DEERE & CO 10-Q

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 (in units) 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 that 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 are expected to remain subdued in North America and to 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 ● Demand in the U.S. and Canada for large agriculture equipment is expected to decrease compared to 2025 levels driven by elevated farm input costs and ongoing global market uncertainty. These factors are expected to be partially offset by robust demand for commodities and tightening supply which are expected to support improvements in crop prices. In addition, government programs in the U.S. continue to support farmers’ short-term liquidity, and recent biofuel policy changes may help provide future demand for U.S. farmers. ● We expect small agricultural and turf equipment sales to be flat to up slightly from 2025 levels in the U.S. and Canada. The dairy and livestock market continues to maintain strong margins, supporting ongoing product demand. A modest recovery is anticipated in the turf sector following several years of contraction. ● In Europe, the industry is forecasted to be flat to up slightly. While elevated interest rates continue to influence purchasing decisions, customer profitability and equipment replacement activity remain relatively stable. The 30 ​ crop farming sector continues to experience subdued conditions; however, favorable dairy market margins are expected to continue to provide ongoing support to overall industry demand. ● Demand in South America is expected to decrease. Although crop production and yields remain strong and crop prices have improved, high interest rates, elevated input costs, and a stronger Brazilian real are pressuring farm profitability and reducing near-term equipment demand. ● Industry sales in Asia are forecasted to be roughly flat, mainly driven by demand in India. Construction and Forestry Industry Outlook for 2026 ● Industry sales in the U.S. and Canada for construction and compact construction equipment are projected to be slightly higher compared to 2025. Favorable industry fundamentals, including strong customer backlogs supported by large projects, infrastructure investment, and data center construction activity, continue to offset softness in residential construction. ● Global forestry markets are expected to decrease slightly due to continued pressure from weak residential construction demand and lower log and lumber prices. ● Global roadbuilding markets are forecasted to be up compared to 2025 driven by increased road construction spending across multiple geographies. Financial Services Outlook for 2026 ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ Down ​ (–) Average portfolio ​ Unfavorable ​ (–) Prior period special items ​ Unfavorable ​ + Financing spreads ​ Favorable ​ + Provision for credit losses ​ Favorable ​ Additional Trends Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, government policies, and uncertainty in macroeconomic trends. These factors affect farmers’ income and sentiment which may result in varying demand for our equipment. In 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. Incremental import tariffs adversely affected the cost of our products and components beginning in 2025 and continue to do so in 2026. The direct impact of these incremental tariffs incurred was $372 in the first six months of 2026, net of the tariff recovery described below, and approximately $95 in the first six months of 2025. These amounts exclude the impact of tariffs on our suppliers and market demand. On February 20, 2026, the Supreme Court of the United States issued a decision invalidating tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA). On April 20, 2026, the U.S. Customs and Border Protection (CBP) launched a system to process IEEPA tariff refund claims. Based on the eligibility parameters established by the CBP for the initial phase of the refund process, we prepared and filed a refund claim in the amount of $272, which has been accepted by the CBP. We recorded a recovery for this initial amount as we concluded the refund is probable and reasonably estimable. The recovery was allocated 20%, 30%, and 50% to PPA, SAT, and CF, respectively, decreasing cost of sales. Trade policies continue to evolve, causing uncertainty in the agriculture and construction industries. We are actively taking steps to mitigate potential impacts on our business, to the extent possible, including adjusting sourcing strategies, pursuing product exemptions, and identifying cost reduction opportunities. 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 discussions with the FTC and plaintiff states with respect to a potential resolution. At this stage, we are unable to estimate the potential impact on our business. 31 ​ Other Items of Concern and Uncertainties – Other items that could impact our results are: ● slower economic growth and inflation ● global and regional political conditions ● shifts in energy, including positions with respect to biofuels, positions on government subsidies of farming, and changes in energy prices ● input costs, including the availability and price of fertilizers as a result of the conflict in the Middle East ● capital market disruptions ● foreign currency and capital control policies ● right to repair and agriculture data privacy regulations and legislation ● weather conditions ● marketplace pace of adoption and monetization of technologies we have invested in ● our ability to strengthen our digital capabilities, artificial intelligence, automation, and autonomy ● changes in demand and pricing for new and used equipment ● delays or disruptions in our supply chain ● significant fluctuations in foreign currency exchange rates ● volatility in the prices of many commodities Consolidated Results – 2026 Compared with 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ Deere & Company ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ (In millions of dollars, except per share amounts) ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Net sales and revenues ​ $ 13,369 ​ $ 12,763 ​ +5 ​ $ 22,981 ​ $ 21,272 ​ +8 ​ Net income attributable to Deere & Company ​ ​ 1,773 ​ ​ 1,804 ​ -2 ​ ​ 2,429 ​ ​ 2,673 ​ -9 ​ Diluted earnings per share ​ ​ 6.55 ​ ​ 6.64 ​ ​ ​ ​ 8.97 ​ ​ 9.82 ​ ​ ​ ​ Net sales and revenues increased 5% and 8% for the quarter and year-to-date periods, respectively, primarily due to higher sales volumes and the positive effects of foreign currency translation. Net income decreased $31 in the second quarter primarily due to the impact of lower PPA shipment volumes of $313 ($402 pretax), increased production costs of $122 ($157 pretax) from higher material costs, and higher warranty expenses of $64 ($82 pretax), partially offset by the impact of higher shipment volumes for CF of $148 ($191 pretax) and SAT of $79 ($101 pretax), favorable price realization of $131 ($169 pretax), and the favorable impact of foreign currency exchange of $107 ($138 pretax). Results for the first six months were also affected by favorable discrete tax items in the prior period (see Note 22) of $163. The discussion of net sales and operating profit is included in the Business Segment Results below. 32 ​ An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ Deere & Company ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Cost of sales to net sales ​ ​ 70.2% ​ ​ 68.1% ​ ​ ​ ​ 73.5% ​ ​ 70.3% ​ ​ ​ • Material costs ​ ​ ​ ​ ​ Unfavorable ​ ​ ​ ​ ​ Unfavorable ​ • Tariffs, net of recoveries ​ ​ ​ ​ ​ Favorable ​ ​ ​ ​ ​ Unfavorable ​ • Production efficiencies ​ ​ ​ ​ ​ Favorable ​ ​ ​ ​ ​ Favorable ​ Increased mostly due to higher material costs as a result of inflationary pressures. Incremental tariffs affected both periods; however, tariff recoveries exceeded direct incremental tariff costs in the second quarter (see Global Trade Policies section in Additional Trends). Production efficiencies had a favorable impact resulting from increased manufacturing volumes for CF and SAT. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ $ 277 ​ $ 238 ​ +16 ​ $ 544 ​ $ 485 ​ +12 ​ Higher for both periods due to income earned from extended warranty premiums, higher service revenues, and a gain on the disposal of property. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 583 ​ ​ 549 ​ +6 ​ ​ 1,137 ​ ​ 1,075 ​ +6 ​ Increased due to continued focus on developing and deploying technology solutions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ 712 ​ ​ 784 ​ -9 ​ ​ 1,431 ​ ​ 1,614 ​ -11 ​ Decreased for both periods primarily due to lower average borrowing rates and lower average borrowings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating expenses ​ ​ 306 ​ ​ 287 ​ +7 ​ ​ 556 ​ ​ 536 ​ +4 ​ Increased for both periods due to higher depreciation of equipment on operating leases. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes ​ ​ 518 ​ ​ 539 ​ -4 ​ ​ 714 ​ ​ 566 ​ +26 ​ Decreased for the three months ended as a result of lower pretax income. Increased for the six months ended due to the favorable impact on the prior period of discrete tax adjustments (see Note 22). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33 ​ Business Segment Results – 2026 compared with 2025 The tariff impact was primarily included in the “Production Costs” category below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ Production & Precision Agriculture ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Net sales ​ $ 4,503 ​ $ 5,230 ​ -14 ​ $ 7,666 ​ $ 8,297 ​ -8 ​ Operating profit ​ ​ 706 ​ ​ 1,148 ​ -39 ​ ​ 845 ​ ​ 1,486 ​ -43 ​ Operating margin ​ ​ 15.7% ​ ​ 22.0% ​ ​ ​ ​ 11.0% ​ ​ 17.9% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +1 ​ ​ ​ ​ ​ ​ ​ +1 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +3 ​ ​ ​ ​ ​ ​ ​ +3 ​ ​ Production & Precision Agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in the U.S., Canada, and Brazil), partially offset by the positive effects of foreign currency translation (primarily the Euro and Brazilian real). Operating profit decreased primarily due to lower shipment volumes and higher production costs from an increase in material and freight costs, partially offset by the favorable effects of foreign currency exchange. Production & Precision Agriculture Operating Profit Second Quarter 2026 Compared to Second Quarter 2025 Sales for the first six months decreased as a result of lower shipment volumes (primarily in the U.S., Canada, and Brazil, offset by Europe), partially offset by the positive effects of foreign currency translation (primarily the Euro and Brazilian real). Operating profit decreased for the first six months primarily due to lower shipment volumes / sales mix and higher production costs, from an increase in material costs and higher tariffs. Production & Precision Agriculture Operating Profit First Six Months 2026 Compared to First Six Months 2025 ​ 34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ Small Agriculture & Turf ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Net sales ​ $ 3,485 ​ $ 2,994 ​ +16 ​ $ 5,653 ​ $ 4,742 ​ +19 ​ Operating profit ​ ​ 719 ​ ​ 574 ​ +25 ​ ​ 916 ​ ​ 698 ​ +31 ​ Operating margin ​ ​ 20.6% ​ ​ 19.2% ​ ​ ​ ​ 16.2% ​ ​ 14.7% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +1 ​ ​ ​ ​ ​ ​ ​ +2 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +2 ​ ​ ​ ​ ​ ​ ​ +2 ​ ​ Small Agriculture & Turf sales increased for the quarter as a result of higher shipment volumes (primarily in the U.S. and Europe) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization. Small Agriculture & Turf Operating Profit Second Quarter 2026 Compared to Second Quarter 2025 Sales for the first six months increased as a result of higher shipment volumes (primarily in the U.S., Europe, and India) and the positive effects of foreign currency translation (primarily the Euro). Operating profit for the first six months increased due to higher shipment volumes and favorable price realization, partially offset by higher production costs, driven by higher tariffs and an increase in material costs. Small Agriculture & Turf Operating Profit First Six Months 2026 Compared to First Six Months 2025 35 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ Construction & Forestry ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Net sales ​ $ 3,790 ​ $ 2,947 ​ +29 ​ $ 6,460 ​ $ 4,941 ​ +31 ​ Operating profit ​ ​ 561 ​ ​ 379 ​ +48 ​ ​ 698 ​ ​ 444 ​ +57 ​ Operating margin ​ ​ 14.8% ​ ​ 12.9% ​ ​ ​ ​ 10.8% ​ ​ 9.0% ​ ​ ​ Price realization ​ ​ ​ ​ ​ ​ ​ +3 ​ ​ ​ ​ ​ ​ ​ +1 ​ Currency translation impact on Net sales ​ ​ ​ ​ ​ ​ ​ +3 ​ ​ ​ ​ ​ ​ ​ +3 ​ ​ ​ Construction & Forestry sales increased for the quarter primarily as a result of higher shipment volumes (primarily in the U.S.) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization, partially offset by higher production costs, driven by an increase in material costs and higher tariffs. Construction & Forestry Operating Profit Second Quarter 2026 Compared to Second Quarter 2025 Sales for the first six months increased due to higher shipment volumes (primarily in the U.S.) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization, partially offset by higher tariffs and an increase in material costs. Construction & Forestry Operating Profit First Six Months 2026 Compared to First Six Months 2025 36 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ May 3 ​ April 27 ​ % ​ May 3 ​ April 27 ​ % ​ Financial Services ​ 2026 ​ 2025 ​ Change ​ 2026 ​ 2025 ​ Change ​ Revenue (including intercompany) ​ $ 1,509 ​ $ 1,501 ​ +1 ​ $ 2,997 ​ $ 3,074 ​ -3 ​ Interest expense ​ ​ 649 ​ ​ 721 ​ -10 ​ ​ 1,313 ​ ​ 1,487 ​ -12 ​ Net income ​ ​ 190 ​ ​ 161 ​ +18 ​ ​ 434 ​ ​ 391 ​ +11 ​ ​ Revenue for the first six months decreased primarily due to the deconsolidation of Banco John Deere S.A. (BJD) in the second quarter of 2025. The average balance of receivables and leases financed was 1% lower in the second quarter of 2026 and 2% lower in the first six months of 2026 compared with the same periods 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 favorable derivative valuation adjustments, partially offset by the impact of a lower average portfolio. Net income in the first six months was also impacted by a lower provision for credit losses and the prior period benefiting from a special item (see Note 22). 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: ● cash, cash equivalents, and marketable securities on hand ● funds from operations ● the issuance of commercial paper and term debt ● the securitization of retail notes ● bank lines of credit We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We are forecasting 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 higher accounts payable and accrued expenses and 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 3 ​ November 2 ​ April 27 ​ ​ ​ 2026 ​ 2025 ​ 2025 ​ Cash, cash equivalents, and marketable securities ​ $ 9,335 ​ $ 9,687 ​ $ 9,263 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts and notes receivable – net ​ ​ 7,571 ​ ​ 5,317 ​ ​ 6,748 ​ Ratio to prior 12 month’s net sales ​ ​ 19% ​ ​ 14% ​ ​ 17% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories ​ ​ 8,188 ​ ​ 7,406 ​ ​ 7,870 ​ Ratio to prior 12 month’s cost of sales ​ ​ 27% ​ ​ 26% ​ ​ 29% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unused credit lines ​ ​ 5,947 ​ ​ 7,268 ​ ​ 4,866 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Services: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of interest-bearing debt to stockholder’s equity ​ ​ 8.7 to 1 ​ ​ 8.4 to 1 ​ ​ 8.7 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. 37 ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ May 3, 2026 ​ April 27, 2025 ​ Net cash provided by operating activities ​ $ 1,042 ​ $ 568 ​ Net cash provided by investing activities ​ ​ 93 ​ ​ 779 ​ Net cash used for financing activities ​ ​ (1,627) ​ ​ (821) ​ Effect of exchange rate changes on cash, cash equivalents, and restricted cash ​ ​ 94 ​ ​ 20 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ $ (398) ​ $ 546 ​ ​ Cash inflows from consolidated operating activities in the first six months of 2026 were $1,042. This resulted mainly from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, a decrease in accrued employee profit-sharing incentives, and an OPEB contribution. Cash inflows from investing activities were $93 in the first six 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 and the acquisition of Tenna LLC (see Note 21). Cash outflows from financing activities were $1,627 in the first six months of 2026, due to cash returned to shareholders and lower external borrowings. Cash returned to shareholders was $1,378 in the first six months of 2026. Cash, cash equivalents, and restricted cash decreased $398 during the first six months of 2026. 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 $2,254 during the first six months of 2026, primarily due to a seasonal increase and higher sales volumes. These receivables increased $823 compared to a year ago due to higher sales volumes. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1% at May 3, 2026, 3% at November 2, 2025, and 7% at April 27, 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 $2,476 during the first six months of 2026 and decreased $1,600 in the past 12 months. The decrease for both periods was due to lower agriculture and turf retail customer receivables reflecting reduced demand and lower wholesale receivables driven by lower dealer inventory levels. Total acquisition volumes of financing receivables and equipment on operating leases were 12% higher in the first six 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 $782 during the first six months of 2026 primarily due to a seasonal increase, and increased by $318 compared to a year ago. A majority of these inventories are valued at cost on the “last-in, first-out” (LIFO) method. Property and Equipment. Property and equipment cash expenditures in the first six months of 2026 were $451 compared with $555 in the same period last year. Capital expenditures in 2026 are estimated to be approximately $1,400. Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased by $256 in the first six months of 2026, primarily due to a decrease in accrued expenses associated with employee benefits partially offset by an increase in trade payables. Accounts payable and accrued expenses increased $308 compared to a year ago due to an increase in trade payables, partially offset by a decrease in accrued expenses associated with employee benefits. Borrowings. Total external borrowings decreased by $114 in the first six months of 2026 and decreased $2,499 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 total capacity or “financing limit” of $2,500. At May 3, 2026, $1,738 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 six months of 2026, the financial services operations issued $1,439 and retired $2,108 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).” 38 ​ Lines of Credit. We also have access to bank lines of credit with various banks throughout the world. Worldwide lines of credit totaled $12.7 billion at May 3, 2026, consisting primarily of: ● a 364-day credit facility agreement of $5.5 billion expiring in the second quarter of 2027 ● a credit facility agreement of $3.25 billion expiring in the second quarter of 2029 ● a credit facility agreement of $3.25 billion expiring in the second quarter of 2031 At May 3, 2026, $5,947 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 Stable ​ Standard & Poor’s A A-1 Stable ​ ​ FORWARD-LOOKING STATEMENTS Certain statements contained herein, including in the sections 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: ● the agricultural business cycle, which can be unpredictable and is affected by factors such as farm income, international trade, world grain stocks, crop yields, available farm acres, soil conditions, prices for commodities and livestock, input costs including the availability and price of fertilizer, government farm programs, and availability of transport for crops ● macroeconomic conditions, including unemployment, inflation, interest rate volatility, energy price increases resulting from geopolitical conflicts, changes in consumer practices due to slower economic growth or a recession, regional or global liquidity constraints ● the uncertainty of government policies and actions with respect to the global trade environment including increased and contested tariffs announced by the U.S. government and retaliatory trade regulations ● political, economic, and social instability in the geographies in which we operate ● worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for our equipment ● rationalization, restructuring, relocation, expansion, and/or reconfiguration of manufacturing and warehouse facilities ● accurately forecasting customer demand for products and services, and adequately managing inventory ● uncertainty of our ability to sell products domestically or internationally, manage increased costs of production, absorb or pass on increased expenses, and accurately predict financial results and industry trends ● availability and price of raw materials, components, and whole goods ● delays or disruptions in our supply chain, including those arising from geopolitical conflicts ● changes in climate patterns, unfavorable weather events, and natural disasters 39 ​ ● suppliers’ and manufacturers’ business practices and compliance with applicable laws such as human rights, safety, environmental, and fair wages ● higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products and solutions ● the ability to attract, develop, engage, and retain qualified employees ● ability to adapt in highly competitive markets, including understanding and meeting customers’ changing expectations for products and solutions, including delivery and utilization of precision technology ● the ability to execute business strategies, including our Smart Industrial Operating Model and refined Leap Ambitions ● dealer practices and their ability to manage new and used inventory, distribute our products, and to provide support and service for precision technology solutions ● the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes ● negative claims or publicity that damage our reputation or brand ● the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge ● labor relations and contracts, including work stoppages and other disruptions ● security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products ● leveraging artificial intelligence and machine learning within our business processes ● changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign, and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, health and safety, human rights, import / export and trade, labor and employment, product liability, tariffs, tax, telematics, and telecommunications ● governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy ● warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations because of the deficient operation of our products ● investigations, claims, lawsuits, or other legal proceedings, including the lawsuit filed by the Federal Trade Commission (FTC) and the Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota, and Wisconsin alleging that we unlawfully withheld self-repair capabilities from farmers and independent repair providers ● loss of or challenges to intellectual property rights ​ Further information concerning us and our businesses, including factors that could materially affect our financial results, is included in our other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of 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. 40 ​ 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. ​ 41 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA ​ ​ STATEMENTS OF INCOME ​ ​ For the Three Months Ended May 3, 2026 and April 27, 2025 ​ ​ Unaudited ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ Net Sales and Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 11,778 ​ $ 11,171 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 11,778 ​ $ 11,171 ​ ​ Finance and interest income ​ ​ 110 ​ 108 ​ $ 1,359 ​ $ 1,380 ​ $ (155) ​ $ (134) ​ ​ 1,314 ​ ​ 1,354 1 ​ ​ Other income ​ ​ 212 ​ 187 ​ ​ 150 ​ 121 ​ ​ (85) ​ (70) ​ ​ 277 ​ 238 2, 3, 4 ​ ​ Total ​ ​ 12,100 ​ 11,466 ​ ​ 1,509 ​ 1,501 ​ ​ (240) ​ (204) ​ ​ 13,369 ​ 12,763 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 8,277 ​ 7,617 ​ ​ ​ ​ ​ ​ ​ ​ (11) ​ (8) ​ ​ 8,266 ​ ​ 7,609 4 ​ ​ Research and development expenses ​ ​ 583 ​ 549 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 583 ​ ​ 549 ​ ​ Selling, administrative and general expenses ​ ​ 980 ​ 961 ​ ​ 231 ​ 238 ​ ​ (2) ​ (2) ​ ​ 1,209 ​ 1,197 4 ​ ​ Interest expense ​ ​ 102 ​ 94 ​ ​ 649 ​ 721 ​ ​ (39) ​ (31) ​ ​ 712 ​ 784 1 ​ ​ Interest compensation to Financial Services ​ ​ 116 ​ 103 ​ ​ ​ ​ ​ ​ ​ ​ (116) ​ (103) ​ ​ ​ ​ ​ ​ 1 ​ ​ Other operating expenses ​ ​ 9 ​ 12 ​ ​ 369 ​ 335 ​ ​ (72) ​ (60) ​ ​ 306 ​ 287 3, 4, 5 ​ ​ Total ​ ​ 10,067 ​ 9,336 ​ ​ 1,249 ​ 1,294 ​ ​ (240) ​ (204) ​ ​ 11,076 ​ 10,426 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before Income Taxes ​ ​ 2,033 ​ 2,130 ​ ​ 260 ​ 207 ​ ​ ​ ​ ​ ​ ​ 2,293 ​ 2,337 ​ ​ Provision for income taxes ​ ​ 452 ​ 490 ​ ​ 66 ​ 49 ​ ​ ​ ​ ​ ​ ​ 518 ​ 539 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income after Income Taxes ​ ​ 1,581 ​ 1,640 ​ ​ 194 ​ 158 ​ ​ ​ ​ ​ ​ ​ 1,775 ​ 1,798 ​ ​ Equity in income (loss) of unconsolidated affiliates ​ ​ (1) ​ ​ ​ ​ (4) ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ (5) ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 1,580 ​ 1,640 ​ ​ 190 ​ 161 ​ ​ ​ ​ ​ ​ ​ 1,770 ​ 1,801 ​ ​ Less: Net loss attributable to noncontrolling interests ​ ​ (3) ​ (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3) ​ ​ (3) ​ ​ Net Income Attributable to Deere & Company ​ $ 1,583 ​ $ 1,643 ​ $ 190 ​ $ 161 ​ ​ ​ ​ ​ ​ ​ $ 1,773 ​ $ 1,804 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. ​ ​ 42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA (Continued) ​ ​ STATEMENTS OF INCOME ​ ​ For the Six Months Ended May 3, 2026 and April 27, 2025 ​ ​ Unaudited ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ Net Sales and Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 19,779 ​ $ 17,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 19,779 ​ $ 17,980 ​ ​ Finance and interest income ​ ​ 230 ​ 217 ​ $ 2,710 ​ $ 2,835 ​ $ (282) ​ $ (245) ​ ​ 2,658 ​ ​ 2,807 1 ​ ​ Other income ​ ​ 425 ​ 391 ​ ​ 287 ​ 239 ​ ​ (168) ​ (145) ​ ​ 544 ​ 485 2, 3, 4 ​ ​ Total ​ ​ 20,434 ​ 18,588 ​ ​ 2,997 ​ 3,074 ​ ​ (450) ​ (390) ​ ​ 22,981 ​ 21,272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales ​ ​ 14,568 ​ 12,662 ​ ​ ​ ​ ​ ​ ​ ​ (21) ​ (16) ​ ​ 14,547 ​ ​ 12,646 4 ​ ​ Research and development expenses ​ ​ 1,137 ​ 1,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,137 ​ ​ 1,075 ​ ​ Selling, administrative and general expenses ​ ​ 1,787 ​ 1,761 ​ ​ 398 ​ 412 ​ ​ (4) ​ (4) ​ ​ 2,181 ​ 2,169 4 ​ ​ Interest expense ​ ​ 195 ​ 178 ​ ​ 1,313 ​ 1,487 ​ ​ (77) ​ (51) ​ ​ 1,431 ​ 1,614 1 ​ ​ Interest compensation to Financial Services ​ ​ 205 ​ 194 ​ ​ ​ ​ ​ ​ ​ ​ (205) ​ (194) ​ ​ ​ ​ ​ ​ 1 ​ ​ Other operating expenses ​ ​ (37) ​ (38) ​ ​ 736 ​ 699 ​ ​ (143) ​ (125) ​ ​ 556 ​ 536 3, 4, 5 ​ ​ Total ​ ​ 17,855 ​ 15,832 ​ ​ 2,447 ​ 2,598 ​ ​ (450) ​ (390) ​ ​ 19,852 ​ 18,040 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before Income Taxes ​ ​ 2,579 ​ 2,756 ​ ​ 550 ​ 476 ​ ​ ​ ​ ​ ​ ​ 3,129 ​ 3,232 ​ ​ Provision for income taxes ​ ​ 587 ​ 477 ​ ​ 127 ​ 89 ​ ​ ​ ​ ​ ​ ​ 714 ​ 566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income after Income Taxes ​ ​ 1,992 ​ 2,279 ​ ​ 423 ​ 387 ​ ​ ​ ​ ​ ​ ​ 2,415 ​ 2,666 ​ ​ Equity in income (loss) of unconsolidated affiliates ​ ​ (1) ​ (3) ​ ​ 11 ​ 4 ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ ​ 1,991 ​ 2,276 ​ ​ 434 ​ 391 ​ ​ ​ ​ ​ ​ ​ 2,425 ​ 2,667 ​ ​ Less: Net loss attributable to noncontrolling interests ​ ​ (4) ​ (6) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (4) ​ ​ (6) ​ ​ Net Income Attributable to Deere & Company ​ $ 1,995 ​ $ 2,282 ​ $ 434 ​ $ 391 ​ ​ ​ ​ ​ ​ ​ $ 2,429 ​ $ 2,673 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. ​ ​ 43 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL CONSOLIDATING DATA (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ ​ May 3 ​ Nov 2 ​ Apr 27 ​ May 3 ​ Nov 2 ​ Apr 27 ​ May 3 ​ Nov 2 ​ Apr 27 ​ May 3 ​ Nov 2 ​ Apr 27 ​ ​ ​ ​ 2026 ​ 2025 ​ 2025 ​ 2026 ​ 2025 ​ 2025 ​ 2026 ​ 2025 ​ 2025 ​ 2026 ​ 2025 ​ 2025 ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 5,917 ​ $ 6,340 ​ $ 6,331 ​ $ 1,988 ​ $ 1,936 ​ $ 1,660 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,905 ​ $ 8,276 ​ $ 7,991 ​ ​ Marketable securities ​ ​ 173 ​ 217 ​ 139 ​ ​ 1,257 ​ 1,194 ​ 1,133 ​ ​ ​ ​ ​ ​ ​ ​ ​ 1,430 ​ 1,411 ​ 1,272 ​ ​ Receivables from Financial Services ​ ​ 4,642 ​ 4,649 ​ 2,497 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (4,642) ​ $ (4,649) ​ $ (2,497) ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ ​ Trade accounts and notes receivable – net ​ ​ 1,579 ​ 1,316 ​ 1,429 ​ ​ 8,001 ​ 5,900 ​ 7,406 ​ ​ (2,009) ​ (1,899) ​ (2,087) ​ ​ 7,571 ​ 5,317 ​ 6,748 7 ​ ​ Financing receivables – net ​ ​ 102 ​ 88 ​ 82 ​ ​ 42,814 ​ 44,487 ​ 42,947 ​ ​ ​ ​ ​ ​ ​ ​ ​ 42,916 ​ 44,575 ​ 43,029 ​ ​ Financing receivables securitized – net ​ ​ 1 ​ ​ 1 ​ ​ 2 ​ ​ 6,099 ​ 6,830 ​ 7,763 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,100 ​ 6,831 ​ 7,765 ​ ​ Other receivables ​ ​ 2,062 ​ 1,809 ​ 2,009 ​ ​ 573 ​ 658 ​ 1,009 ​ ​ (53) ​ (64) ​ (43) ​ ​ 2,582 ​ 2,403 ​ 2,975 8 ​ ​ Equipment on operating leases – net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,514 ​ 7,600 ​ 7,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,514 ​ 7,600 ​ 7,336 ​ ​ Inventories ​ ​ 8,188 ​ 7,406 ​ 7,870 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,188 ​ ​ 7,406 ​ ​ 7,870 ​ ​ Property and equipment – net ​ ​ 8,004 ​ 8,047 ​ 7,523 ​ ​ 31 ​ 32 ​ 32 ​ ​ ​ ​ ​ ​ ​ ​ ​ 8,035 ​ 8,079 ​ 7,555 ​ ​ Goodwill ​ ​ 4,513 ​ 4,188 ​ 4,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,513 ​ ​ 4,188 ​ ​ 4,094 ​ ​ Other intangible assets – net ​ ​ 975 ​ 892 ​ 964 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 975 ​ 892 ​ 964 ​ ​ Retirement benefits ​ ​ 3,351 ​ 3,181 ​ 3,046 ​ ​ 101 ​ 94 ​ 89 ​ ​ (2) ​ (2) ​ (2) ​ ​ 3,450 ​ 3,273 ​ 3,133 ​ ​ Deferred income taxes ​ ​ 2,532 ​ 2,507 ​ 2,377 ​ ​ 45 ​ 46 ​ 42 ​ ​ (216) ​ (269) ​ (331) ​ ​ 2,361 ​ 2,284 ​ 2,088 9 ​ ​ Other assets ​ ​ 2,358 ​ 2,218 ​ 2,349 ​ ​ 1,126 ​ 1,244 ​ 1,152 ​ ​ (23) ​ (1) ​ (18) ​ ​ 3,461 ​ 3,461 ​ 3,483 ​ ​ Total Assets ​ $ 44,397 ​ $ 42,859 ​ $ 40,712 ​ $ 69,549 ​ $ 70,021 ​ $ 70,569 ​ $ (6,945) ​ $ (6,884) ​ $ (4,978) ​ $ 107,001 ​ $ 105,996 ​ $ 106,303 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings ​ $ 397 ​ $ 414 ​ $ 241 ​ $ 15,235 ​ $ 13,382 ​ $ 15,707 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 15,632 ​ $ 13,796 ​ $ 15,948 ​ ​ Short-term securitization borrowings ​ ​ 1 ​ ​ 1 ​ ​ 1 ​ ​ 5,928 ​ 6,595 ​ 7,561 ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,929 ​ 6,596 ​ 7,562 ​ ​ Payables to equipment operations ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,642 ​ 4,649 ​ 2,497 ​ $ (4,642) ​ $ (4,649) ​ $ (2,497) ​ ​ ​ ​ ​ ​ ​ 6 ​ ​ Accounts payable and accrued expenses ​ ​ 12,600 ​ 12,757 ​ 12,180 ​ ​ 3,138 ​ 3,116 ​ 3,313 ​ ​ (2,085) ​ (1,964) ​ (2,148) ​ ​ 13,653 ​ 13,909 ​ 13,345 7, 8 ​ ​ Deferred income taxes ​ ​ 331 ​ 347 ​ 405 ​ ​ 307 ​ 356 ​ 422 ​ ​ (216) ​ (269) ​ (331) ​ ​ 422 ​ 434 ​ 496 9 ​ ​ Long-term borrowings ​ ​ 8,857 ​ 8,756 ​ 8,685 ​ ​ 33,404 ​ 34,788 ​ 34,126 ​ ​ ​ ​ ​ ​ ​ ​ ​ 42,261 ​ 43,544 ​ 42,811 ​ ​ Retirement benefits and other liabilities ​ ​ 1,579 ​ 1,646 ​ 1,695 ​ ​ 67 ​ 66 ​ 70 ​ ​ (2) ​ (2) ​ (2) ​ ​ 1,644 ​ 1,710 ​ 1,763 ​ ​ Total liabilities ​ ​ 23,765 ​ ​ 23,921 ​ ​ 23,207 ​ ​ 62,721 ​ ​ 62,952 ​ ​ 63,696 ​ ​ (6,945) ​ ​ (6,884) ​ ​ (4,978) ​ ​ 79,541 ​ ​ 79,989 ​ ​ 81,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 17) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interest ​ ​ 47 ​ ​ 51 ​ ​ 83 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 47 ​ ​ 51 ​ ​ 83 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Deere & Company stockholders’ equity ​ ​ 27,406 ​ 25,950 ​ 24,287 ​ ​ 6,828 ​ ​ 7,069 ​ ​ 6,873 ​ ​ (6,828) ​ ​ (7,069) ​ ​ (6,873) ​ ​ 27,406 ​ ​ 25,950 ​ ​ 24,287 10 ​ ​ Noncontrolling interests ​ ​ 7 ​ 6 ​ 8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7 ​ ​ 6 ​ ​ 8 ​ ​ Financial Services’ equity ​ ​ (6,828) ​ (7,069) ​ (6,873) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6,828 ​ ​ 7,069 ​ ​ 6,873 ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ Adjusted total stockholders’ equity ​ ​ 20,585 ​ 18,887 ​ 17,422 ​ ​ 6,828 ​ 7,069 ​ 6,873 ​ ​ ​ ​ ​ ​ ​ ​ ​ 27,413 ​ 25,956 ​ 24,295 ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 44,397 ​ $ 42,859 ​ $ 40,712 ​ $ 69,549 ​ $ 70,021 ​ $ 70,569 ​ $ (6,945) ​ $ (6,884) ​ $ (4,978) ​ $ 107,001 ​ $ 105,996 ​ $ 106,303 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. ​ ​ 44 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DEERE & COMPANY ​ ​ SUPPLEMENTAL CONSOLIDATING DATA (Continued) ​ ​ STATEMENTS OF CASH FLOWS ​ ​ For the Six Months Ended May 3, 2026 and April 27, 2025 ​ ​ Unaudited ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUIPMENT ​ FINANCIAL ​ ​ ​ ​ ​ ​ ​ ​ OPERATIONS ​ SERVICES ​ ELIMINATIONS ​ CONSOLIDATED ​ ​ ​ ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ 2026 ​ 2025 ​ ​ Cash Flows from Operating Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 1,991 ​ $ 2,276 ​ $ 434 ​ $ 391 ​ ​ ​ ​ ​ ​ ​ $ 2,425 ​ $ 2,667 ​ ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for credit losses ​ 1 ​ 11 ​ 126 ​ 163 ​ ​ ​ ​ ​ 127 ​ 174 ​ ​ Depreciation and amortization ​ 689 ​ 643 ​ 546 ​ 529 ​ $ (51) ​ $ (68) ​ 1,184 ​ 1,104 11 ​ ​ Impairments and other adjustments ​ ​ ​ ​ ​ ​ ​ ​ (32) ​ ​ ​ ​ ​ ​ ​ (32) ​ ​ Share-based compensation expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 69 ​ ​ 54 ​ ​ 69 ​ ​ 54 12 ​ ​ Distributed earnings of Financial Services ​ 734 ​ 984 ​ ​ ​ ​ ​ (734) ​ (984) ​ ​ ​ ​ 13 ​ ​ Provision (credit) for deferred income taxes ​ (19) ​ (153) ​ (49) ​ 164 ​ ​ ​ ​ ​ (68) ​ 11 ​ ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Receivables related to sales ​ (225) ​ (185) ​ ​ ​ ​ ​ ​ ​ ​ (859) ​ ​ (884) ​ ​ (1,084) ​ ​ (1,069) 14, 16 ​ ​ Inventories ​ (649) ​ (691) ​ ​ ​ ​ ​ ​ ​ ​ (89) ​ ​ (81) ​ ​ (738) ​ ​ (772) 15 ​ ​ Accounts payable and accrued expenses ​ (237) ​ (1,069) ​ 14 ​ 102 ​ (110) ​ 69 ​ (333) ​ (898) 16 ​ ​ Accrued income taxes payable/receivable ​ 15 ​ (77) ​ (20) ​ (70) ​ ​ ​ ​ ​ (5) ​ (147) ​ ​ Retirement benefits ​ (285) ​ (753) ​ (5) ​ (41) ​ ​ ​ ​ ​ (290) ​ (794) ​ ​ Other ​ (335) ​ 59 ​ 140 ​ 224 ​ (50) ​ (13) ​ (245) ​ 270 11, 12, 15 ​ ​ Net cash provided by operating activities ​ 1,680 ​ 1,045 ​ 1,186 ​ 1,430 ​ (1,824) ​ (1,907) ​ 1,042 ​ 568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collections of receivables (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ 14,641 ​ 14,684 ​ (256) ​ (336) ​ 14,385 ​ 14,348 14 ​ ​ Proceeds from maturities and sales of marketable securities ​ 91 ​ 18 ​ 167 ​ 227 ​ ​ ​ ​ ​ 258 ​ 245 ​ ​ Proceeds from sales of equipment on operating leases ​ ​ ​ ​ ​ ​ ​ 1,019 ​ 1,001 ​ ​ ​ ​ ​ 1,019 ​ 1,001 ​ ​ Cost of receivables acquired (excluding receivables related to sales) ​ ​ ​ ​ ​ ​ ​ (13,273) ​ (12,875) ​ 116 ​ 131 ​ (13,157) ​ (12,744) 14 ​ ​ Acquisition of business, net of cash acquired ​ ​ (439) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (439) ​ ​ ​ ​ Purchases of marketable securities ​ ​ (42) ​ (20) ​ (242) ​ (327) ​ ​ ​ ​ ​ (284) ​ (347) ​ ​ Purchases of property and equipment ​ (451) ​ (555) ​ ​ ​ ​ ​ ​ ​ ​ ​ (451) ​ (555) ​ ​ Cost of equipment on operating leases acquired ​ ​ ​ ​ ​ ​ ​ (1,415) ​ (1,363) ​ 120 ​ 109 ​ (1,295) ​ (1,254) 15 ​ ​ Increase in trade and wholesale receivables ​ ​ ​ ​ ​ ​ ​ (1,110) ​ (1,019) ​ 1,110 ​ 1,019 ​ ​ ​ ​ 14 ​ ​ Collections of receivables from unconsolidated affiliates ​ ​ ​ ​ ​ 183 ​ 152 ​ 51 ​ ​ ​ ​ ​ 152 ​ 234 ​ ​ Collateral on derivatives – net ​ ​ 2 ​ ​ 3 ​ ​ (10) ​ ​ 24 ​ ​ ​ ​ ​ ​ ​ ​ (8) ​ ​ 27 ​ ​ Other ​ (54) ​ (72) ​ (33) ​ (104) ​ ​ ​ ​ ​ (87) ​ (176) ​ ​ Net cash provided by (used for) investing activities ​ (893) ​ (443) ​ (104) ​ 299 ​ 1,090 ​ 923 ​ 93 ​ 779 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net proceeds (payments) in short-term borrowings (original maturities three months or less) ​ (4) ​ 65 ​ 2,250 ​ 486 ​ ​ ​ ​ ​ 2,246 ​ 551 ​ ​ Change in intercompany receivables/payables ​ 21 ​ 428 ​ (21) ​ (428) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from borrowings issued (original maturities greater than three months) ​ 252 ​ 2,043 ​ 3,199 ​ 3,113 ​ ​ ​ ​ ​ 3,451 ​ 5,156 ​ ​ Payments of borrowings (original maturities greater than three months) ​ (181) ​ (766) ​ (5,754) ​ (4,071) ​ ​ ​ ​ ​ (5,935) ​ (4,837) ​ ​ Repurchases of common stock ​ (500) ​ (838) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (500) ​ ​ (838) ​ ​ Dividends paid ​ (878) ​ (843) ​ (734) ​ ​ (984) ​ 734 ​ ​ 984 ​ (878) ​ ​ (843) 13 ​ ​ Other ​ 5 ​ (4) ​ (16) ​ (6) ​ ​ ​ ​ ​ (11) ​ (10) ​ ​ Net cash provided by (used for) financing activities ​ (1,285) ​ 85 ​ (1,076) ​ (1,890) ​ 734 ​ 984 ​ (1,627) ​ (821) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash ​ 79 ​ 22 ​ 15 ​ (2) ​ ​ ​ ​ ​ 94 ​ 20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash ​ (419) ​ 709 ​ 21 ​ (163) ​ ​ ​ ​ ​ (398) ​ 546 ​ ​ Cash, Cash Equivalents, and Restricted Cash at Beginning of Period ​ 6,364 ​ 5,643 ​ 2,169 ​ 1,990 ​ ​ ​ ​ ​ 8,533 ​ 7,633 ​ ​ Cash, Cash Equivalents, and Restricted Cash at End of Period ​ $ 5,945 ​ $ 6,352 ​ $ 2,190 ​ $ 1,827 ​ ​ ​ ​ ​ ​ ​ $ 8,135 ​ $ 8,179 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 . ​ ​ 45 ​ 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.