UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------
FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 31, 2000
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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 January 31, 2000, 234,039,275 shares of common stock, $1
par value, of the registrant were outstanding.
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Page 1 of 21 Pages.
Index to Exhibits: Page 19
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Consolidated Subsidiaries)
Millions of dollars except per Three Months Ended
share amounts January 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $1,880.0 $1,973.2
Finance and interest income 303.4 259.0
Insurance and health care premiums 112.5 179.8
Investment income 9.1 18.7
Other income 34.3 27.8
Total 2,339.3 2,458.5
Costs and Expenses
Cost of goods sold 1,552.5 1,653.8
Research and development expenses 102.6 95.9
Selling, administrative and general
expenses 315.4 301.8
Interest expense 146.8 134.1
Insurance and health care claims
and benefits 90.3 153.9
Other operating expenses 71.9 42.7
Total 2,279.5 2,382.2
Income of Consolidated Group
Before Income Taxes 59.8 76.3
Provision for income taxes 20.8 26.5
Income of Consolidated Group 39.0 49.8
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .1 .4
Other (1.4) (.5)
Total (1.3) (.1)
Net Income $ 37.7 $ 49.7
Per Share:
Net income - basic $ .16 $ .21
Net income - diluted $ .16 $ .21
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for the "Equipment Operations" and
"Financial Services". Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated" data.
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Financial Services
on the Equity Basis)
Millions of dollars except per Three Months Ended
share amounts January 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $1,880.0 $1,973.2
Finance and interest income 25.0 21.8
Insurance and health care premiums
Investment income 6.6
Other income 22.5 15.5
Total 1,934.1 2,010.5
Costs and Expenses
Cost of goods sold 1,556.8 1,658.5
Research and development expenses 102.6 95.9
Selling, administrative and general
expenses 239.4 207.8
Interest expense 36.8 39.9
Insurance and health care claims
and benefits
Other operating expenses 7.6 (2.2)
Total 1,943.2 1,999.9
Income of Consolidated Group
Before Income Taxes (9.1) 10.6
Provision for income taxes (4.0) 3.8
Income of Consolidated Group (5.1) 6.8
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 41.0 41.6
Other 1.8 1.3
Total 42.8 42.9
Net Income $ 37.7 $ 49.7
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Millions of dollars except per Three Months Ended
share amounts January 31
(Unaudited) 1999 1998
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 282.9 $ 240.7
Insurance and health care premiums 117.6 186.6
Investment income 2.5 18.7
Other income 19.2 20.7
Total 422.2 466.7
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 76.9 95.2
Interest expense 114.5 97.6
Insurance and health care claims
and benefits 90.3 155.7
Other operating expenses 71.6 52.5
Total 353.3 401.0
Income of Consolidated Group
Before Income Taxes 68.9 65.7
Provision for income taxes 24.7 22.7
Income of Consolidated Group 44.2 43.0
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .1 .4
Other .1
Total .2 .4
Net Income $ 44.4 $ 43.4
Page 2
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
Millions of dollars January 31 October 31 January 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 297.5 $ 295.5 $ 325.5
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 297.5 295.5 325.5
Marketable securities 115.5 315.5 870.8
Receivables from
unconsolidated subsidiaries
and affiliates 20.4 30.2 48.4
Trade accounts and notes
receivable - net 3,180.1 3,251.1 3,828.8
Financing receivables - net 6,998.4 6,742.6 6,696.7
Other receivables 258.1 273.9 519.3
Equipment on operating
leases - net 1,752.7 1,654.7 1,256.5
Inventories 1,781.0 1,294.3 1,614.7
Property and equipment - net 1,751.3 1,782.3 1,674.3
Investments in unconsolidated
subsidiaries and affiliates 166.0 151.5 173.8
Intangible assets - net 294.1 295.1 212.0
Prepaid pension costs 621.4 619.9 662.3
Other assets 199.3 185.5 103.5
Deferred income taxes 625.8 598.1 400.2
Deferred charges 82.8 88.0 116.4
Total $18,144.4 $17,578.2 $18,503.2
Liabilities and Stockholders'
Equity
Short-term borrowings $ 5,493.0 $ 4,488.2 $ 5,871.2
Payables to unconsolidated
subsidiaries and affiliates 31.5 15.5 31.9
Accounts payable and
accrued expenses 2,327.7 2,432.8 2,359.5
Insurance and health care
claims and reserves 60.7 55.4 402.9
Accrued taxes 120.0 144.8 141.7
Deferred income taxes 61.8 63.0 18.3
Long-term borrowings 3,457.2 3,806.2 3,275.7
Retirement benefit accruals
and other liabilities 2,497.7 2,478.0 2,373.5
Total liabilities 14,049.6 13,483.9 14,474.7
Common stock, $1 par value
(issued shares at January 31,
2000 - 265,878,758) 1,855.4 1,850.4 1,788.5
Common stock in treasury (1,460.4) (1,469.4) (1,479.9)
Unamortized restricted stock
compensation (21.5) (21.3) (25.1)
Retained earnings 3,841.5 3,855.3 3,824.3
Total 4,215.0 4,215.0 4,107.8
Accumulated other comprehensive
income (loss) (120.2) (120.7) (79.3)
Stockholders' equity 4,094.8 4,094.3 4,028.5
Total $18,144.4 $17,578.2 $18,503.2
See Notes to Interim Financial Statements. Supplemental
consolidating data are shown for the "Equipment Operations" and
"Financial Services." Transactions between the "Equipment
Operations" and "Financial Services" have been eliminated to
arrive at the "Consolidated" data.
<PAGE>
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED (Deere & Company with Financial
BALANCE SHEET Services on the Equity Basis)
Millions of dollars January 31 October 31 January 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 116.1 $ 111.7 $ 80.3
Cash deposited with 117.4 92.8
unconsolidated subsidiaries 116.1 229.1 173.1
Cash and cash equivalents 205.3
Marketable securities
Receivables from
unconsolidated subsidiaries
and affiliates 280.6 266.0 227.4
Trade accounts and notes
receivable - net 3,180.1 3,251.1 3,828.8
Financing receivables - net 89.2 118.4 83.4
Other receivables 122.8 129.4 42.2
Equipment on operating
leases - net 1.8 2.6
Inventories 1,781.0 1,294.3 1,614.7
Property and equipment - net 1,706.2 1,738.8 1,625.7
Investments in unconsolidated
subsidiaries and affiliates 1,431.6 1,362.8 1,693.9
Intangible assets - net 293.8 294.8 204.8
Prepaid pension costs 621.4 619.9 662.3
Other assets 104.0 95.7 73.9
Deferred income taxes 620.1 592.9 379.1
Deferred charges 76.3 80.8 85.5
Total $10,425.0 $10,281.9 $10,694.8
Liabilities and Stockholders'
Equity
Short-term borrowings $ 933.9 $ 642.2 $ 2,076.2
Payables to unconsolidated
subsidiaries and affiliates 60.5 15.5 31.9
Accounts payable and
accrued expenses 1,706.8 1,891.9 1,473.8
Insurance and health care
claims and reserves
Accrued taxes 105.7 138.1 136.3
Deferred income taxes 7.4 7.2 5.5
Long-term borrowings 1,040.9 1,036.1 601.2
Retirement benefit accruals
and other liabilities 2,475.0 2,456.6 2,341.4
Total liabilities 6,330.2 6,187.6 6,666.3
Common stock, $1 par value
(issued shares at January 31,
2000 - 265,878,758) 1,855.4 1,850.4 1,788.5
Common stock in treasury (1,460.4) (1,469.4) (1,479.9)
Unamortized restricted stock
compensation (21.5) (21.3) (25.1)
Retained earnings 3,841.5 3,855.3 3,824.3
Total 4,215.0 4,215.0 4,107.8
Accumulated other comprehensive
income (loss) (120.2) (120.7) (79.3)
Stockholders' equity 4,094.8 4,094.3 4,028.5
Total $10,425.0 $10,281.9 $10,694.8
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
Millions of dollars January 31 October 31 January 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 181.4 $ 183.8 $ 245.2
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 181.4 183.8 245.2
Marketable securities 115.5 110.1 870.8
Receivables from
unconsolidated subsidiaries
and affiliates 29.1 4.8 6.7
Trade accounts and notes
receivables - net
Financing receivables - net 6,909.3 6,624.2 6,613.2
Other receivables 135.3 144.5 477.1
Equipment on operating
leases - net 1,750.9 1,652.2 1,256.5
Inventories
Property and equipment - net 45.1 43.5 48.6
Investments in unconsolidated
subsidiaries and affiliates 11.1 9.9 20.9
Intangible assets - net .3 .3 7.2
Prepaid pension costs
Other assets 95.2 89.8 29.6
Deferred income taxes 5.6 5.2 21.0
Deferred charges 6.6 7.2 30.9
Total $9,285.4 $8,875.5 $9,627.7
Liabilities and Stockholders'
Equity
Short-term borrowings $4,559.1 $3,846.0 $3,795.0
Payables to unconsolidated
subsidiaries and affiliates 260.2 358.1 278.5
Accounts payable and
accrued expenses 620.9 540.8 885.6
Insurance and health care
claims and reserves 60.7 55.4 402.9
Accrued taxes 14.3 6.8 5.4
Deferred income taxes 54.4 55.8 12.8
Long-term borrowings 2,416.3 2,770.1 2,674.6
Retirement benefit accruals
and other liabilities 22.7 21.3 32.1
Total liabilities 8,008.6 7,654.3 8,086.9
Common stock, $1 par value
(issued shares at January 31,
2000 - 265,878,758) 241.4 229.1 247.5
Common stock in treasury
Unamortized restricted stock
compensation
Retained earnings 1,045.1 1,005.6 1,284.5
Total 1,286.5 1,234.7 1,532.0
Accumulated other comprehensive
income (loss) (9.7) (13.5) 8.8
Stockholders' equity 1,276.8 1,221.2 1,540.8
Total $9,285.4 $8,875.5 $9,627.7
Page 3
<PAGE>
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Three Months Ended
January 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $ 37.7 $ 49.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (454.3) (446.8)
Net cash provided by (used for)
operating activities (416.6) (397.1)
Cash Flows from Investing Activities
Collections of financing
receivables 1,794.8 1,598.4
Proceeds from sales of financing
receivables 71.3 102.1
Proceeds from maturities and sale of
marketable securities 215.5 37.3
Proceeds from sales of equipment on
operating leases 61.7 38.1
Cost of financing receivables
acquired (2,007.8) (2,042.2)
Purchases of marketable securities (19.4) (33.8)
Purchases of property and equipment (37.3) (54.9)
Cost of operating leases acquired (209.5) (125.2)
Acquisitions of businesses, net of
cash acquired (14.9)
Other 69.1 71.8
Net cash provided by (used for)
operating activities (76.5) (408.4)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 733.2 541.7
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 162.7 675.0
Principal payments on long-term
borrowings (353.5) (297.5)
Proceeds from issuance of
common stock 4.5 .4
Repurchases of common stock (46.1)
Dividends paid (51.4) (51.7)
Other
Net cash provided by
financing activities 495.5 821.8
Effect of Exchange Rate
Changes on Cash (.4) (.5)
Net Increase (Decrease) in Cash
and Cash Equivalents 2.0 15.8
Cash and Cash Equivalents at
Beginning of Period 295.5 309.7
Cash and Cash Equivalents at
End of Period $ 297.5 $ 325.5
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>
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED STATEMENT OF (Deere & Company with
CONSOLIDATED CASH FLOWS Financial Services on the
Equity Basis)
Three Months Ended
January 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $ 37.7 $ 49.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (601.8) (566.4)
Net cash provided by (used for)
operating activities (564.1) (516.7)
Cash Flows from Investing Activities
Collections of financing
receivables 30.0 7.5
Proceeds from sales of financing
receivables
Proceeds from maturities and sale of
marketable securities 202.8
Proceeds from sales of equipment on
operating leases .1
Cost of financing receivables
acquired (.3) (9.0)
Purchases of marketable securities
Purchases of property and equipment (34.7) (50.9)
Cost of operating leases acquired (.3)
Acquisitions of businesses, net of
cash acquired (13.8)
Other 1.8 3.5
Net cash provided by (used for)
investing activities 185.6 (48.9)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 276.6 561.2
Change in intercompany
receivables/payables 36.4 17.6
Proceeds from long-term borrowings 50.0
Principal payments on long-term
borrowings
Proceeds from issuance of
common stock 4.5 .4
Repurchases of common stock (46.1)
Dividends paid (51.4) (51.7)
Other (.1)
Net cash provided by
financing activities 266.1 531.3
Effect of Exchange Rate
Changes on Cash (.6) (.5)
Net Increase (Decrease) in Cash
and Cash Equivalents (113.0) (34.8)
Cash and Cash Equivalents at
Beginning of Period 229.1 207.9
Cash and Cash Equivalents at
End of Period $116.1 $173.1
<PAGE>
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF Three Months Ended
CONSOLIDATED CASH FLOWS January 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $ 44.4 $ 43.4
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities 108.1 81.2
Net cash provided by (used for)
operating activities 152.5 124.6
Cash Flows from Investing Activities
Collections of financing
receivables 1,764.8 1,590.8
Proceeds from sales of financing
receivables 71.3 102.2
Proceeds from maturities and sale of
marketable securities 12.7 37.3
Proceeds from sales of equipment on
operating leases 61.6 38.1
Cost of financing receivables
acquired (2,007.4) (2,033.2)
Purchases of marketable securities (19.4) (33.8)
Purchases of property and equipment (2.6) (4.0)
Cost of operating leases acquired (209.2) (125.2)
Acquisitions of businesses, net of
cash acquired (1.1)
Other 67.2 68.3
Net cash provided by (used for)
investing activities (262.1) (359.5)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 456.6 (19.5)
Change in intercompany
receivables/payables (153.8) (64.4)
Proceeds from long-term borrowings 162.7 625.0
Principal payments on long-term
borrowings (353.5) (297.5)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (5.0) (5.0)
Other
Net cash provided by
financing activities 107.0 238.6
Effect of Exchange Rate
Changes on Cash .2
Net Increase (Decrease) in Cash
and Cash Equivalents (2.4) 3.7
Cash and Cash Equivalents at
Beginning of Period 183.8 241.5
Cash and Cash Equivalents at End
of Period $181.4 $245.2
Page 4
<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, 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.
FINANCIAL SERVICES - These data include the Company's credit,
insurance and health care operations. The insurance operations
were sold in the fourth quarter of 1999.
CONSOLIDATED - These data represent the consolidation of the
Equipment Operations and Financial Services. 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 Ended
January 31
2000 1999
Balance, beginning of period $3,855.3 $3,839.5
Net income 37.7 49.7
Dividends declared (51.5) (50.7)
Other (14.2)
Balance, end of period $3,841.5 $3,824.3
Page 5
<PAGE>
(4) An analysis of the cumulative adjustment follows in millions
of dollars:
Three Months Ended
January 31
2000 1999
Balance, beginning of period $(107.4) $(80.5)
Translation adjustment 9.4 (7.4)
Income taxes applicable to
translation adjustments (4.0) (1.7)
Balance, end of period $(102.0) $(89.6)
(5) Substantially all inventories owned by Deere & Company and
its United States equipment subsidiaries are valued at cost on
the "last-in, first-out" (LIFO) method. If all of the Company's
inventories had been valued on a "first-in, first-out" (FIFO)
method, estimated inventories by major classification in millions
of dollars would have been as follows:
January 31 October 31 January 31
2000 1999 1999
Raw Materials and supplies $ 375 $ 257 $ 341
Work-in-process 459 370 555
Finished machines and parts 2,004 1,721 1,776
Total FIFO value 2,838 2,348 2,672
Adjustment to LIFO basis 1,057 1,054 1,057
Inventories $1,781 $1,294 $1,615
(6) At January 31, 2000, the net unpaid balance of all retail
notes previously sold by the Financial Services operations was
$2,348 million and the Company's maximum exposure under all
related recourse provisions was $169 million. At January 31,
2000, the Company had commitments of approximately $84 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
January 31
2000 1999
Dividends declared $.22 $.22
Dividends paid $.22 $.22
Page 6
<PAGE>
(8) Worldwide net sales and revenues, operating profit and
identifiable assets by segment in millions of dollars follow:
Three Months Ended
January 31
%
2000 1999 Change
Net sales:
Agricultural equipment* $ 1,035 $ 1,157 - 11
Construction equipment 338 387 - 13
Commercial and consumer equipment 493 429 + 15
Other 14
Total net sales 1,880 1,973 - 5
Credit revenues 301 261 + 15
Other revenues 158 225 - 30
Total net sales and revenues** $ 2,339 $ 2,459 - 5
Operating profit***:
Agricultural equipment $ 14 $ 18 - 22
Construction equipment 11 25 - 56
Commercial and consumer equipment 9 12 - 25
Credit 64 65 - 2
Other (9) (3) +200
Total operating profit** 89 117 - 24
Interest, corporate expenses-net and
income taxes (51) (67) - 24
Net income $ 38 $ 50 - 24
Identifiable assets:
Agricultural equipment $ 4,188 $ 4,921 - 15
Construction equipment 832 935 - 11
Commercial and consumer equipment 2,294 1,859 + 23
Credit 9,076 8,385 + 8
Other 320 1,252 - 74
Corporate 1,434 1,151 + 25
Total assets $18,144 $18,503 - 2
* Additional intersegment sales
of agricultural equipment $ 21 $ 27 - 22
** Includes overseas equipment
operations as follows:
Net sales $ 551 $ 572 - 4
Operating profit 33 54 - 39
*** Operating profit is income before interest expense, foreign
exchange gains and losses, income taxes and certain corporate
expenses. However, operating profit of the credit segment
includes the effect of interest expense.
Page 7
<PAGE>
(9) A reconciliation of basic and diluted net income per share
in millions, except per share amounts, follows:
Three Months Ended
January 31
2000 1999
Net income $37.7 $ 49.7
Average shares outstanding 233.9 231.7
Basic net income per share $ .16 $ .21
Average shares outstanding 233.9 231.7
Effect of dilutive securities:
Stock options 2.4 .9
Other .1
Total potential shares outstanding 236.3 232.7
Diluted net income per share $ .16 $ .21
Stock options to purchase 2.9 million shares during the
first quarter of 2000 and 4.3 million shares during the first
quarter of 1999 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 period.
(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,
software licensing, 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) 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 Ended
January 31
2000 1999
Net income $37.7 $49.7
Other comprehensive income (loss),
net of tax:
Change in cumulative translation
adjustment 5.4 (9.1)
Unrealized gain (loss) on
marketable securities (4.9) 4.5
Comprehensive income $38.2 $45.1
Page 8
<PAGE>
(12) In December 1999, the Company granted options to employees
for the purchase of 5.2 million shares of common stock at an
exercise price of $41.47 per share. At January 31, 2000, options
for 17.0 million shares were outstanding at option prices in a
range of $13.63 to $82.19 per share and a weighted-average
exercise price of $39.56 per share. A total of 2.8 million
shares remained available for the granting of future options.
(13) On December 13, 1999, the Company announced an agreement to
acquire Timberjack Group, headquartered in Helsinki, Finland for
approximately $600 million. Subject to regulatory approvals, the
transaction is expected to close in the year 2000. Timberjack
Group, a leading manufacturer of forestry equipment, reported
annual sales of $580 million in 1998. This acquisition will
broaden the forestry product line and customer base for the
company's construction equipment segment.
(14) In the first quarter of 2000, the Company invested $21
million for a 41 percent interest in Nortrax, a joint venture to
assist in the consolidation, development and management of the
Company's construction equipment dealers. This acquisition did
not have a material effect on the Company's financial position or
results of operations.
Page 9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Deere & Company's first-quarter net income was $37.7 million, or
$.16 per share, compared with $49.7 million, or $.21 per share,
in last year's first quarter. Depressed agricultural commodity
prices continued to severely affect demand for agricultural
equipment during the period. Production schedules in
agricultural and construction equipment were at planned low
levels during the quarter, reflecting improved order-fulfillment
processes in construction equipment and the balancing of
agricultural equipment production with present levels of demand.
In addition, the first quarter has historically been the
seasonally weakest period for the industry.
Worldwide net sales and revenues for the quarter decreased 5
percent, to $2,339 million, compared with $2,459 million last
year. Net equipment sales were $1,880 million for the quarter,
compared with $1,973 million last year. Overseas net sales for
the quarter were $551 million, compared with $572 million the
previous year. Excluding the impact of the stronger U.S. dollar,
overseas sales for the quarter would have shown a 4 percent
increase over last year. Overall, the Company's physical volume
of sales decreased 3 percent for the period.
Worldwide equipment operations had an operating profit of $20
million for the first quarter of 2000, compared with $51 million
last year. Lower sales, an adverse sales mix and product
development costs of the newly formed special technologies group,
partially offset by lower pension costs, affected this year's
results.
. Operating profit of the worldwide agricultural equipment
segment for the first quarter of 2000 was $14 million, compared
with $18 million last year. Results for the quarter reflected
the impact of lower sales, as well as cost reductions and
improved efficiencies from the restructuring activities of these
operations. Significantly, North American used goods receivables
continued to decline during the quarter. Overseas agricultural
equipment sales, excluding the impact of the stronger U.S. dollar
for the quarter, were slightly higher than last year. The
overseas operations continued to be positive contributors to the
segment's results.
. Operating profit of the worldwide construction equipment
segment for the quarter was $11 million, compared with $25
million last year. Lower sales and production volumes affected
this year's quarterly results, due to full implementation of the
estimate-to-cash program, anticipated lower demand and a reversal
of sales and cost of sales related to Company equipment held in
inventory by a recently established joint venture.
. Operating profit of the worldwide commercial and consumer
equipment segment for the quarter was $9 million, compared with
$12 million last year. Although the segment's sales continued to
increase, operations were adversely affected by higher selling
and administrative costs related to growth, as well as by
inefficiencies and costs related to the relocation of the
handheld product operations.
. Net income of the Company's credit operations was $41 million
in the first quarter of 2000, compared with $42 million in last
year's first quarter. This quarter's results were affected by
higher operating costs and lower income from the sale of retail
notes, partially offset by higher income from a larger average
receivable and lease portfolio. Total revenues of the credit
operations increased 16 percent from $261
Page 10
<PAGE>
million in the first quarter of 1999 to $302 million in the
current quarter. The average balance of receivables and leases
financed was 10 percent higher in the first quarter, compared
with the same period last year. Interest expense increased 18
percent in the current quarter, compared with 1999, as a result
of an increase in average borrowings and higher borrowing rates.
The credit operations' consolidated ratio of earnings to fixed
charges was 1.55 to 1 for the first quarter this year, compared
with 1.63 to 1 in 1999.
. The Company's other businesses had operating losses of $9
million for the first quarter, compared with operating losses of
$3 million last year. Current-year results reflected goodwill
amortization and higher costs related to the development of new
products of the special technologies group. Partially offsetting
these factors was higher operating profit of the health care
operations.
Additional information on business segments is presented in Note
8 to the interim financial statements.
Insurance and health care premiums have decreased to $113 million
in the first quarter this year, compared to $180 million in the
same period last year, while corresponding claims and benefits
expenses have also decreased to $90 million this year, compared
to $154 million last year, due to the sale of the insurance
subsidiaries in the fourth quarter of 1999. Other operating
expenses have increased to $72 million this year, compared to $43
million last year, primarily as a result of an increase in the
depreciation of equipment on operating leases due to the growth
in the credit operations' portfolio.
MARKET CONDITIONS AND OUTLOOK
. AGRICULTURAL EQUIPMENT. In January, the USDA lowered its
estimates of carryover stocks, following a change in the
assessment of the size of the 1999 corn crop and increased usage.
Although grain and oilseed prices have improved slightly on this
news and on concerns about dryness in certain areas of the United
States, prices remain at low levels and demand for farm equipment
remains very weak. At this time, the Company continues to expect
that industry retail sales of farm machinery in North America
will be off approximately 5 to 10 percent this year, compared
with 1999 levels. Similar declines are expected in other major
markets.
. CONSTRUCTION EQUIPMENT. The market for these products remains
extremely competitive. In addition, the Federal Reserve
continues its efforts to slow the economy through a series of
increases in short-term interest rates. In this environment, the
Company continues to expect construction industry sales to be
down 5 to 10 percent for the year. Retail sales of the Company's
products, however, are expected to be higher in the remainder of
the year due to an expanded product line. Additionally,
production for the year 2000 is expected to benefit from tracking
more closely with retail demand than was the case in 1999 when
dealers were reducing their inventories.
. COMMERCIAL AND CONSUMER EQUIPMENT. Continuing a trend of
strong gains, retail demand for the Company's commercial and
consumer equipment is expected to achieve further growth this
year, assuming normal weather patterns and a continuation of
current economic conditions. These operations should continue to
benefit from market share growth, positive customer response to
recently introduced products and international expansion.
. CREDIT OPERATIONS. Credit is expected to continue benefiting
from a larger receivable and lease portfolio this year. However,
higher growth expenditures, lower gains on the sale of retail
notes and continued weakness in the agricultural economy are
expected to keep pressure on margins and have an adverse effect
on this year's results.
Page 11
<PAGE>
Based on these conditions, the Company continues to expect its
worldwide physical volume of sales to increase by approximately
10 percent for the year 2000. Second-quarter physical volumes
are expected to be about 15 percent higher than in the comparable
1999 period.
The Company's results are clearly benefiting from an aggressive
and timely response to market conditions, as well as from the
pursuit of its growth and quality initiatives. In spite of a
market that continues to be challenging, the Company is on track
to achieve improved results this year.
YEAR 2000
No public infrastructure problems or any facilities related
problems were encountered by John Deere locations during the
rollover to the year 2000. After extensive system verification
and testing, the Company's systems are operating normally. The
Company is not aware of any significant issues related to the
Year 2000 problem. The total cost of the modifications and
upgrades to date has been approximately $46 million since the
beginning of 1997 and the future costs are not expected to be
significant. These costs were expensed as incurred and did not
include the cost of scheduled replacement software. Other major
systems projects were not deferred due to the Year 2000
compliance projects.
EURO CONVERSION
The Company is well advanced in the process of identification,
implementation and testing of its systems to adopt the euro
currency in its operations affected by this change. The
Company's affected suppliers, distribution network and financial
institutions have been contacted and the Company does not believe
the currency change will significantly impact these
relationships. As a result, the Company expects to have its
systems ready to process the euro conversion during the
transition period from January 1, 1999 through January 1, 2002.
The cost of information systems modifications, effects on product
pricing and purchase contracts, and the impact on foreign
currency financial instruments, including derivatives, are not
expected to be material.
SAFE HARBOR STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Statements under the "Market Conditions and
Outlook" and "Euro Conversion" headings 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; technological difficulties;
accounting standards; and other risks and uncertainties. The
impact and timing of the previously announced Timberjack
acquisition is uncertain, including the impact of post-merger
integration costs and the amortization of intangibles.
Page 12
<PAGE>
The number of housing starts is especially important to sales of
construction equipment. Sales of commercial and consumer
equipment during the spring are affected by the severity and
timing of spring weather 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 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 three months of 2000, negative cash flows from
operating activities of $564 million resulted primarily from an
increase in Company-owned inventories and a decrease in accounts
payable and accrued expenses. Partially offsetting these
operating cash outflows were positive cash flows from a decrease
in trade receivables and from net income. The resulting net cash
requirement for operating activities, along with payment of
dividends and purchases of property and equipment, were provided
primarily from an increase in borrowings and sales of marketable
securities.
Negative cash flows from operating activities in the first three
months of 1999 of $517 million resulted primarily from a decrease
in accounts payable and accrued expenses and an increase in
Company-owned inventories. Partially offsetting these operating
cash outflows were positive cash flows from a decrease in trade
receivables and from net income. The resulting net cash
requirement for operating activities, along with payment of
dividends, purchases of property and equipment and repurchases of
common stock, were provided primarily from an increase in
borrowings.
Trade accounts and notes receivable result mainly from sales to
dealers of equipment that is being carried in their inventories.
Trade receivables decreased $71 million during the first three
months of 2000 and $649 million, compared to one year ago. Trade
receivables for agricultural equipment declined from a year ago
primarily due to production schedules being set below the levels
of retail demand, and construction equipment receivables were
lower as dealers reduced their inventories. Commercial and
consumer equipment trade receivables were higher than a year ago
primarily due to higher sales volumes. North American
agricultural equipment and construction equipment trade
receivables decreased $700 million and $136 million,
respectively, compared to a year ago. North American commercial
and consumer equipment receivables increased $179 million and
other equipment receivables increased $12 million, compared with
the levels 12 months earlier. Total overseas trade receivables
were $4 million lower than a year ago due to the impact of weaker
foreign currency exchange rates. The ratios of worldwide trade
accounts and notes receivable to the last 12 months' net sales
were 33 percent at January 31, 2000, compared to 34 percent at
October 31, 1999 and 33 percent at January 31, 1999. The
percentage of total worldwide trade receivables outstanding for
periods exceeding 12 months was 11 percent, 12 percent and 7
percent at January 31, 2000, October 31, 1999 and January 31,
1999, respectively.
Page 13
<PAGE>
Company inventories at January 31, 2000 increased by $487 million
during the first three months and $166 million during the past 12
months, primarily reflecting a seasonal increase in the first
quarter and the higher sales volumes and start-up of new
facilities of the commercial and consumer equipment segment.
Also contributing to a higher inventory level was the financial
consolidation of the Company's agricultural equipment operations
in Brazil during the third quarter of 1999. 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 6 percent from a year ago.
Total interest-bearing debt of the Equipment Operations was
$1,975 million at January 31, 2000, compared with $1,678 million
at the end of fiscal year 1999, and $2,677 million at January 31,
1999. The ratio of total debt to total capital (total interest-
bearing debt and stockholders' equity) was 33 percent, 29 percent
and 40 percent at January 31, 2000, October 31, 1999 and January
31, 1999, respectively.
FINANCIAL SERVICES
The Financial Services' credit operations 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 operations periodically sell substantial
amounts of retail notes.
During the first quarter of 2000, 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 $153 million in the
current quarter. Cash provided by financing activities totaled
$107 million in the first three months of 2000, primarily
resulting from $112 million of proceeds from total borrowings,
which was partially offset by payment of a $5 million dividend to
the Equipment Operations. Cash used for investing activities
totaled $262 million in the current quarter, primarily due to the
cost of financing receivables and leases acquired exceeding
collections of financing receivables, sales of retail notes and
sales of equipment on operating leases.
In the first quarter of 1999, 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 $125 million in the first
quarter of 1999. Cash provided by financing activities totaled
$239 million in the first three months of 1999, primarily
resulting from $244 million of proceeds from total borrowings,
which was partially offset by payment of a $5 million dividend to
the Equipment Operations. Cash used for investing activities
totaled $360 million in the first quarter of 1999, primarily due
to the cost of financing receivables and leases acquired
exceeding collections of financing receivables and sales of
retail notes.
Marketable securities held by Financial Services have decreased
$755 million, compared to a year ago. The insurance
subsidiaries, including their investment portfolio, were sold in
the fourth quarter of 1999. In addition, the marketable
securities transferred from the insurance subsidiaries to Deere &
Company before the sale were liquidated during the first quarter
of 2000. The remaining marketable securities consist of those
held by the health care subsidiaries.
Financing receivables and leases held by the credit operations
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. These receivables and leases
increased by $384 million in the first three months of 2000 and
$791 million during the past 12 months due to the cost of
financing receivables and leases acquired exceeding collections
Page 14
<PAGE>
and sales of retail notes, and the acquisitions of certain credit
operations during these periods. Total acquisitions of financing
receivables and leases were 3 percent higher in the first three
months of 2000, compared with the same period last year.
Acquisition volumes of leases, revolving charge accounts and
wholesale notes were all higher in the first three months of
2000, compared to the same period last year. Financing
receivables and leases administered by the credit operations,
which include receivables previously sold, amounted to $11,008
million at January 31, 2000, compared with $10,992 million at
October 31, 1999 and $9,820 million at January 31, 1999. At
January 31, 2000, the unpaid balance of all retail notes
previously sold was $2,348 million, compared with $2,716 million
at October 31, 1999 and $1,951 million at January 31, 1999.
Total outside interest-bearing debt of the credit operations was
$6,975 million at January 31, 2000, compared with $6,616 million
at the end of fiscal year 1999 and $6,470 million at January 31,
1999. Total outside borrowings increased during the first three
months of 2000 and the past 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 operations' ratio
of total interest-bearing debt to stockholder's equity was 6.0 to
1 at January 31, 2000, compared with 6.0 to 1 at October 31, 1999
and 6.2 to 1 at January 31, 1999.
During the first quarter of 2000, the credit operations issued
$150 million and retired $292 million medium-term notes. The
credit operations also issued $13 million and retired $62 million
of other miscellaneous long-term debt.
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
operations. Worldwide lines of credit totaled $6,054 million at
January 31, 2000, $3,189 million of which were unused. For the
purpose of computing unused credit lines, commercial paper and
short-term bank 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.
Stockholder's equity was $4,095 million at January 31, 2000,
compared with $4,094 million at October 31, 1999 and $4,029
million at January 31, 1999. During the first quarter of 2000,
the net income and other minor changes in equity were mostly
offset by dividends declared.
The Board of Directors at its meeting on February 23, 2000
declared a quarterly dividend of 22 cents per share payable May
1, 2000 to stockholders of record on March 31, 2000.
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.
Page 15
<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
The Company issued 118,088 shares of stock during the quarter in
connection with an acquisition. These shares were not registered
under the Securities Act of 1933 (the "Securities Act") in
reliance upon the exemption provided by Section 4 (2) of the
Securities Act for transactions by an issuer not involving a
public offering.
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 23,
2000:
a. the following directors were elected for terms
expiring at the annual meeting in 2003:
Votes
Votes For Withheld
--------- --------
Crandall C. Bowles 194,844,740 3,590,070
Leonard A. Hadley 194,841,204 3,593,606
Arthur L. Kelly 194,870,703 3,564,107
Thomas H. Patrick 194,857,431 3,577,379
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 2002.
Hans W. Becherer, Antonio Madero B., John R.
Stafford and John R. Walter continue to serve as
directors of the Company for terms expiring at the
annual meeting in 2001.
b. pursuant to a nomination from the floor, Steve
Baugher received 372 votes for his election as a
director.
c. the John Deere Omnibus Equity and Incentive Plan
was approved:
Shares Voted
Shares Voted Against Shares Broker
For Proposal Proposal Abstaining Non-Votes
------------ ------------ ---------- ---------
162,597,146 13,281,348 1,132,012 21,424,304
Page 16
<PAGE>
d. the performance goals under the John Deere
Performance Bonus Plan were re-approved:
Shares Voted For Shares Voted Against Shares
Proposal Proposal Abstaining
---------------- -------------------- ----------
190,720,572 6,595,615 1,118,623
e. the performance goals under the John Deere Equity
Incentive Plan were re-approved:
Shares Voted For Shares Voted Against Shares
Proposal Proposal Abstaining
---------------- -------------------- ----------
192,512,267 4,772,171 1,150,372
f. a stockholder proposal from the floor to establish
a committee to review situations involving
dissatisfied customers was not approved:
Shares Voted For Shares Voted Against Shares
Proposal Proposal Abstaining
---------------- -------------------- ----------
632 198,434,178 0
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 November 24, 1998 (Item 7).
Current Report on Form 8-K dated December 13, 1999 (Item 7).
Page 17
<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 thereunto duly authorized.
DEERE & COMPANY
Date: March 13, 2000 By: s/ NATHAN J. JONES
Nathan J. Jones
Senior Vice President
Principal Financial Officer
and Principal Accounting Officer
Page 18
<PAGE>
INDEX TO EXHIBITS
Number
- ------
2 Not applicable
3 Not applicable
4 Not applicable
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 19
EXHIBIT 12
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Three Months Year
Ended Ended
January 31, October 31,
2000 1999 1999
(In thousands of dollars)
Earnings:
Income of consolidated group
before income taxes
and changes in accounting $ 59,761 $ 76,315 $365,135
Dividends received from less-
than-fifty percent owned
affiliates 394 5,734
Fixed charges excluding
capitalized interest 150,617 137,187 571,949
Total earnings $210,378 $213,896 $942,818
Fixed charges:
Interest expense of con-
solidated group including
capitalized interest $146,780 $134,497 $557,740
Portion of rental charges
deemed to be interest 3,837 3,113 15,347
Total fixed charges $150,617 $137,610 $573,087
Ratio of earnings to
fixed charges* 1.40 1.55 1.65
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>
DEERE & COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended
October 31,
1998 1997
(In thousands of dollars)
Earnings:
Income of consolidated group
before income taxes
and changes in accounting $1,560,032 $1,507,070
Dividends received from less-
than-fifty percent owned
affiliates 5,555 3,591
Fixed charges excluding
capitalized interest 531,817 433,673
Total earnings $2,097,404 $1,944,334
Fixed charges:
Interest expense of con-
solidated group including
capitalized interest $ 521,418 $ 422,588
Portion of rental charges
deemed to be interest 12,451 11,497
Total fixed charges $ 533,869 $ 434,085
Ratio of earnings to
fixed charges* 3.93 4.48
<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
<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> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<EXCHANGE-RATE> 1.0
<CASH> 298
<SECURITIES> 116
<RECEIVABLES> 10,587
<ALLOWANCES> 130
<INVENTORY> 1,781
<CURRENT-ASSETS> 0
<PP&E> 4,890
<DEPRECIATION> 3,139
<TOTAL-ASSETS> 18,144
<CURRENT-LIABILITIES> 0
<BONDS> 3,457
0
0
<COMMON> 1,855
<OTHER-SE> 2,239
<TOTAL-LIABILITY-AND-EQUITY> 18,144
<SALES> 1,880
<TOTAL-REVENUES> 2,339
<CGS> 1,553
<TOTAL-COSTS> 1,817
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 11
<INTEREST-EXPENSE> 147
<INCOME-PRETAX> 60
<INCOME-TAX> 21
<INCOME-CONTINUING> 38
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38
<EPS-BASIC> .16
<EPS-DILUTED> .16
</TABLE>
