John Deere(DE) - 2025 Q4 - Annual Report

Financial Performance - In fiscal year 2025, Production & Precision Agriculture (PPA) generated $17,311 million in net sales, accounting for 45% of equipment operations net sales[21] - Small Agriculture & Turf (SAT) segment generated $10,224 million in net sales, representing 26% of equipment operations net sales[21] - Construction & Forestry (CF) segment generated $11,382 million in net sales, making up 29% of equipment operations net sales[21] - The backlog orders for the CF segment increased to approximately $3.8 billion as of November 2, 2025, compared to $2.2 billion at October 27, 2024, indicating planned production levels are rising in line with retail demand[79] - As of November 2, 2025, the company indirectly owned 100% of the voting shares of Capital Corporation, with a consolidated tangible net worth of $5,929.8 million[85] Strategic Focus - The company is focused on three pillars: Production Systems, Technology Stack, and Lifecycle Solutions to enhance customer value and operational excellence[16][17][18] - The company introduced its Leap Ambitions in 2022, which are focused goals to guide the implementation of its Smart Industrial Operating Model[19] - The company is developing autonomous solutions and connectivity capabilities to meet sustainability goals and unlock new markets[32] - The company is investing significantly in research and development to improve product quality and performance, and to integrate sustainable solutions[66] Technology and Innovation - Investments in precision technology are expected to transform agricultural equipment into smarter, more efficient machines[23] - The company leverages advanced telematics systems to provide real-time alerts and information about equipment performance and maintenance[25][26] - The company’s precision technology solutions include SmartWeigh™, Smart Grade™, and John Deere Operations Center™, aimed at enhancing customer productivity[46] - The company is focusing on delivering hybrid-electric and battery electric equipment solutions to reduce tailpipe emissions while maintaining power and performance[46] Operations and Manufacturing - The company is expanding its operations in Brazil, having built a research and development center in Indaiatuba dedicated to tropical agriculture[39] - The company has a global manufacturing footprint, with most large agricultural equipment assembled in the U.S. for U.S. customers[62] - The company operates approximately 2,050 independent dealer locations in the U.S. and Canada, with around 450 selling construction and forestry equipment[70] - The company has implemented strategies to increase supply chain resiliency and mitigate risks related to supply disruptions[77] Employee and Safety Metrics - The company has approximately 73,100 employees, with 32,500 being full-time production employees as of November 2, 2025[99] - In fiscal year 2025, the company reported a total recordable incident rate of 1.45 and a lost time frequency rate of 0.61, indicating safety performance metrics per 100 full-time employees[111] - Approximately 77% of U.S. production and maintenance employees are represented by unions, with collective bargaining agreements expiring between 2025 and 2027[100] - The company is committed to providing comprehensive and competitive pay and benefits, including medical, dental, and vision plans for eligible full-time employees in the U.S.[108] Compliance and Sustainability - Compliance with environmental controls did not materially affect the company's capital expenditures, earnings, or competitive position in fiscal year 2025[90] - The company does not expect to incur material capital expenditures related to compliance with regulations during fiscal year 2026[98] - The company is subject to various local, state, and federal laws and regulations, which require significant investment in compliance efforts[96] - The company continues to monitor and review developing sustainability frameworks and global regulations, such as the EU's Corporate Sustainability Reporting Directive[94] Financial Services - The financial services segment provides financing for retail purchases, enhancing sales of products and generating financing income[81] - The company completed a transaction with Banco Bradesco S.A. in Q2 of fiscal year 2025, resulting in Bradesco becoming a 50% owner of its Brazilian subsidiary, Banco John Deere S.A.[86] Seasonal Demand - Seasonal demand for agricultural equipment is anticipated based on planting and harvesting seasons, affecting cash flows and production schedules[40][41] Training and Support - The company offers comprehensive training for dealers and customers to maximize the utilization of its technology solutions[47]