SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 6, 1994
(Date of earliest event reported)
D E E R E & C O M P A N Y
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-4121
(Commission File Number)
36-2382580
(IRS Employer Identification No.)
John Deere Road
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309)765-8000
(Registrant`s telephone number, including area code)
_______________________________________
(Former name or former address, if changed since last
report.)
Page 1 of 14 pages.
The Exhibit Index appears at Page 3 <PAGE>
Item 7. Financial Statements,
Pro Forma Financial Information and
Exhibits.
(c) Exhibits
(99) Press release and additional information.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned hereto duly
authorized.
DEERE & COMPANY
By /s/ Frank S. Cottrell
Frank S. Cottrell, Secretary
Dated: December 6, 1994
<PAGE>
EXHIBIT INDEX
Sequential Page
Number and Description of Exhibit Number
(99) Press release and additional information Page 4
information
<PAGE>
Exhibit 99
FOR IMMEDIATE RELEASE (6 December 1994)
MOLINE, ILLINOIS -- Deere & Company today reported record
1994 worldwide net income for both the fourth quarter and the
fiscal year. Net income for the fourth quarter of 1994 was
$169.6 million or $1.97 per share compared with income before
special items of $93.1 million or $1.20 per share last year.
This was the fifth consecutive quarter in which the company has
reported record earnings for that quarter. The fourth quarter of
Deere & Company's fiscal year ended October 31.
Worldwide net income for the fiscal year totaled $603.6
million or $7.01 per share in 1994 compared with income before
special items of $248.0 million or $3.21 per share last year.*
Deere & Company Chairman and Chief Executive Officer Hans W.
Becherer said, "The company's strongly improved results for both
the quarter and the year reflect substantially higher North
American production and sales volumes as well as improved
operating efficiencies and significantly better overseas results.
Additionally, the company's exports from the United States set a
new record, totaling $1.1 billion. Company results also
continued to benefit from the strong performance of our
financial services subsidiaries during both the quarter and the
fiscal year."
Worldwide net sales and revenues increased 16 percent to
$2.516 billion in the fourth quarter of 1994, up from $2.175
billion in last year's final quarter. Worldwide production
tonnage for the fourth quarter was up 17 percent compared with
1993.
Net sales to dealers of agricultural, industrial and lawn
and grounds care equipment were $2.149 billion in the quarter, an
increase of 16 percent over fourth quarter 1993 sales of $1.849
billion. Net revenues of the company's credit, insurance and
health care operations increased 13 percent to $340 million in
the fourth quarter compared with $302 million in the same quarter
last year.
Worldwide net sales and revenues were $9.030 billion for
fiscal year 1994, a 16 percent increase over 1993 net sales and
revenues of $7.754 billion. Net sales of equipment increased 18
percent in 1994 to $7.663 billion from $6.479 billion in fiscal
year 1993. Worldwide production tonnage was about 18 percent
higher this year. Additionally, the company's financial services
revenues increased eight percent to $1.271 billion in 1994
compared with $1.175 billion for all of 1993.
*The net loss in 1993 after special items was $920.9 million
or $11.91 per share, including a $1.105 billion charge for
the cumulative effect of accounting changes, $80.0 million
of overseas restructuring charges, and $16.4 million of
favorable income tax rate benefits.
Although certain vehicle tires remained in tight supply
during the quarter due to a work stoppage at one of our key
suppliers, the availability of our products was not significantly
affected. However, future product availability could be
adversely affected by a prolonged continuation of this work
stoppage.
On September 30, 1994, the company's collective bargaining
agreement with the United Auto Workers (UAW), the union
representing most of the company's production employees in the
United States, expired. Through the date of this release, the
company and the UAW have been unable to reach an agreement as to
the terms of a new contract. Employees are continuing to work
under the terms in existence at the expiration of the former
contract, and factory operations remain normal.
"North American retail sales of John Deere agricultural,
industrial, and lawn and grounds care equipment increased
significantly during both the fourth quarter and full year
compared with 1993," Becherer said. "Overseas retail sales
were also higher for both the quarter and the full year compared
with a year ago."
The company's worldwide equipment operations, which exclude
the financial services subsidiaries, had income of $123.6 million
in the fourth quarter of 1994 compared with income before special
items of $48.5 million in the last quarter of 1993, and income of
$433.0 million for the year compared with income before special
items of $76.8 million last year.
All of the company's North American equipment businesses
generated larger operating profits for both the fourth quarter
and the 1994 fiscal year compared to the same 1993 periods. The
improved results were due to higher production and sales volumes,
and continued improvements in operating efficiency. The overseas
operations had an operating profit in both the fourth quarter and
the 1994 fiscal year compared with operating losses in the
comparable 1993 periods. This improvement was primarily due to
lower operating costs generated by the on-going restructuring of
the company's European operations, coupled with higher sales and
production volumes. Operating profit is defined as income before
interest expense, income taxes and certain other expenses.
Net income of the financial services subsidiaries in 1994
was $41.1 million for the fourth quarter and $160.6 million for
the year compared with income of $42.3 million and $164.3
million, respectively, for the same periods last year, excluding
the cumulative effect of 1993 accounting changes.
Net income of the credit operations was $31.6 million in the
fourth quarter of 1994 compared with $30.9 million in the same
period last year. Net income for the fourth quarter of 1994 was
favorably affected by a larger average portfolio financed and a
larger gain from the sale of retail notes. These effects were
partially offset by a higher provision for credit losses, due to
the growth in the portfolio financed.
Net income of the credit operations for fiscal 1994 was
$113.7 million compared with income before the cumulative effect
of accounting changes of $122.2 million in 1993. The decrease
reflected the impact of higher dividend payouts during the year,
lower gains from the sale of retail notes and higher operating
expenses, partially offset by higher securitization and servicing
fee income from notes previously sold but still administered.
Net income of the insurance and health care operations was
$9.5 million for the fourth quarter of 1994 compared with $11.4
million during the same period last year, primarily due to lower
underwriting income from an increase in property and casualty
claims. However, net income of these operations for the year
increased to $46.9 million compared with 1993 income before
accounting changes of $42.1 million, reflecting the continued
long-term profitable growth of these businesses.
"North American agricultural economic conditions improved in
1994 compared with 1993," Becherer said. "We believe that the
resulting improvement in farmers' confidence was a primary
contributor to higher agricultural equipment demand in nearly all
market areas in North America during 1994. Although direct
government payments to farmers declined in 1994, net farm cash
income is forecasted to be near record levels. Additionally,
farm real estate values increased by nearly four percent during
the year, further improving overall farm balance sheets.
"Overseas industry retail sales also showed improvement
during 1994," Becherer said. "Although European industry retail
sales of agricultural equipment are expected to continue their
long-term downward trend, reduced uncertainty over the General
Agreement on Tariffs and Trade (GATT) and a better understanding
of these new regulations have increased European farmers'
confidence. Consequently, many farmers who had delayed making
purchases are now buying new equipment. Therefore, European
industry retail sales for fiscal 1994 appear to be higher than
1993 levels.
"The North American general economy has continued to improve
during 1994," Becherer said. "Strong employment growth, coupled
with related gains in income, stimulated consumer spending on
durable goods in 1994. Housing starts and real nonresidential
construction in the United States also increased by 11 percent
and three percent, respectively, compared with a year ago. These
improvements provided a solid base for increases in both the
company's industrial and lawn and grounds care equipment sales
during 1994.
"Near record United States net farm cash income in 1994
should provide a solid base for 1995 farm expenditures," Becherer
said. "Higher exports of farm commodities should continue to
result from implementation of the North American Free Trade
Agreement (NAFTA), which further expands tariff-free quotas into
Mexico during 1995. Higher incomes in developing countries such
as China and India also should promote better export markets for
United States grains and oil seeds. Ratification of the GATT
treaty should further aid United States exports by lowering
European Union export subsidies.
"In 1995, a new United States farm bill should be enacted,
which may create some uncertainty in the farm economy," Becherer
said. "However, farmers have maintained tight control of farm
expenses in recent years, resulting in significant improvements
in their balance sheets, which should enable them to support more
timely modernization of their equipment. The company's recently
introduced innovative models of medium and large row-crop
tractors have been well received by customers throughout the
world. We believe that, on balance, these factors should support
farmers' confidence, and as a result worldwide demand for
agricultural equipment should remain at current levels.
"The North American general economy is widely expected to
show moderate growth in 1995," Becherer said. "Recent
inflationary concerns coupled with increases in interest rates
could adversely affect housing starts as well as general consumer
confidence. However, current consumer spending and housing
construction continue to remain strong. Additionally, demand for
certain manufactured goods may generate the construction or
modernization of factories in certain manufacturing sectors.
Public construction is also expected to increase, led by highway,
street, water and sewer projects. Based on these factors, the
company expects retail sales of industrial and lawn and grounds
care equipment in 1995 to continue at strong levels. The markets
served by the company's financial services operations are also
expected to continue to grow in conjunction with the strong
demand for new equipment and the projected growth in the general
economy.
"In response to these market conditions, North American
production tonnage schedules have been increased approximately
four percent compared to 1994," Becherer said. "Overseas
production tonnage schedules will be approximately six percent
lower than last year, reflecting the re-sourcing of a portion of
the 50-series tractor line in accordance with the on-going
restructuring of our European tractor manufacturing operations.
Despite this lower initial level of production, overseas
operations are expected to show continued improvement.
Additionally, worldwide first quarter production tonnage is
forecasted to increase 10 percent compared with last year,
reflecting continued strong retail demand and the initial
production and shipment of the new high horsepower 8000-series
tractors.
"The current 1995 outlook for our businesses appears
bright," Becherer said. "Our new tractors have been well
accepted and our competitive position worldwide remains very
strong. Operating margins have continued to improve, reflecting
our ongoing effort to improve quality, reduce costs and enhance
profitability. The steps we have been implementing to improve
efficiencies should continue to yield increasing benefits to our
company in 1995 and beyond."
# # #
The following information is disclosed on behalf of the
company's United States credit subsidiary, John Deere Capital
Corporation, in connection with the disclosure requirements of
programs providing for the issuance of debt securities:
John Deere Capital Corporation's net income was $30.2
million in the fourth quarter of 1994 compared with $28.2 million
in the same period last year. Net income for the fourth quarter
of 1994 was favorably affected by a larger average portfolio
financed and a larger gain from the sale of retail notes. These
effects were partially offset by a higher provision for credit
losses, due to the growth in the portfolio financed. The average
balance of credit receivables and leases financed was 14 percent
higher in the fourth quarter of 1994 compared with the same
period last year.
Net income for fiscal 1994 totaled $104.9 million compared
with income before the cumulative effect of accounting changes of
$111.0 million in 1993 ($107.2 million after the accounting
changes.) The decrease reflects the impact of higher dividend
payouts during the year, lower gains from the sale of retail
notes and higher operating expenses, partially offset by higher
securitization and servicing fee income from retail notes
previously sold but still administered.
Credit receivable and lease acquisitions increased 29
percent during the fourth quarter and 18 percent for fiscal year
1994 compared with acquisitions in the same periods in 1993.
Acquisitions of retail notes, revolving charge accounts and
wholesale receivables all increased during 1994. Retail notes
acquired during fiscal 1994 totaled $2.488 billion, a 16 percent
increase compared with fiscal 1993 acquisitions of $2.136
billion. Acquisitions of recreational product notes accounted
for 11 percent of total note acquisitions in 1994 compared with
nine percent in 1993. Acquisitions of John Deere equipment notes
were 15 percent higher in the current year, primarily due to
increased retail sales of John Deere equipment.
Net credit receivables and leases financed by John Deere
Capital Corporation were $4.0 billion at October 31, 1994
compared with $3.4 billion one year ago. The increase resulted
from credit receivable acquisitions exceeding collections during
1994. However, the company also securitized and sold retail
notes, receiving net proceeds of $560 million during 1994,
compared with net proceeds of $1.143 billion last year. Net
credit receivables and leases administered, which include
receivables previously securitized and sold totaled $5.2 billion
at October 31, 1994 compared with $4.8 billion at October 31,
1993.
# # #
The attached data accompany this press release.
<PAGE>
Fourth Quarter 1994 Press Release
Income (loss):
(millions of dollars)
Three Months Twelve Months
Ended Ended
October 31 October 31
1994 1993 1994 1993
Income before special
items $169.6 $ 93.1 $603.6 $ 248.0
Restructuring charges (80.0)
Effect of tax rate
change 16.4 16.4
Cumulative effect of
accounting changes (1,105.3)
Net income (loss) $169.6 $109.5 $603.6 $ (920.9)
<PAGE>
Page 7 FOURTH QUARTER AND 1994 PRESS RELEASE
Net sales and revenues:
(millions of dollars)
Three Months Ended Twelve Months Ended
October 31 October 31
% %
1994 1993 Change 1994 1993 Change
Net sales:
Agricultural equipment $1,305 $1,181 +10 $4,718 $4,078 +16
Industrial equipment 447 382 +17 1,640 1,348 +22
Lawn and grounds
care equipment 397 286 +39 1,305 1,053 +24
Total net sales 2,149 1,849 +16 7,663 6,479 +18
Financial Services
revenues 340 302 +13 1,271 1,175 + 8
Other revenues 27 24 +13 96 100 - 4
Total net sales
and revenues $2,516 $2,175 +16 $9,030 $7,754 +16
United States and Canada:
Equipment net sales $1,633 $1,474 +11 $5,860 $4,934 +19
Financial Services
revenues 340 302 +13 1,271 1,175 + 8
Total 1,973 1,776 +11 7,131 6,109 +17
Overseas net sales 516 375 +38 1,803 1,545 +17
Other revenues 27 24 +13 96 100 - 4
Total net sales
and revenues $2,516 $2,175 +16 $9,030 $7,754 +16
Selected balance sheet data:
(millions of dollars)
October 31 October 31
1994 1993
Equipment Operations:
Dealer accounts and notes
receivable - net $2,939 $2,794
Inventories $ 698 $ 464
Financial Services:
Credit receivables and leases
financed - net $4,511 $3,758
Credit receivables and leases
administered - net $5,725 $5,195
Insurance and health care
companies' assets $1,671 $1,452
Average shares outstanding 86,146,147 77,291,186
