The following questions pertain solely to 5% senior note due 2022. You may assume that coupon payments are made annually and there were no new issuances or retirements. (a) Is the amount of cash John Deere got at issuance greater than, less than or equal to the amount that it has to pay the lender at maturity? How do you know?

(b) What is the coupon payment for fiscal year 2017? (c) What is the interest expense for fiscal year 2017?

(d) Explain why the amounts in (b) and (c) different in terms of John Deeres economics.

$ 750 $ 105 1,000 200 500 250 300 1,250 750 105 1,000 200 500 250 300 1,250 Equipment Operations U.S. dollar notes and debentures: 4.375% notes due 2019 8-1/2% debentures due 2022 2.60% notes due 2022 6.55% debentures due 2028 5.375% notes due 2029 8.10% debentures due 2030 7.125% notes due 2031 3.90% notes due 2042 Euro notes: Medium-term notes due 2020 2023: (principal 850 - 2017) Other notes Less debt issuance costs Total Financial Services Notes and debentures: Medium-term notes due 2018 2027: (principal $18,678 - 2017, $17,203 - 2016) based on market interest rates of 1.7% - 2017, 2% - 2016 5% senior note due 2022: ($500 principal) Other notes Less debt issuance costs Total Long-term borrowings 990 166 20 5,491 231 21 4,565 18,601 17,434 _502. 519 1,339 1,221 42 36 20,400 19,138 $25,891 $23,703 $ 750 $ 105 1,000 200 500 250 300 1,250 750 105 1,000 200 500 250 300 1,250 Equipment Operations U.S. dollar notes and debentures: 4.375% notes due 2019 8-1/2% debentures due 2022 2.60% notes due 2022 6.55% debentures due 2028 5.375% notes due 2029 8.10% debentures due 2030 7.125% notes due 2031 3.90% notes due 2042 Euro notes: Medium-term notes due 2020 2023: (principal 850 - 2017) Other notes Less debt issuance costs Total Financial Services Notes and debentures: Medium-term notes due 2018 2027: (principal $18,678 - 2017, $17,203 - 2016) based on market interest rates of 1.7% - 2017, 2% - 2016 5% senior note due 2022: ($500 principal) Other notes Less debt issuance costs Total Long-term borrowings 990 166 20 5,491 231 21 4,565 18,601 17,434 _502. 519 1,339 1,221 42 36 20,400 19,138 $25,891 $23,703