| SEGMENT DATA |
(8) Segment DATA Our operations are organized and reported in four business segments: Production & Precision Agriculture, Small Agriculture & Turf, Construction & Forestry, and Financial Services. This presentation is consistent with how the chief operating decision maker, our Chief Executive Officer (CEO), who also serves as the Chairman of the Board, assesses the performance of the segments and makes decisions regarding resource allocations. Each segment has a group president responsible for managing financial performance and executing strategic initiatives. | ● | Production & Precision Agriculture – PPA segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for production-scale growers of large grains, small grains, cotton, and sugarcane. |
| ● | Small Agriculture & Turf – SAT segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for dairy and livestock producers, high-value and small acreage crop producers, and turf and utility customers. |
| ● | Construction & Forestry – CF segment defines, develops, and delivers a broad range of machines and technology solutions organized along the earthmoving, forestry, and roadbuilding production systems. |
The products and services produced by the segments above are primarily marketed through independent retail dealer networks and major retail outlets. For roadbuilding products in certain markets outside the U.S. and Canada, the products are sold through company-owned sales and service subsidiaries. | ● | Financial Services – FS segment finances sales and leases by John Deere dealers of new and used production and precision agriculture equipment, small agriculture and turf equipment, and construction and forestry equipment. In addition, the FS segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. |
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. Intersegment transactions are primarily made between the FS segment and PPA, SAT, and CF segments, and are recognized at current market prices. Total identifiable assets assigned to the equipment operations operating segments consist of assets actively managed by those segments, including trade receivables, inventories, property and equipment, other intangible assets, and certain other assets. Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets. Financial Services assets include cash and cash equivalents, retirement benefits, and deferred income tax assets that are managed by the segment. Information relating to operations by operating segment was as follows: | | | | | | | | | | | | | | | | | Three Months Ended August 2, 2026 | | PPA | | SAT | | CF | | FS | | Total | | External net sales | | $ | 3,998 | | $ | 3,383 | | $ | 3,618 | | | | | $ | 10,999 | | External finance and interest income | | | 15 | | | 17 | | | 9 | | $ | 1,253 | | | 1,294 | | External other income | | | 51 | | | 36 | | | 52 | | | 118 | | | 257 | | Intersegment income | | | 41 | | | 9 | | | 3 | | | 134 | | | 187 | | Total segment net sales and revenues | | | 4,105 | | | 3,445 | | | 3,682 | | | 1,505 | | | 12,737 | | Cost of sales | | | (2,829) | | | (2,381) | | | (2,740) | | | | | | (7,950) | | Interest expense | | | | | | | | | | | | (661) | | | (661) | | Other segment items* | | | (749) | | | (442) | | | (506) | | | (573) | | | (2,270) | | Segment operating profit | | $ | 527 | | $ | 622 | | $ | 436 | | $ | 271 | | $ | 1,856 | | | | | | | | | | | | | | | | | | | Nine Months Ended August 2, 2026 | | PPA | | SAT | | CF | | FS | | Total | | External net sales | | $ | 11,664 | | $ | 9,036 | | $ | 10,079 | | | | | $ | 30,779 | | External finance and interest income | | | 37 | | | 34 | | | 17 | | $ | 3,757 | | | 3,845 | | External other income | | | 168 | | | 113 | | | 150 | | | 364 | | | 795 | | Intersegment income | | | 134 | | | 26 | | | 21 | | | 380 | | | 561 | | Total segment net sales and revenues | | | 12,003 | | | 9,209 | | | 10,267 | | | 4,501 | | | 35,980 | | Cost of sales | | | (8,405) | | | (6,391) | | | (7,722) | | | | | | (22,518) | | Interest expense | | | | | | | | | | | | (1,973) | | | (1,973) | | Other segment items* | | | (2,226) | | | (1,280) | | | (1,411) | | | (1,705) | | | (6,622) | | Segment operating profit | | $ | 1,372 | | $ | 1,538 | | $ | 1,134 | | $ | 823 | | $ | 4,867 | | | | | | | | | | | | | | | | | | | Three Months Ended July 27, 2025 | | PPA | | SAT | | CF | | FS | | Total | | External net sales | | $ | 4,273 | | $ | 3,025 | | $ | 3,059 | | | | | $ | 10,357 | | External finance and interest income | | | 12 | | | 14 | | | 4 | | $ | 1,321 | | | 1,351 | | External other income | | | 52 | | | 35 | | | 47 | | | 97 | | | 231 | | Intersegment income | | | 42 | | | 8 | | | 2 | | | 126 | | | 178 | | Total segment net sales and revenues | | | 4,379 | | | 3,082 | | | 3,112 | | | 1,544 | | | 12,117 | | Cost of sales | | | (3,010) | | | (2,135) | | | (2,433) | | | | | | (7,578) | | Interest expense | | | | | | | | | | | | (720) | | | (720) | | Other segment items* | | | (789) | | | (462) | | | (442) | | | (558) | | | (2,251) | | Segment operating profit | | $ | 580 | | $ | 485 | | $ | 237 | | $ | 266 | | $ | 1,568 | | | | | | | | | | | | | | | | | | | Nine Months Ended July 27, 2025 | | PPA | | SAT | | CF | | FS | | Total | | External net sales | | $ | 12,571 | | $ | 7,767 | | $ | 8,000 | | | | | $ | 28,338 | | External finance and interest income | | | 29 | | | 29 | | | 9 | | $ | 3,960 | | | 4,027 | | External other income | | | 157 | | | 101 | | | 137 | | | 313 | | | 708 | | Intersegment income | | | 147 | | | 24 | | | 4 | | | 345 | | | 520 | | Total segment net sales and revenues | | | 12,904 | | | 7,921 | | | 8,150 | | | 4,618 | | | 33,593 | | Cost of sales | | | (8,573) | | | (5,477) | | | (6,189) | | | | | | (20,239) | | Interest expense | | | | | | | | | | | | (2,206) | | | (2,206) | | Other segment items* | | | (2,265) | | | (1,262) | | | (1,280) | | | (1,672) | | | (6,479) | | Segment operating profit | | $ | 2,066 | | $ | 1,182 | | $ | 681 | | $ | 740 | | $ | 4,669 | |
* Other segment items for PPA, SAT, and CF include selling, administrative and general expenses; advertising; engineering; research and development; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. Financial Services other segment items include selling, administrative and general expenses; foreign exchange gains and losses; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. A reconciliation of segment net sales and revenues and segment operating profit to consolidated net sales and revenues and consolidated net income follows: | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | | | August 2 | | July 27 | | August 2 | | July 27 | | | | 2026 | | 2025 | | 2026 | | 2025 | | Reconciliation of net sales and revenues | | | | | | | | | | | Segment net sales and revenues | | $ | 12,737 | | $ | 12,117 | | $ | 35,980 | | $ | 33,593 | | External other income* | | | 58 | | | 79 | | | 170 | | | 217 | | Elimination of intersegment revenues | | | (187) | | | (178) | | | (561) | | | (520) | | Net sales and revenues | | $ | 12,608 | | $ | 12,018 | | $ | 35,589 | | $ | 33,290 | | | | | | | | | | | | | | | | Reconciliation of net income | | | | | | | | | | | Segment operating profit | | $ | 1,856 | | $ | 1,568 | | $ | 4,867 | | $ | 4,669 | | Interest income – excluding FS | | | 108 | | | 103 | | | 290 | | | 283 | | Interest expense – excluding FS | | | (99) | | | (102) | | | (294) | | | (282) | | Pension and OPEB benefit, excluding service cost component | | | 129 | | | 104 | | | 384 | | | 327 | | Corporate other – net** | | | (88) | | | (63) | | | (202) | | | (154) | | Income taxes | | | (529) | | | (339) | | | (1,243) | | | (905) | | Net income | | $ | 1,377 | | $ | 1,271 | | $ | 3,802 | | $ | 3,938 | |
* External other income includes corporate investment income, corporate interest income, and other miscellaneous revenue items that are included in “Finance and interest income” and “Other income” on the statements of consolidated income. ** Corporate other – net includes certain foreign exchange gains and losses, certain investment income, and certain corporate administrative and general expenses. Additional operating segment information was as follows: | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | | | August 2 | | July 27 | | August 2 | | July 27 | | | | 2026 | | 2025 | | 2026 | | 2025 | | Depreciation* and amortization expense | | PPA | | $ | 174 | | $ | 164 | | $ | 512 | | $ | 498 | | SAT | | | 76 | | | 67 | | | 227 | | | 199 | | CF | | | 103 | | | 91 | | | 303 | | | 268 | | FS | | | 275 | | | 275 | | | 821 | | | 804 | | Intersegment | | | (25) | | | (33) | | | (76) | | | (101) | | Total | | $ | 603 | | $ | 564 | | $ | 1,787 | | $ | 1,668 | | | | | | | | | | | | | | | | Capital additions | | PPA | | $ | 142 | | $ | 143 | | $ | 315 | | $ | 342 | | SAT | | | 74 | | | 79 | | | 154 | | | 152 | | CF | | | 87 | | | 100 | | | 208 | | | 253 | | FS | | | 2 | | | 2 | | | 2 | | | 2 | | Total | | $ | 305 | | $ | 324 | | $ | 679 | | $ | 749 | |
* Depreciation includes depreciation for equipment on operating leases. | | | | | | | | | | | | | August 2 | | November 2 | | July 27 | | | | 2026 | | 2025 | | 2025 | | Total Assets | | | | | | | | | | | PPA | | $ | 8,682 | | $ | 8,787 | | $ | 8,902 | | SAT | | | 4,239 | | | 3,987 | | | 4,008 | | CF | | | 8,410 | | | 7,792 | | | 7,846 | | FS | | | 70,300 | | | 70,021 | | | 71,722 | | Corporate* | | | 15,976 | | | 15,409 | | | 15,339 | | Total Assets | | $ | 107,607 | | $ | 105,996 | | $ | 107,817 | | | | | | | | | | | | | Equity investment in unconsolidated affiliates | | | | | | | | | | | PPA | | $ | 10 | | $ | 11 | | $ | 11 | | SAT | | | 38 | | | 37 | | | 58 | | CF | | | | | | | | | | | FS | | | 502 | | | 462 | | | 451 | | Total | | $ | 550 | | $ | 510 | | $ | 520 | |
* Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets.
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