SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________
FORM 10-Q
___________________
Quarterly Report Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
For the quarterly period ended July 31, 1995
______________________________
Commission file no: 1-4121
______________________________
DEERE & COMPANY
Delaware 36-2382580
(State of incorporation) (IRS employer
identification no.)
John Deere Road
Moline, Illinois 61265
(Address of principal executive offices)
Telephone Number: (309) 765-8000
______________________________
Indicate by check mark whether the registrant (1) has filed
all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
At July 31, 1995, 87,304,949 shares of common stock, $1 par
value, of the
registrant were outstanding.
Page 1 of 37 Pages.
Index to Exhibits: Page 20.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY
CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Three Months Ended July 31 Consolidated Subsidiaries)
Millions of dollars except per share amounts
(Unaudited)
Three Months Ended
July 31
1995 1994
Net Sales and Revenues
Net sales of equipment $ 2,304.5 $1,979.0
Finance and interest income 162.5 139.2
Insurance and health care premiums 186.8 173.8
Investment income 28.6 22.7
Other income 17.1 11.9
Total 2,699.5 2,326.6
Costs and Expenses
Cost of goods sold 1,820.8 1,565.3
Research and development expenses 81.6 66.8
Selling, administrative and general expenses 252.0 214.3
Interest expense 99.7 77.6
Insurance and health care claims and benefits 161.7 153.2
Other operating expenses 10.5 8.7
Total 2,426.3 2,085.9
Income of Consolidated Group Before
Income Taxes 273.2 240.7
Provision for income taxes 97.5 87.8
Income of Consolidated Group 175.7 152.9
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit
Insurance and health care 1.4
Other 4.4 3.4
Total 4.4 4.8
Net Income $ 180.1 $ 157.7
Net income per share, primary and fully
diluted $ 2.07 $ 1.82
<PAGE>
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for
the "Equipment Operations" and "Financial Services".
Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated"
data.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with Financial
Three Months Ended July 31 Services on the Equity Basis)
Millions of dollars except per share amounts
(Unaudited)
Three Months Ended
July 31
1995 1994
Net Sales and Revenues
Net sales of equipment $ 2,304.5 $ 1,979.0
Finance and interest income 25.6 19.5
Insurance and health care premiums
Investment income
Other income 7.2 6.6
Total 2,337.3 2,005.1
Costs and Expenses
Cost of goods sold 1,828.3 1,568.5
Research and development expenses 81.6 66.8
Selling, administrative and general expenses 179.1 155.5
Interest expense 35.0 28.8
Insurance and health care claims and benefits
Other operating expenses .8 3.5
Total 2,124.8 1,823.1
Income of Consolidated Group Before
Income Taxes 212.5 182.0
Provision for income taxes 77.2 68.1
Income of Consolidated Group 135.3 113.9
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit 28.1 28.1
Insurance and health care 12.3 12.3
Other 4.4 3.4
Total 44.8 43.8
Net Income $ 180.1 $ 157.7
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Three Months Ended July 31
Millions of dollars except per share amounts
(Unaudited)
Three Months Ended
July 31
1995 1994
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 139.1 $121.3
Insurance and health care premiums 229.0 208.6
Investment income 28.6 22.7
Other income 10.7 6.5
Total 407.4 359.1
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general expenses 76.0 61.5
Interest expense 66.8 50.4
Insurance and health care claims and
benefits 194.1 183.3
Other operating expenses 9.8 5.2
Total 346.7 300.4
Income of Consolidated Group Before Income
Taxes 60.7 58.7
Provision for income taxes 20.3 19.7
Income of Consolidated Group 40.4 39.0
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit
Insurance and health care 1.4
Other
Total 1.4
Net Income $ 40.4 $ 40.4
<PAGE>
DEERE & COMPANY
CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Nine Months Ended July 31 Consolidated Subsidiaries
Millions of dollars except per share amounts
(Unaudited)
Nine Months
Ended July 31
1995 1994
Net Sales and Revenues
Net sales of equipment $ 6,487.9 $5,513.8
Finance and interest income 476.1 391.8
Insurance and health care premiums 548.1 498.3
Investment income 77.6 68.7
Other income 56.2 41.0
Total 7,645.9 6,513.6
Costs and Expenses
Cost of goods sold 5,027.7 4,333.2
Research and development expenses 230.9 195.8
Selling, administrative and general expenses 727.4 637.3
Interest expense 290.6 220.1
Insurance and health care claims and benefits 461.7 432.9
Other operating expenses 42.1 25.1
Total 6,780.4 5,844.4
Income of Consolidated Group Before Income
Taxes 865.5 669.2
Provision for income taxes 317.9 243.9
Income of Consolidated Group 547.6 425.3
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit
Insurance and health care .7 3.5
Other 7.2 5.2
Total 7.9 8.7
Net Income $ 555.5 $ 434.0
Net income per share, primary and fully
diluted $ 6.41 $ 5.04
<PAGE>
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for
the "Equipment Operations" and "Financial Services".
Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated"
data.
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with Financial
Nine Months Ended July 31 Services on the Equity Basis)
Millions of dollars except per share amounts
(Unaudited)
Nine Months
Ended July 31
1995 1994
Net Sales and Revenues
Net sales of equipment $ 6,487.9 $ 5,513.8
Finance and interest income 71.3 58.1
Insurance and health care premiums
Investment income
Other income 19.1 16.8
Total 6,578.3 5,588.7
Costs and Expenses
Cost of goods sold 5,049.1 4,343.6
Research and development expenses 230.9 195.8
Selling, administrative and general
expenses 514.9 452.9
Interest expense 97.5 89.7
Insurance and health care claims and benefits
Other operating expenses 17.0 9.5
Total 5,909.4 5,091.5
Income of Consolidated Group Before
Income Taxes 668.9 497.2
Provision for income taxes 246.2 187.8
Income of Consolidated Group 422.7 309.4
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit 92.2 82.1
Insurance and health care 33.4 37.3
Other 7.2 5.2
Total 132.8 124.6
Net Income $ 555.5 $ 434.0
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Nine Months Ended July 31
Millions of dollars except per share amounts
(Unaudited)
Nine Months
Ended July 31
1995 1994
Net Sales and Revenues
Net sales of equipment
Finance and interest income $410.0 $ 337.0
Insurance and health care premiums 660.4 594.6
Investment income 77.6 68.7
Other income 39.4 27.7
Total 1,187.4 1,028.0
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 222.2 193.0
Interest expense 198.3 133.8
Insurance and health care claims and
benefits 545.1 513.6
Other operating expenses 25.2 15.6
Total 990.8 856.0
Income of Consolidated Group Before
Income Taxes 196.6 172.0
Provision for income taxes 71.7 56.1
Income of Consolidated Group 124.9 115.9
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit
Insurance and health care .7 3.5
Other
Total .7 3.5
Net Income $ 125.6 $ 119.4
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED BALANCE SHEET (Deere & Company
and Consolidated
Subsidiaries)
July 31 Oct 31 July 31
Millions of dollars (Unaudited) 1995 1994 1994
Assets
Cash and short-term investments $ 426.7 $ 245.4 $ 295.7
Cash deposited with unconsolidated
subsidiaries
Cash and cash equivalents 426.7 245.4 295.7
Marketable securities 804.3 1,126.3 1,108.1
Receivables from unconsolidated
subsidiaries and affiliates 1.6 8.9 5.3
Dealer accounts and notes receivable
- net 3,446.9 2,939.4 2,981.9
Credit receivables - net 4,896.4 4,501.7 4,577.8
Other receivables 474.8 429.7 381.8
Equipment on operating leases
- net 246.3 219.5 205.7
Inventories 920.2 698.0 735.8
Property and equipment - net 1,301.2 1,314.1 1,201.2
Investments in unconsolidated
subsidiaries and affiliates 103.9 154.3 148.1
Intangible assets - net 287.2 283.7 296.9
Deferred income taxes 666.1 679.8 685.5
Other assets and deferred charges 186.1 180.4 193.3
Total $13,761.7 $12,781.2 $12,817.1
Liabilities and Stockholders' Equity
Short-term borrowings $ 3,248.0 $ 2,637.4 $ 3,046.0
Payables to unconsolidated
subsidiaries and affiliates 47.7 34.0 31.3
Accounts payable and accrued
expenses 2,220.6 2,285.2 2,157.6
Insurance and health care claims
and reserves 465.5 761.3 732.4
Accrued taxes 133.4 80.2 97.1
Deferred income taxes 14.8 13.5 8.3
Long-term borrowings 2,377.1 2,053.9 1,964.9
Retirement benefit accruals and
other liabilities 2,222.0 2,357.8 2,345.5
Total liabilities 10,729.1 10,223.3 10,383.1
<PAGE>
Common stock, $1 par value
(issued shares at July 31, 1995
- 87,476,078) 1,539.0 1,491.4 1,475.8
Retained earnings 1,766.9 1,353.9 1,231.7
Minimum pension liability
adjustment (248.4) (248.4) (215.4)
Cumulative translation adjustment (1.0) (17.9) (36.2)
Unrealized gain on marketable
securities available for sale 1.5
Unamortized restricted stock
compensation (13.4) (8.8) (9.7)
Common stock in treasury, at cost (12.0) (12.3) (12.2)
Total stockholders' equity 3,032.6 2,557.9 2,434.0
Total $13,761.7 $12,781.2 $12,817.1
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for
the "Equipment Operations" and "Financial Services".
Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated"
data.
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED BALANCE SHEET (Deere & Company with
Financial Services
on the Equity Basis)
July 31 Oct 31 July 31
Millions of dollars (Unaudited) 1995 1994 1994
Assets
Cash and short-term investments $ 133.8 $ 104.0 $ 48.1
Cash deposited with unconsolidated
subsidiaries 100.2
Cash and cash equivalents 234.0 104.0 48.1
Marketable securities
Receivables from unconsolidated
subsidiaries and affiliates 24.3 196.9 256.7
Dealer accounts and notes receivable
- net 3,446.9 2,939.4 2,981.9
Credit receivables - net 115.1 115.8 144.5
Other receivables 15.2
Equipment on operating leases - net 114.2 94.3 77.2
Inventories 920.2 698.0 735.8
Property and equipment - net 1,263.7 1,281.8 1,169.5
Investments in unconsolidated
subsidiaries and affiliates 1,346.6 1,285.9 1,261.2
Intangible assets - net 277.4 266.8 279.4
Deferred income taxes 600.6 620.5 629.9
Other assets and deferred charges 111.3 91.8 104.9
Total $ 8,454.3 $7,710.4 $7,689.1
Liabilities and Stockholders' Equity
Short-term borrowings $ 513.7 $ 53.8 $ 236.1
Payables to unconsolidated
subsidiaries and affiliates 47.7 34.0 31.3
Accounts payable and accrued
expenses 1,558.7 1,617.3 1,537.0
Insurance and health care claims
and reserves
Accrued taxes 125.0 79.7 93.2
Deferred income taxes 14.8 13.5 8.3
Long-term borrowings 963.2 1,019.4 1,019.5
Retirement benefit accruals and
other liabilities 2,198.6 2,334.8 2,329.7
Total liabilities 5,421.7 5,152.5 5,255.1
<PAGE>
Common stock, $1 par value
(issued shares at July 31,
1995 - 87,476,078) 1,539.0 1,491.4 1,475.8
Retained earnings 1,766.9 1,353.9 1,231.7
Minimum pension liability adjustment (248.4) (248.4) (215.4)
Cumulative translation adjustment (1.0) (17.9) (36.2)
Unrealized gain on marketable
securities available for sale 1.5
Unamortized restricted stock
compensation (13.4) (8.8) (9.7)
Common stock in treasury, at cost (12.0) (12.3) (12.2)
Total stockholders' equity 3,032.6 2,557.9 2,434.0
Total $ 8,454.3 $7,710.4 $7,689.1
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED BALANCE SHEET
July 31 Oct 31 July 31
Millions of dollars (Unaudited) 1995 1994 1994
Assets
Cash and short-term investments $ 292.9 $ 141.4 $ 247.6
Cash deposited with unconsolidated
subsidiaries
Cash and cash equivalents 292.9 141.4 247.6
Marketable securities 804.3 1,126.3 1,108.1
Receivables from unconsolidated
subsidiaries and affiliates
Dealer accounts and notes receivable - net
Credit receivables - net 4,781.3 4,385.9 4,433.3
Other receivables 475.9 415.5 382.8
Equipment on operating leases - net 132.1 125.2 128.5
Inventories
Property and equipment - net 37.5 32.3 31.7
Investments in unconsolidated
subsidiaries and affiliates 55.1 54.2
Intangible assets - net 9.8 16.9 17.4
Deferred income taxes 65.6 59.2 55.6
Other assets and deferred charges 74.6 88.6 88.4
Total $ 6,674.0 $6,446.4 $6,547.6
Liabilities and Stockholders' Equity
Short-term borrowings $ 2,734.3 $2,583.5 $2,809.9
Payables to unconsolidated
subsidiaries and affiliates 122.9 187.9 251.4
Accounts payable and accrued expenses 663.0 668.9 621.5
Insurance and health care claims
and reserves 465.5 761.3 732.4
Accrued taxes 8.4 .5 3.9
Deferred income taxes
Long-term borrowings 1,413.8 1,034.5 945.3
Retirement benefit accruals and
other liabilities 23.4 23.0 15.9
Total liabilities 5,431.3 5,259.6 5,380.3
<PAGE>
Common stock, $1 par value
(issued shares at July 31, 1995
- 87,476,078) 209.4 209.5 209.4
Retained earnings 1,035.5 980.3 962.9
Minimum pension liability adjustment
Cumulative translation adjustment (3.7) (3.0) (5.0)
Unrealized gain on marketable
securities available for sale 1.5
Unamortized restricted stock compensation
Common stock in treasury, at cost
Total stockholders' equity 1,242.7 1,186.8 1,167.3
Total $ 6,674.0 $6,446.4 $6,547.6
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Nine Months Ended July 31
Nine Months Ended July 31
Millions of dollars (Unaudited) 1995 1994
Cash Flows from Operating Activities
Net income $555.5 $ 434.0
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities (627.3) (172.4)
Net cash provided by (used for)
operating activities (71.8) 261.6
Cash Flows from Investing Activities
Collections and sales of credit
receivables 3,152.5 2,239.8
Proceeds from sales of marketable
securities 144.8 176.4
Proceeds from sales of businesses 86.7
Cost of credit receivables acquired (3,590.9) (3,048.2)
Purchases of marketable securities (137.5) (282.3)
Purchases of property and equipment (152.5) (120.2)
Cost of operating leases acquired (105.5) (69.1)
Other 27.4 37.9
Net cash used for investing
activities (575.0) (1,065.7)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 972.2 1,421.3
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 515.0 10.0
Principal payments on long-term
borrowings (554.1) (573.8)
Proceeds from issuance of common stock 42.1 36.3
Dividends paid (142.7) (128.6)
Other (6.5) (4.9)
Net cash provided by (used for)
financing activities 826.0 760.3
Effect of Exchange Rate Changes on Cash 2.1 1.3
Net Increase (Decrease) in Cash and Cash
Equivalents 181.3 (42.5)
Cash and Cash Equivalents at Beginning
of Period 245.4 338.2
Cash and Cash Equivalents at End
of Period $ 426.7 $ 295.7
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for
the "Equipment Operations" and "Financial Services".
Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated"
data.<PAGE>
DEERE & COMPANY
CONDENSED STATEMENT OF CONSOLIDATED EQUIPMENT OPERATIONS
CASH FLOWS (Deere & Company with
Nine Months Ended July 31 Financial Services on
the Equity Basis
Nine Months Ended July 31
Millions of dollars (Unaudited) 1995 1994
Cash Flows from Operating Activities
Net income $ 555.5 $ 434.0
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (719.3) (170.3)
Net cash provided by
(used for) operating activities (163.8) 263.7
Cash Flows from Investing Activities
Collections and sales of credit
receivables 40.9 51.2
Proceeds from sales of marketable
securities
Proceeds from sales of businesses
Cost of credit receivables acquired (38.8) (75.1)
Purchases of marketable securities
Purchases of property and equipment (140.2) (109.9)
Cost of operating leases acquired (66.1) (27.1)
Other 36.9 20.6
Net cash used for investing
activities (167.3) (140.3)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 411.7 (127.3)
Change in intercompany
receivables/payables 165.2 256.6
Proceeds from long-term borrowings
Principal payments on long-term borrowings (10.8) (180.4)
Proceeds from issuance of common stock 42.1 36.3
Dividends paid (142.7) (128.6)
Other (6.5) (4.9)
Net cash provided by
(used for) financing activities 459.0 (148.3)
Effect of Exchange Rate Changes on Cash 2.1 1.3
Net Increase (Decrease)
in Cash and Cash Equivalents 130.0 (23.6)
Cash and Cash Equivalents at
Beginning of Period 104.0 71.7
Cash and Cash Equivalents at
End of Period $ 234.0 $ 48.1
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
Nine Months Ended July 31
Nine Months
Ended July 31
Millions of dollars (Unaudited) 1995 1994
Cash Flows from Operating Activities
Net income $ 125.6 $119.4
Adjustments to reconcile net income to
net cash provided by
(used for) operating activities 36.8 81.6
Net cash provided by (used for)
operating activities 162.4 201.0
Cash Flows from Investing Activities
Collections and sales of credit receivables 3,111.6 2,203.6
Proceeds from sales of marketable securities 144.8 176.4
Proceeds from sales of businesses 86.7
Cost of credit receivables acquired (3,552.1)(2,988.0)
Purchases of marketable securities (137.5) (282.3)
Purchases of property and equipment (12.3) (10.3)
Cost of operating leases acquired (39.4) (42.1)
Other (9.5) 17.4
Net cash used for investing activities (407.7) (925.3)
Cash Flows from Financing Activities
Increase (decrease) in short-term borrowings 560.6 1,548.5
Change in intercompany receivables/payables (65.1) 256.6
Proceeds from long-term borrowings 515.0 10.0
Principal payments on long-term borrowings (543.3) (393.4)
Proceeds from issuance of common stock
Dividends paid 70.4 (203.1)
Other
Net cash provided by (used for)
financing activities 396.8 705.4
Effect of Exchange Rate Changes on Cash
Net Increase (Decrease) in Cash and
Cash Equivalents 151.5 (18.9)
Cash and Cash Equivalents at Beginning of Period 141.4 266.5
Cash and Cash Equivalents at End of Period $292.9 $ 247.6
<PAGE>
Notes to Interim Financial Statements
(1) The consolidated financial statements of Deere & Company and
consolidated subsidiaries have been prepared by the Company,
without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as
permitted by such rules and regulations. All adjustments,
consisting of normal recurring adjustments, have been
included. Management believes that the disclosures are
adequate to present fairly the financial position, results
of operations and cash flows at the dates and for the
periods presented. It is suggested that these interim
financial statements be read in conjunction with the
financial statements and the notes thereto included in the
Company's latest annual report on Form 10-K. Results for
interim periods are not necessarily indicative of those to
be expected for the fiscal year.
(2) The Company's consolidated financial statements and some
information in the notes and related commentary are
presented in a format which includes data grouped as
follows:
Equipment Operations - These data include the Company's
agricultural equipment, industrial equipment and lawn and
grounds care equipment operations with Financial Services
reflected on the equity basis. Data relating to the above
equipment operations, including the consolidated group data
in the income statement, are also referred to as "Equipment
Operations" in this report.
Financial Services - These data include the Company's
credit, insurance and health care operations.
Consolidated - These data represent the consolidation of the
Equipment Operations and Financial Services in conformity
with Financial Accounting Standards Board (FASB) Statement
No. 94. References to "Deere & Company" or "the Company"
refer to the entire enterprise.
(3) An analysis of the Company's retained earnings in millions
of dollars follows:
Three Months Nine Months
Ended Ended
July 31 July 31
1995 1994 1995 1994
Balance, beginning
of period...... $1,634.6 $1,117.1 $1,353.9 $ 926.5
Net income......... 180.1 157.7 555.5 434.0
Dividends declared. (47.8) (43.1) (142.5) (128.8)
Balance, end of
period........ $1,766.9 $1,231.7 $1,766.9 $1,231.7
(4) An analysis of the cumulative translation adjustment in
millions of dollars follows:
Three Months Nine Months
Ended Ended
July 31 July 31
1995 1994 1995 1994
Balance, beginning
of period.............. $ 8.0 $45.0 $ 17.9 $41.5
Translation adjustments... (7.1) (8.4) (17.5) (4.8)
Income taxes applicable to
translation adjustments.. .1 (.4) .6 (.5)
Balance, end of period.....$ 1.0 $36.2 $ 1.0 $36.2
(5) Substantially all inventories owned by Deere & Company and
its United States equipment subsidiaries are valued at cost
on the "last-in, first-out" (LIFO) method. If all of the
Company's inventories had been valued on a "first-in, first-
out" (FIFO) method, estimated inventories by major
classification in millions of dollars would have been as
follows:
July 31 Oct 31 July 31
1995 1994 1994
Raw materials and
supplies................ $ 221 $ 206 $ 193
Work-in-process........... 413 357 385
Finished machines and
parts................... 1,269 1,079 1,123
Total FIFO value.......... 1,903 1,642 1,701
Adjustment to LIFO
basis................... 983 944 965
Inventories............... $ 920 $ 698 $ 736
(6) During the first nine months of 1995, the Financial Services
subsidiaries and the Equipment Operations received proceeds
from the sale of retail notes in the public market and to
other financial institutions of $726 million. At July 31,
1995, the net unpaid balance of all retail notes previously
sold by the Financial Services subsidiaries and the
Equipment Operations was $1,302 million. At July 31, 1995,
the Company's maximum exposure under all credit receivable
recourse provisions was $176 million for all retail notes
sold.
Certain foreign subsidiaries have pledged assets with a
balance sheet value of $64 million as collateral for bank
advances of $1 million as of July 31, 1995.
At July 31, 1995, the Company had commitments of
approximately $74 million for construction and acquisition
of property and equipment.
<PAGE>
(7) Worldwide net sales and revenues and operating profit in
millions of dollars follow:
Three Months Nine Months
Ended July 31 Ended July 31
% %
1995 1994 Change 1995 1994 Change
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 $6,514 +17
Operating profit:
Agricultural equipment.$ 156 $ 133 $ 508 $ 401
Industrial equipment... 63 49 162 104
Lawn and grounds care
equipment............ 38 41 130 108
Financial Services**... 61 60 197 176
Total operating
profit. 318 283 997 789
Interest and corporate
expenses-net......... (40) (37) (123) (111)
Income taxes........... (98) (88) (318) (244)
Net income....... $ 180 $ 158 $ 556 $ 434
* Third quarter 1995 worldwide lawn and grounds care equipment
net sales, United States and Canada net sales and overseas
net sales include $86 million, $75 million and $11 million,
respectively, of net sales by Homelite, which was acquired
in the fourth quarter of 1994. The first nine months of
1995 include $223 million, $188 million and $35 million,
respectively, of Homelite's net sales.
** Operating profit of Financial Services includes the effect
of interest expense.
<PAGE>
(8) Dividends declared and paid on a per share basis were as
follows:
Three Months Nine Months
Ended Ended
July 31 July 31
1995 1994 1995 1994
Dividends declared.. $.55 $.50 $1.65 $1.50
Dividends paid........$.55 $.50 $1.65 $1.50
(9) The calculation of primary net income per share is based on
the average number of shares outstanding during the nine
months ended July 31, 1995 and 1994 of 86,699,000 and
86,068,000, respectively. The calculation of fully diluted
net income per share recognizes the dilutive effect of the
assumed exercise of stock options, stock appreciation rights
and conversion of convertible debentures. The effect of the
fully diluted calculation was immaterial.
(10) The Company is subject to various unresolved legal actions
which arise in the normal course of its business, the most
prevalent of which relate to product liability and retail
credit matters. Although it is not possible to predict with
certainty the outcome of these unresolved legal actions or
the range of possible loss, the Company believes these
unresolved legal actions will not have a material effect on
its financial position or results of operations.
(11) During the second quarter of 1993, the Company initiated
plans to downsize and rationalize its European operations.
This resulted in a restructuring charge of $80 million after
income taxes or $1.03 per share ($107 million before income
taxes). The charge mainly represented the cost of
employment reductions to be implemented during 1993 and the
next few years. As of July 31, 1995, the expected
employment reductions and the disbursement of the $107
million accrual were both approximately 76 percent complete.
(12) In the first quarter of 1995, the Company adopted FASB
Statement No. 115, Accounting for Certain Investments in
Debt and Equity Securities. The Company designated
approximately two-thirds of its debt securities as held-to-
maturity with the remaining debt and equity securities
classified as available-for-sale. The held-to-maturity debt
securities are carried at cost and the available-for-sale
securities are carried at fair value with unrealized gains
and losses shown as a separate component of stockholders'
equity. Previously, the Company valued all its securities
on a cost basis. The Statement had an immaterial effect on
stockholders' equity and no impact on the consolidated
income statement.
<PAGE>
(13) In January 1995, the Company's insurance subsidiaries agreed
to sell their 3.1 million shares (43.8 percent) of Re
Capital Corporation to Zurich Reinsurance Centre Holdings,
Inc. for $18.50 a share. In April 1995, the insurance
subsidiaries agreed to sell their wholly-owned subsidiary,
John Deere Life Insurance Company, to Life Reassurance
Corporation of America. These sales did not have a
significant effect on the Company's consolidated financial
position or net income for the third quarter or first nine
months of 1995.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Deere & Company achieved record worldwide net income in the third
quarter of 1995 of $180.1 million or $2.07 per share compared
with $157.7 million or $1.82 per share last year. 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
million in the third quarter and 17 percent to $7,646 million for
the first nine months of 1995 compared with $2,327 million and
$6,514 million, respectively, last year. Exports from the United
States also continued to strengthen, totaling $1,009 million 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.
Market demand for all the Company's products continues to 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 the
Company's Financial Services revenues.
Net sales to dealers of agricultural, industrial and lawn and
grounds care equipment were $2,304 million in the third quarter
and $6,488 million year-to-date in 1995 compared with $1,979
million for the quarter and $5,514 million year-to-date a year
ago. Net sales in 1995 include Homelite sales of $86 million
during the quarter and $223 million in the first nine months.
Homelite sales were not included in the comparable periods last
year. The physical volume of worldwide net sales to dealers
increased approximately 12 percent in the third quarter and 13
percent year-to-date in 1995. 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 and
physical volume of sales were also higher, increasing 26 percent
and 13 percent, respectively, 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 income of $135.3 million for the third quarter of 1995
compared with $113.9 million last year. Both the 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 ratio of
cost of goods sold to net sales of the Equipment Operations was
79.3 percent in the third quarter of 1995 and 1994. The 1995
year-to-date 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. During the first nine months of
1995, the ratio of cost of goods sold to net sales was 77.8
percent compared with 78.8 percent in the first nine months of
last year. Additional information on business segments is
presented in Note 7 to the interim financial statements.
Net income of the Company's credit operations was $28.1 million
in the third quarter of 1995 and 1994. For the first nine months
of 1995, net income of these subsidiaries was $92.2 million
compared with $82.1 million 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. Total revenues
of the credit operations increased 16 percent from $128 million
in the third quarter of 1994 to $149 million in the current
quarter and increased 23 percent in the first nine months from
$365 million last year to $449 million this year. Revenues
increased primarily due to a higher overall yield on the
receivables held, a larger average portfolio financed and
increased gains on the sale of retail notes. The average
balance of receivables and leases financed was six percent higher
in the third quarter and 14 percent higher in the first nine
months of 1995 compared with the same periods last year. The
resulting increase in average borrowings coupled with higher
borrowing rates this year resulted in a 34 percent increase in
interest expense in the current quarter and a 49 percent increase
in the first nine months of 1995 compared with 1994. The credit
subsidiaries' consolidated ratio of earnings to fixed charges was
1.66 to 1 for the third quarter this year compared with 1.87 to 1
in 1994. This ratio was 1.73 to 1 for the first nine months this
year compared with 1.95 to 1 in the comparable period of 1994.
Net income from insurance and health care operations was $12.3
million in the third quarter of 1995 and 1994. For the first
nine months, net income from these operations was $33.4 million
this year compared with $37.3 million in 1994. The insurance
operations' results in the first nine months of 1995 were
unfavorably affected by a small net loss from the sale of the
John Deere Life Insurance Company, a higher effective tax rate,
and lower equity income due to the sale of the Company's interest
in Re Capital Corporation. This decline was partially offset by
an increase in investment income and an improvement in insurance
and health care underwriting earnings compared to 1994. For the
third quarter, insurance and health care premiums earned
increased 10 percent in 1995 compared with the same period last
year, while claims, policy benefits and selling, administrative
and general expenses also increased 10 percent this year. For
the nine-month period, insurance and health care premiums earned
increased by 11 percent in 1995, while claims, policy benefits
and selling, administrative and general expenses increased nine
percent compared with last year. The sale of the life insurance
subsidiary will not significantly affect the future profitability
of these operations.
Based on continued strong retail demand for the Company's
products, fourth quarter earnings are expected to remain at
strong levels. 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. 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 fourth
quarter earnings of a year ago. Earnings for the entire 1995
fiscal year will be at record levels.
CAPITAL RESOURCES AND LIQUIDITY
The discussion of capital resources and liquidity has been
organized to review separately, where appropriate, the Company's
Equipment Operations, Financial Services operations and the
consolidated totals.
Equipment Operations
The Company's equipment businesses are capital intensive and are
subject to large seasonal variations in financing requirements
for receivables from dealers and inventories. Accordingly, to
the extent necessary, funds provided from operations are
supplemented from external sources.
Negative cash flows from operating activities in the first nine
months of 1995 resulted from increases in dealer receivables and
Company-owned inventories due to normal seasonal increases and
higher retail demand, coupled with contributions of $285 million
to the pension fund. Partially offsetting these operating cash
outflows were positive cash flows from net income and dividends
received from the Financial Services operations. The resulting
net cash requirement for operating activities of $164 million,
along with cash required for payment of dividends, purchases of
property and equipment and an increase in cash and cash
equivalents were provided primarily from an increase in
borrowings and a decrease in receivables from the Financial
Services operations.
In the first nine months of 1994, positive cash flows from
operating activities of $264 million resulted mainly from net
income and dividends received from the Financial Services
operations, which were partially offset by the normal seasonal
increases in dealer receivables and Company-owned inventories,
and contributions to the pension fund. Cash required for the
payment of borrowings, payment of dividends and purchases of
property and equipment was provided primarily from the cash flow
from operations, a decrease in receivables from the Financial
Services operations and a decrease in cash and cash equivalents.
Net dealer accounts and notes receivable, which largely represent
dealers' inventories financed by the Company, have increased $507
million since October 31, 1994 and $465 million compared to a
year ago due primarily to a normal seasonal increase and higher
retail demand, coupled with an increased level of dealer used
goods inventories. The ratios of these receivables to the last
12 months net sales were 40 percent at July 31, 1995, 38 percent
at October 31, 1994 and 40 percent at July 31, 1994. North
American agricultural equipment and industrial equipment dealer
receivables increased approximately $140 million and $120
million, respectively, compared with the levels 12 months
earlier. North American lawn and grounds care dealer receivables
increased approximately $135 million compared to a year earlier,
which included an additional $51 million of Homelite receivables
in 1995. Total overseas dealer receivables were approximately
$70 million higher than a year ago, approximately two-thirds of
which was due to higher foreign currency exchange rates in 1995.
The percentage of total worldwide dealer receivables outstanding
for periods exceeding 12 months was seven percent at July 31,
1995 and October 31, 1994, and eight percent at July 31, 1994.
Company-owned inventories at July 31, 1995 have increased by
$222 million compared with the end of the previous fiscal year
and $184 million compared to one year ago, reflecting a normal
seasonal increase as well as increased retail demand, higher
foreign currency exchange rates and approximately $60 million of
additional Homelite inventories at July 31, 1995 and October 31,
1994 compared to a year ago.
Total interest-bearing debt of the Equipment Operations was
$1,477 million at July 31, 1995 compared with $1,073 million at
the end of fiscal year 1994 and $1,256 million at July 31, 1994.
The ratio of total debt to total capital (total interest-bearing
debt and stockholders' equity) was 33 percent, 30 percent and 34
percent at July 31, 1995, October 31, 1994 and July 31, 1994,
respectively.
Financial Services
The Financial Services' credit subsidiaries rely on their ability
to raise substantial amounts of funds to finance their receivable
and lease portfolios. Their primary sources of funds for this
purpose are a combination of borrowings and equity capital.
Additionally, the John Deere Capital Corporation (Capital
Corporation), the Company's United States credit subsidiary,
periodically sells substantial amounts of retail notes in the
public market. The insurance and health care operations generate
their funds through internal operations and have no external
borrowings.
During the first nine months of 1995, the aggregate cash provided
from operating and financing activities was used primarily to
increase credit receivables and cash and cash equivalents. Cash
provided from Financial Services operating activities was $162
million in the first nine months. Financing activities provided
$397 million during the same period, representing a $532 million
increase in outside borrowings, partially offset by a $65 million
decrease in payables to the Equipment Operations and payment of a
$70 million dividend to the Equipment Operations. Cash used for
investing activities totaled $408 million in the first nine
months, primarily due to acquisitions of credit receivables
exceeding collections by $1,167 million, which was partially
offset by proceeds of $726 million received from the sale of
retail notes in the public market. Cash and cash equivalents
increased $151 million during the first nine months of 1995.
During the first nine months of 1994, the aggregate cash provided
from operating and financing activities was used primarily to
increase credit receivables. Cash provided from Financial
Services operating activities was $201 million during the first
nine months of 1994. Financing activities provided $705 million
during the same period, resulting from a $1,165 million increase
in outside borrowings which was partially offset by a $257
million decrease in payables to the Equipment Operations and
payment of a $203 million dividend to the Equipment Operations.
Cash used for investing activities totaled $925 million in the
first nine months of last year, primarily due to the cost of
credit receivables acquired exceeding collections. Cash and cash
equivalents also decreased $19 million in the first nine months
of 1994.
The positive cash flows from insurance and health care operations
have been primarily invested in marketable securities.
Marketable securities consist primarily of debt securities held
by the insurance and health care operations in support of their
obligations to policyholders. These investments decreased in the
first nine months of 1995 and during the past 12 months,
resulting primarily from the sale of the John Deere Life
Insurance Company including its marketable securities.
Credit receivables increased by $395 million in the first nine
months of 1995 and $348 million during the past 12 months. These
receivables consist of retail notes originating in connection
with retail sales by dealers of John Deere products and used
equipment, retail notes from non-Deere-related customers,
revolving charge accounts, financing leases and wholesale notes
receivable.
The credit subsidiaries' receivables increased during the first
nine months of 1995 due to acquisitions of credit receivables
exceeding collections, which was partially offset by the sale of
retail notes for proceeds of $726 million. Total acquisitions of
credit receivables were 19 percent higher in the first nine
months of 1995 compared with the same period last year. This
significant increase resulted mainly from increased retail sales
of John Deere equipment, an improvement in the credit
subsidiaries' market share for the financing of John Deere
agricultural equipment, and a higher revolving charge account and
wholesale note volume. The increase in credit receivables from
acquisitions exceeding collections in the past 12 months was
partially offset by the sale of receivables for proceeds of
$1,240 million during the same period. The levels of wholesale
receivables, revolving charge accounts and financing lease
receivables were higher than one year ago, while retail notes
were slightly lower compared to last year. Credit receivables
administered by the credit subsidiaries, which include
receivables previously sold, amounted to $6,108 million at July
31, 1995 compared with $5,600 million at October 31, 1994 and
$5,247 million at July 31, 1994. At July 31, 1995, the unpaid
balance of all retail notes previously sold was $1,302 million
compared with $1,175 million at October 31, 1994 and $773 million
at July 31, 1994. Additional sales of retail notes are expected
to be made in the future.
Total interest-bearing debt of the credit subsidiaries was $4,148
million at July 31, 1995 compared with $3,618 million at the end
of fiscal year 1994 and $3,755 million at July 31, 1994. Total
outside borrowings increased during the first nine months of 1995
and the past 12 months, generally corresponding with the levels
of the credit receivable and lease portfolio financed, the level
of cash and cash equivalents and the change in the amounts of
payables owed to the Equipment Operations. The credit
subsidiaries' ratio of total interest-bearing debt to
stockholder's equity was 5.6 to 1 at July 31, 1995 compared with
5.3 to 1 at October 31, 1994 and 5.7 to 1 at July 31, 1994.
During the first nine months of 1995, the Capital Corporation
issued $150 million of floating rate notes due in 1998 and
retired $150 million of 5% debentures, $150 million of 11-5/8%
debentures and $100 million of 6% debentures, all due in 1995.
During the same period, the Capital Corporation also issued $365
million and retired $143 million of medium-term notes.
Consolidated
The Company maintains unsecured lines of credit with various
banks in North America and overseas. Some of the lines are
available to both the Equipment Operations and certain credit
subsidiaries. Worldwide lines of credit totaled $4,112 million
at July 31, 1995, $1,149 million of which were unused. For the
purpose of computing unused credit lines, total short-term
borrowings, excluding the current portion of long-term
borrowings, were considered to constitute utilization. Included
in the total credit lines is a long-term credit agreement
commitment for $3,500 million.
During the first nine months of 1995, the total increase in cash
and cash equivalents on a consolidated basis was $181 million.
This represents $130 million provided by the Equipment Operations
and $151 million provided by Financial Services, reduced by $100
million of Equipment Operations' cash equivalents receivable from
the Financial Services operations.
Stockholders' equity was $3,033 million at July 31, 1995 compared
with $2,558 million at October 31, 1994 and $2,434 million at
July 31, 1994. The increase of $475 million in the first nine
months of 1995 resulted primarily from net income of $556
million, an increase in common stock of $48 million and a $17
million change in the cumulative translations adjustment,
partially offset by dividends declared of $143 million.
The Board of Directors at its meeting on August 30, 1995
announced its intention to declare a 3-for-1 split of the
Company's common stock, pending shareholder approval at a special
meeting. The meeting is expected to be held on November 15,
1995. The stock split would be implemented by a stock dividend
of two additional shares for each share outstanding. The Board
also raised the quarterly dividend to 60 cents per share from 55
cents per share, payable November 1, 1995 to stockholders of
record on September 30, 1995. The increased dividend is on a
pre-split basis.<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note (10) to the Interim Financial Statements.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See the index to exhibits immediately preceding the
exhibits filed with this report.
Certain instruments relating to long-term debt
constituting less than 10% of the registrant's total
assets are not filed as exhibits herewith pursuant to
Item 601(b)(4)(iii) (A) of Regulation S-K. The
registrant will file copies of such instruments upon
request of the Commission.
(b) Reports on Form 8-K
Current Report on Form 8-K dated May 23, 1995
(Item 7). <PAGE>
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 thereunto duly authorized.
DEERE & COMPANY
Date: September 11, 1995 By s/ Pierre E. Leroy
Pierre E. Leroy
Senior Vice President,
Principal Financial Officer
and Principal Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Number Page
2 Not applicable -
3 By-laws, as amended 21
4 Not applicable -
10 Not applicable -
11 Computation of net income per share 35
12 Computation of ratio of earnings to
fixed charges 36
15 Not applicable -
18 Not applicable -
19 Not applicable -
22 Not applicable -
23 Not applicable -
24 Not applicable -
27 Financial data schedule 37
99 Not applicable -
EXHIBIT 3
BYLAWS
of
DEERE & COMPANY
(Adopted July 30, 1958; Amended May 31, 1995)
ARTICLE I - IDENTIFICATION
Section 1. NAME. The name of the Company is Deere & Company
(hereinafter referred
to as the "Company").
Section 2. OFFICES. The principal office of the Company in
Delaware shall be in the City
of Wilmington, County of New Castle, State of Delaware. The
Company may maintain,
change or discontinue its other offices, including its principal
business office in the County
of Rock Island, State of Illinois, and may have such other offices
both within and outside
of the State of Delaware as its business may require.
Section 3. SEAL. The seal of the Company shall be circular in
form and mounted upon
a metal die, suitable for impressing the same upon paper. About
the upper periphery of the
seal shall appear the words "Deere & Company" and about the lower
periphery thereof the
word "Delaware". In the center of the seal shall appear a
representation of a leaping deer.
Section 4. FISCAL YEAR. The fiscal year of the Company shall
begin on the first day of
November in each calendar year and end on the last day of October
in the following
calendar year.
ARTICLE II - THE STOCKHOLDERS
Section 1. PLACE OF MEETINGS. Annual meetings of the stockholders
for the election
of directors shall be held at the principal business office of the
Company in Rock Island
County, State of Illinois. Meetings of the stockholders for any
other purpose may be held
at such place within the State of Delaware or the State of Illinois
as may be specified by the
Chairman or the Board of Directors.
Section 2. ANNUAL MEETING. The annual meeting of the
stockholders, at which they
shall elect directors by ballot and by plurality vote and may
transact such other business as
may properly be brought before the meeting accordance with Section
3 of Article II of these
Bylaws, shall be held at ten o'clock in the morning, local time, on
the last Wednesday in
February of each year or on such business day and at such time and
at such place as may
be designated by the Board of Directors. If the date designated
for the annual meeting is
a legal holiday then the annual meeting shall be held on the first
following day that is not
a legal holiday.
<PAGE>
Section 3. NOMINATION OF DIRECTORS AND OTHER BUSINESS.
(a) Only persons who are nominated in accordance with the following
procedures shall
be eligible for election as directors. Nominations of persons
for election as directors
may be made at a meeting of stockholders only (i) by or at the
direction of the
Board of Directors, (ii) by any person or persons authorized to
do so by the Board
or (iii) by any stockholder of the Company entitled to vote for
the election of
directors at the meeting who complies with the notice
procedures set forth in this
Section 3. Such nomination, other than those made by or at the
direction of the
Board or by persons authorized by the Board, shall be made
pursuant to timely
notice in writing to the Secretary of the Company. Such
stockholder's notice to the
Secretary of a proposed nomination shall set forth, as to each
person whom the
stockholder proposes to nominate for election or re-election as
a director, (i) the
name, age, business address and residence address of the
person, (ii) the principal
occupation or employment of the person, (iii) the class and
number of shares of
capital stock of the Company which are beneficially owned by
the person, and (iv)
any other information relating to the person that is required
to be disclosed in
solicitations for proxies for election of directors pursuant to
Regulation 14A under
the Securities Exchange Act of 1934, as now or hereafter
amended; such notice shall
further set forth, as to the stockholder giving the notice, (i)
the name and record
address of such stockholder and (ii) the class and number of
shares of the Company
which are beneficially owned by such stockholder. The Company
may require any
proposed nominee to furnish such other information as may
reasonably be required
by the Company to determine the eligibility of such proposed
nominee to serve as
director. No person shall be eligible for election as a
director of the Company unless
nominated in accordance with the procedures set forth herein
and unless qualified
under the other provisions of these bylaws. If the Chairman of
the meeting
determines that a nomination was not made in accordance with
the foregoing
procedure, he shall so declare to the meeting and the defective
nomination shall be
disregarded.
(b) To be properly brought before any annual or special meeting of
stockholders,
business must be either (i) specified in the notice of meeting
(or any supplement
thereto) given by or at the direction of the Board, (ii)
otherwise properly brought
before the meeting by or at the direction of the Board, or
(iii) otherwise properly
brought before the meeting by a stockholder. In addition to
any other applicable
requirements, for business to be properly brought before a
meeting by a stockholder,
the stockholder must have given timely notice thereof in
writing to the Secretary of
the Company. A stockholder's notice to the Secretary shall set
forth with respect to
each matter the stockholder proposes to bring before the
meeting (i) a brief
description of the business desired to be brought before the
meeting and the reasons
for conducting such business at the meeting, (ii) the name and
record address of the
stockholder proposing such business, (iii) the class and number
of shares of the
Company which are beneficially owned by the stockholder, and
(iv) any material
interest of the stockholder in such business. Notwithstanding
anything in these
bylaws to the contrary, no business shall be conducted at any
meeting of stockholders
except in accordance with the procedures set forth in this
Section 3, provided,
however, that nothing in this Section 3 shall be deemed to
preclude discussion by any
stockholder of any business properly brought before the
meeting. If the Chairman
of the meeting determines that such business was not properly
brought before the
meeting in accordance with the foregoing procedure, he shall so
declare to the
meeting, any such business not properly brought before the
meeting shall not be
transacted.
(c) To be timely, a stockholder's notice of nomination or other
business must be
delivered to, or mailed and received at, the principal
executive offices of the
Company, not less than 50 days nor more than 75 days prior to
the meeting;
provided, however, that in the event that less than 65 days'
notice or prior public
disclosure of the date of the meeting is given or made to
stockholders, notice by the
stockholder to be timely must be so received not later than the
close of business on
the 15th day following the day on which such notice of the date
of the annual
meeting was mailed or such public disclosure was made,
whichever first occurs.
Section 4. SPECIAL MEETINGS. Special meetings of the stockholders
may be called by
the Chairman or the Board of Directors. The business transacted at
any special meeting
of the stockholders shall be limited to the purposes stated in the
notice for the meeting.
Section 5. NOTICE OF MEETINGS. Written notice of each meeting of
stockholders,
stating the place, day and hour of the meeting and, in case of a
special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not
less than ten nor more
than sixty days before the date of the meeting, either personally
or by mail, by or at the
direction of the Chairman or the Secretary to each stockholder of
record entitled to vote
at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in
the United States mail addressed to the stockholder at his address
as it appears on the stock
transfer books of the Company, with postage thereon prepaid.
Section 6. FIXING OF RECORD DATES. In order that the Company may
determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any
adjournment thereof, or entitled to receive payment or any dividend
or other distribution
or allotment of any rights, or entitled to exercise any rights in
respect of any change,
conversion or exchange of stock or for the purpose of any other
lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be
more than sixty nor less than
ten days before the date of such meeting, nor more than sixty days
prior to any other
action. A determination of stockholders of record entitled to
notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however,
that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 7. VOTING LIST. The Secretary shall prepare and make, or
cause to be prepared
and made, at least ten days before every meeting of stockholders,
a complete list of the
stockholders entitled to vote at such meeting, arranged in
alphabetical order, showing the
address of and the number of shares registered in the name of each
stockholder. Such list
shall be open to the examination of any stockholder for any purpose
germane to the
meeting, during ordinary business hours, for a period of at least
ten days prior to the
meeting, either at a place within the city where the meeting is to
be held, which place shall
be specified in the notice of meeting, or, if not so specified, at
the place where the meeting
is to be held, and the list shall be produced and kept at the time
and place of the meeting
during the whole time thereof, and subject to the inspection of any
stockholder who may be
present.
Section 8. QUORUM AND ADJOURNED MEETINGS. The holders of a
majority of the
shares entitled to vote at any meeting of stockholders, present in
person or by proxy, shall
constitute a quorum at such meeting except as otherwise provided by
statute. Whenever a
quorum shall be present at any meeting all matters shall be decided
by vote of the holders
of a majority of the shares present, unless otherwise provided by
statute, the certificate of
incorporation, or by these bylaws.
Meetings of stockholders may be adjourned from time to time for any
reason and, if a
quorum shall not be present, the holders of the shares entitled to
vote present in person or
by proxy, may so adjourn the meeting. When a meeting is adjourned
to another time or
place, unless the bylaws otherwise require, notice need not be
given of the adjourned
meeting if the time and place thereof are announced at the meeting
at which the
adjournment is taken except that, if the adjournment is for more
than thirty days, or if after
the adjournment a new record date is fixed for the adjourned
meeting, a notice of the
adjourned meeting shall be given to each stockholder of record
entitled to vote at the
meeting. At the adjourned meeting the Company may transact any
business which might
have been transacted at the original meeting. If a quorum shall
not be present at any
meeting of the Board of Directors the directors present thereat may
adjourn the meeting
from time to time, without notice other than at the meeting, until
a quorum shall be present.
Section 9. VOTING AT MEETINGS. Unless otherwise required by law,
the certificate of
incorporation or these bylaws, each stockholder shall at every
meeting of the stockholders
be entitled to one vote in person or by proxy for each share of the
capital stock having
voting power held by such stockholder, but no proxy shall be voted
after three years from
its date, unless the proxy provides for a longer period.
Section 10. ORGANIZATION. The Chairman shall preside at all
meetings of the
stockholders. In the absence or inability to act of the Chairman,
the Vice Chairman, the
President or an Executive Vice President (in that order) shall
preside, and in their absence
or inability to act another person designated by one of them shall
preside. The Secretary
of the Company shall act as secretary of each meeting of the
stockholders. In the event of
his absence or inability to act, the chairman of the meeting shall
appoint a person who need
not be a stockholder to act as secretary of the meeting.
Section 11. INSPECTORS OF VOTING. Except as otherwise provided by
statute, the
Chairman or in his absence the chairman of the meeting, shall
appoint inspectors of voting
for each meeting of stockholders.
Section 12. MEETING PROCEDURES. Meetings of the stockholders
shall be conducted
in a fair manner but need not be governed by any prescribed rules
of order. The presiding
officer's rulings on procedural matters shall be final. The
presiding officer is authorized to
impose reasonable time limits on the remarks of individual
stockholders and may take such
steps as such officer may deem necessary or appropriate to assure
that the business of the
meeting is conducted in a fair and orderly manner.
ARTICLE III - THE BOARD OF DIRECTORS
Section 1. NUMBER AND QUALIFICATIONS. The business and affairs of
the Company
shall be under the direction of or managed by a Board of Directors
who need not be
residents of the State of Delaware or stockholders of the Company.
The number of
directors may be increased or decreased from time to time by
resolution of the Board of
Directors, provided no decrease shall have the effect of shortening
the term of any
incumbent director.
Persons who are or have been officers of the Company, other than
persons who hold or
have held either or both of the office of Chairman and Chief
Executive Officer and the
office of President, shall not be elected directors of the Company
for terms beginning after
the date they retire from active employment with the Company. No
candidate shall be
elected director of the Company for a term beginning after his or
her 70th birthday.
Section 2. ELECTION. Directors shall be elected by class for
three year terms as specified
in the Certificate of Incorporation at the annual meeting of
stockholders, except as provided
in Section 3 of this Article and except as required under the terms
of any preferred shares,
and each director elected shall hold office during the term for
which he is elected and until
his successor is elected and qualified. A director may be removed
only for cause.
Section 3. VACANCIES. Any vacancies occurring in the Board of
Directors and newly
created directorships resulting from any increase in the authorized
number of directors may
be filled by a majority of the remaining directors though less than
a quorum of the Board
of Directors, or by the sole remaining director, and any director
so chosen shall hold office
until the next election of the class for which he was chosen and
until his successor is duly
elected and qualified.
Section 4. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be
held at nine-thirty o'clock in the morning, local time, or at such
other time as may be
established from time to time by resolution of the Board of
Directors, on the last
Wednesday of May and August, and the first Wednesday in December,
and immediately
following the adjournment of the Annual Meeting of stockholders on
the last Wednesday
in February in each year. Should any of such days be a legal
holiday, the meeting shall be
held at the same time on the first following day that is not a
legal holiday. The February
meeting shall be held at the same place as the annual meeting of
stockholders. All other
regular meetings shall be held at the principal business office of
the Company in Rock
Island County, Illinois, or at any other place either within or
outside the State of Delaware
approved in writing not less than ten days in advance of the
meeting by a majority of the
number of directors then in office or approved at the last
preceding regular meeting of the
Board of Directors.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held
upon call of the Chairman at any time; special meetings also shall
be called by the
Chairman or by the Secretary whenever requested by one-third of the
directors then in
office. Such meetings shall be held at the principal business
office of the Company in Rock
Island County, Illinois, or at any other place either within or
outside the State of Delaware
as is designated in the call and notice for the meeting.
Section 6. NOTICE OF MEETINGS. No notice of any kind shall be
necessary for regular
meetings of the Board of Directors to be held at the principal
business office of the
Company in Rock Island County, Illinois.
Notice of special meetings of the Board of Directors wherever held
in the United States
other than Alaska or Hawaii, and notice of regular meetings of the
Board of Directors to
be held at a place in the United States other than at the principal
business office of the
Company and other than in Alaska or Hawaii shall be given by
letter, telegram, cable or
radiogram addressed to each director's regular business office and
delivered for transmission
not later than during the second day immediately preceding the day
for such meeting. One
day personal, telegraphic or telephonic notice given by the
Chairman, Secretary or any other
officer, shall be sufficient notice of the calling of a special
meeting; provided that such
persons may give shorter notice if that is deemed necessary or
appropriate under the
circumstances provided that the shorter notice is actually received
by the director prior to
the meeting and provision is made at the meeting for participation
by means of
telecommunication, as permitted by Section 10 of this Article.
Notice of special meetings and of regular meetings of the Board of
Directors to be held at
a place in Alaska or Hawaii or outside the United States shall be
given by letter, telegram,
cable or radiogram addressed to each director's regular business
office and delivered for
transmission not later than during the tenth day immediately
preceding the day for such
meeting.
Notice of any meeting of the Board of Directors for which a notice
is required may be
waived in writing signed by the person or persons entitled to such
notice, whether before
or after the time of such meeting, and such waiver shall be
equivalent to the giving of such
notice. Attendance of a director at any such meeting shall
constitute a waiver of notice
thereof, except where a director attends a meeting for the express
purpose of objecting to
the transaction of any business because such meeting is not
lawfully convened. Neither the
business to be transacted at nor the purpose of any meeting of the
Board of Directors for
which a notice is required need be specified in the notice, or
waiver of notice, of such
meeting.
Section 7. QUORUM. A majority of the number of directors in
office shall constitute a
quorum for the transaction of business. The act of a majority of
the directors present at a
meeting at which a quorum is present shall be the act of the Board
of Directors except as
otherwise provided by law or these bylaws. [During an emergency
period following a
national catastrophe, due to enemy attack, a majority of the
surviving members of the Board
of Directors who have not been rendered incapable of acting as the
result of physical or
mental incapacity or the difficulty of transportation to the place
of the meeting shall
constitute a quorum for the purpose of filling vacancies in the
Board of Directors and
among the elected officers of the Company.]
Section 8. ORGANIZATION. The Chairman shall preside at all
meetings of the Board
of Directors. In the absence or inability to act of the Chairman,
the Vice Chairman, the
President or an Executive Vice President (in that order) shall
preside, and in their absence
or inability to act another director designated by one of them
shall preside.
Section 9. ACTIONS BY WRITTEN CONSENT. Any action required or
permitted to be
taken at any meeting of the Board of Directors or of any committee
thereof may be taken
without a meeting, if prior to such action a written consent
thereto is signed by all members
of the Board or of such committee as the case may be, and such
written consent is filed with
the minutes of proceedings of the Board or such committee.
Section 10. MEETINGS BY MEANS OF TELECOMMUNICATION. Members of
the
Board of Directors of the Company, or any committee designated by
the Board of Directors,
may participate in a meeting of the Board of Directors or such
committee by means of a
conference telephone or similar communications equipment by means
of which all persons
participating in the meeting can hear each other, and participation
in a meeting pursuant
to this Section 10 shall constitute presence in person at such
meeting.
Section 11. INTERESTED DIRECTORS: QUORUM.
(a) No contract or transaction between the Company and one or
more of its
directors or officers, or between the Company and any
other corporation,
partnership, association or other organization in which
one or more of its
directors or officers are directors or officers, or have
a financial interest, shall
be void or voidable solely for this reason, or solely
because the director or
officer is present at or participates in the meeting of
the Board or committee
thereof which authorizes the contract or transaction, or
solely because his or
their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest
and as to the
contract or transaction are disclosed or are known to
the Board of
Directors or the committee, and the Board or
committee in good faith
authorizes the contract or transaction by the
affirmative votes of a
majority of the disinterested directors, even though
the disinterested
directors be less than a quorum; or
(2) The material facts as to his relationship or interest
and as to the
contract or transaction are disclosed or are known to
the shareholders
entitled to vote thereon, and the contract or
transaction is specifically
approved in good faith by vote of the shareholders;
or
(3) The contract or transaction is fair as to the Company
as of the time it
is authorized, approved, or ratified by the Board of
Directors, a
committee thereof or the shareholders.
(b) Common or interested directors may be counted in
determining the presence
of a quorum at a meeting of the Board of Directors or of
a committee which
authorizes the contract or transaction.
Section 12. COMPENSATION. The Board of Directors, by the
affirmative vote of a
majority of the whole Board, and irrespective to any personal
interest of its members, shall
provide reasonable compensation of all directors for services,
ordinary or extraordinary, to
the Company as directors, officers or otherwise. Directors shall
be paid their actual
expenses of attendance at each meeting of the Board of Directors
and committees thereof.
ARTICLE IV - EXECUTIVE COMMITTEE
Section 1. DESIGNATION AND MEMBERS. During the intervals between
meetings of
the Board of Directors and subject to such limitations as may be
imposed by law and these
bylaws, an Executive Committee shall have and may exercise all of
the authority of the
Board of Directors in the management of the business and affairs of
the Company. The
membership of such Executive Committee shall include the Chairman
and such other
directors as are designated by the Board of Directors at the
recommendation of the
Chairman.
This designation of the Executive Committee and the delegation of
authority granted to it
shall not operate to relieve the Board of Directors, or any
director, of any responsibility
imposed upon it or him by law. No member of the Executive
Committee shall continue to
be a member thereof after he ceases to be a director of the
Company.
Section 2. LIMITATION OF POWERS. Neither the Executive Committee,
nor any other
Board Committee, shall have the authority of the Board of Directors
in reference to
amending the certificate of incorporation; adopting an agreement of
merger or consolidation
with another corporation or corporations; amending, altering or
repealing the bylaws;
electing or removing the Chairman, Vice Chairman, President, any
Executive Vice President
or any Senior Vice President; declaring dividends; or amending,
altering or repealing any
resolution of the Board of Directors which by its terms provides
that it shall not be
amended, altered or repealed by the Executive Committee. Nor,
unless specifically
authorized by the Board of Directors, shall the Executive Committee
have the authority of
the Board of Directors in reference to incurring indebtedness for
a term of longer than one
year except that this limitation shall not apply to indebtedness of
up to five years which (i)
do not involve registration with the Securities & Exchange
Commission and (ii) do not result
in a total of indebtedness of $50,000,000 for a term longer than
one year to any one lender,
nor shall this limitation apply to the guaranty of an indebtedness
which runs longer than one
year.
In any resolution of the Board of Directors providing for action to
be taken or approval to
be given by, or a report to be made to, the Board, the term "Board
of Directors" standing
alone shall not be deemed to mean the Executive Committee.
All minutes of meetings of the Executive Committee shall be
submitted to the next
succeeding meeting of the Board of Directors, provided that no
rights other than those of
the Company shall be affected by any revision or alteration by the
Board of Directors of
actions of the Executive Committee.
Section 3. PROCEDURE, MEETINGS, QUORUM. The Chairman shall
preside at all
meetings of the Executive Committee. In the absence or inability
to act of the Chairman,
the Vice Chairman, the President or an Executive Vice President (in
that order) shall
preside, and in their absence or inability to act another member
designated by one of them
shall preside.
<PAGE>
The Executive Committee shall keep a record of its acts and
proceedings.
Meetings of the Executive Committee shall be called at the request
of any member of the
Committee with the concurrence of the Chairman, or in the event of
his absence or inability
to act, the Vice Chairman, or in the event of the Vice Chairman's
absence or inability to
act, the President or an Executive Vice President of the Company,
in the order of their
availability. Such meeting shall be held at such location as shall
be stated in the notice for
such meetings.
Meetings of the Executive Committee may be held upon notice given
by word of mouth or
written notice delivered during regular business hours to the
office of each member or at
other times to his residence. In the case of a meeting held at the
principal business office
of the Company in Rock Island County, Illinois, such notice may be
given at any time prior
to said meeting. In the case of a meeting held at any place in the
United States other than
the principal business office and other than Alaska or Hawaii, such
notice may be given 48
hours prior to said meeting. In the case of a meeting held in
Alaska or Hawaii or elsewhere
outside the United States, such notice may be given four days prior
to said meeting.
A majority of the members of the Executive Committee shall
constitute a quorum for the
transaction of any business, and the act of a majority of the
members present at a meeting
at which a quorum is present shall be the act of the Executive
Committee.
ARTICLE V - BOARD COMMITTEES
OTHER THAN THE EXECUTIVE COMMITTEE
Section 1. GENERAL PROVISIONS. The Board of Directors may from
time to time
establish such committees of the Board as it shall deem appropriate
in addition to the
Executive Committee. The resolution establishing each such
committee shall state its
powers and duties and the number of directors who shall be members.
The membership
of and committee chairman of each such committee shall be
designated by the Board of
Directors upon the recommendation of the Chairman. No such
committee of the Board
shall exercise any of the powers of the Board other than those set
forth in such resolution
establishing the committee, as such resolution may be amended from
time to time.
Section 2. PROCEDURES, MEETINGS, QUORUM. Meetings of such Board
committees
may be held on call of the Chairman of the committee or upon call
issued by the Secretary
of the Company at the request of a majority of the committee.
Unless stated otherwise in the resolution establishing a committee,
a majority of the
members shall constitute a quorum for the conduct of business.
Meetings of such Board committees may be held at such place as may
be designated in the
notice of meeting. Notice of meetings shall be given by the
Secretary of the Company and
shall be by word of mouth delivered to the office of the committee
member not later than
the third day before the meeting or in writing or by telegram
mailed or sent not later than
the fourth day before the meeting. The notice need not specify the
business to be
conducted at a meeting.
ARTICLE VI - THE OFFICERS
Section 1. NUMBER AND QUALIFICATIONS. The principal corporate
officers of the
Company shall consist of a Chairman, a President, a Secretary, and
a Treasurer; and the
Company may have a Vice Chairman, one or more Executive Vice
Presidents, one or more
Senior Vice Presidents, one or more Vice Presidents, a General
Counsel, a Comptroller and
such other corporate officers and assistant officers as may be
elected or appointed pursuant
to these Bylaws. The Chairman, Vice Chairman and President shall
be chosen from among
the directors, but no other officer need be a director. The
Company may also have such
divisional officers as may be elected or appointed pursuant to
these Bylaws. Any number
of offices may be held by the same person.
Section 2. GENERAL DUTIES. All corporate and divisional officers
of the Company shall
have such authority and perform such duties in the management of
the Company as may be
provided by or delegated in accordance with Sections 7 through 16
of these Bylaws, or as
may be determined by resolution of the Board of Directors not
inconsistent with these
bylaws. All agents and employees of the Company not elected by the
Board of Directors
may be appointed by the Chairman or by persons authorized by him to
do so, to serve for
such time and to have such duties as the appointing authority may
determine from time to
time.
Section 3. ELECTION AND TERM OF OFFICE. All corporate officers
and each
divisional officer reporting to the Office of the Chairman
(hereinafter "Divisional Head")
shall be elected annually by the Board of Directors at its regular
meeting in February of
each year. Each such corporate and divisional officer shall hold
office for one year and until
his successor is elected and qualified, or until he shall have
resigned, or shall have been
removed in the manner provided in Section 4.
Section 4. REMOVAL. Any corporate or divisional officer may be
removed by the Board
of Directors, and any corporate officer below the rank of Senior
Vice President or divisional
officer below the rank of Divisional Head may be removed by the
Chairman, whenever in
the judgment of the Board or the Chairman, respectively, the
interests of the Company will
be served thereby. Such removal shall be without prejudice to the
contract rights, if any,
of the person removed. Election of an officer shall not of itself
create contract rights.
Section 5. RESIGNATIONS. Any officer may resign at any time by
giving written notice
to the Board of Directors or to the Chairman. Such resignation
shall take effect at the time
specified therein and, unless specified therein, the acceptance of
such resignation shall not
be necessary to make it effective.
Section 6. VACANCIES. The Board of Directors may at any time
create and fill new
offices and may at any time fill the unexpired portion of the term
of any vacant office. In
addition, as to any corporate office below the rank of Senior Vice
President, or any
divisional office below the rank of Divisional Head, the Chairman
may at any time create
and fill new offices and may at any time fill the unexpired term of
any such office.
<PAGE>
Section 7. CHAIRMAN. The Chairman shall be the chief executive
officer of the Company
and as such shall have the active executive management of the
operations of the Company,
and shall see that the orders and resolutions of the Board of
Directors and of the Executive
Committee are carried into effect. He shall have power to execute
in the name of the
Company all bonds, contracts, other obligations and property
conveyances which are duly
authorized, and he shall have all the powers and perform all duties
devolving upon him by
law and as head of the Company. He may call special meetings of
the stockholders and of
the Board of Directors. From time to time he shall bring to the
attention of the Board of
Directors such information or recommendations concerning the
business and affairs of the
Company as he may deem necessary or appropriate. When present he
shall preside at all
meetings of the stockholders, of the Board of Directors and of the
Executive Committee.
Section 8. VICE CHAIRMAN. The Vice Chairman shall be the second
ranking officer of
the Company. He shall have such powers and perform such duties as
the Board of
Directors may from time to time prescribe or as the Chairman may
from time to time
delegate to him. In the absence or inability to act of the
Chairman, the Vice Chairman shall
act as the chief executive officer of the Company and shall perform
the duties of the
Chairman.
Section 9. PRESIDENT. The President shall have such powers and
perform such duties
as the Board of Directors may from time to time prescribe or as the
Chief Executive Officer
may from time to time delegate to him. In the absence or inability
to act of the Chairman
and the Vice Chairman, the President shall perform the duties of
Chairman.
Section 10. EXECUTIVE VICE PRESIDENTS. Each Executive Vice
President shall have
such powers and perform such duties as the Board of Directors may
from time to time
prescribe or as the Chairman may from time to time delegate to him.
In the absence or
inability to act of the Chairman, the Vice Chairman and the
President, an Executive Vice
President present shall act as the chief executive officer of the
Company and shall perform
the duties of the Chairman.
Section 11. SENIOR VICE PRESIDENTS. Each Senior Vice President
shall have such
powers and perform such duties as the Board of Directors may from
time to time prescribe
or as the Chairman may from time to time delegate to him. In the
absence or inability to
act of the Chairman, the Vice Chairman, the President and Executive
Vice Presidents, the
duties of the Chairman shall be performed by a Senior Vice
President present, acting in
such order of priority as shall be designated by the Chairman.
Section 12. VICE PRESIDENTS. Each Vice President shall have such
powers and perform
such duties as the Board of Directors may from time to time
prescribe or as the Chairman
may from time to time delegate to him.
Section 13. SECRETARY. The Secretary shall act as secretary of
all meetings of the
stockholders, the Board of Directors and the Executive Committee.
He shall prepare and
keep or cause to be kept in books provided for the purpose minutes
of all meetings of the
stockholders, the Board of Directors and the Executive Committee;
shall see that all notices
are duly given in accordance with the provisions of these bylaws
and as required by law,
shall be custodian of the records and of the seal of the Company
and see that the seal is
affixed to all documents, the execution of which on behalf of the
Company under its seal
is duly authorized and, in general, he shall perform all duties
incident to the office of
Secretary and as required by law and such other duties as may be
assigned to him from time
to time by the Board of Directors or by the Chairman.
Each Assistant Secretary (if one or more Assistant Secretaries be
elected) shall assist the
Secretary in his duties and shall perform such other duties as the
Board of Directors may
prescribe from time to time, or the Chairman or the Secretary may
delegate to him from
time to time. In the event of the absence or inability to act of
the Secretary, his duties shall
be performed by an Assistant Secretary designated by the Chairman.
Section 14. TREASURER. The Treasurer shall have charge and
custody of, and be
responsible for, all moneys, notes and securities in the possession
of the Company, and
deposit all funds in the name of the Company in such banks, trust
companies or other
depositories as he may select; shall receive, and give receipts
for, moneys due and payable
to the Company from any source whatsoever; and, in general, he
shall perform all the duties
incident to the office of Treasurer and as required by law and such
other duties as may be
assigned to him from time to time by the Board of Directors or by
the Chairman.
Each Assistant Treasurer (if one or more Assistant Treasurers be
elected) shall assist the
Treasurer in his duties and shall perform such other duties as the
Board of Directors may
prescribe from time to time, or the Chairman or the Treasurer may
delegate to him from
time to time. In the event of the absence or inability to act of
the Treasurer, his duties shall
be performed by an Assistant Treasurer designated by the Chairman.
Section 15. GENERAL COUNSEL. The General Counsel shall be the
chief legal advisor
of the Company as to all matters affecting the Company and its
business and, in general, he
shall perform all the duties incident to the office of General
Counsel and such other duties
as may be assigned to him from time to time by the Board of
Directors or by the Chairman.
Section 16. COMPTROLLER. The Comptroller shall direct the
preparation and
maintenance, on a current basis, of such accounting books, records
and reports as may be
necessary to permit the directors, officers and executives of the
Company to exercise
adequate planning and control of the business of the Company or as
may be required by
law; and in general, he shall perform all the duties incident to
the office of Comptroller and
such other duties as may be assigned to him from time to time by
the Board of Directors
or by the Chairman.
ARTICLE VII - ACTS WITH RESPECT TO SECURITIES OWNED
Section 1. ACTS WITH RESPECT TO SECURITIES OWNED. Subject always
to the
specific directions of the Board of Directors, the Chairman, the
Vice Chairman, the
President, an Executive Vice President, a Senior Vice President, a
Vice President, or the
Treasurer on behalf of the Company may exercise all the rights,
powers and privileges of
ownership, including the right to vote, by proxy or otherwise, any
security or securities
owned by the Company (including reacquired shares of capital stock
of the Company). The
endorsement of such officers may be attested by the Secretary or an
Assistant Secretary
either with or without affixing thereto the corporate seal.
ARTICLE VIII - OTHER PROVISIONS
Section 1. CERTIFICATES OF STOCK. Certificates to evidence
ownership of stock of
the Company shall be issued in such form as the Board of Directors
shall from time to time
approve. The Board of Directors shall appoint a transfer agent and
registrar for the stock
of the Company in the Borough of Manhattan, City of New York. The
Board of Directors
may adopt such regulations concerning the authority and duties of
the transfer agent and
registrar, the transfer and registration of certificates of stock
and the substitution or
replacement of lost, stolen, destroyed or mutilated certificates as
it shall see fit.
Section 2. LOANS. The Company may lend money to, or guarantee any
obligation of, or
otherwise assist any officer or other employee of the Company or of
any of its subsidiaries,
including any officer or employee who is a director of the Company
or of any of its
subsidiaries, whenever, in the judgment of the Board of Directors,
such loan, guaranty or
assistance may reasonably be expected to benefit the Company. The
loan, guaranty or other
assistance may be with or without interest and may be unsecured or
secured in such manner
as the Board of Directors shall approve including, without
limitation, a pledge of shares of
stock of the Company.
Section 3. AMENDMENT OF BYLAWS. In addition to such power of
amendment as is
vested by law in the shareholders, the Board of Directors is
authorized to alter, amend or
repeal the bylaws at any meeting of the Board of Directors by the
affirmative vote of a
majority of the number of directors then in office.
Exhibit 11
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
(Shares and dollars in thousands except per share
amounts)
For the Nine Months Ended
July 31
1995 1994
1. Net income ............................. $555,508 $434,003
2. Adjustment - Interest expense, after tax
benefit, applicable to convertible
debentures outstanding.................. 16 30
3. Net income applicable to common stock -
before interest applicable to
convertible debentures.................. $555,524 $434,033
PRIMARY NET INCOME PER COMMON SHARE:
Shares:
4. Weighted average number of common
shares outstanding.................... 86,699 86,068
5. Incremental shares:
Dilutive common stock options......... 817 466
Dilutive stock appreciation rights.... 19 51
Total incremental shares............ 836 517
6. Primary net income per common share
(1 divided by 4)........................ $ 6.41* $5.04*
FULLY DILUTED NET INCOME PER COMMON SHARE:
Shares:
7. Weighted average number of common
shares outstanding.................... 86,699 86,068
8. Incremental shares:
Dilutive common stock options......... 875 466
Dilutive stock appreciation rights.... 22 52
9. Common equivalent shares from assumed
conversion of convertible debentures:
5-1/2% debentures due 2001.......... 18 28
10. Total............................... 87,614 86,614
11. Fully diluted net income per common
share (3 divided by 10).............. $ 6.41* $5.04*
____________
* Net income per common share outstanding was used in the
designated
calculations since the dilutive effects of common stock
options,
stock appreciation rights and assumed conversion of
convertible
debentures were immaterial.
EXHIBIT 12
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Ended
July 31
1995 1994
Earnings:
Income (loss) of consolidated
group before income taxes and
changes in accounting $865,480 $669,202
Dividends received from
less than fifty percent
owned affiliates 1,997 2,062
Fixed charges net of
capitalized interest 295,848 224,708
Total earnings $1,163,325 $895,972
Fixed charges:
Interest expense of con-
solidated group (includes
capitalized interest) $290,605 $220,113
Portion of rental charges
deemed to be interest 5,256 4,595
Total fixed charges $295,861 $224,708
Ratio of earnings to
fixed charges ** 3.93 3.99
<PAGE>
EXHIBIT 12
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended October 31
1994 1993 1992
(In thousands of dollars)
Earnings:
Income (loss) of consolidated
group before income taxes and
changes in accounting $920,920 $272,345 $43,488
Dividends received from
less than fifty percent
owned affiliates 2,329 1,706 2,325
Fixed charges net of
capitalized interest 310,047 375,238 420,133
Total earnings $1,233,296 $649,289 $465,946
Fixed charges:
Interest expense of con-
solidated group (includes
capitalized interest) $ 303,080 $369,325 $415,205
Portion of rental charges
deemed to be interest 7,008 6,127 $ 6,720
Total fixed charges $310,088 $375,452 $421,925
Ratio of earnings to
fixed charges ** 3.98 1.73 1.10
<PAGE>
EXHIBIT 12
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended October 31
1991 1990
(In thousands of dollars)
Earnings:
Income (loss) of consolidated
group before income taxes and
changes in accounting $(26,176) $587,528
Dividends received from
less than fifty percent
owned affiliates 6,229 7,775
Fixed charges net of
capitalized interest 454,092 439,200
Total earnings $ 434,145 $1,034,503
Fixed charges:
Interest expense of con-
solidated group (includes
capitalized interest) $ 451,936 $ 435,217
Portion of rental charges
deemed to be interest 4,088 3,983
Total fixed charges $ 456,024 $ 439,200
Ratio of earnings to
fixed charges ** * 2.36
The computation of the ratio of earnings to fixed charges is
based on applicable amounts
of
the Company and its consolidated subsidiaries plus dividends
received from less-than fifty
percent owned affiliates. "Earnings" consist of income before
income taxes, the
cumulative
effect of changes in accounting and fixed charges excluding
capitalized interest. "Fixed
charges" consist of interest on indebtedness, amortization of
debt discount and expense,
an
estimated amount of rental expense which is deemed to be
representative of the interest
factor, and capitalized interest.
* For the year ended October 31, 1991, earnings available for
fixed charges coverage were
$22 million less than the amount required for a ratio of earnings
to fixed charges of 1.0.
** The Company has not issued preferred stock. Therefore, the
ratios of earnings to
combined
fixed charges and preferred stock dividends are the same as the
ratios presented above.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form
10-Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000315189
<NAME> DEERE&COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JUL-31-1995
<EXCHANGE-RATE> 1
<CASH> 427
<SECURITIES> 804
<RECEIVABLES> 8,934
<ALLOWANCES> 114
<INVENTORY> 920
<CURRENT-ASSETS> 0
<PP&E> 4,260
<DEPRECIATION> 2,959
<TOTAL-ASSETS> 13,762
<CURRENT-LIABILITIES> 0
<BONDS> 2,377
<COMMON> 1,539
0
0
<OTHER-SE> 1,494
<TOTAL-LIABILITY-AND-EQUITY> 13,762
<SALES> 6,488
<TOTAL-REVENUES> 7,646
<CGS> 5,028
<TOTAL-COSTS> 5,762
<OTHER-EXPENSES> 0
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<INCOME-PRETAX> 865
<INCOME-TAX> 318
<INCOME-CONTINUING> 548
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 556
<EPS-PRIMARY> 6.41
<EPS-DILUTED> 6.41
</TABLE>
