-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NuNxmd3gn5F7emr6tMxec4sdija2rV2TbKQTbkLM7xZPrZZnWZkW6y+UjRWPyAB4 ddjqnMQ90HpJ5Xo/3MWBOw== 0000315189-00-000010.txt : 20000216 0000315189-00-000010.hdr.sgml : 20000216 ACCESSION NUMBER: 0000315189-00-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000215 ITEM INFORMATION: FILED AS OF DATE: 20000215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEERE & CO CENTRAL INDEX KEY: 0000315189 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 362382580 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04121 FILM NUMBER: 545378 BUSINESS ADDRESS: STREET 1: ONE JOHN DEERE PLACE CITY: MOLINE STATE: IL ZIP: 61265 BUSINESS PHONE: 3097658000 8-K 1 - ------------------------------------------------------------- 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 15, 2000 (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/ Michael A. Harring ------------------------- Michael A. Harring, Secretary Dated: February 15, 2000 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) Contact: Greg Derrick Deere & Company (309) 765-5290 DEERE & COMPANY REPORTS FIRST-QUARTER PROFIT - ----------------------------------------------------------- For Immediate Release February 15, 2000 . Results remain profitable despite ag downturn, seasonal weakness. . Performance reflects success of growth and quality initiatives. . Aggressive, timely action in prior year keeps Deere on track for improved 2000. . First-quarter net income $37.7 million; net sales and revenues $2.339 billion. MOLINE, IL (February 15, 2000) -- Deere & Company today reported first-quarter net income of $37.7 million, or $.16 per share, for the quarter ended January 31, 2000, compared with $49.7 million, or $.21 per share, in last year's first quarter. Depressed agricultural commodity prices continued to severely affect demand for agricultural equipment during the period. Production schedules in agricultural and construction equipment were at planned low levels during the quarter, reflecting improved order-fulfillment processes in construction equipment and the balancing of agricultural-equipment production with present levels of demand. "Under current circumstances, it is especially gratifying to show positive results, particularly during a quarter that has historically been the seasonally weakest period for the industry," commented Hans W. Becherer, chairman and chief executive officer. "This is evidence of our progress in growth and quality initiatives, shows our success in achieving increased diversification of our business lines, and leaves our business plans for the year on track." Worldwide net sales and revenues for the quarter decreased 5 percent, to $2.339 billion, compared with $2.459 billion last year. Net equipment sales were $1.880 billion for the quarter, compared with $1.973 billion last year. Overseas net sales for the quarter were $551 million, compared with $572 million the previous year. Excluding the impact of the stronger U.S. dollar, overseas sales for the quarter would have shown a 4 percent increase over last year. Overall, the company's physical volume of sales decreased 3 percent for the period. Worldwide equipment operations had an operating profit of $20 million for the first quarter of 2000, compared with $51 million last year. Lower sales, an adverse sales mix and Page 5 product-development costs of the newly formed special technologies group, partially offset by lower pension costs, affected this year's results. . Operating profit of the worldwide agricultural equipment division for the first quarter of 2000 was $14 million, compared with $18 million last year. Results for the quarter reflected the impact of lower sales, as well as cost reductions and improved efficiencies from the restructuring activities of these operations. Significantly, North American used-goods receivables continued to decline during the quarter. Overseas agricultural- equipment sales, excluding the impact of the stronger U.S. dollar for the quarter, were slightly higher than last year. The overseas operations continued to be positive contributors to the division's results. . Operating profit of the worldwide construction equipment division was $11 million, compared with $25 million last year. Lower sales and production volumes affected this year's quarterly results, due to full implementation of the estimate-to-cash program, anticipated lower demand, and a reversal of sales and cost of sales related to company equipment held in inventory by a recently established joint venture. . Operating profit of the worldwide commercial and consumer equipment division for the quarter was $9 million, compared with $12 million last year. Although the division's sales continued to increase, operations were adversely affected by higher selling and administrative costs related to growth, as well as by inefficiencies and costs related to the relocation of the handheld-product operations. . Net income of the credit operations was $41 million for the first quarter, compared with $42 million last year. This year's results were affected by higher operating costs and lower income from the sale of retail notes, partially offset by higher income from a higher average portfolio. . The company's other businesses had operating losses of $9 million for the first quarter, compared with operating losses of $3 million last year. Current-year results reflected goodwill amortization and higher costs related to the development of new products of the special technologies group. Partially offsetting these factors was higher operating profit of the health-care operations. MARKET CONDITIONS AND OUTLOOK - ----------------------------- . AGRICULTURAL EQUIPMENT. Last month, the USDA lowered its estimates of carryover stocks, following a change in the assessment of the size of the 1999 corn crop and increased usage. Although grain and oilseed prices have improved slightly on this news and on concerns about dryness in certain areas of the United States, prices remain at low levels and demand for farm equipment remains very weak. At this time, Deere continues to expect that industry retail sales of farm machinery in North America will be off approximately 5 to 10 percent this year, compared with 1999 levels. Similar declines are expected in other major markets. Page 6 . CONSTRUCTION EQUIPMENT. The market for these products remains extremely competitive. In addition, the Federal Reserve continues its efforts to slow the economy through a series of increases in short-term interest rates. In this environment, Deere continues to expect construction-industry sales to be down 5 to 10 percent for the year. Retail sales of the company's products, however, are expected be higher in the remainder of the year due to an expanded product line. Additionally, year-2000 production is expected to benefit from tracking more closely with retail demand than was the case in 1999 when dealers were reducing their inventories. . COMMERCIAL & CONSUMER EQUIPMENT. Continuing a trend of strong gains, retail demand for Deere's commercial and consumer equipment is expected to achieve further growth this year, assuming normal weather patterns and a continuation of current economic conditions. These operations should continue to benefit from market-share growth, positive customer response to recently introduced products and international expansion. . CREDIT OPERATIONS. Credit is expected to continue benefiting from a larger receivable and lease portfolio this year. However, higher growth expenditures, lower gains on the sale of retail notes and continued weakness in the agricultural economy are expected to keep pressure on margins and have an adverse effect on this year's results. Based on these conditions, the company continues to expect its worldwide physical volume of sales to increase by approximately 10 percent for the year 2000. Second-quarter physical volumes are expected to be about 15 percent higher than in the comparable 1999 period. "Our results are clearly benefiting from an aggressive and timely response to market conditions, as well as from the pursuit of our growth and quality initiatives," Becherer said. "In spite of a market that continues to be challenging, we are on track to achieve improved results this year." 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 net income was $36.2 million for the first quarter of 2000, compared with $37.4 million last year. First quarter results were affected by higher operating expenses and lower income from the sale of retail notes, partially offset by higher income on a larger average receivable and lease portfolio. Net receivables and leases financed by JDCC were $7.335 billion at January 31, 2000, compared with $6.803 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 $9.432 billion at January 31, 2000, compared with $8.580 billion at January 31, 1999. 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; technological difficulties; accounting standards; and other risks and uncertainties. The impact and timing of the previously announced Timberjack acquisition is uncertain, including the impact of post-merger integration costs and the amortization of intangibles. 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 the amount and timing of 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. These 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 filings with the Securities and Exchange Commission. Page 8 FIRST QUARTER 2000 PRESS RELEASE (millions of dollars and shares except per share amounts) Three Months Ended January 31 ---------------------- % 2000 1999 Change ---- ---- ------ Net sales and revenues: Agricultural equipment net sales $1,035 $1,157 - 11 Construction equipment net sales 338 387 - 13 Commercial and consumer equipment net sales 493 429 + 15 Other net sales 14 ------ ------ Total net sales 1,880 1,973 - 5 Credit revenues 301 261 + 15 Other revenues 158 225 - 30 ------ ------ Total net sales and revenues* $2,339 $2,459 - 5 ====== ====== Operating profit: Agricultural equipment $ 14 $ 18 - 22 Construction equipment 11 25 - 56 Commercial and consumer equipment 9 12 - 25 Credit 64 65 - 2 Other (9) (3) +200 ------ ------ Total operating profit* 89 117 - 24 Interest, corporate expenses and income taxes (51) (67) - 24 ------ ------ Net income $ 38 $ 50 - 24 ====== ====== Per Share: Net income - basic $ .16 $ .21 - 24 Net income - diluted $ .16 $ .21 - 24 * Includes overseas equipment operations: Net sales $ 551 $ 572 - 4 Operating profit $ 33 $ 54 - 39 January 31 October 31 January 31 2000 1999 1999 ---------- ---------- ---------- Equipment Operations: Trade accounts and notes receivable - net $ 3,180 $ 3,251 $3,829 Inventories $ 1,781 $ 1,294 $1,615 Financial Services: Financing receivables and leases financed - net $ 8,660 $ 8,276 $7,870 Financing receivables and leases administered - net $11,008 $10,992 $9,820 Average shares outstanding $ 233.9 $ 232.9 $231.7 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) 2000 1999 Net Sales and Revenues Net sales of equipment $1,880.0 $1,973.2 Finance and interest income 303.4 259.0 Insurance and health care premiums 112.5 179.8 Investment income 9.1 18.7 Other income 34.3 27.8 Total 2,339.3 2,458.5 Costs and Expenses Cost of goods sold 1,552.5 1,653.8 Research and development expenses 102.6 95.9 Selling, administrative and general expenses 315.4 301.8 Interest expense 146.8 134.1 Insurance and health care claims and benefits 90.3 153.9 Other operating expenses 71.9 42.7 Total 2,279.5 2,382.2 Income of Consolidated Group Before Income Taxes 59.8 76.3 Provision for income taxes 20.8 26.5 Income of Consolidated Group 39.0 49.8 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .1 .4 Other (1.4) (.5) Total (1.3) (.1) Net Income $ 37.7 $ 49.7 Per Share: Net income - basic $ .16 $ .21 Net income - diluted $ .16 $ .21 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 Financial Services on the Equity Basis) - -------------------------------------------------------- Millions of dollars except per Three Months Ended share amounts January 31 (Unaudited) 2000 1999 Net Sales and Revenues Net sales of equipment $1,880.0 $1,973.2 Finance and interest income 25.0 21.8 Insurance and health care premiums Investment income 6.6 Other income 22.5 15.5 Total 1,934.1 2,010.5 Costs and Expenses Cost of goods sold 1,556.8 1,658.5 Research and development expenses 102.6 95.9 Selling, administrative and general expenses 239.4 207.8 Interest expense 36.8 39.9 Insurance and health care claims and benefits Other operating expenses 7.6 (2.2) Total 1,943.2 1,999.9 Income of Consolidated Group Before Income Taxes (9.1) 10.6 Provision for income taxes (4.0) 3.8 Income of Consolidated Group (5.1) 6.8 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit 41.0 41.6 Other 1.8 1.3 Total 42.8 42.9 Net Income $ 37.7 $ 49.7 DEERE & COMPANY FINANCIAL SERVICES STATEMENT OF CONSOLIDATED INCOME - -------------------------------------------------------- Three Months Ended Millions of dollars except per January 31 share amounts) 2000 1999 (unaudited) Net Sales and Revenues Net sales of equipment Finance and interest income $ 282.9 $ 240.7 Insurance and health care premiums 117.6 186.6 Investment income 2.5 18.7 Other income 19.2 20.7 Total 422.2 466.7 Costs and Expenses Cost of goods sold Research and development expenses Selling, administrative and general expenses 76.9 95.2 Interest expense 114.5 97.6 Insurance and health care claims and benefits 90.3 155.7 Other operating expenses 71.6 52.5 Total 353.3 401.0 Income of Consolidated Group Before Income Taxes 68.9 65.7 Provision for income taxes 24.7 22.7 Income of Consolidated Group 44.2 43.0 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .1 .4 Other .1 Total .2 .4 Net Income $ 44.4 $ 43.4 Page 10 DEERE & COMPANY CONSOLIDATED CONDENSED CONSOLIDATED (Deere & Company and BALANCE SHEET Consolidated Subsidiaries) - -------------------------------------------------------------- Millions of dollars January 31 October 31 January 31 (Unaudited) 2000 1999 1999 Assets Cash and short-term investments $ 297.5 $ 295.5 $ 325.5 Cash deposited with unconsolidated subsidiaries Cash and cash equivalents 297.5 295.5 325.5 Marketable securities 115.5 315.5 870.8 Receivables from unconsolidated subsidiaries and affiliates 20.4 30.2 48.4 Trade accounts and notes receivable - net 3,180.1 3,251.1 3,828.8 Financing receivables - net 6,998.4 6,742.6 6,696.7 Other receivables 258.1 273.9 519.3 Equipment on operating leases - net 1,752.7 1,654.7 1,256.5 Inventories 1,781.0 1,294.3 1,614.7 Property and equipment - net 1,751.3 1,782.3 1,674.3 Investments in unconsolidated subsidiaries and affiliates 166.0 151.5 173.8 Intangible assets - net 294.1 295.1 212.0 Prepaid pension costs 621.4 619.9 662.3 Other assets 199.3 185.5 103.5 Deferred income taxes 625.8 598.1 400.2 Deferred charges 82.8 88.0 116.4 Total $18,144.4 $17,578.2 $18,503.2 Liabilities and Stockholders' Equity Short-term borrowings $ 5,493.0 $ 4,488.2 $ 5,871.2 Payables to unconsolidated subsidiaries and affiliates 31.5 15.5 31.9 Accounts payable and accrued expenses 2,327.7 2,432.8 2,359.5 Insurance and health care claims and reserves 60.7 55.4 402.9 Accrued taxes 120.0 144.8 141.7 Deferred income taxes 61.8 63.0 18.3 Long-term borrowings 3,457.2 3,806.2 3,275.7 Retirement benefit accruals and other liabilities 2,497.7 2,478.0 2,373.5 Total liabilities 14,049.6 13,483.9 14,474.7 Stockholders' equity 4,094.8 4,094.3 4,028.5 Total $18,144.4 $17,578.2 $18,503.2 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 January 31 October 31 January 31 (Unaudited) 2000 1999 1999 Assets Cash and short-term investments $ 116.1 $ 111.7 $ 80.3 Cash deposited with unconsolidated subsidiaries 117.4 92.8 Cash and cash equivalents 116.1 229.1 173.1 Marketable securities 205.3 Receivables from unconsolidated subsidiaries and affiliates 280.6 266.0 227.4 Trade accounts and notes receivable - net 3,180.1 3,251.1 3,828.8 Financing receivables - net 89.2 118.4 83.4 Other receivables 122.8 129.4 42.2 Equipment on operating leases - net 1.8 2.6 Inventories 1,781.0 1,294.3 1,614.7 Property and equipment - net 1,706.2 1,738.8 1,625.7 Investments in unconsolidated subsidiaries and affiliates 1,431.6 1,362.8 1,693.9 Intangible assets - net 293.8 294.8 204.8 Prepaid pension costs 621.4 619.9 662.3 Other assets 104.0 95.7 73.9 Deferred income taxes 620.1 592.9 379.1 Deferred charges 76.3 80.8 85.5 Total $10,425.0 $10,281.9 $10,694.8 Liabilities and Stockholders' Equity Short-term borrowings $ 933.9 $ 642.2 $ 2,076.2 Payables to unconsolidated subsidiaries and affiliates 60.5 15.5 31.9 Accounts payable and accrued expenses 1,706.8 1,891.9 1,473.8 Insurance and health care claims and reserves Accrued taxes 105.7 138.1 136.3 Deferred income taxes 7.4 7.2 5.5 Long-term borrowings 1,040.9 1,036.1 601.2 Retirement benefit accruals and other liabilities 2,475.0 2,456.6 2,341.4 Total liabilities 6,330.2 6,187.6 6,666.3 Stockholders' equity 4,094.8 4,094.3 4,028.5 Total $10,425.0 $10,281.9 $10,694.8 DEERE & COMPANY FINANCIAL SERVICES CONDENSED CONSOLIDATED BALANCE SHEET - -------------------------------------------------------------- Millions of dollars January 31 October 31 January 31 (Unaudited) 2000 1999 1999 Assets Cash and short-term investments $ 181.4 $ 183.8 $ 245.2 Cash deposited with unconsolidated subsidiaries Cash and cash equivalents 181.4 183.8 245.2 Marketable securities 115.5 110.1 870.8 Receivables from unconsolidated subsidiaries and affiliates 29.1 4.8 6.7 Trade accounts and notes receivables - net Financing receivables - net 6,909.3 6,624.2 6,613.2 Other receivables 135.3 144.5 477.1 Equipment on operating leases - net 1,750.9 1,652.2 1,256.5 Inventories Property and equipment - net 45.1 43.5 48.6 Investments in unconsolidated subsidiaries and affiliates 11.1 9.9 20.9 Intangible assets - net .3 .3 7.2 Prepaid pension costs Other assets 95.2 89.8 29.6 Deferred income taxes 5.6 5.2 21.0 Deferred charges 6.6 7.2 30.9 Total $9,285.4 $8,875.5 $9,627.7 Liabilities and Stockholders' Equity Short-term borrowings $4,559.1 $3,846.0 $3,795.0 Payables to unconsolidated subsidiaries and affiliates 260.2 358.1 278.5 Accounts payable and accrued expenses 620.9 540.8 885.6 Insurance and health care claims and reserves 60.7 55.4 402.9 Accrued taxes 14.3 6.8 5.4 Deferred income taxes 54.4 55.8 12.8 Long-term borrowings 2,416.3 2,770.1 2,674.6 Retirement benefit accruals and other liabilities 22.7 21.3 32.1 Total liabilities 8,008.6 7,654.3 8,086.9 Stockholders' equity 1,276.8 1,221.2 1,540.8 Total $9,285.4 $8,875.5 $9,627.7 Page 11 DEERE & COMPANY CONSOLIDATED CONDENSED STATEMENT OF (Deere & Company and CONSOLIDATED CASH FLOWS Consolidated Subsidiaries) - -------------------------------------------------------------- Three Months Ended January 31 Millions of dollars (Unaudited) 2000 1999 Cash Flows from Operating Activities Net income $ 37.7 $ 49.7 Adjustments to reconcile net income to net cash provided by (used for) operating activities (454.3) (446.8) Net cash provided by (used for) operating activities (416.6) (397.1) Cash Flows from Investing Activities Collections of financing receivables 1,794.8 1,598.4 Proceeds from sales of financing receivables 71.3 102.1 Proceeds from maturities and sales of marketable securities 215.5 37.3 Proceeds from sales of equipment on operating leases 61.7 38.1 Cost of financing receivables acquired (2,007.8) (2,042.2) Purchases of marketable securities (19.4) (33.8) Purchases of property and equipment (37.3) (54.9) Cost of operating leases acquired (209.5) (125.2) Acquisitions of businesses, net of cash acquired (14.9) Other 69.1 71.8 Net cash provided by (used for) investing activities (76.5) (408.4) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 733.2 541.7 Change in intercompany receivables/payables Proceeds from long-term borrowings 162.7 675.0 Principal payments on long-term borrowings (353.5) (297.5) Proceeds from issuance of common stock 4.5 .4 Repurchases of common stock (46.1) Dividends paid (51.4) (51.7) Other Net cash provided by financing activities 495.5 821.8 Effect of Exchange Rate Changes on Cash (.4) (.5) Net Increase (Decrease) in Cash and Cash Equivalents 2.0 15.8 Cash and Cash Equivalents at Beginning of Period 295.5 309.7 Cash and Cash Equivalents at End of Period $ 297.5 $ 325.5 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 Equity Basis) - ------------------------------------------------------------- Three Months Ended January 31 Millions of dollars (Unaudited) 2000 1999 Cash Flows from Operating Activities Net income $ 37.7 $ 49.7 Adjustments to reconcile net income to net cash provided by (used for) operating activities (601.8) (566.4) Net cash provided by (used for) operating activities (564.1) (516.7) Cash Flows from Investing Activities Collections of financing receivables 30.0 7.5 Proceeds from sales of financing receivables Proceeds from maturities and sales of marketable securities 202.8 Proceeds from sales of equipment on operating leases .1 Cost of financing receivables acquired (.3) (9.0) Purchases of marketable securities Purchases of property and equipment (34.7) (50.9) Cost of operating leases acquired (.3) Acquisitions of businesses, net of cash acquired (13.8) Other 1.8 3.5 Net cash provided by (used for) investing activities 185.6 (48.9) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 276.6 561.2 Change in intercompany receivables/payables 36.4 17.6 Proceeds from long-term borrowings 50.0 Principal payments on long-term borrowings Proceeds from issuance of common stock 4.5 .4 Repurchases of common stock (46.1) Dividends paid (51.4) (51.7) Other (.1) Net cash provided by financing activities 266.1 531.3 Effect of Exchange Rate Changes on Cash (.6) (.5) Net Increase (Decrease) in Cash and Cash Equivalents (113.0) (34.8) Cash and Cash Equivalents at Beginning of Period 229.1 207.9 Cash and Cash Equivalents at End of Period $116.1 $173.1 DEERE & COMPANY FINANCIAL SERVICES CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS - -------------------------------------------------------- Three Months Ended January 31 Millions of dollars (Unaudited) 2000 1999 Cash Flows from Operating Activities Net income $ 44.4 $ 43.4 Adjustments to reconcile net income to net cash provided by (used for) operating activities 108.1 81.2 Net cash provided by (used for) operating activities 152.5 124.6 Cash Flows from Investing Activities Collections of financing receivables 1,764.8 1,590.8 Proceeds from sales of financing receivables 71.3 102.2 Proceeds from maturities and sales of marketable securities 12.7 37.3 Proceeds from sales of equipment on operating leases 61.6 38.1 Cost of financing receivables acquired (2,007.4) (2,033.2) Purchases of marketable securities (19.4) (33.8) Purchases of property and equipment (2.6) (4.0) Cost of operating leases acquired (209.2) (125.2) Acquisitions of businesses, net of cash acquired (1.1) Other 67.2 68.3 Net cash provided by (used for) investing activities (262.1) (359.5) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 456.6 (19.5) Change in intercompany receivables/payables (153.8) (64.4) Proceeds from long-term borrowings 162.7 625.0 Principal payments on long-term borrowings (353.5) (297.5) Proceeds from issuance of common stock Repurchases of common stock Dividends paid (5.0) (5.0) Other Net cash provided by financing activities 107.0 238.6 Effect of Exchange Rate Changes on Cash .2 Net Increase (Decrease) in Cash and Cash Equivalents (2.4) 3.7 Cash and Cash Equivalents at Beginning of Period 183.8 241.5 Cash and Cash Equivalents at End of Period $181.4 $245.2 Page 12 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, construction equipment, commercial and consumer 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, insurance and health care operations. The insurance operations were sold during the fourth quarter of 1999. (2) Dividends declared and paid on a per share basis were as follows: Three Months Ended January 31 2000 1999 ---- ---- Dividends declared $.22 $.22 Dividends paid $.22 $.22 (3) The calculation of net income per share is based on the average number of shares outstanding during the three months ended January 31, 2000 and 1999 of 233.9 million and 231.7 million, respectively. The calculation of diluted net income per share recognizes primarily the dilutive effect of the assumed exercise of stock options. (4) 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 Ended January 31 2000 1999 ---- ---- Net income $37.7 $49.7 Other comprehensive income (loss): Change in cumulative translation adjustment 5.4 (9.1) Unrealized gain (loss) on marketable securities (4.9) 4.5 ----- ----- Comprehensive income $38.2 $45.1 ===== ===== Page 13 -----END PRIVACY-ENHANCED MESSAGE-----