Edgar Filing: DEERE & CO

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


	FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2012

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

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

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

Large Accelerated Filer	X	Accelerated Filer
Non-Accelerated Filer		Smaller Reporting Company
(Do not check if a smaller reporting company)

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

Yes

At April 30, 2012, 397,735,846 shares of common stock, $1 par value, of the registrant were outstanding.

Index to Exhibits: Page 48

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Three Months Ended April 30, 2012 and 2011 (In millions of dollars and shares except per share amounts) Unaudited
	2012		2011
Net Sales and Revenues
Net sales	$	9,404.6	$	8,327.6
Finance and interest income	483.9		468.5
Other income	120.1		113.6
Total	10,008.6		8,909.7

Costs and Expenses
Cost of sales	6,834.5		6,106.9
Research and development expenses	352.0		298.5
Selling, administrative and general expenses	881.4		828.2
Interest expense	195.7		192.3
Other operating expenses	148.0		143.1
Total	8,411.6		7,569.0

Income of Consolidated Group before Income Taxes	1,597.0		1,340.7
Provision for income taxes	541.3		438.9
Income of Consolidated Group	1,055.7		901.8
Equity in income of unconsolidated affiliates	2.4		4.9
Net Income	1,058.1		906.7
Less: Net income attributable to noncontrolling interests	1.9		2.4
Net Income Attributable to Deere & Company	$	1,056.2	$	904.3

Per Share Data
Basic	$	2.64	$	2.15
Diluted	$	2.61	$	2.12

Average Shares Outstanding
Basic	400.2		420.7
Diluted	404.7		426.4

See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Six Months Ended April 30, 2012 and 2011 (In millions of dollars and shares except per share amounts) Unaudited
	2012		2011
Net Sales and Revenues
Net sales	$	15,523.6	$	13,841.4
Finance and interest income	959.0		928.6
Other income	292.5		258.9
Total	16,775.1		15,028.9

Costs and Expenses
Cost of sales	11,410.4		10,201.0
Research and development expenses	664.5		567.4
Selling, administrative and general expenses	1,590.5		1,493.1
Interest expense	387.8		394.8
Other operating expenses	324.6		285.9
Total	14,377.8		12,942.2

Income of Consolidated Group before Income Taxes	2,397.3		2,086.7
Provision for income taxes	807.4		671.0
Income of Consolidated Group	1,589.9		1,415.7
Equity in income of unconsolidated affiliates	2.6		5.4
Net Income	1,592.5		1,421.1
Less: Net income attributable to noncontrolling interests	3.4		3.0
Net Income Attributable to Deere & Company	$	1,589.1	$	1,418.1

Per Share Data
Basic	$	3.95	$	3.36
Diluted	$	3.91	$	3.32

Average Shares Outstanding
Basic	402.1		421.3
Diluted	406.6		427.0

See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (In millions of dollars) Unaudited
	April 30			October 31			April 30
	2012			2011			2011
Assets
Cash and cash equivalents	$	3,019.8		$	3,647.2		$	3,949.8
Marketable securities	1,338.9			787.3			239.5
Receivables from unconsolidated affiliates	66.9			48.0			45.1
Trade accounts and notes receivable - net	5,039.2			3,294.5			4,157.4
Financing receivables - net	19,452.7			19,923.5			18,455.4
Financing receivables securitized - net	3,116.0			2,905.0			2,871.2
Other receivables	1,089.2			1,330.6			828.6
Equipment on operating leases - net	2,168.0			2,150.0			1,945.2
Inventories	6,112.4			4,370.6			4,687.0
Property and equipment - net	4,387.6			4,352.3			3,968.5
Investments in unconsolidated affiliates	233.7			201.7			220.9
Goodwill	965.3			999.8			1,038.7
Other intangible assets - net	114.2			127.4			130.7
Retirement benefits	30.3			30.4			200.8
Deferred income taxes	2,944.6			2,858.6			2,825.8
Other assets	1,326.5			1,180.5			1,020.9
Total Assets	$	51,405.3		$	48,207.4		$	46,585.5

Liabilities and Stockholders’ Equity
Short-term borrowings	$	7,910.0		$	6,852.3		$	7,071.9
Short-term securitization borrowings	3,033.3			2,777.4			2,821.5
Payables to unconsolidated affiliates	189.6			117.7			193.5
Accounts payable and accrued expenses	7,631.4			7,804.8			6,777.2
Deferred income taxes	164.8			168.3			162.6
Long-term borrowings	18,719.4			16,959.9			16,192.2
Retirement benefits and other liabilities	6,360.8			6,712.1			5,933.0
Total liabilities	44,009.3			41,392.5			39,151.9

Commitments and contingencies (Note 14)

Common stock, $1 par value (issued shares at April 30, 2012 – 536,431,204)	3,298.9			3,251.7			3,211.7
Common stock in treasury	(8,005.1		)	(7,292.8		)	(6,237.5		)
Retained earnings	15,759.4			14,519.4			13,476.3
Accumulated other comprehensive income (loss)	(3,674.3		)	(3,678.0		)	(3,027.2		)
Total Deere & Company stockholders’ equity	7,378.9			6,800.3			7,423.3
Noncontrolling interests	17.1			14.6			10.3
Total stockholders’ equity	7,396.0			6,814.9			7,433.6
Total Liabilities and Stockholders’ Equity	$	51,405.3		$	48,207.4		$	46,585.5

See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY STATEMENT OF CONSOLIDATED CASH FLOWS For the Six Months Ended April 30, 2012 and 2011 (In millions of dollars) Unaudited
	2012			2011
Cash Flows from Operating Activities
Net income	$	1,592.5		$	1,421.1
Adjustments to reconcile net income to net cash used for operating activities:
Provision for doubtful receivables	11.6			13.7
Provision for depreciation and amortization	498.7			448.7
Share-based compensation expense	37.7			33.1
Undistributed earnings of unconsolidated affiliates	(4.8		)	4.1
Credit for deferred income taxes	(124.1		)	(310.3		)
Changes in assets and liabilities:
Trade, notes and financing receivables related to sales	(1,554.1		)	(1,228.4		)
Inventories	(2,019.9		)	(1,623.6		)
Accounts payable and accrued expenses	(109.0		)	284.3
Accrued income taxes payable/receivable	250.7			239.5
Retirement benefits	(35.3		)	220.2
Other	(71.3		)	(167.7		)
Net cash used for operating activities	(1,527.3		)	(665.3		)

Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)	7,094.4			6,664.8
Proceeds from maturities and sales of marketable securities	15.8			18.8
Proceeds from sales of equipment on operating leases	418.8			383.4
Proceeds from sales of businesses, net of cash sold	20.2			893.5
Cost of receivables acquired (excluding receivables related to sales)	(7,373.3		)	(7,041.7		)
Purchases of marketable securities	(570.3		)	(34.0		)
Purchases of property and equipment	(513.1		)	(441.0		)
Cost of equipment on operating leases acquired	(319.0		)	(265.7		)
Acquisitions of businesses, net of cash acquired				(46.6		)
Other	(102.1		)	(121.0		)
Net cash provided by (used for) investing activities	(1,328.6		)	10.5

Cash Flows from Financing Activities
Increase in total short-term borrowings	1,297.6			803.2
Proceeds from long-term borrowings	4,056.8			1,440.6
Payments of long-term borrowings	(2,035.6		)	(782.1		)
Proceeds from issuance of common stock	28.9			160.7
Repurchases of common stock	(746.3		)	(601.2		)
Dividends paid	(333.0		)	(275.0		)
Excess tax benefits from share-based compensation	14.4			64.7
Other	(28.3		)	(24.9		)
Net cash provided by financing activities	2,254.5			786.0

Effect of Exchange Rate Changes on Cash and Cash Equivalents	(26.0		)	28.0

Net Increase (Decrease) in Cash and Cash Equivalents	(627.4		)	159.2
Cash and Cash Equivalents at Beginning of Period	3,647.2			3,790.6
Cash and Cash Equivalents at End of Period	$	3,019.8		$	3,949.8

See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY For the Six Months Ended April 30, 2011 and 2012 (In millions of dollars) Unaudited
				Deere & Company Stockholders
	Total Stockholders’ Equity			Comprehensive Income (Loss)			Common Stock		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests

Balance October 31, 2010	$	6,303.4					$	3,106.3	$	(5,789.5	)	$	12,353.1		$	(3,379.6	)	$	13.1
Net income	1,421.1			$	1,418.1							1,418.1						3.0
Other comprehensive income (loss)
Retirement benefits adjustment	102.3			102.3											102.3
Cumulative translation adjustment	244.1			243.9											243.9			.2
Unrealized gain on derivatives	9.6			9.6											9.6
Unrealized loss on investments	(3.4		)	(3.4		)									(3.4		)
Comprehensive income	1,773.7			$	1,770.5													3.2
Repurchases of common stock	(601.2		)						(601.2		)
Treasury shares reissued	153.2								153.2
Dividends declared	(298.8		)									(294.9		)				(3.9		)
Stock options and other	103.3						105.4											(2.1		)
Balance April 30, 2011	$	7,433.6					$	3,211.7	$	(6,237.5	)	$	13,476.3		$	(3,027.2	)	$	10.3



Balance October 31, 2011	$	6,814.9					$	3,251.7	$	(7,292.8	)	$	14,519.4		$	(3,678.0	)	$	14.6
Net income	1,592.5			$	1,589.1							1,589.1						3.4
Other comprehensive income (loss)
Retirement benefits adjustment	181.7			181.7											181.7
Cumulative translation adjustment	(179.8		)	(179.6		)									(179.6		)	(.2		)
Unrealized loss on derivatives	(1.8		)	(1.8		)									(1.8		)
Unrealized gain on investments	3.4			3.4											3.4
Comprehensive income	1,596.0			$	1,592.8													3.2
Repurchases of common stock	(746.3		)						(746.3		)
Treasury shares reissued	34.0								34.0
Dividends declared	(349.9		)									(349.2		)				(.7		)
Stock options and other	47.3						47.2					.1
Balance April 30, 2012	$	7,396.0					$	3,298.9	$	(8,005.1	)	$	15,759.4		$	(3,674.3	)	$	17.1

See Condensed Notes to Interim Consolidated Financial Statements.

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.

	Financial Services - Includes the Company’s financial services operations.

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

	Variable Interest Entities

	The Company is the primary beneficiary of and consolidates a supplier that is a variable interest entity (VIE). The Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. No additional support beyond what was previously contractually required has been provided during any periods presented. The VIE produces blended fertilizer and other lawn care products for the agriculture and turf segment.

	The assets and liabilities of this supplier VIE consisted of the following in millions of dollars:

	April 30 2012		October 31 2011		April 30 2011
Cash and cash equivalents	$	17	$	11
Intercompany receivables	18		14		$	19
Inventories	42		30		52
Property and equipment - net	3		3		4
Other assets	9		3		9
Total assets	$	89	$	61	$	84

Short-term borrowings	$	3			$	3
Accounts payable and accrued expenses	78		$	56	80
Total liabilities	$	81	$	56	$	83

	The VIE is financed through its own accounts payable and short-term borrowings. The assets of the VIE can only be used to settle the obligations of the VIE. The creditors of the VIE do not have recourse to the general credit of the Company.

	See Note 11 for VIEs related to securitization of financing receivables.

(2)	The consolidated financial statements of Deere & Company and consolidated subsidiaries 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 financial statements be read in conjunction with the 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 $214 million and $165 million in the first six months of 2012 and 2011, respectively. The Company also had accounts payable related to purchases of property and equipment of approximately $45 million and $39 million at April 30, 2012 and 2011, respectively.

(3)	New accounting standards adopted in the first six months of 2012 were as follows:

	In the first quarter of 2012, the Company adopted the remaining provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which amends Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures. This ASU requires disclosures of transfers into and out of Levels 1 and 2, more detailed roll forward reconciliations of Level 3 recurring fair value measurements on a gross basis, fair value information by class of assets and liabilities, and descriptions of valuation techniques and inputs for Level 2 and Level 3 measurements. The effective date was the second quarter of fiscal year 2010 except for the roll forward reconciliations, which were required in the first quarter of fiscal year 2012. The adoption in 2010 and the adoption in the first quarter of 2012 did not have a material effect on the Company’s consolidated financial statements.

	In the second quarter of 2012, the Company adopted FASB ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which amends ASC 820, Fair Value Measurement. This ASU requires the categorization by level for items that are required to be disclosed at fair value, information about transfers between Level 1 and Level 2 and additional disclosure for Level 3 measurements. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The adoption did not have a material effect on the Company’s consolidated financial statements.

	New accounting standards to be adopted are as follows:

	In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends ASC 220, Comprehensive Income. This ASU requires the presentation of total comprehensive income, total net income and the components of net income and comprehensive income either in a single continuous statement or in two separate but consecutive statements. The requirements do not change how earnings per share is calculated or presented. The effective date will be the first quarter of fiscal year 2013 and must be applied retrospectively. The adoption will not have a material effect on the Company’s consolidated financial statements.

	In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, which amends ASC 350, Intangibles – Goodwill and Other. This ASU gives an entity the option to first assess qualitative factors to determine if goodwill is impaired. The entity may first determine based on qualitative factors if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If that assessment indicates no impairment, the first and second steps of the previous quantitative goodwill impairment test are not required. The effective date will be the first quarter of fiscal year 2013 with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements.

	In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which amends ASC 210, Balance Sheet. This ASU requires entities to disclose gross and net information about both instruments and transactions eligible for offset in the statement of financial position and those subject to an agreement similar to a master netting arrangement. This would include derivatives and other financial securities arrangements. The effective date will be the first quarter of fiscal year 2014 and must be applied retrospectively. The adoption will not have a material effect on the Company’s consolidated financial statements.

(4)	Comprehensive income, which includes all changes in the total stockholders’ equity during the period except transactions with stockholders, was as follows in millions of dollars:

	Three Months Ended April 30					Six Months Ended April 30
	2012			2011		2012			2011

Net income	$	1,058.1		$	906.7	$	1,592.5		$	1,421.1
Other comprehensive income (loss) net of tax:
Retirement benefits adjustment	111.3			36.1		181.7			102.3
Cumulative translation adjustment	(43.7		)	223.7		(179.8		)	244.1
Unrealized gain (loss) on derivatives	1.8			4.5		(1.8		)	9.6
Unrealized gain (loss) on investments	.2			.7		3.4			(3.4		)
Comprehensive income	$	1,127.7		$	1,171.7	$	1,596.0		$	1,773.7

	For the second quarter of 2012 and 2011, the table above includes noncontrolling interests’ comprehensive income of $1.9 million and $2.6 million, which consists of net income of $1.9 million and $2.4 million and cumulative translation adjustments of none and $.2 million, respectively. For the first six months of 2012 and 2011, the table includes noncontrolling interests’ comprehensive income of $3.2 million and $3.2 million, which consists of net income of $3.4 million and $3.0 million and cumulative translation adjustments of $(.2) million and $.2 million, respectively.

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

	Three Months Ended				Six Months Ended
	April 30				April 30
	2012		2011		2012		2011

Dividends declared	$	.46	$	.35	$	.87	$	.70
Dividends paid	$	.41	$	.35	$	.82	$	.65

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

	Three Months Ended April 30				Six Months Ended April 30
	2012		2011		2012		2011
Net income attributable to Deere & Company	$	1,056.2	$	904.3	$	1,589.1	$	1,418.1
Less income allocable to participating securities	.3		.3		.5		.6
Income allocable to common stock	$	1,055.9	$	904.0	$	1,588.6	$	1,417.5
Average shares outstanding	400.2		420.7		402.1		421.3
Basic per share	$	2.64	$	2.15	$	3.95	$	3.36

Average shares outstanding	400.2		420.7		402.1		421.3
Effect of dilutive share-based compensation	4.5		5.7		4.5		5.7
Total potential shares outstanding	404.7		426.4		406.6		427.0
Diluted per share	$	2.61	$	2.12	$	3.91	$	3.32

	During the second quarter and first six months of 2012, 4.3 million shares in both periods were excluded from the above diluted per share computation because the incremental shares under the treasury stock method would have been antidilutive. All shares related to share-based compensation were included in the diluted per share computation during the second quarter and first six months of 2011.

(7)	The Company has several defined benefit pension plans covering its U.S. employees and employees in certain foreign countries. The Company also has several defined benefit postretirement health care and life insurance plans for retired employees in the U.S. and Canada.

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

	Three Months Ended April 30						Six Months Ended April 30
	2012			2011			2012			2011
Service cost	$	56		$	50		$	109		$	99
Interest cost	117			124			233			248
Expected return on plan assets	(197		)	(199		)	(393		)	(398		)
Amortization of actuarial loss	48			35			100			73
Amortization of prior service cost	11			11			21			21
Settlements/curtailments	1						2
Net cost	$	36		$	21		$	72		$	43

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 April 30						Six Months Ended April 30
	2012			2011			2012			2011
Service cost	$	11		$	11		$	23		$	22
Interest cost	69			82			140			163
Expected return on plan assets	(25		)	(29		)	(50		)	(57		)
Amortization of actuarial loss				68			60			135
Amortization of prior service credit	(5		)	(3		)	(8		)	(7		)
Net cost	$	50		$	129		$	165		$	256

	For fiscal year 2012, the participants in one of the Company’s postretirement health care plans became “almost all” inactive as described by the applicable accounting standards due to additional retirements. As a result, the net actuarial loss for this plan in the table above is now being amortized over the longer period for the average remaining life expectancy of the inactive participants rather than the average remaining service period of the active participants. The amortization of actuarial loss also decreased due to lower expected costs from the prescription drug plan to provide group benefits under Medicare Part D as an alternative to collecting the retiree drug subsidy.

	During the first six months of 2012, the Company contributed approximately $238 million to its pension plans and $21 million to its other postretirement benefit plans. The Company presently anticipates contributing an additional $197 million to its pension plans and $7 million to its other postretirement benefit plans in the remainder of fiscal year 2012. These contributions include payments from Company funds to either increase plan assets or make direct payments to plan participants.

(8)	The Company’s unrecognized tax benefits at April 30, 2012 were $182 million, compared to $199 million at October 31, 2011. The liability at April 30, 2012 consisted of approximately $45 million, which would affect the effective tax rate if it was recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The changes in the unrecognized tax benefits in the first six months of 2012 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant.

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

	Three Months Ended April 30							Six Months Ended April 30
	2012			2011			% Change	2012			2011			% Change
Net sales and revenues:
Agriculture and turf	$	7,735		$	6,999		+11	$	12,459		$	11,369		+10
Construction and forestry	1,670			1,329			+26	3,065			2,472			+24
Total net sales	9,405			8,328			+13	15,524			13,841			+12
Financial services	488			491			-1	1,036			998			+4
Other revenues	116			91			+27	215			190			+13
Total net sales and revenues	$	10,009		$	8,910		+12	$	16,775		$	15,029		+12
Operating profit: *
Agriculture and turf	$	1,403		$	1,163		+21	$	1,977		$	1,720		+15
Construction and forestry	119			105			+13	243			194			+25
Financial services	175			163			+7	350			335			+4
Total operating profit	1,697			1,431			+19	2,570			2,249			+14
Other reconciling items **	(641		)	(527		)	+22	(981		)	(831		)	+18
Net income attributable to Deere & Company	$	1,056		$	904		+17	$	1,589		$	1,418		+12

Identifiable assets:
Agriculture and turf								$	10,945		$	9,331		+17
Construction and forestry								3,228			2,654			+22
Financial services								32,231			28,631			+13
Corporate								5,001			5,970			-16
Total assets								$	51,405		$	46,586		+10

Intersegment sales and revenues:
Agriculture and turf net sales	$	23		$	26		-12	$	46		$	45		+2
Construction and forestry net sales				9				1			11			-91
Financial services	66			58			+14	119			107			+11

Equipment operations outside the U.S. and Canada:
Net sales	$	3,606		$	3,403		+6	$	6,134		$	5,496		+12
Operating profit	233			334			-30	402			548			-27

*	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.

**	Other reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, income taxes and net income attributable to noncontrolling interests.

(10) Past due balances of financing receivables 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, 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 resumed when the receivable becomes contractually current and collections are reasonably assured.

An age analysis of past due and non-performing financing receivables in millions of dollars follows:

	April 30, 2012
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due
Retail Notes:
Agriculture and turf	$	63	$	34	$	22	$	119
Construction and forestry	35		19		9		63
Other:
Agriculture and turf	20		14		9		43
Construction and forestry	9		4		1		14
Total	$	127	$	71	$	41	$	239

	Total Past Due		Total Non- performing		Current		Total Financing Receivables
Retail Notes:
Agriculture and turf	$	119	$	113	$	14,837	$	15,069
Construction and forestry		63		14		1,360		1,437
Other:
Agriculture and turf		43		11		5,184		5,238
Construction and forestry		14		3		1,000		1,017
Total	$	239	$	141	$	22,381		22,761
Less allowance for doubtful receivables								192
Total financing receivables - net							$	22,569

* Financing receivables that are 90 days or greater past due and still accruing finance income.

	October 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due

Retail Notes:
Agriculture and turf	$	81	$	30	$	25	$	136
Construction and forestry	45		20		11		76
Other:
Agriculture and turf	23		10		5		38
Construction and forestry	7		4		2		13
Total	$	156	$	64	$	43	$	263

	Total Past Due		Total Non- performing		Current		Total Financing Receivables

Retail Notes:
Agriculture and turf	$	136	$	132	$	14,667	$	14,935
Construction and forestry	76		17		1,264		1,357
Recreational products					4		4
Other:
Agriculture and turf	38		16		5,655		5,709
Construction and forestry	13		5		1,003		1,021
Total	$	263	$	170	$	22,593	23,026
Less allowance for doubtful receivables							197
Total financing receivables - net							$	22,829

* Financing receivables that are 90 days or greater past due and still accruing finance income.

	April 30, 2011
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due *		Total Past Due

Retail Notes:
Agriculture and turf	$	79	$	37	$	29	$	145
Construction and forestry	56		26		16		98
Other:
Agriculture and turf	23		12		24		59
Construction and forestry	14		5		7		26
Total	$	172	$	80	$	76	$	328

	Total Past Due		Total Non- performing		Current		Total Financing Receivables

Retail Notes:
Agriculture and turf	$	145	$	152	$	13,416	$	13,713
Construction and forestry	98		29		1,182		1,309
Recreational products					7		7
Other:
Agriculture and turf	59		16		5,472		5,547
Construction and forestry	26		13		933		972
Total	$	328	$	210	$	21,010	21,548
Less allowance for doubtful receivables							221
Total financing receivables - net							$	21,327

* Financing receivables that are 90 days or greater past due and still accruing finance income.

An analysis of the allowance for doubtful financing receivables and investment in financing receivables in millions of dollars follows:

	Three Months Ended
	April 30, 2012
	Retail Notes			Revolving Charge Accounts			Other			Total
Allowance:
Beginning of period balance	$	129		$	40		$	26		$	195
Provision	2			2			1			5
Write-offs	(2		)	(7		)	(2		)	(11		)
Recoveries	2			6						8
Translation adjustments	(5		)							(5		)
End of period balance	$	126		$	41