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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 17, 1995
(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
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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 17, 1995
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EXHIBIT INDEX
Sequential Page
Number and Description of Exhibit Number
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(99) Press release and additional information Pg. 4
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EXHIBIT 99
Contact: Robert J. Combs
Deere & Company
309/765-5014
FOR IMMEDIATE RELEASE (17 AUGUST 1995)
MOLINE, ILLINOIS -- Deere & Company today reported record worldwide net
income of $180.1 million or $2.07 per share in the third quarter of 1995
compared with $157.7 million or $1.82 per share last year. The third quarter of
Deere & Company's fiscal year ended July 31.
Worldwide net income improved by $22.4 million or 14 percent compared with
last year s third quarter, primarily as a result of higher sales and production
volumes. Year-to-date net income totaled $555.5 million or $6.41 per share
compared with $434.0 million or $5.04 per share for the first nine months of
1994, also reflecting higher 1995 sales and production activity, which was
partially offset by unfavorable currency fluctuations.
Worldwide net sales and revenues increased 16 percent to $2.700 billion
in the third quarter and 17 percent to $7.646 billion for the first nine
months of 1995 compared with $2.327 billion and $6.514 billion, respectively,
last year. Exports from the United States also continued to strengthen,
totaling $1.0 billion for the first nine months, which was 17 percent higher
than last year. Worldwide production tonnage was up six percent in the quarter
and eight percent year-to-date compared with the same periods last year.
Deere & Company Chairman and Chief Executive Officer Hans W. Becherer said,
"Market demand for all our products continues to
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Third Quarter
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be positive. Increased export demand for agricultural commodities coupled with
good domestic demand have increased commodity prices. Farmers have remained
confident despite erratic weather in some parts of the United States, while the
general economy has continued to expand at moderate rates. Although some
uncertainty surrounds development of a new farm bill, conditions generally
remain favorable for continued strong agricultural equipment demand.
Additionally, general North American economic activity continues at relatively
high levels, which should continue to support good industrial and lawn and
grounds care equipment demand, as well as provide a sound basis for the
expansion of our financial services revenues."
Net sales to dealers of agricultural, industrial and lawn and grounds care
equipment were $2.304 billion in the third quarter and $6.488 billion
year-to-date in 1995 compared with $1.979 billion for the quarter and $5.514
billion year-to-date a year ago. North American net sales of John Deere
agricultural, industrial and lawn and grounds care equipment all increased
during the third quarter and first nine months of 1995 compared with last year.
Overseas net sales were also higher, increasing 26 percent in the first nine
months compared with a year ago.
The company's worldwide equipment operations, which exclude the financial
services subsidiaries and unconsolidated affiliates, had net income of $135.3
million for the third quarter of 1995 compared with $113.9 million last year.
Both the
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Third Quarter
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agricultural and industrial equipment segments reported improved quarterly
results due to higher sales and production volumes. However, the lawn and
grounds care equipment segment reported lower third quarter income due to
increased costs of imported components resulting from unfavorable currency
fluctuations. The 1995 year-to-date net income of the equipment operations was
$422.7 million compared with $309.4 million last year. All equipment segments
reported improved year-to-date results due to higher sales and production
volumes.
Net income of the financial services subsidiaries was $40.4 million for
the quarter and $125.6 million year-to-date compared with $40.4 million and
$119.4 million, respectively, last year. Third quarter and year-to-date net
income of the credit operations was $28.1 million and $92.2 million,
respectively, compared with $28.1 million and $82.1 million for the same periods
last year. This year's third quarter and year-to-date results continued to
reflect higher earnings from a larger average portfolio, offset by lower
financing margins. In addition, year-to-date results in 1995 benefited from
higher gains from the sale of retail notes. Net income of the insurance and
health care operations was $12.3 million for the quarter and $33.4 million year-
to-date compared with $12.3 million and $37.3 million, respectively, last year.
The year-to-date results for the insurance operations were affected by a small
net loss from the sale of the life insurance subsidiary. The sale will not
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Third Quarter
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significantly affect the future profitability of these operations.
"Based on continued strong retail demand for our products, we expect
fourth quarter earnings to remain at strong levels," Becherer said. "Worldwide
production tonnage for the year is expected to increase by six percent over last
year. However, production tonnage for the fourth quarter of 1995 will be lower
than last year, as previously indicated. Both fourth quarter production tonnage
and earnings will be affected by the following initiatives planned for the
quarter:
- Service parts inventories will be reduced to eliminate the planned
additional inventory which was produced during the third and fourth
quarters of 1994 and maintained in inventory during labor negotiations
as a hedge against potential work stoppages.
- Interest waiver programs will be used to reduce dealer used goods
inventories which are currently abnormally high due to the wet weather
conditions which delayed spring planting resulting in later than
normal trade-in of used equipment.
Both of these initiatives will be completed during the quarter and should
enable the company to enter 1996 well positioned to match the continuing
improved conditions of the United States farm economy. However, these
initiatives will result in 1995 fourth quarter earnings being lower than the
record
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Third Quarter
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fourth quarter earnings of a year ago. Earnings for the entire 1995 fiscal year
will be at record levels.
"Current demand for our products and the continuing improvement in the
United States farm economy are expected to provide a sound base for improved
future operations and our competitive position worldwide should remain very
strong," Becherer said. "Our twin focus on profitable growth and continuous
improvement, which has resulted in revenue growth, improved quality, reduced
costs and enhanced profitability, should yield important benefits to our company
in 1996 and beyond."
# # #
The following 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 (Capital Corporation) net income was $26.3
million in the third quarter and $87.0 million year-to-date in 1995 compared
with $25.8 million and $74.7 million in the same periods last year. This year's
third quarter and year-to-date results continued to reflect higher earnings from
a larger average portfolio, offset by lower financing margins. In addition,
year-to-date operations benefited from higher gains from note sales in 1995
compared with the same period a year ago. The average balance of credit
receivables and leases financed was three percent higher in the third quarter
and 13 percent higher
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Third Quarter
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in the first nine months of 1995 compared with the same periods last year.
Credit receivable and lease acquisitions increased 18 percent during both
the third quarter and year-to-date compared with a year ago. Acquisitions of
John Deere equipment notes were 15 percent higher in the current year, due to
increased retail sales of John Deere equipment and an improvement in the Capital
Corporation's market share of John Deere agricultural equipment notes financed.
Acquisitions of retail notes, revolving charge accounts and wholesale
receivables all increased during the first nine months of this year compared
with 1994. Year-to-date retail notes acquired totaled $2.036 billion, a 14
percent increase over 1994 acquisitions.
Credit receivables and leases financed by the Capital Corporation were
$4.341 billion at July 31, 1995 compared with $4.134 billion one year ago. The
Capital Corporation securitized and sold retail notes for which it received
proceeds of $1.240 billion during the past 12 months. These sales partially
offset the increase in credit receivables resulting from acquisitions exceeding
collections in the same period. Credit receivables and leases administered,
which include receivables previously securitized and sold, totaled $5.668
billion at July 31, 1995 compared with $4.947 billion at July 31, 1994.
# # #
The attached data accompany this press release.
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Third Quarter
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Third Quarter 1995 Press Release
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<TABLE>
<CAPTION>
Net sales and revenues:
(millions of dollars)
Three Months Ended Nine Months Ended
July 31 July 31
------------------- -------------------
% %
1995 1994 Change 1995 1994 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Net sales:
Agricultural equipment 1,365 1,194 +14 3,821 3,413 +12
Industrial equipment 504 453 +11 1,412 1,193 +18
Lawn and grounds
care equipment 435 332 +31 1,255 908 +38
Total net sales 2,304 1,979 +16 6,488 5,514 +18
Financial Services
revenues 365 324 +13 1,074 931 +15
Other revenues 31 24 +29 84 69 +22
Total net sales
and revenues 2,700 2,327 +16 7,646 6,514 +17
United States and Canada:
Equipment net sales 1,661 1,444 +15 4,868 4,227 +15
Financial Services
revenues 365 324 +13 1,074 931 +15
Total 2,026 1,768 +15 5,942 5,158 +15
Overseas net sales 643 535 +20 1,620 1,287 +26
Other revenues 31 24 +29 84 69 +22
Total net sales
and revenues 2,700 2,327 +16 7,646 6,514 +17
</TABLE>
<TABLE>
<CAPTION>
Selected balance sheet data:
(millions of dollars)
July 31 October 31 July 31
1995 1994 1994
------- ---------- -------
<S> <C> <C> <C>
Equipment Operations:
Dealer accounts and notes
receivable - net 3,447 2,939 2,982
Inventories 920 698 736
Financial Services:
Credit receivables and leases
financed - net 4,913 4,511 4,562
Credit receivables and leases
administered - net 6,240 5,725 5,375
Insurance and health care
companies' assets 1,352 1,671 1,629
Average shares outstanding 86,698,971 86,146,147 86,068,341
</TABLE>
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