What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-29 compared with 2024-05-30 · 115 added, 103 removed, 362 unchanged (38% of the section changed)

32 unchanged sentences

Company Outlook for 2024

Production volumes are expected to continue to decline during the remainder of 2024 due to demand shifts amid challenges in the global agricultural and turf sectors coupled with proactive production and inventory management while the construction industry remains relatively stable.

Production volumes are expected to continue to decline during the remainder of 2024 due to reduced demand amid challenges in the global agricultural and turf sectors and construction industry coupled with inventory management through planned underproduction to retail demand.

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.

● Agricultural fundamentals across all our major markets are expected to moderate in 2024 due to rising global stocks, lower commodity prices, elevated interest rates, and weather volatility.

and Canada, this is partially offset by resilient farm balance sheets.

equipment fleet age is elevated for both tractors and combines.

● We expect large and small agricultural equipment sales to be down from 2023 levels across all our major markets.

● Agricultural fundamentals are expected to continue to moderate in 2024 due to rising global grain stocks from excellent growing conditions, lower commodity prices, elevated interest rates, and geopolitical uncertainty.

● Demand in the U.S.

and Canada continues to be affected by declining farm income margins partially offset by stable farm balance sheets.

equipment fleet age is elevated for tractors and in line with historic averages for combines.

However, increases in used inventory levels are impacting purchasing decisions.

● In Europe, the dairy and livestock sector is expected to improve due to stronger pricing amid lower feed costs while spring weather conditions have caused uncertainty about winter seeded crop yields.

In addition, persistent, elevated input costs have decreased demand in Europe.

● Demand in Brazil is expected to be down due to strong global yields driving down commodity prices, adverse weather conditions, and high interest rates.

● Sales of compact utility tractors in the U.S.

are forecasted to be down due to higher interest rates, partially offset by small and mid-tractor tailwinds from improving dairy and livestock fundamentals.

● In Europe, volatile weather conditions continue to drive uncertainty about crop yields and along with elevated input costs are impacting demand in the region, while the dairy and livestock sector remains steady due to stronger pricing and lower feed costs.

● Demand in Brazil is expected to be down due to strong global yields driving down commodity prices and persistently high interest rates.

● Industry sales in Asia are forecasted to be down moderately due to commodity price changes, inventory reductions, and weather impacts.

● Due to macro-economic trends in U.S.

consumer markets including lower levels of home sales, persistently higher interest rates, and inventory reductions, sales of compact utility tractors and riding lawn equipment continue to be lower.

Construction and Forestry Outlook for 2024

● Construction equipment industry sales are forecasted to be flat to 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 declines in commercial real estate construction and softening rental demand.

● Roadbuilding demand remains strong in the U.S., largely offset by softening demand in Europe.

● Construction equipment industry sales are forecasted to be down from 2023 levels.

● Benefits from strong U.S.

infrastructure spending and increasing manufacturing investment levels are expected to partially offset declines in housing starts, decreases in rental purchases, low levels of commercial real estate construction, and the effect of inventory levels having recovered from historical lows.

● Roadbuilding demand remains strong in the U.S., largely offset by continuing softness in Europe.

Financial Services Outlook for 2024

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+ Higher average portfolio

+ Nonrecurring prior period special item

+ Prior period special item

(-) Provision for credit losses

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lower net sales, higher sales discounts, higher receivable write-offs, and 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.

In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities.

The programs’ total pretax expenses are estimated to be approximately $150, of which $124 was recorded in the third quarter of 2024.

Annual pretax savings from these programs are estimated to be approximately $230, with $100 estimated to be realized in 2024 (See Note 21).

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 affect product sales in 2024.

Increased rates impacted us in several ways, primarily affecting the demand for our products and financing spreads for the financial services operations.

The markets for our agriculture, turf, and construction products were negatively impacted by elevated interest rates and their effect on borrowing costs for our customers.

Most retail customer receivables are fixed rate.

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As a result, our financial services operations experienced $66 (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.

We expect to continue experiencing spread compression in 2024.

Higher interest rates are driven by factors outside of our control, and as a result we cannot reasonably foresee when this condition will subside.

Other Items of Concern and Uncertainties – Other items that could impact our results are:

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 conflict in the Middle East,

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● our ability to strengthen our digital capabilities, automation, autonomy, and alternative power technologies,

● workforce reductions impact on employee retention, morale, and institutional knowledge,

● changes in demand and pricing for new and used equipment,

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Three Months Ended

Six Months Ended

Nine Months Ended

Deere & Company

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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:

Net income in each of the periods presented were impacted by special items.

See Note 21 for additional details.

An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:

Three Months Ended

Six Months Ended

Nine Months Ended

Deere & Company

Cost of sales to net sales

(+) Price realization

(+) Inbound freight

(–) Overhead spending

Higher for the first six months due to investment income earned on international mutual funds securities.

Increased for both periods mostly due to higher overhead costs from reduced volumes resulting in production inefficiencies, partially offset by sales price realization, lower material cost, and reduced inbound freight costs.

Higher for the first nine months primarily due to investment income earned on international mutual funds securities.

Research and development expenses

Higher due to continued focus on developing and incorporating technology solutions.

Higher for both periods due to continued focus on developing and incorporating technology solutions.

Selling, administrative and general expenses

Lower in the second quarter as the prior period was impacted by the cumulative correction of the accounting treatment for financing incentives offered to John Deere dealers of $173 pretax ($135 after-tax).

Excluding the impact of this item, selling, administrative and general expenses have increased for both periods mostly due to a higher provision for credit losses and higher employee pay driven by inflationary conditions and profit sharing incentives.

Increased mostly due to a higher provision for credit losses, higher employee pay driven by inflationary conditions and profit sharing incentives, and employee-separation programs’ expenses.

Interest expense

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Other operating expenses

Lower in the second quarter due to higher pension benefits (see Note 6) and lower foreign exchange losses.

Lower in both periods due to higher pension benefits (see Note 6) and lower foreign exchange losses.

Provision for income taxes

Decreased for both periods as a result of lower pretax income.

Decreased for both periods as a result of lower pretax income, partially offset by the prior periods’ favorable income tax ruling in Brazil.

Business Segment Results – 2024 Compared with 2023

Three Months Ended

Six Months Ended

Nine Months Ended

Production and Precision Agriculture

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Currency translation impact on Net sales

Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in Brazil, the U.S., and Europe), driven by softened demand.

This was partially offset by price realization in the U.S.

Operating profit decreased primarily due to lower shipment volumes and higher production costs, partially offset by price realization.

Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in the U.S., Europe, Brazil, and Asia) driven mainly by lower commodity prices and higher interest rates, partially offset by price realization in the U.S.

Operating profit decreased primarily due to lower shipment volumes and employee-separation programs’ expenses, partially offset by price realization and lower warranty expenses.

Production & Precision Agriculture Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

Sales for the first six months decreased as a result of lower shipment volumes (primarily in Brazil, the U.S., and Europe), partially offset by price realization in the U.S.

Operating profit for the first six months decreased due to lower sales volume, higher selling, administrative, and general expenses and research and development expenses, partially offset by price realization.

Third Quarter 2024 Compared to Third Quarter 2023

Sales for the first nine months decreased as a result of lower shipment volumes (primarily in Brazil, the U.S., and Europe) partially offset by price realization in the U.S.

Operating profit for the first nine months decreased due to lower sales volume, higher selling, administrative, and general expenses and research and development expenses, partially offset by price realization and lower warranty expenses.

Production & Precision Agriculture Operating Profit

First Six Months 2024 Compared to First Six Months 2023

First Nine Months 2024 Compared to First Nine Months 2023

Three Months Ended

Six Months Ended

Nine Months Ended

Small Agriculture and Turf

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Currency translation impact on Net sales

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes (primarily in the U.S., Europe, and Mexico), partially offset by price realization in the U.S.

Operating profit decreased due to lower shipment volumes, partially offset by price realization.

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes (primarily in Europe, the U.S., and Mexico) driven mainly by uncertainty in commodity prices and higher interest rates, partially offset by price realization in the U.S.

Operating profit decreased due to lower shipment volumes and higher warranty expenses, partially offset by price realization.

Small Agriculture & Turf Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

Sales for the first six months decreased as a result of lower shipment volumes (primarily in the U.S., Europe, and Mexico), partially offset by price realization.

Operating profit for the first six months decreased primarily as a result of lower sales volumes, higher selling, administrative, and general expenses and research and development expenses, and higher warranty expenses.

These items were partially offset by price realization, favorable mix, and lower production costs.

Third Quarter 2024 Compared to Third Quarter 2023

Sales for the first nine months decreased as a result of lower shipment volumes (primarily in the U.S., Europe, and Mexico), partially offset by price realization.

Operating profit for the first nine months decreased primarily as a result of lower sales volumes and higher warranty expenses.

These items were partially offset by price realization and lower production costs.

Small Agriculture & Turf Operating Profit

First Six Months 2024 Compared to First Six Months 2023

First Nine Months 2024 Compared to First Nine Months 2023

Three Months Ended

Six Months Ended

Nine Months Ended

Construction and Forestry

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Currency translation impact on Net sales

Construction and forestry sales decreased for the quarter due to lower worldwide shipment volumes.

Operating profit decreased due to lower sales volumes and increased selling, administrative, and general expenses and research and development expenses.

Construction and forestry sales decreased for the quarter due to lower U.S.

shipment volumes, driven by moderating demand and efforts to reduce field inventory.

Operating profit decreased due to lower sales volumes, unfavorable mix, and unfavorable price realization.

Construction & Forestry Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

The segment’s six-month sales decreased due to lower shipment volumes in all major regions outside the U.S., partially offset by price realization and the favorable impact of currency translation.

The first six-month’s operating profit decreased due to lower sales volumes, higher selling, administrative, and general expenses and research and development expenses, increased production costs, and the unfavorable impact of currency translation.

Third Quarter 2024 Compared to Third Quarter 2023

Sales for the first nine months decreased due to lower worldwide shipment volumes, partially offset by price realization.

Operating profit for the first nine months decreased due to lower sales volumes, increased production costs driven by low volume inefficiencies, and higher selling, administrative, and general expenses and research and development expenses.

These factors were partially offset by price realization.

Construction & Forestry Operating Profit

First Six Months 2024 Compared to First Six Months 2023

First Nine Months 2024 Compared to First Nine Months 2023

Three Months Ended

Six Months Ended

Nine Months Ended

Financial Services

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Interest expense

The average balance of receivables and leases financed was 16 percent higher in the second quarter of 2024 and 18 percent higher in the first six months of 2024 compared with the same periods last year.

The average balance of receivables and leases financed was 12 percent higher in the third quarter of 2024 and 16 percent higher in the first nine months of 2024 compared with the same periods last year.

Revenue also increased due to higher average financing rates in both periods.

Interest expense increased compared to both prior periods as a result of higher average borrowings and higher average borrowing rates.

Financial services net income in both periods increased due to income earned on higher average portfolio balances, partially offset by a higher provision for credit losses and less favorable financing spreads.

The results of both periods were also affected by a correction of the accounting treatment for financing incentives offered to John Deere dealers.

Interest expense increased compared to both prior periods as a result of higher average borrowing rates and higher average borrowings.

Financial services net income decreased in the third quarter of 2024 due to a higher provision for credit losses and less favorable financing spreads, partially offset by income earned on higher average portfolio balances and favorable discrete tax items.

Excluding the impact of an accounting correction in the prior year, financial services net income decreased in the first nine months of 2024 due to a higher provision for credit losses and less favorable financing spreads, partially offset by income earned on higher average portfolio balances.

Net income for the first nine months of 2023 was affected by a correction of the accounting treatment for financing incentives offered to John Deere dealers.

The cumulative effect of this correction, $173 pretax ($135 after-tax), was recorded in the second quarter of 2023.

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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 are forecasting lower operating cash flows from equipment operations in 2024 compared with 2023 driven by a decrease in net income adjusted for non-cash provisions and a reduction in accounts payable and accrued expenses.

We operate in multiple industries, which have unique funding requirements.

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The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios.

Banco John Deere S.A.

assets and liabilities were reclassified to held for sale in the third quarter of 2024 (see Note 21).

Key metrics are provided in the following table:

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Ratio of interest-bearing debt to stockholder’s equity

In the first half of 2024, we invested $177 in U.S.

In 2024, we invested $177 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 in 2024 compared to both prior periods relates to a decrease in commercial paper outstanding.

We are forecasting lower operating cash flows in 2024 compared to 2023 driven by a decrease in net income adjusted for non-cash provisions and a reduction in accrued expenses.

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.

Six Months Ended

April 28, 2024

April 30, 2023

Net cash provided by (used for) operating activities

Nine Months Ended

July 28, 2024

July 30, 2023

Net cash provided by operating activities

Net cash used for investing activities

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Net increase (decrease) in cash, cash equivalents, and restricted cash

Cash inflows from consolidated operating activities in the first six months of 2024 were $944.

Cash inflows from consolidated operating activities in the first nine months of 2024 were $4,139.

This resulted mainly from net income adjusted for non-cash provisions, partially offset by a working capital change.

Included in the working capital change was a cash outflow of $1,300 from accounts payable and accrued expenses due to a higher profit sharing payout in the first quarter of 2024 based on strong fiscal year 2023 results, lower accrued expenses related to dealer sales discounts, and less trade payables consistent with our forecasted decrease in production.

Cash outflows from investing activities were $1,670 in the first six months of this year.

The primary drivers were purchases of property and equipment and growth in the retail customer receivable portfolio and equipment on operating leases.

Cash outflows from financing activities were $1,162 in the first six months of 2024, as cash returned to shareholders was partially offset by higher external borrowings.

Cash returned to shareholders was $3,218 in the first six months of 2024.

Cash, cash equivalents, and restricted cash decreased $1,893 during the first six months of 2024.

Included in the working capital change was a cash outflow of $1,015 from accounts payable and accrued expenses due to less trade payables consistent with our forecasted decrease in production and lower accrued expenses related to dealer sales discounts and employee benefits.

Cash outflows from investing activities were $3,671 in the first nine months of this year.

The primary drivers were growth in the retail customer receivable portfolio and equipment on operating leases and purchases of property and equipment.

Cash outflows from financing activities were $789 in the first nine months of 2024, as cash returned to shareholders was partially offset by higher external borrowings.

Cash returned to shareholders was $4,429 in the first nine months of 2024.

Cash, cash equivalents, and restricted cash decreased $327 during the first nine months of 2024.

Key Metrics and Balance Sheet Changes

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Trade accounts and notes receivable arise from sales of goods to customers.

Trade receivables increased $1,141 during the first six months of 2024, primarily due to a seasonal increase.

These receivables decreased $1,091, compared to a year ago, due to lower sales volumes.

The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 2 percent at April 28, 2024, 1 percent at October 29, 2023, and 1 percent at April 30, 2023.

Trade receivables decreased $270 during the first nine months of 2024 and decreased $1,828 compared to a year ago, primarily due to lower sales volumes.

The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 3 percent at July 28, 2024, 1 percent at October 29, 2023, and 1 percent at July 30, 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 increased $1,580 during the first six months of 2024 and increased $8,368 in the past 12 months due to higher dealer inventory levels and elevated sales of new and used retail inventory.

Total acquisition volumes of financing receivables and equipment on operating leases were 16 percent higher in the first six months of 2024, compared with the same period last year, as volumes of wholesale notes, retail notes, financing leases, and operating leases were higher, while revolving charge accounts were flat compared to April 30, 2023.

Inventories increased by $283 during the first six months of 2024, primarily due to a seasonal increase.

Inventories decreased by $1,270 compared to a year ago due to lower forecasted shipment volumes.

Financing receivables and equipment on operating leases increased $1,363 during the first nine months of 2024 and increased $4,276 in the past 12 months due to higher dealer inventory levels and an increase in the retail customer receivable portfolio, partially offset by the reclassification of Banco John Deere S.A.

receivables to “Assets held for sale” in the third quarter of 2024 (see Note 21).

Total acquisition volumes of financing receivables and equipment on operating leases were 8 percent higher in the first nine months of 2024, compared with the same period last year, as volumes of wholesale notes, operating leases, financing leases, and retail notes were higher, while revolving charge accounts were flat compared to July 30, 2023.

Inventories decreased by $464 during the first nine months of 2024 and decreased by $1,654 compared to a year ago.

The decreases were 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 six months of 2024 were $719 compared with $584 in the same period last year.

Property and equipment cash expenditures in the first nine months of 2024 were $1,043 compared with $887 in the same period last year.

Capital expenditures in 2024 are estimated to be approximately $1,850.

Accounts Payable and Accrued Expenses.

Accounts payable and accrued expenses decreased by $1,521 in the first six months of 2024, primarily due to a decrease in accrued expenses associated with dealer sales discounts and employee benefits, and decreased accounts payable associated with trade payables.

Accounts payable and accrued expenses decreased $107 compared to a year ago due to a decrease in accounts payable associated with trade payables, partially offset by an increase in accrued expenses associated with derivative liabilities, extended warranty liabilities, and accrued interest.

Total external borrowings increased by $2,226 in the first six months of 2024 and increased $7,538 compared to a year ago, generally corresponding with the level of the receivable and lease portfolios, as well as other working capital requirements.

Accounts payable and accrued expenses decreased by $1,733 in the first nine months of 2024, primarily due to decreased accounts payable associated with trade payables, and a decrease in accrued expenses associated with derivative liabilities, dealer sales discounts, and employee benefits.

Accounts payable and accrued expenses decreased $943 compared to a year ago due to a decrease in accounts payable associated with trade payables and a decrease in accrued expenses associated with derivative liabilities, partially offset by an increase in extended warranty liabilities.

Total external borrowings increased by $2,444 in the first nine months of 2024 and increased $3,992 compared to a year ago, generally corresponding with the level of the receivable and lease portfolios, as well as other working capital requirements.

The change in borrowings was also impacted by the reclassification of Banco John Deere S.A.

borrowings to “Liabilities held for sale” in the third quarter of 2024 (see Note 21).

John Deere Capital Corporation (Capital Corporation), a U.S.

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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 April 28, 2024, $1,434 of securitization borrowings were outstanding under the facility.

At July 28, 2024, $1,566 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 six months of 2024, the financial services operations issued $1,880 and retired $1,900 of retail note securitization borrowings, which are presented in “Net proceeds in short-term borrowings (original maturities three months or less).”

In the first nine months of 2024, the financial services operations issued $3,722 and retired $2,849 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).”

Lines of Credit.

We also have access to bank lines of credit with various banks throughout the world.

Worldwide lines of credit totaled $10,934 at April 28, 2024, $2,787 of which were unused.

We have access to bank lines of credit with various banks throughout the world.

Worldwide lines of credit totaled $10,930 at July 28, 2024, consisting primarily of:

● a 364-day credit facility agreement of $5,000 expiring in the second quarter of 2025,

● a credit facility agreement of $2,750 expiring in the second quarter of 2028, and

● a credit facility agreement of $2,750 expiring in the second quarter of 2029.

At July 28, 2024, $4,917 of these worldwide lines of credit 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 April 28, 2024 was a 364-day credit facility agreement of $5,000 expiring in the second quarter of 2025.

In addition, total credit lines included long-term credit facility agreements of $2,750 expiring in the second quarter of 2028 and $2,750 expiring in the second quarter of 2029.

These credit agreements require Capital Corporation and other parts of our business to maintain certain performance metrics and liquidity targets.

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● political, economic, and social instability of the geographies in which we operate, including the ongoing war between Russia and Ukraine and the conflict in the Middle East;

● adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;

● adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, 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;

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● 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;

● dealer practices and their ability to manage inventory and distribution of John Deere products and to provide support and service precision technology solutions;

● changes in climate patterns, unfavorable weather events, and natural disasters;

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● delays or disruptions in our supply chain;

● the failure of our equipment 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;

● 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 employees;

● the impact of workforce reductions on employee retention, morale, and institutional knowledge;

● security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products;

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STATEMENTS OF INCOME

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

For the Three Months Ended July 28, 2024 and July 30, 2023

Net Sales and Revenues

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STATEMENTS OF INCOME

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

For the Nine Months Ended July 28, 2024 and July 30, 2023

Net Sales and Revenues

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Deferred income taxes

Assets held for sale

Liabilities and Stockholders’ Equity

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Retirement benefits and other liabilities

Liabilities held for sale

Total liabilities

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STATEMENTS OF CASH FLOWS

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

For the Nine Months Ended July 28, 2024 and July 30, 2023

Cash Flows from Operating Activities

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

Adjustments to reconcile net income to net cash provided by operating activities:

Provision (credit) for credit losses

Provision for depreciation and amortization

Other non-cash adjustments (Note 21)

Impairments and other adjustments

Share-based compensation expense

6 unchanged sentences

Retirement benefits

Net cash provided by (used for) operating activities

Net cash provided by operating activities

Cash Flows from Investing Activities

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Cash and cash equivalents

Cash, cash equivalents, and restricted cash (Assets held for sale)

Restricted cash (Other assets)

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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 2. Management’s Discussion and Analysis