INCOME TAXES

12 Months Ended

Nov. 02, 2025

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

We are subject to income taxes in a number of jurisdictions. We determine our income tax provision using the asset and liability method. The provision for income taxes by taxing jurisdiction and by significant component consisted of the following:

	2025		2024		2023
Current:
U.S.:
Federal	$	400	$	1,253	$	1,803
State		103		257		386
Foreign		1,044		878		1,472
Total current		1,547		2,388		3,661
Deferred:
U.S.:
Federal		(107)		(326)		(485)
State		(10)		(29)		(65)
Foreign		(171)		61		(240)
Total deferred		(288)		(294)		(790)
Provision for income taxes	$	1,259	$	2,094	$	2,871

Based upon the location of our operations, the consolidated income before income taxes in the U.S. in 2025, 2024, and 2023 was $2.7 billion, $5.9 billion, and $7.8 billion, respectively, and in foreign countries was $3.6 billion, $3.3 billion, and $5.2 billion, respectively. Certain foreign operations are branches or partnerships of Deere & Company and are subject to U.S. as well as foreign income tax regulations. The pretax income by location and the preceding analysis of the income tax provision by taxing jurisdiction are not directly related.

A comparison of the statutory and effective income tax provision and reasons for related differences follow:

	2025		2024		2023
U.S. federal income tax provision at the U.S. statutory rate (21%)	$	1,314	$	1,933	$	2,734
State and local taxes, net of federal effect		76		179		266
Other impacts of Tax Cuts and Jobs Act of 2017		41		(60)		(58)
Rate differential on foreign subsidiaries		238		89		142
Research and business tax credits		(131)		(99)		(107)
Excess tax benefits on equity compensation		(37)		(35)		(49)
Valuation allowances		12		(46)		9
Unrecognized tax benefits		(34)		70		4
Differences in taxability of foreign earnings		(93)		(43)		(85)
Other – net		(127)		106		15
Provision for income taxes	$	1,259	$	2,094	$	2,871

At November 2, 2025, undistributed profits of subsidiaries outside the U.S. of approximately $8.2 billion are considered indefinitely reinvested. Determination of the amount of a foreign withholding tax liability on these unremitted earnings is not practicable.

Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax

reporting purposes. An analysis of the deferred income tax assets and liabilities at November 2, 2025, and October 27, 2024, follows:

	2025				2024
	Deferred		Deferred		Deferred		Deferred
	Tax		Tax		Tax		Tax
	Assets		Liabilities		Assets		Liabilities
Accrual for employee benefits	$	300			$	362
Accrual for sales allowances		773				847
Allowance for credit losses		108				93
Amortization of R&D expenditures		1,287				925
Deferred compensation		56				52
Goodwill and other intangible assets			$	132			$	107
Lessee lease transactions		82		75		73		69
Lessor lease transactions				545				449
OPEB – net		190				256
Pension – net				493				394
Share-based compensation		52				50
Tax loss and tax credit carryforwards		1,700				1,564
Tax over book depreciation				171				195
Unearned revenue		151				174
Other items		496		291		337		313
Less: valuation allowances		(1,638)				(1,598)
Total	$	3,557	$	1,707	$	3,135	$	1,527

Deere & Company files a consolidated federal income tax return in the U.S., which includes the wholly-owned financial services subsidiaries. These subsidiaries account for income taxes as if they filed separate income tax returns, with a modification for realizability of certain tax benefits.

At November 2, 2025, tax loss and tax credit carryforwards of $1,700 were available with $1,164 expiring from 2026 through 2045 and $536 with an indefinite carryforward period.

A reconciliation of unrecognized tax benefits at November 2, 2025, October 27, 2024, and October 29, 2023, follows:

	2025		2024		2023
Beginning of year balance	$	928	$	907	$	891
Increases to tax positions taken during the current year		57		59		68
Increases to tax positions taken during prior years		62		68		164
Decreases to tax positions taken during the current year		(5)		(2)		(3)
Decreases to tax positions taken during prior years		(202)		(99)		(209)
Decreases due to lapse of statute of limitations		(3)		(7)		(10)
Other		(17)		(1)		(4)
Foreign exchange		3		3		10
End of year balance	$	823	$	928	$	907

The amount of unrecognized tax benefits at November 2, 2025, and October 27, 2024, that would impact the effective tax rate if the tax benefits were recognized was $322 and $410, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related

to timing. We expect that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant.

We file our tax returns according to the tax laws of the jurisdictions in which we operate, which includes the U.S. federal jurisdiction and various state and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed the examination of our federal income tax returns for periods prior to 2015. The federal income tax returns for years 2015 to 2020 are currently under examination. Various state and foreign income tax returns also remain subject to examination by taxing authorities.

It is our policy to recognize interest related to income taxes in “Interest expense” and “Finance and interest income” and recognize penalties related to income taxes in “Selling, administrative and general expenses.” Income tax related interest and penalties were not significant in 2025, 2024, or 2023. At November 2, 2025, and October 27, 2024, liabilities for income tax related interest and penalties were not significant.