EX-99.2 3 de-20220520xex99d2.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 Six Months Ended

Operations

Precision Ag

& Turf

& Forestry

May 1

May 2 

May 1

May 2 

May 1

May 2 

May 1

May 2 

Dollars in millions

 

2022

2021

2022

2021

2022

2021

2022

2021

Net Sales

$

20,565

$

19,049

$

8,473

$

7,599

$

6,201

$

5,904

$

5,891

$

5,546

Average Identifiable Assets

With Inventories at LIFO

$

18,846

$

16,292

$

7,933

$

6,375

$

4,296

$

3,513

$

6,617

$

6,404

With Inventories at Standard Cost

20,449

17,681

8,736

7,065

4,758

3,947

6,955

6,669

Operating Profit

$

3,329

$

3,524

$

1,353

$

1,651

$

891

$

1,117

$

1,085

$

756

Percent of Net Sales

 

16.2

 

18.5

 

16.0

 

21.7

 

14.4

 

18.9

 

18.4

%  

 

13.6

Operating Return on Assets

With Inventories at LIFO

 

17.7

 

21.6

 

17.1

 

25.9

 

20.7

 

31.8

 

16.4

%  

 

11.8

%

With Inventories at Standard Cost

 

16.3

 

19.9

 

15.5

 

23.4

 

18.7

 

28.3

 

15.6

%  

 

11.3

%

SVA Cost of Assets

$

(1,227)

$

(1,062)

$

(525)

$

(425)

$

(285)

$

(237)

$

(417)

$

(400)

SVA

2,102

2,462

828

1,226

606

880

668

356

Financial

For the Six Months Ended

Services

May 1

May 2 

Dollars in millions

2022

2021

Net Income Attributable to Deere & Company

$

439

$

427

Average Equity

5,683

5,376

Return on Equity

 

7.7

 

7.9

Operating Profit

$

577

$

553

Cost of Equity

(377)

(349)

SVA

200

204

23