EX-99.2 3 de-20200821xex99d2.htm EX-99.2

Exhibit 99.2

(Furnished herewith)

Deere & Company

Other Financial Information

For the Nine Months Ended

Equipment Operations*

Agriculture and Turf

Construction and Forestry*

August 2

July 28

August 2

July 28

August 2

July 28

Dollars in millions

 

2020

2019

2020

2019

2020

2019

Net Sales

$

22,612

$

26,182

$

16,127

$

17,909

$

6,485

$

8,273

Net Sales - excluding Roadbuilding

$

20,466

$

23,762

$

16,127

$

17,909

$

4,339

$

5,853

Average Identifiable Assets

With Inventories at LIFO

$

19,865

$

20,984

$

10,530

$

10,880

$

9,335

$

10,104

With Inventories at LIFO - excluding Roadbuilding

$

13,936

$

14,603

$

10,530

$

10,880

$

3,406

$

3,723

With Inventories at Standard Cost

$

21,284

$

22,359

$

11,682

$

11,989

$

9,602

$

10,370

With Inventories at Standard Cost -
excluding Roadbuilding

$

15,355

$

15,977

$

11,682

$

11,989

$

3,673

$

3,988

Operating Profit

$

2,503

$

2,932

$

2,109

$

1,978

$

394

$

954

Operating Profit - excluding Roadbuilding

$

2,336

$

2,657

$

2,109

$

1,978

$

227

$

679

Percent of Net Sales - excluding Roadbuilding

 

11.4

 

11.2

 

13.1

 

11.0

 

5.2

%  

 

11.6

Operating Return on Assets - excluding Roadbuilding

With Inventories at LIFO - excluding Roadbuilding

 

16.8

 

18.2

 

20.0

 

18.2

 

6.7

%  

 

18.2

%

With Inventories at Standard Cost -
excluding Roadbuilding

 

15.2

 

16.6

 

18.1

 

16.5

 

6.2

%  

 

17.0

%

SVA Cost of Assets - excluding Roadbuilding

$

(1,382)

$

(1,437)

$

(1,051)

$

(1,078)

$

(331)

$

(359)

SVA

$

954

$

1,220

$

1,058

$

900

$

(104)

$

320

For the Nine Months Ended

Financial Services

August 2

July 28

Dollars in millions

2020

2019

Net Income Attributable to Deere & Company

$

381

$

450

Average Equity

$

5,076

$

5,018

Return on Equity

 

7.5

 

9.0

Operating Profit

$

498

$

566

Cost of Equity

$

(501)

$

(478)

SVA

$

(3)

$

88

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.

* The results and assets related to the Company's Roadbuilding product line are excluded from the calculation of SVA to allow time for integration and assimilation of the 2017 acquisition of Wirtgen Group Holding GmbH's operations.

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