FINANCING RECEIVABLES

9 Months Ended

Jul. 27, 2025

(8) Financing Receivables

We monitor the credit quality of financing receivables based on delinquency status, defined as follows:

●

Past due balances represent any payments 30 days or more past the due date.

●

Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are 90 days delinquent.

●

Write-offs generally occur when receivables are 120 days delinquent. In these situations, the estimated uncollectible amount is written off to the allowance for credit losses.

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


	July 27, 2025
	2025		2024		2023		2022		2021		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	8,633	$	9,774	$	6,044	$	3,554	$	1,669	$	483	$	4,632	$	34,789
30-59 days past due		47		92		65		34		18		6		44		306
60-89 days past due		19		52		31		22		9		3		12		148
90+ days past due				5		1		1		2						9
Non-performing		13		116		120		70		41		23		14		397
Construction and forestry
Current		2,288		2,304		1,236		592		195		26		114		6,755
30-59 days past due		36		72		43		19		7		2		4		183
60-89 days past due		18		28		18		6		3		2		2		77
90+ days past due				6				2				1				9
Non-performing		20		96		88		48		23		9		2		286
Total retail customer receivables	$	11,074	$	12,545	$	7,646	$	4,348	$	1,967	$	555	$	4,824	$	42,959

Write-offs for the nine months ended July 27, 2025:
Agriculture and turf	$	3	$	25	$	28	$	16	$	5	$	5	$	97	$	179
Construction and forestry		3		30		25		9		2		2		5		76
Total	$	6	$	55	$	53	$	25	$	7	$	7	$	102	$	255


	October 27, 2024
	2024		2023		2022		2021		2020		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	14,394	$	8,305	$	5,191	$	2,833	$	992	$	253	$	4,465	$	36,433
30-59 days past due		44		101		55		27		11		4		40		282
60-89 days past due		22		50		21		10		8		2		13		126
90+ days past due		1		1		1		2								5
Non-performing		23		91		76		50		20		13		15		288
Construction and forestry
Current		3,100		1,841		1,064		458		102		45		114		6,724
30-59 days past due		54		47		25		10		3		2		4		145
60-89 days past due		25		28		10		7		2				2		74
90+ days past due		1		4		3		1								9
Non-performing		40		94		67		32		9		5		1		248
Total retail customer receivables	$	17,704	$	10,562	$	6,513	$	3,430	$	1,147	$	324	$	4,654	$	44,334

Write-offs for the twelve months ended October 27, 2024:
Agriculture and turf	$	5	$	33	$	25	$	11	$	11	$	5	$	87	$	177
Construction and forestry		9		38		30		11		5		3		8		104
Total	$	14	$	71	$	55	$	22	$	16	$	8	$	95	$	281


	July 28, 2024
	2024		2023		2022		2021		2020		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	10,349	$	9,686	$	5,849	$	3,286	$	1,276	$	394	$	4,409	$	35,249
30-59 days past due		37		90		56		28		10		4		31		256
60-89 days past due		15		65		25		12		5		2		10		134
90+ days past due				1		1		2		5						9
Non-performing		12		101		85		59		24		17		15		313
Construction and forestry
Current		2,261		2,067		1,249		583		147		60		111		6,478
30-59 days past due		40		59		34		14		4		1		4		156
60-89 days past due		12		25		14		9		2		1		1		64
90+ days past due		1		5		2		2				1				11
Non-performing		21		94		72		38		13		6		2		246
Total retail customer receivables	$	12,748	$	12,193	$	7,387	$	4,033	$	1,486	$	486	$	4,583	$	42,916

Write-offs for the nine months ended July 28, 2024:
Agriculture and turf	$	2	$	17	$	17	$	6	$	7	$	3	$	75	$	127
Construction and forestry		2		23		21		8		4		2		6		66
Total	$	4	$	40	$	38	$	14	$	11	$	5	$	81	$	193

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


	July 27		October 27		July 28
	2025		2024		2024
Wholesale receivables:
Agriculture and turf
Current	$	7,617	$	7,568	$	8,160
30+ days past due						1
Non-performing		1		1		1
Construction and forestry
Current		1,559		1,358		1,308
30+ days past due						3
Non-performing
Total wholesale receivables	$	9,177	$	8,927	$	9,473

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


	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total

Three Months Ended July 27, 2025
Allowance:
Beginning of period balance	$	243	$	13	$	2	$	258
Provision		49		33				82
Write-offs		(49)		(49)				(98)
Recoveries		5		11				16
End of period balance	$	248	$	8	$	2	$	258

Nine Months Ended July 27, 2025
Allowance:
Beginning of period balance	$	219	$	8	$	2	$	229
Provision		171		74				245
Write-offs		(153)		(102)				(255)
Recoveries		11		28				39
End of period balance	$	248	$	8	$	2	$	258

Financing receivables:
End of period balance	$	38,135	$	4,824	$	9,177	$	52,136


	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total

Three Months Ended July 28, 2024
Allowance:
Beginning of period balance	$	207	$	21	$	2	$	230
Provision		84		25				109
Provision reversal for assets held for sale		(38)						(38)
Provision subtotal		46		25				71
Write-offs		(45)		(46)				(91)
Recoveries		4		8				12
Translation adjustments		(3)						(3)
End of period balance	$	209	$	8	$	2	$	219

Nine Months Ended July 28, 2024
Allowance:
Beginning of period balance	$	172	$	21	$	4	$	197
Provision		183		46				229
Provision reversal for assets held for sale		(38)						(38)
Provision subtotal		145		46				191
Write-offs		(112)		(81)				(193)
Recoveries		9		22				31
Translation adjustments		(5)				(2)		(7)
End of period balance	$	209	$	8	$	2	$	219

Financing receivables:
End of period balance	$	38,333	$	4,583	$	9,473	$	52,389

The allowance for credit losses remained relatively flat in the third quarter of 2025 and increased in the first nine months of 2025, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions.

In the third quarter of 2024, the financial services business in Brazil met the held for sale criteria. The receivables in Brazil were reclassified to “Assets held for sale.” The associated allowance for credit losses was reversed and a valuation allowance for the assets held for sale was recorded (see Note 21). These operations were deconsolidated in the second quarter of 2025 (see Note 20).

Modifications

We occasionally grant contractual modifications to customers experiencing financial difficulties. Before offering a modification, we evaluate the ability of the customer to meet the modified payment terms. Modifications offered include payment deferrals, term extensions, or a combination thereof. Finance charges continue to accrue during the deferral or extension period with the exception of modifications related to bankruptcy proceedings. Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers. Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan.

The ending amortized cost of financing receivables modified with borrowers experiencing financial difficulty was as follows:


	Three Months Ended				Nine Months Ended
	July 27		July 28		July 27		July 28
	2025		2024		2025		2024
Modified financing receivables	$	45	$	23	$	115	$	67
Percentage of financing receivables portfolio		0.09%		0.04%		0.22%		0.13%

For the nine months ended July 27, 2025, the financial effects of payment deferrals with borrowers experiencing financial difficulty resulted in a weighted average payment deferral of 7 months to the modified contracts. Term extensions provided to borrowers experiencing financial difficulty added a weighted average of 11 months to the modified contracts. Additionally, modifications with a combination of both payment deferrals and term extensions resulted in a weighted average payment deferral of 5 months and a weighted average term extension of 8 months.

We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty. The ending amortized cost and performance of financing receivables modified during the prior twelve months ended July 27, 2025 and July 28, 2024 were as follows:


	July 27		July 28
	2025		2024*
Current	$	116	$	56
30-59 days past due		5		4
60-89 days past due		5		3
90+ days past due		2		1
Non-performing		14		3
Total	$	142	$	67

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

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months and the nine months ended July 27, 2025. In addition, at July 27, 2025, commitments to provide additional financing to these customers were not significant.

DEERE & CO 10-Q