DEERE & CO (DE)

CIK: 0000315189. SIC: 3523 Farm Machinery & Equipment. Latest 10-K as of: 2025-12-18.
SIC breadcrumb: Manufacturing > Industrial And Commercial Machinery And Computer Equipment > SIC 3523 Farm Machinery & Equipment
SEC company page: https://www.sec.gov/edgar/browse/?CIK=315189. Latest filing source: 0001104659-25-122321.
Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	45,684,000,000	USD	2025	2025-12-18
Net income	5,027,000,000	USD	2025	2025-12-18
Assets	105,996,000,000	USD	2025	2025-12-18
Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-12-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000315189.json. Derived margins are computed from the extracted annual SEC facts.
Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.
Metric	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue		26,644,000,000	29,738,000,000	37,358,000,000	39,258,000,000	35,540,000,000	44,024,000,000	52,577,000,000	61,251,000,000	51,716,000,000	45,684,000,000
Net income		1,523,900,000	2,159,000,000	2,368,000,000	3,253,000,000	2,751,000,000	5,963,000,000	7,131,000,000	10,166,000,000	7,100,000,000	5,027,000,000
Operating income	3,140,000,000	2,609,000,000	3,574,000,000	4,476,000,000	4,415,000,000	4,305,000,000	8,012,000,000	9,508,000,000	12,958,000,000	9,039,000,000
Diluted EPS		4.81	6.68	7.24	10.15	8.69	18.99	23.28	34.63	25.62	18.50
Assets		57,918,000,000	65,786,000,000	70,108,000,000	73,011,000,000	75,091,000,000	84,114,000,000	90,030,000,000	104,087,000,000	107,320,000,000	105,996,000,000
Liabilities		51,373,700,000	56,211,800,000	58,803,000,000	61,580,000,000	62,147,000,000	65,680,000,000	69,673,000,000	82,201,000,000	84,395,000,000	79,989,000,000
Stockholders' equity		6,520,000,000	9,557,300,000	11,288,000,000	11,413,000,000	12,937,000,000	18,431,000,000	20,262,000,000	21,785,000,000	22,836,000,000	25,950,000,000
Cash and cash equivalents		4,335,800,000	9,334,900,000	3,904,000,000	3,857,000,000	7,066,000,000	8,017,000,000	4,774,000,000	7,458,000,000	7,324,000,000	8,276,000,000
Net margin		5.72%	7.26%	6.34%	8.29%	7.74%	13.54%	13.56%	16.60%	13.73%	11.00%
Operating margin		9.79%	12.02%	11.98%	11.25%	12.11%	18.20%	18.08%	21.16%	17.48%
Financial Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
Latest 10-K MD&A

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2025-12-18. Report date: 2025-11-02.
MANAGEMENT’S DISCUSSION AND ANALYSIS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of our financial condition and results of operations. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements. All amounts are presented in millions of U.S. dollars, unless otherwise specified. For comparison of 2024 to 2023 results, refer to the “Management’s Discussion and Analysis” section of our 2024 Form 10-K, which is hereby incorporated by reference.





OVERVIEW



Deere & Company is a global leader in the production of agricultural, turf, construction, and forestry equipment and solutions. John Deere Financial provides financing for John Deere equipment, parts, services, and other inputs customers need to run their operations. Our operations are managed through the Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), Construction & Forestry (CF), and Financial Services (FS) operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.

Net Sales and Revenues by Segment in 2025







TRENDS & ECONOMIC CONDITIONS



Industry Sales Outlook for Fiscal 2026

Agriculture and Turf



Construction and Forestry

Company Trends

In 2022, we introduced our Leap Ambitions, a set of focused goals designed to guide the implementation of our Smart Industrial Operating Model. These Ambitions are built upon a foundation of product quality and manufacturing excellence, supported by a best-in-class dealer channel, and enabled by employees dedicated to solving some of the world’s most important problems. To build on our accomplishments and lay the foundation for sustained growth as we move toward 2030, in December 2025 we refined our Ambitions. Our refined Ambitions feature multi-year financial and operational goals, emphasizing the use of our differentiated equipment and service solutions, including automation, autonomy, digitalization, lifecycle solutions, and Solutions as a Service (SaaS).

Deeper integration of technology into equipment to enable customers to do more with less remains a persistent market trend. Customers seek to improve profitability, productivity, and sustainability by selecting our equipment and technology solutions. These technologies are incorporated into customer operations across the varied production systems in which we serve. While we continue to benefit from the adoption of these technologies, revenue from SaaS products did not represent a significant percentage of our revenues in 2025.

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Company Outlook for 2026

●

Large agriculture sales in North America are expected to remain subdued.

●

Small agriculture & turf and construction & forestry sales are expected to improve in 2026.

Agriculture and Turf Outlook for 2026

●

Demand in the U.S. and Canada for large agriculture equipment is expected to decrease further amidst challenging farm fundamentals for row crop farmers, which pressures short-term liquidity. Although the used equipment market is improving, it continues to constrain investments in new machines. These factors are partially offset by strong crop yields and consumption, recent U.S. trade agreements, growing demand for biofuels, and supportive government subsidies.

●

We expect small agricultural and turf equipment sales to be flat to up slightly from 2025 levels in the U.S. and Canada. The dairy and livestock segment continues to generate profits driven by solid beef prices. A modest recovery is anticipated in the turf sector following an inflection in the housing market and growth in the overall economy.

●

In Europe, the industry is forecasted to be flat to up slightly supported by strong dairy margins, a stabilizing interest rate environment, and improving crop yields.

●

Demand in South America is expected to be flat. In Brazil, while soybean and corn acreage is expected to grow, demand is projected to be tempered by high interest rates, strong global crop yields weighing on prices, and uncertainty over global trade policies. In Argentina, equipment demand is anticipated to moderate after robust growth in 2025.

●

Industry sales in Asia are forecasted to be down slightly.

Construction and Forestry Outlook for 2026

●

Industry sales in the U.S. and Canada for earthmoving and compact construction equipment are projected to remain flat to slightly higher, supported by modest growth in construction markets. Record employment levels, strong construction backlogs, and U.S. government infrastructure spending continue to provide a solid foundation for the industry. Moreover, declining interest rates, increased investment in rental fleets, and surging data center construction starts are adding further momentum. These positive drivers are expected to be partially tempered by restrained investments in the private commercial sector.

●

Global forestry markets are expected to be flat.

●

Global roadbuilding markets are forecasted to remain flat at strong levels.

Financial Services Outlook for 2026

















Net Income



Down



(-) Average portfolio



Unfavorable



(-) Prior period special items



Unfavorable



+ Financing spreads



Favorable





Additional Trends

Agricultural Market Business Cycle – The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, government policies, and uncertainty in macroeconomic trends. These factors affect farmers’ income and sentiment which may result in varying demand for our equipment. In 2025, we experienced the following effects due to unfavorable market conditions: lower sales volumes, greater reliance on sales incentives, and elevated receivable write-offs.

Global Trade Policies – During 2025, new tariffs were imposed in the U.S. for imports from a broad range of countries and on certain materials. Several countries also implemented or proposed retaliatory tariffs on imports from the U.S. and introduced additional trade barriers. Trade policies impact us in various ways. We are a net exporter of agriculture and turf equipment from the U.S. Nearly 80% of our domestic sales are assembled in the U.S., with the remaining products imported primarily from Europe, Mexico, India, and Japan. During 2025, incremental import tariffs adversely affected the cost of our products and components and may continue to do so in 2026. In addition, retaliatory tariffs by regions outside the U.S., currently in effect or adopted in the future, may impact the prices and profitability of our exported products. In 2025, the direct impact of incremental tariffs incurred by us was approximately $600, excluding the impact of tariffs on our suppliers and market demand. Trade policies are evolving, causing uncertainty in the agriculture and construction industries. We are actively taking steps to mitigate potential impacts on our business, to the extent possible.

On November 5, 2025, the United States Supreme Court heard oral arguments on tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The court may provide tariff relief and the potential recovery of amounts previously paid. We are monitoring developments in this case and its impact on our future financial statements and business.

Changes in the agricultural market business cycle and global trade policies are driven by factors outside of our control, and as a result we cannot reasonably foresee when these conditions will fully subside.

Legal Proceeding – On January 15, 2025, the Federal Trade Commission (FTC), along with the Attorneys General of the States of Illinois and Minnesota filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division. The Attorneys General of the States of Arizona, Michigan, and Wisconsin joined the lawsuit. The lawsuit alleges monopolization and unfair competition in violation of the federal and state antitrust laws. Plaintiffs seek a permanent injunction and other equitable relief to allow owners of our equipment, as

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well as independent repair providers, access to our repair tools and any other repair resources available to authorized John Deere dealers. We are in preliminary discussions with the FTC with respect to a potential resolution. At this stage, we are unable to estimate the potential impact on our business.

Other Items of Concern and Uncertainties – Other items that could impact our results are:

●

global and regional political conditions, including the ongoing war between Russia and Ukraine and the conflicts in the Middle East

●

shifts in energy, including positions with respect to biofuels, economic, and positions on government subsidies of farming

●

capital market disruptions

●

foreign currency and capital control policies

●

right to repair regulations and legislation

●

weather conditions

●

marketplace pace of adoption and monetization of technologies we have invested in

●

our ability to strengthen our digital capabilities, artificial intelligence, automation, and autonomy

●

changes in demand and pricing for new and used equipment

●

delays or disruptions in our supply chain

●

significant fluctuations in foreign currency exchange rates

●

volatility in the prices of many commodities

●

slower economic growth







CONSOLIDATED RESULTS

2025 compared to 2024

Highlights

●

Net income declined in 2025 compared to 2024, driven by declining market conditions.

●

We continue to focus on structural profitability and strategically investing in solutions that deliver value to our customers.

Net Sales and Revenues

Net Sales (Equipment Operations)

●

Net sales decreased in 2025 primarily due to lower sales volumes driven by declining market conditions (see Business Segment Results).

Net Income (Attributable to Deere & Company)

Diluted Earnings Per Share (EPS) ($ per share)

●

Net income and diluted EPS decreased driven by lower sales.

Other Significant Statement of Consolidated Income Changes

An explanation of the cost of sales to net sales ratio and other significant statements of consolidated income changes follows:

























Deere & Company



2025



2024



% Change



Cost of sales to net sales





72.4%





68.8%



+5



(-) Tariffs



Unfavorable



(-) Lower volumes



Unfavorable



+ Material costs



Favorable



Increased due to higher tariffs and higher overhead costs from production inefficiencies associated with lower volumes, partially offset by reduced material costs and lower employee profit-sharing incentives.























Other income





1,019





1,198



-15



Lower due to a decrease in revenues from certain licenses, reduced investment income, and prior year legal settlements (see Note 4). These items were partially offset by increased extended warranty premiums earned.























Selling, administrative and general expenses





4,663





4,840



-4



Decreased due to lower employee profit-sharing incentives, the favorable impact from Banco John Deere S.A. (BJD) deconsolidation (see Note 4), and prior year employee separation programs' expenses (see Note 4). These items were partially offset by an increase in accrued losses on unresolved legal matters (see Note 4).























Interest expense





3,170





3,348



-5



Decreased due to lower average borrowing rates and lower average borrowings.























Other operating expenses





1,124





1,257



-11



Lower due to higher pension benefits (see Note 9) and foreign exchange gains, partially offset by increased depreciation of equipment on operating leases.























Provision for income taxes





1,259





2,094



-40



Decreased as a result of lower pretax income and the favorable impact of tax special items (see Note 4).







BUSINESS SEGMENT RESULTS

2025 compared to 2024

The equipment operations segment results were impacted by incremental tariffs in 2025. The cost of additional tariffs was included in the “Production Costs” and “Other” categories. Each equipment operations segment experienced lower shipment volumes during 2025. Economic uncertainty, low commodity prices, elevated interest rates in the first half of the year, and higher used inventory levels contributed to lower shipment volumes for large and small agriculture. Decreases in rental purchases, lower levels of multi-family and commercial real estate construction, trade uncertainty, and elevated interest rates in the first half of the year

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contributed to lower shipment volumes for construction equipment. Current period results were impacted by special items (see Note 4).

Production & Precision Agriculture Operations





























2025



2024



% Change



Net sales



$

17,311



$

20,834



-17



Sales volume and other















-17



Price realization















+1



Currency translation















-1



Operating profit





2,671





4,514



-41



Operating margin





15.4%





21.7%











Sales volumes decreased 30% in the U.S. and Canada, partially offset by an increase of 22% in Brazil. Price realization was up 1% in the U.S. and Canada. In Brazil, price realization was up 4% as demand was strong due to higher grower production. Price realization in the rest of the world was down slightly due to moderating market conditions.

Operating profit decreased primarily due to lower sales volumes/ sales mix, partially offset by price realization.

Production & Precision Agriculture Operating Profit

2025 compared to 2024

Small Agriculture & Turf Operations



























2025



2024



% Change



Net sales



$

10,224



$

10,969



-7



Sales volume and other















-8



Price realization















+1



Currency translation



















Operating profit





1,207





1,627



-26



Operating margin





11.8%





14.8%









Sales volumes decreased 17% in the U.S. and Canada, partially offset by an increase of 26% in India and 5% in Europe. Price realization was 1% in the U.S. and Canada and roughly flat outside the U.S. and Canada driven by moderating market conditions.

Operating profit decreased primarily due to lower sales volumes/ sales mix and higher tariffs, partially offset by price realization.

Small Agriculture & Turf Operating Profit

2025 compared to 2024

Construction & Forestry Operations



























2025



2024



% Change



Net sales



$

11,382



$

12,956



-12



Sales volume and other















-10



Price realization















-2



Currency translation



















Operating profit





1,028





2,009



-49



Operating margin





9.0%





15.5%









Sales volumes decreased 15% in the U.S. and Canada and were roughly flat outside the U.S. and Canada. Price realization decreased 3% in the U.S. and Canada due to incremental incentive programs deployed to address pressures from the competitive environment and was flat outside the U.S. and Canada.

Operating profit decreased primarily due to lower sales volumes/ sales mix, unfavorable price realization, and higher tariffs.

Construction & Forestry Operating Profit

2025 compared to 2024

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Financial Services Operations



























2025



2024



% Change



Revenue (including intercompany)



$

6,289



$

6,493



-3



Average balance of receivables and leases excluding BJD















-1



Interest expense





2,923





3,182



-8



Average borrowings















-3



Average borrowing rates















-5



Net income





890





696



+28





The average balance of receivables and leases financed was 5% lower compared to the prior year, primarily due to the deconsolidation of BJD (see Note 4). Revenue also decreased due to a lower average portfolio. Net income increased as a result of special items (see Note 4), lower selling, administrative and general expenses, favorable financing spreads, and a lower provision for credit losses.

Financial Services Net Income

2025 compared to 2024

Special Items

The impact of special items on the segments’ operating profit in 2025 and 2024 is presented below (see Note 4).









































PPA



SAT



CF



FS



Total



2025 Expense (benefit)

































Litigation accrual



$

47



$

24



$

24









$

95



Impairment





28





17





16











61



BJD measurement





















$

(32)





(32)



Total expense (benefit)





75





41





40





(32)





124



2024 Expense (benefit)

































Legal settlements





(17)











(40)











(57)



Impairment











28

















28



Employee-separation programs





77





43





22





10





152



BJD measurement























59





59



Total expense (benefit)





60





71





(18)





69





182



Year over year change



$

15



$

(30)



$

58



$

(101)



$

(58)











BUSINESS SEGMENT RESULTS

2024 compared to 2023

Please refer to the “Management’s Discussion and Analysis” section of our 2024 Form 10-K.





CAPITAL RESOURCES AND LIQUIDITY

2025 compared to 2024

We have access to global markets at a reasonable cost. Sources of liquidity include:

●

cash, cash equivalents, and marketable securities on hand

●

funds from operations

●

the issuance of commercial paper and term debt

●

the securitization of retail notes

●

bank lines of credit

We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We are forecasting lower operating cash flows from equipment operations in 2026 compared with 2025, driven by a decrease in net income adjusted for non-cash provisions, partially offset by higher cash flows generated from inventory reductions.

We operate in multiple industries, which have unique funding requirements. The equipment operations are capital intensive. Historically, these operations have been subject to seasonal variations in financing requirements for inventories and receivables from dealers. The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios.

Key Metrics and Balance Sheet Changes

Cash, Cash Equivalents, and Marketable Securities

●

Cash, cash equivalents, and marketable securities increased to maintain liquidity and improve leverage.

●

See the detailed cash flow discussion in the next section.

Trade Accounts and Notes Receivable – Net

●

Receivables are generated from the sales of goods and services to customers.

●

Limited change driven by flat sales in the second half of the year compared to prior period.

●

3% of receivables were outstanding for periods exceeding 12 months, reflecting a decrease from the prior year.

Financing Receivables and Equipment on Operating Leases

●

The decrease is primarily due to lower retail sales.

●

Acquisition volumes were down 13% compared to the prior period.

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Inventories

●

Inventories increased primarily due to higher CF inventory driven by reduced demand.

Property and Equipment

●

Cash expenditures were $1.3 billion in 2025.

●

Capital expenditures are forecasted to be $1.4 billion in 2026.

Accounts Payable and Accrued Expenses

●

Accounts payable increased due to higher trade payables.

●

Accrued expenses decreased primarily due to lower accrued taxes, employee benefits, and derivative liabilities.

Borrowings

●

Borrowings decreased corresponding with the level of financing receivable and lease portfolios.

Unused Credit Lines

●

The increase in unused credit lines was due to an increase in bank lines of credit.

Financial Services Ratio of Interest-Bearing Debt to Stockholder’s Equity









CASH FLOWS

2025, 2024, and 2023





























2025



2024



2023



Net cash provided by operating activities



$

7,459



$

9,231



$

8,589



Net cash used for investing activities





(2,057)





(6,464)





(8,749)



Net cash provided by (used for) financing activities





(4,579)





(2,717)





2,808



Effect of exchange rate changes on cash, cash equivalents, and restricted cash





77





(37)





31



Net increase in cash, cash equivalents, and restricted cash



$

900



$

13



$

2,679





Cash inflows from operating activities were $7.5 billion in 2025, driven by net income adjusted for non-cash provisions and a decrease in receivables related to sales, partially offset by an other postretirement benefit (OPEB) contribution.

Cash outflows from investing activities were $2.1 billion in 2025. The primary drivers were purchases of property and equipment and investments in equipment on operating leases, partially offset by collections of receivables from unconsolidated affiliates.

Cash outflows from financing activities were $4.6 billion in 2025, due to dividends paid, lower borrowings, and repurchases of common stock.

Cash Returned to Shareholders

Cash returned to shareholders decreased $2.8 billion in 2025 as we managed cash flows through the declining business cycle in accordance with our use-of-cash priorities by decreasing share repurchases.





DEBT RATINGS



To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold our securities. A credit rating agency may change or withdraw ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, reduced access to debt capital markets, and may adversely impact our liquidity.

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The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by us are as follows:



















   

Senior

   



    





Long-Term



Short-Term



Outlook





























Fitch Ratings



A+



F1



Stable

Moody’s Investors Service, Inc.

A1

Prime-1

Stable

Standard & Poor’s

A

A-1

Stable









CONTRACTUAL OBLIGATIONS AND CASH REQUIREMENTS

2026 and Beyond

Our material cash requirements include the following:

Borrowings – As of November 2, 2025, we had $17.2 billion of payments due on borrowings and securitization borrowings in the next year, along with interest payments of $2.3 billion. The securitization borrowing payments are based on the expected liquidation of the retail notes. See Notes 12 and 19 for additional borrowing details. These payments will likely be replaced with new borrowings to finance the receivable and lease portfolio, which is expected to be lower in 2026.

Purchase Obligations – As of November 2, 2025, our outstanding purchase obligations were $6.1 billion, with $4.5 billion payable within one year. These purchase obligations are noncancelable.

Other Cash Requirements – In addition to our contractual obligations, we have the following commitments:

●

capital expenditures of $1.4 billion are planned for 2026

●

expected quarterly cash dividends throughout 2026 (subject to change at the discretion of our Board of Directors)

●

total pension and OPEB contributions in 2026 are expected to be approximately $250

Share repurchases will be considered as a means of deploying excess cash to shareholders once the previously mentioned requirements are met.





CRITICAL ACCOUNTING ESTIMATES





The timely preparation of financial statements requires management to make estimates and assumptions. Those estimates affect reported amounts in these financial statements. Changes in those estimates and assumptions could have a significant effect. The following estimates are the most critical to our financial statements:

●

sales incentives

●

product warranties

●

postretirement benefit obligations

●

allowance for credit losses

●

operating lease residual values

●

income taxes

These items require the most difficult, subjective, or complex judgments. Our accounting policies are described primarily in Note 2 of our consolidated financial statements.

Sales Incentives

We provide sales incentives to dealers. These incentives are offered in two forms:

●

volume bonuses – awarded based on a dealer’s sales volume and performance

●

retail sales incentive programs – discounts or financing programs that are due when the dealer sells the equipment to a retail customer

The estimated cost of these programs is based on:

●

historical data

●

announced and expected incentive programs

●

field inventory levels

●

forecasted sales volumes

At the time a sale is recognized, we record an estimate of the sales incentive costs. The final cost is determined at the end of the volume bonus measurement period or at the time of the retail sale.

There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer. Changes in the mix and types of sales incentive programs affect these estimates, which are reviewed quarterly. Actual cost differences from the original cost estimate are recognized in “Net sales.”

Sales Incentive Accruals

The accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables. The decrease in 2025 resulted from lower sales.

A key assumption of the retail sales incentive accrual is the predictive value of the historical percentage of retail sales incentive costs to retail sales. Over the last five fiscal years, this percent has varied by an average of 1.0%. Holding other assumptions constant, a 1.0% change would have modified the sales incentive accrual by about $106.

Product Warranties

A standard warranty is provided as an assurance that our equipment will function as intended. The standard warranty period varies by product, region, and component.

At the time a sale is recognized, we record an estimate of future warranty costs, based on the following calculation:

●

historical claims rate experience – multiplied by –

●

the estimated population

The historical claims rate is determined by a review of five-year claims costs. The estimated population is based on dealer

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inventories and retail sales. These estimates are reviewed quarterly. Adjustments are also made for current quality developments.

Product Warranty Accruals

The decrease in 2025 is the result of lower sales volumes.

Product warranty accrual estimates are affected by the historical percent of warranty claims costs as a percentage of gross sales. Over the last five fiscal years, the percent has varied plus or minus 0.14%. Holding all other assumptions constant, if this estimated cost experience percent would have increased or decreased 0.14%, the warranty accrual at November 2, 2025, would have changed by approximately $70.

Postretirement Benefit Obligations

The pension and OPEB defined benefit plan obligations and expenses require the use of estimates. The main estimate is the present value of the projected future benefit payments. These future benefit payments extend several decades.

The estimates are based on existing retirement plan provisions. No assumption is made regarding any potential changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts).

The key assumptions used by our actuaries to calculate the estimates include:

●

discount rates

●

health care cost trend rates

●

expected long-term return on plan assets

●

compensation increases

●

retirement rates

●

mortality rates

●

expected contributions

Assumptions are set each year-end. These assumptions are not changed during the year unless there is a significant plan event. Actual results that differ from the assumptions affect future expenses and obligations.

The key pension and OPEB amounts follow:



























2025

2024

2023

Pension and OPEB net benefit



$

(153)



$

(86)



$

(13)



Long-term expected return on pension and OPEB plan assets (as a percent)



6.9





6.8





6.2



Long-term expected return on pension and OPEB plan assets





1,118





1,075



995



Actual return (loss) on pension and OPEB plan assets





1,052





1,962





(395)



Pension assets, net of pension liabilities

2,362



2,003



2,076



OPEB liabilities, net of OPEB assets

541



1,191



1,001





The increase in the 2025 pension and OPEB net benefit was due to an increase in the expected long-term rates of return on pension plan assets.

The effect of hypothetical changes to selected assumptions on our major U.S. retirement benefit plans would be as follows:































November 2, 2025



2026











Increase



Increase







Percentage



(Decrease)



(Decrease)



Assumptions

Change

  

PBO/APBO*

  

Expense

Pensions:



















Discount rate**

+/-.5



$

(474)/524



$

8/20



Expected return on assets



+/-.5









(63)/63



OPEB:



















Discount rate**

+/-.5



(134)/145



(5)/1



Expected return on assets

+/-.5









(14)/14



Health care cost

trend rate**

+/-1.0



255/(223)



31/(36)



*    Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for OPEB plans.

**  Pretax impact on service cost, interest cost, and amortization of gains or losses.



Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the receivable portfolio. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:

●

finance product category

●

market

●

geography

●

credit risk

●

remaining balance

We utilize the following loss forecast models to estimate expected credit losses:

●

Linear regression models are used for large and complex retail customer receivable pools, which represent more than 90% of retail customer receivables. These statistical models utilize independent variables, or predictive features, to estimate lifetime default rates, which are subsequently adjusted for expected recoveries to arrive at lifetime credit loss estimates. Independent variables include credit quality at time of application, remaining account balance, delinquency status, and various economic factors, such as commodity prices, employment levels, and housing data. The economic factors include forward-looking conditions over our reasonable and supportable forecast period.

●

Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools.

●

Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk.

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Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary to arrive at management’s best estimate of expected credit losses.

Allowance for Credit Losses

During 2025, the allowance for credit losses increased, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions.

While we believe our allowance is sufficient to provide for losses over the life of our existing receivable portfolio, different assumptions would result in changes to the allowance for credit losses. Within the retail customer receivable portfolio, credit loss estimates are dependent on a number of factors, including credit quality at time of application, remaining account balances, current delinquency levels, various economic factors, and estimated recoveries on defaulted accounts. Changes in any of these factors could impact our credit losses. Conversely, within the wholesale receivable portfolio, changes in economic conditions have historically had limited impact on credit losses.

Holding all other factors constant, a 10% increase in the linear regression models’ forecasted defaults and a simultaneous 10% decrease in recovery rates would have resulted in a $60 increase to the allowance for credit losses at November 2, 2025.

Operating Lease Residual Values

Equipment on operating leases is depreciated to the estimated residual value over the lease term. The residual values are based on several factors, including:

●

lease term

●

expected hours of usage

●

historical wholesale sales prices

●

return experience

●

intended equipment use

●

market dynamics and trends

●

dealer residual value guarantees

We review residual value estimates during the lease term. Depreciation is adjusted over the remaining lease term if residual estimates are revised. Impairments are recorded when events or circumstances necessitate.

At the end of the majority of leases, the equipment is disposed in the following sequence:

●

The lessee has the option to purchase the equipment for the contractual residual value.

●

The dealer has the option to purchase the equipment.

●

The equipment is sold to a third party at the equipment’s fair value. In this situation, we may record a gain or a loss for the difference between the residual value and the sale price.

Operating Lease Residual Values

Hypothetically, if (a) future market values for this equipment were to decrease 10% from our present estimates, and (b) all the equipment on operating leases were returned to us for remarketing at the end of the lease term, the total unfavorable impact after consideration of dealer residual value guarantees would be approximately $65. This amount would be recognized as higher depreciation expense over the remaining term of the operating leases, or potentially as an impairment.

Income Taxes

We are subject to federal, state, and foreign income taxes, which can be complex. Implementing these tax laws requires significant judgment and interpretation. Changes in tax laws could materially affect our consolidated financial statements. We record our tax positions in the following categories:

●

current taxes

●

deferred taxes

●

uncertain tax positions

Deferred income taxes represent temporary differences between the tax and the financial reporting basis of assets and liabilities. This will result in taxable or deductible amounts in the future. Loss carryforwards and tax credits are significant components of deferred tax asset balances. These assets are reviewed regularly for the following:

●

the likelihood of recoverability from future taxable income

●

reversal of deferred tax liabilities

●

tax planning strategies

Valuation allowances are established when we determine that the deferred tax benefit may not be realized. The recoverability analysis requires significant judgment and relies on estimates. The valuation allowance as of November 2, 2025, was $1.6 billion. Changes in foreign income tax laws, income for certain jurisdictions, or our tax structure could impact the valuation allowance balance.

Some tax positions contain significant uncertainties. These positions may be challenged or disallowed by taxing authorities. If it is likely the position will be disallowed, no tax benefit is recorded. If it is likely the position will be sustained, a tax benefit is recognized. The ultimate resolution could take many years. This may result in a payment that is significantly different from the original estimate.

See Note 8 for further information on income taxes.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled “Overview,” “Trends and Economic Conditions,” and “Notes to Consolidated Financial Statements” relating to future events, expectations, and trends constitute “forward-looking

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statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of our operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, we expressly disclaim any obligation to update or revise our forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

●

the agricultural business cycle, which can be unpredictable and is affected by factors such as farm income, international trade, world grain stocks, crop yields, available farm acres, soil conditions, prices for commodities and livestock, input costs, government farm programs, availability of transport for crops, as well as adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth or a recession, and regional or global liquidity constraints

●

the uncertainty of government policies and actions with respect to the global trade environment including increased and proposed tariffs announced by the U.S. government and retaliatory trade regulations

●

political, economic, and social instability in the geographies in which we operate, including the ongoing war between Russia and Ukraine and the conflicts in the Middle East

●

worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for our equipment

●

rationalization, restructuring, relocation, expansion, and/or reconfiguration of manufacturing and warehouse facilities

●

accurately forecasting customer demand for products and services, and adequately managing inventory

●

uncertainty of our ability to sell products domestically or internationally, manage increased costs of production, absorb or pass on increased pricing, and accurately predict financial results and industry trends

●

availability and price of raw materials, components, and whole goods

●

delays or disruptions in our supply chain

●

changes in climate patterns, unfavorable weather events, and natural disasters

●

suppliers’ and manufacturers’ business practices and compliance with laws applicable to topics such as human rights, safety, environmental, and fair wages

●

higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products and solutions

●

ability to adapt in highly competitive markets, including understanding and meeting customers’ changing expectations

for products and solutions, including delivery and utilization of precision technology

●

the ability to execute business strategies, including our Smart Industrial Operating Model and refined Leap Ambitions

●

dealer practices and their ability to manage new and used inventory, distribute our products, and to provide support and service for precision technology solutions

●

the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes

●

negative claims or publicity that damage our reputation or brand

●

the ability to attract, develop, engage, and retain qualified employees

●

the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge

●

labor relations and contracts, including work stoppages and other disruptions

●

security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products

●

leveraging artificial intelligence and machine learning within our business processes

●

changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign, and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, health and safety, human rights, import / export and trade, labor and employment, product liability, tariffs, tax, telematics, and telecommunications

●

governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy

●

warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations because of the deficient operation of our products

●

investigations, claims, lawsuits, or other legal proceedings, including the lawsuit filed by the Federal Trade Commission (FTC) and the Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota, and Wisconsin alleging that we unlawfully withheld self-repair capabilities from farmers and independent repair providers

●

loss of or challenges to intellectual property rights

Further information concerning us and our businesses, including factors that could materially affect our financial results, is included in our other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of this Annual Report on Form 10-K). There also may be other factors that we cannot anticipate or that are not described herein because we do not currently perceive them to be material.



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SUPPLEMENTAL CONSOLIDATING DATA

The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. Equipment operations represent the enterprise without Financial Services. Equipment operations include Production & Precision Agriculture operations, Small Agriculture & Turf operations, Construction & Forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within Financial Services. Transactions between the equipment operations and Financial Services have been eliminated to arrive at the consolidated financial statements.

Equipment operations and Financial Services participate in different industries. Equipment operations primarily generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial Services finance sales and leases by dealers of new and used equipment that is largely manufactured by equipment operations. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences.





















































































INCOME STATEMENTS







For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023







Unaudited











EQUIPMENT



FINANCIAL



















OPERATIONS



SERVICES



ELIMINATIONS



CONSOLIDATED











2025



2024



2023



2025



2024



2023



2025



2024



2023



2025



2024



2023







Net Sales and Revenues















   













   













   



















Net sales



$

38,917



$

44,759



$

55,565







































$

38,917



$

44,759



$

55,565







Finance and interest income





521





596





636



$

5,768



$

6,035



$

5,055



$

(541)



$

(872)



$

(1,008)





5,748





5,759





4,683



1



Other income





821





1,006





858





521





458





499





(323)





(266)





(354)





1,019





1,198





1,003



2, 3, 4



Total





40,259





46,361





57,059





6,289





6,493





5,554





(864)





(1,138)





(1,362)





45,684





51,716





61,251























































































Costs and Expenses















































































Cost of sales





28,190





30,803





37,739























(31)





(28)





(24)





28,159





30,775





37,715



4



Research and development expenses





2,311





2,290





2,177









































2,311





2,290





2,177







Selling, administrative and general expenses





3,856





3,791





3,611





815





1,059





994





(8)





(10)





(10)





4,663





4,840





4,595



4



Interest expense





372





396





411





2,923





3,182





2,362





(125)





(230)





(320)





3,170





3,348





2,453



1



Interest compensation to Financial Services





414





640





687























(414)





(640)





(687)





















1



Other operating expenses





(29)





133





217





1,439





1,354





1,396





(286)





(230)





(321)





1,124





1,257





1,292



3, 4, 5



Total





35,114





38,053





44,842





5,177





5,595





4,752





(864)





(1,138)





(1,362)





39,427





42,510





48,232























































































Income before Income Taxes





5,145





8,308





12,217





1,112





898





802























6,257





9,206





13,019







Provision for income taxes





1,020





1,887





2,685





239





207





186























1,259





2,094





2,871























































































Income after Income Taxes





4,125





6,421





9,532





873





691





616























4,998





7,112





10,148







Equity in income (loss) of unconsolidated affiliates





(17)





(29)





4





17





5





3





























(24)





7























































































Net Income





4,108





6,392





9,536





890





696





619























4,998





7,088





10,155







Less: Net loss attributable to noncontrolling interests





(29)





(12)





(11)









































(29)





(12)





(11)







Net Income Attributable to Deere & Company



$

4,137



$

6,404



$

9,547



$

890



$

696



$

619





















$

5,027



$

7,100



$

10,166











1 Elimination of intercompany interest income and expense.

2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases (see Note 6).

3 Elimination of income and expenses between equipment operations and Financial Services related to intercompany guarantees of investments in certain international markets.

4 Elimination of intercompany service revenues and fees.

5 Elimination of Financial Services’ lease depreciation expense related to inventory transferred to equipment on operating leases.



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Table of Contents

SUPPLEMENTAL CONSOLIDATING DATA (continued)



























































CONDENSED BALANCE SHEETS







As of November 2, 2025 and October 27, 2024







Unaudited











EQUIPMENT



FINANCIAL



















OPERATIONS



SERVICES



ELIMINATIONS



CONSOLIDATED









    

2025

    

2024



2025

    

2024



2025

    

2024



2025

    

2024







ASSETS





                  





                  





                  





                  































Cash and cash equivalents



$

6,340



$

5,615



$

1,936



$

1,709















$

8,276



$

7,324







Marketable securities



217



125



1,194



1,029











1,411



1,154







Receivables from Financial Services



4,649



3,043











$

(4,649)



$

(3,043)











6



Trade accounts and notes receivable – net



1,316



1,257



5,900



6,225



(1,899)



(2,156)



5,317



5,326



7



Financing receivables – net



88



78



44,487



44,231











44,575



44,309







Financing receivables securitized – net





1





2





6,830





8,721

















6,831





8,723







Other receivables



1,809



2,193



658



427



(64)



(75)



2,403



2,545



7



Equipment on operating leases – net

















7,600





7,451

















7,600





7,451







Inventories



7,406



7,093



















7,406



7,093







Property and equipment – net



8,047



7,546



32



34











8,079



7,580







Goodwill



4,188



3,959



















4,188



3,959







Other intangible assets – net



892



999



















892



999







Retirement benefits



3,181



2,839



94



83



(2)



(1)



3,273



2,921



8



Deferred income taxes



2,507



2,262



46



43



(269)



(219)



2,284



2,086



9



Other assets



2,218



2,194



1,244



715



(1)



(3)



3,461



2,906







Assets held for sale















2,944















2,944







Total Assets



$

42,859



$

39,205



$

70,021



$

73,612



$

(6,884)



$

(5,497)



$

105,996



$

107,320































































LIABILITIES AND STOCKHOLDERS’ EQUITY















































































































LIABILITIES























































Short-term borrowings



$

414



$

911



$

13,382



$

12,622















$

13,796



$

13,533







Short-term securitization borrowings





1





2





6,595





8,429

















6,596





8,431







Payables to Equipment Operations











4,649



3,043



$

(4,649)



$

(3,043)











6



Accounts payable and accrued expenses



12,757



13,534



3,116



3,243



(1,964)



(2,234)



13,909



14,543



7



Deferred income taxes



347



434



356



263



(269)



(219)



434



478



9



Long-term borrowings



8,756



6,603



34,788



36,626











43,544



43,229







Retirement benefits and other liabilities



1,646



2,250



66



105



(2)



(1)



1,710



2,354



8



Liabilities held for sale















1,827















1,827







Total liabilities



23,921



23,734



62,952



66,158



(6,884)



(5,497)



79,989



84,395































































Commitments and contingencies (Note 20)























































Redeemable noncontrolling interest (Note 2)





51





82





























51





82































































STOCKHOLDERS’ EQUITY























































Total Deere & Company stockholders’ equity



25,950



22,836



7,069



7,454



(7,069)



(7,454)



25,950



22,836



10



Noncontrolling interests



6



7



















6



7







Financial Services' equity





(7,069)





(7,454)

















7,069





7,454















10



Adjusted total stockholders' equity



18,887



15,389



7,069



7,454











25,956



22,843







Total Liabilities and Stockholders’ Equity



$

42,859



$

39,205



$

70,021



$

73,612



$

(6,884)



$

(5,497)



$

105,996



$

107,320











6 Elimination of receivables / payables between equipment operations and Financial Services.

7 Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.

8 Reclassification of net pension assets / liabilities.

9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

10 Elimination of Financial Services’ equity.



43

Table of Contents

SUPPLEMENTAL CONSOLIDATING DATA (continued)



















































































STATEMENTS OF CASH FLOWS







For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023







Unaudited











EQUIPMENT



FINANCIAL



















OPERATIONS



SERVICES



ELIMINATIONS



CONSOLIDATED











2025



2024



2023



2025



2024



2023



2025



2024



2023



2025



2024



2023







Cash Flows from Operating Activities















  













  













  



















Net income



$

4,108



$

6,392



$

9,536



$

890



$

696



$

619





















$

4,998



$

7,088



$

10,155







Adjustments to reconcile net income to net cash provided by operating activities:















































































Provision (credit) for credit losses





18





14





7





278





296





(23)























296





310





(16)







Depreciation and amortization





1,280





1,220





1,123





1,082





1,040





1,016



$

(133)



$

(142)



$

(135)





2,229





2,118





2,004



11



Impairments and other adjustments





73





28





18





(32)





97





173























41





125





191







Share-based compensation expense









































151





208





130





151





208





130



12



Distributed earnings of Financial Services





1,368





250





215























(1,368)





(250)





(215)





















13



Provision (credit) for deferred income taxes





(369)





(97)





(959)





81





(197)





169























(288)





(294)





(790)







Changes in assets and liabilities:















































































Receivables related to sales





(91)





(13)





(58)























1,175





434





(4,195)





1,084





421





(4,253)



14, 16



Inventories





(138)





1,011





474























(137)





(223)





(195)





(275)





788





279



15



Accounts payable and accrued expenses





(617)





(1,429)





1,352





109





277





449





257





112





(971)





(251)





(1,040)





830



16



Accrued income taxes payable/receivable





(112)





(218)





8





(24)





95





(31)























(136)





(123)





(23)







Retirement benefits





(814)





(215)





(164)





(51)





(12)





(6)























(865)





(227)





(170)







Other





394





(38)





367





147





40





(51)





(66)





(145)





(64)





475





(143)





252



11, 12, 15



Net cash provided by operating activities





5,100





6,905





11,919





2,480





2,332





2,315





(121)





(6)





(5,645)





7,459





9,231





8,589























































































Cash Flows from Investing Activities















































































Collections of receivables (excluding receivables related to sales)























27,037





26,029





24,128





(557)





(867)





(1,077)





26,480





25,162





23,051



14



Proceeds from maturities and sales of marketable securities





46





99





59





440





733





127























486





832





186







Proceeds from sales of equipment on operating leases























1,917





1,929





1,981























1,917





1,929





1,981







Cost of receivables acquired (excluding receivables related to sales)























(26,623)





(29,152)





(29,229)





283





336





457





(26,340)





(28,816)





(28,772)



14



Acquisitions of businesses, net of cash acquired





(101)











(82)









































(101)











(82)







Purchases of marketable securities





(125)





(209)





(173)





(578)





(846)





(318)























(703)





(1,055)





(491)







Purchases of property and equipment





(1,358)





(1,636)





(1,494)





(2)





(4)





(4)























(1,360)





(1,640)





(1,498)







Cost of equipment on operating leases acquired























(3,053)





(3,464)





(3,234)





185





302





264





(2,868)





(3,162)





(2,970)



15



Decrease (increase) in investment in Financial Services





(10)





4





(870)























10





(4)





870





















17



Decrease (increase) in trade and wholesale receivables























1,161





21





(5,783)





(1,161)





(21)





5,783





















14



Collections of receivables from unconsolidated affiliates





190

















317



































507



















Loans to unconsolidated affiliates























(109)



































(109)



















Collateral on derivatives – net





(1)











(1)





183





413





(11)























182





413





(12)







Other





(90)





(125)





(176)





(61)





(8)





31





3





6





3





(148)





(127)





(142)







Net cash provided by (used for) investing activities





(1,449)





(1,867)





(2,737)





629





(4,349)





(12,312)





(1,237)





(248)





6,300





(2,057)





(6,464)





(8,749)























































































Cash Flows from Financing Activities















































































Net proceeds (payments) in short-term borrowings (original maturities three months or less)





144





28





(113)





(2,683)





(1,884)





4,121























(2,539)





(1,856)





4,008







Change in intercompany receivables/payables





(1,695)





1,459





2,090





1,695





(1,459)





(2,090)











































Proceeds from borrowings issued (original maturities greater than three months)





2,369





159





342





10,792





17,937





15,087























13,161





18,096





15,429







Payments of borrowings (original maturities greater than three months)





(923)





(1,123)





(901)





(11,341)





(12,109)





(7,012)























(12,264)





(13,232)





(7,913)







Repurchases of common stock





(1,138)





(4,007)





(7,216)









































(1,138)





(4,007)





(7,216)







Capital investment from (returned to) Equipment Operations























10





(4)





870





(10)





4





(870)





















17



Dividends paid





(1,720)





(1,605)





(1,427)





(1,368)





(250)





(215)





1,368





250





215





(1,720)





(1,605)





(1,427)



13



Other





(53)





(46)





(7)





(26)





(67)





(66)























(79)





(113)





(73)







Net cash provided by (used for) financing activities





(3,016)





(5,135)





(7,232)





(2,921)





2,164





10,695





1,358





254





(655)





(4,579)





(2,717)





2,808























































































Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash





86





(15)





24





(9)





(22)





7























77





(37)





31























































































Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash





721





(112)





1,974





179





125





705























900





13





2,679







Cash, Cash Equivalents, and Restricted Cash at Beginning of Year





5,643





5,755





3,781





1,990





1,865





1,160























7,633





7,620





4,941







Cash, Cash Equivalents, and Restricted Cash at End of Year



$

6,364



$

5,643



$

5,755



$

2,169



$

1,990



$

1,865





















$

8,533



$

7,633



$

7,620













11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases (see Note 6).

12 Reclassification of share-based compensation expense.

13 Elimination of dividends from Financial Services to the equipment operations, which are included in the equipment operations operating activities.

14 Primarily reclassification of receivables related to the sale of equipment.

15 Reclassification of direct lease agreements with retail customers.

16 Reclassification of sales incentive accruals on receivables sold to Financial Services.

17 Elimination of change in investment from equipment operations to Financial Services.

44

Table of Contents

SELECTED FINANCIAL DATA





































































    2025    



2024



2023



2022



2021



2020



2019



2018



2017



2016

Net sales and revenues



$

45,684



$

51,716



$

61,251



$

52,577



$

44,024



$

35,540



$

39,258



$

37,358



$

29,738



$

26,644



Net sales



38,917



44,759



55,565



47,917



39,737



31,272



34,886



33,351



25,885



23,387



Finance and interest income



5,748



5,759



4,683



3,365



3,296



3,450



3,493



3,107



2,732



2,511



Research and development expenses



2,311



2,290



2,177



1,912



1,587



1,644



1,783



1,658



1,373



1,394



Selling, administrative and general expenses



4,663



4,840



4,595



3,863



3,383



3,477



3,551



3,455



3,098



2,791



Interest expense



3,170



3,348



2,453



1,062



993



1,247



1,466



1,204



899



764



Net income*



5,027



7,100



10,166



7,131



5,963



2,751



3,253



2,368



2,159



1,524



Return on net sales





12.9%





15.9%





18.3%





14.9%





15.0%





8.8%





9.3%





7.1%





8.3%





6.5%



Return on beginning Deere & Company stockholders’ equity





22.0%





32.6%





50.2%





38.7%





46.1%





24.1%





28.8%





24.8%





33.1%





22.6%



Comprehensive income*



5,701



6,508



10,099



6,629



8,963



2,819



2,081



3,222



3,221



627































































































































Net income per share – basic*



$

18.55



$

25.73



$

34.80



$

23.42



$

19.14



$

8.77



$

10.28



$

7.34



$

6.76



$

4.83



  – diluted*



18.50



25.62



34.63



23.28



18.99



8.69



10.15



7.24



6.68



4.81



Dividends declared per share



6.48



5.88



5.05



4.36



3.61



3.04



3.04



2.58



2.40



2.40



Dividends paid per share



6.33



5.76



4.83



4.28



3.32



3.04



2.97



2.49



2.40



2.40



Average number of common shares outstanding (in millions) – basic





270.9



276.0



292.2



304.5



311.6



313.5



316.5



322.6



319.5



315.2



  – diluted



271.7



277.1



293.6



306.3



314.0



316.6



320.6



327.3



323.3



316.6































































































































Total assets



$

105,996



$

107,320



$

104,087



$

90,030



$

84,114



$

75,091



$

73,011



$

70,108



$

65,786



$

57,918



Trade accounts and notes receivable – net



5,317



5,326



7,739



6,410



4,208



4,171



5,230



5,004



3,925



3,011



Financing receivables – net



44,575



44,309



43,673



36,634



33,799



29,750



29,195



27,054



25,104



23,702



Financing receivables securitized – net



6,831



8,723



7,335



5,936



4,659



4,703



4,383



4,022



4,159



5,127



Equipment on operating leases – net



7,600



7,451



6,917



6,623



6,988



7,298



7,567



7,165



6,594



5,902



Inventories



7,406



7,093



8,160



8,495



6,781



4,999



5,975



6,149



3,904



3,341



Property and equipment – net



8,079



7,580



6,879



6,056



5,820



5,817



5,973



5,868



5,068



5,171



Short-term borrowings





13,796





13,533



17,939



12,592



10,919



8,582



10,784



11,062



10,035



6,911



Short-term securitization borrowings





6,596





8,431





6,995





5,711





4,605





4,682





4,321





3,957





4,119





4,998



Long-term borrowings





43,544





43,229



38,477



33,596



32,888



32,734



30,229



27,237



25,891



23,703



Total Deere & Company stockholders’ equity



25,950



22,836



21,785



20,262



18,431



12,937



11,413



11,288



9,557



6,520































































































































Book value per share*



$

95.99



$

84.03



$

77.37



$

67.82



$

59.83



$

41.25



$

36.45



$

35.45



$

29.70



$

20.71



Capital expenditures



$

1,304



$

1,624



$

1,537



$

1,176



$

867



$

762



$

1,084



$

969



$

586



$

668



Number of employees (at year-end)



73,146



75,847



82,956



82,239



75,550



69,634



73,489



74,413



60,476



56,767



*    Attributable to Deere & Company.







45

Table of Contents



FINANCIAL INSTRUMENT MARKET RISK INFORMATION

We are naturally exposed to various interest rate and foreign currency risks. As a result, we enter into derivative transactions to manage this exposure and not for speculative purposes.

From time to time, we enter into interest rate swap agreements to manage our interest rate exposure. We also have entered into derivative agreements related to the management of foreign currency transaction risks.

Interest Rate Risk

Results of Operations – Interest rates volatility impacts us in several ways, primarily affecting the demand for our products, financing spreads for the financial services operations, and the value of our investments.

Fair Value Measurement – Quarterly, we use a combination of cash flow models to assess the sensitivity of our financial instruments with interest rate exposure to changes in market interest rates. The models calculate the effect of adjusting interest rates as follows:

●

cash flows for financing receivables are discounted at the current prevailing rate for each receivable portfolio

●

cash flows for marketable securities are discounted at the applicable benchmark yield curve plus market credit spreads

●

cash flows for unsecured borrowings are discounted at the applicable benchmark yield curve plus market credit spreads for similarly rated borrowers

●

cash flows for securitized borrowings are discounted at the swap yield curve plus a market credit spread for similarly rated borrowers

●

cash flows for interest rate swaps are projected and discounted using forward rates from the swap yield curve at the repricing dates

The net impact on these financial instruments’ fair values, which would be caused by decreasing or increasing the interest rates by 10% from the market rates at November 2, 2025, and October 27, 2024, would have been approximately $150 and $75, respectively.

Foreign Currency Risk

We have foreign currency exposures at some of our foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. We hedge significant currency exposures for our equipment operations. Worldwide foreign currency exposures are reviewed quarterly. Based on the anticipated and committed foreign currency cash inflows, outflows, and hedging policy for the next twelve months, we estimate that a hypothetical 10% strengthening of the U.S. dollar relative to other currencies through 2026 would decrease the 2026 expected net cash inflows by approximately $100. At October 27, 2024, a hypothetical 10% strengthening of the U.S. dollar under similar assumptions and calculations indicated a potential $25 increase in the 2025 net cash inflows. The estimated impacts on net cash outflows and inflows by currency follow:























2026



2025



Australian dollar



$

(75)



$

(75)



Brazilian real





(50)





25



British pound





(50)





(50)



Canadian dollar











25



Euro





50





100



Indian rupee





25









Japanese yen





50





50



Mexican peso





50





25



Polish zloty





(25)





(25)



Swedish krona





(25)









All other





(50)





(50)



Total increase (decrease)



$

(100)



$

25





In addition, in 2025 we entered into a cross-currency interest rate swap designated as a net investment hedge of foreign currency exposure from investments in foreign subsidiaries.

In the financial services operations, our policy is to manage foreign currency risk through hedging strategies if the currency of the borrowing does not match the currency of the receivable portfolio. As a result, a hypothetical 10% adverse change in the value of the U.S. dollar relative to all other foreign currencies would not have a material effect on the financial services cash flows.





46

Table of Contents

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023



























    

2025

            

2024

            

2023

Net Sales and Revenues





















Net sales



$

38,917



$

44,759



$

55,565



Finance and interest income



5,748



5,759



4,683



Other income



1,019



1,198



1,003



Total



45,684



51,716



61,251

























Costs and Expenses





















Cost of sales



28,159



30,775



37,715



Research and development expenses



2,311



2,290



2,177



Selling, administrative and general expenses



4,663



4,840



4,595



Interest expense



3,170



3,348



2,453



Other operating expenses



1,124



1,257



1,292



Total



39,427



42,510



48,232

























Income of Consolidated Group before Income Taxes



6,257



9,206



13,019



Provision for income taxes



1,259



2,094



2,871

























Income of Consolidated Group



4,998



7,112



10,148



Equity in income (loss) of unconsolidated affiliates







(24)



7

























Net Income



4,998



7,088



10,155



Less: Net loss attributable to noncontrolling interests



(29)



(12)



(11)



Net Income Attributable to Deere & Company



$

5,027



$

7,100



$

10,166

























Per Share Data





















Basic



$

18.55



$

25.73



$

34.80



Diluted





18.50





25.62





34.63



Dividends declared





6.48





5.88





5.05



Dividends paid





6.33





5.76





4.83

























Average Shares Outstanding (in millions of shares)





















Basic



270.9



276.0



292.2



Diluted



271.7



277.1



293.6





The notes to consolidated financial statements are an integral part of this statement.



47

Table of Contents

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023



























    

2025

            

2024

            

2023

Net Income



$

4,998



$

7,088



$

10,155

























Other Comprehensive Income (Loss), Net of Income Taxes





















Retirement benefits adjustment



92



(429)



(456)



Cumulative translation adjustment



538



(134)



443



Unrealized gain (loss) on derivatives



18



(64)



(29)



Unrealized gain (loss) on debt securities



31



36



(16)

























Other Comprehensive Income (Loss), Net of Income Taxes



679



(591)



(58)

























Comprehensive Income



5,677



6,497



10,097



Less: Comprehensive loss attributable to noncontrolling interests



(24)



(11)



(2)



Comprehensive Income Attributable to Deere & Company



$

5,701



$

6,508



$

10,099





The notes to consolidated financial statements are an integral part of this statement.



48

Table of Contents

DEERE & COMPANY

CONSOLIDATED BALANCE SHEETS

As of November 2, 2025 and October 27, 2024





















    

2025

                        

2024

ASSETS















Cash and cash equivalents



$

8,276



$

7,324



Marketable securities



1,411



1,154



Trade accounts and notes receivable – net



5,317



5,326



Financing receivables – net



44,575



44,309



Financing receivables securitized – net



6,831



8,723



Other receivables



2,403



2,545



Equipment on operating leases – net



7,600



7,451



Inventories



7,406



7,093



Property and equipment – net



8,079



7,580



Goodwill



4,188



3,959



Other intangible assets – net



892



999



Retirement benefits



3,273



2,921



Deferred income taxes



2,284



2,086



Other assets



3,461



2,906



Assets held for sale









2,944



Total Assets



$

105,996



$

107,320



















LIABILITIES AND STOCKHOLDERS’ EQUITY































LIABILITIES















Short-term borrowings



$

13,796



$

13,533



Short-term securitization borrowings



6,596



8,431



Accounts payable and accrued expenses



13,909



14,543



Deferred income taxes



434



478



Long-term borrowings



43,544



43,229



Retirement benefits and other liabilities



1,710



2,354



Liabilities held for sale









1,827



Total liabilities



79,989



84,395



















Commitments and contingencies (Note 20)















Redeemable noncontrolling interest (Note 2)





51





82



















STOCKHOLDERS’ EQUITY















Common stock, $1 par value (authorized – 1,200,000,000 shares;

issued – 536,431,204 shares in 2025 and 2024), at paid-in amount



5,668



5,489



Common stock in treasury, 266,079,164 shares in 2025 and 264,678,912 shares in 2024, at cost



(36,362)



(35,349)



Retained earnings



59,676



56,402



Accumulated other comprehensive income (loss)



(3,032)



(3,706)



Total Deere & Company stockholders’ equity



25,950



22,836



Noncontrolling interests



6



7



Total stockholders’ equity



25,956



22,843



Total Liabilities and Stockholders’ Equity



$

105,996



$

107,320





The notes to consolidated financial statements are an integral part of this statement.



49

Table of Contents

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023



























    

2025

    

2024

    

2023

Cash Flows from Operating Activities





















Net income



$

4,998



$

7,088



$

10,155



Adjustments to reconcile net income to net cash provided by operating activities:





















Provision (credit) for credit losses



296



310



(16)



Depreciation and amortization



2,229



2,118



2,004



Impairments and other adjustments



41



125



191



Share-based compensation expense



151



208



130



Credit for deferred income taxes



(288)



(294)



(790)



Changes in assets and liabilities:





















Receivables related to sales



1,084



421



(4,253)



Inventories



(275)



788



279



Accounts payable and accrued expenses



(251)



(1,040)



830



Accrued income taxes payable/receivable



(136)



(123)



(23)



Retirement benefits



(865)



(227)



(170)



Other



475



(143)



252



Net cash provided by operating activities



7,459



9,231



8,589

























Cash Flows from Investing Activities





















Collections of receivables (excluding receivables related to sales)



26,480



25,162



23,051



Proceeds from maturities and sales of marketable securities



486



832



186



Proceeds from sales of equipment on operating leases



1,917



1,929



1,981



Cost of receivables acquired (excluding receivables related to sales)



(26,340)



(28,816)



(28,772)



Acquisitions of businesses, net of cash acquired





(101)







(82)



Purchases of marketable securities



(703)



(1,055)



(491)



Purchases of property and equipment



(1,360)



(1,640)



(1,498)



Cost of equipment on operating leases acquired



(2,868)



(3,162)



(2,970)



Collections of receivables from unconsolidated affiliates





507















Loans to unconsolidated affiliates





(109)















Collateral on derivatives – net





182





413





(12)



Other



(148)



(127)



(142)



Net cash used for investing activities



(2,057)



(6,464)



(8,749)

























Cash Flows from Financing Activities





















Net proceeds (payments) in short-term borrowings (original maturities three months or less)



(2,539)



(1,856)



4,008



Proceeds from borrowings issued (original maturities greater than three months)



13,161



18,096



15,429



Payments of borrowings (original maturities greater than three months)



(12,264)



(13,232)



(7,913)



Repurchases of common stock



(1,138)



(4,007)



(7,216)



Dividends paid



(1,720)



(1,605)



(1,427)



Other



(79)



(113)



(73)



Net cash provided by (used for) financing activities



(4,579)



(2,717)



2,808

























Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash



77



(37)



31

























Net Increase in Cash, Cash Equivalents, and Restricted Cash



900



13



2,679



Cash, Cash Equivalents, and Restricted Cash at Beginning of Year



7,633



7,620



4,941



Cash, Cash Equivalents, and Restricted Cash at End of Year



$

8,533



$

7,633



$

7,620

























Components of Cash, Cash Equivalents, and Restricted Cash





















Cash and cash equivalents



$

8,276



$

7,324



$

7,458



Cash, cash equivalents, and restricted cash (Assets held for sale – Note 4)











116









Restricted cash (Other assets)





257





193





162



Total Cash, Cash Equivalents, and Restricted Cash



$

8,533



$

7,633



$

7,620





The notes to consolidated financial statements are an integral part of this statement.



50

Table of Contents

DEERE & COMPANY

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

For the Years Ended October 29, 2023, October 27, 2024, and November 2, 2025





























































Total Stockholders’ Equity





















Deere & Company Stockholders



















   





  





  





  





  

Accumulated

  





  

  











Total





















Other









Redeemable





Stockholders’



Common



Treasury



Retained



Comprehensive



Noncontrolling





Noncontrolling







Equity



Stock



Stock



Earnings



Income (Loss)



Interests





Interest



Balance October 30, 2022



$

20,265



$

5,165



$

(24,094)



$

42,247



$

(3,056)



$

3





$

92



















































Net income (loss)



10,168

















10,166











2







(13)



Other comprehensive income (loss)



(58)























(58)











9



Repurchases of common stock



(7,274)











(7,274)





























Treasury shares reissued



33











33





























Dividends declared



(1,477)

















(1,472)











(5)









Share based awards and other



132





138











(10)











4







9



Balance October 29, 2023



21,789



5,303



(31,335)



50,931



(3,114)



4





97



















































Net income (loss)



7,102

















7,100











2







(14)



Other comprehensive income (loss)



(592)























(592)











1



Repurchases of common stock



(4,044)











(4,044)





























Treasury shares reissued



30











30





























Dividends declared



(1,624)

















(1,622)











(2)









Noncontrolling interest redemption (Note 4)











































(10)



Share based awards and other



182





186











(7)











3







8



Balance October 27, 2024



22,843



5,489



(35,349)



56,402



(3,706)



7





82



















































Net income (loss)



5,029

















5,027











2







(31)



Other comprehensive income



674























674











5



Repurchases of common stock



(1,049)











(1,049)





























Treasury shares reissued



36











36





























Dividends declared



(1,758)

















(1,758)





















Share based awards and other



181





179











5











(3)







(5)



Balance November 2, 2025



$

25,956



$

5,668



$

(36,362)



$

59,676



$

(3,032)



$

6





$

51





The notes to consolidated financial statements are an integral part of this statement.







51

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

















Note Listing

Page

1.

Organization and Consolidation

52

2.

Summary of Significant Accounting Policies and New Accounting Pronouncements

53

3.

Acquisitions and Dispositions

56

4.

Special Items

57

5.

Revenue Recognition

59

6.

Supplemental Cash Flow Information

60

7.

Pension and Other Postretirement Benefits

60

8.

Income Taxes

64

9.

Other Income and Other Operating Expenses

65

10.

Marketable Securities

65

11.

Receivables

66

12.

Securitization of Financing Receivables

70

13.

Inventories

71

14.

Property and Depreciation

71

15.

Goodwill and Other Intangible Assets ‒ Net

71

16.

Other Assets

71

17.

Short-Term Borrowings

72

18.

Accounts Payable and Accrued Expenses

72

19.

Long-Term Borrowings

72

20.

Commitments and Contingencies

73

21.

Capital Stock and Net Income per Share

73

22.

Share-Based Compensation

74

23.

Other Comprehensive Income Items

75

24.

Leases

76

25.

Fair Value Measurements

78

26.

Derivative Instruments

79

27.

Segment Data

81

28.

Subsequent Event

82



1. ORGANIZATION AND CONSOLIDATION

References to “Deere & Company,” “John Deere,” “Deere,” “we,” “us,” or “our” include our consolidated subsidiaries, unless otherwise stated. We manage our business through the following operating segments: Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), Construction & Forestry (CF), and Financial Services (John Deere Financial or FS). References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.

Principles of Consolidation

The consolidated financial statements represent the consolidation of all companies in which Deere & Company has a controlling interest. Certain variable interest entities (VIEs) are consolidated since we are the primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. When we have significant influence in an unconsolidated affiliated company (generally 20% to 50% ownership), we record our investment at cost, adjusted for our share of profit or loss after acquisition, and further reduced for any dividends (equity method of accounting). Other investments (generally less than 20% ownership) are recorded at cost.

Fiscal Year

We use a 52/53 week fiscal year ending on the last Sunday in the reporting period, which generally occurs near the end of October. An additional week is included in the fourth fiscal quarter every five or six years to realign our fiscal quarters with the calendar. Fiscal year 2025 contained 53 weeks compared to 52 weeks in fiscal years 2024 and 2023. The fiscal year ends for 2025, 2024, and 2023 were November 2, 2025, October 27, 2024, and October 29, 2023, respectively. Unless otherwise stated, references to particular years, quarters, or months refer to our fiscal years and the associated periods in those fiscal years.

Presentation of Amounts

All amounts are presented in millions of U.S. dollars, unless otherwise specified. Certain prior period amounts have been reclassified to conform to current period presentation.

Variable Interest Entities

We consolidate certain VIEs related to retail note securitizations (see Note 12).

We have a 50% ownership interest in Banco John Deere S.A. (BJD), an equity method investment that finances retail and wholesale loans for agricultural, construction, and forestry equipment in Brazil. This investment was established in February 2025 through the sale of 50% ownership of a former subsidiary (see Note 3). BJD is a VIE as we provide funding and are exposed to losses that are disproportionate to our voting rights. However, we are not the primary beneficiary of the VIE because the power over significant activities, including the strategic plan, budget, credit policies, and funding guidelines, is shared among equity holders through an equally represented board of directors.

Financial results of BJD are reported in “Equity in income (loss) of unconsolidated affiliates.” The related investment in unconsolidated affiliates is included in “Other assets” on the consolidated balance sheets, while short-term and long-term funding is recorded in receivables from unconsolidated affiliates and included in “Other receivables.”

Our carrying value of receivables from and investments in BJD and maximum exposure to loss at November 2, 2025, follow:

















2025



Receivables from unconsolidated affiliates – “Other receivables”



$

394



Investments in unconsolidated affiliates – “Other assets”





405



Carrying value of assets related to VIE





799



Guarantees





157



Maximum exposure to loss



$

956





Guarantees primarily include BJD debt related to government funding that existed prior to the deconsolidation of BJD. We did not record a contractual liability related to these guarantees on our consolidated balance sheets.

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Argentina

We have equipment operations and financial services operations in Argentina. The U.S. dollar has historically been the functional currency for our Argentina operations, as our business is indexed to the U.S. dollar due to the highly inflationary conditions. Argentine peso-denominated monetary assets and liabilities are remeasured at each balance sheet date using the official currency exchange rate. The Argentine government has currency controls that restrict our ability to pay certain outstanding intercompany payables. As of November 2, 2025, and October 27, 2024, our net investment in Argentina was $833 and $826, respectively. Net sales and revenues from our Argentine operations represented approximately 2% of consolidated net sales and revenues for 2025 and 1% for 2024 and 2023. As of November 2, 2025, and October 27, 2024, the gross peso exposure was $110 and $69, respectively, while the net peso exposure (after considering the impact of short-term hedges) was $40 and $14, respectively. In 2025 and 2024, we invested in U.S. dollar denominated bonds issued by the central bank of Argentina. The bonds are recorded in “Marketable securities” and classified as “International debt securities.” These bonds can be held until maturity or sold in secondary markets outside of Argentina to settle intercompany debt.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS

The following are significant accounting policies in addition to those included in other notes to the consolidated financial statements.

Use of Estimates in Financial Statements

Certain accounting policies require management to make estimates and assumptions in determining the amounts reflected in the financial statements and related disclosures. Actual results could differ from those estimates.

Revenue Recognition

General

Sales of equipment and service parts are recognized when we transfer control of the good to the independent customer, which generally occurs upon shipment. In most situations, the independent customer is a dealer, which subsequently sells the equipment and service parts purchased from us to a retail customer, who can finance the equipment with the financial services segment or another source of financing. In some situations, we sell directly to a retail customer. The term “customer” includes both dealers and retail customers to whom we make direct sales.

Interest-Free Periods and Past-Due Interest

We charge dealers interest on outstanding balances from the earlier of when goods are sold to a retail customer by the dealer or the expiration of the interest-free period granted at the time of the sale to the dealer. Interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one to twelve months for most equipment. Interest-free periods may not be extended. Interest charged may

not be forgiven, and past due interest rates are charged at higher rates. If the interest-free or below market interest rate period exceeds one year, we adjust the expected sales revenue for the effects of the time value of money using a current market interest rate. The revenue related to the financing component is recognized in “Finance and interest income” using the interest method. We do not adjust the sales price to account for a financing component if the expected interest-free or below market period is one year or less.

Right of Return

Generally, no right of return exists on sales of equipment. Dealers cannot cancel purchases after we recognize a sale and are responsible for payment even if the equipment is not sold to a retail customer. Service parts and certain attachment returns are estimable and accrued at the time a sale is recognized. The estimated returns are based on historical return rates, current dealer inventory levels, and current economic conditions. The estimated returns are recorded in “Other assets” for the inventory value of estimated returns, adjusted for restocking fees. The estimated dealer refund liability, adjusted for restocking fees, is recorded in “Accounts payable and accrued expenses.”

Remanufacturing

We remanufacture used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts. Revenue for remanufactured components is recognized using the same criteria as other parts sales. When a remanufactured part is sold, we collect a deposit that is repaid if the customer returns a core that meets certain specifications within a defined time period. The deposit received from the customer is recognized as a liability in “Accounts payable and accrued expenses” and the used component that is expected to be returned is recognized in “Other assets.” When a customer returns a core, the deposit is repaid, the liability reversed, and the returned core is recorded in inventory to be remanufactured and sold to another customer. If a core is not returned within the required time, the deposit is recognized as revenue in “Net sales,” and the cost of the core is recorded as an expense in “Cost of sales.”

Bundled Technology

Certain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities. These technology solutions require hardware, software, and may include an obligation to provide services for a period of time. These solutions are mostly bundled with the sale of the equipment but can also be purchased or renewed separately. The revenue related to the hardware and embedded software is recognized at the time of the equipment sale and recorded in “Net sales.” The revenue for the future services and usage-based software is deferred and recognized over the service period. The deferred revenue is recorded as a contract liability in “Accounts payable and accrued expenses.”

Financing Revenue and Origination Costs

Financing revenue and deferred costs on the origination of financing receivables are recorded over the lives of the related receivables using the interest method. Deferred costs are

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recognized as a reduction to “Finance and interest income.” Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in “Finance and interest income.”

Sales Incentives

We offer sales incentive programs to promote the sale of our products from the dealer to the retail customer. At the time of the sale to a dealer, we record an estimated cost for the sales incentive programs as a reduction to the sales price. The estimated cost is based on historical data, announced and expected incentive programs, field inventory levels, and forecasted sales volumes. The final cost of these programs is determined at the end of the measurement period for volume-based incentives or when the dealer sells the equipment to a retail customer. One type of sales incentive program offered to dealers is pool funds in which we award dealers funds based on new equipment sales. Dealers can use these funds to incentivize sales from the dealer to the end customer. Pool funds, as well as some other incentive programs, are recorded in “Trade accounts and notes receivable – net” when we have the contractual right and the intent to offset against the existing dealer receivables. Actual cost differences from the original cost estimate are recognized in “Net sales.”

Product Warranties

For equipment and service parts sales, we provide a standard warranty. At the time a sale is recognized, the estimated future warranty costs are recorded. The warranty liability is estimated based on historical warranty claims rate experience and the estimated amount of equipment still under warranty. The historical claims rate is primarily determined by a review of five-year claims costs while also taking into consideration current quality developments. The amount of equipment still under warranty is estimated based on dealer inventories and retail sales.

We also offer extended warranty arrangements for purchase at the customer’s option. The premiums for extended warranties are recognized in “Other income” primarily in proportion to the costs expected to be incurred over the contract period. The unamortized extended warranty premiums (deferred revenue) are recorded in “Accounts payable and accrued expenses” (see Note 18).

Sales and Transaction Taxes

We collect and remit taxes for revenue producing transactions as necessary based on various tax laws. These taxes include sales, use, value-added, and some excise taxes. We elected to exclude these taxes from the determination of the sales price. These taxes are not included in revenues.

Contract Costs

Incremental costs of obtaining an equipment revenue contract are recognized as an expense when incurred since the amortization period would be one year or less.

Advertising Costs

Advertising costs are charged to “Selling, administrative and general expenses” as incurred. Advertising costs were $235 in 2025, $230 in 2024, and $244 in 2023.

Depreciation and Amortization

Property and equipment, capitalized software, and other intangible assets are stated at cost less accumulated depreciation or amortization. These assets are depreciated over their estimated useful lives using the straight-line method. Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Property and equipment expenditures for new and upgraded products, increased capacity, and the replacement or major renewal of significant items are capitalized. Expenditures for maintenance, repairs, and minor renewals are charged to expense as incurred.

Cash and Cash Equivalents

We consider investments with purchased maturities of three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes cash and cash equivalents that are restricted from withdrawal or use under the terms of securitization agreements (see Note 12) and cash held to meet governmental and legal requirements. Restricted cash is recorded in “Other assets.”

Marketable Securities

We have investments in debt and equity securities that are recorded in “Marketable securities,” which include investments in debt securities that are more than three months to maturity at the date of purchase. Debt securities are classified as held-to-maturity or available-for-sale at the time of purchase and at each balance sheet date. Most of our debt securities are classified as available-for-sale and are carried at fair value with unrealized gains or losses, net of tax, reported in other comprehensive income. Held-to-maturity securities are carried at amortized cost. Equity securities are carried at fair value with changes in fair value recorded in “Other income.” We generally determine realized gains or losses on sales of investments based on specific identification and include them in “Other income” on the statements of consolidated income (see Notes 10 and 25).

Receivables and Allowances

All financing and trade receivables are reported on the balance sheet at outstanding principal and accrued interest, adjusted for:

●

write-offs

●

allowance for credit losses

●

unamortized deferred fees or costs on originated financing receivables

The allowance is a reduction to the receivable balances, and the provision is recorded in “Selling, administrative and general expenses.” The allowance for credit losses is an estimate of the credit losses expected over the life of our receivable portfolio. Non-performing receivables are included in the estimate of expected credit losses. The allowance is measured on a collective basis for receivables with similar risk characteristics. Receivables that do not share risk characteristics are evaluated on an individual basis. Risk characteristics include:

●

finance product category

●

market

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●

geography

●

credit risk

●

remaining balance

We utilize the following loss forecast models to estimate expected credit losses:

●

Linear regression models are used for large and complex retail customer receivable pools, which represent more than 90% of retail customer receivables. These statistical models utilize independent variables, or predictive features, to estimate lifetime default rates, which are subsequently adjusted for expected recoveries to arrive at lifetime credit loss estimates. Independent variables included in the models vary by product, but can include credit quality at time of application, remaining account balance, delinquency status, and various economic factors, such as commodity prices, employment levels, and housing data. The economic factors include forward-looking conditions over our reasonable and supportable forecast period. In the fourth quarter of 2024, we transitioned from the use of transition matrix models to linear regression models to estimate expected credit losses. This change in methodology did not have a material impact on our consolidated financial statements.

●

Weighted average remaining maturity (WARM) models are used for smaller and less complex retail customer receivable pools.

●

Historical loss rate models are used on wholesale receivables, with consideration of current economic conditions and dealer financial risk.

Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary (see Note 11).

Long-Lived Assets, Goodwill, and Other Intangible Asset Impairment

We evaluate the carrying value of long-lived assets (including equipment on operating leases, property and equipment, goodwill, and other intangible assets) when events or circumstances warrant such a review. If the carrying value of the long-lived asset is considered impaired, the long-lived asset is written down to its fair value (see Notes 4 and 25).

Goodwill and unamortized intangible assets are tested for impairment annually at the end of the third quarter of each fiscal year, and more often if events or circumstances may have caused the fair value to fall below the carrying value. Goodwill is allocated and reviewed for impairment by reporting unit. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with its fair value. If the carrying value of the goodwill is considered impaired, the impairment is measured as the reporting unit’s carrying value minus the fair value. We determined that there was no impairment to goodwill during the annual goodwill impairment review.

Derivative Financial Instruments

It is our policy to use derivative transactions only to manage exposures from the normal course of business. We do not execute derivative transactions for the purpose of creating speculative positions or trading. Our financial services operations have interest rate and foreign currency exposure between (a) the receivable or lease portfolio and (b) how those portfolios are funded. We also have foreign currency exposures at some of our foreign and domestic operations related to buying, selling, and financing in currencies other than the functional currencies. In addition, we have interest rate and foreign currency exposure at certain equipment operations units for sales incentive programs.

All derivatives are recorded at fair value on the consolidated balance sheets. Cash collateral received or paid is not offset against the derivative fair values on the balance sheets. The cash flows from the derivative contracts are recorded in operating activities in the statements of consolidated cash flows. Each derivative is designated as a cash flow hedge, fair value hedge, net investment hedge, or remains undesignated.

Changes in the fair value of derivatives are recorded as follows:

●

Cash flow hedges: Recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. These amounts offset the effects of interest rate changes on the related borrowings in interest expense.

●

Fair value hedges: Recorded in interest expense, and the gains or losses are offset by the fair value gains or losses on the hedged items (fixed-rate borrowings), which are also recorded in interest expense.

●

Net investment hedges: Changes attributable to spot rate changes are recorded in OCI within “Cumulative translation adjustment” to offset the effects of foreign currency changes on the related net investments in foreign subsidiaries. This amount is reclassified to the income statement when the net investment in the foreign subsidiary is sold or substantially liquidated. The interest accrual for periodic cash settlements of cross-currency swaps is recorded in interest expense.

●

Derivatives not designated as hedging instruments: Changes in the fair value of undesignated hedges are recognized as they occur in the income statement.

All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis, the hedging instrument is assessed for its effectiveness. Net investment hedge effectiveness is assessed using the spot method. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued (see Note 26).

Redeemable Noncontrolling Interest

We record redeemable noncontrolling interest at the greater of the redemption fair value or the carrying value of the noncontrolling interest adjusted for income or loss and changes in other

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comprehensive income components. We have a redeemable noncontrolling interest related to the acquisition of Kreisel Electric Inc. (Kreisel) in 2022. The transaction included a call option to purchase the remaining ownership interest in Kreisel in 2027. The minority interest holders also have a put option that would require us to purchase the holders’ ownership interest in 2027. The put and call options cannot be separated from the noncontrolling interest. Due to the redemption features, the minority interest is classified as redeemable noncontrolling interest in our consolidated balance sheets.

Foreign Currency Translation

The functional currencies for most of our foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars using the exchange rates at the end of the period. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI.

Foreign currency gains or losses and foreign exchange components of derivative contracts are included in net income, with trade flow activity recorded in “Cost of sales,” sales incentive activity recorded in “Net sales,” and all other activity recorded in “Other operating expenses.” The pretax net loss for foreign exchange in 2025, 2024, and 2023 was $60, $63, and $159, respectively. Foreign exchange components of net investment derivative contracts are included in OCI within “Cumulative translation adjustment.”

New Accounting Pronouncements Adopted

We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. We adopted the following standards in 2025, none of which had a material effect on our consolidated financial statements:







No. 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures



No. 2023-05 — Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement



No. 2022-03 — Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions





Accounting Pronouncements to be Adopted

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides updated guidance on how to recognize, measure, and present government grants. The ASU will be effective for us beginning with our interim reporting for fiscal year 2030, with early adoption permitted. We are assessing the effect of this update on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which provides updated guidance for the capitalization of internal-use software. The ASU will be effective for us beginning with our interim reporting for fiscal year 2029, with early adoption

permitted. We are assessing the effect of this update on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), which clarifies the effective date of ASU 2024-03. The ASU will be effective for us beginning with our annual reporting for fiscal year 2028 and interim periods thereafter. We are assessing the effect of ASU 2024-03 on our related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash taxes paid both in the U.S. and foreign jurisdictions. The ASU will be effective for us beginning with our annual reporting for fiscal year 2026. We are assessing the effect of this update on our related disclosures.

We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements. All other accounting standards issued but not yet adopted were not applicable to us.







No. 2025-11 — Interim Reporting (Topic 270): Narrow-Scope Improvements



No. 2025-09 — Derivatives and Hedging (Topic 815): Hedge Accounting Improvements



No. 2025-07 — Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract



No. 2025-05 — Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets



No. 2024-04 — Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments



No. 2023-06 — Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative







3. ACQUISITIONS AND DISPOSITIONS

During the presented periods, we completed acquisitions to support our Smart Industrial Operating Model and Leap Ambitions, which focus on advancing our capabilities in technology.

Acquisitions

2025 Acquisitions

In 2025, we acquired several small-scale businesses to advance the capabilities of our existing technology offerings, providing customers with a more comprehensive set of tools to generate and use data to make decisions that aim at improving profitability, efficiency, and sustainability. In addition, we acquired the remaining ownership interest of an equity method investment (see Note 25 for fair value measurement information). The combined

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purchase price consideration for these acquisitions was $115, consisting of $101 cash, net of cash acquired, and $14 loan forgiven. The businesses were assigned to the PPA, SAT, and CF segments. Most of the purchase price for these acquisitions was allocated to goodwill and intangible assets.

2023 Acquisitions

In 2023, we acquired SparkAI Inc. (Spark AI) and Smart Apply, Inc. (Smart Apply) to accelerate the integration of smart technology innovation in our products. The combined cost of these acquisitions was $82, net of cash acquired of $2. Spark AI was assigned to the PPA segment, while Smart Apply was assigned to the SAT segment. Most of the purchase price for these acquisitions was allocated to goodwill.

Dispositions

2025 Disposition

In February 2025, we completed a transaction with Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become a 50% owner of our wholly-owned subsidiary in Brazil, BJD. Bradesco contributed capital directly to BJD. The transaction resulted in the deconsolidation of BJD in the second quarter of 2025. BJD finances retail and wholesale loans for agricultural, construction, and forestry equipment and was included in our financial services segment. BJD was a part of our Brazil operations which is considered an integrated single foreign entity.

We retained a 50% equity interest in BJD, which was valued at the deconsolidation date at $362 based on the completed transaction with Bradesco and its amount of contributed capital. We are accounting for our investment in BJD using the equity method of accounting and results of its operations are reported in “Equity in income (loss) of unconsolidated affiliates” (see Note 1). The related investments in unconsolidated affiliates and receivables from unconsolidated affiliates are reported in “Other assets” and “Other receivables,” respectively, on the consolidated balance sheets.

The major classes of the total assets and liabilities of BJD at the time of deconsolidation were as follows:

















February 2025



Cash and cash equivalents



$

110



Trade accounts and notes receivable – net





119



Financing receivables – net





2,787



Deferred income taxes





33



Other miscellaneous assets





23



Valuation allowance





(65)



Total assets



$

3,007













Short-term borrowings



$

495



Accounts payable and accrued expenses





124



Long-term borrowings





1,241



Retirement benefits and other liabilities





1



Total liabilities



$

1,861













Total intercompany payables



$

781







At the time of deconsolidation, the additional gain or loss was not significant. BJD was reclassified as held for sale in the third quarter of 2024 prior to its deconsolidation.

The decrease in cash and cash equivalents resulting from deconsolidation of BJD was recorded in other investing activities in the statements of consolidated cash flows. See Note 6 for information on non-cash transactions.

2023 Dispositions

In October 2023, we sold our roadbuilding business in Russia. At the time of the sale, total assets were $32, consisting primarily of restricted cash, total liabilities were $1, and the cumulative translation loss was $11. Total proceeds from the sale include $16 of cash and $8 of deferred consideration. A pretax and after-tax loss of $18 was recorded in “Other operating expenses” in the CF segment. As of November 2, 2025, our remaining investments in Russia were not material.

In March 2023, we sold our financial services business in Russia (registered in Russia as a leasing company) to Insight Investment Group. The total proceeds, net of restricted cash sold, were $36. The operations were included in the financial services operating segment through the date of sale. At the disposal date, the total assets were $31, consisting primarily of financing receivables, the total liabilities were $5, and the cumulative translation loss was $10. In the first quarter of 2023, we reversed the allowance for credit losses and recorded a valuation allowance on the assets held for sale in “Selling, administrative and general expenses.” We did not incur additional gains or losses upon disposition.



4. SPECIAL ITEMS

2025 Special Items

Litigation Accrual

In the fourth quarter of 2025, we have increased our total accrued losses on unresolved legal matters in connection with a consolidated multidistrict class action antitrust lawsuit by $95 pretax ($75 after-tax) which was included in “Selling, administrative and general expenses” (see Note 20). The expense was allocated $47 to PPA, $24 to SAT, and $24 to CF.

Impairment

In the third quarter of 2025, we recorded a non-cash impairment charge of $61 pretax ($49 after-tax), primarily related to the trade name and customer relationship assets of our external overseas battery operations. Of this amount, $53 was recorded in “Selling, administrative and general expenses” and $8 in “Cost of sales.” This is presented in “Impairments and other adjustments” in the statements of consolidated cash flows. The loss was allocated $28 to PPA, $17 to SAT, and $16 to CF. The impairment resulted from slowing external demand for batteries, which indicated that it is probable future cash flows would not cover the carrying value of the assets (see Note 25).

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Banco John Deere S.A.

In February 2025, we completed the transaction with Bradesco (see Note 3) for the sale of 50% ownership in BJD. In the first quarter of 2025, a pretax and after-tax gain (reversal of previous losses) of $32 was recorded in “Selling, administrative and general expenses” and presented in “Impairments and other adjustments” in the statements of consolidated income and consolidated cash flows, respectively, related to a decrease in valuation allowance.

Tax Items

In the first quarter of 2025, we recorded favorable net discrete tax items primarily due to tax benefits of $110 related to the realization of foreign net operating losses from the consolidation of certain subsidiaries and $53 from an adjustment to an uncertain tax position of a foreign subsidiary.

2024 Special Items

Legal Settlements

In 2024, we reached legal settlements concerning patent infringement claims. As a result of these settlements, we recognized a total of $57 pretax gain ($45 after-tax) in "Other income," providing a benefit of $17 to PPA and $40 to CF. These settlements resolve the disputes without any admission of liability by the parties involved. We believe that these settlements enhance our ability to protect our intellectual property and reinforce our commitment to innovation and technological advancement.

Impairment

In the fourth quarter of 2024, we recorded a non-cash impairment charge of $28 pretax and after-tax in “Equity in income (loss) of unconsolidated affiliates” for an other than temporary decline in value of an investment recorded in SAT. See Note 25 for fair value measurement information.

Employee-Separation Programs

In the third quarter of 2024, we implemented employee-separation programs for our salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs’ main purpose was to help meet our strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. For the limited voluntary employee-separation programs, the expense was recorded in the period in which the employee irrevocably accepted a separation offer.

In 2024, we recorded $157 pretax expenses ($124 after-tax) related to the programs. The programs’ pretax expenses were as follows:









































PPA



SAT



CF



FS



Total



Employee-Separation Programs:

































Cost of sales



$

21



$

11



$

8









$

40



Research and development expenses





22





9





2











33



Selling, administrative and general expenses





34





23





12



$

10





79



Total operating profit decrease



$

77



$

43



$

22



$

10





152



Non-operating profit expenses*





























5



Total



























$

157



*    Relates primarily to corporate expenses.



Banco John Deere S.A.

In the third quarter of 2024, we reclassified the BJD business as held for sale, including a reversal of $38 in allowance for credit losses. At October 27, 2024, a $97 valuation allowance was recorded on the assets held for sale, which was presented in “Impairments and other adjustments” in the statements of consolidated cash flows. The net impact of these entries was a pretax and after-tax loss of $59 recorded in “Selling, administrative and general expenses.” See Note 25 for fair value measurement information.

Redeemable Noncontrolling Interest

In the third quarter of 2024, we exercised our right to purchase the remaining 20% interest in SurePoint. The arrangement was accounted for as an equity transaction with no gain or loss recorded in the statements of consolidated income.

2023 Special Items

Sale of Russian Roadbuilding Business

In October 2023, we sold our Russian roadbuilding business, recognizing a loss of $18 (pretax and after-tax). The loss was recorded in “Other operating expenses” in the CF segment.

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed us to record a $243 reduction in the provision for income taxes and $47 of interest income.

Financial Services Financing Incentives Correction

In the second quarter of 2023, we corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 pretax ($135 after-tax), was recorded in “Selling, administrative and general expenses” in the second quarter of 2023. Prior period results for Deere & Company were not restated, as the adjustment was considered immaterial to our financial statements.



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5. REVENUE RECOGNITION

Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow:









































PPA



SAT



CF



FS



Total



2025

































Primary geographic markets:

































United States



$

7,753



$

5,282



$

6,489



$

4,450



$

23,974



Canada





1,735





496





743





761





3,735



Western Europe





2,070





2,340





1,955





185





6,550



Central Europe and CIS





832





359





373





11





1,575



Latin America





4,021





453





936





197





5,607



Asia, Africa, Oceania, and Middle East





1,338





1,534





1,154





217





4,243



Total



$

17,749



$

10,464



$

11,650



$

5,821



$

45,684





































Major product lines:

































Production agriculture



$

16,960





















$

16,960



Small agriculture









$

7,215

















7,215



Turf











2,731

















2,731



Construction















$

4,570











4,570



Compact construction

















1,922











1,922



Roadbuilding

















3,552











3,552



Forestry

















1,124











1,124



Financial products





257





134





84



$

5,821





6,296



Other





532





384





398











1,314



Total



$

17,749



$

10,464



$

11,650



$

5,821



$

45,684





































Revenue recognized:

































At a point in time



$

17,311



$

10,249



$

11,494



$

139



$

39,193



Over time





438





215





156





5,682





6,491



Total



$

17,749



$

10,464



$

11,650



$

5,821



$

45,684















































PPA



SAT



CF



FS



Total



2024

































Primary geographic markets:

































United States



$

11,741



$

6,249



$

8,086



$

4,166



$

30,242



Canada





1,818





605





760





717





3,900



Western Europe





2,068





2,203





1,729





189





6,189



Central Europe and CIS





787





284





381





36





1,488



Latin America





3,482





433





1,170





453





5,538



Asia, Africa, Oceania, and Middle East





1,530





1,480





1,128





221





4,359



Total



$

21,426



$

11,254



$

13,254



$

5,782



$

51,716





































Major product lines:

































Production agriculture



$

20,574





















$

20,574



Small agriculture









$

7,693

















7,693



Turf











3,023

















3,023



Construction















$

5,523











5,523



Compact construction

















2,459











2,459



Roadbuilding

















3,641











3,641



Forestry

















1,108











1,108



Financial products





240





131





67



$

5,782





6,220



Other





612





407





456











1,475



Total



$

21,426



$

11,254



$

13,254



$

5,782



$

51,716





































Revenue recognized:

































At a point in time



$

21,059



$

11,084



$

13,137



$

133



$

45,413



Over time





367





170





117





5,649





6,303



Total



$

21,426



$

11,254



$

13,254



$

5,782



$

51,716

















































PPA



SAT



CF



FS



Total



2023

































Primary geographic markets:

































United States



$

13,917



$

7,796



$

9,109



$

3,283



$

34,105



Canada





1,738





687





1,221





641





4,287



Western Europe





2,640





2,824





1,725





132





7,321



Central Europe and CIS





1,218





530





353





36





2,137



Latin America





5,608





707





1,429





453





8,197



Asia, Africa, Oceania, and Middle East





2,166





1,679





1,183





176





5,204



Total



$

27,287



$

14,223



$

15,020



$

4,721



$

61,251





































Major product lines:

































Production agriculture



$

26,450





















$

26,450



Small agriculture









$

10,122

















10,122



Turf











3,505

















3,505



Construction















$

6,842











6,842



Compact construction

















2,451











2,451



Roadbuilding

















3,794











3,794



Forestry

















1,429











1,429



Financial products





219





96





58



$

4,721





5,094



Other





618





500





446











1,564



Total



$

27,287



$

14,223



$

15,020



$

4,721



$

61,251





































Revenue recognized:

































At a point in time



$

26,969



$

14,092



$

14,915



$

111



$

56,087



Over time





318





131





105





4,610





5,164



Total



$

27,287



$

14,223



$

15,020



$

4,721



$

61,251







The “Financial products” category above includes finance and interest income from retail notes related to sales of John Deere equipment to retail customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties.

The ”Other” category includes sales of components to other equipment manufacturers that are included in “Net sales;” revenue earned over time from precision guidance, telematics, and other information enabled solutions; revenue from service performed at company owned dealerships and service centers; gains on disposition of property and businesses; trademark licensing revenue; and other miscellaneous revenue items that are included in “Other income.”

Revenues are assigned to the geographic market based on customer location.

We invoice in advance of recognizing the revenue of certain products and services. These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance, telematic services, and other information enabled solutions. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received but not recognized in revenue was $2,039 and $1,923 at November 2, 2025, and October 27, 2024, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was

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recorded as a contract liability at the beginning of the fiscal year was $654 in 2025, $553 in 2024, and $547 in 2023.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year and the estimated revenue to be recognized by fiscal year at November 2, 2025, follows:













Year



Net Sales and Revenues



2026



$

502



2027





463



2028





353



2029





227



2030





167



Later years





98



Total



$

1,810





As permitted, we elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are for sales to dealers and retail customers for equipment, service parts, repair services, and certain telematics services.



6. SUPPLEMENTAL CASH FLOW INFORMATION

All cash flows from receivables related to sales are included in operating activities. This includes all changes in trade accounts and notes receivables, as well as some financing receivables (see Note 11). Financing receivables that are related to loans on equipment sold by independent dealers are included in investing activities.

During 2025, we issued $2.6 billion and retired $4.4 billion of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).”

Our noncash transactions as a result of the BJD deconsolidation in February 2025 (see Note 3) include the derecognition of total assets (excluding cash and cash equivalents) of $2,897 and total liabilities of $1,861, and the recognition of the investments in unconsolidated affiliates of $362 and receivables from unconsolidated affiliates (BJD intercompany payables) of $781. The decrease in cash and cash equivalents resulting from the deconsolidation of BJD was recorded in other investing activities in the statements of consolidated cash flows. We also had noncash consideration of a loan forgiven related to a 2025 acquisition of the remaining ownership interest of an equity method investment (see Note 3).

Supplemental cash flow information follows:





























2025



2024



2023



Cash paid for interest



$

3,080



$

3,298



$

2,227



Cash paid for income taxes





1,647





2,518





3,578



Inventory transferred to equipment on operating leases





137





223





195



Accounts payable related to purchases of property and equipment





167





208





211









7. PENSION AND OTHER POSTRETIREMENT BENEFITS

We have several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans. These plans cover U.S. employees and certain foreign employees. The measurement date of our plans is October 31. The U.S. salaried qualified pension plan and U.S. salaried and hourly OPEB health care plans are closed to new participants.

The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.”

The components of net periodic pension benefit and the related assumptions consisted of the following:



























2025

    

2024

    

2023

Pensions:





















Service cost

$

252



$

230



$

246



Interest cost



517



545



533



Expected return on plan assets



(1,005)



(967)



(878)



Amortization of actuarial (gain) loss



5



3



(13)



Amortization of prior service cost



39



40



38



Settlements/curtailments



25



38



37



Net benefit



$

(167)



$

(111)



$

(37)



Weighted-average assumptions:





















Discount rates – service cost





4.9%





5.8%





5.2%



Discount rates – interest cost





4.9%





5.7%





5.1%



Rate of compensation increase





4.3%





3.8%





3.8%



Expected long-term rates of return





7.2%





7.0%





6.3%



Interest crediting rate – U.S. cash balance plans





4.2%





4.8%





4.3%





During 2025 and 2024, curtailment expense of $18 and $35, respectively, was recognized related to U.S. hourly employee layoffs. During 2023, a settlement expense of $36 was recognized for the acceleration of actuarial losses related to the transfer of the Canadian pension plan’s defined benefit obligations and related plan assets to an insurance company.

The 2026 net periodic pension benefit is expected to increase by $60 due to changes in discount rates, decreases in amortization of actuarial losses, and the U.S. hourly pension curtailment recognized in 2025, described above.

The components of net periodic OPEB cost and the assumptions related to the cost consisted of the following:



























2025

    

2024

    

2023

OPEB:





















Service cost



$

17



$

17



$

27



Interest cost



158



174



176



Expected return on plan assets



(113)



(108)



(117)



Amortization of actuarial gain



(44)



(54)



(59)



Amortization of prior service credit



(4)



(4)



(3)



Net cost



$

14



$

25



$

24



Weighted-average assumptions:





















Discount rates – service cost





5.7%





6.7%





6.1%



Discount rates – interest cost





5.0%





5.9%





5.4%



Expected long-term rates of return





5.3%





5.6%





5.7%





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The OPEB net periodic cost is expected to decrease by $50 due to an increase in the expected return related to the 2025 U.S. voluntary contribution.

The benefit plan obligations, funded status, and the assumptions related to the obligations at November 2, 2025, and October 27, 2024, follow:



































Pensions



OPEB







2025



2024



2025



2024



Change in benefit obligations:





                



                



              



               



Beginning of year balance



$

(11,077)



$

(9,928)



$

(3,362)



$

(3,029)



Service cost



(252)



(230)



(17)



(17)



Interest cost



(517)



(545)



(158)



(174)



Actuarial gain (loss)



197



(1,097)



(25)



(385)



Benefits paid



752



746



280



263



Health care subsidies















(24)



(22)



Foreign exchange and other



(99)



(23)



(2)



2



End of year balance



(10,996)



(11,077)



(3,308)



(3,362)































Change in plan assets (fair value):



























Beginning of year balance



13,080



12,004



2,171



2,028



Plan assets actual gain (loss)



849



1,703



203



259



Employer contribution



107



96



671



145



Benefits paid



(752)



(746)



(280)



(263)



Foreign exchange and other



74



23



2



2



End of year balance



13,358



13,080



2,767



2,171



Funded status



$

2,362



$

2,003



$

(541)



$

(1,191)































Weighted-average assumptions:



























Discount rates





5.2%





5.1%





5.1%





5.2%



Rate of compensation increase





3.9%





4.3%















Interest crediting rate – U.S. cash balance plans





4.2%





4.1%



















The actuarial gain for pension for 2025 was due to increases in discount rates. The actuarial losses for pension and OPEB for 2024 were due to decreases in discount rates. The actuarial loss for OPEB for 2024 was also impacted by changes to health care assumptions.

The discount rate assumptions used to determine the pension and OPEB obligations for all periods presented were based on hypothetical AA yield curves represented by a series of annualized individual discount rates. These discount rates represent the rates at which our benefit obligations could effectively be settled at the October 31 measurement dates.

The mortality assumptions for the 2025 and 2024 U.S. benefit plan obligations used the tables based on the plan’s mortality experience and the most recent scales issued by the Society of Actuaries. The 2025 and 2024 mortality assumptions included an adjustment to the scale related to COVID for some plans.

The weighted-average annual rates of increase in the per capita cost of covered health care benefits (the health care cost trend rates) for medical and prescription drug claims for pre- and post-65 age groups used to determine the November 2, 2025, and

October 27, 2024, accumulated postretirement benefit obligations were as follows:



















2025



2024



Initial year



18.1% (2025 to 2026)



16.9% (2024 to 2025)



Second year



9.9% (2026 to 2027)



11.5% (2025 to 2026)



Ultimate



4.7% (2034 to 2035)



4.7% (2033 to 2034)





An increase in Medicare Advantage premiums impacted the weighted-average annual rates of increase for the initial year in 2025 and 2024.

Information related to pension plans benefit obligations at November 2, 2025, and October 27, 2024, follows:























2025



2024



Total accumulated benefit obligations for all plans



$

10,424



$

10,441



Plans with accumulated benefit obligation exceeding fair value of plan assets:















Accumulated benefit obligations





1,405





1,405



Fair value of plan assets





983





920



Plans with projected benefit obligation exceeding fair value of plan assets:















Projected benefit obligations





1,542





1,541



Fair value of plan assets





1,021





951





The pension and OPEB amounts recognized in the balance sheet at November 2, 2025, and October 27, 2024, consisted of the following:



































Pensions



OPEB







2025



2024



2025



2024



Noncurrent asset



$

2,883

  

$

2,593



$

390

  

$

328



Less: Current liability



56



66





41





39



Less: Noncurrent liability



465



524



890



1,480



Total



$

2,362



$

2,003



$

(541)



$

(1,191)





The retirement benefits and other liabilities recognized in the balance sheet at November 2, 2025, and October 27, 2024, consisted of the following:























2025



2024



Deferred compensation – current



$

23



$

28



Deferred compensation and other – noncurrent





235





217



Pensions and OPEB – current





97





105



Pensions and OPEB – noncurrent





1,355





2,004



Total



$

1,710



$

2,354





The amounts recognized in accumulated other comprehensive income ‒ pretax at November 2, 2025, and October 27, 2024, consisted of the following:



































Pensions



OPEB







2025



2024



2025



2024



Net actuarial (gain) loss



$

1,953



$

2,011



$

(653)



$

(632)



Prior service cost



272



329



8



2



Total



$

2,225



$

2,340



$

(645)



$

(630)





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Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% of the higher of the market-related value of assets or the benefit obligation, the excess is amortized as a component of net periodic (benefit) cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants.

Contributions

We make any required contributions to the plan assets under applicable regulations and voluntary contributions after evaluating our liquidity position and ability to make tax-deductible contributions. Total contributions to the plans were $778 in 2025 and $241 in 2024, which included both required and voluntary contributions and direct benefit payments. The 2025 contributions include a $520 voluntary contribution to a U.S. OPEB plan. This contribution increased plan assets.

We expect to contribute approximately $100 to our pension plans and approximately $150 to our OPEB plans in 2026. The contributions include voluntary contributions and direct benefit payments from company funds. We have no required contributions to U.S. pension plan assets in 2026 under applicable funding regulations.

Expected Future Benefit Payments

The expected future benefit payments at November 2, 2025, were as follows:





















   Pensions   

  

      OPEB*      

2026



$

750



$

256



2027



727



262



2028



725



267



2029



724



269



2030



718



275



2031 to 2035



3,585



1,321



*    Net of prescription drug group benefit subsidy under Medicare Part D.





Plan Asset Information

The fair values of the pension plan assets at November 2, 2025, follow:



























Total

Level 1

Level 2

Cash and short-term investments



$

275



$

272



$

3



Equity:





















U.S. equity securities



479



468





11



International equity securities and funds



249



241





8



Fixed Income:





















Government and agency securities



1,279



860



419



Corporate debt securities



5,543







5,543



Mortgage-backed securities



254







254



Other investments



55



31



24



Derivative contracts – assets



95



57



38



Derivative interest rate contracts – liabilities



(75)



(3)



(72)



Receivables and payables



(264)



(264)









Securities lending collateral



507









507



Securities lending liability



(507)









(507)



Securities sold short



(107)



(105)





(2)



Total of Level 1 and Level 2 assets





7,783



$

1,557



$

6,226



Investments at net asset value:





















Short-term investments





503















U.S. equity funds





211















International equity funds





259















Fixed income funds





1,593















Real estate funds





316















Hedge funds





481















Private equity





1,037















Venture capital





1,121















Other investments





54















Total net assets



$

13,358

















The fair values of the OPEB health care assets at November 2, 2025, follow:



























Total

Level 1

Level 2

Cash and short-term investments



$

104



$

104









Equity securities





73





67



$

6



Fixed Income:





















Government and agency securities



673



621





52



Corporate debt securities



658









658



Mortgage-backed securities



110









110



Other



(28)



(30)





2



Securities lending collateral



105









105



Securities lending liability



(105)









(105)



Total of Level 1 and Level 2 assets





1,590



$

762



$

828



Investments at net asset value:





















U.S. equity funds





115















International equity funds





75















Fixed income funds





436















Real estate funds





106















Hedge funds





104















Private equity





153















Venture capital





165















Other investments





23















Total net assets



$

2,767

















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Table of Contents



The fair values of the pension plan assets at October 27, 2024, follow:



























Total

Level 1

Level 2

Cash and short-term investments



$

411



$

399



$

12



Equity:





















U.S. equity securities



451



440





11



International equity securities and funds



238



232





6



Fixed Income:





















Government and agency securities



1,250



932



318



Corporate debt securities



4,956







4,956



Mortgage-backed securities



177







177



Other investments



57



36



21



Derivative contracts – assets



130



7



123



Derivative interest rate contracts – liabilities



(161)



(119)



(42)



Receivables, prepaids, and payables



(171)



(171)









Securities lending collateral



662









662



Securities lending liability



(662)









(662)



Securities sold short



(94)



(92)





(2)



Total of Level 1 and Level 2 assets





7,244



$

1,664



$

5,580



Investments at net asset value:





















Short-term investments





492















U.S. equity funds





174















International equity funds





194















Fixed income funds





1,649















Real estate funds





385















Hedge funds





457















Private equity





1,219















Venture capital





1,219















Other investments





47















Total net assets



$

13,080



















The fair values of the OPEB health care assets at October 27, 2024, follow:



























Total

Level 1

Level 2

Cash and short-term investments



$

77



$

77









Fixed Income:





















Government and agency securities



606



561



$

45



Corporate debt securities



551









551



Mortgage-backed securities



92









92



Other





11



7





4



Securities lending collateral



167









167



Securities lending liability



(167)









(167)



Total of Level 1 and Level 2 assets





1,337



$

645



$

692



Investments at net asset value:





















U.S. equity funds





163















International equity funds





84















Fixed income funds





348















Real estate funds





77















Hedge funds





71















Private equity





41















Venture capital





41















Other investments





9















Total net assets



$

2,171

















Investments at net asset value in the preceding tables are measured at fair value using the net asset value per share practical expedient and are not classified in the fair value hierarchy. Fair value measurement levels in the preceding tables are defined in Note 25.

Fair values are determined as follows:

Cash and Short-Term Investments – The investments include (1) cash accounts that are valued based on the account value, which approximates fair value; (2) investments that are valued at quoted prices in the active markets in which the investment trades or using a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data; and (3) investment funds that are valued based on a constant fund net asset value, which is based on quoted prices in the active market in which the investment fund trades, or the fund’s net asset value using the net asset value per share practical expedient (NAV), which is based on the fair value of the underlying securities.

Equity Securities and Funds – The Level 1 investments are determined using quoted prices in the active market in which the equity investment trades. Equity funds are valued using the fund’s NAV, which is based on the fair value of the underlying securities.

Fixed Income Securities and Funds and Other Funds – The securities are valued using either a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds, or they are valued using the quoted prices in the active market in which the fixed income investment trades. Fixed income and other funds are valued using the fund’s NAV, which is based on the fair value of the underlying securities.

Real Estate, Venture Capital, Private Equity, and Hedge Funds – The investments that are structured as limited partnerships are valued at estimated fair value based on their proportionate share of the limited partnership’s fair value that is determined by the respective general partner. These investments are valued using the fund’s NAV, which is based on the fair value of the underlying investments. Valuations may be lagged up to six months. The NAV is adjusted for cash flows (additional investments or contributions, and distributions) and any known substantive valuation changes through year end.

Derivative Instruments – The derivatives are valued using either an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates, or a market approach (quoted prices in the active market in which the derivative instrument trades).

The investment objective for the pension and health care plan assets is to fulfill the projected obligations to the beneficiaries over a long period of time, while meeting our fiduciary responsibilities. The asset allocation policy is the most important decision in managing the assets, and it is reviewed regularly. The asset allocation policy considers our long-term asset class risk/return expectations for each plan since the obligations are long-term in

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nature. The target asset allocations as of November 2, 2025, are as follows:



















Pension



Health Care



    

Assets

    

Assets

Equity



8%



10%



Debt



66%



70%



Real estate



3%



3%



Other investments



23%



17%





The assets are diversified and are managed by professional investment firms as well as by investment professionals who are company employees. As a result of our diversified investment policy, there were no significant concentrations of risk.

A market related value of plan assets is used to calculate the expected return on assets. The market related value recognizes changes in the fair value of pension plan assets systematically over a five-year period. The market related value of the health care plan assets equals fair value.

The expected long-term rate of return on plan assets reflects management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation and for returns in multiple asset classes, while also considering historical returns, asset allocation, and investment strategy. Our approach has emphasized the long-term nature of the return estimate such that the return assumption is not changed significantly unless there are fundamental changes in capital markets that affect our expectations for returns over an extended period of time (i.e., 10 to 20 years). The average annual return of our U.S. pension fund was approximately 7.4% during the past 10 years and approximately 7.7% during the past 20 years.

We have Voluntary Employees’ Beneficiary Association trusts (VEBAs) for the funding of hourly and salary postretirement health care benefits. The future expected asset returns for the VEBAs are lower than the expected return on the other pension and health care plan assets due to investment in a higher proportion of liquid securities. These assets are in addition to the other postretirement health care plan assets that have been funded under Section 401(h) of the U.S. Internal Revenue Code and maintained in a separate account in the John Deere Pension Trust.

Defined Contribution Plans

We maintain separate defined contribution plans, primarily in the U.S. Under the plans, we contribute a percentage of each eligible employee’s compensation. Our contributions and costs under these plans were $333 in 2025, $326 in 2024, and $288 in 2023.

8. INCOME TAXES

We are subject to income taxes in a number of jurisdictions. We determine our income tax provision using the asset and liability method. The provision for income taxes by taxing jurisdiction and by significant component consisted of the following:



























2025

  

2024

  

2023

Current:





             





             





             



U.S.:





















Federal



$

400



$

1,253



$

1,803



State



103



257



386



Foreign



1,044



878



1,472



Total current



1,547



2,388



3,661



Deferred:





















U.S.:





















Federal



(107)



(326)



(485)



State



(10)



(29)



(65)



Foreign



(171)



61



(240)



Total deferred



(288)



(294)



(790)



Provision for income taxes



$

1,259



$

2,094



$

2,871





Based upon the location of our operations, the consolidated income before income taxes in the U.S. in 2025, 2024, and 2023 was $2.7 billion, $5.9 billion, and $7.8 billion, respectively, and in foreign countries was $3.6 billion, $3.3 billion, and $5.2 billion, respectively. Certain foreign operations are branches or partnerships of Deere & Company and are subject to U.S. as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are not directly related.

A comparison of the statutory and effective income tax provision and reasons for related differences follow:



























  

2025

  

2024

  

2023

U.S. federal income tax provision at the U.S. statutory rate (21%)



$

1,314



$

1,933



$

2,734



State and local taxes, net of federal effect





76





179





266



Other impacts of Tax Cuts and Jobs Act of 2017





41





(60)





(58)



Rate differential on foreign subsidiaries



238



89



142



Research and business tax credits



(131)



(99)



(107)



Excess tax benefits on equity compensation





(37)





(35)





(49)



Valuation allowances



12



(46)



9



Unrecognized tax benefits





(34)



70



4



Differences in taxability of foreign earnings





(93)





(43)





(85)



Other – net



(127)





106





15



Provision for income taxes



$

1,259



$

2,094



$

2,871





At November 2, 2025, undistributed profits of subsidiaries outside the U.S. of approximately $8.2 billion are considered indefinitely reinvested. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable.

Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax

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reporting purposes. An analysis of the deferred income tax assets and liabilities at November 2, 2025, and October 27, 2024, follows:



































2025



2024







 Deferred



 Deferred



 Deferred



 Deferred







Tax



Tax



Tax



Tax





Assets

Liabilities

Assets

Liabilities

Accrual for employee benefits



$

300









$

362









Accrual for sales allowances



773









847









Allowance for credit losses



108









93









Amortization of R&D expenditures





1,287











925









Deferred compensation



56









52









Goodwill and other intangible assets









$

132









$

107



Lessee lease transactions





82





75





73





69



Lessor lease transactions











545











449



OPEB – net





190











256









Pension – net









493









394



Share-based compensation



52









50









Tax loss and tax credit carryforwards



1,700









1,564









Tax over book depreciation











171











195



Unearned revenue





151









174







Other items



496



291



337



313



Less: valuation allowances



(1,638)









(1,598)









Total



$

3,557



$

1,707



$

3,135



$

1,527





Deere & Company files a consolidated federal income tax return in the U.S., which includes the wholly-owned financial services subsidiaries. These subsidiaries account for income taxes as if they filed separate income tax returns, with a modification for realizability of certain tax benefits.

At November 2, 2025, tax loss and tax credit carryforwards of $1,700 were available with $1,164 expiring from 2026 through 2045 and $536 with an indefinite carryforward period.

A reconciliation of unrecognized tax benefits at November 2, 2025, October 27, 2024, and October 29, 2023, follows:



























2025

  

2024

  

2023

Beginning of year balance



$

928



$

907



$

891



Increases to tax positions taken during the current year



57



59



68



Increases to tax positions taken during prior years



62



68



164



Decreases to tax positions taken during the current year





(5)





(2)





(3)



Decreases to tax positions taken during prior years



(202)



(99)



(209)



Decreases due to lapse of statute of limitations



(3)



(7)



(10)



Other





(17)





(1)





(4)



Foreign exchange



3



3



10



End of year balance



$

823



$

928



$

907





The amount of unrecognized tax benefits at November 2, 2025, and October 27, 2024, that would impact the effective tax rate if the tax benefits were recognized was $322 and $410, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related

to timing. We expect that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant.

We file our tax returns according to the tax laws of the jurisdictions in which we operate, which includes the U.S. federal jurisdiction and various state and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed the examination of our federal income tax returns for periods prior to 2015. The federal income tax returns for years 2015 to 2020 are currently under examination. Various state and foreign income tax returns also remain subject to examination by taxing authorities.

It is our policy to recognize interest related to income taxes in “Interest expense” and “Finance and interest income” and recognize penalties related to income taxes in “Selling, administrative and general expenses.” Income tax related interest and penalties were not significant in 2025, 2024, or 2023. At November 2, 2025, and October 27, 2024, liabilities for income tax related interest and penalties were not significant.

9. OTHER INCOME AND OTHER OPERATING EXPENSES

The major components of other income and other operating expenses consisted of the following:



























  

2025

  

2024

  

2023

Other income:





            





            





            



Revenues from services



$

238



$

367



$

312



Extended warranty premiums earned





433





310





312



Trademark licensing income





92





88





95



Operating lease disposition gains



9



19



33



Investment income



56



127



29



Other



191



287



222



Total



$

1,019



$

1,198



$

1,003

























Other operating expenses:





















Depreciation of equipment on operating leases



$

925



$

874



$

853



Extended warranty claims



320



340



309



Cost of services



211



248



227



Pension and OPEB benefit, excluding the service cost component





(422)





(333)





(286)



Foreign exchange loss





8





71





122



Other



82



57



67



Total



$

1,124



$

1,257



$

1,292







10. MARKETABLE SECURITIES

We have investments in debt securities classified as held-to-maturity or available-for-sale and equity securities, recorded in “Marketable securities” on the consolidated balance sheets. The purchases, maturities, and sale proceeds for all debt and equity marketable securities during 2025, 2024, and 2023 follow:





























   2025   

  

   2024   

  

   2023   



Purchases



$

703



$

1,055



$

491



Maturities and sale proceeds





486





832





186





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Debt Securities

The amortized cost and fair value of available-for-sale debt securities at the end of 2025 and 2024 follow:





































Gross

Gross









Amortized



Unrealized



Unrealized



Fair





Cost



Gains



Losses



   Value   

2025



























Corporate debt securities



$

521



$

6



$

17



$

510



International debt securities





176





1





3





174



Mortgage-backed securities*



257





1



24



234



Municipal debt securities



115





1





3



113



U.S. government debt securities





330





3





20



313



Total



$

1,399



$

12



$

67



$

1,344































2024



























Corporate debt securities



$

445



$

1



$

23



$

423



International debt securities





169











26





143



Mortgage-backed securities*



193









28



165



Municipal debt securities



78





1





5



74



U.S. government debt securities





377











28



349



Total



$

1,262



$

2



$

110



$

1,154



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



The contractual maturities of available-for-sale debt securities at November 2, 2025, follow:





















Amortized

Fair



Cost

   Value   



Due in one year or less



$

71



$

72



Due after one through five years



381



376



Due after five through 10 years



472



465



Due after 10 years



218



197



Mortgage-backed securities



257



234



Debt securities



$

1,399



$

1,344





Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity.

Proceeds of available-for-sale debt securities sold or matured during 2025, 2024, and 2023 were $486, $619, and $37, respectively. Realized gains, realized losses, and unrealized losses that have been continuous for over twelve months on debt securities were not material in 2025, 2024, and 2023.

Unrealized losses were not recognized in income due to the ability and intent to hold to maturity and recover the unrealized losses. We evaluate investments quarterly for impairment and determine credit losses on available-for-sale debt securities using the specific identification method. There were no allowances for credit losses nor impairment write-downs in the periods presented. The unrealized losses on securities are due to changes in interest rates and market liquidity.

At November 2, 2025, we also had $60 marketable securities classified as held-to-maturity international corporate debt securities that mature in less than one year. We record held-to-

maturity marketable securities at amortized cost, which approximates fair value.

Equity Securities

At November 2, 2025, we also had a $7 investment in an international fixed income fund equity security.

Unrealized gain on equity securities during 2025 and 2024 follows:























    2025    

  

    2024    



Net gain recognized on equity securities









$

88



Less: Net gain on equity securities sold











88



Unrealized gain on equity securities









$











11. RECEIVABLES

Trade Accounts and Notes Receivable

Trade accounts and notes receivable arise from sales of goods and services to dealers. See Note 2 for our revenue recognition policy. We evaluate and assess customers’ creditworthiness on an ongoing basis. Receivables are secured with collateral or other credit enhancements. Trade accounts and notes receivable at the end of 2025 and 2024 follow:





















    2025    

    2024    

Trade accounts and notes receivable:















Production & Precision Agriculture



$

1,673



$

1,532



Small Agriculture & Turf





1,967





1,657



Construction & Forestry



1,677



2,137



Trade accounts and notes receivable – net



$

5,317



$

5,326





These receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry markets. Historically, credit losses have been low. There is not a disproportionate concentration of credit risk with any single customer. On a geographic basis, 48% of our trade accounts and notes receivable are located in the U.S. and Canada at November 2, 2025.

At November 2, 2025, and October 27, 2024, trade accounts and notes receivable balances outstanding greater than 12 months were $172 and $298, respectively.

The allowance for credit losses on trade accounts and notes receivable at November 2, 2025, October 27, 2024, and October 29, 2023, as well as the related activity, follow:





























2025



2024



2023



Beginning of year balance



$

66



$

35



$

36



Provision





10





34





7



Write-offs





(8)





(5)





(8)



Translation adjustments





1





2









End of year balance*



$

69



$

66



$

35



*    Individual allowances were not significant.



The equipment operations sell a significant portion of their trade receivables to financial services. Compensation is provided to financial services at market interest rates.

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Financing Receivables ‒ Overall

Financing receivables originate under the following circumstances:

●

Retail customers purchase (or lease) equipment from a dealer and finance the equipment through John Deere Financial.

●

We sell the equipment to a dealer under trade terms. Trade terms end and the dealer finances the equipment on a wholesale receivable. Shown as wholesale notes in “Financing Receivables – Related to the Sale of Equipment.”

●

A dealer finances the purchase of used equipment through John Deere Financial.

●

We sell (or lease) the equipment directly to a retail customer with terms typically greater than 12 months. Shown as retail notes or sales-type leases in the “Financing Receivables –Related to the Sale of Equipment.”

●

The retail customer utilizes a revolving credit product to finance parts, service, or input costs.

Financing receivables at the end of 2025 and 2024 follow:



































2025



2024



Unrestricted/Securitized

Unrestricted/Securitized



Retail notes:





                



                





                



                



Agriculture and turf



$

25,356



$

5,805



$

25,102



$

7,203



Construction and forestry



5,454



1,216



4,550



1,754



Total



30,810



7,021



29,652



8,957



Wholesale notes



8,274









8,951









Revolving charge accounts



4,872









4,730









Financing leases (direct

and sales-type)



2,923









3,032









Total financing receivables



46,879



7,021



46,365



8,957



Less:



























Unearned finance income:



























Retail notes



1,667



149



1,467



187



Wholesale notes





19











24









Revolving charge accounts





71











76









Financing leases



330









307









Total



2,087



149



1,874



187



Allowance for credit losses



217



41



182



47



Financing receivables – net



$

44,575



$

6,831



$

44,309



$

8,723





Credit risk continues to be evaluated by market, rather than by operating segment. Financing receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry markets. On a geographic basis, 89% of our financing receivables were located in the U.S. and Canada at November 2, 2025. There is no disproportionate concentration of credit risk with any single customer or dealer. We retain as collateral security in the equipment associated with most financing receivables. Theft and physical damage insurance are required for this equipment.

Financing Receivables ‒ Related to the Sale of Equipment

Financing receivables related to the sale of equipment are presented in the operating section of the cash flow statement. The balances at the end of 2025 and 2024 were as follows:























2025



2024

Retail notes*:















Agriculture and turf



$

174



$

376



Construction and forestry





238



271



Total





412



647



Wholesale notes





8,274



8,951



Direct financing and sales-type leases*





228



295



Total financing receivables





8,914





9,893



Less:















Unearned finance income:















Retail notes





27





37



Wholesale notes





19





24



Direct financing and sales-type leases





60



47



Total



106



108



Financing receivables related to our sales of equipment



$

8,808



$

9,785



*    These balances arise from sales and direct financing leases of equipment by company-owned dealers or through direct sales.



Financing Receivables ‒ Contractual Installment Payments

Financing receivable installments, including unearned finance income, at November 2, 2025, and October 27, 2024, were scheduled as follows:



































2025



2024





Unrestricted/Securitized

  

Unrestricted/Securitized

Due in months:



                



                



                



                



0 – 12



$

21,667



$

3,107



$

23,872



$

3,555



13 – 24



9,667



2,043



8,187



2,507



25 – 36



7,313



1,262



6,356



1,702



37 – 48



4,950



529



4,509



918



49 – 60



2,591



75



2,660



266



Thereafter



691



5



781



9



Total



$

46,879



$

7,021



$

46,365



$

8,957





Financing Receivables ‒ Credit Quality Analysis

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

●

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

●

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

●

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

Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured.

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



































November 2, 2025







2025



2024



2023



2022



Retail customer receivables:

  

    

  

    

  

    

  

    

Agriculture and turf:



























Current



$

12,380



$

8,389



$

5,228



$

3,003



30-59 days past due





36





73





59





38



60-89 days past due





14





37





28





13



90+ days past due





1





2











1



Non-performing





41





109





98





57



Construction and forestry:



























Current





3,175





2,038





1,034





463



30-59 days past due





42





47





31





12



60-89 days past due





21





17





12





8



90+ days past due





1





6





3





2



Non-performing





31





94





78





38



Total



$

15,742



$

10,812



$

6,571



$

3,635































Write-offs for the period ended November 2, 2025:



























Agriculture and turf



$

6



$

32



$

34



$

21



Construction and forestry





9





38





29





12



Total



$

15



$

70



$

63



$

33



































November 2, 2025







2021



Prior Years



Revolving Charge Accounts



Total



Retail customer receivables:



























Agriculture and turf:



























Current



$

1,310



$

281



$

4,608



$

35,199



30-59 days past due





15





7





37





265



60-89 days past due





8





2





10





112



90+ days past due





2

















6



Non-performing





30





17





14





366



Construction and forestry:



























Current





130





12





124





6,976



30-59 days past due





4





1





5





142



60-89 days past due





1





1





2





62



90+ days past due











1











13



Non-performing





19





7





1





268



Total



$

1,519



$

329



$

4,801



$

43,409































Write-offs for the period ended November 2, 2025:



























Agriculture and turf



$

9



$

7



$

102



$

211



Construction and forestry





3





3





7





101



Total



$

12



$

10



$

109



$

312











































October 27, 2024







2024



2023



2022



2021



Retail customer receivables:

  

    

  

    

  

    

  

    

Agriculture and turf:



























Current



$

14,394



$

8,305



$

5,191



$

2,833



30-59 days past due





44





101





55





27



60-89 days past due





22





50





21





10



90+ days past due





1





1





1





2



Non-performing





23





91





76





50



Construction and forestry:



























Current





3,100





1,841





1,064





458



30-59 days past due





54





47





25





10



60-89 days past due





25





28





10





7



90+ days past due





1





4





3





1



Non-performing





40





94





67





32



Total



$

17,704



$

10,562



$

6,513



$

3,430































Write-offs for the period ended October 27, 2024:



























Agriculture and turf



$

5



$

33



$

25



$

11



Construction and forestry





9





38





30





11



Total



$

14



$

71



$

55



$

22



































October 27, 2024







2020



Prior Years



Revolving Charge Accounts



Total



Retail customer receivables:



























Agriculture and turf:



























Current



$

992



$

253



$

4,465



$

36,433



30-59 days past due





11





4





40





282



60-89 days past due





8





2





13





126



90+ days past due























5



Non-performing





20





13





15





288



Construction and forestry:



























Current





102





45





114





6,724



30-59 days past due





3





2





4





145



60-89 days past due





2











2





74



90+ days past due























9



Non-performing





9





5





1





248



Total



$

1,147



$

324



$

4,654



$

44,334































Write-offs for the period ended October 27, 2024:



























Agriculture and turf



$

11



$

5



$

87



$

177



Construction and forestry





5





3





8





104



Total



$

16



$

8



$

95



$

281





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























2025



2024



Wholesale receivables:









  

    



Agriculture and turf:















Current



$

6,731



$

7,568



30+ days past due















Non-performing











1



Construction and forestry:















Current





1,524





1,358



30+ days past due















Non-performing















Total



$

8,255



$

8,927





Financing Receivables ‒ Allowance for Credit Losses

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



































Retail Notes



Revolving













& Financing



Charge



Wholesale







Leases

Accounts

Receivables



    Total   

2025









               











Allowance:



























Beginning of year balance



$

219



$

8



$

2



$

229



Provision





217





67











284



Write-offs



(202)



(110)







(312)



Recoveries



15



42









57



End of year balance*



$

249



$

7



$

2



$

258































Financing receivables:



























End of year balance



$

38,608



$

4,801



$

8,255



$

51,664

































2024







               









Allowance:



























Beginning of year balance



$

172



$

21



$

4



$

197



Provision





262





52











314



Provision reversal for assets held for sale





(38)

















(38)



Provision subtotal



224



52







276



Write-offs



(186)



(95)







(281)



Recoveries



13



30









43



Translation adjustments



(4)









(2)



(6)



End of year balance*



$

219



$

8



$

2



$

229































Financing receivables:



























End of year balance



$

39,680



$

4,654



$

8,927



$

53,261

































2023



























Allowance:



























Beginning of year balance



$

299



$

22



$

4



$

325



Provision





97





22











119



Provision reversal for assets held for sale



(142)















(142)



Provision (credit) subtotal



(45)



22







(23)



Write-offs



(84)



(45)







(129)



Recoveries



21



22









43



Translation adjustments



(19)













(19)



End of year balance*



$

172



$

21



$

4



$

197































Financing receivables:



























End of year balance



$

39,585



$

4,698



$

6,922



$

51,205



*    Individual allowances were not significant.



We monitor the economy as part of the allowance setting process, including potential impacts of the agricultural market business cycle, global trade policies, and interest rates. Adjustments to the allowance are incorporated, as necessary.

The allowance for credit losses on retail notes and financing lease receivables increased in 2025, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions.

During 2024, the financial services business in Brazil met the held for sale criteria, therefore the receivables were reclassified to “Assets held for sale” and the associated allowance for credit losses was reversed. These operations were deconsolidated in the second quarter of 2025 (see Note 3). Excluding the impact of BJD, the allowance for credit losses on retail notes and financing lease receivables increased in 2024, primarily due to higher expected losses on agriculture customer accounts as a result of elevated delinquencies and a decline in market conditions, partially offset by a decrease in the allowance on revolving charge accounts due to write-offs of seasonal financing program accounts and future recoveries expected.

During 2023, the financial services business in Russia met the held for sale criteria. The financing receivables in Russia were reclassified to “Other assets” and the associated allowance for credit losses was reversed. These operations were sold in the second quarter of 2023 (see Note 3). Excluding the portfolio in Russia, the allowance increased in 2023, primarily driven by growth in the retail notes and financing lease portfolios and higher expected losses on turf and construction customer accounts.

Financing receivables analysis metrics follow:























2025



2024



Percent of financing receivables portfolio:















Past-due amounts





1.16%





1.20%



Non-performing





1.23%





1.01%



Allowance for credit losses





0.50%





0.43%



Deposits held as credit enhancements



$

134



$

142









Financing Receivables – Modifications

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

We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty.

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The ending amortized cost and performance of financing receivables modified in 2025 and 2024 were as follows:























2025



2024



Current

$

160



$

78



30-59 days past due





7





1



60-89 days past due





3





2



Non-performing





16





13



Total



$

186



$

94



Percent of financing receivables portfolio





0.36%





0.18%







Modifications offered include payment deferrals, term extensions, or a combination thereof. The weighted-average effects for contract modifications were as follows in months:























2025



2024



Payment deferral





7





8



Term extension





10





10



Combination modifications















Payment deferral





5





4



Term extension





8





7







Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during 2025 and 2024. At November 2, 2025, commitments to provide additional financing to these customers were $23.

Financing Receivables – Troubled Debt Restructurings

Prior to adopting ASU 2022-02, modifications of loans to borrowers experiencing financial difficulty were considered troubled debt restructurings when the significant modification of the receivable resulted in a concession we would not otherwise consider.

The following table quantifies troubled debt restructurings:















    

2023



Number of receivable contracts





209



Pre-modification balance



$

10



Post modification balance





9





Troubled debt restructurings related to retail notes. In 2023, there were no significant troubled debt restructurings that subsequently defaulted and were written off.

Other Receivables

Other receivables at the end of 2025 and 2024 consisted of:





















2025

2024

Taxes receivable



$

1,554



$

1,874

Collateral on derivatives





72





254



Receivables from unconsolidated affiliates





396





3



Other



381



414



Other receivables

$

2,403

$

2,545











12. SECURITIZATION OF FINANCING RECEIVABLES

Our funding strategy includes receivable securitizations, which allows us to receive cash for financing receivables immediately. While these securitization programs are administered in various forms, they are accomplished in the following basic steps:

1.

We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE).

2.

The SPE issues debt to investors. The debt is secured by the financing receivables.

3.

Investors are paid back based on cash receipts from the financing receivables.

As part of Step 1, these receivables are legally isolated from the claims of our general creditors. This ensures cash receipts from the financing receivables are accessible to pay back securitization program investors. The structure of these transactions does not meet the accounting criteria for a sale of receivables. As a result, they are accounted for as secured borrowings. The receivables and borrowings remain on our balance sheet and are separately reported as “Financing receivables securitized – net” and “Short-term securitization borrowings,” respectively. SPEs are consolidated as VIEs when we have the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs.

We offer securitization programs to institutional investors and other financial institutions through public issuances or privately through a revolving credit agreement. At November 2, 2025, the revolving agreement had a financing limit of up to $2,500. At November 2, 2025, $1,563 of securitization borrowings were outstanding under the revolving agreement. In November 2025, the agreement was renewed for one year with a capacity of $2,500.

Restricted cash held by the SPE serves as a credit enhancement. It would be used to satisfy receivable payment deficiencies, if any. The cash restriction is removed either after all secured borrowing payments are made or proportionally as the secured receivables are collected and the borrowing obligations are reduced.

The components of securitization programs were as follows at the end of 2025 and 2024:





















    2025    

    2024    

Financing receivables securitized (retail notes)



$

6,872



$

8,770

Allowance for credit losses



(41)



(47)



Other assets (primarily restricted cash)



171



187



Total restricted securitized assets

$

7,002

$

8,910



















Short-term securitization borrowings



$

6,596



$

8,431



Accrued interest on borrowings



15



14



Total liabilities related to restricted securitized assets

$

6,611

$

8,445





The weighted-average interest rates on short-term securitization borrowings at November 2, 2025, and October 27, 2024, were 4.8% and 5.0%, respectively.

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Although these securitization borrowings are classified as short-term since payment is required if the financing receivables are liquidated early, the payment schedule for these borrowings at November 2, 2025, based on the expected liquidation of the retail notes is as follows: 2026 – $3,428, 2027 – $1,942, 2028 – $1,005, 2029 – $198, 2030 – $29, and later years – $3.



13. INVENTORIES

A majority of inventories owned by us are valued at cost on the “last-in, first-out” (LIFO) basis. If all inventories valued on a LIFO basis had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows at the end of 2025 and 2024:





















2025

2024

Raw materials and supplies

$

3,402

$

3,486

Work-in-process



956



930



Finished goods and parts



5,769



5,364



Total FIFO value



10,127



9,780



Excess of FIFO over LIFO



2,721



2,687



Inventories

$

7,406

$

7,093



Percent valued on LIFO basis



53%





54%







14. PROPERTY AND DEPRECIATION

A summary of property and equipment at November 2, 2025, and October 27, 2024, follows:



























Useful Lives*















(Years)

   2025   

   2024   

Land







$

464



$

390

Buildings and building equipment

22



5,679



5,168



Machinery and equipment

11



7,684



7,125



Dies, patterns, tools, etc.

8



1,995



1,797



All other

5



1,411



1,382



Construction in progress







1,187



1,313



Total at cost







18,420



17,175



Less: accumulated depreciation







(10,341)



(9,595)



Property and equipment – net





$

8,079

$

7,580



*    Weighted-averages



Property and equipment depreciation during 2025, 2024, and 2023 was $934, $898, and $838, respectively.

Property and equipment by geographic location follows:





















2025

2024



U.S.



$

4,198



$

4,132



Germany



1,435



1,271



Other countries



2,446



2,177



Total



$

8,079



$

7,580





15. GOODWILL AND OTHER INTANGIBLE ASSETS – NET

The changes in amounts of goodwill by operating segments were as follows.

































  

PPA

  

SAT

  

CF

  

   Total   

October 29, 2023



$

702



$

363



$

2,835



$

3,900

Translation adjustments and other





(1)





2





58



59



October 27, 2024





701





365





2,893



3,959



Acquisitions (Note 3)





30





24





11





65



Translation adjustments and other





13





4





147



164



November 2, 2025



$

744



$

393



$

3,051



$

4,188





The components of other intangible assets were as follows:





















 2025 

  

 2024 

Customer lists and relationships



$

482



$

508

Technology, patents, trademarks, and other



1,518



1,423



Total at cost



2,000



1,931



Less accumulated amortization:











Customer lists and relationships





(260)





(231)



Technology, patents, trademarks, and other





(848)





(701)



Total accumulated amortization





(1,108)





(932)



Other intangible assets – net

$

892

$

999





Actual amortization expense for the past three years and the estimated amortization expense for the next five years follows:















Year





Amortization



2023





$

169



2024







166



2025







143



Estimated –

2026





140





2027





133





2028





97





2029





80





2030





72









16. OTHER ASSETS

Other assets at November 2, 2025, and October 27, 2024, consisted of the following:





















2025

2024



Operating lease asset (Note 24)



$

317



$

274



Capitalized software, net





470



504



Investments in unconsolidated affiliates





510



122



Deferred charges (including prepaids)





417





412



Derivative assets (Note 26)





393





357



Prepaid taxes





259





238



Parts return asset





156





141



Restricted cash





257





193



Matured lease & repossessed inventory





102





106



Other





580





559



Other Assets



$

3,461



$

2,906





Capitalized software has an estimated useful life of three years. Amortization of these software costs in 2025, 2024, and 2023 was $227, $180, and $144, respectively.



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17. SHORT-TERM BORROWINGS

Short-term borrowings at the end of 2025 and 2024 consisted of:





















2025

2024

Commercial paper

$

4,218

$

4,008

Notes payable to banks





651



377



Finance lease obligations due within one year





39





33



Long-term borrowings due within one year



8,888



9,115



Short-term borrowings



$

13,796



$

13,533







The weighted-average interest rates at the end of 2025 and 2024 were:

















    

2025

    

2024

Short-term borrowings:











Commercial paper

    

4.1%



4.8%

Notes payable to banks



6.9%



11.0%







The decrease in the weighted-average interest rates of notes payable to banks is primarily the result of lower borrowing rates on funding in Argentina.

Worldwide lines of credit totaled $12.2 billion at November 2, 2025, consisting primarily of:

●

a 364-day credit facility agreement of $5.0 billion, expiring in the second quarter of 2026

●

a credit facility agreement of $3.25 billion, expiring in the second quarter of 2028

●

a credit facility agreement of $3.25 billion, expiring in the second quarter of 2030

At November 2, 2025, $7.3 billion of these worldwide lines of credit were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings were considered to constitute utilization. These credit agreements require Capital Corporation and other parts of our business to maintain certain performance metrics and liquidity targets. All requirements in the credit agreements have been met during the periods included in the consolidated financial statements.

18. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at the end of 2025 and 2024 consisted of the following:





















  

2025

  

2024

Accounts payable:















Trade payables

  

$

2,985

  

$

2,698

Dividends payable



443



405



Operating lease liabilities





314





270



Deposits withheld from dealers and merchants





143





152



Payables to unconsolidated affiliates





10





6



Other



191



204



Accrued expenses:















Employee benefits



1,577



1,925



Product warranties





1,259





1,426



Accrued taxes



1,155



1,509



Extended warranty premium



1,202



1,179



Dealer sales incentives





828





996



Unearned revenue (contractual liability)





837





744



Unearned operating lease revenue



534



495



Accrued interest





524





455



Derivative liabilities





389





582



Parts return liability





445





420



Other



1,073



1,077



Accounts payable and accrued expenses

$

13,909

$

14,543





Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $1,892 at November 2, 2025, and $2,121 at October 27, 2024. Other eliminations were made for accrued taxes and other accrued expenses.

19. LONG-TERM BORROWINGS

Long-term borrowings at the end of 2025 and 2024 consisted of:





















  

2025

  

2024

Underwritten term debt:





               





               



U.S. dollar notes and debentures:















6.55% debentures due 2028



$

200



$

200



5.375% notes due 2029



500



500



3.10% notes due 2030





700





700



8.10% debentures due 2030



250



250



4.15% notes due 2030*



498







7.125% notes due 2031



300



300



5.45% notes due 2035



1,250







3.90% notes due 2042



1,250



1,250



2.875% notes due 2049





500





500



3.75% notes due 2050





850





850



5.70% notes due 2055





750









Euro notes:















1.85% notes due 2028 (€600 principal)





694





650



2.20% notes due 2032 (€600 principal)





694





650



1.65% notes due 2039 (€650 principal)





752





704



Serial issuances:















Medium-term notes*



34,041





36,566



Other notes and finance lease obligations



470



265



Less: debt issuance costs and debt discounts





(155)





(156)



Long-term borrowings

$

43,544



$

43,229



*    Includes fair value hedge adjustments related to derivatives.



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The 4.15% notes due 2030 listed above were issued on October 9, 2025, by Deere Funding Canada Corporation (DFCC), an indirect wholly-owned subsidiary. These notes are fully and unconditionally guaranteed on a senior unsecured basis by Deere & Company and, therefore, rank equally with all our outstanding notes and debentures. DFCC financial results were not material to our consolidated financial statements or consolidated results of operations, and as a result, we have elected to exclude summarized financial information.

Medium-term notes due through 2034 are offered by prospectus and issued at fixed and variable rates. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other.

The principal balances and weighted-average interest rates of the 4.15% notes due 2030 and the medium-term notes at the end of 2025 and 2024 follow:





















  

2025

  

2024

4.15% notes due 2030:





               





               



Principal



$

500









Weighted-average interest rate





3.4%









Medium-term notes:





               





               



Principal





34,241



$

37,141



Weighted-average interest rates





4.8%





5.2%







The principal amounts of our long-term borrowings maturing in each of the next five years are as follows: 2026 – $8,921, 2027 – $8,935, 2028 – $9,220, 2029 – $6,556, and 2030 – $4,615. 

20. COMMITMENTS AND CONTINGENCIES

A standard warranty is provided as assurance that the equipment will function as intended. The standard warranty period varies by product and region. At the time a sale is recognized, we record an estimate of future warranty costs based on historical claims rate experience and estimated population under warranty. The reconciliation of the changes in the warranty liability follows:





















    2025    

    2024    

Beginning of year balance

$

1,426

$

1,610

Warranty claims paid



(1,330)



(1,327)



New product warranty accruals



1,148



1,157



Foreign exchange



15



(14)



End of year balance

$

1,259

$

1,426







The costs for extended warranty programs are recognized as incurred. See Note 9 for extended warranty claim costs.

In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment. At the end of 2025, the notional value of these guarantees was $135. We may repossess the equipment collateralizing the receivables. At November 2, 2025, the accrued losses under these agreements were not material. We also had guarantees to a VIE (see Note 1) totaling $157 at the end of 2025.

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $100 at November 2, 2025. The accrued liability for these contingencies was $25 at November 2, 2025.

At November 2, 2025, we had commitments of approximately $415 for the construction and acquisition of property and equipment. Also, at November 2, 2025, we had restricted assets of $323, classified as “Other assets,” which includes restricted cash.

We have commitments to extend credit to customers. The commitments are in the form of lines of credit and other pre-approved credit arrangements. We have the right to cancel or amend the terms of these commitments at any time. These commitments are not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The commitments to extend credit at November 2, 2025, were:

●

$13.3 billion to John Deere dealers

●

$34.2 billion to retail customers

We are subject to various unresolved legal actions. The total accrued losses on unresolved legal matters were approximately $175 as of November 2, 2025 (see Note 4 “Litigation Accrual” item). The accrual is based on management’s best estimate of probable losses as the outcome of litigation is inherently uncertain. We believe the reasonably possible range of losses in excess of the recorded accruals for these unresolved legal actions would not have a material effect on our consolidated financial statements. The most prevalent legal claims relate to:

●

antitrust matters (including class action litigation)

●

product liability (including asbestos-related liability)

●

employment

●

patent

●

trademark





21. CAPITAL STOCK AND NET INCOME PER SHARE

The number of common shares we are authorized to issue is 1.2 billion. The common shares issued at November 2, 2025, October 27, 2024, and October 29, 2023, were 536.4 million. 270.4 million common shares were outstanding at November 2, 2025, with the remainder held in treasury stock.

The number of authorized preferred shares is 9 million. No preferred shares have been issued.

In December 2022, the Board of Directors authorized the repurchase of up to $18.0 billion of common stock. At the end of fiscal year 2025, this repurchase program had $7.9 billion (17.1 million shares based on our fiscal year-end closing NYSE common stock price of $461.63 per share) remaining to be repurchased. Repurchases of our common stock under this plan are made from time to time, at our discretion, and may be made in the open market or in private transactions, under accelerated share repurchase plans or programs pursuant to agreements with third-party financial institutions.

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



























2025

2024

2023

Net income attributable to Deere & Company

$

5,027

$

7,100

$

10,166



Average shares outstanding



270.9



276.0



292.2



Basic per share

$

18.55

$

25.73

$

34.80



Average shares outstanding



270.9



276.0



292.2



Effect of dilutive stock options and unvested restricted stock units



.8



1.1



1.4



Total potential shares outstanding



271.7



277.1



293.6



Diluted per share

$

18.50

$

25.62

$

34.63



Shares excluded as antidilutive



.2



.3



.1









Diluted net income per share reflects the potential dilution that could occur from share-based compensation. The effect of dilutive shares is calculated using the treasury stock method. Potentially dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period.





22. SHARE-BASED COMPENSATION

We grant restricted stock units (RSU) and stock options (collectively, equity incentive awards) to certain employees. RSUs are also granted to nonemployee directors for their services as directors. RSUs consist of service-based, performance/service-based, and market/service-based awards.

The Long-Term Incentive Cash granted to certain employees is accounted for as share-based compensation. This incentive includes a performance metric based, in part, on the price of our shares.

We are authorized to grant shares for equity incentive awards. The outstanding shares authorized were 13.7 million at November 2, 2025. We currently use shares that have been repurchased through our stock repurchase program to satisfy share option exercises and RSU conversions. The stock awards vesting periods and the dividend equivalents earned during the vesting period follow:



















Vesting



Dividend







Period



Equivalents



Stock options



1-3 years



Not included



Service-based RSUs



1-3 years



Included



Performance/service-based RSUs



3 years



Not included



Market/service-based RSUs



3 years



Not included





Stock options expire ten years from the grant date. Performance/service-based awards are subject to a performance metric based on our compound annual revenue growth rate, compared to a benchmark group of companies. Market/service-based awards are subject to a market related metric based on total shareholder return, compared to a benchmark group of companies. The performance/service-based units and market/service-based units award common stock in a range of zero to 200% for each unit granted based on the level of the metric achieved.

The fair value of stock options and RSUs is determined using our closing price on the grant date. The fair value of the

market/service-based RSUs is determined using a Monte Carlo model. Awards are expensed over the shorter of the award vesting period or the employee’s retirement eligibility period. The performance/service-based units’ expense is adjusted quarterly for the probable number of shares to be awarded. We recognize the effect of award forfeitures as an adjustment to compensation expense in the period the forfeiture occurs.

The assumptions used in determining the fair value of the market/service-based RSUs granted in 2025 and 2024 using the Monte Carlo valuation model follow:



















2025



2024



Expected volatility of the Company's stock



28.22%



27.93%



Risk-free interest rate



4.05%



4.17%







The total share-based compensation expense, recognized income tax benefits, and total grant-date fair values of stock options and restricted stock units vested consisted of the following:





























2025



2024



2023



Share-based compensation expense



$

151



$

208



$

130



Income tax benefits





34





34





21



Stock options and restricted stock units vested





174





110





84





At November 2, 2025, there was $89 of total unrecognized compensation cost from share-based compensation arrangements. This compensation is expected to be recognized over a weighted-average period of approximately 1.75 years.

Stock Options

The fair value of each stock option award was estimated on the date of grant using a binomial lattice option valuation model. The assumptions used for the binomial lattice model to determine the fair value of options follow:





















2025

2024

2023

Risk-free interest rate*

4.09%

3.96%

2.68%



Expected dividends



1.4%



1.6%



1.1%



Volatility*



26.0%



27.0%



33.0%



Expected term (in years)*

5.2

5.1

5.1



*    Weighted-averages



The risk-free interest rates are based on U.S. Treasury security yields at the time of grant. Expected volatilities are based on implied volatilities from traded call options on our stock. We use historical data to estimate option exercise behavior representing the weighted-average period that options granted are expected to be outstanding.

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The activity for outstanding stock options at November 2, 2025, and changes during 2025 follow:































  









Remaining



Aggregate









Exercise



Contractual



Intrinsic





Shares



Price*



Term



Value





(thousands)

(per share)

(years)

(millions)

Outstanding at beginning of year

1,476



$

242.41













Granted

169



448.18













Exercised

(530)



145.40













Forfeited

(3)



428.60













Outstanding at end of year

1,112



319.44

5.75

$

158.1



Exercisable at end of year

789



277.80

4.50



145.1



*    Weighted-averages



The amounts related to stock options were as follows in millions of U.S. dollars unless otherwise noted:





























2025



2024



2023



Weighted-average grant date fair value (per share)



$

116.35



$

98.04



$

136.46



Intrinsic value of options exercised





165





125





153



Cash received from exercises





77





44





60



Tax benefit from exercises





35





27





34







Restricted Stock Units

The weighted-average grant date fair values were as follows:





























2025



2024



2023



Service-based



$

448.69



$

377.72



$

428.35



Performance/service-based





429.77





360.53





424.93



Market/service-based





591.13





370.87











Our nonvested RSUs at November 2, 2025, and changes during 2025 follow:

























Grant-Date





Shares

(thousands)



Fair Value*

(per share)

Service-based:













Nonvested at beginning of year

471



$

378.39



Granted

308



448.69



Vested

(351)



389.61



Forfeited



(15)





418.74



Nonvested at end of year

413



419.87



Performance/service-based:













Nonvested at beginning of year

126



373.35



Granted

40



429.77



Vested

(26)



331.47



Performance change

(9)



331.47



Forfeited

(1)



401.55



Nonvested at end of year

130



401.48



Market/service-based:













Nonvested at beginning of year

51



370.87



Granted

40



591.13



Forfeited

(1)



501.36



Nonvested at end of year

90



467.46



*    Weighted-averages







23. OTHER COMPREHENSIVE INCOME ITEMS

The after-tax components of accumulated other comprehensive income (loss) follow:































2025





2024





2023



Retirement benefits adjustment



$

(1,182)



$

(1,274)



$

(845)



Cumulative translation adjustment





(1,753)





(2,286)





(2,151)



Unrealized loss on derivatives





(54)





(72)





(8)



Unrealized loss on debt securities





(43)





(74)





(110)



Accumulated other comprehensive income (loss)



$

(3,032)



$

(3,706)



$

(3,114)





The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss).





























Before



Tax



After





Tax



(Expense)



Tax



Amount

Credit

Amount

2025





















Cumulative translation adjustment

$

539



$

(6)



$

533



Unrealized gain (loss) on derivatives:





















Unrealized hedging gain (loss)



1









1



Reclassification of realized (gain) loss to Interest expense





21



(4)





17



Net unrealized gain (loss) on derivatives



22



(4)



18



Unrealized gain (loss) on debt securities:





















Unrealized holding gain (loss)



39



(10)



29



Reclassification of realized (gain) loss to Other income





3



(1)



2



Net unrealized gain (loss) on debt securities



42



(11)



31



Retirement benefits adjustment:





















Net actuarial gain (loss)



120



(35)



85



Reclassification to Other operating expenses through amortization of:





















Actuarial (gain) loss



(50)



11



(39)



Prior service (credit) cost



35



(8)



27



Settlements/curtailment



25



(6)



19



Net unrealized gain (loss) on retirement benefits adjustment



130



(38)



92



Total other comprehensive income (loss)

$

733

$

(59)

$

674













75

Table of Contents

































Before



Tax



After





Tax



(Expense)



Tax



Amount

Credit

Amount

2024















Cumulative translation adjustment



$

(147)



$

12



$

(135)



Unrealized gain (loss) on derivatives:





















Unrealized hedging gain (loss)



(10)





2



(8)



Reclassification of realized (gain) loss to Interest expense





(71)



15





(56)



Net unrealized gain (loss) on derivatives



(81)



17



(64)



Unrealized gain (loss) on debt securities:





















Unrealized holding gain (loss)



45



(8)



37



Reclassification of realized (gain) loss to Other income





(1)









(1)



Net unrealized gain (loss) on debt securities



44



(8)



36



Retirement benefits adjustment:





















Net actuarial gain (loss)



(568)



136



(432)



Reclassification to Other operating expenses through amortization of:





















Actuarial (gain) loss



(72)



19



(53)



Prior service (credit) cost



36



(9)



27



Settlements/curtailments



38



(9)



29



Net unrealized gain (loss) on retirement benefits adjustment



(566)



137



(429)



Total other comprehensive income (loss)

$

(750)

$

158

$

(592)

































Before



Tax



After





Tax



(Expense)



Tax



Amount

Credit

Amount

2023





















Cumulative translation adjustment:



















Unrealized translation gain (loss)



$

424



$

(2)



$

422



Reclassification of realized (gain) loss to:





















Selling, administrative and general expenses





10











10



Other operating expenses





11











11



Net unrealized translation gain (loss)





445





(2)





443



Unrealized gain (loss) on derivatives:





















Unrealized hedging gain (loss)



25





(5)



20



Reclassification of realized (gain) loss to Interest expense





(62)





13





(49)



Net unrealized gain (loss) on derivatives



(37)



8



(29)



Unrealized gain (loss) on debt securities:





















Unrealized holding gain (loss)



(20)



4



(16)



Net unrealized gain (loss) on debt securities



(20)



4



(16)



Retirement benefits adjustment:





















Net actuarial gain (loss)



(589)



139



(450)



Reclassification to Other operating expenses through amortization of:





















Actuarial (gain) loss



(81)



20



(61)



Prior service (credit) cost



37



(9)



28



Settlements



37



(10)



27



Net unrealized gain (loss) on retirement benefits adjustment



(596)



140



(456)



Total other comprehensive income (loss)

$

(208)

$

150

$

(58)







24. LEASES

We are both a lessee and a lessor. We lease for our own use warehouse facilities, office space, production equipment, information technology equipment, and vehicles. The financial services operations lease equipment produced or sold by us and a limited amount of other equipment to retail customers. We determine if an arrangement is or contains a lease at the contract inception.

Lessee

The amounts of the lease liability and right of use asset are determined at lease commencement and are based on the present value of the lease payments over the lease term. The lease payments are discounted using our incremental borrowing rate since the rate implicit in the lease is not readily determinable. We determine the incremental borrowing rate for each lease based on the lease term and the economic environment of the country where the asset will be used, adjusted as if the borrowings were collateralized. Leases with contractual periods greater than one year and that do not meet the finance lease criteria are classified as operating leases.

We have elected to combine lease and nonlease components, such as maintenance and utilities costs included in a lease contract, for all asset classes. Leases with an initial term of one year or less are expensed on a straight-line basis over the lease term and recorded in short-term lease expense. Variable lease expense includes warehouse facilities leases with payments based on utilization exceeding contractual minimum amounts and leases with payments indexed to inflation when the index changes after lease commencement.

The lease expense by type consisted of the following:





























2025



2024



2023



Operating lease expense



$

144



$

133



$

129



Short-term lease expense





29





38





49



Variable lease expense





65





72





80



Finance lease:





















Depreciation expense





40





34





28



Interest on lease liabilities





5





4





2



Total lease expense



$

283



$

281



$

288





Operating and finance lease right of use assets and lease liabilities follow:

























2025





2024



Operating leases:















Other assets



$

317



$

274



Accounts payable and accrued expenses





314





270



















Finance leases:















Property and equipment — net



$

96



$

89



















Short-term borrowings





39





33



Long-term borrowings





73





72



Total finance lease liabilities



$

112



$

105







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Table of Contents



The weighted-average remaining lease terms in years and discount rates follow:

























2025





2024



Weighted-average remaining lease terms:















Operating leases





6





7



Finance leases





4





4



















Weighted-average discount rates:















Operating leases





4.2%





3.5%



Finance leases





4.3%





4.3%





Lease payment amounts in each of the next five years at November 2, 2025, follow:























Operating



Finance



Due in:



Leases



Leases



2026



$

110



$

44



2027





72





32



2028





57





22



2029





41





12



2030





28





5



Later years





37





6



Total lease payments





345





121



Less: imputed interest





(31)





(9)



Total lease liabilities



$

314



$

112





Cash paid for amounts included in the measurement of lease liabilities follows:































2025





2024





2023



Operating cash flows for operating leases



$

138



$

129



$

132



Operating cash flows for finance leases





5





4





2



Financing cash flows for finance leases





40





36





31





Right of use assets obtained in exchange for lease liabilities follow:

























2025





2024



Operating leases



$

168



$

75



Finance leases





47





67





Lessor

We lease equipment manufactured or sold by us through John Deere Financial. Sales-type and direct financing leases are reported in “Financing receivables ‒ net.” Operating leases are reported in “Equipment on operating leases ‒ net.”

At the end of the majority of leases, the lessee has the option to purchase the underlying equipment for the contractual residual value or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to us for remarketing.

We estimate the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. We review residual value estimates during the lease term and test the carrying value of our operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates change.

Lease agreements include usage limits and specifications on machine condition, which allow us to assess lessees for excess use or damages to the underlying equipment.

We have elected to combine lease and nonlease components. The nonlease components relate to preventative maintenance and extended warranty agreements financed by the retail customer. We have also elected to report consideration related to sales and value added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in “Finance and interest income” and “Other operating expenses.” Variable lease revenues relate to property taxes on leased assets in certain markets and late fees.

Lease revenues earned by us follow:































2025





2024





2023



Sales-type and direct finance lease revenues



$

184



$

190



$

165



Operating lease revenues





1,472





1,403





1,312



Variable lease revenues





20





17





16



Total lease revenues



$

1,676



$

1,610



$

1,493





At the time of accepting a lease that qualifies as a sales-type or direct financing lease, we record the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method.

Sales-type and direct financing lease receivables by market follow:

























2025





2024



Agriculture and turf



$

1,020



$

1,022



Construction and forestry





996





1,034



Total





2,016





2,056



Guaranteed residual values





867





921



Unguaranteed residual values





40





55



Less: unearned finance income





(330)





(307)



Financing lease receivables



$

2,593



$

2,725





Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at November 2, 2025, follow:













Due in:



2025



2026



$

1,385



2027





628



2028





424



2029





230



2030





176



Later years





40



Total



$

2,883





Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The corresponding depreciation expense was $925 in 2025, $874 in 2024, and $853 in 2023.

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The cost of equipment on operating leases by market and residual values follows:

























2025





2024



Agriculture and turf



$

8,177



$

7,875



Construction and forestry





1,093





1,142



Total





9,270





9,017



Less: accumulated depreciation





(1,670)





(1,566)



Equipment on operating leases – net



$

7,600



$

7,451



Operating lease residual values



$

5,339



$

5,227



First-loss residual value guarantees





1,443





1,393





Lease payments for operating leases are scheduled as follows:













Due in:



2025



2026



$

1,155



2027





867



2028





527



2029





255



2030





62



Later years





7



Total



$

2,873











25. FAIR VALUE MEASUREMENTS

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

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

Fair values of the financing receivables and receivables from unconsolidated affiliates that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by us for similar financing receivables or at current market interest rates. The fair values of the remaining receivables approximated the carrying amounts.

Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges.

The fair values of financial instruments that do not approximate the carrying values at November 2, 2025, and October 27, 2024, follow:



































2025



2024







Carrying



     Fair     



Carrying



     Fair     





Value

Value*

Value

Value*

Financing receivables – net



$

44,575



$

44,779



$

44,309



$

44,336



Financing receivables securitized – net





6,831





6,855





8,723





8,654



Receivables from unconsolidated affiliates



392



400











Short-term securitization borrowings





6,596





6,631





8,431





8,453



Long-term borrowings due within one year**



8,888



8,911



9,115



9,079



Long-term borrowings**



43,471



43,527



43,157



42,804



*    Fair value measurements were Level 3 for receivables and Level 2 for all borrowings.

**  Values exclude finance lease liabilities that are presented as borrowings (see Note 24).



Assets and liabilities measured at November 2, 2025, and October 27, 2024, at fair value on a recurring basis follow, excluding items which were carried at a cost that approximates fair value, consisting of our cash equivalents, money market funds and time deposits, and held-to-maturity debt securities (see Note 10):





















    

2025

    

2024

Level 1:















Marketable securities















U.S. government debt securities



$

196



$

239



Total Level 1 marketable securities





196





239



















Level 2:















Marketable securities















International fixed income fund



7







Corporate debt securities



510



423



International debt securities





174





143



Mortgage-backed securities*



234



165



Municipal debt securities



113



74



U.S. government debt securities





117





110



Total Level 2 marketable securities



1,155



915



Other assets – Derivatives





393





357



Accounts payable and accrued expenses – Derivatives





389





582



















Level 3:















Accounts payable and accrued expenses – Deferred consideration





113





147



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



78

Table of Contents



Fair value, nonrecurring Level 3 measurements from impairments and other adjustments at November 2, 2025, and October 27, 2024, follow:









































Fair Value



Losses (Gains)





  

2025

  

2024

  

 2025

  

2024

  

2023



Property and equipment – net

$

1





$

8











Other intangible assets – net





3











53











Other assets



8



$

23



12



$

28









Assets held for sale











2,944





(32)





97













The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value. For more information on asset impairments, see Notes 3 and 4.

Marketable securities – The portfolio of investments is valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds. Funds are valued using the fund’s net asset value, based on the fair value of the underlying securities.

Derivatives – Our derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Deferred consideration – The total purchase price consideration for three former Deere-Hitachi joint venture factories acquired in 2022 included supply agreement price increases beyond inflation adjustments. This deferred consideration will be paid as we purchase Deere-branded excavators, components, and service parts from Hitachi under the agreement with a duration that ranges from 5 to 30 years after the acquisition date. The deferred consideration balance is reduced as purchases are made and valued on a discounted cash flow approach using market rates.

Property and equipment – net – The valuations were based on the cost approach. The inputs include reproduction cost estimates adjusted for physical deterioration and functional obsolescence (see Note 4).

Other intangible assets – net – The impairment of customer relationships and tradename of our external overseas battery operations was measured using an income approach (see Note 4).

Other assets (Investments in unconsolidated affiliates) – Other than temporary impairments of investments are measured as the difference between the implied fair value and the carrying value of the investments. The estimated fair value for privately held entities is determined by an income approach (discounted cash flows), which includes inputs such as interest rates and margins (see Note 4).

Assets held for sale – The disposal group was measured at the lower of the carrying amount or fair value less costs to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 4). The gain recorded in 2025 represents a reversal of the prior period valuation allowance, not in excess of the cumulative valuation allowance recorded on “Assets held for sale.”

26. DERIVATIVE INSTRUMENTS

Fair values of our derivative instruments and the associated notional amounts at the end of 2025 and 2024 are presented below. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”

































Fair Value







Notional



Assets



Liabilities



2025





















Cash flow hedges:

    

  





  





  

Interest rate contracts

$

2,675









$

21





















Fair value hedges:





















Interest rate contracts





11,465



$

160





228



Cross-currency interest rate contracts





2,058





91





11























Net investment hedges:





















Cross-currency interest rate contracts





1,131











9

























Not designated as hedging instruments:





















Interest rate contracts





14,084





94





81



Foreign exchange contracts





7,372





46





33



Cross-currency interest rate contracts





132





2





6

























2024















Cash flow hedges:

    

  





  





  

Interest rate contracts

$

2,875



$

3



$

20





















Fair value hedges:





















Interest rate contracts





15,864





115





467



Cross-currency interest rate contracts





975





31





























Not designated as hedging instruments:





















Interest rate contracts





12,518





97





75



Foreign exchange contracts





7,533





95





20



Cross-currency interest rate contracts





158





16











79

Table of Contents



The amounts recorded in the consolidated balance sheets at November 2, 2025, and October 27, 2024, related to borrowings and fair value hedges are presented in the table below. Fair value hedging adjustments are included in the carrying amount of hedged items.























Carrying



Cumulative







Amount of



Fair Value







Hedged



Hedging







Items



Amounts



2025















Short-term borrowings



$

2,998



$

(30)



Long-term borrowings





25,013





(203)



2024















Short-term borrowings



$

2,069



$

6



Long-term borrowings





24,751





(575)





The table above includes carrying amounts of short-term borrowings of $2,544 and $1,782 and of long-term borrowings of $11,963 and $8,626 at November 2, 2025, and October 27, 2024, respectively, for hedged items that are in discontinued hedge relationships. Also included are cumulative fair value hedging amounts on discontinued hedge relationships of short-term borrowings of $(30) and $7 and of long-term borrowings of $(185) and $(228) at November 2, 2025, and October 27, 2024, respectively. At October 27, 2024, long-term borrowings with a carrying amount of $598 were in both active and discontinued hedging relationships as a result of hedging activities associated with reference rate reform.

The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following:



























  

  2025  

  

  2024  

  

  2023  

Fair value hedges





















Interest rate contracts – Interest expense

$

103

$

226

$

(542)

























Cash flow hedges





















Recognized in OCI:





















Interest rate contracts – OCI (pretax)



$

1



$

(10)



$

25



Reclassified from OCI:





















Interest rate contracts – Interest expense



(21)



71



62

























Net investment hedges





















Interest rate contracts – Interest expense



$

10















Recognized in OCI:





















Interest rate contracts – OCI (pretax)





(9)





































Not designated as hedges





















Interest rate contracts – Net sales















$

1



Interest rate contracts – Interest expense

$

(11)

$

(4)



40



Foreign exchange contracts – Net sales





(6)





(2)





(6)



Foreign exchange contracts – Cost of sales



(5)



10



8



Foreign exchange contracts – Other operating expenses



147



(135)



100



Total not designated

$

125

$

(131)

$

143





The amount of loss recorded in OCI at November 2, 2025, that is expected to be reclassified to “Interest expense” in the next twelve months if interest rates remain unchanged is $9 after-tax. There

were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Counterparty Risk and Collateral

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

Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at November 2, 2025, and October 27, 2024, was $356 and $562, respectively. In accordance with the limits established in these agreements, we posted $62 and $245 of cash collateral at November 2, 2025, and October 27, 2024, respectively. In addition, we paid $8 of collateral that was outstanding at both November 2, 2025, and October 27, 2024, to participate in an international futures market to hedge currency exposure, not included in the following table.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral at November 2, 2025, and October 27, 2024, follows:



































Gross Amounts



Netting







Net





  

Recognized

  

 Arrangements 

  

Collateral

  

Amount

2025



























Assets

$

393

$

(202)





$

191



Liabilities



389



(202)



$

(64)





123



2024



























Assets

$

357

$

(142)





$

215



Liabilities



582



(142)



$

(246)





194







80

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27. SEGMENT DATA

Our operations are organized and reported in four business segments: Production & Precision Agriculture, Small Agriculture & Turf, Construction & Forestry, and Financial Services. This presentation is consistent with how the chief operating decision maker, our Chief Executive Officer (CEO), who also serves as the Chairman of the Board, assesses the performance of the segments and makes decisions regarding resource allocations. Each segment has a group president responsible for managing financial performance and executing strategic initiatives.

●

Production & Precision Agriculture – PPA segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for production-scale growers of large grains, small grains, cotton, and sugarcane. The segment’s primary products include four-wheel-drive (4WD), track, and row crop tractors; harvesters; cotton pickers and strippers; sugarcane harvesters and loaders; soil preparation, tillage, seeding, application, crop care equipment; and related attachments and service parts.

●

Small Agriculture & Turf – SAT segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for dairy and livestock producers, high-value and small acreage crop producers, and turf and utility customers. The segment’s primary products include specialty, utility, and compact tractors; as well as self-propelled forage harvesters and attachments; hay and forage equipment; rotary mowers; utility vehicles; riding and commercial lawn equipment; golf course equipment; utility vehicles; and related attachments and service parts.

●

Construction & Forestry – CF segment defines, develops, and delivers a broad range of machines and technology solutions organized along the earthmoving, forestry, and roadbuilding production systems. The segment’s primary products include backhoe loaders, crawler dozers and loaders, four-wheel-drive and compact wheel loaders, excavators, skid-steer loaders, motor graders, milling machines, pavers, rollers, log harvesters, and related attachments and service parts.

The products and services produced by the segments above are primarily marketed through independent retail dealer networks and major retail outlets. For roadbuilding products in certain markets outside the U.S. and Canada, the products are sold through company-owned sales and service subsidiaries.

●

Financial Services – FS segment finances sales and leases by John Deere dealers of new and used production and precision agriculture equipment, small agriculture and turf equipment, and construction and forestry equipment. In addition, the FS segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties.

The CEO evaluates the performance of the business segments based on operating profit, which for FS includes interest income and expense, and on identifiable segment operating assets. Segment operating profit and operating assets are measured using

accounting policies consistent with those applied in the consolidated financial statements. Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment data. Intersegment transactions are primarily made between the FS segment and PPA, SAT, and CF segments, and are recognized at current market prices. See Notes 5 and 14 for geographic information.

Total identifiable assets assigned to the equipment operations operating segments are those the segments actively manage, consisting of trade receivables, inventories, property and equipment, intangible assets, and certain other assets. Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets. Financial services assets include cash and cash equivalents, retirement benefits, and deferred income tax assets that are managed by the segment.

Segment operating profit and identifiable operating assets are the key metrics used by the CEO to monitor results against forecast and prior period results, and to determine variable compensation for employees at all levels. To manage operations and allocate human and capital resources, the CEO receives monthly reports including sales and revenues, operating profit, and assets by operating segment. Interest income and expenses are significant to the FS operations.

Information relating to operations by operating segment follows for the years ended November 2, 2025, October 27, 2024, and October 29, 2023.







































PPA

SAT

CF

FS

Total

2025























External net sales



$

17,311



$

10,224



$

11,382









$

38,917



External finance and interest income





43





45





12



$

5,351





5,451



External other income



211



133



192



470



1,006



Intersegment income



188





30





56



468



742



Total segment net sales and revenues



17,753



10,432



11,642



6,289



46,116



Cost of sales





(11,919)





(7,422)





(8,849)











(28,190)



Interest expense























(2,923)





(2,923)



Other segment items1





(3,163)





(1,803)





(1,765)





(2,252)





(8,983)



Segment operating profit



$

2,671



$

1,207



$

1,028



$

1,114



$

6,020





































2024

































External net sales



$

20,834



$

10,969



$

12,956









$

44,759



External finance and interest income





46





42





14



$

5,392





5,494



External other income



329



173



238



390



1,130



Intersegment income



171





31





(2)



711



911



Total segment net sales and revenues



21,380



11,215



13,206



6,493



52,294



Cost of sales





(13,621)





(7,753)





(9,429)











(30,803)



Interest expense























(3,182)





(3,182)



Other segment items1





(3,245)





(1,835)





(1,768)





(2,422)





(9,270)



Segment operating profit



$

4,514



$

1,627



$

2,009



$

889



$

9,039



81

Table of Contents







































PPA



SAT



CF



FS



Total



2023

































External net sales



$

26,790



$

13,980



$

14,795









$

55,565



External finance and interest income





28





35





12



$

4,366





4,441



External other income



302



169



175



355



1,001



Intersegment income



169





41





3



833



1,046



Total segment net sales and revenues



27,289



14,225



14,985



5,554



62,053



Cost of sales





(17,143)





(9,976)





(10,620)











(37,739)



Interest expense























(2,362)





(2,362)



Other segment items1





(3,150)





(1,777)





(1,670)





(2,397)





(8,994)



Segment operating profit



$

6,996



$

2,472



$

2,695



$

795



$

12,958



1 Other segment items for PPA, SAT, and CF include selling, administrative and general expenses; advertising; engineering; research and development; certain special items (see Note 4); equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. Financial Services other segment items include the effect of its selling, administrative and general expenses; foreign exchange gains and losses; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses.



























2025

2024

2023

Reconciliation of net sales and revenues



               





               





               



Segment net sales and revenues



$

46,116



$

52,294



$

62,053



External other income2





310





333





244



Elimination of intersegment revenues



(742)



(911)



(1,046)



Net sales and revenues



$

45,684



$

51,716



$

61,251

























Reconciliation of net income

















Segment operating profit



$

6,020



$

9,039



$

12,958



Interest income – excluding FS





420





492





559



Interest expense – excluding FS



(372)



(396)



(411)



Pension and OPEB benefit, excluding service cost component



422



333



286



Corporate other – net3



(233)



(286)



(366)



Income taxes



(1,259)





(2,094)





(2,871)



Net income



$

4,998



$

7,088



$

10,155



2 External other income includes corporate investment income, corporate interest income, and other miscellaneous revenue items that are included in “Other income” on the statements of consolidated income.

3 Corporate other - net includes certain foreign exchange gains and losses, certain investment income, and certain corporate administrative and general expenses.





























OPERATING SEGMENTS

  

2025

  

2024

  

2023

Depreciation4 and amortization expense



PPA



$

654



$

643



$

581



SAT





261





246





241



CF



365



331



301



FS



1,082



1,040



1,016



Intersegment





(133)





(142)





(135)



Total



$

2,229



$

2,118



$

2,004



























Total Assets



               





               





               



PPA



$

8,787



$

8,696



$

8,734



SAT





3,987





4,130





4,348



CF



7,792



7,137



7,139



FS



70,021



73,612



70,732



Corporate5



15,409



13,745



13,134



Total Assets



$

105,996



$

107,320



$

104,087



























Capital additions



              





            





            



PPA



$

716



$

1,025



$

896



SAT





301





327





386



CF



345



352



311



FS



2



3



4



Total



$

1,364



$

1,707



$

1,597

























Equity investment in unconsolidated affiliates



PPA



$

11



$

12



$

10



SAT





37





61





87



CF











1



FS



462



49



28



Total



$

510



$

122



$

126



4 Depreciation includes depreciation for equipment on operating leases.

5 Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets.













28. SUBSEQUENT EVENT

On December 3, 2025, a quarterly dividend of $1.62 per share was declared at the Board of Directors meeting, payable on February 9, 2026, to stockholders of record on December 31, 2025.







82

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