Financial Data and Key Metrics Changes - In fiscal year 2025, net sales and revenues decreased by 12% to $45.7 billion, while net sales for equipment operations fell by 13% to $38.9 billion [8][12] - Net income attributable to Deere & Company was $5 billion, or $18.50 per diluted share [8][12] - For the fourth quarter, net sales and revenues increased by 11% to $12.4 billion, and net sales for equipment operations rose by 14% to $10.6 billion [8][12] - Net income for the fourth quarter decreased to $1.1 billion, or $3.93 per diluted share [8][12] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating margin of 12.7% [9] - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher costs [10] - Construction and Forestry segment's net sales increased by 27% year-over-year to $3.382 billion, with an operating margin of 10.3% [13] Market Data and Key Metrics Changes - Industry sales of large equipment in the U.S. and Canada are expected to decline by 15%-20% in fiscal year 2026, while small ag and turf demand is estimated to be flat to up 5% [10][11] - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins [11][46] - South America is expected to see flat industry sales, with Brazilian demand tempered by high interest rates and strong global crop yields [11][12] Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction [37] - Deere is committed to advancing its smart industrial journey, emphasizing technology and innovation across all production systems [19][23] - The company anticipates growth in small ag and turf, as well as construction and forestry, while entering North American large ag with lean production [67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization in certain segments and geographies, despite challenges in large ag [7][8] - The company highlighted strong crop use and supportive government payments as potential upside factors [10][41] - Management acknowledged the resilience of the organization amidst a challenging market backdrop, with a focus on long-term customer value [19][67] Other Important Information - The company expects full-year net income for fiscal year 2026 to be in the range of $4 billion to $4.75 billion, with an effective tax rate between 25%-27% [17] - Cash flow from equipment operations is projected to be between $4 billion and $5 billion [17] - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in Q4 due to market uncertainty [67] Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure through price-cost positive expectations and will continue to execute activities to mitigate the impact [73][74] Question: Can you provide insights on the production plans and product mix implications for seasonality? - The company anticipates lower than normal seasonal production to start the year, with flexibility to adjust to demand in subsequent quarters [51][44]