AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 29/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Existing telematics integration and recognized branding support differentiation and plausible switching friction. Named rivals and expanding technology competition limit the inference. The disclosures establish an operating franchise, but do not measure customer migration costs, a brand premium or sustained comparative superiority.
durability · 2/4 · Brand recognition appears across fiscal-2023 and fiscal-2024 disclosures, while connected operational workflows provide a plausible continuing relationship. However, competitor expansion and unresolved repair-access litigation make protection uncertain. This supports mixed durability of the observed advantages, without confirming a durable moat.
customer dependency · 2/4 · Telematics connects owners, managers and dealers to utilization, performance and maintenance information, embedding Deere in equipment workflows. Dependency is inferred indirectly from functionality. The passages do not show that customers cannot substitute competing systems or quantify the operational cost of switching.
erosion resilience · 2/4 · Favorable fiscal-2026 pricing despite lower PPA shipments shows some resilience. Realized fiscal-2025 inventory pressure and competitive incentives demonstrate limits, while technology entrants threaten differentiation. Repair-access litigation adds unresolved exposure rather than a proven loss of competitive protection.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 2/4 · Fiscal-2023 price realization was 12 percent, and third-quarter fiscal-2026 pricing contributed $403 million pretax despite lower PPA shipments. However, fiscal-2025 inventory pressure reduced realization and competitive incentives constrained CF pricing. These are observed pricing outcomes, assessed separately from shipment volume and mix.
retention · 2/4 · Connected operational and maintenance information supports continuing engagement and plausible switching friction indirectly. That warrants a mixed assessment of retention support for an equipment business. It does not establish actual renewal rates, repeat equipment purchases or customer loyalty independent of the installed equipment.
margin resilience · 2/4 · Third-quarter fiscal-2026 pricing contributed $403 million pretax against $126 million of higher production costs. The cost-of-sales ratio improved quarterly but worsened over nine months, and tariff recoveries helped the quarter. Pricing offsets therefore demonstrate mixed resilience rather than consistent protection from cost and cycle pressures.
contractual freedom · — · Early-order incentives and competitive incentive programs show commercial pricing activity, but do not disclose contractual authority to reset prices or terms. Repair-access discussions establish no final obligation. The supplied passages cannot establish either broad contractual discretion or binding constraints sufficient to grade this criterion.
Predictability80
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 15.88
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.12
- observedAnnualPeriods
- 5.00
Financial strength—
Missing required inputs: currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 17.94
- Debt / FCF (x)
- 9.40
- Net debt / operating income (x)
- 5.20
Capital allocation88
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 15.00
- 3-year average dilution (%)
- -3.81
- 3-year average SBC / revenue (%)
- 0.31
- cashConversionGrade
- 93.22
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-nine-month fiscal-2026 consolidated operating cash generation exceeded property purchases, while external borrowings declined modestly. Working-capital absorption, Tenna spending with unproven returns and the fiscal-2025 battery impairment temper the assessment. Consolidated financing and leasing activities prevent treating operating cash less property purchases as complete industrial free cash flow.
incentive alignment · 3/4 · Disclosed incentives use operating returns, relative TSR and relative revenue growth; below-threshold growth actually produced zero fiscal-2025 PSU payout. Ownership requirements, recovery provisions and hedging restrictions reinforce alignment. Approved discretionary award increases temper confidence, and ownership requirements alone do not prove individual compliance.
execution · 2/4 · SAT achieved higher shipments, favorable pricing and improved operating results in third-quarter fiscal-2026, while PPA shipments and profit declined. Production efficiencies accompanied a worse nine-month cost-of-sales ratio, and relative revenue growth missed compensation thresholds. Execution is assessed indirectly from mixed operating outcomes that also reflect cyclical conditions.
governance · 3/4 · Independent standing committees except the Executive Committee, lead-director responsibilities, annual elections, proxy access and recovery provisions establish strong governance mechanisms. Shareholders actually approved compensation on an advisory basis. Combined chairman and CEO roles and unresolved litigation temper confidence; procedural safeguards do not demonstrate exceptional governance outcomes.
Evidence
Advancements such as precise global navigation satellite systems technology, advanced connectivity and telematics, on-board sensors and computing power, automation software, digital tools, applications, and analytics provide seamless integration of information designed to improve customer decision-making and job execution.
Fiscal-2024 Form 10-K, business: precision-technology integration · Filed 12/12/2024
Our advanced telematics systems remotely connect equipment owners, business managers, and dealers to equipment in the field.
Fiscal-2024 Form 10-K, business: existing telematics connections · Filed 12/12/2024
This connection provides real-time alerts and information about equipment location, utilization, performance, and maintenance to improve productivity and efficiency, as well as to monitor agronomic job execution.
Fiscal-2024 Form 10-K, business: operational and maintenance information · Filed 12/12/2024
John Deere’s brand recognition is a competitive factor in North America and many other parts of the world.
Fiscal-2024 Form 10-K, competition: brand recognition · Filed 12/12/2024
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.
Fiscal-2024 Form 10-K, competition: named agriculture and turf competitors · Filed 12/12/2024
The agricultural equipment industry continues to change and is becoming even more competitive through the emergence and global expansion of many competitors.
Fiscal-2024 Form 10-K, competition: emergence and expansion of competitors · Filed 12/12/2024
As technology increasingly enables enhanced productivity in agriculture, the industry is also attracting non-traditional competitors, including technology-focused companies and start-up ventures.
Fiscal-2024 Form 10-K, competition: technology-focused entrants · Filed 12/12/2024
Legal Proceeding – On January 15, 2025, the Federal Trade Commission (FTC), along with the Attorneys General of the States of Illinois and Minnesota filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division.
Second-quarter fiscal-2026 Form 10-Q, legal proceedings: January 15, 2025 lawsuit · Filed 28/05/2026
Plaintiffs seek a permanent injunction and other equitable relief to allow owners of our equipment, as well as independent repair providers, access to our repair tools and any other repair resources available to authorized John Deere dealers.
Second-quarter fiscal-2026 Form 10-Q, legal proceedings: requested repair-access relief · Filed 28/05/2026
We are in discussions with the FTC and plaintiff states with respect to a potential resolution.
Second-quarter fiscal-2026 Form 10-Q, legal proceedings: potential-resolution discussions · Filed 28/05/2026
John Deere’s brand recognition is a competitive factor in North America and many other parts of the world.
Fiscal-2023 Form 10-K, competition: brand recognition · Filed 15/12/2023
An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:
Deere & Company
2023
2022
% Change
Cost of sales to net sales
67.9%
73.7%
-8
+ Price realization
Favorable
(-) Production costs
Unfavorable
Price realization was 12 percent driven by strong demand.
Fiscal-2023 Form 10-K, MD&A: cost-of-sales ratio and 12 percent price realization · Filed 15/12/2023
In 2025, elevated used inventory levels in late model-year machines impacted demand for our products in North America resulting in lower price realization and actions to reduce our inventory level.
Fiscal-2025 Form 10-K, inventory risk discussion: realized North American demand and pricing pressure · Filed 18/12/2025
and Canada due to incremental incentive programs deployed to address pressures from the competitive environment and was flat outside the U.S.
Fiscal-2025 Form 10-K, Construction & Forestry results: competitive incentive programs · Filed 18/12/2025
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.
Third-quarter fiscal-2026 Form 10-Q, MD&A: price realization and production-cost effects · Filed 27/08/2026
An explanation of the cost of sales to net sales ratio and other significant statements of consolidated income changes follows:
Three Months Ended
Nine Months Ended
August 2
July 27
%
August 2
July 27
%
Deere & Company
2026
2025
Change
2026
2025
Change
Cost of sales to net sales
72.2%
73.1%
73.1%
71.3%
• Material costs
Unfavorable
Unfavorable
• Tariffs, net of recoveries
Favorable
Unfavorable
• Production efficiencies
Favorable
Favorable
Higher material costs driven by inflationary pressures.
Third-quarter fiscal-2026 Form 10-Q, MD&A: quarterly and nine-month cost-of-sales ratios · Filed 27/08/2026
The favorable tariff impact for the quarter was due to recognition of recoveries (see Global Trade Policies section in Additional Trends).
Third-quarter fiscal-2026 Form 10-Q, MD&A: quarterly tariff recoveries · Filed 27/08/2026
Third Quarter 2026 Compared to Third Quarter 2025
$ in millions
5
Small Agriculture & Turf
Third Quarter
$ in millions
2026
2025
% Change
Net sales
$
3,383
$
3,025
12%
Operating profit
$
622
$
485
28%
Operating margin
18.4%
16.0%
Small Agriculture & Turf sales increased for the quarter as a result of higher shipment volumes and favorable price realization.
Third-quarter fiscal-2026 earnings release: Small Agriculture & Turf shipment, pricing and operating results · Filed 20/08/2026
$
3,998
$
4,273
-6%
Operating profit
$
527
$
580
-9%
Operating margin
13.2%
13.6%
Production & Precision Agriculture sales decreased for the quarter as a result of lower shipment volumes, partially offset by favorable price realization and foreign currency translation.
Third-quarter fiscal-2026 earnings release: Production & Precision Agriculture shipment decline · Filed 20/08/2026
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
205
258
Depreciation and amortization
1,787
1,668
Impairments and other adjustments
29
Share-based compensation expense
116
104
Credit for deferred income taxes
(61)
(102)
Changes in assets and liabilities:
Receivables related to sales
(1,252)
(494)
Inventories
(443)
(526)
Accounts payable and accrued expenses
(266)
(717)
Accrued income taxes payable/receivable
(119)
(147)
Retirement benefits
(367)
(813)
Other
(152)
266
Net cash provided by operating activities
3,250
3,464
Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)
19,922
19,712
Proceeds from maturities and sales of marketable securities
389
359
Proceeds from sales of equipment on operating leases
1,479
1,408
Cost of receivables acquired (excluding receivables related to sales)
(19,139)
(18,962)
Acquisitions of businesses, net of cash acquired
(455)
(89)
Purchases of marketable securities
(361)
(598)
Purchases of property and equipment
(716)
(852)
Cost of equipment on operating leases acquired
(1,933)
(2,009)
Collections of receivables from unconsolidated affiliates
Third-quarter fiscal-2026 Form 10-Q, consolidated cash flows: operating cash, working capital and investment spending · Filed 27/08/2026
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.
Third-quarter fiscal-2026 Form 10-Q, liquidity: external borrowing reductions and portfolio context · Filed 27/08/2026
(2)
Special Items
Impairment
In 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.
Third-quarter fiscal-2026 earnings release, special items: fiscal-2025 battery intangible impairment · Filed 20/08/2026
The purchase price, net of cash acquired, was $439 million.
Second-quarter fiscal-2026 earnings release, acquisition note: Tenna purchase price · Filed 21/05/2026
The performance-based portion is based on OROA, OROS, and ROE in the STI program, and three-year relative TSR (50%) and relative revenue growth (50%) in the PSUs, which represent 50% of the total LTI award.
2026 proxy statement: short-term and long-term performance compensation metrics · Filed 14/01/2026
As discussed above, for the PSUs with a performance period ending in fiscal 2025, actual performance on annualized revenue growth relative to the performance peer group was below the threshold level, resulting in zero payout on the PSUs, clearly demonstrating the rigor of our targets and alignment between pay and performance.
2026 proxy statement: below-threshold relative revenue growth and zero fiscal-2025 PSU payout · Filed 14/01/2026
May
$1,697,280
$3,394,560
$7,400,000
$3,700,000
$3,700,000
$19,891,840
% of LTI
50%
25%
25%
% of Overall Total
8%
17%
37%
19%
19%
100%
To further reinforce alignment of the interests of the NEOs with those of the Company and shareholders, all NEOs are subject to the Company’s Incentive Compensation Recovery Policy and stock ownership and holding requirements, which require the CEO to hold stock equivalent to 6.0 times base salary and each of the other NEOs to hold stock equivalent to 3.5 times base salary.
2026 proxy statement: fiscal-2025 CEO target compensation and executive stock-holding requirements · Filed 14/01/2026
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.
2026 proxy statement: independence, annual elections, recovery policy and stock restrictions · Filed 14/01/2026
The Committee approved adjustments to base-level award values ranging up to 20% to recognize the accomplishments of the CEO and individual NEOs.
2026 proxy statement: approved discretionary increases to base-level equity awards · Filed 14/01/2026
The shareholders approved, on an advisory basis, the compensation paid to the Company’s named executive officers with the following vote:
Shares Voted For Proposal
Shares Voted Against Proposal
Abstain
Broker Non-Votes
190,345,717
16,140,154
694,694
30,832,733
3.
Form 8-K filed February 27, 2026: actual advisory compensation vote · Filed 27/02/2026
For certain equipment, we offer early order programs, which can include incentives to retail customers who place orders well in advance of the use season.
Fiscal-2025 Form 10-K, business: early-order incentive programs · Filed 18/12/2025
