DEERE & CO 10-Q

Item 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS All amounts are presented in millions of dollars unless otherwise specified. OVERVIEW Organization Deere & Company is a global leader in the production of agricultural, turf, construction, and forestry equipment and solutions. John Deere Financial provides financing for John Deere equipment, parts, services, and other input costs customers need to run their operations. Our operations are managed through the production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT. Smart Industrial Operating Model and Leap Ambitions We announced the Smart Industrial Operating Model in 2020. This operating model is based on three focus areas: (a) Production systems: A strategic alignment of products and solutions around our customers’ operations. (b) Technology stack: Investments in technology, as well as research and development, that deliver intelligent solutions to our customers through digital capabilities, automation, autonomy, and alternative power technologies. (c) Lifecycle solutions: The integration of our aftermarket and support capabilities to more effectively manage customer equipment, service, and technology needs across the full lifetime of a John Deere product. Our Leap Ambitions were launched in 2022. These ambitions are designed to boost economic value and sustainability for our customers. The ambitions align across our customers’ production systems seeking to optimize their operations to deliver better outcomes with fewer resources. In January 2024, we released our 2023 Business Impact Report, available at JohnDeere.com/sustainability. This report identifies important progress on our Leap Ambitions in fiscal year 2023. The information in our 2023 Business Impact Report is not incorporated by reference into, and does not form a part of, this Quarterly Report on Form 10-Q. Trends and Economic Conditions Industry Sales Outlook for Fiscal Year 2024 Agriculture and Turf Construction and Forestry Company Trends – Customers seek to improve profitability, productivity, and sustainability through technology. Integration of technology into equipment is a persistent market trend. Our Smart Industrial Operating Model and Leap Ambitions are intended to capitalize on this market trend. These technologies are incorporated into products within each of our operating segments. We expect this trend to persist for the foreseeable future. The investments in these technologies and in establishing a Solutions as a Service business model might increase our operating costs and may decrease operating margins during the transition period. In the first quarter of 2024, we announced an agreement with SpaceX to expand machine connectivity for our customers in rural areas through satellite communication. 24 ​ Company Outlook for 2024 Production volumes are expected to decline in 2024 as demand moderates to more normal levels. Agriculture and Turf Outlook for 2024 ● We expect large and small agricultural equipment sales to be down from 2023 levels in North America, Europe, and South America. ● Sales of compact utility tractors continue to be lower as the industry works to bring down inventory levels, while demand for turf products has stabilized. ● We continue to produce at levels in line with retail demand in North America. To manage inventory in Europe and Brazil, we are producing at levels below retail demand. ● Agricultural fundamentals are expected to moderate in 2024 due to lower commodity prices and elevated interest rates, offset by resilient farm balance sheets and lower input costs. ● The U.S. equipment fleet age is above 20-year averages for both tractors and combines. ● The dairy and livestock sector continues to benefit from elevated cattle and hay prices. ● Commodity markets remain disrupted in Central and Eastern Europe due to the Russia/Ukraine war. Western Europe equipment demand is moderately impacted by uncertainty related to current cash crop receipts, agriculture policy changes, and high interest rates. ● Demand in Brazil is expected to moderate due to adverse weather conditions and high interest rates. ● Industry sales in Asia are forecasted to be down moderately. Construction and Forestry Outlook for 2024 ● Construction equipment industry sales are forecasted to be down from 2023 levels. ● Benefits from increasing U.S. infrastructure spending, elevated manufacturing investment levels, and improving single family housing starts are expected to partially offset moderation in office and retail construction. ● Roadbuilding demand remains strong in the U.S., largely offset by softening demand in Europe. Financial Services Outlook for 2024 ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ Up moderately ​ + Nonrecurring prior period special items ​ Favorable ​ + Higher average portfolio ​ Favorable ​ (-) Financing spreads ​ Unfavorable ​ (-) Provision for credit losses ​ Unfavorable ​ Additional Trends Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, and government policies. These factors affect farmers’ income and may result in lower demand for equipment. We may experience any of the following effects during unfavorable market conditions: lower net sales, higher sales discounts, higher receivable write-offs, or losses on equipment on operating leases. A potential benefit is that customers may invest in integrated technology solutions and precision agriculture to lower input costs and improve margins. Interest Rates. Central bank policy interest rates increased in 2023 and have remained elevated. Increased rates impacted us in several ways, primarily affecting the financing spreads for the financial services operations and demand for our products. The market for our products is negatively impacted by higher interest rates. We expect higher borrowing costs for our customers to primarily affect discretionary and residential product sales in 2024. Most retail customer receivables are fixed rate. Wholesale financing receivables generally are variable rate. Both types of receivables are financed with fixed and floating rate borrowings. We manage our exposure to interest rate fluctuations by matching our receivables with our funding sources. We also enter into interest rate swap agreements to match our interest rate exposure. Rising interest rates have historically impacted our borrowings sooner than the benefit is realized from receivable and lease portfolios. As a result, our financial services operations experienced $27 (after-tax) less favorable financing spreads in 2024 compared to 2023. We expect to continue experiencing spread compression in 2024, but at a moderating pace relative to spread compression experienced in 2023. Higher interest rates are driven by factors outside of our control, and as a result we cannot reasonably foresee when this condition will subside. 25 ​ Other Items of Concern and Uncertainties – Other items that could impact our results are: ● global and regional political conditions, including the ongoing war between Russia and Ukraine and the war between Israel and Hamas, ● economic, tax, and trade policies, ● new or retaliatory tariffs, ● capital market disruptions, ● foreign currency and capital control policies, ● regulations and legislation regarding right to repair, ● weather conditions, ● marketplace adoption and monetization of technologies we have invested in, ● our ability to strengthen our digital capabilities, automation, autonomy, and alternative power technologies, ● changes in demand and pricing for new and used equipment, ● significant fluctuations in foreign currency exchange rates, ● volatility in the prices of many commodities, and ● slower economic growth or recession. consolidated results – 2024 Compared with 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Deere & Company ​ January 28 ​ January 29 ​ (In millions of dollars, except per share amounts) ​ 2024 ​ 2023 ​ Net sales and revenues ​ $ 12,185 ​ $ 12,652 ​ Net income attributable to Deere & Company ​ ​ 1,751 ​ ​ 1,959 ​ Diluted earnings per share ​ ​ 6.23 ​ ​ 6.55 ​ ​ Net sales and revenues decreased for the quarter primarily due to lower sales volumes. Net income and diluted EPS decreased driven by lower sales. The discussion of net sales and operating profit is included in the Business Segment Results below. An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ ​ Deere & Company ​ 2024 ​ 2023 ​ % Change ​ Cost of sales to net sales ​ ​ 68.7% ​ ​ 69.6% ​ ​ ​ (+) Price realization ​ ​ ​ ​ ​ ​ ​ Favorable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ $ 339 ​ $ 256 ​ +32 ​ Higher due to investment income earned on international mutual funds securities. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 533 ​ ​ 495 ​ +8 ​ Higher due to continued focus on developing and incorporating technology solutions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, administrative and general expenses ​ ​ 1,066 ​ ​ 952 ​ +12 ​ Increased mostly due to higher employee pay driven by inflationary conditions and profit-sharing incentives. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 802 ​ ​ 479 ​ +67 ​ Increased primarily due to higher average borrowing rates and higher average borrowings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating expenses ​ ​ 369 ​ ​ 299 ​ +23 ​ Increased due to higher foreign exchange losses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes ​ ​ 469 ​ ​ 537 ​ -13 ​ Decreased as a result of lower pretax income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 26 ​ Business Segment Results – 2024 compared with 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ ​ Production and Precision Agriculture 2024 2023 % Change ​ Net sales ​ $ 4,849 ​ $ 5,198 ​ -7 ​ Operating profit ​ ​ 1,045 ​ ​ 1,208 ​ -13 ​ Operating margin ​ ​ 21.6% ​ ​ 23.2% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +4 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +1 ​ Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in Brazil, the U.S., Canada, and Europe), driven by moderating agriculture fundamentals. This was partially offset by price realization in the U.S., Canada, and Europe due to inflation. Operating profit decreased primarily due to lower shipment volumes and increased selling, administrative and general expenses and research and development expenses, partially offset by price realization. Production & Precision Agriculture Operating Profit First Quarter 2024 Compared to First Quarter 2023 ​ 27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ ​ Small Agriculture and Turf 2024 2023 % Change ​ Net sales ​ $ 2,425 ​ $ 3,001 ​ -19 ​ Operating profit ​ ​ 326 ​ ​ 447 ​ -27 ​ Operating margin ​ ​ 13.4% ​ ​ 14.9% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +3 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +1 ​ ​ Small agriculture and turf sales decreased for the quarter due to lower shipment volumes (primarily in the U.S., Canada, Europe, and Mexico) driven by moderating market demand. This was partially offset by price realization in the U.S., Canada, and Europe due to inflation. Operating profit decreased primarily as a result of lower shipment volumes and increased selling, administrative and general expenses and research and development expenses. These items were partially offset by price realization and lower production costs, driven by a decrease in material and freight costs. Small Agriculture & Turf Operating Profit First Quarter 2024 Compared to First Quarter 2023 ​ 28 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ ​ Construction and Forestry 2024 2023 % Change ​ Net sales ​ $ 3,212 ​ $ 3,203 ​ ​ ​ Operating profit ​ ​ 566 ​ ​ 625 ​ -9 ​ Operating margin ​ ​ 17.6% ​ ​ 19.5% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +3 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +1 ​ ​ Construction and forestry sales were flat for the quarter, with positive price realization in the U.S. and Canada offset by lower shipment volumes. Operating profit decreased primarily due to higher production costs, lower shipment volumes, the unfavorable effects of foreign currency exchange, and higher selling, administrative and general expenses and research and development expenses. These items were partially offset by price realization and a favorable sales mix. Construction & Forestry Operating Profit First Quarter 2024 Compared to First Quarter 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ ​ Financial Services ​ 2024 ​ 2023 ​ % Change ​ Revenue (including intercompany) ​ $ 1,552 ​ $ 1,244 ​ +25 ​ Interest expense ​ ​ 762 ​ ​ 442 ​ +72 ​ Net income ​ ​ 207 ​ ​ 185 ​ +12 ​ ​ The average balance of receivables and leases financed was 19 percent higher in the first three months of 2024, compared with the same period last year. Revenue also increased due to higher average financing rates. Interest expense increased in the first quarter of 2024 as a result of higher average borrowing rates and higher average borrowings. Net income for the quarter increased mainly due to income earned on higher average portfolio balances, partially offset by less favorable financing spreads as a result of higher interest rates. ​ 29 ​ Critical Accounting Estimates See our critical accounting estimates discussed in the Management’s Discussion and Analysis of the most recently filed Annual Report on Form 10-K. There have been no material changes to these policies. CAPITAL RESOURCES AND LIQUIDITY – 2024 compared with 2023 We have access to global markets at a reasonable cost. Sources of liquidity include: ● cash, cash equivalents, and marketable securities on hand, ● funds from operations, ● the issuance of commercial paper and term debt, ● the securitization of retail notes, and ● bank lines of credit. We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We are forecasting lower operating cash flows in 2024 compared with 2023. We operate in multiple industries, which have unique funding requirements. The equipment operations are capital intensive. Historically, these operations have been subject to seasonal variations in financing requirements for inventories and receivables from dealers. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Key metrics are provided in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 28 ​ October 29 ​ January 29 ​ ​ ​ 2024 ​ 2023 ​ 2023 ​ Cash, cash equivalents, and marketable securities ​ $ 6,273 ​ $ 8,404 ​ $ 4,828 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts and notes receivable – net ​ ​ 7,795 ​ ​ 7,739 ​ ​ 7,609 ​ Ratio to prior 12 month’s net sales ​ ​ 14% ​ ​ 14% ​ ​ 15% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories ​ ​ 8,937 ​ ​ 8,160 ​ ​ 10,056 ​ Ratio to prior 12 month’s cost of sales ​ ​ 24% ​ ​ 22% ​ ​ 27% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unused credit lines ​ ​ 1,577 ​ ​ 841 ​ ​ 1,581 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Services: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of interest-bearing debt to stockholder’s equity ​ ​ 8.3 to 1 ​ ​ 8.4 to 1 ​ ​ 8.2 to 1 ​ In the first quarter, we invested $128 in U.S. dollar denominated bonds issued by the central bank of Argentina. The bonds are recorded in “Marketable securities,” classified as “International debt securities.” These bonds can be held until maturity or sold in a secondary market outside of Argentina to settle intercompany debt (see note 17). The increase in unused credit lines at January 28, 2024 compared to October 29, 2023 relates to a decrease in commercial paper outstanding generally corresponding with the level of receivable and lease portfolios. We forecast lower operating cash flows in 2024 driven by a decrease in net income adjusted for non-cash provisions and an unfavorable change in working capital. There have been no material changes to the contractual obligations and other cash requirements identified in our most recently filed Annual Report on Form 10-K. ​ 30 ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ January 28 ​ January 29 ​ ​ 2024 2023 Net cash used for operating activities ​ $ (908) ​ $ (1,246) ​ Net cash provided by investing activities ​ ​ 1,217 ​ ​ 760 ​ Net cash used for financing activities ​ ​ (2,645) ​ ​ (339) ​ Effect of exchange rate changes on cash, cash equivalents, and restricted cash ​ ​ 16 ​ ​ 62 ​ Net decrease in cash, cash equivalents, and restricted cash ​ $ (2,320) ​ $ (763) ​ Cash outflows from consolidated operating activities in the first three months of 2024 were $908. This resulted mainly from a working capital change, partially offset by net income adjusted for non-cash provisions. Cash inflows from investing activities were $1,217 in the first three months of this year. The primary drivers were collections of receivables (excluding receivables related to sales) exceeding the cost of receivables acquired and a change in collateral on derivatives – net, partially offset by purchases of property and equipment. Cash outflows from financing activities were $2,645 in the first three months of 2024. The increase in cash used for financing activities was due primarily to net payments of borrowings. Cash returned to shareholders was $1,714 in the first three months of 2024. Cash, cash equivalents, and restricted cash decreased $2,320 during the first three months of this year. Key Metrics and Balance Sheet Changes Trade Accounts and Notes Receivable – Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased by $56 during the first three months of 2024, mostly due to a seasonal increase. These receivables increased $186, compared to a year ago, due to higher dealer inventory levels. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1 percent at each of January 28, 2024, October 29, 2023, and January 29, 2023. Financing Receivables and Equipment on Operating Leases – Financing receivables and equipment on operating leases consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases decreased $1,066 during the first quarter of 2024, primarily due to seasonal payments, and increased $8,386 in the past 12 months, due to strong retail sales. Total acquisition volumes of financing receivables and equipment on operating leases were 16 percent higher in the first three months of 2024, compared with the same period last year, as volumes of wholesale notes, retail notes, and financing leases were higher, while revolving charge accounts and operating leases were lower compared to the same period last year. Inventories – Inventories increased by $777 during the first three months, primarily due to a seasonal increase. Inventories decreased $1,119, compared to a year ago, due to lower forecasted shipment volumes. A majority of these inventories are valued on the last-in, first-out (LIFO) method. Property and Equipment – Property and equipment cash expenditures in the first three months of 2024 were $362, compared with $315 in the same period last year. Capital expenditures in 2024 are estimated to be approximately $1,900. Accounts Payable and Accrued Expenses – Accounts payable and accrued expenses decreased by $2,769 in the first three months of 2024, primarily due to a decrease in accrued expenses associated with employee benefits, dealer sales discounts, and derivative liabilities. Accounts payable and accrued expenses increased $253 compared to a year ago, due to an increase in accrued expenses associated with extended warranty premium, product warranties, and accrued interest, partially offset by a decrease in accounts payable associated with trade payables. Borrowings – Total external borrowings decreased by $245 in the first three months of 2024 and increased $9,102 compared to a year ago, generally corresponding with the level of the receivable and the lease portfolio, as well as other working capital requirements. John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 9). The facility was renewed in November 2023 with an expiration in November 2024 and with an increase in the total capacity or “financing limit” from $1,500 to $2,000. At January 28, 2024, $1,118 of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected. In the first three months of 2024, the financial services operations retired $881 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in total short-term borrowings (original maturities three months or less).” 31 ​ Lines of Credit – We also have access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $10,310 at January 28, 2024, $1,577 of which were unused. For the purpose of computing unused credit lines, commercial paper, and short-term bank borrowings were considered to constitute utilization. Included in the total credit lines at January 28, 2024 was a 364-day credit facility agreement of $5,000, expiring in the second quarter of 2024. In addition, total credit lines included long-term credit facility agreements of $2,500, expiring in the second quarter of 2027, and $2,500, expiring in the second quarter of 2028. These credit agreements require Capital Corporation and other parts of our business to maintain certain performance metrics and liquidity targets. We expect to extend the terms of these credit facilities. All requirements in the credit agreements have been met during the periods included in the financial statements. Debt Ratings – To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold our securities. A credit rating agency may change or withdraw ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets. The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by us are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior ​ ​ ​ ​ Long-Term ​ Short-Term ​ Outlook Fitch Ratings ​ A+ ​ F1 ​ Stable ​ Moody’s Investors Service, Inc. A1 Prime-1 Stable ​ Standard & Poor’s A A-1 Stable ​ ​ FORWARD-LOOKING STATEMENTS Certain statements contained herein, including in the section entitled “Overview” relating to future events, expectations, and trends constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of our operations generally while others could more heavily affect a particular line of business. Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, we expressly disclaim any obligation to update or revise our forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to: ​ ● changes and compliance with U.S., foreign, and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies; ● political, economic, and social instability of the geographies in which we operate, including the ongoing war between Russia and Ukraine and the war between Israel and Hamas; ● adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints; ● worldwide demand for food and different forms of renewable energy; ● the ability to execute business strategies, including our Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions; ● the ability to understand and meet customers’ changing expectations and demand for John Deere products and solutions; ● accurately forecasting customer demand for products and services and adequately managing inventory; ● the ability to integrate new technology, including automation and machine learning, and deliver precision technology, alternative power technologies, and solutions to customers, including through our Solutions as a Service business model; ● changes to governmental communications channels (radio frequency technology); ● the ability to adapt in highly competitive markets; ● dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions; ● changes in climate patterns, unfavorable weather events, and natural disasters; ● governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy; 32 ​ ● higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions; ● availability and price of raw materials, components, and whole goods; ● delays or disruptions in our supply chain; ● our equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations; ● the ability to attract, develop, engage, and retain qualified personnel; ● security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products; ● loss of or challenges to intellectual property rights; ● legislation introduced or enacted that could affect our business model and intellectual property, such as right to repair legislation; ● investigations, claims, lawsuits, or other legal proceedings; ● events that damage our reputation or brand; ● world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and ● housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment. Further information concerning us and our businesses, including factors that could materially affect our financial results, is included in our other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q). There also may be other factors that we cannot anticipate or that are not described herein because we do not currently perceive them to be material. ​ SUPPLEMENTAL CONSOLIDATING DATA The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. Equipment operations represents the enterprise without financial services. Equipment operations includes production and precision agriculture operations, small agriculture and turf operations, construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements. Equipment operations and financial services participate in different industries. Equipment operations primarily generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial services finances sales and leases by dealers of new and used equipment that is largely manufactured by us. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences. ​ 33 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA ​ ​ STATEMENTS OF INCOME ​ ​ For the Three Months Ended January 28, 2024 and January 29, 2023 ​ ​ Unaudited ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ Net Sales and Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 10,486 ​ $ 11,402 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 10,486 ​ $ 11,402 ​ ​ Finance and interest income ​ ​ 157 ​ 114 ​ $ 1,433 ​ $ 1,067 ​ $ (230) ​ $ (187) ​ ​ 1,360 ​ ​ 994 1 ​ ​ Other income ​ ​ 289 ​ 234 ​ ​ 119 ​ 177 ​ ​ (69) ​ (155) ​ ​ 339 ​ 256 2, 3 ​ ​ Total ​ ​ 10,932 ​ 11,750 ​ ​ 1,552 ​ 1,244 ​ ​ (299) ​ (342) ​ ​ 12,185 ​ 12,652 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 7,207 ​ 7,940 ​ ​ ​ ​ ​ ​ ​ ​ (7) ​ ​ (6) ​ ​ 7,200 ​ ​ 7,934 4 ​ ​ Research and development expenses ​ ​ 533 ​ 495 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 533 ​ ​ 495 ​ ​ Selling, administrative and general expenses ​ ​ 876 ​ 783 ​ ​ 192 ​ 172 ​ ​ (2) ​ (3) ​ ​ 1,066 ​ 952 4 ​ ​ Interest expense ​ ​ 108 ​ 101 ​ ​ 762 ​ 442 ​ ​ (68) ​ (64) ​ ​ 802 ​ 479 1 ​ ​ Interest compensation to Financial Services ​ ​ 162 ​ 123 ​ ​ ​ ​ ​ ​ ​ ​ (162) ​ ​ (123) ​ ​ ​ ​ ​ ​ 1 ​ ​ Other operating expenses ​ ​ 90 ​ 53 ​ ​ 339 ​ 392 ​ ​ (60) ​ (146) ​ ​ 369 ​ 299 3, 5 ​ ​ Total ​ ​ 8,976 ​ 9,495 ​ ​ 1,293 ​ 1,006 ​ ​ (299) ​ (342) ​ ​ 9,970 ​ 10,159 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before Income Taxes ​ ​ 1,956 ​ 2,255 ​ ​ 259 ​ 238 ​ ​ ​ ​ ​ ​ ​ 2,215 ​ 2,493 ​ ​ Provision for income taxes ​ ​ 416 ​ 483 ​ ​ 53 ​ 54 ​ ​ ​ ​ ​ ​ ​ 469 ​ 537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income after Income Taxes ​ ​ 1,540 ​ 1,772 ​ ​ 206 ​ 184 ​ ​ ​ ​ ​ ​ ​ 1,746 ​ 1,956 ​ ​ Equity in income of unconsolidated affiliates ​ ​ 1 ​ ​ ​ ​ 1 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 1,541 ​ 1,772 ​ ​ 207 ​ 185 ​ ​ ​ ​ ​ ​ ​ 1,748 ​ 1,957 ​ ​ Less: Net loss attributable to noncontrolling interests ​ ​ (3) ​ (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3) ​ ​ (2) ​ ​ Net Income Attributable to Deere & Company ​ $ 1,544 ​ $ 1,774 ​ $ 207 ​ $ 185 ​ ​ ​ ​ ​ ​ ​ $ 1,751 ​ $ 1,959 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 Elimination of intercompany interest income and expense. 2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases. 3 Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses. 4 Elimination of intercompany service fees. 5 Elimination of financial services’ lease depreciation expense related to inventory transferred to equipment on operating leases. ​ ​ 34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA (Continued) ​ ​ CONDENSED BALANCE SHEETS ​ ​ Unaudited ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ Jan 28 ​ Oct 29 ​ Jan 29 ​ Jan 28 ​ Oct 29 ​ Jan 29 ​ Jan 28 ​ Oct 29 ​ Jan 29 ​ Jan 28 ​ Oct 29 ​ Jan 29 ​ ​ ​ 2024 ​ 2023 ​ 2023 ​ 2024 ​ 2023 ​ 2023 ​ 2024 ​ 2023 ​ 2023 ​ 2024 ​ 2023 ​ 2023 ​ Assets ​ ​ Cash and cash equivalents ​ $ 3,467 ​ $ 5,720 ​ $ 2,665 ​ $ 1,670 ​ $ 1,738 ​ $ 1,311 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 5,137 ​ $ 7,458 ​ $ 3,976 ​ ​ Marketable securities ​ ​ 147 ​ 104 ​ 18 ​ ​ 989 ​ 842 ​ 834 ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,136 ​ 946 ​ 852 ​ ​ Receivables from Financial Services ​ ​ 4,296 ​ 4,516 ​ 5,348 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (4,296) ​ $ (4,516) ​ $ (5,348) ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ ​ Trade accounts and notes receivable – net ​ ​ 1,093 ​ 1,320 ​ 1,342 ​ ​ 9,167 ​ 8,687 ​ 7,827 ​ ​ (2,465) ​ (2,268) ​ (1,560) ​ ​ 7,795 ​ 7,739 ​ 7,609 7 ​ ​ Financing receivables – net ​ ​ 72 ​ 64 ​ 51 ​ ​ 43,636 ​ 43,609 ​ 36,831 ​ ​ ​ ​ ​ ​ ​ ​ ​ 43,708 ​ 43,673 ​ 36,882 ​ ​ Financing receivables securitized – net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,400 ​ 7,335 ​ 5,089 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,400 ​ 7,335 ​ 5,089 ​ ​ Other receivables ​ ​ 1,515 ​ 1,813 ​ 1,583 ​ ​ 559 ​ 869 ​ 489 ​ ​ (57) ​ (59) ​ (80) ​ ​ 2,017 ​ 2,623 ​ 1,992 7 ​ ​ Equipment on operating leases – net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,751 ​ 6,917 ​ 6,502 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,751 ​ 6,917 ​ 6,502 ​ ​ Inventories ​ ​ 8,937 ​ 8,160 ​ 10,056 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,937 ​ ​ 8,160 ​ ​ 10,056 ​ ​ Property and equipment – net ​ ​ 6,879 ​ 6,843 ​ 6,178 ​ ​ 35 ​ 36 ​ 34 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,914 ​ 6,879 ​ 6,212 ​ ​ Goodwill ​ ​ 3,966 ​ 3,900 ​ 3,891 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,966 ​ ​ 3,900 ​ ​ 3,891 ​ ​ Other intangible assets – net ​ ​ 1,112 ​ 1,133 ​ 1,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,112 ​ 1,133 ​ 1,255 ​ ​ Retirement benefits ​ ​ 3,013 ​ 2,936 ​ 3,728 ​ ​ 75 ​ 72 ​ 67 ​ ​ (1) ​ (1) ​ (2) ​ ​ 3,087 ​ 3,007 ​ 3,793 8 ​ ​ Deferred income taxes ​ ​ 2,133 ​ 2,133 ​ 1,015 ​ ​ 72 ​ 68 ​ 53 ​ ​ (372) ​ (387) ​ (154) ​ ​ 1,833 ​ 1,814 ​ 914 9 ​ ​ Other assets ​ ​ 2,058 ​ 1,948 ​ 1,936 ​ ​ 546 ​ 559 ​ 684 ​ ​ (26) ​ (4) ​ (23) ​ ​ 2,578 ​ 2,503 ​ 2,597 ​ ​ Total Assets ​ $ 38,688 ​ $ 40,590 ​ $ 39,066 ​ $ 69,900 ​ $ 70,732 ​ $ 59,721 ​ $ (7,217) ​ $ (7,235) ​ $ (7,167) ​ $ 101,371 ​ $ 104,087 ​ $ 91,620 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings ​ $ 1,203 ​ $ 1,230 ​ $ 969 ​ $ 15,914 ​ $ 16,709 ​ $ 13,160 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 17,117 ​ $ 17,939 ​ $ 14,129 ​ ​ Short-term securitization borrowings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,116 ​ 6,995 ​ 4,864 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,116 ​ 6,995 ​ 4,864 ​ ​ Payables to Equipment Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,296 ​ 4,516 ​ 5,348 ​ $ (4,296) ​ $ (4,516) ​ $ (5,348) ​ ​ ​ ​ ​ ​ ​ 6 ​ ​ Accounts payable and accrued expenses ​ ​ 12,677 ​ 14,862 ​ 11,819 ​ ​ 3,232 ​ 3,599 ​ 2,952 ​ ​ (2,548) ​ (2,331) ​ (1,663) ​ ​ 13,361 ​ 16,130 ​ 13,108 7 ​ ​ Deferred income taxes ​ ​ 478 ​ 452 ​ 404 ​ ​ 444 ​ 455 ​ 269 ​ ​ (372) ​ (387) ​ (154) ​ ​ 550 ​ 520 ​ 519 9 ​ ​ Long-term borrowings ​ ​ 7,270 ​ 7,210 ​ 8,155 ​ ​ 32,663 ​ 31,267 ​ 26,916 ​ ​ ​ ​ ​ ​ ​ ​ ​ 39,933 ​ 38,477 ​ 35,071 ​ ​ Retirement benefits and other liabilities ​ ​ 2,006 ​ 2,032 ​ 2,384 ​ ​ 110 ​ 109 ​ 111 ​ ​ (1) ​ (1) ​ (2) ​ ​ 2,115 ​ 2,140 ​ 2,493 8 ​ ​ Total liabilities ​ ​ 23,634 ​ ​ 25,786 ​ ​ 23,731 ​ ​ 62,775 ​ ​ 63,650 ​ ​ 53,620 ​ ​ (7,217) ​ ​ (7,235) ​ ​ (7,167) ​ ​ 79,192 ​ ​ 82,201 ​ ​ 70,184 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 16) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interest ​ ​ 100 ​ ​ 97 ​ ​ 100 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 100 ​ ​ 97 ​ ​ 100 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deere & Company stockholders’ equity ​ ​ 22,075 ​ 21,785 ​ 21,332 ​ ​ 7,125 ​ ​ 7,082 ​ ​ 6,101 ​ ​ (7,125) ​ ​ (7,082) ​ ​ (6,101) ​ ​ 22,075 ​ ​ 21,785 ​ ​ 21,332 10 ​ ​ Noncontrolling interests ​ ​ 4 ​ 4 ​ 4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 ​ ​ 4 ​ ​ 4 ​ ​ Financial Services’ equity ​ ​ (7,125) ​ ​ (7,082) ​ ​ (6,101) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,125 ​ ​ 7,082 ​ ​ 6,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ Adjusted total stockholders’ equity ​ ​ 14,954 ​ 14,707 ​ 15,235 ​ ​ 7,125 ​ 7,082 ​ 6,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ 22,079 ​ 21,789 ​ 21,336 ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 38,688 ​ $ 40,590 ​ $ 39,066 ​ $ 69,900 ​ $ 70,732 ​ $ 59,721 ​ $ (7,217) ​ $ (7,235) ​ $ (7,167) ​ $ 101,371 ​ $ 104,087 ​ $ 91,620 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 Elimination of receivables / payables between equipment operations and financial services. 7 Primarily reclassification of sales incentive accruals on receivables sold to financial services. 8 Reclassification of net pension assets / liabilities. 9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions. 10 Elimination of financial services’ equity. ​ ​ 35 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA (Continued) ​ ​ STATEMENTS OF CASH FLOWS ​ ​ For the Three Months Ended January 28, 2024 and January 29, 2023 ​ ​ Unaudited ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ Cash Flows from Operating Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 1,541 ​ $ 1,772 ​ $ 207 ​ $ 185 ​ ​ ​ ​ ​ ​ ​ $ 1,748 ​ $ 1,957 ​ ​ Adjustments to reconcile net income to net cash provided by (used for) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (credit) for credit losses ​ (2) ​ 1 ​ 33 ​ (131) ​ ​ ​ ​ ​ 31 ​ (130) ​ ​ Provision for depreciation and amortization ​ 302 ​ 279 ​ 254 ​ 252 ​ $ (36) ​ $ (37) ​ 520 ​ 494 11 ​ ​ Share-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 46 ​ ​ 23 ​ ​ 46 ​ ​ 23 12 ​ ​ Distributed earnings of Financial Services ​ 233 ​ 3 ​ ​ ​ ​ ​ (233) ​ (3) ​ ​ ​ ​ 13 ​ ​ Provision (credit) for deferred income taxes ​ 48 ​ (39) ​ (21) ​ (17) ​ ​ ​ ​ ​ 27 ​ (56) ​ ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Receivables related to sales ​ 209 ​ (23) ​ ​ ​ ​ ​ ​ ​ ​ (486) ​ ​ (992) ​ ​ (277) ​ ​ (1,015) 14, 16 ​ ​ Inventories ​ (687) ​ (1,254) ​ ​ ​ ​ ​ ​ ​ ​ (36) ​ ​ (25) ​ ​ (723) ​ ​ (1,279) 15 ​ ​ Accounts payable and accrued expenses ​ (2,155) ​ (1,458) ​ 25 ​ 145 ​ (197) ​ (264) ​ (2,327) ​ (1,577) 16 ​ ​ Accrued income taxes payable/receivable ​ 165 ​ 192 ​ 18 ​ 7 ​ ​ ​ ​ ​ 183 ​ 199 ​ ​ Retirement benefits ​ (127) ​ (49) ​ (2) ​ 1 ​ ​ ​ ​ ​ (129) ​ (48) ​ ​ Other ​ (46) ​ 17 ​ 61 ​ 163 ​ (22) ​ 6 ​ (7) ​ 186 11, 12, 15 ​ ​ Net cash provided by (used for) operating activities ​ (519) ​ (559) ​ 575 ​ 605 ​ (964) ​ (1,292) ​ (908) ​ (1,246) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collections of receivables (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ 8,007 ​ 7,495 ​ (255) ​ (297) ​ 7,752 ​ 7,198 14 ​ ​ Proceeds from sales of equipment on operating leases ​ ​ ​ ​ ​ ​ ​ 506 ​ 497 ​ ​ ​ ​ ​ 506 ​ 497 ​ ​ Cost of receivables acquired (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ (6,513) ​ (6,375) ​ 66 ​ 53 ​ (6,447) ​ (6,322) 14 ​ ​ Purchases of property and equipment ​ (362) ​ (315) ​ ​ ​ ​ ​ ​ ​ ​ ​ (362) ​ (315) ​ ​ Cost of equipment on operating leases acquired ​ ​ ​ ​ ​ ​ ​ (503) ​ (531) ​ 49 ​ 34 ​ (454) ​ (497) 15 ​ ​ Decrease in investment in Financial Services ​ ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ (10) ​ ​ ​ ​ ​ ​ 17 ​ ​ Increase in trade and wholesale receivables ​ ​ ​ ​ ​ ​ ​ (871) ​ (1,499) ​ 871 ​ 1,499 ​ ​ ​ ​ 14 ​ ​ Collateral on derivatives – net ​ ​ ​ ​ ​ ​ ​ ​ 310 ​ ​ 345 ​ ​ ​ ​ ​ ​ ​ ​ 310 ​ ​ 345 ​ ​ Other ​ 10 ​ (9) ​ (98) ​ (137) ​ ​ ​ ​ ​ (88) ​ (146) ​ ​ Net cash provided by (used for) investing activities ​ (342) ​ (324) ​ 838 ​ (205) ​ 721 ​ 1,289 ​ 1,217 ​ 760 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net proceeds (payments) in short-term borrowings (original maturities three months or less) ​ 78 ​ (136) ​ (3,029) ​ 833 ​ ​ ​ ​ ​ (2,951) ​ 697 ​ ​ Change in intercompany receivables/payables ​ 288 ​ 1,469 ​ (288) ​ (1,469) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from borrowings issued (original maturities greater than three months) ​ 11 ​ 1 ​ 5,276 ​ 2,504 ​ ​ ​ ​ ​ 5,287 ​ 2,505 ​ ​ Payments of borrowings (original maturities greater than three months) ​ (40) ​ ​ ​ (3,197) ​ (1,925) ​ ​ ​ ​ ​ (3,237) ​ (1,925) ​ ​ Repurchases of common stock ​ (1,328) ​ (1,257) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1,328) ​ ​ (1,257) ​ ​ Capital investment from Equipment Operations ​ ​ ​ ​ ​ ​ (10) ​ ​ ​ ​ ​ 10 ​ ​ ​ ​ ​ ​ ​ ​ ​ 17 ​ ​ Dividends paid ​ (386) ​ (341) ​ (233) ​ ​ (3) ​ 233 ​ ​ 3 ​ (386) ​ ​ (341) 13 ​ ​ Other ​ (22) ​ (6) ​ (8) ​ (12) ​ ​ ​ ​ ​ (30) ​ (18) ​ ​ Net cash used for financing activities ​ (1,399) ​ (270) ​ (1,489) ​ (72) ​ 243 ​ 3 ​ (2,645) ​ (339) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash ​ 11 ​ 48 ​ 5 ​ 14 ​ ​ ​ ​ ​ 16 ​ 62 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash ​ (2,249) ​ (1,105) ​ (71) ​ 342 ​ ​ ​ ​ ​ (2,320) ​ (763) ​ ​ Cash, Cash Equivalents, and Restricted Cash at Beginning of Period ​ 5,755 ​ 3,781 ​ 1,865 ​ 1,160 ​ ​ ​ ​ ​ 7,620 ​ 4,941 ​ ​ Cash, Cash Equivalents, and Restricted Cash at End of Period ​ $ 3,506 ​ $ 2,676 ​ $ 1,794 ​ $ 1,502 ​ ​ ​ ​ ​ ​ ​ $ 5,300 ​ $ 4,178 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Components of Cash, Cash Equivalents, and Restricted Cash ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 3,467 ​ $ 2,665 ​ $ 1,670 ​ $ 1,311 ​ ​ ​ ​ ​ ​ ​ $ 5,137 ​ $ 3,976 ​ ​ Restricted cash (Other assets) ​ ​ 39 ​ ​ 11 ​ ​ 124 ​ ​ 191 ​ ​ ​ ​ ​ ​ ​ ​ 163 ​ ​ 202 ​ ​ Total Cash, Cash Equivalents, and Restricted Cash ​ $ 3,506 ​ $ 2,676 ​ $ 1,794 ​ $ 1,502 ​ ​ ​ ​ ​ ​ ​ $ 5,300 ​ $ 4,178 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases. 12 Reclassification of share-based compensation expense. 13 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations’ operating activities. 14 Primarily reclassification of receivables related to the sale of equipment. 15 Reclassification of direct lease agreements with retail customers. 16 Reclassification of sales incentive accruals on receivables sold to financial services. 17 Elimination of change in investment from equipment operations to financial services. ​ 36 ​ Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK See our most recently filed Annual Report on Form 10-K (Part II, Item 7A). There have been no material changes in this information. ​