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: August 17, 2011
(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)
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(Former name or former address, if changed since last report.) |
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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
and 8.01 Results of Operations and Financial Condition and Other Events.
The following consists of Deere & Companys press release dated August 17, 2011 concerning Third Quarter of fiscal 2011 financial results and supplemental financial information filed as Exhibit 99.1 to this report and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
(99.1) Press release and supplemental financial information (Filed herewith)
Items 2.02
and 7.01 Results of Operations and Financial Condition and Regulation FD Disclosure (Furnished herewith)
The attached schedules of Other Financial Information (Exhibit 99.2) and Third Quarter 2011 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/ Gregory R. Noe |
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Gregory R. Noe |
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Secretary |
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Dated: August 17, 2011 |
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Exhibit Index
Number and Description of Exhibit | ||
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Press Release and Supplemental Financial Information (Filed herewith) | |
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Third Quarter 2011 Earnings Conference Call Information (Furnished herewith) |
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(Filed herewith) |
News Release
News Media Contact:
Ken Golden
Director, Global Public Relations
Deere & Company
309-765-5678
Deere Reports Third-Quarter Earnings Of $712 Million
¾ Income jumps 15 percent for third quarter, marking fifth consecutive quarter-over-quarter record.
¾ Broad-based improvement reflects higher results from all divisions.
¾ Healthy global farm sector continues to support performance.
¾ Company on track for full-year sales and earnings records.
MOLINE, Illinois (August 17, 2011) Net income attributable to Deere & Company was $712.3 million, or $1.69 per share, for the third quarter ended July 31, compared with $617.0 million, or $1.44 per share, for the same period last year.
For the first nine months of the year, net income attributable to Deere & Company was $2.130 billion, or $5.01 per share, compared with $1.408 billion, or $3.28 per share, last year.
Worldwide net sales and revenues increased 22 percent, to $8.372 billion, for the third quarter and were up 24 percent to $23.401 billion for nine months. Net sales of the equipment operations were $7.722 billion for the quarter and $21.563 billion for nine months, compared with $6.224 billion and $17.009 billion for the corresponding periods last year.
Bolstered by yet another quarter of record results, John Deere remains on track for a year of exceptional achievement, said Samuel R. Allen, chairman and chief executive officer. Our success reflects strong demand for the companys advanced equipment and the skillful execution of our ambitious business plans.
Deere Announces Third-Quarter Earnings |
These are aimed at expanding our global competitive position and introducing the John Deere brand to a wider group of customers.
Increased sales of large farm machinery are having a major impact on Deeres performance, Allen said, while construction-equipment sales are moving higher in spite of weakness in the North American residential and commercial construction sectors. The company is achieving record performance in spite of certain key markets being in the early stages of recovery. This reflects our focus on managing costs and assets, while enhancing our geographic footprint and providing a range of innovative products and services to a growing global customer base.
Summary of Operations
Net sales of the worldwide equipment operations increased 24 percent for the quarter and 27 percent for nine months compared with a year ago. Sales included a favorable currency-translation effect of 6 percent for the quarter and 4 percent for nine months and price increases of 3 percent for both periods. Equipment net sales in the United States and Canada increased 10 percent for the quarter and 19 percent year to date. Outside the U.S. and Canada, net sales were up 49 percent for the quarter and 40 percent for nine months, with favorable currency-translation effects of 16 percent and 8 percent, respectively.
Deeres equipment operations reported operating profit of $969 million for the quarter and $2.883 billion for nine months, compared with $890 million and $2.193 billion last year. The increases were largely due to the impact of higher shipment volumes and improved price realization, partially offset by higher raw-material costs and increased selling, administrative and general expenses.
Net income of the companys equipment operations was $584 million for the quarter and $1.777 billion for nine months, compared with $512 million and $1.135 billion for the respective periods last year. The same operating factors mentioned above affected quarterly and nine-month results. In addition, a lower tax rate benefited performance for the year to date.
Financial services reported net income attributable to Deere & Company of $125.6 million for the quarter and $348.9 million for nine months compared with
Deere Announces Third-Quarter Earnings |
$102.1 million and $274.1 million last year. Results for both periods were higher primarily due to growth in the credit portfolio and a lower provision for credit losses, partially offset by narrower financing spreads.
Company Outlook & Summary
Company equipment sales are projected to be up about 25 percent for fiscal 2011 and up about 20 percent for the fourth quarter compared with the same periods a year ago. Included is a favorable currency-translation impact of about 4 percent for both periods. For the full year, net income attributable to Deere & Company is anticipated to be approximately $2.7 billion.
Reflecting improvement from the companys previous estimate, the annual forecast now includes a negative impact of approximately $70 million in sales and $10 million in operating profit from the effects of the Japanese earthquake and tsunami earlier this year.
According to Allen, the companys 2011 performance is providing significant momentum to its future growth plans. John Deeres aggressive investment in new products and expanded global capacity puts the company on a sound footing to address the worlds growing need for food, shelter and infrastructure, Allen stated. We remain confident that these positive macroeconomic trends have staying power and should prove rewarding to the company and its stakeholders in the years ahead. At the same time, he noted, concerns over the health of the global economy and recent turmoil in world financial markets have introduced an additional element of uncertainty into the near-term outlook.
* * *
Equipment Division Performance
Agriculture & Turf. Sales increased 22 percent for the quarter and 23 percent for nine months largely due to higher shipment volumes, the favorable effects of currency translation and improved price realization.
Deere Announces Third-Quarter Earnings |
Operating profit was $859 million for the quarter and $2.579 billion year to date, compared with $824 million and $2.128 billion, respectively, last year. The improvement in both periods primarily was due to the impact of higher shipment volumes and improved price realization, partially offset by increases in raw-material costs and selling, administrative and general expenses.
Construction & Forestry. Construction and forestry sales rose 34 percent for the quarter and were up 50 percent for nine months mainly due to higher shipment volumes and improved price realization. The division had operating profit of $110 million for the quarter and $304 million for nine months, compared with $66 million and $65 million last year. Operating profit for both periods moved up primarily due to higher shipment and production volumes and improved price realization, partially offset by increased raw-material costs and selling, administrative and general expenses.
Market Conditions & Outlook
Agriculture & Turf. Worldwide sales of the companys agriculture and turf division are forecast to increase by about 21 percent for full-year 2011, with a favorable currency-translation impact of about 4 percent. Farmers in the worlds major markets are experiencing solid levels of income due to rising demand for agricultural commodities as well as high crop prices.
Industry farm-machinery sales in the U.S. and Canada are forecast to be up 5 to 10 percent for the year, following a healthy advance in 2010. Overall conditions remain positive and demand continues to be strong, especially for high-horsepower equipment.
Industry sales in the EU 27 nations of Western and Central Europe are forecast to increase by 10 to 15 percent, while sales in the Commonwealth of Independent States are expected to be notably higher. Farm conditions have remained generally favorable in both areas, though adverse weather has negatively affected harvest activity and grain quality in parts of Europe. Sales in Asia are forecast to rise sharply again this year.
Deere Announces Third-Quarter Earnings |
In South America, industry sales for the year are projected to be down about 5 percent versus strong levels of 2010. The decline, primarily due to weakness in the small-tractor market in Brazil and adverse trade policies in Argentina, is being partly offset by strength in large farm equipment. Deeres own sales in the region are benefiting from a broader lineup of recently introduced products.
Industry sales of turf and utility equipment in the U.S. and Canada are expected to be about the same as in 2010.
Construction & Forestry. Deeres worldwide sales of construction and forestry equipment are forecast to increase by about 45 percent for full-year 2011. The increase reflects market conditions that are somewhat improved in relation to last years low level and increased activity outside of the U.S. and Canada. Construction equipment sales to independent rental companies are seeing significant growth. World forestry markets are experiencing a further rebound after last years strong gains with particular improvement in Europe.
Financial Services. Full-year 2011 net income attributable to Deere & Company for the financial services operations is expected to be approximately $460 million. The forecast increase from 2010 is primarily due to growth in the portfolio and a lower provision for credit losses.
John Deere Capital Corporation
The following is disclosed on behalf of the companys credit 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 $100.5 million for the third quarter and $270.1 million year to date, compared with $89.4 million and $222.7 million for the respective periods last year. Results were higher for both periods primarily due to growth in the portfolio and a lower provision for credit losses, partially offset by narrower financing spreads.
Deere Announces Third-Quarter Earnings |
Net receivables and leases financed by JDCC were $22.925 billion at July 31, 2011, compared with $20.307 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. These factors include worldwide economic conditions, demand for agricultural products, world grain stocks, weather conditions (including its effects on timely planting and harvesting), soil conditions, harvest yields, prices for commodities and livestock, crop and livestock production expenses, availability of transport for crops, the growth 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, Russia and the U.S.), international reaction to such 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 general economic conditions, 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.
Deere Announces Third-Quarter Earnings |
General economic conditions, 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 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 in which the company operates, especially material changes in economic activity in these markets; 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. General economic conditions can affect demand for the companys equipment as well.
Customer and company operations and results could be affected by changes in weather patterns (including the effects of dry weather in parts of the U.S. and wet weather in parts of Eastern and Western Europe); 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 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 sovereign debt crisis, in Europe or elsewhere, could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, customers, and company operations and results. State debt crises also could negatively impact customers, suppliers, demand for equipment, and company operations and results. The companys investment management activities could be impaired by changes in the equity and bond markets, which would negatively affect earnings.
Deere Announces Third-Quarter 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 in particular jurisdictions or for the benefit of certain industries or sectors (including protectionist 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 Commission and other financial regulators; actions by environmental, health and safety regulatory agencies, including those related to engine emissions (in particular Interim Tier 4 and Final Tier 4 emission requirements), carbon emissions, noise and the risk of climate change; changes in labor regulations; changes to accounting standards; changes in tax rates, estimates, and regulations; and actions by other regulatory bodies including changes in laws and regulations affecting the sectors in which the company operates. 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 due to weather, natural disasters or financial hardship or the loss of liquidity by suppliers (including the impact of the earthquake and resulting events in Japan); 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; oil and energy prices and supplies; 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; labor relations; acquisitions and divestitures of businesses, the integration of new businesses; the implementation of organizational changes; difficulties related to the conversion and
Deere Announces Third-Quarter Earnings |
implementation of enterprise resource planning systems that disrupt business, negatively impact supply or distribution relationships or create higher than expected costs; changes in company declared dividends and common stock issuances and repurchases.
Company results are also affected by changes in the level of employee retirement benefits, changes in market values of investment assets and the level of interest 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 to meet future cash flow requirements and fund operations and the costs associated with engaging in diversified funding activities and to fund purchases of the companys products. If market uncertainty increases and general economic conditions worsen, 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 Third-Quarter Earnings |
Third Quarter 2011 Press Release
(in millions of dollars)
Unaudited
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Three Months Ended |
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Nine Months Ended |
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2011 |
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2010 |
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% |
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2011 |
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2010 |
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% |
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Net sales and revenues: |
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Agriculture and turf |
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$ |
6,371 |
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$ |
5,217 |
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+22 |
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$ |
17,740 |
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$ |
14,462 |
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+23 |
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Construction and forestry |
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1,351 |
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1,007 |
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+34 |
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3,823 |
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2,547 |
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+50 |
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Total net sales |
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7,722 |
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6,224 |
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+24 |
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21,563 |
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17,009 |
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+27 |
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Financial services * |
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550 |
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528 |
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+4 |
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1,548 |
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1,532 |
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+1 |
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Other revenues |
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100 |
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85 |
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+18 |
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290 |
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262 |
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+11 |
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Total net sales and revenues |
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$ |
8,372 |
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$ |
6,837 |
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+22 |
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$ |
23,401 |
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$ |
18,803 |
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+24 |
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Operating profit: ** |
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Agriculture and turf |
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$ |
859 |
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$ |
824 |
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+4 |
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$ |
2,579 |
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$ |
2,128 |
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+21 |
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Construction and forestry |
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110 |
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66 |
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+67 |
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304 |
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65 |
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+368 |
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Financial services * |
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194 |
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148 |
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+31 |
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529 |
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360 |
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+47 |
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Total operating profit |
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1,163 |
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1,038 |
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+12 |
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3,412 |
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2,553 |
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+34 |
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Other reconciling items *** |
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(451 |
) |
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(421 |
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+7 |
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(1,282 |
) |
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(1,145 |
) |
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+12 |
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Net income attributable to Deere & Company |
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$ |
712 |
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$ |
617 |
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+15 |
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$ |
2,130 |
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$ |
1,408 |
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+51 |
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Equipment operations outside the U.S. and Canada: |
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Net sales |
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$ |
3,364 |
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$ |
2,255 |
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+49 |
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$ |
8,860 |
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$ |
6,307 |
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+40 |
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Operating profit |
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300 |
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208 |
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+44 |
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848 |
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533 |
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+59 |
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* At the beginning of the first quarter of 2011, the Company combined the reporting of the credit segment and the Other segment into the financial services segment. The Other segment consisted of an insurance business related to extended warranty policies that did not meet the materiality threshold of reporting. The revenues and operating profit for previous periods were revised as shown above or as follows:
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Years |
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2010 |
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2009 |
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Financial Services |
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Revenues |
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2,073 |
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2,029 |
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Operating profit |
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499 |
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242 |
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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.
*** Other reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, income taxes and net income attributable to noncontrolling interests.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended July 31, 2011 and 2010
(In millions of dollars and shares except per share amounts) Unaudited
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2011 |
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2010 | ||||
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Net Sales and Revenues |
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Net sales |
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$ |
7,721.6 |
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$ |
6,224.0 |
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Finance and interest income |
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492.2 |
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448.4 |
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Other income |
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158.1 |
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164.5 |
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Total |
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8,371.9 |
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6,836.9 |
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Costs and Expenses |
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Cost of sales |
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5,792.2 |
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4,519.6 |
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Research and development expenses |
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312.0 |
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256.3 |
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Selling, administrative and general expenses |
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815.8 |
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751.2 |
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Interest expense |
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184.3 |
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193.1 |
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Other operating expenses |
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188.5 |
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|
195.0 |
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Total |
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7,292.8 |
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5,915.2 |
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Income of Consolidated Group before Income Taxes |
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1,079.1 |
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|
921.7 |
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Provision for income taxes |
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369.5 |
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308.1 |
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Income of Consolidated Group |
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709.6 |
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613.6 |
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Equity in income of unconsolidated affiliates |
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5.2 |
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5.9 |
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Net Income |
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714.8 |
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619.5 |
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Less: Net income attributable to noncontrolling interests |
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2.5 |
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|
2.5 |
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Net Income Attributable to Deere & Company |
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$ |
712.3 |
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$ |
617.0 |
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|
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Per Share Data |
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Basic |
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$ |
1.71 |
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$ |
1.45 |
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Diluted |
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$ |
1.69 |
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$ |
1.44 |
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|
|
|
|
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Average Shares Outstanding |
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|
|
|
|
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Basic |
|
417.4 |
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|
424.5 |
| ||
Diluted |
|
422.0 |
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|
429.0 |
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See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Nine Months Ended July 31, 2011 and 2010
(In millions of dollars and shares except per share amounts) Unaudited
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2011 |
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2010 | ||||
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Net Sales and Revenues |
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Net sales |
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$ |
21,563.0 |
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|
$ |
17,009.5 |
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Finance and interest income |
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1,420.7 |
|
|
1,350.7 |
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Other income |
|
417.1 |
|
|
442.4 |
| ||
Total |
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23,400.8 |
|
|
18,802.6 |
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|
|
|
|
|
|
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Costs and Expenses |
|
|
|
|
|
| ||
Cost of sales |
|
15,993.2 |
|
|
12,490.3 |
| ||
Research and development expenses |
|
879.3 |
|
|
758.1 |
| ||
Selling, administrative and general expenses |
|
2,309.0 |
|
|
2,126.5 |
| ||
Interest expense |
|
579.1 |
|
|
618.9 |
| ||
Other operating expenses |
|
474.3 |
|
|
533.9 |
| ||
Total |
|
20,234.9 |
|
|
16,527.7 |
| ||
|
|
|
|
|
|
| ||
Income of Consolidated Group before Income Taxes |
|
3,165.9 |
|
|
2,274.9 |
| ||
Provision for income taxes |
|
1,040.7 |
|
|
866.4 |
| ||
Income of Consolidated Group |
|
2,125.2 |
|
|
1,408.5 |
| ||
Equity in income of unconsolidated affiliates |
|
10.6 |
|
|
6.4 |
| ||
Net Income |
|
2,135.8 |
|
|
1,414.9 |
| ||
Less: Net income attributable to noncontrolling interests |
|
5.5 |
|
|
7.2 |
| ||
Net Income Attributable to Deere & Company |
|
$ |
2,130.3 |
|
|
$ |
1,407.7 |
|
|
|
|
|
|
|
| ||
Per Share Data |
|
|
|
|
|
| ||
Basic |
|
$ |
5.07 |
|
|
$ |
3.32 |
|
Diluted |
|
$ |
5.01 |
|
|
$ |
3.28 |
|
|
|
|
|
|
|
| ||
Average Shares Outstanding |
|
|
|
|
|
| ||
Basic |
|
419.9 |
|
|
424.1 |
| ||
Diluted |
|
425.2 |
|
|
428.4 |
|
See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited
|
|
July 31 |
|
October 31 |
|
July 31 |
| |||
|
|
2011 |
|
2010 |
|
2010 |
| |||
|
|
|
|
|
|
|
| |||
Assets |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
$ |
3,618.3 |
|
$ |
3,790.6 |
|
$ |
3,753.7 |
|
Marketable securities |
|
459.4 |
|
227.9 |
|
232.3 |
| |||
Receivables from unconsolidated affiliates |
|
32.3 |
|
38.8 |
|
31.9 |
| |||
Trade accounts and notes receivable - net |
|
3,844.5 |
|
3,464.2 |
|
3,527.2 |
| |||
Financing receivables - net |
|
19,437.0 |
|
17,682.2 |
|
16,236.1 |
| |||
Financing receivables securitized - net |
|
2,480.6 |
|
2,238.3 |
|
2,631.8 |
| |||
Other receivables |
|
960.9 |
|
925.6 |
|
693.1 |
| |||
Equipment on operating leases - net |
|
2,015.0 |
|
1,936.2 |
|
1,777.9 |
| |||
Inventories |
|
4,687.7 |
|
3,063.0 |
|
3,175.4 |
| |||
Property and equipment - net |
|
4,068.9 |
|
3,790.7 |
|
4,398.6 |
| |||
Investments in unconsolidated affiliates |
|
224.7 |
|
244.5 |
|
232.7 |
| |||
Goodwill |
|
1,023.2 |
|
998.6 |
|
992.9 |
| |||
Other intangible assets - net |
|
133.4 |
|
117.0 |
|
126.1 |
| |||
Retirement benefits |
|
230.9 |
|
146.7 |
|
197.8 |
| |||
Deferred income taxes |
|
2,825.1 |
|
2,477.1 |
|
2,592.5 |
| |||
Other assets |
|
1,093.2 |
|
1,194.0 |
|
1,210.3 |
| |||
Assets held for sale |
|
|
|
931.4 |
|
|
| |||
Total Assets |
|
$ |
47,135.1 |
|
$ |
43,266.8 |
|
$ |
41,810.3 |
|
|
|
|
|
|
|
|
| |||
Liabilities and Stockholders Equity |
|
|
|
|
|
|
| |||
Short-term borrowings |
|
$ |
7,927.9 |
|
$ |
5,325.7 |
|
$ |
4,908.4 |
|
Short-term securitization borrowings |
|
2,380.9 |
|
2,208.8 |
|
2,577.3 |
| |||
Payables to unconsolidated affiliates |
|
143.8 |
|
203.5 |
|
161.3 |
| |||
Accounts payable and accrued expenses |
|
7,121.3 |
|
6,481.7 |
|
5,855.5 |
| |||
Deferred income taxes |
|
160.0 |
|
144.3 |
|
133.2 |
| |||
Long-term borrowings |
|
15,892.5 |
|
16,814.5 |
|
16,374.2 |
| |||
Retirement benefits and other liabilities |
|
5,968.7 |
|
5,784.9 |
|
5,674.6 |
| |||
Total liabilities |
|
39,595.1 |
|
36,963.4 |
|
35,684.5 |
| |||
Total Deere & Company stockholders equity |
|
7,527.6 |
|
6,290.3 |
|
6,115.2 |
| |||
Noncontrolling interests |
|
12.4 |
|
13.1 |
|
10.6 |
| |||
Total stockholders equity |
|
7,540.0 |
|
6,303.4 |
|
6,125.8 |
| |||
Total Liabilities and Stockholders Equity |
|
$ |
47,135.1 |
|
$ |
43,266.8 |
|
$ |
41,810.3 |
|
See Condensed Notes to Interim Consolidated Financial Statements.
DEERE & COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended July 31, 2011 and 2010
(In millions of dollars) Unaudited
|
|
2011 |
|
|
2010 |
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
Net income |
|
$ |
2,135.8 |
|
|
$ |
1,414.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| ||
Provision for doubtful receivables |
|
17.8 |
|
|
84.8 |
| ||
Provision for depreciation and amortization |
|
677.9 |
|
|
692.9 |
| ||
Share-based compensation expense |
|
50.8 |
|
|
61.5 |
| ||
Undistributed earnings of unconsolidated affiliates |
|
1.1 |
|
|
(1.0 |
) | ||
Provision (credit) for deferred income taxes |
|
(324.8 |
) |
|
106.6 |
| ||
Changes in assets and liabilities: |
|
|
|
|
|
| ||
Trade, notes and financing receivables related to sales |
|
(978.8 |
) |
|
(1,169.2 |
) | ||
Inventories |
|
(1,774.6 |
) |
|
(1,067.9 |
) | ||
Accounts payable and accrued expenses |
|
571.9 |
|
|
619.9 |
| ||
Accrued income taxes payable/receivable |
|
266.3 |
|
|
128.9 |
| ||
Retirement benefits |
|
351.1 |
|
|
(67.3 |
) | ||
Other |
|
(358.4 |
) |
|
284.0 |
| ||
Net cash provided by operating activities |
|
636.1 |
|
|
1,088.1 |
| ||
|
|
|
|
|
|
| ||
Cash Flows from Investing Activities |
|
|
|
|
|
| ||
Collections of receivables (excluding receivables related to sales) |
|
9,317.4 |
|
|
8,390.9 |
| ||
Proceeds from maturities and sales of marketable securities |
|
24.5 |
|
|
23.5 |
| ||
Proceeds from sales of equipment on operating leases |
|
522.8 |
|
|
463.5 |
| ||
Government grants related to property and equipment |
|
|
|
|
92.3 |
| ||
Proceeds from sales of businesses, net of cash sold |
|
894.4 |
|
|
25.0 |
| ||
Cost of receivables acquired (excluding receivables related to sales) |
|
(10,286.7 |
) |
|
(9,032.5 |
) | ||
Purchases of marketable securities |
|
(256.1 |
) |
|
(55.0 |
) | ||
Purchases of property and equipment |
|
(681.5 |
) |
|
(457.5 |
) | ||
Cost of equipment on operating leases acquired |
|
(397.4 |
) |
|
(381.8 |
) | ||
Acquisitions of businesses, net of cash acquired |
|
(60.8 |
) |
|
(43.1 |
) | ||
Other |
|
(143.5 |
) |
|
(41.3 |
) | ||
Net cash used for investing activities |
|
(1,066.9 |
) |
|
(1,016.0 |
) | ||
|
|
|
|
|
|
| ||
Cash Flows from Financing Activities |
|
|
|
|
|
| ||
Increase in total short-term borrowings |
|
844.3 |
|
|
239.9 |
| ||
Proceeds from long-term borrowings |
|
3,515.1 |
|
|
1,836.9 |
| ||
Payments of long-term borrowings |
|
(2,795.2 |
) |
|
(2,599.6 |
) | ||
Proceeds from issuance of common stock |
|
165.9 |
|
|
68.0 |
| ||
Repurchases of common stock |
|
(1,093.2 |
) |
|
(102.8 |
) | ||
Dividends paid |
|
(422.2 |
) |
|
(356.2 |
) | ||
Excess tax benefits from share-based compensation |
|
66.8 |
|
|
19.3 |
| ||
Other |
|
(36.3 |
) |
|
(28.1 |
) | ||
Net cash provided by (used for) financing activities |
|
245.2 |
|
|
(922.6 |
) | ||
|
|
|
|
|
|
| ||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
13.3 |
|
|
(47.5 |
) | ||
|
|
|
|
|
|
| ||
Net Decrease in Cash and Cash Equivalents |
|
(172.3 |
) |
|
(898.0 |
) | ||
Cash and Cash Equivalents at Beginning of Period |
|
3,790.6 |
|
|
4,651.7 |
| ||
Cash and Cash Equivalents at End of Period |
|
$ |
3,618.3 |
|
|
$ |
3,753.7 |
|
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 |
|
Nine Months Ended |
| ||||||||
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Dividends declared |
|
$ |
.41 |
|
$ |
.30 |
|
$ |
1.11 |
|
$ |
.86 |
|
Dividends paid |
|
$ |
.35 |
|
$ |
.28 |
|
$ |
1.00 |
|
$ |
.84 |
|
(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) Comprehensive income, which includes all changes in the total stockholders equity during the period except transactions with stockholders, was as follows in millions of dollars:
|
|
Three Months Ended |
|
|
Nine Months Ended |
| ||||||||||
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
714.8 |
|
|
$ |
619.5 |
|
|
$ |
2,135.8 |
|
|
$ |
1,414.9 |
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Retirement benefits adjustment |
|
69.3 |
|
|
85.1 |
|
|
171.6 |
|
|
312.1 |
| ||||
Cumulative translation adjustment |
|
(46.2 |
) |
|
(46.0 |
) |
|
197.9 |
|
|
(121.5 |
) | ||||
Unrealized gain (loss) on derivatives |
|
3.6 |
|
|
(7.9 |
) |
|
13.2 |
|
|
14.0 |
| ||||
Unrealized gain (loss) on investments |
|
3.0 |
|
|
3.0 |
|
|
(.4 |
) |
|
3.6 |
| ||||
Comprehensive income |
|
$ |
744.5 |
|
|
$ |
653.7 |
|
|
$ |
2,518.1 |
|
|
$ |
1,623.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) The consolidated financial statements represent the consolidation of all Deere & Companys subsidiaries. In the supplemental consolidating data in Note 5 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.
(5) SUPPLEMENTAL CONSOLIDATING DATA | |||||||||||||
STATEMENT OF INCOME | |||||||||||||
For the Three Months Ended July 31, 2011 and 2010 | |||||||||||||
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
| ||||||||
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
7,721.6 |
|
$ |
6,224.0 |
|
|
|
|
| ||
Finance and interest income |
|
21.9 |
|
14.6 |
|
$ |
531.2 |
|
$ |
493.4 |
| ||
Other income |
|
112.2 |
|
91.5 |
|
75.8 |
|
96.6 |
| ||||
Total |
|
7,855.7 |
|
6,330.1 |
|
607.0 |
|
590.0 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Costs and Expenses |
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
5,792.5 |
|
4,520.0 |
|
|
|
|
| ||||
Research and development expenses |
|
312.0 |
|
256.3 |
|
|
|
|
| ||||
Selling, administrative and general expenses |
|
716.4 |
|
630.7 |
|
102.8 |
|
122.9 |
| ||||
Interest expense |
|
49.3 |
|
45.1 |
|
148.6 |
|
159.4 |
| ||||
Interest compensation to Financial Services |
|
47.3 |
|
50.8 |
|
|
|
|
| ||||
Other operating expenses |
|
52.8 |
|
53.9 |
|
161.9 |
|
159.2 |
| ||||
Total |
|
6,970.3 |
|
5,556.8 |
|
413.3 |
|
441.5 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income of Consolidated Group before Income Taxes |
|
885.4 |
|
773.3 |
|
193.7 |
|
148.5 |
| ||||
Provision for income taxes |
|
301.2 |
|
261.7 |
|
68.3 |
|
46.5 |
| ||||
Income of Consolidated Group |
|
584.2 |
|
511.6 |
|
125.4 |
|
102.0 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
|
| ||||
Financial Services |
|
125.6 |
|
102.1 |
|
.2 |
|
.1 |
| ||||
Other |
|
5.0 |
|
5.8 |
|
|
|
|
| ||||
Total |
|
130.6 |
|
107.9 |
|
.2 |
|
.1 |
| ||||
Net Income |
|
714.8 |
|
619.5 |
|
125.6 |
|
102.1 |
| ||||
Less: Net income attributable to noncontrolling interests |
|
2.5 |
|
2.5 |
|
|
|
|
| ||||
Net Income Attributable to Deere & Company |
|
$ |
712.3 |
|
$ |
617.0 |
|
$ |
125.6 |
|
$ |
102.1 |
|
|
|
|
|
|
|
|
|
|
|
* 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 INCOME | |||||||||||||
For the Nine Months Ended July 31, 2011 and 2010 | |||||||||||||
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
| ||||||||
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
Net Sales and Revenues |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
21,563.0 |
|
$ |
17,009.5 |
|
|
|
|
| ||
Finance and interest income |
|
55.5 |
|
47.9 |
|
$ |
1,542.2 |
|
$ |
1,462.6 |
| ||
Other income |
|
335.8 |
|
281.3 |
|
169.5 |
|
242.9 |
| ||||
Total |
|
21,954.3 |
|
17,338.7 |
|
1,711.7 |
|
1,705.5 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Costs and Expenses |
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
|
15,994.2 |
|
12,491.4 |
|
|
|
|
| ||||
Research and development expenses |
|
879.3 |
|
758.1 |
|
|
|
|
| ||||
Selling, administrative and general expenses |
|
2,016.1 |
|
1,770.0 |
|
301.8 |
|
364.6 |
| ||||
Interest expense |
|
151.2 |
|
133.8 |
|
468.2 |
|
516.1 |
| ||||
Interest compensation to Financial Services |
|
136.6 |
|
142.6 |
|
|
|
|
| ||||
Other operating expenses |
|
139.2 |
|
127.4 |
|
413.6 |
|
465.4 |
| ||||
Total |
|
19,316.6 |
|
15,423.3 |
|
1,183.6 |
|
1,346.1 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income of Consolidated Group before Income Taxes |
|
2,637.7 |
|
1,915.4 |
|
528.1 |
|
359.4 |
| ||||
Provision for income taxes |
|
860.6 |
|
780.3 |
|
180.0 |
|
86.0 |
| ||||
Income of Consolidated Group |
|
1,777.1 |
|
1,135.1 |
|
348.1 |
|
273.4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Equity in Income of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
|
| ||||
Financial Services |
|
348.9 |
|
274.1 |
|
.8 |
|
.6 |
| ||||
Other |
|
9.8 |
|
5.8 |
|
|
|
|
| ||||
Total |
|
358.7 |
|
279.9 |
|
.8 |
|
.6 |
| ||||
Net Income |
|
2,135.8 |
|
1,415.0 |
|
348.9 |
|
274.0 |
| ||||
Less: Net income (loss) attributable to noncontrolling interests |
|
5.5 |
|
7.3 |
|
|
|
(.1) |
| ||||
Net Income Attributable to Deere & Company |
|
$ |
2,130.3 |
|
$ |
1,407.7 |
|
$ |
348.9 |
|
$ |
274.1 |
|
|
|
|
|
|
|
|
|
|
|
* 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) |
|
|
|
|
|
|
|
|
| ||||||||||
CONDENSED BALANCE SHEET |
|
EQUIPMENT OPERATIONS * |
|
FINANCIAL SERVICES |
| ||||||||||||||
|
|
July 31 |
|
October 31 |
|
July 31 |
|
July 31 |
|
October 31 |
|
July 31 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
3,167.8 |
|
$ |
3,348.3 |
|
$ |
3,333.5 |
|
$ |
450.5 |
|
$ |
442.3 |
|
$ |
420.2 |
|
Marketable securities |
|
200.4 |
|
|
|
|
|
259.0 |
|
227.9 |
|
232.3 |
| ||||||
Receivables from unconsolidated subsidiaries and affiliates |
|
2,054.4 |
|
1,712.6 |
|
1,373.4 |
|
|
|
1.6 |
|
2.0 |
| ||||||
Trade accounts and notes receivable - net |
|
1,061.8 |
|
999.8 |
|
804.0 |
|
3,547.5 |
|
2,979.7 |
|
3,340.4 |
| ||||||
Financing receivables - net |
|
8.2 |
|
9.4 |
|
10.4 |
|
19,428.7 |
|
17,672.8 |
|
16,225.7 |
| ||||||
Financing receivables securitized - net |
|
|
|
|
|
|
|
2,480.6 |
|
2,238.3 |
|
2,631.8 |
| ||||||
Other receivables |
|
744.3 |
|
889.5 |
|
642.7 |
|
224.4 |
|
49.4 |
|
68.1 |
| ||||||
Equipment on operating leases - net |
|
|
|
|
|
|
|
2,015.0 |
|
1,936.2 |
|
1,777.9 |
| ||||||
Inventories |
|
4,687.7 |
|
3,063.0 |
|
3,175.4 |
|
|
|
|
|
|
| ||||||
Property and equipment - net |
|
4,003.4 |
|
3,722.4 |
|
3,381.4 |
|
65.4 |
|
68.3 |
|
1,017.2 |
| ||||||
Investments in unconsolidated subsidiaries and affiliates |
|
3,481.3 |
|
3,420.2 |
|
3,350.1 |
|
7.9 |
|
7.0 |
|
6.3 |
| ||||||
Goodwill |
|
1,023.2 |
|
998.6 |
|
992.9 |
|
|
|
|
|
|
| ||||||
Other intangible assets - net |
|
129.4 |
|
113.0 |
|
122.1 |
|
4.0 |
|
4.0 |
|
4.0 |
| ||||||
Retirement benefits |
|
230.1 |
|
145.8 |
|
196.8 |
|
29.0 |
|
31.4 |
|
5.1 |
| ||||||
Deferred income taxes |
|
2,959.7 |
|
2,737.1 |
|
2,763.6 |
|
103.1 |
|
103.2 |
|
97.7 |
| ||||||
Other assets |
|
472.5 |
|
381.2 |
|
331.2 |
|
621.2 |
|
812.9 |
|
879.0 |
| ||||||
Assets held for sale |
|
|
|
|
|
|
|
|
|
931.4 |
|
|
| ||||||
Total Assets |
|
$ |
24,224.2 |
|
$ |
21,540.9 |
|
$ |
20,477.5 |
|
$ |
29,236.3 |
|
$ |
27,506.4 |
|
$ |
26,707.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Short-term borrowings |
|
$ |
480.4 |
|
$ |
85.0 |
|
$ |
92.1 |
|
$ |
7,447.5 |
|
$ |
5,240.7 |
|
$ |
4,816.2 |
|
Short-term securitization borrowings |
|
|
|
|
|
|
|
2,380.9 |
|
2,208.8 |
|
2,577.3 |
| ||||||
Payables to unconsolidated subsidiaries and affiliates |
|
143.8 |
|
205.2 |
|
163.3 |
|
2,022.1 |
|
1,673.7 |
|
1,341.5 |
| ||||||
Accounts payable and accrued expenses |
|
6,645.3 |
|
5,757.1 |
|
5,198.5 |
|
1,248.9 |
|
1,253.3 |
|
1,292.0 |
| ||||||
Deferred income taxes |
|
98.3 |
|
92.0 |
|
82.4 |
|
299.5 |
|
415.5 |
|
319.6 |
| ||||||
Long-term borrowings |
|
3,371.5 |
|
3,328.6 |
|
3,181.9 |
|
12,521.0 |
|
13,485.9 |
|
13,192.3 |
| ||||||
Retirement benefits and other liabilities |
|
5,944.9 |
|
5,771.6 |
|
5,635.1 |
|
51.9 |
|
43.8 |
|
43.6 |
| ||||||
Total liabilities |
|
16,684.2 |
|
15,239.5 |
|
14,353.3 |
|
25,971.8 |
|
24,321.7 |
|
23,582.5 |
| ||||||
Total Deere & Company stockholders equity |
|
7,527.6 |
|
6,290.3 |
|
6,115.2 |
|
3,264.5 |
|
3,182.7 |
|
3,123.6 |
| ||||||
Noncontrolling interests |
|
12.4 |
|
11.1 |
|
9.0 |
|
|
|
2.0 |
|
1.6 |
| ||||||
Total stockholders equity |
|
7,540.0 |
|
6,301.4 |
|
6,124.2 |
|
3,264.5 |
|
3,184.7 |
|
3,125.2 |
| ||||||
Total Liabilities and Stockholders Equity |
|
$ |
24,224.2 |
|
$ |
21,540.9 |
|
$ |
20,477.5 |
|
$ |
29,236.3 |
|
$ |
27,506.4 |
|
$ |
26,707.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 Nine Months Ended July 31, 2011 and 2010
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
| ||||||||||||
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
| ||||
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
2,135.8 |
|
|
$ |
1,415.0 |
|
|
$ |
348.9 |
|
|
$ |
274.0 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Provision for doubtful receivables |
|
2.5 |
|
|
1.8 |
|
|
15.3 |
|
|
83.0 |
|
| ||||
Provision for depreciation and amortization |
|
439.7 |
|
|
416.3 |
|
|
293.0 |
|
|
319.9 |
|
| ||||
Undistributed earnings of unconsolidated subsidiaries and affiliates |
|
(82.8 |
) |
|
(132.5 |
) |
|
(.8 |
) |
|
(.6 |
) |
| ||||
Provision (credit) for deferred income taxes |
|
(372.0 |
) |
|
95.7 |
|
|
47.2 |
|
|
11.0 |
|
| ||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Receivables |
|
(24.9 |
) |
|
(168.1 |
) |
|
|
|
|
(8.4 |
) |
| ||||
Inventories |
|
(1,483.6 |
) |
|
(818.8 |
) |
|
|
|
|
|
|
| ||||
Accounts payable and accrued expenses |
|
686.7 |
|
|
729.9 |
|
|
134.7 |
|
|
2.8 |
|
| ||||
Accrued income taxes payable/receivable |
|
274.7 |
|
|
108.4 |
|
|
(8.4 |
) |
|
20.5 |
|
| ||||
Retirement benefits |
|
340.9 |
|
|
(79.5 |
) |
|
10.2 |
|
|
12.2 |
|
| ||||
Other |
|
(182.4 |
) |
|
191.0 |
|
|
(77.9 |
) |
|
198.2 |
|
| ||||
Net cash provided by operating activities |
|
1,734.6 |
|
|
1,759.2 |
|
|
762.2 |
|
|
912.6 |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Collections of receivables (excluding trade and wholesale) |
|
|
|
|
|
|
|
10,169.3 |
|
|
9,318.5 |
|
| ||||
Proceeds from maturities and sales of marketable securities |
|
|
|
|
|
|
|
24.5 |
|
|
23.5 |
|
| ||||
Proceeds from sales of equipment on operating leases |
|
|
|
|
|
|
|
522.8 |
|
|
463.5 |
|
| ||||
Government grants related to property and equipment |
|
|
|
|
|
|
|
|
|
|
92.3 |
|
| ||||
Proceeds from sales of businesses, net of cash sold |
|
894.4 |
|
|
25.0 |
|
|
|
|
|
|
|
| ||||
Cost of receivables acquired (excluding trade and wholesale) |
|
|
|
|
|
|
|
(11,187.4 |
) |
|
(9,800.5 |
) |
| ||||
Purchases of marketable securities |
|
(200.5 |
) |
|
|
|
|
(55.5 |
) |
|
(55.0 |
) |
| ||||
Purchases of property and equipment |
|
(680.2 |
) |
|
(432.0 |
) |
|
(1.3 |
) |
|
(25.4 |
) |
| ||||
Cost of equipment on operating leases acquired |
|
|
|
|
|
|
|
(790.6 |
) |
|
(718.4 |
) |
| ||||
Acquisitions of businesses, net of cash acquired |
|
(60.8 |
) |
|
(34.7 |
) |
|
|
|
|
(8.3 |
) |
| ||||
Increase in trade and wholesale receivables |
|
|
|
|
|
|
|
(1,153.5 |
) |
|
(1,287.5 |
) |
| ||||
Other |
|
(135.3 |
) |
|
(60.6 |
) |
|
(73.4 |
) |
|
(1.7 |
) |
| ||||
Net cash used for investing activities |
|
(182.4 |
) |
|
(502.3 |
) |
|
(2,545.1 |
) |
|
(1,999.0 |
) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Increase (decrease) in total short-term borrowings |
|
312.7 |
|
|
(86.0 |
) |
|
531.7 |
|
|
325.9 |
|
| ||||
Change in intercompany receivables/payables |
|
(845.3 |
) |
|
(924.8 |
) |
|
845.3 |
|
|
924.8 |
|
| ||||
Proceeds from long-term borrowings |
|
90.4 |
|
|
139.4 |
|
|
3,424.7 |
|
|
1,697.4 |
|
| ||||
Payments of long-term borrowings |
|
(11.5 |
) |
|
(311.5 |
) |
|
(2,783.6 |
) |
|
(2,288.1 |
) |
| ||||
Proceeds from issuance of common stock |
|
165.9 |
|
|
68.0 |
|
|
|
|
|
|
|
| ||||
Repurchases of common stock |
|
(1,093.2 |
) |
|
(102.8 |
) |
|
|
|
|
|
|
| ||||
Dividends paid |
|
(422.2 |
) |
|
(356.2 |
) |
|
(264.1 |
) |
|
(142.0 |
) |
| ||||
Excess tax benefits from share-based compensation |
|
66.8 |
|
|
19.3 |
|
|
|
|
|
|
|
| ||||
Other |
|
(12.9 |
) |
|
(14.2 |
) |
|
40.4 |
|
|
29.8 |
|
| ||||
Net cash provided by (used for) financing activities |
|
(1,749.3 |
) |
|
(1,568.8 |
) |
|
1,794.4 |
|
|
547.8 |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of Exchange Rate Changes on Cash |
|
16.6 |
|
|
(44.4 |
) |
|
(3.3 |
) |
|
(3.1 |
) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
(180.5 |
) |
|
(356.3 |
) |
|
8.2 |
|
|
(541.7 |
) |
| ||||
Cash and Cash Equivalents at Beginning of Period |
|
3,348.3 |
|
|
3,689.8 |
|
|
442.3 |
|
|
961.9 |
|
| ||||
Cash and Cash Equivalents at End of Period |
|
$ |
3,167.8 |
|
|
$ |
3,333.5 |
|
|
$ |
450.5 |
|
|
$ |
420.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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.
(Furnished herewith)
Deere & Company | ||||||||||||||||||||||||
Other Financial Information | ||||||||||||||||||||||||
| ||||||||||||||||||||||||
|
For the Nine Months Ended July 31, |
Equipment Operations |
Agriculture and Turf |
Construction and Forestry | ||||||||||||||||||||
|
Dollars in millions |
2011 |
|
2010 |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| |||||||||||
|
Net Sales |
$ |
21,563 |
|
$ |
17,009 |
|
$ |
17,740 |
|
$ |
14,462 |
|
$ |
3,823 |
|
$ |
2,547 |
| |||||
|
Average Identifiable Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
With Inventories at LIFO |
$ |
11,360 |
|
$ |
9,035 |
|
$ |
8,773 |
|
$ |
6,918 |
|
$ |
2,587 |
|
$ |
2,117 |
| |||||
|
With Inventories at Standard Cost |
$ |
12,715 |
|
$ |
10,335 |
|
$ |
9,921 |
|
$ |
8,022 |
|
$ |
2,794 |
|
$ |
2,313 |
| |||||
|
Operating Profit |
$ |
2,883 |
|
$ |
2,193 |
|
$ |
2,579 |
|
$ |
2,128 |
|
$ |
304 |
|
$ |
65 |
| |||||
|
Percent of Net Sales |
|
13.4 |
% |
|
12.9 |
% |
|
14.5 |
% |
|
14.7 |
% |
|
8.0 |
% |
|
2.6 |
% | |||||
|
Operating Return on Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
With Inventories at LIFO |
|
25.4 |
% |
|
24.3 |
% |
|
29.4 |
% |
|
30.8 |
% |
|
11.8 |
% |
|
3.1 |
% | |||||
|
With Inventories at Standard Cost |
|
22.7 |
% |
|
21.2 |
% |
|
26.0 |
% |
|
26.5 |
% |
|
10.9 |
% |
|
2.8 |
% | |||||
|
SVA Cost of Assets |
$ |
(1,144 |
) |
$ |
(930 |
) |
$ |
(893 |
) |
$ |
(722 |
) |
$ |
(251 |
) |
$ |
(208 |
) | |||||
|
SVA |
$ |
1,739 |
|
$ |
1,263 |
|
$ |
1,686 |
|
$ |
1,406 |
|
$ |
53 |
|
$ |
(143 |
) | |||||
| ||||||||||||||||||||||||
|
For the Nine Months Ended July 31, |
Financial Services |
|
| ||||||||||||||||||||
|
Dollars in millions |
|
2011 |
|
|
2010 |
| |||||||||||||||||
|
Net Income Attributable to Deere & Company |
$ |
349 |
|
$ |
274 |
| |||||||||||||||||
|
Average Equity |
$ |
3,168 |
|
$ |
3,035 |
| |||||||||||||||||
|
Return on Equity |
|
11.0 |
% |
|
9.0 |
% | |||||||||||||||||
|
Operating Profit |
$ |
529 |
|
$ |
360 |
| |||||||||||||||||
|
Change in Allowance for Doubtful Receivables |
$ |
|
|
$ |
(7 |
) | |||||||||||||||||
|
SVA Income |
$ |
529 |
|
$ |
353 |
| |||||||||||||||||
|
Average Equity |
$ |
3,168 |
|
$ |
3,035 |
| |||||||||||||||||
|
Average Allowance for Doubtful Receivables |
$ |
|
|
$ |
232 |
| |||||||||||||||||
|
SVA Average Equity |
$ |
3,168 |
|
$ |
3,267 |
| |||||||||||||||||
|
Cost of Equity |
$ |
(358 |
) |
$ |
(306 |
) | |||||||||||||||||
|
SVA |
$ |
171 |
|
$ |
47 |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
|
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 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. Financial Services is assessed an annual pretax cost of average equity of 15 percent. In 2010, the average equity excluded the effect of the allowance for doubtful receivables. In 2011, the change in allowance for doubtful receivables is no longer an adjustment. The cost of assets or equity, as applicable, is deducted from the operating profit or added to the operating loss of the equipment segments or financial services to determine the amount of SVA. For this purpose, the operating profit of financial services is net income before income taxes in 2011 and net income before income taxes and changes to the allowance for doubtful receivables in 2010. |
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||
|
| 3rd Quarter 2011 Earnings Conference Call 2 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the companys projections, plans and objectives 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. 26 |
|
| 3rd Quarter 2011 Earnings Conference Call 3 Third Quarter Overview (in millions of dollars except per share amounts) Q3 2011 Q3 2010 Change Net Sales and Revenues $8,372 $6,837 +22% Net Sales $7,722 $6,224 +24% Net Income Attributable to Deere & Company $712 $617 +15% Diluted EPS $1.69 $1.44 +17% 27 |
|
| 3rd Quarter 2011 Earnings Conference Call 4 Third Quarter Overview Net Sales Equipment operations net sales: Up 24% in Q3 2011 vs. Q3 2010 Currency translation: +6 points Price realization: +3 points 28 |
|
| 3rd Quarter 2011 Earnings Conference Call 5 Production Tonnage Approximate % Change* Q3 2011 Actual Q3 2011 Previous Forecast Q4 2011 Forecast FY 2011 Forecast FY 2011 Previous Forecast Total Worldwide +9 +11 +13 +21 +19 Worldwide A&T +7 +12 +9 +17 +17 Worldwide C&F +20 +7 +31 +43 +36 U.S. and Canada +1 +1 +12 +19 +17 Outside U.S. and Canada +23 +29 +14 +24 +24 U.S. and Canada A&T -3 +1 +6 +14 +13 *Percentage change from same period in previous year, excluding purchased product Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 29 |
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| 3rd Quarter 2011 Earnings Conference Call 6 2011 Company Outlook Fourth Quarter 2011 Forecast Net sales: Up ~ 20% vs. Q4 2010 Currency translation: ~ +4 points Fiscal Year 2011 Forecast Net sales: Up ~ 25% vs. FY 2010 Currency translation: ~ +4 points Price realization: ~ +3 points Previous forecast: Up 21-23% vs. FY 2010 Currency translation: ~ +3 points Price realization: ~ +3 points Net income attributable to Deere & Company of ~ $2.7 billion Previous forecast: ~ $2.65 billion Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 30 |
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| 3rd Quarter 2011 Earnings Conference Call 7 Worldwide Agriculture & Turf Third Quarter Overview (in millions of dollars) Q3 2011 Q3 2010 Change Net Sales $6,371 $5,217 +22% Operating Profit* $859 $824 +4% Production Tonnage +7% Incremental Margin ~ 3% *Q3 2011 operating profit impacted by: Higher shipment volumes Improved price realization Increased raw-material costs Higher selling, administrative and general expenses 31 |
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| 3rd Quarter 2011 Earnings Conference Call 8 U.S. Commodity Price Estimates (dollars per bushel, except cotton, which is dollars per pound) 2009/10 2010/11 Estimate Previous 2010/11 2011/12 Forecast Previous 2011/12 2011/12 USDA Corn $3.55 $5.30 $5.20 $5.75 $5.50 $6.20-$7.20 Wheat $4.87 $5.70 $5.75 $7.30 $7.25 $7.00-$8.20 Soybeans $9.59 $11.65 $11.55 $12.75 $12.75 $12.50-$14.50 Cotton $0.63 $0.81 $0.81 $0.90 $1.00 $0.85-$1.05 Unless Otherwise Labeled, Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) USDA Forecast 11 August 2011 32 |
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(Yield in bushels per acre, except cotton, which is pounds per acre) Acres Planted (millions) Yield 2010/11 2011/12 Forecast 2010/11 2011/12 Forecast 2011/12 USDA Corn 88.2 92.3 152.8 156.0 153.0 Wheat 53.6 56.4 46.4 45.2 45.2 Soybeans 77.4 75.2 43.5 43.1 41.4 Cotton 11.0 13.7 812 790 822 | 3rd Quarter 2011 Earnings Conference Call 9 U.S. Acres Planted and Crop Yields Unless Otherwise Labeled, Deere & Company Forecast as of 17 August 2011 USDA Forecast 11 August 2011 33 |
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| 3rd Quarter 2011 Earnings Conference Call 10 U.S. Farm Cash Receipts (in billions of dollars) 2010 Forecast Previous 2010 2011 Forecast Previous 2011 2012 Forecast Previous 2012 Crops $170.9 $170.9 $207.6* $210.1 $198.1* $202.0 Livestock $141.5 $141.5 $153.0 $149.4 $151.9 $152.0 Government Payments $12.2 $12.2 $11.8 $11.9 $12.3 $12.3 Total Cash Receipts $324.6 $324.6 $372.4* $371.4 $362.3* $366.3 Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) *Prior to USDA release of supply and demand report on 11 August 2011. Incorporating the crop price and yield data from that report, preliminary Deere estimates of crops and total gross cash receipts increase ~$5 billion in 2011 and ~$12 billion in 2012. 34 |
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| 3rd Quarter 2011 Earnings Conference Call 11 EU 27 Economic Update Deere & Company Forecast as of 17 August 2011 35 Farm income stable to positive due to improved prices Regions and segments differ Fundamentals remain positive Grain, beef, and milk prices remain at good levels Input costs increasing, but below peak levels Investment interest in agricultural machinery stable to positive Low levels of used equipment Grain harvest hampered regionally by wet weather Forage production recovering from spring dryness |
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12 Setting Directions New Product Introduction: EU 27, CIS* Largest new product introduction for Region 2 Over 6,000 participants from 57 countries Over 100 new products 80% of large (140+ horsepower) tractor and combine models new or updated Enhanced portfolio of farm implements Focus on Dealer of Tomorrow strategy | 3rd Quarter 2011 Earnings Conference Call *Commonwealth of Independent States 36 |
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| 3rd Quarter 2011 Earnings Conference Call 13 Farm Net Income Brazil and Argentina Brazil (in billions of U.S. dollars) 2010 Previous 2010 2011 Forecast Previous 2011 2012 Forecast Previous 2012 Soybeans 4.5 4.5 5.2 8.8 5.4 6.7 Sugarcane 10.3 10.3 11.3 13.4 12.0 13.6 Other* 0.6 0.6 3.7 3.9 3.6 1.9 Total 15.4 15.4 20.2 26.1 21.0 22.2 Argentina (in billions of U.S. dollars) 2010 Previous 2010 2011 Forecast Previous 2011 2012 Forecast Previous 2012 Total 6.1 6.1 8.0 7.6 8.4 6.4 * Includes corn, paddy rice, and cotton Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 37 |
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| 3rd Quarter 2011 Earnings Conference Call 14 Agriculture & Turf Retail Sales Industry Outlook Fiscal 2011 U.S. and Canada Ag: Up 5-10% No change from previous forecast EU 27 Ag: Up 10-15% Previous forecast: Up ~ 15% CIS* countries Ag: Notably higher No change from previous forecast Asia Ag: Sales forecast to rise sharply again this year No change from previous forecast South America Ag: Down ~ 5% Previous forecast: Down 5-10% U.S. and Canada turf and utility equipment: ~ Flat No change from previous forecast *Commonwealth of Independent States Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 38 |
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| 3rd Quarter 2011 Earnings Conference Call 15 Worldwide Agriculture & Turf Deere & Company Outlook Fiscal Year 2011 Forecast Net sales: Up ~ 21% Currency translation: ~ +4 points Previous forecast: Up ~ 20% Currency translation: ~ +4 points Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 39 |
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Delivering Customer Solutions 8335R: Outstanding Fuel Efficiency & Lower Operating Cost | 3rd Quarter 2011 Earnings Conference Call 16 John Deere 8335R: Nebraska OECD Tractor Test 1990Summary 758 John Deere 8320R: Nebraska OECD Tractor Test 1963Summary 660 John Deere 8430: Nebraska OECD Tractor Test 1873Summary 527 First iT4 compliant tractor through Nebraska OECD testing Single fluid, EGR iT4 engine design validated Better fuel efficiency than 8430 and 8320R First row-crop tractor to break through 300 PTO hp barrier Factory installed JDLinkTM to help increase profitability Transmits machine data to owners and dealers to optimize for peak performance iT4 Interim Tier 4 OECD Organization for Economic Cooperation and Development EGR Exhaust Gas Recirculation PTO Power Take-Off 40 |
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| 3rd Quarter 2011 Earnings Conference Call 17 Worldwide Construction & Forestry Third Quarter Overview (in millions of dollars) Q3 2011 Q3 2010 Change Net Sales $1,351 $1,007 +34% Operating Profit* $110 $66 +67% Production Tonnage +20% Incremental Margin ~ 13% *Q3 2011 operating profit impacted by: Higher shipment and production volumes Improved price realization Increased raw-material costs Higher selling, administrative and general expenses 41 |
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U.S. Economic Indicators 2011 Forecast 2012 Forecast GDP Growth (annual percentage rate) +1.6% +1.9% Housing Starts (thousands) 608 688 Non-Residential Spending Growth (annual percentage rate)* -0.9% -2.2% Government Spending Growth (annual percentage rate)* -12.6% -4.8% | 3rd Quarter 2011 Earnings Conference Call 18 Worldwide Construction & Forestry Deere & Company Outlook Source: Global Insight, Calendar Year Estimates August 2011 * Change from prior year in real dollars Fiscal Year 2011 Forecast Net sales: Up ~ 45% Previous forecast: Up ~ 35% Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 42 |
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| 3rd Quarter 2011 Earnings Conference Call 19 Worldwide Financial Services Credit Loss History 0.08% Provision for Credit Losses / Average Owned Portfolio * Annualized provision for credit losses as of 31 July 2011 43 |
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| 3rd Quarter 2011 Earnings Conference Call 20 Worldwide Financial Services Third Quarter 2011 Net income attributable to Deere & Company $126 million in Q3 2011 vs. $102 million in Q3 2010 Fiscal Year 2011 Forecast Net income attributable to Deere & Company of ~ $460 million Previous forecast: ~ $435 million Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 44 |
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| 3rd Quarter 2011 Earnings Conference Call 21 Consolidated Trade Receivables & Inventory (in millions of dollars) Q3 2011* Actual 2011** Forecast 2011** Previous Forecast A&T 1,244 300 125 C&F 585 475 225 Total, as reported 1,829 775 100 Total, constant exchange 1,400 600 50 * Change at 31 July 2011 vs. 31 July 2010 ** Change at 31 October 2011 vs. 31 October 2010 Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 45 |
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| 3rd Quarter 2011 Earnings Conference Call 22 Retail Sales U.S. and Canada Ag Industry* Deere** Utility Tractors 8% less than the industry Row-Crop Tractors 11% slightly more than the industry 4WD Tractors 5% a single digit Combines 25% more than the industry July 2011 Retail Sales and Dealer Inventories * As reported by the Association of Equipment Manufacturers ** As reported to the Association of Equipment Manufacturers *** At 31 July 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 2011 2010 Row-Crop Tractors 18% 18% Combines 18% 19% 46 |
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| 3rd Quarter 2011 Earnings Conference Call 23 July 2011 Retail Sales EU 27 Deere* Tractors double digits Combines double digits U.S. and Canada Deere* Selected Turf & Utility Equipment double digits * Based on internal sales reports U.S. and Canada Construction & Forestry Deere* First-in-the-Dirt double digits Settlements double digits 47 |
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| 3rd Quarter 2011 Earnings Conference Call 24 Material Costs and Freight Equipment Operations Third Quarter 2011 Up ~ $195 million vs. Q3 2010 Fiscal Year 2011 Forecast Up ~ $700 million vs. FY 2010 Agriculture & Turf ~ $600 million Construction & Forestry ~ $100 million Previous forecast: Margin impact ~ (2) points vs. FY 2010 Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 48 |
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| 3rd Quarter 2011 Earnings Conference Call 25 Research & Development Expense Equipment Operations Third Quarter 2011 Up ~ 22% vs. Q3 2010 Fiscal Year 2011 Forecast Up ~ 17% vs. FY 2010 No change from previous forecast Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 49 |
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| 3rd Quarter 2011 Earnings Conference Call 26 Selling, Administrative & General Expense Equipment Operations Third Quarter 2011 Up ~ 14% vs. Q3 2010 Growth: ~ +5 points Currency translation: ~ +4 points Incentive compensation: ~ +3 points Fiscal Year 2011 Forecast Up ~ 13% vs. FY 2010 Incentive compensation: ~ +3 points Currency translation: ~ +2 points Growth: ~ +2 points Previous forecast: Up ~ 14% vs. FY 2010 Incentive compensation: ~ +3 points Currency translation: ~ +2 points Growth: ~ +1 point Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 50 |
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| 3rd Quarter 2011 Earnings Conference Call 27 Income Taxes Equipment Operations Third Quarter 2011 Effective tax rate: ~ 34% Fiscal Year 2011 Forecast Projected effective tax rate: 33-35% No change from previous forecast Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 51 |
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| 3rd Quarter 2011 Earnings Conference Call 28 Continued Strong Operating Performance Equipment Operations Cash Flows from Operations Fiscal Year 2008: $2.4 billion Fiscal Year 2009: $1.4 billion Fiscal Year 2010: $2.5 billion Fiscal Year 2011 Forecast: ~ $2.7 billion Previous forecast: ~ $3.1 billion Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 52 |
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| 3rd Quarter 2011 Earnings Conference Call 29 Other Information Fiscal Year 2011 Forecast Equipment Operations Capital Expenditures: ~ $1.1 billion No change from previous forecast Depreciation and Amortization: ~ $600 million No change from previous forecast Pension/OPEB Contributions: ~ $125 million Previous forecast: ~ $115 million Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 53 |
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| 3rd Quarter 2011 Earnings Conference Call 30 Share Repurchase As Part of Publicly Announced Plans Actual Shares Repurchased* (in millions) Total Amount** (in billions) 2004 5.9 $0.2 2005 27.7 $0.9 2006 34.0 $1.3 2007 25.7 $1.5 2008 21.2 $1.7 2009 0.0 $0.0 2010 5.2 $0.4 2011 YTD 12.8 $1.1 Cumulative cost of repurchases 2004-3Q2011: ~ $7.0 billion Amount remaining on May 2008 authorization of $5 billion: ~ $4.6 billion 31 July 2011 period ended shares (basic): ~ 413.9 million (diluted): ~ 418.4 million Shares repurchased 2004-3Q2011: ~ 132.5 million Average repurchase price 2004-3Q2011: $52.97 * All shares adjusted for two-for-one stock split effective 26 November 2007 ** Rounded totals for each period sum may not tie to cumulative cost of repurchases 2004-3Q2011 54 |
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| 3rd Quarter 2011 Earnings Conference Call 31 Appendix 55 |
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Deere Use-of-Cash Priorities | 3rd Quarter 2011 Earnings Conference Call 32 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 56 |
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| 3rd Quarter 2011 Earnings Conference Call 33 Worldwide Financial Services Unsecured Term Debt Maturities* * Maturities as of 31 July 2011 57 |
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| 3rd Quarter 2011 Earnings Conference Call 34 Sources and Uses of Cash Fiscal 20042010 Equipment Operations ~55% of cash from operations returned to shareholders (1) Other includes excess tax benefits from share-based compensation, effect of exchange rates on cash and cash equivalents, proceeds from maturities and sales of marketable securities and purchases of marketable securities Source: Deere & Company SEC filings (1) $4,160 $3,348 58 |
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U.S. Farm Prices | 3rd Quarter 2011 Earnings Conference Call 35 Source: Actual Data: USDA Forecast Data: Deere & Company Forecast as of 17 August 2011 59 |
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| 3rd Quarter 2011 Earnings Conference Call 36 World Farm Fundamentals Global Stocks-To-Use Ratios Corn Wheat Soybeans Source: USDA - 11 August 2011 Cotton 60 |
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| 3rd Quarter 2011 Earnings Conference Call 37 U.S. Net Farm Cash Income (in billions of dollars) 2010 Forecast Previous 2010 2011 Forecast Previous 2011 2012 Forecast Previous 2012 Total Cash Receipts $324.6 $324.6 $372.4 $371.4 $362.3 $366.3 Other Cash Income $21.0 $21.0 $21.2 $21.1 $23.8 $23.8 Gross Cash Income $345.6 $345.6 $393.6 $392.5 $386.1 $390.1 Cash Expenses ($254.2) ($254.2) ($282.0) ($280.0) ($283.0) ($284.0) Net Cash Income $91.4 $91.4 $111.6 $112.5 $103.1 $106.1 Deere & Company Forecast as of 17 August 2011 (Previous Forecast as of 18 May 2011) 61 |
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Deeres fourth quarter 2011 conference call is scheduled for 9:00 a.m. central time on Wednesday, November 23, 2011 62 |