• Strong execution contributes to 34% net sales gain and higher earnings.
  • Market environment supported by positive fundamentals and healthy demand for farm and construction equipment.
  • Full-year net income forecast increased to $8.75 billion to $9.25 billion.

MOLINE, Ill., Feb. 17, 2023 /CNW/ -- Deere & Company reported net income of $1.959 billion for the first quarter ended January 29, 2023, or $6.55 per share, compared with net income of $903 million, or $2.92 per share, for the quarter ended January 30, 2022.

Worldwide net sales and revenues increased 32 percent, to $12.652 billion, in the most recent quarter. Net sales were $11.402 billion for the quarter, compared with $8.531 billion in 2022.

"Deere's first-quarter performance is a reflection of favorable market fundamentals and healthy demand for our equipment as well as solid execution on the part of our employees, dealers, and suppliers to get products to our customers," said John C. May, chairman and chief executive officer. "We are, at the same time, benefiting from an improved operating environment, which is contributing to higher levels of production." 

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2023 is forecast to be in a range of $8.75 billion to $9.25 billion.

"Deere is looking forward to another strong year on the basis of positive fundamentals, low machine inventories, and a continuation of solid execution," May said. "We are proud of our recent performance and remain fully committed to helping our customers do their jobs in a more profitable, productive, and sustainable way. We have confidence in our ability to execute on our leap ambitions and run our businesses with real purpose, real technology, and real impact."

Deere & Company


First Quarter

$ in millions, except per share amounts


2023


2022


% Change

Net sales and revenues


$

12,652


$

9,569


32 %

Net income


$

1,959


$

903


117 %

Fully diluted EPS


$

6.55


$

2.92



Results for the prior period were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture


First Quarter

$ in millions


2023


2022


% Change

Net sales


$

5,198


$

3,356


55 %

Operating profit


$

1,208


$

296


308 %

Operating margin



23.2 %



8.8 %



Production and precision agriculture sales increased for the quarter as a result of higher shipment volumes and price realization. Operating profit improved primarily due to price realization and improved shipment volume / mix, partially offset by higher production costs and increased SA&G and R&D expenses. UAW contract-ratification bonus costs affected the prior period.

 

Small Agriculture & Turf


First Quarter

$ in millions


2023


2022


% Change

Net sales


$

3,001


$

2,631


14 %

Operating profit


$

447


$

371


20 %

Operating margin



14.9 %



14.1 %



Small agriculture and turf sales increased for the quarter due to price realization and higher shipment volumes, partially offset by the negative effects of foreign currency translation. Operating profit improved primarily as a result of price realization and improved shipment volumes. These items were partially offset by higher production costs, increased SA&G and R&D expenses, and the unfavorable effects of foreign currency exchange.

 

Construction & Forestry


First Quarter

$ in millions


2023


2022


% Change

Net sales


$

3,203


$

2,544


26 %

Operating profit


$

625


$

272


130 %

Operating margin



19.5 %



10.7 %



Construction and forestry sales moved higher for the quarter primarily due to higher shipment volumes and price realization, partially offset by the negative effects of foreign currency translation. Operating profit improved due to price realization and improved shipment volumes, partially offset by higher production costs. UAW contract-ratification bonus costs affected the prior period.

 

Financial Services


First Quarter

$ in millions


2023


2022


% Change

Net income


$

185


$

231


-20 %

Financial services net income for the quarter decreased mainly due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions, partially offset by income earned on higher average portfolio balances.

Industry Outlook for Fiscal 2023


Agriculture & Turf




U.S. & Canada:




Large Ag



Up 5 to 10%

Small Ag & Turf



Down ~ 5%

Europe



Flat to Up 5%

South America (Tractors & Combines)



Flat to Up 5%

Asia



Down moderately





Construction & Forestry




U.S. & Canada:




Construction Equipment



Flat to Up 5%

Compact Construction Equipment



Flat to Up 5%

Global Forestry



Flat

Global Roadbuilding



Flat

 

Deere Segment Outlook for Fiscal 2023


Currency


Price

$ in millions


Net Sales


Translation


Realization

Production & Precision Ag


Up ~ 20%


0 %


+14 %

Small Ag & Turf


Flat to Up 5%


0 %


+8 %

Construction & Forestry


Up 10 to 15%


0 %


+9 %








Financial Services


Net Income


$ 820



Financial Services. Fiscal-year 2023 net income attributable to Deere & Company for the financial services operations is forecast to be $820 million. Results are expected to be lower than fiscal year 2022 due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions. These factors are expected to be partially offset by income earned on a higher average portfolio. The outlook decreased from the previous forecast provided on November 23, 2022 due to further compression in financing spreads.

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.



First Quarter

$ in millions


2023


2022


% Change

Revenue


$

821


$

643


28 %

Net income


$

147


$

190


-23 %

Ending portfolio balance


$

47,227


$

40,353


17 %

Net income for the quarter was lower than the same period in 2022 primarily due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions, partially offset by income earned on higher average portfolio balances.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section 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.

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. Many factors could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

  • changes in U.S. and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;
  • political, economic, and social instability of the geographies in which the company operates;
  • wars and other conflicts, including the current conflict between Russia and Ukraine, and natural disasters;
  • adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and liquidity constraints;
  • growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);
  • the ability to execute business strategies, including the company's Smart Industrial operating model, Leap Ambitions, and mergers and acquisitions;
  • the ability to understand and meet its customers' changing expectations and demand for John Deere products;
  • accurately forecasting customer demand for products and services and adequately managing inventory;
  • changes to governmental communications channels (radio frequency technology);
  • gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions;
  • the company's ability to adapt in highly competitive markets;
  • dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;
  • changes in climate patterns and unfavorable weather events;
  • higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products;
  • changes in the company's credit ratings, and failure to comply with financial covenants in credit agreements could impact access to funding;
  • availability and price of raw materials, components, and whole goods;
  • delays or disruptions in the company's supply chain;
  • labor relations and contracts, including work stoppages and other disruptions;
  • the ability to attract, develop, engage, and retain qualified personnel;
  • security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its products;
  • loss of or challenges to intellectual property rights;
  • compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;
  • legislation introduced or enacted that could affect the company's business model and intellectual property, such as so-called right to repair or right to modify legislation;
  • investigations, claims, lawsuits, or other legal proceedings;
  • events that damage the company's reputation or brand;
  • world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs (e.g., fertilizer), and availability of transport for crops; and
  • housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

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 our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).

 

DEERE & COMPANY
FIRST QUARTER 2023 PRESS RELEASE
(In millions of dollars) Unaudited



Three Months Ended



January 29


January 30


%



2023


2022


Change

Net sales and revenues:









Production & precision ag net sales


$

5,198


$

3,356


+55

Small ag & turf net sales



3,001



2,631


+14

Construction & forestry net sales



3,203



2,544


+26

Financial services revenues



1,040



870


+20

Other revenues



210



168


+25

Total net sales and revenues


$

12,652


$

9,569


+32










Operating profit: *









Production & precision ag


$

1,208


$

296


+308

Small ag & turf



447



371


+20

Construction & forestry



625



272


+130

Financial services



238



296


-20

Total operating profit



2,518



1,235


+104

Reconciling items **



(22)



(82)


-73

Income taxes



(537)



(250)


+115

Net income attributable to Deere & Company


$

1,959


$

903


+117



*

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 Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars and shares except per share amounts) Unaudited



2023


2022

Net Sales and Revenues







Net sales


$

11,402


$

8,531

Finance and interest income



994



800

Other income



256



238

Total



12,652



9,569








Costs and Expenses







Cost of sales



7,934



6,695

Research and development expenses



495



402

Selling, administrative and general expenses



952



781

Interest expense



479



229

Other operating expenses



299



311

Total



10,159



8,418








Income of Consolidated Group before Income Taxes



2,493



1,151

Provision for income taxes



537



250








Income of Consolidated Group



1,956



901

Equity in income of unconsolidated affiliates



1



3








Net Income



1,957



904

Less: Net income (loss) attributable to noncontrolling interests



(2)



1

Net Income Attributable to Deere & Company


$

1,959


$

903








Per Share Data







Basic


$

6.58


$

2.94

Diluted


$

6.55


$

2.92

Dividends declared


$

1.20


$

1.05

Dividends paid


$

1.13


$

1.05








Average Shares Outstanding







Basic



297.6



307.4

Diluted



299.1



309.4


See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars) Unaudited



January 29


October 30


January 30



2023


2022


2022

Assets










Cash and cash equivalents


$

3,976


$

4,774


$

4,472

Marketable securities



852



734



735

Trade accounts and notes receivable - net



7,609



6,410



4,855

Financing receivables - net



36,882



36,634



33,191

Financing receivables securitized - net



5,089



5,936



3,516

Other receivables



1,992



2,492



1,936

Equipment on operating leases - net



6,502



6,623



6,624

Inventories



10,056



8,495



7,935

Property and equipment - net



6,212



6,056



5,665

Goodwill



3,891



3,687



3,192

Other intangible assets - net



1,255



1,218



1,209

Retirement benefits



3,793



3,730



3,158

Deferred income taxes



914



824



923

Other assets



2,597



2,417



2,203

Total Assets


$

91,620


$

90,030


$

79,614











Liabilities and Stockholders' Equity




















Liabilities










Short-term borrowings


$

14,129


$

12,592


$

10,990

Short-term securitization borrowings



4,864



5,711



3,482

Accounts payable and accrued expenses



13,108



14,822



10,651

Deferred income taxes



519



495



556

Long-term borrowings



35,071



33,596



32,838

Retirement benefits and other liabilities



2,493



2,457



3,289

Total liabilities



70,184



69,673



61,806











Redeemable noncontrolling interest



100



92














Stockholders' Equity










Total Deere & Company stockholders' equity



21,332



20,262



17,804

Noncontrolling interests



4



3



4

Total stockholders' equity



21,336



20,265



17,808

Total Liabilities and Stockholders' Equity


$

91,620


$

90,030


$

79,614



See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited



2023


2022

Cash Flows from Operating Activities







Net income


$

1,957


$

904

Adjustments to reconcile net income to net cash used for operating activities:







Provision (credit) for credit losses



(130)




Provision for depreciation and amortization



494



486

Share-based compensation expense



23



18

Provision (credit) for deferred income taxes



(56)



210

Changes in assets and liabilities:







Trade, notes, and financing receivables related to sales



(1,015)



(106)

Inventories



(1,279)



(1,297)

Accounts payable and accrued expenses



(1,577)



(1,554)

Accrued income taxes payable/receivable



199



(184)

Retirement benefits



(48)



(1,010)

Other



186



(20)

Net cash used for operating activities



(1,246)



(2,553)








Cash Flows from Investing Activities







Collections of receivables (excluding receivables related to sales)



7,198



6,435

Proceeds from sales of equipment on operating leases



497



479

Cost of receivables acquired (excluding receivables related to sales)



(6,322)



(5,603)

Acquisitions of businesses, net of cash acquired






(24)

Purchases of property and equipment



(315)



(193)

Cost of equipment on operating leases acquired



(497)



(391)

Collateral on derivatives - net



345



(13)

Other



(146)



(42)

Net cash provided by investing activities



760



648








Cash Flows from Financing Activities







Increase (decrease) in total short-term borrowings



697



(1,018)

Proceeds from long-term borrowings



2,505



2,353

Payments of long-term borrowings



(1,925)



(1,940)

Proceeds from issuance of common stock



21



11

Repurchases of common stock



(1,257)



(623)

Dividends paid



(341)



(327)

Other



(39)



(33)

Net cash used for financing activities



(339)



(1,577)








Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash



62



(74)








Net Decrease in Cash, Cash Equivalents, and Restricted Cash



(763)



(3,556)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period



4,941



8,125

Cash, Cash Equivalents, and Restricted Cash at End of Period


$

4,178


$

4,569



See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY

Condensed Notes to Interim Consolidated Financial Statements

(In millions of dollars) Unaudited



(1)

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.


















Production &
Precision Ag


Small Ag
& Turf


Construction
& Forestry


Total


UAW ratification bonus – Cost of sales


$

53


$

9


$

28


$

90



(2)

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.



(3)

The consolidated financial statements represent the consolidation of all 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 4 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
(4) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited




EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




2023


2022


2023


2022


2023


2022


2023


2022


Net Sales and Revenues


























Net sales


$

11,402


$

8,531














$

11,402


$

8,531


Finance and interest income



114



34


$

1,067


$

829


$

(187)


$

(63)



994



800

1

Other income



234



217



177



87



(155)



(66)



256



238

2, 3

Total



11,750



8,782



1,244



916



(342)



(129)



12,652



9,569




























Costs and Expenses


























Cost of sales



7,940



6,696









(6)



(1)



7,934



6,695

4

Research and development expenses



495



402















495



402


Selling, administrative and general expenses



783



657



172



126



(3)



(2)



952



781

4

Interest expense



101



90



442



158



(64)



(19)



479



229

5

Interest compensation to Financial Services



123



44









(123)



(44)







5

Other operating expenses



53



39



392



335



(146)



(63)



299



311

6, 7

Total



9,495



7,928



1,006



619



(342)



(129)



10,159



8,418




























Income before Income Taxes



2,255



854



238



297









2,493



1,151


Provision for income taxes



483



182



54



68









537



250




























Income after Income Taxes



1,772



672



184



229









1,956



901


Equity in income of unconsolidated affiliates






1



1



2









1



3




























Net Income



1,772



673



185



231









1,957



904


Less: Net income (loss) attributable to noncontrolling interests



(2)



1















(2)



1


Net Income Attributable to Deere & Company


$

1,774


$

672


$

185


$

231








$

1,959


$

903






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 Financial Services' income related to intercompany guarantees of investments in certain international markets and intercompany service revenue.

4

Elimination of intercompany service fees.

5

Elimination of Equipment Operations' interest expense to Financial Services.

6

Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

7

Elimination of Equipment Operations' expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

 

DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEETS
(In millions of dollars) Unaudited




EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




Jan 29


Oct 30


Jan 30


Jan 29


Oct 30


Jan 30


Jan 29


Oct 30


Jan 30


Jan 29


Oct 30


Jan 30




2023


2022


2022


2023


2022


2022


2023


2022


2022


2023


2022


2022


Assets






































Cash and cash equivalents


$

2,665


$

3,767


$

3,596


$

1,311


$

1,007


$

876











$

3,976


$

4,774


$

4,472


Marketable securities



18



61



2



834



673



733












852



734



735


Receivables from Financial Services



5,348



6,569



5,307











$

(5,348)


$

(6,569)


$

(5,307)










8

Trade accounts and notes receivable - net



1,342



1,273



996



7,827



6,434



4,843



(1,560)



(1,297)



(984)



7,609



6,410



4,855

9

Financing receivables - net



51



47



56



36,831



36,587



33,135












36,882



36,634



33,191


Financing receivables securitized - net









9



5,089



5,936



3,507












5,089



5,936



3,516


Other receivables



1,583



1,670



1,818



489



832



153



(80)



(10)



(35)



1,992



2,492



1,936

9

Equipment on operating leases - net












6,502



6,623



6,624












6,502



6,623



6,624


Inventories



10,056



8,495



7,935





















10,056



8,495



7,935


Property and equipment - net



6,178



6,021



5,629



34



35



36












6,212



6,056



5,665


Goodwill



3,891



3,687



3,192





















3,891



3,687



3,192


Other intangible assets - net



1,255



1,218



1,209





















1,255



1,218



1,209


Retirement benefits



3,728



3,666



3,095



67



66



65



(2)



(2)



(2)



3,793



3,730



3,158

10

Deferred income taxes



1,015



940



1,095



53



45



50



(154)



(161)



(222)



914



824



923

11

Other assets



1,936



1,794



1,730



684



626



477



(23)



(3)



(4)



2,597



2,417



2,203

9

Total Assets


$

39,066


$

39,208


$

35,669


$

59,721


$

58,864


$

50,499


$

(7,167)


$

(8,042)


$

(6,554)


$

91,620


$

90,030


$

79,614








































Liabilities and Stockholders' Equity












































































Liabilities






































Short-term borrowings


$

969


$

1,040


$

1,516


$

13,160


$

11,552


$

9,474











$

14,129


$

12,592


$

10,990


Short-term securitization borrowings









8



4,864



5,711



3,474












4,864



5,711



3,482


Payables to Equipment Operations












5,348



6,569



5,307


$

(5,348)


$

(6,569)


$

(5,307)










8

Accounts payable and accrued expenses



11,819



12,962



9,704



2,952



3,170



1,970



(1,663)



(1,310)



(1,023)



13,108



14,822



10,651

9

Deferred income taxes



404



380



425



269



276



353



(154)



(161)



(222)



519



495



556

11

Long-term borrowings



8,155



7,917



8,760



26,916



25,679



24,078












35,071



33,596



32,838


Retirement benefits and other liabilities



2,384



2,351



3,182



111



108



109



(2)



(2)



(2)



2,493



2,457



3,289

10

Total liabilities



23,731



24,650



23,595



53,620



53,065



44,765



(7,167)



(8,042)



(6,554)



70,184



69,673



61,806








































Redeemable noncontrolling interest



100



92
























100



92











































Stockholders' Equity






































Total Deere & Company stockholders' equity



21,332



20,262



17,804



6,101



5,799



5,734



(6,101)



(5,799)



(5,734)



21,332



20,262



17,804

12

Noncontrolling interests



4



3



4





















4



3



4


Financial Services equity



(6,101)



(5,799)



(5,734)












6,101



5,799



5,734










12

Adjusted total stockholders' equity



15,235



14,466



12,074



6,101



5,799



5,734












21,336



20,265



17,808


Total Liabilities and Stockholders' Equity


$

39,066


$

39,208


$

35,669


$

59,721


$

58,864


$

50,499


$

(7,167)


$

(8,042)


$

(6,554)


$

91,620


$

90,030


$

79,614





8

Elimination of receivables / payables between Equipment Operations and Financial Services.

9

Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.

10

Reclassification of net pension assets / liabilities.

11

Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

12

Elimination of Financial Services' equity.

 

DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF CASH FLOWS
For the Three Months Ended January 29, 2023 and January 30, 2022
(In millions of dollars) Unaudited




EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




2023


2022


2023


2022


2023


2022


2023


2022


Cash Flows from Operating Activities


























Net income


$

1,772


$

673


$

185


$

231








$

1,957


$

904


Adjustments to reconcile net income to net cash provided by (used for) operating activities:


























Provision (credit) for credit losses



1



(2)



(131)



2









(130)





Provision for depreciation and amortization



279



257



252



266


$

(37)


$

(37)



494



486

13

Share-based compensation expense















23



18



23



18

14

Distributed earnings of Financial Services



3



42









(3)



(42)







15

Provision (credit) for deferred income taxes



(39)



223



(17)



(13)









(56)



210


Changes in assets and liabilities:


























Trade, notes, and financing receivables related to sales



(23)



158









(992)



(264)



(1,015)



(106)

16, 18, 19

Inventories



(1,254)



(1,277)









(25)



(20)



(1,279)



(1,297)

17

Accounts payable and accrued expenses



(1,458)



(1,346)



145



(66)



(264)



(142)



(1,577)



(1,554)

18

Accrued income taxes payable/receivable



192



(192)



7



8









199



(184)


Retirement benefits



(49)



(1,012)



1



2









(48)



(1,010)


Other



17



(12)



163



(19)



6



11



186



(20)

13, 14, 17

Net cash provided by (used for) operating activities



(559)



(2,488)



605



411



(1,292)



(476)



(1,246)



(2,553)




























Cash Flows from Investing Activities


























Collections of receivables (excluding receivables related to sales)









7,495



6,845



(297)



(410)



7,198



6,435

16

Proceeds from sales of equipment on operating leases









497



479









497



479


Cost of receivables acquired (excluding receivables related to sales)









(6,375)



(5,719)



53



116



(6,322)



(5,603)

16

Acquisitions of businesses, net of cash acquired






(24)


















(24)


Purchases of property and equipment



(315)



(193)















(315)



(193)


Cost of equipment on operating leases acquired









(531)



(419)



34



28



(497)



(391)

17

Increase in trade and wholesale receivables









(1,499)



(684)



1,499



684







16

Collateral on derivatives - net






4



345



(17)









345



(13)


Other



(9)



(22)



(137)



(36)






16



(146)



(42)

19

Net cash provided by (used for) investing activities



(324)



(235)



(205)



449



1,289



434



760



648




























Cash Flows from Financing Activities


























Increase (decrease) in total short-term borrowings



(136)



123



833



(1,141)









697



(1,018)


Change in intercompany receivables/payables



1,469



150



(1,469)



(150)














Proceeds from long-term borrowings



1



18



2,504



2,335









2,505



2,353


Payments of long-term borrowings






(124)



(1,925)



(1,816)









(1,925)



(1,940)


Proceeds from issuance of common stock



21



11















21



11


Repurchases of common stock



(1,257)



(623)















(1,257)



(623)


Dividends paid



(341)



(327)



(3)



(42)



3



42



(341)



(327)

15

Other



(27)



(22)



(12)



(11)









(39)



(33)


Net cash used for financing activities



(270)



(794)



(72)



(825)



3



42



(339)



(1,577)




























Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash



48



(75)



14



1









62



(74)




























Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash



(1,105)



(3,592)



342



36









(763)



(3,556)


Cash, Cash Equivalents, and Restricted Cash at Beginning of Period



3,781



7,200



1,160



925









4,941



8,125


Cash, Cash Equivalents, and Restricted Cash at End of Period


$

2,676


$

3,608


$

1,502


$

961








$

4,178


$

4,569





13

Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.

14

Reclassification of share-based compensation expense.

15

Elimination of dividends from Financial Services to the Equipment Operations, which are included in the Equipment Operations operating activities.

16

Primarily reclassification of receivables related to the sale of equipment.

17

Reclassification of direct lease agreements with retail customers.

18

Reclassification of sales incentive accruals on receivables sold to Financial Services.

19

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 Three Months Ended


Operations

Precision Ag

& Turf

& Forestry



Jan 29


Jan 30


Jan 29


Jan 30


Jan 29


Jan 30


Jan 29


Jan 30


Dollars in millions


2023


2022


2023


2022


2023


2022


2023


2022


Net Sales


$

11,402


$

8,531


$

5,198


$

3,356


$

3,001


$

2,631


$

3,203


$

2,544


Average Identifiable Assets


























With Inventories at LIFO


$

20,929


$

18,009


$

9,074


$

7,430


$

4,744


$

4,190


$

7,111


$

6,389


With Inventories at Standard Cost



22,976



19,614



10,138



8,234



5,288



4,654



7,550



6,726


Operating Profit


$

2,280


$

939


$

1,208


$

296


$

447


$

371


$

625


$

272


Percent of Net Sales



20.0

%


11.0

%


23.2

%


8.8

%


14.9

%


14.1

%


19.5

%


10.7

%

Operating Return on Assets


























With Inventories at LIFO



10.9

%


5.2

%


13.3

%


4.0

%


9.4

%


8.9

%


8.8

%


4.3

%

With Inventories at Standard Cost



9.9

%


4.8

%


11.9

%


3.6

%


8.5

%


8.0

%


8.3

%


4.0

%

SVA Cost of Assets


$

(689)


$

(589)


$

(304)


$

(248)


$

(159)


$

(139)


$

(226)


$

(202)


SVA



1,591



350



904



48



288



232



399



70






























Financial



















For the Three Months Ended


Services





















Jan 29


Jan 30




















Dollars in millions


2023


2022




















Net Income Attributable to Deere & Company


$

185


$

231




















Average Equity



5,948



5,644




















Return on Equity



3.1

%


4.1

%



















Operating Profit


$

238


$

296




















Cost of Equity



(192)



(180)




















SVA



46



116




















 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/deere-reports-first-quarter-net-income-of-1-959-billion-301749487.html

SOURCE Deere & Company

Copyright 2023 Canada NewsWire

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