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: May 14, 1996
(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 8 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: May 14, 1996
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
Moline, IL 61265
(309)765-5014
FOR IMMEDIATE RELEASE (14 MAY 1996)
MOLINE, ILLINOIS -- Deere & Company today reported record
second quarter worldwide net income of $272.7 million or $1.04 per
share for the quarter ended April 30, an increase of 15 percent
compared with 1995 second quarter net income of $237.0 million or
$.92 per share. Year-to-date net income totaled $438.9 million or
$1.67 per share compared with $375.5 million or $1.45 per share for
the first six months of 1995.
Deere & Company Chairman and Chief Executive Officer Hans W.
Becherer said, "Both the quarterly and six month earnings results
represent new company earnings records, which reflect the
continuing strong retail demand in most of the company's major
markets. Results of both the equipment and financial services
operations contributed to these record earnings."
Worldwide net sales and revenues increased 10 percent to
$3.088 billion in the second quarter and 10 percent to $5.406
billion for the first six months of 1996 compared with $2.811
billion and $4.899 billion, respectively, last year. Net sales to
dealers of agricultural, industrial and lawn and grounds care
equipment were $2.700 billion in the second quarter and $4.636
billion year-to-date this year compared with $2.453 billion and
$4.183 billion, respectively, last year. Export sales from the
United States continued to strengthen and totaled $723 million for
the first six months, a gain of 12 percent over last year's export
sales of $645 million. Additionally, third quarter export sales
will benefit from the recently announced sale of self-propelled
combines to the Ukraine. The first phase of that $187 million sale
will be completed during the third quarter. Overseas sales for the
past six months also continued to increase, rising by 31 percent
compared with a year ago. Overall, the company's worldwide physical
volume of sales increased eight percent for the quarter and year-
to-date compared with last year.
The company's worldwide equipment operations, which exclude
the financial services subsidiaries and unconsolidated affiliates,
had net income of $217.3 million in the second quarter and $333.4
million year-to-date in 1996 compared with $191.6 million and
$287.4 million, respectively, last year. Worldwide agricultural
and lawn and grounds care equipment operating profits were higher
compared with last year for both the quarter and year-to-date,
primarily due to increased production and sales volumes. Worldwide
industrial equipment operating profits were lower for the quarter
and were approximately the same on a year-to-date basis compared
with last year, reflecting higher engine development expenses which
offset the impact of higher production and sales volumes. Overseas
results continued to improve significantly, reflecting higher
volumes as well as continued cost improvements and a favorable
sales mix.
Net income of the financial services subsidiaries was $52.4
million for the quarter and $101.1 million year-to-date compared
with $42.4 million and $85.2 million, respectively, last year.
Net income of the insurance operations increased from $4.2 million
for the quarter and $12.4 million year-to-date last year to $8.7
million and $18.2 million, respectively, this year due to improved
underwriting results. Additionally, last year's results were
affected by a small loss on the sale of the division's life
insurance subsidiary. Net income of the health care operations for
both the quarter and year-to-date were down slightly compared with
last year. Second quarter and year-to-date net income of the credit
operations was $40.0 million and $74.5 million, respectively,
compared with $34.4 million and $64.1 million last year. This
increase in income resulted primarily from a larger average
portfolio financed.
Outlook
"The improved level of both North American and overseas
agricultural equipment retail sales in the first six months of 1996
continues to provide a solid base for operations during the
remainder of the year," Becherer said. "Growing worldwide demand
for agricultural commodities and last year's low harvest yields
have resulted in strong price levels for grains. World grain
stocks, relative to use, remain at very low levels. Additionally,
passage of the new 'freedom to farm' bill has further improved the
U.S. farm outlook by establishing substantial transition payments
to participating farmers while dropping annual acreage reduction
programs. These favorable factors should result in continuing high
levels of confidence among farmers, despite marginal winter wheat
harvest yields in several areas, and continued relatively low
cattle prices. This positive environment should result in strong
retail demand for new and used agricultural equipment.
"North American demand for John Deere industrial equipment,
lawn and grounds care equipment, and financial services products
also remains good in 1996," Becherer said. "Although late spring
weather conditions throughout the country have reduced the purchase
of lawn and grounds care equipment year-to-date, overall retail
demand during the remainder of the year is expected to improve,
assuming continued moderate economic growth and a return to more
normal weather conditions. Additionally, we expect demand for John
Deere products will benefit from the introduction of our new 'Sabre
by John Deere' product line. The outlook for industrial equipment
also continues to be favorable, primarily due to the high level of
new housing starts.
"In response to this outlook, the company's worldwide physical
volume of sales to dealers is expected to increase by approximately
seven percent compared with 1995, in both the third quarter and
fiscal year," Becherer said. "Overall, the current outlook for our
businesses remains positive. The company's operating margins
remain strong, reflecting the results of our continuous
improvement, profitability and quality initiatives. We also
continue to aggressively invest in new growth initiatives
throughout our worldwide operations, which should promote
additional profitable growth in the future. Based on this outlook,
we maintain our positive expectations for growth in both revenues
and earnings in 1996."
# # #
John Deere Capital Corporation
The following 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 net income was $37.9 million
in the second quarter and $70.2 million year-to-date in 1996
compared with $33.3 million and $60.7 million, respectively, in the
same periods last year. Net income for the quarter and year-to-
date were favorably affected by a larger average portfolio
financed. The average balance of credit receivables and leases
financed was 20 percent higher in both the second quarter and the
first six months of 1996 compared with the same periods last year.
Credit receivable and lease acquisitions increased 19 percent
during the second quarter and 21 percent year-to-date compared with
a year ago. Acquisitions of John Deere equipment notes were 12
percent higher in the current year, primarily due to increased
retail sales of John Deere equipment. Acquisitions of retail
notes, revolving charge accounts, leases and wholesale receivables
all increased during the first six months compared with last year.
Year-to-date retail notes acquired totaled $1.586 billion, a 12
percent increase over 1995 acquisitions.
Net receivables and leases financed by John Deere Capital
Corporation were $4.806 billion at April 30, 1996 compared with
$3.796 billion one year ago. The increase resulted from credit
acquisitions exceeding collections during the last 12 months,
partially offset by a retail note sale during the same period. Net
credit receivables and leases administered, which include
receivables previously securitized and sold, totaled $6.045 billion
at April 30, 1996 compared with $5.294 billion at April 30, 1995.
# # #
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements under the "Outlook" heading that
are not statements of historical facts are forward-looking
statements, which are subject to important risks and uncertainties
that could cause actual results to differ materially. The
company's businesses include equipment operations (agricultural,
industrial and lawn and ground care) and financial services
(credit, insurance and health care). Forward-looking statements
relating to these 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, animal diseases, crop pests, harvest yields, real estate
values and government farm programs; general economic conditions
and housing starts; legislation, primarily legislation relating to
agriculture, the environment, commerce and infrastructure; actions
of competitors in the various industries in which the company
competes; production difficulties, including capacity and supply
constraints; labor relations; interest and currency exchange rates;
accounting standards; and other risks and uncertainties. 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 filings with the
Securities and Exchange Commission.
# # #
The attached data accompany this press release.
Net sales and revenues:
(millions of dollars)
Three Months Ended Six Months Ended
April 30 April 30
% %
1996 1995 Change 1996 1995 Change
Net sales:
Agricultural equipment 1,639 1,434 +14 2,825 2,456 +15
Industrial equipment 515 500 + 3 958 908 + 6
Lawn and grounds
care equipment 546 519 + 5 853 819 + 4
Total net sales 2,700 2,453 +10 4,636 4,183 +11
Financial Services
revenues 360 332 + 8 708 662 + 7
Other revenues 28 26 + 8 62 54 +15
Total net sales
and revenues 3,088 2,811 +10 5,406 4,899 +10
United States and Canada:
Equipment net sales 1,962 1,882 + 4 3,358 3,207 + 5
Financial Services
revenues 360 332 + 8 708 662 + 7
Total 2,322 2,214 + 5 4,066 3,869 + 5
Overseas net sales 738 571 +29 1,278 976 +31
Other revenues 28 26 + 8 62 54 +15
Total net sales
and revenues 3,088 2,811 +10 5,406 4,899 +10
Selected balance sheet data:
(millions of dollars)
April 30 October 31 April 30
1996 1995 1995
Equipment Operations:
Dealer accounts and notes
receivable - net 3,831 3,260 3,589
Inventories 1,067 721 996
Financial Services:
Credit receivables and leases
financed - net 5,410 5,366 4,307
Credit receivables and leases
administered - net 6,744 6,666 5,805
Insurance companies' assets 1,065 1,127 1,512
Health care companies' assets 223 237 215
Average shares
outstanding 262,199,237 260,494,446 259,514,730