MOLINE, Ill., May 19, 2017 /CNW/ --
- Improving demand for farm and construction equipment leads to
higher second-quarter results.
- Key markets show signs of further stabilization.
- Sound execution, broad business lineup benefit
performance.
- Results include gain on sale of partial interest in SiteOne
affiliate.
- Full-year earnings forecast increased to $2 billion, on 9% sales gain.
Net income attributable to Deere & Company (NYSE:
DE) was $802.4 million, or
$2.49 per share, for the second
quarter ended April 30, 2017,
compared with $495.4 million, or
$1.56 per share, for the period ended
May 1, 2016.
For the first six months of the year, net income attributable to
Deere & Company was $996.2
million, or $3.10 per share,
compared with $749.8 million, or
$2.36 per share, last year.
Worldwide net sales and revenues increased 5 percent, to
$8.287 billion, for the second
quarter and increased 4 percent, to $13.912
billion, for six months. Net sales of the equipment
operations were $7.260 billion for
the quarter and $11.958 billion for
the first six months, compared with $7.107
billion and $11.876 billion
for the same periods last year.
"John Deere reported strong results in the second quarter as
market conditions showed signs of further stabilization," said
Samuel R. Allen, chairman and chief
executive officer. "We are seeing modestly higher overall demand
for our products, with farm machinery sales in South America experiencing a strong recovery.
Deere's performance also reflects the sound execution of our
operating plans, the strength of a broad product portfolio, and the
impact of our actions to develop a more agile cost structure. As a
result, we have raised our forecast and are now calling for
significantly higher earnings for the full year."
Summary of Operations
Net sales of the worldwide equipment operations increased 2
percent for the quarter and 1 percent for the first six months
compared with the same periods a year ago. Sales included price
realization of 2 percent for both periods. Foreign-currency rates
did not have a material translation effect on net sales for either
the quarter or first six months compared with the same periods in
the prior year. Equipment net sales in the United States and Canada decreased 5 percent for the quarter and
were down 6 percent for the first six months. Outside the U.S. and
Canada, net sales increased 14
percent for the quarter and 13 percent for the first six months,
with no material effect of currency translation in either
period.
Deere's equipment operations reported operating profit of
$1.111 billion for the quarter and
$1.358 billion for six months,
compared with $688 million and
$902 million, respectively, last
year. The improvement for the quarter was primarily driven by price
realization, the impact of a favorable sales mix, favorable effects
of foreign-currency exchange and higher shipment volumes, partially
offset by higher warranty costs. Improved year-to-date results
benefited from price realization, a favorable sales mix, and higher
shipment volumes, partially offset by expenses associated with the
previously announced voluntary employee-separation program and
higher warranty costs. Additionally, quarterly and year-to-date
results were aided significantly by a gain on the sale of a partial
interest in the unconsolidated affiliate SiteOne Landscape Supply,
Inc. (SiteOne).
Net income of the company's equipment operations was
$694 million for the second quarter
and $774 million for the first six
months, compared with $393 million
and $520 million for the
corresponding periods of 2016. In addition to the operating factors
mentioned above, a higher effective tax rate reduced results for
the first six months of 2017.
Financial services reported net income attributable to Deere
& Company of $103.5 million for
the quarter and $217.9 million for
six months compared with $102.6
million and $232.0 million
last year. Results for the quarter benefited from lower losses on
lease residual values, largely offset by less-favorable financing
spreads and higher selling, administrative and general
expenses. Year-to-date results were affected by less-favorable
financing spreads and higher selling, administrative and general
expenses, including voluntary employee-separation expenses,
partially offset by lower losses on lease residual values.
Company Outlook & Summary
Company equipment sales are projected to increase about 9
percent for fiscal 2017 and to rise about 18 percent for the third
quarter compared with the same periods of 2016. Foreign-currency
rates are not expected to have a material translation effect on
equipment sales for the year or third quarter. Net sales and
revenues are projected to increase about 9 percent for fiscal 2017
with net income attributable to Deere & Company of about
$2.0 billion.
"Deere is demonstrating a continuing ability to produce
impressive results through all phases of the business cycle," Allen
said. "This resilience illustrates our success driving improved
operating efficiencies and developing a wider range of revenue
sources. It also shows the impact of the company's consistent
investments in advanced technology, new products and additional
markets. These actions are leading to strong performance in 2017,
and they reinforce our conviction that Deere is well-positioned to
deliver significant value to customers and investors over the long
term."
Equipment Division Performance
Agriculture & Turf. Sales increased 1 percent for the
quarter and first six months primarily due to price realization.
Year-to-date results were also affected by lower shipment
volumes.
Operating profit was $1.003
billion for the quarter and $1.215
billion year to date, compared with respective totals of
$614 million and $759 million last year. Results for the quarter
benefited from a more favorable sales mix, price realization and
the favorable effects of foreign exchange. For the first six
months, results were helped by price realization and a
more-favorable sales mix, partially offset by voluntary
employee-separation expenses. The gain on the sale of a partial
interest in SiteOne made a significant contribution to the
division's results for both periods.
Construction & Forestry. Construction and forestry
sales increased 7 percent for the quarter and 1 percent for six
months, mainly as a result of higher shipment volumes and price
realization, partially offset by higher warranty costs.
Operating profit was $108 million
for the quarter and $143 million for
six months, compared with $74 million
and $143 million last year. Results
for the quarter were assisted by increased shipment volumes and
price realization, partially offset by higher warranty costs and a
less-favorable sales mix. For the first six months, results were
about the same as in the prior period and were affected by the same
operating factors as for the quarter, as well as by voluntary
employee-separation expenses.
Market Conditions & Outlook
Agriculture & Turf. Deere's worldwide sales of
agriculture and turf equipment are forecast to increase by about 8
percent for fiscal-year 2017, with currency translation not
expected to have a material effect. Industry sales for agricultural
equipment in the U.S. and Canada
are forecast to be down about 5 percent for 2017, reflecting
weakness in the livestock sector and the continuing impact of low
crop prices. The decline is affecting both large and small
equipment.
Full-year 2017 industry sales in the EU28 member nations are
forecast to be flat to down 5 percent due to low commodity prices
and farm incomes. In South
America, industry sales of tractors and combines are
projected to be up about 20 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.
Construction & Forestry. Deere's worldwide sales of
construction and forestry equipment are forecast to be up about 13
percent for 2017, with no material currency-translation impact. The
forecast reflects moderate economic growth worldwide. In forestry,
global industry sales are expected to be down about 5 percent due
to soft conditions in North
America.
Financial Services. Fiscal-year 2017 net income
attributable to Deere & Company for the financial services
operations is expected to be approximately $475 million. In comparison with performance in
2016, 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 $64.5
million for the second quarter and $138.7 million year to date, compared with
$69.6 million and $169.4 million for the respective periods last
year. The decline for both periods was primarily due to
less-favorable financing spreads, higher selling, administrative
and general expenses including voluntary employee-separation
expenses, and a lower average portfolio, partially offset by lower
losses on lease residual values.
Net receivables and leases financed by JDCC were $32.015 billion at April
30, 2017, compared with $33.208
billion at May 1, 2016.
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, uncertainty surrounding 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 loss of
or challenges to intellectual property rights whether through
theft, infringement, counterfeiting or otherwise; 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 or the company to comply with laws, regulations and
company policy pertaining to employment, human rights, health,
safety, the environment, anti-corruption, privacy and data
protection 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 and resulting impacts on
lease residual values; labor relations and contracts; changes in
the ability to attract, train and retain qualified personnel;
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).
Second Quarter 2017
Press Release
|
(in millions of
dollars)
|
Unaudited
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
April 30
|
|
May 1
|
|
%
|
|
April 30
|
|
May 1
|
|
%
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
5,794
|
|
$
|
5,742
|
|
+1
|
|
$
|
9,392
|
|
$
|
9,341
|
|
+1
|
Construction and
forestry
|
|
|
1,466
|
|
|
1,365
|
|
+7
|
|
|
2,566
|
|
|
2,535
|
|
+1
|
Total net
sales
|
|
|
7,260
|
|
|
7,107
|
|
+2
|
|
|
11,958
|
|
|
11,876
|
|
+1
|
Financial
services
|
|
|
716
|
|
|
651
|
|
+10
|
|
|
1,412
|
|
|
1,287
|
|
+10
|
Other
revenues
|
|
|
311
|
|
|
117
|
|
+166
|
|
|
542
|
|
|
237
|
|
+129
|
Total net sales
and revenues
|
|
$
|
8,287
|
|
$
|
7,875
|
|
+5
|
|
$
|
13,912
|
|
$
|
13,400
|
|
+4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
1,003
|
|
$
|
614
|
|
+63
|
|
$
|
1,215
|
|
$
|
759
|
|
+60
|
Construction and
forestry
|
|
|
108
|
|
|
74
|
|
+46
|
|
|
143
|
|
|
143
|
|
|
Financial
services
|
|
|
160
|
|
|
160
|
|
|
|
|
328
|
|
|
354
|
|
-7
|
Total operating
profit
|
|
|
1,271
|
|
|
848
|
|
+50
|
|
|
1,686
|
|
|
1,256
|
|
+34
|
Reconciling items
**
|
|
|
(97)
|
|
|
(115)
|
|
-16
|
|
|
(184)
|
|
|
(173)
|
|
+6
|
Income
taxes
|
|
|
(372)
|
|
|
(238)
|
|
+56
|
|
|
(506)
|
|
|
(333)
|
|
+52
|
Net income
attributable to Deere & Company
|
|
$
|
802
|
|
$
|
495
|
|
+62
|
|
$
|
996
|
|
$
|
750
|
|
+33
|
|
|
*
|
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 April 30, 2017 and May 1, 2016
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
7,259.8
|
|
$
|
7,106.6
|
Finance and interest
income
|
|
|
665.0
|
|
|
611.4
|
Other
income
|
|
|
362.2
|
|
|
157.4
|
Total
|
|
|
8,287.0
|
|
|
7,875.4
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,444.7
|
|
|
5,531.0
|
Research and
development expenses
|
|
|
324.4
|
|
|
345.0
|
Selling,
administrative and general expenses
|
|
|
775.3
|
|
|
714.8
|
Interest
expense
|
|
|
226.9
|
|
|
191.0
|
Other operating
expenses
|
|
|
346.4
|
|
|
360.3
|
Total
|
|
|
7,117.7
|
|
|
7,142.1
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,169.3
|
|
|
733.3
|
Provision for income
taxes
|
|
|
371.9
|
|
|
237.8
|
Income of
Consolidated Group
|
|
|
797.4
|
|
|
495.5
|
Equity in income
(loss) of unconsolidated affiliates
|
|
|
4.8
|
|
|
(.8)
|
Net
Income
|
|
|
802.2
|
|
|
494.7
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(.2)
|
|
|
(.7)
|
Net Income
Attributable to Deere & Company
|
|
$
|
802.4
|
|
$
|
495.4
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
2.51
|
|
$
|
1.57
|
Diluted
|
|
$
|
2.49
|
|
$
|
1.56
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
319.2
|
|
|
315.1
|
Diluted
|
|
|
322.5
|
|
|
316.5
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED INCOME
|
For the Six Months
Ended April 30, 2017 and May 1, 2016
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
11,957.7
|
|
$
|
11,875.8
|
Finance and interest
income
|
|
|
1,320.5
|
|
|
1,210.5
|
Other
income
|
|
|
634.0
|
|
|
313.6
|
Total
|
|
|
13,912.2
|
|
|
13,399.9
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
9,241.5
|
|
|
9,371.1
|
Research and
development expenses
|
|
|
635.3
|
|
|
664.3
|
Selling,
administrative and general expenses
|
|
|
1,434.7
|
|
|
1,307.7
|
Interest
expense
|
|
|
434.9
|
|
|
364.3
|
Other operating
expenses
|
|
|
668.5
|
|
|
608.0
|
Total
|
|
|
12,414.9
|
|
|
12,315.4
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,497.3
|
|
|
1,084.5
|
Provision for income
taxes
|
|
|
506.4
|
|
|
333.3
|
Income of
Consolidated Group
|
|
|
990.9
|
|
|
751.2
|
Equity in income
(loss) of unconsolidated affiliates
|
|
|
4.5
|
|
|
(2.7)
|
Net
Income
|
|
|
995.4
|
|
|
748.5
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(.8)
|
|
|
(1.3)
|
Net Income
Attributable to Deere & Company
|
|
$
|
996.2
|
|
$
|
749.8
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
3.13
|
|
$
|
2.37
|
Diluted
|
|
$
|
3.10
|
|
$
|
2.36
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
317.9
|
|
|
315.8
|
Diluted
|
|
|
321.1
|
|
|
317.1
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(In millions of
dollars) Unaudited
|
|
|
April 30
|
|
October 30
|
|
May 1
|
|
|
2017
|
|
2016
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,525.8
|
|
$
|
4,335.8
|
|
$
|
4,133.2
|
Marketable
securities
|
|
|
546.3
|
|
|
453.5
|
|
|
475.5
|
Receivables from
unconsolidated affiliates
|
|
|
34.9
|
|
|
16.5
|
|
|
81.3
|
Trade accounts and
notes receivable - net
|
|
|
4,482.3
|
|
|
3,011.3
|
|
|
4,898.9
|
Financing receivables
- net
|
|
|
23,301.1
|
|
|
23,702.3
|
|
|
23,415.3
|
Financing receivables
securitized - net
|
|
|
4,281.8
|
|
|
5,126.5
|
|
|
4,734.7
|
Other
receivables
|
|
|
931.3
|
|
|
1,018.5
|
|
|
876.2
|
Equipment on
operating leases - net
|
|
|
5,923.9
|
|
|
5,901.5
|
|
|
5,455.5
|
Inventories
|
|
|
4,114.8
|
|
|
3,340.5
|
|
|
4,061.0
|
Property and
equipment - net
|
|
|
4,959.9
|
|
|
5,170.6
|
|
|
5,079.7
|
Investments in
unconsolidated affiliates
|
|
|
215.7
|
|
|
232.6
|
|
|
236.7
|
Goodwill
|
|
|
806.2
|
|
|
815.7
|
|
|
835.0
|
Other intangible
assets - net
|
|
|
90.8
|
|
|
104.1
|
|
|
120.5
|
Retirement
benefits
|
|
|
176.2
|
|
|
93.6
|
|
|
285.4
|
Deferred income
taxes
|
|
|
3,041.9
|
|
|
2,964.4
|
|
|
2,681.9
|
Other
assets
|
|
|
1,535.9
|
|
|
1,631.1
|
|
|
1,745.4
|
Total
Assets
|
|
$
|
58,968.8
|
|
$
|
57,918.5
|
|
$
|
59,116.2
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
7,963.6
|
|
$
|
6,910.7
|
|
$
|
8,574.3
|
Short-term
securitization borrowings
|
|
|
4,224.6
|
|
|
4,997.8
|
|
|
4,636.7
|
Payables to
unconsolidated affiliates
|
|
|
101.6
|
|
|
81.6
|
|
|
109.5
|
Accounts payable and
accrued expenses
|
|
|
7,215.9
|
|
|
7,240.1
|
|
|
6,980.8
|
Deferred income
taxes
|
|
|
169.0
|
|
|
166.0
|
|
|
180.3
|
Long-term
borrowings
|
|
|
23,253.1
|
|
|
23,703.0
|
|
|
24,587.7
|
Retirement benefits
and other liabilities
|
|
|
8,333.2
|
|
|
8,274.5
|
|
|
6,856.2
|
Total
liabilities
|
|
|
51,261.0
|
|
|
51,373.7
|
|
|
51,925.5
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
14.0
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
7,684.7
|
|
|
6,520.0
|
|
|
7,164.3
|
Noncontrolling
interests
|
|
|
9.1
|
|
|
10.8
|
|
|
12.4
|
Total stockholders'
equity
|
|
|
7,693.8
|
|
|
6,530.8
|
|
|
7,176.7
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
58,968.8
|
|
$
|
57,918.5
|
|
$
|
59,116.2
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED CASH FLOWS
|
For the Six Months
Ended April 30, 2017 and May 1, 2016
|
(In millions of
dollars) Unaudited
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
995.4
|
|
$
|
748.5
|
Adjustments to
reconcile net income to net cash used for operating
activities:
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
32.6
|
|
|
35.1
|
Provision for
depreciation and amortization
|
|
|
843.1
|
|
|
761.8
|
Impairment
charges
|
|
|
|
|
|
49.7
|
Share-based
compensation expense
|
|
|
32.3
|
|
|
32.0
|
Gain on sale of
unconsolidated affiliates and investments
|
|
|
(281.4)
|
|
|
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(3.1)
|
|
|
5.3
|
Provision (credit) for
deferred income taxes
|
|
|
(100.4)
|
|
|
93.3
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes and
financing receivables related to sales
|
|
|
(989.5)
|
|
|
(1,311.5)
|
Inventories
|
|
|
(1,090.4)
|
|
|
(405.8)
|
Accounts payable and
accrued expenses
|
|
|
103.6
|
|
|
(367.8)
|
Accrued income taxes
payable/receivable
|
|
|
195.1
|
|
|
12.0
|
Retirement
benefits
|
|
|
115.6
|
|
|
91.1
|
Other
|
|
|
(27.9)
|
|
|
(56.1)
|
Net cash used for
operating activities
|
|
|
(175.0)
|
|
|
(312.4)
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
8,228.0
|
|
|
8,120.6
|
Proceeds from
maturities and sales of marketable securities
|
|
|
41.3
|
|
|
71.4
|
Proceeds from sales
of equipment on operating leases
|
|
|
786.4
|
|
|
630.1
|
Proceeds from sales
of businesses and unconsolidated affiliates, net of cash
sold
|
|
|
113.9
|
|
|
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(7,628.6)
|
|
|
(6,872.9)
|
Purchases of
marketable securities
|
|
|
(43.7)
|
|
|
(112.2)
|
Purchases of property
and equipment
|
|
|
(253.0)
|
|
|
(232.6)
|
Cost of equipment on
operating leases acquired
|
|
|
(925.1)
|
|
|
(1,204.1)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
|
|
|
(198.9)
|
Other
|
|
|
(18.7)
|
|
|
8.6
|
Net cash provided by
investing activities
|
|
|
300.5
|
|
|
210.0
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase in total
short-term borrowings
|
|
|
183.1
|
|
|
38.3
|
Proceeds from
long-term borrowings
|
|
|
2,661.6
|
|
|
3,276.6
|
Payments of long-term
borrowings
|
|
|
(2,742.2)
|
|
|
(2,686.6)
|
Proceeds from
issuance of common stock
|
|
|
383.6
|
|
|
11.1
|
Repurchases of common
stock
|
|
|
(6.2)
|
|
|
(205.4)
|
Dividends
paid
|
|
|
(379.5)
|
|
|
(383.2)
|
Excess tax benefits
from share-based compensation
|
|
|
11.3
|
|
|
2.7
|
Other
|
|
|
(39.7)
|
|
|
(32.6)
|
Net cash provided by
financing activities
|
|
|
72.0
|
|
|
20.9
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(7.5)
|
|
|
52.5
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
190.0
|
|
|
(29.0)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
4,335.8
|
|
|
4,162.2
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
4,525.8
|
|
$
|
4,133.2
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
Condensed Notes
to Interim Consolidated Financial Statements (Unaudited)
|
|
(1)
|
During the fourth
quarter of 2016, the Company announced voluntary employee
separation programs as part of its effort to reduce operating
costs. The programs provided for cash payments based on previous
years of service. The expense is recorded in the period the
employees accept the separation offer. The programs' total pretax
expenses are approximately $113 million, of which $11 million was
recorded in the fourth quarter of 2016, $94 million was recorded in
the first quarter of 2017, and $5 million was recorded in the
second quarter, with $3 million to be recognized over the remainder
of the fiscal year. The payments for all programs were
substantially made in the first quarter of 2017. The total 2017
expenses are allocated approximately 30 percent cost of sales, 16
percent research and development, and 54 percent selling,
administrative and general. In addition, the expenses are allocated
74 percent to agriculture and turf operations, 18 percent to the
construction and forestry operations, and 8 percent to the
financial services operations. Savings from these programs are
estimated to be approximately $70 million in 2017.
|
|
|
(2)
|
In December 2016, the
Company sold approximately 38 percent of its interest in SiteOne
Landscape Supply, Inc. (SiteOne) resulting in gross proceeds of
$114 million and a gain of $105 million pretax or $66 million
after-tax. In April 2017, the Company sold an additional 68 percent
of its then remaining interest in SiteOne resulting in gross
proceeds of $184 million and a gain of $176 million pretax or $111
million after-tax. The gains in both periods were recorded in other
income in the agriculture and turf operating segment. The proceeds
from the April sale were received in the fiscal third quarter and
were presented in other receivables at April 30, 2017. The Company
retained approximately a 5 percent ownership interest in SiteOne
after these sales. In addition, at April 30, 2017, the remaining
investment in SiteOne of $90 million was recorded as an available
for sale security and presented in marketable
securities.
|
|
|
(3)
|
Dividends declared
and paid on a per share basis were as follows:
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
April 30
|
|
May 1
|
|
April 30
|
|
May 1
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
1.20
|
|
$
|
1.20
|
|
Dividends
paid
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
1.20
|
|
$
|
1.20
|
|
|
|
(4)
|
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.
|
|
|
(5)
|
The consolidated
financial statements represent the consolidation of all
Deere & Company's subsidiaries. In the supplemental
consolidating data in Note 6 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.
|
(6) SUPPLEMENTAL
CONSOLIDATING DATA
|
STATEMENT OF
INCOME
|
For the Three Months
Ended April 30, 2017 and May 1, 2016
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
7,259.8
|
|
$
|
7,106.6
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
18.7
|
|
|
12.9
|
|
$
|
716.4
|
|
$
|
662.9
|
Other
income
|
|
|
339.6
|
|
|
139.9
|
|
|
61.0
|
|
|
68.2
|
Total
|
|
|
7,618.1
|
|
|
7,259.4
|
|
|
777.4
|
|
|
731.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,445.1
|
|
|
5,531.5
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
324.4
|
|
|
345.0
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
637.5
|
|
|
588.5
|
|
|
139.6
|
|
|
128.0
|
Interest
expense
|
|
|
67.0
|
|
|
67.7
|
|
|
169.4
|
|
|
125.9
|
Interest compensation
to Financial Services
|
|
|
60.4
|
|
|
61.8
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
73.8
|
|
|
91.4
|
|
|
309.0
|
|
|
317.4
|
Total
|
|
|
6,608.2
|
|
|
6,685.9
|
|
|
618.0
|
|
|
571.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,009.9
|
|
|
573.5
|
|
|
159.4
|
|
|
159.8
|
Provision for income
taxes
|
|
|
315.8
|
|
|
180.4
|
|
|
56.1
|
|
|
57.4
|
Income of
Consolidated Group
|
|
|
694.1
|
|
|
393.1
|
|
|
103.3
|
|
|
102.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
103.5
|
|
|
102.6
|
|
|
.2
|
|
|
.2
|
Other
|
|
|
4.6
|
|
|
(1.0)
|
|
|
|
|
|
|
Total
|
|
|
108.1
|
|
|
101.6
|
|
|
.2
|
|
|
.2
|
Net
Income
|
|
|
802.2
|
|
|
494.7
|
|
|
103.5
|
|
|
102.6
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(.2)
|
|
|
(.7)
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
802.4
|
|
$
|
495.4
|
|
$
|
103.5
|
|
$
|
102.6
|
|
|
* 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
INCOME
|
For the Six Months
Ended April 30, 2017 and May 1, 2016
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
11,957.7
|
|
$
|
11,875.8
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
40.0
|
|
|
30.8
|
|
$
|
1,403.7
|
|
$
|
1,297.9
|
Other
income
|
|
|
597.6
|
|
|
280.0
|
|
|
119.2
|
|
|
116.3
|
Total
|
|
|
12,595.3
|
|
|
12,186.6
|
|
|
1,522.9
|
|
|
1,414.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
9,242.3
|
|
|
9,372.1
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
635.3
|
|
|
664.3
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
1,176.4
|
|
|
1,069.6
|
|
|
261.3
|
|
|
242.0
|
Interest
expense
|
|
|
133.8
|
|
|
129.8
|
|
|
318.1
|
|
|
245.9
|
Interest compensation
to Financial Services
|
|
|
106.1
|
|
|
106.6
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
131.7
|
|
|
112.5
|
|
|
615.9
|
|
|
573.5
|
Total
|
|
|
11,425.6
|
|
|
11,454.9
|
|
|
1,195.3
|
|
|
1,061.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,169.7
|
|
|
731.7
|
|
|
327.6
|
|
|
352.8
|
Provision for income
taxes
|
|
|
395.9
|
|
|
211.5
|
|
|
110.5
|
|
|
121.8
|
Income of
Consolidated Group
|
|
|
773.8
|
|
|
520.2
|
|
|
217.1
|
|
|
231.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
217.9
|
|
|
232.0
|
|
|
.8
|
|
|
1.0
|
Other
|
|
|
3.7
|
|
|
(3.7)
|
|
|
|
|
|
|
Total
|
|
|
221.6
|
|
|
228.3
|
|
|
.8
|
|
|
1.0
|
Net
Income
|
|
|
995.4
|
|
|
748.5
|
|
|
217.9
|
|
|
232.0
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(.8)
|
|
|
(1.3)
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
996.2
|
|
$
|
749.8
|
|
$
|
217.9
|
|
$
|
232.0
|
|
|
* 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)
|
CONDENSED BALANCE
SHEET
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
April 30
|
|
October 30
|
|
May 1
|
|
April 30
|
|
October 30
|
|
May 1
|
|
|
2017
|
|
2016
|
|
2016
|
|
2017
|
|
2016
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,343.8
|
|
$
|
3,140.5
|
|
$
|
2,790.8
|
|
$
|
1,182.0
|
|
$
|
1,195.3
|
|
$
|
1,342.4
|
Marketable
securities
|
|
|
118.1
|
|
|
34.2
|
|
|
71.2
|
|
|
428.2
|
|
|
419.3
|
|
|
404.3
|
Receivables from
unconsolidated subsidiaries and affiliates
|
|
|
3,453.0
|
|
|
3,150.1
|
|
|
2,226.2
|
|
|
|
|
|
|
|
|
|
Trade accounts and
notes receivable - net
|
|
|
742.9
|
|
|
654.2
|
|
|
631.2
|
|
|
4,867.3
|
|
|
3,370.5
|
|
|
5,529.4
|
Financing receivables
- net
|
|
|
|
|
|
.4
|
|
|
.7
|
|
|
23,301.1
|
|
|
23,701.9
|
|
|
23,414.6
|
Financing receivables
securitized - net
|
|
|
|
|
|
|
|
|
|
|
|
4,281.8
|
|
|
5,126.5
|
|
|
4,734.7
|
Other
receivables
|
|
|
801.6
|
|
|
855.4
|
|
|
778.2
|
|
|
136.0
|
|
|
164.0
|
|
|
130.8
|
Equipment on
operating leases - net
|
|
|
|
|
|
|
|
|
|
|
|
5,923.9
|
|
|
5,901.5
|
|
|
5,455.5
|
Inventories
|
|
|
4,114.8
|
|
|
3,340.5
|
|
|
4,061.0
|
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
|
|
4,909.7
|
|
|
5,118.5
|
|
|
5,026.2
|
|
|
50.2
|
|
|
52.1
|
|
|
53.5
|
Investments in
unconsolidated subsidiaries
and
affiliates
|
|
|
4,612.2
|
|
|
4,697.0
|
|
|
4,774.7
|
|
|
12.5
|
|
|
11.9
|
|
|
11.9
|
Goodwill
|
|
|
806.2
|
|
|
815.7
|
|
|
835.0
|
|
|
|
|
|
|
|
|
|
Other intangible
assets - net
|
|
|
90.8
|
|
|
104.1
|
|
|
120.5
|
|
|
|
|
|
|
|
|
|
Retirement
benefits
|
|
|
176.2
|
|
|
93.6
|
|
|
280.9
|
|
|
18.9
|
|
|
20.5
|
|
|
23.2
|
Deferred income
taxes
|
|
|
3,651.1
|
|
|
3,556.0
|
|
|
3,185.7
|
|
|
76.3
|
|
|
75.5
|
|
|
70.4
|
Other
assets
|
|
|
901.1
|
|
|
834.9
|
|
|
861.0
|
|
|
636.8
|
|
|
798.1
|
|
|
887.2
|
Total
Assets
|
|
$
|
27,721.5
|
|
$
|
26,395.1
|
|
$
|
25,643.3
|
|
$
|
40,915.0
|
|
$
|
40,837.1
|
|
$
|
42,057.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
276.6
|
|
$
|
249.0
|
|
$
|
218.7
|
|
$
|
7,687.0
|
|
$
|
6,661.7
|
|
$
|
8,355.6
|
Short-term
securitization borrowings
|
|
|
|
|
|
|
|
|
|
|
|
4,224.6
|
|
|
4,997.8
|
|
|
4,636.7
|
Payables to
unconsolidated subsidiaries and affiliates
|
|
|
101.6
|
|
|
81.5
|
|
|
109.5
|
|
|
3,418.1
|
|
|
3,133.6
|
|
|
2,144.9
|
Accounts payable and
accrued expenses
|
|
|
6,765.0
|
|
|
6,661.2
|
|
|
6,674.5
|
|
|
1,587.1
|
|
|
1,595.2
|
|
|
1,603.7
|
Deferred income
taxes
|
|
|
89.7
|
|
|
87.3
|
|
|
102.7
|
|
|
764.8
|
|
|
745.9
|
|
|
651.8
|
Long-term
borrowings
|
|
|
4,520.4
|
|
|
4,565.3
|
|
|
4,562.0
|
|
|
18,732.7
|
|
|
19,137.7
|
|
|
20,025.7
|
Retirement benefits
and other liabilities
|
|
|
8,260.4
|
|
|
8,206.0
|
|
|
6,785.2
|
|
|
91.7
|
|
|
89.0
|
|
|
89.6
|
Total
liabilities
|
|
|
20,013.7
|
|
|
19,850.3
|
|
|
18,452.6
|
|
|
36,506.0
|
|
|
36,360.9
|
|
|
37,508.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
14.0
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Deere & Company stockholders' equity
|
|
|
7,684.7
|
|
|
6,520.0
|
|
|
7,164.3
|
|
|
4,409.0
|
|
|
4,476.2
|
|
|
4,549.9
|
Noncontrolling
interests
|
|
|
9.1
|
|
|
10.8
|
|
|
12.4
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
7,693.8
|
|
|
6,530.8
|
|
|
7,176.7
|
|
|
4,409.0
|
|
|
4,476.2
|
|
|
4,549.9
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
27,721.5
|
|
$
|
26,395.1
|
|
$
|
25,643.3
|
|
$
|
40,915.0
|
|
$
|
40,837.1
|
|
$
|
42,057.9
|
|
|
* 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)
|
STATEMENT OF CASH
FLOWS
|
For the Six Months
Ended April 30, 2017 and May 1, 2016
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL 2SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
995.4
|
|
$
|
748.5
|
|
$
|
217.9
|
|
$
|
232.0
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (credit) for
credit losses
|
|
|
(.2)
|
|
|
4.0
|
|
|
32.8
|
|
|
31.1
|
Provision for
depreciation and amortization
|
|
|
427.0
|
|
|
410.2
|
|
|
476.9
|
|
|
399.4
|
Impairment
charges
|
|
|
|
|
|
|
|
|
|
|
|
49.7
|
Gain on sale of
unconsolidated affiliates and investments
|
|
|
(281.4)
|
|
|
|
|
|
|
|
|
|
Undistributed earnings
of unconsolidated subsidiaries and
affiliates
|
|
|
59.8
|
|
|
51.5
|
|
|
(.6)
|
|
|
(1.0)
|
Provision (credit) for
deferred income taxes
|
|
|
(118.8)
|
|
|
(87.3)
|
|
|
18.4
|
|
|
180.6
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
(87.7)
|
|
|
(142.2)
|
|
|
|
|
|
|
Inventories
|
|
|
(771.8)
|
|
|
(136.7)
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
200.0
|
|
|
(107.9)
|
|
|
18.0
|
|
|
14.7
|
Accrued income taxes
payable/receivable
|
|
|
191.5
|
|
|
.2
|
|
|
3.6
|
|
|
11.8
|
Retirement
benefits
|
|
|
111.0
|
|
|
86.8
|
|
|
4.6
|
|
|
4.3
|
Other
|
|
|
(49.2)
|
|
|
(18.2)
|
|
|
104.8
|
|
|
40.7
|
Net cash provided by
operating activities
|
|
|
675.6
|
|
|
808.9
|
|
|
876.4
|
|
|
963.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
8,833.8
|
|
|
8,699.2
|
Proceeds from
maturities and sales of marketable securities
|
|
|
7.9
|
|
|
31.3
|
|
|
33.4
|
|
|
40.1
|
Proceeds from sales
of equipment on operating leases
|
|
|
|
|
|
|
|
|
786.4
|
|
|
630.1
|
Proceeds from sales
of businesses and unconsolidated
affiliates, net of
cash sold
|
|
|
113.9
|
|
|
|
|
|
|
|
|
|
Cost of receivables
acquired (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
(8,238.0)
|
|
|
(7,343.6)
|
Purchases of
marketable securities
|
|
|
|
|
|
(63.1)
|
|
|
(43.7)
|
|
|
(49.1)
|
Purchases of property
and equipment
|
|
|
(252.2)
|
|
|
(231.7)
|
|
|
(.8)
|
|
|
(.9)
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(1,355.6)
|
|
|
(1,567.7)
|
Increase in trade and
wholesale receivables
|
|
|
|
|
|
|
|
|
(1,012.7)
|
|
|
(1,547.0)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
|
|
|
(198.9)
|
|
|
|
|
|
|
Other
|
|
|
(18.1)
|
|
|
(70.9)
|
|
|
(.6)
|
|
|
53.6
|
Net cash used for
investing activities
|
|
|
(148.5)
|
|
|
(533.3)
|
|
|
(997.8)
|
|
|
(1,085.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
(7.4)
|
|
|
(193.4)
|
|
|
190.5
|
|
|
231.7
|
Change in
intercompany receivables/payables
|
|
|
(287.5)
|
|
|
290.8
|
|
|
287.5
|
|
|
(290.8)
|
Proceeds from
long-term borrowings
|
|
|
19.1
|
|
|
133.5
|
|
|
2,642.5
|
|
|
3,143.1
|
Payments of long-term
borrowings
|
|
|
(24.7)
|
|
|
(67.7)
|
|
|
(2,717.5)
|
|
|
(2,618.9)
|
Proceeds from
issuance of common stock
|
|
|
383.6
|
|
|
11.1
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
(6.2)
|
|
|
(205.4)
|
|
|
|
|
|
|
Dividends
paid
|
|
|
(379.5)
|
|
|
(383.2)
|
|
|
(280.2)
|
|
|
(277.1)
|
Excess tax benefits
from share-based compensation
|
|
|
11.3
|
|
|
2.7
|
|
|
|
|
|
|
Other
|
|
|
(25.8)
|
|
|
(14.4)
|
|
|
(13.9)
|
|
|
2.9
|
Net cash provided by
(used for) financing activities
|
|
|
(317.1)
|
|
|
(426.0)
|
|
|
108.9
|
|
|
190.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
(6.7)
|
|
|
41.2
|
|
|
(.8)
|
|
|
11.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
203.3
|
|
|
(109.2)
|
|
|
(13.3)
|
|
|
80.2
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
3,140.5
|
|
|
2,900.0
|
|
|
1,195.3
|
|
|
1,262.2
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
3,343.8
|
|
$
|
2,790.8
|
|
$
|
1,182.0
|
|
$
|
1,342.4
|
|
|
* 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 Six Months
Ended
|
|
Equipment Operations
|
Agriculture and Turf
|
Construction and Forestry
|
|
|
April 30
|
May 1
|
April 30
|
May 1
|
April 30
|
May 1
|
Dollars in millions
|
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
Net
Sales
|
|
$
|
11,958
|
|
$
|
11,876
|
|
$
|
9,392
|
|
$
|
9,341
|
|
$
|
2,566
|
|
$
|
2,535
|
|
Average Identifiable
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With
Inventories at LIFO
|
|
$
|
11,868
|
|
$
|
11,951
|
|
$
|
8,797
|
|
$
|
8,776
|
|
$
|
3,071
|
|
$
|
3,175
|
|
With
Inventories at Standard Cost
|
|
$
|
13,140
|
|
$
|
13,216
|
|
$
|
9,832
|
|
$
|
9,814
|
|
$
|
3,308
|
|
$
|
3,402
|
|
Operating
Profit
|
|
$
|
1,358
|
|
$
|
902
|
|
$
|
1,215
|
|
$
|
759
|
|
$
|
143
|
|
$
|
143
|
|
Percent of
Net Sales
|
|
|
11.4
|
%
|
|
7.6
|
%
|
|
12.9
|
%
|
|
8.1
|
%
|
|
5.6
|
%
|
|
5.6
|
%
|
Operating Return on
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With
Inventories at LIFO
|
|
|
11.4
|
%
|
|
7.5
|
%
|
|
13.8
|
%
|
|
8.6
|
%
|
|
4.7
|
%
|
|
4.5
|
%
|
With
Inventories at Standard Cost
|
|
|
10.3
|
%
|
|
6.8
|
%
|
|
12.4
|
%
|
|
7.7
|
%
|
|
4.3
|
%
|
|
4.2
|
%
|
SVA Cost of
Assets
|
|
$
|
(789)
|
|
$
|
(793)
|
|
$
|
(590)
|
|
$
|
(589)
|
|
$
|
(199)
|
|
$
|
(204)
|
|
SVA
|
|
$
|
569
|
|
$
|
109
|
|
$
|
625
|
|
$
|
170
|
|
$
|
(56)
|
|
$
|
(61)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
Financial
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30
|
May 1
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
218
|
|
$
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,431
|
|
$
|
4,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
4.9
|
%
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
328
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,431
|
|
$
|
4,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
$
|
(333)
|
|
$
|
(340)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
$
|
(5)
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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-second-quarter-earnings-of-802-million-300460447.html
SOURCE Deere & Company