Deere Reports Net Income of $1.245 Billion for Fourth Quarter, $7.1 Billion for Fiscal Year

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Nov 21, 2024, 06:23 ET

Results demonstrate solid execution despite ongoing market challenges.
Full-year 2025 earnings projected to range from $5.0 to $5.5 billion, highlighting improved structural performance.
Remain committed to making investments that enhance customer productivity and profitability.

MOLINE, Ill., Nov. 21, 2024 /CNW/ -- Deere & Company ($DE) reported net income of $1.245 billion for the fourth quarter ended October 27, 2024, or $4.55 per share, compared with net income of $2.369 billion, or $8.26 per share, for the quarter ended October 29, 2023. For fiscal-year 2024, net income attributable to Deere & Company was $7.100 billion, or $25.62 per share, compared with $10.166 billion, or $34.63 per share, in fiscal 2023.

Production & Precision Agriculture Operating Profit; Fourth Quarter 2024 Compared to Fourth Quarter 2023; $ in millions

Small Agriculture & Turf Operating Profit; Fourth Quarter 2024 Compared to Fourth Quarter 2023; $ in millions

Construction & Forestry Operating Profit; Fourth Quarter 2024 Compared to Fourth Quarter 2023; $ in millions

Worldwide net sales and revenues decreased 28 percent, to $11.143 billion, for the fourth quarter of fiscal 2024 and decreased 16 percent, to $51.716 billion, for the full year. Net sales were $9.275 billion for the quarter and $44.759 billion for the year, compared with $13.801 billion and $55.565 billion in fiscal 2023, respectively.

"Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment," said John May, chairman and CEO of Deere & Company. "Together with the structural improvements made over the past several years, these adjustments enable us to serve our customers more effectively and achieve strong results across the business cycle."

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2025 is forecasted to be in a range of $5.0 billion to $5.5 billion.

"As we navigate ongoing headwinds across our markets, we remain committed to making meaningful investments in our future while deepening our relationships with customers," May continued. "Our team of over 75,000 dedicated employees come to work each day with a singular focus: delivering products and solutions that enhance efficiency and reduce operating costs for our customers. By providing the essential tools they need, we empower our customers to succeed and thrive in an ever-evolving and challenging landscape."


Deere & Company	Fourth Quarter					Full Year
$ in millions, except per share amounts	2024		2023		% Change	2024		2023		% Change
Net sales and revenues	$	11,143	$	15,412	-28 %	$	51,716	$	61,251	-16 %
Net income	$	1,245	$	2,369	-47 %	$	7,100	$	10,166	-30 %
Fully diluted EPS	$	4.55	$	8.26		$	25.62	$	34.63

Results for the presented periods were affected by special items. See Note 1 of the financial statements for further details.


Production & Precision Agriculture	Fourth Quarter
$ in millions	2024		2023		% Change
Net sales	$	4,305	$	6,965	-38 %
Operating profit	$	657	$	1,836	-64 %
Operating margin		15.3 %		26.4 %

Production and precision agriculture sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs.


Small Agriculture & Turf	Fourth Quarter
$ in millions	2024		2023		% Change
Net sales	$	2,306	$	3,094	-25 %
Operating profit	$	234	$	444	-47 %
Operating margin		10.1 %		14.4 %

Small agriculture and turf sales decreased for the quarter due to lower shipment volumes, partially offset by price realization. Operating profit decreased due to lower shipment volumes / sales mix and special items described in Note 1, partially offset by price realization and lower warranty expenses.


Construction & Forestry	Fourth Quarter
$ in millions	2024		2023		% Change
Net sales	$	2,664	$	3,742	-29 %
Operating profit	$	328	$	516	-36 %
Operating margin		12.3 %		13.8 %

Construction and forestry sales decreased for the quarter due to lower shipment volumes. Operating profit decreased primarily due to lower shipment volumes / sales mix, partially offset by lower production costs and the special items described in Note 1.


Financial Services	Fourth Quarter
$ in millions	2024		2023		% Change
Net income	$	173	$	190	-9 %

Financial services net income for the quarter decreased due to a higher provision for credit losses, partially offset by income earned on higher average portfolio balances, a reduction in derivative valuation adjustments, and lower SA&G expenses. The results of the current quarter were also affected by the increased valuation allowance on assets held for sale of Banco John Deere S.A. See Note 1 of the financial statements for further details.


Industry Outlook for Fiscal 2025
Agriculture & Turf
U.S. & Canada:
Large Ag						Down ~30%
Small Ag & Turf						Down ~10%
Europe						Down 5 to 10%
South America (Tractors & Combines)						Flat
Asia						Down slightly

Construction & Forestry
U.S. & Canada:
Construction Equipment						Down ~10%
Compact Construction Equipment						Down ~5%
Global Forestry						Flat to down 5%
Global Roadbuilding						Flat


Deere Segment Outlook for Fiscal 2025		Currency	Price
$ in millions	Net Sales	Translation	Realization
Production & Precision Ag	Down ~15%	-0.5 %	~ +1.0%
Small Ag & Turf	Down ~10%	+0.5 %	~ +0.5%
Construction & Forestry	Down 10 to 15%	~ Flat	~ +1.0%

Financial Services	Net Income	~ $750

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, including in the section entitled "Company Outlook & Summary," "Industry Outlook," "Deere Segment Outlook," and "Condensed Notes to Consolidated Financial Statements" relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations generally while others could more heavily affect a particular line of business.

Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events and should not be relied upon. Except as required by law, the company expressly disclaims any obligation to update or revise its forward-looking statements. Many factors, risks, and uncertainties could cause actual results to differ materially from these forward-looking statements. Among these factors are risks related to:

the agricultural business cycle, which can be unpredictable and is affected by factors such as world grain stocks, harvest yields, available farm acres, acreage planted, soil conditions, prices for commodities and livestock, input costs, availability of transport for crops as well as adverse macroeconomic conditions, including unemployment, inflation, interest rate volatility, changes in consumer practices due to slower economic growth, and regional or global liquidity constraints; these constraints may impact our customers and dealers, resulting in higher provisions for credit losses and write-offs;
uncertainty of government policies and actions after recent U.S. elections in respect to global trade, tariffs, trade agreements, and the uncertainty of our ability to sell products internationally based on these actions and policies;
higher interest rates and currency fluctuations which could adversely affect the U.S. dollar, customer confidence, access to capital, and demand for the company's products and solutions;
the company's ability to adapt in highly competitive markets;
housing starts and supply, real estate and housing prices, levels of public and non-residential construction, and infrastructure investment;
political, economic, and social instability of the geographies in which the company operates, including the ongoing war between Russia and Ukraine and the conflict in the Middle East;
worldwide demand for food and different forms of renewable energy impacting the price of farm commodities and consequently the demand for the company's equipment;
availability and price of raw materials, components, and whole goods;
delays or disruptions in the company's supply chain;
suppliers' and manufacturers' business practices and compliance with applicable laws such as human rights, safety, environmental, and fair wages;
changes in climate patterns, unfavorable weather events, and natural disasters;
loss of or challenges to intellectual property rights;
rationalization, restructuring, relocation, expansion and/or reconfiguration of manufacturing and warehouse facilities;
the ability to execute business strategies, including the company's Smart Industrial Operating Model and Leap Ambitions;
the ability to understand and meet customers' changing expectations and demand for the company's products and solutions, including delivery and utilization of precision technology;
accurately forecasting customer demand for products and services and adequately managing inventory;
dealer practices and their ability to manage inventory and distribution of the company's products and to provide support and service for precision technology solutions;
the ability to realize anticipated benefits of acquisitions and joint ventures, including challenges with successfully integrating operations and internal control processes;
negative claims or publicity that damage the company's reputation or brand;
the ability to attract, develop, engage, and retain qualified employees;
the impact of workforce reductions on company culture, employee retention and morale, and institutional knowledge;
labor relations and contracts, including work stoppages and other disruptions;
security breaches, cybersecurity attacks, technology failures, and other disruptions to the company's information technology infrastructure and products;
leveraging artificial intelligence and machine learning within the company's business processes;
changes to governmental communications channels (radio frequency technology);
changes to existing laws and regulations, including the implementation of new, more stringent laws, as well as compliance with a variety of U.S., foreign and international laws, regulations, and policies relating to, but not limited to the following: advertising, anti-bribery and anti-corruption, anti-money laundering, antitrust, consumer finance, cybersecurity, data privacy, encryption, environmental (including climate change and engine emissions), farming, health and safety, foreign exchange controls and cash repatriation restrictions, foreign ownership and investment, human rights, import / export and trade, labor and employment, product liability, telematics, and telecommunications;
governmental and other actions designed to address climate change in connection with a transition to a lower-carbon economy;
investigations, claims, lawsuits, or other legal proceedings; and
warranty claims, post-sales repairs or recalls, product liability litigation, and regulatory investigations as a result of the deficient operation of the company's products.

Further information concerning the company or its businesses, including factors that could materially affect the company's financial results, is included in the company's filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). There also may be other factors that the company cannot anticipate or that are not described herein because the company does not currently perceive them to be material.

DEERE & COMPANY
FOURTH QUARTER 2024 PRESS RELEASE
(In millions of dollars) Unaudited
	Three Months Ended					Years Ended
	October 27		October 29		%	October 27		October 29		%
	2024		2023		Change	2024		2023		Change
Net sales and revenues:
Production & precision ag net sales	$	4,305	$	6,965	-38	$	20,834	$	26,790	-22
Small ag & turf net sales		2,306		3,094	-25		10,969		13,980	-22
Construction & forestry net sales		2,664		3,742	-29		12,956		14,795	-12
Financial services revenues		1,522		1,347	+13		5,782		4,721	+22
Other revenues		346		264	+31		1,175		965	+22
Total net sales and revenues	$	11,143	$	15,412	-28	$	51,716	$	61,251	-16

Operating profit: *
Production & precision ag	$	657	$	1,836	-64	$	4,514	$	6,996	-35
Small ag & turf		234		444	-47		1,627		2,472	-34
Construction & forestry		328		516	-36		2,009		2,695	-25
Financial services		231		229	+1		889		795	+12
Total operating profit		1,450		3,025	-52		9,039		12,958	-30
Reconciling items **		43		51	-16		155		79	+96
Income taxes		(248)		(707)	-65		(2,094)		(2,871)	-27
Net income attributable to Deere & Company	$	1,245	$	2,369	-47	$	7,100	$	10,166	-30


*	Operating profit is income from continuing operations before corporate expenses, certain external interest expenses, certain foreign exchange gains and losses, and income taxes. Operating profit for financial services includes the effect of interest expense and foreign exchange gains or losses.
**	Reconciling items are primarily corporate expenses, certain interest income and expenses, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.

DEERE & COMPANY
STATEMENTS OF CONSOLIDATED INCOME
For the Three Months and Years Ended October 27, 2024 and October 29, 2023
(In millions of dollars and shares except per share amounts) Unaudited
	Three Months Ended				Years Ended
	2024		2023		2024		2023
Net Sales and Revenues
Net sales	$	9,275	$	13,801	$	44,759	$	55,565
Finance and interest income		1,551		1,357		5,759		4,683
Other income		317		254		1,198		1,003
Total		11,143		15,412		51,716		61,251

Costs and Expenses
Cost of sales		6,571		9,427		30,775		37,715
Research and development expenses		626		606		2,290		2,177
Selling, administrative and general expenses		1,232		1,203		4,840		4,595
Interest expense		870		781		3,348		2,453
Other operating expenses		326		322		1,257		1,292
Total		9,625		12,339		42,510		48,232

Income of Consolidated Group before Income Taxes		1,518		3,073		9,206		13,019
Provision for income taxes		248		707		2,094		2,871

Income of Consolidated Group		1,270		2,366		7,112		10,148
Equity in income (loss) of unconsolidated affiliates		(28)		2		(24)		7

Net Income		1,242		2,368		7,088		10,155
Less: Net loss attributable to noncontrolling interests		(3)		(1)		(12)		(11)
Net Income Attributable to Deere & Company	$	1,245	$	2,369	$	7,100	$	10,166

Per Share Data
Basic	$	4.57	$	8.30	$	25.73	$	34.80
Diluted		4.55		8.26		25.62		34.63
Dividends declared		1.47		1.35		5.88		5.05
Dividends paid		1.47		1.25		5.76		4.83

Average Shares Outstanding
Basic		272.6		285.5		276.0		292.2
Diluted		273.6		286.9		277.1		293.6

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited
	2024		2023
Assets
Cash and cash equivalents	$	7,324	$	7,458
Marketable securities		1,154		946
Trade accounts and notes receivable – net		5,326		7,739
Financing receivables – net		44,309		43,673
Financing receivables securitized – net		8,723		7,335
Other receivables		2,545		2,623
Equipment on operating leases – net		7,451		6,917
Inventories		7,093		8,160
Property and equipment – net		7,580		6,879
Goodwill		3,959		3,900
Other intangible assets – net		999		1,133
Retirement benefits		2,921		3,007
Deferred income taxes		2,086		1,814
Other assets		2,906		2,503
Assets held for sale		2,944
Total Assets	$	107,320	$	104,087

Liabilities and Stockholders' Equity

Liabilities
Short-term borrowings	$	13,533	$	17,939
Short-term securitization borrowings		8,431		6,995
Accounts payable and accrued expenses		14,543		16,130
Deferred income taxes		478		520
Long-term borrowings		43,229		38,477
Retirement benefits and other liabilities		2,354		2,140
Liabilities held for sale		1,827
Total liabilities		84,395		82,201

Redeemable noncontrolling interest		82		97

Stockholders' Equity
Total Deere & Company stockholders' equity		22,836		21,785
Noncontrolling interests		7		4
Total stockholders' equity		22,843		21,789
Total Liabilities and Stockholders' Equity	$	107,320	$	104,087

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Years Ended October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited
	2024		2023
Cash Flows from Operating Activities
Net income	$	7,088	$	10,155
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses		310		(16)
Provision for depreciation and amortization		2,118		2,004
Impairments and other adjustments		125		191
Share-based compensation expense		208		130
Credit for deferred income taxes		(294)		(790)
Changes in assets and liabilities:
Receivables related to sales		421		(4,253)
Inventories		788		279
Accounts payable and accrued expenses		(1,040)		830
Accrued income taxes payable/receivable		(123)		(23)
Retirement benefits		(227)		(170)
Other		(143)		252
Net cash provided by operating activities		9,231		8,589

Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)		25,162		23,051
Proceeds from maturities and sales of marketable securities		832		186
Proceeds from sales of equipment on operating leases		1,929		1,981
Cost of receivables acquired (excluding receivables related to sales)		(28,816)		(28,772)
Acquisitions of businesses, net of cash acquired				(82)
Purchases of marketable securities		(1,055)		(491)
Purchases of property and equipment		(1,640)		(1,498)
Cost of equipment on operating leases acquired		(3,162)		(2,970)
Collateral on derivatives – net		413		(12)
Other		(127)		(142)
Net cash used for investing activities		(6,464)		(8,749)

Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)		(1,856)		4,008
Proceeds from borrowings issued (original maturities greater than three months)		18,096		15,429
Payments of borrowings (original maturities greater than three months)		(13,232)		(7,913)
Repurchases of common stock		(4,007)		(7,216)
Dividends paid		(1,605)		(1,427)
Other		(113)		(73)
Net cash provided by (used for) financing activities		(2,717)		2,808

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		(37)		31

Net Increase in Cash, Cash Equivalents, and Restricted Cash		13		2,679
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year		7,620		4,941
Cash, Cash Equivalents, and Restricted Cash at End of Year	$	7,633	$	7,620

See Condensed Notes to Consolidated Financial Statements.

DEERE & COMPANY
Condensed Notes to Consolidated Financial Statements
(In millions of dollars) Unaudited

(1) Special Items

2024

Legal Settlements

The company reached legal settlements concerning patent infringement claims. As a result of these settlements, in the fourth quarter of 2024, the company recognized a total of $57 million pretax gain ($45 million after-tax) in "Other Income," providing a benefit of $17 million to production and precision agriculture (PPA) and $40 million to construction and forestry (CF). These settlements resolve the disputes without any admission of liability by the parties involved. The company believes that these settlements enhance its ability to protect its intellectual property and reinforce its commitment to innovation and technological advancement.

Impairment

In the fourth quarter of 2024, the company recorded a non-cash charge of $28 million pretax and after-tax in "Equity in income (loss) of unconsolidated affiliates" for an other than temporary decline in value of an investment recorded in small agriculture and turf (SAT).

Employee-Separation Programs

In the third quarter of 2024, the company implemented employee-separation programs for its salaried workforce in several geographic areas, including the United States, Europe, Asia, and Latin America. The programs' main purpose was to help meet the company's strategic priorities while reducing overlap and redundancy in roles and responsibilities. The programs were largely involuntary in nature with the expense recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. For the limited voluntary employee-separation programs, the expense was recorded in the period in which the employee irrevocably accepted a separation offer.

The programs' total pretax expenses are estimated to be approximately $165 million. In 2024, $157 million pretax ($124 million after-tax) expenses were recorded related to the programs, of which $130 million was paid in 2024 and the remainder is expected to be paid in 2025. The remaining expenses are associated with programs in international locations and are expected to be recorded and paid in 2025. The programs' pretax expenses recorded for the periods ended October 27, 2024 by operating segment, PPA, SAT, CF, and financial services (FS), were as follows in millions of dollars:


	Three Months										Fiscal Year
	PPA		SAT		CF		FS		Total		PPA		SAT		CF		FS		Total
Cost of sales	$	3	$	2					$	5	$	21	$	11	$	8			$	40
Research and development expenses		3		3	$	1				7		22		9		2				33
Selling, administrative and general expenses		9		9		1	$	1		20		34		23		12	$	10		79
Total operating profit decrease	$	15	$	14	$	2	$	1		32	$	77	$	43	$	22	$	10		152
Non-operating profit expenses*										1										5
Total									$	33									$	157

*Relates primarily to corporate expenses.

Annual pretax savings from these programs are estimated to be approximately $220 million. Approximately $100 million of savings was realized in 2024.

Banco John Deere S.A.

In August 2024, the company entered into a joint venture agreement with a Brazilian bank, Banco Bradesco S.A. (Bradesco), for Bradesco to invest and become 50 percent owner of the company's wholly owned subsidiary in Brazil, Banco John Deere S.A. (BJD). BJD is included in the company's financial services segment and finances retail and wholesale loans for agricultural, construction, and forestry equipment. The transaction will reduce the company's incremental risk as it continues to grow in the Brazilian market.

The BJD business was reclassified as held for sale in the third quarter of 2024. At that time, a reversal of $38 million in allowance for credit losses and a $53 million valuation allowance was recorded. In October 2024, the valuation allowance on assets held for sale increased to $97 million. The net impact of these entries was a pretax and after-tax loss of $44 million and $59 million recorded in "Selling, administrative and general expenses" in the three months and fiscal year ended October 27, 2024, respectively.

2023

Russian Roadbuilding Sale

In the fourth quarter of 2023, the company sold its Russian roadbuilding business, recognizing a loss of $18 million (pretax and after-tax). The loss was recorded in "Other operating expenses" in the construction and forestry segment.

Brazil Tax Ruling

In the third quarter of 2023, the Brazil Superior Court of Justice published a favorable tax ruling regarding taxability of local incentives, which allowed the company to record a $243 million reduction in the provision for income taxes and $47 million of interest income.

Financial Services Financing Incentives Correction

In the second quarter of 2023, the company corrected the accounting treatment for financing incentives offered to John Deere dealers, which impacted the timing of expense recognition and the presentation of incentive costs in the consolidated financial statements. The cumulative effect of this correction, $173 million pretax ($135 million after-tax), was recorded in the second quarter of 2023 in "Selling, administrative and general expenses" by financial services.

Summary of 2024 and 2023 Special Items

The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded for the three months and fiscal years ended October 27, 2024 and October 29, 2023:


	Three Months										Fiscal Years
	PPA		SAT		CF		FS		Total		PPA		SAT		CF		FS		Total
2024 Expense (benefit):
Legal settlements	$	(17)			$	(40)			$	(57)	$	(17)			$	(40)			$	(57)
Impairment			$	28						28			$	28						28
Employee-separation programs		15		14		2	$	1		32		77		43		22	$	10		152
BJD measurement								44		44								59		59
Total expense (benefit)		(2)		42		(38)		45		47		60		71		(18)		69		182

2023 Expense:
Russian roadbuilding sale						18				18						18				18
Financing incentives correction																		173		173
Total expense						18				18						18		173		191

Period over period change	$	(2)	$	42	$	(56)	$	45	$	29	$	60	$	71	$	(36)	$	(104)	$	(9)

(2)

The consolidated financial statements represent the consolidation of all the company's subsidiaries. The supplemental consolidating data in Note 3 to the financial statements is presented for informational purposes. Equipment operations represents the enterprise without financial services. Equipment operations includes the company's production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations, and other corporate assets, liabilities, revenues, and expenses not reflected within financial services. Transactions between the equipment operations and financial services have been eliminated to arrive at the consolidated financial statements.

DEERE & COMPANY
(3) SUPPLEMENTAL CONSOLIDATING DATA
STATEMENTS OF INCOME
For the Three Months Ended October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited

	EQUIPMENT				FINANCIAL
	OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
	2024		2023		2024		2023		2024		2023		2024		2023
Net Sales and Revenues
Net sales	$	9,275	$	13,801									$	9,275	$	13,801
Finance and interest income		154		193	$	1,569	$	1,445	$	(172)	$	(281)		1,551		1,357	¹
Other income		274		218		117		121		(74)		(85)		317		254	^{2, 3, 4}
Total		9,703		14,212		1,686		1,566		(246)		(366)		11,143		15,412

Costs and Expenses
Cost of sales		6,578		9,433						(7)		(6)		6,571		9,427	⁴
Research and development expenses		626		606										626		606
Selling, administrative and general expenses		946		980		288		225		(2)		(2)		1,232		1,203	⁴
Interest expense		83		114		828		757		(41)		(90)		870		781	¹
Interest compensation to Financial Services		131		191						(131)		(191)					¹
Other operating expenses		54		45		337		354		(65)		(77)		326		322	^{3, 4, 5}
Total		8,418		11,369		1,453		1,336		(246)		(366)		9,625		12,339

Income before Income Taxes		1,285		2,843		233		230						1,518		3,073
Provision for income taxes		187		665		61		42						248		707

Income after Income Taxes		1,098		2,178		172		188						1,270		2,366
Equity in income (loss) of unconsolidated affiliates		(29)				1		2						(28)		2

Net Income		1,069		2,178		173		190						1,242		2,368
Less: Net loss attributable to noncontrolling interests		(3)		(1)										(3)		(1)
Net Income Attributable to Deere & Company	$	1,072	$	2,179	$	173	$	190					$	1,245	$	2,369


¹	Elimination of intercompany interest income and expense.
²	Elimination of equipment operations' margin from inventory transferred to equipment on operating leases.
³	Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets.
⁴	Elimination of intercompany service revenues and fees.
⁵	Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.

DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF INCOME
For the Years Ended October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited

	EQUIPMENT				FINANCIAL
	OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
	2024		2023		2024		2023		2024		2023		2024		2023
Net Sales and Revenues
Net sales	$	44,759	$	55,565									$	44,759	$	55,565
Finance and interest income		596		636	$	6,035	$	5,055	$	(872)	$	(1,008)		5,759		4,683	¹
Other income		1,006		858		458		499		(266)		(354)		1,198		1,003	^{2, 3, 4}
Total		46,361		57,059		6,493		5,554		(1,138)		(1,362)		51,716		61,251

Costs and Expenses
Cost of sales		30,803		37,739						(28)		(24)		30,775		37,715	⁴
Research and development expenses		2,290		2,177										2,290		2,177
Selling, administrative and general expenses		3,791		3,611		1,059		994		(10)		(10)		4,840		4,595	⁴
Interest expense		396		411		3,182		2,362		(230)		(320)		3,348		2,453	¹
Interest compensation to Financial Services		640		687						(640)		(687)					¹
Other operating expenses		133		217		1,354		1,396		(230)		(321)		1,257		1,292	^{3, 4, 5}
Total		38,053		44,842		5,595		4,752		(1,138)		(1,362)		42,510		48,232

Income before Income Taxes		8,308		12,217		898		802						9,206		13,019
Provision for income taxes		1,887		2,685		207		186						2,094		2,871

Income after Income Taxes		6,421		9,532		691		616						7,112		10,148
Equity in income (loss) of unconsolidated affiliates		(29)		4		5		3						(24)		7

Net Income		6,392		9,536		696		619						7,088		10,155
Less: Net loss attributable to noncontrolling interests		(12)		(11)										(12)		(11)
Net Income Attributable to Deere & Company	$	6,404	$	9,547	$	696	$	619					$	7,100	$	10,166


¹	Elimination of intercompany interest income and expense.
²	Elimination of equipment operations' margin from inventory transferred to equipment on operating leases.
³	Elimination of income and expenses between equipment operations and financial services related to intercompany guarantees of investments in certain international markets.
⁴	Elimination of intercompany service revenues and fees.
⁵	Elimination of financial services' lease depreciation expense related to inventory transferred to equipment on operating leases.

DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
CONDENSED BALANCE SHEETS
As of October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited

	EQUIPMENT				FINANCIAL
	OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
	2024		2023		2024		2023		2024		2023		2024		2023
Assets
Cash and cash equivalents	$	5,615	$	5,720	$	1,709	$	1,738					$	7,324	$	7,458
Marketable securities		125		104		1,029		842						1,154		946
Receivables from Financial Services		3,043		4,516					$	(3,043)	$	(4,516)					⁶
Trade accounts and notes receivable – net		1,257		1,320		6,225		8,687		(2,156)		(2,268)		5,326		7,739	⁷
Financing receivables – net		78		64		44,231		43,609						44,309		43,673
Financing receivables securitized – net		2				8,721		7,335						8,723		7,335
Other receivables		2,193		1,813		427		869		(75)		(59)		2,545		2,623	⁷
Equipment on operating leases – net						7,451		6,917						7,451		6,917
Inventories		7,093		8,160										7,093		8,160
Property and equipment – net		7,546		6,843		34		36						7,580		6,879
Goodwill		3,959		3,900										3,959		3,900
Other intangible assets – net		999		1,133										999		1,133
Retirement benefits		2,839		2,936		83		72		(1)		(1)		2,921		3,007	⁸
Deferred income taxes		2,262		2,133		43		68		(219)		(387)		2,086		1,814	⁹
Other assets		2,194		1,948		715		559		(3)		(4)		2,906		2,503
Assets held for sale						2,944								2,944
Total Assets	$	39,205	$	40,590	$	73,612	$	70,732	$	(5,497)	$	(7,235)	$	107,320	$	104,087

Liabilities and Stockholders' Equity

Liabilities
Short-term borrowings	$	911	$	1,230	$	12,622	$	16,709					$	13,533	$	17,939
Short-term securitization borrowings		2				8,429		6,995						8,431		6,995
Payables to Equipment Operations						3,043		4,516	$	(3,043)	$	(4,516)					⁶
Accounts payable and accrued expenses		13,534		14,862		3,243		3,599		(2,234)		(2,331)		14,543		16,130	⁷
Deferred income taxes		434		452		263		455		(219)		(387)		478		520	⁹
Long-term borrowings		6,603		7,210		36,626		31,267						43,229		38,477
Retirement benefits and other liabilities		2,250		2,032		105		109		(1)		(1)		2,354		2,140	⁸
Liabilities held for sale						1,827								1,827
Total liabilities		23,734		25,786		66,158		63,650		(5,497)		(7,235)		84,395		82,201

Redeemable noncontrolling interest		82		97										82		97

Stockholders' Equity
Total Deere & Company stockholders' equity		22,836		21,785		7,454		7,082		(7,454)		(7,082)		22,836		21,785	¹⁰
Noncontrolling interests		7		4										7		4
Financial Services' equity		(7,454)		(7,082)						7,454		7,082					¹⁰
Adjusted total stockholders' equity		15,389		14,707		7,454		7,082						22,843		21,789
Total Liabilities and Stockholders' Equity	$	39,205	$	40,590	$	73,612	$	70,732	$	(5,497)	$	(7,235)	$	107,320	$	104,087


⁶	Elimination of receivables / payables between equipment operations and financial services.
⁷	Primarily reclassification of sales incentive accruals on receivables sold to financial services.
⁸	Reclassification of net pension assets / liabilities.
⁹	Reclassification of deferred tax assets / liabilities in the same taxing jurisdictions.
¹⁰	Elimination of financial services' equity.

DEERE & COMPANY
SUPPLEMENTAL CONSOLIDATING DATA (Continued)
STATEMENTS OF CASH FLOWS
For the Years Ended October 27, 2024 and October 29, 2023
(In millions of dollars) Unaudited

	EQUIPMENT				FINANCIAL
	OPERATIONS				SERVICES				ELIMINATIONS				CONSOLIDATED
	2024		2023		2024		2023		2024		2023		2024		2023
Cash Flows from Operating Activities
Net income	$	6,392	$	9,536	$	696	$	619					$	7,088	$	10,155
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses		14		7		296		(23)						310		(16)
Provision for depreciation and amortization		1,220		1,123		1,040		1,016	$	(142)	$	(135)		2,118		2,004	¹¹
Impairments and other adjustments		28		18		97		173						125		191
Share-based compensation expense										208		130		208		130	¹²
Distributed earnings of Financial Services		250		215						(250)		(215)					¹³
Provision (credit) for deferred income taxes		(97)		(959)		(197)		169						(294)		(790)
Changes in assets and liabilities:
Receivables related to sales		(13)		(58)						434		(4,195)		421		(4,253)	^{14, 16}
Inventories		1,011		474						(223)		(195)		788		279	¹⁵
Accounts payable and accrued expenses		(1,429)		1,352		277		449		112		(971)		(1,040)		830	¹⁶
Accrued income taxes payable/receivable		(218)		8		95		(31)						(123)		(23)
Retirement benefits		(215)		(164)		(12)		(6)						(227)		(170)
Other		(38)		367		40		(51)		(145)		(64)		(143)		252	^{11, 12, 15}
Net cash provided by operating activities		6,905		11,919		2,332		2,315		(6)		(5,645)		9,231		8,589

Cash Flows from Investing Activities
Collections of receivables (excluding receivables related to sales)						26,029		24,128		(867)		(1,077)		25,162		23,051	¹⁴
Proceeds from maturities and sales of marketable securities		99		59		733		127						832		186
Proceeds from sales of equipment on operating leases						1,929		1,981						1,929		1,981
Cost of receivables acquired (excluding receivables related to sales)						(29,152)		(29,229)		336		457		(28,816)		(28,772)	¹⁴
Acquisitions of businesses, net of cash acquired				(82)												(82)
Purchases of marketable securities		(209)		(173)		(846)		(318)						(1,055)		(491)
Purchases of property and equipment		(1,636)		(1,494)		(4)		(4)						(1,640)		(1,498)
Cost of equipment on operating leases acquired						(3,464)		(3,234)		302		264		(3,162)		(2,970)	¹⁵
Decrease (increase) in investment in Financial Services		4		(870)						(4)		870					¹⁷
Decrease (increase) in trade and wholesale receivables						21		(5,783)		(21)		5,783					¹⁴
Collateral on derivatives – net				(1)		413		(11)						413		(12)
Other		(125)		(176)		(8)		31		6		3		(127)		(142)
Net cash used for investing activities		(1,867)		(2,737)		(4,349)		(12,312)		(248)		6,300		(6,464)		(8,749)

Cash Flows from Financing Activities
Net proceeds (payments) in short-term borrowings (original maturities three months or less)		28		(113)		(1,884)		4,121						(1,856)		4,008
Change in intercompany receivables/payables		1,459		2,090		(1,459)		(2,090)
Proceeds from borrowings issued (original maturities greater than three months)		159		342		17,937		15,087						18,096		15,429
Payments of borrowings (original maturities greater than three months)		(1,123)		(901)		(12,109)		(7,012)						(13,232)		(7,913)
Repurchases of common stock		(4,007)		(7,216)										(4,007)		(7,216)
Capital investment from Equipment Operations						(4)		870		4		(870)					¹⁷
Dividends paid		(1,605)		(1,427)		(250)		(215)		250		215		(1,605)		(1,427)	¹³
Other		(46)		(7)		(67)		(66)						(113)		(73)
Net cash provided by (used for) financing activities		(5,135)		(7,232)		2,164		10,695		254		(655)		(2,717)		2,808

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash		(15)		24		(22)		7						(37)		31

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash		(112)		1,974		125		705						13		2,679
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year		5,755		3,781		1,865		1,160						7,620		4,941
Cash, Cash Equivalents, and Restricted Cash at End of Year	$	5,643	$	5,755	$	1,990	$	1,865					$	7,633	$	7,620


¹¹	Elimination of depreciation on leases related to inventory transferred to equipment on operating leases.
¹²	Reclassification of share-based compensation expense.
¹³	Elimination of dividends from financial services to the equipment operations, which are included in the equipment operations operating activities.
¹⁴	Primarily reclassification of receivables related to the sale of equipment.
¹⁵	Reclassification of direct lease agreements with retail customers.
¹⁶	Reclassification of sales incentive accruals on receivables sold to financial services.
¹⁷	Elimination of change in investment from equipment operations to financial services.

SOURCE John Deere Company

Jen Hartmann, Director, Public Relations, [email protected]

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