EX-99.2 3 ex-99d2.htm EX-99.2

Exhibit 99.2

(Furnished herewith)

xhibit 99.2 (Furnished herewith) |  |
Exhibit 99.2 (Furnished herewith) |  |
| Deere & Company |
| Other Financial Information |

For the Twelve Months Ended |  | Equipment Operations* | Agriculture and Turf | Construction and Forestry*
|  | November 3 | October 28 | November 3 | October 28 | November 3 | October 28
Dollars in millions |  | 2019 | 2018 | 2019 | 2018 | 2019 | 2018
Net Sales |  | $ | 34,886 |  | $ | 33,351 |  | $ | 23,666 |  | $ | 23,191 |  | $ | 11,220 |  | $ | 10,160 |
Net Sales - excluding Wirtgen |  | $ | 31,693 |  | $ | 30,324 |  | $ | 23,666 |  | $ | 23,191 |  | $ | 8,027 |  | $ | 7,133 |
Average Identifiable Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With Inventories at LIFO |  | $ | 20,761 |  | $ | 19,701 |  | $ | 10,748 |  | $ | 10,219 |  | $ | 10,013 |  | $ | 9,482 |
With Inventories at LIFO - excluding Wirtgen |  | $ | 14,460 |  | $ | 13,566 |  | $ | 10,748 |  | $ | 10,219 |  | $ | 3,712 |  | $ | 3,347 |
With Inventories at Standard Cost |  | $ | 22,139 |  | $ | 20,959 |  | $ | 11,860 |  | $ | 11,233 |  | $ | 10,279 |  | $ | 9,726 |
With Inventories at Standard Cost - excluding Wirtgen |  | $ | 15,838 |  | $ | 14,825 |  | $ | 11,860 |  | $ | 11,233 |  | $ | 3,978 |  | $ | 3,592 |
Operating Profit |  | $ | 3,721 |  | $ | 3,684 |  | $ | 2,506 |  | $ | 2,816 |  | $ | 1,215 |  | $ | 868 |
Operating Profit - excluding Wirtgen |  | $ | 3,378 |  | $ | 3,568 |  | $ | 2,506 |  | $ | 2,816 |  | $ | 872 |  | $ | 752 |
Percent of Net Sales - excluding Wirtgen |  |  | 10.7 | % |  | 11.8 | % |  | 10.6 | % |  | 12.1 | % |  | 10.9 | % |  | 10.5 | %
Operating Return on Assets - excluding Wirtgen |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With Inventories at LIFO - excluding Wirtgen |  |  | 23.4 | % |  | 26.3 | % |  | 23.3 | % |  | 27.6 | % |  | 23.5 | % |  | 22.5 | %
With Inventories at Standard Cost - excluding Wirtgen |  |  | 21.3 | % |  | 24.1 | % |  | 21.1 | % |  | 25.1 | % |  | 21.9 | % |  | 20.9 | %
SVA Cost of Assets - excluding Wirtgen |  | $ | (1,900) |  | $ | (1,778) |  | $ | (1,423) |  | $ | (1,347) |  | $ | (477) |  | $ | (431) |
SVA - excluding Wirtgen |  | $ | 1,478 |  | $ | 1,790 |  | $ | 1,083 |  | $ | 1,469 |  | $ | 395 |  | $ | 321 |
For the Twelve Months Ended |  | Financial Services |  |  |  |  |  |  |  |  |  |  |  |
|  | November 3 | October 28 |  |  |  |  |  |  |  |  |  |  |  |
Dollars in millions |  |  | 2019 |  |  | 2018** |  |  |  |  |  |  |  |  |  |  |  |  |
Net Income Attributable to Deere & Company |  | $ | 539 |  | $ | 942 |  |  |  |  |  |  |  |  |  |  |  |  |
Net Income Attributable to Deere & Company - Tax Adjusted |  |  |  |  | $ | 530 |  |  |  |  |  |  |  |  |  |  |  |  |
Average Equity |  | $ | 5,040 |  | $ | 4,832 |  |  |  |  |  |  |  |  |  |  |  |  |
Average Equity - Tax Adjusted |  |  |  |  | $ | 4,793 |  |  |  |  |  |  |  |  |  |  |  |  |
Return on Equity |  |  | 10.7 | % |  | 19.5 | % |  |  |  |  |  |  |  |  |  |  |  |
Return on Equity - Tax Adjusted |  |  |  |  |  | 11.1 | % |  |  |  |  |  |  |  |  |  |  |  |
Operating Profit |  | $ | 694 |  | $ | 792 |  |  |  |  |  |  |  |  |  |  |  |  |
Average Equity |  | $ | 5,040 |  | $ | 4,793 |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of Equity |  | $ | (657) |  | $ | (722) |  |  |  |  |  |  |  |  |  |  |  |  |
SVA |  | $ | 37 |  | $ | 70 |  |  |  |  |  |  |  |  |  |  |  |  |
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 U.S. GAAP information.

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