EX-99.2 3 de-20230818xex99d2.htm EX-99.2

Exhibit 99.2

(Furnished herewith)

DEERE & COMPANY

OTHER FINANCIAL INFORMATION

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

Equipment

Production &

Small Ag

Construction 

For the Nine Months Ended

Operations

Precision Ag

& Turf

& Forestry

Jul 30

Jul 31

Jul 30

Jul 31

Jul 30

Jul 31

Jul 30

Jul 31

Dollars in Millions

 

2023

2022

2023

2022

2023

2022

2023

2022

Net Sales

$

41,765

$

33,565

$

19,826

$

14,568

$

10,886

$

9,836

$

11,053

$

9,161

Average Identifiable Assets

With Inventories as Reported

$

21,304

$

19,283

$

9,361

$

8,223

$

4,687

$

4,330

$

7,256

$

6,730

With Inventories at Standard Cost

23,369

20,872

10,438

9,017

5,240

4,788

7,691

7,067

Operating Profit

$

9,367

$

5,688

$

5,160

$

2,646

$

2,028

$

1,443

$

2,179

$

1,599

Percent of Net Sales

 

22.4

 

16.9

 

26.0

 

18.2

 

18.6

 

14.7

 

19.7

 

17.5

%

Operating Return on Assets

With Inventories as Reported

 

44.0

 

29.5

 

55.1

 

32.2

 

43.3

 

33.3

 

30.0

 

23.8

%

With Inventories at Standard Cost

 

40.1

 

27.3

 

49.4

 

29.3

 

38.7

 

30.1

 

28.3

 

22.6

%

SVA Cost of Assets

$

(2,103)

$

(1,878)

$

(939)

$

(811)

$

(471)

$

(431)

$

(693)

$

(636)

SVA

7,264

3,810

4,221

1,835

1,557

1,012

1,486

963

Financial

For the Nine Months Ended

Services

Jul 30

Jul 31

Dollars in Millions

2023

2022

Net Income Attributable to Deere & Company

$

429

$

649

Average Equity

6,440

5,706

Return on Equity

 

6.7

 

11.4

Operating Profit

$

565

$

864

Cost of Equity

(646)

(576)

SVA

(81)

288

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