_____________________________________________________________
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 16, 1999
(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.)
______________________________________________________________
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/ Frank S. Cottrell
_____________________
Frank S. Cottrell,
Secretary
Dated: February 16, 1999
Page 3
Exhibit Index
Sequential
Number and Description of Exhibit Page Number
(99) Press release and additional information Pg. 5
Page 4
EXHIBIT 99
Gregory T. Derrick
(DEERE LOGO) Deere & Company
Moline, Illinois 61265
(309)765-5290
DEERE REPORTS FIRST-QUARTER EARNINGS OF $49.7 MILLION
- -----------------------------------------------------
For Immediate Release (16 February 1999)
MOLINE, IL -- Deere & Company today reported first-
quarter net income of $49.7 million, or $.21 per share (basic
and diluted), for the period ended January 31, compared with
$203.3 million, or $.81 per share (basic and diluted), in the
first quarter of 1998. "The farm sector is continuing to feel
the effects of depressed agricultural-commodity prices,"
commented Hans W. Becherer, chairman and chief executive
officer. "Demand for agricultural equipment, especially large
tractors, remained extremely weak during the quarter."
Becherer pointed out that in support of the company's
emphasis on cash flow and asset management, farm-equipment
production schedules have been set below the level of retail
demand, resulting in a decline in trade receivables for the
quarter. Although earnings were adversely affected by the
lower production, all equipment businesses remained
profitable.
Worldwide net sales and revenues for the quarter
decreased 14 percent, to $2.459 billion, compared with $2.846
billion last year. Net sales to dealers of agricultural,
construction, and commercial and consumer equipment were
$1.973 billion, versus $2.405 billion. Overseas sales were
down 3 percent in comparison with the previous year. Overall,
the company's worldwide physical volume of sales decreased 18
percent for the period.
Deere's equipment operations had net income of $6.8
million for the first quarter, compared with $166.9 million
last year. Contributing to the lower results were reduced
sales and production volumes, lower margins and higher
interest costs. Worldwide equipment operating profit, which
excludes certain corporate expenses, interest and taxes, was
$51 million, compared with $288 million last year.
. Worldwide agricultural equipment operating profit
totaled $25 million for the quarter, compared with $206
million last year. Results were severely affected by lower
sales and production levels, especially of large tractors and
combines, as well as by inefficiencies related to the
production cutbacks. In addition, sales incentive costs moved
higher, with a particular emphasis on used goods. Overseas
operations, which continued to benefit from many management
initiatives, were primary contributors to the division's
profit.
Page 5
. Worldwide construction equipment operating profit
totaled $12 million for the quarter, compared with $64
million last year. During the quarter, the division began
implementation of its Estimate to Cash program, which is
aimed at better matching product availability to customer
requirements while reducing field inventories. Initial stages
of the program, as expected, resulted in lower sales to
dealers and had an adverse impact on the quarter's operating
results. Retail demand, however, remained at favorable
levels.
. Worldwide commercial and consumer equipment
operating profit was $14 million for the quarter, compared
with $18 million last year. Results were negatively affected
by higher costs associated with the start-up of new
facilities and the introduction of new products, as well as
by the impact of a strengthening Japanese yen. Partly
offsetting these factors were higher worldwide sales and
production volumes, resulting from the success of many new
products and a continuation of strong retail demand.
While remaining above year-ago levels, trade receivables
for agricultural and construction equipment declined for the
quarter as production volumes trailed retail demand.
Receivables related to used agricultural equipment continued
at a high level. Commercial and consumer equipment trade
receivables increased seasonally. Company-owned inventories
moved higher primarily due to seasonal requirements, the
start-up of new facilities and the introduction of new
products.
Net income of the financial services operations was $43.4
million for the quarter, compared with $36.0 million last
year. Credit and health-care operations reported
significantly improved profits, partly offset by adverse
underwriting results of the company's insurance unit.
MARKET CONDITIONS AND OUTLOOK
. AGRICULTURAL EQUIPMENT. Farm-commodity prices are
remaining under pressure due to large supplies of grains,
oilseeds and livestock and the effects of slowing growth in
global demand. While the U.S. government has supplemented
farm income through additional direct payments, farmers' net
cash income is expected to fall by approximately 9 percent
this year with declines also anticipated in other parts of
the world. Credit availability for equipment purchases in
emerging markets also should remain under pressure. As a
result, retail demand for farm equipment is projected to
decline by 20 to 25 percent in North America this year, with
declines of 10 to 15 percent expected in other major markets.
. CONSTRUCTION EQUIPMENT. Slower U.S. economic growth
is expected in 1999. However, low inflation and interest
rates should help keep housing starts near last year's
levels. Nonresidential construction is expected to show
little growth this year, but public construction, led by
highway expenditures, is expected to grow 3 to 4 percent. In
this environment, construction machinery sales should remain
near 1998 levels.
Page 6
. COMMERCIAL & CONSUMER EQUIPMENT. A continuation of
current economic conditions, strong retail-sales momentum,
and the introduction of a number of innovative products are
expected to support higher sales of commercial and consumer
equipment during the year.
. FINANCIAL SERVICES. A larger overall receivable and
lease portfolio should support continued improvement in the
credit operations in 1999. Health care is also well-
positioned for improved results, while Deere's insurance
organization continues to face severe competitive pressures.
Based on these conditions, the company's worldwide
physical volume of sales is currently projected to decrease
by approximately 13 to 15 percent in 1999 compared with 1998.
Second-quarter 1999 physical volumes are projected to be 13
percent lower than in the comparable 1998 period.
Deere enters this period of weakening demand for farm
machinery in strong financial condition. Furthermore,
performance is being supported by the company's
nonagricultural businesses and overseas operations, which are
seeing benefits from many growth and quality initiatives.
Aggressive asset-management actions, as well, are having a
positive impact. "Our steps to reduce farm-machinery
receivables, while contributing to lower earnings, are
helping the company generate solid levels of cash flow in
support of our long-range global growth objectives," Becherer
stated.
JOHN DEERE CAPITAL CORPORATION
The following is disclosed on behalf of the company's
credit subsidiary, John Deere Capital Corporation, in
connection with the disclosure requirements applicable to its
periodic issuance of debt securities in the public market:
John Deere Capital Corporation's net income was $37.4
million in the first quarter of 1999, compared with $30.6
million last year. First quarter results benefited from
higher gains on retail note sales, higher income on a larger
average receivable and lease portfolio, a temporary reduction
in leverage position, and improved financing spreads,
partially offset by higher operating costs.
Net receivables and leases financed by John Deere Capital
Corporation were $6.803 billion at January 31, 1999, compared
with $6.468 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 $8.580 billion at January 31, 1999, compared
with $7.482 billion at January 31, 1998.
Page 7
SAFE HARBOR STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. Statements under the "Market
Conditions and Outlook" heading and elsewhere herein, which
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 the
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; 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; dealer practices; labor
relations; interest and currency exchange rates (including
the effect of conversion to the euro); technological
difficulties (including Year 2000 compliance, especially
involving third parties, which could cause the company to be
unable to take orders, manufacture and ship product, and
perform other essential functions); accounting standards' and
other risks and uncertainties. Economic difficulties in Asia
and other parts of the world could continue to adversely
affect North American grain and meat exports. 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 spring weather
patterns. 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 may be subject to revision.
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.
Page 8
FIRST QUARTER 1999 PRESS RELEASE
Net sales and revenues:
(millions of dollars except per share amounts)
Three Months Ended
January 31
%
1999 1998 Change
Net sales:
Agricultural equipment $1,123 $1,451 -23
Construction equipment 443 578 -23
Commercial and consumer equipment 407 376 + 8
Total net sales 1,973 2,405 -18
Financial Services revenues 460 401 +15
Other revenues 26 40 -35
Total net sales and revenues $2,459 $2,846 -14
United States and Canada:
Equipment net sales $1,401 $1,815 -23
Financial Services revenues 460 401 +15
Total 1,861 2,216 -16
Overseas net sales 572 590 - 3
Other revenues 26 40 -35
Total net sales and revenues $2,459 $2,846 -14
Operating profit:
Agricultural equipment $ 25 $ 206 -88
Construction equipment 12 64 -81
Commercial and consumer equipment 14 18 -22
Equipment Operations* 51 288 -82
Financial Services 66 57 +16
Total operating profit 117 345 -66
Interest and corporate
expenses - net (40) (24) +67
Income taxes (27) (118) -77
Net income $ 50 $ 203 -75
Per Share:
Net income $ .21 $ .81 -74
Net income - diluted $ .21 $ .81 -74
* Includes overseas operating profit $ 54 $ 57 - 5
Selected balance sheet data:
(millions of dollars and shares)
January 31 October 31 January 31
1999 1998 1998
Equipment Operations:
Trade accounts and notes
receivable - net $3,829 $4,059 $3,526
Inventories $1,615 $1,287 $1,464
Financial Services:
Financing receivables and
leases financed - net $7,870 $7,237 $7,165
Financing receivables and
leases administered -
net $9,820 $9,625 $8,347
Insurance companies'
assets $ 988 $ 995 $ 991
Health care companies'
assets $ 254 $ 234 $ 260
Average shares outstanding 231.7 243.3 249.5
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) 1999 1998
Net Sales and Revenues
Net sales of equipment $1,973.2 $2,404.7
Finance and interest income 259.0 233.2
Insurance and health care premiums 179.8 169.0
Investment income 18.7 17.1
Other income 27.8 22.1
Total 2,458.5 2,846.1
Costs and Expenses
Cost of goods sold 1,653.8 1,866.5
Research and development expenses 95.9 94.7
Selling, administrative and general
expenses 301.8 283.1
Interest expense 134.1 114.7
Insurance and health care claims
and benefits 153.9 138.6
Other operating expenses 42.7 27.6
Total 2,382.2 2,525.2
Income of Consolidated Group
Before Income Taxes 76.3 320.9
Provision for income taxes 26.5 117.8
Income of Consolidated Group 49.8 203.1
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .4 (.2)
Insurance
Health Care
Other (.5) .4
Total (.1) .2
Net Income $ 49.7 $ 203.3
Per Share:
Net income $ .21 $ .81
Net income - diluted $ .21 $ .81
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.
Page 10
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) 1999 1998
Net Sales and Revenues
Net sales of equipment $1,973.2 $2,404.7
Finance and interest income 21.8 32.1
Insurance and health care premiums
Investment income
Other income 15.5 10.9
Total 2,010.5 2,447.7
Costs and Expenses
Cost of goods sold 1,658.5 1,871.0
Research and development expenses 95.9 94.7
Selling, administrative and general
expenses 207.8 194.6
Interest expense 39.9 21.7
Insurance and health care claims
and benefits
Other operating expenses (2.2) 1.6
Total 1,999.9 2,183.6
Income of Consolidated Group
Before Income Taxes 10.6 264.1
Provision for income taxes 3.8 97.2
Income of Consolidated Group 6.8 166.9
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 41.6 32.9
Insurance (1.1) 5.5
Health Care 2.9 (2.4)
Other (.5) .4
Total 42.9 36.4
Net Income $ 49.7 $ 203.3
Page 11
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Millions of dollars except per Three Months Ended
share amounts January 31
(Unaudited) 1999 1998
Net Sales and Revenues
Net sales of equipment
Finance and interest income $ 240.7 $ 203.2
Insurance and health care premiums 186.6 175.4
Investment income 18.7 17.1
Other income 20.7 12.5
Total 466.7 408.2
Costs and Expenses
Cost of goods sold
Research and development expenses
Selling, administrative and general
expenses 95.2 90.9
Interest expense 97.6 95.1
Insurance and health care claims
and benefits 155.7 139.4
Other operating expenses 52.5 25.9
Total 401.0 351.3
Income of Consolidated Group
Before Income Taxes 65.7 56.9
Provision for income taxes 22.7 20.7
Income of Consolidated Group 43.0 36.2
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit .4 (.2)
Insurance
Health Care
Other
Total .4 (.2)
Net Income $ 43.4 $ 36.0
Page 12
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
Millions of dollars January 31 October 31 January 31
(Unaudited) 1999 1998 1998
Assets
Cash and short-term
investments $ 325.5 $ 309.7 $ 319.2
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 325.5 309.7 319.2
Marketable securities 870.8 867.3 867.6
Receivables from
unconsolidated subsidiaries
and affiliates 48.4 36.2 14.9
Trade accounts and notes
receivable - net 3,828.8 4,059.2 3,526.4
Financing receivables - net 6,696.7 6,332.7 6,613.6
Other receivables 519.3 536.8 395.3
Equipment on operating
leases - net 1,256.5 1,209.2 820.8
Inventories 1,614.7 1,286.7 1,464.3
Property and equipment - net 1,674.3 1,700.3 1,534.8
Investments in unconsolidated
subsidiaries and affiliates 173.8 172.0 148.2
Intangible assets - net 212.0 217.6 183.8
Prepaid pension costs 662.3 674.3 574.7
Deferred income taxes 400.2 396.3 528.9
Other assets and
deferred charges 219.9 203.2 194.8
Total $18,503.2 $18,001.5 $17,187.3
Liabilities and Stockholders'
Equity
Short-term borrowings $ 5,871.2 $ 5,322.1 $ 4,934.0
Payables to unconsolidated
subsidiaries and affiliates 31.9 31.1 43.2
Accounts payable and
accrued expenses 2,359.5 2,853.2 2,458.1
Insurance and health care
claims and reserves 402.9 411.3 405.1
Accrued taxes 141.7 144.9 178.3
Deferred income taxes 18.3 19.7 21.3
Long-term borrowings 3,275.7 2,791.7 2,642.3
Retirement benefit accruals
and other liabilities 2,373.5 2,347.7 2,359.0
Total liabilities 14,474.7 13,921.7 13,041.3
Stockholders' equity 4,028.5 4,079.8 4,146.0
Total $18,503.2 $18,001.5 $17,187.3
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.
Page 13
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) 1999 1998 1998
Assets
Cash and short-term
investments $ 80.3 $ 68.3 $ 73.5
Cash deposited with
unconsolidated subsidiaries 92.8 139.6 180.5
Cash and cash equivalents 173.1 207.9 254.0
Marketable securities
Receivables from
unconsolidated subsidiaries
and affiliates 227.4 95.5 107.7
Trade accounts and notes
receivable - net 3,828.8 4,059.2 3,526.4
Financing receivables - net 83.4 85.8 82.7
Other receivables 42.2 139.4
Equipment on operating
leases - net 218.6 186.6
Inventories 1,614.7 1,286.7 1,464.3
Property and equipment - net 1,625.7 1,653.9 1,491.0
Investments in unconsolidated
subsidiaries and affiliates 1,693.9 1,620.4 1,510.5
Intangible assets - net 204.8 210.1 174.4
Prepaid pension costs 662.3 674.3 574.7
Deferred income taxes 379.1 372.6 485.6
Other assets and
deferred charges 159.4 141.6 125.9
Total $10,694.8 $10,766.0 $9,983.8
Liabilities and Stockholders'
Equity
Short-term borrowings $ 2,076.2 $ 1,512.4 $1,036.6
Payables to unconsolidated
subsidiaries and affiliates 31.9 43.0 43.2
Accounts payable and
accrued expenses 1,473.8 2,098.1 1,693.1
Insurance and health care
claims and reserves
Accrued taxes 136.3 142.1 165.9
Deferred income taxes 5.5 19.7 20.8
Long-term borrowings 601.2 552.9 551.9
Retirement benefit accruals
and other liabilities 2,341.4 2,318.0 2,326.3
Total liabilities 6,666.3 6,686.2 5,837.8
Stockholders' equity 4,028.5 4,079.8 4,146.0
Total $10,694.8 $10,766.0 $9,983.8
Page 14
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
Millions of dollars January 31 October 31 January 31
(Unaudited) 1999 1998 1998
Assets
Cash and short-term
investments $ 245.2 $ 241.5 $ 245.7
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 245.2 241.5 245.7
Marketable securities 870.8 867.3 867.6
Receivables from
unconsolidated subsidiaries
and affiliates 6.7
Trade accounts and notes
receivables - net
Financing receivables - net 6,613.2 6,246.9 6,530.9
Other receivables 477.1 397.3 395.3
Equipment on operating
leases - net 1,256.5 990.6 634.2
Inventories
Property and equipment - net 48.6 46.4 43.8
Investments in unconsolidated
subsidiaries and affiliates 20.9 20.3 12.7
Intangible assets - net 7.2 7.6 9.4
Prepaid pension costs
Deferred income taxes 21.0 23.7 43.4
Other assets and
deferred charges 60.5 61.5 68.9
Total $9,627.7 $8,903.1 $8,851.9
Liabilities and Stockholders'
Equity
Short-term borrowings $3,795.0 $3,809.7 $3,897.4
Payables to unconsolidated
subsidiaries and affiliates 278.5 187.0 273.3
Accounts payable and
accrued expenses 885.6 755.1 765.0
Insurance and health care
claims and reserves 402.9 411.3 405.1
Accrued taxes 5.4 2.8 12.4
Deferred income taxes 12.8 .5
Long-term borrowings 2,674.6 2,238.8 2,090.4
Retirement benefit accruals
and other liabilities 32.1 29.7 32.7
Total liabilities 8,086.9 7,434.4 7,476.8
Stockholders' equity 1,540.8 1,468.7 1,375.1
Total $9,627.7 $8,903.1 $8,851.9
Page 15
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Three Months Ended
January 31
Millions of dollars (Unaudited) 1999 1998
Cash Flows from Operating Activities
Net income $ 49.7 $ 203.3
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (546.8) (809.0)
Net cash provided by (used for)
operating activities (497.1) (605.7)
Cash Flows from Investing Activities
Collections and sales of
financing receivables 1,700.5 1,492.7
Proceeds from maturities and
sales of marketable securities 37.3 36.9
Cost of financing receivables
acquired (2,042.2) (1,725.7)
Purchases of marketable securities (33.8) (76.8)
Purchases of property and
equipment (54.9) (73.0)
Cost of operating leases acquired (125.2) (117.9)
Acquisitions of businesses (38.5)
Other 109.9 82.6
Net cash used for investing
activities (408.4) (419.7)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 541.7 979.5
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 775.0 306.0
Principal payments on long-term
borrowings (297.5) (92.6)
Proceeds from issuance of
common stock .4 6.6
Repurchases of common stock (46.1) (132.8)
Dividends paid (51.7) (50.2)
Other
Net cash provided by
financing activities 921.8 1,016.5
Effect of Exchange Rate
Changes on Cash (.5) (1.9)
Net Increase (Decrease) in Cash
and Cash Equivalents 15.8 (10.8)
Cash and Cash Equivalents at
Beginning of Period 309.7 330.0
Cash and Cash Equivalents at
End of Period $ 325.5 $ 319.2
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.
Page 16
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) 1999 1998
Cash Flows from Operating Activities
Net income $ 49.7 $203.3
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (566.4) (879.8)
Net cash provided by (used for)
operating activities (516.7) (676.5)
Cash Flows from Investing Activities
Collections and sales of
financing receivables 7.5 10.1
Proceeds from maturities and
sales of marketable securities
Cost of financing receivables
acquired (9.0) (10.3)
Purchases of marketable securities
Purchases of property and
equipment (50.9) (71.2)
Cost of operating leases acquired (16.1)
Acquisitions of businesses (38.5)
Other 3.5 10.9
Net cash used for investing
activities (48.9) (115.1)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 561.2 869.9
Change in intercompany
receivables/payables 17.6 (56.1)
Proceeds from long-term borrowings 50.0
Principal payments on long-term
borrowings (1.1)
Proceeds from issuance of
common stock .4 6.6
Repurchases of common stock (46.1) (132.8)
Dividends paid (51.7) (50.2)
Other (.1)
Net cash provided by
financing activities 531.3 636.3
Effect of Exchange Rate
Changes on Cash (.5) (1.9)
Net Increase (Decrease) in Cash
and Cash Equivalents (34.8) (157.2)
Cash and Cash Equivalents at
Beginning of Period 207.9 411.2
Cash and Cash Equivalents at
End of Period $173.1 $254.0
Page 17
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF
CONSOLIDATED CASH FLOWS Three Months Ended
January 31
Millions of dollars (Unaudited) 1999 1998
Cash Flows from Operating Activities
Net income $ 43.4 $ 36.0
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (18.8) 54.1
Net cash provided by (used for)
operating activities 24.6 90.1
Cash Flows from Investing Activities
Collections and sales of
financing receivables 1,693.0 1,482.6
Proceeds from maturities and
sales of marketable securities 37.3 36.9
Cost of financing receivables
acquired (2,033.2) (1,715.4)
Purchases of marketable securities (33.8) (76.8)
Purchases of property and
equipment (4.0) (1.8)
Cost of operating leases acquired (125.2) (101.8)
Acquisitions of businesses
Other 106.4 72.9
Net cash used for investing
activities (359.5) (303.4)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings (19.5) 109.6
Change in intercompany
receivables/payables (64.4) (113.3)
Proceeds from long-term borrowings 725.0 306.0
Principal payments on long-term
borrowings (297.5) (91.5)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (5.0) (19.3)
Other (1.3)
Net cash provided by
financing activities 338.6 190.2
Effect of Exchange Rate
Changes on Cash
Net Increase (Decrease) in Cash
and Cash Equivalents 3.7 (23.1)
Cash and Cash Equivalents at
Beginning of Period 241.5 268.8
Cash and Cash Equivalents at End
of Period $245.2 $245.7
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Notes to Interim Financial Statements
1. The "Consolidated" (Deere & Company and Consolidated
Subsidiaries) data in each of the financial statements
conform with the requirements of Financial Accounting
Standards Board (FASB) Statement No. 94. 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, construction equipment and commercial
and consumer equipment 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, insurance and
health care operations.
2. Dividends declared and paid on a per share basis were as
follows:
Three Months Ended
January 31
1999 1998
Dividends declared $.22 $.22
Dividends paid $.22 $.20
3. The calculation of net income per share is based on the
average number of shares outstanding during the three months
ended January 31, 1999 and 1998 of 231.7 million and 249.5
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 1999, the Company adopted FASB
Statement No. 130, Reporting Comprehensive Income.
Comprehensive income includes all changes in the Company's
equity during the period, except transactions with
stockholders of the Company. Comprehensive income for the
first quarter of 1999 and 1998 consisted of the following in
millions of dollars:
Three Months Ended January 31
1999 1998
Net income $49.7 $203.3
Change in cumulative
translation adjustment (9.1) (30.1)
Unrealized gain on
marketable securities 4.5 4.4
Comprehensive income $45.1 $177.6
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