What changed in this filing

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Item 1. Financial Statements

2024-05-30 compared with 2024-02-29 · 198 added, 93 removed, 642 unchanged (31% of the section changed)

2 unchanged sentences

STATEMENTS OF CONSOLIDATED INCOME

For the Three Months Ended January 28, 2024 and January 29, 2023

For the Three and Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars and shares except per share amounts) Unaudited

Three Months Ended

Six Months Ended

Net Sales and Revenues

19 unchanged sentences

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

For the Three Months Ended January 28, 2024 and January 29, 2023

For the Three and Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

Three Months Ended

Six Months Ended

Other Comprehensive Income (Loss), Net of Income Taxes

1 unchanged sentence

Cumulative translation adjustment

Unrealized loss on derivatives

Unrealized gain on debt securities

Other Comprehensive Income, Net of Income Taxes

Unrealized gain (loss) on derivatives

Unrealized gain (loss) on debt securities

Other Comprehensive Income (Loss), Net of Income Taxes

Comprehensive Income of Consolidated Group

27 unchanged sentences

Stockholders’ Equity

Common stock, $ 1 par value (issued shares at January 28, 2024 – 536,431,204 )

Common stock, $ 1 par value (issued shares at April 28, 2024 – 536,431,204 )

Common stock in treasury

8 unchanged sentences

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Three Months Ended January 28, 2024 and January 29, 2023

For the Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

Cash Flows from Operating Activities

Adjustments to reconcile net income to net cash used for operating activities:

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Provision (credit) for credit losses

Provision for depreciation and amortization

Other non-cash adjustments (Note 21)

Share-based compensation expense

Provision (credit) for deferred income taxes

Credit for deferred income taxes

Changes in assets and liabilities:

3 unchanged sentences

Retirement benefits

Net cash used for operating activities

Net cash provided by (used for) operating activities

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

Proceeds from maturities and sales of marketable securities

Proceeds from sales of equipment on operating leases

Cost of receivables acquired (excluding receivables related to sales)

Purchases of marketable securities

Purchases of property and equipment

1 unchanged sentence

Collateral on derivatives – net

Net cash provided by investing activities

Net cash used for investing activities

Cash Flows from Financing Activities

Net proceeds (payments) in short-term borrowings (original maturities three months or less)

Net proceeds in short-term borrowings (original maturities three months or less)

Proceeds from borrowings issued (original maturities greater than three months)

2 unchanged sentences

Dividends paid

Net cash used for financing activities

Net cash provided by (used for) financing activities

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

7 unchanged sentences

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

For the Three Months Ended January 28, 2024 and January 29, 2023

For the Three and Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

6 unchanged sentences

Income (Loss)

Three Months Ended April 30, 2023

Balance January 29, 2023

Net income (loss)

Other comprehensive income (loss)

Repurchases of common stock

Treasury shares reissued

Dividends declared

Share based awards and other

Balance April 30, 2023

Six Months Ended April 30, 2023

Balance October 30, 2022

5 unchanged sentences

Share based awards and other

Balance April 30, 2023

Three Months Ended April 28, 2024

Balance January 28, 2024

Net income (loss)

Other comprehensive loss

Repurchases of common stock

Treasury shares reissued

Dividends declared

Share based awards and other

Balance April 28, 2024

Six Months Ended April 28, 2024

Balance October 29, 2023

Net income (loss)

Other comprehensive income

Other comprehensive income (loss)

Repurchases of common stock

2 unchanged sentences

Share based awards and other

Balance January 28, 2024

Balance April 28, 2024

See Condensed Notes to Interim Consolidated Financial Statements.

7 unchanged sentences

We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period.

The first quarter ends for fiscal year 2024 and 2023 were January 28, 2024 and January 29, 2023, respectively.

Both periods contained 13 weeks.

The second quarter ends for fiscal year 2024 and 2023 were April 28, 2024 and April 30, 2023, 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 our fiscal years generally ending in October and the associated periods in those fiscal years.

All amounts are presented in millions of dollars, unless otherwise specified.

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

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

Quarterly Financial Statements

T he interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S.

The interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (SEC).

8 unchanged sentences

Actual results could differ from those estimates.

New Accounting Standards

New Accounting Pronouncements

We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance.

Accounting Pronouncements Adopted

We adopted the following standards in 2024, none of which had a material effect on our consolidated financial statements.

Accounting Standards Adopted

2022-04 — Liabilities – Supplier Finance Programs (Subtopic 405-50):

6 unchanged sentences

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

Accounting Standards to be Adopted

Accounting Pronouncements to be Adopted

In March 2024, the SEC adopted rules to enhance and standardize climate-related disclosures in annual reports and registration statements.

The new rules will be effective for our annual reporting periods beginning in fiscal year 2026.

In April 2024, the SEC stayed implementation of the climate-related disclosure requirements pending completion of legal challenges.

We are monitoring these developments while assessing the effect of these rules on our related disclosures.

In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740):

14 unchanged sentences

Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow:

Three Months Ended January 28, 2024

Three Months Ended April 28, 2024

Production & Precision Ag

Small Ag & Turf

Construction & Forestry

Financial Services

Primary geographic markets:

11 unchanged sentences

At a point in time

Three Months Ended January 29, 2023

Six Months Ended April 28, 2024

Production & Precision Ag

Small Ag & Turf

Construction & Forestry

Financial Services

Primary geographic markets:

11 unchanged sentences

At a point in time

Three Months Ended April 30, 2023

Production & Precision Ag

Small Ag & Turf

Primary geographic markets:

United States

Western Europe

Central Europe and CIS

Latin America

Asia, Africa, Oceania, and Middle East

Major product lines:

Production agriculture

Small agriculture

Compact construction

Financial products

Revenue recognized:

At a point in time

Six Months Ended April 30, 2023

Production & Precision Ag

Small Ag & Turf

Primary geographic markets:

United States

Western Europe

Central Europe and CIS

Latin America

Asia, Africa, Oceania, and Middle East

Major product lines:

Production agriculture

Small agriculture

Compact construction

Financial products

Revenue recognized:

At a point in time

We invoice in advance of recognizing the sale of certain products and the revenue for certain services.

These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance, telematic services, and other information enabled solutions.

These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received, but not recognized in revenue, was $ 1,747 , $ 1,697 , and $ 1,502 at January 28, 2024, October 29, 2023, and January 29, 2023, respectively.

These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received, but not recognized in revenue, was $ 1,911 , $ 1,697 , and $ 1,622 at April 28, 2024, October 29, 2023, and April 30, 2023, respectively.

The contract liability is reduced as the revenue is recognized.

During the three months ended January 28, 2024 and January 29, 2023, $ 230 and $ 215 , 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 $ 1,531 at January 28, 2024.

During the three months ended April 28, 2024 and April 30, 2023, $ 128 and $ 129 , 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 28, 2024 and April 30, 2023, $ 358 and $ 343 , 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 $ 1,633 at April 28, 2024.

The estimated revenue to be recognized by fiscal year follows:

7 unchanged sentences

Unrealized gain (loss) on derivatives

Unrealized loss on debt securities

Unrealized gain (loss) on debt securities

Total accumulated other comprehensive income (loss)

The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss).

Three Months Ended January 28, 2024

Three Months Ended April 28, 2024

Cumulative translation adjustment

6 unchanged sentences

Unrealized holding gain (loss)

Net unrealized gain (loss) on debt securities

Retirement benefits adjustment:

Net actuarial gain (loss)

Reclassification to Other operating expenses through amortization of:

Actuarial (gain) loss

Prior service (credit) cost

Net unrealized gain (loss) on retirement benefits adjustment

Total other comprehensive income (loss)

Six Months Ended April 28, 2024

Cumulative translation adjustment

Unrealized gain (loss) on derivatives:

Unrealized hedging gain (loss)

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

Net unrealized gain (loss) on derivatives

Unrealized gain (loss) on debt securities:

Unrealized holding gain (loss)

Reclassification of realized (gain) loss – Other income

7 unchanged sentences

Total other comprehensive income (loss)

Three Months Ended January 29, 2023

Three Months Ended April 30, 2023

Cumulative translation adjustment

14 unchanged sentences

Total other comprehensive income (loss)

Six Months Ended April 30, 2023

Cumulative translation adjustment

Unrealized gain (loss) on derivatives:

Unrealized hedging gain (loss)

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

Net unrealized gain (loss) on derivatives

Unrealized gain (loss) on debt securities:

Unrealized holding gain (loss)

Net unrealized gain (loss) on debt securities

Retirement benefits adjustment:

Net actuarial gain (loss)

Reclassification to Other operating expenses through amortization of:

Actuarial (gain) loss

Prior service (credit) cost

Net unrealized gain (loss) on retirement benefits adjustment

Total other comprehensive income (loss)

(5) Earnings Per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Net income attributable to Deere & Company

12 unchanged sentences

Three Months Ended

Six Months Ended

Interest cost

2 unchanged sentences

Amortization of prior service cost

Net (benefit) cost

Interest cost

3 unchanged sentences

The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.”

During the first three months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans:

During the first six months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans.

Expected contributions remainder of the year

In December 2023, we contributed $ 60 to a U.S.

non-union Voluntary Employees’ Beneficiary Association trust, which is included in the OPEB contributed amount.

The contribution will be used to fund salary postretirement health care benefits during the remainder of 2024.

(7) Segment DATA

1 unchanged sentence

Three Months Ended

Six Months Ended

Net sales and revenues:

35 unchanged sentences

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

January 28, 2024

April 28, 2024

Revolving Charge Accounts

25 unchanged sentences

Total retail customer receivables

January 29, 2023

April 30, 2023

Revolving Charge Accounts

12 unchanged sentences

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

January 28, 2024

April 28, 2024

Wholesale receivables:

15 unchanged sentences

Total wholesale receivables

January 29, 2023

April 30, 2023

Wholesale receivables:

7 unchanged sentences

An analysis of the allowance for credit losses and investment in financing receivables follows:

Three Months Ended January 28, 2024

Three Months Ended April 28, 2024

Beginning of period balance

Provision (credit)

Translation adjustments

End of period balance

Six Months Ended April 28, 2024

Beginning of period balance

Translation adjustments

End of period balance

Financing receivables:

End of period balance

Three Months Ended January 29, 2023

Three Months Ended April 30, 2023

Beginning of period balance

Provision (credit)

End of period balance

Six Months Ended April 30, 2023

Beginning of period balance

Provision transferred to held for sale

Provision (credit)

Provision (credit) subtotal

Translation adjustments

2 unchanged sentences

End of period balance

The allowance for credit losses remained generally flat in the first quarter of 2024.

The allowance for credit losses increased in the second quarter and first six months of 2024, primarily due to higher expected losses on the agricultural receivable portfolio as a result of elevated delinquencies and a decline in market conditions.

In the first quarter of 2023, we determined that the financial services business in Russia met the held for sale criteria.

1 unchanged sentence

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 primarily due to higher portfolio balances and higher expected losses on turf and construction financing receivables.

Write-offs by year of origination were as follows:

Three Months Ended January 28, 2024

Six Months Ended April 28, 2024

Revolving Charge Accounts

10 unchanged sentences

Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan.

The ending amortized cost of modified loans with borrowers experiencing financial difficulty during the three months ended January 28, 2024 were $ 17 , of which $ 16 were current and $ 1 were non-performing.

These modifications represented 0.03 percent of our financing receivable portfolio at January 28, 2024.

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months ended January 28, 2024.

In addition, at January 28, 2024, we had no commitments to provide additional financing to these customers.

The ending amortized cost of modified loans with borrowers experiencing financial difficulty during the second quarter and the six months ended April 28, 2024 were $ 36 and $ 53 , respectively, of which $ 48 were current, $ 3 were 30-59 days past due, and $ 2 were non-performing.

These modifications represented 0.07 and 0.10 percent of our financing receivable portfolio for the same periods, respectively.

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the second quarter and the first six months of 2024.

In addition, at April 28, 2024, commitments to provide additional financing to these customers were not significant.

(9) Securitization of Financing Receivables

29 unchanged sentences

There were no accumulated goodwill impairment losses.

Production & Precision Ag

Construction & Forestry

Goodwill at October 30, 2022

Translation adjustments

Goodwill at January 29, 2023

Goodwill at April 30, 2023

Goodwill at October 29, 2023

Translation adjustments

Goodwill at January 28, 2024

Goodwill at April 28, 2024

The components of other intangible assets were as follows:

7 unchanged sentences

Other intangible assets – net

The amortization of other intangible assets in the first quarter of 2024 and 2023 was $ 42 and $ 39 , respectively.

The amortization of other intangible assets in the second quarter and the first six months of 2024 was $ 41 and $ 83 , and for the second quarter and the first six months of 2023 was $ 45 and $ 84 , respectively.

The estimated amortization expense for the next five years is as follows:

25 unchanged sentences

Accrued interest

Parts return liability

Accounts payable and accrued expenses

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $ 2,410 at January 28, 2024, $ 2,228 at October 29, 2023, and $ 1,540 at January 29, 2023.

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $ 2,650 at April 28, 2024, $ 2,228 at October 29, 2023, and $ 1,979 at April 30, 2023.

Other eliminations were made for accrued taxes and other accrued expenses.

15 unchanged sentences

1.65 % notes due 2039 (€ 650 principal)

Serial issuances

4 unchanged sentences

Medium-term notes due through 2034 are primarily offered by prospectus and issued at fixed and variable rates.

The principal balances of the medium-term notes were $ 31,808 , $ 30,902 , and $ 26,367 at January 28, 2024, October 29, 2023, and January 29, 2023, respectively.

The principal balances of the medium-term notes were $ 34,002 , $ 30,902 , and $ 27,428 , at April 28, 2024, October 29, 2023, and April 30, 2023, respectively.

All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other.

4 unchanged sentences

Three Months Ended

Six Months Ended

Sales-type and direct finance lease revenues

8 unchanged sentences

Three Months Ended

Six Months Ended

Beginning of period balance

5 unchanged sentences

In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment.

At January 28, 2024, the notional value of these guarantees was $ 166 .

At April 28, 2024, the notional value of these guarantees was $ 146 .

We may repossess the equipment collateralizing the receivables.

At January 28, 2024, the accrued losses under these agreements were not material.

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $ 115 at January 28, 2024.

The accrued liability for these contingencies was not material at January 28, 2024.

At January 28, 2024, we had commitments of $ 597 for the construction and acquisition of property and equipment.

Also, at January 28, 2024, we had restricted assets of $ 214 , classified as “Other assets.”

At April 28, 2024, the accrued losses under these agreements were not material.

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $ 140 at April 28, 2024.

The accrued liability for these contingencies was $ 20 at April 28, 2024.

At April 28, 2024, we had commitments of approximately $ 560 for the construction and acquisition of property and equipment.

Also, at April 28, 2024, we had restricted assets of $ 225 , classified as “Other assets.”

We are subject to various unresolved legal actions.

The accrued losses on these matters are not material.

The accrued losses on these matters were not material at April 28, 2024.

We believe the reasonably possible range of losses for these unresolved legal actions would not have a material effect on our financial statements.

3 unchanged sentences

Long-term borrowings exclude finance lease liabilities.

January 28, 2024

April 28, 2024

October 29, 2023

January 29, 2023

April 30, 2023

Financing receivables – net

26 unchanged sentences

government-sponsored enterprises.

The contractual maturities of debt securities at January 28, 2024 follow:

The contractual maturities of debt securities at April 28, 2024 follow:

Due in one year or less

16 unchanged sentences

Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”

January 28, 2024

April 28, 2024

October 29, 2023

January 29, 2023

April 30, 2023

Cash flow hedges:

18 unchanged sentences

Hedging Amount

January 28, 2024

April 28, 2024

Short-term borrowings

3 unchanged sentences

Long-term borrowings

January 29, 2023

April 30, 2023

Short-term borrowings

2 unchanged sentences

Three Months Ended

Six Months Ended

Fair Value Hedges

13 unchanged sentences

Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings.

The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at January 28, 2024, October 29, 2023, and January 29, 2023 was $ 691 , $ 1,076 , and $ 781 , respectively.

In accordance with the limits established in these agreements, we posted $ 368 , $ 659 , and $ 349 of cash collateral at January 28, 2024, October 29, 2023, and January 29, 2023, respectively.

In addition, we paid $ 8 of collateral that was outstanding at January 28, 2024, October 29, 2023, and January 29, 2023 to participate in an international futures market to hedge currency exposure, not included in the table below.

The aggregate fair value of all derivatives with credit-risk-related contingent

features that were in a net liability position at April 28, 2024, October 29, 2023, and April 30, 2023, was $ 967 , $ 1,076 , and $ 716 , respectively.

In accordance with the limits established in these agreements, we posted $ 562 , $ 659 , and $ 308 of cash collateral at April 28, 2024, October 29, 2023, and April 30, 2023, respectively.

In addition, we paid $ 8 of collateral that was outstanding at April 28, 2024, October 29, 2023, and April 30, 2023 to participate in an international futures market to hedge currency exposure, not included in the table below.

Derivatives are recorded without offsetting for netting arrangements or collateral.

The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid follows:

Gross Amounts

January 28, 2024

The impact on the derivative assets and liabilities related to netting arrangements and collateral follows:

Gross Amounts

April 28, 2024

October 29, 2023

Gross Amounts

January 29, 2023

April 30, 2023

(19) Share-Based Awards

At January 28, 2024, we were authorized to grant an additional 15.0 million shares related to stock options and restricted stock units.

We are authorized to grant shares for stock options and restricted stock units.

The outstanding shares authorized were 15.0 million at April 28, 2024.

In December 2023, we granted stock options to employees for the purchase of 216 thousand shares of common stock at an exercise price of $ 377.01 per share and a binomial lattice model fair value of $ 98.04 per share at the grant date.

At January 28, 2024, options for 1.9 million shares were outstanding with a weighted-average exercise price of $ 214.88 per share.

During the three months ended January 28, 2024, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date, in dollars follow:

At April 28, 2024, options for 1.8 million shares were outstanding with a weighted-average exercise price of $ 220.99 per share.

During the six months ended April 28, 2024, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date, in dollars follow:

Service-based

5 unchanged sentences

The fair value of the market/service based RSUs was determined using a Monte Carlo model .

(20) S pecial Item

In January 2023, we reached an agreement to sell our financial services business in Russia (registered in Russia as a leasing company).

We reversed the allowance for credit losses and recorded a valuation allowance on the assets held for sale in “Selling, administrative and general expenses.” In March 2023, we sold our financial services business in Russia to Insight Investment Group.

(20) Disposition

In March 2023, we sold our financial services business in Russia to Insight Investment Group.

The total proceeds, net of restricted cash sold, were $ 36 .

2 unchanged sentences

We did not incur additional gains or losses upon disposition.

(21) Special Item

In the second quarter of 2023, we 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 pretax ($ 135 after-tax), was recorded in the second quarter of 2023 in “Selling, administrative and general expenses” by financial services.

Prior period results were not restated, as the adjustment was considered immaterial to our financial statements.

(22) Subsequent Events

In February 2024, we entered into a retail note securitization transaction, resulting in $ 529 of secured borrowings.

On February 28, 2024, a quarterly dividend of $ 1.47 per share was declared at the Board of Directors meeting, payable on May 8, 2024, to stockholders of record on March 29, 2024.

In May 2024, we entered into a retail note securitization transaction, resulting in $ 319 of secured borrowings.

On May 29, 2024, a quarterly dividend of $ 1.47 per share was declared at the Board of Directors meeting, payable on August 8, 2024, to stockholders of record on June 28, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements