MOLINE, Ill., Nov. 25, 2020
/CNW/ --
- Fourth-quarter net income rises 5% aided by strong execution
and disciplined cost management.
- Improving fundamentals in agricultural sector setting stage for
stronger demand in year ahead.
- Earnings for 2021 forecast to be $3.6 to $4.0
billion.
Deere & Company (NYSE: DE) reported net income of
$757 million for the fourth quarter
ended November 1, 2020, or
$2.39 per share, compared with net
income of $722 million, or
$2.27 per share, for the quarter
ended November 3, 2019. For fiscal 2020, net income
attributable to Deere & Company was $2.751 billion, or $8.69 per share, compared with $3.253 billion, or $10.15 per share, in 2019.
Worldwide net sales and revenues decreased 2 percent, to
$9.731 billion, for the fourth
quarter of 2020 and declined 9 percent, to $35.540 billion, for the full year. Equipment
operations net sales were $8.659
billion for the quarter and $31.272
billion for the year, compared with corresponding
totals of $8.703 billion and
$34.886 billion in 2019.
"John Deere delivered another quarter of strong performance and
a solid year despite the challenges associated with managing the
pandemic," said John C. May,
chairman and chief executive officer. "In this regard, I would like
to pay tribute to the thousands of John Deere employees, dealers
and suppliers throughout the world who have helped us safely
maintain our operations and serve customers. Because of their
contributions, Deere was able to complete a successful year and is
positioned to continue providing differentiated solutions and
unlocking even greater value for customers."
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal
2021 is forecast to be in a range of $3.6
billion to $4.0 billion.
In the year ahead, Deere expects to benefit from improving
conditions in the farm economy and stabilization in construction
and forestry markets, according to May. "Higher crop prices and
improved fundamentals are leading to renewed optimism in the
agricultural sector and improving demand for farm equipment," he
said. "At the same time, we are looking forward to realizing the
benefits of our smart industrial operating strategy, which is
designed to accelerate the delivery of solutions that will drive
improved profitability and sustainability in our customers'
operations."
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Deere &
Company
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Fourth
Quarter
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Full Year
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$ in
millions
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2020
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2019
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% Change
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2020
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2019
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% Change
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Net sales and
revenues
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$
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9,731
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$
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9,896
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-2%
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$
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35,540
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$
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39,258
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-9%
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Net income
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$
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757
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$
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722
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5%
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$
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2,751
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$
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3,253
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-15%
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Fully diluted
EPS
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$
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2.39
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$
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2.27
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$
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8.69
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$
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10.15
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Net income in the fourth quarter and full-year 2020 was
negatively affected by impairment charges and employee-separation
costs of $211 million and
$458 million after-tax, respectively.
For the same periods in 2019, the similar charges were $74 million and $82
million. In addition, net income was unfavorably affected by
discrete adjustments to the provision for income taxes in both
periods of 2020 and favorably impacted in both periods of 2019.
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Equipment
Operations
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Fourth
Quarter
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$ in
millions
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2020
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2019
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% Change
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Net sales
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$
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8,659
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$
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8,703
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-1%
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Operating
profit
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$
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1,056
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$
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788
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34%
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Net
income*
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$
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571
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$
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632
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-10%
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* Includes equity in
income (loss) of unconsolidated affiliates.
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For a discussion of net sales and operating profit results, see
the Agriculture & Turf and Construction & Forestry sections
below.
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Agriculture &
Turf
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Fourth
Quarter
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$ in
millions
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2020
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2019
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% Change
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Net sales
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$
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6,198
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$
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5,756
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8%
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Operating
profit
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$
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860
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$
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527
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63%
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Operating
margin
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13.9%
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9.2%
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Agriculture & Turf sales increased for the quarter due to
price realization and higher shipment volumes, partially offset by
the unfavorable effects of currency translation. Operating profit
rose primarily due to price realization, lower research and
development expenses, reduced selling, administrative, and general
expenses, improved shipment volumes / mix, and lower warranty
expenses. These items were partially offset by employee-separation
expenses and impairments.
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Construction &
Forestry
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Fourth
Quarter
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$ in
millions
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2020
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2019
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% Change
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Net sales
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$
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2,461
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$
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2,947
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-16%
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Operating
profit
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$
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196
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$
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261
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-25%
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Operating
margin
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8.0%
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8.9%
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Construction & Forestry sales moved lower for the quarter
primarily due to lower shipment volumes, partially offset by price
realization. Operating profit declined mainly due to lower sales
volume / mix, impairments, and employee-separation expenses. The
decrease in profit was partially offset by price realization, lower
research and development expenses, reduced selling, administrative,
and general expenses, lower warranty expenses, and improved
production costs.
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Financial
Services
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Fourth
Quarter
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$ in
millions
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2020
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2019
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% Change
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Net income
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$
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186
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$
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90
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107%
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The increase in financial services net income for the quarter
was mainly due to lower impairments and reduced losses on
operating-lease residual values and favorable financing spreads,
partially offset by a higher provision for credit losses, and
employee-separation expenses.
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Market Conditions
and Outlook (Annual)
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Currency
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Price
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$ in
millions
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Net Sales
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Translation
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Realization
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Agriculture &
Turf
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10% to 15%
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1%
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3%
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Construction &
Forestry
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5% to 10%
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1%
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1%
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John Deere
Financial
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Net Income
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$630
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Market Conditions & Outlook
Agriculture & Turf. Deere's worldwide sales of
agriculture and turf equipment are forecast to increase by
10 to 15 percent for fiscal-year 2021, including a positive
currency-translation effect of 1 percent. Industry sales of
agricultural equipment in the U.S. and Canada are forecast to rise 5 to
10 percent driven by gains in larger models. Full-year
industry sales in the EU28 member nations are forecast to be flat
to up 5%. In South America,
industry sales of tractors and combines are forecast to be up about
5 percent while Asian sales are expected to be slightly lower.
Industry sales of turf and utility equipment in the U.S. and
Canada are forecast to be flat to
up 5 percent.
Construction & Forestry. Deere's worldwide sales
of construction and forestry equipment are anticipated to be up 5
to 10 percent for 2021 with foreign-currency rates having a
favorable translation effect of 1 percent. The outlook
reflects some degree of recovery from the pandemic in construction
equipment, continued strength in compact construction due to
residential building activity, and expected growth in the
roadbuilding sector. On an industry basis, North American
construction equipment sales are expected to be down about 5
percent with sales of compact equipment up about 5 percent. Global
forestry industry sales are forecast to be flat to up 5 percent for
the year.
Financial Services. Fiscal-year 2021 net income
attributable to Deere & Company for the financial services
operations is forecast to be approximately $630 million. Results are expected to benefit
from favorable financing spreads, lower losses on operating-lease
residual values, and income earned on a higher average portfolio,
partially offset by a higher provision for credit losses.
John Deere Capital Corporation
The following is disclosed on behalf of the company's financial
services subsidiary, John Deere Capital Corporation (JDCC), in
connection with the disclosure requirements applicable to its
periodic issuance of debt securities in the public market.
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Fourth
Quarter
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Full Year
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$ in
millions
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2020
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2019
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% Change
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2020
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2019
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% Change
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Revenue
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$
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693
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$
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785
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-12%
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$
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2,808
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$
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2,890
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-3%
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Net income
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$
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154
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$
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68
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126%
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$
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425
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$
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419
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1%
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Ending portfolio
balance
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$
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38,726
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$
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38,251
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1%
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Net income for the current quarter was higher than in the fourth
quarter of 2019 primarily due to lower impairments and reduced
losses on operating-lease residual values, favorable financing
spreads, and a lower provision for credit losses, partially offset
by employee-separation expenses. Full year 2020 net income was
about the same as in 2019 with lower impairments and reduced losses
on operating-lease residual values, and income from a higher
average portfolio, largely offset by a higher provision for credit
losses and unfavorable financing spreads. The full year 2019 was
also affected by favorable discrete adjustments to the provision
for income taxes.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements under "Company Outlook
& Summary," "Market Conditions & Outlook," and other
forward-looking statements herein that relate to future events,
expectations, and trends involve factors that are subject to
change, and risks and uncertainties that could cause actual results
to differ materially. Some of these risks and uncertainties
could affect particular lines of business, while others could
affect all of the company's businesses.
The company's agricultural equipment business is subject to a
number of uncertainties including the factors that affect farmers'
confidence and financial condition. These factors include
demand for agricultural products, world grain stocks, weather
conditions, soil conditions, harvest yields, prices for commodities
and livestock, crop and livestock production expenses, availability
of transport for crops, trade restrictions and tariffs (e.g.,
China), global trade agreements,
the level of farm product exports (including concerns about
genetically modified organisms), the growth and sustainability of
non-food uses for some crops (including ethanol and biodiesel
production), real estate values, available acreage for farming, the
land ownership policies of governments, changes in government farm
programs and policies, international reaction to such programs,
changes in and effects of crop insurance programs, changes in
environmental regulations and their impact on farming practices,
animal diseases (e.g., African swine fever) and their effects on
poultry, beef and pork consumption and prices and on livestock feed
demand, and crop pests and diseases and the impact of the COVID
pandemic on the agricultural industry including demand for, and
production and exports of, agricultural products, and commodity
prices.
Factors affecting the outlook for the company's turf and utility
equipment include consumer confidence, weather conditions, 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. Many of these factors have been and
may continue to be impacted by global economic effects, including
the downturn resulting from the COVID pandemic and responses to the
pandemic taken by governments and other authorities.
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 are important to sales and results
of the company's construction and forestry equipment. Prices
for pulp, paper, lumber and structural panels are important to
sales of forestry equipment. Many of these factors affecting
the outlook for the company's construction and forestry equipment
have been and may continue to be impacted by global economic
effects, including the downturn resulting from the COVID pandemic
and responses to the pandemic taken by governments and other
authorities.
All of the company's businesses and its results are affected by
general economic conditions in the global markets and industries in
which the company operates; customer confidence in general economic
conditions; government spending and taxing; foreign currency
exchange rates and their volatility, especially fluctuations in the
value of the U.S. dollar; interest rates (including the
availability of IBOR reference rates); inflation and deflation
rates; changes in weather patterns; the political and social
stability of the global markets in which the company operates; the
effects of, or response to, terrorism and security threats; wars
and other conflicts; natural disasters; and the spread of major
epidemics (including the COVID pandemic) and government and
industry responses to epidemics such as travel restrictions and
extended shut down of businesses.
Uncertainties related to the magnitude and duration of the COVID
pandemic may significantly adversely affect the company's business
and outlook. These uncertainties include: prolonged reduction
or closure of the company's operations, or a delayed recovery in
our operations; additional closures as mandated or otherwise made
necessary by governmental authorities; disruptions in the supply
chain and a prolonged delay in resumption of operations by one or
more key suppliers, or the failure of any key suppliers; the
company's ability to meet commitments to customers on a timely
basis as a result of increased costs and supply challenges; the
ability to receive goods on a timely basis and at anticipated
costs; increased logistics costs; delays in the company's strategic
initiatives as a result of reduced spending on research and
development; additional operating costs at facilities that remain
open due to remote working arrangements, adherence to social
distancing guidelines and other COVID-related challenges; increased
risk of cyber attacks on network connections used in remote working
arrangements; increased privacy-related risks due to processing
health-related personal information; legal claims related to
personal protective equipment designed, made, or provided by the
company or alleged exposure to COVID on company premises; absence
of employees due to illness; the impact of the pandemic on the
company's customers and dealers, and their delays in their plans to
invest in new equipment; requests by the company's customers or
dealers for payment deferrals and contract modifications; the
impact of disruptions in the global capital markets and/or
continued declines in the company's financial performance, outlook
or credit ratings, which could impact the company's ability to
obtain funding in the future; the duration and impact of the
resurgence in COVID cases in any country, state, or region; and the
impact of the pandemic on demand for our products and services as
discussed above. It is unclear when a sustained economic
recovery could occur and what a recovery may look like. All
of these factors could materially and adversely affect our
business, liquidity, results of operations and financial
position.
Significant changes in market liquidity conditions, changes in
the company's credit ratings and any failure to comply with
financial covenants in credit agreements could impact access to
funding and funding costs, which could reduce the company's
earnings and cash flows. Financial market conditions could
also negatively impact customer access to capital for purchases of
the company's products and customer confidence and purchase
decisions, borrowing and repayment practices, and the number and
size of customer loan delinquencies and defaults. A debt
crisis, in Europe or elsewhere,
could negatively impact currencies, global financial markets,
social and political stability, funding sources and costs, asset
and obligation values, customers, suppliers, demand for equipment,
and company operations and results. The company's investment
management activities could be impaired by changes in the equity,
bond and other financial markets, which would negatively affect
earnings.
The withdrawal of the United
Kingdom from the European Union and the perceptions as to
the impact of the withdrawal may adversely affect business
activity, political stability and economic conditions in the
United Kingdom, the European Union
and elsewhere. The economic conditions and outlook could be
further adversely affected by (i) uncertainty regarding any new or
modified trade arrangements between the United Kingdom and the European Union and/or
other countries, (ii) the risk that one or more other European
Union countries could come under increasing pressure to leave the
European Union, or (iii) the risk that the euro as the single
currency of the Eurozone could cease to exist. Any of these
developments, or the perception that any of these developments are
likely to occur, could affect economic growth or business activity
in the United Kingdom or the
European Union, and could result in the relocation of businesses,
cause business interruptions, lead to economic recession or
depression, and impact the stability of the financial markets,
availability of credit, currency exchange rates, interest rates,
financial institutions, and political, financial and monetary
systems. Any of these developments could affect our
businesses, liquidity, results of operations and financial
position.
Additional factors that could materially affect the company's
operations, access to capital, expenses and results include changes
in, uncertainty surrounding and the impact of governmental trade,
banking, monetary and fiscal policies, including financial
regulatory reform and its effects on the consumer finance industry,
derivatives, funding costs and other areas; governmental programs,
policies, and tariffs for the benefit of certain industries or
sectors; sanctions in particular jurisdictions; 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, noise 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 regulations; changes to and compliance with
economic sanctions and export controls laws and regulations;
compliance with U.S. and foreign laws when expanding to new markets
and otherwise; and actions by other regulatory bodies.
Other factors that could materially affect results include
production, design and technological innovations and difficulties,
including capacity and supply constraints and prices; the loss of
or challenges to intellectual property rights whether through
theft, infringement, counterfeiting or otherwise; the availability
and prices of strategically sourced materials, components and whole
goods; delays or disruptions in the company's supply chain or the
loss of liquidity by suppliers; disruptions of infrastructures that
support communications, operations or distribution; the failure of
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; events that damage the company's
reputation or brand; significant investigations, claims, lawsuits
or other legal proceedings; start-up of new plants and products;
the success of new product initiatives; changes in customer product
preferences and sales mix; gaps or limitations in rural broadband
coverage, capacity and speed needed to support technology
solutions; oil and energy prices, supplies and volatility; the
availability and cost of freight; actions of competitors in the
various industries in which the company competes, particularly
price discounting; dealer practices especially as to levels of new
and used field inventories; changes in demand and pricing for used
equipment and resulting impacts on lease residual values; labor
relations and contracts; changes in the ability to attract, train
and retain qualified personnel; acquisitions and divestitures of
businesses; greater than anticipated transaction costs; the
integration of new businesses; the failure or delay in closing or
realizing anticipated benefits of acquisitions, joint ventures or
divestitures; the implementation of organizational changes; the
failure to realize anticipated savings or benefits of cost
reduction, productivity, or efficiency efforts; difficulties
related to the conversion and implementation of enterprise resource
planning systems; security breaches, cybersecurity attacks,
technology failures and other disruptions to the company's and
suppliers' information technology infrastructure; changes in
company declared dividends and common stock issuances and
repurchases; changes in the level and funding of employee
retirement benefits; changes in market values of investment assets,
compensation, retirement, discount and mortality rates which impact
retirement benefit costs; and significant changes in health care
costs.
The liquidity and ongoing profitability of John Deere Capital
Corporation and other credit subsidiaries depend largely on timely
access to capital in order to meet future cash flow requirements,
and to fund operations, costs, and purchases of the company's
products. If general economic conditions deteriorate or
capital markets become more volatile, including as a result of the
COVID pandemic, funding could be unavailable or insufficient.
Additionally, customer confidence levels may result in declines in
credit applications and increases in delinquencies and default
rates, which could materially impact write-offs and provisions for
credit losses.
The company's forward-looking statements are based upon
assumptions relating to the factors described above, which are
sometimes based upon estimates and data prepared by government
agencies. Such estimates and data are often revised.
The company, except as required by law, undertakes no obligation to
update or revise its forward-looking statements, whether as a
result of new developments or otherwise. Further information
concerning the company and its businesses, including factors that
could materially affect the company's financial results, is
included in the company's other filings with the SEC (including,
but not limited to, the factors discussed in Item 1A. Risk Factors
of the company's most recent annual report on Form 10-K and
quarterly reports on Form 10-Q).
Fourth Quarter 2020
Press Release
|
(in millions of
dollars)
|
Unaudited
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
November 1
|
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November 3
|
|
%
|
|
November 1
|
|
November 3
|
|
%
|
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
6,198
|
|
$
|
5,756
|
|
+8
|
|
$
|
22,325
|
|
$
|
23,666
|
|
-6
|
Construction and
forestry
|
|
|
2,461
|
|
|
2,947
|
|
-16
|
|
|
8,947
|
|
|
11,220
|
|
-20
|
Total net
sales
|
|
|
8,659
|
|
|
8,703
|
|
-1
|
|
|
31,272
|
|
|
34,886
|
|
-10
|
Financial
services
|
|
|
891
|
|
|
971
|
|
-8
|
|
|
3,589
|
|
|
3,621
|
|
-1
|
Other
revenues
|
|
|
181
|
|
|
222
|
|
-18
|
|
|
679
|
|
|
751
|
|
-10
|
Total net sales and
revenues
|
|
$
|
9,731
|
|
$
|
9,896
|
|
-2
|
|
$
|
35,540
|
|
$
|
39,258
|
|
-9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit:
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and
turf
|
|
$
|
860
|
|
$
|
527
|
|
+63
|
|
$
|
2,969
|
|
$
|
2,506
|
|
+18
|
Construction and
forestry
|
|
|
196
|
|
|
261
|
|
-25
|
|
|
590
|
|
|
1,215
|
|
-51
|
Financial
services
|
|
|
249
|
|
|
128
|
|
+95
|
|
|
746
|
|
|
694
|
|
+7
|
Total operating
profit
|
|
|
1,305
|
|
|
916
|
|
+42
|
|
|
4,305
|
|
|
4,415
|
|
-2
|
Reconciling items
**
|
|
|
(219)
|
|
|
(90)
|
|
+143
|
|
|
(472)
|
|
|
(310)
|
|
+52
|
Income
taxes
|
|
|
(329)
|
|
|
(104)
|
|
+216
|
|
|
(1,082)
|
|
|
(852)
|
|
+27
|
Net income
attributable to Deere & Company
|
|
$
|
757
|
|
$
|
722
|
|
+5
|
|
$
|
2,751
|
|
$
|
3,253
|
|
-15
|
|
* 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
|
STATEMENT OF
CONSOLIDATED INCOME
|
For the
Three Months Ended November 1, 2020 and November 3,
2019
|
(In millions of
dollars and shares except per share amounts)
Unaudited
|
|
|
|
2020
|
|
2019
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
8,659
|
|
$
|
8,703
|
Finance and interest
income
|
|
|
867
|
|
|
956
|
Other
income
|
|
|
205
|
|
|
237
|
Total
|
|
|
9,731
|
|
|
9,896
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
6,470
|
|
|
6,735
|
Research and
development expenses
|
|
|
443
|
|
|
488
|
Selling,
administrative and general expenses
|
|
|
1,011
|
|
|
945
|
Interest
expense
|
|
|
278
|
|
|
388
|
Other operating
expenses
|
|
|
414
|
|
|
515
|
Total
|
|
|
8,616
|
|
|
9,071
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
1,115
|
|
|
825
|
Provision for income
taxes
|
|
|
329
|
|
|
104
|
|
|
|
|
|
|
|
Income of
Consolidated Group
|
|
|
786
|
|
|
721
|
Equity in income
(loss) of unconsolidated affiliates
|
|
|
(28)
|
|
|
1
|
|
|
|
|
|
|
|
Net
Income
|
|
|
758
|
|
|
722
|
Less: Net income
attributable to noncontrolling interests
|
|
|
1
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
757
|
|
$
|
722
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
2.41
|
|
$
|
2.30
|
Diluted
|
|
$
|
2.39
|
|
$
|
2.27
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
314.1
|
|
|
313.9
|
Diluted
|
|
|
317.1
|
|
|
317.9
|
|
See Condensed
Notes to Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED INCOME
|
For the Years
Ended November 1, 2020 and November 3, 2019
|
(In millions of
dollars and shares except per share amounts) Unaudited
|
|
|
2020
|
|
2019
|
Net Sales and
Revenues
|
|
|
|
|
|
|
Net sales
|
|
$
|
31,272
|
|
$
|
34,886
|
Finance and interest
income
|
|
|
3,450
|
|
|
3,493
|
Other
income
|
|
|
818
|
|
|
879
|
Total
|
|
|
35,540
|
|
|
39,258
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
Cost of
sales
|
|
|
23,677
|
|
|
26,792
|
Research and
development expenses
|
|
|
1,644
|
|
|
1,783
|
Selling,
administrative and general expenses
|
|
|
3,477
|
|
|
3,551
|
Interest
expense
|
|
|
1,247
|
|
|
1,466
|
Other operating
expenses
|
|
|
1,612
|
|
|
1,578
|
Total
|
|
|
31,657
|
|
|
35,170
|
|
|
|
|
|
|
|
Income of
Consolidated Group before Income Taxes
|
|
|
3,883
|
|
|
4,088
|
Provision for income
taxes
|
|
|
1,082
|
|
|
852
|
|
|
|
|
|
|
|
Income of
Consolidated Group
|
|
|
2,801
|
|
|
3,236
|
Equity in income
(loss) of unconsolidated affiliates
|
|
|
(48)
|
|
|
21
|
|
|
|
|
|
|
|
Net
Income
|
|
|
2,753
|
|
|
3,257
|
Less: Net income
attributable to noncontrolling interests
|
|
|
2
|
|
|
4
|
Net Income
Attributable to Deere & Company
|
|
$
|
2,751
|
|
$
|
3,253
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
Basic
|
|
$
|
8.77
|
|
$
|
10.28
|
Diluted
|
|
$
|
8.69
|
|
$
|
10.15
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
|
|
|
|
|
|
Basic
|
|
|
313.5
|
|
|
316.5
|
Diluted
|
|
|
316.6
|
|
|
320.6
|
|
See Condensed
Notes to Consolidated Financial Statements.
|
DEERE &
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
As of
November 1, 2020 and November 3, 2019
|
(In millions of
dollars) Unaudited
|
|
|
2020
|
|
2019
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,066
|
|
$
|
3,857
|
Marketable
securities
|
|
|
641
|
|
|
581
|
Receivables from
unconsolidated affiliates
|
|
|
31
|
|
|
46
|
Trade accounts and
notes receivable - net
|
|
|
4,171
|
|
|
5,230
|
Financing receivables
- net
|
|
|
29,750
|
|
|
29,195
|
Financing receivables
securitized - net
|
|
|
4,703
|
|
|
4,383
|
Other
receivables
|
|
|
1,220
|
|
|
1,487
|
Equipment on
operating leases - net
|
|
|
7,298
|
|
|
7,567
|
Inventories
|
|
|
4,999
|
|
|
5,975
|
Property and
equipment - net
|
|
|
5,817
|
|
|
5,973
|
Investments in
unconsolidated affiliates
|
|
|
193
|
|
|
215
|
Goodwill
|
|
|
3,081
|
|
|
2,917
|
Other intangible
assets - net
|
|
|
1,327
|
|
|
1,380
|
Retirement
benefits
|
|
|
863
|
|
|
840
|
Deferred income
taxes
|
|
|
1,499
|
|
|
1,466
|
Other
assets
|
|
|
2,432
|
|
|
1,899
|
Total
Assets
|
|
$
|
75,091
|
|
$
|
73,011
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
8,582
|
|
$
|
10,784
|
Short-term
securitization borrowings
|
|
|
4,682
|
|
|
4,321
|
Payables to
unconsolidated affiliates
|
|
|
105
|
|
|
142
|
Accounts payable and
accrued expenses
|
|
|
10,112
|
|
|
9,656
|
Deferred income
taxes
|
|
|
519
|
|
|
495
|
Long-term
borrowings
|
|
|
32,734
|
|
|
30,229
|
Retirement benefits
and other liabilities
|
|
|
5,413
|
|
|
5,953
|
Total
liabilities
|
|
|
62,147
|
|
|
61,580
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
Total Deere &
Company stockholders' equity
|
|
|
12,937
|
|
|
11,413
|
Noncontrolling
interests
|
|
|
7
|
|
|
4
|
Total stockholders'
equity
|
|
|
12,944
|
|
|
11,417
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
75,091
|
|
$
|
73,011
|
|
See Condensed
Notes to Consolidated Financial Statements.
|
DEERE &
COMPANY
|
STATEMENT OF
CONSOLIDATED CASH FLOWS
|
For the Years
Ended November 1, 2020 and November 3, 2019
|
(In millions of
dollars) Unaudited
|
|
|
2020
|
|
2019
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
2,753
|
|
$
|
3,257
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
110
|
|
|
43
|
Provision for
depreciation and amortization
|
|
|
2,118
|
|
|
2,019
|
Impairment
charges
|
|
|
194
|
|
|
77
|
Share-based
compensation expense
|
|
|
81
|
|
|
82
|
Loss on sales of
businesses and unconsolidated affiliates
|
|
|
24
|
|
|
5
|
Undistributed earnings
of unconsolidated affiliates
|
|
|
(7)
|
|
|
9
|
Credit for deferred
income taxes
|
|
|
(11)
|
|
|
(465)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Trade, notes, and
financing receivables related to sales
|
|
|
2,009
|
|
|
(869)
|
Inventories
|
|
|
397
|
|
|
(780)
|
Accounts payable and
accrued expenses
|
|
|
(7)
|
|
|
46
|
Accrued income taxes
payable/receivable
|
|
|
8
|
|
|
173
|
Retirement
benefits
|
|
|
(537)
|
|
|
(233)
|
Other
|
|
|
351
|
|
|
48
|
Net cash provided by
operating activities
|
|
|
7,483
|
|
|
3,412
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables related to sales)
|
|
|
17,381
|
|
|
16,706
|
Proceeds from
maturities and sales of marketable securities
|
|
|
93
|
|
|
89
|
Proceeds from sales
of equipment on operating leases
|
|
|
1,783
|
|
|
1,648
|
Proceeds from sales
of business and unconsolidated affiliates, net of cash
sold
|
|
|
|
|
|
93
|
Cost of receivables
acquired (excluding receivables related to sales)
|
|
|
(19,965)
|
|
|
(18,873)
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(66)
|
|
|
|
Purchases of
marketable securities
|
|
|
(130)
|
|
|
(140)
|
Purchases of property
and equipment
|
|
|
(820)
|
|
|
(1,120)
|
Cost of equipment on
operating leases acquired
|
|
|
(1,836)
|
|
|
(2,329)
|
Collateral on
derivatives - net
|
|
|
268
|
|
|
59
|
Other
|
|
|
(27)
|
|
|
(57)
|
Net cash used for
investing activities
|
|
|
(3,319)
|
|
|
(3,924)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
Decrease in total
short-term borrowings
|
|
|
(1,360)
|
|
|
(917)
|
Proceeds from
long-term borrowings
|
|
|
9,271
|
|
|
9,986
|
Payments of long-term
borrowings
|
|
|
(7,383)
|
|
|
(6,426)
|
Proceeds from
issuance of common stock
|
|
|
331
|
|
|
178
|
Repurchases of common
stock
|
|
|
(750)
|
|
|
(1,253)
|
Dividends
paid
|
|
|
(956)
|
|
|
(943)
|
Other
|
|
|
(133)
|
|
|
(116)
|
Net cash provided by
(used for) financing activities
|
|
|
(980)
|
|
|
509
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents, and Restricted
Cash
|
|
|
32
|
|
|
(56)
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents, and Restricted
Cash
|
|
|
3,216
|
|
|
(59)
|
Cash, Cash
Equivalents, and Restricted Cash at Beginning of
Year
|
|
|
3,956
|
|
|
4,015
|
Cash, Cash
Equivalents, and Restricted Cash at End of Year
|
|
$
|
7,172
|
|
$
|
3,956
|
|
See Condensed
Notes to Consolidated Financial Statements.
|
|
|
Condensed
Notes to Consolidated Financial Statements
(Unaudited)
|
|
(1)
|
In September 2020,
the Company sold its German lawn mower business. At the time of the
sale, total assets were $26 million, which were recorded in "Other
assets" and total liabilities were $5 million, which were recorded
in "Accounts payable and accrued expenses." No cash proceeds were
received, resulting in a loss on sale, including transaction costs,
of $24 million pretax and after-tax. The loss was recorded with a
$24 million pretax and after-tax accrual recognized in the third
quarter of 2020 when a definitive sale agreement was finalized. The
loss was recorded in "Other operating expenses" in the agriculture
and turf operations.
|
|
|
(2)
|
In the fourth quarter
and full year 2020, the Company recorded impairments and other
charges as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
November 1, 2020
|
|
|
Twelve Months Ended
November 1, 2020
|
|
|
|
Agriculture
|
|
Construction
|
|
Financial
|
|
|
|
|
Agriculture
|
|
Construction
|
|
Financial
|
|
|
|
|
|
and Turf
|
|
and
Forestry
|
|
Services
|
|
Total
|
|
|
and Turf
|
|
and
Forestry
|
|
Services
|
|
Total
|
|
Factory
closure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China –
agriculture
equipment *
|
|
$
|
7
|
|
|
|
|
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
|
|
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed asset and
lease
impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
German asphalt
plant
factory *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
62
|
|
|
|
|
|
62
|
|
Brazil
construction
equipment factory *
|
|
|
|
|
$
|
16
|
|
|
|
|
|
16
|
|
|
|
|
|
|
16
|
|
|
|
|
|
16
|
|
Other
international
fixed assets ****
|
|
|
17
|
|
|
2
|
|
|
|
|
|
19
|
|
|
|
17
|
|
|
2
|
|
|
|
|
|
19
|
|
Equipment on
operating
leases **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22
|
|
|
22
|
|
Operating lease
inventory **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
company
impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority investment
in
construction equipment
company headquartered
in South Africa ***
|
|
|
|
|
|
23
|
|
|
|
|
|
23
|
|
|
|
|
|
|
43
|
|
|
|
|
|
43
|
|
Construction
equipment
joint venture located in
Brazil ***
|
|
|
|
|
|
7
|
|
|
|
|
|
7
|
|
|
|
|
|
|
7
|
|
|
|
|
|
7
|
|
Total 1
2
|
|
$
|
24
|
|
$
|
48
|
|
|
|
|
$
|
72
|
|
|
$
|
37
|
|
$
|
130
|
|
$
|
32
|
|
$
|
199
|
|
*
Recorded in "Cost of sales"
|
**
Recorded in "Other operating expenses"
|
*** Recorded in
"Equity in income (loss) of unconsolidated affiliate"
|
****Recorded $15
million in "Cost of sales" and $4 million in "Selling,
administrative, and general expenses"
|
1
The after-tax effect was $62 million and $180 million
in the fourth quarter and full year 2020, respectively.
|
2 The non-cash charges
were $72 million and $194 million in the fourth quarter and full
year 2020, respectively.
|
|
|
|
|
(3)
|
During first and
fourth quarters of 2020, the Company implemented
employee-separation programs for the Company's salaried workforce
in several geographic areas, including the United States, Europe,
Asia, and Latin America. The programs' main purpose was to improve
efficiency through a leaner, more flexible organization. The
programs were largely voluntary in nature with the expense recorded
primarily in the period in which the employees irrevocably accepted
a separation offer. For the limited involuntary employee-separation
programs, the expense was recorded when management committed to a
plan, the plan was communicated to the employees, and the employees
were not required to provide service beyond the legal notification
period. The programs provided for cash payments based on years of
service, and in some countries, subsidized healthcare for a limited
period and outplacement services. The total pretax expenses for the
fourth quarter and full year of 2020 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
November 1, 2020
|
|
Twelve Months Ended
November 1, 2020
|
|
|
|
Agriculture
|
|
Construction
|
|
Financial
|
|
|
|
|
Agriculture
|
|
Construction
|
|
Financial
|
|
|
|
|
|
|
and Turf
|
|
and
Forestry
|
|
Services
|
|
Total
|
|
and Turf
|
|
and
Forestry
|
|
Services
|
|
Total
|
|
Cost of
sales
|
|
$
|
50
|
|
$
|
13
|
|
|
|
|
$
|
63
|
|
$
|
82
|
|
$
|
22
|
|
|
|
|
$
|
104
|
|
Research and
development expenses
|
|
|
32
|
|
|
5
|
|
|
|
|
|
37
|
|
|
47
|
|
|
8
|
|
|
|
|
|
55
|
|
Selling,
administrative
and general expenses
|
|
|
58
|
|
|
10
|
|
$
|
11
|
|
|
79
|
|
|
96
|
|
|
24
|
|
$
|
15
|
|
|
135
|
|
Other operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
41
|
|
Total
|
|
$
|
140
|
|
$
|
28
|
|
$
|
11
|
|
$
|
197
|
|
$
|
225
|
|
$
|
54
|
|
$
|
15
|
|
$
|
335
|
|
|
|
Total program
payments will be $301 million with $166 million paid in 2020 and
$135 million to be disbursed over two years. Included in total
pretax expense are non-cash charges of $13 million and $34 million
in the fourth quarter and full year 2020, respectively, resulting
from curtailment losses in certain OPEB plans that were recorded
outside of operating profit in "Other operating expense." Annual
savings from these programs are estimated to be approximately $250
million, of which approximately $85 million was realized in
2020.
|
|
|
(4)
|
In September 2020,
the Company acquired Unimil, a leading Brazilian Company in the
after-sales service parts business for sugarcane harvesters, which
is based in Piracicaba, Brazil. The total cash purchase price
before final adjustments, net of cash acquired of $5 million, was
$66 million with $6 million funded to an escrow account to secure
certain indemnity obligations. In addition to the cash purchase
price, $14 million of liabilities were assumed. The preliminary
asset and liability fair values at the acquisition date assigned to
the assets and liabilities were approximately $5 million of trade
accounts receivables, $2 million of other receivables, $10 million
of inventories, $22 million of property and equipment, $28 million
of goodwill, $13 million of other intangible assets, $5 million of
accounts payable and accrued expenses, and $9 million of net
deferred tax liabilities. The goodwill is not expected to be
deducted for tax purposes. Unimil is included in the Company's
agriculture and turf operating segment.
|
|
|
(5)
|
Dividends declared
and paid on a per share basis were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
November 1
|
|
November 3
|
|
November 1
|
|
November 3
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Dividends
declared
|
|
$
|
.76
|
|
$
|
.76
|
|
$
|
3.04
|
|
$
|
3.04
|
Dividends
paid
|
|
$
|
.76
|
|
$
|
.76
|
|
$
|
3.04
|
|
$
|
2.97
|
|
|
(6)
|
The calculation of
basic net income per share is based on the average number of shares
outstanding. The calculation of diluted net income per share
recognizes any dilutive effect of share-based
compensation.
|
|
|
(7)
|
The consolidated
financial statements represent the consolidation of all
Deere & Company's subsidiaries. In the supplemental
consolidating data in Note 8 to the financial statements, the
"Equipment Operations" represents the enterprise without "Financial
Services", which include the Company's agriculture and turf
operations and construction and forestry operations, and other
corporate assets, liabilities, revenues, and expenses not
reflected within "Financial Services".
|
(8) SUPPLEMENTAL
CONSOLIDATING DATA
|
STATEMENT OF
INCOME
|
For the
Three Months Ended November 1, 2020 and November 3,
2019
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS
1
|
|
FINANCIAL
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
8,659
|
|
$
|
8,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,659
|
|
$
|
8,703
|
|
|
|
Finance and interest
income
|
|
|
38
|
|
|
40
|
|
$
|
891
|
|
$
|
1,007
|
|
$
|
(62)
|
|
$
|
(91)
|
|
|
867
|
|
|
956
|
|
2
|
|
Other
income
|
|
|
211
|
|
|
267
|
|
|
60
|
|
|
50
|
|
|
(66)
|
|
|
(80)
|
|
|
205
|
|
|
237
|
|
3
|
|
Total
|
|
|
8,908
|
|
|
9,010
|
|
|
951
|
|
|
1,057
|
|
|
(128)
|
|
|
(171)
|
|
|
9,731
|
|
|
9,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
6,470
|
|
|
6,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,470
|
|
|
6,735
|
|
|
|
Research and
development expenses
|
|
|
443
|
|
|
488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
443
|
|
|
488
|
|
|
|
Selling,
administrative and general
expenses
|
|
|
890
|
|
|
840
|
|
|
123
|
|
|
106
|
|
|
(2)
|
|
|
(1)
|
|
|
1,011
|
|
|
945
|
|
4
|
|
Interest
expense
|
|
|
92
|
|
|
75
|
|
|
195
|
|
|
323
|
|
|
(9)
|
|
|
(10)
|
|
|
278
|
|
|
388
|
|
5
|
|
Interest compensation
to Financial
Services
|
|
|
53
|
|
|
81
|
|
|
|
|
|
|
|
|
(53)
|
|
|
(81)
|
|
|
|
|
|
|
|
5
|
|
Other operating
expenses
|
|
|
93
|
|
|
96
|
|
|
385
|
|
|
498
|
|
|
(64)
|
|
|
(79)
|
|
|
414
|
|
|
515
|
|
6
|
|
Total
|
|
|
8,041
|
|
|
8,315
|
|
|
703
|
|
|
927
|
|
|
(128)
|
|
|
(171)
|
|
|
8,616
|
|
|
9,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before Income Taxes
|
|
|
867
|
|
|
695
|
|
|
248
|
|
|
130
|
|
|
|
|
|
|
|
|
1,115
|
|
|
825
|
|
|
|
Provision for income
taxes
|
|
|
266
|
|
|
64
|
|
|
63
|
|
|
40
|
|
|
|
|
|
|
|
|
329
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after
Income Taxes
|
|
|
601
|
|
|
631
|
|
|
185
|
|
|
90
|
|
|
|
|
|
|
|
|
786
|
|
|
721
|
|
|
|
Equity in income
(loss) of
unconsolidated affiliates
|
|
|
(29)
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
(28)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
572
|
|
|
632
|
|
|
186
|
|
|
90
|
|
|
|
|
|
|
|
|
758
|
|
|
722
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
Net Income
Attributable to
Deere & Company
|
|
$
|
571
|
|
$
|
632
|
|
$
|
186
|
|
$
|
90
|
|
|
|
|
|
|
|
$
|
757
|
|
$
|
722
|
|
|
|
|
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.
|
|
1 The
Equipment Operations represents the enterprise without Financial
Services. The Equipment Operations includes the Company's
agriculture and turf operations, construction and forestry
operations, and other corporate assets, liabilities, revenues and
expenses not reflected within Financial Services.
|
2 Elimination of Financial Services
interest income earned from Equipment Operations.
|
3 Elimination of Equipment
Operations' margin from inventory transferred to equipment on
operating leases.
|
4 Elimination of intercompany service
fees.
|
5 Elimination of Equipment Operations
interest expense to Financial Services.
|
6 Elimination of Financial Services
lease depreciation expense related to inventory transferred to
equipment on operating leases.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
|
STATEMENT OF
INCOME
|
For the Years
Ended November 1, 2020 and November 3,
2019
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT OPERATIONS
1
|
|
FINANCIAL
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
Net Sales and
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
31,272
|
|
$
|
34,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
31,272
|
|
$
|
34,886
|
|
|
|
Finance and interest
income
|
|
|
112
|
|
|
118
|
|
$
|
3,610
|
|
$
|
3,735
|
|
$
|
(272)
|
|
$
|
(360)
|
|
|
3,450
|
|
|
3,493
|
|
2
|
|
Other
income
|
|
|
808
|
|
|
881
|
|
|
257
|
|
|
234
|
|
|
(247)
|
|
|
(236)
|
|
|
818
|
|
|
879
|
|
3
|
|
Total
|
|
|
32,192
|
|
|
35,885
|
|
|
3,867
|
|
|
3,969
|
|
|
(519)
|
|
|
(596)
|
|
|
35,540
|
|
|
39,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
23,679
|
|
|
26,793
|
|
|
|
|
|
|
|
|
(2)
|
|
|
(1)
|
|
|
23,677
|
|
|
26,792
|
|
4
|
|
Research and
development expenses
|
|
|
1,644
|
|
|
1,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,644
|
|
|
1,783
|
|
|
|
Selling,
administrative and general expenses
|
|
|
2,878
|
|
|
3,031
|
|
|
606
|
|
|
528
|
|
|
(7)
|
|
|
(8)
|
|
|
3,477
|
|
|
3,551
|
|
4
|
|
Interest
expense
|
|
|
329
|
|
|
256
|
|
|
942
|
|
|
1,234
|
|
|
(24)
|
|
|
(24)
|
|
|
1,247
|
|
|
1,466
|
|
5
|
|
Interest compensation
to Financial Services
|
|
|
248
|
|
|
336
|
|
|
|
|
|
|
|
|
(248)
|
|
|
(336)
|
|
|
|
|
|
|
|
5
|
|
Other operating
expenses
|
|
|
278
|
|
|
299
|
|
|
1,572
|
|
|
1,506
|
|
|
(238)
|
|
|
(227)
|
|
|
1,612
|
|
|
1,578
|
|
6
|
|
Total
|
|
|
29,056
|
|
|
32,498
|
|
|
3,120
|
|
|
3,268
|
|
|
(519)
|
|
|
(596)
|
|
|
31,657
|
|
|
35,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before Income Taxes
|
|
|
3,136
|
|
|
3,387
|
|
|
747
|
|
|
701
|
|
|
|
|
|
|
|
|
3,883
|
|
|
4,088
|
|
|
|
Provision for income
taxes
|
|
|
899
|
|
|
689
|
|
|
183
|
|
|
163
|
|
|
|
|
|
|
|
|
1,082
|
|
|
852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income after
Income Taxes
|
|
|
2,237
|
|
|
2,698
|
|
|
564
|
|
|
538
|
|
|
|
|
|
|
|
|
2,801
|
|
|
3,236
|
|
|
|
Equity in income
(loss) of
unconsolidated affiliates
|
|
|
(50)
|
|
|
20
|
|
|
2
|
|
|
1
|
|
|
|
|
|
|
|
|
(48)
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
2,187
|
|
|
2,718
|
|
|
566
|
|
|
539
|
|
|
|
|
|
|
|
|
2,753
|
|
|
3,257
|
|
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
2
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
4
|
|
|
|
Net Income
Attributable to
Deere & Company
|
|
$
|
2,185
|
|
$
|
2,714
|
|
$
|
566
|
|
$
|
539
|
|
|
|
|
|
|
|
$
|
2,751
|
|
$
|
3,253
|
|
|
|
|
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.
|
|
1 The
Equipment Operations represents the enterprise without Financial
Services. The Equipment Operations includes the Company's
agriculture and turf operations, construction and forestry
operations, and other corporate assets, liabilities, revenues and
expenses not reflected within Financial Services.
|
2 Elimination of Financial Services
interest income earned from Equipment Operations.
|
3 Elimination of Equipment
Operations' margin from inventory transferred to equipment on
operating leases.
|
4 Elimination of intercompany service
fees.
|
5 Elimination of Equipment Operations
interest expense to Financial Services.
|
6 Elimination of Financial Services
lease depreciation expense related to inventory transferred to
equipment on operating leases.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
|
CONDENSED BALANCE
SHEET
|
As of
November 1, 2020 and November 3, 2019
|
(In millions of
dollars) Unaudited
|
EQUIPMENT
OPERATIONS 1
|
|
FINANCIAL
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
6,145
|
|
$
|
3,175
|
|
$
|
921
|
|
$
|
682
|
|
|
|
|
|
|
|
$
|
7,066
|
|
$
|
3,857
|
|
|
|
Marketable
securities
|
|
7
|
|
|
1
|
|
|
634
|
|
|
580
|
|
|
|
|
|
|
|
|
641
|
|
|
581
|
|
|
|
Receivables from
unconsolidated
affiliates
|
|
5,290
|
|
|
2,017
|
|
|
|
|
|
|
|
$
|
(5,259)
|
|
$
|
(1,971)
|
|
|
31
|
|
|
46
|
|
7
|
|
Trade accounts and
notes receivable
- net
|
|
1,013
|
|
|
1,482
|
|
|
4,238
|
|
|
5,153
|
|
|
(1,080)
|
|
|
(1,405)
|
|
|
4,171
|
|
|
5,230
|
|
8
|
|
Financing receivables
- net
|
|
106
|
|
|
65
|
|
|
29,644
|
|
|
29,130
|
|
|
|
|
|
|
|
|
29,750
|
|
|
29,195
|
|
|
|
Financing receivables
securitized -
net
|
|
26
|
|
|
44
|
|
|
4,677
|
|
|
4,339
|
|
|
|
|
|
|
|
|
4,703
|
|
|
4,383
|
|
|
|
Other
receivables
|
|
1,117
|
|
|
1,376
|
|
|
151
|
|
|
116
|
|
|
(48)
|
|
|
(5)
|
|
|
1,220
|
|
|
1,487
|
|
8
|
|
Equipment on
operating leases - net
|
|
|
|
|
|
|
|
7,298
|
|
|
7,567
|
|
|
|
|
|
|
|
|
7,298
|
|
|
7,567
|
|
|
|
Inventories
|
|
4,999
|
|
|
5,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,999
|
|
|
5,975
|
|
|
|
Property and
equipment - net
|
|
5,778
|
|
|
5,929
|
|
|
39
|
|
|
44
|
|
|
|
|
|
|
|
|
5,817
|
|
|
5,973
|
|
|
|
Investments in
unconsolidated
affiliates
|
|
174
|
|
|
199
|
|
|
19
|
|
|
16
|
|
|
|
|
|
|
|
|
193
|
|
|
215
|
|
|
|
Goodwill
|
|
3,081
|
|
|
2,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,081
|
|
|
2,917
|
|
|
|
Other intangible
assets - net
|
|
1,327
|
|
|
1,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,327
|
|
|
1,380
|
|
|
|
Retirement
benefits
|
|
859
|
|
|
836
|
|
|
59
|
|
|
58
|
|
|
(55)
|
|
|
(54)
|
|
|
863
|
|
|
840
|
|
9
|
|
Deferred income
taxes
|
|
1,763
|
|
|
1,896
|
|
|
45
|
|
|
57
|
|
|
(309)
|
|
|
(487)
|
|
|
1,499
|
|
|
1,466
|
|
10
|
|
Other
assets
|
|
1,439
|
|
|
1,158
|
|
|
994
|
|
|
741
|
|
|
(1)
|
|
|
|
|
|
2,432
|
|
|
1,899
|
|
|
|
Total
Assets
|
$
|
33,124
|
|
$
|
28,450
|
|
$
|
48,719
|
|
$
|
48,483
|
|
$
|
(6,752)
|
|
$
|
(3,922)
|
|
$
|
75,091
|
|
$
|
73,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
292
|
|
$
|
987
|
|
$
|
8,290
|
|
$
|
9,797
|
|
|
|
|
|
|
|
$
|
8,582
|
|
$
|
10,784
|
|
|
|
Short-term
securitization borrowings
|
|
26
|
|
|
44
|
|
|
4,656
|
|
|
4,277
|
|
|
|
|
|
|
|
|
4,682
|
|
|
4,321
|
|
|
|
Payables to
unconsolidated affiliates
|
|
104
|
|
|
142
|
|
|
5,260
|
|
|
1,970
|
|
$
|
(5,259)
|
|
$
|
(1,970)
|
|
|
105
|
|
|
142
|
|
7
|
|
Accounts payable and
accrued expenses
|
|
9,114
|
|
|
9,232
|
|
|
2,127
|
|
|
1,836
|
|
|
(1,129)
|
|
|
(1,412)
|
|
|
10,112
|
|
|
9,656
|
|
8
|
|
Deferred income
taxes
|
|
385
|
|
|
414
|
|
|
443
|
|
|
568
|
|
|
(309)
|
|
|
(487)
|
|
|
519
|
|
|
495
|
|
10
|
|
Long-term
borrowings
|
|
10,124
|
|
|
5,415
|
|
|
22,610
|
|
|
24,814
|
|
|
|
|
|
|
|
|
32,734
|
|
|
30,229
|
|
|
|
Retirement benefits
and other liabilities
|
|
5,366
|
|
|
5,912
|
|
|
102
|
|
|
94
|
|
|
(55)
|
|
|
(53)
|
|
|
5,413
|
|
|
5,953
|
|
9
|
|
Total
liabilities
|
|
25,411
|
|
|
22,146
|
|
|
43,488
|
|
|
43,356
|
|
|
(6,752)
|
|
|
(3,922)
|
|
|
62,147
|
|
|
61,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Deere & Company stockholders'
equity
|
|
12,937
|
|
|
11,413
|
|
|
5,231
|
|
|
5,127
|
|
|
(5,231)
|
|
|
(5,127)
|
|
|
12,937
|
|
|
11,413
|
|
11
|
|
Noncontrolling
interests
|
|
7
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
4
|
|
|
|
Financial Services
equity
|
|
(5,231)
|
|
|
(5,127)
|
|
|
|
|
|
|
|
|
5,231
|
|
|
5,127
|
|
|
|
|
|
|
|
11
|
|
Adjusted total
stockholders' equity
|
|
7,713
|
|
|
6,290
|
|
|
5,231
|
|
|
5,127
|
|
|
|
|
|
|
|
|
12,944
|
|
|
11,417
|
|
|
|
Total Liabilities
and Stockholders'
Equity
|
$
|
33,124
|
|
$
|
28,450
|
|
$
|
48,719
|
|
$
|
48,483
|
|
$
|
(6,752)
|
|
$
|
(3,922)
|
|
$
|
75,091
|
|
$
|
73,011
|
|
|
|
|
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.
|
|
1 The Equipment Operations
represents the enterprise without Financial Services. The Equipment
Operations includes the Company's agriculture and turf operations,
construction and forestry operations, and other corporate assets,
liabilities, revenues and expenses not reflected within Financial
Services.
|
7 Elimination of receivables /
payables between Equipment Operations and Financial
Services.
|
8 Reclassification of sales
incentive accruals on receivables sold to Financial
Services.
|
9 Reclassification of net
pension assets / liabilities.
|
10
Reclassification of deferred tax assets / liabilities in the same
taxing jurisdictions.
|
11 Elimination of Financial Services
equity.
|
SUPPLEMENTAL
CONSOLIDATING DATA (Continued)
|
STATEMENT OF CASH
FLOWS
|
For the Years
Ended November 1, 2020 and November 3, 2019
|
(In millions of dollars) Unaudited
|
|
EQUIPMENT
OPERATIONS 1
|
|
FINANCIAL
SERVICES
|
|
ELIMINATIONS
|
|
CONSOLIDATED
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2,187
|
|
$
|
2,718
|
|
$
|
566
|
|
$
|
539
|
|
|
|
|
|
|
|
$
|
2,753
|
|
$
|
3,257
|
|
|
|
Adjustments to
reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
5
|
|
|
14
|
|
|
105
|
|
|
29
|
|
|
|
|
|
|
|
|
110
|
|
|
43
|
|
|
|
Provision for
depreciation and amortization
|
|
|
1,016
|
|
|
1,015
|
|
|
1,227
|
|
|
1,135
|
|
$
|
(125)
|
|
$
|
(131)
|
|
|
2,118
|
|
|
2,019
|
|
12
|
|
Impairment
charges
|
|
|
162
|
|
|
|
|
|
32
|
|
|
77
|
|
|
|
|
|
|
|
|
194
|
|
|
77
|
|
|
|
Share-based
compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
82
|
|
|
81
|
|
|
82
|
|
13
|
|
Loss on sale of
businesses and unconsolidated
affiliates
|
|
|
24
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
5
|
|
|
|
Undistributed earnings
of unconsolidated
affiliates
|
|
|
381
|
|
|
437
|
|
|
(2)
|
|
|
(2)
|
|
|
(386)
|
|
|
(426)
|
|
|
(7)
|
|
|
9
|
|
14
|
|
Provision (credit) for
deferred income taxes
|
|
|
105
|
|
|
(222)
|
|
|
(116)
|
|
|
(243)
|
|
|
|
|
|
|
|
|
(11)
|
|
|
(465)
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade, notes, and
financing receivables related
to sales
|
|
|
373
|
|
|
(142)
|
|
|
|
|
|
|
|
|
1,636
|
|
|
(727)
|
|
|
2,009
|
|
|
(869)
|
|
15, 17,
18
|
|
Inventories
|
|
|
1,011
|
|
|
(102)
|
|
|
|
|
|
|
|
|
(614)
|
|
|
(678)
|
|
|
397
|
|
|
(780)
|
|
16
|
|
Accounts payable and
accrued expenses
|
|
|
(331)
|
|
|
13
|
|
|
(1)
|
|
|
163
|
|
|
325
|
|
|
(130)
|
|
|
(7)
|
|
|
46
|
|
17
|
|
Accrued income taxes
payable/receivable
|
|
|
(14)
|
|
|
(355)
|
|
|
22
|
|
|
528
|
|
|
|
|
|
|
|
|
8
|
|
|
173
|
|
|
|
Retirement
benefits
|
|
|
(544)
|
|
|
(235)
|
|
|
7
|
|
|
2
|
|
|
|
|
|
|
|
|
(537)
|
|
|
(233)
|
|
|
|
Other
|
|
|
385
|
|
|
54
|
|
|
136
|
|
|
190
|
|
|
(170)
|
|
|
(196)
|
|
|
351
|
|
|
48
|
|
12, 13,
16
|
|
Net cash provided by
operating activities
|
|
|
4,760
|
|
|
3,200
|
|
|
1,976
|
|
|
2,418
|
|
|
747
|
|
|
(2,206)
|
|
|
7,483
|
|
|
3,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collections of
receivables (excluding receivables
related to sales)
|
|
|
|
|
|
|
|
|
18,829
|
|
|
18,190
|
|
|
(1,448)
|
|
|
(1,484)
|
|
|
17,381
|
|
|
16,706
|
|
15
|
|
Proceeds from
maturities and sales of marketable
securities
|
|
|
|
|
|
12
|
|
|
93
|
|
|
77
|
|
|
|
|
|
|
|
|
93
|
|
|
89
|
|
|
|
Proceeds from sales
of equipment on operating
leases
|
|
|
|
|
|
|
|
|
1,783
|
|
|
1,648
|
|
|
|
|
|
|
|
|
1,783
|
|
|
1,648
|
|
|
|
Proceeds from sales
of businesses and
unconsolidated affiliates, net of cash sold
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93
|
|
|
|
Cost of receivables
acquired (excluding
receivables related to sales)
|
|
|
|
|
|
|
|
|
(21,360)
|
|
|
(20,321)
|
|
|
1,395
|
|
|
1,448
|
|
|
(19,965)
|
|
|
(18,873)
|
|
15
|
|
Acquisitions of
businesses, net of cash acquired
|
|
|
(66)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(66)
|
|
|
|
|
|
|
Purchases of
marketable securities
|
|
|
(4)
|
|
|
(3)
|
|
|
(126)
|
|
|
(137)
|
|
|
|
|
|
|
|
|
(130)
|
|
|
(140)
|
|
|
|
Purchases of property
and equipment
|
|
|
(816)
|
|
|
(1,118)
|
|
|
(4)
|
|
|
(2)
|
|
|
|
|
|
|
|
|
(820)
|
|
|
(1,120)
|
|
|
|
Cost of equipment on
operating leases acquired
|
|
|
|
|
|
|
|
|
(2,666)
|
|
|
(3,246)
|
|
|
830
|
|
|
917
|
|
|
(1,836)
|
|
|
(2,329)
|
|
16
|
|
Increase in
investment in Financial Services
|
|
|
(21)
|
|
|
(8)
|
|
|
|
|
|
|
|
|
21
|
|
|
8
|
|
|
|
|
|
|
|
14
|
|
Decrease (increase)
in trade and wholesale
receivables
|
|
|
|
|
|
|
|
|
1,999
|
|
|
(935)
|
|
|
(1,999)
|
|
|
935
|
|
|
|
|
|
|
|
15
|
|
Collateral on
derivatives - net
|
|
|
(6)
|
|
|
|
|
|
274
|
|
|
59
|
|
|
|
|
|
|
|
|
268
|
|
|
59
|
|
|
|
Other
|
|
|
(78)
|
|
|
35
|
|
|
(38)
|
|
|
(54)
|
|
|
89
|
|
|
(38)
|
|
|
(27)
|
|
|
(57)
|
|
18
|
|
Net cash used for
investing activities
|
|
|
(991)
|
|
|
(989)
|
|
|
(1,216)
|
|
|
(4,721)
|
|
|
(1,112)
|
|
|
1,786
|
|
|
(3,319)
|
|
|
(3,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in total
short-term borrowings
|
|
|
(177)
|
|
|
(149)
|
|
|
(1,183)
|
|
|
(768)
|
|
|
|
|
|
|
|
|
(1,360)
|
|
|
(917)
|
|
|
|
Change in
intercompany receivables/payables
|
|
|
(3,207)
|
|
|
(305)
|
|
|
3,207
|
|
|
305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
long-term borrowings
|
|
|
4,586
|
|
|
1,348
|
|
|
4,685
|
|
|
8,638
|
|
|
|
|
|
|
|
|
9,271
|
|
|
9,986
|
|
|
|
Payments of long-term
borrowings
|
|
|
(607)
|
|
|
(972)
|
|
|
(6,776)
|
|
|
(5,454)
|
|
|
|
|
|
|
|
|
(7,383)
|
|
|
(6,426)
|
|
|
|
Proceeds from
issuance of common stock
|
|
|
331
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
331
|
|
|
178
|
|
|
|
Repurchases of common
stock
|
|
|
(750)
|
|
|
(1,253)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(750)
|
|
|
(1,253)
|
|
|
|
Capital investment
from Equipment Operations
|
|
|
|
|
|
|
|
|
21
|
|
|
8
|
|
|
(21)
|
|
|
(8)
|
|
|
|
|
|
|
|
14
|
|
Dividends
paid
|
|
|
(956)
|
|
|
(943)
|
|
|
(386)
|
|
|
(427)
|
|
|
386
|
|
|
427
|
|
|
(956)
|
|
|
(943)
|
|
14
|
|
Other
|
|
|
(105)
|
|
|
(79)
|
|
|
(28)
|
|
|
(38)
|
|
|
|
|
|
1
|
|
|
(133)
|
|
|
(116)
|
|
|
|
Net cash provided by
(used for) financing
activities
|
|
|
(885)
|
|
|
(2,175)
|
|
|
(460)
|
|
|
2,264
|
|
|
365
|
|
|
420
|
|
|
(980)
|
|
|
509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash,
Cash Equivalents, and Restricted Cash
|
|
|
76
|
|
|
(42)
|
|
|
(44)
|
|
|
(14)
|
|
|
|
|
|
|
|
|
32
|
|
|
(56)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash, Cash
Equivalents, and Restricted Cash
|
|
|
2,960
|
|
|
(6)
|
|
|
256
|
|
|
(53)
|
|
|
|
|
|
|
|
|
3,216
|
|
|
(59)
|
|
|
|
Cash, Cash
Equivalents, and Restricted Cash
at Beginning of Year
|
|
|
3,196
|
|
|
3,202
|
|
|
760
|
|
|
813
|
|
|
|
|
|
|
|
|
3,956
|
|
|
4,015
|
|
|
|
Cash, Cash
Equivalents, and Restricted Cash
at End of Year
|
|
$
|
6,156
|
|
$
|
3,196
|
|
$
|
1,016
|
|
$
|
760
|
|
|
|
|
|
|
|
$
|
7,172
|
|
$
|
3,956
|
|
|
|
|
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.
|
|
1
The Equipment Operations represents the enterprise without
Financial Services. The Equipment Operations includes the Company's
agriculture and turf operations, construction and forestry
operations, and other corporate assets, liabilities, revenues and
expenses not reflected within Financial Services.
|
12 Elimination of depreciation on
leases related to inventory transferred to equipment on operating
leases.
|
13 Reclassification of share-based
compensation expense.
|
14 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.
|
15 Primarily reclassification of
receivables related to the sale of equipment.
|
16 Reclassification of lease
agreements with direct customers.
|
17 Reclassification of sales
incentive accruals on receivables sold to Financial
Services.
|
18
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
|
|
For the Twelve Months
Ended
|
|
Equipment Operations*
|
Agriculture and Turf
|
Construction and Forestry*
|
|
|
November 1
|
November 3
|
November 1
|
November 3
|
November 1
|
November 3
|
Dollars in millions
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
Net Sales
|
|
$
|
31,272
|
|
$
|
34,886
|
|
$
|
22,325
|
|
$
|
23,666
|
|
$
|
8,947
|
|
$
|
11,220
|
|
Net Sales - excluding
Roadbuilding
|
|
$
|
28,348
|
|
$
|
31,693
|
|
$
|
22,325
|
|
$
|
23,666
|
|
$
|
6,023
|
|
$
|
8,027
|
|
Average Identifiable
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO
|
|
$
|
19,567
|
|
$
|
20,761
|
|
$
|
10,305
|
|
$
|
10,748
|
|
$
|
9,262
|
|
$
|
10,013
|
|
With Inventories at
LIFO - excluding Roadbuilding
|
|
$
|
13,629
|
|
$
|
14,460
|
|
$
|
10,305
|
|
$
|
10,748
|
|
$
|
3,324
|
|
$
|
3,712
|
|
With Inventories at
Standard Cost
|
|
$
|
20,984
|
|
$
|
22,139
|
|
$
|
11,455
|
|
$
|
11,860
|
|
$
|
9,529
|
|
$
|
10,279
|
|
With Inventories at
Standard Cost -
excluding Roadbuilding
|
|
$
|
15,046
|
|
$
|
15,838
|
|
$
|
11,455
|
|
$
|
11,860
|
|
$
|
3,591
|
|
$
|
3,978
|
|
Operating
Profit
|
|
$
|
3,559
|
|
$
|
3,721
|
|
$
|
2,969
|
|
$
|
2,506
|
|
$
|
590
|
|
$
|
1,215
|
|
Operating Profit -
excluding Roadbuilding
|
|
$
|
3,289
|
|
$
|
3,378
|
|
$
|
2,969
|
|
$
|
2,506
|
|
$
|
320
|
|
$
|
872
|
|
Percent of Net Sales
- excluding Roadbuilding
|
|
|
11.6
|
%
|
|
10.7
|
%
|
|
13.3
|
%
|
|
10.6
|
%
|
|
5.3
|
%
|
|
10.9
|
%
|
Operating Return on
Assets - excluding Roadbuilding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at
LIFO - excluding Roadbuilding
|
|
|
24.1
|
%
|
|
23.4
|
%
|
|
28.8
|
%
|
|
23.3
|
%
|
|
9.6
|
%
|
|
23.5
|
%
|
With Inventories at
Standard Cost -
excluding Roadbuilding
|
|
|
21.9
|
%
|
|
21.3
|
%
|
|
25.9
|
%
|
|
21.1
|
%
|
|
8.9
|
%
|
|
21.9
|
%
|
SVA Cost of Assets -
excluding Roadbuilding
|
|
$
|
(1,806)
|
|
$
|
(1,900)
|
|
$
|
(1,375)
|
|
$
|
(1,423)
|
|
$
|
(431)
|
|
$
|
(477)
|
|
SVA - excluding
Roadbuilding
|
|
$
|
1,483
|
|
$
|
1,478
|
|
$
|
1,594
|
|
$
|
1,083
|
|
$
|
(111)
|
|
$
|
395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months
Ended
|
|
Financial
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 1
|
November 3
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in
millions
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Deere & Company
|
|
$
|
566
|
|
$
|
539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Equity
|
|
$
|
5,099
|
|
$
|
5,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
11.1
|
%
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
746
|
|
$
|
694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Equity
|
|
$
|
(673)
|
|
$
|
(657)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA
|
|
$
|
73
|
|
$
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
* The results and
assets related to the Company's Roadbuilding product line are
excluded from the calculation of SVA to allow time for integration
and assimilation of the 2017 acquisition of Wirtgen Group Holding
GmbH's operations.
|
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SOURCE Deere & Company