DERIVATIVE INSTRUMENTS

3 Months Ended

Feb. 01, 2026

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

(11) DERIVATIVE INSTRUMENTS

Our outstanding derivative transactions are with both unrelated external counterparties and John Deere. For derivative transactions with John Deere, we utilize a centralized hedging structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with us. Except for collateral provisions, the terms of the transaction between John Deere and us are identical to the terms of the transaction between John Deere and its unrelated external counterparty. Derivative asset and liability positions for transactions with John Deere are recorded in “Receivables from John Deere” and “Other payables to John Deere,” respectively. Derivative asset and liability positions for transactions with unrelated external counterparty banks are recorded in “Other assets” and “Accounts payable and accrued expenses,” respectively.

The fair values of our derivative instruments and the associated notional amounts are presented in the table below:

	February 1, 2026						November 2, 2025						January 26, 2025
			Fair Value						Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability		Notional		Asset		Liability
Cash flow hedges:
Interest rate contracts - swaps	$	3,875.0	$	.3	$	27.0	$	2,675.0			$	20.9	$	3,275.0	$	1.4	$	31.1
Fair value hedges:
Interest rate contracts - swaps		10,103.5		120.7		195.3		10,929.0	$	150.5		219.1		14,734.5		21.3		585.3
Cross-currency interest rate contracts		1,558.0		131.5				1,558.0		91.4		10.6		974.5				2.1
Not designated as hedging instruments:
Interest rate contracts - swaps		6,516.3		18.5		23.9		7,073.2		17.6		20.2		6,655.1		20.8		11.7
Foreign currency exchange contracts		1,560.7				56.9		1,554.1		5.0		5.5		1,494.0		1.4		17.6
Cross-currency interest rate contracts		132.7				11.5		131.9		2.3		5.7		164.0		14.5		.3
Interest rate caps - sold		2,040.1				5.4		1,650.8				2.6		1,916.2				12.1
Interest rate caps - purchased		2,040.1		5.4				1,650.8		2.6				1,916.2		12.1

The amount of loss recorded in other comprehensive income (OCI) related to cash flow hedges at February 1, 2026 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is $6.7 after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

The amounts recorded in the consolidated balance sheets related to borrowings designated in fair value hedging relationships are presented in the table below. Fair value hedging adjustments are included in the carrying amount of the hedged item.

			Cumulative
	Carrying		Fair Value
	Amount of		Hedging
February 1, 2026	Hedged Items		Amounts
Current maturities of long-term external borrowings	$	2,906.8	$	(25.7)
Long-term external borrowings		23,290.3		(190.7)
November 2, 2025
Current maturities of long-term external borrowings	$	2,891.2	$	(29.2)
Long-term external borrowings		24,089.0		(201.1)
January 26, 2025
Current maturities of long-term external borrowings	$	2,109.7	$	(14.3)
Long-term external borrowings		23,924.6		(788.2)

The above table includes carrying amounts of current maturities of long-term external borrowings of $2,547.8, $2,544.2 and $2,109.7 and long-term external borrowings of $11,952.3, $11,963.1, and $8,922.6 at February 1, 2026, November 2, 2025, and January 26, 2025, respectively, for hedged items that are in discontinued hedge relationships. Also included are cumulative fair value hedging amounts on discontinued hedge relationships of current maturities of long-term external borrowings of $(25.8), $(29.5), and $(14.3) and long-term external borrowings of $(171.3), $(184.7), and $(179.4) at February 1, 2026, November 2, 2025, and January 26, 2025, respectively. At January 26, 2025, long-term external borrowings with a carrying amount of $598.1 were in both active and discontinued hedging relationships as a result of hedging activities associated with reference rate reform.

The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following:

	Three Months Ended
	February 1		January 26
	2026		2025
Fair value hedges
Interest rate contracts – Interest expense *	$	(39.5)	$	(345.1)
Cash flow hedges
Recognized in OCI:
Interest rate contracts – OCI (pretax)	$	(2.1)	$	6.8
Reclassified from OCI:
Interest rate contracts – Interest expense		(1.4)		9.2
Not designated as hedges
Interest rate contracts – Interest expense *	$	(3.8)	$	(3.8)
Foreign currency exchange contracts – Administrative and operating expenses *		(121.1)		109.4
Total not designated	$	(124.9)	$	105.6

^* Includes interest and foreign currency exchange gains (losses) from cross-currency interest rate contracts.

Included in the table above are interest expense and administrative and operating expense amounts we incurred on derivatives transacted with John Deere. The amounts we recognized on these affiliated party transactions for the three months ended February 1, 2026 and January 26, 2025 were losses of $53.7 and $337.3, respectively.

None of our derivative agreements contain credit-risk-related contingent features. We have a loss-sharing agreement with John Deere in which we have agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage our exposures. The loss-sharing agreement did not increase the maximum amount of loss that we would incur, after considering collateral received and netting arrangements, as of February 1, 2026, November 2, 2025, and January 26, 2025.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows:

	February 1, 2026
	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Derivatives:
Assets
John Deere	$	276.4	$	(237.3)		$	39.1
Liabilities
External		56.9					56.9
John Deere		263.1		(237.3)			25.8

	November 2, 2025
	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Derivatives:
Assets
External	$	5.0	$	(1.6)		$	3.4
John Deere		264.4		(237.3)			27.1
Liabilities
External		5.5		(1.6)			3.9
John Deere		279.1		(237.3)			41.8

	January 26, 2025
	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Derivatives:
Assets
External	$	1.4				$	1.4
John Deere		70.1	$	(25.5)			44.6
Liabilities
External		17.6					17.6
John Deere		642.6		(25.5)			617.1