-------------------------------------------------------------
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 15, 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) 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/ Michael A. Harring
-------------------------
Michael A. Harring,
Secretary
Dated: May 15, 2001
Page 3
EXHIBIT INDEX
Sequential
Number and Description of Exhibit Page Number
(99) Press release and additional information Pg. 5
Page 4
EXHIBIT 99
(DEERE LOGO) Deere & Company
One John Deere Place,
Moline, IL 61265 USA
Phone: 309-765-8000
www.JohnDeere.com
Contact: Greg Derrick
Deere & Company
(309) 765-5290
derrickgregoryt@johndeere.com
FOR IMMEDIATE RELEASE - May 15, 2001
------------------------------------
DEERE HAS LOWER EARNINGS FOR SECOND QUARTER;
CITES WEAK ECONOMIC CONDITIONS
. Quarterly net income $127.8 MM vs. $204.3 MM last year
. Weak market conditions in construction and commercial and
consumer businesses
. Ag business continues to improve competitive position
. Commitment to rigorous asset management affirmed
. 2001 earnings now expected to fall short of last year's
level
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MOLINE, Illinois -- Deere & Company today reported worldwide
net income of $127.8 million, or $.54 per share, for the
second quarter ended April 30 and $184.2 million, or $.78 per
share, for the first six months of 2001. This is in comparison
with net income of $204.3 million, or $.87 per share, and
$242.0 million, or $1.03 per share, for the same periods last
year.
"Our second-quarter results are a reflection of the general
economic slowdown and continued weakness in our major
markets," noted Robert W. Lane, chairman and chief executive
officer. "In line with our commitment to rigorous asset
management, we have responded quickly to these difficult
conditions by reducing production schedules." These actions,
he explained, are expected to have a negative impact on
earnings for the rest of the year.
Worldwide net sales and revenues were $3.776 billion for the
second quarter and $6.456 billion for the first six months of
2001, compared with $3.790 billion and $6.129 billion,
respectively, last year. Net sales were $3.229 billion for the
second quarter and $5.347 billion for the first six months,
compared with $3.324 billion and $5.204 billion, respectively,
last year. Excluding the impact of recent acquisitions, net
sales were down 7 percent for the quarter and 2 percent for
the first six months. The decreases were primarily due to
lower sales of commercial and consumer products and
construction equipment, and the impact of weaker foreign
currencies. Partially offsetting these factors were higher
sales of agricultural equipment.
Compared with last year, overseas net sales rose 5 percent for
both the quarter and for the first six months. The increases
were primarily due to higher agricultural-equipment sales in
Latin America, partially offset by lower sales of construction
equipment, and lower six-month agricultural-equipment sales in
Europe.
Page 5
Overall, the company's physical volume of sales was 1 percent
lower for the quarter and 5 percent higher for the first six
months compared with last year. Without the impact of recent
acquisitions, physical volume was off 5 percent for the
quarter and up 1 percent year to date.
Worldwide equipment operations had net income of $89.1 million
for the quarter and $93.2 million for the first six months of
2001, compared with $165.4 million and $160.3 million,
respectively, last year. The decreases were primarily due to
lower production and sales of commercial and consumer products
and construction equipment, as well as related manufacturing
inefficiencies. Also contributing to the lower profits were a
planned increase in research and development expense and
higher selling and administrative expenses related to growth
and other initiatives, as well as higher sales-incentive costs
and interest expense. Partially offsetting these factors were
lower pension and post-retirement benefit costs. Excluding
interest, taxes and other corporate expenses, operating income
was $215 million for the second quarter and $285 million for
the first six months, compared with respective year-ago totals
of $341 million and $361 million. The decreases were primarily
due to the same operational factors mentioned above.
. Despite a 6 percent sales increase, operating profit of the
worldwide agricultural-equipment division declined to $131
million for the quarter versus $159 million last year. The
decrease was primarily due to a planned increase in research
and development expense and higher selling and administrative
expenses related to growth and other initiatives, as well as
manufacturing inefficiencies associated with tractor-schedule
reductions initiated during the quarter. Partially offsetting
these factors was the impact of the higher sales. For the
first six months, the division reported an 11 percent increase
in sales and $220 million of operating profit, versus $173
million last year. The profit improvement was primarily due to
the higher sales and production volumes and related
manufacturing efficiencies, as well as lower pension and post-
retirement benefit costs. Partially offsetting these factors
were the higher planned research and development costs and
increased selling and administrative expenses related to
growth and other initiatives.
. Operating profit of the worldwide commercial and consumer
equipment division was $64 million for the second quarter of
2001 and $65 million for the first six months, compared with
$115 million and $124 million, respectively, last year. Sales
for the quarter and six months declined 13 percent, reflecting
the impact of a weaker economy and unfavorable spring weather
conditions. Operating profit was down for both periods
primarily due to the lower sales and production volumes and
related manufacturing inefficiencies, as well as higher
selling and administrative expenses associated with recent
acquisitions. Benefiting results for both periods were higher
prices, partially offset by higher sales-incentive costs for
six months.
. Operating profit of the worldwide construction equipment
division was $34 million for the quarter and $31 million for
the first six months, compared with $81 million and $92
million for the same periods last year. Sales declined 12
percent for the quarter but were up 4 percent for the first
six months compared with last year. Excluding the sales of
Timberjack, acquired at the end of second-quarter 2000, sales
were down 27 percent and 18 percent for the respective
periods. The declines reflected the impact of a weaker-than-
expected economy as
Page 6
well as very competitive market conditions, and were marked by
a particularly severe downturn in sales to independent rental
companies. The decreases in operating profit were primarily
due to reduced sales and production volumes, higher sales-
incentive costs, higher selling and administrative expenses
and increased research and development costs. The higher
selling and administrative expenses and research and
development costs were mainly related to the acquisition of
Timberjack. In addition, manufacturing inefficiencies
associated with lower production volumes negatively affected
this year's results.
. Net income of the credit operations was $39.6 million for
the quarter and $92.1 million for the first six months,
compared with $36.2 million and $77.2 million last year. The
increases were largely due to higher income from a higher
average portfolio and from increased note sales, partially
offset by increased receivable write-offs primarily related to
equipment sold by the construction division and higher selling
and administrative expenses.
. The company's other businesses had operating losses of $10
million for the quarter and $21 million for the first six
months, compared with operating losses of $11 million and $19
million last year. Results for both years reflected costs for
the development of new products and services in addition to
goodwill amortization of the special-technologies group.
Benefiting this year's results were higher operating profits
of the health-care division.
MARKET CONDITIONS & OUTLOOK
Based on present market conditions, as outlined below, the
company's physical volume of sales is currently forecast to be
down 11 percent for the third quarter and to be flat for the
full year. Without the effect of acquisitions in either year,
physical volume is projected to decrease 15 percent in the
third quarter and 3 percent for the full year. Operating
margins will be under significant pressure during the third
quarter and are expected to remain below year-ago levels in
the second half of 2001.
AGRICULTURAL EQUIPMENT. Farm income in North America is
expected to approximate last year's levels due to higher
livestock and crop receipts supplemented by continued
government payments. In addition, farmland values are
continuing to increase and farm balance sheets are remaining
strong. Concerns over low prices for grain and other crops,
however, have kept demand for farm machinery at a relatively
low level. In this environment, the company continues to
expect that overall industry retail sales of farm equipment in
North America will be flat to up slightly compared with last
year's modest levels.
In Europe, concern over the outcome of the foot-and-mouth
disease situation has had a negative impact on farm-equipment
demand. However, with the outbreak apparently contained on the
Continent and new cases declining rapidly in the UK, European
industry retail sales of farm equipment are now expected to
decline by only 10 to 15 percent from last year. While farm-
equipment demand is anticipated to remain strong in Brazil,
the overall outlook for markets in Latin America, Australia
and Asia is now projected to be flat to down 5 percent in
2001.
In a further sign of the company's improving competitive
position, retail sales of John Deere farm equipment in North
America were higher for the quarter and the first six months.
The
Page 7
increases reflect continued favorable customer response to
company products, especially the new STS combines. In
conjunction with this higher level of sales, however,
inventories of used goods are now slightly above last year's
levels. Also, sales of large tractors, while higher than last
year, have remained below expectations. As a result,
consistent with the objective of rigorous asset management,
the company today is announcing a second one-week shutdown at
its Waterloo, Iowa, tractor-manufacturing facility, scheduled
for the last week of June and affecting the production of most
large tractors.
COMMERCIAL & CONSUMER EQUIPMENT. Deere sales have been
negatively affected by the slow economy and adverse weather
conditions during the prime spring selling period. Given their
seasonal nature, such sales are unlikely to be recouped later
in the year even if economic conditions improve. Division
sales are also being negatively affected by the transition to
a new order-fulfillment process that allows production to
occur in more direct alignment with customer orders and
requires less inventory. In this environment, the company now
expects its sales of commercial and consumer equipment to
remain well below last year's levels.
CONSTRUCTION EQUIPMENT. The North American economy continues
to decelerate from the rapid growth of the last five years.
Housing starts are expected to decline during the remainder of
the year despite recent interest rate reductions. Furthermore,
purchases by independent rental companies have been
significantly lower than anticipated during the prime selling
season and are expected to remain weak for the balance of the
year. In addition, both pulp and lumber markets have continued
to soften in response to slowing economic growth worldwide. In
this environment, the company now expects industry retail
sales of forestry and construction equipment to be 20 to 25
percent below last year's levels for 2001 and for pricing to
remain highly competitive.
CREDIT. The company's credit operations are expected to
continue benefiting from growth in the receivable portfolio,
but at a slower rate than in the first six months of the year.
ACTIONS DESIGNED TO BENEFIT INVESTORS
"Clearly we are disappointed that our results are now expected
to fall short of last year's levels," Lane said. "However, to
put our performance in perspective, it should be noted that we
are remaining profitable in the face of difficult markets for
all three of our equipment divisions. And our response to
these challenges is clear. We are intensifying our efforts to
achieve improved levels of asset management, while maintaining
an aggressive commitment to the development of advanced new
products and value-enhancing services." The company remains on
schedule to deliver over 100 new products later this year,
Lane pointed out, whose technology "promises to enhance
customer productivity and further strengthen our market
leadership. Such steps, we're confident, will bring
substantial benefits to our investors."
JOHN DEERE CAPITAL CORPORATION
The following is disclosed on behalf of the company's credit
subsidiary, John Deere Capital Corporation (JDCC), in
connection with the disclosure requirements applicable to its
periodic issuance of debt securities in the public market.
JDCC's net income was $35.4 million for the second quarter and
$79.9 million for the first six months of 2001, compared with
$32.4
Page 8
million and $68.5 million, respectively, last year. The
improvements for both periods were primarily due to growth of
the receivable and lease portfolio and higher income from
increased sales of retail notes, partially offset by higher
selling and administrative expenses and increased receivable
write-offs primarily related to equipment sold by the
construction division.
Net receivables and leases financed by JDCC were $8.230
billion at April 30, 2001, compared with $7.848 billion one
year ago. The increase resulted from acquisitions exceeding
collections during the last twelve months. This was partially
offset by sales of retail notes during the same period. Net
receivables and leases administered, which include receivables
previously sold, totaled $10.195 billion at April 30, 2001,
compared with $9.596 billion at April 30, 2000.
SAFE HARBOR STATEMENT
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 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, summer weather and soil
conditions, real estate values, animal diseases (including the
spread of "mad cow" and "foot-and-mouth" diseases), crop
pests, harvest yields, the level of farm product exports
(including concerns about genetically modified organisms and
China's delayed entry into the World Trade Organization) and
the level of government farm programs. Factors affecting the
company's commercial and consumer equipment business include
general economic conditions in the United States, consumer and
commercial confidence, consumer acceptance of the company's
new products and consumer borrowing 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; production and
technological difficulties including capacity and supply
constraints; energy prices and supplies; labor relations;
accounting standards; 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.
Page 9
SECOND QUARTER 2001 PRESS RELEASE
(millions of dollars and shares except per share amounts)
Three Months Ended
April 30
%
2001 2000 Change
Net sales and revenues:
Agricultural equipment net sales $1,779 $1,675 + 6
Commercial and consumer equipment
net sales 873 999 -13
Construction equipment net sales 561 634 -12
Other net sales 16 16
Total net sales 3,229 3,324 - 3
Credit revenues 359 312 +15
Other revenues 188 154 +22
Total net sales and revenues* $3,776 $3,790
Operating profit (loss):
Agricultural equipment $ 131 $ 159 -18
Commercial and consumer equipment 64 115 -44
Construction equipment 34 81 -58
Credit 64 56 +14
Other (10) (11) - 9
Total operating profit* 283 400 -29
Interest, corporate expenses
and income taxes (155) (196) -21
Net income $ 128 $ 204 -37
Per Share:
Net income - basic $ .55 $ .87 -37
Net income - diluted $ .54 $ .87 -38
* Includes overseas equipment operations:
Net sales $ 854 $ 816 + 5
Operating profit $ 73 $ 74 - 1
Six Months Ended
April 30
%
2001 2000 Change
Net sales and revenues:
Agricultural equipment net sales $3,007 $2,709 +11
Commercial and consumer equipment
net sales 1,303 1,492 -13
Construction equipment net sales 1,008 973 + 4
Other net sales 29 30 - 3
Total net sales 5,347 5,204 + 3
Credit revenues 726 613 +18
Other revenues 383 312 +23
Total net sales and revenues* $6,456 $6,129 + 5
Operating profit (loss):
Agricultural equipment $ 220 $ 173 +27
Commercial and consumer equipment 65 124 -48
Construction equipment 31 92 -66
Credit 144 120 +20
Other (21) (19) +11
Total operating profit* 439 490 -10
Interest, corporate expenses
and income taxes (255) (248) + 3
Net income $ 184 $ 242 -24
Per Share:
Net income - basic $ .79 $ 1.03 -23
Net income - diluted $ .78 $ 1.03 -24
* Includes overseas equipment operations:
Net sales $1,434 $1,366 + 5
Operating profit $ 125 $ 107 +17
April 30 October 31 April 30
2001 2000 2000
Equipment Operations:
Trade accounts and notes
receivable net $ 3,994 $ 3,169 $ 3,815
Inventories $ 2,173 $ 1,553 $ 1,877
Financial Services:
Financing receivables and
leases financed net $ 9,665 $10,099 $ 9,226
Financing receivables and
leases administered
net $11,895 $12,223 $11,177
Average shares outstanding 234.7 234.3 234.0
Page 10
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Three Months Ended April 30 Consolidated
Subsidiaries)
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales $3,229.0 $3,324.1
Finance and interest income 356.3 312.2
Health care premiums and fees 143.5 115.8
Investment income 3.0 3.7
Other income 44.3 33.9
Total 3,776.1 3,789.7
Costs and Expenses
Cost of sales 2,595.5 2,605.4
Research and development expenses 153.5 139.7
Selling, administrative and general
expenses 403.0 363.2
Interest expense 201.8 160.1
Health care claims and costs 118.6 94.9
Other operating expenses 89.1 73.2
Total 3,561.5 3,436.5
Income of Consolidated Group
Before Income Taxes 214.6 353.2
Provision for income taxes 81.6 149.5
Income of Consolidated Group 133.0 203.7
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (1.6) .1
Other (3.6) .5
Total (5.2) .6
Net Income $ 127.8 $ 204.3
Per Share:
Net income - basic $ .55 $ .87
Net income diluted $ .54 $ .87
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Three Months Ended April 30 Financial Services
on the Equity Basis)
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales $3,229.0 $3,324.1
Finance and interest income 26.3 21.3
Health care premiums and fees
Investment income 1.1
Other income 29.1 23.4
Total 3,284.4 3,369.9
Costs and Expenses
Cost of sales 2,599.5 2,609.2
Research and development expenses 153.5 139.7
Selling, administrative and general
expenses 301.2 275.1
Interest expense 71.4 44.2
Health care claims and costs
Other operating expenses 14.0 7.9
Total 3,139.6 3,076.1
Income of Consolidated Group
Before Income Taxes 144.8 293.8
Provision for income taxes 55.7 128.4
Income of Consolidated Group 89.1 165.4
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 39.6 36.2
Other (.9) 2.7
Total 38.7 38.9
Net Income $ 127.8 $ 204.3
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Three Months Ended April 30
Millions of dollars except per Three Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales
Finance and interest income $ 338.7 $ 295.8
Health care premiums and fees 148.2 120.4
Investment income 3.0 2.6
Other income 23.7 17.6
Total 513.6 436.4
Costs and Expenses
Cost of sales
Research and development expenses
Selling, administrative and general
expenses 102.4 88.8
Interest expense 139.2 120.8
Health care claims and costs 118.6 94.9
Other operating expenses 83.7 72.5
Total 443.9 377.0
Income of Consolidated Group
Before Income Taxes 69.7 59.4
Provision for income taxes 25.8 21.1
Income of Consolidated Group 43.9 38.3
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (1.6) .1
Other .1
Total (1.6) .2
Net Income $ 42.3 $ 38.5
Page 11
DEERE & COMPANY CONSOLIDATED
STATEMENT OF CONSOLIDATED INCOME (Deere & Company and
Six Months Ended April 30 Consolidated
Subsidiaries)
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales $5,347.2 $5,204.1
Finance and interest income 718.8 615.6
Health care premiums and fees 278.4 228.4
Investment income 6.0 12.8
Other income 106.0 68.2
Total 6,456.4 6,129.1
Costs and Expenses
Cost of sales 4,291.2 4,157.8
Research and development expenses 287.8 242.3
Selling, administrative and general
expenses 758.7 678.9
Interest expense 401.1 306.9
Health care claims and costs 228.3 185.1
Other operating expenses 182.2 145.1
Total 6,149.3 5,716.1
Income of Consolidated Group
Before Income Taxes 307.1 413.0
Provision for income taxes 114.3 170.3
Income of Consolidated Group 192.8 242.7
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (1.0) .2
Other (7.6) (.9)
Total (8.6) (.7)
Net Income $ 184.2 $ 242.0
Per Share:
Net income - basic $ .79 $ 1.03
Net income diluted $ .78 $ 1.03
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
STATEMENT OF CONSOLIDATED INCOME (Deere & Company with
Six Months Ended April 30 Financial Services
on the Equity Basis)
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales $5,347.2 $5,204.1
Finance and interest income 52.9 46.3
Health care premiums and fees
Investment income 7.7
Other income 71.4 45.9
Total 5,471.5 5,304.0
Costs and Expenses
Cost of sales 4,299.0 4,166.0
Research and development expenses 287.8 242.3
Selling, administrative and general
expenses 568.1 514.6
Interest expense 133.2 80.9
Health care claims and costs
Other operating expenses 31.9 15.6
Total 5,320.0 5,019.4
Income of Consolidated Group
Before Income Taxes 151.5 284.6
Provision for income taxes 58.3 124.3
Income of Consolidated Group 93.2 160.3
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit 92.1 77.2
Other (1.1) 4.5
Total 91.0 81.7
Net Income $ 184.2 $ 242.0
DEERE & COMPANY FINANCIAL SERVICES
STATEMENT OF CONSOLIDATED INCOME
Six Months Ended April 30
Millions of dollars except per Six Months Ended
share amounts April 30
(Unaudited) 2001 2000
Net Sales and Revenues
Net sales
Finance and interest income $ 682.1 $ 578.7
Health care premiums and fees 287.6 238.0
Investment income 6.0 5.1
Other income 51.4 36.8
Total 1,027.1 858.6
Costs and Expenses
Cost of sales
Research and development expenses
Selling, administrative and general
expenses 192.0 165.8
Interest expense 284.2 235.3
Health care claims and costs 228.3 185.1
Other operating expenses 167.0 144.1
Total 871.5 730.3
Income of Consolidated Group
Before Income Taxes 155.6 128.3
Provision for income taxes 55.9 45.8
Income of Consolidated Group 99.7 82.5
Equity in Income (Loss) of Unconsolidated
Subsidiaries and Affiliates
Credit (1.0) .2
Other .1
Total (1.0) .3
Net Income $ 98.7 $ 82.8
Page 12
DEERE & COMPANY CONSOLIDATED
CONDENSED CONSOLIDATED (Deere & Company and
BALANCE SHEET Consolidated Subsidiaries)
Millions of dollars April 30 October 31 April 30
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 484.4 $ 291.7 $ 370.4
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 484.4 291.7 370.4
Marketable securities 137.0 127.4 112.7
Receivables from
unconsolidated subsidiaries
and affiliates 323.1 230.9 155.6
Trade accounts and notes
receivable net 3,993.9 3,169.2 3,815.2
Financing receivables net 7,851.0 8,275.7 7,542.3
Other receivables 311.8 395.3 226.0
Equipment on operating
leases net 1,915.0 1,954.4 1,817.8
Inventories 2,173.2 1,552.9 1,876.9
Property and equipment net 1,929.2 1,912.4 1,778.2
Investments in unconsolidated
subsidiaries and affiliates 209.3 190.7 165.5
Intangible assets net 795.6 652.2 713.1
Prepaid pension costs 650.5 635.3 621.8
Other assets 385.6 256.8 215.9
Deferred income taxes 792.5 740.4 686.7
Deferred charges 147.8 84.1 107.1
Total $22,099.9 $20,469.4 $20,205.2
Liabilities and Stockholders'
Equity
Short-term borrowings $ 5,665.1 $ 5,758.5 $ 6,562.7
Payables to unconsolidated
subsidiaries and affiliates 63.7 32.7 65.9
Accounts payable and
accrued expenses 2,972.0 2,976.4 2,717.8
Health care claims and reserves 79.7 63.4 55.2
Accrued taxes 89.1 57.5 76.4
Deferred income taxes 74.6 64.4
Long-term borrowings 6,428.5 4,764.3 3,960.4
Retirement benefit accruals
and other liabilities 2,461.0 2,440.1 2,486.2
Total liabilities 17,759.1 16,167.5 15,989.0
Stockholders' equity 4,340.8 4,301.9 4,216.2
Total $22,099.9 $20,469.4 $20,205.2
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED CONSOLIDATED (Deere & Company with Financial
BALANCE SHEET Services on the Equity Basis)
Millions of dollars April 30 October 31 April 30
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 142.0 $ 91.4 $ 144.2
Cash deposited with
unconsolidated subsidiaries 197.3 548.3 131.5
Cash and cash equivalents 339.3 639.7 275.7
Marketable securities
Receivables from
unconsolidated subsidiaries
and affiliates 382.5 408.4 336.5
Trade accounts and notes
receivable net 3,993.9 3,169.2 3,815.2
Financing receivables net 94.8 125.0 134.2
Other receivables 169.2 266.4 104.1
Equipment on operating
leases net 6.2 5.9
Inventories 2,173.2 1,552.9 1,876.9
Property and equipment net 1,886.6 1,864.6 1,733.4
Investments in unconsolidated
subsidiaries and affiliates 1,640.3 1,561.8 1,462.2
Intangible assets net 794.7 651.2 712.0
Prepaid pension costs 650.5 635.3 621.8
Other assets 150.7 117.5 91.5
Deferred income taxes 857.1 736.4 680.9
Deferred charges 138.2 78.4 99.2
Total $13,277.2 $11,812.7 $11,943.6
Liabilities and Stockholders'
Equity
Short-term borrowings $ 1,928.1 $ 927.5 $ 2,028.4
Payables to unconsolidated
subsidiaries and affiliates 131.5 41.4 65.9
Accounts payable and
accrued expenses 2,166.3 2,360.8 2,093.8
Health care claims and reserves
Accrued taxes 78.5 45.5 66.4
Deferred income taxes 2.5 6.7
Long-term borrowings 2,196.9 1,717.7 1,004.2
Retirement benefit accruals
and other liabilities 2,435.1 2,415.4 2,462.0
Total liabilities 8,936.4 7,510.8 7,727.4
Stockholders' equity 4,340.8 4,301.9 4,216.2
Total $13,277.2 $11,812.7 $11,943.6
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED CONSOLIDATED
BALANCE SHEET
Millions of dollars April 30 October 31 April 30
(Unaudited) 2001 2000 2000
Assets
Cash and short-term
investments $ 342.4 $ 200.3 $ 226.2
Cash deposited with
unconsolidated subsidiaries
Cash and cash equivalents 342.4 200.3 226.2
Marketable securities 137.0 127.4 112.6
Receivables from
unconsolidated subsidiaries
and affiliates 263.1 140.0 92.6
Trade accounts and notes
receivable net
Financing receivables net 7,756.2 8,150.7 7,408.1
Other receivables 142.5 128.9 121.8
Equipment on operating
leases net 1,908.8 1,948.5 1,817.8
Inventories
Property and equipment net 42.5 47.7 44.8
Investments in unconsolidated
subsidiaries and affiliates 7.5 10.1 11.7
Intangible assets net .9 1.1 1.1
Prepaid pension costs
Other assets 235.0 139.3 124.4
Deferred income taxes 2.9 3.9 5.8
Deferred charges 9.5 5.7 7.9
Total $10,848.3 $10,903.6 $ 9,974.8
Liabilities and Stockholders'
Equity
Short-term borrowings $ 3,737.0 $ 4,831.1 $ 4,534.3
Payables to unconsolidated
subsidiaries and affiliates 452.0 856.9 405.2
Accounts payable and
accrued expenses 805.7 615.6 624.0
Health care claims and reserves 79.7 63.4 55.2
Accrued taxes 10.6 11.9 10.0
Deferred income taxes 67.5 72.1 57.7
Long-term borrowings 4,231.6 3,046.7 2,956.2
Retirement benefit accruals
and other liabilities 25.9 24.8 24.0
Total liabilities 9,410.0 9,522.5 8,666.6
Stockholders' equity 1,438.3 1,381.1 1,308.2
Total $10,848.3 $10,903.6 $9,974.8
Page 13
DEERE & COMPANY CONSOLIDATED
CONDENSED STATEMENT OF (Deere & Company and
CONSOLIDATED CASH FLOWS Consolidated Subsidiaries)
Six Months Ended April 30 Six Months Ended
April 30
Millions of dollars (Unaudited) 2001 2000
Cash Flows from Operating Activities
Net income $ 184.2 $ 242.0
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (1,231.7) (696.7)
Net cash provided by (used for)
operating activities (1,047.5) (454.7)
Cash Flows from Investing Activities
Collections of financing receivables 3,243.0 3,338.6
Proceeds from sales of financing
receivables 1,400.9 154.1
Proceeds from maturities and sales
of marketable securities 21.7 229.7
Proceeds from sales of equipment on
operating leases 203.9 151.4
Cost of financing receivables
acquired (4,291.2) (4,179.3)
Purchases of marketable securities (28.6) (30.7)
Purchases of property and equipment (181.1) (109.1)
Cost of operating leases acquired (349.4) (460.9)
Acquisitions of businesses, net of
cash acquired (250.3) (568.2)
Increase in receivables with
unconsolidated affiliates (55.3) (87.8)
Other 82.9 39.9
Net cash provided by (used for)
investing activities (203.5) (1,522.3)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings (554.3) 2,258.7
Change in intercompany
receivables/payables
Proceeds from long-term borrowings 3,148.9 1,012.0
Principal payments on long-term
borrowings (1,047.4) (1,119.6)
Proceeds from issuance of
common stock 5.9 5.9
Repurchases of common stock (1.3)
Dividends paid (103.2) (102.9)
Other (1.4) (.1)
Net cash provided by (used for)
financing activities 1,447.2 2,054.0
Effect of Exchange Rate
Changes on Cash (3.5) (2.1)
Net Increase (Decrease) in Cash
and Cash Equivalents 192.7 74.9
Cash and Cash Equivalents at
Beginning of Period 291.7 295.5
Cash and Cash Equivalents at
End of Period $ 484.4 $ 370.4
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.
DEERE & COMPANY EQUIPMENT OPERATIONS
CONDENSED STATEMENT OF (Deere & Company with
CONSOLIDATED CASH FLOWS Financial Services on the
Six Months Ended April 30 Equity Basis)
Six Months Ended
April 30
Millions of dollars (Unaudited) 2001 2000
Cash Flows from Operating Activities
Net income $ 184.2 $ 242.0
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities (1,583.1) (995.5)
Net cash provided by (used for)
operating activities (1,398.9) (753.5)
Cash Flows from Investing Activities
Collections of financing receivables 31.1 18.9
Proceeds from sales of financing
receivables
Proceeds from maturities and sales
of marketable securities 202.8
Proceeds from sales of equipment on
operating leases 2.0 1.1
Cost of financing receivables
acquired (1.2) (4.3)
Purchases of marketable securities
Purchases of property and equipment (176.1) (104.1)
Cost of operating leases acquired (3.5) (.3)
Acquisitions of businesses, net of
cash acquired (245.1) (567.2)
Increase in receivables with
unconsolidated affiliates
Other 18.4 (.5)
Net cash provided by (used for)
investing activities (374.4) (453.6)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings 943.0 1,356.3
Change in intercompany
receivables/payables 125.0 (.6)
Proceeds from long-term borrowings 539.4 1.5
Principal payments on long-term
borrowings (32.5) (3.7)
Proceeds from issuance of
common stock 5.9 5.9
Repurchases of common stock (1.3)
Dividends paid (103.2) (102.9)
Other (1.4) (.1)
Net cash provided by (used for)
financing activities 1,474.9 1,256.4
Effect of Exchange Rate
Changes on Cash (2.0) (2.7)
Net Increase (Decrease) in Cash
and Cash Equivalents (300.4) 46.6
Cash and Cash Equivalents at
Beginning of Period 639.7 229.1
Cash and Cash Equivalents at
End of Period $ 339.3 $ 275.7
DEERE & COMPANY FINANCIAL SERVICES
CONDENSED STATEMENT OF
CONSOLIDATED CASH FLOWS Six Months Ended
Six Months Ended April 30 April 30
Millions of dollars (Unaudited) 2001 2000
Cash Flows from Operating Activities
Net income $ 98.7 $ 82.8
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities 262.7 226.0
Net cash provided by (used for)
operating activities 361.4 308.8
Cash Flows from Investing Activities
Collections of financing receivables 3,211.9 3,319.7
Proceeds from sales of financing
receivables 1,400.9 154.1
Proceeds from maturities and sales
of marketable securities 21.7 27.0
Proceeds from sales of equipment on
operating leases 201.8 150.2
Cost of financing receivables
acquired (4,290.0) (4,175.0)
Purchases of marketable securities (28.6) (30.7)
Purchases of property and equipment (5.0) (5.0)
Cost of operating leases acquired (345.9) (460.6)
Acquisitions of businesses, net of
cash acquired (5.1) (1.1)
Increase in receivables with
unconsolidated affiliates (55.3) (87.8)
Other 54.7 36.6
Net cash provided by (used for)
investing activities 161.1 (1,072.6)
Cash Flows from Financing Activities
Increase (decrease) in short-term
borrowings (1,497.3) 902.4
Change in intercompany
receivables/payables (476.0) 14.7
Proceeds from long-term borrowings 2,609.6 1,010.5
Principal payments on long-term
borrowings (1,015.0) (1,115.9)
Proceeds from issuance of
common stock
Repurchases of common stock
Dividends paid (10.0) (10.0)
Other 9.8 4.0
Net cash provided by (used for)
financing activities (378.9) 805.7
Effect of Exchange Rate
Changes on Cash (1.5) .5
Net Increase (Decrease) in Cash
and Cash Equivalents 142.1 42.4
Cash and Cash Equivalents at
Beginning of Period 200.3 183.8
Cash and Cash Equivalents at End
of Period $ 342.4 $ 226.2
Page 14
Notes to Interim Financial Statements
(1) The "Consolidated" (Deere & Company and Consolidated
Subsidiaries) data in each of the financial statements
represent the consolidation of all Deere & Company's
subsidiaries. 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, commercial and consumer
equipment, construction equipment and special technologies
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 and health care operations.
(2) Dividends declared and paid on a per share basis were
as follows:
Three Months Ended Six Months Ended
April 30 April 30
------------------ ----------------
2001 2000 2001 2000
------------------ ----------------
Dividends declared $.22 $.22 $.44 $.44
Dividends paid $.22 $.22 $.44 $.44
(3) The calculation of primary net income per share is
based on the average number of shares outstanding during the
six months ended April 30, 2001 and 2000 of 234.7 million and
234.0 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 2001, the Company adopted
Financial Accounting Standards Board (FASB) Statement 133,
Accounting for Derivative Instruments and Hedging Activities,
as amended by FASB Statement 138. Under the new standards,
all derivatives have been recorded at fair value in the
financial statements. Changes in fair values of the
derivatives are recognized periodically in other comprehensive
income (equity) for derivatives designated as hedges of future
cash flows or net income for all other derivatives. The
effects of adoption on the Company's financial position or net
income were not material.
(5) Comprehensive income, which includes all changes in the
Company's equity during the period except transactions with
stockholders, was as follows in millions of dollars:
Three Months Six Months
Ended Ended
April 30 April 30
-------------- --------------
2001 2000 2001 2000
-------------- --------------
Net income $127.8 $204.3 $184.2 $242.0
Other comprehensive income
(loss), net of tax:
Change in cumulative
translation adjustment (49.2) (40.0) (16.0) (34.6)
Unrealized gain (loss)
on marketable securities .1 (.3) 1.9 (5.2)
Unrealized loss on derivatives (11.1) (39.8)
-------------- --------------
Comprehensive income $ 67.6 $164.0 $130.3 $202.2
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Page 15