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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Deere and Co | NYSE:DE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
4.59 | 1.22% | 381.18 | 382.85 | 376.59 | 378.80 | 1,197,521 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM |
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report:
(Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices and zip code)
(
(Registrant’s telephone number, including area code)
___________________________________________________
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class | Trading symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition
On Thursday, May 16, 2024, Deere & Company (the “Company”) issued a press release announcing its results of operations for the second quarter of fiscal 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01Regulation FD
On Thursday, May 16, 2024, the Company made available a presentation providing a review of its second quarter of fiscal 2024 in connection with its investor earnings call. A copy of the presentation is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01Financial Statements and Exhibits
(d)Exhibits
Number | Description of Exhibit |
99.1 | Press Release and Supplemental Financial Information (Furnished herewith) |
99.2 | Second Quarter 2024 Earnings Conference Call Information (Furnished herewith) |
104 | Cover Page Interactive Data File (the cover page XBRL tags are imbedded in the Inline XBRL document) |
2
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DEERE & COMPANY | ||
By: | /s/ Edward R. Berk | |
Edward R. Berk | ||
Secretary | ||
Dated: May 16, 2024 |
3
News Release | |
| |
Contact:
Jen Hartmann
Director, Public Relations
HartmannJenniferA@JohnDeere.com
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
2Q 2024 Earnings Call 16 May 2024 Exhibit 99.2 (Furnished herewith) |
2 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Forward-Looking Statements This earnings call and accompanying materials may include forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “forecast,” “guidance,” “project,” “target,” “outlook,” “prospects,” “expect,” “estimate,” “will,” “goal,” “plan,” “anticipate,” “intend,” “predict,” “believe,” “likely,” “future,” “could,” “may,” or other similar words or phrases, including the negative variations of such words or phrases. Examples of forward-looking statements include, among others, comments and information concerning the company’s plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acceptance, acquisitions and divestitures of businesses, anticipated transaction costs, the integration of new businesses, anticipated benefits of acquisitions, and other factors that impact the company’s businesses and customers. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations and assumptions regarding the future of the company’s business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, changes in circumstances, and other factors that are difficult to predict and many of which are outside of the Company’s control causing actual results to differ materially from those projected in these forward-looking statements. Among these factors are risks related to changes in U.S. and international laws and regulations, the political and economic geographies in which we operate, international conflicts, adverse macroeconomic conditions impacting consumer practices, including demand for John Deere products, and changes in climate patterns. For a discussion of some of these risks and uncertainties see “Item 1A Risk Factors” in our most recent Annual Report on Form 10-K, as updated by our subsequent filings with the U.S. Securities and Exchange Commission. Investors should refer to and consider the information on risks and uncertainties in addition to the information presented here. All forward-looking statements made in this earnings call and accompanying materials are based only on information currently available and speaks only as of the date on which it is made. You should not place undue reliance on forward-looking statements. The Company, except as required by law, undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise. This earnings call and accompanying materials may contain non-GAAP financial measures. Non-GAAP measures should be viewed as a supplement to, and not in isolation from, or as a substitute for the Company’s GAAP measures of performance and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. 20 |
3 John Deere | 2Q 2024 Earnings Call | May 16, 2024 2Q 2024 Results ($ millions except where noted) $17,387 $15,235 2Q 2023 2Q 2024 $16,079 $13,610 2Q 2023 2Q 2024 $2,860 $2,370 2Q 2023 2Q 2024 $9.65 $8.53 2Q 2023 2Q 2024 15% Net Sales and Revenues Net Sales (Equipment Operations) Net Income (attributable to Deere & Company) Diluted EPS ($ per share) 12% 17% 12% 21 |
4 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Production and Precision Ag 2Q 2024 Results $ in millions $7,822 $6,581 2Q 2023 2Q 2024 Net Sales 16% Operating Profit Comparison $1,650 ($627) ($12) ($41) ($21) $0 $2,170 $137 $27 $17 2Q 2023 Volume/ Mix Price Currency Warranty Production Costs SA&G/ R&D Special Items Other 2Q 2024 22 |
5 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Small Ag and Turf 2Q 2024 Results $ in millions $4,145 $3,185 2Q 2023 2Q 2024 Net Sales 23% Operating Profit Comparison $571 ($307) ($12) ($10) ($14) $0 ($3) $849 $62 $6 2Q 2023 Volume/ Mix Price Currency Warranty Production Costs SA&G/ R&D Special Items Other 2Q 2024 23 |
6 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Ag and Turf Industry Outlook (in units) – FY 2024 Source: Deere & Company forecast as of 16 May 2024 U.S. and CANADA LARGE AG ~15% EUROPE AG ~15% SOUTH AMERICA AG (tractors and combines) 15-20% U.S. and CANADA SMALL AG and TURF ~10% ASIA AG Down moderately 24 |
7 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Production and Precision Ag Business Segment Outlook $ in millions Source: Deere & Company forecast as of 16 May 2024 26.1% FY 2023 FY 2024 Fcst $26,790 FY 2023 FY 2024 Fcst Net Sales Operating Margin 20-25% 20.5-21.5% 25 |
8 John Deere | 2Q 2024 Earnings Call | May 16, 2024 $13,980 FY 2023 FY 2024 Fcst Small Ag and Turf Business Segment Outlook $ in millions Source: Deere & Company forecast as of 16 May 2024 17.7% FY 2023 FY 2024 Fcst Net Sales Operating Margin 20-25% 13.5-14.5% 26 |
9 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Construction and Forestry 2Q 2024 Results $ in millions $4,112 $3,844 2Q 2023 2Q 2024 Net Sales 7% Operating Profit Comparison $668 ($114) ($15) ($46) $0 ($25) $838 $17 $9 $4 2Q 2023 Volume/ Mix Price Currency Warranty Production Costs SA&G/ R&D Special Items Other 2Q 2024 27 |
10 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Construction and Forestry Industry Outlook (in units) – FY 2024 Source: Deere & Company forecast as of 16 May 2024 U.S. and CANADA COMPACT CONSTRUCTION EQUIPMENT Flat GLOBAL FORESTRY ~10% U.S. and CANADA CONSTRUCTION EQUIPMENT Flat to down 5% GLOBAL ROADBUILDING Flat to down 5% 28 |
11 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Construction and Forestry Business Segment Outlook $ in millions Source: Deere & Company forecast as of 16 May 2024 18.2% FY 2023 FY 2024 Fcst $14,795 FY 2023 FY 2024 Fcst Net Sales Operating Margin 5-10% ~17% 29 |
12 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Financial Services Net Income – Results and Outlook $ in millions Source: Deere & Company forecast as of 16 May 2024 $28 $162 2Q 2023 2Q 2024 Quarter Results Fiscal Year Outlook $619 $770 FY 2023 FY 2024 Fcst ~ 30 |
13 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Deere & Company Outlook Effective Tax Rate* Net Income (attributable to Deere & Co.) ~$7.0B 23-25% FY 2024 FORECAST Net Operating Cash Flow* $7.0-7.25B *Equipment Operations Source: Deere & Company forecast as of 16 May 2024 Other Research and Development Expenses* Capital Expenditures* Up slightly ~$1.9B 31 |
14 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Appendix 32 |
15 John Deere | 2Q 2024 Earnings Call | May 16, 2024 April 2024 Retail Sales (Rolling 3 Months) and Dealer Inventories Retail Sales U.S. and Canada Ag Industry* Deere** 2WD Tractors (< 40 PTO hp) 10% In line with the industry 2WD Tractors (40 < 100 PTO hp) 6% Flat 2WD Tractors (100+ PTO hp) 4% More than the industry 4WD Tractors 4% More than the industry Combines 7% Single digit Deere Dealer Inventories*** U.S. and Canada Ag 2024 2023 2WD Tractors (100+ PTO hp) 31% 29% Combines 15% 23% * As reported by the Association of Equipment Manufacturers ** As reported to the Association of Equipment Manufacturers *** In units as a % of trailing 12 months retail sales, as reported to the Association of Equipment Manufacturers 33 |
16 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Retail Sales U.S. and Canada Deere* Selected Turf and Utility Equipment Single digit Construction and Forestry First-in-the-Dirt Settlements Single digit High single digit April 2024 Retail Sales (Rolling 3 Months) Retail Sales Europe Ag Deere* Tractors Double digits Combines Double digits * Based on internal sales reports 34 |
17 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Deere Use-of-Cash Priorities SHARE REPURCHASE Manage the balance sheet, including liquidity, to support a rating that provides access to low-cost and readily available short- and long-term funding mechanisms (reflects the strategic nature of our financial services operation) Fund value-creating investments in our businesses Consistently and moderately raise dividend targeting a 25-35% payout ratio of mid-cycle earnings Consider share repurchase as a means to deploy excess cash to shareholders, once above requirements are met COMMITTED TO “A” RATING FUND OPERATING & GROWTH NEEDS COMMON STOCK DIVIDEND CASH FROM OPERATIONS 35 |
18 John Deere | 2Q 2024 Earnings Call | May 16, 2024 Deere & Company’s 3Q 2024 earnings call is scheduled for 9:00 a.m. Central Time on Thursday, 15 August 2024. 36 |
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