- Improving markets for farm and construction equipment
contribute to higher results for both fourth quarter and full
year.
- Performance shows continued benefit from advanced
products, flexible cost structure.
- 2018 forecast calls for net income of $2.6 billion.
MOLINE, Ill., Nov. 22, 2017 /PRNewswire/ -- Net income
attributable to Deere & Company (NYSE: DE) was $510.3 million, or $1.57 per share, for the fourth quarter ended
October 29, 2017, compared with
$285.3 million, or $0.90 per share, for the quarter ended
October 30, 2016. For fiscal 2017,
net income attributable to Deere & Company was $2.159 billion, or $6.68 per share, compared with $1.524 billion, or $4.81 per share, in 2016.
Worldwide net sales and revenues increased 23 percent, to
$8.018 billion, for the fourth
quarter and increased 12 percent, to $29.738
billion, for the full year. Net sales of the equipment
operations were $7.094 billion for
the quarter and $25.885 billion for
the year, compared with respective totals of $5.650 billion and $23.387
billion in 2016.
"John Deere has completed another successful year as markets for
farm and construction equipment showed improvement and our actions
to build a more durable business model yielded strong results,"
said Samuel R. Allen, chairman and
chief executive officer, adding that the year's sales and earnings
were the fifth-highest in company history. "We saw higher overall
demand for our products with farm machinery sales in South America making especially strong gains
and construction equipment sales rising sharply. At the same time,
the company realized continued benefits from its broad product
portfolio and agile cost structure. As a result, Deere has remained
well-positioned to serve present customers while making investments
aimed at driving growth and attracting additional customers in the
future."
Investments made or announced during the year included the
acquisition of the Wirtgen Group, the world's leading manufacturer
of road construction equipment. The transaction is expected to be
finalized next month. "Wirtgen will establish Deere as a
substantially more prominent player in global
construction-equipment markets," Allen said.
Summary of Operations
Net sales of the worldwide
equipment operations increased 26 percent for the quarter and 11
percent for the full year compared with the same periods in 2016.
Sales included price realization of 1 percent for the quarter and
full year, with a favorable currency-translation effect of 2
percent and 1 percent for the respective periods. Equipment net
sales in the United States and
Canada increased 23 percent for
the quarter and 5 percent for the year. Outside the U.S. and
Canada, net sales increased 30
percent for the quarter and 20 percent for the year, with a
favorable currency-translation effect of 3 percent and 1 percent,
respectively.
Deere's equipment operations reported operating profit of
$669 million for the quarter and
$2.821 billion for the full year,
compared with $354 million and
$1.880 billion in 2016. The
improvement for the quarter was primarily driven by higher shipment
volumes, a favorable product mix and price realization, partially
offset by higher production costs, higher selling,
administrative and general expenses and an impairment charge for
international construction and forestry operations. The full-year
improvement was primarily due to higher shipment volumes, price
realization and a favorable sales mix, partially offset by
increases in production costs, selling, administrative and general
expenses and warranty-related expenses. Full-year results also
benefited from a gain on the sale of the company's remaining
interest in SiteOne Landscape Supply, Inc. (SiteOne).
Net income of the company's equipment operations was
$417 million for the fourth quarter
and $1.707 billion for the year,
compared with $185 million and
$1.058 billion for the corresponding
periods in 2016. The operating factors mentioned above affected
both quarterly and full-year results.
Financial services reported net income attributable to Deere
& Company of $127.8 million for
the quarter and $476.9 million for
the year compared with $109.8 million
and $467.6 million for the periods in
2016. The increases were largely due to lower losses on lease
residual values, with full-year results partially offset by
less-favorable financing spreads and higher selling, administrative
and general expenses.
Company Outlook & Summary
Company equipment sales
are projected to increase by about 22 percent for fiscal 2018 and
by about 38 percent for the first quarter compared with the same
periods of 2017. Included in the forecast is a positive
foreign-currency translation effect of about 2 percent for the year
and about 3 percent for the first quarter. Net sales and revenues
are projected to increase about 19 percent for fiscal 2018, with
net income attributable to Deere & Company of about
$2.6 billion.
The acquisition of the Wirtgen Group, expected to close in
December 2017, is forecast to
contribute about $3.1 billion in net
sales in fiscal 2018. Wirtgen is expected to add about 12 percent
to Deere's sales for the full year and about 6 percent for the
first quarter in comparison with 2017. After estimated expenses for
purchase accounting and transaction costs, Wirtgen is expected to
contribute about $75 million to
operating profit and about $25
million to net income in fiscal 2018.
Allen reaffirmed his belief the future holds substantial promise
for the company. "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 further
progress. These broad trends remain quite compelling and are widely
considered to have ample staying power. We have great confidence in
the company's present course and, backed by its impressive
performance in 2017, firmly believe John Deere is positioned to
deliver stronger, more consistent results in the future."
Equipment Division Performance
Agriculture &
Turf. Sales increased 22 percent for the quarter and 9 percent
for the year due to higher shipment volumes and the favorable
effects of currency translation. Additionally, full-year results
benefited from price realization.
Operating profit was $584 million
for the quarter and $2.484 billion
for the year, compared with $371
million and $1.700 billion for
the respective periods of 2016. The quarter's improvement was
driven mainly by higher shipment volumes and a favorable sales mix,
partially offset by increased production costs and higher selling,
administrative and general expenses. Results were higher for the
year primarily due to increased shipment volumes, price realization
and a favorable sales mix, partially offset by increases in
production costs, selling, administrative and general expenses and
warranty-related expenses. Full-year results benefited from a gain
on the sale of Deere's remaining SiteOne interest.
Construction & Forestry. Construction and forestry
sales increased 37 percent for the quarter and 17 percent for the
year on account of higher shipment volumes, price realization and
the favorable effects of currency translation.
The division reported operating profit of $85 million for the quarter and $337 million for the year, compared with an
operating loss of $17 million and
operating profit of $180 million for
the corresponding periods of 2016. Higher results were mainly
attributable to improved shipment volumes and price realization.
Results for the quarter were partially offset by an impairment
charge for international operations. On a full-year basis, results
were partially offset by higher warranty expenses, increased
selling, administrative and general expenses and higher production
costs.
Market Conditions & Outlook
Agriculture &
Turf. Deere's worldwide sales of agriculture and turf equipment
are forecast to increase by about 9 percent for fiscal-year 2018,
including a positive currency-translation effect of about 2
percent. Industry sales for agricultural equipment in the U.S. and
Canada are forecast to be up 5 to
10 percent for 2018, supported by higher demand for large
equipment. Full-year industry sales in the EU28 member nations are
forecast to be up about 5 percent due to improving conditions in
the dairy and livestock sectors. South American industry sales of
tractors and combines are projected to be flat to up 5 percent as a
result of continued positive conditions, particularly in
Argentina. Asian sales are
forecast to be flat with strength in India offsetting weakness in China. Industry sales of turf and utility
equipment in the U.S. and Canada
are expected to be about flat for 2018. Deere's turf sales are
expected to outperform the industry owing to the success of new
products.
Construction & Forestry. Deere's worldwide sales of
construction and forestry equipment are anticipated to be up about
69 percent for 2018, including a positive currency-translation
effect of about 1 percent. The Wirtgen acquisition is expected to
add about 54 percent to the division's sales for the year. The
outlook reflects moderate economic growth worldwide, including
higher housing starts in the U.S. and increased activity in the oil
and gas sector. In forestry, global industry sales are
expected to be flat to up 5 percent mainly as a result of improved
lumber prices in North
America.
Financial Services. Fiscal-year 2018 net income
attributable to Deere & Company for the financial services
operations is expected to be approximately $515 million. The outlook reflects a higher
average portfolio, partially offset by increased selling,
administrative and general expenses.
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 $101.4 million for the fourth quarter and
$328.4 million for the full year,
compared with $81.7 million and
$341.6 million for the respective
periods in 2016. Results for the quarter benefited from lower
losses on lease residual values. The decline for the full year was
primarily due to less-favorable financing spreads and higher
selling, administrative and general expenses, partially offset by
lower losses on lease residual values.
Net receivables and leases financed by JDCC were $33.000 billion at October
29, 2017, compared with $31.999
billion at October 30,
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, laws 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 and the failure or
delay in closing such transactions; greater than anticipated
transaction costs; the integration of new businesses; the failure
or delay in realizing anticipated benefits of acquisitions, joint
ventures or divestitures; the implementation of organizational
changes; the failure to realize anticipated savings or benefits of
cost reduction, productivity, or efficiency efforts; difficulties
related to the conversion and implementation of enterprise resource
planning systems; security breaches, cybersecurity attacks,
technology failures 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 2017
Press Release
|
(in millions of
dollars)
|
Unaudited
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
October 29
|
|
October 30
|
|
%
|
|
October 29
|
|
October 30
|
|
%
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
5,437
|
|
$
|
4,441
|
|
+22
|
|
$
|
20,167
|
|
$
|
18,487
|
|
+9
|
Construction and
forestry
|
|
|
1,657
|
|
|
1,209
|
|
+37
|
|
|
5,718
|
|
|
4,900
|
|
+17
|
Total net
sales
|
|
|
7,094
|
|
|
5,650
|
|
+26
|
|
|
25,885
|
|
|
23,387
|
|
+11
|
Financial
services
|
|
|
782
|
|
|
740
|
|
+6
|
|
|
2,935
|
|
|
2,694
|
|
+9
|
Other
revenues
|
|
|
142
|
|
|
130
|
|
+9
|
|
|
918
|
|
|
563
|
|
+63
|
Total net sales and
revenues
|
|
$
|
8,018
|
|
$
|
6,520
|
|
+23
|
|
$
|
29,738
|
|
$
|
26,644
|
|
+12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
584
|
|
$
|
371
|
|
+57
|
|
$
|
2,484
|
|
$
|
1,700
|
|
+46
|
Construction and
forestry
|
|
|
85
|
|
|
(17)
|
|
|
|
|
337
|
|
|
180
|
|
+87
|
Financial
services
|
|
|
193
|
|
|
164
|
|
+18
|
|
|
722
|
|
|
709
|
|
+2
|
Total operating
profit
|
|
|
862
|
|
|
518
|
|
+66
|
|
|
3,543
|
|
|
2,589
|
|
+37
|
Reconciling items
**
|
|
|
(130)
|
|
|
(93)
|
|
+40
|
|
|
(413)
|
|
|
(365)
|
|
+13
|
Income
taxes
|
|
|
(222)
|
|
|
(140)
|
|
+59
|
|
|
(971)
|
|
|
(700)
|
|
+39
|
Net income
attributable to Deere & Company
|
|
$
|
510
|
|
$
|
285
|
|
+79
|
|
$
|
2,159
|
|
$
|
1,524
|
|
+42
|
|
|
*
|
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 29, 2017 and October 30, 2016
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
7,094.4
|
|
$
|
5,650.1
|
Finance and interest
income
|
|
|
722.2
|
|
|
662.2
|
Other
income
|
|
|
201.1
|
|
|
207.4
|
Total
|
|
|
8,017.7
|
|
|
6,519.7
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,426.9
|
|
|
4,383.5
|
Research and
development expenses
|
|
|
397.0
|
|
|
386.0
|
Selling,
administrative and general expenses
|
|
|
840.8
|
|
|
747.1
|
Interest
expense
|
|
|
248.3
|
|
|
198.8
|
Other operating
expenses
|
|
|
338.2
|
|
|
369.9
|
Total
|
|
|
7,251.2
|
|
|
6,085.3
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
766.5
|
|
|
434.4
|
Provision for income
taxes
|
|
|
222.3
|
|
|
140.2
|
Income of
Consolidated Group
|
|
|
544.2
|
|
|
294.2
|
Equity in loss of
unconsolidated affiliates
|
|
|
(33.5)
|
|
|
(9.8)
|
Net
Income
|
|
|
510.7
|
|
|
284.4
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
|
.4
|
|
|
(.9)
|
Net Income
Attributable to Deere & Company
|
|
$
|
510.3
|
|
$
|
285.3
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
1.59
|
|
$
|
.91
|
Diluted
|
|
$
|
1.57
|
|
$
|
.90
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
321.6
|
|
|
314.6
|
Diluted
|
|
|
325.8
|
|
|
316.2
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED INCOME
|
For the Years Ended
October 29, 2017 and October 30, 2016
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
25,885.1
|
|
$
|
23,387.3
|
Finance and interest
income
|
|
|
2,731.5
|
|
|
2,511.2
|
Other
income
|
|
|
1,121.1
|
|
|
745.5
|
Total
|
|
|
29,737.7
|
|
|
26,644.0
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
19,933.5
|
|
|
18,248.9
|
Research and
development expenses
|
|
|
1,367.7
|
|
|
1,389.1
|
Selling,
administrative and general expenses
|
|
|
3,066.6
|
|
|
2,763.7
|
Interest
expense
|
|
|
899.5
|
|
|
763.7
|
Other operating
expenses
|
|
|
1,316.6
|
|
|
1,254.6
|
Total
|
|
|
26,583.9
|
|
|
24,420.0
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
3,153.8
|
|
|
2,224.0
|
Provision for income
taxes
|
|
|
971.1
|
|
|
700.1
|
Income of
Consolidated Group
|
|
|
2,182.7
|
|
|
1,523.9
|
Equity in loss of
unconsolidated affiliates
|
|
|
(23.5)
|
|
|
(2.4)
|
Net
Income
|
|
|
2,159.2
|
|
|
1,521.5
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
|
.1
|
|
|
(2.4)
|
Net Income
Attributable to Deere & Company
|
|
$
|
2,159.1
|
|
$
|
1,523.9
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
6.76
|
|
$
|
4.83
|
Diluted
|
|
$
|
6.68
|
|
$
|
4.81
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
319.5
|
|
|
315.2
|
Diluted
|
|
|
323.3
|
|
|
316.6
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
As of October 29,
2017 and October 30, 2016
|
(In millions of
dollars) Unaudited
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
9,334.9
|
|
$
|
4,335.8
|
Marketable
securities
|
|
|
451.6
|
|
|
453.5
|
Receivables from
unconsolidated affiliates
|
|
|
35.9
|
|
|
16.5
|
Trade accounts and
notes receivable - net
|
|
|
3,924.9
|
|
|
3,011.3
|
Financing receivables
- net
|
|
|
25,104.1
|
|
|
23,702.3
|
Financing receivables
securitized - net
|
|
|
4,158.8
|
|
|
5,126.5
|
Other
receivables
|
|
|
1,200.0
|
|
|
1,018.5
|
Equipment on
operating leases - net
|
|
|
6,593.7
|
|
|
5,901.5
|
Inventories
|
|
|
3,904.1
|
|
|
3,340.5
|
Property and
equipment - net
|
|
|
5,067.7
|
|
|
5,170.6
|
Investments in
unconsolidated affiliates
|
|
|
182.5
|
|
|
232.6
|
Goodwill
|
|
|
1,033.3
|
|
|
815.7
|
Other intangible
assets - net
|
|
|
218.0
|
|
|
104.1
|
Retirement
benefits
|
|
|
538.2
|
|
|
93.6
|
Deferred income
taxes
|
|
|
2,415.0
|
|
|
2,964.4
|
Other
assets
|
|
|
1,623.6
|
|
|
1,631.1
|
Total
Assets
|
|
$
|
65,786.3
|
|
$
|
57,918.5
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
10,035.3
|
|
$
|
6,910.7
|
Short-term
securitization borrowings
|
|
|
4,118.7
|
|
|
4,997.8
|
Payables to
unconsolidated affiliates
|
|
|
121.9
|
|
|
81.6
|
Accounts payable and
accrued expenses
|
|
|
8,417.0
|
|
|
7,240.1
|
Deferred income
taxes
|
|
|
209.7
|
|
|
166.0
|
Long-term
borrowings
|
|
|
25,891.3
|
|
|
23,703.0
|
Retirement benefits
and other liabilities
|
|
|
7,417.9
|
|
|
8,274.5
|
Total
liabilities
|
|
|
56,211.8
|
|
|
51,373.7
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
14.0
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
9,557.3
|
|
|
6,520.0
|
Noncontrolling
interests
|
|
|
3.2
|
|
|
10.8
|
Total stockholders'
equity
|
|
|
9,560.5
|
|
|
6,530.8
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
65,786.3
|
|
$
|
57,918.5
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED CASH FLOWS
|
For the Years Ended
October 29, 2017 and October 30, 2016
|
(In millions of
dollars) Unaudited
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
2,159.2
|
|
$
|
1,521.5
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
98.3
|
|
|
94.3
|
Provision for
depreciation and amortization
|
|
|
1,715.5
|
|
|
1,559.8
|
Impairment
charges
|
|
|
39.8
|
|
|
85.1
|
Share-based
compensation expense
|
|
|
68.1
|
|
|
70.6
|
Gain on sale of
unconsolidated affiliates and investments
|
|
|
(375.1)
|
|
|
(74.5)
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(14.4)
|
|
|
(1.9)
|
Provision for deferred
income taxes
|
|
|
100.1
|
|
|
282.7
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes and
financing receivables related to sales
|
|
|
(838.9)
|
|
|
335.2
|
Inventories
|
|
|
(1,305.3)
|
|
|
(106.1)
|
Accounts payable and
accrued expenses
|
|
|
968.0
|
|
|
(155.2)
|
Accrued income taxes
payable/receivable
|
|
|
(84.2)
|
|
|
7.0
|
Retirement
benefits
|
|
|
(31.9)
|
|
|
238.6
|
Other
|
|
|
(299.4)
|
|
|
(87.4)
|
Net cash provided by
operating activities
|
|
|
2,199.8
|
|
|
3,769.7
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
14,671.1
|
|
|
14,611.4
|
Proceeds from
maturities and sales of marketable securities
|
|
|
404.2
|
|
|
169.4
|
Proceeds from sales
of equipment on operating leases
|
|
|
1,440.8
|
|
|
1,256.2
|
Proceeds from sales
of business and unconsolidated affiliates, net of cash
sold
|
|
|
113.9
|
|
|
81.1
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(15,221.8)
|
|
|
(13,954.5)
|
Purchases of
marketable securities
|
|
|
(118.0)
|
|
|
(171.2)
|
Purchases of property
and equipment
|
|
|
(594.9)
|
|
|
(644.4)
|
Cost of equipment on
operating leases acquired
|
|
|
(1,997.4)
|
|
|
(2,310.7)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(284.2)
|
|
|
(198.5)
|
Other
|
|
|
(58.0)
|
|
|
(16.0)
|
Net cash used for
investing activities
|
|
|
(1,644.3)
|
|
|
(1,177.2)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
1,310.6
|
|
|
(1,213.6)
|
Proceeds from
long-term borrowings
|
|
|
8,702.2
|
|
|
5,070.7
|
Payments of long-term
borrowings
|
|
|
(5,397.0)
|
|
|
(5,267.6)
|
Proceeds from
issuance of common stock
|
|
|
528.7
|
|
|
36.0
|
Repurchases of common
stock
|
|
|
(6.2)
|
|
|
(205.4)
|
Dividends
paid
|
|
|
(764.0)
|
|
|
(761.3)
|
Other
|
|
|
(87.8)
|
|
|
(64.7)
|
Net cash provided by
(used for) financing activities
|
|
|
4,286.5
|
|
|
(2,405.9)
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
157.1
|
|
|
(13.0)
|
|
|
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
|
|
4,999.1
|
|
|
173.6
|
Cash and Cash
Equivalents at Beginning of Year
|
|
|
4,335.8
|
|
|
4,162.2
|
Cash and Cash
Equivalents at End of Year
|
|
$
|
9,334.9
|
|
$
|
4,335.8
|
|
|
See Condensed Notes
to Interim Consolidated Financial Statements.
|
Condensed Notes to
Interim Consolidated Financial Statements (Unaudited)
|
|
|
(1)
|
In September 2017,
the company acquired Blue River Technology (Blue River), which is
based in Sunnyvale, California for an acquisition cost of
approximately $284 million, net of cash acquired of $4 million and
$21 million funded to escrow for post-acquisition expenses. Blue
River has designed and integrated computer vision and machine
learning technology to optimize the use of farm inputs. Machine
learning technologies could eventually be applied to a wide range
of the company's products. The preliminary fair values assigned to
the assets and liabilities related to the acquired entity were
approximately $1 million of trade receivables, $2 million of
property and equipment, $193 million of goodwill, $125 million of
identifiable intangible assets, $1 million of accounts payable and
accrued expenses, and $36 million of net deferred tax liabilities.
The identifiable intangibles were primarily related to in-process
research and development, which will not be amortized until the
research and development efforts are complete or end. The goodwill
is not expected to be deducted for tax purposes. Blue River is
included in the company's agriculture and turf operating
segment.
|
|
|
(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. In July 2017, the Company sold its remaining
interest in SiteOne resulting in gross proceeds of $98 million and
a gain of $94 million pretax or $59 million after-tax. The gains
were recorded in other income in the agriculture and turf operating
segment.
|
|
|
(3)
|
In the third quarter
of 2017, the Company early adopted ASU No. 2016-09, Improvements to
Employee Share-Based Payment Accounting, which amends ASC 718,
Compensation – Stock Compensation. This ASU changes the treatment
of share based payment transactions by recognizing the impact of
excess tax benefits or deficiencies related to exercised or vested
awards in income tax expense in the period of exercise or vesting,
instead of common stock. As required, this change was reflected for
all periods in fiscal year 2017. This change increased net income
in the fourth quarter and full year 2017 by $5 million and $30
million, respectively. The ASU also modified the presentation of
excess tax benefits in the statement of consolidated cash flows by
including that amount with other income tax cash flows as an
operating activity and no longer presented separately as a
financing activity. This change was recognized through a
retrospective application that increased net cash flow provided by
operating activities by approximately $30 million and $4 million
for fiscal years 2017 and 2016, respectively.
|
|
|
(4)
|
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 was recorded in the period the
employees accepted the separation offer. The programs' total pretax
expenses were approximately $113 million, of which $11 million was
recorded in the fourth quarter of 2016, $101 million was recorded
in the first nine months of 2017, and $1 million was recognized in
the fourth quarter of 2017. 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
75 percent to agriculture and turf operations, 17 percent to the
construction and forestry operations, and 8 percent to the
financial services operations. Savings from these programs were
estimated to be approximately $70 million in 2017.
|
|
|
(5)
|
Dividends declared
and paid on a per share basis were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
October 29
|
|
October 30
|
|
October 29
|
|
October 30
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
2.40
|
|
$
|
2.40
|
|
Dividends
paid
|
|
$
|
.60
|
|
$
|
.60
|
|
$
|
2.40
|
|
$
|
2.40
|
|
|
(6)
|
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.
|
|
|
(7)
|
The consolidated
financial statements represent the consolidation of all
Deere & Company's subsidiaries. In the supplemental
consolidating data in Note 8 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.
|
(8) SUPPLEMENTAL
CONSOLIDATING DATA
|
STATEMENT OF
INCOME
|
For the Three Months
Ended October 29, 2017 and October 30, 2016
|
(In millions of dollars) Unaudited
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
7,094.4
|
|
$
|
5,650.1
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
11.4
|
|
|
15.3
|
|
$
|
779.6
|
|
$
|
701.2
|
Other
income
|
|
|
200.7
|
|
|
156.7
|
|
|
68.4
|
|
|
85.1
|
Total
|
|
|
7,306.5
|
|
|
5,822.1
|
|
|
848.0
|
|
|
786.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
5,427.4
|
|
|
4,384.1
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
397.0
|
|
|
386.0
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
714.5
|
|
|
619.9
|
|
|
128.3
|
|
|
128.8
|
Interest
expense
|
|
|
64.1
|
|
|
54.8
|
|
|
189.8
|
|
|
149.8
|
Interest compensation
to Financial Services
|
|
|
63.0
|
|
|
48.4
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
67.3
|
|
|
57.6
|
|
|
336.6
|
|
|
344.6
|
Total
|
|
|
6,733.3
|
|
|
5,550.8
|
|
|
654.7
|
|
|
623.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
573.2
|
|
|
271.3
|
|
|
193.3
|
|
|
163.1
|
Provision for income
taxes
|
|
|
156.7
|
|
|
86.4
|
|
|
65.6
|
|
|
53.8
|
Income of
Consolidated Group
|
|
|
416.5
|
|
|
184.9
|
|
|
127.7
|
|
|
109.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
127.8
|
|
|
109.8
|
|
|
.1
|
|
|
.5
|
Other
|
|
|
(33.6)
|
|
|
(10.3)
|
|
|
|
|
|
|
Total
|
|
|
94.2
|
|
|
99.5
|
|
|
.1
|
|
|
.5
|
Net
Income
|
|
|
510.7
|
|
|
284.4
|
|
|
127.8
|
|
|
109.8
|
Less: Net income (loss)
attributable to noncontrolling interests
|
|
|
.4
|
|
|
(.9)
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
510.3
|
|
$
|
285.3
|
|
$
|
127.8
|
|
$
|
109.8
|
|
|
* 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
INCOME
|
For the Years Ended
October 29, 2017 and October 30, 2016
|
(In millions of dollars) Unaudited
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
25,885.1
|
|
$
|
23,387.3
|
|
|
|
|
|
|
Finance and interest
income
|
|
|
71.7
|
|
|
61.1
|
|
$
|
2,928.2
|
|
$
|
2,690.1
|
Other
income
|
|
|
1,065.0
|
|
|
653.7
|
|
|
250.9
|
|
|
229.0
|
Total
|
|
|
27,021.8
|
|
|
24,102.1
|
|
|
3,179.1
|
|
|
2,919.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
19,935.2
|
|
|
18,250.8
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
1,367.7
|
|
|
1,389.1
|
|
|
|
|
|
|
Selling,
administrative and general expenses
|
|
|
2,530.7
|
|
|
2,262.5
|
|
|
542.3
|
|
|
508.5
|
Interest
expense
|
|
|
263.7
|
|
|
250.5
|
|
|
669.2
|
|
|
536.5
|
Interest compensation
to Financial Services
|
|
|
234.5
|
|
|
216.6
|
|
|
|
|
|
|
Other operating
expenses
|
|
|
257.0
|
|
|
215.7
|
|
|
1,246.8
|
|
|
1,167.0
|
Total
|
|
|
24,588.8
|
|
|
22,585.2
|
|
|
2,458.3
|
|
|
2,212.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
2,433.0
|
|
|
1,516.9
|
|
|
720.8
|
|
|
707.1
|
Provision for income
taxes
|
|
|
726.0
|
|
|
459.0
|
|
|
245.1
|
|
|
241.1
|
Income of
Consolidated Group
|
|
|
1,707.0
|
|
|
1,057.9
|
|
|
475.7
|
|
|
466.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Unconsolidated Subsidiaries and Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
|
476.9
|
|
|
467.6
|
|
|
1.2
|
|
|
1.6
|
Other
|
|
|
(24.7)
|
|
|
(4.0)
|
|
|
|
|
|
|
Total
|
|
|
452.2
|
|
|
463.6
|
|
|
1.2
|
|
|
1.6
|
Net
Income
|
|
|
2,159.2
|
|
|
1,521.5
|
|
|
476.9
|
|
|
467.6
|
Less: Net income (loss)
attributable to noncontrolling interests
|
|
|
.1
|
|
|
(2.4)
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
2,159.1
|
|
$
|
1,523.9
|
|
$
|
476.9
|
|
$
|
467.6
|
|
|
* 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)
|
CONDENSED BALANCE
SHEET
|
As of October 29,
2017 and October 30, 2016
|
(In millions of dollars) Unaudited
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,168.4
|
|
$
|
3,140.5
|
|
$
|
1,166.5
|
|
$
|
1,195.3
|
Marketable
securities
|
|
|
20.2
|
|
|
34.2
|
|
|
431.4
|
|
|
419.3
|
Receivables from
unconsolidated subsidiaries and affiliates
|
|
|
1,032.1
|
|
|
3,150.1
|
|
|
|
|
|
|
Trade accounts and
notes receivable - net
|
|
|
876.3
|
|
|
654.2
|
|
|
4,134.1
|
|
|
3,370.5
|
Financing receivables
- net
|
|
|
|
|
|
.4
|
|
|
25,104.1
|
|
|
23,701.9
|
Financing receivables
securitized - net
|
|
|
|
|
|
|
|
|
4,158.8
|
|
|
5,126.5
|
Other
receivables
|
|
|
1,045.6
|
|
|
855.4
|
|
|
195.5
|
|
|
164.0
|
Equipment on
operating leases - net
|
|
|
|
|
|
|
|
|
6,593.7
|
|
|
5,901.5
|
Inventories
|
|
|
3,904.1
|
|
|
3,340.5
|
|
|
|
|
|
|
Property and
equipment - net
|
|
|
5,017.3
|
|
|
5,118.5
|
|
|
50.4
|
|
|
52.1
|
Investments in
unconsolidated subsidiaries and affiliates
|
|
|
4,812.3
|
|
|
4,697.0
|
|
|
13.8
|
|
|
11.9
|
Goodwill
|
|
|
1,033.3
|
|
|
815.7
|
|
|
|
|
|
|
Other intangible
assets - net
|
|
|
218.0
|
|
|
104.1
|
|
|
|
|
|
|
Retirement
benefits
|
|
|
538.1
|
|
|
93.6
|
|
|
16.9
|
|
|
20.5
|
Deferred income
taxes
|
|
|
3,098.8
|
|
|
3,556.0
|
|
|
79.8
|
|
|
75.5
|
Other
assets
|
|
|
973.9
|
|
|
834.9
|
|
|
651.4
|
|
|
798.1
|
Total
Assets
|
|
$
|
30,738.4
|
|
$
|
26,395.1
|
|
$
|
42,596.4
|
|
$
|
40,837.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
375.5
|
|
$
|
249.0
|
|
$
|
9,659.8
|
|
$
|
6,661.7
|
Short-term
securitization borrowings
|
|
|
|
|
|
|
|
|
4,118.7
|
|
|
4,997.8
|
Payables to
unconsolidated subsidiaries and affiliates
|
|
|
121.9
|
|
|
81.5
|
|
|
996.2
|
|
|
3,133.6
|
Accounts payable and
accrued expenses
|
|
|
7,718.1
|
|
|
6,661.2
|
|
|
1,827.1
|
|
|
1,595.2
|
Deferred income
taxes
|
|
|
115.6
|
|
|
87.3
|
|
|
857.7
|
|
|
745.9
|
Long-term
borrowings
|
|
|
5,490.9
|
|
|
4,565.3
|
|
|
20,400.4
|
|
|
19,137.7
|
Retirement benefits
and other liabilities
|
|
|
7,341.9
|
|
|
8,206.0
|
|
|
92.9
|
|
|
89.0
|
Total
liabilities
|
|
|
21,163.9
|
|
|
19,850.3
|
|
|
37,952.8
|
|
|
36,360.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
14.0
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Deere & Company stockholders' equity
|
|
|
9,557.3
|
|
|
6,520.0
|
|
|
4,643.6
|
|
|
4,476.2
|
Noncontrolling
interests
|
|
|
3.2
|
|
|
10.8
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
9,560.5
|
|
|
6,530.8
|
|
|
4,643.6
|
|
|
4,476.2
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
30,738.4
|
|
$
|
26,395.1
|
|
$
|
42,596.4
|
|
$
|
40,837.1
|
|
|
* 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 29, 2017 and October 30, 2016
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS*
|
|
FINANCIAL SERVICES
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2,159.2
|
|
$
|
1,521.5
|
|
$
|
476.9
|
|
$
|
467.6
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
9.9
|
|
|
8.2
|
|
|
88.4
|
|
|
86.1
|
Provision for
depreciation and amortization
|
|
|
839.3
|
|
|
803.4
|
|
|
984.3
|
|
|
846.7
|
Impairment
charges
|
|
|
39.8
|
|
|
25.4
|
|
|
|
|
|
59.7
|
Gain on sale of
unconsolidated affiliates and investments
|
|
|
(375.1)
|
|
|
(74.5)
|
|
|
|
|
|
|
Undistributed earnings
of unconsolidated subsidiaries and affiliates
|
|
|
(125.0)
|
|
|
94.0
|
|
|
(1.1)
|
|
|
(1.5)
|
Provision (credit) for
deferred income taxes
|
|
|
(6.7)
|
|
|
13.2
|
|
|
106.8
|
|
|
269.5
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
(243.9)
|
|
|
(175.3)
|
|
|
|
|
|
|
Inventories
|
|
|
(504.3)
|
|
|
578.4
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
946.2
|
|
|
(169.6)
|
|
|
93.9
|
|
|
40.6
|
Accrued income taxes
payable/receivable
|
|
|
(122.7)
|
|
|
18.2
|
|
|
38.5
|
|
|
(11.2)
|
Retirement
benefits
|
|
|
(39.2)
|
|
|
232.4
|
|
|
7.3
|
|
|
6.2
|
Other
|
|
|
(139.5)
|
|
|
36.5
|
|
|
81.5
|
|
|
97.1
|
Net cash provided by
operating activities
|
|
|
2,438.0
|
|
|
2,911.8
|
|
|
1,876.5
|
|
|
1,860.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
15,963.2
|
|
|
15,831.4
|
Proceeds from
maturities and sales of marketable securities
|
|
|
297.9
|
|
|
81.9
|
|
|
106.3
|
|
|
87.5
|
Proceeds from sales
of equipment on operating leases
|
|
|
|
|
|
|
|
|
1,440.8
|
|
|
1,256.2
|
Proceeds from sales
of business and unconsolidated affiliates, net of cash
sold
|
|
|
113.9
|
|
|
81.1
|
|
|
|
|
|
|
Cost of receivables
acquired (excluding trade and wholesale)
|
|
|
|
|
|
|
|
|
(16,799.9)
|
|
|
(15,168.2)
|
Purchases of
marketable securities
|
|
|
|
|
|
(59.4)
|
|
|
(118.0)
|
|
|
(111.8)
|
Purchases of property
and equipment
|
|
|
(591.4)
|
|
|
(641.8)
|
|
|
(3.5)
|
|
|
(2.6)
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(3,079.8)
|
|
|
(3,235.7)
|
Increase in
investment in Financial Services
|
|
|
(20.0)
|
|
|
(28.2)
|
|
|
|
|
|
|
Decrease (increase)
in trade and wholesale receivables
|
|
|
|
|
|
|
|
|
(379.9)
|
|
|
492.5
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(284.2)
|
|
|
(198.5)
|
|
|
|
|
|
|
Other
|
|
|
(32.7)
|
|
|
(55.2)
|
|
|
(26.5)
|
|
|
24.6
|
Net cash used for
investing activities
|
|
|
(516.5)
|
|
|
(820.1)
|
|
|
(2,897.3)
|
|
|
(826.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in total short-term borrowings
|
|
|
64.5
|
|
|
(207.2)
|
|
|
1,246.1
|
|
|
(1,006.4)
|
Change in
intercompany receivables/payables
|
|
|
2,142.0
|
|
|
(756.0)
|
|
|
(2,142.0)
|
|
|
756.0
|
Proceeds from
long-term borrowings
|
|
|
1,107.0
|
|
|
173.4
|
|
|
7,595.2
|
|
|
4,897.3
|
Payments of long-term
borrowings
|
|
|
(66.3)
|
|
|
(72.8)
|
|
|
(5,330.7)
|
|
|
(5,194.8)
|
Proceeds from
issuance of common stock
|
|
|
528.7
|
|
|
36.0
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
(6.2)
|
|
|
(205.4)
|
|
|
|
|
|
|
Capital investment
from Equipment Operations
|
|
|
|
|
|
|
|
|
20.0
|
|
|
28.2
|
Dividends
paid
|
|
|
(764.0)
|
|
|
(761.3)
|
|
|
(365.2)
|
|
|
(562.1)
|
Other
|
|
|
(54.4)
|
|
|
(36.7)
|
|
|
(33.4)
|
|
|
(28.0)
|
Net cash provided by
(used for) financing activities
|
|
|
2,951.3
|
|
|
(1,830.0)
|
|
|
990.0
|
|
|
(1,109.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
155.1
|
|
|
(21.2)
|
|
|
2.0
|
|
|
8.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
|
5,027.9
|
|
|
240.5
|
|
|
(28.8)
|
|
|
(66.9)
|
Cash and Cash
Equivalents at Beginning of Year
|
|
|
3,140.5
|
|
|
2,900.0
|
|
|
1,195.3
|
|
|
1,262.2
|
Cash and Cash
Equivalents at End of Year
|
|
$
|
8,168.4
|
|
$
|
3,140.5
|
|
$
|
1,166.5
|
|
$
|
1,195.3
|
|
|
* Deere &
Company with Financial Services on the equity basis.
|
|
The supplemental
consolidating data is presented for informational purposes.
Transactions between the "Equipment Operations" and "Financial
Services" have been eliminated to arrive at the consolidated
financial statements.
|
Deere &
Company
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended
|
|
Equipment Operations
|
Agriculture and Turf
|
Construction and Forestry
|
|
|
October 29
|
October 30
|
October 29
|
October 30
|
October 29
|
October 30
|
Dollars in millions
|
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
Net
Sales
|
|
$
|
25,885
|
|
$
|
23,387
|
|
$
|
20,167
|
|
$
|
18,487
|
|
$
|
5,718
|
|
$
|
4,900
|
|
Average Identifiable
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
12,150
|
|
$
|
11,816
|
|
$
|
8,996
|
|
$
|
8,669
|
|
$
|
3,154
|
|
$
|
3,147
|
|
With Inventories at
Standard Cost
|
|
$
|
13,421
|
|
$
|
13,092
|
|
$
|
10,031
|
|
$
|
9,718
|
|
$
|
3,390
|
|
$
|
3,374
|
|
Operating
Profit
|
|
$
|
2,821
|
|
$
|
1,880
|
|
$
|
2,484
|
|
$
|
1,700
|
|
$
|
337
|
|
$
|
180
|
|
Percent of Net
Sales
|
|
|
10.9
|
%
|
|
8.0
|
%
|
|
12.3
|
%
|
|
9.2
|
%
|
|
5.9
|
%
|
|
3.7
|
%
|
Operating Return on
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
|
23.2
|
%
|
|
15.9
|
%
|
|
27.6
|
%
|
|
19.6
|
%
|
|
10.7
|
%
|
|
5.7
|
%
|
With Inventories at
Standard Cost
|
|
|
21.0
|
%
|
|
14.4
|
%
|
|
24.8
|
%
|
|
17.5
|
%
|
|
9.9
|
%
|
|
5.3
|
%
|
SVA Cost of
Assets
|
|
$
|
(1,611)
|
|
$
|
(1,570)
|
|
$
|
(1,204)
|
|
$
|
(1,165)
|
|
$
|
(407)
|
|
$
|
(405)
|
|
SVA
|
|
$
|
1,210
|
|
$
|
310
|
|
$
|
1,280
|
|
$
|
535
|
|
$
|
(70)
|
|
$
|
(225)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended
|
|
Financial
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 29
|
October 30
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
477
|
|
$
|
468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,497
|
|
$
|
4,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
10.6
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
722
|
|
$
|
709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
4,497
|
|
$
|
4,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
$
|
(680)
|
|
$
|
(680)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
$
|
42
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
View original
content:http://www.prnewswire.com/news-releases/deere-reports-earnings-of-510-million-for-fourth-quarter-and-2159-billion-for-year-300560492.html
SOURCE Deere & Company