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John Deere
Committed to Those
Linked to the Land
Investor Presentation
Deere & Company
October 2015
| Deere & Company | October 2015
Safe Harbor Statement & Disclosures
This presentation includes forward-looking comments subject to important risks
and uncertainties. It may also contain financial measures that are not in
conformance with accounting principles generally accepted in the United States
of America (GAAP).
Refer to Deere’s reports filed on Forms 8-K (current), 10-Q (quarterly), and
10-K (annual) for information on factors that could cause actual results to differ
materially from information in this presentation and for information reconciling
financial measures to GAAP. Past performance may not be representative of
future results.
Guidance noted in the following slides was effective as of the company’s most
recent earnings release and conference call (21 August 2015). Nothing in this
presentation should be construed as reaffirming or disaffirming such guidance.
This presentation is not an offer to sell or a solicitation of offers to buy any of
Deere’s securities.
2
|
Table of Contents
Slide
John Deere Strategy 4
Use-of-Cash 14
Global Markets 19
John Deere Financial Services 30
John Deere Power Systems 35
Market Fundamentals 39
Appendix 46
Deere & Company | October 20153
John Deere
Strategy
|5 Deere & Company | October 2015
* SVA: Shareholder Value Added
*
*
The John Deere Strategy
|
The John Deere Strategy
Adapting to Win
Developing global talent
Integrated solutions
Industry leading innovation
Distinctive quality
Markets worth winning
Deere & Company | October 20156
| Deere & Company | October 2015
* OROA: Operating Return on Operating Assets
** SVA: Shareholder Value Added
*** Excludes fiscal 2009 expenses related to goodwill impairment and voluntary employee-separation. For reconciliations to GAAP see “2009 OROA*
Reconciliation to GAAP” and “SVA* Reconciliation to GAAP” slides in Appendix.
The John Deere Strategy
Foundational Success Factors
Exceptional Operating Performance - Equipment Operations
27.7% OROA* in 2014
12%
20%
28%
2001
2002
2003
2004
20052006
2007
2008
2009
2009, adjusted***
2010
2011 2012
2013
2014
-5%
0%
5%
10%
15%
20%
25%
30%
35%
% of Normal Volume
80%
Low
100%
Normal
120%
High
12% OROA (SVA** Neutral)
7
| Deere & Company | October 2015
Exceptional Operating Performance - Equipment Operations
Higher Net Cash Flow, More Consistently
The John Deere Strategy
Foundational Success Factors
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$Millions
Sale of Trade Receivables to
John Deere Financial
Adoption of SVA* Model
Over $8 billion in Pension/OPEB contributions, 2001-2014
8
* SVA: Shareholder Value Added
|
-1,600
-1,200
-800
-400
0
400
800
1,200
1,600
2,000
2,400
2,800
3,200
3,600
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Deere & Company | October 2015
SVA($millions)
* SVA: Shareholder Value Added
Note: For reconciliation of SVA to GAAP, please see “SVA* Reconciliation to GAAP” slide in Appendix
Disciplined SVA* Growth - Equipment Operations
SVA Journey, 1993 - 2014
9
The John Deere Strategy
Foundational Success Factors
Adoption of SVA Model
| Deere & Company | October 2015
Asset Management
Dramatic Reduction in Asset Intensity
20%
25%
30%
35%
40%
45%
50%
55%
60%
2001 2003 2005 2007 2009 2011 2013 2015*
Prior Year
Current Year
Trade Receivables and Net Sales
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Trade Receivables Net Sales
$Millions 1998 2014
• Avoided ~ $8.8 billion in working capital in 2014 vs. 1998
• Receivable level in 2014 consistent with 1998, with almost 3x the sales
Quarterly Receivables & Inventory as a % of Previous 12 Months Sales
10
*Through 3rd quarter 2015
| Deere & Company | October 2015
Productivity Improvement
~ 6% CAGR over 30 Years
• Deere’s net sales and revenues per employee have increased at a CAGR
of ~ 6% over last 30 years
Net Sales and Revenues per Employee
$0
$100
$200
$300
$400
$500
$600
$700
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
$Thousands
11
| Deere & Company | October 2015
Investment in New Products and Technologies
R&D as Percent of Net Sales
Source: Deere & Company and competitor SEC filings
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Deere R&D $ Deere % Competitor A % Competitor B %
12
|
Net Sales by Product Category
Equipment Operations - Fiscal Year 2014
Deere & Company | October 2015
Agriculture & Turf – $26.4B Construction & Forestry – $6.6B
Construction
Forestry
Commercial
Worksite
Products
Other
Large Ag
Small Ag
Turf
Other
13
Use-of-Cash
| Deere & Company | October 2015
Deere Use-of-Cash Priorities
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
15
| Deere & Company | October 2015
Deere Quarterly Dividends Declared*
Q1 2003 – Q4 2015
* Adjusted for 2 for 1 stock split on 26 November 2007
** See slide 5 for John Deere Strategy
16
$0.11
$0.14
$0.16
$0.20
$0.22
$0.25
$0.28
$0.30
$0.35
$0.41
$0.46
$0.51
$0.60
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dividend raised 114%
since launch of the
revised John Deere
Strategy in 2010**
| Deere & Company | October 201517
Share Repurchase
As Part of Publicly Announced Plans
Cumulative cost of repurchases 2004-3Q2015: ~ $15.3 billion
Amount remaining on December 2013 authorization of $8 billion: ~ $4.4 billion
31 July 2015 period ended basic shares: ~ 328.2 million
3Q2015 average diluted shares: ~ 334.1 million
Shares repurchased 2004-3Q2015: ~ 230.8 million
Average repurchase price 2004-3Q2015: $66.15
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 20.4 $1.8
* 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 2004-3Q2015
| Deere & Company | October 201518
Sources and Uses of Cash Fiscal 2004–2014
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
$4,287
$28,527
$953
$8,731
$1,269
$3,172
$5,506
$11,659
$861
$0
$3,000
$6,000
$9,000
$12,000
$15,000
$18,000
$21,000
$24,000
$27,000
$30,000
$33,000
Beginning
Cash & Cash
Equivalents
(10/31/03)
Cash From
Operations
Divestitures,
net of
Acquisitions
Capital
Expenditures
Investment in
Financial
Services
Net Change in
Debt and
Intercompany
Balances
Dividends Share
Repurchase,
net of
Common
Stock
Issuances
Other Ending Cash &
Cash
Equivalents
(10/31/14)
(1)
$Millions
~60% of cash from operations
returned to shareholders
$2,569
Global Markets
| Deere & Company | October 2015
Net Sales by Major Markets
Equipment Operations
20
$13.8
$15.1
$13.0
$14.8
$17.4
$20.8
$21.8
$20.2
2007
2008
2009
2010
2011
2012
2013
2014
U.S. & Canada
6% CAGR
$3.9
$4.6
$3.4 $3.4
$4.4 $4.3 $4.4 $4.4
2007
2008
2009
2010
2011
2012
2013
2014
Western Europe
2% CAGR
$1.0
$1.9
$0.7 $0.7
$1.4
$1.7 $1.6 $1.4
2007
2008
2009
2010
2011
2012
2013
2014
Central Europe & CIS
5% CAGR
$1.6
$2.6
$1.8
$2.6
$3.6 $3.6
$4.3 $4.1
2007
2008
2009
2010
2011
2012
2013
2014
Latin America
14% CAGR
$0.8
$1.1 $1.2 $1.4
$1.9 $2.1 $2.1 $2.0
2007
2008
2009
2010
2011
2012
2013
2014
Asia, Africa & Middle East
14% CAGR
$0.4 $0.6 $0.6 $0.6 $0.8 $1.0 $0.8 $0.8
2007
2008
2009
2010
2011
2012
2013
2014
Asia Pacific, Australia & New
Zealand
10% CAGR
$ Billions
|
U.S. and Canada
Factory Locations
Deere & Company | October 201521
Iowa, USA
• Cotton Harvesting Equipment
• Planting Equipment
• Spraying Equipment
• Tillage Equipment
• Ag Tractors
• Components
• Foundry
• Engines
• Hay & Forage Equipment
• Articulated Dump Trucks
• 4WD Loaders
• Motor Graders
• Skidders
• Wheeled Feller Bunchers
• Backhoes
• Compact Tracked Loaders
• Crawler Dozers
• High-Speed Dozers
• Knuckleboom Loaders
• Skid Steer Loaders
• Tracked Feller Bunchers
• Tracked Harvesters
Illinois, USA
• Combine Harvesters
• Headers
• Planting Equipment
• Hydraulic Cylinders
North Dakota, USA
• Air Seeding Equipment
• Electronics
• Tillage Equipment
North Carolina, USA
• Commercial Mowers
• Golf & Turf Mowers
• Utility Vehicles
• Hydraulic Excavators
Alberta, Canada
• Remanufactured Components
British Columbia, Canada
• Log Loaders & Specialty Products
California, USA
• Satellite Receivers
Kansas, USA
• Power Transmission Equipment
Missouri, USA
• Remanufactured Components
Louisiana, USA
• Sugarcane Harvesting Equipment
• Tractor Loaders
• Scrapers
• Cotton Strippers
Georgia, USA
• Utility Tractors
• Compact Utility Tractors
Tennessee, USA
• Lawn Tractors
Wisconsin, USA
• Lawn & Garden Equipment
• Utility Vehicles
• Golf & Turf Reel Mowers
| Deere & Company | October 2015
EU 28
Factory Locations
Joensuu, Finland
• Wheel Forwarders
• Wheel Harvesters
• Forestry Attachments
Bruchsal, Germany
• Tractor, Harvesting & Forestry Cabs
Mannheim, Germany
• Tractors
Zweibrücken, Germany
• Combines & Forage Harvesters
Arc-les-Gray, France
• Balers
• Ag Loaders
Saran, France
• Engines
Madrid, Spain
• Components
Horst, The Netherlands
• Spraying Equipment
Stadtlohn, Germany
• Headers
Gummersbach, Germany
• Walk-Behind Mowers
22
|
Brazil
Factory Locations
Deere & Company | October 2015
Catalão, Brazil
• Sugarcane Harvesters
• Sprayers
Montenegro, Brazil
• Tractors
Horizontina, Brazil
• Combine Harvesters
• Planters
Indaiatuba, Brazil
• Backhoe Loaders
• 4WD Loaders
Indaiatuba, Brazil (JV)
• Excavators
23
|
CIS
Factory Locations
Deere & Company | October 201524
Orenburg, Russia
• Seeding Equipment
• Tillage Equipment
Domodedovo, Russia
• Tractors
• Combine Harvesters
• Motor Graders
|
China
Factory Locations
Deere & Company | October 2015
Ningbo, China
• Tractors (28-70 hp)
Tianjin (TEDA), China
• Tractors (75-135 hp)
Jiamusi, China
• Large Combine Harvesters
• Corn Pickers
• Cotton Pickers
Harbin, China
• Combine Harvesters
• Tractors (150+ hp)
• Sprayers
Tianjin (TEDA), China
• 4WD Loaders
• Excavators
Tianjin (TEDA), China
• Engines (50-220 hp)
25
|
India
Factory Locations
Deere & Company | October 2015
Gummidipoondi, India (JV)
• Side-Shift Backhoes
Pune, India
• Engines
• Transmissions
• Tractors (36-75 hp)
• Electronics
Sirhind, India
• Combine Harvesters
Dewas, India
• Tractors (36-50 hp)
26
|
Other Regions
Factory Locations
Deere & Company | October 201527
Kibbutz Beit Hashita, Israel
• Cotton Picker Components
Rosario, Argentina
• Engines
• Tractors
• Combines
Monterrey, Mexico
• Rotary Cutters
• Implements
• Components
Ramos, Mexico
• Ag Loaders
• Compact Utility Tractor Loaders
• Utility Tractor Cabs
• Hydraulic Cylinders
Saltillo, Mexico
• Ag Tractors
• Transaxles
Torreon, Mexico
• Axles
• Engines
• Electronics Tokoroa, New Zealand
• Forestry Harvester Heads
|
Worldwide Parts Services
Supporting the Global Growth of Our Equipment Operations
Deere & Company | October 201528
Highlights:
Campinas, Brazil
Expansion of existing facility… operational March 2015
Nagpur, India
India Parts Distribution Center opened Nov 2014
Johannesburg, South Africa
New, larger Regional Distribution Center opened 4Q 2012
Rosario, Argentina
New, larger Regional Distribution Center opened 4Q 2012
Stockholm, Sweden
New, larger Regional Distribution Center serving C&F and A&T opened May 2012
Bruchsal, Germany
E-PDC deconsolidation & packaging facility opened Nov 2011
Anchor Parts Distribution Centers
Regional Parts Distribution Centers
or Depots
Distribution Centers under
construction
|
John Deere Precision Ag
Machine Optimization
Ensure that machines function as expected
Maximize machine performance
Increase operator consistency
Job Optimization
Achieve quality outcomes for each job
Coordinate machines to execute jobs more
effectively and efficiently
Monitor job progress and adjust operational
plans
Agronomic Decision Support
Provide a single, secure place to visualize,
analyze and collaborate with trusted advisors
using an open data management platform
Automate the collection and transfer of data
from the machine to the platform
Make decisions and take action with greater
ease and confidence
CROP PRODUCTION
SYSTEM
Deere & Company | October 201529
John Deere
Financial Services
|
John Deere Financial Services
Supporting the Global Growth of Our Equipment Operations
Deere & Company | October 201531
Owned Operations
Bank/Finance Company Partners
Retail programs through JDF not currently offered
| Deere & Company | October 2015
Portfolio Composition by
Market
John Deere Financial Services
$40.0 Billion Owned Portfolio at 31 October 2014
Portfolio Composition by
Geography
Portfolio Composition by
Product
Information above includes all Deere lending activities worldwide. John Deere Capital Corporation is the largest lending operation of Deere & Company.
Ag & Turf
87%
C&F
13%
U.S.
73%
Canada
11%
Europe
6%
Latin America
7%
Australia
3%
32
Installment
Financing
57%
Wholesale /
Floorplan
22%
Leasing
14%
Revolving
Credit
7%
| Deere & Company | October 2015
John Deere Capital Corporation
Profitability and Growth
33
383
544
291
311
282
149
319
364
2006 2007 2008 2009 2010 2011 2012 2013 2014
Net Income ($ Millions)
0.22% 0.29%
0.33%
0.70%
0.48%
0.12%
0.05% 0.03% 0.09%
2006 2007 2008 2009 2010 2011 2012 2013 2014
Write-offs/Average Owned Portfolio
18.6 19.0 19.1
19.3
21.1
23.3
26.6
30.7
33.1
2006 2007 2008 2009 2010 2011 2012 2013 2014
Administered Portfolio Growth ($ Billions)
469
| Deere & Company | October 2015
John Deere Capital Corporation Retail Notes
60+ Days Past Due vs. Write-offs
Agriculture & Turf1
• Continued extremely low write-offs
• Average write-offs less than 5 bps over last
10 years
Construction & Forestry
• Extremely low write-offs in
2014
(1) 1983 – 1985 includes Construction; 1986 - 1994 includes Lawn & Grounds Care; beginning in 2009 includes both Ag and Turf equipment; As %
of Owned Losses After Dealer Reserve Charges
Source: 1983 – 1994 internal reporting, 1995 - 2011 JDCC 10-K filings, 2012-2014 internal reporting
34
-0.05%
0.45%
0.95%
1.45%
1.95%
2.45%
2.95%
3.45%
3.95%
'83 '86 '89 '92 '95 '98 '01 '04 '07 '10 13
Net Write-offs (Ag) Installments 60+DPD (Ag)
-0.05%
0.45%
0.95%
1.45%
1.95%
2.45%
2.95%
3.45%
3.95%
'95 '98 '01 '04 '07 '10 13
Net Write-offs (C&F) Installments 60+DPD (C&F)
John Deere
Power Systems
| Deere & Company | October 2015
Interim Tier 4 (IT4):
• 50% Nitrogen Oxide (NOx) reduction
• 90% Particulate Matter (PM) reduction
Final Tier 4 (FT4):
• 80% NOx reduction
Tier 4 Engine Implementation
Final Tier 4
0
0.10
0.20
0.30
0.40
0.50
0 2.00 4.00 6.00 8.00 10.00 12.00
Tier 1
Tier
2
Tier 3
Interim
Tier 4
NOx, g/kw-hr
PM,g/kw-hr
36
|
Engine Emissions
Final Tier 4 (FT4)/Stage IV
Deere & Company | October 201537
• Over 12.5 million hours in the field*
• FT4/Stage IV technologies deliver excellent
performance and low operating costs
• More applications transitioning to FT4/Stage
IV than IT4/Stage IIIB emission programs
• Maintain earlier tier solutions for global
markets
Interim Tier 4 (IT4)/Stage IIIA created foundation for FT4/Stage IV
delivery
• * As of October 2015
|
Engine Emissions
2015 Worldwide Off-Road Emissions Regulations > 75hp
Deere & Company | October 201538
Stage II/Tier 2
Stage IIIA/Tier 3/TREM 3A (> 50hp)
Stage IV/Final Tier 4 (> 75-750hp)
• *Includes some non-EU28 countries that follow EU28 emissions regulations
U.S. and Canada
Final Tier 4
EU28*
Stage IV
Russia
Transition to Stage IIIB:
Ag tractors - 2017
China
Stage IIIA
Brazil
Stage IIIA:
• Construction equipment - January 2015
• Ag equipment - January 2017
India
TREM 3A
Market Fundamentals
| Deere & Company | October 2015
U.S. Farm Cash Receipts
$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 2016F
$Billions
Crops Livestock Government Payments
Source: 1999 – 2013: USDA 10 February 2015
2014F – 2016F: Deere & Company Forecast as of 21 August 2015
40
| Deere & Company | October 2015
U.S. Farm Balance Sheet Strong
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014F
2015F
$Billions
Farm Debt Farm Equity Debt to Equity Ratio (%) Debt to Asset Ratio (%)
Source: 1972 – 2013: USDA 10 February 2015
2014F – 2015F: Deere & Company Forecast as of 21 August 2015
41
| Deere & Company | October 201542
World Farm Fundamentals
Global Stocks-to-Use Ratios
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
1994 1997 2000 2003 2006 2009 2012 2015P
Source: USDA – 9 October 2015
Cotton
Wheat
Corn
Soybeans
| Deere & Company | October 2015
World Farm Fundamentals
Global Corn Supply and Demand
Source: USDA – 9 October 2015
43
0
200
400
600
800
1,000
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
MillionMetricTons
Production Total Consumption
| Deere & Company | October 2015
U.S. Housing Starts
44
Source: 1962 – 2014: U.S. Census Bureau July 2015
2015F: Deere & Company Forecast as of 21 August 2015
0.000
0.250
0.500
0.750
1.000
1.250
1.500
1.750
2.000
2.250
2.500
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015F
Housing Starts (Millions of Units)
Multi-Family Housing Starts
Single-Family Housing Starts
| Deere & Company | October 2015
U.S. Construction Spending
45
-160%
-150%
-140%
-130%
-120%
-110%
-100%
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2,200
2,300
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F
%TotalConstructionSpend
Billions,2009Chained$’s
U.S. Construction Spending (Billions, 2009 Chained $’s)
Residential Investment in Structures
Nonresidential Investment in Structures
Government Investment in Structures
Government Infrastructure Investment
Source: 1997 – 2014: U.S. Bureau of Economic Analysis July 2015
2015F: Deere & Company Forecast as of 21 August 2015
Appendix
| Deere & Company | October 2015
2009 OROA* Reconciliation to GAAP
Equipment Operations
Equipment Operations
2009, as
Reported
Exclude Goodwill
Impairment &
Voluntary Employee-
Separation
2009, as
Adjusted
Net Sales 20,756 20,756
Average Identifiable Assets
With Inventories at LIFO 9,647 9,647
With Inventories at Standard Cost 10,950 10,950
Operating Profit 1,365 380 1,745
Percent of Net Sales 6.6% 8.4%
Operating Return on Assets
With Inventories at LIFO 14.1% 18.1%
With Inventories at Standard Cost 12.5% 15.9%
(millions of dollars unless stated otherwise)
47
* OROA: Operating Return on Operating Assets
| Deere & Company | October 2015
SVA* Reconciliation to GAAP
Equipment Operations
Equipment Operations 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Net Sales 6,479 7,663 8,830 9,640 11,082 11,926 9,701 11,169 11,077 11,703 13,349
Average Identifiable Assets
With Inventories at LIFO 5,449 5,551 6,187 6,502 6,682 7,672 7,724 8,069 8,743 6,229 5,965
With Inventories at Standard Cost 6,442 6,494 7,131 7,488 7,703 8,711 8,739 9,039 9,678 7,147 6,925
Operating Profit 242 847 1,006 1,125 1,402 1,476 272 693 (46) 401 708
Percent of Net Sales 3.7% 11.1% 11.4% 11.7% 12.6% 12.4% 2.8% 6.2% -0.4% 3.4% 5.3%
Operating Return on Assets
With Inventories at LIFO 4.4% 15.3% 16.3% 17.3% 21.0% 19.3% 3.5% 8.6% -0.5% 6.4% 11.9%
With Inventories at Standard Cost 3.8% 13.0% 14.1% 15.0% 18.2% 16.9% 3.1% 7.7% -0.5% 5.6% 10.2%
SVA Cost of Assets (773) (780) (856) (898) (924) (1,045) (1,049) (1,085) (1,162) (858) (831)
SVA (531) 67 150 227 477 431 (776) (392) (1,208) (457) (123)
Equipment Operations 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Net Sales 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 33,501 34,998 32,961
Average Identifiable Assets
With Inventories at LIFO 6,482 7,248 7,546 8,092 9,652 9,647 9,196 11,516 13,594 14,569 14,113
With Inventories at Standard Cost 7,477 8,312 8,634 9,205 10,812 10,950 10,494 12,875 14,965 15,924 15,493
Operating Profit 1,905 1,842 1,905 2,318 2,927 1,365 2,909 3,839 4,397 5,058 4,297
Percent of Net Sales 10.8% 9.5% 9.6% 10.8% 11.3% 6.6% 12.3% 13.0% 13.1% 14.5% 13.0%
Operating Return on Assets
With Inventories at LIFO 29.4% 25.4% 25.2% 28.6% 30.3% 14.1% 31.6% 33.3% 32.3% 34.7% 30.4%
With Inventories at Standard Cost 25.5% 22.2% 22.1% 25.2% 27.1% 12.5% 27.7% 29.8% 29.4% 31.8% 27.7%
SVA Cost of Assets (897) (998) (1,036) (1,094) (1,284) (1,301) (1,259) (1,545) (1,795) (1,911) (1,860)
SVA 1,008 844 869 1,224 1,643 64 1,650 2,294 2,602 3,147 2,437
(millions of dollars unless stated otherwise)
48
* SVA: Shareholder Value Added
|

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Investor presentation-oct15-with-bookmarks

  • 1. John Deere Committed to Those Linked to the Land Investor Presentation Deere & Company October 2015
  • 2. | Deere & Company | October 2015 Safe Harbor Statement & Disclosures This presentation includes forward-looking comments subject to important risks and uncertainties. It may also contain financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP). Refer to Deere’s reports filed on Forms 8-K (current), 10-Q (quarterly), and 10-K (annual) for information on factors that could cause actual results to differ materially from information in this presentation and for information reconciling financial measures to GAAP. Past performance may not be representative of future results. Guidance noted in the following slides was effective as of the company’s most recent earnings release and conference call (21 August 2015). Nothing in this presentation should be construed as reaffirming or disaffirming such guidance. This presentation is not an offer to sell or a solicitation of offers to buy any of Deere’s securities. 2
  • 3. | Table of Contents Slide John Deere Strategy 4 Use-of-Cash 14 Global Markets 19 John Deere Financial Services 30 John Deere Power Systems 35 Market Fundamentals 39 Appendix 46 Deere & Company | October 20153
  • 5. |5 Deere & Company | October 2015 * SVA: Shareholder Value Added * * The John Deere Strategy
  • 6. | The John Deere Strategy Adapting to Win Developing global talent Integrated solutions Industry leading innovation Distinctive quality Markets worth winning Deere & Company | October 20156
  • 7. | Deere & Company | October 2015 * OROA: Operating Return on Operating Assets ** SVA: Shareholder Value Added *** Excludes fiscal 2009 expenses related to goodwill impairment and voluntary employee-separation. For reconciliations to GAAP see “2009 OROA* Reconciliation to GAAP” and “SVA* Reconciliation to GAAP” slides in Appendix. The John Deere Strategy Foundational Success Factors Exceptional Operating Performance - Equipment Operations 27.7% OROA* in 2014 12% 20% 28% 2001 2002 2003 2004 20052006 2007 2008 2009 2009, adjusted*** 2010 2011 2012 2013 2014 -5% 0% 5% 10% 15% 20% 25% 30% 35% % of Normal Volume 80% Low 100% Normal 120% High 12% OROA (SVA** Neutral) 7
  • 8. | Deere & Company | October 2015 Exceptional Operating Performance - Equipment Operations Higher Net Cash Flow, More Consistently The John Deere Strategy Foundational Success Factors 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $Millions Sale of Trade Receivables to John Deere Financial Adoption of SVA* Model Over $8 billion in Pension/OPEB contributions, 2001-2014 8 * SVA: Shareholder Value Added
  • 9. | -1,600 -1,200 -800 -400 0 400 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Deere & Company | October 2015 SVA($millions) * SVA: Shareholder Value Added Note: For reconciliation of SVA to GAAP, please see “SVA* Reconciliation to GAAP” slide in Appendix Disciplined SVA* Growth - Equipment Operations SVA Journey, 1993 - 2014 9 The John Deere Strategy Foundational Success Factors Adoption of SVA Model
  • 10. | Deere & Company | October 2015 Asset Management Dramatic Reduction in Asset Intensity 20% 25% 30% 35% 40% 45% 50% 55% 60% 2001 2003 2005 2007 2009 2011 2013 2015* Prior Year Current Year Trade Receivables and Net Sales $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Trade Receivables Net Sales $Millions 1998 2014 • Avoided ~ $8.8 billion in working capital in 2014 vs. 1998 • Receivable level in 2014 consistent with 1998, with almost 3x the sales Quarterly Receivables & Inventory as a % of Previous 12 Months Sales 10 *Through 3rd quarter 2015
  • 11. | Deere & Company | October 2015 Productivity Improvement ~ 6% CAGR over 30 Years • Deere’s net sales and revenues per employee have increased at a CAGR of ~ 6% over last 30 years Net Sales and Revenues per Employee $0 $100 $200 $300 $400 $500 $600 $700 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 $Thousands 11
  • 12. | Deere & Company | October 2015 Investment in New Products and Technologies R&D as Percent of Net Sales Source: Deere & Company and competitor SEC filings 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Deere R&D $ Deere % Competitor A % Competitor B % 12
  • 13. | Net Sales by Product Category Equipment Operations - Fiscal Year 2014 Deere & Company | October 2015 Agriculture & Turf – $26.4B Construction & Forestry – $6.6B Construction Forestry Commercial Worksite Products Other Large Ag Small Ag Turf Other 13
  • 15. | Deere & Company | October 2015 Deere Use-of-Cash Priorities 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 15
  • 16. | Deere & Company | October 2015 Deere Quarterly Dividends Declared* Q1 2003 – Q4 2015 * Adjusted for 2 for 1 stock split on 26 November 2007 ** See slide 5 for John Deere Strategy 16 $0.11 $0.14 $0.16 $0.20 $0.22 $0.25 $0.28 $0.30 $0.35 $0.41 $0.46 $0.51 $0.60 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend raised 114% since launch of the revised John Deere Strategy in 2010**
  • 17. | Deere & Company | October 201517 Share Repurchase As Part of Publicly Announced Plans Cumulative cost of repurchases 2004-3Q2015: ~ $15.3 billion Amount remaining on December 2013 authorization of $8 billion: ~ $4.4 billion 31 July 2015 period ended basic shares: ~ 328.2 million 3Q2015 average diluted shares: ~ 334.1 million Shares repurchased 2004-3Q2015: ~ 230.8 million Average repurchase price 2004-3Q2015: $66.15 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 20.4 $1.8 * 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 2004-3Q2015
  • 18. | Deere & Company | October 201518 Sources and Uses of Cash Fiscal 2004–2014 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 $4,287 $28,527 $953 $8,731 $1,269 $3,172 $5,506 $11,659 $861 $0 $3,000 $6,000 $9,000 $12,000 $15,000 $18,000 $21,000 $24,000 $27,000 $30,000 $33,000 Beginning Cash & Cash Equivalents (10/31/03) Cash From Operations Divestitures, net of Acquisitions Capital Expenditures Investment in Financial Services Net Change in Debt and Intercompany Balances Dividends Share Repurchase, net of Common Stock Issuances Other Ending Cash & Cash Equivalents (10/31/14) (1) $Millions ~60% of cash from operations returned to shareholders $2,569
  • 20. | Deere & Company | October 2015 Net Sales by Major Markets Equipment Operations 20 $13.8 $15.1 $13.0 $14.8 $17.4 $20.8 $21.8 $20.2 2007 2008 2009 2010 2011 2012 2013 2014 U.S. & Canada 6% CAGR $3.9 $4.6 $3.4 $3.4 $4.4 $4.3 $4.4 $4.4 2007 2008 2009 2010 2011 2012 2013 2014 Western Europe 2% CAGR $1.0 $1.9 $0.7 $0.7 $1.4 $1.7 $1.6 $1.4 2007 2008 2009 2010 2011 2012 2013 2014 Central Europe & CIS 5% CAGR $1.6 $2.6 $1.8 $2.6 $3.6 $3.6 $4.3 $4.1 2007 2008 2009 2010 2011 2012 2013 2014 Latin America 14% CAGR $0.8 $1.1 $1.2 $1.4 $1.9 $2.1 $2.1 $2.0 2007 2008 2009 2010 2011 2012 2013 2014 Asia, Africa & Middle East 14% CAGR $0.4 $0.6 $0.6 $0.6 $0.8 $1.0 $0.8 $0.8 2007 2008 2009 2010 2011 2012 2013 2014 Asia Pacific, Australia & New Zealand 10% CAGR $ Billions
  • 21. | U.S. and Canada Factory Locations Deere & Company | October 201521 Iowa, USA • Cotton Harvesting Equipment • Planting Equipment • Spraying Equipment • Tillage Equipment • Ag Tractors • Components • Foundry • Engines • Hay & Forage Equipment • Articulated Dump Trucks • 4WD Loaders • Motor Graders • Skidders • Wheeled Feller Bunchers • Backhoes • Compact Tracked Loaders • Crawler Dozers • High-Speed Dozers • Knuckleboom Loaders • Skid Steer Loaders • Tracked Feller Bunchers • Tracked Harvesters Illinois, USA • Combine Harvesters • Headers • Planting Equipment • Hydraulic Cylinders North Dakota, USA • Air Seeding Equipment • Electronics • Tillage Equipment North Carolina, USA • Commercial Mowers • Golf & Turf Mowers • Utility Vehicles • Hydraulic Excavators Alberta, Canada • Remanufactured Components British Columbia, Canada • Log Loaders & Specialty Products California, USA • Satellite Receivers Kansas, USA • Power Transmission Equipment Missouri, USA • Remanufactured Components Louisiana, USA • Sugarcane Harvesting Equipment • Tractor Loaders • Scrapers • Cotton Strippers Georgia, USA • Utility Tractors • Compact Utility Tractors Tennessee, USA • Lawn Tractors Wisconsin, USA • Lawn & Garden Equipment • Utility Vehicles • Golf & Turf Reel Mowers
  • 22. | Deere & Company | October 2015 EU 28 Factory Locations Joensuu, Finland • Wheel Forwarders • Wheel Harvesters • Forestry Attachments Bruchsal, Germany • Tractor, Harvesting & Forestry Cabs Mannheim, Germany • Tractors Zweibrücken, Germany • Combines & Forage Harvesters Arc-les-Gray, France • Balers • Ag Loaders Saran, France • Engines Madrid, Spain • Components Horst, The Netherlands • Spraying Equipment Stadtlohn, Germany • Headers Gummersbach, Germany • Walk-Behind Mowers 22
  • 23. | Brazil Factory Locations Deere & Company | October 2015 Catalão, Brazil • Sugarcane Harvesters • Sprayers Montenegro, Brazil • Tractors Horizontina, Brazil • Combine Harvesters • Planters Indaiatuba, Brazil • Backhoe Loaders • 4WD Loaders Indaiatuba, Brazil (JV) • Excavators 23
  • 24. | CIS Factory Locations Deere & Company | October 201524 Orenburg, Russia • Seeding Equipment • Tillage Equipment Domodedovo, Russia • Tractors • Combine Harvesters • Motor Graders
  • 25. | China Factory Locations Deere & Company | October 2015 Ningbo, China • Tractors (28-70 hp) Tianjin (TEDA), China • Tractors (75-135 hp) Jiamusi, China • Large Combine Harvesters • Corn Pickers • Cotton Pickers Harbin, China • Combine Harvesters • Tractors (150+ hp) • Sprayers Tianjin (TEDA), China • 4WD Loaders • Excavators Tianjin (TEDA), China • Engines (50-220 hp) 25
  • 26. | India Factory Locations Deere & Company | October 2015 Gummidipoondi, India (JV) • Side-Shift Backhoes Pune, India • Engines • Transmissions • Tractors (36-75 hp) • Electronics Sirhind, India • Combine Harvesters Dewas, India • Tractors (36-50 hp) 26
  • 27. | Other Regions Factory Locations Deere & Company | October 201527 Kibbutz Beit Hashita, Israel • Cotton Picker Components Rosario, Argentina • Engines • Tractors • Combines Monterrey, Mexico • Rotary Cutters • Implements • Components Ramos, Mexico • Ag Loaders • Compact Utility Tractor Loaders • Utility Tractor Cabs • Hydraulic Cylinders Saltillo, Mexico • Ag Tractors • Transaxles Torreon, Mexico • Axles • Engines • Electronics Tokoroa, New Zealand • Forestry Harvester Heads
  • 28. | Worldwide Parts Services Supporting the Global Growth of Our Equipment Operations Deere & Company | October 201528 Highlights: Campinas, Brazil Expansion of existing facility… operational March 2015 Nagpur, India India Parts Distribution Center opened Nov 2014 Johannesburg, South Africa New, larger Regional Distribution Center opened 4Q 2012 Rosario, Argentina New, larger Regional Distribution Center opened 4Q 2012 Stockholm, Sweden New, larger Regional Distribution Center serving C&F and A&T opened May 2012 Bruchsal, Germany E-PDC deconsolidation & packaging facility opened Nov 2011 Anchor Parts Distribution Centers Regional Parts Distribution Centers or Depots Distribution Centers under construction
  • 29. | John Deere Precision Ag Machine Optimization Ensure that machines function as expected Maximize machine performance Increase operator consistency Job Optimization Achieve quality outcomes for each job Coordinate machines to execute jobs more effectively and efficiently Monitor job progress and adjust operational plans Agronomic Decision Support Provide a single, secure place to visualize, analyze and collaborate with trusted advisors using an open data management platform Automate the collection and transfer of data from the machine to the platform Make decisions and take action with greater ease and confidence CROP PRODUCTION SYSTEM Deere & Company | October 201529
  • 31. | John Deere Financial Services Supporting the Global Growth of Our Equipment Operations Deere & Company | October 201531 Owned Operations Bank/Finance Company Partners Retail programs through JDF not currently offered
  • 32. | Deere & Company | October 2015 Portfolio Composition by Market John Deere Financial Services $40.0 Billion Owned Portfolio at 31 October 2014 Portfolio Composition by Geography Portfolio Composition by Product Information above includes all Deere lending activities worldwide. John Deere Capital Corporation is the largest lending operation of Deere & Company. Ag & Turf 87% C&F 13% U.S. 73% Canada 11% Europe 6% Latin America 7% Australia 3% 32 Installment Financing 57% Wholesale / Floorplan 22% Leasing 14% Revolving Credit 7%
  • 33. | Deere & Company | October 2015 John Deere Capital Corporation Profitability and Growth 33 383 544 291 311 282 149 319 364 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Income ($ Millions) 0.22% 0.29% 0.33% 0.70% 0.48% 0.12% 0.05% 0.03% 0.09% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Write-offs/Average Owned Portfolio 18.6 19.0 19.1 19.3 21.1 23.3 26.6 30.7 33.1 2006 2007 2008 2009 2010 2011 2012 2013 2014 Administered Portfolio Growth ($ Billions) 469
  • 34. | Deere & Company | October 2015 John Deere Capital Corporation Retail Notes 60+ Days Past Due vs. Write-offs Agriculture & Turf1 • Continued extremely low write-offs • Average write-offs less than 5 bps over last 10 years Construction & Forestry • Extremely low write-offs in 2014 (1) 1983 – 1985 includes Construction; 1986 - 1994 includes Lawn & Grounds Care; beginning in 2009 includes both Ag and Turf equipment; As % of Owned Losses After Dealer Reserve Charges Source: 1983 – 1994 internal reporting, 1995 - 2011 JDCC 10-K filings, 2012-2014 internal reporting 34 -0.05% 0.45% 0.95% 1.45% 1.95% 2.45% 2.95% 3.45% 3.95% '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 13 Net Write-offs (Ag) Installments 60+DPD (Ag) -0.05% 0.45% 0.95% 1.45% 1.95% 2.45% 2.95% 3.45% 3.95% '95 '98 '01 '04 '07 '10 13 Net Write-offs (C&F) Installments 60+DPD (C&F)
  • 36. | Deere & Company | October 2015 Interim Tier 4 (IT4): • 50% Nitrogen Oxide (NOx) reduction • 90% Particulate Matter (PM) reduction Final Tier 4 (FT4): • 80% NOx reduction Tier 4 Engine Implementation Final Tier 4 0 0.10 0.20 0.30 0.40 0.50 0 2.00 4.00 6.00 8.00 10.00 12.00 Tier 1 Tier 2 Tier 3 Interim Tier 4 NOx, g/kw-hr PM,g/kw-hr 36
  • 37. | Engine Emissions Final Tier 4 (FT4)/Stage IV Deere & Company | October 201537 • Over 12.5 million hours in the field* • FT4/Stage IV technologies deliver excellent performance and low operating costs • More applications transitioning to FT4/Stage IV than IT4/Stage IIIB emission programs • Maintain earlier tier solutions for global markets Interim Tier 4 (IT4)/Stage IIIA created foundation for FT4/Stage IV delivery • * As of October 2015
  • 38. | Engine Emissions 2015 Worldwide Off-Road Emissions Regulations > 75hp Deere & Company | October 201538 Stage II/Tier 2 Stage IIIA/Tier 3/TREM 3A (> 50hp) Stage IV/Final Tier 4 (> 75-750hp) • *Includes some non-EU28 countries that follow EU28 emissions regulations U.S. and Canada Final Tier 4 EU28* Stage IV Russia Transition to Stage IIIB: Ag tractors - 2017 China Stage IIIA Brazil Stage IIIA: • Construction equipment - January 2015 • Ag equipment - January 2017 India TREM 3A
  • 40. | Deere & Company | October 2015 U.S. Farm Cash Receipts $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 2016F $Billions Crops Livestock Government Payments Source: 1999 – 2013: USDA 10 February 2015 2014F – 2016F: Deere & Company Forecast as of 21 August 2015 40
  • 41. | Deere & Company | October 2015 U.S. Farm Balance Sheet Strong 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F $Billions Farm Debt Farm Equity Debt to Equity Ratio (%) Debt to Asset Ratio (%) Source: 1972 – 2013: USDA 10 February 2015 2014F – 2015F: Deere & Company Forecast as of 21 August 2015 41
  • 42. | Deere & Company | October 201542 World Farm Fundamentals Global Stocks-to-Use Ratios 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 1994 1997 2000 2003 2006 2009 2012 2015P Source: USDA – 9 October 2015 Cotton Wheat Corn Soybeans
  • 43. | Deere & Company | October 2015 World Farm Fundamentals Global Corn Supply and Demand Source: USDA – 9 October 2015 43 0 200 400 600 800 1,000 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 MillionMetricTons Production Total Consumption
  • 44. | Deere & Company | October 2015 U.S. Housing Starts 44 Source: 1962 – 2014: U.S. Census Bureau July 2015 2015F: Deere & Company Forecast as of 21 August 2015 0.000 0.250 0.500 0.750 1.000 1.250 1.500 1.750 2.000 2.250 2.500 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015F Housing Starts (Millions of Units) Multi-Family Housing Starts Single-Family Housing Starts
  • 45. | Deere & Company | October 2015 U.S. Construction Spending 45 -160% -150% -140% -130% -120% -110% -100% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F %TotalConstructionSpend Billions,2009Chained$’s U.S. Construction Spending (Billions, 2009 Chained $’s) Residential Investment in Structures Nonresidential Investment in Structures Government Investment in Structures Government Infrastructure Investment Source: 1997 – 2014: U.S. Bureau of Economic Analysis July 2015 2015F: Deere & Company Forecast as of 21 August 2015
  • 47. | Deere & Company | October 2015 2009 OROA* Reconciliation to GAAP Equipment Operations Equipment Operations 2009, as Reported Exclude Goodwill Impairment & Voluntary Employee- Separation 2009, as Adjusted Net Sales 20,756 20,756 Average Identifiable Assets With Inventories at LIFO 9,647 9,647 With Inventories at Standard Cost 10,950 10,950 Operating Profit 1,365 380 1,745 Percent of Net Sales 6.6% 8.4% Operating Return on Assets With Inventories at LIFO 14.1% 18.1% With Inventories at Standard Cost 12.5% 15.9% (millions of dollars unless stated otherwise) 47 * OROA: Operating Return on Operating Assets
  • 48. | Deere & Company | October 2015 SVA* Reconciliation to GAAP Equipment Operations Equipment Operations 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Net Sales 6,479 7,663 8,830 9,640 11,082 11,926 9,701 11,169 11,077 11,703 13,349 Average Identifiable Assets With Inventories at LIFO 5,449 5,551 6,187 6,502 6,682 7,672 7,724 8,069 8,743 6,229 5,965 With Inventories at Standard Cost 6,442 6,494 7,131 7,488 7,703 8,711 8,739 9,039 9,678 7,147 6,925 Operating Profit 242 847 1,006 1,125 1,402 1,476 272 693 (46) 401 708 Percent of Net Sales 3.7% 11.1% 11.4% 11.7% 12.6% 12.4% 2.8% 6.2% -0.4% 3.4% 5.3% Operating Return on Assets With Inventories at LIFO 4.4% 15.3% 16.3% 17.3% 21.0% 19.3% 3.5% 8.6% -0.5% 6.4% 11.9% With Inventories at Standard Cost 3.8% 13.0% 14.1% 15.0% 18.2% 16.9% 3.1% 7.7% -0.5% 5.6% 10.2% SVA Cost of Assets (773) (780) (856) (898) (924) (1,045) (1,049) (1,085) (1,162) (858) (831) SVA (531) 67 150 227 477 431 (776) (392) (1,208) (457) (123) Equipment Operations 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Sales 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 33,501 34,998 32,961 Average Identifiable Assets With Inventories at LIFO 6,482 7,248 7,546 8,092 9,652 9,647 9,196 11,516 13,594 14,569 14,113 With Inventories at Standard Cost 7,477 8,312 8,634 9,205 10,812 10,950 10,494 12,875 14,965 15,924 15,493 Operating Profit 1,905 1,842 1,905 2,318 2,927 1,365 2,909 3,839 4,397 5,058 4,297 Percent of Net Sales 10.8% 9.5% 9.6% 10.8% 11.3% 6.6% 12.3% 13.0% 13.1% 14.5% 13.0% Operating Return on Assets With Inventories at LIFO 29.4% 25.4% 25.2% 28.6% 30.3% 14.1% 31.6% 33.3% 32.3% 34.7% 30.4% With Inventories at Standard Cost 25.5% 22.2% 22.1% 25.2% 27.1% 12.5% 27.7% 29.8% 29.4% 31.8% 27.7% SVA Cost of Assets (897) (998) (1,036) (1,094) (1,284) (1,301) (1,259) (1,545) (1,795) (1,911) (1,860) SVA 1,008 844 869 1,224 1,643 64 1,650 2,294 2,602 3,147 2,437 (millions of dollars unless stated otherwise) 48 * SVA: Shareholder Value Added
  • 49. |