EX-99.2 3 a17-13106_1ex99d2.htm EX-99.2

 

 

Deere & Company

 

Exhibit 99.2

 

Other Financial Information

 

(Furnished herewith)

 

For the Six Months Ended

 

Equipment Operations

Agriculture and Turf

Construction and Forestry

 

 

April 30

 

May 1

 

April 30

 

May 1

 

April 30

 

May 1

 

Dollars in millions

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

Net Sales

 

$

11,958

 

$

11,876

 

$

9,392

 

$

9,341

 

$

2,566

 

$

2,535

 

Average Identifiable Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

$

11,868

 

$

11,951

 

$

8,797

 

$

8,776

 

$

3,071

 

$

3,175

 

With Inventories at Standard Cost

 

$

13,140

 

$

13,216

 

$

9,832

 

$

9,814

 

$

3,308

 

$

3,402

 

Operating Profit

 

$

1,358

 

$

902

 

$

1,215

 

$

759

 

$

143

 

$

143

 

Percent of Net Sales

 

11.4

%

7.6

% 

12.9

%

8.1

% 

5.6

%

5.6

% 

Operating Return on Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

11.4

%

7.5

%

13.8

%

8.6

%

4.7

%

4.5

%

With Inventories at Standard Cost

 

10.3

%

6.8

%

12.4

%

7.7

%

4.3

%

4.2

%

SVA Cost of Assets

 

$

(789)

 

$

(793)

 

$

(590)

 

$

(589)

 

$

(199)

 

$

(204)

 

SVA

 

$

569

 

$

109

 

$

625

 

$

170

 

$

(56)

 

$

(61)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

Financial Services

 

 

 

 

 

 

 

 

 

 

April 30

 

May 1

 

 

 

 

 

 

 

 

 

Dollars in millions

 

2017

 

2016

 

 

 

 

 

 

 

 

 

Net Income Attributable to Deere & Company

 

$

218

 

$

232

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,431

 

$

4,462

 

 

 

 

 

 

 

 

 

Return on Equity

 

4.9

%

5.2

%

 

 

 

 

 

 

 

 

Operating Profit

 

$

328

 

$

354

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,431

 

$

4,462

 

 

 

 

 

 

 

 

 

Cost of Equity

 

$

(333)

 

$

(340)

 

 

 

 

 

 

 

 

 

SVA

 

$

(5)

 

$

14

 

 

 

 

 

 

 

 

 

 

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 15 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.

 

 

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