UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: May 22, 2015
(Date of earliest event reported)
DEERE & COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE |
|
1-4121 |
|
36-2382580 |
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309) 765-8000
(Registrants telephone number, including area code)
___________________________________________________
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Items 2.02
and 8.01 |
Results of Operations and Financial Condition and Other Events. |
|
|
|
The following consists of Deere & Companys press release dated May 22, 2015 concerning Second Quarter of Fiscal 2015 financial results and supplemental financial information filed as Exhibit 99.1 to this report and incorporated by reference herein. |
|
|
Item 9.01 |
Financial Statements and Exhibits. |
|
|
|
(d) Exhibits |
|
|
|
(99.1) Press release and supplemental financial information (Filed herewith) |
|
|
Items 2.02 |
|
and 7.01 |
Results of Operations and Financial Condition and Regulation FD Disclosure (Furnished herewith) |
|
|
|
The attached schedules of Other Financial Information (Exhibit 99.2) and Second Quarter 2015 Earnings Conference Call Information (Exhibit 99.3) are furnished under Form 8-K Items 2.02 and 7.01. The information is not filed for purposes of the Securities Exchange Act of 1934 and is not deemed incorporated by reference by any general statements incorporating by reference this report or future filings into any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Deere & Company specifically incorporates the information by reference. |
2
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
DEERE & COMPANY |
|
|
|
|
|
|
|
By: |
/s/ Todd E. Davies |
|
|
Todd E. Davies |
|
|
Secretary |
|
|
|
Dated: May 22, 2015 |
|
|
3
Exhibit Index
Number and Description of Exhibit
4
|
Exhibit 99.1 |
|
(Filed herewith) |
NEWS RELEASE
News Media Contact:
Ken Golden
Director, Global Public Relations
309-765-5678
Deere Announces Second-Quarter Earnings of $690 Million
· Slowdown in global farm economy leads to lower sales and earnings.
· Well-rounded business lineup supports performance.
· Results aided by solid execution and cost management.
· Full-year earnings forecast increased to $1.9 billion.
MOLINE, Illinois (May 22, 2015) Net income attributable to Deere & Company was $690.5 million, or $2.03 per share, for the second quarter ended April 30, compared with $980.7 million, or $2.65 per share, for the same period last year.
For the first six months of the year, net income attributable to Deere & Company was $1.077 billion, or $3.14 per share, compared with $1.662 billion, or $4.46 per share, last year.
Worldwide net sales and revenues decreased 18 percent, to $8.171 billion, for the second quarter and decreased 17 percent, to $14.554 billion, for six months. Net sales of the equipment operations were $7.399 billion for the quarter and $13.004 billion for six months, compared with $9.246 billion and $16.195 billion for the periods last year.
John Deeres second-quarter results were noteworthy in light of the weak conditions that continue to affect the global agricultural sector, said Samuel R. Allen, chairman and chief executive officer. Our performance reflected the adept execution of our operating plans and contributions of a well-rounded business lineup. Deeres construction and forestry and financial-services divisions had higher results for the quarter, and our agriculture and turf operations remained solidly profitable despite lower demand for large models of farm machinery. We also saw benefits from our success developing a more responsive cost and asset structure, a fact that gives our performance a greater degree of resilience.
Summary of Operations
Net sales of the worldwide equipment operations declined 20 percent for the quarter and six months compared with the same periods a year ago. Sales included price realization
Deere Announces Second-Quarter Earnings |
5 |
of 2 percent for both periods and an unfavorable currency-translation effect of 5 percent for the quarter and 4 percent for six months. Equipment net sales in the United States and Canada decreased 14 percent for the quarter and year to date. Outside the U.S. and Canada, net sales decreased 28 percent for the quarter and six months, with unfavorable currency-translation effects of 10 percent and 8 percent for the periods.
Deeres equipment operations reported operating profit of $828 million for the quarter and $1.242 billion for six months, compared with $1.361 billion and $2.252 billion last year. The declines for both periods were due primarily to lower shipment volumes, the impact of a less favorable product mix and the unfavorable effects of foreign-currency exchange, partially offset by price realization and lower selling, administrative and general expenses.
Net income of the companys equipment operations was $524 million for the second quarter and $764 million for the first six months, compared with $838 million and $1.381 billion in 2014. In addition to the operating factors mentioned above, a lower effective tax rate benefited both quarterly and six-month results.
Financial services reported net income attributable to Deere & Company of $169.8 million for the quarter and $326.6 million for six months compared with $147.7 million and $289.9 million last year. The quarters improvement was primarily due to a gain on the previously announced sale of the crop insurance business, partially offset by less favorable financing spreads. Benefiting year-to-date results was the crop insurance divestiture and higher crop insurance margins prior to the sale, as well as growth in the credit portfolio. These factors were partially offset by less favorable financing spreads. Last years six-month results benefited from a more favorable effective tax rate.
Company Outlook & Summary
Company equipment sales are projected to decrease about 19 percent for fiscal 2015 and to be about 17 percent lower for the third quarter compared with year-ago periods. Included in the forecast is a negative foreign-currency translation effect of about 4 percent for the full year and 6 percent for the third quarter. For fiscal 2015, net income attributable to Deere & Company is anticipated to be about $1.9 billion.
John Deere expects to be solidly profitable in 2015, with the year ranking among our stronger ones in sales and earnings despite the pullback in the farm sector, Allen said. Such an achievement illustrates our success establishing a wider range of revenue sources and a more durable business model. All in all, we remain confident in the companys present
Deere Announces Second-Quarter Earnings |
6 |
direction and in its ability to meet customer needs for advanced machinery and innovative services in the years ahead.
* * *
Equipment Division Performance
Agriculture & Turf. Sales fell 25 percent for the quarter and 26 percent for six months due largely to lower shipment volumes and the unfavorable effects of currency translation. These factors were partially offset by price realization.
Operating profit was $639 million for the quarter and $907 million year to date, compared with $1.229 billion and $2.026 billion, respectively, last year. Lower results for both periods were driven primarily by lower shipment volumes and a less favorable sales mix, partially offset by price realization and lower selling, administrative and general expenses. Additionally, results for the quarter were impacted by the unfavorable effects of foreign-currency exchange.
Construction & Forestry. Construction and forestry sales increased 2 percent for the quarter and 7 percent for six months mainly as a result of higher shipment volumes and price realization.
Operating profit was $189 million for the quarter and $335 million for six months, compared with $132 million and $226 million for the corresponding periods last year. Operating profit improved for the quarter mainly due to price realization and lower selling, administrative and general expenses, partially offset by the unfavorable effects of foreign- currency exchange. Six-month results were higher primarily due to higher shipment volumes and price realization, partially offset by unfavorable foreign-currency exchange effects.
Market Conditions & Outlook
Agriculture & Turf. Deeres worldwide sales of agriculture and turf equipment are forecast to decrease by about 24 percent for fiscal-year 2015, including a negative currency-translation effect of about 5 percent.
Lower commodity prices and falling farm incomes are putting pressure on demand for agricultural machinery, especially for larger models. Conditions are more positive in the U.S. livestock sector, supporting the sale of smaller sizes of equipment. Based on these factors, industry sales for agricultural equipment in the U.S. and Canada are forecast to be down about 25 percent for 2015.
Deere Announces Second-Quarter Earnings |
7 |
Full-year 2015 industry sales in the EU28 are forecast to be down about 10 percent, with the decline attributable to lower crop prices and farm incomes as well as pressure on the dairy sector. In South America, industry sales of tractors and combines are projected to be down 15 to 20 percent mainly as a result of economic uncertainty in Brazil and higher interest rates on government-sponsored financing. Industry sales in the Commonwealth of Independent States are expected to be down significantly due to economic pressures and tight credit conditions in the region. Asian sales are projected to be down modestly, with most of the decline occurring in China and India.
Industry sales of turf and utility equipment in the U.S. and Canada are expected to be flat to up 5 percent for 2015, benefiting from general economic growth.
Construction & Forestry. Deeres worldwide sales of construction and forestry equipment are forecast to increase by about 2 percent for 2015, including a negative currency-translation effect of about 3 percent.
The sales improvement reflects economic growth and higher housing starts in the U.S. offset in part by weakening conditions in the energy sector and energy-producing regions as well as lower sales outside the U.S. and Canada. Global forestry sales are expected to hold steady with the attractive levels of 2014, as gains in the U.S. and Europe are offset by declines elsewhere.
Financial Services. Fiscal-year 2015 net income attributable to Deere & Company for the financial services operations is expected to be approximately $630 million. The outlook reflects an increase from last year primarily due to the gain on the sale of the crop insurance business and growth in the credit portfolio, partially offset by less favorable financing spreads, an expected increase in the provision for credit losses from 2014s low level, and a less favorable tax rate.
John Deere Capital Corporation
The following is disclosed on behalf of the companys 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.
Net income attributable to John Deere Capital Corporation was $115.9 million for the second quarter and $249.5 million year to date, compared with $124.3 million and $260.8 million for the respective periods last year. The decline for the quarter was primarily due to less favorable financing spreads and a higher provision for credit losses, partially offset by lower selling, administrative and general expenses. The decline in year-to-date results is primarily due to less favorable financing spreads and a higher provision for credit losses,
Deere Announces Second-Quarter Earnings |
8 |
partially offset by growth in the credit portfolio and lower selling, administrative and general expenses. Last years year-to-date results also benefited from a favorable effective tax rate.
Net receivables and leases financed by JDCC were $32.877 billion at April 30, 2015, compared with $32.231 billion last year.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements under Company Outlook & Summary, Market Conditions & Outlook, and other forward-looking statements herein that relate to future events, expectations, trends and operating periods involve certain factors that are subject to change, and important risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of the companys businesses.
The companys agricultural equipment business is subject to a number of uncertainties including the many interrelated factors that affect farmers confidence. These factors include demand for agricultural products, world grain stocks, weather conditions (including its effects on timely planting and harvesting), soil conditions (including low subsoil moisture), harvest yields, prices for commodities and livestock, crop and livestock production expenses, availability of transport for crops, the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production), real estate values, available acreage for farming, the land ownership policies of various governments, changes in government farm programs and policies (including those in Argentina, Brazil, China, the European Union, India, Russia and the U.S.), international reaction to such programs, changes in and effects of crop insurance programs, global trade agreements, animal diseases and their effects on poultry, beef and pork consumption and prices, crop pests and diseases, and the level of farm product exports (including concerns about genetically modified organisms).
Factors affecting the outlook for the companys turf and utility equipment include consumer confidence, weather conditions, customer profitability, consumer borrowing patterns, consumer purchasing preferences, housing starts, infrastructure investment, spending by municipalities and golf courses, and consumable input costs.
Consumer spending patterns, real estate and housing prices, the number of housing starts and interest rates are especially important to sales of the companys construction and forestry equipment. The levels of public and non-residential construction also impact the
Deere Announces Second-Quarter Earnings |
9 |
results of the companys construction and forestry segment. Prices for pulp, paper, lumber and structural panels are important to sales of forestry equipment.
All of the companys businesses and its reported results are affected by general economic conditions in the global markets and industries in which the company operates, especially material changes in economic activity in these markets and industries; customer confidence in general economic conditions; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates; and inflation and deflation rates. Government spending and taxing could adversely affect the economy, employment, consumer and corporate spending, and company results.
Customer and company operations and results could be affected by changes in weather patterns (including the effects of drought and drier than normal conditions in certain markets); the political and social stability of the global markets in which the company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts and the threat thereof and the response thereto; natural disasters; and the spread of major epidemics.
Significant changes in market liquidity conditions and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the companys earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the companys products and customer confidence and purchase decisions; borrowing and repayment practices; and the number and size of customer loan delinquencies and defaults. A debt crisis, in Europe or elsewhere, could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, suppliers, demand for equipment, and company operations and results. The companys investment management activities could be impaired by changes in the equity, bond and other financial markets, which would negatively affect earnings.
Additional factors that could materially affect the companys operations, access to capital, expenses and results include changes in and the impact of governmental trade, banking, monetary and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs and other areas, and governmental programs, policies, tariffs and sanctions in particular jurisdictions or for the benefit of certain industries or sectors (including protectionist, economic, punitive and expropriation policies and trade and licensing restrictions that could disrupt international commerce); actions by the U.S. Federal Reserve Board and other central banks; actions by the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading
Deere Announces Second-Quarter Earnings |
10 |
Commission and other financial regulators; actions by environmental, health and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, noise and the effects of climate change; changes in labor regulations; changes to accounting standards; changes in tax rates, estimates, and regulations and company actions related thereto; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies including changes in laws and regulations affecting the sectors in which the company operates. Trade, financial and other sanctions imposed by the U.S., the European Union, Russia and other countries could negatively impact company assets, operations, sales, forecasts and results. Customer and company operations and results also could be affected by changes to GPS radio frequency bands or their permitted uses.
Other factors that could materially affect results include production, design and technological innovations and difficulties, including capacity and supply constraints and prices; the availability and prices of strategically sourced materials, components and whole goods; delays or disruptions in the companys supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations or distribution; the failure of suppliers to comply with laws, regulations and company policy pertaining to employment, human rights, health, safety, the environment and other ethical business practices; events that damage the companys reputation or brand; significant investigations, claims, lawsuits or other legal proceedings; start-up of new plants and new products; the success of new product initiatives and customer acceptance of new products; changes in customer product preferences and sales mix whether as a result of changes in equipment design to meet government regulations or for other reasons; gaps or limitations in rural broadband coverage, capacity and speed needed to support technology solutions; oil and energy prices, supplies and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices especially as to levels of new and used field inventories; labor relations and contracts; acquisitions and divestitures of businesses; the integration of new businesses; the implementation of organizational changes; difficulties related to the conversion and implementation of enterprise resource planning systems that disrupt business, negatively impact supply or distribution relationships or create higher than expected costs; security breaches and other disruptions to the companys information technology infrastructure; and changes in company declared dividends and common stock issuances and repurchases.
Deere Announces Second-Quarter Earnings |
11 |
Company results are also affected by changes in the level and funding of employee retirement benefits, changes in market values of investment assets, the level of interest and discount rates, and compensation, retirement and mortality rates which impact retirement benefit costs, and significant changes in health care costs including those which may result from governmental action.
The liquidity and ongoing profitability of John Deere Capital Corporation and other credit subsidiaries depend largely on timely access to capital in order to meet future cash flow requirements, to fund operations and costs associated with engaging in diversified funding activities, and to fund purchases of the companys products. If general economic conditions deteriorate or capital markets become volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.
The companys outlook is based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The company, except as required by law, undertakes no obligation to update or revise its outlook, whether as a result of new developments or otherwise. Further information concerning the company and its businesses, including factors that potentially could materially affect the companys financial results, is included in the companys other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the companys most recent annual report on Form 10-K and quarterly reports on Form 10-Q).
Deere Announces Second-Quarter Earnings |
12 |
Second Quarter 2015 Press Release |
(in millions of dollars) |
Unaudited |
|
|
Three Months Ended
April 30 |
|
Six Months Ended
April 30 |
|
2015 |
|
2014 |
|
%
Change |
|
2015 |
|
2014 |
|
%
Change |
Net sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
$ |
5,766 |
|
|
$ |
7,646 |
|
|
-25 |
|
$ |
9,847 |
|
|
$ |
13,242 |
|
|
-26 |
Construction and forestry |
1,633 |
|
|
1,600 |
|
|
+2 |
|
3,157 |
|
|
2,953 |
|
|
+7 |
Total net sales |
7,399 |
|
|
9,246 |
|
|
-20 |
|
13,004 |
|
|
16,195 |
|
|
-20 |
Financial services |
653 |
|
|
572 |
|
|
+14 |
|
1,301 |
|
|
1,159 |
|
|
+12 |
Other revenues |
119 |
|
|
130 |
|
|
-8 |
|
249 |
|
|
248 |
|
|
|
Total net sales and revenues |
$ |
8,171 |
|
|
$ |
9,948 |
|
|
-18 |
|
$ |
14,554 |
|
|
$ |
17,602 |
|
|
-17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit: * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture and turf |
$ |
639 |
|
|
$ |
1,229 |
|
|
-48 |
|
$ |
907 |
|
|
$ |
2,026 |
|
|
-55 |
Construction and forestry |
189 |
|
|
132 |
|
|
+43 |
|
335 |
|
|
226 |
|
|
+48 |
Financial services |
265 |
|
|
229 |
|
|
+16 |
|
498 |
|
|
411 |
|
|
+21 |
Total operating profit |
1,093 |
|
|
1,590 |
|
|
-31 |
|
1,740 |
|
|
2,663 |
|
|
-35 |
Reconciling items ** |
(79 |
) |
|
(130 |
) |
|
-39 |
|
(168 |
) |
|
(241 |
) |
|
-30 |
Income taxes |
(324 |
) |
|
(479 |
) |
|
-32 |
|
(495 |
) |
|
(760 |
) |
|
-35 |
Net income attributable to Deere & Company |
$ |
690 |
|
|
$ |
981 |
|
|
-30 |
|
$ |
1,077 |
|
|
$ |
1,662 |
|
|
-35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
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 and net income attributable to noncontrolling interests. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Three Months Ended April 30, 2015 and 2014 (In millions of dollars and shares except per share amounts) Unaudited |
|
|
2015 |
|
2014 |
|
Net Sales and Revenues |
|
|
|
|
Net sales |
|
$ |
7,398.5 |
|
|
$ |
9,246.2 |
|
|
|
Finance and interest income |
|
576.3 |
|
|
544.1 |
|
|
Other income |
|
195.9 |
|
|
157.6 |
|
|
Total |
|
8,170.7 |
|
|
9,947.9 |
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
Cost of sales |
|
5,694.2 |
|
|
6,871.8 |
|
|
Research and development expenses |
|
341.1 |
|
|
354.1 |
|
|
Selling, administrative and general expenses |
|
740.0 |
|
|
846.5 |
|
|
Interest expense |
|
165.5 |
|
|
165.8 |
|
|
Other operating expenses |
|
212.9 |
|
|
245.9 |
|
|
Total |
|
7,153.7 |
|
|
8,484.1 |
|
|
|
|
|
|
|
|
|
|
Income of Consolidated Group before Income Taxes |
|
1,017.0 |
|
|
1,463.8 |
|
|
Provision for income taxes |
|
324.0 |
|
|
479.0 |
|
|
Income of Consolidated Group |
|
693.0 |
|
|
984.8 |
|
|
Equity in loss of unconsolidated affiliates |
|
(2.2 |
) |
|
(3.6 |
) |
|
Net Income |
|
690.8 |
|
|
981.2 |
|
|
Less: Net income attributable to noncontrolling interests |
|
.3 |
|
|
.5 |
|
|
Net Income Attributable to Deere & Company |
|
$ |
690.5 |
|
|
$ |
980.7 |
|
|
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
Basic |
|
$ |
2.05 |
|
|
$ |
2.67 |
|
|
Diluted |
|
$ |
2.03 |
|
|
$ |
2.65 |
|
|
|
|
|
|
|
|
|
|
Average Shares Outstanding |
|
|
|
|
|
|
|
Basic |
|
337.1 |
|
|
366.6 |
|
|
Diluted |
|
339.7 |
|
|
369.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
14
DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Six Months Ended April 30, 2015 and 2014 (In millions of dollars and shares except per share amounts) Unaudited |
|
|
2015 |
|
2014 |
|
Net Sales and Revenues |
|
|
|
|
Net sales |
|
$ |
13,003.6 |
|
|
$ |
16,194.8 |
|
|
Finance and interest income |
|
1,169.9 |
|
|
1,075.6 |
|
|
Other income |
|
380.3 |
|
|
331.6 |
|
|
Total |
|
14,553.8 |
|
|
17,602.0 |
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
Cost of sales |
|
10,114.8 |
|
|
12,067.3 |
|
|
Research and development expenses |
|
674.3 |
|
|
677.8 |
|
|
Selling, administrative and general expenses |
|
1,398.9 |
|
|
1,612.5 |
|
|
Interest expense |
|
345.6 |
|
|
337.5 |
|
|
Other operating expenses |
|
435.5 |
|
|
478.2 |
|
|
Total |
|
12,969.1 |
|
|
15,173.3 |
|
|
|
|
|
|
|
|
|
|
Income of Consolidated Group before Income Taxes |
|
1,584.7 |
|
|
2,428.7 |
|
|
Provision for income taxes |
|
494.6 |
|
|
759.6 |
|
|
Income of Consolidated Group |
|
1,090.1 |
|
|
1,669.1 |
|
|
Equity in loss of unconsolidated affiliates |
|
(12.4 |
) |
|
(6.6 |
) |
|
Net Income |
|
1,077.7 |
|
|
1,662.5 |
|
|
Less: Net income attributable to noncontrolling interests |
|
.5 |
|
|
.7 |
|
|
Net Income Attributable to Deere & Company |
|
$ |
1,077.2 |
|
|
$ |
1,661.8 |
|
|
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
Basic |
|
$ |
3.17 |
|
|
$ |
4.50 |
|
|
Diluted |
|
$ |
3.14 |
|
|
$ |
4.46 |
|
|
|
|
|
|
|
|
|
|
Average Shares Outstanding |
|
|
|
|
|
|
|
Basic |
|
340.2 |
|
|
369.2 |
|
|
Diluted |
|
342.8 |
|
|
372.6 |
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements. |
|
|
|
|
|
|
|
|
|
|
|
15
DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (In millions of dollars) Unaudited |
|
|
|
April 30 |
|
October 31 |
|
April 30 |
|
|
2015 |
|
2014 |
|
2014 |
|
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
4,355.4 |
|
|
$ |
3,787.0 |
|
|
$ |
3,078.5 |
|
|
Marketable securities |
392.9 |
|
|
1,215.1 |
|
|
1,571.7 |
|
|
Receivables from unconsolidated affiliates |
46.4 |
|
|
30.2 |
|
|
38.3 |
|
|
Trade accounts and notes receivable - net |
4,717.1 |
|
|
3,277.6 |
|
|
5,119.7 |
|
|
Financing receivables - net |
24,745.8 |
|
|
27,422.2 |
|
|
25,496.1 |
|
|
Financing receivables securitized - net |
4,741.1 |
|
|
4,602.3 |
|
|
4,345.4 |
|
|
Other receivables |
873.4 |
|
|
1,500.3 |
|
|
1,194.2 |
|
|
Equipment on operating leases - net |
4,195.2 |
|
|
4,015.5 |
|
|
3,203.8 |
|
|
Inventories |
4,624.2 |
|
|
4,209.7 |
|
|
5,849.6 |
|
|
Property and equipment - net |
5,245.1 |
|
|
5,577.8 |
|
|
5,373.1 |
|
|
Investments in unconsolidated affiliates |
299.2 |
|
|
303.2 |
|
|
308.5 |
|
|
Goodwill |
737.0 |
|
|
791.2 |
|
|
839.6 |
|
|
Other intangible assets - net |
60.4 |
|
|
68.8 |
|
|
71.2 |
|
|
Retirement benefits |
313.9 |
|
|
262.0 |
|
|
580.7 |
|
|
Deferred income taxes |
2,659.4 |
|
|
2,776.6 |
|
|
2,458.1 |
|
|
Other assets |
1,587.5 |
|
|
1,496.9 |
|
|
1,249.2 |
|
|
Assets held for sale |
|
|
|
|
|
|
84.7 |
|
|
Total Assets |
$ |
59,594.0 |
|
|
$ |
61,336.4 |
|
|
$ |
60,862.4 |
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
Short-term borrowings |
$ |
8,989.0 |
|
|
$ |
8,019.2 |
|
|
$ |
8,763.0 |
|
|
Short-term securitization borrowings |
4,702.7 |
|
|
4,558.5 |
|
|
4,329.5 |
|
|
Payables to unconsolidated affiliates |
130.1 |
|
|
101.0 |
|
|
134.5 |
|
|
Accounts payable and accrued expenses |
7,260.2 |
|
|
8,554.1 |
|
|
8,150.3 |
|
|
Deferred income taxes |
149.3 |
|
|
160.9 |
|
|
162.0 |
|
|
Long-term borrowings |
23,622.8 |
|
|
24,380.7 |
|
|
23,166.9 |
|
|
Retirement benefits and other liabilities |
6,563.9 |
|
|
6,496.5 |
|
|
5,438.8 |
|
|
Liabilities held for sale |
|
|
|
|
|
|
49.8 |
|
|
Total liabilities |
51,418.0 |
|
|
52,270.9 |
|
|
50,194.8 |
|
|
Total Deere & Company stockholders equity |
8,173.8 |
|
|
9,062.6 |
|
|
10,665.3 |
|
|
Noncontrolling interests |
2.2 |
|
|
2.9 |
|
|
2.3 |
|
|
Total stockholders equity |
8,176.0 |
|
|
9,065.5 |
|
|
10,667.6 |
|
|
Total Liabilities and Stockholders Equity |
$ |
59,594.0 |
|
|
$ |
61,336.4 |
|
|
$ |
60,862.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Interim Consolidated Financial Statements. |
|
16
DEERE & COMPANY STATEMENT OF CONSOLIDATED CASH FLOWS For the Six Months Ended April 30, 2015 and 2014 (In millions of dollars) Unaudited |
|
|
2015 |
|
2014 |
Cash Flows from Operating Activities |
|
|
|
|
|
|
Net income |
|
$ |
1,077.7 |
|
|
$ |
1,662.5 |
|
Adjustments to reconcile net income to net cash used for operating activities: |
|
|
|
|
|
|
Provision for credit losses |
|
15.1 |
|
|
9.8 |
|
Provision for depreciation and amortization |
|
682.9 |
|
|
630.3 |
|
Impairment charges |
|
|
|
|
62.3 |
|
Share-based compensation expense |
|
28.7 |
|
|
44.7 |
|
Undistributed earnings of unconsolidated affiliates |
|
8.8 |
|
|
7.9 |
|
Provision (credit) for deferred income taxes |
|
117.8 |
|
|
(138.0 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
Trade, notes and financing receivables related to sales |
|
(860.8 |
) |
|
(1,692.8 |
) |
Insurance receivables |
|
333.4 |
|
|
175.4 |
|
Inventories |
|
(932.9 |
) |
|
(1,268.2 |
) |
Accounts payable and accrued expenses |
|
(698.3 |
) |
|
(578.7 |
) |
Accrued income taxes payable/receivable |
|
(76.3 |
) |
|
86.8 |
|
Retirement benefits |
|
186.6 |
|
|
138.0 |
|
Other |
|
(37.4 |
) |
|
28.1 |
|
Net cash used for operating activities |
|
(154.7 |
) |
|
(831.9 |
) |
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
Collections of receivables (excluding receivables related to sales) |
|
8,332.4 |
|
|
8,344.7 |
|
Proceeds from maturities and sales of marketable securities |
|
791.9 |
|
|
611.3 |
|
Proceeds from sales of equipment on operating leases |
|
552.3 |
|
|
570.9 |
|
Proceeds from sales of businesses, net of cash sold |
|
148.8 |
|
|
307.2 |
|
Cost of receivables acquired (excluding receivables related to sales) |
|
(7,426.1 |
) |
|
(8,409.3 |
) |
Purchases of marketable securities |
|
(33.9 |
) |
|
(562.8 |
) |
Purchases of property and equipment |
|
(324.3 |
) |
|
(426.2 |
) |
Cost of equipment on operating leases acquired |
|
(830.2 |
) |
|
(618.1 |
) |
Other |
|
(58.9 |
) |
|
(85.1 |
) |
Net cash provided by (used for) investing activities |
|
1,152.0 |
|
|
(267.4 |
) |
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
Increase in total short-term borrowings |
|
1,147.0 |
|
|
956.7 |
|
Proceeds from long-term borrowings |
|
2,512.2 |
|
|
4,253.8 |
|
Payments of long-term borrowings |
|
(2,453.3 |
) |
|
(3,135.5 |
) |
Proceeds from issuance of common stock |
|
86.1 |
|
|
108.7 |
|
Repurchases of common stock |
|
(1,173.9 |
) |
|
(1,093.4 |
) |
Dividends paid |
|
(415.8 |
) |
|
(382.3 |
) |
Excess tax benefits from share-based compensation |
|
11.7 |
|
|
24.2 |
|
Other |
|
(39.1 |
) |
|
(32.9 |
) |
Net cash provided by (used for) financing activities |
|
(325.1 |
) |
|
699.3 |
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
(103.8 |
) |
|
(25.5 |
) |
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
568.4 |
|
|
(425.5 |
) |
Cash and Cash Equivalents at Beginning of Period |
|
3,787.0 |
|
|
3,504.0 |
|
Cash and Cash Equivalents at End of Period |
|
$ |
4,355.4 |
|
|
$ |
3,078.5 |
|
|
See Condensed Notes to Interim Consolidated Financial Statements.
17
|
Condensed Notes to Interim Consolidated Financial Statements (Unaudited) |
|
|
(1) |
In March 2015, the Company closed the sale of all of the stock of its wholly-owned subsidiaries, John Deere Insurance Company and John Deere Risk Protection, Inc. (collectively the Crop Insurance operations) to Farmers Mutual Hail Insurance Company of Iowa. These operations were included in the Companys financial services operating segment. At January 31, 2015, total assets of $381 million and liabilities of $267 million were classified as held for sale in the consolidated financial statements, which consisted of the following: |
|
|
|
|
|
January 31, 2015 |
|
|
|
|
Cash and cash equivalents |
|
$ |
13 |
|
|
|
|
|
Marketable securities |
|
79 |
|
|
|
|
|
Other receivables |
|
265 |
|
|
|
|
|
Other intangible assets - net |
|
4 |
|
|
|
|
|
Other assets |
|
20 |
|
|
|
|
|
Total assets held for sale |
|
$ |
381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Account payable and accrued expenses, and Total liabilities held for sale |
|
$ |
267 |
|
|
|
|
|
|
|
The total amount of proceeds from the sale was approximately $154 million, including $5 million of cash and cash equivalents sold, with a gain recorded in other income of $41 million pretax and $38 million after-tax. The tax expense was partially offset by a change in a valuation allowance on a capital loss carryforward. The Company will provide certain business services for a fee during a transition period. |
|
|
(2) |
Dividends declared and paid on a per share basis were as follows: |
|
|
|
|
|
Three Months Ended April 30 |
|
Six Months Ended April 30 |
|
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared |
|
$ |
.60 |
|
$ |
.51 |
|
$ |
1.20 |
|
$ |
1.02 |
|
|
Dividends paid |
|
$ |
.60 |
|
$ |
.51 |
|
$ |
1.20 |
|
$ |
1.02 |
|
|
|
(3) |
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. |
|
|
(4) |
The consolidated financial statements represent the consolidation of all Deere & Companys subsidiaries. In the supplemental consolidating data in Note 5 to the financial statements, Equipment Operations include the Companys agriculture and turf operations and construction and forestry operations with Financial Services reflected on the equity basis. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
(5) SUPPLEMENTAL CONSOLIDATING DATA STATEMENT OF INCOME |
|
|
|
|
|
|
|
|
For the Three Months Ended April 30, 2015 and 2014 |
|
|
|
|
|
|
|
|
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Net Sales and Revenues |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
7,398.5 |
|
$ |
9,246.2 |
|
|
|
|
Finance and interest income |
|
17.5 |
|
18.6 |
|
$ |
623.6 |
|
$ |
591.8 |
Other income |
|
150.3 |
|
149.9 |
|
85.3 |
|
38.5 |
Total |
|
7,566.3 |
|
9,414.7 |
|
708.9 |
|
630.3 |
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
Cost of sales |
|
5,694.7 |
|
6,872.0 |
|
|
|
|
Research and development expenses |
|
341.1 |
|
354.1 |
|
|
|
|
Selling, administrative and general expenses |
|
620.4 |
|
719.2 |
|
121.8 |
|
129.5 |
Interest expense |
|
67.3 |
|
80.1 |
|
109.5 |
|
97.9 |
Interest compensation to Financial Services |
|
53.4 |
|
54.8 |
|
|
|
|
Other operating expenses |
|
37.2 |
|
99.3 |
|
212.8 |
|
174.3 |
Total |
|
6,814.1 |
|
8,179.5 |
|
444.1 |
|
401.7 |
|
|
|
|
|
|
|
|
|
Income of Consolidated Group before Income Taxes |
|
752.2 |
|
1,235.2 |
|
264.8 |
|
228.6 |
Provision for income taxes |
|
228.6 |
|
397.6 |
|
95.4 |
|
81.4 |
Income of Consolidated Group |
|
523.6 |
|
837.6 |
|
169.4 |
|
147.2 |
|
|
|
|
|
|
|
|
|
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
|
Financial Services |
|
169.8 |
|
147.7 |
|
.4 |
|
.5 |
Other |
|
(2.6) |
|
(4.1) |
|
|
|
|
Total |
|
167.2 |
|
143.6 |
|
.4 |
|
.5 |
Net Income |
|
690.8 |
|
981.2 |
|
169.8 |
|
147.7 |
Less: Net income attributable to noncontrolling interests |
|
.3 |
|
.5 |
|
|
|
|
Net Income Attributable to Deere & Company |
|
$ |
690.5 |
|
$ |
980.7 |
|
$ |
169.8 |
|
$ |
147.7 |
|
|
|
|
|
|
|
|
|
* Deere & Company with Financial Services on the equity basis.
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.
19
SUPPLEMENTAL CONSOLIDATING DATA (Continued) STATEMENT OF INCOME |
|
|
|
|
|
|
For the Six Months Ended April 30, 2015 and 2014 |
|
|
|
|
|
|
|
|
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Net Sales and Revenues |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
13,003.6 |
|
$ |
16,194.8 |
|
|
|
|
Finance and interest income |
|
38.0 |
|
35.8 |
|
$ |
1,256.6 |
|
$ |
1,161.0 |
Other income |
|
310.4 |
|
300.3 |
|
150.2 |
|
102.9 |
Total |
|
13,352.0 |
|
16,530.9 |
|
1,406.8 |
|
1,263.9 |
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
Cost of sales |
|
10,115.8 |
|
12,067.9 |
|
|
|
|
Research and development expenses |
|
674.3 |
|
677.8 |
|
|
|
|
Selling, administrative and general expenses |
|
1,160.6 |
|
1,362.3 |
|
243.0 |
|
255.4 |
Interest expense |
|
138.4 |
|
155.4 |
|
232.4 |
|
205.7 |
Interest compensation to Financial Services |
|
99.4 |
|
97.1 |
|
|
|
|
Other operating expenses |
|
76.2 |
|
151.9 |
|
434.0 |
|
392.6 |
Total |
|
12,264.7 |
|
14,512.4 |
|
909.4 |
|
853.7 |
|
|
|
|
|
|
|
|
|
Income of Consolidated Group before Income Taxes |
|
1,087.3 |
|
2,018.5 |
|
497.4 |
|
410.2 |
Provision for income taxes |
|
323.0 |
|
638.0 |
|
171.6 |
|
121.6 |
Income of Consolidated Group |
|
764.3 |
|
1,380.5 |
|
325.8 |
|
288.6 |
|
|
|
|
|
|
|
|
|
Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates |
|
|
|
|
|
|
|
|
Financial Services |
|
326.6 |
|
289.9 |
|
.8 |
|
1.3 |
Other |
|
(13.2) |
|
(7.9) |
|
|
|
|
Total |
|
313.4 |
|
282.0 |
|
.8 |
|
1.3 |
Net Income |
|
1,077.7 |
|
1,662.5 |
|
326.6 |
|
289.9 |
Less: Net income attributable to noncontrolling interests |
|
.5 |
|
.7 |
|
|
|
|
Net Income Attributable to Deere & Company |
|
$ |
1,077.2 |
|
$ |
1,661.8 |
|
$ |
326.6 |
|
$ |
289.9 |
|
|
|
|
|
|
|
|
|
* Deere & Company with Financial Services on the equity basis.
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.
20
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEET
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
|
|
|
April 30 2015 |
|
October 31 2014 |
|
April 30 2014 |
|
April 30 2015 |
|
October 31 2014 |
|
April 30 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,162.9 |
|
$ |
2,569.2 |
|
$ |
1,874.9 |
|
$ |
1,192.5 |
|
$ |
1,217.8 |
|
$ |
1,203.6 |
|
Marketable securities |
|
|
|
700.4 |
|
1,105.6 |
|
392.9 |
|
514.7 |
|
466.1 |
|
Receivables from unconsolidated subsidiaries and affiliates |
|
2,558.0 |
|
3,663.9 |
|
4,046.7 |
|
|
|
|
|
|
|
Trade accounts and notes receivable - net |
|
681.3 |
|
706.0 |
|
969.9 |
|
5,160.8 |
|
3,554.4 |
|
5,264.6 |
|
Financing receivables - net |
|
8.7 |
|
18.5 |
|
13.5 |
|
24,737.1 |
|
27,403.7 |
|
25,482.6 |
|
Financing receivables securitized - net |
|
|
|
|
|
|
|
4,741.1 |
|
4,602.3 |
|
4,345.4 |
|
Other receivables |
|
780.7 |
|
848.0 |
|
924.9 |
|
122.5 |
|
659.0 |
|
301.1 |
|
Equipment on operating leases - net |
|
|
|
|
|
|
|
4,195.2 |
|
4,015.5 |
|
3,203.8 |
|
Inventories |
|
4,624.2 |
|
4,209.7 |
|
5,849.6 |
|
|
|
|
|
|
|
Property and equipment - net |
|
5,191.7 |
|
5,522.5 |
|
5,316.8 |
|
53.4 |
|
55.3 |
|
56.3 |
|
Investments in unconsolidated subsidiaries and affiliates |
|
4,895.5 |
|
5,106.5 |
|
4,875.6 |
|
10.5 |
|
10.9 |
|
11.5 |
|
Goodwill |
|
737.0 |
|
791.2 |
|
839.6 |
|
|
|
|
|
|
|
Other intangible assets - net |
|
60.4 |
|
64.8 |
|
67.3 |
|
|
|
4.0 |
|
4.0 |
|
Retirement benefits |
|
314.3 |
|
263.5 |
|
546.9 |
|
29.0 |
|
32.9 |
|
35.5 |
|
Deferred income taxes |
|
2,991.2 |
|
2,981.9 |
|
2,683.4 |
|
62.9 |
|
64.9 |
|
68.8 |
|
Other assets |
|
889.9 |
|
850.6 |
|
667.7 |
|
700.2 |
|
648.2 |
|
583.6 |
|
Assets held for sale |
|
|
|
|
|
84.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
26,895.8 |
|
$ |
28,296.7 |
|
$ |
29,867.1 |
|
$ |
41,398.1 |
|
$ |
42,783.6 |
|
$ |
41,026.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
549.6 |
|
$ |
434.1 |
|
$ |
1,020.5 |
|
$ |
8,439.4 |
|
$ |
7,585.1 |
|
$ |
7,742.5 |
|
Short-term securitization borrowings |
|
|
|
|
|
|
|
4,702.7 |
|
4,558.5 |
|
4,329.5 |
|
Payables to unconsolidated subsidiaries and affiliates |
|
130.1 |
|
101.0 |
|
134.5 |
|
2,511.6 |
|
3,633.7 |
|
4,008.4 |
|
Accounts payable and accrued expenses |
|
6,964.0 |
|
7,518.4 |
|
7,728.4 |
|
1,453.5 |
|
2,027.0 |
|
1,570.6 |
|
Deferred income taxes |
|
79.3 |
|
87.1 |
|
88.0 |
|
464.8 |
|
344.1 |
|
368.1 |
|
Long-term borrowings |
|
4,488.9 |
|
4,642.5 |
|
4,816.7 |
|
19,133.9 |
|
19,738.2 |
|
18,350.2 |
|
Retirement benefits and other liabilities |
|
6,507.9 |
|
6,448.1 |
|
5,361.6 |
|
85.5 |
|
82.8 |
|
79.0 |
|
Liabilities held for sale |
|
|
|
|
|
49.8 |
|
|
|
|
|
|
|
Total liabilities |
|
18,719.8 |
|
19,231.2 |
|
19,199.5 |
|
36,791.4 |
|
37,969.4 |
|
36,448.3 |
|
Total Deere & Company stockholders equity |
|
8,173.8 |
|
9,062.6 |
|
10,665.3 |
|
4,606.7 |
|
4,814.2 |
|
4,578.6 |
|
Noncontrolling interests |
|
2.2 |
|
2.9 |
|
2.3 |
|
|
|
|
|
|
|
Total stockholders equity |
|
8,176.0 |
|
9,065.5 |
|
10,667.6 |
|
4,606.7 |
|
4,814.2 |
|
4,578.6 |
|
Total Liabilities and Stockholders Equity |
|
$ |
26,895.8 |
|
$ |
28,296.7 |
|
$ |
29,867.1 |
|
$ |
41,398.1 |
|
$ |
42,783.6 |
|
$ |
41,026.9 |
|
|
* Deere & Company with Financial Services on the equity basis. |
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.
21
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENT OF CASH FLOWS
For the Six Months Ended April 30, 2015 and 2014
(In millions of dollars) Unaudited |
|
EQUIPMENT OPERATIONS* |
|
FINANCIAL SERVICES |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,077.7 |
|
$ |
1,662.5 |
|
$ |
326.6 |
|
$ |
289.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
.3 |
|
1.9 |
|
14.8 |
|
7.9 |
|
Provision for depreciation and amortization |
|
409.8 |
|
397.7 |
|
328.4 |
|
271.2 |
|
Impairment charges |
|
|
|
62.3 |
|
|
|
|
|
Undistributed earnings of unconsolidated subsidiaries and affiliates |
|
102.6 |
|
(190.8) |
|
(.8) |
|
(1.3) |
|
Provision (credit) for deferred income taxes |
|
(3.0) |
|
(117.8) |
|
120.8 |
|
(20.3) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
Trade receivables |
|
(33.2) |
|
(3.9) |
|
|
|
|
|
Insurance receivables |
|
|
|
|
|
333.4 |
|
175.4 |
|
Inventories |
|
(656.8) |
|
(995.9) |
|
|
|
|
|
Accounts payable and accrued expenses |
|
(219.2) |
|
(123.3) |
|
(336.8) |
|
(200.0) |
|
Accrued income taxes payable/receivable |
|
(82.1) |
|
77.5 |
|
5.8 |
|
9.3 |
|
Retirement benefits |
|
179.3 |
|
130.5 |
|
7.3 |
|
7.5 |
|
Other |
|
75.8 |
|
126.3 |
|
(42.7) |
|
3.8 |
|
Net cash provided by operating activities |
|
851.2 |
|
1,027.0 |
|
756.8 |
|
543.4 |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
Collections of receivables (excluding trade and wholesale) |
|
|
|
|
|
8,998.2 |
|
9,006.6 |
|
Proceeds from maturities and sales of marketable securities |
|
700.0 |
|
600.0 |
|
91.9 |
|
11.3 |
|
Proceeds from sales of equipment on operating leases |
|
|
|
|
|
552.3 |
|
570.9 |
|
Proceeds from sales of businesses, net of cash sold |
|
|
|
307.2 |
|
148.8 |
|
|
|
Cost of receivables acquired (excluding trade and wholesale) |
|
|
|
|
|
(7,977.1) |
|
(9,120.5) |
|
Purchases of marketable securities |
|
|
|
(504.0) |
|
(33.9) |
|
(58.8) |
|
Purchases of property and equipment |
|
(323.2) |
|
(425.2) |
|
(1.1) |
|
(1.0) |
|
Cost of equipment on operating leases acquired |
|
|
|
|
|
(1,203.4) |
|
(986.0) |
|
Increase in trade and wholesale receivables |
|
|
|
|
|
(1,084.7) |
|
(1,895.1) |
|
Other |
|
(51.1) |
|
(89.2) |
|
(36.0) |
|
(39.1) |
|
Net cash provided by (used for) investing activities |
|
325.7 |
|
(111.2) |
|
(545.0) |
|
(2,511.7) |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
Increase in total short-term borrowings |
|
84.6 |
|
641.6 |
|
1,062.4 |
|
315.1 |
|
Change in intercompany receivables/payables |
|
960.7 |
|
(612.0) |
|
(960.7) |
|
612.0 |
|
Proceeds from long-term borrowings |
|
7.0 |
|
6.6 |
|
2,505.2 |
|
4,247.2 |
|
Payments of long-term borrowings |
|
(39.8) |
|
(737.3) |
|
(2,413.5) |
|
(2,398.1) |
|
Proceeds from issuance of common stock |
|
86.1 |
|
108.7 |
|
|
|
|
|
Repurchases of common stock |
|
(1,173.9) |
|
(1,093.4) |
|
|
|
|
|
Dividends paid |
|
(415.8) |
|
(382.3) |
|
(419.6) |
|
(90.0) |
|
Excess tax benefits from share-based compensation |
|
11.7 |
|
24.2 |
|
|
|
|
|
Other |
|
(24.1) |
|
(11.0) |
|
13.2 |
|
21.1 |
|
Net cash provided by (used for) financing activities |
|
(503.5) |
|
(2,054.9) |
|
(213.0) |
|
2,707.3 |
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
(79.7) |
|
(9.3) |
|
(24.1) |
|
(16.2) |
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
593.7 |
|
(1,148.4) |
|
(25.3) |
|
722.8 |
|
Cash and Cash Equivalents at Beginning of Period |
|
2,569.2 |
|
3,023.3 |
|
1,217.8 |
|
480.8 |
|
Cash and Cash Equivalents at End of Period |
|
$ |
3,162.9 |
|
$ |
1,874.9 |
|
$ |
1,192.5 |
|
$ |
1,203.6 |
|
|
* Deere & Company with Financial Services on the equity basis. |
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.
22
|
Deere & Company |
Exhibit 99.2 |
|
Other Financial Information |
(Furnished herewith) |
For the Six Months Ended April 30, |
|
Equipment Operations |
|
Agriculture and Turf |
|
Construction and Forestry |
|
Dollars in millions |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Net Sales |
|
$ |
13,004 |
|
$ |
16,195 |
|
$ |
9,847 |
|
$ |
13,242 |
|
$ |
3,157 |
|
$ |
2,953 |
|
Average Identifiable Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at LIFO |
|
$ |
12,799 |
|
$ |
14,460 |
|
$ |
9,358 |
|
$ |
11,068 |
|
$ |
3,441 |
|
$ |
3,392 |
|
With Inventories at Standard Cost |
|
$ |
14,156 |
|
$ |
15,847 |
|
$ |
10,484 |
|
$ |
12,220 |
|
$ |
3,672 |
|
$ |
3,627 |
|
Operating Profit |
|
$ |
1,242 |
|
$ |
2,252 |
|
$ |
907 |
|
$ |
2,026 |
|
$ |
335 |
|
$ |
226 |
|
Percent of Net Sales |
|
9.6 |
% |
13.9 |
% |
9.2 |
% |
15.3 |
% |
10.6 |
% |
7.7 |
% |
Operating Return on Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
With Inventories at LIFO |
|
9.7 |
% |
15.6 |
% |
9.7 |
% |
18.3 |
% |
9.7 |
% |
6.7 |
% |
With Inventories at Standard Cost |
|
8.8 |
% |
14.2 |
% |
8.7 |
% |
16.6 |
% |
9.1 |
% |
6.2 |
% |
SVA Cost of Assets |
|
$ |
(850 |
) |
$ |
(951 |
) |
$ |
(630 |
) |
$ |
(733 |
) |
$ |
(220 |
) |
$ |
(218 |
) |
SVA |
|
$ |
392 |
|
$ |
1,301 |
|
$ |
277 |
|
$ |
1,293 |
|
$ |
115 |
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended April 30, |
|
Financial Services |
|
|
|
|
|
|
|
|
|
Dollars in millions |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Net Income Attributable to Deere & Company |
|
$ |
327 |
|
$ |
290 |
|
|
|
|
|
|
|
|
|
Average Equity |
|
$ |
4,717 |
|
$ |
4,454 |
|
|
|
|
|
|
|
|
|
Return on Equity |
|
6.9 |
% |
6.5 |
% |
|
|
|
|
|
|
|
|
Operating Profit |
|
$ |
498 |
|
$ |
411 |
|
|
|
|
|
|
|
|
|
Average Equity |
|
$ |
4,717 |
|
$ |
4,454 |
|
|
|
|
|
|
|
|
|
Cost of Equity |
|
$ |
(358 |
) |
$ |
(308 |
) |
|
|
|
|
|
|
|
|
SVA |
|
$ |
140 |
|
$ |
103 |
|
|
|
|
|
|
|
|
|
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 segments 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 Companys investment in the asset. The Financial Services segment is assessed an annual pretax cost of approximately 15 percent of the segments 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
Second Quarter 2015 Earnings Conference Call 22 May 2015 Exhibit 99.3 (Furnished herewith) 24 |
|
2nd Quarter 2015 Earnings Conference Call 2 Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the companys plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acceptance and other factors that impact our businesses and customers. They also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP). Words such as forecast, projection, outlook, prospects, expected, estimated, will, plan, anticipate, intend, believe, or other similar words or phrases often identify forward-looking statements. Actual results may differ materially from those projected in these forward-looking statements based on a number of factors and uncertainties. Additional information concerning factors that could cause actual results to differ materially is contained in the companys most recent Form 8-K and periodic report filed with the U.S. Securities and Exchange Commission, and is incorporated by reference herein. Investors should refer to and consider the incorporated information on risks and uncertainties in addition to the information presented here. Investors should consider non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. The company, except as required by law, undertakes no obligation to update or revise its forward-looking statements whether as a result of new developments or otherwise. The call and accompanying materials are not an offer to sell or a solicitation of offers to buy any of the companys securities. 25 |
|
2nd Quarter 2015 Earnings Conference Call 3 Second Quarter Overview (in millions of dollars except per share amounts) Q2 2015 Q2 2014 Change Net Sales and Revenues $8,171 $9,948 -18% Net Sales $7,399 $9,246 -20% Net Income Attributable to Deere & Company $690 $981 -30% Diluted EPS $2.03 $2.65 -23% 26 |
|
2nd Quarter 2015 Earnings Conference Call 4 Second Quarter Overview Net Sales Equipment operations net sales: Down 20% in Q2 2015 vs. Q2 2014 Price realization: +2 points Currency translation: (5) points 27 |
|
2nd Quarter 2015 Earnings Conference Call 5 Worldwide Agriculture & Turf Second Quarter Overview *Q2 2015 operating profit impacted by: (in millions of dollars) Q2 2015 Q2 2014 Change Net Sales $5,766 $7,646 -25% Operating Profit* $639 $1,229 -48% Favorable Price Realization Selling, Administrative, and General Expenses Unfavorable Shipment Volumes Less Favorable Sales Mix Foreign-Currency Exchange 28 |
|
2nd Quarter 2015 Earnings Conference Call U.S. Farm Cash Receipts Source: 1999 2013: USDA 10 February 2015 2014F 2015F: Deere & Company Forecast as of 22 May 2015 6 29 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F $ Billions Crops Livestock Government Payments |
|
2nd Quarter 2015 Earnings Conference Call 7 World Farm Fundamentals Global Stocks-to-Use Ratios Source: USDA 12 May 2015 Cotton Wheat Corn Soybeans 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1994 1997 2000 2003 2006 2009 2012 2015P |
|
2nd Quarter 2015 Earnings Conference Call 8 Deere & Company Forecast as of 22 May 2015 Economic Update EU 28 Fiscal 2015 Outlook for economic growth improves slightly Fluctuating crop prices are expected to stabilize near the long-term average Livestock margins at sound levels Beef prices have stabilized Feed costs have eased Downward pressure on dairy margins 31 |
|
2nd Quarter 2015 Earnings Conference Call 9 Deere & Company Forecast as of 22 May 2015 Economic Update Other Selected Markets Fiscal 2015 China Continued slowdown in economic growth Lower commodity prices impacting agricultural economy, somewhat mitigated by domestic supports Ongoing subsidies are supportive of agricultural equipment India Increased manufacturing and investment activity supports growth forecast Below normal monsoon and lower commodity prices resulting in lower agricultural output Commonwealth of Independent States (CIS) Continued deterioration of economic growth Further tightening of credit conditions Foreign-currency exchange and geopolitical uncertainty impacting Western manufacturers 32 |
|
2nd Quarter 2015 Earnings Conference Call 10 Crop Value of Agricultural Production Brazil Source: IHS Global Insight, May 2015 Crop Value of Agricultural Production Expected to decrease ~ 11% in 2015 over prior season 2014 Mix by Crop US$ Billions 33 $0 $20 $40 $60 $80 100 $120 2003 2005 2007 2009 2011 2013 2015F 46% 14% 17% 13% 10% Soybeans Ethanol Corn Sugar Other Grains |
|
Eligible Finance Rates for Ag Equipment Brazil 2nd Quarter 2015 Earnings Conference Call 11 All Farmers Farmers with Annual Revenues <R$90M Farmers with Annual Revenues >R$90M Source: ABIMAQ (Brazilian Association of Machinery and Equipment) and BNDES PSI-FINAME was the key credit line for machinery acquisition from 2011 2014; Moderfrota is the most attractive credit line through June 2015 2011 2012 2013 2014 2015 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 34 |
|
2nd Quarter 2015 Earnings Conference Call 12 Agriculture & Turf Retail Sales Industry Outlook Fiscal 2015 * If left blank no change between Previous Forecast and Current Forecast Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 2015 Forecast Previous Forecast * U.S. and Canada Ag Down ~ 25% Down 25-30% EU 28 Ag Down ~ 10% South America Ag (Tractors and Combines) Down 15-20% Down 10-15% Asia Ag Down modestly Down slightly CIS Countries Ag Down significantly U.S. and Canada Turf and Utility Equipment Flat to up 5% 35 |
|
2nd Quarter 2015 Earnings Conference Call 13 Worldwide Agriculture & Turf Deere & Company Outlook Fiscal Year 2015 Forecast Net sales: Down ~ 24% Currency translation: ~ (5) points Previous forecast: Down ~ 23% Currency translation ~ (4) points Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 36 |
|
2nd Quarter 2015 Earnings Conference Call 14 8000 Series Self-Propelled Forage Harvester SIMA 2015 Forage Harvester Machine of the Year Complete product replacement results in greater efficiency and productivity for livestock, dairy and biogas producers Forward-thinking technology, guidance and harvest analysis Improved performance, uptime, operator comfort and cost of ownership 37 |
|
2nd Quarter 2015 Earnings Conference Call 15 Worldwide Construction & Forestry Second Quarter Overview (in millions of dollars) Q2 2015 Q2 2014 Change Net Sales $1,633 $1,600 +2% Operating Profit* $189 $132 +43% Incremental Margin ~ 173% *Q2 2015 operating profit impacted by: Favorable Price Realization Selling, Administrative, and General Expenses Unfavorable Foreign-Currency Exchange 38 |
|
U.S. Economic Indicators 2015 Forecast Previous Forecast GDP Growth (annual percentage rate)* +2.8% +3.1% Housing Starts (thousands) 1,120 1,163 Total Construction Investment (annual percentage rate)* +0.3% +4.1% Government Spending Growth (annual percentage rate)* +1.2% +2.4% 2nd Quarter 2015 Earnings Conference Call 16 Worldwide Construction & Forestry Deere & Company Outlook Source: Global Insight, Calendar Year Estimates April 2015 * Change from prior year in real dollars Fiscal Year 2015 Forecast Net sales: Up ~ 2% Currency translation: ~ (3) points Previous forecast: Up ~ 5% Currency translation: ~ (2) points Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 39 |
|
2nd Quarter 2015 Earnings Conference Call 17 1050K Crawler Dozer Increased Power and Productivity First Deere-built production class dozer Exclusive dual-path hydrostatic transmission for machine-size class Superior power-to-weight ratio provides traction needed to push more material John Deere WorkSight telematics optimizes machines, uptime and jobsites 40 |
|
2nd Quarter 2015 Earnings Conference Call 18 Worldwide Financial Services Credit Loss History Provision for Credit Losses / Average Owned Portfolio 0.08% 15 Year Average * Annualized provision for credit losses as of 30 April 2015 41 0.00% 0.50% 1.00% 1.50% 2.00% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015* 10 Year Average |
|
2nd Quarter 2015 Earnings Conference Call 19 Worldwide Financial Services Second Quarter 2015 Net income attributable to Deere & Company $170 million in Q2 2015 vs. $148 million in Q2 2014 Fiscal Year 2015 Forecast Net income attributable to Deere & Company of ~ $630 million No change from previous forecast Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 42 |
|
2nd Quarter 2015 Earnings Conference Call 20 Consolidated Trade Receivables & Inventory (in millions of dollars) Q2 2015* Actual 2015** Forecast 2015** Previous Forecast A&T ↓ $1,963 ↓ $1,000 ↓ $525 C&F ↑ $335 ↑ $400 ↑ $625 Total, as reported ↓ $1,628 ↓ $600 ↑ $100 Total, constant exchange ↓ $965 ↓ $200 ↑ $325 * Change at 30 April 2015 vs. 30 April 2014 ** Forecasted change at 31 October 2015 vs. 31 October 2014 Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 43 |
|
2nd Quarter 2015 Earnings Conference Call 21 Cost of Sales as a Percent of Net Sales Equipment Operations Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) Second Quarter 2015 ~ 77% Fiscal Year 2015 Forecast ~ 78% No change from previous forecast 44 |
|
2nd Quarter 2015 Earnings Conference Call 22 Research & Development Expense Equipment Operations Second Quarter 2015 Down ~ 4% vs. Q2 2014 Currency translation: ~ (3) points Fiscal Year 2015 Forecast Down ~ 1% vs. FY 2014 Currency translation: ~ (3) points Previous forecast: Down ~ 1% vs. FY 2014 Currency translation: ~ (2) points Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 45 |
|
2nd Quarter 2015 Earnings Conference Call 23 Selling, Administrative & General Expense Equipment Operations Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) Second Quarter 2015 Down ~ 14% vs. Q2 2014 Currency translation: ~ (4) points Fiscal Year 2015 Forecast Down ~ 11% vs. FY 2014 JD Landscapes and JD Water: ~ (2) points Currency translation: ~ (4) points Previous forecast: Down ~ 9% vs. FY 2014 JD Landscapes and JD Water: ~ (2) points Currency translation: ~ (3) points 46 |
|
2nd Quarter 2015 Earnings Conference Call 24 Pension and OPEB Expense Second Quarter 2015 Up ~ $15 million vs. Q2 2014 Fiscal Year 2015 Forecast Up ~ $70 million vs. FY 2014 Previous forecast: Up ~ $80 million vs. FY 2014 Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 47 |
|
2nd Quarter 2015 Earnings Conference Call 25 Income Taxes Equipment Operations Second Quarter 2015 Effective tax rate: ~ 30% Year to Date 2015 Effective tax rate: ~ 30% Rest of Year 2015 Forecast Effective tax rate: 34-36% Deere & Company Forecast as of 22 May 2015 48 |
|
2nd Quarter 2015 Earnings Conference Call 26 Strong Operating Performance Equipment Operations Fiscal Year Cash Flows from Operations * Previous forecast ~ $3.3 billion Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) $ Billions $2.4 $1.4 $2.5 $3.0 $2.9 $4.7 $4.5 ~ $3.4 2008 2009 2010 2011 2012 2013 2014 2015 Forecast* 49 |
|
2nd Quarter 2015 Earnings Conference Call 27 2015 Company Outlook Third Quarter 2015 Forecast Net sales: Down ~ 17% vs. Q3 2014 Price realization: ~ +2 points Currency translation ~ (6) points Deere & Company Forecast as of 22 May 2015 50 |
|
2nd Quarter 2015 Earnings Conference Call 28 2015 Company Outlook Fiscal Year 2015 Forecast Net sales: Down ~ 19% vs. FY 2014 Price realization: ~ +2 points Currency translation: ~ (4) points Previous forecast: Down ~ 17% vs. FY 2014 Price realization: ~ +2 points Currency translation ~ (3) points Net income attributable to Deere & Company of ~ $1.9 billion Previous forecast ~ $1.8 billion Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 51 |
|
2nd Quarter 2015 Earnings Conference Call 29 Appendix 52 |
|
2nd Quarter 2015 Earnings Conference Call 30 The John Deere Strategy The John Deere Strategy OUR PURPOSE: Committed to those linked to the land Global Agricultural Globally Diverse $50B Sales 12% Operating Margins 2.5 Asset Turns Equipment Solutions Construction Equipment (2018 @ Mid-Cycle) (@ Mid-Cycle) (2018 @ Mid-Cycle) Preeminence Solutions INTEGRATED ENTERPRISE Leveraging the strengths and unique capabilities of three types of businesses Global Growth Businesses Complementary Businesses Supporting Businesses Deep Customer Deliver World-Class Grow Extraordinary Understanding Customer Value Distribution System Global Talent Exceptional Operating Performance Disciplined SVA Growth Aligned High-Performance Teamwork MEASURES Delivering results today, within each business, while building for the future Performance Health Integrity Quality Commitment Innovation 30 | 2nd Quarter 2015 Earnings Conference Call 53 |
|
Deere Use-of-Cash Priorities 2nd Quarter 2015 Earnings Conference Call 31 Manage the balance sheet, including liquidity, to support a rating that provides access to low-cost and readily available short- and long-term funding mechanisms Reflects the strategic nature of our financial services operation Committed to A Rating Cash from Operations Fund Operating and Growth Needs Common Stock Dividend Share Repurchase Fund value-creating investments in our businesses Consistently and moderately raise dividend targeting a 25%-35% payout ratio of mid-cycle earnings Consider share repurchase as a means to deploy excess cash to shareholders, once above requirements are met and repurchase is viewed as value-enhancing 54 |
|
2nd Quarter 2015 Earnings Conference Call 32 Sources and Uses of Cash Fiscal 20042014 Equipment Operations Source: Deere & Company SEC filings = Source of Cash = Use of Cash (1) Other includes proceeds from maturities and sales of marketable securities and purchases of marketable securities and reconciliation for non-cash items including excess tax benefits from share-based compensation and the effect of exchange rates on cash and cash equivalents (1) $ Millions $2,569 ~60% of cash from operations returned to shareholders 55 |
|
2nd Quarter 2015 Earnings Conference Call Deere Quarterly Dividends Declared* Q1 2003 Q2 2015 * Adjusted for 2 for 1 stock split on 26 November 2007 ** See revised John Deere Strategy in Appendix 33 Dividend raised 114% since launch of the revised John Deere Strategy in 2010** $0.70 $0.60 $0.50 $0.40 $0.30 56 |
|
2nd Quarter 2015 Earnings Conference Call 34 Share Repurchase As Part of Publicly Announced Plans Cumulative cost of repurchases 2004-2Q2015: ~ $14.6 billion Amount remaining on December 2013 authorization of $8 billion: ~ $5.1 billion 30 April 2015 period ended basic shares: ~ 333.9 million 2Q2015 average diluted shares: ~ 339.7 million Shares repurchased 2004-2Q2015: ~ 223.7 million Average repurchase price 2004-2Q2015: $65.29 Actual Shares Repurchased* (in millions) Total Amount** (in billions) 2004 5.9 $0.2 2005 27.7 $0.9 2006 34.0 $1.3 2007 25.7 $1.5 2008 21.2 $1.7 2009 0.0 $0.0 2010 5.2 $0.4 2011 20.8 $1.7 2012 20.2 $1.6 2013 18.2 $1.5 2014 31.5 $2.7 2015 YTD 13.3 $1.2 * All shares adjusted for two-for-one stock split effective 26 November 2007 ** Rounded totals for each period sum may not tie to cumulative cost of repurchases 2004-2Q2015 57 |
|
2nd Quarter 2015 Earnings Conference Call 35 Other Information Equipment Operations Fiscal Year 2015 Forecast Capital Expenditures: ~ $825 million Previous forecast: ~ $850 million Depreciation and Amortization: ~ $800 million No change from previous forecast Pension/OPEB Contributions: ~ $100 million No change from previous forecast Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) 58 |
|
2nd Quarter 2015 Earnings Conference Call 36 U.S. Farm Commodity Prices Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) (dollars per bushel, except cotton, which is dollars per pound) 2013/14 2014/15 Estimate Previous 2014/15 2015/16 Projection Corn $4.46 $3.65 $3.85 $3.75 Wheat $6.87 $6.00 $6.10 $5.10 Soybeans $13.00 $10.05 $9.85 $8.90 Cotton $.78 $.60 $.62 $.60 59 |
|
U.S. Farm Commodity Prices 2nd Quarter 2015 Earnings Conference Call 37 Source: USDA 60 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Cotton - Dollars per Pound Dollars per Bushel Wheat Corn Soybeans Cotton |
|
2nd Quarter 2015 Earnings Conference Call 38 U.S. Acres Planted and Crop Yields Deere & Company Forecast as of 22 May 2015 (Yield in bushels per acre, except cotton, which is pounds per acre) Acres Planted (millions) Yield 2014/15 Estimate 2015/16 Projection 2014/15 Estimate 2015/16 Projection Corn 90.6 89.2 171.0 166.8 Wheat 56.8 55.4 43.7 43.7 Soybeans 83.7 84.6 47.8 46.0 Cotton 11.0 9.6 838 810 61 |
|
2nd Quarter 2015 Earnings Conference Call 39 U.S. Farm Cash Receipts Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) (in billions of dollars) 2013 2014 Forecast Previous 2014 2015 Forecast Previous 2015 Crops $218.5 $198.2 $198.2 $182.5 $182.8 Livestock $182.8 $209.1 $209.2 $198.7 $199.0 Government Payments $11.0 $10.8 $10.7 $12.4 $12.4 Total Cash Receipts $412.3 $418.1 $418.1 $393.6 $394.2 62 |
|
2nd Quarter 2015 Earnings Conference Call 40 U.S. Net Farm Cash Income Deere & Company Forecast as of 22 May 2015 (Previous Forecast as of 20 February 2015) (in billions of dollars) 2013 2014 Forecast Previous 2014 2015 Forecast 2015 Forecast Total Cash Receipts $412.3 $418.1 $418.1 $393.6 $394.2 Other Farm-Related Income $31.5 $27.3 $27.3 $25.4 $25.3 Gross Cash Income $443.8 $445.4 $445.4 $419.0 $419.5 Cash Expenses ($312.7) ($330.3) ($330.3) ($320.0) ($320.0) Net Cash Income $131.1 $115.1 $115.1 $99.0 $99.5 63 |
|
2nd Quarter 2015 Earnings Conference Call 41 Retail Sales U.S. and Canada Ag Industry* Deere** Utility Tractors ↑ 7% ↑ less than the industry Row-Crop Tractors ↓ 17% ↓ more than the industry 4WD Tractors ↓ 42% in line with the industry Combines ↓ 33% ↓ slightly less than the industry April 2015 Retail Sales and Dealer Inventories * As reported by the Association of Equipment Manufacturers ** As reported to the Association of Equipment Manufacturers *** At 30 April in units as a % of trailing 12 months retail sales, as reported to the Association of Equipment Manufacturers Deere Dealer Inventories*** U.S. and Canada Ag 2015 2014 Row-Crop Tractors 23% 18% Combines 17% 14% 64 |
|
2nd Quarter 2015 Earnings Conference Call 42 April 2015 Retail Sales EU 28 Deere* Tractors ↓ single digit Combines ↓ double digits U.S. and Canada Deere* Selected Turf & Utility Equipment ↑ double digits * Based on internal sales reports U.S. and Canada Construction & Forestry Deere* First-in-the-Dirt ↑ double digits Settlements ↑ double digits 65 |
|
Deeres third quarter 2015 conference call is scheduled for 9:00 a.m. central time on Friday, August 21, 2015 66 |
Deere (NYSE:DE)
Historical Stock Chart
From Apr 2024 to May 2024
Deere (NYSE:DE)
Historical Stock Chart
From May 2023 to May 2024