DEERE & CO

Previous wording

All amounts are presented in millions of dollars unless otherwise specified.

Current wording

All amounts are presented in millions of U.S. dollars unless otherwise specified.

Previous wording

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 input costs customers need to run their operations. Our operations are managed through the production and precision agriculture (PPA), small agriculture and turf (SAT), construction and forestry (CF), and financial services operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.

Current wording

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 operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.

Previous wording

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 lower demand for equipment. In 2025, we expect to continue experiencing the following effects due to unfavorable market conditions: lower sales volumes, higher sales incentives, and elevated receivable write-offs and expected credit losses.

Current wording

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 2026, we may experience the following effects due to unfavorable market conditions: lower sales volumes, higher sales incentives, and elevated receivable write-offs.

Previous wording

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 have adversely affected the cost of our products and components and may continue to do so. In addition, retaliatory tariffs by regions outside the U.S., currently in effect or adopted in the future, may impact the prices of our exported products and the profit realized from these exports. The direct impact of incremental tariffs incurred by us in the first nine months of 2025 was approximately $300, excluding the impact of tariffs on our suppliers and market demand. On August 18, 2025, the scope of steel and aluminum derivative duties was expanded to include additional Harmonized Tariff Schedule codes. The updated tariff coverage is expected to further increase the cost of our products and components. We are actively taking steps to mitigate, to the extent possible, potential impacts on our business.

Current wording

Global Trade Policies. In 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 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 75% of our domestic sales are assembled in the U.S., with the remaining products imported primarily from Europe, Mexico, India, and Japan. Incremental import tariffs adversely affected the cost of our products and components beginning in the third quarter of 2025 and are expected to continue to do so in 2026. The direct impact of incremental tariffs incurred by us was $361 in the first quarter of 2026, 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.

Previous wording

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

Current wording

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 may subside.

Previous wording

**Legal Proceeding –**On January 15, 2025, the Federal Trade Commission (FTC), along with the Attorneys General of the States of Illinois and Minnesota filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division. The Attorneys General of the States of Arizona, Michigan, and Wisconsin joined the lawsuit. The lawsuit alleges monopolization and unfair competition in violation of the federal and state antitrust laws. Plaintiffs seek a permanent injunction and other equitable relief to allow owners of our equipment, as well as independent repair providers, access to our repair tools and any other repair resources available to authorized John Deere dealers. At this stage, we are unable to estimate the potential impact on our business.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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 below.

Current wording

The equipment operations segment results were impacted by incremental tariffs in 2026. The change in tariff costs was included in the “Production Costs” category below.

Previous wording

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 2025 compared with 2024 driven by a decrease in net income adjusted for non-cash provisions.

Current wording

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 operating cash flows from equipment operations in 2026 to remain flat compared with 2025 driven by an offsetting decrease in net income adjusted for non-cash provisions, and higher cash flows generated from inventory reductions.

Previous wording

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.

Current wording

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.

Previous wording

Cash inflows from consolidated operating activities in the first nine months of 2025 were $3,464. This resulted mainly from net income adjusted for non-cash provisions, partially offset by an OPEB contribution, a decrease in accrued employee profit-sharing incentives, an increase in inventories, and an increase in receivables related to sales. Cash outflows from investing activities were $801 in the first nine months of this year. The primary drivers were purchases of property and equipment and growth in equipment on operating leases, partially offset by collections of receivables (excluding receivables related to sales) exceeding the cost of receivables acquired. Cash outflows from financing activities were $1,557 in the first nine months of 2025, as cash returned to shareholders was partially offset by higher external borrowings. Cash returned to shareholders was $2,418 in the first nine months of 2025. Cash, cash equivalents, and restricted cash increased $1,214 during the first nine months of 2025.

Current wording

Cash outflows from consolidated operating activities in the first three months of 2026 were $890. This resulted mainly from the payout of employee profit-sharing incentives, an increase in inventories, and a reduction in dealer sales incentive accruals, partially offset by net income adjusted for non-cash provisions. Cash inflows from investing activities were $1,822 in the first three months of this year. The primary drivers were collections of receivables (excluding receivables related to sales) exceeding the cost of receivables acquired, partially offset by purchases of property and equipment. Cash outflows from financing activities were $2,490 in the first three months of 2026 due to lower borrowings, dividends paid, and repurchases of common stock. Cash returned to shareholders was $743 in the first three months of 2026. Cash, cash equivalents, and restricted cash decreased $1,460 during the first three months of this year.

Previous wording

Trade Accounts and Notes Receivable. Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased $777 during the first nine months of 2025, primarily due to a seasonal increase. These receivables decreased $1,366 compared to a year ago due to lower sales volumes. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 3% at July 27, 2025, 6% at October 27, 2024, and 3% at July 28, 2024.

Current wording

Trade Accounts and Notes Receivable. Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased $676 during the first three months of 2026, and increased $1,062 compared to a year ago, both due to higher sales. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 2% at February 1, 2026, 3% at November 2, 2025, and 6% at January 26, 2025.

Previous wording

Financing Receivables and Equipment on Operating Leases. Financing receivables and equipment on operating leases consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases decreased $1,093 during the first nine months of 2025 and increased $102 in the past 12 months. The decrease during the first nine months of 2025 was due to lower retail customer receivables. Total acquisition volumes of financing receivables and equipment on operating leases were 15% lower in the first nine months of 2025, compared with the same period last year excluding BJD receivables, as volumes of wholesale notes, retail notes, financing leases, and operating leases were lower, while revolving charge accounts were slightly higher compared to the same period last year.

Current wording

**Financing Receivables and Equipment on Operating Leases.**Financing receivables and equipment on operating leases consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases decreased $2,902 during the first quarter of 2026, primarily due to seasonal payments and lower retail customer receivables, and decreased $706 in the past 12 months due to lower wholesale notes. Total acquisition volumes of financing receivables and equipment on operating leases were 12% higher in the first three months of 2026, compared with the same period last year, as volumes of wholesale notes and revolving charge accounts were higher compared to the same period last year.

Previous wording

Inventories. Inventories increased by $620 during the first nine months of 2025 primarily due to a seasonal increase, and increased by $17 compared to a year ago. A majority of these inventories are valued at cost on the “last-in, first-out” (LIFO) method.

Current wording

Inventories. Inventories increased by $880 during the first three months, primarily due to a seasonal increase. Inventories increased $542 compared to a year ago due to the effects of foreign currency translation. A majority of these inventories are valued on the last-in, first-out (LIFO) method.

Previous wording

Property and Equipment. Property and equipment cash expenditures in the first nine months of 2025 were $852 compared with $1,043 in the same period last year. Capital expenditures in 2025 are estimated to be approximately $1,450.

Current wording

Property and Equipment. Property and equipment cash expenditures in the first three months of 2026 were $256, compared with $352 in the same period last year. Capital expenditures in 2026 are estimated to be approximately $1.4 billion.

Previous wording

Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased by $961 in the first nine months of 2025, primarily due to a decrease in accrued expenses associated with employee benefits and dealer sales discounts. Accounts payable and accrued expenses decreased $815 compared to a year ago due to a decrease in accrued expenses associated with employee benefits, warranty liabilities, and dealer sales discounts.

Current wording

Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased by $1,376 in the first three months of 2026, primarily due to a decrease in accrued expenses associated with employee benefits and dealer sales incentives. Accounts payable and accrued expenses increased $371 compared to a year ago, due to an increase in accounts payable associated with trade payables, partially offset by a decrease in accrued expenses associated with employee benefits.

Previous wording

John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 9). The facility has an expiration in November 2025 and total capacity or “financing limit” of $2,500. At July 27, 2025, $1,783 of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected.

Current wording

John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 10). The facility was renewed in November 2025, with an expiration in November 2026, and with a total capacity or “financing limit” of $2,500. At February 1, 2026, $2,025 of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected.

Previous wording

In the first nine months of 2025, the financial services operations issued $2,618 and retired $3,441 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).”

Current wording

In the first three months of 2026, the financial services operations issued $659 and retired $974 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in total short-term borrowings (original maturities three months or less).”

Previous wording

Lines of Credit. We have access to bank lines of credit with various banks throughout the world.

Current wording

**Lines of Credit.**We also have access to bank lines of credit with various banks throughout the world.

Previous wording

At July 27, 2025, $6,150 of these worldwide lines of credit were unused. For the purpose of computing 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 financial statements.

Current wording

At February 1, 2026, $7.2 billion of these worldwide lines of credit were unused. For the purpose of computing 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 financial statements.

Previous wording

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 and precision agriculture operations, small agriculture and turf operations, construction and 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.

Current wording

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.