{"schemaVersion":1,"research":true,"symbol":"de","name":"Deere & Co","topic":"moat","path":"/stock/de/moat","status":"stale","version":9,"updatedAt":"2026-10-19T15:45:01.477Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"uncertain","summary":"Deere demonstrates a substantial dealer franchise, recognized brand, integrated equipment technology and recurring aftermarket activity. The passages establish differentiation, but do not establish durable competitive superiority, material switching costs or a protected cost position. Pricing power is real but cyclical: strong 2023 realization and renewed 2026 gains coexist with competitive discounting in 2025. Recent retail performance relative to industry is mixed, and repair-access obligations constrain potential aftermarket protection. Insufficient evidence of a moat should not be confused with an established weak franchise.","advantages":[{"mechanism":"intangible_assets","claim":"Brand recognition and an established distribution franchise provide current differentiation. Approximately 2,050 independent dealer locations in the U.S. and Canada support commercial reach, but their superiority to competing networks and the resulting customer premium are not demonstrated.","durability":"The established channel and recognized brand could persist, but the passages do not establish how difficult they are to replicate or how long they protect economic returns. The issuer's characterization of its dealer channel as best-in-class is an assertion.","risks":"Expanding competitors, dealer inventory problems and incentive-driven competition can weaken the franchise. July 2026 retail sales fell more than industry in several equipment categories, although other categories performed better.","invalidation":"Persistent retail underperformance across major categories through a recovery, accompanied by greater incentives and dealer contraction, would invalidate the thesis that brand and distribution provide meaningful competitive protection.","competitors":["AGCO Corporation","CLAAS KGaA mbH","CNH Industrial N.V.","Kubota Tractor Corporation","Mahindra & Mahindra Limited","The Toro Company"],"evidenceIds":["e1","e2","e3","e4"],"counterEvidenceIds":["e5","e6","e7","e8","e9","e10"]},{"mechanism":"switching_costs","claim":"Bundled precision technology, equipment connectivity and maintenance-parts activity establish an operating ecosystem that could create switching friction. The passages do not demonstrate customer migration costs, restrictive interoperability, renewal success or dependence sufficient to confirm a switching-cost advantage.","durability":"Integration already exists; the extent of customer lock-in remains unproven. Planned technology monetization and lifecycle expansion are potential benefits rather than demonstrated protection.","risks":"Technology-focused entrants and separately purchasable technology can compete for customer workflows. The July 2026 settlement requires repair resources on fair and reasonable terms, reducing the scope for repair-access restrictions; its economic effect is undisclosed.","invalidation":"Evidence that customers routinely move equipment and data between vendors with little disruption, or that independent repair access materially displaces Deere aftermarket demand, would invalidate the proposed switching-friction mechanism.","competitors":["AGCO Corporation","CLAAS KGaA mbH","CNH Industrial N.V.","Kubota Tractor Corporation","Mahindra & Mahindra Limited","The Toro Company"],"evidenceIds":["e3","e11","e12","e13","e14","e15"],"counterEvidenceIds":["e16","e17","e18"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Business / Sales and Distribution","excerpt":"and Canada, we market products to approximately 2,050 independent dealer locations."},{"id":"e2","sourceId":"filing-4","location":"Business / Competition / brand recognition","excerpt":"John Deere’s brand recognition is a competitive factor in North America and many other parts of the world."},{"id":"e3","sourceId":"filing-4","location":"Business / Competition / named agriculture and turf competitors","excerpt":"The competitive environment for the agriculture and turf operations includes some global competitors, such as AGCO Corporation, CLAAS KGaA mbH, CNH Industrial N.V., Kubota Tractor Corporation, Mahindra & Mahindra Limited, and The Toro Company."},{"id":"e4","sourceId":"filing-3","location":"Compensation Discussion and Analysis / management characterization of dealer channel","excerpt":"These Leap Ambitions are built upon a foundation of product quality and manufacturing excellence, supported by a best-in-class dealer channel, and enabled by employees dedicated to solving some of the world’s most important problems."},{"id":"e5","sourceId":"filing-4","location":"Business / Competition / expanding competitors","excerpt":"The agricultural equipment industry continues to change and is becoming even more competitive through the emergence and global expansion of many competitors."},{"id":"e6","sourceId":"filing-1","location":"Risk Factors / realized dealer purchase deferrals","excerpt":"When the total inventory levels of our dealers are higher than they desire, dealers have postponed equipment purchases from us, and could continue to postpone purchases in the future, which could cause our sales to be lower and negatively impact our results."},{"id":"e7","sourceId":"filing-1","location":"MD&A / Construction & Forestry / 2025 price realization","excerpt":"Price realization decreased 3% in the U.S."},{"id":"e8","sourceId":"filing-1","location":"MD&A / Construction & Forestry / competitive incentive programs","excerpt":"and Canada due to incremental incentive programs deployed to address pressures from the competitive environment and was flat outside the U.S."},{"id":"e9","sourceId":"filing-8","location":"Earnings presentation / July 2026 rolling three-month retail sales / 4WD tractors","excerpt":"4WD Tractors 34% Down more than the industry"},{"id":"e10","sourceId":"filing-8","location":"Earnings presentation / July 2026 rolling three-month retail sales / combines","excerpt":"Combines 20% Down more than the industry\nDeere Dealer Inventories***\nU.S."},{"id":"e11","sourceId":"filing-1","location":"Revenue Recognition / Bundled Technology","excerpt":"Bundled Technology\nCertain equipment is sold with precision guidance, telematics, and other information gathering and analyzing capabilities."},{"id":"e12","sourceId":"filing-1","location":"Revenue Recognition / technology hardware, software and service obligations","excerpt":"These technology solutions require hardware, software, and may include an obligation to provide services for a period of time."},{"id":"e13","sourceId":"filing-1","location":"Revenue Recognition / separate technology purchases and renewals","excerpt":"These solutions are mostly bundled with the sale of the equipment but can also be purchased or renewed separately."},{"id":"e14","sourceId":"filing-4","location":"Business / equipment-owner and dealer telematics connectivity","excerpt":"Our advanced telematics systems remotely connect equipment owners, business managers, and dealers to equipment in the field."},{"id":"e15","sourceId":"filing-1","location":"Revenue Recognition / maintenance and repair component sales","excerpt":"We remanufacture used engines and components (cores) that are sold to dealers and retail customers for maintenance and repair parts."},{"id":"e16","sourceId":"filing-4","location":"Business / Competition / technology-focused entrants","excerpt":"As technology increasingly enables enhanced productivity in agriculture, the industry is also attracting non-traditional competitors, including technology-focused companies and start-up ventures."},{"id":"e17","sourceId":"filing-2","location":"Legal Proceedings / July 2026 repair-resource settlement obligations","excerpt":"As part of that settlement, we have agreed, among other items, to provide certain repair resources to farmers and independent repair providers on “fair and reasonable terms” (as defined by the settlement)."},{"id":"e18","sourceId":"filing-1","location":"Strategic Risks / potential failure to monetize technology","excerpt":"inability to fully monetize technology-based solutions,"},{"id":"e19","sourceId":"filing-5","location":"MD&A / 2023 realized pricing and cost-of-sales ratio","excerpt":"An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:\n​\n​\n​\n​\n​\n​\n​\n​\n​\n​\n​\n​\n​\nDeere & Company\n​\n2023\n​\n2022\n​\n% Change\n​\nCost of sales to net sales\n​\n​\n67.9%\n​\n​\n73.7%\n​\n-8\n​\n+ Price realization\n​\nFavorable\n​\n(-) Production costs\n​\nUnfavorable\n​\nPrice realization was 12 percent driven by strong demand."},{"id":"e20","sourceId":"filing-2","location":"MD&A / third-quarter 2026 realized pricing contribution to earnings","excerpt":"Net income increased $90 in the third quarter primarily due to favorable price realization of $286 ($403 pretax), partially offset by unfavorable tax impacts of $114 and increased production costs of $89 ($126 pretax), primarily from higher material costs."},{"id":"e21","sourceId":"filing-1","location":"MD&A / Small Agriculture & Turf / 2025 results","excerpt":"Production & Precision Agriculture Operating Profit\n2025 compared to 2024\nSmall Agriculture & Turf Operations\n% Change\n 10,224\n 10,969\n-7\nSales volume and other\n-8\nPrice realization\n+1\nCurrency translation\nOperating profit\n 1,207\n 1,627\n-26\nOperating margin\n11.8%\n14.8%\nSales volumes decreased 17% in the U.S."},{"id":"e22","sourceId":"filing-2","location":"MD&A / quarterly and nine-month 2026 cost-of-sales ratios","excerpt":"An explanation of the cost of sales to net sales ratio and other significant statements of consolidated income changes follows:\nCost of sales to net sales\n72.2%\n73.1%\n73.1%\n71.3%\n• Material costs\n• Tariffs, net of recoveries\n• Production efficiencies\nHigher material costs driven by inflationary pressures."},{"id":"e23","sourceId":"filing-2","location":"MD&A / favorable quarterly tariff recoveries","excerpt":"The favorable tariff impact for the quarter was due to recognition of recoveries (see Global Trade Policies section in Additional Trends)."},{"id":"e24","sourceId":"filing-2","location":"MD&A / Small Agriculture & Turf / nine-month shipment growth","excerpt":"Sales for the first nine months increased as a result of higher shipment volumes (primarily in the U.S., Europe, and India) and favorable price realization."},{"id":"e25","sourceId":"filing-1","location":"Critical Accounting Estimates / sales incentive program changes","excerpt":"There are numerous programs available at any time, and new programs may be announced after we record the equipment sale to the dealer."},{"id":"e26","sourceId":"filing-1","location":"Critical Accounting Estimates / contractual incentive set-off rights","excerpt":"Sales Incentive Accruals\nThe accruals recorded against receivables relate to programs where we have the contractual right and the intent to offset against existing receivables."},{"id":"e27","sourceId":"filing-2","location":"MD&A / nine-month 2026 consolidated operating cash flow","excerpt":"37 ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ ​ August 2, 2026 ​ July 27, 2025 ​ Net cash provided by operating activities ​ $ 3,250 ​ $ 3,464 ​ Net cash used for investing activities ​ ​ (825) ​ ​ (801) ​ Net cash used for financing activities ​ ​ (1,828) ​ ​ (1,557) ​ Effect of exchange rate changes on cash, cash equivalents, and restricted cash ​ ​ 20 ​ ​ 108 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ $ 617 ​ $ 1,214 ​ ​ Cash inflows from consolidated operating activities in the first nine months of 2026 were $3,250."},{"id":"e28","sourceId":"filing-2","location":"MD&A / working-capital uses of cash","excerpt":"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, and a decrease in accrued employee benefits."},{"id":"e29","sourceId":"filing-2","location":"MD&A / cash returned to shareholders","excerpt":"Cash returned to shareholders was $2,013 in the first nine months of 2026."},{"id":"e30","sourceId":"filing-2","location":"Acquisitions and Disposition / Tenna purchase consideration","excerpt":"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."},{"id":"e31","sourceId":"filing-2","location":"MD&A / external borrowing reductions","excerpt":"Borrowings. Total external borrowings decreased by $100 in the first nine months of 2026 and decreased $2,810 compared to a year ago, generally corresponding with the level of the receivable and lease portfolio, as well as other working capital requirements."},{"id":"e32","sourceId":"filing-7","location":"Consolidated cash flows / capital expenditures, acquisitions and shareholder distributions","excerpt":"(18,962)\nAcquisitions of businesses, net of cash acquired\n​\n​\n(455)\n​\n​\n(89)\nPurchases of marketable securities\n​\n \n(361)\n​\n \n(598)\nPurchases of property and equipment\n​\n \n(716)\n​\n \n(852)\nCost of equipment on operating leases acquired\n​\n \n(1,933)\n​\n \n(2,009)\nCollections of receivables from unconsolidated affiliates\n​\n​\n197 \n​\n​\n334 \nCollateral on derivatives – net\n​\n​\n(63)\n​\n \n127 \nOther\n​\n \n(145)\n​\n \n(231)\nNet cash used for investing activities\n​\n \n(825)\n​\n \n(801)\n​\n​\n​\n​\n​\n​\n​\nCash Flows from Financing Activities\n​\n​\n​\n​\n​\n​\nNet proceeds (payments) in short-term borrowings (original maturities three months or less)\n​\n \n3,205 \n​\n \n(2,060)\nProceeds from borrowings issued (original maturities greater than three months)\n​\n \n5,373 \n​\n \n10,707 \nPayments of borrowings (original maturities greater than three months)\n​\n \n(8,338)\n​\n \n(7,743)\nRepurchases of common stock\n​\n \n(697)\n​\n \n(1,136)\nDividends paid\n​\n \n(1,316)\n​\n \n(1,282)\nOther\n​\n \n(55)\n​\n \n(43)\nNet cash used for financing activities\n​\n \n(1,828)\n​\n \n(1,557)\n​\n​\n​\n​\n​\n​\n​\nEffect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash\n​\n \n20 \n​\n \n108 \n​\n​\n​\n​\n​\n​\n​\nNet Increase in Cash, Cash Equivalents, and Restricted Cash\n​\n \n617 \n​\n \n1,214 \nCash, Cash Equivalents, and Restricted Cash at Beginning of Period\n​\n \n8,533 \n​\n \n7,633 \nCash, Cash Equivalents, and Restricted Cash at End of Period\n​\n$\n9,150 \n​\n$\n8,847 \n​\n​\nSee Condensed Notes to Interim Consolidated Financial Statements."},{"id":"e33","sourceId":"filing-3","location":"Executive Compensation / actual STI metric weightings","excerpt":"weightings of PERFORMANCE METRICS OROA is the most heavily weighted STI performance metric at 50%, OROS is the second most heavily weighted metric at 40%, and ROE contributes the remaining 10%."},{"id":"e34","sourceId":"filing-3","location":"Executive Compensation / fiscal 2023 PSU award zero-payout outcome","excerpt":"As discussed in the CD&A under “Long-term Incentive PSU Payout for Performance Period Ended 2025,” the PSUs had no payout due to the revenue growth relative to the performance peer group performing below the threshold."},{"id":"e35","sourceId":"filing-3","location":"Corporate Governance / independence, elections, ownership requirements and recoupment","excerpt":"We are committed to sound governance practices, including those described below: INDEPENDENCE ​ ◾ All of our director nominees, except our Chairman and CEO, are independent ◾ The independent Lead Director has a role with significant governance responsibilities ◾ All standing Board committees other than the Executive Committee are composed wholly of independent directors ◾ Independent directors meet regularly in executive session without management present BEST PRACTICES ​ ◾ Directors may not stand for re-election after their 75th birthdays, absent Board approval provided in rare circumstances ◾ Directors may not serve on more than three other public company boards, and sitting public company CEOs may not serve on more than one other public company board ◾ Directors may not serve on the audit committee of more than three public companies, including Deere’s Audit Review Committee ◾ Directors rotate committee membership periodically, as approved by the Board ◾ Our recoupment policy requires an executive to return any incentive compensation found to have been awarded erroneously in the event of a financial restatement ◾ Directors and executives are subject to stock ownership requirements ◾ Directors and executives are prohibited from hedging or pledging their Deere stock ACCOUNTABILITY ​ ◾ All directors are elected annually ◾ In uncontested elections, directors are elected by majority vote ◾ The Board and each active Board committee conducts an annual performance self-evaluation ◾ Shareholders have the ability to include nominees in our proxy statement (so-called proxy access rights) RISK OVERSIGHT ​ ◾ The Board oversees Deere’s overall risk management structure ◾ Individual Board committees oversee certain risks related to their specific areas of responsibility ◾ We have robust risk management processes throughout the Company ​ OUR VALUES Our actions are guided by our core values: Integrity, Quality, Humanity, Commitment, and Innovation."},{"id":"e36","sourceId":"filing-3","location":"Executive Compensation / approved discretionary equity adjustments","excerpt":"The Committee approved adjustments to base-level award values ranging up to 20% to recognize the accomplishments of the CEO and individual NEOs."},{"id":"e37","sourceId":"filing-2","location":"MD&A / aged trade receivables improvement","excerpt":"The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1% at August 2, 2026, 3% at November 2, 2025, and 3% at July 27, 2025."},{"id":"e38","sourceId":"filing-2","location":"MD&A / production efficiencies from increased manufacturing volumes","excerpt":"Production efficiencies had a favorable impact resulting from increased manufacturing volumes for CF and SAT."},{"id":"e39","sourceId":"filing-3","location":"Chairman and Lead Director message / 2025 product introductions","excerpt":"These included the F8 and F9 self-propelled forage harvesters, an updated line of round balers, sophisticated harvesting tools, and improved planters and sprayers that offer greater accuracy and dependability."},{"id":"e40","sourceId":"filing-1","location":"MD&A / construction inventory increase from reduced demand","excerpt":"Inventories\nInventories increased primarily due to higher CF inventory driven by reduced demand."},{"id":"e41","sourceId":"filing-3","location":"Executive Compensation / CEO exclusion from own compensation discussions","excerpt":"The CEO does not play a role in and is not present during discussions regarding his own compensation."},{"id":"e42","sourceId":"filing-2","location":"Controls and Procedures / management effectiveness conclusion at August 2, 2026","excerpt":"Item 4.CONTROLS AND PROCEDURES Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of August 2, 2026, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act."},{"id":"e43","sourceId":"filing-2","location":"Legal Proceedings / FTC reporting and compliance oversight","excerpt":"We have also agreed to provide regular reporting to the FTC and submit to the FTC’s oversight of our compliance with the settlement."},{"id":"e44","sourceId":"filing-1","location":"Financial statement notes / financing-incentive accounting correction","excerpt":"In the second quarter of 2023, we corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements."},{"id":"e45","sourceId":"filing-1","location":"Financial statement notes / correction considered immaterial and no restatement","excerpt":"Prior period results for Deere & Company were not restated, as the adjustment was considered immaterial to our financial statements."},{"id":"e46","sourceId":"filing-8","location":"Earnings presentation / July 2026 retail sales relative to industry / mid-size tractors","excerpt":"2WD Tractors (40 < 100 PTO hp) 11% Down less than the industry"},{"id":"e47","sourceId":"filing-8","location":"Earnings presentation / July 2026 retail sales relative to industry / larger 2WD tractors","excerpt":"2WD Tractors (100+ PTO hp) 7% Down less than the industry"},{"id":"e48","sourceId":"filing-7","location":"Special Items / 2025 battery-operation intangible impairment","excerpt":"(2)\nSpecial Items\nImpairment\nIn the third quarter of 2025, the company recorded a non-cash charge of $61 million pretax ($49 million after-tax), primarily related to the trade name and customer relationship assets of external overseas battery operations."},{"id":"e49","sourceId":"filing-7","location":"Special Items / impairment caused by slowing external battery demand","excerpt":"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."}],"changes":["Retain uncertain: the current catalog establishes differentiation but still does not establish durable competitive protection.","Add the exact agriculture and turf competitors disclosed in the 2024 filing; their inclusion establishes competitive coverage, not comparative performance.","Incorporate mixed July 2026 retail performance relative to industry, including underperformance in 4WD tractors and combines. Shipment recovery alone does not establish improved customer retention or market share.","Reassess all eight previously graded pricing and management criteria against current catalog evidence; retain their grades. All four moat criteria remain null.","Include the realized battery-operation impairment when assessing capital discipline; acquisition spending and stated capital priorities do not demonstrate successful acquisition returns."],"limitations":["Only supplied passages were used. Source dates are filing dates, retaining dateKind=filed; they are not inferred publication or retrieval dates.","Most business evidence is issuer disclosure. Reported operating outcomes and contractual terms support numerical assessments, while claims of structural improvement and best-in-class distribution remain management assertions.","Named competitors are disclosed for agriculture and turf. Named construction and forestry competitor coverage and competitor dealer-network, cost, pricing and return comparisons are absent.","Customer-level repurchase rates, technology renewal outcomes, migration costs and interoperability restrictions are not quantified. Retention is assessed indirectly from aftermarket activity and operating demand.","Repair-access obligations are actual disclosed commitments, but their financial effect is unquantified. Earlier antitrust allegations are not treated as adjudicated proof of monopoly power.","Actual incentive structures and historical payout outcomes are disclosed, but individual beneficial ownership amounts are unavailable in the selected passages. Governance mechanisms do not establish exceptional governance outcomes.","Equipment price-reset rights and customer contract durations are not comprehensively disclosed. Incentive discretion supports a limited assessment of contractual freedom.","Recent retail comparisons cover selected products and short rolling periods. They demonstrate mixed competitive outcomes, not conclusive long-term franchise erosion."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":null,"rationale":"Dealer reach, brand recognition and technology integration establish differentiation, but their comparative superiority and protection against replication remain unestablished.","evidenceIds":["e1","e2","e3","e11","e14"]},{"criterion":"durability","grade":null,"rationale":"An established franchise is evident, but the catalog cannot establish the persistence of an economic advantage against expanding competitors and technology entrants.","evidenceIds":["e1","e2","e5","e16"]},{"criterion":"customer_dependency","grade":null,"rationale":"Bundled technology and maintenance demand could create dependence, but neither significant switching costs nor successful customer renewals are demonstrated.","evidenceIds":["e11","e12","e13","e15","e17"]},{"criterion":"erosion_resilience","grade":null,"rationale":"Competitive discounting, mixed relative retail performance and repair-access obligations reveal pressure, but the underlying protection is insufficiently established to grade its resilience.","evidenceIds":["e7","e8","e9","e10","e17","e46","e47"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":2,"rationale":"Observed pricing is mixed across the cycle: 2023 realization was 12%, and third-quarter 2026 pricing contributed $403 million pretax to earnings. In contrast, U.S. and Canadian construction realization declined 3% in 2025 because of competitive incentives.","evidenceIds":["e19","e20","e7","e8"]},{"criterion":"retention","grade":2,"rationale":"Maintenance-component sales and renewed SAT shipment growth indirectly support continuing customer engagement and demand. Dealer purchase deferrals and mixed retail performance limit confidence. These are operating proxies, not measured same-customer retention.","evidenceIds":["e15","e24","e6","e9","e10","e46","e47"]},{"criterion":"margin_resilience","grade":2,"rationale":"Realized pricing provides meaningful cost offsets, but resilience is uneven. SAT operating margin fell from 14.8% to 11.8% in 2025. The third-quarter 2026 cost ratio improved while the nine-month ratio worsened; tariff recoveries contributed to quarterly improvement.","evidenceIds":["e19","e20","e21","e22","e23"]},{"criterion":"contractual_freedom","grade":2,"rationale":"New incentive programs can be introduced after dealer sales, and certain accruals carry contractual set-off rights, demonstrating commercial discretion. Competitive discounting and settlement requirements on repair-resource terms constrain that discretion. Broader equipment repricing rights remain undisclosed.","evidenceIds":["e25","e26","e7","e8","e17"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Nine-month 2026 operating cash generation of $3.25 billion supported $716 million of property purchases and $2.013 billion of shareholder distributions while external borrowings declined. Working capital absorbed cash, Tenna's $439 million purchase has unproven returns, and a realized battery-operation impairment demonstrates imperfect investment outcomes.","evidenceIds":["e27","e28","e29","e30","e31","e32","e48","e49"]},{"criterion":"incentive_alignment","grade":3,"rationale":"Actual STI weights emphasize asset returns and profitability; fiscal 2023 PSUs paid zero after relative revenue growth missed threshold. Ownership requirements, hedging restrictions and recoupment reinforce alignment. Approved discretionary equity increases and missing individual ownership amounts limit the assessment.","evidenceIds":["e33","e34","e35","e36"]},{"criterion":"execution","grade":2,"rationale":"Product introductions, SAT shipment recovery, manufacturing efficiencies and improved aged trade receivables support execution, partly through indirect operating evidence. Elevated construction inventory, below-threshold relative revenue growth and selected retail underperformance demonstrate uneven outcomes. Management's favorable descriptions are not accepted as proof.","evidenceIds":["e24","e37","e38","e39","e40","e34","e9","e10"]},{"criterion":"governance","grade":3,"rationale":"Independent standing committees apart from the Executive Committee, lead-director oversight, annual elections, recoupment and CEO exclusion from own compensation discussions establish strong mechanisms. Effective disclosure controls are management's conclusion. FTC compliance oversight and the historical accounting correction limit confidence in exceptional outcomes; the correction was disclosed as immaterial without 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