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DEERE & COMPANY REPORTS RESULTS

 MOLINE, Ill., May 25 /PRNewswire/ -- Deere & Company (NYSE: DE) today reported net income for the second quarter of the 1993 fiscal year of $110.2 million or $1.44 per share before non-recurring restructuring charges, compared with last year's second quarter income of $44.0 millo?n or $.58 per share. The company recorded restructuring charges of $80.0 million ($107.2 million before income taxes) during the quarter, which resulted in second quarter 1993 net income of $30.2 million or $.39 per share. Worldwide equipment sales increased 15 percent for the quarter. The second quarter of Deere & Company's fiscal year ended April 30.
 The restructuring charges are largely in response to the continuing long-term decline in agricultural equipment volumes in Western Europe. These charges consist mainly of the cost of employment reductions resulting from the downsizing and rationalizing of the company's European operations. These actions, which will be implemented during 1993 and the next few years, should result in significantly improved European operating results.
 Deere & Company Chairman and Chief Executive Officer Hans W. Becherer said, "Excluding the restructuring charges, results for the quarter were significantly better than last year as a result of substantially improved North American operations. Sales and production volumes were higher this year in response to increased retail demand, and price realization improved in all of our North American businesses as sales incentive cost levels decreased significantly. Additionally, productivity continued to improve, and our financial services subsidiaries' performance remained strong."
 Total worldwide production tonnage was up seven percent compared with the so?nd quarter of 1992, and is now projected to be eight percent higher for the year. Worldwide sales and revenues increased 13 percent to $2.105 billion in the second quarter of 1993 from $1.859 billion in the same quarter last year. Net sales and revenues include net sales of agricultural, industrial and lawn and grounds care equipment to dealers, which were $1.788 billion in the quarter, an increase of 15 percent over second quarter 1992 sales of $1.555 billion. Net sales and revenues also include revenues of the company's credit, insurance and health care operations, which increased 7 percent to $295 million in the second quarter compared with $276 million in the same quarter last year.
 Excluding the restructuring charges, worldwide net income for the first six months of 1993 totaled $82.6 million or $1.08 per share compared with net income of $24.1 million or $.32 per share in the first half of 1992. After the restructuring charge, the company's net income was $2.6 million or $.03 per share for the initial six months of 1993. Operating results for the first half of 1993 benefited from the improved second quarter performance which more than offset the company's first quarter loss. First quarter results were depressed by extremely low production and related factory shutdowns which, however, facilitated a substantial reduction in dealer receivables.
 Worldwide production tonnage was three percent higher during the first six months of 1993. Worldwide net sales and revenues were $3.529 billion for the initial six months of 1993, a 7 percent increase over the $3.311 billion in last year's first half. Net sales of equipment increased 8 percent during the first half of 1993 to $2.903 billion from $2.699 billion during the same period last year. The company's financial services revenues increased 4 percent to $576 million during the first two quarters this year compared with $554 million in the first half of 1992.
 "Retail sales of John Deere agricultural equipment in North America during the second quarter and first six months of 1993 were significantly higher compared with the same periods last year," Becherer said. "Our large tractor retail sales were substantially higher than last year, indicative of the excellent customer reaction to our new models. North American retail sales of our lawn and grounds care equipment increased slightly in the quarter and were up strongly for the first half. North American retail demand for John Deere industrial equipment was somewhat lower for the quarter but modestly higher for the first six months of 1993 compared with the like periods of 1992.
 "Overseas retail demand for agricultural equipment remains relatively weak," Becherer said. "However, retail sales of John Deere agricultural equipment during the first six months of 1993 compared favorably with the same period last year, reflecting strong demand for our new tractors."
 Excluding the restructuring charges, the company's worldwide equipment operations, which exclude the financial services subsidiaries, had net income of $ 68.8 million for the second quarter and broke even for the first half of 1993, both of which reflect substantial improvement over 1992 results. Higher sales and production volumes, improved price realization, lower employment levels and enhanced efficiencies contributed to the improvements. After the restructuring charges, these operations had a net loss of $11.2 million for the quarter this year compared with net income of $6.0 million in the same period of 1992, and incurred a net loss of $80.1 million for the first half of this year compared with a net loss of $40.5 million in the initial six months of 1992.
 Net income in the second quarter of 1993 and 1992 benefited by $6.6 million and $14.9 million after income taxes from the expected reduction of inventories valued on a last-in, first-out (LIFO) basis. Results in the first six months of 1993 and 1992 reflect LIFO inventory benefits of $15.3 million and $22.1 million, respectively.
 Net income of the company's credit business totaled $29.2 million in the second quarter of 1993 compared with $25.8 million in last year's second quarter. Year to date net income of these subsidiaries was $60.0 million in 1993 compared with $50.1 million during the first two quarters of 1992.
 Net income from insurance and health care operations was $10.7 million in the second quarter of 1993 compared with $10.9 million last year. Net income for the first six months of 1993 totaled $21.0 million compared with $12.2 million for the same period last year. Year to date insurance results reflect improved underwriting income compared with the same period last year, which had high loss experience and corresponding increases in loss reserves.
 Operating profit of the company's North American agricultural equipment division was significantly higher in the second quarter of 1993 and also higher in the first half compared with the same periods last year. The North American industrial equipment business generated an operating profit in the second quarter of 1993 compared with an operating loss in last year's second quarter, and incurred a much lower operating loss in the first half of 1993 compared with last year. The North American lawn and grounds care equipment division generated substantially higher operating profit compared with the second
quarter and initial six months of 1992. Excluding the restructuring charge, the overseas equipment operations had a small operating profit in the second quarter and an operating loss for the first six months of 1993 compared with small operating profits in the same periods last year. Low volumes, higher cost levels, new product start-up expenses and changes in currency relationships
continue to adversely affect the company's overseas performance. Operating profit is defined as income before interest expense, income taxes and certain other expenses.
 "North American agricultural equipment retail sales continue to be very strong," Becherer said. "However, inclement weather conditions in North America have delayed spring planting in many areas. An expanding economy, increases in housing starts and higher public construction expenditures are expected to provide a positive environment for future sales of our lawn and grounds care and industrial equipment. Overseas retail sales of our lawn and grounds care equipment are also expected to improve in 1993.
 "Although reception of our new tractor line has been positive, industry retail sales of agricultural equipment in Europe are expected to continue the downward trend of recent years as European agriculture goes through a period of fundamental change," Becherer said. "As a result, our overseas margins continue under considerable pressure.
 "In response to strong retail demand, we have increased our North American agricultural equipment production schedules," Becherer said. ``Fiscal year 1993 worldwide production tonnage of all products is now scheduled to be about eight percent higher than actual 1992 output, with worldwide agricultural equipment schedules now approximately five percent higher than last year. Industrial equipment and lawn and grounds care equipment schedules remain at levels significantly higher than in 1992. Total production tonnage during the last half of 1993 is now scheduled to be about 13 percent higher than in the same period last year. These production levels are still expected to facilitate reductions in dealer and company inventories for the year.
 "We are guardedly optimistic about prospects for the remainder of 1993," Becherer said. "Our new products continue to be extremely well accepted and our competitive position worldwide remains very strong. As volumes have increased, our operating margins are improving, reflecting the benefits from our ongoing efforts to improve quality, reduce costs and enhance productivity."
 The following information is disclosed on behalf of the company's United States credit subsidiary, John Deere Capital Corp., in connection with the disclosure requirements of programs providing for the issuance of debt securities:
 John Deere Capital Corp.'s net income was $26.9 million in the second quarter of 1993 compared with $23.8 million in the same period last year. For the first six months of 1993, net income was $54.3 million, compared with $44.4 million in the first half of 1992. Results in 1993 have benefited from higher margins earned on receivables and leases financed and lower provisions for credit losses.
 Revenues were approximately the same in the second quarter and down slightly during the first six months of 1993 compared with the same periods last year. Revenues have been affected by the lower level of interest rates and correspondingly lower finance charges earned by the company compared with the same periods last year. The decrease in revenues from lower finance charges this year was essentially offset by securitization and servicing income from retail notes previously sold. Additionally, borrowing costs have also been lower this year. Interest expense was down 8 percent in the second quarter and 14 percent for the first half of 1993. The average receivable and lease portfolio financed was approximately two percent lower in the second quarter and the first six months of this year.
 Total receivable and lease acquisitions by the company increased 11 percent this year compared with acquisitions in the first six months of 1992, as higher acquisitions of John Deere retail notes and leases plus a higher volume of revolving charge accounts and wholesale receivables more than offset lower non-Deere note acquisitions. Net credit receivables and leases administered, which include receivables previously securitized and sold, amounted to $4.506 billion at April 30, 1993 compared with $4.334 billion at April 30, 1992. Net credit receivables and leases financed by John Deere Capital Corp. were $3.461 billion at April 30, 1993 compared with $4.014 billion one year ago. The decline in the receivable and lease portfolio financed resulted mainly from the sale of retail notes. In the second quarter of 1993 and the fourth quarter of 1992, net proceeds of $560 million and $455 million, respectively, were received from the sale of securitized retail notes in the public market.
 DEERE & COMPANY
 SECOND QUARTER 1993 PRESS RELEASE
 Net and revenues: (millions of dollars)
 THREE MONTHS ENDED SIX MONTHS ENDED
 April 30 April 30
 (Pct.) (Pct.)
 1993 1992 Change 1993 1992
 Change
 Net Sales:
 Agricultural equipment $1,117 $1,031 +8 $1,806 $1,808
 Industrial equipment 339 263 +29 570 466 +22
 Lawn and grounds care
 equipment 332 261 +27 527 425 +24
 Total net sales 1,788 1,555 +15 2,903 2,699 +8
 Financial Services
 revenues 295 276 +7 576 554 +4
 Other revenues 22 28 -21 50 58 -14
 Total net sales
 and revenues $2,105 $1,859 +13 $3,529 $3,311 +7
 United States and Canada:
 Equipment net sales $1,340 $1,119 +20 $2,169 $1,961 +11
 Financial Services
 revenues 295 276 +7 576 554 +4
 Total 1,635 1,395 +17 2,745 2,515 +9
 Overseas net sales 448 436 +3 734 738 -1
 Other revenues 22 28 -21 50 58 -14
 Total net sales
 and revenues $2,105 $1,859 +13 $3,529 $3,311 +7
 Selected balance sheet data:
 (millions of dollars)
 April 30 October 31 April 30
 1993 1992 1992
 Equipment Operations:
 Dealer accounts and notes
 receivable - net $3,123 $2,946 $3,291
 Inventories $ 729 $ 525 $ 746
 Financial Services:
 Credit receivables - net $3,712 $4,315 $4,289
 Insurance and health care
 companies' assets $1,291 $1,266 $1,213
 Actual Shares Outstanding
 (end of period) 76,457,247 76,320,652 76,233,484
 -0- 5/25/93
 /CONTACT: Robert J. Combs of Deere & Company, 309-765-5014/
 (DE)


CO: Deere & Company ST: Illinois IN: MAC SU: ERN

PS -- NY032 -- 2061 05/25/93 10:01 EDT
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Date:May 25, 1993
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