John Deere 2013 Annual Report Download - page 5

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5
Our recent success has allowed Deere to make global investments
at unprecedented rates while keeping its balance sheet strong.
At year-end, Deere carried some $5 billion of cash and securities,
with relatively low debt. Our nancial-services operation
remained conservatively capitalized as well.
A&T SETTING PACE
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 North and South America.
In other businesses, Construction & Forestry (C&F) remained
protable in spite of a slowdown in demand for construction
machinery. As it showed in 2013, the division has been adept at
managing costs and establishing a more exible cost structure.
This has allowed C&F to contribute to the company’s overall
results while expanding its product line and making investments
to serve a more global group of customers. Of signicance,
new factories were opened in China and Brazil, both markets
expected to play a central role in the division’s growth ambitions.
A 295-horsepower Final-Tier-4 engine powers the 8295R tractor,
one of nine 8R Series models introduced in 2013. Late in the year,
Deere announced that manufacturing capacity for the agship tractors
will be added in Brazil, addressing the needs of customers there.
Deere’s nancial-services organization delivered record income
while providing convenient and competitive nancing to our
equipment customers. Income climbed to $565 million as the
loan and lease portfolio grew by almost $5 billion. Credit quality –
a hallmark of our nancial-services operation – remained
exceptionally strong. The provision for loss equaled just over
a dollar for each $3,300 of portfolio value.
POWERFUL TRENDS DRIVING PLANS
Providing strong support to Deere’s growth plans are the
powerful tailwinds of a growing, increasingly urban population
and rising living standards. As a result of these trends, which are
most pronounced in developing parts of the world, agricultural
output will need to double by mid-century. At the same time,
massive urbanization will trigger an urgent need for more roads,
bridges and buildings.