Form 8-K DEERE & CO For: May 20
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: May 20, 2016
(Date of earliest event reported)
DEERE & COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE |
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1-4121 |
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36-2382580 |
(State or other jurisdiction of |
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(Commission File Number) |
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(IRS Employer Identification No.) |
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309) 765-8000
(Registrants 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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Items 2.02 |
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and 8.01 |
Results of Operations and Financial Condition and Other Events. |
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The following consists of Deere & Companys press release dated May 20, 2016 concerning Second Quarter of Fiscal 2016 financial results and supplemental financial information filed as Exhibit 99.1 to this report and incorporated by reference herein. |
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Item 9.01 |
Financial Statements and Exhibits. |
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(d) Exhibits |
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(99.1) Press release and supplemental financial information (Filed herewith) |
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Items 2.02 |
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and 7.01 |
Results of Operations and Financial Condition and Regulation FD Disclosure (Furnished herewith) |
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The attached schedules of Other Financial Information (Exhibit 99.2) and Second Quarter 2016 Earnings Conference Call Information (Exhibit 99.3) are furnished under Form 8-K Items 2.02 and 7.01. The information is not filed for purposes of the Securities Exchange Act of 1934 and is not deemed incorporated by reference by any general statements incorporating by reference this report or future filings into any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Deere & Company specifically incorporates the information by reference. |
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.
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DEERE & COMPANY | |
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By: |
/s/ Todd E. Davies |
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Todd E. Davies |
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Secretary |
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Dated: May 20, 2016 |
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Exhibit Index
Number and Description of Exhibit
Press Release and Supplemental Financial Information (Filed herewith) | |
Second Quarter 2016 Earnings Conference Call Information (Furnished herewith) |
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(Filed herewith) |
NEWS RELEASE
Media Contact:
Ken Golden
Director, Global Public Relations
Deere & Company
309-765-5678
Deere Announces Second-Quarter Earnings of $495 Million
· Global farm recession, weak construction-equipment markets lead to lower sales and earnings for quarter and six months.
· All company businesses remain profitable for both periods, aided by sound execution and disciplined cost management.
· Full-year forecast calls for 9% sales decline and earnings of $1.2 billion.
MOLINE, Illinois (May 20, 2016) Net income attributable to Deere & Company was $495.4 million, or $1.56 per share, for the second quarter ended April 30, compared with $690.5 million, or $2.03 per share, for the same period last year.
For the first six months of the year, net income attributable to Deere & Company was $749.8 million, or $2.36 per share, compared with $1.077 billion, or $3.14 per share, last year.
Worldwide net sales and revenues decreased 4 percent, to $7.875 billion, for the second quarter and declined 8 percent, to $13.400 billion, for six months. Net sales of the equipment operations were $7.107 billion for the quarter and $11.876 billion for the first six months, compared with $7.399 billion and $13.004 billion for the periods last year.
John Deeres second-quarter performance reflected the continuing impact of the downturn in the global farm economy and further weakness in the construction equipment sector, said Samuel R. Allen, chairman and chief executive officer. In the face of challenging market conditions, Deeres businesses benefited from the sound execution of operating plans, the strength of a broad product portfolio and our success creating a more flexible cost structure.
Deere Announces Second-Quarter Earnings |
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Summary of Operations
Net sales of the worldwide equipment operations declined 4 percent for the quarter and 9 percent for the first six months compared with the same periods a year ago. Sales included price realization of 1 percent for both periods and an unfavorable currency-translation effect of 2 percent for the quarter and 3 percent for six months. Equipment net sales in the United States and Canada decreased 6 percent for the quarter and 11 percent year to date. Outside the U.S. and Canada, net sales decreased 1 percent for the quarter and 4 percent for the first six months, with unfavorable currency-translation effects of 4 percent and 7 percent for the periods.
Deeres equipment operations reported operating profit of $688 million for the quarter and $902 million for six months, compared with $828 million and $1.242 billion last year. The declines for both periods were primarily due to lower shipment volumes, the unfavorable effects of foreign-currency exchange and the impact of a less favorable product mix. These factors were partially offset by price realization, lower production costs and lower selling, administrative and general expenses.
Net income of the companys equipment operations was $393 million for the second quarter and $520 million for the first six months, compared with $524 million and $764 million for the corresponding periods of 2015.
Financial services reported net income attributable to Deere & Company of $102.6 million for the quarter and $232.0 million for six months compared with $169.8 million and $326.6 million last year. Lower results for both periods were primarily due to higher losses on lease residual values, less-favorable financing spreads and a higher provision for credit losses. Results for the first six months were also affected by the unfavorable effects of foreign-currency exchange translation. Prior-year results benefited from a gain on the sale of the crop insurance business.
Company Outlook & Summary
Company equipment sales are projected to decrease about 9 percent for fiscal 2016 and to be about 12 percent lower for the third quarter compared with year-ago periods. Included in the forecast is a negative foreign-currency translation effect of about 2 percent for the full year and 1 percent in the third quarter. For fiscal 2016, net income attributable to Deere & Company is anticipated to be about $1.2 billion.
Deere Announces Second-Quarter Earnings |
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Although our forecast calls for lower results this year in light of ongoing market pressures, Deere is continuing to perform at a much higher level than in previous downturns, Allen said. Deeres financial condition remains strong and we believe the company is well-positioned to capitalize on attractive growth opportunities that will deliver value to our customers and investors in the future. At the same time, we are continuing to focus on ways to streamline our operations and make them more efficient and profitable.
Equipment Division Performance
Agriculture & Turf. Sales were approximately the same for the quarter and down 5 percent for six months. The decline year-to-date was due largely to lower shipment volumes. Results for both periods were impacted by the unfavorable effects of foreign-currency translation, partially offset by price realization.
Operating profit was $614 million for the quarter and $759 million year to date, compared with $639 million and $907 million, respectively, last year. Lower results for both periods were driven primarily by the unfavorable effects of foreign-currency exchange, lower shipment volumes and a less favorable product mix, partially offset by price realization, lower production costs and lower selling, administrative and general expenses.
Construction & Forestry. Construction and forestry sales decreased 16 percent for the quarter and 20 percent for six months mainly as a result of lower shipment volumes and higher sales-incentive costs.
Operating profit was $74 million for the quarter and $143 million for six months, compared with $189 million and $335 million for the periods last year. Operating profit decreased for the quarter mainly due to lower shipment volumes, higher sales-incentive costs and a less favorable product mix, partially offset by lower production costs and lower selling, administrative and general expenses. Six-month results decreased primarily due to lower shipment volumes and higher sales-incentive costs, partially offset by lower selling, administrative and general expenses and lower production costs.
Market Conditions & Outlook
Agriculture & Turf. Deeres worldwide sales of agriculture and turf equipment are forecast to decrease by about 8 percent for fiscal-year 2016, including a negative currency-translation effect of about 2 percent.
Deere Announces Second-Quarter Earnings |
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Industry sales for agricultural equipment in the U.S. and Canada are forecast to be down 15 to 20 percent for 2016. The decline, reflecting the impact of low commodity prices and stagnant farm incomes, is expected to be most pronounced in the sale of higher-horsepower models.
Full-year 2016 industry sales in the EU28 are forecast to be flat to down 5 percent, with the decline attributable to low commodity prices and farm incomes, including continued pressure on the dairy sector. In South America, industry sales of tractors and combines are projected to be down 15 to 20 percent mainly as a result of economic and political concerns in Brazil. Asian sales are projected to be flat to down slightly, due in part to weakness in China.
Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat to up 5 percent for 2016. Deere sales are expected to benefit from new products and general economic growth.
Construction & Forestry. Deeres worldwide sales of construction and forestry equipment are forecast to be down about 13 percent for 2016, including a negative currency-translation effect of about 1 percent. The forecast decline in sales largely reflects the impact of weak conditions in North America. In forestry, global industry sales are expected to be down 5 to 10 percent from last years strong levels.
Financial Services. Fiscal-year 2016 net income attributable to Deere & Company for the financial services operations is expected to be approximately $480 million. The outlook reflects less-favorable financing spreads, higher losses on lease residual values and an increased provision for credit losses. Additionally, 2015 results benefited from a gain on the sale of the crop insurance business.
John Deere Capital Corporation
The following is disclosed on behalf of the companys financial services subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market.
Net income attributable to John Deere Capital Corporation was $69.6 million for the second quarter and $169.4 million year to date, compared with $115.9 million and $249.5 million for the respective periods last year. The decline for both periods was primarily due to higher losses on lease residual values, less-favorable financing spreads and a higher provision for credit losses.
Deere Announces Second-Quarter Earnings |
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Net receivables and leases financed by JDCC were $33.208 billion at April 30, 2016, compared with $32.877 billion last year.
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, trends and operating periods involve certain factors that are subject to change, and important 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 companys businesses.
The companys agricultural equipment business is subject to a number of uncertainties including the many interrelated factors that affect farmers confidence and financial condition. These factors include demand for agricultural products, world grain stocks, weather conditions (including its effects on timely planting and harvesting), soil conditions (including low subsoil moisture), harvest yields, prices for commodities and livestock, crop and livestock production expenses, availability of transport for crops, the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production), real estate values, available acreage for farming, the land ownership policies of various governments, changes in government farm programs and policies (including those in Argentina, Brazil, China, the European Union, India, Russia and the U.S.), international reaction to such programs, changes in environmental regulations and their impact on farming practices; changes in and effects of crop insurance programs, global trade agreements, animal diseases and their effects on poultry, beef and pork consumption and prices, crop pests and diseases, and the level of farm product exports (including concerns about genetically modified organisms).
Factors affecting the outlook for the companys turf and utility equipment include consumer confidence, weather conditions, customer profitability, consumer borrowing patterns, consumer purchasing preferences, housing starts, infrastructure investment, spending by municipalities and golf courses, and consumable input costs.
Consumer spending patterns, real estate and housing prices, the number of housing starts and interest rates are especially important to sales of the companys construction and forestry equipment. The levels of public and non-residential construction also impact the
Deere Announces Second-Quarter Earnings |
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results of the companys construction and forestry segment. Prices for pulp, paper, lumber and structural panels are important to sales of forestry equipment.
All of the companys businesses and its reported results are affected by general economic conditions in the global markets and industries in which the company operates, especially material changes in economic activity in these markets and industries; customer confidence in general economic conditions; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates; and inflation and deflation rates. Government spending and taxing could adversely affect the economy, employment, consumer and corporate spending, and company results.
Customer and company operations and results could be affected by 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 and the threat thereof and the response thereto; natural disasters; and the spread of major epidemics.
Significant changes in market liquidity conditions and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the companys earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the companys 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 companys investment management activities could be impaired by changes in the equity, bond and other financial markets, which would negatively affect earnings.
Additional factors that could materially affect the companys operations, access to capital, expenses and results include changes in and the impact of governmental trade, banking, monetary and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs and other areas, and governmental programs, policies, tariffs and sanctions in particular jurisdictions or for the benefit of certain industries or sectors (including protectionist, economic, punitive and expropriation policies and trade and licensing restrictions that could disrupt international commerce); actions by the U.S. Federal Reserve Board and other central banks; actions by the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading
Deere Announces Second-Quarter Earnings |
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Commission and other financial 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 in labor regulations; changes to accounting standards; changes in tax rates, estimates, and regulations and company actions related thereto; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies including changes in laws and regulations affecting the sectors in which the company operates. Trade, financial and other sanctions imposed by the U.S., the European Union, Russia and other countries could negatively impact company assets, operations, sales, forecasts and results. Customer and company operations and results also could be affected by changes to GPS radio frequency bands or their permitted uses.
Other factors that could materially affect results include production, design and technological innovations and difficulties, including capacity and supply constraints and prices; the availability and prices of strategically sourced materials, components and whole goods; delays or disruptions in the companys supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations or distribution; the failure of suppliers to comply with laws, regulations and company policy pertaining to employment, human rights, health, safety, the environment and other ethical business practices; events that damage the companys reputation or brand; significant investigations, claims, lawsuits or other legal proceedings; start-up of new plants and new products; the success of new product initiatives and customer acceptance of new products; changes in customer product preferences and sales mix whether as a result of changes in equipment design to meet government regulations or for other reasons; 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; labor relations and contracts; acquisitions and divestitures of businesses; the integration of new businesses; the implementation of organizational changes; difficulties related to the conversion and implementation of enterprise resource planning systems that disrupt business, negatively impact supply or distribution relationships or create higher than expected costs; security breaches and other disruptions to the companys and suppliers information technology infrastructure; and changes in company declared dividends and common stock issuances and repurchases.
Deere Announces Second-Quarter Earnings |
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Company results are also affected by changes in the level and funding of employee retirement benefits, changes in market values of investment assets, the level of interest and discount rates, and compensation, retirement and mortality rates which impact retirement benefit costs, and significant changes in health care costs including those which may result from governmental action.
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, to fund operations and costs associated with engaging in diversified funding activities, and to fund purchases of the companys products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.
The companys outlook is based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The company, except as required by law, undertakes no obligation to update or revise its outlook, whether as a result of new developments or otherwise. Further information concerning the company and its businesses, including factors that potentially could materially affect the companys financial results, is included in the companys other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the companys most recent annual report on Form 10-K and quarterly reports on Form 10-Q).
Deere Announces Second-Quarter Earnings |
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Second Quarter 2016 Press Release
(in millions of dollars)
Unaudited
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Three Months Ended |
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Six Months Ended |
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April 30 |
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April 30 |
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% |
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% |
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2016 |
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2015 |
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Change |
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2016 |
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2015 |
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Change |
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Net sales and revenues: |
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Agriculture and turf |
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$ |
5,742 |
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$ |
5,766 |
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$ |
9,341 |
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$ |
9,847 |
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-5 |
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Construction and forestry |
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1,365 |
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1,633 |
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-16 |
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2,535 |
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3,157 |
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-20 |
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Total net sales |
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7,107 |
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7,399 |
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-4 |
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11,876 |
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13,004 |
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-9 |
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Financial services |
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651 |
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653 |
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1,287 |
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1,301 |
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-1 |
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Other revenues |
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117 |
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119 |
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-2 |
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237 |
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249 |
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-5 |
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Total net sales and revenues |
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$ |
7,875 |
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$ |
8,171 |
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-4 |
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$ |
13,400 |
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$ |
14,554 |
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-8 |
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Operating profit: * |
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Agriculture and turf |
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$ |
614 |
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$ |
639 |
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-4 |
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$ |
759 |
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$ |
907 |
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-16 |
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Construction and forestry |
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74 |
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189 |
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-61 |
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143 |
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335 |
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-57 |
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Financial services |
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160 |
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265 |
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-40 |
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354 |
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498 |
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-29 |
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Total operating profit |
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848 |
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1,093 |
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-22 |
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1,256 |
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1,740 |
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-28 |
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Reconciling items ** |
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(115) |
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(79) |
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+46 |
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(173) |
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(168) |
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+3 |
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Income taxes |
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(238) |
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(324) |
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-27 |
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(333) |
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(495) |
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-33 |
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Net income attributable to Deere & Company |
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$ |
495 |
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$ |
690 |
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-28 |
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$ |
750 |
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$ |
1,077 |
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-30 |
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* Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains or losses.
** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses and net income attributable to noncontrolling interests.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended April 30, 2016 and 2015
(In millions of dollars and shares except per share amounts) Unaudited
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2016 |
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2015 | ||
Net Sales and Revenues |
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Net sales |
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$ |
7,106.6 |
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$ |
7,398.5 |
Finance and interest income |
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611.4 |
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576.3 | ||
Other income |
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157.4 |
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195.9 | ||
Total |
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7,875.4 |
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8,170.7 | ||
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Costs and Expenses |
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Cost of sales |
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5,531.0 |
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5,694.2 | ||
Research and development expenses |
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345.0 |
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341.1 | ||
Selling, administrative and general expenses |
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714.8 |
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740.0 | ||
Interest expense |
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191.0 |
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165.5 | ||
Other operating expenses |
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360.3 |
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212.9 | ||
Total |
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7,142.1 |
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7,153.7 | ||
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Income of Consolidated Group before Income Taxes |
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733.3 |
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1,017.0 | ||
Provision for income taxes |
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237.8 |
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324.0 | ||
Income of Consolidated Group |
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495.5 |
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693.0 | ||
Equity in loss of unconsolidated affiliates |
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(.8) |
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(2.2) | ||
Net Income |
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494.7 |
|
690.8 | ||
Less: Net income (loss) attributable to noncontrolling interests |
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(.7) |
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.3 | ||
Net Income Attributable to Deere & Company |
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$ |
495.4 |
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$ |
690.5 |
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Per Share Data |
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Basic |
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$ |
1.57 |
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$ |
2.05 |
Diluted |
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$ |
1.56 |
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$ |
2.03 |
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Average Shares Outstanding |
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Basic |
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315.1 |
|
337.1 | ||
Diluted |
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316.5 |
|
339.7 |
See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Six Months Ended April 30, 2016 and 2015
(In millions of dollars and shares except per share amounts) Unaudited
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2016 |
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2015 | ||
Net Sales and Revenues |
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Net sales |
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$ |
11,875.8 |
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$ |
13,003.6 |
Finance and interest income |
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1,210.5 |
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1,169.9 | ||
Other income |
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313.6 |
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380.3 | ||
Total |
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13,399.9 |
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14,553.8 | ||
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Costs and Expenses |
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Cost of sales |
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9,371.1 |
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10,114.8 | ||
Research and development expenses |
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664.3 |
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674.3 | ||
Selling, administrative and general expenses |
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1,307.7 |
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1,398.9 | ||
Interest expense |
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364.3 |
|
345.6 | ||
Other operating expenses |
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608.0 |
|
435.5 | ||
Total |
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12,315.4 |
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12,969.1 | ||
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Income of Consolidated Group before Income Taxes |
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1,084.5 |
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1,584.7 | ||
Provision for income taxes |
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333.3 |
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494.6 | ||
Income of Consolidated Group |
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751.2 |
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1,090.1 | ||
Equity in loss of unconsolidated affiliates |
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(2.7) |
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(12.4) | ||
Net Income |
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748.5 |
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1,077.7 | ||
Less: Net income (loss) attributable to noncontrolling interests |
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(1.3) |
|
.5 | ||
Net Income Attributable to Deere & Company |
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$ |
749.8 |
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$ |
1,077.2 |
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Per Share Data |
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Basic |
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$ |
2.37 |
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$ |
3.17 |
Diluted |
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$ |
2.36 |
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$ |
3.14 |
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Average Shares Outstanding |
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Basic |
|
315.8 |
|
340.2 | ||
Diluted |
|
317.1 |
|
342.8 |
See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited
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April 30 |
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October 31 |
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April 30 | |||
|
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2016 |
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2015 |
|
2015 | |||
Assets |
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|
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Cash and cash equivalents |
|
$ |
4,133.2 |
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$ |
4,162.2 |
|
$ |
4,355.4 |
Marketable securities |
|
475.5 |
|
437.4 |
|
392.9 | |||
Receivables from unconsolidated affiliates |
|
81.3 |
|
33.3 |
|
46.4 | |||
Trade accounts and notes receivable - net |
|
4,898.9 |
|
3,051.1 |
|
4,717.1 | |||
Financing receivables - net |
|
23,415.3 |
|
24,809.0 |
|
24,745.8 | |||
Financing receivables securitized - net |
|
4,734.7 |
|
4,834.6 |
|
4,741.1 | |||
Other receivables |
|
876.2 |
|
991.2 |
|
873.4 | |||
Equipment on operating leases - net |
|
5,455.5 |
|
4,970.4 |
|
4,195.2 | |||
Inventories |
|
4,061.0 |
|
3,817.0 |
|
4,624.2 | |||
Property and equipment - net |
|
5,079.7 |
|
5,181.5 |
|
5,245.1 | |||
Investments in unconsolidated affiliates |
|
236.7 |
|
303.5 |
|
299.2 | |||
Goodwill |
|
835.0 |
|
726.0 |
|
737.0 | |||
Other intangible assets - net |
|
120.5 |
|
63.6 |
|
60.4 | |||
Retirement benefits |
|
285.4 |
|
215.6 |
|
313.9 | |||
Deferred income taxes |
|
2,681.9 |
|
2,767.3 |
|
2,659.4 | |||
Other assets |
|
1,812.5 |
|
1,583.9 |
|
1,587.5 | |||
Total Assets |
|
$ |
59,183.3 |
|
$ |
57,947.6 |
|
$ |
59,594.0 |
|
|
|
|
|
|
| |||
Liabilities and Stockholders Equity |
|
|
|
|
|
| |||
|
|
|
|
|
|
| |||
Liabilities |
|
|
|
|
|
| |||
Short-term borrowings |
|
$ |
8,576.0 |
|
$ |
8,426.6 |
|
$ |
8,989.0 |
Short-term securitization borrowings |
|
4,641.8 |
|
4,590.0 |
|
4,702.7 | |||
Payables to unconsolidated affiliates |
|
109.5 |
|
80.6 |
|
130.1 | |||
Accounts payable and accrued expenses |
|
6,980.8 |
|
7,311.5 |
|
7,260.2 | |||
Deferred income taxes |
|
180.3 |
|
160.8 |
|
149.3 | |||
Long-term borrowings |
|
24,648.0 |
|
23,832.8 |
|
23,622.8 | |||
Retirement benefits and other liabilities |
|
6,856.2 |
|
6,787.7 |
|
6,563.9 | |||
Total liabilities |
|
51,992.6 |
|
51,190.0 |
|
51,418.0 | |||
|
|
|
|
|
|
| |||
Redeemable noncontrolling interest |
|
14.0 |
|
|
|
| |||
|
|
|
|
|
|
| |||
Stockholders Equity |
|
|
|
|
|
| |||
Total Deere & Company stockholders equity |
|
7,164.3 |
|
6,743.4 |
|
8,173.8 | |||
Noncontrolling interests |
|
12.4 |
|
14.2 |
|
2.2 | |||
Total stockholders equity |
|
7,176.7 |
|
6,757.6 |
|
8,176.0 | |||
Total Liabilities and Stockholders Equity |
|
$ |
59,183.3 |
|
$ |
57,947.6 |
|
$ |
59,594.0 |
See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Six Months Ended April 30, 2016 and 2015
(In millions of dollars) Unaudited
|
|
2016 |
|
2015 | ||
Cash Flows from Operating Activities |
|
|
|
| ||
Net income |
|
$ |
748.5 |
|
$ |
1,077.7 |
Adjustments to reconcile net income to net cash used for operating activities: |
|
|
|
| ||
Provision for credit losses |
|
35.1 |
|
15.1 | ||
Provision for depreciation and amortization |
|
761.8 |
|
682.9 | ||
Impairment charges |
|
49.7 |
|
| ||
Share-based compensation expense |
|
32.0 |
|
28.7 | ||
Undistributed earnings of unconsolidated affiliates |
|
5.3 |
|
8.8 | ||
Provision for deferred income taxes |
|
93.3 |
|
117.8 | ||
Changes in assets and liabilities: |
|
|
|
| ||
Trade, notes and financing receivables related to sales |
|
(1,311.5) |
|
(860.8) | ||
Insurance receivables |
|
|
|
333.4 | ||
Inventories |
|
(405.8) |
|
(932.9) | ||
Accounts payable and accrued expenses |
|
(367.8) |
|
(698.3) | ||
Accrued income taxes payable/receivable |
|
12.0 |
|
(76.3) | ||
Retirement benefits |
|
91.1 |
|
186.6 | ||
Other |
|
(56.1) |
|
(37.4) | ||
Net cash used for operating activities |
|
(312.4) |
|
(154.7) | ||
|
|
|
|
| ||
Cash Flows from Investing Activities |
|
|
|
| ||
Collections of receivables (excluding receivables related to sales) |
|
8,120.6 |
|
8,332.4 | ||
Proceeds from maturities and sales of marketable securities |
|
71.4 |
|
791.9 | ||
Proceeds from sales of equipment on operating leases |
|
630.1 |
|
552.3 | ||
Proceeds from sale of business, net of cash sold |
|
|
|
148.8 | ||
Cost of receivables acquired (excluding receivables related to sales) |
|
(6,872.9) |
|
(7,426.1) | ||
Purchases of marketable securities |
|
(112.2) |
|
(33.9) | ||
Purchases of property and equipment |
|
(232.6) |
|
(324.3) | ||
Cost of equipment on operating leases acquired |
|
(1,204.1) |
|
(830.2) | ||
Acquisitions of businesses, net of cash acquired |
|
(198.9) |
|
| ||
Other |
|
8.6 |
|
(58.9) | ||
Net cash provided by investing activities |
|
210.0 |
|
1,152.0 | ||
|
|
|
|
| ||
Cash Flows from Financing Activities |
|
|
|
| ||
Increase in total short-term borrowings |
|
38.3 |
|
1,147.0 | ||
Proceeds from long-term borrowings |
|
3,276.6 |
|
2,512.2 | ||
Payments of long-term borrowings |
|
(2,686.6) |
|
(2,453.3) | ||
Proceeds from issuance of common stock |
|
11.1 |
|
86.1 | ||
Repurchases of common stock |
|
(205.4) |
|
(1,173.9) | ||
Dividends paid |
|
(383.2) |
|
(415.8) | ||
Excess tax benefits from share-based compensation |
|
2.7 |
|
11.7 | ||
Other |
|
(32.6) |
|
(39.1) | ||
Net cash provided by (used for) financing activities |
|
20.9 |
|
(325.1) | ||
|
|
|
|
| ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
52.5 |
|
(103.8) | ||
|
|
|
|
| ||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
(29.0) |
|
568.4 | ||
Cash and Cash Equivalents at Beginning of Period |
|
4,162.2 |
|
3,787.0 | ||
Cash and Cash Equivalents at End of Period |
|
$ |
4,133.2 |
|
$ |
4,355.4 |
See Condensed Notes to Interim Consolidated Financial Statements.
Condensed Notes to Interim Consolidated Financial Statements (Unaudited)
(1) Dividends declared and paid on a per share basis were as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
April 30 |
|
April 30 |
| ||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dividends declared |
|
$ |
.60 |
|
$ |
.60 |
|
$ |
1.20 |
|
$ |
1.20 |
|
Dividends paid |
|
$ |
.60 |
|
$ |
.60 |
|
$ |
1.20 |
|
$ |
1.20 |
|
(2) 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.
(3) The consolidated financial statements represent the consolidation of all Deere & Companys subsidiaries. In the supplemental consolidating data in Note 4 to the financial statements, Equipment Operations include the Companys agriculture and turf operations and construction and forestry operations with Financial Services reflected on the equity basis.
(4) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENT OF INCOME
For the Three Months Ended April 30, 2016 and 2015
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES | ||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 | ||||
Net Sales and Revenues |
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
7,106.6 |
|
$ |
7,398.5 |
|
|
|
| ||
Finance and interest income |
|
12.9 |
|
17.5 |
|
$ |
662.9 |
|
$ |
623.6 | ||
Other income |
|
139.9 |
|
150.3 |
|
68.2 |
|
85.3 | ||||
Total |
|
7,259.4 |
|
7,566.3 |
|
731.1 |
|
708.9 | ||||
|
|
|
|
|
|
|
|
| ||||
Costs and Expenses |
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
5,531.5 |
|
5,694.7 |
|
|
|
| ||||
Research and development expenses |
|
345.0 |
|
341.1 |
|
|
|
| ||||
Selling, administrative and general expenses |
|
588.5 |
|
620.4 |
|
128.0 |
|
121.8 | ||||
Interest expense |
|
67.7 |
|
67.3 |
|
125.9 |
|
109.5 | ||||
Interest compensation to Financial Services |
|
61.8 |
|
53.4 |
|
|
|
| ||||
Other operating expenses |
|
91.4 |
|
37.2 |
|
317.4 |
|
212.8 | ||||
Total |
|
6,685.9 |
|
6,814.1 |
|
571.3 |
|
444.1 | ||||
|
|
|
|
|
|
|
|
| ||||
Income of Consolidated Group before Income Taxes |
|
573.5 |
|
752.2 |
|
159.8 |
|
264.8 | ||||
Provision for income taxes |
|
180.4 |
|
228.6 |
|
57.4 |
|
95.4 | ||||
Income of Consolidated Group |
|
393.1 |
|
523.6 |
|
102.4 |
|
169.4 | ||||
|
|
|
|
|
|
|
|
| ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
| ||||
Financial Services |
|
102.6 |
|
169.8 |
|
.2 |
|
.4 | ||||
Other |
|
(1.0) |
|
(2.6) |
|
|
|
| ||||
Total |
|
101.6 |
|
167.2 |
|
.2 |
|
.4 | ||||
Net Income |
|
494.7 |
|
690.8 |
|
102.6 |
|
169.8 | ||||
Less: Net income (loss) attributable to noncontrolling interests |
|
(.7) |
|
.3 |
|
|
|
| ||||
Net Income Attributable to Deere & Company |
|
$ |
495.4 |
|
$ |
690.5 |
|
$ |
102.6 |
|
$ |
169.8 |
* Deere & Company with Financial Services on the equity basis.
The supplemental consolidating data is presented for informational purposes. Transactions between the Equipment Operations and Financial Services have been eliminated to arrive at the consolidated financial statements.
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF INCOME
For the Six Months Ended April 30, 2016 and 2015
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES | ||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 | ||||
Net Sales and Revenues |
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
11,875.8 |
|
$ |
13,003.6 |
|
|
|
| ||
Finance and interest income |
|
30.8 |
|
38.0 |
|
$ |
1,297.9 |
|
$ |
1,256.6 | ||
Other income |
|
280.0 |
|
310.4 |
|
116.3 |
|
150.2 | ||||
Total |
|
12,186.6 |
|
13,352.0 |
|
1,414.2 |
|
1,406.8 | ||||
|
|
|
|
|
|
|
|
| ||||
Costs and Expenses |
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
9,372.1 |
|
10,115.8 |
|
|
|
| ||||
Research and development expenses |
|
664.3 |
|
674.3 |
|
|
|
| ||||
Selling, administrative and general expenses |
|
1,069.6 |
|
1,160.6 |
|
242.0 |
|
243.0 | ||||
Interest expense |
|
129.8 |
|
138.4 |
|
245.9 |
|
232.4 | ||||
Interest compensation to Financial Services |
|
106.6 |
|
99.4 |
|
|
|
| ||||
Other operating expenses |
|
112.5 |
|
76.2 |
|
573.5 |
|
434.0 | ||||
Total |
|
11,454.9 |
|
12,264.7 |
|
1,061.4 |
|
909.4 | ||||
|
|
|
|
|
|
|
|
| ||||
Income of Consolidated Group before Income Taxes |
|
731.7 |
|
1,087.3 |
|
352.8 |
|
497.4 | ||||
Provision for income taxes |
|
211.5 |
|
323.0 |
|
121.8 |
|
171.6 | ||||
Income of Consolidated Group |
|
520.2 |
|
764.3 |
|
231.0 |
|
325.8 | ||||
|
|
|
|
|
|
|
|
| ||||
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
| ||||
Financial Services |
|
232.0 |
|
326.6 |
|
1.0 |
|
.8 | ||||
Other |
|
(3.7) |
|
(13.2) |
|
|
|
| ||||
Total |
|
228.3 |
|
313.4 |
|
1.0 |
|
.8 | ||||
Net Income |
|
748.5 |
|
1,077.7 |
|
232.0 |
|
326.6 | ||||
Less: Net income (loss) attributable to noncontrolling interests |
|
(1.3) |
|
.5 |
|
|
|
| ||||
Net Income Attributable to Deere & Company |
|
$ |
749.8 |
|
$ |
1,077.2 |
|
$ |
232.0 |
|
$ |
326.6 |
* Deere & Company with Financial Services on the equity basis.
The supplemental consolidating data is presented for informational purposes. Transactions between the Equipment Operations and Financial Services have been eliminated to arrive at the consolidated financial statements.
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES | ||||||||||||||
|
|
April 30 |
|
October 31 |
|
April 30 |
|
April 30 |
|
October 31 |
|
April 30 | ||||||
|
|
2016 |
|
2015 |
|
2015 |
|
2016 |
|
2015 |
|
2015 | ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
2,790.8 |
|
$ |
2,900.0 |
|
$ |
3,162.9 |
|
$ |
1,342.4 |
|
$ |
1,262.2 |
|
$ |
1,192.5 |
Marketable securities |
|
71.2 |
|
47.7 |
|
|
|
404.3 |
|
389.7 |
|
392.9 | ||||||
Receivables from unconsolidated subsidiaries and affiliates |
|
2,226.2 |
|
2,428.7 |
|
2,558.0 |
|
|
|
|
|
| ||||||
Trade accounts and notes receivable - net |
|
631.2 |
|
485.2 |
|
681.3 |
|
5,529.4 |
|
3,553.1 |
|
5,160.8 | ||||||
Financing receivables - net |
|
.7 |
|
.9 |
|
8.7 |
|
23,414.6 |
|
24,808.1 |
|
24,737.1 | ||||||
Financing receivables securitized - net |
|
|
|
|
|
|
|
4,734.7 |
|
4,834.6 |
|
4,741.1 | ||||||
Other receivables |
|
778.2 |
|
849.5 |
|
780.7 |
|
130.8 |
|
152.9 |
|
122.5 | ||||||
Equipment on operating leases - net |
|
|
|
|
|
|
|
5,455.5 |
|
4,970.4 |
|
4,195.2 | ||||||
Inventories |
|
4,061.0 |
|
3,817.0 |
|
4,624.2 |
|
|
|
|
|
| ||||||
Property and equipment - net |
|
5,026.2 |
|
5,126.2 |
|
5,191.7 |
|
53.5 |
|
55.3 |
|
53.4 | ||||||
Investments in unconsolidated subsidiaries and affiliates |
|
4,774.7 |
|
4,817.6 |
|
4,895.5 |
|
11.9 |
|
10.5 |
|
10.5 | ||||||
Goodwill |
|
835.0 |
|
726.0 |
|
737.0 |
|
|
|
|
|
| ||||||
Other intangible assets - net |
|
120.5 |
|
63.6 |
|
60.4 |
|
|
|
|
|
| ||||||
Retirement benefits |
|
280.9 |
|
211.9 |
|
314.3 |
|
23.2 |
|
25.0 |
|
29.0 | ||||||
Deferred income taxes |
|
3,185.7 |
|
3,092.0 |
|
2,991.2 |
|
70.4 |
|
67.9 |
|
62.9 | ||||||
Other assets |
|
883.0 |
|
807.3 |
|
889.9 |
|
932.3 |
|
779.1 |
|
700.2 | ||||||
Total Assets |
|
$ |
25,665.3 |
|
$ |
25,373.6 |
|
$ |
26,895.8 |
|
$ |
42,103.0 |
|
$ |
40,908.8 |
|
$ |
41,398.1 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Short-term borrowings |
|
$ |
218.7 |
|
$ |
464.3 |
|
$ |
549.6 |
|
$ |
8,357.3 |
|
$ |
7,962.3 |
|
$ |
8,439.4 |
Short-term securitization borrowings |
|
|
|
|
|
|
|
4,641.8 |
|
4,590.0 |
|
4,702.7 | ||||||
Payables to unconsolidated subsidiaries and affiliates |
|
109.5 |
|
80.6 |
|
130.1 |
|
2,144.9 |
|
2,395.4 |
|
2,511.6 | ||||||
Accounts payable and accrued expenses |
|
6,674.5 |
|
6,801.2 |
|
6,964.0 |
|
1,603.7 |
|
1,511.2 |
|
1,453.5 | ||||||
Deferred income taxes |
|
102.7 |
|
86.8 |
|
79.3 |
|
651.8 |
|
466.6 |
|
464.8 | ||||||
Long-term borrowings |
|
4,584.0 |
|
4,460.6 |
|
4,488.9 |
|
20,064.0 |
|
19,372.2 |
|
19,133.9 | ||||||
Retirement benefits and other liabilities |
|
6,785.2 |
|
6,722.5 |
|
6,507.9 |
|
89.6 |
|
86.4 |
|
85.5 | ||||||
Total liabilities |
|
18,474.6 |
|
18,616.0 |
|
18,719.8 |
|
37,553.1 |
|
36,384.1 |
|
36,791.4 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Redeemable noncontrolling interest |
|
14.0 |
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total Deere & Company stockholders equity |
|
7,164.3 |
|
6,743.4 |
|
8,173.8 |
|
4,549.9 |
|
4,524.7 |
|
4,606.7 | ||||||
Noncontrolling interests |
|
12.4 |
|
14.2 |
|
2.2 |
|
|
|
|
|
| ||||||
Total stockholders equity |
|
7,176.7 |
|
6,757.6 |
|
8,176.0 |
|
4,549.9 |
|
4,524.7 |
|
4,606.7 | ||||||
Total Liabilities and Stockholders Equity |
|
$ |
25,665.3 |
|
$ |
25,373.6 |
|
$ |
26,895.8 |
|
$ |
42,103.0 |
|
$ |
40,908.8 |
|
$ |
41,398.1 |
* Deere & Company with Financial Services on the equity basis.
The supplemental consolidating data is presented for informational purposes. Transactions between the Equipment Operations and Financial Services have been eliminated to arrive at the consolidated financial statements.
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Six Months Ended April 30, 2016 and 2015
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES | ||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 | ||||
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
748.5 |
|
$ |
1,077.7 |
|
$ |
232.0 |
|
$ |
326.6 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||
Provision for credit losses |
|
4.0 |
|
.3 |
|
31.1 |
|
14.8 | ||||
Provision for depreciation and amortization |
|
410.2 |
|
409.8 |
|
399.4 |
|
328.4 | ||||
Impairment charges |
|
|
|
|
|
49.7 |
|
| ||||
Undistributed earnings of unconsolidated subsidiaries and affiliates |
|
51.5 |
|
102.6 |
|
(1.0) |
|
(.8) | ||||
Provision (credit) for deferred income taxes |
|
(87.3) |
|
(3.0) |
|
180.6 |
|
120.8 | ||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
| ||||
Trade receivables |
|
(142.2) |
|
(33.2) |
|
|
|
| ||||
Insurance receivables |
|
|
|
|
|
|
|
333.4 | ||||
Inventories |
|
(136.7) |
|
(656.8) |
|
|
|
| ||||
Accounts payable and accrued expenses |
|
(107.9) |
|
(219.2) |
|
14.7 |
|
(336.8) | ||||
Accrued income taxes payable/receivable |
|
.2 |
|
(82.1) |
|
11.8 |
|
5.8 | ||||
Retirement benefits |
|
86.8 |
|
179.3 |
|
4.3 |
|
7.3 | ||||
Other |
|
(18.2) |
|
75.8 |
|
40.7 |
|
(42.7) | ||||
Net cash provided by operating activities |
|
808.9 |
|
851.2 |
|
963.3 |
|
756.8 | ||||
|
|
|
|
|
|
|
|
| ||||
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
| ||||
Collections of receivables (excluding trade and wholesale) |
|
|
|
|
|
8,699.2 |
|
8,998.2 | ||||
Proceeds from maturities and sales of marketable securities |
|
31.3 |
|
700.0 |
|
40.1 |
|
91.9 | ||||
Proceeds from sales of equipment on operating leases |
|
|
|
|
|
630.1 |
|
552.3 | ||||
Proceeds from sale of business, net of cash sold |
|
|
|
|
|
|
|
148.8 | ||||
Cost of receivables acquired (excluding trade and wholesale) |
|
|
|
|
|
(7,343.6) |
|
(7,977.1) | ||||
Purchases of marketable securities |
|
(63.1) |
|
|
|
(49.1) |
|
(33.9) | ||||
Purchases of property and equipment |
|
(231.7) |
|
(323.2) |
|
(.9) |
|
(1.1) | ||||
Cost of equipment on operating leases acquired |
|
|
|
|
|
(1,567.7) |
|
(1,203.4) | ||||
Increase in trade and wholesale receivables |
|
|
|
|
|
(1,547.0) |
|
(1,084.7) | ||||
Acquisitions of businesses, net of cash acquired |
|
(198.9) |
|
|
|
|
|
| ||||
Other |
|
(70.9) |
|
(51.1) |
|
53.6 |
|
(36.0) | ||||
Net cash provided by (used for) investing activities |
|
(533.3) |
|
325.7 |
|
(1,085.3) |
|
(545.0) | ||||
|
|
|
|
|
|
|
|
| ||||
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
| ||||
Increase (decrease) in total short-term borrowings |
|
(193.4) |
|
84.6 |
|
231.7 |
|
1,062.4 | ||||
Change in intercompany receivables/payables |
|
290.8 |
|
960.7 |
|
(290.8) |
|
(960.7) | ||||
Proceeds from long-term borrowings |
|
133.5 |
|
7.0 |
|
3,143.1 |
|
2,505.2 | ||||
Payments of long-term borrowings |
|
(67.7) |
|
(39.8) |
|
(2,618.9) |
|
(2,413.5) | ||||
Proceeds from issuance of common stock |
|
11.1 |
|
86.1 |
|
|
|
| ||||
Repurchases of common stock |
|
(205.4) |
|
(1,173.9) |
|
|
|
| ||||
Dividends paid |
|
(383.2) |
|
(415.8) |
|
(277.1) |
|
(419.6) | ||||
Excess tax benefits from share-based compensation |
|
2.7 |
|
11.7 |
|
|
|
| ||||
Other |
|
(14.4) |
|
(24.1) |
|
2.9 |
|
13.2 | ||||
Net cash provided by (used for) financing activities |
|
(426.0) |
|
(503.5) |
|
190.9 |
|
(213.0) | ||||
|
|
|
|
|
|
|
|
| ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
41.2 |
|
(79.7) |
|
11.3 |
|
(24.1) | ||||
|
|
|
|
|
|
|
|
| ||||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
(109.2) |
|
593.7 |
|
80.2 |
|
(25.3) | ||||
Cash and Cash Equivalents at Beginning of Period |
|
2,900.0 |
|
2,569.2 |
|
1,262.2 |
|
1,217.8 | ||||
Cash and Cash Equivalents at End of Period |
|
$ |
2,790.8 |
|
$ |
3,162.9 |
|
$ |
1,342.4 |
|
$ |
1,192.5 |
* Deere & Company with Financial Services on the equity basis.
The supplemental consolidating data is presented for informational purposes. Transactions between the Equipment Operations and Financial Services have been eliminated to arrive at the consolidated financial statements.
|
Deere & Company Other Financial Information |
(Furnished herewith) |
For the Six Months Ended April 30, |
|
Equipment Operations |
|
Agriculture and Turf |
|
Construction and Forestry | ||||||||||||||||
Dollars in millions |
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
| ||||||
Net Sales |
|
|
$ |
11,876 |
|
$ |
13,004 |
|
|
$ |
9,341 |
|
$ |
9,847 |
|
|
$ |
2,535 |
|
$ |
3,157 |
|
Average Identifiable Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
With Inventories at LIFO |
|
|
$ |
11,951 |
|
$ |
12,799 |
|
|
$ |
8,776 |
|
$ |
9,358 |
|
|
$ |
3,175 |
|
$ |
3,441 |
|
With Inventories at Standard Cost |
|
|
$ |
13,216 |
|
$ |
14,156 |
|
|
$ |
9,814 |
|
$ |
10,484 |
|
|
$ |
3,402 |
|
$ |
3,672 |
|
Operating Profit |
|
|
$ |
902 |
|
$ |
1,242 |
|
|
$ |
759 |
|
$ |
907 |
|
|
$ |
143 |
|
$ |
335 |
|
Percent of Net Sales |
|
|
7.6 |
% |
9.6 |
% |
|
8.1 |
% |
9.2 |
% |
|
5.6 |
% |
10.6 |
% | ||||||
Operating Return on Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
With Inventories at LIFO |
|
|
7.5 |
% |
9.7 |
% |
|
8.6 |
% |
9.7 |
% |
|
4.5 |
% |
9.7 |
% | ||||||
With Inventories at Standard Cost |
|
|
6.8 |
% |
8.8 |
% |
|
7.7 |
% |
8.7 |
% |
|
4.2 |
% |
9.1 |
% | ||||||
SVA Cost of Assets |
|
|
$ |
(793 |
) |
$ |
(850 |
) |
|
$ |
(589 |
) |
$ |
(630 |
) |
|
$ |
(204 |
) |
$ |
(220 |
) |
SVA |
|
|
$ |
109 |
|
$ |
392 |
|
|
$ |
170 |
|
$ |
277 |
|
|
$ |
(61 |
) |
$ |
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended April 30, |
|
Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Dollars in millions |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net Income Attributable to Deere & Company |
|
|
$ |
232 |
|
$ |
327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Equity |
|
|
$ |
4,462 |
|
$ |
4,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Equity |
|
|
|
5.2 |
% |
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit |
|
|
$ |
354 |
|
$ |
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Equity |
|
|
$ |
4,462 |
|
$ |
4,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Equity |
|
|
$ |
(340 |
) |
$ |
(358 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVA |
|
|
$ |
14 |
|
$ |
140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 segments 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 Companys investment in the asset. The Financial Services segment is assessed an annual pretax cost of approximately 15 percent of the segments 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. |
2nd Quarter 2016 Earnings Conference Call 2 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the companys plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acceptance and other factors that impact our businesses and customers. They also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP). Words such as forecast, projection, outlook, prospects, expected, estimated, will, plan, anticipate, intend, believe, or other similar words or phrases often identify forward-looking statements. Actual results may differ materially from those projected in these forward-looking statements based on a number of factors and uncertainties. Additional information concerning factors that could cause actual results to differ materially is contained in the companys most recent Form 8-K and periodic report filed with the U.S. Securities and Exchange Commission, and is incorporated by reference herein. Investors should refer to and consider the incorporated information on risks and uncertainties in addition to the information presented here. Investors should consider non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. 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. The call and accompanying materials are not an offer to sell or a solicitation of offers to buy any of the companys securities. 25
2nd Quarter 2016 Earnings Conference Call 3 Second Quarter Overview (in millions of dollars except per share amounts) Q2 2016 Q2 2015 Change Net Sales and Revenues $7,875 $8,171 -4% Net Sales $7,107 $7,399 -4% Net Income Attributable to Deere & Company $495 $690 -28% Diluted EPS $1.56 $2.03 -23% 26
2nd Quarter 2016 Earnings Conference Call 4 Second Quarter Overview Net Sales Equipment operations net sales: Down 4% in Q2 2016 vs. Q2 2015 Price realization: +1 point Currency translation: (2) points 27
2nd Quarter 2016 Earnings Conference Call 5 Worldwide Agriculture & Turf Second Quarter Overview *Q2 2016 operating profit impacted by: (in millions of dollars) Q2 2016 Q2 2015 Change Net Sales $5,742 $5,766 0% Operating Profit* $614 $639 -4% Favorable Unfavorable Price Realization Foreign-Currency Exchange Production Costs Shipment Volumes Selling, Administrative & General Expenses Product Mix 28
2nd Quarter 2016 Earnings Conference Call U.S. Farm Cash Receipts Source: 2000 2014: USDA 9 February 2016 2015F 2016F: Deere & Company Forecast as of 20 May 2016 6 29 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F $ Billions Crops Livestock Government Payments
2nd Quarter 2016 Earnings Conference Call 7 World Farm Fundamentals Global Stocks-to-Use Ratios Source: USDA 10 May 2016 Cotton Wheat Corn Soybeans 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 1995 1998 2001 2004 2007 2010 2013 2016P
2nd Quarter 2016 Earnings Conference Call 8 Deere & Company Forecast as of 20 May 2016 Economic Update EU 28 Fiscal 2016 Continued modest economic growth Arable income remains under pressure Continued weakness in dairy sector Beef prices remain solid, pork prices at low levels 31
2nd Quarter 2016 Earnings Conference Call 9 Deere & Company Forecast as of 20 May 2016 Economic Update Other Selected Markets Fiscal 2016 China Slower economic growth continues Value of agricultural production expected to be stable Uncertainty due to recent policy announcements India Economy growing, foreign investment returning Government continues to support the agricultural sector Value of agricultural production expected to increase Above average monsoon forecasted, following two consecutive below normal seasons 32
2nd Quarter 2016 Earnings Conference Call 10 Crop Value of Agricultural Production Brazil Source: IHS Global Insight, May 2016 Crop Value of Agricultural Production Expected to decrease ~ 2% in 2016 over prior season 2015 Mix by Crop US$ Billions 33 $0 $20 $40 $60 $80 $100 $120 2004 2006 2008 2010 2012 2014 2016F 44% 29% 17% 10% Soybeans Sugarcane Corn Other Grains
Eligible Finance Rates for Ag Equipment Brazil 2nd Quarter 2016 Earnings Conference Call 11 Source: ABIMAQ (Brazilian Association of Machinery and Equipment) and BNDES PSI-FINAME was the key credit line for machinery acquisition from 2011 2014; Moderfrota is currently the most attractive credit line * Moderfrota suspended September November 2015 ** Rate change effective July 2016 34 Farmers with Annual Revenues <R$90M Farmers with Annual Revenues >R$90M 2011 2012 2013 2014 2015* 2016** 12% 10% 8% 6% 4% 2% 0% All Farmers
2nd Quarter 2016 Earnings Conference Call 12 Agriculture & Turf Retail Sales Industry Outlook Fiscal 2016 * If left blank no change between Previous Forecast and Current Forecast Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 2016 Forecast Previous Forecast* U.S. and Canada Ag Down 15-20% EU 28 Ag Flat to down 5% South America Ag (Tractors and Combines) Down 15-20% Down 10-15% Asia Ag Flat to down slightly U.S. and Canada Turf and Utility Equipment Flat to up 5% 35
2nd Quarter 2016 Earnings Conference Call 13 Worldwide Agriculture & Turf Deere & Company Outlook Fiscal Year 2016 Forecast Net sales: Down ~ 8% Currency translation: ~ (2) points Previous forecast: Down ~ 10% Currency translation: ~ (4) points Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 36
2nd Quarter 2016 Earnings Conference Call 14 Worldwide Construction & Forestry Second Quarter Overview (in millions of dollars) Q2 2016 Q2 2015 Change Net Sales $1,365 $1,633 -16% Operating Profit* $74 $189 -61% *Q2 2016 operating profit impacted by: Favorable Unfavorable Production Costs Shipment Volumes Selling, Administrative & General Expenses Sales-Incentive Costs Product Mix 37
U.S. Economic Indicators 2016 Forecast Previous Forecast GDP Growth (annual percentage rate)* +2.1% +2.7% Housing Starts (thousands) 1,161 1,220 Total Construction Investment (annual percentage rate)* +3.2% +3.9% Government Construction Investment (annual percentage rate)* +4.1% +3.8% 2nd Quarter 2016 Earnings Conference Call 15 Worldwide Construction & Forestry Deere & Company Outlook Source: IHS Global Insight, Calendar Year Estimates April 2016 * Change from prior year in real dollars Fiscal Year 2016 Forecast Net sales: Down ~ 13% Currency translation: ~ (1) point Previous forecast: Down ~ 11% Currency translation: ~ (2) points Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 38
2nd Quarter 2016 Earnings Conference Call 16 Worldwide Financial Services Credit Loss History Provision for Credit Losses / Average Owned Portfolio 0.17% 15 Year Average * Annualized provision for credit losses as of 30 April 2016 39 0.00% 0.50% 1.00% 1.50% 2.00% 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016* 10 Year Average
2nd Quarter 2016 Earnings Conference Call 17 Worldwide Financial Services Second Quarter 2016 Net income attributable to Deere & Company $103 million in Q2 2016 vs. $170 million in Q2 2015 Fiscal Year 2016 Forecast Net income attributable to Deere & Company of ~ $480 million Previous forecast: ~ $525 million Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 40
2nd Quarter 2016 Earnings Conference Call 18 Consolidated Trade Receivables & Inventory (in millions of dollars) Q2 2016* Actual 2016** Forecast 2016** Previous Forecast A&T $72 $100 $250 C&F $453 $300 $300 Total, as reported $381 $400 $550 Total, constant exchange $242 $475 $475 * Change at 30 April 2016 vs. 30 April 2015 ** Forecasted change at 31 October 2016 vs. 31 October 2015 Note: Before the sale of receivables to John Deere Financial Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 41
2nd Quarter 2016 Earnings Conference Call 19 Cost of Sales as a Percent of Net Sales Equipment Operations Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) Second Quarter 2016 78% Fiscal Year 2016 Forecast ~ 79% No change from previous forecast 42
2nd Quarter 2016 Earnings Conference Call 20 Research & Development Expense Equipment Operations Second Quarter 2016 Up 1% vs. Q2 2015 Fiscal Year 2016 Forecast Down ~ 1% vs. FY 2015 Currency translation: ~ (1) point Previous forecast: Down ~ 3% vs. FY 2015 Currency translation: ~ (1) point Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 43
2nd Quarter 2016 Earnings Conference Call 21 Selling, Administrative & General Expense Equipment Operations Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) Second Quarter 2016 Down 5% vs. Q2 2015 Currency translation: ~ (2) points Pension/OPEB: ~ (2) points Incentive compensation: ~ (1) point 44
2nd Quarter 2016 Earnings Conference Call 22 Selling, Administrative & General Expense Equipment Operations Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) Fiscal Year 2016 Forecast Down ~ 4% vs. FY 2015 Incentive compensation: ~ (3) points Currency translation: ~ (2) points Pension/OPEB: ~ (2) points Previous forecast: Down ~ 4% vs. FY 2015 Currency translation: ~ (3) points Pension/OPEB: ~ (2) points Incentive compensation: ~ (1) point 45
2nd Quarter 2016 Earnings Conference Call 23 Pension and OPEB Expense Second Quarter 2016 Down $50 million vs. Q2 2015 Fiscal Year 2016 Forecast Down ~ $200 million vs. FY 2015 No change from previous forecast Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 46
2nd Quarter 2016 Earnings Conference Call 24 Income Taxes Equipment Operations Second Quarter 2016 Effective tax rate: 31% Fiscal Year 2016 Forecast Effective tax rate: 31-33% Previous forecast: 33-35% Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 47
2nd Quarter 2016 Earnings Conference Call 25 Strong Operating Performance Equipment Operations Fiscal Year Cash Flows from Operations * No change from previous forecast Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) $ Billions ~ $2.1 48
2nd Quarter 2016 Earnings Conference Call 26 2016 Company Outlook Third Quarter 2016 Forecast Net sales: Down ~ 12% vs. Q3 2015 Price realization: ~ +2 points Currency translation: ~ (1) point Deere & Company Forecast as of 20 May 2016 49
2nd Quarter 2016 Earnings Conference Call 27 2016 Company Outlook Fiscal Year 2016 Forecast Net sales: Down ~ 9% vs. FY 2015 Price realization: ~ +1 point Currency translation: ~ (2) points Previous forecast: Down ~ 10% vs. FY 2015 Price realization: ~ +2 points Currency translation: ~ (3) points Net income attributable to Deere & Company of ~ $1.2 billion Previous forecast ~ $1.3 billion Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 50
2nd Quarter 2016 Earnings Conference Call 28 Appendix 51
2nd Quarter 2016 Earnings Conference Call 29 The John Deere Strategy 52
Deere Use-of-Cash Priorities 2nd Quarter 2016 Earnings Conference Call 30 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 Committed to A Rating Cash from Operations Fund Operating and Growth Needs Common Stock Dividend Share Repurchase 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 and repurchase is viewed as value-enhancing 53
2nd Quarter 2016 Earnings Conference Call 31 Sources and Uses of Cash Fiscal 20042015 Equipment Operations Source: Deere & Company SEC filings = Source of Cash = Use of Cash (1) Other includes proceeds from maturities and sales of marketable securities and purchases of marketable securities and reconciliation for non-cash items including excess tax benefits from share-based compensation and the effect of exchange rates on cash and cash equivalents (1) $ Millions $2,900 ~65% of cash from operations returned to shareholders 54
2nd Quarter 2016 Earnings Conference Call Deere Quarterly Dividends Declared* Q1 2003 Q2 2016 * Adjusted for 2 for 1 stock split on 26 November 2007 ** See revised John Deere Strategy in Appendix 32 Dividend raised 114% since launch of the revised John Deere Strategy in 2010** 55 $0.11 $0.14 $0.16 $0.20 $0.22 $0.25 $0.28 $0.30 $0.35 $0.41 $0.46 $0.51 $0.60 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2nd Quarter 2016 Earnings Conference Call 33 Share Repurchase As Part of Publicly Announced Plans Cumulative cost of repurchases 2004-2Q2016: ~ $16.4 billion Amount remaining on December 2013 authorization of $8 billion: ~ $3.3 billion 30 April 2016 period ended basic shares: ~ 314.3 million 2Q2016 average diluted shares: ~ 316.5 million Shares repurchased 2004-2Q2016: ~ 245.0 million Average repurchase price 2004-2Q2016: $66.96 * All shares adjusted for two-for-one stock split effective 26 November 2007 56 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD $ Billions Shares Repurchased* (in millions) ~37% Net Share Reduction 2004 - 2Q2016 Shares Repurchased Amount Spent
2nd Quarter 2016 Earnings Conference Call 34 Other Information Equipment Operations Fiscal Year 2016 Forecast Capital Expenditures: ~ $725 million Previous forecast: ~ $775 million Depreciation and Amortization: ~ $825 million Previous forecast: ~ $800 million Pension/OPEB Contributions: ~ $100 million Previous forecast: ~ $60 million Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) 57
2nd Quarter 2016 Earnings Conference Call 35 U.S. Farm Commodity Prices Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) (dollars per bushel, except cotton, which is dollars per pound) 2014/15 2015/16 Estimate Previous 2015/16 2016/17 Projection Corn $3.70 $3.60 $3.60 $3.35 Wheat $5.99 $4.90 $5.00 $4.10 Soybeans $10.10 $8.85 $8.80 $9.10 Cotton $0.61 $0.58 $0.60 $0.57 58
U.S. Farm Commodity Prices 2nd Quarter 2016 Earnings Conference Call 36 Source: USDA 59 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Cotton - Dollars per Pound Dollars per Bushel Wheat Corn Soybeans Cotton
2nd Quarter 2016 Earnings Conference Call 37 U.S. Acres Planted and Crop Yields Deere & Company Forecast as of 20 May 2016 (Yield in bushels per acre, except cotton, which is pounds per acre) Acres Planted (millions) Yield 2015/16 Estimate 2016/17 Projection 2015/16 Estimate 2016/17 Projection Corn 88.0 93.6 168.4 168.0 Wheat 54.6 49.6 43.6 46.7 Soybeans 82.7 82.2 48.0 46.7 Cotton 8.6 9.6 766 807 60
2nd Quarter 2016 Earnings Conference Call 38 U.S. Farm Cash Receipts Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) (in billions of dollars) 2014 2015 Forecast Previous 2015 2016 Forecast Previous 2016 Crops $209.3 $191.3 $191.3 $184.1 $189.7 Livestock $212.2 $185.7 $185.7 $177.1 $177.7 Government Payments $9.8 $10.6 $10.6 $13.9 $13.9 Total Cash Receipts $431.3 $387.6 $387.6 $375.1 $381.3 61
2nd Quarter 2016 Earnings Conference Call 39 U.S. Net Farm Cash Income Deere & Company Forecast as of 20 May 2016 (Previous Forecast as of 19 February 2016) (in billions of dollars) 2014 2015 Forecast Previous 2015 2016 Forecast Previous 2016 Total Cash Receipts $431.3 $387.6 $387.6 $375.1 $381.3 Other Farm-Related Income $35.4 $33.8 $33.8 $34.1 $34.3 Gross Cash Income $466.7 $421.4 $421.4 $409.2 $415.6 Cash Expenses ($338.6) ($328.2) ($328.2) ($322.0) ($324.8) Net Cash Income $128.1 $93.2 $93.2 $87.2 $90.8 62
2nd Quarter 2016 Earnings Conference Call U.S. Farm Balance Sheet Source: 1972 2014: USDA 9 February 2016 2015F 2016F: Deere & Company Forecast as of 20 May 2016 40 63 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F $ Billions Farm Debt Farm Equity Debt to Equity Ratio (%) Debt to Asset Ratio (%)
2nd Quarter 2016 Earnings Conference Call 41 Retail Sales U.S. and Canada Ag Industry* Deere** 2WD Tractors (< 40 PTO hp) 7% more than the industry 2WD Tractors (40 < 100 PTO hp) 14% in line with the industry 2WD Tractors (100+ PTO hp) 19% less than the industry 4WD Tractors 22% in line with the industry Combines 30% in line with the industry April 2016 Retail Sales and Dealer Inventories * As reported by the Association of Equipment Manufacturers ** As reported to the Association of Equipment Manufacturers *** At 30 April in units as a % of trailing 12 months retail sales, as reported to the Association of Equipment Manufacturers Deere Dealer Inventories*** U.S. and Canada Ag 2016 2015 2WD Tractors (100+ PTO hp) 37% 23% Combines 13% 17% 64
2nd Quarter 2016 Earnings Conference Call 42 April 2016 Retail Sales EU 28 Deere* Tractors single digit Combines double digits U.S. and Canada Deere* Selected Turf & Utility Equipment single digit * Based on internal sales reports U.S. and Canada Construction & Forestry Deere* First-in-the-Dirt single digit Settlements single digit 65
Deeres third quarter 2016 conference call is scheduled for 9:00 a.m. central time on Friday, August 19, 2016 66
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