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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: March 21, 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) Announcement and additional information.
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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: March 21, 2001
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EXHIBIT INDEX
Sequential
Number and Description of Exhibit Page Number
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(99) Announcement and additional information Page 5
Page 4
EXHIBIT 99
(JOHN DEERE LOGO)
Deere & Company
One John Deere Place
Moline, IL 61265
Phone: 309-765-8000
www.deere.com
Contact: Greg Derrick
Deere & Company
309-765-5290
derrickgregoryt@johndeere.com
For immediate release: March 21, 2001
DEERE SCALING BACK EQUIPMENT PRODUCTION
. Production cuts affecting construction and commercial and
consumer equipment, as well as large tractors
. Second-quarter results likely to be lower than last year
. Company targeting higher earnings for year, though
attainment may prove challenging
. Rigorous asset management remains a top priority
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MOLINE, IL -- Deere & Company today announced it was
moving to scale back production in its major equipment
operations and that, partly as a result, earnings for the
second quarter ending April 30 were likely to fall below year-
earlier levels. "Continued caution on the part of customers
has prompted our decision to reduce production schedules,"
said Robert W. Lane, chairman and chief executive officer.
"Such steps this early in the season affirm our continuing
commitment to rigorous asset management." Products primarily
affected include construction and grounds-care equipment, but
also include large farm tractors, he said. As a result, the
company's forecast for physical volume of sales has been
reduced for both the quarter and full year.
In construction equipment, the retail-sales slowdown has
extended through mid-March. Deere's production levels have
responded quickly to the retail environment due to its
estimate to cash order-fulfillment process, which adjusts
construction-equipment production directly in line with order
activity. "While this puts Deere in an industry-leading
position with respect to inventory management, it also means
that any change in retail order patterns has a more immediate
impact on earnings," Lane commented.
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Production schedules are also being reduced in the
company's commercial and consumer equipment unit, where
adverse weather is having a negative effect on income at this
time. "Weather plays a major role in the timing of ground-care
product sales, and this year's cold and wet conditions have
delayed retail sales for many products," Lane said. In
addition, under a new-order fulfillment process being adopted
for certain commercial products, changes in retail orders have
a more immediate impact on the division's production volumes
and earnings.
In another development, a recent fire, at a storage
facility near Davenport, Iowa, destroyed certain attachments
and commercial grounds-care products. Although contents and
business interruption are covered by insurance, any related
loss of sales could have an adverse short-term impact on the
division's financial results. The fire's effect should be
largely offset in future quarters, however.
In the company's North American agricultural-equipment
operations, retail sales of John Deere combines and cotton-
pickers as well as hay, seeding and tillage equipment have
been higher than last year though mid-March. However, sales of
row-crop tractors have been relatively flat over the same
period. As a result, the company has announced a shutdown of
its Waterloo, Iowa, tractor-manufacturing facility for a week
in April. "Though it's early in the season, modest adjustments
of this sort show our commitment to balancing production with
retail sales," Lane said.
Deere is closely monitoring the foot-and-mouth disease
situation in Europe and other parts of the world, whose near-
term impact on farm-machinery sales is uncertain, Lane said.
Key issues affecting this uncertainty include the ultimate
extent and severity of the disease, in addition to the amount
of government payments that farmers are likely to receive for
the loss of affected livestock.
Overall, Deere now expects its physical volume of sales
without acquisitions to be flat for the quarter and up 4
percent for the year. Previously, the company had forecast
increases of 5 percent and 6 percent for the respective
periods. Including the effect of acquisitions, physical volume
is expected to be up 5 percent for the quarter and 7 percent
for the year. These factors are expected to cost about 3
percentage points of operating margin in the second quarter.
"While we continue to set our sights on higher earnings
for the year, the current market environment is making this
goal more challenging to reach," Lane said. "Our decision to
cut back production schedules in advance of the important
spring selling season is a difficult one. However, through
actions to maintain low asset levels, we're confident the
stage is being set for improved returns to shareholders and a
further enhancement in our competitive position across the
John Deere business lineup."
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. Some of these risks and uncertainties could affect
particular lines of business, while others could affect all of
the Company's businesses. Forward-looking statements involve
certain factors that are subject
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to change, including for the agricultural equipment segment
the many interrelated factors that affect farmers' confidence,
including worldwide demand for agricultural products, world
grain stocks, prices realized for commodities and livestock,
weather and soil conditions, real estate values, animal
diseases (including the spread of "mad cow" and "hoof and
mouth" diseases), crop pests, harvest yields, the level of
farm product exports and government farm programs. Factors
affecting the Company's commercial and consumer equipment
business include general economic conditions in the United
States, consumer confidence, consumer acceptance of the
Company's new products, consumer borrowing patterns and the
severity and timing of spring weather patterns. The number of
housing starts as well as levels of public and non-residential
construction are especially important to sales of the
Company's construction equipment, while prices for pulp,
lumber and structural panels are important to sales of
forestry equipment. 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 the Company operates. 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.
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