•          Income reaches record for quarter on 35% gain in net sales and revenues.
•          Improvement broad-based with all divisions reporting significantly higher results.
•          Performance reflects disciplined execution and sharpened strategic focus.
•          Earnings of approximately $2.1 billion forecast for 2011.

 Net income attributable to Deere & Company was $457.2 million, or $1.07 per share, for the fourth quarter ended October 31, compared with a net loss of $222.8 million, or $0.53 per share, for the same period last year.

Fourth-quarter 2009 earnings were $99.0 million, or $0.23 per share, excluding the impairment of goodwill related to the John Deere Landscapes reporting unit and voluntary employee-separation expenses associated with the formation of the agriculture and turf division. These charges totaled $364.8 million pretax and $321.8 million after-tax, or $0.76 per share, and are included in results of the agriculture and turf operating segment. (Information on non-GAAP financial measures is included in the appendix.)

For fiscal 2010, net income attributable to Deere & Company was $1.865 billion, or $4.35 per share, compared with $873.5 million, or $2.06 per share, last year. Included in the 2009 results were the items cited above, which totaled $380.6 million pretax and $331.8 million after-tax, or $0.78 per share.

Worldwide net sales and revenues for the fourth quarter increased 35%, to $7.202 billion, and were up 13%, to $26.005 billion, for the full year. Net sales of the equipment operations were $6.564 billion for the quarter and $23.573 billion for full-year 2010, compared with $4.726 billion and $20.756 billion in the prior year.

"John Deere's strong performance for the quarter and full year reflects a disciplined approach to executing our business plans and was achieved despite continuing weakness in certain regions and business sectors," said Samuel R. Allen, chairman and chief executive officer. "Although conditions continued to be positive in the U.S. farm sector, and included a highly favorable sales mix of larger equipment, European agricultural markets remained soft. Deere's construction equipment sales benefited from somewhat-stronger overall demand but remained far below normal levels."

Nevertheless, Allen pointed out, the company extended its competitive position by successfully launching advanced new products and expanding its market presence, especially in developing parts of the world. During the quarter, Deere announced a new combine-harvester factory and opened a joint-venture production facility for construction equipment, both in India. Also during the quarter, a definitive agreement was reached to sell Deere's wind energy business, representing a decision to place more emphasis on core growth opportunities. "We are sharpening our strategic focus by targeting resources on the increasing need for agricultural and construction machinery around the world," said Allen.

Summary of Operations

Net sales of the worldwide equipment operations increased 39% for the quarter and 14% for the year. Sales included a favorable currency-translation effect of 1% for the quarter and 3% for the year and price increases of 3% for the quarter and 2% for the year. Equipment net sales in the United States and Canada increased 41% for the quarter and 14% for the year. Outside the U.S. and Canada, net sales were up 36% for the quarter and 14% for the year, with a favorable currency-translation effect of 5% for the year.

Deere's equipment operations reported operating profit of $716 million for the quarter and $2.909 billion for the year, compared with an operating loss of $22 million and operating profit of $1.365 billion for the periods last year. Benefiting the quarter were higher shipment and production volumes and improved price realization, partially offset by higher incentive-compensation expenses and an increase in raw material costs. Full-year results reflected higher shipment and production volumes, improved price realization, the favorable effects of foreign exchange and lower raw-material costs. These factors were partially offset by increased postretirement-benefit and incentive-compensation expenses. As noted, last year's results included a goodwill-impairment charge and voluntary employee-separation expenses.

Net income of the company's equipment operations, including noncontrolling interests, was $357 million for the quarter and $1.492 billion for the year, compared with a net loss of $201 million and net income of $677 million for the respective periods last year. In addition to the operating factors noted above, unfavorable tax effects were included in last year's fourth-quarter results.

Financial services reported net income attributable to Deere & Company of $98.4 million for the quarter and $372.5 million for the full year compared with a net loss of $15.3 million and net income of $202.5 million for the comparable periods last year. Results increased for the quarter primarily due to last year's reversal and deferral of wind energy tax credits eligible for cash grants, a lower provision for credit losses, improved financing spreads and growth in the portfolio. Partially offsetting these items was a write-down of wind energy assets held for sale to fair value. Full-year results were higher mainly due to improved financing spreads and a lower provision for credit losses.