| SEGMENT DATA |
27. 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. The segment’s primary products include four-wheel-drive (4WD), track, and row crop tractors; harvesters; cotton pickers and strippers; sugarcane harvesters and loaders; soil preparation, tillage, seeding, application, crop care equipment; and related attachments and service parts. |
| ● | 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. The segment’s primary products include specialty, utility, and compact tractors; as well as self-propelled forage harvesters and attachments; hay and forage equipment; rotary mowers; utility vehicles; riding and commercial lawn equipment; golf course equipment; utility vehicles; and related attachments and service parts. |
| ● | 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 segment’s primary products include backhoe loaders, crawler dozers and loaders, four-wheel-drive and compact wheel loaders, excavators, skid-steer loaders, motor graders, milling machines, pavers, rollers, log harvesters, and related attachments and service parts. |
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 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. See Notes 5 and 14 for geographic information. Total identifiable assets assigned to the equipment operations operating segments are those the segments actively manage, consisting of trade receivables, inventories, property and equipment, 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. Segment operating profit and identifiable operating assets are the key metrics used by the CEO to monitor results against forecast and prior period results, and to determine variable compensation for employees at all levels. To manage operations and allocate human and capital resources, the CEO receives monthly reports including sales and revenues, operating profit, and assets by operating segment. Interest income and expenses are significant to the FS operations. Information relating to operations by operating segment follows for the years ended November 2, 2025, October 27, 2024, and October 29, 2023. | | | | | | | | | | | | | | | | | | | PPA | | SAT | | CF | | FS | | Total | | 2025 | | | | | | | | | | | | | External net sales | | $ | 17,311 | | $ | 10,224 | | $ | 11,382 | | | | | $ | 38,917 | | External finance and interest income | | | 43 | | | 45 | | | 12 | | $ | 5,351 | | | 5,451 | | External other income | | | 211 | | | 133 | | | 192 | | | 470 | | | 1,006 | | Intersegment income | | | 188 | | | 30 | | | 56 | | | 468 | | | 742 | | Total segment net sales and revenues | | | 17,753 | | | 10,432 | | | 11,642 | | | 6,289 | | | 46,116 | | Cost of sales | | | (11,919) | | | (7,422) | | | (8,849) | | | | | | (28,190) | | Interest expense | | | | | | | | | | | | (2,923) | | | (2,923) | | Other segment items1 | | | (3,163) | | | (1,803) | | | (1,765) | | | (2,252) | | | (8,983) | | Segment operating profit | | $ | 2,671 | | $ | 1,207 | | $ | 1,028 | | $ | 1,114 | | $ | 6,020 | | | | | | | | | | | | | | | | | | | 2024 | | | | | | | | | | | | | | | | | External net sales | | $ | 20,834 | | $ | 10,969 | | $ | 12,956 | | | | | $ | 44,759 | | External finance and interest income | | | 46 | | | 42 | | | 14 | | $ | 5,392 | | | 5,494 | | External other income | | | 329 | | | 173 | | | 238 | | | 390 | | | 1,130 | | Intersegment income | | | 171 | | | 31 | | | (2) | | | 711 | | | 911 | | Total segment net sales and revenues | | | 21,380 | | | 11,215 | | | 13,206 | | | 6,493 | | | 52,294 | | Cost of sales | | | (13,621) | | | (7,753) | | | (9,429) | | | | | | (30,803) | | Interest expense | | | | | | | | | | | | (3,182) | | | (3,182) | | Other segment items1 | | | (3,245) | | | (1,835) | | | (1,768) | | | (2,422) | | | (9,270) | | Segment operating profit | | $ | 4,514 | | $ | 1,627 | | $ | 2,009 | | $ | 889 | | $ | 9,039 | |
| | | | | | | | | | | | | | | | | | | PPA | | SAT | | CF | | FS | | Total | | 2023 | | | | | | | | | | | | | | | | | External net sales | | $ | 26,790 | | $ | 13,980 | | $ | 14,795 | | | | | $ | 55,565 | | External finance and interest income | | | 28 | | | 35 | | | 12 | | $ | 4,366 | | | 4,441 | | External other income | | | 302 | | | 169 | | | 175 | | | 355 | | | 1,001 | | Intersegment income | | | 169 | | | 41 | | | 3 | | | 833 | | | 1,046 | | Total segment net sales and revenues | | | 27,289 | | | 14,225 | | | 14,985 | | | 5,554 | | | 62,053 | | Cost of sales | | | (17,143) | | | (9,976) | | | (10,620) | | | | | | (37,739) | | Interest expense | | | | | | | | | | | | (2,362) | | | (2,362) | | Other segment items1 | | | (3,150) | | | (1,777) | | | (1,670) | | | (2,397) | | | (8,994) | | Segment operating profit | | $ | 6,996 | | $ | 2,472 | | $ | 2,695 | | $ | 795 | | $ | 12,958 | |
1 Other segment items for PPA, SAT, and CF include selling, administrative and general expenses; advertising; engineering; research and development; certain special items (see Note 4); equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. Financial Services other segment items include the effect of its selling, administrative and general expenses; foreign exchange gains and losses; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. | | | | | | | | | | | | | 2025 | | 2024 | | 2023 | | Reconciliation of net sales and revenues | | | | | | | | | | | Segment net sales and revenues | | $ | 46,116 | | $ | 52,294 | | $ | 62,053 | | External other income2 | | | 310 | | | 333 | | | 244 | | Elimination of intersegment revenues | | | (742) | | | (911) | | | (1,046) | | Net sales and revenues | | $ | 45,684 | | $ | 51,716 | | $ | 61,251 | | | | | | | | | | | | | Reconciliation of net income | | | | | | | | | | | Segment operating profit | | $ | 6,020 | | $ | 9,039 | | $ | 12,958 | | Interest income – excluding FS | | | 420 | | | 492 | | | 559 | | Interest expense – excluding FS | | | (372) | | | (396) | | | (411) | | Pension and OPEB benefit, excluding service cost component | | | 422 | | | 333 | | | 286 | | Corporate other – net3 | | | (233) | | | (286) | | | (366) | | Income taxes | | | (1,259) | | | (2,094) | | | (2,871) | | Net income | | $ | 4,998 | | $ | 7,088 | | $ | 10,155 | |
2 External other income includes corporate investment income, corporate interest income, and other miscellaneous revenue items that are included in “Other income” on the statements of consolidated income. 3 Corporate other - net includes certain foreign exchange gains and losses, certain investment income, and certain corporate administrative and general expenses. | | | | | | | | | | | OPERATING SEGMENTS | | 2025 | | 2024 | | 2023 | | Depreciation4 and amortization expense | | PPA | | $ | 654 | | $ | 643 | | $ | 581 | | SAT | | | 261 | | | 246 | | | 241 | | CF | | | 365 | | | 331 | | | 301 | | FS | | | 1,082 | | | 1,040 | | | 1,016 | | Intersegment | | | (133) | | | (142) | | | (135) | | Total | | $ | 2,229 | | $ | 2,118 | | $ | 2,004 | |
| | | | | | | | | | | Total Assets | | | | | | | | | | | PPA | | $ | 8,787 | | $ | 8,696 | | $ | 8,734 | | SAT | | | 3,987 | | | 4,130 | | | 4,348 | | CF | | | 7,792 | | | 7,137 | | | 7,139 | | FS | | | 70,021 | | | 73,612 | | | 70,732 | | Corporate5 | | | 15,409 | | | 13,745 | | | 13,134 | | Total Assets | | $ | 105,996 | | $ | 107,320 | | $ | 104,087 | |
| | | | | | | | | | | Capital additions | | | | | | | | | | | PPA | | $ | 716 | | $ | 1,025 | | $ | 896 | | SAT | | | 301 | | | 327 | | | 386 | | CF | | | 345 | | | 352 | | | 311 | | FS | | | 2 | | | 3 | | | 4 | | Total | | $ | 1,364 | | $ | 1,707 | | $ | 1,597 | | | | | | | | | | | | | Equity investment in unconsolidated affiliates | | PPA | | $ | 11 | | $ | 12 | | $ | 10 | | SAT | | | 37 | | | 61 | | | 87 | | CF | | | | | | | | | 1 | | FS | | | 462 | | | 49 | | | 28 | | Total | | $ | 510 | | $ | 122 | | $ | 126 | |
4 Depreciation includes depreciation for equipment on operating leases. 5 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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