Deere & Company

11/21/2024 | Press release | Distributed by Public on 11/21/2024 05:02

Deere Reports Net Income of $1.245 Billion for Fourth Quarter, $7.1 Billion for Fiscal Year Form 8 K

Deere Reports Net Income of $1.245 Billion for Fourth Quarter, $7.1 Billion for Fiscal Year

● Results demonstrate solid execution despite ongoing market challenges.
● Full-year 2025 earnings projected to range from $5.0 to $5.5 billion, highlighting improved structural performance.
● Remain committed to making investments that enhance customer productivity and profitability.

MOLINE, Illinois (November 21, 2024) - Deere & Company reported net income of $1.245 billion for the fourth quarter ended October 27, 2024, or $4.55 per share, compared with net income of $2.369 billion, or $8.26 per share, for the quarter ended October 29, 2023. For fiscal-year 2024, net income attributable to Deere & Company was $7.100 billion, or $25.62 per share, compared with $10.166 billion, or $34.63 per share, in fiscal 2023.

Worldwide net sales and revenues decreased 28 percent, to $11.143 billion, for the fourth quarter of fiscal 2024 and decreased 16 percent, to $51.716 billion, for the full year. Net sales were $9.275 billion for the quarter and $44.759 billion for the year, compared with $13.801 billion and $55.565 billion in fiscal 2023, respectively.

"Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment," said John May, chairman and CEO of Deere & Company. "Together with the structural improvements made over the past several years, these adjustments enable us to serve our customers more effectively and achieve strong results across the business cycle."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2025 is forecasted to be in a range of $5.0 billion to $5.5 billion.

"As we navigate ongoing headwinds across our markets, we remain committed to making meaningful investments in our future while deepening our relationships with customers," May continued. "Our team of over 75,000 dedicated employees come to work each day with a singular focus: delivering products and solutions that enhance efficiency and reduce operating costs for our customers. By providing the essential tools they need, we empower our customers to succeed and thrive in an ever-evolving and challenging landscape."

4

Deere & Company

Fourth Quarter

Full Year

$ in millions, except per share amounts

2024

2023

% Change

2024

2023

% Change

Net sales and revenues

$

11,143

$

15,412

-28%

$

51,716

$

61,251

-16%

Net income

$

1,245

$

2,369

-47%

$

7,100

$

10,166

-30%

Fully diluted EPS

$

4.55

$

8.26

$

25.62

$

34.63

Results for the presented periods were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture

Fourth Quarter

$ in millions

2024

2023

% Change

Net sales

$

4,305

$

6,965

-38%

Operating profit

$

657

$

1,836

-64%

Operating margin

15.3%

26.4%

Production and precision agriculture sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs.

Production & Precision Agriculture Operating Profit

Fourth Quarter 2024 Compared to Fourth Quarter 2023

$ in millions

5

Small Agriculture & Turf

Fourth Quarter

$ in millions

2024

2023

% Change

Net sales

$

2,306

$

3,094

-25%

Operating profit

$

234

$

444

-47%

Operating margin

10.1%

14.4%

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes / sales mix and special items described in Note 1, partially offset by price realization and lower warranty expenses.

Small Agriculture & Turf Operating Profit

Fourth Quarter 2024 Compared to Fourth Quarter 2023

$ in millions

6

Construction & Forestry

Fourth Quarter

$ in millions

2024

2023

% Change

Net sales

$

2,664

$

3,742

-29%

Operating profit

$

328

$

516

-36%

Operating margin

12.3%

13.8%

Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs and the special items described in Note 1.

Construction & Forestry Operating Profit

Fourth Quarter 2024 Compared to Fourth Quarter 2023

$ in millions

Financial Services

Fourth Quarter

$ in millions

2024

2023

% Change

Net income

$

173

$

190

-9%

Financial services net income for the quarter decreased due to a higher provision for credit losses, partially offset by income earned on higher average portfolio balances, a reduction in derivative valuation adjustments, and lower SA&G expenses. The results of the current quarter were also affected by the increased valuation allowance on assets held for sale of Banco John Deere S.A. See Note 1 of the financial statements for further details.

7

Industry Outlook for Fiscal 2025

Agriculture & Turf

U.S. & Canada:

Large Ag

Down ~30%

Small Ag & Turf

Down ~10%

Europe

Down 5 to 10%

South America (Tractors & Combines)

Flat

Asia

Down slightly

Construction & Forestry

U.S. & Canada:

Construction Equipment

Down ~10%

Compact Construction Equipment

Down ~5%

Global Forestry

Flat to down 5%

Global Roadbuilding

Flat

Deere Segment Outlook for Fiscal 2025

Currency

Price

$ in millions

Net Sales

Translation

Realization

Production & Precision Ag

Down ~15%

-0.5%

~ +1.0%

Small Ag & Turf

Down ~10%

+0.5%

~ +0.5%

Construction & Forestry

Down 10 to 15%

~ Flat

~ +1.0%

Financial Services

Net Income

~ $750

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook," and "Condensed Notes to Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

● the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, harvest yields, available farm acres, acreage planted, soil conditions, prices for commodities and livestock, input costs, availability of transport for crops as well as adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints; these constraints may impact our customers and dealers, resulting in higher provisions for credit losses and write-offs;
● uncertainty of government policies and actions after recent U.S. elections in respect to global trade, tariffs, trade agreements, and the uncertainty of our ability to sell products internationally based on these actions and policies;
● higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for the company's products and solutions;
● the company's ability to adapt in highly competitive markets;

8

● housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment;
● political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the conflict in the Middle East;
● worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for the company's equipment;
● availability and price of raw materials, components, and whole goods;
● delays or disruptions in the company's supply chain;
● suppliers' and manufacturers' business practices and compliance with applicable laws such as human rights, safety, environmental, and fair wages;
● changes in climate patterns, unfavorable weather events, and natural disasters;
● loss of or challenges to intellectual property rights;
● rationalization, restructuring, relocation, expansion and/or reconfiguration of manufacturing and warehouse facilities;
● the ability to execute business strategies, including the company's Smart Industrial Operating Model and Leap Ambitions;
● the ability to understand and meet customers' changing expectations and demand for the company's products and solutions, including delivery and utilization of precision technology;
● accurately forecasting customer demand for products and services and adequately managing inventory;
● dealer practices and their ability to manage inventory and distribution of the company's products and to provide support and service for precision technology solutions;
● the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes;
● negative claims or publicity that damage the company's reputation or brand;
● the ability to attract, develop, engage, and retain qualified employees;
● the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge;
● labor relations and contracts, including work stoppages and other disruptions;
● security breaches, cybersecurity attacks, technology failures, and other disruptions to the company's information technology infrastructure and products;
● leveraging artificial intelligence and machine learning within the company's business processes;
● changes to governmental communications channels (radio frequency technology);
● changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, human rights, import / export and trade, labor and employment, product liability, telematics, and telecommunications;
● governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
● investigations, claims, lawsuits, or other legal proceedings; and
● warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations as a result of the deficient operation of the company's products.

Further information concerning the company or its businesses, including factors that could materially affect the company's financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

9

DEERE & COMPANY

FOURTH QUARTER 2024 PRESS RELEASE

(In millions of dollars) Unaudited

Three Months Ended

Years Ended

October 27

October 29

%

October 27

October 29

%

2024

2023

Change

2024

2023

Change

Net sales and revenues:

Production & precision ag net sales

$

4,305

$

6,965

-38

$

20,834

$

26,790

-22

Small ag & turf net sales

2,306

3,094

-25

10,969

13,980

-22

Construction & forestry net sales

2,664

3,742

-29

12,956

14,795

-12

Financial services revenues

1,522

1,347

+13

5,782

4,721

+22

Other revenues

346

264

+31

1,175

965

+22

Total net sales and revenues

$

11,143

$

15,412

-28

$

51,716

$

61,251

-16

Operating profit: *

Production & precision ag

$

657

$

1,836

-64

$

4,514

$

6,996

-35

Small ag & turf

234

444

-47

1,627

2,472

-34

Construction & forestry

328

516

-36

2,009

2,695

-25

Financial services

231

229

+1

889

795

+12

Total operating profit

1,450

3,025

-52

9,039

12,958

-30

Reconciling items **

43

51

-16

155

79

+96

Income taxes

(248)

(707)

-65

(2,094)

(2,871)

-27

Net income attributable to Deere & Company

$

1,245

$

2,369

-47

$

7,100

$

10,166

-30

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

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

10

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Three Months and Years Ended October 27, 2024 and October 29, 2023

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

Three Months Ended

Years Ended

2024

2023

2024

2023

Net Sales and Revenues

Net sales

$

9,275

$

13,801

$

44,759

$

55,565

Finance and interest income

1,551

1,357

5,759

4,683

Other income

317

254

1,198

1,003

Total

11,143

15,412

51,716

61,251

Costs and Expenses

Cost of sales

6,571

9,427

30,775

37,715

Research and development expenses

626

606

2,290

2,177

Selling, administrative and general expenses

1,232

1,203

4,840

4,595

Interest expense

870

781

3,348

2,453

Other operating expenses

326

322

1,257

1,292

Total

9,625

12,339

42,510

48,232

Income of Consolidated Group before Income Taxes

1,518

3,073

9,206

13,019

Provision for income taxes

248

707

2,094

2,871

Income of Consolidated Group

1,270

2,366

7,112

10,148

Equity in income (loss) of unconsolidated affiliates

(28)

2

(24)

7

Net Income

1,242

2,368

7,088

10,155

Less: Net loss attributable to noncontrolling interests

(3)

(1)

(12)

(11)

Net Income Attributable to Deere & Company

$

1,245

$

2,369

$

7,100

$

10,166

Per Share Data

Basic

$

4.57

$

8.30

$

25.73

$

34.80

Diluted

4.55

8.26

25.62

34.63

Dividends declared

1.47

1.35

5.88

5.05

Dividends paid

1.47

1.25

5.76

4.83

Average Shares Outstanding

Basic

272.6

285.5

276.0

292.2

Diluted

273.6

286.9

277.1

293.6

See Condensed Notes to Consolidated Financial Statements.

11

DEERE & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

2024

2023

Assets

Cash and cash equivalents

$

7,324

$

7,458

Marketable securities

1,154

946

Trade accounts and notes receivable - net

5,326

7,739

Financing receivables - net

44,309

43,673

Financing receivables securitized - net

8,723

7,335

Other receivables

2,545

2,623

Equipment on operating leases - net

7,451

6,917

Inventories

7,093

8,160

Property and equipment - net

7,580

6,879

Goodwill

3,959

3,900

Other intangible assets - net

999

1,133

Retirement benefits

2,921

3,007

Deferred income taxes

2,086

1,814

Other assets

2,906

2,503

Assets held for sale

2,944

Total Assets

$

107,320

$

104,087

Liabilities and Stockholders' Equity

Liabilities

Short-term borrowings

$

13,533

$

17,939

Short-term securitization borrowings

8,431

6,995

Accounts payable and accrued expenses

14,543

16,130

Deferred income taxes

478

520

Long-term borrowings

43,229

38,477

Retirement benefits and other liabilities

2,354

2,140

Liabilities held for sale

1,827

Total liabilities

84,395

82,201

Redeemable noncontrolling interest

82

97

Stockholders' Equity

Total Deere & Company stockholders' equity

22,836

21,785

Noncontrolling interests

7

4

Total stockholders' equity

22,843

21,789

Total Liabilities and Stockholders' Equity

$

107,320

$

104,087

See Condensed Notes to Consolidated Financial Statements.

12

DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Years Ended October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

2024

2023

Cash Flows from Operating Activities

Net income

$

7,088

$

10,155

Adjustments to reconcile net income to net cash provided by operating activities:

Provision (credit) for credit losses

310

(16)

Provision for depreciation and amortization

2,118

2,004

Impairments and other adjustments

125

191

Share-based compensation expense

208

130

Credit for deferred income taxes

(294)

(790)

Changes in assets and liabilities:

Receivables related to sales

421

(4,253)

Inventories

788

279

Accounts payable and accrued expenses

(1,040)

830

Accrued income taxes payable/receivable

(123)

(23)

Retirement benefits

(227)

(170)

Other

(143)

252

Net cash provided by operating activities

9,231

8,589

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

25,162

23,051

Proceeds from maturities and sales of marketable securities

832

186

Proceeds from sales of equipment on operating leases

1,929

1,981

Cost of receivables acquired (excluding receivables related to sales)

(28,816)

(28,772)

Acquisitions of businesses, net of cash acquired

​

(82)

Purchases of marketable securities

(1,055)

(491)

Purchases of property and equipment

(1,640)

(1,498)

Cost of equipment on operating leases acquired

(3,162)

(2,970)

Collateral on derivatives - net

413

(12)

Other

(127)

(142)

Net cash used for investing activities

(6,464)

(8,749)

Cash Flows from Financing Activities

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

(1,856)

4,008

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

18,096

15,429

Payments of borrowings (original maturities greater than three months)

(13,232)

(7,913)

Repurchases of common stock

(4,007)

(7,216)

Dividends paid

(1,605)

(1,427)

Other

(113)

(73)

Net cash provided by (used for) financing activities

(2,717)

2,808

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

(37)

31

Net Increase in Cash, Cash Equivalents, and Restricted Cash

13

2,679

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

7,620

4,941

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

$

7,633

$

7,620

See Condensed Notes to Consolidated Financial Statements.

13

DEERE & COMPANY

Condensed Notes to Consolidated Financial Statements

(In millions of dollars) Unaudited

(1) Special Items

2024

Legal Settlements

The company reached legal settlements concerning patent infringement claims. As a result of these settlements, in the fourth quarter of 2024, the company recognized a total of $57 million pretax gain ($45 million after-tax) in "Other Income," providing a benefit of $17 million to production and precision agriculture (PPA) and $40 million to construction and forestry (CF). These settlements resolve the disputes without any admission of liability by the parties involved. The company believes that these settlements enhance its ability to protect its intellectual property and reinforce its commitment to innovation and technological advancement.

Impairment

In the fourth quarter of 2024, the company recorded a non-cash charge of $28 million pretax and after-tax in "Equity in income (loss) of unconsolidated affiliates" for an other than temporary decline in value of an investment recorded in small agriculture and turf (SAT).

Employee-Separation Programs

In the third quarter of 2024, the company implemented employee-separation programs for its salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs' main purpose was to help meet the company's strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense 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. For the limited voluntary employee-separation programs, the expense was recorded in the period in which the employee irrevocably accepted a separation offer.

The programs' total pretax expenses are estimated to be approximately $165 million. In 2024, $157 million pretax ($124 million after-tax) expenses were recorded related to the programs, of which $130 million was paid in 2024 and the remainder is expected to be paid in 2025. The remaining expenses are associated with programs in international locations and are expected to be recorded and paid in 2025. The programs' pretax expenses recorded for the periods ended October 27, 2024 by operating segment, PPA, SAT, CF, and financial services (FS), were as follows in millions of dollars:

Three Months

Fiscal Year

PPA

SAT

CF

FS

Total

PPA

SAT

CF

FS

Total

Cost of sales

$

3

$

2

$

5

$

21

$

11

$

8

$

40

Research and development expenses

3

3

$

1

7

22

9

2

33

Selling, administrative and general expenses

9

9

1

$

1

20

34

23

12

$

10

79

Total operating profit decrease

$

15

$

14

$

2

$

1

32

$

77

$

43

$

22

$

10

152

Non-operating profit expenses*

1

5

Total

$

33

$

157

*Relates primarily to corporate expenses.

Annual pretax savings from these programs are estimated to be approximately $220 million. Approximately $100 million of savings was realized in 2024.

14

Banco John Deere S.A.

In August 2024, the company entered into a joint venture agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become 50 percent owner of the company's wholly owned subsidiary in Brazil, Banco John Deere S.A. (BJD). BJD is included in the company's financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. The transaction will reduce the company's incremental risk as it continues to grow in the Brazilian market.

The BJD business was reclassified as held for sale in the third quarter of 2024. At that time, a reversal of $38 million in allowance for credit losses and a $53 million valuation allowance was recorded. In October 2024, the valuation allowance on assets held for sale increased to $97 million. The net impact of these entries was a pretax and after-tax loss of $44 million and $59 million recorded in "Selling, administrative and general expenses" in the three months and fiscal year ended October 27, 2024, respectively.

2023

Russian Roadbuilding Sale

In the fourth quarter of 2023, the company sold its Russian roadbuilding business, recognizing a loss of $18 million (pretax and after-tax). The loss was recorded in "Other operating expenses" in the construction and forestry segment.

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.

Financial Services Financing Incentives Correction

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

Summary of 2024 and 2023 Special Items

The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and fiscal years ended October 27, 2024 and October 29, 2023:

Three Months

Fiscal Years

PPA

SAT

CF

FS

Total

PPA

SAT

CF

FS

Total

2024 Expense (benefit):

Legal settlements

$

(17)

$

(40)

$

(57)

$

(17)

$

(40)

$

(57)

Impairment

$

28

28

$

28

28

Employee-separation programs

15

14

2

$

1

32

77

43

22

$

10

152

BJD measurement

44

44

59

59

Total expense (benefit)

(2)

42

(38)

45

47

60

71

(18)

69

182

2023 Expense:

Russian roadbuilding sale

18

18

18

18

Financing incentives correction

173

173

Total expense

​

​

18

​

18

​

​

18

173

191

Period over period change

$

(2)

$

42

$

(56)

$

45

$

29

$

60

$

71

$

(36)

$

(104)

$

(9)

15

(2) The consolidated financial statements represent the consolidation of all the company's subsidiaries. The supplemental consolidating data in Note 3 to the financial statements is presented for informational purposes. Equipment operations represents the enterprise without financial services. Equipment operations includes the company's production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements.

16

DEERE & COMPANY

(3) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME

For the Three Months Ended October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

Net Sales and Revenues

Net sales

$

9,275

$

13,801

$

9,275

$

13,801

Finance and interest income

154

193

$

1,569

$

1,445

$

(172)

$

(281)

1,551

1,357

1​

Other income

274

218

117

121

(74)

(85)

317

254

2, 3, 4​

Total

9,703

14,212

1,686

1,566

(246)

(366)

11,143

15,412

Costs and Expenses

Cost of sales

6,578

9,433

​

(7)

(6)

6,571

9,427

4​

Research and development expenses

626

606

​

​

​

626

606

Selling, administrative and general expenses

946

980

288

225

(2)

(2)

1,232

1,203

4​

Interest expense

83

114

828

757

(41)

(90)

870

781

1​

Interest compensation to Financial Services

131

191

​

​

(131)

(191)

​

​

1​

Other operating expenses

54

45

337

354

(65)

(77)

326

322

3, 4, 5​

Total

8,418

11,369

1,453

1,336

(246)

(366)

9,625

12,339

Income before Income Taxes

1,285

2,843

233

230

​

​

1,518

3,073

Provision for income taxes

187

665

61

42

​

248

707

Income after Income Taxes

1,098

2,178

172

188

​

​

1,270

2,366

Equity in income (loss) of unconsolidated affiliates

(29)

​

1

2

​

(28)

2

Net Income

1,069

2,178

173

190

​

​

1,242

2,368

Less: Net loss attributable to noncontrolling interests

(3)

(1)

​

​

(3)

(1)

Net Income Attributable to Deere & Company

$

1,072

$

2,179

$

173

$

190

​

​

$

1,245

$

2,369

1 Elimination of intercompany interest income and expense.

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

3 Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets.

4 Elimination of intercompany service revenues and fees.

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

17

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF INCOME

For the Years Ended October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

Net Sales and Revenues

Net sales

$

44,759

$

55,565

$

44,759

$

55,565

Finance and interest income

596

636

$

6,035

$

5,055

$

(872)

$

(1,008)

5,759

4,683

1​

Other income

1,006

858

458

499

(266)

(354)

1,198

1,003

2, 3, 4​

Total

46,361

57,059

6,493

5,554

(1,138)

(1,362)

51,716

61,251

Costs and Expenses

Cost of sales

30,803

37,739

​

​

(28)

(24)

30,775

37,715

4​

Research and development expenses

2,290

2,177

​

​

​

​

2,290

2,177

Selling, administrative and general expenses

3,791

3,611

1,059

994

(10)

(10)

4,840

4,595

4​

Interest expense

396

411

3,182

2,362

(230)

(320)

3,348

2,453

1​

Interest compensation to Financial Services

640

687

​

​

(640)

(687)

​

​

1​

Other operating expenses

133

217

1,354

1,396

(230)

(321)

1,257

1,292

3, 4, 5​

Total

38,053

44,842

5,595

4,752

(1,138)

(1,362)

42,510

48,232

Income before Income Taxes

8,308

12,217

898

802

​

​

9,206

13,019

Provision for income taxes

1,887

2,685

207

186

​

2,094

2,871

Income after Income Taxes

6,421

9,532

691

616

​

​

7,112

10,148

Equity in income (loss) of unconsolidated affiliates

(29)

4

5

3

​

(24)

7

Net Income

6,392

9,536

696

619

​

​

7,088

10,155

Less: Net loss attributable to noncontrolling interests

(12)

(11)

​

​

(12)

(11)

Net Income Attributable to Deere & Company

$

6,404

$

9,547

$

696

$

619

​

​

$

7,100

$

10,166

1 Elimination of intercompany interest income and expense.

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

3 Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets.

4 Elimination of intercompany service revenues and fees.

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

18

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

CONDENSED BALANCE SHEETS

As of October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

​

2024

2023

​

2024

2023

​

2024

2023

Assets

Cash and cash equivalents

$

5,615

$

5,720

$

1,709

$

1,738

​

​

$

7,324

$

7,458

Marketable securities

125

104

1,029

842

​

​

1,154

946

Receivables from Financial Services

3,043

4,516

​

​

$

(3,043)

$

(4,516)

​

​

6​

Trade accounts and notes receivable - net

1,257

1,320

6,225

8,687

(2,156)

(2,268)

5,326

7,739

7​

Financing receivables - net

78

64

44,231

43,609

​

​

44,309

43,673

Financing receivables securitized - net

2

​

8,721

7,335

​

​

8,723

7,335

Other receivables

2,193

1,813

427

869

(75)

(59)

2,545

2,623

7​

Equipment on operating leases - net

7,451

6,917

7,451

6,917

Inventories

7,093

8,160

​

​

​

​

7,093

8,160

Property and equipment - net

7,546

6,843

34

36

​

​

7,580

6,879

Goodwill

3,959

3,900

​

​

​

​

3,959

3,900

Other intangible assets - net

999

1,133

​

​

​

​

999

1,133

Retirement benefits

2,839

2,936

83

72

(1)

(1)

2,921

3,007

8​

Deferred income taxes

2,262

2,133

43

68

(219)

(387)

2,086

1,814

9​

Other assets

2,194

1,948

715

559

(3)

(4)

2,906

2,503

Assets held for sale

​

2,944

​

2,944

Total Assets

$

39,205

$

40,590

$

73,612

$

70,732

$

(5,497)

$

(7,235)

$

107,320

$

104,087

Liabilities and Stockholders' Equity

Liabilities

Short-term borrowings

$

911

$

1,230

$

12,622

$

16,709

​

​

$

13,533

$

17,939

Short-term securitization borrowings

2

​

8,429

6,995

​

​

8,431

6,995

Payables to Equipment Operations

​

​

3,043

4,516

$

(3,043)

$

(4,516)

​

​

6​

Accounts payable and accrued expenses

13,534

14,862

3,243

3,599

(2,234)

(2,331)

14,543

16,130

7​

Deferred income taxes

434

452

263

455

(219)

(387)

478

520

9​

Long-term borrowings

6,603

7,210

36,626

31,267

​

​

43,229

38,477

Retirement benefits and other liabilities

2,250

2,032

105

109

(1)

(1)

2,354

2,140

8​

Liabilities held for sale

​

1,827

​

1,827

Total liabilities

23,734

25,786

66,158

63,650

(5,497)

(7,235)

84,395

82,201

Redeemable noncontrolling interest

82

97

​

​

​

​

82

97

Stockholders' Equity

Total Deere & Company stockholders' equity

22,836

21,785

7,454

7,082

(7,454)

(7,082)

22,836

21,785

10​

Noncontrolling interests

7

4

​

​

​

​

7

4

Financial Services' equity

(7,454)

(7,082)

7,454

7,082

​

​

10​

Adjusted total stockholders' equity

15,389

14,707

7,454

7,082

​

​

22,843

21,789

Total Liabilities and Stockholders' Equity

$

39,205

$

40,590

$

73,612

$

70,732

$

(5,497)

$

(7,235)

$

107,320

$

104,087

6 Elimination of receivables / payables between equipment operations and financial services.

7 Primarily reclassification of sales incentive accruals on receivables sold to financial services.

8 Reclassification of net pension assets / liabilities.

9 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

10 Elimination of financial services' equity.

19

DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF CASH FLOWS

For the Years Ended October 27, 2024 and October 29, 2023

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

2024

2023

2024

2023

2024

2023

2024

2023

Cash Flows from Operating Activities

Net income

$

6,392

$

9,536

$

696

$

619

​

​

$

7,088

$

10,155

Adjustments to reconcile net income to net cash provided by operating activities:

Provision (credit) for credit losses

14

7

296

(23)

​

​

310

(16)

Provision for depreciation and amortization

1,220

1,123

1,040

1,016

$

(142)

$

(135)

2,118

2,004

11​

Impairments and other adjustments

28

18

97

173

​

​

125

191

Share-based compensation expense

​

​

​

​

208

130

208

130

12​

Distributed earnings of Financial Services

250

215

​

​

(250)

(215)

​

​

13​

Provision (credit) for deferred income taxes

(97)

(959)

(197)

169

​

​

(294)

(790)

Changes in assets and liabilities:

Receivables related to sales

(13)

(58)

​

​

434

(4,195)

421

(4,253)

14, 16​

Inventories

1,011

474

​

​

(223)

(195)

788

279

15​

Accounts payable and accrued expenses

(1,429)

1,352

277

449

112

(971)

(1,040)

830

16​

Accrued income taxes payable/receivable

(218)

8

95

(31)

​

​

(123)

(23)

Retirement benefits

(215)

(164)

(12)

(6)

​

​

(227)

(170)

Other

(38)

367

40

(51)

(145)

(64)

(143)

252

11, 12, 15​

Net cash provided by operating activities

6,905

11,919

2,332

2,315

(6)

(5,645)

9,231

8,589

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

​

​

26,029

24,128

(867)

(1,077)

25,162

23,051

14​

Proceeds from maturities and sales of marketable securities

99

59

733

127

​

832

186

Proceeds from sales of equipment on operating leases

​

​

1,929

1,981

​

​

1,929

1,981

Cost of receivables acquired (excluding receivables related to sales)

​

​

(29,152)

(29,229)

336

457

(28,816)

(28,772)

14​

Acquisitions of businesses, net of cash acquired

​

(82)

​

​

​

​

​

(82)

Purchases of marketable securities

(209)

(173)

(846)

(318)

​

(1,055)

(491)

Purchases of property and equipment

(1,636)

(1,494)

(4)

(4)

​

​

(1,640)

(1,498)

Cost of equipment on operating leases acquired

​

​

(3,464)

(3,234)

302

264

(3,162)

(2,970)

15​

Decrease (increase) in investment in Financial Services

4

(870)

​

​

(4)

870

​

​

17​

Decrease (increase) in trade and wholesale receivables

​

​

21

(5,783)

(21)

5,783

​

​

14​

Collateral on derivatives - net

​

(1)

413

(11)

​

​

413

(12)

Other

(125)

(176)

(8)

31

6

3

(127)

(142)

Net cash used for investing activities

(1,867)

(2,737)

(4,349)

(12,312)

(248)

6,300

(6,464)

(8,749)

Cash Flows from Financing Activities

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

28

(113)

(1,884)

4,121

​

​

(1,856)

4,008

Change in intercompany receivables/payables

1,459

2,090

(1,459)

(2,090)

​

​

​

​

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

159

342

17,937

15,087

​

​

18,096

15,429

Payments of borrowings (original maturities greater than three months)

(1,123)

(901)

(12,109)

(7,012)

​

​

(13,232)

(7,913)

Repurchases of common stock

(4,007)

(7,216)

​

​

​

​

(4,007)

(7,216)

Capital investment from Equipment Operations

​

​

(4)

870

4

(870)

​

​

17​

Dividends paid

(1,605)

(1,427)

(250)

(215)

250

215

(1,605)

(1,427)

13​

Other

(46)

(7)

(67)

(66)

​

​

(113)

(73)

Net cash provided by (used for) financing activities

(5,135)

(7,232)

2,164

10,695

254

(655)

(2,717)

2,808

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

(15)

24

(22)

7

​

(37)

31

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

(112)

1,974

125

705

​

​

13

2,679

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

5,755

3,781

1,865

1,160

​

7,620

4,941

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

$

5,643

$

5,755

$

1,990

$

1,865

​

​

$

7,633

$

7,620

11 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.

12 Reclassification of share-based compensation expense.

13 Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities.

14 Primarily reclassification of receivables related to the sale of equipment.

15 Reclassification of direct lease agreements with retail customers.

16 Reclassification of sales incentive accruals on receivables sold to financial services.

17 Elimination of change in investment from equipment operations to financial services.

20