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: November 30, 1995
(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.)
John Deere Road
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309)765-8000
(Registrant`s telephone number, including area code)
_______________________________________
(Former name or former address, if changed since last report.)
Page 1 of 9 pages.
The Exhibit Index appears at Page 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
(99) Press release and additional information.
Signatures
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/ Frank S. Cottrell
Frank S. Cottrell, Secretary
Dated: November 30, 1995
EXHIBIT INDEX
Sequential Page
Number and Description of Exhibit Number
(99) Press release and additional information Pg. 4
EXHIBIT 99
Contact: Robert J. Combs
Deere & Company
309/765-5014
FOR IMMEDIATE RELEASE (30 November 1995)
MOLINE, ILLINOIS -- Deere & Company today reported
worldwide net income of $150.6 million for the fourth quarter
of 1995 compared with $169.6 million last year. The company's
quarterly net income was the second highest ever for the fourth
quarter, and 1995 fiscal year net income of $706.1 million
established a new full year earnings record, and represented a
gain of 17 percent over a year ago. The fourth quarter of Deere
& Company's fiscal year ended October 31.
Deere & Company Chairman and Chief Executive Officer Hans
W. Becherer said, "The company's strong fourth quarter and
annual results were due to the positive impact of our continuous
improvement and growth strategies. The fourth quarter results
also reflect the impact of our planned initiatives to reduce
service parts inventories and used goods receivables. These
initiatives were successful and enabled the company to enter
fiscal year 1996 well positioned to take advantage of the
continued favorable economic conditions in our worldwide
markets."
The company's 1995 fourth quarter earnings per share were
$.57 compared with $.66 per share last year. All per share
information reflects a three-for-one stock split in the form of
a 200 percent stock dividend effective November 17, 1995.
Worldwide net income for the 1995 fiscal year totaled
$706.1 million or $2.71 per share compared with $603.6 million
or $2.34 per share last year. (See exhibit 1.) The company's
strong results for the year reflect higher production and sales
levels coupled with significantly improved overseas and
industrial equipment division results. Additionally, exports
from the United States set a new record, totaling $1.3 billion.
The company's annual sales and revenues exceeded $10
billion for the first time in the company's history, due to
continued growth in demand for the company's products and
services. Worldwide net sales and revenues increased eight
percent to $2.719 billion in the fourth quarter and 15 percent
to $10.291 billion for the fiscal year compared with $2.512
billion and $8.977 billion, respectively, last year. Net sales
of the equipment operations increased 15 percent in 1995 to
$8.830 billion from $7.663 billion, and the physical volume of
sales increased by 11 percent compared with a year ago. Annual
revenues of the financial services operations also increased to
$1.335 billion this year from $1.218 billion in 1994.
The company's worldwide equipment operations, which
exclude the financial services subsidiaries and unconsolidated
affiliates, had net income of $106.3 million for the quarter and
$529.0 million for the year compared with $123.6 million and
$433.0 million, respectively, last year. Fourth quarter
operating income of the agricultural equipment business was
lower than last year's record level, primarily as a result of
the reduced service parts production and higher used goods sales
incentive expenses. Lawn and grounds care operating income for
the quarter was also lower, primarily due to higher than
expected new product start-up costs and certain unfavorable
currency fluctuations on foreign-sourced components. Industrial
equipment operations had higher fourth quarter operating income
reflecting increased production and sales volumes compared with
a year ago. The annual results for each of the equipment
businesses in 1995 were improved compared to last year and were
the primary factor behind the company's record profitability.
Worldwide agricultural equipment division operating income for
1995 was $643 million, up 16 percent from last year, as a result
of a 12 percent increase in net sales coupled with a substantial
improvement in overseas results. Higher margins on complete
goods sales were partially offset by the previously mentioned
used goods and service parts initiatives. Industrial equipment
division 1995 operating income also increased substantially,
totaling $198 million or an increase of 50 percent over 1994,
primarily as a result of higher production and sales volumes and
improved operating efficiency. Lawn and grounds care operating
income for the year of $165 million was up slightly compared
with last year reflecting a small increase in comparable
production and sales volumes offset by unfavorable currency
fluctuations on imported components.
The 1995 net income of the company's financial services
operations remained strong, totaling $41.0 million for the
quarter and $166.6 million for the year compared with last
year's totals of $41.1 million and $160.6 million. Fourth
quarter and annual net income of the credit operations was $28.8
million and $120.9 million, respectively, compared with $31.6
million and $113.7 million last year. This year's annual results
reflect higher earnings from a larger portfolio, partially
offset by lower financing margins. Insurance operations net
income was $8.3 million for the quarter and $29.4 million for
the year compared with $5.2 million and $31.2 million last year.
Annual results for 1995 were unfavorably impacted by a loss from
the sale of the division's life insurance subsidiary. This
divestiture enabled the division to increase its focus on
growing its property and casualty business and should not have
a significant adverse impact on the division's future operating
results. Health care operations net income was $3.9 million for
the quarter and $16.3 million for the year compared with $4.3
million and $15.7 million, respectively, last year. Although
quarterly results were lower in 1995 due primarily to growth
expenditures, annual results reflected the continued profitable
expansion of the health care operations.
"Market demand for John Deere products remains very
strong," Becherer said. "Increased overseas and domestic demand
for agricultural commodities, coupled with lower than
anticipated harvest yields, have resulted in substantial
increases in commodity prices. Additionally, the United States
Department of Agriculture is currently forecasting world grain
stocks to be at the lowest levels, relative to use, since it
began keeping systematic records. The low commodity
inventories, expected increases in worldwide grain demand and
the anticipated resulting strong worldwide commodity price
levels should bolster farmers' confidence and result in
continued strong demand for new and used agricultural equipment.
Additionally, government acreage set-asides should be lower in
1996 in response to the reduction in world grain stocks which
should further promote agricultural demand. Therefore, we
expect agricultural equipment industry retail sales to increase
again in 1996, despite some uncertainty surrounding the new farm
bill.
"Nonresidential and public construction expenditures in
1996 are anticipated to show moderate growth," Becherer said.
"Housing starts are projected to increase slightly over 1995
levels in response to lower mortgage rates now forecasted for
1996. Consumer spending is expected to remain at relatively
strong levels throughout most of 1996. Additionally, the
company s lawn and grounds care equipment demand should also
increase as a result of the introduction of a new product line,
'Sabre by John Deere,' which includes entry-level lawn tractors
and walk-behind mowers. As a result of the many factors cited,
industry retail sales for industrial and lawn and grounds care
products are expected to increase in 1996 compared with 1995.
Financial services revenues should also reflect this continued
strong demand for John Deere products.
"The company's worldwide physical volume of sales to
dealers in 1996 is expected to increase by four percent compared
with 1995, with first quarter volumes anticipated to be
approximately 12 percent higher than the first quarter of 1995,"
Becherer said. "These expected volume increases will more than
offset the short- term costs associated with our planned growth
initiatives. Therefore, 1996 is currently expected to be
another strong
year with continued revenue and earnings growth."
# # #
The following information is disclosed on behalf of the
company s United States credit subsidiary, John Deere Capital
Corporation, in connection with the disclosure requirements of
programs providing for the issuance of debt securities:
John Deere Capital Corporation s (Capital Corporation) net
income was $27.1 million in the fourth quarter of 1995 compared
with $30.2 million in the same period last year. Net income for
the quarter decreased compared with a year ago primarily due to
gains from the sale of retail notes in last year's fourth
quarter. No retail notes were sold in the fourth quarter of
1995.
Net income for the fiscal year totaled $114.1 million
compared with $104.9 million in 1994. The higher income resulted
from higher earnings on a larger portfolio, partially offset by
lower financing margins.
Credit receivable and lease acquisitions increased 20
percent during the fourth quarter and 18 percent for the fiscal
year compared with acquisitions in the same periods in 1994.
Retail note acquisitions from John Deere increased by $110.5
million or 17 percent in the quarter and $349.2 million or 16
percent for the year primarily due to higher retail sales of
John Deere equipment and an improvement in the Capital
Corporation s market share for the financing of John Deere
agricultural equipment. Acquisitions of recreational product
retail notes also increased during both the quarter and the
entire year.
Credit receivables and leases financed by John Deere
Capital Corporation were $4.838 billion at October 31, 1995
compared with $4.031 billion one year ago. The increase resulted
from credit receivable acquisitions exceeding collections during
1995. The company also securitized and sold retail notes,
receiving proceeds of $726 million during 1995 compared with
$560 million last year. Credit receivables and leases
administered, which include receivables previously securitized
and sold, totaled $6.021 billion at October 31, 1995 compared
with $5.246 billion at October 31, 1994.
# # #
The attached data accompany this press release
Exhibit 1
Net Income Per Share
Year Ended October 31
1995 1994
Pre-Split Basis
Average Shares Outstanding 86,831,482 86,146,147
Net Income Per Share $8.13 $7.01
Post-Split Basis
Average Shares Outstanding 260,494,446 258,438,441
Net Income Per Share $2.71 $2.34
Fourth Quarter and 1995 Press Release
Net sales and revenues:
(millions of dollars)
Three Months Ended Twelve Months Ended
October 31 October 31
% %
1995 1994 Change 1995 1994 Change
Net sales:
Agricultural equipment 1,456 1,305 +12 5,277 4,718 +12
Industrial equipment 463 447 + 4 1,875 1,640 +14
Lawn and grounds
care equipment 423 397 + 7 1,678 1,305 +29
Total net sales 2,342 2,149 + 9 8,830 7,663 +15
Financial Services
revenues 335 336 1,335 1,218 +10
Other revenues 42 27 +56 126 96 +31
Total net sales
and revenues 2,719 2,512 + 8 10,291 8,977 +15
United States and Canada:
Equipment net sales 1,780 1,633 + 9 6,648 5,860 +13
Financial Services
revenues 335 336 1,335 1,218 +10
Total 2,115 1,969 + 7 7,983 7,078 +13
Overseas net sales 562 516 + 9 2,182 1,803 +21
Other revenues 42 27 +56 126 96 +31
Total net sales
and revenues 2,719 2,512 + 8 10,291 8,977 +15
Selected balance sheet data:
(millions of dollars)
October 31 October 31
1995 1994
Equipment Operations:
Dealer accounts and notes
receivable - net 3,260 2,939
Inventories 721 698
Financial Services:
Credit receivables and leases
financed - net 5,366 4,511
Credit receivables and leases
administered - net 6,666 5,725
Insurance companies' assets 1,127 1,480
Health care companies'
assets 237 191
Average shares
outstanding 260,494,446 258,438,441