Deere Reports Net Income of $2.369 Billion for Fourth Quarter, $10.166 Billion for Fiscal Year

• Net income grows for quarter and full year, driven by solid market conditions, differentiated products, and strong execution.
• Full-year 2024 earnings forecast to be $7.75 to $8.25 billion, as volumes return to mid‑cycle levels.
• Ongoing focus on structural profitability, investments that deliver customer value.

MOLINE, Ill., Nov. 22, 2023 /CNW/ -- Deere & Company reported net income of $2.369 billion for the fourth quarter ended October 29, 2023, or $8.26 per share, compared with net income of $2.246 billion, or $7.44 per share, for the quarter ended October 30, 2022. For fiscal-year 2023, net income attributable to Deere & Company was $10.166 billion, or $34.63 per share, compared with $7.131 billion, or $23.28 per share, in fiscal 2022.

Worldwide net sales and revenues decreased 1 percent, to $15.412 billion, for the fourth quarter of fiscal 2023 and rose 16 percent, to $61.251 billion, for the full year. Net sales were $13.801 billion for the quarter and $55.565 billion for the year, compared with $14.351 billion and $47.917 billion in 2022.

"Deere's fourth-quarter and full-year results can be attributed to the successful execution of our Smart Industrial Operating Model and the value that customers recognize in our industry-leading products and solutions," said John C. May, chairman and chief executive officer. "We must also recognize and credit our dedicated employees, dealers, and suppliers, whose hard work and focus have been instrumental to our overall success."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be in a range of $7.75 billion to $8.25 billion.

"While our end markets will fluctuate, we remain focused on disciplined execution and strategically investing in solutions that drive customer value," May said. "As evidenced by our guidance for 2024, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient and better equipped for the future."

Deere & Company		Fourth Quarter								Full Year
$ in millions, except per share amounts		2023			2022			% Change		2023			2022			% Change
Net sales and revenues		$	15,412		$	15,536		-1 %		$	61,251		$	52,577		16 %
Net income		$	2,369		$	2,246		5 %		$	10,166		$	7,131		43 %
Fully diluted EPS		$	8.26		$	7.44				$	34.63		$	23.28

Results for the presented periods were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture		Fourth Quarter
$ in millions		2023			2022			% Change
Net sales		$	6,965		$	7,434		-6 %
Operating profit		$	1,836		$	1,740		6 %
Operating margin			26.4 %			23.4 %

Production and precision agriculture sales decreased for the quarter due to lower shipment volumes partially offset by price realization. Operating profit improved primarily due to price realization partially offset by lower shipment volumes / sales mix and higher SA&G and R&D expenses. The prior period was impacted by higher reserves on assets in Russia.

Small Agriculture & Turf		Fourth Quarter
$ in millions		2023			2022			% Change
Net sales		$	3,094		$	3,544		-13 %
Operating profit		$	444		$	506		-12 %
Operating margin			14.4 %			14.3 %

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes partially offset by price realization. Operating profit decreased due to lower shipment volumes / sales mix and higher SA&G and R&D expenses, partially offset by price realization.

Construction & Forestry		Fourth Quarter
$ in millions		2023			2022			% Change
Net sales		$	3,742		$	3,373		11 %
Operating profit		$	516		$	414		25 %
Operating margin			13.8 %			12.3 %

Construction and forestry sales increased for the quarter due to price realization and higher shipment volumes. Operating profit improved primarily due to price realization, partially offset by higher production costs, less-favorable sales mix, the unfavorable effects of foreign currency exchange, and a loss on the sale of the Russian roadbuilding business. The prior period was impacted by higher reserves on assets in Russia.

Financial Services		Fourth Quarter
$ in millions		2023			2022			% Change
Net income		$	190		$	232		-18 %

Financial services net income for the quarter decreased due to unfavorable derivative valuation adjustments, less-favorable financing spreads, and a higher provision for credit losses (excluding reserves in Russia). These factors were partially offset by income earned on a higher average portfolio. In the fourth quarter of 2022, financial services increased its reserves for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees the financial services' investment in certain international markets, including Russia.

Industry Outlook for Fiscal 2024
Agriculture & Turf
U.S. & Canada:
Large Ag						Down 10 to 15%
Small Ag & Turf						Down 5 to 10%
Europe						Down ~10%
South America (Tractors & Combines)						Down ~10%
Asia						Down moderately
Construction & Forestry
U.S. & Canada:
Construction Equipment						Down 5 to 10%
Compact Construction Equipment						Flat to Down 5%
Global Forestry						Down ~10%
Global Roadbuilding						Flat

Deere Segment Outlook for Fiscal 2024				Currency		Price
$ in millions		Net Sales		Translation		Realization
Production & Precision Ag		Down 15 to 20%		~ Flat		+1.5 %
Small Ag & Turf		Down 10 to 15%		~ Flat		+1.0 %
Construction & Forestry		Down ~10%		~ Flat		+1.5 %
Financial Services		Net Income		~ $770

Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecast to be approximately $770 million. Results are expected to be higher in 2024 due to income earned on a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating-lease residual values. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. See Note 1 of the financial statements for further details.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," and "Deere Segment Outlook," relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

• changes in U.S., foreign and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;
• political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the war between Israel and Hamas;
• adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and regional or global liquidity constraints;
• growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);
• the ability to execute business strategies, including the company's Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions;
• the ability to understand and meet customers' changing expectations and demand for John Deere products and solutions;
• accurately forecasting customer demand for products and services and adequately managing inventory;
• the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;
• changes to governmental communications channels (radio frequency technology);
• the ability to adapt in highly competitive markets;
• dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;
• changes in climate patterns, unfavorable weather events, and natural disasters;
• governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
• higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions;
• availability and price of raw materials, components, and whole goods;
• delays or disruptions in the company's supply chain;
• labor relations and contracts, including work stoppages and other disruptions;
• the ability to attract, develop, engage, and retain qualified personnel;
• security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products;
• loss of or challenges to intellectual property rights;
• compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;
• legislation introduced or enacted that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation;
• investigations, claims, lawsuits, or other legal proceedings;
• events that damage the company's reputation or brand;
• world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and
• housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the company and its businesses, including factors that could materially affect the financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

DEERE & COMPANY FOURTH QUARTER 2023 PRESS RELEASE (In millions of dollars) Unaudited
		Three Months Ended								Years Ended
		October 29			October 30			%		October 29			October 30			%
		2023			2022			Change		2023			2022			Change
Net sales and revenues:
Production & precision ag net sales		$	6,965		$	7,434		-6		$	26,790		$	22,002		+22
Small ag & turf net sales			3,094			3,544		-13			13,980			13,381		+4
Construction & forestry net sales			3,742			3,373		+11			14,795			12,534		+18
Financial services revenues			1,347			988		+36			4,721			3,625		+30
Other revenues			264			197		+34			965			1,035		-7
Total net sales and revenues		$	15,412		$	15,536		-1		$	61,251		$	52,577		+16
Operating profit: *
Production & precision ag		$	1,836		$	1,740		+6		$	6,996		$	4,386		+60
Small ag & turf			444			506		-12			2,472			1,949		+27
Construction & forestry			516			414		+25			2,695			2,014		+34
Financial services			229			297		-23			795			1,159		-31
Total operating profit			3,025			2,957		+2			12,958			9,508		+36
Reconciling items **			51			(68)					79			(370)
Income taxes			(707)			(643)		+10			(2,871)			(2,007)		+43
Net income attributable to Deere & Company		$	2,369		$	2,246		+5		$	10,166		$	7,131		+43

*	Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit for financial services includes the effect of interest expense and foreign exchange gains or losses.
**	Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, equity in income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

DEERE & COMPANY STATEMENTS OF CONSOLIDATED INCOME For the Three Months and Years Ended October 29, 2023 and October 30, 2022 (In millions of dollars and shares except per share amounts) Unaudited
		Three Months Ended						Years Ended
		2023			2022			2023			2022
Net Sales and Revenues
Net sales		$	13,801		$	14,351		$	55,565		$	47,917
Finance and interest income			1,357			925			4,683			3,365
Other income			254			260			1,003			1,295
Total			15,412			15,536			61,251			52,577
Costs and Expenses
Cost of sales			9,427			10,214			37,715			35,338
Research and development expenses			606			576			2,177			1,912
Selling, administrative and general expenses			1,203			1,192			4,595			3,863
Interest expense			781			348			2,453			1,062
Other operating expenses			322			320			1,292			1,275
Total			12,339			12,650			48,232			43,450
Income of Consolidated Group before Income Taxes			3,073			2,886			13,019			9,127
Provision for income taxes			707			643			2,871			2,007
Income of Consolidated Group			2,366			2,243			10,148			7,120
Equity in income of unconsolidated affiliates			2			1			7			10
Net Income			2,368			2,244			10,155			7,130
Less: Net loss attributable to noncontrolling interests			(1)			(2)			(11)			(1)
Net Income Attributable to Deere & Company		$	2,369		$	2,246		$	10,166		$	7,131
Per Share Data
Basic		$	8.30		$	7.48		$	34.80		$	23.42
Diluted			8.26			7.44			34.63			23.28
Dividends declared			1.35			1.13			5.05			4.36
Dividends paid			1.25			1.13			4.83			4.28
Average Shares Outstanding
Basic			285.5			300.4			292.2			304.5
Diluted			286.9			302.1			293.6			306.3

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS As of October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
		2023			2022
Assets
Cash and cash equivalents		$	7,458		$	4,774
Marketable securities			946			734
Trade accounts and notes receivable – net			7,739			6,410
Financing receivables – net			43,673			36,634
Financing receivables securitized – net			7,335			5,936
Other receivables			2,623			2,492
Equipment on operating leases – net			6,917			6,623
Inventories			8,160			8,495
Property and equipment – net			6,879			6,056
Goodwill			3,900			3,687
Other intangible assets – net			1,133			1,218
Retirement benefits			3,007			3,730
Deferred income taxes			1,814			824
Other assets			2,503			2,417
Total Assets		$	104,087		$	90,030
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings		$	17,939		$	12,592
Short-term securitization borrowings			6,995			5,711
Accounts payable and accrued expenses			16,130			14,822
Deferred income taxes			520			495
Long-term borrowings			38,477			33,596
Retirement benefits and other liabilities			2,140			2,457
Total liabilities			82,201			69,673
Redeemable noncontrolling interest			97			92
Stockholders' Equity
Total Deere & Company stockholders' equity			21,785			20,262
Noncontrolling interests			4			3
Total stockholders' equity			21,789			20,265
Total Liabilities and Stockholders' Equity		$	104,087		$	90,030

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS For the Years Ended October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
		2023			2022
Cash Flows from Operating Activities
Net income		$	10,155		$	7,130
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses			(16)			192
Provision for depreciation and amortization			2,004			1,895
Impairments and other adjustments			191			88
Share-based compensation expense			130			85
Gain on remeasurement of previously held equity investment						(326)
Credit for deferred income taxes			(790)			(66)
Changes in assets and liabilities:
Receivables related to sales			(4,253)			(2,483)
Inventories			279			(2,091)
Accounts payable and accrued expenses			830			1,133
Accrued income taxes payable/receivable			(23)			141
Retirement benefits			(170)			(1,015)
Other			252			16
Net cash provided by operating activities			8,589			4,699
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)			23,051			20,907
Proceeds from sales of equipment on operating leases			1,981			2,093
Cost of receivables acquired (excluding receivables related to sales)			(28,772)			(26,300)
Acquisitions of businesses, net of cash acquired			(82)			(498)
Purchases of property and equipment			(1,498)			(1,134)
Cost of equipment on operating leases acquired			(2,970)			(2,654)
Collateral on derivatives – net			(12)			(642)
Other			(447)			(257)
Net cash used for investing activities			(8,749)			(8,485)
Cash Flows from Financing Activities
Net proceeds in short-term borrowings (original maturities three months or less)			4,008			3,852
Proceeds from borrowings issued (original maturities greater than three months)			15,429			10,358
Payments of borrowings (original maturities greater than three months)			(7,913)			(8,445)
Repurchases of common stock			(7,216)			(3,597)
Dividends paid			(1,427)			(1,313)
Other			(73)			(29)
Net cash provided by financing activities			2,808			826
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			31			(224)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			2,679			(3,184)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year			4,941			8,125
Cash, Cash Equivalents, and Restricted Cash at End of Year		$	7,620		$	4,941

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY
Condensed Notes to Consolidated Financial Statements
(In millions of dollars) Unaudited
(1)	Special Items
	2023
	In the fourth quarter of 2023, the company sold its Russian roadbuilding business, recognizing a loss of $18 million (pretax and after-tax). The loss was recorded in "Other operating expenses" in the construction and forestry segment.
	In the third quarter of 2023, a favorable tax ruling in Brazil allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.
	In the second quarter of 2023, the company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023. Prior period results for Deere & Company were not restated, as the adjustment is considered immaterial to the company's financial statements.
	2022
	In the second quarter of 2022, the company acquired full ownership of three former Deere-Hitachi joint venture factories. The remeasurement of the previously held equity investment resulted in a non-cash gain of $326 million (pretax and after-tax).
	In the second quarter of 2022, the company suspended shipments of machines and service parts to Russia. As a result, the company impaired its long-lived assets, increased reserves of certain financial assets, introduced an employee voluntary-separation program, and recorded an accrual for various contractual uncertainties. In the fourth quarter of 2022, the company increased its reserves for credit losses, reflecting further economic uncertainty in Russia. The financial services received an intercompany benefit from the equipment operations, which guarantees the financial services' investment in certain international markets, including Russia.
	In the first quarter of 2022, the company had a one-time payment related to the ratification of the UAW collective bargaining agreement, totaling $90 million.
	The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and fiscal years ended October 29, 2023 and October 30, 2022:

		Three Months															Fiscal Years
		PPA			SAT			CF			FS			Total			PPA			SAT			CF			FS			Total
2023 Expense:
Russian roadbuilding sale – Other operating expense								$	18					$	18								$	18					$	18
Financing incentive – SA&G expense																										$	173			173
Total expense									18						18									18			173			191
2022 Expense (benefit):
Gain on remeasurement of equity investment – Other income																								(326)						(326)
Total Russia/Ukraine events expense		$	70		$	8			50						128		$	133		$	11			110			1			255
UAW ratification bonus – Cost of sales																		53			9			28						90
Total expense (benefit)			70			8			50						128			186			20			(188)			1			19
Period over period change		$	(70)		$	(8)		$	(32)					$	(110)		$	(186)		$	(20)		$	206		$	172		$	172

(2)

The consolidated financial statements represent the consolidation of all Deere & Company's subsidiaries. The supplemental consolidating data is presented for informational purposes. Transactions between the Equipment Operations and Financial Services have been eliminated to arrive at the consolidated financial statements. In the supplemental consolidating data in Note 3 to the financial statements, the "Equipment Operations" represents the enterprise without "Financial Services", which include the company's production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within "Financial Services."

DEERE & COMPANY (3) SUPPLEMENTAL CONSOLIDATING DATA STATEMENTS OF INCOME For the Three Months Ended October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2023			2022			2023			2022			2023			2022			2023			2022
Net Sales and Revenues
Net sales		$	13,801		$	14,351														$	13,801		$	14,351
Finance and interest income			193			83		$	1,445		$	1,003		$	(281)		$	(161)			1,357			925		^1
Other income			218			233			121			231			(85)			(204)			254			260		^2, 3
Total			14,212			14,667			1,566			1,234			(366)			(365)			15,412			15,536
Costs and Expenses
Cost of sales			9,433			10,215									(6)			(1)			9,427			10,214		^4
Research and development expenses			606			576															606			576
Selling, administrative and general expenses			980			922			225			272			(2)			(2)			1,203			1,192		^4
Interest expense			114			93			757			306			(90)			(51)			781			348		^1
Interest compensation to Financial Services			191			110									(191)			(110)								^1
Other operating expenses			45			163			354			358			(77)			(201)			322			320		^5, 6
Total			11,369			12,079			1,336			936			(366)			(365)			12,339			12,650
Income before Income Taxes			2,843			2,588			230			298									3,073			2,886
Provision for income taxes			665			576			42			67									707			643
Income after Income Taxes			2,178			2,012			188			231									2,366			2,243
Equity in income of unconsolidated affiliates									2			1									2			1
Net Income			2,178			2,012			190			232									2,368			2,244
Less: Net loss attributable to noncontrolling interests			(1)			(2)															(1)			(2)
Net Income Attributable to Deere & Company		$	2,179		$	2,014		$	190		$	232								$	2,369		$	2,246

^1	Elimination of intercompany interest income and expense.
^2	Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.
^3	Elimination of Financial Services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues.
^4	Elimination of intercompany service fees.
^5	Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.
^6	Elimination of Equipment Operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENTS OF INCOME For the Years Ended October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2023			2022			2023			2022			2023			2022			2023			2022
Net Sales and Revenues
Net sales		$	55,565		$	47,917														$	55,565		$	47,917
Finance and interest income			636			213		$	5,055		$	3,583		$	(1,008)		$	(431)			4,683			3,365		^1
Other income			858			1,261			499			502			(354)			(468)			1,003			1,295		^2, 3
Total			57,059			49,391			5,554			4,085			(1,362)			(899)			61,251			52,577
Costs and Expenses
Cost of sales			37,739			35,341									(24)			(3)			37,715			35,338		^4
Research and development expenses			2,177			1,912															2,177			1,912
Selling, administrative and general expenses			3,611			3,137			994			735			(10)			(9)			4,595			3,863		^4
Interest expense			411			390			2,362			799			(320)			(127)			2,453			1,062		^1
Interest compensation to Financial Services			687			299									(687)			(299)								^1
Other operating expenses			217			350			1,396			1,386			(321)			(461)			1,292			1,275		^5, 6
Total			44,842			41,429			4,752			2,920			(1,362)			(899)			48,232			43,450
Income before Income Taxes			12,217			7,962			802			1,165									13,019			9,127
Provision for income taxes			2,685			1,718			186			289									2,871			2,007
Income after Income Taxes			9,532			6,244			616			876									10,148			7,120
Equity in income of unconsolidated affiliates			4			6			3			4									7			10
Net Income			9,536			6,250			619			880									10,155			7,130
Less: Net loss attributable to noncontrolling interests			(11)			(1)															(11)			(1)
Net Income Attributable to Deere & Company		$	9,547		$	6,251		$	619		$	880								$	10,166		$	7,131

^1	Elimination of intercompany interest income and expense.
^2	Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.
^3	Elimination of Financial Services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenues.
^4	Elimination of intercompany service fees.
^5	Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.
^6	Elimination of Equipment Operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) CONDENSED BALANCE SHEETS As of October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
	EQUIPMENT						FINANCIAL
	OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
	2023			2022			2023			2022			2023			2022			2023			2022
Assets
Cash and cash equivalents	$	5,720		$	3,767		$	1,738		$	1,007								$	7,458		$	4,774
Marketable securities		104			61			842			673									946			734
Receivables from Financial Services		4,516			6,569								$	(4,516)		$	(6,569)								^7
Trade accounts and notes receivable – net		1,320			1,273			8,687			6,434			(2,268)			(1,297)			7,739			6,410		^8
Financing receivables – net		64			47			43,609			36,587									43,673			36,634
Financing receivables securitized – net								7,335			5,936									7,335			5,936
Other receivables		1,813			1,670			869			832			(59)			(10)			2,623			2,492		^8
Equipment on operating leases – net								6,917			6,623									6,917			6,623
Inventories		8,160			8,495															8,160			8,495
Property and equipment – net		6,843			6,021			36			35									6,879			6,056
Goodwill		3,900			3,687															3,900			3,687
Other intangible assets – net		1,133			1,218															1,133			1,218
Retirement benefits		2,936			3,666			72			66			(1)			(2)			3,007			3,730		^9
Deferred income taxes		2,133			940			68			45			(387)			(161)			1,814			824		^10
Other assets		1,948			1,794			559			626			(4)			(3)			2,503			2,417
Total Assets	$	40,590		$	39,208		$	70,732		$	58,864		$	(7,235)		$	(8,042)		$	104,087		$	90,030
Liabilities and Stockholders' Equity
Liabilities
Short-term borrowings	$	1,230		$	1,040		$	16,709		$	11,552								$	17,939		$	12,592
Short-term securitization borrowings								6,995			5,711									6,995			5,711
Payables to Equipment Operations								4,516			6,569		$	(4,516)		$	(6,569)								^7
Accounts payable and accrued expenses		14,862			12,962			3,599			3,170			(2,331)			(1,310)			16,130			14,822		^8
Deferred income taxes		452			380			455			276			(387)			(161)			520			495		^10
Long-term borrowings		7,210			7,917			31,267			25,679									38,477			33,596
Retirement benefits and other liabilities		2,032			2,351			109			108			(1)			(2)			2,140			2,457		^9
Total liabilities		25,786			24,650			63,650			53,065			(7,235)			(8,042)			82,201			69,673
Redeemable noncontrolling interest		97			92															97			92
Stockholders' Equity
Total Deere & Company stockholders' equity		21,785			20,262			7,082			5,799			(7,082)			(5,799)			21,785			20,262		^11
Noncontrolling interests		4			3															4			3
Financial Services equity		(7,082)			(5,799)									7,082			5,799								^11
Adjusted total stockholders' equity		14,707			14,466			7,082			5,799									21,789			20,265
Total Liabilities and Stockholders' Equity	$	40,590		$	39,208		$	70,732		$	58,864		$	(7,235)		$	(8,042)		$	104,087		$	90,030

^7	Elimination of receivables / payables between Equipment Operations and Financial Services.
^8	Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.
^9	Reclassification of net pension assets / liabilities.
^10	Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
^11	Elimination of Financial Services' equity.

DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENTS OF CASH FLOWS For the Years Ended October 29, 2023 and October 30, 2022 (In millions of dollars) Unaudited
		EQUIPMENT						FINANCIAL
		OPERATIONS						SERVICES						ELIMINATIONS						CONSOLIDATED
		2023			2022			2023			2022			2023			2022			2023			2022
Cash Flows from Operating Activities
Net income		$	9,536		$	6,250		$	619		$	880								$	10,155		$	7,130
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses			7			3			(23)			189									(16)			192
Provision (credit) for depreciation and amortization			1,123			1,041			1,016			1,050		$	(135)		$	(196)			2,004			1,895		^12
Impairments and other adjustments			18			88			173												191			88
Share-based compensation expense															130			85			130			85		^13
Gain on remeasurement of previously held equity investment						(326)																		(326)
Distributed earnings of Financial Services			215			444									(215)			(444)								^14
Provision (credit) for deferred income taxes			(959)			8			169			(74)									(790)			(66)
Changes in assets and liabilities:
Receivables related to sales			(58)			(189)									(4,195)			(2,294)			(4,253)			(2,483)		^15, 17, 18
Inventories			474			(1,924)									(195)			(167)			279			(2,091)		^16
Accounts payable and accrued expenses			1,352			1,444			449			143			(971)			(454)			830			1,133		^17
Accrued income taxes payable/receivable			8			166			(31)			(25)									(23)			141
Retirement benefits			(164)			(1,016)			(6)			1									(170)			(1,015)
Other			367			250			(51)			(287)			(64)			53			252			16		^12, 13, 16
Net cash provided by operating activities			11,919			6,239			2,315			1,877			(5,645)			(3,417)			8,589			4,699
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)									24,128			22,400			(1,077)			(1,493)			23,051			20,907		^15
Proceeds from sales of equipment on operating leases									1,981			2,093									1,981			2,093
Cost of receivables acquired (excluding receivables related to sales)									(29,229)			(26,903)			457			603			(28,772)			(26,300)		^15
Acquisitions of businesses, net of cash acquired			(82)			(498)															(82)			(498)
Purchases of property and equipment			(1,494)			(1,131)			(4)			(3)									(1,498)			(1,134)
Cost of equipment on operating leases acquired									(3,234)			(2,879)			264			225			(2,970)			(2,654)		^16
Increase (decrease) in investment in Financial Services			(870)			7									870			(7)								^19
Increase in trade and wholesale receivables									(5,783)			(3,601)			5,783			3,601								^15
Collateral on derivatives – net			(1)			5			(11)			(647)									(12)			(642)
Other			(290)			(213)			(160)			(81)			3			37			(447)			(257)		^18
Net cash used for investing activities			(2,737)			(1,830)			(12,312)			(9,621)			6,300			2,966			(8,749)			(8,485)
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)			(113)			136			4,121			3,716									4,008			3,852
Change in intercompany receivables/payables			2,090			(1,633)			(2,090)			1,633
Proceeds from borrowings issued (original maturities greater than three months)			342			138			15,087			10,220									15,429			10,358
Payments of borrowings (original maturities greater than three months)			(901)			(1,356)			(7,012)			(7,089)									(7,913)			(8,445)
Repurchases of common stock			(7,216)			(3,597)															(7,216)			(3,597)
Capital investment from Equipment Operations									870			(7)			(870)			7								^19
Dividends paid			(1,427)			(1,313)			(215)			(444)			215			444			(1,427)			(1,313)		^14
Other			(7)			6			(66)			(35)									(73)			(29)
Net cash provided by (used for) financing activities			(7,232)			(7,619)			10,695			7,994			(655)			451			2,808			826
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash			24			(209)			7			(15)									31			(224)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			1,974			(3,419)			705			235									2,679			(3,184)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year			3,781			7,200			1,160			925									4,941			8,125
Cash, Cash Equivalents, and Restricted Cash at End of Year		$	5,755		$	3,781		$	1,865		$	1,160								$	7,620		$	4,941

^12	Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
^13	Reclassification of share-based compensation expense.
^14	Elimination of dividends from Financial Services to the Equipment Operations, which are included in the Equipment Operations operating activities.
^15	Primarily reclassification of receivables related to the sale of equipment.
^16	Reclassification of direct lease agreements with retail customers.
^17	Reclassification of sales incentive accruals on receivables sold to Financial Services.
^18	Elimination and reclassification of the effects of Financial Services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.
^19	Elimination of investment from Equipment Operations to Financial Services.

DEERE & COMPANY
OTHER FINANCIAL INFORMATION

The company evaluates its business results on the basis of accounting principles generally accepted in the United States. In addition, it uses a metric referred to as Shareholder Value Added (SVA), which management believes is an appropriate measure for the performance of its businesses. SVA is, in effect, the pretax profit left over after subtracting the cost of enterprise capital. The company is aiming for a sustained creation of SVA and is using this metric for various performance goals. Certain compensation is also determined on the basis of performance using this measure. For purposes of determining SVA, each of the equipment segments is assessed a pretax cost of assets, which on an annual basis is approximately 12 percent of the segment's average identifiable operating assets during the applicable period with inventory at standard cost. Management believes that valuing inventories at standard cost more closely approximates the current cost of inventory and the company's investment in the asset. The Financial Services segment is assessed an annual pretax cost of approximately 13 percent of the segment's average equity. The cost of assets or equity, as applicable, is deducted from the operating profit or added to the operating loss of each segment to determine the amount of SVA.

		Equipment						Production &						Small Ag						Construction
For the Years Ended		Operations						Precision Ag						& Turf						& Forestry
		Oct 29			Oct 30			Oct 29			Oct 30			Oct 29			Oct 30			Oct 29			Oct 30
Dollars in Millions		2023			2022			2023			2022			2023			2022			2023			2022
Net Sales		$	55,565		$	47,917		$	26,790		$	22,002		$	13,980		$	13,381		$	14,795		$	12,534
Average Identifiable Assets
With Inventories as Reported		$	21,114		$	19,420		$	9,256		$	8,336		$	4,601		$	4,349		$	7,257		$	6,735
With Inventories at Standard Cost			23,186			20,983			10,343			9,118			5,149			4,795			7,694			7,070
Operating Profit		$	12,163		$	8,349		$	6,996		$	4,386		$	2,472		$	1,949		$	2,695		$	2,014
Percent of Net Sales			21.9	%		17.4	%		26.1	%		19.9	%		17.7	%		14.6	%		18.2	%		16.1	%
Operating Return on Assets
With Inventories as Reported			57.6	%		43.0	%		75.6	%		52.6	%		53.7	%		44.8	%		37.1	%		29.9	%
With Inventories at Standard Cost			52.5	%		39.8	%		67.6	%		48.1	%		48.0	%		40.6	%		35.0	%		28.5	%
SVA Cost of Assets		$	(2,782)		$	(2,519)		$	(1,241)		$	(1,094)		$	(618)		$	(576)		$	(923)		$	(849)
SVA			9,381			5,830			5,755			3,292			1,854			1,373			1,772			1,165
		Financial
For the Years Ended		Services
		Oct 29			Oct 30
Dollars in Millions			2023			2022
Net Income Attributable to Deere & Company		$	619		$	880
Average Equity			6,588			5,725
Return on Equity			9.4	%		15.4	%
Operating Profit		$	795		$	1,159
Cost of Equity			(858)			(760)
SVA			(63)			399

SOURCE John Deere Company

Jen Hartmann, Director, Public Relations, [email protected]