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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 1-4121
DEERE & COMPANY
(Exact name of registrant as specified in its charter)
|
|
|
Delaware |
|
36-2382580 |
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices, zip code)
Registrant’s Telephone Number, including area code: (309) 765-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbols |
|
Name of each exchange on which registered |
Common stock, $1 par value |
|
DE |
|
New York Stock Exchange |
6.55% Debentures Due 2028 |
|
DE28 |
|
New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☒ |
Accelerated filer |
☐ |
Non-accelerated filer |
☐ |
Smaller reporting company |
☐ |
|
Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
At May 3, 2026, 269,937,425 shares of common stock, $1 par value, of the registrant were outstanding.
PART I. FINANCIAL INFORMATION
Item 1.FINANCIAL STATEMENTS
DEERE & COMPANY |
|
||||||||||||
STATEMENTS OF CONSOLIDATED INCOME |
|
||||||||||||
For the Three and Six Months Ended May 3, 2026 and April 27, 2025 |
|
||||||||||||
(In millions of dollars and shares except per share amounts) Unaudited |
|
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
11,778 |
|
$ |
11,171 |
|
$ |
19,779 |
|
$ |
17,980 |
|
Finance and interest income |
|
|
1,314 |
|
|
1,354 |
|
|
2,658 |
|
|
2,807 |
|
Other income |
|
|
277 |
|
|
238 |
|
|
544 |
|
|
485 |
|
Total |
|
|
13,369 |
|
|
12,763 |
|
|
22,981 |
|
|
21,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
8,266 |
|
|
7,609 |
|
|
14,547 |
|
|
12,646 |
|
Research and development expenses |
|
|
583 |
|
|
549 |
|
|
1,137 |
|
|
1,075 |
|
Selling, administrative and general expenses |
|
|
1,209 |
|
|
1,197 |
|
|
2,181 |
|
|
2,169 |
|
Interest expense |
|
|
712 |
|
|
784 |
|
|
1,431 |
|
|
1,614 |
|
Other operating expenses |
|
|
306 |
|
|
287 |
|
|
556 |
|
|
536 |
|
Total |
|
|
11,076 |
|
|
10,426 |
|
|
19,852 |
|
|
18,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of Consolidated Group before Income Taxes |
|
|
2,293 |
|
|
2,337 |
|
|
3,129 |
|
|
3,232 |
|
Provision for income taxes |
|
|
518 |
|
|
539 |
|
|
714 |
|
|
566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of Consolidated Group |
|
|
1,775 |
|
|
1,798 |
|
|
2,415 |
|
|
2,666 |
|
Equity in income (loss) of unconsolidated affiliates |
|
|
(5) |
|
|
3 |
|
|
10 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
1,770 |
|
|
1,801 |
|
|
2,425 |
|
|
2,667 |
|
Less: Net loss attributable to noncontrolling interests |
|
|
(3) |
|
|
(3) |
|
|
(4) |
|
|
(6) |
|
Net Income Attributable to Deere & Company |
|
$ |
1,773 |
|
$ |
1,804 |
|
$ |
2,429 |
|
$ |
2,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
6.57 |
|
$ |
6.65 |
|
$ |
8.99 |
|
$ |
9.85 |
|
Diluted |
|
|
6.55 |
|
|
6.64 |
|
|
8.97 |
|
|
9.82 |
|
Dividends declared |
|
|
1.62 |
|
|
1.62 |
|
|
3.24 |
|
|
3.24 |
|
Dividends paid |
|
|
1.62 |
|
|
1.62 |
|
|
3.24 |
|
|
3.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
270.1 |
|
|
271.1 |
|
|
270.2 |
|
|
271.3 |
|
Diluted |
|
|
270.8 |
|
|
271.8 |
|
|
270.9 |
|
|
272.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
2
DEERE & COMPANY |
|
||||||||||||
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME |
|
||||||||||||
For the Three and Six Months Ended May 3, 2026 and April 27, 2025 |
|
||||||||||||
(In millions of dollars) Unaudited |
|
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Net Income |
|
$ |
1,770 |
|
$ |
1,801 |
|
$ |
2,425 |
|
$ |
2,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (Loss), Net of Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement benefits adjustment |
|
|
(44) |
|
|
2 |
|
|
(45) |
|
|
5 |
|
Cumulative translation adjustment |
|
|
(69) |
|
|
751 |
|
|
305 |
|
|
300 |
|
Unrealized gain (loss) on derivatives |
|
|
16 |
|
|
(8) |
|
|
11 |
|
|
(9) |
|
Unrealized gain (loss) on debt securities |
|
|
(8) |
|
|
24 |
|
|
(6) |
|
|
9 |
|
Other Comprehensive Income (Loss), Net of Income Taxes |
|
|
(105) |
|
|
769 |
|
|
265 |
|
|
305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
1,665 |
|
|
2,570 |
|
|
2,690 |
|
|
2,972 |
|
Less: Comprehensive income (loss) attributable to noncontrolling interests |
|
|
(5) |
|
|
4 |
|
|
(3) |
|
|
(2) |
|
Comprehensive Income Attributable to Deere & Company |
|
$ |
1,670 |
|
$ |
2,566 |
|
$ |
2,693 |
|
$ |
2,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
3
DEERE & COMPANY |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
(In millions of dollars) Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
7,905 |
|
$ |
8,276 |
|
$ |
7,991 |
|
Marketable securities |
|
|
1,430 |
|
|
1,411 |
|
|
1,272 |
|
Trade accounts and notes receivable – net |
|
|
7,571 |
|
|
5,317 |
|
|
6,748 |
|
Financing receivables – net |
|
|
42,916 |
|
|
44,575 |
|
|
43,029 |
|
Financing receivables securitized – net |
|
|
6,100 |
|
|
6,831 |
|
|
7,765 |
|
Other receivables |
|
|
2,582 |
|
|
2,403 |
|
|
2,975 |
|
Equipment on operating leases – net |
|
|
7,514 |
|
|
7,600 |
|
|
7,336 |
|
Inventories |
|
|
8,188 |
|
|
7,406 |
|
|
7,870 |
|
Property and equipment – net |
|
|
8,035 |
|
|
8,079 |
|
|
7,555 |
|
Goodwill |
|
|
4,513 |
|
|
4,188 |
|
|
4,094 |
|
Other intangible assets – net |
|
|
975 |
|
|
892 |
|
|
964 |
|
Retirement benefits |
|
|
3,450 |
|
|
3,273 |
|
|
3,133 |
|
Deferred income taxes |
|
|
2,361 |
|
|
2,284 |
|
|
2,088 |
|
Other assets |
|
|
3,461 |
|
|
3,461 |
|
|
3,483 |
|
Total Assets |
|
$ |
107,001 |
|
$ |
105,996 |
|
$ |
106,303 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
15,632 |
|
$ |
13,796 |
|
$ |
15,948 |
|
Short-term securitization borrowings |
|
|
5,929 |
|
|
6,596 |
|
|
7,562 |
|
Accounts payable and accrued expenses |
|
|
13,653 |
|
|
13,909 |
|
|
13,345 |
|
Deferred income taxes |
|
|
422 |
|
|
434 |
|
|
496 |
|
Long-term borrowings |
|
|
42,261 |
|
|
43,544 |
|
|
42,811 |
|
Retirement benefits and other liabilities |
|
|
1,644 |
|
|
1,710 |
|
|
1,763 |
|
Total liabilities |
|
|
79,541 |
|
|
79,989 |
|
|
81,925 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 17) |
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
|
47 |
|
|
51 |
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Common stock, $1 par value (issued shares at May 3, 2026 – 536,431,204) |
|
|
5,777 |
|
|
5,668 |
|
|
5,565 |
|
Common stock in treasury |
|
|
(36,831) |
|
|
(36,362) |
|
|
(36,064) |
|
Retained earnings |
|
|
61,228 |
|
|
59,676 |
|
|
58,191 |
|
Accumulated other comprehensive income (loss) |
|
|
(2,768) |
|
|
(3,032) |
|
|
(3,405) |
|
Total Deere & Company stockholders’ equity |
|
|
27,406 |
|
|
25,950 |
|
|
24,287 |
|
Noncontrolling interests |
|
|
7 |
|
|
6 |
|
|
8 |
|
Total stockholders’ equity |
|
|
27,413 |
|
|
25,956 |
|
|
24,295 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
107,001 |
|
$ |
105,996 |
|
$ |
106,303 |
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
4
DEERE & COMPANY |
|
|
|
|
|
|
|
STATEMENTS OF CONSOLIDATED CASH FLOWS |
|
|
|
|
|
|
|
For the Six Months Ended May 3, 2026 and April 27, 2025 |
|
|
|
|
|
|
|
(In millions of dollars) Unaudited |
|
|
|
|
|
|
|
|
|
2026 |
|
2025 |
|
||
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
Net income |
|
$ |
2,425 |
|
$ |
2,667 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Provision for credit losses |
|
|
127 |
|
|
174 |
|
Depreciation and amortization |
|
|
1,184 |
|
|
1,104 |
|
Impairments and other adjustments |
|
|
|
|
|
(32) |
|
Share-based compensation expense |
|
|
69 |
|
|
54 |
|
Provision (credit) for deferred income taxes |
|
|
(68) |
|
|
11 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Receivables related to sales |
|
|
(1,084) |
|
|
(1,069) |
|
Inventories |
|
|
(738) |
|
|
(772) |
|
Accounts payable and accrued expenses |
|
|
(333) |
|
|
(898) |
|
Accrued income taxes payable/receivable |
|
|
(5) |
|
|
(147) |
|
Retirement benefits |
|
|
(290) |
|
|
(794) |
|
Other |
|
|
(245) |
|
|
270 |
|
Net cash provided by operating activities |
|
|
1,042 |
|
|
568 |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
Collections of receivables (excluding receivables related to sales) |
|
|
14,385 |
|
|
14,348 |
|
Proceeds from maturities and sales of marketable securities |
|
|
258 |
|
|
245 |
|
Proceeds from sales of equipment on operating leases |
|
|
1,019 |
|
|
1,001 |
|
Cost of receivables acquired (excluding receivables related to sales) |
|
|
(13,157) |
|
|
(12,744) |
|
Acquisition of business, net of cash acquired |
|
|
(439) |
|
|
|
|
Purchases of marketable securities |
|
|
(284) |
|
|
(347) |
|
Purchases of property and equipment |
|
|
(451) |
|
|
(555) |
|
Cost of equipment on operating leases acquired |
|
|
(1,295) |
|
|
(1,254) |
|
Collections of receivables from unconsolidated affiliates |
|
|
152 |
|
|
234 |
|
Collateral on derivatives – net |
|
|
(8) |
|
|
27 |
|
Other |
|
|
(87) |
|
|
(176) |
|
Net cash provided by investing activities |
|
|
93 |
|
|
779 |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
Net proceeds in short-term borrowings (original maturities three months or less) |
|
|
2,246 |
|
|
551 |
|
Proceeds from borrowings issued (original maturities greater than three months) |
|
|
3,451 |
|
|
5,156 |
|
Payments of borrowings (original maturities greater than three months) |
|
|
(5,935) |
|
|
(4,837) |
|
Repurchases of common stock |
|
|
(500) |
|
|
(838) |
|
Dividends paid |
|
|
(878) |
|
|
(843) |
|
Other |
|
|
(11) |
|
|
(10) |
|
Net cash used for financing activities |
|
|
(1,627) |
|
|
(821) |
|
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash |
|
|
94 |
|
|
20 |
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash |
|
|
(398) |
|
|
546 |
|
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
|
|
8,533 |
|
|
7,633 |
|
Cash, Cash Equivalents, and Restricted Cash at End of Period |
|
$ |
8,135 |
|
$ |
8,179 |
|
|
|
|
|
|
|
|
|
Components of Cash, Cash Equivalents, and Restricted Cash |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
7,905 |
|
$ |
7,991 |
|
Restricted cash (Other assets) |
|
|
230 |
|
|
188 |
|
Total Cash, Cash Equivalents, and Restricted Cash |
|
$ |
8,135 |
|
$ |
8,179 |
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
5
DEERE & COMPANY |
|
||||||||||||||||||||||
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY |
|
||||||||||||||||||||||
For the Three and Six Months Ended May 3, 2026 and April 27, 2025 |
|
||||||||||||||||||||||
(In millions of dollars) Unaudited |
|
||||||||||||||||||||||
|
|
|
|
|
Total Stockholders’ Equity |
|
|
|
|
|
|||||||||||||
|
|
|
|
|
Deere & Company Stockholders |
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|||||||
|
|
Total |
|
|
|
|
|
|
|
Other |
|
|
|
|
Redeemable |
|
|||||||
|
|
Stockholders’ |
|
Common |
|
Treasury |
|
Retained |
|
Comprehensive |
|
Noncontrolling |
|
|
Noncontrolling |
|
|||||||
|
|
Equity |
|
Stock |
|
Stock |
|
Earnings |
|
Income (Loss) |
|
Interests |
|
|
Interest |
|
|||||||
Three Months Ended April 27, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance January 26, 2025 |
|
$ |
22,486 |
|
$ |
5,526 |
|
$ |
(35,709) |
|
$ |
56,829 |
|
$ |
(4,167) |
|
$ |
7 |
|
|
$ |
78 |
|
Net income (loss) |
|
|
1,804 |
|
|
|
|
|
|
|
|
1,804 |
|
|
|
|
|
|
|
|
|
(3) |
|
Other comprehensive income |
|
|
762 |
|
|
|
|
|
|
|
|
|
|
|
762 |
|
|
|
|
|
|
7 |
|
Repurchases of common stock |
|
|
(362) |
|
|
|
|
|
(362) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares reissued |
|
|
7 |
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared |
|
|
(440) |
|
|
|
|
|
|
|
|
(440) |
|
|
|
|
|
|
|
|
|
|
|
Share based awards and other |
|
|
38 |
|
|
39 |
|
|
|
|
|
(2) |
|
|
|
|
|
1 |
|
|
|
1 |
|
Balance April 27, 2025 |
|
$ |
24,295 |
|
$ |
5,565 |
|
$ |
(36,064) |
|
$ |
58,191 |
|
$ |
(3,405) |
|
$ |
8 |
|
|
$ |
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended April 27, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance October 27, 2024 |
|
$ |
22,843 |
|
$ |
5,489 |
|
$ |
(35,349) |
|
$ |
56,402 |
|
$ |
(3,706) |
|
$ |
7 |
|
|
$ |
82 |
|
Net income (loss) |
|
|
2,673 |
|
|
|
|
|
|
|
|
2,673 |
|
|
|
|
|
|
|
|
|
(6) |
|
Other comprehensive income |
|
|
301 |
|
|
|
|
|
|
|
|
|
|
|
301 |
|
|
|
|
|
|
4 |
|
Repurchases of common stock |
|
|
(746) |
|
|
|
|
|
(746) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares reissued |
|
|
31 |
|
|
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared |
|
|
(881) |
|
|
|
|
|
|
|
|
(881) |
|
|
|
|
|
|
|
|
|
|
|
Share based awards and other |
|
|
74 |
|
|
76 |
|
|
|
|
|
(3) |
|
|
|
|
|
1 |
|
|
|
3 |
|
Balance April 27, 2025 |
|
$ |
24,295 |
|
$ |
5,565 |
|
$ |
(36,064) |
|
$ |
58,191 |
|
$ |
(3,405) |
|
$ |
8 |
|
|
$ |
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 3, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance February 1, 2026 |
|
$ |
26,307 |
|
$ |
5,715 |
|
$ |
(36,645) |
|
$ |
59,895 |
|
$ |
(2,665) |
|
$ |
7 |
|
|
$ |
50 |
|
Net income (loss) |
|
|
1,773 |
|
|
|
|
|
|
|
|
1,773 |
|
|
|
|
|
|
|
|
|
(3) |
|
Other comprehensive loss |
|
|
(103) |
|
|
|
|
|
|
|
|
|
|
|
(103) |
|
|
|
|
|
|
(2) |
|
Repurchases of common stock |
|
|
(193) |
|
|
|
|
|
(193) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares reissued |
|
|
7 |
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared |
|
|
(439) |
|
|
|
|
|
|
|
|
(439) |
|
|
|
|
|
|
|
|
|
|
|
Share based awards and other |
|
|
61 |
|
|
62 |
|
|
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
2 |
|
Balance May 3, 2026 |
|
$ |
27,413 |
|
$ |
5,777 |
|
$ |
(36,831) |
|
$ |
61,228 |
|
$ |
(2,768) |
|
$ |
7 |
|
|
$ |
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 3, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance November 2, 2025 |
|
$ |
25,956 |
|
$ |
5,668 |
|
$ |
(36,362) |
|
$ |
59,676 |
|
$ |
(3,032) |
|
$ |
6 |
|
|
$ |
51 |
|
Net income (loss) |
|
|
2,430 |
|
|
|
|
|
|
|
|
2,429 |
|
|
|
|
|
1 |
|
|
|
(5) |
|
Other comprehensive income |
|
|
264 |
|
|
|
|
|
|
|
|
|
|
|
264 |
|
|
|
|
|
|
1 |
|
Repurchases of common stock |
|
|
(496) |
|
|
(4) |
|
|
(492) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares reissued |
|
|
23 |
|
|
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared |
|
|
(877) |
|
|
|
|
|
|
|
|
(877) |
|
|
|
|
|
|
|
|
|
|
|
Share based awards and other |
|
|
113 |
|
|
113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance May 3, 2026 |
|
$ |
27,413 |
|
$ |
5,777 |
|
$ |
(36,831) |
|
$ |
61,228 |
|
$ |
(2,768) |
|
$ |
7 |
|
|
$ |
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
6
CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) ORGANIZATION AND CONSOLIDATION
Deere & Company has been developing innovative solutions to help its customers become more profitable for more than 185 years. References to “Deere & Company,” “John Deere,” “Deere,” “we,” “us,” or “our” include our consolidated subsidiaries, unless otherwise stated. We manage our business through the following operating segments: Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), Construction & Forestry (CF), and Financial Services (John Deere Financial or FS). References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.
We use a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal years 2026 and 2025 were May 3, 2026, and April 27, 2025, respectively. Both quarters contained 13 weeks, while both year-to-date periods contained 26 weeks. Fiscal year 2025 contained 53 weeks, with the additional week occurring in the fourth quarter. Unless otherwise stated, references to particular years, quarters, or months refer to our fiscal years generally ending near the end of October and the associated periods in those fiscal years.
All amounts are presented in millions of U.S. dollars, unless otherwise specified. Certain prior period amounts have been reclassified to conform to current period presentation.
Variable Interest Entities
We consolidate certain variable interest entities (VIEs) related to retail note securitizations (see Note 10).
We have a 50% ownership interest in Banco John Deere S.A. (BJD), an equity method investment that finances retail and wholesale loans for agricultural, construction, and forestry equipment in Brazil. This investment was established in February 2025 through the sale of 50% ownership of a former subsidiary (see Note 21). BJD is a VIE as we provide funding and are exposed to losses that are disproportionate to our voting rights. However, we are not the primary beneficiary of the VIE because the power over significant activities, including the strategic plan, budget, credit policies, and funding guidelines, is shared among equity holders through an equally represented board of directors.
Financial results of BJD are reported in “Equity in income (loss) of unconsolidated affiliates.” The related investment in unconsolidated affiliates is included in “Other assets” on the condensed consolidated balance sheets, while short-term and long-term funding is recorded in receivables from unconsolidated affiliates and included in “Other receivables.”
Our carrying value of receivables from and investments in BJD and maximum exposure to loss were as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Receivables from unconsolidated affiliates – “Other receivables” |
|
$ |
279 |
|
$ |
394 |
|
$ |
564 |
|
Investments in unconsolidated affiliates – “Other assets” |
|
|
409 |
|
|
405 |
|
|
372 |
|
Carrying value of assets related to VIE |
|
|
688 |
|
|
799 |
|
|
936 |
|
Guarantees |
|
|
172 |
|
|
157 |
|
|
156 |
|
Maximum exposure to loss |
|
$ |
860 |
|
$ |
956 |
|
$ |
1,092 |
|
Guarantees primarily include BJD debt related to government funding that existed prior to the deconsolidation of BJD. We did not record a contractual liability related to these guarantees on our condensed consolidated balance sheets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING PRONOUNCEMENTS
Quarterly Financial Statements
The interim consolidated financial statements of Deere & Company have been prepared by us, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in our latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.
Use of Estimates in Financial Statements
Certain accounting policies require management to make estimates and assumptions in determining the amounts reflected in the financial statements and related disclosures. Actual results could differ from those estimates.
7
Accounting Pronouncements to be Adopted
We closely monitor all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides updated guidance on how to recognize, measure, and present government grants. The ASU will be effective for us beginning with our interim reporting for fiscal year 2030, with early adoption permitted. We are assessing the effect of this update on our consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which provides updated guidance for the capitalization of internal-use software. The ASU will be effective for us beginning with our interim reporting for fiscal year 2029, with early adoption permitted. We are assessing the effect of this update on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), which clarifies the effective date of ASU 2024-03. The ASU will be effective for us beginning with our annual reporting for fiscal year 2028 and interim periods thereafter. We are assessing the effect of ASU 2024-03 on our related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and cash taxes paid both in the U.S. and foreign jurisdictions. The ASU will be effective for us beginning with our annual reporting for fiscal year 2026. We are assessing the effect of this update on our related disclosures. The adoption will not have a material impact on our consolidated financial statements.
We will also adopt the following standards in future periods, none of which are expected to have a material effect on our consolidated financial statements, including note disclosures to consolidated financial statements. All other accounting standards issued but not yet adopted were not applicable to us.
No. 2026-02 — Environmental Credits and Environmental Credit Obligations (Topic 818) |
|
No. 2025-12 — Codification Improvements |
|
No. 2025-11 — Interim Reporting (Topic 270): Narrow-Scope Improvements |
|
No. 2025-09 — Derivatives and Hedging (Topic 815): Hedge Accounting Improvements |
|
No. 2025-07 — Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract |
|
No. 2025-05 — Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets |
|
No. 2024-04 — Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments |
|
No. 2023-06 — Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative |
|
8
(3) REVENUE RECOGNITION
Our net sales and revenues by primary geographic market, major product line, and timing of revenue recognition follow:
Three Months Ended May 3, 2026 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
Primary geographic markets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
2,012 |
|
$ |
1,833 |
|
$ |
2,317 |
|
$ |
1,036 |
|
$ |
7,198 |
|
Canada |
|
|
487 |
|
|
187 |
|
|
175 |
|
|
190 |
|
|
1,039 |
|
Western Europe |
|
|
654 |
|
|
827 |
|
|
608 |
|
|
52 |
|
|
2,141 |
|
Central Europe and CIS |
|
|
297 |
|
|
121 |
|
|
105 |
|
|
2 |
|
|
525 |
|
Latin America |
|
|
828 |
|
|
128 |
|
|
280 |
|
|
32 |
|
|
1,268 |
|
Asia, Africa, Oceania, and Middle East |
|
|
329 |
|
|
446 |
|
|
369 |
|
|
54 |
|
|
1,198 |
|
Total |
|
$ |
4,607 |
|
$ |
3,542 |
|
$ |
3,854 |
|
$ |
1,366 |
|
$ |
13,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major product lines: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production agriculture |
|
$ |
4,403 |
|
|
|
|
|
|
|
|
|
|
$ |
4,403 |
|
Small agriculture |
|
|
|
|
$ |
2,339 |
|
|
|
|
|
|
|
|
2,339 |
|
Turf |
|
|
|
|
|
1,063 |
|
|
|
|
|
|
|
|
1,063 |
|
Construction |
|
|
|
|
|
|
|
$ |
1,514 |
|
|
|
|
|
1,514 |
|
Compact construction |
|
|
|
|
|
|
|
|
653 |
|
|
|
|
|
653 |
|
Roadbuilding |
|
|
|
|
|
|
|
|
1,270 |
|
|
|
|
|
1,270 |
|
Forestry |
|
|
|
|
|
|
|
|
294 |
|
|
|
|
|
294 |
|
Financial products |
|
|
52 |
|
|
23 |
|
|
16 |
|
$ |
1,366 |
|
|
1,457 |
|
Other |
|
|
152 |
|
|
117 |
|
|
107 |
|
|
|
|
|
376 |
|
Total |
|
$ |
4,607 |
|
$ |
3,542 |
|
$ |
3,854 |
|
$ |
1,366 |
|
$ |
13,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognized: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At a point in time |
|
$ |
4,502 |
|
$ |
3,495 |
|
$ |
3,819 |
|
$ |
37 |
|
$ |
11,853 |
|
Over time |
|
|
105 |
|
|
47 |
|
|
35 |
|
|
1,329 |
|
|
1,516 |
|
Total |
|
$ |
4,607 |
|
$ |
3,542 |
|
$ |
3,854 |
|
$ |
1,366 |
|
$ |
13,369 |
|
Six Months Ended May 3, 2026 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
Primary geographic markets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
3,238 |
|
$ |
2,939 |
|
$ |
3,894 |
|
$ |
2,088 |
|
$ |
12,159 |
|
Canada |
|
|
885 |
|
|
288 |
|
|
311 |
|
|
381 |
|
|
1,865 |
|
Western Europe |
|
|
1,118 |
|
|
1,313 |
|
|
1,034 |
|
|
106 |
|
|
3,571 |
|
Central Europe and CIS |
|
|
469 |
|
|
181 |
|
|
181 |
|
|
4 |
|
|
835 |
|
Latin America |
|
|
1,512 |
|
|
223 |
|
|
511 |
|
|
64 |
|
|
2,310 |
|
Asia, Africa, Oceania, and Middle East |
|
|
654 |
|
|
822 |
|
|
657 |
|
|
108 |
|
|
2,241 |
|
Total |
|
$ |
7,876 |
|
$ |
5,766 |
|
$ |
6,588 |
|
$ |
2,751 |
|
$ |
22,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major product lines: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production agriculture |
|
$ |
7,496 |
|
|
|
|
|
|
|
|
|
|
$ |
7,496 |
|
Small agriculture |
|
|
|
|
$ |
3,866 |
|
|
|
|
|
|
|
|
3,866 |
|
Turf |
|
|
|
|
|
1,639 |
|
|
|
|
|
|
|
|
1,639 |
|
Construction |
|
|
|
|
|
|
|
$ |
2,625 |
|
|
|
|
|
2,625 |
|
Compact construction |
|
|
|
|
|
|
|
|
1,121 |
|
|
|
|
|
1,121 |
|
Roadbuilding |
|
|
|
|
|
|
|
|
2,042 |
|
|
|
|
|
2,042 |
|
Forestry |
|
|
|
|
|
|
|
|
563 |
|
|
|
|
|
563 |
|
Financial products |
|
|
109 |
|
|
50 |
|
|
34 |
|
$ |
2,751 |
|
|
2,944 |
|
Other |
|
|
271 |
|
|
211 |
|
|
203 |
|
|
|
|
|
685 |
|
Total |
|
$ |
7,876 |
|
$ |
5,766 |
|
$ |
6,588 |
|
$ |
2,751 |
|
$ |
22,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognized: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At a point in time |
|
$ |
7,666 |
|
$ |
5,669 |
|
$ |
6,514 |
|
$ |
70 |
|
$ |
19,919 |
|
Over time |
|
|
210 |
|
|
97 |
|
|
74 |
|
|
2,681 |
|
|
3,062 |
|
Total |
|
$ |
7,876 |
|
$ |
5,766 |
|
$ |
6,588 |
|
$ |
2,751 |
|
$ |
22,981 |
|
9
Three Months Ended April 27, 2025 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
Primary geographic markets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
2,512 |
|
$ |
1,626 |
|
$ |
1,717 |
|
$ |
1,072 |
|
$ |
6,927 |
|
Canada |
|
|
656 |
|
|
153 |
|
|
208 |
|
|
172 |
|
|
1,189 |
|
Western Europe |
|
|
612 |
|
|
667 |
|
|
497 |
|
|
44 |
|
|
1,820 |
|
Central Europe and CIS |
|
|
239 |
|
|
99 |
|
|
87 |
|
|
3 |
|
|
428 |
|
Latin America |
|
|
995 |
|
|
116 |
|
|
220 |
|
|
41 |
|
|
1,372 |
|
Asia, Africa, Oceania, and Middle East |
|
|
312 |
|
|
385 |
|
|
277 |
|
|
53 |
|
|
1,027 |
|
Total |
|
$ |
5,326 |
|
$ |
3,046 |
|
$ |
3,006 |
|
$ |
1,385 |
|
$ |
12,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major product lines: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production agriculture |
|
$ |
5,135 |
|
|
|
|
|
|
|
|
|
|
$ |
5,135 |
|
Small agriculture |
|
|
|
|
$ |
1,964 |
|
|
|
|
|
|
|
|
1,964 |
|
Turf |
|
|
|
|
|
957 |
|
|
|
|
|
|
|
|
957 |
|
Construction |
|
|
|
|
|
|
|
$ |
1,182 |
|
|
|
|
|
1,182 |
|
Compact construction |
|
|
|
|
|
|
|
|
506 |
|
|
|
|
|
506 |
|
Roadbuilding |
|
|
|
|
|
|
|
|
949 |
|
|
|
|
|
949 |
|
Forestry |
|
|
|
|
|
|
|
|
254 |
|
|
|
|
|
254 |
|
Financial products |
|
|
56 |
|
|
25 |
|
|
16 |
|
$ |
1,385 |
|
|
1,482 |
|
Other |
|
|
135 |
|
|
100 |
|
|
99 |
|
|
|
|
|
334 |
|
Total |
|
$ |
5,326 |
|
$ |
3,046 |
|
$ |
3,006 |
|
$ |
1,385 |
|
$ |
12,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognized: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At a point in time |
|
$ |
5,218 |
|
$ |
2,997 |
|
$ |
2,967 |
|
$ |
34 |
|
$ |
11,216 |
|
Over time |
|
|
108 |
|
|
49 |
|
|
39 |
|
|
1,351 |
|
|
1,547 |
|
Total |
|
$ |
5,326 |
|
$ |
3,046 |
|
$ |
3,006 |
|
$ |
1,385 |
|
$ |
12,763 |
|
Six Months Ended April 27, 2025 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
Primary geographic markets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
4,067 |
|
$ |
2,575 |
|
$ |
2,830 |
|
$ |
2,158 |
|
$ |
11,630 |
|
Canada |
|
|
1,010 |
|
|
232 |
|
|
309 |
|
|
359 |
|
|
1,910 |
|
Western Europe |
|
|
889 |
|
|
1,019 |
|
|
841 |
|
|
87 |
|
|
2,836 |
|
Central Europe and CIS |
|
|
306 |
|
|
138 |
|
|
158 |
|
|
7 |
|
|
609 |
|
Latin America |
|
|
1,710 |
|
|
196 |
|
|
425 |
|
|
137 |
|
|
2,468 |
|
Asia, Africa, Oceania, and Middle East |
|
|
517 |
|
|
693 |
|
|
501 |
|
|
108 |
|
|
1,819 |
|
Total |
|
$ |
8,499 |
|
$ |
4,853 |
|
$ |
5,064 |
|
$ |
2,856 |
|
$ |
21,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major product lines: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production agriculture |
|
$ |
8,137 |
|
|
|
|
|
|
|
|
|
|
$ |
8,137 |
|
Small agriculture |
|
|
|
|
$ |
3,198 |
|
|
|
|
|
|
|
|
3,198 |
|
Turf |
|
|
|
|
|
1,420 |
|
|
|
|
|
|
|
|
1,420 |
|
Construction |
|
|
|
|
|
|
|
$ |
1,952 |
|
|
|
|
|
1,952 |
|
Compact construction |
|
|
|
|
|
|
|
|
867 |
|
|
|
|
|
867 |
|
Roadbuilding |
|
|
|
|
|
|
|
|
1,545 |
|
|
|
|
|
1,545 |
|
Forestry |
|
|
|
|
|
|
|
|
480 |
|
|
|
|
|
480 |
|
Financial products |
|
|
111 |
|
|
58 |
|
|
37 |
|
$ |
2,856 |
|
|
3,062 |
|
Other |
|
|
251 |
|
|
177 |
|
|
183 |
|
|
|
|
|
611 |
|
Total |
|
$ |
8,499 |
|
$ |
4,853 |
|
$ |
5,064 |
|
$ |
2,856 |
|
$ |
21,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue recognized: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At a point in time |
|
$ |
8,304 |
|
$ |
4,757 |
|
$ |
4,995 |
|
$ |
63 |
|
$ |
18,119 |
|
Over time |
|
|
195 |
|
|
96 |
|
|
69 |
|
|
2,793 |
|
|
3,153 |
|
Total |
|
$ |
8,499 |
|
$ |
4,853 |
|
$ |
5,064 |
|
$ |
2,856 |
|
$ |
21,272 |
|
10
We invoice in advance of recognizing the revenue of certain products and services. These relate to extended warranty premiums, advance payments for future equipment sales, and subscription and service revenue related to precision guidance, telematic services, and other information enabled solutions. These advanced customer payments are presented as deferred revenue, a contract liability, in “Accounts payable and accrued expenses.” The deferred revenue received, but not recognized in revenue, was $2,155, $2,039, and $2,089 at May 3, 2026, November 2, 2025, and April 27, 2025, respectively. The contract liability is reduced as the revenue is recognized. Revenue recognized from deferred revenue that was recorded as a contract liability at the beginning of the fiscal year was $163 and $176 during the three months and $428 and $373 during the six months ended May 3, 2026, and April 27, 2025, respectively.
The amount of unsatisfied performance obligations for contracts with an original duration greater than one year was $1,855 at May 3, 2026. The estimated revenue to be recognized by fiscal year follows: remainder of 2026 – $320, 2027 – $591, 2028 – $402, 2029 – $254, 2030 – $156, 2031 – $87, and later years – $45. As permitted, we elected only to disclose remaining performance obligations with an original contract duration greater than one year. The contracts with an expected duration of one year or less are for sales to dealers and retail customers for equipment, service parts, repair services, and certain telematics services.
(4) OTHER COMPREHENSIVE INCOME ITEMS
The after-tax components of accumulated other comprehensive income (loss) follow:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Retirement benefits adjustment |
|
$ |
(1,227) |
|
$ |
(1,182) |
|
$ |
(1,269) |
|
Cumulative translation adjustment |
|
|
(1,449) |
|
|
(1,753) |
|
|
(1,990) |
|
Unrealized loss on derivatives |
|
|
(43) |
|
|
(54) |
|
|
(81) |
|
Unrealized loss on debt securities |
|
|
(49) |
|
|
(43) |
|
|
(65) |
|
Accumulated other comprehensive income (loss) |
|
$ |
(2,768) |
|
$ |
(3,032) |
|
$ |
(3,405) |
|
The following tables reflect amounts recorded in other comprehensive income (loss), as well as reclassifications out of other comprehensive income (loss).
|
|
Before |
|
Tax |
|
After |
|
|||
|
|
Tax |
|
(Expense) |
|
Tax |
|
|||
Three Months Ended May 3, 2026 |
|
Amount |
|
Credit |
|
Amount |
|
|||
Cumulative translation adjustment: |
|
|
|
|
|
|
|
|
|
|
Unrealized translation gain (loss) |
|
$ |
(76) |
|
$ |
5 |
|
$ |
(71) |
|
Reclassification of realized (gain) loss to Other income |
|
|
4 |
|
|
|
|
|
4 |
|
Net unrealized translation gain (loss) |
|
|
(72) |
|
|
5 |
|
|
(67) |
|
Unrealized gain (loss) on derivatives: |
|
|
|
|
|
|
|
|
|
|
Unrealized hedging gain (loss) |
|
|
17 |
|
|
(3) |
|
|
14 |
|
Reclassification of realized (gain) loss to Interest expense |
|
|
2 |
|
|
|
|
|
2 |
|
Net unrealized gain (loss) on derivatives |
|
|
19 |
|
|
(3) |
|
|
16 |
|
Unrealized gain (loss) on debt securities: |
|
|
|
|
|
|
|
|
|
|
Unrealized holding gain (loss) |
|
|
(11) |
|
|
3 |
|
|
(8) |
|
Net unrealized gain (loss) on debt securities |
|
|
(11) |
|
|
3 |
|
|
(8) |
|
Retirement benefits adjustment: |
|
|
|
|
|
|
|
|
|
|
Net actuarial gain (loss) and prior service credit (cost) |
|
|
(56) |
|
|
14 |
|
|
(42) |
|
Reclassification to Other operating expenses through amortization of: |
|
|
|
|
|
|
|
|
|
|
Actuarial (gain) loss |
|
|
(12) |
|
|
3 |
|
|
(9) |
|
Prior service (credit) cost |
|
|
10 |
|
|
(3) |
|
|
7 |
|
Net unrealized gain (loss) on retirement benefits adjustment |
|
|
(58) |
|
|
14 |
|
|
(44) |
|
Total other comprehensive income (loss) |
|
$ |
(122) |
|
$ |
19 |
|
$ |
(103) |
|
11
|
|
Before |
|
Tax |
|
After |
|
|||
|
|
Tax |
|
(Expense) |
|
Tax |
|
|||
Six Months Ended May 3, 2026 |
|
Amount |
|
Credit |
|
Amount |
|
|||
Cumulative translation adjustment: |
|
|
|
|
|
|
|
|
|
|
Unrealized translation gain (loss) |
|
$ |
295 |
|
$ |
5 |
|
$ |
300 |
|
Reclassification of realized (gain) loss to Other income |
|
|
4 |
|
|
|
|
|
4 |
|
Net unrealized translation gain (loss) |
|
|
299 |
|
|
5 |
|
|
304 |
|
Unrealized gain (loss) on derivatives: |
|
|
|
|
|
|
|
|
|
|
Unrealized hedging gain (loss) |
|
|
15 |
|
|
(3) |
|
|
12 |
|
Reclassification of realized (gain) loss to Interest expense |
|
|
(2) |
|
|
1 |
|
|
(1) |
|
Net unrealized gain (loss) on derivatives |
|
|
13 |
|
|
(2) |
|
|
11 |
|
Unrealized gain (loss) on debt securities: |
|
|
|
|
|
|
|
|
|
|
Unrealized holding gain (loss) |
|
|
(7) |
|
|
1 |
|
|
(6) |
|
Net unrealized gain (loss) on debt securities |
|
|
(7) |
|
|
1 |
|
|
(6) |
|
Retirement benefits adjustment: |
|
|
|
|
|
|
|
|
|
|
Net actuarial gain (loss) and prior service credit (cost) |
|
|
(56) |
|
|
14 |
|
|
(42) |
|
Reclassification to Other operating expenses through amortization of: |
|
|
|
|
|
|
|
|
|
|
Actuarial (gain) loss |
|
|
(24) |
|
|
6 |
|
|
(18) |
|
Prior service (credit) cost |
|
|
20 |
|
|
(5) |
|
|
15 |
|
Net unrealized gain (loss) on retirement benefits adjustment |
|
|
(60) |
|
|
15 |
|
|
(45) |
|
Total other comprehensive income (loss) |
|
$ |
245 |
|
$ |
19 |
|
$ |
264 |
|
|
|
Before |
|
Tax |
|
After |
|
|||
|
|
Tax |
|
(Expense) |
|
Tax |
|
|||
Three Months Ended April 27, 2025 |
|
Amount |
|
Credit |
|
Amount |
|
|||
Cumulative translation adjustment |
|
$ |
749 |
|
$ |
(5) |
|
$ |
744 |
|
Unrealized gain (loss) on derivatives: |
|
|
|
|
|
|
|
|
|
|
Unrealized hedging gain (loss) |
|
|
(11) |
|
|
3 |
|
|
(8) |
|
Net unrealized gain (loss) on derivatives |
|
|
(11) |
|
|
3 |
|
|
(8) |
|
Unrealized gain (loss) on debt securities: |
|
|
|
|
|
|
|
|
|
|
Unrealized holding gain (loss) |
|
|
30 |
|
|
(8) |
|
|
22 |
|
Reclassification of realized (gain) loss to Other income |
|
|
2 |
|
|
|
|
|
2 |
|
Net unrealized gain (loss) on debt securities |
|
|
32 |
|
|
(8) |
|
|
24 |
|
Retirement benefits adjustment: |
|
|
|
|
|
|
|
|
|
|
Net actuarial gain (loss) |
|
|
6 |
|
|
(2) |
|
|
4 |
|
Reclassification to Other operating expenses through amortization of: |
|
|
|
|
|
|
|
|
|
|
Actuarial (gain) loss |
|
|
(14) |
|
|
3 |
|
|
(11) |
|
Prior service (credit) cost |
|
|
8 |
|
|
(1) |
|
|
7 |
|
Settlements |
|
|
3 |
|
|
(1) |
|
|
2 |
|
Net unrealized gain (loss) on retirement benefits adjustment |
|
|
3 |
|
|
(1) |
|
|
2 |
|
Total other comprehensive income (loss) |
|
$ |
773 |
|
$ |
(11) |
|
$ |
762 |
|
12
|
|
Before |
|
Tax |
|
After |
|
|||
|
|
Tax |
|
(Expense) |
|
Tax |
|
|||
Six Months Ended April 27, 2025 |
|
Amount |
|
Credit |
|
Amount |
|
|||
Cumulative translation adjustment |
|
$ |
300 |
|
$ |
(4) |
|
$ |
296 |
|
Unrealized gain (loss) on derivatives: |
|
|
|
|
|
|
|
|
|
|
Unrealized hedging gain (loss) |
|
|
(4) |
|
|
1 |
|
|
(3) |
|
Reclassification of realized (gain) loss to Interest expense |
|
|
(8) |
|
|
2 |
|
|
(6) |
|
Net unrealized gain (loss) on derivatives |
|
|
(12) |
|
|
3 |
|
|
(9) |
|
Unrealized gain (loss) on debt securities: |
|
|
|
|
|
|
|
|
|
|
Unrealized holding gain (loss) |
|
|
11 |
|
|
(4) |
|
|
7 |
|
Reclassification of realized (gain) loss to Other income |
|
|
2 |
|
|
|
|
|
2 |
|
Net unrealized gain (loss) on debt securities |
|
|
13 |
|
|
(4) |
|
|
9 |
|
Retirement benefits adjustment: |
|
|
|
|
|
|
|
|
|
|
Net actuarial gain (loss) |
|
|
12 |
|
|
(3) |
|
|
9 |
|
Reclassification to Other operating expenses through amortization of: |
|
|
|
|
|
|
|
|
|
|
Actuarial (gain) loss |
|
|
(25) |
|
|
6 |
|
|
(19) |
|
Prior service (credit) cost |
|
|
17 |
|
|
(4) |
|
|
13 |
|
Settlements |
|
|
3 |
|
|
(1) |
|
|
2 |
|
Net unrealized gain (loss) on retirement benefits adjustment |
|
|
7 |
|
|
(2) |
|
|
5 |
|
Total other comprehensive income (loss) |
|
$ |
308 |
|
$ |
(7) |
|
$ |
301 |
|
(5) EARNINGS PER SHARE
A reconciliation of basic and diluted earnings per share attributable to Deere & Company follows in millions, except per share amounts:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Net income attributable to Deere & Company |
|
$ |
1,773 |
|
$ |
1,804 |
|
$ |
2,429 |
|
$ |
2,673 |
|
Average shares outstanding |
|
|
270.1 |
|
|
271.1 |
|
|
270.2 |
|
|
271.3 |
|
Basic earnings per share |
|
$ |
6.57 |
|
$ |
6.65 |
|
$ |
8.99 |
|
$ |
9.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding |
|
|
270.1 |
|
|
271.1 |
|
|
270.2 |
|
|
271.3 |
|
Effect of dilutive stock options and unvested restricted stock units |
|
|
.7 |
|
|
.7 |
|
|
.7 |
|
|
.8 |
|
Total potential shares outstanding |
|
|
270.8 |
|
|
271.8 |
|
|
270.9 |
|
|
272.1 |
|
Diluted earnings per share |
|
$ |
6.55 |
|
$ |
6.64 |
|
$ |
8.97 |
|
$ |
9.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares excluded as antidilutive |
|
|
|
|
|
.2 |
|
|
.1 |
|
|
.2 |
|
(6) PENSION AND OTHER POSTRETIREMENT BENEFITS
We have several funded and unfunded defined benefit pension plans and other postretirement benefit (OPEB) plans. These plans cover U.S. employees and certain foreign employees. The components of net periodic pension and OPEB (benefit) cost excluding the service cost component are included in the line item “Other operating expenses.”
13
The components of net periodic pension and OPEB (benefit) cost consisted of the following:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Pensions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
57 |
|
$ |
60 |
|
$ |
116 |
|
$ |
125 |
|
Interest cost |
|
|
125 |
|
|
129 |
|
|
250 |
|
|
257 |
|
Expected return on plan assets |
|
|
(248) |
|
|
(244) |
|
|
(497) |
|
|
(498) |
|
Amortization of actuarial gain |
|
|
(3) |
|
|
(2) |
|
|
(5) |
|
|
(3) |
|
Amortization of prior service cost |
|
|
14 |
|
|
9 |
|
|
24 |
|
|
19 |
|
Settlements |
|
|
|
|
|
3 |
|
|
|
|
|
3 |
|
Net benefit |
|
$ |
(55) |
|
$ |
(45) |
|
$ |
(112) |
|
$ |
(97) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPEB: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
4 |
|
$ |
4 |
|
$ |
8 |
|
$ |
9 |
|
Interest cost |
|
|
38 |
|
|
38 |
|
|
75 |
|
|
78 |
|
Expected return on plan assets |
|
|
(41) |
|
|
(27) |
|
|
(82) |
|
|
(55) |
|
Amortization of actuarial gain |
|
|
(10) |
|
|
(12) |
|
|
(20) |
|
|
(22) |
|
Amortization of prior service credit |
|
|
|
|
|
(1) |
|
|
|
|
|
(2) |
|
Net (benefit) cost |
|
$ |
(9) |
|
$ |
2 |
|
$ |
(19) |
|
$ |
8 |
|
During the first six months of 2026, we contributed and expect to contribute the following amounts to our pension and OPEB plans:
|
|
Pensions |
|
OPEB |
|
||
Contributed |
|
$ |
48 |
|
$ |
95 |
|
Expected contributions remainder of the year |
|
|
52 |
|
|
55 |
|
(7) INCOME TAXES
The effective tax rate was 22.6% and 23.1% for the second quarter of 2026 and 2025, respectively, and 22.8% and 17.5% for the six months ended May 3, 2026, and April 27, 2025, respectively. The effective tax rate in the six months ended April 27, 2025 was impacted by favorable net discrete tax items (see Note 22).
(8) SEGMENT DATA
Our operations are organized and reported in four business segments: Production & Precision Agriculture, Small Agriculture & Turf, Construction & Forestry, and Financial Services. This presentation is consistent with how the chief operating decision maker, our Chief Executive Officer (CEO), who also serves as the Chairman of the Board, assesses the performance of the segments and makes decisions regarding resource allocations. Each segment has a group president responsible for managing financial performance and executing strategic initiatives.
| ● | Production & Precision Agriculture – PPA segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for production-scale growers of large grains, small grains, cotton, and sugarcane. |
| ● | Small Agriculture & Turf – SAT segment defines, develops, and delivers global equipment and technology solutions to unlock customer value for dairy and livestock producers, high-value and small acreage crop producers, and turf and utility customers. |
| ● | Construction & Forestry – CF segment defines, develops, and delivers a broad range of machines and technology solutions organized along the earthmoving, forestry, and roadbuilding production systems. |
The products and services produced by the segments above are primarily marketed through independent retail dealer networks and major retail outlets. For roadbuilding products in certain markets outside the U.S. and Canada, the products are sold through company-owned sales and service subsidiaries.
| ● | Financial Services – FS segment finances sales and leases by John Deere dealers of new and used production and precision agriculture equipment, small agriculture and turf equipment, and construction and forestry equipment. In addition, the FS segment provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts, and offers extended equipment warranties. |
The CEO evaluates the performance of the business segments based on operating profit, which for FS includes interest income and interest expense, and on identifiable segment operating assets. Segment operating profit and operating assets are measured using accounting policies consistent with those applied in the consolidated financial statements. Because of integrated manufacturing operations and common administrative and marketing support, a substantial number of allocations must be made to determine operating segment data.
14
Intersegment transactions are primarily made between the FS segment and PPA, SAT, and CF segments, and are recognized at current market prices.
Total identifiable assets assigned to the equipment operations operating segments consist of assets actively managed by those segments, including trade receivables, inventories, property and equipment, other intangible assets, and certain other assets. Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets. Financial Services assets include cash and cash equivalents, retirement benefits, and deferred income tax assets that are managed by the segment.
Information relating to operations by operating segment was as follows:
Three Months Ended May 3, 2026 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
External net sales |
|
$ |
4,503 |
|
$ |
3,485 |
|
$ |
3,790 |
|
|
|
|
$ |
11,778 |
|
External finance and interest income |
|
|
10 |
|
|
6 |
|
|
3 |
|
$ |
1,243 |
|
|
1,262 |
|
External other income |
|
|
60 |
|
|
41 |
|
|
50 |
|
|
123 |
|
|
274 |
|
Intersegment income |
|
|
39 |
|
|
8 |
|
|
11 |
|
|
143 |
|
|
201 |
|
Total segment net sales and revenues |
|
|
4,612 |
|
|
3,540 |
|
|
3,854 |
|
|
1,509 |
|
|
13,515 |
|
Cost of sales |
|
|
(3,100) |
|
|
(2,377) |
|
|
(2,800) |
|
|
|
|
|
(8,277) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(649) |
|
|
(649) |
|
Other segment items* |
|
|
(806) |
|
|
(444) |
|
|
(493) |
|
|
(609) |
|
|
(2,352) |
|
Segment operating profit |
|
$ |
706 |
|
$ |
719 |
|
$ |
561 |
|
$ |
251 |
|
$ |
2,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 3, 2026 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
External net sales |
|
$ |
7,666 |
|
$ |
5,653 |
|
$ |
6,460 |
|
|
|
|
$ |
19,779 |
|
External finance and interest income |
|
|
22 |
|
|
17 |
|
|
8 |
|
$ |
2,504 |
|
|
2,551 |
|
External other income |
|
|
117 |
|
|
78 |
|
|
98 |
|
|
247 |
|
|
540 |
|
Intersegment income |
|
|
93 |
|
|
17 |
|
|
18 |
|
|
246 |
|
|
374 |
|
Total segment net sales and revenues |
|
|
7,898 |
|
|
5,765 |
|
|
6,584 |
|
|
2,997 |
|
|
23,244 |
|
Cost of sales |
|
|
(5,576) |
|
|
(4,011) |
|
|
(4,981) |
|
|
|
|
|
(14,568) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(1,313) |
|
|
(1,313) |
|
Other segment items* |
|
|
(1,477) |
|
|
(838) |
|
|
(905) |
|
|
(1,132) |
|
|
(4,352) |
|
Segment operating profit |
|
$ |
845 |
|
$ |
916 |
|
$ |
698 |
|
$ |
552 |
|
$ |
3,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 27, 2025 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
External net sales |
|
$ |
5,230 |
|
$ |
2,994 |
|
$ |
2,947 |
|
|
|
|
$ |
11,171 |
|
External finance and interest income |
|
|
8 |
|
|
6 |
|
|
4 |
|
$ |
1,276 |
|
|
1,294 |
|
External other income |
|
|
49 |
|
|
33 |
|
|
45 |
|
|
109 |
|
|
236 |
|
Intersegment income |
|
|
47 |
|
|
11 |
|
|
|
|
|
116 |
|
|
174 |
|
Total segment net sales and revenues |
|
|
5,334 |
|
|
3,044 |
|
|
2,996 |
|
|
1,501 |
|
|
12,875 |
|
Cost of sales |
|
|
(3,398) |
|
|
(2,045) |
|
|
(2,174) |
|
|
|
|
|
(7,617) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(721) |
|
|
(721) |
|
Other segment items* |
|
|
(788) |
|
|
(425) |
|
|
(443) |
|
|
(573) |
|
|
(2,229) |
|
Segment operating profit |
|
$ |
1,148 |
|
$ |
574 |
|
$ |
379 |
|
$ |
207 |
|
$ |
2,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended April 27, 2025 |
|
PPA |
|
SAT |
|
CF |
|
FS |
|
Total |
|
|||||
External net sales |
|
$ |
8,297 |
|
$ |
4,742 |
|
$ |
4,941 |
|
|
|
|
$ |
17,980 |
|
External finance and interest income |
|
|
17 |
|
|
15 |
|
|
6 |
|
$ |
2,639 |
|
|
2,677 |
|
External other income |
|
|
105 |
|
|
66 |
|
|
90 |
|
|
217 |
|
|
478 |
|
Intersegment income |
|
|
105 |
|
|
16 |
|
|
2 |
|
|
218 |
|
|
341 |
|
Total segment net sales and revenues |
|
|
8,524 |
|
|
4,839 |
|
|
5,039 |
|
|
3,074 |
|
|
21,476 |
|
Cost of sales |
|
|
(5,563) |
|
|
(3,341) |
|
|
(3,758) |
|
|
|
|
|
(12,662) |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(1,487) |
|
|
(1,487) |
|
Other segment items* |
|
|
(1,475) |
|
|
(800) |
|
|
(837) |
|
|
(1,114) |
|
|
(4,226) |
|
Segment operating profit |
|
$ |
1,486 |
|
$ |
698 |
|
$ |
444 |
|
$ |
473 |
|
$ |
3,101 |
|
* Other segment items for PPA, SAT, and CF include selling, administrative and general expenses; advertising; engineering; research and development; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses. Financial Services other segment items include selling, administrative and general expenses; foreign exchange gains and losses; equity in income (loss) of unconsolidated affiliates; and other miscellaneous operating expenses.
15
A reconciliation of segment net sales and revenues and segment operating profit to consolidated net sales and revenues and consolidated net income follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Reconciliation of net sales and revenues |
|
|
|
|
|
|
|
|
|
|
|||
Segment net sales and revenues |
|
$ |
13,515 |
|
$ |
12,875 |
|
$ |
23,244 |
|
$ |
21,476 |
|
External other income* |
|
|
55 |
|
|
62 |
|
|
111 |
|
|
137 |
|
Elimination of intersegment revenues |
|
|
(201) |
|
|
(174) |
|
|
(374) |
|
|
(341) |
|
Net sales and revenues |
|
$ |
13,369 |
|
$ |
12,763 |
|
$ |
22,981 |
|
$ |
21,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income |
|
|
|
|
|
|
|
|
|
|
|||
Segment operating profit |
|
$ |
2,237 |
|
$ |
2,308 |
|
$ |
3,011 |
|
$ |
3,101 |
|
Interest income – excluding FS |
|
|
91 |
|
|
90 |
|
|
183 |
|
|
178 |
|
Interest expense – excluding FS |
|
|
(102) |
|
|
(94) |
|
|
(195) |
|
|
(178) |
|
Pension and OPEB benefit, excluding service cost component |
|
|
125 |
|
|
107 |
|
|
255 |
|
|
223 |
|
Corporate other – net** |
|
|
(63) |
|
|
(71) |
|
|
(115) |
|
|
(91) |
|
Income taxes |
|
|
(518) |
|
|
(539) |
|
|
(714) |
|
|
(566) |
|
Net income |
|
$ |
1,770 |
|
$ |
1,801 |
|
$ |
2,425 |
|
$ |
2,667 |
|
* External other income includes corporate investment income, corporate interest income, and other miscellaneous revenue items that are included in “Finance and interest income” and “Other income” on the statements of consolidated income.
** Corporate other – net includes certain foreign exchange gains and losses, certain investment income, and certain corporate administrative and general expenses.
Additional operating segment information was as follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Depreciation* and amortization expense |
|
||||||||||||
PPA |
|
$ |
167 |
|
$ |
168 |
|
$ |
338 |
|
$ |
334 |
|
SAT |
|
|
76 |
|
|
67 |
|
|
151 |
|
|
132 |
|
CF |
|
|
104 |
|
|
89 |
|
|
200 |
|
|
177 |
|
FS |
|
|
272 |
|
|
264 |
|
|
546 |
|
|
529 |
|
Intersegment |
|
|
(25) |
|
|
(33) |
|
|
(51) |
|
|
(68) |
|
Total |
|
$ |
594 |
|
$ |
555 |
|
$ |
1,184 |
|
$ |
1,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital additions |
|
||||||||||||
PPA |
|
$ |
99 |
|
$ |
112 |
|
$ |
173 |
|
$ |
199 |
|
SAT |
|
|
48 |
|
|
38 |
|
|
80 |
|
|
73 |
|
CF |
|
|
73 |
|
|
75 |
|
|
121 |
|
|
153 |
|
FS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
220 |
|
$ |
225 |
|
$ |
374 |
|
$ |
425 |
|
* Depreciation includes depreciation for equipment on operating leases.
16
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Total Assets |
|
|
|
|
|
|
|
|
|
|
PPA |
|
$ |
9,091 |
|
$ |
8,787 |
|
$ |
8,909 |
|
SAT |
|
|
4,420 |
|
|
3,987 |
|
|
4,234 |
|
CF |
|
|
8,522 |
|
|
7,792 |
|
|
7,753 |
|
FS |
|
|
69,549 |
|
|
70,021 |
|
|
70,569 |
|
Corporate* |
|
|
15,419 |
|
|
15,409 |
|
|
14,838 |
|
Total Assets |
|
$ |
107,001 |
|
$ |
105,996 |
|
$ |
106,303 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity investment in unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|
PPA |
|
$ |
10 |
|
$ |
11 |
|
$ |
12 |
|
SAT |
|
|
37 |
|
|
37 |
|
|
59 |
|
CF |
|
|
|
|
|
|
|
|
|
|
FS |
|
|
470 |
|
|
462 |
|
|
425 |
|
Total |
|
$ |
517 |
|
$ |
510 |
|
$ |
496 |
|
* Corporate assets are managed on a consolidated basis, including cash and cash equivalents, retirement benefit net assets, goodwill, and deferred income tax assets.
(9) FINANCING RECEIVABLES
We monitor the credit quality of financing receivables based on delinquency status, defined as follows:
| ● | Past due balances represent any payments 30 days or more past the due date. |
| ● | Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are 90 days delinquent. |
| ● | Write-offs generally occur when receivables are 120 days delinquent. In these situations, the estimated uncollectible amount is written off to the allowance for credit losses. |
The credit quality and aging analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows:
|
|
May 3, 2026 |
|
||||||||||||||||||||||
|
|
2026 |
|
2025 |
|
2024 |
|
2023 |
|
2022 |
|
Prior |
|
Revolving Charge Accounts |
|
Total |
|
||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
5,517 |
|
$ |
9,749 |
|
$ |
6,657 |
|
$ |
4,001 |
|
$ |
2,133 |
|
$ |
861 |
|
$ |
4,341 |
|
$ |
33,259 |
|
30-59 days past due |
|
|
31 |
|
|
106 |
|
|
74 |
|
|
48 |
|
|
24 |
|
|
10 |
|
|
31 |
|
|
324 |
|
60-89 days past due |
|
|
4 |
|
|
44 |
|
|
40 |
|
|
23 |
|
|
9 |
|
|
4 |
|
|
10 |
|
|
134 |
|
90+ days past due |
|
|
|
|
|
2 |
|
|
2 |
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
6 |
|
Non-performing |
|
|
5 |
|
|
101 |
|
|
124 |
|
|
92 |
|
|
51 |
|
|
34 |
|
|
58 |
|
|
465 |
|
Construction and forestry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
1,789 |
|
|
2,622 |
|
|
1,571 |
|
|
715 |
|
|
272 |
|
|
56 |
|
|
118 |
|
|
7,143 |
|
30-59 days past due |
|
|
23 |
|
|
56 |
|
|
39 |
|
|
24 |
|
|
10 |
|
|
3 |
|
|
4 |
|
|
159 |
|
60-89 days past due |
|
|
11 |
|
|
25 |
|
|
23 |
|
|
17 |
|
|
3 |
|
|
2 |
|
|
2 |
|
|
83 |
|
90+ days past due |
|
|
|
|
|
1 |
|
|
2 |
|
|
1 |
|
|
3 |
|
|
|
|
|
|
|
|
7 |
|
Non-performing |
|
|
6 |
|
|
70 |
|
|
94 |
|
|
60 |
|
|
27 |
|
|
18 |
|
|
2 |
|
|
277 |
|
Total retail customer receivables |
|
$ |
7,386 |
|
$ |
12,776 |
|
$ |
8,626 |
|
$ |
4,981 |
|
$ |
2,532 |
|
$ |
990 |
|
$ |
4,566 |
|
$ |
41,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-offs for the six months ended May 3, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
$ |
1 |
|
$ |
12 |
|
$ |
17 |
|
$ |
13 |
|
$ |
6 |
|
$ |
3 |
|
$ |
45 |
|
$ |
97 |
|
Construction and forestry |
|
|
|
|
|
15 |
|
|
16 |
|
|
13 |
|
|
4 |
|
|
2 |
|
|
3 |
|
|
53 |
|
Total |
|
$ |
1 |
|
$ |
27 |
|
$ |
33 |
|
$ |
26 |
|
$ |
10 |
|
$ |
5 |
|
$ |
48 |
|
$ |
150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
November 2, 2025 |
|
||||||||||||||||||||||
|
|
2025 |
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
Prior |
|
Revolving Charge Accounts |
|
Total |
|
||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
12,380 |
|
$ |
8,389 |
|
$ |
5,228 |
|
$ |
3,003 |
|
$ |
1,310 |
|
$ |
281 |
|
$ |
4,608 |
|
$ |
35,199 |
|
30-59 days past due |
|
|
36 |
|
|
73 |
|
|
59 |
|
|
38 |
|
|
15 |
|
|
7 |
|
|
37 |
|
|
265 |
|
60-89 days past due |
|
|
14 |
|
|
37 |
|
|
28 |
|
|
13 |
|
|
8 |
|
|
2 |
|
|
10 |
|
|
112 |
|
90+ days past due |
|
|
1 |
|
|
2 |
|
|
|
|
|
1 |
|
|
2 |
|
|
|
|
|
|
|
|
6 |
|
Non-performing |
|
|
41 |
|
|
109 |
|
|
98 |
|
|
57 |
|
|
30 |
|
|
17 |
|
|
14 |
|
|
366 |
|
Construction and forestry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
3,175 |
|
|
2,038 |
|
|
1,034 |
|
|
463 |
|
|
130 |
|
|
12 |
|
|
124 |
|
|
6,976 |
|
30-59 days past due |
|
|
42 |
|
|
47 |
|
|
31 |
|
|
12 |
|
|
4 |
|
|
1 |
|
|
5 |
|
|
142 |
|
60-89 days past due |
|
|
21 |
|
|
17 |
|
|
12 |
|
|
8 |
|
|
1 |
|
|
1 |
|
|
2 |
|
|
62 |
|
90+ days past due |
|
|
1 |
|
|
6 |
|
|
3 |
|
|
2 |
|
|
|
|
|
1 |
|
|
|
|
|
13 |
|
Non-performing |
|
|
31 |
|
|
94 |
|
|
78 |
|
|
38 |
|
|
19 |
|
|
7 |
|
|
1 |
|
|
268 |
|
Total retail customer receivables |
|
$ |
15,742 |
|
$ |
10,812 |
|
$ |
6,571 |
|
$ |
3,635 |
|
$ |
1,519 |
|
$ |
329 |
|
$ |
4,801 |
|
$ |
43,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-offs for the twelve months ended November 2, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
$ |
6 |
|
$ |
32 |
|
$ |
34 |
|
$ |
21 |
|
$ |
9 |
|
$ |
7 |
|
$ |
102 |
|
$ |
211 |
|
Construction and forestry |
|
|
9 |
|
|
38 |
|
|
29 |
|
|
12 |
|
|
3 |
|
|
3 |
|
|
7 |
|
|
101 |
|
Total |
|
$ |
15 |
|
$ |
70 |
|
$ |
63 |
|
$ |
33 |
|
$ |
12 |
|
$ |
10 |
|
$ |
109 |
|
$ |
312 |
|
|
|
April 27, 2025 |
|
||||||||||||||||||||||
|
|
2025 |
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
Prior |
|
Revolving Charge Accounts |
|
Total |
|
||||||||
Retail customer receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
5,772 |
|
$ |
10,981 |
|
$ |
6,652 |
|
$ |
4,014 |
|
$ |
1,981 |
|
$ |
654 |
|
$ |
3,893 |
|
$ |
33,947 |
|
30-59 days past due |
|
|
26 |
|
|
121 |
|
|
77 |
|
|
45 |
|
|
22 |
|
|
9 |
|
|
30 |
|
|
330 |
|
60-89 days past due |
|
|
11 |
|
|
53 |
|
|
32 |
|
|
18 |
|
|
8 |
|
|
4 |
|
|
13 |
|
|
139 |
|
90+ days past due |
|
|
|
|
|
1 |
|
|
2 |
|
|
1 |
|
|
3 |
|
|
|
|
|
|
|
|
7 |
|
Non-performing |
|
|
4 |
|
|
102 |
|
|
111 |
|
|
73 |
|
|
45 |
|
|
29 |
|
|
86 |
|
|
450 |
|
Construction and forestry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
1,561 |
|
|
2,583 |
|
|
1,425 |
|
|
732 |
|
|
266 |
|
|
46 |
|
|
109 |
|
|
6,722 |
|
30-59 days past due |
|
|
24 |
|
|
70 |
|
|
47 |
|
|
21 |
|
|
9 |
|
|
3 |
|
|
5 |
|
|
179 |
|
60-89 days past due |
|
|
8 |
|
|
27 |
|
|
17 |
|
|
8 |
|
|
3 |
|
|
|
|
|
2 |
|
|
65 |
|
90+ days past due |
|
|
|
|
|
6 |
|
|
1 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
10 |
|
Non-performing |
|
|
6 |
|
|
86 |
|
|
93 |
|
|
55 |
|
|
28 |
|
|
12 |
|
|
2 |
|
|
282 |
|
Total retail customer receivables |
|
$ |
7,412 |
|
$ |
14,030 |
|
$ |
8,457 |
|
$ |
4,970 |
|
$ |
2,365 |
|
$ |
757 |
|
$ |
4,140 |
|
$ |
42,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-offs for the six months ended April 27, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
$ |
1 |
|
$ |
16 |
|
$ |
21 |
|
$ |
12 |
|
$ |
4 |
|
$ |
5 |
|
$ |
49 |
|
$ |
108 |
|
Construction and forestry |
|
|
|
|
|
18 |
|
|
17 |
|
|
7 |
|
|
2 |
|
|
1 |
|
|
4 |
|
|
49 |
|
Total |
|
$ |
1 |
|
$ |
34 |
|
$ |
38 |
|
$ |
19 |
|
$ |
6 |
|
$ |
6 |
|
$ |
53 |
|
$ |
157 |
|
18
The credit quality and aging analysis of wholesale receivables was as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Wholesale receivables: |
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
|
|
|
|
|
|
|
|
|
|
Current |
|
$ |
6,141 |
|
$ |
6,731 |
|
$ |
7,372 |
|
30+ days past due |
|
|
|
|
|
|
|
|
1 |
|
Non-performing |
|
|
4 |
|
|
|
|
|
1 |
|
Construction and forestry |
|
|
|
|
|
|
|
|
|
|
Current |
|
|
1,281 |
|
|
1,524 |
|
|
1,547 |
|
30+ days past due |
|
|
|
|
|
|
|
|
|
|
Non-performing |
|
|
|
|
|
|
|
|
|
|
Total wholesale receivables |
|
$ |
7,426 |
|
$ |
8,255 |
|
$ |
8,921 |
|
An analysis of the allowance for credit losses and investment in financing receivables follows:
|
|
Retail Notes |
|
Revolving |
|
|
|
|
|
|
|
||
|
|
& Financing |
|
Charge |
|
Wholesale |
|
|
|
|
|||
|
|
Leases |
|
Accounts |
|
Receivables |
|
Total |
|
||||
Three Months Ended May 3, 2026 |
|
|
|
|
|||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period balance |
|
$ |
245 |
|
$ |
7 |
|
$ |
2 |
|
$ |
254 |
|
Provision |
|
|
62 |
|
|
27 |
|
|
|
|
|
89 |
|
Write-offs |
|
|
(55) |
|
|
(38) |
|
|
|
|
|
(93) |
|
Recoveries |
|
|
5 |
|
|
12 |
|
|
|
|
|
17 |
|
End of period balance |
|
$ |
257 |
|
$ |
8 |
|
$ |
2 |
|
$ |
267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 3, 2026 |
|
|
|
||||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period balance |
|
$ |
249 |
|
$ |
7 |
|
$ |
2 |
|
$ |
258 |
|
Provision |
|
|
101 |
|
|
26 |
|
|
|
|
|
127 |
|
Write-offs |
|
|
(102) |
|
|
(48) |
|
|
|
|
|
(150) |
|
Recoveries |
|
|
9 |
|
|
23 |
|
|
|
|
|
32 |
|
End of period balance |
|
$ |
257 |
|
$ |
8 |
|
$ |
2 |
|
$ |
267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period balance |
|
$ |
37,291 |
|
$ |
4,566 |
|
$ |
7,426 |
|
$ |
49,283 |
|
|
|
Retail Notes |
|
Revolving |
|
|
|
|
|
|
|
||
|
|
& Financing |
|
Charge |
|
Wholesale |
|
|
|
|
|||
|
|
Leases |
|
Accounts |
|
Receivables |
|
Total |
|
||||
Three Months Ended April 27, 2025 |
|
|
|
|
|||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period balance |
|
$ |
240 |
|
$ |
6 |
|
$ |
2 |
|
$ |
248 |
|
Provision |
|
|
55 |
|
|
39 |
|
|
|
|
|
94 |
|
Write-offs |
|
|
(56) |
|
|
(40) |
|
|
|
|
|
(96) |
|
Recoveries |
|
|
3 |
|
|
8 |
|
|
|
|
|
11 |
|
Translation adjustments |
|
|
1 |
|
|
|
|
|
|
|
|
1 |
|
End of period balance |
|
$ |
243 |
|
$ |
13 |
|
$ |
2 |
|
$ |
258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended April 27, 2025 |
|
|
|
||||||||||
Allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period balance |
|
$ |
219 |
|
$ |
8 |
|
$ |
2 |
|
$ |
229 |
|
Provision |
|
|
122 |
|
|
41 |
|
|
|
|
|
163 |
|
Write-offs |
|
|
(104) |
|
|
(53) |
|
|
|
|
|
(157) |
|
Recoveries |
|
|
6 |
|
|
17 |
|
|
|
|
|
23 |
|
End of period balance |
|
$ |
243 |
|
$ |
13 |
|
$ |
2 |
|
$ |
258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period balance |
|
$ |
37,991 |
|
$ |
4,140 |
|
$ |
8,921 |
|
$ |
51,052 |
|
19
The allowance for credit losses on retail notes and financing lease receivables increased slightly in the second quarter and first six months of 2026, primarily due to higher expected losses on construction retail accounts.
Modifications
We occasionally grant contractual modifications to customers experiencing financial difficulties. Before offering a modification, we evaluate the ability of the customer to meet the modified payment terms. Finance charges continue to accrue during the deferral or extension period except for modifications related to bankruptcy proceedings. Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers. Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan.
The ending amortized cost of financing receivables modified with borrowers experiencing financial difficulty was as follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Modified financing receivables |
|
$ |
54 |
|
$ |
48 |
|
$ |
117 |
|
$ |
75 |
|
Percent of financing receivables portfolio |
|
|
0.11% |
|
|
0.09% |
|
|
0.24% |
|
|
0.15% |
|
Modifications offered include payment deferrals, term extensions, or a combination thereof. The weighted-average effects for contract modifications were as follows in months:
|
|
Six Months Ended |
|
||
|
|
May 3 |
|
April 27 |
|
|
|
2026 |
|
2025 |
|
Payment deferral |
|
7 |
|
8 |
|
Term extension |
|
11 |
|
11 |
|
Combination modifications: |
|
|
|
|
|
Payment deferral |
|
9 |
|
5 |
|
Term extension |
|
18 |
|
8 |
|
We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty. The ending amortized cost and performance of financing receivables modified during the prior twelve months ended May 3, 2026, and April 27, 2025, were as follows:
|
|
May 3 |
|
April 27 |
|
||
|
|
2026 |
|
2025 |
|
||
Current |
|
$ |
174 |
|
$ |
100 |
|
30-59 days past due |
|
|
4 |
|
|
6 |
|
60-89 days past due |
|
|
4 |
|
|
2 |
|
90+ days past due |
|
|
3 |
|
|
1 |
|
Non-performing |
|
|
21 |
|
|
14 |
|
Total |
|
$ |
206 |
|
$ |
123 |
|
Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months and the six months ended May 3, 2026. In addition, at May 3, 2026, commitments to provide additional financing to these customers were not significant.
(10) SECURITIZATION OF FINANCING RECEIVABLES
Our funding strategy includes receivable securitizations, which allows us to receive cash for financing receivables immediately. While these securitization programs are administered in various forms, they are accomplished in the following basic steps:
| 1. | We transfer financing receivables into a bankruptcy-remote special purpose entity (SPE). |
| 2. | The SPE issues debt to investors. The debt is secured by the financing receivables. |
| 3. | Investors are paid back based on cash receipts from the financing receivables. |
As part of step 1, these receivables are legally isolated from the claims of our general creditors. This ensures cash receipts from the financing receivables are accessible to pay back securitization program investors. The structure of these transactions does not meet the accounting criteria for a sale of receivables. As a result, they are accounted for as secured borrowings. The receivables and borrowings remain on our balance sheet and are separately reported as “Financing receivables securitized – net” and “Short-term securitization borrowings,” respectively. SPEs are consolidated as VIEs when we have the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs.
20
The components of securitization programs were as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Financing receivables securitized (retail notes) |
|
$ |
6,138 |
|
$ |
6,872 |
|
$ |
7,812 |
|
Allowance for credit losses |
|
|
(38) |
|
|
(41) |
|
|
(47) |
|
Other assets (primarily restricted cash) |
|
|
161 |
|
|
171 |
|
|
183 |
|
Total restricted securitized assets |
|
$ |
6,261 |
|
$ |
7,002 |
|
$ |
7,948 |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term securitization borrowings |
|
$ |
5,929 |
|
$ |
6,596 |
|
$ |
7,562 |
|
Accrued interest on borrowings |
|
|
13 |
|
|
15 |
|
|
12 |
|
Total liabilities related to restricted securitized assets |
|
$ |
5,942 |
|
$ |
6,611 |
|
$ |
7,574 |
|
(11) INVENTORIES
A majority of inventories owned by us are valued at cost on the “last-in, first-out” (LIFO) basis. If all inventories valued on a LIFO basis had been valued on a “first-in, first-out” (FIFO) basis, the estimated inventories by major classification would have been as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Raw materials and supplies |
|
$ |
3,667 |
|
$ |
3,402 |
|
$ |
3,438 |
|
Work-in-process |
|
|
1,079 |
|
|
956 |
|
|
1,056 |
|
Finished goods and parts |
|
|
6,119 |
|
|
5,769 |
|
|
5,615 |
|
Total FIFO value |
|
|
10,865 |
|
|
10,127 |
|
|
10,109 |
|
Excess of FIFO over LIFO |
|
|
2,677 |
|
|
2,721 |
|
|
2,239 |
|
Inventories |
|
$ |
8,188 |
|
$ |
7,406 |
|
$ |
7,870 |
|
(12) GOODWILL AND OTHER INTANGIBLE ASSETS – NET
The changes in amounts of goodwill by operating segments were as follows:
|
|
PPA |
|
SAT |
|
CF |
|
Total |
|
||||
Goodwill at October 27, 2024 |
|
$ |
701 |
|
$ |
365 |
|
$ |
2,893 |
|
$ |
3,959 |
|
Translation adjustments |
|
|
8 |
|
|
3 |
|
|
124 |
|
|
135 |
|
Goodwill at April 27, 2025 |
|
$ |
709 |
|
$ |
368 |
|
$ |
3,017 |
|
$ |
4,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill at November 2, 2025 |
|
$ |
744 |
|
$ |
393 |
|
$ |
3,051 |
|
$ |
4,188 |
|
Acquisition (Note 21) |
|
|
|
|
|
|
|
|
286 |
|
|
286 |
|
Translation adjustments |
|
|
5 |
|
|
1 |
|
|
33 |
|
|
39 |
|
Goodwill at May 3, 2026 |
|
$ |
749 |
|
$ |
394 |
|
$ |
3,370 |
|
$ |
4,513 |
|
The components of other intangible assets were as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Customer lists and relationships |
|
$ |
556 |
|
$ |
482 |
|
$ |
517 |
|
Technology, patents, trademarks, and other |
|
|
1,600 |
|
|
1,518 |
|
|
1,481 |
|
Total at cost |
|
|
2,156 |
|
|
2,000 |
|
|
1,998 |
|
Less accumulated amortization: |
|
|
|
|
|
|
|
|
|
|
Customer lists and relationships |
|
|
(277) |
|
|
(260) |
|
|
(249) |
|
Technology, patents, trademarks, and other |
|
|
(904) |
|
|
(848) |
|
|
(785) |
|
Total accumulated amortization |
|
|
(1,181) |
|
|
(1,108) |
|
|
(1,034) |
|
Other intangible assets – net |
|
$ |
975 |
|
$ |
892 |
|
$ |
964 |
|
The amortization expense of other intangible assets in the second quarter and the first six months of 2026 was $36 and $70, respectively, and for the second quarter and the first six months of 2025 was $37 and $78, respectively. The estimated amortization expense for the next five years is as follows: remainder of 2026 – $79, 2027 – $157, 2028 – $121, 2029 – $102, 2030 – $85, and 2031 – $77.
21
(13) SHORT-TERM BORROWINGS
Short-term borrowings were as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Commercial paper |
|
$ |
6,030 |
|
$ |
4,218 |
|
$ |
6,586 |
|
Notes payable to banks |
|
|
681 |
|
|
651 |
|
|
395 |
|
Finance lease obligations due within one year |
|
|
41 |
|
|
39 |
|
|
39 |
|
Long-term borrowings due within one year |
|
|
8,880 |
|
|
8,888 |
|
|
8,928 |
|
Short-term borrowings |
|
$ |
15,632 |
|
$ |
13,796 |
|
$ |
15,948 |
|
(14) ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Accounts payable: |
|
|
|
|
|
|
|
|
|
|
Trade payables |
|
$ |
3,304 |
|
$ |
2,985 |
|
$ |
2,785 |
|
Dividends payable |
|
|
442 |
|
|
443 |
|
|
443 |
|
Operating lease liabilities |
|
|
340 |
|
|
314 |
|
|
280 |
|
Deposits withheld from dealers and merchants |
|
|
137 |
|
|
143 |
|
|
144 |
|
Payables to unconsolidated affiliates |
|
|
29 |
|
|
10 |
|
|
11 |
|
Other |
|
|
212 |
|
|
191 |
|
|
225 |
|
Accrued expenses: |
|
|
|
|
|
|
|
|
|
|
Employee benefits |
|
|
799 |
|
|
1,577 |
|
|
1,164 |
|
Product warranties |
|
|
1,336 |
|
|
1,259 |
|
|
1,297 |
|
Accrued taxes |
|
|
1,090 |
|
|
1,155 |
|
|
1,224 |
|
Extended warranty premium |
|
|
1,210 |
|
|
1,202 |
|
|
1,194 |
|
Dealer sales incentives |
|
|
541 |
|
|
828 |
|
|
468 |
|
Unearned revenue (contractual liability) |
|
|
945 |
|
|
837 |
|
|
895 |
|
Unearned operating lease revenue |
|
|
553 |
|
|
534 |
|
|
524 |
|
Accrued interest |
|
|
558 |
|
|
524 |
|
|
525 |
|
Derivative liabilities |
|
|
538 |
|
|
389 |
|
|
614 |
|
Parts return liability |
|
|
436 |
|
|
445 |
|
|
420 |
|
Other |
|
|
1,183 |
|
|
1,073 |
|
|
1,132 |
|
Accounts payable and accrued expenses |
|
$ |
13,653 |
|
$ |
13,909 |
|
$ |
13,345 |
|
Amounts are presented net of eliminations, which primarily consist of dealer sales incentives with a right of set-off against trade receivables of $2,012 at May 3, 2026, $1,892 at November 2, 2025, and $2,059 at April 27, 2025. Other eliminations were made for accrued taxes and other accrued expenses.
22
(15) LONG-TERM BORROWINGS
Long-term borrowings were as follows in millions:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Underwritten term debt: |
|
|
|
|
|
|
|
|
|
|
U.S. dollar notes and debentures: |
|
|
|
|
|
|
|
|
|
|
6.55% debentures due 2028 |
|
$ |
200 |
|
$ |
200 |
|
$ |
200 |
|
5.375% notes due 2029 |
|
|
500 |
|
|
500 |
|
|
500 |
|
3.10% notes due 2030 |
|
|
700 |
|
|
700 |
|
|
700 |
|
8.10% debentures due 2030 |
|
|
250 |
|
|
250 |
|
|
250 |
|
4.15% notes due 2030* |
|
|
493 |
|
|
498 |
|
|
|
|
7.125% notes due 2031 |
|
|
300 |
|
|
300 |
|
|
300 |
|
5.45% notes due 2035 |
|
|
1,250 |
|
|
1,250 |
|
|
1,250 |
|
3.90% notes due 2042 |
|
|
1,250 |
|
|
1,250 |
|
|
1,250 |
|
2.875% notes due 2049 |
|
|
500 |
|
|
500 |
|
|
500 |
|
3.75% notes due 2050 |
|
|
850 |
|
|
850 |
|
|
850 |
|
5.70% notes due 2055 |
|
|
750 |
|
|
750 |
|
|
750 |
|
Euro notes: |
|
|
|
|
|
|
|
|
|
|
1.85% notes due 2028 (€600 principal) |
|
|
704 |
|
|
694 |
|
|
683 |
|
2.20% notes due 2032 (€600 principal) |
|
|
704 |
|
|
694 |
|
|
683 |
|
1.65% notes due 2039 (€650 principal) |
|
|
763 |
|
|
752 |
|
|
740 |
|
Serial issuances: |
|
|
|
|
|
|
|
|
|
|
Medium-term notes* |
|
|
32,683 |
|
|
34,041 |
|
|
33,942 |
|
Other notes and finance lease obligations |
|
|
509 |
|
|
470 |
|
|
372 |
|
Less: debt issuance costs and debt discounts |
|
|
(145) |
|
|
(155) |
|
|
(159) |
|
Long-term borrowings |
|
$ |
42,261 |
|
$ |
43,544 |
|
$ |
42,811 |
|
* Includes fair value hedge adjustments related to derivatives.
The 4.15% notes due 2030 listed above were issued on October 9, 2025, by Deere Funding Canada Corporation (DFCC), an indirect wholly-owned subsidiary. These notes are fully and unconditionally guaranteed on a senior unsecured basis by Deere & Company and, therefore, rank equally with all our outstanding notes and debentures. DFCC financial results were not material to our condensed consolidated financial statements or results of operations, and as a result, we have elected to exclude summarized financial information.
Medium-term notes due through 2034 are primarily offered by prospectus and issued at fixed and variable rates. All outstanding notes and debentures are senior unsecured borrowings and rank equally with each other.
The principal balances of the 4.15% notes due 2030 and medium-term notes were as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
4.15% notes due 2030 |
|
$ |
500 |
|
$ |
500 |
|
|
|
|
Medium-term notes |
|
|
32,956 |
|
|
34,241 |
|
$ |
34,241 |
|
(16) LEASES – LESSOR
We lease equipment manufactured or sold by us through John Deere Financial. Sales-type and direct financing leases are reported in “Financing receivables – net.” Operating leases are reported in “Equipment on operating leases – net.”
Lease revenues earned by us follow:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Sales-type and direct finance lease revenues |
|
$ |
43 |
|
$ |
44 |
|
$ |
88 |
|
$ |
90 |
|
Operating lease revenues |
|
|
374 |
|
|
356 |
|
|
748 |
|
|
717 |
|
Variable lease revenues |
|
|
6 |
|
|
5 |
|
|
11 |
|
|
10 |
|
Total lease revenues |
|
$ |
423 |
|
$ |
405 |
|
$ |
847 |
|
$ |
817 |
|
23
(17) COMMITMENTS AND CONTINGENCIES
A standard warranty is provided as assurance that the equipment will function as intended. The standard warranty period varies by product and region. At the time a sale is recognized, we record an estimate of future warranty costs based on historical claims rate experience and estimated population under warranty.
The reconciliation of the changes in the warranty liability follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Beginning of period balance |
|
$ |
1,311 |
|
$ |
1,360 |
|
$ |
1,259 |
|
$ |
1,426 |
|
Warranty claims paid |
|
|
(294) |
|
|
(308) |
|
|
(593) |
|
|
(618) |
|
New product warranty accruals |
|
|
318 |
|
|
227 |
|
|
660 |
|
|
483 |
|
Foreign exchange |
|
|
1 |
|
|
18 |
|
|
10 |
|
|
6 |
|
End of period balance |
|
$ |
1,336 |
|
$ |
1,297 |
|
$ |
1,336 |
|
$ |
1,297 |
|
The costs for extended warranty programs are recognized as incurred.
In certain international markets, we provide guarantees to banks for the retail financing of John Deere equipment. As of May 3, 2026, the notional value of these guarantees was $137. We may repossess the equipment collateralizing the receivables. At May 3, 2026, the accrued losses under these guarantees were not material. We also had guarantees to a VIE (see Note 1) totaling $172 at May 3, 2026.
We also had other miscellaneous contingent liabilities and guarantees totaling approximately $150 at May 3, 2026. The accrued liability for these contingencies was $40 at May 3, 2026.
At May 3, 2026, we had commitments of approximately $525 for the construction and acquisition of property and equipment. Also, at May 3, 2026, we had restricted assets of $297, classified as “Other assets,” which includes restricted cash primarily related to securitization of financing receivables (see Note 10) and cash that is legally restricted as to withdrawal or usage.
We are subject to various unresolved legal actions. The total accrued losses on unresolved legal matters were approximately $175 at May 3, 2026. The accrual includes losses associated with a settlement agreement in a consolidated multidistrict class action antitrust lawsuit, which was recorded in the fourth quarter of 2025. The accrual for all other matters is based on management’s best estimate of probable losses as the outcome of litigation is inherently uncertain. We believe the reasonably possible range of losses in excess of the recorded accruals for these unresolved legal actions would not have a material effect on our consolidated financial statements. The most prevalent legal claims relate to antitrust, product liability (including asbestos-related liability), employment, patent, and trademark matters.
(18) FAIR VALUE MEASUREMENTS
The fair values of financial instruments that do not approximate the carrying values are presented in the table below. Long-term borrowings exclude finance lease liabilities.
|
|
May 3, 2026 |
|
November 2, 2025 |
|
April 27, 2025 |
|
||||||||||||
|
|
Carrying |
|
Fair |
|
Carrying |
|
Fair |
|
Carrying |
|
Fair |
|
||||||
Financing receivables – net |
|
$ |
42,916 |
|
$ |
42,969 |
|
$ |
44,575 |
|
$ |
44,779 |
|
$ |
43,029 |
|
$ |
43,119 |
|
Financing receivables securitized – net |
|
|
6,100 |
|
|
6,113 |
|
|
6,831 |
|
|
6,855 |
|
|
7,765 |
|
|
7,710 |
|
Receivables from unconsolidated affiliates |
|
|
279 |
|
|
282 |
|
|
392 |
|
|
400 |
|
|
557 |
|
|
557 |
|
Short-term securitization borrowings |
|
|
5,929 |
|
|
5,948 |
|
|
6,596 |
|
|
6,631 |
|
|
7,562 |
|
|
7,588 |
|
Long-term borrowings due within one year |
|
|
8,880 |
|
|
8,921 |
|
|
8,888 |
|
|
8,911 |
|
|
8,928 |
|
|
8,869 |
|
Long-term borrowings |
|
|
42,183 |
|
|
41,842 |
|
|
43,471 |
|
|
43,527 |
|
|
42,742 |
|
|
42,423 |
|
Fair value measurements above were Level 3 for all receivables and Level 2 for all borrowings.
Fair values of the financing receivables and receivables from unconsolidated affiliates that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by us for similar financing receivables or at current market interest rates. The fair values of the remaining financing receivables approximated the carrying amounts. At May 3, 2026, and November 2, 2025, we had $42 and $60, respectively, marketable securities classified as held-to-maturity Level 2 international corporate debt securities. We record held-to-maturity marketable securities at amortized cost, which approximates fair value.
Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates.
24
Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges.
Assets and liabilities measured at fair value on a recurring basis, excluding our cash equivalents, which were carried at a cost that approximates fair value and consist of money market funds and time deposits, and excluding our held-to-maturity marketable securities, are as follows:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Level 1: |
|
|
|
|
|
|
|
|
|
|
Marketable securities |
|
|
|
|
|
|
|
|
|
|
U.S. government debt securities |
|
$ |
295 |
|
$ |
196 |
|
$ |
259 |
|
Total Level 1 marketable securities |
|
|
295 |
|
|
196 |
|
|
259 |
|
|
|
|
|
|
|
|
|
|
|
|
Level 2: |
|
|
|
|
|
|
|
|
|
|
Marketable securities |
|
|
|
|
|
|
|
|
|
|
International fixed income fund |
|
|
7 |
|
|
7 |
|
|
6 |
|
Corporate debt securities |
|
|
501 |
|
|
510 |
|
|
452 |
|
International debt securities |
|
|
145 |
|
|
174 |
|
|
154 |
|
Mortgage-backed securities |
|
|
219 |
|
|
234 |
|
|
201 |
|
Municipal debt securities |
|
|
108 |
|
|
113 |
|
|
87 |
|
U.S. government debt securities |
|
|
113 |
|
|
117 |
|
|
113 |
|
Total Level 2 marketable securities |
|
|
1,093 |
|
|
1,155 |
|
|
1,013 |
|
Other assets – Derivatives |
|
|
270 |
|
|
393 |
|
|
434 |
|
Accounts payable and accrued expenses – Derivatives |
|
|
538 |
|
|
389 |
|
|
614 |
|
|
|
|
|
|
|
|
|
|
|
|
Level 3: |
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses – Deferred consideration |
|
|
100 |
|
|
113 |
|
|
128 |
|
The mortgage-backed securities are primarily issued by U.S. government sponsored enterprises.
The contractual maturities of available-for-sale debt securities at May 3, 2026, follow:
|
|
Amortized |
|
Fair |
|
||
|
|
Cost |
|
Value |
|
||
Due in one year or less |
|
$ |
44 |
|
$ |
44 |
|
Due after one through five years |
|
|
388 |
|
|
385 |
|
Due after five through 10 years |
|
|
576 |
|
|
561 |
|
Due after 10 years |
|
|
194 |
|
|
172 |
|
Mortgage-backed securities |
|
|
242 |
|
|
219 |
|
Debt securities |
|
$ |
1,444 |
|
$ |
1,381 |
|
Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Mortgage-backed securities contain prepayment provisions and are not categorized by contractual maturity.
Fair value, nonrecurring Level 3 measurements from impairments and other adjustments were as follows:
|
|
Fair Value |
|
Losses (Gains) |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
November 2 |
|
April 27 |
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
|||||||
|
|
2026 |
|
2025 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
20252 |
|
|||||||
Property and equipment – net1 |
|
|
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other intangible assets – net1 |
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(32) |
|
1 Related to assessments of our external overseas battery operations performed in the third quarter of 2025.
2 The gain on “Assets held for sale” recorded in the first quarter of 2025 represents a reversal of prior period valuation allowance loss, not in excess of the cumulative valuation allowance recorded on “Assets held for sale.”
The following is a description of the valuation methodologies we use to measure certain financial instruments on the balance sheets at fair value:
Marketable securities – The portfolio of investments is valued on a market approach (matrix pricing model) in which all significant inputs are observable or can be derived from or corroborated by observable market data such as interest rates, yield curves, volatilities, credit risk, and prepayment speeds.
25
Funds are valued using the fund’s net asset value, based on the fair value of the underlying securities.
Derivatives – Our derivative financial instruments consist of interest rate contracts (swaps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.
Deferred consideration – The total purchase price consideration for three former Deere-Hitachi joint venture factories acquired in 2022 included supply agreement price increases beyond inflation adjustments. This deferred consideration will be paid as we purchase Deere-branded excavators, components, and service parts from Hitachi under the agreement with a duration that ranges from 5 to 30 years after the acquisition date. The deferred consideration balance is reduced as purchases are made and valued on a discounted cash flow approach using market rates.
Property and equipment – net – The valuations were based on the cost approach. The inputs include reproduction cost estimates adjusted for physical deterioration and functional obsolescence.
Other intangible assets – net – The impairment of customer relationships and tradename of our external overseas battery operations was measured using an income approach.
Other assets (Investments in unconsolidated affiliates) – Other than temporary impairments of investments are measured as the difference between the implied fair value and the carrying value of the investments. The estimated fair value for privately held entities is determined by an income approach (discounted cash flows), which includes inputs such as interest rates and margins.
Assets held for sale – The disposal group was measured at the lower of the carrying amount or fair value less costs to sell. Fair value was based on the probable sale price. The inputs included estimates of the final sale price (see Note 21). The gain recorded in 2025 represents a reversal of the prior period valuation allowance, not in excess of the cumulative valuation allowance recorded on “Assets held for sale.”
(19) DERIVATIVE INSTRUMENTS
Fair values of our derivative instruments and the associated notional amounts are presented below. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”
|
|
May 3, 2026 |
|
November 2, 2025 |
|
April 27, 2025 |
|
|||||||||||||||||||||
|
|
|
|
Fair Value |
|
|
|
Fair Value |
|
|
|
Fair Value |
|
|||||||||||||||
|
|
Notional |
|
Assets |
|
Liabilities |
|
Notional |
|
Assets |
|
Liabilities |
|
Notional |
|
Assets |
|
Liabilities |
|
|||||||||
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts |
|
$ |
3,525 |
|
$ |
7 |
|
$ |
17 |
|
$ |
2,675 |
|
|
|
|
$ |
21 |
|
$ |
2,975 |
|
|
|
|
$ |
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts |
|
|
11,720 |
|
|
64 |
|
|
243 |
|
|
11,465 |
|
$ |
160 |
|
|
228 |
|
|
13,608 |
|
$ |
169 |
|
|
372 |
|
Cross-currency interest rate contracts |
|
|
2,058 |
|
|
101 |
|
|
23 |
|
|
2,058 |
|
|
91 |
|
|
11 |
|
|
975 |
|
|
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross-currency interest rate contracts |
|
|
1,131 |
|
|
|
|
|
22 |
|
|
1,131 |
|
|
|
|
|
9 |
|
|
1,131 |
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not designated as hedging instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts |
|
|
14,785 |
|
|
88 |
|
|
48 |
|
|
14,084 |
|
|
94 |
|
|
81 |
|
|
14,254 |
|
|
112 |
|
|
100 |
|
Foreign exchange contracts |
|
|
8,993 |
|
|
10 |
|
|
175 |
|
|
7,372 |
|
|
46 |
|
|
33 |
|
|
8,078 |
|
|
42 |
|
|
107 |
|
Cross-currency interest rate contracts |
|
|
120 |
|
|
|
|
|
10 |
|
|
132 |
|
|
2 |
|
|
6 |
|
|
141 |
|
|
8 |
|
|
2 |
|
26
The amounts recorded in the condensed consolidated balance sheets related to borrowings and fair value hedges are presented in the table below. Fair value hedging adjustments are included in the carrying amount of hedged items.
|
|
Carrying Amount |
|
Cumulative Fair Value |
|
||
|
|
of Hedged Items |
|
Hedging Amounts |
|
||
May 3, 2026 |
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
3,886 |
|
$ |
(39) |
|
Long-term borrowings |
|
|
25,001 |
|
|
(297) |
|
|
|
|
|
|
|
|
|
November 2, 2025 |
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
2,998 |
|
$ |
(30) |
|
Long-term borrowings |
|
|
25,013 |
|
|
(203) |
|
|
|
|
|
|
|
|
|
April 27, 2025 |
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
1,319 |
|
$ |
(13) |
|
Long-term borrowings |
|
|
24,839 |
|
|
(299) |
|
The table above includes carrying amounts of short-term borrowings of $3,534, $2,544, and $1,212 and of long-term borrowings of $11,704, $11,963, and $10,533 at May 3, 2026, November 2, 2025, and April 27, 2025, respectively, for hedged items that are in discontinued hedge relationships. Also included are cumulative fair value hedging amounts on discontinued hedge relationships of short-term borrowings of ($39), ($30), and ($12) and of long-term borrowings of ($120), ($185), and ($141) at May 3, 2026, November 2, 2025, and April 27, 2025, respectively. At April 27, 2025, long-term borrowings with a carrying amount of $399 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 |
|
Six Months Ended |
|
||||||||
|
|
May 3 |
|
April 27 |
|
May 3 |
|
April 27 |
|
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – Interest expense |
|
$ |
(142) |
|
$ |
435 |
|
$ |
(200) |
|
$ |
92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized in OCI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – OCI (pretax) |
|
$ |
17 |
|
$ |
(11) |
|
$ |
15 |
|
$ |
(4) |
|
Reclassified from OCI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – Interest expense |
|
|
(2) |
|
|
|
|
|
2 |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – Interest expense |
|
$ |
5 |
|
$ |
1 |
|
$ |
9 |
|
$ |
1 |
|
Recognized in OCI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – OCI (pretax) |
|
|
17 |
|
|
(4) |
|
|
(13) |
|
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts – Interest expense |
|
$ |
13 |
|
$ |
(12) |
|
$ |
9 |
|
$ |
(16) |
|
Foreign exchange contracts – Net sales |
|
|
(1) |
|
|
4 |
|
|
4 |
|
|
(3) |
|
Foreign exchange contracts – Cost of sales |
|
|
(28) |
|
|
(7) |
|
|
(95) |
|
|
28 |
|
Foreign exchange contracts – Other operating expenses |
|
|
(10) |
|
|
(118) |
|
|
(289) |
|
|
90 |
|
Total not designated |
|
$ |
(26) |
|
$ |
(133) |
|
$ |
(371) |
|
$ |
99 |
|
Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at May 3, 2026, November 2, 2025, and April 27, 2025, was $362, $356, and $507, respectively. In accordance with the limits established in these agreements, we posted $73, $62, and $221 of cash collateral at May 3, 2026, November 2, 2025, and April 27, 2025, respectively. In addition, we paid $8 of collateral that was outstanding at May 3, 2026, November 2, 2025, and April 27, 2025, to participate in an international futures market to hedge currency exposure, not included in the following table.
27
Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral follows:
|
|
Gross Amounts |
|
Netting |
|
|
|
|
|
|
|||
|
|
Recognized |
|
Arrangements |
|
Collateral |
|
Net Amount |
|
||||
May 3, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
$ |
270 |
|
$ |
(111) |
|
$ |
(1) |
|
$ |
158 |
|
Liabilities |
|
|
538 |
|
|
(111) |
|
|
(73) |
|
|
354 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
November 2, 2025 |
|
|
|
|
|
|
|
|
|
||||
Assets |
|
$ |
393 |
|
$ |
(202) |
|
|
|
|
$ |
191 |
|
Liabilities |
|
|
389 |
|
|
(202) |
|
$ |
(64) |
|
|
123 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
April 27, 2025 |
|
|
|
|
|
|
|
|
|
||||
Assets |
|
$ |
434 |
|
$ |
(166) |
|
$ |
(2) |
|
$ |
266 |
|
Liabilities |
|
|
614 |
|
|
(166) |
|
|
(221) |
|
|
227 |
|
(20) SHARE-BASED AWARDS
We are authorized to grant shares for equity incentive awards. The remaining shares authorized for future issuance were 12.2 million at May 3, 2026. In December 2025, we granted stock options to employees for the purchase of 161 thousand shares of common stock at an exercise price of $468.90 per share and a binomial lattice model fair value of $125.96 per share at the grant date. At May 3, 2026, options for 1.0 million shares were outstanding with a weighted-average exercise price of $363.65 per share.
During the six months ended May 3, 2026, the restricted stock units (RSUs) granted in thousands of shares and the weighted-average grant date fair values, using the closing price of our common stock on the grant date in dollars, follow:
|
|
|
|
Grant-Date |
|
|
|
|
|
|
Fair Value |
|
|
|
|
Shares |
|
(per share) |
|
|
Service-based |
|
312 |
|
$ |
474.92 |
|
Performance/service-based |
|
145 |
|
|
535.87 |
|
Market/service-based (fair value determined using a Monte Carlo model) |
|
39 |
|
|
555.14 |
|
In March 2026, we granted performance/service-based awards to certain of our senior officers, which vest subject to the satisfaction of pre-established annual Shareholder Value Added targets during a five-fiscal year period beginning on November 3, 2025 and ending on October 27, 2030. Each fiscal year, a payout percentage ranging from zero to 175% will be calculated and the five annual payout percentages will be averaged at the end of the performance period and used to calculate the number of common stock shares to be received. The awards include dividend equivalent payments.
(21) ACQUISITION AND DISPOSITION
Acquisition
In February 2026, we acquired Tenna LLC (Tenna) to expand our technology solutions in the construction market. Tenna is a U.S. construction technology company that offers mixed-fleet equipment operations and asset tracking solutions. The purchase price, net of cash acquired of $1, was $439. The fair values assigned to the assets and liabilities of the acquired entity, which are based on information as of the acquisition date and available at May 3, 2026, follow:
|
|
February |
|
|
|
|
2026 |
|
|
Trade accounts and notes receivable |
|
$ |
23 |
|
Inventories |
|
|
4 |
|
Goodwill |
|
|
286 |
|
Other intangible assets |
|
|
137 |
|
Other miscellaneous assets |
|
|
3 |
|
Total assets |
|
$ |
453 |
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
14 |
|
Total liabilities |
|
$ |
14 |
|
The identifiable intangible assets were related to customer relationships, technology, and trade name with a weighted average amortization period of 10 years. The goodwill is deductible for income tax purposes. Tenna was assigned to the CF segment.
28
Disposition
In February 2025, we completed a transaction with Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become a 50% owner of our wholly-owned subsidiary in Brazil, BJD. Bradesco contributed capital directly to BJD. The transaction resulted in the deconsolidation of BJD in the second quarter of 2025. BJD finances retail and wholesale loans for agricultural, construction, and forestry equipment and was included in our Financial Services segment. BJD was a part of our Brazil operations which is considered an integrated single foreign entity.
We retained a 50% equity interest in BJD, which was valued at the deconsolidation date at $362 based on the completed transaction with Bradesco and its amount of contributed capital. We are accounting for our investment in BJD using the equity method of accounting and results of its operations are reported in “Equity in income of unconsolidated affiliates.” The related investment in unconsolidated affiliates and receivables from unconsolidated affiliates are reported in “Other assets” and “Other receivables,” respectively, on the condensed consolidated balance sheets.
The major classes of the total assets and liabilities of BJD at the time of deconsolidation were as follows:
|
|
February |
|
|
|
|
2025 |
|
|
Cash and cash equivalents |
|
$ |
110 |
|
Trade accounts and notes receivable – net |
|
|
119 |
|
Financing receivables – net |
|
|
2,787 |
|
Deferred income taxes |
|
|
33 |
|
Other miscellaneous assets |
|
|
23 |
|
Valuation allowance |
|
|
(65) |
|
Total assets |
|
$ |
3,007 |
|
|
|
|
|
|
Short-term borrowings |
|
$ |
495 |
|
Accounts payable and accrued expenses |
|
|
124 |
|
Long-term borrowings |
|
|
1,241 |
|
Retirement benefits and other liabilities |
|
|
1 |
|
Total liabilities |
|
$ |
1,861 |
|
|
|
|
|
|
Total intercompany payables |
|
$ |
781 |
|
At the time of deconsolidation in February 2025, the additional gain or loss was not significant. BJD was reclassified as held for sale in the third quarter of 2024.
Statements of Consolidated Cash Flows – Our noncash transactions as a result of the BJD deconsolidation in February 2025 include the derecognition of total assets (excluding cash and cash equivalents) of $2,897 and total liabilities of $1,861, and the recognition of the investments in unconsolidated affiliates of $362 and receivables from unconsolidated affiliates (BJD intercompany payables) of $781. The decrease in cash and cash equivalents resulting from the deconsolidation of BJD was recorded in other investing activities in the statements of consolidated cash flows.
(22) SPECIAL ITEMS
Discrete Tax Items
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.
Banco John Deere S.A.
In 2024, we entered into an agreement with Bradesco, for Bradesco to invest and become 50% owner of our wholly-owned subsidiary in Brazil, BJD. The BJD business was reclassified as held for sale in 2024. At January 26, 2025, the valuation allowance on “Assets held for sale” decreased, resulting in a pretax and after-tax gain (reversal of previous losses not in excess of cumulative valuation allowance recorded on “Assets held for sale”) 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.
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.
(23) SUBSEQUENT EVENTS
In May 2026, we entered into a retail note securitization transaction, resulting in $303 of secured borrowings.
On May 27, 2026, a quarterly dividend of $1.62 per share was declared at the Board of Directors meeting, payable on August 10, 2026, to stockholders of record on June 30, 2026.
29
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
All amounts are presented in millions of U.S. dollars unless otherwise specified.
OVERVIEW
Organization
Deere & Company is a global leader in the production of agricultural, turf, construction, and forestry equipment and solutions. John Deere Financial provides financing for John Deere equipment, parts, services, and other inputs customers need to run their operations. Our operations are managed through the Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), Construction & Forestry (CF), and Financial Services operating segments. References to “equipment operations” include PPA, SAT, and CF, while references to “agriculture and turf” include both PPA and SAT.
TRENDS AND ECONOMIC CONDITIONS
Industry Sales Outlook for Fiscal Year 2026 (in units)
Agriculture and Turf
Construction and Forestry
Company Trends
Our Leap Ambitions, a set of focused goals designed to guide the implementation of our Smart Industrial Operating Model, feature multi-year financial and operational goals, emphasizing the use of our differentiated equipment and service solutions, including automation, autonomy, digitalization, lifecycle solutions, and Solutions as a Service (SaaS).
Deeper integration of technology into equipment to enable customers to do more with less remains a persistent market trend. Customers seek to improve profitability, productivity, and sustainability by selecting our equipment and technology solutions. These technologies are incorporated into customer operations across the varied production systems that we serve. While we continue to benefit from the adoption of these technologies, revenue from SaaS products did not represent a significant percentage of our revenues in the periods presented.
Company Outlook for 2026
Large agriculture sales are expected to remain subdued in North America and to soften in South America resulting in decreased sales volume for PPA in 2026 compared to 2025. SAT and CF sales are expected to improve in 2026. Our net sales are expected to increase in 2026 compared to 2025, with the anticipated decline in PPA sales more than offset by improvements in CF and SAT.
Agriculture and Turf Industry Outlook for 2026
| ● | Demand in the U.S. and Canada for large agriculture equipment is expected to decrease compared to 2025 levels driven by elevated farm input costs and ongoing global market uncertainty. These factors are expected to be partially offset by robust demand for commodities and tightening supply which are expected to support improvements in crop prices. In addition, government programs in the U.S. continue to support farmers’ short-term liquidity, and recent biofuel policy changes may help provide future demand for U.S. farmers. |
| ● | We expect small agricultural and turf equipment sales to be flat to up slightly from 2025 levels in the U.S. and Canada. The dairy and livestock market continues to maintain strong margins, supporting ongoing product demand. A modest recovery is anticipated in the turf sector following several years of contraction. |
| ● | In Europe, the industry is forecasted to be flat to up slightly. While elevated interest rates continue to influence purchasing decisions, customer profitability and equipment replacement activity remain relatively stable. The |
30
| crop farming sector continues to experience subdued conditions; however, favorable dairy market margins are expected to continue to provide ongoing support to overall industry demand. |
| ● | Demand in South America is expected to decrease. Although crop production and yields remain strong and crop prices have improved, high interest rates, elevated input costs, and a stronger Brazilian real are pressuring farm profitability and reducing near-term equipment demand. |
| ● | Industry sales in Asia are forecasted to be roughly flat, mainly driven by demand in India. |
Construction and Forestry Industry Outlook for 2026
| ● | Industry sales in the U.S. and Canada for construction and compact construction equipment are projected to be slightly higher compared to 2025. Favorable industry fundamentals, including strong customer backlogs supported by large projects, infrastructure investment, and data center construction activity, continue to offset softness in residential construction. |
| ● | Global forestry markets are expected to decrease slightly due to continued pressure from weak residential construction demand and lower log and lumber prices. |
| ● | Global roadbuilding markets are forecasted to be up compared to 2025 driven by increased road construction spending across multiple geographies. |
Financial Services Outlook for 2026
Net Income |
|
Down |
|
||||
(–) Average portfolio |
|
Unfavorable |
|
||||
(–) Prior period special items |
|
Unfavorable |
|
||||
+ Financing spreads |
|
Favorable |
|
||||
+ Provision for credit losses |
|
Favorable |
|
||||
Additional Trends
Agricultural Market Business Cycle. The agricultural market is affected by various factors including commodity prices, acreage planted, crop yields, government policies, and uncertainty in macroeconomic trends. These factors affect farmers’ income and sentiment which may result in varying demand for our equipment. In 2026, we may experience the following effects due to unfavorable market conditions: lower sales volumes, higher sales incentives, and elevated receivable write-offs.
Global Trade Policies. In 2025, new tariffs were imposed in the U.S. for imports from a broad range of countries and on certain materials. Several countries also implemented retaliatory tariffs on imports from the U.S. and introduced additional trade barriers.
Incremental import tariffs adversely affected the cost of our products and components beginning in 2025 and continue to do so in 2026. The direct impact of these incremental tariffs incurred was $372 in the first six months of 2026, net of the tariff recovery described below, and approximately $95 in the first six months of 2025. These amounts exclude the impact of tariffs on our suppliers and market demand.
On February 20, 2026, the Supreme Court of the United States issued a decision invalidating tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA). On April 20, 2026, the U.S. Customs and Border Protection (CBP) launched a system to process IEEPA tariff refund claims. Based on the eligibility parameters established by the CBP for the initial phase of the refund process, we prepared and filed a refund claim in the amount of $272, which has been accepted by the CBP. We recorded a recovery for this initial amount as we concluded the refund is probable and reasonably estimable. The recovery was allocated 20%, 30%, and 50% to PPA, SAT, and CF, respectively, decreasing cost of sales. Trade policies continue to evolve, causing uncertainty in the agriculture and construction industries. We are actively taking steps to mitigate potential impacts on our business, to the extent possible, including adjusting sourcing strategies, pursuing product exemptions, and identifying cost reduction opportunities.
Changes in the agricultural market business cycle and global trade policies are driven by factors outside of our control, and as a result, we cannot reasonably foresee when these conditions may subside.
Legal Proceeding – On January 15, 2025, the Federal Trade Commission (FTC), along with the Attorneys General of the States of Illinois and Minnesota filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division. The Attorneys General of the States of Arizona, Michigan, and Wisconsin joined the lawsuit. The lawsuit alleges monopolization and unfair competition in violation of the federal and state antitrust laws. Plaintiffs seek a permanent injunction and other equitable relief to allow owners of our equipment, as well as independent repair providers, access to our repair tools and any other repair resources available to authorized John Deere dealers. We are in discussions with the FTC and plaintiff states with respect to a potential resolution. At this stage, we are unable to estimate the potential impact on our business.
31
Other Items of Concern and Uncertainties – Other items that could impact our results are:
| ● | slower economic growth and inflation |
| ● | global and regional political conditions |
| ● | shifts in energy, including positions with respect to biofuels, positions on government subsidies of farming, and changes in energy prices |
| ● | input costs, including the availability and price of fertilizers as a result of the conflict in the Middle East |
| ● | capital market disruptions |
| ● | foreign currency and capital control policies |
| ● | right to repair and agriculture data privacy regulations and legislation |
| ● | weather conditions |
| ● | marketplace pace of adoption and monetization of technologies we have invested in |
| ● | our ability to strengthen our digital capabilities, artificial intelligence, automation, and autonomy |
| ● | changes in demand and pricing for new and used equipment |
| ● | delays or disruptions in our supply chain |
| ● | significant fluctuations in foreign currency exchange rates |
| ● | volatility in the prices of many commodities |
CONSOLIDATED RESULTS – 2026 COMPARED WITH 2025
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
Deere & Company |
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
(In millions of dollars, except per share amounts) |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Net sales and revenues |
|
$ |
13,369 |
|
$ |
12,763 |
|
+5 |
|
$ |
22,981 |
|
$ |
21,272 |
|
+8 |
|
Net income attributable to Deere & Company |
|
|
1,773 |
|
|
1,804 |
|
-2 |
|
|
2,429 |
|
|
2,673 |
|
-9 |
|
Diluted earnings per share |
|
|
6.55 |
|
|
6.64 |
|
|
|
|
8.97 |
|
|
9.82 |
|
|
|
Net sales and revenues increased 5% and 8% for the quarter and year-to-date periods, respectively, primarily due to higher sales volumes and the positive effects of foreign currency translation. Net income decreased $31 in the second quarter primarily due to the impact of lower PPA shipment volumes of $313 ($402 pretax), increased production costs of $122 ($157 pretax) from higher material costs, and higher warranty expenses of $64 ($82 pretax), partially offset by the impact of higher shipment volumes for CF of $148 ($191 pretax) and SAT of $79 ($101 pretax), favorable price realization of $131 ($169 pretax), and the favorable impact of foreign currency exchange of $107 ($138 pretax). Results for the first six months were also affected by favorable discrete tax items in the prior period (see Note 22) of $163. The discussion of net sales and operating profit is included in the Business Segment Results below.
32
An explanation of the cost of sales to net sales ratio and other significant statement of consolidated income changes follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
Deere & Company |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Cost of sales to net sales |
|
|
70.2% |
|
|
68.1% |
|
|
|
|
73.5% |
|
|
70.3% |
|
|
|
• Material costs |
|
|
|
|
|
Unfavorable |
|
|
|
|
|
Unfavorable |
|
||||
• Tariffs, net of recoveries |
|
|
|
|
|
Favorable |
|
|
|
|
|
Unfavorable |
|
||||
• Production efficiencies |
|
|
|
|
|
Favorable |
|
|
|
|
|
Favorable |
|
||||
Increased mostly due to higher material costs as a result of inflationary pressures. Incremental tariffs affected both periods; however, tariff recoveries exceeded direct incremental tariff costs in the second quarter (see Global Trade Policies section in Additional Trends). Production efficiencies had a favorable impact resulting from increased manufacturing volumes for CF and SAT. |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income |
|
$ |
277 |
|
$ |
238 |
|
+16 |
|
$ |
544 |
|
$ |
485 |
|
+12 |
|
Higher for both periods due to income earned from extended warranty premiums, higher service revenues, and a gain on the disposal of property. |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
|
583 |
|
|
549 |
|
+6 |
|
|
1,137 |
|
|
1,075 |
|
+6 |
|
Increased due to continued focus on developing and deploying technology solutions. |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
712 |
|
|
784 |
|
-9 |
|
|
1,431 |
|
|
1,614 |
|
-11 |
|
Decreased for both periods primarily due to lower average borrowing rates and lower average borrowings. |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
306 |
|
|
287 |
|
+7 |
|
|
556 |
|
|
536 |
|
+4 |
|
Increased for both periods due to higher depreciation of equipment on operating leases. |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
518 |
|
|
539 |
|
-4 |
|
|
714 |
|
|
566 |
|
+26 |
|
Decreased for the three months ended as a result of lower pretax income. Increased for the six months ended due to the favorable impact on the prior period of discrete tax adjustments (see Note 22). |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
Business Segment Results – 2026 compared with 2025
The tariff impact was primarily included in the “Production Costs” category below.
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
Production & Precision Agriculture |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Net sales |
|
$ |
4,503 |
|
$ |
5,230 |
|
-14 |
|
$ |
7,666 |
|
$ |
8,297 |
|
-8 |
|
Operating profit |
|
|
706 |
|
|
1,148 |
|
-39 |
|
|
845 |
|
|
1,486 |
|
-43 |
|
Operating margin |
|
|
15.7% |
|
|
22.0% |
|
|
|
|
11.0% |
|
|
17.9% |
|
|
|
Price realization |
|
|
|
|
|
|
|
+1 |
|
|
|
|
|
|
|
+1 |
|
Currency translation impact on Net sales |
|
|
|
|
|
|
|
+3 |
|
|
|
|
|
|
|
+3 |
|
Production & Precision Agriculture sales decreased for the quarter as a result of lower shipment volumes (primarily in the U.S., Canada, and Brazil), partially offset by the positive effects of foreign currency translation (primarily the Euro and Brazilian real). Operating profit decreased primarily due to lower shipment volumes and higher production costs from an increase in material and freight costs, partially offset by the favorable effects of foreign currency exchange.
Production & Precision Agriculture Operating Profit
Second Quarter 2026 Compared to Second Quarter 2025
Sales for the first six months decreased as a result of lower shipment volumes (primarily in the U.S., Canada, and Brazil, offset by Europe), partially offset by the positive effects of foreign currency translation (primarily the Euro and Brazilian real). Operating profit decreased for the first six months primarily due to lower shipment volumes / sales mix and higher production costs, from an increase in material costs and higher tariffs.
Production & Precision Agriculture Operating Profit
First Six Months 2026 Compared to First Six Months 2025
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
Small Agriculture & Turf |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Net sales |
|
$ |
3,485 |
|
$ |
2,994 |
|
+16 |
|
$ |
5,653 |
|
$ |
4,742 |
|
+19 |
|
Operating profit |
|
|
719 |
|
|
574 |
|
+25 |
|
|
916 |
|
|
698 |
|
+31 |
|
Operating margin |
|
|
20.6% |
|
|
19.2% |
|
|
|
|
16.2% |
|
|
14.7% |
|
|
|
Price realization |
|
|
|
|
|
|
|
+1 |
|
|
|
|
|
|
|
+2 |
|
Currency translation impact on Net sales |
|
|
|
|
|
|
|
+2 |
|
|
|
|
|
|
|
+2 |
|
Small Agriculture & Turf sales increased for the quarter as a result of higher shipment volumes (primarily in the U.S. and Europe) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization.
Small Agriculture & Turf Operating Profit
Second Quarter 2026 Compared to Second Quarter 2025
Sales for the first six months increased as a result of higher shipment volumes (primarily in the U.S., Europe, and India) and the positive effects of foreign currency translation (primarily the Euro). Operating profit for the first six months increased due to higher shipment volumes and favorable price realization, partially offset by higher production costs, driven by higher tariffs and an increase in material costs.
Small Agriculture & Turf Operating Profit
First Six Months 2026 Compared to First Six Months 2025
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
Construction & Forestry |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Net sales |
|
$ |
3,790 |
|
$ |
2,947 |
|
+29 |
|
$ |
6,460 |
|
$ |
4,941 |
|
+31 |
|
Operating profit |
|
|
561 |
|
|
379 |
|
+48 |
|
|
698 |
|
|
444 |
|
+57 |
|
Operating margin |
|
|
14.8% |
|
|
12.9% |
|
|
|
|
10.8% |
|
|
9.0% |
|
|
|
Price realization |
|
|
|
|
|
|
|
+3 |
|
|
|
|
|
|
|
+1 |
|
Currency translation impact on Net sales |
|
|
|
|
|
|
|
+3 |
|
|
|
|
|
|
|
+3 |
|
Construction & Forestry sales increased for the quarter primarily as a result of higher shipment volumes (primarily in the U.S.) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization, partially offset by higher production costs, driven by an increase in material costs and higher tariffs.
Construction & Forestry Operating Profit
Second Quarter 2026 Compared to Second Quarter 2025
Sales for the first six months increased due to higher shipment volumes (primarily in the U.S.) and the positive effects of foreign currency translation (primarily the Euro). Operating profit increased due to higher shipment volumes and favorable price realization, partially offset by higher tariffs and an increase in material costs.
Construction & Forestry Operating Profit
First Six Months 2026 Compared to First Six Months 2025
36
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
May 3 |
|
April 27 |
|
% |
|
May 3 |
|
April 27 |
|
% |
|
||||
Financial Services |
|
2026 |
|
2025 |
|
Change |
|
2026 |
|
2025 |
|
Change |
|
||||
Revenue (including intercompany) |
|
$ |
1,509 |
|
$ |
1,501 |
|
+1 |
|
$ |
2,997 |
|
$ |
3,074 |
|
-3 |
|
Interest expense |
|
|
649 |
|
|
721 |
|
-10 |
|
|
1,313 |
|
|
1,487 |
|
-12 |
|
Net income |
|
|
190 |
|
|
161 |
|
+18 |
|
|
434 |
|
|
391 |
|
+11 |
|
Revenue for the first six months decreased primarily due to the deconsolidation of Banco John Deere S.A. (BJD) in the second quarter of 2025. The average balance of receivables and leases financed was 1% lower in the second quarter of 2026 and 2% lower in the first six months of 2026 compared with the same periods last year. Interest expense decreased as a result of lower average borrowing rates and lower average borrowings.
Net income for the quarter increased primarily due to favorable financing spreads and favorable derivative valuation adjustments, partially offset by the impact of a lower average portfolio. Net income in the first six months was also impacted by a lower provision for credit losses and the prior period benefiting from a special item (see Note 22).
CRITICAL ACCOUNTING ESTIMATES
See our critical accounting estimates discussed in the Management’s Discussion and Analysis of the most recently filed Annual Report on Form 10-K. There have been no material changes to these policies.
CAPITAL RESOURCES AND LIQUIDITY – 2026 COMPARED WITH 2025
We have access to global markets at a reasonable cost. Sources of liquidity include:
| ● | cash, cash equivalents, and marketable securities on hand |
| ● | funds from operations |
| ● | the issuance of commercial paper and term debt |
| ● | the securitization of retail notes |
| ● | bank lines of credit |
We closely monitor our cash requirements. Based on the available sources of liquidity, we expect to meet our funding needs in the short term (next 12 months) and long term (beyond 12 months). We are forecasting operating cash flows from equipment operations in 2026 to remain flat compared with 2025 driven by an offsetting decrease in net income adjusted for non-cash provisions, and higher cash flows generated from higher accounts payable and accrued expenses and inventory reductions.
We operate in multiple industries, which have unique funding requirements. The equipment operations are capital intensive. Historically, these operations have been subject to seasonal variations in financing requirements for inventories and receivables from dealers.
The financial services operations rely on their ability to raise substantial amounts of funds to finance their receivable and lease portfolios.
Key metrics are provided in the following table:
|
|
May 3 |
|
November 2 |
|
April 27 |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
Cash, cash equivalents, and marketable securities |
|
$ |
9,335 |
|
$ |
9,687 |
|
$ |
9,263 |
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts and notes receivable – net |
|
|
7,571 |
|
|
5,317 |
|
|
6,748 |
|
Ratio to prior 12 month’s net sales |
|
|
19% |
|
|
14% |
|
|
17% |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
8,188 |
|
|
7,406 |
|
|
7,870 |
|
Ratio to prior 12 month’s cost of sales |
|
|
27% |
|
|
26% |
|
|
29% |
|
|
|
|
|
|
|
|
|
|
|
|
Unused credit lines |
|
|
5,947 |
|
|
7,268 |
|
|
4,866 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services: |
|
|
|
|
|
|
|
|
|
|
Ratio of interest-bearing debt to stockholder’s equity |
|
|
8.7 to 1 |
|
|
8.4 to 1 |
|
|
8.7 to 1 |
|
There have been no material changes to the contractual obligations and other cash requirements identified in our most recently filed Annual Report on Form 10-K.
37
CASH FLOWS
|
|
Six Months Ended |
|
||||
|
|
May 3, 2026 |
|
April 27, 2025 |
|
||
Net cash provided by operating activities |
|
$ |
1,042 |
|
$ |
568 |
|
Net cash provided by investing activities |
|
|
93 |
|
|
779 |
|
Net cash used for financing activities |
|
|
(1,627) |
|
|
(821) |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
94 |
|
|
20 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
$ |
(398) |
|
$ |
546 |
|
Cash inflows from consolidated operating activities in the first six months of 2026 were $1,042. This resulted mainly from net income adjusted for non-cash provisions, partially offset by an increase in receivables related to sales, an increase in inventories, a decrease in accrued employee profit-sharing incentives, and an OPEB contribution. Cash inflows from investing activities were $93 in the first six months of this year. The primary drivers were collections of receivables (excluding receivables related to sales) exceeding the cost of receivables acquired, partially offset by purchases of property and equipment and the acquisition of Tenna LLC (see Note 21). Cash outflows from financing activities were $1,627 in the first six months of 2026, due to cash returned to shareholders and lower external borrowings. Cash returned to shareholders was $1,378 in the first six months of 2026. Cash, cash equivalents, and restricted cash decreased $398 during the first six months of 2026.
KEY METRICS AND BALANCE SHEET CHANGES
Trade Accounts and Notes Receivable. Trade accounts and notes receivable arise from sales of goods to customers. Trade receivables increased $2,254 during the first six months of 2026, primarily due to a seasonal increase and higher sales volumes. These receivables increased $823 compared to a year ago due to higher sales volumes. The percentage of total worldwide trade receivables outstanding for periods exceeding 12 months was 1% at May 3, 2026, 3% at November 2, 2025, and 7% at April 27, 2025.
Financing Receivables and Equipment on Operating Leases. Financing receivables and equipment on operating leases consist of retail notes originated in connection with financing of new and used equipment, operating leases, revolving charge accounts, sales-type and direct financing leases, and wholesale notes. Financing receivables and equipment on operating leases decreased $2,476 during the first six months of 2026 and decreased $1,600 in the past 12 months. The decrease for both periods was due to lower agriculture and turf retail customer receivables reflecting reduced demand and lower wholesale receivables driven by lower dealer inventory levels. Total acquisition volumes of financing receivables and equipment on operating leases were 12% higher in the first six months of 2026, compared with the same period last year, as volumes of wholesale notes, and revolving charge accounts were higher compared to the same period last year.
Inventories. Inventories increased by $782 during the first six months of 2026 primarily due to a seasonal increase, and increased by $318 compared to a year ago. A majority of these inventories are valued at cost on the “last-in, first-out” (LIFO) method.
Property and Equipment. Property and equipment cash expenditures in the first six months of 2026 were $451 compared with $555 in the same period last year. Capital expenditures in 2026 are estimated to be approximately $1,400.
Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased by $256 in the first six months of 2026, primarily due to a decrease in accrued expenses associated with employee benefits partially offset by an increase in trade payables. Accounts payable and accrued expenses increased $308 compared to a year ago due to an increase in trade payables, partially offset by a decrease in accrued expenses associated with employee benefits.
Borrowings. Total external borrowings decreased by $114 in the first six months of 2026 and decreased $2,499 compared to a year ago, generally corresponding with the level of the receivable and lease portfolio, as well as other working capital requirements.
John Deere Capital Corporation (Capital Corporation), a U.S. financial services subsidiary, has a revolving warehouse facility to utilize bank conduit facilities to securitize retail notes (see Note 10). The facility was renewed in November 2025, with an expiration in November 2026, and total capacity or “financing limit” of $2,500. At May 3, 2026, $1,738 of securitization borrowings were outstanding under the facility. At the end of the contractual revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected.
In the first six months of 2026, the financial services operations issued $1,439 and retired $2,108 of retail note securitization borrowings, which are presented in “Net proceeds (payments) in short-term borrowings (original maturities three months or less).”
38
Lines of Credit. We also have access to bank lines of credit with various banks throughout the world.
Worldwide lines of credit totaled $12.7 billion at May 3, 2026, consisting primarily of:
| ● | a 364-day credit facility agreement of $5.5 billion expiring in the second quarter of 2027 |
| ● | a credit facility agreement of $3.25 billion expiring in the second quarter of 2029 |
| ● | a credit facility agreement of $3.25 billion expiring in the second quarter of 2031 |
At May 3, 2026, $5,947 of these worldwide lines of credit were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings were considered to constitute utilization. These credit agreements require Capital Corporation and other parts of our business to maintain certain performance metrics and liquidity targets. All requirements in the credit agreements have been met during the periods included in the financial statements.
Debt Ratings. To access public debt capital markets, we rely on credit rating agencies to assign short-term and long-term credit ratings to our debt securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold our securities. A credit rating agency may change or withdraw ratings based on its assessment of our current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, reduced access to debt capital markets, and may adversely impact our liquidity. The senior long-term and short-term debt ratings and outlook currently assigned to unsecured company securities by the rating agencies engaged by us are as follows:
|
|
Senior |
|
|
|
|
|
|
|
Long-Term |
|
Short-Term |
|
Outlook |
|
Fitch Ratings |
|
A+ |
|
F1 |
|
Stable |
|
Moody’s Investors Service, Inc. |
|
A1 |
|
Prime-1 |
|
Stable |
|
Standard & Poor’s |
|
A |
|
A-1 |
|
Stable |
|
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in the sections entitled “Overview,” “Trends and Economic Conditions,” and “Condensed Notes to Interim Consolidated Financial Statements” relating to future events, expectations, and trends constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of our operations generally while others could more heavily affect a particular line of business.
Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, we expressly disclaim any obligation to update or revise our forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:
| ● | the agricultural business cycle, which can be unpredictable and is affected by factors such as farm income, international trade, world grain stocks, crop yields, available farm acres, soil conditions, prices for commodities and livestock, input costs including the availability and price of fertilizer, government farm programs, and availability of transport for crops |
| ● | macroeconomic conditions, including unemployment, inflation, interest rate volatility, energy price increases resulting from geopolitical conflicts, changes in consumer practices due to slower economic growth or a recession, regional or global liquidity constraints |
| ● | the uncertainty of government policies and actions with respect to the global trade environment including increased and contested tariffs announced by the U.S. government and retaliatory trade regulations |
| ● | political, economic, and social instability in the geographies in which we operate |
| ● | worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for our equipment |
| ● | rationalization, restructuring, relocation, expansion, and/or reconfiguration of manufacturing and warehouse facilities |
| ● | accurately forecasting customer demand for products and services, and adequately managing inventory |
| ● | uncertainty of our ability to sell products domestically or internationally, manage increased costs of production, absorb or pass on increased expenses, and accurately predict financial results and industry trends |
| ● | availability and price of raw materials, components, and whole goods |
| ● | delays or disruptions in our supply chain, including those arising from geopolitical conflicts |
| ● | changes in climate patterns, unfavorable weather events, and natural disasters |
39
| ● | suppliers’ and manufacturers’ business practices and compliance with applicable laws such as human rights, safety, environmental, and fair wages |
| ● | higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products and solutions |
| ● | the ability to attract, develop, engage, and retain qualified employees |
| ● | ability to adapt in highly competitive markets, including understanding and meeting customers’ changing expectations for products and solutions, including delivery and utilization of precision technology |
| ● | the ability to execute business strategies, including our Smart Industrial Operating Model and refined Leap Ambitions |
| ● | dealer practices and their ability to manage new and used inventory, distribute our products, and to provide support and service for precision technology solutions |
| ● | the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes |
| ● | negative claims or publicity that damage our reputation or brand |
| ● | the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge |
| ● | labor relations and contracts, including work stoppages and other disruptions |
| ● | security breaches, cybersecurity attacks, technology failures, and other disruptions to our information technology infrastructure and products |
| ● | leveraging artificial intelligence and machine learning within our business processes |
| ● | changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign, and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, health and safety, human rights, import / export and trade, labor and employment, product liability, tariffs, tax, telematics, and telecommunications |
| ● | governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy |
| ● | warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations because of the deficient operation of our products |
| ● | investigations, claims, lawsuits, or other legal proceedings, including the lawsuit filed by the Federal Trade Commission (FTC) and the Attorneys General of the States of Arizona, Illinois, Michigan, Minnesota, and Wisconsin alleging that we unlawfully withheld self-repair capabilities from farmers and independent repair providers |
| ● | loss of or challenges to intellectual property rights |
Further information concerning us and our businesses, including factors that could materially affect our financial results, is included in our other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q). There also may be other factors that we cannot anticipate or that are not described herein because we do not currently perceive them to be material.
40
SUPPLEMENTAL CONSOLIDATING DATA
The supplemental consolidating data presented on the subsequent pages is presented for informational purposes. Equipment operations represent the enterprise without Financial Services. Equipment operations include Production & Precision Agriculture operations, Small Agriculture & Turf operations, Construction & Forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within Financial Services. Transactions between the equipment operations and Financial Services have been eliminated to arrive at the consolidated financial statements.
Equipment operations and Financial Services participate in different industries. Equipment operations primarily generate earnings and cash flows by manufacturing and selling equipment, service parts, and technology solutions to dealers and retail customers. Financial Services finance sales and leases by dealers of new and used equipment that is largely manufactured by equipment operations. Those earnings and cash flows generally are the difference between the finance income received from customer payments less interest expense, and depreciation on equipment subject to an operating lease. The two businesses are capitalized differently and have separate performance metrics. The supplemental consolidating data is also used by management due to these differences.
41
DEERE & COMPANY |
|
|
||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA |
|
|
||||||||||||||||||||||||
STATEMENTS OF INCOME |
|
|
||||||||||||||||||||||||
For the Three Months Ended May 3, 2026 and April 27, 2025 |
|
|
||||||||||||||||||||||||
Unaudited |
|
|
||||||||||||||||||||||||
|
|
EQUIPMENT |
|
FINANCIAL |
|
|
|
|
|
|
||||||||||||||||
|
|
OPERATIONS |
|
SERVICES |
|
ELIMINATIONS |
|
CONSOLIDATED |
|
|
||||||||||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|
||||||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
11,778 |
|
$ |
11,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,778 |
|
$ |
11,171 |
|
|
Finance and interest income |
|
|
110 |
|
|
108 |
|
$ |
1,359 |
|
$ |
1,380 |
|
$ |
(155) |
|
$ |
(134) |
|
|
1,314 |
|
|
1,354 |
1 |
|
Other income |
|
|
212 |
|
|
187 |
|
|
150 |
|
|
121 |
|
|
(85) |
|
|
(70) |
|
|
277 |
|
|
238 |
2, 3, 4 |
|
Total |
|
|
12,100 |
|
|
11,466 |
|
|
1,509 |
|
|
1,501 |
|
|
(240) |
|
|
(204) |
|
|
13,369 |
|
|
12,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
8,277 |
|
|
7,617 |
|
|
|
|
|
|
|
|
(11) |
|
|
(8) |
|
|
8,266 |
|
|
7,609 |
4 |
|
Research and development expenses |
|
|
583 |
|
|
549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
583 |
|
|
549 |
|
|
Selling, administrative and general expenses |
|
|
980 |
|
|
961 |
|
|
231 |
|
|
238 |
|
|
(2) |
|
|
(2) |
|
|
1,209 |
|
|
1,197 |
4 |
|
Interest expense |
|
|
102 |
|
|
94 |
|
|
649 |
|
|
721 |
|
|
(39) |
|
|
(31) |
|
|
712 |
|
|
784 |
1 |
|
Interest compensation to Financial Services |
|
|
116 |
|
|
103 |
|
|
|
|
|
|
|
|
(116) |
|
|
(103) |
|
|
|
|
|
|
1 |
|
Other operating expenses |
|
|
9 |
|
|
12 |
|
|
369 |
|
|
335 |
|
|
(72) |
|
|
(60) |
|
|
306 |
|
|
287 |
3, 4, 5 |
|
Total |
|
|
10,067 |
|
|
9,336 |
|
|
1,249 |
|
|
1,294 |
|
|
(240) |
|
|
(204) |
|
|
11,076 |
|
|
10,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income Taxes |
|
|
2,033 |
|
|
2,130 |
|
|
260 |
|
|
207 |
|
|
|
|
|
|
|
|
2,293 |
|
|
2,337 |
|
|
Provision for income taxes |
|
|
452 |
|
|
490 |
|
|
66 |
|
|
49 |
|
|
|
|
|
|
|
|
518 |
|
|
539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income Taxes |
|
|
1,581 |
|
|
1,640 |
|
|
194 |
|
|
158 |
|
|
|
|
|
|
|
|
1,775 |
|
|
1,798 |
|
|
Equity in income (loss) of unconsolidated affiliates |
|
|
(1) |
|
|
|
|
|
(4) |
|
|
3 |
|
|
|
|
|
|
|
|
(5) |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
1,580 |
|
|
1,640 |
|
|
190 |
|
|
161 |
|
|
|
|
|
|
|
|
1,770 |
|
|
1,801 |
|
|
Less: Net loss attributable to noncontrolling interests |
|
|
(3) |
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
|
(3) |
|
|
Net Income Attributable to Deere & Company |
|
$ |
1,583 |
|
$ |
1,643 |
|
$ |
190 |
|
$ |
161 |
|
|
|
|
|
|
|
$ |
1,773 |
|
$ |
1,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Elimination of intercompany interest income and expense.
2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.
3 Elimination of income and expenses between equipment operations and Financial Services related to intercompany guarantees of investments in certain international markets.
4 Elimination of intercompany service revenues and fees.
5 Elimination of Financial Services’ lease depreciation expense related to inventory transferred to equipment on operating leases.
42
DEERE & COMPANY |
|
|
||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) |
|
|
||||||||||||||||||||||||
STATEMENTS OF INCOME |
|
|
||||||||||||||||||||||||
For the Six Months Ended May 3, 2026 and April 27, 2025 |
|
|
||||||||||||||||||||||||
Unaudited |
|
|
||||||||||||||||||||||||
|
|
EQUIPMENT |
|
FINANCIAL |
|
|
|
|
|
|
||||||||||||||||
|
|
OPERATIONS |
|
SERVICES |
|
ELIMINATIONS |
|
CONSOLIDATED |
|
|
||||||||||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|
||||||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
19,779 |
|
$ |
17,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
19,779 |
|
$ |
17,980 |
|
|
Finance and interest income |
|
|
230 |
|
|
217 |
|
$ |
2,710 |
|
$ |
2,835 |
|
$ |
(282) |
|
$ |
(245) |
|
|
2,658 |
|
|
2,807 |
1 |
|
Other income |
|
|
425 |
|
|
391 |
|
|
287 |
|
|
239 |
|
|
(168) |
|
|
(145) |
|
|
544 |
|
|
485 |
2, 3, 4 |
|
Total |
|
|
20,434 |
|
|
18,588 |
|
|
2,997 |
|
|
3,074 |
|
|
(450) |
|
|
(390) |
|
|
22,981 |
|
|
21,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
14,568 |
|
|
12,662 |
|
|
|
|
|
|
|
|
(21) |
|
|
(16) |
|
|
14,547 |
|
|
12,646 |
4 |
|
Research and development expenses |
|
|
1,137 |
|
|
1,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,137 |
|
|
1,075 |
|
|
Selling, administrative and general expenses |
|
|
1,787 |
|
|
1,761 |
|
|
398 |
|
|
412 |
|
|
(4) |
|
|
(4) |
|
|
2,181 |
|
|
2,169 |
4 |
|
Interest expense |
|
|
195 |
|
|
178 |
|
|
1,313 |
|
|
1,487 |
|
|
(77) |
|
|
(51) |
|
|
1,431 |
|
|
1,614 |
1 |
|
Interest compensation to Financial Services |
|
|
205 |
|
|
194 |
|
|
|
|
|
|
|
|
(205) |
|
|
(194) |
|
|
|
|
|
|
1 |
|
Other operating expenses |
|
|
(37) |
|
|
(38) |
|
|
736 |
|
|
699 |
|
|
(143) |
|
|
(125) |
|
|
556 |
|
|
536 |
3, 4, 5 |
|
Total |
|
|
17,855 |
|
|
15,832 |
|
|
2,447 |
|
|
2,598 |
|
|
(450) |
|
|
(390) |
|
|
19,852 |
|
|
18,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income Taxes |
|
|
2,579 |
|
|
2,756 |
|
|
550 |
|
|
476 |
|
|
|
|
|
|
|
|
3,129 |
|
|
3,232 |
|
|
Provision for income taxes |
|
|
587 |
|
|
477 |
|
|
127 |
|
|
89 |
|
|
|
|
|
|
|
|
714 |
|
|
566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income Taxes |
|
|
1,992 |
|
|
2,279 |
|
|
423 |
|
|
387 |
|
|
|
|
|
|
|
|
2,415 |
|
|
2,666 |
|
|
Equity in income (loss) of unconsolidated affiliates |
|
|
(1) |
|
|
(3) |
|
|
11 |
|
|
4 |
|
|
|
|
|
|
|
|
10 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
1,991 |
|
|
2,276 |
|
|
434 |
|
|
391 |
|
|
|
|
|
|
|
|
2,425 |
|
|
2,667 |
|
|
Less: Net loss attributable to noncontrolling interests |
|
|
(4) |
|
|
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|
|
(6) |
|
|
Net Income Attributable to Deere & Company |
|
$ |
1,995 |
|
$ |
2,282 |
|
$ |
434 |
|
$ |
391 |
|
|
|
|
|
|
|
$ |
2,429 |
|
$ |
2,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Elimination of intercompany interest income and expense.
2 Elimination of equipment operations’ margin from inventory transferred to equipment on operating leases.
3 Elimination of income and expenses between equipment operations and Financial Services related to intercompany guarantees of investments in certain international markets.
4 Elimination of intercompany service revenues and fees.
5 Elimination of Financial Services’ lease depreciation expense related to inventory transferred to equipment on operating leases.
43
DEERE & COMPANY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
CONDENSED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
EQUIPMENT |
|
FINANCIAL |
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
OPERATIONS |
|
SERVICES |
|
ELIMINATIONS |
|
CONSOLIDATED |
|
|
||||||||||||||||||||||||||||
|
|
May 3 |
|
Nov 2 |
|
Apr 27 |
|
May 3 |
|
Nov 2 |
|
Apr 27 |
|
May 3 |
|
Nov 2 |
|
Apr 27 |
|
May 3 |
|
Nov 2 |
|
Apr 27 |
|
|
||||||||||||
|
|
2026 |
|
2025 |
|
2025 |
|
2026 |
|
2025 |
|
2025 |
|
2026 |
|
2025 |
|
2025 |
|
2026 |
|
2025 |
|
2025 |
|
|
||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,917 |
|
$ |
6,340 |
|
$ |
6,331 |
|
$ |
1,988 |
|
$ |
1,936 |
|
$ |
1,660 |
|
|
|
|
|
|
|
|
|
|
$ |
7,905 |
|
$ |
8,276 |
|
$ |
7,991 |
|
|
Marketable securities |
|
|
173 |
|
|
217 |
|
|
139 |
|
|
1,257 |
|
|
1,194 |
|
|
1,133 |
|
|
|
|
|
|
|
|
|
|
|
1,430 |
|
|
1,411 |
|
|
1,272 |
|
|
Receivables from Financial Services |
|
|
4,642 |
|
|
4,649 |
|
|
2,497 |
|
|
|
|
|
|
|
|
|
|
$ |
(4,642) |
|
$ |
(4,649) |
|
$ |
(2,497) |
|
|
|
|
|
|
|
|
|
6 |
|
Trade accounts and notes receivable – net |
|
|
1,579 |
|
|
1,316 |
|
|
1,429 |
|
|
8,001 |
|
|
5,900 |
|
|
7,406 |
|
|
(2,009) |
|
|
(1,899) |
|
|
(2,087) |
|
|
7,571 |
|
|
5,317 |
|
|
6,748 |
7 |
|
Financing receivables – net |
|
|
102 |
|
|
88 |
|
|
82 |
|
|
42,814 |
|
|
44,487 |
|
|
42,947 |
|
|
|
|
|
|
|
|
|
|
|
42,916 |
|
|
44,575 |
|
|
43,029 |
|
|
Financing receivables securitized – net |
|
|
1 |
|
|
1 |
|
|
2 |
|
|
6,099 |
|
|
6,830 |
|
|
7,763 |
|
|
|
|
|
|
|
|
|
|
|
6,100 |
|
|
6,831 |
|
|
7,765 |
|
|
Other receivables |
|
|
2,062 |
|
|
1,809 |
|
|
2,009 |
|
|
573 |
|
|
658 |
|
|
1,009 |
|
|
(53) |
|
|
(64) |
|
|
(43) |
|
|
2,582 |
|
|
2,403 |
|
|
2,975 |
8 |
|
Equipment on operating leases – net |
|
|
|
|
|
|
|
|
|
|
|
7,514 |
|
|
7,600 |
|
|
7,336 |
|
|
|
|
|
|
|
|
|
|
|
7,514 |
|
|
7,600 |
|
|
7,336 |
|
|
Inventories |
|
|
8,188 |
|
|
7,406 |
|
|
7,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,188 |
|
|
7,406 |
|
|
7,870 |
|
|
Property and equipment – net |
|
|
8,004 |
|
|
8,047 |
|
|
7,523 |
|
|
31 |
|
|
32 |
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
8,035 |
|
|
8,079 |
|
|
7,555 |
|
|
Goodwill |
|
|
4,513 |
|
|
4,188 |
|
|
4,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,513 |
|
|
4,188 |
|
|
4,094 |
|
|
Other intangible assets – net |
|
|
975 |
|
|
892 |
|
|
964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
975 |
|
|
892 |
|
|
964 |
|
|
Retirement benefits |
|
|
3,351 |
|
|
3,181 |
|
|
3,046 |
|
|
101 |
|
|
94 |
|
|
89 |
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
3,450 |
|
|
3,273 |
|
|
3,133 |
|
|
Deferred income taxes |
|
|
2,532 |
|
|
2,507 |
|
|
2,377 |
|
|
45 |
|
|
46 |
|
|
42 |
|
|
(216) |
|
|
(269) |
|
|
(331) |
|
|
2,361 |
|
|
2,284 |
|
|
2,088 |
9 |
|
Other assets |
|
|
2,358 |
|
|
2,218 |
|
|
2,349 |
|
|
1,126 |
|
|
1,244 |
|
|
1,152 |
|
|
(23) |
|
|
(1) |
|
|
(18) |
|
|
3,461 |
|
|
3,461 |
|
|
3,483 |
|
|
Total Assets |
|
$ |
44,397 |
|
$ |
42,859 |
|
$ |
40,712 |
|
$ |
69,549 |
|
$ |
70,021 |
|
$ |
70,569 |
|
$ |
(6,945) |
|
$ |
(6,884) |
|
$ |
(4,978) |
|
$ |
107,001 |
|
$ |
105,996 |
|
$ |
106,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
397 |
|
$ |
414 |
|
$ |
241 |
|
$ |
15,235 |
|
$ |
13,382 |
|
$ |
15,707 |
|
|
|
|
|
|
|
|
|
|
$ |
15,632 |
|
$ |
13,796 |
|
$ |
15,948 |
|
|
Short-term securitization borrowings |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
5,928 |
|
|
6,595 |
|
|
7,561 |
|
|
|
|
|
|
|
|
|
|
|
5,929 |
|
|
6,596 |
|
|
7,562 |
|
|
Payables to equipment operations |
|
|
|
|
|
|
|
|
|
|
|
4,642 |
|
|
4,649 |
|
|
2,497 |
|
$ |
(4,642) |
|
$ |
(4,649) |
|
$ |
(2,497) |
|
|
|
|
|
|
|
|
|
6 |
|
Accounts payable and accrued expenses |
|
|
12,600 |
|
|
12,757 |
|
|
12,180 |
|
|
3,138 |
|
|
3,116 |
|
|
3,313 |
|
|
(2,085) |
|
|
(1,964) |
|
|
(2,148) |
|
|
13,653 |
|
|
13,909 |
|
|
13,345 |
7, 8 |
|
Deferred income taxes |
|
|
331 |
|
|
347 |
|
|
405 |
|
|
307 |
|
|
356 |
|
|
422 |
|
|
(216) |
|
|
(269) |
|
|
(331) |
|
|
422 |
|
|
434 |
|
|
496 |
9 |
|
Long-term borrowings |
|
|
8,857 |
|
|
8,756 |
|
|
8,685 |
|
|
33,404 |
|
|
34,788 |
|
|
34,126 |
|
|
|
|
|
|
|
|
|
|
|
42,261 |
|
|
43,544 |
|
|
42,811 |
|
|
Retirement benefits and other liabilities |
|
|
1,579 |
|
|
1,646 |
|
|
1,695 |
|
|
67 |
|
|
66 |
|
|
70 |
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
1,644 |
|
|
1,710 |
|
|
1,763 |
|
|
Total liabilities |
|
|
23,765 |
|
|
23,921 |
|
|
23,207 |
|
|
62,721 |
|
|
62,952 |
|
|
63,696 |
|
|
(6,945) |
|
|
(6,884) |
|
|
(4,978) |
|
|
79,541 |
|
|
79,989 |
|
|
81,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
|
47 |
|
|
51 |
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47 |
|
|
51 |
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Deere & Company stockholders’ equity |
|
|
27,406 |
|
|
25,950 |
|
|
24,287 |
|
|
6,828 |
|
|
7,069 |
|
|
6,873 |
|
|
(6,828) |
|
|
(7,069) |
|
|
(6,873) |
|
|
27,406 |
|
|
25,950 |
|
|
24,287 |
10 |
|
Noncontrolling interests |
|
|
7 |
|
|
6 |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
6 |
|
|
8 |
|
|
Financial Services’ equity |
|
|
(6,828) |
|
|
(7,069) |
|
|
(6,873) |
|
|
|
|
|
|
|
|
|
|
|
6,828 |
|
|
7,069 |
|
|
6,873 |
|
|
|
|
|
|
|
|
|
10 |
|
Adjusted total stockholders’ equity |
|
|
20,585 |
|
|
18,887 |
|
|
17,422 |
|
|
6,828 |
|
|
7,069 |
|
|
6,873 |
|
|
|
|
|
|
|
|
|
|
|
27,413 |
|
|
25,956 |
|
|
24,295 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
44,397 |
|
$ |
42,859 |
|
$ |
40,712 |
|
$ |
69,549 |
|
$ |
70,021 |
|
$ |
70,569 |
|
$ |
(6,945) |
|
$ |
(6,884) |
|
$ |
(4,978) |
|
$ |
107,001 |
|
$ |
105,996 |
|
$ |
106,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Elimination of receivables / payables between equipment operations and Financial Services.
7 Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.
8 Reclassification of other receivables / payables.
9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
10 Elimination of Financial Services’ equity.
44
DEERE & COMPANY |
|
|
||||||||||||||||||||||||
SUPPLEMENTAL CONSOLIDATING DATA (Continued) |
|
|
||||||||||||||||||||||||
STATEMENTS OF CASH FLOWS |
|
|
||||||||||||||||||||||||
For the Six Months Ended May 3, 2026 and April 27, 2025 |
|
|
||||||||||||||||||||||||
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT |
|
FINANCIAL |
|
|
|
|
|
|
||||||||||||||||
|
|
OPERATIONS |
|
SERVICES |
|
ELIMINATIONS |
|
CONSOLIDATED |
|
|
||||||||||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|
||||||||
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,991 |
|
$ |
2,276 |
|
$ |
434 |
|
$ |
391 |
|
|
|
|
|
|
|
$ |
2,425 |
|
$ |
2,667 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
|
1 |
|
|
11 |
|
|
126 |
|
|
163 |
|
|
|
|
|
|
|
|
127 |
|
|
174 |
|
|
Depreciation and amortization |
|
|
689 |
|
|
643 |
|
|
546 |
|
|
529 |
|
$ |
(51) |
|
$ |
(68) |
|
|
1,184 |
|
|
1,104 |
11 |
|
Impairments and other adjustments |
|
|
|
|
|
|
|
|
|
|
|
(32) |
|
|
|
|
|
|
|
|
|
|
|
(32) |
|
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69 |
|
|
54 |
|
|
69 |
|
|
54 |
12 |
|
Distributed earnings of Financial Services |
|
|
734 |
|
|
984 |
|
|
|
|
|
|
|
|
(734) |
|
|
(984) |
|
|
|
|
|
|
13 |
|
Provision (credit) for deferred income taxes |
|
|
(19) |
|
|
(153) |
|
|
(49) |
|
|
164 |
|
|
|
|
|
|
|
|
(68) |
|
|
11 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables related to sales |
|
|
(225) |
|
|
(185) |
|
|
|
|
|
|
|
|
(859) |
|
|
(884) |
|
|
(1,084) |
|
|
(1,069) |
14, 16 |
|
Inventories |
|
|
(649) |
|
|
(691) |
|
|
|
|
|
|
|
|
(89) |
|
|
(81) |
|
|
(738) |
|
|
(772) |
15 |
|
Accounts payable and accrued expenses |
|
|
(237) |
|
|
(1,069) |
|
|
14 |
|
|
102 |
|
|
(110) |
|
|
69 |
|
|
(333) |
|
|
(898) |
16 |
|
Accrued income taxes payable/receivable |
|
|
15 |
|
|
(77) |
|
|
(20) |
|
|
(70) |
|
|
|
|
|
|
|
|
(5) |
|
|
(147) |
|
|
Retirement benefits |
|
|
(285) |
|
|
(753) |
|
|
(5) |
|
|
(41) |
|
|
|
|
|
|
|
|
(290) |
|
|
(794) |
|
|
Other |
|
|
(335) |
|
|
59 |
|
|
140 |
|
|
224 |
|
|
(50) |
|
|
(13) |
|
|
(245) |
|
|
270 |
11, 12, 15 |
|
Net cash provided by operating activities |
|
|
1,680 |
|
|
1,045 |
|
|
1,186 |
|
|
1,430 |
|
|
(1,824) |
|
|
(1,907) |
|
|
1,042 |
|
|
568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of receivables (excluding receivables related to sales) |
|
|
|
|
|
|
|
|
14,641 |
|
|
14,684 |
|
|
(256) |
|
|
(336) |
|
|
14,385 |
|
|
14,348 |
14 |
|
Proceeds from maturities and sales of marketable securities |
|
|
91 |
|
|
18 |
|
|
167 |
|
|
227 |
|
|
|
|
|
|
|
|
258 |
|
|
245 |
|
|
Proceeds from sales of equipment on operating leases |
|
|
|
|
|
|
|
|
1,019 |
|
|
1,001 |
|
|
|
|
|
|
|
|
1,019 |
|
|
1,001 |
|
|
Cost of receivables acquired (excluding receivables related to sales) |
|
|
|
|
|
|
|
|
(13,273) |
|
|
(12,875) |
|
|
116 |
|
|
131 |
|
|
(13,157) |
|
|
(12,744) |
14 |
|
Acquisition of business, net of cash acquired |
|
|
(439) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439) |
|
|
|
|
|
Purchases of marketable securities |
|
|
(42) |
|
|
(20) |
|
|
(242) |
|
|
(327) |
|
|
|
|
|
|
|
|
(284) |
|
|
(347) |
|
|
Purchases of property and equipment |
|
|
(451) |
|
|
(555) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(451) |
|
|
(555) |
|
|
Cost of equipment on operating leases acquired |
|
|
|
|
|
|
|
|
(1,415) |
|
|
(1,363) |
|
|
120 |
|
|
109 |
|
|
(1,295) |
|
|
(1,254) |
15 |
|
Increase in trade and wholesale receivables |
|
|
|
|
|
|
|
|
(1,110) |
|
|
(1,019) |
|
|
1,110 |
|
|
1,019 |
|
|
|
|
|
|
14 |
|
Collections of receivables from unconsolidated affiliates |
|
|
|
|
|
183 |
|
|
152 |
|
|
51 |
|
|
|
|
|
|
|
|
152 |
|
|
234 |
|
|
Collateral on derivatives – net |
|
|
2 |
|
|
3 |
|
|
(10) |
|
|
24 |
|
|
|
|
|
|
|
|
(8) |
|
|
27 |
|
|
Other |
|
|
(54) |
|
|
(72) |
|
|
(33) |
|
|
(104) |
|
|
|
|
|
|
|
|
(87) |
|
|
(176) |
|
|
Net cash provided by (used for) investing activities |
|
|
(893) |
|
|
(443) |
|
|
(104) |
|
|
299 |
|
|
1,090 |
|
|
923 |
|
|
93 |
|
|
779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds (payments) in short-term borrowings (original maturities three months or less) |
|
|
(4) |
|
|
65 |
|
|
2,250 |
|
|
486 |
|
|
|
|
|
|
|
|
2,246 |
|
|
551 |
|
|
Change in intercompany receivables/payables |
|
|
21 |
|
|
428 |
|
|
(21) |
|
|
(428) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings issued (original maturities greater than three months) |
|
|
252 |
|
|
2,043 |
|
|
3,199 |
|
|
3,113 |
|
|
|
|
|
|
|
|
3,451 |
|
|
5,156 |
|
|
Payments of borrowings (original maturities greater than three months) |
|
|
(181) |
|
|
(766) |
|
|
(5,754) |
|
|
(4,071) |
|
|
|
|
|
|
|
|
(5,935) |
|
|
(4,837) |
|
|
Repurchases of common stock |
|
|
(500) |
|
|
(838) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(500) |
|
|
(838) |
|
|
Dividends paid |
|
|
(878) |
|
|
(843) |
|
|
(734) |
|
|
(984) |
|
|
734 |
|
|
984 |
|
|
(878) |
|
|
(843) |
13 |
|
Other |
|
|
5 |
|
|
(4) |
|
|
(16) |
|
|
(6) |
|
|
|
|
|
|
|
|
(11) |
|
|
(10) |
|
|
Net cash provided by (used for) financing activities |
|
|
(1,285) |
|
|
85 |
|
|
(1,076) |
|
|
(1,890) |
|
|
734 |
|
|
984 |
|
|
(1,627) |
|
|
(821) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash |
|
|
79 |
|
|
22 |
|
|
15 |
|
|
(2) |
|
|
|
|
|
|
|
|
94 |
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash |
|
|
(419) |
|
|
709 |
|
|
21 |
|
|
(163) |
|
|
|
|
|
|
|
|
(398) |
|
|
546 |
|
|
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
|
|
6,364 |
|
|
5,643 |
|
|
2,169 |
|
|
1,990 |
|
|
|
|
|
|
|
|
8,533 |
|
|
7,633 |
|
|
Cash, Cash Equivalents, and Restricted Cash at End of Period |
|
$ |
5,945 |
|
$ |
6,352 |
|
$ |
2,190 |
|
$ |
1,827 |
|
|
|
|
|
|
|
$ |
8,135 |
|
$ |
8,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
12 Reclassification of share-based compensation expense.
13 Elimination of dividends from Financial Services to the equipment operations, which are included in the equipment operations operating activities.
14 Primarily reclassification of receivables related to the sale of equipment.
15 Reclassification of direct lease agreements with retail customers.
16 Reclassification of sales incentive accruals on receivables sold to Financial Services.
45
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See our most recently filed Annual Report on Form 10-K (Part II, Item 7A). There have been no material changes in this information.
Item 4.CONTROLS AND PROCEDURES
Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) were effective as of May 3, 2026, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. During the second quarter of 2026, there were no changes that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
On January 15, 2025, the Federal Trade Commission (FTC), along with the Attorneys General of the States of Illinois and Minnesota, filed a lawsuit against us in the United States District Court for the Northern District of Illinois Western Division. The Attorneys General of the States of Arizona, Michigan, and Wisconsin then joined the lawsuit. The lawsuit alleges monopolization and unfair competition in violation of federal and state antitrust laws. Plaintiffs seek a permanent injunction and other equitable relief to allow owners of our equipment, as well as independent repair providers, access to our repair tools and any other repair resources available to authorized John Deere dealers. On March 17, 2025, we filed a motion to dismiss the lawsuit, the FTC filed a response on April 28, 2025, and we filed a reply on May 28, 2025. A hearing was held on the motion to dismiss and the court denied the motion. We are in discussions with the FTC and plaintiff states with respect to a potential resolution. At this stage we are unable to predict the outcome or impact of this matter on our business.
In addition to the above, the most prevalent legal claims relate to product liability (including asbestos-related liability), employment, patent, trademark, and antitrust matters. Currently, we believe the reasonably possible range of losses for unresolved legal actions would not have a material effect on our financial statements; however, the outcome of any current or future proceedings, claims, or investigations cannot be predicted with certainty. Adverse decisions in one or more of these proceedings, claims, or investigations could require us to pay substantial damages or fines, undertake service actions, initiate recall campaigns, or take other costly actions. It is therefore possible that legal judgments or investigations could give rise to expenses that are not covered or not fully covered by our insurance programs and could affect our financial position and results.
Item 1A.RISK FACTORS
See our most recently filed Annual Report on Form 10-K (Part I, Item 1A). The risks described in the Annual Report on Form 10-K, and the “Forward-Looking Statements” in this report, are not the only risks we face. Additional risks and uncertainties may also materially affect our business, financial condition, or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.
46
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
Purchases of our common stock during the second quarter of 2026 were as follows:
|
|
|
|
|
|
|
Total Number of |
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
Maximum Number of |
|
|
|
|
Total Number of |
|
|
|
|
Part of Publicly |
|
Shares that May Yet Be |
|
|
|
|
Shares |
|
|
|
|
Announced Plans or |
|
Purchased under the |
|
|
|
|
Purchased2 |
|
Average Price |
|
Programs1 |
|
Plans or Programs1 |
|
|
|
Period |
|
(thousands) |
|
Per Share |
|
(thousands) |
|
(millions) |
|
|
|
Feb 2 to Mar 1 |
|
|
|
|
|
|
|
|
13.2 |
|
|
Mar 2 to Mar 29 |
|
155 |
|
$ |
598.45 |
|
155 |
|
13.0 |
|
|
Mar 30 to May 3 |
|
171 |
|
|
590.15 |
|
170 |
|
12.9 |
|
|
Total |
|
326 |
|
|
|
|
325 |
|
|
|
|
1 We have a share repurchase plan that was announced in December 2022 to purchase up to $18.0 billion of shares of our common stock. The maximum number of shares that may yet be purchased under this plan was 12.9 million based on the closing price of our common stock on the New York Stock Exchange as of the end of the second quarter of 2026 of $577.26 per share. At the end of the second quarter of 2026, $7.4 billion of common stock remains to be purchased under this plan.
2 In the second quarter of 2026 one thousand shares of common stock were acquired from a plan participant at a market price of $577.26 per share to pay payroll taxes on the vesting of restricted stock units.
Sales of Unregistered Equity Securities
During the second quarter of 2026, we issued 2,637 deferred stock units under the Deere & Company Nonemployee Director Stock Ownership Plan (“NEDSOP”) to nonemployee directors for their service on our Board of Directors. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in the plan. Deferred stock units and shares of common stock issued under the NEDSOP are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of the SEC’s Regulation D thereunder.
On February 26, 2026, we distributed 5,900 shares of common stock to a participant account under the NEDSOP.
Item 3.DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.MINE SAFETY DISCLOSURES
Not applicable.
Item 5.OTHER INFORMATION
Director and Executive Officer Trading Arrangements
On March 3, 2026, Ryan D. Campbell, President, Construction & Forestry Division and Power Systems, adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the sale of up to 35,959 shares of common stock resulting from the exercise of employee stock options. The plan expires on March 3, 2027.
On March 19, 2026, Felecia J. Pryor, Senior Vice President & Chief People Officer, adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the sale of up to 30% of restricted stock units scheduled to vest in December 2026 (approximately 1,931 shares of common stock). The plan expires on March 19, 2027.
47
Item 6.EXHIBITS
Certain instruments relating to long-term borrowings constituting less than 10% of the registrant’s total assets are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will furnish copies of such instruments to the Commission upon request.
|
|
3.1* |
|
|
|
3.2* |
Bylaws, as amended (Exhibit 3.2 to Form 10-Q of registrant for the quarter ended July 30, 2023) |
|
|
10.1* |
|
|
|
10.2 |
|
|
|
10.3 |
|
|
|
10.4 |
|
|
|
31.1 |
|
|
|
31.2 |
|
|
|
32 |
|
|
|
101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
* Incorporated by reference.
48
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
DEERE & COMPANY |
|||
|
|
|||
|
|
|||
Date: |
May 28, 2026 |
|
By: |
/s/ Brent Norwood |
|
|
|
|
Brent Norwood Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
49
Exhibit 10.2
Execution Version
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
JOHN DEERE BANK S.A.
________________________________________
$5,500,000,000
364-DAY
CREDIT AGREEMENT
Dated as of March 23, 2026
________________________________________
JPMORGAN CHASE BANK, N.A. and J.P. MORGAN SE,
as Administrative Agent
BANK OF AMERICA, N.A.
and
CITIBANK, N.A.,
as Co-Syndication Agents
________________________________________
JPMORGAN CHASE BANK, N.A.,
BOFA SECURITIES, INC.
and
CITIGROUP GLOBAL MARKETS INC.,
as Lead Arrangers and Bookrunners
TABLE OF CONTENTS
Page
SCHEDULES:
EXHIBITS:
Exhibit AForm of Borrowing Notice
Exhibit BForm of Assignment and Assumption
Exhibit CForm of Opinion of General Counsel to the Company
Exhibit DForm of Opinion of Special New York Counsel to the Borrowers
Exhibit EForm of Extension Request
Exhibit FForm of Form W-8BEN-E Tax Letter
Exhibit GForm of Form W-8ECI Tax Letter
Exhibit HForm of Replacement Bank Agreement
Exhibit IForm of Promissory Note
Exhibit JForm of New Bank Supplement
Exhibit KForm of Commitment Increase Supplement
Exhibit LForm of Certificate of Non-Bank Status
1
Schedule ITerms of Subordination Schedule IICommitments CREDIT AGREEMENT, dated as of March 23, 2026, among (a) DEERE & COMPANY, a Delaware corporation (the “Company”), (b) JOHN DEERE CAPITAL CORPORATION, a Delaware corporation (the “Capital Corporation”), (c) JOHN DEERE BANK S.A., a Luxembourg société anonyme (“JD Luxembourg”), (d) the several financial institutions parties hereto (collectively, the “Banks”, and individually, a “Bank”), (e) JPMORGAN CHASE BANK, N.A., as administrative agent hereunder (in such capacity, together with its successors, permitted assigns, designated branch offices or affiliates, including, without limitation, J.P. Morgan SE, collectively, the “Administrative Agent”), and (f) BANK OF AMERICA, N.A. and CITIBANK, N.A., as co-syndication agents hereunder (in such capacity, the “Co-Syndication Agents”).
The parties hereto hereby agree as follows:
| SECTION 1. | DEFINITIONS |
“2029 Credit Agreement”: that certain $3,250,000,000 2029 Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“2031 Credit Agreement”: that certain $3,250,000,000 2031 Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“ABR”: at any particular date, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) 0.5% per annum above the NYFRB Rate and (c) the Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1% (provided that, for the avoidance of doubt, such Term SOFR Rate for any date shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology)). Any change in ABR due to a change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate, respectively. If the ABR is being used as an alternate rate of interest pursuant to subsection 2.11 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to subsection 2.11(b)), then the ABR shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.
“ABR Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon the ABR.
“Act”: as defined in subsection 10.12.
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“Adjusted Daily Simple CORRA”: an interest rate per annum equal to (a) Daily Simple CORRA, plus (b) 0.29547%; provided that if Adjusted Daily Simple CORRA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Daily Simple SONIA”: an interest rate per annum equal to (a) Daily Simple SONIA, plus (b) 0.0326%; provided that if Adjusted Daily Simple SONIA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Term CORRA Rate”: for purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation, plus (b) 0.29547% for a one month interest period or 0.32138% for a three month interest period; provided that if Adjusted Term CORRA Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Administrative Agent”: as defined in the preamble hereto.
“Administrative Questionnaire”: an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Foreign Currency”: as defined in subsection 2.11(a).
“Agent”: the Administrative Agent or the Syndication Agent, as the context shall require; together, the “Agents”.
“Agreement”: this Credit Agreement as amended, supplemented or modified from time to time.
“Agreement Currency”: as defined in subsection 2.24(b).
“Ancillary Document”: as defined in subsection 10.8.
“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction applicable to the Borrowers and their Subsidiaries from time to time concerning or relating to bribery or corruption, including, but not limited to the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) and the UK Bribery Act of 2010.
“Applicable Creditor”: as defined in subsection 2.24(b).
“Applicable Margin”: (a) with respect to ABR Loans, the rate per annum set forth below for ABR Loans in the column corresponding to the Prevailing Rating of the Company, (b) with respect to Eurocurrency Loans, the rate per annum set forth below for Eurocurrency Loans in the column corresponding to the Prevailing Rating of the Company, (c) with respect to Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans, the rate per annum set forth below for Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans in the column corresponding to the Prevailing Rating of the Company and (d) with respect to SONIA Loans, the rate per annum set forth below for SONIA Loans in the column corresponding to the Prevailing Rating of the Company:
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|
Level I Rating |
Level II Rating |
Level III Rating |
Level IV Rating |
Level V Rating |
ABR Loans |
0.00% |
0.00% |
0.00% |
0.00% |
0.25% |
Eurocurrency Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
SONIA Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Each change in the Prevailing Rating resulting from a publicly announced change in the Credit Ratings shall be effective during the period commencing on the date that is 3 Business Days after the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change; provided that in no event shall the Applicable Margin be less than zero.
“Approved Borrower Portal”: has the meaning assigned to it in subsection 9.12.
“Attributable Debt”: as defined in subsection 6.2(b)(ii).
“Australian Dollars”: the lawful currency of Australia.
“Available Commitment”: as to any Bank at any time, an amount equal to the excess, if any, of (a) such Bank’s Commitment then in effect over (b) such Bank’s Loans then outstanding.
“Available Tenor”: as of any date of determination and with respect to the then-current Benchmark in respect of Loans denominated in such Currency, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period with respect to Loans denominated in the applicable Currency pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (e) of subsection 2.11.
“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
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“Bank” and “Banks”: as defined in the preamble hereto.
“Benchmark”: initially, with respect to any (i) SONIA Loan, Adjusted Daily Simple SONIA, (ii) Daily Simple CORRA Loan, Adjusted Daily Simple CORRA, (iii) Daily Simple SOFR Loan, Daily Simple SOFR or (iv) Term Benchmark Loan or Eurocurrency Loan, the Relevant Rate for such Currency; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the applicable Relevant Rate or the then-current Benchmark with respect to Loans denominated in such Currency, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of subsection 2.11.
“Benchmark Replacement”: for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that in the case of any Loan denominated in a Foreign Currency (other than any Loan denominated in Canadian Dollars), “Benchmark Replacement” shall mean the alternative set forth in (2) below:
(1)in the case of any Loan denominated in Dollars, the Daily Simple SOFR and/or in the case of any Loan denominated Canadian Dollars, the Adjusted Daily Simple CORRA;
(2)the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor with respect to Loans denominated in such Currency giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in the applicable Currency at such time and (b) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment”: with respect to any replacement of the then-current Benchmark with respect to Loans denominated in any Currency with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency at such time.
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“Benchmark Replacement Conforming Changes”: with respect to any Benchmark Replacement in respect of Loans denominated in any Currency, any technical, administrative or operational changes (including changes to the definition of “ABR,” the definition of “Business Day,” the definition of “SONIA Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion (in consultation with the Company) may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent reasonably determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent determines (in consultation with the Company) is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents); provided that, notwithstanding anything herein to the contrary, no “Benchmark Replacement Conforming Changes” shall result in any material effect on the timing or amount of payments or borrowings without the consent of the Company.
“Benchmark Replacement Date”: with respect to the Benchmark for any Loan denominated in any Currency, the earliest to occur of the following events with respect to such then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event”: with respect to the Benchmark for any Loan denominated in any Currency, the occurrence of one or more of the following events with respect to such then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
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(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, the CORRA Administrator, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period”: with respect to the Benchmark for any Loan denominated in any Currency, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11.
“Beneficial Ownership Certification”: a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.
“benefitted Bank”: as defined in subsection 10.6.
“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Borrower”: the Company, the Capital Corporation or JD Luxembourg; collectively, the “Borrowers”.
“Borrowing Date”: in respect of any Loan, the date such Loan is made.
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“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City or Chicago are authorized or required by law to close; provided, that (a) when used in connection with a Foreign Currency Loan, (in each case, other than in connection with any calculation or determination of interest rate in respect of a SONIA Loan or a Loan denominated in Euros), the term “Business Day” shall also exclude any day on which banks are authorized or required by law to be closed in the principal financial center for that currency, including without limitation, Toronto in respect of Loans denominated in Canadian Dollars, (b) in relation to any calculation or determination of interest rate in respect of a SONIA Loan, “Business Day” shall mean a SONIA Business Day, (c) in relation to any calculation or determination of interest rate in respect of any Loan denominated in Euros and in relation to the calculation or computation of the Eurocurrency Rate in respect thereof, “Business Day” shall mean any day which is a TARGET Day and (d) in relation to any calculation or determination of interest rate in respect of any Daily Simple SOFR Loan, “Business Day” shall mean any day which is a U.S. Government Securities Business Day.
“Calculation Date”: with respect to each Foreign Currency, the last day of each calendar quarter (or, if such day is not a Business Day, the next succeeding Business Day) and such other days from time to time as the Administrative Agent shall reasonably designate as a “Calculation Date”; provided, that the second Business Day preceding each Borrowing Date with respect to, and preceding each date of any borrowing, conversion or continuation of, any Foreign Currency Loan shall also be a “Calculation Date” with respect to the relevant Foreign Currency; provided further that with respect to any SONIA Loan, Daily Simple SOFR Loan or Daily Simple CORRA Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month) shall also be a “Calculation Date”.
“Calendar Quarter”: a three-month period consisting of (i) each January, February and March, (ii) each April, May and June, (iii) each July, August and September or (iv) each October, November and December.
“Canadian Dollars”: the lawful currency of Canada.
“Cancelled Bank”: (i) any Bank that has the whole or any part of its Commitment cancelled under subsection 2.13(a), (b) or (c), subsection 2.16(c) or subsection 2.17(b) or the Commitment of which has expired under subsection 2.16(a) and (ii) any Defaulting Bank that the Company designates in writing to such Bank and the Administrative Agent as a Cancelled Bank.
“Capital Corporation”: as defined in the preamble hereto.
“CBR Loan”: a Loan that bears interest at a rate determined by reference to the Central Bank Rate.
“CBR Spread”: the Applicable Margin, applicable to such Loan that is replaced by a CBR Loan.
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“Central Bank Rate”: a rate equal to the greater of (i) (A) for any Loan denominated in (a) Pounds Sterling, the Bank of England (or any successor thereto)’s “Bank Rate” as published by the Bank of England (or any successor thereto) from time to time, (b) Euros, one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers): (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time, and (c) subject to subsection 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars, any other Foreign Currency, a central bank rate as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers), plus (B) the applicable Central Bank Rate Adjustment and (ii) the Floor.
“Central Bank Rate Adjustment”: for any day, for any Loan denominated in (a) Euros, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Eurocurrency Rate for Loans denominated in Euros for the five most recent Business Days preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest Eurocurrency Rate applicable during such period of five Business Days) minus (ii) the Central Bank Rate in respect of Euros in effect on the last Business Day in such period, (b) Pounds Sterling, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of Adjusted Daily Simple SONIA for Loans in Pounds Sterling for the five most recent SONIA Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest such Adjusted Daily Simple SONIA applicable during such period of five SONIA Business Days) minus (ii) the Central Bank Rate in respect of Pounds Sterling in effect on the last SONIA Business Day in such period, and (c) subject to Section 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars, any other Foreign Currency, a Central Bank Rate Adjustment as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers). For purposes of this definition, (x) the term Central Bank Rate shall be determined disregarding clause (B) of the definition of such term and (y) the Eurocurrency Rate in respect of Loans denominated in Euros on any day shall be based on the EURIBOR Screen Rate on such day at approximately the time referred to in the definition of such term for deposits in Euros for a maturity of one month.
“Certificate of Non-Bank Status”: a certificate substantially in the form and substance of Exhibit L.
“Closing Date”: the date on which each of the conditions precedent specified in subsection 4.1 shall have been satisfied (or compliance therewith shall have been waived by the Majority Banks hereunder).
“CME Term SOFR Administrator”: CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
“Co-Syndication Agents”: as defined in the preamble hereto.
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Commitment”: as to any Bank, the amount set opposite such Bank’s name on Schedule II or in any assignment pursuant to which such Bank becomes a party hereto with respect to any interest purchased therein, as such amount may be modified as provided herein; collectively, as to all Banks, the “Commitments”.
“Commitment Expiration Date”: as defined in subsection 2.16(a).
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“Commitment Fee Rate”: the rate per annum set forth below in the column corresponding to the Prevailing Rating of the Company:
Level I Rating |
Level II Rating |
Level III Rating |
Level IV Rating |
Level V Rating |
0.02% |
0.025% |
0.03% |
0.05% |
0.09% |
“Commitment Increase Cap”: at any time, an amount equal to (i) $2,000,000,000, minus (ii) the sum of (A) the aggregate increase in Commitments incurred by any Borrower in reliance on subsection 2.20, (B) the aggregate increase in Commitments (as defined in the 2029 Credit Agreement), if any, under the 2029 Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 2029 Credit Agreement) and (C) the aggregate increase in Commitments (as defined in the 2031 Credit Agreement), if any, under the 2031 Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 2031 Credit Agreement).
“Commitment Increase Notice”: as defined in subsection 2.20(a).
“Commitment Increase Supplement”: as defined in subsection 2.20(c).
“Commitment Percentage”: as to any Bank at any time, the percentage which such Bank’s Commitment at such time constitutes of all the Commitments at such time or, at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Bank’s Loans then outstanding constitutes of the aggregate principal amount of all Loans then outstanding; collectively, as to all the Banks, the “Commitment Percentages”; provided that when a Defaulting Bank shall exist, “Commitment Percentage” shall mean, when appropriate as determined by the Administrative Agent in order to provide ratable treatment at any time a Defaulting Bank exists (and without increasing the Commitment of any Bank), the percentage of the total Commitments (disregarding any Defaulting Bank’s Commitment) represented by such Bank’s Commitment.
“Commitment Period”: as to any Bank at any time, the period from and including the Closing Date to but not including the Termination Date of such Bank or such earlier date on which the Commitments shall terminate as provided herein.
“Committed Rate Loans”: each loan made pursuant to subsection 2.1.
“Commonly Controlled Entity”: in relation to a Borrower, an entity, whether or not incorporated, which is under common control with such Borrower within the meaning of Section 414(b) or (c) of the Code.
“Company”: as defined in the preamble hereto.
“Consolidated Capital Base”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, the sum of (a) the amount shown opposite the item “Total Stockholders’ Equity” on the consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries plus (b) all indebtedness of the Capital Corporation and its consolidated Subsidiaries for borrowed money subordinated (on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I) to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the sum of clauses (a) and (b) hereof as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that the sum of the amounts referred to in clauses (a) and (b) is determined in accordance with GAAP.
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Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, adjustments resulting from any accumulated other comprehensive income as reflected on the most recent publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of any fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be deemed not to be included in Consolidated Capital Base.
“Consolidated Net Worth”: as defined in subsection 6.2(b)(ii).
“Consolidated Senior Debt”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, indebtedness for borrowed money other than any indebtedness for borrowed money that is subordinated, on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I, to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the amount of such indebtedness for borrowed money (other than such subordinated indebtedness) as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that such amount is determined in accordance with GAAP. Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, indebtedness for borrowed money in respect of any Securitization Indebtedness shall be deemed not included in Consolidated Senior Debt.
“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.
“CORRA”: the Canadian Overnight Repo Rate Average administered and published by the CORRA Administrator.
“CORRA Administrator”: the Bank of Canada (or any successor administrator).
“CORRA Determination Date”: as defined in the definition of Daily Simple CORRA.
“CORRA Rate Day”: as defined in the definition of Daily Simple CORRA.
“Corresponding Tenor”: with respect to any Available Tenor, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Credit Rating”: as of any date, (a) as to any Person, the rating assigned to the relevant long term senior unsecured (and non-credit enhanced) Debt obligations of such Person by Moody’s, S&P or Fitch, in each case as of the close of business on such date and (b) if no rating for such Debt described in clause (a) is available, the corporate credit rating of such Person as announced by Moody’s, S&P or Fitch, in each case as of the close of business on such date.
“Currency”: any Dollars and any Foreign Currency.
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“Daily Simple CORRA”: for any day (a “CORRA Rate Day”), a rate per annum equal to CORRA for the day (such day “CORRA Determination Date”) that is five (5) Business Days prior to (i) if such CORRA Rate Day is a Business Day, such CORRA Rate Day or (ii) if such CORRA Rate Day is not an Business Day, the Business Day immediately preceding such CORRA Rate Day, in each case, as such CORRA is published by the CORRA Administrator on the CORRA Administrator’s website. Any change in Daily Simple CORRA due to a change in CORRA shall be effective from and including the effective date of such change in CORRA without notice to the Borrower. If by 5:00 p.m. (Toronto time) on any given CORRA Determination Date, CORRA in respect of such CORRA Determination Date has not been published on the CORRA Administrator’s website and a Benchmark Replacement Date with respect to the Daily Simple CORRA has not occurred, then CORRA for such CORRA Determination Date will be CORRA as published in respect of the first preceding Business Day for which such CORRA was published on the CORRA Administrator’s website, so long as such first preceding Business Day is not more than five (5) Business Days prior to such CORRA Determination Day.
“Daily Simple CORRA Loan”: a Loan that bears interest at a rate based on the Adjusted Daily Simple CORRA.
“Daily Simple SOFR”: for any day (a “SOFR Rate Day”), a rate per annum equal to (a) SOFR for the day (such day “SOFR Determination Date”) that is five U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website or (b) if SOFR is not available for the SOFR Determination Date determined pursuant to clause (a) above, by 5:00 p.m., New York City time, on any day of determination of Daily Simple SOFR, then Daily Simple SOFR for such day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day prior to the SOFR Determination Date for which SOFR was published on the SOFR Administrator’s Website; provided that Daily Simple SOFR determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three consecutive SOFR Rate Days and thereafter subsection 2.11(a) shall govern; provided, further, that if Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
“Daily Simple SOFR Loan”: a Loan that bears interest at a rate based on the Daily Simple SOFR.
“Daily Simple SONIA”: for any day (a “SONIA Interest Day”), an interest rate per annum equal to (a) SONIA for the day that is five SONIA Business Days (such fifth SONIA Business Day determined pursuant to each of subclauses (i) and (ii), the “SONIA Lookback Day”) prior to (i) if such SONIA Interest Day is a SONIA Business Day, such SONIA Interest Day or (ii) if such SONIA Interest Day is not a SONIA Business Day, the SONIA Business Day immediately preceding such SONIA Interest Day or (b) if SONIA is not available for the SONIA Lookback Day determined pursuant to clause (a) above, by 5:00 p.m., London time on any day of determination of Daily Simple SONIA, then Daily Simple SONIA for such day will be SONIA as published in respect of the first preceding SONIA Business Day prior to the SONIA Lookback Day for which SONIA was published on the SONIA Administrator’s Website; provided that Daily Simple SONIA determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SONIA for no more than three consecutive SONIA Interest Days and thereafter subsection 2.11(a) shall govern. Any change in Daily Simple SONIA due to a change in SONIA shall be effective from and including the effective date of such change in SONIA without notice to the Borrower.
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“Deal Year”: as defined in subsection 2.16(c).
“Debt”: as defined in subsection 6.2.
“Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Defaulting Bank”: any Bank that has (a) failed to fund any portion of its Loans within two Business Days of the date required to be funded by it hereunder, unless such Bank has notified the Administrative Agent and the Borrower that such failure is the result of such Bank’s good faith determination that one or more conditions precedent to funding has not been satisfied; (b) notified the Company, the Administrative Agent, any Bank in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit; (c) failed, within three Business Days after written request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans; provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower; (d) otherwise failed to pay over to the Administrative Agent or any other Bank any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute; or (e) (i) become or is insolvent or has a parent company that has become or is insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or (iii) become or has a parent company that has become the subject of a Bail-In Action; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank. If any Bank shall become a Defaulting Bank, the Company shall have the right, so long as no Event of Default has occurred and is then continuing, upon giving written notice to the Administrative Agent and such Bank in accordance with subsection 2.6, notwithstanding subsection 2.12(b), to prepay in full the Loans of such Bank, together with accrued interest thereon, any amounts payable to such Bank pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid commitment fee or other amount payable to such Bank hereunder and/or, upon giving not less than three Business Days’ notice to such Bank and the Administrative Agent, to cancel the whole or part of the Commitment of any such Bank.
“Designated Person”: a Person
(i) listed in the annex to, or otherwise the subject of the provisions of, any Executive Order;
(ii) named as a “Specially Designated National and Blocked Person” on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list (each, an “SDN”), or is otherwise the subject or target of any Sanctions Laws and Regulations, including the Crimea, so-called Donetsk People’s Republic, so-called Luhansk People’s Republic and the non-government controlled areas of the Kherson and Zaporizhzhia regions of Ukraine, Cuba, Iran, North Korea and Syria; or
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(iii) in which an SDN has a controlling interest of 50% or greater ownership interest.
“Dividing Person”: as defined in the definition of Division.
“Division”: the statutory division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement) pursuant to Section 18-217 of the Delaware Limited Liability Company Act, which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor”: any person that, upon the consummation of a Division of a Dividing Person, holds all or substantially all of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division.
“Dollar Equivalent”: at any time as to any amount denominated in a Foreign Currency, the equivalent amount in Dollars as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of Dollars with such Foreign Currency on (a) in the case of a determination made pursuant to subsection 2.11(g), the date of such conversion and (b) in the case of any other determination, the most recent Calculation Date for such Foreign Currency.
“Dollar Loan”: any Committed Rate Loan denominated in Dollars.
“Dollars” and “$”: dollars in lawful currency of the United States of America.
“Domestic Bank”: any Bank organized under the laws of the United States of America, any State thereof or the District of Columbia.
“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Signature”: an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“EMU”: the Economic and Monetary Union as contemplated in the Treaty.
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“Engaged Acres”: the number of unique acres with at least one operation pass documented in the Company’s proprietary online farm management system in the 12 months prior to the end of the fiscal year.
“Equipment Operations”: those business segments of the Company and its consolidated Subsidiaries that are primarily engaged in the manufacture and distribution of equipment, parts and related attachments.
“Equipment Operations Debt”: at a particular time, the sum of short-term and long-term indebtedness for borrowed money that is or would be shown on a balance sheet of Equipment Operations (with Financial Services reflected only on an equity basis), which balance sheet was or would be prepared on the basis of the most recent publicly available consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter of the Company and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Company and its consolidated Subsidiaries).
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Euro”: the single currency of Participating Member States of the EMU introduced in accordance with the provisions of Article 123 of the Treaty and, in respect of all payments to be made under this Agreement in Euro, means immediately available, freely transferable funds in such currency.
“EURIBOR Screen Rate”: as defined in the definition of Eurocurrency Rate.
“Eurocurrency Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon a Eurocurrency Rate.
“Eurocurrency Rate”: (a) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Australian Dollars, the rate per annum equal to the average bid reference rate as administered by the Australian Financial Markets Association (or any other Person that takes over the administration of that rate) for Australian Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BBSY of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BBSY Screen Rate”) at approximately 11:00 A.M., Local Time, two Business Days prior to the beginning of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BBSY Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
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(b) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in New Zealand Dollars, the rate per annum equal to the average bid reference rate as administered by the New Zealand Financial Markets Association (or any other Person that takes over the administration of that rate) for New Zealand Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BKBM of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BKBM Screen Rate”) at approximately 11:00 A.M., Local Time, on the first day of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BKBM Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
(c) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Euros, the rate per annum equal to the interbank offered rate administered by the European Money Markets Institute (or any other Person that takes over the administration of such rate) for a tenor equal in length to such Interest Period as displayed on page on Reuters Page EURIBOR01 (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “EURIBOR Screen Rate”) at approximately 11:00 a.m., Local Time, two Business Days prior to the beginning of such Interest Period; provided, that, if the EURIBOR Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
Notwithstanding the above, in no event shall the Eurocurrency Rate be less than the Floor.
“Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Exchange Rate”: on any day, the rate at which the starting Currency may be exchanged into the other relevant Currency, as set forth at approximately 10:00 A.M., Local Time, on such date on the Reuters World Spots page for such starting Currency. In the event that such rate does not appear on any Reuters World Spots page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates reasonably selected by the Administrative Agent.
“Exposure”: (a) with respect to an Objecting Bank at any time, the aggregate amount of such Bank’s Loans then outstanding and (b) with respect to any other Bank at any time, the Commitment of such Bank then in effect or, if the Commitments have been terminated, the amount of such Bank’s Loans then outstanding.
“Extension Request”: each request by the Borrowers made pursuant to subsection 2.16 for the Banks to extend this Agreement, which shall contain the information in respect of such extension specified in Exhibit E and shall be delivered to the Administrative Agent in writing.
“FATCA”: Sections 1471 through 1474 of the Code (and any comparable successor provisions), any effective regulations published thereunder or official interpretations thereof issued by any Governmental Authority charged with the administration thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreements with respect thereto, and any treaty, law, regulations, or other official guidance enacted in any other jurisdiction relating to such intergovernmental agreement.
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“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“Federal Reserve Board”: the Board of Governors of the Federal Reserve System of the United States of America.
“Financial Services”: the businesses of the Company (including the credit businesses) that are not primarily engaged in Equipment Operations.
“Fitch”: Fitch Ratings Inc.
“Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, all of the Capital Corporation’s and its consolidated Subsidiaries’ consolidated interest on indebtedness for borrowed money, amortization of discounts of indebtedness for borrowed money, the portion of rentals under financing leases deemed to represent interest and rentals under operating leases; provided, that, notwithstanding the foregoing, (i) consolidated interest on Securitization Indebtedness and amortization of Securitization Indebtedness shall be deemed not included in Fixed Charges and (ii) any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk shall be deemed not included in Fixed Charges; provided, further, that such amounts (but not any amounts constituting consolidated interest on, or amortization of, Securitization Indebtedness) of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available consolidated statements of income of the Capital Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such amounts are determined in accordance with GAAP.
“Floor” the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA, Adjusted Daily Simple CORRA or the Central Bank Rate, as applicable. For the avoidance of doubt, the initial Floor for each of the Central Bank Rate, Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA and Adjusted Daily Simple CORRA shall be 0.0%.
“Foreign Bank”: any Bank that is not a Domestic Bank.
“Foreign Currency”: (a) Euros, Pounds Sterling, Australian Dollars and Canadian Dollars, (b) upon (i) confirmation by Deutsche Bank AG, New York Branch to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars and (ii) confirmation by Sumitomo Mitsui Banking Corporation to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars (provided, that, such confirmation from either Deutsche Bank AG, New York Branch or Sumitomo Mitsui Banking Corporation shall not be required if such Bank ceases to be a Bank hereunder), New Zealand Dollars and (c) as agreed by the Administrative Agent, any other Currency which is freely traded and convertible into Dollars in the London interbank market and for which the Dollar Equivalent thereof can be calculated from time to time.
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“Foreign Currency Equivalent”: at the time of determination or conversion thereof, as applicable, as to any amount denominated or expressed in Dollars, the equivalent amount in the applicable Foreign Currency as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of such Foreign Currency with Dollars on such date.
“Foreign Currency Loan”: each Loan denominated in a Foreign Currency.
“GAAP”: generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of the fiscal year ended November 2, 2025, except with respect to capital lease obligations, in which case the generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of January 1, 2015 shall apply.
“Governmental Authority”: any nation or government, any state or local or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Hedging Transaction”: any swap transaction, interest rate protection agreement (including any interest rate swap, interest “cap” or “collar” or any other interest rate hedging device entered into by the Capital Corporation or one or more of its Subsidiaries), option agreement, short or long position in equity or debt instruments, commodities, futures and forward transactions, outperformance agreement or other similar transaction, agreement or arrangement entered into by the Capital Corporation or one or more of its Subsidiaries.
“IBA”: has the meaning assigned to such term in subsection 1.4.
“Important Property”: (a) any manufacturing plant, including land, all buildings and other improvements thereon, and all manufacturing machinery and equipment located therein, owned and used by the Company or a Restricted Subsidiary primarily for the manufacture of products to be sold by the Company or such Restricted Subsidiary, (b) the executive office and administrative building of the Company in Moline, Illinois, and (c) research and development facilities, including land and buildings and other improvements thereon and research and development machinery and equipment located therein, in each case, owned and used by the Company or a Restricted Subsidiary; except in any case property of which the aggregate fair value as determined by the Board of Directors of the Company does not at the time exceed 1% of Consolidated Net Worth.
“Increasing Bank”: as defined in subsection 2.20(c).
“Indemnified Person”: as defined in subsection 10.4(b).
“Indemnified Taxes”: as defined in subsection 2.17(a).
“Index Debt”: any senior, unsecured, non-credit enhanced long-term debt issued by the Company.
“Interest Payment Date”: (a) as to any ABR Loan, the last Business Day of each March, June, September and December, commencing on the first of such days to occur after such ABR Loan is made or a Eurocurrency Loan or Term Benchmark Loan is converted to an ABR Loan, (b) as to any Eurocurrency Loan or Term Benchmark Loan, the last day of each Interest Period applicable thereto, provided that as to any Eurocurrency Loan or Term Benchmark Loan in respect of which a Borrower has selected an Interest Period of greater than three months, interest shall also be paid on the day which is three months after the beginning of such Interest Period, (c) as to any SONIA Loan, Daily Simple CORRA Loan or Daily Simple SOFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing Date of such Loan (or if there is no numerically corresponding day in such later month, then the last day of such month) and (d) the Termination Date.
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“Interest Period”: (a) with respect to any Eurocurrency Loan or Term Benchmark Loan, the period commencing on the Borrowing Date, the date any ABR Loan is converted to a Eurocurrency Loan or Term Benchmark Loan, as applicable or the date any Eurocurrency Loan or Term Benchmark Loan, as applicable is continued as a Eurocurrency Loan or Term Benchmark, as applicable, as the case may be, with respect to such Eurocurrency Loan or Term Benchmark Loan, as applicable and ending one, three or six months thereafter in the case of any Eurocurrency Loan or Term Benchmark Loan denominated in any Currency other than Canadian Dollars (or, with the consent of all relevant Banks, twelve months thereafter, or a period of less than one month thereafter if all relevant Banks consent to such period) (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment), or one or three months thereafter in the case of any Term Benchmark Loan denominated in Canadian Dollars, as selected by a Borrower in its notice of borrowing, conversion or continuance as provided in subsection 2.1(c) or 2.9; and
(b) with respect to any Negotiated Rate Loan, the period or periods commencing on the Borrowing Date with respect to such Negotiated Rate Loan or the last day of any Interest Period with respect thereto and ending on the dates as shall be mutually agreed upon between the relevant Borrower and the relevant Bank;
provided, that all of the foregoing provisions relating to Interest Periods are subject to the following:
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“IRS”: as defined in subsection 2.17(c).
“ISDA Definitions”: the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“JD Luxembourg”: as defined in the preamble hereto.
“JPMorgan Chase Bank, N.A.”: JPMorgan Chase Bank, N.A., a national association.
“Judgment Currency”: as defined in subsection 2.24.
“Level”: Level I Rating, Level II Rating, Level III Rating, Level IV Rating or Level V Rating, as the context shall require.
“Level I Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is Aa3 or higher by Moody’s, AA- or higher by S&P and AA- or higher by Fitch.
“Level II Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A1 by Moody’s, A+ by S&P and A+ by Fitch.
“Level III Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A2 by Moody’s, A by S&P and A by Fitch.
“Level IV Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A3 by Moody’s, A- by S&P and A- by Fitch.
“Level V Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is below A3 by Moody’s, below A- by S&P and below A- by Fitch.
“Loan Account”: as defined in subsection 2.3; collectively, the “Loan Accounts”.
“Loan Assignees”: as defined in subsection 10.5(c).
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“Loan Assignment”: an Assignment and Assumption, substantially in the form of Exhibit B.
“Loan Documents”: this Agreement, including schedules and exhibits hereto, and the Notes.
“Loans”: the collective reference to the Committed Rate Loans and the Negotiated Rate Loans.
“Local Time”: (a) in the case of Foreign Currency Loans denominated in Canadian Dollars, Toronto, Ontario time, (b) in the case of Foreign Currency Loans denominated in Australian Dollars, Sydney, Australia time, (c) in the case of Foreign Currency Loans denominated in New Zealand Dollars, Wellington, New Zealand time, (d) in the case of Foreign Currency Loans denominated in Euros, Brussels time, (e) in the case of all other Foreign Currency Loans, London time and (f) in all other cases, New York time.
“Losses”: as defined in subsection 10.4(b).
“Luxembourg Obligations”: the collective reference to the unpaid principal of and interest on the Loans made to JD Luxembourg and all other obligations and liabilities of JD Luxembourg (including, without limitation, interest accruing at the then applicable rate provided herein after the maturity of such Loans and interest accruing at the then applicable rate provided herein after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to JD Luxembourg, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Banks that are required to be paid by JD Luxembourg pursuant to the terms of any of the foregoing agreements).
“Majority Banks”: at any particular time, Banks having Commitment Percentages aggregating more than fifty percent; provided that (a) at any time after the termination of all the Commitments, “Majority Banks” shall mean Banks holding Loans aggregating more than fifty percent in principal amount of all outstanding Loans and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Majority Banks” shall mean Banks whose Exposure aggregates more than fifty percent of the aggregate Exposure of all the Banks.
“Margin Stock”: as defined in Regulation U of the Board.
“Moody’s”: Moody’s Investor Service, Inc.
“Mortgage”: as defined in subsection 6.2.
“Negotiated Rate Loan”: each Loan made to the Company or the Capital Corporation by a Bank pursuant to a Negotiated Rate Loan Request in such principal amount, for such number of Interest Periods (subject to the proviso to the definition of “Interest Period” in this subsection 1.1) and having such interest rate(s) and repayment terms as shall, in each case, be mutually agreed upon between such Borrower and such Bank.
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“Negotiated Rate Loan Request”: each request by the Company or the Capital Corporation for a Bank to make Negotiated Rate Loans, which shall be delivered to such Bank in writing, by facsimile transmission, or by telephone, immediately confirmed in writing, and which shall specify the amount to be borrowed and the proposed Borrowing Date.
“Net Earnings Available for Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, the sum of (i) consolidated net earnings of the Capital Corporation and such Subsidiaries for such period without deduction of Fixed Charges and without deduction of federal, state or other income taxes; provided that such net earnings of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available statements of income of the Capital Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such net earnings are determined in accordance with GAAP, except that earned investment tax credits may be included as revenue in the consolidated income statement of the Capital Corporation and its consolidated Subsidiaries, rather than as an offset against the provision for income taxes; provided, further, that such consolidated net earnings of the Capital Corporation and its Consolidated Subsidiaries for such period shall not include any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk and (ii) Support Payments received by the Capital Corporation in or in respect of such period.
“New Bank”: as defined in subsection 2.20(b).
“New Bank Supplement”: as defined in subsection 2.20(b).
“New Zealand Dollars”: the lawful currency of New Zealand.
“Non-Qualifying Bank”: as defined in subsection 2.17(e).
“Notes”: the collective reference to any promissory note evidencing Loans.
“NYFRB”: the Federal Reserve Bank of New York.
“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“NYFRB’s Website”: the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
“Objecting Banks”: as defined in subsection 2.16(a).
“Offered Increase Amount”: as defined in subsection 2.20(a).
“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.
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“Overnight Rate”: for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Effective Rate, and (b) with respect to any amount denominated in a Foreign Currency, at a rate reasonably determined by the Administrative Agent to be the cost to it of funding such amounts.
“Participant Register”: as defined in subsection 10.5(b).
“Participants”: as defined in subsection 10.5(b).
“Participating Member State”: any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
“Payment”: as defined in subsection 9.4(b).
“Payment Notice”: as defined in subsection 9.4(b).
“Periodic Term CORRA Determination Day”: as defined in the definition of Term CORRA.
“Person”: an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature, provided that for purposes of subsection 8(h), Person shall also include two or more entities acting as a syndicate or any other group for the purpose of acquiring, holding or disposing of securities of the Company.
“Plan”: any pension plan which is covered by Title IV of ERISA and in respect of which either Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.
“Pounds” or “£” or “Pounds Sterling”: the lawful currency of the United Kingdom.
“Prevailing Rating”: at any date of determination, the Level then applicable; provided that for purposes of determining the applicable Level when the assigned Credit Ratings of the Company by all three Ratings Agencies do not fall within the same Level: (i) if the Credit Ratings of the Company assigned by S&P and Moody’s fall within the same Level, the Prevailing Rating shall be such Level, (ii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is one Level, the Prevailing Rating shall be determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s and (iii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is more than one Level, the Prevailing Rating shall be the Level one notch lower than the Level determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s.
“Prime Rate”: the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
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“Purchasing Banks”: as defined in subsection 10.5(d).
“Ratings Agencies”: S&P, Moody’s and Fitch.
“Re-Allocation Date”: as defined in subsection 2.20(e).
“Reference Time”: with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two Business Days preceding the date of such setting, (2) if such Benchmark is the Eurocurrency Rate in respect of Loans denominated in Euros, 11:00 a.m. Brussels time two TARGET Days preceding the date of such setting, (3) if such Benchmark is SONIA, then four SONIA Business Days prior to such setting, (4) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting, (5) if such Benchmark is Daily Simple CORRA, then four Business Days prior to such setting, (6) if such Benchmark is the Term CORRA Rate, 1:00 p.m. Toronto local time on the day that is two Business Days preceding the date of such setting and (7) if such Benchmark is none of the Term SOFR Rate, the EURIBOR Rate, SONIA, Daily Simple SOFR, Daily Simple CORRA or the Term CORRA, the time determined by the Administrative Agent in its reasonable discretion.
“Register”: as defined in subsection 10.5(e).
“Related Parties”: means, with respect to any specified Person, such Person’s affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s affiliates.
“Relevant Governmental Body”: (a) with respect to a Benchmark Replacement in respect of Loans denominated in Dollars, the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto, (b) with respect to a Benchmark Replacement in respect of Loans denominated in Pounds Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (c) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto (d) with respect to Benchmark Replacement in respect of Loans denominated in Canadian Dollars, the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto, and (e) with respect to a Benchmark Replacement in respect of Loans denominated in any Foreign Currency (other than Pounds Sterling, Euros or Canadian Dollars), (i) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated or any central bank or other supervisor which is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark Replacement or (ii) any working group or committee officially endorsed or convened by (1) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated, (2) any central bank or other supervisor that is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement, (3) a group of those central banks or other supervisors or (4) the Financial Stability Board or any part thereof.
“Relevant Rate”: with respect to (i) any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Rate, (ii) any Eurocurrency Loan denominated in any Currency, the Eurocurrency Rate applicable thereto, (iii) any Loan denominated in Pounds Sterling, Daily Simple SONIA, (iv) any Daily Simple SOFR Loan, Daily Simple SOFR, (v) any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA and (vi) any Daily Simple CORRA Loan, Daily Simple CORRA.
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“Report Period”: as defined in subsection 2.18.
“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder.
“Required Banks”: at a particular time, Banks having Commitment Percentages aggregating at least 66-2/3%; provided that (a) at any time after the termination of all the Commitments, “Required Banks” means Banks holding Loans aggregating at least 66-2/3% in principal amount of all outstanding Loans and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Required Banks” means Banks whose Exposure aggregates at least 66-2/3% of the aggregate Exposure of all the Banks.
“Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserves”: as defined in subsection 2.13(c).
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”: of a Borrower, the Chairman, the President, any Executive, Senior or other Vice President, the Treasurer, any Assistant Secretary and any Assistant Treasurer of such Borrower.
“Restricted Margin Stock”: any Margin Stock, the sale, pledge or other disposition of which by the Company or any of its Subsidiaries is in any way restricted by an arrangement with any Bank or any affiliate thereof to the extent that the value thereof (determined in accordance with Regulation U of the Board) does not exceed 25% of the value (determined in accordance with such Regulation U) of all the assets subject to such restriction.
“Restricted Subsidiary”: any Subsidiary of the Company incorporated in the United States of America or Canada (a) which is engaged in, or whose principal assets consist of property used by the Company or any Restricted Subsidiary in, the manufacture of products within the United States of America or Canada or in the sale of products principally to customers located in the United States of America or Canada except any corporation which is a retail dealer in which the Company has, directly or indirectly, an investment, or (b) which the Company shall designate as a Restricted Subsidiary in an officers’ certificate signed by two Responsible Officers of the Company and delivered to the Administrative Agent.
“S&P”: Standard and Poor’s Financial Services LLC.
“Sale and Lease-back Transaction”: as defined in subsection 6.3.
“Sanctions Laws and Regulations”:
(i) any sanctions, prohibitions or requirements imposed by any executive order (an “Executive Order”) or by any sanctions program administered by the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) or U.S. Department of State; and
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(ii) any sanctions measures imposed by the United Nations Security Council, the European Union or the United Kingdom, His Majesty’s Treasury and the Hong Kong Monetary Authority.
“Screen Rate”: the EURIBOR Screen Rate, the BBSY Screen Rate and/or the BKBM Screen Rate, as applicable.
“Securitization Indebtedness”: the aggregate outstanding indebtedness for borrowed money, owner trust certificates (however classified) or credit enhancements incurred in connection with transactions involving (i) the sale, transfer or other disposition of receivables or leases (retail or wholesale) by the Capital Corporation or any of its Subsidiaries and (ii) the issuance of commercial paper, medium term notes or any other form of financing by any structured bankruptcy-remote Subsidiary of the Capital Corporation or any related conduit lender (such transactions, “Securitizations”), provided, that the aggregate outstanding credit enhancements in the form of cash or letter(s) of credit provided by the Capital Corporation or any of its Subsidiaries (other than any structured bankruptcy-remote Subsidiary) in excess of 10% of the aggregate outstanding indebtedness for borrowed money and owner trust certificates (however classified) incurred in connection with such Securitizations shall not be deemed for the purposes of this Agreement to be Securitization Indebtedness, but shall be deemed for purposes of subsection 7.2 to be Consolidated Senior Debt.
“Significant Subsidiary”: of a Borrower, any Subsidiary of such Borrower the assets, revenues or net worth of which is, at the time of determination, equal to or greater than ten percent of the assets, revenues or net worth, respectively, of such Borrower at such time.
“SOFR”: a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator”: the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website”: the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SONIA”: with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website on the immediately succeeding Business Day.
“SONIA Administrator”: the Bank of England (or any successor administrator of the Sterling Overnight Index Average).
“SONIA Administrator’s Website”: the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SONIA Borrowing”: as to any borrowing, the SONIA Loans comprising such borrowing.
“SONIA Business Day”: for any Loan denominated in Pounds Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London.
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“SONIA Interest Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“SONIA Loan”: a Loan that bears interest at a rate based on Adjusted Daily Simple SONIA.
“SONIA Lookback Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“Subsidiary”: of a Person, a corporation or other entity of which securities or other ownership interests having ordinary voting power (other than securities or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.
“Support Payments”: payments from the Company to the Capital Corporation made pursuant to that certain Support Agreement, dated as October 15, 1996, by and between the Company and the Capital Corporation, as amended by the First Amended Agreement, dated as of November 1, 2003, between the Company and the Capital Corporation.
“T2”: the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.
“TARGET Day”: any day on which T2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“Termination Date”: the date which is 364 days after the Closing Date or such later date as shall be determined pursuant to the provisions of subsection 2.16 with respect to non-Objecting Banks.
“Term Out Option”: as defined in subsection 2.1(d).
“Term Benchmark”: when used in reference to any Loan or Borrowing, refers to Loans, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Term SOFR Rate or the Adjusted Term CORRA Rate.
“Term CORRA”: for any calculation, with respect to any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term CORRA Determination Day”) that is two (2) Business Days prior to the first day of such Interest Period, as such rate is published by the Term CORRA Administrator; provided, however, that if as of 1:00 p.m. (Toronto time) on any Periodic Term CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Business Day is not more than five (5) Business Days prior to such Periodic Term CORRA Determination Day.
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“Term CORRA Administrator”: Candeal Benchmark Administration Services Inc., TSX Inc., or any successor administrator.
“Term CORRA Reference Rate”: the forward-looking term rate based on CORRA.
“Term SOFR Determination Day”: as defined in the definition of Term SOFR Reference Rate.
“Term SOFR Rate”: with respect to any Term Benchmark Borrowing in Dollars and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator; provided that if the Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Term SOFR Reference Rate”: for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.
“Total Commitments”: at any time, the aggregate amount of the Commitments then in effect.
“Total Stockholders’ Equity”: at a particular time, the total stockholders’ equity, exclusive of adjustments resulting from any accumulated other comprehensive income of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter (including the last quarter of any fiscal year) as determined in accordance with GAAP.
“Transferees”: as defined in subsection 10.5(g).
“Transfer Effective Date”: the effective date of an assignment of Loans or Commitments under a Loan Assignment.
“Treaty”: the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1987, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992 and came into force on November 1, 1993), the Amsterdam Treaty (which was signed at Amsterdam on October 2, 1997 and came into force on May 1, 1999) and the Nice Treaty (which was signed on February 26, 2001), each as amended from time to time and as referred to in legislative measures of the European Union for the introduction of, changeover to or operating of the Euro in one or more member states.
“Type”: as to any Committed Rate Loan, its nature as an ABR Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan, SONIA Loan or Eurocurrency Loan.
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“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any Person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement”: the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“U.S. Government Securities Business Day”: any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Withholding Agent”: any Borrower or the Administrative Agent, as the case may be.
“Working Day”: any Business Day on which dealings in foreign currencies and exchange between banks may be carried on in London, England and New York, New York.
“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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| SECTION 2. | THE COMMITTED RATE LOANS; THE NEGOTIATED RATE LOANS; AMOUNT AND TERMS |
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2.3Loan Accounts. Each Bank, with respect to its Committed Rate Loans and Negotiated Rate Loans, and the Administrative Agent, with respect to all Committed Rate Loans and Negotiated Rate Loans, shall open and maintain in the name of each Borrower loan accounts (as to each Bank, its “Loan Account” applicable to such Borrower) on its books and records setting forth the amounts of principal, interest and other sums paid and payable by such Borrower from time to time hereunder in respect of such Loans, and the obligation of such Borrower to pay or repay, as the case may be, such amounts to such Bank shall be evidenced by such Bank’s Loan Account. In case of any dispute, action or proceeding relating to any Committed Rate Loan or Negotiated Rate Loan, the entries in such records shall constitute prima facie evidence of the accuracy of the information set forth therein. In case of discrepancy between the entries in the Administrative Agent’s books and records and any Bank’s, the entries in the Administrative Agent’s books and records shall constitute prima facie evidence of the accuracy of the information set forth therein.
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combination thereof, the amount of prepayment allocable to each. Upon receipt of such notice the Administrative Agent shall promptly notify each Bank thereof. If such notice is given, the Borrower delivering such notice shall make such prepayment, and the payment of the amount specified in such notice shall be due and payable, on the date specified therein, together with accrued interest to such date on the amount prepaid and any amounts payable pursuant to subsections 2.14 and 2.15. Except as provided in the immediately following sentence, partial prepayments shall be in an aggregate principal amount of $5,000,000, or a whole multiple thereof (or comparable amounts reasonably determined by the Administrative Agent in the case of Foreign Currency Loans); provided, however, that after giving effect thereto, the aggregate principal amount of all Committed Rate Loans made on the same Borrowing Date shall not be less than $25,000,000 (or comparable amounts reasonably determined by the Administrative Agent in the case of Foreign Currency Loans). Anything contained in this subsection 2.6 to the contrary notwithstanding, partial prepayments of a Cancelled Bank’s Loans in connection with the termination under subsection 2.13(a), (b) or (c), 2.16(c) or 2.17(b), or upon a Defaulting Bank becoming a Cancelled Bank, of such Cancelled Bank’s Commitment (in whole or in part) shall be in an amount equal to the principal amount of the Loans of such Bank being prepaid, notwithstanding the amount thereof, and shall be permitted notwithstanding the provisions of the foregoing proviso. The Company and the Capital Corporation may prepay Negotiated Rate Loans on such terms as shall be mutually agreed upon between the relevant Borrower and the relevant Bank.
(b) If, on any Calculation Date, the aggregate principal amount of Loans outstanding on such date exceed the Total Commitments, on such date, the Borrowers shall, without notice or demand, within five Business Days (i) repay Loans in an aggregate principal amount such that, after giving effect thereto, the aggregate principal amount of Loans outstanding shall be equal to or less than the Total Commitments and (ii) pay interest and fees accrued to the date of such payment, prepayment or reduction on the principal so prepaid or reduced and any amounts payable under subsection 2.14 in connection therewith.
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(d) The Term Benchmark Loans denominated in Dollars shall bear interest for each Interest Period in effect for such Term Benchmark Loans from the date thereof until the stated maturity thereof on the unpaid principal amount thereof at a rate per annum equal to the Term SOFR Rate determined for the Interest Period therefor plus the Applicable Margin.
(e) The Term Benchmark Loans denominated in Canadian Dollars shall bear interest for each Interest Period in effect for such Term Benchmark Loans from the date thereof until the stated maturity thereof on the unpaid principal amount thereof at a rate per annum equal to the Adjusted Term CORRA Rate determined for the Interest Period therefor plus the Applicable Margin.
(f) The Daily Simple SOFR Loans shall bear interest for each day during the period from the date thereof until the payment in full thereof on the unpaid principal amount thereof at a fluctuating rate per annum equal to Daily Simple SOFR for such day plus the Applicable Margin.
(g) The Daily Simple CORRA Loans shall bear interest for each day during the period from the date thereof until the payment in full thereof on the unpaid principal amount thereof at a fluctuating rate per annum equal to Adjusted Daily Simple CORRA for such day plus the Applicable Margin.
(h) If all or a portion of the principal amount of any of the Committed Rate Loans shall not be paid when due (whether at the stated maturity, by acceleration or otherwise) such overdue principal amount of such Committed Rate Loan (i) shall bear interest at a rate per annum which is 1% above the rate which would otherwise be applicable pursuant to subsection 2.8(a), (b), (c), (d), (e), (f) or (g) as the case may be, from the date when such principal amount is due until the date on which such amount is paid in full and (ii) shall, if such Committed Rate Loan is a Term Benchmark Loan denominated in Dollars, be converted to an ABR Loan at the end of the Interest Period applicable thereto.
(i) Interest shall be payable in arrears on each Interest Payment Date.
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giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the applicable Borrower delivers a new notice to convert or continue the applicable Loans in accordance with subsection 2.9 or a new borrowing request in accordance with subsection 2.1, (A) (1) to the extent such circumstances affect Term Benchmark Loans denominated in Dollars, any request for the making of, or continuation or conversion of a Loan into a Term Benchmark Loan denominated in Dollars shall be deemed to be a request for the making of or continuation or conversion into Daily Simple SOFR Loans (so long as Daily Simple SOFR is not also the subject of subsection 2.11(a)(i)) or ABR Loans (if Daily Simple SOFR is also the subject to subsection 2.11(a)(i)) and (2) to the extent such circumstances affect Term Benchmark Loans denominated in Canadian Dollars, any request for the making of, or continuation or conversion of a Loan into a Term Benchmark Loan denominated in Canadian Dollars shall be deemed to be a request for the making of or continuation or conversion into Daily Simple CORRA Loans (so long as Adjusted Daily Simple CORRA is not also the subject of subsection 2.11(a)(i)) or such request shall be ineffective (if Adjusted Daily Simple CORRA is also the subject to subsection 2.11(a)(i)), (B) to the extent such circumstances affect Daily Simple SOFR Loans, any request for the making of or conversion into a Daily Simple SOFR Loan shall be deemed to be a request for the making of or conversion into an ABR Loan and (C) to the extent such circumstances affect Eurocurrency Loans denominated in any Currency, Daily Simple CORRA Loans or SONIA Loans, as applicable, any request for a Eurocurrency Loan in such Currency, a Daily Simple CORRA Loan or a SONIA Loan, as applicable, shall be ineffective; provided that if the circumstances giving rise to such notice affect only one Type of Loan, then all other Types of Loans shall be permitted. Furthermore, if any Term Benchmark Loan, Eurocurrency Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan is outstanding on the date of the applicable Borrower’s receipt of the notice from the Administrative Agent referred to in this subsection 2.11(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan, Eurocurrency Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan, then until (x) the Administrative Agent notifies the Borrowers and the Banks that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the applicable Borrower delivers a new notice to convert or continue the applicable Loans in accordance with subsection 2.9 or a new borrowing request in accordance with subsection 2.1, (A) any such Term Benchmark Loan denominated in Dollars, Daily Simple CORRA Loan and/or Daily Simple SOFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan, (B) any Eurocurrency Loan and/or Term Benchmark Loan denominated in Canadian Dollars shall on the last day of the then-current Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day) bear interest at the Central Bank Rate for the applicable Currency plus the CBR Spread and (C) any SONIA Loan shall bear interest at the Central Bank Rate for Pounds Sterling plus the CBR Spread; provided that, in the cases of the foregoing clauses (B) and (C), if the Administrative Agent, provides notice to the Company of its determination (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Currency cannot be determined, any outstanding affected Term Benchmark Loans denominated in Canadian Dollars, Daily Simple CORRA Loans, Eurocurrency Loans or SONIA Loans, as applicable, at the applicable Borrower’s election, shall either (A) be converted into ABR Loans denominated in Dollars at the applicable exchange rate immediately or (B) be prepaid in full immediately.
(b) Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” with respect to Dollars for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement”
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with respect to any Currency for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark (including any related adjustments) for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Banks without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Banks comprising the Majority Banks.
(c) In connection with the implementation of a Benchmark Replacement, the Administrative Agent, in consultation with the Company, will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(d) The Administrative Agent will promptly notify the Company and the Banks of (i) any occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Bank (or group of Banks) pursuant to this subsection 2.11, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto or any other Loan Document, except, in each case, as expressly required pursuant to this subsection 2.11.
(e) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term CORRA Rate, Term SOFR Rate or Eurocurrency Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent shall modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.
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(f) Upon the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the Relevant Rate applicable to any Type of Loan, a Borrower may revoke any request for a Eurocurrency Loan, Term Benchmark Loan, SONIA Loan, Daily Simple CORRA Loan or Daily Simple SOFR Loan, as applicable, to be made, converted or continued during such Benchmark Unavailability Period, and, failing that, (x) to the extent such Benchmark Unavailability Period affects Term Benchmark Loans, the applicable Borrower will be deemed to have converted any request for a Term Benchmark Loan (i) denominated in Dollars into a request for a borrowing or conversion to (A) a Daily Simple SOFR Loan so long as Daily Simple SOFR is not the subject of a Benchmark Transition Event or (B) an ABR Loan if Daily Simple SOFR is the subject of a Benchmark Transition Event and (ii) denominated in Canadian Dollars into a request for a borrowing or conversion to (A) a Daily Simple CORRA Loan so long as Adjusted Daily Simple CORRA is not the subject of a Benchmark Transition Event or (B) such request shall be ineffective if Adjusted Daily Simple CORRA is the subject of a Benchmark Transition Event, (y) to the extent such Benchmark Unavailability Period affects Daily Simple SOFR Loans, the applicable Borrower will be deemed to have converted any request for a Daily Simple SOFR Borrowing into a request for a borrowing or conversion to an ABR Loan and (z) to the extent such Benchmark Unavailability Period affects Eurocurrency Loans in a Foreign Currency or any SONIA Loans, any request for a Eurocurrency Loan denominated in such Currency or a SONIA Loan, as applicable, shall be ineffective. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. Furthermore, if any Eurocurrency Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan is outstanding on the date of the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the Relevant Rate applicable to such Eurocurrency Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan, as applicable, then until such time as a Benchmark Replacement for such Currency or Type of Loan is implemented pursuant to this subsection 2.11, (i) to the extent such Benchmark Unavailability Period affects Term Benchmark Loans, any Term Benchmark Loan shall, on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, (A) if denominated in Dollars (x) a Daily Simple SOFR Loan so long as Daily Simple SOFR is not the subject of a Benchmark Transition Event or (y) an ABR Loan if Daily Simple SOFR is the subject of a Benchmark Transition Event, on such day and (B) if denominated in Canadian Dollars (x) a Daily Simple CORRA Loan so long as Adjusted Daily Simple CORRA is not the subject of a Benchmark Transition Event or (y) a Term Benchmark Loan which bears interest at the Central Bank Rate for Canadian Dollars plus the CBR Spread, (ii) to the extent such Benchmark Unavailability Period affects Daily Simple SOFR Loans, any Daily Simple SOFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an, ABR Loan and (iii) to the extent such Benchmark Unavailability Period affects Eurocurrency Loans in such Currency or any SONIA Loan, as applicable, any Daily Simple CORRA Loans, Eurocurrency Loan denominated in such Currency or SONIA Loan, as applicable, shall bear interest at the Central Bank Rate for the applicable Currency plus the CBR Spread; provided that, if the Administrative Agent provides written notice to the Company of its determination (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Currency cannot be determined, any outstanding affected Loans denominated in such Foreign Currency, at the Company’s election, shall either (A) be converted into ABR Loans denominated in Dollars (in an amount equal to the Dollar Equivalent of such Foreign Currency) immediately or (B) be prepaid in full immediately.
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2.13Requirements of Law. (a) If any Bank shall determine that by reason of (i) the introduction after the date hereof of any applicable law, regulation or guideline or any change after the date hereof in any applicable law, regulation or guideline (including the phasing-in of a provision of any applicable law, regulation or guideline) or in the interpretation thereof by any governmental or other regulatory authority charged with the administration thereof or any court of competent jurisdiction and/or (ii) compliance by such Bank with any requirement adopted after the date hereof or directive adopted after the date hereof from any central bank or other fiscal, monetary or other regulatory authority (whether or not having the force of law), there shall be any increase in the cost of such Bank of maintaining or giving effect to its obligations with respect to Committed Rate Loans under this Agreement or maintaining its Commitment with respect to Committed Rate Loans or making or maintaining any Eurocurrency Loans, Term Benchmark Loans, Daily Simple CORRA Loans, Daily Simple SOFR Loans or SONIA Loans or any reduction in any amount receivable by such Bank in respect of Eurocurrency Loans, Term Benchmark Loans, Daily Simple CORRA Loans, Daily Simple SOFR Loans or SONIA Loans under this Agreement, notwithstanding the reasonable efforts (such reasonable efforts not to result in the incurrence of additional costs or expenses) of such Bank to mitigate such increase or reduction (excluding for purposes of this subsection 2.13 any such increased costs resulting from (x) Indemnified Taxes (as to which subsection 2.17 shall govern), (y) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Bank is organized or has its applicable lending office or any political subdivision thereof and (z) FATCA), then the relevant Borrower shall from time to time on receipt (whenever occurring) of a certificate from such Bank (which shall be executed by an officer thereof and a copy of which shall be delivered to the Administrative Agent) pay to such Bank such amounts as are stated therein to be required to indemnify such Bank against such increased costs or reduction; provided, however, that if such Borrower becomes obligated to pay any Bank any additional amount pursuant to this subsection 2.13(a), such Borrower shall have the right, so long as no Event of Default has occurred and is then continuing, upon giving notice to the Administrative Agent and such Bank in accordance with subsection 2.6, to prepay in full the Loans of such Bank, together with accrued interest thereon, any amounts payable to such Bank pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid commitment fee or other amount payable to such Bank hereunder and/or, upon giving not less than three Business Days’ notice to any such Bank and the Administrative Agent, to cancel the whole or part of the Commitment of any such Bank; provided, further, that such Borrower shall not be obligated to pay any Bank any additional amount pursuant to this subsection 2.13(a) (A) which constitutes a present or future income, stamp or other tax, levy, impost, duty, charge, fee, deduction or withholding referred to in subsection 2.17(a) or (B) as a result of any law, rule, guideline, regulation, request or directive regarding capital adequacy or liquidity referred to in subsection 2.13(b). A certificate of such Bank as to the amount of such increased costs or reduction shall set forth in reasonable detail the computation of such increased costs or reduction, and shall be binding and conclusive in the absence of manifest error. A Bank which demands indemnification hereunder as a result of an increased cost or reduction referred to herein shall deliver the certificate referred to above to the relevant Borrower demanding indemnification no later than the later of (y) the thirtieth day immediately following each payment or realization by such Bank of such increased cost or reduction (and such certificate shall certify that the amounts set forth therein were paid or realized within such thirty-day period) and (z) the thirtieth day immediately following such Bank’s knowledge of the incurrence or realization by such Bank of such increased cost or reduction (and such certificate shall so certify).
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effect to its obligations as contemplated hereby with respect to any Foreign Currency Loan, then, by written notice to the Borrowers and to the Administrative Agent:
(i)such Bank or Banks may declare that Foreign Currency Loans (in the affected Currency or Currencies) will not thereafter (for the duration of such unlawfulness) be made by such Bank or Banks hereunder (or be continued for additional Interest Periods), whereupon any request for a Foreign Currency Loan (in the affected Currency or Currencies) or to continue a Foreign Currency Loan (in the affected Currency or Currencies, as the case may be, for an additional Interest Period) shall, as to such Bank or Banks only, be of no force and effect, unless such declaration shall be subsequently withdrawn; and
(ii)such Bank may require that all outstanding Foreign Currency Loans (in the affected Currency or Currencies), made by it be converted to ABR Loans or Term Benchmark Loans denominated in Dollars or Canadian Dollars, as the case may be (unless repaid by the Borrowers), in which event all such Foreign Currency Loans (in the affected Currency or Currencies) shall be converted to ABR Loans or Term Benchmark Loans denominated in Dollars or Canadian Dollars, as the case may be, as of the effective date of such notice as provided in paragraph (f) below and at the Exchange Rate on the date of such conversion or, at the option of the Borrower, repaid on the last day of the then current Interest Period with respect thereto or, if earlier, the date on which the applicable notice becomes effective.
In the event any Bank shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the converted Foreign Currency Loans of such Bank shall instead be applied to repay the ABR Loans or Loans denominated in Dollars, as the case may be, made by such Bank resulting from such conversion.
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The obligations of the parties under this subsection 2.17 shall survive termination of this Agreement and payment of the Loans.
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The rights and remedies against a Defaulting Bank under this subsection 2.23 are in addition to other rights and remedies that the Borrowers may have against such Defaulting Bank.
In the event and on the date that the Administrative Agent and the Company each agree that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank, then such Bank shall purchase at par such of the Loans of the other Banks (other than Negotiated Rate Loans) as the Administrative Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Commitment Percentage and such Bank shall no longer be a Defaulting Bank; provided, that subject to subsection 10.15, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Bank arising from that Bank having become a Defaulting Bank, including any claim of a Non-Defaulting Bank as a result of such Non-Defaulting Bank’s increased exposure following such reallocation.
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2.25Foreign Currency Exchange Rate. (a) No later than 1:00 P.M., London time, on each Calculation Date with respect to a Foreign Currency, the Administrative Agent shall determine the Exchange Rate as of such Calculation Date with respect to such Foreign Currency (it being acknowledged and agreed that the Administrative Agent shall use such Exchange Rate for the purposes of determining compliance with subsection 2.1 with respect to such borrowing request). The Exchange Rates so determined shall become effective on the relevant Calculation Date, shall remain effective until the next succeeding Calculation Date and shall for all purposes of this Agreement (other than subsection 2.13(e) and subsection 2.24(a)) be the Exchange Rates employed in converting any amounts between Dollars and Foreign Currencies.
The Capital Corporation waives promptness, diligence, presentment to, demand of payment from and protest to JD Luxembourg of any Luxembourg Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Capital Corporation hereunder shall be absolute and unconditional and not be affected by (a) the failure of any Bank or the Administrative Agent to assert any claim or demand or to enforce any right or remedy against JD Luxembourg under the provisions of this Agreement or otherwise; (b) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement or any other agreement; (c) the failure of any Bank to exercise any right or remedy against JD Luxembourg; (d) the invalidity or unenforceability of this Agreement; or (e) any other circumstance which might otherwise constitute a defense available to or discharge of JD Luxembourg (other than payment).
The Capital Corporation further agrees that its agreement hereunder constitutes a promise of payment when due and not of collection, and waives any right to require that any resort be had by any Bank to any balance of any deposit account or credit on the books of any Bank in favor of JD Luxembourg or any other Person.
The obligations of the Capital Corporation hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of the Luxembourg Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Capital Corporation hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Bank to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any waiver or modification in respect of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Luxembourg Obligations, or by any other act or omission which may or might in any manner or to any extent vary the risk of the Capital Corporation or otherwise operate as a discharge of the Capital Corporation as a matter of law or equity.
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The Capital Corporation further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Luxembourg Obligation is rescinded or must otherwise be restored by the Administrative Agent or any Bank upon the bankruptcy or reorganization of JD Luxembourg or otherwise.
In furtherance of the foregoing and not in limitation of any other right which the Administrative Agent or any Bank may have at law or in equity against the Capital Corporation by virtue hereof, upon the failure of JD Luxembourg to pay any Luxembourg Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Capital Corporation hereby promises to and will, upon receipt of written demand by the Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of such unpaid Luxembourg Obligation. In the event that, by reason of the bankruptcy of JD Luxembourg, (i) acceleration of Loans made to JD Luxembourg is prevented and (ii) the Capital Corporation shall not have prepaid the outstanding Loans and other amounts due hereunder owed by JD Luxembourg, the Capital Corporation will forthwith purchase such Loans at a price equal to the principal amount thereof plus accrued interest thereon and any other amounts due hereunder with respect thereto. The Capital Corporation further agrees that if payment in respect of any Luxembourg Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York and if, by reason of any change in law, disruption of currency or foreign exchange markets, war or civil disturbance or similar event, payment of such Luxembourg Obligation in such currency or such place of payment shall be impossible or, in the reasonable judgment of any applicable Bank, not consistent with the protection of its rights or interests, then, at the election of any applicable Bank, the Capital Corporation shall make payment of such Luxembourg Obligation in Dollars (based upon the applicable Exchange Rate in effect on the date of payment) and/or in New York.
Notwithstanding any payment made by the Capital Corporation hereunder or any set-off or application of funds of the Capital Corporation by the Administrative Agent or any Bank, the Capital Corporation shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Bank against JD Luxembourg or any guarantee or right of offset held by the Administrative Agent or any Bank for the payment of the Luxembourg Obligations, until all amounts owing to the Administrative Agent and the Banks by JD Luxembourg on account of the Luxembourg Obligations are paid in full in cash. If any amount shall be paid to the Capital Corporation on account of such subrogation rights at any time when all of the Luxembourg Obligations shall not have been paid in full in cash, such amount shall be held by the Capital Corporation in trust for the Administrative Agent and the Banks, segregated from its other funds, and shall, forthwith upon receipt by it, be turned over to the Administrative Agent in the exact form received by it (duly indorsed by it to the Administrative Agent, if required), to be applied against the Luxembourg Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
| SECTION 3. | REPRESENTATIONS AND WARRANTIES |
Each Borrower hereby represents and warrants to the Administrative Agent and to each Bank that:
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| SECTION 4. | CONDITIONS PRECEDENT |
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Each acceptance by any Borrower of a Loan shall constitute a representation and warranty by the relevant Borrower as of the date of such Loan that the applicable conditions in clauses (a) and (b) of this subsection 4.2 have been satisfied.
| SECTION 5. | AFFIRMATIVE COVENANTS |
Each of the Borrowers (except as otherwise specified) hereby agrees that, so long as there is any obligation by any Bank to make Loans to it hereunder, any Loan of such Borrower remains outstanding and unpaid or any other amount is owing by such Borrower to any Bank or any Agent hereunder (unless the Majority Banks shall otherwise consent in writing):
(a) as soon as available, but in any event within 120 days after the end of each fiscal year of such Borrower, a copy of the consolidated balance sheet of such Borrower and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and of cash flow for such year, reported on by (i) in the case of the Company and the Capital Corporation, Deloitte & Touche LLP or other independent certified public accountants of nationally recognized standing in the United States and (ii) in the case of JD Luxembourg, Deloitte & Touche LLP or other independent certified public accountants of recognized standing in Luxembourg or the European Union; and
(b)as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of such Borrower, the condensed unaudited consolidated balance sheet of such Borrower and its consolidated Subsidiaries as at the end of each such quarter and the related unaudited consolidated statement of income of such Borrower and its consolidated Subsidiaries for such quarterly period and the portion of the fiscal year through such date, certified by a Responsible Officer of such Borrower (subject to normal year-end audit adjustments).
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All such financial statements described in clause (a) or (b) above shall present fairly the consolidated financial condition and results of operations of such Borrower and its consolidated Subsidiaries and be prepared in accordance with generally accepted accounting principles in the United States of America (or, in the case of any such financial statements furnished by JD Luxembourg, international financial reporting standards in effect from time to time as applicable to JD Luxembourg, or such other accounting standards required by any applicable Luxembourg Governmental Authority) applied consistently throughout the periods reflected therein (except as approved by such accountants or officer, as the case may be, and disclosed therein). The Company and the Capital Corporation shall be deemed to have furnished such financial statements to each Bank when they are filed with the Securities and Exchange Commission and posted on its EDGAR system, and JD Luxembourg shall be deemed to have furnished such financial statements to each Bank when they are delivered to the Administrative Agent via electronic mail or other electronic transmission.
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| SECTION 6. | NEGATIVE COVENANTS OF THE COMPANY |
The Company hereby agrees that, so long as there is any obligation by any Bank to make Loans hereunder, any Loan remains outstanding and unpaid or any other amount is owing to any Agent or any Bank hereunder, it shall not, nor in the case of subsections 6.2 and 6.3 shall it permit any Restricted Subsidiary to (unless the Majority Banks shall otherwise consent in writing):
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| SECTION 7. | NEGATIVE COVENANTS OF THE CAPITAL CORPORATION |
The Capital Corporation hereby agrees that, so long as there is any obligation by any Bank to make Loans to the Capital Corporation hereunder, any Loan of the Capital Corporation remains outstanding and unpaid or any other amount is owing by the Capital Corporation to any Bank or any Agent hereunder, the Capital Corporation shall not, nor in the case of the agreements set forth in subsection 7.3 shall it permit any of its Subsidiaries to, directly or indirectly (unless the Majority Banks shall otherwise consent in writing):
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Corporation under this Agreement by supplemental agreement satisfactory to the Administrative Agent and executed and delivered to the Administrative Agent by the successor corporation and (b) the Capital Corporation or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation, Division, sale or conveyance, be in default in the performance of any such agreements, covenants or obligations; provided, however, that the Capital Corporation may merge or consolidate with, or sell or convey substantially all of its assets to, the Company, if (i) the Company is the successor corporation (as defined above) and (ii) subclause (b) above is complied with; provided further that no Division of Capital Corporation shall be permitted unless there is a Division Successor. Upon any such merger, consolidation, sale, Division or conveyance, the successor corporation shall succeed to and be substituted for, and may exercise every right and power of and shall be subject to all the obligations of, the Capital Corporation under this Agreement, with the same effect as if the successor corporation had been named as the Capital Corporation herein and therein.
| SECTION 8. | EVENTS OF DEFAULT |
Upon the occurrence and during the continuance of any of the following events:
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(e)(i) A Borrower or any of its Significant Subsidiaries shall default in any payment of principal of or interest on any indebtedness for borrowed money (other than the Loans and any Securitization Indebtedness) in a principal amount in excess of $175,000,000 in the aggregate, or any interest or premium thereon, when due (whether at scheduled maturity or by required prepayment, acceleration, demand or otherwise) and such failure shall continue beyond the period of grace, if any, provided in the instrument or agreement under which such indebtedness was created; or (ii) any other default (other than any default arising solely out of a Borrower’s, or any of its Significant Subsidiaries’, violation of any arrangement with any Bank, or any affiliate of any Bank, in any way restricting such Borrower’s, or such Significant Subsidiary’s, right or ability to sell, pledge or otherwise dispose of Margin Stock other than Restricted Margin Stock), or any other event that with notice or the lapse of time, or both, would constitute such a default, under any agreement or instrument relating to any such indebtedness for borrowed money (other than the Loans), shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate the maturity of such indebtedness; or (iii) any such indebtedness for borrowed money shall, by reason of default, be declared to be due and payable, or required to be prepaid, prior to the stated maturity thereof (unless such indebtedness is declared due and payable, or required to be prepaid, solely by reason of any Borrower’s, or any of its Significant Subsidiaries’, violation of any arrangement with any Bank, or any affiliate of any Bank, in any way restricting such Borrower’s, or such Significant Subsidiary’s, right or ability to sell, pledge or otherwise dispose of Margin Stock other than Restricted Margin Stock); provided that, no Event of Default under this subsection 8(e) shall occur or be continuing if such failure, default or breach has been waived by the holder(s) or trustee or agent on behalf of such holder(s) of such indebtedness unless payment of such indebtedness has been accelerated and such acceleration has not been waived; or
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then, and in any such event, (A) if such event is an Event of Default specified in paragraph (f) above, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Loans shall immediately become due and payable, and (B)(1) if such event is an Event of Default specified in paragraph (a) or (e), then with the consent of the Majority Banks, the Administrative Agent may, or upon the request of the Majority Banks, the Administrative Agent shall, or (2) if such event is an Event of Default specified in paragraph (b), (c), (d), (g) or (h), then with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks, the Administrative Agent shall, take either or both of the following actions: (i) by notice to the Borrowers, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) by notice of default to the Borrowers, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived with respect to this Agreement by the Borrowers.
| SECTION 9. | THE AGENTS |
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claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Bank under this subsection 9.4(b) shall be conclusive, absent manifest error.
(ii) Each Bank hereby further agrees that if it receives a Payment from the Administrative Agent or any of its affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Bank agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Bank shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter (or such later date as the Administrative Agent may, in its sole discretion, specify in writing), return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon (except to the extent waived in writing by the Administrative Agent) in respect of each day from and including the date such Payment (or portion thereof) was received by such Bank to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(iii) The Borrowers hereby agree that (x) in the event that the return of an erroneous Payment (or portion thereof) made with funds of the Administrative Agent or an affiliate thereof has been demanded by the Administrative Agent pursuant to this subsection 9.4(b) and has not been recovered from any Bank that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Bank with respect to such amount unless and until such amounts are recovered by the Administrative Agent and (y) an erroneous Payment made by the Administrative Agent or an affiliate thereof shall not pay, prepay, repay, discharge or otherwise satisfy any Loans owed by the Borrowers.
(iv) Each Bank’s obligations under this subsection 9.4(b) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Bank, the termination of the Commitments, the payment in full of all amounts payable hereunder and the termination of this Agreement.
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(b) Each Bank shall indemnify the Administrative Agent for the full amount of any taxes, levies, imposts, duties, fees, deductions, withholdings or similar charges imposed by any Governmental Authority that are attributable to such Bank and that are payable or paid by the Administrative Agent, together with all interest, penalties, reasonable costs and expenses arising therefrom or with respect thereto, as determined by the Administrative Agent in good faith. A certificate as to the amount of such payment or liability delivered to any Bank by the Administrative Agent shall be conclusive absent manifest error.
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9.9Successor Agents. Each Agent may resign as Agent upon 30 days’ notice thereof to the Borrowers and the Banks. If the Administrative Agent shall resign as Administrative Agent under this Agreement, then the Majority Banks shall appoint from among the Banks a successor administrative agent for the Banks which successor administrative agent shall be approved by the Borrowers, whereupon such successor administrative agent shall succeed to the rights, powers and duties of the Administrative Agent and the term “Administrative Agent” shall mean such successor administrative agent effective upon its appointment, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
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“Borrower Communications” means, collectively, any borrowing notice, conversion or continuation notice, notice of prepayment, notice requesting the issuance, amendment or extension of a Letter of Credit or other notice, demand, communication, information, document or other material provided by or on behalf of any Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed by any Borrower to the Administrative Agent through an Approved Borrower Portal.
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| SECTION 10. | MISCELLANEOUS |
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The Borrowers:
The Company: |
Deere & Company |
The Capital Corporation: |
John Deere Capital Corporation |
JD Luxembourg: |
John Deere Bank S.A. L-1855 Luxembourg Grand Duchy of Luxembourg |
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with a copy to: |
Deere & Company Telephone: 309-765-4488 |
The Administrative Agent: |
Provided separately by Administrative Agent |
To any other Bank: |
To it at its address (or facsimile number) set forth in its Administrative Questionnaire |
provided that any notice, request or demand to or upon the Administrative Agent or the Banks pursuant to subsections 2.1, 2.2, 2.5, 2.6, 2.9, 2.11, 2.20 and 9.9 shall not be effective until received (including receipt by telephone if permitted hereby).
Notices and other communications to any Borrower, the Banks and the Administrative Agent hereunder may be delivered or furnished by using Approved Borrower Portals (as applicable), in each case, pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 hereof unless otherwise agreed by the Administrative Agent and the applicable Bank. The Administrative Agent or any Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
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10.6Adjustments. Except as otherwise provided in this Agreement or as otherwise provided by court order, if any Bank (a “benefitted Bank”) shall at any time receive any payment of all or part of its Committed Rate Loans, or interest thereon or commitment fee hereunder, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in clause (e) of Section 8, or otherwise) in a greater proportion than any such payment to and collateral received by any other Bank, if any, in respect of such other Bank’s Committed Rate Loans, or interest thereon, or commitment fee hereunder, such benefitted Bank shall purchase for cash from the other Banks such portion of each such other Bank’s Committed Rate Loans, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of such other Banks; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. The Borrowers agree that each Bank so purchasing a portion of another Bank’s Committed Rate Loans may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Bank were the direct holder of such portion.
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Each Bank hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Bank to identify the Borrowers in accordance with the Act. The Borrowers shall promptly provide such information upon request by any Bank.
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(i)the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(ii)the effects of any Bail-In Action on any such liability, including, if applicable:
(x)a reduction in full or in part or cancellation of any such liability;
(y)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(z)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any Resolution Authority.
(b)Each party hereto agrees that it will notify the Company and the Administrative Agent, as soon as practicable, of such party becoming the subject of a Bail-In Action, unless such notification is prohibited by law, regulation or order.
(i) such Bank is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans (defined below) in connection with the Loans or the Commitments,
87
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to, and all of the conditions of which are and will continue to be satisfied in connection with, such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,
(iii) (A) such Bank is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Bank to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Bank, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Bank.
(b)In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or (2) a Bank has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent and each lead arranger, and not, for the avoidance of doubt, to or for the benefit of the Borrowers, that the Administrative Agent is not a fiduciary with respect to the assets of such Bank involved in such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement or any documents related hereto or thereto).
As used in this Section, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code, to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
88
of the payment of any amounts then owing to it on and as of the Closing Date under the Existing Credit Agreement in connection with the positive Sustainability Facility Fee Adjustment (as defined in the Existing Credit Agreement immediately prior to giving effect to the termination thereof) pursuant to subsection 2.28(c) thereof, solely to the extent resulting from the late delivery of the Pricing Certificate (as defined in the Existing Credit Agreement immediately prior to giving effect to the termination thereof) for the fiscal year ended October 31, 2025 under subsection 5.2(c) of the Existing Credit Agreement. Each party hereto agrees that the consent and waiver set forth in this subsection 10.17 shall be limited precisely as written and, except as set forth in this subsection 10.17, shall not be deemed to be a consent to or amendment, waiver or modification of any other term of the Existing Credit Agreement, any other Loan Document (as defined in the Existing Credit Agreement immediately prior to giving effect to the termination thereof), or any other Loan Document. Nothing herein shall be deemed to entitle the Borrowers to any future consent to, or waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in this Agreement or any other Loan Document in similar or different circumstances.
[Remainder of page left intentionally blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
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DEERE & COMPANY By:/s/ Jerry Steining |
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JOHN DEERE CAPITAL CORPORATION By:/s/ Jerry Steining |
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JOHN DEERE BANK S.A. By:/s/ Jerry Steining By:/s/ Nathalie Prevost |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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JPMORGAN CHASE BANK, N.A., By: /s/ Will Price |
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J.P. MORGAN SE, By: /s/ Suzanne Sambell |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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BANK OF AMERICA, N.A., as Co-Syndication Agent and as a Bank By: /s/ Kathryn DuFour |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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CITIBANK, N.A., as Co-Syndication Agent and as a Bank By: /s/ Susan Olsen Title: Vice President |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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BARCLAYS BANK PLC, as a Bank By: /s/ Charlene Saldanha Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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DEUTSCHE BANK AG NEW YORK BRANCH, as a Bank By: /s/ Annie Chung Title: Managing Director By: /s/ Marko Lukin Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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HSBC BANK USA, N.A., as a Bank By: /s/ Matthew McLaurin Title: Managing Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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MUFG Bank, Ltd., as a Bank By: /s/ George Stoecklein Title: Managing Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Royal Bank of Canada, as a Bank By: /s/ Mark Tarnecki Title: Authorized Signatory |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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The Toronto-Dominion Bank, New York Branch, as a Bank By: /s/ David Perlman Title: Authorized Signatory |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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BNP PARIBAS, as a Bank By: /s/ Anita Ogbara Title: Managing Director By: /s/ Norman Miller Title: Vice President |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Credit Agricole Corporate and Investment Bank, as a Bank By: /s/ Jill Wong Title: Director By: /s/ Gordon Yip Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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GOLDMAN SACHS BANK USA, as a Bank By: /s/ Jonathan Dworkin Title: Authorized Signatory |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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BANK OF CHINA LIMITED, CHICAGO BRANCH, as a Bank By: /s/ Libo Sun Title: SVP & Branch Manager |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Commerzbank AG, New York Branch, as a Bank By: /s/ Jack Deegan Title: Managing Director By: /s/ Robert Sullivan Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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ING Bank N.V., Dublin Branch as a Bank By: /s/ Sean Hassett Title: Director By: /s/ Rory Fitzgerald Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Lloyds Bank plc, as a Bank By: /s/ Amit Patel Title: Associate Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Sumitomo Mitsui Banking Corporation, as a Bank By: /s/ Jun Ashley Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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THE BANK OF NEW YORK MELLON, as a Bank By: /s/ Thomas J. Tarasovich, Jr. Title: Senior Vice President |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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THE BANK OF NOVA SCOTIA as a Bank By: /s/ Adnan Osman Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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TRUIST BANK, as a Bank By: /s/ William P. Rutkowski Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Nordea Bank Abp, New York Branch, as a Bank By: /s/ Ola Anderssen Title: Director By: /s/ Anders Holmgaard Title: Managing Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, as a Bank By: /s/ Brian Crowley Title: Managing Director By: /s/ Armen Semizian Title: Managing Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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BANCO SANTANDER, S.A., NEW YORK BRANCH, as a Bank By: /s/ Andres Barbosa Title: Managing Director By: /s/ Carolina Gutierrez Title: Executive Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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PNC Bank, National Association, as a Bank By: /s/ Michal Suchanek Title: Assistant Vice President |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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SOCIETE GENERALE, as a Bank By: /s/ Kimberly Metzger Title: Director |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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U.S. Bank National Association, as a Bank By: /s/ Doug Magalska Title: Vice President |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
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Agricultural Bank of China, New York Branch as a Bank By: /s/ Nelson Chou Title: Senior Vice President & Head of |
[Signature Page to the 2026 364-Day Deere & Company Credit Agreement]
Exhibit 10.3
Execution Version
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
JOHN DEERE BANK S.A.
________________________________________
$3,250,000,000
2029
CREDIT AGREEMENT
Dated as of March 23, 2026
________________________________________
JPMORGAN CHASE BANK, N.A. and J.P. MORGAN SE,
as Administrative Agent
BANK OF AMERICA, N.A.
and
CITIBANK, N.A.,
as Co-Syndication Agents
________________________________________
JPMORGAN CHASE BANK, N.A.,
BOFA SECURITIES, INC.
and
CITIGROUP GLOBAL MARKETS INC.,
as Lead Arrangers and Bookrunners
TABLE OF CONTENTS
Page
SCHEDULES:
Schedule ITerms of Subordination
Schedule IICommitments
Schedule IIIExisting Letters of Credit
EXHIBITS:
Exhibit AForm of Borrowing Notice
Exhibit BForm of Assignment and Assumption
Exhibit CForm of Opinion of General Counsel to the Company
Exhibit DForm of Opinion of Special New York Counsel to the Borrowers
Exhibit EForm of Extension Request
Exhibit FForm of Form W-8BEN-E Tax Letter
Exhibit GForm of Form W-8ECI Tax Letter
Exhibit HForm of Replacement Bank Agreement
Exhibit IForm of Promissory Note
Exhibit JForm of New Bank Supplement
Exhibit KForm of Commitment Increase Supplement
Exhibit LForm of Certificate of Non-Bank Status
2029 CREDIT AGREEMENT, dated as of March 23, 2026, among (a) DEERE & COMPANY, a Delaware corporation (the “Company”), (b) JOHN DEERE CAPITAL CORPORATION, a Delaware corporation (the “Capital Corporation”), (c) JOHN DEERE BANK S.A., a Luxembourg société anonyme (“JD Luxembourg”), (d) the several financial institutions parties hereto (collectively, the “Banks”, and individually, a “Bank”), (e) JPMORGAN CHASE BANK, N.A., as administrative agent hereunder (in such capacity, together with its successors, permitted assigns, designated branch offices or affiliates, including, without limitation, J.P. Morgan SE, collectively, the “Administrative Agent”) and (f) BANK OF AMERICA, N.A. and CITIBANK, N.A., as co-syndication agents hereunder (in such capacity, the “Co-Syndication Agents”).
The parties hereto hereby agree as follows:
| SECTION 1. | DEFINITIONS |
“364-Day Credit Agreement”: that certain $5,500,000,000 364-Day Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“2031 Credit Agreement”: that certain $3,250,000,000 2031 Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“ABR”: at any particular date, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) 0.5% per annum above the NYFRB Rate and (c) the Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1% (provided that, for the avoidance of doubt, such Term SOFR Rate for any date shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology)). Any change in ABR due to a change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate, respectively. If the ABR is being used as an alternate rate of interest pursuant to subsection 2.11 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to subsection 2.11(b)), then the ABR shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.
“ABR Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon the ABR.
“Act”: as defined in subsection 10.12.
2
“Adjusted Daily Simple CORRA”: an interest rate per annum equal to (a) Daily Simple CORRA, plus (b) 0.29547%; provided that if Adjusted Daily Simple CORRA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Daily Simple SONIA”: an interest rate per annum equal to (a) Daily Simple SONIA, plus (b) 0.0326%; provided that if Adjusted Daily Simple SONIA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Term CORRA Rate”: for purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation, plus (b) 0.29547% for a one month interest period or 0.32138% for a three month interest period; provided that if Adjusted Term CORRA Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Administrative Agent”: as defined in the preamble hereto.
“Administrative Questionnaire”: an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Foreign Currency”: as defined in subsection 2.11(a).
“Agent”: the Administrative Agent or the Syndication Agent, as the context shall require; together, the “Agents”.
“Agreement”: this 2029 Credit Agreement as amended, supplemented or modified from time to time.
“Agreement Currency”: as defined in subsection 2.24(b).
“Ancillary Document”: as defined in subsection 10.8.
“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction applicable to the Borrowers and their Subsidiaries from time to time concerning or relating to bribery or corruption, including, but not limited to the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) and the UK Bribery Act of 2010.
“Applicable Creditor”: as defined in subsection 2.24(b).
“Applicable Margin”: (a) with respect to ABR Loans, the rate per annum set forth below for ABR Loans in the column corresponding to the Prevailing Rating of the Company, (b) with respect to Eurocurrency Loans, the rate per annum set forth below for Eurocurrency Loans in the column corresponding to the Prevailing Rating of the Company, (c) with respect to Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans, the rate per annum set forth below for Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans in the column corresponding to the Prevailing Rating of the Company and (d) with respect to SONIA Loans, the rate per annum set forth below for SONIA Loans in the column corresponding to the Prevailing Rating of the Company:
3
|
Level I Rating |
Level II Rating |
Level III Rating |
Level IV Rating |
Level V Rating |
ABR Loans |
0.00% |
0.00% |
0.00% |
0.00% |
0.25% |
Eurocurrency Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
SONIA Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Each change in the Prevailing Rating resulting from a publicly announced change in the Credit Ratings shall be effective during the period commencing on the date that is 3 Business Days after the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change; provided that in no event shall the Applicable Margin be less than zero.
“Application”: an application in such form from time to time in use by the applicable Issuing Bank, requesting an Issuing Bank to issue a Letter of Credit.
“Approved Borrower Portal”: has the meaning assigned to it in subsection 9.12.
“Attributable Debt”: as defined in subsection 6.2(b)(ii).
“Australian Dollars”: the lawful currency of Australia.
“Available Commitment”: as to any Bank at any time, an amount equal to the excess, if any, of (a) such Bank’s Commitment then in effect over (b) such Bank’s Committed Rate Loans then outstanding.
“Available Tenor”: as of any date of determination and with respect to the then-current Benchmark in respect of Loans denominated in such Currency, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period with respect to Loans denominated in the applicable Currency pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (e) of subsection 2.11.
“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
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“Bank” and “Banks”: as defined in the preamble hereto.
“Benchmark”: initially, with respect to any (i) SONIA Loan, Adjusted Daily Simple SONIA, (ii) Daily Simple CORRA Loan, Adjusted Daily Simple CORRA, (iii) Daily Simple SOFR Loan, Daily Simple SOFR or (iv) Term Benchmark Loan or Eurocurrency Loan, the Relevant Rate for such Currency; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the applicable Relevant Rate or the then-current Benchmark with respect to Loans denominated in such Currency, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of subsection 2.11.
“Benchmark Replacement”: for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that in the case of any Loan denominated in a Foreign Currency (other than any Loan denominated in Canadian Dollars), “Benchmark Replacement” shall mean the alternative set forth in (2) below:
(1)in the case of any Loan denominated in Dollars, the Daily Simple SOFR and/or in the case of any Loan denominated Canadian Dollars, the Adjusted Daily Simple CORRA;
(2)the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor with respect to Loans denominated in such Currency giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in the applicable Currency at such time and (b) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment”: with respect to any replacement of the then-current Benchmark with respect to Loans denominated in any Currency with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency at such time.
5
“Benchmark Replacement Conforming Changes”: with respect to any Benchmark Replacement in respect of Loans denominated in any Currency, any technical, administrative or operational changes (including changes to the definition of “ABR,” the definition of “Business Day,” the definition of “SONIA Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion (in consultation with the Company) may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent reasonably determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent determines (in consultation with the Company) is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents); provided that, notwithstanding anything herein to the contrary, no “Benchmark Replacement Conforming Changes” shall result in any material effect on the timing or amount of payments or borrowings without the consent of the Company.
“Benchmark Replacement Date”: with respect to the Benchmark for any Loan denominated in any Currency, the earliest to occur of the following events with respect to such then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event”: with respect to the Benchmark for any Loan denominated in any Currency, the occurrence of one or more of the following events with respect to such then-current Benchmark:
6
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, the CORRA Administrator, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period”: with respect to the Benchmark for any Loan denominated in any Currency, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11.
“Beneficial Ownership Certification”: a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.
“benefitted Bank”: as defined in subsection 10.6.
“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Borrower”: the Company, the Capital Corporation or JD Luxembourg; collectively, the “Borrowers”.
7
“Borrowing Date”: in respect of any Loan, the date such Loan is made, and in respect of any Letter of Credit, the date such Letter of Credit is issued.
“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City or Chicago are authorized or required by law to close; provided, that (a) when used in connection with a Foreign Currency Loan, (in each case, other than in connection with any calculation or determination of interest rate in respect of a SONIA Loan or a Loan denominated in Euros), the term “Business Day” shall also exclude any day on which banks are authorized or required by law to be closed in the principal financial center for that currency, including without limitation, Toronto in respect of Loans denominated in Canadian Dollars, (b) in relation to any calculation or determination of interest rate in respect of a SONIA Loan, “Business Day” shall mean a SONIA Business Day, (c) in relation to any calculation or determination of interest rate in respect of any Loan denominated in Euros and in relation to the calculation or computation of the Eurocurrency Rate in respect thereof, “Business Day” shall mean any day which is a TARGET Day and (d) in relation to any calculation or determination of interest rate in respect of any Daily Simple SOFR Loan, “Business Day” shall mean any day which is a U.S. Government Securities Business Day.
“Calculation Date”: with respect to each Foreign Currency, the last day of each calendar quarter (or, if such day is not a Business Day, the next succeeding Business Day) and such other days from time to time as the Administrative Agent shall reasonably designate as a “Calculation Date”; provided, that the second Business Day preceding each Borrowing Date with respect to, and preceding each date of any borrowing, conversion or continuation of, any Foreign Currency Loan shall also be a “Calculation Date” with respect to the relevant Foreign Currency; provided further that with respect to any SONIA Loan, Daily Simple SOFR Loan or Daily Simple CORRA Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month) shall also be a “Calculation Date”.
“Calendar Quarter”: a three-month period consisting of (i) each January, February and March, (ii) each April, May and June, (iii) each July, August and September or (iv) each October, November and December.
“Canadian Dollars”: the lawful currency of Canada.
“Cancelled Bank”: (i) any Bank that has the whole or any part of its Commitment cancelled under subsection 2.13(a), (b) or (c), subsection 2.16(c) or subsection 2.17(b) or the Commitment of which has expired under subsection 2.16(a) and (ii) any Defaulting Bank that the Company designates in writing to such Bank and the Administrative Agent as a Cancelled Bank.
“Capital Corporation”: as defined in the preamble hereto.
“CBR Loan”: a Loan that bears interest at a rate determined by reference to the Central Bank Rate.
“CBR Spread”: the Applicable Margin, applicable to such Loan that is replaced by a CBR Loan.
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“Central Bank Rate”: a rate equal to the greater of (i) (A) for any Loan denominated in (a) Pounds Sterling, the Bank of England (or any successor thereto)’s “Bank Rate” as published by the Bank of England (or any successor thereto) from time to time, (b) Euros, one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers): (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time, and (c) subject to subsection 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars, any other Foreign Currency, a central bank rate as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers), plus (B) the applicable Central Bank Rate Adjustment and (ii) the Floor.
“Central Bank Rate Adjustment”: for any day, for any Loan denominated in (a) Euros, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Eurocurrency Rate for Loans denominated in Euros for the five most recent Business Days preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest Eurocurrency Rate applicable during such period of five Business Days) minus (ii) the Central Bank Rate in respect of Euros in effect on the last Business Day in such period, (b) Pounds Sterling, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of Adjusted Daily Simple SONIA for Loans in Pounds Sterling for the five most recent SONIA Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest such Adjusted Daily Simple SONIA applicable during such period of five SONIA Business Days) minus (ii) the Central Bank Rate in respect of Pounds Sterling in effect on the last SONIA Business Day in such period, and (c) subject to section 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars, any other Foreign Currency, a Central Bank Rate Adjustment as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers). For purposes of this definition, (x) the term Central Bank Rate shall be determined disregarding clause (B) of the definition of such term and (y) the Eurocurrency Rate in respect of Loans denominated in Euros on any day shall be based on the EURIBOR Screen Rate on such day at approximately the time referred to in the definition of such term for deposits in Euros for a maturity of one month.
“Certificate of Non-Bank Status”: a certificate substantially in the form and substance of Exhibit L.
“Closing Date”: the date on which each of the conditions precedent specified in subsection 4.1 shall have been satisfied (or compliance therewith shall have been waived by the Majority Banks hereunder).
“CME Term SOFR Administrator”: CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
“Co-Syndication Agents”: as defined in the preamble hereto.
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Commitment”: as to any Bank, the amount set opposite such Bank’s name on Schedule II or in any assignment pursuant to which such Bank becomes a party hereto with respect to any interest purchased therein, as such amount may be modified as provided herein; collectively, as to all Banks, the “Commitments”.
9
“Commitment Expiration Date”: as defined in subsection 2.16(a).
“Commitment Fee Rate”: the rate per annum set forth below in the column corresponding to the Prevailing Rating of the Company:
Level I Rating |
Level II Rating |
Level III Rating |
Level IV Rating |
Level V Rating |
0.040% |
0.050% |
0.060% |
0.080% |
0.100% |
“Commitment Increase Cap”: at any time, an amount equal to (i) $2,000,000,000, minus (ii) the sum of (A) the aggregate increase in Commitments incurred by any Borrower in reliance on subsection 2.20, (B) the aggregate increase in Commitments (as defined in the 364-Day Credit Agreement), if any, under the 364-Day Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 364-Day Credit Agreement) and (C) the aggregate increase in Commitments (as defined in the 2031 Credit Agreement), if any, under the 2031 Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 2031 Credit Agreement).
“Commitment Increase Notice”: as defined in subsection 2.20(a).
“Commitment Increase Supplement”: as defined in subsection 2.20(c).
“Commitment Percentage”: as to any Bank at any time, the percentage which such Bank’s Commitment at such time constitutes of all the Commitments at such time or, at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Bank’s Extensions of Credit then outstanding constitutes of the aggregate principal amount of the Total Extensions of Credit then outstanding; collectively, as to all the Banks, the “Commitment Percentages”; provided that when a Defaulting Bank shall exist, “Commitment Percentage” shall mean, when appropriate as determined by the Administrative Agent in order to provide ratable treatment at any time a Defaulting Bank exists (and without increasing the Commitment of any Bank), the percentage of the total Commitments (disregarding any Defaulting Bank’s Commitment) represented by such Bank’s Commitment.
“Commitment Period”: as to any Bank at any time, the period from and including the Closing Date to but not including the Termination Date of such Bank or such earlier date on which the Commitments shall terminate as provided herein.
“Committed Extensions of Credit”: as to any Bank at any time, the amount equal to the sum of the Dollar Equivalent of (a) the aggregate principal amount of all Committed Rate Loans held by such Bank then outstanding and (b) such Bank’s Commitment Percentage multiplied by the L/C Obligations then outstanding.
“Committed Rate Loans”: each loan made pursuant to subsection 2.1.
“Commonly Controlled Entity”: in relation to a Borrower, an entity, whether or not incorporated, which is under common control with such Borrower within the meaning of Section 414(b) or (c) of the Code.
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“Company”: as defined in the preamble hereto.
“Consolidated Capital Base”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, the sum of (a) the amount shown opposite the item “Total Stockholders’ Equity” on the consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries plus (b) all indebtedness of the Capital Corporation and its consolidated Subsidiaries for borrowed money subordinated (on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I) to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the sum of clauses (a) and (b) hereof as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that the sum of the amounts referred to in clauses (a) and (b) is determined in accordance with GAAP. Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, adjustments resulting from any accumulated other comprehensive income as reflected on the most recent publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of any fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be deemed not to be included in Consolidated Capital Base.
“Consolidated Net Worth”: as defined in subsection 6.2(b)(ii).
“Consolidated Senior Debt”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, indebtedness for borrowed money other than any indebtedness for borrowed money that is subordinated, on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I, to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the amount of such indebtedness for borrowed money (other than such subordinated indebtedness) as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that such amount is determined in accordance with GAAP. Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, indebtedness for borrowed money in respect of any Securitization Indebtedness shall be deemed not included in Consolidated Senior Debt.
“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.
“CORRA”: the Canadian Overnight Repo Rate Average administered and published by the CORRA Administrator.
“CORRA Administrator”: the Bank of Canada (or any successor administrator).
“CORRA Determination Date”: as defined in the definition of Daily Simple CORRA.
“CORRA Rate Day”: as defined in the definition of Daily Simple CORRA.
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“Corresponding Tenor”: with respect to any Available Tenor, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Credit Rating”: as of any date, (a) as to any Person, the rating assigned to the relevant long term senior unsecured (and non-credit enhanced) Debt obligations of such Person by Moody’s, S&P or Fitch, in each case as of the close of business on such date and (b) if no rating for such Debt described in clause (a) is available, the corporate credit rating of such Person as announced by Moody’s, S&P or Fitch, in each case as of the close of business on such date.
“Currency”: any Dollars and any Foreign Currency.
“Daily Simple CORRA”: for any day (a “CORRA Rate Day”), a rate per annum equal to CORRA for the day (such day “CORRA Determination Date”) that is five (5) Business Days prior to (i) if such CORRA Rate Day is a Business Day, such CORRA Rate Day or (ii) if such CORRA Rate Day is not an Business Day, the Business Day immediately preceding such CORRA Rate Day, in each case, as such CORRA is published by the CORRA Administrator on the CORRA Administrator’s website. Any change in Daily Simple CORRA due to a change in CORRA shall be effective from and including the effective date of such change in CORRA without notice to the Borrower. If by 5:00 p.m. (Toronto time) on any given CORRA Determination Date, CORRA in respect of such CORRA Determination Date has not been published on the CORRA Administrator’s website and a Benchmark Replacement Date with respect to the Daily Simple CORRA has not occurred, then CORRA for such CORRA Determination Date will be CORRA as published in respect of the first preceding Business Day for which such CORRA was published on the CORRA Administrator’s website, so long as such first preceding Business Day is not more than five (5) Business Days prior to such CORRA Determination Day. “Daily Simple CORRA Loan”: a Loan that bears interest at a rate based on the Adjusted Daily Simple CORRA.
“Daily Simple SOFR”: for any day (a “SOFR Rate Day”), a rate per annum equal to (a) SOFR for the day (such day “SOFR Determination Date”) that is five U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website or (b) if SOFR is not available for the SOFR Determination Date determined pursuant to clause (a) above, by 5:00 p.m., New York City time, on any day of determination of Daily Simple SOFR, then Daily Simple SOFR for such day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day prior to the SOFR Determination Date for which SOFR was published on the SOFR Administrator’s Website; provided that Daily Simple SOFR determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three consecutive SOFR Rate Days and thereafter subsection 2.11(a) shall govern; provided, further, that if Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
“Daily Simple SOFR Loan”: a Loan that bears interest at a rate based on the Daily Simple SOFR.
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“Daily Simple SONIA”: for any day (a “SONIA Interest Day”), an interest rate per annum equal to (a) SONIA for the day that is five SONIA Business Days (such fifth SONIA Business Day determined pursuant to each of subclauses (i) and (ii), the “SONIA Lookback Day”) prior to (i) if such SONIA Interest Day is a SONIA Business Day, such SONIA Interest Day or (ii) if such SONIA Interest Day is not a SONIA Business Day, the SONIA Business Day immediately preceding such SONIA Interest Day or (b) if SONIA is not available for the SONIA Lookback Day determined pursuant to clause (a) above, by 5:00 p.m., London time on any day of determination of Daily Simple SONIA, then Daily Simple SONIA for such day will be SONIA as published in respect of the first preceding SONIA Business Day prior to the SONIA Lookback Day for which SONIA was published on the SONIA Administrator’s Website; provided that Daily Simple SONIA determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SONIA for no more than three consecutive SONIA Interest Days and thereafter subsection 2.11(a) shall govern. Any change in Daily Simple SONIA due to a change in SONIA shall be effective from and including the effective date of such change in SONIA without notice to the Borrower.
“Deal Year”: as defined in subsection 2.16(c).
“Debt”: as defined in subsection 6.2.
“Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Defaulting Bank”: any Bank that has (a) failed to fund any portion of its Loans or participations in Letters of Credit within two Business Days of the date required to be funded by it hereunder, unless such Bank has notified the Administrative Agent and the Borrower that such failure is the result of such Bank’s good faith determination that one or more conditions precedent to funding has not been satisfied; (b) notified the Company, the Administrative Agent, any Issuing Bank or any Bank in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit; (c) failed, within three Business Days after written request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit; provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower; (d) otherwise failed to pay over to the Administrative Agent or any other Bank any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute; or (e) (i) become or is insolvent or has a parent company that has become or is insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or (iii) become or has a parent company that has become the subject of a Bail-In Action; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank. If any Bank shall become a Defaulting Bank, the Company shall have the right, so long as no Event of Default has occurred and is then continuing, upon giving written notice to the Administrative Agent and such Bank in accordance with subsection 2.6, notwithstanding subsection 2.12(b), to prepay in full the Loans of such Bank, together with accrued interest thereon, any amounts payable to such Bank pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid commitment fee or other amount payable to such Bank hereunder and/or, upon giving not less than three Business Days’ notice to such Bank and the Administrative Agent, to cancel the whole or part of the Commitment of any such Bank.
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Upon any such cancellation of the Commitment of a Defaulting Bank, participating interests in Letters of Credit shall be reallocated ratably among the remaining Banks in accordance with subsection 2.23(d).
“Designated Person”: a Person
(i) listed in the annex to, or otherwise the subject of the provisions of, any Executive Order;
(ii) named as a “Specially Designated National and Blocked Person” on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list (each, an “SDN”), or is otherwise the subject or target of any Sanctions Laws and Regulations, including the Crimea, so-called Donetsk People’s Republic, so-called Luhansk People’s Republic and the non-government controlled areas of the Kherson and Zaporizhzhia regions of Ukraine, Cuba, Iran, North Korea and Syria; or
(iii) in which an SDN has a controlling interest of 50% or greater ownership interest.
“Dividing Person”: as defined in the definition of Division.
“Division”: the statutory division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement) pursuant to Section 18-217 of the Delaware Limited Liability Company Act, which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor”: any person that, upon the consummation of a Division of a Dividing Person, holds all or substantially all of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division.
“Dollar Equivalent”: at any time as to any amount denominated in a Foreign Currency, the equivalent amount in Dollars as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of Dollars with such Foreign Currency on (a) in the case of a determination made pursuant to subsection 2.11(g), the date of such conversion and (b) in the case of any other determination, the most recent Calculation Date for such Foreign Currency.
“Dollar Loan”: any Committed Rate Loan denominated in Dollars.
“Dollars” and “$”: dollars in lawful currency of the United States of America.
“Domestic Bank”: any Bank organized under the laws of the United States of America, any State thereof or the District of Columbia.
“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
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“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Signature”: an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“EMU”: the Economic and Monetary Union as contemplated in the Treaty.
“Engaged Acres”: the number of unique acres with at least one operation pass documented in the Company’s proprietary online farm management system in the 12 months prior to the end of the fiscal year.
“Equipment Operations”: those business segments of the Company and its consolidated Subsidiaries that are primarily engaged in the manufacture and distribution of equipment, parts and related attachments.
“Equipment Operations Debt”: at a particular time, the sum of short-term and long-term indebtedness for borrowed money that is or would be shown on a balance sheet of Equipment Operations (with Financial Services reflected only on an equity basis), which balance sheet was or would be prepared on the basis of the most recent publicly available consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter of the Company and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Company and its consolidated Subsidiaries).
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Euro”: the single currency of Participating Member States of the EMU introduced in accordance with the provisions of Article 123 of the Treaty and, in respect of all payments to be made under this Agreement in Euro, means immediately available, freely transferable funds in such currency.
“EURIBOR Screen Rate”: as defined in the definition of Eurocurrency Rate.
“Eurocurrency Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon a Eurocurrency Rate.
“Eurocurrency Rate”: (a) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Australian Dollars, the rate per annum equal to the average bid reference rate as administered by the Australian Financial Markets Association (or any other Person that takes over the administration of that rate) for Australian Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BBSY of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BBSY Screen Rate”) at approximately 11:00 A.M., Local Time, two Business Days prior to the beginning of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BBSY Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
15
(b) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in New Zealand Dollars, the rate per annum equal to the average bid reference rate as administered by the New Zealand Financial Markets Association (or any other Person that takes over the administration of that rate) for New Zealand Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BKBM of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BKBM Screen Rate”) at approximately 11:00 A.M., Local Time, on the first day of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BKBM Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
(c) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Euros, the rate per annum equal to the interbank offered rate administered by the European Money Markets Institute (or any other Person that takes over the administration of such rate) for a tenor equal in length to such Interest Period as displayed on page on Reuters Page EURIBOR01 (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “EURIBOR Screen Rate”) at approximately 11:00 a.m., Local Time, two Business Days prior to the beginning of such Interest Period; provided, that, if the EURIBOR Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
Notwithstanding the above, in no event shall the Eurocurrency Rate be less than the Floor.
“Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Exchange Rate”: on any day, the rate at which the starting Currency may be exchanged into the other relevant Currency, as set forth at approximately 10:00 A.M., Local Time, on such date on the Reuters World Spots page for such starting Currency. In the event that such rate does not appear on any Reuters World Spots page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates reasonably selected by the Administrative Agent.
16
“Existing Credit Agreement”: as defined in subsection 4.1(e).
“Existing Letters of Credit”: the letters of credit issued under the Existing Credit Agreement and outstanding on the Closing Date and set forth on Schedule III.
“Exposure”: (a) with respect to an Objecting Bank at any time, the aggregate amount of such Bank’s Extensions of Credit then outstanding and (b) with respect to any other Bank at any time, the Commitment of such Bank then in effect or, if the Commitments have been terminated, the amount of such Bank’s Extensions of Credit then outstanding.
“Extension Request”: each request by the Borrowers made pursuant to subsection 2.16 for the Banks to extend this Agreement, which shall contain the information in respect of such extension specified in Exhibit E and shall be delivered to the Administrative Agent in writing.
“Extensions of Credit”: as to any Bank at any time, the amount equal to the sum of the Dollar Equivalent of (a) the aggregate principal amount of all Loans held by such Bank then outstanding and (b) such Bank’s Commitment Percentage multiplied by the L/C Obligations then outstanding.
“FATCA”: Sections 1471 through 1474 of the Code (and any comparable successor provisions), any effective regulations published thereunder or official interpretations thereof issued by any Governmental Authority charged with the administration thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreements with respect thereto, and any treaty, law, regulations, or other official guidance enacted in any other jurisdiction relating to such intergovernmental agreement.
“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“Federal Reserve Board”: the Board of Governors of the Federal Reserve System of the United States of America.
“Financial Services”: the businesses of the Company (including the credit businesses) that are not primarily engaged in Equipment Operations.
“Fitch”: Fitch Ratings Inc.
“Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, all of the Capital Corporation’s and its consolidated Subsidiaries’ consolidated interest on indebtedness for borrowed money, amortization of discounts of indebtedness for borrowed money, the portion of rentals under financing leases deemed to represent interest and rentals under operating leases; provided, that, notwithstanding the foregoing, (i) consolidated interest on Securitization Indebtedness and amortization of Securitization Indebtedness shall be deemed not included in Fixed Charges and (ii) any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk shall be deemed not included in Fixed Charges; provided, further, that such amounts (but not any amounts constituting consolidated interest on, or amortization of, Securitization Indebtedness) of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available consolidated statements of income of the Capital
17
Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such amounts are determined in accordance with GAAP.
“Floor” the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA, Adjusted Daily Simple CORRA Rate or the Central Bank Rate, as applicable. For the avoidance of doubt, the initial Floor for each of the Central Bank Rate, Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA and Adjusted Daily Simple CORRA shall be 0.0%.
“Foreign Bank”: any Bank that is not a Domestic Bank.
“Foreign Currency”: (a) Euros, Pounds Sterling, Australian Dollars and Canadian Dollars, (b) upon (i) confirmation by Deutsche Bank AG, New York Branch to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars and (ii) confirmation by Sumitomo Mitsui Banking Corporation to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars (provided, that, such confirmation from either Deutsche Bank AG, New York Branch or Sumitomo Mitsui Banking Corporation shall not be required if such Bank ceases to be a Bank hereunder), New Zealand Dollars and (c) as agreed by the Administrative Agent, any other Currency which is freely traded and convertible into Dollars in the London interbank market and for which the Dollar Equivalent thereof can be calculated from time to time.
“Foreign Currency Equivalent”: at the time of determination or conversion thereof, as applicable, as to any amount denominated or expressed in Dollars, the equivalent amount in the applicable Foreign Currency as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of such Foreign Currency with Dollars on such date.
“Foreign Currency Loan”: each Loan denominated in a Foreign Currency.
“GAAP”: generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of the fiscal year ended November 2, 2025, except with respect to capital lease obligations, in which case the generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of January 1, 2015 shall apply.
“Governmental Authority”: any nation or government, any state or local or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Hedging Transaction”: any swap transaction, interest rate protection agreement (including any interest rate swap, interest “cap” or “collar” or any other interest rate hedging device entered into by the Capital Corporation or one or more of its Subsidiaries), option agreement, short or long position in equity or debt instruments, commodities, futures and forward transactions, outperformance agreement or other similar transaction, agreement or arrangement entered into by the Capital Corporation or one or more of its Subsidiaries.
“IBA”: has the meaning assigned to such term in subsection 1.4.
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“Important Property”: (a) any manufacturing plant, including land, all buildings and other improvements thereon, and all manufacturing machinery and equipment located therein, owned and used by the Company or a Restricted Subsidiary primarily for the manufacture of products to be sold by the Company or such Restricted Subsidiary, (b) the executive office and administrative building of the Company in Moline, Illinois, and (c) research and development facilities, including land and buildings and other improvements thereon and research and development machinery and equipment located therein, in each case, owned and used by the Company or a Restricted Subsidiary; except in any case property of which the aggregate fair value as determined by the Board of Directors of the Company does not at the time exceed 1% of Consolidated Net Worth.
“Increasing Bank”: as defined in subsection 2.20(c).
“Indemnified Person”: as defined in subsection 10.4(b).
“Indemnified Taxes”: as defined in subsection 2.17(a).
“Index Debt”: any senior, unsecured, non-credit enhanced long-term debt issued by the Company.
“Interest Payment Date”: (a) as to any ABR Loan, the last Business Day of each March, June, September and December, commencing on the first of such days to occur after such ABR Loan is made or a Eurocurrency Loan or Term Benchmark Loan is converted to an ABR Loan, (b) as to any Eurocurrency Loan or Term Benchmark Loan, the last day of each Interest Period applicable thereto, provided that as to any Eurocurrency Loan or Term Benchmark Loan in respect of which a Borrower has selected an Interest Period of greater than three months, interest shall also be paid on the day which is three months after the beginning of such Interest Period, (c) as to any SONIA Loan, Daily Simple CORRA Loan or Daily Simple SOFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing Date of such Loan (or if there is no numerically corresponding day in such later month, then the last day of such month) and (d) the Termination Date.
“Interest Period”: (a) with respect to any Eurocurrency Loan or Term Benchmark Loan, the period commencing on the Borrowing Date, the date any ABR Loan is converted to a Eurocurrency Loan or Term Benchmark Loan, as applicable or the date any Eurocurrency Loan or Term Benchmark Loan, as applicable is continued as a Eurocurrency Loan or Term Benchmark, as applicable, as the case may be, with respect to such Eurocurrency Loan or Term Benchmark Loan, as applicable and ending one, three or six months thereafter in the case of any Eurocurrency Loan or Term Benchmark Loan denominated in any Currency other than Canadian Dollars (or, with the consent of all relevant Banks, twelve months thereafter, or a period of less than one month thereafter if all relevant Banks consent to such period) (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment), or one or three months thereafter in the case of any Term Benchmark Loan denominated in Canadian Dollars, as selected by a Borrower in its notice of borrowing, conversion or continuance as provided in subsection 2.1(c) or 2.9; and
(b) with respect to any Negotiated Rate Loan, the period or periods commencing on the Borrowing Date with respect to such Negotiated Rate Loan or the last day of any Interest Period with respect thereto and ending on the dates as shall be mutually agreed upon between the relevant Borrower and the relevant Bank;
provided, that all of the foregoing provisions relating to Interest Periods are subject to the following:
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“IRS”: as defined in subsection 2.17(c).
“ISDA Definitions”: the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP”: with respect to any standby Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).
“Issuing Bank”: any Bank that a Borrower may select from time to time that is willing to act as issuer of Letters of Credit, in its capacity as issuer of any Letter of Credit.
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“Issuing Bank L/C Commitment”: $0.
“JD Luxembourg”: as defined in the preamble hereto.
“JPMorgan Chase Bank, N.A.”: JPMorgan Chase Bank, N.A., a national association.
“Judgment Currency”: as defined in subsection 2.24.
“L/C Commitment”: $0.
“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to subsection 2.26(e). For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“L/C Participants”: the collective reference to all the Banks (other than, with respect to any Letter of Credit, the applicable Issuing Bank in its capacity as Issuing Bank) or any of them.
“Letter of Credit Fee”: the rate per annum equal to the Applicable Margin for Eurocurrency Loans set forth in the term “Applicable Margin” corresponding to the Prevailing Rating of the Company as of such date of determination on the face amount of each Letter of Credit.
“Letters of Credit”: as defined in subsection 2.26(a).
“Level”: Level I Rating, Level II Rating, Level III Rating, Level IV Rating or Level V Rating, as the context shall require.
“Level I Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is Aa3 or higher by Moody’s, AA- or higher by S&P and AA- or higher by Fitch.
“Level II Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A1 by Moody’s, A+ by S&P and A+ by Fitch.
“Level III Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A2 by Moody’s, A by S&P and A by Fitch.
“Level IV Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A3 by Moody’s, A- by S&P and A- by Fitch.
“Level V Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is below A3 by Moody’s, below A- by S&P and below A- by Fitch.
“Loan Account”: as defined in subsection 2.3; collectively, the “Loan Accounts”.
“Loan Assignees”: as defined in subsection 10.5(c).
“Loan Assignment”: an Assignment and Assumption, substantially in the form of Exhibit B.
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“Loan Documents”: this Agreement, including schedules and exhibits hereto, and the Notes.
“Loans”: the collective reference to the Committed Rate Loans and the Negotiated Rate Loans.
“Local Time”: (a) in the case of Foreign Currency Loans denominated in Canadian Dollars, Toronto, Ontario time, (b) in the case of Foreign Currency Loans denominated in Australian Dollars, Sydney, Australia time, (c) in the case of Foreign Currency Loans denominated in New Zealand Dollars, Wellington, New Zealand time, (d) in the case of Foreign Currency Loans denominated in Euros, Brussels time, (e) in the case of all other Foreign Currency Loans, London time and (f) in all other cases, New York time.
“Losses”: as defined in subsection 10.4(b).
“Luxembourg Obligations”: the collective reference to the unpaid principal of and interest on the Loans made to JD Luxembourg and all other obligations and liabilities of JD Luxembourg (including, without limitation, interest accruing at the then applicable rate provided herein after the maturity of such Loans and interest accruing at the then applicable rate provided herein after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to JD Luxembourg, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Banks that are required to be paid by JD Luxembourg pursuant to the terms of any of the foregoing agreements).
“Majority Banks”: at any particular time, Banks having Commitment Percentages aggregating more than fifty percent; provided that (a) at any time after the termination of all the Commitments, “Majority Banks” shall mean Banks holding Extensions of Credit aggregating more than fifty percent in principal amount of the Total Extensions of Credit and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Majority Banks” shall mean Banks whose Exposure aggregates more than fifty percent of the aggregate Exposure of all the Banks.
“Margin Stock”: as defined in Regulation U of the Board.
“Moody’s”: Moody’s Investor Service, Inc.
“Mortgage”: as defined in subsection 6.2.
“Negotiated Rate Loan”: each Loan made to the Company or the Capital Corporation by a Bank pursuant to a Negotiated Rate Loan Request in such principal amount, for such number of Interest Periods (subject to the proviso to the definition of “Interest Period” in this subsection 1.1) and having such interest rate(s) and repayment terms as shall, in each case, be mutually agreed upon between such Borrower and such Bank.
“Negotiated Rate Loan Request”: each request by the Company or the Capital Corporation for a Bank to make Negotiated Rate Loans, which shall be delivered to such Bank in writing, by facsimile transmission, or by telephone, immediately confirmed in writing, and which shall specify the amount to be borrowed and the proposed Borrowing Date.
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“Net Earnings Available for Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, the sum of (i) consolidated net earnings of the Capital Corporation and such Subsidiaries for such period without deduction of Fixed Charges and without deduction of federal, state or other income taxes; provided that such net earnings of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available statements of income of the Capital Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such net earnings are determined in accordance with GAAP, except that earned investment tax credits may be included as revenue in the consolidated income statement of the Capital Corporation and its consolidated Subsidiaries, rather than as an offset against the provision for income taxes; provided, further, that such consolidated net earnings of the Capital Corporation and its Consolidated Subsidiaries for such period shall not include any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk and (ii) Support Payments received by the Capital Corporation in or in respect of such period.
“New Bank”: as defined in subsection 2.20(b).
“New Bank Supplement”: as defined in subsection 2.20(b).
“New Zealand Dollars”: the lawful currency of New Zealand.
“Non-Qualifying Bank”: as defined in subsection 2.17(e).
“Notes”: the collective reference to any promissory note evidencing Loans.
“NYFRB”: the Federal Reserve Bank of New York.
“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“NYFRB’s Website”: the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
“Objecting Banks”: as defined in subsection 2.16(a).
“Offered Increase Amount”: as defined in subsection 2.20(a).
“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.
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“Overnight Rate”: for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Effective Rate, and (b) with respect to any amount denominated in a Foreign Currency, at a rate reasonably determined by the Administrative Agent to be the cost to it of funding such amounts.
“Participant Register”: as defined in subsection 10.5(b).
“Participants”: as defined in subsection 10.5(b).
“Participating Member State”: any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
“Payment”: as defined in subsection 9.4(b).
“Payment Notice”: as defined in subsection 9.4(b).
“Periodic Term CORRA Determination Day”: as defined in the definition of Term CORRA.
“Person”: an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature, provided that for purposes of subsection 8(h), Person shall also include two or more entities acting as a syndicate or any other group for the purpose of acquiring, holding or disposing of securities of the Company.
“Plan”: any pension plan which is covered by Title IV of ERISA and in respect of which either Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.
“Pounds” or “£” or “Pounds Sterling”: the lawful currency of the United Kingdom.
“Prevailing Rating”: at any date of determination, the Level then applicable; provided that for purposes of determining the applicable Level when the assigned Credit Ratings of the Company by all three Ratings Agencies do not fall within the same Level: (i) if the Credit Ratings of the Company assigned by S&P and Moody’s fall within the same Level, the Prevailing Rating shall be such Level, (ii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is one Level, the Prevailing Rating shall be determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s and (iii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is more than one Level, the Prevailing Rating shall be the Level one notch lower than the Level determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s.
“Prime Rate”: the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
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“Purchasing Banks”: as defined in subsection 10.5(d).
“Ratings Agencies”: S&P, Moody’s and Fitch.
“Re-Allocation Date”: as defined in subsection 2.20(e).
“Reference Time”: with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two Business Days preceding the date of such setting, (2) if such Benchmark is the Eurocurrency Rate in respect of Loans denominated in Euros, 11:00 a.m. Brussels time two TARGET Days preceding the date of such setting, (3) if such Benchmark is SONIA, then four SONIA Business Days prior to such setting, (4) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting, (5) if such Benchmark is Daily Simple CORRA, then four Business Days prior to such setting, (6) if such Benchmark is the Term CORRA Rate, 1:00 p.m. Toronto local time on the day that is two Business Days preceding the date of such setting and (7) if such Benchmark is none of the Term SOFR Rate, the EURIBOR Rate, SONIA, Daily Simple SOFR, Daily Simple CORRA or the Term CORRA, the time determined by the Administrative Agent in its reasonable discretion.
“Register”: as defined in subsection 10.5(e).
“Reimbursement Obligation”: the obligation of the Company or the Capital Corporation to reimburse an Issuing Bank pursuant to subsection 2.26(e)for amounts drawn under Letters of Credit issued for its account.
“Related Parties”: means, with respect to any specified Person, such Person’s affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s affiliates.
“Relevant Governmental Body”: (a) with respect to a Benchmark Replacement in respect of Loans denominated in Dollars, the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto, (b) with respect to a Benchmark Replacement in respect of Loans denominated in Pounds Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (c) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto (d) with respect to Benchmark Replacement in respect of Loans denominated in Canadian Dollars, the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto, and (e) with respect to a Benchmark Replacement in respect of Loans denominated in any Foreign Currency (other than Pounds Sterling, Euros or Canadian Dollars), (i) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated or any central bank or other supervisor which is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark Replacement or (ii) any working group or committee officially endorsed or convened by (1) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated, (2) any central bank or other supervisor that is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement, (3) a group of those central banks or other supervisors or (4) the Financial Stability Board or any part thereof.
“Relevant Rate”: with respect to (i) any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Rate, (ii) any Eurocurrency Loan denominated in any Currency, the Eurocurrency Rate applicable thereto, (iii) any Loan denominated in Pounds Sterling, Daily Simple SONIA, (iv) any Daily Simple SOFR Loan, Daily Simple SOFR, (v) any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA and (vi) any Daily Simple CORRA Loan, Daily Simple CORRA.
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“Report Period”: as defined in subsection 2.18.
“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder.
“Required Banks”: at a particular time, Banks having Commitment Percentages aggregating at least 66-2/3%; provided that (a) at any time after the termination of all the Commitments, “Required Banks” means Banks holding Extensions of Credit aggregating at least 66-2/3% in principal amount of the Total Extensions of Credit and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Required Banks” means Banks whose Exposure aggregates at least 66-2/3% of the aggregate Exposure of all the Banks.
“Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserves”: as defined in subsection 2.13(c).
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”: of a Borrower, the Chairman, the President, any Executive, Senior or other Vice President, the Treasurer, any Assistant Secretary and any Assistant Treasurer of such Borrower.
“Restricted Margin Stock”: any Margin Stock, the sale, pledge or other disposition of which by the Company or any of its Subsidiaries is in any way restricted by an arrangement with any Bank or any affiliate thereof to the extent that the value thereof (determined in accordance with Regulation U of the Board) does not exceed 25% of the value (determined in accordance with such Regulation U) of all the assets subject to such restriction.
“Restricted Subsidiary”: any Subsidiary of the Company incorporated in the United States of America or Canada (a) which is engaged in, or whose principal assets consist of property used by the Company or any Restricted Subsidiary in, the manufacture of products within the United States of America or Canada or in the sale of products principally to customers located in the United States of America or Canada except any corporation which is a retail dealer in which the Company has, directly or indirectly, an investment, or (b) which the Company shall designate as a Restricted Subsidiary in an officers’ certificate signed by two Responsible Officers of the Company and delivered to the Administrative Agent.
“S&P”: Standard and Poor’s Financial Services LLC.
“Sale and Lease-back Transaction”: as defined in subsection 6.3.
“Sanctions Laws and Regulations”:
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(i) any sanctions, prohibitions or requirements imposed by any executive order (an “Executive Order”) or by any sanctions program administered by the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) or U.S. Department of State; and
(ii) any sanctions measures imposed by the United Nations Security Council, the European Union or the United Kingdom, His Majesty’s Treasury and the Hong Kong Monetary Authority.
“Screen Rate”: the EURIBOR Screen Rate, the BBSY Screen Rate and/or the BKBM Screen Rate, as applicable.
“Securitization Indebtedness”: the aggregate outstanding indebtedness for borrowed money, owner trust certificates (however classified) or credit enhancements incurred in connection with transactions involving (i) the sale, transfer or other disposition of receivables or leases (retail or wholesale) by the Capital Corporation or any of its Subsidiaries and (ii) the issuance of commercial paper, medium term notes or any other form of financing by any structured bankruptcy-remote Subsidiary of the Capital Corporation or any related conduit lender (such transactions, “Securitizations”), provided, that the aggregate outstanding credit enhancements in the form of cash or letter(s) of credit provided by the Capital Corporation or any of its Subsidiaries (other than any structured bankruptcy-remote Subsidiary) in excess of 10% of the aggregate outstanding indebtedness for borrowed money and owner trust certificates (however classified) incurred in connection with such Securitizations shall not be deemed for the purposes of this Agreement to be Securitization Indebtedness, but shall be deemed for purposes of subsection 7.2 to be Consolidated Senior Debt.
“Significant Subsidiary”: of a Borrower, any Subsidiary of such Borrower the assets, revenues or net worth of which is, at the time of determination, equal to or greater than ten percent of the assets, revenues or net worth, respectively, of such Borrower at such time.
“SOFR”: a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator”: the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website”: the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SONIA”: with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website on the immediately succeeding Business Day.
“SONIA Administrator”: the Bank of England (or any successor administrator of the Sterling Overnight Index Average).
“SONIA Administrator’s Website”: the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SONIA Borrowing”: as to any borrowing, the SONIA Loans comprising such borrowing.
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“SONIA Business Day”: for any Loan denominated in Pounds Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London.
“SONIA Interest Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“SONIA Loan”: a Loan that bears interest at a rate based on Adjusted Daily Simple SONIA.
“SONIA Lookback Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“Subsidiary”: of a Person, a corporation or other entity of which securities or other ownership interests having ordinary voting power (other than securities or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.
“Support Payments”: payments from the Company to the Capital Corporation made pursuant to that certain Support Agreement, dated as October 15, 1996, by and between the Company and the Capital Corporation, as amended by the First Amended Agreement, dated as of November 1, 2003, between the Company and the Capital Corporation.
“T2”: the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.
“TARGET Day”: any day on which T2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“Termination Date”: March 23, 2029 or such later date as shall be determined pursuant to the provisions of subsection 2.16 with respect to non-Objecting Banks.
“Term Benchmark”: when used in reference to any Loan or Borrowing, refers to Loans, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Term SOFR Rate or the Adjusted Term CORRA Rate.
“Term CORRA”: for any calculation, with respect to any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term CORRA Determination Day”) that is two (2) Business Days prior to the first day of such Interest Period, as such rate is published by the Term CORRA Administrator; provided, however, that if as of 1:00 p.m. (Toronto time) on any Periodic Term CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Business Day is not more than five (5) Business Days prior to such Periodic Term CORRA Determination Day.
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“Term CORRA Administrator”: Candeal Benchmark Administration Services Inc., TSX Inc., or any successor administrator.
“Term CORRA Reference Rate”: the forward-looking term rate based on CORRA.
“Term SOFR Determination Day”: as defined in the definition of Term SOFR Reference Rate.
“Term SOFR Rate”: with respect to any Term Benchmark Borrowing in Dollars and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator; provided that if the Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Term SOFR Reference Rate”: for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.
“Total Commitments”: at any time, the aggregate amount of the Commitments then in effect.
“Total Extensions of Credit”: at any time, the aggregate amount of the Extensions of Credit of the Banks outstanding at such time.
“Total Stockholders’ Equity”: at a particular time, the total stockholders’ equity, exclusive of adjustments resulting from any accumulated other comprehensive income of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter (including the last quarter of any fiscal year) as determined in accordance with GAAP.
“Transferees”: as defined in subsection 10.5(g).
“Transfer Effective Date”: the effective date of an assignment of Loans or Commitments under a Loan Assignment.
“Treaty”: the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1987, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992 and came into force on November 1, 1993), the Amsterdam Treaty (which was signed at Amsterdam on October 2, 1997 and came into force on May 1, 1999) and the Nice Treaty (which was signed on February 26, 2001), each as amended from time to time and as referred to in legislative measures of the European Union for the introduction of, changeover to or operating of the Euro in one or more member states.
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“Type”: as to any Committed Rate Loan, its nature as an ABR Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan, SONIA Loan, or Eurocurrency Loan.
“UCP”: with respect to any commercial Letter of Credit, the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the time of issuance and subject to which such Letter of Credit was issued).
“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any Person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement”: the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“U.S. Government Securities Business Day”: any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Withholding Agent”: any Borrower or the Administrative Agent, as the case may be.
“Working Day”: any Business Day on which dealings in foreign currencies and exchange between banks may be carried on in London, England and New York, New York.
“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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| SECTION 2. | THE COMMITTED RATE LOANS; THE NEGOTIATED RATE LOANS; AMOUNT AND TERMS |
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(b)The Company and the Capital Corporation shall request Negotiated Rate Loans by delivering a Negotiated Rate Loan Request to any Bank at such time as the applicable Borrower and the applicable Bank shall agree. If such Borrower and any Bank agree to the terms of a Negotiated Rate Loan to be made on a Borrowing Date pursuant to a Negotiated Rate Loan Request, such Borrower and such Bank shall promptly notify by telephone the Administrative Agent of the aggregate amount of Negotiated Rate Loans to be made on such Borrowing Date and the respective Interest Periods therefor. Each Bank which is to make a Negotiated Rate Loan shall, at such time, on such Borrowing Date and at such location as shall be mutually agreed upon between such Borrower and such Bank, make available to such Borrower the amount of Negotiated Rate Loans to be made by such Bank, in immediately available funds. As soon as practicable after each Borrowing Date for Negotiated Rate Loans, the Administrative Agent shall notify each Bank of the aggregate amount of Negotiated Rate Loans advanced pursuant to a Negotiated Rate Loan Request on such Borrowing Date and the respective Interest Periods therefor.
(c)Within the limits and on the conditions set forth in this subsection 2.2, the Company and the Capital Corporation may from time to time borrow under this subsection 2.2, repay pursuant to paragraph (d) below, and reborrow under this subsection 2.2.
(d)Each Borrower shall repay to each Bank which has made a Negotiated Rate Loan to such Borrower (or the Loan Assignee in respect thereof, as the case may be) the principal thereof as agreed by such Borrower and such Bank. Notwithstanding anything herein to the contrary, each Borrower’s obligation to repay its Negotiated Rate Loans is a several obligation.
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for ascertaining Adjusted Daily Simple SONIA or Daily Simple SONIA for SONIA Loans, Adjusted Daily Simple CORRA or Daily Simple CORRA for Daily Simple CORRA Loans or Daily Simple SOFR or Daily Simple SOFR for Daily Simple SOFR Loans; provided that this clause (i) shall not apply to a Loan denominated in any Currency to the extent that a Benchmark Transition Event in respect of such Currency shall have occurred at such time or (ii) that deposits in the applicable Currency are not generally available, or cannot be obtained by the Banks, in the applicable market (any Foreign Currency affected by the circumstances described in clause (i) or (ii) is referred to as an “Affected Foreign Currency”), the Administrative Agent shall promptly give notice of such determination to such Borrower and the Banks, which with respect to Eurocurrency Loans and Term Benchmark Loans, shall be prior to the first day of the requested Interest Period for such Eurocurrency Loans or Term Benchmark Loans. If such notice is given, and until (x) the Administrative Agent notifies the Borrowers and the Banks that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the applicable Borrower delivers a new notice to convert or continue the applicable Loans in accordance with subsection 2.9 or a new borrowing request in accordance with subsection 2.1, (A) (1) to the extent such circumstances affect Term Benchmark Loans denominated in Dollars, any request for the making of, or continuation or conversion of a Loan into a Term Benchmark Loan denominated in Dollars shall be deemed to be a request for the making of or continuation or conversion into Daily Simple SOFR Loans (so long as Daily Simple SOFR is not also the subject of subsection 2.11(a)(i)) or ABR Loans (if Daily Simple SOFR is also the subject to subsection 2.11(a)(i)) and (2) to the extent such circumstances affect Term Benchmark Loans denominated in Canadian Dollars, any request for the making of, or continuation or conversion of a Loan into a Term Benchmark Loan denominated in Canadian Dollars shall be deemed to be a request for the making of or continuation or conversion into Daily Simple CORRA Loans (so long as Adjusted Daily Simple CORRA is not also the subject of subsection 2.11(a)(i)) or such request shall be ineffective (if Adjusted Daily Simple CORRA is also the subject to subsection 2.11(a)(i)), (B) to the extent such circumstances affect Daily Simple SOFR Loans, any request for the making of or conversion into a Daily Simple SOFR Loan shall be deemed to be a request for the making of or conversion into an ABR Loan and (C) to the extent such circumstances affect Eurocurrency Loans denominated in any Currency, Daily Simple CORRA Loans or SONIA Loans, as applicable, any request for a Eurocurrency Loan in such Currency, a Daily Simple CORRA Loan or a SONIA Loan, as applicable, shall be ineffective; provided that if the circumstances giving rise to such notice affect only one Type of Loan, then all other Types of Loans shall be permitted. Furthermore, if any Term Benchmark Loan, Eurocurrency Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan is outstanding on the date of the applicable Borrower’s receipt of the notice from the Administrative Agent referred to in this subsection 2.11(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan, Eurocurrency Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan, then until (x) the Administrative Agent notifies the Borrowers and the Banks that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the applicable Borrower delivers a new notice to convert or continue the applicable Loans in accordance with subsection 2.9 or a new borrowing request in accordance with subsection 2.1, (A) any such Term Benchmark Loan denominated in Dollars, Daily Simple CORRA Loan and/or any such Daily Simple SOFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan, (B) any Eurocurrency Loan and/or Term Benchmark Loan denominated in Canadian Dollars shall on the last day of the then-current Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day) bear interest at the Central Bank Rate for the applicable Currency plus the CBR Spread and (C) any SONIA Loan shall bear interest at the Central Bank Rate for Pounds Sterling plus the CBR Spread; provided that, in the cases of the foregoing clauses (B) and (C), if the Administrative Agent, provides notice to the Company of its determination (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Currency cannot be determined, any outstanding affected Term Benchmark Loans denominated in Canadian Dollars, Daily Simple CORRA Loans, Eurocurrency Loans or SONIA Loans, as applicable, at the applicable Borrower’s election, shall either (A) be converted into ABR Loans denominated in Dollars at the applicable exchange rate immediately or (B) be prepaid in full immediately.
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(b) Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” with respect to Dollars for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” with respect to any Currency for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark (including any related adjustments) for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Banks without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Banks comprising the Majority Banks.
(c) In connection with the implementation of a Benchmark Replacement, the Administrative Agent, in consultation with the Company, will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(d) The Administrative Agent will promptly notify the Company and the Banks of (i) any occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Bank (or group of Banks) pursuant to this subsection 2.11, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto or any other Loan Document, except, in each case, as expressly required pursuant to this subsection 2.11.
(e) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term CORRA Rate, Term SOFR Rate or Eurocurrency Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent shall modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.
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(f) Upon the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the Relevant Rate applicable to any Type of Loan, a Borrower may revoke any request for a Eurocurrency Loan, Term Benchmark Loan, SONIA Loan, Daily Simple CORRA Loan or Daily Simple SOFR Loan, as applicable, to be made, converted or continued during such Benchmark Unavailability Period, and, failing that, (x) to the extent such Benchmark Unavailability Period affects Term Benchmark Loans, the applicable Borrower will be deemed to have converted any request for a Term Benchmark Loan (i) denominated in Dollars into a request for a borrowing or conversion to (A) a Daily Simple SOFR Loan so long as Daily Simple SOFR is not the subject of a Benchmark Transition Event or (B) an ABR Loan if Daily Simple SOFR is the subject of a Benchmark Transition Event and (ii) denominated in Canadian Dollars into a request for a borrowing or conversion to (A) a Daily Simple CORRA Loan so long as Adjusted Daily Simple CORRA is not the subject of a Benchmark Transition Event or (B) such request shall be ineffective if Adjusted Daily Simple CORRA is the subject of a Benchmark Transition Event, (y) to the extent such Benchmark Unavailability Period affects Daily Simple SOFR Loans, the applicable Borrower will be deemed to have converted any request for a Daily Simple SOFR Borrowing into a request for a borrowing or conversion to an ABR Loan and (z) to the extent such Benchmark Unavailability Period affects Eurocurrency Loans in a Foreign Currency or any SONIA Loans, any request for a Eurocurrency Loan denominated in such Currency or a SONIA Loan, as applicable, shall be ineffective. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. Furthermore, if any Eurocurrency Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan is outstanding on the date of the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the Relevant Rate applicable to such Eurocurrency Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan or SONIA Loan, as applicable, then until such time as a Benchmark Replacement for such Currency or Type of Loan is implemented pursuant to this subsection 2.11, (i) to the extent such Benchmark Unavailability Period affects Term Benchmark Loans, any Term Benchmark Loan shall, on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, (A) if denominated in Dollars (x) a Daily Simple SOFR Loan so long as Daily Simple SOFR is not the subject of a Benchmark Transition Event or (y) an ABR Loan if Daily Simple SOFR is the subject of a Benchmark Transition Event, on such day and (B) if denominated in Canadian Dollars (x) a Daily Simple CORRA Loan so long as Adjusted Daily Simple CORRA is not the subject of a Benchmark Transition Event or (y) a Term Benchmark Loan which bears interest at the Central Bank Rate for Canadian Dollars plus the CBR Spread, (ii) to the extent such Benchmark Unavailability Period affects Daily Simple SOFR Loans, any Daily Simple SOFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an, ABR Loan and (iii) to the extent such Benchmark Unavailability Period affects Eurocurrency Loans in such Currency or any SONIA Loan, as applicable, any Daily Simple CORRA Loans, Eurocurrency Loan denominated in such Currency or SONIA Loan, as applicable, shall bear interest at the Central Bank Rate for the applicable Currency plus the CBR Spread; provided that, if the Administrative Agent provides written notice to the Company of its determination (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Currency cannot be determined, any outstanding affected Loans denominated in such Foreign Currency, at the Company’s election, shall either (A) be converted into ABR Loans denominated in Dollars (in an amount equal to the Dollar Equivalent of such Foreign Currency) immediately or (B) be prepaid in full immediately.
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In the event any Bank shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the converted Foreign Currency Loans of such Bank shall instead be applied to repay the ABR Loans or Loans denominated in Dollars, as the case may be, made by such Bank resulting from such conversion.
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The obligations of the parties under this subsection 2.17 shall survive termination of this Agreement, payment of the Loans and termination of the Letters of Credit.
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The rights and remedies against a Defaulting Bank under this subsection 2.23 are in addition to other rights and remedies that the Borrowers may have against such Defaulting Bank.
In the event and on the date that the Administrative Agent, the Company and the Issuing Banks each agree that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank, then the L/C Obligations of the Banks shall be readjusted to reflect the inclusion of such Bank’s Commitment and on such date such Bank shall purchase at par such of the Loans of the other Banks (other than Negotiated Rate Loans) as the Administrative Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Commitment Percentage and such Bank shall no longer be a Defaulting Bank; provided, that subject to subsection 10.15, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Bank arising from that Bank having become a Defaulting Bank, including any claim of a Non-Defaulting Bank as a result of such Non-Defaulting Bank’s increased exposure following such reallocation.
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The Capital Corporation waives promptness, diligence, presentment to, demand of payment from and protest to JD Luxembourg of any Luxembourg Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Capital Corporation hereunder shall be absolute and unconditional and not be affected by (a) the failure of any Bank or the Administrative Agent to assert any claim or demand or to enforce any right or remedy against JD Luxembourg under the provisions of this Agreement or otherwise; (b) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement or any other agreement; (c) the failure of any Bank to exercise any right or remedy against JD Luxembourg; (d) the invalidity or unenforceability of this Agreement; or (e) any other circumstance which might otherwise constitute a defense available to or discharge of JD Luxembourg (other than payment).
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The Capital Corporation further agrees that its agreement hereunder constitutes a promise of payment when due and not of collection, and waives any right to require that any resort be had by any Bank to any balance of any deposit account or credit on the books of any Bank in favor of JD Luxembourg or any other Person.
The obligations of the Capital Corporation hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of the Luxembourg Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Capital Corporation hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Bank to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any waiver or modification in respect of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Luxembourg Obligations, or by any other act or omission which may or might in any manner or to any extent vary the risk of the Capital Corporation or otherwise operate as a discharge of the Capital Corporation as a matter of law or equity.
The Capital Corporation further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Luxembourg Obligation is rescinded or must otherwise be restored by the Administrative Agent or any Bank upon the bankruptcy or reorganization of JD Luxembourg or otherwise.
In furtherance of the foregoing and not in limitation of any other right which the Administrative Agent or any Bank may have at law or in equity against the Capital Corporation by virtue hereof, upon the failure of JD Luxembourg to pay any Luxembourg Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Capital Corporation hereby promises to and will, upon receipt of written demand by the Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of such unpaid Luxembourg Obligation. In the event that, by reason of the bankruptcy of JD Luxembourg, (i) acceleration of Loans made to JD Luxembourg is prevented and (ii) the Capital Corporation shall not have prepaid the outstanding Loans and other amounts due hereunder owed by JD Luxembourg, the Capital Corporation will forthwith purchase such Loans at a price equal to the principal amount thereof plus accrued interest thereon and any other amounts due hereunder with respect thereto. The Capital Corporation further agrees that if payment in respect of any Luxembourg Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York and if, by reason of any change in law, disruption of currency or foreign exchange markets, war or civil disturbance or similar event, payment of such Luxembourg Obligation in such currency or such place of payment shall be impossible or, in the reasonable judgment of any applicable Bank, not consistent with the protection of its rights or interests, then, at the election of any applicable Bank, the Capital Corporation shall make payment of such Luxembourg Obligation in Dollars (based upon the applicable Exchange Rate in effect on the date of payment) and/or in New York.
Notwithstanding any payment made by the Capital Corporation hereunder or any set-off or application of funds of the Capital Corporation by the Administrative Agent or any Bank, the Capital Corporation shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Bank against JD Luxembourg or any guarantee or right of offset held by the Administrative Agent or any Bank for the payment of the Luxembourg Obligations, until all amounts owing to the Administrative Agent and the Banks by JD Luxembourg on account of the Luxembourg Obligations are paid in full in cash.
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If any amount shall be paid to the Capital Corporation on account of such subrogation rights at any time when all of the Luxembourg Obligations shall not have been paid in full in cash, such amount shall be held by the Capital Corporation in trust for the Administrative Agent and the Banks, segregated from its other funds, and shall, forthwith upon receipt by it, be turned over to the Administrative Agent in the exact form received by it (duly indorsed by it to the Administrative Agent, if required), to be applied against the Luxembourg Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
| SECTION 3. | REPRESENTATIONS AND WARRANTIES |
Each Borrower hereby represents and warrants to the Administrative Agent and to each Bank that:
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| SECTION 4. | CONDITIONS PRECEDENT |
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Each acceptance by any Borrower of a Loan, each issuance of a Letter of Credit and each increase in the drawable amount of any Letter of Credit for the account of a Borrower, shall constitute a representation and warranty by the relevant Borrower as of the date of such Loan, the date of issuance of such Letter of Credit or the date of increase in the drawable amount of such Letter of Credit, as applicable, that the applicable conditions in clauses (a) and (b) of this subsection 4.2 have been satisfied.
| SECTION 5. | AFFIRMATIVE COVENANTS |
Each of the Borrowers (except as otherwise specified) hereby agrees that, so long as there is any obligation by any Bank to make Loans to it hereunder, any obligation of an Issuing Bank to issue Letters of Credit hereunder, any Loan of such Borrower remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing by such Borrower to any Bank, any Issuing Bank or any Agent hereunder (unless the Majority Banks shall otherwise consent in writing):
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All such financial statements described in clause (a) or (b) above shall present fairly the consolidated financial condition and results of operations of such Borrower and its consolidated Subsidiaries and be prepared in accordance with generally accepted accounting principles in the United States of America (or, in the case of any such financial statements furnished by JD Luxembourg, international financial reporting standards in effect from time to time as applicable to JD Luxembourg, or such other accounting standards required by any applicable Luxembourg Governmental Authority) applied consistently throughout the periods reflected therein (except as approved by such accountants or officer, as the case may be, and disclosed therein). The Company and the Capital Corporation shall be deemed to have furnished such financial statements to each Bank when they are filed with the Securities and Exchange Commission and posted on its EDGAR system, and JD Luxembourg shall be deemed to have furnished such financial statements to each Bank when they are delivered to the Administrative Agent via electronic mail or other electronic transmission.
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| SECTION 6. | NEGATIVE COVENANTS OF THE COMPANY |
The Company hereby agrees that, so long as there is any obligation by any Bank to make Loans hereunder, any obligation of an Issuing Bank to issue Letters of Credit hereunder, any Loan remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing to any Agent, any Issuing Bank or any Bank hereunder, it shall not, nor in the case of subsections 6.2 and 6.3 shall it permit any Restricted Subsidiary to (unless the Majority Banks shall otherwise consent in writing):
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| SECTION 7. | NEGATIVE COVENANTS OF THE CAPITAL CORPORATION |
The Capital Corporation hereby agrees that, so long as there is any obligation by any Bank to make Loans to the Capital Corporation hereunder, any obligation of any Issuing Bank to issue Letters of Credit hereunder, any Loan of the Capital Corporation remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing by the Capital Corporation to any Bank, any Issuing Bank or any Agent hereunder, the Capital Corporation shall not, nor in the case of the agreements set forth in subsection 7.3 shall it permit any of its Subsidiaries to, directly or indirectly (unless the Majority Banks shall otherwise consent in writing):
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consolidation, Division, sale or conveyance, be in default in the performance of any such agreements, covenants or obligations; provided, however, that the Capital Corporation may merge or consolidate with, or sell or convey substantially all of its assets to, the Company, if (i) the Company is the successor corporation (as defined above) and (ii) subclause (b) above is complied with; provided further that no Division of Capital Corporation shall be permitted unless there is a Division Successor. Upon any such merger, consolidation, sale, Division or conveyance, the successor corporation shall succeed to and be substituted for, and may exercise every right and power of and shall be subject to all the obligations of, the Capital Corporation under this Agreement, with the same effect as if the successor corporation had been named as the Capital Corporation herein and therein.
| SECTION 8. | EVENTS OF DEFAULT |
Upon the occurrence and during the continuance of any of the following events:
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then, and in any such event, (A) if such event is an Event of Default specified in paragraph (f) above, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Loans shall immediately become due and payable, and (B)(1) if such event is an Event of Default specified in paragraph (a) or (e), then with the consent of the Majority Banks, the Administrative Agent may, or upon the request of the Majority Banks, the Administrative Agent shall, or (2) if such event is an Event of Default specified in paragraph (b), (c), (d), (g) or (h), then with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks, the Administrative Agent shall, take either or both of the following actions: (i) by notice to the Borrowers, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) by notice of default to the Borrowers, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrowers shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrowers hereunder. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrowers hereunder shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrowers (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived with respect to this Agreement by the Borrowers.
| SECTION 9. | THE AGENTS |
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(ii) Each Bank and each Issuing Bank hereby further agrees that if it receives a Payment from the Administrative Agent or any of its affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Bank and each Issuing Bank agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Bank or Issuing Bank, as applicable, shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter (or such later date as the Administrative Agent may, in its sole discretion, specify in writing), return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon (except to the extent waived in writing by the Administrative Agent) in respect of each day from and including the date such Payment (or portion thereof) was received by such Bank or Issuing Bank, as applicable, to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(iii) The Borrowers hereby agree that (x) in the event that the return of an erroneous Payment (or portion thereof) made with funds of the Administrative Agent or an affiliate thereof has been demanded by the Administrative Agent pursuant to this subsection 9.4(b) and has not been recovered from any Bank or Issuing Bank, as applicable, that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Bank or Issuing Bank, as applicable, with respect to such amount unless and until such amounts are recovered by the Administrative Agent and (y) an erroneous Payment made by the Administrative Agent or an affiliate thereof shall not pay, prepay, repay, discharge or otherwise satisfy any Loans, Reimbursement Obligations or L/C Obligations owed by the Borrowers.
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(iv) Each Bank’s and each Issuing Bank’s obligations under this subsection 9.4(b) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Bank or an Issuing Bank, the termination of the Commitments, the payment in full of all amounts payable hereunder and the termination of this Agreement.
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(d)Each of the Banks, each of the Issuing Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Borrower Communications on the Approved Borrower Portal in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.
(e)Nothing herein shall prejudice the right of any Borrower to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.
“Borrower Communications” means, collectively, any borrowing notice, conversion or continuation notice, notice of prepayment, notice requesting the issuance, amendment or extension of a Letter of Credit or other notice, demand, communication, information, document or other material provided by or on behalf of any Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed by any Borrower to the Administrative Agent through an Approved Borrower Portal.
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| SECTION 10. | MISCELLANEOUS |
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10.1Amendments and Waivers. Subject to subsection 2.11(b) and (c) and subsection 10.1(c) below, with the written consent of the Majority Banks, the Administrative Agent and the Borrowers may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Agreement or changing in any manner the rights of the Banks or of the Borrowers hereunder, and with the consent of the Majority Banks the Administrative Agent on behalf of the Banks may execute and deliver to the Borrowers a written instrument waiving, on such terms and conditions as the Administrative Agent may specify in such instrument, any of the requirements of this Agreement or any Default or Event of Default and its consequences; provided, however, that no such waiver, amendment, supplement or modification shall (a) extend the maturity of any Loan or Reimbursement Obligation, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or reduce the rate of any fee payable hereunder or extend the time of payment thereof, in each case, without the written consent of with respect to any such change to any Committed Rate Loan, each Bank directly affected thereby, or (b) change the amount of any Bank’s Commitment or the terms of its obligation to make Loans hereunder (other than in accordance with subsection 2.20), or amend, modify or waive the pro rata treatment and payment provisions of subsection 2.12(b), or amend, modify or waive any provision of this subsection 10.1 or reduce the percentage specified in the definition of Majority Banks or Required Banks, or consent to the assignment or transfer by either Borrower of any of its rights and obligations under this Agreement, in each case without the written consent of each Bank, or (c) amend, modify or waive any provision of Section 9 without the written consent of the then Administrative Agent and, if applicable, any other Agent affected by such amendment, modification or waiver, or (d) extend the Termination Date with respect to any Bank without the written consent of such Bank; provided, further, however, that no such waiver, amendment, supplement or modification shall waive, amend, supplement or otherwise modify subsections 2.16 without the written consent of the Required Banks, or (e) amend, modify or waive any provision of subsections 2.23 and 2.26 (and related defined terms), or any other provision which affects the rights or duties of an Issuing Bank under this Agreement, without the written consent of each Issuing Bank, or (f) so long as any Luxembourg Obligations remain outstanding or JD Luxembourg is a party to this Agreement, release Capital Corporation from its guarantee obligations under subsection 2.27 without the written consent of each Bank; and provided, further, that notwithstanding the foregoing, the Administrative Agent may act pursuant to subsection 2.11(b) to establish, in conjunction with the Borrowers, an alternate rate of interest. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Borrowers, the Banks and the Agents. In the case of any waiver, the Borrowers, the Banks and the Agents shall be restored to their former position and rights hereunder, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Anything contained in the foregoing to the contrary notwithstanding, the relevant Borrower and the relevant Bank with respect to a Negotiated Rate Loan may, from time to time, enter into amendments, supplements or modifications for the purpose of adding any provisions to such Negotiated Rate Loans or changing in any manner the rights of such Bank and such Borrower thereunder and such Bank may waive any of the requirements of such Negotiated Rate Loan; provided, however, that such Borrower and such Bank shall notify the Administrative Agent in writing of any extension of the maturity of such Negotiated Rate Loan or reduction of the principal amount thereof; provided, further, that such Borrower and such Bank shall not extend the maturity of such Negotiated Rate Loan beyond the last day of the Commitment Period.
84
The Borrowers:
The Company: |
Deere & Company |
The Capital Corporation: |
John Deere Capital Corporation |
JD Luxembourg: |
John Deere Bank S.A. L-1855 Luxembourg Grand Duchy of Luxembourg |
with a copy to: |
Deere & Company Telephone: 309-765-4488 |
The Administrative Agent: |
Provided separately by Administrative Agent |
To any other Bank: |
To it at its address (or facsimile number) set forth in its Administrative Questionnaire |
provided that any notice, request or demand to or upon the Administrative Agent or the Banks pursuant to subsections 2.1, 2.2, 2.5, 2.6, 2.9, 2.11, 2.20 and 9.9 shall not be effective until received (including receipt by telephone if permitted hereby).
Notices and other communications to any Borrower, the Banks and the Administrative Agent hereunder may be delivered or furnished by using Approved Borrower Portals (as applicable), in each case, pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 hereof unless otherwise agreed by the Administrative Agent and the applicable Bank. The Administrative Agent or any Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
85
86
87
88
89
90
91
92
10.8Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrowers and the Administrative Agent. Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to subsection 10.2), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Banks shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrowers without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Bank, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Borrowers hereby (i) agree that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Banks, and the Borrowers, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) the Administrative Agent and each of the Banks may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against any Indemnified Person for any Losses arising solely from the Administrative Agent’s and/or any Bank’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Losses arising as a result of the failure of a Borrower to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
93
(i)the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(ii)the effects of any Bail-In Action on any such liability, including, if applicable:
94
(x)a reduction in full or in part or cancellation of any such liability;
(y)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(z)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any Resolution Authority.
(b)Each party hereto agrees that it will notify the Company and the Administrative Agent, as soon as practicable, of such party becoming the subject of a Bail-In Action, unless such notification is prohibited by law, regulation or order.
(i) such Bank is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans (defined below) in connection with the Loans or the Commitments,
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to, and all of the conditions of which are and will continue to be satisfied in connection with, such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,
(iii) (A) such Bank is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Bank to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Bank, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Bank.
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(b)In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or (2) a Bank has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent and each lead arranger, and not, for the avoidance of doubt, to or for the benefit of the Borrowers, that the Administrative Agent is not a fiduciary with respect to the assets of such Bank involved in such Bank’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement or any documents related hereto or thereto).
As used in this Section, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code, to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
[Remainder of page left intentionally blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
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DEERE & COMPANY By:/s/ Jerry Steining |
|
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JOHN DEERE CAPITAL CORPORATION By:/s/ Jerry Steining |
|
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JOHN DEERE BANK S.A. By:/s/ Jerry Steining By:/s/ Nathalie Prevost |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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JPMORGAN CHASE BANK, N.A., By: /s/ Will Price |
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J.P. MORGAN SE, By: /s/ Suzanne Sambell |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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BANK OF AMERICA, N.A., as Co-Syndication Agent and as a Bank By: /s/ Kathryn DuFour |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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CITIBANK, N.A., as Co-Syndication Agent and as a Bank By: /s/ Susan Olsen Title: Vice President |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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BARCLAYS BANK PLC, as a Bank By: /s/ Charlene Saldanha Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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DEUTSCHE BANK AG NEW YORK BRANCH, as a Bank By: /s/ Annie Chung Title: Managing Director By: /s/ Marko Lukin Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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HSBC BANK USA, N.A., as a Bank By: /s/ Matthew McLaurin Title: Managing Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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MUFG Bank, Ltd., as a Bank By: /s/ George Stoecklein Title: Managing Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Royal Bank of Canada, as a Bank By: /s/ Mark Tarnecki Title: Authorized Signatory |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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The Toronto-Dominion Bank, New York Branch, as a Bank By: /s/ David Perlman Title: Authorized Signatory |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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BNP PARIBAS, as a Bank By: /s/ Anita Ogbara Title: Managing Director By: /s/ Norman Miller Title: Vice President |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Credit Agricole Corporate and Investment Bank, as a Bank By: /s/ Jill Wong Title: Director By: /s/ Gordon Yip Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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GOLDMAN SACHS BANK USA, as a Bank By: /s/ Jonathan Dworkin Title: Authorized Signatory |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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BANK OF CHINA LIMITED, CHICAGO BRANCH, as a Bank By: /s/ Libo Sun Title: SVP & Branch Manager |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Commerzbank AG, New York Branch, as a Bank By: /s/ Jack Deegan Title: Managing Director By: /s/ Robert Sullivan Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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ING Bank N.V., Dublin Branch as a Bank By: /s/ Sean Hassett Title: Director By: /s/ Rory Fitzgerald Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Lloyds Bank plc, as a Bank By: /s/ Amit Patel Title: Associate Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Sumitomo Mitsui Banking Corporation, as a Bank By: /s/ Jun Ashley Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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THE BANK OF NEW YORK MELLON, as a Bank By: /s/ Thomas J. Tarasovich, Jr. Title: Senior Vice President |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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THE BANK OF NOVA SCOTIA as a Bank By: /s/ Adnan Osman Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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TRUIST BANK, as a Bank By: /s/ William P. Rutkowski Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, as a Bank By: /s/ Brian Crowley Title: Managing Director By: /s/ Armen Semizian Title: Managing Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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BANCO SANTANDER, S.A., NEW YORK BRANCH, as a Bank By: /s/ Andres Barbosa Title: Managing Director By: /s/ Carolina Gutierrez Title: Executive Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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PNC Bank, National Association, as a Bank By: /s/ Michal Suchanek Title: Assistant Vice President |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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SOCIETE GENERALE, as a Bank By: /s/ Kimberly Metzger Title: Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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U.S. Bank National Association, as a Bank By: /s/ Doug Magalska Title: Vice President |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Agricultural Bank of China, New York Branch as a Bank By: /s/ Nelson Chou Title: Senior Vice President & Head of |
[Signature Page to the 2029 Deere & Company Credit Agreement]
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Nordea Bank Abp, New York Branch, as a Bank By: /s/ Ola Anderssen Title: Director By: /s/ Anders Holmgaard Title: Managing Director |
[Signature Page to the 2029 Deere & Company Credit Agreement]
Exhibit 10.4
Execution Version
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
JOHN DEERE BANK S.A.
________________________________________
$3,250,000,000
2031
CREDIT AGREEMENT
Dated as of March 23, 2026
________________________________________
JPMORGAN CHASE BANK, N.A. and J.P. MORGAN SE,
as Administrative Agent
BANK OF AMERICA, N.A.
and
CITIBANK, N.A.,
as Co-Syndication Agents
________________________________________
JPMORGAN CHASE BANK, N.A.,
BOFA SECURITIES, INC.
and
CITIGROUP GLOBAL MARKETS INC.,
as Lead Arrangers and Bookrunners
TABLE OF CONTENTS
Page
i
ii
SCHEDULES:
Schedule ITerms of Subordination
Schedule IICommitments
Schedule IIIExisting Letters of Credit
EXHIBITS:
Exhibit AForm of Borrowing Notice
Exhibit BForm of Assignment and Assumption
Exhibit CForm of Opinion of General Counsel to the Company
Exhibit DForm of Opinion of Special New York Counsel to the Borrowers
Exhibit EForm of Extension Request
Exhibit FForm of Form W-8BEN-E Tax Letter
Exhibit GForm of Form W-8ECI Tax Letter
Exhibit HForm of Replacement Bank Agreement
Exhibit IForm of Promissory Note
Exhibit JForm of New Bank Supplement
Exhibit KForm of Commitment Increase Supplement
Exhibit LForm of Certificate of Non-Bank Status
iii
2031 CREDIT AGREEMENT, dated as of March 23, 2026, among (a) DEERE & COMPANY, a Delaware corporation (the “Company”), (b) JOHN DEERE CAPITAL CORPORATION, a Delaware corporation (the “Capital Corporation”), (c) JOHN DEERE BANK S.A., a Luxembourg société anonyme (“JD Luxembourg”), (d) the several financial institutions parties hereto (collectively, the “Banks”, and individually, a “Bank”), (e) JPMORGAN CHASE BANK, N.A., as administrative agent hereunder (in such capacity, together with its successors, permitted assigns, designated branch offices or affiliates, including, without limitation, J.P. Morgan SE, collectively, the “Administrative Agent”) and (f) BANK OF AMERICA, N.A. and CITIBANK, N.A., as co-syndication agents hereunder (in such capacity, the “Co-Syndication Agents”).
The parties hereto hereby agree as follows:
| SECTION 1. | DEFINITIONS |
“364-Day Credit Agreement”: that certain $5,500,000,000 364-Day Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“2029 Credit Agreement”: that certain $3,250,000,000 2029 Credit Agreement, dated as of March 23, 2026, among the Company, the Capital Corporation, JD Luxembourg, the lenders parties thereto, JPMorgan Chase Bank, N.A. (and/or one or more of its affiliate(s), including, without limitation, J.P. Morgan SE), as Administrative Agent and Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (as may be amended, amended and restated or otherwise modified from to time).
“ABR”: at any particular date, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) 0.5% per annum above the NYFRB Rate and (c) the Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1% (provided that, for the avoidance of doubt, such Term SOFR Rate for any date shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology)). Any change in ABR due to a change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Term SOFR Rate, respectively. If the ABR is being used as an alternate rate of interest pursuant to subsection 2.11 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to subsection 2.11(b)), then the ABR shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.
“ABR Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon the ABR.
“Act”: as defined in subsection 10.12.
2
“Adjusted Daily Simple CORRA”: an interest rate per annum equal to (a) Daily Simple CORRA, plus (b) 0.29547%; provided that if Adjusted Daily Simple CORRA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Daily Simple SONIA”: an interest rate per annum equal to (a) Daily Simple SONIA, plus (b) 0.0326%; provided that if Adjusted Daily Simple SONIA as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjusted Term CORRA Rate”: for purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation, plus (b) 0.29547% for a one month interest period or 0.32138% for a three month interest period; provided that if Adjusted Term CORRA Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Administrative Agent”: as defined in the preamble hereto.
“Administrative Questionnaire”: an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Foreign Currency”: as defined in subsection 2.11(a).
“Agent”: the Administrative Agent or the Syndication Agent, as the context shall require; together, the “Agents”.
“Agreement”: this 2031 Credit Agreement as amended, supplemented or modified from time to time.
“Agreement Currency”: as defined in subsection 2.24(b).
“Ancillary Document”: as defined in subsection 10.8.
“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction applicable to the Borrowers and their Subsidiaries from time to time concerning or relating to bribery or corruption, including but not limited to the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) and the UK Bribery Act of 2010.
“Applicable Creditor”: as defined in subsection 2.24(b).
“Applicable Margin”: (a) with respect to ABR Loans, the rate per annum set forth below for ABR Loans in the column corresponding to the Prevailing Rating of the Company, (b) with respect to Eurocurrency Loans, the rate per annum set forth below for Eurocurrency Loans in the column corresponding to the Prevailing Rating of the Company, (c) with respect to Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans, the rate per annum set forth below for Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans in the column corresponding to the Prevailing Rating of the Company and (d) with respect to SONIA Loans, the rate per annum set forth below for SONIA Loans in the column corresponding to the Prevailing Rating of the Company:
3
|
Level I |
Level II |
Level III |
Level IV |
Level V |
ABR Loans |
0.00% |
0.00% |
0.00% |
0.00% |
0.25% |
Eurocurrency Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Term Benchmark Loans, Daily Simple CORRA Loans and Daily Simple SOFR Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
SONIA Loans |
0.625% |
0.75% |
0.875% |
1.00% |
1.25% |
Each change in the Prevailing Rating resulting from a publicly announced change in the Credit Ratings shall be effective during the period commencing on the date that is 3 Business Days after the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change; provided that in no event shall the Applicable Margin be less than zero.
“Application”: an application in such form from time to time in use by the applicable Issuing Bank, requesting an Issuing Bank to issue a Letter of Credit.
“Approved Borrower Portal”: has the meaning assigned to it in subsection 9.12.
“Attributable Debt”: as defined in subsection 6.2(b)(ii).
“Australian Dollars”: the lawful currency of Australia.
“Available Commitment”: as to any Bank at any time, an amount equal to the excess, if any, of (a) such Bank’s Commitment then in effect over (b) such Bank’s Committed Rate Loans then outstanding.
“Available Tenor”: as of any date of determination and with respect to the then-current Benchmark in respect of Loans denominated in such Currency, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period with respect to Loans denominated in the applicable Currency pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (e) of subsection 2.11.
“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank” and “Banks”: as defined in the preamble hereto.
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“Benchmark”: initially, with respect to any (i) SONIA Loan, Adjusted Daily Simple SONIA, (ii) Daily Simple CORRA Loan, Adjusted Daily Simple CORRA, (iii) Daily Simple SOFR Loan, Daily Simple SOFR or (iv) Term Benchmark Loan or Eurocurrency Loan, the Relevant Rate for such Currency; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the applicable Relevant Rate or the then-current Benchmark with respect to Loans denominated in such Currency, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of subsection 2.11.
“Benchmark Replacement”: for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that in the case of any Loan denominated in a Foreign Currency (other than any Loan denominated in Canadian Dollars), “Benchmark Replacement” shall mean the alternative set forth in (2) below:
(1)in the case of any Loan denominated in Dollars, the Daily Simple SOFR and/or in the case of any Loan denominated Canadian Dollars, the Adjusted Daily Simple CORRA;
(2)the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor with respect to Loans denominated in such Currency giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in the applicable Currency at such time and (b) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment”: with respect to any replacement of the then-current Benchmark with respect to Loans denominated in any Currency with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency at such time.
“Benchmark Replacement Conforming Changes”: with respect to any Benchmark Replacement in respect of Loans denominated in any Currency, any technical, administrative or operational changes (including changes to the definition of “ABR,” the definition of “Business Day,” the definition of “SONIA Business Day,” the definition of “U.S.
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Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion (in consultation with the Company) may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent reasonably determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent determines (in consultation with the Company) is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents); provided that, notwithstanding anything herein to the contrary, no “Benchmark Replacement Conforming Changes” shall result in any material effect on the timing or amount of payments or borrowings without the consent of the Company.
“Benchmark Replacement Date”: with respect to the Benchmark for any Loan denominated in any Currency, the earliest to occur of the following events with respect to such then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event”: with respect to the Benchmark for any Loan denominated in any Currency, the occurrence of one or more of the following events with respect to such then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
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(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, the CORRA Administrator, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period”: with respect to the Benchmark for any Loan denominated in any Currency, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with subsection 2.11.
“Beneficial Ownership Certification”: a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.
“benefitted Bank”: as defined in subsection 10.6.
“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Borrower”: the Company, the Capital Corporation or JD Luxembourg; collectively, the “Borrowers”.
“Borrowing Date”: in respect of any Loan, the date such Loan is made, and in respect of any Letter of Credit, the date such Letter of Credit is issued.
“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City or Chicago are authorized or required by law to close; provided, that (a) when used in connection with a Foreign Currency Loan, (in each case, other than in connection with any calculation or determination of interest rate in respect of a SONIA Loan or a Loan denominated in Euros), the term “Business Day” shall also exclude any day on which banks are authorized or required by law to be closed in the principal financial center for that currency, including without limitation, Toronto in respect of Loans denominated in Canadian Dollars, (b) in relation to any calculation or determination of interest rate in respect of a SONIA Loan, “Business Day” shall mean a SONIA Business Day, (c) in relation to any calculation or determination of interest rate in respect of any Loan denominated in Euros and in relation to the calculation or computation of the Eurocurrency Rate in respect thereof, “Business Day” shall mean any day which is a TARGET Day and (d) in relation to any calculation or determination of interest rate in respect of any Daily Simple SOFR Loan, “Business Day” shall mean any day which is a U.S. Government Securities Business Day.
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“Calculation Date”: with respect to each Foreign Currency, the last day of each calendar quarter (or, if such day is not a Business Day, the next succeeding Business Day) and such other days from time to time as the Administrative Agent shall reasonably designate as a “Calculation Date”; provided, that the second Business Day preceding each Borrowing Date with respect to, and preceding each date of any borrowing, conversion or continuation of, any Foreign Currency Loan shall also be a “Calculation Date” with respect to the relevant Foreign Currency; provided further that with respect to any SONIA Loan, Daily Simple SOFR Loan or Daily Simple CORRA Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month) shall also be a “Calculation Date”.
“Calendar Quarter”: a three-month period consisting of (i) each January, February and March, (ii) each April, May and June, (iii) each July, August and September or (iv) each October, November and December.
“Canadian Dollars”: the lawful currency of Canada.
“Cancelled Bank”: (i) any Bank that has the whole or any part of its Commitment cancelled under subsection 2.13(a), (b) or (c), subsection 2.16(c) or subsection 2.17(b) or the Commitment of which has expired under subsection 2.16(a) and (ii) any Defaulting Bank that the Company designates in writing to such Bank and the Administrative Agent as a Cancelled Bank.
“Capital Corporation”: as defined in the preamble hereto.
“CBR Loan”: a Loan that bears interest at a rate determined by reference to the Central Bank Rate.
“CBR Spread”: the Applicable Margin, applicable to such Loan that is replaced by a CBR Loan.
“Central Bank Rate”: a rate equal to the greater of (i) (A) for any Loan denominated in (a) Pounds Sterling, the Bank of England (or any successor thereto)’s “Bank Rate” as published by the Bank of England (or any successor thereto) from time to time, (b) Euros, one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers): (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time, and (c) subject to subsection 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars, any other Foreign Currency, a central bank rate as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers), plus (B) the applicable Central Bank Rate Adjustment and (ii) the Floor.
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“Central Bank Rate Adjustment”: for any day, for any Loan denominated in (a) Euros, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Eurocurrency Rate for Loans denominated in Euros for the five most recent Business Days preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest Eurocurrency Rate applicable during such period of five Business Days) minus (ii) the Central Bank Rate in respect of Euros in effect on the last Business Day in such period, (b) Pounds Sterling, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of Adjusted Daily Simple SONIA for Loans in Pounds Sterling for the five most recent SONIA Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest such Adjusted Daily Simple SONIA applicable during such period of five SONIA Business Days) minus (ii) the Central Bank Rate in respect of Pounds Sterling in effect on the last SONIA Business Day in such period, and (c) subject to Section 2.11 in respect of Term Benchmark Loans denominated in Canadian Dollars any other Foreign Currency, a Central Bank Rate Adjustment as determined by the Administrative Agent in its reasonable discretion (provided, that the Administrative Agent shall have generally selected such rate for similarly situated borrowers). For purposes of this definition, (x) the term Central Bank Rate shall be determined disregarding clause (B) of the definition of such term and (y) the Eurocurrency Rate in respect of Loans denominated in Euros on any day shall be based on the EURIBOR Screen Rate on such day at approximately the time referred to in the definition of such term for deposits in Euros for a maturity of one month.
“Certificate of Non-Bank Status”: a certificate substantially in the form and substance of Exhibit L.
“Closing Date”: the date on which each of the conditions precedent specified in subsection 4.1 shall have been satisfied (or compliance therewith shall have been waived by the Majority Banks hereunder).
“CME Term SOFR Administrator”: CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
“Co-Syndication Agents”: as defined in the preamble hereto.
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Commitment”: as to any Bank, the amount set opposite such Bank’s name on Schedule II or in any assignment pursuant to which such Bank becomes a party hereto with respect to any interest purchased therein, as such amount may be modified as provided herein; collectively, as to all Banks, the “Commitments”.
“Commitment Expiration Date”: as defined in subsection 2.16(a).
“Commitment Fee Rate”: the rate per annum set forth below in the column corresponding to the Prevailing Rating of the Company:
Level I Rating |
Level II Rating |
Level III Rating |
Level IV Rating |
Level V Rating |
0.040% |
0.050% |
0.060% |
0.080% |
0.100% |
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“Commitment Increase Cap”: at any time, an amount equal to (i) $2,000,000,000, minus (ii) the sum of (A) the aggregate increase in Commitments incurred by any Borrower in reliance on subsection 2.20, (B) the aggregate increase in Commitments (as defined in the 364-Day Credit Agreement), if any, under the 364-Day Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 364-Day Credit Agreement) and (C) the aggregate increase in Commitments (as defined in the 2029 Credit Agreement), if any, under the 2029 Credit Agreement after the Closing Date (pursuant to Section 2.20 of the 2029 Credit Agreement).
“Commitment Increase Notice”: as defined in subsection 2.20(a).
“Commitment Increase Supplement”: as defined in subsection 2.20(c).
“Commitment Percentage”: as to any Bank at any time, the percentage which such Bank’s Commitment at such time constitutes of all the Commitments at such time or, at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Bank’s Extensions of Credit then outstanding constitutes of the aggregate principal amount of the Total Extensions of Credit then outstanding; collectively, as to all the Banks, the “Commitment Percentages”; provided that when a Defaulting Bank shall exist, “Commitment Percentage” shall mean, when appropriate as determined by the Administrative Agent in order to provide ratable treatment at any time a Defaulting Bank exists (and without increasing the Commitment of any Bank), the percentage of the total Commitments (disregarding any Defaulting Bank’s Commitment) represented by such Bank’s Commitment.
“Commitment Period”: as to any Bank at any time, the period from and including the Closing Date to but not including the Termination Date of such Bank or such earlier date on which the Commitments shall terminate as provided herein.
“Committed Extensions of Credit”: as to any Bank at any time, the amount equal to the sum of the Dollar Equivalent of (a) the aggregate principal amount of all Committed Rate Loans held by such Bank then outstanding and (b) such Bank’s Commitment Percentage multiplied by the L/C Obligations then outstanding.
“Committed Rate Loans”: each loan made pursuant to subsection 2.1.
“Commonly Controlled Entity”: in relation to a Borrower, an entity, whether or not incorporated, which is under common control with such Borrower within the meaning of Section 414(b) or (c) of the Code.
“Company”: as defined in the preamble hereto.
“Consolidated Capital Base”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, the sum of (a) the amount shown opposite the item “Total Stockholders’ Equity” on the consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries plus (b) all indebtedness of the Capital Corporation and its consolidated Subsidiaries for borrowed money subordinated (on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I) to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the sum of clauses (a) and (b) hereof as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that the sum of the amounts referred to in clauses (a) and (b) is determined in accordance with GAAP.
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Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, adjustments resulting from any accumulated other comprehensive income as reflected on the most recent publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of any fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be deemed not to be included in Consolidated Capital Base.
“Consolidated Net Worth”: as defined in subsection 6.2(b)(ii).
“Consolidated Senior Debt”: at a particular time for the Capital Corporation and its consolidated Subsidiaries, indebtedness for borrowed money other than any indebtedness for borrowed money that is subordinated, on terms no less favorable to the Administrative Agent and the Banks than the terms of subordination set forth on Schedule I, to the indebtedness which may be incurred hereunder by the Capital Corporation, provided that the amount of such indebtedness for borrowed money (other than such subordinated indebtedness) as at the end of a fiscal quarter of the Capital Corporation and its consolidated Subsidiaries (including the last quarter of a fiscal year of the Capital Corporation and its consolidated Subsidiaries) shall be determined by reference to the publicly available consolidated balance sheet of the Capital Corporation and its consolidated Subsidiaries as at the end of such fiscal quarter and after such adjustments, if any, as may be required so that such amount is determined in accordance with GAAP. Notwithstanding the foregoing, for purposes of determining compliance with subsection 7.2, indebtedness for borrowed money in respect of any Securitization Indebtedness shall be deemed not included in Consolidated Senior Debt.
“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.
“CORRA”: the Canadian Overnight Repo Rate Average administered and published by the CORRA Administrator.
“CORRA Administrator”: the Bank of Canada (or any successor administrator).
“CORRA Determination Date”: as defined in the definition of Daily Simple CORRA.
“CORRA Rate Day”: as defined in the definition of Daily Simple CORRA.
“Corresponding Tenor”: with respect to any Available Tenor, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Credit Rating”: as of any date, (a) as to any Person, the rating assigned to the relevant long term senior unsecured (and non-credit enhanced) Debt obligations of such Person by Moody’s, S&P or Fitch, in each case as of the close of business on such date and (b) if no rating for such Debt described in clause (a) is available, the corporate credit rating of such Person as announced by Moody’s, S&P or Fitch, in each case as of the close of business on such date.
“Currency”: any Dollars and any Foreign Currency.
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“Daily Simple CORRA”: for any day (a “CORRA Rate Day”), a rate per annum equal to CORRA for the day (such day “CORRA Determination Date”) that is five (5) Business Days prior to (i) if such CORRA Rate Day is a Business Day, such CORRA Rate Day or (ii) if such CORRA Rate Day is not an Business Day, the Business Day immediately preceding such CORRA Rate Day, in each case, as such CORRA is published by the CORRA Administrator on the CORRA Administrator’s website. Any change in Daily Simple CORRA due to a change in CORRA shall be effective from and including the effective date of such change in CORRA without notice to the Borrower. If by 5:00 p.m. (Toronto time) on any given CORRA Determination Date, CORRA in respect of such CORRA Determination Date has not been published on the CORRA Administrator’s website and a Benchmark Replacement Date with respect to the Daily Simple CORRA has not occurred, then CORRA for such CORRA Determination Date will be CORRA as published in respect of the first preceding Business Day for which such CORRA was published on the CORRA Administrator’s website, so long as such first preceding Business Day is not more than five (5) Business Days prior to such CORRA Determination Day.
“Daily Simple CORRA Loan”: a Loan that bears interest at a rate based on the Adjusted Daily Simple CORRA.
“Daily Simple SOFR”: for any day (a “SOFR Rate Day”), a rate per annum equal to (a) SOFR for the day (such day “SOFR Determination Date”) that is five U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website or (b) if SOFR is not available for the SOFR Determination Date determined pursuant to clause (a) above, by 5:00 p.m., New York City time, on any day of determination of Daily Simple SOFR, then Daily Simple SOFR for such day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day prior to the SOFR Determination Date for which SOFR was published on the SOFR Administrator’s Website; provided that Daily Simple SOFR determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three consecutive SOFR Rate Days and thereafter subsection 2.11(a) shall govern; provided, further, that if Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
“Daily Simple SOFR Loan”: a Loan that bears interest at a rate based on the Daily Simple SOFR.
“Daily Simple SONIA”: for any day (a “SONIA Interest Day”), an interest rate per annum equal to (a) SONIA for the day that is five SONIA Business Days (such fifth SONIA Business Day determined pursuant to each of subclauses (i) and (ii), the “SONIA Lookback Day”) prior to (i) if such SONIA Interest Day is a SONIA Business Day, such SONIA Interest Day or (ii) if such SONIA Interest Day is not a SONIA Business Day, the SONIA Business Day immediately preceding such SONIA Interest Day or (b) if SONIA is not available for the SONIA Lookback Day determined pursuant to clause (a) above, by 5:00 p.m., London time on any day of determination of Daily Simple SONIA, then Daily Simple SONIA for such day will be SONIA as published in respect of the first preceding SONIA Business Day prior to the SONIA Lookback Day for which SONIA was published on the SONIA Administrator’s Website; provided that Daily Simple SONIA determined pursuant to this clause (b) shall be utilized for purposes of calculation of Daily Simple SONIA for no more than three consecutive SONIA Interest Days and thereafter subsection 2.11(a) shall govern. Any change in Daily Simple SONIA due to a change in SONIA shall be effective from and including the effective date of such change in SONIA without notice to the Borrower.
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“Deal Year”: as defined in subsection 2.16(c).
“Debt”: as defined in subsection 6.2.
“Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Defaulting Bank”: any Bank that has (a) failed to fund any portion of its Loans or participations in Letters of Credit within two Business Days of the date required to be funded by it hereunder, unless such Bank has notified the Administrative Agent and the Borrower that such failure is the result of such Bank’s good faith determination that one or more conditions precedent to funding has not been satisfied; (b) notified the Company, the Administrative Agent, any Issuing Bank or any Bank in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit; (c) failed, within three Business Days after written request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit; provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower; (d) otherwise failed to pay over to the Administrative Agent or any other Bank any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute; or (e) (i) become or is insolvent or has a parent company that has become or is insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or (iii) become or has a parent company that has become the subject of a Bail-In Action; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank. If any Bank shall become a Defaulting Bank, the Company shall have the right, so long as no Event of Default has occurred and is then continuing, upon giving written notice to the Administrative Agent and such Bank in accordance with subsection 2.6, notwithstanding subsection 2.12(b), to prepay in full the Loans of such Bank, together with accrued interest thereon, any amounts payable to such Bank pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid commitment fee or other amount payable to such Bank hereunder and/or, upon giving not less than three Business Days’ notice to such Bank and the Administrative Agent, to cancel the whole or part of the Commitment of any such Bank. Upon any such cancellation of the Commitment of a Defaulting Bank, participating interests in Letters of Credit shall be reallocated ratably among the remaining Banks in accordance with subsection 2.23(d).
“Designated Person”: a Person
(i)listed in the annex to, or otherwise the subject of the provisions of, any Executive Order;
(ii)named as a “Specially Designated National and Blocked Person” on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list (each, an “SDN”), or is otherwise the subject or target of any Sanctions Laws and Regulations, including the Crimea, so-called Donetsk People’s Republic, so-called Luhansk People’s Republic, and the non-government controlled areas of the Kherson and Zaporizhzhia regions of Ukraine, Cuba, Iran, North Korea and Syria; or
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(iii)in which an SDN has a controlling interest of 50% or greater ownership interest.
“Dividing Person”: as defined in the definition of Division.
“Division”: the statutory division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement) pursuant to Section 18-217 of the Delaware Limited Liability Company Act, which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor”: any person that, upon the consummation of a Division of a Dividing Person, holds all or substantially all of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division.
“Dollar Equivalent”: at any time as to any amount denominated in a Foreign Currency, the equivalent amount in Dollars as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of Dollars with such Foreign Currency on (a) in the case of a determination made pursuant to subsection 2.11(g), the date of such conversion and (b) in the case of any other determination, the most recent Calculation Date for such Foreign Currency.
“Dollar Loan”: any Committed Rate Loan denominated in Dollars.
“Dollars” and “$”: dollars in lawful currency of the United States of America.
“Domestic Bank”: any Bank organized under the laws of the United States of America, any State thereof or the District of Columbia.
“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Signature”: an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“EMU”: the Economic and Monetary Union as contemplated in the Treaty.
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“Engaged Acres”: the number of unique acres with at least one operation pass documented in the Company’s proprietary online farm management system in the 12 months prior to the end of the fiscal year.
“Equipment Operations”: those business segments of the Company and its consolidated Subsidiaries that are primarily engaged in the manufacture and distribution of equipment, parts and related attachments.
“Equipment Operations Debt”: at a particular time, the sum of short-term and long-term indebtedness for borrowed money that is or would be shown on a balance sheet of Equipment Operations (with Financial Services reflected only on an equity basis), which balance sheet was or would be prepared on the basis of the most recent publicly available consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter of the Company and its consolidated Subsidiaries (including the last quarter of any fiscal year of the Company and its consolidated Subsidiaries).
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Euro”: the single currency of Participating Member States of the EMU introduced in accordance with the provisions of Article 123 of the Treaty and, in respect of all payments to be made under this Agreement in Euro, means immediately available, freely transferable funds in such currency.
“EURIBOR Screen Rate”: as defined in the definition of Eurocurrency Rate.
“Eurocurrency Loans”: Committed Rate Loans at such time as they are made and/or being maintained at a rate of interest based upon a Eurocurrency Rate.
“Eurocurrency Rate”: (a) with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Australian Dollars, the rate per annum equal to the average bid reference rate as administered by the Australian Financial Markets Association (or any other Person that takes over the administration of that rate) for Australian Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BBSY of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BBSY Screen Rate”) at approximately 11:00 A.M., Local Time, two Business Days prior to the beginning of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BBSY Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
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(b)with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in New Zealand Dollars, the rate per annum equal to the average bid reference rate as administered by the New Zealand Financial Markets Association (or any other Person that takes over the administration of that rate) for New Zealand Dollar bills of exchange with a tenor equal in length to such Interest Period (or as close to such Interest Period as possible), displayed on page BKBM of the Reuters Screen (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “BKBM Screen Rate”) at approximately 11:00 A.M., Local Time, on the first day of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent); provided, that, if the BKBM Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
(c)with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Euros, the rate per annum equal to the interbank offered rate administered by the European Money Markets Institute (or any other Person that takes over the administration of such rate) for a tenor equal in length to such Interest Period as displayed on page on Reuters Page EURIBOR01 (or, in the event such rate does not appear on such Reuters page, on any successor or substitute page on such screen or service that displays such rate, or other appropriate page of such other information service that publishes such rate as shall be selected from time to time by the Administrative Agent in consultation with the Borrowers; in each case, the “EURIBOR Screen Rate”) at approximately 11:00 a.m., Local Time, two Business Days prior to the beginning of such Interest Period; provided, that, if the EURIBOR Screen Rate shall not be available at such time for such Interest Period, the Administrative Agent may substitute such rate with an alternative published interest rate reasonably acceptable to the applicable Borrower (or other rate basis agreed by the applicable Borrower and the Administrative Agent).
Notwithstanding the above, in no event shall the Eurocurrency Rate be less than the Floor.
“Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.
“Exchange Rate”: on any day, the rate at which the starting Currency may be exchanged into the other relevant Currency, as set forth at approximately 10:00 A.M., Local Time, on such date on the Reuters World Spots page for such starting Currency. In the event that such rate does not appear on any Reuters World Spots page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates reasonably selected by the Administrative Agent.
“Existing Credit Agreement”: as defined in subsection 4.1(e).
“Existing Letters of Credit”: the letters of credit issued under the Existing Credit Agreement and outstanding on the Closing Date and set forth on Schedule III.
“Exposure”: (a) with respect to an Objecting Bank at any time, the aggregate amount of such Bank’s Extensions of Credit then outstanding and (b) with respect to any other Bank at any time, the Commitment of such Bank then in effect or, if the Commitments have been terminated, the amount of such Bank’s Extensions of Credit then outstanding.
“Extension Request”: each request by the Borrowers made pursuant to subsection 2.16 for the Banks to extend this Agreement, which shall contain the information in respect of such extension specified in Exhibit E and shall be delivered to the Administrative Agent in writing.
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“Extensions of Credit”: as to any Bank at any time, the amount equal to the sum of the Dollar Equivalent of (a) the aggregate principal amount of all Loans held by such Bank then outstanding and (b) such Bank’s Commitment Percentage multiplied by the L/C Obligations then outstanding.
“FATCA”: Sections 1471 through 1474 of the Code (and any comparable successor provisions), any effective regulations published thereunder or official interpretations thereof issued by any Governmental Authority charged with the administration thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreements with respect thereto, and any treaty, law, regulations, or other official guidance enacted in any other jurisdiction relating to such intergovernmental agreement.
“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“Federal Reserve Board”: the Board of Governors of the Federal Reserve System of the United States of America.
“Financial Services”: the businesses of the Company (including the credit businesses) that are not primarily engaged in Equipment Operations.
“Fitch”: Fitch Ratings Inc.
“Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, all of the Capital Corporation’s and its consolidated Subsidiaries’ consolidated interest on indebtedness for borrowed money, amortization of discounts of indebtedness for borrowed money, the portion of rentals under financing leases deemed to represent interest and rentals under operating leases; provided, that, notwithstanding the foregoing, (i) consolidated interest on Securitization Indebtedness and amortization of Securitization Indebtedness shall be deemed not included in Fixed Charges and (ii) any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk shall be deemed not included in Fixed Charges; provided, further, that such amounts (but not any amounts constituting consolidated interest on, or amortization of, Securitization Indebtedness) of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available consolidated statements of income of the Capital Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such amounts are determined in accordance with GAAP.
“Floor” the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA, Adjusted Daily Simple CORRA Rate or the Central Bank Rate, as applicable. For the avoidance of doubt, the initial Floor for each of the Central Bank Rate, Eurocurrency Rate, Adjusted Term CORRA Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted Daily Simple SONIA and Adjusted Daily Simple CORRA shall be 0.0%.
“Foreign Bank”: any Bank that is not a Domestic Bank.
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“Foreign Currency”: (a) Euros, Pounds Sterling, Australian Dollars and Canadian Dollars, (b) upon (i) confirmation by Deutsche Bank AG, New York Branch to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars and (ii) confirmation by Sumitomo Mitsui Banking Corporation to the Administrative Agent that it (or a branch or affiliate thereof) can fund in New Zealand Dollars (provided, that, such confirmation from either Deutsche Bank AG, New York Branch or Sumitomo Mitsui Banking Corporation shall not be required if such Bank ceases to be a Bank hereunder), New Zealand Dollars and (c) as agreed by the Administrative Agent, any other Currency which is freely traded and convertible into Dollars in the London interbank market and for which the Dollar Equivalent thereof can be calculated from time to time.
“Foreign Currency Equivalent”: at the time of determination or conversion thereof, as applicable, as to any amount denominated or expressed in Dollars, the equivalent amount in the applicable Foreign Currency as reasonably determined by the Administrative Agent at such time on the basis of the Exchange Rate for the purchase of such Foreign Currency with Dollars on such date.
“Foreign Currency Loan”: each Loan denominated in a Foreign Currency.
“GAAP”: generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of the fiscal year ended November 2, 2025, except with respect to capital lease obligations, in which case the generally accepted accounting principles in the United States of America as applied in the preparation of financial statements of the Company or the Capital Corporation, respectively, as of January 1, 2015 shall apply.
“Governmental Authority”: any nation or government, any state or local or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Hedging Transaction”: any swap transaction, interest rate protection agreement (including any interest rate swap, interest “cap” or “collar” or any other interest rate hedging device entered into by the Capital Corporation or one or more of its Subsidiaries), option agreement, short or long position in equity or debt instruments, commodities, futures and forward transactions, outperformance agreement or other similar transaction, agreement or arrangement entered into by the Capital Corporation or one or more of its Subsidiaries.
“IBA”: has the meaning assigned to such term in subsection 1.4.
“Important Property”: (a) any manufacturing plant, including land, all buildings and other improvements thereon, and all manufacturing machinery and equipment located therein, owned and used by the Company or a Restricted Subsidiary primarily for the manufacture of products to be sold by the Company or such Restricted Subsidiary, (b) the executive office and administrative building of the Company in Moline, Illinois, and (c) research and development facilities, including land and buildings and other improvements thereon and research and development machinery and equipment located therein, in each case, owned and used by the Company or a Restricted Subsidiary; except in any case property of which the aggregate fair value as determined by the Board of Directors of the Company does not at the time exceed 1% of Consolidated Net Worth.
“Increasing Bank”: as defined in subsection 2.20(c).
“Indemnified Person”: as defined in subsection 10.4(b).
“Indemnified Taxes”: as defined in subsection 2.17(a).
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“Index Debt”: any senior, unsecured, non-credit enhanced long-term debt issued by the Company.
“Interest Payment Date”: (a) as to any ABR Loan, the last Business Day of each March, June, September and December, commencing on the first of such days to occur after such ABR Loan is made or a Eurocurrency Loan or Term Benchmark Loan is converted to an ABR Loan, (b) as to any Eurocurrency Loan or Term Benchmark Loan, the last day of each Interest Period applicable thereto, provided that as to any Eurocurrency Loan or Term Benchmark Loan in respect of which a Borrower has selected an Interest Period of greater than three months, interest shall also be paid on the day which is three months after the beginning of such Interest Period, (c) as to any SONIA Loan, Daily Simple CORRA Loan or Daily Simple SOFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing Date of such Loan (or if there is no numerically corresponding day in such later month, then the last day of such month) and (d) the Termination Date.
“Interest Period”: (a) with respect to any Eurocurrency Loan or Term Benchmark Loan, the period commencing on the Borrowing Date, the date any ABR Loan is converted to a Eurocurrency Loan or Term Benchmark Loan, as applicable or the date any Eurocurrency Loan or Term Benchmark Loan, as applicable is continued as a Eurocurrency Loan or Term Benchmark, as applicable, as the case may be, with respect to such Eurocurrency Loan or Term Benchmark Loan, as applicable and ending one, three or six months thereafter in the case of any Eurocurrency Loan or Term Benchmark Loan denominated in any Currency other than Canadian Dollars (or, with the consent of all relevant Banks, twelve months thereafter, or a period of less than one month thereafter if all relevant Banks consent to such period) (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment), or one or three months thereafter in the case of any Term Benchmark Loan denominated in Canadian Dollars, as selected by a Borrower in its notice of borrowing, conversion or continuance as provided in subsection 2.1(c) or 2.9; and
(b)with respect to any Negotiated Rate Loan, the period or periods commencing on the Borrowing Date with respect to such Negotiated Rate Loan or the last day of any Interest Period with respect thereto and ending on the dates as shall be mutually agreed upon between the relevant Borrower and the relevant Bank;
provided, that all of the foregoing provisions relating to Interest Periods are subject to the following:
(i)if any Interest Period pertaining to a Eurocurrency Loan would otherwise end on a day which is not a Working Day, that Interest Period shall be extended to the next succeeding Working Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Working Day;
(ii)if any Interest Period pertaining to a Negotiated Rate Loan or a Term Benchmark Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day;
(iii)any Interest Period pertaining to a Eurocurrency Loan or Term Benchmark Loan having an Interest Period of one, three or six months, that begins on the last Working Day (or, in the case of Term Benchmark Loans, the last Business Day) of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Working Day or Business Day, as applicable of a calendar month; (iv)Interest Periods shall be deemed available only if the Required Banks shall not have advised the Administrative Agent that the Eurocurrency Rate, Adjusted Term CORRA Rate, or the Term SOFR Rate, as applicable determined by the Administrative Agent on the basis of the applicable quotes will not adequately and fairly reflect the cost to such Banks of maintaining or funding their Committed Rate Loans bearing interest based on the Eurocurrency Rate, Adjusted Term CORRA Rate, or the Term SOFR Rate, as applicable determined for such Interest Period.
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The Administrative Agent shall notify the Borrowers and each Bank promptly after having been advised by the Required Banks that a Eurocurrency Rate, Adjusted Term CORRA Rate, or the Term SOFR Rate, as applicable will not so adequately and fairly reflect such Banks’ costs as aforesaid. If a requested Interest Period shall be unavailable in accordance with the foregoing sentence, the proposed Borrower may (A) in accordance with the provisions (including any requirements for notification) of subsection 2.1 request, at its option, that the requested Committed Rate Loans denominated in Dollars be made or maintained as ABR Loans or (B) withdraw the request for such Committed Rate Loans for which the Interest Period was unavailable by giving notice of such election to the Administrative Agent in accordance with subsection 2.11; provided, that if the Administrative Agent does not receive any notice hereunder with respect to requested Committed Rate Loans denominated in Dollars, such Borrower shall be deemed to have requested ABR Loans;
(v)with respect to Loans made by an Objecting Bank, no Interest Periods with respect to such Loans shall end after such Objecting Bank’s Commitment Expiration Date; and
(vi)no Interest Period shall end after the Termination Date.
“IRS”: as defined in subsection 2.17(c).
“ISDA Definitions”: the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP”: with respect to any standby Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).
“Issuing Bank”: (i) JPMorgan Chase Bank, N.A., in its capacity as issuer of any Letter of Credit, (ii) Bank of America, N.A., in its capacity as issuer of any Letter of Credit, (iii) Citibank, N.A., in its capacity as issuer of any Letter of Credit, or (iv) any other Bank that a Borrower may select from time to time that is willing to act as issuer of Letters of Credit, in its capacity as issuer of any Letter of Credit.
“Issuing Bank L/C Commitment”: (i) with respect to JPMorgan Chase Bank, N.A., $66,666,668; (ii) with respect to Bank of America, N.A., $66,666,666; (iii) with respect to Citibank, N.A., $66,666,666; and (iv) with respect to any other Issuing Bank, the amount agreed by the Company and such Issuing Bank. If the amount of the L/C Commitment is reduced, the Issuing Bank L/C Commitment of each Issuing Bank shall be ratably reduced simultaneously (based on the percentage by which the L/C Commitment is reduced).
“JD Luxembourg”: as defined in the preamble hereto.
“JPMorgan Chase Bank, N.A.”: JPMorgan Chase Bank, N.A., a national association.
“Judgment Currency”: as defined in subsection 2.24.
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“L/C Commitment”: $200,000,000.
“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to subsection 2.26(e). For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“L/C Participants”: the collective reference to all the Banks (other than, with respect to any Letter of Credit, the applicable Issuing Bank in its capacity as Issuing Bank) or any of them.
“Letter of Credit Fee”: the rate per annum equal to the Applicable Margin for Eurocurrency Loans set forth in the term “Applicable Margin” corresponding to the Prevailing Rating of the Company as of such date of determination on the face amount of each Letter of Credit.
“Letters of Credit”: as defined in subsection 2.26(a).
“Level”: Level I Rating, Level II Rating, Level III Rating, Level IV Rating or Level V Rating, as the context shall require.
“Level I Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is Aa3 or higher by Moody’s, AA- or higher by S&P and AA- or higher by Fitch.
“Level II Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A1 by Moody’s, A+ by S&P and A+ by Fitch.
“Level III Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A2 by Moody’s, A by S&P and A by Fitch.
“Level IV Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is A3 by Moody’s, A- by S&P and A- by Fitch.
“Level V Rating”: as of any date, such Level shall apply if the Company’s assigned Credit Rating as of such date is below A3 by Moody’s, below A- by S&P and below A- by Fitch.
“Loan Account”: as defined in subsection 2.3; collectively, the “Loan Accounts”.
“Loan Assignees”: as defined in subsection 10.5(c).
“Loan Assignment”: an Assignment and Assumption, substantially in the form of Exhibit B.
“Loan Documents”: this Agreement, including schedules and exhibits hereto, and the Notes.
“Loans”: the collective reference to the Committed Rate Loans and the Negotiated Rate Loans.
“Local Time”: (a) in the case of Foreign Currency Loans denominated in Canadian Dollars, Toronto, Ontario time, (b) in the case of Foreign Currency Loans denominated in Australian Dollars, Sydney, Australia time, (c) in the case of Foreign Currency Loans denominated in New Zealand Dollars, Wellington, New Zealand time, (d) in the case of Foreign Currency Loans denominated in Euros, Brussels time, (e) in the case of all other Foreign Currency Loans, London time and (f) in all other cases, New York time.
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“Losses”: as defined in subsection 10.4(b).
“Luxembourg Obligations”: the collective reference to the unpaid principal of and interest on the Loans made to JD Luxembourg and all other obligations and liabilities of JD Luxembourg (including, without limitation, interest accruing at the then applicable rate provided herein after the maturity of such Loans and interest accruing at the then applicable rate provided herein after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to JD Luxembourg, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Banks that are required to be paid by JD Luxembourg pursuant to the terms of any of the foregoing agreements).
“Majority Banks”: at any particular time, Banks having Commitment Percentages aggregating more than fifty percent; provided that (a) at any time after the termination of all the Commitments, “Majority Banks” shall mean Banks holding Extensions of Credit aggregating more than fifty percent in principal amount of the Total Extensions of Credit and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Majority Banks” shall mean Banks whose Exposure aggregates more than fifty percent of the aggregate Exposure of all the Banks.
“Margin Stock”: as defined in Regulation U of the Board.
“Moody’s”: Moody’s Investor Service, Inc.
“Mortgage”: as defined in subsection 6.2.
“Negotiated Rate Loan”: each Loan made to the Company or the Capital Corporation by a Bank pursuant to a Negotiated Rate Loan Request in such principal amount, for such number of Interest Periods (subject to the proviso to the definition of “Interest Period” in this subsection 1.1) and having such interest rate(s) and repayment terms as shall, in each case, be mutually agreed upon between such Borrower and such Bank.
“Negotiated Rate Loan Request”: each request by the Company or the Capital Corporation for a Bank to make Negotiated Rate Loans, which shall be delivered to such Bank in writing, by facsimile transmission, or by telephone, immediately confirmed in writing, and which shall specify the amount to be borrowed and the proposed Borrowing Date.
“Net Earnings Available for Fixed Charges”: for any particular period for the Capital Corporation and its consolidated Subsidiaries, the sum of (i) consolidated net earnings of the Capital Corporation and such Subsidiaries for such period without deduction of Fixed Charges and without deduction of federal, state or other income taxes; provided that such net earnings of the Capital Corporation and its consolidated Subsidiaries shall be determined by reference to the publicly available statements of income of the Capital Corporation and its consolidated Subsidiaries for or covering such period and after such adjustments, if any, as may be required so that such net earnings are determined in accordance with GAAP, except that earned investment tax credits may be included as revenue in the consolidated income statement of the Capital Corporation and its consolidated Subsidiaries, rather than as an offset against the provision for income taxes; provided, further, that such consolidated net earnings of the Capital Corporation and its Consolidated Subsidiaries for such period shall not include any unrealized gains or losses in respect of any Hedging Transaction entered into for the purpose of hedging interest rate risk and (ii) Support Payments received by the Capital Corporation in or in respect of such period.
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“New Bank”: as defined in subsection 2.20(b).
“New Bank Supplement”: as defined in subsection 2.20(b).
“New Zealand Dollars”: the lawful currency of New Zealand.
“Non-Qualifying Bank”: as defined in subsection 2.17(e).
“Notes”: the collective reference to any promissory note evidencing Loans.
“NYFRB”: the Federal Reserve Bank of New York.
“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“NYFRB’s Website”: the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
“Objecting Banks”: as defined in subsection 2.16(a).
“Offered Increase Amount”: as defined in subsection 2.20(a).
“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.
“Overnight Rate”: for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Effective Rate, and (b) with respect to any amount denominated in a Foreign Currency, at a rate reasonably determined by the Administrative Agent to be the cost to it of funding such amounts.
“Participant Register”: as defined in subsection 10.5(b).
“Participants”: as defined in subsection 10.5(b).
“Participating Member State”: any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
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“Payment”: as defined in subsection 9.4(b).
“Payment Notice”: as defined in subsection 9.4(b).
“Periodic Term CORRA Determination Day”: as defined in the definition of Term CORRA.
“Person”: an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature, provided that for purposes of subsection 8(h), Person shall also include two or more entities acting as a syndicate or any other group for the purpose of acquiring, holding or disposing of securities of the Company.
“Plan”: any pension plan which is covered by Title IV of ERISA and in respect of which either Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.
“Pounds” or “£” or “Pounds Sterling”: the lawful currency of the United Kingdom.
“Prevailing Rating”: at any date of determination, the Level then applicable; provided that for purposes of determining the applicable Level when the assigned Credit Ratings of the Company by all three Ratings Agencies do not fall within the same Level: (i) if the Credit Ratings of the Company assigned by S&P and Moody’s fall within the same Level, the Prevailing Rating shall be such Level, (ii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is one Level, the Prevailing Rating shall be determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s and (iii) if the Credit Ratings of the Company assigned by S&P and Moody’s do not fall within the same Level and the ratings differential is more than one Level, the Prevailing Rating shall be the Level one notch lower than the Level determined solely by reference to the higher of (x) the Credit Rating of the Company assigned by S&P and (y) the Credit Rating of the Company assigned by Moody’s.
“Prime Rate”: the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
“Purchasing Banks”: as defined in subsection 10.5(d).
“Ratings Agencies”: S&P, Moody’s and Fitch.
“Re-Allocation Date”: as defined in subsection 2.20(e).
“Reference Time”: with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two Business Days preceding the date of such setting, (2) if such Benchmark is the Eurocurrency Rate in respect of Loans denominated in Euros, 11:00 a.m. Brussels time two TARGET Days preceding the date of such setting, (3) if such Benchmark is SONIA, then four SONIA Business Days prior to such setting, (4) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting, (5) if such Benchmark is Daily Simple CORRA, then four Business Days prior to such setting, (6) if such Benchmark is the Term CORRA Rate, 1:00 p.m. Toronto local time on the day that is two Business Days preceding the date of such setting and (7) if such Benchmark is none of the Term SOFR Rate, the EURIBOR Rate, SONIA, Daily Simple SOFR, Daily Simple CORRA or the Term CORRA, the time determined by the Administrative Agent in its reasonable discretion.
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“Register”: as defined in subsection 10.5(e).
“Reimbursement Obligation”: the obligation of the Company or the Capital Corporation to reimburse an Issuing Bank pursuant to subsection 2.26(e) for amounts drawn under Letters of Credit issued for its account.
“Related Parties”: means, with respect to any specified Person, such Person’s affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s affiliates.
“Relevant Governmental Body”: (a) with respect to a Benchmark Replacement in respect of Loans denominated in Dollars, the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto, (b) with respect to a Benchmark Replacement in respect of Loans denominated in Pounds Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (c) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto (d) with respect to Benchmark Replacement in respect of Loans denominated in Canadian Dollars, the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto, and (e) with respect to a Benchmark Replacement in respect of Loans denominated in any Foreign Currency (other than Pounds Sterling, Euros or Canadian Dollars), (i) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated or any central bank or other supervisor which is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark Replacement or (ii) any working group or committee officially endorsed or convened by (1) the central bank for the Foreign Currency in which such Benchmark Replacement is denominated, (2) any central bank or other supervisor that is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement, (3) a group of those central banks or other supervisors or (4) the Financial Stability Board or any part thereof.
“Relevant Rate”: with respect to (i) any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Rate, (ii) any Eurocurrency Loan denominated in any Currency, the Eurocurrency Rate applicable thereto, (iii) any Loan denominated in Pounds Sterling, Daily Simple SONIA, (iv) any Daily Simple SOFR Loan, Daily Simple SOFR, (v) any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA and (vi) any Daily Simple CORRA Loan, Daily Simple CORRA.
“Report Period”: as defined in subsection 2.18.
“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder.
“Required Banks”: at a particular time, Banks having Commitment Percentages aggregating at least 66-2/3%; provided that (a) at any time after the termination of all the Commitments, “Required Banks” means Banks holding Extensions of Credit aggregating at least 66-2/3% in principal amount of the Total Extensions of Credit and (b) at any time after the Commitment Expiration Date with respect to any Objecting Bank (but prior to the termination of all the Commitments), “Required Banks” means Banks whose Exposure aggregates at least 66-2/3% of the aggregate Exposure of all the Banks.
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“Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserves”: as defined in subsection 2.13(c).
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”: of a Borrower, the Chairman, the President, any Executive, Senior or other Vice President, the Treasurer, any Assistant Secretary and any Assistant Treasurer of such Borrower.
“Restricted Margin Stock”: any Margin Stock, the sale, pledge or other disposition of which by the Company or any of its Subsidiaries is in any way restricted by an arrangement with any Bank or any affiliate thereof to the extent that the value thereof (determined in accordance with Regulation U of the Board) does not exceed 25% of the value (determined in accordance with such Regulation U) of all the assets subject to such restriction.
“Restricted Subsidiary”: any Subsidiary of the Company incorporated in the United States of America or Canada (a) which is engaged in, or whose principal assets consist of property used by the Company or any Restricted Subsidiary in, the manufacture of products within the United States of America or Canada or in the sale of products principally to customers located in the United States of America or Canada except any corporation which is a retail dealer in which the Company has, directly or indirectly, an investment, or (b) which the Company shall designate as a Restricted Subsidiary in an officers’ certificate signed by two Responsible Officers of the Company and delivered to the Administrative Agent.
“S&P”: Standard and Poor’s Financial Services LLC.
“Sale and Lease-back Transaction”: as defined in subsection 6.3.
“Sanctions Laws and Regulations”:
(i)any sanctions, prohibitions or requirements imposed by any executive order (an “Executive Order”) or by any sanctions program administered by the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) or U.S. Department of State; and
(ii)any sanctions measures imposed by the United Nations Security Council, the European Union or the United Kingdom, His Majesty’s Treasury and the Hong Kong Monetary Authority.
“Screen Rate”: the EURIBOR Screen Rate, the BBSY Screen Rate and/or the BKBM Screen Rate, as applicable.
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“Securitization Indebtedness”: the aggregate outstanding indebtedness for borrowed money, owner trust certificates (however classified) or credit enhancements incurred in connection with transactions involving (i) the sale, transfer or other disposition of receivables or leases (retail or wholesale) by the Capital Corporation or any of its Subsidiaries and (ii) the issuance of commercial paper, medium term notes or any other form of financing by any structured bankruptcy-remote Subsidiary of the Capital Corporation or any related conduit lender (such transactions, “Securitizations”), provided, that the aggregate outstanding credit enhancements in the form of cash or letter(s) of credit provided by the Capital Corporation or any of its Subsidiaries (other than any structured bankruptcy-remote Subsidiary) in excess of 10% of the aggregate outstanding indebtedness for borrowed money and owner trust certificates (however classified) incurred in connection with such Securitizations shall not be deemed for the purposes of this Agreement to be Securitization Indebtedness, but shall be deemed for purposes of subsection 7.2 to be Consolidated Senior Debt.
“Significant Subsidiary”: of a Borrower, any Subsidiary of such Borrower the assets, revenues or net worth of which is, at the time of determination, equal to or greater than ten percent of the assets, revenues or net worth, respectively, of such Borrower at such time.
“SOFR”: a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator”: the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website”: the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SONIA”: with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website on the immediately succeeding Business Day.
“SONIA Administrator”: the Bank of England (or any successor administrator of the Sterling Overnight Index Average).
“SONIA Administrator’s Website”: the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SONIA Borrowing”: as to any borrowing, the SONIA Loans comprising such borrowing.
“SONIA Business Day”: for any Loan denominated in Pounds Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London.
“SONIA Interest Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“SONIA Loan”: a Loan that bears interest at a rate based on Adjusted Daily Simple SONIA.
“SONIA Lookback Day”: has the meaning specified in the definition of “Daily Simple SONIA”.
“Subsidiary”: of a Person, a corporation or other entity of which securities or other ownership interests having ordinary voting power (other than securities or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.
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“Support Payments”: payments from the Company to the Capital Corporation made pursuant to that certain Support Agreement, dated as October 15, 1996, by and between the Company and the Capital Corporation, as amended by the First Amended Agreement, dated as of November 1, 2003, between the Company and the Capital Corporation.
“T2”: the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.
“TARGET Day”: any day on which T2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“Termination Date”: March 23, 2031 or such later date as shall be determined pursuant to the provisions of subsection 2.16 with respect to non-Objecting Banks.
“Term Benchmark”: when used in reference to any Loan or Borrowing, refers to Loans, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Term SOFR Rate or the Adjusted Term CORRA Rate.
“Term CORRA”: for any calculation, with respect to any Term Benchmark Borrowing denominated in Canadian Dollars, the Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term CORRA Determination Day”) that is two (2) Business Days prior to the first day of such Interest Period, as such rate is published by the Term CORRA Administrator; provided, however, that if as of 1:00 p.m. (Toronto time) on any Periodic Term CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Business Day is not more than five (5) Business Days prior to such Periodic Term CORRA Determination Day.
“Term CORRA Administrator”: Candeal Benchmark Administration Services Inc., TSX Inc., or any successor administrator.
“Term CORRA Reference Rate”: the forward-looking term rate based on CORRA.
“Term SOFR Determination Day”: as defined in the definition of Term SOFR Reference Rate.
“Term SOFR Rate”: with respect to any Term Benchmark Borrowing in Dollars and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator; provided that if the Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
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“Term SOFR Reference Rate”: for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.
“Total Commitments”: at any time, the aggregate amount of the Commitments then in effect.
“Total Extensions of Credit”: at any time, the aggregate amount of the Extensions of Credit of the Banks outstanding at such time.
“Total Stockholders’ Equity”: at a particular time, the total stockholders’ equity, exclusive of adjustments resulting from any accumulated other comprehensive income of the Company and its consolidated Subsidiaries as at the end of any fiscal quarter (including the last quarter of any fiscal year) as determined in accordance with GAAP.
“Transferees”: as defined in subsection 10.5(g).
“Transfer Effective Date”: the effective date of an assignment of Loans or Commitments under a Loan Assignment.
“Treaty”: the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1987, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992 and came into force on November 1, 1993), the Amsterdam Treaty (which was signed at Amsterdam on October 2, 1997 and came into force on May 1, 1999) and the Nice Treaty (which was signed on February 26, 2001), each as amended from time to time and as referred to in legislative measures of the European Union for the introduction of, changeover to or operating of the Euro in one or more member states.
“Type”: as to any Committed Rate Loan, its nature as an ABR Loan, Term Benchmark Loan, Daily Simple CORRA Loan, Daily Simple SOFR Loan, SONIA Loan or Eurocurrency Loan.
“UCP”: with respect to any commercial Letter of Credit, the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the time of issuance and subject to which such Letter of Credit was issued).
“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any Person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
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“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement”: the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“U.S. Government Securities Business Day”: any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Withholding Agent”: any Borrower or the Administrative Agent, as the case may be.
“Working Day”: any Business Day on which dealings in foreign currencies and exchange between banks may be carried on in London, England and New York, New York.
“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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| SECTION 2. | THE COMMITTED RATE LOANS; THE NEGOTIATED RATE LOANS; AMOUNT AND TERMS |
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In the event any Bank shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the converted Foreign Currency Loans of such Bank shall instead be applied to repay the ABR Loans or Loans denominated in Dollars, as the case may be, made by such Bank resulting from such conversion.
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2.17Indemnified Taxes. (a) Except as required by applicable law, all payments made under this Agreement shall be made without set-off, counterclaim, restriction or condition and free and clear of, and without reduction for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any nature whatsoever, now or hereafter imposed, levied, collected, withheld or assessed by any governmental or other regulatory authority charged with the administration thereof with respect to any amount that is paid under this Agreement excluding, in the case of each Bank (for purposes of this subsection 2.17 each reference to a Bank shall be deemed to also be a reference to any Issuing Bank), (i) income and franchise taxes (including, without limitation, branch taxes) imposed by the United States or similar taxes imposed by a political subdivision or taxing authority thereof or therein, (ii) in the case of any Foreign Bank, any taxes imposed by the United States by means of withholding at the source unless such Bank has provided the Borrowers and the Administrative Agent with the documents it is required to provide to them under subsection 2.17(c) or such tax is imposed by reason of a change in United States law (other than FATCA described in clause (vi)) after the date the Bank becomes a party to this Agreement, (iii) taxes that would not have been imposed on such Bank but for the existence of a connection between such Bank and the jurisdiction imposing such taxes (other than a connection arising principally by virtue of such Bank having executed, delivered or performed its obligations or received a payment under, or enforced this Agreement), (iv) taxes that are attributable to such Bank’s failure to comply with the requirements of subsection 2.17(c), subsection 2.17(d) or subsection 2.17(f), (v) any taxes imposed upon a Non-Qualifying Bank (as defined in subsection 2.17(e)) pursuant to the several agreements concluded between Luxembourg and certain dependent or associated territories, providing for the possible application of a withholding tax, as in effect as of the date hereof, other than any taxes which can be avoided pursuant to an exchange of information and for which such information is available to the Borrower, and (vi) any withholding imposed pursuant to FATCA (such non-excluded taxes being called “Indemnified Taxes”). If any Indemnified Taxes are required to be withheld from any amounts so payable to the Administrative Agent or any Bank hereunder, as determined in good faith by the applicable Withholding Agent, (i) such amounts shall be paid to the relevant Government Authority in accordance with applicable law and (ii) the amounts so payable by the applicable Borrower shall be increased to the extent necessary to yield to such Bank (after payment of all Indemnified Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement as if such withholding or deduction had not been made. Whenever any Indemnified Taxes are payable by any Borrower, as the case may be, as promptly as possible thereafter such Borrower, as the case may be, shall send to the Administrative Agent, for its own account, or for the account of the affected Bank, a certified copy of the original official receipt, if any, or other documentary evidence received by such Borrower showing payment thereof. If (i) such Borrower fails to pay any Indemnified Taxes when due to the appropriate taxing authority, (ii) such Borrower fails to remit to the Administrative Agent the required receipts or other required documentary evidence, or (iii) as a result of a failure listed in (i) directly above, any Indemnified Taxes are imposed directly upon the Administrative Agent or any Bank, such Borrower shall indemnify the Administrative Agent or such Bank, as the case may be, for any Indemnified Taxes and interest or penalties with respect thereto that may become payable by the Administrative Agent or such Banks, as the case may be, as a result of any such failure, in the case of (i) or (ii), or any such direct imposition, in the case of (iii).
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The obligations of the parties under this subsection 2.17 shall survive termination of this Agreement, payment of the Loans and termination of the Letters of Credit.
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2.19Replacement of Cancelled Banks. The Borrowers may designate one or more financial institutions to act as a Bank hereunder in place of any Cancelled Bank, and upon the Borrowers, each such financial institution and the Administrative Agent executing a writing substantially in the form of Exhibit H, such financial institution shall become and be a Bank hereunder with all the rights and obligations it would have had if it had been named on the signature pages hereof, and having for all such financial institutions an aggregate Commitment no greater than the whole, or such cancelled part, of the Commitment of the Cancelled Bank in place of which such financial institutions were designated; provided, however, that all rights and obligations of such Cancelled Bank relating to the Loans made by such Cancelled Bank that are outstanding on the date of such cancellation shall be the rights and obligations of such Cancelled Bank and not of any such financial institution. The Administrative Agent shall execute any such writing presented to it and shall notify the Banks of the execution thereof, the name of the financial institution executing such writing and the amount of its Commitment.
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The rights and remedies against a Defaulting Bank under this subsection 2.23 are in addition to other rights and remedies that the Borrowers may have against such Defaulting Bank.
In the event and on the date that the Administrative Agent, the Company and the Issuing Banks each agree that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank, then the L/C Obligations of the Banks shall be readjusted to reflect the inclusion of such Bank’s Commitment and on such date such Bank shall purchase at par such of the Loans of the other Banks (other than Negotiated Rate Loans) as the Administrative Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Commitment Percentage and such Bank shall no longer be a Defaulting Bank; provided, that subject to subsection 10.15, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Bank arising from that Bank having become a Defaulting Bank, including any claim of a Non-Defaulting Bank as a result of such Non-Defaulting Bank’s increased exposure following such reallocation.
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The Capital Corporation further agrees that its agreement hereunder constitutes a promise of payment when due and not of collection, and waives any right to require that any resort be had by any Bank to any balance of any deposit account or credit on the books of any Bank in favor of JD Luxembourg or any other Person.
The obligations of the Capital Corporation hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of the Luxembourg Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Capital Corporation hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any Bank to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any waiver or modification in respect of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Luxembourg Obligations, or by any other act or omission which may or might in any manner or to any extent vary the risk of the Capital Corporation or otherwise operate as a discharge of the Capital Corporation as a matter of law or equity.
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The Capital Corporation further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Luxembourg Obligation is rescinded or must otherwise be restored by the Administrative Agent or any Bank upon the bankruptcy or reorganization of JD Luxembourg or otherwise.
In furtherance of the foregoing and not in limitation of any other right which the Administrative Agent or any Bank may have at law or in equity against the Capital Corporation by virtue hereof, upon the failure of JD Luxembourg to pay any Luxembourg Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Capital Corporation hereby promises to and will, upon receipt of written demand by the Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of such unpaid Luxembourg Obligation. In the event that, by reason of the bankruptcy of JD Luxembourg, (i) acceleration of Loans made to JD Luxembourg is prevented and (ii) the Capital Corporation shall not have prepaid the outstanding Loans and other amounts due hereunder owed by JD Luxembourg, the Capital Corporation will forthwith purchase such Loans at a price equal to the principal amount thereof plus accrued interest thereon and any other amounts due hereunder with respect thereto. The Capital Corporation further agrees that if payment in respect of any Luxembourg Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York and if, by reason of any change in law, disruption of currency or foreign exchange markets, war or civil disturbance or similar event, payment of such Luxembourg Obligation in such currency or such place of payment shall be impossible or, in the reasonable judgment of any applicable Bank, not consistent with the protection of its rights or interests, then, at the election of any applicable Bank, the Capital Corporation shall make payment of such Luxembourg Obligation in Dollars (based upon the applicable Exchange Rate in effect on the date of payment) and/or in New York.
Notwithstanding any payment made by the Capital Corporation hereunder or any set-off or application of funds of the Capital Corporation by the Administrative Agent or any Bank, the Capital Corporation shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Bank against JD Luxembourg or any guarantee or right of offset held by the Administrative Agent or any Bank for the payment of the Luxembourg Obligations, until all amounts owing to the Administrative Agent and the Banks by JD Luxembourg on account of the Luxembourg Obligations are paid in full in cash. If any amount shall be paid to the Capital Corporation on account of such subrogation rights at any time when all of the Luxembourg Obligations shall not have been paid in full in cash, such amount shall be held by the Capital Corporation in trust for the Administrative Agent and the Banks, segregated from its other funds, and shall, forthwith upon receipt by it, be turned over to the Administrative Agent in the exact form received by it (duly indorsed by it to the Administrative Agent, if required), to be applied against the Luxembourg Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
| SECTION 3. | REPRESENTATIONS AND WARRANTIES |
Each Borrower hereby represents and warrants to the Administrative Agent and to each Bank that:
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3.1Financial Condition. The consolidated balance sheet of such Borrower and its consolidated Subsidiaries as of November 2, 2025 and the related consolidated statements of income and of cash flow for the fiscal year then ended (including the related schedules and notes) reported on by Deloitte & Touche LLP, copies of which have heretofore been furnished to each Bank, fairly present the consolidated financial condition of such Borrower and its consolidated Subsidiaries as at such date, and the consolidated results of their operations and changes in financial position for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with generally accepted accounting principles in the United States of America applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein).
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| SECTION 4. | CONDITIONS PRECEDENT |
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Each acceptance by any Borrower of a Loan, each issuance of a Letter of Credit and each increase in the drawable amount of any Letter of Credit for the account of a Borrower, shall constitute a representation and warranty by the relevant Borrower as of the date of such Loan, the date of issuance of such Letter of Credit or the date of increase in the drawable amount of such Letter of Credit, as applicable, that the applicable conditions in clauses (a) and (b) of this subsection 4.2 have been satisfied.
| SECTION 5. | AFFIRMATIVE COVENANTS |
Each of the Borrowers (except as otherwise specified) hereby agrees that, so long as there is any obligation by any Bank to make Loans to it hereunder, any obligation of an Issuing Bank to issue Letters of Credit hereunder, any Loan of such Borrower remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing by such Borrower to any Bank, any Issuing Bank or any Agent hereunder (unless the Majority Banks shall otherwise consent in writing):
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All such financial statements described in clause (a) or (b) above shall present fairly the consolidated financial condition and results of operations of such Borrower and its consolidated Subsidiaries and be prepared in accordance with generally accepted accounting principles in the United States of America (or, in the case of any such financial statements furnished by JD Luxembourg, international financial reporting standards in effect from time to time as applicable to JD Luxembourg, or such other accounting standards required by any applicable Luxembourg Governmental Authority) applied consistently throughout the periods reflected therein (except as approved by such accountants or officer, as the case may be, and disclosed therein). The Company and the Capital Corporation shall be deemed to have furnished such financial statements to each Bank when they are filed with the Securities and Exchange Commission and posted on its EDGAR system, and JD Luxembourg shall be deemed to have furnished such financial statements to each Bank when they are delivered to the Administrative Agent via electronic mail or other electronic transmission.
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| SECTION 6. | NEGATIVE COVENANTS OF THE COMPANY |
The Company hereby agrees that, so long as there is any obligation by any Bank to make Loans hereunder, any obligation of an Issuing Bank to issue Letters of Credit hereunder, any Loan remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing to any Agent, any Issuing Bank or any Bank hereunder, it shall not, nor in the case of subsections 6.2 and 6.3 shall it permit any Restricted Subsidiary to (unless the Majority Banks shall otherwise consent in writing):
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| SECTION 7. | NEGATIVE COVENANTS OF THE CAPITAL CORPORATION |
The Capital Corporation hereby agrees that, so long as there is any obligation by any Bank to make Loans to the Capital Corporation hereunder, any obligation of any Issuing Bank to issue Letters of Credit hereunder, any Loan of the Capital Corporation remains outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing by the Capital Corporation to any Bank, any Issuing Bank or any Agent hereunder, the Capital Corporation shall not, nor in the case of the agreements set forth in subsection 7.3 shall it permit any of its Subsidiaries to, directly or indirectly (unless the Majority Banks shall otherwise consent in writing):
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| SECTION 8. | EVENTS OF DEFAULT |
Upon the occurrence and during the continuance of any of the following events:
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then, and in any such event, (A) if such event is an Event of Default specified in paragraph (f) above, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Loans shall immediately become due and payable, and (B)(1) if such event is an Event of Default specified in paragraph (a) or (e), then with the consent of the Majority Banks, the Administrative Agent may, or upon the request of the Majority Banks, the Administrative Agent shall, or (2) if such event is an Event of Default specified in paragraph (b), (c), (d), (g) or (h), then with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks, the Administrative Agent shall, take either or both of the following actions: (i) by notice to the Borrowers, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) by notice of default to the Borrowers, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrowers shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrowers hereunder. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrowers hereunder shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrowers (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived with respect to this Agreement by the Borrowers.
| SECTION 9. | THE AGENTS |
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9.7Indemnification. (a) The Banks agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably (as reasonably determined by the Administrative Agent), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Loans) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct. The agreements in this subsection 9.7 shall survive the payment of the Loans and all other amounts payable hereunder.
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(d)Each of the Banks, each of the Issuing Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Borrower Communications on the Approved Borrower Portal in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.
(e)Nothing herein shall prejudice the right of any Borrower to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.
“Borrower Communications” means, collectively, any borrowing notice, conversion or continuation notice, notice of prepayment, notice requesting the issuance, amendment or extension of a Letter of Credit or other notice, demand, communication, information, document or other material provided by or on behalf of any Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed by any Borrower to the Administrative Agent through an Approved Borrower Portal.
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| SECTION 10. | MISCELLANEOUS |
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The Company: |
Deere & Company |
The Capital Corporation: |
John Deere Capital Corporation |
JD Luxembourg: |
John Deere Bank S.A. L-1855 Luxembourg Grand Duchy of Luxembourg |
with a copy to: |
Deere & Company Telephone: 309-765-4488 |
The Administrative Agent: |
Provided separately by Administrative Agent |
Issuing Bank: |
Provided separately by Administrative Agent |
To any other Bank: |
To it at its address (or facsimile number) set forth in its Administrative Questionnaire |
provided that any notice, request or demand to or upon the Administrative Agent or the Banks pursuant to subsections 2.1, 2.2, 2.5, 2.6, 2.9, 2.11, 2.20 and 9.9 shall not be effective until received (including receipt by telephone if permitted hereby).
Notices and other communications to any Borrower, the Banks, the Administrative Agent and the Issuing Banks hereunder may be delivered or furnished by using Approved Borrower Portals (as applicable), in each case, pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 hereof unless otherwise agreed by the Administrative Agent and the applicable Bank.
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The Administrative Agent or any Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
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10.8Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrowers and the Administrative Agent. Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to subsection 10.2), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Banks shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrowers without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Bank, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Borrowers hereby (i) agree that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Banks, and the Borrowers, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) the Administrative Agent and each of the Banks may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against any Indemnified Person for any Losses arising solely from the Administrative Agent’s and/or any Bank’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Losses arising as a result of the failure of a Borrower to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
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(x)a reduction in full or in part or cancellation of any such liability;
(y)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(z)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any Resolution Authority.
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As used in this Section, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code, to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
[Remainder of page left intentionally blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
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DEERE & COMPANY By:/s/ Jerry Steining |
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JOHN DEERE CAPITAL CORPORATION By:/s/ Jerry Steining |
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JOHN DEERE BANK S.A. By:/s/ Jerry Steining By:/s/ Nathalie Prevost |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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JPMORGAN CHASE BANK, N.A., By: /s/ Will Price |
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J.P. MORGAN SE, By: /s/ Suzanne Sambell |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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BANK OF AMERICA, N.A., as Co-Syndication Agent and as a Bank By: /s/ Kathryn DuFour |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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CITIBANK, N.A., as Co-Syndication Agent and as a Bank By: /s/ Susan Olsen Title: Vice President |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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BARCLAYS BANK PLC, as a Bank By: /s/ Charlene Saldanha Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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DEUTSCHE BANK AG NEW YORK BRANCH, as a Bank By: /s/ Annie Chung Title: Managing Director By: /s/ Marko Lukin Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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HSBC BANK USA, N.A., as a Bank By: /s/ Matthew McLaurin Title: Managing Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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MUFG Bank, Ltd., as a Bank By: /s/ George Stoecklein Title: Managing Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Royal Bank of Canada, as a Bank By: /s/ Mark Tarnecki Title: Authorized Signatory |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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The Toronto-Dominion Bank, New York Branch, as a Bank By: /s/ David Perlman Title: Authorized Signatory |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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BNP PARIBAS, as a Bank By: /s/ Anita Ogbara Title: Managing Director By: /s/ Norman Miller Title: Vice President |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Credit Agricole Corporate and Investment Bank, as a Bank By: /s/ Jill Wong Title: Director By: /s/ Gordon Yip Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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GOLDMAN SACHS BANK USA, as a Bank By: /s/ Jonathan Dworkin Title: Authorized Signatory |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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BANK OF CHINA LIMITED, CHICAGO BRANCH, as a Bank By: /s/ Libo Sun Title: SVP & Branch Manager |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Commerzbank AG, New York Branch, as a Bank By: /s/ Jack Deegan Title: Managing Director By: /s/ Robert Sullivan Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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ING Bank N.V., Dublin Branch as a Bank By: /s/ Sean Hassett Title: Director By: /s/ Rory Fitzgerald Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Lloyds Bank plc, as a Bank By: /s/ Amit Patel Title: Associate Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Sumitomo Mitsui Banking Corporation, as a Bank By: /s/ Jun Ashley Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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THE BANK OF NEW YORK MELLON, as a Bank By: /s/ Thomas J. Tarasovich, Jr. Title: Senior Vice President |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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THE BANK OF NOVA SCOTIA as a Bank By: /s/ Adnan Osman Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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TRUIST BANK, as a Bank By: /s/ William P. Rutkowski Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, as a Bank By: /s/ Brian Crowley Title: Managing Director By: /s/ Armen Semizian Title: Managing Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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BANCO SANTANDER, S.A., NEW YORK BRANCH, as a Bank By: /s/ Andres Barbosa Title: Managing Director By: /s/ Carolina Gutierrez Title: Executive Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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PNC Bank, National Association, as a Bank By: /s/ Michal Suchanek Title: Assistant Vice President |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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SOCIETE GENERALE, as a Bank By: /s/ Kimberly Metzger Title: Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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U.S. Bank National Association, as a Bank By: /s/ Doug Magalska Title: Vice President |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Agricultural Bank of China, New York Branch, as a Bank By: /s/ Nelson Chou Title: Senior Vice President & Head of |
[Signature Page to the 2031 Deere & Company Credit Agreement]
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Nordea Bank Abp, New York Branch, as a Bank By: /s/ Ola Anderssen Title: Director By: /s/ Anders Holmgaard Title: Managing Director |
[Signature Page to the 2031 Deere & Company Credit Agreement]
Exhibit 31.1
CERTIFICATIONS
I, John C. May, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of Deere & Company; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: |
May 28, 2026 |
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By: |
/s/ John C. May |
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John C. May |
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Chairman and Chief Executive Officer |
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(Principal Executive Officer) |
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Exhibit 31.2
CERTIFICATIONS
I, Brent Norwood, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of Deere & Company; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: |
May 28, 2026 |
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By: |
/s/ Brent Norwood |
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Brent Norwood |
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Senior Vice President and Chief Financial Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
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EXHIBIT 32
STATEMENT PURSUANT TO
18 U.S.C. SECTION 1350
AS REQUIRED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Deere & Company (the “Company”) for the period ended May 3, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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May 28, 2026 |
/s/ John C. May |
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Chairman and Chief Executive Officer |
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John C. May |
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(Principal Executive Officer) |
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May 28, 2026 |
/s/ Brent Norwood |
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Senior Vice President and Chief Financial Officer |
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Brent Norwood |
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(Principal Financial Officer and Principal |
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Accounting Officer) |
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