EX-99.2 3 de-20230217xex99d2.htm EX-99.2

Exhibit 99.2

(Furnished herewith)

DEERE & COMPANY

OTHER FINANCIAL INFORMATION

The company evaluates its business results on the basis of accounting principles generally accepted in the United States. In addition, it uses a metric referred to as Shareholder Value Added (SVA), which management believes is an appropriate measure for the performance of its businesses. SVA is, in effect, the pretax profit left over after subtracting the cost of enterprise capital. The company is aiming for a sustained creation of SVA and is using this metric for various performance goals. Certain compensation is also determined on the basis of performance using this measure. For purposes of determining SVA, each of the equipment segments is assessed a pretax cost of assets, which on an annual basis is approximately 12 percent of the segment’s average identifiable operating assets during the applicable period with inventory at standard cost. Management believes that valuing inventories at standard cost more closely approximates the current cost of inventory and the company’s investment in the asset. The Financial Services segment is assessed an annual pretax cost of approximately 13 percent of the segment's average equity. The cost of assets or equity, as applicable, is deducted from the operating profit or added to the operating loss of each segment to determine the amount of SVA.

Equipment

Production &

Small Ag

Construction

For the Three Months Ended

Operations

Precision Ag

& Turf

& Forestry

Jan 29

Jan 30

Jan 29

Jan 30

Jan 29

Jan 30

Jan 29

Jan 30

Dollars in millions

 

2023

   

2022

   

2023

   

2022

   

2023

   

2022

   

2023

   

2022

    

Net Sales

$

11,402

$

8,531

$

5,198

$

3,356

$

3,001

$

2,631

$

3,203

$

2,544

Average Identifiable Assets

With Inventories at LIFO

$

20,929

$

18,009

$

9,074

$

7,430

$

4,744

$

4,190

$

7,111

$

6,389

With Inventories at Standard Cost

22,976

19,614

10,138

8,234

5,288

4,654

7,550

6,726

Operating Profit

$

2,280

$

939

$

1,208

$

296

$

447

$

371

$

625

$

272

Percent of Net Sales

 

20.0

 

11.0

 

23.2

 

8.8

 

14.9

 

14.1

 

19.5

 

10.7

Operating Return on Assets

With Inventories at LIFO

 

10.9

 

5.2

 

13.3

 

4.0

 

9.4

 

8.9

 

8.8

 

4.3

%

With Inventories at Standard Cost

 

9.9

 

4.8

 

11.9

 

3.6

 

8.5

 

8.0

 

8.3

 

4.0

%

SVA Cost of Assets

$

(689)

$

(589)

$

(304)

$

(248)

$

(159)

$

(139)

$

(226)

$

(202)

SVA

1,591

350

904

48

288

232

399

70

Financial

For the Three Months Ended

Services

Jan 29

Jan 30

Dollars in millions

2023

2022

Net Income Attributable to Deere & Company

$

185

$

231

Average Equity

5,948

5,644

Return on Equity

 

3.1

 

4.1

Operating Profit

$

238

$

296

Cost of Equity

(192)

(180)

SVA

46

116

18