Charles Albert Edward Dillard

Charles Albert Edward Dillard asked about the extent to which the 2026 guidance incorporates additional government farm assistance and the expected operating leverage of the business as it emerges from the current cycle.

Answer

Josh Beal, Director of Investor Relations, stated that the baseline forecast does not assume additional government assistance, relying on current market conditions and order velocity, with flexibility built into the back half of the year. Josh Jepsen, CFO, indicated that as volumes pick up, particularly in small ag and construction, incrementals will be solid, reflecting improved cost structure and technology growth, leading to positive leverage.

Charles Albert Edward Dillard asked about the extent to which Deere's fiscal year 2026 guidance incorporates any additional farm assistance from the government and sought insights into the expected operating leverage of the business as it emerges from the current deeper-than-normal cycle.

Answer

Josh Beal, Director of Investor Relations, stated that the baseline forecast does not assume additional government assistance, relying on current market conditions and order velocity, with flexibility built into the back half of the year to respond to changes. Josh Jepsen, CFO, addressed operating leverage, noting that as volumes pick up, particularly in small ag and turf and construction, incrementals are expected to be solid, reflecting positive margin benefits from technology growth and cost structure improvements, despite ongoing tariff mitigation efforts.