EX-99.2 3 a19-4380_1ex99d2.htm EX-99.2

 

 

Deere & Company

 

Exhibit 99.2

 

Other Financial Information

 

(Furnished herewith)

 

For the Three Months Ended

 

Equipment Operations*

Agriculture and Turf

Construction and Forestry*

 

 

January 27

January 28

January 27

January 28

January 27

January 28

Dollars in millions

 

2019

2018

2019

2018

2019

2018

Net Sales

 

$

6,941

 

$

5,974

 

$

4,681

 

$

4,243

 

$

2,260

 

$

1,731

 

Net Sales - excluding Wirtgen

 

$

6,343

 

$

5,719

 

$

4,681

 

$

4,243

 

$

1,662

 

$

1,476

 

Average Identifiable Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

$

20,774

 

$

17,558

 

$

10,892

 

$

9,937

 

$

9,882

 

$

7,621

 

With Inventories at LIFO - excluding Wirtgen

 

$

14,427

 

$

13,112

 

$

10,892

 

$

9,937

 

$

3,535

 

$

3,175

 

With Inventories at Standard Cost

 

$

22,140

 

$

18,837

 

$

11,993

 

$

10,970

 

$

10,147

 

$

7,867

 

With Inventories at Standard Cost - excluding Wirtgen

 

$

15,793

 

$

14,391

 

$

11,993

 

$

10,970

 

$

3,800

 

$

3,421

 

Operating Profit

 

$

577

 

$

419

 

$

348

 

$

387

 

$

229

 

$

32

 

Operating Profit - excluding Wirtgen

 

 

$

563

 

$

511

 

$

348

 

$

387

 

$

215

 

$

124

 

Percent of Net Sales - excluding Wirtgen

 

 

8.9

% 

 

 8.9

% 

 

7.4

% 

 

 9.1

% 

 

12.9

%  

 

 8.4

% 

Operating Return on Assets - excluding Wirtgen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO - excluding Wirtgen

 

 

3.9

% 

 

 3.9

% 

 

3.2

% 

 

 3.9

% 

 

6.1

%  

 

 3.9

%

With Inventories at Standard Cost - excluding Wirtgen

 

 

3.6

% 

 

 3.6

% 

 

2.9

% 

 

 3.5

% 

 

5.7

%  

 

 3.6

%

SVA Cost of Assets - excluding Wirtgen

 

$

(474)

 

$

(432)

 

$

(360)

 

$

(329)

 

$

(114)

 

$

(103)

 

SVA - excluding Wirtgen

 

$

89

 

$

79

 

$

(12)

 

$

58

 

$

101

 

$

21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Financial Services

 

 

 

 

 

 

 

 

 

 

January 27

January 28

 

 

 

 

 

 

 

 

Dollars in millions

 

2019

2018**

 

 

 

 

 

 

 

 

Net Income Attributable to Deere & Company

 

$

154

 

$

 425

 

 

 

 

 

 

 

 

 

Net Income Attributable to Deere & Company - Tax Adjusted

 

 

 

 

$

 147

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,997

 

$

 4,791

 

 

 

 

 

 

 

 

 

Average Equity - Tax Adjusted

 

 

 

 

$

 4,721

 

 

 

 

 

 

 

 

 

Return on Equity - Tax Adjusted

 

 

 

3.1

% 

 

 3.1

% 

 

 

 

 

 

 

 

 

Operating Profit

 

$

192

 

$

 217

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,997

 

$

 4,721

 

 

 

 

 

 

 

 

 

Cost of Equity

 

$

(156)

 

$

 (174)

 

 

 

 

 

 

 

 

 

SVA

 

$

36

 

$

 43

 

 

 

 

 

 

 

 

 

 

The Company evaluates its business results on the basis of accounting principles generally accepted in the United States. In addition, it uses a metric referred to as Shareholder Value Added (SVA), which management believes is an appropriate measure for the performance of its businesses. SVA is, in effect, the pretax profit left over after subtracting the cost of enterprise capital. The Company is aiming for a sustained creation of SVA and is using this metric for various performance goals. Certain compensation is also determined on the basis of performance using this measure. For purposes of determining SVA, each of the equipment segments is assessed a pretax cost of assets, which on an annual basis is approximately 12 percent of the segment’s average identifiable operating assets during the applicable period with inventory at standard cost. Management believes that valuing inventories at standard cost more closely approximates the current cost of inventory and the Company’s investment in the asset. The Financial Services segment is assessed an annual pretax cost of approximately 13 percent of the segment’s average equity (15 percent in 2018). 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.

 

* On December 1, 2017, the Company acquired the stock and certain assets of substantially all of Wirtgen Group Holding GmbH’s operations (Wirtgen), the leading manufacturer worldwide of road building equipment. Wirtgen is included in the construction and forestry segment. Wirtgen is excluded from the metrics above.

 

** The 2018 SVA calculation was adjusted for certain effects of U.S. Tax Reform legislation enacted on December 22, 2017 due to the significant discrete income tax benefit in 2018. The 2019 SVA is calculated with unadjusted US GAAP information.

 

21