Deere & Company

05/16/2024 | Press release | Distributed by Public on 05/16/2024 04:04

Deere Reports Second Quarter Net Income of $2.370 Billion - Form 8-K

Deere Reports Second Quarter Net Income of $2.370 Billion

● Quarterly results underscore sound execution in the face of challenging market conditions.
● Global agricultural and turf demand further softens while the construction industry remains stable.
● Full-year net income forecast updated to approximately $7.0 billion.

MOLINE, Illinois (May 16, 2024) - Deere & Company reported net income of $2.370 billion for the second quarter ended April 28, 2024, or $8.53 per share, compared with net income of $2.860 billion, or $9.65 per share, for the quarter ended April 30, 2023. For the first six months of the year, net income attributable to Deere & Company was $4.121 billion, or $14.74 per share, compared with $4.819 billion, or $16.18 per share, for the same period last year.

Worldwide net sales and revenues decreased 12 percent, to $15.235 billion, for the second quarter of 2024 and decreased 9 percent, to $27.420 billion, for six months. Net sales were $13.610 billion for the quarter and $24.097 billion for six months, compared with $16.079 billion and $27.481 billion last year.

"John Deere's second-quarter results were noteworthy in light of continued changes across the global agricultural sector," stated John C. May, chairman and chief executive officer. "Thanks to the dedication and hard work of our team, we continue to demonstrate structurally higher performance levels across business cycles and are benefitting from stability in construction end markets amid declining agricultural and turf demand."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2024 is forecasted to be approximately $7.0 billion.

"We are proactively managing our production and inventory levels to adapt to demand changes and position the business for the future," May explained. "Despite market conditions, we are committed to our strategy and are actively investing in and deploying innovative technologies, products, and solutions to ensure our customers' success."

4

Deere & Company

Second Quarter

Year to Date

$ in millions, except per share amounts

2024

2023

% Change

2024

2023

% Change

Net sales and revenues

$

15,235

$

17,387

-12%

$

27,420

$

30,038

-9%

Net income

$

2,370

$

2,860

-17%

$

4,121

$

4,819

-14%

Fully diluted EPS

$

8.53

$

9.65

$

14.74

$

16.18

Prior period results were affected by a special item. See Note 1 of the financial statements for further details.

Production & Precision Agriculture

Second Quarter

$ in millions

2024

2023

% Change

Net sales

$

6,581

$

7,822

-16%

Operating profit

$

1,650

$

2,170

-24%

Operating margin

25.1%

27.7%

Production and precision agriculture sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes and higher production costs, partially offset by price realization.

Production & Precision Agriculture Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

$ in millions

5

Small Agriculture & Turf

Second Quarter

$ in millions

2024

2023

% Change

Net sales

$

3,185

$

4,145

-23%

Operating profit

$

571

$

849

-33%

Operating margin

17.9%

20.5%

Small agriculture and turf sales decreased for the quarter as a result of lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes, partially offset by price realization.

Small Agriculture & Turf Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

$ in millions

6

Construction & Forestry

Second Quarter

$ in millions

2024

2023

% Change

Net sales

$

3,844

$

4,112

-7%

Operating profit

$

668

$

838

-20%

Operating margin

17.4%

20.4%

Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased due to lower shipment volumes and higher SA&G and R&D expenses.

Construction & Forestry Operating Profit

Second Quarter 2024 Compared to Second Quarter 2023

$ in millions

Financial Services

Second Quarter

$ in millions

2024

2023

% Change

Net income

$

162

$

28

479%

Financial services net income for the quarter increased due to income earned on higher average portfolio balances, partially offset by a higher provision for credit losses and less-favorable financing spreads. The results of the prior period were also affected by a correction of the accounting treatment for financing incentives offered to John Deere dealers. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023.

7

Industry Outlook for Fiscal 2024

Agriculture & Turf

U.S. & Canada:

Large Ag

Down ~ 15%

Small Ag & Turf

Down ~ 10%

Europe

Down ~ 15%

South America (Tractors & Combines)

Down 15 to 20%

Asia

Down moderately

Construction & Forestry

U.S. & Canada:

Construction Equipment

Flat to Down 5%

Compact Construction Equipment

Flat

Global Forestry

Down ~ 10%

Global Roadbuilding

Flat to Down 5%

Deere Segment Outlook for Fiscal 2024

Currency

Price

$ in millions

Net Sales

Translation

Realization

Production & Precision Ag

Down 20% to 25%

~ Flat

+1.5%

Small Ag & Turf

Down 20% to 25%

~ Flat

+1.5%

Construction & Forestry

Down 5% to 10%

~ Flat

+1.5%

Financial Services

Net Income

~$ 770

Financial Services. Fiscal-year 2024 net income attributable to Deere & Company for the financial services operations is forecasted to be approximately $770 million. Results are expected to be higher than fiscal year 2023 due to income earned on a higher average portfolio, partially offset by a higher provision for credit losses and less-favorable financing spreads. A correction of the accounting treatment for financing incentives offered to John Deere dealers impacted 2023 financial results. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section 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 and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

● changes in and compliance with U.S., foreign and international laws, regulations, and policies relating to trade, economic sanctions, data privacy, spending, taxing, banking, monetary, environmental (including climate change and engine emissions), and farming policies;
● political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the conflict in the Middle East;
● adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints;
● worldwide demand for food and different forms of renewable energy;

8

● the ability to execute business strategies, including the company's Smart Industrial Operating Model, Leap Ambitions, and mergers and acquisitions;
● the ability to understand and meet customers' changing expectations and demand for John Deere products and solutions;
● accurately forecasting customer demand for products and services and adequately managing inventory;
● the ability to integrate new technology, including automation and machine learning, and deliver precision technology and solutions to customers;
● changes to governmental communications channels (radio frequency technology);
● the ability to adapt in highly competitive markets;
● dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;
● changes in climate patterns, unfavorable weather events, and natural disasters;
● governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
● higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for John Deere products and solutions;
● availability and price of raw materials, components, and whole goods;
● delays or disruptions in the company's supply chain;
● our equipment fails to perform as expected, which could result in warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations;
● the ability to attract, develop, engage, and retain qualified personnel;
● security breaches, cybersecurity attacks, technology failures, and other disruptions to John Deere information technology infrastructure and products;
● loss of or challenges to intellectual property rights;
● legislation introduced or enacted that could affect the company's business model and intellectual property, such as right to repair or right to modify legislation;
● investigations, claims, lawsuits, or other legal proceedings;
● events that damage the company's reputation or brand;
● the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, available farm acres, acreage planted, soil conditions, harvest yields, prices for commodities and livestock, input costs, and availability of transport for crops; and
● housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the company and its businesses, including factors that could materially affect the financial results, is included in the company's 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 subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

9

DEERE & COMPANY

SECOND QUARTER 2024 PRESS RELEASE

(In millions of dollars) Unaudited

Three Months Ended

Six Months Ended

April 28

April 30

%

April 28

April 30

%

2024

2023

Change

2024

2023

Change

Net sales and revenues:

Production & precision ag net sales

$

6,581

$

7,822

-16

$

11,430

$

13,021

-12

Small ag & turf net sales

3,185

4,145

-23

5,610

7,146

-21

Construction & forestry net sales

3,844

4,112

-7

7,057

7,314

-4

Financial services revenues

1,395

1,107

+26

2,770

2,147

+29

Other revenues

230

201

+14

553

410

+35

Total net sales and revenues

$

15,235

$

17,387

-12

$

27,420

$

30,038

-9

Operating profit: *

Production & precision ag

$

1,650

$

2,170

-24

$

2,695

$

3,378

-20

Small ag & turf

571

849

-33

897

1,296

-31

Construction & forestry

668

838

-20

1,234

1,463

-16

Financial services

209

41

+410

466

279

+67

Total operating profit

3,098

3,898

-21

5,292

6,416

-18

Reconciling items **

23

(47)

49

(69)

Income taxes

(751)

(991)

-24

(1,220)

(1,528)

-20

Net income attributable to Deere & Company

$

2,370

$

2,860

-17

$

4,121

$

4,819

-14

* Operating profit is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit for financial services includes the effect of interest expense and foreign exchange gains or losses.

** Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, equity in income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

10

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Three and Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars and shares except per share amounts) Unaudited

Three Months Ended

Six Months Ended

2024

2023

2024

2023

Net Sales and Revenues

Net sales

$

13,610

$

16,079

$

24,097

$

27,481

Finance and interest income

1,387

1,079

2,746

2,073

Other income

238

229

577

484

Total

15,235

17,387

27,420

30,038

Costs and Expenses

Cost of sales

9,157

10,730

16,357

18,663

Research and development expenses

565

547

1,098

1,043

Selling, administrative and general expenses

1,265

1,330

2,330

2,283

Interest expense

836

569

1,638

1,049

Other operating expenses

295

363

664

660

Total

12,118

13,539

22,087

23,698

Income of Consolidated Group before Income Taxes

3,117

3,848

5,333

6,340

Provision for income taxes

751

991

1,220

1,528

Income of Consolidated Group

2,366

2,857

4,113

4,812

Equity in income of unconsolidated affiliates

2

2

3

3

Net Income

2,368

2,859

4,116

4,815

Less: Net loss attributable to noncontrolling interests

(2)

(1)

(5)

(4)

Net Income Attributable to Deere & Company

$

2,370

$

2,860

$

4,121

$

4,819

Per Share Data

Basic

$

8.56

$

9.69

$

14.80

$

16.26

Diluted

8.53

9.65

14.74

16.18

Dividends declared

1.47

1.25

2.94

2.45

Dividends paid

1.47

1.20

2.82

2.33

Average Shares Outstanding

Basic

276.8

295.1

278.4

296.3

Diluted

277.9

296.5

279.5

297.8

See Condensed Notes to Interim Consolidated Financial Statements.

11

DEERE & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars) Unaudited

April 28

October 29

April 30

2024

2023

2023

Assets

Cash and cash equivalents

$

5,553

$

7,458

$

5,267

Marketable securities

1,094

946

856

Trade accounts and notes receivable - net

8,880

7,739

9,971

Financing receivables - net

45,278

43,673

38,954

Financing receivables securitized - net

7,262

7,335

5,659

Other receivables

2,535

2,623

2,593

Equipment on operating leases - net

6,965

6,917

6,524

Inventories

8,443

8,160

9,713

Property and equipment - net

7,034

6,879

6,288

Goodwill

3,936

3,900

3,963

Other intangible assets - net

1,064

1,133

1,222

Retirement benefits

3,056

3,007

3,519

Deferred income taxes

1,936

1,814

1,308

Other assets

2,592

2,503

2,510

Total Assets

$

105,628

$

104,087

$

98,347

Liabilities and Stockholders' Equity

Liabilities

Short-term borrowings

$

17,699

$

17,939

$

17,109

Short-term securitization borrowings

6,976

6,995

5,379

Accounts payable and accrued expenses

14,609

16,130

14,716

Deferred income taxes

491

520

511

Long-term borrowings

40,962

38,477

35,611

Retirement benefits and other liabilities

2,105

2,140

2,520

Total liabilities

82,842

82,201

75,846

Redeemable noncontrolling interest

98

97

102

Stockholders' Equity

Total Deere & Company stockholders' equity

22,684

21,785

22,395

Noncontrolling interests

4

4

4

Total stockholders' equity

22,688

21,789

22,399

Total Liabilities and Stockholders' Equity

$

105,628

$

104,087

$

98,347

See Condensed Notes to Interim Consolidated Financial Statements.

12

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

2024

2023

Cash Flows from Operating Activities

Net income

$

4,116

$

4,815

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Provision (credit) for credit losses

131

(89)

Provision for depreciation and amortization

1,045

995

Other non-cash adjustments (Note 1)

​

173

Share-based compensation expense

104

54

Credit for deferred income taxes

(120)

(377)

Changes in assets and liabilities:

Receivables related to sales

(2,469)

(4,407)

Inventories

(409)

(982)

Accounts payable and accrued expenses

(1,300)

(313)

Accrued income taxes payable/receivable

(29)

(96)

Retirement benefits

(208)

(68)

Other

83

148

Net cash provided by (used for) operating activities

944

(147)

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

13,703

12,593

Proceeds from maturities and sales of marketable securities

200

98

Proceeds from sales of equipment on operating leases

1,011

993

Cost of receivables acquired (excluding receivables related to sales)

(14,091)

(13,451)

Purchases of marketable securities

(432)

(188)

Purchases of property and equipment

(719)

(584)

Cost of equipment on operating leases acquired

(1,369)

(1,229)

Collateral on derivatives - net

96

367

Other

(69)

(93)

Net cash used for investing activities

(1,670)

(1,494)

Cash Flows from Financing Activities

Net proceeds in short-term borrowings (original maturities three months or less)

58

3,992

Proceeds from borrowings issued (original maturities greater than three months)

10,189

4,868

Payments of borrowings (original maturities greater than three months)

(8,139)

(3,567)

Repurchases of common stock

(2,422)

(2,546)

Dividends paid

(796)

(697)

Other

(52)

(33)

Net cash provided by (used for) financing activities

(1,162)

2,017

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

(5)

70

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

(1,893)

446

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

7,620

4,941

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

5,727

$

5,387

See Condensed Notes to Interim Consolidated Financial Statements.

13

DEERE & COMPANY

Condensed Notes to Interim Consolidated Financial Statements

(In millions of dollars) Unaudited

(1) In the second quarter of 2023, the company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023 in "Selling, administrative and general expenses" by financial services.
(2) The consolidated financial statements represent the consolidation of all 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 3 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."

14

DEERE & COMPANY

(3) SUPPLEMENTAL CONSOLIDATING DATA

STATEMENTS OF INCOME

For the Three Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

​

Net Sales and Revenues

Net sales

$

13,610

$

16,079

$

13,610

$

16,079

Finance and interest income

129

121

$

1,496

$

1,206

$

(238)

$

(248)

1,387

1,079

1 ​

Other income

198

185

92

91

(52)

(47)

238

229

2, 3​

Total

13,937

16,385

1,588

1,297

(290)

(295)

15,235

17,387

Costs and Expenses

Cost of sales

9,164

10,737

(7)

(7)

9,157

10,730

4 ​

Research and development expenses

565

547

565

547

Selling, administrative and general expenses

1,007

935

260

397

(2)

(2)

1,265

1,330

4 ​

Interest expense

114

103

780

540

(58)

(74)

836

569

1 ​

Interest compensation to Financial Services

180

174

(180)

(174)

​

​

1 ​

Other operating expenses

1

85

337

316

(43)

(38)

295

363

3, 5​

Total

11,031

12,581

1,377

1,253

(290)

(295)

12,118

13,539

Income before Income Taxes

2,906

3,804

211

44

​

​

3,117

3,848

Provision for income taxes

700

974

51

17

​

751

991

Income after Income Taxes

2,206

2,830

160

27

​

​

2,366

2,857

Equity in income of unconsolidated affiliates

​

1

2

1

​

2

2

Net Income

2,206

2,831

162

28

​

​

2,368

2,859

Less: Net loss attributable to noncontrolling interests

(2)

(1)

​

​

(2)

(1)

Net Income Attributable to Deere & Company

$

2,208

$

2,832

$

162

$

28

​

​

$

2,370

$

2,860

1 Elimination of intercompany interest income and expense.

2 Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.

3 Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.

4 Elimination of intercompany service fees.

5 Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

15

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF INCOME

For the Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

Net Sales and Revenues

Net sales

$

24,097

$

27,481

$

24,097

$

27,481

Finance and interest income

285

234

$

2,929

$

2,274

$

(468)

$

(435)

2,746

2,073

1 ​

Other income

487

417

211

268

(121)

(201)

577

484

2, 3​

Total

24,869

28,132

3,140

2,542

(589)

(636)

27,420

30,038

Costs and Expenses

Cost of sales

16,371

18,675

(14)

(12)

16,357

18,663

4 ​

Research and development expenses

1,098

1,043

1,098

1,043

Selling, administrative and general expenses

1,882

1,719

453

569

(5)

(5)

2,330

2,283

4 ​

Interest expense

223

204

1,542

983

(127)

(138)

1,638

1,049

1 ​

Interest compensation to Financial Services

341

297

(341)

(297)

​

​

1 ​

Other operating expenses

91

137

675

707

(102)

(184)

664

660

3, 5​

Total

20,006

22,075

2,670

2,259

(589)

(636)

22,087

23,698

Income before Income Taxes

4,863

6,057

470

283

​

​

5,333

6,340

Provision for income taxes

1,117

1,455

103

73

​

1,220

1,528

Income after Income Taxes

3,746

4,602

367

210

​

​

4,113

4,812

Equity in income of unconsolidated affiliates

​

1

3

2

​

3

3

Net Income

3,746

4,603

370

212

​

​

4,116

4,815

Less: Net loss attributable to noncontrolling interests

(5)

(4)

​

(5)

(4)

Net Income Attributable to Deere & Company

$

3,751

$

4,607

$

370

$

212

​

​

$

4,121

$

4,819

1 Elimination of intercompany interest income and expense.

2 Elimination of Equipment Operations' margin from inventory transferred to equipment on operating leases.

3 Elimination of income and expense between Equipment Operations and Financial Services related to intercompany guarantees of investments in certain international markets and intercompany service revenues and expenses.

4 Elimination of intercompany service fees.

5 Elimination of Financial Services' lease depreciation expense related to inventory transferred to equipment on operating leases.

16

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

CONDENSED BALANCE SHEETS

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

Apr 28

Oct 29

Apr 30

Apr 28

Oct 29

Apr 30

Apr 28

Oct 29

Apr 30

Apr 28

Oct 29

Apr 30

2024

2023

2023

2024

2023

2023

2024

2023

2023

2024

2023

2023

Assets

Cash and cash equivalents

$

3,800

$

5,720

$

3,587

$

1,753

$

1,738

$

1,680

​

$

5,553

$

7,458

$

5,267

Marketable securities

148

104

14

946

842

842

​

1,094

946

856

Receivables from Financial Services

4,480

4,516

5,899

$

(4,480)

$

(4,516)

$

(5,899)

​

​

​

6 ​

Trade accounts and notes receivable - net

1,320

1,320

1,562

10,263

8,687

10,422

(2,703)

(2,268)

(2,013)

8,880

7,739

9,971

7 ​

Financing receivables - net

80

64

54

45,198

43,609

38,900

​

​

​

45,278

43,673

38,954

Financing receivables securitized - net

​

​

1

7,262

7,335

5,658

​

​

​

7,262

7,335

5,659

Other receivables

1,822

1,813

2,201

760

869

481

(47)

(59)

(89)

2,535

2,623

2,593

7 ​

Equipment on operating leases - net

6,965

6,917

6,524

​

​

​

6,965

6,917

6,524

Inventories

8,443

8,160

9,713

​

​

​

8,443

8,160

9,713

Property and equipment - net

6,999

6,843

6,254

35

36

34

​

​

​

7,034

6,879

6,288

Goodwill

3,936

3,900

3,963

​

​

​

3,936

3,900

3,963

Other intangible assets - net

1,064

1,133

1,222

​

​

​

1,064

1,133

1,222

Retirement benefits

2,980

2,936

3,450

77

72

69

(1)

(1)

​

3,056

3,007

3,519

8 ​

Deferred income taxes

2,210

2,133

1,355

71

68

59

(345)

(387)

(106)

1,936

1,814

1,308

9 ​

Other assets

2,105

1,948

1,961

504

559

564

(17)

(4)

(15)

2,592

2,503

2,510

Total Assets

$

39,387

$

40,590

$

41,236

$

73,834

$

70,732

$

65,233

$

(7,593)

$

(7,235)

$

(8,122)

$

105,628

$

104,087

$

98,347

Liabilities and Stockholders' Equity

Liabilities

Short-term borrowings

$

1,055

$

1,230

$

1,755

$

16,644

$

16,709

$

15,354

​

$

17,699

$

17,939

$

17,109

Short-term securitization borrowings

​

​

​

6,976

6,995

5,379

​

6,976

6,995

5,379

Payables to Equipment Operations

​

4,480

4,516

5,899

$

(4,480)

$

(4,516)

$

(5,899)

​

​

​

6 ​

Accounts payable and accrued expenses

13,771

14,862

13,759

3,605

3,599

3,074

(2,767)

(2,331)

(2,117)

14,609

16,130

14,716

7 ​

Deferred income taxes

421

452

402

415

455

215

(345)

(387)

(106)

491

520

511

9 ​

Long-term borrowings

6,575

7,210

7,310

34,387

31,267

28,301

​

​

​

40,962

38,477

35,611

Retirement benefits and other liabilities

1,995

2,032

2,410

111

109

110

(1)

(1)

​

2,105

2,140

2,520

8 ​

Total liabilities

23,817

25,786

25,636

66,618

63,650

58,332

(7,593)

(7,235)

(8,122)

82,842

82,201

75,846

Redeemable noncontrolling interest

98

97

102

​

​

​

​

​

​

98

97

102

Stockholders' Equity

Total Deere & Company stockholders' equity

22,684

21,785

22,395

7,216

7,082

6,901

(7,216)

(7,082)

(6,901)

22,684

21,785

22,395

10 ​

Noncontrolling interests

4

4

4

​

​

​

​

4

4

4

Financial Services equity

(7,216)

(7,082)

(6,901)

​

7,216

7,082

6,901

​

​

​

10 ​

Adjusted total stockholders' equity

15,472

14,707

15,498

7,216

7,082

6,901

​

​

​

22,688

21,789

22,399

Total Liabilities and Stockholders' Equity

$

39,387

$

40,590

$

41,236

$

73,834

$

70,732

$

65,233

$

(7,593)

$

(7,235)

$

(8,122)

$

105,628

$

104,087

$

98,347

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.

10 Elimination of Financial Services' equity.

17

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF CASH FLOWS

For the Six Months Ended April 28, 2024 and April 30, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

Cash Flows from Operating Activities

Net income

$

3,746

$

4,603

$

370

$

212

​

​

$

4,116

$

4,815

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

​

Provision (credit) for credit losses

10

4

121

(93)

​

​

131

(89)

Provision for depreciation and amortization

608

565

509

500

$

(72)

$

(70)

1,045

995

11 ​

Other non-cash adjustments (Note 1)

​

​

​

173

​

​

​

173

Share-based compensation expense

104

54

104

54

12 ​

Distributed earnings of Financial Services

247

12

​

​

(247)

(12)

​

​

13 ​

Credit for deferred income taxes

(74)

(304)

(46)

(73)

​

​

(120)

(377)

Changes in assets and liabilities:

​

Receivables related to sales

(58)

(255)

​

​

(2,411)

(4,152)

(2,469)

(4,407)

14, 16​

Inventories

(300)

(910)

​

​

(109)

(72)

(409)

(982)

15 ​

Accounts payable and accrued expenses

(1,012)

161

147

243

(435)

(717)

(1,300)

(313)

16 ​

Accrued income taxes payable/receivable

(20)

(97)

(9)

1

​

​

(29)

(96)

Retirement benefits

(205)

(67)

(3)

(1)

​

​

(208)

(68)

Other

89

54

65

103

(71)

(9)

83

148

11, 12, 15​

Net cash provided by (used for) operating activities

3,031

3,766

1,154

1,065

(3,241)

(4,978)

944

(147)

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

​

​

14,175

13,169

(472)

(576)

13,703

12,593

14 ​

Proceeds from maturities and sales of marketable securities

58

62

142

36

200

98

Proceeds from sales of equipment on operating leases

​

​

1,011

993

​

​

1,011

993

Cost of receivables acquired (excluding receivables related to sales)

​

​

(14,238)

(13,584)

147

133

(14,091)

(13,451)

14 ​

Purchases of marketable securities

(226)

(21)

(206)

(167)

(432)

(188)

Purchases of property and equipment

(718)

(583)

(1)

(1)

​

​

(719)

(584)

Cost of equipment on operating leases acquired

​

​

(1,516)

(1,327)

147

98

(1,369)

(1,229)

15 ​

Decrease (increase) in investment in Financial Services

10

(799)

​

​

(10)

799

​

​

17 ​

Increase in trade and wholesale receivables

​

​

(3,171)

(5,310)

3,171

5,310

​

​

14 ​

Collateral on derivatives - net

​

​

96

367

​

​

96

367

Other

(68)

(119)

(2)

25

1

1

(69)

(93)

Net cash used for investing activities

(944)

(1,460)

(3,710)

(5,799)

2,984

5,765

(1,670)

(1,494)

Cash Flows from Financing Activities

Net proceeds (payments) in short-term borrowings (original maturities three months or less)

189

(225)

(131)

4,217

​

​

58

3,992

Change in intercompany receivables/payables

31

932

(31)

(932)

​

​

​

​

Proceeds from borrowings issued (original maturities greater than three months)

34

41

10,155

4,827

​

​

10,189

4,868

Payments of borrowings (original maturities greater than three months)

(1,012)

(47)

(7,127)

(3,520)

​

​

(8,139)

(3,567)

Repurchases of common stock

(2,422)

(2,546)

​

​

​

​

(2,422)

(2,546)

Capital Investment from Equipment Operations

​

​

(10)

799

10

(799)

​

​

17 ​

Dividends paid

(796)

(697)

(247)

(12)

247

12

(796)

(697)

13 ​

Other

(27)

(5)

(25)

(28)

​

​

(52)

(33)

Net cash provided by (used for) financing activities

(4,003)

(2,547)

2,584

5,351

257

(787)

(1,162)

2,017

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

​

62

(5)

8

​

​

(5)

70

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

(1,916)

(179)

23

625

​

​

(1,893)

446

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

5,755

3,781

1,865

1,160

​

​

7,620

4,941

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

3,839

$

3,602

$

1,888

$

1,785

​

​

$

5,727

$

5,387

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 operating activities.

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 of change in investment from Equipment Operations to Financial Services.

18