UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 1, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 1-4121
DEERE & COMPANY
(Exact name of registrant as specified in its charter)
Delaware(State or other jurisdiction of incorporation or organization)
36-2382580(IRS Employer Identification No.)
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices, zip code)
Registrant’s Telephone Number, including area code: (309) 765-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbols
Name of each exchange on which registered
Common stock, $1 par value
DE
New York Stock Exchange
6.55% Debentures Due 2028
DE28
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
At February 1, 2026, 270,107,282 shares of common stock, $1 par value, of the registrant were outstanding.
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
STATEMENTS OF CONSOLIDATED INCOME
For the Three Months Ended February 1, 2026 and January 26, 2025
(In millions of dollars and shares except per share amounts) Unaudited
2026
2025
Net Sales and Revenues
Net sales
$
8,001
6,809
Finance and interest income
1,343
1,453
Other income
267
246
Total
9,611
8,508
Costs and Expenses
Cost of sales
6,280
5,037
Research and development expenses
554
526
Selling, administrative and general expenses
972
Interest expense
719
829
Other operating expenses
250
249
8,775
7,613
Income of Consolidated Group before Income Taxes
836
895
Provision for income taxes
196
27
Income of Consolidated Group
640
868
Equity in income (loss) of unconsolidated affiliates
15
(1)
Net Income
655
867
Less: Net loss attributable to noncontrolling interests
(2)
Net Income Attributable to Deere & Company
656
869
Per Share Data
Basic
2.43
3.20
Diluted
2.42
3.19
Dividends declared
1.62
Dividends paid
1.47
Average Shares Outstanding
270.3
271.6
270.9
272.3
See Condensed Notes to Interim Consolidated Financial Statements.
2
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(In millions of dollars) Unaudited
Other Comprehensive Income (Loss), Net of Income Taxes
Retirement benefits adjustment
3
Cumulative translation adjustment
374
(451)
Unrealized loss on derivatives
(5)
Unrealized gain (loss) on debt securities
(15)
370
(464)
Comprehensive Income
1,025
403
Less: Comprehensive income (loss) attributable to noncontrolling interests
Comprehensive Income Attributable to Deere & Company
1,023
408
CONDENSED CONSOLIDATED BALANCE SHEETS
February 1
November 2
January 26
Assets
Cash and cash equivalents
6,798
8,276
6,601
Marketable securities
1,398
1,411
1,214
Trade accounts and notes receivable – net
5,993
5,317
4,931
Financing receivables – net
42,113
44,575
41,396
Financing receivables securitized – net
6,479
6,831
8,257
Other receivables
2,411
2,403
2,979
Equipment on operating leases – net
7,512
7,600
7,157
Inventories
8,286
7,406
7,744
Property and equipment – net
8,084
8,079
7,425
Goodwill
4,280
4,188
3,872
Other intangible assets – net
880
892
937
Retirement benefits
3,378
3,273
3,018
Deferred income taxes
2,268
2,284
1,852
Other assets
3,556
3,461
2,807
Assets held for sale
2,929
Total Assets
103,436
105,996
103,119
Liabilities and Stockholders’ Equity
Liabilities
Short-term borrowings
14,392
13,796
12,811
Short-term securitization borrowings
6,283
6,596
8,014
Accounts payable and accrued expenses
12,533
13,909
12,162
434
448
Long-term borrowings
41,804
43,544
43,556
Retirement benefits and other liabilities
1,633
1,710
1,734
Liabilities held for sale
1,830
Total liabilities
77,079
79,989
80,555
Commitments and contingencies (Note 17)
Redeemable noncontrolling interest
50
51
78
Stockholders’ Equity
Common stock, $1 par value (issued shares at February 1, 2026 – 536,431,204)
5,715
5,668
5,526
Common stock in treasury
(36,645)
(36,362)
(35,709)
Retained earnings
59,895
59,676
56,829
Accumulated other comprehensive income (loss)
(2,665)
(3,032)
(4,167)
Total Deere & Company stockholders’ equity
26,300
25,950
22,479
Noncontrolling interests
7
6
Total stockholders’ equity
26,307
25,956
22,486
Total Liabilities and Stockholders’ Equity
4
STATEMENTS OF CONSOLIDATED CASH FLOWS
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash used for operating activities:
Provision for credit losses
36
69
Depreciation and amortization
590
549
Impairments and other adjustments
(32)
Share-based compensation expense
41
28
Provision for deferred income taxes
18
208
Changes in assets and liabilities:
Receivables related to sales
350
1,063
(746)
(795)
(1,486)
(1,845)
Accrued income taxes payable/receivable
(88)
(540)
(194)
(688)
Other
(66)
(16)
Net cash used for operating activities
(890)
(1,132)
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)
8,098
8,137
Proceeds from maturities and sales of marketable securities
144
61
Proceeds from sales of equipment on operating leases
377
433
Cost of receivables acquired (excluding receivables related to sales)
(6,023)
(6,045)
Purchases of marketable securities
(129)
(141)
Purchases of property and equipment
(256)
(352)
Cost of equipment on operating leases acquired
(432)
(439)
Collections of receivables from unconsolidated affiliates
105
Collateral on derivatives – net
(11)
(191)
(51)
(47)
Net cash provided by investing activities
1,822
1,416
Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)
848
(1,484)
Proceeds from borrowings issued (original maturities greater than three months)
780
3,168
Payments of borrowings (original maturities greater than three months)
(3,360)
(1,753)
Repurchases of common stock
(302)
(441)
(403)
(10)
Net cash used for financing activities
(2,490)
(923)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash
98
(87)
Net Decrease in Cash, Cash Equivalents, and Restricted Cash
(1,460)
(726)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period
8,533
7,633
Cash, Cash Equivalents, and Restricted Cash at End of Period
7,073
6,907
Components of Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents, and restricted cash (Assets held for sale)
116
Restricted cash (Other assets)
275
190
Total Cash, Cash Equivalents, and Restricted Cash
5
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY
Total Stockholders’ Equity
Deere & Company Stockholders
Accumulated
Redeemable
Stockholders’
Common
Treasury
Retained
Comprehensive
Noncontrolling
Equity
Stock
Earnings
Income (Loss)
Interests
Interest
Balance October 27, 2024
22,843
5,489
(35,349)
56,402
(3,706)
82
Net income (loss)
Other comprehensive loss
(461)
(3)
(384)
Treasury shares reissued
24
Share based awards and other
37
1
Balance January 26, 2025
Balance November 2, 2025
Other comprehensive income
367
(303)
(4)
(299)
16
54
Balance February 1, 2026
Condensed Notes to Interim Consolidated Financial Statements (Unaudited)
(1) Organization and Consolidation
Deere & Company has been developing innovative solutions to help its customers become more profitable for more than 185 years. 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.
We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The first quarter ends for fiscal years 2026 and 2025 were February 1, 2026, and January 26, 2025, respectively. Both periods contained 13 weeks. Fiscal year 2025 contained 53 weeks, with the additional week occurring in the fourth quarter. Unless otherwise stated, references to particular years, quarters, or months refer to our fiscal years generally ending near the end of October and the associated periods in those fiscal years.
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 variable interest entities (VIEs) related to retail note securitizations (see Note 10).
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 21). 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 condensed 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 were as follows:
Receivables from unconsolidated affiliates – "Other receivables"
306
394
Investments in unconsolidated affiliates – "Other assets"
389
405
Carrying value of assets related to VIE
695
799
Guarantees
164
157
Maximum exposure to loss
859
956
Guarantees primarily include BJD debt related to government funding that existed prior to the deconsolidation of BJD. We did not record a contractual liability related to these guarantees on our condensed consolidated balance sheets.
(2) Summary of Significant Accounting Policies and New Accounting Pronouncements
Quarterly Financial Statements
The interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in our latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.
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.
Accounting Pronouncements to be Adopted
We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance.
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. The adoption will not have a material impact on our consolidated financial statements.
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. 2025-12 — Codification Improvements
No. 2025-11 — Interim Reporting (Topic 270): Narrow-Scope Improvements
No. 2025-09 — Derivatives and Hedging (Topic 815): Hedge Accounting Improvements
No. 2025-07 — Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract
No. 2025-05 — Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
No. 2024-04 — Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
No. 2023-06 — Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative
8
(3) Revenue Recognition
Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow:
Three Months Ended February 1, 2026
PPA
SAT
CF
FS
Primary geographic markets:
United States
1,226
1,106
1,577
1,051
4,960
Canada
398
101
136
191
826
Western Europe
464
486
426
1,430
Central Europe and CIS
172
60
76
310
Latin America
684
95
231
32
1,042
Asia, Africa, Oceania, and Middle East
325
376
288
1,043
3,269
2,224
2,734
1,384
Major product lines:
Production agriculture
3,093
Small agriculture
1,527
Turf
576
Construction
1,111
Compact construction
468
Roadbuilding
772
Forestry
269
Financial products
57
1,486
119
94
96
309
Revenue recognized:
At a point in time
3,164
2,174
2,695
33
8,066
Over time
39
1,351
1,545
Three Months Ended January 26, 2025
1,555
949
1,113
1,085
4,702
354
79
187
721
277
352
344
43
1,016
67
71
181
715
80
205
1,096
308
224
55
792
3,173
1,807
2,058
1,470
3,002
1,234
463
770
361
596
226
21
1,579
77
84
3,086
1,760
2,028
29
6,903
87
47
30
1,441
1,605
9
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 $2,121, $2,039, and $2,027 at February 1, 2026, November 2, 2025, and January 26, 2025, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $265 and $197 during the three months ended February 1, 2026, and January 26, 2025, respectively.
The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $1,811 at February 1, 2026. The estimated revenue to be recognized by fiscal year follows: remainder of 2026 – $465, 2027 – $529, 2028 – $351, 2029 – $213, 2030 – $127, 2031 – $77, and later years – $49. 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.
(4) Other Comprehensive Income Items
The after-tax components of accumulated other comprehensive income (loss) follow:
(1,183)
(1,182)
(1,271)
(1,382)
(2,734)
(59)
(54)
(73)
Unrealized loss on debt securities
(41)
(43)
(89)
The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss).
Before
Tax
After
(Expense)
Amount
Credit
371
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)
Reclassification of realized (gain) loss to Interest expense
Net unrealized gain (loss) on derivatives
(6)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)
Net unrealized gain (loss) on debt securities
Retirement benefits adjustment:
Reclassification to Other operating expenses through amortization of:
Actuarial (gain) loss
(12)
(9)
Prior service (credit) cost
10
Net unrealized gain (loss) on retirement benefits adjustment
Total other comprehensive income (loss)
(449)
(448)
(8)
(19)
Net actuarial gain (loss)
(465)
(5) EARNINGS Per Share
A reconciliation of basic and diluted earnings per share attributable to Deere & Company follows in millions, except per share amounts:
Three Months Ended
Net income attributable to Deere & Company
Average shares outstanding
Basic earnings per share
Effect of dilutive stock options and unvested restricted stock units
.6
.7
Total potential shares outstanding
Diluted earnings per share
Shares excluded as antidilutive
.2
.3
(6) 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 components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.”
11
The components of net periodic pension and OPEB (benefit) cost consisted of the following:
Pensions:
Service cost
59
65
Interest cost
125
128
Expected return on plan assets
(249)
(254)
Amortization of actuarial gain
Amortization of prior service cost
Net benefit
(57)
(52)
OPEB:
40
(28)
Amortization of prior service credit
Net (benefit) cost
During the first three months of 2026, we contributed and expect to contribute the following amounts to our pension and OPEB plans:
Pensions
OPEB
Contributed
110
Expected contributions remainder of the year
70
(7) INCOME TAXES
The effective tax rate for the three months ended February 1, 2026, and January 26, 2025, was 23.4% and 3.0%, respectively. The effective tax rate in the first quarter of 2025 was impacted by favorable net discrete tax items (see Note 21).
(8) 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.
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.
The CEO evaluates the performance of the business segments based on operating profit, which for FS includes interest income and interest 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
12
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.
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.
Information relating to operations by operating segment was as follows:
External net sales
3,163
2,168
2,670
External finance and interest income
1,260
1,287
External other income
48
124
265
Intersegment income
104
175
Total segment net sales and revenues
3,286
2,223
2,731
1,488
9,728
(2,476)
(1,633)
(2,182)
(6,291)
(664)
Other segment items*
(671)
(394)
(412)
(523)
(2,000)
Segment operating profit
139
137
301
773
3,067
1,748
1,994
1,363
1,383
56
45
107
241
103
167
3,189
1,795
2,043
1,573
8,600
(2,164)
(1,297)
(1,584)
(5,045)
(766)
(687)
(374)
(541)
(1,996)
338
266
793
* Other segment items for PPA, SAT, and CF include selling, administrative and general expenses; advertising; engineering; research and development; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. Financial Services other segment items include selling, administrative and general expenses; foreign exchange gains and losses; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses.
A reconciliation of segment net sales and revenues and segment net income to consolidated net sales and revenues and consolidated net income follows:
Reconciliation of net sales and revenues
Segment net sales and revenues
External other income*
58
75
Elimination of intersegment revenues
(175)
(167)
Net sales and revenues
Reconciliation of net income
Interest income – excluding FS
93
90
Interest expense – excluding FS
(93)
(84)
Pension and OPEB benefit, excluding service cost component
130
Corporate other – net**
(21)
Income taxes
(196)
(27)
* External other income includes corporate investment income, corporate interest income, and other miscellaneous revenue items that are included in “Finance and interest income” and “Other income” on the statements of consolidated income.
** Corporate other – net includes certain foreign exchange gains and losses, certain investment income, and certain corporate administrative and general expenses.
13
Additional operating segment information was as follows:
Depreciation* and amortization expense
171
166
88
274
Intersegment
(26)
(35)
Capital additions
74
35
154
200
* Depreciation includes depreciation for equipment on operating leases.
9,123
8,787
8,773
4,335
3,987
4,179
8,043
7,792
7,237
67,904
70,021
69,686
Corporate*
14,031
15,409
13,244
Equity investment in unconsolidated affiliates
38
450
462
498
510
* Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets.
(9) Financing Receivables
We monitor the credit quality of financing receivables based on delinquency status, defined as follows:
14
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:
February 1, 2026
2024
2023
2022
Prior Years
Revolving Charge Accounts
Retail customer receivables:
Agriculture and turf
Current
2,265
11,250
7,550
4,637
2,574
1,218
3,210
32,704
30-59 days past due
117
89
100
414
60-89 days past due
44
25
90+ days past due
Non-performing
52
141
102
63
46
416
Construction and forestry
953
2,915
1,793
865
362
92
108
7,088
68
23
72
Total retail customer receivables
3,231
14,520
9,789
5,807
3,095
1,409
3,450
41,301
Write-offs for the three months ended February 1, 2026:
31
26
November 2, 2025
2021
12,380
8,389
5,228
3,003
1,310
281
4,608
35,199
73
112
109
17
366
3,175
2,038
1,034
6,976
42
142
62
19
268
15,742
10,812
6,571
3,635
1,519
329
4,801
43,409
Write-offs for the twelve months ended November 2, 2025:
34
211
312
January 26, 2025
2,421
12,687
7,437
4,560
2,387
903
3,027
33,422
113
143
120
81
49
342
883
2,834
1,614
349
99
6,732
66
271
3,320
15,896
9,472
5,692
2,874
1,046
3,302
41,602
Write-offs for the three months ended January 26, 2025:
The credit quality and aging analysis of wholesale receivables was as follows:
Wholesale receivables:
6,128
6,731
7,098
30+ days past due
1,407
1,524
1,200
Total wholesale receivables
7,545
8,255
8,299
An analysis of the allowance for credit losses and investment in financing receivables follows:
Retail Notes
Revolving
& Financing
Charge
Wholesale
Leases
Accounts
Receivables
Allowance:
Beginning of period balance
258
Provision (credit)
Write-offs
Recoveries
Translation adjustments
End of period balance
245
254
Financing receivables:
37,851
48,846
219
229
Provision
(48)
(13)
(61)
240
248
38,300
49,901
The allowance for credit losses on retail notes and financing lease receivables decreased in the first quarter of 2026, primarily due to a decline in the balance of 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.
The ending amortized cost of financing receivables modified with borrowers experiencing financial difficulty was as follows:
Modified financing receivables
64
Percent of financing receivables portfolio
0.13%
0.06%
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
20
We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty. The ending amortized cost and performance of financing receivables modified during the prior twelve months ended February 1, 2026, and January 26, 2025, were as follows:
169
Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months ended February 1, 2026, and January 26, 2025. At February 1, 2026, commitments to provide additional financing to these customers were not significant.
(10) 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:
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.
The components of securitization programs were as follows:
Financing receivables securitized (retail notes)
6,518
6,872
8,307
Allowance for credit losses
(39)
(50)
Other assets (primarily restricted cash)
168
182
Total restricted securitized assets
6,647
7,002
8,439
Accrued interest on borrowings
Total liabilities related to restricted securitized assets
6,296
6,611
8,025
(11) 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:
Raw materials and supplies
3,738
3,402
3,549
Work-in-process
Finished goods and parts
6,351
5,769
6,055
Total FIFO value
11,195
10,127
10,650
Excess of FIFO over LIFO
2,909
2,721
2,906
(12) Goodwill and Other Intangible Assets – Net
The changes in amounts of goodwill by operating segments were as follows.
Goodwill at October 27, 2024
701
365
2,893
3,959
(72)
Goodwill at January 26, 2025
690
2,821
Goodwill at November 2, 2025
744
393
3,051
83
Goodwill at February 1, 2026
750
396
3,134
The components of other intangible assets were as follows:
Customer lists and relationships
491
482
490
Technology, patents, trademarks, and other
1,554
1,518
1,392
Total at cost
2,045
2,000
1,882
Less accumulated amortization:
(272)
(260)
(229)
(893)
(848)
(716)
Total accumulated amortization
(1,165)
(1,108)
(945)
The amortization expense of other intangible assets in the first quarter of 2026 and 2025 was $34 and $41, respectively. The estimated amortization expense for the next five years is as follows: remainder of 2026 – $109, 2027 – $136, 2028 – $99, 2029 – $82, 2030 – $74, and 2031 – $72.
(13) Short-Term Borrowings
Short-term borrowings were as follows:
Commercial paper
4,327
4,218
2,699
Notes payable to banks
685
651
561
Finance lease obligations due within one year
Long-term borrowings due within one year
9,342
8,888
9,517
(14) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
Accounts payable:
Trade payables
2,987
2,985
2,393
Dividends payable
441
443
Operating lease liabilities
320
314
Deposits withheld from dealers and merchants
138
Payables to unconsolidated affiliates
230
207
Accrued expenses:
Employee benefits
530
786
Product warranties
1,311
1,259
1,360
Accrued taxes
1,001
1,155
Extended warranty premium
1,199
1,202
1,173
Dealer sales incentives
318
828
Unearned revenue (contractual liability)
922
837
854
Unearned operating lease revenue
519
534
474
Accrued interest
500
524
487
Derivative liabilities
593
Parts return liability
449
445
418
1,058
1,073
Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $1,898 at February 1, 2026, $1,892 at November 2, 2025, and $1,901 at January 26, 2025. Other eliminations were made for accrued taxes and other accrued expenses.
(15) Long-Term Borrowings
Long-term borrowings were as follows in millions:
Underwritten term debt
U.S. dollar notes and debentures:
6.55% debentures due 2028
5.375% notes due 2029
3.10% notes due 2030
700
8.10% debentures due 2030
4.15% notes due 2030*
7.125% notes due 2031
300
5.45% notes due 2035
1,250
3.90% notes due 2042
2.875% notes due 2049
3.75% notes due 2050
850
5.70% notes due 2055
Euro notes:
1.85% notes due 2028 (€600 principal)
718
694
625
2.20% notes due 2032 (€600 principal)
1.65% notes due 2039 (€650 principal)
778
752
677
Serial issuances:
Medium-term notes*
32,168
34,041
34,974
Other notes and finance lease obligations
470
272
Less: debt issuance costs and debt discounts
(147)
(155)
* Includes fair value hedge adjustments related to derivatives.
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 condensed consolidated financial statements or results of operations, and as a result, we have elected to exclude summarized financial information.
Medium-term notes due through 2034 are primarily 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 of the 4.15% notes due 2030 and medium-term notes were as follows:
4.15% notes due 2030
Medium-term notes
32,359
34,241
35,770
(16) 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.”
Lease revenues earned by us follow:
Sales-type and direct finance lease revenues
Operating lease revenues
373
Variable lease revenues
Total lease revenues
424
413
(17) 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:
1,426
Warranty claims paid
(310)
New product warranty accruals
256
Foreign exchange
The costs for extended warranty programs are recognized as incurred.
In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment. As of February 1, 2026, the notional value of these guarantees was $141. We may repossess the equipment collateralizing the receivables. At February 1, 2026, the accrued losses under these guarantees were not material. We also had guarantees to a VIE (see Note 1) totaling $164 at February 1, 2026.
We also had other miscellaneous contingent liabilities and guarantees totaling approximately $105 at February 1, 2026. The accrued liability for these contingencies was $25 at February 1, 2026.
At February 1, 2026, we had commitments of approximately $430 for the construction and acquisition of property and equipment. Also, at February 1, 2026, we had restricted assets of $342, classified as “Other assets,” which includes restricted cash primarily related to securitization of financing receivables (see Note 10) and cash that is legally restricted as to withdrawal or usage.
We are subject to various unresolved legal actions. The total accrued losses on unresolved legal matters were approximately $175 at February 1, 2026. The accrual includes estimated total accrued losses on unresolved legal matters in connection with a consolidated multidistrict class action antitrust lawsuit, which was recorded in the fourth quarter of 2025. The accrual is based on management’s best estimate of probable losses as the outcome of litigation is inherently uncertain. We believe the reasonably possible range of losses in excess of the recorded accruals for these unresolved legal actions would not have a material effect on our consolidated financial statements. The most prevalent legal claims relate to antitrust matters (including class action litigation), product liability (including asbestos-related liability), employment, patent, and trademark.
(18) Fair Value Measurements
The fair values of financial instruments that do not approximate the carrying values are presented in the table below. Long-term borrowings exclude finance lease liabilities.
CarryingValue
FairValue
42,266
44,779
41,311
6,494
6,855
8,174
Receivables from unconsolidated affiliates
392
400
6,322
6,631
8,036
9,390
8,911
9,468
41,730
41,721
43,471
43,527
43,483
43,172
Fair value measurements above were Level 3 for all receivables and Level 2 for all borrowings.
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 financing receivables approximated the carrying amounts. At November 2, 2025, we also had $60 marketable securities classified as held-to-maturity Level 2 international corporate debt securities that matured in the first quarter of 2026. We record held-to-maturity marketable securities at amortized cost, which approximates fair value.
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.
Assets and liabilities measured at fair value on a recurring basis, excluding our cash equivalents, which were carried at a cost that approximates fair value and consist of money market funds and time deposits, and excluding our held-to-maturity debt securities, are as follows:
Level 1:
U.S. government debt securities
264
Total Level 1 marketable securities
Level 2:
International fixed income fund
Corporate debt securities
419
International debt securities
162
174
132
Mortgage-backed securities
228
234
Municipal debt securities
Total Level 2 marketable securities
1,134
913
Other assets – Derivatives
347
216
Accounts payable and accrued expenses – Derivatives
Level 3:
Accounts payable and accrued expenses – Deferred consideration
The mortgage-backed securities are primarily issued by U.S. government sponsored enterprises.
The contractual maturities of available-for-sale debt securities at February 1, 2026, follow:
Amortized
Fair
Cost
Value
Due in one year or less
Due after one through five years
Due after five through 10 years
551
542
Due after 10 years
186
Debt securities
1,442
1,391
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.
Fair value, nonrecurring Level 3 measurements from impairments and other adjustments were as follows:
Fair Value
(Gains) Losses
20252
Property and equipment – net1
Other intangible assets – net1
1 Related to assessments of our external overseas battery operations performed in the third quarter of 2025.
2 The gain on “Assets held for sale” recorded in the first quarter of 2025 represents a reversal of prior period valuation allowance loss, not in excess of cumulative valuation allowance recorded on “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:
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
22
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.
Other intangible assets – net – The impairment of customer relationships and trade name of our external overseas battery operations was measured using an income approach.
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.
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 21). 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.”
(19) Derivative Instruments
Fair values of our derivative instruments and the associated notional amounts are presented below. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”
Notional
Cash flow hedges:
Interest rate contracts
3,875
2,675
3,275
Fair value hedges:
10,659
203
11,465
160
15,256
602
Cross-currency interest rate contracts
91
975
Net investment hedges:
1,131
Not designated as hedging instruments:
13,918
14,084
13,082
Foreign exchange contracts
7,984
232
7,372
7,408
133
The amounts recorded in the condensed consolidated balance sheets 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 Amount
Cumulative Fair Value
of Hedged Items
Hedging Amounts
24,231
(211)
2,998
(30)
25,013
(203)
2,110
(14)
24,438
(796)
The table above includes carrying amounts of short-term borrowings of $2,548, $2,544, and $2,110 and of long-term borrowings of $11,952, $11,963, and $8,923 at February 1, 2026, November 2, 2025, and January 26, 2025, 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 $(26), $(30), and $(14) and of long-term borrowings of $(171), $(185), and $(179) at February 1, 2026, November 2, 2025, and January 26, 2025, respectively. At January 26, 2025, 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:
Interest rate contracts – Interest expense
(58)
(343)
Recognized in OCI:
Interest rate contracts – OCI (pretax)
Reclassified from OCI:
Not designated as hedges:
Foreign exchange contracts – Net sales
(7)
Foreign exchange contracts – Cost of sales
(67)
Foreign exchange contracts – Other operating expenses
(279)
Total not designated
(345)
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 February 1, 2026, November 2, 2025, and January 26, 2025, was $361, $356, and $707, respectively. In accordance with the limits established in these agreements, we posted $74, $62, and $436 of cash collateral at February 1, 2026, November 2, 2025, and January 26, 2025, respectively. In addition, we paid $8 of collateral that was outstanding at February 1, 2026, November 2, 2025, and January 26, 2025, 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 follows:
Gross Amounts
Netting
Recognized
Arrangements
Collateral
Net Amount
(170)
177
(75)
348
(202)
(64)
123
(62)
(437)
251
(20) Share-Based AWARDS
We are authorized to grant shares for equity incentive awards. The outstanding shares authorized were 12.6 million at February 1, 2026. In December 2025, we granted stock options to employees for the purchase of 161 thousand shares of common stock at an exercise price of $468.90 per share and a binomial lattice model fair value of $125.96 per share at the grant date. At February 1, 2026, options for 1.1 million shares were outstanding with a weighted-average exercise price of $353.91 per share.
During the three months ended February 1, 2026, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date in dollars, follow:
Grant-Date
Shares
(per share)
Service-based
296
469.03
Performance/service-based
450.48
Market/service-based (fair value determined using a Monte Carlo model)
555.14
(21) Special Items
Discrete 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.
Banco John Deere S.A.
In 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become 50% owner of our wholly-owned subsidiary in Brazil, BJD. BJD is included in our financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. In February 2025, Bradesco contributed capital equal to our equity investment in BJD. We retained a 50% equity interest in BJD and are reporting the results as an equity investment in unconsolidated affiliates.
The BJD business was reclassified as held for sale in 2024. At January 26, 2025, the valuation allowance on “Assets held for sale” decreased to $65, resulting in a pretax and after-tax gain (reversal of previous losses) of $32 recorded in “Selling, administrative and general expenses” in the three months ended January 26, 2025 and presented in “Impairments and other adjustments” in the statements of consolidated cash flows.
The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows:
115
2,719
Other miscellaneous assets*
Valuation allowance
(65)
Total intercompany payables
627
* Includes $1 restricted cash balance.
(22) Subsequent Events
On February 25, 2026, a quarterly dividend of $1.62 per share was declared at the Board of Directors meeting, payable on May 8, 2026, to stockholders of record on March 31, 2026.
On February 18, 2026, we acquired Tenna LLC (Tenna), a U.S. construction technology company that offers mixed-fleet equipment operations and asset tracking solutions. The purchase price, net of cash acquired, was $440. Tenna will be included in the CF operating segment. Due to the recent closing of the acquisition, the formal process necessary to allocate the purchase price to the acquired assets and liabilities has not been completed.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
All amounts are presented in millions of U.S. dollars unless otherwise specified.
OVERVIEW
Organization
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.
Trends and Economic Conditions
Industry Sales Outlook for Fiscal Year 2026
Agriculture and Turf
Construction and Forestry
Company Trends
Our Leap Ambitions, a set of focused goals designed to guide the implementation of our Smart Industrial Operating Model, feature multi-year financial and operational goals, emphasizing the use of our differentiated equipment and service solutions, including automation, autonomy, digitalization, lifecycle solutions, and Solutions as a Service (SaaS).
Deeper integration of technology into equipment to enable customers to do more with less remains a persistent market trend. Customers seek to improve profitability, productivity, and sustainability by selecting our equipment and technology solutions. These technologies are incorporated into customer operations across the varied production systems in which we serve. While we continue to benefit from the adoption of these technologies, revenue from SaaS products did not represent a significant percentage of our revenues in the periods presented.
Company Outlook for 2026
Large agriculture sales in North America are expected to remain subdued and soften in South America resulting in decreased sales volume for PPA in 2026 compared to 2025. SAT and CF sales are expected to improve in 2026. Our net sales are expected to increase in 2026 compared to 2025 with the anticipated decline in PPA sales, more than offset by improvements in CF and SAT.
Agriculture and Turf Industry Outlook for 2026
Construction and Forestry Industry Outlook for 2026
Financial Services Outlook for 2026
Down
(-) Average portfolio
Unfavorable
(-) Prior period special items
+ Provision for credit losses
Favorable
+ Financing spreads
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 2026, we may experience the following effects due to unfavorable market conditions: lower sales volumes, higher sales incentives, and elevated receivable write-offs.
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.
On February 20, 2026, the United States Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA). This decision may provide tariff relief and the potential recovery of amounts previously paid. We are currently evaluating the impact of this decision on our future financial statements.
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.
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.
Other Items of Concern and Uncertainties – Other items that could impact our results are:
consolidated results – 2026 Compared with 2025
Deere & Company
(In millions of dollars, except per share amounts)
Net sales and revenues increased 13% for the quarter, primarily due to higher sales volumes of $988 and the positive effects of foreign currency translation of $227. Net income decreased $213, primarily due to incremental tariffs of $272 ($361 pretax) and prior period favorable discrete tax items of $163 described in Note 21, partially offset by the impact of higher shipment volumes of $188 ($249 pretax). The discussion of segment net sales and operating profit is included in the Business Segment Results below.
An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:
% Change
Cost of sales to net sales
78.5%
74.0%
(-) Tariffs
(+) Production efficiencies
Increased mostly due to incremental tariffs, partially offset by production efficiencies resulting from increased manufacturing volumes.
+9
Higher due to increased income earned from extended warranty premiums and higher service revenues.
+5
Increased due to continued focus on developing and deploying technology solutions.
-13
Decreased due to lower average borrowing rates and lower average borrowings.
+626
Increased due to favorable discrete tax adjustments recognized in the prior period (see Note 21).
Business Segment Results – 2026 compared with 2025
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.
Production & Precision Agriculture
+3
Operating profit
-59
Operating margin
4.4%
11.0%
Price realization
Currency translation impact on Net sales
+4
Production & Precision Agriculture sales increased for the quarter as a result of the positive effects of foreign currency translation (primarily the Euro and Brazilian real). Operating profit decreased primarily due to higher tariffs, unfavorable sales mix, and higher warranty expenses.
Production & Precision Agriculture Operating Profit
First Quarter 2026 Compared to First Quarter 2025
Small Agriculture & Turf
+24
+58
9.0%
7.1%
+2
Small Agriculture & Turf sales increased for the quarter due to higher shipment volumes (primarily in the U.S., Canada, Europe, and India) driven by increased customer demand. Sales also increased as a result of the positive impact of the Euro foreign currency translation. Operating profit increased primarily as a result of higher shipment volumes and price realization, partially offset by higher tariffs.
Small Agriculture & Turf Operating Profit
Construction & Forestry
+34
+111
5.1%
3.3%
Construction & Forestry sales increased for the quarter due to higher U.S. shipment volumes, driven by increased customer demand from a strong construction market. Additionally, sales increased as a result of the positive impacts of the Euro foreign currency translation. Operating profit increased primarily due to higher shipment volumes and production efficiencies, partially offset by higher tariffs.
Construction & Forestry Operating Profit
Financial Services
Revenue (including intercompany)
-5
664
766
244
+6
Revenue decreased primarily due to the deconsolidation of Banco John Deere S.A. (BJD) in the second quarter of 2025 and a 2% lower average balance of receivables and leases portfolio compared to the same period last year. Interest expense decreased as a result of lower average borrowing rates and lower average borrowings. Net income for the quarter increased primarily due to favorable financing spreads and a lower provision for credit losses, partially offset by the prior period decreased valuation allowance on BJD “Assets held for sale” (see Note 21).
Critical Accounting Estimates
See our critical accounting estimates discussed in the Management’s Discussion and Analysis of the most recently filed Annual Report on Form 10-K. There have been no material changes to these policies.
CAPITAL RESOURCES AND LIQUIDITY – 2026 compared with 2025
We have access to global markets at a reasonable cost. Sources of liquidity include:
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.
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 are provided in the following table:
Cash, cash equivalents, and marketable securities
8,196
9,687
7,815
Ratio to prior 12 month’s net sales
15%
14%
12%
Ratio to prior 12 month’s cost of sales
28%
26%
27%
Unused credit lines
7,159
7,268
7,793
Financial Services:
Ratio of interest-bearing debt to stockholder’s equity
8.2 to 1
8.4 to 1
7.6 to 1
There have been no material changes to the contractual obligations and other cash requirements identified in our most recently filed Annual Report on Form 10-K.
Cash Flows
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
Net decrease in cash, cash equivalents, and restricted cash
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.
Key Metrics and Balance Sheet Changes
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.
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.
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.
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.
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.
Borrowings. Total external borrowings decreased by $1,457 in the first three months of 2026 and decreased $1,902 compared to a year ago, generally corresponding with the level of the receivable and lease portfolio, as well as other working capital requirements.
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.
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).”
Lines of Credit. We also have access to bank lines of credit with various banks throughout the world.
Worldwide lines of credit totaled $12.2 billion at February 1, 2026, consisting primarily of:
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.
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. The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by us are as follows:
Senior
Long-Term
Short-Term
Outlook
Fitch Ratings
A+
F1
Stable
Moody’s Investors Service, Inc.
A1
Prime-1
Standard & Poor’s
A
A-1
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in the section entitled “Overview,” “Trends and Economic Conditions,” and “Condensed Notes to Interim Consolidated Financial Statements” relating to future events, expectations, and trends constitute “forward-looking 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:
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 our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q). 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.
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.
STATEMENTS OF INCOME
Unaudited
EQUIPMENT
FINANCIAL
OPERATIONS
SERVICES
ELIMINATIONS
CONSOLIDATED
1,455
(128)
(112)
1
213
202
118
(83)
(74)
2, 3, 4
8,334
7,121
(186)
6,291
5,045
4
806
800
(38)
Interest compensation to Financial Services
(90)
(91)
(46)
364
(70)
3, 4, 5
7,788
6,495
1,198
1,304
Income before Income Taxes
546
626
290
Provision (credit) for income taxes
134
Income after Income Taxes
412
639
411
637
1 Elimination of intercompany interest income and expense.
2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.
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.
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEETS
Feb 1
Nov 2
Jan 26
4,769
6,340
4,840
2,029
1,936
1,761
146
217
114
1,252
1,194
1,100
Receivables from Financial Services
4,132
4,649
1,826
(4,132)
(4,649)
(1,826)
6
1,284
1,316
1,053
6,609
5,900
5,812
(1,900)
(1,899)
(1,934)
7
42,008
44,487
41,318
6,830
1,841
1,809
2,367
621
658
654
(42)
8
8,053
8,047
7,392
3,282
3,181
2,933
86
2,476
2,507
2,247
(253)
(269)
9
2,371
2,218
2,295
1,220
1,244
539
41,905
42,859
37,700
(6,373)
(6,884)
(4,267)
1,101
14,026
13,382
11,710
6,595
8,013
Payables to equipment operations
11,387
12,757
10,869
3,132
3,116
3,296
(1,986)
(1,964)
(2,003)
7, 8
343
356
480
8,897
8,756
8,507
32,907
34,788
35,049
1,568
1,646
1,668
22,561
23,921
22,551
60,891
62,952
62,271
7,013
7,069
7,415
(7,013)
(7,069)
(7,415)
10
Financial Services’ equity
Adjusted total stockholders’ equity
19,294
18,887
15,071
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 other receivables / payables.
9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
10 Elimination of Financial Services’ equity.
STATEMENTS OF CASH FLOWS
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
319
11
12
Distributed earnings of Financial Services
(350)
(162)
13
Provision (credit) for deferred income taxes
(17)
225
140
332
923
14, 16
(728)
(784)
(18)
15
(1,410)
(2,073)
222
16
(71)
(479)
(647)
(94)
(136)
11, 12, 15
Net cash provided by (used for) operating activities
(1,343)
(2,875)
497
775
(44)
968
8,251
8,345
(153)
(208)
14
(6,044)
(6,093)
(456)
(454)
Decrease in trade and wholesale receivables
198
985
(198)
(985)
(33)
Net cash provided by (used for) investing activities
(213)
2,341
2,940
(306)
(1,130)
176
886
(1,660)
Change in intercompany receivables/payables
613
1,222
(613)
(1,222)
2,032
614
1,136
(78)
(3,282)
(1,741)
Net cash provided by (used for) financing activities
2,567
(2,749)
(3,652)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
(1,569)
(776)
6,364
5,643
2,169
1,990
4,795
4,867
2,278
2,040
11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
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.
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See our most recently filed Annual Report on Form 10-K (Part II, Item 7A). There have been no material changes in this information.
Item 4.CONTROLS AND PROCEDURES
Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of February 1, 2026, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. During the first quarter of 2026, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
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 then joined the lawsuit. The lawsuit alleges monopolization and unfair competition in violation of 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. On March 17, 2025, we filed a motion to dismiss the lawsuit, the FTC filed a response on April 28, 2025, and we filed a reply on May 28, 2025. A hearing was held on the motion to dismiss, and the court denied the motion. We are in preliminary discussions with the FTC with respect to a potential resolution. At this stage, we are unable to predict the outcome or impact of this matter on our business.
In addition to the above, the most prevalent legal claims relate to product liability (including asbestos-related liability), employment, patent, trademark, and antitrust matters (including class action litigation). Currently we believe the reasonably possible range of losses for unresolved legal actions would not have a material effect on our financial statements; however, the outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims, or investigations could require us to pay substantial damages or fines, undertake service actions, 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.
Item 1A.Risk Factors
See our most recently filed Annual Report on Form 10-K (Part I, Item 1A). The risks described in the Annual Report on Form 10-K, and the “Forward-Looking Statements” in this report, are not the only risks we face. Additional risks and uncertainties may also materially affect our business, financial condition, or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Purchases of our common stock during the first quarter of 2026 were as follows:
Total Number of
Shares Purchased as
Maximum Number of
Part of Publicly
Shares that May Yet Be
Announced Plans or
Purchased under the
Purchased2
Average Price
Programs1
Plans or Programs1
Period
(thousands)
Per Share
(millions)
Nov 3 to Nov 30
15.0
Dec 1 to Dec 28
471.87
340
14.6
Dec 29 to Feb 1
262
505.99
14.4
1 We have a share repurchase plan that was announced in December 2022 to purchase up to $18.0 billion of shares of our common stock. The maximum number of shares that may yet be purchased under this plan was 14.4 million based on the closing price of our common stock on the New York Stock Exchange as of the end of the first quarter of 2026 of $528.00 per share. At the end of the first quarter of 2026, $7.6 billion of common stock remains to be purchased under this plan.
2 In the first quarter of 2026, 12 thousand shares of common stock were acquired from plan participants at a weighted-average market price of $481.62 per share to pay payroll taxes on the vesting of restricted stock units and to enable stock-for-stock exercises of options.
Sales of Unregistered Equity Securities
During the first quarter of 2026, we issued 88 deferred stock units under the Deere & Company Nonemployee Director Stock Ownership Plan (“NEDSOP”) to a nonemployee director for their service on our Board of Directors. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in the plan. Deferred stock units and shares of common stock issued under the NEDSOP are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of the SEC’s Regulation D thereunder.
On January 2, 2026, we distributed 1,325 shares of common stock to a participant account under the NEDSOP.
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
Not applicable.
Item 5.Other Information
Director and Executive Officer Trading Arrangements
Item 6.Exhibits
Certain instruments relating to long-term borrowings 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 instruments to the Commission upon request.
3.1
Restated Certificate of Incorporation (Exhibit 3.1 to Form 10-Q of registrant for the quarter ended July 28, 2019*)
3.2
Bylaws, as amended (Exhibit 3.2 to Form 10-Q of registrant for the quarter ended July 30, 2023*)
10.1†
Forms of Terms and Conditions for John Deere Nonqualified Stock Options granted fiscal 2026
10.2†
Forms of Terms and Conditions for John Deere Restricted Stock Units granted fiscal 2026
10.3 †
Forms of Terms and Conditions for John Deere Performance Stock Units granted fiscal 2026
31.1
Rule 13a-14(a)/15d-14(a) Certification
31.2
Section 1350 Certifications (furnished herewith)
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase 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.
SIGNATURES
Pursuant to the requirements 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.
Date:
February 26, 2026
By:
/s/ Ryan D. Campbell
Ryan D. Campbell President, Worldwide Construction & Forestry and Power Systems, and Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)