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 13, 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)
_______________________________________
Page 1 of 10 pages.
The Exhibit Index appears at Page 4.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
(99) Press release and additional information of Deere &
Company.
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: August 13, 1996
EXHIBIT INDEX
Sequential Page
Number and Description of Exhibit Number
(99) Press release and additional information 5
EXHIBIT 99
Contact: Robert J. Combs
Deere & Company
Moline, IL 61265
(309)765-5014
DEERE & COMPANY THIRD QUARTER EARNINGS
FOR IMMEDIATE RELEASE (13 August 1996)
MOLINE, ILLINOIS -- Deere & Company today reported record
third quarter worldwide net income of $204.4 million or $.79 per
share for the quarter ended July 31, an increase of 13 percent
compared with 1995 third quarter net income of $180.1 million or
$.69 per share. Year-to-date net income totaled $643.4 million or
$2.46 per share compared with $555.5 million or $2.14 per share for
the first nine months of 1995.
Deere & Company Chairman and Chief Executive Officer Hans W.
Becherer said, "Both the third quarter and nine month results
represent new company earnings records. The company's operating
margins remain strong as continuous improvement and quality
initiatives are having a positive impact in all areas of our
business."
Worldwide net sales and revenues increased nine percent to
$2.905 billion in the third quarter and 10 percent to $8.311
billion for the first nine months of 1996 compared with $2.673
billion and $7.572 billion, respectively, last year. Net sales to
dealers of agricultural, industrial, and commercial and consumer
(formerly known as lawn and grounds care) equipment were $2.516
billion in the third quarter and $7.152 billion year-to-date this
year compared with $2.304 billion and $6.488 billion, respectively,
last year. Export sales from the United States totaled $1.219
billion for the first nine months, a gain of 21 percent over last
year's export sales of $1.009 billion. Overseas sales for the past
nine months continued to increase, rising by 30 percent compared
with a year ago and are expected to exceed $2.5 billion for the
year for the first time in the company's history. Overseas sales
for the quarter included $95 million of combine sales to Ukraine,
the first phase of a $187 million contract. Overall, the company's
worldwide physical volume of sales increased eight percent for the
quarter and year-to-date compared with last year, reflecting the
increased worldwide demand for the company's products.
The company's worldwide equipment operations, which exclude
the financial services subsidiaries and unconsolidated affiliates,
had net income of $153.1 million in the third quarter and $486.6
million year-to-date in 1996 compared with $135.3 million and
$422.7 million, respectively, last year. Worldwide agricultural
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. Industrial equipment operating
profits were lower in both the quarter and the first nine months
compared with last year, reflecting increased new engine
development expenses, coupled with a slightly less favorable
product mix. However, retail sales of industrial equipment
remained at strong levels in both periods. Worldwide commercial
and consumer equipment operating profits were lower for both the
quarter and year-to-date, reflecting slightly lower third quarter
sales volume, coupled with higher sales incentives. Unusual
weather conditions in several areas of North America have caused
commercial and consumer equipment industry sales to decline
substantially in some markets during much of 1996. Additionally,
higher expenditures for various ongoing growth initiatives
continued to impact the short-term profitability of the division.
Overseas results continued to strengthen, reflecting higher
volumes, continued cost improvements and a favorable sales mix.
Net income of the financial services subsidiaries was $48.1
million for the quarter and $149.2 million year-to-date compared
with $40.4 million and $125.6 million, respectively, last year.
Third quarter and year-to-date net income of the credit operations
was $35.3 million and $109.7 million, respectively, compared with
$28.1 million and $92.2 million last year. This increase in income
resulted primarily from a larger average portfolio financed. Net
income of the insurance operations was $8.0 million for the quarter
and $26.3 million year-to-date this year compared to $8.7 million
and $21.1 million, respectively, last year, reflecting improved
underwriting results. Third quarter earnings last year were
slightly higher as a result of unusually high investment income
caused by rebalancing the investment portfolio following the sale
of the division's life insurance subsidiary. Net income of the
health care operations increased for the quarter and year-to-date
compared with last year due to the continued profitable growth of
these operations.
Outlook
"The current level of both North American and overseas
agricultural equipment retail sales in the first nine months of
1996 continues to provide a solid base for operations," Becherer
said. "Growing worldwide demand for agricultural commodities
coupled with the existing low levels of world grain stocks have
resulted in strong prices for grains and oilseeds. Additionally,
the new 'freedom to farm' bill has further strengthened U.S. farm
income by establishing substantial transition payments to
participating farmers while reducing restrictions on farm acreage
utilization. Export markets for agricultural commodities remain
strong despite substantially higher prices and a strengthening
dollar. Based on these factors, continued farmer confidence should
promote strong market conditions, resulting in healthy levels of
worldwide retail demand for both new and used agricultural
equipment. In the United States, overall farmers' confidence
continues to remain high despite a variety of regional conditions
that include late plantings and ongoing dry weather conditions in
certain areas of the country.
"Erratic weather conditions throughout much of the United
States have reduced the overall industry sales of commercial and
consumer equipment," Becherer said. "However, retail demand for
Deere equipment has stabilized at relatively good and sustainable
levels, primarily as a result of our strong dealer network,
initial growth from our new Sabre-branded product line and
effectively targeted sales promotions. Additionally, industry
demand for industrial equipment remained strong during the third
quarter, and is expected to continue at current levels based
primarily on expectations of a high level of new housing starts and
stable interest rates," Becherer said.
"As a result of this outlook, the company's worldwide physical
volume of sales to dealers is projected to increase by
approximately seven percent for the year compared with 1995,"
Becherer said. "Overall, the outlook for our businesses is very
positive. The company's operating margins are benefiting from our
continuous improvement and quality initiatives. We also are
aggressively investing in new growth opportunities throughout our
worldwide operations which should promote further profitable growth
in future years. Based on these initiatives, coupled with the
favorable market outlook expected for our products, we continue to
maintain positive expectations for 1996 and going forward."
# # #
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 $32.3 million
in the third quarter and $102.5 million year-to-date in 1996
compared with $26.3 and $87.0 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
24 percent higher in the third quarter and 21 percent higher in the
first nine months of 1996 compared with the same periods last year.
Credit receivable and lease acquisitions increased 22 percent
during both the third quarter and year-to-date compared with a year
ago. Acquisitions of John Deere equipment notes were 11 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 nine months compared with last year. Year-to-date
retail notes acquired totaled $2.231 billion, a 10 percent increase
over 1995 acquisitions.
Net receivables and leases financed by John Deere Capital
Corporation were $5.297 billion at July 31, 1996 compared with
$4.341 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 $6.411 billion
at July 31, 1996 compared with $5.668 billion at July 31, 1995.
# # #
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Statements under the "Outlook" heading that
relate to future operating periods 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 commercial and consumer) 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 contained in the
company's filings with the Securities and Exchange Commission,
including the most recent quarterly reports on Form 10-Q.
# # #
The attached data accompany this press release
Third Quarter 1996 Press Release
Net sales and revenues:
(millions of dollars)
Three Months Ended Nine Months Ended
July 31 July 31
% %
1996 1995 Change 1996 1995 Change
Net sales:
Agricultural equipment 1,612 1,365 +18 4,437 3,821 +16
Industrial equipment 496 504 - 2 1,454 1,412 + 3
Commercial and
consumer equipment 408 435 - 6 1,261 1,255
Total net sales 2,516 2,304 + 9 7,152 6,488 +10
Financial Services
revenues 352 338 + 4 1,059 1,000 + 6
Other revenues 37 31 +19 100 84 +19
Total net sales
and revenues 2,905 2,673 + 9 8,311 7,572 +10
United States and Canada:
Equipment net sales 1,691 1,661 + 2 5,050 4,868 + 4
Financial Services
revenues 352 338 + 4 1,059 1,000 + 6
Total 2,043 1,999 + 2 6,109 5,868 + 4
Overseas net sales 825 643 +28 2,102 1,620 +30
Other revenues 37 31 +19 100 84 +19
Total net sales
and revenues 2,905 2,673 + 9 8,311 7,572 +10
Selected balance sheet data:
(millions of dollars)
July 31 October 31 July 31
1996 1995 1995
Equipment Operations:
Dealer accounts and notes
receivable - net 3,504 3,260 3,447
Inventories 941 721 920
Financial Services:
Credit receivables and leases
financed - net 5,926 5,366 4,913
Credit receivables and leases
administered - net 7,119 6,666 6,240
Insurance companies' assets 1,068 1,127 1,122
Health care companies' assets 226 237 230
Average shares outstanding 261,340,899 260,494,446 260,096,913