In the first quarter of 2025, we recorded favorable net discrete tax items primarily due to tax benefits of $110 related to the realization of foreign net operating losses from the consolidation of certain subsidiaries and $53 from an adjustment to an uncertain tax position of a foreign subsidiary.

In 2024, we entered into an agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become 50% owner of our wholly-owned subsidiary in Brazil, BJD. BJD is included in our financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. In February 2025, Bradesco contributed capital equal to our equity investment in BJD. We retained a 50% equity interest in BJD and are reporting the results as an equity investment in unconsolidated affiliates.

The BJD business was reclassified as held for sale in 2024. At January 26, 2025, the valuation allowance on “Assets held for sale” decreased to $65, resulting in a pretax and after-tax gain (reversal of previous losses) of $32 recorded in “Selling, administrative and general expenses” in the three months ended January 26, 2025 and presented in “Impairments and other adjustments” in the statements of consolidated cash flows.

The major classes of the total consolidated assets and liabilities of BJD that were classified as held for sale and liabilities of BJD to other intercompany parties were as follows:


	January 26, 2025
Cash and cash equivalents	$	115
Trade accounts and notes receivable – net		105
Financing receivables – net		2,719
Deferred income taxes		34
Other miscellaneous assets*		21
Valuation allowance		(65)
Assets held for sale	$	2,929

Short-term borrowings	$	487
Accounts payable and accrued expenses		124
Long-term borrowings		1,218
Retirement benefits and other liabilities		1
Liabilities held for sale	$	1,830

Total intercompany payables	$	627