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EX-99.3 - EX-99.3 - DEERE & COa17-4267_1ex99d3.htm
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Deere & Company

Exhibit 99.2

 

Other Financial Information

(Furnished herewith)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Equipment Operations

Agriculture and Turf

Construction and Forestry

 

 

January 29

January 31

 January 29

January 31

January 29

January 31

Dollars in millions

 

2017

2016

2017

2016

2017

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

4,698

 

$

4,769

 

 $

3,598

 

$

3,600

 

$

1,100

 

$

1,169

 

Average Identifiable Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

$

11,596

 

$

11,800

 

 $

8,591

 

$

8,615

 

$

3,005

 

$

3,185

 

With Inventories at Standard Cost

 

$

12,870

 

$

13,062

 

 $

9,627

 

$

9,651

 

$

3,243

 

$

3,411

 

Operating Profit

 

$

247

 

$

214

 

 $

213

 

$

144

 

$

34

 

$

70

 

Percent of Net Sales

 

 

5.3

 %

 

4.5

 %

 

5.9

 %

 

 4.0

 %

 

3.1

 %

 

 6.0

 %

Operating Return on Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With Inventories at LIFO

 

 

2.1

 %

 

1.8

 %

 

2.5

 %

 

 1.7

 %

 

1.1

 %

 

 2.2

 %

With Inventories at Standard Cost

 

 

1.9

 %

 

1.6

 %

 

2.2

 %

 

 1.5

 %

 

1.0

 %

 

 2.1

 %

SVA Cost of Assets

 

$

(386

)

$

(392

)

 $

(289

)

$

(289

)

$

(97

)

$

(103

)

SVA

 

$

(139

)

$

(178

)

 $

(76

)

$

(145

)

$

(63

)

$

(33

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 29

January 31

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in millions

 

2017

2016

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Deere & Company

 

$

114

 

$

129

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,442

 

$

4,455

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Equity

 

 

2.6

 %

 

2.9

 %

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

$

169

 

$

194

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Equity

 

$

4,442

 

$

4,455

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Equity

 

$

(164

)

$

(166

)

 

 

 

 

 

 

 

 

 

 

 

 

SVA

 

$

5

 

$

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company evaluates its business results based on 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 based on 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 15 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.

 

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