- -------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 16, 2000
(Date of earliest event reported)
D E E R E & C O M P A N Y
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-4121
(Commission File Number)
36-2382580
(IRS Employer Identification No.)
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309)765-8000
(Registrant's telephone number, including area code)
_______________________________________
(Former name or former address, if changed since last report.)
- --------------------------------------------------------------
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
(99) Press release and additional information.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereto duly authorized.
DEERE & COMPANY
By: /s/ Michael A. Harring
-------------------------
Michael A. Harring,
Secretary
Dated: May 16, 2000
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EXHIBIT INDEX
Sequential
Number and Description of Exhibit Page Number
(99) Press release and additional information Pg. 5
Page 4
<PAGE>
EXHIBIT 99
(DEERE LOGO)
Contact: Greg Derrick
Deere & Company
Moline, IL 61265
(309) 765-5290
For Immediate Release May 16, 2000
- ----------------------------------
DEERE HAS HIGHER SECOND-QUARTER EARNINGS;
FARM SECTOR SHOWS SIGNS OF STABILIZING
- - Second-quarter profits rise 36% on 12% sales gain
- - Equipment operating profit jumps 64%
- - Physical-volume of sales now projected to be up 15% for
year
- - Growth and efficiency initiatives producing strong
results
MOLINE, IL (May 16, 2000) Deere & Company today reported
worldwide net income of $204.3 million, or $.87 per share, for
the second quarter ended April 30, 2000. This was a 36 percent
increase from last year's second-quarter earnings of $150.1
million, or $.65 per share. For the first six months, net income
was $242.0 million, or $1.03 per share, representing a 21 percent
gain in comparison with last year's $199.8 million, or $.86 per
share. The increases were primarily due to improved manufacturing
efficiencies and higher sales and production volumes.
"Sales for the quarter moved ahead in line with our
expectations," noted Hans W. Becherer, chairman and chief
executive officer. "Although the farm economy is continuing to
feel the impact of low commodity prices, our operations are
benefiting from efficiencies associated with higher agricultural-
equipment production schedules, and the continued progress of
quality and efficiency-improvement initiatives under way in the
company." After being sharply reduced in 1999 to bring down
dealer receivables, Deere's farm-machinery production levels have
been increased this year to correspond more closely with expected
retail demand.
Worldwide net sales and revenues were $3.790 billion for the
second quarter and $6.129 billion for the first six months of
2000, compared with $3.468 billion and $5.927 billion,
respectively, last year. Net sales of equipment were $3.324
billion for the second quarter and $5.204 billion for the first
six months, compared with $2.957 billion and $4.930 billion for
the comparable periods a year ago. The net sales increase was
primarily due to increased physical volumes of sales, partially
offset by the impact of weaker European currencies. Overseas
sales were up 6 percent for the quarter and 2 percent higher for
the year to date. Excluding the impact of weaker exchange rates,
the respective increases were 15 percent and 10 percent. Overall,
the physical volume of sales increased 15 percent for the quarter
and 8 percent for the first six months, compared with a year ago.
Worldwide equipment operations had net income of $165.4
million for the quarter and $160.3 million for the first six
months of 2000, compared with $102.8 million and $109.5 million,
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respectively, last year. The increases were primarily due to
improved manufacturing efficiencies, lower pension and health-
care costs, as well as higher sales and production volumes.
Partially offsetting these factors were higher sales-incentive
costs, higher selling and administrative expenses related to
growth and other initiatives, a higher tax rate, and the impact
of weaker European currencies. Worldwide equipment operating
profit was $341 million for the quarter, a 64 percent increase
over last year's $208 million, and $361 million for the first six
months, a 39 percent increase compared with last year's $259
million.
- - Operating profit of the worldwide agricultural equipment
division was $159 million for the second quarter and $173 million
for the first six months, compared with $61 million and $79
million, respectively, in 1999. The increases were primarily due
to improved manufacturing efficiencies associated with higher
production volumes, in addition to lower pension and health-care
costs and the impact of quality and efficiency-improvement
initiatives. Partially offsetting these factors were higher
selling and administrative expenses related to growth and other
initiatives, higher sales-incentive costs and the impact of lower
European exchange rates. Agricultural-equipment production
schedules this year are in line with expected retail demand,
allowing the division to operate at more efficient levels.
Overseas operations continued to be positive contributors to the
division's results for these periods, although at a lower level
than last year, due to the impact of weaker European currencies,
a less favorable sales mix, higher sales-incentive costs and
higher growth-related selling and administrative expenses.
- - Worldwide commercial and consumer equipment operating profit
was $115 million for the quarter and $124 million for the first
six months, compared with $89 million and $101 million in the
comparable 1999 periods. The increases were primarily due to
higher sales volumes driven by continued strong retail demand for
company products. Partially offsetting these factors were higher
selling and administrative costs related to growth initiatives,
as well as inefficiencies and costs primarily related to the
relocation of the handheld-product operations. In addition, the
division is benefiting from positive worldwide acceptance of the
many innovative products that have been recently introduced.
- - Operating profit of the worldwide construction equipment
division was $81 million for the quarter and $92 million for the
first six months, compared with $63 million and $88 million,
respectively, last year. The increases were primarily due to
higher sales and improved efficiencies. Sales for the quarter and
the first six months were 13 percent and 3 percent higher than
last year's comparable periods primarily due to an expanded
product line. Last year's sales were reduced, according to plan,
by implementation of the estimate-to-cash order-fulfillment
initiative. On April 28, 2000, the acquisition of Timberjack
Group was completed for a purchase price of approximately $570
million. Through the acquisition, Deere became the world's
largest producer of forest-harvesting equipment.
- - Net income of the credit operations was $36 million for the
quarter and $77 million for the first six months, compared with
$42 million and $84 million last year. The decreases were
primarily due to lower gains from the sale of retail notes and
higher operating expenses, partially offset by higher income from
a larger portfolio.
- - The company's other businesses had operating losses of $11
million for the quarter and $19 million for the first six months,
compared with a break-even performance and a $3 million operating
loss for last year's comparable periods. Current-year results
reflected costs related to the development of new products, e-
business initiatives, and goodwill amortization
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of the special-technologies group. These factors were partially
offset by higher operating profit of the health-care operations.
MARKET CONDITIONS AND OUTLOOK
- - AGRICULTURAL EQUIPMENT. North American agricultural prospects
for 2000 have generally improved over the last quarter. Although
remaining at historically low levels, crop prices have risen over
concerns about dry soil conditions in large portions of the corn
belt and long-range weather forecasts suggesting below-normal
precipitation in the same area. In addition, worldwide demand for
grains and oilseeds has exceeded earlier expectations, while
livestock prices have risen to profitable levels for most
producers. The U.S. federal budget proposal carries a $7.1
billion supplement to existing farm programs, suggesting that
farm income may be favorable again in 2000. Based on these
conditions, Deere now expects industry retail sales in North
America will be flat to down 5 percent from last year's levels,
with declines of 5 to 10 percent expected in other major markets.
- - COMMERCIAL AND CONSUMER EQUIPMENT. Continuing their strong
momentum, retail sales of Deere's commercial and consumer
equipment are expected to achieve further growth this year. These
operations are expected to benefit from market-share growth and
continued positive worldwide customer response to recently
introduced products.
- - CONSTRUCTION EQUIPMENT. Despite higher mortgage rates, U.S.
housing starts are expected to remain near 1.6 million units in
2000, down slightly from last year's 1.67 million. Public
construction, especially for highways and streets, should
continue to grow rapidly this year, and non-residential
construction should also experience modest growth. In this
environment, Deere expects construction-industry retail sales to
be down 5 to 10 percent, compared with last year. In forestry,
pulp prices continue to recover as demand has risen in response
to more rapid worldwide economic growth, while capacity has been
held in check by a number of mill shutdowns. Lumber prices,
although lower than last year, remain favorable for most
producers. In Deere's view, this environment supports a continued
high level of forestry activity in Europe and recovery in other
global markets. At the retail level, sales of company
construction-equipment division products are expected to be
higher for the rest of the year due to an expanded product line
and impact of the Timberjack acquisition.
- - CREDIT OPERATIONS. Credit is expected to continue to benefit
from a larger receivable and lease portfolio this year. However,
lower gains on the sale of retail notes and higher growth
expenditures will have an adverse effect on results.
Based on these conditions, and with the inclusion of
Timberjack, the company's worldwide physical volume of sales is
currently projected to increase by 15 percent for full-year 2000
versus 1999. Third-quarter physical volumes are projected to be
21 percent higher than in the comparable period of last year.
"We are encouraged by our performance this year, which we
regard as evidence of Deere's leadership in key markets,"
Becherer said. "We remain on track with our growth and efficiency-
improvement plans and are in excellent condition to see
substantial growth from a full recovery of the farm sector when
it occurs."
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JOHN DEERE CAPITAL CORPORATION
The following is disclosed on behalf of the company's U.S.
credit subsidiary, John Deere Capital Corporation (JDCC), in
connection with the disclosure requirements applicable to its
periodic issuance of debt securities in the public market. JDCC's
net income was $32.4 million for the second quarter and $68.5
million for the first six months of 2000, compared with $36.5
million and $73.9 million, respectively, last year. The decreases
were primarily due to lower gains from the sale of retail notes
and higher operating expenses, partially offset by higher income
on a larger average receivable and lease portfolio.
Net receivables and leases financed by JDCC were $7.848
billion at April 30, 2000, compared with $7.690 billion one year
ago. The increase resulted from acquisitions exceeding
collections during the last twelve months. This was partially
offset by sales of retail notes during the same period. Net
receivables and leases administered, which include receivables
previously sold, totaled $9.596 billion at April 30, 2000,
compared with $9.085 billion at April 30, 1999.
SAFE HARBOR STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. Statements under the "Market Conditions and
Outlook" heading and other statements herein that relate to
future operating periods, are subject to important risks and
uncertainties that could cause actual results to differ
materially. Forward-looking statements relating to the company's
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, real
estate values, animal diseases, crop pests, harvest yields 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; levels of new and used field
inventories; production difficulties, including capacity and
supply constraints; dealer practices; labor relations; interest
and currency exchange rates; monetary and fiscal policies
(including actions by the Federal Reserve Board); technological
difficulties; accounting standards; and other risks and
uncertainties. The impact of the recent Timberjack acquisition is
uncertain, including the impact of post-merger integration costs
and the amortization of intangibles. Retail sales of agricultural
equipment are especially affected by the weather in the summer,
while the number of housing starts is especially important to
sales of construction equipment. Prices for lumber, structural
panels, and pulp are important to sales of forestry equipment.
Sales of consumer equipment are affected by general economic
activity, employment, income, wealth, and consumer borrowing
patterns. The company's outlook is based upon assumptions
relating to the factors described above, which are sometimes
based upon estimates and data prepared by government agencies.
These estimates and data are often revised. 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 filings with the Securities
and Exchange Commission.
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<PAGE>
SECOND QUARTER 2000 PRESS RELEASE
Net sales and revenues:
(millions of dollars and shares except per share amounts)
Three Months Ended
April 30
----------------------
%
2000 1999 Change
------ ------ ------
Net sales and revenues:
Agricultural equipment net sales $1,675 $1,581 + 6
Commercial and consumer equipment
net sales 999 812 + 23
Construction equipment net sales 634 559 + 13
Other net sales 16 5 +220
Total net sales 3,324 2,957 + 12
Credit revenues 312 278 + 12
Other revenues 154 233 - 34
Total net sales and revenues* $3,790 $3,468 + 9
Operating profit (loss):
Agricultural equipment $ 159 $ 61 +161
Commercial and consumer equipment 115 89 + 29
Construction equipment 81 63 + 29
Credit 56 65 - 14
Other (11)
Total operating profit* 400 278 + 44
Interest, corporate expenses
and income taxes (196) (128) + 53
Net income $ 204 $ 150 + 36
Per Share:
Net income - basic $ .87 $ .65 + 34
Net income - diluted $ .87 $ .65 + 34
* Includes overseas equipment
operations:
Net sales $ 816 $ 767 + 6
Operating profit $ 74 $ 99 - 25
Net sales and revenues:
(millions of dollars except per share amounts)
Six Months Ended
April 30
----------------------
%
2000 1999 Change
------ ------ ------
Net sales and revenues:
Agricultural equipment net sales $2,709 $2,738 - 1
Commercial and consumer equipment
net sales 1,492 1,241 + 20
Construction equipment net sales 973 946 + 3
Other net sales 30 5 +500
Total net sales 5,204 4,930 + 6
Credit revenues 613 539 + 14
Other revenues 312 458 - 32
Total net sales and revenues* $6,129 $5,927 + 3
Operating profit (loss):
Agricultural equipment $ 173 $ 79 +119
Commercial and consumer equipment 124 101 + 23
Construction equipment 92 88 + 5
Credit 120 130 - 8
Other (19) (3) +533
Total operating profit* 490 395 + 24
Interest, corporate expenses
and income taxes (248) (195) + 27
Net income $ 242 $ 200 + 21
Per Share:
Net income - basic $ 1.03 $ .86 + 20
Net income - diluted $ 1.03 $ .86 + 20
* Includes overseas equipment
operations:
Net sales $1,366 $1,338 + 2
Operating profit $ 107 $ 152 - 30
April 30 October 31 April 30
2000 1999 1999
-------- ---------- --------
Equipment Operations:
Trade accounts and notes
receivable - net $ 3,815 $ 3,251 $ 4,272
Inventories $ 1,877 $ 1,294 $ 1,584
Financial Services:
Financing receivables and
leases financed - net $ 9,226 $ 8,276 $ 8,846
Financing receivables and
leases administered -
net $11,177 $10,992 $10,393
Average shares outstanding 234.0 232.9 232.2
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DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Consolidated
Subsidiaries)
-------------------
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2000 1999
-------- ---------
Net Sales and Revenues
Net sales of equipment $3,324.1 $2,957.1
Finance and interest income 312.2 274.9
Insurance and health care premiums 115.8 186.1
Investment income 3.7 16.0
Other income 33.9 34.3
Total 3,789.7 3,468.4
Costs and Expenses
Cost of goods sold 2,605.4 2,438.7
Research and development expenses 139.7 113.1
Selling, administrative and general
expenses 363.2 340.6
Interest expense 160.1 142.8
Insurance and health care claims
and benefits 94.9 152.3
Other operating expenses 73.2 50.1
Total 3,436.5 3,237.6
Income of Consolidated Group
Before Income Taxes 353.2 230.8
Provision for income taxes 149.5 82.7
Income of Consolidated Group 203.7 148.1
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit .1 .2
Other .5 1.8
Total .6 2.0
Net Income $ 204.3 $ 150.1
Per Share:
Net income - basic $ .87 $ .65
Net income - diluted $ .87 $ .65
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Financial Services
on the Equity Basis)
---------------------
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2000 1999
-------- -----------
Net Sales and Revenues
Net sales of equipment $3,324.1 $2,957.1
Finance and interest income 21.3 24.0
Insurance and health care premiums
Investment income 1.1
Other income 23.4 17.2
Total 3,369.9 2,998.3
Costs and Expenses
Cost of goods sold 2,609.2 2,442.8
Research and development expenses 139.7 113.1
Selling, administrative and general
expenses 275.1 237.1
Interest expense 44.2 42.7
Insurance and health care claims
and benefits
Other operating expenses 7.9 1.5
Total 3,076.1 2,837.2
Income of Consolidated Group
Before Income Taxes 293.8 161.1
Provision for income taxes 128.4 58.3
Income of Consolidated Group 165.4 102.8
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit 36.2 42.3
Other 2.7 5.0
Total 38.9 47.3
Net Income $ 204.3 $ 150.1
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
------------------
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2000 1999
-------- ---------
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 295.8 $ 255.1
Insurance and health care premiums 120.4 192.5
Investment income 2.6 16.0
Other income 17.6 23.2
Total 436.4 486.8
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 88.8 104.9
Interest expense 120.8 104.3
Insurance and health care claims
and benefits 94.9 153.7
Other operating expenses 72.5 54.3
Total 377.0 417.2
Income of Consolidated Group
Before Income Taxes 59.4 69.6
Provision for income taxes 21.1 24.3
Income of Consolidated Group 38.3 45.3
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit .1 .2
Other .1
Total .2 .2
Net Income $ 38.5 $ 45.5
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DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Consolidated
Subsidiaries)
------------------
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2000 1999
-------- --------
Net Sales and Revenues
Net sales of equipment $5,204.1 $4,930.3
Finance and interest income 615.6 534.0
Insurance and health care premiums 228.4 365.9
Investment income 12.8 34.7
Other income 68.2 62.1
Total 6,129.1 5,927.0
Costs and Expenses
Cost of goods sold 4,157.8 4,092.5
Research and development expenses 242.3 209.0
Selling, administrative and general
expenses 678.9 642.5
Interest expense 306.9 276.9
Insurance and health care claims
and benefits 185.1 306.2
Other operating expenses 145.1 92.8
Total 5,716.1 5,619.9
Income of Consolidated Group
Before Income Taxes 413.0 307.1
Provision for income taxes 170.3 109.2
Income of Consolidated Group 242.7 197.9
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit .2 .5
Other (.9) 1.4
Total (.7) 1.9
Net Income $ 242.0 $ 199.8
Per Share:
Net income - basic $ 1.03 $ .86
Net income - diluted $ 1.03 $ .86
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Financial Services
on the Equity Basis)
--------------------
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2000 1999
--------- ---------
Net Sales and Revenues
Net sales of equipment $5,204.1 $4,930.3
Finance and interest income 46.3 45.8
Insurance and health care premiums
Investment income 7.7
Other income 45.9 32.7
Total 5,304.0 5,008.8
Costs and Expenses
Cost of goods sold 4,166.0 4,101.2
Research and development expenses 242.3 209.0
Selling, administrative and general
expenses 514.6 444.9
Interest expense 80.9 82.7
Insurance and health care claims
and benefits
Other operating expenses 15.6 (.7)
Total 5,019.4 4,837.1
Income of Consolidated Group
Before Income Taxes 284.6 171.7
Provision for income taxes 124.3 62.2
Income of Consolidated Group 160.3 109.5
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 77.2 83.9
Other 4.5 6.4
Total 81.7 90.3
Net Income $ 242.0 $ 199.8
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
--------------------
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2000 1999
-------- ----------
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 578.7 $ 495.8
Insurance and health care premiums 238.0 379.1
Investment income 5.1 34.7
Other income 36.8 44.0
Total 858.6 953.6
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 165.8 200.1
Interest expense 235.3 201.9
Insurance and health care claims
and benefits 185.1 309.4
Other operating expenses 144.1 106.8
Total 730.3 818.2
Income of Consolidated Group
Before Income Taxes 128.3 135.4
Provision for income taxes 45.8 47.0
Income of Consolidated Group 82.5 88.4
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .2 .5
Other .1 .1
Total .3 .6
Net Income $ 82.8 $ 89.0
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DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
--------------------------------
Millions of dollars April 30 October 31 April 30
(Unaudited) 2000 1999 1999
--------- --------- ----------
Assets
Cash and short-term
investments $ 370.4 $ 295.5 $ 295.3
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 370.4 295.5 295.3
Marketable securities 112.7 315.5 858.0
Receivables from
unconsolidated subsidiaries
and affiliates 155.6 30.2 42.7
Trade accounts and notes
receivable - net 3,815.2 3,251.1 4,271.8
Financing receivables - net 7,542.3 6,742.6 7,521.6
Other receivables 226.0 273.9 407.0
Equipment on operating
leases - net 1,817.8 1,654.7 1,417.5
Inventories 1,876.9 1,294.3 1,584.4
Property and equipment - net 1,778.2 1,782.3 1,672.7
Investments in unconsolidated
subsidiaries and affiliates 165.5 151.5 181.4
Intangible assets - net 713.1 295.1 273.9
Prepaid pension costs 621.8 619.9 651.7
Other assets 215.9 185.5 123.7
Deferred income taxes 686.7 598.1 456.8
Deferred charges 107.1 88.0 100.8
Total $20,205.2 $17,578.2 $19,859.3
Liabilities and Stockholders'
Equity
Short-term borrowings $ 6,562.7 $ 4,488.2 $ 6,648.9
Payables to unconsolidated
subsidiaries and affiliates 65.9 15.5 51.1
Accounts payable and
accrued expenses 2,717.8 2,432.8 2,586.6
Insurance and health care
claims and reserves 55.2 55.4 405.8
Accrued taxes 76.4 144.8 94.5
Deferred income taxes 64.4 63.0 18.4
Long-term borrowings 3,960.4 3,806.2 3,485.1
Retirement benefit accruals
and other liabilities 2,486.2 2,478.0 2,394.3
Total liabilities 15,989.0 13,483.9 15,684.7
Stockholders' equity 4,216.2 4,094.3 4,174.6
Total $20,205.2 $17,578.2 $19,859.3
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED (Deere & Company with Financial
BALANCE SHEET Services on the Equity Basis)
--------------------------------
Millions of dollars April 30 October 31 April 30
(Unaudited) 2000 1999 1999
--------- --------- ----------
Assets
Cash and short-term
investments $ 144.2 $ 111.7 $ 61.1
Cash deposited with
unconsolidated subsidiaries 131.5 117.4 68.1
Cash and cash equivalents 275.7 229.1 129.2
Marketable securities 205.3
Receivables from
unconsolidated subsidiaries
and affiliates 336.5 266.0 242.2
Trade accounts and notes
receivable - net 3,815.2 3,251.1 4,271.8
Financing receivables - net 134.2 118.4 93.5
Other receivables 104.1 129.4 43.8
Equipment on operating
leases - net 2.6
Inventories 1,876.9 1,294.3 1,584.4
Property and equipment - net 1,733.4 1,738.8 1,624.4
Investments in unconsolidated
subsidiaries and affiliates 1,462.2 1,362.8 1,756.1
Intangible assets - net 712.0 294.8 267.0
Prepaid pension costs 621.8 619.9 651.7
Other assets 91.5 95.7 76.8
Deferred income taxes 680.9 592.9 435.7
Deferred charges 99.2 80.8 70.7
Total $11,943.6 $10,281.9 $11,247.3
Liabilities and Stockholders'
Equity
Short-term borrowings $ 2,028.4 $ 642.2 $ 2,191.7
Payables to unconsolidated
subsidiaries and affiliates 65.9 15.5 51.1
Accounts payable and
accrued expenses 2,093.8 1,891.9 1,781.6
Insurance and health care
claims and reserves
Accrued taxes 66.4 138.1 86.4
Deferred income taxes 6.7 7.2 5.0
Long-term borrowings 1,004.2 1,036.1 596.5
Retirement benefit accruals
and other liabilities 2,462.0 2,456.6 2,360.4
Total liabilities 7,727.4 6,187.6 7,072.7
Stockholders' equity 4,216.2 4,094.3 4,174.6
Total $11,943.6 $10,281.9 $11,247.3
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
-------------------------------
Millions of dollars April 30 October 31 April 30
(Unaudited) 2000 1999 1999
--------- --------- ----------
Assets
Cash and short-term
investments $ 226.2 $ 183.8 $ 234.1
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 226.2 183.8 234.1
Marketable securities 112.6 110.1 858.0
Receivables from
unconsolidated subsidiaries
and affiliates 92.6 4.8 5.1
Trade accounts and notes
receivables - net
Financing receivables - net 7,408.1 6,624.2 7,428.1
Other receivables 121.8 144.5 363.2
Equipment on operating
leases - net 1,817.8 1,652.2 1,417.5
Inventories
Property and equipment - net 44.8 43.5 48.3
Investments in unconsolidated
subsidiaries and affiliates 11.7 9.9 10.2
Intangible assets - net 1.1 .3 6.9
Prepaid pension costs
Other assets 124.4 89.8 46.9
Deferred income taxes 5.8 5.2 21.1
Deferred charges 7.9 7.2 30.1
Total $ 9,974.8 $8,875.5 $10,469.5
Liabilities and Stockholders'
Equity
Short-term borrowings $ 4,534.3 $3,846.0 $ 4,457.2
Payables to unconsolidated
subsidiaries and affiliates 405.2 358.1 272.7
Accounts payable and
accrued expenses 624.0 540.8 804.9
Insurance and health care
claims and reserves 55.2 55.4 405.8
Accrued taxes 10.0 6.8 8.1
Deferred income taxes 57.7 55.8 13.4
Long-term borrowings 2,956.2 2,770.1 2,888.6
Retirement benefit accruals
and other liabilities 24.0 21.3 33.9
Total liabilities 8,666.6 7,654.3 8,884.6
Stockholders' equity 1,308.2 1,221.2 1,584.9
Total $9,974.8 $8,875.5 $10,469.5
Page 12
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
--------------------------
Six Months Ended
April 30
Millions of dollars (Unaudited) 2000 1999
-------- ---------
Cash Flows from Operating Activities
Net income $ 242.0 $ 199.8
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (696.7) (527.4)
Net cash provided by (used for)
operating activities (454.7) (327.6)
Cash Flows from Investing Activities
Collections of financing receivables 3,338.6 3,081.4
Proceeds from sales of financing
receivables 154.1 297.4
Proceeds from maturities and sales
of marketable securities 229.7 76.6
Proceeds from sales of equipment on
operating leases 151.4 95.9
Cost of financing receivables
acquired (4,179.3) (4,007.1)
Purchases of marketable securities (30.7) (62.5)
Purchases of property and equipment (109.1) (116.5)
Cost of operating leases acquired (460.9) (389.6)
Acquisitions of businesses, net of
cash acquired (568.2) (62.2)
Increase in receivables with
unconsolidated affiliates (87.8) (5.1)
Other 39.9 14.8
Net cash used for investing
activities (1,522.3) (1,076.9)
Cash Flows from Financing Activities
Increase in short-term
borrowings 2,258.7 904.2
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 1,012.0 1,548.9
Principal payments on long-term
borrowings (1,119.6) (915.2)
Proceeds from issuance of
common stock 5.9 3.1
Repurchases of common stock (46.1)
Dividends paid (102.9) (102.7)
Other (.1) (1.2)
Net cash provided by
financing activities 2,054.0 1,391.0
Effect of Exchange Rate
Changes on Cash (2.1) (.9)
Net Increase (Decrease) in Cash
and Cash Equivalents 74.9 (14.4)
Cash and Cash Equivalents at
Beginning of Period 295.5 309.7
Cash and Cash Equivalents at
End of Period $ 370.4 $ 295.3
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED STATEMENT OF (Deere & Company with
CONSOLIDATED CASH FLOWS Financial Services on the
Equity Basis)
-------------------------
Six Months Ended
April 30
Millions of dollars (Unaudited) 2000 1999
-------- ----------
Cash Flows from Operating Activities
Net income $ 242.0 $ 199.8
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (995.5) (658.4)
Net cash provided by (used for)
operating activities (753.5) (458.6)
Cash Flows from Investing Activities
Collections of financing receivables 18.9 12.3
Proceeds from sales of financing
receivables
Proceeds from maturities and sales
of marketable securities 202.8
Proceeds from sales of equipment on
operating leases 1.1
Cost of financing receivables
acquired (4.3) (22.2)
Purchases of marketable securities
Purchases of property and equipment (104.1) (110.2)
Cost of operating leases acquired (.3)
Acquisitions of businesses, net of
cash acquired (567.2) (41.5)
Increase in receivables with
unconsolidated affiliates
Other (.5) 4.7
Net cash used for investing
activities (453.6) (156.9)
Cash Flows from Financing Activities
Increase in short-term
borrowings 1,356.3 637.9
Change in intercompany
receivables/payables (.6) (2.3)
Proceeds from long-term borrowings 1.5 48.9
Principal payments on long-term
borrowings (3.7)
Proceeds from issuance of
common stock 5.9 3.1
Repurchases of common stock (46.1)
Dividends paid (102.9) (102.7)
Other (.1) (1.1)
Net cash provided by
financing activities 1,256.4 537.7
Effect of Exchange Rate
Changes on Cash (2.7) (.9)
Net Increase (Decrease) in Cash
and Cash Equivalents 46.6 (78.7)
Cash and Cash Equivalents at
Beginning of Period 229.1 207.9
Cash and Cash Equivalents at
End of Period $ 275.7 $ 129.2
DEERE & COMPANY FINANCIAL SERVICES
-------------------
CONDENSED STATEMENT OF Six Months Ended
CONSOLIDATED CASH FLOWS April 30
Millions of dollars (Unaudited) 2000 1999
-------- --------
Cash Flows from Operating Activities
Net income $ 82.8 $ 89.0
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities 226.0 51.9
Net cash provided by (used for)
operating activities 308.8 140.9
Cash Flows from Investing Activities
Collections of financing receivables 3,319.7 3,069.1
Proceeds from sales of financing
receivables 154.1 297.4
Proceeds from maturities and sales
of marketable securities 27.0 76.6
Proceeds from sales of equipment on
operating leases 150.2 95.9
Cost of financing receivables
acquired (4,175.0) (3,984.9)
Purchases of marketable securities (30.7) (62.5)
Purchases of property and equipment (5.0) (6.3)
Cost of operating leases acquired (460.6) (389.6)
Acquisitions of businesses, net of
cash acquired (1.1) (20.7)
Increase in receivables with
unconsolidated affiliates (87.8) (5.1)
Other 36.6 10.0
Net cash used for investing
activities (1,072.6) (920.1)
Cash Flows from Financing Activities
Increase in short-term
borrowings 902.4 266.3
Change in intercompany
receivables/payables 14.7 (69.3)
Proceeds from long-term borrowings 1,010.5 1,500.0
Principal payments on long-term
borrowings (1,115.9) (915.2)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (10.0) (10.0)
Other 4.0
Net cash provided by
financing activities 805.7 771.8
Effect of Exchange Rate
Changes on Cash .5
Net Increase (Decrease) in Cash
and Cash Equivalents 42.4 (7.4)
Cash and Cash Equivalents at
Beginning of Period 183.8 241.5
Cash and Cash Equivalents at End
of Period $ 226.2 $ 234.1
Page 13
<PAGE>
Notes to Interim Financial Statements
1. The "Consolidated" (Deere & Company and Consolidated
Subsidiaries) data in each of the financial statements represent
the consolidation of all Deere & Company's subsidiaries. In the
supplemental consolidating data in each of the financial
statements, "Equipment Operations" (Deere & Company with
Financial Services on the Equity Basis) include the Company's
agricultural equipment, construction equipment, commercial and
consumer equipment and special technologies 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. The supplemental
"Financial Services" consolidating data in each of the financial
statements include Deere & Company's credit, insurance and health
care operations. The insurance operations were sold during the
fourth quarter of 1999.
2. Dividends declared and paid on a per share basis were as
follows:
Three Months Ended Six Months Ended
April 30 April 30
2000 1999 2000 1999
---------------- ----------------
Dividends declared $.22 $.22 $.44 $.44
Dividends paid $.22 $.22 $.44 $.44
3. The calculation of primary net income per share is based on
the average number of shares outstanding during the six months
ended April 30, 2000 and 1999 of 234.0 million and 232.2 million,
respectively. The calculation of diluted net income per share
recognizes primarily the dilutive effect of the assumed exercise
of stock options.
4. Comprehensive income, which includes all changes in the
Company's equity during the period except transactions with
stockholders, was as follows in millions of dollars:
Three Months Six Months
Ended April 30 Ended April 30
2000 1999 2000 1999
--------------- ---------------
Net income $204.3 $150.1 $242.0 $199.8
Other comprehensive income
(loss), net of tax:
Change in cumulative
translation adjustment (40.0) (2.4) (34.6) (11.5)
Unrealized gain (loss) on
marketable securities (.3) (2.3) (5.2) 2.2
------ ------ ------ ------
Comprehensive income $164.0 $145.4 $202.2 $190.5
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