-----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, DtiRyo2YT+5MtYSV2DYEemxstp7vvQ6WHXbMI7dQQa4MphKfQPXOE144qhbEkGlV Jd5xuQ5wzP26mPiEVXkjBg== /in/edgar/work/0000315189-00-500027/0000315189-00-500027.txt : 20001122 0000315189-00-500027.hdr.sgml : 20001122 ACCESSION NUMBER: 0000315189-00-500027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001121 ITEM INFORMATION: FILED AS OF DATE: 20001121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEERE & CO CENTRAL INDEX KEY: 0000315189 STANDARD INDUSTRIAL CLASSIFICATION: [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: 774250 BUSINESS ADDRESS: STREET 1: ONE JOHN DEERE PLACE CITY: MOLINE STATE: IL ZIP: 61265-8098 BUSINESS PHONE: 3097658000 MAIL ADDRESS: STREET 1: ONE JOHN DEERE PLACE CITY: MOLINE STATE: IL ZIP: 61265-8098 8-K 1 de8-k112100.txt DEERE 8-K 11-21-2000 - ------------------------------------------------------------- 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: November 21, 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: November 21, 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 Moline, IL 61265 (309) 765-5290 For Immediate Release - November 21, 2000 - ----------------------------------------- DEERE EARNINGS DOUBLE FOR YEAR; FURTHER IMPROVEMENT IN 2001 EXPECTED . Year's net income reaches $485.5 MM vs. $239.2 MM in 1999 . New products win positive response . Effort to reduce used goods successful . Some improvement seen in agricultural outlook MOLINE, Illinois -- Deere & Company today reported that its net income more than doubled for the year and showed a sharp improvement for the fourth quarter. Worldwide net income was $485.5 million, or $2.06 per share, for the year ended October 31, versus $239.2 million, or $1.02 per share, in fiscal 1999. Net income for the fourth quarter was $71.1 million, or $0.30 per share, compared with a net loss of $29.5 million, or $0.13 per share, for last year's fourth quarter. "It is gratifying that the company remained solidly profitable for the quarter and registered more than a two-fold increase in earnings for the year," said Robert W. Lane, chairman and chief executive officer. "In spite of weakness in our major markets, we improved profitability, saw an extremely positive customer response to new John Deere products, and brought down field inventories of used farm equipment. As a result, we have set the stage for a further improvement in our performance in the future." Worldwide net sales and revenues were $3.376 billion for fourth-quarter 2000 and $13.137 billion for the year, compared with $2.788 billion and $11.751 billion, respectively, last year. Net equipment sales increased by 25 percent for the quarter, to $2.842 billion, and by 15 percent, to $11.169 billion, for the year. Sales rose due to strong customer response to new products, an improved ability to produce equipment at a level equal to retail demand, and the inclusion of Timberjack sales. These positive factors were partially offset by the effect of weaker European currencies. Overseas net sales were up 20 percent for the quarter, primarily due to the Timberjack-sales inclusion, and 8 percent for the year. Excluding the impact of weaker foreign currencies, the overseas sales increases were 32 percent and 17 percent, respectively. Overall, the company's physical volume of sales rose 27 percent for the quarter and 18 percent for the year, in comparison with last year. Worldwide equipment operations had net income of $33.3 million for the quarter and $311.1 million for the year, compared with a net loss of $69.1 million and net income of $43.2 million in the comparable 1999 periods. The increases were primarily due to manufacturing efficiencies associated with higher sales and production volumes, in addition to lower pension and post-retirement health-care costs, and the impact of quality- and efficiency-improvement initiatives. Partially offsetting these factors were an anticipated increase in the cost of promotional programs for the sale of used farm equipment and higher expenses regarding the development of new products and growth initiatives. Last year's quarterly results included a $40 million after-tax charge for an early- retirement program. Page 5 Operating Profit Shows Significant Improvement - ---------------------------------------------- Excluding interest, taxes and certain other corporate expenses, worldwide equipment operating profit increased significantly, to $83 million for the quarter and $693 million for the year. This is in comparison with a $69 million operating loss for fourth-quarter 1999 and a $272 million operating profit for the full year. . Sales of the worldwide agricultural equipment division continued to show a major year-to-year improvement, rising by 37 percent for the quarter and by 15 percent for the year. At the same time, average assets declined by 11 percent. Operating profit increased to $68 million and $400 million for the quarterly and yearly periods, compared with operating losses of $129 million and $51 million, respectively, in 1999. Operating profit rose due to improved manufacturing efficiencies associated with higher sales and production volumes, as the division was able to better align production schedules with retail sales. In addition, the division benefited from positive customer response to its products, resulting in a further increase in market share for John Deere farm machinery. Also aiding results were lower pension and post-retirement health-care costs and the impact of initiatives aimed at quality and efficiency improvement. Selling and administrative expenses and research and development expenses were higher due to growth and other initiatives. These increases, however, were proportional to the year's rise in sales. During the fourth quarter, promotional expenses increased as part of a program that significantly reduced inventories of used equipment held by John Deere dealers in order to better position the company for increased sales volumes in the future. Last year's quarterly results were affected by the $64 million pretax cost of the previously mentioned early-retirement program. Overseas operations had lower profit for both the quarter and year due to the impact of weaker European currencies, higher sales- incentive costs and increased expenses for the development of new products and for growth initiatives. . The worldwide commercial and consumer equipment division had an $11 million operating loss for the quarter and operating profit of $159 million for the year, compared with operating profit of $62 million and $213 million for the comparable 1999 periods. Although retail demand for most products in this segment remained strong, sales and production volumes were down for the quarter due to weakness in handheld products and generators and because of planned dealer- inventory reductions. In addition, quarterly and annual results were negatively affected by higher expenses related to growth, new products, and other initiatives, higher sales- incentive costs, and by costs and inefficiencies associated with the handheld-product and generator operations. A stronger Japanese yen had an adverse effect on the year's results. Twelve-month sales rose 12 percent, reflecting market-share gains and favorable customer response to company products. . Operating profit of the worldwide construction equipment division was $40 million for the quarter and $191 million for the year, compared with $15 million and $149 million for the comparable 1999 periods. The increases were primarily due to higher sales and improved efficiencies, partially offset by higher growth expenditures. In addition, the quarter benefited from lower sales-incentive costs. The division benefited from positive customer response to its products, resulting in improved market share. Sales increased 44 percent for the quarter and 17 percent for the year due to the impact of Timberjack and an expanded product line. Last year's sales were adversely affected by implementation of the estimate-to- cash order-fulfillment initiative, which has reduced asset levels and cut product-delivery times. Current-year results were hurt by a reversal of sales and cost of sales related to company equipment held in inventory by dealers acquired by Nortrax, a recently established venture in which Deere has a minority interest. Page 6 . Net income of the credit operations was $37.3 million for the quarter and $161.5 million for the year, compared with $33.5 million and $174.9 million for the 1999 periods. Results for the current year were adversely affected by a reduced level of receivable sales, resulting in lower gains, and by higher operating expenses, partially offset by higher income from growth in the receivable and lease portfolio. Net income for the quarter benefited by $3.8 million due to a reduction of the reserve for uncollectible receivables, reflecting the credit performance of the portfolio. . The company's other businesses had operating losses of $10 million for the quarter and $39 million for the year, compared with operating losses of $19 million and $33 million for the respective periods last year. Results for both years were adversely affected by costs related to the development of new products, e-business initiatives, and by goodwill amortization of the special-technologies group. Health-care operations generated improved results for the year. Other-business results in 1999 included underwriting losses of the insurance operations sold in that year. Market Conditions & Outlook: Physical-Volume Forecast Higher; Ag Market Somewhat Stronger - ------------------------------------------------------------ Based on a favorable outlook for further growth in the company's equipment operations, Deere's worldwide physical volume of sales is currently forecast to increase by 28 percent for the first quarter of 2001, in comparison with the corresponding 2000 period, and by 11 percent for the full year. . Agricultural Equipment. Deere now expects North American industry-retail sales of farm machinery to be slightly higher next year. Lower-than-anticipated global production of grain and oilseeds has resulted in a modest price improvement for these commodities in recent weeks as well as a reduction in carryover stocks. At the same time, farmers remain in sound overall financial condition. In other areas, European industry-retail sales are expected to be down 5 percent next year, while retail sales in Latin America and Australia are forecast to be flat. Sales of John Deere farm equipment are expected to move higher next year due in large part to the continued success of newly introduced products and this year's reduction in used-goods inventories held by dealers. Partially offsetting these factors will be continued expenditures related to growth. . Commercial and Consumer Equipment. In a slowing economic environment, industry-retail sales for these products - which include lawn-care equipment and worksite and utility vehicles - -- are expected to be slightly lower in 2001 relative to this year. However, division sales and financial results are expected to improve on the strength of new products and recent steps to improve profitability. . Construction Equipment. Housing starts, though remaining high by historical standards, are expected to be lower in 2001 for the second year in a row. Lumber production in this environment is expected to be scaled back, but pulp production should continue to expand in light of global-economic growth and higher pulp prices. As a result of these factors, industry sales of construction equipment are expected to fall by 7 to 10 percent in 2001. Deere construction-equipment operations are expected to experience further growth next year due in large part to the success of new products and the full-year inclusion of Timberjack sales. These factors will be partially offset by further growth-related expenditures. . Credit Operations. Credit is expected to benefit next year from continued growth in its receivable portfolio both in North American and international markets. Page 7 "Deere is in excellent position to improve its financial and operating performance in 2001, and we are encouraged by the firming tone of farm-commodity prices," commented Lane. "In addition, we are pleased with the positive response of our customers to the company's many new innovative products, and believe that significant progress has been made in bringing down used-equipment inventories. At the same time, our initiatives aimed at growth and quality improvement remain well on track. We look forward to delivering improved results in the coming 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's net income was $31.7 million for the fourth quarter and $140.8 million for the year, compared with $29.2 million and $153.3 million, respectively, last year. The results for this year were adversely affected by higher operating expenses as well as a reduced level of receivable sales, which resulted in lower gains. Partially offsetting these factors was higher income from a larger receivable and lease portfolio. Net income for the quarter benefited by $3.8 million due to a reduction of the reserve for uncollectible receivables, reflecting the credit performance of the portfolio. Net receivables and leases financed by JDCC were $8.515 billion at October 31, 2000, compared with $7.147 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 $10.498 billion at October 31, 2000, compared with $9.586 billion at October 31, 1999. 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. Forward- looking statements relating to Deere & 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 success of the fall harvest and the prices realized by farmers for their crops and livestock especially affect retail sales of agricultural equipment in the winter, while the number of housing starts is especially important to sales of construction equipment. Sales of commercial and consumer equipment during the winter are affected by the amount and timing of snowfall. 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 8 FOURTH QUARTER AND 2000 PRESS RELEASE (millions of dollars and shares except per share amounts) Three Months Ended October 31 % 2000 1999 Change Net sales and revenues: Agricultural equipment net sales $1,605 $1,171 + 37 Commercial and consumer equipment net sales 636 690 - 8 Construction equipment net sales 581 403 + 44 Other net sales 20 18 + 11 Total net sales 2,842 2,282 + 25 Credit revenues 360 286 + 26 Other revenues 174 220 - 21 Total net sales and revenues* $3,376 $2,788 + 21 Operating profit (loss): Agricultural equipment $ 68 $ (129) Commercial and consumer equipment (11) 62 Construction equipment 40 15 +167 Credit 60 54 + 11 Other (10) (19) - 47 Total operating profit (loss)* 147 (17) Interest, corporate expenses and income taxes (76) (13) +485 Net income (loss) $ 71 $ (30) Per Share: Net income (loss) - basic $ .30 $ (.13) Net income (loss)- diluted $ .30 $ (.13) * Includes overseas equipment operations: Net sales $ 759 $ 631 + 20 Operating profit $ 11 $ 16 - 31 October 31 October 31 2000 1999 Equipment Operations: Trade accounts and notes receivable - net $ 3,169 $ 3,251 Inventories $ 1,553 $ 1,294 Financial Services: Financing receivables and leases financed - net $10,099 $ 8,276 Financing receivables and leases administered - net $12,223 $10,992 Average shares outstanding 234.3 232.9 Twelve Months Ended October 31 % 2000 1999 Change Net sales and revenues: Agricultural equipment net sales $ 5,934 $ 5,138 + 15 Commercial and consumer equipment net sales 2,966 2,648 + 12 Construction equipment net sales 2,203 1,880 + 17 Other net sales 66 35 + 89 Total net sales 11,169 9,701 + 15 Credit revenues 1,323 1,136 + 16 Other revenues 645 914 - 29 Total net sales and revenues* $13,137 $11,751 + 12 Operating profit (loss): Agricultural equipment $ 400 $ (51) Commercial and consumer equipment 159 213 - 25 Construction equipment 191 149 + 28 Credit 254 274 - 7 Other (39) (33) + 18 Total operating profit* 965 552 + 75 Interest, corporate expenses and income taxes (479) (313) + 53 Net income $ 486 $ 239 +103 Per Share: Net income - basic $ 2.07 $ 1.03 +101 Net income - diluted $ 2.06 $ 1.02 +102 * Includes overseas equipment operations: Net sales $ 2,897 $ 2,678 + 8 Operating profit $ 164 $ 224 - 27 Page 9 DEERE & COMPANY CONSOLIDATED STATEMENT OF CONSOLIDATED INCOME (Deere & Company and THREE MONTHS ENDED OCTOBER 31 Consolidated Subsidiaries) (In millions of dollars except per Three Months Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment $2,842.3 $2,281.5 Finance and interest income 364.0 290.4 Insurance and health care premiums 127.7 165.3 Investment income 3.0 12.5 Other income 38.7 38.7 Total 3,375.7 2,788.4 Costs and Expenses Cost of goods sold 2,290.5 1,985.8 Research and development expenses 168.8 134.7 Selling, administrative and general expenses 441.8 380.8 Interest expense 187.6 140.8 Insurance and health care claims and benefits 100.6 135.6 Other operating expenses 91.3 77.5 Total 3,280.6 2,855.2 Income (Loss) of Consolidated Group Before Income Taxes 95.1 (66.8) Provision (credit) for income taxes 22.0 (35.4) Income (Loss) of Consolidated Group 73.1 (31.4) Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .1 (.5) Other (2.1) 2.4 Total (2.0) 1.9 Net Income (Loss) $ 71.1 $ (29.5) Per Share: Net income (loss) - basic $ .30 $ (.13) Net income (loss) - diluted $ .30 $ (.13) DEERE & COMPANY EQUIPMENT OPERATIONS STATEMENT OF CONSOLIDATED INCOME (Deere & Company with THREE MONTHS ENDED OCTOBER 31 Financial Services on the Equity Basis) (In millions of dollars except per Three Months Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment $2,842.3 $2,281.5 Finance and interest income 30.3 27.3 Insurance and health care premiums Investment income 1.1 Other income 28.2 26.8 Total 2,900.8 2,336.7 Costs and Expenses Cost of goods sold 2,294.4 1,988.7 Research and development expenses 168.8 134.7 Selling, administrative and general expenses 338.2 273.5 Interest expense 51.0 41.2 Insurance and health care claims and benefits Other operating expenses 17.5 17.4 Total 2,869.9 2,455.5 Income (Loss) of Consolidated Group Before Income Taxes 30.9 (118.8) Provision (credit) for income taxes (2.4) (49.7) Income (Loss) of Consolidated Group 33.3 (69.1) Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit 37.3 33.5 Other .5 6.1 Total 37.8 39.6 Net Income (Loss) $ 71.1 $ (29.5) DEERE & COMPANY FINANCIAL SERVICES STATEMENT OF CONSOLIDATED INCOME THREE MONTHS ENDED OCTOBER 31 (In millions of dollars except per Three Months Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment Finance and interest income $ 342.1 $ 266.9 Insurance and health care premiums 132.5 169.7 Investment income 3.0 11.5 Other income 19.8 18.9 Total 497.4 467.0 Costs and Expenses Cost of goods sold Research and development expenses Selling, administrative and general expenses 104.4 107.3 Interest expense 145.0 103.5 Insurance and health care claims and benefits 100.6 136.9 Other operating expenses 83.2 67.3 Total 433.2 415.0 Income (Loss) of Consolidated Group Before Income Taxes 64.2 52.0 Provision (credit) for income taxes 24.4 14.3 Income (Loss) of Consolidated Group 39.8 37.7 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .1 (.5) Other Total .1 (.5) Net Income (Loss) $ 39.9 $ 37.2 Page 10 DEERE & COMPANY CONSOLIDATED STATEMENT OF CONSOLIDATED INCOME (Deere & Company and YEAR ENDED OCTOBER 31 Consolidated Subsidiaries) (In millions of dollars except per Year Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment $11,168.6 $ 9,701.2 Finance and interest income 1,321.3 1,104.4 Insurance and health care premiums 473.7 716.1 Investment income 18.6 61.4 Other income 154.6 167.8 Total 13,136.8 11,750.9 Costs and Expenses Cost of goods sold 8,936.1 8,177.5 Research and development expenses 542.1 458.4 Selling, administrative and general expenses 1,504.9 1,362.1 Interest expense 676.5 556.6 Insurance and health care claims and benefits 380.5 594.9 Other operating expenses 319.2 236.3 Total 12,359.3 11,385.8 Income of Consolidated Group Before Income Taxes 777.5 365.1 Provision for income taxes 293.8 134.7 Income of Consolidated Group 483.7 230.4 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .6 (.3) Other 1.2 9.1 Total 1.8 8.8 Net Income $ 485.5 $ 239.2 Per Share: Net income - basic $ 2.07 $ 1.03 Net income - diluted $ 2.06 $ 1.02 DEERE & COMPANY EQUIPMENT OPERATIONS STATEMENT OF CONSOLIDATED INCOME (Deere & Company with YEAR ENDED OCTOBER 31 Financial Services on the Equity Basis) (In millions of dollars except per Year Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment $11,168.6 $ 9,701.2 Finance and interest income 99.1 92.5 Insurance and health care premiums Investment income 7.7 1.1 Other income 101.5 86.1 Total 11,376.9 9,880.9 Costs and Expenses Cost of goods sold 8,952.2 8,193.1 Research and development expenses 542.1 458.4 Selling, administrative and general expenses 1,149.4 953.6 Interest expense 183.1 161.9 Insurance and health care claims and benefits Other operating expenses 44.3 28.6 Total 10,871.1 9,795.6 Income of Consolidated Group Before Income Taxes 505.8 85.3 Provision for income taxes 194.7 42.1 Income of Consolidated Group 311.1 43.2 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit 161.5 174.9 Other 12.9 21.1 Total 174.4 196.0 Net Income $ 485.5 $ 239.2 DEERE & COMPANY FINANCIAL SERVICES STATEMENT OF CONSOLIDATED INCOME YEAR ENDED OCTOBER 31 (In millions of dollars except per Year Ended share amounts) October 31 2000 1999 Net Sales and Revenues Net sales of equipment Finance and interest income $1,245.4 $1,027.1 Insurance and health care premiums 493.0 741.9 Investment income 10.9 60.3 Other income 83.9 110.2 Total 1,833.2 1,939.5 Costs and Expenses Cost of goods sold Research and development expenses Selling, administrative and general expenses 357.9 411.4 Interest expense 516.5 409.9 Insurance and health care claims and benefits 380.5 602.8 Other operating expenses 306.6 235.6 Total 1,561.5 1,659.7 Income of Consolidated Group Before Income Taxes 271.7 279.8 Provision for income taxes 99.1 92.6 Income of Consolidated Group 172.6 187.2 Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates Credit .6 (.3) Other .1 Total .6 (.2) Net Income $ 173.2 $ 187.0 Page 11 DEERE & COMPANY CONSOLIDATED CONDENSED CONSOLIDATED (Deere & Company and BALANCE SHEET Consolidated Subs.) (In millions of dollars) October 31 October 31 2000 1999 Assets Cash and short-term investments $ 291.7 $ 295.5 Cash deposited with unconsolidated subsidiaries Cash and cash equivalents 291.7 295.5 Marketable securities 127.4 315.5 Receivables from unconsolidated subsidiaries and affiliates 230.9 30.2 Trade accounts and notes receivable - net 3,169.2 3,251.1 Financing receivables - net 8,275.7 6,742.6 Other receivables 395.3 273.9 Equipment on operating leases - net 1,954.4 1,654.7 Inventories 1,552.9 1,294.3 Property and equipment - net 1,912.4 1,782.3 Investments in unconsolidated subsidiaries and affiliates 190.7 151.5 Intangible assets - net 652.2 295.1 Prepaid pension costs 635.3 619.9 Other assets 256.8 185.5 Deferred income taxes 740.4 598.1 Deferred charges 84.1 88.0 Total $20,469.4 $17,578.2 Liabilities and Stockholders' Equity Short-term borrowings $ 5,758.5 $ 4,488.2 Payables to unconsolidated subsidiaries and affiliates 32.7 15.5 Accounts payable and accrued expenses 2,976.4 2,432.8 Insurance and health care claims and reserves 63.4 55.4 Accrued taxes 57.5 144.8 Deferred income taxes 74.6 63.0 Long-term borrowings 4,764.3 3,806.2 Retirement benefit accruals and other liabilities 2,440.1 2,478.0 Total liabilities 16,167.5 13,483.9 Stockholders' equity 4,301.9 4,094.3 Total $20,469.4 $17,578.2 DEERE & COMPANY EQUIPMENT OPERATIONS CONDENSED CONSOLIDATED (Deere & Company with Financial BALANCE SHEET Services on the Equity Basis) (In millions of dollars) Oct 31 Oct 31 2000 1999 Assets Cash and short-term investments $ 91.4 $ 111.7 Cash deposited with unconsolidated subsidiaries 548.3 117.4 Cash and cash equivalents 639.7 229.1 Marketable securities 205.3 Receivables from unconsolidated subsidiaries and affiliates 408.4 266.0 Trade accounts and notes receivable - net 3,169.2 3,251.1 Financing receivables - net 125.0 118.4 Other receivables 266.4 129.4 Equipment on operating leases - net 5.9 2.6 Inventories 1,552.9 1,294.3 Property and equipment - net 1,864.6 1,738.8 Investments in unconsolidated subsidiaries and affiliates 1,561.8 1,362.8 Intangible assets - net 651.2 294.8 Prepaid pension costs 635.3 619.9 Other assets 117.5 95.7 Deferred income taxes 736.4 592.9 Deferred charges 78.4 80.8 Total $11,812.7 $10,281.9 Liabilities and Stockholders' Equity Short-term borrowings $ 927.5 $ 642.2 Payables to unconsolidated subsidiaries and affiliates 41.4 15.5 Accounts payable and accrued expenses 2,360.8 1,891.9 Insurance and health care claims and reserves Accrued taxes 45.5 138.1 Deferred income taxes 2.5 7.2 Long-term borrowings 1,717.7 1,036.1 Retirement benefit accruals and other liabilities 2,415.4 2,456.6 Total liabilities 7,510.8 6,187.6 Stockholders' equity 4,301.9 4,094.3 Total $11,812.7 $10,281.9 DEERE & COMPANY FINANCIAL SERVICES CONDENSED CONSOLIDATED BALANCE SHEET (In millions of dollars) Oct 31 Oct 31 2000 1999 Assets Cash and short-term investments $ 200.3 $ 183.8 Cash deposited with unconsolidated subsidiaries Cash and cash equivalents 200.3 183.8 Marketable securities 127.4 110.1 Receivables from unconsolidated subsidiaries and affiliates 140.0 4.8 Trade accounts and notes receivables - net Financing receivables - net 8,150.7 6,624.2 Other receivables 128.9 144.5 Equipment on operating leases - net 1,948.5 1,652.2 Inventories Property and equipment - net 47.7 43.5 Investments in unconsolidated subsidiaries and affiliates 10.1 9.9 Intangible assets - net 1.1 .3 Prepaid pension costs Other assets 139.3 89.8 Deferred income taxes 3.9 5.2 Deferred charges 5.7 7.2 Total $10,903.6 $8,875.5 Liabilities and Stockholders' Equity Short-term borrowings $ 4,831.1 $3,846.0 Payables to unconsolidated subsidiaries and affiliates 856.9 358.1 Accounts payable and accrued expenses 615.6 540.8 Insurance and health care claims and reserves 63.4 55.4 Accrued taxes 11.9 6.8 Deferred income taxes 72.1 55.8 Long-term borrowings 3,046.7 2,770.1 Retirement benefit accruals and other liabilities 24.8 21.3 Total liabilities 9,522.5 7,654.3 Stockholders' equity 1,381.1 1,221.2 Total $10,903.6 $8,875.5 Page 12 DEERE & COMPANY CONSOLIDATED STATEMENT OF CONSOLIDATED (Deere & Company and CASH FLOWS Consolidated Subs.) YEAR ENDED OCTOBER 31 Year Ended October 31 (In millions of dollars) 2000 1999 Cash Flows from Operating Activities Net income $ 485.5 $ 239.2 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful receivables 75.0 73.5 Provision for depreciation and amortization 647.9 542.4 Undistributed earnings of unconsolidated subsidiaries and affiliates (1.2) (5.8) Provision (credit) for deferred income taxes (132.9) (162.4) Changes in assets and liabilities: Receivables (53.8) 802.3 Inventories (184.0) 50.7 Accounts payable and accrued expenses 540.0 (170.8) Other (296.5) 65.4 Net cash provided by operating activities 1,080.0 1,434.5 Cash Flows from Investing Activities Collections of financing receivables 6,655.1 6,017.1 Proceeds from sales of financing receivables 978.3 2,481.6 Proceeds from maturities and sales of marketable securities 247.8 115.4 Proceeds from sales of equipment on operating leases 334.6 191.3 Proceeds from sale of business 179.1 Cost of financing receivables acquired (9,126.5) (8,186.2) Purchases of marketable securities (61.9) (92.9) Purchases of property and equipment (426.7) (315.5) Cost of operating leases acquired (939.9) (833.5) Acquisitions of businesses, net of cash acquired (643.3) (215.8) Increase in receivables with unconsolidated affiliates (135.2) (4.8) Other 7.4 12.4 Net cash used for investing activities (3,110.3) (651.8) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 1,785.8 (1,650.7) Change in intercompany receivables/payables Proceeds from long-term borrowings 2,814.0 2,902.1 Principle payments on long-term borrowings (2,377.4) (1,796.2) Proceeds from issuance of common stock 15.9 4.2 Repurchases of common stock (.6) (49.0) Dividends paid (206.0) (205.4) Other (1.3) (.1) Net cash provided by (used for) financing activities 2,030.4 (795.1) Effect of Exchange Rate Changes on Cash (3.9) (1.8) Net Increase (Decrease) in Cash and Cash Equivalents (3.8) (14.2) Cash and Cash Equivalents at Beginning of Period 295.5 309.7 Cash and Cash Equivalents at End of Period $ 291.7 $ 295.5 DEERE & COMPANY EQUIPMENT OPERATIONS STATEMENT OF CONSOLIDATED (Deere & Company with CASH FLOWS Financial Services on the YEAR ENDED OCTOBER 31 Equity Basis) Year Ended October 31 (In millions of dollars) 2000 1999 Cash Flows from Operating Activities Net income $ 485.5 $ 239.2 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful receivables 11.2 5.6 Provision for depreciation and amortization 359.0 326.4 Undistributed earnings of unconsolidated subsidiaries and affiliates (147.0) (117.5) Provision (credit) for deferred income taxes (152.3) (203.2) Changes in assets and liabilities: Receivables (70.6) 802.4 Inventories (184.0) 50.7 Accounts payable and accrued expenses 460.8 (172.1) Other (295.1) 143.6 Net cash provided by operating activities 467.5 1,075.1 Cash Flows from Investing Activities Collections of financing receivables 13.6 23.0 Proceeds from sales of financing receivables 30.6 Proceeds from maturities and sales of marketable securities 202.8 Proceeds from sales of equipment on operating leases 1.4 Proceeds from sale of business 179.1 Cost of financing receivables acquired (20.1) (50.8) Purchases of marketable securities Purchases of property and equipment (414.1) (304.4) Cost of operating leases acquired (4.7) (2.7) Acquisitions of businesses, net of cash acquired (641.8) (151.9) Increase in receivables with unconsolidated affiliates Other (5.1) 19.7 Net cash used for investing activities (837.4) (288.0) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 459.7 (961.9) Change in intercompany receivables/payables (26.7) (32.5) Proceeds from long-term borrowings 752.1 499.8 Principal payments on long-term borrowings (208.7) (19.1) Proceeds from issuance of common stock 15.9 4.2 Repurchases of common stock (.6) (49.0) Dividends paid (206.0) (205.4) Other (1.3) (.2) Net cash provided by (used for) financing activities 784.4 (764.1) Effect of Exchange Rate Changes on Cash (3.9) (1.8) Net Increase (Decrease) in Cash and Cash Equivalents 410.6 21.2 Cash and Cash Equivalents at Beginning of Period 229.1 207.9 Cash and Cash Equivalents at End of Period $ 639.7 $ 229.1 DEERE & COMPANY FINANCIAL SERVICES STATEMENT OF CONSOLIDATED CASH FLOWS YEAR ENDED OCTOBER 31 October 31 (In millions of dollars) 2000 1999 Cash Flows from Operating Activities Net income $ 173.2 $ 187.0 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful receivables 63.8 67.9 Provision for depreciation and amortization 318.5 245.0 Undistributed earnings of unconsolidated subsidiaries and affiliates (.6) (.4) Provision (credit) for deferred income taxes 19.5 40.8 Changes in assets and liabilities: Receivables 16.8 Inventories Accounts payable and accrued expenses 79.2 1.3 Other (31.1) (107.1) Net cash provided by operating activities 639.3 434.5 Cash Flows from Investing Activities Collections of financing receivables 6,641.5 5,994.1 Proceeds from sales of financing receivables 978.3 2,481.6 Proceeds from maturities and sales of marketable securities 45.0 115.4 Proceeds from sales of equipment on operating leases 333.2 191.3 Proceeds from sale of business Cost of financing receivables acquired (9,137.0) (8,135.4) Purchases of marketable securities (61.9) (92.9) Purchases of property and equipment (12.6) (11.1) Cost of operating leases acquired (935.2) (830.8) Acquisitions of businesses, net of cash acquired (1.5) (63.9) Increase in receivables with unconsolidated affiliates (135.2) (4.8) Other (4.5) (7.4) Net cash used for investing activities (2,289.9) (363.9) Cash Flows from Financing Activities Increase (decrease) in short-term borrowings 1,326.1 (688.8) Change in intercompany receivables/payables 457.6 10.2 Proceeds from long-term borrowings 2,061.8 2,402.3 Principal payments on long-term borrowings (2,168.7) (1,777.0) Proceeds from issuance of common stock Repurchases of common stock Dividends paid (26.8) (75.0) Other 17.1 Net cash provided by (used for) financing activities 1,667.1 (128.3) Effect of Exchange Rate Changes on Cash Net Increase (Decrease) in Cash and Cash Equivalents 16.5 (57.7) Cash and Cash Equivalents at Beginning of Period 183.8 241.5 Cash and Cash Equivalents at End of Period $ 200.3 $ 183.8 Page 13 -----END PRIVACY-ENHANCED MESSAGE-----