What changed in this filing

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Item 1. Financial Statements

2025-02-27 compared with 2024-08-29 · 155 added, 334 removed, 581 unchanged (46% of the section changed)

2 unchanged sentences

STATEMENTS OF CONSOLIDATED INCOME

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

For the Three Months Ended January 26, 2025 and January 28, 2024

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

Three Months Ended

Nine Months Ended

Net Sales and Revenues

9 unchanged sentences

Income of Consolidated Group

Equity in income of unconsolidated affiliates

Equity in income (loss) of unconsolidated affiliates

Net loss attributable to noncontrolling interests

7 unchanged sentences

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

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

For the Three Months Ended January 26, 2025 and January 28, 2024

(In millions of dollars) Unaudited

Three Months Ended

Nine Months Ended

Other Comprehensive Income (Loss), Net of Income Taxes

1 unchanged sentence

Cumulative translation adjustment

Unrealized gain (loss) on derivatives

Unrealized loss on derivatives

Unrealized gain (loss) on debt securities

1 unchanged sentence

Comprehensive Income of Consolidated Group

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive loss attributable to noncontrolling interests

Comprehensive Income Attributable to Deere & Company

27 unchanged sentences

Stockholders’ Equity

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

Common stock, $ 1 par value (issued shares at January 26, 2025 – 536,431,204 )

Common stock in treasury

8 unchanged sentences

STATEMENTS OF CONSOLIDATED CASH FLOWS

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

For the Three Months Ended January 26, 2025 and January 28, 2024

(In millions of dollars) Unaudited

Cash Flows from Operating Activities

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

Provision (credit) for credit losses

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

Provision for credit losses

Provision for depreciation and amortization

1 unchanged sentence

Share-based compensation expense

Credit for deferred income taxes

Provision for deferred income taxes

Changes in assets and liabilities:

3 unchanged sentences

Retirement benefits

Net cash provided by operating activities

Net cash used for operating activities

Cash Flows from Investing Activities

7 unchanged sentences

Collateral on derivatives – net

Net cash used for investing activities

Net cash provided by investing activities

Cash Flows from Financing Activities

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

Net payments 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 provided by (used for) financing activities

Net cash used for financing activities

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

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

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

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

8 unchanged sentences

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

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

For the Three Months Ended January 26, 2025 and January 28, 2024

(In millions of dollars) Unaudited

6 unchanged sentences

Income (Loss)

Three Months Ended July 30, 2023

Balance April 30, 2023

Net income (loss)

Other comprehensive income

Repurchases of common stock

Treasury shares reissued

Dividends declared

Share based awards and other

Balance July 30, 2023

Nine Months Ended July 30, 2023

Balance October 29, 2023

5 unchanged sentences

Share based awards and other

Balance July 30, 2023

Three Months Ended July 28, 2024

Balance April 28, 2024

Net income (loss)

Other comprehensive loss

Repurchases of common stock

Treasury shares reissued

Dividends declared

Noncontrolling interest redemption (Note 21)

Share based awards and other

Balance July 28, 2024

Nine Months Ended July 28, 2024

Balance January 28, 2024

Balance October 27, 2024

Net income (loss)

Other comprehensive income (loss)

Other comprehensive loss

Repurchases of common stock

1 unchanged sentence

Dividends declared

Noncontrolling interest redemption (Note 21)

Share based awards and other

Balance July 28, 2024

Balance January 26, 2025

See Condensed Notes to Interim Consolidated Financial Statements.

4 unchanged sentences

We manage our business through the following operating segments:

production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (FS).

production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services (John Deere Financial or FS).

References to “agriculture and turf” include both PPA and SAT.

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

The third quarter ends for fiscal year 2024 and 2023 were July 28, 2024 and July 30, 2023, respectively.

Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks.

The first quarter ends for fiscal year 2025 and 2024 were January 26, 2025 and January 28, 2024, respectively.

Both periods contained 13 weeks.

Fiscal year 2025 will contain 53 weeks, with the additional week occurring in the fourth quarter.

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.

Certain prior period amounts have been reclassified to conform to current period presentation.

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

Quarterly Financial Statements

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.

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.

Securities and Exchange Commission (SEC).

8 unchanged sentences

Actual results could differ from those estimates.

New Accounting Pronouncements

New Accounting Pronouncements Adopted

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 2025, none of which had a material effect on our consolidated financial statements.

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

Disclosure of Supplier Finance Program Obligations

2022-02 — Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures

2022-01 — Derivatives and Hedging (Topic 815):

Fair Value Hedging – Portfolio Layer Method

2021-08 — Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

2023-05 — Business Combinations – Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement

2022-03 — Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

Accounting Pronouncements to be Adopted

In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement.

In January 2025, the FASB issued ASU 2025-01 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), which clarifies the effective date of ASU 2024-03.

The ASU will be effective for us beginning with our annual reporting for fiscal year 2028 and interim periods thereafter.

We are assessing the effect of ASU 2024-03 on our related disclosures.

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

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash income taxes paid both in the U.S.

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash taxes paid both in the U.S.

and foreign jurisdictions.

The effective date of the ASU is fiscal year 2026.

The ASU will be effective for us beginning with our annual reporting for fiscal year 2026.

We are assessing the effect of this update on our related disclosures.

We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements.

2024-04 — Debt – Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments

2023-07 — Segment Reporting (Topic 280):

2 unchanged sentences

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative

2023-05 — Business Combinations – Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement

2022-03 — Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

(3) Revenue Recognition

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

Three Months Ended July 28, 2024

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

Nine Months Ended July 28, 2024

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

Three Months Ended July 30, 2023

Production & Precision Ag

Small Ag & Turf

Three Months Ended January 26, 2025

Primary geographic markets:

11 unchanged sentences

At a point in time

Nine Months Ended July 30, 2023

Production & Precision Ag

Small Ag & Turf

Three Months Ended January 28, 2024

Primary geographic markets:

11 unchanged sentences

At a point in time

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

We invoice in advance of recognizing the revenue of certain products and 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 $ 1,895 , $ 1,697 , and $ 1,753 at July 28, 2024, October 29, 2023, and July 30, 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 $ 2,027 , $ 1,923 , and $ 1,747 at January 26, 2025, October 27, 2024, and January 28, 2024, respectively.

The contract liability is reduced as the revenue is recognized.

During the three months ended July 28, 2024 and July 30, 2023, $ 126 and $ 96 , 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 nine months ended July 28, 2024 and July 30, 2023, $ 484 and $ 440 , 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 $ 1,677 at July 28, 2024.

Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $ 197 and $ 230 during the three months ended January 26, 2025 and January 28, 2024, respectively.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $ 1,734 at January 26, 2025.

The estimated revenue to be recognized by fiscal year follows:

6 unchanged sentences

Cumulative translation adjustment

Unrealized gain (loss) on derivatives

Unrealized gain (loss) on debt securities

Total accumulated other comprehensive income (loss)

Unrealized loss on derivatives

Unrealized loss on debt securities

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 July 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)

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)

Nine Months Ended July 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

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)

Three Months Ended July 30, 2023

Three Months Ended January 26, 2025

Cumulative translation adjustment

Unrealized gain (loss) on derivatives:

Unrealized gain (loss) on interest rate derivatives:

Unrealized hedging gain (loss)

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

Reclassification of realized (gain) loss to Interest expense

Net unrealized gain (loss) on derivatives

9 unchanged sentences

Total other comprehensive income (loss)

Nine Months Ended July 30, 2023

Three Months Ended January 28, 2024

Cumulative translation adjustment

Unrealized gain (loss) on derivatives:

Unrealized gain (loss) on interest rate derivatives:

Unrealized hedging gain (loss)

Reclassification of realized (gain) loss to:

Interest rate contracts – Interest expense

Reclassification of realized (gain) loss to Interest expense

Net unrealized gain (loss) on derivatives

1 unchanged sentence

Unrealized holding gain (loss)

Reclassification of realized (gain) loss to Other income

Net unrealized gain (loss) on debt securities

9 unchanged sentences

Three Months Ended

Nine Months Ended

Net income attributable to Deere & Company

2 unchanged sentences

Average shares outstanding

Effect of dilutive stock options and restricted stock awards

Effect of dilutive stock options and unvested restricted stock units

Total potential shares outstanding

7 unchanged sentences

Three Months Ended

Nine Months Ended

Interest cost

7 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 nine months of 2024, we contributed and expect to contribute the following amounts to our pension and OPEB plans:

During the first three months of 2025, we contributed and expect to contribute the following amounts to our pension and OPEB plans:

Expected contributions remainder of the year

In the first quarter of 2025, a committee of our Board of Directors approved and a $ 520 voluntary contribution was made to a U.S.

This contribution increased plan assets.

(7) Segment Data

1 unchanged sentence

Three Months Ended

Nine Months Ended

Net sales and revenues

Production & precision ag net sales

Small ag & turf net sales

Construction & forestry net sales

Financial services revenues

PPA net sales

SAT net sales

Other revenues

1 unchanged sentence

Operating profit

Production & precision ag

Small ag & turf

Construction & forestry

Financial services

Total operating profit

2 unchanged sentences

Intersegment sales and revenues:

Production & precision ag net sales

Small ag & turf net sales

Construction & forestry net sales

Financial services revenues

PPA net sales

SAT net sales

Operating profit for PPA, SAT, and CF is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes.

2 unchanged sentences

Identifiable operating assets were as follows:

Production & precision ag

Small ag & turf

Construction & forestry

Financial services

(8) Financing Receivables

5 unchanged sentences

In these situations, the estimated uncollectible amount is written off to the allowance for credit losses.

Any expected recovery is presented as non-performing.

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

July 28, 2024

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

January 26, 2025

Revolving Charge Accounts

11 unchanged sentences

Total retail customer receivables

Write-offs for the three months ended January 26, 2025:

Agriculture and turf

Construction and forestry

October 27, 2024

12 unchanged sentences

Total retail customer receivables

July 30, 2023

Write-offs for the twelve months ended October 27, 2024:

Agriculture and turf

Construction and forestry

January 28, 2024

Revolving Charge Accounts

11 unchanged sentences

Total retail customer receivables

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

July 28, 2024

Wholesale receivables:

Agriculture and turf

30+ days past due

Non-performing

Construction and forestry

30+ days past due

Non-performing

Total wholesale receivables

October 29, 2023

Wholesale receivables:

Write-offs for the three months ended January 28, 2024:

Agriculture and turf

30+ days past due

Non-performing

Construction and forestry

30+ days past due

Non-performing

Total wholesale receivables

July 30, 2023

The credit quality and aging analysis of wholesale receivables was as follows:

Wholesale receivables:

7 unchanged sentences

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

Three Months Ended July 28, 2024

Beginning of period balance

Provision reversal for assets held for sale

Provision subtotal

Translation adjustments

End of period balance

Nine Months Ended July 28, 2024

Three Months Ended January 26, 2025

Beginning of period balance

Provision reversal for assets held for sale

Provision subtotal

Translation adjustments

2 unchanged sentences

End of period balance

Three Months Ended July 30, 2023

Beginning of period balance

Translation adjustments

End of period balance

Nine Months Ended July 30, 2023

Three Months Ended January 28, 2024

Beginning of period balance

Provision reversal for assets held for sale

Provision (credit) subtotal

Provision (credit)

Translation adjustments

2 unchanged sentences

End of period balance

In the third quarter of 2024, we determined that the financial services business in Brazil met the held for sale criteria.

The allowance for credit losses on retail notes and financing lease receivables increased in the first quarter of 2025, primarily due to higher expected losses as a result of elevated delinquencies and market conditions.

During the third quarter of 2024, we determined that the financial services business in Brazil met the held for sale criteria.

The receivables in Brazil were reclassified to “Assets held for sale.” The associated allowance for credit losses was reversed and a valuation allowance for the “Assets held for sale” was recorded (see Note 20).

Excluding the business in Brazil, the allowance for credit losses on retail notes and financing lease receivables increased in the third quarter and first nine months of 2024,

primarily due to higher expected losses as a result of elevated delinquencies and a decline in market conditions.

This increase was partially offset by a decrease in the allowance on revolving charge accounts, driven by write-offs of seasonal financing program accounts and recoveries expected on those accounts in the future.

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

The allowance for credit losses for the financing receivables in Russia was reversed and a valuation allowance for the assets held for sale was recorded.

These operations were sold in the second quarter of 2023 (see Note 20).

Write-offs by year of origination were as follows:

Nine Months Ended July 28, 2024

Revolving Charge Accounts

Retail customer receivables:

Agriculture and turf

Construction and forestry

Total retail customer receivables

Modifications

5 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 third quarter and the nine months ended July 28, 2024 were $ 23 and $ 67 , respectively, of which $ 56 were current, $ 4 were 30-59 days past due, $ 3 were 60-89 days past due, $ 1 were 90 days or greater past due, and $ 3 were non-performing.

These modifications represented 0.04 and 0.13 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 third quarter or the first nine months of 2024.

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

The ending amortized cost of financing receivables modified with borrowers experiencing financial difficulty during the first quarter ended January 26, 2025 and January 28, 2024 were $ 28 and $ 17 , respectively.

These modifications represented 0.06 % and 0.03 % of our financing receivable portfolio for the same periods, respectively.

The financial effects of payment deferrals with borrowers experiencing financial difficulty resulted in a weighted average payment deferral of 8 months to the modified contracts.

Term extensions provided to borrowers experiencing financial difficulty added a weighted average of 12 months to the modified contracts.

Additionally, modifications with a combination of both payment deferrals and term extensions resulted in a weighted average payment deferral of 4 months and a weighted average term extension of 6 months .

We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty.

The ending amortized cost and performance of financing receivables modified during the prior twelve months ended January 26, 2025 and January 28, 2024 were as follows:

30-59 days past due

60-89 days past due

90+ days past due

Non-performing

* In accordance with the adoption date of the accounting modification guidance, this period includes receivables modified during the prior three months.

Defaults and subsequent write-offs of financing receivables modified in the prior twelve months were not significant during the three months ended January 26, 2025 and January 28, 2024.

In addition, at January 26, 2025, commitments to provide additional financing to these customers were not significant.

(9) Securitization of Financing Receivables

20 unchanged sentences

A majority of inventories owned by us are valued at cost on the “last-in, first-out” (LIFO) basis.

If all inventories had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows:

If all inventories valued on a LIFO basis had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows:

Raw materials and supplies

8 unchanged sentences

Translation adjustments

Goodwill at July 30, 2023

Goodwill at January 28, 2024

Goodwill at October 27, 2024

Translation adjustments

Goodwill at July 28, 2024

Goodwill at January 26, 2025

The components of other intangible assets were as follows:

7 unchanged sentences

Other intangible assets – net

The amortization of other intangible assets in the third quarter and the first nine months of 2024 was $ 41 and $ 124 , and for the third quarter and the first nine months of 2023 was $ 42 and $ 126 , respectively.

The amortization of other intangible assets in the first quarter of 2025 and 2024 was $ 41 and $ 42 , respectively.

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

17 unchanged sentences

Employee benefits

Product warranties

Accrued taxes

Derivative liabilities

Product warranties

Dealer sales discounts

Extended warranty premium

Derivative liabilities

Unearned revenue (contractual liability)

3 unchanged sentences

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 $ 2,535 at July 28, 2024, $ 2,228 at October 29, 2023, and $ 2,240 at July 30, 2023.

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $ 1,901 at January 26, 2025, $ 2,121 at October 27, 2024, and $ 2,410 at January 28, 2024.

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

12 unchanged sentences

2.875 % notes due 2049

3.75 % notes due 2050

5.70 % notes due 2055

1.85 % notes due 2028 (€ 600 principal)

7 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 $ 36,716 , $ 30,902 , and $ 30,348 , at July 28, 2024, October 29, 2023, and July 30, 2023, respectively.

The principal balances of the medium-term notes were $ 35,770 , $ 37,141 , and $ 31,808 at January 26, 2025, October 27, 2024, and January 28, 2024, respectively.

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

4 unchanged sentences

Three Months Ended

Nine Months Ended

Sales-type and direct finance lease revenues

8 unchanged sentences

Three Months Ended

Nine 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 July 28, 2024, the notional value of these guarantees was $ 151 .

As of January 26, 2025, the notional value of these guarantees was $ 128 .

We may repossess the equipment collateralizing the receivables.

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

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $ 130 at July 28, 2024.

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

At July 28, 2024, we had commitments of approximately $ 585 for the construction and acquisition of property and equipment.

Also, at July 28, 2024, we had restricted assets of $ 234 , classified as “Other assets.”

At January 26, 2025, the accrued losses under these guarantees were not material.

We also had other miscellaneous contingent liabilities totaling approximately $ 115 at January 26, 2025.

The accrued liability for these contingencies was $ 25 at January 26, 2025.

At January 26, 2025, we had commitments of approximately $ 490 for the construction and acquisition of property and equipment.

Also at January 26, 2025, we had restricted assets of $ 259 , classified as “Other assets.”

We are subject to various unresolved legal actions.

The accrued losses on these matters were not material at July 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.

The most prevalent legal claims relate to product liability (including asbestos-related liability), retail credit, employment, patent, trademark, and antitrust matters.

The accrued losses on these matters were not material at January 26, 2025.

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

The most prevalent legal claims relate to product liability (including asbestos-related liability), employment, patent, trademark, and antitrust matters (including class action litigation).

(17) Fair Value Measurements

1 unchanged sentence

Long-term borrowings exclude finance lease liabilities.

July 28, 2024

January 26, 2025

October 27, 2024

July 30, 2023

January 28, 2024

Financing receivables – net

6 unchanged sentences

The fair values of the remaining financing receivables approximated the carrying amounts.

In May 2024, we acquired a held-to-maturity marketable security that matures in less than one year.

The carrying value of the held-to-maturity marketable security was $ 12 as of July 28, 2024, which approximated its fair value .

Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates.

18 unchanged sentences

government sponsored enterprises.

The contractual maturities of available-for-sale debt securities at July 28, 2024 follow:

The contractual maturities of available-for-sale debt securities at January 26, 2025 follow:

Due in one year or less

6 unchanged sentences

Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity.

Fair value, nonrecurring Level 3 measurements from impairments were as follows:

Fair value, nonrecurring Level 3 measurements from impairments and other adjustments were as follows:

(Gains) Losses

Three Months Ended

Nine Months Ended

Assets held for sale

* The gain on “Assets held for sale” in the first quarter of 2025 represents a reversal of prior period valuation allowance loss, not in excess of cumulative valuation allowance recorded on “Assets held for sale.”

The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value:

4 unchanged sentences

The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Assets held for sale – The impairment was measured at the lower of the carrying amount or fair value less cost to sell.

Deferred consideration – The total purchase price consideration for three former Deere-Hitachi joint venture factories acquired in 2022 included supply agreement price increases beyond inflation adjustments.

This deferred consideration will be paid as we purchase Deere-branded excavators, components, and service parts from Hitachi under the agreement with a duration that ranges from 5 to 30 years .

The deferred consideration balance is reduced as purchases are made and valued on a discounted cash flow approach using market rates.

Other assets (Investment in unconsolidated affiliates) – Other than temporary impairments of investments are measured as the difference between the implied fair value and the carrying value of the investments.

The estimated fair value for privately held entities is determined by an income approach (discounted cash flows), which includes inputs such as interest rates and margins.

Assets held for sale – The disposal group was measured at the lower of the carrying amount or fair value less cost to sell.

Fair value was based on the probable sale price.

3 unchanged sentences

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

July 28, 2024

January 26, 2025

October 27, 2024

July 30, 2023

January 28, 2024

Cash flow hedges:

19 unchanged sentences

Hedging Amount

July 28, 2024

January 26, 2025

Short-term borrowings

3 unchanged sentences

Long-term borrowings

July 30, 2023

January 28, 2024

Short-term borrowings

2 unchanged sentences

Three Months Ended

Nine Months Ended

Fair value hedges:

6 unchanged sentences

Not designated as hedges:

Interest rate contracts – Net sales

Interest rate contracts – Interest expense

3 unchanged sentences

Total not designated

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

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 July 28, 2024, October 29, 2023, and July 30, 2023, was $ 566 , $ 1,076 , and $ 865 , respectively.

In accordance with the limits established in these agreements, we posted $ 269 , $ 659 , and $ 435 of cash collateral at July 28, 2024, October 29, 2023, and July 30, 2023, respectively.

In addition, we paid $ 8 of collateral that was outstanding at July 28, 2024, October 29, 2023, and July 30, 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 January 26, 2025, October 27, 2024, and January 28, 2024 was $ 707 , $ 562 , and $ 691 , respectively.

In accordance with the limits established in these agreements, we posted $ 436 , $ 245 , and $ 368 of cash collateral at January 26, 2025, October 27, 2024, and January 28, 2024, respectively.

In addition, we paid $ 8 of collateral that was outstanding at January 26, 2025, October 27, 2024, and January 28, 2024 to participate in an international futures market to hedge currency exposure, not included in the following table.

Derivatives are recorded without offsetting for netting arrangements or collateral.

1 unchanged sentence

Gross Amounts

July 28, 2024

January 26, 2025

October 27, 2024

July 30, 2023

January 28, 2024

(19) Share-Based Awards

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

The outstanding shares authorized were 14.9 million at July 28, 2024.

We are authorized to grant shares for equity incentive awards.

The outstanding shares authorized were 13.7 million at January 26, 2025.

In December 2024, we granted stock options to employees for the purchase of 168 thousand shares of common stock at an exercise price of $ 448.03 per share and a binomial lattice model fair value of $ 116.27 per share at the grant date.

At July 28, 2024, options for 1.7 million shares were outstanding with a weighted-average exercise price of $ 228.10 per share.

During the nine months ended July 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 January 26, 2025, options for 1.4 million shares were outstanding with a weighted-average exercise price of $ 291.97 per share.

During the three months ended January 26, 2025, 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

Performance/service-based

Market/service-based

In December 2023, we granted market/service-based RSUs.

The vesting period for the market/service-based RSUs is three years and dividend equivalents are not earned during the vesting period.

The market/service-based RSUs are subject to a market related metric based on total shareholder return, compared to a benchmark group of companies, and award common stock in a range of zero to 200 percent for each unit granted based on the level of the metric achieved.

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

(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 .

The operations were included in the financial services operating segment through the date of sale.

At the disposal date, the total assets were $ 31 , consisting primarily of financing receivables, the total liabilities were $ 5 , and the cumulative translation loss was $ 10 .

We did not incur additional gains or losses upon disposition.

Market/service-based (fair value determined using a Monte Carlo model )

(20) Special Items

Employee-Separation Programs

In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America.

The programs’ main purpose was to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities.

The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period.

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

The remaining expenses are expected to be recorded primarily in 2025.

Payments made during the third quarter of 2024 with respect to these program expenses totaled $ 30 .

The expenses for the three months and nine months ended July 28, 2024 were recorded as follows:

Employee-Separation Programs:

Cost of sales

Research and development expenses

Selling, administrative and general expenses

Total operating profit decrease

Non-operating profit expenses*

* Relates primarily to corporate expenses.

Discrete Tax Items

In the first quarter of 2025, we recorded favorable net discrete tax items primarily due to tax benefits of $ 110 related to the realization of foreign net operating losses from the consolidation of certain subsidiaries and $ 53 from an adjustment to an uncertain tax position of a foreign subsidiary.

Banco John Deere S.A.

In the third quarter of 2024, our board of directors authorized the sale of 50 percent ownership in our wholly owned subsidiary, Banco John Deere S.A.

BJD, located in Brazil, is included in our financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment.

The transaction will reduce our incremental risk as we continue to grow in the Brazilian market.

As a result, we reclassified the BJD business as held for sale, including a reversal of $ 38 in allowance for credit losses, and the establishment of a $ 53 valuation allowance on the assets held for sale.

The net impact of these entries was a pretax and after-tax loss of $ 15 recorded in “ Selling, administrative and general expenses .” We do not expect a significant gain or loss upon deconsolidation of BJD in 2025.

In 2024, we entered into a joint venture agreement with a Brazilian bank, Banco Bradesco S.A.

(Bradesco), for Bradesco to invest and become 50 % owner of our wholly-owned subsidiary in Brazil, Banco John Deere S.A.

BJD is included in our financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment.

The transaction is intended to reduce our incremental risk as we continue to grow in the Brazilian market.

In February 2025, Bradesco contributed capital equal to our equity investment in BJD.

We retained a 50 % equity interest in BJD and will report the results of the joint venture as an equity investment in unconsolidated affiliates.

The BJD business was reclassified as held for sale in 2024.

At January 26, 2025, the valuation allowance on “Assets held for sale” decreased to $ 65 , resulting in a pretax and after-tax gain (reversal of previous losses) of $ 32 recorded in “Selling, administrative and general expenses” in the three months ended January 26, 2025 and presented in “Impairments and other adjustments” in the statements of consolidated cash flows.

The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows:

January 26, 2025

Cash and cash equivalents

4 unchanged sentences

Valuation allowance

Total assets held for sale

Assets held for sale

Short-term borrowings

2 unchanged sentences

Retirement benefits and other liabilities

Total liabilities held for sale

Liabilities held for sale

Total intercompany payables

* Includes $ 1 restricted cash balance.

In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A.

(Bradesco), for Bradesco to invest and become 50 percent owner of BJD.

On the transaction date, which is expected to occur in the second quarter of 2025, subject to usual and customary regulatory approval, Bradesco will contribute capital equal to our equity investment in BJD.

We will retain a 50 percent equity interest in BJD and report the results of the joint venture as an equity investment in unconsolidated affiliates.

Redeemable Noncontrolling Interest

In the third quarter of 2024, we exercised our right to purchase the remaining 20 percent interest in SurePoint Ag Systems, Inc.

The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statements of consolidated income.

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed us to record a $ 243 reduction in the provision for income taxes and $ 47 of interest income.

Financial Services Financing Incentives Correction

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.

Summary of 2024 and 2023 Special Items

The following table summarizes the operating profit impact of the special items recorded for the three months and nine months ended July 28, 2024 and July 30, 2023.

Three Months Ended

Nine Months Ended

2024 Expense:

Employee-separation programs

BJD remeasurement

Total 2024 expense

2023 Expense:

Financing incentives correction

Period over period change

( 21) Subsequent Events

In August 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A., to invest and become 50 percent owner of Banco John Deere S.A.

(see Note 21).

On August 28, 2024 , a quarterly dividend of $ 1.47 per share was declared at the Board of Directors meeting, payable on November 8, 2024 , to stockholders of record on September 30, 2024 .

In February 2025, we completed the transaction with Bradesco (see Note 20) for the sale of 50 % ownership in BJD.

Bradesco contributed capital equal to our equity investment in BJD.

We retained a 50 % equity interest in BJD and will report the results of the joint venture as an equity investment in unconsolidated affiliates.

On February 26, 2025 , a quarterly dividend of $ 1.62 per share was declared at the Board of Directors meeting, payable on May 8, 2025 , to stockholders of record on March 31, 2025 .

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