- -------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 15, 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.)
- --------------------------------------------------------------
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
(99) Press release and additional information.
Page 2
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: August 15, 2000
Page 3
EXHIBIT INDEX
Sequential
Number and Description of Exhibit Page Number
(99) Press release and additional information Pg. 5
Page 4
EXHIBIT 99
(DEERE LOGO)
Contact: Greg Derrick
Deere & Company
Moline, IL 61265
(309) 765-5290
FOR IMMEDIATE RELEASE - AUGUST 15, 2000
Higher Margins, Market-Share Gains
Drive Deere Profits in Third Quarter
. Third-quarter net income more than doubles, to
$172.4 million
. Physical volume climbs 30%
. Results show company gaining market share, expanding
profitability
MOLINE, Illinois -- Deere & Company today reported
worldwide net income of $172.4 million, or $0.72 per share,
for the third quarter ended July 31, representing a 150
percent increase over the $68.9 million, or $.29 per share,
earned in the same period last year. Net income for the first
nine months rose 54 percent, totaling $414.4 million, or $1.75
per share, versus $268.7 million, or $1.15 per share, last
year. The earnings increases were primarily due to improved
manufacturing efficiencies associated with higher sales and
production volumes.
"Although the farm economy continues to feel the effects
of depressed commodity prices, our third-quarter results again
show Deere remaining solidly profitable," said Robert W. Lane,
president and chief executive officer. During the quarter, the
company continued to gain market share while recording higher
profit margins, he noted. "These results speak well of our
success in profitably expanding all our businesses while at
the same time asserting leadership in the global markets we
serve."
Worldwide net sales and revenues were $3.632 billion for
the third quarter and $9.761 billion for the first nine months
of 2000, compared with $3.036 billion and $8.963 billion,
respectively, last year. Net sales of equipment were $3.122
billion for the third quarter and $8.326 billion for the first
nine months, compared with $2.489 billion and $7.420 billion
for the comparable periods a year ago. Sales rose due to an
increased physical volume and the inclusion of results of the
recently acquired Timberjack Group, partially offset by the
impact of weaker European currencies. Overseas sales were up 9
percent for the quarter and 4 percent year to date. Excluding
the impact of weaker foreign currencies, the increases were 18
percent and 13 percent. Overall, the company's physical volume
of sales rose 30 percent for the quarter and 15 percent for
the first nine months, compared with levels of a year ago.
Page 5
Worldwide equipment operations had net income of $117.5
million for the quarter and $277.8 million for the first nine
months of 2000, compared with $2.7 million and $112.3 million,
respectively, last year. The increases were primarily due to
improved manufacturing efficiencies associated with higher
sales and production volumes as well as lower pension and
post-retirement health-care costs. In addition, third-quarter
results benefited from a lower tax rate. Partially offsetting
these factors were higher sales-incentive costs and higher
selling and administrative expenses related to growth and
other initiatives.
Excluding interest costs, taxes and certain other
corporate expenses, worldwide equipment operating profit was
$249 million for the quarter, more than triple last year's
level of $82 million. Nine-month operating profit rose 79
percent, to $610 million, from $341 million a year ago.
. Products of the company's worldwide agricultural
equipment division have met with enthusiastic customer
response this year and, as a result, have made meaningful
gains in market share. Operating profit of the division has
increased sharply, to $158 million for the third quarter and
$332 million for the first nine months, compared with an
operating loss of $1 million and operating profit of $78
million for the respective periods in 1999. The increases were
primarily due to improved manufacturing efficiencies
associated with higher sales and production volumes, in
addition to lower pension and post-retirement 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 as well as higher sales-incentive costs.
Overseas results remained solidly profitable but were lower
for both periods due to the impact of weaker European
currencies, a less-favorable sales mix, higher sales-incentive
costs and higher selling and administrative expenses related
to growth.
. In the worldwide commercial and consumer equipment
division, operating profit was $46 million for the quarter and
$170 million for the first nine months, compared with $50
million and $151 million in the comparable 1999 periods.
Although the division is continuing to benefit from market-
share gains and positive customer response to new products,
recent results have come under pressure due to weaker market
conditions. The quarterly decline in operating profit was
primarily due to higher selling and administrative expenses
related to growth and other initiatives, as well as costs and
inefficiencies associated with the handheld-product and
generator operations, and the impact of a stronger Japanese
yen. Benefiting results for both periods were higher sales and
production volumes.
. Operating profit of the worldwide construction equipment
division was $60 million for the quarter and $151 million for
the first nine months, compared with $46 million and $134
million last year. The increases were primarily due to higher
sales and production volumes as well as improved efficiencies.
Sales moved up 22 percent for the quarter and 10 percent for
the nine months mainly as a result of an expanded product line
and the impact of Timberjack. Last year's sales were adversely
affected by implementation of the estimate-to-cash order-
fulfillment initiative. Having a negative impact on this
year's
Page 6
results was a reversal of sales and cost of sales related to
company equipment held in inventory by dealers acquired by
Nortrax, a recently established joint venture.
. Net income of the credit operations was $47 million for
the quarter and $124 million for the first nine months,
compared with $58 million and $141 million, respectively, last
year. The decreases were primarily due to a reduced level of
receivable sales, resulting in lower gains, and higher
operating expenses, partially offset by higher income from a
larger receivable and lease portfolio.
. The company's other businesses had operating losses of
$10 million for the quarter and $29 million for the first nine
months, compared with operating losses of $11 million and $14
million for last year's comparable periods. Current-year
results were adversely affected by costs related to the
development of new products, e-business initiatives, and
goodwill amortization of the special technologies group.
Health-care operations have generated higher profit this year,
which in the current quarter more than offset the increased
development costs in special technologies.
Market Conditions & Outlook
. Agricultural Equipment. Despite earlier forecasts of
drought, crop production is expected to be strong again this
year in the U.S. and most other regions, raising prospects for
a further increase in worldwide carryover stocks. Commodity
prices have retreated in light of this development. However,
continued high levels of direct government payments are
expected to help keep farm incomes about the same as last
year. On the basis of these factors, Deere continues to expect
North American industry-retail sales of farm machinery to be
flat to down 5 percent for this fiscal year in relation to
1999 levels. Declines of 5 to 10 percent are considered likely
in other major markets.
. While Deere's farm-equipment operations are expected to
continue outperforming previous-year results, fourth-quarter
profit will be negatively affected by normal seasonal factors
and by an increase in promotional programs to incent dealers
to reduce used-equipment levels. Further, the company believes
that weakness in the fundamentals of the farm economy is
likely to continue next year, with industry-retail sales of
farm machinery in the U.S. and Canada forecast to be flat to
down 5 percent on a preliminary basis.
. Commercial and Consumer Equipment. Although the division
should record double-digit sales gains for the year, fourth-
quarter results are expected to continue being pressured by
dry weather in certain areas and by lower housing starts and a
slowing economy.
. Construction Equipment. In spite of gains in non-
residential and public construction and an increase in
forestry activity, U.S. housing-start construction is expected
to be lower for the year due to higher interest rates. In U.S.
forestry markets, the outlook remains mixed with higher pulp
prices, due to stronger markets for paper and linerboard, but
lower prices for lumber. In this environment, Deere expects
construction-industry retail sales to be down about 10 percent
compared with last year. Retail sales of Deere
Page 7
products are expected to be higher in the remainder of the
year due to an expanded product line, including the
acquisition of Timberjack. Also benefiting the division's
performance, year-2000 production is expected to track more
closely with retail demand than was the case in 1999 when
dealers were reducing their inventories.
. 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 receivables, higher
growth expenditures and continued weakness in the agricultural
economy are expected to keep pressure on margins and have an
adverse effect on this year's results.
Based on these conditions, the company's worldwide
physical volume of sales is currently projected to increase by
17 percent for the year and 22 percent for the fourth quarter,
in comparison with 1999.
"Our aggressive approach to managing cash flows and
pursuing excellence in all our operations is allowing us to
remain profitable while making significant market-share
gains," commented Hans W. Becherer, company chairman. "John
Deere remains well-positioned to continue growing and
achieving strong levels of performance even in light of a
challenging farm economy."
John Deere Capital Corporation
The following is disclosed on behalf of the company'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 $40.5 million for the third quarter and
$109.1 million for the first nine months of 2000, compared
with $50.2 million and $124.1 million, respectively, last
year. These decreases were primarily due to lower income 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 $7.783
billion at July 31, 2000, compared with $7.170 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 $9.981 billion at July 31, 2000,
compared with $9.391 billion at July 31, 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. Some of these risks and
uncertainties could affect only particular lines of business,
while others could affect all of the company's businesses.
The results of the company's agricultural equipment
segment are strongly influenced by the many interrelated
factors that affect farmers' confidence, including worldwide
demand for
Page 8
agricultural products, world grain stocks, prices realized for
commodities and livestock, weather conditions, government farm
programs, animal diseases, crop pests and harvest yields.
Factors that are particularly important to the company's
outlook for this segment include the prices realized by
farmers for their crops and livestock, which are in turn
strongly impacted by weather and soil conditions and the level
of farm product exports, as well as the level of payments
under U.S. government farm programs. The outlook for harvest
prices especially affects retail sales of agricultural
equipment in the fall.
The company's outlook for its commercial and consumer
equipment sales assumes the continuation of current economic
conditions in the United States and is dependent on the level
of consumer confidence. Other important assumptions include
continued consumer acceptance of the company's new products
and a continuation of existing consumer borrowing patterns.
The number of housing starts is especially important to
sales of the company's construction equipment. The results of
the company's construction equipment segment are also impacted
by levels of public construction and non-residential
construction. Prices for pulp, lumber and structural panels
are important to sales of forestry equipment. In addition, the
impact of the recent Timberjack Group acquisition is
uncertain, especially the cost and success of the company's
post-merger integration efforts.
All of the company's businesses are affected by general
economic conditions in the global markets in which the company
operates, interest and currency exchange rates, as well as
monetary and fiscal policies (including actions by the Federal
Reserve Board); actions of competitors in the various
industries in which the company competes, particularly price
cutting; dealer practices, especially as to levels of new and
used field inventories; and legislation affecting the sectors
in which we operate. Other risks and uncertainties that, from
time to time, could affect the company's results include
production difficulties, such as capacity and supply
constraints; labor relations; technological difficulties; and
changes to accounting standards.
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 filings with the Securities
and Exchange Commission.
Page 9
THIRD QUARTER 2000 PRESS RELEASE
(millions of dollars and shares except per share amounts)
Net sales and revenues:
(millions of dollars except per share amounts)
Three Months Ended
July 31
%
2000 1999 Change
Net sales and revenues:
Agricultural equipment net sales $1,619 $1,229 + 32
Commercial and consumer equipment
net sales 839 717 + 17
Construction equipment net sales 649 531 + 22
Other net sales 15 12 + 25
Total net sales 3,122 2,489 + 25
Credit revenues 351 311 + 13
Other revenues 159 236 - 33
Total net sales and revenues* $3,632 $3,036 + 20
Operating profit (loss):
Agricultural equipment $ 158 $ (1)
Commercial and consumer equipment 46 50 - 8
Construction equipment 60 46 + 30
Credit 74 90 - 18
Other (10) (11) - 9
Total operating profit* 328 174 + 89
Interest, corporate expenses
and income taxes (156) (105) + 49
Net income $ 172 $ 69 +149
Per Share:
Net income - basic $ .74 $ .30 +147
Net income - diluted $ .72 $ .29 +148
* Includes overseas equipment operations:
Net sales $ 772 $ 709 + 9
Operating profit $ 47 $ 56 - 16
Net sales and revenues:
(millions of dollars except per share amounts)
Nine Months Ended
July 31
%
2000 1999 Change
Net sales and revenues:
Agricultural equipment net sales $4,329 $3,967 + 9
Commercial and consumer equipment
net sales 2,330 1,958 + 19
Construction equipment net sales 1,622 1,478 + 10
Other net sales 45 17 +165
Total net sales 8,326 7,420 + 12
Credit revenues 963 850 + 13
Other revenues 472 693 - 32
Total net sales and revenues* $9,761 $8,963 + 9
Operating profit (loss):
Agricultural equipment $ 332 $ 78 +326
Commercial and consumer equipment 170 151 + 13
Construction equipment 151 134 + 13
Credit 194 220 - 12
Other (29) (14) +107
Total operating profit* 818 569 + 44
Interest, corporate expenses
and income taxes (404) (300) + 35
Net income $ 414 $ 269 + 54
Per Share:
Net income - basic $ 1.77 $ 1.16 + 53
Net income - diluted $ 1.75 $ 1.15 + 52
* Includes overseas equipment operations:
Net sales $2,138 $2,047 + 4
Operating profit $ 154 $ 208 - 26
July 30 October 31 July 31
2000 1999 1999
Equipment Operations:
Trade accounts and notes
receivable - net $ 3,627 $ 3,251 $ 3,740
Inventories $ 1,725 $ 1,294 $ 1,428
Financial Services:
Financing receivables and
leases financed - net $ 9,260 $ 8,276 $ 8,186
Financing receivables and
leases administered -
net $11,650 $10,992 $10,727
Average shares outstanding 234.2 232.9 232.6
Page 10
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Consolidated
Subsidiaries)
Millions of dollars except per Three Months Ended
share amounts July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $3,122.2 $2,489.4
Finance and interest income 341.7 280.1
Insurance and health care premiums 117.7 184.8
Investment income 2.8 14.2
Other income 47.7 67.1
Total 3,632.1 3,035.6
Costs and Expenses
Cost of goods sold 2,487.7 2,099.2
Research and development expenses 131.0 114.7
Selling, administrative and general
expenses 384.5 338.9
Interest expense 182.0 138.9
Insurance and health care claims
and benefits 94.7 153.1
Other operating expenses 82.8 66.0
Total 3,362.7 2,910.8
Income of Consolidated Group
Before Income Taxes 269.4 124.8
Provision for income taxes 101.5 61.0
Income of Consolidated Group 167.9 63.8
Equity in Income (Loss) of
Unconsolidated Subsidiaries and
Affiliates
Credit .2 (.2)
Other 4.3 5.3
Total 4.5 5.1
Net Income $ 172.4 $ 68.9
Per Share:
Net income - basic $ .74 $ .30
Net income - diluted $ .72 $ .29
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 July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $3,122.2 $2,489.4
Finance and interest income 22.6 19.4
Insurance and health care premiums
Investment income
Other income 27.3 26.5
Total 3,172.1 2,535.3
Costs and Expenses
Cost of goods sold 2,491.8 2,103.1
Research and development expenses 131.0 114.7
Selling, administrative and general
expenses 296.7 235.1
Interest expense 51.2 38.0
Insurance and health care claims
and benefits
Other operating expenses 11.2 12.0
Total 2,981.9 2,502.9
Income of Consolidated Group
Before Income Taxes 190.2 32.4
Provision for income taxes 72.7 29.7
Income of Consolidated Group 117.5 2.7
Equity in Income (Loss) of
Unconsolidated Subsidiaries and
Affiliates
Credit 47.0 57.6
Other 7.9 8.6
Total 54.9 66.2
Net Income $ 172.4 $ 68.9
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Millions of dollars except per Three Months Ended
share amounts July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 324.6 $ 264.4
Insurance and health care premiums 122.6 193.0
Investment income 2.8 14.2
Other income 27.3 47.3
Total 477.3 518.9
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 88.0 104.0
Interest expense 136.2 104.5
Insurance and health care claims
and benefits 94.7 156.5
Other operating expenses 79.3 61.5
Total 398.2 426.5
Income of Consolidated Group
Before Income Taxes 79.1 92.4
Provision for income taxes 28.8 31.3
Income of Consolidated Group 50.3 61.1
Equity in Income (Loss) of
Unconsolidated Subsidiaries and
Affiliates
Credit .2 (.2)
Other (.1)
Total .1 (.2)
Net Income $ 50.4 $ 60.9
Page 11
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Consolidated
Subsidiaries)
Millions of dollars except per Nine Months Ended
share amounts July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $8,326.3 $7,419.7
Finance and interest income 957.3 814.1
Insurance and health care premiums 346.0 550.7
Investment income 15.6 48.9
Other income 115.9 129.1
Total 9,761.1 8,962.5
Costs and Expenses
Cost of goods sold 6,645.6 6,191.7
Research and development expenses 373.3 323.8
Selling, administrative and general
expenses 1,063.1 981.3
Interest expense 488.9 415.8
Insurance and health care claims
and benefits 279.9 459.3
Other operating expenses 227.9 158.7
Total 9,078.7 8,530.6
Income of Consolidated Group
Before Income Taxes 682.4 431.9
Provision for income taxes 271.8 170.1
Income of Consolidated Group 410.6 261.8
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit .5 .2
Other 3.3 6.7
Total 3.8 6.9
Net Income $ 414.4 $ 268.7
Per Share:
Net income - basic $ 1.77 $ 1.16
Net income - diluted $ 1.75 $ 1.15
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 Nine Months Ended
share amounts July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment $8,326.3 $7,419.7
Finance and interest income 68.8 65.1
Insurance and health care premiums
Investment income 7.7
Other income 73.4 59.3
Total 8,476.2 7,544.1
Costs and Expenses
Cost of goods sold 6,657.8 6,204.3
Research and development expenses 373.3 323.8
Selling, administrative and general
expenses 811.3 680.0
Interest expense 132.1 120.7
Insurance and health care claims
and benefits
Other operating expenses 26.8 11.2
Total 8,001.3 7,340.0
Income of Consolidated Group
Before Income Taxes 474.9 204.1
Provision for income taxes 197.1 91.8
Income of Consolidated Group 277.8 112.3
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit 124.2 141.4
Other 12.4 15.0
Total 136.6 156.4
Net Income $ 414.4 $ 268.7
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Millions of dollars except per Nine Months Ended
share amounts July 31
(Unaudited) 2000 1999
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 903.3 $ 760.2
Insurance and health care premiums 360.6 572.1
Investment income 7.9 48.9
Other income 64.0 91.2
Total 1,335.8 1,472.4
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 253.4 304.0
Interest expense 371.6 306.4
Insurance and health care claims
and benefits 279.9 465.9
Other operating expenses 223.4 168.3
Total 1,128.3 1,244.6
Income of Consolidated Group
Before Income Taxes 207.5 227.8
Provision for income taxes 74.7 78.3
Income of Consolidated Group 132.8 149.5
Equity in Income of Unconsolidated
Subsidiaries and Affiliates
Credit .5 .2
Other .1
Total .5 .3
Net Income $ 133.3 $ 149.8
Page 12
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
Millions of dollars July 31 October 31 July 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 351.7 $ 295.5 $ 352.3
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 351.7 295.5 352.3
Marketable securities 116.0 315.5 845.4
Receivables from
unconsolidated subsidiaries
and affiliates 211.7 30.2 37.7
Trade accounts and notes
receivable - net 3,627.0 3,251.1 3,739.5
Financing receivables - net 7,532.4 6,742.6 6,781.5
Other receivables 276.8 273.9 396.6
Equipment on operating
leases - net 1,855.0 1,654.7 1,499.6
Inventories 1,725.1 1,294.3 1,428.0
Property and equipment - net 1,803.6 1,782.3 1,735.3
Investments in unconsolidated
subsidiaries and affiliates 185.5 151.5 145.5
Intangible assets - net 708.8 295.1 300.9
Prepaid pension costs 623.3 619.9 637.0
Other assets 244.9 185.5 148.4
Deferred income taxes 744.8 598.1 568.9
Deferred charges 96.0 88.0 114.0
Total $20,102.6 $17,578.2 $18,730.6
Liabilities and Stockholders'
Equity
Short-term borrowings $ 5,246.9 $ 4,488.2 $ 5,358.9
Payables to unconsolidated
subsidiaries and affiliates 58.4 15.5 22.3
Accounts payable and
accrued expenses 2,670.5 2,432.8 2,548.5
Insurance and health care
claims and reserves 55.8 55.4 402.5
Accrued taxes 167.4 144.8 158.3
Deferred income taxes 53.4 63.0 19.0
Long-term borrowings 5,005.2 3,806.2 3,627.9
Retirement benefit accruals
and other liabilities 2,493.2 2,478.0 2,408.7
Total liabilities 15,750.8 13,483.9 14,546.1
Stockholders' equity 4,351.8 4,094.3 4,184.5
Total $20,102.6 $17,578.2 $18,730.6
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED (Deere & Company with Financial
BALANCE SHEET Services on the Equity Basis)
Millions of dollars July 31 October 31 July 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 153.1 $ 111.7 $ 138.3
Cash deposited with
unconsolidated subsidiaries 113.8 117.4 75.1
Cash and cash equivalents 266.9 229.1 213.4
Marketable securities 205.3
Receivables from
unconsolidated subsidiaries
and affiliates 393.0 266.0 252.1
Trade accounts and notes
receivable - net 3,627.0 3,251.1 3,739.5
Financing receivables - net 124.0 118.4 95.6
Other receivables 140.0 129.4 15.3
Equipment on operating
leases - net 3.2 2.6
Inventories 1,725.1 1,294.3 1,428.0
Property and equipment - net 1,756.5 1,738.8 1,687.5
Investments in unconsolidated
subsidiaries and affiliates 1,535.8 1,362.8 1,758.7
Intangible assets - net 707.1 294.8 294.2
Prepaid pension costs 623.3 619.9 637.0
Other asset 107.6 95.7 70.6
Deferred income taxes 739.3 592.9 540.9
Deferred charges 87.5 80.8 78.7
Total $11,836.3 $10,281.9 $10,811.5
Liabilities and Stockholders'
Equity
Short-term borrowings $ 1,012.0 $ 642.2 $ 1,337.5
Payables to unconsolidated
subsidiaries and affiliates 58.4 15.5 22.3
Accounts payable and
accrued expenses 2,069.4 1,891.9 1,707.3
Insurance and health care
claims and reserves
Accrued taxes 151.2 138.1 141.8
Deferred income taxes 7.6 7.2 6.3
Long-term borrowings 1,718.2 1,036.1 1,039.2
Retirement benefit accruals
and other liabilities 2,467.7 2,456.6 2,372.6
Total liabilities 7,484.5 6,187.6 6,627.0
Stockholders' equity 4,351.8 4,094.3 4,184.5
Total $11,836.3 $10,281.9 $10,811.5
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
Millions of dollars July 31 October 31 July 31
(Unaudited) 2000 1999 1999
Assets
Cash and short-term
investments $ 198.6 $ 183.8 $ 213.9
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 198.6 183.8 213.9
Marketable securities 116.0 110.1 845.4
Receivables from
unconsolidated subsidiaries
and affiliates 106.5 4.8 5.2
Trade accounts and notes
receivables - net
Financing receivables - net 7,408.4 6,624.2 6,685.9
Other receivables 136.8 144.5 381.3
Equipment on operating
leases - net 1,851.8 1,652.2 1,499.6
Inventories
Property and equipment - net 47.1 43.5 47.8
Investments in unconsolidated
subsidiaries and affiliates 12.1 9.9 9.9
Intangible assets - net 1.6 .3 6.7
Prepaid pension costs
Other assets 137.2 89.8 77.8
Deferred income taxes 5.6 5.2 28.0
Deferred charges 8.5 7.2 35.3
Total $10,030.2 $8,875.5 $9,836.8
Liabilities and Stockholders'
Equity
Short-term borrowings $ 4,234.9 $3,846.0 $4,021.4
Payables to unconsolidated
subsidiaries and affiliates 401.7 358.1 294.5
Accounts payable and
accrued expenses 601.1 540.8 841.3
Insurance and health care
claims and reserves 55.8 55.4 402.5
Accrued taxes 16.2 6.8 16.5
Deferred income taxes 45.8 55.8 12.7
Long-term borrowings 3,287.0 2,770.1 2,588.7
Retirement benefit accruals
and other liabilities 25.5 21.3 36.1
Total liabilities 8,668.0 7,654.3 8,213.7
Stockholders' equity 1,362.2 1,221.2 1,623.1
Total $10,030.2 $8,875.5 $9,836.8
Page 13
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Nine Months Ended
July 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $ 414.4 $ 268.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (213.2) 344.6
Net cash provided by (used for)
operating activities 201.2 613.3
Cash Flows from Investing Activities
Collections of financing receivables 4,914.9 4,540.3
Proceeds from sales of
financing receivables 878.9 1,544.8
Proceeds from maturities and
sales of marketable securities 242.0 98.0
Proceeds from sales of equipment
on operating leases 252.1 139.6
Cost of financing receivables
acquired (6,504.6) (6,043.2)
Purchases of marketable securities (45.5) (91.0)
Purchases of property and equipment (203.9) (181.0)
Cost of operating leases acquired (666.9) (594.9)
Acquisitions of businesses, net of
cash acquired (621.9) (167.3)
Increase in receivables with
unconsolidated affiliates (101.7) (5.2)
Other (14.4) 34.0
Net cash used for investing
activities (1,871.0) (725.9)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 1,406.1 (523.1)
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 2,345.0 2,249.8
Principal payments on long-term
borrowings (1,885.4) (1,372.3)
Proceeds from issuance of
common stock 15.4 3.5
Repurchases of common stock (46.2)
Dividends paid (154.4) (154.0)
Other (.5) (1.6)
Net cash provided by
financing activities 1,726.2 156.1
Effect of Exchange Rate
Changes on Cash (.2) (.9)
Net Increase (Decrease) in Cash
and Cash Equivalents 56.2 42.6
Cash and Cash Equivalents at
Beginning of Period 295.5 309.7
Cash and Cash Equivalents at
End of Period $ 351.7 $ 352.3
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)
Nine Months Ended
July 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $414.4 $268.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (668.0) 26.4
Net cash provided by (used for)
operating activities (253.6) 295.1
Cash Flows from Investing Activities
Collections of financing receivables 27.4 17.1
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 (3.3) (22.7)
Purchases of marketable securities
Purchases of property and equipment (192.4) (172.0)
Cost of operating leases acquired (1.6)
Acquisitions of businesses, net of
cash acquired (620.4) (146.5)
Increase in receivables with
unconsolidated affiliates
Other (8.7) 26.0
Net cash used for investing
activities (595.1) (298.1)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 489.4 (263.1)
Change in intercompany
receivables/payables (10.1) (10.4)
Proceeds from long-term borrowings 751.9 499.8
Principal payments on long-term
borrowings (204.8) (18.6)
Proceeds from issuance of
common stock 15.4 3.5
Repurchases of common stock (46.2)
Dividends paid (154.4) (154.0)
Other (.5) (1.6)
Net cash provided by
financing activities 886.9 9.4
Effect of Exchange Rate
Changes on Cash (.4) (.9)
Net Increase (Decrease) in Cash
and Cash Equivalents 37.8 5.5
Cash and Cash Equivalents at
Beginning of Period 229.1 207.9
Cash and Cash Equivalents at
End of Period $266.9 $213.4
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF Nine Months Ended
CONSOLIDATED CASH FLOWS July 31
Millions of dollars (Unaudited) 2000 1999
Cash Flows from Operating Activities
Net income $ 133.3 $ 149.8
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities 336.5 183.5
Net cash provided by (used for)
operating activities 469.8 333.3
Cash Flows from Investing Activities
Collections of financing receivables 4,887.5 4,523.2
Proceeds from sales of
financing receivables 878.9 1,544.8
Proceeds from maturities and
sales of marketable securities 39.2 98.0
Proceeds from sales of equipment
on operating leases 251.0 139.6
Cost of financing receivables
acquired (6,501.3) (6,020.5)
Purchases of marketable securities (45.5) (91.0)
Purchases of property and equipment (11.5) (9.0)
Cost of operating leases acquired (665.3) (594.9)
Acquisitions of businesses, net of
cash acquired (1.5) (20.7)
Increase in receivables with
unconsolidated affiliates (101.7) (5.2)
Other (19.5) 7.7
Net cash used for investing
activities (1,289.7) (428.0)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 916.7 (260.0)
Change in intercompany
receivables/payables 6.5 (54.2)
Proceeds from long-term borrowings 1,593.1 1,750.0
Principal payments on long-term
borrowings (1,680.7) (1,353.7)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (15.0) (15.0)
Other 13.9
Net cash provided by
financing activities 834.5 67.1
Effect of Exchange Rate
Changes on Cash .2
Net Increase (Decrease) in Cash
and Cash Equivalents 14.8 (27.6)
Cash and Cash Equivalents at
Beginning of Period 183.8 241.5
Cash and Cash Equivalents at
End of Period $ 198.6 $ 213.9
Page 14
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 Nine Months Ended
July 31 July 31
2000 1999 2000 1999
Dividends declared $.22 $.22 $.66 $.66
Dividends paid $.22 $ 22 $.66 $.66
3. The calculation of basic net income per share is based on
the average number of shares outstanding during the nine
months ended July 31, 2000 and 1999 of 234.2 million and 232.6
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 Nine Months
Ended July 31 Ended July 31
2000 1999 2000 1999
Net income $172.4 $68.9 $414.4 $268.7
Other comprehensive income
(loss), net of tax:
Change in cumulative
translation adjustment 3.2 (9.9) (31.4) (21.4)
Unrealized gain (loss) on
marketable securities .4 (12.7) (4.8) (10.5)
Comprehensive income $176.0 $46.3 $378.2 236.8
Page 15