- Global farm recession, weak construction-equipment markets
lead to lower sales and earnings for fourth quarter and full
year.
- Sound execution and broad business lineup aid performance.
- Efforts to establish more efficient cost structure make
headway.
- Fiscal 2017 forecast calls for earnings of $1.4 billion on slightly lower sales volumes.
MOLINE, Ill., Nov. 23, 2016 /CNW/ -- Net income attributable to
Deere & Company (NYSE: DE) was $285.3 million, or $0.90 per share, for the fourth quarter ended
October 31, compared with
$351.2 million, or $1.08 per share, for the same period of 2015. For
fiscal 2016, net income attributable to Deere & Company was
$1.524 billion, or $4.81 per share, compared with $1.940 billion, or $5.77 per share, in 2015.
Worldwide net sales and revenues decreased 3 percent, to
$6.520 billion, for the fourth
quarter and were down 8 percent, to $26.644
billion, for the full year. Net sales of the equipment
operations were $5.650 billion for
the quarter and $23.387 billion for
the year, compared with respective totals of $5.932 billion and $25.775
billion in 2015.
"John Deere has completed another successful year in spite of
continuing weakness in the global agricultural and construction
equipment sectors," said Samuel R.
Allen, chairman and chief executive officer. "The company in
2016 had one of its ten-best years in both sales and earnings, a
noteworthy achievement in light of the difficult business climate.
Deere's performance benefited from the adept execution of its
operating plans and disciplined cost management as well as the
impact of a broad product portfolio. As a result, the company has
remained well-positioned to serve its customers while making
continued investments in quality and innovation that we're
confident will be supportive of growth in the
future."
Summary of Operations
Net sales of the worldwide equipment operations declined 5
percent for the quarter and 9 percent for the full year compared
with the same periods in 2015. Sales included price realization of
3 percent for the quarter and 2 percent for the full year.
Additionally, sales included a favorable currency-translation
effect of 1 percent for the quarter and an unfavorable currency
translation effect of 2 percent for the full year. Equipment net
sales in the United States and
Canada decreased 14 percent for
the quarter and 13 percent for the full year. Outside the U.S. and
Canada, net sales increased 11
percent for the quarter and were down 3 percent for the full year,
with a favorable currency-translation effect of 3 percent for the
quarter and an unfavorable currency-translation effect of 4 percent
for the year.
Deere's equipment operations reported operating profit of
$354 million for the quarter and
$1.880 billion for the full year,
compared with $335 million and
$2.177 billion in 2015. The
improvement for the quarter was primarily driven by price
realization, partially offset by lower shipment volumes, an
impairment charge for international construction and forestry
operations, and higher production costs. Results were down for the
year primarily on account of reduced shipment volumes, the
unfavorable effects of foreign-currency exchange and a
less-favorable product mix, partially offset by price realization,
lower production costs and lower selling, administrative and
general expenses. Full-year results also benefited from a gain on
the sale of a partial interest in the unconsolidated affiliate
SiteOne Landscape Supply, Inc.
Net income of the company's equipment operations was
$185 million for the fourth quarter
and $1.058 billion for the year,
compared with $200 million and
$1.308 billion for the corresponding
periods in 2015. In addition to the operating factors mentioned
above, a higher effective tax rate in 2016 reduced both quarterly
and annual results.
Financial services reported net income attributable to Deere
& Company of $109.8 million for
the quarter and $467.6 million for
the year compared with $153.0 million
and $632.9 million in 2015. The
decline for both periods was primarily due to less-favorable
financing spreads, higher losses on lease residual values and a
higher provision for credit losses. Additionally, full-year results
in 2015 benefited from a gain on the sale of the crop insurance
business.
Company Outlook & Summary
Company equipment sales are projected to decrease about 1
percent for fiscal 2017 and be down about 4 percent for the first
quarter compared with the same periods of 2016. Included in the
forecast is a positive foreign-currency translation effect of about
1 percent for the year and about 2 percent for the first quarter.
Net sales and revenues are projected to decrease about 1 percent
for fiscal 2017, while net income attributable to Deere &
Company is anticipated to be about $1.4
billion.
During the fourth quarter of 2016, the company announced
voluntary employee-separation programs as part of its effort to
reduce operating costs. The expense of these programs is
recorded in the period in which employees accept their separation
offer. Total pretax expenses related to the programs are estimated
to be $116 million, of which
$11 million was recorded in the
fourth quarter of 2016, and $105
million will be recorded in the first quarter of 2017.
Savings from the separation programs are expected to be
approximately $75 million in
2017.
"Our forecast continues to represent a standard of performance
that is considerably higher than in earlier downturns," Allen said.
"This illustrates our ongoing success developing a more durable
business model and a wider range of revenue sources. At the same
time, we are driving further efficiency gains and have confidence
we can deliver structural cost reductions of at least $500 million by the end of 2018."
Allen reaffirmed his view that the future is quite promising for
the company and its stakeholders. "John Deere remains in a strong
position to carry out its growth plans and attract new customers
throughout the world," he said. "Thanks to the commitment of
employees, dealers and suppliers, our plans for helping meet the
world's increasing need for food, shelter and infrastructure are
making solid progress. We remain confident in the company's present
direction and believe Deere will provide significant value to its
customers and investors in the future."
Equipment Division Performance
Agriculture & Turf. Sales fell 5 percent for the
quarter and 7 percent for the year due to lower shipment volumes,
partially offset by the favorable effects of currency translation
for the quarter and unfavorable currency effects for the year. Both
periods benefited from price realization.
Operating profit was $371 million
for the quarter and $1.700 billion
for the year, compared with $271
million and $1.649 billion,
respectively, in 2015. The quarter's improvement was mainly driven
by price realization, partially offset by lower shipment volumes.
Results were higher for the year primarily due to price
realization, lower production costs, and lower selling,
administrative and general expenses, partially offset by lower
shipment volumes, unfavorable effects of foreign-currency exchange
and a less favorable product mix. Full-year results benefited from
a gain on the sale of a partial interest in the unconsolidated
affiliate SiteOne Landscape Supply, Inc.
Construction & Forestry. Construction and forestry
sales decreased 5 percent for the quarter and 18 percent for the
year, largely as a result of lower shipment volumes and higher
sales-incentive costs.
The division had an operating loss of $17
million for the quarter and operating profit of $180 million for the year. This compared with
operating profit of $64 million and
$528 million for the periods in 2015.
Lower results for the quarter were mainly attributable to higher
sales-incentive expenses, an impairment charge for international
operations and higher production costs. Full-year results decreased
primarily due to lower shipment volumes and higher sales-incentive
costs, partially offset by a reduction in both selling,
administrative and general expenses and production costs.
Market Conditions & Outlook
Agriculture & Turf. Deere's worldwide sales of
agriculture and turf equipment are forecast to decrease by about 1
percent for fiscal-year 2017, including a positive
currency-translation effect of about 1 percent. Industry sales for
agricultural equipment in the U.S. and Canada are forecast to be down 5 to 10 percent
for 2017. The decline, which reflects the continuing impact of low
commodity prices and weak farm incomes, is expected to be felt in
the sale of both large and small models of equipment.
Full-year 2017 industry sales in the EU28 member nations are
forecast to be down about 5 percent, with the decline attributable
to low commodity prices and farm incomes. South American industry
sales of tractors and combines are projected to be up about 15
percent as a result of improving economic and political conditions
in Brazil and Argentina. Asian sales are projected to be
flat to up slightly, benefiting from higher sales in India.
Industry sales of turf and utility equipment in the U.S. and
Canada are expected to be about
flat for 2017, with Deere sales outpacing the industry.
Construction & Forestry. Deere's worldwide sales of
construction and forestry equipment are forecast to be up about 1
percent for 2017, including a positive currency-translation effect
of about 1 percent. The forecast reflects the impact of generally
slow economic growth worldwide. In forestry, global industry sales
are expected to be about the same as in 2016 with some moderation
in the North American market.
Financial Services. Fiscal-year 2017 net income
attributable to Deere & Company for the financial services
operations is expected to be approximately $480 million. The outlook reflects lower losses
on lease residual values, partially offset by less-favorable
financing spreads 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 JDCC was $81.7
million for the fourth quarter and $341.6 million for the full year, compared with
$121.8 million and $498.2 million for the respective periods in
2015. The decline for the quarter and the full year was primarily
due to less-favorable financing spreads, higher losses on lease
residual values and a higher provision for credit losses.
Net receivables and leases financed by JDCC were $31.999 billion at October
31, 2016, compared with $32.592
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, and trends involve factors that are subject to
change, and 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 factors that affect farmers'
confidence and financial condition. These factors include
demand for agricultural products, world grain stocks, weather
conditions, soil conditions , 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 governments, changes in government farm
programs and policies, international reaction to such programs,
changes in environmental regulations and their impact on farming
practices; 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, interest rates and the levels of public
and non-residential construction are important to sales and results
of the company's construction and forestry equipment. Prices
for pulp, paper, lumber and structural panels are important to
sales of forestry equipment.
All of the company's businesses and its results are affected by
general economic conditions in the global markets and industries in
which the company operates; customer confidence in general economic
conditions; government spending and taxing; foreign currency
exchange rates and their volatility, especially fluctuations in the
value of the U.S. dollar; interest rates; inflation and deflation
rates; changes in weather patterns; 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; natural disasters; and the spread of major
epidemics.
Significant changes in market liquidity conditions, changes in
the company's credit ratings and any failure to comply with
financial covenants in credit agreements could impact 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.
The potential withdrawal of the United
Kingdom from the European Union and the perceptions as to
the impact of the withdrawal may adversely affect business
activity, political stability and economic conditions in the
United Kingdom, the European Union
and elsewhere. The economic conditions and outlook could be further
adversely affected by (i) the uncertainty concerning the timing and
terms of the exit, (ii) new or modified trading arrangements
between the United Kingdom and
other countries, (iii) the risk that one or more other European
Union countries could come under increasing pressure to leave the
European Union, or (iv) the risk that the euro as the single
currency of the Eurozone could cease to exist. Any of these
developments, or the perception that any of these developments are
likely to occur, could affect economic growth or business activity
in the United Kingdom or the
European Union, and could result in the relocation of businesses,
cause business interruptions, lead to economic recession or
depression, and impact the stability of the financial markets,
availability of credit, currency exchange rates, interest rates,
financial institutions, and political, financial and monetary
systems. Any of these developments could affect our businesses,
liquidity, results of operations and financial position.
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; actions by central banks; actions by
financial and securities 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 to GPS radio frequency
bands or their permitted uses; 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.
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 products; the success of
new product initiatives; changes in customer product preferences
and sales mix; gaps or limitations in rural broadband coverage,
capacity and speed needed to support technology solutions; oil and
energy prices, supplies and volatility; the availability and cost
of freight; actions of competitors in the various industries in
which the company competes, particularly price discounting; dealer
practices especially as to levels of new and used field
inventories; changes in demand and pricing for used equipment;
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;
security breaches and other disruptions to the company's and
suppliers' information technology infrastructure; changes in
company declared dividends and common stock issuances and
repurchases; changes in the level and funding of employee
retirement benefits; changes in market values of investment assets,
compensation, retirement, discount and mortality rates which impact
retirement benefit costs; and significant changes in health care
costs.
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,
and to fund operations, costs, and purchases of the company's
products. If general economic conditions deteriorate or
capital markets become more volatile, funding could be unavailable
or insufficient. Additionally, customer confidence levels may
result in declines in credit applications and increases in
delinquencies and default rates, which could materially impact
write-offs and provisions for credit losses.
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 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).
Fourth Quarter 2016
Press Release
|
(in millions of
dollars)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
October 31
|
|
October 31
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
%
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
4,441
|
|
$
|
4,656
|
|
-5
|
|
$
|
18,487
|
|
$
|
19,812
|
|
-7
|
Construction and
forestry
|
|
|
1,209
|
|
|
1,276
|
|
-5
|
|
|
4,900
|
|
|
5,963
|
|
-18
|
Total net
sales
|
|
|
5,650
|
|
|
5,932
|
|
-5
|
|
|
23,387
|
|
|
25,775
|
|
-9
|
Financial
services
|
|
|
740
|
|
|
654
|
|
+13
|
|
|
2,694
|
|
|
2,591
|
|
+4
|
Other
revenues
|
|
|
130
|
|
|
129
|
|
+1
|
|
|
563
|
|
|
497
|
|
+13
|
Total net sales
and revenues
|
|
$
|
6,520
|
|
$
|
6,715
|
|
-3
|
|
$
|
26,644
|
|
$
|
28,863
|
|
-8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
371
|
|
$
|
271
|
|
+37
|
|
$
|
1,700
|
|
$
|
1,649
|
|
+3
|
Construction and
forestry
|
|
|
(17)
|
|
|
64
|
|
|
|
|
180
|
|
|
528
|
|
-66
|
Financial
services
|
|
|
164
|
|
|
226
|
|
-27
|
|
|
709
|
|
|
963
|
|
-26
|
Total operating
profit
|
|
|
518
|
|
|
561
|
|
-8
|
|
|
2,589
|
|
|
3,140
|
|
-18
|
Reconciling items
**
|
|
|
(93)
|
|
|
(105)
|
|
-11
|
|
|
(365)
|
|
|
(360)
|
|
+1
|
Income
taxes
|
|
|
(140)
|
|
|
(105)
|
|
+33
|
|
|
(700)
|
|
|
(840)
|
|
-17
|
Net income
attributable to Deere & Company
|
|
$
|
285
|
|
$
|
351
|
|
-19
|
|
$
|
1,524
|
|
$
|
1,940
|
|
-21
|
|
|
*
|
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 October 31, 2016 and 2015
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,650.1
|
|
$
|
5,932.0
|
Finance and interest
income
|
|
|
662.2
|
|
|
614.5
|
Other
income
|
|
|
207.4
|
|
|
168.9
|
Total
|
|
|
6,519.7
|
|
|
6,715.4
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
4,383.5
|
|
|
4,670.4
|
Research and
development expenses
|
|
|
386.0
|
|
|
404.0
|
Selling,
administrative and general expenses
|
|
|
747.1
|
|
|
719.1
|
Interest
expense
|
|
|
198.8
|
|
|
162.9
|
Other operating
expenses
|
|
|
369.9
|
|
|
302.0
|
Total
|
|
|
6,085.3
|
|
|
6,258.4
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
434.4
|
|
|
457.0
|
Provision for income
taxes
|
|
|
140.2
|
|
|
104.5
|
Income of
Consolidated Group
|
|
|
294.2
|
|
|
352.5
|
Equity in loss of
unconsolidated affiliates
|
|
|
(9.8)
|
|
|
(.9)
|
Net
Income
|
|
|
284.4
|
|
|
351.6
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
|
(.9)
|
|
|
.4
|
Net Income
Attributable to Deere & Company
|
|
$
|
285.3
|
|
$
|
351.2
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
.91
|
|
$
|
1.09
|
Diluted
|
|
$
|
.90
|
|
$
|
1.08
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
314.6
|
|
|
323.0
|
Diluted
|
|
|
316.2
|
|
|
324.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
|
|
|
|
|
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED INCOME
|
For the Years Ended
October 31, 2016 and 2015
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
23,387.3
|
|
$
|
25,775.2
|
Finance and interest
income
|
|
|
2,511.2
|
|
|
2,381.1
|
Other
income
|
|
|
745.5
|
|
|
706.5
|
Total
|
|
|
26,644.0
|
|
|
28,862.8
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
18,248.9
|
|
|
20,143.2
|
Research and
development expenses
|
|
|
1,389.1
|
|
|
1,425.1
|
Selling,
administrative and general expenses
|
|
|
2,763.7
|
|
|
2,873.3
|
Interest
expense
|
|
|
763.7
|
|
|
680.0
|
Other operating
expenses
|
|
|
1,254.6
|
|
|
961.1
|
Total
|
|
|
24,420.0
|
|
|
26,082.7
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
2,224.0
|
|
|
2,780.1
|
Provision for income
taxes
|
|
|
700.1
|
|
|
840.1
|
Income of
Consolidated Group
|
|
|
1,523.9
|
|
|
1,940.0
|
Equity in income
(loss) of unconsolidated affiliates
|
|
|
(2.4)
|
|
|
.9
|
Net
Income
|
|
|
1,521.5
|
|
|
1,940.9
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
|
(2.4)
|
|
|
.9
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,523.9
|
|
$
|
1,940.0
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
4.83
|
|
$
|
5.81
|
Diluted
|
|
$
|
4.81
|
|
$
|
5.77
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
315.2
|
|
|
333.6
|
Diluted
|
|
|
316.6
|
|
|
336.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
|
|
|
|
|
|
DEERE &
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
As of October 31,
2016 and 2015
|
(In millions of
dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,335.8
|
|
$
|
4,162.2
|
Marketable
securities
|
|
|
453.5
|
|
|
437.4
|
Receivables from
unconsolidated affiliates
|
|
|
16.5
|
|
|
33.3
|
Trade accounts and
notes receivable - net
|
|
|
3,011.3
|
|
|
3,051.1
|
Financing receivables
- net
|
|
|
23,702.3
|
|
|
24,809.0
|
Financing receivables
securitized - net
|
|
|
5,126.5
|
|
|
4,834.6
|
Other
receivables
|
|
|
1,018.5
|
|
|
991.2
|
Equipment on
operating leases - net
|
|
|
5,901.5
|
|
|
4,970.4
|
Inventories
|
|
|
3,340.5
|
|
|
3,817.0
|
Property and
equipment - net
|
|
|
5,170.6
|
|
|
5,181.5
|
Investments in
unconsolidated affiliates
|
|
|
232.6
|
|
|
303.5
|
Goodwill
|
|
|
815.7
|
|
|
726.0
|
Other intangible
assets - net
|
|
|
104.1
|
|
|
63.6
|
Retirement
benefits
|
|
|
93.6
|
|
|
215.6
|
Deferred income
taxes
|
|
|
2,964.4
|
|
|
2,767.3
|
Other
assets
|
|
|
1,694.0
|
|
|
1,583.9
|
Total
Assets
|
|
$
|
57,981.4
|
|
$
|
57,947.6
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
6,912.2
|
|
$
|
8,426.6
|
Short-term
securitization borrowings
|
|
|
5,002.5
|
|
|
4,590.0
|
Payables to
unconsolidated affiliates
|
|
|
81.6
|
|
|
80.6
|
Accounts payable and
accrued expenses
|
|
|
7,240.1
|
|
|
7,311.5
|
Deferred income
taxes
|
|
|
166.0
|
|
|
160.8
|
Long-term
borrowings
|
|
|
23,759.7
|
|
|
23,832.8
|
Retirement benefits
and other liabilities
|
|
|
8,274.5
|
|
|
6,787.7
|
Total
liabilities
|
|
|
51,436.6
|
|
|
51,190.0
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
6,520.0
|
|
|
6,743.4
|
Noncontrolling
interests
|
|
|
10.8
|
|
|
14.2
|
Total stockholders'
equity
|
|
|
6,530.8
|
|
|
6,757.6
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
57,981.4
|
|
$
|
57,947.6
|
|
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
|
|
|
|
|
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED CASH FLOWS
|
For the Years Ended
October 31, 2016 and 2015
|
(In millions of
dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
1,521.5
|
|
$
|
1,940.9
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
94.3
|
|
|
55.4
|
Provision for
depreciation and amortization
|
|
|
1,559.8
|
|
|
1,382.4
|
Impairment
charges
|
|
|
85.1
|
|
|
34.8
|
Share-based
compensation expense
|
|
|
56.1
|
|
|
66.1
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(1.9)
|
|
|
(1.0)
|
Provision (credit) for
deferred income taxes
|
|
|
282.7
|
|
|
(18.4)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes and
financing receivables related to sales
|
|
|
335.2
|
|
|
811.6
|
Insurance
receivables
|
|
|
|
|
|
333.4
|
Inventories
|
|
|
(106.1)
|
|
|
(691.4)
|
Accounts payable and
accrued expenses
|
|
|
(155.2)
|
|
|
(503.6)
|
Accrued income taxes
payable/receivable
|
|
|
1.6
|
|
|
(137.6)
|
Retirement
benefits
|
|
|
238.6
|
|
|
427.5
|
Other
|
|
|
(147.4)
|
|
|
40.2
|
Net cash provided by
operating activities
|
|
|
3,764.3
|
|
|
3,740.3
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
14,611.4
|
|
|
14,919.7
|
Proceeds from
maturities and sales of marketable securities
|
|
|
169.4
|
|
|
860.7
|
Proceeds from sales
of equipment on operating leases
|
|
|
1,256.2
|
|
|
1,049.4
|
Proceeds from sales
of business and unconsolidated affiliates, net of cash
sold
|
|
|
81.1
|
|
|
149.2
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(13,954.5)
|
|
|
(14,996.5)
|
Purchases of
marketable securities
|
|
|
(171.2)
|
|
|
(154.9)
|
Purchases of property
and equipment
|
|
|
(644.4)
|
|
|
(694.0)
|
Cost of equipment on
operating leases acquired
|
|
|
(2,310.7)
|
|
|
(2,132.1)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(198.5)
|
|
|
|
Other
|
|
|
(16.0)
|
|
|
(60.2)
|
Net cash used for
investing activities
|
|
|
(1,177.2)
|
|
|
(1,058.7)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
(1,213.6)
|
|
|
501.6
|
Proceeds from
long-term borrowings
|
|
|
5,070.7
|
|
|
5,711.0
|
Payments of long-term
borrowings
|
|
|
(5,267.6)
|
|
|
(4,863.2)
|
Proceeds from
issuance of common stock
|
|
|
36.0
|
|
|
172.1
|
Repurchases of common
stock
|
|
|
(205.4)
|
|
|
(2,770.7)
|
Dividends
paid
|
|
|
(761.3)
|
|
|
(816.3)
|
Excess tax benefits
from share-based compensation
|
|
|
5.4
|
|
|
18.5
|
Other
|
|
|
(64.7)
|
|
|
(72.1)
|
Net cash used for
financing activities
|
|
|
(2,400.5)
|
|
|
(2,119.1)
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(13.0)
|
|
|
(187.3)
|
|
|
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
|
|
173.6
|
|
|
375.2
|
Cash and Cash
Equivalents at Beginning of Year
|
|
|
4,162.2
|
|
|
3,787.0
|
Cash and Cash
Equivalents at End of Year
|
|
$
|
4,335.8
|
|
$
|
4,162.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
|
|
|
|
|
|
Condensed Notes to
Interim Consolidated Financial Statements (Unaudited)
|
|
|
(1)
|
In May 2016, the
Company received a distribution of $60 million from SiteOne
Landscapes Supply, Inc. (SiteOne) that reduced the Company's
investment in unconsolidated affiliates. The distribution included
$4 million of a return on investment, which is shown in the
statement of consolidated cash flows in undistributed earnings of
unconsolidated affiliates in net cash provided by operating
activities, and $56 million of a return of investment shown in
other cash flows from investing activities. In May 2016, the
Company also sold approximately 30 percent of its interest in
SiteOne in an initial public offering and terminated a service
agreement resulting in gross proceeds of approximately $81 million
with a total gain of $75 million pretax or $47 million after-tax.
The gain is recorded in other income. The Company retained
approximately a 24 percent ownership interest in
SiteOne.
|
|
|
(2)
|
Dividends declared
and paid on a per share basis were as follows:
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
October 31
|
|
October 31
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
2.40
|
|
$
|
2.40
|
Dividends
paid
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
2.40
|
|
$
|
2.40
|
(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 October 31, 2016 and 2015
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,650.1
|
|
$
|
5,932.0
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
15.3
|
|
|
18.2
|
|
$
|
701.2
|
|
$
|
656.1
|
Other
income
|
|
|
156.7
|
|
|
151.7
|
|
|
85.1
|
|
|
57.5
|
Total
|
|
|
5,822.1
|
|
|
6,101.9
|
|
|
786.3
|
|
|
713.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
4,384.1
|
|
|
4,671.0
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
386.0
|
|
|
404.0
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
619.9
|
|
|
599.6
|
|
|
128.8
|
|
|
120.5
|
Interest
expense
|
|
|
54.8
|
|
|
64.8
|
|
|
149.8
|
|
|
109.0
|
Interest compensation
to Financial Services
|
|
|
48.4
|
|
|
48.8
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
57.6
|
|
|
82.5
|
|
|
344.6
|
|
|
258.3
|
Total
|
|
|
5,550.8
|
|
|
5,870.7
|
|
|
623.2
|
|
|
487.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
271.3
|
|
|
231.2
|
|
|
163.1
|
|
|
225.8
|
Provision for income
taxes
|
|
|
86.4
|
|
|
31.4
|
|
|
53.8
|
|
|
73.1
|
Income of
Consolidated Group
|
|
|
184.9
|
|
|
199.8
|
|
|
109.3
|
|
|
152.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
109.8
|
|
|
153.0
|
|
|
.5
|
|
|
.3
|
Other
|
|
|
(10.3)
|
|
|
(1.2)
|
|
|
|
|
|
|
Total
|
|
|
99.5
|
|
|
151.8
|
|
|
.5
|
|
|
.3
|
Net
Income
|
|
|
284.4
|
|
|
351.6
|
|
|
109.8
|
|
|
153.0
|
Less: Net income (loss)
attributable to noncontrolling interests
|
|
|
(.9)
|
|
|
.4
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
285.3
|
|
$
|
351.2
|
|
$
|
109.8
|
|
$
|
153.0
|
|
|
|
*
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 Years Ended
October 31, 2016 and 2015
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
23,387.3
|
|
$
|
25,775.2
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
61.1
|
|
|
77.0
|
|
$
|
2,690.1
|
|
$
|
2,557.0
|
Other
income
|
|
|
653.7
|
|
|
602.7
|
|
|
229.0
|
|
|
258.9
|
Total
|
|
|
24,102.1
|
|
|
26,454.9
|
|
|
2,919.1
|
|
|
2,815.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
18,250.8
|
|
|
20,145.2
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
1,389.1
|
|
|
1,425.1
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
2,262.5
|
|
|
2,393.8
|
|
|
508.5
|
|
|
487.3
|
Interest
expense
|
|
|
250.5
|
|
|
272.8
|
|
|
536.5
|
|
|
455.0
|
Interest compensation
to Financial Services
|
|
|
216.6
|
|
|
204.8
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
215.7
|
|
|
195.0
|
|
|
1,167.0
|
|
|
911.7
|
Total
|
|
|
22,585.2
|
|
|
24,636.7
|
|
|
2,212.0
|
|
|
1,854.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,516.9
|
|
|
1,818.2
|
|
|
707.1
|
|
|
961.9
|
Provision for income
taxes
|
|
|
459.0
|
|
|
509.9
|
|
|
241.1
|
|
|
330.2
|
Income of
Consolidated Group
|
|
|
1,057.9
|
|
|
1,308.3
|
|
|
466.0
|
|
|
631.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
467.6
|
|
|
632.9
|
|
|
1.6
|
|
|
1.2
|
Other
|
|
|
(4.0)
|
|
|
(.3)
|
|
|
|
|
|
|
Total
|
|
|
463.6
|
|
|
632.6
|
|
|
1.6
|
|
|
1.2
|
Net
Income
|
|
|
1,521.5
|
|
|
1,940.9
|
|
|
467.6
|
|
|
632.9
|
Less: Net income (loss)
attributable to noncontrolling interests
|
|
|
(2.4)
|
|
|
.9
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,523.9
|
|
$
|
1,940.0
|
|
$
|
467.6
|
|
$
|
632.9
|
|
|
|
*
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
|
As of October 31,
2016 and 2015
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,140.5
|
|
$
|
2,900.0
|
|
$
|
1,195.3
|
|
$
|
1,262.2
|
Marketable
securities
|
|
|
34.2
|
|
|
47.7
|
|
|
419.3
|
|
|
389.7
|
Receivables from
unconsolidated subsidiaries and affiliates
|
|
|
3,150.1
|
|
|
2,428.7
|
|
|
|
|
|
|
Trade accounts and
notes receivable - net
|
|
|
654.2
|
|
|
485.2
|
|
|
3,370.5
|
|
|
3,553.1
|
Financing receivables
- net
|
|
|
.4
|
|
|
.9
|
|
|
23,701.9
|
|
|
24,808.1
|
Financing receivables
securitized - net
|
|
|
|
|
|
|
|
|
5,126.5
|
|
|
4,834.6
|
Other
receivables
|
|
|
855.4
|
|
|
849.5
|
|
|
164.0
|
|
|
152.9
|
Equipment on
operating leases - net
|
|
|
|
|
|
|
|
|
5,901.5
|
|
|
4,970.4
|
Inventories
|
|
|
3,340.5
|
|
|
3,817.0
|
|
|
|
|
|
|
Property and
equipment - net
|
|
|
5,118.5
|
|
|
5,126.2
|
|
|
52.1
|
|
|
55.3
|
Investments in
unconsolidated subsidiaries and affiliates
|
|
|
4,697.0
|
|
|
4,817.6
|
|
|
11.9
|
|
|
10.5
|
Goodwill
|
|
|
815.7
|
|
|
726.0
|
|
|
|
|
|
|
Other intangible
assets - net
|
|
|
104.1
|
|
|
63.6
|
|
|
|
|
|
|
Retirement
benefits
|
|
|
93.6
|
|
|
211.9
|
|
|
20.5
|
|
|
25.0
|
Deferred income
taxes
|
|
|
3,556.0
|
|
|
3,092.0
|
|
|
75.5
|
|
|
67.9
|
Other
assets
|
|
|
855.8
|
|
|
807.3
|
|
|
840.1
|
|
|
779.1
|
Total
Assets
|
|
$
|
26,416.0
|
|
$
|
25,373.6
|
|
$
|
40,879.1
|
|
$
|
40,908.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
249.0
|
|
$
|
464.3
|
|
$
|
6,663.2
|
|
$
|
7,962.3
|
Short-term
securitization borrowings
|
|
|
|
|
|
|
|
|
5,002.5
|
|
|
4,590.0
|
Payables to
unconsolidated subsidiaries and affiliates
|
|
|
81.5
|
|
|
80.6
|
|
|
3,133.6
|
|
|
2,395.4
|
Accounts payable and
accrued expenses
|
|
|
6,661.2
|
|
|
6,801.2
|
|
|
1,595.2
|
|
|
1,511.2
|
Deferred income
taxes
|
|
|
87.3
|
|
|
86.8
|
|
|
745.9
|
|
|
466.6
|
Long-term
borrowings
|
|
|
4,586.2
|
|
|
4,460.6
|
|
|
19,173.5
|
|
|
19,372.2
|
Retirement benefits
and other liabilities
|
|
|
8,206.0
|
|
|
6,722.5
|
|
|
89.0
|
|
|
86.4
|
Total
liabilities
|
|
|
19,871.2
|
|
|
18,616.0
|
|
|
36,402.9
|
|
|
36,384.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Deere & Company stockholders' equity
|
|
|
6,520.0
|
|
|
6,743.4
|
|
|
4,476.2
|
|
|
4,524.7
|
Noncontrolling
interests
|
|
|
10.8
|
|
|
14.2
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
6,530.8
|
|
|
6,757.6
|
|
|
4,476.2
|
|
|
4,524.7
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
26,416.0
|
|
$
|
25,373.6
|
|
$
|
40,879.1
|
|
$
|
40,908.8
|
|
|
|
* 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.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
|
STATEMENT OF CASH
FLOWS
|
For the Years Ended
October 31, 2016 and 2015
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,521.5
|
|
$
|
1,940.9
|
|
$
|
467.6
|
|
$
|
632.9
|
Adjustments to
reconcile net income to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
8.2
|
|
|
5.5
|
|
|
86.1
|
|
|
49.9
|
Provision for
depreciation and amortization
|
|
|
803.4
|
|
|
791.8
|
|
|
846.7
|
|
|
688.5
|
Impairment
charges
|
|
|
25.4
|
|
|
15.3
|
|
|
59.7
|
|
|
19.5
|
Undistributed earnings
of unconsolidated subsidiaries and
affiliates
|
|
|
94.0
|
|
|
46.6
|
|
|
(1.5)
|
|
|
(1.0)
|
Provision (credit) for
deferred income taxes
|
|
|
13.2
|
|
|
(139.8)
|
|
|
269.5
|
|
|
121.4
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
(175.3)
|
|
|
113.4
|
|
|
|
|
|
|
Insurance
receivables
|
|
|
|
|
|
|
|
|
|
|
|
333.4
|
Inventories
|
|
|
578.4
|
|
|
(17.0)
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
(169.6)
|
|
|
(253.8)
|
|
|
40.6
|
|
|
(245.4)
|
Accrued income taxes
payable/receivable
|
|
|
12.8
|
|
|
(133.0)
|
|
|
(11.2)
|
|
|
(4.6)
|
Retirement
benefits
|
|
|
232.4
|
|
|
414.3
|
|
|
6.2
|
|
|
13.2
|
Other
|
|
|
(38.0)
|
|
|
271.1
|
|
|
97.1
|
|
|
(25.7)
|
Net cash provided by
operating activities
|
|
|
2,906.4
|
|
|
3,055.3
|
|
|
1,860.8
|
|
|
1,582.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
15,831.4
|
|
|
16,266.1
|
Proceeds from
maturities and sales of marketable securities
|
|
|
81.9
|
|
|
700.1
|
|
|
87.5
|
|
|
160.6
|
Proceeds from sales
of equipment on operating leases
|
|
|
|
|
|
|
|
|
1,256.2
|
|
|
1,049.4
|
Proceeds from sales
of business and unconsolidated affiliates,
net of cash
sold
|
|
|
81.1
|
|
|
|
|
|
|
|
|
149.2
|
Cost of receivables
acquired (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
(15,168.2)
|
|
|
(16,327.8)
|
Purchases of
marketable securities
|
|
|
(59.4)
|
|
|
(60.0)
|
|
|
(111.8)
|
|
|
(94.9)
|
Purchases of property
and equipment
|
|
|
(641.8)
|
|
|
(688.1)
|
|
|
(2.6)
|
|
|
(5.9)
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(3,235.7)
|
|
|
(3,043.6)
|
Increase in
investment in Financial Services
|
|
|
(28.2)
|
|
|
(27.4)
|
|
|
|
|
|
|
Decrease in trade and
wholesale receivables
|
|
|
|
|
|
|
|
|
492.5
|
|
|
657.0
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(198.5)
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
(55.2)
|
|
|
6.8
|
|
|
24.6
|
|
|
(45.1)
|
Net cash used for
investing activities
|
|
|
(820.1)
|
|
|
(68.6)
|
|
|
(826.1)
|
|
|
(1,235.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
(207.2)
|
|
|
211.9
|
|
|
(1,006.4)
|
|
|
289.7
|
Change in
intercompany receivables/payables
|
|
|
(756.0)
|
|
|
928.6
|
|
|
756.0
|
|
|
(928.6)
|
Proceeds from
long-term borrowings
|
|
|
173.4
|
|
|
6.2
|
|
|
4,897.3
|
|
|
5,704.8
|
Payments of long-term
borrowings
|
|
|
(72.8)
|
|
|
(214.2)
|
|
|
(5,194.8)
|
|
|
(4,649.0)
|
Proceeds from
issuance of common stock
|
|
|
36.0
|
|
|
172.1
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
(205.4)
|
|
|
(2,770.7)
|
|
|
|
|
|
|
Capital investment
from Equipment Operations
|
|
|
|
|
|
|
|
|
28.2
|
|
|
27.4
|
Dividends
paid
|
|
|
(761.3)
|
|
|
(816.3)
|
|
|
(562.1)
|
|
|
(679.6)
|
Excess tax benefits
from share-based compensation
|
|
|
5.4
|
|
|
18.5
|
|
|
|
|
|
|
Other
|
|
|
(36.7)
|
|
|
(45.4)
|
|
|
(28.0)
|
|
|
(26.7)
|
Net cash used for
financing activities
|
|
|
(1,824.6)
|
|
|
(2,509.3)
|
|
|
(1,109.8)
|
|
|
(262.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(21.2)
|
|
|
(146.6)
|
|
|
8.2
|
|
|
(40.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
240.5
|
|
|
330.8
|
|
|
(66.9)
|
|
|
44.4
|
Cash and Cash
Equivalents at Beginning of Year
|
|
|
2,900.0
|
|
|
2,569.2
|
|
|
1,262.2
|
|
|
1,217.8
|
Cash and Cash
Equivalents at End of Year
|
|
$
|
3,140.5
|
|
$
|
2,900.0
|
|
$
|
1,195.3
|
|
$
|
1,262.2
|
|
|
|
* 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.
|
Deere &
Company
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended October 31,
|
|
Equipment Operations
|
Agriculture and Turf
|
Construction and Forestry
|
Dollars in millions
|
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
Net
Sales
|
|
$
|
23,387
|
|
$
|
25,775
|
|
$
|
18,487
|
|
$
|
19,812
|
|
$
|
4,900
|
|
$
|
5,963
|
|
Average
Identifiable Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
11,816
|
|
$
|
12,491
|
|
$
|
8,669
|
|
$
|
9,056
|
|
$
|
3,147
|
|
$
|
3,435
|
|
With Inventories at
Standard Cost
|
|
$
|
13,092
|
|
$
|
13,840
|
|
$
|
9,718
|
|
$
|
10,173
|
|
$
|
3,374
|
|
$
|
3,667
|
|
Operating
Profit
|
|
$
|
1,880
|
|
$
|
2,177
|
|
$
|
1,700
|
|
$
|
1,649
|
|
$
|
180
|
|
$
|
528
|
|
Percent of Net
Sales
|
|
|
8.0
|
%
|
|
8.4
|
%
|
|
9.2
|
%
|
|
8.3
|
%
|
|
3.7
|
%
|
|
8.9
|
%
|
Operating Return
on Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
|
15.9
|
%
|
|
17.4
|
%
|
|
19.6
|
%
|
|
18.2
|
%
|
|
5.7
|
%
|
|
15.4
|
%
|
With Inventories at
Standard Cost
|
|
|
14.4
|
%
|
|
15.7
|
%
|
|
17.5
|
%
|
|
16.2
|
%
|
|
5.3
|
%
|
|
14.4
|
%
|
SVA Cost of
Assets
|
|
$
|
(1,570)
|
|
$
|
(1,661)
|
|
$
|
(1,165)
|
|
$
|
(1,221)
|
|
$
|
(405)
|
|
$
|
(440)
|
|
SVA
|
|
$
|
310
|
|
$
|
516
|
|
$
|
535
|
|
$
|
428
|
|
$
|
(225)
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended October 31,
|
|
Financial
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
468
|
|
$
|
633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,488
|
|
$
|
4,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
10.4
|
%
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
709
|
|
$
|
963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,488
|
|
$
|
4,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
$
|
(680)
|
|
$
|
(705)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
$
|
29
|
|
$
|
258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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-reports-earnings-of-285-million-for-fourth-quarter-and-1524-billion-for-year-300367739.html
SOURCE Deere & Company