EX-99.1 2 de-20230217xex99d1.htm EX-99.1

Exhibit 99.1

(Furnished herewith)

News Release

Graphic

Contact:
Jen Hartmann
Director, Public Relations
HartmannJenniferA@JohnDeere.com

Deere Reports First Quarter Net Income of $1.959 Billion

Strong execution contributes to 34% net sales gain and higher earnings.
Market environment supported by positive fundamentals and healthy demand for farm and construction equipment.
Full-year net income forecast increased to $8.75 billion to $9.25 billion.

MOLINE, Illinois (February 17, 2023) — Deere & Company reported net income of $1.959 billion for the first quarter ended January 29, 2023, or $6.55 per share, compared with net income of $903 million, or $2.92 per share, for the quarter ended January 30, 2022.

Worldwide net sales and revenues increased 32 percent, to $12.652 billion, in the most recent quarter. Net sales were $11.402 billion for the quarter, compared with $8.531 billion in 2022.

“Deere’s first-quarter performance is a reflection of favorable market fundamentals and healthy demand for our equipment as well as solid execution on the part of our employees, dealers, and suppliers to get products to our customers,” said John C. May, chairman and chief executive officer. “We are, at the same time, benefiting from an improved operating environment, which is contributing to higher levels of production.”

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2023 is forecast to be in a range of $8.75 billion to $9.25 billion.

“Deere is looking forward to another strong year on the basis of positive fundamentals, low machine inventories, and a continuation of solid execution,” May said. “We are proud of our recent performance and remain fully committed to helping our customers do their jobs in a more profitable, productive, and sustainable way. We have confidence in our ability to execute on our leap ambitions and run our businesses with real purpose, real technology, and real impact.”

4


Deere & Company

First Quarter

$ in millions, except per share amounts

2023

2022

% Change

Net sales and revenues

$

12,652

$

9,569

32%

Net income

$

1,959

$

903

117%

Fully diluted EPS

$

6.55

$

2.92

Results for the prior period were affected by special items. See Note 1 of the financial statements for further details.

Production & Precision Agriculture

First Quarter

$ in millions

2023

2022

% Change

Net sales

$

5,198

$

3,356

55%

Operating profit

$

1,208

$

296

308%

Operating margin

23.2%

8.8%

Production and precision agriculture sales increased for the quarter as a result of higher shipment volumes and price realization. Operating profit improved primarily due to price realization and improved shipment volume / mix, partially offset by higher production costs and increased SA&G and R&D expenses. UAW contract-ratification bonus costs affected the prior period.

Graphic

5


Small Agriculture & Turf

First Quarter

$ in millions

2023

2022

% Change

Net sales

$

3,001

$

2,631

14%

Operating profit

$

447

$

371

20%

Operating margin

14.9%

14.1%

Small agriculture and turf sales increased for the quarter due to price realization and higher shipment volumes, partially offset by the negative effects of foreign currency translation. Operating profit improved primarily as a result of price realization and improved shipment volumes. These items were partially offset by higher production costs, increased SA&G and R&D expenses, and the unfavorable effects of foreign currency exchange.

Graphic

6


Construction & Forestry

First Quarter

$ in millions

2023

2022

% Change

Net sales

$

3,203

$

2,544

26%

Operating profit

$

625

$

272

130%

Operating margin

19.5%

10.7%

Construction and forestry sales moved higher for the quarter primarily due to higher shipment volumes and price realization, partially offset by the negative effects of foreign currency translation. Operating profit improved due to price realization and improved shipment volumes, partially offset by higher production costs. UAW contract-ratification bonus costs affected the prior period.

Graphic

7


Financial Services

First Quarter

$ in millions

2023

2022

% Change

Net income

$

185

$

231

-20%

Financial services net income for the quarter decreased mainly due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions, partially offset by income earned on higher average portfolio balances.

Industry Outlook for Fiscal 2023

Agriculture & Turf

U.S. & Canada:

Large Ag

Up 5 to 10%

Small Ag & Turf

Down ~ 5%

Europe

Flat to Up 5%

South America (Tractors & Combines)

Flat to Up 5%

Asia

Down moderately

Construction & Forestry

U.S. & Canada:

Construction Equipment

Flat to Up 5%

Compact Construction Equipment

Flat to Up 5%

Global Forestry

Flat

Global Roadbuilding

Flat

Deere Segment Outlook for Fiscal 2023

Currency

Price

$ in millions

Net Sales

Translation

Realization

Production & Precision Ag

Up ~ 20%

0%

+14%

Small Ag & Turf

Flat to Up 5%

0%

+8%

Construction & Forestry

Up 10 to 15%

0%

+9%

Financial Services

Net Income

$ 820

Financial Services. Fiscal-year 2023 net income attributable to Deere & Company for the financial services operations is forecast to be $820 million. Results are expected to be lower than fiscal year 2022 due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions. These factors are expected to be partially offset by income earned on a higher average portfolio. The outlook decreased from the previous forecast provided on November 23, 2022 due to further compression in financing spreads.

John Deere Capital Corporation

The following is disclosed on behalf of the company’s financial services subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market.

First Quarter

$ in millions

2023

2022

% Change

Revenue

$

821

$

643

28%

Net income

$

147

$

190

-23%

Ending portfolio balance

$

47,227

$

40,353

17%

Net income for the quarter was lower than the same period in 2022 primarily due to less-favorable financing spreads, higher SA&G expenses, and lower gains on operating-lease dispositions, partially offset by income earned on higher average portfolio balances.

8


FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled “Company Outlook & Summary,” “Industry Outlook,” and “Deere Segment Outlook,” relating to future events, expectations, and trends, constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

changes in U.S. and international laws, regulations, and policies relating to trade, spending, taxing, banking, monetary, environmental (including climate change and engine emission), and farming policies;
political, economic, and social instability of the geographies in which the company operates;
wars and other conflicts, including the current conflict between Russia and Ukraine, and natural disasters;
adverse macroeconomic conditions, including unemployment, inflation, rising interest rates, changes in consumer practices due to slower economic growth or possible recession, and liquidity constraints;
growth and sustainability of non-food uses for crops (including ethanol and biodiesel production);
the ability to execute business strategies, including the company’s Smart Industrial operating model, Leap Ambitions, and mergers and acquisitions;
the ability to understand and meet its customers’ changing expectations and demand for John Deere products;
accurately forecasting customer demand for products and services and adequately managing inventory;
changes to governmental communications channels (radio frequency technology);
gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions;
the company’s ability to adapt in highly competitive markets;
dealer practices and their ability to manage distribution of John Deere products and support and service precision technology solutions;
changes in climate patterns and unfavorable weather events;
higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for our products;
changes in the company’s credit ratings, and failure to comply with financial covenants in credit agreements could impact access to funding;
availability and price of raw materials, components, and whole goods;
delays or disruptions in the company’s supply chain;
labor relations and contracts, including work stoppages and other disruptions;
the ability to attract, develop, engage, and retain qualified personnel;
security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its products;
loss of or challenges to intellectual property rights;
compliance with evolving U.S. and foreign laws, including economic sanctions, data privacy, and environmental laws and regulations;
legislation introduced or enacted that could affect the company’s business model and intellectual property, such as so-called right to repair or right to modify legislation;
investigations, claims, lawsuits, or other legal proceedings;
events that damage the company’s reputation or brand;
world grain stocks, available farm acres, soil conditions, harvest yields, prices for commodities and livestock, input costs (e.g., fertilizer), and availability of transport for crops; and
housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment.

Further information concerning the company and its businesses, including factors that could materially affect the company’s financial results, is included in the company’s other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q).

9


DEERE & COMPANY

FIRST QUARTER 2023 PRESS RELEASE

(In millions of dollars) Unaudited

Three Months Ended

    

January 29

    

January 30

    

%

 

    

2023

    

2022

    

Change

Net sales and revenues:

Production & precision ag net sales

$

5,198

$

3,356

 

+55

Small ag & turf net sales

3,001

2,631

+14

Construction & forestry net sales

 

3,203

 

2,544

 

+26

Financial services revenues

 

1,040

 

870

 

+20

Other revenues

 

210

 

168

 

+25

Total net sales and revenues

$

12,652

$

9,569

 

+32

Operating profit: *

Production & precision ag

$

1,208

$

296

 

+308

Small ag & turf

447

371

+20

Construction & forestry

 

625

 

272

 

+130

Financial services

 

238

 

296

 

-20

Total operating profit

 

2,518

 

1,235

 

+104

Reconciling items **

 

(22)

 

(82)

 

-73

Income taxes

 

(537)

 

(250)

 

+115

Net income attributable to Deere & Company

$

1,959

$

903

 

+117

*     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.

**   Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

10


DEERE & COMPANY

STATEMENTS OF CONSOLIDATED INCOME

For the Three Months Ended January 29, 2023 and January 30, 2022

(In millions of dollars and shares except per share amounts) Unaudited

    

2023

    

2022

Net Sales and Revenues

Net sales

$

11,402

$

8,531

Finance and interest income

 

994

 

800

Other income

 

256

 

238

Total

 

12,652

 

9,569

Costs and Expenses

Cost of sales

 

7,934

 

6,695

Research and development expenses

 

495

 

402

Selling, administrative and general expenses

 

952

 

781

Interest expense

 

479

 

229

Other operating expenses

 

299

 

311

Total

 

10,159

 

8,418

Income of Consolidated Group before Income Taxes

 

2,493

 

1,151

Provision for income taxes

 

537

 

250

Income of Consolidated Group

 

1,956

 

901

Equity in income of unconsolidated affiliates

 

1

 

3

Net Income

 

1,957

 

904

Less: Net income (loss) attributable to noncontrolling interests

 

(2)

 

1

Net Income Attributable to Deere & Company

$

1,959

$

903

Per Share Data

Basic

$

6.58

$

2.94

Diluted

$

6.55

$

2.92

Dividends declared

$

1.20

$

1.05

Dividends paid

$

1.13

$

1.05

Average Shares Outstanding

Basic

 

297.6

 

307.4

Diluted

 

299.1

 

309.4

See Condensed Notes to Interim Consolidated Financial Statements.

11


DEERE & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars) Unaudited

January 29

October 30

January 30

    

2023

    

2022

    

2022

Assets

Cash and cash equivalents

$

3,976

$

4,774

$

4,472

Marketable securities

 

852

 

734

 

735

Trade accounts and notes receivable - net

 

7,609

 

6,410

 

4,855

Financing receivables - net

 

36,882

 

36,634

 

33,191

Financing receivables securitized - net

 

5,089

 

5,936

 

3,516

Other receivables

 

1,992

 

2,492

 

1,936

Equipment on operating leases - net

 

6,502

 

6,623

 

6,624

Inventories

 

10,056

 

8,495

 

7,935

Property and equipment - net

 

6,212

 

6,056

 

5,665

Goodwill

 

3,891

 

3,687

 

3,192

Other intangible assets - net

 

1,255

 

1,218

 

1,209

Retirement benefits

 

3,793

 

3,730

 

3,158

Deferred income taxes

 

914

 

824

 

923

Other assets

 

2,597

 

2,417

 

2,203

Total Assets

$

91,620

$

90,030

$

79,614

Liabilities and Stockholders’ Equity

Liabilities

Short-term borrowings

$

14,129

$

12,592

$

10,990

Short-term securitization borrowings

 

4,864

 

5,711

 

3,482

Accounts payable and accrued expenses

 

13,108

 

14,822

 

10,651

Deferred income taxes

 

519

 

495

 

556

Long-term borrowings

 

35,071

 

33,596

 

32,838

Retirement benefits and other liabilities

 

2,493

 

2,457

 

3,289

Total liabilities

 

70,184

 

69,673

 

61,806

Redeemable noncontrolling interest

100

92

Stockholders’ Equity

Total Deere & Company stockholders’ equity

 

21,332

 

20,262

 

17,804

Noncontrolling interests

 

4

 

3

 

4

Total stockholders’ equity

 

21,336

 

20,265

 

17,808

Total Liabilities and Stockholders’ Equity

$

91,620

$

90,030

$

79,614

See Condensed Notes to Interim Consolidated Financial Statements.

12


DEERE & COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

For the Three Months Ended January 29, 2023 and January 30, 2022

(In millions of dollars) Unaudited

    

2023

    

2022

Cash Flows from Operating Activities

Net income

$

1,957

$

904

Adjustments to reconcile net income to net cash used for operating activities:

Provision (credit) for credit losses

 

(130)

 

Provision for depreciation and amortization

 

494

 

486

Share-based compensation expense

 

23

 

18

Provision (credit) for deferred income taxes

 

(56)

 

210

Changes in assets and liabilities:

Trade, notes, and financing receivables related to sales

 

(1,015)

 

(106)

Inventories

 

(1,279)

 

(1,297)

Accounts payable and accrued expenses

 

(1,577)

 

(1,554)

Accrued income taxes payable/receivable

 

199

 

(184)

Retirement benefits

 

(48)

 

(1,010)

Other

 

186

 

(20)

Net cash used for operating activities

 

(1,246)

 

(2,553)

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

 

7,198

 

6,435

Proceeds from sales of equipment on operating leases

 

497

 

479

Cost of receivables acquired (excluding receivables related to sales)

 

(6,322)

 

(5,603)

Acquisitions of businesses, net of cash acquired

(24)

Purchases of property and equipment

 

(315)

 

(193)

Cost of equipment on operating leases acquired

 

(497)

 

(391)

Collateral on derivatives - net

345

(13)

Other

 

(146)

 

(42)

Net cash provided by investing activities

 

760

 

648

Cash Flows from Financing Activities

Increase (decrease) in total short-term borrowings

 

697

 

(1,018)

Proceeds from long-term borrowings

 

2,505

 

2,353

Payments of long-term borrowings

 

(1,925)

 

(1,940)

Proceeds from issuance of common stock

 

21

 

11

Repurchases of common stock

 

(1,257)

 

(623)

Dividends paid

 

(341)

 

(327)

Other

 

(39)

 

(33)

Net cash used for financing activities

 

(339)

 

(1,577)

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

 

62

 

(74)

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

 

(763)

 

(3,556)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

 

4,941

 

8,125

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

4,178

$

4,569

See Condensed Notes to Interim Consolidated Financial Statements.

13


DEERE & COMPANY

Condensed Notes to Interim Consolidated Financial Statements

(In millions of dollars) Unaudited

(1)In the first quarter of 2022, the company had a one-time payment related to the ratification of the UAW collective bargaining agreement, totaling $90 million.

 

Production & Precision Ag

 

Small Ag & Turf

 

Construction & Forestry

 

Total

UAW ratification bonus – Cost of sales

$

53

$

9

$

28

$

90

(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)The consolidated financial statements represent the consolidation of all Deere & Company’s subsidiaries. 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. In the supplemental consolidating data in Note 4 to the financial statements, the “Equipment Operations” represents the enterprise without “Financial Services”, which include the company’s production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within “Financial Services.”

14


DEERE & COMPANY

(4) SUPPLEMENTAL CONSOLIDATING DATA

STATEMENTS OF INCOME

For the Three Months Ended January 29, 2023 and January 30, 2022

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

 

2023

  

2022

  

2023

  

2022

  

2023

  

2022

  

2023

  

2022

Net Sales and Revenues

Net sales

$

11,402

$

8,531

$

11,402

$

8,531

Finance and interest income

 

114

 

34

$

1,067

$

829

$

(187)

$

(63)

994

800

1

Other income

 

234

 

217

 

177

 

87

 

(155)

 

(66)

 

256

 

238

2, 3

Total

 

11,750

 

8,782

 

1,244

 

916

 

(342)

 

(129)

 

12,652

 

9,569

Costs and Expenses

Cost of sales

 

7,940

 

6,696

(6)

(1)

7,934

6,695

4

Research and development expenses

 

495

 

402

495

402

Selling, administrative and general expenses

 

783

 

657

 

172

 

126

 

(3)

 

(2)

 

952

 

781

4

Interest expense

 

101

 

90

 

442

 

158

 

(64)

 

(19)

 

479

 

229

5

Interest compensation to Financial Services

 

123

 

44

(123)

(44)

 

5

Other operating expenses

 

53

 

39

 

392

 

335

 

(146)

 

(63)

 

299

 

311

6, 7

Total

 

9,495

 

7,928

 

1,006

 

619

 

(342)

 

(129)

 

10,159

 

8,418

Income before Income Taxes

 

2,255

 

854

 

238

 

297

 

 

 

2,493

 

1,151

Provision for income taxes

 

483

 

182

 

54

 

68

 

 

 

537

 

250

Income after Income Taxes

 

1,772

 

672

 

184

 

229

 

 

 

1,956

 

901

Equity in income of unconsolidated affiliates

 

 

1

1

2

1

3

Net Income

 

1,772

 

673

 

185

 

231

 

 

 

1,957

 

904

Less: Net income (loss) attributable to noncontrolling interests

 

(2)

 

1

(2)

1

Net Income Attributable to Deere & Company

$

1,774

$

672

$

185

$

231

$

1,959

$

903

1 Elimination of Financial Services’ interest income earned from Equipment Operations.

2 Elimination of Equipment Operations’ margin from inventory transferred to equipment on operating leases.

3 Elimination of Financial Services’ income related to intercompany guarantees of investments in certain international markets and intercompany service revenue.

4 Elimination of intercompany service fees.

5 Elimination of Equipment Operations’ interest expense to Financial Services.

6 Elimination of Financial Services’ lease depreciation expense related to inventory transferred to equipment on operating leases.

7 Elimination of Equipment Operations’ expense related to intercompany guarantees of investments in certain international markets and intercompany service expenses.

15


DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

CONDENSED BALANCE SHEETS

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

 

Jan 29

 

Oct 30

 

Jan 30

 

Jan 29

 

Oct 30

 

Jan 30

 

Jan 29

 

Oct 30

 

Jan 30

 

Jan 29

 

Oct 30

 

Jan 30

 

2023

 

2022

 

2022

 

2023

 

2022

 

2022

 

2023

 

2022

 

2022

 

2023

 

2022

 

2022

  

Assets

Cash and cash equivalents

$

2,665

$

3,767

$

3,596

$

1,311

$

1,007

$

876

$

3,976

$

4,774

$

4,472

Marketable securities

18

 

61

 

2

 

834

 

673

 

733

 

 

 

 

852

 

734

 

735

Receivables from Financial Services

 

5,348

 

6,569

 

5,307

$

(5,348)

$

(6,569)

$

(5,307)

8

Trade accounts and notes receivable - net

 

1,342

 

1,273

 

996

 

7,827

 

6,434

 

4,843

 

(1,560)

 

(1,297)

 

(984)

 

7,609

 

6,410

 

4,855

9

Financing receivables - net

 

51

 

47

 

56

 

36,831

 

36,587

 

33,135

 

 

 

 

36,882

 

36,634

 

33,191

Financing receivables securitized - net

9

 

5,089

 

5,936

 

3,507

 

 

 

 

5,089

 

5,936

 

3,516

Other receivables

 

1,583

 

1,670

 

1,818

 

489

 

832

 

153

 

(80)

 

(10)

 

(35)

 

1,992

 

2,492

 

1,936

9

Equipment on operating leases - net

 

6,502

 

6,623

 

6,624

 

 

 

 

6,502

 

6,623

 

6,624

Inventories

 

10,056

 

8,495

 

7,935

10,056

8,495

7,935

Property and equipment - net

 

6,178

 

6,021

 

5,629

 

34

 

35

 

36

 

 

 

 

6,212

 

6,056

 

5,665

Goodwill

 

3,891

 

3,687

 

3,192

3,891

3,687

3,192

Other intangible assets - net

 

1,255

 

1,218

 

1,209

 

 

 

 

1,255

 

1,218

 

1,209

Retirement benefits

 

3,728

 

3,666

 

3,095

 

67

 

66

 

65

 

(2)

 

(2)

 

(2)

 

3,793

 

3,730

 

3,158

10

Deferred income taxes

 

1,015

 

940

 

1,095

 

53

 

45

 

50

 

(154)

 

(161)

 

(222)

 

914

 

824

 

923

11

Other assets

 

1,936

 

1,794

 

1,730

 

684

 

626

 

477

 

(23)

 

(3)

 

(4)

 

2,597

 

2,417

 

2,203

9

Total Assets

$

39,066

$

39,208

$

35,669

$

59,721

$

58,864

$

50,499

$

(7,167)

$

(8,042)

$

(6,554)

$

91,620

$

90,030

$

79,614

Liabilities and Stockholders’ Equity

Liabilities

Short-term borrowings

$

969

$

1,040

$

1,516

$

13,160

$

11,552

$

9,474

$

14,129

$

12,592

$

10,990

Short-term securitization borrowings

8

 

4,864

 

5,711

 

3,474

 

 

 

 

4,864

 

5,711

 

3,482

Payables to Equipment Operations

 

 

 

 

5,348

 

6,569

 

5,307

$

(5,348)

$

(6,569)

$

(5,307)

 

 

 

8

Accounts payable and accrued expenses

 

11,819

 

12,962

 

9,704

 

2,952

 

3,170

 

1,970

 

(1,663)

 

(1,310)

 

(1,023)

 

13,108

 

14,822

 

10,651

9

Deferred income taxes

 

404

 

380

 

425

 

269

 

276

 

353

 

(154)

 

(161)

 

(222)

 

519

 

495

 

556

11

Long-term borrowings

 

8,155

 

7,917

 

8,760

 

26,916

 

25,679

 

24,078

 

 

 

 

35,071

 

33,596

 

32,838

Retirement benefits and other liabilities

 

2,384

 

2,351

 

3,182

 

111

 

108

 

109

 

(2)

 

(2)

 

(2)

 

2,493

 

2,457

 

3,289

10

Total liabilities

 

23,731

 

24,650

 

23,595

 

53,620

 

53,065

 

44,765

 

(7,167)

 

(8,042)

 

(6,554)

 

70,184

 

69,673

 

61,806

Redeemable noncontrolling interest

100

92

100

92

Stockholders’ Equity

Total Deere & Company stockholders’ equity

 

21,332

 

20,262

 

17,804

 

6,101

 

5,799

 

5,734

 

(6,101)

 

(5,799)

 

(5,734)

 

21,332

 

20,262

 

17,804

12

Noncontrolling interests

 

4

 

3

 

4

4

3

4

Financial Services equity

(6,101)

(5,799)

(5,734)

6,101

5,799

5,734

12

Adjusted total stockholders' equity

 

15,235

 

14,466

 

12,074

 

6,101

 

5,799

 

5,734

 

 

 

 

21,336

 

20,265

 

17,808

Total Liabilities and Stockholders’ Equity

$

39,066

$

39,208

$

35,669

$

59,721

$

58,864

$

50,499

$

(7,167)

$

(8,042)

$

(6,554)

$

91,620

$

90,030

$

79,614

8 Elimination of receivables / payables between Equipment Operations and Financial Services.

9 Primarily reclassification of sales incentive accruals on receivables sold to Financial Services.

10 Reclassification of net pension assets / liabilities.

11 Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.

12 Elimination of Financial Services’ equity.

16


DEERE & COMPANY

SUPPLEMENTAL CONSOLIDATING DATA (Continued)

STATEMENTS OF CASH FLOWS

For the Three Months Ended January 29, 2023 and January 30, 2022

(In millions of dollars) Unaudited

EQUIPMENT

FINANCIAL

OPERATIONS

SERVICES

ELIMINATIONS

CONSOLIDATED

  

2023

  

2022

   

2023

  

2022

   

2023

  

2022

   

2023

  

2022

    

Cash Flows from Operating Activities

Net income

$

1,772

$

673

$

185

$

231

$

1,957

$

904

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Provision (credit) for credit losses

 

1

 

(2)

 

(131)

 

2

 

 

 

(130)

 

Provision for depreciation and amortization

 

279

 

257

 

252

 

266

$

(37)

$

(37)

 

494

 

486

13

Share-based compensation expense

23

18

23

18

14

Distributed earnings of Financial Services

 

3

 

42

 

 

 

(3)

 

(42)

 

 

15

Provision (credit) for deferred income taxes

 

(39)

 

223

 

(17)

 

(13)

 

 

 

(56)

 

210

Changes in assets and liabilities:

Trade, notes, and financing receivables related to sales

 

(23)

 

158

(992)

(264)

(1,015)

(106)

16, 18, 19

Inventories

 

(1,254)

 

(1,277)

(25)

(20)

(1,279)

(1,297)

17

Accounts payable and accrued expenses

 

(1,458)

 

(1,346)

 

145

 

(66)

 

(264)

 

(142)

 

(1,577)

 

(1,554)

18

Accrued income taxes payable/receivable

 

192

 

(192)

 

7

 

8

 

 

 

199

 

(184)

Retirement benefits

 

(49)

 

(1,012)

 

1

 

2

 

 

 

(48)

 

(1,010)

Other

 

17

 

(12)

 

163

 

(19)

 

6

 

11

 

186

 

(20)

13, 14, 17

Net cash provided by (used for) operating activities

 

(559)

 

(2,488)

 

605

 

411

 

(1,292)

 

(476)

 

(1,246)

 

(2,553)

Cash Flows from Investing Activities

Collections of receivables (excluding receivables related to sales)

 

7,495

 

6,845

 

(297)

 

(410)

 

7,198

 

6,435

16

Proceeds from sales of equipment on operating leases

 

497

 

479

 

 

 

497

 

479

Cost of receivables acquired (excluding receivables related to sales)

 

(6,375)

 

(5,719)

 

53

 

116

 

(6,322)

 

(5,603)

16

Acquisitions of businesses, net of cash acquired

(24)

(24)

Purchases of property and equipment

 

(315)

 

(193)

 

 

 

 

 

(315)

 

(193)

Cost of equipment on operating leases acquired

 

(531)

 

(419)

 

34

 

28

 

(497)

 

(391)

17

Increase in trade and wholesale receivables

 

(1,499)

 

(684)

 

1,499

 

684

 

 

16

Collateral on derivatives - net

4

345

(17)

345

(13)

Other

 

(9)

 

(22)

 

(137)

 

(36)

 

 

16

 

(146)

 

(42)

19

Net cash provided by (used for) investing activities

 

(324)

 

(235)

 

(205)

 

449

 

1,289

 

434

 

760

 

648

Cash Flows from Financing Activities

Increase (decrease) in total short-term borrowings

 

(136)

 

123

 

833

 

(1,141)

 

 

 

697

 

(1,018)

Change in intercompany receivables/payables

 

1,469

 

150

 

(1,469)

 

(150)

 

 

 

 

Proceeds from long-term borrowings

 

1

 

18

 

2,504

 

2,335

 

 

 

2,505

 

2,353

Payments of long-term borrowings

 

 

(124)

 

(1,925)

 

(1,816)

 

 

 

(1,925)

 

(1,940)

Proceeds from issuance of common stock

 

21

 

11

21

11

Repurchases of common stock

 

(1,257)

 

(623)

(1,257)

(623)

Dividends paid

 

(341)

 

(327)

 

(3)

 

(42)

 

3

 

42

 

(341)

 

(327)

15

Other

 

(27)

 

(22)

 

(12)

 

(11)

 

 

 

(39)

 

(33)

Net cash used for financing activities

 

(270)

 

(794)

 

(72)

 

(825)

 

3

 

42

 

(339)

 

(1,577)

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

 

48

 

(75)

 

14

 

1

 

 

 

62

 

(74)

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

 

(1,105)

 

(3,592)

 

342

 

36

 

 

 

(763)

 

(3,556)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

 

3,781

 

7,200

 

1,160

 

925

 

 

 

4,941

 

8,125

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

2,676

$

3,608

$

1,502

$

961

$

4,178

$

4,569

13 Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.

14 Reclassification of share-based compensation expense.

15 Elimination of dividends from Financial Services to the Equipment Operations, which are included in the Equipment Operations operating activities.

16 Primarily reclassification of receivables related to the sale of equipment.

17 Reclassification of direct lease agreements with retail customers.

18 Reclassification of sales incentive accruals on receivables sold to Financial Services.

19 Elimination and reclassification of the effects of Financial Services partial financing of the construction and forestry retail locations sales and subsequent collection of those amounts.

17