Deere (DE) risk factors, FY2025 10-K

What changed since the prior 10-K

New

• New

  Results of Operations – Interest rates volatility impacts us in several ways, primarily affecting the demand for our products, financing spreads for the financial services operations, and the value of our investments

  A 10% change in market interest rates would impact the fair value of financial instruments by approximately $150 in 2025 and $75 in 2024.

• New

  In addition, in 2025 we entered into a cross-currency interest rate swap designated as a net investment hedge of foreign currency exposure from investments in foreign subsidiaries

  Deere entered into a cross-currency interest rate swap in 2025 as a net investment hedge for foreign subsidiary investments.

• New

  We consolidate certain VIEs related to retail note securitizations (see Note 12)

  Deere formed Banco John Deere S.A. in February 2025, a 50% owned variable interest entity in Brazil that finances equipment loans.

• New

  permitted. We are assessing the effect of this update on our consolidated financial statements

  FASB issued updates ASU 2024-03 and ASU 2023-09 to expand expense and income tax disclosures for fiscal years 2028 and 2026, respectively.

• New

  No. 2025-09 — Derivatives and Hedging (Topic 815): Hedge Accounting Improvements

  Acquisitions in 2025 focused on small-scale technology businesses to support the Smart Industrial Operating Model and Leap Ambitions.

• New

  At the time of deconsolidation, the additional gain or loss was not significant. BJD was reclassified as held for sale in the third quarter of 2024 prior to its deconsolidation

  Deere sold its Russian roadbuilding business in October 2023 for $16 in cash and $8 in deferred consideration, booking an $18 loss.

• New

  Revenues are assigned to the geographic market based on customer location

  Deferred revenue for extended warranties, advance equipment sales, and precision guidance subscriptions totaled $2,039 at year-end 2025.

• New

  recorded as a contract liability at the beginning of the fiscal year was $654 in 2025, $553 in 2024, and $547 in 2023

  Unsatisfied performance obligations for contracts lasting over one year totaled $1,810 in net sales and revenues at November 2, 2025.

• New

  The 2026 net periodic pension benefit is expected to increase by $60 due to changes in discount rates, decreases in amortization of actuarial losses, and the U.S. hourly pension curtailment recognized in 2025, described above

  The 2026 net periodic pension benefit is expected to increase by $60 due to discount rates, amortization, and hourly pension curtailments.

• New

  The OPEB net periodic cost is expected to decrease by $50 due to an increase in the expected return related to the 2025 U.S. voluntary contribution

  The OPEB net periodic cost is expected to decrease by $50 following a 2025 U.S. voluntary pension contribution.

• New

  Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax

  Total deferred tax assets were $3,557 against $1,707 in deferred tax liabilities after accounting for valuation allowances of $1,638.

• New

  to timing. We expect that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant

  IRS examinations are complete for federal tax returns prior to 2015, while tax returns for years 2015 through 2020 remain under examination.

• New

  10. MARKETABLE SECURITIES

• New

  Proceeds of available-for-sale debt securities sold or matured during 2025, 2024, and 2023 were $486, $619, and $37, respectively. Realized gains, realized losses, and unrealized losses that have been continuous for over twelve months on debt securities were not material in 2025, 2024, and 2023

• New

  At November 2, 2025, we also had a $7 investment in an international fixed income fund equity security

• New

  ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

• New

  The allowance for credit losses on retail notes and financing lease receivables increased in 2025, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions

• New

  We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty

• New

  Property and equipment depreciation during 2025, 2024, and 2023 was $934, $898, and $838, respectively

• New

  Other intangible assets – net

• New

  Medium-term notes due through 2034 are offered by prospectus and issued at fixed and variable rates. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other

• New

  Weighted-average interest rate

• New

  At November 2, 2025, we had commitments of approximately $415 for the construction and acquisition of property and equipment. Also, at November 2, 2025, we had restricted assets of $323, classified as “Other assets,” which includes restricted cash

• New

  21. CAPITAL STOCK AND NET INCOME PER SHARE

• New

  Shares excluded as antidilutive

• New

  The Long-Term Incentive Cash granted to certain employees is accounted for as share-based compensation. This incentive includes a performance metric based, in part, on the price of our shares

• New

  The fair value of stock options and RSUs is determined using our closing price on the grant date. The fair value of the

• New

  Cumulative translation adjustment

• New

  Net actuarial gain (loss)

• New

  Lease agreements include usage limits and specifications on machine condition, which allow us to assess lessees for excess use or damages to the underlying equipment

• New

  Other intangible assets – net – The impairment of customer relationships and tradename of our external overseas battery operations was measured using an income approach (see Note 4)

• New

  Interest rate contracts – Interest expense

• New

  The final cost of these programs is determined when the dealer sells the equipment to a retail customer. A key assumption is the predictive value of the historical percentage of retail sales incentive costs to retail sales

• New

  Exhibit 4.3 to the registration statement on Form S-3ASR no 333-239165 filed June 15, 2020

• New

  Exhibit 4.6 to Form 10-K of registrant for the year ended November 3, 2019

• New

  Exhibit 10.4 to Form 10-K of registrant for the year ended October 31, 2003

• New

  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Dropped

• Dropped

  The net impact in these financial instruments’ fair values which would be caused by decreasing or increasing the interest rates by 10 percent from the market rates at October 27, 2024, and October 29, 2023, would have been approximately $75 and $10, respectively

• Dropped

  Financing Revenue and Origination Costs

• Dropped

  marketing agreements. Following the acquisition, Net sales only includes the sale of Deere-branded excavators to John Deere dealers, while Cost of sales reflects market pricing to purchase and manufacture excavators, as well as the related components and service parts

  Reference Rate Reform transition from LIBOR and CDOR.

• Dropped

  Total intercompany payables

• Dropped

  Sale of Russian Roadbuilding Business

• Dropped

  UAW Collective Bargaining Agreement

• Dropped

  Impact of Events in Russia / Ukraine

• Dropped

  The financial services operations received an intercompany benefit from the equipment operations, which guarantees the financial services’ investments in certain international markets, including Russia

  Financing revenue and origination cost accounting policies.

• Dropped

  Allowance for credit losses – Financing receivables – Selling, administrative and general expenses

• Dropped

  Gain on Previously Held Equity Investment

• Dropped

  Turf – Includes net sales of turf and utility equipment, including riding lawn equipment, golf course equipment, utility vehicles, and commercial mowing equipment, along with a broad line of associated implements, other outdoor power products, and related attachments and service parts

• Dropped

  Compact Construction – Includes net sales of smaller construction equipment, including compact excavators, compact track loaders, compact wheel loaders, skid steers, and related attachments and service parts

• Dropped

  Financial Products – Includes finance and interest income from retail notes related to sales of John Deere equipment to retail customers, wholesale financing to dealers of John Deere equipment, and revolving charge accounts; lease income from retail leases of John Deere equipment; and revenue from extended warranties

• Dropped

  Cash, cash equivalents, and restricted cash recorded in “Assets held for sale” relates to BJD (see Note 4). Restricted cash recorded in “Other assets” relates to securitization of financing receivables (see Note 12) and cash held in Russia

• Dropped

  The 2025 net periodic pension benefit is expected to increase by $100 due to an increase in the expected long-term rates of return on pension plan assets (estimated to be 7.1 percent) and the U.S. hourly pension curtailment recognized in 2024, described above

• Dropped

  Expected long-term rates of return

• Dropped

  Most marketable securities are classified as available-for-sale. Realized gains or losses are based on specific identification

• Dropped

  Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity

  Fair values of assets and liabilities from acquired factories.

• Dropped

  We monitor the economy as part of the allowance setting process, including potential impacts of the agricultural market business cycle and rising interest rates. Adjustments to the allowance are incorporated, as necessary

• Dropped

  delinquencies and a decline in market conditions impacting the agriculture receivable portfolio. This increase was partially offset by a decrease in the allowance on revolving charge accounts, driven by write-offs of seasonal financing program accounts and recoveries expected on those accounts in the future

  SurePoint remaining 20 percent interest purchase.

• Dropped

  Post modification balance

  Brazil tax ruling reducing income tax provision by $243.

• Dropped

  We also had other miscellaneous contingent liabilities totaling approximately $130 at October 27, 2024. The accrued liability for these contingencies was $30 at October 27, 2024

• Dropped

  Our stock is listed on the New York Stock Exchange under the symbol “DE.” At the end of 2024, there were 16,354 holders of record of our common stock

  UAW collective bargaining agreement terms for U.S. facilities.

• Dropped

  repurchased. Repurchases of our common stock under this plan are made from time to time, at our discretion, in the open market

  Impact of events in Russia and Ukraine on shipments and assets.

• Dropped

  recognize the effect of award forfeitures as an adjustment to compensation expense in the period the forfeiture occurs

  Financial services intercompany guarantees for international markets.

• Dropped

  Net unrealized gain (loss) on debt securities

  Reserves and impairments related to Russia and Ukraine.

• Dropped

  payments indexed to inflation when the index changes after lease commencement

  Gain on previously held equity investment in Deere-Hitachi factories.

• Dropped

  Lease payments from operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases

  Net sales definitions for Turf and utility equipment.

• Dropped

  The equipment is depreciated on a straight-line basis over the term of the lease. The corresponding depreciation expense was $874 in 2024, $853 in 2023, and $827 in 2022

  Net sales definitions for Construction and compact construction equipment.

• Dropped

  Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates

• Dropped

  Inventories – The impairment was based on net realizable value, less reasonably predictable selling and disposal costs

• Dropped

  Other intangible assets – net – In 2022, we considered external valuations based on our probability weighted cash flow analysis

• Dropped

  Our operations are presently organized and reported in four business segments. This presentation is consistent with how the chief operating decision maker (the CEO) assesses the performance of the segments and makes decisions about resource allocations

• Dropped

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

• Dropped

  The Company provides retail discount or financing sales incentives programs to dealers that are due when the dealer sells the equipment to a retail customer

• Dropped

  At the time a sale is recognized, the Company records an estimate of the sales incentive costs. The final cost is determined at the time of the retail sale

• Dropped

  Certain instruments relating to long-term debt constituting less than 10 percent of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will furnish copies of such instruments to the Commission upon request

Reworded

• 100% rewritten

  Redeemable Noncontrolling Interest

  Updated to detail the 2024 purchase of SurePoint's remaining 20% interest, removing prior year details on Kreisel intangible assets.

• 100% rewritten

  Critical Audit Matter Description

  Shifted from detailing the allowance for credit losses and linear regression models to describing sales incentive program cost estimations.

• 99% rewritten

  Accounting Pronouncements to be Adopted

  Added disclosures for newly issued FASB updates ASU 2025-10 on government grants and ASU 2025-06 on internal-use software capitalization.

• 99% rewritten

  14. PROPERTY AND DEPRECIATION

  Updated property and equipment figures for fiscal year 2025, showing total cost at $18,420 and net property of $8,079.

• 98% rewritten

  Interest crediting rate – U.S. cash balance plans

  Replaced historical pension details with specifics on $18 and $35 curtailment expenses recognized from 2025 and 2024 U.S. hourly employee layoffs.

• 97% rewritten

  1.65% notes due 2039 (€650 principal)

  Updated long-term borrowings to include the October 2025 issuance of 4.15% notes due 2030 by Deere Funding Canada Corporation.

• 96% rewritten

  Interest rate contracts – OCI (pretax)

  Updated OCI reclassifications to include net investment hedges alongside interest rate contracts.

• 95% rewritten

  22. SHARE-BASED COMPENSATION

  Clarified share-based compensation terminology by referring to stock options and restricted stock units collectively as equity incentive awards.

• 93% rewritten

  Financing Receivables ‒ Contractual Installment Payments

• 90% rewritten

  We are naturally exposed to various interest rate and foreign currency risks. As a result, we enter into derivative transactions to manage this exposure and not for speculative purposes

• 89% rewritten

  Financial Services Financing Incentives Correction

• 87% rewritten

  Counterparty Risk and Collateral

• 86% rewritten

  Prior to adopting ASU 2022-02, modifications of loans to borrowers experiencing financial difficulty were considered troubled debt restructurings when the significant modification of the receivable resulted in a concession we would not otherwise consider

• 84% rewritten

  Cross-currency interest rate contracts

• 84% rewritten

  o Considering the impact of changes in the current economic conditions and competitive environment

• 84% rewritten

  The number of authorized preferred shares is 9 million. No preferred shares have been issued

• 81% rewritten

  Financing Receivables ‒ Allowance for Credit Losses

• 79% rewritten

  New Accounting Pronouncements Adopted

• 76% rewritten

  At the end of the majority of leases, the lessee has the option to purchase the underlying equipment for the contractual residual value or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to us for remarketing

• 76% rewritten

  The costs for extended warranty programs are recognized as incurred. See Note 9 for extended warranty claim costs

• 76% rewritten

  Financing Receivables – Modifications

• 75% rewritten

  6. SUPPLEMENTAL CASH FLOW INFORMATION

• 74% rewritten

  Expected term (in years)*

• 72% rewritten

  SUPPLEMENTAL CONSOLIDATING DATA

• 72% rewritten

  Principles of Consolidation

• 71% rewritten

  Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is resumed when the receivable becomes contractually current and collections are reasonably assured

• 69% rewritten

  Defined Contribution Plans

• 69% rewritten

  17. SHORT-TERM BORROWINGS

• 68% rewritten

  At November 2, 2025, tax loss and tax credit carryforwards of $1,700 were available with $1,164 expiring from 2026 through 2045 and $536 with an indefinite carryforward period

  Was: At October 27, 2024, tax loss and tax credit carryforwards of $1,564 were available with $1,063 expiring from 2025 through 2044 and $501 with an indefinite carryforward period

• 67% rewritten

  Depreciation and Amortization

• 64% rewritten

  23. OTHER COMPREHENSIVE INCOME ITEMS

• 64% rewritten

  26. DERIVATIVE INSTRUMENTS

• 63% rewritten

  An increase in Medicare Advantage premiums impacted the weighted-average annual rates of increase for the initial year in 2025 and 2024

  Was: An increase in Medicare Advantage premiums and prescription drug trends impacted the weighted-average annual rates of increase for the initial year in 2024 and 2023

• 63% rewritten

  18. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

• 63% rewritten

  Employee-Separation Programs

• 62% rewritten

  The weighted-average interest rates on short-term securitization borrowings at November 2, 2025, and October 27, 2024, were 4.8% and 5.0%, respectively

  Was: The weighted-average interest rates on short-term securitization borrowings at October 27, 2024 and October 29, 2023 were 5.0 percent and 4.7 percent, respectively

• 61% rewritten

  25. FAIR VALUE MEASUREMENTS

• 61% rewritten

  Accounts payable and accrued expenses – Deferred consideration

• 60% rewritten

  Fair value of plan assets

• 60% rewritten

  Expected Future Benefit Payments

• 59% rewritten

  Trade Accounts and Notes Receivable

• 58% rewritten

  7. PENSION AND OTHER POSTRETIREMENT BENEFITS

• 57% rewritten

  Financing Receivables ‒ Related to the Sale of Equipment

• 55% rewritten

  Total Level 1 marketable securities

• 55% rewritten

  9. OTHER INCOME AND OTHER OPERATING EXPENSES

• 52% rewritten

  Financing Receivables ‒ Overall

• 51% rewritten

  International equity securities and funds

• 49% rewritten

  3. Investors are paid back based on cash receipts from the financing receivables

• 48% rewritten

  The decrease in the weighted-average interest rates of notes payable to banks is primarily the result of lower borrowing rates on funding in Argentina

  Was: The decrease in the weighted-average interest rates of notes payable to banks is primarily the result of Argentine peso funding representing a smaller portion of the notes outstanding

• 47% rewritten

  Stock options and restricted stock units vested

• 45% rewritten

  20. COMMITMENTS AND CONTINGENCIES

• 41% rewritten

  Interest-Free Periods and Past-Due Interest

• 39% rewritten

  Definition and Limitations of Internal Control over Financial Reporting

• 38% rewritten

  Derivative Financial Instruments

• 36% rewritten

  Net unrealized gain (loss) on derivatives

• 35% rewritten

  At November 2, 2025, and October 27, 2024, trade accounts and notes receivable balances outstanding greater than 12 months were $172 and $298, respectively

  Was: At October 27, 2024 and October 29, 2023 trade accounts and notes receivable balances outstanding greater than 12 months were $298 and $107, respectively. The increase was due to higher dealer inventory

• 33% rewritten

  1. ORGANIZATION AND CONSOLIDATION

• 30% rewritten

  Net unrealized translation gain (loss)

• 26% rewritten

  Total finance lease liabilities

• 26% rewritten

  Equity Securities and Funds – The Level 1 investments are determined using quoted prices in the active market in which the equity investment trades. Equity funds are valued using the fund’s NAV, which is based on the fair value of the underlying securities

  Was: Equity Securities and Funds – The values are determined using quoted prices in the active market in which the equity investment trades, Equity funds are valued using the fund’s NAV, which is based on the fair value of the underlying securities

• 25% rewritten

  Foreign Currency Translation

• 23% rewritten

  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated

• 23% rewritten

  How the Critical Audit Matter Was Addressed in the Audit

• 21% rewritten

  Derivative Instruments – The derivatives are valued using either an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates, or a market approach (quoted prices in the active market in which the derivative instrument trades)

All 116 risk factors

Headings as the filing states them, in filing order.

Other Deere 10-Ks

• FY2024 10-K risk factors

  116 risks

  Deere faces risks from interest rate volatility, currency exchange fluctuations, and geopolitical disruptions affecting international operations like Russia.

  Filed Dec 12, 2024

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.