Insiders ranked by realized 90-day signed return on their open-market trades at Deere & Co. Minimum 3 scored trades. Returns are signed - a sale followed by a rally counts against the insider.
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.10pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.24pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.03pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
inability+5
claims+3
investigations+2
penalties+2
losses+2
Positive rising
able+3
enhance+3
effective+1
greater+1
successfully+1
Risk Factors (Item 1A)
8,799 words
ITEM 1A.
RISK FACTORS.
The following risks are considered material to our business based upon current knowledge, information, and assumptions. This discussion of risk factors should be considered closely in conjunction with the MD&A, including the risks and uncertainties described in the Forward-Looking Statements, and the Notes to Consolidated Financial Statements. These risk factors and other forward-looking statements relate to future events, expectations, trends, and operating periods. They involve factors that are subject to change and important risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all our businesses. Although the risks are organized by headings and each risk is discussed separately, many are interrelated. The risks described in this Annual Report on Form 10-K and the Forward-Looking Statements are not the only risks we face.
GEOPOLITICAL AND MACROECONOMIC RISKS
Our financial results largely depend upon the agricultural market business cycle, as well as general economic conditions and outlook. Negative conditions in the agricultural industry and general economy cause weakened demand for our equipment and services, limit access to funding, and result in higher funding costs.
Our success largely depends on the vitality of the agricultural industry. Historically, the agricultural industry has been cyclical and subject to a variety of economic and other factors; consequently, sales of agricultural equipment are also cyclical and generally reflect the economic health of the agricultural industry.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
losses+11
impairment+4
litigation+4
unresolved+3
penalties+3
Positive rising
gains+4
strong+4
effective+3
improvements+3
greater+2
MD&A (Item 7)
53,442 words
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 , supported by a -in-class dealer channel, and by employees dedicated to some of the world’s most important . To build on our 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).
The economic health of the agricultural industry is affected by numerous factors, including farm income, international trade, farmland values, debt levels, and financing costs. In addition, farm income is influenced by commodity and protein prices, world grain stocks, acreage available and planted, crop yields, agricultural product demand, soil conditions, farm input costs, government policies and support. Changes in government farm programs and policies can influence demand for agricultural equipment as well as create unequal competition for multinational companies relative to domestic companies. Downturns in the agricultural industry due to these and other factors, which could vary by market, have resulted in decreases in demand for agricultural equipment, adversely affecting our business and financial performance.
The demand for our products and services depends on the fundamentals in the markets in which we operate and can be significantly reduced in an economic environment characterized by high unemployment, high interest rates, cautious consumer spending, inflation, lower corporate earnings, and lower business investment, all of which affect farmers’ income and sentiment. In fiscal year 2025, unfavorable market conditions resulted in lower sales volumes, greater reliance on sales incentives, and elevated receivable write-offs. We expect certain of these conditions to persist in fiscal year 2026. Changes in the economic environment and the agricultural market business cycle are driven by factors outside of our control, and as a result we cannot reasonably foresee when these conditions will fully subside.
Sustained general negative economic conditions and outlook could also affect construction and housing activities, and energy prices and demand, which could decrease demand for construction and turf equipment and could have a material adverse effect on our financial results.
Uncertain or negative outlook with respect to pervasive U.S. fiscal issues as well as general economic conditions and outlook, such as market volatility, inflation, or interest rate changes, have caused and could continue to cause significant changes in market liquidity conditions. Such changes could impact access to funding and associated funding costs, which could reduce our earnings and cash flows.
We face risks associated with international, national, and regional trade laws, regulations, and policies that could materially impair our profitability.
International, national, and regional laws, regulations, and policies directly or indirectly related to or restricting the import and export of our products, services, and technology, or those of our customers or suppliers, or for the benefit of favored industries or sectors, have harmed our global business. We are subject to various trade regulatory risks including, but not limited to, the following:
The imposition of tariffs and retaliatory tariffs has impacted, and we expect will continue to impact, the sourcing of parts and components, the cost and profitability of manufacturing operations, and our ability to ship, import, and export our products. During fiscal year 2025, new tariffs were imposed in the U.S. for imports from a broad range of countries and materials. Several countries also implemented or proposed retaliatory tariffs on imports from the U.S., as well as other barriers to trade. As a net exporter of agriculture and turf equipment from the U.S., these trade policies impact us. 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 fiscal year 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 of our
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exported products and the profit realized from these exports. The direct impact of incremental tariffs incurred by us in 2025 was approximately $600, excluding the impact of tariffs on our suppliers and market demand. 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.
Changing U.S. export controls and sanctions on various foreign countries and on various parties could affect our ability to manufacture our products in foreign jurisdictions, collect receivables, provide aftermarket warranty support for our equipment and sell products, and could otherwise impact our reputation and business.
Restricted access to global markets could impair our ability to export goods and services from various manufacturing locations around the world and limit the ability to access raw materials and high-quality parts and components at competitive prices on a timely basis.
Trade restrictions could impede those in developing countries from achieving a higher standard of living, which could negatively impact our future growth opportunities arising from increasing global demand for food, fuel, and infrastructure.
Policies impacting exchange rates and commodity prices, or those limiting the export or import of commodities, could have a material adverse effect on the international flow of agricultural and other commodities that may result in a corresponding negative effect on the demand for agricultural and forestry equipment in many areas of the world. Our agricultural equipment sales could be harmed by such policies because farm income influences sales of agricultural equipment around the world.
If our business partners were to incur regulatory or judicial action, it could impact our ability to operate certain solutions abroad, or our connectivity to rural farmers.
Our international operations expose us to risks and events beyond our control in countries in which we operate.
Efforts to grow our businesses depend in part upon access to and developing and maintaining market share and profitability in additional geographic markets, including, but not limited to, Argentina, Brazil, CIS, China, India, and South Africa. Particularly, we have invested significant resources to grow our operations in Brazil, and i n 2024, we built a research and development center in Indaiatuba. We may not realize the benefits from our investment in Brazil or in other regions and may be unable to grow our market share for a variety of reasons. For example, some countries where we operate have greater political and economic volatility and greater infrastructure vulnerability than others. There are various risks associated with our global footprint, including, but not limited to, the following:
economic and political instability, including war or armed conflict, changes in government policies, expropriation, nationalization, and other political, economic, or social developments,
increased tariffs, trade barriers, trade agreements, and other restrictions on international trade,
supply chain disruptions, including, as a result of natural disasters, transportation disruptions, and geopolitical events,
multiple and potentially conflicting laws, regulations, and policies that are subject to change, along with the complexity and cost of compliance,
currency fluctuations which can affect the value of our foreign currency revenues, expenses, and cash flows,
inadequate intellectual property protections in foreign jurisdictions that could result in the unauthorized use or infringement of our intellectual property,
adverse consumer sentiment for non-local products,
local labor market conditions, and
lack of brand recognition in our emerging markets.
The occurrence of one or more of these events has, from time to time, impacted, and may in the future impact, our business in a variety of ways, including reducing demand for our products, increasing costs, limiting our ability to operate in certain jurisdictions, disrupting our ability to deliver products to customers on time and at competitive prices, subjecting us to fines, penalties, and sanctions, harming our competitive position, devaluation of assets, and impacting our financials.
Please also refer to the risk factors in the “Legal and Regulatory Compliance Risks” section below that address our legal and regulatory risks associated with our international operations.
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Changing worldwide demand for food and different forms of renewable energy can impact the price of farm commodities and consequently the demand for our equipment. This could result in higher research and development costs related to changing machine fuel requirements.
Changing worldwide demand for farm outputs to meet the world’s growing food and renewable energy demands, driven in part by government policies, including those related to climate change, and a growing world population, is likely to result in fluctuating agricultural commodity prices, which directly affect sales of agricultural equipment. Lower agricultural commodity prices directly affect farm incomes, which negatively affect sales of agricultural equipment and result in higher credit losses.
While higher commodity prices benefit our crop-producing agricultural equipment customers, they could result in greater feed costs for dairy and livestock producers, which in turn may result in lower levels of equipment purchased by those customers. International buyers can also change the source of imported agricultural products, such as corn and soy, from the U.S. to other countries, impacting the profitability of our customers and demand for our equipment.
In addition, changing energy demand may cause farmers to change the types or quantities of the crops they raise, with corresponding changes in equipment demands. The growing demand for biofuels has led to a corresponding increased demand for agriculturally based feedstocks used in their production, such as corn in the U.S. and Europe and sugar cane in Brazil. This increased demand may increase the demand for agricultural equipment to be used in the production of such crops. However, the economic feasibility of biofuels can be impacted by the price of oil. As the price of oil falls, biofuels become a less attractive alternative energy source, and as a result, there is uncertainty with respect to any benefits we may realize with respect to our investments related to renewable energy.
Furthermore, changes in governmental policies regulating fuel utilization, including biofuel, affect commodity demand and commodity prices, demand for our diesel-fueled equipment, and result in higher research and development costs related to equipment fuel standards.
OPERATIONAL AND MANUFACTURING RISKS
Restructuring, rationalization, and relocation of manufacturing facilities may cause capacity constraints, inventory fluctuations, and other issues.
The rationalization or restructuring of our manufacturing facilities, including relocating production or closing facilities, requires significant investment and places temporary constraints on our ability to produce the quantity of products necessary to fill orders, and thereby complete sales in a timely manner.
In addition, decisions regarding the rationalization, restructuring or relocation of facilities, and any similar actions, could also subject us to additional or new tariffs, reputational risks, and other issues relating to the importation of products. In 2024, we shifted production of small-frame skid steer loaders and compact track loaders to Mexico. As a result, these products became subject to additional tariffs on imports from Mexico in 2025. Even though we are taking actions to qualify for an exemption under the United States-Mexico-Canada Agreement (USMCA) to mitigate the elevated costs, there is no guarantee that we will be able to obtain such qualification.
Furthermore, our manufacturing processes are dependent on water. Increasing competition for water resources, regulatory restrictions on water, and environmental changes can lead to water scarcity. Any significant reduction in water availability could disrupt our manufacturing processes, increase our operational costs, and limit our ability to meet customer demand.
Inability to accurately forecast customer demand for products and services, and to adequately manage inventory, could adversely affect our operating results.
To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with suppliers and contract manufacturers. These forecasts are based on estimates of future demand for products and services. Failure to accurately forecast our needs results in unmet market demand, parts shortages, manufacturing delays or inefficiencies, increased costs, or excess inventory. Our ability to accurately forecast demand could be affected by many factors, including changes in customer demand for our products and services, used equipment inventory outstanding, changes in demand for the products and services of competitors, unanticipated changes in agricultural and general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions. In 2025, elevated used inventory levels in late model-year machines impacted demand for our products in North America resulting in lower price realization and actions to reduce our inventory level. If the forecasts used to manage inventory are not accurate, we may experience excess inventory levels, shortage of available products, or reduced manufacturing efficiencies.
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Changes in the availability and price of certain raw materials, components, and whole goods have resulted and could result in disruptions to the supply chain causing production disruptions, increased costs, and lower profits from sales of our products.
Our business relies on a complex global supply chain, and any disruptions can impact our operations. We have experienced changes in the availability and prices of raw materials, components, whole goods, and freight over the past several years.
Past global logistics network challenges have resulted in delays, shortages of key manufacturing components, increased order backlogs, increased transportation costs, and production inefficiencies from a higher number of partially completed machines in inventory, which in the past have increased our overall production and overhead costs. Increases in such costs have adversely affected our business operations.
W e anticipate fluctuations in our supply chain due to ongoing geopolitical and economic uncertainty , and regulatory and policy instability, including import tariffs and trade agreements. For example, certain of our products, including motors, batteries, and other components, rely on rare earth minerals for their manufacturing, of which a significant majority are sourced from China. The inability to obtain export permits for rare earth minerals could have a detrimental effect on our business. The se complications have the potential to significantly increase production and logistics costs, including additional research and development costs for designing alternative solutions, and therefore would have a detrimental effect on the profitability of the business. Rapid changes and growing complexity in trade policies may also affect the ability of customs brokers and logistics providers to timely process imported products, which could result in delays, higher logistics costs, and production disruptions.
The financial stability of our suppliers can also impact the continuity of our supply chain. A number of our suppliers are facing higher prices due to inflation, increased tariffs or otherwise. If one or more of our suppliers continue to encounter financial hardships , delivery setbacks, or other performance-related difficulties, we may be unable to fulfill our obligations to customers. Furthermore, if any of the raw materials critical to our manufacturing become unavailable to our suppliers, or are only accessible at significantly higher costs, including due to increased tariffs or trade restrictions, or are affected by quality problems or defects, our ability to deliver certain products on schedule or within budget could be compromised.
Significant disruptions to the supply chain resulting from shortages of raw materials, components, and whole goods have and could continue to adversely affect our ability to meet commitments to our customers. Examples of such disruptions include:
work interruption or union strikes by employees of suppliers,
reliance on single source suppliers, or suppliers that are proprietary in nature that cannot be replaced expeditiously, and
natural disasters, pandemics, or other unforeseen events can disrupt the flow of materials.
Furthermore, if our customers are unwilling to accept price increases for our products, or if we are unable to offset the increases in costs, raw material costs or shortages could have a material adverse effect on our operational or financial results.
Failure by our supply base to use ethical business practices and comply with applicable laws and regulations may adversely affect our business, financial condition, and operational results.
While we conduct due diligence on our suppliers and require their compliance with various policies and contractual covenants, we do not control our suppliers’ business practices. Accordingly, we cannot guarantee that our due diligence efforts will reveal that they follow ethical business practices such as fair wage practices and compliance with environmental, safety, labor, human rights, material sourcing, and other laws.
Failure to comply could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages, or other disruptions in operations. If our suppliers fail to comply with ethical standards and applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, identification and reporting requirements, our reputation and brand could be harmed, and we could be exposed to litigation, investigations, enforcement actions, monetary liability and additional costs that could have a material adverse effect on our business, financial condition, and results of operations.
Unexpected events have increased and may in the future increase our cost of doing business or disrupt our operations.
The occurrence of one or more unexpected events, including war, lack of available natural resources, acts of terrorism, epidemics and pandemics, civil unrest, fires, tornadoes, tsunamis, hurricanes, earthquakes, temperatures outside of normal ranges, floods, and other forms of severe or unusual weather in countries in which we operate, or in which our suppliers are located, have adversely affected and could in the future adversely affect our operations and financial performance. Such events have caused and could cause complete or partial closure of one or more of our manufacturing facilities or distribution centers, temporary or long-term disruptions in the supply of component products from some local and international suppliers, and disruption and delay in the transport of products to dealers,
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end-users, and distribution centers. Existing insurance coverage may not provide protection from all the costs that may arise from such events.
The potential physical impacts of weather conditions or climate change on our facilities, suppliers, and customers, and therefore on our business, are uncertain and will be specific to the circumstances developing in various geographic regions. These potential physical effects may adversely affect the demand for our products and the cost, production, sales, and financial performance of our operations.
FINANCIAL RISKS
Changes in interest rates or market liquidity conditions, as well as changes in government banking, monetary and fiscal policies, could adversely affect our financials and our earnings and/or cash flows.
High interest rates can dampen overall economic activity and/or the financial condition of our customers, either or both of which can negatively affect customer demand for our equipment and our customers’ ability to repay us. High interest rates also increase the cost of carrying inventory for our dealers and the cost of financing for end customers. Interest rates in the U.S. have decreased and Brazil remained elevated in 2025. Higher rates and volatility in rates impact us in several ways, primarily affecting the demand for our products, financing spreads for the financial services operations, the value of our investments, and the financial health of our dealers. The markets for our agriculture, turf, and construction products were negatively impacted in 2025 by elevated interest rates and their effect on borrowing costs for our customers.
While we strive to match the interest rate characteristics of our financial assets and liabilities, changing interest rates have affected our financing spreads—the difference between the yield we earn on our assets and the interest rates we pay for funding—which have affected our earnings.
In addition, actions by credit rating agencies, such as downgrades or negative changes to ratings outlooks, can affect the availability and cost of funding for us and can increase our costs of capital and hurt our competitive position.
Moreover, policies of the U.S. and other governments regarding banking, monetary, and fiscal policies intended to promote or maintain liquidity, stabilize financial markets, and/or address local deficit or structural economic issues have a material impact on our customers and markets.
Our operations and results could also be affected by financial regulatory reform that could, among other things, have an adverse effect on the financial services segment and on our customers by limiting their ability to enter hedging transactions or to finance purchases of our products. Government policies on spending can also affect us, especially the CF segment, due to the impact of government spending on infrastructure development. Our operations, including those outside of the U.S., may also be affected by non-U.S. regulatory reforms being implemented to further regulate non-U.S. financial institutions and markets.
Because the financial services segment provides financing for a significant portion of our sales worldwide, negative economic conditions in the financial industry could materially impact our operations and financial results.
Negative economic conditions have an adverse effect on the financial industry in which the financial services segment operates. The financial services segment provides financing for a significant portion of our sales worldwide. The financial services segment is vulnerable to customers and others defaulting on contractual obligations, and has experienced, and may continue to experience write-offs and credit losses that, in some cases, exceed our expectations and adversely affect our financial condition and results of operations as a result of elevated delinquencies. 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. We occasionally grant contractual modifications to customers experiencing financial difficulties. There is no guarantee that customers experiencing financial difficulty will be able to satisfy their obligations in accordance with original or modified terms. As a result, our allowance for credit losses may continue to increase in future periods.
The financial services segment’s inability to access funds at cost-effective rates to support our financing activities could have a material adverse effect on our business. The financial services segment’s liquidity and ongoing profitability depend largely on timely access to capital to meet future cash flow requirements and to fund operations and costs associated with engaging in diversified funding activities. The financial services segment may also experience residual value losses that exceed our expectations caused by lower pricing for used equipment and higher-than-expected equipment returns at lease maturity.
Changes in tax rates, tax legislation, or exposure to additional tax liabilities could have a negative effect on our business.
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. Tax rates in various jurisdictions may be subject to significant change. Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax
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rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretations. If our effective tax rates were to increase, or if the ultimate determination of taxes owed is for an amount more than amounts previously accrued, our operating results, cash flows, and financial condition could be adversely affected.
STRATEGIC RISKS
We may not realize the anticipated benefits of our Smart Industrial Operating Model and Leap Ambitions.
Failure to realize the anticipated benefits of our Smart Industrial Operating Model and related business strategies in production systems, precision technologies, and aftermarket support, as well as failure to have selected a business strategy that aligns with our customers’ needs and market trends, could have an adverse effect on our operational and financial results.
Several factors could impact our ability to successfully execute, and to benefit from, our Smart Industrial Operating Model, including, among other things:
our inability to accurately assess market opportunities and the technology required to address such opportunities,
falling behind in developing and introducing new technologies,
customers not seeing the value proposition of the technologies and deciding not to adopt them,
our inability to holistically provide lifecycle solutions,
inability to fully monetize technology-based solutions,
being unable to optimize our capital allocation in connection with the Smart Industrial Operating Model, and
the adoption of new regulations or policies supporting and/or subsidizing outputs that are inconsistent with our strategy, such as policies that have the effect of encouraging or supporting the use of conventional sources of energy.
Similarly, we may not realize the anticipated benefits of our Leap Ambitions and related goals within the expected timelines, or at all. As part of our Leap Ambitions, we adopted certain financial and operational goals, which were refined in December 2025. In the future, we may again modify these goals, abandon them or be unable to achieve them for a variety of reasons, some of which may be beyond our control. Examples of such reasons include:
the evolution of our business strategy, our business model, and our business needs;
our estimates and assumptions related to efficiency of our products and the adoption of precision technology may not be accurate; in particular, we have experienced slower than expected customer adoption of some of our precision technology solutions, and SaaS subscription services;
customers may not understand the value proposition of the various SaaS subscription models;
the time required to build the capabilities and infrastructure to support our SaaS business, which has delayed the timing of realization of the expected benefits; and
dealers may not be able to effectively establish relationships with customers, maintain those customer relationships, and provide SaaS solutions and support to our customers.
The introduction of new products and technologies involves risk, and, from time to time, we may fail to realize their anticipated benefits.
We design and manufacture products that incorporate advanced technologies. Many of our products and services are highly engineered and involve sophisticated technologies with related complex manufacturing and systems integration processes. We invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products, and services aimed at meeting the ever-evolving product, and service needs of our customers.
Our ability to realize the anticipated benefits of our investments in technology and product design depends on a variety of factors, including:
the usefulness and competitiveness of our offerings relative to our peers,
access to radio frequency (RF) spectrum and satellite functionality which enables connectivity for equipment, operations, owners, dealers, and technicians,
meeting development, production, certification, and regulatory approval schedules,
adequate intellectual property protections in relevant jurisdictions and our ability to protect our intellectual property,
achieving cost and production efficiencies,
availability and quality of product parts and materials, both from our suppliers and internally produced,
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availability of test equipment,
development of complex software,
hiring and training of qualified personnel,
training our dealers and their technicians,
identification of emerging technological trends,
compliance requirements regarding data privacy and artificial intelligence, and
customer acceptance and the pace of adoption of our products and technologies, which with respect to some of our solutions and subscription models, has been slower than we expected.
We compete on product performance, innovation, quality, distribution, sustainability, customer service, and price. Aggressive pricing or other strategies of competitors, unanticipated product or manufacturing delays, our failure to deliver quality products that meet customer needs, or our failure to price products competitively, adversely affect our business, results of operations, and financial condition.
To remain competitive, we need to have a thorough understanding of our existing and potential customers on a global basis, particularly in growth markets such as Argentina and Brazil. If we are unable to effectively develop and deliver technology that customers can easily adopt and utilize, customers may not adopt our technology which would adversely impact our business operations and future financial performance. Therefore, our ability to deliver precision technology and expand value-driven solutions is critical to our business success.
In addition, artificial intelligence technologies have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes, products, and services in a timely, cost-effective, compliant, and responsible manner.
These investments may not produce solutions that provide the desired results for customers’ profitability or sustainability outcomes, impacting our competitive position.
From time to time our equipment fails to perform as expected and we have experienced, and may in the future experience, warranty claims, post-sale repairs and recalls, and other consequences.
From time to time, we have received warranty claims and have had to perform post-sales repairs or recalls due to our equipment not performing as expected. In such cases, we may also face regulatory requirements and penalties that can impact our ability to develop, market, and sell equipment. These circumstances may result in product delivery delays and claims related to product liability, breach of warranty, and consumer protection. The costs associated with these claims and warranty expenses could be significant. We must manage the cost and risk associated with product warranties, post-sale repairs and recalls, regulatory penalties, and product liability, breach of warranty, and consumer protection claims with respect to our products. We may also be subject to investigations relating to our products by government regulators which may compel us to initiate product recalls or may result in negative public perceptions about the safety of our products, even if we disagree with the regulator’s determination. Such post-sale repairs or recalls, whether voluntary or involuntary, could result in significant expense, supply chain complications, and may harm our brand, business, prospects, financial condition, and operating results.
We rely on a network of independent dealers to manage the distribution of our products and services. If our dealers are unsuccessful with their sales and business operations, it could have an adverse effect on our overall sales and revenue.
We rely on the capability of our dealers to develop and implement effective sales plans to create demand among purchasers for the equipment and related products and services they purchase from us. If our dealers are unsuccessful in these endeavors, we will be unable to increase our sales and revenue, which would have an adverse effect on our financial condition.
Our dealers carry inventories of finished products as part of their operations and adjust those inventories based on future needs and market conditions, including the level of used equipment inventory. When the total inventory levels of our dealers are higher than they desire, dealers have postponed equipment purchases from us, and could continue to postpone purchases in the future, which could cause our sales to be lower and negatively impact our results. Similarly, our results could be negatively impacted through the loss of time-sensitive sales if our dealers do not maintain inventory levels sufficient to meet customer demand.
In addition, the dealer channel’s ability to support and service new technologies may affect customers’ acceptance and adoption rates of these products. The unavailability of specialized technicians to service our equipment may result in overburdening dealers’ servicing capacity.
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Furthermore, dealers may exit, or we may seek to terminate relationships with certain dealers if they are unable to meet customer needs. The unplannedloss of any of our dealers could lead to inadequate market coverage or negative customer impressions and may adversely impact our ability to collect receivables and generate new sales that are associated with that dealer. Dealers could also have trouble funding their day-to-day cash flow needs and paying their obligations due to adverse business conditions resulting from negative economic effects or other factors.
We may not realize the anticipated benefits of acquisitions, joint ventures, and divestitures, or these benefits may take longer to realize than expected.
From time to time, we make strategic acquisitions and divestitures and participate in joint ventures. Acquisitions and joint ventures we have entered into, or may enter into in the future, may involve significant challenges and risks, including that the acquisitions or joint ventures do not advance our business strategy, or fail to produce satisfactory returns on investment. Other risks include:
difficulties integrating acquisitions with our operations, applying internal control processes to these acquisitions (including those related to cybersecurity), managing strategic investments, assimilating new capabilities to meet the future needs of our businesses, and/or combining business cultures;
regulatory or compliance exposure until appropriate processes and controls are implemented;
integration costs and significant attention from management and personnel;
failing to realize the anticipated benefits of acquisitions or joint ventures, or realized benefits being significantly delayed, including because the technologies or products acquired may not be complementary or compatible with our business strategy or product portfolio, may not broaden our market position, product portfolio or footprint, or enhance our ability to deliver value to our customers; and
due diligence evaluations of potential transactions not identifying all of the business, legal, compliance, and financial risks to accurately estimate the impact of a particular acquisition or joint venture, including potential exposure to regulatory sanctions resulting from an acquisition target’s previous activities or costs associated with any quality issues with an acquisition target’s products or services.
Our reputation and brand could be damaged by negative publicity.
Our brand has worldwide recognition and contributes to the success of our business. Our reputation is critical for growing our customer base. Our brand depends on the ability to maintain a positive customer perception of the business. Negativeclaims or publicity across media channels involving us, our products or services, our culture and values, our stance on environmental, social, and governance topics, customer data, or any of our key employees or suppliers, may damage our reputation and brand image, regardless of whether such claims are accurate. Furthermore, our shareholders, customers, and other stakeholders have evolving, varied and often conflicting expectations regarding our culture, values, and our business, which makes it difficult to achieve a uniform positive perception amongst all stakeholders.
Additionally, negative or inaccurate postings, articles, or comments on social media, the internet, or the press about us have generated, and could continue to generate negative publicity that damages the reputation of our brand. For example, we have experienced negative social media campaigns related to our approach to diversity and inclusion, our customers’ right to maintain and safely repair their equipment, including with respect to our Memorandum of Understanding with the American Farm Bureau Federation, reductions in workforce, and production relocation. Further, adverse publicity about regulatory or legal action against us, or legal proceedings initiated by us, also damages our reputation and brand image, undermining customer confidence, and reducing long-term demand for equipment, even if the regulatory or legal action is unfounded or not material to our operations. If the reputation, culture, or image of our brands are damaged, or we receive negative publicity, then our sales and financial condition, and results of operations could be materially and adversely affected.
TALENT RISKS
Our ability to attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy.
Our continued success depends, in part, on our ability to identify and attract qualified candidates with the requisite education, background, and experience, as well as our ability to develop, engage, and retain qualified employees. Failure to attract, develop, engage, and retain qualified employees, difficulty in recruiting new employees, perceived or actual erosion of our culture, or inadequate resources to train, integrate, and retain qualified employees, could impair our ability to execute our business strategy and could adversely affect our business, results of operations, and financial condition.
In addition, our culture and our values have been important contributors to our success to date and we believe promote a sense of pride and fulfillment in our employees. Failure to preserve our culture or focus on our values could negatively affect our ability to retain and recruit talent.
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While we strive to reduce the impact of the departure of employees, our operations or ability to execute our business strategy may be affected by the loss of employees, including in connection with reductions in workforce. Reductions may adversely affect us as a result of decreased employee morale, the loss of institutional knowledge, the allocation of resources to reorganize and reassign job roles and responsibilities, and the increased risk of litigation from former employees.
Our business may be adversely affected by any disruptions caused by union activities.
Many of our production and maintenance employees are represented by labor unions under various collective bargaining agreements with different expiration dates. There is no certainty that we will successfully negotiate new agreements with these unions that extend beyond the current expiration dates, or that these new agreements will be on terms that will allow us to be competitive.
Our failure to successfullyrenegotiate labor agreements as they expire has, from time to time led, and could in the future lead, to work stoppages or other disputes with labor unions. Any strike, work stoppage, or other dispute with a labor union distracts management from operating the business, may displace employees from ordinary job positions to fill in vacant positions, may affect our reputation, and could adversely affect our business, results of operations, and financial condition.
In addition, additional employees may choose to join or seek recognition for forming a labor union. If additional employees organize in the future, such employees may threaten and/or engage in work stoppages or organize campaigns. The outcomes from such actions may affect our reputation, and could adversely affect our business, results of operations, and financial condition.
CYBERSECURITY AND DIGITAL RISKS
Security breaches and other disruptions to our information technology infrastructure could interfere with our operations and could compromise our information as well as information about our employees, customers, suppliers, and/or dealers, exposing us to liability that could cause our business and reputation to suffer.
We rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit, and store electronic information and to manage or support a variety of products within our portfolio, business processes and activities, including supporting our customers’ operations, products and solutions, supply chain, manufacturing, distribution, invoicing, and collection of payments from customers and dealers. We use information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements.
Additionally, we collect and store confidential data, including intellectual property, proprietary business information, and the proprietary business information of our customers, suppliers, and dealers, as well as personal data of our customers and employees in data centers, which are often owned by third parties and maintained on their information technology networks. In particular, the John Deere Operations Center ™, our digital management system that allows customers to access farm and jobsite information through their devices, stores substantial volumes of data at the edge and within cloud environments. This data is used to assist and support our customers’ operations and machines, and to enhance and develop our product offerings, including the development of machine learning, large language models and SaaS products. The secure operation of these information technology networks, and the processing and maintenance of this information, are critical to our business operations and strategy.
Despite security measures designed to discover and address potential vulnerabilities, our information technology networks and infrastructure have been and may continue to be vulnerable to: (i) intrusion, (ii) exfiltration of data, (iii) damage, (iv) disruptions or shutdowns due to attacks by cyber criminals or foreign state actors, (v) employees’, suppliers’, or dealers’ error or malfeasance, (vi) supply chain compromise, (vii) disruptions during the process of upgrading or replacing computer software or hardware, (viii) power and systems outages, (ix) computer viruses, (x) ransomware or other malware, (xi) telecommunication or utility failures, (xii) terrorist acts, (xiii) natural disasters, (xiv) and other events.
Our reliance on cloud-based systems owned by third parties creates particular risks. Because we do not control the underlying infrastructure, we depend on the security and reliability of third-party providers, and any outage, misconfiguration, or loss of data could compromise the integrity of our and our customers’ operations and impair the execution of our business strategy and the achievement of our goals.
Although we have not suffered any significant cyber incidents that have resulted in material business impact, we have from time to time been, and expect to continue to be, the target of malicious cyber threat actors. The occurrence of any significant event could compromise our networks, and the information stored there could be accessed, obtained, publicly disclosed, lost, altered, misused, or stolen. Any such access, acquisition, disclosure, alteration, misuse, or other loss of information could result in legal claims or proceedings, government investigations, liability or regulatory penalties, disruption or shut down of our operations, disruption or shut down of our dealers’ and customers’ operations, and damage to our reputation, which could adversely affect our business, results of
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operations, and financial condition. Furthermore, as security threats continue to evolve and increase in frequency and sophistication, we may need to invest additional resources to enhance information security.
Any unauthorized control or manipulation of our products’ systems could result in a loss of confidence in us and our products.
Some of our products include connectivity hardware and software typically used for remote system updates. While we have implemented security measures intended to protect againstunauthorized remote access to these products, maliciousthreat actors have attempted, and may attempt in the future, to gainunauthorized access to such products in order to gain control of the products, change the products’ functionality, user interface, or performance characteristics, interfere with the products’ operations, or gain access to data stored in or generated by the products or to systems to which they connect.
In addition, reports of unauthorized access to our products, systems, and data, regardless of their accuracy or reliability, have resulted, and may in the future result, in the perception that the products, systems, or data are vulnerable to malicious or unauthorized modifications. Any unauthorized access to or control of our products or systems, any loss of data, or any perception that products, systems, or data are vulnerable could result in loss of sales based on customers’ loss of confidence in our products, legal claims or proceedings against us, government investigation, liability, or regulatory penalties, which could adversely affect our business, results of operations, and financial condition.
Technical or regulatory limitations may impact our ability to effectively implement automation, autonomy, and artificial intelligence solutions.
We utilize and intend to expand our use of automation and machine learning in many of our products, including consumer-facing features, and we leverage generative artificial intelligence in our business processes. For example, we use automation software, digital tools, applications, and analytics on the S7 Series Combines and our See & Spray™ targeted spraying solution. In addition, we maintain the John Deere Operations Center™, which stores substantial volumes of data with respect to our customers’ operations and that we use to support our customers and to develop or enhance our product offerings.
While we believe the use of these emerging technologies can present significant benefits, they also create risks and challenges. Data sourcing, technology, integration and process issues, bias in decision-making algorithms, concerns over intellectual property, reputational implications if use becomes controversial, system security concerns, or the protection of privacy could impair the adoption and acceptance of autonomous machine solutions. Additionally, if we are unable to match or surpass the advances of artificial intelligence that our competitors implement for their products or for internal operations, our competitive position could be impacted.
Furthermore, any confidential information that is disclosed to a third-party generative artificial intelligence platform could be leaked or disclosed to others, including sensitive information that is used to train the third parties’ model. Additionally, if the data used to train the solution or the content, analyses, or recommendations that the machine learning and intelligence applications assist in producing is deemed to be inaccurate, incomplete, biased or questionable, our brand and reputation may be harmed, and we may be subject to legal liability claims. The development of our own artificial intelligence applications will require additional investment in the development of proprietary systems, models, or datasets, which are complex, costly and could impact the results of our operations. Developing, testing, and deploying these technologies may also increase the cost profile of our products due to the level of investment needed to enable such initiatives. In addition, there is no guarantee that we will be able to develop such applications and execute on the longer-term aspects of our business strategy.
Disruption of our technology systems or unexpected network interruption could disrupt our business.
We are increasingly dependent on technology systems to operate on a day-to-day basis. The failure of our technology systems, including the John Deere Operations Center™, to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in integrating new systems, could adversely affect our business. These disruptions could result in delays, which could reduce demand for our products and cause our sales to decline. In addition, if changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to manage our growth and new technologies, we could lose customers. Any significant disruption in our technology systems could harm our reputation and credibility and could have a material adverse effect on our business, financial condition, and results of operations.
LEGAL AND REGULATORY COMPLIANCE RISKS
Our global operations are subject to complex and changing laws and regulations, the violation of which could expose us to potential liabilities, increased costs, and other adverse effects.
We are subject to numerous international, federal, state, and local laws, regulations, and executive orders; many of which are complex, frequently changing, and subject to varying interpretations.
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These laws, regulations, and executive orders cover a variety of subjects, including advertising, anti-money laundering, antitrust, autonomy systems, consumer finance, environmental, climate-related, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, import/export and trade, human rights, labor and employment, product liability reporting, cybersecurity, data privacy, encryption, artificial intelligence, telecommunications, and drones. Changes to existing laws, regulations, executive orders, and enforcement priorities, changes to how they are interpreted, or the implementation of new, more stringent laws, regulations, and executive orders, could adversely affect our business by increasing compliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and services less attractive to customers. Failure to comply with these laws, regulations, and executive orders could result in fines and penalties. For example, in the U.S., we could lose government contracts and be subject to penalties if we fail to comply with executive orders. In addition, we must comply with the U.S. Foreign Corrupt Practices Act (FCPA) and all applicable foreign anti-bribery and anti-corruption laws. These laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value to improperly influence government officials or private individuals for the purpose of obtaining or retaining a business advantage, regardless of whether those practices are culturally expected in a particular jurisdiction. Although we have a compliance program in place designed to reduce the likelihood of potential violations of these laws and regulations, our employees, contractors, or agents have violated, and in the future could violate such laws and regulations or our policies and procedures. Violations of these laws and regulations have resulted, and could result in the future, in criminal or civil sanctions and may have a material adverse effect on our reputation, business, results of operations, and financial condition.
Governmental actions designed to address climate change based on the emergence of new technologies and business models in connection with the transition to a lower-carbon economy could adversely affect John Deere and our customers.
Climate change considerations have led to new international, national, regional, and local legislative and regulatory responses. Various stakeholders, including legislators and regulators, shareholders, and non-governmental organizations, as well as companies in many business sectors, including us, are continuing to look for ways to reduce greenhouse gas (GHG) emissions. The regulation of GHG emissions from certain stationary or mobile sources or the imposition of carbon pricing mechanisms could result in additional costs to us in the form of taxes or emission allowances, required facilities improvements, research and development investments, and increased energy costs. These results would increase our operating costs through higher utility, transportation, and material costs and could prevent us from selling products into certain markets. Increased input costs, such as fuel and fertilizer, and compliance-related costs could also affect customer operations and demand for our equipment.
Regulators in Europe and the U.S. have also focused efforts on increasing disclosures by companies related to climate change and mitigation efforts. These disclosure rules increase compliance burdens and associated regulatory costs. On the other hand, conflicting views on environmental topics, including GHG emissions reduction goals or other commitments addressing certain climate issues, are becoming increasingly subject to scrutiny from private sectors and governmental authorities. These conflicting views may impact our business and reputation. Further, our financial services segment is subject to additional international and national regulations relating to climate and environmental risk, which are continually evolving and could affect the financing operations and climate-risk processes developed by the segment.
Legal proceedings, disputes and government inquiries and investigations could harm our business, financial condition, reputation, and brand.
We routinely are a party to claims and legal actions and the subject of government inquiries and investigations, the most prevalent of which relate to antitrust (including class action litigation), product liability (including asbestos-related liability), employment, patent, and trademark. The defense of lawsuits and government inquiries and investigations have resulted and will continue to result in expenditures of significant financial resources and the diversion of management’s time and attention away from business operations. Adverse decisions in one or more of these claims, actions, inquiries, or investigations could require us to pay substantial damages, fines, or sanctions, undertake actions to modify our business model or services, initiate recall campaigns, or take other costly actions. It is therefore possible that legal judgments or investigations could give rise to expenses that are not covered, or not fully covered, by our insurance programs and could affect our financial position and results.
We are currently subject to a consolidated multidistrict class action lawsuit in the Northern District of Illinois alleging that we have engaged in attempted monopolization, exclusionary conduct, and restraint of the market for repair services for John Deere brand agricultural equipment by limiting repair resources only to our authorized technicians or independent authorized John Deere dealers. In addition, the Federal Trade Commission (FTC) and the Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota, and Wisconsin filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division alleging similar claims. See Item 3 Legal Proceedings. The development and resolution of these matters could have a material adverse effect on our business, operations, and financial results.
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Our business could be adversely affected by the infringement or loss of intellectual property rights.
We protect our intellectual property with a combination of patents, trademarks, copyrights, trade secret laws, and legal agreements. We heavily rely on certain trademarks to protect our identity and customer recognition of our products and services, including, but not limited to, the “John Deere” mark, the leaping deer logo, the “Nothing Runs Like a Deere” slogan, and the green and yellow color combination. These trademarks, as well as the many patents that protect innovations used in our products, are integral to our business, and their loss could have a material adverse effect on us. Additionally, from time to time, third parties initiate legal proceedings to challenge the validity of our intellectual property or allege that we infringe on their intellectual property. We may incur substantial costs related to such legal proceedings. If the outcome of any such legal proceedings is unfavorable to us, our business could be adversely affected.
excellence
best
enabled
solving
problems
accomplishments
Deeper integration of technology into equipment to enable customers to do more with less remains a persistent market trend. Customers seek to improveprofitability, 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 allegesmonopolization 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
% Change
Cost of sales to net sales
(-) 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
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
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
Decreased due to lower average borrowing rates and lower average borrowings.
Other operating expenses
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
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
% Change
Net sales
Sales volume and other
Price realization
Currency translation
Operating profit
Operating margin
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
% Change
Net sales
Sales volume and other
Price realization
Currency translation
Operating profit
Operating margin
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
% Change
Net sales
Sales volume and other
Price realization
Currency translation
Operating profit
Operating margin
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
% Change
Revenue (including intercompany)
Average balance of receivables and leases excluding BJD
Interest expense
Average borrowings
Average borrowing rates
Net income
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
Total
2025 Expense (benefit)
Litigation accrual
Impairment
BJD measurement
Total expense (benefit)
2024 Expense (benefit)
Legal settlements
Impairment
Employee-separation programs
BJD measurement
Total expense (benefit)
Year over year change
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
Net cash provided by operating activities
Net cash used for investing activities
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
Net increase in cash, cash equivalents, and restricted cash
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
Stable
Moody’s Investors Service, Inc.
Prime-1
Stable
Standard & Poor’s
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:
Pension and OPEB net benefit
Long-term expected return on pension and OPEB plan assets (as a percent)
Long-term expected return on pension and OPEB plan assets
Actual return (loss) on pension and OPEB plan assets
Pension assets, net of pension liabilities
OPEB liabilities, net of OPEB assets
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
Increase
Increase
Percentage
(Decrease)
(Decrease)
Assumptions
Change
PBO/APBO*
Expense
Pensions:
Discount rate**
Expected return on assets
OPEB:
Discount rate**
Expected return on assets
Health care cost
trend rate**
* 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
negativeclaims 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
Net Sales and Revenues
Net sales
Finance and interest income
Other income
Total
Costs and Expenses
Cost of sales
Research and development expenses
Selling, administrative and general expenses
Interest expense
Interest compensation to Financial Services
Other operating expenses
Total
Income before Income Taxes
Provision for income taxes
Income after Income Taxes
Equity in income (loss) of unconsolidated affiliates
Net Income
Less: Net loss attributable to noncontrolling interests
Net Income Attributable to Deere & Company
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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SUPPLEMENTAL CONSOLIDATING DATA (continued)
CONDENSED BALANCE SHEETS
As of November 2, 2025 and October 27, 2024
Unaudited
EQUIPMENT
FINANCIAL
OPERATIONS
SERVICES
ELIMINATIONS
CONSOLIDATED
ASSETS
Cash and cash equivalents
Marketable securities
Receivables from Financial Services
Trade accounts and notes receivable – net
Financing receivables – net
Financing receivables securitized – net
Other receivables
Equipment on operating leases – net
Inventories
Property and equipment – net
Goodwill
Other intangible assets – net
Retirement benefits
Deferred income taxes
Other assets
Assets held for sale
Total Assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Short-term borrowings
Short-term securitization borrowings
Payables to Equipment Operations
Accounts payable and accrued expenses
Deferred income taxes
Long-term borrowings
Retirement benefits and other liabilities
Liabilities held for sale
Total liabilities
Commitments and contingencies (Note 20)
Redeemable noncontrolling interest (Note 2)
STOCKHOLDERS’ EQUITY
Total Deere & Company stockholders’ equity
Noncontrolling interests
Financial Services' equity
Adjusted total stockholders' equity
Total Liabilities and Stockholders’ Equity
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.
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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
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses
Depreciation and amortization
Impairments and other adjustments
Share-based compensation expense
Distributed earnings of Financial Services
Provision (credit) for deferred income taxes
Changes in assets and liabilities:
Receivables related to sales
Inventories
Accounts payable and accrued expenses
Accrued income taxes payable/receivable
Retirement benefits
Other
Net cash provided by operating activities
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)
Proceeds from maturities and sales of marketable securities
Proceeds from sales of equipment on operating leases
Cost of receivables acquired (excluding receivables related to sales)
Acquisitions of businesses, net of cash acquired
Purchases of marketable securities
Purchases of property and equipment
Cost of equipment on operating leases acquired
Decrease (increase) in investment in Financial Services
Decrease (increase) in trade and wholesale receivables
Collections of receivables from unconsolidated affiliates
Loans to unconsolidated affiliates
Collateral on derivatives – net
Other
Net cash provided by (used for) investing activities
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)
Change in intercompany receivables/payables
Proceeds from borrowings issued (original maturities greater than three months)
Payments of borrowings (original maturities greater than three months)
Repurchases of common stock
Capital investment from (returned to) Equipment Operations
Dividends paid
Other
Net cash provided by (used for) financing activities
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year
Cash, Cash Equivalents, and Restricted Cash at End of Year
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.
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SELECTED FINANCIAL DATA
Net sales and revenues
Net sales
Finance and interest income
Research and development expenses
Selling, administrative and general expenses
Interest expense
Net income*
Return on net sales
Return on beginning Deere & Company stockholders’ equity
Comprehensive income*
Net income per share – basic*
– diluted*
Dividends declared per share
Dividends paid per share
Average number of common shares outstanding (in millions) – basic
– diluted
Total assets
Trade accounts and notes receivable – net
Financing receivables – net
Financing receivables securitized – net
Equipment on operating leases – net
Inventories
Property and equipment – net
Short-term borrowings
Short-term securitization borrowings
Long-term borrowings
Total Deere & Company stockholders’ equity
Book value per share*
Capital expenditures
Number of employees (at year-end)
* Attributable to Deere & Company .
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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:
Australian dollar
Brazilian real
British pound
Canadian dollar
Euro
Indian rupee
Japanese yen
Mexican peso
Polish zloty
Swedish krona
All other
Total increase (decrease)
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.
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DEERE & COMPANY
STATEMENTS OF CONSOLIDATED INCOM E
For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023
Net Sales and Revenues
Net sales
Finance and interest income
Other income
Total
Costs and Expenses
Cost of sales
Research and development expenses
Selling, administrative and general expenses
Interest expense
Other operating expenses
Total
Income of Consolidated Group before Income Taxes
Provision for income taxes
Income of Consolidated Group
Equity in income (loss) of unconsolidated affiliates
Net Income
Less: Net loss attributable to noncontrolling interests
Net Income Attributable to Deere & Company
Per Share Data
Basic
Diluted
Dividends declared
Dividends paid
Average Shares Outstanding (in millions of shares)
Basic
Diluted
The notes to consolidated financial statements are an integral part of this statement.
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DEERE & COMPANY
STATEMENTS OF CONSOLIDATED COMPREHENSIVE IN COME
For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023
Net Income
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment
Cumulative translation adjustment
Unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities
Other Comprehensive Income (Loss), Net of Income Taxes
Comprehensive Income
Less: Comprehensive loss attributable to noncontrolling interests
Comprehensive Income Attributable to Deere & Company
The notes to consolidated financial statements are an integral part of this statement.
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DEERE & COMPANY
CONSOLIDATED BALANCE SHEETS
As of November 2, 2025 and October 27, 2024
ASSETS
Cash and cash equivalents
Marketable securities
Trade accounts and notes receivable – net
Financing receivables – net
Financing receivables securitized – net
Other receivables
Equipment on operating leases – net
Inventories
Property and equipment – net
Goodwill
Other intangible assets – net
Retirement benefits
Deferred income taxes
Other assets
Assets held for sale
Total Assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Short-term borrowings
Short-term securitization borrowings
Accounts payable and accrued expenses
Deferred income taxes
Long-term borrowings
Retirement benefits and other liabilities
Liabilities held for sale
Total liabilities
Commitments and contingencies (Note 20)
Redeemable noncontrolling interest (Note 2)
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
Common stock in treasury, 266,079,164 shares in 2025 and 264,678,912 shares in 2024, at cost
Retained earnings
Accumulated other comprehensive income (loss)
Total Deere & Company stockholders’ equity
Noncontrolling interests
Total stockholders’ equity
Total Liabilities and Stockholders’ Equity
The notes to consolidated financial statements are an integral part of this statement.
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DEERE & COMPANY
STATEMENTS OF CONSOLIDATED CASH F LOWS
For the Years Ended November 2, 2025, October 27, 2024, and October 29, 2023
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses
Depreciation and amortization
Impairments and other adjustments
Share-based compensation expense
Credit for deferred income taxes
Changes in assets and liabilities:
Receivables related to sales
Inventories
Accounts payable and accrued expenses
Accrued income taxes payable/receivable
Retirement benefits
Other
Net cash provided by operating activities
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)
Proceeds from maturities and sales of marketable securities
Proceeds from sales of equipment on operating leases
Cost of receivables acquired (excluding receivables related to sales)
Acquisitions of businesses, net of cash acquired
Purchases of marketable securities
Purchases of property and equipment
Cost of equipment on operating leases acquired
Collections of receivables from unconsolidated affiliates
Loans to unconsolidated affiliates
Collateral on derivatives – net
Other
Net cash used for investing activities
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)
Proceeds from borrowings issued (original maturities greater than three months)
Payments of borrowings (original maturities greater than three months)
Repurchases of common stock
Dividends paid
Other
Net cash provided by (used for) financing activities
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash
Net Increase in Cash, Cash Equivalents, and Restricted Cash
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year
Cash, Cash Equivalents, and Restricted Cash at End of Year
Components of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents
Cash, cash equivalents, and restricted cash (Assets held for sale – Note 4)
Restricted cash (Other assets)
Total Cash, Cash Equivalents, and Restricted Cash
The notes to consolidated financial statements are an integral part of this statement.
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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
Net income (loss)
Other comprehensive income (loss)
Repurchases of common stock
Treasury shares reissued
Dividends declared
Share based awards and other
Balance October 29, 2023
Net income (loss)
Other comprehensive income (loss)
Repurchases of common stock
Treasury shares reissued
Dividends declared
Noncontrolling interest redemption (Note 4)
Share based awards and other
Balance October 27, 2024
Net income (loss)
Other comprehensive income
Repurchases of common stock
Treasury shares reissued
Dividends declared
Share based awards and other
Balance November 2, 2025
The notes to consolidated financial statements are an integral part of this statement.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note Listing
Page
Organization and Consolidation
Summary of Significant Accounting Policies and New Accounting Pronouncements
Acquisitions and Dispositions
Special Items
Revenue Recognition
Supplemental Cash Flow Information
Pension and Other Postretirement Benefits
Income Taxes
Other Income and Other Operating Expenses
Marketable Securities
Receivables
Securitization of Financing Receivables
Inventories
Property and Depreciation
Goodwill and Other Intangible Assets ‒ Net
Other Assets
Short-Term Borrowings
Accounts Payable and Accrued Expenses
Long-Term Borrowings
Commitments and Contingencies
Capital Stock and Net Income per Share
Share-Based Compensation
Other Comprehensive Income Items
Leases
Fair Value Measurements
Derivative Instruments
Segment Data
Subsequent Event
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:
Receivables from unconsolidated affiliates – “Other receivables”
Investments in unconsolidated affiliates – “Other assets”
Carrying value of assets related to VIE
Guarantees
Maximum exposure to loss
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. 2023-05 — 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. 2025-07 — 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 DISPOSITION S
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 improvingprofitability, 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
Trade accounts and notes receivable – net
Financing receivables – net
Deferred income taxes
Other miscellaneous assets
Valuation allowance
Total assets
Short-term borrowings
Accounts payable and accrued expenses
Long-term borrowings
Retirement benefits and other liabilities
Total liabilities
Total intercompany payables
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 infringementclaims. 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
Total
Employee-Separation Programs:
Cost of sales
Research and development expenses
Selling, administrative and general expenses
Total operating profit decrease
Non-operating profit expenses*
Total
* 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.
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
Total
Primary geographic markets:
United States
Canada
Western Europe
Central Europe and CIS
Latin America
Asia, Africa, Oceania, and Middle East
Total
Major product lines:
Production agriculture
Small agriculture
Turf
Construction
Compact construction
Roadbuilding
Forestry
Financial products
Other
Total
Revenue recognized:
At a point in time
Over time
Total
PPA
SAT
Total
Primary geographic markets:
United States
Canada
Western Europe
Central Europe and CIS
Latin America
Asia, Africa, Oceania, and Middle East
Total
Major product lines:
Production agriculture
Small agriculture
Turf
Construction
Compact construction
Roadbuilding
Forestry
Financial products
Other
Total
Revenue recognized:
At a point in time
Over time
Total
PPA
SAT
Total
Primary geographic markets:
United States
Canada
Western Europe
Central Europe and CIS
Latin America
Asia, Africa, Oceania, and Middle East
Total
Major product lines:
Production agriculture
Small agriculture
Turf
Construction
Compact construction
Roadbuilding
Forestry
Financial products
Other
Total
Revenue recognized:
At a point in time
Over time
Total
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
Later years
Total
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:
Cash paid for interest
Cash paid for income taxes
Inventory transferred to equipment on operating leases
Accounts payable related to purchases of property and equipment
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:
Pensions:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial (gain) loss
Amortization of prior service cost
Settlements/curtailments
Net benefit
Weighted-average assumptions:
Discount rates – service cost
Discount rates – interest cost
Rate of compensation increase
Expected long-term rates of return
Interest crediting rate – U.S. cash balance plans
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:
OPEB:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain
Amortization of prior service credit
Net cost
Weighted-average assumptions:
Discount rates – service cost
Discount rates – interest cost
Expected long-term rates of return
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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
Change in benefit obligations:
Beginning of year balance
Service cost
Interest cost
Actuarial gain (loss)
Benefits paid
Health care subsidies
Foreign exchange and other
End of year balance
Change in plan assets (fair value):
Beginning of year balance
Plan assets actual gain (loss)
Employer contribution
Benefits paid
Foreign exchange and other
End of year balance
Funded status
Weighted-average assumptions:
Discount rates
Rate of compensation increase
Interest crediting rate – U.S. cash balance plans
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:
Initial year
Second year
Ultimate
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:
Total accumulated benefit obligations for all plans
Plans with accumulated benefit obligation exceeding fair value of plan assets:
Accumulated benefit obligations
Fair value of plan assets
Plans with projected benefit obligation exceeding fair value of plan assets:
Projected benefit obligations
Fair value of plan assets
The pension and OPEB amounts recognized in the balance sheet at November 2, 2025, and October 27, 2024, consisted of the following:
Pensions
OPEB
Noncurrent asset
Less: Current liability
Less: Noncurrent liability
Total
The retirement benefits and other liabilities recognized in the balance sheet at November 2, 2025, and October 27, 2024, consisted of the following:
Deferred compensation – current
Deferred compensation and other – noncurrent
Pensions and OPEB – current
Pensions and OPEB – noncurrent
Total
The amounts recognized in accumulated other comprehensive income ‒ pretax at November 2, 2025, and October 27, 2024, consisted of the following:
Pensions
OPEB
Net actuarial (gain) loss
Prior service cost
Total
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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*
* 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
Equity:
U.S. equity securities
International equity securities and funds
Fixed Income:
Government and agency securities
Corporate debt securities
Mortgage-backed securities
Other investments
Derivative contracts – assets
Derivative interest rate contracts – liabilities
Receivables and payables
Securities lending collateral
Securities lending liability
Securities sold short
Total of Level 1 and Level 2 assets
Investments at net asset value:
Short-term investments
U.S. equity funds
International equity funds
Fixed income funds
Real estate funds
Hedge funds
Private equity
Venture capital
Other investments
Total net assets
The fair values of the OPEB health care assets at November 2, 2025, follow:
Total
Level 1
Level 2
Cash and short-term investments
Equity securities
Fixed Income:
Government and agency securities
Corporate debt securities
Mortgage-backed securities
Other
Securities lending collateral
Securities lending liability
Total of Level 1 and Level 2 assets
Investments at net asset value:
U.S. equity funds
International equity funds
Fixed income funds
Real estate funds
Hedge funds
Private equity
Venture capital
Other investments
Total net assets
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The fair values of the pension plan assets at October 27, 2024, follow:
Total
Level 1
Level 2
Cash and short-term investments
Equity:
U.S. equity securities
International equity securities and funds
Fixed Income:
Government and agency securities
Corporate debt securities
Mortgage-backed securities
Other investments
Derivative contracts – assets
Derivative interest rate contracts – liabilities
Receivables, prepaids, and payables
Securities lending collateral
Securities lending liability
Securities sold short
Total of Level 1 and Level 2 assets
Investments at net asset value:
Short-term investments
U.S. equity funds
International equity funds
Fixed income funds
Real estate funds
Hedge funds
Private equity
Venture capital
Other investments
Total net assets
The fair values of the OPEB health care assets at October 27, 2024, follow:
Total
Level 1
Level 2
Cash and short-term investments
Fixed Income:
Government and agency securities
Corporate debt securities
Mortgage-backed securities
Other
Securities lending collateral
Securities lending liability
Total of Level 1 and Level 2 assets
Investments at net asset value:
U.S. equity funds
International equity funds
Fixed income funds
Real estate funds
Hedge funds
Private equity
Venture capital
Other investments
Total net assets
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
Debt
Real estate
Other investments
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:
Current:
Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
Provision for income taxes
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:
U.S. federal income tax provision at the U.S. statutory rate ( 21 %)
State and local taxes, net of federal effect
Other impacts of Tax Cuts and Jobs Act of 2017
Rate differential on foreign subsidiaries
Research and business tax credits
Excess tax benefits on equity compensation
Valuation allowances
Unrecognized tax benefits
Differences in taxability of foreign earnings
Other – net
Provision for income taxes
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:
Deferred
Deferred
Deferred
Deferred
Tax
Tax
Tax
Tax
Assets
Liabilities
Assets
Liabilities
Accrual for employee benefits
Accrual for sales allowances
Allowance for credit losses
Amortization of R&D expenditures
Deferred compensation
Goodwill and other intangible assets
Lessee lease transactions
Lessor lease transactions
OPEB – net
Pension – net
Share-based compensation
Tax loss and tax credit carryforwards
Tax over book depreciation
Unearned revenue
Other items
Less: valuation allowances
Total
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:
Beginning of year balance
Increases to tax positions taken during the current year
Increases to tax positions taken during prior years
Decreases to tax positions taken during the current year
Decreases to tax positions taken during prior years
Decreases due to lapse of statute of limitations
Other
Foreign exchange
End of year balance
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:
Other income:
Revenues from services
Extended warranty premiums earned
Trademark licensing income
Operating lease disposition gains
Investment income
Other
Total
Other operating expenses:
Depreciation of equipment on operating leases
Extended warranty claims
Cost of services
Pension and OPEB benefit, excluding the service cost component
Foreign exchange loss
Other
Total
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:
Purchases
Maturities and sale proceeds
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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
Corporate debt securities
International debt securities
Mortgage-backed securities*
Municipal debt securities
U.S. government debt securities
Total
Corporate debt securities
International debt securities
Mortgage-backed securities*
Municipal debt securities
U.S. government debt securities
Total
* 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
Due after one through five years
Due after five through 10 years
Due after 10 years
Mortgage-backed securities
Debt securities
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 no r 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:
Net gain recognized on equity securities
Less: Net gain on equity securities sold
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:
Trade accounts and notes receivable:
Production & Precision Agriculture
Small Agriculture & Turf
Construction & Forestry
Trade accounts and notes receivable – net
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:
Beginning of year balance
Provision
Write-offs
Translation adjustments
End of year balance*
* 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:
Unrestricted/Securitized
Unrestricted/Securitized
Retail notes:
Agriculture and turf
Construction and forestry
Total
Wholesale notes
Revolving charge accounts
Financing leases (direct
and sales-type)
Total financing receivables
Less:
Unearned finance income:
Retail notes
Wholesale notes
Revolving charge accounts
Financing leases
Total
Allowance for credit losses
Financing receivables – net
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:
Retail notes*:
Agriculture and turf
Construction and forestry
Total
Wholesale notes
Direct financing and sales-type leases*
Total financing receivables
Less:
Unearned finance income:
Retail notes
Wholesale notes
Direct financing and sales-type leases
Total
Financing receivables related to our sales of equipment
* These balances arise from sales and direct financing leases of equipment by company-owned dealers or through direct sales.
Financing receivable installments, including unearned finance income, at November 2, 2025, and October 27, 2024, were scheduled as follows:
Unrestricted/Securitized
Unrestricted/Securitized
Due in months:
Thereafter
Total
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
Retail customer receivables:
Agriculture and turf:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Construction and forestry:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Total
Write-offs for the period ended November 2, 2025 :
Agriculture and turf
Construction and forestry
Total
November 2, 2025
Prior Years
Revolving Charge Accounts
Total
Retail customer receivables:
Agriculture and turf:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Construction and forestry:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Total
Write-offs for the period ended November 2, 2025:
Agriculture and turf
Construction and forestry
Total
October 27, 2024
Retail customer receivables:
Agriculture and turf:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Construction and forestry:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Total
Write-offs for the period ended October 27, 2024:
Agriculture and turf
Construction and forestry
Total
October 27, 2024
Prior Years
Revolving Charge Accounts
Total
Retail customer receivables:
Agriculture and turf:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Construction and forestry:
Current
30-59 days past due
60-89 days past due
90+ days past due
Non-performing
Total
Write-offs for the period ended October 27, 2024:
Agriculture and turf
Construction and forestry
Total
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The credit quality and aging analysis of wholesale receivables was as follows:
Wholesale receivables:
Agriculture and turf:
Current
30+ days past due
Non-performing
Construction and forestry:
Current
30+ days past due
Non-performing
Total
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
Allowance:
Beginning of year balance
Provision
Write-offs
Recoveries
End of year balance*
Financing receivables:
End of year balance
Allowance:
Beginning of year balance
Provision
Provision reversal for assets held for sale
Provision subtotal
Write-offs
Recoveries
Translation adjustments
End of year balance*
Financing receivables:
End of year balance
Allowance:
Beginning of year balance
Provision
Provision reversal for assets held for sale
Provision (credit) subtotal
Write-offs
Recoveries
Translation adjustments
End of year balance*
Financing receivables:
End of year balance
* 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:
Percent of financing receivables portfolio:
Past-due amounts
Non-performing
Allowance for credit losses
Deposits held as credit enhancements
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:
Current
30-59 days past due
60-89 days past due
Non-performing
Total
Percent of financing receivables portfolio
Modifications offered include payment deferrals, term extensions, or a combination thereof. The weighted-average effects for contract modifications were as follows in months:
Payment deferral
Term extension
Combination modifications
Payment deferral
Term extension
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 .
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:
Number of receivable contracts
Pre-modification balance
Post modification balance
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:
Taxes receivable
Collateral on derivatives
Receivables from unconsolidated affiliates
Other
Other receivables
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:
We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE).
The SPE issues debt to investors. The debt is secured by the financing receivables.
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:
Financing receivables securitized (retail notes)
Allowance for credit losses
Other assets (primarily restricted cash)
Total restricted securitized assets
Short-term securitization borrowings
Accrued interest on borrowings
Total liabilities related to restricted securitized assets
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:
Raw materials and supplies
Work-in-process
Finished goods and parts
Total FIFO value
Excess of FIFO over LIFO
Inventories
Percent valued on LIFO basis
14. PROPERTY AND DEPRECIATION
A summary of property and equipment at November 2, 2025, and October 27, 2024, follows:
Useful Lives*
(Years)
Land
Buildings and building equipment
Machinery and equipment
Dies, patterns, tools, etc.
All other
Construction in progress
Total at cost
Less: accumulated depreciation
Property and equipment – net
* Weighted-averages
Property and equipment depreciation during 2025, 2024, and 2023 was $ 934 , $ 898 , and $ 838 , respectively.
Property and equipment by geographic location follows:
Germany
Other countries
Total
15. GOODWILL AND OTHER INTANGIBLE ASSETS – NET
The changes in amounts of goodwill by operating segments were as follows.
PPA
SAT
Total
October 29, 2023
Translation adjustments and other
October 27, 2024
Acquisitions (Note 3)
Translation adjustments and other
November 2, 2025
The components of other intangible assets were as follows:
Customer lists and relationships
Technology, patents, trademarks, and other
Total at cost
Less accumulated amortization:
Customer lists and relationships
Technology, patents, trademarks, and other
Total accumulated amortization
Other intangible assets – net
Actual amortization expense for the past three years and the estimated amortization expense for the next five years follows:
Year
Amortization
Estimated –
16. OTHER ASSETS
Other assets at November 2, 2025, and October 27, 2024, consisted of the following:
Operating lease asset (Note 24)
Capitalized software, net
Investments in unconsolidated affiliates
Deferred charges (including prepaids)
Derivative assets (Note 26)
Prepaid taxes
Parts return asset
Restricted cash
Matured lease & repossessed inventory
Other
Other Assets
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:
Commercial paper
Notes payable to banks
Finance lease obligations due within one year
Long-term borrowings due within one year
Short-term borrowings
The weighted-average interest rates at the end of 2025 and 2024 were:
Short-term borrowings:
Commercial paper
Notes payable to banks
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:
Accounts payable:
Trade payables
Dividends payable
Operating lease liabilities
Deposits withheld from dealers and merchants
Payables to unconsolidated affiliates
Other
Accrued expenses:
Employee benefits
Product warranties
Accrued taxes
Extended warranty premium
Dealer sales incentives
Unearned revenue (contractual liability)
Unearned operating lease revenue
Accrued interest
Derivative liabilities
Parts return liability
Other
Accounts payable and accrued expenses
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:
Underwritten term debt:
U.S. dollar notes and debentures:
6.55 % debentures due 2028
5.375 % notes due 2029
3.10 % notes due 2030
8.10 % debentures due 2030
4.15 % notes due 2030*
7.125 % notes due 2031
5.45 % notes due 2035
3.90 % notes due 2042
2.875 % notes due 2049
3.75 % notes due 2050
5.70 % notes due 2055
Euro notes:
1.85 % notes due 2028 (€ 600 principal)
2.20 % notes due 2032 (€ 600 principal)
1.65 % notes due 2039 (€ 650 principal)
Serial issuances:
Medium-term notes*
Other notes and finance lease obligations
Less: debt issuance costs and debt discounts
Long-term borrowings
* 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:
4.15 % notes due 2030:
Principal
Weighted-average interest rate
Medium-term notes:
Principal
Weighted-average interest rates
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:
Beginning of year balance
Warranty claims paid
New product warranty accruals
Foreign exchange
End of year balance
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)
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:
Net income attributable to Deere & Company
Average shares outstanding
Basic per share
Average shares outstanding
Effect of dilutive stock options and unvested restricted stock units
Total potential shares outstanding
Diluted per share
Shares excluded as antidilutive
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:
Expected volatility of the Company's stock
Risk-free interest rate
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:
Share-based compensation expense
Income tax benefits
Stock options and restricted stock units vested
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:
Risk-free interest rate*
Expected dividends
Volatility*
Expected term (in years)*
* 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
Granted
Exercised
Forfeited
Outstanding at end of year
Exercisable at end of year
* Weighted-averages
The amounts related to stock options were as follows in millions of U.S. dollars unless otherwise noted:
Weighted-average grant date fair value (per share)
Intrinsic value of options exercised
Cash received from exercises
Tax benefit from exercises
Restricted Stock Units
The weighted-average grant date fair values were as follows:
Service-based
Performance/service-based
Market/service-based
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
Granted
Vested
Forfeited
Nonvested at end of year
Performance/service-based:
Nonvested at beginning of year
Granted
Vested
Performance change
Forfeited
Nonvested at end of year
Market/service-based:
Nonvested at beginning of year
Granted
Forfeited
Nonvested at end of year
* Weighted-averages
23. OTHER COMPREHENSIVE INCOME ITEMS
The after-tax components of accumulated other comprehensive income (loss) follow:
Retirement benefits adjustment
Cumulative translation adjustment
Unrealized loss on derivatives
Unrealized loss on debt securities
Accumulated other comprehensive income (loss)
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
Cumulative translation adjustment
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to Interest expense
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)
Reclassification of realized (gain) loss to Other income
Net unrealized gain (loss) on debt securities
Retirement benefits adjustment:
Net actuarial gain (loss)
Reclassification to Other operating expenses through amortization of:
Actuarial (gain) loss
Prior service (credit) cost
Settlements/curtailment
Net unrealized gain (loss) on retirement benefits adjustment
Total other comprehensive income (loss)
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Before
Tax
After
Tax
(Expense)
Tax
Amount
Credit
Amount
Cumulative translation adjustment
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to Interest expense
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)
Reclassification of realized (gain) loss to Other income
Net unrealized gain (loss) on debt securities
Retirement benefits adjustment:
Net actuarial gain (loss)
Reclassification to Other operating expenses through amortization of:
Actuarial (gain) loss
Prior service (credit) cost
Settlements/curtailments
Net unrealized gain (loss) on retirement benefits adjustment
Total other comprehensive income (loss)
Before
Tax
After
Tax
(Expense)
Tax
Amount
Credit
Amount
Cumulative translation adjustment:
Unrealized translation gain (loss)
Reclassification of realized (gain) loss to:
Selling, administrative and general expenses
Other operating expenses
Net unrealized translation gain (loss)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to Interest expense
Net unrealized gain (loss) on derivatives
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)
Net unrealized gain (loss) on debt securities
Retirement benefits adjustment:
Net actuarial gain (loss)
Reclassification to Other operating expenses through amortization of:
Actuarial (gain) loss
Prior service (credit) cost
Settlements
Net unrealized gain (loss) on retirement benefits adjustment
Total other comprehensive income (loss)
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:
Operating lease expense
Short-term lease expense
Variable lease expense
Finance lease:
Depreciation expense
Interest on lease liabilities
Total lease expense
Operating and finance lease right of use assets and lease liabilities follow:
Operating leases:
Other assets
Accounts payable and accrued expenses
Finance leases:
Property and equipment — net
Short-term borrowings
Long-term borrowings
Total finance lease liabilities
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The weighted-average remaining lease terms in years and discount rates follow:
Weighted-average remaining lease terms:
Operating leases
Finance leases
Weighted-average discount rates:
Operating leases
Finance leases
Lease payment amounts in each of the next five years at November 2, 2025, follow:
Operating
Finance
Due in:
Leases
Leases
Later years
Total lease payments
Less: imputed interest
Total lease liabilities
Cash paid for amounts included in the measurement of lease liabilities follows:
Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases
Right of use assets obtained in exchange for lease liabilities follow:
Operating leases
Finance leases
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:
Sales-type and direct finance lease revenues
Operating lease revenues
Variable lease revenues
Total lease revenues
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:
Agriculture and turf
Construction and forestry
Total
Guaranteed residual values
Unguaranteed residual values
Less: unearned finance income
Financing lease receivables
Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at November 2, 2025, follow:
Due in:
Later years
Total
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:
Agriculture and turf
Construction and forestry
Total
Less: accumulated depreciation
Equipment on operating leases – net
Operating lease residual values
First-loss residual value guarantees
Lease payments for operating leases are scheduled as follows:
Due in:
Later years
Total
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:
Carrying
Fair
Carrying
Fair
Value
Value*
Value
Value*
Financing receivables – net
Financing receivables securitized – net
Receivables from unconsolidated affiliates
Short-term securitization borrowings
Long-term borrowings due within one year**
Long-term borrowings**
* 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):
Level 1:
Marketable securities
U.S. government debt securities
Total Level 1 marketable securities
Level 2:
Marketable securities
International fixed income fund
Corporate debt securities
International debt securities
Mortgage-backed securities*
Municipal debt securities
U.S. government debt securities
Total Level 2 marketable securities
Other assets – Derivatives
Accounts payable and accrued expenses – Derivatives
Level 3:
Accounts payable and accrued expenses – Deferred consideration
* Primarily issued by U.S. government sponsored enterprises.
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Fair value, nonrecurring Level 3 measurements from impairments and other adjustments at November 2, 2025, and October 27, 2024, follow:
Fair Value
Losses (Gains)
Property and equipment – net
Other intangible assets – net
Other assets
Assets held for sale
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
Cash flow hedges:
Interest rate contracts
Fair value hedges:
Interest rate contracts
Cross-currency interest rate contracts
Net investment hedges:
Cross-currency interest rate contracts
Not designated as hedging instruments:
Interest rate contracts
Foreign exchange contracts
Cross-currency interest rate contracts
Cash flow hedges:
Interest rate contracts
Fair value hedges:
Interest rate contracts
Cross-currency interest rate contracts
Not designated as hedging instruments:
Interest rate contracts
Foreign exchange contracts
Cross-currency interest rate contracts
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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
Short-term borrowings
Long-term borrowings
Short-term borrowings
Long-term borrowings
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:
Fair value hedges
Interest rate contracts – Interest expense
Cash flow hedges
Recognized in OCI:
Interest rate contracts – OCI (pretax)
Reclassified from OCI:
Interest rate contracts – Interest expense
Net investment hedges
Interest rate contracts – Interest expense
Recognized in OCI:
Interest rate contracts – OCI (pretax)
Not designated as hedges
Interest rate contracts – Net sales
Interest rate contracts – Interest expense
Foreign exchange contracts – Net sales
Foreign exchange contracts – Cost of sales
Foreign exchange contracts – Other operating expenses
Total not designated
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
Assets
Liabilities
Assets
Liabilities
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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
Total
External net sales
External finance and interest income
External other income
Intersegment income
Total segment net sales and revenues
Cost of sales
Interest expense
Other segment items 1
Segment operating profit
External net sales
External finance and interest income
External other income
Intersegment income
Total segment net sales and revenues
Cost of sales
Interest expense
Other segment items 1
Segment operating profit
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PPA
SAT
Total
External net sales
External finance and interest income
External other income
Intersegment income
Total segment net sales and revenues
Cost of sales
Interest expense
Other segment items 1
Segment operating profit
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.
Reconciliation of net sales and revenues
Segment net sales and revenues
External other income 2
Elimination of intersegment revenues
Net sales and revenues
Reconciliation of net income
Segment operating profit
Interest income – excluding FS
Interest expense – excluding FS
Pension and OPEB benefit, excluding service cost component
Corporate other – net 3
Income taxes
Net income
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
Depreciation 4 and amortization expense
PPA
SAT
Intersegment
Total
Total Assets
PPA
SAT
Corporate 5
Total Assets
Capital additions
PPA
SAT
Total
Equity investment in unconsolidated affiliates
PPA
SAT
Total
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 .
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Deere & Company:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Deere & Company and subsidiaries (the "Company") as of November 2, 2025 and October 27, 2024, the related statements of consolidated income, consolidated comprehensive income, changes in consolidated stockholders’ equity and consolidated cash flows for each of the three years in the period ended November 2, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 2, 2025 and October 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended November 2, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of November 2, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 18, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Sales Incentives — Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company offers sales incentive programs to promote the sale of products from the dealer to the retail customer. At the time of the sale to a dealer, the Company records an estimated cost for the sales incentive programs as a reduction to the sales price. The estimated cost of these programs 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 when the dealer sells the equipment to a retail customer. A key assumption is the predictive value of the historical percentage of retail sales incentive costs to retail sales.
The predictive value of the historical percentage for the United States and Canada is a critical audit matter because differences from the historical percentage to current conditions could have a material impact on the sales incentive accrual. Auditing management’s assumptions about the predictive nature of historical sales incentive costs requires a high degree of auditor judgment and an increased extent of effort to evaluate the reasonableness of management’s estimates.
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How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to testing management’s assumption that historical sales incentive costs are predictive of future incentive costs included the following, among others:
We tested the effectiveness of management’s controls over the assumptions used to estimate the sales incentive accrual.
We evaluated management’s ability to accurately forecast future incentive costs by performing a retrospective review that involved comparing actual incentive costs to management’s historical forecasts.
We tested the completeness of the population used in the accrual calculation by inspecting incentive program communications to dealers to ensure programs offered were appropriately included in the calculation.
We tested the accuracy of sales incentive transactions by recalculating the incentives based on the applicable incentive program terms and comparing these amounts to those settled with dealers.
We evaluated the reasonableness of management’s assumption that historical sales incentive costs are predictive of future incentive costs by:
Considering the impact of changes in the current economic conditions and competitive environment.
Comparing historical and current sales incentive data for eligible products in the following manner:
Type and number of programs
Geography
Program size and duration.
Allowance for Credit Losses – Refer to Notes 2 and 11 to the financial statements
Critical Audit Matter Description
The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s 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
geography
credit risk
remaining balance
The Company utilizes linear regression models to estimate the expected credit losses for large and complex retail customer receivable pools, which represent more than 90 percent 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 the reasonable and supportable forecast period.
Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary.
We identified the allowance for credit losses estimated by the linear regression models and related independent variables and qualitative adjustments used in determining the Company’s United States and Canada retail customer receivable portfolios as a critical audit matter because determining the appropriate methodology and assumptions used in the estimate requires significant judgment by management.
Given the subjective nature and judgment applied by management to determine the allowance for credit losses, auditing the methodology and assumptions requires a high degree of auditor judgment and an increased extent of effort, including the need to involve credit specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to test the allowance for credit losses estimated for the Company’s United States and Canada retail customer receivable portfolio by the linear regression models and related independent variables and qualitative adjustments included the following, among others:
We tested the effectiveness of management’s controls over the methodology, data and assumptions used to estimate the allowance for credit losses estimated by the linear regression models.
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We tested the accuracy and evaluated the relevance of the underlying historical data used in the Company’s linear regression models.
With the assistance of our credit specialists, we evaluated the reasonableness and accuracy of the linear regression models used to estimate the allowance for credit losses, including model assumptions and the selection and application of relevant risk characteristics and use of qualitative adjustments.
We evaluated management’s ability to accurately forecast credit losses by performing a retrospective review, which involved comparing actual credit losses to historical estimates.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
December 18, 2025
We have served as the Company’s auditor since 1910.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Deere & Company:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Deere & Company and subsidiaries (the “Company”) as of November 2, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 2, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended November 2, 2025, of the Company and our report dated December 18, 2025, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
December 18, 2025
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Index to Exhibits
Exhibit Number
Description of Exhibit
The Filings Referenced for
Incorporation are Deere & Company
Restated Certificate of Incorporation*
Exhibit 3.1 to Form 10-Q of registrant for the quarter ended July 28, 2019
Certificate of Designation Preferences and Rights of Series A Participating Preferred Stock*
Exhibit 3.2 to Form 10-K of registrant for the year ended October 31, 1998
Bylaws, as amended*
Exhibit 3.2 to Form 10-Q of registrant for the quarter ended July 30, 2023
Form of common stock certificate*
Exhibit 4.6 to Form 10-K of registrant for the year ended October 31, 1998
Indenture, dated September 25, 2008 between the registrant and The Bank of New York Mellon as Trustee*
Exhibit 4.1 to the registration statement on Form S-3ASR no, 333-153704 filed September 26, 2008
Indenture, dated June 15, 2020, among Deere Funding Canada Corporation, as issuer, the registrant, as guarantor, and The Bank of New York Mellon, as Trustee*
Exhibit 4.3 to the registration statement on Form S-3ASR no 333-239165 filed June 15, 2020
Terms and Conditions of the Euro Medium Term Notes, published June 11, 2025, applicable to the U.S. $9,000,000,000 Euro Medium Term Note Programme of the registrant, John Deere Capital Corporation, John Deere Bank S.A., and John Deere Cash Management.
Filed herewith
Description of Deere & Company’s Common Stock*
Exhibit 4.4 to Form 10-K of the registrant for the year ended November 3, 2019
Description of Deere & Company’s 6.55% Debentures Due 2028*
Exhibit 4.6 to Form 10-K of registrant for the year ended November 3, 2019
Certain instruments relating to long-term debt constituting less than 10% of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will furnish copies of such instrument to the Commission upon request.
Agreement, as amended November 1, 1994, between the registrant and John Deere Capital Corporation concerning agricultural retail notes*
Exhibit 10.1 to Form 10-K of registrant for the year ended October 31, 1998
Agreement, as amended November 1, 1994, between the registrant and John Deere Capital Corporation concerning lawn and grounds care retail notes*
Exhibit 10.2 to Form 10-K of registrant for the year ended October 31, 1998
Agreement, as amended November 1, 1994, between John Deere Construction Equipment Company and John Deere Capital Corporation concerning construction retail notes*
Exhibit 10.3 to Form 10-K of registrant for the year ended October 31, 1998
Agreement, dated July 14, 1997, between John Deere Construction Equipment Company and John Deere Capital Corporation concerning construction retail notes*
Exhibit 10.4 to Form 10-K of registrant for the year ended October 31, 2003
Second Amended Agreement, dated March 27, 2023, between the registrant and John Deere Capital Corporation relating to fixed charges ratio, ownership, and minimum net worth of John Deere Capital Corporation*
Exhibit 10.4 to Form 10-Q of registrant for the quarter ended April 30, 2023
Deere & Company Voluntary Deferred Compensation Plan, as amended October 31, 2024*
Exhibit 10.6 to Form 10-K of registrant of the year ended October 27, 2024
John Deere Short-Term Incentive Bonus Plan, as amended October 27, 2023*
Exhibit 10.1 to Form 8-K of registrant filed October 30, 2023
John Deere Long-Term Incentive Cash Plan*
Appendix C to Proxy Statement of registrant filed January 12, 2018
John Deere Omnibus Equity and Incentive Plan, as amended February 25, 2015*
Appendix D to Proxy Statement of registrant filed January 14, 2015
Form of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2025*
Exhibit 10.4 to Form 10-Q of registrant for the quarter ended April 27, 2025
Form of Terms and Conditions for John Deere Restricted Stock Units granted fiscal 2025*
Exhibit 10.5 to Form 10-Q of registrant for the quarter ended April 27, 2025
Form of Terms and Conditions for John Deere Performance Stock Options granted fiscal 2025*
Exhibit 10.6 to Form 10-Q of registrant for the quarter ended April 27, 2025
Form of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2024*
Exhibit 10.10 to Form 10-K of registrant for the year ended October 27, 2024
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Exhibit Number
Description of Exhibit
The Filings Referenced for
Incorporation are Deere & Company
Form of Terms and Conditions for John Deere Restricted Stock Units granted fiscal 2024*
Exhibit 10.11 to Form 10-K of registrant for the year ended October 27, 2024
Form of Terms and Conditions for John Deere Performance Stock Options granted fiscal 2024*
Exhibit 10.12 to Form 10-K of registrant for the year ended October 27, 2024
Form of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2023*
Exhibit 10.10 to Form 10-K of registrant for the year ended October 29, 2023
Form of Terms and Conditions for John Deere Restricted Stock Units and Performance Stock Units granted fiscal 2023*
Exhibit 10.11 to Form 10-K of registrant for the year ended October 29, 2023
Form of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2022*
Exhibit 10.10 to Form 10-K of registrant for the year ended October 30, 2022
Form of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2021*
Exhibit 10.10 to Form 10-K of registrant for the year ended October 31, 2021
Form of John Deere Restricted Stock Unit Grant for Directors*
Exhibit 10.16 to Form 10-K of registrant for the year ended October 29, 2023
Form of John Deere Restricted Stock Unit Grant for Directors*
Exhibit 10.13 to Form 10-K of registrant for the year ended October 31, 2008
Form of Terms and Conditions for Deere & Company Nonemployee Director Stock Ownership Plan*
Exhibit 10.13 to Form 10-K of registrant for the year ended October 31, 2021
John Deere Defined Contribution Restoration Plan, as amended October 31, 2024*
Exhibit 10.21 to Form 10-K of registrant for the year ended October 27, 2024
John Deere Supplemental Pension Benefit Plan, as amended December 31, 2020*
Exhibit 10.15 to Form 10-K of registrant for the year ended October 31, 2021
John Deere Senior Supplementary Pension Benefit Plan, as amended October 31, 2022*
Exhibit 10.23 to Form 10-K of registrant for the year ended October 27, 2024
John Deere ERISA Supplementary Pension Benefit Plan, as amended October 31, 2022*
Exhibit 10.1 to Form 10-Q of registrant for the quarter ended January 29, 2023
Deere & Company Nonemployee Director Stock Ownership Plan, as amended February 29, 2012*
Appendix A to Proxy Statement of registrant filed on January 13, 2012
Deere & Company Nonemployee Director Stock Ownership Plan, as amended February 23, 2022*
Appendix C to Proxy Statement of registrant filed on January 7, 2022
Deere & Company Nonemployee Director Deferred Compensation Plan, as amended October 31, 2024
Filed herewith
Amended and Restated Change in Control Severance Program of Deere & Company, effective August 29, 2023*
Exhibit 10.1 to Form 10-Q of registrant for the quarter ended July 30, 2023
John Deere 2020 Equity and Incentive Plan*
Appendix C to Proxy Statement of registrant filed January 10, 2020
Asset Purchase Agreement, dated October 29, 2001, between the registrant and Deere Capital, Inc. concerning the sale of trade receivables*
Exhibit 10.19 to Form 10-K of registrant for the year ended October 31, 2001
Second Amendment, dated February 21, 2020, to the Asset Purchase Agreement dated October 29, 2001, between the registrant and Deere Capital, Inc. (including conformed copy of the Asset Purchase Agreement as Exhibit A thereto) *
Exhibit 10.1 to Form 10-Q of the registrant for the quarter ended February 2, 2020
Asset Purchase Agreement, dated October 29, 2001, between John Deere Construction & Forestry Company and Deere Capital, Inc. concerning the sale of trade receivables*
Exhibit 10.20 to Form 10-K registrant for the year ended October 31, 2001
Second Amendment, dated February 21, 2020, to the Asset Purchase Agreement dated October 29, 2001, between John Deere Construction & Forestry Company and Deere Capital, Inc. (including conformed copy of the Asset Purchase Agreement as Exhibit A thereto) *
Exhibit 10.2 to Form 10-Q of registrant for the quarter ended February 2, 2020
2028 Credit Agreement, dated March 24, 2025, among the registrant John Deere Capital Corporation, John Deere Bank S.A., various financial institutions, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., and Citibank, N.A., as Co-Syndication Agents, and J.P. Morgan Securities LLC, as Sustainability Structuring Agent*
Exhibit 10.2 to Form 10-Q of registrant for the quarter ended April 27, 2025
Table of Contents
Exhibit Number
Description of Exhibit
The Filings Referenced for
Incorporation are Deere & Company
2030 Credit Agreement, dated March 24, 2025, among the registrant, John Deere Capital Corporation, John Deere Bank, S.A., various financial institutions, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., and Citibank, N.A., as Co-Syndication Agents, and J.P. Morgan Securities LLC, as Sustainability Structuring Agent*
Exhibit 10.3 to Form 10-Q of registrant for the quarter ended April 27, 2025
364-Day Credit Agreement, dated March 24, 2025, among the registrant, John Deere Capital Corporation, John Deere Bank S.A., various financial institutions, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., and Citibank, N.A., as Co-Syndication Agents, and J.P. Morgan Securities LLC, as Sustainability Structuring Agent*
Exhibit 10.1 to Form 10-Q of registrant for the quarter ended April 27, 2025
Global Insider Trader Policy*
Exhibit 19 to Form 10-K of registrant for the year ended October 27, 2024
Subsidiaries
Filed herewith
List of Guarantors and Subsidiary Issuers of Guaranteed Securities
Filed herewith
Consent of Deloitte & Touche
Filed herewith
Power of Attorney (included on signature page)
Filed herewith
Rule 13a-14(a)/15d-14(a) Certification
Filed herewith
Rule 13a-14(a)/15d-14(a) Certification
Filed herewith
Section 1350 Certifications
Furnished herewith
Incentive Compensation Recovery Policy effective August 29, 2023*
Exhibit 10.27 to Form 10-K of registrant for the year ended October 29, 2023
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the Inline XBRL document)
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Incorporated by reference.
† Management contract or compensatory plan or arrangement
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DEERE & COMPANY
/s/ John C. May
John C. May
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: December 18, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Each person signing below also hereby appoints John C. May, Joshua A. Jepsen, and Kellye L. Walker, and each of them singly, his or her lawful attorney-in-fact with full power to execute and file any and all amendments to this report together with exhibits thereto and generally to do all such things as such attorney-in-fact may deem appropriate to enable Deere & Company to comply with the provisions of the Securities Exchange Act of 1934 and all requirements of the Securities and Exchange Commission.
