10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 29, 2018

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file no: 1-4121

DEERE  &  COMPANY

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation) 36-2382580
(IRS employer identification no.)

One John Deere Place

Moline, Illinois 61265

(Address of principal executive offices)

Telephone Number:  (309) 765-8000

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    X    No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes    X    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	X	Accelerated filer
Non-accelerated filer	(Do not check if a smaller reporting company)	Smaller reporting company
		Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  No    X   

At April 29, 2018, 324,284,554 shares of common stock, $1 par value, of the registrant were outstanding.

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars and shares except per share amounts) Unaudited
	2018		2017
Net Sales and Revenues
Net sales	$	9,747.0	$	7,259.8
Finance and interest income		753.9		665.0
Other income		219.1		362.2
Total		10,720.0		8,287.0
Costs and Expenses
Cost of sales		7,333.3		5,427.7
Research and development expenses		415.2		325.4
Selling, administrative and general expenses		939.2		783.6
Interest expense		303.7		226.9
Other operating expenses		344.9		354.1
Total		9,336.3		7,117.7
Income of Consolidated Group before Income Taxes		1,383.7		1,169.3
Provision for income taxes		177.1		365.8
Income of Consolidated Group		1,206.6		803.5
Equity in income of unconsolidated affiliates		3.1		4.8
Net Income		1,209.7		808.3
Less: Net income (loss) attributable to noncontrolling interests		1.4		(.2)
Net Income Attributable to Deere & Company	$	1,208.3	$	808.5
Per Share Data
Basic	$	3.73	$	2.53
Diluted	$	3.67	$	2.50
Average Shares Outstanding
Basic		324.2		319.2
Diluted		329.2		323.0

See Condensed Notes to Interim Consolidated Financial Statements.

2

DEERE & COMPANY
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
For the Three Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited
	2018		2017
Net Income	$	1,209.7	$	808.3
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment		118.9		33.6
Cumulative translation adjustment		1.6		16.7
Unrealized gain on derivatives		4.9
Unrealized gain (loss) on investments		(9.3)		58.7
Other Comprehensive Income (Loss), Net of Income Taxes		116.1		109.0
Comprehensive Income of Consolidated Group		1,325.8		917.3
Less: Comprehensive income (loss) attributable to noncontrolling interests		1.7		(.2)
Comprehensive Income Attributable to Deere & Company	$	1,324.1	$	917.5

See Condensed Notes to Interim Consolidated Financial Statements.

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DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars and shares except per share amounts) Unaudited
	2018		2017
Net Sales and Revenues
Net sales	$	15,721.0	$	11,957.7
Finance and interest income		1,476.8		1,320.5
Other income		435.7		634.0
Total		17,633.5		13,912.2
Costs and Expenses
Cost of sales		12,037.8		9,209.2
Research and development expenses		772.0		637.5
Selling, administrative and general expenses		1,644.3		1,451.0
Interest expense		590.0		434.9
Other operating expenses		687.8		682.3
Total		15,731.9		12,414.9
Income of Consolidated Group before Income Taxes		1,901.6		1,497.3
Provision for income taxes		1,234.7		495.1
Income of Consolidated Group		666.9		1,002.2
Equity in income of unconsolidated affiliates		8.0		4.5
Net Income		674.9		1,006.7
Less: Net income (loss) attributable to noncontrolling interests		1.7		(.8)
Net Income Attributable to Deere & Company	$	673.2	$	1,007.5
Per Share Data
Basic	$	2.08	$	3.17
Diluted	$	2.05	$	3.14
Average Shares Outstanding
Basic		323.4		317.9
Diluted		328.4		321.3

See Condensed Notes to Interim Consolidated Financial Statements.

4

DEERE & COMPANY
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited
	2018		2017
Net Income	$	674.9	$	1,006.7
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment		165.2		76.6
Cumulative translation adjustment		224.9		(1.0)
Unrealized gain on derivatives		10.3		2.0
Unrealized gain (loss) on investments		(9.5)		52.9
Other Comprehensive Income (Loss), Net of Income Taxes		390.9		130.5
Comprehensive Income of Consolidated Group		1,065.8		1,137.2
Less: Comprehensive income (loss) attributable to noncontrolling interests		2.1		(.8)
Comprehensive Income Attributable to Deere & Company	$	1,063.7	$	1,138.0

See Condensed Notes to Interim Consolidated Financial Statements.

5

DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited
	April 29		October 29		April 30
	2018		2017		2017
Assets
Cash and cash equivalents	$	4,201.4	$	9,334.9	$	4,525.8
Marketable securities		479.3		451.6		546.3
Receivables from unconsolidated affiliates		34.3		35.9		34.9
Trade accounts and notes receivable – net		6,511.1		3,924.9		4,482.3
Financing receivables – net		24,275.5		25,104.1		23,301.1
Financing receivables securitized – net		4,436.3		4,158.8		4,281.8
Other receivables		1,398.2		1,200.0		931.3
Equipment on operating leases – net		6,723.1		6,593.7		5,923.9
Inventories		6,888.9		3,904.1		4,114.8
Property and equipment – net		5,742.9		5,067.7		4,959.9
Investments in unconsolidated affiliates		202.1		182.5		215.7
Goodwill		3,188.7		1,033.3		806.2
Other intangible assets – net		1,692.2		218.0		90.8
Retirement benefits		617.9		538.2		176.2
Deferred income taxes		1,718.5		2,415.0		3,041.9
Other assets		1,762.6		1,623.6		1,535.9
Total Assets	$	69,873.0	$	65,786.3	$	58,968.8
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	10,894.6	$	10,035.3	$	7,963.6
Short-term securitization borrowings		4,401.1		4,118.7		4,224.6
Payables to unconsolidated affiliates		145.7		121.9		101.6
Accounts payable and accrued expenses		9,789.6		8,417.0		7,215.9
Deferred income taxes		562.7		209.7		169.0
Long-term borrowings		26,278.6		25,891.3		23,253.1
Retirement benefits and other liabilities		7,366.1		7,417.9		8,333.2
Total liabilities		59,438.4		56,211.8		51,261.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest		14.6		14.0		14.0
Stockholders’ Equity
Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204)		4,423.4		4,280.5		4,165.4
Common stock in treasury		(15,425.9)		(15,460.8)		(15,521.0)
Retained earnings		25,586.0		25,301.3		24,535.8
Accumulated other comprehensive income (loss)		(4,173.2)		(4,563.7)		(5,495.5)
Total Deere & Company stockholders’ equity		10,410.3		9,557.3		7,684.7
Noncontrolling interests		9.7		3.2		9.1
Total stockholders’ equity		10,420.0		9,560.5		7,693.8
Total Liabilities and Stockholders’ Equity	$	69,873.0	$	65,786.3	$	58,968.8

See Condensed Notes to Interim Consolidated Financial Statements.

6

DEERE & COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited
	2018		2017
Cash Flows from Operating Activities
Net income	$	674.9	$	1,006.7
Adjustments to reconcile net income to net cash used for operating activities:
Provision for credit losses		26.8		32.6
Provision for depreciation and amortization		950.8		843.1
Share-based compensation expense		39.8		32.3
Gain on sale of affiliates and investments		(13.2)		(281.4)
Undistributed earnings of unconsolidated affiliates		(4.5)		(3.1)
Provision (credit) for deferred income taxes		604.3		(100.4)
Changes in assets and liabilities:
Trade, notes and financing receivables related to sales		(2,094.1)		(989.5)
Inventories		(1,796.8)		(1,090.4)
Accounts payable and accrued expenses		306.9		103.6
Accrued income taxes payable/receivable		153.0		195.1
Retirement benefits		67.6		115.6
Other		(137.2)		(27.9)
Net cash used for operating activities		(1,221.7)		(163.7)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)		8,780.9		8,228.0
Proceeds from maturities and sales of marketable securities		23.8		41.3
Proceeds from sales of equipment on operating leases		748.6		786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold		55.0		113.9
Cost of receivables acquired (excluding receivables related to sales)		(8,181.2)		(7,628.6)
Acquisitions of businesses, net of cash acquired		(5,171.1)
Purchases of marketable securities		(62.8)		(43.7)
Purchases of property and equipment		(352.2)		(253.0)
Cost of equipment on operating leases acquired		(926.5)		(925.1)
Other		(67.5)		(18.7)
Net cash provided by (used for) investing activities		(5,153.0)		300.5
Cash Flows from Financing Activities
Increase in total short-term borrowings		199.1		183.1
Proceeds from long-term borrowings		4,077.7		2,661.6
Payments of long-term borrowings		(2,888.7)		(2,742.2)
Proceeds from issuance of common stock		198.6		383.6
Repurchases of common stock		(60.6)		(6.2)
Dividends paid		(386.9)		(379.5)
Other		(43.9)		(39.7)
Net cash provided by financing activities		1,095.3		60.7
Effect of Exchange Rate Changes on Cash and Cash Equivalents		145.9		(7.5)
Net Increase (Decrease) in Cash and Cash Equivalents		(5,133.5)		190.0
Cash and Cash Equivalents at Beginning of Period		9,334.9		4,335.8
Cash and Cash Equivalents at End of Period	$	4,201.4	$	4,525.8

See Condensed Notes to Interim Consolidated Financial Statements.

7

DEERE & COMPANY
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited
			Total Stockholders’ Equity
			Deere & Company Stockholders
									Accumulated
	Total								Other				Redeemable
	Stockholders’		Common		Treasury		Retained		Comprehensive		Noncontrolling		Noncontrolling
	Equity		Stock		Stock		Earnings		Income (Loss)		Interests		Interest
Balance October 30, 2016	$	6,530.8	$	3,911.8	$	(15,677.1)	$	23,911.3	$	(5,626.0)	$	10.8	$	14.0
Net income (loss)		1,006.7						1,007.5				(.8)
Other comprehensive income		130.5								130.5
Repurchases of common stock		(6.2)				(6.2)
Treasury shares reissued		162.3				162.3
Dividends declared		(383.6)						(382.9)				(.7)
Stock options and other		253.3		253.6				(.1)				(.2)
Balance April 30, 2017	$	7,693.8	$	4,165.4	$	(15,521.0)	$	24,535.8	$	(5,495.5)	$	9.1	$	14.0
Balance October 29, 2017	$	9,560.5	$	4,280.5	$	(15,460.8)	$	25,301.3	$	(4,563.7)	$	3.2	$	14.0
Net income		674.3						673.2				1.1		.6
Other comprehensive income		390.9								390.5		.4
Repurchases of common stock		(60.6)				(60.6)
Treasury shares reissued		95.5				95.5
Dividends declared		(392.2)						(389.5)				(2.7)
Acquisitions (Note 18)		7.5										7.5
Stock options and other		144.1		142.9				1.0				.2
Balance April 29, 2018	$	10,420.0	$	4,423.4	$	(15,425.9)	$	25,586.0	$	(4,173.2)	$	9.7	$	14.6

See Condensed Notes to Interim Consolidated Financial Statements.

8

Condensed Notes to Interim Consolidated Financial Statements (Unaudited)

(1)  The information in the notes and related commentary are presented in a format which includes data grouped as follows:

Equipment Operations – Includes the Company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis. On December 1, 2017, the Company acquired the stock and certain assets of substantially all of the business of Wirtgen Group Holding GmbH (Wirtgen). Wirtgen results are included in the construction and forestry operations (see Note 18).

Financial Services – Includes primarily the Company’s financing operations.

Consolidated – Represents the consolidation of the equipment operations and financial services. References to "Deere & Company" or "the Company" refer to the entire enterprise.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2018 and 2017 were April 29, 2018 and April 30, 2017, respectively. Both periods contained 13 weeks.

(2)  The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

Cash Flow Information

All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities.

The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $357 million and $319 million in the first six months of 2018 and 2017, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $42 million and $32 million at April 29, 2018 and April 30, 2017, respectively.

(3)  New accounting standards adopted are as follows:

In the first quarter of 2018, the Company early adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends Accounting Standards Codification (ASC) 715, Compensation – Retirement Benefits. This ASU required that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of operating profit in the income statement line other operating expenses. The ASU was adopted on a retrospective basis that increased operating profit in the second quarter and first six months of 2018 by $4 million and $12 million, respectively, and second quarter and first six months of 2017 by $7 million and $14 million, respectively. The income statement line changes for the second quarter and first six months of 2017 were cost of sales decreased $17 million and $32 million, research and development expenses increased $1 million and $2 million, selling, administrative and general expenses increased $9

9

million and $16 million, and other operating expenses increased $7 million and $14 million, respectively. In addition, only the service cost component of the benefit costs is eligible for capitalization, which was adopted beginning the first quarter of 2018.

In the third quarter of 2017, the Company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU changes the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting, instead of common stock. As required, this change was reflected for all periods in fiscal year 2017. Net income increased in the second quarter and first six months of fiscal year 2017 by approximately $6 million and $11 million, respectively. The ASU also modified the presentation of excess tax benefits in the statement of consolidated cash flows by including that amount with other income tax cash flows as an operating activity and no longer presented separately as a financing activity. This change was recognized through a retrospective application that increased net cash flow provided by operating activities by approximately $11 million for the first six months of fiscal year 2017. The ASU also requires that cash paid by an employer when directly withholding shares for tax withholding purposes should be presented as a financing activity in the statement of consolidated cash flows, which is the Company’s existing presentation. The Company will continue to recognize the impact of share-based payment award forfeitures as the forfeitures occur.

In the first quarter of 2018, the Company adopted ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments – Equity Method and Joint Ventures, which did not have a material effect on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which amends ASC 740, Income Taxes. In December 2017, the U.S. government enacted new tax legislation (tax reform). This ASU incorporates SEC Staff Accounting Bulletin No. 118, which was also issued in December 2017, into the ASC. The ASU provides guidance on when to record and disclose provisional amounts related to tax reform. In addition, the ASU allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements and was effective when issued. The Company will complete the adjustments related to tax reform within the allowed period. The effects of tax reform on the Company’s consolidated financial statements are outlined in Note 8.

New accounting standards to be adopted are as follows:

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The Company will adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The Company’s evaluation of the ASU is largely complete, with the exception of the Wirtgen acquisition (see Note 18). The ASU requires that a gross asset and liability rather than a net liability be recorded for the value of estimated service parts returns and the related refund liability. The gross asset will be recorded in other assets and the gross liability will be recorded in accounts payable and accrued expenses. In addition, certain revenue disclosures will be expanded. At this point of the evaluation, the Company has not identified an item that will have a material effect on the Company’s consolidated financial statements. The Company continues to evaluate the ASU’s potential effects on the consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments - Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in Other Comprehensive Income (OCI). The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements.

10

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU currently requires that lessees and lessors use a modified retrospective transition approach. In January 2018, the FASB issued an exposure draft to provide for an adoption option that would not require earlier periods to be restated at the adoption date. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential adoption options and the effects on the consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs. This ASU reduces the amortization period for certain callable debt securities held at a premium to the earliest call date. The treatment of securities held at a discount is unchanged. The effective date is the first quarter of fiscal year 2020, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year

11

2019, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which amends ASC 220, Income Statement – Reporting Comprehensive Income. Included in the provisions of tax reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. Accounting principles generally accepted in the U.S. require that deferred taxes are remeasured to the new corporate tax rate in the period legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in OCI. This treatment results in the items in OCI not reflecting the appropriate tax rate, which are referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. The effective date is fiscal year 2020, with early adoption permitted, including in interim periods. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is evaluating the potential effects of the ASU on the consolidated financial statements.

(4)  The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow:

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Investments		Income (Loss)
Balance October 30, 2016	$	(4,409)	$	(1,229)	$	1	$	11	$	(5,626)
Other comprehensive income (loss) items before reclassification		(13)		(1)				165		151
Amounts reclassified from accumulated other comprehensive income		89				2		(112)		(21)
Net current period other comprehensive income (loss)		76		(1)		2		53		130
Balance April 30, 2017	$	(4,333)	$	(1,230)	$	3	$	64	$	(5,496)
Balance October 29, 2017	$	(3,580)	$	(999)	$	5	$	10	$	(4,564)
Other comprehensive income (loss) items before reclassification		81		225		11		(9)		308
Amounts reclassified from accumulated other comprehensive income		84				(1)				83
Net current period other comprehensive income (loss)		165		225		10		(9)		391
Balance April 29, 2018	$	(3,415)	$	(774)	$	15	$	1	$	(4,173)

12

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment			$	1	$	1
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)	$	7		(1)		6
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		6		(1)		5
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		39		(9)		30
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		54		(14)		40
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		15		(4)		11
Prior service (credit) cost		(19)		5		(14)
Net unrealized gain (loss) on retirement benefits adjustments		158		(39)		119
Total other comprehensive income (loss)	$	152	$	(36)	$	116

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

13

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment	$	225			$	225
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15	$	(4)		11
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		14		(4)		10
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		46		(11)		35
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		115		(34)		81
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		31		(9)		22
Prior service (credit) cost		(38)		11		(27)
Net unrealized gain (loss) on retirement benefits adjustments		226		(61)		165
Total other comprehensive income (loss)	$	453	$	(62)	$	391

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

14

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	17			$	17
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(4)	$	2		(2)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1		(1)
Foreign exchange contracts – Other operating expenses		3		(1)		2
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		269		(99)		170
Reclassification of realized (gain) loss – Other income		(176)		65		(111)
Net unrealized gain (loss) on investments		93		(34)		59
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(8)		3		(5)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		61		(22)		39
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		24		(9)		15
Prior service (credit) cost		(19)		7		(12)
Net unrealized gain (loss) on retirement benefits adjustments		52		(19)		33
Total other comprehensive income (loss)	$	162	$	(53)	$	109

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

In the second quarter of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $1.7 million and $(.2) million, respectively, which consisted of net income (loss) of $1.4 million and $(.2) million and cumulative translation adjustments of $.3 million and none, respectively.

15

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	(1)			$	(1)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1				1
Foreign exchange contracts – Other operating expenses		2	$	(1)		1
Net unrealized gain (loss) on derivatives		3		(1)		2
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		262		(97)		165
Reclassification of realized (gain) loss – Other income		(178)		66		(112)
Net unrealized gain (loss) on investments		84		(31)		53
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(9)		3		(6)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		121		(44)		77
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		49		(18)		31
Prior service (credit) cost		(38)		14		(24)
Net unrealized gain (loss) on retirement benefits adjustments		120		(44)		76
Total other comprehensive income (loss)	$	206	$	(76)	$	130

* These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail.

In the first six months of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $2.1 million and $(.8) million, respectively, which consisted of net income (loss) of $1.7 million and $(.8) million and cumulative translation adjustments of $.4 million and none, respectively.

(5)  Dividends declared and paid on a per share basis were as follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Dividends declared	$	.60	$	.60	$	1.20	$	1.20
Dividends paid	$	.60	$	.60	$	1.20	$	1.20

16

(6)  A  reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net income attributable to Deere & Company	$	1,208.3	$	808.5	$	673.2	$	1,007.5
Less income allocable to participating securities		.2		.2		.1		.3
Income allocable to common stock	$	1,208.1	$	808.3	$	673.1	$	1,007.2
Average shares outstanding		324.2		319.2		323.4		317.9
Basic per share	$	3.73	$	2.53	$	2.08	$	3.17
Average shares outstanding		324.2		319.2		323.4		317.9
Effect of dilutive share-based compensation		5.0		3.8		5.0		3.4
Total potential shares outstanding		329.2		323.0		328.4		321.3
Diluted per share	$	3.67	$	2.50	$	2.05	$	3.14

During the second quarter and first six months of 2018, .5 million shares and .3 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive. During the second quarter and first six months of 2017, .7 million shares and .5 million shares, respectively, were excluded in the above per share computation.

(7)  The Company has several defined benefit pension plans and defined postretirement health care and life insurance plans covering many of its U.S. employees and employees in certain foreign countries.

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	76	$	67	$	148	$	135
Interest cost		97		90		195		180
Expected return on plan assets		(194)		(197)		(388)		(394)
Amortization of actuarial loss		54		61		115		121
Amortization of prior service cost		3		3		6		6
Settlements/curtailments		6		1		6		1
Net cost	$	42	$	25	$	82	$	49

The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	11	$	11	$	22	$	21
Interest cost		48		49		96		98
Expected return on plan assets		(6)		(5)		(11)		(9)
Amortization of actuarial loss		15		24		31		49
Amortization of prior service credit		(19)		(19)		(38)		(38)
Net cost	$	49	$	60	$	100	$	121

The components of net periodic pension and postretirement benefits cost excluding the service cost component are included in the line item other operating expenses in the Statement of Consolidated Income.

In the second quarter, a committee of the Company’s Board of Directors approved a voluntary $1,000 million contribution to its U.S. pension and postretirement benefit plans. During the first six months of 2018, the Company contributed approximately $86 million to its pension plans, which included a $50 million voluntary contribution to a U.S. plan, and $31 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $851 million to its pension plans and $138 million to its other postretirement benefit plans during the remainder of fiscal year 2018. The anticipated total contributions

17

include voluntary contributions of $820 million to a U.S. pension plan and $130 million to a U.S. postretirement benefit plan, which will increase plan assets. The other contributions primarily include payments from Company funds to make direct payments to plan participants.

(8)  On December 22, 2017, the U.S. government enacted tax reform. The primary provisions of tax reform expected to impact the Company in fiscal year 2018 are a reduction to the corporate income tax rate from 35 percent to 21 percent and a transition from a worldwide corporate tax system to a territorial tax system. The reduction in the corporate income tax rate requires the Company to remeasure its net deferred tax assets to the new corporate tax rate and the transition to a territorial tax system requires payment of a one-time tax on deemed repatriation of undistributed and previously untaxed non-U.S. earnings. The Company currently plans to pay the deemed repatriation tax over an eight year period, as allowed by tax reform.

In December 2017, the SEC issued a staff accounting bulletin that allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements. The tax reform measurement period adjustments and the effects on the results of the second quarter and first six months of 2018 in millions of dollars follow:

	Three Months Ended April 29, 2018						Six Months Ended April 29, 2018
	Equipment Operations			Financial Services	Total		Equipment Operations			Financial Services	Total
Net deferred tax asset remeasurement	$	(158)	$	(19)	$	(177)	$	853	$	(314)	$	539
Deemed earnings repatriation tax		(49)		52		3		179		85		264
Total discrete tax expense (benefit)	$	(207)	$	33	$	(174)	$	1,032	$	(229)	$	803

The second quarter measurement period benefit on the net deferred tax assets primarily results from the planned, voluntary $1,000 million contribution to U.S. pension and other postretirement benefit plans, which results in a tax deduction applicable to the 2017 tax year. The Company received authorization for this contribution in the second quarter (see Note 7). The provision for income taxes was also affected by other tax reform items, primarily the lower corporate income tax rate on current year income.

The 21 percent corporate income tax rate is effective January 1, 2018. Based on the Company’s October fiscal year end, the U.S. statutory income tax rate for fiscal year 2018 will be approximately 23.3 percent.

The first six months of 2018 tax expense is provisional as outlined below and may change during the remaining measurement period. The Company completed a preliminary assessment of earnings that could be repatriated based on reinvestment needs of non-U.S. operations and earnings available for repatriation. The estimated withholding tax that would be incurred from the repatriation of those earnings is included in the first six months of 2018 provisional income tax expense. The Company continues to analyze the provisions of tax reform addressing the net deferred tax asset remeasurement and the calculations, and the deemed earnings repatriation tax, including the determination of undistributed non-U.S. earnings. In addition, the Company is evaluating actions, including repatriating additional non-U.S. earnings and other actions that could affect the Company’s 2017 U.S. taxable income. The Company also continues to prepare its 2017 U.S. income tax returns, undergo income tax audits, and monitor potential legislative action and regulatory interpretations of tax reform.

Based on the effective date of certain provisions, the Company will be subject to additional requirements of tax reform beginning in fiscal year 2019. Those provisions include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion and anti-abuse tax benefits (BEAT) from certain payments between a U.S. corporation and foreign subsidiaries, a limitation of certain executive compensation, a deduction for foreign derived intangible income (FDII), and interest expense limitations. The Company has not completed its analysis of those provisions and the estimated effects. The Company also has not determined its accounting policy to treat the taxes due on GILTI as a period cost or include them in the determination of deferred taxes.

18

The Company’s unrecognized tax benefits at April 29, 2018 were $421 million, compared to $221 million at October 29, 2017. The increase is primarily due to a review of the timing of deduction for certain U.S. expenses and the effect of a lower U.S. corporate tax rate. These positions remain under review. The liability at April 29, 2018, October 29, 2017, and April 30, 2017 consisted of approximately $157 million, $86 million, and $79 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. Based on the ongoing review of tax accounting methods affecting the timing of certain U.S. tax deductions, the Company believes a reduction of unrecognized tax benefits of approximately $160 million, with a positive impact on the effective tax rate of approximately $55 million, in the next 12 months is reasonably possible.

(9)  Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended					Six Months Ended
	April 29		April 30		%	April 29		April 30		%
	2018		2017		Change	2018		2017		Change
Net sales and revenues:
Agriculture and turf	$	7,049	$	5,794	+22	$	11,292	$	9,392	+20
Construction and forestry		2,698		1,466	+84		4,429		2,566	+73
Total net sales		9,747		7,260	+34		15,721		11,958	+31
Financial services		795		716	+11		1,572		1,412	+11
Other revenues		178		311	-43		340		542	-37
Total net sales and revenues	$	10,720	$	8,287	+29	$	17,633	$	13,912	+27
Operating profit: *
Agriculture and turf	$	1,056	$	1,009	+5	$	1,443	$	1,227	+18
Construction and forestry		259		111	+133		291		148	+97
Financial services		179		158	+13		396		325	+22
Total operating profit		1,494		1,278	+17		2,130		1,700	+25
Reconciling items **		(109)		(104)	+5		(222)		(198)	+12
Income taxes		(177)		(366)	-52		(1,235)		(495)	+149
Net income attributable to Deere & Company	$	1,208	$	808	+50	$	673	$	1,007	-33
Intersegment sales and revenues:
Agriculture and turf net sales	$	15	$	10	+50	$	24	$	17	+41
Construction and forestry net sales
Financial services		82		62	+32		145		111	+31
Equipment operations outside the U.S. and Canada:
Net sales	$	4,295	$	2,968	+45	$	6,804	$	4,860	+40
Operating profit		534		391	+37		680		467	+46

	April 29		October 29
	2018		2017
Identifiable assets:
Agriculture and turf	$	10,603	$	9,359	+13
Construction and forestry		10,471		3,212	+226
Financial services		44,278		42,596	+4
Corporate		4,521		10,619	-57
Total assets	$	69,873	$	65,786	+6

* 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 of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

19

(10)  Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	April 29, 2018
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	117	$	58	$	44	$	219
Construction and forestry		97		44		36		177
Other:
Agriculture and turf		32		16		28		76
Construction and forestry		11		4		2		17
Total	$	257	$	122	$	110	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	219	$	171	$	17,014	$	17,404
Construction and forestry		177		42		2,899		3,118
Other:
Agriculture and turf		76		16		7,072		7,164
Construction and forestry		17		4		1,192		1,213
Total	$	489	$	233	$	28,177		28,899
Less allowance for credit losses								187
Total financing receivables – net							$	28,712

20

	October 29, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	118	$	54	$	49	$	221
Construction and forestry		75		33		39		147
Other:
Agriculture and turf		27		14		7		48
Construction and forestry		11		6		2		19
Total	$	231	$	107	$	97	$	435
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	221	$	173	$	17,508	$	17,902
Construction and forestry		147		30		2,618		2,795
Other:
Agriculture and turf		48		12		7,610		7,670
Construction and forestry		19		5		1,059		1,083
Total	$	435	$	220	$	28,795		29,450
Less allowance for credit losses								187
Total financing receivables – net							$	29,263

	April 30, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	120	$	75	$	65	$	260
Construction and forestry		80		44		33		157
Other:
Agriculture and turf		37		12		27		76
Construction and forestry		12		4		2		18
Total	$	249	$	135	$	127	$	511
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	260	$	159	$	16,838	$	17,257
Construction and forestry		157		31		2,563		2,751
Other:
Agriculture and turf		76		10		6,692		6,778
Construction and forestry		18		4		952		974
Total	$	511	$	204	$	27,045		27,760
Less allowance for credit losses								177
Total financing receivables – net							$	27,583

21

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:

	Three Months Ended April 29, 2018
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	123	$	40	$	27	$	190
Provision		5		9		2		16
Write-offs		(7)		(15)		(1)		(23)
Recoveries		4		6				10
Translation adjustments		(5)				(1)		(6)
End of period balance *	$	120	$	40	$	27	$	187
	Six Months Ended April 29, 2018
Allowance:
Beginning of period balance	$	121	$	40	$	26	$	187
Provision		5		9		4		18
Write-offs		(14)		(20)		(3)		(37)
Recoveries		10		11				21
Translation adjustments		(2)						(2)
End of period balance *	$	120	$	40	$	27	$	187
Financing receivables:
End of period balance	$	20,522	$	3,205	$	5,172	$	28,899
Balance individually evaluated **	$	120	$	1	$	15	$	136

	Three Months Ended April 30, 2017
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	111	$	41	$	23	$	175
Provision		10		15		1		26
Write-offs		(15)		(18)		(1)		(34)
Recoveries		5		5				10
End of period balance *	$	111	$	43	$	23	$	177
	Six Months Ended April 30, 2017
Allowance:
Beginning of period balance	$	113	$	40	$	23	$	176
Provision		18		13		2		33
Write-offs		(27)		(20)		(3)		(50)
Recoveries		7		10		1		18
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	20,008	$	3,036	$	4,716	$	27,760
Balance individually evaluated **	$	148	$	4	$	17	$	169

* Individual allowances were not significant.

** Remainder is collectively evaluated.

22

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
April 29, 2018*
Receivables with specific allowance **	$	33	$	31	$	10	$	34
Receivables without a specific allowance **		41		40				43
Total	$	74	$	71	$	10	$	77
Agriculture and turf	$	52	$	51	$	9	$	54
Construction and forestry	$	22	$	20	$	1	$	23
October 29, 2017*
Receivables with specific allowance **	$	36	$	33	$	10	$	30
Receivables without a specific allowance ***		28		27				24
Total	$	64	$	60	$	10	$	54
Agriculture and turf	$	49	$	46	$	10	$	38
Construction and forestry	$	15	$	14			$	16
April 30, 2017*
Receivables with specific allowance **	$	23	$	22	$	9	$	26
Receivables without a specific allowance ***		27		24				28
Total	$	50	$	46	$	9	$	54
Agriculture and turf	$	28	$	26	$	8	$	32
Construction and forestry	$	22	$	20	$	1	$	22

*  Finance income recognized was not material.

** Primarily retail notes.

***Primarily retail notes and wholesale receivables.

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first six months of 2018, the Company identified 253 financing receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $13 million pre-modification and $13 million post-modification. During the first six months of 2017, there were 226 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $5 million pre-modification and $4 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 29, 2018, the Company had commitments to lend approximately $8 million to borrowers whose accounts were modified in troubled debt restructurings.

23

(11)  Securitization of financing receivables:

The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,489 million, $2,631 million, and $2,589 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,438 million, $2,571 million, and $2,522 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $686 million, $478 million, and $413 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $656 million, $454 million, and $390 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively.

In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,383 million, $1,155 million, and $1,395 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,310 million, $1,096 million, and $1,315 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively.

24

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	April 29, 2018
Carrying value of liabilities	$	1,310
Maximum exposure to loss		1,383

The total assets of unconsolidated VIEs related to securitizations were approximately $36 billion at April 29, 2018.

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Financing receivables securitized (retail notes)	$	4,450	$	4,172	$	4,295
Allowance for credit losses		(14)		(13)		(13)
Other assets		122		105		115
Total restricted securitized assets	$	4,558	$	4,264	$	4,397

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Short-term securitization borrowings	$	4,401	$	4,119	$	4,225
Accrued interest on borrowings		3		2		2
Total liabilities related to restricted securitized assets	$	4,404	$	4,121	$	4,227

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At April 29, 2018, the maximum remaining term of all securitized retail notes was approximately seven years.

(12)  Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows:

	April 29		October 29		April 30
	2018		2017		2017
Raw materials and supplies	$	2,231	$	1,688	$	1,559
Work-in-process		900		495		531
Finished goods and parts		5,208		3,182		3,421
Total FIFO value		8,339		5,365		5,511
Less adjustment to LIFO value		1,450		1,461		1,396
Inventories	$	6,889	$	3,904	$	4,115

25

(13)  The changes in amounts of goodwill by operating segments were as follows in millions of dollars:

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 30, 2016	$	323	$	493	$	816
Translation adjustments and other		(10)				(10)
Goodwill at April 30, 2017	$	313	$	493	$	806
Goodwill at October 29, 2017	$	521	$	512	$	1,033
Acquisitions *		25		2,060		2,085
Divestitures **				(10)		(10)
Translation adjustments		5		76		81
Goodwill at April 29, 2018	$	551	$	2,638	$	3,189

*  See Note 18.

** See Note 19.

There were no accumulated impairment losses in the reported periods.

The components of other intangible assets were as follows in millions of dollars:

	Useful Lives *	April 29		October 29		April 30
	(Years)	2018		2017		2017
Amortized intangible assets:
Customer lists and relationships	16	$	590	$	42	$	39
Technology, patents, trademarks, and other	18		1,109		139		129
Total at cost			1,699		181		168
Less accumulated amortization **			130		86		77
Total			1,569		95		91
Unamortized intangible assets:
In-process research and development			123		123
Other intangible assets – net		$	1,692	$	218	$	91

*  Weighted-averages

** Accumulated amortization at April 29, 2018, October 29, 2017, and April 30, 2017 for customer lists and relationships totaled $30 million, $17 million, and $15 million and technology, patents, trademarks, and other totaled $100 million, $69 million, and $62 million, respectively.

The amortization of other intangible assets in the second quarter and the first six months of 2018 was $31 million and $44 million and for 2017 was $4 million and $9 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2018 – $61, 2019 – $121, 2020 – $109, 2021 – $104, and 2022 – $104.

(14)  Commitments and contingencies:

The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments.

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $475 million and $444 million at April 29, 2018 and April 30, 2017, respectively.

26

A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	1,550	$	1,285	$	1,468	$	1,226
Payments		(213)		(167)		(430)		(332)
Amortization of premiums received		(57)		(54)		(113)		(97)
Accruals for warranties		260		238		453		470
Premiums received		65		55		126		95
Acquisitions *						80
Foreign exchange		(14)		8		7		3
End of period balance	$	1,591	$	1,365	$	1,591	$	1,365

*  See Note 18.

At April 29, 2018, the Company had approximately $447 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere and Wirtgen equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At April 29, 2018, the Company had accrued losses of approximately $16 million under these agreements. The maximum remaining term of the receivables guaranteed at April 29, 2018 was approximately eight years.

At April 29, 2018, the Company had commitments of approximately $328 million for the construction and acquisition of property and equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. Also, at April 29, 2018, the Company had restricted assets of $123 million, primarily as collateral for borrowings and restricted other assets. See Note 11 for additional restricted assets associated with borrowings related to securitizations.

The Company also had other miscellaneous contingent liabilities totaling approximately $85 million at April 29, 2018. The accrued liability for these contingencies was not material at April 29, 2018.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements.

(15)  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

27

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	April 29, 2018				October 29, 2017				April 30, 2017
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations **	$	76	$	74
Financial services		24,200		23,997	$	25,104	$	24,946	$	23,301	$	23,141
Total	$	24,276	$	24,071	$	25,104	$	24,946	$	23,301	$	23,141
Financing receivables securitized – net:
Equipment operations **	$	113	$	110
Financial services		4,323		4,273	$	4,159	$	4,130	$	4,282	$	4,253
Total	$	4,436	$	4,383	$	4,159	$	4,130	$	4,282	$	4,253
Short-term securitization borrowings:
Equipment operations **	$	113	$	113
Financial services		4,288		4,274	$	4,119	$	4,118	$	4,225	$	4,225
Total	$	4,401	$	4,387	$	4,119	$	4,118	$	4,225	$	4,225
Long-term borrowings due within one year:
Equipment operations **	$	274	$	273	$	154	$	154	$	120	$	119
Financial services		6,566		6,559		6,064		6,079		5,339		5,345
Total	$	6,840	$	6,832	$	6,218	$	6,233	$	5,459	$	5,464
Long-term borrowings:
Equipment operations **	$	5,537	$	5,850	$	5,491	$	6,026	$	4,520	$	5,020
Financial services		20,742		20,769		20,400		20,606		18,733		18,864
Total	$	26,279	$	26,619	$	25,891	$	26,632	$	23,253	$	23,884

*  Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** See Note 18.

Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts.

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. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges.

28

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow:

	April 29		October 29		April 30
	2018*		2017*		2017*
Marketable securities
Equity fund	$	46	$	48	$	135
Fixed income fund		14		15		15
U.S. government debt securities		86		77		79
Municipal debt securities		46		39		39
Corporate debt securities		137		135		132
International debt securities		17		20		28
Mortgage-backed securities **		133		118		118
Total marketable securities		479		452		546
Other assets
Derivatives:
Interest rate contracts		87		116		142
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		6		11		14
Total assets ***	$	673	$	687	$	762
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	341	$	131	$	79
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total liabilities	$	371	$	158	$	131

*  All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million, $48 million, and $135 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; the fixed income fund of $14 million, $15 million, and $15 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; and U.S. government debt securities of $42 million, $44 million, and $46 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. In addition, $14 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first six months of 2018 or 2017.

** Primarily issued by U.S. government sponsored enterprises.

***Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements.

The contractual maturities of debt securities at April 29, 2018 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	29	$	28
Due after one through five years		107		105
Due after five through 10 years		95		91
Due after 10 years		62		62
Mortgage-backed securities		139		133
Debt securities	$	432	$	419

29

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	15	$	23	$	17	$	28
Principal payments		(1)		(1)		(3)		(6)
Change in unrealized gain				1				1
End of period balance	$	14	$	23	$	14	$	23

Fair value,  nonrecurring Level 1 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended		Six Months Ended
	April 29	October 29		April 30	April 29	April 30	April 29	April 30
	2018	2017		2017	2018	2017	2018	2017
Investments in unconsolidated affiliates		$	28

* See financing receivables with specific allowances in Note 10. Losses were not significant.

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value:

Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data.

Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency futures, forwards and swaps, and cross-currency interest rate swaps. 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.

Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values.

Investment in Unconsolidated Affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value and the carrying value of the investments. The fair value for publicly traded entities is the share price multiplied by the shares owned.

(16)  It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

30

Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement.

Cash flow hedges

Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $1,800 million, $1,700 million, and $1,600 million, respectively. The total notional amounts of the cross-currency interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $11 million, $22 million, and $32 million, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in OCI and subsequently reclassified into interest expense or other operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense or other operating expenses (foreign exchange) and were not material during any periods presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of gain recorded in OCI at April 29, 2018 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $9 million after-tax. These contracts mature in up to 26 months. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair value hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $8,421 million, $8,661 million, and $7,605 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a loss of $2 million and none during the second quarter of 2018 and 2017, respectively, and a loss of $3 million and a gain of $2 million during the first six months of 2018 and 2017, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Interest rate contracts *	$	(123)	$	32	$	(271)	$	(202)
Borrowings **		121		(32)		268		204

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $5 million and $22 million during the second quarter of 2018 and 2017, respectively, and $17 million and $48 million during the first six months of 2018 and 2017, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64 million and $61 million during the second quarter of 2018 and 2017, respectively, and $127 million and $126 million during the first six months of 2018 and 2017, respectively.

Derivatives not designated as hedging instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings and purchases or sales of inventory. The total notional amounts of these interest rate swaps at April 29, 2018, October 29, 2017, and April 30, 2017 were $7,189 million, $6,757 million, and $5,783 million, the foreign exchange contracts were $6,791 million, $8,499 million, and $4,600 million, and the cross-currency interest rate contracts were $92 million, $66 million, and $76 million,

31

respectively. The increase in the total notional amounts of foreign exchange contracts at October 29, 2017 primarily relates to the Wirtgen acquisition (see Note 18). At April 29, 2018, October 29, 2017, and April 30, 2017, there were also $123 million, $253 million, and $366 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	April 29		October 29		April 30
Other Assets	2018		2017		2017
Designated as hedging instruments:
Interest rate contracts	$	34	$	74	$	116
Cross-currency interest rate contracts		3		5		7
Total designated		37		79		123
Not designated as hedging instruments:
Interest rate contracts		53		42		26
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		3		6		7
Total not designated		157		156		93
Total derivative assets	$	194	$	235	$	216
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	316	$	112	$	64
Total designated		316		112		64
Not designated as hedging instruments:
Interest rate contracts		25		19		15
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total not designated		55		46		67
Total derivative liabilities	$	371	$	158	$	131

32

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:

	Expense or	Three Months Ended				Six Months Ended
	OCI	April 29		April 30		April 29		April 30
	Classification	2018		2017		2018		2017
Fair Value Hedges:
Interest rate contracts	Interest	$	(118)	$	54	$	(254)	$	(154)
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *		6		(1)		14		2
Foreign exchange contracts	OCI (pretax) *		1		(3)		1		(2)
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *		1		(1)		1		(1)
Foreign exchange contracts	Other operating *				(3)				(2)
Recognized Directly in Income
(Ineffective Portion)			**		**		**		**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	(5)	$	(4)
Foreign exchange contracts	Cost of sales		36		28	$	(12)	$	(12)
Foreign exchange contracts	Other operating *		164		15		(52)		(13)
Total not designated		$	195	$	39	$	(64)	$	(25)

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

** The amounts are not significant.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination.

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company 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 April 29, 2018, October 29, 2017, and April 30, 2017, was $344 million, $132 million, and $81 million, respectively. In accordance with the limits established in these agreements, the Company posted $32 million in cash collateral at April 29, 2018. No cash collateral was posted or received at either October 29, 2017 or April 30, 2017.

33

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows:

	Gross Amounts		Netting		Cash Collateral
April 29, 2018	Recognized		Arrangements		Received/Paid		Net Amount
Assets	$	194	$	(74)			$	120
Liabilities		371		(74)	$	(32)		265

	Gross Amounts		Netting		Cash Collateral
October 29, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	235	$	(65)		$	170
Liabilities		158		(65)			93

	Gross Amounts		Netting		Cash Collateral
April 30, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	216	$	(54)		$	162
Liabilities		131		(54)			77

(17)  In December 2017, the Company granted stock options to employees for the purchase of 476 thousand shares of common stock at an exercise price of $151.95 per share and a binomial lattice model fair value of $39.11 per share at the grant date. At April 29, 2018, options for 9.1 million shares were outstanding with a weighted-average exercise price of $86.73 per share. The Company also granted 403 thousand restricted stock units to employees and non-employee directors in the first six months of 2018, of which 318 thousand are subject to service based only conditions and 85 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $152.07 per unit based on the market price of a share of underlying common stock. The weighted-average fair value of the performance/service based units at the grant date was $145.33 per unit based on the market price of a share of underlying common stock excluding dividends. At April 29, 2018, the Company was authorized to grant an additional 10.0 million shares related to stock option and restricted stock awards.

(18)  On December 1, 2017, the Company acquired Wirtgen, which was a privately-held international company and is the leading manufacturer worldwide of road construction equipment. Headquartered in Germany, Wirtgen has six brands across the road construction sector spanning processing, mixing, paving, compaction, and rehabilitation. Wirtgen sells products in more than 100 countries and had approximately 8,200 employees at the acquisition date.

The total cash purchase price, net of cash acquired of $197 million, was $5,130 million, a portion of which is held in escrow to secure certain indemnity obligations of Wirtgen. In addition to the cash purchase price, the Company assumed $1,717 million in liabilities, which represented substantially all of Wirtgen’s liabilities. The Company financed the acquisition and associated transaction expenses from a combination of cash and new debt financing, which consisted of medium-term notes, including €850 million issued in September 2017.

34

The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at April 29, 2018 follows:

Trade accounts and notes receivable	$	457
Financing receivables		43
Financing receivables securitized		125
Other receivables		100
Inventories		1,538
Property and equipment		757
Goodwill		2,060
Other intangible assets		1,458
Deferred income taxes		96
Other assets		221
Total assets	$	6,855
Short-term borrowings	$	285
Short-term securitization borrowings		127
Accounts payable and accrued expenses		725
Deferred income taxes		502
Long-term borrowings		50
Retirement benefits and other liabilities		28
Total liabilities	$	1,717
Noncontrolling interests	$	8

During the second quarter of 2018, measurement period adjustments decreased the total assets by $8 million, total liabilities by $7 million, and noncontrolling interests by $1 million. The Company continues to review the fair value of the assets and liabilities acquired, which may be updated during the measurement period.

The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows:

	Weighted-Average Useful Lives	Preliminary Fair Values
Customer lists and relationships	16	$	534
Technology, patents, trademarks, and other	19	$	924

The goodwill was the result of future cash flows and related fair value of Wirtgen exceeding the fair value of the identified assets and liabilities. The goodwill is not expected to be deductible for income tax purposes and is included in the construction and forestry segment.

Wirtgen’s results were included in the Company’s consolidated financial statements beginning on the acquisition date. The results are incorporated using a 30-day lag period and are included in the construction and forestry segment. The net sales and revenues and operating profit (loss) included in the Company’s statement of consolidated income in the second quarter of 2018 and first six months of 2018 were $873 million and $1,127 million, and $41 million and $(51) million, respectively. The Company also recognized $3 million of acquisition related costs in the second quarter of 2018, which were recorded in selling, administrative and general expenses. In the first six months of 2018, the Company recognized $53 million of acquisition related costs, which were recorded $27 million in selling, administrative and general expenses and $26 million in other operating expenses.

The unaudited pro forma consolidated net sales and revenues and net income are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net sales and revenues	$	10,720	$	9,045	$	18,098	$	15,253
Net income attributable to Deere & Company	$	1,310	$	837	$	877	$	942

35

The pro forma amounts have been calculated using policies consistent with the Company’s accounting policies and include the additional expense from the amortization from the allocated purchase price adjustments. The pro forma results exclude acquisition related costs incurred in both periods and assume the medium-term notes used to fund the acquisition were issued in fiscal year 2016 at the interest rate of the actual notes. In addition, the pro forma results for the second quarter and six months ended April 30, 2017 include nonrecurring pretax expenses of $102 million and $264 million, for the higher cost basis from the inventory fair value adjustment and $21 million and $42 million for the amortization of identifiable intangible assets. Anticipated synergies or other expected benefits of the acquisition are not included in the pro forma results. As a result, the unaudited pro forma financial information may not be indicative of the results for future operations or the results if the acquisition closed at the beginning of fiscal year 2017.

In March 2018, the Company acquired King Agro, a privately held manufacturer of carbon fiber technology products with headquarters in Valencia, Spain and a production facility in Campana, Argentina. The total cash purchase price, net of cash acquired of $3 million, was $41 million, excluding a loan to King Agro of $4 million that was forgiven on the acquisition date. In addition to the cash purchase price, the Company assumed $11 million of liabilities. The preliminary asset and liability fair values are as follows:

Trade accounts and notes receivable	$	4
Other receivables		3
Inventories		6
Property and equipment		5
Goodwill		25
Other intangible assets		13
Total assets	$	56
Short-term borrowings	$	2
Accounts payable and accrued expenses		4
Deferred income taxes		3
Long-term borrowings		2
Total liabilities	$	11

The identifiable intangibles were primarily related to trade name and technology, which have a weighted-average amortization period of 10 years.

The goodwill was the result of future cash flows and related fair values of the entity exceeding the fair value of the identified assets and liabilities, which is not expected to be deducted for tax purposes. The results of King Agro were included in the Company’s consolidated financial statements in the agriculture and turf segment since the date of acquisition. The pro forma results of operations as if the acquisition had occurred at the beginning of the prior fiscal year would not differ significantly from the reported results.

(19)  In November 2017, the Company sold its construction and forestry retail locations in Florida. At the time of the sale, total assets were $93 million and liabilities were $1 million. The assets consisted of inventory of $61 million, property and equipment – net of $21 million, goodwill of $10 million, and $1 million of other assets. The liabilities consisted of $1 million of accounts payable and accrued expenses. The total proceeds from the sale will be approximately $105 million, with $55 million received in the first six months of 2018. The remaining sales price is due based on standard payment terms of new equipment sales to independent dealers. A pretax gain of $13 million was recorded in other income in the construction and forestry segment. After the sale, the Company sells equipment, service parts, and provides other services to the purchaser as an independent dealer.

36

(20) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	9,747.0	$	7,259.8
Finance and interest income		27.8		18.7	$	812.5	$	716.4
Other income		202.9		339.6		64.9		61.0
Total		9,977.7		7,618.1		877.4		777.4
Costs and Expenses
Cost of sales		7,333.8		5,428.1
Research and development expenses		415.2		325.4
Selling, administrative and general expenses		799.5		644.1		141.5		141.3
Interest expense		78.2		67.0		231.2		169.4
Interest compensation to Financial Services		80.6		60.4
Other operating expenses		66.7		83.2		324.7		307.3
Total		8,774.0		6,608.2		697.4		618.0
Income of Consolidated Group before Income Taxes		1,203.7		1,009.9		180.0		159.4
Provision for income taxes		100.8		309.7		76.3		56.1
Income of Consolidated Group		1,102.9		700.2		103.7		103.3
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		104.1		103.5		.4		.2
Other		2.7		4.6
Total		106.8		108.1		.4		.2
Net Income		1,209.7		808.3		104.1		103.5
Less: Net income (loss) attributable to noncontrolling interests		1.4		(.2)
Net Income Attributable to Deere & Company	$	1,208.3	$	808.5	$	104.1	$	103.5

* Deere & Company with Financial Services on the equity basis.

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.

37

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF INCOME
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	15,721.0	$	11,957.7
Finance and interest income		39.4		40.0	$	1,589.4	$	1,403.7
Other income		399.3		597.6		127.7		119.2
Total		16,159.7		12,595.3		1,717.1		1,522.9
Costs and Expenses
Cost of sales		12,038.8		9,210.0
Research and development expenses		772.0		637.5
Selling, administrative and general expenses		1,390.2		1,189.3		257.7		264.7
Interest expense		174.2		133.8		425.3		318.1
Interest compensation to Financial Services		142.2		106.1
Other operating expenses		138.9		148.9		635.9		612.5
Total		14,656.3		11,425.6		1,318.9		1,195.3
Income of Consolidated Group before Income Taxes		1,503.4		1,169.7		398.2		327.6
Provision (credit) for income taxes		1,364.7		384.6		(130.0)		110.5
Income of Consolidated Group		138.7		785.1		528.2		217.1
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		529.4		217.9		1.2		.8
Other		6.8		3.7
Total		536.2		221.6		1.2		.8
Net Income		674.9		1,006.7		529.4		217.9
Less: Net income (loss) attributable to noncontrolling interests		1.7		(.8)
Net Income Attributable to Deere & Company	$	673.2	$	1,007.5	$	529.4	$	217.9

* Deere & Company with Financial Services on the equity basis.

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.

38

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	April 29		October 29		April 30		April 29		October 29		April 30
	2018		2017		2017		2018		2017		2017
Assets
Cash and cash equivalents	$	2,988.9	$	8,168.4	$	3,343.8	$	1,212.5	$	1,166.5	$	1,182.0
Marketable securities		16.9		20.2		118.1		462.4		431.4		428.2
Receivables from unconsolidated subsidiaries and affiliates		1,668.0		1,032.1		3,453.0
Trade accounts and notes receivable – net		1,515.9		876.3		742.9		6,436.0		4,134.1		4,867.3
Financing receivables – net		75.7						24,199.8		25,104.1		23,301.1
Financing receivables securitized – net		113.1						4,323.2		4,158.8		4,281.8
Other receivables		1,273.3		1,045.6		801.6		190.1		195.5		136.0
Equipment on operating leases – net								6,723.1		6,593.7		5,923.9
Inventories		6,888.9		3,904.1		4,114.8
Property and equipment – net		5,696.0		5,017.3		4,909.7		46.9		50.4		50.2
Investments in unconsolidated subsidiaries and affiliates		4,915.9		4,812.3		4,612.2		15.3		13.8		12.5
Goodwill		3,188.7		1,033.3		806.2
Other intangible assets – net		1,692.2		218.0		90.8
Retirement benefits		617.9		538.1		176.2		15.0		16.9		18.9
Deferred income taxes		2,065.5		3,098.8		3,651.1		76.4		79.8		76.3
Other assets		1,186.3		973.9		901.1		577.3		651.4		636.8
Total Assets	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	659.1	$	375.5	$	276.6	$	10,235.5	$	9,659.8	$	7,687.0
Short-term securitization borrowings		113.2						4,287.9		4,118.7		4,224.6
Payables to unconsolidated subsidiaries and affiliates		145.7		121.9		101.6		1,633.7		996.2		3,418.1
Accounts payable and accrued expenses		9,265.7		7,718.1		6,765.0		2,030.8		1,827.1		1,587.1
Deferred income taxes		462.9		115.6		89.7		523.2		857.7		764.8
Long-term borrowings		5,536.5		5,490.9		4,520.4		20,742.1		20,400.4		18,732.7
Retirement benefits and other liabilities		7,285.5		7,341.9		8,260.4		95.6		92.9		91.7
Total liabilities		23,468.6		21,163.9		20,013.7		39,548.8		37,952.8		36,506.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest		14.6		14.0		14.0
Stockholders’ Equity
Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204)		4,423.4		4,280.5		4,165.4		2,099.1		2,099.1		2,079.1
Common stock in treasury		(15,425.9)		(15,460.8)		(15,521.0)
Retained earnings		25,586.0		25,301.3		24,535.8		2,872.4		2,782.0		2,608.1
Accumulated other comprehensive income (loss)		(4,173.2)		(4,563.7)		(5,495.5)		(242.3)		(237.5)		(278.2)
Total Deere & Company stockholders' equity		10,410.3		9,557.3		7,684.7		4,729.2		4,643.6		4,409.0
Noncontrolling interests		9.7		3.2		9.1
Total stockholders’ equity		10,420.0		9,560.5		7,693.8		4,729.2		4,643.6		4,409.0
Total Liabilities and Stockholders’ Equity	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0

* Deere & Company with Financial Services on the equity basis.

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.

39

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Cash Flows from Operating Activities
Net income	$	674.9	$	1,006.7	$	529.4	$	217.9
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses		9.2		(.2)		17.6		32.8
Provision for depreciation and amortization		483.8		427.0		529.3		476.9
Gain on sale of affiliates and investments		(13.2)		(281.4)
Undistributed earnings of unconsolidated subsidiaries and affiliates		(93.8)		59.8		(1.0)		(.6)
Provision (credit) for deferred income taxes		934.5		(118.8)		(330.2)		18.4
Changes in assets and liabilities:
Trade receivables		(188.5)		(87.7)
Inventories		(1,439.5)		(771.8)
Accounts payable and accrued expenses		578.0		200.0		84.2		18.0
Accrued income taxes payable/receivable		147.4		191.5		5.6		3.6
Retirement benefits		62.7		111.0		4.9		4.6
Other		(106.1)		(49.2)		72.0		104.8
Net cash provided by operating activities		1,049.4		686.9		911.8		876.4
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						9,486.7		8,833.8
Proceeds from maturities and sales of marketable securities		3.6		7.9		20.2		33.4
Proceeds from sales of equipment on operating leases						748.6		786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold		55.0		113.9
Cost of receivables acquired (excluding trade and wholesale)						(8,918.8)		(8,238.0)
Acquisitions of businesses, net of cash acquired		(5,171.1)
Purchases of marketable securities						(62.8)		(43.7)
Purchases of property and equipment		(351.6)		(252.2)		(.6)		(.8)
Cost of equipment on operating leases acquired						(1,409.3)		(1,355.6)
Increase in trade and wholesale receivables						(2,293.8)		(1,012.7)
Other		44.2		(18.1)		(47.0)		(.6)
Net cash used for investing activities		(5,419.9)		(148.5)		(2,476.8)		(997.8)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		(67.1)		(7.4)		266.2		190.5
Change in intercompany receivables/payables		(641.6)		(287.5)		641.6		287.5
Proceeds from long-term borrowings		107.1		19.1		3,970.6		2,642.5
Payments of long-term borrowings		(85.3)		(24.7)		(2,803.4)		(2,717.5)
Proceeds from issuance of common stock		198.6		383.6
Repurchases of common stock		(60.6)		(6.2)
Dividends paid		(386.9)		(379.5)		(439.1)		(280.2)
Other		(25.5)		(25.8)		(18.5)		(13.9)
Net cash provided by (used for) financing activities		(961.3)		(328.4)		1,617.4		108.9
Effect of Exchange Rate Changes on Cash and Cash Equivalents		152.3		(6.7)		(6.4)		(.8)
Net Increase (Decrease) in Cash and Cash Equivalents		(5,179.5)		203.3		46.0		(13.3)
Cash and Cash Equivalents at Beginning of Period		8,168.4		3,140.5		1,166.5		1,195.3
Cash and Cash Equivalents at End of Period	$	2,988.9	$	3,343.8	$	1,212.5	$	1,182.0

* Deere & Company with Financial Services on the equity basis.

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.

40

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Overview

Organization

The Company’s equipment operations generate revenues and cash primarily from the sale of equipment to John Deere dealers and distributors. The equipment operations manufacture and distribute a full line of agricultural equipment; a variety of commercial and consumer equipment; and a broad range of equipment for construction, road building, and forestry. The Company’s financial services primarily provide credit services, which mainly finance sales and leases of equipment by John Deere dealers and trade receivables purchased from the equipment operations. In addition, financial services offers extended equipment warranties. The information in the following discussion is presented in a format that includes information grouped as consolidated, equipment operations, and financial services. The Company also views its operations as consisting of two geographic areas, the U.S. and Canada, and outside the U.S. and Canada. The Company’s operating segments consist of agriculture and turf, construction and forestry, and financial services.

Trends and Economic Conditions

Industry sales of agricultural machinery in the U.S. and Canada are forecast to increase approximately 10 percent for 2018. Industry sales in the European Union (EU) 28 nations are forecast to increase approximately 5 percent. In South America, industry sales of tractors and combines are projected to be about the same or increase about 5 percent. Asian sales are forecast to be in line with 2017. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same or increase 5 percent for 2018. The Company’s agriculture and turf segment sales increased 22 percent in the second quarter and 20 percent for the first six months. These sales are forecast to increase about 14 percent for fiscal year 2018. Construction equipment markets reflect continued improvement in demand driven by higher housing starts in the U.S., increased activity in the oil and gas sector, and economic growth worldwide. In forestry, global industry sales are expected to be up about 10 percent. The Company’s construction and forestry segment sales increased 84 percent in the second quarter and 73 percent for the first six months, with Wirtgen adding 60 percent and 44 percent for the respective periods. These sales are forecast to increase about 83 percent in 2018, with Wirtgen adding 56 percent to the segment’s sales. Net income attributable to Deere & Company for the Company’s financial services operations is forecast to be approximately $800 million in 2018, which includes a provisional income tax benefit of $229 million associated with tax reform.

Items of concern include the uncertainty of the effectiveness of governmental actions in respect to monetary and fiscal policies, the impact of sovereign debt, eurozone issues, capital market disruptions, trade agreements, labor supply issues, changes in demand and pricing for used equipment, and geopolitical events. Significant fluctuations in foreign currency exchange rates and volatility in the price of many commodities could also impact the Company’s results.

The Company reported higher second quarter net sales and net income from strengthening demand. Farm machinery sales in both North and South America are improving and construction equipment sales are continuing to increase sharply. The Company made significant progress working with suppliers to increase production, but is experiencing higher raw material and freight costs. The more durable business model as well as investments in new products and businesses allows the Company to remain confident in the present direction and believe it will continue to deliver value to customers and investors.

2018 Compared with 2017

Net income attributable to Deere & Company was $1,208 million, or $3.67 per share, for the second quarter of 2018, compared with $808.5 million, or $2.50 per share, for the same period last year. For the first six months of 2018, net income attributable to Deere & Company was $673.2 million, or $2.05 per share, compared with $1,007 million, or $3.14 per share, last year. Affecting results for the second quarter and first six months of 2018 were provisional adjustments to the provision for income taxes due to tax reform. Second quarter results included a favorable net adjustment to provisional income tax expense of $174 million, while the first six months reflected an unfavorable net provisional income tax expense of $803 million (see Note 8).

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Worldwide net sales and revenues increased 29 percent to $10,720 million for the second quarter this year, compared with $8,287 million a year ago, and increased 27 percent to $17,633 million for the first six months, compared with $13,912 million last year. Net sales of the worldwide equipment operations increased 34 percent to $9,747 million for the second quarter and 31 percent to $15,721 million for the first six months, compared with $7,260 million and $11,958 million for the same periods last year. The Company’s acquisition of Wirtgen in December 2017 (see Note 18) added 12 percent to net sales for the quarter and 9 percent for the first six months. Equipment net sales in the U.S. and Canada increased 27 percent for the second quarter and 26 percent year to date, with Wirtgen adding 5 percent and 3 percent for the respective periods. Outside the U.S. and Canada, net sales increased 45 percent for the second quarter and 40 percent for the first six months, with Wirtgen adding 23 percent and 19 percent for both periods. Net sales included a favorable currency translation effect of 7 percent for the second quarter and 6 percent for the first six months.

The Company’s equipment operations reported operating profit of $1,315 million for the second quarter of 2018 and $1,734 million for the first six months, compared with $1,120 million and $1,375 million, respectively, last year. Wirtgen, whose results are included in these amounts, had operating profit of $41 million for the quarter and an operating loss of $51 million for the first six months. The Wirtgen year to date operating loss was attributable to the unfavorable effects of purchase accounting and acquisition costs. Excluding Wirtgen results, the improvement for both periods was primarily driven by higher shipment volumes and lower warranty costs, partially offset by higher research and development expenses and higher production costs. The corresponding periods of 2017 included a gain on the sale of SiteOne Landscapes Supply, Inc. (SiteOne). Additionally, in the first six months of 2017 Deere incurred expenses associated with a voluntary employee-separation program.

Net income of the Company’s equipment operations was $1,103 million for the second quarter and $139 million for the first six months, compared with $700 million and $785 million for the corresponding periods of 2017. In addition to the operating factors previously mentioned, the quarter was favorably affected by $207 million and the six month period unfavorably affected by $1,032 million due to provisional income tax adjustments related to tax reform.

The Company’s financial services operations reported net income attributable to Deere & Company of $104.1 million for the second quarter and $529.4 million for the first six months, compared with $103.5 million and $217.9 million for the same periods last year. Results for both periods benefited from a higher average portfolio, lower losses on lease residual values, and a lower provision for credit losses, partially offset by a less favorable financing spread. Additionally, provisional income tax adjustments related to tax reform had an unfavorable effect of $33.2 million for the quarter and a favorable effect of $228.8 million for six months.

Business Segment Results

· Agriculture and Turf. Segment sales increased 22 percent for the quarter and 20 percent for first six months due to higher shipment volumes and the favorable effects of currency translation. Operating profit was $1,056 million for the quarter and $1,443 million year to date, compared with respective totals of $1,009 million and $1,227 million for the same periods last year. Results for the quarter were helped by higher shipment volumes, partially offset by higher research and development expenses and production costs. For the first six months, results benefited from higher shipment volumes and lower warranty related expenses, partially offset by higher research and development expenses and production costs. Prior year periods benefited from gains on the SiteOne sale, while the first six months of last year were affected by voluntary employee-separation expenses.

· Construction and Forestry. Segment sales increased 84 percent for the quarter and 73 percent for six months, with Wirtgen adding 60 percent and 44 percent for the respective periods. Also helping sales for both periods were higher shipment volumes and the favorable effects of currency translation. Operating profit was $259 million for the quarter and $291 million for six months, compared with $111 million and $148 million last year. Wirtgen contributed operating profit of $41 million for the quarter and a six month operating loss of $51 million related to the effects of purchase accounting and acquisition costs. Excluding Wirtgen, the improvements were primarily driven by higher shipment volumes and lower warranty expenses, partially offset by higher production costs. Results for the first six months of last year also included voluntary employee-separation costs.

· Financial Services. The operating profit of the financial services segment was $179 million for the second quarter and $396 million for the first six months of 2018, compared with $158 million and $325 million in the same periods last year. Results for both periods benefited from a higher average portfolio, lower losses on lease residual values, and a lower provision for credit losses, partially offset by a less favorable financing spread. Total financial services revenues, including intercompany revenues, increased 13 percent to $877 million in the current quarter from $777 million in the second quarter of 2017 and increased 13 percent to $1,717 million in the first six months of 2018 compared to $1,523 million last year. The average balance of receivables and leases financed

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was 8 percent higher in the second quarter and 7 percent higher in the first six months of 2018, compared with the same periods last year. Interest expense increased 36 percent in the second quarter and 34 percent in the first six months of 2018 primarily as a result of higher average borrowing rates and higher average borrowings. The financial services’ consolidated ratio of earnings to fixed charges was 1.79 to 1 for the second quarter this year, compared with 1.98 to 1 in the same period last year. The ratio was 1.95 to 1 for the first six months this year, compared to 2.08 to 1 for the same period last year.

The cost of sales to net sales ratios for the second quarter and first six months of 2018 were 75.2 percent and 76.6 percent, respectively, compared to 74.8 percent and 77.0 percent for the same periods last year. The increase in the second quarter was primarily driven by the unfavorable effects of purchase accounting related to Wirtgen (see Note 18) and higher production costs, partially offset by lower warranty costs. The improvement in the first six months was primarily due to lower warranty costs and the expenses incurred in 2017 associated with a voluntary employee-separation program, partially offset by higher production costs and the unfavorable effects of purchase accounting related to Wirtgen.

Other income decreased in the second quarter and first six months of 2018 primarily due to the gains on the sale of a partial interest in SiteOne in 2017. Research and development expenses increased in both periods primarily as a result of spending to support new products and the impact of acquisitions. Selling, administrative and general expenses increased in the second quarter primarily due to the Wirtgen acquisition. These expenses increased in the first six months mainly due to the Wirtgen acquisition and acquisition related costs, and higher incentive compensation expenses, partially offset by voluntary employee-separation program expenses in 2017. Other operating expenses decreased in the second quarter primarily due to the favorable effect of currency translation and lower losses on lease residual values, partially offset by higher depreciation on operating leases. Other operating expenses increased in the first six months primarily due to higher depreciation on operating leases and acquisition related costs, partially offset by the favorable effect of currency translation and lower losses on lease residual values.

Market Conditions and Outlook

Company equipment sales are projected to increase by about 30 percent for fiscal 2018 and by about 35 percent for the third quarter compared with the same periods of 2017. Of these amounts, Wirtgen is expected to add about 12 percent to Deere sales for the full year and about 18 percent for the third quarter. Also included in the forecast is a positive foreign currency translation effect of about 1 percent for the year and third quarter. Net sales and revenues are expected to increase by about 26 percent for fiscal 2018 with net income attributable to Deere & Company forecast to be about $2,300 million. The Company’s net income forecast includes $803 million of provisional income tax expense associated with tax reform, representing discrete items for the remeasurement of the Company’s net deferred tax assets to the new U.S. corporate tax rate and a one-time deemed earnings repatriation tax. The current outlook for net income compares with previous guidance of $2,100 million, which included $977 million of provisional income tax expense.

· Agriculture and Turf. The Company’s worldwide sales of agriculture and turf equipment are forecast to increase by about 14 percent for fiscal year 2018, including a positive currency translation effect of about 1 percent. Industry sales for agricultural equipment in the U.S. and Canada are forecast to be up about 10 percent for 2018, led by higher demand for large equipment. Full year industry sales in the EU28 member nations are forecast to be up about 5 percent due to favorable conditions in the dairy and livestock sectors. South American industry sales of tractors and combines are projected to be flat to up 5 percent benefiting from strength in Brazil. Asian sales are forecast to be in line with last year. Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat to up 5 percent for 2018.

· Construction and Forestry. The Company’s worldwide sales of construction and forestry equipment are anticipated to be up about 83 percent for 2018, including a positive currency translation effect of about 1 percent. Wirtgen is expected to add about 56 percent to the division’s sales for the year. The outlook reflects continued improvement in demand driven by higher housing starts in the U.S., increased activity in the oil and gas sector, and economic growth worldwide. In forestry, global industry sales are expected to be up about 10 percent mainly as a result of improved demand throughout the world, led by North America.

· Financial Services. Fiscal year 2018 net income attributable to Deere & Company for the financial services segment is expected to be approximately $800 million, including a provisional income tax benefit of $229 million associated with tax reform. Results are expected to benefit from a higher average portfolio and lower losses on lease residual values, partially offset by less favorable financing spreads and increased selling, administrative and general expenses. The financial services net income outlook provided in the first quarter was $840 million. This forecast included a provisional tax benefit estimate of $262 million for remeasurement

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of the segment’s net deferred tax liability to the new U.S. corporate tax rate and a one-time deemed earnings repatriation tax.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements under “Overview,” “Market Conditions and Outlook,” and other forward-looking statements herein that relate to future events, expectations, and trends involve factors that are subject to change, and risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of the Company’s businesses.

The Company’s agricultural equipment business is subject to a number of uncertainties including the factors that affect farmers’ confidence and financial condition. These factors include demand for agricultural products, world grain stocks, weather conditions, soil conditions, harvest yields, prices for commodities and livestock, crop and livestock production expenses, availability of transport for crops, the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production), real estate values, available acreage for farming, the land ownership policies of governments, changes in government farm programs and policies, international reaction to such programs, changes in environmental regulations and their impact on farming practices; changes in and effects of crop insurance programs, global trade agreements (including the North American Free Trade Agreement and the Trans-Pacific Partnership), trade restrictions and tariffs, animal diseases and their effects on poultry, beef and pork consumption and prices, crop pests and diseases, and the level of farm product exports (including concerns about genetically modified organisms).

Factors affecting the outlook for the Company’s turf and utility equipment include consumer confidence, weather conditions, customer profitability, labor supply, consumer borrowing patterns, consumer purchasing preferences, housing starts and supply, infrastructure investment, spending by municipalities and golf courses, and consumable input costs.

Consumer spending patterns, real estate and housing prices, the number of housing starts, interest rates and the levels of public and non-residential construction are important to sales and results of the Company’s construction and forestry equipment. Prices for pulp, paper, lumber, and structural panels are important to sales of forestry equipment.

All of the Company’s businesses and its results are affected by general economic conditions in the global markets and industries in which the Company operates; customer confidence in general economic conditions; government spending and taxing; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates; inflation and deflation rates; changes in weather patterns; the political and social stability of the global markets in which the Company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts; natural disasters; and the spread of major epidemics.

Significant changes in market liquidity conditions, changes in the Company’s credit ratings and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the Company’s earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the Company’s products and customer confidence and purchase decisions, borrowing and repayment practices, and the number and size of customer loan delinquencies and defaults. A debt crisis, in Europe or elsewhere, could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, suppliers, demand for equipment, and Company operations and results. The Company’s investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.

The anticipated withdrawal of the United Kingdom from the European Union and the perceptions as to the impact of the withdrawal may adversely affect business activity, political stability, and economic conditions in the United Kingdom, the European Union, and elsewhere. The economic conditions and outlook could be further adversely affected by (i) the uncertainty concerning the timing and terms of the exit, (ii) new or modified trading arrangements between the United Kingdom and other countries, (iii) the risk that one or more other European Union countries could come under increasing pressure to leave the European Union, or (iv) the risk that the euro as the single currency of the Eurozone could cease to exist. Any of these developments, or the perception that any of these developments are likely to occur, could affect economic growth or business activity in the United Kingdom or the European Union, and could result in the relocation of businesses, cause business interruptions, lead to economic recession or depression, and impact the stability of the financial markets, availability of credit, currency exchange rates, interest rates, financial institutions, and political, financial, and monetary systems. Any of these developments could affect our businesses, liquidity, results of operations, and financial position.

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Additional factors that could materially affect the Company’s operations, access to capital, expenses, and results include changes in, uncertainty surrounding and the impact of governmental trade, banking, monetary and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs and other areas, and governmental programs, policies, tariffs, and sanctions in particular jurisdictions or for the benefit of certain industries or sectors; retaliatory actions to such changes in trade, banking, monetary and fiscal policies; actions by central banks; actions by financial and securities regulators; actions by environmental, health and safety regulatory agencies, including those related to engine emissions, carbon, and other greenhouse gas emissions, noise, and the effects of climate change; changes to GPS radio frequency bands or their permitted uses; changes in labor and immigration regulations; changes to accounting standards; changes in tax rates, estimates, laws and regulations and Company actions related thereto; changes to and compliance with privacy regulations; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies.

Other factors that could materially affect results include production, design, and technological innovations and difficulties, including capacity and supply constraints and prices; the loss of or challenges to intellectual property rights whether through theft, infringement, counterfeiting or otherwise; the availability and prices of strategically sourced materials, components, and whole goods; delays or disruptions in the Company’s supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations or distribution; the failure of suppliers or the Company to comply with laws, regulations, and Company policy pertaining to employment, human rights, health, safety, the environment, anti-corruption, privacy and data protection, and other ethical business practices; events that damage the Company’s reputation or brand; significant investigations, claims, lawsuits or other legal proceedings; start-up of new plants and products; the success of new product initiatives; changes in customer product preferences and sales mix; gaps or limitations in rural broadband coverage, capacity and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the Company competes, particularly price discounting; dealer practices especially as to levels of new and used field inventories; changes in demand and pricing for used equipmentand resulting impacts on lease residual values; labor relations and contracts; changes in the ability to attract, train, and retain qualified personnel; acquisitions and divestitures of businesses; greater than anticipated transaction costs; the integration of new businesses; the failure or delay in closing or realizing anticipated benefits of acquisitions, joint ventures or divestitures; the implementation of organizational changes; the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts; difficulties related to the conversion and implementation of enterprise resource planning systems; security breaches, cybersecurity attacks, technology failures and other disruptions to the Company’s and suppliers’ information technology infrastructure; changes in Company declared dividends and common stock issuances and repurchases; changes in the level and funding of employee retirement benefits; changes in market values of investment assets, compensation, retirement, discount, and mortality rates which impact retirement benefit costs; and significant changes in health care costs.

The liquidity and ongoing profitability of John Deere Capital Corporation and other credit subsidiaries depend largely on timely access to capital in order to meet future cash flow requirements, and to fund operations, costs, and purchases of the Company’s products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.

The Company’s outlook is based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The Company, except as required by law, undertakes no obligation to update or revise its outlook, whether as a result of new developments or otherwise. Further information concerning the Company and its businesses, including factors that could materially affect the Company’s financial results, is included in the Company’s other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q).

Critical Accounting Policies

See the Company’s critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent annual report filed on Form 10-K. There have been no material changes to these policies.

CAPITAL RESOURCES AND LIQUIDITY

The discussion of capital resources and liquidity has been organized to review separately, where appropriate, the Company’s consolidated totals, equipment operations, and financial services operations.

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Consolidated

Negative cash flows from consolidated operating activities in the first six months of 2018 were $1,222 million. This cash outflow resulted primarily from a seasonal increase in inventories and trade receivables, along with an increase in overall demand, partially offset by net income adjusted for non-cash provisions, an increase in accounts payable and accrued expenses, a change in accrued income taxes payable/receivable, and a change in net retirement benefits. Cash outflows from investing activities were $5,153 million in the first six months of 2018, primarily due to acquisitions of businesses, net of cash acquired, of $5,171 million (see Note 18), purchases of property and equipment of $352 million, and purchases of marketable securities exceeding proceeds from maturities and sales by $39 million. Partially offsetting these cash outflows were cash inflows from the collections of receivables (excluding receivables related to sales) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $422 million and the proceeds from the sales of businesses and affiliates, net of cash sold, of $55 million. Positive cash flows from financing activities were $1,095 million in the first six months of 2018 primarily due to an increase in borrowings of $1,388 million and proceeds from issuance of common stock of $199 million (resulting from the exercise of stock options), partially offset by dividends paid of $387 million and repurchases of common stock of $61 million. Cash and cash equivalents decreased $5,134 million during the first six months this year.

In the second quarter of 2018, a committee of the Company’s Board of Directors approved a voluntary $1,000 million contribution to its U.S. pension and postretirement plans in 2018. The Company contributed $50 million of the voluntary amount to its plans in the second quarter with the remainder anticipated during the third quarter. These voluntary contributions will result in a tax deduction applicable to the 2017 tax year.

Negative cash flows from consolidated operating activities in the first six months of 2017 were $164 million. The cash outflows resulted primarily from an increase in inventories due to higher overall demand and a seasonal increase in receivables related to sales, which were partially offset by net income adjusted for non-cash provisions, a change in accrued income taxes payable/receivable, a change in net retirement benefits, and an increase in accounts payable and accrued expenses. Cash inflows from investing activities were $301 million in the first six months of 2017, primarily due to collections of receivables (excluding receivables related to sales) and proceeds from sales of equipment on operating leases exceeding the cost of receivables and equipment on operating leases acquired by $461 million and proceeds from the sales of businesses and unconsolidated affiliates, net of cash sold, of $114 million. Partially offsetting these cash inflows were cash outflows from purchases of property and equipment of $253 million. Positive cash flows from financing activities were $61 million in the first six months of 2017 primarily due to proceeds from issuance of common stock of $384 million (resulting from the exercise of stock options) and an increase in borrowings of $103 million, partially offset by dividends paid of $380 million. Cash and cash equivalents increased $190 million during the first six months of 2017.

The Company has access to most global markets at a reasonable cost and expects to have sufficient sources of global funding and liquidity to meet its funding needs. Sources of liquidity for the Company include cash and cash equivalents, marketable securities, funds from operations, the issuance of commercial paper and term debt, the securitization of retail notes (both public and private markets), and committed and uncommitted bank lines of credit. The Company’s commercial paper outstanding at April 29, 2018, October 30, 2017, and April 30, 2017 was $3,481 million, $3,439 million, and $2,302 million, respectively, while the total cash and cash equivalents and marketable securities position was $4,681 million, $9,787 million, and $5,072 million, respectively. The decrease of $5,106 million during the first six months of 2018 is primarily due to the Wirtgen acquisition (see Note 18). The total cash and cash equivalents and marketable securities held by foreign subsidiaries, in which earnings are considered indefinitely reinvested, was $1,137 million, $3,386 million, and $2,177 million at April 29, 2018, October 30, 2017, and April 30, 2017, respectively.

Lines of Credit. The Company also has access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $8,073 million at April 29, 2018, $4,019 million of which were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, were primarily considered to constitute utilization. Included in the total credit lines at April 29, 2018 were 364-day credit facility agreements of $750 million expiring in October 2018, and $1,750 million expiring in April 2019. In addition, total credit lines included long-term credit facility agreements of $2,500 million expiring in April 2021 and $2,500 million expiring in April 2022. These credit agreements require John Deere Capital Corporation (Capital Corporation) to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. The credit agreements also require the equipment operations to maintain a ratio of total debt to total capital (total debt and stockholders’ equity excluding accumulated other comprehensive income (loss)) of 65 percent or less at the end of each fiscal

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quarter. Under this provision, the Company’s excess equity capacity and retained earnings balance free of restriction at April 29, 2018 was $11,196 million. Alternatively under this provision, the equipment operations had the capacity to incur additional debt of $20,793 million at April 29, 2018. All of these requirements of the credit agreement have been met during the periods included in the financial statements.

Debt Ratings. To access public debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings to the Company’s securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell or hold Company securities. A credit rating agency may change or withdraw Company ratings based on its assessment of the Company’s current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets. The senior long-term and short-term debt ratings and outlook currently assigned to unsecured Company debt securities by the rating agencies engaged by the Company are as follows:

	Senior
	Long-Term	Short-Term	Outlook
Fitch Ratings	A	F1	Stable
Moody’s Investors Service, Inc.	A2	Prime-1	Stable
Standard & Poor’s	A	A-1	Stable

Trade accounts and notes receivable primarily arise from sales of goods to independent dealers. Trade receivables increased $2,586 million during the first six months of 2018, primarily due to the Wirtgen acquisition, a seasonal increase, higher shipment volumes, and currency translation. These receivables increased $2,029 million, compared to a year ago, primarily due to the Wirtgen acquisition, higher shipment volumes, and currency translation. The ratios of worldwide trade accounts and notes receivable to the last 12 months’ net sales were 22 percent at April 29, 2018, compared to 15 percent at October 30, 2017 and 19 percent at April 30, 2017. Agriculture and turf trade receivables increased $1,073 million and construction and forestry trade receivables increased $956 million, compared to a year ago. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1 percent at April 29, 2018, 1 percent at October 30, 2017, and 2 percent at April 30, 2017.

Deere & Company stockholders’ equity was $10,410 million at April 29, 2018, compared with $9,557 million at October 30, 2017 and $7,685 million at April 30, 2017. The increase of $853 million during the first six months of 2018 resulted primarily from net income attributable to Deere & Company of $673 million, a change in the cumulative translation adjustment of $225 million, a change in the retirement benefits adjustment of $165 million, an increase in common stock of $143 million, and a decrease in treasury stock of $35 million, partially offset by dividends declared of $390 million.

Equipment Operations

The Company’s equipment businesses are capital intensive and are subject to seasonal variations in financing requirements for inventories and certain receivables from dealers. The equipment operations sell a significant portion of their trade receivables to financial services. To the extent necessary, funds provided from operations are supplemented by external financing sources.

Cash provided by operating activities of the equipment operations, including intercompany cash flows, in the first six months of 2018 was $1,049 million. This resulted primarily from cash inflows from net income adjusted for non-cash provisions, an increase in accounts payable and accrued expenses, a change in accrued income taxes payable/receivable, and a change in net retirement benefits. Partially offsetting these operating cash inflows were cash outflows from a seasonal increase in inventories and trade receivables, along with an increase in overall demand. Cash and cash equivalents decreased $5,180 million in the first six months of 2018, primarily due to the Wirtgen acquisition of $5,130 million (see Note 18).

Cash provided by operating activities of the equipment operations, including intercompany cash flows, in the first six months of 2017 was $687 million. This resulted primarily from cash inflows from net income adjusted for non-cash provisions, an increase in accounts payable and accrued expenses, a change in accrued income taxes payable/receivable, and a change in net retirement benefits. Partially offsetting these operating cash inflows were cash outflows from an increase in inventories and a seasonal increase in trade receivables. Cash and cash equivalents increased $203 million in the first six months of 2017.

Trade receivables held by the equipment operations increased $640 million during the first six months and increased $773 million from a year ago. The increase in both periods was due primarily to the Wirtgen acquisition. The

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equipment operations sell a significant portion of their trade receivables to financial services. See the previous consolidated discussion of trade receivables.

Inventories increased by $2,985 million during the first six months, primarily due to the Wirtgen acquisition and a seasonal increase. Inventories increased by $2,774 million compared to a year ago, primarily due to the Wirtgen acquisition and higher production volumes based on increased demand. Most of these inventories are valued on the last-in, first-out (LIFO) method. The ratios of inventories on a first-in, first-out (FIFO) basis (see Note 12), which approximates current cost, to the last 12 months’ cost of sales were 37 percent at April 29, 2018, compared to 27 percent at October 30, 2017 and 30 percent at April 30, 2017.

Total interest-bearing debt of the equipment operations was $6,309 million at April 29, 2018, compared with $5,866 million at October 30, 2017 and $4,797 million at April 30, 2017. The ratios of debt to total capital (total interest-bearing debt and stockholders’ equity) were 38 percent, 38 percent, and 38 percent at April 29, 2018, October 30, 2017, and April 30, 2017, respectively.

Property and equipment cash expenditures for the equipment operations in the first six months of 2018 were $352 million, compared with $252 million in the same period last year. Capital expenditures for the equipment operations in 2018 are estimated to be approximately $925 million.

Financial Services

The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios. Their primary sources of funds for this purpose are a combination of commercial paper, term debt, securitization of retail notes, equity capital, and borrowings from Deere & Company.

During the first six months of 2018, the cash provided by operating activities and financing activities was used primarily to increase trade and wholesale receivables. Cash flows provided by operating activities, including intercompany cash flows, were $912 million in the first six months. Cash used for investing activities totaled $2,477 million in the first six months of 2018 primarily due to an increase in trade and wholesale receivables of $2,294 million and the cost of receivables (excluding trade and wholesale) and equipment on operating leases acquired exceeding the collection of these receivables and proceeds from sales of equipment on operating leases by $93 million. Cash provided by financing activities totaled $1,617 million, resulting primarily from an increase in external borrowings of $1,433 million and an increase in borrowings from Deere & Company of $642 million, partially offset by dividends paid to Deere & Company of $439 million. Cash and cash equivalents increased $46 million in the first six months of 2018.

During the first six months of 2017, the cash provided by operating activities was used primarily to increase leases and trade and wholesale receivables. Cash flows provided by operating activities, including intercompany cash flows, were $876 million in the first six months of 2017. Cash used for investing activities totaled $998 million in the first six months of 2017 primarily due to an increase in trade and wholesale receivables of $1,013 million, partially offset by the collection of receivables (excluding trade and wholesale) and proceeds from sales of equipment on operating leases exceeding the cost of these receivables and equipment on operating leases acquired by $27 million. Cash provided by financing activities totaled $109 million, resulting primarily from an increase in borrowings from Deere & Company of $288 million and an increase in external borrowings of $116 million, partially offset by dividends paid to Deere & Company of $280 million. Cash and cash equivalents decreased $13 million in the first six months of 2017.

Receivables and leases held by the financial services operations consist of retail notes originated in connection with retail sales of new and used equipment by dealers of John Deere products, retail notes from non-Deere equipment customers, trade receivables, wholesale notes, revolving charge accounts, credit enhanced international export financing generally involving John Deere products, and financing and operating leases. Total receivables and leases increased $1,691 million during the first six months of 2018 and increased $3,308 million in the past 12 months. Acquisition volumes of receivables (excluding trade and wholesale) and leases were 8 percent higher in the first six months of 2018, compared with the same period last year, as volumes of retail notes, revolving charge accounts, financing leases, and operating leases were all higher. The amount of total trade receivables and wholesale notes increased compared to both October 30, 2017 and April 30, 2017. Total receivables and leases administered by the financial services operations, which include receivables administered but not owned, amounted to $41,691 million at April 29, 2018, compared with $40,001 million at October 30, 2017 and $38,389 million at April 30, 2017. At April 29, 2018, the unpaid balance of all receivables administered, but not owned, was $9 million, compared with $10 million at October 30, 2017 and $15 million at April 30, 2017.

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Total external interest-bearing debt of the financial services operations was $35,266 million at April 29, 2018, compared with $34,179 million at October 30, 2017 and $30,644 million at April 30, 2017. Total external borrowings have changed generally corresponding with the level of receivable and lease portfolio, the level of cash and cash equivalents, the change in payables owed to Deere & Company, and the change in investment from Deere & Company. The financial services operations’ ratio of interest-bearing debt to stockholder’s equity was 7.8 to 1 at April 29, 2018, compared with 7.6 to 1 at October 30, 2017 and 7.7 to 1 at April 30, 2017.

Capital Corporation has a revolving credit agreement to utilize bank conduit facilities to securitize retail notes (see Note 11). At April 29, 2018, this facility had a total capacity, or “financing limit,” of $3,500 million of secured financings at any time. After a two-year 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. At April 29, 2018, $1,851 million of secured short-term borrowings was outstanding under the agreement.

In the first six months of 2018, the financial services operations issued $1,739 million and retired $1,570 million of retail note securitization borrowings. In addition, during the first six months of 2018, the financial services operations issued $3,971 million and retired $2,803 million of long-term borrowings, which were primarily medium-term notes.

Dividends and Other Events

The Company’s Board of Directors at its meeting on May 30, 2018 declared a quarterly dividend of $.69 per share payable August 1, 2018, to stockholders of record on June 29, 2018.

In May 2018, the Company sold seven construction and forestry retail locations in Michigan, Minnesota, and Wisconsin. At the time of the sale, total assets were approximately $90 million and liabilities were approximately $2 million. The total proceeds from the sale will be approximately $99 million, with $39 million received on the closing date. The remaining sales price is due based on standard payment terms of new equipment sales to independent dealers. A pretax gain of approximately $11 million will be recorded in other income in the construction and forestry segment. After the sale, the Company sells equipment, service parts, and provides other services to the purchaser as an independent dealer.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the Company’s most recent annual report filed on Form 10-K (Part II, Item 7A). There has been no material change in this information.

Item 4. CONTROLS AND PROCEDURES

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of April 29, 2018, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. During the second quarter, there were no changes that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that the Company reasonably believes could exceed $100,000. The following matters are disclosed solely pursuant to that requirement: (a) on July 6, 2017, after self-reporting to the Iowa Department of Natural Resources, the Company received a Notice of Violation alleging that one Iowa facility location exceeded permitted emission limits. The Company responded and is actively cooperating with the Iowa Department of Natural Resources to revise the permits and resolve the notice; and (b) on March 19, 2018, the Secretaria de Estado de Meio Ambiente e Desenvolvimento Sustentável in Minas Gerais, Brazil issued a fine of approximately $110,000 at current exchange rates against John Deere Equipamentos do Brasil in connection with an oil spill that occurred after an April 2016 roadway accident involving a Company truck. An administrative defense has been filed to cancel the fine. The Company believes the reasonably possible range of losses for these and other unresolved legal actions would not have a material effect on its financial statements.

Item 1A.  Risk Factors

See the Company’s most recent annual report filed on Form 10-K (Part I, Item 1A). There has been no material change in this information. The risks described in the annual report on Form 10-K, and the “Safe Harbor Statement” in this report, are not the only risks faced by the Company. Additional risks and uncertainties may also materially affect the Company’s business, financial condition or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s purchases of its common stock during the second quarter of 2018 were as follows:

				Total Number of
				Shares Purchased as	Maximum Number of
	Total Number of			Part of Publicly	Shares that May Yet Be
	Shares			Announced Plans or	Purchased under the
	Purchased	Average Price		Programs (1)	Plans or Programs (1)
Period	(thousands)	Paid Per Share		(thousands)	(millions)
Jan 29 to Feb 25					23.7
Feb 26 to Mar 25					23.7
Mar 26 to Apr 29	342	$	148.62	342	23.3
Total	342			342

(1) During the second quarter of 2018, the Company had a share repurchase plan that was announced in December 2013 to purchase up to $8,000 million of shares of the Company’s common stock. The maximum number of shares that may yet be purchased under these plans was based on the end of the second quarter closing share price of $137.56 per share. At the end of the second quarter of 2018, $3,209 million of common stock remained to be purchased under the plans.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

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Item 5.  Other Information

Change in Control Program

On May 29, 2018, the Compensation Committee of the Board of Directors (the “Committee”) of the Company adopted amendments to the Company’s Change in Control Severance Program (the “Program”). The adoption of the amendments to the Program and corresponding changes to existing terms result from the Committee’s routine review of the Company’s executive compensation program and were approved after consultation and review with the Company’s independent compensation consultant.

The amendments to the Program, among other things, changed certain benefits to be paid under the Program and changed corresponding definitions. Specifically, the amendments to the Program made the following changes, among other things:

· A reduction in the severance multiplier for Tier 1 Participants from 3x to 2x; and

· A reduction in the continuation of welfare benefits (including health, life and disability insurance) for Tier 1 executives from 3 years to 2 years.

Following the amendments, the Chief Executive Officer of the Company would continue to receive severance benefits under the Program, including (i) base salary plus target bonus multiplied by 3 and (ii) continuation of welfare benefits (including health, life and disability insurance) for 3 years.

The amendments took effect immediately on May 29, 2018. The foregoing description of the Program is qualified in its entirety by reference to the Amended and Restated Change in Control Severance Program filed as an exhibit hereto.

Item 6.  Exhibits

Certain instruments relating to long-term borrowings constituting less than 10% of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will file copies of such instruments upon request of the Commission.

3.1	Certificate of Incorporation, as amended (Exhibit 3.1 to Form 8-K of registrant dated February 26, 2010*)
3.2	Bylaws as amended (Exhibit 3.1 to Form 8-K of registrant dated September 1, 2016*)
10.1	Amended and Restated Change in Control Severance Program of Deere & Company
12	Computation of ratio of earnings to fixed charges
31.1	Rule 13a-14(a)/15d-14(a) Certification
31.2	Rule 13a-14(a)/15d-14(a) Certification
32	Section 1350 Certifications
101	Interactive Data File

* Incorporated by reference. Copies of these exhibits are available from the Company upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DEERE & COMPANY
Date:	May 31, 2018	By:	/s/ R. Kalathur
			R. Kalathur Senior Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

AMENDED & RESTATED

CHANGE IN CONTROL SEVERANCE PROGRAM

OF DEERE & COMPANY

Effective as of 29 May 2018

TABLE OF CONTENTS

1.	Purpose	1
2.	Definitions	1
3.	Eligibility	6
4.	Severance Benefits	7
5.	Form and Timing of Severance Benefits	10
6.	Excise Tax	11
7.	The Company’s Payment Obligation	12
8.	Covenants and Release of the Participants	12
9.	Funding	13
10.	Administration	13
11.	Claims Procedure	13
12.	Legal Fees	14
13.	Successors and Assignment	14
14.	Miscellaneous	15
15.	Effect on Prior Agreements	16

-  i  -

AMENDED & RESTATED

CHANGE IN CONTROL SEVERANCE PROGRAM

OF DEERE & COMPANY

1.        Purpose

The purposes of the Program are (i) to provide Participants with severance payments and benefits in the event of a Qualifying Termination, (ii) to assure the Company that it will have the continued dedication of the Participants and the availability of their advice and counsel notwithstanding the possibility, threat, or occurrence of a Change in Control of the Company, and (iii) to provide an additional incentive for the Participants to remain in the employ of the Company.  The Program is intended to be a “top-hat” plan for a  select group of management or highly compensated employees of the Company, but is not intended to meet the qualification requirements of Section 401 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.        Definitions

Whenever used in the Program, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

(a)      “Administrator” means the Company’s  Senior Vice President and Chief Administrative Officer or such other person designated by the Committee.

(b)      “Base Salary” means a Participant’s annual rate of salary, excluding amounts received under incentive or other bonus plans, whether or not deferred.

(c)      “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d‑3 of the General Rules and Regulations under the Exchange Act.

(d)      “Board” means the Board of Directors of the Company.

(e)      “Bonus” means the target bonus amount for a  Participant for the fiscal year in which the Effective Date of Termination occurs pursuant to the John Deere Short -Term Incentive Bonus Plan or any successor plan or arrangement thereto.  The Bonus will be determined (i) for the CEO and for Tier 1 Participants by the Committee and (ii) for Tier 2 Participants in accordance with the terms and procedures of the Deere Short -Term Incentive Bonus Plan or any successor plan or arrangement thereto.  For purposes of the Program, the term “Bonus” shall not include any payments made pursuant to the Company’s  Long-Term Incentive Cash Plan, Long-Term Incentive Plan or any successor plans or arrangements thereto.

(f)       “Cause” means (i) a Participant’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from Disability or occurring after issuance by a Participant of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to

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such Participant that specifically identifies the manner in which the Company believes that such Participant has willfully failed to substantially perform his duties, and after such Participant has failed to resume substantial performance of his duties on a continuous basis within thirty (30) calendar days of receiving such demand; (ii) a Participant’s willfully engaging in conduct (other than conduct covered under (i) above) which is demonstrably and materially injurious to the Company, monetarily or otherwise; or (iii) a Participant’s having been convicted of, or having entered a plea of nolo contendere to, a felony.  For purposes of this definition, no act, or failure to act, on a Participant’s part shall be deemed “willful” unless done, or omitted to be done, by a Participant not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

(g)      “CEO” means the Chief Executive Officer of the Company.

(h)      “Change in Control” means a change in control of a nature that would be required to be reported in response to Schedule 14A of Regulation 14A promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirement, provided that, without limitation, such a Change in Control shall be deemed to have occurred if:

(i)       any “person” (as defined in Sections 13(d) and 14(d) of the Exchange Act) (other than a Participant or group of Participants, the Company or a  subsidiary, any employee benefit plan of the Company including its trustee, or any corporation or similar entity which becomes the Beneficial Owner of securities of the Company in connection with a transaction excepted from the provisions of clause (iii) below) is or becomes the “beneficial owner” (as defined in Rule 13(d‑3) under the Exchange Act), directly or indirectly, of securities of the Company (not including the securities beneficially owned or any securities acquired directly from the Company) representing thirty percent (30%) or more of the combined Voting Power of the Company’s then outstanding securities;

(ii)      the following individuals shall cease to constitute a majority of the Board:  individuals who on the Participation Date constitute the Board and any new director(s) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Participation Date or whose appointment or election or nomination for election was previously so approved but excluding, for this purpose, any such new director whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

(iii)     there is consummated a merger, consolidation or similar business combination transaction of the Company (including, for the avoidance of doubt, any business combination structured as a forward or reverse triangular merger involving any direct or indirect subsidiary of the Company) with any other

2

company, other than a merger, consolidation or similar business combination transaction which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined Voting Power of the voting securities of the Company or such surviving entity or parent thereof outstanding immediately after such merger, consolidation or similar business combination transaction; or

(iv)     the stockholders of the Company approve a plan of complete liquidation of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

(i)        “CIC Agreement” means a change in control agreement entered into between the Company and an executive or other employee.

(j)        “Code” means the United States Internal Revenue Code of 1986, as amended, and any successors thereto.

(k)       “Committee” means the Compensation Committee of the Board or any other committee of the Board appointed by the Board to perform the functions of the Compensation Committee.

(l)        “Company” means Deere & Company, a Delaware corporation, or any successor thereto as provided in Section 13(a) herein.

(m)      “Disability” means complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which a Participant was employed when such disability commenced.

(n)       “Divestiture” means a transaction in which (x) the entity that employs a Participant is sold, spun-off or otherwise disposed of by the Company with the result that such entity is no longer a 409A Affiliate, or (y) the business unit or division in which the Participant is employed is spun-off as a separate entity that is not a 409A Affiliate or is sold or otherwise transferred to a  third party that is not a 409A Affiliate.

(o)       “Effective Date of Termination” means the date on which a Qualifying Termination occurs which triggers the payment of Severance Benefits hereunder.

(p)       “Employment” means a Participant’s employment with the Company or any of its 409A Affiliates.

(q)       “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

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(r)        “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

(s)       “Good Reason” means, without a Participant’s express written consent, the occurrence of any one or more of the following:

(i)       The assignment of a Participant to duties materially inconsistent with such Participant’s authorities, duties, responsibilities, and status (including offices and reporting requirements) as an employee of the Company, or a  reduction or alteration in the nature or status of a Participant’s authorities, duties, or responsibilities from the greater of (i) those in effect on the Participation Date; (ii) those in effect during the fiscal year immediately preceding the year of the Change in Control; or (iii) those in effect immediately preceding the Change in Control;

(ii)      The Company’s requiring a Participant to be based at a location which is at least fifty (50) miles further from the current primary residence than is such residence from the Company’s current headquarters, except for required travel on the Company’s business to an extent substantially consistent with such Participant’s business obligations as of the Participation Date;

(iii)     A reduction by the Company in a Participant’s Base Salary as in effect on the Participation Date or as the same shall be increased from time to time;

(iv)     A material reduction in a Participant’s level of participation in any of the Company’s short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or arrangements in which such Participant participates from the levels in place during the fiscal year immediately preceding the Change in Control; provided, however, that reductions in the levels of participation in any such plans shall not be deemed to be “Good Reason” if a Participant’s reduced level of participation in each such program remains substantially consistent with the average level of participation of other executives who have positions commensurate with such Participant’s position;

(v)      The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the obligations under the Program, as contemplated in 13(a) herein; or

(vi)     Any involuntary termination of a Participant’s Employment that is not effected pursuant to a  Notice of Termination.

The existence of Good Reason shall not be affected by a Participant’s temporary incapacity due to physical or mental illness not constituting a Disability.  A Participant’s continued employment shall not constitute a waiver of such Participant’s rights with respect to any circumstance constituting Good Reason.

4

(t)       “Multiplier” shall mean (i) three (3) in the case of the CEO, (ii) two (2) in the case of a Tier 1 Participant and (ii) one and one-half (1.5) in the case of a Tier 2 Participant.

(u)      “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in the Program relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of a Participant’s Employment under the provision so indicated.

(v)      “Participant” means the CEO and each person who is designated to be a Tier 1 Participant or Tier 2 Participant under the Program.

(w)     “Participation Date” means, with respect to each Participant, the date specified by the Committee or the Administrator as provided in Section 3(a) as of which such individual becomes a Participant in the Program.  If (i) a Participant who is designated a Tier 1 Participant is subsequently designated as the CEO, (ii) a Participant who is designated a Tier 2 Participant is subsequently designated a Tier 1 Participant, (iii) or if a Tier 1 Participant is subsequently designated in accordance with Section 3(c) a Tier 2 Participant, then from and after the effective date of such later designation, the Participant’s Participation Date will be such effective date.

(x)      “Payment Date” shall have the meaning ascribed to such term in Section 5(a) herein.

(y)      “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as provided in Section 13(d).

(z)      “Post-Divestiture Employer” means, in the case of a Participant whose employment is with an entity, business unit or division that is the subject of a Divestiture and who immediately following the Divestiture continues to be employed with such entity, business unit or division, the Participant’s employer immediately following the Divestiture (including all entities that are considered to be a single employer with such party under the default provisions in Treasury Regulations Section 1.409A‑1(h)).

(aa)    “Potential Change in Control” of the Company means the happening of any of the following:

(i)        the entering into an agreement by the Company, the consummation of which would result in a Change in Control of the Company as defined in Section 2(g) hereof; or

(ii)       the acquisition of beneficial ownership, directly or indirectly, by any entity, person or group (other than a Participant or group of Participants, the Company or a  subsidiary, or any employee benefit plan of the Company including its trustee) of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s outstanding securities and the adoption by the Board of a resolution to the effect that a

5

Potential Change in Control of the Company has occurred for purposes of the Program.

(bb)    “Program” means this Change in Control Severance Program of Deere & Company and its Subsidiaries, as subsequently amended from time to time.

(cc)    “Release” shall have the meaning ascribed to such term in Section 8 herein.

(dd)    “Release Deadline” shall have the meaning ascribed to such term in Section 8 herein.

(ee)    “Qualifying Termination” means any of the events described in Section 4(b) herein, the occurrence of which triggers the payment of Severance Benefits hereunder.

(ff)      “SEC” means the United States Securities and Exchange Commission.

(gg)    “Severance Benefits” means the payment of severance compensation as provided in Section 4(d) herein.

(hh)    “Subsidiary” means any corporation or other entity of which ownership interests having ordinary Voting Power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Company.

(ii)      “Tier 1 Participant” means each person who is designated by the Committee as a Tier 1 Participant.

(jj)      “Tier 2 Participant” means each person who is designated by the Administrator as a Tier 2 Participant.

(kk)    “Voting Power” of a corporation or other entity means the combined voting power of the then-outstanding voting securities of such corporation or other entity entitled to vote generally in the election of directors.

(ll)      “409A Affiliate” means any corporation that is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code) that includes the Company and any trade or business (whether or not incorporated) that is under common control with the Company (within the meaning of Section 414(c) of the Code).

3.        Eligibility

(a)      Designation of Participants.  The CEO shall be a Participant in the Plan. Tier 1 Participants shall be designated in writing from time to time by the Committee in its discretion.  Tier 2 Participants shall be designated in writing from time

6

to time by the Committee or the Administrator.  At the time an individual is designated as a Participant, the Committee or the Administrator, as the case may be, shall specify such individual’s Participation Date (which may, but need not, be the date of the Committee or the Administrator action designating the individual as a Participant).  The books and records of the Company shall be definitive for purposes of determining whether and as of when an individual has been designated as a Participant.

(b)      Participation Exclusive.  Unless and until an individual has been designated as a Participant and the relevant Participation Date has occurred, such individual shall have no rights under the Program, regardless of whether any other individual with a similar position, rate of compensation or responsibilities has become a Participant.  No individual shall become a Participant while such individual is party to an effective CIC Agreement, and in no event may any individual have entitlements under both the Program and a CIC Agreement.

(c)      Termination of Participation.  The Committee, with respect to Tier 1 Participants (including, for this purpose, a Tier 1 Participant who is being converted to a  Tier 2 Participant), and the Committee or the Administrator, with respect to Tier 2 Participants, may provide notice to a  Participant at any time that such Participant shall cease to be a Participant.  Any such termination or reduction of Participant status shall become effective on the earliest anniversary of the relevant Participant’s Participation Date that is at least six (6) months  from the date of the notice of termination or reduction of Participant status, provided, however, that no such termination or reduction of Participant status shall be effective prior to the second anniversary of the Participant’s Participation Date; provided, further, that no notice of termination or reduction of Participant status shall be given within six (6) months  following a Potential Change in Control; and provided, further, that following a Change in Control, no such termination or reduction of Participant status shall be given effect until the later of (i) twenty-four (24) months  after the month in which the Change in Control occurs or (ii) if a Participant experiences a Qualifying Termination before the end of such twenty-four (24) month period, until all obligations of the Company under the Program have been fulfilled and all benefits required under the Program have been paid or provided to the Participant.

4.        Severance Benefits

(a)      Right to Severance Benefits. Subject to Section 8, a Participant shall be entitled to receive from the Company the Severance Benefits described in Section 4(d) if a Qualifying Termination of such Participant has occurred. A Participant shall not be entitled to receive Severance Benefits if he or she is terminated for Cause, or if his or her Employment ends due to death or Disability or due to a  voluntary termination of Employment without Good Reason.  An individual who has ceased to be a Participant in the Program in accordance with Section 3(c) shall not be entitled to any Severance Benefits under the Program in connection with his or her termination of Employment for any reason, even if such termination of Employment would have qualified as a Qualifying Termination had the individual been a Participant at the time of his or her termination of Employment.  No Severance Benefits shall be payable

7

under the Program to any individual if the Program has been terminated as to such individual in accordance with Section 14(d) at the time of such individual’s termination of Employment.

(b)      Qualifying Termination.  Subject to Section 8, the occurrence of any one or more of the following events shall trigger the payment of Severance Benefits to a  Participant under the Program:

(i)        An involuntary termination of a Participant’s Employment for reasons other than Cause within six (6) months  preceding or within twenty‑four (24) calendar months  following a Change in Control of the Company; any such involuntary termination shall be pursuant to a  Notice of Termination (specifying the Effective Date of Termination which shall be not less than five (5) days from the date of the Notice of Termination) delivered to such Participant by the Company; or

(ii)       A Participant’s voluntary termination of Employment for Good Reason within twenty-four (24) calendar months  following a Change in Control of the Company pursuant to a  Notice of Termination delivered to the Company by such Participant.

For purposes of the Program, a Participant’s Employment will be considered to have terminated upon (and only upon) such Participant’s “separation from service” from the Company and its 409A Affiliates as determined under the default provisions in Treasury Regulation Section 1.409A‑1(h).

(c)      Divestitures.  Without limiting the generality of the foregoing Section 4(b), if the entity, business unit or division that employs a Participant is the subject of a Divestiture, the Participant will be considered to have experienced an involuntary termination of Employment as of the date such entity ceases to be a 409A Affiliate or such business unit or division is sold or transferred, regardless of whether the Participant is considered to have experienced a termination of Employment with the Company and its affiliates for any other purpose; provided, however, that if a Divestiture occurs within six (6) months  preceding or within twenty‑four (24) months  following a Change in Control of the Company, then the Divestiture itself will not be considered to cause a termination of the Participant’s employment, and whether the Participant experiences a Qualifying Termination following such Divesture will be determined by reference to the Participant’s employment with the Post-Divestiture Employer (so that, for example, an involuntary termination of the Participant’s employment with the Post-Divestiture Employer for reasons other than Cause within 24 calendar months  following a Change in Control of the Company will trigger the payment of Severance Benefits). Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.

8

(d)      Description of Severance Benefits.  Subject to Section 8, in the event a Participant becomes entitled to receive Severance Benefits, the Company shall pay or provide to the Participant all of the following:

(i)        An amount equal to the product of (x) the sum of the Participant’s Base Salary in effect at the Effective Date of Termination (without regard to any decreases therein which constitute Good Reason) plus his Bonus and (y) the Multiplier.

(ii)       An amount equal to his unpaid Base Salary, accrued vacation pay, and earned but not taken vacation pay through the Effective Date of Termination.

(iii)      An amount equal to his Bonus multiplied by a fraction, the numerator of which is the number of days he was employed by the Company in the then-existing fiscal year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365) less, in the case of a Participant who began Employment after the beginning of the fiscal year, the number of days from the beginning of the fiscal year to the date he commenced Employment.

(iv)      A continuation of the welfare benefits of health care, life and accidental death and dismemberment, and disability insurance coverage for (A) three (3) full years after the Effective Date of Termination for the CEO, (B) two (2) full years after the Effective Date of Termination for Tier 1 Participants,  (C) and eighteen (18) months  after the Effective Date of Termination for Tier 2 Participants; provided, however, that the Participant shall pay (or promptly reimburse the Company for the cost of) any portion of the premiums for such coverage that results in taxable income to the Participant attributable to the first six (6) months  following the Effective Date of Termination in excess of $5,000, and in such case, the Company shall repay the Participant the amount of such payment or reimbursement at the time provided in Section 5(a) for the payment of Severance Benefits. These benefits shall be provided to the Participant at the same premium cost, and at the same coverage level, as in effect as of his Effective Date of Termination. However, in the event the premium cost and/or level of coverage shall change for all employees of the Company, or for management employees with respect to supplemental benefits, the cost and/or coverage level, likewise, shall change for the Participant in a corresponding manner.  The continuation of these welfare benefits shall be discontinued prior to the end of the three (3) year, two (2) year, or eighteen (18) month period, as applicable, to the extent such Participant has available substantially similar benefits at a comparable cost from a subsequent employer, as determined by the Committee.

(v)       In a single payment, an amount in cash equal to the amount of the Company’s employer contributions made on behalf of the Participant under all defined contribution plans of the Company for the plan year immediately

9

preceding the Effective Date of Termination (or, if higher, for the plan year immediately prior to the Change in Control).

(e)      Other Benefits.  Compensation which has been deferred under the Company’s nonqualified deferred compensation plans, increased with applicable notional interest and adjusted for applicable notional gains and losses, shall be distributed pursuant to the terms of the applicable plan.  In addition, the Participant’s benefits, if any, under the John Deere Supplemental Pension Benefit Plan, the John Deere Senior Supplementary Pension Benefit Plan and any other nonqualified defined benefit pension plan will be calculated and distributed pursuant to the terms of the applicable plan.

(f)       Termination for Disability.  Following a Change in Control of the Company, if a Participant’s Employment is terminated due to Disability, such Participant shall receive his Base Salary through the date of termination, at which point in time such Participant’s benefits shall be determined in accordance with the Company’s disability, retirement, insurance, and other applicable plans and programs then in effect.  In the event a Participant’s Employment is terminated due to Disability, such Participant shall not be entitled to the Severance Benefits described in Section 4(d).

(g)      Termination for Death.   Following a Change in Control of the Company, if a Participant’s Employment is terminated by reason of the Participant’s death, such Participant’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance, and other applicable programs of the Company then in effect.  In the event a Participant’s Employment is terminated by reason of his death, such Participant shall not be entitled to the Severance Benefits described in Section 4(d).

(h)      Termination for Cause, or Other Than for Good Reason.  Following a Change in Control of the Company, if a Participant’s Employment is terminated either (i) by the Company for Cause; or (ii) by such Participant (other than for Good Reason), the Company shall pay such Participant his full Base Salary and accrued vacation through the date of termination, at the rate then in effect, plus all other amounts to which such Participant is entitled under any compensation and benefit plans of the Company, at the time such payments are due, and the Company shall have no further obligations to such Participant under the Program.

(i)       Notice of Termination. Any termination of Employment by a Participant for Good Reason shall be communicated by a Notice of Termination.

5.        Form and Timing of Severance Benefits

(a)      Form and Timing of Severance Benefits. The Severance Benefits described in Section 4(d) (other than those described in Section 4(d)(iv)) herein shall be paid in cash to such Participant in a single lump sum 185 days following the

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Effective Date of Termination (or if such date is not a business day, the next business day) (the “Payment Date”).

(b)      Withholding of Taxes. The Company shall be entitled to withhold from any amounts payable under the Program all taxes as legally shall be required (including, without limitation, any United States federal taxes and any other state, city, or local taxes).

6.        Excise Tax

(a)      Excise Tax. Subject to the last sentence of this Section 6(a), in the event that a Participant becomes entitled to Severance Benefits or any other payment or benefit under the Program, or under any other agreement with or plan of the Company (in the aggregate, the “Total Payments”), if all or any part of the Total Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), and if such Participant would receive a greater net after-tax amount if the Total Payments paid to such Participant were reduced to avoid the imposition of the Excise Tax, then the Total Payments paid to such Participant shall be reduced, such that the value of the aggregate payments that such Participant receives shall be one dollar ($1) less than the maximum amount which such Participant may receive without becoming subject to the Excise Tax, or which the Company may pay without loss of deduction under Section 280G(a) of the Code.  The reductions, if applicable, required by this Section 6(a) shall be made only from the following amounts in the following order:  first, from the lump sum payment contemplated by Section 5(a); and then, to the extent necessary, from other amounts payable to the Participant that do not constitute deferred compensation for purposes of Section 409A of the Code.

(b)      Tax Computation. All calculations done pursuant to Section 6(a), shall be made and determined reasonably and in good faith by the auditing firm which served as the Company’s independent auditors immediately prior to the Change in Control, and all such calculations made reasonably and in good faith shall be final and binding on the Company and such Participant, even if such calculations are subsequently challenged or revised by a court or applicable regulatory authority. For purposes of the calculations done pursuant to Section 6(a), a Participant shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Payment Date occurs and state and local income taxes at the highest marginal rate of taxation in the state and locality of such Participant’s residence on the Payment Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

(c)      Expenses. All of the fees and expenses of the accounting firm in performing the calculations referred to in Sections 6(a) and 6(b) above shall be borne solely by the Company.

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7.        The Company’s Payment Obligation

(a)      Payment Obligations Absolute. Subject to Section 8, the Company’s obligation to pay or provide the Severance Benefits provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against a Participant or anyone else.  All amounts payable by the Company hereunder shall be paid without notice or demand.  Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from a Participant or from whomsoever may be entitled thereto, for any reasons whatsoever.

Notwithstanding anything else herein to the contrary, however, if the Company (or any subsidiary or affiliate of the Company) is obligated by law to pay to a  Participant severance pay, a termination indemnity, notice pay, or the like (but excluding for this purpose accrued and unused vacation pay), or is obligated by law to provide to a  Participant advance notice of separation (“Notice Period”), then any Severance Benefits hereunder shall be reduced by the amount of any such severance pay, termination indemnity, notice pay or the like, as applicable, and by the amount of any compensation received during any Notice Period.

A Participant shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of the Program, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under the Program, except to the extent provided in Section 4(d)(iv) herein.

(b)      Contractual Rights to Benefits. Subject to Sections 3 and 14(d), the Program establishes and vests in a Participant a contractual right to the benefits to which he or she is entitled hereunder. However, nothing herein contained shall require or be deemed to prohibit the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

8.        Covenants and Release of the Participants.  Notwithstanding any other provision of the Program, a Participant’s entitlement to Severance Benefits shall be conditioned on the Participant’s executing a Restrictive Covenant and Release Agreement (the “Release”), substantially in the form attached hereto as Exhibit A, within sixty (60) days after the Participant’s Qualifying Termination (the “Release Deadline”) and such Release remaining in effect and becoming irrevocable after the expiration of any statutory period in which the Participant is permitted to revoke a release.  If the Participant fails to execute and deliver the Release by the Release Deadline, or if the Participant thereafter effectively revokes the Release, the Company shall be under no obligation to make any further payments or provide any further benefits to the Participant, and the Participant shall promptly repay 

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the Company any payments made to the Participant and the Company’s direct cost for any benefits provided to the Participant pursuant to the Program.

9.        Funding

Benefits payable under the Program shall be unfunded, as that term is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA, with respect to unfunded plans maintained primarily for the purpose of providing deferred compensation to a  select group of management or highly compensated employees, and the Administrator shall administer the Program in a manner that will ensure that benefits are unfunded and that Participants will not be considered to have received a taxable economic benefit prior to the time at which benefits are actually payable hereunder.  Accordingly, the Company shall not be required to segregate or earmark any of its assets for the benefit of Participants or their spouses or other beneficiaries, and each such person shall have only a contractual right against the Company for benefits hereunder.  The Company may from time to time establish a trust and deposit with the trustee thereof funds to be held in trust for the payment of benefits hereunder; provided, that the use of such funds for such purpose shall be subject to the claims of the Company’s general creditors as set forth in the agreement establishing any such trust.  The rights and interests of a Participant under the Program shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by a Participant or any person claiming under or through a Participant, nor shall they be subject to the debts, contracts, liabilities or torts of a Participant or anyone else prior to payment.  The Administrator may from time to time appoint an investment manager or managers for the funds held in any such trust.

10.      Administration

The Program shall be operated under the direction of the Committee and administered by the Administrator.  Subject to Section 6(b), the calculation of all benefits payable under the Program shall be performed by the Administrator, subject to the review of the Committee.  The Administrator shall have sole and complete discretionary authority and control to manage the operation and administration of the Plan, including but not limited to, the interpretation of all Plan provisions, determination of the amount of benefits payable to any Participant, spouse, heirs or estate, all legal and factual determinations, and construction of disputed or ambiguous term, and all such determinations shall be binding on all parties.  Notwithstanding the preceding sentence, all determinations of eligibility for participation and benefits under the Program as a Tier 1 Participant shall be made by the Committee.  The Administrator may delegate responsibilities under the Plan.  With respect to any instance where the Plan is administered relative to the Administrator, the Chief Executive Officer of the Company shall act as Administrator.

11.      Claims Procedure

All claims for benefits under the Program shall be determined under the claims procedure in effect under the Company’s tax-qualified defined benefit pension

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plan on the date that such claims are submitted, except that the Administrator shall make initial determinations with respect to claims hereunder and the Committee shall decide appeals of such determinations.

In the event that any dispute under the provisions of the Program is not resolved to the satisfaction of the affected Participant through the Program’s claims procedures described in the preceding paragraph, any dispute or controversy arising under or in connection with the Program may, at the sole election of the affected Participant, be settled by arbitration, conducted before a panel of three (3) arbitrators sitting in a location selected by the Participant within fifty (50) miles from the location of his employment with the Company, in accordance with the rules of the American Arbitration Association then in effect.

Judgment may be entered on the award of the arbitrator in any court having proper jurisdiction. All expenses of such arbitration, including the fees and expenses of the counsel for a  Participant, shall be borne by the Company. If applicable, payment or reimbursement of the Participant’s reasonable attorneys’ fees and expenses shall be made not later than December 31st of the calendar year following the year in which they are incurred.

12.     Legal Fees.

To the extent permitted by law, the Company shall pay all reasonable legal fees, costs of litigation or arbitration, prejudgment interest, and other expenses incurred in good faith by a Participant as a result of:

(a)       the Company’s refusal to provide the Severance Benefits to which a Participant becomes entitled under the Program, or

(b)       the Company’s contesting the validity, enforceability, or interpretation of the Program, or

(c)       any conflict between the parties pertaining to the Program.

If applicable, payment or reimbursement of the Participant’s reasonable attorneys’ fees and expenses shall be made not later than December 31st of the calendar year following the year in which they are incurred.

13.      Successors and Assignment

(a)      Successors to the Company. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, a similar business combination transaction or otherwise) of all or substantially all of the business and/or assets of the Company and its affiliates thereof to expressly assume and agree to perform the Company’s obligations under the Program in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. Assuming that such transaction otherwise constitutes a

14

Change in Control, the date on which any such succession becomes effective shall be deemed to be the date of the Change in Control.

(b)      Divestitures.  In the event of a Divestiture, the Company may, but shall not be obligated to, assign its obligations under the Program with respect to any Participant who immediately following such Divestiture will be employed by the entity that owns the divested entity, business unit or division to the Participant’s Post‑Divestiture Employer or any of its affiliates.  Upon the effectiveness of the agreement by such Post-Divestiture Employer or one of its affiliates to perform such obligations, the Company shall have no further obligations under the Program to such Participant.

(c)      Assignment by a Participant. The Program shall inure to the benefit of and be enforceable by a Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If a Participant dies while any amount would still be payable to him or her hereunder had he or she continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of the Program to such Participant’s beneficiary. If a Participant has not named a beneficiary, then such amounts shall be paid to such Participant’s devisee, legatee, or other designee, or if there is no such designee, to such Participant’s estate.

14.      Miscellaneous

(a)      Employment Status. Except as may be provided under any other agreement between a Participant and the Company or one of its 409A Affiliates, a Participant’s Employment is “at will,” and may be terminated by either the Participant or the Participant’s employer at any time, subject to applicable law.

(b)      Beneficiaries. The primary and/or contingent beneficiaries designated by a Participant pursuant to Company-provided life insurance benefits shall be the persons or entities who or which are the Beneficiaries of any Severance Benefits owing to such Participant under the Program.

(c)Severability. In the event any provision of the Program shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Program, and the Program shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of the Program are not part of the provisions hereof and shall have no force and effect.

(d)      Amend, Modify or Terminate.  Subject to the restrictions and limitations set forth in this Section 14(d), the Board (or any committee of the Board to whom the Board delegates it authority hereunder) may amend, modify or terminate the Program at any time in whole or in part without prior notice to, or without the consent of, any Participant or other person.  Notwithstanding the previous sentence, without the express written consent of an affected Participant, (i) the Board may not amend, modify or terminate the Program in any respect for a  Participant for whom a Qualifying

15

Separation has occurred or (ii) amend, modify or terminate the Program in a manner that is adverse to the Participant in any material respect during the twenty-four month period following a Change in Control or the six month period following a Potential Change in Control.  In addition, any amendment, modification or termination of the Program that would be precluded under the previous sentence without the express written consent of an affected Participant on or after a Change in Control shall not be given effect without the express written consent of the affected Participant if it is adopted within six months  prior to the occurrence of a Potential Change in Control or a  Change in Control.  Nothing in this Section 14(d) shall preclude a termination or reduction of a Participant’s status in the Program in accordance with Section 3(c).

(e)      Applicable Law.  TO THE EXTENT NOT PREEMPTED BY THE LAWS OF THE UNITED STATES OR ANY OTHER LAW MANDATORILY APPLYING TO A PARTICIPANT’S EMPLOYMENT, THE LAWS OF THE STATE OF ILLINOIS SHALL BE THE CONTROLLING LAW IN ALL MATTERS RELATING TO THE PROGRAM.

15.      Effect on Prior Agreements.

By virtue of a Participant’s participation in the Program, the Participant and the Company acknowledge that:  (a) the Program supersedes all prior written or oral agreements between them, including, but not limited to, any Change in Control Agreement or Severance Protection Agreement which a Participant and the Company may have entered into; and (b) as of the Participation Date, any and all such prior agreements are null and void.

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EXHIBIT A

RESTRICTIVE COVENANT AND RELEASE AGREEMENT

This Restrictive Covenant and Release Agreement (this “Agreement”) is entered into by the undersigned effective as of [INSERT DATE]1 (“Effective Date”).

In consideration of the severance benefits to be provided to me under the Change in Control Severance Program of Deere & Company (the “Severance Program”), I agree as follows:

1.        Return of Property.  All Company files, access keys and codes, desk keys, ID badges, computers, records, manuals, electronic devices, computer programs, papers, electronically stored information or documents, telephones and credit cards, and any other property of the Deere & Company or any of its affiliates (the “Company”) in my possession must be returned no later than the Effective Date.

2.        Non-Disclosure and Non-Solicitations Covenants.

(a)      Disclosure of Information.  As a result of my employment with the Company, I had access to and knowledge of certain confidential and proprietary information of the Company.  I shall not, in whole or in part, disclose such information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall I make use of any such information for my own purposes.

(b)      Covenants Regarding Other Employees.  For a period beginning on the date of my Qualifying Termination (as defined in the Severance Program) and ending two (2) years following the payment of the lump sum severance benefits provided for in Section 4(c) of the Severance Program, I agree not to:

(i)        attempt to induce any employee of the Company to (i) terminate his or her employment with the Company, or (ii) accept employment with any competitor of the Company; or

(ii)       interfere in a similar manner with the business of the Company.

3.        General Release and Waiver of Claims.

(a)       Release. In consideration of the payments and benefits provided to me under the Severance Program and after consultation with counsel, I and each of my respective heirs, executors, administrators, representatives, agents, insurers, successors and assigns (collectively, the “Releasors”) hereby irrevocably and unconditionally release and forever discharge the Company, its subsidiaries and affiliates and each of their respective officers, employees, directors, shareholders and 

1       PURSUANT TO SECTION 8 OF PROGRAM, THE EFFECTIVE DATE SHOULD BE NO MORE THAN 60 DAYS FOLLOWING DATE OF QUALIFYING TERMINATION.

1

agents (“Releasees”) from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”), including, without limitation, any Claims under any federal, state, local or foreign law, that the Releasors may have, or in the future may possess, arising out of (i) my employment relationship with and service as an employee, officer or director of the Company or any subsidiaries or affiliated companies and the termination of such relationship or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that I does not release, discharge or waive any rights to (i) payments and benefits provided under the Severance Program that are contingent upon my execution of this Agreement and (ii) any indemnification rights I may have in accordance with the Company’s governance instruments or under any director and officer liability insurance maintained by the Company with respect to liabilities arising as a result of my service as an officer and employee of the Company.  This Section 3(a) does not apply to any Claims that the Releasors may have as of the date I sign this Agreement arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  Claims arising under ADEA are addressed in Section 3(b) of this Agreement.

(b)      Specific Release of ADEA Claims.  In further consideration of the payments and benefits provided to me under the Severance Program, the Releasors hereby unconditionally release and forever discharge the Releasees from any and all Claims arising under ADEA that the Releasors may have as of the date I sign this Agreement.  By signing this Agreement, I hereby acknowledge and confirm the following: (i) I was advised by the Company in connection with my termination to consult with an attorney of my choice prior to signing this Agreement and to have such attorney explain to me the terms of this Agreement, including, without limitation, the terms relating to my release of claims arising under ADEA, and I have in fact consulted with an attorney; (ii) I was given a period of not fewer than 21 days to consider the terms of this Agreement and to consult with an attorney of my choosing with respect thereto; (iii) I knowingly and voluntarily accept the terms of this Agreement; and (iv) I am providing this release and discharge only in exchange for consideration in addition to anything of value to which I am already entitled.  I also understand that I have seven days following the date on which I sign this Agreement within which to revoke the release contained in this paragraph, by providing the Company with a written notice of my revocation of the release and waiver contained in this paragraph.

(c)      No Assignment.  I represent and warrant that I have not assigned any of the Claims being released under this Agreement.  The Company may assign this Agreement, in whole or in part, to any affiliated company or subsidiary of, or any successor in interest to, the Company.

4.        Proceedings.

(a)      General Agreement Relating to Proceedings.  I have not filed, and except as provided in Sections 4(b) and 4(c), I agree not to initiate or cause to be initiated on my behalf, any complaint, charge, claim or proceeding against the

2

Releasees before any local, state or federal agency, court or other body relating to my employment or the termination of my employment, other than with respect to the obligations of the Company to me under the Severance Program (each, individually, a “Proceeding”), and agree not to participate voluntarily in any Proceeding.  I waive any right I may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding.

(b)      Proceedings Under ADEA. Section 4(a) shall not preclude me from filing any complaint, charge, claim or proceeding challenging the validity of my waiver of Claims arising under ADEA (the ADEA waiver is set forth in Section 3(b) of this Agreement).  However, both the Company and I confirm our belief that my waiver of claims under ADEA is valid and enforceable, and my intention is that all claims under ADEA will be waived.

(c)      Certain Administrative Proceedings.  In addition, Section 4(a) shall not preclude me from filing a charge with or participating in any administrative investigation or proceeding by the Equal Employment Opportunity Commission or another Fair Employment Practices agency.  I am, however, waiving my right to recover money in connection with any such charge or investigation.  I am also waiving my right to recover money in connection with a charge filed by any other entity or individual, or by any federal, state or local agency.

5.        Remedies. In the event I initiate or voluntarily participate in any Proceeding in violation of this Agreement, or if I fail to abide by any of the terms of this Agreement or if I revoke the ADEA release contained in paragraph 3(b) within the seven-day period provided under paragraph 3(b), the Company shall be under no obligation to make any further payments or provide any further benefits to me, and I shall promptly repay the Company any payments made to me and the Company’s direct cost for any benefits provided to me pursuant to the Severance Program, without waiving the release granted herein.  I acknowledge and agree that the remedy at law available to the Company for breach of any of my obligations under paragraphs 2, 3 and 4 herein would be inadequate and that damages flowing from such a breach may not readily be susceptible to measurement in monetary terms.  Accordingly, I acknowledge, consent and agree that, in addition to any other rights or remedies that the Company may have at law or in equity, the Company shall be entitled to seek a temporary restraining order or a  preliminary or permanent injunction, or both, without bond or other security, restraining me from breaching my obligations under paragraphs 2, 3 and 4 herein.  Such injunctive relief in any court shall be available to the Company, in lieu of, or prior to or pending determination in, any arbitration proceeding.

I understand that by entering into this Agreement I shall be limiting the availability of certain remedies that I may have against the Company and limiting also my ability to pursue certain claims against the Company.

6.        Severability Clause.  If any provision or part of this Agreement is found to be invalid or unenforceable, only that particular provision or part, and not the entire Agreement, shall be inoperative.

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7.       GOVERNING LAW AND FORUM.  I acknowledge that this agreement has been executed, in whole or in part, in Illinois.  Accordingly, I agree that this Agreement and all matters or issues arising out of or relating to my employment with the Company shall be governed by the laws of the State of Illinois applicable to contracts entered into and performed entirely therein.  Any action to enforce this Agreement shall be brought solely in the state or federal courts located in the Moline, Illinois.

I ACKNOWLEDGE THAT I HAVE READ THIS AGREEMENT AND THAT I FULLY KNOW, UNDERSTAND AND APPRECIATE ITS CONTENTS, AND THAT I HEREBY EXECUTE THE SAME AND MAKE THIS AGREEMENT AND THE COVENANTS AND RELEASE PROVIDED FOR HEREIN VOLUNTARILY AND OF MY OWN FREE WILL.

THE EXECUTIVE

[Insert name of Executive]

Dated:

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EX-12

EXHIBIT 12

DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(In millions of dollars)

	Six Months Ended				Years Ended
	April 29		April 30		October 29		October 30		November 1		November 2		October 27
	2018		2017		2017		2016		2015		2014		2013
Earnings:
Income of consolidated group before income taxes	$	1,901.6	$	1,497.3	$	3,153.8	$	2,224.0	$	2,780.1	$	4,797.4	$	5,483.4
Dividends received from unconsolidated affiliates		4.7		3.2		3.6		8.3		1.3		.6		9.9
Fixed charges excluding unamortized capitalized interest		595.1		439.0		909.7		771.9		687.8		669.3		749.0
Total earnings	$	2,501.4	$	1,939.5	$	4,067.1	$	3,004.2	$	3,469.2	$	5,467.3	$	6,242.3
Fixed charges:
Interest expense of consolidated group including capitalized interest	$	593.2	$	436.8	$	903.4	$	769.0	$	687.4	$	670.2	$	754.8
Portion of rental charges deemed to be interest		5.1		4.1		10.2		8.2		7.8		5.3		7.7
Total fixed charges	$	598.3	$	440.9	$	913.6	$	777.2	$	695.2	$	675.5	$	762.5
Ratio of earnings to fixed charges		4.18		4.40		4.45		3.87		4.99		8.09		8.19

The computation of the ratio of earnings to fixed charges is based on applicable amounts of the Company and its consolidated subsidiaries plus dividends received from unconsolidated affiliates. “Earnings” consist of income before income taxes, the cumulative effect of changes in accounting, discontinued operations, and fixed charges excluding unamortized capitalized interest. “Fixed charges” consist of interest on indebtedness, amortization of debt discount and expense, interest related to uncertain tax positions, an estimated amount of rental expense that is deemed to be representative of the interest factor, and capitalized interest.

The Company has not issued preferred stock. Therefore, the ratios of earnings to combined fixed charges and preferred stock dividends are the same as the ratios presented above.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, S. R. Allen, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Deere & Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 31, 2018	By:	/s/ S. R. Allen
			S. R. Allen
			Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, R. Kalathur, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Deere & Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 31, 2018	By:	/s/ R. Kalathur
			R. Kalathur
			Senior Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

STATEMENT PURSUANT TO

18 U.S.C. SECTION 1350

AS REQUIRED BY

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Deere & Company (the “Company”) on Form 10-Q for the period ending April 29, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that to the best of our knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 31, 2018	/s/ S. R. Allen	Chairman and Chief Executive Officer
	S. R. Allen
May 31, 2018	/s/ R. Kalathur	Senior Vice President and Chief Financial Officer
	R. Kalathur

A signed original of this written statement required by Section 906 has been provided to Deere & Company and will be retained by Deere & Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information	6 Months Ended
	Apr. 29, 2018 shares
Document and Entity Information
Entity Registrant Name	DEERE & CO
Entity Central Index Key	0000315189
Document Type	10-Q
Document Period End Date	Apr. 29, 2018
Amendment Flag	false
Current Fiscal Year End Date	--10-28
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	324,284,554
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

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STATEMENT OF CONSOLIDATED INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Net Sales and Revenues
Net sales	$ 9,747.0	$ 7,259.8	$ 15,721.0	$ 11,957.7
Finance and interest income	753.9	665.0	1,476.8	1,320.5
Other income	219.1	362.2	435.7	634.0
Total	10,720.0	8,287.0	17,633.5	13,912.2
Costs and Expenses
Cost of sales	7,333.3	5,427.7	12,037.8	9,209.2
Research and development expenses	415.2	325.4	772.0	637.5
Selling, administrative and general expenses	939.2	783.6	1,644.3	1,451.0
Interest expense	303.7	226.9	590.0	434.9
Other operating expenses	344.9	354.1	687.8	682.3
Total	9,336.3	7,117.7	15,731.9	12,414.9
Income of Consolidated Group before Income Taxes	1,383.7	1,169.3	1,901.6	1,497.3
Provision for income taxes	177.1	365.8	1,234.7	495.1
Income of Consolidated Group	1,206.6	803.5	666.9	1,002.2
Equity in income of unconsolidated affiliates	3.1	4.8	8.0	4.5
Net Income	1,209.7	808.3	674.9	1,006.7
Less: Net income (loss) attributable to noncontrolling interests	1.4	(0.2)	1.7	(0.8)
Net Income Attributable to Deere & Company	$ 1,208.3	$ 808.5	$ 673.2	$ 1,007.5
Per Share Data
Basic (in dollars per share)	$ 3.73	$ 2.53	$ 2.08	$ 3.17
Diluted (in dollars per share)	$ 3.67	$ 2.50	$ 2.05	$ 3.14
Average Shares Outstanding
Basic (in shares)	324.2	319.2	323.4	317.9
Diluted (in shares)	329.2	323.0	328.4	321.3

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STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME
Net income	$ 1,209.7	$ 808.3	$ 674.9	$ 1,006.7
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment	118.9	33.6	165.2	76.6
Cumulative translation adjustment	1.6	16.7	224.9	(1.0)
Unrealized gain on derivatives	4.9		10.3	2.0
Unrealized gain (loss) on investments	(9.3)	58.7	(9.5)	52.9
Other Comprehensive Income (Loss), Net of Income Taxes	116.1	109.0	390.9	130.5
Comprehensive Income of Consolidated Group	1,325.8	917.3	1,065.8	1,137.2
Less: Comprehensive income (loss) attributable to noncontrolling interests	1.7	(0.2)	2.1	(0.8)
Comprehensive Income Attributable to Deere & Company	$ 1,324.1	$ 917.5	$ 1,063.7	$ 1,138.0

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CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017	Oct. 30, 2016
ASSETS
Cash and cash equivalents	$ 4,201.4	$ 9,334.9	$ 4,525.8	$ 4,335.8
Marketable securities	479.3	451.6	546.3
Receivables from unconsolidated affiliates	34.3	35.9	34.9
Trade accounts and notes receivable - net	6,511.1	3,924.9	4,482.3
Financing receivables - net	24,275.5	25,104.1	23,301.1
Financing receivables securitized - net	4,436.3	4,158.8	4,281.8
Other receivables	1,398.2	1,200.0	931.3
Equipment on operating leases - net	6,723.1	6,593.7	5,923.9
Inventories	6,888.9	3,904.1	4,114.8
Property and equipment - net	5,742.9	5,067.7	4,959.9
Investments in unconsolidated affiliates	202.1	182.5	215.7
Goodwill	3,188.7	1,033.3	806.2	816.0
Other intangible assets - net	1,692.2	218.0	90.8
Retirement benefits	617.9	538.2	176.2
Deferred income taxes	1,718.5	2,415.0	3,041.9
Other assets	1,762.6	1,623.6	1,535.9
Total Assets	69,873.0	65,786.3	58,968.8
LIABILITIES
Short-term borrowings	10,894.6	10,035.3	7,963.6
Short-term securitization borrowings	4,401.1	4,118.7	4,224.6
Payables to unconsolidated affiliates	145.7	121.9	101.6
Accounts payable and accrued expenses	9,789.6	8,417.0	7,215.9
Deferred income taxes	562.7	209.7	169.0
Long-term borrowings	26,278.6	25,891.3	23,253.1
Retirement benefits and other liabilities	7,366.1	7,417.9	8,333.2
Total liabilities	59,438.4	56,211.8	51,261.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	14.6	14.0	14.0
STOCKHOLDERS' EQUITY
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204)	4,423.4	4,280.5	4,165.4
Common stock in treasury	(15,425.9)	(15,460.8)	(15,521.0)
Retained earnings	25,586.0	25,301.3	24,535.8
Accumulated other comprehensive income (loss)	(4,173.2)	(4,563.7)	(5,495.5)
Total Deere & Company stockholders' equity	10,410.3	9,557.3	7,684.7
Noncontrolling interests	9.7	3.2	9.1
Total stockholders' equity	10,420.0	9,560.5	7,693.8	$ 6,530.8
Total Liabilities and Stockholders' Equity	$ 69,873.0	$ 65,786.3	$ 58,968.8

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CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical)	Apr. 29, 2018 $ / shares shares
CONDENSED CONSOLIDATED BALANCE SHEET
Common stock, par value (in dollars per share) | $ / shares	$ 1
Common stock, issued shares | shares	536,431,204

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STATEMENT OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017
Cash Flows from Operating Activities
Net income	$ 674.9	$ 1,006.7
Adjustments to reconcile net income to net cash used for operating activities:
Provision for credit losses	26.8	32.6
Provision for depreciation and amortization	950.8	843.1
Share-based compensation expense	39.8	32.3
Gain on sale of affiliates and investments	(13.2)	(281.4)
Undistributed earnings of unconsolidated affiliates	(4.5)	(3.1)
Provision (credit) for deferred income taxes	604.3	(100.4)
Changes in assets and liabilities:
Trade, notes and financing receivables related to sales	(2,094.1)	(989.5)
Inventories	(1,796.8)	(1,090.4)
Accounts payable and accrued expenses	306.9	103.6
Accrued income taxes payable/receivable	153.0	195.1
Retirement benefits	67.6	115.6
Other	(137.2)	(27.9)
Net cash used for operating activities	(1,221.7)	(163.7)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)	8,780.9	8,228.0
Proceeds from maturities and sales of marketable securities	23.8	41.3
Proceeds from sales of equipment on operating leases	748.6	786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold	55.0
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold		113.9
Cost of receivables acquired (excluding receivables related to sales)	(8,181.2)	(7,628.6)
Acquisitions of businesses, net of cash acquired	(5,171.1)
Purchases of marketable securities	(62.8)	(43.7)
Purchases of property and equipment	(352.2)	(253.0)
Cost of equipment on operating leases acquired	(926.5)	(925.1)
Other	(67.5)	(18.7)
Net cash provided by (used for) investing activities	(5,153.0)	300.5
Cash Flows from Financing Activities
Increase in total short-term borrowings	199.1	183.1
Proceeds from long-term borrowings	4,077.7	2,661.6
Payments of long-term borrowings	(2,888.7)	(2,742.2)
Proceeds from issuance of common stock	198.6	383.6
Repurchases of common stock	(60.6)	(6.2)
Dividends paid	(386.9)	(379.5)
Other	(43.9)	(39.7)
Net cash provided by financing activities	1,095.3	60.7
Effect of Exchange Rate Changes on Cash and Cash Equivalents	145.9	(7.5)
Net Increase (Decrease) in Cash and Cash Equivalents	(5,133.5)	190.0
Cash and Cash Equivalents at Beginning of Period	9,334.9	4,335.8
Cash and Cash Equivalents at End of Period	$ 4,201.4	$ 4,525.8

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STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY - USD ($) $ in Millions	Common Stock	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Total
Balance at Oct. 30, 2016	$ 3,911.8	$ (15,677.1)	$ 23,911.3	$ (5,626.0)	$ 10.8	$ 6,530.8
Increase (Decrease) in Stockholders' Equity
Net income (loss)			1,007.5		(0.8)	1,006.7
Other comprehensive income				130.5		130.5
Repurchases of common stock		(6.2)				(6.2)
Treasury shares reissued		162.3				162.3
Dividends declared			(382.9)		(0.7)	(383.6)
Stock options and other	253.6		(0.1)		(0.2)	253.3
Balance at Apr. 30, 2017	4,165.4	(15,521.0)	24,535.8	(5,495.5)	9.1	7,693.8
Redeemable Noncontrolling Interest - Balance at Oct. 30, 2016						14.0
Redeemable Noncontrolling Interest - Balance at Apr. 30, 2017						14.0
Balance at Oct. 29, 2017	4,280.5	(15,460.8)	25,301.3	(4,563.7)	3.2	9,560.5
Increase (Decrease) in Stockholders' Equity
Net income (loss)			673.2		1.1	674.3
Other comprehensive income				390.5	0.4	390.9
Repurchases of common stock		(60.6)				(60.6)
Treasury shares reissued		95.5				95.5
Dividends declared			(389.5)		(2.7)	(392.2)
Acquisitions (Note 18)					7.5	7.5
Stock options and other	142.9		1.0		0.2	144.1
Balance at Apr. 29, 2018	$ 4,423.4	$ (15,425.9)	$ 25,586.0	$ (4,173.2)	$ 9.7	10,420.0
Redeemable Noncontrolling Interest - Balance at Oct. 29, 2017						14.0
Increase in Redeemable Noncontrolling Interest
Net income						0.6
Redeemable Noncontrolling Interest - Balance at Apr. 29, 2018						$ 14.6

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ORGANIZATION AND CONSOLIDATION

6 Months Ended

Apr. 29, 2018

ORGANIZATION AND CONSOLIDATION

ORGANIZATION AND CONSOLIDATION

(1)  The information in the notes and related commentary are presented in a format which includes data grouped as follows:

Equipment Operations – Includes the Company’s agriculture and turf operations and construction and forestry operations with financial services reflected on the equity basis. On December 1, 2017, the Company acquired the stock and certain assets of substantially all of the business of Wirtgen Group Holding GmbH (Wirtgen). Wirtgen results are included in the construction and forestry operations (see Note 18).

Financial Services – Includes primarily the Company’s financing operations.

Consolidated – Represents the consolidation of the equipment operations and financial services. References to "Deere & Company" or "the Company" refer to the entire enterprise.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2018 and 2017 were April 29, 2018 and April 30, 2017, respectively. Both periods contained 13 weeks.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

6 Months Ended

Apr. 29, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2)  The interim consolidated financial statements of Deere & Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

CASH FLOW INFORMATION

Cash Flow Information

All cash flows from the changes in trade accounts and notes receivable are classified as operating activities in the statement of consolidated cash flows as these receivables arise from sales to the Company’s customers. Cash flows from financing receivables that are related to sales to the Company’s customers are also included in operating activities. The remaining financing receivables are related to the financing of equipment sold by independent dealers and are included in investing activities.

The Company had the following non-cash operating and investing activities that were not included in the statement of consolidated cash flows. The Company transferred inventory to equipment on operating leases of approximately $357 million and $319 million in the first six months of 2018 and 2017, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $42 million and $32 million at April 29, 2018 and April 30, 2017, respectively.

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NEW ACCOUNTING STANDARDS

6 Months Ended

Apr. 29, 2018

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS

(3)  New accounting standards adopted are as follows:

In the first quarter of 2018, the Company early adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends Accounting Standards Codification (ASC) 715, Compensation – Retirement Benefits. This ASU required that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of operating profit in the income statement line other operating expenses. The ASU was adopted on a retrospective basis that increased operating profit in the second quarter and first six months of 2018 by $4 million and $12 million, respectively, and second quarter and first six months of 2017 by $7 million and $14 million, respectively. The income statement line changes for the second quarter and first six months of 2017 were cost of sales decreased $17 million and $32 million, research and development expenses increased $1 million and $2 million, selling, administrative and general expenses increased $9 million and $16 million, and other operating expenses increased $7 million and $14 million, respectively. In addition, only the service cost component of the benefit costs is eligible for capitalization, which was adopted beginning the first quarter of 2018.

In the third quarter of 2017, the Company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU changes the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting, instead of common stock. As required, this change was reflected for all periods in fiscal year 2017. Net income increased in the second quarter and first six months of fiscal year 2017 by approximately $6 million and $11 million, respectively. The ASU also modified the presentation of excess tax benefits in the statement of consolidated cash flows by including that amount with other income tax cash flows as an operating activity and no longer presented separately as a financing activity. This change was recognized through a retrospective application that increased net cash flow provided by operating activities by approximately $11 million for the first six months of fiscal year 2017. The ASU also requires that cash paid by an employer when directly withholding shares for tax withholding purposes should be presented as a financing activity in the statement of consolidated cash flows, which is the Company’s existing presentation. The Company will continue to recognize the impact of share-based payment award forfeitures as the forfeitures occur.

In the first quarter of 2018, the Company adopted ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments – Equity Method and Joint Ventures, which did not have a material effect on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which amends ASC 740, Income Taxes. In December 2017, the U.S. government enacted new tax legislation (tax reform). This ASU incorporates SEC Staff Accounting Bulletin No. 118, which was also issued in December 2017, into the ASC. The ASU provides guidance on when to record and disclose provisional amounts related to tax reform. In addition, the ASU allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements and was effective when issued. The Company will complete the adjustments related to tax reform within the allowed period. The effects of tax reform on the Company’s consolidated financial statements are outlined in Note 8.

New accounting standards to be adopted are as follows:

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The Company will adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The Company’s evaluation of the ASU is largely complete, with the exception of the Wirtgen acquisition (see Note 18). The ASU requires that a gross asset and liability rather than a net liability be recorded for the value of estimated service parts returns and the related refund liability. The gross asset will be recorded in other assets and the gross liability will be recorded in accounts payable and accrued expenses. In addition, certain revenue disclosures will be expanded. At this point of the evaluation, the Company has not identified an item that will have a material effect on the Company’s consolidated financial statements. The Company continues to evaluate the ASU’s potential effects on the consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments - Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in Other Comprehensive Income (OCI). The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU currently requires that lessees and lessors use a modified retrospective transition approach. In January 2018, the FASB issued an exposure draft to provide for an adoption option that would not require earlier periods to be restated at the adoption date. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential adoption options and the effects on the consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends ASC 310-20, Receivables – Nonrefundable Fees and Other Costs. This ASU reduces the amortization period for certain callable debt securities held at a premium to the earliest call date. The treatment of securities held at a discount is unchanged. The effective date is the first quarter of fiscal year 2020, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year 2019, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which amends ASC 220, Income Statement – Reporting Comprehensive Income. Included in the provisions of tax reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. Accounting principles generally accepted in the U.S. require that deferred taxes are remeasured to the new corporate tax rate in the period legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in OCI. This treatment results in the items in OCI not reflecting the appropriate tax rate, which are referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. The effective date is fiscal year 2020, with early adoption permitted, including in interim periods. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is evaluating the potential effects of the ASU on the consolidated financial statements.

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OTHER COMPREHENSIVE INCOME ITEMS

6 Months Ended

Apr. 29, 2018

OTHER COMPREHENSIVE INCOME ITEMS

OTHER COMPREHENSIVE INCOME ITEMS

(4)  The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow:

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Investments		Income (Loss)
Balance October 30, 2016	$	(4,409)	$	(1,229)	$	1	$	11	$	(5,626)
Other comprehensive income (loss) items before reclassification		(13)		(1)				165		151
Amounts reclassified from accumulated other comprehensive income		89				2		(112)		(21)
Net current period other comprehensive income (loss)		76		(1)		2		53		130
Balance April 30, 2017	$	(4,333)	$	(1,230)	$	3	$	64	$	(5,496)
Balance October 29, 2017	$	(3,580)	$	(999)	$	5	$	10	$	(4,564)
Other comprehensive income (loss) items before reclassification		81		225		11		(9)		308
Amounts reclassified from accumulated other comprehensive income		84				(1)				83
Net current period other comprehensive income (loss)		165		225		10		(9)		391
Balance April 29, 2018	$	(3,415)	$	(774)	$	15	$	1	$	(4,173)

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment			$	1	$	1
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)	$	7		(1)		6
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		6		(1)		5
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		39		(9)		30
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		54		(14)		40
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		15		(4)		11
Prior service (credit) cost		(19)		5		(14)
Net unrealized gain (loss) on retirement benefits adjustments		158		(39)		119
Total other comprehensive income (loss)	$	152	$	(36)	$	116

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment	$	225			$	225
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15	$	(4)		11
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		14		(4)		10
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		46		(11)		35
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		115		(34)		81
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		31		(9)		22
Prior service (credit) cost		(38)		11		(27)
Net unrealized gain (loss) on retirement benefits adjustments		226		(61)		165
Total other comprehensive income (loss)	$	453	$	(62)	$	391

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	17			$	17
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(4)	$	2		(2)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1		(1)
Foreign exchange contracts – Other operating expenses		3		(1)		2
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		269		(99)		170
Reclassification of realized (gain) loss – Other income		(176)		65		(111)
Net unrealized gain (loss) on investments		93		(34)		59
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(8)		3		(5)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		61		(22)		39
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		24		(9)		15
Prior service (credit) cost		(19)		7		(12)
Net unrealized gain (loss) on retirement benefits adjustments		52		(19)		33
Total other comprehensive income (loss)	$	162	$	(53)	$	109

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

In the second quarter of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $1.7 million and $(.2) million, respectively, which consisted of net income (loss) of $1.4 million and $(.2) million and cumulative translation adjustments of $.3 million and none, respectively.

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	(1)			$	(1)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1				1
Foreign exchange contracts – Other operating expenses		2	$	(1)		1
Net unrealized gain (loss) on derivatives		3		(1)		2
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		262		(97)		165
Reclassification of realized (gain) loss – Other income		(178)		66		(112)
Net unrealized gain (loss) on investments		84		(31)		53
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(9)		3		(6)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		121		(44)		77
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		49		(18)		31
Prior service (credit) cost		(38)		14		(24)
Net unrealized gain (loss) on retirement benefits adjustments		120		(44)		76
Total other comprehensive income (loss)	$	206	$	(76)	$	130

* These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail.

In the first six months of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $2.1 million and $(.8) million, respectively, which consisted of net income (loss) of $1.7 million and $(.8) million and cumulative translation adjustments of $.4 million and none, respectively.

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DIVIDENDS DECLARED AND PAID

6 Months Ended

Apr. 29, 2018

DIVIDENDS DECLARED AND PAID

DIVIDENDS DECLARED AND PAID

(5)  Dividends declared and paid on a per share basis were as follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Dividends declared	$	.60	$	.60	$	1.20	$	1.20
Dividends paid	$	.60	$	.60	$	1.20	$	1.20

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EARNINGS PER SHARE

6 Months Ended

Apr. 29, 2018

EARNINGS PER SHARE

EARNINGS PER SHARE

(6)  A  reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net income attributable to Deere & Company	$	1,208.3	$	808.5	$	673.2	$	1,007.5
Less income allocable to participating securities		.2		.2		.1		.3
Income allocable to common stock	$	1,208.1	$	808.3	$	673.1	$	1,007.2
Average shares outstanding		324.2		319.2		323.4		317.9
Basic per share	$	3.73	$	2.53	$	2.08	$	3.17
Average shares outstanding		324.2		319.2		323.4		317.9
Effect of dilutive share-based compensation		5.0		3.8		5.0		3.4
Total potential shares outstanding		329.2		323.0		328.4		321.3
Diluted per share	$	3.67	$	2.50	$	2.05	$	3.14

During the second quarter and first six months of 2018, .5 million shares and .3 million shares, respectively, were excluded from the computation because the incremental shares would have been antidilutive. During the second quarter and first six months of 2017, .7 million shares and .5 million shares, respectively, were excluded in the above per share computation.

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PENSION AND POSTRETIREMENT BENEFITS

6 Months Ended

Apr. 29, 2018

PENSION AND POSTRETIREMENT BENEFITS

PENSION AND POSTRETIREMENT BENEFITS

(7)  The Company has several defined benefit pension plans and defined postretirement health care and life insurance plans covering many of its U.S. employees and employees in certain foreign countries.

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	76	$	67	$	148	$	135
Interest cost		97		90		195		180
Expected return on plan assets		(194)		(197)		(388)		(394)
Amortization of actuarial loss		54		61		115		121
Amortization of prior service cost		3		3		6		6
Settlements/curtailments		6		1		6		1
Net cost	$	42	$	25	$	82	$	49

The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	11	$	11	$	22	$	21
Interest cost		48		49		96		98
Expected return on plan assets		(6)		(5)		(11)		(9)
Amortization of actuarial loss		15		24		31		49
Amortization of prior service credit		(19)		(19)		(38)		(38)
Net cost	$	49	$	60	$	100	$	121

The components of net periodic pension and postretirement benefits cost excluding the service cost component are included in the line item other operating expenses in the Statement of Consolidated Income.

In the second quarter, a committee of the Company’s Board of Directors approved a voluntary $1,000 million contribution to its U.S. pension and postretirement benefit plans. During the first six months of 2018, the Company contributed approximately $86 million to its pension plans, which included a $50 million voluntary contribution to a U.S. plan, and $31 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $851 million to its pension plans and $138 million to its other postretirement benefit plans during the remainder of fiscal year 2018. The anticipated total contributions include voluntary contributions of $820 million to a U.S. pension plan and $130 million to a U.S. postretirement benefit plan, which will increase plan assets. The other contributions primarily include payments from Company funds to make direct payments to plan participants.

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INCOME TAXES

6 Months Ended

Apr. 29, 2018

INCOME TAXES

INCOME TAXES

(8)  On December 22, 2017, the U.S. government enacted tax reform. The primary provisions of tax reform expected to impact the Company in fiscal year 2018 are a reduction to the corporate income tax rate from 35 percent to 21 percent and a transition from a worldwide corporate tax system to a territorial tax system. The reduction in the corporate income tax rate requires the Company to remeasure its net deferred tax assets to the new corporate tax rate and the transition to a territorial tax system requires payment of a one-time tax on deemed repatriation of undistributed and previously untaxed non-U.S. earnings. The Company currently plans to pay the deemed repatriation tax over an eight year period, as allowed by tax reform.

In December 2017, the SEC issued a staff accounting bulletin that allows for a measurement period up to one year after the enactment date of tax reform to complete the related accounting requirements. The tax reform measurement period adjustments and the effects on the results of the second quarter and first six months of 2018 in millions of dollars follow:

	Three Months Ended April 29, 2018						Six Months Ended April 29, 2018
	Equipment Operations			Financial Services	Total		Equipment Operations			Financial Services	Total
Net deferred tax asset remeasurement	$	(158)	$	(19)	$	(177)	$	853	$	(314)	$	539
Deemed earnings repatriation tax		(49)		52		3		179		85		264
Total discrete tax expense (benefit)	$	(207)	$	33	$	(174)	$	1,032	$	(229)	$	803

The second quarter measurement period benefit on the net deferred tax assets primarily results from the planned, voluntary $1,000 million contribution to U.S. pension and other postretirement benefit plans, which results in a tax deduction applicable to the 2017 tax year. The Company received authorization for this contribution in the second quarter (see Note 7). The provision for income taxes was also affected by other tax reform items, primarily the lower corporate income tax rate on current year income.

The 21 percent corporate income tax rate is effective January 1, 2018. Based on the Company’s October fiscal year end, the U.S. statutory income tax rate for fiscal year 2018 will be approximately 23.3 percent.

The first six months of 2018 tax expense is provisional as outlined below and may change during the remaining measurement period. The Company completed a preliminary assessment of earnings that could be repatriated based on reinvestment needs of non-U.S. operations and earnings available for repatriation. The estimated withholding tax that would be incurred from the repatriation of those earnings is included in the first six months of 2018 provisional income tax expense. The Company continues to analyze the provisions of tax reform addressing the net deferred tax asset remeasurement and the calculations, and the deemed earnings repatriation tax, including the determination of undistributed non-U.S. earnings. In addition, the Company is evaluating actions, including repatriating additional non-U.S. earnings and other actions that could affect the Company’s 2017 U.S. taxable income. The Company also continues to prepare its 2017 U.S. income tax returns, undergo income tax audits, and monitor potential legislative action and regulatory interpretations of tax reform.

Based on the effective date of certain provisions, the Company will be subject to additional requirements of tax reform beginning in fiscal year 2019. Those provisions include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion and anti-abuse tax benefits (BEAT) from certain payments between a U.S. corporation and foreign subsidiaries, a limitation of certain executive compensation, a deduction for foreign derived intangible income (FDII), and interest expense limitations. The Company has not completed its analysis of those provisions and the estimated effects. The Company also has not determined its accounting policy to treat the taxes due on GILTI as a period cost or include them in the determination of deferred taxes.

The Company’s unrecognized tax benefits at April 29, 2018 were $421 million, compared to $221 million at October 29, 2017. The increase is primarily due to a review of the timing of deduction for certain U.S. expenses and the effect of a lower U.S. corporate tax rate. These positions remain under review. The liability at April 29, 2018, October 29, 2017, and April 30, 2017 consisted of approximately $157 million, $86 million, and $79 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. Based on the ongoing review of tax accounting methods affecting the timing of certain U.S. tax deductions, the Company believes a reduction of unrecognized tax benefits of approximately $160 million, with a positive impact on the effective tax rate of approximately $55 million, in the next 12 months is reasonably possible.

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SEGMENT REPORTING

6 Months Ended

Apr. 29, 2018

SEGMENT REPORTING

SEGMENT REPORTING

(9)  Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended					Six Months Ended
	April 29		April 30		%	April 29		April 30		%
	2018		2017		Change	2018		2017		Change
Net sales and revenues:
Agriculture and turf	$	7,049	$	5,794	+22	$	11,292	$	9,392	+20
Construction and forestry		2,698		1,466	+84		4,429		2,566	+73
Total net sales		9,747		7,260	+34		15,721		11,958	+31
Financial services		795		716	+11		1,572		1,412	+11
Other revenues		178		311	-43		340		542	-37
Total net sales and revenues	$	10,720	$	8,287	+29	$	17,633	$	13,912	+27
Operating profit: *
Agriculture and turf	$	1,056	$	1,009	+5	$	1,443	$	1,227	+18
Construction and forestry		259		111	+133		291		148	+97
Financial services		179		158	+13		396		325	+22
Total operating profit		1,494		1,278	+17		2,130		1,700	+25
Reconciling items **		(109)		(104)	+5		(222)		(198)	+12
Income taxes		(177)		(366)	-52		(1,235)		(495)	+149
Net income attributable to Deere & Company	$	1,208	$	808	+50	$	673	$	1,007	-33
Intersegment sales and revenues:
Agriculture and turf net sales	$	15	$	10	+50	$	24	$	17	+41
Construction and forestry net sales
Financial services		82		62	+32		145		111	+31
Equipment operations outside the U.S. and Canada:
Net sales	$	4,295	$	2,968	+45	$	6,804	$	4,860	+40
Operating profit		534		391	+37		680		467	+46

	April 29		October 29
	2018		2017
Identifiable assets:
Agriculture and turf	$	10,603	$	9,359	+13
Construction and forestry		10,471		3,212	+226
Financial services		44,278		42,596	+4
Corporate		4,521		10,619	-57
Total assets	$	69,873	$	65,786	+6

* 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 of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

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FINANCING RECEIVABLES

6 Months Ended

Apr. 29, 2018

FINANCING RECEIVABLES

FINANCING RECEIVABLES

(10)  Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	April 29, 2018
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	117	$	58	$	44	$	219
Construction and forestry		97		44		36		177
Other:
Agriculture and turf		32		16		28		76
Construction and forestry		11		4		2		17
Total	$	257	$	122	$	110	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	219	$	171	$	17,014	$	17,404
Construction and forestry		177		42		2,899		3,118
Other:
Agriculture and turf		76		16		7,072		7,164
Construction and forestry		17		4		1,192		1,213
Total	$	489	$	233	$	28,177		28,899
Less allowance for credit losses								187
Total financing receivables – net							$	28,712

	October 29, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	118	$	54	$	49	$	221
Construction and forestry		75		33		39		147
Other:
Agriculture and turf		27		14		7		48
Construction and forestry		11		6		2		19
Total	$	231	$	107	$	97	$	435
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	221	$	173	$	17,508	$	17,902
Construction and forestry		147		30		2,618		2,795
Other:
Agriculture and turf		48		12		7,610		7,670
Construction and forestry		19		5		1,059		1,083
Total	$	435	$	220	$	28,795		29,450
Less allowance for credit losses								187
Total financing receivables – net							$	29,263

	April 30, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	120	$	75	$	65	$	260
Construction and forestry		80		44		33		157
Other:
Agriculture and turf		37		12		27		76
Construction and forestry		12		4		2		18
Total	$	249	$	135	$	127	$	511
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	260	$	159	$	16,838	$	17,257
Construction and forestry		157		31		2,563		2,751
Other:
Agriculture and turf		76		10		6,692		6,778
Construction and forestry		18		4		952		974
Total	$	511	$	204	$	27,045		27,760
Less allowance for credit losses								177
Total financing receivables – net							$	27,583

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:

	Three Months Ended April 29, 2018
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	123	$	40	$	27	$	190
Provision		5		9		2		16
Write-offs		(7)		(15)		(1)		(23)
Recoveries		4		6				10
Translation adjustments		(5)				(1)		(6)
End of period balance *	$	120	$	40	$	27	$	187
	Six Months Ended April 29, 2018
Allowance:
Beginning of period balance	$	121	$	40	$	26	$	187
Provision		5		9		4		18
Write-offs		(14)		(20)		(3)		(37)
Recoveries		10		11				21
Translation adjustments		(2)						(2)
End of period balance *	$	120	$	40	$	27	$	187
Financing receivables:
End of period balance	$	20,522	$	3,205	$	5,172	$	28,899
Balance individually evaluated **	$	120	$	1	$	15	$	136

	Three Months Ended April 30, 2017
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	111	$	41	$	23	$	175
Provision		10		15		1		26
Write-offs		(15)		(18)		(1)		(34)
Recoveries		5		5				10
End of period balance *	$	111	$	43	$	23	$	177
	Six Months Ended April 30, 2017
Allowance:
Beginning of period balance	$	113	$	40	$	23	$	176
Provision		18		13		2		33
Write-offs		(27)		(20)		(3)		(50)
Recoveries		7		10		1		18
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	20,008	$	3,036	$	4,716	$	27,760
Balance individually evaluated **	$	148	$	4	$	17	$	169

* Individual allowances were not significant.

** Remainder is collectively evaluated.

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
April 29, 2018*
Receivables with specific allowance **	$	33	$	31	$	10	$	34
Receivables without a specific allowance **		41		40				43
Total	$	74	$	71	$	10	$	77
Agriculture and turf	$	52	$	51	$	9	$	54
Construction and forestry	$	22	$	20	$	1	$	23
October 29, 2017*
Receivables with specific allowance **	$	36	$	33	$	10	$	30
Receivables without a specific allowance ***		28		27				24
Total	$	64	$	60	$	10	$	54
Agriculture and turf	$	49	$	46	$	10	$	38
Construction and forestry	$	15	$	14			$	16
April 30, 2017*
Receivables with specific allowance **	$	23	$	22	$	9	$	26
Receivables without a specific allowance ***		27		24				28
Total	$	50	$	46	$	9	$	54
Agriculture and turf	$	28	$	26	$	8	$	32
Construction and forestry	$	22	$	20	$	1	$	22

*  Finance income recognized was not material.

** Primarily retail notes.

***Primarily retail notes and wholesale receivables.

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first six months of 2018, the Company identified 253 financing receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $13 million pre-modification and $13 million post-modification. During the first six months of 2017, there were 226 financing receivable contracts, primarily retail notes, identified as troubled debt restructurings with aggregate balances of $5 million pre-modification and $4 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 29, 2018, the Company had commitments to lend approximately $8 million to borrowers whose accounts were modified in troubled debt restructurings.

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SECURITIZATION OF FINANCING RECEIVABLES

6 Months Ended

Apr. 29, 2018

SECURITIZATION OF FINANCING RECEIVABLES

SECURITIZATION OF FINANCING RECEIVABLES

(11)  Securitization of financing receivables:

The Company, as a part of its overall funding strategy, periodically transfers certain financing receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors resulted in secured borrowings, which are recorded as “Short-term securitization borrowings” on the balance sheet. The securitized retail notes are recorded as “Financing receivables securitized – net” on the balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the financing receivables securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,489 million, $2,631 million, and $2,589 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) of these SPEs totaled $2,438 million, $2,571 million, and $2,522 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $686 million, $478 million, and $413 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) were $656 million, $454 million, and $390 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively.

In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,383 million, $1,155 million, and $1,395 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. The liabilities (short-term securitization borrowings and accrued interest) related to these conduits were $1,310 million, $1,096 million, and $1,315 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively.

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	April 29, 2018
Carrying value of liabilities	$	1,310
Maximum exposure to loss		1,383

The total assets of unconsolidated VIEs related to securitizations were approximately $36 billion at April 29, 2018.

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Financing receivables securitized (retail notes)	$	4,450	$	4,172	$	4,295
Allowance for credit losses		(14)		(13)		(13)
Other assets		122		105		115
Total restricted securitized assets	$	4,558	$	4,264	$	4,397

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Short-term securitization borrowings	$	4,401	$	4,119	$	4,225
Accrued interest on borrowings		3		2		2
Total liabilities related to restricted securitized assets	$	4,404	$	4,121	$	4,227

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At April 29, 2018, the maximum remaining term of all securitized retail notes was approximately seven years.

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INVENTORIES

6 Months Ended

Apr. 29, 2018

INVENTORIES

INVENTORIES

(12)  Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows:

	April 29		October 29		April 30
	2018		2017		2017
Raw materials and supplies	$	2,231	$	1,688	$	1,559
Work-in-process		900		495		531
Finished goods and parts		5,208		3,182		3,421
Total FIFO value		8,339		5,365		5,511
Less adjustment to LIFO value		1,450		1,461		1,396
Inventories	$	6,889	$	3,904	$	4,115

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GOODWILL AND OTHER INTANGIBLE ASSETS-NET

6 Months Ended

Apr. 29, 2018

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

(13)  The changes in amounts of goodwill by operating segments were as follows in millions of dollars:

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 30, 2016	$	323	$	493	$	816
Translation adjustments and other		(10)				(10)
Goodwill at April 30, 2017	$	313	$	493	$	806
Goodwill at October 29, 2017	$	521	$	512	$	1,033
Acquisitions *		25		2,060		2,085
Divestitures **				(10)		(10)
Translation adjustments		5		76		81
Goodwill at April 29, 2018	$	551	$	2,638	$	3,189

*  See Note 18.

** See Note 19.

There were no accumulated impairment losses in the reported periods.

The components of other intangible assets were as follows in millions of dollars:

	Useful Lives *	April 29		October 29		April 30
	(Years)	2018		2017		2017
Amortized intangible assets:
Customer lists and relationships	16	$	590	$	42	$	39
Technology, patents, trademarks, and other	18		1,109		139		129
Total at cost			1,699		181		168
Less accumulated amortization **			130		86		77
Total			1,569		95		91
Unamortized intangible assets:
In-process research and development			123		123
Other intangible assets – net		$	1,692	$	218	$	91

*  Weighted-averages

** Accumulated amortization at April 29, 2018, October 29, 2017, and April 30, 2017 for customer lists and relationships totaled $30 million, $17 million, and $15 million and technology, patents, trademarks, and other totaled $100 million, $69 million, and $62 million, respectively.

The amortization of other intangible assets in the second quarter and the first six months of 2018 was $31 million and $44 million and for 2017 was $4 million and $9 million, respectively. The estimated amortization expense for the next five years is as follows in millions of dollars: remainder of 2018 – $61, 2019 – $121, 2020 – $109, 2021 – $104, and 2022 – $104.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Apr. 29, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

(14)  Commitments and contingencies:

The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales. The historical claims rate is primarily determined by a review of five-year claims costs and current quality developments.

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. These unamortized extended warranty premiums (deferred revenue) included in the following table totaled $475 million and $444 million at April 29, 2018 and April 30, 2017, respectively.

A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	1,550	$	1,285	$	1,468	$	1,226
Payments		(213)		(167)		(430)		(332)
Amortization of premiums received		(57)		(54)		(113)		(97)
Accruals for warranties		260		238		453		470
Premiums received		65		55		126		95
Acquisitions *						80
Foreign exchange		(14)		8		7		3
End of period balance	$	1,591	$	1,365	$	1,591	$	1,365

*  See Note 18.

At April 29, 2018, the Company had approximately $447 million of guarantees issued primarily to banks outside the U.S. and Canada related to third-party receivables for the retail financing of John Deere and Wirtgen equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. The Company may recover a portion of any required payments incurred under these agreements from repossession of the equipment collateralizing the receivables. At April 29, 2018, the Company had accrued losses of approximately $16 million under these agreements. The maximum remaining term of the receivables guaranteed at April 29, 2018 was approximately eight years.

At April 29, 2018, the Company had commitments of approximately $328 million for the construction and acquisition of property and equipment. The increase from October 29, 2017 primarily relates to the Wirtgen acquisition. Also, at April 29, 2018, the Company had restricted assets of $123 million, primarily as collateral for borrowings and restricted other assets. See Note 11 for additional restricted assets associated with borrowings related to securitizations.

The Company also had other miscellaneous contingent liabilities totaling approximately $85 million at April 29, 2018. The accrued liability for these contingencies was not material at April 29, 2018.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to product liability (including asbestos-related liability), retail credit, employment, patent, and trademark matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Apr. 29, 2018

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

(15)  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	April 29, 2018				October 29, 2017				April 30, 2017
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations **	$	76	$	74
Financial services		24,200		23,997	$	25,104	$	24,946	$	23,301	$	23,141
Total	$	24,276	$	24,071	$	25,104	$	24,946	$	23,301	$	23,141
Financing receivables securitized – net:
Equipment operations **	$	113	$	110
Financial services		4,323		4,273	$	4,159	$	4,130	$	4,282	$	4,253
Total	$	4,436	$	4,383	$	4,159	$	4,130	$	4,282	$	4,253
Short-term securitization borrowings:
Equipment operations **	$	113	$	113
Financial services		4,288		4,274	$	4,119	$	4,118	$	4,225	$	4,225
Total	$	4,401	$	4,387	$	4,119	$	4,118	$	4,225	$	4,225
Long-term borrowings due within one year:
Equipment operations **	$	274	$	273	$	154	$	154	$	120	$	119
Financial services		6,566		6,559		6,064		6,079		5,339		5,345
Total	$	6,840	$	6,832	$	6,218	$	6,233	$	5,459	$	5,464
Long-term borrowings:
Equipment operations **	$	5,537	$	5,850	$	5,491	$	6,026	$	4,520	$	5,020
Financial services		20,742		20,769		20,400		20,606		18,733		18,864
Total	$	26,279	$	26,619	$	25,891	$	26,632	$	23,253	$	23,884

*  Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** See Note 18.

Fair values of the financing receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar financing receivables. The fair values of the remaining financing receivables approximated the carrying amounts.

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. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings included adjustments related to fair value hedges.

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow:

	April 29		October 29		April 30
	2018*		2017*		2017*
Marketable securities
Equity fund	$	46	$	48	$	135
Fixed income fund		14		15		15
U.S. government debt securities		86		77		79
Municipal debt securities		46		39		39
Corporate debt securities		137		135		132
International debt securities		17		20		28
Mortgage-backed securities **		133		118		118
Total marketable securities		479		452		546
Other assets
Derivatives:
Interest rate contracts		87		116		142
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		6		11		14
Total assets ***	$	673	$	687	$	762
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	341	$	131	$	79
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total liabilities	$	371	$	158	$	131

*  All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million, $48 million, and $135 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; the fixed income fund of $14 million, $15 million, and $15 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; and U.S. government debt securities of $42 million, $44 million, and $46 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. In addition, $14 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first six months of 2018 or 2017.

** Primarily issued by U.S. government sponsored enterprises.

***Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements.

The contractual maturities of debt securities at April 29, 2018 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	29	$	28
Due after one through five years		107		105
Due after five through 10 years		95		91
Due after 10 years		62		62
Mortgage-backed securities		139		133
Debt securities	$	432	$	419

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	15	$	23	$	17	$	28
Principal payments		(1)		(1)		(3)		(6)
Change in unrealized gain				1				1
End of period balance	$	14	$	23	$	14	$	23

Fair value,  nonrecurring Level 1 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended		Six Months Ended
	April 29	October 29		April 30	April 29	April 30	April 29	April 30
	2018	2017		2017	2018	2017	2018	2017
Investments in unconsolidated affiliates		$	28

* See financing receivables with specific allowances in Note 10. Losses were not significant.

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value:

Marketable Securities – The portfolio of investments, except for the Level 3 measurement international debt securities, is primarily valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are primarily valued using the fund’s net asset value, based on the fair value of the underlying securities. The Level 3 measurement international debt securities are primarily valued using an income approach based on discounted cash flows using yield curves derived from limited, observable market data.

Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency futures, forwards and swaps, and cross-currency interest rate swaps. 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.

Financing Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values.

Investment in Unconsolidated Affiliates – Other than temporary impairments for investments are measured as the difference between the implied fair value and the carrying value of the investments. The fair value for publicly traded entities is the share price multiplied by the shares owned.

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DERIVATIVE INSTRUMENTS

6 Months Ended

Apr. 29, 2018

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

(16)  It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement.

Cash flow hedges

Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $1,800 million, $1,700 million, and $1,600 million, respectively. The total notional amounts of the cross-currency interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $11 million, $22 million, and $32 million, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in OCI and subsequently reclassified into interest expense or other operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense or other operating expenses (foreign exchange) and were not material during any periods presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of gain recorded in OCI at April 29, 2018 that is expected to be reclassified to interest expense or other operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $9 million after-tax. These contracts mature in up to 26 months. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair value hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at April 29, 2018, October 29, 2017, and April 30, 2017 were $8,421 million, $8,661 million, and $7,605 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a loss of $2 million and none during the second quarter of 2018 and 2017, respectively, and a loss of $3 million and a gain of $2 million during the first six months of 2018 and 2017, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Interest rate contracts *	$	(123)	$	32	$	(271)	$	(202)
Borrowings **		121		(32)		268		204

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $5 million and $22 million during the second quarter of 2018 and 2017, respectively, and $17 million and $48 million during the first six months of 2018 and 2017, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64 million and $61 million during the second quarter of 2018 and 2017, respectively, and $127 million and $126 million during the first six months of 2018 and 2017, respectively.

Derivatives not designated as hedging instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures, primarily for certain borrowings and purchases or sales of inventory. The total notional amounts of these interest rate swaps at April 29, 2018, October 29, 2017, and April 30, 2017 were $7,189 million, $6,757 million, and $5,783 million, the foreign exchange contracts were $6,791 million, $8,499 million, and $4,600 million, and the cross-currency interest rate contracts were $92 million, $66 million, and $76 million, respectively. The increase in the total notional amounts of foreign exchange contracts at October 29, 2017 primarily relates to the Wirtgen acquisition (see Note 18). At April 29, 2018, October 29, 2017, and April 30, 2017, there were also $123 million, $253 million, and $366 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in cost of sales or other operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	April 29		October 29		April 30
Other Assets	2018		2017		2017
Designated as hedging instruments:
Interest rate contracts	$	34	$	74	$	116
Cross-currency interest rate contracts		3		5		7
Total designated		37		79		123
Not designated as hedging instruments:
Interest rate contracts		53		42		26
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		3		6		7
Total not designated		157		156		93
Total derivative assets	$	194	$	235	$	216
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	316	$	112	$	64
Total designated		316		112		64
Not designated as hedging instruments:
Interest rate contracts		25		19		15
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total not designated		55		46		67
Total derivative liabilities	$	371	$	158	$	131

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:

	Expense or	Three Months Ended				Six Months Ended
	OCI	April 29		April 30		April 29		April 30
	Classification	2018		2017		2018		2017
Fair Value Hedges:
Interest rate contracts	Interest	$	(118)	$	54	$	(254)	$	(154)
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *		6		(1)		14		2
Foreign exchange contracts	OCI (pretax) *		1		(3)		1		(2)
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *		1		(1)		1		(1)
Foreign exchange contracts	Other operating *				(3)				(2)
Recognized Directly in Income
(Ineffective Portion)			**		**		**		**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	(5)	$	(4)
Foreign exchange contracts	Cost of sales		36		28	$	(12)	$	(12)
Foreign exchange contracts	Other operating *		164		15		(52)		(13)
Total not designated		$	195	$	39	$	(64)	$	(25)

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

** The amounts are not significant.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual counterparty exposure by setting limits that consider the credit rating of the counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements include credit support provisions. Each master agreement permits the net settlement of amounts owed in the event of default or termination.

Certain of the Company’s derivative agreements contain credit support provisions that may require the Company 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 April 29, 2018, October 29, 2017, and April 30, 2017, was $344 million, $132 million, and $81 million, respectively. In accordance with the limits established in these agreements, the Company posted $32 million in cash collateral at April 29, 2018. No cash collateral was posted or received at either October 29, 2017 or April 30, 2017.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows:

	Gross Amounts		Netting		Cash Collateral
April 29, 2018	Recognized		Arrangements		Received/Paid		Net Amount
Assets	$	194	$	(74)			$	120
Liabilities		371		(74)	$	(32)		265

	Gross Amounts		Netting		Cash Collateral
October 29, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	235	$	(65)		$	170
Liabilities		158		(65)			93

	Gross Amounts		Netting		Cash Collateral
April 30, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	216	$	(54)		$	162
Liabilities		131		(54)			77

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STOCK OPTION AND RESTRICTED STOCK AWARDS

6 Months Ended

Apr. 29, 2018

STOCK OPTION AND RESTRICTED STOCK AWARDS

STOCK OPTION AND RESTRICTED STOCK AWARDS

(17)  In December 2017, the Company granted stock options to employees for the purchase of 476 thousand shares of common stock at an exercise price of $151.95 per share and a binomial lattice model fair value of $39.11 per share at the grant date. At April 29, 2018, options for 9.1 million shares were outstanding with a weighted-average exercise price of $86.73 per share. The Company also granted 403 thousand restricted stock units to employees and non-employee directors in the first six months of 2018, of which 318 thousand are subject to service based only conditions and 85 thousand are subject to performance/service based conditions. The weighted-average fair value of the service based only units at the grant date was $152.07 per unit based on the market price of a share of underlying common stock. The weighted-average fair value of the performance/service based units at the grant date was $145.33 per unit based on the market price of a share of underlying common stock excluding dividends. At April 29, 2018, the Company was authorized to grant an additional 10.0 million shares related to stock option and restricted stock awards.

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ACQUISITIONS

6 Months Ended

Apr. 29, 2018

ACQUISITIONS

ACQUISITIONS

(18)  On December 1, 2017, the Company acquired Wirtgen, which was a privately-held international company and is the leading manufacturer worldwide of road construction equipment. Headquartered in Germany, Wirtgen has six brands across the road construction sector spanning processing, mixing, paving, compaction, and rehabilitation. Wirtgen sells products in more than 100 countries and had approximately 8,200 employees at the acquisition date.

The total cash purchase price, net of cash acquired of $197 million, was $5,130 million, a portion of which is held in escrow to secure certain indemnity obligations of Wirtgen. In addition to the cash purchase price, the Company assumed $1,717 million in liabilities, which represented substantially all of Wirtgen’s liabilities. The Company financed the acquisition and associated transaction expenses from a combination of cash and new debt financing, which consisted of medium-term notes, including €850 million issued in September 2017.

The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at April 29, 2018 follows:

Trade accounts and notes receivable	$	457
Financing receivables		43
Financing receivables securitized		125
Other receivables		100
Inventories		1,538
Property and equipment		757
Goodwill		2,060
Other intangible assets		1,458
Deferred income taxes		96
Other assets		221
Total assets	$	6,855
Short-term borrowings	$	285
Short-term securitization borrowings		127
Accounts payable and accrued expenses		725
Deferred income taxes		502
Long-term borrowings		50
Retirement benefits and other liabilities		28
Total liabilities	$	1,717
Noncontrolling interests	$	8

During the second quarter of 2018, measurement period adjustments decreased the total assets by $8 million, total liabilities by $7 million, and noncontrolling interests by $1 million. The Company continues to review the fair value of the assets and liabilities acquired, which may be updated during the measurement period.

The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows:

	Weighted-Average Useful Lives	Preliminary Fair Values
Customer lists and relationships	16	$	534
Technology, patents, trademarks, and other	19	$	924

The goodwill was the result of future cash flows and related fair value of Wirtgen exceeding the fair value of the identified assets and liabilities. The goodwill is not expected to be deductible for income tax purposes and is included in the construction and forestry segment.

Wirtgen’s results were included in the Company’s consolidated financial statements beginning on the acquisition date. The results are incorporated using a 30-day lag period and are included in the construction and forestry segment. The net sales and revenues and operating profit (loss) included in the Company’s statement of consolidated income in the second quarter of 2018 and first six months of 2018 were $873 million and $1,127 million, and $41 million and $(51) million, respectively. The Company also recognized $3 million of acquisition related costs in the second quarter of 2018, which were recorded in selling, administrative and general expenses. In the first six months of 2018, the Company recognized $53 million of acquisition related costs, which were recorded $27 million in selling, administrative and general expenses and $26 million in other operating expenses.

The unaudited pro forma consolidated net sales and revenues and net income are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net sales and revenues	$	10,720	$	9,045	$	18,098	$	15,253
Net income attributable to Deere & Company	$	1,310	$	837	$	877	$	942

The pro forma amounts have been calculated using policies consistent with the Company’s accounting policies and include the additional expense from the amortization from the allocated purchase price adjustments. The pro forma results exclude acquisition related costs incurred in both periods and assume the medium-term notes used to fund the acquisition were issued in fiscal year 2016 at the interest rate of the actual notes. In addition, the pro forma results for the second quarter and six months ended April 30, 2017 include nonrecurring pretax expenses of $102 million and $264 million, for the higher cost basis from the inventory fair value adjustment and $21 million and $42 million for the amortization of identifiable intangible assets. Anticipated synergies or other expected benefits of the acquisition are not included in the pro forma results. As a result, the unaudited pro forma financial information may not be indicative of the results for future operations or the results if the acquisition closed at the beginning of fiscal year 2017.

In March 2018, the Company acquired King Agro, a privately held manufacturer of carbon fiber technology products with headquarters in Valencia, Spain and a production facility in Campana, Argentina. The total cash purchase price, net of cash acquired of $3 million, was $41 million, excluding a loan to King Agro of $4 million that was forgiven on the acquisition date. In addition to the cash purchase price, the Company assumed $11 million of liabilities. The preliminary asset and liability fair values are as follows:

Trade accounts and notes receivable	$	4
Other receivables		3
Inventories		6
Property and equipment		5
Goodwill		25
Other intangible assets		13
Total assets	$	56
Short-term borrowings	$	2
Accounts payable and accrued expenses		4
Deferred income taxes		3
Long-term borrowings		2
Total liabilities	$	11

The identifiable intangibles were primarily related to trade name and technology, which have a weighted-average amortization period of 10 years.

The goodwill was the result of future cash flows and related fair values of the entity exceeding the fair value of the identified assets and liabilities, which is not expected to be deducted for tax purposes. The results of King Agro were included in the Company’s consolidated financial statements in the agriculture and turf segment since the date of acquisition. The pro forma results of operations as if the acquisition had occurred at the beginning of the prior fiscal year would not differ significantly from the reported results.

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DIVESTITURES

6 Months Ended

Apr. 29, 2018

DIVESTITURES

DIVESTITURES

(19)  In November 2017, the Company sold its construction and forestry retail locations in Florida. At the time of the sale, total assets were $93 million and liabilities were $1 million. The assets consisted of inventory of $61 million, property and equipment – net of $21 million, goodwill of $10 million, and $1 million of other assets. The liabilities consisted of $1 million of accounts payable and accrued expenses. The total proceeds from the sale will be approximately $105 million, with $55 million received in the first six months of 2018. The remaining sales price is due based on standard payment terms of new equipment sales to independent dealers. A pretax gain of $13 million was recorded in other income in the construction and forestry segment. After the sale, the Company sells equipment, service parts, and provides other services to the purchaser as an independent dealer.

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SUPPLEMENTAL CONSOLIDATING DATA

6 Months Ended

Apr. 29, 2018

SUPPLEMENTAL CONSOLIDATING DATA

SUPPLEMENTAL CONSOLIDATING DATA

(20) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	9,747.0	$	7,259.8
Finance and interest income		27.8		18.7	$	812.5	$	716.4
Other income		202.9		339.6		64.9		61.0
Total		9,977.7		7,618.1		877.4		777.4
Costs and Expenses
Cost of sales		7,333.8		5,428.1
Research and development expenses		415.2		325.4
Selling, administrative and general expenses		799.5		644.1		141.5		141.3
Interest expense		78.2		67.0		231.2		169.4
Interest compensation to Financial Services		80.6		60.4
Other operating expenses		66.7		83.2		324.7		307.3
Total		8,774.0		6,608.2		697.4		618.0
Income of Consolidated Group before Income Taxes		1,203.7		1,009.9		180.0		159.4
Provision for income taxes		100.8		309.7		76.3		56.1
Income of Consolidated Group		1,102.9		700.2		103.7		103.3
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		104.1		103.5		.4		.2
Other		2.7		4.6
Total		106.8		108.1		.4		.2
Net Income		1,209.7		808.3		104.1		103.5
Less: Net income (loss) attributable to noncontrolling interests		1.4		(.2)
Net Income Attributable to Deere & Company	$	1,208.3	$	808.5	$	104.1	$	103.5

* Deere & Company with Financial Services on the equity basis.

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.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF INCOME
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	15,721.0	$	11,957.7
Finance and interest income		39.4		40.0	$	1,589.4	$	1,403.7
Other income		399.3		597.6		127.7		119.2
Total		16,159.7		12,595.3		1,717.1		1,522.9
Costs and Expenses
Cost of sales		12,038.8		9,210.0
Research and development expenses		772.0		637.5
Selling, administrative and general expenses		1,390.2		1,189.3		257.7		264.7
Interest expense		174.2		133.8		425.3		318.1
Interest compensation to Financial Services		142.2		106.1
Other operating expenses		138.9		148.9		635.9		612.5
Total		14,656.3		11,425.6		1,318.9		1,195.3
Income of Consolidated Group before Income Taxes		1,503.4		1,169.7		398.2		327.6
Provision (credit) for income taxes		1,364.7		384.6		(130.0)		110.5
Income of Consolidated Group		138.7		785.1		528.2		217.1
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		529.4		217.9		1.2		.8
Other		6.8		3.7
Total		536.2		221.6		1.2		.8
Net Income		674.9		1,006.7		529.4		217.9
Less: Net income (loss) attributable to noncontrolling interests		1.7		(.8)
Net Income Attributable to Deere & Company	$	673.2	$	1,007.5	$	529.4	$	217.9

* Deere & Company with Financial Services on the equity basis.

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.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	April 29		October 29		April 30		April 29		October 29		April 30
	2018		2017		2017		2018		2017		2017
Assets
Cash and cash equivalents	$	2,988.9	$	8,168.4	$	3,343.8	$	1,212.5	$	1,166.5	$	1,182.0
Marketable securities		16.9		20.2		118.1		462.4		431.4		428.2
Receivables from unconsolidated subsidiaries and affiliates		1,668.0		1,032.1		3,453.0
Trade accounts and notes receivable – net		1,515.9		876.3		742.9		6,436.0		4,134.1		4,867.3
Financing receivables – net		75.7						24,199.8		25,104.1		23,301.1
Financing receivables securitized – net		113.1						4,323.2		4,158.8		4,281.8
Other receivables		1,273.3		1,045.6		801.6		190.1		195.5		136.0
Equipment on operating leases – net								6,723.1		6,593.7		5,923.9
Inventories		6,888.9		3,904.1		4,114.8
Property and equipment – net		5,696.0		5,017.3		4,909.7		46.9		50.4		50.2
Investments in unconsolidated subsidiaries and affiliates		4,915.9		4,812.3		4,612.2		15.3		13.8		12.5
Goodwill		3,188.7		1,033.3		806.2
Other intangible assets – net		1,692.2		218.0		90.8
Retirement benefits		617.9		538.1		176.2		15.0		16.9		18.9
Deferred income taxes		2,065.5		3,098.8		3,651.1		76.4		79.8		76.3
Other assets		1,186.3		973.9		901.1		577.3		651.4		636.8
Total Assets	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	659.1	$	375.5	$	276.6	$	10,235.5	$	9,659.8	$	7,687.0
Short-term securitization borrowings		113.2						4,287.9		4,118.7		4,224.6
Payables to unconsolidated subsidiaries and affiliates		145.7		121.9		101.6		1,633.7		996.2		3,418.1
Accounts payable and accrued expenses		9,265.7		7,718.1		6,765.0		2,030.8		1,827.1		1,587.1
Deferred income taxes		462.9		115.6		89.7		523.2		857.7		764.8
Long-term borrowings		5,536.5		5,490.9		4,520.4		20,742.1		20,400.4		18,732.7
Retirement benefits and other liabilities		7,285.5		7,341.9		8,260.4		95.6		92.9		91.7
Total liabilities		23,468.6		21,163.9		20,013.7		39,548.8		37,952.8		36,506.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest		14.6		14.0		14.0
Stockholders’ Equity
Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204)		4,423.4		4,280.5		4,165.4		2,099.1		2,099.1		2,079.1
Common stock in treasury		(15,425.9)		(15,460.8)		(15,521.0)
Retained earnings		25,586.0		25,301.3		24,535.8		2,872.4		2,782.0		2,608.1
Accumulated other comprehensive income (loss)		(4,173.2)		(4,563.7)		(5,495.5)		(242.3)		(237.5)		(278.2)
Total Deere & Company stockholders' equity		10,410.3		9,557.3		7,684.7		4,729.2		4,643.6		4,409.0
Noncontrolling interests		9.7		3.2		9.1
Total stockholders’ equity		10,420.0		9,560.5		7,693.8		4,729.2		4,643.6		4,409.0
Total Liabilities and Stockholders’ Equity	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0

* Deere & Company with Financial Services on the equity basis.

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.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Cash Flows from Operating Activities
Net income	$	674.9	$	1,006.7	$	529.4	$	217.9
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses		9.2		(.2)		17.6		32.8
Provision for depreciation and amortization		483.8		427.0		529.3		476.9
Gain on sale of affiliates and investments		(13.2)		(281.4)
Undistributed earnings of unconsolidated subsidiaries and affiliates		(93.8)		59.8		(1.0)		(.6)
Provision (credit) for deferred income taxes		934.5		(118.8)		(330.2)		18.4
Changes in assets and liabilities:
Trade receivables		(188.5)		(87.7)
Inventories		(1,439.5)		(771.8)
Accounts payable and accrued expenses		578.0		200.0		84.2		18.0
Accrued income taxes payable/receivable		147.4		191.5		5.6		3.6
Retirement benefits		62.7		111.0		4.9		4.6
Other		(106.1)		(49.2)		72.0		104.8
Net cash provided by operating activities		1,049.4		686.9		911.8		876.4
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						9,486.7		8,833.8
Proceeds from maturities and sales of marketable securities		3.6		7.9		20.2		33.4
Proceeds from sales of equipment on operating leases						748.6		786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold		55.0		113.9
Cost of receivables acquired (excluding trade and wholesale)						(8,918.8)		(8,238.0)
Acquisitions of businesses, net of cash acquired		(5,171.1)
Purchases of marketable securities						(62.8)		(43.7)
Purchases of property and equipment		(351.6)		(252.2)		(.6)		(.8)
Cost of equipment on operating leases acquired						(1,409.3)		(1,355.6)
Increase in trade and wholesale receivables						(2,293.8)		(1,012.7)
Other		44.2		(18.1)		(47.0)		(.6)
Net cash used for investing activities		(5,419.9)		(148.5)		(2,476.8)		(997.8)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		(67.1)		(7.4)		266.2		190.5
Change in intercompany receivables/payables		(641.6)		(287.5)		641.6		287.5
Proceeds from long-term borrowings		107.1		19.1		3,970.6		2,642.5
Payments of long-term borrowings		(85.3)		(24.7)		(2,803.4)		(2,717.5)
Proceeds from issuance of common stock		198.6		383.6
Repurchases of common stock		(60.6)		(6.2)
Dividends paid		(386.9)		(379.5)		(439.1)		(280.2)
Other		(25.5)		(25.8)		(18.5)		(13.9)
Net cash provided by (used for) financing activities		(961.3)		(328.4)		1,617.4		108.9
Effect of Exchange Rate Changes on Cash and Cash Equivalents		152.3		(6.7)		(6.4)		(.8)
Net Increase (Decrease) in Cash and Cash Equivalents		(5,179.5)		203.3		46.0		(13.3)
Cash and Cash Equivalents at Beginning of Period		8,168.4		3,140.5		1,166.5		1,195.3
Cash and Cash Equivalents at End of Period	$	2,988.9	$	3,343.8	$	1,212.5	$	1,182.0

* Deere & Company with Financial Services on the equity basis.

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Policies)

6 Months Ended

Apr. 29, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION

Fiscal Period, Policy

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2018 and 2017 were April 29, 2018 and April 30, 2017, respectively. Both periods contained 13 weeks.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

Financing Receivables - Non-Performing, Policy

Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent loans for which the Company has ceased accruing finance income. These receivables are generally 120 days delinquent and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, has been written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

Financing receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing.

Troubled Debt Restructuring, Policy

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest.

Inventory Valuation, Policy

Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method.

Product Warranties

The Company generally determines its total warranty liability by applying historical claims rate experience to the estimated amount of equipment that has been sold and is still under warranty based on dealer inventories and retail sales.

Extended Product Warranty, Policy

The premiums for extended warranties are primarily recognized in income in proportion to the costs expected to be incurred over the contract period.

Fair Value of Financial Instruments, Policy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Derivative Financial Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company’s financial services operations manage the relationship of the types and amounts of their funding sources to their receivable and lease portfolio in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivative’s fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement.

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OTHER COMPREHENSIVE INCOME ITEMS (Tables)

6 Months Ended

Apr. 29, 2018

OTHER COMPREHENSIVE INCOME ITEMS

Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss)

The after-tax changes in accumulated other comprehensive income (loss) in millions of dollars follow:

									Total
					Unrealized		Unrealized		Accumulated
	Retirement		Cumulative		Gain (Loss)		Gain (Loss)		Other
	Benefits		Translation		on		on		Comprehensive
	Adjustment		Adjustment		Derivatives		Investments		Income (Loss)
Balance October 30, 2016	$	(4,409)	$	(1,229)	$	1	$	11	$	(5,626)
Other comprehensive income (loss) items before reclassification		(13)		(1)				165		151
Amounts reclassified from accumulated other comprehensive income		89				2		(112)		(21)
Net current period other comprehensive income (loss)		76		(1)		2		53		130
Balance April 30, 2017	$	(4,333)	$	(1,230)	$	3	$	64	$	(5,496)
Balance October 29, 2017	$	(3,580)	$	(999)	$	5	$	10	$	(4,564)
Other comprehensive income (loss) items before reclassification		81		225		11		(9)		308
Amounts reclassified from accumulated other comprehensive income		84				(1)				83
Net current period other comprehensive income (loss)		165		225		10		(9)		391
Balance April 29, 2018	$	(3,415)	$	(774)	$	15	$	1	$	(4,173)

Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects

Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, in millions of dollars:

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment			$	1	$	1
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)	$	7		(1)		6
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		6		(1)		5
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		39		(9)		30
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		54		(14)		40
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		15		(4)		11
Prior service (credit) cost		(19)		5		(14)
Net unrealized gain (loss) on retirement benefits adjustments		158		(39)		119
Total other comprehensive income (loss)	$	152	$	(36)	$	116

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 29, 2018	Amount		Credit		Amount
Cumulative translation adjustment	$	225			$	225
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		15	$	(4)		11
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		(1)				(1)
Net unrealized gain (loss) on derivatives		14		(4)		10
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		(11)		2		(9)
Reclassification of realized (gain) loss – Other income		(1)		1
Net unrealized gain (loss) on investments		(12)		3		(9)
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		46		(11)		35
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		115		(34)		81
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		6		(2)		4
Health care and life insurance
Net actuarial gain (loss)		60		(14)		46
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		31		(9)		22
Prior service (credit) cost		(38)		11		(27)
Net unrealized gain (loss) on retirement benefits adjustments		226		(61)		165
Total other comprehensive income (loss)	$	453	$	(62)	$	391

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	17			$	17
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(4)	$	2		(2)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1		(1)
Foreign exchange contracts – Other operating expenses		3		(1)		2
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		269		(99)		170
Reclassification of realized (gain) loss – Other income		(176)		65		(111)
Net unrealized gain (loss) on investments		93		(34)		59
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(8)		3		(5)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		61		(22)		39
Prior service (credit) cost		3		(1)		2
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		24		(9)		15
Prior service (credit) cost		(19)		7		(12)
Net unrealized gain (loss) on retirement benefits adjustments		52		(19)		33
Total other comprehensive income (loss)	$	162	$	(53)	$	109

* These accumulated other comprehensive income amounts are components of net periodic pension and postretirement costs. See Note 7 for additional detail.

In the second quarter of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $1.7 million and $(.2) million, respectively, which consisted of net income (loss) of $1.4 million and $(.2) million and cumulative translation adjustments of $.3 million and none, respectively.

	Before		Tax		After
	Tax		(Expense)		Tax
Six Months Ended April 30, 2017	Amount		Credit		Amount
Cumulative translation adjustment	$	(1)			$	(1)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1				1
Foreign exchange contracts – Other operating expenses		2	$	(1)		1
Net unrealized gain (loss) on derivatives		3		(1)		2
Unrealized gain (loss) on investments:
Unrealized holding gain (loss)		262		(97)		165
Reclassification of realized (gain) loss – Other income		(178)		66		(112)
Net unrealized gain (loss) on investments		84		(31)		53
Retirement benefits adjustment:
Pensions
Net actuarial gain (loss)		(9)		3		(6)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		121		(44)		77
Prior service (credit) cost		6		(2)		4
Settlements/curtailments		1				1
Health care and life insurance
Net actuarial gain (loss)		(10)		3		(7)
Reclassification through amortization of actuarial (gain) loss and prior service (credit) cost to other operating expenses: *
Actuarial (gain) loss		49		(18)		31
Prior service (credit) cost		(38)		14		(24)
Net unrealized gain (loss) on retirement benefits adjustments		120		(44)		76
Total other comprehensive income (loss)	$	206	$	(76)	$	130

* These accumulated other comprehensive income amounts are included in net periodic pension and postretirement costs. See Note 7 for additional detail.

In the first six months of 2018 and 2017, the noncontrolling interests’ comprehensive income (loss) was $2.1 million and $(.8) million, respectively, which consisted of net income (loss) of $1.7 million and $(.8) million and cumulative translation adjustments of $.4 million and none, respectively.

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DIVIDENDS DECLARED AND PAID (Tables)

6 Months Ended

Apr. 29, 2018

DIVIDENDS DECLARED AND PAID

Dividends Declared and Paid

  Dividends declared and paid on a per share basis were as follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Dividends declared	$	.60	$	.60	$	1.20	$	1.20
Dividends paid	$	.60	$	.60	$	1.20	$	1.20

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EARNINGS PER SHARE (Tables)

6 Months Ended

Apr. 29, 2018

EARNINGS PER SHARE

Reconciliation of Basic and Diluted Net Income (Loss) Per Share

  A  reconciliation of basic and diluted net income per share attributable to Deere & Company follows in millions, except per share amounts:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net income attributable to Deere & Company	$	1,208.3	$	808.5	$	673.2	$	1,007.5
Less income allocable to participating securities		.2		.2		.1		.3
Income allocable to common stock	$	1,208.1	$	808.3	$	673.1	$	1,007.2
Average shares outstanding		324.2		319.2		323.4		317.9
Basic per share	$	3.73	$	2.53	$	2.08	$	3.17
Average shares outstanding		324.2		319.2		323.4		317.9
Effect of dilutive share-based compensation		5.0		3.8		5.0		3.4
Total potential shares outstanding		329.2		323.0		328.4		321.3
Diluted per share	$	3.67	$	2.50	$	2.05	$	3.14

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PENSION AND POSTRETIREMENT BENEFITS (Tables)

6 Months Ended

Apr. 29, 2018

PENSION AND POSTRETIREMENT BENEFITS

Components of Pension and Postretirement Benefit Costs

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	76	$	67	$	148	$	135
Interest cost		97		90		195		180
Expected return on plan assets		(194)		(197)		(388)		(394)
Amortization of actuarial loss		54		61		115		121
Amortization of prior service cost		3		3		6		6
Settlements/curtailments		6		1		6		1
Net cost	$	42	$	25	$	82	$	49

The worldwide components of net periodic postretirement benefits cost (health care and life insurance) consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Service cost	$	11	$	11	$	22	$	21
Interest cost		48		49		96		98
Expected return on plan assets		(6)		(5)		(11)		(9)
Amortization of actuarial loss		15		24		31		49
Amortization of prior service credit		(19)		(19)		(38)		(38)
Net cost	$	49	$	60	$	100	$	121

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INCOME TAXES (Tables)

6 Months Ended

Apr. 29, 2018

INCOME TAXES

Tax Reform Measurement Period Adjustments and Effects on Results

The tax reform measurement period adjustments and the effects on the results of the second quarter and first six months of 2018 in millions of dollars follow:

	Three Months Ended April 29, 2018						Six Months Ended April 29, 2018
	Equipment Operations			Financial Services	Total		Equipment Operations			Financial Services	Total
Net deferred tax asset remeasurement	$	(158)	$	(19)	$	(177)	$	853	$	(314)	$	539
Deemed earnings repatriation tax		(49)		52		3		179		85		264
Total discrete tax expense (benefit)	$	(207)	$	33	$	(174)	$	1,032	$	(229)	$	803

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SEGMENT REPORTING (Tables)

6 Months Ended

Apr. 29, 2018

SEGMENT REPORTING

Schedule of Segment Reporting Information

Worldwide net sales and revenues, operating profit, and identifiable assets by segment in millions of dollars follow:

	Three Months Ended					Six Months Ended
	April 29		April 30		%	April 29		April 30		%
	2018		2017		Change	2018		2017		Change
Net sales and revenues:
Agriculture and turf	$	7,049	$	5,794	+22	$	11,292	$	9,392	+20
Construction and forestry		2,698		1,466	+84		4,429		2,566	+73
Total net sales		9,747		7,260	+34		15,721		11,958	+31
Financial services		795		716	+11		1,572		1,412	+11
Other revenues		178		311	-43		340		542	-37
Total net sales and revenues	$	10,720	$	8,287	+29	$	17,633	$	13,912	+27
Operating profit: *
Agriculture and turf	$	1,056	$	1,009	+5	$	1,443	$	1,227	+18
Construction and forestry		259		111	+133		291		148	+97
Financial services		179		158	+13		396		325	+22
Total operating profit		1,494		1,278	+17		2,130		1,700	+25
Reconciling items **		(109)		(104)	+5		(222)		(198)	+12
Income taxes		(177)		(366)	-52		(1,235)		(495)	+149
Net income attributable to Deere & Company	$	1,208	$	808	+50	$	673	$	1,007	-33
Intersegment sales and revenues:
Agriculture and turf net sales	$	15	$	10	+50	$	24	$	17	+41
Construction and forestry net sales
Financial services		82		62	+32		145		111	+31
Equipment operations outside the U.S. and Canada:
Net sales	$	4,295	$	2,968	+45	$	6,804	$	4,860	+40
Operating profit		534		391	+37		680		467	+46

	April 29		October 29
	2018		2017
Identifiable assets:
Agriculture and turf	$	10,603	$	9,359	+13
Construction and forestry		10,471		3,212	+226
Financial services		44,278		42,596	+4
Corporate		4,521		10,619	-57
Total assets	$	69,873	$	65,786	+6

* 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 of the financial services segment includes the effect of interest expense and foreign exchange gains and losses.

** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

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FINANCING RECEIVABLES (Tables)

6 Months Ended

Apr. 29, 2018

FINANCING RECEIVABLES

Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables

An age analysis of past due financing receivables that are still accruing interest and non-performing financing receivables in millions of dollars follows:

	April 29, 2018
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	117	$	58	$	44	$	219
Construction and forestry		97		44		36		177
Other:
Agriculture and turf		32		16		28		76
Construction and forestry		11		4		2		17
Total	$	257	$	122	$	110	$	489
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	219	$	171	$	17,014	$	17,404
Construction and forestry		177		42		2,899		3,118
Other:
Agriculture and turf		76		16		7,072		7,164
Construction and forestry		17		4		1,192		1,213
Total	$	489	$	233	$	28,177		28,899
Less allowance for credit losses								187
Total financing receivables – net							$	28,712

	October 29, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	118	$	54	$	49	$	221
Construction and forestry		75		33		39		147
Other:
Agriculture and turf		27		14		7		48
Construction and forestry		11		6		2		19
Total	$	231	$	107	$	97	$	435
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	221	$	173	$	17,508	$	17,902
Construction and forestry		147		30		2,618		2,795
Other:
Agriculture and turf		48		12		7,610		7,670
Construction and forestry		19		5		1,059		1,083
Total	$	435	$	220	$	28,795		29,450
Less allowance for credit losses								187
Total financing receivables – net							$	29,263

	April 30, 2017
					90 Days
	30-59 Days		60-89 Days		or Greater		Total
	Past Due		Past Due		Past Due		Past Due
Retail Notes:
Agriculture and turf	$	120	$	75	$	65	$	260
Construction and forestry		80		44		33		157
Other:
Agriculture and turf		37		12		27		76
Construction and forestry		12		4		2		18
Total	$	249	$	135	$	127	$	511
							Total
	Total		Total				Financing
	Past Due		Non-Performing		Current		Receivables
Retail Notes:
Agriculture and turf	$	260	$	159	$	16,838	$	17,257
Construction and forestry		157		31		2,563		2,751
Other:
Agriculture and turf		76		10		6,692		6,778
Construction and forestry		18		4		952		974
Total	$	511	$	204	$	27,045		27,760
Less allowance for credit losses								177
Total financing receivables – net							$	27,583

Analysis of the Allowance for Credit Losses and Investment in Financing Receivables

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:

	Three Months Ended April 29, 2018
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	123	$	40	$	27	$	190
Provision		5		9		2		16
Write-offs		(7)		(15)		(1)		(23)
Recoveries		4		6				10
Translation adjustments		(5)				(1)		(6)
End of period balance *	$	120	$	40	$	27	$	187
	Six Months Ended April 29, 2018
Allowance:
Beginning of period balance	$	121	$	40	$	26	$	187
Provision		5		9		4		18
Write-offs		(14)		(20)		(3)		(37)
Recoveries		10		11				21
Translation adjustments		(2)						(2)
End of period balance *	$	120	$	40	$	27	$	187
Financing receivables:
End of period balance	$	20,522	$	3,205	$	5,172	$	28,899
Balance individually evaluated **	$	120	$	1	$	15	$	136

	Three Months Ended April 30, 2017
			Revolving
	Retail		Charge
	Notes		Accounts		Other		Total
Allowance:
Beginning of period balance	$	111	$	41	$	23	$	175
Provision		10		15		1		26
Write-offs		(15)		(18)		(1)		(34)
Recoveries		5		5				10
End of period balance *	$	111	$	43	$	23	$	177
	Six Months Ended April 30, 2017
Allowance:
Beginning of period balance	$	113	$	40	$	23	$	176
Provision		18		13		2		33
Write-offs		(27)		(20)		(3)		(50)
Recoveries		7		10		1		18
End of period balance *	$	111	$	43	$	23	$	177
Financing receivables:
End of period balance	$	20,008	$	3,036	$	4,716	$	27,760
Balance individually evaluated **	$	148	$	4	$	17	$	169

* Individual allowances were not significant.

** Remainder is collectively evaluated.

Analysis of the Impaired Financing Receivables

An analysis of the impaired financing receivables in millions of dollars follows:

			Unpaid				Average
	Recorded		Principal		Specific		Recorded
	Investment		Balance		Allowance		Investment
April 29, 2018*
Receivables with specific allowance **	$	33	$	31	$	10	$	34
Receivables without a specific allowance **		41		40				43
Total	$	74	$	71	$	10	$	77
Agriculture and turf	$	52	$	51	$	9	$	54
Construction and forestry	$	22	$	20	$	1	$	23
October 29, 2017*
Receivables with specific allowance **	$	36	$	33	$	10	$	30
Receivables without a specific allowance ***		28		27				24
Total	$	64	$	60	$	10	$	54
Agriculture and turf	$	49	$	46	$	10	$	38
Construction and forestry	$	15	$	14			$	16
April 30, 2017*
Receivables with specific allowance **	$	23	$	22	$	9	$	26
Receivables without a specific allowance ***		27		24				28
Total	$	50	$	46	$	9	$	54
Agriculture and turf	$	28	$	26	$	8	$	32
Construction and forestry	$	22	$	20	$	1	$	22

*  Finance income recognized was not material.

** Primarily retail notes.

***Primarily retail notes and wholesale receivables.

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SECURITIZATION OF FINANCING RECEIVABLES (Tables)

6 Months Ended

Apr. 29, 2018

SECURITIZATION OF FINANCING RECEIVABLES

Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets, was as follows in millions of dollars:

	April 29, 2018
Carrying value of liabilities	$	1,310
Maximum exposure to loss		1,383

Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions

The components of consolidated restricted assets related to secured borrowings in securitization transactions follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Financing receivables securitized (retail notes)	$	4,450	$	4,172	$	4,295
Allowance for credit losses		(14)		(13)		(13)
Other assets		122		105		115
Total restricted securitized assets	$	4,558	$	4,264	$	4,397

The components of consolidated secured borrowings and other liabilities related to securitizations follow in millions of dollars:

	April 29		October 29		April 30
	2018		2017		2017
Short-term securitization borrowings	$	4,401	$	4,119	$	4,225
Accrued interest on borrowings		3		2		2
Total liabilities related to restricted securitized assets	$	4,404	$	4,121	$	4,227

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INVENTORIES (Tables)

6 Months Ended

Apr. 29, 2018

INVENTORIES

Major Classification of Inventories

  Most inventories owned by Deere & Company and its U.S. equipment subsidiaries and certain foreign equipment subsidiaries are valued at cost on the “last-in, first-out” (LIFO) method. If all of the Company’s inventories had been valued on a “first-in, first-out” (FIFO) method, estimated inventories by major classification in millions of dollars would have been as follows:

	April 29		October 29		April 30
	2018		2017		2017
Raw materials and supplies	$	2,231	$	1,688	$	1,559
Work-in-process		900		495		531
Finished goods and parts		5,208		3,182		3,421
Total FIFO value		8,339		5,365		5,511
Less adjustment to LIFO value		1,450		1,461		1,396
Inventories	$	6,889	$	3,904	$	4,115

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GOODWILL AND OTHER INTANGIBLE ASSETS-NET (Tables)

6 Months Ended

Apr. 29, 2018

GOODWILL AND OTHER INTANGIBLE ASSETS-NET

Changes in Goodwill by Operating Segments

The changes in amounts of goodwill by operating segments were as follows in millions of dollars:

	Agriculture		Construction
	and Turf		and Forestry		Total
Goodwill at October 30, 2016	$	323	$	493	$	816
Translation adjustments and other		(10)				(10)
Goodwill at April 30, 2017	$	313	$	493	$	806
Goodwill at October 29, 2017	$	521	$	512	$	1,033
Acquisitions *		25		2,060		2,085
Divestitures **				(10)		(10)
Translation adjustments		5		76		81
Goodwill at April 29, 2018	$	551	$	2,638	$	3,189

*  See Note 18.

** See Note 19.

There were no accumulated impairment losses in the reported periods.

Components of Other Intangible Assets

The components of other intangible assets were as follows in millions of dollars:

	Useful Lives *	April 29		October 29		April 30
	(Years)	2018		2017		2017
Amortized intangible assets:
Customer lists and relationships	16	$	590	$	42	$	39
Technology, patents, trademarks, and other	18		1,109		139		129
Total at cost			1,699		181		168
Less accumulated amortization **			130		86		77
Total			1,569		95		91
Unamortized intangible assets:
In-process research and development			123		123
Other intangible assets – net		$	1,692	$	218	$	91

*  Weighted-averages

** Accumulated amortization at April 29, 2018, October 29, 2017, and April 30, 2017 for customer lists and relationships totaled $30 million, $17 million, and $15 million and technology, patents, trademarks, and other totaled $100 million, $69 million, and $62 million, respectively.

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Apr. 29, 2018

COMMITMENTS AND CONTINGENCIES

Reconciliation of the Changes in Warranty Liability and Unearned Premiums

A reconciliation of the changes in the warranty liability and unearned premiums in millions of dollars follows:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	1,550	$	1,285	$	1,468	$	1,226
Payments		(213)		(167)		(430)		(332)
Amortization of premiums received		(57)		(54)		(113)		(97)
Accruals for warranties		260		238		453		470
Premiums received		65		55		126		95
Acquisitions *						80
Foreign exchange		(14)		8		7		3
End of period balance	$	1,591	$	1,365	$	1,591	$	1,365

*  See Note 18.

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Apr. 29, 2018

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values in millions of dollars follow:

	April 29, 2018				October 29, 2017				April 30, 2017
	Carrying Value		Fair Value *		Carrying Value		Fair Value *		Carrying Value		Fair Value *
Financing receivables – net:
Equipment operations **	$	76	$	74
Financial services		24,200		23,997	$	25,104	$	24,946	$	23,301	$	23,141
Total	$	24,276	$	24,071	$	25,104	$	24,946	$	23,301	$	23,141
Financing receivables securitized – net:
Equipment operations **	$	113	$	110
Financial services		4,323		4,273	$	4,159	$	4,130	$	4,282	$	4,253
Total	$	4,436	$	4,383	$	4,159	$	4,130	$	4,282	$	4,253
Short-term securitization borrowings:
Equipment operations **	$	113	$	113
Financial services		4,288		4,274	$	4,119	$	4,118	$	4,225	$	4,225
Total	$	4,401	$	4,387	$	4,119	$	4,118	$	4,225	$	4,225
Long-term borrowings due within one year:
Equipment operations **	$	274	$	273	$	154	$	154	$	120	$	119
Financial services		6,566		6,559		6,064		6,079		5,339		5,345
Total	$	6,840	$	6,832	$	6,218	$	6,233	$	5,459	$	5,464
Long-term borrowings:
Equipment operations **	$	5,537	$	5,850	$	5,491	$	6,026	$	4,520	$	5,020
Financial services		20,742		20,769		20,400		20,606		18,733		18,864
Total	$	26,279	$	26,619	$	25,891	$	26,632	$	23,253	$	23,884

*  Fair value measurements above were Level 3 for all financing receivables, Level 3 for equipment operations short-term securitization borrowings, and Level 2 for all other borrowings.

** See Note 18.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis in millions of dollars follow:

	April 29		October 29		April 30
	2018*		2017*		2017*
Marketable securities
Equity fund	$	46	$	48	$	135
Fixed income fund		14		15		15
U.S. government debt securities		86		77		79
Municipal debt securities		46		39		39
Corporate debt securities		137		135		132
International debt securities		17		20		28
Mortgage-backed securities **		133		118		118
Total marketable securities		479		452		546
Other assets
Derivatives:
Interest rate contracts		87		116		142
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		6		11		14
Total assets ***	$	673	$	687	$	762
Accounts payable and accrued expenses
Derivatives:
Interest rate contracts	$	341	$	131	$	79
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total liabilities	$	371	$	158	$	131

*  All measurements above were Level 2 measurements except for Level 1 measurements of the equity fund of $46 million, $48 million, and $135 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; the fixed income fund of $14 million, $15 million, and $15 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively; and U.S. government debt securities of $42 million, $44 million, and $46 million at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. In addition, $14 million, $17 million, and $23 million of the international debt securities were Level 3 measurements at April 29, 2018, October 29, 2017, and April 30, 2017, respectively. There were no transfers between Level 1 and Level 2 during the first six months of 2018 or 2017.

** Primarily issued by U.S. government sponsored enterprises.

***Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements.

Contractual Maturities of Debt Securities

The contractual maturities of debt securities at April 29, 2018 in millions of dollars are shown below. Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	29	$	28
Due after one through five years		107		105
Due after five through 10 years		95		91
Due after 10 years		62		62
Mortgage-backed securities		139		133
Debt securities	$	432	$	419

Fair Value, Recurring, Level 3 Measurements

Fair value, recurring Level 3 measurements from available-for-sale marketable securities in millions of dollars follow:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Beginning of period balance	$	15	$	23	$	17	$	28
Principal payments		(1)		(1)		(3)		(6)
Change in unrealized gain				1				1
End of period balance	$	14	$	23	$	14	$	23

Fair Value, Nonrecurring, Level 1 Measurements

Fair value,  nonrecurring Level 1 measurements from impairments in millions of dollars follow:

	Fair Value *				Losses
					Three Months Ended		Six Months Ended
	April 29	October 29		April 30	April 29	April 30	April 29	April 30
	2018	2017		2017	2018	2017	2018	2017
Investments in unconsolidated affiliates		$	28

* See financing receivables with specific allowances in Note 10. Losses were not significant.

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DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Apr. 29, 2018

DERIVATIVE INSTRUMENTS

Fair Value Hedge Interest Rate Contracts and Underlying Borrowings

The gains (losses) on these contracts and the underlying borrowings recorded in interest expense follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Interest rate contracts *	$	(123)	$	32	$	(271)	$	(202)
Borrowings **		121		(32)		268		204

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $5 million and $22 million during the second quarter of 2018 and 2017, respectively, and $17 million and $48 million during the first six months of 2018 and 2017, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64 million and $61 million during the second quarter of 2018 and 2017, respectively, and $127 million and $126 million during the first six months of 2018 and 2017, respectively.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

	April 29		October 29		April 30
Other Assets	2018		2017		2017
Designated as hedging instruments:
Interest rate contracts	$	34	$	74	$	116
Cross-currency interest rate contracts		3		5		7
Total designated		37		79		123
Not designated as hedging instruments:
Interest rate contracts		53		42		26
Foreign exchange contracts		101		108		60
Cross-currency interest rate contracts		3		6		7
Total not designated		157		156		93
Total derivative assets	$	194	$	235	$	216
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	316	$	112	$	64
Total designated		316		112		64
Not designated as hedging instruments:
Interest rate contracts		25		19		15
Foreign exchange contracts		28		26		50
Cross-currency interest rate contracts		2		1		2
Total not designated		55		46		67
Total derivative liabilities	$	371	$	158	$	131

Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:

	Expense or	Three Months Ended				Six Months Ended
	OCI	April 29		April 30		April 29		April 30
	Classification	2018		2017		2018		2017
Fair Value Hedges:
Interest rate contracts	Interest	$	(118)	$	54	$	(254)	$	(154)
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *		6		(1)		14		2
Foreign exchange contracts	OCI (pretax) *		1		(3)		1		(2)
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *		1		(1)		1		(1)
Foreign exchange contracts	Other operating *				(3)				(2)
Recognized Directly in Income
(Ineffective Portion)			**		**		**		**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	(5)	$	(4)
Foreign exchange contracts	Cost of sales		36		28	$	(12)	$	(12)
Foreign exchange contracts	Other operating *		164		15		(52)		(13)
Total not designated		$	195	$	39	$	(64)	$	(25)

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

** The amounts are not significant.

Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid in millions of dollars follows:

	Gross Amounts		Netting		Cash Collateral
April 29, 2018	Recognized		Arrangements		Received/Paid		Net Amount
Assets	$	194	$	(74)			$	120
Liabilities		371		(74)	$	(32)		265

	Gross Amounts		Netting		Cash Collateral
October 29, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	235	$	(65)		$	170
Liabilities		158		(65)			93

	Gross Amounts		Netting		Cash Collateral
April 30, 2017	Recognized		Arrangements		Received/Paid	Net Amount
Assets	$	216	$	(54)		$	162
Liabilities		131		(54)			77

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ACQUISITIONS (Tables)

6 Months Ended

Apr. 29, 2018

Wirtgen Group Holding GmbH (Wirtgen)

Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity

The preliminary fair values assigned to the assets and liabilities of the acquired entity in millions of dollars, which is based on information as of the acquisition date and available at April 29, 2018 follows:

Trade accounts and notes receivable	$	457
Financing receivables		43
Financing receivables securitized		125
Other receivables		100
Inventories		1,538
Property and equipment		757
Goodwill		2,060
Other intangible assets		1,458
Deferred income taxes		96
Other assets		221
Total assets	$	6,855
Short-term borrowings	$	285
Short-term securitization borrowings		127
Accounts payable and accrued expenses		725
Deferred income taxes		502
Long-term borrowings		50
Retirement benefits and other liabilities		28
Total liabilities	$	1,717
Noncontrolling interests	$	8

Preliminary Fair Values and Weighted-Average Useful Lives of Identifiable Intangible Assets

The identifiable intangible assets’ preliminary fair values in millions of dollars and weighted-average useful lives in years follows:

	Weighted-Average Useful Lives	Preliminary Fair Values
Customer lists and relationships	16	$	534
Technology, patents, trademarks, and other	19	$	924

Unaudited Pro Forma Consolidated Net Sales and Revenues and Net Income

The unaudited pro forma consolidated net sales and revenues and net income are prepared as if the acquisition closed at the beginning of fiscal year 2017 and follow in millions of dollars:

	Three Months Ended				Six Months Ended
	April 29		April 30		April 29		April 30
	2018		2017		2018		2017
Net sales and revenues	$	10,720	$	9,045	$	18,098	$	15,253
Net income attributable to Deere & Company	$	1,310	$	837	$	877	$	942

King Agro

Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity

The preliminary asset and liability fair values are as follows:

Trade accounts and notes receivable	$	4
Other receivables		3
Inventories		6
Property and equipment		5
Goodwill		25
Other intangible assets		13
Total assets	$	56
Short-term borrowings	$	2
Accounts payable and accrued expenses		4
Deferred income taxes		3
Long-term borrowings		2
Total liabilities	$	11

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SUPPLEMENTAL CONSOLIDATING DATA (Tables)

6 Months Ended

Apr. 29, 2018

SUPPLEMENTAL CONSOLIDATING DATA

Supplemental Consolidating Data Income Statement

(20) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	9,747.0	$	7,259.8
Finance and interest income		27.8		18.7	$	812.5	$	716.4
Other income		202.9		339.6		64.9		61.0
Total		9,977.7		7,618.1		877.4		777.4
Costs and Expenses
Cost of sales		7,333.8		5,428.1
Research and development expenses		415.2		325.4
Selling, administrative and general expenses		799.5		644.1		141.5		141.3
Interest expense		78.2		67.0		231.2		169.4
Interest compensation to Financial Services		80.6		60.4
Other operating expenses		66.7		83.2		324.7		307.3
Total		8,774.0		6,608.2		697.4		618.0
Income of Consolidated Group before Income Taxes		1,203.7		1,009.9		180.0		159.4
Provision for income taxes		100.8		309.7		76.3		56.1
Income of Consolidated Group		1,102.9		700.2		103.7		103.3
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		104.1		103.5		.4		.2
Other		2.7		4.6
Total		106.8		108.1		.4		.2
Net Income		1,209.7		808.3		104.1		103.5
Less: Net income (loss) attributable to noncontrolling interests		1.4		(.2)
Net Income Attributable to Deere & Company	$	1,208.3	$	808.5	$	104.1	$	103.5

* Deere & Company with Financial Services on the equity basis.

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.

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF INCOME
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Net Sales and Revenues
Net sales	$	15,721.0	$	11,957.7
Finance and interest income		39.4		40.0	$	1,589.4	$	1,403.7
Other income		399.3		597.6		127.7		119.2
Total		16,159.7		12,595.3		1,717.1		1,522.9
Costs and Expenses
Cost of sales		12,038.8		9,210.0
Research and development expenses		772.0		637.5
Selling, administrative and general expenses		1,390.2		1,189.3		257.7		264.7
Interest expense		174.2		133.8		425.3		318.1
Interest compensation to Financial Services		142.2		106.1
Other operating expenses		138.9		148.9		635.9		612.5
Total		14,656.3		11,425.6		1,318.9		1,195.3
Income of Consolidated Group before Income Taxes		1,503.4		1,169.7		398.2		327.6
Provision (credit) for income taxes		1,364.7		384.6		(130.0)		110.5
Income of Consolidated Group		138.7		785.1		528.2		217.1
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Financial Services		529.4		217.9		1.2		.8
Other		6.8		3.7
Total		536.2		221.6		1.2		.8
Net Income		674.9		1,006.7		529.4		217.9
Less: Net income (loss) attributable to noncontrolling interests		1.7		(.8)
Net Income Attributable to Deere & Company	$	673.2	$	1,007.5	$	529.4	$	217.9

* Deere & Company with Financial Services on the equity basis.

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.

Supplemental Consolidating Data Condensed Balance Sheet

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*						FINANCIAL SERVICES
	April 29		October 29		April 30		April 29		October 29		April 30
	2018		2017		2017		2018		2017		2017
Assets
Cash and cash equivalents	$	2,988.9	$	8,168.4	$	3,343.8	$	1,212.5	$	1,166.5	$	1,182.0
Marketable securities		16.9		20.2		118.1		462.4		431.4		428.2
Receivables from unconsolidated subsidiaries and affiliates		1,668.0		1,032.1		3,453.0
Trade accounts and notes receivable – net		1,515.9		876.3		742.9		6,436.0		4,134.1		4,867.3
Financing receivables – net		75.7						24,199.8		25,104.1		23,301.1
Financing receivables securitized – net		113.1						4,323.2		4,158.8		4,281.8
Other receivables		1,273.3		1,045.6		801.6		190.1		195.5		136.0
Equipment on operating leases – net								6,723.1		6,593.7		5,923.9
Inventories		6,888.9		3,904.1		4,114.8
Property and equipment – net		5,696.0		5,017.3		4,909.7		46.9		50.4		50.2
Investments in unconsolidated subsidiaries and affiliates		4,915.9		4,812.3		4,612.2		15.3		13.8		12.5
Goodwill		3,188.7		1,033.3		806.2
Other intangible assets – net		1,692.2		218.0		90.8
Retirement benefits		617.9		538.1		176.2		15.0		16.9		18.9
Deferred income taxes		2,065.5		3,098.8		3,651.1		76.4		79.8		76.3
Other assets		1,186.3		973.9		901.1		577.3		651.4		636.8
Total Assets	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings	$	659.1	$	375.5	$	276.6	$	10,235.5	$	9,659.8	$	7,687.0
Short-term securitization borrowings		113.2						4,287.9		4,118.7		4,224.6
Payables to unconsolidated subsidiaries and affiliates		145.7		121.9		101.6		1,633.7		996.2		3,418.1
Accounts payable and accrued expenses		9,265.7		7,718.1		6,765.0		2,030.8		1,827.1		1,587.1
Deferred income taxes		462.9		115.6		89.7		523.2		857.7		764.8
Long-term borrowings		5,536.5		5,490.9		4,520.4		20,742.1		20,400.4		18,732.7
Retirement benefits and other liabilities		7,285.5		7,341.9		8,260.4		95.6		92.9		91.7
Total liabilities		23,468.6		21,163.9		20,013.7		39,548.8		37,952.8		36,506.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest		14.6		14.0		14.0
Stockholders’ Equity
Common stock, $1 par value (issued shares at April 29, 2018 – 536,431,204)		4,423.4		4,280.5		4,165.4		2,099.1		2,099.1		2,079.1
Common stock in treasury		(15,425.9)		(15,460.8)		(15,521.0)
Retained earnings		25,586.0		25,301.3		24,535.8		2,872.4		2,782.0		2,608.1
Accumulated other comprehensive income (loss)		(4,173.2)		(4,563.7)		(5,495.5)		(242.3)		(237.5)		(278.2)
Total Deere & Company stockholders' equity		10,410.3		9,557.3		7,684.7		4,729.2		4,643.6		4,409.0
Noncontrolling interests		9.7		3.2		9.1
Total stockholders’ equity		10,420.0		9,560.5		7,693.8		4,729.2		4,643.6		4,409.0
Total Liabilities and Stockholders’ Equity	$	33,903.2	$	30,738.4	$	27,721.5	$	44,278.0	$	42,596.4	$	40,915.0

* Deere & Company with Financial Services on the equity basis.

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.

Supplemental Consolidating Data Statement of Cash Flows

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Six Months Ended April 29, 2018 and April 30, 2017
(In millions of dollars) Unaudited	EQUIPMENT OPERATIONS*				FINANCIAL SERVICES
	2018		2017		2018		2017
Cash Flows from Operating Activities
Net income	$	674.9	$	1,006.7	$	529.4	$	217.9
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses		9.2		(.2)		17.6		32.8
Provision for depreciation and amortization		483.8		427.0		529.3		476.9
Gain on sale of affiliates and investments		(13.2)		(281.4)
Undistributed earnings of unconsolidated subsidiaries and affiliates		(93.8)		59.8		(1.0)		(.6)
Provision (credit) for deferred income taxes		934.5		(118.8)		(330.2)		18.4
Changes in assets and liabilities:
Trade receivables		(188.5)		(87.7)
Inventories		(1,439.5)		(771.8)
Accounts payable and accrued expenses		578.0		200.0		84.2		18.0
Accrued income taxes payable/receivable		147.4		191.5		5.6		3.6
Retirement benefits		62.7		111.0		4.9		4.6
Other		(106.1)		(49.2)		72.0		104.8
Net cash provided by operating activities		1,049.4		686.9		911.8		876.4
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)						9,486.7		8,833.8
Proceeds from maturities and sales of marketable securities		3.6		7.9		20.2		33.4
Proceeds from sales of equipment on operating leases						748.6		786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold		55.0		113.9
Cost of receivables acquired (excluding trade and wholesale)						(8,918.8)		(8,238.0)
Acquisitions of businesses, net of cash acquired		(5,171.1)
Purchases of marketable securities						(62.8)		(43.7)
Purchases of property and equipment		(351.6)		(252.2)		(.6)		(.8)
Cost of equipment on operating leases acquired						(1,409.3)		(1,355.6)
Increase in trade and wholesale receivables						(2,293.8)		(1,012.7)
Other		44.2		(18.1)		(47.0)		(.6)
Net cash used for investing activities		(5,419.9)		(148.5)		(2,476.8)		(997.8)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings		(67.1)		(7.4)		266.2		190.5
Change in intercompany receivables/payables		(641.6)		(287.5)		641.6		287.5
Proceeds from long-term borrowings		107.1		19.1		3,970.6		2,642.5
Payments of long-term borrowings		(85.3)		(24.7)		(2,803.4)		(2,717.5)
Proceeds from issuance of common stock		198.6		383.6
Repurchases of common stock		(60.6)		(6.2)
Dividends paid		(386.9)		(379.5)		(439.1)		(280.2)
Other		(25.5)		(25.8)		(18.5)		(13.9)
Net cash provided by (used for) financing activities		(961.3)		(328.4)		1,617.4		108.9
Effect of Exchange Rate Changes on Cash and Cash Equivalents		152.3		(6.7)		(6.4)		(.8)
Net Increase (Decrease) in Cash and Cash Equivalents		(5,179.5)		203.3		46.0		(13.3)
Cash and Cash Equivalents at Beginning of Period		8,168.4		3,140.5		1,166.5		1,195.3
Cash and Cash Equivalents at End of Period	$	2,988.9	$	3,343.8	$	1,212.5	$	1,182.0

* Deere & Company with Financial Services on the equity basis.

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CASH FLOW INFORMATION
Transfer of inventory to equipment on operating leases	$ 357	$ 319
Accounts payable related to purchases of property and equipment	$ 42	$ 32

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NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
New accounting standards adopted
Operating profit	$ 1,494.0	$ 1,278.0	$ 2,130.0	$ 1,700.0
Cost of sales	7,333.3	5,427.7	12,037.8	9,209.2
Research and development expenses	415.2	325.4	772.0	637.5
Selling, administrative and general expenses	939.2	783.6	1,644.3	1,451.0
Other operating expenses	344.9	354.1	687.8	682.3
Net income attributable to Deere & Company	1,208.3	808.5	673.2	1,007.5
Cash flow provided by operating activities			(1,221.7)	(163.7)
ASU 2017-07 | Early Adoption
New accounting standards adopted
Operating profit	$ 4.0	7.0	$ 12.0	14.0
ASU 2017-07 | Early Adoption | Restatement Adjustment
New accounting standards adopted
Cost of sales		(17.0)		(32.0)
Research and development expenses		1.0		2.0
Selling, administrative and general expenses		9.0		16.0
Other operating expenses		7.0		14.0
ASU 2016-09 | Early Adoption | Restatement Adjustment
New accounting standards adopted
Net income attributable to Deere & Company		$ 6.0		11.0
Cash flow provided by operating activities				$ 11.0

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OTHER COMPREHENSIVE INCOME ITEMS - After-Tax Changes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Accumulated other comprehensive income (loss)
Balance			$ 9,560.5	$ 6,530.8
Net current period other comprehensive income (loss)	$ 116.1	$ 109.0	390.9	130.5
Balance	10,420.0	7,693.8	10,420.0	7,693.8
Total Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss)
Balance			(4,564.0)	(5,626.0)
Other comprehensive income (loss) items before reclassification			308.0	151.0
Amounts reclassified from accumulated other comprehensive income (loss)			83.0	(21.0)
Net current period other comprehensive income (loss)			391.0	130.0
Balance	(4,173.0)	(5,496.0)	(4,173.0)	(5,496.0)
Retirement Benefits Adjustment
Accumulated other comprehensive income (loss)
Balance			(3,580.0)	(4,409.0)
Other comprehensive income (loss) items before reclassification			81.0	(13.0)
Amounts reclassified from accumulated other comprehensive income (loss)			84.0	89.0
Net current period other comprehensive income (loss)	119.0	33.0	165.0	76.0
Balance	(3,415.0)	(4,333.0)	(3,415.0)	(4,333.0)
Cumulative Translation Adjustment
Accumulated other comprehensive income (loss)
Balance			(999.0)	(1,229.0)
Other comprehensive income (loss) items before reclassification			225.0	(1.0)
Net current period other comprehensive income (loss)	1.0	17.0	225.0	(1.0)
Balance	(774.0)	(1,230.0)	(774.0)	(1,230.0)
Unrealized Gain (Loss) on Derivatives
Accumulated other comprehensive income (loss)
Balance			5.0	1.0
Other comprehensive income (loss) items before reclassification	6.0	(2.0)	11.0
Amounts reclassified from accumulated other comprehensive income (loss)			(1.0)	2.0
Net current period other comprehensive income (loss)	5.0		10.0	2.0
Balance	15.0	3.0	15.0	3.0
Unrealized Gain (Loss) on Investments
Accumulated other comprehensive income (loss)
Balance			10.0	11.0
Other comprehensive income (loss) items before reclassification	(9.0)	170.0	(9.0)	165.0
Amounts reclassified from accumulated other comprehensive income (loss)				(112.0)
Net current period other comprehensive income (loss)	(9.0)	59.0	(9.0)	53.0
Balance	$ 1.0	$ 64.0	$ 1.0	$ 64.0

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OTHER COMPREHENSIVE INCOME ITEMS - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Other Comprehensive Income (Loss), Before Tax
Interest expense	$ (303.7)	$ (226.9)	$ (590.0)	$ (434.9)
Other operating expenses	(344.9)	(354.1)	(687.8)	(682.3)
Other income	219.1	362.2	435.7	634.0
Total other comprehensive income (loss), before tax	152.0	162.0	453.0	206.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Total other comprehensive income (loss), tax (expense) credit	(36.0)	(53.0)	(62.0)	(76.0)
Other Comprehensive Income (Loss), After Tax
Other Comprehensive Income (Loss), Net of Income Taxes	116.1	109.0	390.9	130.5
Cumulative Translation Adjustment
Other Comprehensive Income (Loss), Before Tax
Total other comprehensive income (loss), before tax		17.0	225.0	(1.0)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Total other comprehensive income (loss), tax (expense) credit	1.0
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax			225.0	(1.0)
Other Comprehensive Income (Loss), Net of Income Taxes	1.0	17.0	225.0	(1.0)
Unrealized Gain (Loss) on Derivatives
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	7.0	(4.0)	15.0
Total other comprehensive income (loss), before tax	6.0		14.0	3.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	(1.0)	2.0	(4.0)
Total other comprehensive income (loss), tax (expense) credit	(1.0)		(4.0)	(1.0)
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	6.0	(2.0)	11.0
Reclassification from accumulated other comprehensive income, after tax			(1.0)	2.0
Other Comprehensive Income (Loss), Net of Income Taxes	5.0		10.0	2.0
Unrealized Gain (Loss) on Derivatives | Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss), Before Tax
Interest expense	(1.0)	1.0	(1.0)	1.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit		(1.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	(1.0)		(1.0)	1.0
Unrealized Gain (Loss) on Derivatives | Foreign Exchange Contracts | Reclassification out of Accumulated Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss), Before Tax
Other operating expenses		3.0		2.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit		(1.0)		(1.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax		2.0		1.0
Unrealized Gain (Loss) on Investments
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	(11.0)	269.0	(11.0)	262.0
Total other comprehensive income (loss), before tax	(12.0)	93.0	(12.0)	84.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	2.0	(99.0)	2.0	(97.0)
Total other comprehensive income (loss), tax (expense) credit	3.0	(34.0)	3.0	(31.0)
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	(9.0)	170.0	(9.0)	165.0
Reclassification from accumulated other comprehensive income, after tax				(112.0)
Other Comprehensive Income (Loss), Net of Income Taxes	(9.0)	59.0	(9.0)	53.0
Unrealized Gain (Loss) on Investments | Reclassification out of Accumulated Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss), Before Tax
Other income	(1.0)	(176.0)	(1.0)	(178.0)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	1.0	65.0	1.0	66.0
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax		(111.0)		(112.0)
Retirement Benefits Adjustment
Other Comprehensive Income (Loss), Before Tax
Total other comprehensive income (loss), before tax	158.0	52.0	226.0	120.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Total other comprehensive income (loss), tax (expense) credit	(39.0)	(19.0)	(61.0)	(44.0)
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax			81.0	(13.0)
Reclassification from accumulated other comprehensive income, after tax			84.0	89.0
Other Comprehensive Income (Loss), Net of Income Taxes	119.0	33.0	165.0	76.0
Retirement Benefits Adjustment | Pensions
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	39.0	(8.0)	46.0	(9.0)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	(9.0)	3.0	(11.0)	3.0
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	30.0	(5.0)	35.0	(6.0)
Retirement Benefits Adjustment | Other Postretirement
Other Comprehensive Income (Loss), Before Tax
Other comprehensive income (loss) before reclassification, before tax	60.0	(10.0)	60.0	(10.0)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	(14.0)	3.0	(14.0)	3.0
Other Comprehensive Income (Loss), After Tax
Other comprehensive income (loss) before reclassification, after tax	46.0	(7.0)	46.0	(7.0)
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	54.0	61.0	115.0	121.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(14.0)	(22.0)	(34.0)	(44.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	40.0	39.0	81.0	77.0
Actuarial (Gain) Loss | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other Postretirement
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	15.0	24.0	31.0	49.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(4.0)	(9.0)	(9.0)	(18.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	11.0	15.0	22.0	31.0
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	3.0	3.0	6.0	6.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(1.0)	(1.0)	(2.0)	(2.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	2.0	2.0	4.0	4.0
Prior Service (Credit) Cost | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Other Postretirement
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	(19.0)	(19.0)	(38.0)	(38.0)
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	5.0	7.0	11.0	14.0
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	(14.0)	(12.0)	(27.0)	(24.0)
Settlements/Curtailments | Reclassification out of Accumulated Other Comprehensive Income (Loss) | Pensions
Other Comprehensive Income (Loss), Before Tax
Other operating expenses	6.0	1.0	6.0	1.0
Other Comprehensive Income (Loss), Tax (Expense) Credit
Reclassification from accumulated other comprehensive income, tax (expense) credit	(2.0)		(2.0)
Other Comprehensive Income (Loss), After Tax
Reclassification from accumulated other comprehensive income, after tax	$ 4.0	$ 1.0	$ 4.0	$ 1.0

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OTHER COMPREHENSIVE INCOME ITEMS - Noncontrolling Interests' (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interests
Comprehensive income (loss) attributable to noncontrolling interests	$ 1.7	$ (0.2)	$ 2.1	$ (0.8)
Net income (loss) attributable to noncontrolling interests	1.4	(0.2)	1.7	(0.8)
Cumulative translation adjustments attributable to noncontrolling interests	$ 0.3	$ 0.0	$ 0.4	$ 0.0

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DIVIDENDS DECLARED AND PAID (Details) - $ / shares	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
DIVIDENDS DECLARED AND PAID
Dividends declared (in dollars per share)	$ 0.60	$ 0.60	$ 1.20	$ 1.20
Dividends paid (in dollars per share)	$ 0.60	$ 0.60	$ 1.20	$ 1.20

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
EARNINGS PER SHARE
Net income attributable to Deere & Company	$ 1,208.3	$ 808.5	$ 673.2	$ 1,007.5
Less income allocable to participating securities (in dollars)	0.2	0.2	0.1	0.3
Income allocable to common stock (in dollars)	$ 1,208.1	$ 808.3	$ 673.1	$ 1,007.2
Average shares outstanding	324.2	319.2	323.4	317.9
Basic (in dollars per share)	$ 3.73	$ 2.53	$ 2.08	$ 3.17
Diluted Earnings Per Share
Average shares outstanding	324.2	319.2	323.4	317.9
Effect of dilutive share-based compensation (in shares)	5.0	3.8	5.0	3.4
Total potential shares outstanding	329.2	323.0	328.4	321.3
Diluted (in dollars per share)	$ 3.67	$ 2.50	$ 2.05	$ 3.14
Antidilutive incremental shares excluded from computation of earnings per share	0.5	0.7	0.3	0.5

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PENSION AND POSTRETIREMENT BENEFITS - Components of Benefit Costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Pensions
Net Periodic Cost
Service cost	$ 76	$ 67	$ 148	$ 135
Interest cost	97	90	195	180
Expected return on plan assets	(194)	(197)	(388)	(394)
Amortization of actuarial (gain) loss	54	61	115	121
Amortization of prior service (credit) cost	3	3	6	6
Settlements/curtailments	6	1	6	1
Net cost	42	25	82	49
Employer Contributions
Defined benefit plan employer contributions			86
Defined benefit plan employer contributions expected for the remainder of the fiscal year	851		851
Pensions | U.S.
Employer Contributions
Defined benefit plan employer contributions			50
Defined benefit plan employer contributions expected for the remainder of the fiscal year	820		820
Other Postretirement
Net Periodic Cost
Service cost	11	11	22	21
Interest cost	48	49	96	98
Expected return on plan assets	(6)	(5)	(11)	(9)
Amortization of actuarial (gain) loss	15	24	31	49
Amortization of prior service (credit) cost	(19)	(19)	(38)	(38)
Net cost	49	$ 60	100	$ 121
Employer Contributions
Defined benefit plan employer contributions			31
Defined benefit plan employer contributions expected for the remainder of the fiscal year	138		138
Other Postretirement | U.S.
Employer Contributions
Defined benefit plan employer contributions expected for the remainder of the fiscal year	130		130
Pension and Other Postretirement | U.S.
Employer Contributions
Defined benefit plan approved voluntary employer contributions	$ 1,000		$ 1,000

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INCOME TAXES - Tax Reform (Details) - USD ($) $ in Millions	3 Months Ended	4 Months Ended	6 Months Ended	12 Months Ended
	Apr. 29, 2018	Apr. 29, 2018	Apr. 29, 2018	Oct. 28, 2018	Dec. 31, 2017
U.S. Tax Reform
Corporate federal statutory tax rate (as a percent)		21.00%			35.00%
Deemed repatriation tax payment period			8 years
Net deferred tax asset remeasurement	$ (177)		$ 539
Deemed earnings repatriation tax	3		264
Total discrete tax expense (benefit)	(174)		803
Forecasted
U.S. Tax Reform
Corporate federal statutory tax rate (as a percent)				23.30%
Pension and Other Postretirement | U.S.
U.S. Tax Reform
Defined benefit plan approved voluntary employer contributions	1,000	$ 1,000	1,000
Equipment Operations
U.S. Tax Reform
Net deferred tax asset remeasurement	(158)		853
Deemed earnings repatriation tax	(49)		179
Total discrete tax expense (benefit)	(207)		1,032
Financial Services
U.S. Tax Reform
Net deferred tax asset remeasurement	(19)		(314)
Deemed earnings repatriation tax	52		85
Total discrete tax expense (benefit)	$ 33		$ (229)

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INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
UNRECOGNIZED TAX BENEFITS
Unrecognized tax benefits	$ 421	$ 221
Unrecognized tax benefits affecting effective tax rate if recognized	157	$ 86	$ 79
Reduction of unrecognized tax benefits reasonably possible in next 12 months	160
Reduction of unrecognized tax benefits reasonably possible in the next 12 months affecting effective tax rate if recognized	$ 55

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SEGMENT REPORTING (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017	Oct. 29, 2017
Net Sales and Revenues
Total net sales	$ 9,747.0	$ 7,259.8	$ 15,721.0	$ 11,957.7
% Change - Net sales	34.00%		31.00%
Total net sales and revenues	$ 10,720.0	8,287.0	$ 17,633.5	13,912.2
% Change - Net sales and revenues	29.00%		27.00%
Operating Profit (Loss)
Total operating profit (loss)	$ 1,494.0	1,278.0	$ 2,130.0	1,700.0
% Change - Operating profit (loss)	17.00%		25.00%
Net income attributable to Deere & Company	$ 1,208.3	808.5	$ 673.2	1,007.5
% Change - Net income (loss) attributable to Deere & Company	50.00%		(33.00%)
Identifiable Assets
Total Assets	$ 69,873.0	58,968.8	$ 69,873.0	58,968.8	$ 65,786.3
% Change - Identifiable assets			6.00%
Operating Segments (Other)
Reconciling items	$ (109.0)	(104.0)	$ (222.0)	(198.0)
% Change - Reconciling items	5.00%		12.00%
Income taxes	$ (177.1)	(365.8)	$ (1,234.7)	(495.1)
% Change - Income taxes	(52.00%)		149.00%
Equipment Operations
Net Sales and Revenues
Total net sales	$ 9,747.0	7,259.8	$ 15,721.0	11,957.7
Total net sales and revenues	9,977.7	7,618.1	16,159.7	12,595.3
Operating Profit (Loss)
Net income attributable to Deere & Company	1,208.3	808.5	673.2	1,007.5
Identifiable Assets
Total Assets	33,903.2	27,721.5	33,903.2	27,721.5	30,738.4
Operating Segments (Other)
Income taxes	(100.8)	(309.7)	(1,364.7)	(384.6)
Equipment Operations | Outside U.S. and Canada:
Net Sales and Revenues
Total net sales	$ 4,295.0	2,968.0	$ 6,804.0	4,860.0
% Change - Net sales	45.00%		40.00%
Operating Profit (Loss)
Total operating profit (loss)	$ 534.0	391.0	$ 680.0	467.0
% Change - Operating profit (loss)	37.00%		46.00%
Corporate
Identifiable Assets
Total Assets	$ 4,521.0		$ 4,521.0		10,619.0
% Change - Identifiable assets			(57.00%)
Other Revenues
Net Sales and Revenues
Total net sales and revenues	$ 178.0	311.0	$ 340.0	542.0
% Change - Net sales and revenues	(43.00%)		(37.00%)
Agriculture and Turf
Net Sales and Revenues
Total net sales	$ 7,049.0	5,794.0	$ 11,292.0	9,392.0
% Change - Net sales	22.00%		20.00%
Intersegment sales and revenues	$ 15.0	10.0	$ 24.0	17.0
% Change - Intersegment sales and revenues	50.00%		41.00%
Operating Profit (Loss)
Total operating profit (loss)	$ 1,056.0	1,009.0	$ 1,443.0	1,227.0
% Change - Operating profit (loss)	5.00%		18.00%
Identifiable Assets
Total Assets	$ 10,603.0		$ 10,603.0		9,359.0
% Change - Identifiable assets			13.00%
Construction and Forestry
Net Sales and Revenues
Total net sales	$ 2,698.0	1,466.0	$ 4,429.0	2,566.0
% Change - Net sales	84.00%		73.00%
Operating Profit (Loss)
Total operating profit (loss)	$ 259.0	111.0	$ 291.0	148.0
% Change - Operating profit (loss)	133.00%		97.00%
Identifiable Assets
Total Assets	$ 10,471.0		$ 10,471.0		3,212.0
% Change - Identifiable assets			226.00%
Financial Services
Net Sales and Revenues
Total net sales and revenues	$ 795.0	716.0	$ 1,572.0	1,412.0
% Change - Net sales and revenues	11.00%		11.00%
Intersegment sales and revenues	$ 82.0	62.0	$ 145.0	111.0
% Change - Intersegment sales and revenues	32.00%		31.00%
Operating Profit (Loss)
Total operating profit (loss)	$ 179.0	$ 158.0	$ 396.0	$ 325.0
% Change - Operating profit (loss)	13.00%		22.00%
Identifiable Assets
Total Assets	$ 44,278.0		$ 44,278.0		$ 42,596.0
% Change - Identifiable assets			4.00%

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FINANCING RECEIVABLES - Past Due Age Analysis (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Jan. 28, 2018	Oct. 29, 2017	Apr. 30, 2017	Jan. 29, 2017	Oct. 30, 2016
Financing Receivable, Past Due
Minimum number of days for a financing receivable to be considered past due	30 days
Generally the number of days before a receivable is considered to be non-performing, accrual of finance income is ceased and the estimated uncollectible amount is written off	120 days
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	$ 489		$ 435	$ 511
Total Non-Performing	233		220	204
Current	28,177		28,795	27,045
Total Financing Receivables	28,899		29,450	27,760
Less allowance for credit losses	187	$ 190	187	177	$ 175	$ 176
Total financing receivables - net	28,712		29,263	27,583
30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	257		231	249
60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	122		107	135
90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	110		97	127
Retail Notes
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Financing Receivables	20,522			20,008
Less allowance for credit losses	120	$ 123	121	111	$ 111	$ 113
Retail Notes | Agriculture and Turf
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	219		221	260
Total Non-Performing	171		173	159
Current	17,014		17,508	16,838
Total Financing Receivables	17,404		17,902	17,257
Retail Notes | Agriculture and Turf | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	117		118	120
Retail Notes | Agriculture and Turf | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	58		54	75
Retail Notes | Agriculture and Turf | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	44		49	65
Retail Notes | Construction and Forestry
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	177		147	157
Total Non-Performing	42		30	31
Current	2,899		2,618	2,563
Total Financing Receivables	3,118		2,795	2,751
Retail Notes | Construction and Forestry | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	97		75	80
Retail Notes | Construction and Forestry | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	44		33	44
Retail Notes | Construction and Forestry | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	36		39	33
Other Financing Receivables | Agriculture and Turf
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	76		48	76
Total Non-Performing	16		12	10
Current	7,072		7,610	6,692
Total Financing Receivables	7,164		7,670	6,778
Other Financing Receivables | Agriculture and Turf | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	32		27	37
Other Financing Receivables | Agriculture and Turf | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	16		14	12
Other Financing Receivables | Agriculture and Turf | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	28		7	27
Other Financing Receivables | Construction and Forestry
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	17		19	18
Total Non-Performing	4		5	4
Current	1,192		1,059	952
Total Financing Receivables	1,213		1,083	974
Other Financing Receivables | Construction and Forestry | 30-59 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	11		11	12
Other Financing Receivables | Construction and Forestry | 60-89 Days Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	4		6	4
Other Financing Receivables | Construction and Forestry | 90 Days or Greater Past Due
Age Analysis of Past Due Financing Receivables Still Accruing Interest and Non-Performing Financing Receivables
Total Past Due	$ 2		$ 2	$ 2

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FINANCING RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017	Oct. 29, 2017
Allowance:
Beginning of period balance	$ 190	$ 175	$ 187	$ 176
Provision (credit)	16	26	18	33
Write-offs	(23)	(34)	(37)	(50)
Recoveries	10	10	21	18
Translation adjustments	(6)		(2)
End of period balance	187	177	187	177
Financing receivables:
End of period balance	28,899	27,760	28,899	27,760	$ 29,450
Balance individually evaluated	136	169	136	169
Retail Notes
Allowance:
Beginning of period balance	123	111	121	113
Provision (credit)	5	10	5	18
Write-offs	(7)	(15)	(14)	(27)
Recoveries	4	5	10	7
Translation adjustments	(5)		(2)
End of period balance	120	111	120	111
Financing receivables:
End of period balance	20,522	20,008	20,522	20,008
Balance individually evaluated	120	148	120	148
Revolving Charge Accounts
Allowance:
Beginning of period balance	40	41	40	40
Provision (credit)	9	15	9	13
Write-offs	(15)	(18)	(20)	(20)
Recoveries	6	5	11	10
End of period balance	40	43	40	43
Financing receivables:
End of period balance	3,205	3,036	3,205	3,036
Balance individually evaluated	1	4	1	4
Other Financing Receivables
Allowance:
Beginning of period balance	27	23	26	23
Provision (credit)	2	1	4	2
Write-offs	(1)	(1)	(3)	(3)
Recoveries				1
Translation adjustments	(1)
End of period balance	27	23	27	23
Financing receivables:
End of period balance	5,172	4,716	5,172	4,716
Balance individually evaluated	$ 15	$ 17	$ 15	$ 17

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FINANCING RECEIVABLES - Impaired (Details) - USD ($) $ in Millions	6 Months Ended		12 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Oct. 29, 2017
Analysis of Impaired Financing Receivables
Recorded investment, with specific allowance	$ 33	$ 23	$ 36
Recorded investment, without specific allowance	41	27	28
Recorded Investment	74	50	64
Unpaid principal balance, with specific allowance	31	22	33
Unpaid principal balance, without specific allowance	40	24	27
Unpaid Principal Balance	71	46	60
Specific Allowance	10	9	10
Average recorded investment, with specific allowance	34	26	30
Average recorded investment, without specific allowance	43	28	24
Average Recorded Investment	77	54	54
Agriculture and Turf
Analysis of Impaired Financing Receivables
Recorded Investment	52	28	49
Unpaid Principal Balance	51	26	46
Specific Allowance	9	8	10
Average Recorded Investment	54	32	38
Construction and Forestry
Analysis of Impaired Financing Receivables
Recorded Investment	22	22	15
Unpaid Principal Balance	20	20	14
Specific Allowance	1	1
Average Recorded Investment	$ 23	$ 22	$ 16

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FINANCING RECEIVABLES - Troubled Debt Restructuring (Details) $ in Millions	6 Months Ended
	Apr. 29, 2018 USD ($) item	Apr. 30, 2017 USD ($) item
Financing Receivables Related to Troubled Debt Restructurings
Financing receivable contracts in troubled debt restructuring, number | item	253	226
Financing receivables in troubled debt restructurings, aggregate balances, pre-modification	$ 13	$ 5
Financing receivables in troubled debt restructurings, aggregate balances, post-modification	13	$ 4
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings	$ 8

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SECURITIZATION OF FINANCING RECEIVABLES (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Securitization Transactions
Unconsolidated conduits, carrying value of liabilities	$ 1,310.0
Unconsolidated conduits, maximum exposure to loss	1,383.0
Financing receivables securitized (retail notes)	4,450.0	$ 4,172.0	$ 4,295.0
Allowance for credit losses - securitization transactions	(14.0)	(13.0)	(13.0)
Other assets - securitization transactions	122.0	105.0	115.0
Total restricted securitized assets - securitization transactions	4,558.0	4,264.0	4,397.0
Short-term securitization borrowings	4,401.1	4,118.7	4,224.6
Accrued interest on borrowings - securitization transactions	3.0	2.0	2.0
Total liabilities related to restricted securitized assets - securitization transactions	$ 4,404.0	4,121.0	4,227.0
Maximum remaining term of all restricted securitized retail notes	7 years
VIE-Primary Beneficiary
Securitization Transactions
Total restricted securitized assets - securitization transactions	$ 2,489.0	2,631.0	2,589.0
Total liabilities related to restricted securitized assets - securitization transactions	2,438.0	2,571.0	2,522.0
Non-VIE Banking Operation
Securitization Transactions
Total restricted securitized assets - securitization transactions	686.0	478.0	413.0
Total liabilities related to restricted securitized assets - securitization transactions	656.0	454.0	390.0
VIE-Not Primary Beneficiary
Securitization Transactions
Total Assets	36,000.0
Total restricted securitized assets - securitization transactions	1,383.0	1,155.0	1,395.0
Total liabilities related to restricted securitized assets - securitization transactions	$ 1,310.0	$ 1,096.0	$ 1,315.0

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INVENTORIES (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
INVENTORIES
Raw materials and supplies	$ 2,231.0	$ 1,688.0	$ 1,559.0
Work-in-process	900.0	495.0	531.0
Finished goods and parts	5,208.0	3,182.0	3,421.0
Total FIFO value	8,339.0	5,365.0	5,511.0
Less adjustment to LIFO value	1,450.0	1,461.0	1,396.0
Inventories	$ 6,888.9	$ 3,904.1	$ 4,114.8

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GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Goodwill (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	$ 1,033.3	$ 816.0
Acquisitions	2,085.0
Divestitures	(10.0)
Translation adjustments	81.0
Translation adjustments and other		(10.0)
Goodwill - net, ending balance	3,188.7	806.2
Accumulated impairment loss	0.0	0.0
Agriculture and Turf
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	521.0	323.0
Acquisitions	25.0
Translation adjustments	5.0
Translation adjustments and other		(10.0)
Goodwill - net, ending balance	551.0	313.0
Construction and Forestry
Changes in Amounts of Goodwill
Goodwill - net, beginning balance	512.0	493.0
Acquisitions	2,060.0
Divestitures	(10.0)
Translation adjustments	76.0
Goodwill - net, ending balance	$ 2,638.0	$ 493.0

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GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Intangible Assets (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Amortized intangible assets:
Total at cost	$ 1,699.0	$ 181.0	$ 168.0
Less accumulated amortization	130.0	86.0	77.0
Total amortized intangible assets - net	1,569.0	95.0	91.0
Unamortized intangible assets:
Other intangible assets - net	$ 1,692.2	218.0	90.8
Customer Lists and Relationships
Amortized intangible assets:
Weighted-average useful lives	16 years
Total at cost	$ 590.0	42.0	39.0
Less accumulated amortization	$ 30.0	17.0	15.0
Technology, Patents, Trademarks, and Other
Amortized intangible assets:
Weighted-average useful lives	18 years
Total at cost	$ 1,109.0	139.0	129.0
Less accumulated amortization	100.0	69.0	$ 62.0
In-process Research and Development
Unamortized intangible assets:
Unamortized intangible assets	$ 123.0	$ 123.0

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GOODWILL AND OTHER INTANGIBLE ASSETS-NET - Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Amortized Intangible Assets:
Amortization expense of other intangible assets	$ 31	$ 4	$ 44	$ 9
Amortization expense of other intangible assets - remainder of 2018	61		61
Amortization expense of other intangible assets - 2019	121		121
Amortization expense of other intangible assets - 2020	109		109
Amortization expense of other intangible assets - 2021	104		104
Amortization expense of other intangible assets - 2022	$ 104		$ 104

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COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
COMMITMENTS AND CONTINGENCIES
Historical claims rate, review period			5 years
Unamortized extended warranty premiums (deferred revenue)	$ 475	$ 444	$ 475	$ 444
Change in Warranty Liability and Unearned Premiums
Beginning of period balance	1,550	1,285	1,468	1,226
Payments	(213)	(167)	(430)	(332)
Amortization of premiums received	(57)	(54)	(113)	(97)
Accruals for warranties	260	238	453	470
Premiums received	65	55	126	95
Acquisitions			80
Foreign exchange	(14)	8	7	3
End of period balance	$ 1,591	$ 1,365	$ 1,591	$ 1,365

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COMMITMENTS AND CONTINGENCIES - Other (Details) $ in Millions	6 Months Ended
	Apr. 29, 2018 USD ($)
Long Term Purchase Commitments
Commitments for the construction and acquisition of property and equipment	$ 328
Restricted Assets and Other Contingent Liabilities
Other restricted assets	123
Miscellaneous contingent liabilities	85
Guarantees, Third-party Receivables
Guarantee Obligations
Guarantee obligations maximum exposure	447
Guarantee obligations accrued losses	$ 16
Guarantee obligations term	P8Y

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FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Fair Values of Financial Instruments
Financing receivables - net	$ 24,275.5	$ 25,104.1	$ 23,301.1
Financing receivables securitized - net	4,436.3	4,158.8	4,281.8
Short-term securitization borrowings	4,401.1	4,118.7	4,224.6
Long-term borrowings	26,278.6	25,891.3	23,253.1
Level 2
Fair Values of Financial Instruments
Short-term securitization borrowings		4,118.0	4,225.0
Long-term borrowings due within one year	6,832.0	6,233.0	5,464.0
Long-term borrowings	26,619.0	26,632.0	23,884.0
Level 3
Fair Values of Financial Instruments
Financing receivables - net	24,071.0	24,946.0	23,141.0
Financing receivables securitized - net	4,383.0	4,130.0	4,253.0
Level 2 and Level 3
Fair Values of Financial Instruments
Short-term securitization borrowings	4,387.0
Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	24,276.0	25,104.0	23,301.0
Financing receivables securitized - net	4,436.0	4,159.0	4,282.0
Short-term securitization borrowings	4,401.0	4,119.0	4,225.0
Long-term borrowings due within one year	6,840.0	6,218.0	5,459.0
Long-term borrowings	26,279.0	25,891.0	23,253.0
Equipment Operations
Fair Values of Financial Instruments
Financing receivables - net	75.7
Financing receivables securitized - net	113.1
Short-term securitization borrowings	113.2
Long-term borrowings	5,536.5	5,490.9	4,520.4
Equipment Operations | Level 2
Fair Values of Financial Instruments
Long-term borrowings due within one year	273.0	154.0	119.0
Long-term borrowings	5,850.0	6,026.0	5,020.0
Equipment Operations | Level 3
Fair Values of Financial Instruments
Financing receivables - net	74.0
Financing receivables securitized - net	110.0
Short-term securitization borrowings	113.0
Equipment Operations | Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	76.0
Financing receivables securitized - net	113.0
Short-term securitization borrowings	113.0
Long-term borrowings due within one year	274.0	154.0	120.0
Long-term borrowings	5,537.0	5,491.0	4,520.0
Financial Services
Fair Values of Financial Instruments
Financing receivables - net	24,199.8	25,104.1	23,301.1
Financing receivables securitized - net	4,323.2	4,158.8	4,281.8
Short-term securitization borrowings	4,287.9	4,118.7	4,224.6
Long-term borrowings	20,742.1	20,400.4	18,732.7
Financial Services | Level 2
Fair Values of Financial Instruments
Short-term securitization borrowings	4,274.0	4,118.0	4,225.0
Long-term borrowings due within one year	6,559.0	6,079.0	5,345.0
Long-term borrowings	20,769.0	20,606.0	18,864.0
Financial Services | Level 3
Fair Values of Financial Instruments
Financing receivables - net	23,997.0	24,946.0	23,141.0
Financing receivables securitized - net	4,273.0	4,130.0	4,253.0
Financial Services | Carrying Value
Fair Values of Financial Instruments
Financing receivables - net	24,200.0	25,104.0	23,301.0
Financing receivables securitized - net	4,323.0	4,159.0	4,282.0
Short-term securitization borrowings	4,288.0	4,119.0	4,225.0
Long-term borrowings due within one year	6,566.0	6,064.0	5,339.0
Long-term borrowings	$ 20,742.0	$ 20,400.0	$ 18,733.0

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FAIR VALUE MEASUREMENTS - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	$ 479.3	$ 451.6	$ 546.3
Derivative assets	194.0	235.0	216.0
Derivative liabilities	371.0	158.0	131.0
Transfer from Level 1 to Level 2, assets	0.0		0.0
Transfer from Level 2 to Level 1, assets	0.0		0.0
Transfer from Level 1 to Level 2, liabilities	0.0		0.0
Transfer from Level 2 to Level 1, liabilities	0.0		0.0
Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	194.0	235.0	216.0
Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	371.0	158.0	131.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Total Estimated Fair Value
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	479.0	452.0	546.0
Total assets	673.0	687.0	762.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 and Level 2 | U.S. Government Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	86.0	77.0	79.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Equity Fund
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	46.0	48.0	135.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | Fixed Income Funds
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	14.0	15.0	15.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 1 | U.S. Government Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	42.0	44.0	46.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total liabilities	371.0	158.0	131.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	87.0	116.0	142.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	341.0	131.0	79.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	101.0	108.0	60.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	28.0	26.0	50.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Other Assets
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative assets	6.0	11.0	14.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Derivative liabilities	2.0	1.0	2.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Municipal Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	46.0	39.0	39.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Corporate Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	137.0	135.0	132.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Mortgage-backed Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	133.0	118.0	118.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 and Level 3 | International Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	17.0	20.0	28.0
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 3 | International Debt Securities
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities	$ 14.0	$ 17.0	$ 23.0

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FAIR VALUE MEASUREMENTS - Contractual Maturities of Debt Securities (Details) $ in Millions	Apr. 29, 2018 USD ($)
Contractual Maturities of Debt Securities, Amortized Cost
Amortized cost, due in one year or less	$ 29
Amortized cost, due after one through five years	107
Amortized cost, due after five through 10 years	95
Amortized cost, due after 10 years	62
Amortized cost, mortgage-backed securities	139
Amortized cost, debt securities	432
Contractual Maturities of Debt Securities, Fair Value
Fair value, due in one year or less	28
Fair value, due after one through five years	105
Fair value, due after five through 10 years	91
Fair value, due after 10 years	62
Fair value, mortgage-backed securities	133
Fair value, debt securities	$ 419

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FAIR VALUE MEASUREMENTS - Recurring, Level 3 Measurements (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Level 3 - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Fair Value, Recurring Level 3 Measurements from Available-for-Sale Marketable Securities
Beginning of period balance	$ 15	$ 23	$ 17	$ 28
Principal payments	(1)	(1)	(3)	(6)
Change in unrealized gain (loss)		1		1
End of period balance	$ 14	$ 23	$ 14	$ 23

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FAIR VALUE MEASUREMENTS - Nonrecurring, Level 1 Measurements (Details) $ in Millions	Oct. 29, 2017 USD ($)
Fair Value, Nonrecurring Measurements | Level 1
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Investments in unconsolidated affiliates	$ 28

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DERIVATIVE INSTRUMENTS - Cash Flow Hedges (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Cash Flow Hedges
Cash flow hedge gain (loss) recorded in OCI to be reclassified within twelve months	$ 9
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts	26 months
Gains or losses reclassified from OCI to earnings	$ 0
Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments
Cash Flow Hedges
Notional amount of cash flow hedge derivatives	1,800	$ 1,700	$ 1,600
Cross-Currency Interest Rate Contracts | Cash Flow Hedges Member | Designated as Hedging Instruments
Cash Flow Hedges
Notional amount of cash flow hedge derivatives	$ 11	$ 22	$ 32

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DERIVATIVE INSTRUMENTS - Fair Value Hedges (Details) - Interest Rate Contracts - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017	Oct. 29, 2017
Fair Value Hedges
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives	$ (2)	$ 0	$ (3)	$ 2
Gain (Loss) on Fair Value Hedges
Gains (losses) on interest rate contracts	(123)	32	(271)	(202)
Net accrued interest income on interest rate contracts	5	22	17	48
Gains (losses) on borrowings	121	(32)	268	204
Accrued interest expense on borrowings	64	61	127	126
Fair Value Hedges | Designated as Hedging Instruments
Fair Value Hedges
Notional amount of interest rate fair value hedge derivatives	$ 8,421	$ 7,605	$ 8,421	$ 7,605	$ 8,661

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DERIVATIVE INSTRUMENTS - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Interest Rate Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 7,189	$ 6,757	$ 5,783
Interest Rate Cap Contracts | Purchased
Derivatives Not Designated as Hedging Instruments
Notional amounts	123	253	366
Interest Rate Cap Contracts | Sold
Derivatives Not Designated as Hedging Instruments
Notional amounts	123	253	366
Foreign Exchange Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	6,791	8,499	4,600
Cross-Currency Interest Rate Contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 92	$ 66	$ 76

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DERIVATIVE INSTRUMENTS - Fair Value (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
Fair Value of Derivative Instruments
Total derivative assets	$ 194	$ 235	$ 216
Total derivative liabilities	371	158	131
Other Assets
Fair Value of Derivative Instruments
Total derivative assets	194	235	216
Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	371	158	131
Designated as Hedging Instruments | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	37	79	123
Designated as Hedging Instruments | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	316	112	64
Designated as Hedging Instruments | Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	34	74	116
Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	316	112	64
Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	3	5	7
Not Designated as Hedging Instruments | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	157	156	93
Not Designated as Hedging Instruments | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	55	46	67
Not Designated as Hedging Instruments | Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	53	42	26
Not Designated as Hedging Instruments | Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	25	19	15
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	101	108	60
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	28	26	50
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	3	6	7
Not Designated as Hedging Instruments | Cross-Currency Interest Rate Contracts | Accounts Payable and Accrued Expenses
Fair Value of Derivative Instruments
Total derivative liabilities	$ 2	$ 1	$ 2

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DERIVATIVE INSTRUMENTS - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ 195	$ 39	$ (64)	$ (25)
Interest Rate Contracts | OCI
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, recognized in OCI, effective portion, gains (losses)	6	(1)	14	2
Interest Rate Contracts | Interest Expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Fair value hedges, gains (losses)	(118)	54	(254)	(154)
Not designated as hedges, gains (losses)	(5)	(4)
Interest Rate Contracts | Interest Expense | Cash Flow Hedges Member
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, reclassified from OCI, effective portion, gains (losses)	1	(1)	1	(1)
Foreign Exchange Contracts | OCI
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, recognized in OCI, effective portion, gains (losses)	1	(3)	1	(2)
Foreign Exchange Contracts | Cost of Sales
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	36	28	(12)	(12)
Foreign Exchange Contracts | Other Operating Expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ 164	15	$ (52)	(13)
Foreign Exchange Contracts | Other Operating Expense | Cash Flow Hedges Member
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, reclassified from OCI, effective portion, gains (losses)		$ (3)		$ (2)

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DERIVATIVE INSTRUMENTS - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017
DERIVATIVE INSTRUMENTS
Fair value of derivatives with credit-risk-related contingent features in a liability position	$ 344	$ 132	$ 81
Derivative Assets
Gross amounts recognized	194	235	216
Netting arrangements	(74)	(65)	(54)
Net amount	120	170	162
Derivative Liabilities
Gross amounts recognized	371	158	131
Netting arrangements	(74)	(65)	(54)
Cash collateral paid	(32)	0	0
Net amount	$ 265	$ 93	$ 77

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STOCK OPTION AND RESTRICTED STOCK AWARDS (Details) - $ / shares shares in Thousands	1 Months Ended	6 Months Ended
	Dec. 25, 2016	Apr. 29, 2018
Share-based Compensation, Aggregate Disclosures
Number of additional shares authorized for grant related to stock option and restricted stock awards		10,000
Stock Options
Share-based Compensation, Aggregate Disclosures
Options granted (in shares)	476
Options granted, exercise price (in dollars per share)	$ 151.95
Options granted, fair value (in dollars per share)	$ 39.11
Options outstanding (in shares)		9,100
Options outstanding, weighted-average exercise price (in dollars per share)		$ 86.73
Fair value assumptions method used	lattice model
Restricted Stock Units
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		403
Restricted Stock Units Subject to Service Based Conditions
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		318
Restricted stock units granted, weighted-average fair value (in dollars per unit)		$ 152.07
Restricted Stock Units Subject to Performance/Service Based Conditions
Share-based Compensation, Aggregate Disclosures
Restricted stock units granted (in shares)		85
Restricted stock units granted, weighted-average fair value (in dollars per unit)		$ 145.33

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ACQUISITIONS - Wirtgen Purchase Price and Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) € in Millions, $ in Millions		3 Months Ended	6 Months Ended
	Dec. 01, 2017 USD ($) item	Apr. 29, 2018 USD ($)	Apr. 29, 2018 USD ($)	Oct. 29, 2017 USD ($)	Sep. 24, 2017 EUR (€)	Apr. 30, 2017 USD ($)	Oct. 30, 2016 USD ($)
Acquisitions
Cash purchase price, net of cash acquired			$ 5,171.1
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity
Goodwill		$ 3,188.7	$ 3,188.7	$ 1,033.3		$ 806.2	$ 816.0
Wirtgen Group Holding GmbH (Wirtgen)
Acquisitions
Number of brands | item	6
Number of countries entity sells products | item	100
Number of employees | item	8,200
Cash acquired	$ 197.0
Cash purchase price, net of cash acquired	5,130.0
Liabilities assumed	1,717.0
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity
Trade accounts and notes receivable	457.0
Financing receivables	43.0
Financing receivables securitized	125.0
Other receivables	100.0
Inventories	1,538.0
Property and equipment	757.0
Goodwill	2,060.0
Other intangible assets	1,458.0
Deferred income taxes	96.0
Other assets	221.0
Total assets	6,855.0
Short-term borrowings	285.0
Short-term securitization borrowings	127.0
Accounts payable and accrued expenses	725.0
Deferred income taxes	502.0
Long-term borrowings	50.0
Retirement benefits and other liabilities	28.0
Total liabilities	1,717.0
Noncontrolling interests	$ 8.0
Measurement period adjustments
Measurement period adjustments - decrease assets		8.0
Measurement period adjustments - decrease liabilities		7.0
Measurement period adjustments - decrease noncontrolling interests		$ 1.0
Wirtgen Group Holding GmbH (Wirtgen) | Medium-term notes due 2020 - 2023
Acquisitions
Debt financing | €					€ 850

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ACQUISITIONS - Wirtgen Identifiable Intangible Assets (Details) - Wirtgen Group Holding GmbH (Wirtgen) $ in Millions	Dec. 01, 2017 USD ($)
Weighted-Average Useful Lives and Preliminary Fair Values
Preliminary fair values	$ 1,458
Customer Lists and Relationships
Weighted-Average Useful Lives and Preliminary Fair Values
Weighted-average useful lives (in years)	16 years
Preliminary fair values	$ 534
Technology, Patents, Trademarks, and Other
Weighted-Average Useful Lives and Preliminary Fair Values
Weighted-average useful lives (in years)	19 years
Preliminary fair values	$ 924

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ACQUISITIONS - Wirtgen Results and Pro Forma Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Unaudited Pro Forma Results of Operations
Pro forma net income attributable to Deere & Company	$ (1,208.3)	$ (808.5)	$ (673.2)	$ (1,007.5)
Wirtgen Group Holding GmbH (Wirtgen)
Acquisitions
Acquisition related costs			53.0
Unaudited Pro Forma Results of Operations
Net sales and revenues	10,720.0	9,045.0	18,098.0	15,253.0
Net income attributable to Deere & Company	1,310.0	837.0	877.0	942.0
Wirtgen Group Holding GmbH (Wirtgen) | Inventory Fair Value Adjustment
Unaudited Pro Forma Results of Operations
Pro forma net income attributable to Deere & Company		102.0		264.0
Wirtgen Group Holding GmbH (Wirtgen) | Amortization of Identifiable Intangible Assets
Unaudited Pro Forma Results of Operations
Pro forma net income attributable to Deere & Company		$ 21.0		$ 42.0
Wirtgen Group Holding GmbH (Wirtgen) | Selling, Administrative and General Expenses
Acquisitions
Acquisition related costs	3.0		27.0
Wirtgen Group Holding GmbH (Wirtgen) | Other Operating Expenses
Acquisitions
Acquisition related costs			26.0
Wirtgen Group Holding GmbH (Wirtgen) | Construction and Forestry
Acquisitions
Net sales and revenues	873.0		1,127.0
Operating profit (loss)	$ 41.0		$ (51.0)

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ACQUISITIONS - King Agro Purchase Price and Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Mar. 25, 2018	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017	Oct. 30, 2016
Acquisitions
Cash purchase price, net of cash acquired		$ 5,171.1
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity
Goodwill		$ 3,188.7	$ 1,033.3	$ 806.2	$ 816.0
King Agro
Acquisitions
Cash acquired	$ 3.0
Cash purchase price, net of cash acquired	41.0
Loan forgiven	4.0
Liabilities assumed	11.0
The Preliminary Fair Values Assigned to the Assets and Liabilities Related to the Acquired Entity
Trade accounts and notes receivable	4.0
Other receivables	3.0
Inventories	6.0
Property and equipment	5.0
Goodwill	25.0
Other intangible assets	13.0
Total assets	56.0
Short-term borrowings	2.0
Accounts payable and accrued expenses	4.0
Deferred income taxes	3.0
Long-term borrowings	2.0
Total liabilities	$ 11.0
Identifiable Intangibles
Weighted-average useful lives (in years)	10 years

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DIVESTITURES (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Nov. 26, 2017	Apr. 29, 2018
Sale of Assets and Liabilities
Proceeds received from sale		$ 55.0
Sale of Construction and Forestry Retail Locations in Florida
Sale of Assets and Liabilities
Total assets	$ 93.0
Liabilities	1.0
Inventory	61.0
Property and equipment - net	21.0
Goodwill	10.0
Other assets	1.0
Accounts payable and accrued expenses	1.0
Total proceeds from sale	105.0
Proceeds received from sale		$ 55.0
Gain from sale, pretax, recorded in other income	$ 13.0

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SUPPLEMENTAL CONSOLIDATING DATA - Statement of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Net Sales and Revenues
Net sales	$ 9,747.0	$ 7,259.8	$ 15,721.0	$ 11,957.7
Finance and interest income	753.9	665.0	1,476.8	1,320.5
Other income	219.1	362.2	435.7	634.0
Total	10,720.0	8,287.0	17,633.5	13,912.2
Costs and Expenses
Cost of sales	7,333.3	5,427.7	12,037.8	9,209.2
Research and development expenses	415.2	325.4	772.0	637.5
Selling, administrative and general expenses	939.2	783.6	1,644.3	1,451.0
Interest expense	303.7	226.9	590.0	434.9
Other operating expenses	344.9	354.1	687.8	682.3
Total	9,336.3	7,117.7	15,731.9	12,414.9
Income of Consolidated Group before Income Taxes	1,383.7	1,169.3	1,901.6	1,497.3
Provision (credit) for income taxes	177.1	365.8	1,234.7	495.1
Income of Consolidated Group	1,206.6	803.5	666.9	1,002.2
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Net Income	1,209.7	808.3	674.9	1,006.7
Less: Net income (loss) attributable to noncontrolling interests	1.4	(0.2)	1.7	(0.8)
Net Income Attributable to Deere & Company	1,208.3	808.5	673.2	1,007.5
Equipment Operations
Net Sales and Revenues
Net sales	9,747.0	7,259.8	15,721.0	11,957.7
Finance and interest income	27.8	18.7	39.4	40.0
Other income	202.9	339.6	399.3	597.6
Total	9,977.7	7,618.1	16,159.7	12,595.3
Costs and Expenses
Cost of sales	7,333.8	5,428.1	12,038.8	9,210.0
Research and development expenses	415.2	325.4	772.0	637.5
Selling, administrative and general expenses	799.5	644.1	1,390.2	1,189.3
Interest expense	78.2	67.0	174.2	133.8
Interest compensation to Financial Services	80.6	60.4	142.2	106.1
Other operating expenses	66.7	83.2	138.9	148.9
Total	8,774.0	6,608.2	14,656.3	11,425.6
Income of Consolidated Group before Income Taxes	1,203.7	1,009.9	1,503.4	1,169.7
Provision (credit) for income taxes	100.8	309.7	1,364.7	384.6
Income of Consolidated Group	1,102.9	700.2	138.7	785.1
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Equity in Income of Unconsolidated Subsidiaries and Affiliates	106.8	108.1	536.2	221.6
Net Income	1,209.7	808.3	674.9	1,006.7
Less: Net income (loss) attributable to noncontrolling interests	1.4	(0.2)	1.7	(0.8)
Net Income Attributable to Deere & Company	1,208.3	808.5	673.2	1,007.5
Equipment Operations | Financial Services
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Equity in Income of Unconsolidated Subsidiaries and Affiliates	104.1	103.5	529.4	217.9
Equipment Operations | Other
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Equity in Income of Unconsolidated Subsidiaries and Affiliates	2.7	4.6	6.8	3.7
Financial Services
Net Sales and Revenues
Finance and interest income	812.5	716.4	1,589.4	1,403.7
Other income	64.9	61.0	127.7	119.2
Total	877.4	777.4	1,717.1	1,522.9
Costs and Expenses
Selling, administrative and general expenses	141.5	141.3	257.7	264.7
Interest expense	231.2	169.4	425.3	318.1
Other operating expenses	324.7	307.3	635.9	612.5
Total	697.4	618.0	1,318.9	1,195.3
Income of Consolidated Group before Income Taxes	180.0	159.4	398.2	327.6
Provision (credit) for income taxes	76.3	56.1	(130.0)	110.5
Income of Consolidated Group	103.7	103.3	528.2	217.1
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Equity in Income of Unconsolidated Subsidiaries and Affiliates	0.4	0.2	1.2	0.8
Net Income	104.1	103.5	529.4	217.9
Net Income Attributable to Deere & Company	104.1	103.5	529.4	217.9
Financial Services | Financial Services
Equity in Income of Unconsolidated Subsidiaries and Affiliates
Equity in Income of Unconsolidated Subsidiaries and Affiliates	$ 0.4	$ 0.2	$ 1.2	$ 0.8

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SUPPLEMENTAL CONSOLIDATING DATA - Condensed Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions	Apr. 29, 2018	Oct. 29, 2017	Apr. 30, 2017	Oct. 30, 2016
ASSETS
Cash and cash equivalents	$ 4,201.4	$ 9,334.9	$ 4,525.8	$ 4,335.8
Marketable securities	479.3	451.6	546.3
Receivables from unconsolidated subsidiaries and affiliates	34.3	35.9	34.9
Trade accounts and notes receivable - net	6,511.1	3,924.9	4,482.3
Financing receivables - net	24,275.5	25,104.1	23,301.1
Financing receivables securitized - net	4,436.3	4,158.8	4,281.8
Other receivables	1,398.2	1,200.0	931.3
Equipment on operating leases - net	6,723.1	6,593.7	5,923.9
Inventories	6,888.9	3,904.1	4,114.8
Property and equipment - net	5,742.9	5,067.7	4,959.9
Investments in unconsolidated subsidiaries and affiliates	202.1	182.5	215.7
Goodwill	3,188.7	1,033.3	806.2	816.0
Other intangible assets - net	1,692.2	218.0	90.8
Retirement benefits	617.9	538.2	176.2
Deferred income taxes	1,718.5	2,415.0	3,041.9
Other assets	1,762.6	1,623.6	1,535.9
Total Assets	69,873.0	65,786.3	58,968.8
LIABILITIES
Short-term borrowings	10,894.6	10,035.3	7,963.6
Short-term securitization borrowings	4,401.1	4,118.7	4,224.6
Payables to unconsolidated subsidiaries and affiliates	145.7	121.9	101.6
Accounts payable and accrued expenses	9,789.6	8,417.0	7,215.9
Deferred income taxes	562.7	209.7	169.0
Long-term borrowings	26,278.6	25,891.3	23,253.1
Retirement benefits and other liabilities	7,366.1	7,417.9	8,333.2
Total liabilities	59,438.4	56,211.8	51,261.0
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	14.6	14.0	14.0
STOCKHOLDERS' EQUITY
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204)	$ 4,423.4	4,280.5	4,165.4
Common stock, par value (in dollars per share)	$ 1
Common stock, issued shares	536,431,204
Common stock in treasury	$ (15,425.9)	(15,460.8)	(15,521.0)
Retained earnings	25,586.0	25,301.3	24,535.8
Accumulated other comprehensive income (loss)	(4,173.2)	(4,563.7)	(5,495.5)
Total Deere & Company stockholders' equity	10,410.3	9,557.3	7,684.7
Noncontrolling interests	9.7	3.2	9.1
Total stockholders' equity	10,420.0	9,560.5	7,693.8	6,530.8
Total Liabilities and Stockholders' Equity	69,873.0	65,786.3	58,968.8
Equipment Operations
ASSETS
Cash and cash equivalents	2,988.9	8,168.4	3,343.8	3,140.5
Marketable securities	16.9	20.2	118.1
Receivables from unconsolidated subsidiaries and affiliates	1,668.0	1,032.1	3,453.0
Trade accounts and notes receivable - net	1,515.9	876.3	742.9
Financing receivables - net	75.7
Financing receivables securitized - net	113.1
Other receivables	1,273.3	1,045.6	801.6
Inventories	6,888.9	3,904.1	4,114.8
Property and equipment - net	5,696.0	5,017.3	4,909.7
Investments in unconsolidated subsidiaries and affiliates	4,915.9	4,812.3	4,612.2
Goodwill	3,188.7	1,033.3	806.2
Other intangible assets - net	1,692.2	218.0	90.8
Retirement benefits	617.9	538.1	176.2
Deferred income taxes	2,065.5	3,098.8	3,651.1
Other assets	1,186.3	973.9	901.1
Total Assets	33,903.2	30,738.4	27,721.5
LIABILITIES
Short-term borrowings	659.1	375.5	276.6
Short-term securitization borrowings	113.2
Payables to unconsolidated subsidiaries and affiliates	145.7	121.9	101.6
Accounts payable and accrued expenses	9,265.7	7,718.1	6,765.0
Deferred income taxes	462.9	115.6	89.7
Long-term borrowings	5,536.5	5,490.9	4,520.4
Retirement benefits and other liabilities	7,285.5	7,341.9	8,260.4
Total liabilities	23,468.6	21,163.9	20,013.7
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	14.6	14.0	14.0
STOCKHOLDERS' EQUITY
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204)	$ 4,423.4	$ 4,280.5	$ 4,165.4
Common stock, par value (in dollars per share)	$ 1	$ 1	$ 1
Common stock, issued shares	536,431,204
Common stock in treasury	$ (15,425.9)	$ (15,460.8)	$ (15,521.0)
Retained earnings	25,586.0	25,301.3	24,535.8
Accumulated other comprehensive income (loss)	(4,173.2)	(4,563.7)	(5,495.5)
Total Deere & Company stockholders' equity	10,410.3	9,557.3	7,684.7
Noncontrolling interests	9.7	3.2	9.1
Total stockholders' equity	10,420.0	9,560.5	7,693.8
Total Liabilities and Stockholders' Equity	33,903.2	30,738.4	27,721.5
Financial Services
ASSETS
Cash and cash equivalents	1,212.5	1,166.5	1,182.0	$ 1,195.3
Marketable securities	462.4	431.4	428.2
Trade accounts and notes receivable - net	6,436.0	4,134.1	4,867.3
Financing receivables - net	24,199.8	25,104.1	23,301.1
Financing receivables securitized - net	4,323.2	4,158.8	4,281.8
Other receivables	190.1	195.5	136.0
Equipment on operating leases - net	6,723.1	6,593.7	5,923.9
Property and equipment - net	46.9	50.4	50.2
Investments in unconsolidated subsidiaries and affiliates	15.3	13.8	12.5
Retirement benefits	15.0	16.9	18.9
Deferred income taxes	76.4	79.8	76.3
Other assets	577.3	651.4	636.8
Total Assets	44,278.0	42,596.4	40,915.0
LIABILITIES
Short-term borrowings	10,235.5	9,659.8	7,687.0
Short-term securitization borrowings	4,287.9	4,118.7	4,224.6
Payables to unconsolidated subsidiaries and affiliates	1,633.7	996.2	3,418.1
Accounts payable and accrued expenses	2,030.8	1,827.1	1,587.1
Deferred income taxes	523.2	857.7	764.8
Long-term borrowings	20,742.1	20,400.4	18,732.7
Retirement benefits and other liabilities	95.6	92.9	91.7
Total liabilities	39,548.8	37,952.8	36,506.0
Commitments and contingencies (Note 14)
STOCKHOLDERS' EQUITY
Common stock, $1 par value (issued shares at April 29, 2018 - 536,431,204)	$ 2,099.1	$ 2,099.1	$ 2,079.1
Common stock, par value (in dollars per share)	$ 1	$ 1	$ 1
Common stock, issued shares	536,431,204
Retained earnings	$ 2,872.4	$ 2,782.0	$ 2,608.1
Accumulated other comprehensive income (loss)	(242.3)	(237.5)	(278.2)
Total Deere & Company stockholders' equity	4,729.2	4,643.6	4,409.0
Total stockholders' equity	4,729.2	4,643.6	4,409.0
Total Liabilities and Stockholders' Equity	$ 44,278.0	$ 42,596.4	$ 40,915.0

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SUPPLEMENTAL CONSOLIDATING DATA - Statement of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 29, 2018	Apr. 30, 2017	Apr. 29, 2018	Apr. 30, 2017
Cash Flows from Operating Activities
Net income	$ 1,209.7	$ 808.3	$ 674.9	$ 1,006.7
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses			26.8	32.6
Provision for depreciation and amortization			950.8	843.1
Gain on sale of affiliates and investments			(13.2)	(281.4)
Undistributed earnings of unconsolidated subsidiaries and affiliates			(4.5)	(3.1)
Provision (credit) for deferred income taxes			604.3	(100.4)
Changes in assets and liabilities:
Trade receivables			(2,094.1)	(989.5)
Inventories			(1,796.8)	(1,090.4)
Accounts payable and accrued expenses			306.9	103.6
Accrued income taxes payable/receivable			153.0	195.1
Retirement benefits			67.6	115.6
Other			(137.2)	(27.9)
Net cash provided by (used for) operating activities			(1,221.7)	(163.7)
Cash Flows from Investing Activities
Proceeds from maturities and sales of marketable securities			23.8	41.3
Proceeds from sales of equipment on operating leases			748.6	786.4
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold			55.0
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold				113.9
Acquisitions of businesses, net of cash acquired			(5,171.1)
Purchases of marketable securities			(62.8)	(43.7)
Purchases of property and equipment			(352.2)	(253.0)
Cost of equipment on operating leases acquired			(926.5)	(925.1)
Other			(67.5)	(18.7)
Net cash provided by (used for) investing activities			(5,153.0)	300.5
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings			199.1	183.1
Proceeds from long-term borrowings			4,077.7	2,661.6
Payments of long-term borrowings			(2,888.7)	(2,742.2)
Proceeds from issuance of common stock			198.6	383.6
Repurchases of common stock			(60.6)	(6.2)
Dividends paid			(386.9)	(379.5)
Other			(43.9)	(39.7)
Net cash provided by (used for) financing activities			1,095.3	60.7
Effect of Exchange Rate Changes on Cash and Cash Equivalents			145.9	(7.5)
Net Increase (Decrease) in Cash and Cash Equivalents			(5,133.5)	190.0
Cash and Cash Equivalents at Beginning of Period			9,334.9	4,335.8
Cash and Cash Equivalents at End of Period	4,201.4	4,525.8	4,201.4	4,525.8
Equipment Operations
Cash Flows from Operating Activities
Net income	1,209.7	808.3	674.9	1,006.7
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses			9.2	(0.2)
Provision for depreciation and amortization			483.8	427.0
Gain on sale of affiliates and investments			(13.2)	(281.4)
Undistributed earnings of unconsolidated subsidiaries and affiliates			(93.8)	59.8
Provision (credit) for deferred income taxes			934.5	(118.8)
Changes in assets and liabilities:
Trade receivables			(188.5)	(87.7)
Inventories			(1,439.5)	(771.8)
Accounts payable and accrued expenses			578.0	200.0
Accrued income taxes payable/receivable			147.4	191.5
Retirement benefits			62.7	111.0
Other			(106.1)	(49.2)
Net cash provided by (used for) operating activities			1,049.4	686.9
Cash Flows from Investing Activities
Proceeds from maturities and sales of marketable securities			3.6	7.9
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold			55.0
Proceeds from sales of businesses and unconsolidated affiliates, net of cash sold				113.9
Acquisitions of businesses, net of cash acquired			(5,171.1)
Purchases of property and equipment			(351.6)	(252.2)
Other			44.2	(18.1)
Net cash provided by (used for) investing activities			(5,419.9)	(148.5)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings			(67.1)	(7.4)
Change in intercompany receivables/payables			(641.6)	(287.5)
Proceeds from long-term borrowings			107.1	19.1
Payments of long-term borrowings			(85.3)	(24.7)
Proceeds from issuance of common stock			198.6	383.6
Repurchases of common stock			(60.6)	(6.2)
Dividends paid			(386.9)	(379.5)
Other			(25.5)	(25.8)
Net cash provided by (used for) financing activities			(961.3)	(328.4)
Effect of Exchange Rate Changes on Cash and Cash Equivalents			152.3	(6.7)
Net Increase (Decrease) in Cash and Cash Equivalents			(5,179.5)	203.3
Cash and Cash Equivalents at Beginning of Period			8,168.4	3,140.5
Cash and Cash Equivalents at End of Period	2,988.9	3,343.8	2,988.9	3,343.8
Financial Services
Cash Flows from Operating Activities
Net income	104.1	103.5	529.4	217.9
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision (credit) for credit losses			17.6	32.8
Provision for depreciation and amortization			529.3	476.9
Undistributed earnings of unconsolidated subsidiaries and affiliates			(1.0)	(0.6)
Provision (credit) for deferred income taxes			(330.2)	18.4
Changes in assets and liabilities:
Accounts payable and accrued expenses			84.2	18.0
Accrued income taxes payable/receivable			5.6	3.6
Retirement benefits			4.9	4.6
Other			72.0	104.8
Net cash provided by (used for) operating activities			911.8	876.4
Cash Flows from Investing Activities
Collections of receivables (excluding trade and wholesale)			9,486.7	8,833.8
Proceeds from maturities and sales of marketable securities			20.2	33.4
Proceeds from sales of equipment on operating leases			748.6	786.4
Cost of receivables acquired (excluding trade and wholesale)			(8,918.8)	(8,238.0)
Purchases of marketable securities			(62.8)	(43.7)
Purchases of property and equipment			(0.6)	(0.8)
Cost of equipment on operating leases acquired			(1,409.3)	(1,355.6)
Decrease (increase) in trade and wholesale receivables			(2,293.8)	(1,012.7)
Other			(47.0)	(0.6)
Net cash provided by (used for) investing activities			(2,476.8)	(997.8)
Cash Flows from Financing Activities
Increase (decrease) in total short-term borrowings			266.2	190.5
Change in intercompany receivables/payables			641.6	287.5
Proceeds from long-term borrowings			3,970.6	2,642.5
Payments of long-term borrowings			(2,803.4)	(2,717.5)
Dividends paid			(439.1)	(280.2)
Other			(18.5)	(13.9)
Net cash provided by (used for) financing activities			1,617.4	108.9
Effect of Exchange Rate Changes on Cash and Cash Equivalents			(6.4)	(0.8)
Net Increase (Decrease) in Cash and Cash Equivalents			46.0	(13.3)
Cash and Cash Equivalents at Beginning of Period			1,166.5	1,195.3
Cash and Cash Equivalents at End of Period	$ 1,212.5	$ 1,182.0	$ 1,212.5	$ 1,182.0