- -------------------------------------------------------------
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: February 13, 2001
(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.)
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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: February 13, 2001
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 & Company
One John Deere Place,
Moline, IL 61265
(DEERE LOGO)
Contact: Greg Derrick
Deere & Company
(309) 765-5290
derrickgregoryt@johndeere.com
FOR IMMEDIATE RELEASE - February 13, 2001
- -----------------------------------------
DEERE POSTS HIGHER EARNINGS FOR FIRST QUARTER
. Net income rises 50% to $56 million.
. Sales and revenues increase 15% to $2.68 billion.
. Company still sees higher results for year in spite of
economic weakness.
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MOLINE, Illinois - Deere & Company today reported that net
income for the fiscal first quarter, ended January 31, rose 50
percent to $56.4 million, or $.24 per share, compared with
$37.7 million, or $.16 per share, last year. "Our improved
financial performance is a reflection of favorable customer
response to our many new and innovative products, and is
especially gratifying in light of the economic weakness
affecting our major markets," said Robert W. Lane, chairman
and chief executive officer.
During the quarter, the company completed the acquisitions
of McGinnis Farms and Great Dane Power Equipment. In
combination with the company's traditional strengths in
equipment, customer service and financing, these acquisitions
will help Deere provide total solutions to the rapidly growing
commercial grounds-care and irrigation industries, Lane said.
Worldwide net sales and revenues for the quarter increased
15 percent to $2.680 billion, compared with $2.339 billion for
the same period last year. Net equipment sales were $2.118
billion for the quarter, compared with $1.880 billion a year
ago. Overseas net sales for the quarter were $580 million,
compared with $551 million the previous year. Excluding the
impact of the stronger U.S. dollar, overseas net sales would
have shown a 15 percent increase. Overall, the company's
physical volume of sales rose 17 percent for the quarter.
Operating profit of the Deere equipment divisions - which
excludes interest, taxes and other corporate expenses -
increased substantially, to $70 million versus $20 million for
the year-ago period. The operating profit increase was mainly
due to improved manufacturing efficiencies primarily related
to higher sales and production volumes. Results also benefited
from the impact of cost-reduction initiatives as well as from
lower pension and post-retirement benefit costs. Partially
offsetting these factors were higher costs for sales
incentives, and for the development of new products and other
growth initiatives. Net income of the equipment operations -
which includes interest, taxes and other corporate expenses -
also increased, to $4.1
Page 5
million for the quarter, versus a $5.1 million net loss last
year. The improvement came in spite of higher interest
expense.
. Sales of the worldwide agricultural equipment division
increased by 19 percent for the quarter, or by 23 percent
excluding the impact of a stronger U.S. dollar. Operating
profit increased substantially, to $89 million, compared with
$14 million for the year-ago period. The improvement in
profitability was mainly due to manufacturing efficiencies
resulting from higher production volumes, partly offset by
higher costs for sales incentives, new product development and
growth initiatives. Higher sales in Latin America led to
significantly improved results in Deere's overseas operations.
. First-quarter operating profit of the commercial and
consumer equipment division was $1 million, compared with $9
million last year. Sales for the quarter declined 13 percent
due in part to the planned implementation of a new order-
fulfillment process to reduce field inventories as well as the
effects of the weaker economy. Higher sales-incentive costs
also had an adverse impact on the division's results.
. Deere's construction equipment division had an operating
loss of $3 million for the quarter, compared with operating
profit of $11 million last year. Sales were up 32 percent due
to the inclusion of sales from Timberjack, which was acquired
in the second quarter of last year. Despite the economic
slowdown, Deere construction-equipment sales were about flat,
excluding Timberjack. Division results were negatively
affected by higher sales-incentive costs and by higher
expenses related to the development of new products and growth
initiatives.
. Net income of the credit operations was $52.5 million for
the first quarter, compared with $41.0 million last year. The
improvement was primarily due to growth of the receivables
portfolio and higher income from increased retail-note sales,
partially offset by higher selling and administrative
expenses.
. The company's other businesses had an operating loss of $11
million for the first quarter, compared with an operating loss
of $9 million last year. Results for both years were
negatively affected by goodwill amortization and by costs
related to the development of new products of the special
technologies group. Partially offsetting these factors was
higher health-care operating profit.
MARKET CONDITIONS AND OUTLOOK
. Agricultural Equipment. Although the agricultural outlook
weakened slightly during the quarter, the company experienced
increased retail-sales activity due to enthusiastic customer
response to the John Deere product line. Industry-wide, the
company now expects retail sales of farm machinery in North
America in 2001 to be the same as or slightly higher than last
year. In recent weeks, corn and oilseed prices have dropped
back to near last year's levels as a result of weaker
prospects for U.S. farm exports, due largely to the delay in
China's entry to the World Trade Organization. An improved
outlook for soybean crops in Latin America has also dampened
the commodity-price situation. In the
Page 6
livestock sector, conditions are expected to remain relatively
strong as a result of increased production and higher beef
prices. On balance, U.S. farmers remain in sound financial
condition due to stable land prices and a high level of
government payments. In other areas, European industry retail
sales are expected to be down 5 percent from last year, while
industry retail sales in the Latin America, Australia and Asia
regions are forecast to be flat overall for 2001.
Despite the ongoing challenges being faced by global
agricultural markets, retail sales of John Deere farm
equipment are expected to increase this year due to the
continued success of recently introduced products and last
year's reduction of used-goods inventories held by U.S. and
Canadian dealers.
. Commercial & Consumer Equipment. Industry retail sales of
commercial and consumer equipment - which includes lawn-care
equipment and worksite and utility vehicles - are now expected
to decline by 5 to 10 percent this year as a result of the
U.S. economic slowdown. However, Deere sales and financial
results for this sector are expected to improve on the
strength of profitability-enhancement initiatives and new
products.
. Construction Equipment. In response to the slower economic
conditions, industry retail sales of construction equipment in
2001 are now expected to be 10 to 15 percent below last year's
levels. Housing starts, though remaining at favorable levels
by historical standards, are expected to decline this year due
to the softer economic environment. At the same time, lumber
production is expected to decline, and pulp production, which
had been expanding, should begin to feel the effects of the
weaker economy. Despite the negative industry outlook, John
Deere construction-equipment sales are expected to increase in
2001 due to the full-year inclusion of Timberjack sales and
the success of new construction-equipment products and
services.
. Credit. Deere credit operations are expected to continue
benefiting from growth in the receivable portfolio, in both
North America and international markets.
Based on these conditions, the company's worldwide
physical volume of sales is currently forecast to increase by
10 percent for the second quarter and 9 percent for full year
2001 in comparison with prior year levels. Without the effect
of Timberjack and other recent acquisitions, the physical-
volume gains are expected to be 5 percent for the second
quarter and 6 percent for the full year.
"Despite market conditions that are proving to be both
challenging and highly competitive, we're confident the
company remains on track for achieving improved results this
year," commented Lane. "At the same time, we are aggressively
moving forward with the introduction of innovative new
products and services, while pursuing cost-reduction and
quality improvements throughout the enterprise."
Page 7
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 $44.5 million for the first quarter of
2001, compared with $36.2 million last year. First quarter
results benefited from higher income on a larger average
receivable and lease portfolio and higher income from
increased sales of retail notes, partially offset by higher
selling and administrative expenses related to the larger
portfolio.
Net receivables and leases financed by JDCC were $7.826
billion at January 31, 2001, compared with $7.335 billion one
year ago. The increase resulted from acquisitions exceeding
collections during the last 12 months, partially offset by
sales of retail notes. Net receivables and leases
administered, which include receivables previously sold,
totaled $10.236 billion at January 31, 2001, compared with
$9.432 billion one year ago.
SAFE HARBOR STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. 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 Deere &
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; consumer
confidence, 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, and energy prices and
supplies; dealer practices; labor relations; interest and
currency exchange rates; technological difficulties;
accounting standards and other risks and uncertainties. The
spread of "mad cow" disease outside of Europe could also
adversely affect livestock and feed prices. Concerns
pertaining to genetically modified organisms, or GMOs, may
also affect farm exports. In addition, higher fuel and
fertilizer costs could have a negative impact on farm income.
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 amount and
timing of spring weather patterns and overall consumer
confidence. 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.
Such 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
quarterly report on Form 10-Q and other filings with the
Securities and Exchange Commission.
Page 8
FIRST QUARTER 2001 PRESS RELEASE
(millions of dollars and shares except per share amounts)
Three Months Ended
January 31
%
2001 2000 Change
Net sales and revenues:
Agricultural equipment net sales $1,228 $1,035 + 19
Commercial and consumer equipment
net sales 429 493 - 13
Construction equipment net sales 448 338 + 33
Other net sales 13 14 - 7
Total net sales 2,118 1,880 + 13
Credit revenues 367 301 + 22
Other revenues 195 158 + 23
Total net sales and revenues* $2,680 $2,339 + 15
Operating profit (loss):
Agricultural equipment $ 89 $ 14 +536
Commercial and consumer equipment 1 9 - 89
Construction equipment (3) 11
Credit 80 64 + 25
Other (11) (9) + 22
Total operating profit* 156 89 + 75
Interest, corporate expenses
and income taxes (100) (51) + 96
Net income $ 56 $ 38 + 47
Per Share:
Net income - basic $ .24 $ .16 + 50
Net income - diluted $ .24 $ .16 + 50
* Includes overseas equipment operations:
Net sales $ 580 $ 551 + 5
Operating profit $ 52 $ 33 + 58
January 31 October 31 January 31
2001 2000 2000
Equipment Operations:
Trade accounts and notes
receivable - net $ 3,441 $ 3,169 $ 3,180
Inventories $ 2,186 $ 1,553 $ 1,781
Financial Services:
Financing receivables and
leases financed - net $ 9,261 $10,099 $ 8,660
Financing receivables and
leases administered -
net $11,984 $12,223 $11,008
Average shares outstanding $ 234.6 $ 234.3 $ 233.9
Page 9
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) 2001 2000
Net Sales and Revenues
Net sales of equipment $2,118.3 $1,880.0
Finance and interest income 362.4 303.4
Health care premiums and fees 134.9 112.5
Investment income 3.0 9.1
Other income 61.8 34.3
Total 2,680.4 2,339.3
Costs and Expenses
Cost of goods sold 1,695.7 1,552.5
Research and development expenses 134.3 102.6
Selling, administrative and general
expenses 355.7 315.4
Interest expense 199.3 146.8
Health care claims and costs 109.7 90.3
Other operating expenses 93.2 71.9
Total 2,587.9 2,279.5
Income (Loss) of Consolidated Group
Before Income Taxes 92.5 59.8
Provision (credit) for income taxes 32.6 20.8
Income (Loss)of Consolidated Group 59.9 39.0
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .5 .1
Other (4.0) (1.4)
Total (3.5) (1.3)
Net Income $ 56.4 $ 37.7
Per Share:
Net income - basic $ .24 $ .16
Net income - diluted $ .24 $ .16
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 January 31
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales of equipment $2,118.3 $1,880.0
Finance and interest income 26.6 25.0
Health care premiums and fees
Investment income 6.6
Other income 42.2 22.5
Total 2,187.1 1,934.1
Costs and Expenses
Cost of goods sold 1,699.6 1,556.8
Research and development expenses 134.3 102.6
Selling, administrative and general
expenses 266.9 239.4
Interest expense 61.8 36.8
Health care claims and costs
Other operating expenses 17.9 7.6
Total 2,180.5 1,943.2
Income (Loss) of Consolidated Group
Before Income Taxes 6.6 (9.1)
Provision (credit) for income taxes 2.5 (4.0)
Income (Loss) of Consolidated Group 4.1 (5.1)
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 52.5 41.0
Other (.2) 1.8
Total 52.3 42.8
Net Income $ 56.4 $ 37.7
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Three Months Ended
Millions of dollars except per January 31
share amounts) 2001 2000
(Unaudited)
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 343.3 $ 282.9
Health care premiums and fees 139.4 117.6
Investment income 3.0 2.5
Other income 27.8 19.2
Total 513.5 422.2
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 89.5 76.9
Interest expense 145.0 114.5
Health care claims and costs 109.7 90.3
Other operating expenses 83.4 71.6
Total 427.6 353.3
Income (Loss) of Consolidated Group
Before Income Taxes 85.9 68.9
Provision (credit) for income taxes 30.1 24.7
Income (Loss) of Consolidated Group 55.8 44.2
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .5 .1
Other .1
Total .5 .2
Net Income $ 56.3 $ 44.4
Page 10
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
Millions of dollars January 31 October 31 January 31
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 311.6 $ 291.7 $ 297.5
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 311.6 291.7 297.5
Marketable securities 139.1 127.4 115.5
Receivables from
unconsolidated subsidiaries
and affiliates 245.7 230.9 20.4
Trade accounts and notes
receivable - net 3,440.8 3,169.2 3,180.1
Financing receivables - net 7,426.0 8,275.7 6,998.4
Other receivables 325.8 395.3 258.1
Equipment on operating
leases - net 1,924.7 1,954.4 1,752.7
Inventories 2,185.8 1,552.9 1,781.0
Property and equipment - net 1,912.2 1,912.4 1,751.3
Investments in unconsolidated
subsidiaries and affiliates 192.5 190.7 166.0
Intangible assets - net 819.6 652.2 294.1
Prepaid pension costs 644.3 635.3 621.4
Other assets 317.2 256.8 199.3
Deferred income taxes 741.0 740.4 625.8
Deferred charges 117.0 84.1 82.8
Total $20,743.3 $20,469.4 $18,144.4
Liabilities and Stockholders'
Equity
Short-term borrowings $ 6,010.9 $ 5,758.5 $ 5,493.0
Payables to unconsolidated
subsidiaries and affiliates 36.8 32.7 31.5
Accounts payable and
accrued expenses 2,755.6 2,976.4 2,327.7
Health care claims and reserves 73.0 63.4 60.7
Accrued taxes 48.4 57.5 120.0
Deferred income taxes 13.2 74.6 61.8
Long-term borrowings 5,015.1 4,764.3 3,457.2
Retirement benefit accruals
and other liabilities 2,468.4 2,440.1 2,497.7
Total liabilities 16,421.4 16,167.5 14,049.6
Stockholders' equity 4,321.9 4,301.9 4,094.8
Total $20,743.3 $20,469.4 $18,144.4
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 January 31 October 31 January 31
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 117.8 $ 91.4 $ 116.1
Cash deposited with
unconsolidated subsidiaries 548.3
Cash and cash equivalents 117.8 639.7 116.1
Marketable securities
Receivables from
unconsolidated subsidiaries
and affiliates 369.1 408.4 280.6
Trade accounts and notes
receivable - net 3,440.8 3,169.2 3,180.1
Financing receivables - net 85.3 125.0 89.2
Other receivables 162.0 266.4 122.8
Equipment on operating
leases - net 4.3 5.9 1.8
Inventories 2,185.8 1,552.9 1,781.0
Property and equipment - net 1,868.6 1,864.6 1,706.2
Investments in unconsolidated
subsidiaries and affiliates 1,606.9 1,561.8 1,431.6
Intangible assets - net 818.6 651.2 293.8
Prepaid pension costs 644.3 635.3 621.4
Other assets 145.5 117.5 104.0
Deferred income taxes 793.2 736.4 620.1
Deferred charges 107.5 78.4 76.3
Total $12,349.7 $11,812.7 $10,425.0
Liabilities and Stockholders'
Equity
Short-term borrowings $ 1,700.0 $ 927.5 $ 933.9
Payables to unconsolidated
subsidiaries and affiliates 246.4 41.4 60.5
Accounts payable and
accrued expenses 1,937.7 2,360.8 1,706.8
Health care claims and reserves
Accrued taxes 32.8 45.5 105.7
Deferred income taxes 2.5 7.4
Long-term borrowings 1,667.8 1,717.7 1,040.9
Retirement benefit accruals
and other liabilities 2,443.1 2,415.4 2,475.0
Total liabilities 8,027.8 7,510.8 6,330.2
Stockholders' equity 4,321.9 4,301.9 4,094.8
Total $12,349.7 $11,812.7 $10,425.0
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
Millions of dollars January 31 October 31 January 31
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 193.8 $ 200.3 $ 181.4
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 193.8 200.3 181.4
Marketable securities 139.1 127.4 115.5
Receivables from
unconsolidated subsidiaries
and affiliates 351.3 140.0 29.1
Trade accounts and notes
receivables - net
Financing receivables - net 7,340.8 8,150.7 6,909.3
Other receivables 163.8 128.9 135.3
Equipment on operating
leases - net 1,920.4 1,948.5 1,750.9
Inventories
Property and equipment - net 43.6 47.7 45.1
Investments in unconsolidated
subsidiaries and affiliates 4.3 10.1 11.1
Intangible assets - net 1.0 1.1 .3
Prepaid pension costs
Other assets 171.7 139.3 95.2
Deferred income taxes 3.0 3.9 5.6
Deferred charges 9.5 5.7 6.6
Total $10,342.3 $10,903.6 $9,285.4
Liabilities and Stockholders'
Equity
Short-term borrowings $ 4,310.8 $ 4,831.1 $4,559.1
Payables to unconsolidated
subsidiaries and affiliates 265.4 856.9 260.2
Accounts payable and
accrued expenses 817.8 615.6 620.9
Health care claims and reserves 73.0 63.4 60.7
Accrued taxes 15.6 11.9 14.3
Deferred income taxes 68.4 72.1 54.4
Long-term borrowings 3,347.3 3,046.7 2,416.3
Retirement benefit accruals
and other liabilities 25.3 24.8 22.7
Total liabilities 8,923.6 9,522.5 8,008.6
Stockholders' equity 1,418.7 1,381.1 1,276.8
Total $10,342.3 $10,903.6 $9,285.4
Page 11
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Three Months Ended
January 31
Millions of dollars (Unaudited) 2001 2000
Cash Flows from Operating Activities
Net income $ 56.4 $ 37.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (1,047.8) (454.3)
Net cash provided by (used for)
operating activities (991.4) (416.6)
Cash Flows from Investing Activities
Collections of financing
receivables 1,703.5 1,750.9
Proceeds from sales of financing
receivables 1,110.1 71.3
Proceeds from maturities and sales
of marketable securities 4.5 215.5
Proceeds from sales of equipment on
operating leases 78.0 61.7
Cost of financing receivables
acquired (1,994.1) (1,909.3)
Purchases of marketable securities (13.4) (19.4)
Purchases of property and
equipment (63.7) (37.3)
Cost of operating leases acquired (124.4) (209.5)
Acquisitions of businesses, net
of cash acquired (221.3) (14.9)
Increase in receivables with
unconsolidated affiliates (1.9) (54.6)
Other 149.3 69.1
Net cash provided by (used for)
investing activities 626.6 (76.5)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings (514.3) 733.2
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 1,517.0 162.7
Principal payments on long-term
borrowings (570.0) (353.5)
Proceeds from issuance of
common stock 4.9 4.5
Repurchases of common stock (1.2)
Dividends paid (51.6) (51.4)
Other (.7)
Net cash provided by (used for)
financing activities 384.1 495.5
Effect of Exchange Rate
Changes on Cash .6 (.4)
Net Increase (Decrease) in Cash
and Cash Equivalents 19.9 2.0
Cash and Cash Equivalents at
Beginning of Period 291.7 295.5
Cash and Cash Equivalents at
End of Period $ 311.6 $ 297.5
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.
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) 2001 2000
Cash Flows from Operating Activities
Net income $ 56.4 $ 37.7
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (1,216.6) (601.8)
Net cash provided by (used for)
operating activities (1,160.2) (564.1)
Cash Flows from Investing Activities
Collections of financing
receivables 40.8 30.0
Proceeds from sales of financing
receivables
Proceeds from maturities and sales
of marketable securities 202.8
Proceeds from sales of equipment on
operating leases 1.2 .1
Cost of financing receivables
acquired (.4) (.3)
Purchases of marketable securities
Purchases of property and
equipment (60.4) (34.7)
Cost of operating leases acquired (.6) (.3)
Acquisitions of businesses, net
of cash acquired (221.3) (13.8)
Increase in receivables with
unconsolidated affiliates
Other 15.4 1.8
Net cash provided by (used for)
investing activities (225.3) 185.6
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 661.2 276.6
Change in intercompany
receivables/payables 249.4 36.4
Proceeds from long-term borrowings 1.5
Principal payments on long-term
borrowings (1.0)
Proceeds from issuance of
common stock 4.9 4.5
Repurchases of common stock (1.2)
Dividends paid (51.6) (51.4)
Other (.7)
Net cash provided by (used for)
financing activities 862.5 266.1
Effect of Exchange Rate
Changes on Cash 1.1 (.6)
Net Increase (Decrease) in Cash
and Cash Equivalents (521.9) (113.0)
Cash and Cash Equivalents at
Beginning of Period 639.7 229.1
Cash and Cash Equivalents at
End of Period $ 117.8 $ 116.1
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF Three Months Ended
CONSOLIDATED CASH FLOWS January 31
Millions of dollars (Unaudited) 2001 2000
Cash Flows from Operating Activities
Net income $ 56.3 $ 44.4
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities 122.6 108.1
Net cash provided by (used for)
operating activities 178.9 152.5
Cash Flows from Investing Activities
Collections of financing
receivables 1,662.7 1,720.9
Proceeds from sales of financing
receivables 1,110.1 71.3
Proceeds from maturities and sales
of marketable securities 4.5 12.7
Proceeds from sales of equipment on
operating leases 76.8 61.6
Cost of financing receivables
acquired (1,993.8) (1,908.9)
Purchases of marketable securities (13.4) (19.4)
Purchases of property and
equipment (3.3) (2.6)
Cost of operating leases acquired (123.8) (209.2)
Acquisitions of businesses, net
of cash acquired (1.1)
Increase in receivables with
unconsolidated affiliates (1.9) (54.6)
Other 123.9 67.2
Net cash provided by (used for)
investing activities 841.8 (262.1)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings (1,175.4) 456.6
Change in intercompany
receivables/payables (797.7) (153.8)
Proceeds from long-term borrowings 1,515.5 162.7
Principal payments on long-term
borrowings (569.0) (353.5)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (10.1) (5.0)
Other 10.0
Net cash provided by (used for)
financing activities (1,026.7) 107.0
Effect of Exchange Rate
Changes on Cash (.5) .2
Net Increase (Decrease) in Cash
and Cash Equivalents (6.5) (2.4)
Cash and Cash Equivalents at
Beginning of Period 200.3 183.8
Cash and Cash Equivalents at End
of Period $193.8 $181.4
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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, commercial and consumer
equipment, construction 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 and health care operations.
2. Dividends declared and paid on a per share basis were as
follows:
Three Months Ended
January 31
2001 2000
Dividends declared $.22 $.22
Dividends paid $.22 $.22
3. The calculation of net income per share is based on the
average number of shares outstanding during the three months
ended January 31, 2001 and 2000 of 234.6 million and 233.9
million, respectively. The calculation of diluted net income
per share recognizes primarily the dilutive effect of the
assumed exercise of stock options.
4. In the first quarter of 2001, the Company adopted
Financial Accounting Standards Board (FASB) Statement 133,
Accounting for Derivative Instruments and Hedging Activities,
as amended by FASB Statement 138. Under the new standards,
all derivatives have been recorded at fair value in the
financial statements. Changes in fair values of the
derivatives are recognized periodically in other comprehensive
income (equity) for derivatives designated as hedges of future
cash flows or net income for all other derivatives. The
effects of adoption on the Company's financial position or net
income were not material.
5. 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
2001 2000
Net income $56.4 $37.7
Other comprehensive income
(loss), net of tax:
Change in cumulative
translation adjustment 33.2 5.4
Unrealized gain (loss) on
marketable securities 1.8 (4.9)
Unrealized loss on
derivatives (28.7)
Comprehensive income $62.7 $38.2
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