UNITED STATES
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 April 30, 1998
--------------------------
Commission file no: 1-4121
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DEERE & COMPANY
Delaware 36-2382580
(State of incorporation) (IRS employer identification no.)
One John Deere Place
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 April 30, 1998, 244,854,197 shares of common stock, $1 par
value, of the registrant were outstanding.
- -----------------------------------------------------------------
Index to Exhibits: Page 29
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Three Months Ended April 30 Consolidated Subsidiaries)
Millions of dollars except per
share amounts Three Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment $3,609.9 $3,107.6
Finance and interest income 239.1 205.7
Insurance and health care premiums 174.7 171.3
Investment income 16.5 16.9
Other income 29.4 19.6
Total 4,069.6 3,521.1
Costs and Expenses
Cost of goods sold 2,737.2 2,319.4
Research and development expenses 114.2 106.6
Selling, administrative and general
expenses 340.6 335.7
Interest expense 129.2 103.7
Insurance and health care claims
and benefits 139.1 127.7
Other operating expenses 41.9 20.2
Total 3,502.2 3,013.3
Income of Consolidated Group
Before Income Taxes 567.4 507.8
Provision for income taxes 205.2 188.7
Income of Consolidated Group 362.2 319.1
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .2 (.3)
Insurance
Health care .1
Other 2.7 .7
Total 3.0 .4
Net Income $ 365.2 $ 319.5
Per Share:
Net income $ 1.48 $ 1.25
Net income - diluted $ 1.45 $ 1.24
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 2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Three Months Ended April 30 Financial Services on the
Equity Basis)
Millions of dollars except per
share amounts Three Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment $3,609.9 $3,107.6
Finance and interest income 30.6 25.0
Insurance and health care premiums
Investment income
Other income 9.4 8.7
Total 3,649.9 3,141.3
Costs and Expenses
Cost of goods sold 2,741.9 2,322.0
Research and development expenses 114.2 106.6
Selling, administrative and general
expenses 243.1 242.2
Interest expense 33.7 21.5
Insurance and health care claims
and benefits
Other operating expenses 13.6 3.4
Total 3,146.5 2,695.7
Income of Consolidated Group
Before Income Taxes 503.4 445.6
Provision for income taxes 182.1 167.0
Income of Consolidated Group 321.3 278.6
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 35.3 31.6
Insurance 4.3 8.2
Health care 1.6 .4
Other 2.7 .7
Total 43.9 40.9
Net Income $ 365.2 $ 319.5
Page 3
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Three Months Ended April 30
Millions of dollars except per
share amounts Three Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment
Finance and interest income $212.3 $181.4
Insurance and health care premiums 182.0 176.1
Investment income 16.5 16.9
Other income 21.0 12.0
Total 431.8 386.4
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 98.9 95.3
Interest expense 99.3 83.0
Insurance and health care claims
and benefits 141.2 129.2
Other operating expenses 28.4 16.7
Total 367.8 324.2
Income of Consolidated Group
Before Income Taxes 64.0 62.2
Provision for income taxes 23.1 21.7
Income of Consolidated Group 40.9 40.5
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .2 (.3)
Insurance
Health care .1
Other
Total .3 (.3)
Net Income $ 41.2 $ 40.2
Page 4
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Six Months Ended April 30 Consolidated Subsidiaries)
Millions of dollars except per
share amounts Six Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment $6,014.6 $5,110.2
Finance and interest income 472.4 398.2
Insurance and health care premiums 343.7 333.2
Investment income 33.5 31.9
Other income 51.5 43.6
Total 6,915.7 5,917.1
Costs and Expenses
Cost of goods sold 4,603.7 3,849.0
Research and development expenses 208.8 193.0
Selling, administrative and general
expenses 623.7 597.6
Interest expense 244.0 198.6
Insurance and health care claims
and benefits 277.7 251.5
Other operating expenses 69.5 34.3
Total 6,027.4 5,124.0
Income of Consolidated Group
Before Income Taxes 888.3 793.1
Provision for income taxes 323.0 294.8
Income of Consolidated Group 565.3 498.3
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (.8)
Insurance
Health care .1
Other 3.1 (1.3)
Total 3.2 (2.1)
Net Income $ 568.5 $ 496.2
Per Share:
Net income $ 2.29 $ 1.94
Net income - diluted $ 2.26 $ 1.92
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 5
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Six Months Ended April 30 Financial Services on the
Equity Basis)
Millions of dollars except per
share amounts Six Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment $6,014.6 $5,110.2
Finance and interest income 62.8 54.5
Insurance and health care premiums
Investment income
Other income 20.2 20.5
Total 6,097.6 5,185.2
Costs and Expenses
Cost of goods sold 4,612.9 3,857.7
Research and development expenses 208.8 193.0
Selling, administrative and general
expenses 437.7 425.6
Interest expense 55.4 42.0
Insurance and health care claims
and benefits
Other operating expenses 15.3 3.9
Total 5,330.1 4,522.2
Income of Consolidated Group
Before Income Taxes 767.5 663.0
Provision for income taxes 279.3 249.0
Income of Consolidated Group 488.2 414.0
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 68.1 64.6
Insurance 9.8 17.1
Health care (.7) 1.8
Other 3.1 (1.3)
Total 80.3 82.2
Net Income $ 568.5 $ 496.2
Page 6
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Six Months Ended April 30
Millions of dollars except per
share amounts Six Months Ended
(Unaudited) April 30,
1998 1997
Net Sales and Revenues
Net sales of equipment
Finance and interest income $415.5 $345.8
Insurance and health care premiums 357.4 349.1
Investment income 33.5 31.9
Other income 33.5 25.1
Total 839.9 751.9
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 189.8 178.4
Interest expense 194.5 158.6
Insurance and health care claims
and benefits 280.6 254.4
Other operating expenses 54.2 30.4
Total 719.1 621.8
Income of Consolidated Group
Before Income Taxes 120.8 130.1
Provision for income taxes 43.7 45.8
Income of Consolidated Group 77.1 84.3
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (.8)
Insurance
Health care .1
Other
Total .1 (.8)
Net Income $ 77.2 $ 83.5
Page 7
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED BALANCE SHEET (Deere & Company and
Consolidated Subsidiaries)
Apr 30, Oct 31, Apr 30,
Millions of dollars (Unaudited) 1998 1997 1997
Assets
Cash and short-term investments $ 334.4 $ 330.0 $ 267.6
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 334.4 330.0 267.6
Marketable securities 867.0 819.6 850.3
Receivables from unconsolidated
subsidiaries and affiliates 31.3 14.6 26.3
Trade accounts and notes
receivable - net 4,383.8 3,333.8 3,639.6
Financing receivables - net 6,880.6 6,404.7 6,438.7
Other receivables 364.7 412.7 411.0
Equipment on operating
leases - net 988.8 774.6 564.9
Inventories 1,511.1 1,072.7 1,289.8
Property and equipment - net 1,554.1 1,524.1 1,334.0
Investments in unconsolidated
subsidiaries and affiliates 154.6 149.9 129.9
Intangible assets - net 186.4 157.8 278.8
Prepaid pension costs 563.6 592.9 30.9
Deferred income taxes 529.6 543.6 648.1
Other assets and
deferred charges 203.2 188.8 162.6
Total $18,553.2 $16,319.8 $16,072.5
Liabilities and Stockholders' Equity
Short-term borrowings $ 5,993.3 $ 3,774.6 $ 4,257.7
Payables to unconsolidated
subsidiaries and affiliates 33.9 48.7 49.0
Accounts payable and
accrued expenses 2,704.4 2,839.7 2,609.5
Insurance and health care
claims and reserves 392.6 414.7 411.7
Accrued taxes 229.4 117.5 160.4
Deferred income taxes 21.5 21.4 9.8
Long-term borrowings 2,517.0 2,622.8 2,548.9
Retirement benefit accruals
and other liabilities 2,395.8 2,333.2 2,312.9
Total liabilities 14,287.9 12,172.6 12,359.9
Common stock, $1 par value
(issued shares at
April 30, 1998 - 263,849,669) 1,778.5 1,778.5 1,762.4
Retained earnings 3,502.7 3,048.4 2,694.0
Minimum pension liability
adjustment (14.0) (14.0) (235.4)
Cumulative translation adjustment (79.4) (57.4) (48.8)
Unrealized gain on
marketable securities 22.8 22.2 6.2
Unamortized restricted
stock compensation (15.2) (17.4) (19.8)
Common stock in treasury,
at cost (930.1) (613.1) (446.0)
Total stockholders' equity 4,265.3 4,147.2 3,712.6
Total $18,553.2 $16,319.8 $16,072.5
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 8
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED BALANCE SHEET (Deere & Company with
Financial Services on
the Equity Basis)
Apr 30, Oct 31, Apr 30,
Millions of dollars (Unaudited) 1998 1997 1997
Assets
Cash and short-term investments $ 91.3 $ 61.2 $ 66.6
Cash deposited with unconsoli-
dated subsidiaries 222.7 350.0 57.7
Cash and cash equivalents 314.0 411.2 124.3
Marketable securities
Receivables from unconsolidated
subsidiaries and affiliates 281.5 57.3 128.4
Trade accounts and notes
receivable - net 4,383.8 3,333.8 3,639.6
Financing receivables - net 79.7 83.5 82.3
Other receivables 2.1
Equipment on operating
leases - net 194.7 193.9 162.3
Inventories 1,511.1 1,072.7 1,289.8
Property and equipment - net 1,508.6 1,479.1 1,283.7
Investments in unconsolidated
subsidiaries and affiliates 1,539.3 1,494.7 1,448.1
Intangible assets - net 178.2 148.4 269.8
Prepaid pension costs 563.6 592.9 30.9
Deferred income taxes 485.5 490.8 592.7
Other assets and deferred charges 134.5 123.8 96.0
Total $11,174.5 $9,484.2 $9,147.9
Liabilities and Stockholders' Equity
Short-term borrowings $ 1,741.5 $ 171.1 $ 410.8
Payables to unconsolidated
subsidiaries and affiliates 33.9 54.8 49.0
Accounts payable and accrued
expenses 1,979.0 2,134.1 1,923.0
Insurance and health care
claims and reserves
Accrued taxes 219.8 114.2 157.9
Deferred income taxes 21.1 21.4 9.5
Long-term borrowings 551.7 539.9 599.3
Retirement benefit accruals
and other liabilities 2,362.2 2,301.5 2,285.8
Total liabilities 6,909.2 5,337.0 5,435.3
Common stock, $1 par value
(issued shares at
April 30, 1998 - 263,849,669) 1,778.5 1,778.5 1,762.4
Retained earnings 3,502.7 3,048.4 2,694.0
Minimum pension liability
adjustment (14.0) (14.0) (235.4)
Cumulative translation adjustment (79.4) (57.4) (48.8)
Unrealized gain on marketable
securities 22.8 22.2 6.2
Unamortized restricted stock
compensation (15.2) (17.4) (19.8)
Common stock in treasury, at cost (930.1) (613.1) (446.0)
Total stockholders' equity 4,265.3 4,147.2 3,712.6
Total $11,174.5 $9,484.2 $9,147.9
Page 9
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED BALANCE SHEET
Apr 30, Oct 31, Apr 30,
Millions of dollars (Unaudited) 1998 1997 1997
Assets
Cash and short-term investments $ 243.2 $ 268.8 $ 201.0
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 243.2 268.8 201.0
Marketable securities 867.0 819.6 850.3
Receivables from unconsolidated
subsidiaries and affiliates 6.1
Trade accounts and notes
receivable - net
Financing receivables - net 6,801.0 6,321.2 6,356.5
Other receivables 364.7 410.6 411.0
Equipment on operating leases - net 794.1 580.7 402.6
Inventories
Property and equipment - net 45.5 45.0 50.3
Investments in unconsolidated
subsidiaries and affiliates 17.6 13.0 5.4
Intangible assets - net 8.2 9.4 9.0
Prepaid pension costs
Deferred income taxes 44.1 52.8 55.4
Other assets and deferred charges 68.6 65.0 66.6
Total $9,254.0 $8,592.2 $8,408.1
Liabilities and Stockholders' Equity
Short-term borrowings $4,251.8 $3,603.5 $3,846.9
Payables to unconsolidated
subsidiaries and affiliates 473.0 392.7 159.8
Accounts payable and accrued
expenses 725.4 705.6 686.5
Insurance and health care
claims and reserves 392.6 414.7 411.7
Accrued taxes 9.6 3.2 2.5
Deferred income taxes .4 .3
Long-term borrowings 1,965.3 2,082.9 1,949.6
Retirement benefit accruals
and other liabilities 33.6 31.8 27.2
Total liabilities 7,851.7 7,234.4 7,084.5
Common stock, $1 par value
(issued shares at
April 30, 1998 - 263,849,669) 237.1 238.4 209.4
Retained earnings 1,150.2 1,104.5 1,113.9
Minimum pension liability
adjustment
Cumulative translation
adjustment (7.8) (7.3) (5.9)
Unrealized gain on marketable
securities 22.8 22.2 6.2
Unamortized restricted stock
compensation
Common stock in treasury, at cost
Total stockholders' equity 1,402.3 1,357.8 1,323.6
Total $9,254.0 $8,592.2 $8,408.1
Page 10
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS (Deere & Company
and
Six Months Ended April 30 Consolidated Subsidiaries
Six Months Ended
April 30,
Millions of dollars (Unaudited) 1998 1997
Cash Flows from Operating Activities
Net income $ 568.5 $ 496.2
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities (1,210.9) (660.3)
Net cash provided by (used for)
operating activities (642.4) (164.1)
Cash Flows from Investing Activities
Collections and sales of
financing receivables 3,130.8 2,811.4
Proceeds from maturities and
sales of marketable securities 73.1 86.6
Cost of financing receivables acquired (3,603.1) (3,317.0)
Purchases of marketable securities (117.3) (78.7)
Purchases of property and equipment (161.2) (147.3)
Cost of operating leases acquired (345.6) (217.6)
Acquisitions of businesses (48.4) (8.7)
Other 95.9 54.6
Net cash used for investing activities (975.8) (816.7)
Cash Flows from Financing Activities
Increase in short-term borrowings 1,659.7 849.1
Change in intercompany receivables/payables
Proceeds from long-term borrowings 781.0 455.0
Principal payments on long-term borrowings (334.2) (39.0)
Proceeds from issuance of common stock 20.7 10.9
Repurchases of common stock (346.8) (212.1)
Dividends paid (157.5) (102.8)
Other .9 (.6)
Net cash provided by (used for)
financing activities 1,623.8 960.5
Effect of Exchange Rate Changes on Cash (1.2) (3.6)
Net Increase (Decrease) in Cash and
Cash Equivalents 4.4 (23.9)
Cash and Cash Equivalents at
Beginning of Period 330.0 291.5
Cash and Cash Equivalents at End of Period $ 334.4 $ 267.6
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 11
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS (Deere & Company
Six Months Ended April 30 with Financial
Services on
Millions of dollars (Unaudited) the Equity Basis)
Six Months Ended
April 30,
1998 1997
Cash Flows from Operating Activities
Net income $ 568.5 $ 496.2
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities (1,344.6) (707.3)
Net cash provided by (used for)
operating activities (776.1) (211.1)
Cash Flows from Investing Activities
Collections and sales of financing receivables 15.3 30.5
Proceeds from maturities and sales of
marketable securities
Cost of financing receivables acquired (11.7) (10.5)
Purchases of marketable securities
Purchases of property and equipment (156.6) (142.2)
Cost of operating leases acquired (37.5) (36.0)
Acquisitions of businesses (43.7) (8.7)
Other 43.3 20.5
Net cash used for investing activities (190.9) (146.4)
Cash Flows from Financing Activities
Increase in short-term borrowings 1,593.8 186.5
Change in intercompany receivables/payables (213.5) (9.9)
Proceeds from long-term borrowings
Principal payments on long-term borrowings (26.7) (11.5)
Proceeds from issuance of common stock 20.7 10.9
Repurchases of common stock (346.8) (212.1)
Dividends paid (157.5) (102.8)
Other .9 (.6)
Net cash provided by (used for)
financing activities 870.9 (139.5)
Effect of Exchange Rate Changes on Cash (1.1) (3.5)
Net Increase (Decrease) in Cash and
Cash Equivalents (97.2) (500.5)
Cash and Cash Equivalents at
Beginning of Period 411.2 624.8
Cash and Cash Equivalents at End of Period $ 314.0 $ 124.3
Page 12
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
Six Months Ended April 30
Six Months Ended
Millions of dollars (Unaudited April 30,
1998 1997
Cash Flows from Operating Activities
Net income $ 77.2 $ 83.5
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities 88.3 36.3
Net cash provided by (used for)
operating activities 165.5 119.8
Cash Flows from Investing Activities
Collections and sales of
financing receivables 3,115.5 2,780.9
Proceeds from maturities and
sales of marketable securities 73.1 86.6
Cost of financing receivables acquired (3,591.4) (3,306.5)
Purchases of marketable securities (117.3) (78.7)
Purchases of property and equipment (4.7) (5.1)
Cost of operating leases acquired (308.2) (181.5)
Acquisitions of businesses (4.6)
Other 53.9 33.9
Net cash used for investing activities (783.7) (670.4)
Cash Flows from Financing Activities
Increase in short-term borrowings 65.9 662.6
Change in intercompany receivables/payables 86.3 (477.2)
Proceeds from long-term borrowings 781.0 455.0
Principal payments on long-term borrowings (307.5) (27.5)
Proceeds from issuance of common stock
Repurchases of common stock
Dividends paid (31.8) (72.8)
Other (1.3)
Net cash provided by (used for)
financing activities 592.6 540.1
Effect of Exchange Rate Changes on Cash (.1)
Net Increase (Decrease) in Cash and
Cash Equivalents (25.6) (10.6)
Cash and Cash Equivalents at
Beginning of Period 268.8 211.6
Cash and Cash Equivalents at End of Period $ 243.2 $ 201.0
Page 13
<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.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
and related disclosures. Actual results could differ from those
estimates.
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, construction equipment and commercial
and consumer 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 subsidiaries.
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 follows in
millions of dollars:
Three Months Six Months
Ended Ended
April 30, April 30,
1998 1997 1998 1997
Balance, beginning of
period $3,194.3 $2,425.2 $3,048.4 $2,299.5
Net income 365.2 319.5 568.5 496.2
Dividend declared (54.0) (50.7) (108.8) (101.7)
Other (2.8) (5.4)
Balance, end of period $3,502.7 $2,694.0 $3,502.7 $2,694.0
Page 14
<PAGE>
4. An analysis of the cumulative translation adjustment follows
in millions of dollars:
Three Months Six Months
Ended Ended
April 30, April 30,
1998 1997 1998 1997
Balance, beginning of
period $(87.5) $(29.2) $(57.4) $(14.0)
Translation adjustment (.1) (16.8) (21.7) (29.2)
Income taxes applicable
to translation
adjustments 8.2 (2.8) (.3) (5.6)
Balance, end of period $(79.4) $(48.8) $(79.4) (48.8)
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) basis. If all of the Company's
inventories had been valued on an approximate first-in, first-
out (FIFO) basis, estimated inventories by major classification
in millions of dollars would have been as follows:
April 30, October 31, April 30,
1998 1997 1997
Raw materials and supplies $ 268 $ 228 $ 237
Work-in-process 516 427 467
Finished machines and parts 1,740 1,430 1,598
Total FIFO value 2,524 2,085 2,302
Adjustment to LIFO basis 1,013 1,012 1,012
Inventories $1,511 $1,073 $1,290
6. During the first six months of 1998, the Financial Services
subsidiaries received proceeds from the sale of retail notes of
$243 million. At April 30, 1998, the net unpaid balance of all
retail notes previously sold by the Financial Services
subsidiaries was $1,118 million and the Company's maximum
exposure under all related recourse provisions was $158 million.
At April 30, 1998, the Company had commitments of approximately
$132 million for construction and acquisition of property and
equipment.
7. Dividends declared and paid on a per share basis were as
follows:
Three Months Ended Six Months Ended
April 30, April 30,
1998 1997 1998 1997
Dividends declared $.22 $.20 $.44 $.40
Dividends paid* $.44 $.20 $.64 $.40
* In 1998, the payment dates for the dividends declared in the
first and second quarters were both included in the second
quarter. Each dividend was $.22 per share.
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8. Worldwide net sales and revenues and operating profit in
millions of dollars follow:
Three Months Ended
April 30,
%
1998 1997 Change
Net sales:
Agricultural equipment $2,217 $1,949 +14
Construction equipment 715 591 +21
Commercial and consumer equipment 678 568 +19
Total net sales 3,610 3,108 +16
Financial Services revenues 424 381 +11
Other revenues 36 32 +13
Total net sales and revenues $4,070 $3,521 +16
United States and Canada:
Equipment net sales $2,733 $2,221 +23
Financial Services revenues 424 381 +11
Total 3,157 2,602 +21
Overseas Net sales 877 887 - 1
Other revenues 36 32 +13
Total net sales and revenues $4,070 $3,521 +16
Operating profit**:
Agricultural equipment $ 364 $ 339 + 7
Construction equipment 91 77 +18
Commercial and consumer equipment 96 58 +66
Equipment Operations* 551 474 +16
Financial Services 64 62 + 3
Total operating profit 615 536 +15
Interest and corporate expenses-net (45) (28) +61
Income taxes (205) (189) + 8
Net income $ 365 $ 319 +14
* Includes overseas operating
profit as follows: $ 105 $ 112 - 6
** Operating profit is income before interest expense, foreign
exchange gains and losses, income taxes and certain corporate
expenses. However, operating profit of Financial Services
includes the effect of interest expense.
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Six Months Ended
April 30,
%
1998 1997 Change
Net sales:
Agricultural equipment $3,668 $3,221 +14
Construction equipment 1,293 1,052 +23
Commercial and consumer equipment 1,054 837 +26
Total net sales 6,015 5,110 +18
Financial Services revenues 825 735 +12
Other revenues 76 72 + 6
Total net sales and revenues $6,916 $5,917 +17
United States and Canada:
Equipment net sales $4,548 $3,635 +25
Financial Services revenues 825 735 +12
Total 5,373 4,370 +23
Overseas Net sales 1,467 1,475 - 1
Other revenues 76 72 + 6
Total net sales and revenues $6,916 $5,917 +17
Operating profit**:
Agricultural equipment $ 570 $ 534 + 7
Construction equipment 155 115 +35
Commercial and consumer equipment 114 62 +84
Equipment Operations* 839 711 +18
Financial Services 121 129 - 6
Total operating profit 960 840 +14
Interest and corporate expenses-net (69) (49) +41
Income taxes (323) (295) + 9
Net income $ 568 $ 496 +15
* Includes overseas operating
profit as follows: $ 162 $ 181 -10
** Operating profit is income before interest expense, foreign
exchange gains and losses, income taxes and certain corporate
expenses. However, operating profit of Financial Services
includes the effect of interest expense.
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9. In the first quarter of 1998, the Company adopted FASB
Statement No. 128, Earnings per Share. This Statement requires
the presentation of basic and diluted net income per share, and
a reconciliation between these two amounts. Diluted net income
per share was restated for the prior period.
A reconciliation of basic and diluted net income per share in
millions, except per share amounts, follows:
Six Months
Ended
April 30,
1998 1997
Net income $568.5 $496.2
Average shares outstanding 248.1 255.3
Basic net income per share $ 2.29 $ 1.94
Average shares outstanding 248.1 255.3
Effect of dilutive securities:
Stock options 2.8 2.4
Other .2 .1
Total potential shares
outstanding 251.1 257.8
Diluted net income per share $ 2.26 $ 1.92
Stock options to purchase .5 million shares during the first six
months of 1998 and .1 million shares during the first six months
of 1997 were outstanding, but not included in the above diluted
per share computation because the options' exercise prices were
greater than the average market price of the Company's common
stock during the related periods.
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, retail credit
matters and patent and trademark 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. In December 1997, the Company announced the extension of
its stock repurchase program and authorized an additional $1
billion of such repurchases. At the Company's discretion,
repurchases of common stock are being made from time to time in
the open market and through privately negotiated transactions.
During the first six months of 1998, the Company repurchased
$269 million of common stock under the extended program and $78
million for ongoing stock option and restricted stock plans.
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<PAGE>
12. In December 1997, the Company invested $39 million for a 49
percent interest in Cameco Industries, Inc., primarily a
manufacturer of sugarcane harvesters and forestry equipment
located in Thibodaux, Louisiana. The initial goodwill acquired
was $27 million, which will be amortized to expense over 10
years. The Company has also agreed to purchase the remaining 51
percent interest for $40 million within 12 months of the first
investment. Cameco has been consolidated beginning in the first
quarter of 1998 and the purchase did not have a material effect
on the Company's operating results.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Deere & Company achieved record worldwide net income of $365.2
million, or $1.48 per share, for the second quarter of 1998, an
increase of 14 percent in net income and 18 percent in earnings
per share compared with $319.5 million, or $1.25 per share, in
the second quarter of 1997. Net income for the first six months
was $568.5 million, or $2.29 per share, an increase of 15
percent in net income and 18 percent in earnings per share
compared with $496.2 million, or $1.94 per share, for the same
period last year. Earnings per share continued to benefit from
the share repurchase program. Strong revenue growth, excellent
customer response to new products and continuing progress in
quality initiatives were the primary drivers of the Company's
earnings performance. These results are particularly gratifying
as the Company continues to make significant investments in
quality and growth initiatives to help enhance its leadership in
the global marketplace.
Worldwide net sales and revenues for the second quarter rose 16
percent to $4,070 million and 17 percent to $6,916 million for
the first six months of 1998 compared with $3,521 million and
$5,917 million, respectively, for the same periods last year.
Net sales of the agricultural, construction, and commercial and
consumer equipment divisions increased 16 percent to $3,610
million for the quarter and 18 percent to $6,015 million for the
first six months compared with $3,108 million and $5,110 million
for the same periods a year ago. These increases were in
response to strong retail demand for the Company's products.
Export sales from the United States increased to $562 million
for the second quarter and $1,014 million for the first six
months compared with $547 million and $939 million,
respectively, for the same periods last year. Overseas sales
remained at favorable levels; however, they were affected by
weaker foreign currencies and were slightly lower than last year
for both the quarter and the year-to-date. Overseas physical
volume of sales increased 6 percent for the year-to-date
compared with last year. Overall, the Company's physical volume
of sales increased 19 percent for the first six months of 1998
compared with the first half a year ago.
Worldwide Equipment Operations, which exclude the Financial
Services subsidiaries and unconsolidated affiliates, had record
income of $321.3 million for the second quarter and $488.2
million for the first six months compared with $278.6 million
and $414.0 million for the same periods last year. Worldwide
equipment operating profit increased to $551 million for the
quarter and to $839 million for the first six months of 1998
compared with $474 million for the quarter and $711 million for
the first six months of last year. Operating profit as a
percent of net sales was 15 percent for the quarter and 14
percent for the first six months, the same as last year.
Progress in quality initiatives allowed the Company to maintain
favorable margins despite increasingly competitive markets and
continued spending on growth initiatives.
- - Worldwide agricultural equipment operating profit increased 7
percent to $364 million for the quarter and 7 percent to $570
million for the first six months compared with $339 million and
$534 million for the same periods last year. These increases
resulted from higher sales and production volumes partially
offset by higher sales incentive costs, higher expenses related
to growth initiatives and a less favorable sales mix.
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<PAGE>
- - Worldwide construction equipment operating profit increased 18
percent to $91 million for the quarter and 35 percent to $155
million for the first six months, compared with $77 million and
$115 million for the same periods last year, primarily
reflecting higher sales and production volumes. Improved
efficiencies helped to partially offset higher growth
expenditures, higher sales incentive costs, and start-up
expenses primarily at the new engine facility in Torreon,
Mexico.
- - Worldwide commercial and consumer equipment operating profit
increased 66 percent to $96 million for the quarter and 84
percent to $114 million for the first six months compared with
$58 million and $62 million for the same periods last year.
This performance resulted from higher sales and production
volumes driven by strong demand for the Company's products, as
well as improved operating efficiencies. Results in 1998
included higher expenses related to new products and the start-
up of manufacturing facilities. Last year's results were
adversely affected by a write-off related to a Homelite product.
The ratio of cost of goods sold to net sales of the Equipment
Operations was 76.0 percent in the second quarter of 1998
compared to 74.7 percent in the same period of last year.
During the first six months of 1998, the ratio of cost of goods
sold to net sales was 76.7 percent compared to 75.5 percent in
the first half of last year. The increased ratios were
primarily due to the previously mentioned higher sales incentive
costs, a less favorable sales mix and higher expenses related to
growth initiatives. Additional information on business segments
is presented in Note 8 to the interim financial statements.
Net income of the Company's credit operations was $35.3 million
in the second quarter of 1998 compared with $31.6 million in
last year's second quarter. For the first six months of 1998,
net income of these subsidiaries was $68.1 million compared with
$64.6 million last year. The 1998 second quarter and year-to-
date results benefited from gains of $10.3 million on sales of
recreational vehicle retail notes and higher income from a
larger average receivable and lease portfolio, partially offset
by narrower financing spreads, higher write-offs of receivables
and higher operating expenses. Total revenues of the credit
operations increased 21 percent from $194 million in the second
quarter of 1997 to $233 million in the current quarter and
increased 21 percent in the first half from $371 million last
year to $449 million this year. The average balance of
receivables and leases financed was 14 percent higher in the
second quarter and 13 percent higher in the first six months of
1998 compared with the same periods last year. Interest expense
increased 19 percent in the current quarter and 22 percent in
the first half of 1998 compared with 1997 as a result of an
increase in average borrowings and higher borrowing rates this
year. The credit subsidiaries' consolidated ratio of earnings
to fixed charges was 1.55 to 1 for the second quarter this year
compared with 1.59 to 1 in 1997. This ratio was 1.55 to 1 for
the first six months this year compared with 1.64 to 1 in the
same period of 1997.
Net income from insurance operations was $4.3 million in the
second quarter of 1998 compared with $8.2 million last year.
For the first six months, net income from these operations was
$9.8 million this year compared with $17.1 million in 1997. The
decreases in income were primarily due to less favorable
underwriting results, lower premium volumes due to competitive
market conditions and lower investment income. For the second
quarter, insurance premiums decreased 7 percent in 1998 compared
with the same period last year, while total claims, benefits,
and selling, administrative and general expenses decreased 1
percent this year. For the six month period, insurance premiums
decreased 10 percent in 1998, while total claims, benefits, and
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<PAGE>
selling, administrative and general expense decreased 4 percent
compared with last year.
Net income from health care operations was $1.6 million in the
second quarter of 1998 compared with $.4 million last year. In
the first six months, the net loss incurred by these operations
was $.7 million this year compared with net income of $1.8
million in 1997. Despite lower margins at the beginning of this
year and competitive industry conditions affecting year-to-date
results, significant progress is being made to improve the
profitability of the business. For the second quarter, health
care premiums and administrative services revenues increased 11
percent in 1998 compared with the same period last year, while
total claims, benefits, and selling, administrative and general
expenses increased 9 percent this year. For the six month
period, health care premiums and administrative services
revenues increased 13 percent in 1998, while total claims,
benefits, and selling, administrative and general expenses
increased 15 percent compared with last year.
Market Conditions and Outlook
The Company's record results for the first six months were in
line with expectations. Better than anticipated crops in the
Southern hemisphere continued to put downward pressure on corn,
wheat and soybean prices; however, consumption is rising and
carryover stocks, although higher in the United States, are
slightly below average on a worldwide basis. United States farm
cash receipts are expected to be slightly below the high levels
of the previous two years, but farmers' balance sheets are
continuing to improve as a result of rising farmland prices and
low interest rates. Overall fundamentals of the farm economy
are sound, and the demand for farm equipment is expected to
remain favorable.
New products, low interest rates and solid economic growth
continue to bolster construction equipment demand. Housing
starts are expected to be slightly higher than last year's
level, and expenditures for highways and streets should grow
following the expected approval of pending federal highway
legislation.
Sales of commercial and consumer equipment should benefit from
favorable customer response to the Company's line of new
products, as well as high levels of consumer confidence and a
strong housing market.
The credit operations should benefit from the strong demand for
John Deere products. The insurance operations continue to face
competitive market conditions, and their results are expected to
be below last year's. The health care operations' margins
continue to be under pressure from a very competitive
environment; however, improvement plans are on target and are
expected to result in significantly improved financial results
in the remainder of 1998 compared to a year ago.
Based on these conditions, the Company's worldwide physical
volume of sales is currently projected to increase by
approximately 10 to 12 percent in 1998 compared with 1997.
Third quarter physical volume of sales is projected to be 10 to
14 percent higher than the comparable level for the third
quarter of 1997.
The Company looks forward to a continued strong performance in
fiscal 1998, reflecting gains from its quality improvement
efforts and the strong demand throughout the world for its line
of products. With investments in new facilities and new
innovative products, the Company looks forward to market share
growth and continued high levels of customer satisfaction.
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<PAGE>
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements under the "Market Conditions and
Outlook" heading, which relate to future operating periods, are
subject to important risks and uncertainties that could cause
actual results to differ materially. The Company's businesses
include Equipment Operations (agricultural, construction, and
commercial and consumer) and Financial Services (credit,
insurance and health care). Forward-looking statements relating
to these businesses involve certain factors that are subject to
change, including: the many interrelated factors that affect
farmers' confidence, including worldwide demand for agricultural
products, world grain stocks, commodities prices, weather
conditions such as El Nino, animal diseases, crop pests, harvest
yields, real estate values and government farm programs; general
economic conditions and housing starts; legislation, primarily
legislation relating to agriculture, the environment, commerce
and government spending on infrastructure; actions of
competitors in the various industries in which the Company
competes; the level of inventories in such industries;
production difficulties, including capacity and supply
constraints; dealer practices; labor relations; interest and
currency exchange rates; accounting standards; and other risks
and uncertainties. Dealers' retail sales of agricultural
equipment are especially affected by the weather in the summer,
while the number of housing starts are especially important to
sales of construction equipment. Economic difficulties in Asia
could affect North American grain and meat export prospects.
The Company's outlook is based upon assumptions relating to the
factors described above. These assumptions are sometimes based
upon estimates and data prepared by government agencies. Such
estimates and data may be subject to revision. Further
information concerning the Company and its businesses, including
factors that potentially could materially affect the Company's
financial results, is included in the Company's most recent
annual report on Form 10-K and other filings with the Securities
and Exchange Commission.
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 trade receivables from dealers and inventories.
Accordingly, to the extent necessary, funds provided from
operations are supplemented from external borrowing sources.
In the first six months of 1998, negative cash flows from
operating activities of $776 million resulted primarily from the
normal seasonal increases in trade receivables and Company-owned
inventories, and a decrease in accounts payable and accrued
expenses. 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, along with repurchases of
common stock, an increase in receivables from Financial
Services, payment of dividends and purchases of property and
equipment were provided primarily from an increase in borrowings
and a decrease in cash and cash equivalents.
Negative cash flows from operating activities in the first six
months of 1997 resulted primarily from the normal seasonal
increases in dealer receivables and Company-owned inventories.
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 $211 million, along with
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<PAGE>
cash required for repurchases of common stock, purchases of
property and equipment and payment of dividends, were provided
primarily from a decrease in cash and cash equivalents and an
increase in borrowings. Purchases of property and equipment
increased compared to 1996, primarily due to construction of new
facilities for the production of engines and commercial and
consumer equipment.
Trade receivables and Company-owned inventories increased, as
expected, due to the higher sales volume. Equipment Operations
assets at April 30, 1998 were 77.6 percent of the last 12 months
net sales, compared with 75.8 percent a year ago. The higher
ratio is primarily due to increased prepaid pension cost assets.
Net trade accounts and notes receivable result mainly from sales
to dealers of equipment that is being carried in their
inventories. Although trade receivables increased $744 million
compared to one year ago and $1,050 million during the first six
months, the ratios of worldwide net trade accounts and notes
receivable to the last 12 months' net sales were 37 percent at
April 30, 1998 compared to 36 percent at April 30, 1997 and 30
percent at October 31, 1997. In addition to the increase due to
higher sales volume this year, trade receivables reflected a
seasonal increase in the first six months. North American
agricultural, and commercial and consumer equipment trade
receivables increased approximately $520 million and $150
million, respectively, while construction equipment receivables
decreased approximately $30 million compared with the levels 12
months earlier. Total overseas trade receivables were
approximately $100 million higher than a year ago. The
percentage of total worldwide trade receivables outstanding for
periods exceeding 12 months was 4 percent at April 30, 1998, 5
percent at October 31, 1997 and 7 percent at April 30, 1997.
Company-owned inventories at April 30, 1998 increased by $438
million compared with the end of the previous fiscal year and
$221 million compared to one year ago, primarily reflecting a
seasonal increase in the first six months and increased
production and sales volumes from a year ago. Most of the
Company's inventories are valued on the last-in, first-out
(LIFO) basis. Inventories valued on an approximate current cost
basis increased by only 10 percent from a year ago compared to
an increase in net sales of 18 percent during the same periods.
Total interest-bearing debt of the Equipment Operations was
$2,293 million at April 30, 1998 compared with $711 million at
the end of fiscal year 1997 and $1,010 million at April 30,
1997. The ratio of total debt to total capital (total interest-
bearing debt and stockholders' equity) was 35 percent, 15
percent and 21 percent at April 30, 1998, October 31, 1997 and
April 30, 1997, respectively. During the first six months,
Deere & Company retired $25 million of medium-term notes.
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 credit subsidiaries periodically
sell substantial amounts of retail notes. The insurance and
health care operations generate their funds through internal
operations and intercompany loans.
During the first six months of 1998, the aggregate cash provided
from operating and financing activities was used primarily to
increase financing receivables and leases. Cash provided from
Financial Services operating activities was $166 million in the
first six months. Cash provided by financing activities totaled
$593 million in the first half of 1998, primarily resulting from
a $626 million increase in total borrowings, which was partially
offset by payment of a $32 million dividend to the Equipment
Operations. Cash used for investing activities totaled $784
million in the first six months, due to the cost of financing
Page 24
<PAGE>
receivables and leases exceeding collections and sales of
financing receivables. Cash and cash equivalents decreased $26
million during the first half of 1998.
In the first six months of 1997, the aggregate cash provided
from operating and financing activities was used for investing
activities. Cash provided from Financial Services operating
activities was $120 million in the first six months of 1997.
Cash provided by financing activities totaled $540 million in
the first half of 1997, representing a $613 million increase in
total borrowings, partially offset by payment of a $73 million
dividend to the Equipment Operations. Investing activities used
$670 million of cash in the first six months of 1997, primarily
due to acquisitions of financing receivables and leases
exceeding collections and sales of financing receivables by $707
million. Cash and cash equivalents decreased $11 million during
the first half of 1997.
Marketable securities consist primarily of debt securities held
by the insurance and health care operations in support of their
obligations to policyholders. During the first six months of
1998 and last 12 months, marketable securities increased $47
million and $17 million, respectively. The increase in the
first six months was primarily due to the investment of the
insurance operation's cash and cash equivalents held at the
beginning of the year, while the increase from a year ago was
mainly a result of an increase in unrealized gains.
Financing receivables and leases increased by $693 million in
the first six months of 1998 and $836 million during the past 12
months. These receivables and leases consist of retail notes
originating in connection with retail sales of new and used
equipment by dealers of John Deere products, retail notes from
non-Deere-related customers, revolving charge accounts,
wholesale notes receivable, and financing and operating leases.
The credit subsidiaries' receivables and leases increased during
the last 12 months due to the cost of financing receivables and
leases acquired exceeding collections, which was partially
offset by the sale of retail notes during the same period.
Total acquisitions of financing receivables and leases were 12
percent higher in the first six months of 1998 compared with the
same period last year. At April 30, 1998, the levels of retail
notes, wholesale receivables, leases and revolving charge
accounts were all higher than one year ago. Financing
receivables and leases administered by the credit subsidiaries,
which include receivables previously sold, amounted to $8,713
million at April 30, 1998 compared with $8,416 million at
October 31, 1997 and $7,615 million at April 30, 1997. At April
30, 1998, the unpaid balance of all retail notes previously sold
was $1,118 million compared with $1,515 million at October 31,
1997 and $856 million at April 30, 1997.
Total outside interest-bearing debt of the credit subsidiaries
was $6,217 million at April 30, 1998 compared with $5,686
million at the end of fiscal year 1997 and $5,797 million at
April 30, 1997. Total outside borrowings increased during the
first six months of 1998 and the last 12 months, generally
corresponding with the level of the financing receivable and
lease portfolio, the level of cash and cash equivalents and the
change in payables owed to the Equipment Operations. The credit
subsidiaries' ratio of total interest-bearing debt to
stockholder's equity was 6.9 to 1 at April 30, 1998 compared
with 6.6 to 1 at October 31, 1997 and 6.8 to 1 at April 30,
1997.
During the first six months of 1998, John Deere Capital
Corporation issued $200 million of 5.85% notes due in 2001 and
retired $150 million of floating rate notes due in 1998. The
Capital Corporation also issued $581 million and retired $158
million of medium-term notes during the first six months of
1998.
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<PAGE>
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 $5,316 million
at April 30, 1998, $934 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 totaling $3,500 million.
Stockholders' equity was $4,265 million at April 30, 1998
compared with $4,147 million at October 31, 1997 and $3,713
million at April 30, 1997. The increase of $118 million in the
first six months of 1998 resulted primarily from net income of
$568 million, partially offset by an increase in common stock in
treasury of $317 million related to the Company's stock
repurchase and employee benefit programs, dividends declared of
$109 million and a $22 million change in the cumulative
translation adjustment.
The Board of Directors at its meeting on May 27, 1998 declared a
quarterly dividend of 22 cents per share payable August 3, 1998
to stockholders of record on June 30, 1998.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
See the Company's most recent annual report filed on Form 10-K
(Item 7A). There has been no material change in this
information.
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<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note (10) to the Interim Financial Statements.
Item 2. Changes in Securities and Use of Proceeds
During the quarter, the Company issued 5,400 shares of
restricted stock as compensation to the Company's nonemployee
directors. These shares were not registered under the
Securities Act of 1933 pursuant to an exemption from
registration.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of stockholders held February 25, 1998,
the following directors were elected for terms expiring at the
annual meeting in 2001:
Votes For Votes Withheld
Hans W. Becherer 217,078,198 1,636,544
Antonio Madero B. 217,115,899 1,598,843
John R. Stafford 217,145,821 1,568,921
John R. Walter 217,115,247 1,599,495
John R. Block, Regina E. Herzlinger and Arnold R. Weber continue
to serve as directors of the Company for terms expiring at the
annual meeting in 1999.
Leonard A. Hadley, Samuel C. Johnson, Arthur L. Kelly and
William A. Schreyer continue to serve as directors of the
Company for terms expiring at the annual meeting in 2000.
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 February 17, 1998 (Item 7).
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<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: June 8, 1998 By s/ Nathan J. Jones
-------------------------
Nathan J. Jones
Senior Vice President,
Principal Financial Officer
and Principal Accounting
Officer
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<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
2 Not applicable
3 Not applicable
4.1 Amended and restated credit agreements among the
registrant, John Deere Capital Corporation, various
financial institutions and The Chase Manhattan Bank,
Bank of America National Trust and Savings
Association, Deutsche Bank AG New York Branch, The
Toronto-Dominion Bank, Morgan Guaranty Trust Company
of New York, Nationsbank, N. A. and The First
National Bank of Chicago as Managing Agents dated as
of February 24, 1998.
4.2 Third Amending Agreements to Loan Agreements
among John Deere Limited, John Deere Credit Inc.,
various financial institutions and The Toronto-
Dominion Bank as agent, dated as of
February 24, 1998.
10 Not applicable
11 Not applicable
12 Computation of ratio of earnings to
fixed charges
15 Not applicable
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
24 Not applicable
27 Financial data schedule
99 Not applicable
Page 29
EXHIBIT 4.1
_______________________________________________________________
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
______________________________
$3,500,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 24, 1998
(Amending and Restating the $3,500,000,000
Amended and Restated Credit Agreement,
dated as of February 25, 1997)
______________________________
THE CHASE MANHATTAN BANK,
as Administrative Agent, as Auction Agent
and as a Managing Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as Documentation Agent and as a Managing Agent
DEUTSCHE BANK AG NEW YORK BRANCH,
as Syndication Agent and as a Managing Agent
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent and as a Managing Agent
_______________________________________________________________
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February
24, 1998 (amending and restating the $3,500,000,000 Amended and
Restated Credit Agreement, dated as of February 25, 1997), among
(a) DEERE & COMPANY, a Delaware corporation (the "Company"), (b)
JOHN DEERE CAPITAL CORPORATION, a Delaware corporation (the
"Capital Corporation"), (c) the several financial institutions
parties hereto (collectively, the "Banks", and individually, a
"Bank"), (d) THE CHASE MANHATTAN BANK, as administrative agent
hereunder (in such capacity, the "Administrative Agent") and as
auction agent hereunder (in such capacity, the "Auction Agent"),
(e) BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
documentation agent hereunder (in such capacity, the
"Documentation Agent"), (f) DEUTSCHE BANK AG NEW YORK BRANCH
(the successor to Deutsche Bank AG Chicago Branch), as
syndication agent hereunder (in such capacity, the "Syndication
Agent"), (g) THE TORONTO-DOMINION BANK, as Canadian
administrative agent hereunder (in such capacity, the "Canadian
Administrative Agent"), (h) THE CHASE MANHATTAN BANK, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, DEUTSCHE BANK AG
NEW YORK BRANCH (the successor to Deutsche Bank AG Chicago
Branch), THE TORONTO-DOMINION BANK, MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, NATIONSBANK, N.A. and THE FIRST NATIONAL
BANK OF CHICAGO as managing agents (collectively, the "Managing
Agents"), and (i) the co-agents identified on the signature
pages hereof (collectively, the "Co-Agents").
W I T N E S S E T H :
WHEREAS, pursuant to the $3,500,000,000 Amended and Restated
Credit Agreement, dated as of February 25, 1997 (the "Existing
Credit Agreement"), among the Borrowers, the Banks, the Agents,
the Managing Agents and the Co-Agents, the Banks parties thereto
have agreed to extend credit to the Borrowers;
WHEREAS, the Borrowers have requested that the Existing
Credit Agreement be amended and restated as hereinafter
provided; and
WHEREAS, the Banks, the Agents, the Managing Agents and the
Co-Agents are willing to agree to such amendment and
restatement;
NOW, THEREFORE, the parties hereto hereby agree that on the
Second Amendment and Restatement Effective Date the Existing
Credit Agreement will be amended and restated in its entirety as
follows:
SUBSECTIONS 1.1 THROUGH 10.7
Subsections 1.1 through 10.7 of the Existing Credit
Agreement, in each case with their respective existing
subsection and Section designations, are hereby incorporated
herein by reference as if set forth in full herein, except that,
for purposes of such incorporation by reference:
Page 1
<PAGE>
(a) Subsection 1.1 of the Existing Credit Agreement shall
be deemed amended by (i) deleting the definitions of "Agreement"
and "Termination Date" in their entirety and (ii) inserting the
following definitions in correct alphabetical order:
"`Agreement': this Amended and Restated Credit
Agreement, dated as of February 24, 1998, as amended,
supplemented or modified from time to time.
`Second Amendment and Restatement Effective Date': the
date on which each of the conditions precedent specified in
subsection 4.4 shall have been satisfied. The Administrative
Agent shall notify each Bank of the Second Amendment and
Restatement Effective Date.
`Termination Date': the fifth anniversary of the Second
Amendment and Restatement Effective Date or such later date as
shall be determined pursuant to the provisions of subsection
2.16 with respect to non-Objecting Banks."
(b) Subsection 2.12(b)(i) of the Existing Credit Agreement
shall be deemed amended by inserting immediately following the
words "in respect of Committed Rate Loans" the following:
"(subject to the provisions of subsection 2.21(e))".
(c) Section 2 of the Existing Credit Agreement shall be
deemed amended by adding thereto the following new subsection
2.21:
"2.21 Commitment Increases. (a) At any time after the
Second Amendment and Restatement Effective Date, provided that
no Event of Default shall have occurred and be continuing, the
Borrowers may request an increase of the aggregate Commitments
by notice to the Administrative Agent in writing of the amount
(the "Offered Increase Amount") of such proposed increase (such
notice, a "Commitment Increase Notice"). Any such Commitment
Increase Notice must offer each Bank the opportunity to
subscribe for its pro rata share of the increased Commitments;
provided, however, the Borrowers may, with the consent of the
Administrative Agent (which consent shall not be unreasonably
withheld or delayed), without offering to each Bank the
opportunity to subscribe for its pro rata share of the increased
Commitments, offer to any bank or other financial institution
that is not an existing Bank the opportunity to provide a new
Commitment pursuant to paragraph (b) below if the aggregate
amount of all Commitments made hereunder pursuant to this
proviso which will be in effect when such new Commitment becomes
effective does not exceed $875,000,000. If any portion of the
increased Commitments offered to the Banks as contemplated in
the immediately preceding sentence is not subscribed for by the
Banks, the Borrowers may, with the consent of the Administrative
Agent as to any bank or financial institution that is not at
such time a Bank (which consent shall not be unreasonably
withheld or delayed), offer to any existing Bank or to one or
more additional banks or financial institutions the opportunity
to provide all or a portion of such unsubscribed portion of the
increased Commitments pursuant to paragraph (b) below.
Page 2
<PAGE>
(b) Any additional bank or financial institution that
the Borrowers select to offer the opportunity to provide any
portion of the increased Commitments, and that elects to become
a party to this Agreement and provide a Commitment, shall
execute a New Bank Supplement with the Borrowers and the
Administrative Agent, substantially in the form of Exhibit N (a
"New Bank Supplement"), whereupon such bank or financial
institution (a "New Bank") shall become a Bank for all purposes
and to the same extent as if originally a party hereto and shall
be bound by and entitled to the benefits of this Agreement, and
Schedule II shall be deemed to be amended to add the name and
Commitment of such New Bank, provided that the Commitment of any
such New Bank shall be in an amount not less than $10,000,000.
(c) Any Bank that accepts an offer to it by the
Borrowers to increase its Commitment pursuant to this subsection
2.21 shall, in each case, execute a Commitment Increase
Supplement with the Borrowers and the Administrative Agent,
substantially in the form of Exhibit O (a "Commitment Increase
Supplement"), whereupon such Bank (an "Increasing Bank") shall
be bound by and entitled to the benefits of this Agreement with
respect to the full amount of its Commitment as so increased,
and Schedule II shall be deemed to be amended to so increase the
Commitment of such Bank.
(d) The effectiveness of any New Bank Supplement or
Commitment Increase Supplement shall be contingent upon receipt
by the Administrative Agent of such corporate resolutions of the
Borrowers and legal opinions of counsel to the Borrowers as the
Administrative Agent shall reasonably request with respect
thereto and, if a New Bank Supplement indicates that the
relevant New Bank shall be a Tranche B Bank or if the Increasing
Bank is a Tranche B Bank, upon receipt by the Canadian
Administrative Agent of such corporate resolutions of the
Borrowers under the Linked Agreement (the "Linked Borrowers")
and legal opinions of counsel to the Linked Borrowers as the
Canadian Administrative Agent shall reasonably request with
respect thereto.
(e) (i) Except as otherwise provided in subparagraphs
(ii) and (iii) of this paragraph (e), if any bank or financial
institution becomes a New Bank pursuant to subsection 2.21(b) or
any Bank's Commitment is increased pursuant to subsection
2.21(c), additional Committed Rate Loans made on or after the
date of the effectiveness thereof (the "Re-Allocation Date")
shall be made in accordance with the pro rata provisions of
subsection 2.12(b) based on the Commitment Percentages in effect
on and after such Re-Allocation Date (except to the extent that
any such pro rata borrowings would result in any Bank making an
aggregate principal amount of Committed Rate Loans in excess of
its Commitment, in which case such excess amount will be
allocated to, and made by, the relevant New Banks and Increasing
Banks to the extent of, and in accordance with the pro rata
provisions of subsection 2.12(b) based on, their respective
Commitments). On each Re-Allocation Date, the Administrative
Agent shall deliver a notice to each Bank of the adjusted
Commitment Percentages after giving effect to any increase in
the aggregate Commitments made pursuant to this Section 2.21 on
such Re-Allocation Date.
Page 3
<PAGE>
(ii) In the event that on any such Re-Allocation
Date there is an unpaid principal amount of ABR Loans, the
applicable Borrower shall make prepayments thereof and one or
both Borrowers shall make borrowings of ABR Loans and/or
Eurodollar Loans, as the applicable Borrower shall determine, so
that, after giving effect thereto, the ABR Loans and Eurodollar
Loans outstanding are held as nearly as may be in accordance
with the pro rata provisions of subsection 2.12(b) based on such
new Commitment Percentages.
(iii) In the event that on any such Re-Allocation
Date there is an unpaid principal amount of Eurodollar Loans,
such Eurodollar Loans shall remain outstanding with the
respective holders thereof until the expiration of their
respective Interest Periods (unless the applicable Borrower
elects to prepay any thereof in accordance with the applicable
provisions of this Agreement), and on the last day of the
respective Interest Periods the applicable Borrower shall make
prepayments thereof and one or both Borrowers shall make
borrowings of ABR Loans and/or Eurodollar Loans so that, after
giving effect thereto, the ABR Loans and Eurodollar Loans
outstanding are held as nearly as may be in accordance with the
pro rata provisions of subsection 2.12(b) based on such new
Commitment Percentages.
(f) Notwithstanding anything to the contrary in this
subsection 2.21, (i) in no event shall any transaction effected
pursuant to this subsection 2.21 cause the aggregate Commitments
to exceed $4,900,000,000, (ii) the Commitment of an individual
Bank shall not, as a result of providing a new Commitment or of
increasing its existing Commitment pursuant to this subsection
2.21, exceed 15% of the aggregate Commitments on any Re-
Allocation Date and (iii) no Bank shall have any obligation to
increase its Commitment unless it agrees to do so in its sole
discretion.
(g) The Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent in exchange for the
surrendered Notes of any Bank, if any, new Notes to the order of
such Bank, if requested, in an amount equal to the Commitment of
such Bank after giving effect to any increase in such Bank's
Commitment."
(d) Section 3 of the Existing Credit Agreement shall be
deemed amended by (i) deleting the date "October 31, 1996"
contained in the first sentence of subsection 3.1 of the
Existing Credit Agreement and substituting in lieu thereof the
date "October 31, 1997" and (ii) adding thereto the following
new subsection 3.12:
"3.12 Representations and Warranties on Second
Amendment and Restatement Effective Date. The representations
and warranties made by such Borrower in subsections 3.1 through
3.10 are true and correct in all material respects on and as of
the Second Amendment and Restatement Effective Date, as if made
on and as of the Second Amendment and Restatement Effective
Date, except to the extent such representations and warranties
expressly relate to an earlier date."
(e) Section 4 of the Existing Credit Agreement shall be
deemed amended by deleting the introductory clause of subsection
4.2 of the Existing Credit Agreement and substituting in lieu
thereof the following:
Page 4
<PAGE>
"Conditions of Loans. The obligation of each Bank to
make any Loans (which shall include the initial Loan to be made
by it hereunder but shall not include any Loan made pursuant to
subsection 2.21(e)(ii) or (iii) if, after the making of such
Loan and the application of the proceeds thereof, the aggregate
outstanding principal amount of the Committed Rate Loans would
not be increased) to be made by it hereunder is subject to the
satisfaction of the following conditions precedent:"
(f) Section 4 of the Existing Credit Agreement shall be
deemed further amended by adding thereto the following new
subsection 4.4:
"4.4 Conditions to Second Amendment and Restatement
Effective Date. The Second Amendment and Restatement Effective
Date shall be the date of satisfaction of the following
conditions precedent:
(a) Counterparts. The Administrative Agent shall have
received counterparts hereof, executed by all of the parties
hereto.
(b) Resolutions. The Administrative Agent shall have
received, with a counterpart for each Bank, resolutions,
certified by the Secretary or an Assistant Secretary of each
Borrower, in form and substance satisfactory to the
Administrative Agent, adopted by the Board of Directors of such
Borrower authorizing the execution of this Agreement and the
performance of its obligations hereunder and any borrowings
hereunder from time to time.
(c) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Bank, an opinion of
Frank S. Cottrell, Esq., or his successor, as general counsel,
or an associate general counsel, for each of the Borrowers,
dated the Second Amendment and Restatement Effective Date and
addressed to the Agents and the Banks, substantially in the form
of the opinion of such counsel rendered on the Amendment and
Restatement Effective Date with changes therein to reflect that
such opinion is in respect of this Agreement and is rendered on
the Second Amendment and Restatement Effective Date, and an
opinion of Shearman & Sterling, special counsel to the
Borrowers, dated the Second Amendment and Restatement Effective
Date and addressed to the Agents and the Banks, substantially in
the form of the opinion of such counsel rendered on the
Amendment and Restatement Effective Date with changes therein to
reflect that such opinion is in respect of this Agreement and is
rendered on the Second Amendment and Restatement Effective Date.
Such opinions shall also cover such other matters incident to
the transactions contemplated by this Agreement as the
Administrative Agent shall reasonably require.
(d) Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Bank, a
certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of the
officers of such Borrower authorized to sign this Agreement,
together with evidence of the incumbency of such Secretary or
Assistant Secretary.
Page 5
<PAGE>
(e) Repayment of Amounts Under Existing Credit
Agreement. The Administrative Agent shall have received
evidence satisfactory to it that (i) all principal of and
interest on Loans, if any, outstanding under the Existing
Agreement shall have been repaid in full and (ii) all other
amounts payable under the Existing Credit Agreement to any Bank
that is a party to the Existing Credit Agreement but is not a
party to this Agreement shall have been paid in full.
(f) Additional Matters. All other documents which the
Administrative Agent may reasonably request in connection with
the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the
Administrative Agent and its counsel."
(g) Subsection 10.5(d) of the Existing Credit Agreement
shall be deemed amended by (i) inserting immediately following
the words "("Purchasing Banks")," in the first sentence thereof
the following: "all or" and (ii) inserting immediately following
the words "sell any portion" in the last sentence thereof the
following: "(less than 100%)".
SUBSECTIONS 10.8 THROUGH 10.12
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrowers and the
Administrative Agent.
10.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
10.10 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against the Borrowers with respect
to this Agreement may be brought in any state or federal court
of competent jurisdiction in the State of New York, and, by
execution and delivery of this Agreement, the Borrowers accept,
for themselves and in connection with their properties,
generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agree to be bound by any
final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available.
The Borrowers irrevocably agree that all process in any such
proceedings in any such court may be effected by mailing a copy
thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to them at their
addresses set forth in subsection 10.2 or at such other address
of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by the
Borrowers to be effective and binding service in every respect.
Page 6
<PAGE>
Each of the Borrowers, the Agents and the Banks irrevocably
waives any objection, including without limitation, any
objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the
right of any Agent or any Bank to bring proceedings against the
Borrowers in the courts of any other jurisdiction.
10.11 Schedule I and Exhibits. Schedule I and Exhibits A
through M of the Existing Credit Agreement are hereby
incorporated by reference as Schedule I and Exhibits A through M
hereto, respectively. For purposes of such incorporation by
reference, such Exhibits shall be deemed modified to incorporate
any modifications made pursuant to this Agreement.
10.12 Exiting Banks. Each Bank which after the Second
Amendment and Restatement Effective Date no longer holds a
Commitment (an "Exiting Bank") is executing this Agreement
solely for the purpose of acknowledging that its Commitment will
terminate on the Second Amendment and Restatement Effective Date
upon repayment in full of all amounts owing to it under the
Existing Credit Agreement on the Second Amendment and
Restatement Effective Date. The modifications effected by this
Agreement are being approved by Banks holding 100% of the
Commitments after giving effect to termination of the
Commitments of the Exiting Banks on the Second Amendment and
Restatement Effective Date. On the Second Amendment and
Restatement Effective Date, the Borrowers shall effect such
borrowings and repayments among the Banks (which need not be pro
rata among the Banks) so that, after giving effect thereto, the
respective principal amounts of the Committed Rate Loans held by
the Banks shall be pro rata according to their respective
Commitment Percentages, as amended hereby, the Borrowers being
obligated to pay any amounts due pursuant to subsection 2.14 of
this Agreement in connection with such prepayments.
Page 7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
above written.
DEERE & COMPANY
Attested by:
/s/ Melvin C. Short, Jr. By: /s/ Nathan J. Jones
- -------------------------- ------------------------
Title: Assistant Secretary Title: Senior Vice President
JOHN DEERE CAPITAL CORPORATION
Attested by:
/s/ Timur Gok By: /s/ Nathan J. Jones
- -------------------------- ------------------------
Title: Assistant Secretary Title: Senior Vice President
Page 8
<PAGE>
THE CHASE MANHATTAN BANK,
as Administrative Agent, as Auction
Agent, as a Managing Agent and as a Bank
By: /s/ Robert W. Matthews
--------------------------
Title: Vice President
BANK OF AMERICA NT & SA,
as Documentation Agent,
as a Managing Agent and as a Bank
By: /s/ James E. Florczak
--------------------------
Title: Managing Director
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Syndication Agent and as a Managing Agent
By: /s/ Stephan A. Wiedemann
--------------------------
Title: Director
By: /s/ Andreas Neumeier
--------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCHES, as a Bank
By: /s/ Stephan A. Wiedemann
--------------------------
Title: Director
By: /s/ Andreas Neumeier
--------------------------
Title: Vice President
Page 9
<PAGE>
THE TORONTO-DOMINION BANK, as Canadian
Administrative Agent and as a Managing Agent
By: /s/ David G. Parker
--------------------------
Title: Manager Credit Administration
TORONTO DOMINION (TEXAS), INC.,
as a Bank
By: /s/ Neva Nesbitt
--------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent and as a Bank
By: /s/ Barry Litwin
--------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as a Managing Agent and as a Bank
By: /s/ Christopher C. Kunhardt
--------------------------
Title: Vice President
NATIONSBANK N.A.,
as a Managing Agent and as a Bank
By: /s/ Mary Carol Daly
--------------------------
Title: Vice President
Page 10
<PAGE>
ABN AMRO BANK N.V.,
as a Co-Agent and as a Bank
By: /s/ John L. Church
--------------------------
Title: Vice President
By: /s/ Angela Reitz
--------------------------
Title: Vice President
THE BANK OF NEW YORK,
as a Co-Agent and as a Bank
By: /s/ William A. O'Daly
--------------------------
Title: Vice President
CREDIT AGRICOLE INDOSUEZ,
as a Co-Agent and as a Bank
By: /s/ Alain Butzbach
--------------------------
Title: Executive Vice President
Deputy General Manager - USA
By: /s/ Dean Balice
--------------------------
Title: Senior Vice President
Branch Manager
ROYAL BANK OF CANADA,
as a Co-Agent and as a Bank
By: /s/ Patrick K. Shields
--------------------------
Title: Senior Manager
Page 11
<PAGE>
SOCIETE GENERALE, CHICAGO BRANCH,
as a Co-Agent and as a Bank
By: /s/ Eric E. O. Siebert, Jr.
--------------------------
Title: Corporate Banking Manager - Midwest
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH
By: /s/ Hajime Watanabe
--------------------------
Title: Deputy General Manager
BANQUE NATIONALE DE PARIS
By: /s/ Frederick Moryl, Jr.
--------------------------
Title: Senior Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Timothy Doyle
--------------------------
Title: Managing Director CIBC Oppenheimer Corp. AS AGENT
COMMONWEALTH BANK OF AUSTRALIA
By: /s/ Shakil Hussain
--------------------------
Title: Vice President
Page 12
<PAGE>
CREDIT SUISSE FIRST BOSTON
By: /s/ David W. Kratovil
--------------------------
Title: Director
By: /s/ Lynn Allegaert
--------------------------
Title: Vice President
MELLON BANK NA
By: /s/ Amy K. Marsh
--------------------------
Title: First Vice President
WACHOVIA BANK N.A.
By: /s/ Todd J. Eagle
--------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------
Title: Joint General Manager
LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/ Richard E. Stahl
--------------------------
Title: Executive Vice President
Page 13
<PAGE>
SCHEDULE II
COMMITMENTS
Bank Commitment
- ---- ----------
PART A:
- ------
The Chase Manhattan Bank $332,500,000
Bank of America National Trust and 262,500,000
Savings Association
Deutsche Bank AG New York and/or 262,500,000
Cayman Islands Branches
The First National Bank of Chicago 262,500,000
Morgan Guaranty Trust Company of New York 262,500,000
NationsBank, N.A. 262,500,000
ABN AMRO Bank N.V. 175,000,000
The Bank of New York 175,000,000
Credit Agricole Indosuez 175,000,000
Societe Generale 175,000,000
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch 87,500,000
Banque Nationale de Paris, Chicago Branch 87,500,000
Commonwealth Bank of Australia 87,500,000
Credit Suisse First Boston 87,500,000
Mellon Bank, N.A. 87,500,000
Wachovia Bank, N.A. 87,500,000
The Fuji Bank, Limited 52,500,000
The Long Term Credit Bank of Japan, Ltd. 52,500,000
Total $2,974,500,000
Part B:
- ------
Toronto Dominion (Texas), Inc. $262,500,000
Royal Bank of Canada 175,000,000
CIBC, Inc. 87,500,000
Total $525,000,000
<PAGE>
SCHEDULE III
ADDRESSES FOR NOTICES
The Chase Manhattan Bank
Attention: Peter Hayes
270 Park Avenue - 48th Floor
New York, New York 10017
Telephone: (212) 270-5698
Facsimile: (212) 270-1629
Bank of America NT & SA
Attention: Pamela Quebbeman
231 South LaSalle Street
Chicago, Illinois 60697
Telephone: (312) 828-3586
Facsimile: (312) 974-9626
Deutsche Bank AG, New York and/or
Cayman Islands Branches
Attention: Robert Wood
31 West 52nd Street
New York, New York 10019
Telephone: (212) 469-7839
Facsimile: (212) 469-8212
Toronto Dominion (Texas), Inc.
Attention: David G. Parker
909 Fannin, Suite 1700
Houston, Texas 77010
Telephone: (713) 653-8248
Facsimile: (713) 951-9921
with a copy to:
TD Securities (USA) Inc.
Attention: Bill Evenson
31 West 52nd Street
New York, New York 10019
Telephone: (212) 468-0593
Facsimile: (312) 262-1926
Page 1
<PAGE>
The First National Bank of Chicago
Attention: Cheryl McCabe
One First National Plaza
Suite 0088, 14th Floor
Chicago, Illinois 60670
Telephone: (312) 732-1230
Facsimile: (312) 732-5161
Morgan Guaranty Trust Company of New York
Attention: Patricia Merritt
60 Wall Street
22nd Floor
New York, New York 10260
Telephone: (212) 648-6744
Facsimile: (212) 648-5336
NationsBank, N.A.
Attention: Mary Carol Daly
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606
Telephone: (312) 234-5618
Facsimile: (312) 234-5601
ABN AMRO Bank N.V.
Attention: Loan Administration
135 South LaSalle Street, Suite 625
Chicago, Illinois 60674-9135
Telephone: (312) 904-2961
Facsimile: (312) 606-8435
The Bank of New York
Attention: Yvonne Forbes
One Wall Street
New York, New York 10286
Telephone: (212) 635-6691
Facsimile: (212) 635-7923
Page 2
<PAGE>
Credit Agricole Indosuez
Attention: Theodore D. Tice
55 East Monroe, Suite 4700
Chicago, Illinois 60603-5702
Telephone: (312) 917-7463
Facsimile: (312) 372-3455
Royal Bank of Canada
Grand Cayman (North America No. 1 Branch)
c/o New York Branch
Financial Square, 23rd Floor
32 Old Slip
New York, New York 10005-3531
for all matters except those related
to Bid Loans and Negotiated Rate Loans:
Attention: Manager, Loans Administration
Telephone: (212) 428-6204
Facsimile: (212) 428-2372
for matters related to Bid Loans
and Negotiated Rate Loans:
Attention: Irene Wanamaker
Telephone: (212) 428-6208
Facsimile: (212) 428-2310
with a copy to:
Royal Bank of Canada
Attention: P.K. Shields
One North Franklin Street, Suite 700
Chicago, Illinois 60606
Telephone: (312) 551-1612
Facsimile: (312) 551-0805
Societe Generale
Attention: Eric E.O. Siebert, Jr.
181 West Madison, Suite 3400
Chicago, Illinois 60602
Telephone: (312) 578-5003
Facsimile: (312) 578-5099
Page 3
<PAGE>
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch
Attention: Laura Kozlowski
Julie Galligan
227 West Monroe Street, Suite 2300
Chicago, Illinois 60606
Telephone: (312) 696-4709/4711
Facsimile: (312) 696-4532
Banque Nationale de Paris, Chicago Branch
Attention: Frederick H. Moryl, Jr.
209 South LaSalle Street
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
CIBC Inc.
Attention: Ken Auchter
2727 Paces Ferry Rd. Suite 1200
Atlanta, Georgia 30339
Telephone: (770) 319-4950
Facsimile: (770) 319-4841
Commonwealth Bank (New York)
Attention: Ian Phillips
599 Lexington Avenue
New York, New York 10022-6072
Telephone: (212) 848-9241
Facsimile: (212) 336-7772
Credit Suisse First Boston
Attention: Hazel Leslie
Risk Management
11 Madison Avenue
New York, New York 10010-3629
Telephone: (212) 325-9049
Facsimile: (212) 325-8316
Mellon Bank, N.A.
Attention: Ryan F. Busch
4355 One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Telephone: (412) 234-0733
Facsimile: (412) 236-1914
Page 4
<PAGE>
Wachovia Bank, N.A.
Attention: Keith L. Burson
70 West Madison Street, Suite 2440
Chicago, Illinois 60602
Telephone: (312) 795-4346
Facsimile: (312) 853-0693
The Fuji Bank, Limited
Attention: Jim Bell
225 West Wacker Drive
Suite 2000
Chicago, Illinois 60606
Telephone: (312) 621-0526
Facsimile: (312) 621-0539
The Long-Term Credit Bank of Japan, Ltd.
Attention: John Carley
190 South LaSalle Street
Suite 800
Chicago, Illinois 60603
Telephone: (312) 853-9516
Facsimile: (312) 704-8505
Page 5
<PAGE>
EXHIBIT N
FORM OF
NEW BANK SUPPLEMENT
SUPPLEMENT, dated _______ __, to the $3,500,000,000 Amended
and Restated Credit Agreement (as in effect on the date hereof,
the "Credit Agreement") dated as of February 24, 1998, among
Deere & Company (the "Company"), John Deere Capital Corporation,
the banks and other financial institutions from time to time
party thereto (each a "Bank," and together the "Banks"), The
Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") and as Auction Agent (in such
capacity, the "Auction Agent") for the Banks, Bank of America
National Trust and Savings Association, as Documentation Agent,
Deutsche Bank AG New York Branch, as Syndication Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, the
Managing Agents named therein and the Co-Agents named therein.
Unless the context otherwise requires, all capitalized terms
used herein without definition shall have the meanings ascribed
to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Credit Agreement provides in Section 2.21
thereof that any bank or financial institution, although not
originally a party thereto, may become a party to the Credit
Agreement in accordance with the terms thereof by executing and
delivering to the Borrowers and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of
this Supplement; and
WHEREAS, the undersigned was not an original party to the
Credit Agreement but now desires to become a party thereto;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of
the Credit Agreement and agrees that it shall, on the date this
Supplement is accepted by the Borrowers and the Administrative
Agent, become a Tranche [A] [B] Bank for all purposes of the
Credit Agreement to the same extent as if originally a party
thereto, with a Commitment of $__________________.
2. The undersigned (a) represents and warrants that it is
legally authorized to enter into this Supplement; (b) confirms
that it has received a copy of the Credit Agreement, together
with copies of the financial statements delivered pursuant to
Section 5.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and
decision to enter into this Supplement; (c) agrees that it has
made and will, independently and without reliance upon any
Agent, Managing Agent or Co-Agent or any other Bank and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or any instrument
or document furnished pursuant hereto or thereto; (d) appoints
Page N-1
<PAGE>
and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers
and discretion under the Credit Agreement or any instrument or
document furnished pursuant hereto or thereto as are delegated
to the Administrative Agent by the terms thereof, together with
such powers as are incidental thereto; (e) appoints and
authorizes the Auction Agent to take such action as auction
agent on its behalf and to exercise such powers and discretion
under the Credit Agreement or any instrument or document
furnished pursuant hereto or thereto as are delegated to the
Auction Agent by the terms thereof, together with such powers as
are incidental thereto; and (f) agrees that it will be bound by
the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a
Bank including, without limitation, its obligation pursuant to
subsection 2.17(c) of the Credit Agreement.
3. The undersigned's address for notices for the purposes
of the Credit Agreement is as follows:
_______________________________
Attention:_____________________
_______________________________
_______________________________
Fax:___________________________
IN WITNESS WHEREOF, the undersigned has caused this
Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF NEW BANK]
By: _________________________
Title:
Accepted this _____ day of
____________________, ____
DEERE & COMPANY
By:_________________________
Title:
Page N-2
<PAGE>
JOHN DEERE CAPITAL CORPORATION
By:_________________________
Title:
Accepted this _____ day of
____________________, ____
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Title:
Page N-3
<PAGE>
EXHIBIT O
FORM OF
COMMITMENT INCREASE SUPPLEMENT
SUPPLEMENT, dated _______ __, to the $3,500,000,000 Amended
and Restated Credit Agreement (as in effect on the date hereof,
the "Credit Agreement") dated as of February 24, 1998, among
Deere & Company (the "Company"), John Deere Capital Corporation,
the banks and other financial institutions from time to time
party thereto (each a "Bank," and together the "Banks"), The
Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") and as Auction Agent (in such
capacity, the "Auction Agent") for the Banks, Bank of America
National Trust and Savings Association, as Documentation Agent,
Deutsche Bank AG New York Branch, as Syndication Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, the
Managing Agents named therein and the Co-Agents named therein.
Unless the context otherwise requires, all capitalized terms
used herein without definition shall have the meanings ascribed
to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 2.21 of the
Credit Agreement, the undersigned may increase the amount of its
Commitment in accordance with the terms thereof by executing and
delivering to the Borrowers and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of
this Supplement; and
WHEREAS, the undersigned now desires to increase the amount
of its Commitment under the Credit Agreement;
NOW THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees, subject to the terms and
conditions of the Credit Agreement, that on the date this
Supplement is accepted by the Borrowers and the Administrative
Agent it shall have its Commitment increased by $______________,
thereby making the amount of its Commitment $______________.
IN WITNESS WHEREOF, the undersigned has caused this
Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF NEW BANK]
By: _________________________
Title:
Page O-1
<PAGE>
Accepted this _____ day of
____________________, ____
DEERE & COMPANY
By:_________________________
Title:
JOHN DEERE CAPITAL CORPORATION
By:_________________________
Title:
Accepted this _____ day of
____________________, ____
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Title:
Page O-2
_______________________________________________________________
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
______________________________
$1,500,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 24, 1998
(Amending and Restating the $500,000,000
Amended and Restated Credit Agreement,
dated as of February 25, 1997)
______________________________
THE CHASE MANHATTAN BANK,
as Administrative Agent, as Auction Agent
and as a Managing Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as Documentation Agent and as a Managing Agent
DEUTSCHE BANK AG NEW YORK BRANCH,
as Syndication Agent and as a Managing Agent
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent and as a Managing Agent
_______________________________________________________________
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February
24, 1998 (amending and restating the $500,000,000 Amended and
Restated Credit Agreement, dated as of February 25, 1997), among
(a) DEERE & COMPANY, a Delaware corporation (the "Company"), (b)
JOHN DEERE CAPITAL CORPORATION, a Delaware corporation (the
"Capital Corporation"), (c) the several financial institutions
parties hereto (collectively, the "Banks", and individually, a
"Bank"), (d) THE CHASE MANHATTAN BANK, as administrative agent
hereunder (in such capacity, the "Administrative Agent") and as
auction agent hereunder (in such capacity, the "Auction Agent"),
(e) BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
documentation agent hereunder (in such capacity, the
"Documentation Agent"), (f) DEUTSCHE BANK AG NEW YORK BRANCH
(the successor to Deutsche Bank AG Chicago Branch), as
syndication agent hereunder (in such capacity, the "Syndication
Agent"), (g) THE TORONTO-DOMINION BANK, as Canadian
administrative agent hereunder (in such capacity, the "Canadian
Administrative Agent"), (h) THE CHASE MANHATTAN BANK, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, DEUTSCHE BANK AG
NEW YORK BRANCH (the successor to Deutsche Bank AG Chicago
Branch), THE TORONTO-DOMINION BANK, MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, NATIONSBANK, N.A. and THE FIRST NATIONAL
BANK OF CHICAGO as managing agents (collectively, the "Managing
Agents"), and (i) the co-agents identified on the signature
pages hereof (collectively, the "Co-Agents").
W I T N E S S E T H :
WHEREAS, pursuant to the $500,000,000 Amended and Restated
Credit Agreement, dated as of February 25, 1997 (the "Existing
Credit Agreement"), among the Borrowers, the Banks, the Agents,
the Managing Agents and the Co-Agents, the Banks parties thereto
have agreed to extend credit to the Borrowers;
WHEREAS, the Borrowers have requested that the Existing
Credit Agreement be amended and restated as hereinafter
provided; and
WHEREAS, the Banks, the Agents, the Managing Agents and the
Co-Agents are willing to agree to such amendment and
restatement;
NOW, THEREFORE, the parties hereto hereby agree that on the
Second Amendment and Restatement Effective Date the Existing
Credit Agreement will be amended and restated in its entirety as
follows:
SUBSECTIONS 1.1 THROUGH 10.7
Subsections 1.1 through 10.7 of the Existing Credit
Agreement, in each case with their respective existing
subsection and Section designations, are hereby incorporated
herein by reference as if set forth in full herein, except that,
for purposes of such incorporation by reference:
Page 1
<PAGE>
(a) Subsection 1.1 of the Existing Credit Agreement shall
be deemed amended by (i) deleting the definitions of "Agreement"
and "Termination Date" in their entirety and (ii) inserting the
following definitions in correct alphabetical order:
"`Agreement': this Amended and Restated Credit
Agreement, dated as of February 24, 1998, as amended,
supplemented or modified from time to time.
`Second Amendment and Restatement Effective Date': the
date on which each of the conditions precedent specified in
subsection 4.4 shall have been satisfied. The Administrative
Agent shall notify each Bank of the Second Amendment and
Restatement Effective Date.
`Termination Date': the date which is 364 days after
the Second Amendment and Restatement Effective Date or such
later date as shall be determined pursuant to the provisions of
subsection 2.16 with respect to non-Objecting Banks."
(b) Subsection 2.12(b)(i) of the Existing Credit Agreement
shall be deemed amended by inserting immediately following the
words "in respect of Committed Rate Loans" the following:
"(subject to the provisions of subsection 2.21(e))".
(c) Section 2 of the Existing Credit Agreement shall be
deemed amended by adding thereto the following new subsection
2.21:
"2.21 Commitment Increases. (a) At any time after the
Second Amendment and Restatement Effective Date, provided that
no Event of Default shall have occurred and be continuing, the
Borrowers may request an increase of the aggregate Commitments
by notice to the Administrative Agent in writing of the amount
(the "Offered Increase Amount") of such proposed increase (such
notice, a "Commitment Increase Notice"). Any such Commitment
Increase Notice must offer each Bank the opportunity to
subscribe for its pro rata share of the increased Commitments;
provided, however, the Borrowers may, with the consent of the
Administrative Agent (which consent shall not be unreasonably
withheld or delayed), without offering to each Bank the
opportunity to subscribe for its pro rata share of the increased
Commitments, offer to any bank or other financial institution
that is not an existing Bank the opportunity to provide a new
Commitment pursuant to paragraph (b) below if the aggregate
amount of all Commitments made hereunder pursuant to this
proviso which will be in effect when such new Commitment becomes
effective does not exceed $375,000,000. If any portion of the
increased Commitments offered to the Banks as contemplated in
the immediately preceding sentence is not subscribed for by the
Banks, the Borrowers may, with the consent of the Administrative
Agent as to any bank or financial institution that is not at
such time a Bank (which consent shall not be unreasonably
withheld or delayed), offer to any existing Bank or to one or
more additional banks or financial institutions the opportunity
to provide all or a portion of such unsubscribed portion of the
increased Commitments pursuant to paragraph (b) below.
Page 2
<PAGE>
(b) Any additional bank or financial institution that
the Borrowers select to offer the opportunity to provide any
portion of the increased Commitments, and that elects to become
a party to this Agreement and provide a Commitment, shall
execute a New Bank Supplement with the Borrowers and the
Administrative Agent, substantially in the form of Exhibit N (a
"New Bank Supplement"), whereupon such bank or financial
institution (a "New Bank") shall become a Bank for all purposes
and to the same extent as if originally a party hereto and shall
be bound by and entitled to the benefits of this Agreement, and
Schedule II shall be deemed to be amended to add the name and
Commitment of such New Bank, provided that the Commitment of any
such New Bank shall be in an amount not less than $10,000,000.
(c) Any Bank that accepts an offer to it by the
Borrowers to increase its Commitment pursuant to this subsection
2.21 shall, in each case, execute a Commitment Increase
Supplement with the Borrowers and the Administrative Agent,
substantially in the form of Exhibit O (a "Commitment Increase
Supplement"), whereupon such Bank (an "Increasing Bank") shall
be bound by and entitled to the benefits of this Agreement with
respect to the full amount of its Commitment as so increased,
and Schedule II shall be deemed to be amended to so increase the
Commitment of such Bank.
(d) The effectiveness of any New Bank Supplement or
Commitment Increase Supplement shall be contingent upon receipt
by the Administrative Agent of such corporate resolutions of the
Borrowers and legal opinions of counsel to the Borrowers as the
Administrative Agent shall reasonably request with respect
thereto and, if a New Bank Supplement indicates that the
relevant New Bank shall be a Tranche B Bank or if the Increasing
Bank is a Tranche B Bank, upon receipt by the Canadian
Administrative Agent of such corporate resolutions of the
Borrowers under the Linked Agreement (the "Linked Borrowers")
and legal opinions of counsel to the Linked Borrowers as the
Canadian Administrative Agent shall reasonably request with
respect thereto.
(e) (i) Except as otherwise provided in subparagraphs
(ii) and (iii) of this paragraph (e), if any bank or financial
institution becomes a New Bank pursuant to subsection 2.21(b) or
any Bank's Commitment is increased pursuant to subsection
2.21(c), additional Committed Rate Loans made on or after the
date of the effectiveness thereof (the "Re-Allocation Date")
shall be made in accordance with the pro rata provisions of
subsection 2.12(b) based on the Commitment Percentages in effect
on and after such Re-Allocation Date (except to the extent that
any such pro rata borrowings would result in any Bank making an
aggregate principal amount of Committed Rate Loans in excess of
its Commitment, in which case such excess amount will be
allocated to, and made by, the relevant New Banks and Increasing
Banks to the extent of, and in accordance with the pro rata
provisions of subsection 2.12(b) based on, their respective
Commitments). On each Re-Allocation Date, the Administrative
Agent shall deliver a notice to each Bank of the adjusted
Commitment Percentages after giving effect to any increase in
the aggregate Commitments made pursuant to this Section 2.21 on
such Re-Allocation Date.
Page 3
<PAGE>
(ii) In the event that on any such Re-Allocation
Date there is an unpaid principal amount of ABR Loans, the
applicable Borrower shall make prepayments thereof and one or
both Borrowers shall make borrowings of ABR Loans and/or
Eurodollar Loans, as the applicable Borrower shall determine, so
that, after giving effect thereto, the ABR Loans and Eurodollar
Loans outstanding are held as nearly as may be in accordance
with the pro rata provisions of subsection 2.12(b) based on such
new Commitment Percentages.
(iii) In the event that on any such Re-Allocation
Date there is an unpaid principal amount of Eurodollar Loans,
such Eurodollar Loans shall remain outstanding with the
respective holders thereof until the expiration of their
respective Interest Periods (unless the applicable Borrower
elects to prepay any thereof in accordance with the applicable
provisions of this Agreement), and on the last day of the
respective Interest Periods the applicable Borrower shall make
prepayments thereof and one or both Borrowers shall make
borrowings of ABR Loans and/or Eurodollar Loans so that, after
giving effect thereto, the ABR Loans and Eurodollar Loans
outstanding are held as nearly as may be in accordance with the
pro rata provisions of subsection 2.12(b) based on such new
Commitment Percentages.
(f) Notwithstanding anything to the contrary in this
subsection 2.21, (i) in no event shall any transaction effected
pursuant to this subsection 2.21 cause the aggregate Commitments
to exceed $2,100,000,000, (ii) the Commitment of an individual
Bank shall not, as a result of providing a new Commitment or of
increasing its existing Commitment pursuant to this subsection
2.21, exceed 15% of the aggregate Commitments on any Re-
Allocation Date and (iii) no Bank shall have any obligation to
increase its Commitment unless it agrees to do so in its sole
discretion.
(g) The Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent in exchange for the
surrendered Notes of any Bank, if any, new Notes to the order of
such Bank, if requested, in an amount equal to the Commitment of
such Bank after giving effect to any increase in such Bank's
Commitment."
(d) Section 3 of the Existing Credit Agreement shall be
deemed amended by (i) deleting the date "October 31, 1996"
contained in the first sentence of subsection 3.1 of the
Existing Credit Agreement and substituting in lieu thereof the
date "October 31, 1997" and (ii) adding thereto the following
new subsection 3.12:
"3.12 Representations and Warranties on Second
Amendment and Restatement Effective Date. The representations
and warranties made by such Borrower in subsections 3.1 through
3.10 are true and correct in all material respects on and as of
the Second Amendment and Restatement Effective Date, as if made
on and as of the Second Amendment and Restatement Effective
Date, except to the extent such representations and warranties
expressly relate to an earlier date."
(e) Section 4 of the Existing Credit Agreement shall be
deemed amended by deleting the introductory clause of subsection
4.2 of the Existing Credit Agreement and substituting in lieu
thereof the following:
Page 4
<PAGE>
"Conditions of Loans. The obligation of each Bank to
make any Loans (which shall include the initial Loan to be made
by it hereunder but shall not include any Loan made pursuant to
subsection 2.21(e)(ii) or (iii) if, after the making of such
Loan and the application of the proceeds thereof, the aggregate
outstanding principal amount of the Committed Rate Loans would
not be increased) to be made by it hereunder is subject to the
satisfaction of the following conditions precedent:"
(f) Section 4 of the Existing Credit Agreement shall be
deemed further amended by adding thereto the following new
subsection 4.4:
"4.4 Conditions to Second Amendment and Restatement
Effective Date. The Second Amendment and Restatement Effective
Date shall be the date of satisfaction of the following
conditions precedent:
(a) Counterparts. The Administrative Agent shall have
received counterparts hereof, executed by all of the parties
hereto.
(b) Resolutions. The Administrative Agent shall have
received, with a counterpart for each Bank, resolutions,
certified by the Secretary or an Assistant Secretary of each
Borrower, in form and substance satisfactory to the
Administrative Agent, adopted by the Board of Directors of such
Borrower authorizing the execution of this Agreement and the
performance of its obligations hereunder and any borrowings
hereunder from time to time.
(c) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Bank, an opinion of
Frank S. Cottrell, Esq., or his successor, as general counsel,
or an associate general counsel, for each of the Borrowers,
dated the Second Amendment and Restatement Effective Date and
addressed to the Agents and the Banks, substantially in the form
of the opinion of such counsel rendered on the Amendment and
Restatement Effective Date with changes therein to reflect that
such opinion is in respect of this Agreement and is rendered on
the Second Amendment and Restatement Effective Date, and an
opinion of Shearman & Sterling, special counsel to the
Borrowers, dated the Second Amendment and Restatement Effective
Date and addressed to the Agents and the Banks, substantially in
the form of the opinion of such counsel rendered on the
Amendment and Restatement Effective Date with changes therein to
reflect that such opinion is in respect of this Agreement and is
rendered on the Second Amendment and Restatement Effective Date.
Such opinions shall also cover such other matters incident to
the transactions contemplated by this Agreement as the
Administrative Agent shall reasonably require.
(d) Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Bank, a
certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of the
officers of such Borrower authorized to sign this Agreement,
together with evidence of the incumbency of such Secretary or
Assistant Secretary.
Page 5
<PAGE>
(e) Repayment of Amounts Under Existing Credit
Agreement. The Administrative Agent shall have received
evidence satisfactory to it that (i) all principal of and
interest on Loans, if any, outstanding under the Existing
Agreement shall have been repaid in full and (ii) all other
amounts payable under the Existing Credit Agreement to any Bank
that is a party to the Existing Credit Agreement but is not a
party to this Agreement shall have been paid in full.
(f) Additional Matters. All other documents which the
Administrative Agent may reasonably request in connection with
the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the
Administrative Agent and its counsel."
(g) Subsection 10.5(d) of the Existing Credit Agreement
shall be deemed amended by (i) inserting immediately following
the words "("Purchasing Banks")," in the first sentence thereof
the following: "all or" and (ii) inserting immediately following
the words "sell any portion" in the last sentence thereof the
following: "(less than 100%)".
SUBSECTIONS 10.8 THROUGH 10.12
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrowers and the
Administrative Agent.
10.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
10.10 Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against the Borrowers with respect
to this Agreement may be brought in any state or federal court
of competent jurisdiction in the State of New York, and, by
execution and delivery of this Agreement, the Borrowers accept,
for themselves and in connection with their properties,
generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agree to be bound by any
final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available.
The Borrowers irrevocably agree that all process in any such
proceedings in any such court may be effected by mailing a copy
thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to them at their
addresses set forth in subsection 10.2 or at such other address
of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by the
Borrowers to be effective and binding service in every respect.
Page 6
<PAGE>
Each of the Borrowers, the Agents and the Banks irrevocably
waives any objection, including without limitation, any
objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the
right of any Agent or any Bank to bring proceedings against the
Borrowers in the courts of any other jurisdiction.
10.11 Schedule I and Exhibits. Schedule I and Exhibits A
through M of the Existing Credit Agreement are hereby
incorporated by reference as Schedule I and Exhibits A through M
hereto, respectively. For purposes of such incorporation by
reference, such Exhibits shall be deemed modified to incorporate
any modifications made pursuant to this Agreement.
10.12 Exiting Banks. Each Bank which after the Second
Amendment and Restatement Effective Date no longer holds a
Commitment (an "Exiting Bank") is executing this Agreement
solely for the purpose of acknowledging that its Commitment will
terminate on the Second Amendment and Restatement Effective Date
upon repayment in full of all amounts owing to it under the
Existing Credit Agreement on the Second Amendment and
Restatement Effective Date. The modifications effected by this
Agreement are being approved by Banks holding 100% of the
Commitments after giving effect to termination of the
Commitments of the Exiting Banks on the Second Amendment and
Restatement Effective Date. On the Second Amendment and
Restatement Effective Date, the Borrowers shall effect such
borrowings and repayments among the Banks (which need not be pro
rata among the Banks) so that, after giving effect thereto, the
respective principal amounts of the Committed Rate Loans held by
the Banks shall be pro rata according to their respective
Commitment Percentages, as amended hereby, the Borrowers being
obligated to pay any amounts due pursuant to subsection 2.14 of
this Agreement in connection with such prepayments.
Page 7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
above written.
DEERE & COMPANY
Attested by:
/s/ Melvin C. Short, Jr. By: /s/ Nathan J. Jones
- -------------------------- ------------------------
Title: Assistant Secretary Title: Senior Vice President
JOHN DEERE CAPITAL CORPORATION
Attested by:
/s/ Timur Gok By: /s/ Nathan J. Jones
- -------------------------- ------------------------
Title: Assistant Secretary Title: Senior Vice President
Page 8
<PAGE>
THE CHASE MANHATTAN BANK,
as Administrative Agent, as Auction
Agent, as a Managing Agent and as a Bank
By: /s/ Robert W. Matthews
--------------------------
Title: Vice President
BANK OF AMERICA NT & SA,
as Documentation Agent,
as a Managing Agent and as a Bank
By: /s/ James E. Florczak
--------------------------
Title: Managing Director
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Syndication Agent and as a Managing Agent
By: /s/ Stephan A. Wiedemann
--------------------------
Title: Director
By: /s/ Andreas Neumeier
--------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCHES, as a Bank
By: /s/ Stephan A. Wiedemann
--------------------------
Title: Director
By: /s/ Andreas Neumeier
--------------------------
Title: Vice President
Page 9
<PAGE>
THE TORONTO-DOMINION BANK, as Canadian
Administrative Agent and as a Managing Agent
By: /s/ David G. Parker
--------------------------
Title: Manager Credit Administration
TORONTO DOMINION (TEXAS), INC.,
as a Bank
By: /s/ Neva Nesbitt
--------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Managing Agent and as a Bank
By: /s/ Barry Litwin
--------------------------
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as a Managing Agent and as a Bank
By: /s/ Christopher C. Kunhardt
--------------------------
Title: Vice President
NATIONSBANK N.A.,
as a Managing Agent and as a Bank
By: /s/ Mary Carol Daly
--------------------------
Title: Vice President
Page 10
<PAGE>
ABN AMRO BANK N.V.,
as a Co-Agent and as a Bank
By: /s/ John L. Church
--------------------------
Title: Vice President
By: /s/ Angela Reitz
--------------------------
Title: Vice President
THE BANK OF NEW YORK,
as a Co-Agent and as a Bank
By: /s/ William A. O'Daly
--------------------------
Title: Vice President
CREDIT AGRICOLE INDOSUEZ,
as a Co-Agent and as a Bank
By: /s/ Alain Butzbach
--------------------------
Title: Executive Vice President
Deputy General Manager - USA
By: /s/ Dean Balice
--------------------------
Title: Senior Vice President
Branch Manager
ROYAL BANK OF CANADA,
as a Co-Agent and as a Bank
By: /s/ Patrick K. Shields
--------------------------
Title: Senior Manager
Page 11
<PAGE>
SOCIETE GENERALE, CHICAGO BRANCH,
as a Co-Agent and as a Bank
By: /s/ Eric E. O. Siebert, Jr.
--------------------------
Title: Corporate Banking Manager - Midwest
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH
By: /s/ Hajime Watanabe
--------------------------
Title: Deputy General Manager
BANQUE NATIONALE DE PARIS
By: /s/ Frederick Moryl, Jr.
--------------------------
Title: Senior Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Timothy Doyle
--------------------------
Title: Managing Director CIBC Oppenheimer Corp. AS AGENT
COMMONWEALTH BANK OF AUSTRALIA
By: /s/ Shakil Hussain
--------------------------
Title: Vice President
Page 12
<PAGE>
CREDIT SUISSE FIRST BOSTON
By: /s/ David W. Kratovil
--------------------------
Title: Director
By: /s/ Lynn Allegaert
--------------------------
Title: Vice President
MELLON BANK NA
By: /s/ Amy K. Marsh
--------------------------
Title: First Vice President
WACHOVIA BANK N.A.
By: /s/ Todd J. Eagle
--------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------
Title: Joint General Manager
LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/ Richard E. Stahl
--------------------------
Title: Executive Vice President
Page 13
<PAGE>
SCHEDULE II
COMMITMENTS
Bank Commitment
- ---- ----------
PART A:
- ------
The Chase Manhattan Bank $142,500,000
Bank of America National Trust and 112,500,000
Savings Association
Deutsche Bank AG New York and/or 112,500,000
Cayman Islands Branches
The First National Bank of Chicago 112,500,000
Morgan Guaranty Trust Company of New York 112,500,000
NationsBank, N.A. 112,500,000
ABN AMRO Bank N.V. 75,000,000
The Bank of New York 75,000,000
Credit Agricole Indosuez 75,000,000
Societe Generale 75,000,000
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch 37,500,000
Banque Nationale de Paris, Chicago Branch 37,500,000
Commonwealth Bank of Australia 37,500,000
Credit Suisse First Boston 37,500,000
Mellon Bank, N.A. 37,500,000
Wachovia Bank, N.A. 37,500,000
The Fuji Bank, Limited 22,500,000
The Long Term Credit Bank of Japan, Ltd. 22,500,000
Total $1,275,000,000
Part B:
- ------
Toronto Dominion (Texas), Inc. $112,500,000
Royal Bank of Canada 75,000,000
CIBC, Inc. 37,500,000
Total $225,000,000
<PAGE>
SCHEDULE III
ADDRESSES FOR NOTICES
The Chase Manhattan Bank
Attention: Peter Hayes
270 Park Avenue - 48th Floor
New York, New York 10017
Telephone: (212) 270-5698
Facsimile: (212) 270-1629
Bank of America NT & SA
Attention: Pamela Quebbeman
231 South LaSalle Street
Chicago, Illinois 60697
Telephone: (312) 828-3586
Facsimile: (312) 974-9626
Deutsche Bank AG, New York and/or
Cayman Islands Branches
Attention: Robert Wood
31 West 52nd Street
New York, New York 10019
Telephone: (212) 469-7839
Facsimile: (212) 469-8212
Toronto Dominion (Texas), Inc.
Attention: David G. Parker
909 Fannin, Suite 1700
Houston, Texas 77010
Telephone: (713) 653-8248
Facsimile: (713) 951-9921
with a copy to:
TD Securities (USA) Inc.
Attention: Bill Evenson
31 West 52nd Street
New York, New York 10019
Telephone: (212) 468-0593
Facsimile: (312) 262-1926
Page 1
<PAGE>
The First National Bank of Chicago
Attention: Cheryl McCabe
One First National Plaza
Suite 0088, 14th Floor
Chicago, Illinois 60670
Telephone: (312) 732-1230
Facsimile: (312) 732-5161
Morgan Guaranty Trust Company of New York
Attention: Patricia Merritt
60 Wall Street
22nd Floor
New York, New York 10260
Telephone: (212) 648-6744
Facsimile: (212) 648-5336
NationsBank, N.A.
Attention: Mary Carol Daly
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606
Telephone: (312) 234-5618
Facsimile: (312) 234-5601
ABN AMRO Bank N.V.
Attention: Loan Administration
135 South LaSalle Street, Suite 625
Chicago, Illinois 60674-9135
Telephone: (312) 904-2961
Facsimile: (312) 606-8435
The Bank of New York
Attention: Yvonne Forbes
One Wall Street
New York, New York 10286
Telephone: (212) 635-6691
Facsimile: (212) 635-7923
Page 2
<PAGE>
Credit Agricole Indosuez
Attention: Theodore D. Tice
55 East Monroe, Suite 4700
Chicago, Illinois 60603-5702
Telephone: (312) 917-7463
Facsimile: (312) 372-3455
Royal Bank of Canada
New York Branch
Financial Square, 23rd Floor
32 Old Slip
New York, New York 10005-3531
for all matters except those related
to Bid Loans and Negotiated Rate Loans:
Attention: Manager, Loans Administration
Telephone: (212) 428-6204
Facsimile: (212) 428-2372
for matters related to Bid Loans
and Negotiated Rate Loans:
Attention: Irene Wanamaker
Telephone: (212) 428-6208
Facsimile: (212) 428-2310
with a copy to:
Royal Bank of Canada
Attention: P.K. Shields
One North Franklin Street, Suite 700
Chicago, Illinois 60606
Telephone: (312) 551-1612
Facsimile: (312) 551-0805
Societe Generale
Attention: Eric E.O. Siebert, Jr.
181 West Madison, Suite 3400
Chicago, Illinois 60602
Telephone: (312) 578-5003
Facsimile: (312) 578-5099
Page 3
<PAGE>
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch
Attention: Laura Kozlowski
Julie Galligan
227 West Monroe Street, Suite 2300
Chicago, Illinois 60606
Telephone: (312) 696-4709/4711
Facsimile: (312) 696-4532
Banque Nationale de Paris, Chicago Branch
Attention: Frederick H. Moryl, Jr.
209 South LaSalle Street
Chicago, Illinois 60604
Telephone: (312) 977-2211
Facsimile: (312) 977-1380
CIBC Inc.
Attention: Ken Auchter
2727 Paces Ferry Rd. Suite 1200
Atlanta, Georgia 30339
Telephone: (770) 319-4950
Facsimile: (770) 319-4841
Commonwealth Bank (New York)
Attention: Ian Phillips
599 Lexington Avenue
New York, New York 10022-6072
Telephone: (212) 848-9241
Facsimile: (212) 336-7772
Credit Suisse First Boston
Attention: Hazel Leslie
Risk Management
11 Madison Avenue
New York, New York 10010-3629
Telephone: (212) 325-9049
Facsimile: (212) 325-8316
Mellon Bank, N.A.
Attention: Ryan F. Busch
4355 One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Telephone: (412) 234-0733
Facsimile: (412) 236-1914
Page 4
<PAGE>
Wachovia Bank, N.A.
Attention: Keith L. Burson
70 West Madison Street, Suite 2440
Chicago, Illinois 60602
Telephone: (312) 795-4346
Facsimile: (312) 853-0693
The Fuji Bank, Limited
Attention: Jim Bell
225 West Wacker Drive
Suite 2000
Chicago, Illinois 60606
Telephone: (312) 621-0526
Facsimile: (312) 621-0539
The Long-Term Credit Bank of Japan, Ltd.
Attention: John Carley
190 South LaSalle Street
Suite 800
Chicago, Illinois 60603
Telephone: (312) 853-9516
Facsimile: (312) 704-8505
Page 5
<PAGE>
EXHIBIT N
FORM OF
NEW BANK SUPPLEMENT
SUPPLEMENT, dated _______ __, to the $1,500,000,000 Amended
and Restated Credit Agreement (as in effect on the date hereof,
the "Credit Agreement") dated as of February 24, 1998, among
Deere & Company (the "Company"), John Deere Capital Corporation,
the banks and other financial institutions from time to time
party thereto (each a "Bank," and together the "Banks"), The
Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") and as Auction Agent (in such
capacity, the "Auction Agent") for the Banks, Bank of America
National Trust and Savings Association, as Documentation Agent,
Deutsche Bank AG New York Branch, as Syndication Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, the
Managing Agents named therein and the Co-Agents named therein.
Unless the context otherwise requires, all capitalized terms
used herein without definition shall have the meanings ascribed
to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Credit Agreement provides in Section 2.21
thereof that any bank or financial institution, although not
originally a party thereto, may become a party to the Credit
Agreement in accordance with the terms thereof by executing and
delivering to the Borrowers and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of
this Supplement; and
WHEREAS, the undersigned was not an original party to the
Credit Agreement but now desires to become a party thereto;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of
the Credit Agreement and agrees that it shall, on the date this
Supplement is accepted by the Borrowers and the Administrative
Agent, become a Tranche [A] [B] Bank for all purposes of the
Credit Agreement to the same extent as if originally a party
thereto, with a Commitment of $__________________.
2. The undersigned (a) represents and warrants that it is
legally authorized to enter into this Supplement; (b) confirms
that it has received a copy of the Credit Agreement, together
with copies of the financial statements delivered pursuant to
Section 5.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and
decision to enter into this Supplement; (c) agrees that it has
made and will, independently and without reliance upon any
Agent, Managing Agent or Co-Agent or any other Bank and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or any instrument
or document furnished pursuant hereto or thereto; (d) appoints
Page N-1
<PAGE>
and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers
and discretion under the Credit Agreement or any instrument or
document furnished pursuant hereto or thereto as are delegated
to the Administrative Agent by the terms thereof, together with
such powers as are incidental thereto; (e) appoints and
authorizes the Auction Agent to take such action as auction
agent on its behalf and to exercise such powers and discretion
under the Credit Agreement or any instrument or document
furnished pursuant hereto or thereto as are delegated to the
Auction Agent by the terms thereof, together with such powers as
are incidental thereto; and (f) agrees that it will be bound by
the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a
Bank including, without limitation, its obligation pursuant to
subsection 2.17(c) of the Credit Agreement.
3. The undersigned's address for notices for the purposes
of the Credit Agreement is as follows:
_______________________________
Attention:_____________________
_______________________________
_______________________________
Fax:___________________________
IN WITNESS WHEREOF, the undersigned has caused this
Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF NEW BANK]
By: _________________________
Title:
Accepted this _____ day of
____________________, ____
DEERE & COMPANY
By:_________________________
Title:
Page N-2
<PAGE>
JOHN DEERE CAPITAL CORPORATION
By:_________________________
Title:
Accepted this _____ day of
____________________, ____
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Title:
Page N-3
<PAGE>
EXHIBIT O
FORM OF
COMMITMENT INCREASE SUPPLEMENT
SUPPLEMENT, dated _______ __, to the $1,500,000,000 Amended
and Restated Credit Agreement (as in effect on the date hereof,
the "Credit Agreement") dated as of February 24, 1998, among
Deere & Company (the "Company"), John Deere Capital Corporation,
the banks and other financial institutions from time to time
party thereto (each a "Bank," and together the "Banks"), The
Chase Manhattan Bank, as Administrative Agent (in such capacity,
the "Administrative Agent") and as Auction Agent (in such
capacity, the "Auction Agent") for the Banks, Bank of America
National Trust and Savings Association, as Documentation Agent,
Deutsche Bank AG New York Branch, as Syndication Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, the
Managing Agents named therein and the Co-Agents named therein.
Unless the context otherwise requires, all capitalized terms
used herein without definition shall have the meanings ascribed
to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 2.21 of the
Credit Agreement, the undersigned may increase the amount of its
Commitment in accordance with the terms thereof by executing and
delivering to the Borrowers and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of
this Supplement; and
WHEREAS, the undersigned now desires to increase the amount
of its Commitment under the Credit Agreement;
NOW THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees, subject to the terms and
conditions of the Credit Agreement, that on the date this
Supplement is accepted by the Borrowers and the Administrative
Agent it shall have its Commitment increased by $______________,
thereby making the amount of its Commitment $______________.
IN WITNESS WHEREOF, the undersigned has caused this
Supplement to be executed and delivered by a duly authorized
officer on the date first above written.
[NAME OF BANK]
By: _________________________
Title:
Page O-1
<PAGE>
Accepted this _____ day of
____________________, ____
DEERE & COMPANY
By:_________________________
Title:
JOHN DEERE CAPITAL CORPORATION
By:_________________________
Title:
Accepted this _____ day of
____________________, ____
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Title:
Page O-2
EXHIBIT 4.2
THIRD AMENDING AGREEMENT
This Amending Agreement made as of the 24th day of February, 1998
B E T W E E N :
JOHN DEERE LIMITED, a corporation incorporated under
the laws of Canada,
("Deere Canada")
OF THE FIRST PART
and -
JOHN DEERE CREDIT INC., a corporation amalgamated under
the laws of Canada,
("Deere Credit")
OF THE SECOND PART
and -
DEERE & COMPANY, a corporation incorporated under the
laws of the State of Delaware,
("Deere")
OF THE THIRD PART
CANADIAN IMPERIAL BANK OF COMMERCE,
ROYAL BANK OF CANADA and
THE TORONTO-DOMINION BANK,
(collectively, the "Lenders")
OF THE FOURTH PART
and -
THE TORONTO-DOMINION BANK,
(the "Agent")
OF THE FIFTH PART
<PAGE>
WHEREAS pursuant to the U.S.$612,500,000 loan agreement dated
as of April 5, 1995, as amended by a First Amending Agreement
made as of the 27th day of February, 1996 and by a Second
Amending Agreement made as of the 25th day of February, 1997 (the
"Loan Agreement"), between Deere Canada, Deere Credit (a
successor to John Deere Finance Limited), the Lenders and the
Agent, the Lenders agreed to make and have made Loans to the
Borrowers;
AND WHEREAS the Borrowers have requested that certain
provisions of the Loan Agreement be modified in the manner
provided for in this Agreement and the Lenders are willing to
agree to such modifications as provided for in this Agreement;
AND WHEREAS each of Deere Canada and Deere Credit has
guaranteed the obligations of the other under the Loan Agreement
pursuant to Guarantees dated as of April 5, 1995 in favour of the
Lenders and the Agent and the Lenders have required as a
condition of entering into this Agreement that Deere Canada and
Deere Credit confirm that such Guarantees are in full force and
effect, unamended;
AND WHEREAS Deere subordinated debts owing to it by Deere
Canada in favour of the Lenders pursuant to a Subordination
Agreement dated April 5, 1995 and the Lenders have required as a
condition of entering into this Agreement that Deere and Deere
Canada confirm that such Subordination Agreement is in full force
and effect, unamended;
NOW THEREFORE in consideration of the premises and in
consideration of other valuable consideration and the sum of
$1.00 now paid by each of the parties hereto to the others, the
receipt and sufficiency whereof is hereby acknowledged, the
parties agree as follows:
1. Defined Terms
All capitalized terms used and not defined herein have the
meanings ascribed to them in the Loan Agreement.
2. Certain Amendments to Loan Agreement
(a) The Loan Agreement is hereby amended by deleting the
reference to "U.S.$612,500,000" from the cover page thereof and
by deleting from the first recital thereto the words
"U.S.$612,500,000" and substituting in their place in the first
recital the words "the Credit Facility Amount";
(b) Section 1.1 of the Loan Agreement is hereby amended by:
(i) inserting the following definition in correct
alphabetical order: " "Third Amendment Effectiveness Date" means
the date on which the Third Amending Agreement made as of
February 24, 1998 becomes effective;";
Page 2
<PAGE>
(ii) deleting the definition of "Credit Facility" and
inserting the following in its place:
" "Credit Facility" means the credit facility in
the maximum principal amount equal to the aggregate Commitments,
which on the date hereof is U.S.$525,000,000, as the same may be
increased from time to time pursuant to section 2.21 of the USD
Agreement, which is being extended by the Lenders to the
Borrowers hereunder;";
(iii) deleting the definition of "Credit Facility
Amount" and inserting the following in its place:
" "Credit Facility Amount" means at any time the
aggregate amount of the Commitments at such time (which at the
date hereof is U.S.$525,000,000), as the same may be increased
from time to time pursuant to section 2.21 of the USD
Agreement;"; and
(c) Section 2.1 of the Loan Agreement is hereby amended by
deleting the reference to "U.S.$612,500,000" and substituting in
its place the words "the Credit Facility Amount" and inserting
immediately thereafter the words "as the same may be increased
from time to time pursuant to section 2.21 of the USD Agreement".
3. Conditions to Effectiveness
This Agreement shall become effective on the date on which
all of the following conditions precedent have been satisfied or
waived:
(a) execution and delivery of this Agreement by each
Borrower, each Guarantor, Deere, each Lender and the Agent;
(b) receipt by the Agent, with a counterpart for each
Lender, of a certificate of any Vice-President, the Secretary or
Assistant Secretary of each Borrower, each Guarantor and Deere,
dated the Third Amendment Effectiveness Date, certifying the
names and true signatures of the officers of such Borrowers,
Guarantors and Deere authorized to sign this Agreement, together
with evidence of the incumbency of such Vice-President, Secretary
or Assistant Secretary;
(c) receipt by the Agent, with a counterpart for each
Lender, of a copy of the resolutions in form and substance
satisfactory to the Agent, of the board of directors of each of
the Borrowers and the Guarantors authorizing the execution,
delivery and performance of this Agreement, certified by their
respective Secretary or Assistant Secretary as of the Third
Amendment Effectiveness Date, which certificate shall state that
the resolutions therein certified have not been amended,
modified, revoked or rescinded as of the date of such
certificate; and
Page 3
<PAGE>
(d) receipt by the Agent, with a counterpart for each
Lender, of an opinion of Fasken Campbell Godfrey, special counsel
to the Borrowers, and an opinion of Frank S. Cottrell, Esq., or
his successors, as general counsel, or an associate general
counsel, of Deere, each dated the Third Amendment Effectiveness
Date and addressed to the Lenders and the Agent, substantially in
the forms of the opinions of such counsel dated April 5, 1995
with changes therein to reflect that such opinions are in respect
of this Agreement and are rendered on the Third Amendment
Effectiveness Date. Such opinions shall also cover such other
matters incidental to the transactions contemplated by this
Agreement as the Agent shall reasonably require.
4. Amendment and Confirmation of Representations and Warranties
(a) Section 8.1 of the Loan Agreement is hereby amended by
deleting the reference therein to "John Deere Insurance Company
of Canada" and to "Homelite Canada Limited" and inserting in
their place the names "John Deere Foundation of Canada" and "John
Deere Consumer Products Limited".
(b) Section 8.7 of the Loan Agreement is hereby deemed
amended by deleting the date "October 31, 1996" in the third line
and by substituting in lieu thereof the date "October 31, 1997".
(c) The representations and warranties made by each of the
Borrowers in the Loan Agreement, as amended by this Agreement,
are true and correct in all material respects on and as of the
Third Amendment Effectiveness Date, before and after giving
effect to the effectiveness of this Agreement as if made on and
as of the Third Amendment Effectiveness Date except as otherwise
disclosed in writing to the Agent or to the extent such
representations and warranties expressly relate to an earlier
date.
5. USD Agreement
Each of the parties hereto confirms that the USD Agreement
referred to in the Loan Agreement is the U.S.$3,500,000,000
Amended and Restated Credit Agreement dated as of the date hereof
among the USD Borrowers, certain financial institutions, The
Chase Manhattan Bank, as USD Agent, and other agents as the same
may be further amended, restated, supplemented or replaced from
time to time.
6. Confirmation by Guarantors
Each Guarantor hereby consents to the terms and conditions of
this Agreement. Deere Canada hereby confirms that the Guarantee
executed by it dated as of April 5, 1995 has not been released,
discharged, waived or varied by this Agreement, is in full force
and effect, and constitutes a legal, valid and binding obligation
of it. Deere Credit hereby confirms that the Guarantee assumed
by it pursuant to the terms of the Assumption Agreement (as
defined in the Second Amending Agreement made as of the 25th day
of February, 1997) has not been released, discharged, waived or
varied by this Agreement, is in full force and effect and
constitutes a legal, valid and binding obligation of it.
Page 4
<PAGE>
7. Confirmation by Deere and Deere Canada
Deere hereby consents to the terms and conditions of this
Agreement and each of Deere and Deere Canada hereby confirms that
the Subordination Agreement executed by it dated April 5, 1995
has not been released, discharged, waived or varied by this
Agreement, is in full force and effect and constitutes a legal,
valid and binding obligation of it. Deere is a party to this
Agreement solely for the purposes of the confirmation contained
in this paragraph.
8. Confirmation
Except as expressly amended, modified and supplemented
hereby, the parties hereto confirm the terms and conditions of
the Loan Agreement and that they are and shall remain in full
force and effect.
9. Governing Law; Counterparts
(a) This Agreement and the rights and obligations of the
parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the Province of
Ontario.
(b) This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts,
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement may be
delivered by facsimile transmission of the relevant signature
pages hereof.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
written above.
JOHN DEERE LIMITED,
as Borrower
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
Page 5
<PAGE>
JOHN DEERE LIMITED,
as Guarantor
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
JOHN DEERE CREDIT INC.
as Borrower
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
JOHN DEERE CREDIT INC.,
as Guarantor
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
Attested by: DEERE & COMPANY
____________________ By: ____________________
Name: Name:
Title: Title:
By: ____________________
Name:
Title:
Page 6
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
ROYAL BANK OF CANADA
By: ____________________
Name:
Title:
THE TORONTO-DOMINION BANK
as a Lender
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
THE TORONTO-DOMINION BANK
as Agent
By: ____________________
Name:
Title:
Page 7
<PAGE>
THIRD AMENDING AGREEMENT
This Amending Agreement made as of the 24th day of February, 1998
B E T W E E N :
JOHN DEERE LIMITED, a corporation incorporated under
the laws of Canada,
("Deere Canada")
OF THE FIRST PART
and -
JOHN DEERE CREDIT INC., a corporation amalgamated under
the laws of Canada,
("Deere Credit")
OF THE SECOND PART
and -
DEERE & COMPANY, a corporation incorporated under the
laws of the State of Delaware,
("Deere")
OF THE THIRD PART
CANADIAN IMPERIAL BANK OF COMMERCE,
ROYAL BANK OF CANADA and
THE TORONTO-DOMINION BANK,
(collectively, the "Lenders")
OF THE FOURTH PART
and -
THE TORONTO-DOMINION BANK,
(the "Agent")
OF THE FIFTH PART
<PAGE>
WHEREAS pursuant to the U.S.$87,500,000 loan agreement dated
as of April 5, 1995, as amended by a First Amending Agreement
made as of the 27th day of February, 1996 and by a Second
Amending Agreement made as of the 25th day of February, 1997 (the
"Loan Agreement"), between Deere Canada, Deere Credit (a
successor to John Deere Finance Limited), the Lenders and the
Agent, the Lenders agreed to make and have made Loans to the
Borrowers;
AND WHEREAS the Borrowers have requested that certain
provisions of the Loan Agreement be modified in the manner
provided for in this Agreement and the Lenders are willing to
agree to such modifications as provided for in this Agreement;
AND WHEREAS each of Deere Canada and Deere Credit has
guaranteed the obligations of the other under the Loan Agreement
pursuant to Guarantees dated as of April 5, 1995 in favour of the
Lenders and the Agent and the Lenders have required as a
condition of entering into this Agreement that Deere Canada and
Deere Credit confirm that such Guarantees are in full force and
effect, unamended;
AND WHEREAS Deere subordinated debts owing to it by Deere
Canada in favour of the Lenders pursuant to a Subordination
Agreement dated April 5, 1995 and the Lenders have required as a
condition of entering into this Agreement that Deere and Deere
Canada confirm that such Subordination Agreement is in full force
and effect, unamended;
NOW THEREFORE in consideration of the premises and in
consideration of other valuable consideration and the sum of
$1.00 now paid by each of the parties hereto to the others, the
receipt and sufficiency whereof is hereby acknowledged, the
parties agree as follows:
1. Defined Terms
All capitalized terms used and not defined herein have the
meanings ascribed to them in the Loan Agreement.
2. Certain Amendments to Loan Agreement
(a) The Loan Agreement is hereby amended by deleting the
reference to "U.S.$87,500,000" from the cover page thereof and by
deleting from the first recital thereto the words
"U.S.$87,500,000" and substituting in their place in the first
recital the words "the Credit Facility Amount";
(b) Section 1.1 of the Loan Agreement is hereby amended by:
(i) inserting the following definition in correct
alphabetical order: " "Third Amendment Effectiveness Date" means
the date on which the Third Amending Agreement made as of
February 24, 1998 becomes effective;";
Page 2
<PAGE>
(ii) deleting the definition of "Credit Facility" and
inserting the following in its place:
" "Credit Facility" means the credit facility in
the maximum principal amount equal to the aggregate Commitments,
which on the date hereof is U.S.$225,000,000, as the same may be
increased from time to time pursuant to section 2.21 of the USD
Agreement, which is being extended by the Lenders to the
Borrowers hereunder;";
(iii) deleting the definition of "Credit Facility
Amount" and inserting the following in its place:
" "Credit Facility Amount" means at any time the
aggregate amount of the Commitments at such time (which at the
date hereof is U.S.$225,000,000), as the same may be increased
from time to time pursuant to section 2.21 of the USD
Agreement;"; and
(c) Section 2.1 of the Loan Agreement is hereby amended by
deleting the reference to "U.S.$87,500,000" and substituting in
its place the words "the Credit Facility Amount" and inserting
immediately thereafter the words "as the same may be increased
from time to time pursuant to section 2.21 of the USD Agreement".
3. Conditions to Effectiveness
This Agreement shall become effective on the date on which
all of the following conditions precedent have been satisfied or
waived:
(a) execution and delivery of this Agreement by each
Borrower, each Guarantor, Deere, each Lender and the Agent;
(b) receipt by the Agent, with a counterpart for each
Lender, of a certificate of any Vice-President, the Secretary or
Assistant Secretary of each Borrower, each Guarantor and Deere,
dated the Third Amendment Effectiveness Date, certifying the
names and true signatures of the officers of such Borrowers,
Guarantors and Deere authorized to sign this Agreement, together
with evidence of the incumbency of such Vice-President, Secretary
or Assistant Secretary;
(c) receipt by the Agent, with a counterpart for each
Lender, of a copy of the resolutions in form and substance
satisfactory to the Agent, of the board of directors of each of
the Borrowers and the Guarantors authorizing the execution,
delivery and performance of this Agreement, certified by their
respective Secretary or Assistant Secretary as of the Third
Amendment Effectiveness Date, which certificate shall state that
the resolutions therein certified have not been amended,
modified, revoked or rescinded as of the date of such
certificate; and
Page 3
<PAGE>
(d) receipt by the Agent, with a counterpart for each
Lender, of an opinion of Fasken Campbell Godfrey, special counsel
to the Borrowers, and an opinion of Frank S. Cottrell, Esq., or
his successors, as general counsel, or an associate general
counsel, of Deere, each dated the Third Amendment Effectiveness
Date and addressed to the Lenders and the Agent, substantially in
the forms of the opinions of such counsel dated April 5, 1995
with changes therein to reflect that such opinions are in respect
of this Agreement and are rendered on the Third Amendment
Effectiveness Date. Such opinions shall also cover such other
matters incidental to the transactions contemplated by this
Agreement as the Agent shall reasonably require.
4. Amendment and Confirmation of Representations and Warranties
(a) Section 8.1 of the Loan Agreement is hereby amended by
deleting the reference therein to "John Deere Insurance Company
of Canada" and to "Homelite Canada Limited" and inserting in
their place the names "John Deere Foundation of Canada" and "John
Deere Consumer Products Limited".
(b) Subsection 8.7 of the Loan Agreement is hereby deemed
amended by deleting the date "October 31, 1996" in the third line
and by substituting in lieu thereof the date "October 31, 1997".
(c) The representations and warranties made by each of the
Borrowers in the Loan Agreement, as amended by this Agreement,
are true and correct in all material respects on and as of the
Third Amendment Effectiveness Date, before and after giving
effect to the effectiveness of this Agreement as if made on and
as of the Third Amendment Effectiveness Date except as otherwise
disclosed in writing to the Agent or to the extent such
representations and warranties expressly relate to an earlier
date.
5. USD Agreement
Each of the parties hereto confirms that the USD Agreement
referred to in the Loan Agreement is the U.S.$1,500,000,000
Amended and Restated Credit Agreement dated as of the date hereof
among the USD Borrowers, certain financial institutions, The
Chase Manhattan Bank, as USD Agent, and other agents as the same
may be further amended, restated, supplemented or replaced from
time to time.
6. Confirmation by Guarantors
Each Guarantor hereby consents to the terms and conditions of
this Agreement. Deere Canada hereby confirms that the Guarantee
executed by it dated as of April 5, 1995 has not been released,
discharged, waived or varied by this Agreement, is in full force
and effect, and constitutes a legal, valid and binding obligation
of it. Deere Credit hereby confirms that the Guarantee assumed
by it pursuant to the terms of the Assumption Agreement (as
defined in the Second Amending Agreement made as of the 25th day
of February, 1997) has not been released, discharged, waived or
varied by this Agreement, is in full force and effect and
constitutes a legal, valid and binding obligation of it.
Page 4
<PAGE>
7. Confirmation by Deere and Deere Canada
Deere hereby consents to the terms and conditions of this
Agreement and each of Deere and Deere Canada hereby confirms that
the Subordination Agreement executed by it dated April 5, 1995
has not been released, discharged, waived or varied by this
Agreement, is in full force and effect and constitutes a legal,
valid and binding obligation of it. Deere is a party to this
Agreement solely for the purposes of the confirmation contained
in this paragraph.
8. Confirmation
Except as expressly amended, modified and supplemented
hereby, the parties hereto confirm the terms and conditions of
the Loan Agreement and that they are and shall remain in full
force and effect.
9. Governing Law; Counterparts
(a) This Agreement and the rights and obligations of the
parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the Province of
Ontario.
(b) This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts,
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement may be
delivered by facsimile transmission of the relevant signature
pages hereof.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
proper and duly authorized officers as of the day and year first
written above.
JOHN DEERE LIMITED,
as Borrower
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
Page 5
<PAGE>
JOHN DEERE LIMITED,
as Guarantor
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
JOHN DEERE CREDIT INC.
as Borrower
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
JOHN DEERE CREDIT INC.,
as Guarantor
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
Attested by: DEERE & COMPANY
____________________ By: ____________________
Name: Name:
Title: Title:
By: ____________________
Name:
Title:
Page 6
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
ROYAL BANK OF CANADA
By: ____________________
Name:
Title:
THE TORONTO-DOMINION BANK
as a Lender
By: ____________________
Name:
Title:
By: ____________________
Name:
Title:
THE TORONTO-DOMINION BANK
as Agent
By: ____________________
Name:
Title:
Page 7
EXHIBIT 12
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Six Months Year
Ended Ended
April 30, October 31,
1998 1997 1997
(In thousands of dollars)
Earnings:
Income of consolidated group
before income taxes
and changes in accounting $ 888,258 $793,079 $1,507,070
Dividends received from less-
than-fifty percent owned
affiliates 2,073 2,948 3,591
Fixed charges excluding
capitalized interest 250,336 202,856 433,673
Total earnings $1,140,667 $998,883 $1,944,334
Fixed charges:
Interest expense of con-
solidated group including
capitalized interest $ 245,867 $198,661 $ 422,588
Portion of rental charges
deemed to be interest 6,368 4,298 11,497
Total fixed charges $ 252,235 $202,959 $ 434,085
Ratio of earnings to
fixed charges* 4.52 4.92 4.48
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.
* 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.
Page
<PAGE>
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year
Ended
October 31,
1996 1995
(In thousands of dollars)
Earnings:
Income of consolidated group
before income taxes
and changes in accounting $1,286,634 $1,092,751
Dividends received from less-
than-fifty percent owned
affiliates 7,937 2,023
Fixed charges excluding
capitalized interest 410,764 399,056
Total earnings $1,705,335 $1,493,830
Fixed charges:
Interest expense of con-
solidated group including
capitalized interest $ 402,168 $ 392,408
Portion of rental charges
deemed to be interest 8,596 6,661
Total fixed charges $ 410,764 $ 399,069
Ratio of earnings to
fixed charges* 4.15 3.74
Page
<PAGE>
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year
Ended
October 31,
1994 1993
(In thousands of dollars)
Earnings:
Income of consolidated group
before income taxes
and changes in accounting $ 920,920 $ 272,345
Dividends received from less-
than-fifty percent owned
affiliates 2,329 1,706
Fixed charges excluding
capitalized interest 310,047 375,238
Total earnings $1,233,296 $649,289
Fixed charges:
Interest expense of con-
solidated group including
capitalized interest $ 303,080 $369,325
Portion of rental charges
deemed to be interest 7,008 6,127
Total fixed charges $ 310,088 $375,452
Ratio of earnings to
fixed charges* 3.98 1.73
<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>
<RESTATED>
<CIK> 0000315189
<NAME> DEERE&COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<EXCHANGE-RATE> 1
<CASH> 334
<SECURITIES> 867
<RECEIVABLES> 11,783
<ALLOWANCES> 123
<INVENTORY> 1,511
<CURRENT-ASSETS> 0
<PP&E> 4,473
<DEPRECIATION> 2,919
<TOTAL-ASSETS> 18,553
<CURRENT-LIABILITIES> 0
<BONDS> 2,517
0
0
<COMMON> 1,779
<OTHER-SE> 2,487
<TOTAL-LIABILITY-AND-EQUITY> 18,553
<SALES> 6,015
<TOTAL-REVENUES> 6,916
<CGS> 4,604
<TOTAL-COSTS> 5,160
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 27
<INTEREST-EXPENSE> 244
<INCOME-PRETAX> 888
<INCOME-TAX> 323
<INCOME-CONTINUING> 568
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 568
<EPS-PRIMARY> 2.29
<EPS-DILUTED> 2.26
</TABLE>
