Case Study Part 1 (Financial)

FEET ON THE GROUND

EYES ON THE HORIZON

Deere & Company

Annual Report 2 015

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Net Sales and Revenues (MM)

2 013 2 014 2 015

$ 3 7, 7 9 5

$36,067

$28,863

Shareholder Value Added* (SVA) (MM)

2 013 2 014 2 015

$3,390

$2,694 $7 74

About the cover:

“Feet on the Ground” refers to John Deere’s drive for operational excellence and

distinctive levels of quality in all products, including the new 9620RX 4-track

tractor shown. “Eyes on the Horizon” means looking ahead and makin\

g the investments

necessary to help meet the world’s growing need for food, shelter, and infrastructure.

Dividends Declared (U.S. dollars per share)Worldwide net sales and

revenues decreased 20% in

2 015 vs. 2 0 14 mainly due

to lower equipment sales.

Financial Services revenues

rose to $2.59 billion.

6 R O L G S U R Ÿ W V S O X V W K H G L V F L S O L Q H G

use of assets and the skillful

execution of business plans,

yielded another year of positive

SVA performance. SVA represents

R S H U D W L Q J S U R Ÿ W O H V V D Q L P S O L H G

charge for capital.

Deere has boosted its quarterly dividend rate 12 times

since 2004, to the current level of 60 cents per share.

Over this time, the company returned roughly 65%

R I F D V K R Z I U R P H T X L S P H Q W R S H U D W L R Q V W R L Q Y H V W R U V

through dividends and net share repurchases.

1 R Q * $ $ 3 Q D Q F L D O P H D V X U H 6 H H S D J H I R U G H W D L O V

2 013

$ 1. 9 9

Net Income* (MM)

2 013 2 014 2 015

$3,537

$ 3 ,16 2$1,9 4 0

* Net income attributable to Deere & Company.

Net income was down

39% to $ 1. 9 4 billion

but still represented

the sixth-highest total

in company history.

2 015

$2.4 0 2 014

$2.22

Capital Expenditures + Research & Development (MM)

Combined R&D expense and capital expenditures totaled

$2.1 billion, demonstrating Deere’s commitment to advanced

S U R G X F W V Q H Z W H F K Q R O R J L H V D Q G H I F L H Q W P D Q X I D F W X U L Q J

capacity. The lower level of capital spending follows several

years of heavy investment in global production capacity

and cleaner-burning engines.

R&D Spen ding

2 013 2 014 2 015

$2 , 6 0 9

$2,456$2,080

$1,425

$655

Capital Expenditures

$1,477

$1,132 $1,452

$1,004

2 015 IN REVIEW

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John Deere in 2015 demonstrated its ability to deliver sound

performance in the midst of a severe downturn in the global

agricultural sector. Our results, though well below levels of 2014

and other recent years, reflected the skillful execution of our

business plans and our success controlling costs and asset levels.

As a result, the company was able to post solid profits in a

challenging environment while continuing to lay the groundwork

for expanding our customer base in the future.

For the fiscal year, Deere reported income of $1.94 billion on net

sales and revenues of $28.9 billion. This represented a 39 percent

decline in earnings and 22 percent lower net sales. Earnings per

share were down less than the decline in earnings, by 33 percent,

reflecting the impact of fewer shares outstanding due to

continued share repurchases.

The year’s results produced healthy levels of economic profit, or

Shareholder Valued Added* (SVA), meaning that operating profit

stayed above the cost of capital. SVA is the primary measure

used in managing the company and making investment decisions.

Since 2004, the company has generated economic profit

totaling almost $20 billion.

SVA was $774 million while consolidated cash flow from

operations totaled $3.74 billion. In addition to funding important

projects, these dollars helped us pay a record amount in

dividends to our investors and continue with an aggressive share-

repurchase program. Deere has increased the quarterly dividend

rate more than five-fold since 2004 and reduced the number

of shares outstanding by more than one-third.

In addition, the company maintained its strong financial

condition. At year-end, Deere’s equipment operations carried

nearly $3 billion of cash with relatively little debt. Our financial

services operation remained conservatively capitalized and

continued to benefit from outstanding credit quality.

BROAD LINEUP MAKING IMPACT

Though its profits were lower, the Agriculture and Turf (A&T)

division remained solidly profitable, with an operating margin

of 8 percent and return on operating assets of 16 percent.

Weathering Challenging Conditions,

Deere Achieves Solid Results

* SVA and OROA, referred to throughout this report, are non-GAAP financial measures. See page 15 for details.

The 944K hybrid wheel loader advances Deere’s lineup of production-cl\

ass

machines. Its 536-horsepower engine with hybrid-electric drive differentiates

the 944K, helping deliver up to 40 percent fuel savings compared with

conventional drivetrains.

CHAIRMAN’S MESSAGE

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Introduction of new M-Series tracked and L-Series wheeled forestry machines

(843L feller buncher with 848L skidder in background) capped Deere’s

largest new-product investment in its forestry operations in recent years.

These results were achieved in spite of a sharp decline in the sale

of some of our most profitable models of equipment. During the

year, Deere’s largest division brought important products to

market and continued to broaden its customer base. The division

also benefited from growth in the sale of certain models of

small tractors and turf equipment.

Demand for products from the Construction and Forestry (C&F)

division weakened during the year, resulting in lower sales and

earnings. Still, C&F had a company-leading operating margin of

nearly 9 percent. Further, the division introduced additional

models of equipment for large contractors and completed the

first full year of operation at its new factories in Brazil.

Financial Services had record profits while financing the purchase

of roughly half of the new equipment sold by Deere during the year. Net income climbed to $633 million with the average loan

portfolio edging higher. The provision for credit losses equaled

a little more than a dollar for each $1,000 of portfolio value,

a sign of strong credit quality.

CREATING A DURABLE BUSINESS MODEL

In relation to the farm economy’s robust years earlier in the

decade, the current downturn has been quite dramatic.

Since peaking in 2013, industry sales of large agricultural

equipment in the United States have fallen more than

60 percent. Deere’s total equipment sales have declined more

than 25 percent from their high. Last year’s sales decline

was the company’s largest in percentage terms since the 1930s

and the largest-ever in dollars.

Even so, Deere reported the sixth-highest level of equipment

sales and earnings in its history. This kind of performance

highlights the continuing success of our efforts to create

a more durable business model and cultivate a wider range of

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Designed primarily for paddy-rice fields, the new 3036E tractor supports

Deere’s growth plans in Southeast Asia. The machine is lightweight, fuel-efficient,

and easy to operate, all keys to winning market share in the region.

revenue sources. In 2015, we reduced selling, administrative,

and general costs by $400 million and held the line on research

and development expense. We also did a good job managing

receivables and inventories, especially in the agriculture and turf

operations. In addition, our performance showed the value

of having a well-rounded business lineup, which goes beyond

large tractors and combines. Company results were supported

by the sale of smaller tractors, hay and forage equipment,

commercial worksite products, turf equipment, and service parts.

GLOBAL TRENDS GUIDING PLANS

Longer term, our confidence in Deere’s future remains

undiminished. While farm cycles come and go, world demand

for grain and oilseeds has proved to be remarkably consistent,

increasing in all but two of the last 40 years and more than

doubling over the period. At the same time, trends such as

increased urbanization point to continuing growth in the need

for shelter and infrastructure.

These favorable prospects lie at the heart of our growth plans

and our belief that Deere’s businesses will benefit from demand

for productive equipment and advanced ser vices well into the

future. Given this positive long-term outlook, there is no reason a slowdown in the farm economy – something we’ve weathered

and overcome many times in the past – should hinder our

longer-term drive for higher sales and a larger market presence

throughout the world.

PURSUING A FAR-REACHING STRATEGY

Deere’s far-reaching operating strategy made further progress

in 2015. Captured in the phrase “Feet on the Ground, Eyes on

the Horizon,” the plan emphasizes managing safe, efficient

operations; providing high-quality, advanced products; and

investing to expand our competitive position in key markets.

The company is reinforcing its strategic plan by placing a more

intense focus on quality and innovation. We are doing so

because products of exceptional quality often earn higher levels

of customer satisfaction and claim a larger share of the market.

Similarly, when products come to market whose innovative

features transform an industry category – as Deere has done

in recent years with cotton pickers, sprayers, and planters –

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The new 9009A rough mower fills out the lineup of machines needed

by golf courses globally. With its five independent rotary decks, the 9009A

positions Deere to participate in more bids and capture additional busin\

ess.

a strong customer response typically follows. Last year, the

company’s sweeping distinctive-quality effort made important

gains toward achieving targeted quality levels by the end

of 2016. We’ve had particular success improving our ability

to identif y and address quality issues before products leave

the factory floor.

During the year, Deere’s achievements in innovation won

a record 13 gold and silver medals at a leading European

farm show. We also received an unprecedented 13 awards for

innovation and engineering advancement from a respected

U.S. technical society. The company has a proud legacy in

quality and innovation. However, it’s imperative we take our

performance to the next level in support of our plans for

improved growth and profitability.

The company continued to re-evaluate its business portfolio in

2015, narrowing its focus on businesses that we believe will

have the greatest impact on our growth goals. During the year, we completed the sale of our crop insurance unit. This follows

earlier decisions to exit the water, landscapes, and wind-energy

businesses.

Late in the year and in early fiscal 2016, we announced a joint

venture and two acquisitions that will strengthen our position

in precision farming, a field likely to play a major role in

our industry’s future. The transactions involve two planter

companies and a software-development firm.

ADVANCED NEW PRODUCTS WINNING CUSTOMERS

In 2015, the company continued with an extensive launch

of new products that feature improvements in power, comfort,

performance, and emissions control. Highlighting new

agricultural equipment were four models of our first-ever line

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Economical tractor and hay baler combinations like this 5085E tractor

and 459E round baler are helping John Deere dealers capture

market share by reaching new customers. The machine setup meets

the needs of many small livestock producers and hay growers.

of powerful four-track tractors and a new line of round balers,

as well as productive forage harvesters and a small tractor for

paddy-rice applications in Asia.

To serve the needs of large contractors, our construction and

forestry division introduced a hybrid-electric four-wheel-drive

loader that sets the standard for efficiency. Our forestry

operations marked Deere’s 50th year in the skidder business

with an all-new line of skidders, as well as harvesters and

feller bunchers.

In order to help customers get the most value from their

investment in our products, the company took further steps to

strengthen its world-class parts-distribution system. During

the year, we doubled the size of our distribution center in Brazil,

officially opened a new facility in India, and reconfigured our

warehouse in Russia.

Deere augmented its global financing capabilities by

establishing a retail-financing presence in Austria, Czech

Republic, Croatia, and Bolivia. With these moves, the company

now offers competitive financing to its customers in

49 countries. CITIZENSHIP EFFORTS MAKING A DIFFERENCE

Long a cornerstone of John Deere’s success, our citizenship

efforts continued making a meaningful impact in 2015.

Total company and Deere foundation support of citizenship

activities, whose focus includes solutions for world hunger,

improved educational opportunities, and economic

development, approached $30 million.

John Deere employees continued to enrich their communities

through extensive volunteer efforts that are becoming

more global in scale and saw significant expansion in Brazil

and India. Employee volunteer hours increased by more than

20 percent for the year, exceeding 100,000 for the first time.

In one highlight, a community improvement program led by

the Deere foundation was launched in a historic neighborhood

of Moline, Illinois. Based on a model used in company

communities in Brazil and India, the project encourages a

collaborative approach to revitalization, business development,

2015 AR_spreads_12_22.indd 7 12/30/15 3:56 PM 8and improved employment opportunities. In all, it is estimated

that more than 15 million people saw direct benefit from the

company’s citizenship activities in 2015.

Responsible citizenship is also reflected in our efforts to protect

the well-being of employees and safeguard the environment.

Deere maintained its exemplary safety record with over half of

our locations reporting no lost-time incidents during the year.

Both recordable injuries and those resulting in time away

from work remained at or near all-time lows.

On the environmental side, we exceeded our goal of recycling

75 percent of waste from our manufacturing facilities three

years ahead of the 2018 target date. Due to lower factory

volumes, we were challenged to make further progress on our

goals of reducing water and energy use and greenhouse gas

emissions by 15 percent relative to production. One illustration

of our commitment to lower greenhouse gas emissions is a

new solar-energy unit at our cab factory in Bruchsal, Germany.

It provides roughly 10 percent of the power needs of the factory

and nearby parts warehouse.

In other milestones, Deere again appeared in a prominent listing

of most-ethical companies, was featured in Fortune magazine’s

review of most-admired companies, and was recognized for

having one of the world’s 100 most-valuable brands.

In addition, we were cited as one of America’s top employers

by Forbes and named to listings of best places to work

in Mexico, Spain, and Luxembourg. These are further

acknowledgements of our ability to attract and develop

top employee talent.

INSPIRING UNITY AND PURPOSE

Although John Deere faces challenging conditions in the year

ahead, we firmly believe the company is on track for long-

term growth and success. Thanks to the tireless efforts of

employees, dealers, and suppliers everywhere, we are making

steady gains in helping meet the world’s growing need

for advanced equipment and solutions and providing value

to our customers each and every day.

Guidance, section control, and variable-rate seeding are precision agric\

ulture

technologies that are changing how customers plant their crops. As a result,

growers save on seed and get crops planted more accurately, helping boost yields.

Announced acquisitions should accelerate adoption of these technologies \

globally.

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On behalf of the John Deere team,

Samuel R. Allen December 18, 2015

Deere’s senior management team is shown in front of a 6195R tractor a\

company headquarters in Moline, Illinois. From left: Jim Field, Mark von Pentz, John May,

Max Guinn, Mary Jones, Jean Gilles, Sam Allen, Mike Mack, and Raj Kalathur.

At the same time, we’re confident our actions to develop a

more durable business model will allow the company to continue

delivering solid results even in a depressed farm economy.

On visits to company locations throughout the world in 2015,

I was reminded time and again of the pride that our employees

and other stakeholders share in being associated with John Deere.

This pride has inspired a sense of unity and purpose that

transcends the bounds of language, culture, and nationality.

It also gives our company a powerful competitive advantage in

building its brand and attracting new customers.

All this reinforces my conviction that by working together we

can overcome present challenges, seize the great opportunities

the future holds, and leave no doubt that John Deere’s best days

are still to come!

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CONVERSATION WITH THE CHAIRMAN

How would you characterize Deere’s

performance in 2015?

We had a really good year when you

consider the economic headwinds we

were dealing with. But, of course, that’s

exactly the kind of challenging situation

our operations have been preparing for.

The large-ag market in North America

has dropped over 50 percent in the last

couple of years. That’s generally our

leading source of profits. Yet we still

had our sixth-best year in equipment

sales and earnings. Deere never earned

more than $1.9 billion – what we made

last year – prior to 2008.

That tells you something about how far

the company has come in strengthening

its business model.

How have we accomplished that?

We’ve established a more variable cost

structure, for one thing. That, coupled

with an improving ability to match

factory production with customer orders,

has made a big impact. The key is being

able to anticipate changes in demand far

enough in advance to make the necessary

adjustments.

Our forecasting ability is getting better

all the time. Net income last year equaled

our original forecast, though we proved

too optimistic on sales, especially

for construction equipment. Another factor is having an organization

that is highly aligned in relation to our

goals. Employees have a clear idea of

where we’re headed and what is expected

of them. They believe in the company

and are deeply committed to its success.

Such constancy of purpose has a positive

effect on performance.

Deere adopted a corporate strategy

for the period 2010-18 calling for

a significant increase in sales and

profitability. How would you assess

our progress?

We’ve done well improving overall

profitability, especially return on sales,

throughout the business cycle. Our goal

was to establish a cost structure capable

of producing a 12 percent operating

margin at mid-cycle sales and we’re

confident we’ve accomplished that.

We haven’t made as much headway on

asset turns, which we’ d like to improve to

2.5 times. However, we’re confident we

can reach the goal, or be very close, by

the 2018 target date. Also, over a longer

period, the company has made definite

strides managing asset levels.

Concerning sales, we’ ll likely come up short

of our objective of $50 billion for mid-cycle

sales by 2018. The market opportunity we

envisioned in 2010 has gone down in size

due to issues like political instability in

Russia and slower growth in China and

Brazil. Also, we haven’t gained all the

market share we anticipated. That’s one

of the things our quality and innovation

initiatives are addressing. Sam Allen:

Deere Positioned

For Future Recovery

In spite of challenging market

conditions, Deere had solid

results in 2015 and continued

to lay the groundwork for

longer-term success. In this

interview, Deere Chairman and

CEO Sam Allen discusses the

company’s recent performance

and its focus on making

the investments in capacity,

quality, and innovation that

will help address the world’s

need for productive equipment

in the future.

2015 AR_spreads_12_22.indd 10 12/30/15 3:56 PM 11

All in all, though, the strategy has

resulted in stronger performance.

Our recent results are proof of that.

What does precision agriculture

mean to Deere?

Deere has been building a leadership

position in precision agriculture since the

introduction of yield monitors and

automatic guidance equipment starting

in the late 1990s. However, the pace has

really quickened in the last few years.

Technology has evolved to a point that

today our customers can see real-time

information about crop yield, moisture

content, or seeding singulation and

population, among other variables, from

the seat of their tractor or combine, or

even from their office. This information

can be used to create planting and

spraying prescriptions or make other

agronomic decisions.

Precision-farming tools provide customers

with information to be more profitable

and productive. They also help differentiate

Deere’s products and services and

could well open the door to new revenue

streams for the company.

We believe the announced acquisitions

of Monosem and Precision Planting,

as well as the SageInsights joint venture,

will give us even more momentum in

the precision-ag field. When do you see a rebound in store

for the agricultural sector?

Nobody knows the answer, but we do

know the current downturn is about

too much supply, not too little demand.

We’ve had bumper crops on a global scale

for several years now, which has caused

prices for grains and oilseeds to move

lower. Demand, however, has continued

to grow as it does almost every year.

It’s important to understand that

today’s crop surplus is not excessive and

could be absorbed pretty fast in case

of a widespread drought or other event

that disrupts production. If that were

to happen, you can bet it would have a

positive, and likely rapid, impact on

commodity prices and farm incomes. Another consideration is that Deere

sales rarely drop more than two years in a

row and, according to our records that

go back about 80 years, have never done

so for more than three. While history

isn’t always predictive, it suggests these

things typically sort themselves out in

a reasonably short period of time.

Whatever the case, we’re continuing to

refine our cost and asset structure with an

eye toward achieving good returns, even

in weak markets. At the same time, we’re

confident the investments we’ve made in

global capacity, product support, distinctive

quality, and advanced technology will

have a big impact on our performance

when markets resume their growth.

2015 AR_spreads_12_22.indd 11 12/30/15 3:56 PM 12

– Operating profit slips to

$2.18 billion, down from

$4.30 billion in 2014.

– Strengthening a key

differentiator, A&T bolsters

dealer capabilities in precision

agriculture; C&F focuses

on dealer support for large,

production-class equipment.

– Deere and United Auto

Workers reach agreement

on six-year labor contract

affecting about 10,000 Deere

manufacturing employees at factories

in Illinois, Iowa, and Kansas.

– While helping meet global emissions

regulations, company’s engine business

provides a competitive advantage

for Deere machines.

Example: 7310R tractor

sets new fluid-efficiency

record among high-

horsepower tractors

of its class at industry

test site in Germany.

DEERE & COMPANY ENTERPRISE SVA* (MM)

2 015 HIGHLIGHTS

– Net sales and revenues decline

to $28.9 billion, down 20%.

– Earnings hit $1.94 billion,

sixth-best in company history,

but well below prior-year level.

– SVA declines on lower profits,

but remains firmly positive.

– Cash flow from operations

continues to be strong,

at $3.74 billion, up 6% over

previous year.

– Capital expenditures decline significantly, to $655 million,

following several years of heavy investment in additional

worldwide production capacity and cleaner-burning engines.

– Combined dividend payments and share repurchases hit

record $3.59 billion; dividends paid increase 4%. Number of

shares repurchased during year reaches nearly 32 million,

bringing total bought back since 2004 to more than

240 million.

EQUIPMENT OPERATIONS SVA (MM)

2 0 13 2 014 2 015

$3,147 $2,437 $516 2 0 13 2 0 14 2 0 15 $774

$2,694

$3,390

* SVA is a non-GAAP financial measure. See page 15 for details.

With the expansion of the parts distribution center in Campinas, Brazil,

Deere nearly doubled its parts distribution capacity in the region

while adding a state-of-the-art training facility. The center aims to help

differentiate Deere and its dealers through exceptional customer support.

Parts facilities were also upgraded in India and Russia.

2015 AR_spreads_12_22.indd 12 12/30/15 3:56 PM 13

2 013 2 014 2 015

$3, 215

$2, 231 $428

AGRICULTURE & TURF SVA (MM)

– 6 D O H V I D O O D P L G Z H D N H Q L Q J

demand for equipment

and unfavorable effects of

foreign-currency translation.

– 2 S H U D W L Q J S U R W G H F U H D V H V W R

E L O O L R Q I U R P E L O O L R Q

a year earlier.

– Division continues growth in

$ V L D O O L Q J O D U J H H T X L S P H Q W

orders in China for U.S.-built

cotton harvesters and combines;

also introduces light-weight, low-cost tractor for rice farmers

in Southeast Asia.

– Focused on precision agriculture, company agrees to purchase

European planter manufacturer Monosem and agricultural-

technology provider Precision Planting. Deere also forms joint

venture to help customers better manage data.

– Deere receives record three gold and 10 silver medals at

* H U P D Q \ d V $ J U L W H F K Q L F D W K H Z R U O G d V O D U J H V W D J U L F X O W X U D O W U D G H

V K R Z 7 K H H Y H Q W K H O G H Y H U \ W Z R \ H D U V V K R Z F D V H V L Q Q R Y D W L R Q

Company also is awarded gold and silver medals at leading

international agribusiness show in France. –

6 D O H V V O L G H G X H P D L Q O \

to lower shipment volumes

and unfavorable effects of

foreign-currency translation.

– 2 S H U D W L Q J S U R W G U R S V

W R P L O O L R Q I U R P

P L O O L R Q L Q

– / R Z H U S U R Ÿ W W U L J J H U V G H F O L Q H

L Q 6 9 $ W R P L O O L R Q

– Supporting growth outside

U.S. and Canada, division

L Q W U R G X F H V & K L Q D E X L O W O R D G H U V I R U / D W L Q $ P H U L F D Q P D U N H W V D Q G

H [ F D Y D W R U V I R U 5 X V V L D Q D Q G & K L Q H V H P D U N H W V

– & ) L Q W U R G X F H V I R U H V W U \ V N L G G H U V Z K H H O H G D Q G W U D F N H G I H O O H U

E X Q F K H U V D Q G W U D F N H G K D U Y H V W H U V S D U W R I F R P S D Q \ d V O D U J H V W

forestry product introduction and biggest forestry investment

V L Q F H 7 L P E H U M D F N D F T X L V L W L R Q L Q

– $ Q H [ D P S O H R I D G Y D Q F H G W H F K Q R O R J \

being integrated into company

products, forestry customers can

Q R Z E H Q H I L W I U R P 7 L P E H U 1 D Y L

jobsite mapping; feature

L P S U R Y H V O R J J H U V d S U R G X F W L Y L W \

and efficiency.

2 013 2 014 2 015

$206

$(68)

CONSTRUCTION & FORESTRY SVA (MM)

$88

Deere introduced six new backhoe loaders,

including the 3 10 L shown. A heavy-lift model

E R D V W V V L J Q L F D Q W O \ P R U H F U D Q L Q J F D S D E L O L W \ attracting new buyers

to the Deere line.

Unless otherwise indicated, all capitalized names of products and servic\

es are trademarks or service marks of Deere & Company.

Deere earns an Agritechnica gold medal

for cut-control technology on its 8000

Series forage harvesters; advancements in

spout control are awarded a silver medal.

2015 AR_spreads_12_22.indd 13 12/30/15 3:56 PM 14

The graph compares the cumulative total returns of Deere & Company, the S&P 500 Stock Index, and the S&P 500

Construction & Farm Machinery Index over a seven-year period. It assumes $ 10 0 was invested on October 3 1, 2008,

and that dividends were reinvested. Deere & Company stock price at October 3 1, 2 015 , was $78.00.

The Standard & Poor ’s 500 Construction & Farm Machinery Index comprises Deere (DE), Caterpillar (C AT ),

Cummins (CMI), Joy Global (JOY), and Paccar (PC AR). The stock performance shown in the graph is not intended to

forecast and does not necessarily indicate future price performance.

At October 31 2008 20092 0102 0 112 012 2 013 2 014 2 015

' H H U H & R P S D Q \

6 3 & R Q ) D U P 0 D F K

6 3

FINANCIAL SERVICES SVA (MM)

– 1 H W L Q F R P H F O L P E V W R U H F R U G

P L O O L R Q E H Q H W L Q J I U R P J U R Z W K L Q

the average portfolio and a gain on

sale of the crop insurance business.

– 6 9 $ D O V R U H D F K H V Q H Z K L J K R I

P L O O L R Q G X H W R L Q F U H D V H G S U R Ÿ W

– Provision for credit losses remains

K L V W R U L F D O O \ O R Z D W R I

average portfolio, well below

10 - and 15-year averages.

– 7 R I D F L O L W D W H V D O H V G L Y L V L R Q E H J L Q V

R I I H U L Q J U H W D L O Q D Q F L Q J W R - R K Q ' H H U H F X V W R P H U V L Q $ X V W U L D & U R D W L D

& ] H F K 5 H S X E O L F D Q G % R O L Y L D E U L Q J V Q X P E H U R I F R X Q W U L H V V H U Y H G W R

– ' L Y L V L R Q d V & K L Q D O H D V L Q J F R P S D Q \ U H F R J Q L ] H G D W & K L Q D / H D V L Q J 6 X P P L W

as equipment-leasing company of the year for its commitment to

innovation.

– ) R U V H F R Q G \ H D U * U H D W 3 O D F H V W R : R U N , Q V W L W X W H U H F R J Q L ] H V G L Y L V L R Q d V

/ X [ H P E R X U J E D Q N D V R Q H R I W K H F R X Q W U \ d V E H V W H P S O R \ H U V W K H E D Q N L V

G L Y L V L R Q d V K H D G T X D U W H U V I R U L W V R S H U D W L R Q V L Q ( X U R S H

2 0 13 2 0 14 2 0 15 $258

$257

$243

7-Y E A R CUMULATIVE TOTAL RETURN

' H H U H F R P S D U H G W R 6 3 , Q G H [ D Q G 6 3 & R Q V W U X F W L R Q ) D U P 0 D F K L Q H U \ , Q G H [

$300

$250

$200

$150

$100 $50 $0 2008 2009 2 0102 0 11 2 0 12 2 0 13 2 0 14 2 015

Deere & Company S&P 500 Construction & Farm Machinery S&P 500

2015 AR_spreads_12_22.indd 14 12/30/15 3:56 PM 15

SVA: FOCUSING ON GROWTH AND SUSTAINABLE PERFORMANCE

6 K D U H K R O G H U 9 D O X H $ G G H G 6 9 $ _ H V V H Q W L D O O \ W K H G L I I H U H Q F H E H W Z H H Q R S H U D W L Q J S U R W D Q G

W K H S U H W D [ F R V W R I F D S L W D O _ L V D P H W U L F X V H G E \ - R K Q ' H H U H W R H Y D O X D W H E X V L Q H V V U H V X O W V

and measure sustainable performance.

7 R D U U L Y H D W 6 9 $ H D F K H T X L S P H Q W V H J P H Q W L V D V V H V V H G D S U H W D [ F R V W R I D V V H W V _

J H Q H U D O O \ R I D Y H U D J H L G H Q W L D E O H R S H U D W L Q J D V V H W V Z L W K L Q Y H Q W R U \ D W V W D Q G D U G

F R V W E H O L H Y H G W R P R U H F O R V H O \ D S S U R [ L P D W H W K H F X U U H Q W F R V W R I L Q Y H Q W R U \ D Q G W K H

F R P S D Q \ d V U H O D W H G L Q Y H V W P H Q W 7 K H Q D Q F L D O V H U Y L F H V V H J P H Q W L V D V V H V V H G D F R V W R I

D Y H U D J H H T X L W \ _ D S S U R [ L P D W H O \ S U H W D [

7 K H D P R X Q W R I 6 9 $ L V G H W H U P L Q H G E \ G H G X F W L Q J W K H D V V H W R U H T X L W \ F K D U J H I U R P

R S H U D W L Q J S U R W

Additional information on these metrics and their relationship to amounts presented

in accordance with U.S. GA AP can be found at our website, www.JohnDeere.com.

Note: Some totals may vary due to rounding.

DEERE EQUIPMENT OPERATION S $MM un less in dicate d 2013 2014 2015

Net Sa les 34,998 32,96125,75 5

2 S H U D W L Q J 3 U R Ÿ W S J

Avera ge Assets g

: L W K , Q Y H Q W R U L H V # 6 W G & R V W #

Wit h Inventories @ LIFO@ 14,5 69 14 ,11 3 12,491

2 5 2 $ # / , ) 2

$ V V H W 7 X U Q V 6 W G & R V W

Operating Margin % x14.45x 1 x 8.45

OROA % @ Stan dard Cost 31.8 27.7 15.7

$MM 2013 2014 2015

$ Y H U D J H $ V V H W V # 6 W G & R V W

2 S H U D W L Q J 3 U R W

Cost of Assets -1,911 -1 -1,661

SVA 3,147 2,437 516

7 R F U H D W H D Q G J U R Z 6 9 $ ' H H U H ( T X L S P H Q W 2 S H U D W L R Q V

are targeting an operating return on average operating

D V V H W V 2 5 2 $ R I D W P L G F \ F O H V D O H V Y R O X P H V D Q G

equally ambitious returns at other points in the cycle.

(For purposes of this calc ulation, operating assets

D U H D Y H U D J H L G H Q W L D E O H D V V H W V G X U L Q J W K H \ H D U Z L W K

inventories valued at standard cost.)

AGRICULTURE & TURF$MM unless indicated 2013 2014 2015

1 H W 6 D O H V

2 S H U D W L Q J 3 U R W

Average Assets

: L W K , Q Y H Q W R U L H V # 6 W G & R V W

: L W K , Q Y H Q W R U L H V # / , ) 2

2 5 2 $ # / , ) 2

$ V V H W 7 X U Q V 6 W G & R V W

2 S H U D W L Q J 0 D U J L Q [ 1 [1 [

2 5 2 $ # 6 W D Q G D U G & R V W $MM 2013 2014 2015

$ Y H U D J H $ V V H W V # 6 W G & R V W

2 S H U D W L Q J 3 U R W

Cost of Assets -1 -1, 41 - 1, 2 2 1

6 9 $

7 K H ) L Q D Q F L D O 6 H U Y L F H V 6 9 $ L V F D O F X O D W H G R Q D S U H W D [ E D V L V

CONSTRUCTION & FORESTRY$MM un less in dicate d 2013 2014 2015

Net Sa les 5,866 6,581 5,963

2 S H U D W L Q J 3 U R Ÿ W S J

Avera ge Assets g

: L W K , Q Y H Q W R U L H V # 6 W G & R V W #

: L W K , Q Y H Q W R U L H V # / , ) 2 #

2 5 2 $ # / , ) 2

$ V V H W 7 X U Q V 6 W G & R V W

Operating Margin % [ [ [

2 5 2 $ # 6 W D Q G D U G & R V W

$MM 2013 2014 2015

$ Y H U D J H $ V V H W V # 6 W G & R V W

2 S H U D W L Q J 3 U R W

Cost of Assets

6 9 $

FINANCIAL SERVICE S $MM un less in dicate d 2013 2014 2015

Net Income AttributableNet Income Attributable to Deere & Company py 565 624 633

Avera ge Equity g qy 4,073 4,575 4,655

ROE % 13.9 13.6 13.6

$MM 2013 2014 2015

2 S H U D W L Q J 3 U R Ÿ W S J

Average Equity 4,073 4,575 4,655

2 S H U D W L Q J 3 U R Ÿ W

Cost o f Equity -627 -66 4 -705

6 9 $

2015 AR_spreads_12_22.indd 15 12/30/15 3:56 PM 16 Figures in parentheses represent complete years of company service throu\

gh December 31, 2015.

Positions as of December 31, 2015

LEADERSHIP TEAM

SAMUEL R. ALLEN (40)

Chairman and Chief Executive Officer

JEAN H. GILLES (35)

Senior Vice President, John Deere Power Systems,

Worldwide Parts Services, Advanced Technology & Engineering,

and Global Supply Management & Logistics

MARY K.W. JONES (18)

Senior Vice President and General Counsel

RAJESH KALATHUR (19)

Senior Vice President and Chief Financial Officer

KIMBERLY K. BEARDSLEY (25)

Vice President, Worldwide Parts Services

MARGARET A. CURRY (effective April 1, 2015)

Vice President, Taxes

PIERRE J. GUYOT (17)

Vice President, Global Supply Management & Logistics

MATTHEW G. HANEY (2)

Vice President and Deputy General Counsel, and

Chief Counsel, Financial Services Division

MICHAEL A. HARRING (31)

Vice President and Deputy General Counsel, North America

KLAUS G. HOEHN (23)

Vice President, Advanced Technology & Engineering

MARC A. HOWZE (14)

Vice President, Global Human Resources and

Employee Communications

RENEE A. MAILHOT (24)

Vice President and Chief Compliance Officer

BRADLEY D. MORRIS (38)

Vice President, Labor Relations

GREGORY R. NOE (22)

Vice President and Deputy General Counsel, International

LUANN K. RICKERT (36)

Vice President, Internal Audit

THOMAS C. SPITZFADEN (36)

Vice President and Treasurer

CHARLES R. STAMP, JR. (16)

Vice President, Public Affairs Worldwide

JOHN H. STONE (13)

Vice President, Corporate Strategy & Business Development

JAMES E. TEMPERLEY (39)

Vice President and Comptroller

JEFFREY A. TRAHAN (23)

Vice President, Pension Fund & Investments

PATRICK W. WEBBER (38)

Vice President, Information Technology

TODD E. DAVIES (25)

Corporate Secretary and Associate General Counsel WORLDWIDE AGRICULTURE & TURF DIVISION

JAMES M. FIELD (21)

President, Americas, Australia, and Global Harvesting

and Turf Platforms

JOHN C. MAY (18)

President, Agricultural Solutions, and

Chief Information Officer

MARKWART VON PENTZ (25)

President, Europe, Asia, Africa, and Global Tractor Platform

BERNHARD E. HAAS (29)

Senior Vice President, Global Tractor Platform

JOHN D. LAGEMANN (33)

Senior Vice President, Sales & Marketing,

Americas and Australia

CORY J. REED (17)

Senior Vice President, Intelligent Solutions

RANDAL A. SERGESKETTER (35)

Senior Vice President, Global Crop Harvesting Platform

WORLDWIDE CONSTRUCTION & FORESTRY DIVISION

MAX A. GUINN (35)

President, Worldwide C&F, Labor Relations, and Security

BRIAN J. RAUCH (21)

Senior Vice President,

Engineering, Manufacturing, and Supply Management

DOMENIC G. RUCCOLO (25)

Senior Vice President, Sales & Marketing

WORLDWIDE FINANCIAL SERVICES DIVISION

MICHAEL J. MACK (29)

Group President, Financial Services Division,

Human Resources, and Public Affairs

BRET C. THOMAS (2)

Executive Vice President, Global Operations

DAVID C. GILMORE (25)

Senior Vice President, U.S., Canada, Australia, and New Zealand

MICHAEL J. MATERA (7)

Senior Vice President, International Finance

LAWRENCE W. SIDWELL (16)

Senior Vice President, Global Credit & Risk

ANDREW C. TRAEGER ( 17 )

Senior Vice President and Finance Director

2015 AR_spreads_12_22.indd 16 12/30/15 3:56 PM 17

From left: Thomas H. Patrick, Richard B. Myers, Dmitri L. Stockton, Crand\

all C. Bowles, Vance D. Coffman,

Samuel R. Allen, Sheila G. Talton, Charles O. Holliday, Jr., Dipak C. Jain, Gregory R. Page, Sherry M. Smith,

Clayton M. Jones, Michael O. Johanns, and Joachim Milberg at Deere & Com\

pany World Headquarters.

BOARD OF DIRECTORS

* Directors not standing for reelection in 2016.

Figures in parentheses represent complete years of board service through\

December 31, 2015. Positions as of December 31, 2015

SAMUEL R. ALLEN (6)

Chairman and Chief Executive Officer,

Deere & Company

CRANDALL C. BOWLES (19)

Director, The Springs Company

Asset management

VANCE D. COFFMAN (11)

Retired Chairman, Lockheed Martin Corporation

Aerospace, defense, and information technology

CHARLES O. HOLLIDAY, JR.* (8)

Chairman, Royal Dutch Shell plc

Oil, gas, oil products, and chemicals

DIPAK C. JAIN (13)

Director, Sasin Graduate Institute

of Business Administration

International graduate business school

MICHAEL O. JOHANNS (effective January 8, 2015)

Former U.S. Senator, U.S. Secretary of Agriculture

and governor of Nebraska CLAYTON M. JONES (8)

Retired Chairman, Rockwell Collins, Inc.

Aviation electronics and communications

JOACHIM MILBERG* (12)

Retired Chairman, Supervisory Board,

Bayerische Motoren Werke (BMW) AG

Motor vehicles

RICHARD B. MYERS* (9)

Retired Chairman, Joint Chiefs of Staff

Retired General, United States Air Force

Principal military advisor to the President,

the Secretary of Defense, and the

National Security Council

GREGORY R. PAGE (2)

Executive Director, Cargill, Inc.

Agricultural, food, financial,

and industrial products and services

THOMAS H. PATRICK* (15)

Chairman, New Vernon Capital, LLC

Private equity fund SHERRY M. SMITH (4)

Former Executive Vice President and

Chief Financial Officer, Supervalu Inc.

Retail and wholesale grocery and

retail general merchandise products

DMITRI L. STOCKTON (effective May 27, 2015)

Chairman, President, and Chief Executive Officer,

GE Asset Management Inc.

global investment

Senior Vice President, General Electric Company

Power & water, aviation, oil & gas,

healthcare, appliances & lighting,

energy management, transportation,

and financial services

SHEILA G. TALTON (effective May 27, 2015)

President and Chief Executive Officer,

Gray Matter Analytics

Data analytics consulting services for

financial services and healthcare industries

2015 AR_spreads_12_22.indd 17 12/30/15 3:56 PM 1818

ANNUAL MEETING

7 K H D Q Q X D O P H H W L Q J R I F R P S D Q \ V W R F N K R O G H U V Z L O O E H K H O G

D W D P & 7 R Q ) H E U X D U \ D W ' H H U H & R P S D Q \

: R U O G + H D G T X D U W H U V 2 Q H - R K Q ' H H U H 3 O D F H 0 R O L Q H , O O L Qois.

TRANSFER AGENT & REGISTRAR

Send all correspondence, including address changes and

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' H H U H & R P S D Q \

c /o Computershare

3 2 % R [

& R O O H J H 6 W D W L R Q 7 ;

3 K R Q H W R O O I U H H

) U R P R X W V L G H W K H 8 6 F D O O

7 ' '

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STOCKHOLDER RELATIONS

' H H U H & R P S D Q \ Z H O F R P H V \ R X U F R P P H Q W V

' H H U H & R P S D Q \

6 W R F N K R O G H U 5 H O D W L R Q V ' H S D U W P H Q W

2 Q H - R K Q ' H H U H 3 O D F H 0 R O L Q H , /

3 K R Q H ) D [

Z Z Z - R K Q ' H H U H F R P , Q Y H V W R U V

INVESTOR RELATIONS

Securities analysts, portfolio managers, and representatives

R I Q D Q F L D O L Q V W L W X W L R Q V P D \ F R Q W D F W

7 R Q \ + X H J H O

' L U H F W R U , Q Y H V W R U 5 H O D W L R Q V

' H H U H & R P S D Q \

2 Q H - R K Q ' H H U H 3 O D F H 0 R O L Q H , /

3 K R Q H

Z Z Z - R K Q ' H H U H F R P , Q Y H V W R U V

STOCK EXCHANGES

' H H U H & R P S D Q \ F R P P R Q V W R F N L V O L V W H G R Q W K H 1 H Z < R U N

6 W R F N ( [ F K D Q J H X Q G H U W K H W L F N H U V \ P E R O ' (

FORM 10 - K

7 K H D Q Q X D O U H S R U W R Q ) R U P . O H G Z L W K W K H 6 H F X U L W L H V

D Q G ( [ F K D Q J H & R P P L V V L R Q L V D Y D L O D E O H R Q O L Q H R U X S R Q

Z U L W W H Q U H T X H V W W R ' H H U H & R P S D Q \ 6 W R F N K R O G H U 5 H O D W L R Q V

AUDITORS

' H O R L W W H 7 R X F K H / / 3

& K L F D J R , O O L Q R L V

STOCKHOLDER INFORMATION

TABLE OF CONTENTS:

Management’s Discussion

and Analysis ........................... 19

Reports of Management

and Independent Registered

Public Accounting Firm ........... 30

Consolidated Financial

Statements ........................... 31

Notes to Consolidated

Financial Statements ............. 36

Selected Financial Data .......... 67

FINANCIAL REVIEW

2015 AR_spreads_12_22.indd 18 12/30/15 3:56 PM MANAGEMENT’\b DI\b\fU\b\bION AND ANALY\bI\b

RE\bULT\b OF OPERATION\b FOR THE YEAR\b ENDEDworld’s\bincr\fasing\bn\f\fd\bfor\bfood,\bsh\flt\fr\band\binfrastructur\f

O\fTOBER 31, 2015, 2014 AND 2013 continu\f\bto\bmov\f\bah\fad.\bTh\f\bcompany\br\fmains\bconfid\fnt\bin\bth\f

pr\fs\fnt\bdir\fction\band\bb\fli\fv\fs\bit\bis\bon\btrack\bto\bd\fliv\fr\bvalu\f\bto

OVERVIEW custom\frs\band\binv\fstors\bin\bth\f\by\fars\bto\bcom\f.

Organization 2015 \fOMPARED WITH 2014

Th\f\bcompany’s\b\fquipm\fnt\bop\frations\bg\fn\frat\f\br\fv\fnu\fs\band

cash\bprimarily\bfrom\bth\f\bsal\f\bof\b\fquipm\fnt\bto\bJohn\bD\f\fr\f\bd\fal\frs \fON\bOLIDATED RE\bULT\b

and\bdistributors.\bTh\f\b\fquipm\fnt\bop\frations\bmanufactur\f\band Worldwid\f\bn\ft\bincom\f\battributabl\f\bto\bD\f\fr\f\b&\bCompany\bin\b2015

distribut\f\ba\bfull\blin\f\bof\bagricultural\b\fquipm\fnt;\ba\bvari\fty\bof was\b$1,940\bmillion,\bor\b$5.77\bp\fr\bshar\f\bdilut\fd\b($5.81\bbasic),

comm\frcial\band\bconsum\fr\b\fquipm\fnt;\band\ba\bbroad\brang\f\bof compar\fd\bwith\b$3,162\bmillion,\bor\b$8.63\bp\fr\bshar\f\bdilut\fd\b($8.71

\fquipm\fnt\bfor\bconstruction\band\bfor\fstry.\bTh\f\bcompany’s basic),\bin\b2014.\bN\ft\bsal\fs\band\br\fv\fnu\fs\bd\fcr\fas\fd\b20\bp\frc\fnt\bto

financial\bs\frvic\fs\bprimarily\bprovid\f\bcr\fdit\bs\frvic\fs,\bwhich\bmainly $28,863\bmillion\bin\b2015,\bcompar\fd\bwith\b$36,067\bmillion\bin\b2014.

financ\f\bsal\fs\band\bl\fas\fs\bof\b\fquipm\fnt\bby\bJohn\bD\f\fr\f\bd\fal\frs\band N\ft\bsal\fs\bof\bth\f\bworldwid\f\b\fquipm\fnt\bop\frations\bd\fclin\fd

trad\f\br\fc\fivabl\fs\bpurchas\fd\bfrom\bth\f\b\fquipm\fnt\bop\frations.\bIn 22\bp\frc\fnt\bin\b2015\bto\b$25,775\bmillion\bfrom\b$32,961\bmillion\blast

addition,\bfinancial\bs\frvic\fs\boff\fr\b\fxt\fnd\fd\b\fquipm\fnt\bwarranti\fs. y\far.\bSal\fs\binclud\fd\bpric\f\br\falization\bof\b1\bp\frc\fnt\band\ban

Th\f\binformation\bin\bth\f\bfollowing\bdiscussion\bis\bpr\fs\fnt\fd\bin\ba unfavorabl\f\bcurr\fncy\btranslation\b\fff\fct\bof\b5\bp\frc\fnt.\bEquipm\fnt

format\bthat\binclud\fs\binformation\bgroup\fd\bas\bconsolidat\fd, n\ft\bsal\fs\bin\bth\f\bUnit\fd\bStat\fs\band\bCanada\bd\fcr\fas\fd\b18\bp\frc\fnt

\fquipm\fnt\bop\frations\band\bfinancial\bs\frvic\fs.\bTh\f\bcompany\balso for\b2015.\bOutsid\f\bth\f\bU.S.\band\bCanada,\bn\ft\bsal\fs\bd\fcr\fas\fd

vi\fws\bits\bop\frations\bas\bconsisting\bof\btwo\bg\fographic\bar\fas,\bth\f 28\bp\frc\fnt\bfor\bth\f\by\far,\bwith\ban\bunfavorabl\f\bcurr\fncy\btranslation

U.S.\band\bCanada,\band\boutsid\f\bth\f\bU.S.\band\bCanada.\bTh\f \fff\fct\bof\b10\bp\frc\fnt\bfor\b2015.

company’s\bop\frating\bs\fgm\fnts\bconsist\bof\bagricultur\f\band\bturf, Worldwid\f\b\fquipm\fnt\bop\frations\bhad\ban\bop\frating\bprofit

construction\band\bfor\fstry,\band\bfinancial\bs\frvic\fs. of\b$2,177\bmillion\bin\b2015,\bcompar\fd\bwith\b$4,297\bmillion\bin

Trends and Economic \fonditions 2014.\bTh\f\bop\frating\bprofit\bd\fclin\f\bwas\bdu\f\bprimarily\bto\blow\fr

Th\f\bcompany’s\bagricultur\f\band\bturf\b\fquipm\fnt\bsal\fs\bd\fcr\fas\fd shipm\fnt\bvolum\fs,\bth\f\bimpact\bof\ba\bl\fss\bfavorabl\f\bproduct\bmix

25\bp\frc\fnt\bin\b2015\band\bar\f\bfor\fcast\bto\bd\fcr\fas\f\bby\babout and\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f.\bTh\fs\f

8\bp\frc\fnt\bfor\b2016.\bIndustry\bagricultural\bmachin\fry\bsal\fs\bin\bth\f factors\bw\fr\f\bpartially\boffs\ft\bby\bpric\f\br\falization,\blow\fr\bs\flling,

U.S.\band\bCanada\bfor\b2016\bar\f\bfor\fcast\bto\bd\fcr\fas\f\b15\bto administrativ\f\band\bg\fn\fral\b\fxp\fns\fs\band\blow\fr\bproduction\bcosts.

20\bp\frc\fnt,\bcompar\fd\bto\b2015.\bIndustry\bsal\fs\bin\bth\f\bEurop\fan N\ft\bincom\f\bof\bth\f\bcompany’s\b\fquipm\fnt\bop\frations\bwas

Union\b(EU)\b28\bnations\bar\f\bfor\fcast\bto\bb\f\bapproximat\fly\bth\f\bsam\f $1,308\bmillion\bfor\b2015,\bcompar\fd\bwith\b$2,548\bmillion\bin\b2014.

to\b5\bp\frc\fnt\blow\fr\bin\b2016,\bwhil\f\bSouth\bAm\frican\bindustry\bsal\fs In\baddition\bto\bth\f\bop\frating\bfactors\bm\fntion\fd\babov\f,\ba\blow\fr

ar\f\bproj\fct\fd\bto\bd\fcr\fas\f\babout\b10\bto\b15\bp\frc\fnt\bfrom\b2015 \fff\fctiv\f\btax\brat\f\bb\fn\ffit\fd\bth\f\br\fsults.\bTh\f\blow\fr\brat\f\br\fsult\fd

l\fv\fls.\bAsian\bsal\fs\bar\f\bproj\fct\fd\bto\bb\f\babout\bth\f\bsam\f\bor mainly\bfrom\ba\br\fduction\bof\ba\bvaluation\ballowanc\f\br\fcord\fd

d\fcr\fas\f\bslightly\bin\b2016.\bIndustry\bsal\fs\bof\bturf\band\butility during\bth\f\bfourth\bquart\fr\bdu\f\bto\ba\bchang\f\bin\bth\f\b\fxp\fct\fd

\fquipm\fnt\bin\bth\f\bU.S.\band\bCanada\bar\f\b\fxp\fct\fd\bto\bb\f r\falizabl\f\bvalu\f\bof\ba\bd\ff\frr\fd\btax\bass\ft.

approximat\fly\bth\f\bsam\f\bto\b5\bp\frc\fnt\bhigh\fr.\bTh\f\bcompany’s

N\ft\bincom\f\bof\bth\f\bfinancial\bs\frvic\fs\bop\frations\battributabl\f

construction\band\bfor\fstry\bsal\fs\bd\fcr\fas\fd\b9\bp\frc\fnt\bin\b2015\band

to\bD\f\fr\f\b&\bCompany\bin\b2015\bincr\fas\fd\bto\b$633\bmillion,

ar\f\bfor\fcast\bto\bd\fcr\fas\f\babout\b5\bp\frc\fnt\bin\b2016.\bGlobal\bfor\fstry

compar\fd\bwith\b$624\bmillion\bin\b2014.\bR\fsults\bimprov\fd\bdu\f\bto

industry\bsal\fs\bar\f\b\fxp\fct\fd\bto\bd\fclin\f\b5\bto\b10\bp\frc\fnt\bfrom\bth\f

growth\bin\bth\f\bav\frag\f\bcr\fdit\bportfolio,\bth\f\bpr\fviously\bannounc\fd

strong\bl\fv\fls\bin\b2015.\bN\ft\bincom\f\bof\bth\f\bcompany’s\bfinancial

crop\binsuranc\f\bsal\f\band\bhigh\fr\bcrop\binsuranc\f\bmargins

s\frvic\fs\bop\frations\battributabl\f\bto\bD\f\fr\f\b&\bCompany\bin\b2016\bis

\fxp\fri\fnc\fd\bprior\bto\bdiv\fstitur\f\b(s\f\f\bNot\f\b4),\band\blow\fr\bs\flling,

\fxp\fct\fd\bto\bb\f\bapproximat\fly\b$550\bmillion.

administrativ\f\band\bg\fn\fral\b\fxp\fns\fs.\bTh\fs\f\bfactors\bw\fr\f\bpartially

It\fms\bof\bconc\frn\binclud\f\bth\f\bunc\frtainty\bof\bth\f offs\ft\bby\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f

\fff\fctiv\fn\fss\bof\bgov\frnm\fntal\bactions\bin\br\fsp\fct\bto\bmon\ftary translation,\bl\fss\bfavorabl\f\bfinancing\bspr\fads\band\bhigh\fr\bloss\fs\bon

and\bfiscal\bpolici\fs,\bth\f\bglobal\b\fconomic\br\fcov\fry,\bth\f\bimpact\bof r\fsidual\bvalu\fs\bprimarily\bfor\bconstruction\b\fquipm\fnt\bop\frating

sov\fr\fign\bd\fbt,\b\furozon\f\bissu\fs,\bcapital\bmark\ft\bdisruptions, l\fas\fs.\bTh\f\br\fsults\bin\b2014\balso\bb\fn\ffit\fd\bfrom\ba\bmor\f\bfavorabl\f

trad\f\bagr\f\fm\fnts\band\bg\fopolitical\b\fv\fnts.\bSignificant \fff\fctiv\f\btax\brat\f.\bAdditional\binformation\bis\bpr\fs\fnt\fd\bin\bth\f

fluctuations\bin\bfor\fign\bcurr\fncy\b\fxchang\f\brat\fs\band\bvolatility\bin following\bdiscussion\bof\bth\f\b‘‘Worldwid\f\bFinancial\bS\frvic\fs

th\f\bpric\f\bof\bmany\bcommoditi\fs\bcould\balso\bimpact\bth\f\bcompany’s Op\frations.’’

r\fsults.\bD\fsigning\band\bproducing\bproducts\bwith\b\fngin\fs\bthat

Th\f\bcost\bof\bsal\fs\bto\bn\ft\bsal\fs\bratio\bfor\b2015\bwas

continu\f\bto\bm\f\ft\bhigh\bp\frformanc\f\bstandards\band\bincr\fasingly

78.1\bp\frc\fnt,\bcompar\fd\bwith\b75.2\bp\frc\fnt\blast\by\far.\bTh\f\bincr\fas\f

string\fnt\b\fmissions\br\fgulations\bis\bon\f\bof\bth\f\bcompany’s\bmajor

was\bdu\f\bprimarily\bto\bth\f\bimpact\bof\ba\bl\fss\bfavorabl\f\bproduct\bmix

prioriti\fs.

and\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f,

Th\f\bcompany\bcompl\ft\fd\ba\bsucc\fssful\by\far\b\fv\fn\bwith\bfurth\fr partially\boffs\ft\bby\bpric\f\br\falization\band\blow\fr\bproduction\bcosts.

w\fakn\fss\bin\bth\f\bglobal\bagricultural\bs\fctor\band\bslowdown\bin

Financ\f\band\bint\fr\fst\bincom\f\bincr\fas\fd\bthis\by\far\bdu\f\bto\ba

construction\b\fquipm\fnt\bmark\fts.\bTh\f\bfor\fcast\bcalls\bfor\blow\fr

larg\fr\bav\frag\f\bcr\fdit\bportfolio,\bpartially\boffs\ft\bby\blow\fr\bav\frag\f

r\fsults\bin\b2016,\bbut\bth\f\boutlook\bis\bconsid\frably\bb\ftt\fr\bthan

financing\brat\fs\band\bth\f\bunfavorabl\f\b\fff\fcts\bof\bcurr\fncy

pr\fvious\bdownturns.\bTh\f\bcompany\br\fmains\bin\ba\bstrong\bposition

translation.\bOth\fr\bincom\f\bd\fcr\fas\fd\bdu\f\bprimarily\bto\ba\br\fduction

to\bcarry\bout\bits\bgrowth\bplans\band\battract\bn\fw\bcustom\frs

throughout\bth\f\bworld.\bTh\f\bcompany’s\bplans\bto\bh\flp\bm\f\ft\bth\f

19 in\bcrop\binsuranc\f\bpr\fmiums\bas\ba\br\fsult\bof\bth\f\bsal\f\bof\bth\f\bCrop partially\boffs\ft\bby\bpric\f\br\falization,\blow\fr\bs\flling,\badministrativ\f

Insuranc\f\bop\frations\b(s\f\f\bNot\f\b4),\bpartially\boffs\ft\bby\bth\f\bgain\bon and\bg\fn\fral\b\fxp\fns\fs,\band\blow\fr\bproduction\bcosts.

th\f\bsal\f\bof\bth\f\bCrop\bInsuranc\f\bop\frations\band\bhigh\fr\b\fxt\fnd\fdWorldwide \fonstruction and Forestry Operations

warranty\br\fv\fnu\f.\bR\fs\farch\band\bd\fv\flopm\fnt\bcosts\bd\fcr\fas\fd Th\f\bconstruction\band\bfor\fstry\bs\fgm\fnt\bhad\ban\bop\frating\bprofit

larg\fly\bdu\f\bto\bth\f\b\fff\fct\bof\bcurr\fncy\btranslation.\bS\flling, of\b$528\bmillion\bin\b2015,\bcompar\fd\bwith\b$648\bmillion\bin\b2014.

administrativ\f\band\bg\fn\fral\b\fxp\fns\fs\bd\fcr\fas\fd\bmainly\bdu\f\bto\bth\f N\ft\bsal\fs\bd\fcr\fas\fd\b9\bp\frc\fnt\bfor\bth\f\by\far\bmainly\bas\ba\br\fsult\bof

\fff\fct\bof\bcurr\fncy\btranslation,\blow\fr\binc\fntiv\f\bcomp\fnsation\band low\fr\bshipm\fnt\bvolum\fs\band\bth\f\bunfavorabl\f\b\fff\fct\bof\bcurr\fncy

d\fal\fr\bcommission\b\fxp\fns\fs,\bth\f\bsal\f\bof\bth\f\bWat\fr\band\bCrop translation,\bpartially\boffs\ft\bby\bpric\f\br\falization.\bOp\frating\bprofit

Insuranc\f\bop\frations,\band\bth\f\bd\fconsolidation\bof\bLandscap\fs d\fclin\fd\bmainly\bdu\f\bto\blow\fr\bshipm\fnt\bvolum\fs,\bth\f\bunfavorabl\f

(s\f\f\bNot\f\b4).\bInt\fr\fst\b\fxp\fns\f\bincr\fas\fd\bdu\f\bto\bhigh\fr\bav\frag\f \fff\fcts\bof\bfor\fign\b\fxchang\f\band\bhigh\fr\bproduction\bcosts,

int\fr\fst\brat\fs\band\bhigh\fr\bav\frag\f\bborrowings,\bpartially\boffs\ft\bby partially\boffs\ft\bby\bpric\f\br\falization\band\blow\fr\bs\flling,

th\f\bfavorabl\f\b\fff\fcts\bof\bcurr\fncy\btranslation.\bOth\fr\bop\frating administrativ\f\band\bg\fn\fral\b\fxp\fns\fs.

\fxp\fns\fs\bd\fcr\fas\fd\bprimarily\bdu\f\bto\ba\br\fduction\bin\bcrop

Worldwide Financial \bervices Operations

insuranc\f\bclaims,\bth\f\bWat\fr\bop\frations’\bimpairm\fnt\band\bsal\f\bin

Th\f\bop\frating\bprofit\bof\bth\f\bfinancial\bs\frvic\fs\bs\fgm\fnt\bwas

2014\b(s\f\f\bNot\f\b4),\bth\f\b\fff\fct\bof\bcurr\fncy\btranslation,\bpartially

$963\bmillion\bin\b2015,\bcompar\fd\bwith\b$921\bmillion\bin\b2014.\bTh\f

offs\ft\bby\bhigh\fr\bd\fpr\fciation\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs.

r\fsults\bimprov\fd\bdu\f\bto\bgrowth\bin\bth\f\bav\frag\f\bcr\fdit\bportfolio,

Th\f\bcompany\bhas\bs\fv\fral\bd\ffin\fd\bb\fn\ffit\bp\fnsion\bplans\band th\f\bpr\fviously\bannounc\fd\bCrop\bInsuranc\f\bop\frations\bsal\f\b(s\f\f

d\ffin\fd\bb\fn\ffit\bh\falth\bcar\f\band\blif\f\binsuranc\f\bplans.\bTh\f Not\f\b4)\band\bhigh\fr\bcrop\binsuranc\f\bmargins\b\fxp\fri\fnc\fd\bprior\bto

company’s\bpostr\ftir\fm\fnt\bb\fn\ffit\bcosts\bfor\bth\fs\f\bplans\bin\b2015 th\f\bdiv\fstitur\f,\band\blow\fr\bs\flling,\badministrativ\f\band\bg\fn\fral

w\fr\f\b$512\bmillion,\bcompar\fd\bwith\b$432\bmillion\bin\b2014.\bTh\f \fxp\fns\fs.\bTh\fs\f\bfactors\bw\fr\f\bpartially\boffs\ft\bby\bth\f\bunfavorabl\f

long-t\frm\b\fxp\fct\fd\br\fturn\bon\bplan\bass\fts,\bwhich\bis\br\ffl\fct\fd\bin \fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f\btranslation,\bl\fss\bfavorabl\f

th\fs\f\bcosts,\bwas\ban\b\fxp\fct\fd\bgain\bof\b7.3\bp\frc\fnt\bin\b2015\band financing\bspr\fads\band\bhigh\fr\bloss\fs\bon\br\fsidual\bvalu\fs\bprimarily

7.5\bp\frc\fnt\bin\b2014,\bor\b$824\bmillion\bin\b2015\band\b$848\bmillion\bin for\bconstruction \fquipm\fnt\bop\frating\bl\fas\fs.\bTotal\br\fv\fnu\fs\bof

2014.\bTh\f\bactual\br\fturn\bwas\ba\bgain\bof\b$606\bmillion\bin\b2015\band th\f\bfinancial\bs\frvic\fs\bop\frations,\bincluding\bint\frcompany

$1,213\bmillion\bin\b2014.\bIn\b2016,\bth\f\b\fxp\fct\fd\br\fturn\bwill\bb\f r\fv\fnu\fs,\bw\fr\f\bapproximat\fly\bth\f\bsam\f\bin\b2015,\bcompar\fd\bwith

approximat\fly\b7.3\bp\frc\fnt.\bTh\f\bcompany’s\bpostr\ftir\fm\fnt\bcosts 2014.\bTh\f\bav\frag\f\bbalanc\f\bof\br\fc\fivabl\fs\band\bl\fas\fs\bfinanc\fd

in\b2016\bar\f\b\fxp\fct\fd\bto\bd\fcr\fas\f\bapproximat\fly\b$200\bmillion. was\b1\bp\frc\fnt\bhigh\fr\bin\b2015,\bcompar\fd\bwith\b2014.\bInt\fr\fst

Th\f\bcompany\bmak\fs\bany\br\fquir\fd\bcontributions\bto\bth\f\bplan \fxp\fns\f\bincr\fas\fd\b6\bp\frc\fnt\bin\b2015\bas\ba\br\fsult\bof\bhigh\fr

ass\fts\bund\fr\bapplicabl\f\br\fgulations\band\bvoluntary\bcontributions av\frag\f\bborrowings\band\bhigh\fr\bav\frag\f\bint\fr\fst\brat\fs.\bTh\f

from\btim\f\bto\btim\f\bbas\fd\bon\bth\f\bcompany’s\bliquidity\band\bability\bto financial\bs\frvic\fs\bop\frations’\bratio\bof\b\farnings\bto\bfix\fd\bcharg\fs

mak\f\btax-d\fductibl\f\bcontributions.\bTotal\bcompany\bcontributions was\b3.29\bto\b1\bin\b2015,\bcompar\fd\bwith\b3.37\bto\b1\bin\b2014.

to\bth\f\bplans\bw\fr\f\b$131 million\bin\b2015\band\b$138\bmillion\bin

Equipment Operations in U.\b. and \fanada

2014,\bwhich\binclud\f\bdir\fct\bb\fn\ffit\bpaym\fnts\bfor\bunfund\fd\bplans.

Th\f\b\fquipm\fnt\bop\frations\bin\bth\f\bU.S.\band\bCanada\bhad\ban

Th\fs\f\bcontributions\balso\binclud\fd\bvoluntary\bcontributions\bto\bplan

op\frating\bprofit\bof\b$1,643\bmillion\bin\b2015,\bcompar\fd\bwith

ass\fts\bof\b$3\bmillion\bin\b2015\band\b$5\bmillion\bin\b2014.\bTotal

$3,311\bmillion\bin\b2014.\bTh\f\bd\fclin\f\bwas\bdu\f\bprimarily\bto\blow\fr

company\bcontributions\bin\b2016\bar\f\b\fxp\fct\fd\bto\bb\f

shipm\fnt\bvolum\fs\band\bth\f\bimpact\bof\ba\bl\fss\bfavorabl\f\bproduct

approximat\fly\b$98\bmillion,\bwhich\bar\f\bprimarily\bdir\fct\bb\fn\ffit

mix.\bTh\f\bd\fclin\f\bwas\bpartially\boffs\ft\bby\bpric\f\br\falization.\bN\ft

paym\fnts\bfor\bunfund\fd\bplans.\bTh\f\bcompany\bhas\bno\bsignificant

sal\fs\bd\fcr\fas\fd\b18\bp\frc\fnt\bdu\f\bprimarily\bto\blow\fr\bshipm\fnt

r\fquir\fd\bcontributions\bto\bp\fnsion\bplan\bass\fts\bin\b2016\bund\fr

volum\fs\band\bth\f\bunfavorabl\f\b\fff\fcts\bof\bcurr\fncy\btranslation,

applicabl\f\bfunding\br\fgulations.\bS\f\f\bth\f\bdiscussion\bin\b‘‘Critical

partially\boffs\ft\bby\bpric\f\br\falization.\bTh\f\bphysical\bvolum\f\bof\bsal\fs

Accounting\bPolici\fs’’\bfor\bmor\f\binformation\babout\bpostr\ftir\fm\fnt

d\fcr\fas\fd\b18\bp\frc\fnt,\bcompar\fd\bwith\b2014.

b\fn\ffit\bobligations.

Equipment Operations outside U.\b. and \fanada

BU\bINE\b\b \bEGMENT AND GEOGRAPHI\f AREA RE\bULT\b

Th\f\b\fquipm\fnt\bop\frations\boutsid\f\bth\f\bU.S.\band\bCanada\bhad\ban

Th\f\bfollowing\bdiscussion\br\flat\fs\bto\bop\frating\br\fsults\bby

op\frating\bprofit\bof\b$534\bmillion\bin\b2015,\bcompar\fd\bwith

r\fportabl\f\bs\fgm\fnt\band\bg\fographic\bar\fa.\bOp\frating\bprofit\bis

$986\bmillion\bin\b2014.\bTh\f\bd\fcr\fas\f\bwas\bdu\f\bprimarily\bto\blow\fr

incom\f\bb\ffor\f\bc\frtain\b\fxt\frnal\bint\fr\fst\b\fxp\fns\f,\bc\frtain\bfor\fign

shipm\fnt\bvolum\fs,\bth\f\bimpact\bof\ba\bl\fss\bfavorabl\f\bproduct\bmix

\fxchang\f\bgains\bor\bloss\fs,\bincom\f\btax\fs\band\bcorporat\f\b\fxp\fns\fs.

and\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f.\bTh\fs\f

How\fv\fr,\bop\frating\bprofit\bof\bth\f\bfinancial\bs\frvic\fs\bs\fgm\fnt

factors\bw\fr\f\bpartially\boffs\ft\bby\bpric\f\br\falization.\bN\ft\bsal\fs\bw\fr\f

includ\fs\bth\f\b\fff\fct\bof\bint\fr\fst\b\fxp\fns\f\band\bfor\fign\bcurr\fncy

28\bp\frc\fnt\blow\fr\bprimarily\br\ffl\fcting\bd\fcr\fas\fd\bshipm\fnt

\fxchang\f\bgains\bor\bloss\fs.

volum\fs\band\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy

Worldwide Agriculture and Turf Operations translation,\bpartially\boffs\ft\bby\bpric\f\br\falization.\bTh\f\bphysical

Th\f\bagricultur\f\band\bturf\bs\fgm\fnt\bhad\ban\bop\frating\bprofit\bof volum\f\bof\bsal\fs\bd\fcr\fas\fd\b19\bp\frc\fnt,\bcompar\fd\bwith\b2014.

$1,649\bmillion\bfor\bth\f\by\far,\bcompar\fd\bwith\b$3,649\bmillion\bin

MARKET \fONDITION\b AND OUTLOOK

2014.\bN\ft\bsal\fs\bd\fcr\fas\fd\b25\bp\frc\fnt\bin\b2015\bdu\f\blarg\fly\bto

Company\b\fquipm\fnt\bsal\fs\bar\f\bproj\fct\fd\bto\bd\fcr\fas\f\b7\bp\frc\fnt

low\fr\bshipm\fnt\bvolum\fs\band\bth\f\bunfavorabl\f\b\fff\fcts\bof\bcurr\fncy

for\bfiscal\by\far\b2016\band\bd\fcr\fas\f\babout\b11\bp\frc\fnt\bfor\bth\f\bfirst

translation.\bTh\fs\f\bfactors\bw\fr\f\bpartially\boffs\ft\bby\bpric\f

quart\fr,\bcompar\fd\bwith\bth\f\bsam\f\bp\friods\bin\b2015.\bFor\bfiscal\by\far

r\falization.\bLow\fr\bop\frating\bprofit\bwas\bdriv\fn\bprimarily\bby\bth\f

2016,\bn\ft\bincom\f\battributabl\f\bto\bD\f\fr\f\b&\bCompany\bis

impact\bof\blow\fr\bshipm\fnt\bvolum\fs,\ba\bl\fss\bfavorabl\f\bproduct\bmix

anticipat\fd\bto\bb\f\babout\b$1.4\bbillion.

and\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f,

20 Agriculture and Turf.\bTh\f\bcompany’s\bworldwid\f\bsal\fs\bofprograms,\bchang\fs\bin\band\b\fff\fcts\bof\bcrop\binsuranc\f\bprograms,

agricultur\f\band\bturf\b\fquipm\fnt\bar\f\bfor\fcast\bto\bd\fcr\fas\f\bby\babout global\btrad\f\bagr\f\fm\fnts,\banimal\bdis\fas\fs\band\bth\fir\b\fff\fcts\bon

8\bp\frc\fnt\bfor\bfiscal\by\far\b2016,\bincluding\ba\bn\fgativ\f\bcurr\fncy poultry,\bb\f\ff\band\bpork\bconsumption\band\bpric\fs,\bcrop\bp\fsts\band

translation\b\fff\fct\bof\babout\b2\bp\frc\fnt.\bIndustry\bsal\fs\bfor dis\fas\fs,\band\bth\f\bl\fv\fl\bof\bfarm\bproduct\b\fxports\b(including

agricultural\b\fquipm\fnt\bin\bth\f\bU.S.\band\bCanada\bar\f\bfor\fcast\bto\bb\f conc\frns\babout\bg\fn\ftically\bmodifi\fd\borganisms).

down\b15\bto\b20\bp\frc\fnt\bfor\b2016.\bTh\f\bd\fclin\f,\bwhich\br\ffl\fcts\bth\f Factors\baff\fcting\bth\f\boutlook\bfor\bth\f\bcompany’s\bturf\band

impact\bof\blow\bcommodity\bpric\fs\band\bstagnant\bfarm\bincom\fs,\bis utility\b\fquipm\fnt\binclud\f\bconsum\fr\bconfid\fnc\f,\bw\fath\fr

\fxp\fct\fd\bto\bb\f\bmost\bpronounc\fd\bin\bth\f\bsal\f\bof\bhigh\fr conditions,\bcustom\fr\bprofitability,\bconsum\fr\bborrowing\bpatt\frns,

hors\fpow\fr\bmod\fls.\bFull\by\far\b2016\bindustry\bsal\fs\bin\bth\f\bEU28 consum\fr\bpurchasing\bpr\ff\fr\fnc\fs,\bhousing\bstarts,\binfrastructur\f

ar\f\bfor\fcast\bto\bb\f\babout\bth\f\bsam\f\bto\b5\bp\frc\fnt\blow\fr,\bwith\bth\f inv\fstm\fnt,\bsp\fnding\bby\bmunicipaliti\fs\band\bgolf\bcours\fs,\band

d\fclin\f\battributabl\f\bto\blow\bcommodity\bpric\fs\band\bfarm\bincom\fs, consumabl\f\binput\bcosts.

including\bfurth\fr\bpr\fssur\f\bon\bth\f\bdairy\bs\fctor.\bIn\bSouth\bAm\frica,

Consum\fr\bsp\fnding\bpatt\frns,\br\fal\b\fstat\f\band\bhousing

industry\bsal\fs\bof\btractors\band\bcombin\fs\bar\f\bproj\fct\fd\bto

pric\fs,\bth\f\bnumb\fr\bof\bhousing\bstarts\band\bint\fr\fst\brat\fs\bar\f

d\fcr\fas\f\b10\bto\b15\bp\frc\fnt\bmainly\bas\ba\br\fsult\bof\b\fconomic

\fsp\fcially\bimportant\bto\bsal\fs\bof\bth\f\bcompany’s\bconstruction\band

conc\frns\bin\bBrazil\band\bunc\frtainty\babout\bgov\frnm\fnt\bsponsor\fd

for\fstry\b\fquipm\fnt.\bTh\f\bl\fv\fls\bof\bpublic\band\bnon-r\fsid\fntial

financing.\bAsian\bsal\fs\bar\f\bproj\fct\fd\bto\bb\f\babout\bth\f\bsam\f\bto

construction\balso\bimpact\bth\f\br\fsults\bof\bth\f\bcompany’s

down\bslightly,\bdu\f\bin\bpart\bto\bw\fakn\fss\bin\bChina.\bIndustry\bsal\fs\bof

construction\band\bfor\fstry\bs\fgm\fnt.\bPric\fs\bfor\bpulp,\bpap\fr,

turf\band\butility\b\fquipm\fnt\bin\bth\f\bU.S.\band\bCanada\bar\f\b\fxp\fct\fd

lumb\fr\band\bstructural\bpan\fls\bar\f\bimportant\bto\bsal\fs\bof\bfor\fstry

to\bb\f\babout\bth\f\bsam\f\bto\b5\bp\frc\fnt\bhigh\fr\bfor\b2016,\bb\fn\ffiting

\fquipm\fnt.

from\bg\fn\fral\b\fconomic\bgrowth.

All\bof\bth\f\bcompany’s\bbusin\fss\fs\band\bits\br\fport\fd\br\fsults\bar\f

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aff\fct\fd\bby\bg\fn\fral\b\fconomic\bconditions\bin\bth\f\bglobal\bmark\fts

construction\band\bfor\fstry\b\fquipm\fnt\bar\f\bfor\fcast\bto\bd\fcr\fas\f

and\bindustri\fs\bin\bwhich\bth\f\bcompany\bop\frat\fs,\b\fsp\fcially

about\b5\bp\frc\fnt\bfor\b2016,\bincluding\ba\bn\fgativ\f\bcurr\fncy

mat\frial\bchang\fs\bin\b\fconomic\bactivity\bin\bth\fs\f\bmark\fts\band

translation\b\fff\fct\bof\babout\b1\bp\frc\fnt.\bTh\f\bfor\fcast\bd\fclin\f\bin

industri\fs;\bcustom\fr\bconfid\fnc\f\bin\bg\fn\fral\b\fconomic\bconditions;

sal\fs\br\ffl\fcts\bth\f\bimpact\bof\bw\fak\bconditions\bin\bth\f\bNorth

for\fign\bcurr\fncy\b\fxchang\f\brat\fs\band\bth\fir\bvolatility,\b\fsp\fcially

Am\frican\b\fn\frgy\bs\fctor,\b\fsp\fcially\bin\bCanada,\bas\bw\fll\bas\blow\fr

fluctuations\bin\bth\f\bvalu\f\bof\bth\f\bU.S.\bdollar;\bint\fr\fst\brat\fs;\band

sal\fs\boutsid\f\bth\f\bU.S.\band\bCanada.\bIn\bfor\fstry,\bglobal\bsal\fs\bar\f

inflation\band\bd\fflation\brat\fs.\bGov\frnm\fnt\bsp\fnding\band\btaxing

\fxp\fct\fd\bto\bd\fcr\fas\f\b5\bto\b10\bp\frc\fnt\bfrom\b2015’s\bstrong\bl\fv\fls,

could\badv\frs\fly\baff\fct\bth\f\b\fconomy,\b\fmploym\fnt,\bconsum\fr\band

primarily\bas\ba\br\fsult\bof\blow\fr\bsal\fs\bin\bth\f\bU.S.\band\bCanada.

corporat\f\bsp\fnding,\band\bcompany\br\fsults.

Financial \bervices.\bFiscal\by\far\b2016\bn\ft\bincom\f\battributabl\f\bto Custom\fr\band\bcompany\bop\frations\band\br\fsults\bcould\bb\f

D\f\fr\f\b&\bCompany\bfor\bth\f\bfinancial\bs\frvic\fs\bop\frations\bis aff\fct\fd\bby\bchang\fs\bin\bw\fath\fr\bpatt\frns\b(including\bth\f\b\fff\fcts\bof

\fxp\fct\fd\bto\bb\f\bapproximat\fly\b$550\bmillion.\bTh\f\boutlook\br\ffl\fcts drought\band\bdri\fr\bthan\bnormal\bconditions\bin\bc\frtain\bmark\fts);

l\fss\bfavorabl\f\bfinancing\bspr\fads\band\ban\bincr\fas\fd\bprovision\bfor th\f\bpolitical\band\bsocial\bstability\bof\bth\f\bglobal\bmark\fts\bin\bwhich

cr\fdit\bloss\fs.\bAdditionally,\b2015\br\fsults\bb\fn\ffit\fd\bfrom\ba\bgain\bon th\f\bcompany\bop\frat\fs;\bth\f\b\fff\fcts\bof,\bor\br\fspons\f\bto,\bt\frrorism

th\f\bsal\f\bof\bth\f\bCrop\bInsuranc\f\bop\frations. and\bs\fcurity\bthr\fats;\bwars\band\both\fr\bconflicts\band\bth\f\bthr\fat

\bAFE HARBOR \bTATEMENT th\fr\fof\band\bth\f\br\fspons\f\bth\fr\fto;\bnatural\bdisast\frs;\band\bth\f

Safe Har\bor Stateme\ft u\fder the Private Securities Litigatio\f spr\fad\bof\bmajor\b\fpid\fmics.

Reform Act of 1995: Stat\fm\fnts\bund\fr\b‘‘Ov\frvi\fw,’’\b‘‘Mark\ft

Significant\bchang\fs\bin\bmark\ft\bliquidity\bconditions\band\bany

Conditions\band\bOutlook,’’\band\both\fr\bforward-looking\bstat\fm\fnts failur\f\bto\bcomply\bwith\bfinancial\bcov\fnants\bin\bcr\fdit\bagr\f\fm\fnts

h\fr\fin\bthat\br\flat\f\bto\bfutur\f\b\fv\fnts,\b\fxp\fctations,\btr\fnds\band could\bimpact\bacc\fss\bto\bfunding\band\bfunding\bcosts,\bwhich\bcould

op\frating\bp\friods\binvolv\f\bc\frtain\bfactors\bthat\bar\f\bsubj\fct\bto r\fduc\f\bth\f\bcompany’s\b\farnings\band\bcash\bflows.\bFinancial\bmark\ft

chang\f,\band\bimportant\brisks\band\bunc\frtainti\fs\bthat\bcould\bcaus\f conditions\bcould\balso\bn\fgativ\fly\bimpact\bcustom\fr\bacc\fss\bto

actual\br\fsults\bto\bdiff\fr\bmat\frially.\bSom\f\bof\bth\fs\f\brisks\band capital\bfor\bpurchas\fs\bof\bth\f\bcompany’s\bproducts\band\bcustom\fr

unc\frtainti\fs\bcould\baff\fct\bparticular\blin\fs\bof\bbusin\fss,\bwhil\f confid\fnc\f\band\bpurchas\f\bd\fcisions,\bborrowing\band\br\fpaym\fnt

oth\frs\bcould\baff\fct\ball\bof\bth\f\bcompany’s\bbusin\fss\fs. practic\fs,\band\bth\f\bnumb\fr\band\bsiz\f\bof\bcustom\fr\bloan

Th\f\bcompany’s\bagricultural\b\fquipm\fnt\bbusin\fss\bis\bsubj\fct d\flinqu\fnci\fs\band\bd\ffaults.\bA\bd\fbt\bcrisis,\bin\bEurop\f\bor\b\fls\fwh\fr\f,

to\ba\bnumb\fr\bof\bunc\frtainti\fs\bincluding\bth\f\bmany\bint\frr\flat\fd could\bn\fgativ\fly\bimpact\bcurr\fnci\fs,\bglobal\bfinancial\bmark\fts,

factors\bthat\baff\fct\bfarm\frs’\bconfid\fnc\f.\bTh\fs\f\bfactors\binclud\f social\band\bpolitical\bstability,\bfunding\bsourc\fs\band\bcosts,\bass\ft\band

d\fmand\bfor\bagricultural\bproducts,\bworld\bgrain\bstocks,\bw\fath\fr obligation\bvalu\fs,\bcustom\frs,\bsuppli\frs,\bd\fmand\bfor\b\fquipm\fnt,

conditions\b(including\bits\b\fff\fcts\bon\btim\fly\bplanting\band and\bcompany\bop\frations\band\br\fsults.\bTh\f\bcompany’s\binv\fstm\fnt

harv\fsting),\bsoil\bconditions\b(including\blow\bsubsoil\bmoistur\f), manag\fm\fnt\bactiviti\fs\bcould\bb\f\bimpair\fd\bby\bchang\fs\bin\bth\f

harv\fst\byi\flds,\bpric\fs\bfor\bcommoditi\fs\band\bliv\fstock,\bcrop\band \fquity,\bbond\band\both\fr\bfinancial\bmark\fts,\bwhich\bwould\bn\fgativ\fly

liv\fstock\bproduction\b\fxp\fns\fs,\bavailability\bof\btransport\bfor\bcrops, aff\fct\b\farnings.

th\f\bgrowth\band\bsustainability\bof\bnon-food\bus\fs\bfor\bsom\f\bcrops Additional\bfactors\bthat\bcould\bmat\frially\baff\fct\bth\f

(including\b\fthanol\band\bbiodi\fs\fl\bproduction),\br\fal\b\fstat\f\bvalu\fs, company’s\bop\frations,\bacc\fss\bto\bcapital,\b\fxp\fns\fs\band\br\fsults

availabl\f\bacr\fag\f\bfor\bfarming,\bth\f\bland\bown\frship\bpolici\fs\bof includ\f\bchang\fs\bin\band\bth\f\bimpact\bof\bgov\frnm\fntal\btrad\f,

various\bgov\frnm\fnts,\bchang\fs\bin\bgov\frnm\fnt\bfarm\bprograms\band banking,\bmon\ftary\band\bfiscal\bpolici\fs,\bincluding\bfinancial

polici\fs\b(including\bthos\f\bin\bArg\fntina,\bBrazil,\bChina,\bth\f\bEurop\fan r\fgulatory\br\fform\band\bits\b\fff\fcts\bon\bth\f\bconsum\fr\bfinanc\f

Union,\bIndia,\bRussia\band\bth\f\bU.S.),\bint\frnational\br\faction\bto\bsuch

21 industry,\bd\frivativ\fs,\bfunding\bcosts\band\both\fr\bar\fas,\bandrat\fs,\band\bcomp\fnsation,\br\ftir\fm\fnt\band\bmortality\brat\fs\bwhich

gov\frnm\fntal\bprograms,\bpolici\fs,\btariffs\band\bsanctions\bin impact\br\ftir\fm\fnt\bb\fn\ffit\bcosts,\band\bsignificant\bchang\fs\bin

particular\bjurisdictions\bor\bfor\bth\f\bb\fn\ffit\bof\bc\frtain\bindustri\fs\bor h\falth\bcar\f\bcosts\bincluding\bthos\f\bwhich\bmay\br\fsult\bfrom

s\fctors\b(including\bprot\fctionist,\b\fconomic,\bpunitiv\f\band gov\frnm\fntal\baction.

\fxpropriation\bpolici\fs\band\btrad\f\band\blic\fnsing\br\fstrictions\bthat Th\f\bliquidity\band\bongoing\bprofitability\bof\bJohn\bD\f\fr\f\bCapital

could\bdisrupt\bint\frnational\bcomm\frc\f);\bactions\bby\bth\f\bU.S. Corporation\band\both\fr\bcr\fdit\bsubsidiari\fs\bd\fp\fnd\blarg\fly\bon

F\fd\fral\bR\fs\frv\f\bBoard\band\both\fr\bc\fntral\bbanks;\bactions\bby\bth\f tim\fly\bacc\fss\bto\bcapital\bin\bord\fr\bto\bm\f\ft\bfutur\f\bcash\bflow

U.S.\bS\fcuriti\fs\band\bExchang\f\bCommission\b(SEC),\bth\f\bU.S. r\fquir\fm\fnts,\bto\bfund\bop\frations\band\bcosts\bassociat\fd\bwith

Commodity\bFutur\fs\bTrading\bCommission\band\both\fr\bfinancial \fngaging\bin\bdiv\frsifi\fd\bfunding\bactiviti\fs,\band\bto\bfund\bpurchas\fs

r\fgulators;\bactions\bby\b\fnvironm\fntal,\bh\falth\band\bsaf\fty of\bth\f\bcompany’s\bproducts.\bIf\bg\fn\fral\b\fconomic\bconditions

r\fgulatory\bag\fnci\fs,\bincluding\bthos\f\br\flat\fd\bto\b\fngin\f\b\fmissions, d\ft\friorat\f\bor\bcapital\bmark\fts\bb\fcom\f\bvolatil\f,\bfunding\bcould\bb\f

carbon\band\both\fr\bgr\f\fnhous\f\bgas\b\fmissions,\bnois\f\band\bth\f unavailabl\f\bor\binsuffici\fnt.\bAdditionally,\bcustom\fr\bconfid\fnc\f

\fff\fcts\bof\bclimat\f\bchang\f;\bchang\fs\bin\blabor\br\fgulations;\bchang\fs l\fv\fls\bmay\br\fsult\bin\bd\fclin\fs\bin\bcr\fdit\bapplications\band\bincr\fas\fs

to\baccounting\bstandards;\bchang\fs\bin\btax\brat\fs,\b\fstimat\fs,\band in\bd\flinqu\fnci\fs\band\bd\ffault\brat\fs,\bwhich\bcould\bmat\frially\bimpact

r\fgulations\band\bcompany\bactions\br\flat\fd\bth\fr\fto;\bcomplianc\f writ\f-offs\band\bprovisions\bfor\bcr\fdit\bloss\fs.

with\bU.S.\band\bfor\fign\blaws\bwh\fn\b\fxpanding\bto\bn\fw\bmark\fts\band

Th\f\bcompany’s\boutlook\bis\bbas\fd\bupon\bassumptions\br\flating

oth\frwis\f;\band\bactions\bby\both\fr\br\fgulatory\bbodi\fs\bincluding

to\bth\f\bfactors\bd\fscrib\fd\babov\f,\bwhich\bar\f\bsom\ftim\fs\bbas\fd\bupon

chang\fs\bin\blaws\band\br\fgulations\baff\fcting\bth\f\bs\fctors\bin\bwhich

\fstimat\fs\band\bdata\bpr\fpar\fd\bby\bgov\frnm\fnt\bag\fnci\fs.\bSuch

th\f\bcompany\bop\frat\fs.\bTrad\f,\bfinancial\band\both\fr\bsanctions

\fstimat\fs\band\bdata\bar\f\boft\fn\br\fvis\fd.\bTh\f\bcompany,\b\fxc\fpt\bas

impos\fd\bby\bth\f\bU.S.,\bth\f\bEurop\fan\bUnion,\bRussia\band\both\fr

r\fquir\fd\bby\blaw,\bund\frtak\fs\bno\bobligation\bto\bupdat\f\bor\br\fvis\f\bits

countri\fs\bcould\bn\fgativ\fly\bimpact\bcompany\bass\fts,\bop\frations,

outlook,\bwh\fth\fr\bas\ba\br\fsult\bof\bn\fw\bd\fv\flopm\fnts\bor\both\frwis\f.

sal\fs,\bfor\fcasts\band\br\fsults.\bCustom\fr\band\bcompany\bop\frations

Furth\fr\binformation\bconc\frning\bth\f\bcompany\band\bits\bbusin\fss\fs,

and\br\fsults\balso\bcould\bb\f\baff\fct\fd\bby\bchang\fs\bto\bGPS\bradio

including\bfactors\bthat\bpot\fntially\bcould\bmat\frially\baff\fct\bth\f

fr\fqu\fncy\bbands\bor\bth\fir\bp\frmitt\fd\bus\fs.

company’s\bfinancial\br\fsults,\bis\binclud\fd\bin\bth\f\bcompany’s\both\fr

Oth\fr\bfactors\bthat\bcould\bmat\frially\baff\fct\br\fsults\binclud\f filings\bwith\bth\f\bSEC.

production,\bd\fsign\band\bt\fchnological\binnovations\band

2014 \fOMPARED WITH 2013

difficulti\fs,\bincluding\bcapacity\band\bsupply\bconstraints\band\bpric\fs;

th\f\bavailability\band\bpric\fs\bof\bstrat\fgically\bsourc\fd\bmat\frials,

\fON\bOLIDATED RE\bULT\b

compon\fnts\band\bwhol\f\bgoods;\bd\flays\bor\bdisruptions\bin\bth\f

Worldwid\f\bn\ft\bincom\f\battributabl\f\bto\bD\f\fr\f\b&\bCompany\bin\b2014

company’s\bsupply\bchain\bor\bth\f\bloss\bof\bliquidity\bby\bsuppli\frs;

was\b$3,162\bmillion,\bor\b$8.63\bp\fr\bshar\f\bdilut\fd\b($8.71\bbasic),

disruptions\bof\binfrastructur\fs\bthat\bsupport\bcommunications,

compar\fd\bwith\b$3,537\bmillion,\bor\b$9.09\bp\fr\bshar\f\bdilut\fd\b($9.18

op\frations\bor\bdistribution;\bth\f\bfailur\f\bof\bsuppli\frs\bto\bcomply\bwith

basic),\bin\b2013.\bN\ft\bsal\fs\band\br\fv\fnu\fs\bd\fcr\fas\fd\b5\bp\frc\fnt\bto

laws,\br\fgulations\band\bcompany\bpolicy\bp\frtaining\bto\b\fmploym\fnt,

$36,067\bmillion\bin\b2014,\bcompar\fd\bwith\b$37,795\bmillion\bin\b2013.

human\brights,\bh\falth,\bsaf\fty,\bth\f\b\fnvironm\fnt\band\both\fr\b\fthical

N\ft\bsal\fs\bof\bth\f\b\fquipm\fnt\bop\frations\bd\fcr\fas\fd\b6\bp\frc\fnt\bin

busin\fss\bpractic\fs;\b\fv\fnts\bthat\bdamag\f\bth\f\bcompany’s

2014\bto\b$32,961\bmillion\bfrom\b$34,998\bmillion\bin\b2013.\bTh\f\bsal\fs

r\fputation\bor\bbrand;\bsignificant\binv\fstigations,\bclaims,\blawsuits\bor

d\fcr\fas\f\bwas\blarg\fly\bdu\f\bto\blow\fr\bshipm\fnt\bvolum\fs\band\ban

oth\fr\bl\fgal\bproc\f\fdings;\bstart-up\bof\bn\fw\bplants\band\bn\fw

unfavorabl\f\bfor\fign\bcurr\fncy\btranslation\b\fff\fct\bof\b1\bp\frc\fnt,

products;\bth\f\bsucc\fss\bof\bn\fw\bproduct\binitiativ\fs\band\bcustom\fr

partially\boffs\ft\bby\bpric\f\br\falization\bof\b2\bp\frc\fnt.\bN\ft\bsal\fs\bin\bth\f

acc\fptanc\f\bof\bn\fw\bproducts;\bchang\fs\bin\bcustom\fr\bproduct

U.S.\band\bCanada\bd\fcr\fas\fd\b8\bp\frc\fnt\bin\b2014.\bN\ft\bsal\fs\boutsid\f

pr\ff\fr\fnc\fs\band\bsal\fs\bmix\bwh\fth\fr\bas\ba\br\fsult\bof\bchang\fs\bin

th\f\bU.S.\band\bCanada\bd\fcr\fas\fd\b3\bp\frc\fnt\bin\b2014,\bwhich

\fquipm\fnt\bd\fsign\bto\bm\f\ft\bgov\frnm\fnt\br\fgulations\bor\bfor\both\fr

includ\fd\ban\bunfavorabl\f\b\fff\fct\bof\b1\bp\frc\fnt\bfor\bfor\fign\bcurr\fncy

r\fasons;\bgaps\bor\blimitations\bin\brural\bbroadband\bcov\frag\f,

translation.

capacity\band\bsp\f\fd\bn\f\fd\fd\bto\bsupport\bt\fchnology\bsolutions;\boil

Worldwid\f\b\fquipm\fnt\bop\frations\bhad\ban\bop\frating\bprofit

and\b\fn\frgy\bpric\fs,\bsuppli\fs\band\bvolatility;\bth\f\bavailability\band\bcost

of\b$4,297\bmillion\bin\b2014,\bcompar\fd\bwith\b$5,058\bmillion\bin

of\bfr\fight;\bactions\bof\bcomp\ftitors\bin\bth\f\bvarious\bindustri\fs\bin

2013.\bTh\f\bop\frating\bprofit\bd\fclin\f\bwas\bdu\f\bprimarily\bto\bth\f

which\bth\f\bcompany\bcomp\ft\fs,\bparticularly\bpric\f\bdiscounting;

impact\bof\blow\fr\bshipm\fnt\band\bproduction\bvolum\fs,\ba\bl\fss

d\fal\fr\bpractic\fs\b\fsp\fcially\bas\bto\bl\fv\fls\bof\bn\fw\band\bus\fd\bfi\fld

favorabl\f\bproduct\bmix,\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign

inv\fntori\fs;\blabor\br\flations\band\bcontracts;\bacquisitions\band

curr\fncy\b\fxchang\f\band\bhigh\fr\bproduction\bcosts\bprimarily\br\flat\fd

div\fstitur\fs\bof\bbusin\fss\fs;\bth\f\bint\fgration\bof\bn\fw\bbusin\fss\fs;\bth\f

to\bth\f\bimpact\bof\b\fngin\f\b\fmission\bprograms.\bTh\f\bd\fclin\f\bwas

impl\fm\fntation\bof\borganizational\bchang\fs;\bdifficulti\fs\br\flat\fd\bto

partially\boffs\ft\bby\bpric\f\br\falization.\bR\fsults\bin\b2014\bw\fr\f\balso

th\f\bconv\frsion\band\bimpl\fm\fntation\bof\b\fnt\frpris\f\br\fsourc\f

aff\fct\fd\bby\bimpairm\fnt\bcharg\fs\bfor\bth\f\bcompany’s\bJohn\bD\f\fr\f

planning\bsyst\fms\bthat\bdisrupt\bbusin\fss,\bn\fgativ\fly\bimpact\bsupply

Landscap\fs\band\bJohn\bD\f\fr\f\bWat\fr\bop\frations\b(s\f\f\bNot\fs\b4

or\bdistribution\br\flationships\bor\bcr\fat\f\bhigh\fr\bthan\b\fxp\fct\fd

and\b5).

costs;\bs\fcurity\bbr\fach\fs\band\both\fr\bdisruptions\bto\bth\f\bcompany’s

information\bt\fchnology\binfrastructur\f;\band\bchang\fs\bin\bcompany

Th\f\b\fquipm\fnt\bop\frations’\bn\ft\bincom\f\bwas\b$2,548\bmillion

d\fclar\fd\bdivid\fnds\band\bcommon\bstock\bissuanc\fs\band in\b2014,\bcompar\fd\bwith\b$2,974\bmillion\bin\b2013.\bTh\f\bsam\f

r\fpurchas\fs. op\frating\bfactors\bm\fntion\fd\babov\f\baff\fct\fd\bth\fs\f\br\fsults.

Company\br\fsults\bar\f\balso\baff\fct\fd\bby\bchang\fs\bin\bth\f\bl\fv\fl N\ft\bincom\f\bof\bth\f\bfinancial\bs\frvic\fs\bop\frations\battributabl\f

and\bfunding\bof\b\fmploy\f\f\br\ftir\fm\fnt\bb\fn\ffits,\bchang\fs\bin\bmark\ft to\bD\f\fr\f\b&\bCompany\bin\b2014\bincr\fas\fd\bto\b$624\bmillion,

valu\fs\bof\binv\fstm\fnt\bass\fts,\bth\f\bl\fv\fl\bof\bint\fr\fst\band\bdiscount

22 compar\fd\bwith\b$565\bmillion\bin\b2013.\bTh\f\bimprov\fm\fnt\bwas\bdu\f offs\ft\bby\bpric\f\br\falization.\bAs\bpr\fviously\bnot\fd,\br\fsults\bin\b2013

primarily\bto\bgrowth\bin\bth\f\bcr\fdit\bportfolio,\ba\bmor\f\bfavorabl\f w\fr\f\baff\fct\fd\bby\bimpairm\fnt\bcharg\fs\bfor\bth\f\bLandscap\fs\band

\fff\fctiv\f\btax\brat\f,\bpartially\boffs\ft\bby\blow\fr\bcrop\binsuranc\f Wat\fr\bop\frations\b(s\f\f\bNot\fs\b4\band\b5).

margins,\bhigh\fr\bs\flling,\badministrativ\f\band\bg\fn\fral\b\fxp\fns\fs\bandWorldwide \fonstruction and Forestry Operations

a\bhigh\fr\bprovision\bfor\bcr\fdit\bloss\fs.\bAdditional\binformation\bis Th\f\bconstruction\band\bfor\fstry\bs\fgm\fnt\bhad\ban\bop\frating\bprofit

pr\fs\fnt\fd\bin\bth\f\bfollowing\bdiscussion\bof\bth\f\b‘‘Worldwid\f of\b$648\bmillion\bin\b2014,\bcompar\fd\bwith\b$378\bmillion\bin\b2013.

Financial\bS\frvic\fs\bOp\frations.’’ N\ft\bsal\fs\bincr\fas\fd\b12\bp\frc\fnt\bin\b2014\bmainly\bas\ba\br\fsult\bof

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was\bdu\f\bprimarily\bto\ba\bl\fss\bfavorabl\f\bproduct\bmix,\bth\f b\fn\ffit\fd\bin\b2014\bfrom\bhigh\fr\bshipm\fnt\bvolum\fs,\blow\fr\bs\flling,

unfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy\b\fxchang\f\band\bhigh\fr administrativ\f\band\bg\fn\fral\b\fxp\fns\fs\band\bpric\f\br\falization,

production\bcosts\blarg\fly\br\flat\fd\bto\b\fngin\f\b\fmission partially\boffs\ft\bby\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign\bcurr\fncy

r\fquir\fm\fnts,\bpartially\boffs\ft\bby\bpric\f\br\falization. \fxchang\f.

Financ\f\band\bint\fr\fst\bincom\f\bincr\fas\fd\bin\b2014\bdu\f\bto\ba Worldwide Financial \bervices Operations

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financing\brat\fs.\bOth\fr\bincom\f\bincr\fas\fd\bdu\f\bprimarily\bto\bhigh\fr $921\bmillion\bin\b2014,\bcompar\fd\bwith\b$870\bmillion\bin\b2013.\bTh\f

insuranc\f\bpr\fmiums\band\bs\frvic\f\br\fv\fnu\f.\bR\fs\farch\band r\fsults\bw\fr\f\bhigh\fr\bdu\f\bprimarily\bto\bgrowth\bin\bth\f\bcr\fdit

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S\flling,\badministrativ\f\band\bg\fn\fral\b\fxp\fns\fs\bd\fcr\fas\fd\bdu\f provision\bfor\bcr\fdit\bloss\fs.\bTotal\br\fv\fnu\fs\bof\bth\f\bfinancial

primarily\bto\bth\f\bd\fconsolidation\bof\bLandscap\fs\band\bth\f\bsal\f\bof s\frvic\fs\bop\frations,\bincluding\bint\frcompany\br\fv\fnu\fs,\bincr\fas\fd

th\f\bWat\fr\bop\frations\b(s\f\f\bNot\f\b4).\bInt\fr\fst\b\fxp\fns\f\bd\fcr\fas\fd 9\bp\frc\fnt\bin\b2014,\bprimarily\br\ffl\fcting\bth\f\blarg\fr\bportfolio.\bTh\f

du\f\bto\blow\fr\bav\frag\f\bborrowing\brat\fs,\bpartially\boffs\ft\bby\bhigh\fr av\frag\f\bbalanc\f\bof\br\fc\fivabl\fs\band\bl\fas\fs\bfinanc\fd\bwas

av\frag\f\bborrowings.\bOth\fr\bop\frating\b\fxp\fns\fs\bincr\fas\fd\bdu\f 13\bp\frc\fnt\bhigh\fr\bin\b2014,\bcompar\fd\bwith\b2013.\bInt\fr\fst

primarily\bto\bhigh\fr\bd\fpr\fciation\bof\b\fquipm\fnt\bon\bop\frating \fxp\fns\f\bd\fcr\fas\fd\b12\bp\frc\fnt\bin\b2014\bas\ba\br\fsult\bof\blow\fr

l\fas\fs,\bhigh\fr\binsuranc\f\bclaims\band\bth\f\bwrit\f-down\bto\br\falizabl\f av\frag\f\bborrowing\brat\fs,\bpartially\boffs\ft\bby\bhigh\fr\bav\frag\f

valu\f\band\bsal\f\bof\bth\f\bWat\fr\bop\frations,\bpartially\boffs\ft\bby borrowings.\bTh\f\bfinancial\bs\frvic\fs\bop\frations’\bratio\bof\b\farnings

impairm\fnt\bcharg\fs\bin\b2013\bfor\bth\f\bLandscap\fs\bop\frations\b(s\f\f to\bfix\fd\bcharg\fs\bwas\b3.37\bto\b1\bin\b2014,\bcompar\fd\bwith\b2.90\bto\b1

Not\fs\b4\band\b5). in\b2013.

Th\f\bcompany\bhas\bs\fv\fral\bd\ffin\fd\bb\fn\ffit\bp\fnsion\bplans\band Equipment Operations in U.\b. and \fanada

d\ffin\fd\bb\fn\ffit\bh\falth\bcar\f\band\blif\f\binsuranc\f\bplans.\bTh\f Th\f\b\fquipm\fnt\bop\frations\bin\bth\f\bU.S.\band\bCanada\bhad\ban

company’s\bpostr\ftir\fm\fnt\bb\fn\ffit\bcosts\bfor\bth\fs\f\bplans\bin\b2014 op\frating\bprofit\bof\b$3,311\bmillion\bin\b2014,\bcompar\fd\bwith

w\fr\f\b$432\bmillion,\bcompar\fd\bwith\b$575\bmillion\bin\b2013.\bTh\f $4,062\bmillion\bin\b2013.\bTh\f\bd\fclin\f\bwas\bdu\f\bprimarily\bto\bth\f

long-t\frm\b\fxp\fct\fd\br\fturn\bon\bplan\bass\fts,\bwhich\bis\br\ffl\fct\fd\bin impact\bof\blow\fr\bshipm\fnt\band\bproduction\bvolum\fs,\ba\bl\fss

th\fs\f\bcosts,\bwas\ban\b\fxp\fct\fd\bgain\bof\b7.5\bp\frc\fnt\bin\b2014\band favorabl\f\bproduct\bmix\band\bhigh\fr\bproduction\bcosts\bprimarily

7.8\bp\frc\fnt\bin\b2013,\bor\b$848\bmillion\bin\b2014\band\b$862\bmillion\bin r\flat\fd\bto\b\fngin\f\b\fmission\bprograms.\bTh\f\bd\fclin\f\bwas\bpartially

2013.\bTh\f\bactual\br\fturn\bwas\ba\bgain\bof\b$1,213\bmillion\bin\b2014 offs\ft\bby\bpric\f\br\falization.\bR\fsults\bin\b2013\bw\fr\f\balso\baff\fct\fd\bby

and\b$1,470\bmillion\bin\b2013.\bTotal\bcompany\bcontributions\bto\bth\f impairm\fnt\bcharg\fs\bfor\bth\f\bLandscap\fs\band\bWat\fr\bop\frations.

plans\bw\fr\f\b$138\bmillion\bin\b2014\band\b$338\bmillion\bin\b2013,\bwhich N\ft\bsal\fs\bd\fcr\fas\fd\b8\bp\frc\fnt\bdu\f\bprimarily\bto\blow\fr\bshipm\fnt

includ\f\bdir\fct\bb\fn\ffit\bpaym\fnts\bfor\bunfund\fd\bplans.\bTh\fs\f volum\fs,\bpartially\boffs\ft\bby\bpric\f\br\falization.\bTh\f\bphysical\bvolum\f

contributions\balso\binclud\fd\bvoluntary\bcontributions\bto\bplan of\bsal\fs\bd\fcr\fas\fd\b9\bp\frc\fnt,\bcompar\fd\bwith\b2013.

ass\fts\bof\b$5\bmillion\bin\b2014\band\b$227\bmillion\bin\b2013. Equipment Operations outside U.\b. and \fanada

BU\bINE\b\b \bEGMENT AND GEOGRAPHI\f AREA RE\bULT\b Th\f\b\fquipm\fnt\bop\frations\boutsid\f\bth\f\bU.S.\band\bCanada\bhad\ban

op\frating\bprofit\bof\b$986\bmillion\bin\b2014,\bcompar\fd\bwith

Worldwide Agriculture and Turf Operations $996\bmillion\bin\b2013.\bTh\f\bd\fcr\fas\f\bwas\bdu\f\bprimarily\bto\bth\f

Th\f\bagricultur\f\band\bturf\bs\fgm\fnt\bhad\ban\bop\frating\bprofit\bof impact\bof\blow\fr\bshipm\fnt\band\bproduction\bvolum\fs,\ba\bl\fss

$3,649\bmillion\bin\b2014,\bcompar\fd\bwith\b$4,680\bmillion\bin\b2013. favorabl\f\bproduct\bmix,\bth\f\bunfavorabl\f\b\fff\fcts\bof\bfor\fign

N\ft\bsal\fs\bd\fcr\fas\fd\b9\bp\frc\fnt\bin\b2014\bdu\f\blarg\fly\bto\blow\fr curr\fncy\b\fxchang\f,\bhigh\fr\bproduction\bcosts\band\ban\bimpairm\fnt

shipm\fnt\bvolum\fs,\bth\f\bpr\fviously\bannounc\fd\bsal\fs\bof\bth\f charg\f\bfor\bth\f\bChina\bop\frations\b(s\f\f\bNot\f\b5),\bpartially\boffs\ft\bby

company’s\bLandscap\fs\band\bWat\fr\bop\frations\band\bth\f pric\f\br\falization.\bR\fsults\bin\b2013\bw\fr\f\balso\baff\fct\fd\bby

unfavorabl\f\b\fff\fcts\bof\bcurr\fncy\btranslation.\bPartially\boffs\ftting impairm\fnt\bcharg\fs\bfor\bth\f\bWat\fr\bop\frations.\bN\ft\bsal\fs\bw\fr\f

th\fs\f\bfactors\bwas\bpric\f\br\falization.\bTh\f\bd\fcr\fas\f\bin\bop\frating 3\bp\frc\fnt\blow\fr\bprimarily\br\ffl\fcting\bd\fcr\fas\fd\bshipm\fnt\bvolum\fs

profit\bwas\bdriv\fn\bmainly\bby\blow\fr\bshipm\fnt\band\bproduction and\bth\f\b\fff\fct\bof\bfor\fign\bcurr\fncy\btranslation,\bpartially\boffs\ft\bby

volum\fs,\ba\bl\fss\bfavorabl\f\bproduct\bmix,\bth\f\bunfavorabl\f\b\fff\fcts\bof pric\f\br\falization.\bTh\f\bphysical\bvolum\f\bof\bsal\fs\bd\fcr\fas\fd

for\fign\bcurr\fncy\b\fxchang\f\band\bhigh\fr\bproduction\bcosts\bprimarily 5\bp\frc\fnt,\bcompar\fd\bwith\b2013.

r\flat\fd\bto\b\fngin\f\b\fmission\bprograms.\bTh\f\bd\fclin\f\bwas\bpartially

23 \fAPITAL RE\bOUR\fE\b AND LIQUIDITYof\bth\f\btotal\bcash\band\bcash\b\fquival\fnts\band\bmark\ftabl\f\bs\fcuriti\fs

h\fld\bby\bfor\fign\bsubsidiari\fs,\bin\bwhich\b\farnings\bar\f\bconsid\fr\fd

Th\f\bdiscussion\bof\bcapital\br\fsourc\fs\band\bliquidity\bhas\bb\f\fn

ind\ffinit\fly\br\finv\fst\fd,\bwas\b$1,588\bmillion\band\b$1,025\bmillion\bat

organiz\fd\bto\br\fvi\fw\bs\fparat\fly,\bwh\fr\f\bappropriat\f,\bth\f

Octob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly.

company’s\bconsolidat\fd\btotals,\b\fquipm\fnt\bop\frations\band

financial\bs\frvic\fs\bop\frations. Li\fes of Credit.Th\f\bcompany\balso\bhas\bacc\fss\bto\bbank\blin\fs

of\bcr\fdit\bwith\bvarious\bbanks\bthroughout\bth\f\bworld.\bWorldwid\f

\fON\bOLIDATED

lin\fs\bof\bcr\fdit\btotal\fd\b$7,205\bmillion\bat\bOctob\fr\b31,\b2015,

Positiv\f\bcash\bflows\bfrom\bconsolidat\fd\bop\frating\bactiviti\fs\bin

$4,031\bmillion\bof\bwhich\bw\fr\f\bunus\fd.\bFor\bth\f\bpurpos\f\bof

2015\bw\fr\f\b$3,740\bmillion.\bThis\br\fsult\fd\bprimarily\bfrom\bn\ft

computing\bunus\fd\bcr\fdit\blin\fs,\bcomm\frcial\bpap\fr\band\bshort-t\frm

incom\f\badjust\fd\bfor\bnon-cash\bprovisions,\ba\bd\fcr\fas\f\bin

bank\bborrowings,\b\fxcluding\bs\fcur\fd\bborrowings\band\bth\f\bcurr\fnt

r\fc\fivabl\fs\br\flat\fd\bto\bsal\fs,\ba\bchang\f\bin\bth\f\br\ftir\fm\fnt\bb\fn\ffits

portion\bof\blong-t\frm\bborrowings,\bw\fr\f\bprimarily\bconsid\fr\fd\bto

adjustm\fnt\band\ba\bd\fcr\fas\f\bin\binsuranc\f\br\fc\fivabl\fs\bprior\bto\bth\f

constitut\f\butilization.\bInclud\fd\bin\bth\f\btotal\bcr\fdit\blin\fs\bat

Crop\bInsuranc\f\bop\frations\bsal\f,\bwhich\bw\fr\f\bpartially\boffs\ft\bby\ban

Octob\fr\b31,\b2015\bw\fr\f\blong-t\frm\bcr\fdit\bfacility\bagr\f\fm\fnts\bof

incr\fas\f\bin\binv\fntori\fs,\bprimarily\br\flat\fd\bto\b\fquipm\fnt

$2,900\bmillion,\b\fxpiring\bin\bApril\b2019,\band\b$2,900\bmillion,

transf\frr\fd\bto\bop\frating\bl\fas\fs\b(s\f\f\bNot\f\b6),\ba\bd\fcr\fas\f\bin

\fxpiring\bin\bApril\b2020.\bTh\fs\f\bcr\fdit\bagr\f\fm\fnts\br\fquir\f\bJohn

accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs,\band\ba\bchang\f\bin

D\f\fr\f\bCapital\bCorporation\b(Capital\bCorporation)\bto\bmaintain\bits

accru\fd\bincom\f\btax\fs\bpayabl\f/r\fc\fivabl\f.\bCash\boutflows\bfrom

consolidat\fd\bratio\bof\b\farnings\bto\bfix\fd\bcharg\fs\bat\bnot\bl\fss\bthan

inv\fsting\bactiviti\fs\bw\fr\f\b$1,059\bmillion\bin\b2015,\bdu\f\bprimarily\bto

1.05\bto\b1\bfor\b\fach\bfiscal\bquart\fr\band\bth\f\bratio\bof\bs\fnior\bd\fbt,

th\f\bcost\bof\br\fc\fivabl\fs\b(\fxcluding\br\fc\fivabl\fs\br\flat\fd\bto\bsal\fs)

\fxcluding\bs\fcuritization\bind\fbt\fdn\fss,\bto\bcapital\bbas\f\b(total

and\bcost\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\b\fxc\f\fding\bth\f

subordinat\fd\bd\fbt\band\bstockhold\fr’s\b\fquity\b\fxcluding

coll\fctions\bof\br\fc\fivabl\fs\band\bth\f\bproc\f\fds\bfrom\bsal\fs\bof

accumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss))\bat\bnot\bmor\f

\fquipm\fnt\bon\bop\frating\bl\fas\fs\bby\b$1,160\bmillion,\bpurchas\fs\bof

than\b11\bto\b1\bat\bth\f\b\fnd\bof\bany\bfiscal\bquart\fr.\bTh\f\bcr\fdit

prop\frty\band\b\fquipm\fnt\bof\b$694\bmillion,\bpartially\boffs\ft\bby

agr\f\fm\fnts\balso\br\fquir\f\bth\f\b\fquipm\fnt\bop\frations\bto\bmaintain\ba

proc\f\fds\bfrom\bmaturiti\fs\band\bsal\fs\b\fxc\f\fding\bpurchas\fs\bof

ratio\bof\btotal\bd\fbt\bto\btotal\bcapital\b(total\bd\fbt\band\bstockhold\frs’

mark\ftabl\f\bs\fcuriti\fs\bby\b$706\bmillion\band\bproc\f\fds\bfrom\bsal\fs\bof

\fquity\b\fxcluding\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f

busin\fss\fs,\bn\ft\bof\bcash\bsold,\bof\b$149\bmillion.\bCash\boutflows\bfrom

(loss))\bof\b65\bp\frc\fnt\bor\bl\fss\bat\bth\f\b\fnd\bof\b\fach\bfiscal\bquart\fr.

financing\bactiviti\fs\bw\fr\f\b$2,119\bmillion\bin\b2015\bdu\f\bprimarily\bto

Und\fr\bthis\bprovision,\bth\f\bcompany’s\b\fxc\fss\b\fquity\bcapacity\band

r\fpurchas\fs\bof\bcommon\bstock\bof\b$2,771\bmillion\band\bdivid\fnds

r\ftain\fd\b\farnings\bbalanc\f\bfr\f\f\bof\br\fstriction\bat\bOctob\fr\b31,\b2015

paid\bof\b$816\bmillion,\bpartially\boffs\ft\bby\ban\bincr\fas\f\bin\bborrowings

was\b$8,835\bmillion.\bAlt\frnativ\fly\bund\fr\bthis\bprovision,\bth\f

of\b$1,349\bmillion.\bCash\band\bcash\b\fquival\fnts\bincr\fas\fd

\fquipm\fnt\bop\frations\bhad\bth\f\bcapacity\bto\bincur\badditional\bd\fbt

$375\bmillion\bduring\b2015.

of\b$16,408\bmillion\bat\bOctob\fr\b31,\b2015.\bAll\bof\bth\fs\f

Ov\fr\b th\f\b last\b thr\f\f\b y\fars,\b op\frating\b activiti\fs\b hav\f\b provid\fd r\fquir\fm\fnts\bof\bth\f\bcr\fdit\bagr\f\fm\fnts\bhav\f\bb\f\fn\bm\ft\bduring\bth\f

an\b aggr\fgat\f\b of\b $10,521\b million\b in\b cash.\b In\b addition,\b incr\fas\fs\b in p\friods\binclud\fd\bin\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.

borrowings\b w\fr\f\b $6,986\b million,\b proc\f\fds\b from\b maturiti\fs\b and

De\bt Rati\fgs.To\bacc\fss\bpublic\bd\fbt\bcapital\bmark\fts,\bth\f

sal\fs\b \fxc\f\fd\fd\b purchas\fs\b of\b mark\ftabl\f\b s\fcuriti\fs\b by\b $931\b million,

company\br\fli\fs\bon\bcr\fdit\brating\bag\fnci\fs\bto\bassign\bshort-t\frm

proc\f\fds\b from\b sal\fs\b of\b busin\fss\fs\b w\fr\f\b $517\b million\b and\b proc\f\fds

and\blong-t\frm\bcr\fdit\bratings\bto\bth\f\bcompany’s\bs\fcuriti\fs\bas\ban

from\b issuanc\f\b of\b common\b stock\b (r\fsulting\b from\b th\f\b \fx\frcis\f\b of

indicator\bof\bcr\fdit\bquality\bfor\bfix\fd\bincom\f\binv\fstors.\bA\bs\fcurity

stock\b options)\b w\fr\f\b $496\b million.\b Th\f\b aggr\fgat\f\b amount\b of\b th\fs\f

rating\bis\bnot\ba\br\fcomm\fndation\bby\bth\f\brating\bag\fncy\bto\bbuy,\bs\fll

cash\b flows\b was\b us\fd\b mainly\b to\b r\fpurchas\f\b common\b stock\b of

or\bhold\bcompany\bs\fcuriti\fs.\bA\bcr\fdit\brating\bag\fncy\bmay\bchang\f

$7,033\b million,\b acquir\f\b r\fc\fivabl\fs\b (\fxcluding\b r\fc\fivabl\fs\b r\flat\fd

or\bwithdraw\bcompany\bratings\bbas\fd\bon\bits\bass\fssm\fnt\bof\bth\f

to\b sal\fs)\b and\b \fquipm\fnt\b on\b op\frating\b l\fas\fs\b that\b \fxc\f\fd\fd

company’s\bcurr\fnt\band\bfutur\f\bability\bto\bm\f\ft\bint\fr\fst\band

coll\fctions\b of\b r\fc\fivabl\fs\b and\b th\f\b proc\f\fds\b from\b sal\fs\b of

principal\br\fpaym\fnt\bobligations.\bEach\bag\fncy’s\brating\bshould\bb\f

\fquipm\fnt\b on\b op\frating\b l\fas\fs\b by\b $6,804\b million,\b purchas\f

\fvaluat\fd\bind\fp\fnd\fntly\bof\bany\both\fr\brating.\bLow\fr\bcr\fdit\bratings

prop\frty\b and\b \fquipm\fnt\b of\b $2,901\b million\b and\b pay\b divid\fnds\b of

g\fn\frally\br\fsult\bin\bhigh\fr\bborrowing\bcosts,\bincluding\bcosts\bof

$2,355\b million.\b Cash\b and\b cash\b \fquival\fnts\b d\fcr\fas\fd\b $490\b million

d\frivativ\f\btransactions,\band\br\fduc\fd\bacc\fss\bto\bd\fbt\bcapital

ov\fr\b th\f\b thr\f\f-y\far\b p\friod.

mark\fts.\bTh\f\bs\fnior\blong-t\frm\band\bshort-t\frm\bd\fbt\bratings\band

Th\f\bcompany\bhas\bacc\fss\bto\bmost\bglobal\bmark\fts\bat outlook\bcurr\fntly\bassign\fd\bto\buns\fcur\fd\bcompany\bs\fcuriti\fs\bby

r\fasonabl\f\bcosts\band\b\fxp\fcts\bto\bhav\f\bsuffici\fnt\bsourc\fs\bof\bglobal th\f\brating\bag\fnci\fs\b\fngag\fd\bby\bth\f\bcompany\bar\f\bas\bfollows:

funding\band\bliquidity\bto\bm\f\ft\bits\bfunding\bn\f\fds.\bTh\f\bcompany’s

\fxposur\fs\bto\br\fc\fivabl\fs\bfrom\bcustom\frs\bin\bEurop\fan\bcountri\fs

S\fnior \fxp\fri\fncing\b\fconomic\bstrains\bar\f\bnot\bsignificant.\bSourc\fs\bof Long-T\frm Short-T\frm Outlook liquidity\bfor\bth\f\bcompany\binclud\f\bcash\band\bcash\b\fquival\fnts, Moody’s\bInv\fstors\bS\frvic\f,\bInc. ....... A2Prim\f-1 Stabl\f mark\ftabl\f\bs\fcuriti\fs,\bfunds\bfrom\bop\frations,\bth\f\bissuanc\f\bof Standard\b&\bPoor’s........................ A A-1 Stabl\f comm\frcial\bpap\fr\band\bt\frm\bd\fbt,\bth\f\bs\fcuritization\bof\br\ftail

not\fs\b(both\bpublic\band\bprivat\f\bmark\fts)\band\bcommitt\fd\band

Trad\f\baccounts\band\bnot\fs\br\fc\fivabl\f\bprimarily\baris\f\bfrom

uncommitt\fd\bbank\blin\fs\bof\bcr\fdit.\bTh\f\bcompany’s\bcomm\frcial

sal\fs\bof\bgoods\bto\bind\fp\fnd\fnt\bd\fal\frs.\bTrad\f\br\fc\fivabl\fs

pap\fr\boutstanding\bat\bOctob\fr\b31,\b2015\band\b2014\bwas

d\fcr\fas\fd\bby\b$227\bmillion\bin\b2015\bdu\f\bprimarily\bto\bfor\fign

$2,968\bmillion\band\b$2,633\bmillion,\br\fsp\fctiv\fly,\bwhil\f\bth\f\btotal

curr\fncy\btranslation\band\blow\fr\bagricultur\f\band\bturf\bshipm\fnt

cash\band\bcash\b\fquival\fnts\band\bmark\ftabl\f\bs\fcuriti\fs\bposition

volum\fs.\bTh\f\bratio\bof\btrad\f\baccounts\band\bnot\fs\br\fc\fivabl\f\bat

was\b$4,600\bmillion\band\b$5,002\bmillion,\br\fsp\fctiv\fly.\bTh\f\bamount

24 Octob\fr\b31\bto\bfiscal\by\far\bn\ft\bsal\fs\bwas\b12\bp\frc\fnt\bin\b2015\band agricultur\f\bapplications.\bTh\f\btotal\b\fstimat\fd\bpurchas\f\bpric\f,\bn\ft

10\bp\frc\fnt\bin\b2014.\bTotal\bworldwid\f\bagricultur\f\band\bturfof\bcash\bacquir\fd,\bis\b$325\bmillion.\bTh\f\bacquisitions\bar\f\bsubj\fct\bto

r\fc\fivabl\fs\bd\fcr\fas\fd\b$355\bmillion\band\bconstruction\band\bfor\fstry customary\bclosing\bconditions,\bincluding\br\fgulatory\bapprovals,

r\fc\fivabl\fs\bincr\fas\fd\b$128\bmillion.\bTh\f\bcoll\fction\bp\friod\bfor and\bar\f\b\fxp\fct\fd\bto\bclos\f\bin\bth\f\bfirst\bhalf\bof\b2016.

trad\f\br\fc\fivabl\fs\bav\frag\fs\bl\fss\bthan\b12\bmonths.\bTh\f\bp\frc\fntag\f FINAN\fIAL \bERVI\fE\b

of\btrad\f\br\fc\fivabl\fs\boutstanding\bfor\ba\bp\friod\b\fxc\f\fding Th\f\b financial\b s\frvic\fs\b op\frations\b r\fly\b on\b th\fir\b ability\b to\b rais\f

12\bmonths\bwas\b1\bp\frc\fnt\bat\bboth\bOctob\fr\b31,\b2015\band\b2014. substantial\b amounts\b of\b funds\b to\b financ\f\b th\fir\b r\fc\fivabl\f\b and\b l\fas\f

D\f\fr\f\b&\bCompany’s\bstockhold\frs’\b\fquity\bwas\b$6,743\bmillion portfolios.\b Th\fir\b primary\b sourc\fs\b of\b funds\b for\b this\b purpos\f\b ar\f\b a

at\bOctob\fr\b31,\b2015,\bcompar\fd\bwith\b$9,063\bmillion\bat combination\b of\b comm\frcial\b pap\fr,\b t\frm\b d\fbt,\b s\fcuritization\b of

Octob\fr\b31,\b2014.\bTh\f\bd\fcr\fas\f\bof\b$2,320\bmillion\br\fsult\fd\bfrom r\ftail\b not\fs,\b \fquity\b capital\b and\b borrowings\b from\b D\f\fr\f\b &\b Company.

an\bincr\fas\f\bin\btr\fasury\bstock\bof\b$2,663\bmillion,\bdivid\fnds Th\f\bcash\bprovid\fd\bby\bop\frating\bactiviti\fs\band\bfinancing

d\fclar\fd\bof\b$800\bmillion\band\ba\bchang\f\bin\bth\f\bcumulativ\f activiti\fs\bwas\bus\fd\bprimarily\bfor\binv\fsting\bactiviti\fs.\bCash\bflows

translation\badjustm\fnt\bof\b$935\bmillion,\bwhich\bw\fr\f\bpartially from\bth\f\bfinancial\bs\frvic\fs’\bop\frating\bactiviti\fs,\bincluding

offs\ft\bby\bn\ft\bincom\f\battributabl\f\bto\bD\f\fr\f\b&\bCompany\bof int\frcompany\bcash\bflows,\bw\fr\f\b$1,582\bmillion\bin\b2015.\bCash

$1,940\bmillion\band\ban\bincr\fas\f\bin\bcommon\bstock\bof\b$150\bmillion. us\fd\bby\binv\fsting\bactiviti\fs\btotal\fd\b$1,235\bmillion\bin\b2015,\bdu\f

EQUIPMENT OPERATION\b primarily\bto\bth\f\bcost\bof\br\fc\fivabl\fs\b(\fxcluding\btrad\f\band

Th\f\bcompany’s\b\fquipm\fnt\bbusin\fss\fs\bar\f\bcapital\bint\fnsiv\f\band whol\fsal\f)\band\bcost\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\b\fxc\f\fding

ar\f\bsubj\fct\bto\bs\fasonal\bvariations\bin\bfinancing\br\fquir\fm\fnts\bfor coll\fctions\bof\bth\fs\f\br\fc\fivabl\fs\band\bth\f\bproc\f\fds\bfrom\bsal\fs\bof

inv\fntori\fs\band\bc\frtain\br\fc\fivabl\fs\bfrom\bd\fal\frs.\bTh\f\b\fquipm\fnt \fquipm\fnt\bon\bop\frating\bl\fas\fs\bby\b$2,056\bmillion,\bpartially\boffs\ft

op\frations\bs\fll\ba\bsignificant\bportion\bof\bth\fir\btrad\f\br\fc\fivabl\fs\bto by\ba\bd\fcr\fas\f\bin\btrad\f\br\fc\fivabl\fs\band\bwhol\fsal\f\bnot\fs\bof

financial\bs\frvic\fs.\bTo\bth\f\b\fxt\fnt\bn\fc\fssary,\bfunds\bprovid\fd\bfrom $657\bmillion\band\bproc\f\fds\bfrom\bsal\fs\bof\bbusin\fss\fs,\bn\ft\bof\bcash

op\frations\bar\f\bsuppl\fm\fnt\fd\bby\b\fxt\frnal\bfinancing\bsourc\fs. sold,\bof\b$149\bmillion.\bCash\bus\fd\bfor\bfinancing\bactiviti\fs\btotal\fd $262\bmillion\bin\b2015,\br\fpr\fs\fnting\bprimarily\ba\bd\fcr\fas\f\bin

Cash\bprovid\fd\bby\bop\frating\bactiviti\fs\bof\bth\f\b\fquipm\fnt

borrowings\bfrom\bD\f\fr\f\b&\bCompany\bof\b$929\bmillion\band

op\frations\bduring\b2015,\bincluding\bint\frcompany\bcash\bflows,\bwas

divid\fnds\bpaid\bof\b$680\bmillion\bto\bD\f\fr\f\b&\bCompany,\bpartially

$3,055\bmillion\bdu\f\bprimarily\bto\bn\ft\bincom\f\badjust\fd\bfor\bnon-cash

offs\ft\bby\ban\bincr\fas\f\bin\b\fxt\frnal\bborrowings\bof\b$1,346\bmillion.

provisions,\ba\bchang\f\bin\bth\f\br\ftir\fm\fnt\bb\fn\ffits\band\ba\bd\fcr\fas\f\bin

Cash\band\bcash\b\fquival\fnts\bincr\fas\fd\b$44\bmillion.

trad\f\br\fc\fivabl\fs,\bpartially\boffs\ft\bby\ba\bd\fcr\fas\f\bin\baccounts

payabl\f\band\baccru\fd\b\fxp\fns\fs,\band\ba\bchang\f\bin\baccru\fd\bincom\f Ov\fr\bth\f\blast\bthr\f\f\by\fars,\bth\f\bop\frating\bactiviti\fs,\bincluding

tax\fs\bpayabl\f/r\fc\fivabl\f. int\frcompany\bcash\bflows,\bhav\f\bprovid\fd\b$4,147\bmillion\bin\bcash.

In\baddition,\ban\bincr\fas\f\bin\btotal\bborrowings\bof\b$9,125\bmillion,

Ov\fr\bth\f\blast\bthr\f\f\by\fars,\bth\fs\f\bop\frating\bactiviti\fs,

capital\binv\fstm\fnt\bfrom\bD\f\fr\f\b&\bCompany\bof\b$216\bmillion\band

including\bint\frcompany\bcash\bflows,\bhav\f\bprovid\fd\ban\baggr\fgat\f

proc\f\fds\bfrom\bsal\fs\bof\bbusin\fss\fs,\bn\ft\bof\bcash\bsold,\bof

of\b$12,256\bmillion\bin\bcash.

$149\bmillion\bprovid\fd\bcash\binflows.\bTh\fs\f\bamounts\bhav\f\bb\f\fn

Trad\f\br\fc\fivabl\fs\bh\fld\bby\bth\f\b\fquipm\fnt\bop\frations us\fd\bmainly\bto\bfund\br\fc\fivabl\fs\b(\fxcluding\btrad\f\band\bwhol\fsal\f)

d\fcr\fas\fd\bby\b$221\bmillion\bduring\b2015.\bTh\f\b\fquipm\fnt and\b\fquipm\fnt\bon\bop\frating\bl\fas\f\bacquisitions,\bwhich\b\fxc\f\fd\fd

op\frations\bs\fll\ba\bsignificant\bportion\bof\bth\fir\btrad\f\br\fc\fivabl\fs\bto coll\fctions\band\bth\f\bproc\f\fds\bfrom\bsal\fs\bof\b\fquipm\fnt\bon

financial\bs\frvic\fs\b(s\f\f\bpr\fvious\bconsolidat\fd\bdiscussion). op\frating\bl\fas\fs\bby\b$10,415\bmillion,\bfund\ban\bincr\fas\f\bin\btrad\f

r\fc\fivabl\fs\band\bwhol\fsal\f\bnot\fs\bof\b$1,278\bmillion,\bpay\bdivid\fnds

Inv\fntori\fs\bd\fcr\fas\fd\bby\b$393\bmillion\bin\b2015\bdu\f\bprimarily

to\bD\f\fr\f\b&\bCompany\bof\b$1,016\bmillion\band\bpurchas\f\bmark\ftabl\f

to\blow\fr\bagricultur\f\band\bturf\bproduction\bvolum\fs,\blow\fr\bsal\fs

s\fcuriti\fs\bthat\b\fxc\f\fd\fd\bproc\f\fds\bfrom\bmaturiti\fs\band\bsal\fs\bby

and\bcurr\fncy\btranslation.\bMost\bof\bth\fs\f\binv\fntori\fs\bar\f\bvalu\fd\bon

$94\bmillion.\bCash\band\bcash\b\fquival\fnts\bincr\fas\fd\b$518\bmillion

th\f\blast-in,\bfirst-out\b(LIFO)\bm\fthod.\bTh\f\bratios\bof\binv\fntori\fs\bon\ba

ov\fr\bth\f\bthr\f\f-y\far\bp\friod.

first-in,\bfirst-out\b(FIFO)\bbasis\b(s\f\f\bNot\f\b15),\bwhich\bapproximat\fs

curr\fnt\bcost,\bto\bfiscal\by\far\bcost\bof\bsal\fs\bw\fr\f\b26\bp\frc\fnt\band

R\fc\fivabl\fs\b and\b \fquipm\fnt\b on\b op\frating\b l\fas\fs\b d\fcr\fas\fd\b by

23\bp\frc\fnt\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly. $1,410\b million\b in\b 2015,\b compar\fd\b with\b 2014.\b Total\b acquisition

volum\fs\b of\b r\fc\fivabl\fs\b (\fxcluding\b trad\f\b and\b whol\fsal\f\b not\fs)\b and

Total\b int\fr\fst-b\faring\b d\fbt\b of\b th\f\b \fquipm\fnt\b op\frations\b was

cost\b of\b \fquipm\fnt\b on\b op\frating\b l\fas\fs\b d\fcr\fas\fd\b 11\b p\frc\fnt\b in

$4,925\b million\b at\b th\f\b \fnd\b of\b 2015,\b compar\fd\b with\b $5,077\b million

2015,\b compar\fd\b with\b 2014.\b Th\f\b volum\fs\b of\b financing\b l\fas\fs,\b r\ftail

at\b th\f\b \fnd\b of\b 2014\b and\b $5,951\b million\b at\b th\f\b \fnd\b of\b 2013.\b Th\f

not\fs\b and\b r\fvolving\b charg\f\b accounts\b d\fcr\fas\fd\b approximat\fly

ratio\b of\b total\b d\fbt\b to\b total\b capital\b (total\b int\fr\fst-b\faring\b d\fbt\b and

26\b p\frc\fnt,\b 19\b p\frc\fnt\b and\b 1\b p\frc\fnt,\b r\fsp\fctiv\fly,\b whil\f

stockhold\frs’\b \fquity)\b at\b th\f\b \fnd\b of\b 2015,\b 2014\b and\b 2013\b was

op\frating\b l\fas\f\b volum\fs\b incr\fas\fd\b 14\b p\frc\fnt.\b During\b 2015,\b th\f

42\b p\frc\fnt,\b 36\b p\frc\fnt\b and\b 37\b p\frc\fnt,\b r\fsp\fctiv\fly.

amount\b of\b whol\fsal\f\b not\fs\b and\b trad\f\b r\fc\fivabl\fs\b d\fcr\fas\fd

Prop\frty\band\b\fquipm\fnt\bcash\b\fxp\fnditur\fs\bfor\bth\f

32\b p\frc\fnt\b and\b 18\b p\frc\fnt,\b r\fsp\fctiv\fly.\b At\b Octob\fr\b 31,\b 2015\b and

\fquipm\fnt\bop\frations\bin\b2015\bw\fr\f\b$688\bmillion,\bcompar\fd\bwith

2014,\b n\ft\b r\fc\fivabl\fs\b and\b l\fas\fs\b administ\fr\fd,\b which\b includ\f

$1,045\bmillion\bin\b2014.\bCapital\b\fxp\fnditur\fs\bin\b2016\bar\f

r\fc\fivabl\fs\b administ\fr\fd\b but\b not\b own\fd,\b w\fr\f\b $38,188\b million\b and

\fstimat\fd\bto\bb\f\b$800\bmillion.

$39,629\b million,\b r\fsp\fctiv\fly.

In\bNov\fmb\fr\b2015,\bth\f\bcompany\bannounc\fd\bth\f\bsigning\bof Total\b\fxt\frnal\bint\fr\fst-b\faring\bd\fbt\bof\bth\f\bfinancial\bs\frvic\fs

d\ffinitiv\f\bpurchas\f\bagr\f\fm\fnts\bto\bacquir\f\bMonos\fm,\ba\bEurop\fan

op\frations\bwas\b$31,925\bmillion\bat\bth\f\b\fnd\bof\b2015,\bcompar\fd

mark\ft\bl\fad\fr\bfor\bpr\fcision\bplant\frs,\band\bPr\fcision\bPlanting\bLLC.,

with\b$31,882\bmillion\bat\bth\f\b\fnd\bof\b2014\band\b$28,524\bmillion\bat

a\bd\fv\flop\fr\band\bdistributor\bof\br\ftrofit\bcompon\fnts\bfor\bpr\fcision

th\f\b\fnd\bof\b2013.\bTotal\b\fxt\frnal\bborrowings\bhav\f\bchang\fd

25 g\fn\frally\bcorr\fsponding\bwith\bth\f\bl\fv\fl\bof\bth\f\br\fc\fivabl\f\bandTh\f\bpr\fvious\btabl\f\bdo\fs\bnot\binclud\f\bunr\fcogniz\fd\btax

l\fas\f\bportfolio,\bth\f\bl\fv\fl\bof\bcash\band\bcash\b\fquival\fnts,\bth\f b\fn\ffit\bliabiliti\fs\bof\bapproximat\fly\b$229\bmillion\bat\bOctob\fr\b31,

chang\f\bin\bpayabl\fs\bow\fd\bto\bD\f\fr\f\b&\bCompany\band\bth\f\bchang\f\bin 2015,\bsinc\f\bth\f\btiming\bof\bfutur\f\bpaym\fnts\bis\bnot\br\fasonably

inv\fstm\fnt\bfrom\bD\f\fr\f\b&\bCompany.\bTh\f\bfinancial\bs\frvic\fs \fstimabl\f\bat\bthis\btim\f\b(s\f\f\bNot\f\b8).\bFor\badditional\binformation

op\frations’\bratio\bof\btotal\bint\fr\fst-b\faring\bd\fbt\bto\btotal r\fgarding\bp\fnsion\band\both\fr\bpostr\ftir\fm\fnt\b\fmploy\f\f\bb\fn\ffit

stockhold\fr’s\b\fquity\bwas\bto\b7.6\bto\b1\bat\bth\f\b\fnd\bof\b2015,\b7.4\bto\b1 obligations,\bshort-t\frm\bborrowings,\blong-t\frm\bborrowings\band

at\bth\f\b\fnd\bof\b2014\band\b7.3\bto\b1\bat\bth\f\b\fnd\bof\b2013. l\fas\f\bobligations,\bs\f\f\bNot\fs\b7,\b18,\b20\band\b21,\br\fsp\fctiv\fly.

Th\f\bCapital\bCorporation\bhas\ba\br\fvolving\bcr\fdit\bagr\f\fm\fnt\bto \fRITI\fAL A\f\fOUNTING POLI\fIE\b

utiliz\f\bbank\bconduit\bfaciliti\fs\bto\bs\fcuritiz\f\br\ftail\bnot\fs\b(s\f\f Th\f\bpr\fparation\bof\bth\f\bcompany’s\bconsolidat\fd\bfinancial

Not\f\b13).\bAt\bOctob\fr\b31,\b2015,\bth\f\bfacility\bhad\ba\btotal\bcapacity, stat\fm\fnts\bin\bconformity\bwith\baccounting\bprincipl\fs\bg\fn\frally

or\b‘‘financing\blimit,’’\bof\bup\bto\b$3,500\bmillion\bof\bs\fcur\fd acc\fpt\fd\bin\bth\f\bU.S.\br\fquir\fs\bmanag\fm\fnt\bto\bmak\f\b\fstimat\fs

financings\bat\bany\btim\f.\bTh\f\bfacility\bwas\br\fn\fw\fd\bin\bNov\fmb\fr and\bassumptions\bthat\baff\fct\br\fport\fd\bamounts\bof\bass\fts,

2015\bwith\ba\bcapacity\bof\b$3,880\bmillion.\bAft\fr\ba\bthr\f\f-y\far liabiliti\fs,\br\fv\fnu\fs\band\b\fxp\fns\fs.\bChang\fs\bin\bth\fs\f\b\fstimat\fs

r\fvolving\bp\friod,\bunl\fss\bth\f\bbanks\band\bCapital\bCorporation\bagr\f\f and\bassumptions\bcould\bhav\f\ba\bsignificant\b\fff\fct\bon\bth\f\bfinancial

to\br\fn\fw,\bCapital\bCorporation\bwould\bliquidat\f\bth\f\bs\fcur\fd stat\fm\fnts.\bTh\f\baccounting\bpolici\fs\bb\flow\bar\f\bthos\f

borrowings\bov\fr\btim\f\bas\bpaym\fnts\bon\bth\f\br\ftail\bnot\fs\bar\f manag\fm\fnt\bb\fli\fv\fs\bar\f\bth\f\bmost\bcritical\bto\bth\f\bpr\fparation\bof

coll\fct\fd.\bAt\bOctob\fr\b31,\b2015,\b$1,848\bmillion\bof\bshort-t\frm th\f\bcompany’s\bfinancial\bstat\fm\fnts\band\br\fquir\f\bth\f\bmost

s\fcuritization\bborrowings\bwas\boutstanding\bund\fr\bth\f\bagr\f\fm\fnt. difficult,\bsubj\fctiv\f\bor\bcompl\fx\bjudgm\fnts.\bTh\f\bcompany’s\both\fr

accounting\bpolici\fs\bar\f\bd\fscrib\fd\bin\bth\f\bNot\fs\bto\bth\f

During\b2015,\bth\f\bfinancial\bs\frvic\fs\bop\frations\bissu\fd

Consolidat\fd\bFinancial\bStat\fm\fnts.

$2,716\bmillion\band\br\ftir\fd\b$2,685\bmillion\bof\br\ftail\bnot\f

s\fcuritization\bborrowings.\bDuring\b2015,\bth\f\bfinancial\bs\frvic\fs

\bales Incentives

op\frations\balso\bissu\fd\b$5,705\bmillion\band\br\ftir\fd\b$4,649\bmillion At\bth\f\btim\f\ba\bsal\f\bto\ba\bd\fal\fr\bis\br\fcogniz\fd,\bth\f\bcompany\br\fcords

of\blong-t\frm\bborrowings,\bwhich\bw\fr\f\bprimarily\bm\fdium-t\frm an\b\fstimat\f\bof\bth\f\bfutur\f\bsal\fs\binc\fntiv\f\bcosts\bfor\ballowanc\fs

not\fs. and\bfinancing\bprograms\bthat\bwill\bb\f\bdu\f\bwh\fn\bth\f\bd\fal\fr\bs\flls

th\f\b\fquipm\fnt\bto\ba\br\ftail\bcustom\fr.\bTh\f\b\fstimat\f\bis\bbas\fd\bon

OFF-BALAN\fE-\bHEET ARRANGEMENT\b

historical\bdata,\bannounc\fd\binc\fntiv\f\bprograms,\bfi\fld\binv\fntory

At\bOctob\fr\b31,\b2015,\bth\f\bcompany\bhad\bapproximat\fly

l\fv\fls\band\br\ftail\bsal\fs\bvolum\fs.\bTh\f\bfinal\bcost\bof\bth\fs\f\bprograms

$162\bmillion\bof\bguarant\f\fs\bissu\fd\bprimarily\bto\bbanks\boutsid\f\bth\f

and\bth\f\bamount\bof\baccrual\br\fquir\fd\bfor\ba\bsp\fcific\bsal\f\bar\f\bfully

U.S.\br\flat\fd\bto\bthird-party\br\fc\fivabl\fs\bfor\bth\f\br\ftail\bfinancing\bof

d\ft\frmin\fd\bwh\fn\bth\f\bd\fal\fr\bs\flls\bth\f\b\fquipm\fnt\bto\bth\f\br\ftail

John\bD\f\fr\f\b\fquipm\fnt.\bTh\f\bcompany\bmay\br\fcov\fr\ba\bportion\bof

custom\fr.\bThis\bis\bdu\f\bto\bnum\frous\bprograms\bavailabl\f\bat\bany

any\br\fquir\fd\bpaym\fnts\bincurr\fd\bund\fr\bth\fs\f\bagr\f\fm\fnts\bfrom

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Off-balance-sheet

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d\fcr\fas\f\b.09\bp\frc\fnt,\bth\f\bwarranty\baccrual\bat\bOctob\fr\b31,\b2015

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s\frvic\f\band\bint\fr\fst\bcosts\bis\bapproximat\fly\b$175\bmillion

Postretirement Benefit Obligations compar\fd\bto\bth\f\bpr\fvious\bm\fthod.

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th\f\bcompany’s\bactuari\fs\bin\bcalculating\bth\fs\f\bamounts.\bTh\fs\f

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us\fd\bto\b\fstimat\f\bth\f\bs\frvic\f\band\bint\fr\fst\bcost\bcompon\fnts\bof d\ft\frmin\fd\bthrough\ba\bcombination\bof\bcomparabl\f\bmark\ft\bvalu\fs

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27 Bas\fd\bon\bthis\bt\fsting,\bth\f\bcompany\bhas\bnot\bid\fntifi\fd\ba oth\fr\bassumptions\bconstant,\bif\bthis\b\fstimat\fd\bloss\b\fxp\fri\fnc\f\bon

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valu\f\bof\bth\f\bcompany’s\br\fporting\bunits\bwould\bhav\f\bhad\bno incr\fas\f\bor\bd\fcr\fas\f\bby\bapproximat\fly\b$14\bmillion.

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conditions\bwould\br\fsult\bin\bchang\fs\bto\bth\f\ballowanc\f\bfor\bcr\fdit valu\f\bassumptions\bwould\baff\fct\bth\f\bamount\bof\bd\fpr\fciation

loss\fs\band\bth\f\bprovision\bfor\bcr\fdit\bloss\fs. \fxp\fns\f\band\bth\f\bamount\bof\binv\fstm\fnt\bin\b\fquipm\fnt\bon

op\frating\bl\fas\fs.

Th\f\btotal\ballowanc\f\bfor\bcr\fdit\bloss\fs\bat\bOctob\fr\b31,\b2015,

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to\bfor\fign\bcurr\fncy\btranslation\bin\bboth\bp\friods. du\f\bprimarily\bto\bth\f\bincr\fasing\bl\fv\fls\bof\bop\frating\bl\fas\fs.

Th\f\bassumptions\bus\fd\bin\b\fvaluating\bth\f\bcompany’s Estimat\fs\bus\fd\bin\bd\ft\frmining\b\fnd\bof\bl\fas\f\bmark\ft\bvalu\fs

\fxposur\f\bto\bcr\fdit\bloss\fs\binvolv\f\b\fstimat\fs\band\bsignificant for\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\bsignificantly\bimpact\bth\f

judgm\fnt.\bTh\f\bhistorical\bloss\b\fxp\fri\fnc\f\bon\bth\f\br\fc\fivabl\f amount\band\btiming\bof\bd\fpr\fciation\b\fxp\fns\f.\bHypoth\ftically,\bif

portfolio\br\fpr\fs\fnts\bon\f\bof\bth\f\bk\fy\bassumptions\binvolv\fd\bin futur\f\bmark\ft\bvalu\fs\bfor\bthis\b\fquipm\fnt\bw\fr\f\bto\bd\fcr\fas\f

d\ft\frmining\bth\f\ballowanc\f\bfor\bcr\fdit\bloss\fs.\bOv\fr\bth\f\blast\bfiv\f 10\bp\frc\fnt\bfrom\bth\f\bcompany’s\bpr\fs\fnt\b\fstimat\fs,\bth\f\btotal

fiscal\by\fars,\bthis\bp\frc\fnt\bhas\bvari\fd\bby\ban\bav\frag\f\bof impact\bwould\bb\f\bto\bincr\fas\f\bth\f\bcompany’s\bannual\bd\fpr\fciation

approximat\fly\bplus\bor\bminus\b.04\bp\frc\fnt,\bcompar\fd\bto\bth\f for\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\bby\bapproximat\fly

av\frag\f\bloss\b\fxp\fri\fnc\f\bp\frc\fnt\bduring\bthat\bp\friod.\bHolding $175\bmillion.

28 FINAN\fIAL IN\bTRUMENT MARKET RI\bK INFORMATIONfor\bsimilarly\brat\fd\bborrow\frs.\bCash\bflows\bfor\bint\fr\fst\brat\f\bswaps

ar\f\bproj\fct\fd\band\bdiscount\fd\busing\bforward\brat\fs\bfrom\bth\f\bswap

Th\f\bcompany\bis\bnaturally\b\fxpos\fd\bto\bvarious\bint\fr\fst\brat\f\band

yi\fld\bcurv\f\bat\bth\f\br\fpricing\bdat\fs.\bTh\f\bn\ft\bloss\bin\bth\fs\f\bfinancial

for\fign\bcurr\fncy\brisks.\bAs\ba\br\fsult,\bth\f\bcompany\b\fnt\frs\binto

instrum\fnts’\bfair\bvalu\fs\bwhich\bwould\bb\f\bcaus\fd\bby\bincr\fasing\bth\f

d\frivativ\f\btransactions\bto\bmanag\f\bc\frtain\bof\bth\fs\f\b\fxposur\fs

int\fr\fst\brat\fs\bby\b10\bp\frc\fnt\bfrom\bth\f\bmark\ft\brat\fs\bat

that\baris\f\bin\bth\f\bnormal\bcours\f\bof\bbusin\fss\band\bnot\bfor\bth\f

Octob\fr\b31,\b2015\bwould\bhav\f\bb\f\fn\bapproximat\fly\b$14\bmillion.

purpos\f\bof\bcr\fating\bsp\fculativ\f\bpositions\bor\btrading.\bTh\f

Th\f\bn\ft\bloss\bfrom\bd\fcr\fasing\bth\f\bint\fr\fst\brat\fs\bby\b10\bp\frc\fnt\bat

company’s\bfinancial\bs\frvic\fs\bop\frations\bmanag\f\bth\f\br\flationship

Octob\fr\b31,\b2014\bwould\bhav\f\bb\f\fn\bapproximat\fly\b$18\bmillion.

of\bth\f\btyp\fs\band\bamounts\bof\bth\fir\bfunding\bsourc\fs\bto\bth\fir

r\fc\fivabl\f\band\bl\fas\f\bportfolio\bin\ban\b\fffort\bto\bdiminish\brisk\bdu\f\bto Foreign \furrency Risk

int\fr\fst\brat\f\band\bfor\fign\bcurr\fncy\bfluctuations,\bwhil\f\br\fsponding In\bth\f\b\fquipm\fnt\bop\frations,\bth\f\bcompany’s\bpractic\f\bis\bto\bh\fdg\f

to\bfavorabl\f\bfinancing\bopportuniti\fs.\bAccordingly,\bfrom\btim\f\bto significant\bcurr\fncy\b\fxposur\fs.\bWorldwid\f\bfor\fign\bcurr\fncy

tim\f,\bth\fs\f\bop\frations\b\fnt\fr\binto\bint\fr\fst\brat\f\bswap\bagr\f\fm\fnts \fxposur\fs\bar\f\br\fvi\fw\fd\bquart\frly.\bBas\fd\bon\bth\f\b\fquipm\fnt

to\bmanag\f\bth\fir\bint\fr\fst\brat\f\b\fxposur\f.\bTh\f\bcompany\balso\bhas op\frations’\banticipat\fd\band\bcommitt\fd\bfor\fign\bcurr\fncy\bcash

for\fign\bcurr\fncy\b\fxposur\fs\bat\bsom\f\bof\bits\bfor\fign\band\bdom\fstic inflows,\boutflows\band\bh\fdging\bpolicy\bfor\bth\f\bn\fxt\btw\flv\f\bmonths,

op\frations\br\flat\fd\bto\bbuying,\bs\flling\band\bfinancing\bin\bcurr\fnci\fs th\f\bcompany\b\fstimat\fs\bthat\ba\bhypoth\ftical\b10\bp\frc\fnt

oth\fr\bthan\bth\f\bfunctional\bcurr\fnci\fs.\bTh\f\bcompany\bhas\b\fnt\fr\fd str\fngth\fning\bof\bth\f\bU.S.\bdollar\br\flativ\f\bto\both\fr\bcurr\fnci\fs

into\bagr\f\fm\fnts\br\flat\fd\bto\bth\f\bmanag\fm\fnt\bof\bth\fs\f\bfor\fign through\b2016\bwould\bd\fcr\fas\f\bth\f\b2016\b\fxp\fct\fd\bn\ft\bcash

curr\fncy\btransaction\brisks. inflows\bby\bapproximat\fly\b$32\bmillion.\bAt\bOctob\fr\b31,\b2014,\ba

hypoth\ftical\b10\bp\frc\fnt\bw\fak\fning\bof\bth\f\bU.S.\bdollar\bund\fr

Interest Rate Risk

similar\bassumptions\band\bcalculations\bindicat\fd\ba\bpot\fntial

Quart\frly,\bth\f\bcompany\bus\fs\ba\bcombination\bof\bcash\bflow\bmod\fls

approximat\f\b$16\bmillion\badv\frs\f\b\fff\fct\bon\bth\f\b2015\bn\ft\bcash

to\bass\fss\bth\f\bs\fnsitivity\bof\bits\bfinancial\binstrum\fnts\bwith\bint\fr\fst

inflows.

rat\f\b\fxposur\f\bto\bchang\fs\bin\bmark\ft\bint\fr\fst\brat\fs.\bTh\f\bmod\fls

calculat\f\bth\f\b\fff\fct\bof\badjusting\bint\fr\fst\brat\fs\bas\bfollows.\bCash In\bth\f\bfinancial\bs\frvic\fs\bop\frations,\bth\f\bcompany’s\bpolicy\bis

flows\bfor\bfinancing\br\fc\fivabl\fs\bar\f\bdiscount\fd\bat\bth\f\bcurr\fnt to\bh\fdg\f\bth\f\bfor\fign\bcurr\fncy\brisk\bif\bth\f\bcurr\fncy\bof\bth\f

pr\fvailing\brat\f\bfor\b\fach\br\fc\fivabl\f\bportfolio.\bCash\bflows\bfor borrowings\bdo\fs\bnot\bmatch\bth\f\bcurr\fncy\bof\bth\f\br\fc\fivabl\f

mark\ftabl\f\bs\fcuriti\fs\bar\f\bprimarily\bdiscount\fd\bat\bth\f\bapplicabl\f portfolio.\bAs\ba\br\fsult,\ba\bhypoth\ftical\b10\bp\frc\fnt\badv\frs\f\bchang\f

b\fnchmark\byi\fld\bcurv\f\bplus\bmark\ft\bcr\fdit\bspr\fads.\bCash\bflows\bfor in\bth\f\bvalu\f\bof\bth\f\bU.S.\bdollar\br\flativ\f\bto\ball\both\fr\bfor\fign

uns\fcur\fd\bborrowings\bar\f\bdiscount\fd\bat\bth\f\bapplicabl\f curr\fnci\fs\bwould\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon\bth\f\bfinancial

b\fnchmark\byi\fld\bcurv\f\bplus\bmark\ft\bcr\fdit\bspr\fads\bfor\bsimilarly s\frvic\fs\bcash\bflows.

rat\fd\bborrow\frs.\bCash\bflows\bfor\bs\fcuritiz\fd\bborrowings\bar\f

discount\fd\bat\bth\f\bswap\byi\fld\bcurv\f\bplus\ba\bmark\ft\bcr\fdit\bspr\fad

29 MANAGEMENT’\b REPORT ON INTERNAL \fONTROL OVERsupporting\bth\f\bamounts\band\bdisclosur\fs\bin\bth\f\bfinancial

stat\fm\fnts,\bass\fssing\bth\f\baccounting\bprincipl\fs\bus\fd\band

FINAN\fIAL REPORTING

significant\b\fstimat\fs\bmad\f\bby\bmanag\fm\fnt,\band\b\fvaluating\bth\f

Th\f\bmanag\fm\fnt\bof\bD\f\fr\f\b&\bCompany\bis\br\fsponsibl\f\bfor

ov\frall\bfinancial\bstat\fm\fnt\bpr\fs\fntation.\bOur\baudit\bof\bint\frnal

\fstablishing\band\bmaintaining\bad\fquat\f\bint\frnal\bcontrol\bov\fr

control\bov\fr\bfinancial\br\fporting\binclud\fd\bobtaining\ban

financial\br\fporting.\bD\f\fr\f\b&\bCompany’s\bint\frnal\bcontrol\bsyst\fm

und\frstanding\bof\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting,

was\bd\fsign\fd\bto\bprovid\f\br\fasonabl\f\bassuranc\f\br\fgarding\bth\f

ass\fssing\bth\f\brisk\bthat\ba\bmat\frial\bw\fakn\fss\b\fxists,\band\bt\fsting

pr\fparation\band\bfair\bpr\fs\fntation\bof\bpublish\fd\bfinancial

and\b\fvaluating\bth\f\bd\fsign\band\bop\frating\b\fff\fctiv\fn\fss\bof\bint\frnal

stat\fm\fnts\bin\baccordanc\f\bwith\bg\fn\frally\bacc\fpt\fd\baccounting

control\bbas\fd\bon\bth\f\bass\fss\fd\brisk.\bOur\baudits\balso\binclud\fd

principl\fs.

p\frforming\bsuch\both\fr\bproc\fdur\fs\bas\bw\f\bconsid\fr\fd\bn\fc\fssary\bin

All\bint\frnal\bcontrol\bsyst\fms,\bno\bmatt\fr\bhow\bw\fll\bd\fsign\fd, th\f\bcircumstanc\fs.\bW\f\bb\fli\fv\f\bthat\bour\baudits\bprovid\f\ba

hav\f\binh\fr\fnt\blimitations.\bTh\fr\ffor\f,\b\fv\fn\bthos\f\bsyst\fms r\fasonabl\f\bbasis\bfor\bour\bopinions.

d\ft\frmin\fd\bto\bb\f\b\fff\fctiv\f\bcan\bprovid\f\bonly\br\fasonabl\f

A\bcompany’s\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting\bis\ba

assuranc\f\bwith\br\fsp\fct\bto\bfinancial\bstat\fm\fnt\bpr\fparation\band

proc\fss\bd\fsign\fd\bby,\bor\bund\fr\bth\f\bsup\frvision\bof,\bth\f\bcompany’s

pr\fs\fntation\bin\baccordanc\f\bwith\bg\fn\frally\bacc\fpt\fd\baccounting

principal\b\fx\fcutiv\f\band\bprincipal\bfinancial\boffic\frs,\bor\bp\frsons

principl\fs.

p\frforming\bsimilar\bfunctions,\band\b\fff\fct\fd\bby\bth\f\bcompany’s

Manag\fm\fnt\bass\fss\fd\bth\f\b\fff\fctiv\fn\fss\bof\bth\f\bcompany’s board\bof\bdir\fctors,\bmanag\fm\fnt,\band\both\fr\bp\frsonn\fl\bto\bprovid\f

int\frnal\bcontrol\bov\fr\bfinancial\br\fporting\bas\bof\bOctob\fr\b31,\b2015, r\fasonabl\f\bassuranc\f\br\fgarding\bth\f\br\fliability\bof\bfinancial

using\bth\f\bcrit\fria\bs\ft\bforth\bin\bInt\frnal\bControl – Int\fgrat\fd r\fporting\band\bth\f\bpr\fparation\bof\bfinancial\bstat\fm\fnts\bfor

Fram\fwork\b(2013)\bissu\fd\bby\bth\f\bCommitt\f\f\bof\bSponsoring \fxt\frnal\bpurpos\fs\bin\baccordanc\f\bwith\bg\fn\frally\bacc\fpt\fd

Organizations\bof\bth\f\bTr\fadway\bCommission.\bBas\fd\bon\bthat accounting\bprincipl\fs.\bA\bcompany’s\bint\frnal\bcontrol\bov\fr\bfinancial

ass\fssm\fnt,\bmanag\fm\fnt\bb\fli\fv\fs\bthat,\bas\bof\bOctob\fr\b31,\b2015, r\fporting\binclud\fs\bthos\f\bpolici\fs\band\bproc\fdur\fs\bthat\b(1)\bp\frtain

th\f\bCompany’s\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting\bwas to\bth\f\bmaint\fnanc\f\bof\br\fcords\bthat,\bin\br\fasonabl\f\bd\ftail,

\fff\fctiv\f. accurat\fly\band\bfairly\br\ffl\fct\bth\f\btransactions\band\bdispositions\bof

th\f\bass\fts\bof\bth\f\bcompany;\b(2)\bprovid\f\br\fasonabl\f\bassuranc\f\bthat

Th\f\bCompany’s\bind\fp\fnd\fnt\br\fgist\fr\fd\bpublic\baccounting

transactions\bar\f\br\fcord\fd\bas\bn\fc\fssary\bto\bp\frmit\bpr\fparation\bof

firm\bhas\bissu\fd\ban\baudit\br\fport\bon\bth\f\b\fff\fctiv\fn\fss\bof\bth\f

financial\bstat\fm\fnts\bin\baccordanc\f\bwith\bg\fn\frally\bacc\fpt\fd

Company’s\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting.\bThis\br\fport

accounting\bprincipl\fs,\band\bthat\br\fc\fipts\band\b\fxp\fnditur\fs\bof\bth\f

app\fars\bb\flow.

company\bar\f\bb\fing\bmad\f\bonly\bin\baccordanc\f\bwith\bauthorizations

D\fc\fmb\fr\b18,\b2015

of\bmanag\fm\fnt\band\bdir\fctors\bof\bth\f\bcompany;\band\b(3)\bprovid\f

r\fasonabl\f\bassuranc\f\br\fgarding\bpr\fv\fntion\bor\btim\fly\bd\ft\fction\bof

REPORT OF INDEPENDENT

unauthoriz\fd\bacquisition,\bus\f,\bor\bdisposition\bof\bth\f\bcompany’s

REGI\bTERED PUBLI\f A\f\fOUNTING FIRM ass\fts\bthat\bcould\bhav\f\ba\bmat\frial\b\fff\fct\bon\bth\f\bfinancial

D\f\fr\f\b&\bCompany: stat\fm\fnts.

W\f\bhav\f\baudit\fd\bth\f\baccompanying\bconsolidat\fd\bbalanc\f\bsh\f\fts B\fcaus\f\bof\bth\f\binh\fr\fnt\blimitations\bof\bint\frnal\bcontrol\bov\fr

of\bD\f\fr\f\b&\bCompany\band\bsubsidiari\fs\b(th\f\b‘‘Company’’)\bas\bof

financial\br\fporting,\bincluding\bth\f\bpossibility\bof\bcollusion\bor

Octob\fr\b31,\b2015\band\b2014,\band\bth\f\br\flat\fd\bstat\fm\fnts\bof

improp\fr\bmanag\fm\fnt\bov\frrid\f\bof\bcontrols,\bmat\frial

consolidat\fd\bincom\f,\bconsolidat\fd\bcompr\fh\fnsiv\f\bincom\f,

misstat\fm\fnts\bdu\f\bto\b\frror\bor\bfraud\bmay\bnot\bb\f\bpr\fv\fnt\fd\bor

chang\fs\bin\bconsolidat\fd\bstockhold\frs’\b\fquity,\band\bconsolidat\fd

d\ft\fct\fd\bon\ba\btim\fly\bbasis.\bAlso,\bproj\fctions\bof\bany\b\fvaluation\bof

cash\bflows\bfor\b\fach\bof\bth\f\bthr\f\f\by\fars\bin\bth\f\bp\friod\b\fnd\fd

th\f\b\fff\fctiv\fn\fss\bof\bth\f\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting

Octob\fr\b31,\b2015.\bOur\baudits\balso\binclud\fd\bth\f\bfinancial

to\bfutur\f\bp\friods\bar\f\bsubj\fct\bto\bth\f\brisk\bthat\bth\f\bcontrols\bmay

stat\fm\fnt\bsch\fdul\f\blist\fd\bin\bth\f\bInd\fx\bund\fr\bPart\bIV,\bIt\fm\b15(2).

b\fcom\f\binad\fquat\f\bb\fcaus\f\bof\bchang\fs\bin\bconditions,\bor\bthat

W\f\balso\bhav\f\baudit\fd\bth\f\bCompany’s\bint\frnal\bcontrol\bov\fr

th\f\bd\fgr\f\f\bof\bcomplianc\f\bwith\bth\f\bpolici\fs\bor\bproc\fdur\fs\bmay

financial\br\fporting\bas\bof\bOctob\fr\b31,\b2015,\bbas\fd\bon\bcrit\fria

d\ft\friorat\f.

\fstablish\fd\bin\b I\fter\fal Co\ftrol – I\ftegrated Framework\b(2013)

In\bour\bopinion,\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts

issu\fd\bby\bth\f\bCommitt\f\f\bof\bSponsoring\bOrganizations\bof\bth\f

r\ff\frr\fd\bto\babov\f\bpr\fs\fnt\bfairly,\bin\ball\bmat\frial\br\fsp\fcts,\bth\f

Tr\fadway\bCommission.\bTh\f\bCompany’s\bmanag\fm\fnt\bis

financial\bposition\bof\bth\f\bCompany\bas\bof\bOctob\fr\b31,\b2015\band

r\fsponsibl\f\bfor\bth\fs\f\bfinancial\bstat\fm\fnts\band\bfinancial

2014,\band\bth\f\br\fsults\bof\bth\fir\bop\frations\band\bth\fir\bcash\bflows\bfor

stat\fm\fnt\bsch\fdul\f,\bfor\bmaintaining\b\fff\fctiv\f\bint\frnal\bcontrol

\fach\bof\bth\f\bthr\f\f\by\fars\bin\bth\f\bp\friod\b\fnd\fd\bOctob\fr\b31,\b2015,\bin

ov\fr\bfinancial\br\fporting,\band\bfor\bits\bass\fssm\fnt\bof\bth\f

conformity\bwith\baccounting\bprincipl\fs\bg\fn\frally\bacc\fpt\fd\bin\bth\f

\fff\fctiv\fn\fss\bof\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting,

Unit\fd\bStat\fs\bof\bAm\frica.\bAlso,\bin\bour\bopinion,\bsuch\bfinancial

includ\fd\bin\bth\f\baccompanying\bManag\fm\fnt’s\bR\fport\bon\bInt\frnal

stat\fm\fnt\bsch\fdul\f,\bwh\fn\bconsid\fr\fd\bin\br\flation\bto\bth\f\bbasic

Control\bOv\fr\bFinancial\bR\fporting.\bOur\br\fsponsibility\bis\bto\b\fxpr\fss

consolidat\fd\bfinancial\bstat\fm\fnts\btak\fn\bas\ba\bwhol\f,\bpr\fs\fnts

an\bopinion\bon\bth\fs\f\bfinancial\bstat\fm\fnts\band\bfinancial\bstat\fm\fnt

fairly,\bin\ball\bmat\frial\br\fsp\fcts,\bth\f\binformation\bs\ft\bforth\bth\fr\fin.

sch\fdul\f\band\ban\bopinion\bon\bth\f\bCompany’s\bint\frnal\bcontrol\bov\fr

Also,\bin\bour\bopinion,\bth\f\bCompany\bmaintain\fd,\bin\ball\bmat\frial

financial\br\fporting\bbas\fd\bon\bour\baudits.

r\fsp\fcts,\b\fff\fctiv\f\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting\bas\bof

W\f\bconduct\fd\bour\baudits\bin\baccordanc\f\bwith\bth\f\bstandards

Octob\fr\b31,\b2015,\bbas\fd\bon\bth\f\bcrit\fria\b\fstablish\fd\bin\bI\fter\fal

of\bth\f\bPublic\bCompany\bAccounting\bOv\frsight\bBoard\b(Unit\fd

Co\ftrol – I\ftegrated Framework\b(2013)\bissu\fd\bby\bth\f\bCommitt\f\f

Stat\fs).\bThos\f\bstandards\br\fquir\f\bthat\bw\f\bplan\band\bp\frform\bth\f

of\bSponsoring\bOrganizations\bof\bth\f\bTr\fadway\bCommission.

audit\bto\bobtain\br\fasonabl\f\bassuranc\f\babout\bwh\fth\fr\bth\f

financial\bstat\fm\fnts\bar\f\bfr\f\f\bof\bmat\frial\bmisstat\fm\fnt\band DELOITTE\b&\bTOUCHE\bLLP

wh\fth\fr\b\fff\fctiv\f\bint\frnal\bcontrol\bov\fr\bfinancial\br\fporting\bwas Chicago,\bIllinois

maintain\fd\bin\ball\bmat\frial\br\fsp\fcts.\bOur\baudits\bof\bth\f\bfinancial D\fc\fmb\fr\b18,\b2015

stat\fm\fnts\binclud\fd\b\fxamining,\bon\ba\bt\fst\bbasis,\b\fvid\fnc\f

30 DEERE\b&\bCOMPANY

\bTATEMENT OF \fON\bOLIDATED IN\fOME

For the Years Ended October 31, 2015, 2014 and 2013

(In\bmillions\bof\bdollars)

2015 2014 2013

Net \bales and Revenues

N\ft\bsal\fs ............................................................................................................................... . . . . $25,775.2 $32,960.6 $34,997.9

Financ\f\band\bint\fr\fst\bincom\f ......................................................................................................... 2,381.1 2,282.1 2,115.1

Oth\fr\bincom\f ............................................................................................................................. 70 6.5 824.2 682.4

Total ............................................................................................................................... . . 28,862.8 36,066.9 37,795.4

\fosts and Expenses

Cost\bof\bsal\fs .............................................................................................................................. 2 0,143.2 24,775.8 25,667.3

R\fs\farch\band\bd\fv\flopm\fnt\b\fxp\fns\fs .............................................................................................. 1,425.1 1,452.0 1,477.3

S\flling,\badministrativ\f\band\bg\fn\fral\b\fxp\fns\fs ..................................................................................... 2,873.3 3,284.4 3,605.5

Int\fr\fst\b\fxp\fns\f ......................................................................................................................... 680.0 664.0 741.3

Oth\fr\bop\frating\b\fxp\fns\fs ............................................................................................................. 961.1 1,093.3 820.6

Total ............................................................................................................................... . . 26,082.7 31,269.5 32,312.0

Income of \fonsolidated Group before Income Taxes ....................................................................... 2,780.1 4,797.4 5,483.4

Provision\bfor\bincom\f\btax\fs ............................................................................................................ 840.1 1,626.5 1,945.9

Income of \fonsolidated Group ..................................................................................................... 1,940.0 3,170.9 3,537.5

Equity\bin\bincom\f\b(loss)\bof\bunconsolidat\fd\baffiliat\fs ............................................................................. .9 (7.6) .1

Net Income ............................................................................................................................... 1,940.9 3,163.3 3,537.6

L\fss:\bN\ft\bincom\f\battributabl\f\bto\bnoncontrolling\bint\fr\fsts ............................................................. .9 1.6 .3

Net Income Attributable to Deere & \fompany ................................................................................ $ 1,940.0 $ 3,161.7 $ 3,537.3

Per \bhare Data

Basic ............................................................................................................................... ......... $ 5.81 $ 8.71 $ 9.18

Dilut\fd ............................................................................................................................... ...... $ 5.77 $ 8.63 $ 9.09

Divid\fnds\bd\fclar\fd ...................................................................................................................... $ 2.40 $ 2.22 $ 1.99

Average \bhares Outstanding

Basic ............................................................................................................................... ......... 333.6 363.0 385.3

Dilut\fd ............................................................................................................................... ...... 336.0 366.1 389.2

Th\f\bnot\fs\bto\bconsolidat\fd\bfinancial\bstat\fm\fnts\bar\f\ban\bint\fgral\bpart\bof\bthis\bstat\fm\fnt.

31 DEERE\b&\bCOMPANY

\bTATEMENT OF \fON\bOLIDATED \fOMPREHEN\bIVE IN\fOME

For the Years Ended October 31, 2015, 2014 and 2013

(In\bmillions\bof\bdollars)

2015 2014 2013

Net Income ............................................................................................................................... . $ 1,940.9 $ 3,163.3 $ 3,537.6

Other \fomprehensive Income (Loss), Net of Income Taxes R\ftir\fm\fnt\bb\fn\ffits\badjustm\fnt ................................................................................................... (7.7) (684.4) 1,950.0

Cumulativ\f\btranslation\badjustm\fnt ................................................................................................ (935.1) (415.5) (70.9)

Unr\faliz\fd\bgain\b(loss)\bon\bd\frivativ\fs .............................................................................................. (2.5) 2.8 10.7

Unr\faliz\fd\bgain\b(loss)\bon\binv\fstm\fnts ............................................................................................ (1.5) 6.9 (11.3)

Other \fomprehensive Income (Loss), Net of Income Taxes .................................................................(946.8) (1,090.2) 1,878.5

\fomprehensive Income of \fonsolidated Group ................................................................................. 994.1 2,073.1 5,416.1

L\fss:\bCompr\fh\fnsiv\f\bincom\f\battributabl\f\bto\bnoncontrolling\bint\fr\fsts ....................................................... .5 1.3 .4

\fomprehensive Income Attributable to Deere & \fompany .................................................................. $993.6 $ 2,071.8 $ 5,415.7

Th\f\bnot\fs\bto\bconsolidat\fd\bfinancial\bstat\fm\fnts\bar\f\ban\bint\fgral\bpart\bof\bthis\bstat\fm\fnt.

32 DEERE\b&\bCOMPANY

\fON\bOLIDATED BALAN\fE \bHEET

As of October 31, 2015 and 2014

(In\bmillions\bof\bdollars\b\fxc\fpt\bp\fr\bshar\f\bamounts)

2015 2014

A\b\bET\b

Cash\band\bcash\b\fquival\fnts ............................................................................................................................ $ 4, 162.2 $ 3,787.0

Mark\ftabl\f\bs\fcuriti\fs ............................................................................................................................... . . . . 437.4 1,215.1

R\fc\fivabl\fs\bfrom\bunconsolidat\fd\baffiliat\fs ........................................................................................................ 33.3 30.2

Trad\f\baccounts\band\bnot\fs\br\fc\fivabl\f – n\ft ....................................................................................................... 3,051.1 3,277.6

Financing\br\fc\fivabl\fs – n\ft ........................................................................................................................... 24,809.0 27,422.2

Financing\br\fc\fivabl\fs\bs\fcuritiz\fd – n\ft ............................................................................................................ 4,834.6 4,602.3

Oth\fr\br\fc\fivabl\fs ............................................................................................................................... ......... 991.2 1,500.3

Equipm\fnt\bon\bop\frating\bl\fas\fs – n\ft .............................................................................................................. 4,970.4 4,015.5

Inv\fntori\fs ............................................................................................................................... ................. 3,817.0 4,209.7

Prop\frty\band\b\fquipm\fnt – n\ft ....................................................................................................................... 5,181.5 5,577.8

Inv\fstm\fnts\bin\bunconsolidat\fd\baffiliat\fs ........................................................................................................... 303.5 303.2

Goodwill ............................................................................................................................... .................... 726.0 791.2

Oth\fr\bintangibl\f\bass\fts – n\ft ......................................................................................................................... 63.6 68.8

R\ftir\fm\fnt\bb\fn\ffits ............................................................................................................................... ...... 215.6 262.0

D\ff\frr\fd\bincom\f\btax\fs ............................................................................................................................... . . 2,767.3 2,776.6

Oth\fr\bass\fts ............................................................................................................................... ............... 1,583.9 1,496.9

Total Assets ............................................................................................................................... ............... $ 57,947.6 $ 61,336.4

LIABILITIE\b AND \bTO\fKHOLDER\b’ EQUITY

LIABILITIE\b

Short-t\frm\bborrowings ............................................................................................................................... . . $ 8,426.6 $ 8,019.2

Short-t\frm\bs\fcuritization\bborrowings .............................................................................................................. 4,590.0 4,558.5

Payabl\fs\bto\bunconsolidat\fd\baffiliat\fs ............................................................................................................... 80.6 101.0

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs .......................................................................................................... 7,311.5 8,554.1

D\ff\frr\fd\bincom\f\btax\fs ............................................................................................................................... . . 160.8 160.9

Long-t\frm\bborrowings ............................................................................................................................... . . 23,832.8 24,380.7

R\ftir\fm\fnt\bb\fn\ffits\band\both\fr\bliabiliti\fs ........................................................................................................... 6,787.7 6,496.5

Total\bliabiliti\fs ............................................................................................................................... ...... 51,190.0 52,270.9

Commitm\fnts\band\bconting\fnci\fs\b(Not\f\b22)

\bTO\fKHOLDER\b’ EQUITY

Common\bstock,\b$1\bpar\bvalu\f\b(authoriz\fd\b– 1,200,000,000\bshar\fs; issu\fd\b– 536,431,204\bshar\fs\bin\b2015\band\b2014),\bat\bpaid-in\bamount ...................................................................3,825.6 3,675.4

Common\bstock\bin\btr\fasury,\b219,743,893\bshar\fs\bin\b2015\band\b190,926,805\bshar\fs\bin\b2014,\bat\bcost ...............................(15,497.6) (12,834.2)

R\ftain\fd\b\farnings ............................................................................................................................... ........ 23,144.8 22,004.4

Accumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss) ............................................................................................... (4,729.4) (3,783.0)

Total\bD\f\fr\f\b&\bCompany\bstockhold\frs’\b\fquity ..................................................................................................... 6,743.4 9,062.6

Noncontrolling\bint\fr\fsts ............................................................................................................................... 14.2 2.9

Total\bstockhold\frs’\b\fquity .......................................................................................................................... 6,757.6 9,065.5

Total Liabilities and \btockholders’ Equity ...................................................................................................... $ 57,947.6 $ 61,336.4

Th\f\bnot\fs\bto\bconsolidat\fd\bfinancial\bstat\fm\fnts\bar\f\ban\bint\fgral\bpart\bof\bthis\bstat\fm\fnt.

33 DEERE\b&\bCOMPANY

\bTATEMENT OF \fON\bOLIDATED \fA\bH FLOW\b

For the Years Ended October 31, 2015, 2014 and 2013

(In\bmillions\bof\bdollars)

2015 2014 2013

\fash Flows from Operating Activities

N\ft\bincom\f ............................................................................................................................ $ 1, 940.9 $ 3,163.3 $ 3,537.6

Adjustm\fnts\bto\br\fconcil\f\bn\ft\bincom\f\bto\bn\ft\bcash\bprovid\fd\bby\bop\frating\bactiviti\fs: Provision\bfor\bcr\fdit\bloss\fs ...................................................................................................... 55.4 38.1 20.5

Provision\bfor\bd\fpr\fciation\band\bamortization ............................................................................... 1,382.4 1,306.5 1,140.3

Impairm\fnt\bcharg\fs .............................................................................................................. 34.8 95.9 102.0

Shar\f-bas\fd\bcomp\fnsation\b\fxp\fns\f ......................................................................................... 66.1 78.5 80.7

Undistribut\fd\b\farnings\bof\bunconsolidat\fd\baffiliat\fs ..................................................................... (1.0) 9.3 9.1

Cr\fdit\bfor\bd\ff\frr\fd\bincom\f\btax\fs ............................................................................................. (18.4) (280.1) (172.6)

Chang\fs\bin\bass\fts\band\bliabiliti\fs: Trad\f,\bnot\fs\band\bfinancing\br\fc\fivabl\fs\br\flat\fd\bto\bsal\fs .............................................................811.6 (749.0) (1,510.2)

Insuranc\f\br\fc\fivabl\fs ......................................................................................................... 333.4 (149.9) 263.4

Inv\fntori\fs ...................................................................................................................... (691.4) (297.9) (728.4)

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs ................................................................................ (503.6) (137.1) 217.1

Accru\fd\bincom\f\btax\fs\bpayabl\f/r\fc\fivabl\f ............................................................................... (137.6) 342.6 80.4

R\ftir\fm\fnt\bb\fn\ffits ........................................................................................................... 427.5 336.9 262.0

Oth\fr ............................................................................................................................... . 40.2 (231.2) (47.6)

N\ft\bcash\bprovid\fd\bby\bop\frating\bactiviti\fs ............................................................................ 3,740.3 3,525.9 3,254.3

\fash Flows from Investing Activities

Coll\fctions\bof\br\fc\fivabl\fs\b(\fxcluding\br\fc\fivabl\fs\br\flat\fd\bto\bsal\fs) .......................................................14,919.7 15,319.1 14,088.0

Proc\f\fds\bfrom\bmaturiti\fs\band\bsal\fs\bof\bmark\ftabl\f\bs\fcuriti\fs .............................................................860.7 1,022.5 843.9

Proc\f\fds\bfrom\bsal\fs\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs .................................................................... 1,049.4 1,091.5 936.7

Proc\f\fds\bfrom\bsal\fs\bof\bbusin\fss\fs,\bn\ft\bof\bcash\bsold ........................................................................ 149.2 345.8 22.0

Cost\bof\br\fc\fivabl\fs\bacquir\fd\b(\fxcluding\br\fc\fivabl\fs\br\flat\fd\bto\bsal\fs) ...................................................(14,996.5) (17,240.4) (17,011.7)

Purchas\fs\bof\bmark\ftabl\f\bs\fcuriti\fs .............................................................................................. (154.9) (614.6) (1,026.3)

Purchas\fs\bof\bprop\frty\band\b\fquipm\fnt .......................................................................................... (694.0) (1,048.3) (1,158.4)

Cost\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\bacquir\fd ............................................................................ (2,132.1) (1,611.0) (1,216.9)

Acquisitions\bof\bbusin\fss\fs,\bn\ft\bof\bcash\bacquir\fd ............................................................................ (83.5)

Oth\fr ............................................................................................................................... ..... (60.2) (145.6) (214.5)

N\ft\bcash\bus\fd\bfor\binv\fsting\bactiviti\fs ................................................................................. (1,058.7) (2,881.0) (4,820.7)

\fash Flows from Financing Activities

Incr\fas\f\bin\btotal\bshort-t\frm\bborrowings ........................................................................................ 501.6 89.2 2,749.4

Proc\f\fds\bfrom\blong-t\frm\bborrowings ........................................................................................... 5,711.0 8,232.0 4,734.0

Paym\fnts\bof\blong-t\frm\bborrowings ............................................................................................. (4,863.2) (5,209.1) (4,958.5)

Proc\f\fds\bfrom\bissuanc\f\bof\bcommon\bstock .................................................................................... 172.1 149.5 174.5

R\fpurchas\fs\bof\bcommon\bstock ................................................................................................... (2,770.7) (2,731.1) (1,531.4)

Divid\fnds\bpaid ........................................................................................................................ (816.3) (786.0) (752.9)

Exc\fss\btax\bb\fn\ffits\bfrom\bshar\f-bas\fd\bcomp\fnsation ....................................................................... 18.5 30.8 50.7

Oth\fr ............................................................................................................................... ..... (72.1) (63.6) (59.3)

N\ft\bcash\b(us\fd\bfor)\bprovid\fd\bby\bfinancing\bactiviti\fs ............................................................... (2,119.1) (288.3) 406.5

Effect of Exchange Rate \fhanges on \fash and \fash Equivalents ....................................................(187.3) (73.6) 11.7

Net Increase (Decrease) in \fash and \fash Equivalents .................................................................. 375.2 283.0 (1,148.2)

\fash and \fash Equivalents at Beginning of Year ......................................................................... 3,787.0 3,504.0 4,652.2

\fash and \fash Equivalents at End of Year .................................................................................. $ 4,162.2 $ 3,787.0 $ 3,504.0

Th\f\bnot\fs\bto\bconsolidat\fd\bfinancial\bstat\fm\fnts\bar\f\ban\bint\fgral\bpart\bof\bthis\bstat\fm\fnt.

34 DEERE\b&\bCOMPANY

\bTATEMENT OF \fHANGE\b IN \fON\bOLIDATED \bTO\fKHOLDER\b’ EQUITY

For the Years Ended October 31, 2013, 2014 and 2015

(In\bmillions\bof\bdollars)

Deere & \fompany \btockholdersAccumulated

Total Other Non-

\btockholders’ \fommon Treasury Retained \fomprehensive controlling Equity \btock \btock Earnings Income (Loss) Interests

Balance October 31, 2012 ..................................... $ 6,862.0 $3,352.2 $ (8,813.8) $16,875.2 $(4,571.5) $ 19.9

N\ft\bincom\f .......................................................... 3,537.63,537.3.3

Oth\fr\bcompr\fh\fnsiv\f\bincom\f .................................. 1,878.5 1,878.4.1

R\fpurchas\fs\bof\bcommon\bstock ................................. (1,531.4)(1,531.4)

Tr\fasury\bshar\fs\br\fissu\fd ......................................... 134.3134.3

Divid\fnds\bd\fclar\fd ................................................ (774.5)(766.6)(7.9)

D\fconsolidation\bof\bvariabl\f\bint\fr\fst\b\fntity ..................(10.6) (10.6)

Stock\boptions\band\both\fr\bshar\fhold\fr\btransactions .......171.8 172.0 (.3).1

Balance October 31, 2013 ..................................... 10,267.7 3,524.2 (10,210.9) 19,645.6 (2,693.1) 1.9

N\ft\bincom\f .......................................................... 3,163.33,161.71.6

Oth\fr\bcompr\fh\fnsiv\f\bloss ....................................... (1,090.2) (1,089.9) (.3)

R\fpurchas\fs\bof\bcommon\bstock ................................. (2,731.1)(2,731.1)

Tr\fasury\bshar\fs\br\fissu\fd ......................................... 107.8107.8

Divid\fnds\bd\fclar\fd ................................................ (803.7)(803.4)(.3)

Stock\boptions\band\both\fr\bshar\fhold\fr\btransactions .......151.7 151.2 .5

Balance October 31, 2014 ..................................... 9,065.5 3,675.4 (12,834.2) 22,004.4 (3,783.0) 2.9

N\ft\bincom\f .......................................................... 1,940.91,940.0.9

Oth\fr\bcompr\fh\fnsiv\f\bloss ....................................... (946.8) (946.4) (.4)

R\fpurchas\fs\bof\bcommon\bstock ................................. (2,770.7)(2,770.7)

Tr\fasury\bshar\fs\br\fissu\fd ......................................... 107.3107.3

Divid\fnds\bd\fclar\fd ................................................ (800.8)(799.5)(1.3)

Stock\boptions\band\both\fr\bshar\fhold\fr\btransactions .......162.2 150.2 (.1)12.1

Balance October 31, 2015 ..................................... $ 6,757.6 $3,825.6 $(15,497.6) $23,144.8 $(4,729.4) $ 14.2

Th\f\bnot\fs\bto\bconsolidat\fd\bfinancial\bstat\fm\fnts\bar\f\ban\bint\fgral\bpart\bof\bthis\bstat\fm\fnt.

35 NOTE\b TO \fON\bOLIDATED FINAN\fIAL \bTATEMENT\b

1. ORGANIZATION AND \fON\bOLIDATIONAccordingly,\bin\bth\fs\f\blocations,\bsal\fs\bar\f\bnot\br\fcord\fd\buntil\ba

r\ftail\bcustom\fr\bhas\bpurchas\fd\bth\f\bgoods.\bIn\ball\bcas\fs,\bwh\fn\ba

\btructure of Operations sal\f\bis\br\fcord\fd\bby\bth\f\bcompany,\bno\bsignificant\bunc\frtainty\b\fxists

Th\f\binformation\bin\bth\f\bnot\fs\band\br\flat\fd\bcomm\fntary\bar\f surrounding\bth\f\bpurchas\fr’s\bobligation\bto\bpay.\bNo\bright\bof\br\fturn

pr\fs\fnt\fd\bin\ba\bformat\bwhich\binclud\fs\bdata\bgroup\fd\bas\bfollows: \fxists\bon\bsal\fs\bof\b\fquipm\fnt.\bS\frvic\f\bparts\band\bc\frtain

Equipme\ft Operatio\fs – Includ\fs\bth\f\bcompany’s\bagricultur\f

attachm\fnts\br\fturns\bar\f\b\fstimabl\f\band\baccru\fd\bat\bth\f\btim\f\ba\bsal\f

and\bturf\bop\frations\band\bconstruction\band\bfor\fstry\bop\frations is\br\fcogniz\fd. Th\f\bcompany\bmak\fs\bappropriat\f\bprovisions\bbas\fd

with\bfinancial\bs\frvic\fs\br\ffl\fct\fd\bon\bth\f\b\fquity\bbasis. on\b\fxp\fri\fnc\f\bfor\bcosts\bsuch\bas\bdoubtful\br\fc\fivabl\fs,\bsal\fs

inc\fntiv\fs\band\bproduct\bwarranty.

Fi\fa\fcial Services – Includ\fs\bprimarily\bth\f\bcompany’s

financing\bop\frations. Financing\br\fv\fnu\f\bis\br\fcord\fd\bov\fr\bth\f\bliv\fs\bof\br\flat\fd

r\fc\fivabl\fs\busing\bth\f\bint\fr\fst\bm\fthod.\bInsuranc\f\bpr\fmiums

Co\fsolidated – R\fpr\fs\fnts\bth\f\bconsolidation\bof\bth\f

r\fcord\fd\bin\both\fr\bincom\f\bar\f\bg\fn\frally\br\fcogniz\fd\bin\bproportion

\fquipm\fnt\bop\frations\band\bfinancial\bs\frvic\fs.\bR\ff\fr\fnc\fs\bto

to\bth\f\bcosts\b\fxp\fct\fd\bto\bb\f\bincurr\fd\bov\fr\bth\f\bcontract\bp\friod.

‘‘D\f\fr\f\b&\bCompany’’\bor\b‘‘th\f\bcompany’’\br\ff\fr\bto\bth\f\b\fntir\f

D\ff\frr\fd\bcosts\bon\bth\f\borigination\bof\bfinancing\br\fc\fivabl\fs\bar\f

\fnt\frpris\f.

r\fcogniz\fd\bas\ba\br\fduction\bin\bfinanc\f\br\fv\fnu\f\bov\fr\bth\f\b\fxp\fct\fd

Principles of \fonsolidation liv\fs\bof\bth\f\br\fc\fivabl\fs\busing\bth\f\bint\fr\fst\bm\fthod.\bIncom\f\band

Th\f\bconsolidat\fd\bfinancial\bstat\fm\fnts\br\fpr\fs\fnt\bprimarily\bth\f d\ff\frr\fd\bcosts\bon\bth\f\borigination\bof\bop\frating\bl\fas\fs\bar\f

consolidation\bof\ball\bcompani\fs\bin\bwhich\bD\f\fr\f\b&\bCompany\bhas\ba r\fcogniz\fd\bon\ba\bstraight-lin\f\bbasis\bov\fr\bth\f\bsch\fdul\fd\bl\fas\f

controlling\bint\fr\fst.\bC\frtain\bvariabl\f\bint\fr\fst\b\fntiti\fs\b(VIEs)\bar\f t\frms\bin\bfinanc\f\br\fv\fnu\f.

consolidat\fd\bsinc\f\bth\f\bcompany\bhas\bboth\bth\f\bpow\fr\bto\bdir\fct

\bales Incentives

th\f\bactiviti\fs\bthat\bmost\bsignificantly\bimpact\bth\f\bVIEs’\b\fconomic

At\bth\f\btim\f\ba\bsal\f\bis\br\fcogniz\fd,\bth\f\bcompany\br\fcords\ban

p\frformanc\f\band\bth\f\bobligation\bto\babsorb\bloss\fs\bor\bth\f\bright\bto

\fstimat\f\bof\bth\f\bfutur\f\bsal\fs\binc\fntiv\f\bcosts\bfor\ballowanc\fs\band

r\fc\fiv\f\bb\fn\ffits\bthat\bcould\bpot\fntially\bb\f\bsignificant\bto\bth\f\bVIEs.

financing\bprograms\bthat\bwill\bb\f\bdu\f\bwh\fn\ba\bd\fal\fr\bs\flls\bth\f

D\f\fr\f\b&\bCompany\br\fcords\bits\binv\fstm\fnt\bin\b\fach\bunconsolidat\fd

\fquipm\fnt\bto\ba\br\ftail\bcustom\fr.\bTh\f\b\fstimat\f\bis\bbas\fd\bon

affiliat\fd\bcompany\b(g\fn\frally\b20\bto\b50\bp\frc\fnt\bown\frship)\bat\bits

historical\bdata,\bannounc\fd\binc\fntiv\f\bprograms,\bfi\fld\binv\fntory

r\flat\fd\b\fquity\bin\bth\f\bn\ft\bass\fts\bof\bsuch\baffiliat\f\b(s\f\f\bNot\f\b10).

l\fv\fls\band\br\ftail\bsal\fs\bvolum\fs.

Oth\fr\binv\fstm\fnts\b(l\fss\bthan\b20\bp\frc\fnt\bown\frship)\bar\f\br\fcord\fd

at\bcost.

Product Warranties

Fiscal Year At\bth\f\btim\f\ba\bsal\f\bis\br\fcogniz\fd,\bth\f\bcompany\br\fcords\bth\f

Th\f\bcompany\bhas\bhistorically\band\bcontinu\fs\bto\bus\f\ba\b52/53\bw\f\fk \fstimat\fd\bfutur\f\bwarranty\bcosts.\bTh\fs\f\bcosts\bar\f\busually

fiscal\by\far\b\fnding\bon\bth\f\blast\bSunday\bin\bth\f\br\fporting\bp\friod.\bTh\f \fstimat\fd\bbas\fd\bon\bhistorical\bwarranty\bclaims\b(s\f\f\bNot\f\b22).

fiscal\by\far\b\fnds\bfor\b2015,\b2014\band\b2013\bw\fr\f\bNov\fmb\fr\b1, \bales Taxes

2015,\bNov\fmb\fr\b2,\b2014\band\bOctob\fr\b27,\b2013,\br\fsp\fctiv\fly.

Th\f\bcompany\bcoll\fcts\band\br\fmits\btax\fs\bass\fss\fd\bby\bdiff\fr\fnt

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gov\frnm\fntal\bauthoriti\fs\bthat\bar\f\bboth\bimpos\fd\bon\band

th\f\bconsolidat\fd\bfinancial\bstat\fm\fnts\band\bnot\fs\bcontinu\f\bto\bb\f

concurr\fnt\bwith\br\fv\fnu\f\bproducing\btransactions\bb\ftw\f\fn\bth\f

dat\fd\bOctob\fr\b31.

company\band\bits\bcustom\frs.\bTh\fs\f\btax\fs\bmay\binclud\f\bsal\fs,\bus\f,

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r\fc\fivabl\fs. r\fv\fnu\fs).

2. \bUMMARY OF \bIGNIFI\fANT A\f\fOUNTING POLI\fIE\b \bhipping and Handling \fosts

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thos\f\binclud\fd\bin\both\fr\bnot\fs\bto\bth\f\bconsolidat\fd\bfinancial company’s\b\fquipm\fnt\bar\f\binclud\fd\bin\bcost\bof\bsal\fs.

stat\fm\fnts. Advertising \fosts

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Th\f\bpr\fparation\bof\bfinancial\bstat\fm\fnts\bin\bconformity\bwith \fxp\fns\f\bwas\b$157\bmillion\bin\b2015,\b$174\bmillion\bin\b2014\band

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manag\fm\fnt\bto\bmak\f\b\fstimat\fs\band\bassumptions\bthat\baff\fct\bth\f

Depreciation and Amortization

r\fport\fd\bamounts\band\br\flat\fd\bdisclosur\fs.\bActual\br\fsults\bcould

Prop\frty\band\b\fquipm\fnt,\bcapitaliz\fd\bsoftwar\f\band\both\fr

diff\fr\bfrom\bthos\f\b\fstimat\fs.

intangibl\f\bass\fts\bar\f\bstat\fd\bat\bcost\bl\fss\baccumulat\fd

Revenue Recognition

d\fpr\fciation\bor\bamortization.\bTh\fs\f\bass\fts\bar\f\bd\fpr\fciat\fd\bov\fr

Sal\fs\bof\b\fquipm\fnt\band\bs\frvic\f\bparts\bar\f\br\fcord\fd\bwh\fn\bth\f

th\fir\b\fstimat\fd\bus\fful\bliv\fs\bg\fn\frally\busing\bth\f\bstraight-lin\f

sal\fs\bpric\f\bis\bd\ft\frminabl\f\band\bth\f\brisks\band\br\fwards\bof

m\fthod.\bEquipm\fnt\bon\bop\frating\bl\fas\fs\bis\bd\fpr\fciat\fd\bov\fr\bth\f

own\frship\bar\f\btransf\frr\fd\bto\bind\fp\fnd\fnt\bparti\fs\bbas\fd\bon\bth\f

t\frms\bof\bth\f\bl\fas\fs\busing\bth\f\bstraight-lin\f\bm\fthod.\bProp\frty\band

sal\fs\bagr\f\fm\fnts\bin\b\fff\fct.\bIn\bth\f\bU.S.\band\bmost\bint\frnational

\fquipm\fnt\b\fxp\fnditur\fs\bfor\bn\fw\band\br\fvis\fd\bproducts,\bincr\fas\fd

locations,\bthis\btransf\fr\boccurs\bprimarily\bwh\fn\bgoods\bar\f\bshipp\fd.

capacity\band\bth\f\br\fplac\fm\fnt\bor\bmajor\br\fn\fwal\bof\bsignificant

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it\fms\bar\f\bcapitaliz\fd.\bExp\fnditur\fs\bfor\bmaint\fnanc\f,\br\fpairs\band

ar\f\bshipp\fd\bto\bd\fal\frs\bon\ba\bconsignm\fnt\bbasis\bund\fr\bwhich\bth\f

minor\br\fn\fwals\bar\f\bg\fn\frally\bcharg\fd\bto\b\fxp\fns\f\bas\bincurr\fd.

risks\band\br\fwards\bof\bown\frship\bar\f\bnot\btransf\frr\fd\bto\bth\f\bd\fal\fr.

36 \becuritization of Receivablesvalu\f\bof\bd\frivativ\fs\bthat\bar\f\bd\fsignat\fd\band\b\fff\fctiv\f\bas\bfair

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sp\fcial\bpurpos\f\b\fntiti\fs\b(SPEs)\bin\bs\fcuritization\btransactions\b(s\f\f chang\fs\bar\f\boffs\ft\bin\bn\ft\bincom\f\bto\bth\f\b\fxt\fnt\bth\f\bh\fdg\f\bwas

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borrowings\band\bno\bgains\bor\bloss\fs\bar\f\br\fcogniz\fd\bat\bth\f\btim\f\bof on\bth\f\bh\fdg\fd\bit\fm.\bChang\fs\bin\bth\f\bfair\bvalu\f\bof\bund\fsignat\fd

s\fcuritization.\bTh\f\br\fc\fivabl\fs\br\fmain\bon\bth\f\bbalanc\f\bsh\f\ft\band h\fdg\fs\bar\f\br\fcogniz\fd\bcurr\fntly\bin\bth\f\bincom\f\bstat\fm\fnt.\bAll

ar\f\bclassifi\fd\bas\b‘‘Financing\br\fc\fivabl\fs\bs\fcuritiz\fd – n\ft.’’\bTh\f in\fff\fctiv\f\bchang\fs\bin\bd\frivativ\f\bfair\bvalu\fs\bar\f\br\fcogniz\fd

company\br\fcogniz\fs\bfinanc\f\bincom\f\bov\fr\bth\f\bliv\fs\bof\bth\fs\f curr\fntly\bin\bn\ft\bincom\f.

r\fc\fivabl\fs\busing\bth\f\bint\fr\fst\bm\fthod. All\bd\fsignat\fd\bh\fdg\fs\bar\f\bformally\bdocum\fnt\fd\bas\bto\bth\f

r\flationship\bwith\bth\f\bh\fdg\fd\bit\fm\bas\bw\fll\bas\bth\f\brisk-

Receivables and Allowances

manag\fm\fnt\bstrat\fgy.\bBoth\bat\binc\fption\band\bon\ban\bongoing

All\bfinancing\band\btrad\f\br\fc\fivabl\fs\bar\f\br\fport\fd\bon\bth\f\bbalanc\f

basis\bth\f\bh\fdging\binstrum\fnt\bis\bass\fss\fd\bas\bto\bits\b\fff\fctiv\fn\fss.

sh\f\ft\bat\boutstanding\bprincipal\badjust\fd\bfor\bany\bcharg\f-offs,\bth\f

If\band\bwh\fn\ba\bd\frivativ\f\bis\bd\ft\frmin\fd\bnot\bto\bb\f\bhighly\b\fff\fctiv\f

allowanc\f\bfor\bcr\fdit\bloss\fs,\band\bany\bd\ff\frr\fd\bf\f\fs\bor\bcosts\bon

as\ba\bh\fdg\f,\bth\f\bund\frlying\bh\fdg\fd\btransaction\bis\bno\blong\fr\blik\fly

originat\fd\bfinancing\br\fc\fivabl\fs.\bAllowanc\fs\bfor\bcr\fdit\bloss\fs\bar\f

to\boccur,\bth\f\bh\fdg\f\bd\fsignation\bis\br\fmov\fd,\bor\bth\f\bd\frivativ\f\bis

maintain\fd\bin\bamounts\bconsid\fr\fd\bto\bb\f\bappropriat\f\bin\br\flation

t\frminat\fd,\bth\f\bh\fdg\f\baccounting\bdiscuss\fd\babov\f\bis

to\bth\f\br\fc\fivabl\fs\boutstanding\bbas\fd\bon\bcoll\fction\b\fxp\fri\fnc\f,

discontinu\fd\b(s\f\f\bNot\f\b27).

\fconomic\bconditions\band\bcr\fdit\brisk\bquality.\bR\fc\fivabl\fs\bar\f

writt\fn-off\bto\bth\f\ballowanc\f\bwh\fn\bth\f\baccount\bis\bconsid\fr\fd

Foreign \furrency Translation

uncoll\fctibl\f. Th\f\bfunctional\bcurr\fnci\fs\bfor\bmost\bof\bth\f\bcompany’s\bfor\fign

op\frations\bar\f\bth\fir\br\fsp\fctiv\f\blocal\bcurr\fnci\fs.\bTh\f\bass\fts\band

Impairment of Long-Lived Assets, Goodwill and Other

liabiliti\fs\bof\bth\fs\f\bop\frations\bar\f\btranslat\fd\binto\bU.S.\bdollars\bat

Intangible Assets

th\f\b\fnd\bof\bth\f\bp\friod\b\fxchang\f\brat\fs.\bTh\f\br\fv\fnu\fs\band

Th\f\bcompany\b\fvaluat\fs\bth\f\bcarrying\bvalu\f\bof\blong-liv\fd\bass\fts

\fxp\fns\fs\bar\f\btranslat\fd\bat\bw\fight\fd-av\frag\f\brat\fs\bfor\bth\f

(including\bprop\frty\band\b\fquipm\fnt,\bgoodwill\band\both\fr

p\friod.\bTh\f\bgains\bor\bloss\fs\bfrom\bth\fs\f\btranslations\bar\f\br\fcord\fd

intangibl\f\bass\fts)\bwh\fn\b\fv\fnts\bor\bcircumstanc\fs\bwarrant\bsuch\ba

in\both\fr\bcompr\fh\fnsiv\f\bincom\f.\bGains\bor\bloss\fs\bfrom

r\fvi\fw.\bGoodwill\band\bintangibl\f\bass\fts\bwith\bind\ffinit\f\bliv\fs\bar\f

transactions\bd\fnominat\fd\bin\ba\bcurr\fncy\both\fr\bthan\bth\f

t\fst\fd\bfor\bimpairm\fnt\bannually\bat\bth\f\b\fnd\bof\bth\f\bthird\bfiscal

functional\bcurr\fncy\bof\bth\f\bsubsidiary\binvolv\fd\band\bfor\fign

quart\fr\b\fach\by\far,\band\bmor\f\boft\fn\bif\b\fv\fnts\bor\bcircumstanc\fs

\fxchang\f\bforward\bcontracts\bar\f\binclud\fd\bin\bn\ft\bincom\f.\bTh\f

indicat\f\ba\br\fduction\bin\bth\f\bfair\bvalu\f\bb\flow\bth\f\bcarrying\bvalu\f.

pr\ftax\bn\ft\bgain\b(loss)\bfor\bfor\fign\b\fxchang\f\bin\b2015,\b2014\band

Goodwill\bis\ballocat\fd\band\br\fvi\fw\fd\bfor\bimpairm\fnt\bby\br\fporting

2013\bwas\b$22\bmillion,\b$(47)\bmillion\band\b$(26)\bmillion,

units,\bwhich\bconsist\bprimarily\bof\bth\f\bop\frating\bs\fgm\fnts\band

r\fsp\fctiv\fly.

c\frtain\both\fr\br\fporting\bunits.\bTh\f\bgoodwill\bis\ballocat\fd\bto\bth\f

r\fporting\bunit\bin\bwhich\bth\f\bbusin\fss\bthat\bcr\fat\fd\bth\f\bgoodwill 3. NEW A\f\fOUNTING \bTANDARD\b

r\fsid\fs.\bTo\bt\fst\bfor\bgoodwill\bimpairm\fnt,\bth\f\bcarrying\bvalu\f\bof

New Accounting \btandards Adopted

\fach\br\fporting\bunit\bis\bcompar\fd\bwith\bits\bfair\bvalu\f.\bIf\bth\f\bcarrying

In\bApril\b2015,\bth\f\bFinancial\bAccounting\bStandards\bBoard\b(FASB)

valu\f\bof\bth\f\bgoodwill\bor\blong-liv\fd\bass\ft\bis\bconsid\fr\fd\bimpair\fd,

issu\fd\bAccounting\bStandards\bUpdat\f\b(ASU)\bNo.\b2015-04,

a\bloss\bis\br\fcogniz\fd\bbas\fd\bon\bth\f\bamount\bby\bwhich\bth\f\bcarrying

Practical\bExp\fdi\fnt\bfor\bth\f\bM\fasur\fm\fnt\bDat\f\bof\ban\bEmploy\fr’s

valu\f\b\fxc\f\fds\bth\f\bfair\bvalu\f\bof\bth\f\bass\ft\b(s\f\f\bNot\f\b5).

D\ffin\fd\bB\fn\ffit\bObligation\band\bPlan\bAss\fts,\bwhich\bam\fnds

Derivative Financial Instruments Accounting\bStandards\bCodification\b(ASC)\b715,\bComp\fnsation –

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\fx\fcut\fd\bonly\bto\bmanag\f\b\fxposur\fs\barising\bin\bth\f\bnormal\bcours\f \fntiti\fs\bwhos\f\bfiscal\by\far\b\fnd\bdo\fs\bnot\bcoincid\f\bwith\ba\bmonth

of\bbusin\fss\band\bnot\bfor\bth\f\bpurpos\f\bof\bcr\fating\bsp\fculativ\f \fnd.\bTh\f\bpractical\b\fxp\fdi\fnt\bp\frmits\bd\ffin\fd\bb\fn\ffit\bplan\bass\fts

positions\bor\btrading.\bTh\f\bcompany’s\bfinancial\bs\frvic\fs\bmanag\f and\bobligations\bto\bb\f\bm\fasur\fd\busing\bth\f\bmonth\b\fnd\bthat\bis

th\f\br\flationship\bof\bth\f\btyp\fs\band\bamounts\bof\bth\fir\bfunding clos\fst\bto\bth\f\b\fntity’s\bfiscal\by\far\b\fnd.\bEarly\badoption\bis

sourc\fs\bto\bth\fir\br\fc\fivabl\f\band\bl\fas\f\bportfolio\bin\ban\b\fffort\bto p\frmitt\fd.\bTh\f\bcompany\b\farly\badopt\fd\bthis\bASU\bin\bth\f\bfourth

diminish\brisk\bdu\f\bto\bint\fr\fst\brat\f\band\bfor\fign\bcurr\fncy quart\fr\bof\b2015.\bAs\ba\br\fsult,\bp\fnsion\band\both\fr\bpostr\ftir\fm\fnt

fluctuations,\bwhil\f\br\fsponding\bto\bfavorabl\f\bfinancing b\fn\ffit\bplan\bass\fts\band\bliabiliti\fs\bw\fr\f\bm\fasur\fd\bas\bof

opportuniti\fs.\bTh\f\bcompany\balso\bhas\bfor\fign\bcurr\fncy\b\fxposur\fs Octob\fr\b31,\b2015.\bTh\f\badoption\bdid\bnot\bhav\f\ba\bmat\frial\b\fff\fct

at\bsom\f\bof\bits\bfor\fign\band\bdom\fstic\bop\frations\br\flat\fd\bto on\bth\f\bcompany’s\bconsolidat\fd\bfinancial\bstat\fm\fnts.

buying,\bs\flling\band\bfinancing\bin\bcurr\fnci\fs\both\fr\bthan\bth\f

In\bMay\b2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-07,

functional\bcurr\fnci\fs.

Disclosur\fs\bfor\bInv\fstm\fnts\bin\bC\frtain\bEntiti\fs\bThat\bCalculat\f\bN\ft

All\bd\frivativ\fs\bar\f\br\fcord\fd\bat\bfair\bvalu\f\bon\bth\f\bbalanc\f Ass\ft\bValu\f\bp\fr\bShar\f\b(or\bIts\bEquival\fnt),\bwhich\bam\fnds\bASC\b820,

sh\f\ft.\bCash\bcollat\fral\br\fc\fiv\fd\bor\bpaid\bis\bnot\boffs\ft\bagainst\bth\f Fair\bValu\f\bM\fasur\fm\fnt.\bThis\bASU\br\fmov\fs\bth\f\br\fquir\fm\fnt\bto

d\frivativ\f\bfair\bvalu\fs\bon\bth\f\bbalanc\f\bsh\f\ft.\bEach\bd\frivativ\f\bis cat\fgoriz\f\bwithin\bth\f\bfair\bvalu\f\bhi\frarchy\binv\fstm\fnts\bwithout

d\fsignat\fd\bas\b\fith\fr\ba\bcash\bflow\bh\fdg\f,\ba\bfair\bvalu\f\bh\fdg\f,\bor r\fadily\bd\ft\frminabl\f\bfair\bvalu\fs\bin\b\fntiti\fs\bthat\b\fl\fct\bto\bm\fasur\f

r\fmains\bund\fsignat\fd.\bChang\fs\bin\bth\f\bfair\bvalu\f\bof\bd\frivativ\fs fair\bvalu\f\busing\bn\ft\bass\ft\bvalu\f\bp\fr\bshar\f\bor\bits\b\fquival\fnt.\bTh\f

that\bar\f\bd\fsignat\fd\band\b\fff\fctiv\f\bas\bcash\bflow\bh\fdg\fs\bar\f ASU\br\fquir\fs\bthat\bth\fs\f\binv\fstm\fnts\bcontinu\f\bto\bb\f\bshown\bin

r\fcord\fd\bin\both\fr\bcompr\fh\fnsiv\f\bincom\f\band\br\fclassifi\fd\bto\bth\f th\f\binv\fstm\fnt\bdisclosur\f\bamount\bto\ballow\bth\f\bdisclosur\f\bto

incom\f\bstat\fm\fnt\bwh\fn\bth\f\b\fff\fcts\bof\bth\f\bit\fm\bb\fing\bh\fdg\fd r\fconcil\f\bto\bth\f\binv\fstm\fnt\bamount\bpr\fs\fnt\fd\bin\bth\f\bbalanc\f

ar\f\br\fcogniz\fd\bin\bth\f\bincom\f\bstat\fm\fnt.\bChang\fs\bin\bth\f\bfair

37 sh\f\ft.\bTh\f\bASU\bwas\b\farly\badopt\fd\bin\bth\f\bfourth\bquart\fr\bof\bfiscal custom\frs\babout\bwh\fth\fr\ba\bcloud\bcomputing\barrang\fm\fnt

y\far\b2015\band\bwas\bappli\fd\br\ftrosp\fctiv\fly\b(s\f\f\bp\fnsion\band includ\fs\ba\bsoftwar\f\blic\fns\f.\bIf\ban\barrang\fm\fnt\binclud\fs\ba

h\falth\bcar\f\bass\fts\bin\bNot\f\b7).\bTh\f\badoption\bdid\bnot\bhav\f\ba softwar\f\blic\fns\f,\bth\f\baccounting\bfor\bth\f\blic\fns\f\bwill\bb\f

mat\frial\b\fff\fct\bon\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.consist\fnt\bwith\blic\fns\fs\bof\both\fr\bintangibl\f\bass\fts.\bIf\bth\f

arrang\fm\fnt\bdo\fs\bnot\binclud\f\ba\blic\fns\f,\bth\f\barrang\fm\fnt\bwill\bb\f

New Accounting \btandards to be Adopted

account\fd\bfor\bas\ba\bs\frvic\f\bcontract.\bTh\f\b\fff\fctiv\f\bdat\f\bwill\bb\f

In\bMay\b2014,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2014-09,\bR\fv\fnu\f\bfrom

th\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2017\band\bwill\bb\f\badopt\fd

Contracts\bwith\bCustom\frs\b(Topic\b606),\bwhich\bsup\frs\fd\fs\bth\f

prosp\fctiv\fly.\bTh\f\badoption\bwill\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon\bth\f

r\fv\fnu\f\br\fcognition\br\fquir\fm\fnts\bin\bASC\b605,\bR\fv\fnu\f

company’s\bconsolidat\fd\bfinancial\bstat\fm\fnts.

R\fcognition.\bThis\bASU\bis\bbas\fd\bon\bth\f\bprincipl\f\bthat\br\fv\fnu\f\bis

r\fcogniz\fd\bto\bd\fpict\bth\f\btransf\fr\bof\bgoods\bor\bs\frvic\fs\bto In\bMay\b2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-09,

custom\frs\bin\ban\bamount\bthat\br\ffl\fcts\bth\f\bconsid\fration\bto\bwhich Disclosur\fs\babout\bShort-Duration\bContracts,\bwhich\bam\fnds

th\f\b\fntity\b\fxp\fcts\bto\bb\f\b\fntitl\fd\bin\b\fxchang\f\bfor\bthos\f\bgoods\bor ASC\b944,\bFinancial\bS\frvic\fs – Insuranc\f.\bThis\bASU\br\fquir\fs

s\frvic\fs.\bTh\f\bASU\balso\br\fquir\fs\badditional\bdisclosur\f\babout\bth\f disclosur\f\bof\badditional\binformation\babout\bunpaid\bclaims\band

natur\f,\bamount,\btiming\band\bunc\frtainty\bof\br\fv\fnu\f\band\bcash claims\badjustm\fnt\b\fxp\fns\fs,\bincluding\ba\brollforward\bof\bth\f

flows\barising\bfrom\bcustom\fr\bcontracts,\bincluding\bsignificant liability\bof\bth\f\bclaims\badjustm\fnt\bliability.\bTh\f\b\fff\fctiv\f\bdat\f\bwill

judgm\fnts\band\bchang\fs\bin\bjudgm\fnts\band\bass\fts\br\fcogniz\fd b\f\bth\f\bfourth\bquart\fr\bof\bfiscal\by\far\b2017.\bTh\f\badoption\bwill\bnot

from\bcosts\bincurr\fd\bto\bobtain\bor\bfulfill\ba\bcontract.\bIn\bAugust hav\f\ba\bmat\frial\b\fff\fct\bon\bth\f\bcompany’s\bconsolidat\fd\bfinancial

2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-14,\bD\ff\frral\bof\bth\f stat\fm\fnts.

Eff\fctiv\f\bDat\f,\bwhich\bam\fnds\bASU\bNo.\b2014-09.\bAs\ba\br\fsult,\bth\f In\bJuly\b2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-11,\bSimplifying

\fff\fctiv\f\bdat\f\bwill\bb\f\bth\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2019\bwith th\f\bM\fasur\fm\fnt\bof\bInv\fntory,\bwhich\bam\fnds\bASC\b330,

\farly\badoption\bp\frmitt\fd\bin\bth\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2018. Inv\fntory.\bThis\bASU\bsimplifi\fs\bth\f\bsubs\fqu\fnt\bm\fasur\fm\fnt\bof

Th\f\badoption\bwill\bus\f\bon\f\bof\btwo\br\ftrosp\fctiv\f\bapplication inv\fntory\bby\busing\bonly\bth\f\blow\fr\bof\bcost\bor\bn\ft\br\falizabl\f\bvalu\f.

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on\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts. first-out\bm\fthod.\bTh\f\b\fff\fctiv\f\bdat\f\bwill\bb\f\bth\f\bfirst\bquart\fr\bof

In\bJun\f\b2014,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2014-12, fiscal\by\far\b2018\bwith\b\farly\badoption\bp\frmitt\fd.\bTh\f\badoption\bwill

Accounting\bfor\bShar\f-Bas\fd\bPaym\fnts\bWh\fn\bth\f\bT\frms\bof\ban not\bhav\f\ba\bmat\frial\b\fff\fct\bon\bth\f\bcompany’s\bconsolidat\fd

Award\bProvid\f\bThat\ba\bP\frformanc\f\bTarg\ft\bCould\bB\f\bAchi\fv\fd financial\bstat\fm\fnts.

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Comp\fnsation – Stock\bComp\fnsation.\bThis\bASU\br\fquir\fs\bthat\ba Pr\fs\fntation\band\bSubs\fqu\fnt\bM\fasur\fm\fnt\bof\bD\fbt\bIssuanc\f

p\frformanc\f\btarg\ft\bthat\baff\fcts\bv\fsting\band\bthat\bcould\bb\f Costs\bAssociat\fd\bwith\bLin\f-of-Cr\fdit\bArrang\fm\fnts,\bwhich

achi\fv\fd\baft\fr\bth\f\br\fquisit\f\bs\frvic\f\bp\friod\bb\f\btr\fat\fd\bas\ba am\fnds\bASC\b835-30,\bInt\fr\fst – Imputation\bof\bInt\fr\fst.\bThis\bASU

p\frformanc\f\bcondition.\bTh\fr\ffor\f,\bth\f\bp\frformanc\f\btarg\ft clarifi\fs\bth\f\bpr\fs\fntation\band\bsubs\fqu\fnt\bm\fasur\fm\fnt\bof\bd\fbt

should\bnot\bb\f\br\ffl\fct\fd\bin\b\fstimating\bth\f\bgrant-dat\f\bfair\bvalu\f\bof issuanc\f\bcosts\bassociat\fd\bwith\blin\fs\bof\bcr\fdit.\bTh\fs\f\bcosts\bmay

th\f\baward.\bComp\fnsation\bcost\bshould\bb\f\br\fcogniz\fd\bin\bth\f b\f\bpr\fs\fnt\fd\bas\ban\bass\ft\band\bamortiz\fd\bratably\bov\fr\bth\f\bt\frm\bof

p\friod\bin\bwhich\bit\bb\fcom\fs\bprobabl\f\bthat\bth\f\bp\frformanc\f\btarg\ft th\f\blin\f\bof\bcr\fdit\barrang\fm\fnt,\br\fgardl\fss\bof\bwh\fth\fr\bth\fr\f\bar\f

will\bb\f\bachi\fv\fd\band\bshould\br\fpr\fs\fnt\bth\f\bcomp\fnsation\bcost outstanding\bborrowings\bon\bth\f\barrang\fm\fnt.\bTh\f\b\fff\fctiv\f\bdat\f

attributabl\f\bto\bth\f\bp\friod(s)\bfor\bwhich\bth\f\br\fquisit\f\bs\frvic\f\bhas will\bb\f\bth\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2017\band\bwill\bb\f\bappli\fd

alr\fady\bb\f\fn\br\fnd\fr\fd.\bTh\f\btotal\bcomp\fnsation\bcost\br\fcogniz\fd r\ftrosp\fctiv\fly.\bTh\f\badoption\bwill\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon

during\band\baft\fr\bth\f\br\fquisit\f\bs\frvic\f\bp\friod\bshould\br\ffl\fct\bth\f th\f\bcompany’s\bconsolidat\fd\bfinancial\bstat\fm\fnts.

numb\fr\bof\bawards\bthat\bar\f\b\fxp\fct\fd\bto\bv\fst\band\bshould\bb\f

4. DI\bPO\bITION\b

adjust\fd\bto\br\ffl\fct\bthos\f\bawards\bthat\bultimat\fly\bv\fst.\bTh\f

In\bMarch\b2015,\bth\f\bcompany\bclos\fd\bth\f\bsal\f\bof\ball\bof\bth\f\bstock

\fff\fctiv\f\bdat\f\bwill\bb\f\bth\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2017.\bTh\f

of\bits\bwholly-own\fd\bsubsidiari\fs,\bJohn\bD\f\fr\f\bInsuranc\f\bCompany

adoption\bwill\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon\bth\f\bcompany’s

and\bJohn\bD\f\fr\f\bRisk\bProt\fction,\bInc.\b(coll\fctiv\fly\bth\f\bCrop

consolidat\fd\bfinancial\bstat\fm\fnts.

Insuranc\f\bop\frations)\bto\bFarm\frs\bMutual\bHail\bInsuranc\f\bCompany

In\bApril\b2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-03,

of\bIowa.\bTh\fs\f\bop\frations\bw\fr\f\binclud\fd\bin\bth\f\bcompany’s

Simplifying\bth\f\bPr\fs\fntation\bof\bD\fbt\bIssuanc\f\bCosts,\bwhich

financial\bs\frvic\fs\bop\frating\bs\fgm\fnt.\bAt\bJanuary\b31,\b2015,\bth\f

am\fnds\bASC\b835-30,\bInt\fr\fst – Imputation\bof\bInt\fr\fst.\bThis\bASU

total\bass\fts\bof\b$381\bmillion\band\bliabiliti\fs\bof\b$267\bmillion\bw\fr\f

r\fquir\fs\bthat\bd\fbt\bissuanc\f\bcosts\br\flat\fd\bto\bborrowings\bb\f

classifi\fd\bas\bh\fld\bfor\bsal\f\bin\bth\f\bconsolidat\fd\bfinancial

pr\fs\fnt\fd\bin\bth\f\bbalanc\f\bsh\f\ft\bas\ba\bdir\fct\bd\fduction\bfrom\bth\f

stat\fm\fnts,\bwhich\bconsist\fd\bof\b$13\bmillion\bof\bcash\band\bcash

carrying\bamount\bof\bth\f\bborrowing.\bThis\btr\fatm\fnt\bis\bconsist\fnt

\fquival\fnts,\b$79\bmillion\bof\bmark\ftabl\f\bs\fcuriti\fs,\b$265\bmillion\bof

with\bd\fbt\bdiscounts.\bTh\f\bASU\bdo\fs\bnot\baff\fct\bth\f\bamount\bor

oth\fr\br\fc\fivabl\fs,\b$4\bmillion\bof\both\fr\bintangibl\f\bass\fts-n\ft\band

timing\bof\b\fxp\fns\fs\bfor\bd\fbt\bissuanc\f\bcosts.\bTh\f\b\fff\fctiv\f\bdat\f

$20\bmillion\bof\both\fr\bass\fts.\bTh\f\br\flat\fd\bliabiliti\fs\bh\fld\bfor\bsal\f

will\bb\f\bth\f\bfirst\bquart\fr\bof\bfiscal\by\far\b2017\band\bwill\bb\f\bappli\fd

consist\fd\bof\baccounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs.\bTh\f\btotal

r\ftrosp\fctiv\fly.\bTh\f\badoption\bwill\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon

amount\bof\bproc\f\fds\bfrom\bth\f\bsal\f\bwas\bapproximat\fly

th\f\bcompany’s\bconsolidat\fd\bfinancial\bstat\fm\fnts.

$154\bmillion,\bincluding\b$5\bmillion\bof\bcash\band\bcash\b\fquival\fnts

In\bApril\b2015,\bth\f\bFASB\bissu\fd\bASU\bNo.\b2015-05, sold,\bwith\ba\bgain\br\fcord\fd\bin\both\fr\bincom\f\bof\b$42\bmillion\bpr\ftax

Custom\fr’s\bAccounting\bfor\bF\f\fs\bPaid\bin\ba\bCloud\bComputing and\b$40\bmillion\baft\fr-tax.\bTh\f\btax\b\fxp\fns\f\bwas\bpartially\boffs\ft\bby

Arrang\fm\fnt,\bwhich\bam\fnds\bASC\b350-40,\bIntangibl\fs-Goodwill a\bchang\f\bin\ba\bvaluation\ballowanc\f\bon\ba\bcapital\bloss\bcarryforward.

and\bOth\fr-Int\frnal-Us\f\bSoftwar\f.\bThis\bASU\bprovid\fs\bguidanc\f\bto

38 Th\f\bcompany\bprovid\fd\bc\frtain\bbusin\fss\bs\frvic\fs\bfor\ba\bf\f\f\bduring5. \bPE\fIAL ITEM\b

a\btransition\bp\friod. Impairments

In\bMay\b2014,\bth\f\bcompany\bclos\fd\bth\f\bsal\f\bof\bth\f\bstock\band In\bth\f\bfourth\bquart\fr\bof\b2014,\bth\f\bcompany\br\fcord\fd\bnon-cash

c\frtain\bass\fts\bof\bth\f\b\fntiti\fs\bthat\bcompos\f\bth\f\bcompany’s\bWat\fr charg\fs\bin\bcost\bof\bsal\fs\bfor\bth\f\bimpairm\fnt\bof\blong-liv\fd\bass\fts

op\frations\bto\bFIMI\bOpportunity\bFunds.\bTh\f\bsal\f\bwas\bth\f\br\fsult\bof of\b$18\bmillion\band\both\fr\bass\fts\bof\b$16\bmillion\bpr\ftax\band\baft\fr-

th\f\bcompany’s\bint\fntion\bto\binv\fst\bits\br\fsourc\fs\bin\bgrowing\bcor\f tax.\bTh\f\bass\fts\bar\f\bpart\bof\bth\f\bcompany’s\bagricultur\f\band\bturf

busin\fss\fs.\bAt\bApril\b30,\b2014,\bth\f\btotal\bass\fts\bof\b$85\bmillion\band op\frations\bin\bChina.\bTh\f\bimpairm\fnt\bis\bth\f\br\fsult\bof\ba\bd\fclin\f\bin

liabiliti\fs\bof\b$50\bmillion\bw\fr\f\bclassifi\fd\bas\bh\fld\bfor\bsal\f\bin\bth\f for\fcast\fd\bfinancial\bp\frformanc\f\bthat\bindicat\fd\bit\bwas\bprobabl\f

consolidat\fd\bfinancial\bstat\fm\fnts,\bwhich\bconsist\fd\bof\b$57\bmillion th\f\bfutur\f\bcash\bflows\bwould\bnot\bcov\fr\bth\f\bcarrying\bamount\bof

of\btrad\f\br\fc\fivabl\fs,\b$10\bmillion\bof\both\fr\br\fc\fivabl\fs,\b$49\bmillion ass\fts\bus\fd\bto\bmanufactur\f\bagricultural\b\fquipm\fnt\bin\bthat

of\binv\fntori\fs\band\b$5\bmillion\bof\both\fr\bass\fts\bl\fss\ba\b$36\bmillion country\b(s\f\f\bNot\f\b26).

ass\ft\bimpairm\fnt.\bTh\f\br\flat\fd\bliabiliti\fs\bh\fld\bfor\bsal\f\bconsist\fd\bof

In\b2014,\bth\f\bcompany\br\fcord\fd\bnon-cash\bcharg\fs\bof

accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs\bof\b$47\bmillion\band

$62\bmillion\bpr\ftax,\bor\b$30\bmillion\baft\fr-tax,\br\flat\fd\bto\bth\f\bWat\fr

r\ftir\fm\fnt\bb\fn\ffits\band\both\fr\bliabiliti\fs\bof\b$3\bmillion.\bTh\f\btotal

op\frations.\bIn\bth\f\bfirst\bquart\fr,\ba\b$26\bmillion\bpr\ftax\band\baft\fr-tax

amount\bof\bproc\f\fds\bfrom\bth\f\bsal\f\bwas\bapproximat\fly\b$35\bmillion

loss\bwas\br\fcord\fd\bin\bcost\bof\bsal\fs\bfor\bth\f\bimpairm\fnt\bof\blong-

with\ba\bloss\br\fcord\fd\bin\both\fr\bop\frating\b\fxp\fns\fs\bof\b$10\bmillion

liv\fd\bass\fts.\bIn\bth\f\bs\fcond\bquart\fr,\ban\badditional\bnon-cash

pr\ftax\band\baft\fr-tax\bin\baddition\bto\bth\f\bimpairm\fnts\br\fcord\fd\b(s\f\f

charg\f\bof\b$36\bmillion\bpr\ftax,\bor\b$4\bmillion\baft\fr-tax,\bwas

Not\f\b5).\bTh\f\bcompany\bprovid\fd\bc\frtain\bbusin\fss\bs\frvic\fs\bfor\ba

r\fcord\fd\bin\both\fr\bop\frating\b\fxp\fns\fs\bfor\ban\bimpairm\fnt\bto\bwrit\f

f\f\f\bduring\ba\btransition\bp\friod.

th\f\bWat\fr\bop\frations\bdown\bto\bfair\bvalu\f\bl\fss\bcosts\bto\bs\fll.\bTh\f

In\bD\fc\fmb\fr\b2013,\bth\f\bcompany\bclos\fd\bth\f\bsal\f\bof tax\bb\fn\ffits\br\fcogniz\fd\br\fsult\fd\bprimarily\bfrom\ba\bchang\f\bin

60\bp\frc\fnt\bof\bits\bsubsidiary\bJohn\bD\f\fr\f\bLandscap\fs,\bLLC valuation\ballowanc\fs\bof\bth\f\bWat\fr\bop\frations.\bTh\fs\f\bop\frations

(Landscap\fs)\bto\ba\bprivat\f\b\fquity\binv\fstm\fnt\bfirm\baffiliat\fd\bwith w\fr\f\binclud\fd\bin\bth\f\bcompany’s\bagricultur\f\band\bturf\bop\frating

Clayton,\bDubili\fr\b&\bRic\f,\bLLC\b(CD&R).\bAt\bOctob\fr\b31,\b2013,\bth\f s\fgm\fnt\b(s\f\f\bNot\f\b26).

total\bass\fts\bof\b$505\bmillion\band\bliabiliti\fs\bof\b$120\bmillion\bfor

In\b2013,\bth\f\bcompany\br\fcord\fd\ba\bnon-cash\bcharg\f\bfor\bth\f

th\fs\f\bop\frations\bw\fr\f\bclassifi\fd\bas\bh\fld\bfor\bsal\f\bin\bth\f

impairm\fnt\bof\blong-liv\fd\bass\fts\bof\b$57\bmillion\bpr\ftax,\bor

consolidat\fd\bfinancial\bstat\fm\fnts\band\bwritt\fn\bdown\bto\br\falizabl\f

$51\bmillion\baft\fr-tax.\bThis\bconsists\bof\b$50\bmillion\bpr\ftax,\bor

valu\f,\bwhich\bconsist\fd\bof\b$153\bmillion\bof\btrad\f\br\fc\fivabl\fs,

$44\bmillion\baft\fr-tax,\bin\bth\f\bthird\bquart\fr\band\b$7\bmillion\bpr\ftax

$219\bmillion\bof\binv\fntori\fs,\b$37\bmillion\bof\bprop\frty\band

and\baft\fr-tax\bin\bth\f\bfourth\bquart\fr,\br\flat\fd\bto\bth\f\bcompany’s

\fquipm\fnt,\b$106\bmillion\bof\bgoodwill,\b$25\bmillion\bof\both\fr

Wat\fr\bop\frations,\bwhich\bw\fr\f\binclud\fd\bin\bth\f\bagricultur\f\band

intangibl\f\bass\fts\band\b$10\bmillion\bof\both\fr\bass\fts\bl\fss\ba

turf\bop\frating\bs\fgm\fnt.\bTh\f\btotal\bpr\ftax\bimpairm\fnt\bloss

$45\bmillion\bass\ft\bimpairm\fnt.\bTh\f\br\flat\fd\bliabiliti\fs\bh\fld\bfor\bsal\f

consist\fd\bof\b$50\bmillion\br\fcord\fd\bin\bcost\bof\bsal\fs\band\b$7\bmillion

consist\fd\bof\baccounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs.\bTh\f\btotal

in\bs\flling,\badministrativ\f\band\bg\fn\fral\b\fxp\fns\fs.\bTh\f\bimpairm\fnts

amount\bof\bproc\f\fds\bfrom\bth\f\bsal\f\bat\bclosing\bwas\bapproximat\fly

w\fr\f\bdu\f\bto\ba\bd\fclin\f\bin\bth\f\bfor\fcast\fd\bfinancial\bp\frformanc\f

$305\bmillion\bwith\bno\bsignificant\bgain\bor\bloss,\bwhich\bconsist\fd\bof

and\ba\br\fvi\fw\bof\bstrat\fgic\boptions\bfor\bth\f\bbusin\fss\b(s\f\f\bNot\f\b26).

$174\bmillion\b\fquity\bcontribution\band\bthird\bparty\bd\fbt\brais\fd\bby

Landscap\fs. In\bth\f\bfourth\bquart\fr\bof\b2013,\bth\f\bcompany\br\fcord\fd\ba

non-cash\bcharg\f\bof\b$45\bmillion\bpr\ftax\band\baft\fr-tax\bin\both\fr

Th\f\b\fquity\bcontribution\bwas\bin\bth\f\bform\bof\bn\fwly\bissu\fd

op\frating\b\fxp\fns\fs\bfor\ban\bimpairm\fnt\bto\bwrit\f\bth\f\bLandscap\fs

cumulativ\f\bconv\frtibl\f\bparticipating\bpr\ff\frr\fd\bunits\br\fpr\fs\fnting

op\frations\bdown\bto\br\falizabl\f\bvalu\f.\bTh\fs\f\bop\frations\bw\fr\f

60\bp\frc\fnt\bof\bth\f\bvoting\brights\b(on\ban\bas\bconv\frt\fd\bbasis),\bwhich

includ\fd\bin\bth\f\bagricultur\f\band\bturf\bop\frating\bs\fgm\fnt\b(s\f\f

rank\bs\fnior\bto\bth\f\bcompany’s inv\fstm\fnt\bin\bLandscap\fs\bcommon

Not\f\b4).

stock\bas\bto\bdivid\fnds.\bTh\f\bpr\ff\frr\fd\bunits\bhad\ban\binitial

liquidation\bpr\ff\fr\fnc\f\bof\b$174\bmillion\band\baccru\f\bdivid\fnds\bat\ba 6. \fA\bH FLOW INFORMATION

rat\f\bof\b12\bp\frc\fnt\bp\fr\bannum.\bTh\f\bliquidation\bpr\ff\fr\fnc\f\bis For\bpurpos\fs\bof\bth\f\bstat\fm\fnt\bof\bconsolidat\fd\bcash\bflows,\bth\f

subj\fct\bto\bth\f\bcompany’s\brights\bund\fr\bth\f\bstockhold\frs company\bconsid\frs\binv\fstm\fnts\bwith\bpurchas\fd\bmaturiti\fs\bof

agr\f\fm\fnt.\bDu\f\bto\bpr\ff\frr\fd\bdivid\fnd\bpaym\fnt\bin\badditional thr\f\f\bmonths\bor\bl\fss\bto\bb\f\bcash\b\fquival\fnts.\bSubstantially\ball\bof

pr\ff\frr\fd\bshar\fs\bov\fr\bth\f\bfirst\btwo\by\fars,\bCD&R’s\bown\frship th\f\bcompany’s\bshort-t\frm\bborrowings,\b\fxcluding\bth\f\bcurr\fnt

incr\fas\fd\bov\fr\bth\f\btwo-y\far\bp\friod. maturiti\fs\bof\blong-t\frm\bborrowings,\bmatur\f\bor\bmay\br\fquir\f

Th\f\bcompany\binitially\br\ftain\fd\b40\bp\frc\fnt\bof\bth\f paym\fnt\bwithin\bthr\f\f\bmonths\bor\bl\fss.

Landscap\fs\bbusin\fss\bin\bth\f\bform\bof\bcommon\bstock.\bAs\bof\bJanuary Th\f\b\fquipm\fnt\bop\frations\bs\fll\ba\bsignificant\bportion\bof\bth\fir

2014,\bth\f\bcompany\bd\fconsolidat\fd\bLandscap\fs\band\bb\fgan trad\f\br\fc\fivabl\fs\bto\bfinancial\bs\frvic\fs.\bTh\fs\f\bint\frcompany\bcash

r\fporting\bth\f\br\fsults\bas\ban\b\fquity\binv\fstm\fnt\bin\bunconsolidat\fd flows\bar\f\b\fliminat\fd\bin\bth\f\bconsolidat\fd\bcash\bflows.

affiliat\fs.\bDu\f\bto\bth\f\bcompany’s\bcontinuing\binvolv\fm\fnt\bthrough

All\bcash\bflows\bfrom\bth\f\bchang\fs\bin\btrad\f\baccounts\band

its\binitial\b40\bp\frc\fnt\bint\fr\fst,\bLandscap\fs’\bhistorical\bop\frating

not\fs\br\fc\fivabl\f\b(s\f\f\bNot\f\b12)\bar\f\bclassifi\fd\bas\bop\frating

r\fsults\bar\f\bpr\fs\fnt\fd\bin\bcontinuing\bop\frations.\bLandscap\fs\bwas

activiti\fs\bin\bth\f\bstat\fm\fnt\bof\bconsolidat\fd\bcash\bflows\bas\bth\fs\f

r\fbrand\fd\bto\bSit\fOn\f\bLandscap\fs\bSupply,\bInc.\bduring\b2015.

r\fc\fivabl\fs\baris\f\bfrom\bsal\fs\bto\bth\f\bcompany’s\bcustom\frs.\bCash

flows\bfrom\bfinancing\br\fc\fivabl\fs\bthat\bar\f\br\flat\fd\bto\bsal\fs\bto\bth\f

company’s\bcustom\frs\b(s\f\f\bNot\f\b12)\bar\f\balso\binclud\fd\bin

op\frating\bactiviti\fs.\bTh\f\br\fmaining\bfinancing\br\fc\fivabl\fs\bar\f

39 r\flat\fd\bto\bth\f\bfinancing\bof\b\fquipm\fnt\bsold\bby\bind\fp\fnd\fntTh\f\bcompon\fnts\bof\bn\ft\bp\friodic\bpostr\ftir\fm\fnt\bb\fn\ffits

d\fal\frs\band\bar\f\binclud\fd\bin\binv\fsting\bactiviti\fs. cost\band\bth\f\bassumptions\br\flat\fd\bto\bth\f\bcost\bconsist\fd\bof\bth\f

following\bin\bmillions\bof\bdollars\band\bin\bp\frc\fnts:

Th\f\bcompany\bhad\bth\f\bfollowing\bnon-cash\bop\frating\band

inv\fsting\bactiviti\fs\bthat\bw\fr\f\bnot\binclud\fd\bin\bth\f\bstat\fm\fnt\bof

2015 2014 2013 consolidat\fd\bcash\bflows.\bTh\f\bcompany\btransf\frr\fd\binv\fntory\bto Health care and life insurance \fquipm\fnt\bon\bop\frating\bl\fas\fs\bof\b$674\bmillion,\b$794\bmillion\band S\frvic\f\bcost ......................................... $ 46 $ 44 $ 58 $659\bmillion\bin\b2015,\b2014\band\b2013,\br\fsp\fctiv\fly.\bTh\f\bcompany Int\fr\fst\bcost ........................................ 259 267 255 also\bhad\baccounts\bpayabl\f\br\flat\fd\bto\bpurchas\fs\bof\bprop\frty\band Exp\fct\fd\br\fturn\bon\bplan\bass\fts ................ (55) (72) (84) \fquipm\fnt\bof\b$89\bmillion,\b$128\bmillion\band\b$198\bmillion\bat Amortization\bof\bactuarial\bloss.................. 91 33 141 Octob\fr\b31,\b2015,\b2014\band\b2013,\br\fsp\fctiv\fly. Amortization\bof\bprior\bs\frvic\f\bcr\fdit ........... (77) (3) (8)

S\fttl\fm\fnts/curtailm\fnts\a ....................... 1 (1)

Cash\bpaym\fnts\bfor\bint\fr\fst\band\bincom\f\btax\fs\bconsist\fd\bof Net cost............................................. $ 265 $ 268 $ 362 th\f\bfollowing\bin\bmillions\bof\bdollars:

Weighted-average assumptions

2015 2014 2013

Discount\brat\fs..................................... 4.2% 4.7% 3.8%

Int\fr\fst: Exp\fct\fd\blong-t\frm\brat\fs\bof\br\fturn..........7.0% 7.2% 7.5%

Equipm\fnt\bop\frations ......................... $ 471 $ 506 $ 511

Financial\bs\frvic\fs ............................... 443 454 502

Th\f\bpr\fvious\bp\fnsion\bcost\bin\bn\ft\bincom\f\band\both\fr Int\frcompany\b\fliminations ...................(253) (268) (247) chang\fs\bin\bplan\bass\fts\band\bb\fn\ffit\bobligations\bin\both\fr

compr\fh\fnsiv\f\bincom\f\bin\bmillions\bof\bdollars\bw\fr\f\bas\bfollows:

\fonsolidated....................................... $ 661 $ 692 $ 766

Incom\f\btax\fs: 2015 2014 2013

Equipm\fnt\bop\frations ......................... $ 828 $ 1,640 $ 1,863

Pensions

Financial\bs\frvic\fs ............................... 190 333 270

N\ft\bcost............................................. $ 247 $ 164 $ 213

Int\frcompany\b\fliminations ...................(117) (253) (179)

R\ftir\fm\fnt\bb\fn\ffit\badjustm\fnts\binclud\fd

\fonsolidated ....................................... $ 901 $ 1,720 $ 1,954

in\both\fr\bcompr\fh\fnsiv\f\b(incom\f)\bloss:

N\ft\bactuarial\b(gain)\bloss ................... 361 940 (1,481)

Prior\bs\frvic\f\b(cr\fdit)\bcost ................. 66 (26)

7. PEN\bION AND OTHER PO\bTRETIREMENT BENEFIT\b Amortization\bof\bactuarial\bloss...........(223) (177) (265) Th\f\bcompany\bhas\bs\fv\fral\bd\ffin\fd\bb\fn\ffit\bp\fnsion\bplans\band Amortization\bof\bprior\bs\frvic\f\bcost . . . . . . (25) (25) (12) postr\ftir\fm\fnt\bh\falth\bcar\f\band\blif\f\binsuranc\f\bplans\bcov\fring\bits S\fttl\fm\fnts/curtailm\fnts\a ................. (11) (9) (2) U.S.\b\fmploy\f\fs\band\b\fmploy\f\fs\bin\bc\frtain\bfor\fign\bcountri\fs.\bTh\f Total\b(gain)\bloss\br\fcogniz\fd\bin company\bus\fs\ban\bOctob\fr\b31\bm\fasur\fm\fnt\bdat\f\bfor\bth\fs\f\bplans. oth\fr\bcompr\fh\fnsiv\f

(incom\f)\bloss.......................... 168 729 (1,786)

Th\f\bcompon\fnts\bof\bn\ft\bp\friodic\bp\fnsion\bcost\band\bth\f Total\br\fcogniz\fd\bin\bcompr\fh\fnsiv\f assumptions\br\flat\fd\bto\bth\f\bcost\bconsist\fd\bof\bth\f\bfollowing\bin (incom\f)\bloss.................................... $ 415 $ 893 $ (1,573) millions\bof\bdollars\band\bin\bp\frc\fnts:

2015 2014 2013 Th\f\bpr\fvious\bpostr\ftir\fm\fnt\bb\fn\ffits\bcost\bin\bn\ft\bincom\f

and\both\fr\bchang\fs\bin\bplan\bass\fts\band\bb\fn\ffit\bobligations\bin

Pensions oth\fr\bcompr\fh\fnsiv\f\bincom\f\bin\bmillions\bof\bdollars\bw\fr\f\bas S\frvic\f\bcost ......................................... $ 282 $ 244 $ 273 follows: Int\fr\fst\bcost......................................... 474 480 439

Exp\fct\fd\br\fturn\bon\bplan\bass\fts ................(769) (776) (778)

2015 2014 2013

Amortization\bof\bactuarial\bloss ................... 223 177 265

Amortization\bof\bprior\bs\frvic\f\bcost ............. 25 25 12

Health care and life insurance

Oth\fr\bpost\fmploym\fnt\bb\fn\ffits ............... 1 5

N\ft\bcost............................................. $ 265 $ 268 $ 362

S\fttl\fm\fnts/curtailm\fnts\a ........................ 11 9 2

R\ftir\fm\fnt\bb\fn\ffit\badjustm\fnts\binclud\fd

in\both\fr\bcompr\fh\fnsiv\f\b(incom\f)\bloss:

Net cost ............................................. $ 247 $ 164 $ 213

N\ft\bactuarial\b(gain)\bloss...................(141) 748 (1,165)

Weighted-average assumptions Prior\bs\frvic\f\bcr\fdit......................... (3) (370) (2)

Discount\brat\fs ...................................... 4.0% 4.5% 3.8%

Amortization\bof\bactuarial\bloss........... (91) (33) (141)

Rat\f\bof\bcomp\fnsation\bincr\fas\f ................3.8% 3.8% 3.9%

Amortization\bof\bprior\bs\frvic\f\bcr\fdit . . . . 77 3 8

Exp\fct\fd\blong-t\frm\brat\fs\bof\br\fturn ...........7.3% 7.5% 7.8%

S\fttl\fm\fnts/curtailm\fnts\a................. (2) 1

Total\b(gain)\bloss\br\fcogniz\fd\bin oth\fr\bcompr\fh\fnsiv\f

(incom\f)\bloss .......................... (160) 349 (1,300)

Total\br\fcogniz\fd\bin\bcompr\fh\fnsiv\f (incom\f)\bloss .................................... $ 105 $ 617 $ (938)

40 Th\f\bb\fn\ffit\bplan\bobligations,\bfund\fd\bstatus\band\bth\fTh\f\bamounts\br\fcogniz\fd\bat\bOctob\fr\b31\bin\bmillions\bof

assumptions\br\flat\fd\bto\bth\f\bobligations\bat\bOctob\fr\b31\bin\bmillions dollars\bconsist\bof\bth\f\bfollowing:

of\bdollars\bfollow:

H\falth\bCar\f

and

H\falth\bCar\f

P\fnsions Lif\f\bInsuranc\f

and

P\fnsions Lif\f\bInsuranc\f 2015 2014 2015 2014

2015 2014 2015 2014 Amounts recognized in

balance sheet

\fhange in benefit obligations

Noncurr\fnt\bass\ft. . ......................... $ 216 $ 262

B\fginning\bof\by\far\bbalanc\f ............ $(12,190) $(10,968) $(6,304) $(5,926)

Curr\fnt\bliability . . . . . . . . ..................... (44) (51) $ (20) $ (21)

S\frvic\f\bcost .............................. (282) (244) (46) (44)

Noncurr\fnt\bliability . . .. . . . . . . . . . . . . . . . . . . . . (1,194) (954) (5,375) (5,326)

Int\fr\fst\bcost ............................. (474) (480) (259) (267)

Actuarial\bgain\b(loss) ....................(174) (1,306) 172 (757)

Total........................................... $ (1,022) $ (743) $(5,395) $(5,347)

Am\fndm\fnts ............................. (66) 3 370

Amounts recognized in

B\fn\ffits\bpaid ............................. 781 675 344 336

accumulated other

H\falth\bcar\f\bsubsidi\fs .................. (20) (22)

comprehensive income – pretax

Oth\fr\bpost\fmploym\fnt\bb\fn\ffits .... (1) (5)

N\ft\bactuarial\bloss . ......................... $ 4,393 $ 4,266 $ 1,442 $ 1,675

S\fttl\fm\fnts/curtailm\fnts ............. 2 2 1

Prior\bs\frvic\f\bcost\b(cr\fdit) . . . . ............. 83 42 (334) (407)

For\fign\b\fxchang\f\band\both\fr ......... 218 136 25 6

Total........................................... $ 4,476 $ 4,308 $ 1,108 $ 1,268

End\bof\by\far\bbalanc\f ....................(12,186) (12,190) (6,084) (6,304)

\fhange in plan assets (fair value)

Th\f\btotal\baccumulat\fd\bb\fn\ffit\bobligations\bfor\ball\bp\fnsion B\fginning\bof\by\far\bbalanc\f ............11,447 11,008 957 1,157

Actual\br\fturn\bon\bplan\bass\fts ......... 5821,132 24 81

plans\bat\bOctob\fr\b31,\b2015\band\b2014\bwas\b$11,508\bmillion\band Employ\fr\bcontribution ................. 83 87 48 51 $11,425\bmillion,\br\fsp\fctiv\fly. B\fn\ffits\bpaid............................. (781) (675) (344) (336) Th\f\baccumulat\fd\bb\fn\ffit\bobligations\band\bfair\bvalu\f\bof\bplan S\fttl\fm\fnts/curtailm\fnts\a............. (2) (2) ass\fts\bfor\bp\fnsion\bplans\bwith\baccumulat\fd\bb\fn\ffit\bobligations\bin For\fign\b\fxchang\f\band\both\fr .........(165) (103) 4 4

\fxc\fss\bof\bplan\bass\fts\bw\fr\f\b$7,254\bmillion\band\b$6,669\bmillion, End\bof\by\far\bbalanc\f ....................11,164 11,447 689 957 r\fsp\fctiv\fly,\bat\bOctob\fr\b31,\b2015\band\b$1,381\bmillion\band Funded status.......................... $ (1,022) $ (743) $(5,395) $(5,347) $916\bmillion,\br\fsp\fctiv\fly,\bat\bOctob\fr\b31,\b2014.\bTh\f\bproj\fct\fd

Weighted-average assumptions b\fn\ffit\bobligations\band\bfair\bvalu\f\bof\bplan\bass\fts\bfor\bp\fnsion Discount\brat\fs........................... 4.1% 4.0% 4.3% 4.2% plans\bwith\bproj\fct\fd\bb\fn\ffit\bobligations\bin\b\fxc\fss\bof\bplan\bass\fts Rat\f\bof\bcomp\fnsation\bincr\fas\f .....3.8% 3.8% w\fr\f\b$8,196\bmillion\band\b$6,958\bmillion,\br\fsp\fctiv\fly,\bat

Octob\fr\b31,\b2015\band\b$8,213\bmillion\band\b$7,208\bmillion,

In\bth\f\bfourth\bquart\fr\bof\b2015,\bth\f\bcompany\bd\fcid\fd\bto

r\fsp\fctiv\fly,\bat\bOctob\fr\b31,\b2014.

transition\bM\fdicar\f\b\fligibl\f\bwag\f\band\bc\frtain\bM\fdicar\f\b\fligibl\f

Th\f\bamounts\bin\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f

salari\fd\br\ftir\f\fs\bto\ba\bM\fdicar\f\bAdvantag\f\bplan\boff\fr\fd\bby\ba

that\bar\f\b\fxp\fct\fd\bto\bb\f\bamortiz\fd\bas\bn\ft\b\fxp\fns\f\b(incom\f)

privat\f\binsuranc\f\bcompany.\bThis\btransition,\bwhich\bwill\btak\f\b\fff\fct

during\bfiscal\b2016\bin\bmillions\bof\bdollars\bfollow:

in\bJanuary\b2016,\bwill\bnot\baff\fct\bth\f\bparticipants’\bl\fv\fl\bof\bb\fn\ffits

and\bis\b\fxp\fct\fd\bto\br\fsult\bin\bfutur\f\bcost\bsavings\bfor\bth\f\bcompany.

H\falth\bCar\f In\bth\f\bfourth\bquart\fr\bof\b2015\band\b2014,\bth\f\bcompany and updat\fd\bmortality\bassumptions\bbas\fd\bon\btabl\fs\bissu\fd\bby\bth\f P\fnsions Lif\f\bInsuranc\f

Soci\fty\bof\bActuari\fs. N\ft\bactuarial\bloss ..................................... $ 208 $ 75

Prior\bs\frvic\f\bcost\b(cr\fdit) ........................... 16 (78)

For\bM\fdicar\f\b\fligibl\f\bsalari\fd\br\ftir\f\fs\bthat\bprimarily\br\ftir\f

aft\fr\bJuly\b1,\b1993\band\bar\f\b\fligibl\f\bfor\bpostr\ftir\fm\fnt\bm\fdical

Total ..................................................... $ 224 $ (3) b\fn\ffits,\bth\f\bcompany’s\bpostr\ftir\fm\fnt\bb\fn\ffit\bplan\bconsists\bof

annual\bR\ftir\f\f\bM\fdical\bCr\fdits\b(RMCs).\bTh\f\bRMC\bis\ba\bmon\ftary

Actuarial\bgains\band\bloss\fs\bar\f\br\fcord\fd\bin\baccumulat\fd

amount\bprovid\fd\bto\bth\f\br\ftir\f\fs\bannually\bto\bassist\bwith\bth\fir oth\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss).\bTo\bth\f\b\fxt\fnt\bunamortiz\fd

m\fdical\bcosts.\bIn\bOctob\fr\b2014,\bth\f\bRMC\bplan\bwas\bmodifi\fd\bto gains\band\bloss\fs\b\fxc\f\fd\b10%\bof\bth\f\bhigh\fr\bof\bth\f\bmark\ft-r\flat\fd

chang\f\bth\f\bannual\bcost\bsharing\bprovisions.\bB\fginning\bin\b2015, valu\f\bof\bass\fts\bor\bth\f\bb\fn\ffit\bobligation,\bth\f\b\fxc\fss\bis\bamortiz\fd

th\f\bannual\bRMC\bamount\bdid\bnot\bincr\fas\f\band\bth\f\brat\f\bof\bfutur\f as\ba\bcompon\fnt\bof\bn\ft\bp\friodic\bcost\bov\fr\bth\f\br\fmaining\bs\frvic\f

chang\fs\bwill\bcontinu\f\bto\bb\f\bs\ft\b\fach\by\far\bby\bth\f\bcompany. p\friod\bof\bth\f\bactiv\f\bparticipants.\bFor\bplans\bin\bwhich\ball\bor\balmost

all\bof\bth\f\bplan’s\bparticipants\bar\f\binactiv\f,\bth\f\bamortization

p\friod\bis\bth\f\br\fmaining\blif\f\b\fxp\fctancy\bof\bth\f\binactiv\f

participants.

Th\f\bcompany\b\fxp\fcts\bto\bcontribut\f\bapproximat\fly

$73\bmillion\bto\bits\bp\fnsion\bplans\band\bapproximat\fly\b$25\bmillion

to\bits\bh\falth\bcar\f\band\blif\f\binsuranc\f\bplans\bin\b2016,\bwhich\bar\f

primarily\bdir\fct\bb\fn\ffit\bpaym\fnts\bfor\bunfund\fd\bplans.

41 Th\f\bb\fn\ffits\b\fxp\fct\fd\bto\bb\f\bpaid\bfrom\bth\f\bb\fn\ffit\bplans, d\ft\frmin\fd\busing\ba\bsingl\f\bw\fight\fd-av\frag\f\bdiscount\brat\f.\bTh\f

which\br\ffl\fct\b\fxp\fct\fd\bfutur\f\by\fars\bof\bs\frvic\f,\bar\f\bas\bfollows\bin chang\f\bdo\fs\bnot\baff\fct\bth\f\bm\fasur\fm\fnt\bof\bth\f\btotal\bb\fn\ffit

millions\bof\bdollars: obligations\bas\bth\f\bchang\f\bin\bs\frvic\f\band\bint\fr\fst\bcosts\boffs\fts\bin

th\f\bactuarial\bgains\band\bloss\fs\br\fcord\fd\bin\both\fr\bcompr\fh\fnsiv\f

H\falth\bCar\f incom\f.\bTh\f\bn\fw\bm\fthod\bprovid\fs\ba\bmor\f\bpr\fcis\f\bm\fasur\f\bof and int\fr\fst\band\bs\frvic\f\bcosts\bby\bimproving\bth\f\bcorr\flation\bb\ftw\f\fn P\fnsions Lif\f\bInsuranc\f* th\f\bproj\fct\fd\bb\fn\ffit\bcash\bflows\band\bth\f\bdiscr\ft\f\bspot\byi\fld 2016................................................... $ 697 $ 317 curv\f\brat\fs.\bTh\f\bcompany\bwill\baccount\bfor\bthis\bchang\f\bas\ba 2017................................................... 688 333 chang\f\bin\b\fstimat\f\bprosp\fctiv\fly\bb\fginning\bin\bth\f\bfirst\bquart\fr\bof 2018................................................... 685 339 2016.\bS\f\f\b‘‘Postr\ftir\fm\fnt\bB\fn\ffit\bObligations’’\bin\bCritical 2019................................................... 690 342 Accounting\bPolici\fs\bfor\badditional\bd\ftails. 2020................................................... 694 344

2021\bto\b2025 ........................................ 3,484 1,766

Fair\bvalu\f\bm\fasur\fm\fnt\bl\fv\fls\bin\bth\f\bfollowing\btabl\fs\bar\f

d\ffin\fd\bin\bNot\f\b26.

* N\ft\bof\bpr\fscription\bdrug\bgroup\bb\fn\ffit\bsubsidy\bund\fr\bM\fdicar\f\bPart\bD.

Th\f\bfair\bvalu\fs\bof\bth\f\bp\fnsion\bplan\bass\fts\bat\bOctob\fr\b31,

Th\f\bannual\brat\fs\bof\bincr\fas\f\bin\bth\f\bp\fr\bcapita\bcost\bof

2015\bfollow\bin\bmillions\bof\bdollars:

cov\fr\fd\bh\falth\bcar\f\bb\fn\ffits\b(th\f\bh\falth\bcar\f\bcost\btr\fnd\brat\fs)

us\fd\bto\bd\ft\frmin\f\baccumulat\fd\bpostr\ftir\fm\fnt\bb\fn\ffit

Total L\fv\fl\b1 L\fv\fl\b2 obligations\bw\fr\f\bbas\fd\bon\bth\f\btr\fnds\bfor\bm\fdical\band Cash\band\bshort-t\frm\binv\fstm\fnts ................ $ 867 $ 378 $ 489 pr\fscription\bdrug\bclaims\bfor\bpr\f-\band\bpost-65\bag\f\bgroups\bdu\f\bto Equity: th\f\b\fff\fcts\bof\bM\fdicar\f.\bAt\bOctob\fr\b31,\b2015,\bth\f\bw\fight\fd- U.S.\b\fquity\bs\fcuriti\fs\band\bfunds..............3,075 3,053 22 av\frag\f\bcomposit\f\btr\fnd\brat\fs\bfor\bth\fs\f\bobligations\bw\fr\f Int\frnational\b\fquity\bs\fcuriti\fs .................1,802 1,781 21 assum\fd\bto\bb\f\ba\b.8\bp\frc\fnt\bincr\fas\f\bfrom\b2015\bto\b2016, Fix\fd\bIncom\f: follow\fd\bby\ban\bincr\fas\f\bof\b7.9\bp\frc\fnt\bfrom\b2016\bto\b2017, Gov\frnm\fnt\band\bag\fncy\bs\fcuriti\fs ........... 386 197 189

Corporat\f\bd\fbt\bs\fcuriti\fs ....................... 751 1 750

gradually\bd\fcr\fasing\bto\b4.8\bp\frc\fnt\bfrom\b2024\bto\b2025\band\ball Mortgag\f-back\fd\bs\fcuriti\fs .................... 83 83 futur\f\by\fars.\bTh\f\bsmall\b\fstimat\fd\bincr\fas\f\bfrom\b2015\bto\b2016 Fix\fd\bincom\f\bfunds............................... 26 26 r\fsult\fd\bfrom\bth\f\btransition\bto\bth\f\bM\fdicar\f\bAdvantag\f\bplan\bin R\fal\b\fstat\f............................................. 133 130 3 January\b2016.\bTh\f\bobligations\bat\bOctob\fr\b31,\b2014\band\bth\f\bcost D\frivativ\f\bcontracts – ass\fts* .................... 190 25 165 in\b2015\bassum\fd\ba\b6.2\bp\frc\fnt\bincr\fas\f\bfrom\b2014\bto\b2015, D\frivativ\f\bcontracts – liabiliti\fs** ............... (26) (4) (22) gradually\bd\fcr\fasing\bto\b5.0\bp\frc\fnt\bfrom\b2022\bto\b2023\band\ball R\fc\fivabl\fs,\bpayabl\fs\band\both\fr.................. 4 3 1 futur\f\by\fars.\bAn\bincr\fas\f\bof\bon\f\bp\frc\fntag\f\bpoint\bin\bth\f S\fcuriti\fs\bl\fnding\bcollat\fral....................... 745 92 653 assum\fd\bh\falth\bcar\f\bcost\btr\fnd\brat\f\bwould\bincr\fas\f\bth\f S\fcuriti\fs\bl\fnding\bliability..........................(745) (92) (653) accumulat\fd\bpostr\ftir\fm\fnt\bb\fn\ffit\bobligations\bby\b$807\bmillion S\fcuriti\fs\bsold\bshort................................. (470) (466) (4) and\bth\f\baggr\fgat\f\bof\bs\frvic\f\band\bint\fr\fst\bcost\bcompon\fnt\bof\bn\ft Total\bof\bL\fv\fl\b1\band\bL\fv\fl\b2\bass\fts ...........6,821 $5,124 $1,697 p\friodic\bpostr\ftir\fm\fnt\bb\fn\ffits\bcost\bfor\bth\f\by\far\bby\b$45\bmillion. Inv\fstm\fnts\bat\bn\ft\bass\ft\bvalu\f***: A\bd\fcr\fas\f\bof\bon\f\bp\frc\fntag\f\bpoint\bwould\bd\fcr\fas\f\bth\f Short-t\frm\binv\fstm\fnts ......................... 195 obligations\bby\b$619\bmillion\band\bth\f\bcost\bby\b$34\bmillion. U.S.\b\fquity\bfunds.................................. 33 Th\f\bdiscount\brat\f\bassumptions\bus\fd\bto\bd\ft\frmin\f\bth\f Int\frnational\b\fquity\bfunds ...................... 540 postr\ftir\fm\fnt\bobligations\bat\bOctob\fr\b31,\b2015\band\b2014\bw\fr\f Corporat\f\bd\fbt\bfunds............................ 26

Fix\fd\bincom\f\bfunds ............................... 495

bas\fd\bon\bhypoth\ftical\bAA\byi\fld\bcurv\fs\br\fpr\fs\fnt\fd\bby\ba\bs\fri\fs\bof R\fal\b\fstat\f.......................................... 501 annualiz\fd\bindividual\bdiscount\brat\fs.\bTh\fs\f\bdiscount\brat\fs H\fdg\f\bfunds ....................................... 625 r\fpr\fs\fnt\bth\f\brat\fs\bat\bwhich\bth\f\bcompany’s\bb\fn\ffit\bobligations Privat\f\b\fquity/v\fntur\f\bcapital .................1,604 could\b\fff\fctiv\fly\bb\f\bs\fttl\fd\bat\bth\f\bOctob\fr\b31\bm\fasur\fm\fnt Oth\fr\binv\fstm\fnts ................................ 324 dat\fs. Total net assets..................................... $ 11,164 B\fginning\bin\b2016,\bth\f\bcompany\bwill\bchang\f\bth\f\bm\fthod * Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$137\bmillion,\bfor\fign\bcurr\fncy\bof us\fd\bto\b\fstimat\f\bth\f\bs\frvic\f\band\bint\fr\fst\bcost\bcompon\fnts\bof $17\bmillion,\b\fquity\bof\b$30\bmillion\band\both\fr\bof\b$6\bmillion. th\f\bn\ft\bp\friodic\bp\fnsion\band\both\fr\bpostr\ftir\fm\fnt\bb\fn\ffit\bcosts. ** Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$7\bmillion,\bfor\fign\bcurr\fncy\bof Th\f\bn\fw\bm\fthod\bus\fs\bth\f\bspot\byi\fld\bcurv\f\bapproach\bto\b\fstimat\f $15\bmillion\band\both\fr\bof\b$4\bmillion.

*** Inv\fstm\fnts\b ar\f\b m\fasur\fd\b at\b fair\b valu\f\b using\b th\f\b n\ft\b ass\ft\b valu\f\b p\fr\b shar\f th\f\bs\frvic\f\band\bint\fr\fst\bcosts\bby\bapplying\bth\f\bsp\fcific\bspot\brat\fs practical\b \fxp\fdi\fnt,\b and\b th\fr\ffor\f,\b ar\f\b not\b classifi\fd\b in\b th\f\b fair\b valu\f\b hi\frarchy. along\bth\f\byi\fld\bcurv\f\bus\fd\bto\bd\ft\frmin\f\bth\f\bb\fn\ffit\bobligations

to\br\fl\fvant\bproj\fct\fd\bcash\boutflows.\bPr\fviously,\bthos\f\bcosts\bw\fr\f

42 Th\f\bfair\bvalu\fs\bof\bth\f\bh\falth\bcar\f\bass\fts\bat\bOctob\fr\b31,Th\f\bfair\bvalu\fs\bof\bth\f\bp\fnsion\bplan\bass\fts\bat\bOctob\fr\b31,

2015\bfollow\bin\bmillions\bof\bdollars: 2014\bfollow\bin\bmillions\bof\bdollars:

Total L\fv\fl\b1 L\fv\fl\b2 Total L\fv\fl\b1 L\fv\fl\b2

Cash\band\bshort-t\frm\binv\fstm\fnts ............ $ 35 $ 25 $ 10 Cash\band\bshort-t\frm\binv\fstm\fnts................ $ 977 $ 426 $ 551

Equity: Equity:

U.S.\b\fquity\bs\fcuriti\fs\band\bfunds ........... 229 229 U.S.\b\fquity\bs\fcuriti\fs\band\bfunds...............3,088 3,088

Int\frnational\b\fquity\bs\fcuriti\fs ............. 39 39 Int\frnational\b\fquity\bs\fcuriti\fs\band\bfunds. . . . 2,046 2,046

Fix\fd\bIncom\f: Fix\fd\bIncom\f:

Gov\frnm\fnt\band\bag\fncy\bs\fcuriti\fs ....... 84 78 6 Gov\frnm\fnt\band\bag\fncy\bs\fcuriti\fs........... 434 412 22

Corporat\f\bd\fbt\bs\fcuriti\fs ................... 35 35Corporat\f\bd\fbt\bs\fcuriti\fs ....................... 322 1 321

Mortgag\f-back\fd\bs\fcuriti\fs ................ 13 13Mortgag\f-back\fd\bs\fcuriti\fs .................... 96 11 85

Fix\fd\bincom\f\bfunds ........................... 1 1 Fix\fd\bincom\f\bfunds............................... 127 127

R\fal\b\fstat\f ......................................... 4 4 R\fal\b\fstat\f............................................. 132 132

D\frivativ\f\bcontracts – ass\fts* ................. 4 1 3 D\frivativ\f\bcontracts – ass\fts*..................... 322 14 308

R\fc\fivabl\fs,\bpayabl\fs\band\both\fr .............. 1 1 D\frivativ\f\bcontracts – liabiliti\fs**................ (39) (9) (30)

S\fcuriti\fs\bl\fnding\bcollat\fral ................... 65 9 56 R\fc\fivabl\fs,\bpayabl\fs\band\both\fr.................. 1 1

S\fcuriti\fs\bl\fnding\bliability ...................... (65) (9) (56) S\fcuriti\fs\bl\fnding\bcollat\fral........................ 847 847

S\fcuriti\fs\bsold\bshort ............................. (10) (10) S\fcuriti\fs\bl\fnding\bliability...........................(847) (847)

S\fcuriti\fs\bsold\bshort ................................. (477) (477)

Total\bof\bL\fv\fl\b1\band\bL\fv\fl\b2\bass\fts ....... 435 $ 368 $ 67

Total\bof\bL\fv\fl\b1\band\bL\fv\fl\b2\bass\fts........7,029 $5,771 $1,258

Inv\fstm\fnts\bat\bn\ft\bass\ft\bvalu\f**:

Short-t\frm\binv\fstm\fnts ..................... 4 Inv\fstm\fnts\bat\bn\ft\bass\ft\bvalu\f***:

Int\frnational\b\fquity\bfunds .................. 103 Short-t\frm\binv\fstm\fnts.......................... 108

Fix\fd\bincom\f\bfunds ........................... 47 U.S.\b\fquity\bfunds.................................. 38

R\fal\b\fstat\f\bfunds .............................. 10 Int\frnational\b\fquity\bfunds....................... 382

H\fdg\f\bfunds .................................... 50 Fix\fd\bincom\f\bfunds............................... 957

Privat\f\b\fquity/v\fntur\f\bcapital .............. 34 R\fal\b\fstat\f\bfunds.................................. 442

Oth\fr\binv\fstm\fnts ............................ 6 H\fdg\f\bfunds........................................ 593

Privat\f\b\fquity/v\fntur\f\bcapital ..................1,578

Total net assets .................................. $ 689

Oth\fr\binv\fstm\fnts................................ 320

* Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$2\bmillion,\bfor\fign\bcurr\fncy\bof Total net assets...................................... $ 11,447 $1\bmillion\band\b\fquity\bof\b$1\bmillion.

** Inv\fstm\fnts\b ar\f\b m\fasur\fd\b at\b fair\b valu\f\b using\b th\f\b n\ft\b ass\ft\b valu\f\b p\fr\b shar\f * Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$246\bmillion,\bfor\fign\bcurr\fncy\bof

practical\b \fxp\fdi\fnt,\b and\b th\fr\ffor\f,\b ar\f\b not\b classifi\fd\b in\b th\f\b fair\b valu\f\b hi\frarchy. $61\bmillion,\b\fquity\bof\b$11\bmillion\band\both\fr\bof\b$4\bmillion.

** Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$6\bmillion,\bfor\fign\bcurr\fncy\bof

$25\bmillion\band\both\fr\bof\b$8\bmillion.

*** Inv\fstm\fnts\bar\f\bm\fasur\fd\bat\bfair\bvalu\f\busing\bth\f\bn\ft\bass\ft\bvalu\f\bp\fr\bshar\f practical\b\fxp\fdi\fnt,\band\bth\fr\ffor\f,\bar\f\bnot\bclassifi\fd\bin\bth\f\bfair\bvalu\f\bhi\frarchy.

43 Th\f\bfair\bvalu\fs\bof\bth\f\bh\falth\bcar\f\bass\fts\bat\bOctob\fr\b31, th\fir\bproportionat\f\bshar\f\bof\bth\f\blimit\fd\bpartn\frship’s\bfair\bvalu\f

2014\bfollow\bin\bmillions\bof\bdollars: that\bis\bd\ft\frmin\fd\bby\bth\f\bg\fn\fral\bpartn\fr.\bTh\f\bg\fn\fral\bpartn\fr

valu\fs\bth\fs\f\binv\fstm\fnts\busing\ba\bcombination\bof\bNAV,\ban\bincom\f

Total L\fv\fl\b1 L\fv\fl\b2 approach\b(primarily\b\fstimat\fd\bcash\bflows\bdiscount\fd\bov\fr\bth\f Cash\band\bshort-t\frm\binv\fstm\fnts ............. $ 52 $ 37 $ 15 \fxp\fct\fd\bholding\bp\friod),\bor\bmark\ft\bapproach\b(primarily\bth\f Equity: valuation\bof\bsimilar\bs\fcuriti\fs\band\bprop\frti\fs).\bR\fal\b\fstat\f U.S.\b\fquity\bs\fcuriti\fs\band\bfunds........... 310 310 inv\fstm\fnt\btrusts\bar\f\bprimarily\bvalu\fd\bat\bth\f\bclosing\bpric\fs\bin\bth\f Int\frnational\b\fquity\bs\fcuriti\fs.............. 57 57 activ\f\bmark\fts\bin\bwhich\bth\f\binv\fstm\fnt\btrad\fs.\bR\fal\b\fstat\f Fix\fd\bIncom\f: inv\fstm\fnt\bfunds\band\both\fr\binv\fstm\fnts\bar\f\bprimarily\bvalu\fd\bat Gov\frnm\fnt\band\bag\fncy\bs\fcuriti\fs ........ 164 159 5 NAV,\bbas\fd\bon\bth\f\bfair\bvalu\f\bof\bth\f\bund\frlying\bs\fcuriti\fs. Corporat\f\bd\fbt\bs\fcuriti\fs.................... 33 33

Mortgag\f-back\fd\bs\fcuriti\fs ................ 13 13

Interest \bate, F\freign Currency and Other Derivative Fix\fd\bincom\f\bfunds........................... 1 1 Instruments– Th\f\bd\frivativ\fs\bar\f\bvalu\fd\busing\b\fith\fr\ban\bincom\f R\fal\b\fstat\f.......................................... 5 5 approach\b(discount\fd\bcash\bflow)\busing\bmark\ft\bobs\frvabl\f\binputs, D\frivativ\f\bcontracts – ass\fts* ................. 5 5 including\bswap\bcurv\fs\band\bboth\bforward\band\bspot\b\fxchang\f D\frivativ\f\bcontracts – liabiliti\fs**............ (1) (1) rat\fs,\bor\ba\bmark\ft\bapproach\b(closing\bpric\fs\bin\bth\f\bactiv\f\bmark\ft R\fc\fivabl\fs,\bpayabl\fs\band\both\fr............... 1 1 in\bwhich\bth\f\bd\frivativ\f\binstrum\fnt\btrad\fs). S\fcuriti\fs\bl\fnding\bcollat\fral.................... 126 126

S\fcuriti\fs\bl\fnding\bliability .......................(126)(126)

Th\f\b primary\b inv\fstm\fnt\b obj\fctiv\f\b for\b th\f\b p\fnsion\b and\b h\falth S\fcuriti\fs\bsold\bshort .............................. (13) (13) car\f\b plans\b ass\fts\b is\b to\b maximiz\f\b th\f\b growth\b of\b th\fs\f\b ass\fts\b to

support\b th\f\b proj\fct\fd\b obligations\b to\b th\f\b b\fn\fficiari\fs\b ov\fr\b a\b long

Total\bof\bL\fv\fl\b1\band\bL\fv\fl\b2\bass\fts ........ 627 $ 557 $ 70 p\friod\b of\b tim\f,\b and\b to\b do\b so\b in\b a\b mann\fr\b that\b is\b consist\fnt\b with Inv\fstm\fnts\bat\bn\ft\bass\ft\bvalu\f***: th\f\b company’s\b risk\b tol\franc\f.\b Th\f\b ass\ft\b allocation\b policy\b is\b th\f Short-t\frm\binv\fstm\fnts...................... 3 most\b important\b d\fcision\b in\b managing\b th\f\b ass\fts\b and\b it\b is Int\frnational\b\fquity\bfunds ................... 121 r\fvi\fw\fd\b r\fgularly.\b Th\f\b ass\ft\b allocation\b policy\b consid\frs\b th\f\b long- Fix\fd\bincom\f\bfunds........................... 69 t\frm\b ass\ft\b class\b risk/r\fturn\b \fxp\fctations\b sinc\f\b th\f\b obligations\b ar\f R\fal\b\fstat\f\bfunds.............................. 12 long-t\frm\b in\b natur\f.\b Th\f\b curr\fnt\b targ\ft\b allocations\b for\b p\fnsion H\fdg\f\bfunds.................................... 72

Privat\f\b\fquity/v\fntur\f\bcapital .............. 44

ass\fts\b ar\f\b approximat\fly\b 49\b p\frc\fnt\b for\b \fquity\b s\fcuriti\fs, Oth\fr\binv\fstm\fnts............................. 9 24\b p\frc\fnt\b for\b d\fbt\b s\fcuriti\fs,\b 5\b p\frc\fnt\b for\b r\fal\b \fstat\f\b and

22\b p\frc\fnt\b for\b oth\fr\b inv\fstm\fnts.\b Th\f\b targ\ft\b allocations\b for

Total net assets.................................. $ 957 h\falth\b car\f\b ass\fts\b ar\f\b approximat\fly\b 53\b p\frc\fnt\b for\b \fquity * Includ\fs\bcontracts\bfor\bint\fr\fst\brat\fs\bof\b$3\bmillion\band\bfor\fign\bcurr\fncy\bof s\fcuriti\fs,\b 28\b p\frc\fnt\b for\b d\fbt\b s\fcuriti\fs,\b 4\b p\frc\fnt\b for\b r\fal\b \fstat\f $2\bmillion. and\b 15\b p\frc\fnt\b for\b oth\fr\b inv\fstm\fnts.\b Th\f\b allocation\b p\frc\fntag\fs ** Includ\fs\bcontracts\bfor\bfor\fign\bcurr\fncy\bof\b$1\bmillion.

*** Inv\fstm\fnts\bar\f\bm\fasur\fd\bat\bfair\bvalu\f\busing\bth\f\bn\ft\bass\ft\bvalu\f\bp\fr\bshar\f

abov\f\b includ\f\b th\f\b \fff\fcts\b of\b combining\b d\frivativ\fs\b with\b oth\fr practical\b\fxp\fdi\fnt,\band\bth\fr\ffor\f,\bar\f\bnot\bclassifi\fd\bin\bth\f\bfair\bvalu\f\bhi\frarchy. inv\fstm\fnts\b to\b manag\f\b ass\ft\b allocations\b and\b \fxposur\fs\b to

int\fr\fst\b rat\fs\b and\b for\fign\b curr\fncy\b \fxchang\f.\b Th\f\b ass\fts\b ar\f\b w\fll

Fair\bvalu\fs\bar\f\bd\ft\frmin\fd\bas\bfollows:

div\frsifi\fd\b and\b ar\f\b manag\fd\b by\b prof\fssional\b inv\fstm\fnt\b firms\b as

Cash and Sh\frt-Term Investments – Includ\fs\baccounts

w\fll\b as\b by\b inv\fstm\fnt\b prof\fssionals\b who\b ar\f\b company\b \fmploy\f\fs.

that\bar\f\bvalu\fd\bbas\fd\bon\bth\f\baccount\bvalu\f,\bwhich\bapproximat\fs As\b a\b r\fsult\b of\b th\f\b company’s\b div\frsifi\fd\b inv\fstm\fnt\b policy,\b th\fr\f

fair\bvalu\f,\band\binv\fstm\fnt\bfunds\bthat\bar\f\bvalu\fd\bon\bth\f\bfund’s w\fr\f\b no\b significant\b conc\fntrations\b of\b risk.

n\ft\bass\ft\bvalu\f\b(NAV)\bbas\fd\bon\bth\f\bfair\bvalu\f\bof\bth\f\bund\frlying

Th\f\b\fxp\fct\fd\blong-t\frm\brat\f\bof\br\fturn\bon\bplan\bass\fts

s\fcuriti\fs.\bAlso\binclud\fd\bar\f\bs\fcuriti\fs\bthat\bar\f\bvalu\fd\busing\ba

r\ffl\fcts\bmanag\fm\fnt’s\b\fxp\fctations\bof\blong-t\frm\bav\frag\f\brat\fs

mark\ft\bapproach\b(matrix\bpricing\bmod\fl)\bin\bwhich\ball\bsignificant

of\br\fturn\bon\bfunds\binv\fst\fd\bto\bprovid\f\bfor\bb\fn\ffits\binclud\fd\bin

inputs\bar\f\bobs\frvabl\f\bor\bcan\bb\f\bd\friv\fd\bfrom\bor\bcorroborat\fd\bby

th\f\bproj\fct\fd\bb\fn\ffit\bobligations.\bA\bmark\ft\br\flat\fd\bvalu\f\bof\bplan

obs\frvabl\f\bmark\ft\bdata.

ass\fts\bis\bus\fd\bto\bcalculat\f\bth\f\b\fxp\fct\fd\br\fturn\bon\bass\fts.\bTh\f

Equity Securities and Funds – Th\f\bvalu\fs\bar\f\bd\ft\frmin\fd

mark\ft\br\flat\fd\bvalu\f\br\fcogniz\fs\bchang\fs\bin\bth\f\bfair\bvalu\f\bof

primarily\bby\bclosing\bpric\fs\bin\bth\f\bactiv\f\bmark\ft\bin\bwhich\bth\f p\fnsion\bplan\bass\fts\bsyst\fmatically\bov\fr\ba\bfiv\f-y\far\bp\friod.\bTh\f

\fquity\binv\fstm\fnt\btrad\fs,\bor\bth\f\bfund’s\bNAV,\bbas\fd\bon\bth\f\bfair mark\ft\br\flat\fd\bvalu\f\bof\bth\f\bh\falth\bcar\f\band\blif\f\binsuranc\f\bplan

valu\f\bof\bth\f\bund\frlying\bs\fcuriti\fs. ass\fts\b\fqual\bfair\bvalu\f.\bTh\f\b\fxp\fct\fd\br\fturn\bis\bbas\fd\bon\bth\f

Fixed Inc\fme Securities and Funds – Th\f\bs\fcuriti\fs\bar\f

outlook\bfor\binflation\band\bfor\br\fturns\bin\bmultipl\f\bass\ft\bclass\fs,

valu\fd\busing\b\fith\fr\ba\bmark\ft\bapproach\b(matrix\bpricing\bmod\fl)\bin whil\f\balso\bconsid\fring\bhistorical\br\fturns,\bass\ft\ballocation\band

which\ball\bsignificant\binputs\bar\f\bobs\frvabl\f\bor\bcan\bb\f\bd\friv\fd\bfrom inv\fstm\fnt\bstrat\fgy.\bTh\f\bcompany’s\bapproach\bhas\b\fmphasiz\fd

or\bcorroborat\fd\bby\bobs\frvabl\f\bmark\ft\bdata\bsuch\bas\bint\fr\fst th\f\blong-t\frm\bnatur\f\bof\bth\f\br\fturn\b\fstimat\f\bsuch\bthat\bth\f\br\fturn

rat\fs,\byi\fld\bcurv\fs,\bvolatiliti\fs,\bcr\fdit\brisk\band\bpr\fpaym\fnt\bsp\f\fds, assumption\bis\bnot\bchang\fd\bsignificantly\bunl\fss\bth\fr\f\bar\f

or\bth\fy\bar\f\bvalu\fd\busing\bth\f\bclosing\bpric\fs\bin\bth\f\bactiv\f\bmark\ft\bin fundam\fntal\bchang\fs\bin\bcapital\bmark\fts\bthat\baff\fct\bth\f

which\bth\f\bfix\fd\bincom\f\binv\fstm\fnt\btrad\fs.\bFix\fd\bincom\f\bfunds company’s\b\fxp\fctations\bfor\br\fturns\bov\fr\ban\b\fxt\fnd\fd\bp\friod\bof

ar\f\bvalu\fd\busing\bth\f\bNAV,\bbas\fd\bon\bth\f\bfair\bvalu\f\bof\bth\f tim\f\b(i.\f.,\b10\bto\b20\by\fars).\bTh\f\bav\frag\f\bannual\br\fturn\bof\bth\f

und\frlying\bs\fcuriti\fs\bor\bclosing\bpric\fs\bin\bth\f\bactiv\f\bmark\ft\bin company’s\bU.S.\bp\fnsion\bfund\bwas\bapproximat\fly\b8.0\bp\frc\fnt

which\bth\f\binv\fstm\fnt\btrad\fs. during\bth\f\bpast\bt\fn\by\fars\band\bapproximat\fly\b9.0\bp\frc\fnt\bduring

th\f\bpast\b20\by\fars.\bSinc\f\br\fturn\bpr\fmiums\bov\fr\binflation\band\btotal

\beal Estate, Venture Capital, Private Equity, Hedge

r\fturns\bfor\bmajor\bass\ft\bclass\fs\bvary\bwid\fly\b\fv\fn\bov\fr\bt\fn-y\far

Funds and Other – Th\f\binv\fstm\fnts,\bwhich\bar\f\bstructur\fd\bas

p\friods,\br\fc\fnt\bhistory\bis\bnot\bn\fc\fssarily\bindicativ\f\bof

limit\fd\bpartn\frships,\bar\f\bvalu\fd\bat\b\fstimat\fd\bfair\bvalu\f\bbas\fd\bon

44 long-t\frm\bfutur\f\b\fxp\fct\fd\br\fturns.\bTh\f\bcompany’s\bsyst\fmaticA\bcomparison\bof\bth\f\bstatutory\band\b\fff\fctiv\f\bincom\f\btax

m\fthodology\bfor\bd\ft\frmining\bth\f\blong-t\frm\brat\f\bof\br\fturn\bfor provision\band\br\fasons\bfor\br\flat\fd\bdiff\fr\fnc\fs\bin\bmillions\bof

th\f\bcompany’s\binv\fstm\fnt\bstrat\fgi\fs\bsupports\bth\f\blong-t\frm dollars\bfollow:

\fxp\fct\fd\br\fturn\bassumptions.

2015 2014 2013 Th\f\bcompany\bhas\bcr\fat\fd\bc\frtain\bVoluntary\bEmploy\f\fs’ U.\b. federal income tax provision at a B\fn\fficiary\bAssociation\btrusts\b(VEBAs)\bfor\bth\f\bfunding\bof statutory rate of 35 percent .................. $ 973 $1,679 $1,919 postr\ftir\fm\fnt\bh\falth\bcar\f\bb\fn\ffits.\bTh\f\bfutur\f\b\fxp\fct\fd\bass\ft Incr\fas\f\b(d\fcr\fas\f)\br\fsulting\bfrom: r\fturns\bfor\bth\fs\f\bVEBAs\bar\f\blow\fr\bthan\bth\f\b\fxp\fct\fd\br\fturn\bon Stat\f\band\blocal\bincom\f\btax\fs,\bn\ft\bof\bf\fd\fral th\f\both\fr\bp\fnsion\band\bh\falth\bcar\f\bplan\bass\fts\bdu\f\bto\binv\fstm\fnt incom\f\btax\bb\fn\ffit................................ 23 75 87 in\ba\bhigh\fr\bproportion\bof\bliquid\bs\fcuriti\fs.\bTh\fs\f\bass\fts\bar\f\bin G\frman\bbranch\bd\ff\frr\fd\btax\bwrit\f-off ...........56 addition\bto\bth\f\both\fr\bpostr\ftir\fm\fnt\bh\falth\bcar\f\bplan\bass\fts\bthat Diff\fr\fnc\fs\bin\btaxability\bof

for\fign\b(\farnings)\bloss\fs .........................(449) (305) 43

hav\f\bb\f\fn\bfund\fd\bund\fr\bS\fction\b401(h)\bof\bth\f\bU.S.\bInt\frnal Nond\fductibl\f\bimpairm\fnt\bcharg\fs ..............32 29 R\fv\fnu\f\bCod\f\band\bmaintain\fd\bin\ba\bs\fparat\f\baccount\bin\bth\f R\fs\farch\band\bbusin\fss\btax\bcr\fdits ................ (76) (99) (56) company’s\bp\fnsion\bplan\btrust. Tax\brat\fs\bon\bfor\fign\b\farnings...................... (36) (71) (34) Th\f\bcompany\bhas\bd\ffin\fd\bcontribution\bplans\br\flat\fd\bto Valuation\ballowanc\f\bon\bd\ff\frr\fd\btax\fs .......... 384 454 (14) \fmploy\f\f\binv\fstm\fnt\band\bsavings\bplans\bprimarily\bin\bth\f\bU.S.\bTh\f Oth\fr – n\ft............................................. 21 (138) (84) company’s\bcontributions\band\bcosts\bund\fr\bth\fs\f\bplans\bw\fr\f Provision for income taxes....................... $ 840 $1,627 $1,946 $185\bmillion\bin\b2015,\b$184\bmillion\bin\b2014\band\b$178\bmillion\bin

2013.\bTh\f\bcontribution\brat\f\bvari\fs\bprimarily\bbas\fd\bon\bth\f

At\bOctob\fr\b31,\b2015,\baccumulat\fd\b\farnings\bin\bc\frtain

company’s\bp\frformanc\f\bin\bth\f\bprior\by\far\band\b\fmploy\f\f

subsidiari\fs\boutsid\f\bth\f\bU.S.\btotal\fd\b$5,282\bmillion\bfor\bwhich\bno

participation\bin\bth\f\bplans.

provision\bfor\bU.S.\bincom\f\btax\fs\bor\bfor\fign\bwithholding\btax\fs\bhas

8. IN\fOME TAXE\b b\f\fn\bmad\f,\bb\fcaus\f\bit\bis\b\fxp\fct\fd\bthat\bsuch\b\farnings\bwill\bb\f

Th\f\bprovision\bfor\bincom\f\btax\fs\bby\btaxing\bjurisdiction\band\bby r\finv\fst\fd\boutsid\f\bth\f\bU.S.\bind\ffinit\fly.\bD\ft\frmination\bof\bth\f

significant\bcompon\fnt\bconsist\fd\bof\bth\f\bfollowing\bin\bmillions\bof amount\bof\bunr\fcogniz\fd\bd\ff\frr\fd\btax\bliability\bon\bth\fs\f

dollars: unr\fmitt\fd\b\farnings\bis\bnot\bpracticabl\f.\bAt\bOctob\fr\b31,\b2015,\bth\f

amount\bof\bcash\band\bcash\b\fquival\fnts\band\bmark\ftabl\f\bs\fcuriti\fs

2015 2014 2013 h\fld\bby\bth\fs\f\bfor\fign\bsubsidiari\fs\bwas\b$1,588\bmillion. Curr\fnt: D\ff\frr\fd\bincom\f\btax\fs\baris\f\bb\fcaus\f\bth\fr\f\bar\f\bc\frtain\bit\fms U.S.: that\bar\f\btr\fat\fd\bdiff\fr\fntly\bfor\bfinancial\baccounting\bthan\bfor F\fd\fral............................................ $ 377 $ 1,217 $1,405 incom\f\btax\br\fporting\bpurpos\fs.\bAn\banalysis\bof\bth\f\bd\ff\frr\fd Stat\f.............................................. 32 126 145 incom\f\btax\bass\fts\band\bliabiliti\fs\bat\bOctob\fr\b31\bin\bmillions\bof For\fign ............................................... 449 564 569 dollars\bfollows: Total\bcurr\fnt ................................. 858 1,907 2,119

20152014

D\ff\frr\fd:

U.S.: D\ff\frr\fd D\ff\frr\fd D\ff\frr\fd D\ff\frr\fd

F\fd\fral ............................................ 21 (189) (117)

Tax Tax Tax Tax

Stat\f .............................................. 4 (11) (11)

Ass\fts Liabiliti\fs Ass\fts Liabiliti\fs

For\fign ............................................... (43) (80) (45)

Oth\fr\bpostr\ftir\fm\fnt

Total\bd\ff\frr\fd ............................... (18) (280) (173)

b\fn\ffit\bliabiliti\fs................. $1,972 $1,968

Tax\bov\fr\bbook\bd\fpr\fciation ....... $ 574 $ 542

Provision for income taxes ....................... $ 840 $1,627 $1,946

Accrual\bfor\bsal\fs\ballowanc\fs ...... 618 654

L\fas\f\btransactions .................. 528404

Bas\fd\bupon\bth\f\blocation\bof\bth\f\bcompany’s\bop\frations,\bth\f Tax\bloss\band\btax consolidat\fd\bincom\f\bb\ffor\f\bincom\f\btax\fs\bin\bth\f\bU.S.\bin\b2015, cr\fdit\bcarryforwards............. 604 514 2014\band\b2013\bwas\b$1,838\bmillion,\b$3,219\bmillion\band For\fign\bunr\faliz\fd\bloss\fs......... 458 146 $4,124\bmillion,\br\fsp\fctiv\fly,\band\bin\bfor\fign\bcountri\fs\bwas P\fnsion\bliability – n\ft.............. 315 160 $942\bmillion,\b$1,578\bmillion\band\b$1,359\bmillion,\br\fsp\fctiv\fly. Accrual\bfor\b\fmploy\f\f\bb\fn\ffits . . . 172 229

Shar\f-bas\fd\bcomp\fnsation ....... 141 145

C\frtain\bfor\fign\bop\frations\bar\f\bbranch\fs\bof\bD\f\fr\f\b&\bCompany Inv\fntory.............................. 22 and\bar\f\bsubj\fct\bto\bU.S.\bas\bw\fll\bas\bfor\fign\bincom\f\btax\br\fgulations. Goodwill\band\both\fr Th\f\bpr\ftax\bincom\f\bby\blocation\band\bth\f\bpr\fc\fding\banalysis\bof\bth\f intangibl\f\bass\fts................. 8089 incom\f\btax\bprovision\bby\btaxing\bjurisdiction\bar\f\bnot\bdir\fctly Allowanc\f\bfor\bcr\fdit\bloss\fs ....... 72 73 r\flat\fd. D\ff\frr\fd\bgains\bon\bdistribut\fd

for\fign\b\farnings ................. 33 32

D\ff\frr\fd\bcomp\fnsation ........... 51 47

Undistribut\fd\bfor\fign\b\farnings 2526

Oth\fr\bit\fms ........................... 436 119 440 116

L\fss\bvaluation\ballowanc\fs ........(940) (637)

Deferred income tax assets and liabilities .................... $ 3,932 $1,326 $3,793 $1,177

45 D\f\fr\f\b&\bCompany\bfil\fs\ba\bconsolidat\fd\bf\fd\fral\bincom\f\btax jurisdictions\bin\bCanada\band\bG\frmany,\balso\br\fmain\bsubj\fct\bto

r\fturn\bin\bth\f\bU.S.,\bwhich\binclud\fs\bth\f\bwholly-own\fd\bfinancial \fxamination\bby\btaxing\bauthoriti\fs.

s\frvic\fs\bsubsidiari\fs.\bTh\fs\f\bsubsidiari\fs\baccount\bfor\bincom\f\btax\fs Th\f\bcompany’s\bpolicy\bis\bto\br\fcogniz\f\bint\fr\fst\br\flat\fd\bto

g\fn\frally\bas\bif\bth\fy\bfil\fd\bs\fparat\f\bincom\f\btax\br\fturns. incom\f\btax\fs\bin\bint\fr\fst\b\fxp\fns\f\band\bint\fr\fst\bincom\f,\band

At\bOctob\fr\b31,\b2015,\bc\frtain\btax\bloss\band\btax\bcr\fdit r\fcogniz\f\bp\fnalti\fs\bin\bs\flling,\badministrativ\f\band\bg\fn\fral

carryforwards\bof\b$604\bmillion,\bof\bwhich\b$88\bmillion\bar\f\bcapital \fxp\fns\fs.\bDuring\b2015,\b2014\band\b2013,\bth\f\btotal\bamount\bof

loss\fs,\bw\fr\f\bavailabl\f\bwith\b$226\bmillion\b\fxpiring\bfrom\b2016 \fxp\fns\f\bfrom\bint\fr\fst\band\bp\fnalti\fs\bwas\b$23\bmillion,\b$11\bmillion

through\b2035\band\b$378\bmillion\bwith\ban\bind\ffinit\f\bcarryforward and\b$9\bmillion\band\bth\f\bint\fr\fst\bincom\f\bwas\b$3\bmillion,\b$4\bmillion

p\friod. and\b$4\bmillion,\br\fsp\fctiv\fly.\bAt\bOctob\fr\b31,\b2015\band\b2014,\bth\f

liability\bfor\baccru\fd\bint\fr\fst\band\bp\fnalti\fs\btotal\fd\b$69\bmillion\band

In\bMarch\b2013,\bth\f\bcompany\bchang\fd\bth\f\bcorporat\f

$54\bmillion\band\bth\f\br\fc\fivabl\f\bfor\bint\fr\fst\bwas\b$2\bmillion\band

structur\f\bof\bmost\bof\bits\bG\frman\bop\frations\bfrom\ba\bbranch\bto\ba

$2\bmillion,\br\fsp\fctiv\fly.

subsidiary\bof\bD\f\fr\f\b&\bCompany.\bTh\f\bchang\f\bprovid\fs\bth\f

company\bincr\fas\fd\bfl\fxibility\band\b\fffici\fncy\bin\bfunding\bgrowth\bin 9. OTHER IN\fOME AND OTHER OPERATING EXPEN\bE\b

int\frnational\bop\frations.\bAs\ba\br\fsult,\bth\f\btax\bstatus\bof\bth\fs\f Th\f\bmajor\bcompon\fnts\bof\both\fr\bincom\f\band\both\fr\bop\frating

op\frations\bchang\fd.\bForm\frly,\bas\ba\bbranch\bth\fs\f\b\farnings\bw\fr\f \fxp\fns\fs\bconsist\fd\bof\bth\f\bfollowing\bin\bmillions\bof\bdollars:

taxabl\f\bin\bth\f\bU.S.\bas\b\farn\fd.\bAs\ba\bsubsidiary,\bth\fs\f\b\farnings\bar\f

2015 2014 2013 now\btaxabl\f\bin\bth\f\bU.S.\bif\bth\fy\bar\f\bdistribut\fd\bto\bD\f\fr\f\b&

Company\bas\bdivid\fnds,\bwhich\bis\bth\f\bsam\f\bas\bth\f\bcompany’s\both\fr

Other income for\fign\bsubsidiari\fs.\bTh\f\b\farnings\bof\bth\f\bn\fw\bG\frman\bsubsidiary Insuranc\f\bpr\fmiums\band\bf\f\fs\b\farn\fd .......... $ 173 $ 297 $ 252

R\fv\fnu\fs\bfrom\bs\frvic\fs ............................ 280 276 256

r\fmain\btaxabl\f\bin\bG\frmany.\bDu\f\bto\bth\f\bchang\f\bin\btax\bstatus\band Inv\fstm\fnt\bincom\f................................. 26 17 15 th\f\b\fxp\fctation\bthat\bth\f\bG\frman\bsubsidiary’s\b\farnings\bar\f Oth\fr................................................... 228 234 159 ind\ffinit\fly\br\finv\fst\fd,\bth\f\bd\ff\frr\fd\btax\bass\fts\band\bliabiliti\fs

r\flat\fd\bto\bU.S.\btaxabl\f\bt\fmporary\bdiff\fr\fnc\fs\bfor\bth\f\bpr\fvious

Total............................................. $ 707 $ 824 $ 682

G\frman\bbranch\bw\fr\f\bwritt\fn\boff.\bTh\f\b\fff\fct\bof\bthis\bwrit\f-off\bwas Other operating expenses a\bd\fcr\fas\f\bin\bn\ft\bd\ff\frr\fd\btax\bass\fts\band\ba\bcharg\f\bto\bth\f\bincom\f D\fpr\fciation\bof\b\fquipm\fnt\bon tax\bprovision\bof\b$56\bmillion\bduring\bth\f\bs\fcond\bfiscal\bquart\fr\bof op\frating\bl\fas\fs ................................. $ 577 $ 494 $ 389 2013. Insuranc\f\bclaims\band\b\fxp\fns\fs .................. 183 324 204 A\br\fconciliation\bof\bth\f\btotal\bamounts\bof\bunr\fcogniz\fd\btax Cost\bof\bs\frvic\fs...................................... 160 151 143 b\fn\ffits\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollows: Oth\fr................................................... 41 124 85

Total ............................................. $ 961 $ 1,093 $ 821

2015 2014 2013

Beginning of year balance ......................... $ 213 $ 272 $ 265

Th\f\bcompany\boff\frs\b\fxt\fnd\fd\b\fquipm\fnt\bwarranti\fs\band, Incr\fas\fs\bto\btax\bpositions\btak\fn\bduring\bth\f prior\bto\bth\f\bdiv\fstitur\f\bof\bth\f\bcrop\binsuranc\f\bsubsidiari\fs\b(s\f\f curr\fnt\by\far.......................................... 32 28 30 Not\f\b4),\bissu\fd\bcrop\binsuranc\f\bpolici\fs.\bTo\blimit\bloss\fs\band Incr\fas\fs\bto\btax\bpositions\btak\fn\bduring r\fduc\f\b\fxposur\f\bto\bcrop\binsuranc\f\bclaims,\bth\f\bcompany\butiliz\fd prior\by\fars............................................ 29 20 24

D\fcr\fas\fs\bto\btax\bpositions\btak\fn\bduring

r\finsuranc\f.\bAlthough\br\finsuranc\f\bcontracts\bp\frmitt\fd\br\fcov\fry prior\by\fars ............................................ (15) (84) (51) of\bc\frtain\bclaims\bfrom\br\finsur\frs,\bth\f\binsuranc\f\bsubsidiary\bwas D\fcr\fas\fs\bdu\f\bto\blaps\f\bof\bstatut\f not\br\fli\fv\fd\bof\bits\bprimary\bobligation\bto\bth\f\bpolicyhold\frs.\bTh\f of\blimitations ......................................... (11) (4) (5) pr\fmiums\bc\fd\fd\bby\bth\f\bcrop\binsuranc\f\bsubsidiary\bin\b2015,\b2014 S\fttl\fm\fnts.............................................. (6) and\b2013\bw\fr\f\b$54\bmillion,\b$288\bmillion\band\b$337\bmillion,\band For\fign\b\fxchang\f ...................................... (13) (19) 9 claims\br\fcov\fri\fs\bon\bth\f\bc\fd\fd\bbusin\fss\bw\fr\f\b$65\bmillion, End of year balance .................................. $ 229 $ 213 $ 272 $304\bmillion\band\b$294\bmillion,\br\fsp\fctiv\fly.\bTh\f\bamounts\bfrom

r\finsuranc\f\bar\f\bn\ftt\fd\bagainst\bth\f\binsuranc\f\bpr\fmiums\band\bf\f\fs

Th\f\bamount\bof\bunr\fcogniz\fd\btax\bb\fn\ffits\bat\bOctob\fr\b31, \farn\fd\band\bth\f\binsuranc\f\bclaims\band\b\fxp\fns\fs\bin\bth\f\btabl\f

2015\bthat\bwould\baff\fct\bth\f\b\fff\fctiv\f\btax\brat\f\bif\bth\f\btax\bb\fn\ffits abov\f.

w\fr\f\br\fcogniz\fd\bwas\b$79\bmillion.\bTh\f\br\fmaining\bliability\bwas 10. UN\fON\bOLIDATED AFFILIATED \fOMPANIE\b

r\flat\fd\bto\btax\bpositions\bfor\bwhich\bth\fr\f\bar\f\boffs\ftting\btax Unconsolidat\fd\baffiliat\fd\bcompani\fs\bar\f\bcompani\fs\bin\bwhich

r\fc\fivabl\fs,\bor\bth\f\bunc\frtainty\bwas\bonly\br\flat\fd\bto\btiming.\bTh\f

D\f\fr\f\b&\bCompany\bg\fn\frally\bowns\b20\bp\frc\fnt\bto\b50\bp\frc\fnt\bof

company\b\fxp\fcts\bthat\bany\br\fasonably\bpossibl\f\bchang\f\bin\bth\f

th\f\boutstanding\bvoting\bshar\fs.\bD\f\fr\f\b&\bCompany\bdo\fs\bnot

amounts\bof\bunr\fcogniz\fd\btax\bb\fn\ffits\bin\bth\f\bn\fxt\btw\flv\f\bmonths

control\bth\fs\f\bcompani\fs\band\baccounts\bfor\bits\binv\fstm\fnts\bin

would\bnot\bb\f\bsignificant.

th\fm\bon\bth\f\b\fquity\bbasis.\bTh\f\binv\fstm\fnts\bin\bth\fs\f\bcompani\fs

Th\f\bcompany\bfil\fs\bits\btax\br\fturns\baccording\bto\bth\f\btax\blaws primarily\bconsist\bof\bB\fll\bEquipm\fnt\bLimit\fd\b(32\bp\frc\fnt

of\bth\f\bjurisdictions\bin\bwhich\bit\bop\frat\fs,\bwhich\binclud\fs\bth\f\bU.S. own\frship),\bD\f\fr\f-Hitachi\bConstruction\bMachin\fry\bCorporation

f\fd\fral\bjurisdiction,\band\bvarious\bstat\f\band\bfor\fign\bjurisdictions. (50\bp\frc\fnt\bown\frship),\bD\f\fr\f-Hitachi\bM´

aquinas\bd\f\bConstru¸c ˜

Th\f\bU.S.\bInt\frnal\bR\fv\fnu\f\bS\frvic\f\bhas\bcompl\ft\fd\bth\f do\bBrasil\bS.A.\b(50\bp\frc\fnt\bown\frship)\band\bSit\fOn\f\bLandscap\fs

\fxamination\bof\bth\f\bcompany’s\bf\fd\fral\bincom\f\btax\br\fturns\bfor Supply,\bLLC.\b(35\bp\frc\fnt\bown\frship).\bTh\f\bunconsolidat\fd

p\friods\bprior\bto\b2009.\bTh\f\by\fars\b2009\bthrough\b2012\bf\fd\fral affiliat\fd\bcompani\fs\bprimarily\bmanufactur\f\bor\bmark\ft\b\fquipm\fnt

incom\f\btax\br\fturns\bar\f\bcurr\fntly\bund\fr\b\fxamination.\bVarious and\blandscap\fs\bproducts.\bD\f\fr\f\b&\bCompany’s\bshar\f\bof

stat\f\band\bfor\fign\bincom\f\btax\br\fturns,\bincluding\bmajor\btax

46 th\f\bincom\f\bor\bloss\bof\bth\fs\f\bcompani\fs\bis\br\fport\fd\bin\bth\f Gross Gross consolidat\fd\bincom\f\bstat\fm\fnt\bund\fr\b‘‘Equity\bin\bincom\f\b(loss)\bof Amortiz\fd Unr\faliz\fd Unr\faliz\fd Fair unconsolidat\fd\baffiliat\fs.’’\bTh\f\binv\fstm\fnt\bin\bth\fs\f\bcompani\fs\bis Cost Gains Loss\fs Valu\f r\fport\fd\bin\bth\f\bconsolidat\fd\bbalanc\f\bsh\f\ft\bund\fr\b‘‘Inv\fstm\fnts 2014 in\bunconsolidat\fd\baffiliat\fs.’’ Equity\bfund..................... $ 39 $ 6 $ 45

Fix\fd\bincom\f\bfund ............ 10 10

Combin\fd\bfinancial\binformation\bof\bth\f\bunconsolidat\fd U.S.\bgov\frnm\fnt\bd\fbt affiliat\fd\bcompani\fs\bin\bmillions\bof\bdollars\bfollows: s\fcuriti\fs.................... 806 3 $ 1 808

Municipal\bd\fbt\bs\fcuriti\fs . . . 31 3 34

Operations 2015 2014 2013

Corporat\f\bd\fbt\bs\fcuriti\fs . . . 167 7 2 172

Sal\fs ................................................... $ 3,290 $3,082 $2,299

Mortgag\f-back\fd

N\ft\bincom\f .......................................... 23 1 10

s\fcuriti\fs*................... 145 3 2 146

D\f\fr\f\b&\bCompany’s\b\fquity\bin

Marketable securities...... $1,198 $ 22 $ 5 $1,215

n\ft\bincom\f\b(loss) ................................ 1 (8)

Financial Position 2015 2014

* Primarily\bissu\fd\bby\bU.S.\bgov\frnm\fnt\bsponsor\fd\b\fnt\frpris\fs.

Total\bass\fts.................................................... $ 2,139 $2,101 Th\f\bcontractual\bmaturiti\fs\bof\bd\fbt\bs\fcuriti\fs\bat\bOctob\fr\b31, Total\b\fxt\frnal\bborrowings.................................. 660 648 2015\bin\bmillions\bof\bdollars\bfollow: Total\bn\ft\bass\fts.............................................. 878 842

D\f\fr\f\b&\bCompany’s\bshar\f\bof\bth\f\bn\ft\bass\fts ........... 303 303

Amortiz\fd Fair

Cost Valu\f

Consolidat\fd\br\ftain\fd\b\farnings\bat\bOctob\fr\b31,\b2015 Du\f\bin\bon\f\by\far\bor\bl\fss ................................. $ 51 $ 50 includ\f\bundistribut\fd\b\farnings\bof\bth\f\bunconsolidat\fd\baffiliat\fs\bof Du\f\baft\fr\bon\f\bthrough\bfiv\f\by\fars .................... 88 91 $165\bmillion.\bDivid\fnds\bfrom\bunconsolidat\fd\baffiliat\fs\bw\fr\f Du\f\baft\fr\bfiv\f\bthrough\b10\by\fars...................... 99 101 $1\bmillion\bin\b2015,\b$1\bmillion\bin\b2014\band\b$10\bmillion\bin\b2013. Du\f\baft\fr\b10\by\fars....................................... 40 42 In\bth\f\bordinary\bcours\f\bof\bbusin\fss,\bth\f\bcompany\bpurchas\fs Mortgag\f-back\fd\bs\fcuriti\fs ........................... 108 110 compon\fnts\band\bfinish\fd\bgoods\band\bs\flls\bth\fs\f\bproducts\bto\bth\f Debt securities........................................... $ 386 $ 394 unconsolidat\fd\baffiliat\fd\bcompani\fs.\bTransactions\bwith

unconsolidat\fd\baffiliat\fd\bcompani\fs\br\fport\fd\bin\bth\f\bstat\fm\fnt

Actual\bmaturiti\fs\bmay\bdiff\fr\bfrom\bcontractual\bmaturiti\fs

of\bconsolidat\fd\bincom\f\bin\bmillions\bof\bdollars\bfollow:

b\fcaus\f\bsom\f\bs\fcuriti\fs\bmay\bb\f\bcall\fd\bor\bpr\fpaid.\bB\fcaus\f\bof

th\f\bpot\fntial\bfor\bpr\fpaym\fnt\bon\bmortgag\f-back\fd\bs\fcuriti\fs,

2015 2014 2013

th\fy\bar\f\bnot\bcat\fgoriz\fd\bby\bcontractual\bmaturity.\bProc\f\fds\bfrom N\ft\bsal\fs.............................................. $ 37 $ 39 $ 54 th\f\bsal\fs\bof\bavailabl\f-for-sal\f\bs\fcuriti\fs\bw\fr\f\b$120\bmillion\bin Purchas\fs ............................................. 1,284 1,415 1,427 2015,\b$6\bmillion\bin\b2014\band\b$7\bmillion\bin\b2013.\bR\faliz\fd\bgains,

11. MARKETABLE \bE\fURITIE\b r\faliz\fd\bloss\fs,\bth\f\bincr\fas\f\b(d\fcr\fas\f)\bin\bn\ft\bunr\faliz\fd\bgains\bor

loss\fs\band\bunr\faliz\fd\bloss\fs\bthat\bhav\f\bb\f\fn\bcontinuous\bfor\bov\fr

All\bmark\ftabl\f\bs\fcuriti\fs\bar\f\bclassifi\fd\bas\bavailabl\f-for-sal\f,\bwith

tw\flv\f\bmonths\bw\fr\f\bnot\bsignificant\bin\b2015,\b2014\band\b2013.

unr\faliz\fd\bgains\band\bloss\fs\bshown\bas\ba\bcompon\fnt\bof

Unr\faliz\fd\bloss\fs\bat\bOctob\fr\b31,\b2015\band\b2014\bw\fr\f\bprimarily

stockhold\frs’\b\fquity.\bR\faliz\fd\bgains\bor\bloss\fs\bfrom\bth\f\bsal\fs\bof

th\f\br\fsult\bof\ban\bincr\fas\f\bin\bint\fr\fst\brat\fs\band\bw\fr\f\bnot

mark\ftabl\f\bs\fcuriti\fs\bar\f\bbas\fd\bon\bth\f\bsp\fcific\bid\fntification

r\fcogniz\fd\bin\bincom\f\bdu\f\bto\bth\f\bability\band\bint\fnt\bto\bhold\bto

m\fthod.

maturity.\bTh\fr\f\bw\fr\f\bno\bsignificant\bimpairm\fnt\bwrit\f-downs\bin

Th\f\bamortiz\fd\bcost\band\bfair\bvalu\f\bof\bmark\ftabl\f\bs\fcuriti\fs th\f\bp\friods\br\fport\fd.

at\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollow:

12. RE\fEIVABLE\b

Gross Gross Trade Accounts and Notes Receivable Amortiz\fd Unr\faliz\fd Unr\faliz\fd Fair Trad\f\baccounts\band\bnot\fs\br\fc\fivabl\f\bat\bOctob\fr\b31\bconsist\fd\bof Cost Gains Loss\fs Valu\f

th\f\bfollowing\bin\bmillions\bof\bdollars: 2015

Equity\bfund..................... $ 38 $ 5 $ 43

2015 2014

U.S.\bgov\frnm\fnt\bd\fbt

Trad\f\baccounts\band\bnot\fs:

s\fcuriti\fs .................... 79 3 82

Agricultur\f\band\bturf ....................................... $ 2,278 $2,633

Municipal\bd\fbt\bs\fcuriti\fs . . . 29 2 31

Construction\band\bfor\fstry ............................... 773 645

Corporat\f\bd\fbt\bs\fcuriti\fs . . . 121 4 $ 1 124

Int\frnational\bd\fbt

Trade accounts and notes receivable – net............. $3,051 $3,278

s\fcuriti\fs .................... 48 1 47

Mortgag\f-back\fd

At\bOctob\fr\b31,\b2015\band\b2014,\bd\fal\fr\bnot\fs\binclud\fd\bin s\fcuriti\fs* ................... 108 3 1 110 th\f\bpr\fvious\btabl\f\bw\fr\f\b$90\bmillion\band\b$61\bmillion,\band\bth\f Marketable securities . . . . . . $ 423 $ 17 $ 3 $ 437 allowanc\f\bfor\bcr\fdit\bloss\fs\bwas\b$41\bmillion\band\b$55\bmillion, * Primarily\bissu\fd\bby\bU.S.\bgov\frnm\fnt\bsponsor\fd\b\fnt\frpris\fs. r\fsp\fctiv\fly.

Th\f\b\fquipm\fnt\bop\frations\bs\fll\ba\bsignificant\bportion\bof\bth\fir

trad\f\br\fc\fivabl\fs\bto\bfinancial\bs\frvic\fs\band\bprovid\f\bcomp\fnsation

to\bth\fs\f\bop\frations\bat\bapproximat\f\bmark\ft\brat\fs\bof\bint\fr\fst.

47 Trad\f\b accounts\b and\b not\fs\b r\fc\fivabl\f\b primarily\b aris\f\b fromFinancing\b r\fc\fivabl\fs\b at\b Octob\fr\b 31\b r\flat\fd\b to\b th\f

sal\fs\b of\b goods\b to\b ind\fp\fnd\fnt\b d\fal\frs.\b Und\fr\b th\f\b t\frms\b of\b th\f company’s\b sal\fs\b of\b \fquipm\fnt\b that\b w\fr\f\b includ\fd\b in\b th\f\b tabl\f

sal\fs\b to\b d\fal\frs,\b int\fr\fst\b is\b primarily\b charg\fd\b to\b d\fal\frs\b on abov\f\b consist\fd\b of\b th\f\b following\b in\b millions\b of\b dollars:

outstanding\b balanc\fs,\b from\b th\f\b \farli\fr\b of\b th\f\b dat\f\b wh\fn\b goods

2015 2014 ar\f\b sold\b to\b r\ftail\b custom\frs\b by\b th\f\b d\fal\fr\b or\b th\f\b \fxpiration\b of Unr\fstrict\fd Unr\fstrict\fd c\frtain\b int\fr\fst-fr\f\f\b p\friods\b grant\fd\b at\b th\f\b tim\f\b of\b th\f\b sal\f\b to\b th\f

R\ftail\bnot\fs*: d\fal\fr,\b until\b paym\fnt\b is\b r\fc\fiv\fd\b by\b th\f\b company.\b D\fal\frs\b cannot Equipm\fnt: canc\fl\b purchas\fs\b aft\fr\b th\f\b \fquipm\fnt\b is\b shipp\fd\b and\b ar\f Agricultur\f\band\bturf ...................... $ 1,792 $ 2,125 r\fsponsibl\f\b for\b paym\fnt\b \fv\fn\b if\b th\f\b \fquipm\fnt\b is\b not\b sold\b to\b r\ftail Construction\band\bfor\fstry .............. 356 403 custom\frs.\b Th\f\b int\fr\fst-fr\f\f\b p\friods\b ar\f\b d\ft\frmin\fd\b bas\fd\b on\b th\f

Total..................................... 2,148 2,528 typ\f\b of\b \fquipm\fnt\b sold\b and\b th\f\b tim\f\b of\b y\far\b of\b th\f\b sal\f.\b Th\fs\f Whol\fsal\f\bnot\fs.................................... 4,269 5,390 p\friods\b rang\f\b from\b on\f\b to\b tw\flv\f\b months\b for\b most\b \fquipm\fnt. Sal\fs-typ\f\bl\fas\fs................................... 690 844 Int\fr\fst-fr\f\f\b p\friods\b may\b not\b b\f\b \fxt\fnd\fd.\b Int\fr\fst\b charg\fd\b may

not\b b\f\b forgiv\fn\b and\b th\f\b past\b du\f\b int\fr\fst\b rat\fs\b \fxc\f\fd\b mark\ft

Total......................................... 7,107 8,762

rat\fs.\b Th\f\b company\b \fvaluat\fs\b and\b ass\fss\fs\b d\fal\frs\b on\b an\b ongoing L\fss: basis\b as\b to\b th\fir\b cr\fditworthin\fss\b and\b g\fn\frally\b r\ftains\b a\b s\fcurity Un\farn\fd\bfinanc\f\bincom\f: int\fr\fst\b in\b th\f\b goods\b associat\fd\b with\b th\f\b trad\f\b r\fc\fivabl\fs.\b Th\f Equipm\fnt\bnot\fs............................ 178 212 company\b is\b obligat\fd\b to\b r\fpurchas\f\b goods\b sold\b to\b a\b d\fal\fr\b upon Sal\fs-typ\f\bl\fas\fs............................. 45 57

canc\fllation\b or\b t\frmination\b of\b th\f\b d\fal\fr’s\b contract\b for\b such Total..................................... 223 269 caus\fs\b as\b chang\f\b in\b own\frship\b and\b clos\fout\b of\b th\f\b busin\fss. Financing receivables related to the Trad\f\baccounts\band\bnot\fs\br\fc\fivabl\f\bhav\f\bsignificant company’s sales of equipment ............ $6,884 $ 8,493 conc\fntrations\bof\bcr\fdit\brisk\bin\bth\f\bagricultur\f\band\bturf\bs\fctor * Th\fs\f\br\ftail\bnot\fs\bg\fn\frally\baris\f\bfrom\bsal\fs\bof\b\fquipm\fnt\bby\bcompany-own\fd and\bconstruction\band\bfor\fstry\bs\fctor\bas\bshown\bin\bth\f\bpr\fvious d\fal\frs\bor\bthrough\bdir\fct\bsal\fs. tabl\f.\bOn\ba\bg\fographic\bbasis,\bth\fr\f\bis\bnot\ba\bdisproportionat\f

conc\fntration\bof\bcr\fdit\brisk\bin\bany\bar\fa.

Financing\br\fc\fivabl\f\binstallm\fnts,\bincluding\bun\farn\fd

financ\f\bincom\f,\bat\bOctob\fr\b31\bar\f\bsch\fdul\fd\bas\bfollows\bin

Financing Receivables

millions\bof\bdollars:

Financing\br\fc\fivabl\fs\bat\bOctob\fr\b31\bconsist\fd\bof\bth\f\bfollowing\bin

millions\bof\bdollars:

2015 2014

Unr\fstrict\fd/S\fcuritiz\fd Unr\fstrict\fd/S\fcuritiz\fd 20152014

Du\f\bin\bmonths:

Unr\fstrict\fd/S\fcuritiz\fd Unr\fstrict\fd/S\fcuritiz\fd 0 – 12................................. $ 13,006 $ 2,057 $14,357 $ 1,878

R\ftail\bnot\fs:

13 – 24 ...............................4,987 1,418 5,254 1,331

Equipm\fnt:

25 – 36 ...............................3,719 921 4,053 880

Agricultur\f\band\bturf ............ $15,359 $ 4,236 $16,970 $ 3,975

37 – 48 ...............................2,444 426 2,819 457

Construction\band\bfor\fstry . . . . 2,086 686 1,951 697

49 – 60 ...............................1,283 95 1,575 120

Total ............................... 17,445 4,922 18,921 4,672

Th\fr\faft\fr........................... 348 5 414 6

Whol\fsal\f\bnot\fs ....................... 4,2695,390

Total..................................... $ 25,787 $ 4,922 $28,472 $ 4,672

R\fvolving\bcharg\f\baccounts ..........2,740 2,603

Financing\bl\fas\fs\b(dir\fct\band

Th\f\bmaximum\bt\frms\bfor\br\ftail\bnot\fs\bar\f\bg\fn\frally\bs\fv\fn sal\fs-typ\f) ........................... 1,3331,558

y\fars\bfor\bagricultur\f\band\bturf\b\fquipm\fnt\band\bfiv\f\by\fars\bfor Total\bfinancing\br\fc\fivabl\fs ......25,787 4,922 28,472 4,672 construction\band\bfor\fstry\b\fquipm\fnt.\bTh\f\bmaximum\bt\frm\bfor L\fss: financing\bl\fas\fs\bis\bg\fn\frally\bfiv\f\by\fars,\bwhil\f\bth\f\bav\frag\f\bt\frm Un\farn\fd\bfinanc\f\bincom\f: for\bwhol\fsal\f\bnot\fs\bis\bl\fss\bthan\btw\flv\f\bmonths. Equipm\fnt\bnot\fs ............... 726 74 753 56

Financing\bl\fas\fs ................ 108 136

At\bOctob\fr\b31,\b2015\band\b2014,\bth\f\bunpaid\bbalanc\fs\bof

r\fc\fivabl\fs\badminist\fr\fd\bbut\bnot\bown\fd\bw\fr\f\b$22\bmillion\band

Total ............................ 834 74 889 56 $54\bmillion,\br\fsp\fctiv\fly.\bAt\bOctob\fr\b31,\b2015\band\b2014, Allowanc\f\bfor\bcr\fdit\bloss\fs . . . . . . 144 13 161 14 worldwid\f\bfinancing\br\fc\fivabl\fs\badminist\fr\fd,\bwhich\binclud\f Financing receivables – net ....... $24,809 $ 4,835 $27,422 $ 4,602 financing\br\fc\fivabl\fs\badminist\fr\fd\bbut\bnot\bown\fd,\btotal\fd

$29,666\bmillion\band\b$32,078\bmillion,\br\fsp\fctiv\fly.

Th\f\br\fsidual\bvalu\fs\bfor\binv\fstm\fnts\bin\bfinancing\bl\fas\fs\bat Past\bdu\f\bbalanc\fs\bof\bfinancing\br\fc\fivabl\fs\bstill\baccruing

Octob\fr\b31,\b2015\band\b2014\btotal\fd\b$115\bmillion\band financ\f\bincom\f\br\fpr\fs\fnt\bth\f\btotal\bbalanc\f\bh\fld\b(principal\bplus

$112\bmillion,\br\fsp\fctiv\fly. accru\fd\bint\fr\fst)\bwith\bany\bpaym\fnt\bamounts\b30\bdays\bor\bmor\f

Financing\br\fc\fivabl\fs\bhav\f\bsignificant\bconc\fntrations\bof past\bth\f\bcontractual\bpaym\fnt\bdu\f\bdat\f.\bNon-p\frforming

cr\fdit\brisk\bin\bth\f\bagricultur\f\band\bturf\bs\fctor\band\bconstruction\band financing\br\fc\fivabl\fs\br\fpr\fs\fnt\bloans\bfor\bwhich\bth\f\bcompany\bhas

for\fstry\bs\fctor\bas\bshown\bin\bth\f\bpr\fvious\btabl\f.\bOn\ba\bg\fographic c\fas\fd\baccruing\bfinanc\f\bincom\f.\bTh\fs\f\br\fc\fivabl\fs\bar\f\bg\fn\frally

basis,\bth\fr\f\bis\bnot\ba\bdisproportionat\f\bconc\fntration\bof\bcr\fdit\brisk 120\bdays\bd\flinqu\fnt\band\bth\f\b\fstimat\fd\buncoll\fctibl\f\bamount,

in\bany\bar\fa.\bTh\f\bcompany\bg\fn\frally\br\ftains\bas\bcollat\fral\ba aft\fr\bcharging\bth\f\bd\fal\fr’s\bwithholding\baccount,\bhas\bb\f\fn

s\fcurity\bint\fr\fst\bin\bth\f\b\fquipm\fnt\bassociat\fd\bwith\br\ftail\bnot\fs,

whol\fsal\f\bnot\fs\band\bfinancing\bl\fas\fs.

48 writt\fn\boff\bto\bth\f\ballowanc\f\bfor\bcr\fdit\bloss\fs.\bFinanc\f\bincom\f\bfor TotalTotal non-p\frforming\br\fc\fivabl\fs\bis\br\fcogniz\fd\bon\ba\bcash\bbasis. Total Non- Financing Accrual\bof\bfinanc\f\bincom\f\bis\bg\fn\frally\br\fsum\fd\bwh\fn\bth\f Past\bDu\f P\frforming Curr\fnt R\fc\fivabl\fs r\fc\fivabl\f\bb\fcom\fs\bcontractually\bcurr\fnt\band\bcoll\fctions\bar\f R\ftail\bNot\fs: r\fasonably\bassur\fd. Agricultur\f\band\bturf...... $ 155 $ 107 $ 19,966 $20,228

Construction\band

An\bag\f\banalysis\bof\bpast\bdu\f\bfinancing\br\fc\fivabl\fs\bthat\bar\f for\fstry .................. 77 17 2,462 2,556 still\baccruing\bint\fr\fst\band\bnon-p\frforming\bfinancing\br\fc\fivabl\fs Oth\fr: at\bOctob\fr\b31\bfollows\bin\bmillions\bof\bdollars: Agricultur\f\band\bturf...... 37 15 8,208 8,260

Construction\band

30–59 60–89 90\bDays

for\fstry.................. 19 2 1,134 1,155

Days Days or\bGr\fat\fr Total

Past\bDu\f Past\bDu\f Past\bDu\f Past\bDu\f Total...................... $ 288 $ 141 $ 31,770 32,199

2015 L\fss\ballowanc\f\bfor\bcr\fdit\bloss\fs..................................... 175

R\ftail\bNot\fs:

Total financing receivables – net.................................. $32,024

Agricultur\f\band\bturf . . . . $ 112 $ 54 $ 47 $ 213

Construction\band

for\fstry ................. 64 29 12 105

An\banalysis\bof\bth\f\ballowanc\f\bfor\bcr\fdit\bloss\fs\band Oth\fr: inv\fstm\fnt\bin\bfinancing\br\fc\fivabl\fs\bfollows\bin\bmillions\bof\bdollars: Agricultur\f\band\bturf . . . . 26 12 4 42

Construction\band

R\fvolving

for\fstry ................. 13 5 3 21

R\ftail Charg\f

Not\fs Accounts Oth\fr Total

Total .......................... $ 215 $ 100 $ 66 $ 381

2015

Allowanc\f:

Total Total

B\fginning\bof\by\far\bbalanc\f ........ $ 109 $ 41 $ 25 $ 175

Total Non- Financing

Provision........................ 22 21 3 46

Past\bDu\f P\frforming Curr\fnt R\fc\fivabl\fs

Writ\f-offs...................... (26) (37) (4) (67)

R\ftail\bNot\fs: R\fcov\fri\fs...................... 10 15 1 26

Agricultur\f\band\bturf . . . . $ 213 $ 98 $18,574 $18,885 Translation\badjustm\fnts . . . . (20)(3) (23)

Construction\band

End\bof\by\far\bbalanc\f*............... $ 95 $ 40 $ 22 $ 157

for\fstry ................. 105 21 2,556 2,682

Oth\fr: Financing\br\fc\fivabl\fs:

Agricultur\f\band\bturf . . . . 42 13 7,175 7,230 End\bof\by\far\bbalanc\f................. $21,567 $ 2,740 $ 5,494 $29,801

Construction\band

Balanc\f\bindividually\b\fvaluat\fd . . . $ 40 $ 6 $ 46

for\fstry ................. 21 10 973 1,004

Total .................... $ 381 $ 142 $ 29,278 29,801

2014

Allowanc\f:

L\fss\ballowanc\f\bfor\bcr\fdit\bloss\fs ..................................... 157

B\fginning\bof\by\far\bbalanc\f........ $ 101 $ 41 $ 31 $ 173

Total financing receivables – net .................................. $29,644

Provision........................ 18 11 2 31

Writ\f-offs ...................... (16) (26) (7) (49)

R\fcov\fri\fs ...................... 11 15 26

30–59 60–89 90\bDays

Translation\badjustm\fnts . . . . (5) (1) (6)

Days Days or\bGr\fat\fr Total

Past\bDu\f Past\bDu\f Past\bDu\f Past\bDu\f End\bof\by\far\bbalanc\f*............... $ 109 $ 41 $ 25 $ 175

2014 Financing\br\fc\fivabl\fs:

R\ftail\bNot\fs: End\bof\by\far\bbalanc\f................. $22,784 $ 2,603 $ 6,812 $32,199

Agricultur\f\band\bturf . . . . . . $ 93 $ 34 $ 28 $ 155

Balanc\f\bindividually\b\fvaluat\fd . . . $ 26 $ 1 $ 27

Construction\band

for\fstry .................. 54 16 7 77

2013

Oth\fr: Allowanc\f:

Agricultur\f\band\bturf ...... 23 12 2 37

B\fginning\bof\by\far\bbalanc\f........ $ 110 $ 40 $ 27 $ 177

Construction\band Provision\b(cr\fdit).............. (2) 5 7 10

for\fstry .................. 12 3 4 19

Writ\f-offs...................... (11) (21) (3) (35)

Total ............................ $ 182 $ 65 $ 41 $ 288

R\fcov\fri\fs...................... 9 17 1 27

Translation\badjustm\fnts . . . . (5) (1) (6)

End\bof\by\far\bbalanc\f* ............... $ 101 $ 41 $ 31 $ 173

(continu\fd)

Financing\br\fc\fivabl\fs:

End\bof\by\far\bbalanc\f................. $21,160 $ 2,593 $ 6,206 $29,959

Balanc\f\bindividually\b\fvaluat\fd . . . $ 21 $ 33 $ 54

* Individual\ballowanc\fs\bw\fr\f\bnot\bsignificant.

49 Past-du\f\bamounts\bov\fr\b30\bdays\br\fpr\fs\fnt\fd\b1.28 p\frc\fnt commitm\fnts\bto\bl\fnd\badditional\bfunds\bto\bborrow\frs\bwhos\f

and\b.90\bp\frc\fnt\bof\bth\f\br\fc\fivabl\fs\bfinanc\fd\bat\bOctob\fr\b31,\b2015 accounts\bw\fr\f\bmodifi\fd\bin\btroubl\fd\bd\fbt\br\fstructurings.

and\b2014,\br\fsp\fctiv\fly.\bTh\f\ballowanc\f\bfor\bcr\fdit\bloss\fs Other Receivables

r\fpr\fs\fnt\fd\b.53\bp\frc\fnt\band\b.54\bp\frc\fnt\bof\bfinancing\br\fc\fivabl\fs Oth\fr\br\fc\fivabl\fs\bat\bOctob\fr\b31\bconsist\fd\bof\bth\f\bfollowing\bin

outstanding\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly.\bIn millions\bof\bdollars:

addition,\bat\bOctob\fr\b31,\b2015\band\b2014,\bth\f\bcompany’s\bfinancial

s\frvic\fs\bop\frations\bhad\b$179\bmillion\band\b$196\bmillion,

2015 2014

r\fsp\fctiv\fly,\bof\bd\fposits\bwithh\fld\bfrom\bd\fal\frs\band\bm\frchants Tax\fs\br\fc\fivabl\f .................................................. $ 720 $ 697 availabl\f\bfor\bpot\fntial\bcr\fdit\bloss\fs. R\finsuranc\f\br\fc\fivabl\fs ......................................... 502

Insuranc\f\bpr\fmium\br\fc\fivabl\fs ............................... 23

Financing\br\fc\fivabl\fs\bar\f\bconsid\fr\fd\bimpair\fd\bwh\fn\bit\bis Oth\fr................................................................ 271 278 probabl\f\bth\f\bcompany\bwill\bb\f\bunabl\f\bto\bcoll\fct\ball\bamounts\bdu\f Other receivables ................................................ $ 991 $ 1,500 according\bto\bth\f\bcontractual\bt\frms.\bR\fc\fivabl\fs\br\fvi\fw\fd\bfor

impairm\fnt\bg\fn\frally\binclud\f\bthos\f\bthat\bar\f\b\fith\fr\bpast\bdu\f,\bor

hav\f\bprovid\fd\bbankruptcy\bnotification,\bor\br\fquir\f\bsignificant

R\finsuranc\f\band\binsuranc\f\bpr\fmium\br\fc\fivabl\fs\bw\fr\f

coll\fction\b\ffforts.\bR\fc\fivabl\fs,\bwhich\bar\f\bimpair\fd,\bar\f\bg\fn\frally associat\fd\bwith\bth\f\bfinancial\bs\frvic\fs’\bcrop\binsuranc\f\bsubsidiary

classifi\fd\bas\bnon-p\frforming. (s\f\f\bNot\f\b9),\bwhich\bwas\bsold\bin\b2015\b(s\f\f\bNot\f\b4).

An\banalysis\bof\bth\f\bimpair\fd\bfinancing\br\fc\fivabl\fs\bat 13. \bE\fURITIZATION OF FINAN\fING RE\fEIVABLE\b

Octob\fr\b31\bfollows\bin\bmillions\bof\bdollars: Th\f\bcompany,\bas\ba\bpart\bof\bits\bov\frall\bfunding\bstrat\fgy,

p\friodically\btransf\frs\bc\frtain\bfinancing\br\fc\fivabl\fs\b(r\ftail\bnot\fs)

UnpaidAv\frag\f into\bvariabl\f\bint\fr\fst\b\fntiti\fs\b(VIEs)\bthat\bar\f\bsp\fcial\bpurpos\f R\fcord\fd Principal Sp\fcific R\fcord\fd \fntiti\fs\b(SPEs),\bor\ba\bnon-VIE\bbanking\bop\fration,\bas\bpart\bof\bits Inv\fstm\fnt Balanc\f Allowanc\f Inv\fstm\fnt

ass\ft-back\fd\bs\fcuriti\fs\bprograms\b(s\fcuritizations).\bTh\f\bstructur\f 2015* of\bth\fs\f\btransactions\bis\bsuch\bthat\bth\f\btransf\fr\bof\bth\f\br\ftail\bnot\fs R\fc\fivabl\fs\bwith\bsp\fcific did\bnot\bm\f\ft\bth\f\bcrit\fria\bof\bsal\fs\bof\br\fc\fivabl\fs,\band\bis, allowanc\f**................. $ 14 $ 13 $ 2 $ 13 th\fr\ffor\f,\baccount\fd\bfor\bas\ba\bs\fcur\fd\bborrowing.\bSPEs\butiliz\fd\bin R\fc\fivabl\fs\bwithout\ba

sp\fcific\ballowanc\f*** ..... 14 14 20

s\fcuritizations\bof\br\ftail\bnot\fs\bdiff\fr\bfrom\both\fr\b\fntiti\fs\binclud\fd

in\bth\f\bcompany’s\bconsolidat\fd\bstat\fm\fnts\bb\fcaus\f\bth\f\bass\fts

Total............................. $ 28 $ 27 $ 2 $ 33 th\fy\bhold\bar\f\bl\fgally\bisolat\fd.\bUs\f\bof\bth\f\bass\fts\bh\fld\bby\bth\f\bSPEs Agricultur\f\band\bturf . . . . $ 19 $ 18 $ 2 $ 20 or\bth\f\bnon-VIE\bis\br\fstrict\fd\bby\bt\frms\bof\bth\f\bdocum\fnts\bgov\frning Construction\band th\f\bs\fcuritization\btransactions. for\fstry ................ $ 9 $ 9 $ 13 In\bs\fcuritizations\bof\br\ftail\bnot\fs\br\flat\fd\bto\bs\fcur\fd 2014* borrowings,\bth\f\br\ftail\bnot\fs\bar\f\btransf\frr\fd\bto\bc\frtain\bSPEs\bor\bto R\fc\fivabl\fs\bwith\bsp\fcific a\bnon-VIE\bbanking\bop\fration,\bwhich\bin\bturn\bissu\f\bd\fbt\bto allowanc\f**................. $ 9 $ 9 $ 2 $ 10 inv\fstors.\bTh\f\bd\fbt\bs\fcuriti\fs\bissu\fd\bto\bth\f\bthird\bparty\binv\fstors R\fc\fivabl\fs\bwithout\ba r\fsult\bin\bs\fcur\fd\bborrowings,\bwhich\bar\f\br\fcord\fd\bas\b‘‘Short-t\frm sp\fcific\ballowanc\f** ...... 6 6 7 s\fcuritization\bborrowings’’\bon\bth\f\bconsolidat\fd\bbalanc\f\bsh\f\ft. Total............................. $ 15 $ 15 $ 2 $ 17 Th\f\bs\fcuritiz\fd\br\ftail\bnot\fs\bar\f\br\fcord\fd\bas\b‘‘Financing

Agricultur\f\band\bturf . . . . $ 12 $ 12 $ 2 $ 13 r\fc\fivabl\fs\bs\fcuritiz\fd – n\ft’’\bon\bth\f\bbalanc\f\bsh\f\ft.\bTh\f\btotal

r\fstrict\fd\bass\fts\bon\bth\f\bbalanc\f\bsh\f\ft\br\flat\fd\bto\bth\fs\f

Construction\band

for\fstry ................ $ 3 $ 3 $ 4

s\fcuritizations\binclud\f\bth\f\bfinancing\br\fc\fivabl\fs\bs\fcuritiz\fd\bl\fss

an\ballowanc\f\bfor\bcr\fdit\bloss\fs,\band\both\fr\bass\fts\bprimarily

* Financ\f\bincom\f\br\fcogniz\fd\bwas\bnot\bmat\frial. r\fpr\fs\fnting\br\fstrict\fd\bcash.\bFor\bthos\f\bs\fcuritizations\bin\bwhich ** Primarily\br\ftail\bnot\fs.

*** Primarily\br\ftail\bnot\fs\band\bwhol\fsal\f\br\fc\fivabl\fs. r\ftail\bnot\fs\bar\f\btransf\frr\fd\binto\bSPEs,\bth\f\bSPEs\bsupporting\bth\f

s\fcur\fd\bborrowings\bar\f\bconsolidat\fd\bunl\fss\bth\f\bcompany\bdo\fs

A\btroubl\fd\bd\fbt\br\fstructuring\bis\bg\fn\frally\bth\f\bmodification not\bhav\f\bboth\bth\f\bpow\fr\bto\bdir\fct\bth\f\bactiviti\fs\bthat\bmost

of\bd\fbt\bin\bwhich\ba\bcr\fditor\bgrants\ba\bconc\fssion\bit\bwould\bnot significantly\bimpact\bth\f\bSPEs’\b\fconomic\bp\frformanc\f\band\bth\f

oth\frwis\f\bconsid\fr\bto\ba\bd\fbtor\bthat\bis\b\fxp\fri\fncing\bfinancial obligation\bto\babsorb\bloss\fs\bor\bth\f\bright\bto\br\fc\fiv\f\bb\fn\ffits\bthat

difficulti\fs.\bTh\fs\f\bmodifications\bmay\binclud\f\ba\br\fduction\bof\bth\f could\bpot\fntially\bb\f\bsignificant\bto\bth\f\bSPEs.\bNo\badditional

stat\fd\bint\fr\fst\brat\f,\ban\b\fxt\fnsion\bof\bth\f\bmaturity\bdat\fs,\ba support\bto\bth\fs\f\bSPEs\bb\fyond\bwhat\bwas\bpr\fviously\bcontractually

r\fduction\bof\bth\f\bfac\f\bamount\bor\bmaturity\bamount\bof\bth\f\bd\fbt,\bor r\fquir\fd\bhas\bb\f\fn\bprovid\fd\bduring\bth\f\br\fporting\bp\friods.

a\br\fduction\bof\baccru\fd\bint\fr\fst.\bDuring\b2015,\b2014\band\b2013,

In\bc\frtain\bs\fcuritizations,\bth\f\bcompany\bconsolidat\fs\bth\f

th\f\bcompany\bid\fntifi\fd\b107,\b66\band\b92\bfinancing\br\fc\fivabl\f

SPEs\bsinc\f\bit\bhas\bboth\bth\f\bpow\fr\bto\bdir\fct\bth\f\bactiviti\fs\bthat

contracts,\bprimarily\bop\frating\bloans\band\br\ftail\bnot\fs,\bas\btroubl\fd

most\bsignificantly\bimpact\bth\f\bSPEs’\b\fconomic\bp\frformanc\f

d\fbt\br\fstructurings\bwith\baggr\fgat\f\bbalanc\fs\bof\b$8\bmillion,

through\bits\brol\f\bas\bs\frvic\fr\bof\ball\bth\f\br\fc\fivabl\fs\bh\fld\bby\bth\f

$3\bmillion\band\b$16\bmillion\bpr\f-modification\band\b$7\bmillion,

SPEs,\band\bth\f\bobligation\bthrough\bvariabl\f\bint\fr\fsts\bin\bth\f\bSPEs

$2\bmillion\band\b$15\bmillion\bpost-modification,\br\fsp\fctiv\fly.\bDuring

to\babsorb\bloss\fs\bor\br\fc\fiv\f\bb\fn\ffits\bthat\bcould\bpot\fntially\bb\f

th\fs\f\bsam\f\bp\friods,\bth\fr\f\bw\fr\f\bno\bsignificant\btroubl\fd\bd\fbt

significant\bto\bth\f\bSPEs.\bTh\f\br\fstrict\fd\bass\fts\b(r\ftail\bnot\fs

r\fstructurings\bthat\bsubs\fqu\fntly\bd\ffault\fd\band\bw\fr\f\bwritt\fn\boff.

s\fcuritiz\fd,\ballowanc\f\bfor\bcr\fdit\bloss\fs\band\both\fr\bass\fts)\bof\bth\f

At\bOctob\fr\b31,\b2015,\bth\f\bcompany\bhad\bno\bsignificant

consolidat\fd\bSPEs\btotal\fd\b$3,006\bmillion\band\b$3,011\bmillion\bat

50 Octob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly.\bTh\f\bliabiliti\fs\b(short- Th\f\bcompon\fnts\bof\bconsolidat\fd\br\fstrict\fd\bass\fts\br\flat\fd

t\frm\bs\fcuritization\bborrowings\band\baccru\fd\bint\fr\fst)\bof\bth\fs\f to\bs\fcur\fd\bborrowings\bin\bs\fcuritization\btransactions\bat

SPEs\btotal\fd\b$2,743\bmillion\band\b$2,942\bmillion\bat\bOctob\fr\b31, Octob\fr\b31\bw\fr\f\bas\bfollows\bin\bmillions\bof\bdollars:

2015\band\b2014,\br\fsp\fctiv\fly.\bIn\bth\f\bfourth\bquart\fr\bof\b2015,\bas

2015 2014 part\bof\ba\br\fc\fivabl\f\btransf\fr,\bth\f\bcompany\br\ftain\fd\b$228\bmillion Financing\br\fc\fivabl\fs\bs\fcuritiz\fd\b(r\ftail\bnot\fs)......... $4,848 $4,616 of\bs\fcuritization\bborrowings,\bwith\ba\bbalanc\f\bof\b$189\bmillion\bat Allowanc\f\bfor\bcr\fdit\bloss\fs .................................. (13) (14) Octob\fr\b31,\b2015.\bThis\bamount\bis\bnot\bshown\bas\ba\bliability\babov\f Oth\fr\bass\fts..................................................... 109 108 as\bth\f\bborrowing\bis\bnot\boutstanding\bto\ba\bthird\bparty.\bTh\f\bcr\fdit

hold\frs\bof\bth\fs\f\bSPEs\bdo\bnot\bhav\f\bl\fgal\br\fcours\f\bto\bth\f

Total restricted securitized assets ....................... $4,944 $4,710

company’s\bg\fn\fral\bcr\fdit.

Th\f\bcompon\fnts\bof\bconsolidat\fd\bs\fcur\fd\bborrowings\band

In\bc\frtain\bs\fcuritizations,\bth\f\bcompany\btransf\frs\br\ftail\bnot\fs

oth\fr\bliabiliti\fs\br\flat\fd\bto\bs\fcuritizations\bat\bOctob\fr\b31\bw\fr\f\bas

to\ba\bnon-VIE\bbanking\bop\fration,\bwhich\bis\bnot\bconsolidat\fd\bsinc\f

follows\bin\bmillions\bof\bdollars:

th\f\bcompany\bdo\fs\bnot\bhav\f\ba\bcontrolling\bint\fr\fst\bin\bth\f\b\fntity.

Th\f\bcompany’s\bcarrying\bvalu\fs\band\bint\fr\fsts\br\flat\fd\bto\bth\f

2015 2014 s\fcuritizations\bwith\bth\f\bunconsolidat\fd\bnon-VIE\bw\fr\f\br\fstrict\fd Short-t\frm\bs\fcuritization\bborrowings ....................... $4,590 $4,559 ass\fts\b(r\ftail\bnot\fs\bs\fcuritiz\fd,\ballowanc\f\bfor\bcr\fdit\bloss\fs\band Accru\fd\bint\fr\fst\bon\bborrowings .............................. 2 1 oth\fr\bass\fts)\bof\b$249\bmillion\band\b$368\bmillion\bat\bOctob\fr\b31,

Total liabilities related to restricted 2015\band\b2014,\br\fsp\fctiv\fly.\bTh\f\bliabiliti\fs\b(short-t\frm securitized assets........................................... $ 4,592 $4,560 s\fcuritization\bborrowings\band\baccru\fd\bint\fr\fst)\bw\fr\f

$238\bmillion\band\b$351\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,

r\fsp\fctiv\fly.

Th\f\bs\fcur\fd\bborrowings\br\flat\fd\bto\bth\fs\f\br\fstrict\fd

s\fcuritiz\fd\br\ftail\bnot\fs\bar\f\bobligations\bthat\bar\f\bpayabl\f\bas\bth\f

In\bc\frtain\bs\fcuritizations,\bth\f\bcompany\btransf\frs\br\ftail\bnot\fs

r\ftail\bnot\fs\bar\f\bliquidat\fd.\bR\fpaym\fnt\bof\bth\f\bs\fcur\fd

into\bbank-sponsor\fd,\bmulti-s\fll\fr,\bcomm\frcial\bpap\fr\bconduits,

borrowings\bd\fp\fnds\bprimarily\bon\bcash\bflows\bg\fn\frat\fd\bby\bth\f

which\bar\f\bSPEs\bthat\bar\f\bnot\bconsolidat\fd.\bTh\f\bcompany\bdo\fs\bnot

r\fstrict\fd\bass\fts.\bDu\f\bto\bth\f\bcompany’s\bshort-t\frm\bcr\fdit\brating,

s\frvic\f\ba\bsignificant\bportion\bof\bth\f\bconduits’\br\fc\fivabl\fs,\band

cash\bcoll\fctions\bfrom\bth\fs\f\br\fstrict\fd\bass\fts\bar\f\bnot\br\fquir\fd\bto

th\fr\ffor\f,\bdo\fs\bnot\bhav\f\bth\f\bpow\fr\bto\bdir\fct\bth\f\bactiviti\fs\bthat

b\f\bplac\fd\binto\ba\bs\fgr\fgat\fd\bcoll\fction\baccount\buntil\bimm\fdiat\fly

most\bsignificantly\bimpact\bth\f\bconduits’\b\fconomic\bp\frformanc\f.

prior\bto\bth\f\btim\f\bpaym\fnt\bis\br\fquir\fd\bto\bth\f\bs\fcur\fd\bcr\fditors.

Th\fs\f\bconduits\bprovid\f\ba\bfunding\bsourc\f\bto\bth\f\bcompany\b(as\bw\fll

At\bOctob\fr\b31,\b2015,\bth\f\bmaximum\br\fmaining\bt\frm\bof\ball

as\both\fr\btransf\frors\binto\bth\f\bconduit)\bas\bth\fy\bfund\bth\f\br\ftail

s\fcuritiz\fd\br\ftail\bnot\fs\bwas\bapproximat\fly\bsix\by\fars.

not\fs\bthrough\bth\f\bissuanc\f\bof\bcomm\frcial\bpap\fr.\bTh\f\bcompany’s

carrying\bvalu\fs\band\bvariabl\f\bint\fr\fst\br\flat\fd\bto\bth\fs\f\bconduits 14. EQUIPMENT ON OPERATING LEA\bE\b

w\fr\f\br\fstrict\fd\bass\fts\b(r\ftail\bnot\fs\bs\fcuritiz\fd,\ballowanc\f\bfor Op\frating\bl\fas\fs\baris\f\bprimarily\bfrom\bth\f\bl\fasing\bof\bJohn\bD\f\fr\f

cr\fdit\bloss\fs\band\both\fr\bass\fts)\bof\b$1,689\bmillion\band \fquipm\fnt\bto\br\ftail\bcustom\frs.\bInitial\bl\fas\f\bt\frms\bg\fn\frally

$1,331\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly.\bTh\f rang\f\bfrom\bfour\bto\b60\bmonths.\bN\ft\b\fquipm\fnt\bon\bop\frating

liabiliti\fs\b(short-t\frm\bs\fcuritization\bborrowings\band\baccru\fd l\fas\fs\bat\bOctob\fr\b31\bconsist\fd\bof\bth\f\bfollowing\bin\bmillions\bof

int\fr\fst)\br\flat\fd\bto\bth\fs\f\bconduits\bw\fr\f\b$1,611\bmillion\band dollars:

$1,267\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly.

2015 2014 Th\f\bcompany’s\bcarrying\bamount\bof\bth\f\bliabiliti\fs\bto\bth\f Equipm\fnt\bon\bop\frating\bl\fas\fs: unconsolidat\fd\bconduits,\bcompar\fd\bto\bth\f\bmaximum\b\fxposur\f\bto Agricultur\f\band\bturf ....................................... $ 3,909 $3,261 loss\br\flat\fd\bto\bth\fs\f\bconduits,\bwhich\bwould\bonly\bb\f\bincurr\fd\bin Construction\band\bfor\fstry...............................1,061 755 th\f\b\fv\fnt\bof\ba\bcompl\ft\f\bloss\bon\bth\f\br\fstrict\fd\bass\fts,\bwas\bas

follows\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars:

Equipment on operating leases – net .................... $4,970 $4,016

2015

Th\f\b\fquipm\fnt\bis\bd\fpr\fciat\fd\bon\ba\bstraight-lin\f\bbasis\bov\fr Carrying\bvalu\f\bof\bliabiliti\fs ................................................... $ 1,611 th\f\bt\frms\bof\bth\f\bl\fas\f.\bTh\f\baccumulat\fd\bd\fpr\fciation\bon\bthis Maximum\b\fxposur\f\bto\bloss.................................................. 1,689 \fquipm\fnt\bwas\b$793\bmillion\band\b$634\bmillion\bat\bOctob\fr\b31,

2015\band\b2014,\br\fsp\fctiv\fly.\bTh\f\bcorr\fsponding\bd\fpr\fciation

Th\f\btotal\bass\fts\bof\bunconsolidat\fd\bVIEs\br\flat\fd\bto

\fxp\fns\f\bwas\b$577\bmillion\bin\b2015,\b$494\bmillion\bin\b2014\band

s\fcuritizations\bw\fr\f\bapproximat\fly\b$54\bbillion\bat\bOctob\fr\b31,

$389\bmillion\bin\b2013.

2015.

Futur\f\bpaym\fnts\bto\bb\f\br\fc\fiv\fd\bon\bop\frating\bl\fas\fs

total\fd\b$1,704\bmillion\bat\bOctob\fr\b31,\b2015\band\bar\f\bsch\fdul\fd\bin

millions\bof\bdollars\bas\bfollows:\b2016 – $712,\b2017 – $508,\b2018 –

$294,\b2019 – $156\band\b2020 – $34.

51 15. INVENTORIE\bCapitaliz\fd\bsoftwar\f\bhas\ban\b\fstimat\fd\bus\fful\blif\f\bof\bthr\f\f

y\fars.\bTh\f\bamounts\bof\btotal\bcapitaliz\fd\bsoftwar\f\bcosts,\bincluding

Most\binv\fntori\fs\bown\fd\bby\bD\f\fr\f\b&\bCompany\band\bits\bU.S.

purchas\fd\band\bint\frnally\bd\fv\flop\fd\bsoftwar\f,\bclassifi\fd\bas

\fquipm\fnt\bsubsidiari\fs\bar\f\bvalu\fd\bat\bcost,\bon\bth\f\b‘‘last-in,\bfirst-

‘‘Oth\fr\bAss\fts’’\bat\bOctob\fr\b31,\b2015\band\b2014\bw\fr\f\b$934\bmillion

out’’\b(LIFO)\bbasis.\bR\fmaining\binv\fntori\fs\bar\f\bg\fn\frally\bvalu\fd\bat

and\b$912\bmillion,\bl\fss\baccumulat\fd\bamortization\bof\b$681\bmillion

th\f\blow\fr\bof\bcost,\bon\bth\f\b‘‘first-in,\bfirst-out’’\b(FIFO)\bbasis,\bor

and\b$656\bmillion,\br\fsp\fctiv\fly.\bCapitaliz\fd\bint\fr\fst\bon\bsoftwar\f

mark\ft.\bTh\f\bvalu\f\bof\bgross\binv\fntori\fs\bon\bth\f\bLIFO\bbasis

was\b$2\bmillion\bat\bOctob\fr\b31,\b2015.\bAmortization\bof\bth\fs\f

r\fpr\fs\fnt\fd\b66\bp\frc\fnt\band\b65\bp\frc\fnt\bof\bworldwid\f\bgross

softwar\f\bcosts\bwas\b$103\bmillion\bin\b2015,\b$106\bmillion\bin\b2014

inv\fntori\fs\bat\bFIFO\bvalu\f\bat\bOctob\fr\b31,\b2015\band\b2014,

and\b$93\bmillion\bin\b2013.\bTh\f\bcost\bof\bl\fas\fd\bsoftwar\f\bass\fts

r\fsp\fctiv\fly.\bTh\f\bpr\ftax\bfavorabl\f\bincom\f\b\fff\fcts\bfrom\bth\f

und\fr\bcapital\bl\fas\fs\bamounting\bto\b$86\bmillion\band\b$77\bmillion\bat

liquidation\bof\bLIFO\binv\fntory\bduring\b2015\band\b2014\bw\fr\f

Octob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly,\bis\binclud\fd\bin\both\fr

approximat\fly\b$22\bmillion\band\b$13\bmillion,\br\fsp\fctiv\fly.\bIf\ball

ass\fts.

inv\fntori\fs\bhad\bb\f\fn\bvalu\fd\bon\ba\bFIFO\bbasis,\b\fstimat\fd

inv\fntori\fs\bby\bmajor\bclassification\bat\bOctob\fr\b31\bin\bmillions\bof Th\f\bcost\bof\bcomplianc\f\bwith\bfor\fs\f\fabl\f\b\fnvironm\fntal

dollars\bwould\bhav\f\bb\f\fn\bas\bfollows: r\fquir\fm\fnts\bhas\bb\f\fn\baccru\fd\band\bdid\bnot\bhav\f\ba\bmat\frial

\fff\fct\bon\bth\f\bcompany’s\bconsolidat\fd\bfinancial\bstat\fm\fnts.

2015 2014 17. GOODWILL AND OTHER INTANGIBLE A\b\bET\b – NET Raw\bmat\frials\band\bsuppli\fs.................................... $ 1,559 $1,724

Work-in-proc\fss .................................................. 450 654 Th\f\bchang\fs\bin\bamounts\bof\bgoodwill\bby\bop\frating\bs\fgm\fnts Finish\fd\bgoods\band\bparts ...................................... 3,234 3,360 w\fr\f\bas\bfollows\bin\bmillions\bof\bdollars:

Total\bFIFO\bvalu\f............................................ 5,243 5,738

Agricultur\f Construction

L\fss\badjustm\fnt\bto\bLIFO\bvalu\f ................................1,426 1,528

and and

Inventories ........................................................ $ 3,817 $4,210

Turf For\fstry Total

Balanc\f\bat\bOctob\fr\b31,\b2013 .............. $ 302 $ 603 $ 905

16. PROPERTY AND DEPRE\fIATION L\fss\baccumulat\fd\bimpairm\fnt\bloss\fs 60 60

N\ft\bbalanc\f ................................. 242 603 845

A\bsummary\bof\bprop\frty\band\b\fquipm\fnt\bat\bOctob\fr\b31\bin\bmillions Div\fstitur\f* .................................... (60) (60) of\bdollars\bfollows: Translation\badjustm\fnts\band\both\fr . . . . . . . (7) (47) (54)

Us\fful\bLiv\fs* Balanc\f\bat\bOctob\fr\b31,\b2014.............. 235 556 791

(Y\fars) 2015 2014

L\fss\b accumulat\fd\b impairm\fnt\b loss\fs*

Equipment Operations N\ft\bbalanc\f................................. 235 556 791

Land .............................................. $ 114 $ 120

Translation\badjustm\fnts\band\both\fr . . . . . . . (8) (57) (65)

Buildings\band\bbuilding\b\fquipm\fnt ........ 233,016 3,037

Goodwill at October 31, 2015 ........... $ 227 $ 499 $ 726

Machin\fry\band\b\fquipm\fnt .................. 11 5,055 5,089

Di\fs,\bpatt\frns,\btools,\b\ftc. ................... 8 1,567 1,552

* Accumulat\fd\bimpairm\fnt\bloss\fs\bw\fr\f\balso\br\fduc\fd\bby\b$60\bmillion\br\flat\fd\bto All\both\fr......................................... 5 875 889 th\f\bsal\f\bof\bth\f\bWat\fr\bop\frations\b(s\f\f\bNot\f\b4). Construction\bin\bprogr\fss .................... 345 530

Th\f\bcompon\fnts\bof\both\fr\bintangibl\f\bass\fts\bar\f\bas\bfollows\bin Total\bat\bcost................................. 10,972 11,217 millions\bof\bdollars: L\fss\baccumulat\fd\bd\fpr\fciation............5,846 5,694

Total ........................................... 5,126 5,523

Us\fful\bLiv\fs*

(Y\fars) 2015 2014

Financial \bervices

Land .............................................. 4 4

Amortiz\fd\bintangibl\f\bass\fts:

Buildings\band\bbuilding\b\fquipm\fnt ........ 27 73 71

Custom\fr\blists\band\br\flationships............... 14 $ 23 $ 20

All\both\fr ......................................... 6 36 37

T\fchnology,\bpat\fnts,\btrad\fmarks\band\both\fr 17 96 90

Total\bat\bcost ................................. 113 112

Total\bat\bcost..................................... 119 110

L\fss\baccumulat\fd\bd\fpr\fciation ............58 57

L\fss\baccumulat\fd\bamortization** .............55 45

Total ........................................... 55 55

Total............................................... 64 65

Property and equipment – net ...........$5,181 $ 5,578

Unamortiz\fd\bintangibl\f\bass\fts:

Lic\fns\fs .............................................. 4

* W\fight\fd-av\frag\fs

Other intangible assets – net....................$ 64 $ 69 Total\bprop\frty\band\b\fquipm\fnt\badditions\bin\b2015,\b2014\band * W\fight\fd-av\frag\fs 2013\bw\fr\f\b$666\bmillion,\b$1,016\bmillion\band\b$1,158\bmillion\band ** Accumulat\fd\bamortization\bat\b2015\band\b2014\bfor\bcustom\fr\blists\band d\fpr\fciation\bwas\b$692\bmillion,\b$696\bmillion\band\b$637\bmillion, r\flationships\bwas\b$10\bmillion\band\b$9\bmillion\band\bt\fchnology,\bpat\fnts, r\fsp\fctiv\fly.\bCapitaliz\fd\bint\fr\fst\bwas\b$6\bmillion,\b$6\bmillion\band trad\fmarks\band\both\fr\bwas\b$45\bmillion\band\b$36\bmillion,\br\fsp\fctiv\fly. $13\bmillion\bin\bth\f\bsam\f\bp\friods,\br\fsp\fctiv\fly.\bTh\f\bcost\bof\bl\fas\fd

Oth\fr\bintangibl\f\bass\fts\bar\f\bstat\fd\bat\bcost\bl\fss\baccumulat\fd

prop\frty\band\b\fquipm\fnt\bund\fr\bcapital\bl\fas\fs\bof\b$27\bmillion\band

amortization.\bTh\f\bamortization\bof\both\fr\bintangibl\f\bass\fts\bin

$36\bmillion\band\baccumulat\fd\bd\fpr\fciation\bof\b$14\bmillion\band

2015,\b2014\band\b2013\bwas\b$10\bmillion,\b$11\bmillion\band

$15\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly,\bis

$22\bmillion,\br\fsp\fctiv\fly.\bTh\f\b\fstimat\fd\bamortization\b\fxp\fns\f\bfor

includ\fd\bin\bprop\frty\band\b\fquipm\fnt.

th\f\bn\fxt\bfiv\f\by\fars\bis\bas\bfollows\bin\bmillions\bof\bdollars:\b2016 – $12,

2017 – $12,\b2018 – $8,\b2019 – $5\band\b2020 – $5.

52 18. TOTAL \bHORT-TERM BORROWING\b\fquipm\fnt\bop\frations\bhad\bth\f\bcapacity\bto\bincur\badditional\bd\fbt

of\b$16,408\bmillion\bat\bOctob\fr\b31,\b2015.\bAll\bof\bth\fs\f

Total\bshort-t\frm\bborrowings\bat\bOctob\fr\b31\bconsist\fd\bof\bth\f

r\fquir\fm\fnts\bof\bth\f\bcr\fdit\bagr\f\fm\fnts\bhav\f\bb\f\fn\bm\ft\bduring\bth\f

following\bin\bmillions\bof\bdollars:

p\friods\binclud\fd\bin\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.

2015 2014 D\f\fr\f\b&\bCompany\bhas\ban\bagr\f\fm\fnt\bwith\bCapital Equipment Operations Corporation\bpursuant\bto\bwhich\bit\bhas\bagr\f\fd\bto\bcontinu\f\bto\bown, Comm\frcial\bpap\fr................................................ $ 225 $ 45 dir\fctly\bor\bthrough\bon\f\bor\bmor\f\bwholly-own\fd\bsubsidiari\fs,\bat Not\fs\bpayabl\f\bto\bbanks ........................................ 154 146 l\fast\b51\bp\frc\fnt\bof\bth\f\bvoting\bshar\fs\bof\bcapital\bstock\bof\bCapital Long-t\frm\bborrowings\bdu\f\bwithin\bon\f\by\far ............... 86 243 Corporation\band\bto\bmaintain\bCapital\bCorporation’s\bconsolidat\fd Total............................................................. 465 434 tangibl\f\bn\ft\bworth\bat\bnot\bl\fss\bthan\b$50\bmillion.\bThis\bagr\f\fm\fnt

also\bobligat\fs\bD\f\fr\f\b&\bCompany\bto\bmak\f\bpaym\fnts\bto\bCapital

Financial \bervices Corporation\bsuch\bthat\bits\bconsolidat\fd\bratio\bof\b\farnings\bto\bfix\fd Comm\frcial\bpap\fr ................................................ 2,743 2,588

Not\fs\bpayabl\f\bto\bbanks ........................................ 52 267

charg\fs\bis\bnot\bl\fss\bthan\b1.05\bto\b1\bfor\b\fach\bfiscal\bquart\fr. Long-t\frm\bborrowings\bdu\f\bwithin\bon\f\by\far* .............5,167 4,730 D\f\fr\f\b&\bCompany’s\bobligations\bto\bmak\f\bpaym\fnts\bto\bCapital

Corporation\bund\fr\bth\f\bagr\f\fm\fnt\bar\f\bind\fp\fnd\fnt\bof\bwh\fth\fr

Total............................................................. 7,962 7,585 Capital\bCorporation\bis\bin\bd\ffault\bon\bits\bind\fbt\fdn\fss,\bobligations \bhort-term borrowings....................................... 8,427 8,019 or\both\fr\bliabiliti\fs.\bFurth\fr,\bD\f\fr\f\b&\bCompany’s\bobligations\bund\fr Financial \bervices th\f\bagr\f\fm\fnt\bar\f\bnot\bm\fasur\fd\bby\bth\f\bamount\bof\bCapital Short-t\frm\bs\fcuritization\bborrowings .......................4,590 4,559 Corporation’s\bind\fbt\fdn\fss,\bobligations\bor\both\fr\bliabiliti\fs. Total short-term borrowings ................................ $13,017 $12,578 D\f\fr\f\b&\bCompany’s\bobligations\bto\bmak\f\bpaym\fnts\bund\fr\bthis

agr\f\fm\fnt\bar\f\b\fxpr\fssly\bstat\fd\bnot\bto\bb\f\ba\bguaranty\bof\bany

* Includ\fs\bunamortiz\fd\bfair\bvalu\f\badjustm\fnts\br\flat\fd\bto\bint\fr\fst\brat\f\bswaps. sp\fcific\bind\fbt\fdn\fss,\bobligation\bor\bliability\bof\bCapital

Th\f\bshort-t\frm\bs\fcuritization\bborrowings\bfor\bfinancial Corporation\band\bar\f\b\fnforc\fabl\f\bonly\bby\bor\bin\bth\f\bnam\f\bof

s\frvic\fs\bar\f\bs\fcur\fd\bby\bfinancing\br\fc\fivabl\fs\b(r\ftail\bnot\fs)\bon\bth\f Capital\bCorporation.\bNo\bpaym\fnts\bw\fr\f\br\fquir\fd\bund\fr\bthis

balanc\f\bsh\f\ft\b(s\f\f\bNot\f\b13).\bAlthough\bth\fs\f\bs\fcuritization agr\f\fm\fnt\bduring\bth\f\bp\friods\binclud\fd\bin\bth\f\bconsolidat\fd

borrowings\bar\f\bclassifi\fd\bas\bshort-t\frm\bsinc\f\bpaym\fnt\bis\br\fquir\fd financial\bstat\fm\fnts.

if\bth\f\br\ftail\bnot\fs\bar\f\bliquidat\fd\b\farly,\bth\f\bpaym\fnt\bsch\fdul\f\bfor 19. A\f\fOUNT\b PAYABLE AND A\f\fRUED EXPEN\bE\b

th\fs\f\bborrowings\bof\b$4,590\bmillion\bat\bOctob\fr\b31,\b2015\bbas\fd

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs\bat\bOctob\fr\b31\bconsist\fd

on\bth\f\b\fxp\fct\fd\bliquidation\bof\bth\f\br\ftail\bnot\fs\bin\bmillions\bof

of\bth\f\bfollowing\bin\bmillions\bof\bdollars:

dollars\bis\bas\bfollows:\b2016 – $2,337,\b2017 – $1,413,\b2018 –

$661,\b2019 – $157,\b2020 – $21\band\b2021 – $1.

2015 2014

Th\f\bw\fight\fd-av\frag\f\bint\fr\fst\brat\fs\bon\btotal\bshort-t\frm Equipment Operations borrowings,\b\fxcluding\bcurr\fnt\bmaturiti\fs\bof\blong-t\frm Accounts\bpayabl\f: borrowings,\bat\bOctob\fr\b31,\b2015\band\b2014\bw\fr\f\b.9\bp\frc\fnt\band Trad\f\bpayabl\fs .................................................... $ 1,435 $1,661 1.0\bp\frc\fnt,\br\fsp\fctiv\fly. Divid\fnds\bpayabl\f................................................ 193 210

Oth\fr ................................................................ 186 208

Lin\fs\bof\bcr\fdit\bavailabl\f\bfrom\bU.S.\band\bfor\fign\bbanks\bw\fr\f Accru\fd\b\fxp\fns\fs: $7,205\bmillion\bat\bOctob\fr\b31,\b2015.\bAt\bOctob\fr\b31,\b2015, D\fal\fr\bsal\fs\bdiscounts .......................................... 1,423 1,551 $4,031\bmillion\bof\bth\fs\f\bworldwid\f\blin\fs\bof\bcr\fdit\bw\fr\f\bunus\fd. Employ\f\f\bb\fn\ffits............................................... 1,122 1,350 For\bth\f\bpurpos\f\bof\bcomputing\bth\f\bunus\fd\bcr\fdit\blin\fs, Product\bwarranti\fs.............................................. 807 809 comm\frcial\bpap\fr\band\bshort-t\frm\bbank\bborrowings,\b\fxcluding Un\farn\fd\br\fv\fnu\f............................................... 379 355 s\fcur\fd\bborrowings\band\bth\f\bcurr\fnt\bportion\bof\blong-t\frm Oth\fr................................................................ 1,256 1,374

borrowings,\bw\fr\f\bprimarily\bconsid\fr\fd\bto\bconstitut\f\butilization. Total............................................................. 6,801 7,518 Includ\fd\bin\bth\f\babov\f\blin\fs\bof\bcr\fdit\bw\fr\f\blong-t\frm\bcr\fdit Financial \bervices facility\bagr\f\fm\fnts\bfor\b$2,900\bmillion,\b\fxpiring\bin\bApril\b2019,\band Accounts\bpayabl\f: $2,900\bmillion,\b\fxpiring\bin\bApril\b2020.\bTh\f\bagr\f\fm\fnts\bar\f D\fposits\bwithh\fld\bfrom\bd\fal\frs\band\bm\frchants.......... 179 196 mutually\b\fxt\fndabl\f\band\bth\f\bannual\bfacility\bf\f\fs\bar\f\bnot Oth\fr................................................................ 258 468 significant.\bTh\fs\f\bcr\fdit\bagr\f\fm\fnts\br\fquir\f\bCapital\bCorporation Accru\fd\b\fxp\fns\fs: to\bmaintain\bits\bconsolidat\fd\bratio\bof\b\farnings\bto\bfix\fd\bcharg\fs\bat Un\farn\fd\br\fv\fnu\f ............................................... 671 647 not\bl\fss\bthan\b1.05\bto\b1\bfor\b\fach\bfiscal\bquart\fr\band\bth\f\bratio\bof Accru\fd\bint\fr\fst.................................................. 111 103

Employ\f\f\bb\fn\ffits ............................................... 71 87

s\fnior\bd\fbt,\b\fxcluding\bs\fcuritization\bind\fbt\fdn\fss,\bto\bcapital Insuranc\f\bclaims\br\fs\frv\f* ...................................... 29 247 bas\f\b(total\bsubordinat\fd\bd\fbt\band\bstockhold\fr’s\b\fquity\b\fxcluding Oth\fr................................................................ 192 279 accumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss))\bat\bnot\bmor\f

than\b11\bto\b1\bat\bth\f\b\fnd\bof\bany\bfiscal\bquart\fr.\bTh\f\bcr\fdit

Total............................................................. 1,511 2,027

agr\f\fm\fnts\balso\br\fquir\f\bth\f\b\fquipm\fnt\bop\frations\bto\bmaintain\ba Eliminations**........................................................ 1,001 991 ratio\bof\btotal\bd\fbt\bto\btotal\bcapital\b(total\bd\fbt\band\bstockhold\frs’ Accounts payable and accrued expenses.................... $7,311 $8,554 \fquity\b\fxcluding\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f * S\f\f\bNot\f\b9 (loss))\bof\b65\bp\frc\fnt\bor\bl\fss\bat\bth\f\b\fnd\bof\b\fach\bfiscal\bquart\fr. ** Primarily\btrad\f\br\fc\fivabl\f\bvaluation\baccounts\bwhich\bar\f\br\fclassifi\fd\bas\baccru\fd Und\fr\bthis\bprovision,\bth\f\bcompany’s\b\fxc\fss\b\fquity\bcapacity\band \fxp\fns\fs\bby\bth\f\b\fquipm\fnt\bop\frations\bas\ba\br\fsult\bof\bth\fir\btrad\f\br\fc\fivabl\fs r\ftain\fd\b\farnings\bbalanc\f\bfr\f\f\bof\br\fstriction\bat\bOctob\fr\b31,\b2015 b\fing\bsold\bto\bfinancial\bs\frvic\fs. was\b$8,835\bmillion.\bAlt\frnativ\fly\bund\fr\bthis\bprovision,\bth\f

53 20. LONG-TERM BORROWING\b22. \fOMMITMENT\b AND \fONTINGEN\fIE\b

Long-t\frm\bborrowings\bat\bOctob\fr\b31\bconsist\fd\bof\bth\f\bfollowing Th\f\bcompany\bg\fn\frally\bd\ft\frmin\fs\bits\bwarranty\bliability\bby

in\bmillions\bof\bdollars: applying\bhistorical\bclaims\brat\f\b\fxp\fri\fnc\f\bto\bth\f\b\fstimat\fd

amount\bof\b\fquipm\fnt\bthat\bhas\bb\f\fn\bsold\band\bis\bstill\bund\fr

2015 2014 warranty\bbas\fd\bon\bd\fal\fr\binv\fntori\fs\band\br\ftail\bsal\fs.\bTh\f Equipment Operations historical\bclaims\brat\f\bis\bprimarily\bd\ft\frmin\fd\bby\ba\br\fvi\fw\bof\bfiv\f- Not\fs\band\bd\fb\fntur\fs: y\far\bclaims\bcosts\band\bcurr\fnt\bquality\bd\fv\flopm\fnts. 4.375%\bnot\fs\bdu\f\b2019.................................... $ 750 $ 750 Th\f\bpr\fmiums\bfor\bth\f\bcompany’s\b\fxt\fnd\fd\bwarranti\fs\bar\f 8-1/2%\bd\fb\fntur\fs\bdu\f\b2022 ............................ 105 105 primarily\br\fcogniz\fd\bin\bincom\f\bin\bproportion\bto\bth\f\bcosts 2.60%\bnot\fs\bdu\f\b2022..................................... 1,000 1,000 \fxp\fct\fd\bto\bb\f\bincurr\fd\bov\fr\bth\f\bcontract\bp\friod.\bTh\f 6.55%\bd\fb\fntur\fs\bdu\f\b2028.............................. 200 200

5.375%\bnot\fs\bdu\f\b2029 .................................... 500 500 unamortiz\fd\b\fxt\fnd\fd\bwarranty\bpr\fmiums\b(un\farn\fd\br\fv\fnu\f) 8.10%\bd\fb\fntur\fs\bdu\f\b2030 .............................. 250 250 includ\fd\bin\bth\f\bfollowing\btabl\f\btotal\fd\b$454\bmillion\band 7.125%\bnot\fs\bdu\f\b2031.................................... 300 300 $425\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly. 3.90%\bnot\fs\bdu\f\b2042..................................... 1,250 1,250 A\br\fconciliation\bof\bth\f\bchang\fs\bin\bth\f\bwarranty\bliability\band Oth\fr\bnot\fs................................................... 106 288 un\farn\fd\bpr\fmiums\bin\bmillions\bof\bdollars\bfollows: Total......................................................... 4,461 4,643

Warranty\bLiability/

Financial \bervices

Un\farn\fd\bPr\fmiums

Not\fs\band\bd\fb\fntur\fs:

M\fdium-t\frm\bnot\fs\bdu\f\b2016 – 2025: 2015 2014

(principal\b$17,610 – 2015,\b$17,939 – 2014) Beginning of year balance.............................. $1,234 $1,164

Av\frag\f\bint\fr\fst\brat\fs\bof\b1.4% – 2015,

Paym\fnts...................................................... (779) (792)

1.2% – 2014 ............................................... 17,857* 18,141*

Amortization\bof\bpr\fmiums\br\fc\fiv\fd ....................(161) (142)

2.75%\bs\fnior\bnot\f\bdu\f\b2022:\b($500\bprincipal)

Accruals\bfor\bwarranti\fs.................................... 810 797

Swapp\fd\b$500\bto\bvariabl\f\bint\fr\fst\brat\f

Pr\fmiums\br\fc\fiv\fd.......................................... 209 228

of\b1.1% – 2015,\b.9% – 2014 ........................... 512* 498*

For\fign\b\fxchang\f........................................... (52) (21)

Oth\fr\bnot\fs ................................................... 1,003 1,099

End of year balance ....................................... $ 1,261 $1,234

Total ......................................................... 19,372 19,738

Long-term borrowings** .................................... $ 23,833 $24,381

At\bOctob\fr\b31,\b2015,\bth\f\bcompany\bhad\bapproximat\fly * Includ\fs\bunamortiz\fd\bfair\bvalu\f\badjustm\fnts\br\flat\fd\bto\bint\fr\fst\brat\f\bswaps. $162\bmillion\bof\bguarant\f\fs\bissu\fd\bprimarily\bto\bbanks\boutsid\f\bth\f ** All\bint\fr\fst\brat\fs\bar\f\bas\bof\by\far\b\fnd. U.S.\br\flat\fd\bto\bthird-party\br\fc\fivabl\fs\bfor\bth\f\br\ftail\bfinancing\bof

John\bD\f\fr\f\b\fquipm\fnt.\bTh\f\bcompany\bmay\br\fcov\fr\ba\bportion\bof

Th\f\bapproximat\f\bprincipal\bamounts\bof\bth\f\b\fquipm\fnt

any\br\fquir\fd\bpaym\fnts\bincurr\fd\bund\fr\bth\fs\f\bagr\f\fm\fnts\bfrom

op\frations’\blong-t\frm\bborrowings\bmaturing\bin\b\fach\bof\bth\f\bn\fxt

r\fposs\fssion\bof\bth\f\b\fquipm\fnt\bcollat\fralizing\bth\f\br\fc\fivabl\fs.\bAt

fiv\f\by\fars\bin\bmillions\bof\bdollars\bar\f\bas\bfollows:\b2016 – $86,

Octob\fr\b31,\b2015,\bth\f\bcompany\bhad\baccru\fd\bloss\fs\bof

2017 – $48,\b2018 – $63,\b2019 – $752\band\b2020 – $2.\bTh\f

approximat\fly\b$4\bmillion\bund\fr\bth\fs\f\bagr\f\fm\fnts.\bTh\f\bmaximum

approximat\f\bprincipal\bamounts\bof\bth\f\bfinancial\bs\frvic\fs’\blong-

r\fmaining\bt\frm\bof\bth\f\br\fc\fivabl\fs\bguarant\f\fd\bat\bOctob\fr\b31,

t\frm\bborrowings\bmaturing\bin\b\fach\bof\bth\f\bn\fxt\bfiv\f\by\fars\bin

2015\bwas\bapproximat\fly\bfour\by\fars.

millions\bof\bdollars\bar\f\bas\bfollows:\b2016 – $5,159,\b2017 – $5,124,

2018 – $5,124,\b2019 – $2,876\band\b2020 – $2,394. At\bOctob\fr\b31,\b2015,\bth\f\bcompany\bhad\bcommitm\fnts\bof

approximat\fly\b$165\bmillion\bfor\bth\f\bconstruction\band\bacquisition

21. LEA\bE\b

of\bprop\frty\band\b\fquipm\fnt.\bAt\bOctob\fr\b31,\b2015,\bth\f\bcompany

At\bOctob\fr\b31,\b2015,\bfutur\f\bminimum\bl\fas\f\bpaym\fnts\bund\fr also\bhad\bpl\fdg\fd\bor\br\fstrict\fd\bass\fts\bof\b$99\bmillion,\bprimarily\bas

capital\bl\fas\fs\bamount\fd\bto\b$60\bmillion\bas\bfollows:\b2016 – $37, collat\fral\bfor\bborrowings\band\br\fstrict\fd\both\fr\bass\fts.\bIn\baddition,

2017 – $13,\b2018 – $4,\b2019 – $3,\b2020 – $2,\band\blat\fr\by\fars s\f\f\bNot\f\b13\bfor\br\fstrict\fd\bass\fts\bassociat\fd\bwith\bborrowings

$1.\bTotal\br\fntal\b\fxp\fns\f\bfor\bop\frating\bl\fas\fs\bwas\b$200\bmillion\bin r\flat\fd\bto\bs\fcuritizations.

2015,\b$205\bmillion\bin\b2014\band\b$237\bmillion\bin\b2013.\bAt

Th\f\bcompany\balso\bhad\both\fr\bmisc\fllan\fous\bconting\fnci\fs

Octob\fr\b31,\b2015,\bfutur\f\bminimum\bl\fas\f\bpaym\fnts\bund\fr

totaling\bapproximat\fly\b$30\bmillion\bat\bOctob\fr\b31,\b2015,\bfor

op\frating\bl\fas\fs\bamount\fd\bto\b$354\bmillion\bas\bfollows:\b2016 –

which\bit\bb\fli\fv\fs\bth\f\bprobability\bfor\bpaym\fnt\bis\bsubstantially

$98,\b2017 – $72,\b2018 – $53,\b2019 – $40,\b2020 – $31,\band\blat\fr

r\fmot\f.\bTh\f\baccru\fd\bliability\bfor\bth\fs\f\bconting\fnci\fs\bwas\bnot

y\fars\b$60.

mat\frial\bat\bOctob\fr\b31,\b2015.

Th\f\bcompany\bis\bsubj\fct\bto\bvarious\bunr\fsolv\fd\bl\fgal\bactions

which\baris\f\bin\bth\f\bnormal\bcours\f\bof\bits\bbusin\fss,\bth\f\bmost

pr\fval\fnt\bof\bwhich\br\flat\f\bto\bproduct\bliability\b(including\basb\fstos

r\flat\fd\bliability),\br\ftail\bcr\fdit,\b\fmploym\fnt, softwar\f\blic\fnsing,

pat\fnt,\btrad\fmark\band\b\fnvironm\fntal\bmatt\frs.\bTh\f\bcompany

b\fli\fv\fs\bth\f\br\fasonably\bpossibl\f\brang\f\bof\bloss\fs\bfor\bth\fs\f

unr\fsolv\fd\bl\fgal\bactions\bin\baddition\bto\bth\f\bamounts\baccru\fd

would\bnot\bhav\f\ba\bmat\frial\b\fff\fct\bon\bits\bfinancial\bstat\fm\fnts.

54 23. \fAPITAL \bTO\fK24. \bTO\fK OPTION AND RE\bTRI\fTED \bTO\fK AWARD\b

Chang\fs\bin\bth\f\bcommon\bstock\baccount\bin\bmillions\bw\fr\f\bas Th\f\bcompany\bissu\fs\bstock\boptions\band\br\fstrict\fd\bstock\bawards\bto

follows: k\fy\b\fmploy\f\fs\bund\fr\bplans\bapprov\fd\bby\bstockhold\frs.\bR\fstrict\fd

stock\bis\balso\bissu\fd\bto\bnon\fmploy\f\f\bdir\fctors\bfor\bth\fir\bs\frvic\fs

Numb\fr\bof as\bdir\fctors\bund\fr\ba\bplan\bapprov\fd\bby\bstockhold\frs.\bOptions\bar\f Shar\fs\bIssu\fd Amount award\fd\bwith\bth\f\b\fx\frcis\f\bpric\f\b\fqual\bto\bth\f\bmark\ft\bpric\f\band Balanc\f\bat\bOctob\fr\b31,\b2012...................536.4 $ 3,352 b\fcom\f\b\fx\frcisabl\f\bin\bon\f\bto\bthr\f\f\by\fars\baft\fr\bgrant.\bOptions Stock\boptions\band\both\fr ......................... 172 \fxpir\f\bt\fn\by\fars\baft\fr\bth\f\bdat\f\bof\bgrant.\bR\fstrict\fd\bstock\bawards

g\fn\frally\bv\fst\baft\fr\bthr\f\f\by\fars.\bTh\f\bcomp\fnsation\bcost\bfor\bstock

Balanc\f\bat\bOctob\fr\b31,\b2013...................536.4 3,524

Stock\boptions\band\both\fr ......................... 151

options,\bs\frvic\f\bbas\fd\br\fstrict\fd\bstock\bunits\band\bmark\ft/s\frvic\f

bas\fd\br\fstrict\fd\bstock\bunits,\bwhich\bis\bbas\fd\bon\bth\f\bfair\bvalu\f\bat

Balanc\f\bat\bOctob\fr\b31,\b2014...................536.4 3,675 th\f\bgrant\bdat\f,\bis\br\fcogniz\fd\bon\ba\bstraight-lin\f\bbasis\bov\fr\bth\f Stock\boptions\band\both\fr ......................... 151 r\fquisit\f\bp\friod\bth\f\b\fmploy\f\f\bis\br\fquir\fd\bto\br\fnd\fr\bs\frvic\f.\bTh\f Balance at October 31, 2015..................536.4 $ 3,826 comp\fnsation\bcost\bfor\bp\frformanc\f/s\frvic\f\bbas\fd\bunits,\bwhich\bis

bas\fd\bon\bth\f\bfair\bvalu\f\bat\bth\f\bgrant\bdat\f,\bis\br\fcogniz\fd\bov\fr\bth\f

Th\f\bnumb\fr\bof\bcommon\bshar\fs\bth\f\bcompany\bis\bauthoriz\fd \fmploy\f\fs’\br\fquisit\f\bs\frvic\f\bp\friod\band\bp\friodically\badjust\fd\bfor

to\bissu\f\bis\b1,200\bmillion.\bTh\f\bnumb\fr\bof\bauthoriz\fd\bpr\ff\frr\fd th\f\bprobabl\f\bnumb\fr\bof\bshar\fs\bto\bb\f\baward\fd.\bAccording\bto

shar\fs,\bnon\f\bof\bwhich\bhas\bb\f\fn\bissu\fd,\bis\bnin\f\bmillion. th\fs\f\bplans\bat\bOctob\fr\b31,\b2015,\bth\f\bcompany\bis\bauthoriz\fd\bto

Th\f\bBoard\bof\bDir\fctors\bat\bits\bm\f\fting\bin\bD\fc\fmb\fr\b2013 grant\ban\badditional\b16.9\bmillion\bshar\fs\br\flat\fd\bto\bstock\boptions

authoriz\fd\bth\f\br\fpurchas\f\bof\bup\bto\b$8,000\bmillion\bof\bcommon or\br\fstrict\fd\bstock.

stock\b(102.6\bmillion\bshar\fs\bbas\fd\bon\bth\f\bOctob\fr\b31,\b2015 Th\f\bfair\bvalu\f\bof\b\fach\boption\baward\bwas\b\fstimat\fd\bon\bth\f

closing\bcommon\bstock\bpric\f\bof\b$78.00\bp\fr\bshar\f).\bAt\bOctob\fr\b31, dat\f\bof\bgrant\busing\ba\bbinomial\blattic\f\boption\bvaluation\bmod\fl.

2015,\bthis\br\fpurchas\f\bprogram\bhad\b$3,461\bmillion\b(44.4\bmillion Exp\fct\fd\bvolatiliti\fs\bar\f\bbas\fd\bon\bimpli\fd\bvolatiliti\fs\bfrom\btrad\fd

shar\fs\bat\bth\f\bsam\f\bpric\f)\br\fmaining\bto\bb\f\br\fpurchas\fd. call\boptions\bon\bth\f\bcompany’s\bstock.\bTh\f\b\fxp\fct\fd\bvolatiliti\fs\bar\f

R\fpurchas\fs\bof\bth\f\bcompany’s\bcommon\bstock\bund\fr\bthis\bplan construct\fd\bfrom\bth\f\bfollowing\bthr\f\f\bcompon\fnts:\bth\f\bstarting

will\bb\f\bmad\f\bfrom\btim\f\bto\btim\f,\bat\bth\f\bcompany’s\bdiscr\ftion,\bin impli\fd\bvolatility\bof\bshort-t\frm\bcall\boptions\btrad\fd\bwithin\ba\bf\fw

th\f\bop\fn\bmark\ft. days\bof\bth\f\bvaluation\bdat\f;\bth\f\bpr\fdict\fd\bimpli\fd\bvolatility\bof

A\br\fconciliation\bof\bbasic\band\bdilut\fd\bn\ft\bincom\f\bp\fr\bshar\f long-t\frm\bcall\boptions;\band\bth\f\btr\fnd\bin\bimpli\fd\bvolatiliti\fs\bov\fr

attributabl\f\bto\bD\f\fr\f\b&\bCompany\bfollows\bin\bmillions,\b\fxc\fpt\bp\fr th\f\bspan\bof\bth\f\bcall\boptions’\btim\f\bto\bmaturity.\bTh\f\bcompany\bus\fs

shar\f\bamounts: historical\bdata\bto\b\fstimat\f\boption\b\fx\frcis\f\bb\fhavior\band

\fmploy\f\f\bt\frmination\bwithin\bth\f\bvaluation\bmod\fl.\bTh\f\b\fxp\fct\fd

2015 2014 2013 t\frm\bof\boptions\bgrant\fd\bis\bd\friv\fd\bfrom\bth\f\boutput\bof\bth\f\boption N\ft\bincom\f\battributabl\f\bto valuation\bmod\fl\band\br\fpr\fs\fnts\bth\f\bp\friod\bof\btim\f\bthat\boptions D\f\fr\f\b&\bCompany.............................. $ 1,940.0 $3,161.7 $3,537.3 grant\fd\bar\f\b\fxp\fct\fd\bto\bb\f\boutstanding.\bTh\f\brisk-fr\f\f\brat\fs L\fss\bincom\f\ballocabl\f\bto\bparticipating utiliz\fd\bfor\bp\friods\bthroughout\bth\f\bcontractual\blif\f\bof\bth\f s\fcuriti\fs......................................... .8 1.0 .9 options\bar\f\bbas\fd\bon\bU.S.\bTr\fasury\bs\fcurity\byi\flds\bat\bth\f\btim\f\bof Incom\f\ballocabl\f\bto\bcommon\bstock ........... $1,939.2 $3,160.7 $3,536.4 grant.

Av\frag\f\bshar\fs\boutstanding ....................333.6 363.0 385.3 Th\f\bassumptions\bus\fd\bfor\bth\f\bbinomial\blattic\f\bmod\fl\bto

d\ft\frmin\f\bth\f\bfair\bvalu\f\bof\boptions\bfollow:

Basic per share .................................... $ 5.81 $ 8.71 $ 9.18

2015 2014 2013

Av\frag\f\bshar\fs\boutstanding ....................333.6 363.0 385.3

Eff\fct\bof\bdilutiv\f\bstock\boptions ................ 2.4 3.1 3.9

Risk-fr\f\f\bint\fr\fst\brat\f.......04% – 2.3% .03% – 2.9% .04% – 1.7%

Exp\fct\fd\bdivid\fnds .........2.5% 2.3% 2.3%

Total\bpot\fntial\bshar\fs\boutstanding ........336.0 366.1 389.2

Exp\fct\fd\bvolatility...........23.4% – 25.7% 25.9% – 32.0% 26.6% – 32.5%

Diluted per share ................................. $ 5.77 $ 8.63 $ 9.09

W\fight\fd-av\frag\f

volatility .................... 25.6% 31.9% 32.4%

Exp\fct\fd\bt\frm\b(in\by\fars) . . . 7.2 – 8.2 7.3 – 7.4 7.3 – 7.9

All\bstock\boptions\boutstanding\bw\fr\f\binclud\fd\bin\bth\f

computation\bduring\b2015,\b2014\band\b2013,\b\fxc\fpt\b2.4\bmillion\bin

2014\band\b2.4\bmillion\bin\b2013\bthat\bhad\ban\bantidilutiv\f\b\fff\fct

und\fr\bth\f\btr\fasury\bstock\bm\fthod.

55 Stock\boption\bactivity\bat\bOctob\fr\b31,\b2015\band\bchang\fsTh\f\bcompany’s\bnonv\fst\fd\br\fstrict\fd\bshar\fs\bat\bOctob\fr\b31,

during\b2015\bin\bmillions\bof\bdollars\band\bshar\fs\bfollow: 2015\band\bchang\fs\bduring\b2015\bin\bmillions\bof\bshar\fs\bfollow:

R\fmaining Grant-Dat\f

Contractual Aggr\fgat\f Shar\fs Fair\bValu\f*

Ex\frcis\f T\frm Intrinsic \bervice based only

Shar\fs Pric\f* (Y\fars) Valu\f

Nonv\fst\fd\bat\bb\fginning\bof\by\far............... .3 $83.00

Outstanding at beginning Grant\fd.............................................. .1 88.66

of year ............................. 14.9 $71.64

V\fst\fd................................................ (.1) 76.37

Grant\fd ................................ 3.0 88.19

Nonv\fst\fd\bat\b\fnd\bof\by\far....................... .3 87.58

Ex\frcis\fd .............................. (2.9) 58.65

Expir\fd\bor\bforf\fit\fd .................(.2) 87.44

Performance/service and

Outstanding at end of year .....14.8 77.39 6.21 $ 94.5

market/service based

Nonv\fst\fd\bat\bb\fginning\bof\by\far ............... .4 $91.30

Exercisable at end of year ...... 9.372.78 5.19 84.8

Grant\fd.............................................. .1 97.88

* W\fight\fd-av\frag\fs Expir\fd\bor\bforf\fit\fd............................... (.1) 93.31 Th\f\bw\fight\fd-av\frag\f\bgrant-dat\f\bfair\bvalu\fs\bof\boptions Nonv\fst\fd\bat\b\fnd\bof\by\far....................... .4 96.87 grant\fd\bduring\b2015,\b2014\band\b2013\bw\fr\f\b$19.67,\b$24.74\band * W\fight\fd-av\frag\fs $23.73,\br\fsp\fctiv\fly.\bTh\f\btotal\bintrinsic\bvalu\fs\bof\boptions

\fx\frcis\fd\bduring\b2015,\b2014\band\b2013\bw\fr\f\b$98\bmillion,

During\b2015,\b2014\band\b2013,\bth\f\btotal\bshar\f-bas\fd

$125\bmillion\band\b$183\bmillion,\br\fsp\fctiv\fly.\bDuring\b2015,\b2014 comp\fnsation\b\fxp\fns\f\bwas\b$66\bmillion,\b$79\bmillion\band

and\b2013,\bcash\br\fc\fiv\fd\bfrom\bstock\boption\b\fx\frcis\fs\bwas $81\bmillion,\br\fsp\fctiv\fly,\bwith\br\fcogniz\fd\bincom\f\btax\bb\fn\ffits\bof

$172\bmillion,\b$149\bmillion\band\b$175\bmillion\bwith\btax\bb\fn\ffits\bof $25\bmillion,\b$29\bmillion\band\b$30\bmillion,\br\fsp\fctiv\fly.\bAt

$36\bmillion,\b$46\bmillion\band\b$68\bmillion,\br\fsp\fctiv\fly. Octob\fr\b31,\b2015,\bth\fr\f\bwas\b$46\bmillion\bof\btotal\bunr\fcogniz\fd

Th\f\bcompany\bgrant\fd\b248\bthousand,\b236\bthousand\band comp\fnsation\bcost\bfrom\bshar\f-bas\fd\bcomp\fnsation

254\bthousand\br\fstrict\fd\bstock\bunits\bto\b\fmploy\f\fs\band arrang\fm\fnts\bgrant\fd\bund\fr\bth\f\bplans,\bwhich\bis\br\flat\fd\bto

non\fmploy\f\f\bdir\fctors\bin\b2015,\b2014\band\b2013,\bof\bwhich nonv\fst\fd\bshar\fs.\bThis\bcomp\fnsation\bis\b\fxp\fct\fd\bto\bb\f

122\bthousand,\b102\bthousand\band\b110\bthousand\bar\f\bsubj\fct\bto r\fcogniz\fd\bov\fr\ba\bw\fight\fd-av\frag\f\bp\friod\bof\bapproximat\fly

s\frvic\f\bbas\fd\bonly\bconditions,\b63\bthousand,\b67\bthousand\band two\by\fars.\bTh\f\btotal\bgrant-dat\f\bfair\bvalu\fs\bof\bstock\boptions\band

72\bthousand\bar\f\bsubj\fct\bto\bp\frformanc\f/s\frvic\f\bbas\fd r\fstrict\fd\bshar\fs\bv\fst\fd\bduring\b2015,\b2014\band\b2013\bw\fr\f

conditions,\b63\bthousand,\b67\bthousand\band\b72\bthousand\bar\f $74\bmillion,\b$69\bmillion\band\b$68\bmillion,\br\fsp\fctiv\fly.

subj\fct\bto\bmark\ft/s\frvic\f\bbas\fd\bconditions,\br\fsp\fctiv\fly.\bTh\f Th\f\bcompany\bcurr\fntly\bus\fs\bshar\fs\bthat\bhav\f\bb\f\fn

s\frvic\f\bbas\fd\bonly\bunits\baward\bon\f\bshar\f\bof\bcommon\bstock\bfor r\fpurchas\fd\bthrough\bits\bstock\br\fpurchas\f\bprograms\bto\bsatisfy

\fach\bunit\bat\bth\f\b\fnd\bof\bth\f\bv\fsting\bp\friod\band\binclud\f\bdivid\fnd shar\f\boption\b\fx\frcis\fs.\bAt\bOctob\fr\b31,\b2015,\bth\f\bcompany\bhad

\fquival\fnt\bpaym\fnts. 220\bmillion\bshar\fs\bin\btr\fasury\bstock\band\b44\bmillion\bshar\fs

Th\f\bp\frformanc\f/s\frvic\f\bbas\fd\bunits\bar\f\bsubj\fct\bto\ba r\fmaining\bto\bb\f\br\fpurchas\fd\bund\fr\bits\bcurr\fnt\bpublicly

p\frformanc\f\bm\ftric\bbas\fd\bon\bth\f\bcompany’s\bcompound\bannual announc\fd\br\fpurchas\f\bprogram\b(s\f\f\bNot\f\b23).

r\fv\fnu\f\bgrowth\brat\f,\bcompar\fd\bto\ba\bb\fnchmark\bgroup\bof 25. OTHER \fOMPREHEN\bIVE IN\fOME ITEM\b

compani\fs\bov\fr\bth\f\bv\fsting\bp\friod.\bTh\f\bmark\ft/s\frvic\f\bbas\fd

Th\f\baft\fr-tax\bchang\fs\bin\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f

units\bar\f\bsubj\fct\bto\ba\bmark\ft\br\flat\fd\bm\ftric\bbas\fd\bon\btotal

incom\f\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollow:

shar\fhold\fr\br\fturn,\bcompar\fd\bto\bth\f\bsam\f\bb\fnchmark\bgroup\bof

compani\fs\bov\fr\bth\f\bv\fsting\bp\friod.\bTh\f\bp\frformanc\f/s\frvic\f

Total bas\fd\bunits\band\bth\f\bmark\ft/s\frvic\f\bbas\fd\bunits\bboth\baward Unr\faliz\fd Unr\faliz\fd Accumulat\fd common\bstock\bin\ba\brang\f\bof\bz\fro\bto\b200\bp\frc\fnt\bfor\b\fach\bunit R\ftir\fm\fnt Cumulativ\f Gain\b(Loss) Gain\b(Loss) Oth\fr

B\fn\ffits Translation on on Compr\fh\fnsiv\f

grant\fd\bbas\fd\bon\bth\f\bl\fv\fl\bof\bth\f\bm\ftric\bachi\fv\fd\band\bdo\bnot Adjustm\fnt Adjustm\fnt D\frivativ\fs Inv\fstm\fnts Incom\f\b(Loss) includ\f\bdivid\fnd\b\fquival\fnt\bpaym\fnts\bov\fr\bth\f\bv\fsting\bp\friod. 2012 ........... $ (4,759) $ 184 $ (14) $ 17 $(4,572) Th\f\bw\fight\fd-av\frag\f\bfair\bvalu\fs\bof\bth\f\bs\frvic\f\bbas\fd\bonly\bunits P\friod at\bth\f\bgrant\bdat\fs\bduring\b2015,\b2014\band\b2013\bw\fr\f\b$88.66, Chang\f........ 1,950 (71) 11 (11) 1,879 $87.16\band\b$86.88\bp\fr\bunit,\br\fsp\fctiv\fly,\bbas\fd\bon\bth\f\bmark\ft 2013........... (2,809) 113 (3) 6 (2,693) pric\f\bof\ba\bshar\f\bof\bund\frlying\bcommon\bstock.\bTh\f\bfair\bvalu\f\bof P\friod th\f\bp\frformanc\f/s\frvic\f\bbas\fd\bunits\bat\bth\f\bgrant\bdat\f Chang\f........ (684) (416) 3 7 (1,090) during\b2015,\b2014\band\b2013\bw\fr\f\b$81.78,\b$81.53\band\b$80.73 2014........... (3,493) (303) 13 (3,783) p\fr\bunit,\br\fsp\fctiv\fly,\bbas\fd\bon\bth\f\bmark\ft\bpric\f\bof\ba\bshar\f\bof P\friod und\frlying\bcommon\bstock\b\fxcluding\bdivid\fnds.\bTh\f\bfair\bvalu\f\bof Chang\f........ (8) (935) (2) (1) (946) th\f\bmark\ft/s\frvic\f\bbas\fd\bunits\bat\bth\f\bgrant\bdat\f\bduring\b2015, 2015........... $ (3,501) $(1,238) $ (2) $ 12 $(4,729) 2014\band\b2013\bw\fr\f\b$113.97,\b$116.86\band\b$106.75\bp\fr\bunit,

r\fsp\fctiv\fly,\bbas\fd\bon\ba\blattic\f\bvaluation\bmod\fl\b\fxcluding

divid\fnds.

56 Following\bar\f\bamounts\br\fcord\fd\bin\band\br\fclassifications B\ffor\f Tax Aft\fr out\bof\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss),\band\bth\f\bincom\f\btax Tax (Exp\fns\f) Tax \fff\fcts,\bin\bmillions\bof\bdollars: Amount Cr\fdit Amount

2014 B\ffor\f Tax Aft\fr Cumulativ\f\btranslation\badjustm\fnt: Tax (Exp\fns\f) Tax Unr\faliz\fd\b(loss)\bon\btranslation Amount Cr\fdit Amount adjustm\fnt..................\a..................\a.. $(427) $ 2 $ (425)

2015 R\fclassification\bof\bloss

Cumulativ\f\btranslation\badjustm\fnt ................ $(938) $ 3 $(935)

to\bOth\fr\bop\frating\b\fxp\fns\fs*............. 9 9

Unr\faliz\fd\bgain\b(loss)\bon\bd\frivativ\fs: N\ft\bunr\faliz\fd\b(loss)\bon\btranslation

Unr\faliz\fd\bh\fdging\b(loss) ..................\a...... (12) 4 (8)

adjustm\fnt..................\a..................\a..(418) 2 (416)

R\fclassification\bof\br\faliz\fd\b(gain)\bloss\bto:

Unr\faliz\fd\bgain\b(loss)\bon\bd\frivativ\fs:

Int\fr\fst\brat\f\bcontracts – Int\fr\fst\b\fxp\fns\f 12 (4) 8

Unr\faliz\fd\bh\fdging\b(loss)..................\a..... (14) 5 (9)

For\fign\b\fxchang\f\bcontracts –

R\fclassification\bof\br\faliz\fd\b(gain)\bloss\bto:

Oth\fr\bop\frating\b\fxp\fns\fs ................. (4) 2 (2)

Int\fr\fst\b rat\f\b contracts – Int\fr\fst\b \fxp\fns\f . . . 13 (5) 8

N\ft\bunr\faliz\fd\b(loss)\bon\bd\frivativ\fs ............ (4) 2 (2)

For\fign\b\fxchang\f\bcontracts –

Oth\fr\bop\frating\b\fxp\fns\fs ................ 6 (2) 4

Unr\faliz\fd\bgain\b(loss)\bon\binv\fstm\fnts:

Unr\faliz\fd\bholding\bgain ..................\a........ 12 (4) 8

N\ft\bunr\faliz\fd\bgain\bon\bd\frivativ\fs............ 5 (2) 3

R\fclassification\bof\br\faliz\fd\b(gain)\bloss –

Unr\faliz\fd\bgain\b(loss)\bon\binv\fstm\fnts:

Oth\fr\bincom\f ..................\a..................\a (14) 5 (9)

Unr\faliz\fd\bholding\bgain..................\a....... 10 (3) 7

N\ft\bunr\faliz\fd\b(loss)\bon\binv\fstm\fnts .......... (2) 1 (1)

N\ft\bunr\faliz\fd\bgain\bon\binv\fstm\fnts.......... 10 (3) 7

R\ftir\fm\fnt\bb\fn\ffits\badjustm\fnt:

P\fnsions

N\ft\bactuarial\b(loss)\band\bprior

N\ft\bactuarial\b(loss)..................\a.......... (940) 343 (597)

s\frvic\f (cost) ..................\a................ (427) 151 (276)

R\fclassification\bthrough\bamortization\bof

actuarial\b(gain)\bloss\band\bprior\bs\frvic\f

(cr\fdit)\bcost\bto\bn\ft\bincom\f:**

(cr\fdit)\bcost\bto\bn\ft\bincom\f:*

Actuarial\bloss..................\a........... 177 (64) 113

Actuarial\bloss ..................\a............ 223 (81) 142

Prior\bs\frvic\f\bcost..................\a...... 25 (9) 16

Prior\bs\frvic\f\bcost ..................\a....... 25 (9) 16

S\fttl\fm\fnts/curtailm\fnts\a............. 9 (3) 6

S\fttl\fm\fnts/curtailm\fnts .............. 11 (4) 7

H\falth\bcar\f\band\blif\f\binsuranc\f

N\ft\bactuarial\b(loss)\band\bprior

N\ft\bactuarial\bgain\band\bprior

s\frvic\f\bcr\fdit..................\a.............. (378) 138 (240)

s\frvic\f cr\fdit ..................\a............... 145 (52) 93

R\fclassification\bthrough\bamortization\bof

actuarial\b(gain)\bloss\band\bprior

actuarial\b(gain)\bloss\band\bprior\bs\frvic\f

s\frvic\f\b(cr\fdit)\bcost\bto\bn\ft\bincom\f:**

(cr\fdit)\bcost\bto\bn\ft\bincom\f:*

Actuarial\bloss..................\a........... 33 (12) 21

Actuarial\bloss ..................\a............ 91 (34) 57

Prior\bs\frvic\f\b(cr\fdit)..................\a.. (3) 1 (2)

Prior\bs\frvic\f\b(cr\fdit) ..................\a... (77) 29 (48)

S\fttl\fm\fnts/curtailm\fnts\a............. (1) (1)

S\fttl\fm\fnts/curtailm\fnts .............. 1 1

N\ft\bunr\faliz\fd\b(loss)\bon\br\ftir\fm\fnt

b\fn\ffits\badjustm\fnt..................\a........ (1,078) 394 (684)

b\fn\ffits\badjustm\fnt ..................\a.......... (8) (8)

Total\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss) ....... $(1,481) $ 391 $(1,090)

Total\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss) ....... $(952) $ 6 $(946)

* R\fpr\fs\fnts\bth\f\baccumulat\fd\btranslation\badjustm\fnts\br\flat\fd\bto\bth\f\bfor\fign

* Th\fs\f\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\bamounts\bar\f\binclud\fd\bin\bn\ft

subsidiari\fs\bof\bth\f\bWat\fr\bop\frations\bthat\bw\fr\f\bsold\b(s\f\f\bNot\f\b4).

p\friodic\bpostr\ftir\fm\fnt\bcosts.\bS\f\f\bNot\f\b7\bfor\badditional\bd\ftail.

** Th\fs\f\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\bamounts\bar\f\binclud\fd\bin\bn\ft

p\friodic\bpostr\ftir\fm\fnt\bcosts.\bS\f\f\bNot\f\b7\bfor\badditional\bd\ftail.

57 26. FAIR VALUE MEA\bUREMENT\b B\ffor\f Tax Aft\fr Th\f\bfair\bvalu\fs\bof\bfinancial\binstrum\fnts\bthat\bdo\bnot\bapproximat\f Tax (Exp\fns\f) Tax

th\f\bcarrying\bvalu\fs\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollow: Amount Cr\fdit Amount

2013 20152014 Cumulativ\f\btranslation\badjustm\fnt ............... $ (74) $ 3 $ (71) Carrying Fair Carrying Fair Unr\faliz\fd\bgain\b(loss)\bon\bd\frivativ\fs: Valu\f Valu\f* Valu\f Valu\f* Unr\faliz\fd\bh\fdging\bgain..................\a....... 43 (14) 29

R\fclassification\bof\br\faliz\fd\b(gain)\bloss\bto: Financing\br\fc\fivabl\fs – n\ft.......... $24,809 $ 24,719 $ 27,422 $ 27,337

Int\fr\fst\b rat\f\b contracts – Int\fr\fst\b \fxp\fns\f . . . 22 (8) 14 Financing\br\fc\fivabl\fs

For\fign\b\fxchang\f\bcontracts –

s\fcuritiz\fd – n\ft..................\a... $ 4,835 $ 4,820 $ 4,602 $ 4,573

Oth\fr\bop\frating\b\fxp\fns\fs ................ (49) 17 (32)

Short-t\frm\bs\fcuritization

N\ft\bunr\faliz\fd\bgain\bon\bd\frivativ\fs ............ 16 (5) 11

borrowings..................\a.......... $ 4,590 $ 4,590 $ 4,559 $ 4,562

Unr\faliz\fd\bgain\b(loss)\bon\binv\fstm\fnts:

Long-t\frm\bborrowings\bdu\f\bwithin

Unr\faliz\fd\bholding\b(loss) ..................\a...... (17) 6 (11)

on\f\by\far:

N\ft\bunr\faliz\fd\b(loss)\bon\binv\fstm\fnts ......... (17) 6 (11)

Equipm\fnt\bop\frations.......... $ 86 $ 78 $ 243 $ 233

R\ftir\fm\fnt\bb\fn\ffits\badjustm\fnt: Financial\bs\frvic\fs................5,167 5,167 4,730 4,743

P\fnsions Total..................\a........... $ 5,253 $ 5,245 $ 4,973 $ 4,976

N\ft\bactuarial\bgain\band\bprior

s\frvic\f\bcr\fdit ..................\a.............. 1,507 (552) 955

Long-t\frm\bborrowings:

R\fclassification\bthrough\bamortization\bof Equipm\fnt\bop\frations.......... $4,461 $ 4,835 $ 4,643 $ 5,095

actuarial\b(gain)\bloss\band\bprior\bs\frvic\f Financial\bs\frvic\fs................19,372 19,348 19,738 19,886

(cr\fdit)\bcost\bto\bn\ft\bincom\f:* Total..................\a........... $ 23,833 $ 24,183 $ 24,381 $ 24,981

Actuarial\bloss ..................\a........... 265 (101) 164

* Fair\bvalu\f\bm\fasur\fm\fnts\babov\f\bw\fr\f\bL\fv\fl\b3\bfor\ball\bfinancing\br\fc\fivabl\fs\band Prior\bs\frvic\f\bcost..................\a...... 12 (6) 6 L\fv\fl\b2\bfor\ball\bborrowings. S\fttl\fm\fnts/curtailm\fnts\a ............. 2 2 H\falth\bcar\f\band\blif\f\binsuranc\f Fair\bvalu\fs\bof\bth\f\bfinancing\br\fc\fivabl\fs\bthat\bw\fr\f\bissu\fd N\ft\bactuarial\bgain\band\bprior long-t\frm\bw\fr\f\bbas\fd\bon\bth\f\bdiscount\fd\bvalu\fs\bof\bth\fir\br\flat\fd s\frvic\f\bcr\fdit..................\a.............. 1,167 (426) 741 cash\bflows\bat\bint\fr\fst\brat\fs\bcurr\fntly\bb\fing\boff\fr\fd\bby\bth\f R\fclassification\bthrough\bamortization\bof

actuarial\b(gain)\bloss\band\bprior\bs\frvic\f

company\bfor\bsimilar\bfinancing\br\fc\fivabl\fs.\bTh\f\bfair\bvalu\fs\bof\bth\f (cr\fdit)\bcost\bto\bn\ft\bincom\f:* r\fmaining\bfinancing\br\fc\fivabl\fs\bapproximat\fd\bth\f\bcarrying Actuarial\bloss ..................\a........... 141 (54) 87 amounts. Prior\bs\frvic\f\b(cr\fdit) ..................\a.. (8) 3 (5) Fair\bvalu\fs\bof\blong-t\frm\bborrowings\band\bshort-t\frm N\ft\bunr\faliz\fd\bgain\bon\br\ftir\fm\fnt s\fcuritization\bborrowings\bw\fr\f\bbas\fd\bon\bcurr\fnt\bmark\ft\bquot\fs b\fn\ffits\badjustm\fnt..................\a......... 3,086 (1,136) 1,950 for\bid\fntical\bor\bsimilar\bborrowings\band\bcr\fdit\brisk,\bor\bon\bth\f Total\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss) ....... $3,011 $(1,132) $ 1,879 discount\fd\bvalu\fs\bof\bth\fir\br\flat\fd\bcash\bflows\bat\bcurr\fnt\bmark\ft

int\fr\fst\brat\fs.\bC\frtain\blong-t\frm\bborrowings\bhav\f\bb\f\fn\bswapp\fd

* Th\fs\f\baccumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\bamounts\bar\f\binclud\fd\bin\bn\ft

p\friodic\bpostr\ftir\fm\fnt\bcosts.\bS\f\f\bNot\f\b7\bfor\badditional\bd\ftail.

to\bcurr\fnt\bvariabl\f\bint\fr\fst\brat\fs.\bTh\f\bcarrying\bvalu\fs\bof\bth\fs\f

long-t\frm\bborrowings\binclud\fd\badjustm\fnts\br\flat\fd\bto\bfair\bvalu\f

Th\f\bnoncontrolling\bint\fr\fsts’\bcompr\fh\fnsiv\f\bincom\f\bwas h\fdg\fs.

$.5\bmillion\bin\b2015,\b$1.3\bmillion\bin\b2014\band\b$.4\bmillion\bin\b2013,

which\bconsist\fd\bof\bn\ft\bincom\f\bof\b$.9\bmillion\bin\b2015,

$1.6\bmillion\bin\b2014\band\b$.3\bmillion\bin\b2013\band\bcumulativ\f

translation\badjustm\fnts\bof\b$(.4)\bmillion\bin\b2015,\b$(.3)\bmillion\bin

2014\band\b$.1\bmillion\bin\b2013.

58 Ass\fts\band\bliabiliti\fs\bm\fasur\fd\bat\bOctob\fr\b31\bat\bfair\bvalu\f Fair\bvalu\f,\bnonr\fcurring,\bL\fv\fl\b3\bm\fasur\fm\fnts\bfrom

on\ba\br\fcurring\bbasis\bin\bmillions\bof\bdollars\bfollow: impairm\fnts\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollow:

2015* 2014*Fair\bValu\f* Loss\fs*

Mark\ftabl\f\bs\fcuriti\fs 2015 2014 2015 2014 2013

Equity\bfund ................................................ $ 43 $ 45

Equipm\fnt\bon\bop\frating

Fix\fd\bincom\f\bfund ....................................... 10

l\fas\fs – n\ft ....................... $ 479 $ 10

U.S.\bgov\frnm\fnt\bd\fbt\bs\fcuriti\fs ..................... 82 808

Prop\frty\band\b\fquipm\fnt – n\ft $ 33 $ 53 $ 10 $ 44 $ 48

Municipal\bd\fbt\bs\fcuriti\fs .............................. 31 34

Corporat\f\bd\fbt\bs\fcuriti\fs .............................. 124 172

Oth\fr\bintangibl\f\bass\fts – n\ft . . . $ 9

Int\frnational\bd\fbt\bs\fcuriti\fs .......................... 47

Mortgag\f-back\fd\bs\fcuriti\fs** ........................ 110 146

Oth\fr\bass\fts......................... $ 112 $ 15 $ 15 $ 16

Total\bmark\ftabl\f\bs\fcuriti\fs ............................... 437 1,215

Ass\fts\bh\fld\bfor\bsal\f –

Oth\fr\bass\fts Wat\fr\bop\frations............... $ 36

D\frivativ\fs:

* S\f\f\bfinancing\br\fc\fivabl\fs\bwith\bsp\fcific\ballowanc\fs\bin\bNot\f\b12\bthat\bw\fr\f\bnot Int\fr\fst\brat\f\bcontracts .................................. 353 319 significant.\bS\f\f\bNot\f\b5\bfor\bimpairm\fnts. For\fign\b\fxchang\f\bcontracts ........................... 50 18

Cross-curr\fncy\bint\fr\fst\brat\f\bcontracts .............. 25 16

L\fv\fl\b1\bm\fasur\fm\fnts\bconsist\bof\bquot\fd\bpric\fs\bin\bactiv\f Total\bass\fts***.................................................. $ 865 $ 1,568 mark\fts\bfor\bid\fntical\bass\fts\bor\bliabiliti\fs.\bL\fv\fl\b2\bm\fasur\fm\fnts

includ\f\bsignificant\both\fr\bobs\frvabl\f\binputs\bsuch\bas\bquot\fd

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs pric\fs\bfor\bsimilar\bass\fts\bor\bliabiliti\fs\bin\bactiv\f\bmark\fts;\bid\fntical D\frivativ\fs: ass\fts\bor\bliabiliti\fs\bin\binactiv\f\bmark\fts;\bobs\frvabl\f\binputs\bsuch\bas Int\fr\fst\brat\f\bcontracts.................................. $ 60 $ 81

For\fign\b\fxchang\f\bcontracts ........................... 18 29

int\fr\fst\brat\fs\band\byi\fld\bcurv\fs;\band\both\fr\bmark\ft-corroborat\fd

inputs.\bL\fv\fl\b3\bm\fasur\fm\fnts\binclud\f\bsignificant\bunobs\frvabl\f

Total\bliabiliti\fs................................................... $ 78 $ 110 inputs. * All\bm\fasur\fm\fnts\babov\f\bw\fr\f\bL\fv\fl\b2\bm\fasur\fm\fnts\b\fxc\fpt\bfor\bL\fv\fl\b1 Fair\bvalu\f\bis\bd\ffin\fd\bas\bth\f\bpric\f\bthat\bwould\bb\f\br\fc\fiv\fd\bto m\fasur\fm\fnts\bof\bU.S.\bgov\frnm\fnt\bd\fbt\bs\fcuriti\fs\bof\b$37\bmillion\band

$741\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014,\br\fsp\fctiv\fly,\band\bth\f\b\fquity

s\fll\ban\bass\ft\bor\bpaid\bto\btransf\fr\ba\bliability\bin\ban\bord\frly fund\bof\b$43\bmillion\band\b$45\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014, transaction\bb\ftw\f\fn\bmark\ft\bparticipants\bat\bth\f\bm\fasur\fm\fnt r\fsp\fctiv\fly,\band\bth\f\bfix\fd\bincom\f\bfund\bof\b$10\bmillion\bat\bOctob\fr\b31,\b2014. dat\f.\bIn\bd\ft\frmining\bfair\bvalu\f,\bth\f\bcompany\bus\fs\bvarious In\baddition,\b$29\bmillion\bof\bth\f\bint\frnational\bd\fbt\bs\fcuriti\fs\bw\fr\f\bL\fv\fl\b3 m\fthods\bincluding\bmark\ft\band\bincom\f\bapproach\fs.\bTh\f m\fasur\fm\fnts\bat\bOctob\fr\b31,\b2015.\bTh\fr\f\bw\fr\f\bno\btransf\frs\bb\ftw\f\fn

L\fv\fl\b1\band\bL\fv\fl\b2\bduring\b2015\band\b2014. company\butiliz\fs\bvaluation\bmod\fls\band\bt\fchniqu\fs\bthat\bmaximiz\f ** Primarily\bissu\fd\bby\bU.S.\bgov\frnm\fnt\bsponsor\fd\b\fnt\frpris\fs. th\f\bus\f\bof\bobs\frvabl\f\binputs.\bTh\f\bmod\fls\bar\f\bindustry-standard *** Exclud\fd\bfrom\bthis\btabl\f\bw\fr\f\bcash\b\fquival\fnts,\bwhich\bw\fr\f\bcarri\fd\bat\bcost mod\fls\bthat\bconsid\fr\bvarious\bassumptions\bincluding\btim\f\bvalu\fs that\bapproximat\fs\bfair\bvalu\f.\bTh\f\bcash\b\fquival\fnts\bconsist\bprimarily\bof and\byi\fld\bcurv\fs\bas\bw\fll\bas\both\fr\b\fconomic\bm\fasur\fs.\bTh\fs\f mon\fy\bmark\ft\bfunds\bthat\bw\fr\f\bL\fv\fl\b1\bm\fasur\fm\fnts. valuation\bt\fchniqu\fs\bar\f\bconsist\fntly\bappli\fd.

Fair\bvalu\f,\br\fcurring,\bL\fv\fl\b3\bm\fasur\fm\fnts\bfrom\bavailabl\f Th\f\bfollowing\bis\ba\bd\fscription\bof\bth\f\bvaluation

for\bsal\f\bmark\ftabl\f\bs\fcuriti\fs\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars m\fthodologi\fs\bth\f\bcompany\bus\fs\bto\bm\fasur\f\bc\frtain\bfinancial

follow: instrum\fnts\bon\bth\f\bbalanc\f\bsh\f\ft\band\bnonmon\ftary\bass\fts\bat

fair\bvalu\f:

2015

Marketa\ble Securities– Th\f\bportfolio\bof\binv\fstm\fnts, B\fginning\bof\bp\friod\bbalanc\f .............................................. \fxc\fpt\bfor\bth\f\bL\fv\fl\b3\bm\fasur\fm\fnt\bint\frnational\bd\fbt Purchas\fs...................................................................... $ 30

Chang\f\bin\bunr\faliz\fd\bgain\b(loss) ......................................... (1)

s\fcuriti\fs,\bis\bprimarily\bvalu\fd\bon\ba\bmark\ft\bapproach\b(matrix

pricing\bmod\fl)\bin\bwhich\ball\bsignificant\binputs\bar\f\bobs\frvabl\f\bor

End\bof\bp\friod\bbalanc\f...................................................... $ 29 can\bb\f\bd\friv\fd\bfrom\bor\bcorroborat\fd\bby\bobs\frvabl\f\bmark\ft\bdata

such\bas\bint\fr\fst\brat\fs,\byi\fld\bcurv\fs,\bvolatiliti\fs,\bcr\fdit\brisk\band

pr\fpaym\fnt\bsp\f\fds.\bFunds\bar\f\bprimarily\bvalu\fd\busing\bth\f\bfund’s

n\ft\bass\ft\bvalu\f,\bbas\fd\bon\bth\f\bfair\bvalu\f\bof\bth\f\bund\frlying

s\fcuriti\fs.\bTh\f\bL\fv\fl\b3\bm\fasur\fm\fnt\bint\frnational\bd\fbt

s\fcuriti\fs\bar\f\bprimarily\bvalu\fd\busing\ban\bincom\f\bapproach\bbas\fd

on\bdiscount\fd\bcash\bflows\busing\byi\fld\bcurv\fs\bd\friv\fd\bfrom

limit\fd,\bobs\frvabl\f\bmark\ft\bdata.

Derivatives – Th\f\bcompany’s\bd\frivativ\f\bfinancial

instrum\fnts\bconsist\bof\bint\fr\fst\brat\f\bswaps\band\bcaps,\bfor\fign

curr\fncy\bfutur\fs,\bforwards\band\bswaps,\band\bcross-curr\fncy

int\fr\fst\brat\f\bswaps.\bTh\f\bportfolio\bis\bvalu\fd\bbas\fd\bon\ban\bincom\f

approach\b(discount\fd\bcash\bflow)\busing\bmark\ft\bobs\frvabl\f

inputs,\bincluding\bswap\bcurv\fs\band\bboth\bforward\band\bspot

\fxchang\f\brat\fs\bfor\bcurr\fnci\fs.

59 Fi\fa\fci\fg Receiva\bles– Sp\fcific\br\fs\frv\f\bimpairm\fnts\bar\f Fair Value Hedges

bas\fd\bon\bth\f\bfair\bvalu\f\bof\bth\f\bcollat\fral,\bwhich\bis\bm\fasur\fd C\frtain\bint\fr\fst\brat\f\bcontracts\b(swaps)\bw\fr\f\bd\fsignat\fd\bas\bfair

using\ba\bmark\ft\bapproach\b(appraisal\bvalu\fs\bor\br\falizabl\f\bvalu\fs). valu\f\bh\fdg\fs\bof\bborrowings.\bTh\f\btotal\bnotional\bamounts\bof\bth\f

Inputs\binclud\f\ba\bs\fl\fction\bof\br\falizabl\f\bvalu\fs\b(s\f\f\bNot\f\b12). r\fc\fiv\f-fix\fd/pay-variabl\f\b\aint\fr\fst\brat\f\bcontracts\bat\bOctob\fr\b31, 2015\band\b2014\bw\fr\f\b$8,618\bmillion\band\b$8,798\bmillion,

Equipme\ft o\f Operati\fg Leases-Net – Th\f\bimpairm\fnts\bar\f

r\fsp\fctiv\fly.\bTh\f\b\fff\fctiv\f\bportions\bof\bth\f\bfair\bvalu\f\bgains\bor

bas\fd\bon\ban\bincom\f\bapproach\b(discount\fd\bcash\bflow),\busing\bth\f

loss\fs\bon\bth\fs\f\bcontracts\bw\fr\f\boffs\ft\bby\bfair\bvalu\f\bgains\bor

contractual\bpaym\fnts,\bplus\ban\b\fstimat\f\bof\b\fquipm\fnt\bsal\f\bpric\f

loss\fs\bon\bth\f\bh\fdg\fd\bit\fms\b(fix\fd-rat\f\bborrowings).\bAny

at\bl\fas\f\bmaturity.\bInputs\binclud\f\br\faliz\fd\bsal\fs\bvalu\fs.

in\fff\fctiv\f\bportions\bof\bth\f\bgains\bor\bloss\fs\bw\fr\f\br\fcogniz\fd

Property a\fd Equipme\ft-Net – Th\f\bimpairm\fnts\bar\f

curr\fntly\bin\bint\fr\fst\b\fxp\fns\f.\bTh\f\bin\fff\fctiv\f\bportions\bw\fr\f\ba

m\fasur\fd\bat\bth\f\blow\fr\bof\bth\f\bcarrying\bamount,\bor\bfair\bvalu\f.\bTh\f gain\bof\b$2\bmillion\band\bloss\bof\b$2\bmillion\bin\b2015\band\b2014,

valuations\bw\fr\f\bbas\fd\bon\ba\bcost\bapproach.\bTh\f\binputs\binclud\f r\fsp\fctiv\fly.\bTh\f\bcash\bflows\bfrom\bth\fs\f\bcontracts\bw\fr\f\br\fcord\fd

r\fplac\fm\fnt\bcost\b\fstimat\fs\badjust\fd\bfor\bphysical\bd\ft\frioration in\bop\frating\bactiviti\fs\bin\bth\f\bstat\fm\fnt\bof\bconsolidat\fd\bcash

and\b\fconomic\bobsol\fsc\fnc\f. flows.

Other I\fta\fgi\ble Assets-Net – Th\f\bimpairm\fnts\bar\f

Th\f\bgains\b(loss\fs)\bon\bth\fs\f\bcontracts\band\bth\f\bund\frlying

m\fasur\fd\bat\bth\f\blow\fr\bof\bth\f\bcarrying\bamount,\bor\bfair\bvalu\f.\bTh\f borrowings\br\fcord\fd\bin\bint\fr\fst\b\fxp\fns\f\bfollow\bin\bmillions\bof

valuations\bw\fr\f\bbas\fd\bon\ban\bincom\f\bapproach\b(discount\fd\bcash dollars:

flows).\bTh\f\binputs\binclud\f\b\fstimat\fs\bof\bfutur\f\bcash\bflows.

2015 2014 Other Assets – Th\f\bimpairm\fnts\bar\f\bm\fasur\fd\bat\bth\f\blow\fr Int\fr\fst\brat\f\bcontracts* ........................................ $ 104 $ (13) of\bth\f\bcarrying\bamount,\bor\bfair\bvalu\f.\bTh\f\bvaluations\bw\fr\f\bbas\fd Borrowings**..................................................... (102) 11 on\ba\bmark\ft\bapproach.\bTh\f\binputs\binclud\f\bsal\fs\bof\bcomparabl\f * Includ\fs\bchang\fs\bin\bfair\bvalu\fs\bof\bint\fr\fst\brat\f\bcontracts\b\fxcluding\bn\ft ass\fts. accru\fd\bint\fr\fst\bincom\f\bof\b$173\bmillion\band\b$168\bmillion\bduring\b2015\band Assets Held For Sale-Water Operatio\fs– Th\f\bimpairm\fnt 2014,\br\fsp\fctiv\fly.

** Includ\fs\badjustm\fnts\bfor\bfair\bvalu\fs\bof\bh\fdg\fd\bborrowings\b\fxcluding\baccru\fd of\bth\f\bdisposal\bgroup\bwas\bm\fasur\fd\bat\bth\f\blow\fr\bof\bcarrying int\fr\fst\b\fxp\fns\f\bof\b$274\bmillion\band\b$267\bmillion\bduring\b2015\band\b2014, amount,\bor\bfair\bvalu\f\bl\fss\bcost\bto\bs\fll.\bFair\bvalu\f\bwas\bbas\fd\bon r\fsp\fctiv\fly. th\f\bprobabl\f\bsal\f\bpric\f.\bTh\f\binputs\binclud\fd\b\fstimat\fs\bof\bth\f

final\bsal\f\bpric\f\b(s\f\f\bNot\f\b5). Derivatives Not Designated as Hedging Instruments

Th\f\bcompany\bhas\bc\frtain\bint\fr\fst\brat\f\bcontracts\b(swaps\band

27. DERIVATIVE IN\bTRUMENT\b

caps),\bfor\fign\b\fxchang\f\bcontracts\b(futur\fs,\bforwards\band\bswaps)

\fash Flow Hedges and\bcross-curr\fncy\bint\fr\fst\brat\f\bcontracts\b(swaps),\bwhich\bw\fr\f

C\frtain\bint\fr\fst\brat\f\band\bcross-curr\fncy\bint\fr\fst\brat\f\bcontracts not\bformally\bd\fsignat\fd\bas\bh\fdg\fs.\bTh\fs\f\bd\frivativ\fs\bw\fr\f\bh\fld

(swaps)\bw\fr\f\bd\fsignat\fd\bas\bh\fdg\fs\bof\bfutur\f\bcash\bflows\bfrom as\b\fconomic\bh\fdg\fs\bfor\bund\frlying\bint\fr\fst\brat\f\bor\bfor\fign

borrowings.\bTh\f\btotal\bnotional\bamounts\bof\bth\f\br\fc\fiv\f-variabl\f/ curr\fncy\b\fxposur\fs\bprimarily\bfor\bc\frtain\bborrowings\band

pay-fix\fd\bint\fr\fst\brat\f\bcontracts\bat\bOctob\fr\b31,\b2015\band\b2014 purchas\fs\bor\bsal\fs\bof\binv\fntory.\bTh\f\btotal\bnotional\bamounts\bof

w\fr\f\b$2,800\bmillion\band\b$3,050\bmillion,\br\fsp\fctiv\fly.\bTh\f\btotal th\f\bint\fr\fst\brat\f\bswaps\bat\bOctob\fr\b31,\b2015\band\b2014\bw\fr\f

notional\bamounts\bof\bth\f\bcross-curr\fncy\bint\fr\fst\brat\f\bcontracts $6,333\bmillion\band\b$6,317\bmillion,\bth\f\bfor\fign\b\fxchang\f

w\fr\f\b$60\bmillion\band\b$70\bmillion\bat\bOctob\fr\b31,\b2015\band\b2014, contracts\bw\fr\f\b$3,160\bmillion\band\b$3,524\bmillion\band\bth\f\bcross-

r\fsp\fctiv\fly.\bTh\f\b\fff\fctiv\f\bportions\bof\bth\f\bfair\bvalu\f\bgains\bor curr\fncy\bint\fr\fst\brat\f\bcontracts\bw\fr\f\b$76\bmillion\band

loss\fs\bon\bth\fs\f\bcash\bflow\bh\fdg\fs\bw\fr\f\br\fcord\fd\bin\both\fr $98\bmillion,\br\fsp\fctiv\fly.\bAt\bOctob\fr\b31,\b2015\band\b2014,\bth\fr\f

compr\fh\fnsiv\f\bincom\f\b(OCI)\band\bsubs\fqu\fntly\br\fclassifi\fd\binto w\fr\f\balso\b$1,069\bmillion\band\b$1,703\bmillion,\br\fsp\fctiv\fly,\bof

int\fr\fst\b\fxp\fns\f\bor\both\fr\bop\frating\b\fxp\fns\fs\b(for\fign\b\fxchang\f) int\fr\fst\brat\f\bcaps\bpurchas\fd\band\bth\f\bsam\f\bamounts\bsold\bat\bth\f

in\bth\f\bsam\f\bp\friods\bduring\bwhich\bth\f\bh\fdg\fd\btransactions sam\f\bcapp\fd\bint\fr\fst\brat\f\bto\bfacilitat\f\bborrowings\bthrough

aff\fct\fd\b\farnings.\bTh\fs\f\bamounts\boffs\ft\bth\f\b\fff\fcts\bof\bint\fr\fst s\fcuritization\bof\br\ftail\bnot\fs.\bTh\f\bfair\bvalu\f\bgains\bor\bloss\fs\bfrom

rat\f\bor\bfor\fign\bcurr\fncy\b\fxchang\f\brat\f\bchang\fs\bon\bth\f\br\flat\fd th\f\bint\fr\fst\brat\f\bcontracts\bw\fr\f\br\fcogniz\fd\bcurr\fntly\bin\bint\fr\fst

borrowings.\bAny\bin\fff\fctiv\f\bportions\bof\bth\f\bgains\bor\bloss\fs\bon\ball \fxp\fns\f\band\bth\f\bgains\bor\bloss\fs\bfrom\bfor\fign\b\fxchang\f

cash\bflow\bint\fr\fst\brat\f\bcontracts\bd\fsignat\fd\bas\bcash\bflow contracts\bin\bcost\bof\bsal\fs\bor\both\fr\bop\frating\b\fxp\fns\fs,\bg\fn\frally

h\fdg\fs\bw\fr\f\br\fcogniz\fd\bcurr\fntly\bin\bint\fr\fst\b\fxp\fns\f\bor\both\fr offs\ftting\bov\fr\btim\f\bth\f\b\fxp\fns\fs\bon\bth\f\b\fxposur\fs\bb\fing

op\frating\b\fxp\fns\fs\b(for\fign\b\fxchang\f)\band\bw\fr\f\bnot\bmat\frial h\fdg\fd.\bTh\f\bcash\bflows\bfrom\bth\fs\f\bnon-d\fsignat\fd\bcontracts

during\bany\by\fars\bpr\fs\fnt\fd.\bTh\f\bcash\bflows\bfrom\bth\fs\f\bcontracts w\fr\f\br\fcord\fd\bin\bop\frating\bactiviti\fs\bin\bth\f\bstat\fm\fnt\bof

w\fr\f\br\fcord\fd\bin\bop\frating\bactiviti\fs\bin\bth\f\bstat\fm\fnt\bof consolidat\fd\bcash\bflows.

consolidat\fd\bcash\bflows.

Th\f\bamount\bof\bloss\br\fcord\fd\bin\bOCI\bat\bOctob\fr\b31,\b2015

that\bis\b\fxp\fct\fd\bto\bb\f\br\fclassifi\fd\bto\bint\fr\fst\b\fxp\fns\f\bor\both\fr

op\frating\b\fxp\fns\fs\bin\bth\f\bn\fxt\btw\flv\f\bmonths\bif\bint\fr\fst\brat\fs

or\b\fxchang\f\brat\fs\br\fmain\bunchang\fd\bis\bapproximat\fly\b$4\bmillion

aft\fr-tax.\bTh\fs\f\bcontracts\bmatur\f\bin\bup\bto\b35\bmonths.\bTh\fr\f

w\fr\f\bno\bgains\bor\bloss\fs\br\fclassifi\fd\bfrom\bOCI\bto\b\farnings\bbas\fd

on\bth\f\bprobability\bthat\bth\f\boriginal\bfor\fcast\fd\btransaction\bwould

not\boccur.

60 Fair\bvalu\fs\bof\bd\frivativ\f\binstrum\fnts\bin\bth\f\bconsolidat\fd position\bat\bOctob\fr\b31,\b2015\band\bOctob\fr\b31,\b2014,\bwas

balanc\f\bsh\f\ft\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollow: $41\bmillion\band\b$57\bmillion,\br\fsp\fctiv\fly.\bTh\f\bcompany,\bdu\f\bto its\bcr\fdit\brating\band\bamounts\bof\bn\ft\bliability\bposition,\bhas\bnot

2015 2014 post\fd\bany\bcollat\fral.\bIf\bth\f\bcr\fdit-risk-r\flat\fd\bconting\fnt Other Assets f\fatur\fs\bw\fr\f\btrigg\fr\fd,\bth\f\bcompany\bwould\bb\f\br\fquir\fd\bto\bpost D\fsignat\fd\bas\bh\fdging\binstrum\fnts: collat\fral\bup\bto\ban\bamount\b\fqual\bto\bthis\bliability\bposition,\bprior Int\fr\fst\brat\f\bcontracts......................................... $ 299 $ 266 to\bconsid\fring\bapplicabl\f\bn\ftting\bprovisions. Cross-curr\fncy\bint\fr\fst\brat\f\bcontracts .................... 14 13 D\frivativ\f\binstrum\fnts\bar\f\bsubj\fct\bto\bsignificant Total\bd\fsignat\fd............................................. 313 279 conc\fntrations\bof\bcr\fdit\brisk\bto\bth\f\bbanking\bs\fctor.\bTh\f Not\bd\fsignat\fd\bas\bh\fdging\binstrum\fnts: company\bmanag\fs\bindividual\bcount\frparty\b\fxposur\f\bby\bs\ftting Int\fr\fst\brat\f\bcontracts ......................................... 54 53 limits\bthat\bconsid\fr\bth\f\bcr\fdit\brating\bof\bth\f\bcount\frparty,\bth\f For\fign\b\fxchang\f\bcontracts .................................. 50 18 cr\fdit\bd\ffault\bswap\bspr\fad\bof\bth\f\bcount\frparty\band\both\fr Cross-curr\fncy\bint\fr\fst\brat\f\bcontracts .................... 11 3 financial\bcommitm\fnts\band\b\fxposur\fs\bb\ftw\f\fn\bth\f\bcompany Total\bnot\bd\fsignat\fd....................................... 115 74 and\bth\f\bcount\frparty\bbanks.\bAll\bint\fr\fst\brat\f\bd\frivativ\fs\bar\f

transact\fd\bund\fr\bInt\frnational\bSwaps\band\bD\frivativ\fs

Total\bd\frivativ\f\bass\fts ......................................... $ 428 $ 353 Association\b(ISDA)\bdocum\fntation.\bSom\f\bof\bth\fs\f\bagr\f\fm\fnts Accounts Payable and Accrued Expenses includ\f\bcr\fdit\bsupport\bprovisions.\bEach\bmast\fr\bagr\f\fm\fnt D\fsignat\fd\bas\bh\fdging\binstrum\fnts: p\frmits\bth\f\bn\ft\bs\fttl\fm\fnt\bof\bamounts\bow\fd\bin\bth\f\b\fv\fnt\bof Int\fr\fst\brat\f\bcontracts......................................... $ 8 $ 35 d\ffault\bor\bt\frmination. Total\bd\fsignat\fd............................................. 8 35 D\frivativ\fs\bar\f\br\fcord\fd\bwithout\boffs\ftting\bfor\bn\ftting Not\bd\fsignat\fd\bas\bh\fdging\binstrum\fnts: arrang\fm\fnts\bor\bcollat\fral.\bTh\f\bimpact\bon\bth\f\bd\frivativ\f\bass\fts Int\fr\fst\brat\f\bcontracts ......................................... 52 46 and\bliabiliti\fs\br\flat\fd\bto\bn\ftting\barrang\fm\fnts\band\bany\bcollat\fral For\fign\b\fxchang\f\bcontracts .................................. 18 29 r\fc\fiv\fd\bor\bpaid\bat\bOctob\fr\b31\bin\bmillions\bof\bdollars\bfollows: Total\bnot\bd\fsignat\fd....................................... 70 75

Gross Amounts N\ftting Collat\fral N\ft

Total\bd\frivativ\f\bliabiliti\fs ...................................... $ 78 $ 110

R\fcogniz\fd Arrang\fm\fnts R\fc\fiv\fd Amount

2015

Th\f\bclassification\band\bgains\b(loss\fs)\bincluding\baccru\fd Ass\fts ........... $ 428 $ (62) $ 366 int\fr\fst\b\fxp\fns\f\br\flat\fd\bto\bd\frivativ\f\binstrum\fnts\bon\bth\f Liabiliti\fs....... 78 (62)16 stat\fm\fnt\bof\bconsolidat\fd\bincom\f\bconsist\fd\bof\bth\f\bfollowing\bin 2014 millions\bof\bdollars: Ass\fts........... $ 353 $ (76) $ (5) $ 272

Liabiliti\fs ....... 110 (76)34

2015 2014 2013

Fair Value Hedges

28. \bEGMENT AND GEOGRAPHI\f AREA DATA FOR THE YEAR\b Int\fr\fst\brat\f\bcontracts – Int\fr\fst\b\fxp\fns\f ........... $ 277 $ 155 $ (89) ENDED O\fTOBER 31, 2015, 2014 AND 2013

\fash Flow Hedges Th\f\bcompany’s\bop\frations\bar\f\bpr\fs\fntly\borganiz\fd\band\br\fport\fd R\fcogniz\fd\bin\bOCI in\bthr\f\f\bmajor\bbusin\fss\bs\fgm\fnts\bd\fscrib\fd\bas\bfollows: (Eff\fctiv\f\bPortion): Th\f\bagricultur\f\band\bturf\bs\fgm\fnt\bprimarily\bmanufactur\fs Int\fr\fst\brat\f\bcontracts – OCI\b(pr\ftax)*................ (16) (10) (15) and\bdistribut\fs\ba\bfull\blin\f\bof\bagricultur\f\band\bturf\b\fquipm\fnt\band For\fign\b\fxchang\f\bcontracts – OCI\b(pr\ftax)* ........ 4 (4) 58 r\flat\fd\bs\frvic\f\bparts – including\blarg\f,\bm\fdium\band\butility R\fclassifi\fd\bfrom\bOCI tractors;\bload\frs;\bcombin\fs,\bcorn\bpick\frs,\bcotton\band\bsugarcan\f (Eff\fctiv\f\bPortion): harv\fst\frs\band\br\flat\fd\bfront-\fnd\b\fquipm\fnt\band\bsugarcan\f Int\fr\fst\brat\f\bcontracts – Int\fr\fst\b\fxp\fns\f*......... (12) (13) (22) load\frs;\btillag\f,\bs\f\fding\band\bapplication\b\fquipm\fnt,\bincluding For\fign\b\fxchang\f\bcontracts – Oth\fr\b\fxp\fns\f* ..... 4 (6) 49 spray\frs,\bnutri\fnt\bmanag\fm\fnt\band\bsoil\bpr\fparation\bmachin\fry; R\fcogniz\fd\bDir\fctly\bin\bIncom\f hay\band\bforag\f\b\fquipm\fnt,\bincluding\bs\flf-prop\fll\fd\bforag\f (In\fff\fctiv\f\bPortion)....................................... ** ** ** harv\fst\frs\band\battachm\fnts,\bbal\frs\band\bmow\frs;\bturf\band\butility Not Designated as Hedges \fquipm\fnt,\bincluding\briding\blawn\b\fquipm\fnt\band\bwalk-b\fhind Int\fr\fst\brat\f\bcontracts – Int\fr\fst\b\fxp\fns\f* ......... $ (17) $ 3 $ (6) mow\frs,\bgolf\bcours\f\b\fquipm\fnt,\butility\bv\fhicl\fs,\band\bcomm\frcial For\fign\b\fxchang\f\bcontracts – Cost\bof\bsal\fs......... 97 25 35 mowing\b\fquipm\fnt,\balong\bwith\ba\bbroad\blin\f\bof\bassociat\fd For\fign\b\fxchang\f\bcontracts – Oth\fr\b\fxp\fns\f* . . . . . 304 79 20 impl\fm\fnts;\bint\fgrat\fd\bagricultural\bmanag\fm\fnt\bsyst\fms Total\bnot\bd\fsignat\fd.................................. $ 384 $ 107 $ 49 t\fchnology\band\bsolutions;\band\both\fr\boutdoor\bpow\fr\bproducts.

* Includ\fs\bint\fr\fst\band\bfor\fign\b\fxchang\f\bgains\b(loss\fs)\bfrom\bcross-curr\fncy Th\f\bconstruction\band\bfor\fstry\bs\fgm\fnt\bprimarily int\fr\fst\brat\f\bcontracts. manufactur\fs\band\bdistribut\fs\ba\bbroad\brang\f\bof\bmachin\fs\band ** Th\f\bamounts\bar\f\bnot\bsignificant. s\frvic\f\bparts\bus\fd\bin\bconstruction,\b\farthmoving,\bmat\frial

handling\band\btimb\fr\bharv\fsting – including\bbackho\f\bload\frs;

\founterparty Risk and \follateral

crawl\fr\bdoz\frs\band\bload\frs;\bfour-wh\f\fl-driv\f\bload\frs;\b\fxcavators;

C\frtain\bof\bth\f\bcompany’s\bd\frivativ\f\bagr\f\fm\fnts\bcontain\bcr\fdit

motor\bgrad\frs;\barticulat\fd\bdump\btrucks;\blandscap\f\bload\frs;\bskid-

support\bprovisions\bthat\bmay\br\fquir\f\bth\f\bcompany\bto\bpost

st\f\fr\bload\frs;\band\blog\bskidd\frs,\bf\fll\fr\bbunch\frs,\blog\bload\frs,\blog

collat\fral\bbas\fd\bon\bth\f\bsiz\f\bof\bth\f\bn\ft\bliability\bpositions\band

forward\frs,\blog\bharv\fst\frs\band\br\flat\fd\battachm\fnts.

cr\fdit\bratings.\bTh\f\baggr\fgat\f\bfair\bvalu\f\bof\ball\bd\frivativ\fs\bwith

cr\fdit-risk-r\flat\fd\bconting\fnt\bf\fatur\fs\bthat\bw\fr\f\bin\ba\bn\ft\bliability

61 Th\f\bproducts\band\bs\frvic\fs\bproduc\fd\bby\bth\f\bs\fgm\fnts OPERATING \bEGMENT\b2015 2014 2013 abov\f\bar\f\bmark\ft\fd\bprimarily\bthrough\bind\fp\fnd\fnt\br\ftail\bd\fal\fr Interest income* n\ftworks\band\bmajor\br\ftail\boutl\fts. Agricultur\f\band\bturf.............................. $ 14 $ 17 $ 24 Th\f\bfinancial\bs\frvic\fs\bs\fgm\fnt\bprimarily\bfinanc\fs\bsal\fs\band Construction\band\bfor\fstry ...................... 2 1 2

Financial\bs\frvic\fs ................................. 1,687 1,754 1,668 l\fas\fs\bby\bJohn\bD\f\fr\f\bd\fal\frs\bof\bn\fw\band\bus\fd\bagricultur\f\band Corporat\f........................................... 61 57 55 turf\b\fquipm\fnt\band\bconstruction\band\bfor\fstry\b\fquipm\fnt.\bIn Int\frcompany ...................................... (253) (268) (247) addition,\bth\f\bfinancial\bs\frvic\fs\bs\fgm\fnt\bprovid\fs\bwhol\fsal\f

financing\bto\bd\fal\frs\bof\bth\f\bfor\fgoing\b\fquipm\fnt,\bfinanc\fs\br\ftail

Total.............................................. $ 1,511 $ 1,561 $ 1,502 r\fvolving\bcharg\f\baccounts\band\boff\frs\b\fxt\fnd\fd\b\fquipm\fnt * Do\fs\bnot\binclud\f\bfinanc\f\br\fntal\bincom\f\bfor\b\fquipm\fnt\bon\bop\frating\bl\fas\fs. warranti\fs.

Interest expense B\fcaus\f\bof\bint\fgrat\fd\bmanufacturing\bop\frations\band Agricultur\f\band\bturf.............................. $ 160 $ 175 $ 167 common\badministrativ\f\band\bmark\fting\bsupport,\ba\bsubstantial Construction\band\bfor\fstry ...................... 45 37 36 numb\fr\bof\ballocations\bmust\bb\f\bmad\f\bto\bd\ft\frmin\f\bop\frating Financial\bs\frvic\fs................................. 455 431 488 s\fgm\fnt\band\bg\fographic\bar\fa\bdata.\bInt\frs\fgm\fnt\bsal\fs\band Corporat\f........................................... 273 289 297 r\fv\fnu\fs\br\fpr\fs\fnt\bsal\fs\bof\bcompon\fnts\band\bfinanc\f\bcharg\fs, Int\frcompany ...................................... (253) (268) (247) which\bar\f\bg\fn\frally\bbas\fd\bon\bmark\ft\bpric\fs. Total.............................................. $ 680 $ 664 $ 741 Information\br\flating\bto\bop\frations\bby\bop\frating\bs\fgm\fnt\bin

millions\bof\bdollars\bfollows.\bIn\baddition\bto\bth\f\bfollowing

Depreciation* and amortization expense unaffiliat\fd\bsal\fs\band\br\fv\fnu\fs\bby\bs\fgm\fnt,\bint\frs\fgm\fnt\bsal\fs Agricultur\f\band\bturf .............................. $ 659 $ 681 $ 627 and\br\fv\fnu\fs\bin\b2015,\b2014\band\b2013\bw\fr\f\bas\bfollows: Construction\band\bfor\fstry ...................... 133 115 106 agricultur\f\band\bturf\bn\ft\bsal\fs\bof\b$49\bmillion,\b$89\bmillion\band Financial\bs\frvic\fs................................. 590 511 407

$69\bmillion,\bconstruction\band\bfor\fstry\bn\ft\bsal\fs\bof\b$1\bmillion, Total.............................................. $ 1,382 $ 1,307 $ 1,140 $1\bmillion\band\b$2\bmillion,\band\bfinancial\bs\frvic\fs\br\fv\fnu\fs\bof * Includ\fs\bd\fpr\fciation\bfor\b\fquipm\fnt\bon\bop\frating\bl\fas\fs. $225\bmillion,\b$228\bmillion\band\b$220\bmillion,\br\fsp\fctiv\fly.

Equity in income (loss) of

OPERATING \bEGMENT\b 2015 2014 2013

unconsolidated affiliates

Net sales and revenues Agricultur\f\band\bturf.............................. $ 7 $ 8 $ (1)

Unaffiliat\fd\bcustom\frs: Construction\band\bfor\fstry...................... (7) (18)

Agricultur\f\band\bturf\bn\ft\bsal\fs .............. $19,812 $26,380 $29,132

Financial\bs\frvic\fs................................. 1 2 1

Construction\band\bfor\fstry\bn\ft\bsal\fs ......5,963 6,581 5,866

Total.............................................. $ 1 $ (8)

Total\bn\ft\bsal\fs .............................. 25,775 32,961 34,998

Financial\bs\frvic\fs\br\fv\fnu\fs .....................2,591 2,577 2,349

Identifiable operating assets

Oth\fr\br\fv\fnu\fs* .................................. 497 529 448

Agricultur\f\band\bturf.............................. $ 8,332 $ 9,442 $10,799

Construction\band\bfor\fstry ......................3,295 3,405 3,461

Total ................................................. $ 28,863 $36,067 $37,795

Financial\bs\frvic\fs................................. 40,909 42,784 38,646

* Oth\fr\br\fv\fnu\fs\bar\f\bprimarily\bth\f\b\fquipm\fnt\bop\frations’\br\fv\fnu\fs\bfor\bfinanc\f Corporat\f*......................................... 5,412 5,705 6,615 and\bint\fr\fst\bincom\f,\band\both\fr\bincom\f\bas\bdisclos\fd\bin\bNot\f\b31,\bn\ft\bof Total.............................................. $ 57,948 $61,336 $59,521 c\frtain\bint\frcompany\b\fliminations.

* Corporat\f\bass\fts\bar\f\bprimarily\bth\f\b\fquipm\fnt\bop\frations’\br\ftir\fm\fnt\bb\fn\ffits, Operating profit d\ff\frr\fd\bincom\f\btax\bass\fts,\bmark\ftabl\f\bs\fcuriti\fs\band\bcash\band\bcash Agricultur\f\band\bturf.............................. $ 1,649 $ 3,649 $ 4,680 \fquival\fnts\bas\bdisclos\fd\bin\bNot\f\b31,\bn\ft\bof\bc\frtain\bint\frcompany Construction\band\bfor\fstry ...................... 528 648 378 \fliminations. Financial\bs\frvic\fs*................................ 963 921 870

\fapital additions

Total\bop\frating\bprofit ........................3,140 5,218 5,928

Agricultur\f\band\bturf.............................. $ 522 $ 868 $ 981

Int\fr\fst\bincom\f ................................... 61 57 55

Construction\band\bfor\fstry...................... 138 145 174

Inv\fstm\fnt\bincom\f ............................... 2 2

Financial\bs\frvic\fs ................................. 6 3 3

Int\fr\fst\b\fxp\fns\f .................................. (273) (289) (297)

Total.............................................. $ 666 $ 1,016 $ 1,158

For\fign\b\fxchang\f\bgains\b(loss\fs)\bfrom

\fquipm\fnt\bop\frations’\bfinancing Investments in unconsolidated affiliates

activiti\fs ......................................... 13 (2) (8)

Agricultur\f\band\bturf.............................. $ 116 $ 110 $ 24

Corporat\f\b\fxp\fns\fs – n\ft ......................(160) (196) (197)

Construction\band\bfor\fstry...................... 177 182 187

Incom\f\btax\fs ....................................... (840) (1,627) (1,946)

Financial\bs\frvic\fs................................. 10 11 10

Total .............................................. (1,199) (2,055) (2,391)

Total.............................................. $ 303 $ 303 $ 221

N\ft\bincom\f ......................................... 1,941 3,163 3,537

L\fss:\bN\ft\bincom\f\battributabl\f\bto noncontrolling\bint\fr\fsts ..................... 1 1

N\ft\bincom\f\battributabl\f\bto D\f\fr\f\b&\bCompany ............................. $ 1,940 $ 3,162 $ 3,537

* Op\frating\bprofit\bof\bth\f\bfinancial\bs\frvic\fs\bbusin\fss\bs\fgm\fnt\binclud\fs\bth\f

\fff\fct\bof\bits\bint\fr\fst\b\fxp\fns\f\band\bfor\fign\b\fxchang\f\bgains\bor\bloss\fs.

62 Th\f\bcompany\bvi\fws\band\bhas\bhistorically\bdisclos\fd\bits29. \bUPPLEMENTAL INFORMATION (UNAUDITED)

op\frations\bas\bconsisting\bof\btwo\bg\fographic\bar\fas,\bth\f\bU.S.\band Common\bstock\bp\fr\bshar\f\bsal\fs\bpric\fs\bfrom\bN\fw\bYork\bStock

Canada,\band\boutsid\f\bth\f\bU.S.\band\bCanada,\bshown\bb\flow\bin Exchang\f\bcomposit\f\btransactions\bquotations\bfollow:

millions\bof\bdollars.\bNo\bindividual\bfor\fign\bcountry’s\bn\ft\bsal\fs\band

First S\fcond Third Fourth r\fv\fnu\fs\bw\fr\f\bmat\frial\bfor\bdisclosur\f\bpurpos\fs. Quart\fr Quart\fr Quart\fr Quart\fr

GEOGRAPHI\f AREA\b 2015 2014 2013

2015 Market price

Net sales and revenues High......................................... $ 90.85 $ 92.75 $ 97.33 $ 97.14

Unaffiliat\fd\bcustom\frs: Low.......................................... $84.55 $ 86.64 $ 88.98 $ 72.89

U.S.\band\bCanada: 2014 Market price

Equipm\fnt\bop\frations High......................................... $ 91.33 $ 93.89 $ 94.53 $ 87.16

n\ft\bsal\fs\b(87%)* .......................... $ 16,498 $ 20,171 $ 21,821

Low.......................................... $ 81.50 $ 84.05 $ 85.11 $ 80.01

Financial\bs\frvic\fs\br\fv\fnu\fs\b(78%)* ......2,252 2,220 2,031

At\bOctob\fr\b31,\b2015,\bth\fr\f\bw\fr\f\b23,415\bhold\frs\bof\br\fcord Total......................................... 18,750 22,391 23,852 of\bth\f\bcompany’s\b$1\bpar\bvalu\f\bcommon\bstock. Outsid\f\bU.S.\band\bCanada: Quart\frly\binformation\bwith\br\fsp\fct\bto\bn\ft\bsal\fs\band Equipm\fnt\bop\frations\bn\ft\bsal\fs.........9,277 12,790 13,177 r\fv\fnu\fs\band\b\farnings\bis\bshown\bin\bth\f\bfollowing\bsch\fdul\f.\bTh\f Financial\bs\frvic\fs\br\fv\fnu\fs ............... 339 357 318

company’s\bfiscal\by\far\b\fnds\bin\bOctob\fr\band\bits\bint\frim\bp\friods Total......................................... 9,616 13,147 13,495 (quart\frs)\b\fnd\bin\bJanuary,\bApril\band\bJuly.\bSuch\binformation\bis Oth\fr\br\fv\fnu\fs..................................... 497 529 448 shown\bin\bmillions\bof\bdollars\b\fxc\fpt\bfor\bp\fr\bshar\f\bamounts. Total................................................... $ 28,863 $ 36,067 $ 37,795

First S\fcond Third Fourth

* Th\f\bp\frc\fntag\fs\bindicat\f\bth\f\bapproximat\f\bproportion\bof\b\fach\bamount\bthat Quart\fr Quart\fr Quart\fr Quart\fr r\flat\fs\bto\bth\f\bU.S.\bonly\band\bar\f\bbas\fd\bupon\ba\bthr\f\f-y\far\bav\frag\f\bfor\b2015,

2014\band\b2013. 2015N\ft\bsal\fs\band\br\fv\fnu\fs................ $6,383 $ 8,171 $ 7,594 $ 6,715

Operating profit N\ft\bsal\fs................................... 5,605 7,399 6,839 5,932

U.S.\band\bCanada: Gross\bprofit............................... 1,184 1,704 1,482 1,262

Equipm\fnt\bop\frations ..................... $1,643 $ 3,311 $ 4,062

Incom\f\bb\ffor\f\bincom\f\btax\fs.......... 5681,017 738 457

Financial\bs\frvic\fs ............................ 802 727 706

N\ft\bincom\f\battributabl\f\bto

D\f\fr\f\b&\bCompany .................... 387 690 512 351

Total ......................................... 2,445 4,038 4,768

P\fr\bshar\f\bdata:

Outsid\f\bU.S.\band\bCanada: Basic..................................... 1.13 2.05 1.54 1.09

Equipm\fnt\bop\frations ..................... 534 986 996

Dilut\fd.................................. 1.12 2.03 1.53 1.08

Financial\bs\frvic\fs ............................ 161 194 164

Divid\fnds\bd\fclar\fd................... .60 .60 .60 .60

Divid\fnds\bpaid ........................ .60 .60 .60 .60

Total ......................................... 695 1,180 1,160

2014*

Total ................................................... $ 3,140 $ 5,218 $ 5,928

N\ft\bsal\fs\band\br\fv\fnu\fs................ $7,654 $ 9,948 $ 9,500 $ 8,965

N\ft\bsal\fs ................................... 6,949 9,246 8,723 8,043

Property and equipment Gross\bprofit............................... 1,753 2,374 2,112 1,946

U.S. ................................................... $ 3,098 $ 3,154 $ 2,997

Incom\f\bb\ffor\f\bincom\f\btax\fs.......... 9651,464 1,292 1,076

G\frmany .............................................. 568 640 647

N\ft\bincom\f\battributabl\f\bto

Oth\fr\bcountri\fs ..................................... 1,515 1,784 1,823

D\f\fr\f\b&\bCompany.................... 681 981 851 649

P\fr\bshar\f\bdata:

Total ............................................... $ 5,181 $ 5,578 $ 5,467

Basic..................................... 1.83 2.67 2.35 1.84

Dilut\fd .................................. 1.81 2.65 2.33 1.83

Divid\fnds\bd\fclar\fd ................... .51 .51 .60 .60

Divid\fnds\bpaid ........................ .51 .51 .51 .60

N\ft\bincom\f\bp\fr\bshar\f\bfor\b\fach\bquart\fr\bmust\bb\f\bcomput\fd\bind\fp\fnd\fntly.\bAs\ba

r\fsult,\bth\fir\bsum\bmay\bnot\b\fqual\bth\f\btotal\bn\ft\bincom\f\bp\fr\bshar\f\bfor\bth\f\by\far.

* S\f\f\bNot\f\b5\bfor\b‘‘Sp\fcial\bIt\fms.’’

30. \bUB\bEQUENT EVENT\b

A\bquart\frly\bdivid\fnd\bof\b$.60\bp\fr\bshar\f\bwas\bd\fclar\fd\bat\bth\f\bBoard

of\bDir\fctors\bm\f\fting\bon\bD\fc\fmb\fr\b2,\b2015,\bpayabl\f\bon

F\fbruary\b1,\b2016\bto\bstockhold\frs\bof\br\fcord\bon\bD\fc\fmb\fr\b31,

2015.

63 31. \bUPPLEMENTAL \fON\bOLIDATING DATA

IN\fOME \bTATEMENT

For the Years Ended October 31, 2015, 2014 and 2013

(In\bmillions\bof\bdollars)

EQUIPMENT OPERATION\b*FINAN\fIAL \bERVI\fE\b

2015 2014 2013 2015 2014 2013

Net \bales and Revenues

N\ft\bsal\fs ................................................................................... $ 25,775.2 $32,960.6 $34,997.9

Financ\f\band\bint\fr\fst\bincom\f .......................................................... 77.0 76.5 80.8 $ 2,557.0 $ 2,475.0 $ 2,280.5

Oth\fr\bincom\f ............................................................................. 602.7 622.6 549.1 258.9 330.2 288.4

Total ..................................................................................... 26,454.9 33,659.7 35,627.8 2,815.9 2,805.2 2,568.9

\fosts and Expenses

Cost\bof\bsal\fs ............................................................................... 20,145.2 24,777.8 25,668.8

R\fs\farch\band\bd\fv\flopm\fnt\b\fxp\fns\fs ............................................... 1,425.1 1,452.0 1,477.3

S\flling,\badministrativ\f\band\bg\fn\fral\b\fxp\fns\fs .....................................2,393.8 2,765.1 3,143.9 487.3 529.2 473.2

Int\fr\fst\b\fxp\fns\f .......................................................................... 272.8 289.4 297.1 455.0 430.9 487.6

Int\fr\fst\bcomp\fnsation\bto\bFinancial\bS\frvic\fs ......................................204.8 212.1 202.7

Oth\fr\bop\frating\b\fxp\fns\fs ............................................................. 195.0 285.4 223.7 911.7 925.6 739.0

Total ..................................................................................... 24,636.7 29,781.8 31,013.5 1,854.0 1,885.7 1,699.8

Income of \fonsolidated Group before Income Taxes ........................1,818.2 3,877.9 4,614.3 961.9 919.5 869.1

Provision\bfor\bincom\f\btax\fs ............................................................. 509.9 1,329.6 1,640.7 330.2 296.9 305.2

Income of \fonsolidated Group ..................................................... 1,308.3 2,548.3 2,973.6 631.7 622.6 563.9

Equity in Income (Loss) of Unconsolidated \bubsidiaries and Affiliates Financial\bS\frvic\fs ..................................................................... 632.9 624.5 565.01.2 1.9 1.1

Oth\fr .................................................................................... (.3) (9.5) (1.0)

Total .................................................................................. 632.6 615.0 564.01.2 1.9 1.1

Net Income ............................................................................... 1,940.9 3,163.3 3,537.6 632.9 624.5 565.0

L\fss:\bN\ft\bincom\f\battributabl\f\bto\bnoncontrolling\bint\fr\fsts ..................... .9 1.6 .3

Net Income Attributable to Deere & \fompany ................................ $1,940.0 $ 3,161.7 $ 3,537.3 $ 632.9 $ 624.5 $ 565.0

* D\f\fr\f\b&\bCompany\bwith\bFinancial\bS\frvic\fs\bon\bth\f\b\fquity\bbasis.

Th\f\bsuppl\fm\fntal\bconsolidating\bdata\bis\bpr\fs\fnt\fd\bfor\binformational\bpurpos\fs.\bTh\f\b‘‘Equipm\fnt\bOp\frations’’\br\ffl\fct\bth\f\bbasis\bof\bconsolidation\bd\fscrib\fd\bin\bNot\f\b1\bto

th\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.\bTh\f\bconsolidat\fd\bgroup\bdata\bin\bth\f\b‘‘Equipm\fnt\bOp\frations’’\bincom\f\bstat\fm\fnt\br\ffl\fct\bth\f\br\fsults\bof\bth\f\bagricultur\f\band\bturf

op\frations\band\bconstruction\band\bfor\fstry\bop\frations.\bTransactions\bb\ftw\f\fn\bth\f\b‘‘Equipm\fnt\bOp\frations’’\band\b‘‘Financial\bS\frvic\fs’’\bhav\f\bb\f\fn\b\fliminat\fd\bto\barriv\f\bat

th\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.

64 31. \bUPPLEMENTAL \fON\bOLIDATING DATA (continued)

BALAN\fE \bHEET

As of October 31, 2015 and 2014

(In\bmillions\bof\bdollars\b\fxc\fpt\bp\fr\bshar\f\bamounts)

EQUIPMENT OPERATION\b*FINAN\fIAL \bERVI\fE\b

2015 2014 2015 2014

A\b\bET\b

Cash\band\bcash\b\fquival\fnts ............................................................................ $ 2,900.0 $ 2,569.2 $ 1,262.2 $ 1,217.8

Mark\ftabl\f\bs\fcuriti\fs .................................................................................. 47.7 700.4389.7 514.7

R\fc\fivabl\fs\bfrom\bunconsolidat\fd\bsubsidiari\fs\band\baffiliat\fs .................................2,428.7 3,663.9

Trad\f\baccounts\band\bnot\fs\br\fc\fivabl\f – n\ft ....................................................... 485.2 706.0 3,553.1 3,554.4

Financing\br\fc\fivabl\fs – n\ft ........................................................................... .9 18.5 24,808.1 27,403.7

Financing\br\fc\fivabl\fs\bs\fcuritiz\fd – n\ft ............................................................ 4,834.6 4,602.3

Oth\fr\br\fc\fivabl\fs ........................................................................................ 849.5 848.0152.9 659.0

Equipm\fnt\bon\bop\frating\bl\fas\fs – n\ft .............................................................. 4,970.4 4,015.5

Inv\fntori\fs ................................................................................................ 3,817.0 4,209.7

Prop\frty\band\b\fquipm\fnt – n\ft ....................................................................... 5,126.2 5,522.555.3 55.3

Inv\fstm\fnts\bin\bunconsolidat\fd\bsubsidiari\fs\band\baffiliat\fs ....................................4,817.6 5,106.5 10.5 10.9

Goodwill ................................................................................................... 726.0 791.2

Oth\fr\bintangibl\f\bass\fts – n\ft ........................................................................ 63.6 64.84.0

R\ftir\fm\fnt\bb\fn\ffits .................................................................................... 211.9 263.525.0 32.9

D\ff\frr\fd\bincom\f\btax\fs ................................................................................. 3,092.0 2,981.967.9 64.9

Oth\fr\bass\fts .............................................................................................. 807.3 850.6779.1 648.2

Total Assets .............................................................................................. $ 25,373.6 $ 28,296.7 $ 40,908.8 $ 42,783.6

LIABILITIE\b AND \bTO\fKHOLDER\b’ EQUITY

LIABILITIE\b

Short-t\frm\bborrowings ................................................................................ $ 464.3 $ 434.1 $ 7,962.3 $ 7,585.1

Short-t\frm\bs\fcuritization\bborrowings .............................................................. 4,590.0 4,558.5

Payabl\fs\bto\bunconsolidat\fd\bsubsidiari\fs\band\baffiliat\fs ........................................80.6 101.0 2,395.4 3,633.7

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs .......................................................... 6,801.2 7,518.4 1,511.2 2,027.0

D\ff\frr\fd\bincom\f\btax\fs ................................................................................. 86.8 87.1466.6 344.1

Long-t\frm\bborrowings ................................................................................. 4,460.6 4,642.5 19,372.2 19,738.2

R\ftir\fm\fnt\bb\fn\ffits\band\both\fr\bliabiliti\fs .......................................................... 6,722.5 6,448.186.4 82.8

Total\bliabiliti\fs ................................................................................. 18,616.0 19,231.2 36,384.1 37,969.4

Commitm\fnts\band\bconting\fnci\fs\b(Not\f\b22)

\bTO\fKHOLDER\b’ EQUITY

Common\bstock,\b$1\bpar\bvalu\f\b(authoriz\fd – 1,200,000,000\bshar\fs; issu\fd – 536,431,204\bshar\fs\bin\b2015\band\b2014),\bat\bpaid-in\bamount ..................3,825.6 3,675.4 2,050.8 2,023.1

Common\bstock\bin\btr\fasury,\b219,743,893\bshar\fs\bin\b2015 and\b190,926,805\bshar\fs\bin\b2014,\bat\bcost ..................................................... (15,497.6) (12,834.2)

R\ftain\fd\b\farnings ....................................................................................... 23,144.8 22,004.4 2,764.8 2,811.8

Accumulat\fd\both\fr\bcompr\fh\fnsiv\f\bincom\f\b(loss) ...............................................(4,729.4) (3,783.0) (290.9) (20.7)

Total\bD\f\fr\f\b&\bCompany\bstockhold\frs’\b\fquity .................................................... 6,743.4 9,062.6 4,524.7 4,814.2

Noncontrolling\bint\fr\fsts ............................................................................... 14.22.9

Total\bstockhold\frs’\b\fquity ......................................................................... 6,757.6 9,065.5 4,524.7 4,814.2

Total Liabilities and \btockholders’ Equity ...................................................... $ 25,373.6 $ 28,296.7 $ 40,908.8 $ 42,783.6

* D\f\fr\f\b&\bCompany\bwith\bFinancial\bS\frvic\fs\bon\bth\f\b\fquity\bbasis.

th\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.\bTransactions\bb\ftw\f\fn\bth\f\b‘‘Equipm\fnt\bOp\frations’’\band\b‘‘Financial\bS\frvic\fs’’\bhav\f\bb\f\fn\b\fliminat\fd\bto\barriv\f\bat\bth\f

consolidat\fd\bfinancial\bstat\fm\fnts.

65 31. \bUPPLEMENTAL \fON\bOLIDATING DATA (continued)

\bTATEMENT OF \fA\bH FLOW\b

For the Years Ended October 31, 2015, 2014 and 2013

(In\bmillions\bof\bdollars)

EQUIPMENT OPERATION\b*FINAN\fIAL \bERVI\fE\b

2015 2014 2013 2015 2014 2013

\fash Flows from Operating Activities

N\ft\bincom\f ..................\a..................\a..................\a..................\a...... $ 1,940.9 $ 3,163.3 $ 3,537.6 $ 632.9 $ 624.5 $ 565.0

Adjustm\fnts\bto\br\fconcil\f\bn\ft\bincom\f\bto\bn\ft\bcash\bprovid\fd\bby op\frating\bactiviti\fs:

Provision\bfor\bcr\fdit\bloss\fs ..................\a..................\a..................\a. 5.5 2.9 10.849.9 35.2 9.7

Provision\bfor\bd\fpr\fciation\band\bamortization ..................\a..............791.8 795.7 733.0 688.5 574.9 492.2

Impairm\fnt\bcharg\fs ..................\a..................\a..................\a......... 15.3 95.9 102.019.5

Undistribut\fd\b\farnings\bof\bunconsolidat\fd\bsubsidiari\fs \band\baffiliat\fs ..................\a..................\a..................\a.............. 46.6 (463.4) (369.0)(1.0) (1.7) (.9)

Provision\b(cr\fdit)\bfor\bd\ff\frr\fd\bincom\f\btax\fs ..................\a..............(139.8) (236.4) (204.6) 121.4 (43.7) 32.0

Chang\fs\bin\bass\fts\band\bliabiliti\fs: Trad\f\br\fc\fivabl\fs ..................\a..................\a..................\a......... 113.4 231.5 26.1

Insuranc\f\br\fc\fivabl\fs ..................\a..................\a..................\a.... 333.4 (149.9) 263.4

Inv\fntori\fs ..................\a..................\a..................\a..................\a (17.0) 496.2 (69.6)

Accounts\bpayabl\f\band\baccru\fd\b\fxp\fns\fs ..................\a...............(253.8) (277.0) 470.5 (245.4) 263.3 (207.9)

Accru\fd\bincom\f\btax\fs\bpayabl\f/r\fc\fivabl\f ..................\a..............(133.0) 330.5 84.2 (4.6) 12.1 (3.8)

R\ftir\fm\fnt\bb\fn\ffits ..................\a..................\a..................\a...... 414.3 323.0 241.613.2 13.9 20.4

Oth\fr ..................\a..................\a..................\a..................\a.......... 271.1 70.0 106.0 (25.7) (7.7) 73.5

N\ft\bcash\bprovid\fd\bby\bop\frating\bactiviti\fs ..................\a...........3,055.3 4,532.2 4,668.6 1,582.1 1,320.9 1,243.6

\fash Flows from Investing Activities

Coll\fctions\bof\br\fc\fivabl\fs\b(\fxcluding\btrad\f\band\bwhol\fsal\f) ................. 16,266.1 16,772.0 15,440.0

Proc\f\fds\bfrom\bmaturiti\fs\band\bsal\fs\bof\bmark\ftabl\f\bs\fcuriti\fs ..............700.1 1,000.1 800.1 160.6 22.4 43.8

Proc\f\fds\bfrom\bsal\fs\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs ..................\a... 1,049.4 1,091.5 936.7

Proc\f\fds\bfrom\bsal\fs\bof\bbusin\fss\fs,\bn\ft\bof\bcash\bsold ..................\a.......345.8 22.0 149.2

Cost\bof\br\fc\fivabl\fs\bacquir\fd\b(\fxcluding\btrad\f\band\bwhol\fsal\f) .............(16,327.8) (19,015.3) (18,792.7)

Purchas\fs\bof\bmark\ftabl\f\bs\fcuriti\fs ..................\a..................\a........... (60.0) (504.1) (911.1) (94.9) (110.5) (115.2)

Purchas\fs\bof\bprop\frty\band\b\fquipm\fnt ..................\a..................\a....... (688.1) (1,045.2) (1,155.2) (5.9) (3.1) (3.2)

Cost\bof\b\fquipm\fnt\bon\bop\frating\bl\fas\fs\bacquir\fd ..................\a........... (3,043.6) (2,684.2) (2,107.2)

Incr\fas\f\bin\binv\fstm\fnt\bin\bFinancial\bS\frvic\fs ..................\a..................\a(27.4) (66.8) (121.6)

Acquisitions\bof\bbusin\fss\fs,\bn\ft\bof\bcash\bacquir\fd ..................\a........... (83.5)

D\fcr\fas\f\b(incr\fas\f)\bin\btrad\f\band\bwhol\fsal\f\br\fc\fivabl\fs ..................\a... 657.0 (782.0) (1,152.7)

Oth\fr ..................\a..................\a..................\a..................\a............. 6.8 (98.6) (120.0) (45.1) (47.1) (94.5)

N\ft\bcash\bus\fd\bfor\binv\fsting\bactiviti\fs ..................\a................(68.6) (368.8) (1,569.3) (1,235.0) (4,756.3) (5,845.0)

\fash Flows from Financing Activities

Incr\fas\f\b(d\fcr\fas\f)\bin\btotal\bshort-t\frm\bborrowings ..................\a.........211.9 (65.8) 36.0 289.7 155.0 2,713.5

Chang\f\bin\bint\frcompany\br\fc\fivabl\fs/payabl\fs ..................\a...............928.6 (367.5) (2,007.2) (928.6) 367.5 2,007.2

Proc\f\fds\bfrom\blong-t\frm\bborrowings ..................\a..................\a........ 6.2 60.7 282.9 5,704.8 8,171.3 4,451.1

Paym\fnts\bof\blong-t\frm\bborrowings ..................\a..................\a........... (214.2) (819.1) (191.0) (4,649.0) (4,390.0) (4,767.4)

Proc\f\fds\bfrom\bissuanc\f\bof\bcommon\bstock ..................\a..................\a..172.1 149.5 174.5

R\fpurchas\fs\bof\bcommon\bstock ..................\a..................\a................ (2,770.7) (2,731.1) (1,531.4)

Capital\binv\fstm\fnt\bfrom\bEquipm\fnt\bOp\frations ..................\a............. 27.4 66.8 121.6

Divid\fnds\bpaid ..................\a..................\a..................\a..................\a. (816.3) (786.0) (752.9) (679.6) (150.0) (186.0)

Exc\fss\btax\bb\fn\ffits\bfrom\bshar\f-bas\fd\bcomp\fnsation ..................\a......18.5 30.8 50.7

Oth\fr ..................\a..................\a..................\a..................\a............. (45.4) (27.7) (40.1) (26.7) (35.9) (19.2)

N\ft\bcash\bprovid\fd\bby\b(us\fd\bfor)\bfinancing\bactiviti\fs ................(2,509.3) (4,556.2) (3,978.5) (262.0) 4,184.7 4,320.8

Effect of Exchange Rate \fhanges on \fash and \fash Equivalents .....(146.6) (61.3) (5.4) (40.7) (12.3) 17.1

Net Increase (Decrease) in \fash and \fash Equivalents ..................\a.330.8 (454.1) (884.6) 44.4 737.0 (263.5)

\fash and \fash Equivalents at Beginning of Year ..................\a........2,569.2 3,023.3 3,907.9 1,217.8 480.8 744.3

\fash and \fash Equivalents at End of Year ..................\a................. $2,900.0 $ 2,569.2 $ 3,023.3 $ 1,262.2 $ 1,217.8 $ 480.8

* D\f\fr\f\b&\bCompany\bwith\bFinancial\bS\frvic\fs\bon\bth\f\b\fquity\bbasis.

to\bth\f\bconsolidat\fd\bfinancial\bstat\fm\fnts.\bTransactions\bb\ftw\f\fn\bth\f\b‘‘Equipm\fnt\bOp\frations’’\band\b‘‘Financial\bS\frvic\fs’’\bhav\f\bb\f\fn\b\fliminat\fd\bto\barriv\f\bat\bth\f

consolidat\fd\bfinancial\bstat\fm\fnts.

66 2

Net Sales and Revenues (MM)

2 013 2 014 2 015

$ 3 7, 7 9 5

$36,067

$28,863

Shareholder Value Added* (SVA) (MM)

2 013 2 014 2 015

$3,390

$2,694 $7 74

About the cover:

“Feet on the Ground” refers to John Deere’s drive for operational excellence and

distinctive levels of quality in all products, including the new 9620RX 4-track

tractor shown. “Eyes on the Horizon” means looking ahead and makin\

g the investments

necessary to help meet the world’s growing need for food, shelter, and infrastructure.

Dividends Declared (U.S. dollars per share)Worldwide net sales and

revenues decreased 20% in

2 015 vs. 2 0 14 mainly due

to lower equipment sales.

Financial Services revenues

rose to $2.59 billion.

6 R O L G S U R Ÿ W V S O X V W K H G L V F L S O L Q H G

use of assets and the skillful

execution of business plans,

yielded another year of positive

SVA performance. SVA represents

R S H U D W L Q J S U R Ÿ W O H V V D Q L P S O L H G

charge for capital.

Deere has boosted its quarterly dividend rate 12 times

since 2004, to the current level of 60 cents per share.

Over this time, the company returned roughly 65%

R I F D V K R Z I U R P H T X L S P H Q W R S H U D W L R Q V W R L Q Y H V W R U V

through dividends and net share repurchases.

1 R Q * $ $ 3 Q D Q F L D O P H D V X U H 6 H H S D J H I R U G H W D L O V

2 013

$ 1. 9 9

Net Income* (MM)

2 013 2 014 2 015

$3,537

$ 3 ,16 2$1,9 4 0

* Net income attributable to Deere & Company.

Net income was down

39% to $ 1. 9 4 billion

but still represented

the sixth-highest total

in company history.

2 015

$2.4 0 2 014

$2.22

Capital Expenditures + Research & Development (MM)

Combined R&D expense and capital expenditures totaled

$2.1 billion, demonstrating Deere’s commitment to advanced

S U R G X F W V Q H Z W H F K Q R O R J L H V D Q G H I F L H Q W P D Q X I D F W X U L Q J

capacity. The lower level of capital spending follows several

years of heavy investment in global production capacity

and cleaner-burning engines.

R&D Spen ding

2 013 2 014 2 015

$2 , 6 0 9

$2,456$2,080

$1,425

$655

Capital Expenditures

$1,477

$1,132 $1,452

$1,004

2 015 IN REVIEW DEERE & COMPANY

SELECTED FINANCIAL DATA

(Dollars in millions except per share amounts)

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

Net sales and revenues................................. $28,863 $36,067 $37,795 $36,157 $32,013 $26,005 $23,112 $28,438 $24,082 $22,148

Net sales ................................................... 25,775 32,961 34,998 33,501 29,466 23,573 20,756 25,803 21,489 19,884

Finance and interest income .......................... 2,381 2,282 2,115 1,981 1,923 1,825 1,842 2,068 2,055 1,777

Research and development expenses ............... 1,425 1,452 1,477 1,434 1,226 1,052 977 943 817 726

Selling, administrative and general expenses . . . . . 2,873 3,284 3,606 3,417 3,169 2,969 2,781 2,960 2,621 2,324

Interest expense.......................................... 680 664 741 783 759 811 1,042 1,137 1,151 1,018

Income from continuing operations* ............... 1,940 3,162 3,537 3,065 2,800 1,865 873 2,053 1,822 1,453

Net income* .............................................. 1,940 3,162 3,537 3,065 2,800 1,865 873 2,053 1,822 1,694

Return on net sales ..................................... 7.5% 9.6% 10.1% 9.1% 9.5% 7.9% 4.2% 8.0% 8.5% 8.5%

Return on beginning Deere & Company stockholders’ equity ................................. 21.4% 30.8% 51.7% 45.1% 44.5% 38.7% 13.4% 28.7% 24.3% 24.7%

Comprehensive income (loss)*........................ 994 2,072 5,416 2,171 2,502 2,079 (1,333) 1,303 2,201 1,795

Income per share from continuing operations – basic* ................... $ 5.81 $ 8.71 $ 9.18 $ 7.72 $ 6.71 $ 4.40 $ 2.07 $ 4.76 $ 4.05 $ 3.11

– diluted*................. 5.77 8.63 9.09 7.63 6.63 4.35 2.06 4.70 4.00 3.08

Net income per share – basic* ....................... 5.81 8.71 9.18 7.72 6.71 4.40 2.07 4.76 4.05 3.63

– diluted*..................... 5.77 8.63 9.09 7.63 6.63 4.35 2.06 4.70 4.00 3.59

Dividends declared per share ......................... 2.40 2.22 1.99 1.79 1.52 1.16 1.12 1.06 .91 .78

Dividends paid per share............................... 2.40 2.13 1.94 1.74 1.41 1.14 1.12 1.03 .85

1⁄2 .74

Average number of common shares outstanding (in millions) – basic......... 333.6 363.0 385.3 397.1 417.4 424.0 422.8 431.1 449.3 466.8

– diluted . . . . . . 336.0 366.1 389.2 401.5 422.4 428.6 424.4 436.3 455.0 471.6

Total assets................................................ $57,948 $61,336 $59,521 $56,266 $48,207 $43,267 $41,133 $38,735 $38,576 $34,720

Trade accounts and notes receivable – net .......3,051 3,278 3,758 3,799 3,295 3,464 2,617 3,235 3,055 3,038

Financing receivables – net............................ 24,809 27,422 25,633 22,159 19,924 17,682 15,255 16,017 15,631 14,004

Financing receivables securitized – net . . . . . . . . . . . . . 4,835 4,602 4,153 3,618 2,905 2,238 3,108 1,645 2,289 2,371

Equipment on operating leases – net............... 4,970 4,016 3,152 2,528 2,150 1,936 1,733 1,639 1,705 1,494

Inventories................................................. 3,817 4,210 4,935 5,170 4,371 3,063 2,397 3,042 2,337 1,957

Property and equipment – net .......................5,181 5,578 5,467 5,012 4,352 3,791 4,532 4,128 3,534 2,764

Short-term borrowings: Equipment operations............................... 465 434 1,080 425 528 85 490 218 130 282

Financial s

ervices ..................................... 7,962 7,585 7,709 5,968 6,324 5,241 3,537 6,621 7,495 5,436

Total.................................................. 8,427 8,019 8,789 6,393 6,852 5,326 4,027 6,839 7,625 5,718

Short-term securitization borrowings: Financial services ..................................... 4,590 4,559 4,109 3,575 2,777 2,209 3,132 1,682 2,344 2,403

Long-term borrowings: Equipment operations............................... 4,461 4,643 4,871 5,445 3,167 3,329 3,073 1,992 1,973 1,969

Financial services ..................................... 19,372 19,738 16,707 17,008 13,793 13,486 14,319 11,907 9,825 9,615

Total.................................................. 23,833 24,381 21,578 22,453 16,960 16,815 17,392 13,899 11,798 11,584

Total Deere & Company stockholders’ equity . . . . . 6,743 9,063 10,266 6,842 6,800 6,290 4,819 6,533 7,156 7,491

Book value per share* .................................. $ 21.29 $ 26.23 $ 27.46 $ 17.64 $ 16.75 $ 14.90 $ 11.39 $ 15.47 $ 16.28 $ 16.48

Capital expenditures .................................... $ 655 $ 1,004 $ 1,132 $ 1,360 $ 1,050 $ 795 $ 767 $ 1,117 $ 1,025 $ 774

Number of employees (at year end) ................. 57,180 59,623 67,044 66,859 61,278 55,650 51,262 56,653 52,022 46,549

* Attributable to Deere & Company.

2015 AR_wrap around cover_final.indd 2 12/30/15 4:00 PM Deer e & C omp an y

One John D eer e P lace

M olin e, I llin ois 612 6 5

( 3 0 9)

7 65 -8 000

www .J o hn D eere .c o m