What changed in this filing

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Item 1. Financial Statements

2026-08-27 compared with 2026-05-28 · 154 added, 150 removed, 936 unchanged (25% of the section changed)

2 unchanged sentences

STATEMENTS OF CONSOLIDATED INCOME

For the Three and Six Months Ended May 3, 2026 and April 27, 2025

For the Three and Nine Months Ended August 2, 2026 and July 27, 2025

(In millions of dollars and shares except per share amounts) Unaudited

Three Months Ended

Six Months Ended

Nine Months Ended

Net Sales and Revenues

9 unchanged sentences

Income of Consolidated Group

Equity in income (loss) of unconsolidated affiliates

Equity in income of unconsolidated affiliates

Net loss attributable to noncontrolling interests

7 unchanged sentences

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

For the Three and Six Months Ended May 3, 2026 and April 27, 2025

For the Three and Nine Months Ended August 2, 2026 and July 27, 2025

(In millions of dollars) Unaudited

Three Months Ended

Six Months Ended

Nine Months Ended

Other Comprehensive Income (Loss), Net of Income Taxes

5 unchanged sentences

Comprehensive Income

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive loss attributable to noncontrolling interests

Comprehensive Income Attributable to Deere & Company

25 unchanged sentences

Stockholders’ Equity

Common stock, $ 1 par value (issued shares at May 3, 2026 – 536,431,204 )

Common stock, $ 1 par value (issued shares at August 2, 2026 – 536,431,204 )

Common stock in treasury

8 unchanged sentences

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Six Months Ended May 3, 2026 and April 27, 2025

For the Nine Months Ended August 2, 2026 and July 27, 2025

(In millions of dollars) Unaudited

7 unchanged sentences

Share-based compensation expense

Provision (credit) for deferred income taxes

Credit for deferred income taxes

Changes in assets and liabilities:

9 unchanged sentences

Cost of receivables acquired (excluding receivables related to sales)

Acquisition of business, net of cash acquired

Acquisitions of businesses, net of cash acquired

Purchases of marketable securities

3 unchanged sentences

Collateral on derivatives – net

Net cash provided by investing activities

Net cash used for investing activities

Cash Flows from Financing Activities

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

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

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

4 unchanged sentences

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

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

Net Increase in Cash, Cash Equivalents, and Restricted Cash

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

7 unchanged sentences

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended May 3, 2026 and April 27, 2025

For the Three and Nine Months Ended August 2, 2026 and July 27, 2025

(In millions of dollars) Unaudited

6 unchanged sentences

Income (Loss)

Three Months Ended April 27, 2025

Balance January 26, 2025

Three Months Ended July 27, 2025

Balance April 27, 2025

Net income (loss)

4 unchanged sentences

Share based awards and other

Balance April 27, 2025

Six Months Ended April 27, 2025

Balance July 27, 2025

Nine Months Ended July 27, 2025

Balance October 27, 2024

5 unchanged sentences

Share based awards and other

Balance April 27, 2025

Three Months Ended May 3, 2026

Balance February 1, 2026

Balance July 27, 2025

Three Months Ended August 2, 2026

Balance May 3, 2026

Net income (loss)

4 unchanged sentences

Share based awards and other

Balance May 3, 2026

Six Months Ended May 3, 2026

Balance August 2, 2026

Nine Months Ended August 2, 2026

Balance November 2, 2025

5 unchanged sentences

Share based awards and other

Balance May 3, 2026

Balance August 2, 2026

See Condensed Notes to Interim Consolidated Financial Statements.

7 unchanged sentences

We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period.

The second quarter ends for fiscal years 2026 and 2025 were May 3, 2026, and April 27, 2025, respectively.

The third quarter ends for fiscal years 2026 and 2025 were August 2, 2026, and July 27, 2025, respectively.

Both quarters contained 13 weeks, while both year-to-date periods contained 39 weeks.

11 unchanged sentences

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.”

Financial results of BJD are reported in “Equity in income 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:

37 unchanged sentences

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.

17 unchanged sentences

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

Three Months Ended May 3, 2026

Three Months Ended August 2, 2026

Primary geographic markets:

20 unchanged sentences

At a point in time

Six Months Ended May 3, 2026

Nine Months Ended August 2, 2026

Primary geographic markets:

20 unchanged sentences

At a point in time

Three Months Ended April 27, 2025

Three Months Ended July 27, 2025

Primary geographic markets:

20 unchanged sentences

At a point in time

Six Months Ended April 27, 2025

Nine Months Ended July 27, 2025

Primary geographic markets:

22 unchanged sentences

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 $ 2,155 , $ 2,039 , and $ 2,089 at May 3, 2026, November 2, 2025, and April 27, 2025, respectively.

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 $ 2,120 , $ 2,039 , and $ 2,100 at August 2, 2026, November 2, 2025, and July 27, 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 $ 163 and $ 176 during the three months and $ 428 and $ 373 during the six months ended May 3, 2026, and April 27, 2025, respectively.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $ 1,855 at May 3, 2026.

Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $ 131 and $ 125 during the three months and $ 560 and $ 498 during the nine months ended August 2, 2026, and July 27, 2025, respectively.

The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $ 1,871 at August 2, 2026.

The estimated revenue to be recognized by fiscal year follows:

10 unchanged sentences

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

Three Months Ended May 3, 2026

Three Months Ended August 2, 2026

Cumulative translation adjustment

Unrealized translation gain (loss)

Reclassification of realized (gain) loss to Other income

Net unrealized translation gain (loss)

Unrealized gain (loss) on derivatives:

4 unchanged sentences

Unrealized holding gain (loss)

Reclassification of realized (gain) loss to Other income

Net unrealized gain (loss) on debt securities

Retirement benefits adjustment:

Net actuarial gain (loss) and prior service credit (cost)

Reclassification to Other operating expenses through amortization of:

3 unchanged sentences

Total other comprehensive income (loss)

Six Months Ended May 3, 2026

Nine Months Ended August 2, 2026

Cumulative translation adjustment:

8 unchanged sentences

Unrealized holding gain (loss)

Reclassification of realized (gain) loss to Other income

Net unrealized gain (loss) on debt securities

6 unchanged sentences

Total other comprehensive income (loss)

Three Months Ended April 27, 2025

Three Months Ended July 27, 2025

Cumulative translation adjustment

1 unchanged sentence

Unrealized hedging gain (loss)

Reclassification of realized (gain) loss to Interest expense

Net unrealized gain (loss) on derivatives

8 unchanged sentences

Prior service (credit) cost

Settlements/curtailment

Net unrealized gain (loss) on retirement benefits adjustment

Total other comprehensive income (loss)

Six Months Ended April 27, 2025

Nine Months Ended July 27, 2025

Cumulative translation adjustment

12 unchanged sentences

Prior service (credit) cost

Settlements/curtailment

Net unrealized gain (loss) on retirement benefits adjustment

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Net income attributable to Deere & Company

13 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Interest cost

2 unchanged sentences

Amortization of prior service cost

Settlements/curtailment

Interest cost

3 unchanged sentences

Net (benefit) cost

During the first six months of 2026, we contributed and expect to contribute the following amounts to our pension and OPEB plans:

During the first nine months of 2026, we contributed and expect to contribute the following amounts to our pension and OPEB plans:

Expected contributions remainder of the year

(7) INCOME TAXES

The effective tax rate was 22.6 % and 23.1 % for the second quarter of 2026 and 2025, respectively, and 22.8 % and 17.5 % for the six months ended May 3, 2026, and April 27, 2025, respectively.

The effective tax rate in the six months ended April 27, 2025 was impacted by favorable net discrete tax items (see Note 22).

The effective tax rate was 28.1 % and 21.2 % for the third quarter of 2026 and 2025, respectively, and 24.8 % and 18.7 % for the nine months ended August 2, 2026, and July 27, 2025, respectively.

The increase in the 2026 effective tax rates was primarily due to unfavorable discrete items in the three months and nine months ended August 2, 2026, and favorable discrete items in the nine months ended July 27, 2025 (see Note 22 for prior period special tax items).

(8) Segment DATA

12 unchanged sentences

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 made to determine operating segment data.

Segment operating profit and operating assets are measured

using accounting policies consistent with those applied in the consolidated financial statements.

Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment data.

Intersegment transactions are primarily made between the FS segment and PPA, SAT, and CF segments, and are recognized at current market prices.

3 unchanged sentences

Information relating to operations by operating segment was as follows:

Three Months Ended May 3, 2026

Three Months Ended August 2, 2026

External net sales

7 unchanged sentences

Segment operating profit

Six Months Ended May 3, 2026

Nine Months Ended August 2, 2026

External net sales

7 unchanged sentences

Segment operating profit

Three Months Ended April 27, 2025

Three Months Ended July 27, 2025

External net sales

7 unchanged sentences

Segment operating profit

Six Months Ended April 27, 2025

Nine Months Ended July 27, 2025

External net sales

17 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Reconciliation of net sales and revenues

16 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Depreciation* and amortization expense

14 unchanged sentences

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:

August 2, 2026

Revolving Charge Accounts

19 unchanged sentences

Total retail customer receivables

Write-offs for the six months ended May 3, 2026:

Write-offs for the nine months ended August 2, 2026:

Agriculture and turf

25 unchanged sentences

Construction and forestry

April 27, 2025

July 27, 2025

Revolving Charge Accounts

19 unchanged sentences

Total retail customer receivables

Write-offs for the six months ended April 27, 2025:

Write-offs for the nine months ended July 27, 2025:

Agriculture and turf

10 unchanged sentences

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

Three Months Ended May 3, 2026

Three Months Ended August 2, 2026

3 unchanged sentences

Beginning of period balance

Translation adjustments

End of period balance

Six Months Ended May 3, 2026

Nine Months Ended August 2, 2026

Beginning of period balance

Translation adjustments

End of period balance

1 unchanged sentence

End of period balance

Three Months Ended April 27, 2025

Three Months Ended July 27, 2025

Beginning of period balance

Translation adjustments

End of period balance

Six Months Ended April 27, 2025

Nine Months Ended July 27, 2025

Beginning of period balance

2 unchanged sentences

End of period balance

The allowance for credit losses on retail notes and financing lease receivables increased slightly in the second quarter and first six months of 2026, primarily due to higher expected losses on construction retail accounts.

The allowance for credit losses on retail notes and financing lease receivables remained relatively flat in the third quarter of 2026 and increased slightly in the first nine months of 2026, due to higher expected losses on construction retail accounts.

In 2025, the allowance for credit losses remained relatively flat in the third quarter and increased in the first nine months, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions.

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.

Before offering a modification, we generally 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 or similar proceedings.

Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Modified financing receivables

2 unchanged sentences

The weighted-average effects for contract modifications were as follows in months:

Six Months Ended

Nine Months Ended

Payment deferral

4 unchanged sentences

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 May 3, 2026, and April 27, 2025, were as follows:

The ending amortized cost and performance of financing receivables modified during the prior twelve months ended August 2, 2026, and July 27, 2025, were as follows:

30-59 days past due

2 unchanged sentences

Non-performing

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months and the six months ended May 3, 2026.

In addition, at May 3, 2026, commitments to provide additional financing to these customers were not significant.

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months and the nine months ended August 2, 2026.

In addition, at August 2, 2026, commitments to provide additional financing to these customers were not significant.

(10) Securitization of Financing Receivables

11 unchanged sentences

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:

The components of the securitization programs were as follows:

Financing receivables securitized (retail notes)

16 unchanged sentences

Goodwill at October 27, 2024

Acquisitions (Note 21)

Translation adjustments

Goodwill at April 27, 2025

Goodwill at July 27, 2025

Goodwill at November 2, 2025

Acquisition (Note 21)

Acquisitions (Note 21)

Translation adjustments

Goodwill at May 3, 2026

Goodwill at August 2, 2026

The components of other intangible assets were as follows:

7 unchanged sentences

Other intangible assets – net

The amortization expense of other intangible assets in the second quarter and the first six months of 2026 was $ 36 and $ 70 , respectively, and for the second quarter and the first six months of 2025 was $ 37 and $ 78 , respectively.

The amortization expense of other intangible assets in the third quarter and the first nine months of 2026 was $ 40 and $ 110 , respectively, and for the third quarter and the first nine months of 2025 was $ 31 and $ 110 , respectively.

The estimated amortization expense for the next five years is as follows:

30 unchanged sentences

Accounts payable and accrued expenses

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $ 2,012 at May 3, 2026, $ 1,892 at November 2, 2025, and $ 2,059 at April 27, 2025.

Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $ 2,198 at August 2, 2026, $ 1,892 at November 2, 2025, and $ 2,268 at July 27, 2025.

Other eliminations were made for accrued taxes and other accrued expenses.

17 unchanged sentences

3.75 % notes due 2050

5.70 % notes due 2055

1.85 % notes due 2028 (€ 600 principal)

7 unchanged sentences

* 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.

The 4.15 % notes due 2030 and 4.85 % notes due 2031 listed above were issued on October 9, 2025, and July 15, 2026, respectively, by Deere Funding Canada Corporation (DFCC), an indirect wholly-owned finance subsidiary of Deere & Company.

These notes are fully and unconditionally guaranteed on a senior unsecured basis only by Deere & Company and, therefore, rank equally with all our outstanding notes and debentures.

No other subsidiaries of Deere & Company have guaranteed these notes.

We have elected to exclude summarized financial information in accordance with the exception provided in Rule 13-01 of Regulation S-X.

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:

The principal balances of the 4.15 % notes due 2030, 4.85 % notes due 2031, and medium-term notes were as follows:

4.15 % notes due 2030

4.85 % notes due 2031

Medium-term notes

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Sales-type and direct finance lease revenues

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Beginning of period balance

5 unchanged sentences

In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment.

As of May 3, 2026, the notional value of these guarantees was $ 137 .

As of August 2, 2026, the notional value of these guarantees was $ 145 .

We may repossess the equipment collateralizing the receivables.

At May 3, 2026, the accrued losses under these guarantees were not material.

We also had guarantees to a VIE (see Note 1) totaling $ 172 at May 3, 2026.

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $ 150 at May 3, 2026.

The accrued liability for these contingencies was $ 40 at May 3, 2026.

At May 3, 2026, we had commitments of approximately $ 525 for the construction and acquisition of property and equipment.

Also, at May 3, 2026, we had restricted assets of $ 297 , 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.

At August 2, 2026, the accrued losses under these guarantees were not material.

We also had guarantees to a VIE (see Note 1) totaling $ 168 at August 2, 2026.

We also had other miscellaneous contingent liabilities and guarantees totaling approximately $ 115 at August 2, 2026.

The accrued liability for these contingencies was $ 25 at August 2, 2026.

At August 2, 2026, we had commitments of approximately $ 580 for the construction and acquisition of property and equipment.

Also, at August 2, 2026, we had restricted assets of $ 286 , 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 May 3, 2026.

The accrual includes losses associated with a settlement agreement in a consolidated multidistrict class action antitrust lawsuit, which was recorded in the fourth quarter of 2025.

The accrual for all other matters 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, product liability (including asbestos-related liability), employment, patent, and trademark matters.

The accrued losses on unresolved legal matters were not material at August 2, 2026.

We believe the reasonably possible range of losses, if any, for unresolved legal actions would not have a material effect on our consolidated financial statements.

The most prevalent legal claims that we face relate to product liability (including asbestos-related liability), employment, patent, trademark, and antitrust matters.

(18) FAIR VALUE MEASUREMENTS

1 unchanged sentence

Long-term borrowings exclude finance lease liabilities.

August 2, 2026

November 2, 2025

April 27, 2025

July 27, 2025

Financing receivables – net

7 unchanged sentences

The fair values of the remaining financing receivables approximated the carrying amounts.

At May 3, 2026 , and November 2, 2025 , we had $ 42 and $ 60 , respectively, marketable securities classified as held-to-maturity Level 2 international corporate debt securities.

At August 2, 2026 , November 2, 2025 , and July 27, 2025 , we had $ 39 , $ 60 , and $ 62 , respectively, marketable securities classified as held-to-maturity Level 2 international corporate debt securities.

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

Certain long-term borrowings have been swapped to current variable interest rates.

20 unchanged sentences

government sponsored enterprises.

The contractual maturities of available-for-sale debt securities at May 3, 2026, follow:

The contractual maturities of available-for-sale debt securities at August 2, 2026, follow:

Due in one year or less

12 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Property and equipment – net 1

1 unchanged sentence

Assets held for sale

1 Related to assessments of our external overseas battery operations performed in the third quarter of 2025.

1 Fair values at November 2, 2025, and July 27, 2025, are related to an assessment 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 the 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

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.

5 unchanged sentences

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 tradename of our external overseas battery operations was measured using an income approach.

The inputs include reproduction cost estimates adjusted for physical deterioration and functional obsolescence (see Note 22).

Other intangible assets – net – The impairment of customer relationships and tradename of our external overseas battery operations was measured using an income approach (see Note 22).

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.

7 unchanged sentences

Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”

August 2, 2026

November 2, 2025

April 27, 2025

July 27, 2025

Cash flow hedges:

24 unchanged sentences

Hedging Amounts

August 2, 2026

5 unchanged sentences

Long-term borrowings

April 27, 2025

July 27, 2025

Short-term borrowings

Long-term borrowings

The table above includes carrying amounts of short-term borrowings of $ 3,534 , $ 2,544 , and $ 1,212 and of long-term borrowings of $ 11,704 , $ 11,963 , and $ 10,533 at May 3, 2026, November 2, 2025, and April 27, 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 ($ 39 ), ($ 30 ), and ($ 12 ) and of long-term borrowings of ($ 120 ), ($ 185 ), and ($ 141 ) at May 3, 2026, November 2, 2025, and April 27, 2025, respectively.

At April 27, 2025, long-term borrowings with a carrying amount of $ 399 were in both active and discontinued hedging relationships as a result of hedging activities associated with reference rate reform.

The table above includes carrying amounts of short-term borrowings of $ 2,500 , $ 2,544 , and $ 2,252 and of long-term borrowings of $ 13,572 , $ 11,963 , and $ 10,396 at August 2, 2026, November 2, 2025, and July 27, 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 ($ 24 ), ($ 30 ), and ($ 22 ) and of long-term borrowings of ($ 150 ), ($ 185 ), and ($ 130 ) at August 2, 2026, November 2, 2025, and July 27, 2025, respectively.

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

Three Months Ended

Six Months Ended

Nine Months Ended

Fair value hedges:

20 unchanged sentences

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 May 3, 2026, November 2, 2025, and April 27, 2025, was $ 362 , $ 356 , and $ 507 , respectively.

In accordance with the limits established in these agreements, we posted $ 73 , $ 62 , and $ 221 of cash collateral at May 3, 2026, November 2, 2025, and April 27, 2025, respectively.

In addition, we paid $ 8 of collateral that was outstanding at May 3, 2026, November 2, 2025, and April 27, 2025, to participate in an international futures market to hedge currency exposure, not included in the following table.

The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at August 2, 2026, November 2, 2025, and July 27, 2025, was $ 398 , $ 356 , and $ 465 , respectively.

In accordance with the limits established in these agreements, we posted $ 126 , $ 62 , and $ 122 of cash collateral at August 2, 2026, November 2, 2025, and July 27, 2025, respectively.

In addition, we paid $ 8 of collateral that was outstanding at August 2, 2026, November 2, 2025, and July 27, 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.

1 unchanged sentence

Gross Amounts

August 2, 2026

3 unchanged sentences

November 2, 2025

April 27, 2025

July 27, 2025

(20) Share-Based Awards

We are authorized to grant shares for equity incentive awards.

The remaining shares authorized for future issuance were 12.2 million at May 3, 2026.

The remaining shares authorized for future issuance were 12.4 million at August 2, 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 May 3, 2026, options for 1.0 million shares were outstanding with a weighted-average exercise price of $ 363.65 per share.

During the six months ended May 3, 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:

At August 2, 2026, options for 936 thousand shares were outstanding with a weighted-average exercise price of $ 362.42 per share.

During the nine months ended August 2, 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:

Service-based

4 unchanged sentences

The awards include dividend equivalent payments.

(21) AcQUISITION AND Disposition

In February 2026, we acquired Tenna LLC (Tenna) to expand our technology solutions in the construction market.

Tenna is a U.S.

construction technology company that offers mixed-fleet equipment operations and asset tracking solutions.

The purchase price, net of cash acquired of $ 1 , was $ 439 .

The fair values assigned to the assets and liabilities of the acquired entity, which are based on information as of the acquisition date and available at May 3, 2026, follow:

(21) AcQUISITIONs AND Disposition

2026 Acquisitions

In 2026, the company completed several acquisitions to advance the capabilities of its existing technology offerings, including the February acquisition of Tenna LLC (Tenna) a U.S.

construction technology company that provides mixed-fleet equipment operations and asset tracking solutions.

Tenna was acquired for a purchase price of $ 439 , net of $ 1 cash acquired, and the purchase price allocation to acquired assets and assumed liabilities is presented below.

Tenna was assigned to the CF segment.

We also acquired other small-scale businesses assigned to the PPA, SAT, and CF segments for a combined purchase price of $ 16 .

Most of the purchase price for these other acquisitions was allocated to other intangible assets.

The fair values assigned to Tenna assets and liabilities, which are based on information as of the acquisition date and available at August 2, 2026, follow:

Trade accounts and notes receivable

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Total liabilities

The identifiable intangible assets were related to customer relationships, technology, and trade name with a weighted average amortization period of 10 years .

The goodwill is deductible for income tax purposes.

Tenna was assigned to the CF segment.

The identifiable intangible assets of Tenna were related to customer relationships, technology, and trade name with a weighted average amortization period of 10 years .

The goodwill for Tenna is deductible for income tax purposes.

2025 Acquisitions

In 2025, we acquired businesses to advance the capabilities of our existing technology offerings, providing customers with a more comprehensive set of tools to generate and use data to make decisions that improve profitability, efficiency, and sustainability.

The combined purchase price of these acquisitions was $ 89 , net of cash acquired.

The businesses were assigned to the PPA and CF segments.

Most of the purchase price for these acquisitions was allocated to goodwill and other intangible assets.

In February 2025, we completed a transaction with Banco Bradesco S.A.

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We retained a 50 % equity interest in BJD, which was valued at the deconsolidation date at $ 362 based on the completed transaction with Bradesco and its amount of contributed capital.

We are accounting for our investment in BJD using the equity method of accounting and results of its operations are reported in “Equity in income of unconsolidated affiliates.” The related investment in unconsolidated affiliates and receivables from unconsolidated affiliates are reported in “Other assets” and “Other receivables,” respectively, on the condensed consolidated balance sheets.

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

Cash and cash equivalents

Trade accounts and notes receivable – net

Financing receivables – net

Deferred income taxes

Other miscellaneous assets

Valuation allowance

Short-term borrowings

Accounts payable and accrued expenses

Long-term borrowings

Retirement benefits and other liabilities

Total liabilities

Total intercompany payables

At the time of deconsolidation in February 2025, the additional gain or loss was not significant.

BJD was reclassified as held for sale in the third quarter of 2024.

Statements of Consolidated Cash Flows – Our noncash transactions as a result of the BJD deconsolidation in February 2025 include the derecognition of total assets (excluding cash and cash equivalents) of $ 2,897 and total liabilities of $ 1,861 , and the recognition of the investments in unconsolidated affiliates of $ 362 and receivables from unconsolidated affiliates (BJD intercompany payables) of $ 781 .

The statements of consolidated cash flows noncash transactions as a result of the 2025 BJD deconsolidation include derecognition of total assets (excluding cash and cash equivalents of $ 110 ) of $ 2,897 and total liabilities of $ 1,861 , and the recognition of the investments in unconsolidated affiliates of $ 362 and receivables from unconsolidated affiliates (BJD intercompany payables) of $ 781 .

The decrease in cash and cash equivalents resulting from the deconsolidation of BJD was recorded in other investing activities in the statements of consolidated cash flows.

We are accounting for our investment in BJD using the equity method of accounting and results of its operations are reported in “Equity in income of unconsolidated affiliates” (see Note 1).

The related investment in unconsolidated affiliates and receivables from unconsolidated affiliates are reported in “Other assets” and “Other receivables,” respectively, on the condensed consolidated balance sheets.

(22) Special ItemS

Discrete Tax Items

In the third quarter of 2025, we recorded a non-cash charge of $ 61 pretax ($ 49 after-tax), primarily related to the trade name and customer relationship assets of our external overseas battery operations.

Of this amount, $ 53 was recorded in “Selling, administrative and general expenses” and $ 8 in “Cost of sales.” The impairment resulted from slowing external demand for batteries, which indicated that it is probable future cash flows would not cover the carrying value of the assets (see Note 18).

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.

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At January 26, 2025, the valuation allowance on “Assets held for sale” decreased, resulting in a pretax and after-tax gain (reversal of previous losses not in excess of cumulative valuation allowance recorded on “Assets held for sale”) 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.

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.

(23) Subsequent EventS

In May 2026, we entered into a retail note securitization transaction, resulting in $ 303 of secured borrowings.

On May 27, 2026 , a quarterly dividend of $ 1.62 per share was declared at the Board of Directors meeting, payable on August 10, 2026 , to stockholders of record on June 30, 2026 .

(23) Subsequent Event

On August 26, 2026 , a quarterly dividend of $ 1.62 per share was declared at the Board of Directors meeting, payable on November 9, 2026 , to stockholders of record on September 30, 2026 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements