- Third-quarter net sales rise 25%, bolstered by higher rates of
production, despite continuing supply-chain pressures.
- Full-year earnings outlook revised to range of $7.0 – $7.2
billion.
- Strong order books and positive customer fundamentals to drive
demand in 2023.
MOLINE,
Ill., Aug. 19, 2022 /CNW/ -- Deere & Company
(NYSE: DE) reported net income
of $1.884 billion for the third
quarter ended July 31, 2022, or
$6.16 per share, compared with net
income of $1.667 billion, or
$5.32 per share, for the quarter
ended August 1, 2021. For the first
nine months of the year, net income attributable to Deere &
Company was $4.885 billion, or
$15.88 per share, compared with
$4.680 billion, or $14.86 per share, for the same period last
year.
Net sales and revenues increased 22 percent, to $14.102 billion, for the third quarter of 2022
and rose 13 percent, to $37.041
billion, for nine months. Net sales were $13.000 billion for the quarter and $33.565 billion for nine months, compared with
$10.413 billion and $29.461 billion last year.
"We're proud of the extraordinary efforts by our employees to
increase factory output and get products to customers under
challenging circumstances," said John
C. May, chairman and chief executive officer. "At the same
time, our results reflected higher costs and production
inefficiencies driven by the difficult supply-chain situation."
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2022
is forecast to be in a range of $7.0
billion to $7.2 billion.
"Looking ahead, we believe favorable conditions will continue
into 2023 based on the strong response we have experienced to
early-order programs," said May. "We are working closely with our
factories and suppliers to meet higher levels of customer demand
next year. Additionally, we are confident the company's smart
industrial strategy and leap ambitions will continue unlocking new
value for customers through Deere's advanced technologies and
solutions."
Deere &
Company
|
|
Third
Quarter
|
|
Year to Date
|
|
$ in millions,
except per share amounts
|
|
2022
|
|
2021
|
|
% Change
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales and
revenues
|
|
$
|
14,102
|
|
$
|
11,527
|
|
22 %
|
|
$
|
37,041
|
|
$
|
32,697
|
|
13 %
|
|
Net income
|
|
$
|
1,884
|
|
$
|
1,667
|
|
13 %
|
|
$
|
4,885
|
|
$
|
4,680
|
|
4 %
|
|
Fully diluted
EPS
|
|
$
|
6.16
|
|
$
|
5.32
|
|
|
|
$
|
15.88
|
|
$
|
14.86
|
|
|
|
Results for the presented periods were affected by special
items. See Note 1 of the financial statements in this earnings
release for further details.
Production &
Precision Agriculture
|
|
Third
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
6,096
|
|
$
|
4,250
|
|
43 %
|
|
Operating
profit
|
|
$
|
1,293
|
|
$
|
906
|
|
43 %
|
|
Operating
margin
|
|
|
21.2 %
|
|
|
21.3 %
|
|
|
|
Production and precision agriculture sales increased for the
quarter due to higher shipment volumes and price realization,
partially offset by the unfavorable impact of currency translation.
Operating profit rose primarily due to price realization and higher
shipment volumes / sales mix. These items were partially offset by
higher production costs, higher selling, administrative, and
general expenses, increased research and development expenses, and
the unfavorable effects of foreign currency exchange.
Small Agriculture
& Turf
|
|
Third
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
3,635
|
|
$
|
3,147
|
|
16 %
|
|
Operating
profit
|
|
$
|
552
|
|
$
|
583
|
|
-5 %
|
|
Operating
margin
|
|
|
15.2 %
|
|
|
18.5 %
|
|
|
|
Small agriculture and turf sales for the quarter increased due
to higher shipment volumes and price realization partially offset
by the unfavorable impact of currency translation. Operating profit
decreased primarily due to higher production costs, higher selling,
administrative, and general expenses, increased research and
development expenses, and the unfavorable effects of foreign
currency exchange. These items were partially offset by price
realization and higher sales volumes. Results for the prior period
included a gain on the sale of a closed factory in China that had produced small agricultural
equipment.
Construction &
Forestry
|
|
Third
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
3,269
|
|
$
|
3,016
|
|
8 %
|
|
Operating
profit
|
|
$
|
514
|
|
$
|
463
|
|
11 %
|
|
Operating
margin
|
|
|
15.7 %
|
|
|
15.4 %
|
|
|
|
Construction and forestry sales moved higher for the quarter
primarily due to price realization. Operating profit increased
due to price realization, partially offset by higher production
costs.
Financial
Services
|
|
Third
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net income
|
|
$
|
209
|
|
$
|
227
|
|
-8 %
|
|
Financial services net income for the quarter was negatively
affected by unfavorable discrete income-tax adjustments, a higher
provision for credit losses, and lower gains on operating-lease
residual values. These items were partially offset by income earned
on a higher average portfolio.
Industry Outlook for
Fiscal 2022
|
|
|
|
|
|
|
|
Agriculture &
Turf
|
|
|
|
|
|
|
|
U.S. &
Canada:
|
|
|
|
|
|
|
|
Large Ag
|
|
|
|
|
|
Up ~ 15%
|
|
Small Ag &
Turf
|
|
|
|
|
|
~ Flat
|
|
Europe
|
|
|
|
|
|
~ Flat
|
|
South America (Tractors
& Combines)
|
|
|
|
|
|
Up 10 to 15%
|
|
Asia
|
|
|
|
|
|
Down
moderately
|
|
|
|
|
|
|
|
|
|
Construction &
Forestry
|
|
|
|
|
|
|
|
U.S. &
Canada:
|
|
|
|
|
|
|
|
Construction
Equipment
|
|
|
|
|
|
Up ~ 10%
|
|
Compact Construction
Equipment
|
|
|
|
|
|
Flat to Down
5%
|
|
Global
Forestry
|
|
|
|
|
|
Flat to Down
5%
|
|
Global
Roadbuilding
|
|
|
|
|
|
Flat to Up
5%
|
|
Deere Segment
Outlook for Fiscal 2022
|
|
|
|
Currency
|
|
Price
|
|
$ in
millions
|
|
Net Sales
|
|
Translation
|
|
Realization
|
|
Production &
Precision Ag
|
|
Up 25 to 30%
|
|
-2 %
|
|
+14 %
|
|
Small Ag &
Turf
|
|
Up 10 to 15%
|
|
-3 %
|
|
+9 %
|
|
Construction &
Forestry
|
|
Up ~ 10%
|
|
-3 %
|
|
+10 %
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
Net Income
|
|
$ 870
|
|
|
|
Financial Services. Full-year 2022 results are
expected to be slightly lower than in fiscal 2021 due to a higher
provision for credit losses, less-favorable financing spreads, and
higher selling, administrative, and general expenses. These factors
are expected to be partially offset by income earned on a higher
average portfolio.
John Deere Capital Corporation
The following is disclosed on behalf of the company's financial
services subsidiary, John Deere Capital Corporation (JDCC), in
connection with the disclosure requirements applicable to its
periodic issuance of debt securities in the public market.
|
|
Third
Quarter
|
|
Year to Date
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
2022
|
|
2021
|
|
% Change
|
|
Revenue
|
|
$
|
689
|
|
$
|
683
|
|
1 %
|
|
$
|
1,984
|
|
$
|
2,015
|
|
-2 %
|
|
Net income
|
|
$
|
173
|
|
$
|
186
|
|
-7 %
|
|
$
|
521
|
|
$
|
530
|
|
-2 %
|
|
Ending portfolio
balance
|
|
|
|
|
|
|
|
|
|
$
|
45,185
|
|
$
|
41,508
|
|
9 %
|
|
Results in the quarter declined due to unfavorable discrete
income-tax adjustments, less-favorable financing spreads, and lower
gains on operating-lease residual values. Partially offsetting
these factors was income earned on a higher average portfolio. For
the year-to-date period, net income decreased mainly due to
less-favorable financing spreads, a higher provision for credit
losses, and unfavorable discrete income-tax adjustments, partially
offset by income earned on a higher average portfolio.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, including in the sections
entitled "Company Outlook & Summary," "Industry Outlook," and
"Deere Segment Outlook," 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 the
company's operations 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, the company expressly disclaims any obligation to
update or revise its forward-looking statements. Further
information concerning the company and its businesses, including
factors that could materially affect the company's financial
results, is included in the company's other filings with the SEC
(including, but not limited to, the factors discussed in Item 1A.
"Risk Factors" of the company's most recent Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q).
Factors Affecting All Lines of Business
All of the company's businesses and their results are affected
by general global macroeconomic conditions, including but not
limited to inflation, including rising costs for materials used in
our production, slower growth or recession, higher interest rates
and currency fluctuations which could adversely affect the U.S.
dollar and customer confidence, customer access to capital and
overall demand for our products; delays or disruptions in the
company's supply chain, including work stoppages or disputes by
suppliers with their unionized labor; shipping delays; government
spending and taxing; changes in weather and climate patterns; the
political and social stability of the markets in which the company
operates; the effects of, or response to, wars and other conflicts,
including the current military conflict between Russia and Ukraine; natural disasters; and the spread of
major epidemics or pandemics (including the COVID-19 pandemic). The
sustainability of economic recovery from COVID-19 remains unclear
and significant volatility could continue for a prolonged
period.
Significant changes in market liquidity conditions, changes in
the company's credit ratings, and any failure to comply with
financial covenants in credit agreements could impact our access to
or terms of future funding, which could reduce the company's
earnings and cash flows. A debt crisis in Europe, Latin
America, or elsewhere could negatively impact currencies,
global financial markets, funding sources and costs, asset and
obligation values, customers, suppliers, and demand for equipment.
The company's investment management activities could be impaired by
changes in the equity, bond, and other financial markets, which
would negatively affect earnings.
Additional factors that could materially affect the company's
operations, financial condition, and results include changes in
governmental trade, banking, monetary, and fiscal policies,
including, policies, and tariffs for the benefit of certain
industries or sectors; actions by environmental, health, and safety
regulatory agencies, including those related to engine emissions,
carbon and other greenhouse gas emissions, and the effects of
climate change; changes to GPS radio frequency bands and their
permitted uses; changes to accounting standards; changes to and
compliance with economic sanctions and export controls laws and
regulations (including those in place for Russia); and compliance with evolving U.S. and
foreign laws when expanding to new markets and otherwise.
Other factors that could materially affect the company's results
and operations include security breaches, cybersecurity attacks,
technology failures, and other disruptions to the information
technology infrastructure of the company and its suppliers and
dealers; security breaches with respect to the company's products;
the loss of or challenges to intellectual property rights; the
availability and prices of strategically sourced materials,
components, and whole goods; introduction of legislation that could
affect the company's business model and intellectual property, such
as right to repair or right to modify; events that damage the
company's reputation or brand; significant investigations, claims,
lawsuits, or other legal proceedings; the success or failure of new
product initiatives or business strategies; changes in product
preferences, sales mix, and take rates of products and life cycle
solutions; gaps or limitations in rural broadband coverage,
capacity, and speed needed to support technology solutions; oil and
energy prices, supplies, and volatility; the availability and cost
of freight; actions of competitors in the various industries in
which the company competes, particularly price discounting; dealer
practices, especially as to levels of new and used field
inventories; changes in demand and pricing for used equipment and
resulting impacts on lease residual values; the inability to
deliver precision technology and agricultural solutions to
customers; labor relations and contracts, including work stoppages
and other disruptions; changes in the ability to attract, develop,
engage, and retain qualified personnel; and the integration of
acquired businesses.
Agricultural Equipment Operations
The company's agricultural equipment operations are subject to a
number of uncertainties, including certain factors that affect
farmers' confidence and financial condition. These factors include
demand for agricultural products; world grain stocks; soil
conditions; harvest yields; prices for commodities and livestock;
availability and cost of fertilizer; availability of transport for
crops; the growth and sustainability of non-food uses for some
crops (including ethanol and biodiesel production); real estate
values; available acreage for farming; changes in government farm
programs and policies; changes in and effects of crop insurance
programs; changes in environmental regulations and their impact on
farming practices; animal diseases and their effects on poultry,
beef, and pork consumption and prices on livestock feed demand; and
crop pests and diseases.
Production and Precision Agriculture Operations
The production and precision agriculture operations rely in part
on hardware and software, guidance, connectivity and digital
solutions, and automation and machine intelligence. Many factors
contribute to the company's precision agriculture sales and
results, including the impact to customers' profitability and/or
sustainability outcomes; availability of technological innovations;
speed of research and development; effectiveness of partnerships
with third parties; and the dealer channel's ability to support and
service precision technology solutions.
Small Agriculture and Turf Equipment
Factors affecting the company's small agriculture and turf
equipment operations include customer profitability; consumer
purchasing preferences; housing starts and supply; infrastructure
investment; spending by municipalities and golf courses; and
consumable input costs.
Construction and Forestry
Factors affecting the company's construction and forestry
equipment operations include real estate and housing prices; the
number of housing starts; commodity prices such as oil and gas; the
levels of public and non-residential construction; and investment
in infrastructure. Prices for pulp, paper, lumber, and structural
panels affect sales of forestry equipment.
John Deere Financial
The liquidity and ongoing profitability of John Deere Capital
Corporation and the company's other financial services subsidiaries
depend on timely access to capital to meet future cash flow
requirements, and to fund operations, costs, and purchases of the
company's products. If general economic conditions deteriorate or
capital markets become more volatile, funding could be unavailable
or insufficient. Additionally, customer confidence levels may
result in declines in credit applications and increases in
delinquencies and default rates, which could materially impact
write-offs and provisions for credit losses.
DEERE &
COMPANY THIRD QUARTER 2022 PRESS RELEASE
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
July 31
|
|
August 1
|
|
%
|
|
July 31
|
|
August 1
|
|
%
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production &
precision ag net sales
|
|
$
|
6,096
|
|
$
|
4,250
|
|
+43
|
|
$
|
14,568
|
|
$
|
11,848
|
|
+23
|
|
Small ag & turf net
sales
|
|
|
3,635
|
|
|
3,147
|
|
+16
|
|
|
9,836
|
|
|
9,051
|
|
+9
|
|
Construction &
forestry net sales
|
|
|
3,269
|
|
|
3,016
|
|
+8
|
|
|
9,161
|
|
|
8,562
|
|
+7
|
|
Financial services
revenues
|
|
|
903
|
|
|
902
|
|
|
|
|
2,637
|
|
|
2,679
|
|
-2
|
|
Other
revenues
|
|
|
199
|
|
|
212
|
|
-6
|
|
|
839
|
|
|
557
|
|
+51
|
|
Total net sales and
revenues
|
|
$
|
14,102
|
|
$
|
11,527
|
|
+22
|
|
$
|
37,041
|
|
$
|
32,697
|
|
+13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production &
precision ag
|
|
$
|
1,293
|
|
$
|
906
|
|
+43
|
|
$
|
2,646
|
|
$
|
2,557
|
|
+3
|
|
Small ag &
turf
|
|
|
552
|
|
|
583
|
|
-5
|
|
|
1,443
|
|
|
1,699
|
|
-15
|
|
Construction &
forestry
|
|
|
514
|
|
|
463
|
|
+11
|
|
|
1,599
|
|
|
1,220
|
|
+31
|
|
Financial
services
|
|
|
287
|
|
|
291
|
|
-1
|
|
|
864
|
|
|
844
|
|
+2
|
|
Total operating
profit
|
|
|
2,646
|
|
|
2,243
|
|
+18
|
|
|
6,552
|
|
|
6,320
|
|
+4
|
|
Reconciling items
**
|
|
|
(108)
|
|
|
(85)
|
|
+27
|
|
|
(303)
|
|
|
(312)
|
|
-3
|
|
Income taxes
|
|
|
(654)
|
|
|
(491)
|
|
+33
|
|
|
(1,364)
|
|
|
(1,328)
|
|
+3
|
|
Net income
attributable to Deere & Company
|
|
$
|
1,884
|
|
$
|
1,667
|
|
+13
|
|
$
|
4,885
|
|
$
|
4,680
|
|
+4
|
|
|
|
*
|
Operating profit is
income from continuing operations before corporate expenses,
certain external interest expense, certain foreign exchange gains
and losses, and income taxes. Operating profit of the financial
services segment includes the effect of interest expense and
foreign exchange gains or losses.
|
|
|
**
|
Reconciling items are
primarily corporate expenses, certain external interest expense,
certain foreign exchange gains and losses, pension and
postretirement benefit costs excluding the service cost component,
and net income attributable to noncontrolling interests.
|
DEERE &
COMPANY STATEMENTS OF CONSOLIDATED INCOME
For the Three and Nine Months Ended July 31, 2022 and August
1, 2021
(In millions of dollars and shares except per share amounts)
Unaudited
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
13,000
|
|
$
|
10,413
|
|
$
|
33,565
|
|
$
|
29,461
|
|
Finance and interest
income
|
|
|
846
|
|
|
825
|
|
|
2,441
|
|
|
2,468
|
|
Other income
|
|
|
256
|
|
|
289
|
|
|
1,035
|
|
|
768
|
|
Total
|
|
|
14,102
|
|
|
11,527
|
|
|
37,041
|
|
|
32,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
9,511
|
|
|
7,574
|
|
|
25,124
|
|
|
21,307
|
|
Research and
development expenses
|
|
|
481
|
|
|
394
|
|
|
1,336
|
|
|
1,137
|
|
Selling, administrative
and general expenses
|
|
|
959
|
|
|
841
|
|
|
2,672
|
|
|
2,448
|
|
Interest
expense
|
|
|
296
|
|
|
244
|
|
|
713
|
|
|
783
|
|
Other operating
expenses
|
|
|
316
|
|
|
324
|
|
|
954
|
|
|
1,033
|
|
Total
|
|
|
11,563
|
|
|
9,377
|
|
|
30,799
|
|
|
26,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
2,539
|
|
|
2,150
|
|
|
6,242
|
|
|
5,989
|
|
Provision for income
taxes
|
|
|
654
|
|
|
491
|
|
|
1,364
|
|
|
1,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group
|
|
|
1,885
|
|
|
1,659
|
|
|
4,878
|
|
|
4,661
|
|
Equity in income of
unconsolidated affiliates
|
|
|
|
|
|
8
|
|
|
8
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
1,885
|
|
|
1,667
|
|
|
4,886
|
|
|
4,682
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
1
|
|
|
|
|
|
1
|
|
|
2
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,884
|
|
$
|
1,667
|
|
$
|
4,885
|
|
$
|
4,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
6.20
|
|
$
|
5.36
|
|
$
|
15.97
|
|
$
|
14.98
|
|
Diluted
|
|
$
|
6.16
|
|
$
|
5.32
|
|
$
|
15.88
|
|
$
|
14.86
|
|
Dividends
declared
|
|
$
|
1.13
|
|
$
|
.90
|
|
$
|
3.23
|
|
$
|
2.56
|
|
Dividends
paid
|
|
$
|
1.05
|
|
$
|
.90
|
|
$
|
3.15
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
304.1
|
|
|
311.0
|
|
|
305.8
|
|
|
312.4
|
|
Diluted
|
|
|
305.7
|
|
|
313.4
|
|
|
307.7
|
|
|
314.9
|
|
|
|
See Condensed Notes to
Interim Consolidated Financial Statements
|
|
DEERE &
COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars) Unaudited
|
|
|
|
|
July 31
|
|
October 31
|
|
August 1
|
|
|
2022
|
|
2021
|
|
2021
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,359
|
|
$
|
8,017
|
|
$
|
7,519
|
Marketable
securities
|
|
|
719
|
|
|
728
|
|
|
688
|
Trade accounts and
notes receivable - net
|
|
|
6,696
|
|
|
4,208
|
|
|
5,268
|
Financing receivables -
net
|
|
|
35,056
|
|
|
33,799
|
|
|
31,449
|
Financing receivables
securitized - net
|
|
|
5,141
|
|
|
4,659
|
|
|
5,401
|
Other
receivables
|
|
|
1,999
|
|
|
1,765
|
|
|
1,702
|
Equipment on operating
leases - net
|
|
|
6,554
|
|
|
6,988
|
|
|
6,982
|
Inventories
|
|
|
9,121
|
|
|
6,781
|
|
|
6,410
|
Property and equipment
- net
|
|
|
5,666
|
|
|
5,820
|
|
|
5,649
|
Goodwill
|
|
|
3,754
|
|
|
3,291
|
|
|
3,148
|
Other intangible assets
- net
|
|
|
1,281
|
|
|
1,275
|
|
|
1,267
|
Retirement
benefits
|
|
|
3,125
|
|
|
3,601
|
|
|
990
|
Deferred income
taxes
|
|
|
1,110
|
|
|
1,037
|
|
|
1,767
|
Other assets
|
|
|
2,236
|
|
|
2,145
|
|
|
2,448
|
Total
Assets
|
|
$
|
86,817
|
|
$
|
84,114
|
|
$
|
80,688
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
14,176
|
|
$
|
10,919
|
|
$
|
10,404
|
Short-term
securitization borrowings
|
|
|
4,920
|
|
|
4,605
|
|
|
5,277
|
Accounts payable and
accrued expenses
|
|
|
12,986
|
|
|
12,348
|
|
|
11,207
|
Deferred income
taxes
|
|
|
561
|
|
|
576
|
|
|
515
|
Long-term
borrowings
|
|
|
32,132
|
|
|
32,888
|
|
|
32,280
|
Retirement benefits and
other liabilities
|
|
|
2,911
|
|
|
4,344
|
|
|
5,272
|
Total
liabilities
|
|
|
67,686
|
|
|
65,680
|
|
|
64,955
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
19,033
|
|
|
18,431
|
|
|
15,731
|
Noncontrolling
interests
|
|
|
3
|
|
|
3
|
|
|
2
|
Total stockholders'
equity
|
|
|
19,036
|
|
|
18,434
|
|
|
15,733
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
86,817
|
|
$
|
84,114
|
|
$
|
80,688
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
DEERE &
COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended July 31, 2022 and August
1, 2021
(In millions of dollars) Unaudited
|
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
4,886
|
|
$
|
4,682
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Provision (credit) for
credit losses
|
|
|
62
|
|
|
(17)
|
Provision for
depreciation and amortization
|
|
|
1,443
|
|
|
1,569
|
Impairment
charges
|
|
|
81
|
|
|
50
|
Share-based
compensation expense
|
|
|
64
|
|
|
64
|
Gain on remeasurement
of previously held equity investment
|
|
|
(326)
|
|
|
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(1)
|
|
|
4
|
Credit for deferred
income taxes
|
|
|
(6)
|
|
|
(271)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes, and
financing receivables related to sales
|
|
|
(2,357)
|
|
|
(444)
|
Inventories
|
|
|
(2,526)
|
|
|
(1,817)
|
Accounts payable and
accrued expenses
|
|
|
(15)
|
|
|
742
|
Accrued income taxes
payable/receivable
|
|
|
82
|
|
|
34
|
Retirement
benefits
|
|
|
(1,014)
|
|
|
13
|
Other
|
|
|
45
|
|
|
(295)
|
Net cash provided by
operating activities
|
|
|
418
|
|
|
4,314
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
15,774
|
|
|
14,480
|
Proceeds from sales of
equipment on operating leases
|
|
|
1,501
|
|
|
1,510
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(18,578)
|
|
|
(17,161)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(488)
|
|
|
(19)
|
Purchases of property
and equipment
|
|
|
(596)
|
|
|
(492)
|
Cost of equipment on
operating leases acquired
|
|
|
(1,717)
|
|
|
(1,210)
|
Collateral on
derivatives – net
|
|
|
(193)
|
|
|
(189)
|
Other
|
|
|
(133)
|
|
|
(21)
|
Net cash used for
investing activities
|
|
|
(4,430)
|
|
|
(3,102)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase in total
short-term borrowings
|
|
|
4,267
|
|
|
929
|
Proceeds from long-term
borrowings
|
|
|
6,281
|
|
|
5,877
|
Payments of long-term
borrowings
|
|
|
(6,578)
|
|
|
(5,172)
|
Proceeds from issuance
of common stock
|
|
|
55
|
|
|
136
|
Repurchases of common
stock
|
|
|
(2,477)
|
|
|
(1,780)
|
Dividends
paid
|
|
|
(971)
|
|
|
(761)
|
Other
|
|
|
(62)
|
|
|
(80)
|
Net cash provided by
(used for) financing activities
|
|
|
515
|
|
|
(851)
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents, and
Restricted Cash
|
|
|
(143)
|
|
|
106
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents, and Restricted
Cash
|
|
|
(3,640)
|
|
|
467
|
Cash, Cash
Equivalents, and Restricted Cash at Beginning of
Period
|
|
|
8,125
|
|
|
7,172
|
Cash, Cash
Equivalents, and Restricted Cash at End of Period
|
|
$
|
4,485
|
|
$
|
7,639
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
|
|
DEERE &
COMPANY
|
|
Condensed Notes to
Interim Consolidated Financial Statements
|
|
(In millions of
dollars) Unaudited
|
|
|
|
(1)
|
Acquisitions
|
|
On February 7, 2022,
the company acquired majority ownership in Kreisel Electric Inc., a
pioneer in the development of immersion-cooled battery technology.
The total cash purchase price, net of cash acquired, was $276
million. Most of the consideration was allocated to Goodwill and
Other intangible assets.
|
|
|
|
On February 28, 2022,
the company acquired full ownership of three Deere-Hitachi joint
venture factories and began new license and supply agreements with
Hitachi Construction Machinery. The two companies also ended their
joint venture manufacturing and marketing agreements. The total
invested capital was $690 million, which consists of net cash
consideration and the fair value of the previously held equity
investment in the joint venture. The fair value of the previous
equity investment created a non-cash gain of $326 million (pretax
and after-tax), which was recorded in Other income and included in
the construction and forestry segment's operating profit. The
invested capital was primarily allocated to Goodwill, Inventories,
and Property and equipment.
|
|
|
|
Special
Items
|
|
As a result of the
events in Russia / Ukraine, the company has suspended shipments to
Russia, which will reduce forecasted revenue for the region, and
initiated a voluntary employee-separation program. The accounting
consequences during the first nine months of 2022 were impairments
of most long-lived assets, an increase in reserves of certain
financial assets, and an accrual for various contractual
uncertainties. No significant reserves were established on trade
receivables or complete goods inventory, as the company continues
to experience strong payment performance and requires prepayment of
existing inventories. However, the situation is fluid, and the
company continues to closely monitor all financial and operational
risks. As of July 31, 2022, the company's net exposure in Russia /
Ukraine was approximately $436 million. Net sales from the
company's Russian operations represented 2 percent of consolidated
annual net sales from 2017 to 2021. A summary of the reserves and
impairments recorded in the first nine months of 2022 follows in
millions of dollars:
|
|
|
Nine Months Ended July
31, 2022
|
|
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
2022
Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory reserve –
Cost of sales
|
|
$
|
8
|
|
|
|
|
$
|
4
|
|
|
|
|
$
|
12
|
|
Fixed asset impairment
– Cost of sales
|
|
|
30
|
|
|
|
|
|
11
|
|
|
|
|
|
41
|
|
Intangible asset
impairment – Cost of sales
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
28
|
|
Allowance for credit
losses – Financing
receivables – SA&G expenses
|
|
|
|
|
|
|
|
|
|
|
$
|
32
|
|
|
32
|
|
Voluntary-separation
program – Cost of sales
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Voluntary-separation
program – SA&G expenses
|
|
|
3
|
|
|
|
|
|
4
|
|
|
1
|
|
|
8
|
|
Contingent liabilities
– Other operating expenses
|
|
|
3
|
|
$
|
1
|
|
|
1
|
|
|
|
|
|
5
|
|
Total Russia/Ukraine
events pretax expense
|
|
$
|
45
|
|
$
|
1
|
|
$
|
48
|
|
$
|
33
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax
impact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
|
Total Russia/Ukraine
events after-tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
119
|
|
In the first quarter of 2022, the company had a one-time payment
related to the ratification of the UAW collective bargaining
agreement, totaling $90 million.
In the third quarter of 2021, the company sold a closed factory
that previously produced small agriculture equipment in
China, resulting in a $27 million pretax gain. During the first quarter
of 2021, the fixed assets in an asphalt plant factory in
Germany were impaired by
$38 million, pretax and after-tax.
The company also continued to assess its manufacturing locations,
resulting in additional long-lived asset impairments of
$12 million pretax. The impairments
were the result of a decline in forecasted financial performance
that indicated it was probable future cash flows would not cover
the carrying amount of the net assets. These impairments were
offset by a favorable indirect tax ruling in Brazil of $58
million pretax.
The following table summarizes the operating profit impact, in
millions of dollars, of the special items recorded for the three
months and nine months ended July 31,
2022 and August 1, 2021:
|
|
Three Months
|
|
Nine Months
|
|
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
2022 Expense
(benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on remeasurement
of
equity investment – Other
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(326)
|
|
|
|
|
$
|
(326)
|
|
Total Russia/Ukraine
events
pretax expense
|
|
$
|
(1)
|
|
|
|
|
$
|
1
|
|
$
|
7
|
|
$
|
7
|
|
$
|
45
|
|
$
|
1
|
|
|
48
|
|
$
|
33
|
|
|
127
|
|
UAW ratification bonus
– Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
|
|
|
9
|
|
|
28
|
|
|
|
|
|
90
|
|
Total
expense (benefit)
|
|
|
(1)
|
|
|
|
|
|
1
|
|
|
7
|
|
|
7
|
|
|
98
|
|
|
10
|
|
|
(250)
|
|
|
33
|
|
|
(109)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Expense
(benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale – Other
income
|
|
|
|
|
$
|
(27)
|
|
|
|
|
|
|
|
|
(27)
|
|
|
|
|
|
(27)
|
|
|
|
|
|
|
|
|
(27)
|
|
Long-lived asset
impairments
– Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
3
|
|
|
42
|
|
|
|
|
|
50
|
|
Brazil indirect tax
–
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(53)
|
|
|
|
|
|
(5)
|
|
|
|
|
|
(58)
|
|
Total
expense (benefit)
|
|
|
|
|
|
(27)
|
|
|
|
|
|
|
|
|
(27)
|
|
|
(48)
|
|
|
(24)
|
|
|
37
|
|
|
|
|
|
(35)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period over period
change
|
|
$
|
(1)
|
|
$
|
27
|
|
$
|
1
|
|
$
|
7
|
|
$
|
34
|
|
$
|
146
|
|
$
|
34
|
|
$
|
(287)
|
|
$
|
33
|
|
$
|
(74)
|
|
|
|
(2)
|
Prior to fiscal year
2021, the operating results of the Wirtgen Group (Wirtgen) were
incorporated into the company's consolidated financial statements
using a one-month lag period. The reporting lag was eliminated
resulting in one additional month of Wirtgen activity in both the
first quarter and year-to-date period of 2021. The effect was an
increase to Net sales of $270 million, which the company considers
immaterial to construction and forestry's annual net
sales.
|
|
|
(3)
|
The calculation of
basic net income per share is based on the average number of shares
outstanding. The calculation of diluted net income per share
recognizes any dilutive effect of share-based
compensation.
|
|
|
(4)
|
The consolidated
financial statements represent the consolidation of all of Deere
& Company's subsidiaries. The supplemental consolidating data
is presented for informational purposes. Transactions between the
Equipment Operations and Financial Services have been eliminated to
arrive at the consolidated financial statements. In the
supplemental consolidating data in Note 5 to the financial
statements, the "Equipment Operations" represents the enterprise
without "Financial Services," which include the company's
production and precision agriculture operations, small agriculture
and turf operations, and construction and forestry operations, and
other corporate assets, liabilities, revenues, and expenses not
reflected within "Financial Services."
|
DEERE &
COMPANY (5) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME
For the Three Months Ended July 31, 2022 and August
1, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
13,000
|
|
$
|
10,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13,000
|
|
$
|
10,413
|
|
|
Finance and interest
income
|
|
|
60
|
|
|
33
|
|
$
|
905
|
|
$
|
867
|
|
$
|
(119)
|
|
$
|
(75)
|
|
|
846
|
|
|
825
|
1
|
|
Other income
|
|
|
228
|
|
|
263
|
|
|
79
|
|
|
96
|
|
|
(51)
|
|
|
(70)
|
|
|
256
|
|
|
289
|
2
|
|
Total
|
|
|
13,288
|
|
|
10,709
|
|
|
984
|
|
|
963
|
|
|
(170)
|
|
|
(145)
|
|
|
14,102
|
|
|
11,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
9,512
|
|
|
7,574
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
9,511
|
|
|
7,574
|
3
|
|
Research and
development expenses
|
|
|
481
|
|
|
394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
481
|
|
|
394
|
|
|
Selling, administrative
and general expenses
|
|
|
805
|
|
|
702
|
|
|
156
|
|
|
141
|
|
|
(2)
|
|
|
(2)
|
|
|
959
|
|
|
841
|
3
|
|
Interest
expense
|
|
|
109
|
|
|
92
|
|
|
223
|
|
|
169
|
|
|
(36)
|
|
|
(17)
|
|
|
296
|
|
|
244
|
4
|
|
Interest compensation
to Financial Services
|
|
|
83
|
|
|
58
|
|
|
|
|
|
|
|
|
(83)
|
|
|
(58)
|
|
|
|
|
|
|
4
|
|
Other operating
expenses
|
|
|
47
|
|
|
32
|
|
|
317
|
|
|
360
|
|
|
(48)
|
|
|
(68)
|
|
|
316
|
|
|
324
|
5
|
|
Total
|
|
|
11,037
|
|
|
8,852
|
|
|
696
|
|
|
670
|
|
|
(170)
|
|
|
(145)
|
|
|
11,563
|
|
|
9,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
|
|
2,251
|
|
|
1,857
|
|
|
288
|
|
|
293
|
|
|
|
|
|
|
|
|
2,539
|
|
|
2,150
|
|
|
Provision for income
taxes
|
|
|
574
|
|
|
425
|
|
|
80
|
|
|
66
|
|
|
|
|
|
|
|
|
654
|
|
|
491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income
Taxes
|
|
|
1,677
|
|
|
1,432
|
|
|
208
|
|
|
227
|
|
|
|
|
|
|
|
|
1,885
|
|
|
1,659
|
|
|
Equity in income (loss)
of unconsolidated affiliates
|
|
|
(1)
|
|
|
8
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
1,676
|
|
|
1,440
|
|
|
209
|
|
|
227
|
|
|
|
|
|
|
|
|
1,885
|
|
|
1,667
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,675
|
|
$
|
1,440
|
|
$
|
209
|
|
$
|
227
|
|
|
|
|
|
|
|
$
|
1,884
|
|
$
|
1,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Elimination of Financial Services'
interest income earned from Equipment Operations.
|
2 Elimination of Equipment
Operations' margin from inventory transferred to equipment on
operating leases.
|
3 Elimination of intercompany service
fees.
|
4 Elimination of Equipment
Operations' interest expense to Financial Services.
|
5 Elimination of Financial Services'
lease depreciation expense related to inventory transferred to
equipment on operating leases.
|
DEERE &
COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF INCOME
For the Nine Months Ended July 31, 2022 and August
1, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
33,565
|
|
$
|
29,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
33,565
|
|
$
|
29,461
|
|
|
Finance and interest
income
|
|
|
131
|
|
|
95
|
|
$
|
2,580
|
|
$
|
2,582
|
|
$
|
(270)
|
|
$
|
(209)
|
|
|
2,441
|
|
|
2,468
|
1
|
|
Other income
|
|
|
1,028
|
|
|
712
|
|
|
271
|
|
|
269
|
|
|
(264)
|
|
|
(213)
|
|
|
1,035
|
|
|
768
|
2
|
|
Total
|
|
|
34,724
|
|
|
30,268
|
|
|
2,851
|
|
|
2,851
|
|
|
(534)
|
|
|
(422)
|
|
|
37,041
|
|
|
32,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
25,126
|
|
|
21,309
|
|
|
|
|
|
|
|
|
(2)
|
|
|
(2)
|
|
|
25,124
|
|
|
21,307
|
3
|
|
Research and
development expenses
|
|
|
1,336
|
|
|
1,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,336
|
|
|
1,137
|
|
|
Selling, administrative
and general expenses
|
|
|
2,215
|
|
|
2,089
|
|
|
463
|
|
|
365
|
|
|
(6)
|
|
|
(6)
|
|
|
2,672
|
|
|
2,448
|
3
|
|
Interest
expense
|
|
|
297
|
|
|
287
|
|
|
493
|
|
|
539
|
|
|
(77)
|
|
|
(43)
|
|
|
713
|
|
|
783
|
4
|
|
Interest compensation
to Financial Services
|
|
|
189
|
|
|
166
|
|
|
|
|
|
|
|
|
(189)
|
|
|
(166)
|
|
|
|
|
|
|
4
|
|
Other operating
expenses
|
|
|
186
|
|
|
140
|
|
|
1,028
|
|
|
1,098
|
|
|
(260)
|
|
|
(205)
|
|
|
954
|
|
|
1,033
|
5
|
|
Total
|
|
|
29,349
|
|
|
25,128
|
|
|
1,984
|
|
|
2,002
|
|
|
(534)
|
|
|
(422)
|
|
|
30,799
|
|
|
26,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
|
|
5,375
|
|
|
5,140
|
|
|
867
|
|
|
849
|
|
|
|
|
|
|
|
|
6,242
|
|
|
5,989
|
|
|
Provision for income
taxes
|
|
|
1,142
|
|
|
1,130
|
|
|
222
|
|
|
198
|
|
|
|
|
|
|
|
|
1,364
|
|
|
1,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income
Taxes
|
|
|
4,233
|
|
|
4,010
|
|
|
645
|
|
|
651
|
|
|
|
|
|
|
|
|
4,878
|
|
|
4,661
|
|
|
Equity in income of
unconsolidated affiliates
|
|
|
4
|
|
|
18
|
|
|
4
|
|
|
3
|
|
|
|
|
|
|
|
|
8
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
4,237
|
|
|
4,028
|
|
|
649
|
|
|
654
|
|
|
|
|
|
|
|
|
4,886
|
|
|
4,682
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
1
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
2
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
4,236
|
|
$
|
4,026
|
|
$
|
649
|
|
$
|
654
|
|
|
|
|
|
|
|
$
|
4,885
|
|
$
|
4,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Elimination of Financial Services'
interest income earned from Equipment Operations.
|
2 Elimination of Equipment
Operations' margin from inventory transferred to equipment on
operating leases.
|
3 Elimination of intercompany service
fees.
|
4 Elimination of Equipment
Operations' interest expense to Financial Services.
|
5 Elimination of Financial Services'
lease depreciation expense related to inventory transferred to
equipment on operating leases.
|
DEERE &
COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEETS
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
Jul 31
|
|
Oct 31
|
|
Aug 1
|
|
Jul 31
|
|
Oct 31
|
|
Aug 1
|
|
Jul 31
|
|
Oct 31
|
|
Aug 1
|
|
Jul 31
|
|
Oct 31
|
|
Aug 1
|
|
|
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,540
|
|
$
|
7,188
|
|
$
|
6,638
|
|
$
|
819
|
|
$
|
829
|
|
$
|
881
|
|
|
|
|
|
|
|
|
|
|
$
|
4,359
|
|
$
|
8,017
|
|
$
|
7,519
|
|
|
Marketable
securities
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
717
|
|
|
725
|
|
|
685
|
|
|
|
|
|
|
|
|
|
|
|
719
|
|
|
728
|
|
|
688
|
|
|
Receivables from
Financial
Services
|
|
|
5,055
|
|
|
5,564
|
|
|
5,913
|
|
|
|
|
|
|
|
|
|
|
$
|
(5,055)
|
|
$
|
(5,564)
|
|
$
|
(5,913)
|
|
|
|
|
|
|
|
|
|
6
|
|
Trade accounts and
notes
receivable - net
|
|
|
1,342
|
|
|
1,155
|
|
|
1,127
|
|
|
6,738
|
|
|
3,895
|
|
|
5,319
|
|
|
(1,384)
|
|
|
(842)
|
|
|
(1,178)
|
|
|
6,696
|
|
|
4,208
|
|
|
5,268
|
7
|
|
Financing receivables -
net
|
|
|
45
|
|
|
73
|
|
|
89
|
|
|
35,011
|
|
|
33,726
|
|
|
31,360
|
|
|
|
|
|
|
|
|
|
|
|
35,056
|
|
|
33,799
|
|
|
31,449
|
|
|
Financing
receivables
securitized - net
|
|
|
2
|
|
|
10
|
|
|
13
|
|
|
5,139
|
|
|
4,649
|
|
|
5,388
|
|
|
|
|
|
|
|
|
|
|
|
5,141
|
|
|
4,659
|
|
|
5,401
|
|
|
Other
receivables
|
|
|
1,676
|
|
|
1,629
|
|
|
1,545
|
|
|
371
|
|
|
159
|
|
|
171
|
|
|
(48)
|
|
|
(23)
|
|
|
(14)
|
|
|
1,999
|
|
|
1,765
|
|
|
1,702
|
7
|
|
Equipment on operating
leases - net
|
|
|
|
|
|
|
|
|
|
|
|
6,554
|
|
|
6,988
|
|
|
6,982
|
|
|
|
|
|
|
|
|
|
|
|
6,554
|
|
|
6,988
|
|
|
6,982
|
|
|
Inventories
|
|
|
9,121
|
|
|
6,781
|
|
|
6,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,121
|
|
|
6,781
|
|
|
6,410
|
|
|
Property and equipment
- net
|
|
|
5,630
|
|
|
5,783
|
|
|
5,612
|
|
|
36
|
|
|
37
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
5,666
|
|
|
5,820
|
|
|
5,649
|
|
|
Goodwill
|
|
|
3,754
|
|
|
3,291
|
|
|
3,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,754
|
|
|
3,291
|
|
|
3,148
|
|
|
Other intangible assets
- net
|
|
|
1,281
|
|
|
1,275
|
|
|
1,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,281
|
|
|
1,275
|
|
|
1,267
|
|
|
Retirement
benefits
|
|
|
3,062
|
|
|
3,539
|
|
|
986
|
|
|
65
|
|
|
64
|
|
|
63
|
|
|
(2)
|
|
|
(2)
|
|
|
(59)
|
|
|
3,125
|
|
|
3,601
|
|
|
990
|
8
|
|
Deferred income
taxes
|
|
|
1,248
|
|
|
1,215
|
|
|
1,959
|
|
|
48
|
|
|
53
|
|
|
59
|
|
|
(186)
|
|
|
(231)
|
|
|
(251)
|
|
|
1,110
|
|
|
1,037
|
|
|
1,767
|
9
|
|
Other assets
|
|
|
1,727
|
|
|
1,646
|
|
|
1,747
|
|
|
510
|
|
|
499
|
|
|
702
|
|
|
(1)
|
|
|
|
|
|
(1)
|
|
|
2,236
|
|
|
2,145
|
|
|
2,448
|
|
|
Total
Assets
|
|
$
|
37,485
|
|
$
|
39,152
|
|
$
|
36,457
|
|
$
|
56,008
|
|
$
|
51,624
|
|
$
|
51,647
|
|
$
|
(6,676)
|
|
$
|
(6,662)
|
|
$
|
(7,416)
|
|
$
|
86,817
|
|
$
|
84,114
|
|
$
|
80,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
471
|
|
$
|
1,509
|
|
$
|
1,376
|
|
$
|
13,705
|
|
$
|
9,410
|
|
$
|
9,028
|
|
|
|
|
|
|
|
|
|
|
$
|
14,176
|
|
$
|
10,919
|
|
$
|
10,404
|
|
|
Short-term
securitization borrowings
|
|
|
2
|
|
|
10
|
|
|
12
|
|
|
4,918
|
|
|
4,595
|
|
|
5,265
|
|
|
|
|
|
|
|
|
|
|
|
4,920
|
|
|
4,605
|
|
|
5,277
|
|
|
Payables to Equipment
Operations
|
|
|
|
|
|
|
|
|
|
|
|
5,055
|
|
|
5,564
|
|
|
5,913
|
|
$
|
(5,055)
|
|
$
|
(5,564)
|
|
$
|
(5,913)
|
|
|
|
|
|
|
|
|
|
6
|
|
Accounts payable
and
accrued expenses
|
|
|
11,925
|
|
|
11,198
|
|
|
10,484
|
|
|
2,494
|
|
|
2,015
|
|
|
1,916
|
|
|
(1,433)
|
|
|
(865)
|
|
|
(1,193)
|
|
|
12,986
|
|
|
12,348
|
|
|
11,207
|
7
|
|
Deferred income
taxes
|
|
|
436
|
|
|
438
|
|
|
371
|
|
|
311
|
|
|
369
|
|
|
395
|
|
|
(186)
|
|
|
(231)
|
|
|
(251)
|
|
|
561
|
|
|
576
|
|
|
515
|
9
|
|
Long-term
borrowings
|
|
|
8,481
|
|
|
8,915
|
|
|
8,982
|
|
|
23,651
|
|
|
23,973
|
|
|
23,298
|
|
|
|
|
|
|
|
|
|
|
|
32,132
|
|
|
32,888
|
|
|
32,280
|
|
|
Retirement benefits
and
other liabilities
|
|
|
2,799
|
|
|
4,239
|
|
|
5,219
|
|
|
114
|
|
|
107
|
|
|
112
|
|
|
(2)
|
|
|
(2)
|
|
|
(59)
|
|
|
2,911
|
|
|
4,344
|
|
|
5,272
|
8
|
|
Total
liabilities
|
|
|
24,114
|
|
|
26,309
|
|
|
26,444
|
|
|
50,248
|
|
|
46,033
|
|
|
45,927
|
|
|
(6,676)
|
|
|
(6,662)
|
|
|
(7,416)
|
|
|
67,686
|
|
|
65,680
|
|
|
64,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Deere &
Company
stockholders' equity
|
|
|
19,033
|
|
|
18,431
|
|
|
15,731
|
|
|
5,760
|
|
|
5,591
|
|
|
5,720
|
|
|
(5,760)
|
|
|
(5,591)
|
|
|
(5,720)
|
|
|
19,033
|
|
|
18,431
|
|
|
15,731
|
10
|
|
Noncontrolling
interests
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
Financial Services
equity
|
|
|
(5,760)
|
|
|
(5,591)
|
|
|
(5,720)
|
|
|
|
|
|
|
|
|
|
|
|
5,760
|
|
|
5,591
|
|
|
5,720
|
|
|
|
|
|
|
|
|
|
10
|
|
Adjusted total
stockholders' equity
|
|
|
13,276
|
|
|
12,843
|
|
|
10,013
|
|
|
5,760
|
|
|
5,591
|
|
|
5,720
|
|
|
|
|
|
|
|
|
|
|
|
19,036
|
|
|
18,434
|
|
|
15,733
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
37,485
|
|
$
|
39,152
|
|
$
|
36,457
|
|
$
|
56,008
|
|
$
|
51,624
|
|
$
|
51,647
|
|
$
|
(6,676)
|
|
$
|
(6,662)
|
|
$
|
(7,416)
|
|
$
|
86,817
|
|
$
|
84,114
|
|
$
|
80,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 net pension assets / liabilities.
|
9
Reclassification of deferred tax assets / liabilities in the same
taxing jurisdictions.
|
10 Elimination of Financial Services'
equity.
|
DEERE &
COMPANY SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF CASH FLOWS
For the Nine Months Ended July 31, 2022 and August
1, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
4,237
|
|
$
|
4,028
|
|
$
|
649
|
|
$
|
654
|
|
|
|
|
|
|
|
$
|
4,886
|
|
$
|
4,682
|
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (credit) for
credit losses
|
|
|
|
|
|
5
|
|
|
62
|
|
|
(22)
|
|
|
|
|
|
|
|
|
62
|
|
|
(17)
|
|
|
Provision for
depreciation and amortization
|
|
|
806
|
|
|
803
|
|
|
790
|
|
|
866
|
|
$
|
(153)
|
|
$
|
(100)
|
|
|
1,443
|
|
|
1,569
|
11
|
|
Impairment
charges
|
|
|
81
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
50
|
|
|
Share-based
compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64
|
|
|
64
|
|
|
64
|
|
|
64
|
12
|
|
Gain on remeasurement
of previously held equity investment
|
|
|
(326)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(326)
|
|
|
|
|
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
370
|
|
|
246
|
|
|
(3)
|
|
|
(2)
|
|
|
(368)
|
|
|
(240)
|
|
|
(1)
|
|
|
4
|
13
|
|
Provision (credit) for
deferred income taxes
|
|
|
44
|
|
|
(218)
|
|
|
(50)
|
|
|
(53)
|
|
|
|
|
|
|
|
|
(6)
|
|
|
(271)
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade, notes, and
financing receivables related to sales
|
|
|
(215)
|
|
|
(73)
|
|
|
|
|
|
|
|
|
(2,142)
|
|
|
(371)
|
|
|
(2,357)
|
|
|
(444)
|
14, 16,
17
|
|
Inventories
|
|
|
(2,415)
|
|
|
(1,367)
|
|
|
|
|
|
|
|
|
(111)
|
|
|
(450)
|
|
|
(2,526)
|
|
|
(1,817)
|
15
|
|
Accounts payable and
accrued expenses
|
|
|
491
|
|
|
860
|
|
|
36
|
|
|
(20)
|
|
|
(542)
|
|
|
(98)
|
|
|
(15)
|
|
|
742
|
16
|
|
Accrued income taxes
payable/receivable
|
|
|
52
|
|
|
43
|
|
|
30
|
|
|
(9)
|
|
|
|
|
|
|
|
|
82
|
|
|
34
|
|
|
Retirement
benefits
|
|
|
(1,020)
|
|
|
8
|
|
|
6
|
|
|
5
|
|
|
|
|
|
|
|
|
(1,014)
|
|
|
13
|
|
|
Other
|
|
|
101
|
|
|
(200)
|
|
|
(105)
|
|
|
26
|
|
|
49
|
|
|
(121)
|
|
|
45
|
|
|
(295)
|
11, 12,
15
|
|
Net cash provided by
operating activities
|
|
|
2,206
|
|
|
4,185
|
|
|
1,415
|
|
|
1,445
|
|
|
(3,203)
|
|
|
(1,316)
|
|
|
418
|
|
|
4,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related
to sales)
|
|
|
|
|
|
|
|
|
16,927
|
|
|
15,704
|
|
|
(1,153)
|
|
|
(1,224)
|
|
|
15,774
|
|
|
14,480
|
14
|
|
Proceeds from sales of
equipment on operating leases
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,510
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,510
|
|
|
Cost of receivables
acquired (excluding receivables related
to sales)
|
|
|
|
|
|
|
|
|
(19,069)
|
|
|
(18,349)
|
|
|
491
|
|
|
1,188
|
|
|
(18,578)
|
|
|
(17,161)
|
14
|
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(488)
|
|
|
(19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(488)
|
|
|
(19)
|
|
|
Purchases of property
and equipment
|
|
|
(595)
|
|
|
(491)
|
|
|
(1)
|
|
|
(1)
|
|
|
|
|
|
|
|
|
(596)
|
|
|
(492)
|
|
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(1,868)
|
|
|
(1,818)
|
|
|
151
|
|
|
608
|
|
|
(1,717)
|
|
|
(1,210)
|
15
|
|
Increase in trade and
wholesale receivables
|
|
|
|
|
|
|
|
|
(3,318)
|
|
|
(481)
|
|
|
3,318
|
|
|
481
|
|
|
|
|
|
|
14
|
|
Collateral on
derivatives – net
|
|
|
5
|
|
|
(4)
|
|
|
(198)
|
|
|
(185)
|
|
|
|
|
|
|
|
|
(193)
|
|
|
(189)
|
|
|
Other
|
|
|
(87)
|
|
|
(10)
|
|
|
(74)
|
|
|
(42)
|
|
|
28
|
|
|
31
|
|
|
(133)
|
|
|
(21)
|
13,
17
|
|
Net cash used for
investing activities
|
|
|
(1,165)
|
|
|
(524)
|
|
|
(6,100)
|
|
|
(3,662)
|
|
|
2,835
|
|
|
1,084
|
|
|
(4,430)
|
|
|
(3,102)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in
total short-term borrowings
|
|
|
58
|
|
|
(93)
|
|
|
4,209
|
|
|
1,022
|
|
|
|
|
|
|
|
|
4,267
|
|
|
929
|
|
|
Change in intercompany
receivables/payables
|
|
|
70
|
|
|
(624)
|
|
|
(70)
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term
borrowings
|
|
|
137
|
|
|
|
|
|
6,144
|
|
|
5,877
|
|
|
|
|
|
|
|
|
6,281
|
|
|
5,877
|
|
|
Payments of long-term
borrowings
|
|
|
(1,372)
|
|
|
(71)
|
|
|
(5,206)
|
|
|
(5,101)
|
|
|
|
|
|
|
|
|
(6,578)
|
|
|
(5,172)
|
|
|
Proceeds from issuance
of common stock
|
|
|
55
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
136
|
|
|
Repurchases of common
stock
|
|
|
(2,477)
|
|
|
(1,780)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,477)
|
|
|
(1,780)
|
|
|
Dividends
paid
|
|
|
(971)
|
|
|
(761)
|
|
|
(368)
|
|
|
(240)
|
|
|
368
|
|
|
240
|
|
|
(971)
|
|
|
(761)
|
13
|
|
Other
|
|
|
(39)
|
|
|
(50)
|
|
|
(23)
|
|
|
(22)
|
|
|
|
|
|
(8)
|
|
|
(62)
|
|
|
(80)
|
13
|
|
Net cash provided by
(used for) financing activities
|
|
|
(4,539)
|
|
|
(3,243)
|
|
|
4,686
|
|
|
2,160
|
|
|
368
|
|
|
232
|
|
|
515
|
|
|
(851)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash, Cash
Equivalents, and Restricted Cash
|
|
|
(148)
|
|
|
77
|
|
|
5
|
|
|
29
|
|
|
|
|
|
|
|
|
(143)
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents, and
Restricted Cash
|
|
|
(3,646)
|
|
|
495
|
|
|
6
|
|
|
(28)
|
|
|
|
|
|
|
|
|
(3,640)
|
|
|
467
|
|
|
Cash, Cash
Equivalents, and Restricted Cash at
Beginning of Period
|
|
|
7,200
|
|
|
6,156
|
|
|
925
|
|
|
1,016
|
|
|
|
|
|
|
|
|
8,125
|
|
|
7,172
|
|
|
Cash, Cash
Equivalents, and Restricted Cash at
End of Period
|
|
$
|
3,554
|
|
$
|
6,651
|
|
$
|
931
|
|
$
|
988
|
|
|
|
|
|
|
|
$
|
4,485
|
|
$
|
7,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, and capital investments in Financial Services from the
Equipment Operations.
|
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.
|
17
|
Elimination and
reclassification of the effects of Financial Services partial
financing of the construction and forestry retail locations sales
and subsequent collection of those amounts.
|
DEERE & COMPANY
OTHER FINANCIAL INFORMATION
The company evaluates its business results on the basis of
accounting principles generally accepted in the United States. In addition, it uses a
metric referred to as Shareholder Value Added (SVA), which
management believes is an appropriate measure for the performance
of its businesses. SVA is, in effect, the pretax profit left over
after subtracting the cost of enterprise capital. The company is
aiming for a sustained creation of SVA and is using this metric for
various performance goals. Certain compensation is also determined
on the basis of performance using this measure. For purposes of
determining SVA, each of the equipment segments is assessed a
pretax cost of assets, which on an annual basis is approximately 12
percent of the segment's average identifiable operating assets
during the applicable period with inventory at standard cost.
Management believes that valuing inventories at standard cost more
closely approximates the current cost of inventory and the
company's investment in the asset. The Financial Services segment
is assessed an annual pretax cost of approximately 13 percent of
the segment's average equity. The cost of assets or equity, as
applicable, is deducted from the operating profit or added to the
operating loss of each segment to determine the amount of SVA.
|
|
Equipment
|
Production
&
|
Small Ag
|
Construction
|
For the Nine Months
Ended
|
|
Operations
|
Precision Ag
|
& Turf
|
&
Forestry
|
|
|
Jul 31
|
Aug 1
|
Jul 31
|
Aug 1
|
Jul 31
|
Aug 1
|
Jul 31
|
Aug 1
|
Dollars in millions
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Net Sales
|
|
$
|
33,565
|
|
$
|
29,461
|
|
$
|
14,568
|
|
$
|
11,848
|
|
$
|
9,836
|
|
$
|
9,051
|
|
$
|
9,161
|
|
$
|
8,562
|
|
Average Identifiable
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
19,283
|
|
$
|
16,496
|
|
$
|
8,223
|
|
$
|
6,518
|
|
$
|
4,330
|
|
$
|
3,558
|
|
$
|
6,730
|
|
$
|
6,420
|
|
With Inventories at
Standard Cost
|
|
|
20,872
|
|
|
17,877
|
|
|
9,017
|
|
|
7,205
|
|
|
4,788
|
|
|
3,988
|
|
|
7,067
|
|
|
6,684
|
|
Operating
Profit
|
|
$
|
5,688
|
|
$
|
5,476
|
|
$
|
2,646
|
|
$
|
2,557
|
|
$
|
1,443
|
|
$
|
1,699
|
|
$
|
1,599
|
|
$
|
1,220
|
|
Percent of Net
Sales
|
|
|
16.9
|
%
|
|
18.6
|
%
|
|
18.2
|
%
|
|
21.6
|
%
|
|
14.7
|
%
|
|
18.8
|
%
|
|
17.5
|
%
|
|
14.2
|
%
|
Operating Return on
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
|
29.5
|
%
|
|
33.2
|
%
|
|
32.2
|
%
|
|
39.2
|
%
|
|
33.3
|
%
|
|
47.8
|
%
|
|
23.8
|
%
|
|
19.0
|
%
|
With Inventories at
Standard Cost
|
|
|
27.3
|
%
|
|
30.6
|
%
|
|
29.3
|
%
|
|
35.5
|
%
|
|
30.1
|
%
|
|
42.6
|
%
|
|
22.6
|
%
|
|
18.3
|
%
|
SVA Cost of
Assets
|
|
$
|
(1,878)
|
|
$
|
(1,609)
|
|
$
|
(811)
|
|
$
|
(648)
|
|
$
|
(431)
|
|
$
|
(359)
|
|
$
|
(636)
|
|
$
|
(602)
|
|
SVA
|
|
|
3,810
|
|
|
3,867
|
|
|
1,835
|
|
|
1,909
|
|
|
1,012
|
|
|
1,340
|
|
|
963
|
|
|
618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended
|
|
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jul 31
|
Aug 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable
to Deere & Company
|
|
$
|
649
|
|
$
|
654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
|
5,706
|
|
|
5,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
11.4
|
%
|
|
12.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
864
|
|
$
|
844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
|
(576)
|
|
|
(531)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
|
288
|
|
|
313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Deere & Company