- Quarterly earnings rise 17% on increase in net sales of
9%.
- Market conditions and industry fundamentals support
continuation of robust environment.
- Full-year earnings forecast increased to $7.0 to $7.4
billion, including special items.
MOLINE,
Ill., May 20, 2022 /PRNewswire/ -- Deere &
Company (NYSE: DE) reported net income of $2.098 billion for the second quarter ended
May 1, 2022, or $6.81 per share, compared with net income of
$1.790 billion, or $5.68 per share, for the quarter ended
May 2, 2021. For the first six months
of the year, net income attributable to Deere & Company was
$3.001 billion, or $9.72 per share, compared with $3.013 billion, or $9.55 per share, for the same period last
year.
Net sales and revenues increased 11 percent, to $13.370 billion, for the second quarter of 2022
and rose 8 percent, to $22.939
billion, for six months. Net sales were $12.034 billion for the quarter and $20.565 billion for six months, compared with
$10.998 billion and $19.049 billion last year.
"Deere's second-quarter performance reflected a continuation of
strong demand even as we face supply-chain pressures affecting
production levels and delivery schedules," said John C. May, chairman and chief executive
officer. "Deere employees, suppliers, and dealers are working hard
to address these challenges. We are proud of their extraordinary
efforts to get products to our customers as soon as possible under
the challenging circumstances."
Company Outlook &
Summary
Net income attributable to Deere & Company for fiscal 2022
is forecast to be in a range of $7.0
billion to $7.4 billion, which
includes a net $220 million gain from
special items in the second quarter of 2022. For further details on
special items, see Note 1 of the press release financial
statements.
"Looking ahead, we believe demand for farm equipment will
continue benefiting from positive fundamentals in spite of
availability concerns and inflationary pressures affecting our
customers' input costs," May said. "The company's smart industrial
strategy and recently announced Leap Ambitions are focused on
helping customers manage higher costs and increasingly scarce
inputs, while improving their yields, through the use of our
integrated technologies."
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deere &
Company
|
|
Second
Quarter
|
|
Year to Date
|
|
$ in millions,
except per share amounts
|
|
2022
|
|
2021
|
|
% Change
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales and
revenues
|
|
$
|
13,370
|
|
$
|
12,058
|
|
11%
|
|
$
|
22,939
|
|
$
|
21,170
|
|
8%
|
|
Net income
|
|
$
|
2,098
|
|
$
|
1,790
|
|
17%
|
|
$
|
3,001
|
|
$
|
3,013
|
|
|
|
Fully diluted
EPS
|
|
$
|
6.81
|
|
$
|
5.68
|
|
|
|
$
|
9.72
|
|
$
|
9.55
|
|
|
|
Results for the second quarter of 2022 and year-to-date periods
of 2022 and 2021 were impacted by special items. For further
details, see Note 1 of the press release financial
statements.
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|
|
|
|
|
|
|
|
|
Production &
Precision Agriculture
|
|
Second
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
5,117
|
|
$
|
4,529
|
|
13%
|
|
Operating
profit
|
|
$
|
1,057
|
|
$
|
1,007
|
|
5%
|
|
Operating
margin
|
|
|
20.7%
|
|
|
22.2%
|
|
|
|
Production and precision agriculture sales increased for the
quarter due to price realization and higher shipment volumes.
Operating profit rose primarily due to price realization and higher
shipment volumes / sales mix. These items were partially offset by
higher production costs, higher research and development and
selling, administrative, and general expenses, and impairments
related to events in Russia /
Ukraine.
|
|
|
|
|
|
|
|
|
|
Small Agriculture
& Turf
|
|
Second
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
3,570
|
|
$
|
3,390
|
|
5%
|
|
Operating
profit
|
|
$
|
520
|
|
$
|
648
|
|
-20%
|
|
Operating
margin
|
|
|
14.6%
|
|
|
19.1%
|
|
|
|
Small agriculture and turf sales for the quarter increased due
to price realization partially offset by the unfavorable impact of
currency translation. Operating profit decreased primarily due to
higher production costs, a less-favorable sales mix, and higher
selling, administrative, and general and research and development
expenses. These items were partially offset by price
realization.
|
|
|
|
|
|
|
|
|
|
Construction &
Forestry
|
|
Second
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net sales
|
|
$
|
3,347
|
|
$
|
3,079
|
|
9%
|
|
Operating
profit
|
|
$
|
814
|
|
$
|
489
|
|
66%
|
|
Operating
margin
|
|
|
24.3%
|
|
|
15.9%
|
|
|
|
Construction and forestry sales moved higher for the quarter
primarily due to price realization and higher shipment volumes,
partially offset by the unfavorable impact of currency translation.
Operating profit increased due to a non-cash gain on the
remeasurement of the previously held equity investment in the
Deere-Hitachi joint venture and price realization. These items were
partially offset by higher production costs, impairments related to
the events in Russia /
Ukraine, and a less-favorable
product mix.
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
Second
Quarter
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
Net income
|
|
$
|
208
|
|
$
|
222
|
|
-6%
|
|
The decrease in financial services net income for the quarter
was mainly due to higher reserves for credit losses related to the
events in Russia / Ukraine, partially offset by income earned on
a higher average portfolio. The prior year also benefited from a
favorable adjustment to the provision for credit losses.
|
|
|
|
|
|
|
|
Industry Outlook for
Fiscal 2022
|
|
|
|
|
|
|
|
Agriculture &
Turf
|
|
|
|
|
|
|
|
U.S. &
Canada:
|
|
|
|
|
|
|
|
Large Ag
|
|
|
|
|
|
Up ~ 20%
|
|
Small Ag &
Turf
|
|
|
|
|
|
~ Flat
|
|
Europe
|
|
|
|
|
|
Up ~ 5%
|
|
South America (Tractors
& Combines)
|
|
|
|
|
|
Up ~ 10%
|
|
Asia
|
|
|
|
|
|
Down
moderately
|
|
|
|
|
|
|
|
|
|
Construction &
Forestry
|
|
|
|
|
|
|
|
U.S. &
Canada:
|
|
|
|
|
|
|
|
Construction
Equipment
|
|
|
|
|
|
Up ~ 10%
|
|
Compact Construction
Equipment
|
|
|
|
|
|
Flat to Up
5%
|
|
Global
Forestry
|
|
|
|
|
|
Flat to Up
5%
|
|
Global
Roadbuilding
|
|
|
|
|
|
Flat to Up
5%
|
|
|
|
|
|
|
|
|
|
Deere Segment
Outlook for Fiscal 2022
|
|
|
|
Currency
|
|
Price
|
|
$ in
millions
|
|
Net Sales
|
|
Translation
|
|
Realization
|
|
Production &
Precision Ag
|
|
Up 25 to 30%
|
|
-1%
|
|
+13%
|
|
Small Ag &
Turf
|
|
Up ~ 15%
|
|
-3%
|
|
+8%
|
|
Construction &
Forestry
|
|
Up 10 to 15%
|
|
-2%
|
|
+9%
|
|
|
|
|
|
|
|
|
|
Financial
Services
|
|
Net Income
|
|
$ 870
|
|
|
|
Financial Services. Full-year 2022 results are
expected to be slightly lower than fiscal 2021 due to a higher
provision for credit losses and higher selling, administrative, and
general expenses. These factors are expected to be partially offset
by income earned on a higher average portfolio.
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.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
Year to Date
|
|
$ in
millions
|
|
2022
|
|
2021
|
|
% Change
|
|
2022
|
|
2021
|
|
% Change
|
|
Revenue
|
|
$
|
651
|
|
$
|
675
|
|
-4%
|
|
$
|
1,294
|
|
$
|
1,332
|
|
-3%
|
|
Net income
|
|
$
|
159
|
|
$
|
177
|
|
-10%
|
|
$
|
348
|
|
$
|
344
|
|
1%
|
|
Ending portfolio
balance
|
|
|
|
|
|
|
|
|
|
$
|
42,543
|
|
$
|
40,613
|
|
5%
|
|
Results in the quarter decreased due to a higher provision for
credit losses and less-favorable financing spreads, partially
offset by income earned on a higher average portfolio. For the
year-to-date period, net income rose mainly due to income earned on
a higher average portfolio and improvement on operating-lease
residual values, partially offset by a higher provision for credit
losses and less-favorable financing spreads. The prior year also
benefited from a favorable adjustment to the provision for credit
losses.
FORWARD-LOOKING
STATEMENTS
Certain statements contained herein, including in the sections
entitled "Company Outlook & Summary," "Industry Outlook," and
"Deere Segment Outlook," relating to future events, expectations,
and trends constitute "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 and involve
factors that are subject to change, assumptions, risks, and
uncertainties that could cause actual results to differ materially.
Some of these risks and uncertainties could affect all lines of the
company's operations, generally, while others could more heavily
affect a particular line of business.
Forward-looking statements are based on currently available
information and current assumptions, expectations, and projections
about future events. Except as required by law, the company
undertakes no obligation to update or revise its forward-looking
statements. 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 the company's subsequent Quarterly
Reports on Form 10-Q).
Factors Affecting All Lines of
Business
All of the company's businesses and their 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; changing interest
rates; inflation and deflation rates; changes in weather and
climate 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,
including the current military conflict between Russia and Ukraine; natural disasters; and the spread of
major epidemics or pandemics (including the COVID-19 pandemic).
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 purchase decisions, financing and repayment
practices, and the number and size of customer delinquencies and
defaults. A debt crisis in Europe,
Latin America, or elsewhere could
negatively impact currencies, global financial markets, funding
sources and costs, asset and obligation values, customers,
suppliers, and demand for equipment. The company's investment
management activities could be impaired by changes in the equity,
bond, and other financial markets, which would negatively affect
earnings.
Additional factors that could materially affect the company's
operations, access to capital, expenses, and results include
changes in, 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, governmental programs, policies, and
tariffs for the benefit of certain industries or sectors;
retaliatory actions to such changes in trade, banking, monetary,
and fiscal policies; 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, and the
effects of climate change; changes to GPS radio frequency bands or
their permitted uses; changes in labor and immigration regulations;
changes to accounting standards; changes in tax rates, estimates,
laws, and regulations and company actions related thereto; changes
to and compliance with privacy, banking, and other regulations;
changes to and compliance with economic sanctions and export
controls laws and regulations; and compliance with U.S. and foreign
laws when expanding to new markets and otherwise.
Other factors that could materially affect the company's results
and operations include security breaches, cybersecurity attacks,
technology failures, and other disruptions to the information
technology infrastructure of the company and its suppliers and
dealers; security breaches with respect to the company's products;
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,
including work stoppages or disputes by suppliers with their
unionized labor; the failure of customers, dealers, suppliers, or
the company to comply with laws, regulations, and company policy
pertaining to employment, human rights, health, safety, the
environment, sanctions, export controls, anti-corruption, privacy
and data protection, and other ethical business practices;
introduction of legislation that could affect the company's
business model and intellectual property, such as right to repair
or right to modify; 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 or business strategies; 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, including
work stoppages and other disruptions; changes in the ability to
attract, develop, engage, and retain qualified personnel;
acquisitions and divestitures of businesses;
greater-than-anticipated transaction costs; the integration of
acquired businesses; the failure or delay in closing or realizing
anticipated benefits of acquisitions, joint ventures, or
divestitures; the inability to deliver precision technology and
agricultural solutions to customers; and the failure to realize
anticipated savings or benefits of cost reduction, productivity, or
efficiency efforts.
COVID-19
Uncertainties related to the continued effects of the COVID-19
pandemic have adversely affected and may continue to affect the
company's business and outlook. These uncertainties include, among
other things: the duration and impact of any resurgence in
COVID-19; disruptions in the supply chain, including those caused
by industry capacity constraints, material availability, and global
logistics delays and constraints arising from, among other things,
the transportation capacity of ocean shipping containers, and
continued disruptions in the operations of one or more key
suppliers, or the failure of any key suppliers; an increasingly
competitive labor market due to a sustained labor shortage or
increased turnover caused by the COVID-19 pandemic; the
sustainability of the economic recovery from the pandemic remains
unclear and significant volatility could continue for a prolonged
period.
Agricultural Equipment
Operations
The company's agricultural equipment operations are subject to a
number of uncertainties, including certain factors that affect
farmers' confidence and financial condition. These factors include
demand for agricultural products; world grain stocks; soil
conditions; harvest yields; prices for commodities and livestock;
crop and livestock production expenses; availability of fertilizer;
availability of transport for crops; trade restrictions and
tariffs; global trade agreements; the level of farm product
exports; the growth and sustainability of non-food uses for some
crops (including ethanol and biodiesel production); real estate
values; available acreage for farming; changes in government farm
programs and policies; international reaction to such programs;
changes in and effects of crop insurance programs; changes in
environmental regulations and their impact on farming practices;
animal diseases and their effects on poultry, beef, and pork
consumption and prices on livestock feed demand; and crop pests and
diseases.
Production and Precision Agriculture
Operations
The production and precision agriculture operations rely in part
on hardware and software, guidance, connectivity and digital
solutions, and automation and machine intelligence. Many factors
contribute to the company's precision agriculture sales and
results, including the impact to customers' profitability and/or
sustainability outcomes; the rate of adoption and use by customers;
availability of technological innovations; speed of research and
development; effectiveness of partnerships with third parties; and
the dealer channel's ability to support and service precision
technology solutions.
Small Agriculture and Turf
Equipment
Factors affecting the company's small agriculture and turf
equipment operations include customer profitability; labor supply;
consumer borrowing patterns; consumer purchasing preferences;
housing starts and supply; infrastructure investment; spending by
municipalities and golf courses; and consumable input costs.
Construction and Forestry
Factors affecting the company's construction and forestry
equipment operations include consumer spending patterns; real
estate and housing prices; the number of housing starts; interest
rates; commodity prices such as oil and gas; the levels of public
and non-residential construction; and investment in infrastructure.
Prices for pulp, paper, lumber, and structural panels affect sales
of forestry equipment.
John Deere Financial
The liquidity and ongoing profitability of John Deere Capital
Corporation and the company's other financial services subsidiaries
depend 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.
DEERE
& COMPANY SECOND QUARTER 2022 PRESS
RELEASE
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
May 1
|
|
May 2
|
|
%
|
|
May 1
|
|
May 2
|
|
%
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
& precision ag net sales
|
|
$
|
5,117
|
|
$
|
4,529
|
|
+13
|
|
$
|
8,473
|
|
$
|
7,599
|
|
+12
|
|
Small ag
& turf net sales
|
|
|
3,570
|
|
|
3,390
|
|
+5
|
|
|
6,201
|
|
|
5,904
|
|
+5
|
|
Construction & forestry net sales
|
|
|
3,347
|
|
|
3,079
|
|
+9
|
|
|
5,891
|
|
|
5,546
|
|
+6
|
|
Financial
services revenues
|
|
|
864
|
|
|
892
|
|
-3
|
|
|
1,734
|
|
|
1,776
|
|
-2
|
|
Other
revenues
|
|
|
472
|
|
|
168
|
|
+181
|
|
|
640
|
|
|
345
|
|
+86
|
|
Total net sales and revenues
|
|
$
|
13,370
|
|
$
|
12,058
|
|
+11
|
|
$
|
22,939
|
|
$
|
21,170
|
|
+8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
& precision ag
|
|
$
|
1,057
|
|
$
|
1,007
|
|
+5
|
|
$
|
1,353
|
|
$
|
1,651
|
|
-18
|
|
Small ag
& turf
|
|
|
520
|
|
|
648
|
|
-20
|
|
|
891
|
|
|
1,117
|
|
-20
|
|
Construction & forestry
|
|
|
814
|
|
|
489
|
|
+66
|
|
|
1,085
|
|
|
756
|
|
+44
|
|
Financial
services
|
|
|
279
|
|
|
295
|
|
-5
|
|
|
577
|
|
|
553
|
|
+4
|
|
Total operating profit
|
|
|
2,670
|
|
|
2,439
|
|
+9
|
|
|
3,906
|
|
|
4,077
|
|
-4
|
|
Reconciling items
**
|
|
|
(111)
|
|
|
(119)
|
|
-7
|
|
|
(195)
|
|
|
(226)
|
|
-14
|
|
Income taxes
|
|
|
(461)
|
|
|
(530)
|
|
-13
|
|
|
(710)
|
|
|
(838)
|
|
-15
|
|
Net
income attributable to Deere & Company
|
|
$
|
2,098
|
|
$
|
1,790
|
|
+17
|
|
$
|
3,001
|
|
$
|
3,013
|
|
|
|
|
|
*
|
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, pension and
postretirement benefit costs excluding the service cost component,
and net income attributable to noncontrolling interests.
|
DEERE & COMPANY STATEMENTS OF
CONSOLIDATED INCOME
For the Three Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars and shares except per share amounts)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
12,034
|
|
$
|
10,998
|
Finance and interest
income
|
|
|
796
|
|
|
809
|
Other income
|
|
|
540
|
|
|
251
|
Total
|
|
|
13,370
|
|
|
12,058
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
8,918
|
|
|
7,928
|
Research and
development expenses
|
|
|
453
|
|
|
377
|
Selling, administrative
and general expenses
|
|
|
932
|
|
|
838
|
Interest
expense
|
|
|
187
|
|
|
268
|
Other operating
expenses
|
|
|
328
|
|
|
335
|
Total
|
|
|
10,818
|
|
|
9,746
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
2,552
|
|
|
2,312
|
Provision for income
taxes
|
|
|
461
|
|
|
530
|
|
|
|
|
|
|
|
Income of
Consolidated Group
|
|
|
2,091
|
|
|
1,782
|
Equity in income of
unconsolidated affiliates
|
|
|
6
|
|
|
8
|
|
|
|
|
|
|
|
Net
Income
|
|
|
2,097
|
|
|
1,790
|
Less: Net
loss attributable to noncontrolling interests
|
|
|
(1)
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
2,098
|
|
$
|
1,790
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
6.85
|
|
$
|
5.72
|
Diluted
|
|
$
|
6.81
|
|
$
|
5.68
|
Dividends
declared
|
|
$
|
1.05
|
|
$
|
.90
|
Dividends
paid
|
|
$
|
1.05
|
|
$
|
.76
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
306.2
|
|
|
312.8
|
Diluted
|
|
|
308.1
|
|
|
315.2
|
|
|
|
|
|
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
DEERE & COMPANY STATEMENTS OF
CONSOLIDATED INCOME
For the Six Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars and shares except per share amounts)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
20,565
|
|
$
|
19,049
|
Finance and interest
income
|
|
|
1,595
|
|
|
1,644
|
Other income
|
|
|
779
|
|
|
477
|
Total
|
|
|
22,939
|
|
|
21,170
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
15,613
|
|
|
13,734
|
Research and
development expenses
|
|
|
855
|
|
|
743
|
Selling, administrative
and general expenses
|
|
|
1,713
|
|
|
1,607
|
Interest
expense
|
|
|
417
|
|
|
538
|
Other operating
expenses
|
|
|
638
|
|
|
708
|
Total
|
|
|
19,236
|
|
|
17,330
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
3,703
|
|
|
3,840
|
Provision for income
taxes
|
|
|
710
|
|
|
838
|
|
|
|
|
|
|
|
Income of
Consolidated Group
|
|
|
2,993
|
|
|
3,002
|
Equity in income of
unconsolidated affiliates
|
|
|
8
|
|
|
12
|
|
|
|
|
|
|
|
Net
Income
|
|
|
3,001
|
|
|
3,014
|
Less: Net
income attributable to noncontrolling interests
|
|
|
|
|
|
1
|
Net Income
Attributable to Deere & Company
|
|
$
|
3,001
|
|
$
|
3,013
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
9.78
|
|
$
|
9.62
|
Diluted
|
|
$
|
9.72
|
|
$
|
9.55
|
Dividends
declared
|
|
$
|
2.10
|
|
$
|
1.66
|
Dividends
paid
|
|
$
|
2.10
|
|
$
|
1.52
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
306.8
|
|
|
313.1
|
Diluted
|
|
|
308.8
|
|
|
315.6
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
DEERE & COMPANY CONDENSED CONSOLIDATED
BALANCE SHEETS
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 1
|
|
October 31
|
|
May 2
|
|
|
2022
|
|
2021
|
|
2021
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,878
|
|
$
|
8,017
|
|
$
|
7,182
|
Marketable
securities
|
|
|
682
|
|
|
728
|
|
|
668
|
Trade accounts and
notes receivable - net
|
|
|
6,258
|
|
|
4,208
|
|
|
6,158
|
Financing receivables -
net
|
|
|
34,085
|
|
|
33,799
|
|
|
30,994
|
Financing receivables
securitized - net
|
|
|
4,073
|
|
|
4,659
|
|
|
4,107
|
Other
receivables
|
|
|
2,306
|
|
|
1,765
|
|
|
1,504
|
Equipment on operating
leases - net
|
|
|
6,465
|
|
|
6,988
|
|
|
7,108
|
Inventories
|
|
|
9,030
|
|
|
6,781
|
|
|
6,042
|
Property and equipment
- net
|
|
|
5,715
|
|
|
5,820
|
|
|
5,704
|
Goodwill
|
|
|
3,812
|
|
|
3,291
|
|
|
3,190
|
Other intangible assets
- net
|
|
|
1,352
|
|
|
1,275
|
|
|
1,310
|
Retirement
benefits
|
|
|
3,059
|
|
|
3,601
|
|
|
951
|
Deferred income
taxes
|
|
|
1,104
|
|
|
1,037
|
|
|
1,724
|
Other assets
|
|
|
2,280
|
|
|
2,145
|
|
|
2,337
|
Total
Assets
|
|
$
|
84,099
|
|
$
|
84,114
|
|
$
|
78,979
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
12,413
|
|
$
|
10,919
|
|
$
|
9,911
|
Short-term
securitization borrowings
|
|
|
4,006
|
|
|
4,605
|
|
|
4,106
|
Accounts payable and
accrued expenses
|
|
|
12,679
|
|
|
12,348
|
|
|
10,682
|
Deferred income
taxes
|
|
|
584
|
|
|
576
|
|
|
533
|
Long-term
borrowings
|
|
|
32,447
|
|
|
32,888
|
|
|
33,346
|
Retirement benefits and
other liabilities
|
|
|
2,964
|
|
|
4,344
|
|
|
5,305
|
Total
liabilities
|
|
|
65,093
|
|
|
65,680
|
|
|
63,883
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
18,904
|
|
|
18,431
|
|
|
15,092
|
Noncontrolling
interests
|
|
|
3
|
|
|
3
|
|
|
4
|
Total
stockholders' equity
|
|
|
18,907
|
|
|
18,434
|
|
|
15,096
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
84,099
|
|
$
|
84,114
|
|
$
|
78,979
|
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
DEERE & COMPANY STATEMENTS OF
CONSOLIDATED CASH FLOWS
For the Six Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
3,001
|
|
$
|
3,014
|
Adjustments to
reconcile net income to net cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
Provision
(credit) for credit losses
|
|
|
45
|
|
|
(24)
|
Provision
for depreciation and amortization
|
|
|
933
|
|
|
1,054
|
Impairment
charges
|
|
|
77
|
|
|
50
|
Share-based compensation expense
|
|
|
44
|
|
|
45
|
Gain on
remeasurement of previously held equity investment
|
|
|
(326)
|
|
|
|
Undistributed earnings of unconsolidated
affiliates
|
|
|
(2)
|
|
|
11
|
Provision
(credit) for deferred income taxes
|
|
|
37
|
|
|
(213)
|
Changes in
assets and liabilities:
|
|
|
|
|
|
|
Trade, notes, and financing receivables related to
sales
|
|
|
(1,535)
|
|
|
(1,124)
|
Inventories
|
|
|
(2,265)
|
|
|
(1,193)
|
Accounts payable and accrued expenses
|
|
|
(443)
|
|
|
318
|
Accrued income taxes payable/receivable
|
|
|
(139)
|
|
|
54
|
Retirement benefits
|
|
|
(1,020)
|
|
|
(5)
|
Other
|
|
|
(169)
|
|
|
(201)
|
Net
cash provided by (used for) operating activities
|
|
|
(1,762)
|
|
|
1,786
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
11,190
|
|
|
10,367
|
Proceeds from sales of
equipment on operating leases
|
|
|
1,035
|
|
|
1,011
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(11,971)
|
|
|
(11,359)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(473)
|
|
|
(19)
|
Purchases of property
and equipment
|
|
|
(346)
|
|
|
(320)
|
Cost of equipment on
operating leases acquired
|
|
|
(1,004)
|
|
|
(764)
|
Collateral on
derivatives – net
|
|
|
(248)
|
|
|
(255)
|
Other
|
|
|
(71)
|
|
|
(48)
|
Net
cash used for investing activities
|
|
|
(1,888)
|
|
|
(1,387)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Increase in total
short-term borrowings
|
|
|
812
|
|
|
212
|
Proceeds from long-term
borrowings
|
|
|
4,298
|
|
|
3,967
|
Payments of long-term
borrowings
|
|
|
(3,625)
|
|
|
(3,157)
|
Proceeds from issuance
of common stock
|
|
|
50
|
|
|
116
|
Repurchases of common
stock
|
|
|
(1,226)
|
|
|
(1,044)
|
Dividends
paid
|
|
|
(649)
|
|
|
(480)
|
Other
|
|
|
(46)
|
|
|
(55)
|
Net
cash used for financing activities
|
|
|
(386)
|
|
|
(441)
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents, and Restricted
Cash
|
|
|
(110)
|
|
|
151
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents, and Restricted
Cash
|
|
|
(4,146)
|
|
|
109
|
Cash, Cash
Equivalents, and Restricted Cash at Beginning of
Period
|
|
|
8,125
|
|
|
7,172
|
Cash, Cash
Equivalents, and Restricted Cash at End of Period
|
|
$
|
3,979
|
|
$
|
7,281
|
|
See Condensed Notes to
Interim Consolidated Financial Statements.
|
|
DEERE &
COMPANY
|
Condensed Notes to
Interim Consolidated Financial Statements
|
(In millions of
dollars) Unaudited
|
|
(1)
|
Acquisitions
|
|
On February 7, 2022,
the company acquired majority ownership
in Kreisel Electric
Inc., a pioneer in the development of immersion-cooled battery
technology. The total cash purchase price, net of cash acquired,
was $276 million. Most of the consideration was allocated to
Goodwill and Other intangible assets.
|
|
|
|
On February 28, 2022,
the company acquired full ownership of three Deere-Hitachi joint
venture factories and began new license and supply agreements with
Hitachi Construction Machinery. The two companies also ended their
joint venture manufacturing and marketing agreements. The total
invested capital was $690 million, which consists of net cash
consideration and the fair value of the previously held equity
investment in the joint venture. The fair value of the previous
equity investment created a non-cash gain of $326 million (pretax
and after-tax), which was recorded in Other income and included in
the construction and forestry segment's operating profit. The
invested capital was primarily allocated to Goodwill, Inventories,
and Property and equipment.
|
|
|
|
Special
Items
|
|
|
|
As a result of the
events in Russia / Ukraine, the company has suspended shipments to
Russia, which will reduce forecasted revenue for the region. The
accounting consequences during the second quarter of 2022 were
impairments of most long-lived assets, an increase in reserves of
certain financial assets, and an accrual for various contractual
uncertainties. No significant reserves were established on trade
receivables or complete goods inventory, as the company continues
to experience strong payment performance and requires prepayment of
existing inventories. However, the situation is fluid, and the
company continues to closely monitor all financial and operational
risks. As of May 1, 2022, the company's net exposure in Russia /
Ukraine was approximately $454 million. Net sales from the
company's Russian operations represented 2 percent of consolidated
annual net sales from 2017 to 2021. A summary of the reserves and
impairments recorded in the second quarter of 2022 follows in
millions of dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended May
1, 2022
|
|
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
2022
Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory reserve –
Cost of sales
|
|
$
|
6
|
|
|
|
|
$
|
2
|
|
|
|
|
$
|
8
|
|
Fixed asset impairment
– Cost of sales
|
|
|
30
|
|
|
|
|
|
11
|
|
|
|
|
|
41
|
|
Intangible asset
impairment – Cost of sales
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
28
|
|
Allowance for credit
losses – Financing receivables – SA&G expenses
|
|
|
|
|
|
|
|
|
|
|
$
|
26
|
|
|
26
|
|
Contingent liabilities
– Other operating expenses
|
|
|
10
|
|
$
|
1
|
|
|
6
|
|
|
|
|
|
17
|
|
Total Russia/Ukraine
events pretax expense
|
|
$
|
46
|
|
$
|
1
|
|
$
|
47
|
|
$
|
26
|
|
$
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax
impact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
|
Total
Russia/Ukraine events after-tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
106
|
|
|
Including the gain on
the previously held equity investment in the Deere-Hitachi joint
venture, special items increased net income for the second quarter
of 2022 by $220 million.
|
|
|
|
In the first quarter of
2022, the company had a one-time payment related to the
ratification of the UAW collective bargaining agreement, totaling
$90 million.
|
|
|
|
During the first
quarter of 2021, the fixed assets in an asphalt plant factory in
Germany were impaired by $38 million, pretax and after-tax. The
company also continued to assess its manufacturing locations,
resulting in additional long-lived asset impairments of $12 million
pretax. The impairments were the result of a decline in forecasted
financial performance that indicated it was probable future cash
flows would not cover the carrying amount of the net assets. These
impairments were offset by a favorable indirect tax ruling in
Brazil of $58 million pretax.
|
|
|
|
The following table
summarizes the operating profit impact, in millions of dollars, of
the special items recorded for the three months and six months
ended May 1, 2022 and May 2, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Six Months
|
|
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
PPA
|
|
SAT
|
|
CF
|
|
FS
|
|
Total
|
|
2022 Expense
(benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on remeasurement
of equity investment – Other income
|
|
|
|
|
|
|
|
$
|
(326)
|
|
|
|
|
$
|
(326)
|
|
|
|
|
|
|
|
$
|
(326)
|
|
|
|
|
$
|
(326)
|
|
Total Russia/Ukraine
events pretax expense
|
|
$
|
46
|
|
$
|
1
|
|
|
47
|
|
$
|
26
|
|
|
120
|
|
$
|
46
|
|
$
|
1
|
|
|
47
|
|
$
|
26
|
|
|
120
|
|
UAW ratification bonus
– Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
|
|
|
9
|
|
|
28
|
|
|
|
|
|
90
|
|
Total
expense (benefit)
|
|
$
|
46
|
|
$
|
1
|
|
$
|
(279)
|
|
$
|
26
|
|
$
|
(206)
|
|
$
|
99
|
|
$
|
10
|
|
$
|
(251)
|
|
$
|
26
|
|
$
|
(116)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Expense
(benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived asset
impairments – Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5
|
|
$
|
3
|
|
$
|
42
|
|
|
|
|
$
|
50
|
|
Brazil indirect tax –
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(53)
|
|
|
|
|
|
(5)
|
|
|
|
|
|
(58)
|
|
Total
expense (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(48)
|
|
$
|
3
|
|
$
|
37
|
|
|
|
|
$
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period over period
change
|
|
$
|
46
|
|
$
|
1
|
|
$
|
(279)
|
|
$
|
26
|
|
$
|
(206)
|
|
$
|
147
|
|
$
|
7
|
|
$
|
(288)
|
|
$
|
26
|
|
$
|
(108)
|
|
(2)
|
Prior to fiscal year
2021, the operating results of the Wirtgen Group (Wirtgen) were
incorporated into the company's consolidated financial statements
using a one-month lag period. The reporting lag was eliminated
resulting in one additional month of Wirtgen activity in both the
first quarter and year-to-date period of 2021. The effect was an
increase to Net sales of $270 million, which the company considers
immaterial to construction and forestry's annual net
sales.
|
|
|
(3)
|
The calculation of
basic net income per share is based on the average number of shares
outstanding. The calculation of diluted net income per share
recognizes any dilutive effect of share-based
compensation.
|
|
|
(4)
|
The consolidated
financial statements represent the consolidation of all of Deere
& Company's subsidiaries. The supplemental consolidating data
is presented for informational purposes. Transactions between the
Equipment Operations and Financial Services have been eliminated to
arrive at the consolidated financial statements. In the
supplemental consolidating data in Note 5 to the financial
statements, the "Equipment Operations" represents the enterprise
without "Financial Services," which include the company's
production and precision agriculture operations, small agriculture
and turf operations, and construction and forestry operations, and
other corporate assets, liabilities, revenues, and expenses not
reflected within "Financial Services."
|
DEERE &
COMPANY (5) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME
For the Three Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
12,034
|
|
$
|
10,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,034
|
|
$
|
10,998
|
|
|
Finance and interest
income
|
|
|
36
|
|
|
29
|
|
$
|
847
|
|
$
|
853
|
|
$
|
(87)
|
|
$
|
(73)
|
|
|
796
|
|
|
809
|
1
|
|
Other income
|
|
|
584
|
|
|
228
|
|
|
104
|
|
|
101
|
|
|
(148)
|
|
|
(78)
|
|
|
540
|
|
|
251
|
2
|
|
Total
|
|
|
12,654
|
|
|
11,255
|
|
|
951
|
|
|
954
|
|
|
(235)
|
|
|
(151)
|
|
|
13,370
|
|
|
12,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
8,919
|
|
|
7,929
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(1)
|
|
|
8,918
|
|
|
7,928
|
3
|
|
Research and
development expenses
|
|
|
453
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
453
|
|
|
377
|
|
|
Selling, administrative
and general expenses
|
|
|
753
|
|
|
734
|
|
|
181
|
|
|
107
|
|
|
(2)
|
|
|
(3)
|
|
|
932
|
|
|
838
|
3
|
|
Interest
expense
|
|
|
97
|
|
|
100
|
|
|
112
|
|
|
181
|
|
|
(22)
|
|
|
(13)
|
|
|
187
|
|
|
268
|
4
|
|
Interest compensation
to Financial Services
|
|
|
62
|
|
|
60
|
|
|
|
|
|
|
|
|
(62)
|
|
|
(60)
|
|
|
|
|
|
|
4
|
|
Other operating
expenses
|
|
|
99
|
|
|
40
|
|
|
377
|
|
|
369
|
|
|
(148)
|
|
|
(74)
|
|
|
328
|
|
|
335
|
5
|
|
Total
|
|
|
10,383
|
|
|
9,240
|
|
|
670
|
|
|
657
|
|
|
(235)
|
|
|
(151)
|
|
|
10,818
|
|
|
9,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
|
|
2,271
|
|
|
2,015
|
|
|
281
|
|
|
297
|
|
|
|
|
|
|
|
|
2,552
|
|
|
2,312
|
|
|
Provision for income
taxes
|
|
|
387
|
|
|
454
|
|
|
74
|
|
|
76
|
|
|
|
|
|
|
|
|
461
|
|
|
530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income
Taxes
|
|
|
1,884
|
|
|
1,561
|
|
|
207
|
|
|
221
|
|
|
|
|
|
|
|
|
2,091
|
|
|
1,782
|
|
|
Equity in income of
unconsolidated affiliates
|
|
|
5
|
|
|
7
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
6
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
1,889
|
|
|
1,568
|
|
|
208
|
|
|
222
|
|
|
|
|
|
|
|
|
2,097
|
|
|
1,790
|
|
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
1,890
|
|
$
|
1,568
|
|
$
|
208
|
|
$
|
222
|
|
|
|
|
|
|
|
$
|
2,098
|
|
$
|
1,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Elimination of
Financial Services' interest income earned from Equipment
Operations.
|
2
|
Elimination of
Equipment Operations' margin from inventory transferred to
equipment on operating leases.
|
3
|
Elimination of
intercompany service fees.
|
4
|
Elimination of
Equipment Operations' interest expense to Financial
Services.
|
5
|
Elimination of
Financial Services' lease depreciation expense related to inventory
transferred to equipment on operating leases.
|
DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF INCOME
For the Six Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
20,565
|
|
$
|
19,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,565
|
|
$
|
19,049
|
|
|
Finance and interest
income
|
|
|
70
|
|
|
62
|
|
$
|
1,675
|
|
$
|
1,716
|
|
$
|
(150)
|
|
$
|
(134)
|
|
|
1,595
|
|
|
1,644
|
1
|
|
Other income
|
|
|
801
|
|
|
447
|
|
|
192
|
|
|
172
|
|
|
(214)
|
|
|
(142)
|
|
|
779
|
|
|
477
|
2
|
|
Total
|
|
|
21,436
|
|
|
19,558
|
|
|
1,867
|
|
|
1,888
|
|
|
(364)
|
|
|
(276)
|
|
|
22,939
|
|
|
21,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
15,614
|
|
|
13,735
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(1)
|
|
|
15,613
|
|
|
13,734
|
3
|
|
Research and
development expenses
|
|
|
855
|
|
|
743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
855
|
|
|
743
|
|
|
Selling, administrative
and general expenses
|
|
|
1,410
|
|
|
1,387
|
|
|
307
|
|
|
224
|
|
|
(4)
|
|
|
(4)
|
|
|
1,713
|
|
|
1,607
|
3
|
|
Interest
expense
|
|
|
188
|
|
|
195
|
|
|
270
|
|
|
369
|
|
|
(41)
|
|
|
(26)
|
|
|
417
|
|
|
538
|
4
|
|
Interest compensation
to Financial Services
|
|
|
106
|
|
|
108
|
|
|
|
|
|
|
|
|
(106)
|
|
|
(108)
|
|
|
|
|
|
|
4
|
|
Other operating
expenses
|
|
|
138
|
|
|
107
|
|
|
712
|
|
|
738
|
|
|
(212)
|
|
|
(137)
|
|
|
638
|
|
|
708
|
5
|
|
Total
|
|
|
18,311
|
|
|
16,275
|
|
|
1,289
|
|
|
1,331
|
|
|
(364)
|
|
|
(276)
|
|
|
19,236
|
|
|
17,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
|
|
3,125
|
|
|
3,283
|
|
|
578
|
|
|
557
|
|
|
|
|
|
|
|
|
3,703
|
|
|
3,840
|
|
|
Provision for income
taxes
|
|
|
568
|
|
|
706
|
|
|
142
|
|
|
132
|
|
|
|
|
|
|
|
|
710
|
|
|
838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after Income
Taxes
|
|
|
2,557
|
|
|
2,577
|
|
|
436
|
|
|
425
|
|
|
|
|
|
|
|
|
2,993
|
|
|
3,002
|
|
|
Equity in income of
unconsolidated affiliates
|
|
|
5
|
|
|
10
|
|
|
3
|
|
|
2
|
|
|
|
|
|
|
|
|
8
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
2,562
|
|
|
2,587
|
|
|
439
|
|
|
427
|
|
|
|
|
|
|
|
|
3,001
|
|
|
3,014
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
2,562
|
|
$
|
2,586
|
|
$
|
439
|
|
$
|
427
|
|
|
|
|
|
|
|
$
|
3,001
|
|
$
|
3,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Elimination of
Financial Services' interest income earned from Equipment
Operations.
|
2
|
Elimination of
Equipment Operations' margin from inventory transferred to
equipment on operating leases.
|
3
|
Elimination of
intercompany service fees.
|
4
|
Elimination of
Equipment Operations' interest expense to Financial
Services.
|
5
|
Elimination of
Financial Services' lease depreciation expense related to inventory
transferred to equipment on operating leases.
|
DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING
DATA (Continued)
CONDENSED BALANCE SHEETS
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
May 1
|
|
Oct 31
|
|
May 2
|
|
May 1
|
|
Oct 31
|
|
May 2
|
|
May 1
|
|
Oct 31
|
|
May 2
|
|
May 1
|
|
Oct 31
|
|
May 2
|
|
|
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
2022
|
|
2021
|
|
2021
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,167
|
|
$
|
7,188
|
|
$
|
6,282
|
|
$
|
711
|
|
$
|
829
|
|
$
|
900
|
|
|
|
|
|
|
|
|
|
|
$
|
3,878
|
|
$
|
8,017
|
|
$
|
7,182
|
|
|
Marketable
securities
|
|
|
2
|
|
|
3
|
|
|
5
|
|
|
680
|
|
|
725
|
|
|
663
|
|
|
|
|
|
|
|
|
|
|
|
682
|
|
|
728
|
|
|
668
|
|
|
Receivables from
Financial Services
|
|
|
5,669
|
|
|
5,564
|
|
|
5,955
|
|
|
|
|
|
|
|
|
|
|
$
|
(5,669)
|
|
$
|
(5,564)
|
|
$
|
(5,955)
|
|
|
|
|
|
|
|
|
|
6
|
|
Trade accounts and
notes receivable - net
|
|
|
1,358
|
|
|
1,155
|
|
|
1,225
|
|
|
6,079
|
|
|
3,895
|
|
|
6,222
|
|
|
(1,179)
|
|
|
(842)
|
|
|
(1,289)
|
|
|
6,258
|
|
|
4,208
|
|
|
6,158
|
7
|
|
Financing receivables -
net
|
|
|
49
|
|
|
73
|
|
|
99
|
|
|
34,036
|
|
|
33,726
|
|
|
30,895
|
|
|
|
|
|
|
|
|
|
|
|
34,085
|
|
|
33,799
|
|
|
30,994
|
|
|
Financing receivables
securitized - net
|
|
|
6
|
|
|
10
|
|
|
15
|
|
|
4,067
|
|
|
4,649
|
|
|
4,092
|
|
|
|
|
|
|
|
|
|
|
|
4,073
|
|
|
4,659
|
|
|
4,107
|
|
|
Other
receivables
|
|
|
1,944
|
|
|
1,629
|
|
|
1,369
|
|
|
405
|
|
|
159
|
|
|
162
|
|
|
(43)
|
|
|
(23)
|
|
|
(27)
|
|
|
2,306
|
|
|
1,765
|
|
|
1,504
|
7
|
|
Equipment on operating
leases - net
|
|
|
|
|
|
|
|
|
|
|
|
6,465
|
|
|
6,988
|
|
|
7,108
|
|
|
|
|
|
|
|
|
|
|
|
6,465
|
|
|
6,988
|
|
|
7,108
|
|
|
Inventories
|
|
|
9,030
|
|
|
6,781
|
|
|
6,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,030
|
|
|
6,781
|
|
|
6,042
|
|
|
Property and equipment
- net
|
|
|
5,678
|
|
|
5,783
|
|
|
5,667
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
5,715
|
|
|
5,820
|
|
|
5,704
|
|
|
Goodwill
|
|
|
3,812
|
|
|
3,291
|
|
|
3,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,812
|
|
|
3,291
|
|
|
3,190
|
|
|
Other intangible assets
- net
|
|
|
1,352
|
|
|
1,275
|
|
|
1,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,352
|
|
|
1,275
|
|
|
1,310
|
|
|
Retirement
benefits
|
|
|
2,996
|
|
|
3,539
|
|
|
947
|
|
|
65
|
|
|
64
|
|
|
61
|
|
|
(2)
|
|
|
(2)
|
|
|
(57)
|
|
|
3,059
|
|
|
3,601
|
|
|
951
|
8
|
|
Deferred income
taxes
|
|
|
1,247
|
|
|
1,215
|
|
|
1,926
|
|
|
49
|
|
|
53
|
|
|
53
|
|
|
(192)
|
|
|
(231)
|
|
|
(255)
|
|
|
1,104
|
|
|
1,037
|
|
|
1,724
|
9
|
|
Other assets
|
|
|
1,767
|
|
|
1,646
|
|
|
1,683
|
|
|
516
|
|
|
499
|
|
|
656
|
|
|
(3)
|
|
|
|
|
|
(2)
|
|
|
2,280
|
|
|
2,145
|
|
|
2,337
|
|
|
Total
Assets
|
|
$
|
38,077
|
|
$
|
39,152
|
|
$
|
35,715
|
|
$
|
53,110
|
|
$
|
51,624
|
|
$
|
50,849
|
|
$
|
(7,088)
|
|
$
|
(6,662)
|
|
$
|
(7,585)
|
|
$
|
84,099
|
|
$
|
84,114
|
|
$
|
78,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
1,554
|
|
$
|
1,509
|
|
$
|
352
|
|
$
|
10,859
|
|
$
|
9,410
|
|
$
|
9,559
|
|
|
|
|
|
|
|
|
|
|
$
|
12,413
|
|
$
|
10,919
|
|
$
|
9,911
|
|
|
Short-term
securitization borrowings
|
|
|
5
|
|
|
10
|
|
|
14
|
|
|
4,001
|
|
|
4,595
|
|
|
4,092
|
|
|
|
|
|
|
|
|
|
|
|
4,006
|
|
|
4,605
|
|
|
4,106
|
|
|
Payables to Equipment
Operations
|
|
|
|
|
|
|
|
|
|
|
|
5,669
|
|
|
5,564
|
|
|
5,955
|
|
$
|
(5,669)
|
|
$
|
(5,564)
|
|
$
|
(5,955)
|
|
|
|
|
|
|
|
|
|
6
|
|
Accounts payable and
accrued expenses
|
|
|
11,370
|
|
|
11,198
|
|
|
10,074
|
|
|
2,534
|
|
|
2,015
|
|
|
1,926
|
|
|
(1,225)
|
|
|
(865)
|
|
|
(1,318)
|
|
|
12,679
|
|
|
12,348
|
|
|
10,682
|
7
|
|
Deferred income
taxes
|
|
|
454
|
|
|
438
|
|
|
390
|
|
|
322
|
|
|
369
|
|
|
398
|
|
|
(192)
|
|
|
(231)
|
|
|
(255)
|
|
|
584
|
|
|
576
|
|
|
533
|
9
|
|
Long-term
borrowings
|
|
|
8,556
|
|
|
8,915
|
|
|
10,124
|
|
|
23,891
|
|
|
23,973
|
|
|
23,222
|
|
|
|
|
|
|
|
|
|
|
|
32,447
|
|
|
32,888
|
|
|
33,346
|
|
|
Retirement benefits and
other liabilities
|
|
|
2,855
|
|
|
4,239
|
|
|
5,253
|
|
|
111
|
|
|
107
|
|
|
109
|
|
|
(2)
|
|
|
(2)
|
|
|
(57)
|
|
|
2,964
|
|
|
4,344
|
|
|
5,305
|
8
|
|
Total
liabilities
|
|
|
24,794
|
|
|
26,309
|
|
|
26,207
|
|
|
47,387
|
|
|
46,033
|
|
|
45,261
|
|
|
(7,088)
|
|
|
(6,662)
|
|
|
(7,585)
|
|
|
65,093
|
|
|
65,680
|
|
|
63,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
18,904
|
|
|
18,431
|
|
|
15,092
|
|
|
5,723
|
|
|
5,591
|
|
|
5,588
|
|
|
(5,723)
|
|
|
(5,591)
|
|
|
(5,588)
|
|
|
18,904
|
|
|
18,431
|
|
|
15,092
|
10
|
|
Noncontrolling
interests
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
Financial Services
equity
|
|
|
(5,723)
|
|
|
(5,591)
|
|
|
(5,588)
|
|
|
|
|
|
|
|
|
|
|
|
5,723
|
|
|
5,591
|
|
|
5,588
|
|
|
|
|
|
|
|
|
|
10
|
|
Adjusted
total stockholders' equity
|
|
|
13,184
|
|
|
12,843
|
|
|
9,508
|
|
|
5,723
|
|
|
5,591
|
|
|
5,588
|
|
|
|
|
|
|
|
|
|
|
|
18,907
|
|
|
18,434
|
|
|
15,096
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
38,077
|
|
$
|
39,152
|
|
$
|
35,715
|
|
$
|
53,110
|
|
$
|
51,624
|
|
$
|
50,849
|
|
$
|
(7,088)
|
|
$
|
(6,662)
|
|
$
|
(7,585)
|
|
$
|
84,099
|
|
$
|
84,114
|
|
$
|
78,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
Elimination of
receivables / payables between Equipment Operations and Financial
Services.
|
7
|
Primarily
reclassification of sales incentive accruals on receivables sold to
Financial Services.
|
8
|
Reclassification of net
pension assets / liabilities.
|
9
|
Reclassification of
deferred tax assets / liabilities in the same taxing
jurisdictions.
|
DEERE & COMPANY SUPPLEMENTAL CONSOLIDATING
DATA (Continued)
STATEMENTS OF CASH FLOWS
For the Six Months Ended May 1, 2022 and May
2, 2021
(In millions of dollars) Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT
|
|
FINANCIAL
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2,562
|
|
$
|
2,587
|
|
$
|
439
|
|
$
|
427
|
|
|
|
|
|
|
|
$
|
3,001
|
|
$
|
3,014
|
|
|
Adjustments to
reconcile net income to net cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
(credit) for credit losses
|
|
|
1
|
|
|
2
|
|
|
44
|
|
|
(26)
|
|
|
|
|
|
|
|
|
45
|
|
|
(24)
|
|
|
Provision
for depreciation and amortization
|
|
|
518
|
|
|
543
|
|
|
530
|
|
|
581
|
|
$
|
(115)
|
|
$
|
(70)
|
|
|
933
|
|
|
1,054
|
11
|
|
Impairment
charges
|
|
|
77
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77
|
|
|
50
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44
|
|
|
45
|
|
|
44
|
|
|
45
|
12
|
|
Gain on
remeasurement of previously held equity investment
|
|
|
(326)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(326)
|
|
|
|
|
|
Undistributed earnings of unconsolidated
affiliates
|
|
|
233
|
|
|
158
|
|
|
(3)
|
|
|
(2)
|
|
|
(232)
|
|
|
(145)
|
|
|
(2)
|
|
|
11
|
13
|
|
Provision
(credit) for deferred income taxes
|
|
|
75
|
|
|
(170)
|
|
|
(38)
|
|
|
(43)
|
|
|
|
|
|
|
|
|
37
|
|
|
(213)
|
|
|
Changes in
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade, notes, and financing receivables related to
sales
|
|
|
(215)
|
|
|
(170)
|
|
|
|
|
|
|
|
|
(1,320)
|
|
|
(954)
|
|
|
(1,535)
|
|
|
(1,124)
|
14, 16,
17
|
|
Inventories
|
|
|
(2,201)
|
|
|
(926)
|
|
|
|
|
|
|
|
|
(64)
|
|
|
(267)
|
|
|
(2,265)
|
|
|
(1,193)
|
15
|
|
Accounts payable and accrued expenses
|
|
|
(99)
|
|
|
527
|
|
|
(7)
|
|
|
(1)
|
|
|
(337)
|
|
|
(208)
|
|
|
(443)
|
|
|
318
|
16
|
|
Accrued income taxes payable/receivable
|
|
|
(144)
|
|
|
77
|
|
|
5
|
|
|
(23)
|
|
|
|
|
|
|
|
|
(139)
|
|
|
54
|
|
|
Retirement benefits
|
|
|
(1,024)
|
|
|
(8)
|
|
|
4
|
|
|
3
|
|
|
|
|
|
|
|
|
(1,020)
|
|
|
(5)
|
|
|
Other
|
|
|
(103)
|
|
|
(163)
|
|
|
(114)
|
|
|
32
|
|
|
48
|
|
|
(70)
|
|
|
(169)
|
|
|
(201)
|
11, 12,
15
|
|
Net
cash provided by (used for) operating activities
|
|
|
(646)
|
|
|
2,507
|
|
|
860
|
|
|
948
|
|
|
(1,976)
|
|
|
(1,669)
|
|
|
(1,762)
|
|
|
1,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related
to sales)
|
|
|
|
|
|
|
|
|
12,004
|
|
|
11,187
|
|
|
(814)
|
|
|
(820)
|
|
|
11,190
|
|
|
10,367
|
14
|
|
Proceeds from sales of
equipment on operating leases
|
|
|
|
|
|
|
|
|
1,035
|
|
|
1,011
|
|
|
|
|
|
|
|
|
1,035
|
|
|
1,011
|
|
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
|
|
|
|
|
|
(12,260)
|
|
|
(12,080)
|
|
|
289
|
|
|
721
|
|
|
(11,971)
|
|
|
(11,359)
|
14
|
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(473)
|
|
|
(19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(473)
|
|
|
(19)
|
|
|
Purchases of property
and equipment
|
|
|
(345)
|
|
|
(319)
|
|
|
(1)
|
|
|
(1)
|
|
|
|
|
|
|
|
|
(346)
|
|
|
(320)
|
|
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(1,090)
|
|
|
(1,125)
|
|
|
86
|
|
|
361
|
|
|
(1,004)
|
|
|
(764)
|
15
|
|
Increase in trade and
wholesale receivables
|
|
|
|
|
|
|
|
|
(2,159)
|
|
|
(1,246)
|
|
|
2,159
|
|
|
1,246
|
|
|
|
|
|
|
14
|
|
Collateral on
derivatives – net
|
|
|
6
|
|
|
(1)
|
|
|
(254)
|
|
|
(254)
|
|
|
|
|
|
|
|
|
(248)
|
|
|
(255)
|
|
|
Other
|
|
|
(46)
|
|
|
(36)
|
|
|
(49)
|
|
|
(36)
|
|
|
24
|
|
|
24
|
|
|
(71)
|
|
|
(48)
|
13,
17
|
|
Net
cash used for investing activities
|
|
|
(858)
|
|
|
(375)
|
|
|
(2,774)
|
|
|
(2,544)
|
|
|
1,744
|
|
|
1,532
|
|
|
(1,888)
|
|
|
(1,387)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in
total short-term borrowings
|
|
|
128
|
|
|
(84)
|
|
|
684
|
|
|
296
|
|
|
|
|
|
|
|
|
812
|
|
|
212
|
|
|
Change in intercompany
receivables/payables
|
|
|
(424)
|
|
|
(562)
|
|
|
424
|
|
|
562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term
borrowings
|
|
|
55
|
|
|
|
|
|
4,243
|
|
|
3,967
|
|
|
|
|
|
|
|
|
4,298
|
|
|
3,967
|
|
|
Payments of long-term
borrowings
|
|
|
(308)
|
|
|
(30)
|
|
|
(3,317)
|
|
|
(3,127)
|
|
|
|
|
|
|
|
|
(3,625)
|
|
|
(3,157)
|
|
|
Proceeds from issuance
of common stock
|
|
|
50
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
116
|
|
|
Repurchases of common
stock
|
|
|
(1,226)
|
|
|
(1,044)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,226)
|
|
|
(1,044)
|
|
|
Dividends
paid
|
|
|
(649)
|
|
|
(480)
|
|
|
(232)
|
|
|
(145)
|
|
|
232
|
|
|
145
|
|
|
(649)
|
|
|
(480)
|
13
|
|
Other
|
|
|
(27)
|
|
|
(34)
|
|
|
(19)
|
|
|
(13)
|
|
|
|
|
|
(8)
|
|
|
(46)
|
|
|
(55)
|
13
|
|
Net
cash provided by (used for) financing activities
|
|
|
(2,401)
|
|
|
(2,118)
|
|
|
1,783
|
|
|
1,540
|
|
|
232
|
|
|
137
|
|
|
(386)
|
|
|
(441)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents, and Restricted
Cash
|
|
|
(113)
|
|
|
124
|
|
|
3
|
|
|
27
|
|
|
|
|
|
|
|
|
(110)
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents, and
Restricted Cash
|
|
|
(4,018)
|
|
|
138
|
|
|
(128)
|
|
|
(29)
|
|
|
|
|
|
|
|
|
(4,146)
|
|
|
109
|
|
|
Cash, Cash
Equivalents, and Restricted Cash at
Beginning of Period
|
|
|
7,200
|
|
|
6,156
|
|
|
925
|
|
|
1,016
|
|
|
|
|
|
|
|
|
8,125
|
|
|
7,172
|
|
|
Cash, Cash
Equivalents, and Restricted Cash at
End of Period
|
|
$
|
3,182
|
|
$
|
6,294
|
|
$
|
797
|
|
$
|
987
|
|
|
|
|
|
|
|
$
|
3,979
|
|
$
|
7,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
Elimination of
depreciation on leases related to inventory transferred to
equipment on operating leases.
|
12
|
Reclassification of
share-based compensation expense.
|
13
|
Elimination of
dividends from Financial Services to the Equipment Operations,
which are included in the Equipment Operations net cash provided by
operating activities, and capital investments in Financial Services
from the Equipment Operations.
|
14
|
Primarily
reclassification of receivables related to the sale of
equipment.
|
15
|
Reclassification of
direct lease agreements with retail customers.
|
16
|
Reclassification of
sales incentive accruals on receivables sold to Financial
Services.
|
17
|
Elimination and
reclassification of the effects of Financial Services partial
financing of the construction and forestry retail locations sales
and subsequent collection of those amounts.
|
DEERE & COMPANY
OTHER FINANCIAL INFORMATION
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 13 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
Production
&
|
Small Ag
|
Construction
|
For the Six Months
Ended
|
|
Operations
|
Precision Ag
|
& Turf
|
&
Forestry
|
|
|
May 1
|
May 2
|
May 1
|
May 2
|
May 1
|
May 2
|
May 1
|
May 2
|
Dollars in millions
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Net Sales
|
|
$
|
20,565
|
|
$
|
19,049
|
|
$
|
8,473
|
|
$
|
7,599
|
|
$
|
6,201
|
|
$
|
5,904
|
|
$
|
5,891
|
|
$
|
5,546
|
|
Average Identifiable
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
18,846
|
|
$
|
16,292
|
|
$
|
7,933
|
|
$
|
6,375
|
|
$
|
4,296
|
|
$
|
3,513
|
|
$
|
6,617
|
|
$
|
6,404
|
|
With Inventories at
Standard Cost
|
|
|
20,449
|
|
|
17,681
|
|
|
8,736
|
|
|
7,065
|
|
|
4,758
|
|
|
3,947
|
|
|
6,955
|
|
|
6,669
|
|
Operating
Profit
|
|
$
|
3,329
|
|
$
|
3,524
|
|
$
|
1,353
|
|
$
|
1,651
|
|
$
|
891
|
|
$
|
1,117
|
|
$
|
1,085
|
|
$
|
756
|
|
Percent of Net
Sales
|
|
|
16.2
|
%
|
|
18.5
|
%
|
|
16.0
|
%
|
|
21.7
|
%
|
|
14.4
|
%
|
|
18.9
|
%
|
|
18.4
|
%
|
|
13.6
|
%
|
Operating Return on
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
|
17.7
|
%
|
|
21.6
|
%
|
|
17.1
|
%
|
|
25.9
|
%
|
|
20.7
|
%
|
|
31.8
|
%
|
|
16.4
|
%
|
|
11.8
|
%
|
With Inventories at
Standard Cost
|
|
|
16.3
|
%
|
|
19.9
|
%
|
|
15.5
|
%
|
|
23.4
|
%
|
|
18.7
|
%
|
|
28.3
|
%
|
|
15.6
|
%
|
|
11.3
|
%
|
SVA Cost of
Assets
|
|
$
|
(1,227)
|
|
$
|
(1,062)
|
|
$
|
(525)
|
|
$
|
(425)
|
|
$
|
(285)
|
|
$
|
(237)
|
|
$
|
(417)
|
|
$
|
(400)
|
|
SVA
|
|
|
2,102
|
|
|
2,462
|
|
|
828
|
|
|
1,226
|
|
|
606
|
|
|
880
|
|
|
668
|
|
|
356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 1
|
May 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable
to Deere & Company
|
|
$
|
439
|
|
$
|
427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
|
5,683
|
|
|
5,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
7.7
|
%
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
577
|
|
$
|
553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
|
(377)
|
|
|
(349)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
|
200
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/deere-reports-second-quarter-net-income-of-2-098-billion-301551875.html
SOURCE Deere & Company