, the Company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023. Prior period results for Deere & Company were not restated, as the adjustment is considered immaterial to the Company’s financial statements.

2022

Impact of Events in Russia / Ukraine

In the second quarter of 2022, the Company suspended shipments of machines and service parts to Russia. The suspension of shipments to Russia reduced actual and forecasted revenue for the region, which made it probable future cash flows will not cover the carrying value of certain assets. The accounting consequences during the second quarter of 2022 were impairments of most long-lived assets, an increase in reserves of certain financial assets, and an accrual for various contractual uncertainties.

Gain on Previously Held Equity Investment

In the second quarter of 2022, the Company acquired full ownership of three former Deere-Hitachi joint venture factories and began new license and supply agreements with Hitachi Construction Machinery Co., Ltd. The fair value of the previous equity investment resulted in a non-cash gain of $326 million (pretax and after-tax).

UAW Collective Bargaining Agreement

In the first quarter of 2022, employees represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) approved a new collective bargaining agreement. The labor agreement included a lump sum ratification bonus payment of $8,500 per eligible employee, totaling $90 million, and an immediate wage increase of 10 percent plus further wage increases over the term of the contract. The lump sum payment was expensed in the first quarter of 2022.

​

​

The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and six months ended April 30, 2023 and May 1, 2022:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months														​	Six Months														​
​	​	PPA			SAT			CF			FS			Total		​	PPA		​	SAT			CF			FS			Total		​
2023 Expense:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Financing incentive – SA&G expense	​	​	​	​	​	​	​	​	​	​	$	173	​	$	173	​	​	​	​	​	​	​	​	​	​	$	173	​	$	173	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
2022 Expense (benefit):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Gain on remeasurement of equity investment – Other income	​	​	​	​	​	​	​	$	(326)	​	​	​	​	​	(326)	​	​	​	​	​	​	​	$	(326)	​	​	​	​	​	(326)	​
Total Russia/Ukraine events expense	​	$	46	​	$	1	​	​	47	​	​	26	​	​	120	​	$	46	​	$	1	​	​	47	​	​	26	​	​	120	​
UAW ratification bonus – Cost of sales	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	53	​	​	9	​	​	28	​	​	​	​	​	90	​
Total 2022 expense (benefit)	​	​	46	​	​	1	​	​	(279)	​	​	26	​	​	(206)	​	​	99	​	​	10	​	​	(251)	​	​	26	​	​	(116)	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Period over period change	​	$	(46)	​	$	(1)	​	$	279	​	$	147	​	$	379	​	$	(99)	​	$	(10)	​	$	251	​	$	147	​	$	289	​

​

​

(22)  Subsequent Events

​

On May 22, 2023, the Company entered into a retail note securitization using its revolving warehouse facility that resulted in securitization borrowings of $589 million.

​

On May 31, 2023, the Company’s Board of Directors declared a quarterly dividend of $1.25 per share payable on August 8, 2023, to stockholders of record on June 30, 2023.

​

​

​

​