Good morning. I'm John May, Chairman and CEO of Deere & Company. It's my privilege to welcome you to the 2024 Annual Meeting of Shareholders. The agenda on the screen shows the order we'll follow today. Our meeting concludes with a general discussion, during which we'll welcome your comments. We'll do our best to answer as many questions as possible in the time allowed. The rules of conduct are available on the meeting website, as are the proxy statement and annual report. We'll start off today with a look back at John Deere's performance in 2023, review our outlook for the year ahead, and then proceed with the business portion of the meeting. John Deere had an outstanding year, delivering strong performance and making a significant positive impact on those we serve. We saw robust demand and achieved outstanding financial results.
We brought to market important new products and made strategic investments that advanced our Smart Industrial strategy. We also took steps to make Deere a better place to work and build a career, and invested in our home communities and farmers around the world, making a difference where it matters most. Overall, 2023 was a remarkable year for us. Our net sales and revenues experienced a 16% increase, totaling $61.3 billion. Our net income reached $10.2 billion, surpassing last year's $7.1 billion. Our profitability reached impressive levels as well, with our equipment operations delivering a robust 21.9% operating margin. This is significant for two reasons. First, this success was achieved despite ongoing inflation pressures and market fluctuations. Second, it is crucial in allowing us to continue investing in the next generation of solutions for our customers.
These results were delivered through strong execution across our business. In fact, all of our equipment operating segments set new highs this year in both sales and profits. Leading the way was our Production and Precision Ag business, with net revenue of $26.8 billion. It also delivered exceptional operating margin performance, reaching over 26% for the year. Our Small Ag and Turf business saw revenues grow to $14 billion, with operating profit exceeding $2.4 billion. Construction and Forestry revenues were $14.8 billion, with operating profit of $2.7 billion, driven by strong performance from both earthmoving and road-building businesses. Deere's financial services unit contributed $619 million in net income as the average portfolio balance grew in line with the equipment operations.
We also generated significant cash flow this year, which allowed us to invest at record levels in our business and tech stack. In addition, we returned value to shareholders through share repurchases of over $7 billion, while simultaneously increasing the quarterly dividend by nearly 20%. Deere's performance this year provides further evidence that our Smart Industrial strategy and operating model are delivering significant outcomes. Through this strategy, we are dedicated to empowering our customers to enhance their productivity, profitability, and sustainability. In addition, we continued to see improvements in the supply chain, contributing to lower material and logistics costs compared to 2022. These results were also achieved thanks to the commitment and perseverance of our global workforce.
This is particularly evident in our factories, where exceptional execution has driven increased production levels, allowing us to deliver machines on time and in advance of our customers' seasonal usage demands. Another group that deserves recognition and special thanks is our dealers.... As has been true for generations, they worked hard to serve customers and support their needs. This includes managing inventories and machine uptime, ensuring the timely execution of critical jobs on farms and job sites. Our dealers also made further progress, strengthening their technical capabilities and making use of digital tools, both of which are key to enabling the widespread adoption of precision technologies and unlocking more value for our customers. But our impact extended far beyond financial success. In 2023, we made strategic investments that advanced our Smart Industrial strategy and reinforced the achievement of our Leap Ambitions.
These extensive goals focus on delivering exceptional financial and sustainable outcomes for our customers and other stakeholders, creating lasting value while also making a meaningful difference throughout the world. For instance, in our Ag and Turf division, we launched a groundbreaking planning technology called ExactShot, that reduces the amount of starter fertilizer applied to the seed during planting by more than 60%. We also made our advanced camera detection and artificial intelligence technology from our revolutionary See & Spray system, which will begin commercialized sales in 2024, available as a precision upgrade. This retrofit solution makes it possible to apply the latest technology to previous generation sprayers, allowing even more customers to reduce their herbicide use, lower their costs, and minimize impact on their crops and land.
We further extended our smart spraying capabilities by acquiring Smart Apply, an intelligent spray control system that enhances the precision and performance of airblast sprayers used in orchards, vineyards, and tree nurseries. Additionally, we introduced several new products and upgrades this year that support our construction and forestry customers in working smarter, safer, and more sustainably. For example, our P-Tier line of excavators, optimized for increased productivity, efficiency, and reduced CO₂ emissions, has been well-received in the market. We also expanded our Operations Center to include road-building equipment, unlocking enhanced operational analysis, monitoring, and project planning opportunities for our construction customers. This is a key step in the journey to digitizing job sites, as we have already done for our customers' farms.
Looking ahead, we're excited about our hybrid E-Drive X-Tier loaders, which we believe will deliver fuel savings, emission reductions, and productivity gains for our aggregate business customers beginning in 2024. To reduce variability in our performance and support our Leap Ambitions, we also began implementing a solutions-as-a-service business model. We believe this will accelerate adoption and use of technology to drive better outcomes for our customers. This change involves transitioning certain solutions from a traditional upfront, one-time purchase model to a use-based structure. By shifting costs from the initial sale to technology use, our customers pay based on their specific operational needs.
These products and investments are all examples of how we're helping customers do more with less, and they are just a few of the many that are transforming our industries by bringing advanced capabilities to our customers that would have been considered all but unimaginable not that long ago. It goes without saying that none of this would be possible without the dedication and passion of our employees. They are the driving force behind our success, and we are grateful for their continued commitment. To ensure we continue to attract, retain, and develop talent with the skills to solve our customers' biggest challenges, this year, we introduced a comprehensive people strategy aimed at delivering an unmatched employee experience.
This multi-year strategy is focused on inspiring and engaging our employees, building our global talent pipeline, refreshing our culture, and ensuring we have the data, technology, and insights to effectively manage and develop our global workforce. In addition, we remain fully committed to fostering an inclusive workplace where everyone feels welcome and valued, and creating an environment where every individual can thrive and contribute their unique perspectives and talents. We were also incredibly proud last year to celebrate the 75th anniversary of the John Deere Foundation and reflect on its impactful contributions. Since 1948, the foundation has invested more than $400 million in not-for-profit organizations, with a remarkable $100 million given in just the last five years.
In 2023, the foundation made the largest grants in its 75-year history, directing $19 million toward initiatives focused on eliminating hunger by increasing food access, uplifting resource-constrained farmers, and strengthening global food systems. These efforts are aimed at creating sustainable solutions and making a positive impact on food security worldwide. As I reflect on our achievements in 2023, I'm proud of the outcomes we accomplished together. Through continued strong execution, we successfully delivered on our customer commitments and demonstrated exceptional financial performance. Looking ahead, we expect more variability across our business in 2024. But while markets may fluctuate due to global economic uncertainties, geopolitical instability, and even the weather, rest assured we remain laser-focused on managing through the challenges and executing on the things we can control.
Market dynamics aside, we are structurally a better business today than we were just a few years ago, as evidenced by our operating margin improvement. One thing that never varies is our commitment to creating lasting value for all of our stakeholders, which begins with delivering exceptional customer outcomes. I firmly believe John Deere's best days lie ahead. We're part of a great company that does great things. I am proud of our 83,000 dedicated employees, as well as our many dealers and suppliers. Their collective efforts were essential to making 2023 such a memorable year. Finally, thank you for your continued support and belief in our company. As we move ahead, we will continue to push boundaries, innovate on behalf of our customers, and strive to achieve our higher purpose: We run so life can leap forward.
Let's move now to the business portion of our agenda. I have an affidavit of the corporate secretary stating that the notice of this meeting and the proxy statement were mailed to all who were shareholders on the record date for this meeting. The Inspectors of Election for the meeting are Robert Strode and Joshua Rohleder, Deere & Company Investor Relations, and Greg Malatia, representing Broadridge Financial Solutions Inc., independent Inspector of Election. They have advised me that based on the proxies received up to 5:00 P.M. yesterday afternoon, a majority of the shares entitled to vote are represented at this meeting in person or by proxy. Therefore, a quorum is present, and it is my pleasure to hereby officially call the meeting to order. I would like to thank the shareholders for their outstanding response to our request for proxies.
A list of the shareholders has been available for inspection by any shareholder for 10 days and will remain available until the close of the meeting. Our first item of official business this morning is the election of directors. The persons recommended by the board's Corporate Governance Committee and nominated by the board of directors were listed in the Proxy Statement and are as follows in alphabetical order: Leanne G. Caret, Tami A. Erwin, Alan C. Heuberger, L. Neil Hunn, Michael O. Johanns, Clayton M. Jones, John C. May, Gregory R. Page, Sherry M. Smith, Dmitri L. Stockton, Sheila G. Talton. You may have noticed a name missing from the list. Our presiding director, Charles O. Holliday, will not be standing for re-election.
I would like to personally express my gratitude to Charles for his many contributions during his more than 15 years of dedicated service as a director and as Presiding Director of Deere & Company. The polls have been open for voting on these nominees since January 10th, 2024, when the mailing of the proxy statements began. As indicated in the proxy statement, under the company's bylaws, notice of intent to nominate additional persons for election to the board of directors must be provided in advance of this meeting, in accordance with the procedures set forth in the bylaws. We have not received notice of any additional nominees. Next, as indicated in Item two in the proxy statement, a non-binding advisory vote on executive compensation is submitted for shareholder vote. The board recommends a vote to approve the non-binding advisory resolution on executive compensation.
Next, as indicated in item three, the Audit Review Committee of the board has approved the selection of Deloitte & Touche LLP to serve as the company's independent registered public accounting firm to audit Deere's financial statements and internal controls over financial reporting for the 2024 fiscal year. The Audit Review Committee and the board are requesting that shareholders ratify this appointment. Shareholder approval to ratify the appointment requires the affirmative vote of a majority of the shares present or represented and entitled to vote at the meeting. The board recommends a vote to ratify the appointment of the independent registered public accounting firm. Next, items four, five, and six are shareholder proposals. I invite the shareholder who has submitted proposal four, regarding a customer and company sustainability congruency report, to submit the proposal.
I'm Paul, I'm Paul Chesser with National Legal and Policy Center. More carbon dioxide in the atmosphere grows bigger and healthier crops faster. More carbon dioxide in the atmosphere makes trees grow faster. Healthier forests store more carbon dioxide than they release. So what does Deere & Company have against carbon dioxide? Why does the company wage war against the vast majority of the agriculture, forestry, and construction industries that buy its hydrocarbon-fueled equipment? I was disappointed to see the board of directors lie to shareholders in the proxy statement when they said that Deere's sustainability reports already contain the information requested by the proposal.
That's a lie, because when Deere's top lawyer told the Securities and Exchange Commission the exact same thing, the SEC said, "Oh, no, you didn't already include the information in your reports." As a result, the SEC made the company keep our proposal in today's meeting. Unfortunately, the shareholders who are only now learning that they were lied to by the company will have almost no time to change their votes if they so desire. That's not the only thing the company has misled shareholders about. As part of Deere's LEAP Ambitions marketing scheme, the company intends to deliver more than 20 electric, electric and hybrid equipment models by 2026. That's right, in only two years from now. Deere also plans an electric option in each turf and compact utility tractor product family. And finally, Deere plans a fully autonomous, battery-powered electric ag tractor by 2026. Mr.
May, are you paying attention to the disaster going on with electric vehicles in the United States? They're piling up on dealer lots because nobody wants them, even with massive tax breaks and financial incentives to buy them. Mercedes-Benz just scrapped their plans to make electric-only vehicles, and after spending billions of dollars to develop its own EV, Apple, the first or second largest company in the world, has thrown in the towel on EVs. Ford and GM are also scaling back their EV plans big time, even with all that money sitting out there from the ridiculously named Inflation Reduction Act. Is Deere in this subsidy-chasing game, too? Is that what LEAP Ambitions are really all about? Ford, which lost about $65,000 on each EV it sold last year, just halted shipments of the heavy-duty F-150 Lightning.
Heavy vehicles built to carry and tow heavy loads require extremely heavy batteries to have any worthwhile power and range at all. Do you think extremely heavy, low-range electric tractors will be any different? I'd say good luck with that, but I don't think even-
Thank you. Thank you, your time has elapsed. As noted within the rules of conduct for this meeting, each shareholder has three minutes of time to present their proposal. We must move on. Your proposal has been submitted. The board recommends a vote against the shareholder proposal regarding a customer and company sustainability and congruency report. I now invite the shareholder who has submitted proposal five, regarding a civil rights, non-discrimination, and return to merit audit, to submit the proposal.
This proposal requests an audit of the company's DEI policies because DEI is immoral, illegal, and detrimental to shareholder value. DEI may sound benign to naive ears. After all, why would anyone oppose such things as diversity or inclusion? But like with everything woke, it doesn't rely on the normal meaning of those words. Rather, it has an esoteric definition that harbors a radical political agenda. Take the word diverse, for example, which up until last week was used in this context to describe how heterogeneous a group of people is. Now, it just means someone who's not a straight white male. So according to the twisted logic of DEI, a group of 10 women is more diverse than a group of five men and five women.... or take equity, for example.
It very strategically sounds like equality, but it really means the opposite, because in order to have equitable outcomes, you have to forcibly redistribute outcomes by race, sex, and orientation, and therefore, can't have equal opportunity. Hiring or promoting someone because they're a woman, or because they're Black, or because they're gay, is wrong. First of all, because it automatically attributes to members of those groups a victimhood identity and wrongly assumes that they can't succeed by their own merits. So it doesn't actually help the people it purports to help. But secondly, if you're hiring someone because they're Black, then you're not hiring someone else because they're white. And discriminating against someone because they're white or because they're a man is equally as abhorrent and equally as illegal as discriminating against somebody because they're an ethnic minority or a woman.
It has always been the case that this is illegal, and that it violates the Constitution and the Civil Rights Act. But in light of the recent Supreme Court decision on affirmative action, it's now clear beyond a doubt that DEI is illegal. What this means is that it's only a matter of time before employees sue companies and win for not being hired or promoted because they happen to be white, straight, or male. DEI also harms the company because it comes at the expense of merit, and therefore excellence and productivity and innovation. By not hiring and promoting completely irrespective of race, sex, and orientation, in other words, not by merit alone, the company is by definition, not always hiring the best person for the job, and anything less than always hiring the best person, no matter who they are, is selling the future of this company short.
In doing so, the company is also not abiding by its legal duty to do what's in the best interest of shareholders. This proposal provides the company with an off-ramp away from this immoral, illegal, and financially detrimental practice. It gives the company the opportunity to get out of the DEI business before it does more significant damage to the company, and therefore, to us as shareholders.
Thank you. The Board recommends a vote against the shareholder proposal regarding a civil rights, non-discrimination, and return to merit audit. I now invite the shareholder who has submitted Proposal Six, regarding shareholder ratification of golden parachutes, to submit the proposal.
Hello, this is John Chevedden. Hello, this is John Chevedden. Can you hear me okay? Proposal Six: Shareholder Ratification of Golden Parachutes. Shareholders request that the board seeks shareholder approval of any senior manager's new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive's base salary plus target short-term bonus. This proposal only applies to named executive officers. The board shall retain the option to seek shareholder approval after material terms are agreed upon. Apparently, the 41% support for this proposal topic in 2023 provided an incentive for the board to adopt at least minimal restrictions to executive golden parachutes. A vote for this proposal is a step for more comprehensive restrictions on executive golden parachutes.
This proposal places no limits on long-term equity pay or any other type pay. This proposal, thus, has no impact on the ability to attract executive talent and does not discourage the use of long-term equity pay because it places no limit on golden parachutes. It simply requires that overly rich golden parachutes be subject to a non-binding shareholder vote at a shareholder meeting already scheduled for other matters. This proposal is relevant because the annual say on executive pay does not have a separate section for approving or rejecting golden parachutes. Please vote yes. Proposal Six, shareholder ratification of golden parachutes.
Thank you. The board recommends a vote against the shareholder proposal regarding shareholder ratification of golden parachute. No further items have been submitted pursuant to the company's bylaws. Therefore, I declare the nominations and proposals to be voted on closed, and we will now proceed with voting. As the proxy committee, Edward Berk, the company's corporate secretary, and I have conferred and intend to vote for the 11 director nominees listed in the proxy statement, for the non-binding advisory vote on executive compensation, for the ratification of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal 2024, against the shareholder proposal with respect to a customer and company sustainability congruency report, against the shareholder proposal with respect to a civil rights, non-discrimination, and return to merit audit, and against the shareholder proposal with respect to shareholder ratification of golden parachutes.
If you have sent in a proxy card and wish your shares to be voted as indicated, it will not be necessary to cast a ballot this morning. However, if you have not voted or if you wish to change your vote, please follow the voting instructions on your screen. Again, the ballot is for voting or changing your vote regarding Directors Caret, Erwin, Heuberger, Hunn, Johanns, Jones, May, Page, Smith, Stockton, and Talton. It is for voting or changing your vote regarding the non-binding advisory vote on executive compensation. It is for voting or changing your vote regarding the ratification of Deloitte & Touche as the company's independent registered public accounting firm, and it is for voting or changing your vote on the shareholder proposals. Preliminary results of the voting will be announced before the end of this meeting.
The next order of business will be comments from the independent registered public accounting firm. Deloitte & Touche is engaged by the Audit Review Committee of the board to conduct the annual audit of our financial statements and our effectiveness of internal control over financial reporting, and their representative with us today is Ms. Claudine Hollack, Deloitte Lead Client Service Partner for the Deere & Company audit. Ms. Hollack will now make her statement.
We have conducted our audit of the financial statements of Deere & Company and subsidiaries and the effectiveness of the company's internal control over financial reporting. Our opinion, dated December 15th, 2023, is included in the company's 2023 annual report, which was made available to the shareholders in advance of this meeting. Our opinion contains no exceptions or qualifications. The scope of our audit was designed by us to meet the requirements of the standards of the Public Company Accounting Oversight Board. It was reviewed in advance with the Audit Review Committee of the Board of Directors, and it included tests of the accounting records at significant company locations. No restrictions were placed on the scope of our audit, and we had full access to and the cooperation of the board of directors, management, and the financial staff.
Before we have the discussion period, we will hear the preliminary report of the inspectors of an election. The preliminary report is based on all proxies returned as of 5:00 P.M. yesterday. After the meeting, the inspectors will count any additional proxies we receive up to the time the polls close. The polls will close upon adjournment of this meeting or at 11:00 A.M. today, whichever is later. The final report of the inspectors will be included in the records of the meeting and will appear in a Form 8-K within 4 days of votes being finalized. Mr. Greg Malatia, Account Executive, representing Broadridge Financial Solutions, Inc., independent inspector of election, will now give the preliminary report.
Mr. Chairman, we report that subject to final validation, 236,360,974 shares, or not less than 84.4% of the shares entitled to vote, are represented at this meeting in person or by proxy. The nominees for director included in the proxy statement received not less than 186,201,510 votes, representing 92.7% of the votes cast. There were 185,484,478 votes cast in favor of the non-binding vote on executive compensation, representing 92.3% of the votes cast.
There were 222,463,369 votes cast in favor of the ratification of the appointment of Deloitte & Touche LLP as Deere's independent registered public accounting firm for fiscal 2024, representing 94.1% of the votes cast. There were 2,955,380 votes cast in favor of the shareholder proposal with respect to a customer and company sustainability congruence report, representing 1.5% of the votes cast. There were 2,018,717 votes cast in favor of the shareholder proposal with respect to a civil rights, non-discrimination, and return to merit audit, representing 1% of the votes cast.
There were 76,223,385 votes cast in favor of the shareholder proposal with respect to shareholder ratification of golden parachutes, representing 37.9% of the votes cast.
Thank you, Mr. Malatia. Based on your report, I declare the nominees of the board named in the proxy statement to be elected as directors. The non-binding advisory vote to approve executive compensation has passed. The ratification of the appointment of Deloitte & Touche as the company's independent registered public accounting firm has passed. The shareholder proposal on customer and company sustainability congruency report has failed. The shareholder proposal on a civil rights, non-discrimination, and return to merit audit has failed. The shareholder proposal on shareholder ratification of golden parachutes has failed. Now, I would be pleased to answer questions from any shareholder related to the business of the company or the interest of other shareholders. I can fully discuss issues pertaining to our business and welcome your questions. If you wish to present a question or comment, please follow the question instructions on your screen.
In your electronic transmission, please include your name and place of residence, and confirm you are a shareholder. I now open the floor for questions.
First, thank you for your questions, and I really appreciate your participation. Our first question today is if we see Deere as a manufacturer that provides tech solutions to its customers or a software company that provides manufacturing products? You know, our storied history is built on manufacturing hard iron, and this will remain core to our business going forward, and I would argue it's one of the competitive advantages that we have at Deere. That is, we're able to increasingly add tech onto that hard iron, tech solutions, that make the products better for our customers. It helps them do the jobs they do better, helps them be more profitable, more productive, and more sustainable.
With our Smart Industrial strategy, one of our pillars is our tech stack, which we're deploying to drive customers value. We're committed to investment in that tech stack and deploying solutions across our entire portfolio. At the same time, we're committed to continued investment in innovation. You know, a perfect example of that is the recent announcements that we made today at the Commodity Classic, which demonstrates the value of integration between our hard iron and our technology. Thank you for the question.
Our next question is if consideration will be given to reopen the World Headquarters display floor here in Moline, for visitors to appreciate the company history and equipment on display. Again, thank you for your question. We love the opportunity to share both our rich heritage and exciting future through experiences at our John Deere properties.
You know, today, the John Deere Pavilion in Moline, Illinois, and the John Deere Historic Site in Grand Detour, Illinois, and the John Deere Tractor and Engine Museum in Waterloo, Iowa, are all open to the public, and they're focused on serving the public. At this time, we don't have plans to open the World Headquarters display floor to the public, but encourage visitors to attend these other sites. The main reason for that is, when we change some of our facilities around, our employees are actively utilizing that display floor for meetings and events that are related to their businesses and their responsibilities. Again, thank you for your question. The next question that I received is: Why not split Deere stock 3-to-1?
You know, we continue to be focused on creating for our shareholders. We want to create value, and at this point, we're not considering a stock split, but we'll continue to monitor this topic in the future if we believe there is shareholder value in that sort of stock split. Thank you for your question. Next question I received is—relates to whether the Infrastructure Investment and Jobs Act in 2021 is impacting Deere. Thank you for your question. You know, our construction and forestry segment is impacted by a number of demand drivers, including investments in infrastructure. We believe that funds appropriated under the IIJA are and will continue to support demand for our earthmoving and road-building products, both in 2024 and also in the coming years.
Estimates are that approximately 40% of the IIJA funds have been awarded to date, with significantly few dollars actually being spent, so that we seem to see more demand going in the future. We expect IIJA investments to be a tailwind in 2024 and in the next few years as well. Our next question is whether Deere has an affiliate in China. Deere has operations in over 100 countries around the world, including China, so we do have operations in China. Our last question that we received today is: What do you expect the impact of higher interest rates to be on sales? Well, there are many factors that drive demand for our products and solutions. Our different segments have varied levels of exposure to interest rates. In large ag, interest expense represents a relatively small portion of a customer's income statement.
Crop receipts and input costs continue to be the largest driver of farmer profitability, and we believe our precision solutions are key to helping our customers bring down costs and sustain profitability. Our small ag and turf division has the most exposure to interest rates, with many consumer-oriented product purchases, where the cost of financing can more heavily influence purchase price decisions. Finally, within our construction and forestry business, interest rates have most strongly impacted the housing market, which is closely linked to compact construction equipment demand. All in all, interest rates do have an impact on our customers, but we have seen resiliency across our products due to the valuable solutions they provide. Thank you all for your questions. That concludes the business of the meeting.
I'd like to express my sincere thanks to all our shareholders, including our many dedicated employees and retirees, for their ongoing support and their attendance today. I now declare the 2024 Annual Meeting of Shareholders adjourned. Thank you all for joining us.