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: August 23, 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 10 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: August 23, 1994
<PAGE>
EXHIBIT INDEX
Sequential Page
Number and Description of Exhibit Number
(99) Press release and additional
information Pg. 4
<PAGE>
EXHIBIT 99
FOR IMMEDIATE RELEASE (23 August 1994)
MOLINE, ILLINOIS -- Deere & Company today reported record
third quarter net income totaling $157.7 million or $1.82 per
share. This is the fourth consecutive quarter in which the
company
has reported record earnings for that quarter. The 1994 third
quarter results increased by 74 percent or approximately $67
million compared with last year's restated net income of $90.8
million or $1.19 per share. The third quarter of Deere &
Company's
fiscal year ended July 31.
The 1993 third quarter net income of the equipment
operations
and the financial services subsidiaries has been restated for
accounting changes primarily related to postretirement benefits
expense. The accounting changes were adopted in the fourth
quarter
of 1993, effective retroactively to November 1, 1992.
Worldwide net sales and revenues increased 14 percent to
$2.327 billion in the third quarter of 1994 from $2.049 billion
during the same period last year. Total worldwide production
tonnage was up 17 percent compared with the third quarter of
1993.
Deere & Company Chairman and Chief Executive Officer Hans W.
Becherer said, "The company's results for the quarter reflected
continued improvement compared with a year ago primarily due to
higher North American production and sales volumes, as well as
improved operating efficiencies and better than previously
anticipated results from our overseas operations. The efficiency
improvements were particularly important to our better quarterly
results. These continuing efforts to enhance efficiency should
provide the company with a sound basis for the future. Price
realization also improved during the quarter as sales incentive
costs continued to decline from last year's levels.
Additionally,
net income from our financial services subsidiaries remained at a
strong level during the current quarter."
"The third quarter production increase would have been even
higher if not for the impact of the initial production start-up
of
our new large row-crop tractor line," Becherer said. "These
start-
up activities are planned to be completed during September 1994
when production should return to more normal levels. Fourth
quarter production of certain vehicles may be affected by the
availability of tires, which remained in tight supply at the end
of
the quarter."
Net sales of equipment were $ 1.979 billion in the quarter,
an
increase of 15 percent compared with $1.727 billion in the third
quarter of 1993. Net sales and revenues also include revenues of
the company's credit, insurance and health care operations, which
totaled $324 million in the third quarter of 1994 compared with
$297 million last year.
Worldwide net income for the first nine months of 1994
totaled
$434.0 million or $5.04 per share compared with restated income
of
$154.9 million or $2.01 per share before special items during the
same period last year. The increase was primarily due to higher
production and sales volumes, reflecting higher retail sales and
reduced factory production shutdowns in 1994. Operating
efficiencies also continued to improve compared with the same
period last year. For the first nine months of 1993, the
restated
net loss after special items was $1.030 billion or $13.32 per
share, which included $1.105 billion for the cumulative effect of
accounting changes and $80.0 million of overseas restructuring
charges.
Worldwide production tonnage during the first nine months of
1994 was 19 percent higher than in the same period last year.
Worldwide net sales and revenues were $6.514 billion during the
initial nine months of 1994, a 17 percent increase compared to
$5.578 billion in the same period last year. Net sales of
equipment increased 19 percent to $5.514 billion for the first
nine
months of 1994 from $4.630 billion during the same period of
1993.
The company's financial services revenues totaled $931 million
during the first nine months of 1994, a seven percent increase
compared with $873 million during the same period last year.
"North American retail sales of John Deere agricultural
equipment during the third quarter and the first nine months of
1994 continued at levels higher than last year," Becherer said.
"North American lawn and grounds care equipment retail sales for
the third quarter and year-to-date were at strong levels compared
with last year, reflecting continued growth in the general
economy.
North American retail sales of John Deere industrial equipment
were
significantly higher in both the quarter and the first nine
months
compared with a year ago, primarily resulting from increases in
residential and public construction activity. Overseas industry
retail demand for agricultural equipment in 1994 improved in many
of our markets compared to last year. However, industry retail
demand in Western Europe remained at historically low levels.
" As previously announced, Deere & Company is in the
process of
finalizing the purchase of the Homelite division of Textron,
Inc.,"
Becherer said. "Homelite is a leading producer of outdoor power
equipment, including string trimmers, chain saws, leaf blowers,
brushcutters and related equipment for homeowner and commercial
markets. This purchase is expected to be completed early in the
fourth quarter of 1994. This acquisition represents another
important step in the company's commitment to profitable growth
in
our lawn and grounds care operations."
Worldwide equipment operations, which exclude the financial
services subsidiaries, had income of $113.9 million for the
quarter
and $309.4 million year-to-date in 1994 compared with income
before
special items of $46.6 million for the quarter and $28.3 million
year-to-date last year. All of the company's equipment
businesses
reported higher earnings for both the quarter and year-to-date
compared with a year ago.
The North American agricultural equipment operations
generated
larger operating profits in both the quarter and the first nine
months compared with a year ago, reflecting higher production and
sales volumes and continued improvements in operating
efficiencies.
The North American lawn and grounds care equipment operations
reported improved operating profits in both the third quarter and
the first nine months of 1994 due to higher production and sales
volumes, compared with last year's small third quarter operating
loss and year-to-date operating profit. The North American
industrial equipment operations showed improved operating profits
in both the quarter and the first nine months of 1994 compared
with
last year's small third quarter and year-to-date operating
profits,
mainly as a result of higher production and sales volumes, and
lower operating costs. The company's overseas operations had an
operating profit in both the quarter and the first nine months of
1994 compared with last year's small operating profit for the
quarter and small year-to-date operating loss before
restructuring
costs. The improved overseas profitability resulted primarily
from
lower operating costs generated by the restructuring of the
company's European operations, as well as higher sales volumes
compared with last year. The continuing restructuring of these
operations should improve the division's position in the future.
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
$40.4 million for the third quarter and $119.4 million for the
first nine months compared with income of $41.3 million and
$122.0
million, respectively, for the same periods last year, excluding
the cumulative effect of accounting changes. Net income of the
credit operations for the third quarter of 1994 was $28.1 million
compared to net income of $31.4 million in last year's third
quarter. The decrease reflects lower gains from the sale of
retail
notes and slightly lower financing margins due to a competitive
marketplace.
Net income of the credit operations for the first nine
months
of 1994 was $82.1 million compared to income of $91.2 million in
1993, excluding the cumulative effect of accounting changes. The
change in income for the first nine months primarily reflects the
impact of a smaller average receivable and lease portfolio caused
mainly by the sale of retail notes in 1993, as well as lower
gains
related to notes previously sold. These decreases were partially
offset by higher securitization and servicing fee income from
notes
previously sold but still administered, coupled with a lower
provision for credit losses.
Net income of the insurance and health care operations was
$12.3 million for the quarter and $37.3 million year-to-date
compared with income of $9.9 million and $30.8 million,
respectively, for the same periods last year, excluding
accounting
changes. The increases reflect the continued profitable growth
of
these businesses.
"North American agricultural equipment retail sales during
the
first three quarters of 1994 provide a sound base for operations
during the remainder of the year," Becherer said. "The U.S.
Department of Agriculture continues to forecast farm net cash
income for 1994 to be at one of the highest levels in history,
and
crop yields are expected to attain near-record levels. Although
commodity prices have softened in response to the expected bumper
crops, North American agricultural equipment demand is expected
to
continue at a strong level throughout 1994.
"The European agricultural industry remains in the midst of
fundamental change due to revisions to government agricultural
policies," Becherer said. "Although the long-term, downward
trend
of European industry retail sales of agricultural equipment is
expected to continue, the current outlook for 1994 anticipates
industry retail sales being slightly higher than 1993 levels.
"The North American economy has continued to expand in 1994
despite recent increases in interest rates," Becherer said.
"This
expansion should continue to provide a solid foundation for
industrial and lawn and grounds care equipment retail sales
during
the remainder of the year.
"In response to retail demand, we have again increased our
North American production schedules," Becherer said. "As a
result,
1994 worldwide production tonnage is now anticipated to be 17
percent higher than 1993 output, up from our prior estimate of 16
percent. Worldwide agricultural equipment production tonnage is
expected to be up approximately 15 percent from last year, when
dealer receivables were reduced by $146 million. Lawn and
grounds
care equipment production tonnage is expected to be 19 percent
higher than 1993 and industrial equipment production tonnage is
23
percent higher than a year ago.
"Worldwide production during the last quarter of 1994 is
expected to be up 11 percent over the same period last year,
despite the planned production changeover associated with the
introduction of our new large row-crop tractor line," Becherer
said. "The introduction of the new 8000-series tractors is the
final step in our multi-year effort to completely replace our
tractor line with new models. This important new product was
enthusiastically received at our recent product introductory
meetings for dealers, and will be introduced to the marketplace
during September.
"Retail sales activity for all of our businesses remains
strong and the results of the company's equipment operations have
improved significantly in 1994," Becherer said. "Our operating
margins in 1994 have improved, reflecting both the effects of
higher volumes, as well as the results of our continuing efforts
to
improve quality, reduce costs and enhance productivity. We
continue to emphasize growth and improved profitability in all
aspects of our business. The steps we have been implementing to
improve efficiencies should continue to yield important benefits
to
our company in the future."
# # #
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 $25.8
million
in the third quarter of 1994 compared with $28.6 million in the
same period last year. The decrease reflects lower gains from
the
sale of retail notes and slightly lower financing margins due to
a
competitive marketplace.
For the first nine months of 1994, net income was $74.7
million, compared with income of $82.8 million in 1993, excluding
the cumulative effect of accounting changes ($79.0 million after
the accounting changes). Compared with last year, income for the
first nine months of 1994 was unfavorably affected by the impact
of
a smaller average receivable and lease portfolio caused mainly by
the sale of retail notes in 1993, and lower gains related to
notes
previously sold. These decreases were partially offset by higher
securitization and servicing fee income from retail notes
previously sold but still administered and a lower provision for
credit losses. The average receivable and lease portfolio
financed
was approximately four percent lower during the first nine months
of this year compared with a year ago.
Total receivable and lease acquisitions increased by 15
percent for the quarter and 14 percent year-to-date compared with
the same periods last year. The higher acquisitions during the
first nine months were attributable to increased volumes of
retail
notes, revolving charge accounts and wholesale receivables. Net
credit receivables and leases financed by John Deere Capital
Corporation were $4.134 billion at July 31, 1994 compared with
$3.710 billion one year ago. The increase in the receivable and
lease portfolio financed resulted mainly from a higher balance of
John Deere notes and leases, and revolving charge accounts. Net
credit receivables and leases administered, which include
receivables previously securitized and sold, amounted to $4.947
billion at July 31, 1994 compared with $4.670 billion at July 31,
1993.
# # #
The attached data accompany this press release.<PAGE>
Third Quarter 1994 Press Release
Income (loss):
(millions of dollars)
Three Months Nine Months
Ended Ended
July 31 July 31
1994 1993 1994 1993
Income before restructuring
charges as originally
reported $157.7 $100.1 $434.0 $182.7
Restatement of 1993 income
due to accounting changes* (9.3) (1,133.1)
Income (loss) before
restructuring charges
as restated 157.7 90.8 434.0 (950.4)
Restructuring charges 80.0
Net income (loss) as
restated $157.7 $90.8 $434.0 $(1,030.4)
* After-tax incremental and cumulative adjustments for the
adoption of FASB Statement Nos. 106 and 112.
<PAGE>
THIRD QUARTER 1994 PRESS RELEASE
Net sales and revenues:
(millions of dollars)
Three Months Ended Nine Months Ended
July 31 July 31
% %
1994 1993 Change 1994 1993 Change
Net sales:
Agricultural
equipment $1,194 $1,091 + 9 $3,413 $2,897 +18
Industrial
equipment 453 396 +14 1,193 966 +23
Lawn and grounds
care equipment 332 240 +38 908 767 +18
Total net sales 1,979 1,727 +15 5,514 4,630 +19
Financial Services
revenues 324 297 + 9 931 873 + 7
Other revenues 24 25 - 4 69 75 - 8
Total net sales
and revenues $2,327 $2,049 +14 $6,514 $5,578 +17
United States and Canada:
Equipment net sales $1,444 $1,291 +12 $4,227 $3,460 +22
Financial Services
revenues 324 297 + 9 931 873 + 7
Total 1,768 1,588 +11 5,158 4,333 +19
Overseas net sales 535 436 +23 1,287 1,170 +10
Other revenues 24 25 - 4 69 75 - 8
Total net sales
and revenues $2,327 $2,049 +14 $6,514 $5,578 +17
Selected balance sheet data:
(millions of dollars)
July 31 October 31 July 31
1994 1993 1993
Equipment Operations:
Dealer accounts and notes
receivable - net $2,982 $2,794 $2,848
Inventories $ 736 $ 464 $ 610
Financial Services:
Credit receivables and leases
financed - net $4,562 $3,758 $4,081
Credit receivables and leases
administered - net $5,375 $5,195 $5,041
Insurance and health care
companies' assets $1,629 $1,453 $1,426
Average shares
outstanding 86,068,341 77,291,186 77,291,186
