MOLINE, Ill., Aug. 21, 2015 /CNW/ -- Net income
attributable to Deere & Company (NYSE: DE) was
$511.6 million, or $1.53 per share, for the third quarter ended
July 31, compared with $850.7 million, or $2.33 per share, for the same period last
year.
For the first nine months of the year, net income attributable
to Deere & Company was $1.589
billion, or $4.67 per share,
compared with $2.513 billion, or
$6.79 per share, last year.
Worldwide net sales and revenues decreased 20 percent, to
$7.594 billion, for the third quarter
and were down 18 percent, to $22.147
billion, for nine months. Net sales of the equipment
operations were $6.840 billion for
the quarter and $19.843 billion for
nine months, compared with $8.723
billion and $24.918 billion
for the periods last year.
"John Deere's third-quarter results reflected the continuing
impact of the downturn in the farm economy as well as lower demand
for construction equipment," said Samuel R.
Allen, chairman and chief executive officer. "Nevertheless,
all of Deere's businesses remained solidly profitable, benefiting
from the sound execution of our business plans and the success of
our efforts to develop a more agile cost structure. As a result,
the company continues to be well-positioned to provide customers
with technologically advanced products and services, while funding
its growth plans and returning cash to stockholders."
Summary of Operations
Net sales of the worldwide equipment operations declined 22
percent for the quarter and 20 percent for nine months compared
with the same periods a year ago. Sales included price realization
of 2 percent for the quarter and nine months. Additionally, sales
included an unfavorable currency-translation effect of 6 percent
for the quarter and 4 percent for nine months. Equipment net sales
in the United States and
Canada decreased 21 percent for
the quarter and 17 percent year to date. Outside the U.S. and
Canada, net sales fell 23 percent
for the quarter and 26 percent for nine months, with unfavorable
currency-translation effects of 12 percent and 9 percent for the
periods.
Deere's equipment operations reported operating profit of
$601 million for the quarter and
$1.842 billion for nine months,
compared with $1.135 billion and
$3.387 billion last year. For both
periods, the decline was due primarily to lower shipment volumes,
the impact of a less favorable product mix, and the unfavorable
effects of foreign-currency exchange. These factors were partially
offset by price realization and lower production costs for the
quarter and by price realization, lower selling, administrative and
general expenses, and lower production costs for the year to
date.
Net income of the company's equipment operations was
$344 million for the third quarter
and $1.109 billion for the first nine
months, compared with $680 million
and $2.061 billion in 2014. In
addition to the operating factors mentioned above, a lower
effective tax rate benefited both quarterly and year-to-date
results.
Financial services reported net income attributable to Deere
& Company of $153.4 million for
the quarter and $480.0 million for
nine months compared with $162.3
million and $452.2 million
last year. Lower results for the quarter were primarily due to less
favorable financing spreads, partially offset by lower selling,
administrative and general expenses. Year-to-date results improved
as a result of the previously announced crop insurance sale and
higher crop insurance margins experienced prior to divestiture,
growth in the average credit portfolio, and lower selling,
administrative and general expenses, partially offset by less
favorable financing spreads. Year-to-date results in 2014 also
benefited from a more favorable effective tax rate.
Company Outlook & Summary
Company equipment sales are projected to decrease about 21
percent for fiscal 2015 and to be down about 24 percent for the
fourth quarter compared with year-ago periods. Included in
the forecast is a negative foreign-currency translation effect of
about 4 percent for the full year and 5 percent for the fourth
quarter. For fiscal 2015, net income attributable to Deere
& Company is anticipated to be about $1.8 billion.
According to Allen, Deere's performance in 2015 underscores its
success establishing a wider range of revenue sources and more
durable business model. "By continuing to report solid profits in a
difficult environment, the company is showing great resilience and
performing much better than in previous agricultural
downturns."
Longer term, Allen said he remained quite confident about the
company's prospects. "We believe our steady investment in new
products and geographies will make Deere the provider of choice for
a growing global customer base and that the impact of these actions
will become increasingly clear when our end markets recover," said
Allen. "In our view, favorable trends based on a growing, more
affluent, and increasingly mobile population, have ample staying
power. For all these reasons, we have confidence in the company's
present course and its ability to deliver significant value to
customers and investors in the years ahead."
Equipment Division Performance
Agriculture & Turf. Sales fell 24 percent for the
quarter and 25 percent for nine months due largely to lower
shipment volumes and the unfavorable effects of currency
translation. These factors were partially offset by price
realization.
Operating profit was $472 million
for the quarter and $1.378 billion
year to date, compared with $941
million and $2.967 billion,
respectively, last year. Lower results for both periods were driven
primarily by the impact of lower shipment volumes, a less favorable
product mix, and the unfavorable effects of foreign-currency
exchange. Partially offsetting these factors were price realization
and lower production costs in the third quarter and price
realization, lower selling, administrative and general expenses,
and lower production costs for the first nine months.
Construction & Forestry. Construction and forestry
sales decreased 13 percent for the quarter and were flat for the
first nine months. Sales for the quarter were lower mainly as a
result of lower shipment volumes and the unfavorable effects of
currency translation, partially offset by price realization. On a
year-to-date basis, higher shipment volumes and price realization
were offset by the unfavorable effects of currency
translation.
Operating profit was $129 million
for the quarter and $464 million for
nine months, compared with $194
million and $420 million for
the corresponding periods last year. Operating profit decreased for
the quarter mainly due to lower shipment volumes and the
unfavorable effects of foreign-currency exchange, partially offset
by price realization. Year-to-date results improved due to price
realization, lower selling, administrative and general expenses,
and higher shipment volumes, partially offset by unfavorable
foreign-currency effects.
Market Conditions & Outlook
Agriculture & Turf. Deere's worldwide sales of
agriculture and turf equipment are forecast to decrease by about 25
percent for fiscal-year 2015, including a negative
currency-translation effect of about 5 percent.
Lower commodity prices and falling farm incomes are continuing
to pressure demand for agricultural machinery, with the declines
most pronounced in higher-horsepower models. Conditions are more
positive in the U.S. livestock sector, supporting some improvement
in the sales of smaller sizes of equipment. Based on these factors,
industry sales for agricultural equipment in the U.S. and
Canada are forecast to be down
about 25 percent for 2015.
Full-year 2015 industry sales in the EU28 are forecast to be
down about 10 percent, with the decline attributable to lower crop
prices and farm incomes as well as pressure on the dairy sector. In
South America, industry sales of
tractors and combines are projected to be down 20 to 25 percent
mainly as a result of economic uncertainty in Brazil and higher interest rates on
government-sponsored financing. Asian sales are projected to be
down moderately, with most of the decline in India and China. Industry sales in the Commonwealth of
Independent States are expected to be down significantly due to
economic pressures and tight credit conditions.
Industry sales of turf and utility equipment in the U.S. and
Canada are expected to be flat to
up 5 percent for 2015, benefiting from general economic growth.
Construction & Forestry. Deere's worldwide sales of
construction and forestry equipment are forecast to be down about 5
percent for 2015, including a negative currency-translation effect
of about 3 percent.
The forecast decline in sales reflects the impact of weakening
conditions in the North American energy sector, as well as lower
sales outside the U.S. and Canada.
In forestry, global sales are expected to be flat to up 5 percent
in comparison with last year's attractive levels, as gains in the
U.S. and Europe are offset by
declines elsewhere.
Financial Services. Fiscal-year 2015 net income
attributable to Deere & Company for the financial services
operations is expected to be approximately $630 million. The forecast improvement over last
year is primarily due to the divestiture of the crop insurance
business and growth in the average credit portfolio. These factors
are being partially offset by less favorable financing spreads, a
less favorable tax rate, and an increased provision for credit
losses.
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.
Net income attributable to John Deere Capital Corporation was
$126.9 million for the third quarter
and $376.4 million year to date,
compared with $129.2 million and
$390.0 million for the respective
periods last year. The decline for the quarter was primarily due to
less favorable financing spreads, partially offset by lower
selling, administrative and general expenses. The decline in
year-to-date results was primarily due to less favorable financing
spreads, partially offset by growth in the credit portfolio and
lower selling, administrative and general expenses. Last
year's year-to-date results also benefited from a favorable
effective tax rate.
Net receivables and leases financed by JDCC were $33.400 billion at July
31, 2015, compared with $33.534
billion last year.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements under "Company Outlook
& Summary," "Market Conditions & Outlook," and other
forward-looking statements herein that relate to future events,
expectations, trends and operating periods involve certain factors
that are subject to change, and important risks and uncertainties
that could cause actual results to differ materially. Some of
these risks and uncertainties could affect particular lines of
business, while others could affect all of the company's
businesses.
The company's agricultural equipment business is subject to a
number of uncertainties including the many interrelated factors
that affect farmers' confidence. These factors include demand
for agricultural products, world grain stocks, weather conditions
(including its effects on timely planting and harvesting), soil
conditions (including low subsoil moisture), harvest yields, prices
for commodities and livestock, crop and livestock production
expenses, availability of transport for crops, the growth and
sustainability of non-food uses for some crops (including ethanol
and biodiesel production), real estate values, available acreage
for farming, the land ownership policies of various governments,
changes in government farm programs and policies (including those
in Argentina, Brazil, China, the European Union, India, Russia
and the U.S.), international reaction to such programs, changes in
and effects of crop insurance programs, global trade agreements,
animal diseases and their effects on poultry, beef and pork
consumption and prices, crop pests and diseases, and the level of
farm product exports (including concerns about genetically modified
organisms).
Factors affecting the outlook for the company's turf and utility
equipment include consumer confidence, weather conditions, customer
profitability, consumer borrowing patterns, consumer purchasing
preferences, housing starts, infrastructure investment, spending by
municipalities and golf courses, and consumable input costs.
Consumer spending patterns, real estate and housing prices, the
number of housing starts and interest rates are especially
important to sales of the company's construction and forestry
equipment. The levels of public and non-residential
construction also impact the results of the company's construction
and forestry segment. Prices for pulp, paper, lumber and
structural panels are important to sales of forestry equipment.
All of the company's businesses and its reported results are
affected by general economic conditions in the global markets and
industries in which the company operates, especially material
changes in economic activity in these markets and industries;
customer confidence in general economic conditions; foreign
currency exchange rates and their volatility, especially
fluctuations in the value of the U.S. dollar; interest rates; and
inflation and deflation rates. Government spending and taxing
could adversely affect the economy, employment, consumer and
corporate spending, and company results.
Customer and company operations and results could be affected by
changes in weather patterns (including the effects of drought and
drier than normal conditions in certain markets); the political and
social stability of the global markets in which the company
operates; the effects of, or response to, terrorism and security
threats; wars and other conflicts and the threat thereof and the
response thereto; natural disasters; and the spread of major
epidemics.
Significant changes in market liquidity conditions and any
failure to comply with financial covenants in credit agreements
could impact access to funding and funding costs, which could
reduce the company's earnings and cash flows. Financial
market conditions could also negatively impact customer access to
capital for purchases of the company's products and customer
confidence and purchase decisions; borrowing and repayment
practices; and the number and size of customer loan delinquencies
and defaults. A debt crisis, in Europe or elsewhere, could negatively impact
currencies, global financial markets, social and political
stability, funding sources and costs, asset and obligation values,
customers, suppliers, demand for equipment, and company operations
and results. The company's investment management activities
could be impaired by changes in the equity, bond and other
financial markets, which would negatively affect earnings.
Additional factors that could materially affect the company's
operations, access to capital, expenses and results include changes
in and the impact of governmental trade, banking, monetary and
fiscal policies, including financial regulatory reform and its
effects on the consumer finance industry, derivatives, funding
costs and other areas, and governmental programs, policies, tariffs
and sanctions in particular jurisdictions or for the benefit of
certain industries or sectors (including protectionist, economic,
punitive and expropriation policies and trade and licensing
restrictions that could disrupt international commerce); actions by
the U.S. Federal Reserve Board and other central banks; actions by
the U.S. Securities and Exchange Commission (SEC), the U.S.
Commodity Futures Trading Commission and other financial
regulators; actions by environmental, health and safety regulatory
agencies, including those related to engine emissions, carbon and
other greenhouse gas emissions, noise and the effects of climate
change; changes in labor regulations; changes to accounting
standards; changes in tax rates, estimates, and regulations and
company actions related thereto; compliance with U.S. and foreign
laws when expanding to new markets and otherwise; and actions by
other regulatory bodies including changes in laws and regulations
affecting the sectors in which the company operates. Trade,
financial and other sanctions imposed by the U.S., the European
Union, Russia and other countries
could negatively impact company assets, operations, sales,
forecasts and results. Customer and company operations and
results also could be affected by changes to GPS radio frequency
bands or their permitted uses.
Other factors that could materially affect results include
production, design and technological innovations and difficulties,
including capacity and supply constraints and prices; the
availability and prices of strategically sourced materials,
components and whole goods; delays or disruptions in the company's
supply chain or the loss of liquidity by suppliers; disruptions of
infrastructures that support communications, operations or
distribution; the failure of suppliers to comply with laws,
regulations and company policy pertaining to employment, human
rights, health, safety, the environment and other ethical business
practices; events that damage the company's reputation or brand;
significant investigations, claims, lawsuits or other legal
proceedings; start-up of new plants and new products; the success
of new product initiatives and customer acceptance of new products;
changes in customer product preferences and sales mix whether as a
result of changes in equipment design to meet government
regulations or for other reasons; gaps or limitations in rural
broadband coverage, capacity and speed needed to support technology
solutions; oil and energy prices, supplies and volatility; the
availability and cost of freight; actions of competitors in the
various industries in which the company competes, particularly
price discounting; dealer practices especially as to levels of new
and used field inventories; labor relations and contracts;
acquisitions and divestitures of businesses; the integration of new
businesses; the implementation of organizational changes;
difficulties related to the conversion and implementation of
enterprise resource planning systems that disrupt business,
negatively impact supply or distribution relationships or create
higher than expected costs; security breaches and other disruptions
to the company's information technology infrastructure; and changes
in company declared dividends and common stock issuances and
repurchases.
Company results are also affected by changes in the level and
funding of employee retirement benefits, changes in market values
of investment assets, the level of interest and discount rates, and
compensation, retirement and mortality rates which impact
retirement benefit costs, and significant changes in health care
costs including those which may result from governmental
action.
The liquidity and ongoing profitability of John Deere Capital
Corporation and other credit subsidiaries depend largely on timely
access to capital in order to meet future cash flow requirements,
to fund operations and costs associated with engaging in
diversified funding activities, and to fund purchases of the
company's products. If general economic conditions
deteriorate or capital markets become volatile, funding could be
unavailable or insufficient. Additionally, customer
confidence levels may result in declines in credit applications and
increases in delinquencies and default rates, which could
materially impact write-offs and provisions for credit losses.
The company's outlook is based upon assumptions relating to the
factors described above, which are sometimes based upon estimates
and data prepared by government agencies. Such estimates and
data are often revised. The company, except as required by
law, undertakes no obligation to update or revise its outlook,
whether as a result of new developments or otherwise. Further
information concerning the company and its businesses, including
factors that potentially could materially affect the company's
financial results, is included in the company's other filings with
the SEC (including, but not limited to, the factors discussed in
Item 1A. Risk Factors of the company's most recent annual report on
Form 10-K and quarterly reports on Form 10-Q).
Third Quarter 2015
Press Release
(in millions of dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
July 31
|
|
July 31
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
5,308
|
|
$
|
6,969
|
|
-24
|
|
$
|
15,155
|
|
$
|
20,211
|
|
-25
|
Construction and
forestry
|
|
|
1,532
|
|
|
1,754
|
|
-13
|
|
|
4,688
|
|
|
4,707
|
|
|
Total net
sales
|
|
|
6,840
|
|
|
8,723
|
|
-22
|
|
|
19,843
|
|
|
24,918
|
|
-20
|
Financial
services
|
|
|
636
|
|
|
656
|
|
-3
|
|
|
1,937
|
|
|
1,815
|
|
+7
|
Other
revenues
|
|
|
118
|
|
|
121
|
|
-2
|
|
|
367
|
|
|
369
|
|
-1
|
Total net sales
and revenues
|
|
$
|
7,594
|
|
$
|
9,500
|
|
-20
|
|
$
|
22,147
|
|
$
|
27,102
|
|
-18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
472
|
|
$
|
941
|
|
-50
|
|
$
|
1,378
|
|
$
|
2,967
|
|
-54
|
Construction and
forestry
|
|
|
129
|
|
|
194
|
|
-34
|
|
|
464
|
|
|
420
|
|
+10
|
Financial
services
|
|
|
239
|
|
|
249
|
|
-4
|
|
|
737
|
|
|
660
|
|
+12
|
Total operating
profit
|
|
|
840
|
|
|
1,384
|
|
-39
|
|
|
2,579
|
|
|
4,047
|
|
-36
|
Reconciling items
**
|
|
|
(87)
|
|
|
(83)
|
|
+5
|
|
|
(254)
|
|
|
(324)
|
|
-22
|
Income
taxes
|
|
|
(241)
|
|
|
(450)
|
|
-46
|
|
|
(736)
|
|
|
(1,210)
|
|
-39
|
Net income
attributable to Deere & Company
|
|
$
|
512
|
|
$
|
851
|
|
-40
|
|
$
|
1,589
|
|
$
|
2,513
|
|
-37
|
|
|
*
|
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 and net income attributable to noncontrolling
interests.
|
DEERE &
COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended July 31, 2015 and 2014
(In millions of dollars and shares except per share amounts)
Unaudited
|
|
|
2015
|
|
2014
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
6,839.5
|
|
$
|
8,723.0
|
Finance and interest
income
|
|
|
596.7
|
|
|
573.5
|
Other
income
|
|
|
157.5
|
|
|
203.7
|
Total
|
|
|
7,593.7
|
|
|
9,500.2
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,358.0
|
|
|
6,611.3
|
Research and
development expenses
|
|
|
346.8
|
|
|
362.1
|
Selling,
administrative and general expenses
|
|
|
755.3
|
|
|
820.7
|
Interest
expense
|
|
|
171.5
|
|
|
153.9
|
Other operating
expenses
|
|
|
223.6
|
|
|
260.0
|
Total
|
|
|
6,855.2
|
|
|
8,208.0
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
738.5
|
|
|
1,292.2
|
Provision for income
taxes
|
|
|
241.0
|
|
|
450.2
|
Income of
Consolidated Group
|
|
|
497.5
|
|
|
842.0
|
Equity in income of
unconsolidated affiliates
|
|
|
14.2
|
|
|
8.9
|
Net
Income
|
|
|
511.7
|
|
|
850.9
|
Less: Net income
attributable to noncontrolling interests
|
|
|
.1
|
|
|
.2
|
Net Income
Attributable to Deere & Company
|
|
$
|
511.6
|
|
$
|
850.7
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
1.54
|
|
$
|
2.35
|
Diluted
|
|
$
|
1.53
|
|
$
|
2.33
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
331.4
|
|
|
361.9
|
Diluted
|
|
|
334.1
|
|
|
365.1
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Nine Months Ended July 31, 2015 and 2014
(In millions of dollars and shares except per share amounts)
Unaudited
|
|
|
2015
|
|
2014
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
19,843.1
|
|
$
|
24,917.8
|
Finance and interest
income
|
|
|
1,766.7
|
|
|
1,649.0
|
Other
income
|
|
|
537.7
|
|
|
535.3
|
Total
|
|
|
22,147.5
|
|
|
27,102.1
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
15,472.8
|
|
|
18,678.7
|
Research and
development expenses
|
|
|
1,021.1
|
|
|
1,039.9
|
Selling,
administrative and general expenses
|
|
|
2,154.2
|
|
|
2,433.0
|
Interest
expense
|
|
|
517.1
|
|
|
491.5
|
Other operating
expenses
|
|
|
659.1
|
|
|
738.1
|
Total
|
|
|
19,824.3
|
|
|
23,381.2
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
2,323.2
|
|
|
3,720.9
|
Provision for income
taxes
|
|
|
735.6
|
|
|
1,209.6
|
Income of
Consolidated Group
|
|
|
1,587.6
|
|
|
2,511.3
|
Equity in income of
unconsolidated affiliates
|
|
|
1.8
|
|
|
2.2
|
Net
Income
|
|
|
1,589.4
|
|
|
2,513.5
|
Less: Net income
attributable to noncontrolling interests
|
|
|
.6
|
|
|
1.0
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,588.8
|
|
$
|
2,512.5
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
4.71
|
|
$
|
6.85
|
Diluted
|
|
$
|
4.67
|
|
$
|
6.79
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
337.3
|
|
|
366.8
|
Diluted
|
|
|
339.9
|
|
|
370.1
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited
|
|
|
July 31
|
|
October 31
|
|
July 31
|
|
|
2015
|
|
2014
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,130.8
|
|
$
|
3,787.0
|
|
$
|
3,034.7
|
Marketable
securities
|
|
|
421.1
|
|
|
1,215.1
|
|
|
1,489.4
|
Receivables from
unconsolidated affiliates
|
|
|
43.2
|
|
|
30.2
|
|
|
33.3
|
Trade accounts and
notes receivable - net
|
|
|
4,220.4
|
|
|
3,277.6
|
|
|
4,551.8
|
Financing receivables
- net
|
|
|
24,973.4
|
|
|
27,422.2
|
|
|
27,079.9
|
Financing receivables
securitized - net
|
|
|
4,737.8
|
|
|
4,602.3
|
|
|
4,264.2
|
Other
receivables
|
|
|
823.1
|
|
|
1,500.3
|
|
|
1,193.1
|
Equipment on
operating leases - net
|
|
|
4,426.0
|
|
|
4,015.5
|
|
|
3,580.0
|
Inventories
|
|
|
4,319.0
|
|
|
4,209.7
|
|
|
5,439.0
|
Property and
equipment - net
|
|
|
5,126.4
|
|
|
5,577.8
|
|
|
5,385.5
|
Investments in
unconsolidated affiliates
|
|
|
310.6
|
|
|
303.2
|
|
|
310.2
|
Goodwill
|
|
|
715.9
|
|
|
791.2
|
|
|
829.8
|
Other intangible
assets - net
|
|
|
57.8
|
|
|
68.8
|
|
|
69.4
|
Retirement
benefits
|
|
|
335.0
|
|
|
262.0
|
|
|
611.7
|
Deferred income
taxes
|
|
|
2,705.0
|
|
|
2,776.6
|
|
|
2,564.0
|
Other
assets
|
|
|
1,586.7
|
|
|
1,496.9
|
|
|
1,312.5
|
Total
Assets
|
|
$
|
58,932.2
|
|
$
|
61,336.4
|
|
$
|
61,748.5
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
9,347.9
|
|
$
|
8,019.2
|
|
$
|
8,580.8
|
Short-term
securitization borrowings
|
|
|
4,595.4
|
|
|
4,558.5
|
|
|
4,142.8
|
Payables to
unconsolidated affiliates
|
|
|
73.7
|
|
|
101.0
|
|
|
90.4
|
Accounts payable and
accrued expenses
|
|
|
7,235.8
|
|
|
8,554.1
|
|
|
8,432.9
|
Deferred income
taxes
|
|
|
150.9
|
|
|
160.9
|
|
|
160.1
|
Long-term
borrowings
|
|
|
23,200.9
|
|
|
24,380.7
|
|
|
24,035.5
|
Retirement benefits
and other liabilities
|
|
|
6,602.6
|
|
|
6,496.5
|
|
|
5,473.5
|
Total
liabilities
|
|
|
51,207.2
|
|
|
52,270.9
|
|
|
50,916.0
|
Total Deere &
Company stockholders' equity
|
|
|
7,723.1
|
|
|
9,062.6
|
|
|
10,830.0
|
Noncontrolling
interests
|
|
|
1.9
|
|
|
2.9
|
|
|
2.5
|
Total stockholders'
equity
|
|
|
7,725.0
|
|
|
9,065.5
|
|
|
10,832.5
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
58,932.2
|
|
$
|
61,336.4
|
|
$
|
61,748.5
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended July 31, 2015 and 2014
(In millions of dollars) Unaudited
|
|
|
2015
|
|
2014
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
1,589.4
|
|
$
|
2,513.5
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
35.4
|
|
|
29.6
|
Provision for
depreciation and amortization
|
|
|
1,029.2
|
|
|
957.4
|
Impairment
charges
|
|
|
|
|
|
62.3
|
Share-based
compensation expense
|
|
|
47.7
|
|
|
60.6
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(5.2)
|
|
|
(2.3)
|
Provision (credit) for
deferred income taxes
|
|
|
73.0
|
|
|
(249.1)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes and
financing receivables related to sales
|
|
|
(598.0)
|
|
|
(1,679.3)
|
Insurance
receivables
|
|
|
333.4
|
|
|
35.5
|
Inventories
|
|
|
(941.5)
|
|
|
(1,102.9)
|
Accounts payable and
accrued expenses
|
|
|
(594.6)
|
|
|
(313.6)
|
Accrued income taxes
payable/receivable
|
|
|
(58.1)
|
|
|
207.3
|
Retirement
benefits
|
|
|
293.4
|
|
|
215.0
|
Other
|
|
|
(12.3)
|
|
|
(51.9)
|
Net cash provided by
operating activities
|
|
|
1,191.8
|
|
|
682.1
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
11,517.9
|
|
|
11,586.6
|
Proceeds from
maturities and sales of marketable securities
|
|
|
833.0
|
|
|
718.7
|
Proceeds from sales
of equipment on operating leases
|
|
|
773.7
|
|
|
803.3
|
Proceeds from sales
of businesses, net of cash sold
|
|
|
149.2
|
|
|
339.8
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(11,162.9)
|
|
|
(12,664.2)
|
Purchases of
marketable securities
|
|
|
(100.8)
|
|
|
(585.5)
|
Purchases of property
and equipment
|
|
|
(461.4)
|
|
|
(640.9)
|
Cost of equipment on
operating leases acquired
|
|
|
(1,355.7)
|
|
|
(1,049.5)
|
Other
|
|
|
(23.4)
|
|
|
(75.6)
|
Net cash provided by
(used for) investing activities
|
|
|
169.6
|
|
|
(1,567.3)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
1,805.2
|
|
|
(76.7)
|
Proceeds from
long-term borrowings
|
|
|
3,639.8
|
|
|
6,672.2
|
Payments of long-term
borrowings
|
|
|
(3,980.1)
|
|
|
(4,079.8)
|
Proceeds from
issuance of common stock
|
|
|
170.4
|
|
|
138.8
|
Repurchases of common
stock
|
|
|
(1,833.9)
|
|
|
(1,631.1)
|
Dividends
paid
|
|
|
(617.9)
|
|
|
(568.6)
|
Excess tax benefits
from share-based compensation
|
|
|
18.5
|
|
|
28.5
|
Other
|
|
|
(56.9)
|
|
|
(50.4)
|
Net cash provided by
(used for) financing activities
|
|
|
(854.9)
|
|
|
432.9
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(162.7)
|
|
|
(17.0)
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
343.8
|
|
|
(469.3)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
3,787.0
|
|
|
3,504.0
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
4,130.8
|
|
$
|
3,034.7
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
Condensed Notes to
Interim Consolidated Financial Statements (Unaudited)
|
|
|
(1)
|
In March 2015,
the Company closed the sale of all of the stock of its wholly-owned
subsidiaries, John Deere Insurance Company and John Deere Risk
Protection, Inc. (collectively the Crop Insurance operations)
to Farmers Mutual Hail Insurance Company of Iowa. These operations
were included in the Company's financial services operating
segment. At January 31, 2015, total assets of $381 million and
liabilities of $267 million were classified as held for sale in the
consolidated financial statements, which consisted of the
following:
|
|
|
January 31, 2015
|
|
Cash and cash
equivalents
|
|
$
|
13
|
|
Marketable
securities
|
|
|
79
|
|
Other
receivables
|
|
|
265
|
|
Other intangible
assets - net
|
|
|
4
|
|
Other
assets
|
|
|
20
|
|
Total assets held for
sale
|
|
$
|
381
|
|
|
|
|
|
|
Account payable and
accrued expenses, and
Total liabilities held for sale
|
|
$
|
267
|
|
|
The total amount of
proceeds from the sale was approximately $154 million, including $5
million of cash and cash equivalents sold, with a gain recorded in
other income of $42 million pretax and $40 million after-tax. The
tax expense was partially offset by a change in a valuation
allowance on a capital loss carryforward. The Company will provide
certain business services for a fee during a transition
period.
|
|
|
(2)
|
Dividends
declared and paid on a per share basis were as follows:
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
July 31
|
|
July 31
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
1.80
|
|
$
|
1.62
|
Dividends
paid
|
|
$
|
.60
|
|
$
|
.51
|
|
$
|
1.80
|
|
$
|
1.53
|
(3)
|
The calculation of
basic net income per share is based on the average number of shares
outstanding. The calculation of diluted net income per share
recognizes any dilutive effect of share-based
compensation.
|
|
|
(4)
|
The consolidated
financial statements represent the consolidation of all
Deere & Company's subsidiaries. In the supplemental
consolidating data in Note 5 to the financial statements,
"Equipment Operations" include the Company's agriculture and turf
operations and construction and forestry operations with "Financial
Services" reflected on the equity basis.
|
(5) SUPPLEMENTAL
CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended July 31, 2015 and 2014
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
6,839.5
|
|
$
|
8,723.0
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
20.8
|
|
|
14.2
|
|
$
|
644.3
|
|
$
|
634.2
|
Other
income
|
|
|
140.8
|
|
|
147.2
|
|
|
51.2
|
|
|
85.6
|
Total
|
|
|
7,001.1
|
|
|
8,884.4
|
|
|
695.5
|
|
|
719.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,358.4
|
|
|
6,611.6
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
346.8
|
|
|
362.1
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
633.5
|
|
|
684.5
|
|
|
123.9
|
|
|
138.8
|
Interest
expense
|
|
|
69.6
|
|
|
61.1
|
|
|
113.6
|
|
|
107.3
|
Interest compensation
to Financial Services
|
|
|
56.7
|
|
|
60.4
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
36.3
|
|
|
60.9
|
|
|
219.3
|
|
|
225.3
|
Total
|
|
|
6,501.3
|
|
|
7,840.6
|
|
|
456.8
|
|
|
471.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
499.8
|
|
|
1,043.8
|
|
|
238.7
|
|
|
248.4
|
Provision for income
taxes
|
|
|
155.5
|
|
|
363.8
|
|
|
85.5
|
|
|
86.4
|
Income of
Consolidated Group
|
|
|
344.3
|
|
|
680.0
|
|
|
153.2
|
|
|
162.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
of Unconsolidated
Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
153.4
|
|
|
162.3
|
|
|
.2
|
|
|
.3
|
Other
|
|
|
14.0
|
|
|
8.6
|
|
|
|
|
|
|
Total
|
|
|
167.4
|
|
|
170.9
|
|
|
.2
|
|
|
.3
|
Net
Income
|
|
|
511.7
|
|
|
850.9
|
|
|
153.4
|
|
|
162.3
|
Less: Net income
attributable to noncontrolling interests
|
|
|
.1
|
|
|
.2
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
511.6
|
|
$
|
850.7
|
|
$
|
153.4
|
|
$
|
162.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Deere & Company with Financial Services on the equity
basis.
|
|
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.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
STATEMENT OF INCOME
For the Nine Months Ended July 31, 2015 and 2014
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
19,843.1
|
|
$
|
24,917.8
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
58.8
|
|
|
50.0
|
|
$
|
1,900.9
|
|
$
|
1,795.2
|
Other
income
|
|
|
451.2
|
|
|
447.6
|
|
|
201.4
|
|
|
188.6
|
Total
|
|
|
20,353.1
|
|
|
25,415.4
|
|
|
2,102.3
|
|
|
1,983.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
15,474.2
|
|
|
18,679.5
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
1,021.1
|
|
|
1,039.9
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
1,794.1
|
|
|
2,046.9
|
|
|
366.9
|
|
|
394.2
|
Interest
expense
|
|
|
208.0
|
|
|
216.5
|
|
|
346.0
|
|
|
313.0
|
Interest compensation
to Financial Services
|
|
|
156.0
|
|
|
157.4
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
112.6
|
|
|
212.8
|
|
|
653.3
|
|
|
618.0
|
Total
|
|
|
18,766.0
|
|
|
22,353.0
|
|
|
1,366.2
|
|
|
1,325.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,587.1
|
|
|
3,062.4
|
|
|
736.1
|
|
|
658.6
|
Provision for income
taxes
|
|
|
478.5
|
|
|
1,001.7
|
|
|
257.1
|
|
|
208.0
|
Income of
Consolidated Group
|
|
|
1,108.6
|
|
|
2,060.7
|
|
|
479.0
|
|
|
450.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
of Unconsolidated
Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
480.0
|
|
|
452.2
|
|
|
1.0
|
|
|
1.6
|
Other
|
|
|
.8
|
|
|
.6
|
|
|
|
|
|
|
Total
|
|
|
480.8
|
|
|
452.8
|
|
|
1.0
|
|
|
1.6
|
Net
Income
|
|
|
1,589.4
|
|
|
2,513.5
|
|
|
480.0
|
|
|
452.2
|
Less: Net income
attributable to noncontrolling interests
|
|
|
.6
|
|
|
1.0
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,588.8
|
|
$
|
2,512.5
|
|
$
|
480.0
|
|
$
|
452.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Deere & Company with Financial Services on the equity
basis.
|
|
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.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
July 31
|
|
October 31
|
|
July 31
|
|
July 31
|
|
October 31
|
|
July 31
|
|
|
2015
|
|
2014
|
|
2014
|
|
2015
|
|
2014
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,907.1
|
|
$
|
2,569.2
|
|
$
|
1,855.0
|
|
$
|
1,223.7
|
|
$
|
1,217.8
|
|
$
|
1,179.8
|
Marketable
securities
|
|
|
47.4
|
|
|
700.4
|
|
|
1,002.5
|
|
|
373.7
|
|
|
514.7
|
|
|
486.9
|
Receivables from
unconsolidated subsidiaries and affiliates
|
|
|
2,941.5
|
|
|
3,663.9
|
|
|
4,865.7
|
|
|
|
|
|
|
|
|
|
Trade accounts and
notes receivable - net
|
|
|
581.2
|
|
|
706.0
|
|
|
819.1
|
|
|
4,780.9
|
|
|
3,554.4
|
|
|
4,923.0
|
Financing receivables
- net
|
|
|
4.7
|
|
|
18.5
|
|
|
7.1
|
|
|
24,968.7
|
|
|
27,403.7
|
|
|
27,072.8
|
Financing receivables
securitized - net
|
|
|
|
|
|
|
|
|
|
|
|
4,737.8
|
|
|
4,602.3
|
|
|
4,264.2
|
Other
receivables
|
|
|
779.2
|
|
|
848.0
|
|
|
802.6
|
|
|
76.2
|
|
|
659.0
|
|
|
421.1
|
Equipment on
operating leases - net
|
|
|
|
|
|
|
|
|
|
|
|
4,426.0
|
|
|
4,015.5
|
|
|
3,580.0
|
Inventories
|
|
|
4,319.0
|
|
|
4,209.7
|
|
|
5,439.0
|
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
|
|
5,072.4
|
|
|
5,522.5
|
|
|
5,330.3
|
|
|
54.0
|
|
|
55.3
|
|
|
55.1
|
Investments in
unconsolidated subsidiaries
and affiliates
|
|
|
4,923.8
|
|
|
5,106.5
|
|
|
5,005.9
|
|
|
10.2
|
|
|
10.9
|
|
|
11.3
|
Goodwill
|
|
|
715.9
|
|
|
791.2
|
|
|
829.8
|
|
|
|
|
|
|
|
|
|
Other intangible
assets - net
|
|
|
57.8
|
|
|
64.8
|
|
|
65.4
|
|
|
|
|
|
4.0
|
|
|
4.0
|
Retirement
benefits
|
|
|
335.5
|
|
|
263.5
|
|
|
579.3
|
|
|
27.1
|
|
|
32.9
|
|
|
34.3
|
Deferred income
taxes
|
|
|
3,028.6
|
|
|
2,981.9
|
|
|
2,778.3
|
|
|
61.6
|
|
|
64.9
|
|
|
70.8
|
Other
assets
|
|
|
859.4
|
|
|
850.6
|
|
|
680.5
|
|
|
730.0
|
|
|
648.2
|
|
|
633.3
|
Total
Assets
|
|
$
|
26,573.5
|
|
$
|
28,296.7
|
|
$
|
30,060.5
|
|
$
|
41,469.9
|
|
$
|
42,783.6
|
|
$
|
42,736.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
650.8
|
|
$
|
434.1
|
|
$
|
1,042.6
|
|
$
|
8,697.1
|
|
$
|
7,585.1
|
|
$
|
7,538.2
|
Short-term
securitization borrowings
|
|
|
|
|
|
|
|
|
|
|
|
4,595.4
|
|
|
4,558.5
|
|
|
4,142.8
|
Payables to
unconsolidated subsidiaries
and affiliates
|
|
|
73.7
|
|
|
101.0
|
|
|
90.9
|
|
|
2,898.3
|
|
|
3,633.7
|
|
|
4,831.9
|
Accounts payable and
accrued expenses
|
|
|
7,025.1
|
|
|
7,518.4
|
|
|
7,938.3
|
|
|
1,387.3
|
|
|
2,027.0
|
|
|
1,716.9
|
Deferred income
taxes
|
|
|
79.9
|
|
|
87.1
|
|
|
84.4
|
|
|
456.2
|
|
|
344.1
|
|
|
360.8
|
Long-term
borrowings
|
|
|
4,475.4
|
|
|
4,642.5
|
|
|
4,678.7
|
|
|
18,725.5
|
|
|
19,738.2
|
|
|
19,356.7
|
Retirement benefits
and other liabilities
|
|
|
6,543.6
|
|
|
6,448.1
|
|
|
5,393.1
|
|
|
86.7
|
|
|
82.8
|
|
|
82.3
|
Total
liabilities
|
|
|
18,848.5
|
|
|
19,231.2
|
|
|
19,228.0
|
|
|
36,846.5
|
|
|
37,969.4
|
|
|
38,029.6
|
Total
Deere & Company stockholders' equity
|
|
|
7,723.1
|
|
|
9,062.6
|
|
|
10,830.0
|
|
|
4,623.4
|
|
|
4,814.2
|
|
|
4,707.0
|
Noncontrolling
interests
|
|
|
1.9
|
|
|
2.9
|
|
|
2.5
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
7,725.0
|
|
|
9,065.5
|
|
|
10,832.5
|
|
|
4,623.4
|
|
|
4,814.2
|
|
|
4,707.0
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
26,573.5
|
|
$
|
28,296.7
|
|
$
|
30,060.5
|
|
$
|
41,469.9
|
|
$
|
42,783.6
|
|
$
|
42,736.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Deere &
Company with Financial Services on the equity basis.
|
|
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.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Nine Months Ended July 31, 2015 and 2014
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,589.4
|
|
$
|
2,513.5
|
|
$
|
480.0
|
|
$
|
452.2
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
2.1
|
|
|
3.2
|
|
|
33.3
|
|
|
26.4
|
Provision for
depreciation and amortization
|
|
|
605.6
|
|
|
592.2
|
|
|
503.2
|
|
|
417.8
|
Impairment
charges
|
|
|
|
|
|
62.3
|
|
|
|
|
|
|
Undistributed earnings
of unconsolidated subsidiaries and affiliates
|
|
|
(4.9)
|
|
|
(303.2)
|
|
|
(.8)
|
|
|
(1.4)
|
Provision (credit) for
deferred income taxes
|
|
|
(39.6)
|
|
|
(216.6)
|
|
|
112.6
|
|
|
(32.5)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
37.2
|
|
|
151.8
|
|
|
|
|
|
|
Insurance
receivables
|
|
|
|
|
|
|
|
|
333.4
|
|
|
35.5
|
Inventories
|
|
|
(473.2)
|
|
|
(604.4)
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
(113.4)
|
|
|
13.3
|
|
|
(322.3)
|
|
|
4.1
|
Accrued income taxes
payable/receivable
|
|
|
(82.9)
|
|
|
181.5
|
|
|
24.8
|
|
|
25.8
|
Retirement
benefits
|
|
|
282.1
|
|
|
203.2
|
|
|
11.3
|
|
|
11.8
|
Other
|
|
|
145.8
|
|
|
168.4
|
|
|
(25.5)
|
|
|
(37.0)
|
Net cash provided by
operating activities
|
|
|
1,948.2
|
|
|
2,765.2
|
|
|
1,150.0
|
|
|
902.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
12,516.5
|
|
|
12,618.3
|
Proceeds from
maturities and sales of marketable securities
|
|
|
700.1
|
|
|
700.1
|
|
|
132.9
|
|
|
18.6
|
Proceeds from sales
of equipment on operating leases
|
|
|
|
|
|
|
|
|
773.7
|
|
|
803.3
|
Proceeds from sales
of businesses, net of cash sold
|
|
|
|
|
|
339.8
|
|
|
149.2
|
|
|
|
Cost of receivables
acquired (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
(12,063.2)
|
|
|
(13,802.5)
|
Purchases of
marketable securities
|
|
|
(49.1)
|
|
|
(504.1)
|
|
|
(51.7)
|
|
|
(81.4)
|
Purchases of property
and equipment
|
|
|
(458.1)
|
|
|
(639.5)
|
|
|
(3.3)
|
|
|
(1.4)
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(1,988.6)
|
|
|
(1,723.2)
|
Increase in trade and
wholesale receivables
|
|
|
|
|
|
|
|
|
(924.0)
|
|
|
(2,055.6)
|
Other
|
|
|
2.2
|
|
|
(103.0)
|
|
|
(22.1)
|
|
|
(26.7)
|
Net cash provided by
(used for) investing activities
|
|
|
195.1
|
|
|
(206.7)
|
|
|
(1,480.6)
|
|
|
(4,250.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
318.5
|
|
|
537.2
|
|
|
1,486.7
|
|
|
(613.9)
|
Change in
intercompany receivables/payables
|
|
|
447.2
|
|
|
(1,442.7)
|
|
|
(447.2)
|
|
|
1,442.7
|
Proceeds from
long-term borrowings
|
|
|
6.7
|
|
|
7.0
|
|
|
3,633.1
|
|
|
6,665.2
|
Payments of long-term
borrowings
|
|
|
(147.1)
|
|
|
(757.2)
|
|
|
(3,833.0)
|
|
|
(3,322.6)
|
Proceeds from
issuance of common stock
|
|
|
170.4
|
|
|
138.8
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
(1,833.9)
|
|
|
(1,631.1)
|
|
|
|
|
|
|
Dividends
paid
|
|
|
(617.9)
|
|
|
(568.6)
|
|
|
(479.6)
|
|
|
(150.0)
|
Excess tax benefits
from share-based compensation
|
|
|
18.5
|
|
|
28.5
|
|
|
|
|
|
|
Other
|
|
|
(38.1)
|
|
|
(21.4)
|
|
|
9.5
|
|
|
25.2
|
Net cash provided by
(used for) financing activities
|
|
|
(1,675.7)
|
|
|
(3,709.5)
|
|
|
369.5
|
|
|
4,046.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(129.7)
|
|
|
(17.3)
|
|
|
(33.0)
|
|
|
.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
337.9
|
|
|
(1,168.3)
|
|
|
5.9
|
|
|
699.0
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
2,569.2
|
|
|
3,023.3
|
|
|
1,217.8
|
|
|
480.8
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
2,907.1
|
|
$
|
1,855.0
|
|
$
|
1,223.7
|
|
$
|
1,179.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Deere &
Company with Financial Services on the equity basis.
|
|
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.
|
Deere &
Company
Other Financial Information
|
|
|
|
|
|
For the Nine Months
Ended July 31,
|
|
Equipment Operations
|
Agriculture and Turf
|
Construction and Forestry
|
Dollars in millions
|
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
Net
Sales
|
|
$
|
19,843
|
|
$
|
24,918
|
|
$
|
15,155
|
|
$
|
20,211
|
|
$
|
4,688
|
|
$
|
4,707
|
|
Average
Identifiable Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
12,720
|
|
$
|
14,417
|
|
$
|
9,260
|
|
$
|
10,971
|
|
$
|
3,460
|
|
$
|
3,446
|
|
With Inventories at
Standard Cost
|
|
$
|
14,073
|
|
$
|
15,802
|
|
$
|
10,383
|
|
$
|
12,122
|
|
$
|
3,690
|
|
$
|
3,680
|
|
Operating
Profit
|
|
$
|
1,842
|
|
$
|
3,387
|
|
$
|
1,378
|
|
$
|
2,967
|
|
$
|
464
|
|
$
|
420
|
|
Percent of Net
Sales
|
|
|
9.3
|
%
|
|
13.6
|
%
|
|
9.1
|
%
|
|
14.7
|
%
|
|
9.9
|
%
|
|
8.9
|
%
|
Operating Return
on Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
|
14.5
|
%
|
|
23.5
|
%
|
|
14.9
|
%
|
|
27.0
|
%
|
|
13.4
|
%
|
|
12.2
|
%
|
With Inventories at
Standard Cost
|
|
|
13.1
|
%
|
|
21.4
|
%
|
|
13.3
|
%
|
|
24.5
|
%
|
|
12.6
|
%
|
|
11.4
|
%
|
SVA Cost of
Assets
|
|
$
|
(1,266)
|
|
$
|
(1,422)
|
|
$
|
(934)
|
|
$
|
(1,091)
|
|
$
|
(332)
|
|
$
|
(331)
|
|
SVA
|
|
$
|
576
|
|
$
|
1,965
|
|
$
|
444
|
|
$
|
1,876
|
|
$
|
132
|
|
$
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended July 31,
|
|
Financial
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
480
|
|
$
|
452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,687
|
|
$
|
4,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
10.2
|
%
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
737
|
|
$
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,687
|
|
$
|
4,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
$
|
(540)
|
|
$
|
(486)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
$
|
197
|
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 15
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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/deere-announces-third-quarter-earnings-of-512-million-300131672.html
SOURCE Deere & Company