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8-K - 8-K - DEERE & COa10-10324_18k.htm
EX-99.3 - EX-99.3 - DEERE & COa10-10324_1ex99d3.htm
EX-99.1 - EX-99.1 - DEERE & COa10-10324_1ex99d1.htm

 

 

Deere & Company

Exhibit 99.2

 

 

Other Financial Information

(Furnished herewith)

 

 

For the Six Months Ended April 30,

 

Equipment Operations

 

 

Agriculture and Turf

 

 

Construction and Forestry

 

 

Dollars in millions

 

2010

 

2009

 

 

2010

 

2009

 

 

2010

 

2009

 

 

Net Sales

 

$

10,785

 

$

10,747

 

 

$

9,245

 

$

9,406

 

 

$

1,540

 

$

1,341

 

 

Average Identifiable Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

$

8,913

 

$

9,954

 

 

$

6,806

 

$

7,649

 

 

$

2,107

 

$

2,305

 

 

With Inventories at Standard Cost

 

$

10,244

 

$

11,221

 

 

$

7,922

 

$

8,715

 

 

$

2,302

 

$

2,506

 

 

Operating Profit

 

$

1,303

 

$

935

 

 

$

1,304

 

$

993

 

 

$

(1

)

$

(58

)

 

Percent of Net Sales

 

12.1

%

8.7

%

 

14.1

%

10.6

%

 

(.1

)%

(4.3

)%

 

Operating Return on Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

14.6

%

9.4

%

 

19.2

%

13.0

%

 

0

%

(2.5

)%

 

With Inventories at Standard Cost

 

12.7

%

8.3

%

 

16.5

%

11.4

%

 

0

%

(2.3

)%

 

SVA Cost of Assets

 

$

(613

)

$

(666

)

 

$

(475

)

$

(516

)

 

$

(138

)

$

(150

)

 

SVA

 

$

690

 

$

269

 

 

$

829

 

$

477

 

 

$

(139

)

$

(208

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended April 30,

 

Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in millions

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Deere & Company

 

$

172

 

$

116

 

 

 

 

 

 

 

 

 

 

 

 

Average Equity

 

$

3,001

 

$

2,614

 

 

 

 

 

 

 

 

 

 

 

 

Return on Equity

 

5.7

%

4.4

%

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

$

212

 

$

115

 

 

 

 

 

 

 

 

 

 

 

 

Change in Allowance for Doubtful Receivables

 

$

(8

)

$

13

 

 

 

 

 

 

 

 

 

 

 

 

SVA Income

 

$

204

 

$

128

 

 

 

 

 

 

 

 

 

 

 

 

Average Equity

 

$

3,001

 

$

2,614

 

 

 

 

 

 

 

 

 

 

 

 

Average Allowance for Doubtful Receivables

 

$

232

 

$

178

 

 

 

 

 

 

 

 

 

 

 

 

SVA Average Equity

 

$

3,233

 

$

2,792

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Equity

 

$

(189

)

$

(189

)

 

 

 

 

 

 

 

 

 

 

 

SVA

 

$

15

 

$

(61

)

 

 

 

 

 

 

 

 

 

 

 

 

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 generally 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.  Financial Services is assessed an annual pretax cost of average equity of 15 percent in 2010, compared to 18 percent in 2009, due to lower leverage in 2010.  The average equity excludes the effect of the allowance for doubtful receivables.  The cost of assets or equity, as applicable, is deducted from the operating profit or added to the operating loss of the equipment segments or Financial Services to determine the amount of SVA.  For this purpose, the operating profit of Financial Services is net income before income taxes and changes to the allowance for doubtful receivables.  The average equity and operating profit of Financial Services is adjusted for the allowance for doubtful receivables in order to more closely reflect credit losses on a write-off basis.

 

 

26