Deere & Company and Related Entities: Rating Report

DBRS Limited (DBRS) confirmed the Issuer Rating of Deere & Company (Deere or the Company) at “A,” the Senior Unsecured Debt rating of Deere and its subsidiaries at “A” and the Commercial Paper rating of the same entities at R-1 (low). The trends remain Stable. DBRS confirmed the ratings on December 5, 2017, subsequent to Deere completing the acquisition of the Wirtgen Group (Wirtgen) (see DBRS press release dated December 5, 2017). In confirming the ratings, DBRS anticipated continued improvement in operating results as well as a gradual recovery of the key credit metrics, which were weakened by the debt incurred to fund the Wirtgen acquisition, to the “A” rating range. The Company announced much stronger than expected operating results for the first quarter of F2018 (year-end October 28). In addition, Deere has raised its forecast for revenue and net income (adjusted for tax reform-related charges) for F2018, replacing the previous forecast made just a few months ago in November 2017 and driven by stronger demand for equipment due to better than expected market conditions. The improved outlook and stronger operating results will speed the recovery of Deere’s financial profile.