• Net income grows for quarter and full year, driven by solid market conditions, differentiated products, and strong execution.
  • Full-year 2024 earnings forecast to be $7.75 to $8.25 billion, as volumes return to mid‑cycle levels.
  • Ongoing focus on structural profitability, investments that deliver customer value.

MOLINE, Ill., Nov. 22, 2023 /PRNewswire/ -- Deere & Company reported net income of $2.369 billion for the fourth quarter ended October 29, 2023, or $8.26 per share, compared with net income of $2.246 billion, or $7.44 per share, for the quarter ended October 30, 2022. For fiscal-year 2023, net income attributable to Deere & Company was $10.166 billion, or $34.63 per share, compared with $7.131 billion, or $23.28 per share, in fiscal 2022.

Worldwide net sales and revenues decreased 1 percent, to $15.412 billion, for the fourth quarter of fiscal 2023 and rose 16 percent, to $61.251 billion, for the full year. Net sales were $13.801 billion for the quarter and $55.565 billion for the year, compared with $14.351 billion and $47.917 billion in 2022.

"Deere's fourth-quarter and full-year results can be attributed to the successful execution of our Smart Industrial Operating Model and the value that customers recognize in our industry-leading products and solutions," said John C. May, chairman and chief executive officer. "We must also recognize and credit our dedicated employees, dealers, and suppliers, whose hard work and focus have been instrumental to our overall success."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be in a range of $7.75 billion to $8.25 billion.

"While our end markets will fluctuate, we remain focused on disciplined execution and strategically investing in solutions that drive customer value," May said. "As evidenced by our guidance for 2024, we are demonstrating higher levels of through-cycle structural profitability while making our company more resilient and better equipped for the future."



















Deere & Company


Fourth Quarter


Full Year


$ in millions, except per share amounts


2023


2022


% Change


2023


2022


% Change


Net sales and revenues


$

15,412


$

15,536


-1 %


$

61,251


$

52,577


16 %


Net income


$

2,369


$

2,246


5 %


$

10,166


$

7,131


43 %


Fully diluted EPS


$

8.26


$

7.44




$

34.63


$

23.28




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











Production & Precision Agriculture


Fourth Quarter


$ in millions


2023


2022


% Change


Net sales


$

6,965


$

7,434


-6 %


Operating profit


$

1,836


$

1,740


6 %


Operating margin



26.4 %



23.4 %




Production and precision agriculture sales decreased for the quarter due to lower shipment volumes partially offset by price realization. Operating profit improved primarily due to price realization partially offset by lower shipment volumes / sales mix and higher SA&G and R&D expenses. The prior period was impacted by higher reserves on assets in Russia.











Small Agriculture & Turf


Fourth Quarter


$ in millions


2023


2022


% Change


Net sales


$

3,094


$

3,544


-13 %


Operating profit


$

444


$

506


-12 %


Operating margin



14.4 %



14.3 %




Small agriculture and turf sales decreased for the quarter due to lower shipment volumes partially offset by price realization. Operating profit decreased due to lower shipment volumes / sales mix and higher SA&G and R&D expenses, partially offset by price realization.











Construction & Forestry


Fourth Quarter


$ in millions


2023


2022


% Change


Net sales


$

3,742


$

3,373


11 %


Operating profit


$

516


$

414


25 %


Operating margin



13.8 %



12.3 %




Construction and forestry sales increased for the quarter due to price realization and higher shipment volumes. Operating profit improved primarily due to price realization, partially offset by higher production costs, less-favorable sales mix, the unfavorable effects of foreign currency exchange, and a loss on the sale of the Russian roadbuilding business. The prior period was impacted by higher reserves on assets in Russia.











Financial Services


Fourth Quarter


$ in millions


2023


2022


% Change


Net income


$

190


$

232


-18 %


Financial services net income for the quarter decreased due to unfavorable derivative valuation adjustments, less-favorable financing spreads, and a higher provision for credit losses (excluding reserves in Russia). These factors were partially offset by income earned on a higher average portfolio. In the fourth quarter of 2022, financial services increased its reserves for credit losses in Russia and recorded an intercompany benefit from the equipment operations, which guarantees the financial services' investment in certain international markets, including Russia.









Industry Outlook for Fiscal 2024








Agriculture & Turf








U.S. & Canada:








Large Ag






Down 10 to 15%


Small Ag & Turf






Down 5 to 10%


Europe






Down ~10%


South America (Tractors & Combines)






Down ~10%


Asia






Down moderately










Construction & Forestry








U.S. & Canada:








Construction Equipment






Down 5 to 10%


Compact Construction Equipment






Flat to Down 5%


Global Forestry






Down ~10%


Global Roadbuilding






Flat










Deere Segment Outlook for Fiscal 2024


Currency


Price


$ in millions


Net Sales


Translation


Realization


Production & Precision Ag


Down 15 to 20%


~ Flat


+1.5 %


Small Ag & Turf


Down 10 to 15%


~ Flat


+1.0 %


Construction & Forestry


Down ~10%


~ Flat


+1.5 %










Financial Services


Net Income


~ $770




Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecast to be approximately $770 million. Results are expected to be higher in 2024 due to income earned on a higher average portfolio, partially offset by less-favorable financing spreads and lower gains on operating-lease residual values. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. See Note 1 of the financial statements for further details.

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. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

  • changes in U.S., foreign 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, including the ongoing war between Russia and Ukraine and the war between Israel and Hamas;
  • adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and regional or global 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 customers' changing expectations and demand for John Deere products and solutions;
  • accurately forecasting customer demand for products and services and adequately managing inventory;
  • the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;
  • changes to governmental communications channels (radio frequency technology);
  • the 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, unfavorable weather events, and natural disasters;
  • governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
  • higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions;
  • 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 John Deere information technology infrastructure and 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, 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 financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

 

DEERE & COMPANY

FOURTH QUARTER 2023 PRESS RELEASE

(In millions of dollars) Unaudited



Three Months Ended


Years Ended



October 29


October 30


%


October 29


October 30


%



2023


2022


Change


2023


2022


Change

Net sales and revenues:

















Production & precision ag net sales


$

6,965


$

7,434


-6


$

26,790


$

22,002


+22

Small ag & turf net sales



3,094



3,544


-13



13,980



13,381


+4

Construction & forestry net sales



3,742



3,373


+11



14,795



12,534


+18

Financial services revenues



1,347



988


+36



4,721



3,625


+30

Other revenues



264



197


+34



965



1,035


-7

Total net sales and revenues


$

15,412


$

15,536


-1


$

61,251


$

52,577


+16


















Operating profit: *

















Production & precision ag


$

1,836


$

1,740


+6


$

6,996


$

4,386


+60

Small ag & turf



444



506


-12



2,472



1,949


+27

Construction & forestry



516



414


+25



2,695



2,014


+34

Financial services



229



297


-23



795



1,159


-31

Total operating profit



3,025



2,957


+2



12,958



9,508


+36

Reconciling items **



51



(68)





79



(370)



Income taxes



(707)



(643)


+10



(2,871)



(2,007)


+43

Net income attributable to
Deere & Company


$

2,369


$

2,246


+5


$

10,166


$

7,131


+43

*

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 for financial services includes the effect of interest expense and foreign exchange gains or losses.

**

Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, equity in income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

 

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Three Months and Years Ended October 29, 2023 and October 30, 2022

(In millions of dollars and shares except per share amounts) Unaudited



Three Months Ended


Years Ended



2023


2022


2023


2022

Net Sales and Revenues













Net sales


$

13,801


$

14,351


$

55,565


$

47,917

Finance and interest income



1,357



925



4,683



3,365

Other income



254



260



1,003



1,295

Total



15,412



15,536



61,251



52,577














Costs and Expenses













Cost of sales



9,427



10,214



37,715



35,338

Research and development expenses



606



576



2,177



1,912

Selling, administrative and general expenses



1,203



1,192



4,595



3,863

Interest expense



781



348



2,453



1,062

Other operating expenses



322



320



1,292



1,275

Total



12,339



12,650



48,232



43,450














Income of Consolidated Group before Income Taxes



3,073



2,886



13,019



9,127

Provision for income taxes



707



643



2,871



2,007














Income of Consolidated Group



2,366



2,243



10,148



7,120

Equity in income of unconsolidated affiliates



2



1



7



10














Net Income



2,368



2,244



10,155



7,130

Less: Net loss attributable to noncontrolling interests



(1)



(2)



(11)



(1)

Net Income Attributable to Deere & Company


$

2,369


$

2,246


$

10,166


$

7,131














Per Share Data













Basic


$

8.30


$

7.48


$

34.80


$

23.42

Diluted



8.26



7.44



34.63



23.28

Dividends declared



1.35



1.13



5.05



4.36

Dividends paid



1.25



1.13



4.83



4.28














Average Shares Outstanding













Basic



285.5



300.4



292.2



304.5

Diluted



286.9



302.1



293.6



306.3

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of October 29, 2023 and October 30, 2022

(In millions of dollars) Unaudited 



2023


2022

Assets







Cash and cash equivalents


$

7,458


$

4,774

Marketable securities



946



734

Trade accounts and notes receivable – net



7,739



6,410

Financing receivables – net



43,673



36,634

Financing receivables securitized – net



7,335



5,936

Other receivables



2,623



2,492

Equipment on operating leases – net



6,917



6,623

Inventories



8,160



8,495

Property and equipment – net



6,879



6,056

Goodwill



3,900



3,687

Other intangible assets – net



1,133



1,218

Retirement benefits



3,007



3,730

Deferred income taxes



1,814



824

Other assets



2,503



2,417

Total Assets


$

104,087


$

90,030








Liabilities and Stockholders' Equity














Liabilities







Short-term borrowings


$

17,939


$

12,592

Short-term securitization borrowings



6,995



5,711

Accounts payable and accrued expenses



16,130



14,822

Deferred income taxes



520



495

Long-term borrowings



38,477



33,596

Retirement benefits and other liabilities



2,140



2,457

Total liabilities



82,201



69,673








Redeemable noncontrolling interest



97



92








Stockholders' Equity







Total Deere & Company stockholders' equity



21,785



20,262

Noncontrolling interests



4



3

Total stockholders' equity



21,789



20,265

Total Liabilities and Stockholders' Equity


$

104,087


$

90,030

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Years Ended October 29, 2023 and October 30, 2022

(In millions of dollars) Unaudited



2023


2022

Cash Flows from Operating Activities







Net income


$

10,155


$

7,130

Adjustments to reconcile net income to net cash provided by operating
activities:







Provision (credit) for credit losses



(16)



192

Provision for depreciation and amortization



2,004



1,895

Impairments and other adjustments



191



88

Share-based compensation expense



130



85

Gain on remeasurement of previously held equity investment






(326)

Credit for deferred income taxes



(790)



(66)

Changes in assets and liabilities:







Receivables related to sales



(4,253)



(2,483)

Inventories



279



(2,091)

Accounts payable and accrued expenses



830



1,133

Accrued income taxes payable/receivable



(23)



141

Retirement benefits



(170)



(1,015)

Other



252



16

Net cash provided by operating activities



8,589



4,699








Cash Flows from Investing Activities







Collections of receivables (excluding receivables related to sales)



23,051



20,907

Proceeds from sales of equipment on operating leases



1,981



2,093

Cost of receivables acquired (excluding receivables related to sales)



(28,772)



(26,300)

Acquisitions of businesses, net of cash acquired



(82)



(498)

Purchases of property and equipment



(1,498)



(1,134)

Cost of equipment on operating leases acquired



(2,970)



(2,654)

Collateral on derivatives – net



(12)



(642)

Other



(447)



(257)

Net cash used for investing activities



(8,749)



(8,485)








Cash Flows from Financing Activities







Net proceeds in short-term borrowings (original maturities three months or less)



4,008



3,852

Proceeds from borrowings issued (original maturities greater than three months)



15,429



10,358

Payments of borrowings (original maturities greater than three months)



(7,913)



(8,445)

Repurchases of common stock



(7,216)



(3,597)

Dividends paid



(1,427)



(1,313)

Other



(73)



(29)

Net cash provided by financing activities



2,808



826








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



31



(224)








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



2,679



(3,184)

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



4,941



8,125

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


$

7,620


$

4,941

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY

Condensed Notes to Consolidated Financial Statements

(In millions of dollars) Unaudited


(1)

Special Items


2023


In the fourth quarter of 2023, the company sold its Russian roadbuilding business, recognizing a loss of $18 million (pretax and after-tax). The loss was recorded in "Other operating expenses" in the construction and forestry segment.


In the third quarter of 2023, a favorable tax ruling in Brazil allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.


In the second quarter of 2023, the company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023. Prior period results for Deere & Company were not restated, as the adjustment is considered immaterial to the company's financial statements.


2022


In the second quarter of 2022, the company acquired full ownership of three former Deere-Hitachi joint venture factories. The remeasurement of the previously held equity investment resulted in a non-cash gain of $326 million (pretax and after-tax).


In the second quarter of 2022, the company suspended shipments of machines and service parts to Russia. As a result, the company impaired its long-lived assets, increased reserves of certain financial assets, introduced an employee voluntary-separation program, and recorded an accrual for various contractual uncertainties. In the fourth quarter of 2022, the company increased its reserves for credit losses, reflecting further economic uncertainty in Russia. The financial services received an intercompany benefit from the equipment operations, which guarantees the financial services' investment in certain international markets, including Russia.


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.


The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and fiscal years ended October 29, 2023 and October 30, 2022:



































Three Months


Fiscal Years




PPA


SAT


CF


FS


Total


PPA


SAT


CF


FS


Total


2023 Expense:
































Russian roadbuilding sale –
Other operating expense








$

18





$

18








$

18





$

18


Financing incentive – SA&G
expense


























$

173



173


Total expense









18






18









18



173



191


































2022 Expense (benefit):
































Gain on remeasurement of equity
investment – Other income
























(326)






(326)


Total Russia/Ukraine events
expense


$

70


$

8



50






128


$

133


$

11



110



1



255


UAW ratification bonus –
Cost of sales


















53



9



28






90


Total expense (benefit)



70



8



50






128



186



20



(188)



1



19


































Period over period change


$

(70)


$

(8)


$

(32)





$

(110)


$

(186)


$

(20)


$

206


$

172


$

172


(2)

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 3 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

(3) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME

For the Three Months Ended October 29, 2023 and October 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


$

13,801


$

14,351














$

13,801


$

14,351




Finance and interest income



193



83


$

1,445


$

1,003


$

(281)


$

(161)



1,357



925


 1


Other income



218



233



121



231



(85)



(204)



254



260


2, 3


Total



14,212



14,667



1,566



1,234



(366)



(365)



15,412



15,536
































Costs and Expenses




























Cost of sales



9,433



10,215









(6)



(1)



9,427



10,214


 4


Research and development expenses



606



576















606



576




Selling, administrative and general expenses



980



922



225



272



(2)



(2)



1,203



1,192


 4


Interest expense



114



93



757



306



(90)



(51)



781



348


 1


Interest compensation to Financial Services



191



110









(191)



(110)








 1


Other operating expenses



45



163



354



358



(77)



(201)



322



320


5, 6


Total



11,369



12,079



1,336



936



(366)



(365)



12,339



12,650
































Income before Income Taxes



2,843



2,588



230



298









3,073



2,886




Provision for income taxes



665



576



42



67









707



643
































Income after Income Taxes



2,178



2,012



188



231









2,366



2,243




Equity in income of unconsolidated affiliates









2



1









2



1
































Net Income



2,178



2,012



190



232









2,368



2,244




Less: Net loss attributable to
noncontrolling interests



(1)



(2)















(1)



(2)




Net Income Attributable to Deere & Company


$

2,179


$

2,014


$

190


$

232








$

2,369


$

2,246




1

Elimination of intercompany interest income and expense.

2

Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.

3

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

4

Elimination of intercompany service fees.

5

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

6

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)
STATEMENTS OF INCOME

For the Years Ended October 29, 2023 and October 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


$

55,565


$

47,917














$

55,565


$

47,917




Finance and interest income



636



213


$

5,055


$

3,583


$

(1,008)


$

(431)



4,683



3,365


 1


Other income



858



1,261



499



502



(354)



(468)



1,003



1,295


2, 3


Total



57,059



49,391



5,554



4,085



(1,362)



(899)



61,251



52,577
































Costs and Expenses




























Cost of sales



37,739



35,341









(24)



(3)



37,715



35,338


 4


Research and development expenses



2,177



1,912















2,177



1,912




Selling, administrative and general expenses



3,611



3,137



994



735



(10)



(9)



4,595



3,863


 4


Interest expense



411



390



2,362



799



(320)



(127)



2,453



1,062


1


Interest compensation to Financial Services



687



299









(687)



(299)








 1


Other operating expenses



217



350



1,396



1,386



(321)



(461)



1,292



1,275


5, 6


Total



44,842



41,429



4,752



2,920



(1,362)



(899)



48,232



43,450
































Income before Income Taxes



12,217



7,962



802



1,165









13,019



9,127




Provision for income taxes



2,685



1,718



186



289









2,871



2,007
































Income after Income Taxes



9,532



6,244



616



876









10,148



7,120




Equity in income of unconsolidated affiliates



4



6



3



4









7



10
































Net Income



9,536



6,250



619



880









10,155



7,130




Less: Net loss attributable to
noncontrolling interests



(11)



(1)















(11)



(1)




Net Income Attributable to Deere & Company


$

9,547


$

6,251


$

619


$

880








$

10,166


$

7,131




1

Elimination of intercompany interest income and expense.

2

Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.

3

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

4

Elimination of intercompany service fees.

5

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

6

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

As of October 29, 2023 and October 30, 2022

(In millions of dollars) Unaudited











EQUIPMENT


FINANCIAL

















OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED





2023


2022


2023


2022


2023


2022


2023


2022




Assets



























Cash and cash equivalents

$

5,720


$

3,767


$

1,738


$

1,007








$

7,458


$

4,774




Marketable securities


104



61



842



673









946



734




Receivables from Financial Services


4,516



6,569








$

(4,516)


$

(6,569)








 7


Trade accounts and notes
receivable – net


1,320



1,273



8,687



6,434



(2,268)



(1,297)



7,739



6,410


 8


Financing receivables – net


64



47



43,609



36,587









43,673



36,634




Financing receivables securitized – net








7,335



5,936









7,335



5,936




Other receivables


1,813



1,670



869



832



(59)



(10)



2,623



2,492


 8


Equipment on operating leases – net








6,917



6,623









6,917



6,623




Inventories


8,160



8,495















8,160



8,495




Property and equipment – net


6,843



6,021



36



35









6,879



6,056




Goodwill


3,900



3,687















3,900



3,687




Other intangible assets – net


1,133



1,218















1,133



1,218




Retirement benefits


2,936



3,666



72



66



(1)



(2)



3,007



3,730


 9


Deferred income taxes


2,133



940



68



45



(387)



(161)



1,814



824


 10


Other assets


1,948



1,794



559



626



(4)



(3)



2,503



2,417




Total Assets

$

40,590


$

39,208


$

70,732


$

58,864


$

(7,235)


$

(8,042)


$

104,087


$

90,030































Liabilities and Stockholders' Equity






















































Liabilities



























Short-term borrowings

$

1,230


$

1,040


$

16,709


$

11,552








$

17,939


$

12,592




Short-term securitization borrowings








6,995



5,711









6,995



5,711




Payables to Equipment Operations








4,516



6,569


$

(4,516)


$

(6,569)








 7


Accounts payable and
accrued expenses


14,862



12,962



3,599



3,170



(2,331)



(1,310)



16,130



14,822


 8


Deferred income taxes


452



380



455



276



(387)



(161)



520



495


 10


Long-term borrowings


7,210



7,917



31,267



25,679









38,477



33,596




Retirement benefits and other liabilities


2,032



2,351



109



108



(1)



(2)



2,140



2,457


 9


Total liabilities


25,786



24,650



63,650



53,065



(7,235)



(8,042)



82,201



69,673































Redeemable noncontrolling interest


97



92















97



92































Stockholders' Equity



























Total Deere & Company
stockholders' equity


21,785



20,262



7,082



5,799



(7,082)



(5,799)



21,785



20,262


 11


Noncontrolling interests


4



3















4



3




Financial Services equity


(7,082)



(5,799)









7,082



5,799








 11


Adjusted total stockholders' equity


14,707



14,466



7,082



5,799









21,789



20,265




Total Liabilities and
Stockholders' Equity

$

40,590


$

39,208


$

70,732


$

58,864


$

(7,235)


$

(8,042)


$

104,087


$

90,030




7

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

8

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

9

Reclassification of net pension assets / liabilities.

10

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

11

Elimination of Financial Services' equity.

 

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF CASH FLOWS

For the Years Ended October 29, 2023 and October 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


$

9,536


$

6,250


$

619


$

880








$

10,155


$

7,130




Adjustments to reconcile net income to net cash provided
by operating activities:




























Provision (credit) for credit losses



7



3



(23)



189









(16)



192




Provision (credit) for depreciation and amortization



1,123



1,041



1,016



1,050


$

(135)


$

(196)



2,004



1,895


 12


Impairments and other adjustments



18



88



173












191



88




Share-based compensation expense















130



85



130



85


 13


Gain on remeasurement of previously held equity
investment






(326)


















(326)




Distributed earnings of Financial Services



215



444









(215)



(444)








 14


Provision (credit) for deferred income taxes



(959)



8



169



(74)









(790)



(66)




Changes in assets and liabilities:




























Receivables related to sales



(58)



(189)









(4,195)



(2,294)



(4,253)



(2,483)


15, 17, 18


Inventories



474



(1,924)









(195)



(167)



279



(2,091)


 16


Accounts payable and accrued expenses



1,352



1,444



449



143



(971)



(454)



830



1,133


 17


Accrued income taxes payable/receivable



8



166



(31)



(25)









(23)



141




Retirement benefits



(164)



(1,016)



(6)



1









(170)



(1,015)




Other



367



250



(51)



(287)



(64)



53



252



16


12, 13, 16


Net cash provided by operating activities



11,919



6,239



2,315



1,877



(5,645)



(3,417)



8,589



4,699
































Cash Flows from Investing Activities




























Collections of receivables (excluding receivables related
to sales)









24,128



22,400



(1,077)



(1,493)



23,051



20,907


 15


Proceeds from sales of equipment on operating leases









1,981



2,093









1,981



2,093




Cost of receivables acquired (excluding receivables related
to sales)









(29,229)



(26,903)



457



603



(28,772)



(26,300)


 15


Acquisitions of businesses, net of cash acquired



(82)



(498)















(82)



(498)




Purchases of property and equipment



(1,494)



(1,131)



(4)



(3)









(1,498)



(1,134)




Cost of equipment on operating leases acquired









(3,234)



(2,879)



264



225



(2,970)



(2,654)


 16


Increase (decrease) in investment in Financial Services



(870)



7









870



(7)








 19


Increase in trade and wholesale receivables









(5,783)



(3,601)



5,783



3,601








 15


Collateral on derivatives – net



(1)



5



(11)



(647)









(12)



(642)




Other



(290)



(213)



(160)



(81)



3



37



(447)



(257)


18


Net cash used for investing activities



(2,737)



(1,830)



(12,312)



(9,621)



6,300



2,966



(8,749)



(8,485)
































Cash Flows from Financing Activities




























Net proceeds (payments) in short-term borrowings (original
maturities three months or less)



(113)



136



4,121



3,716









4,008



3,852




Change in intercompany receivables/payables



2,090



(1,633)



(2,090)



1,633
















Proceeds from borrowings issued (original maturities
greater than three months)



342



138



15,087



10,220









15,429



10,358




Payments of borrowings (original maturities greater than
three months)



(901)



(1,356)



(7,012)



(7,089)









(7,913)



(8,445)




Repurchases of common stock



(7,216)



(3,597)















(7,216)



(3,597)




Capital investment from Equipment Operations









870



(7)



(870)



7








 19


Dividends paid



(1,427)



(1,313)



(215)



(444)



215



444



(1,427)



(1,313)


 14


Other



(7)



6



(66)



(35)









(73)



(29)




Net cash provided by (used for) financing activities



(7,232)



(7,619)



10,695



7,994



(655)



451



2,808



826
































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



24



(209)



7



(15)









31



(224)
































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



1,974



(3,419)



705



235









2,679



(3,184)




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



3,781



7,200



1,160



925









4,941



8,125




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


$

5,755


$

3,781


$

1,865


$

1,160








$

7,620


$

4,941




12

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

13

Reclassification of share-based compensation expense.

14

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

15

Primarily reclassification of receivables related to the sale of equipment.

16

Reclassification of direct lease agreements with retail customers.

17

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

18

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.

19

Elimination of investment from Equipment Operations to Financial Services.

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 Years Ended


Operations

Precision Ag

& Turf

& Forestry




Oct 29

Oct 30

Oct 29

Oct 30

Oct 29

Oct 30

Oct 29

Oct 30


Dollars in Millions


2023

2022

2023

2022

2023

2022

2023

2022


Net Sales


$

55,565


$

47,917


$

26,790


$

22,002


$

13,980


$

13,381


$

14,795


$

12,534



Average Identifiable Assets



























With Inventories as Reported


$

21,114


$

19,420


$

9,256


$

8,336


$

4,601


$

4,349


$

7,257


$

6,735



With Inventories at Standard Cost



23,186



20,983



10,343



9,118



5,149



4,795



7,694



7,070



Operating Profit


$

12,163


$

8,349


$

6,996


$

4,386


$

2,472


$

1,949


$

2,695


$

2,014



Percent of Net Sales



21.9

%


17.4

%


26.1

%


19.9

%


17.7

%


14.6

%


18.2

%


16.1

%


Operating Return on Assets



























With Inventories as Reported



57.6

%


43.0

%


75.6

%


52.6

%


53.7

%


44.8

%


37.1

%


29.9

%


With Inventories at Standard Cost



52.5

%


39.8

%


67.6

%


48.1

%


48.0

%


40.6

%


35.0

%


28.5

%


SVA Cost of Assets


$

(2,782)


$

(2,519)


$

(1,241)


$

(1,094)


$

(618)


$

(576)


$

(923)


$

(849)



SVA



9,381



5,830



5,755



3,292



1,854



1,373



1,772



1,165
































Financial




















For the Years Ended


Services






















Oct 29

Oct 30




















Dollars in Millions



2023



2022





















Net Income Attributable to Deere & Company


$

619


$

880





















Average Equity



6,588



5,725





















Return on Equity



9.4

%


15.4

%




















Operating Profit


$

795


$

1,159





















Cost of Equity



(858)



(760)





















SVA



(63)



399
















































 

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SOURCE John Deere Company

Copyright 2023 PR Newswire

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