• Strong ag margins highlight continued value delivery amid market fluctuations.
  • Global ag fundamentals are expected to remain weak as construction moderates.
  • Full-year net income forecast unchanged despite challenging environment.

MOLINE, Ill., Aug. 15, 2024 /PRNewswire/ -- Deere & Company reported net income of $1.734 billion for the third quarter ended July 28, 2024, or $6.29 per share, compared with net income of $2.978 billion, or $10.20 per share, for the quarter ended July 30, 2023. For the first nine months of the year, net income attributable to Deere & Company was $5.855 billion, or $21.04 per share, compared with $7.797 billion, or $26.35 per share, for the same period last year.

Worldwide net sales and revenues decreased 17 percent, to $13.152 billion, for the third quarter of 2024 and decreased 11 percent, to $40.572 billion, for nine months. Net sales were $11.387 billion for the quarter and $35.484 billion for nine months, compared with $14.284 billion and $41.765 billion last year, respectively.

"John Deere's third-quarter results showcase our disciplined execution in the face of challenging conditions in the global agricultural and construction sectors," said John C. May, chairman and chief executive officer. "Despite facing significant headwinds, our teams have demonstrated resiliency in adapting to market fluctuations, allowing us to remain focused on advancing our strategy and consistently providing exceptional value to our customers."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be approximately $7.0 billion.

"In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customer needs," said May. "Although these decisions were difficult, they are vital for our continued success and competitiveness. Our commitment to our customers is at the heart of everything we do, and we are confident that these proactive measures will allow us to continue investing in innovative, high-quality products and solutions that improve our customers' lives."

Deere & Company


Third Quarter


Year to Date

$ in millions, except per share amounts


2024


2023


% Change


2024


2023


% Change

Net sales and revenues


$

13,152


$

15,801


-17 %


$

40,572


$

45,839


-11 %

Net income


$

1,734


$

2,978


-42 %


$

5,855


$

7,797


-25 %

Fully diluted EPS


$

6.29


$

10.20




$

21.04


$

26.35



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

Production & Precision Agriculture


Third Quarter

$ in millions


2024


2023


% Change

Net sales


$

5,099


$

6,806


-25 %

Operating profit


$

1,162


$

1,782


-35 %

Operating margin



22.8 %



26.2 %



Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes and employee-separation programs' expenses, presented as a special item below. These factors were partially offset by price realization and lower warranty expenses.

Production & Precision Agriculture Operating Profit; Third Quarter 2024 Compared to Third Quarter 2023; $ in millions

 

Small Agriculture & Turf


Third Quarter

$ in millions


2024


2023


% Change

Net sales


$

3,053


$

3,739


-18 %

Operating profit


$

496


$

732


-32 %

Operating margin



16.2 %



19.6 %



Small agriculture and turf sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased primarily due to lower shipment volumes and higher warranty expenses, partially offset by price realization.

Small Agriculture & Turf Operating Profit; Third Quarter 2024 Compared to Third Quarter 2023; $ in millions

 

Construction & Forestry


Third Quarter

$ in millions


2024


2023


% Change

Net sales


$

3,235


$

3,739


-13 %

Operating profit


$

448


$

716


-37 %

Operating margin



13.8 %



19.1 %



Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix and unfavorable price realization.

Construction & Forestry Operating Profit; Third Quarter 2024 Compared to Third Quarter 2023; $ in millions

 

Financial Services


Third Quarter

$ in millions


2024


2023


% Change

Net income


$

153


$

216


-29 %

Financial services net income for the quarter decreased due to a higher provision for credit losses and less-favorable financing spreads, partially offset by income earned on higher average portfolio balances and favorable discrete tax items.

Industry Outlook for Fiscal 2024







Agriculture & Turf







U.S. & Canada:







Large Ag






Down ~ 15%

Small Ag & Turf






Down ~ 10%

Europe






Down ~ 15%

South America (Tractors & Combines)






Down 15 to 20%

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 to Down 5%

 

Deere Segment Outlook for Fiscal 2024




Currency


Price

$ in millions


Net Sales


Translation


Realization

Production & Precision Ag


Down 20% to 25%


~ Flat


Up ~ 2.0%

Small Ag & Turf


Down 20% to 25%


~ Flat


Up ~ 2.0%

Construction & Forestry


Down 10% to 15%


~ Flat


Up ~ 0.5%








Financial Services


Net Income


~$  720



Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecasted to be approximately $720 million. Results are expected to be higher than fiscal year 2023 due to income earned on higher average portfolio balances, partially offset by a higher provision for credit losses and less-favorable financing spreads. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook," and "Condensed Notes to Interim Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of 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 and compliance with U.S., foreign and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emissions), 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 conflict in the Middle East;
  • adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;
  • worldwide demand for food and different forms of renewable energy;
  • 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 inventory and distribution of John Deere products and to provide 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;
  • the company's equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations;
  • the ability to attract, develop, engage, and retain qualified employees;
  • the impact of workforce reductions on employee retention, morale, and institutional knowledge;
  • 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;
  • legislation introduced or enacted that could affect the company's business model and intellectual property, such as right to repair or right to modify legislation;
  • investigations, claims, lawsuits, or other legal proceedings;
  • events that damage the company's reputation or brand, such as the recent social media campaign targeting the company's stance on certain social issues or the company's response thereto;
  • the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, available farm acres, acreage planted, 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 company's 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

THIRD QUARTER 2024 PRESS RELEASE

(In millions of dollars) Unaudited




Three Months Ended


Nine Months Ended




July 28


July 30


%


July 28


July 30


%




2024


2023


Change


2024


2023


Change


Net sales and revenues:


















Production & precision ag net sales


$

5,099


$

6,806


-25


$

16,529


$

19,826


-17


Small ag & turf net sales



3,053



3,739


-18



8,663



10,886


-20


Construction & forestry net sales



3,235



3,739


-13



10,292



11,053


-7


Financial services revenues



1,489



1,228


+21



4,259



3,375


+26


Other revenues



276



289


-4



829



699


+19


Total net sales and revenues


$

13,152


$

15,801


-17


$

40,572


$

45,839


-11




















Operating profit: *


















Production & precision ag


$

1,162


$

1,782


-35


$

3,857


$

5,160


-25


Small ag & turf



496



732


-32



1,393



2,028


-31


Construction & forestry



448



716


-37



1,682



2,179


-23


Financial services



191



286


-33



657



565


+16


Total operating profit



2,297



3,516


-35



7,589



9,932


-24


Reconciling items **



62



98


-37



111



29


+283


Income taxes



(625)



(636)


-2



(1,845)



(2,164)


-15


Net income attributable to Deere & Company


$

1,734


$

2,978


-42


$

5,855


$

7,797


-25




*

Operating profit is income from continuing operations before corporate expenses, certain external interest expenses, 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, and net income attributable to noncontrolling interests.

 

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Three and Nine Months Ended July 28, 2024 and July 30, 2023

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



Three Months Ended


Nine Months Ended



2024


2023


2024


2023

Net Sales and Revenues













Net sales


$

11,387


$

14,284


$

35,484


$

41,765

Finance and interest income



1,461



1,253



4,207



3,326

Other income



304



264



881



748

Total



13,152



15,801



40,572



45,839














Costs and Expenses













Cost of sales



7,848



9,624



24,205



28,288

Research and development expenses



567



528



1,664



1,571

Selling, administrative and general expenses



1,278



1,110



3,608



3,392

Interest expense



840



623



2,478



1,671

Other operating expenses



264



310



930



971

Total



10,797



12,195



32,885



35,893














Income of Consolidated Group before Income Taxes



2,355



3,606



7,687



9,946

Provision for income taxes



625



636



1,845



2,164














Income of Consolidated Group



1,730



2,970



5,842



7,782

Equity in income of unconsolidated affiliates



1



2



4



5














Net Income



1,731



2,972



5,846



7,787

Less: Net loss attributable to noncontrolling interests



(3)



(6)



(9)



(10)

Net Income Attributable to Deere & Company


$

1,734


$

2,978


$

5,855


$

7,797














Per Share Data













Basic


$

6.32


$

10.24


$

21.13


$

26.48

Diluted



6.29



10.20



21.04



26.35

Dividends declared



1.47



1.25



4.41



3.70

Dividends paid



1.47



1.25



4.29



3.58














Average Shares Outstanding













Basic



274.5



290.8



277.1



294.4

Diluted



275.6



292.1



278.2



295.9



See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars) Unaudited



July 28


October 29


July 30



2024


2023


2023

Assets










Cash and cash equivalents


$

7,004


$

7,458


$

6,576

Marketable securities



1,140



946



841

Trade accounts and notes receivable – net



7,469



7,739



9,297

Financing receivables – net



43,896



43,673



41,302

Financing receivables securitized – net



8,274



7,335



7,001

Other receivables



2,270



2,623



3,118

Equipment on operating leases – net



7,118



6,917



6,709

Inventories



7,696



8,160



9,350

Property and equipment – net



7,092



6,879



6,418

Goodwill



3,960



3,900



3,994

Other intangible assets – net



1,030



1,133



1,199

Retirement benefits



3,126



3,007



3,573

Deferred income taxes



1,898



1,814



1,360

Other assets



2,903



2,503



2,659

Assets held for sale



2,965







Total Assets


$

107,841


$

104,087


$

103,397











Liabilities and Stockholders' Equity




















Liabilities










Short-term borrowings


$

15,294


$

17,939


$

17,143

Short-term securitization borrowings



7,869



6,995



6,608

Accounts payable and accrued expenses



14,397



16,130



15,340

Deferred income taxes



481



520



506

Long-term borrowings



42,692



38,477



38,112

Retirement benefits and other liabilities



2,156



2,140



2,536

Liabilities held for sale



1,803







Total liabilities



84,692



82,201



80,245











Redeemable noncontrolling interest



84



97



101











Stockholders' Equity










Total Deere & Company stockholders' equity



23,062



21,785



23,048

Noncontrolling interests



3



4



3

Total stockholders' equity



23,065



21,789



23,051

Total Liabilities and Stockholders' Equity


$

107,841


$

104,087


$

103,397



See Condensed Notes to Interim Consolidated Financial Statements.

 

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Nine Months Ended July 28, 2024 and July 30, 2023

(In millions of dollars) Unaudited



2024


2023

Cash Flows from Operating Activities







Net income


$

5,846


$

7,787

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







Provision (credit) for credit losses



222



(64)

Provision for depreciation and amortization



1,598



1,527

Impairments and other adjustments



53



173

Share-based compensation expense



159



112

Credit for deferred income taxes



(125)



(429)

Changes in assets and liabilities:







Receivables related to sales



(2,446)



(5,059)

Inventories



234



(663)

Accounts payable and accrued expenses



(1,015)



47

Accrued income taxes payable/receivable



31



(595)

Retirement benefits



(246)



(116)

Other



(172)



176

Net cash provided by operating activities



4,139



2,896








Cash Flows from Investing Activities







Collections of receivables (excluding receivables related to sales)



19,143



17,592

Proceeds from maturities and sales of marketable securities



333



127

Proceeds from sales of equipment on operating leases



1,451



1,445

Cost of receivables acquired (excluding receivables related to sales)



(21,113)



(20,714)

Purchases of marketable securities



(572)



(213)

Purchases of property and equipment



(1,043)



(887)

Cost of equipment on operating leases acquired



(2,165)



(1,968)

Collateral on derivatives – net



390



240

Other



(95)



(185)

Net cash used for investing activities



(3,671)



(4,563)








Cash Flows from Financing Activities







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



(992)



5,040

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



15,512



9,972

Payments of borrowings (original maturities greater than three months)



(10,792)



(5,862)

Repurchases of common stock



(3,227)



(4,663)

Dividends paid



(1,202)



(1,065)

Other



(88)



(43)

Net cash provided by (used for) financing activities



(789)



3,379








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



(6)



125








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



(327)



1,837

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



7,620



4,941

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


$

7,293


$

6,778



See Condensed Notes to Interim Consolidated Financial Statements.

DEERE & COMPANY
Condensed Notes to Interim Consolidated Financial Statements
(In millions of dollars) Unaudited

(1)  Special Items

2024

Employee-Separation Programs

In the third quarter of 2024, the company implemented employee-separation programs for its salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs' main purpose was to help meet the company's strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period.

The total programs' pretax expenses are estimated to be approximately $150 million, with $124 million recorded in the third quarter of 2024. The remaining expenses are expected to be recorded primarily in 2025. The expenses for the three months and nine months ended July 28, 2024 were recorded as follows in millions of dollars:



PPA


SAT


CF


FS


Total

Employee-Separation Programs:
















Cost of sales


$

18


$

9


$

8





$

35

Research and development expenses



19



6



1






26

Selling, administrative and general expenses



25



14



11


$

9



59

Total operating profit decrease


$

62


$

29


$

20


$

9



120

Non-operating profit expenses*















4

Total














$

124

*Relates primarily to corporate expenses.

Annual pretax savings from these programs are estimated to be approximately $230 million, of which $100 million is estimated to be realized in 2024.

Banco John Deere

In the third quarter of 2024, the company's board of directors authorized the sale of 50 percent of the company's ownership in its wholly owned subsidiary, Banco John Deere S.A. (BJD). BJD, located in Brazil, is included in the company's financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. The transaction will reduce the company's incremental risk as it continues to grow in the Brazilian market. As a result, the company classified the BJD business as held for sale, including a reversal of $38 million in allowance for credit losses, and the establishment of a $53 million valuation allowance on the assets held for sale. The net impact of these entries was a pretax and after-tax loss of $15 million recorded in "Selling, administrative and general expenses."

In August 2024, the company entered into an agreement with a Brazilian bank, Banco Bradesco S.A., to invest and become 50 percent owner of BJD.

2023

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.

Financial Services Financing Incentives Correction

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 in "Selling, administrative and general expenses" by financial services.

Summary of 2024 and 2023 Special Items

The following table summarizes the operating profit impact of the special items recorded in millions of dollars for the three months and nine months ended July 28, 2024 and July 30, 2023.



Three Months


Nine Months



PPA


SAT


CF


FS


Total


PPA


SAT


CF


FS


Total

2024 Expense:































Employee-separation programs


$

62


$

29


$

20


$

9


$

120


$

62


$

29


$

20


$

9


$

120

BJD remeasurement












15



15












15



15

Total 2024 expense



62



29



20



24



135



62



29



20



24



135
































2023 Expense:































Financing incentives correction



























173



173

Period over period change


$

62


$

29


$

20


$

24


$

135


$

62


$

29


$

20


$

(149)


$

(38)

(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 July 28, 2024 and July 30, 2023

(In millions of dollars) Unaudited



EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




2024


2023


2024


2023


2024


2023


2024


2023


Net Sales and Revenues


























Net sales


$

11,387


$

14,284














$

11,387


$

14,284


Finance and interest income



155



210


$

1,537


$

1,335


$

(231)


$

(292)



1,461



1,253

1

Other income



246



222



130



110



(72)



(68)



304



264

2, 3

Total



11,788



14,716



1,667



1,445



(303)



(360)



13,152



15,801




























Costs and Expenses


























Cost of sales



7,855



9,630









(7)



(6)



7,848



9,624

4

Research and development expenses



567



528















567



528


Selling, administrative and general expenses



962



913



318



199



(2)



(2)



1,278



1,110

4

Interest expense



91



94



812



622



(63)



(93)



840



623

1

Interest compensation to Financial Services



168



199









(168)



(199)







1

Other operating expenses



(16)



34



343



336



(63)



(60)



264



310

3, 5

Total



9,627



11,398



1,473



1,157



(303)



(360)



10,797



12,195




























Income before Income Taxes



2,161



3,318



194



288









2,355



3,606


Provision for income taxes



583



564



42



72









625



636




























Income after Income Taxes



1,578



2,754



152



216









1,730



2,970


Equity in income of unconsolidated affiliates






2



1












1



2




























Net Income



1,578



2,756



153



216









1,731



2,972


Less: Net loss attributable to noncontrolling interests



(3)



(6)















(3)



(6)


Net Income Attributable to Deere & Company


$

1,581


$

2,762


$

153


$

216








$

1,734


$

2,978






























1

Elimination of intercompany interest income and expense.

2

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

3

Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.

4

Elimination of intercompany service fees.

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 28, 2024 and July 30, 2023

(In millions of dollars) Unaudited



EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




2024


2023


2024


2023


2024


2023


2024


2023


Net Sales and Revenues


























Net sales


$

35,484


$

41,765














$

35,484


$

41,765


Finance and interest income



441



444


$

4,466


$

3,609


$

(700)


$

(727)



4,207



3,326

1

Other income



732



639



341



378



(192)



(269)



881



748

2, 3

Total



36,657



42,848



4,807



3,987



(892)



(996)



40,572



45,839




























Costs and Expenses


























Cost of sales



24,226



28,306









(21)



(18)



24,205



28,288

4

Research and development expenses



1,664



1,571















1,664



1,571


Selling, administrative and general expenses



2,844



2,630



771



769



(7)



(7)



3,608



3,392

4

Interest expense



314



298



2,354



1,604



(190)



(231)



2,478



1,671

1

Interest compensation to Financial Services



510



496









(510)



(496)







1

Other operating expenses



76



172



1,018



1,043



(164)



(244)



930



971

3, 5

Total



29,634



33,473



4,143



3,416



(892)



(996)



32,885



35,893




























Income before Income Taxes



7,023



9,375



664



571









7,687



9,946


Provision for income taxes



1,700



2,020



145



144









1,845



2,164




























Income after Income Taxes



5,323



7,355



519



427









5,842



7,782


Equity in income of unconsolidated affiliates






3



4



2









4



5




























Net Income



5,323



7,358



523



429









5,846



7,787


Less: Net loss attributable to noncontrolling interests



(9)



(10)















(9)



(10)


Net Income Attributable to Deere & Company


$

5,332


$

7,368


$

523


$

429








$

5,855


$

7,797






























1

Elimination of intercompany interest income and expense.

2

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

3

Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.

4

Elimination of intercompany service fees.

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 28


Oct 29


Jul 30


Jul 28


Oct 29


Jul 30


Jul 28


Oct 29


Jul 30


Jul 28


Oct 29


Jul 30





2024


2023


2023


2024


2023


2023


2024


2023


2023


2024


2023


2023



Assets







































Cash and cash equivalents


$

5,385


$

5,720


$

4,858


$

1,619


$

1,738


$

1,718











$

7,004


$

7,458


$

6,576



Marketable securities



155



104



3



985



842



838












1,140



946



841



Receivables from Financial Services



3,951



4,516



5,312











$

(3,951)


$

(4,516)


$

(5,312)










6


Trade accounts and notes receivable – net



1,150



1,320



1,589



8,890



8,687



9,991



(2,571)



(2,268)



(2,283)



7,469



7,739



9,297

7


Financing receivables – net



82



64



60



43,814



43,609



41,242












43,896



43,673



41,302



Financing receivables securitized – net



2









8,272



7,335



7,001












8,274



7,335



7,001



Other receivables



1,821



1,813



2,599



494



869



599



(45)



(59)



(80)



2,270



2,623



3,118

7


Equipment on operating leases – net












7,118



6,917



6,709












7,118



6,917



6,709



Inventories



7,696



8,160



9,350





















7,696



8,160



9,350



Property and equipment – net



7,058



6,843



6,385



34



36



33












7,092



6,879



6,418



Goodwill



3,960



3,900



3,994





















3,960



3,900



3,994



Other intangible assets – net



1,030



1,133



1,199





















1,030



1,133



1,199



Retirement benefits



3,047



2,936



3,503



80



72



71



(1)



(1)



(1)



3,126



3,007



3,573

8


Deferred income taxes



2,192



2,133



1,393



35



68



65



(329)



(387)



(98)



1,898



1,814



1,360

9


Other assets



2,236



1,948



2,083



675



559



583



(8)



(4)



(7)



2,903



2,503



2,659



Assets held for sale












2,965


















2,965









Total Assets


$

39,765


$

40,590


$

42,328


$

74,981


$

70,732


$

68,850


$

(6,905)


$

(7,235)


$

(7,781)


$

107,841


$

104,087


$

103,397










































Liabilities and Stockholders' Equity














































































Liabilities







































Short-term borrowings


$

983


$

1,230


$

1,773


$

14,311


$

16,709


$

15,370











$

15,294


$

17,939


$

17,143



Short-term securitization borrowings



1









7,868



6,995



6,608












7,869



6,995



6,608



Payables to Equipment Operations












3,951



4,516



5,312


$

(3,951)


$

(4,516)


$

(5,312)










6


Accounts payable and accrued expenses



13,880



14,862



14,403



3,141



3,599



3,307



(2,624)



(2,331)



(2,370)



14,397



16,130



15,340

7


Deferred income taxes



420



452



420



390



455



184



(329)



(387)



(98)



481



520



506

9


Long-term borrowings



6,592



7,210



7,299



36,100



31,267



30,813












42,692



38,477



38,112



Retirement benefits and other liabilities



2,048



2,032



2,423



109



109



114



(1)



(1)



(1)



2,156



2,140



2,536

8


Liabilities held for sale












1,803


















1,803









Total liabilities



23,924



25,786



26,318



67,673



63,650



61,708



(6,905)



(7,235)



(7,781)



84,692



82,201



80,245










































Redeemable noncontrolling interest



84



97



101





















84



97



101










































Stockholders' Equity







































Total Deere & Company stockholders' equity



23,062



21,785



23,048



7,308



7,082



7,142



(7,308)



(7,082)



(7,142)



23,062



21,785



23,048

10


Noncontrolling interests



3



4



3





















3



4



3



Financial Services equity



(7,308)



(7,082)



(7,142)












7,308



7,082



7,142










10


Adjusted total stockholders' equity



15,757



14,707



15,909



7,308



7,082



7,142












23,065



21,789



23,051



Total Liabilities and Stockholders' Equity


$

39,765


$

40,590


$

42,328


$

74,981


$

70,732


$

68,850


$

(6,905)


$

(7,235)


$

(7,781)


$

107,841


$

104,087


$

103,397












































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 28, 2024 and July 30, 2023

(In millions of dollars) Unaudited



EQUIPMENT


FINANCIAL








OPERATIONS


SERVICES


ELIMINATIONS


CONSOLIDATED




2024


2023


2024


2023


2024


2023


2024


2023


Cash Flows from Operating Activities


























Net income


$

5,323


$

7,358


$

523


$

429








$

5,846


$

7,787


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


























Provision (credit) for credit losses



10



3



212



(67)









222



(64)


Provision for depreciation and amortization



932



872



773



757


$

(107)


$

(102)



1,598



1,527

11

Impairments and other adjustments









53



173









53



173


Share-based compensation expense















159



112



159



112

12

Distributed earnings of Financial Services



250



31









(250)



(31)







13

Credit for deferred income taxes



(49)



(322)



(76)



(107)









(125)



(429)


Changes in assets and liabilities:


























Receivables related to sales



106



(293)









(2,552)



(4,766)



(2,446)



(5,059)

14, 16

Inventories



391



(534)









(157)



(129)



234



(663)

15

Accounts payable and accrued expenses



(924)



730



212



303



(303)



(986)



(1,015)



47

16

Accrued income taxes payable/receivable



13



(619)



18



24









31



(595)


Retirement benefits



(241)



(115)



(5)



(1)









(246)



(116)


Other



(109)



247



44



(15)



(107)



(56)



(172)



176

11, 12, 15

Net cash provided by operating activities



5,702



7,358



1,754



1,496



(3,317)



(5,958)



4,139



2,896




























Cash Flows from Investing Activities


























Collections of receivables (excluding receivables related to sales)









19,826



18,440



(683)



(848)



19,143



17,592

14

Proceeds from maturities and sales of marketable securities



56



68



277



59









333



127


Proceeds from sales of equipment on operating leases









1,451



1,445









1,451



1,445


Cost of receivables acquired (excluding receivables related to sales)









(21,395)



(21,043)



282



329



(21,113)



(20,714)

14

Purchases of marketable securities



(220)



(19)



(352)



(194)









(572)



(213)


Purchases of property and equipment



(1,041)



(885)



(2)



(2)









(1,043)



(887)


Cost of equipment on operating leases acquired









(2,377)



(2,143)



212



175



(2,165)



(1,968)

15

Decrease (increase) in investment in Financial Services



11



(811)









(11)



811







17

Increase in trade and wholesale receivables









(3,255)



(6,270)



3,255



6,270







14

Collateral on derivatives – net









390



240









390



240


Other



(88)



(210)



(8)



24



1



1



(95)



(185)


Net cash used for investing activities



(1,282)



(1,857)



(5,445)



(9,444)



3,056



6,738



(3,671)



(4,563)




























Cash Flows from Financing Activities


























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



81



(152)



(1,073)



5,192









(992)



5,040


Change in intercompany receivables/payables



558



1,476



(558)



(1,476)














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



115



60



15,397



9,912









15,512



9,972


Payments of borrowings (original maturities greater than three months)



(1,061)



(116)



(9,731)



(5,746)









(10,792)



(5,862)


Repurchases of common stock



(3,227)



(4,663)















(3,227)



(4,663)


Capital Investment from Equipment Operations









(11)



811



11



(811)







17

Dividends paid



(1,202)



(1,065)



(250)



(31)



250



31



(1,202)



(1,065)

13

Other



(37)



4



(51)



(47)









(88)



(43)


Net cash provided by (used for) financing activities



(4,773)



(4,456)



3,723



8,615



261



(780)



(789)



3,379




























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



12



108



(18)



17









(6)



125




























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



(341)



1,153



14



684









(327)



1,837


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



5,755



3,781



1,865



1,160









7,620



4,941


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


$

5,414


$

4,934


$

1,879


$

1,844








$

7,293


$

6,778






























11

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

12

Reclassification of share-based compensation expense.

13

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

14

Primarily reclassification of receivables related to the sale of equipment.

15

Reclassification of direct lease agreements with retail customers.

16

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

17

Elimination of change in investment from Equipment Operations to Financial Services.

 

 

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SOURCE John Deere Company

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