John Deere had another strong year in 2012. Our results reflected the sound execution of our business plans, centered on global expansion and disciplined cost and asset management. Among our achievements, we delivered our highest-ever sales and income, made substantial investments to expand our worldwide footprint, and continued an aggressive launch of advanced new products. We also built on our strong record as a responsible corporate citizen and
leading employer. As a result, the company remains well
rose fully 15 percent, reflecting the impact of fewer shares
positioned to earn solid profits even in a fragile global economy
outstanding. The company has set annual income records
and, longer term, to benefit from broad trends that we believe
seven times since 2003. That means investing to capitalize on
hold great promise.
powerful macroeconomic trends related to a growing, more
For fiscal 2012, Deere reported income of $3.1 billion, on
affluent global populationlike focus on operational excellence
net sales and revenues of $36.2 billion. Both figures exceeded
and customer service. In addition, the company maintained
previous highs set in 2011. Income was up 9 percent on a 13
its strong financial condition. At year-end, Deere’s equipment
percent increase in sales and revenues. Earnings per share
operations carried some $5 billion of cash and securities.
WHERE WE'VE
COME FROM The story of John Deere, who developed
and is presumed to have died at sea.
the first commercially successful,
Raised by a mother on a meager income,
selfscouring steel plow, closely parallels
John Deere’s education was probably
the settlement and development of the
rudimentary and limited to the common
midwestern USA.
schools of Vermont. At the age of 17,
Deere was born in Rutland, Vermont,
he apprenticed himself and learned the
on February 7, 1804, the third son of
trade of blacksmithing, which he carried
William Rinold Deere and Sarah Yates
on at places in Vermont.
Deere. In 1805, the family moved to
In 1836, facing depressed business
Middlebury, Vermont, where William
conditions in Vermont and with a young
engaged in merchant tailoring. In 1808,
family to care for, Deere traveled alone
he boarded a boat for England, in the
to Grand Detour, Illinois, to make a fresh
hopes of claiming an inheritance and
start. Resourceful and hard working, his
making a more comfortable life for his
skills as a blacksmith were immediately
family. He was never heard from again,
in demand.
NET SALES & REVENUES
Our performance was led by the Agriculture & Turf division (A&T), which had another banner year. Deere’s largest division brought advanced new products to market, broadened its customer base, and reinforced its preeminent position in key markets. A&T results were aided by positive farm conditions and higher sales of large equipment, particularly in the United States. In other businesses, Construction & Forestry
Deere’s financial services organization delivered solid profits while providing competitive financing to our
(C&F) continued a turnaround with operating profit
equipment customers on an increasingly global scale.
climbing 21 percent on a sales increase of 19
Although net earnings declined slightly from 2011
percent. Division sales have risen well over two-fold
record levels, the loan portfolio grew by about $4 billion.
since 2009. C&F introduced advanced new products,
Credit quality remained exceptionally strong, with the
continued its expansion into new geographies and
provision for loss declining to a negligible amount.
gained market share in key product categories.
Investors shared in our success of 2012.
FIRST JOHN DEERE harvester
FIRST JOHN DEERE Riding mower
FIRST JOHN DEERE Snowmobile
FIRST JOHN DEERE PLOW
FIRST JOHN DEERE TRACTOR
Recently introduced equipment includes a line of innovative round balers, a fuller line of versatile utility tractors, and a family of premium midsize tractors. Also debuting were recreational-utility vehicles that can reach a top speed of more
I WILL NEVER PUT MY NAME ON A PRODUCT THAT DOES NOT HAVE THE BEST THAT IS IN ME. John Deere 1804-1886
than 50 miles an hour. New constructionequipment models were highlighted by the company’s largest-ever articulated dump truck, as well as backhoes, crawlers and excavators offering increased levels of performance. Many of our new products feature John Deere engine technology that reduces emissions while meeting customer requirements for power, reliability and efficiency. Deere’s extensive engine know-how, encompassing both design and production, provides customers with an integrated powertrain solution that optimizes the performance of our equipment. Long acclaimed for innovation, John Deere won futuristic honors for its advanced products and technology. Among them were three awards from a top farm magazine and for remote diagnostics software.
The biggest change that is expected to come out of agricultural equipment innovations is the technology that will help farmers improve overall efficiency and field productivity, Barry nelson, John Deere media relations
New diesel Technology
manager, said in a statement. Nelson recently made a statement in which he described his outlook for farm machinery improvements in 2013, and what could be next. There are three areas that every customer should ask their dealer about to make farm operations more efficient, Nelson said. These areas include machine optimization, which helps machines improve their capacity and productivity. “For example, GPS and AutoTrac assisted steering will reduce passes through the field, improve overall fuel economy, save horsepower, and increase overall comfort to the operator,� he said.
Improved logistics operations are also expected to play a major role in equipment development, with producers taking control of growing fleets of tractors and operation consolidation increasing the size of companies manifold. Third, Nelson said, is telematics, which includes John Deere’s JDLink technology. JDLink Machine Monitoring gives farmers remote access to their assets, ensuring machines run optimally and go in for routine maintenance. To underscore the importance of youth’s involvement in agriculture, 30 students were invited to attend the 2013 USDA Agriculture Outlook Forum, thanks to award-winning essays. According to a recent press release from the USDA, the event afforded students the opportunity to hear from leading government and industry voices about how they could impact the future of farming and agriculture.
walk behind mower
Our most exciting commercial walk-behind introduction to date: three different levels of walkbehinds. Hydrostatic models with twin loop controls.
utility Gator
With 62 hp of muscle, a top speed of 53 MPH and Fox 2.0 Performance Series Shocks to keep things smooth, the all-new, all powerful RSX850i is a whole new species of Gator.
round baler We took stronger parts, stronger conviction, and stronger customer focus to make our newest balers ‘stronger to the core.’
forage harvester New 7080 Series SPFH models feature a revolutionary new kernel processor that produces higher quality silage without slowing down your harvest, plus the smartest constituent measuring system in the industry.
5e series The new 5E Series Reimagined, redesigned, reborn... to work.
Assets
2013
2012
Cash and cash equivalents
$ 4,652.2
$ 3,647.2
Receivables from unconsolidated affiliates
1,470.4
787.3
Trade accounts and notes receivable - net
59.7
48.0
Financing receivables - net
3,799.1
3,294.5
Financing receivables securitized - net
22,159.1
19,923.5
Other receivables
3,617.6
2,905.0
Equipment on operating leases - net
1,790.9
1,330.6
Inventories
2,527.8
2,150.0
Property and equipment - net
5,170.0
4,370.6
Investments in unconsolidated affiliates
5,011.9
4,352.3
Goodwill
215.0
201.7
Other intangible assets - net
921.2
999.8
Retirement benefits
105.0
127.4
Deferred income taxes
3,280.4
30.4
Other assets
1,465.3
2,858.6 $
Total Assets
$ 56,265.8
$48,207.4
Cash From Operating Activites
2013
2012
Net income
$ 2,807.8
$ 1,874.3
Adjustments to reconcile net income to net cash
13.5
106.4
Provision for doubtful receivables
914.9
914.8
Provision for depreciation and amortization
69.0
27.2
Goodwill impairment charges
11.1
71.2
Share-based compensation expense
168.0
2.2
Undistributed earnings of unconsolidated affiliates
808.9
175.0
Provision (credit) for deferred income taxes
300.1
1,095.0
Changes in assets and liabilities
1,730.5
1,052.7
Trade, notes and financing receivables related to sales
1,287.0
1,057.7
Insurance receivables
1.2
22.1
Accounts payable and accrued expenses
495.3
154.1
Accrued income taxes payable/receivable
266.0
337.5
Net cash provided by operating activities
$2,326.3
$2,282.2
Liabilities
2013
2012
Short-term borrowings
$ 6,392.5
$ 6,852.3
Short-term securitization borrowings
3,574.8
2,777.4
Payables to unconsolidated affiliates
135.2
117.7
Accounts payable and accrued expenses
8,988.9
7,804.8
Deferred income taxes
164.4
168.3
Long-term borrowings
22,453.1
16,959.9
Retirement benefits and other liabilities
7,694.9
6,712.1
Total liabilities
$ 49,403.8
$ 41,392.5
Cash From Financing Activities
2013
2012
Increase (decrease) in total short-term borrowings
894.9
756.0
Proceeds from long-term borrowings
10,642.0
2,621.1
Payments of long-term borrowings
5,396.0
3,675.7
Proceeds from issuance of common stock
61.0
129.1
Repurchases of common stock
1,587.7
358.8
Dividends paid
697.9
483.5
Excess tax benefits from share-based compensation
30.1
43.5
Other
66.2
41.4
Net cash provided by (used for) financing activities
$ 3,880.2
$ 1,009.7
Cash From Financing Activities
2013
2012
Collections of receivables
13,064.9
12,151.4
Proceeds from maturities and sales of marketable securities
240.3
32.4
Proceeds from sales of equipment on operating leases
799.5
683.4
Government grants related to property and equipment
99.3
911.1
Proceeds from sales of businesses, net of cash sold
30.2
13,956.8
Cost of receivables acquired
15,139.0
586.9
Purchases of marketable securities
922.2
1,056.6
Purchases of property and equipment
1,319.2
624.2
Cost of equipment on operating leases acquired
801.8
60.8
Acquisitions of businesses, net of cash acquired
45.3
113.7
Other
43.2
40.4
Net cash used for investing activities
$ 4,004.1
$ 2,620.7