Deere & Company, usually known by its brand name John Deere (NYSE: DE), is an American corporation based in Moline, Illinois, and the leading manufacturer of agricultural machinery in the world. In 2010, it was listed as 107th in the Fortune 500 ranking. Deere and Company agricultural products, usually sold under the John Deere name, include tractors, combine harvesters, balers, planters/seeders, ATVs and forestry equipment. The company is also a leading supplier of construction equipment, as well as equipment used in lawn, grounds and turf care, such as ride-on lawn mowers, string trimmers, chainsaws, snowthrowers and for a short period, snowmobiles.
The company's slogan is "Nothing runs like a Deere" and has a picture of a deer as a logo, a word play pun on "nothing runs like a deer."
Additionally, John Deere manufactures engines used in heavy equipment and provides financial services and other related activities that support the core businesses.
The company was founded in 1837 by John Deere, who developed and manufactured the first commercially successful cast-steel plow.
Deere & Company, together with its subsidiaries (John Deere), incorporated in 1958, operates in three business segments: agriculture and turf, construction and forestry and credit. The agriculture and turf segment manufactures and distributes a line of farm and turf equipment and related service parts including large, medium and utility tractors; loaders; combines, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders; tillage, seeding and application equipment. The construction and forestry segment manufactures, distributes to dealers and sells at retail a range of machines and service parts used in construction, earthmoving, material handling and timber harvesting. The credit segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment.
Agriculture and Turf
The John Deere agriculture and turf segment manufactures and distributes a full line of agricultural and turf equipment and related service parts. Its equipment operations are consolidated into five product platforms: crop harvesting (combines, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders); turf and utility (utility vehicles, riding lawn equipment, walk behind mowers, commercial mowing equipment, golf course equipment, implements for mowing, tilling, snow and debris handling, aerating and many other residential, commercial, golf and sports turf care applications, and other outdoor power products); hay and forage (self-propelled forage harvesters and attachments, balers and mowers); crop care (tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery), and tractors (loaders and large, medium and utility tractors). John Deere also purchases certain products from other manufacturers for resale. Additionally, the segment offers ancillary products and services supporting its agricultural and turf equipment customers. John Deere Landscapes, a unit of the segment, distributes irrigation equipment, nursery products and landscape supplies, including seed, fertilizer and hardscape materials, primarily to landscape service professionals. John Deere Water, also a unit of the agriculture and turf segment, manufactures and distributes precision agricultural irrigation equipment and supplies.
The segment also provides integrated agricultural business and equipment management systems. John Deere has developed a comprehensive agricultural management systems approach using advanced communications, data collection and global satellite positioning technologies to enable farmers to better control input costs and yields, improve soil conservation and minimize chemical use and to gather information. In addition to the John Deere brand, the agriculture and turf segment manufactures and sells a variety of equipment attachments under the Frontier brand name, walk-behind mowers and scarifiers in Europe under the SABO brand name, and tractors in China under the Benye brand name. John Deere manufactures its agricultural and turf equipment for sale primarily through independent retail dealer networks, and also builds products for sale by mass retailers, including The Home Depot and Lowe’s.
Construction and Forestry
John Deere construction, earthmoving, material handling and forestry equipment includes a broad range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape loaders, skid-steer loaders, log skidders, log feller bunchers, log loaders, log forwarders, log harvesters and a variety of attachments. The segment’s forestry machines are distributed under the John Deere brand name and forestry attachments are distributed under the John Deere and Waratah brand names. In addition to the equipment manufactured by the construction and forestry segment, John Deere purchases certain products from other manufacturers for resale. The segment also provides comprehensive fleet management telematics solutions.
John Deere and Hitachi Construction Machinery Co. (Hitachi) have a joint venture for the manufacture of hydraulic excavators and track log loaders in the United States and Canada. John Deere distributes Hitachi brands of construction and mining equipment in North, Central and South America. John Deere also has supply agreements with Hitachi under which a range of construction, earthmoving, material handling and forestry products manufactured by John Deere in the United States Finland and New Zealand are distributed by Hitachi in certain Asian markets. John Deere also owns Nortrax, Inc. and Nortrax Canada Inc. (collectively called Nortrax). Nortrax is an authorized John Deere dealer for construction, earthmoving, material handling and forestry equipment in a variety of markets in the United States and Canada. John Deere also owns retail forestry sales operations in Australia, Brazil, Finland, Ireland, New Zealand, Norway, Russia, Sweden and the United Kingdom.
Credit Operations
The Company’s credit segment (collectively referred to as the Credit Companies) primarily provide and administer financing for retail purchases from John Deere dealers of new equipment manufactured by the Company’s agriculture and turf and construction and forestry divisions and used equipment taken in trade for this equipment. In the United States certain subsidiaries included in the credit segment also offer crop risk mitigation products. The Company and John Deere Construction & Forestry Company are referred to as the sales companies. John Deere Capital Corporation (Capital Corporation), a United States credit subsidiary, generally purchases retail installment sales and loan contracts (retail notes) from the sales companies. These retail notes are acquired by the sales companies through John Deere retail dealers in the United States. John Deere Credit Inc., a Canadian credit subsidiary, purchases and finances retail notes acquired by John Deere Limited, the Company’s Canadian sales branch. The terms of retail notes and the basis on which the Credit Companies acquire retail notes from the sales companies are governed by agreements with the sales companies.
The Credit Companies also finance and service revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). Further, the Credit Companies finance and service operating loans, in most cases offered through and acquired from farm input providers or through direct relationships with agricultural producers or agribusinesses (operating loans). Additionally, the Credit Companies provide wholesale financing for inventories of John Deere agriculture and turf equipment and construction and forestry equipment owned by dealers of those products (wholesale notes). The various financing options offered by the Credit Companies are designed to enhance sales of John Deere products and generate financing income for the Credit Companies.
The Credit Companies offer retail leases to equipment users in the United States. A small number of leases are executed with units of local government. Leases are usually written for periods of 2 to 5 years, and typically contain an option permitting the customer to purchase the equipment at the end of the lease term. Retail leases are also offered in a generally similar manner to customers in Canada through John Deere Credit Inc. and John Deere Limited. The Credit Companies also offer financing, primarily for John Deere products, in Australia, New Zealand, Russia, and in several countries in Europe and in Latin America. In certain areas, financing is offered through cooperation agreements or joint ventures. Financing outside of the United States and Canada is affected by a variety of customs and regulations. The Credit Companies also offer to select incorporatedcustomers and dealers credit enhanced international export financing for the purchase of John Deere products.
The Company competes with AGCO Corporation, CNH Global N.V., Kubota Tractor Corporation, The Toro Company, Caterpillar Inc., Komatsu Ltd., Volvo Group AB, CNH Global N.V., Tigercat Industries Inc. and Ponsse Plc.
In 1987 Hans W. Becherer was named president of Deere and Hanson remained CEO. In 1988 the farm economy began to recover from its slump because of the lower dollar and the improvement of the North American agricultural economy. As the main survivor in the industry, Deere had increased its market share during the recession from 45 percent to 55 percent. In 1988 sales increased 30 percent to $5.4 billion and net income reached a record $315 million, a one-year turnaround of $414 million. Sales of tractors rose 90 percent and sales of harvesting machinery tripled. As the recession lifted, many farmers were ready to buy new equipment.
Deere offered its largest selection of new agricultural products ever in 1988 and 1989, spending about $16 million to display its 44 new combines, tractors, and balers in Denver, Colorado and in Palm Springs, Colorado. In 1988 Deere formed a joint venture with Hitachi called Deere-Hitachi Construction Machinery, which would produce and market earth excavators.
In March 1989, Deere settled a court dispute with the Equal Employment Opportunity Commission (EEOC), which was acting on behalf of 116 former employees who were laid off as part of the labor reductions in 1984. The EEOC alleged that age discrimination was involved, and although Deere denied the allegation, it agreed to pay $4.3 million to settle the dispute rather than go through further litigation. In October 1989, a one-month strike slowed production at Deere's Wisconsin lawn care products plant. Also in 1989, Deere paid $87 million for Funk Manufacturing, a maker of powertrain components.
Difficult Early 1990s Gave Way to Record Mid-1990s
In August 1989 Becherer became CEO of Deere, then became chairman as well in June 1990 when Hanson retired. Although Deere enjoyed profits of $411.1 million in 1990, it then lost $20.2 million in 1991 and made only $37.4 million in 1992. Sales fell in both 1991 and 1992. The difficulties stemmed in part from the early 1990s recession, which hit Deere's $1 billion construction equipment business particularly hard, and in part from farmers' reluctance to buy new equipment despite an improved farm sector economy.
In response, Deere poured money into a $120 million 1991 restructuring program and into research and development--$280 million in 1992 alone. The result was the company's 1992 introduction of the 6000/7000 series of tractors, touted as Deere's most significant new products since 1960. The line consisted of six new tractors with horsepower ranging from 66 to 145, and featuring the largest cabs in the industry--cabs that included comfortable seats, stereo cassettes, air conditioning, and better visibility thanks to 29 percent more glass. Deere's revitalized new product development efforts did not let up, however. Just two years later, the company introduced the 8000 series tractors, including the 8400 model, which was the world's first 225-horsepower row-crop tractor.
Meanwhile, Deere continued to seek ways to bolster its nonfarming sectors. In 1990 the company had established a Worldwide Lawn & Grounds Care Division, separating this product group from the agricultural equipment business. Deere then made a series of moves to strengthen its new division. In 1991 the company purchased a majority stake in SABO Maschinenfabrik AG, a maker of high-quality walk-behind mowers and commercial lawn mowers based in Germany. Three years later, Deere acquired the Homelite division of the conglomerate Textron, Inc. Homelite, based in Charlotte, North Carolina, was a leading manufacturer of handheld and walk-behind power products for the consumer and commercial markets. With this acquisition, Deere's lawn and ground care equipment business generated almost as much revenue as the industrial equipment division. The company in 1995 introduced the new "Sabre by John Deere" line of mid-priced lawn tractors and walk-behind mowers. The following year the name of this division was changed to Worldwide Commercial & Consumer Equipment Division.
Although Deere had long been active manufacturing its farm product overseas, the company had not been as aggressive as its competitors in selling tractors and other farm equipment outside the United States and Canada. The mid-1990s saw Deere become much more active in this area. In 1993 the company entered into a marketing agreement with Zetor s.p., a tractor manufacturer in the Czech Republic, whereby Zetor would provide Deere with a lower-priced line of 43 to 93 horsepower tractors, which Deere would sell into developing markets worldwide, particularly in Latin America and Asia. In 1996 Deere concluded its largest single agricultural sale in history when it sold $187 million in combines to Ukraine. The following year, the company established a joint venture with the Jiamusi Combine Harvester Factory based in China. The venture, called John Deere Jiamusi Harvester Company Ltd., of which Deere held a 60 percent interest, would produce smaller combines for export in the Asia-Pacific region.
Following the middling success of 1993 (in which Deere would have posted profits of $184.4 million were it not forced to take a noncash charge of $1.11 billion as the result of new accounting standards in relation to retiree health care and life insurance benefits), Deere enjoyed three consecutive years of record sales and profits. Farmers, whose coffers were overflowing as a result of high commodity prices, were finally replacing their old equipment with the innovative new models Deere introduced earlier in the decade. Sales outside the United States and Canada were becoming increasingly important to the company's success as they increased more than 75 percent from 1993 to 1996, going from $1.55 billion to $2.75 billion.
Despite the impressive results of the mid-1990s, Deere remained vulnerable to the inevitable economic downturn. The Deere of the mid-1990s, however, was somewhat more diversified than the Deere of the late 1980s. In 1989 agricultural equipment was responsible for 66 percent of net sales, industrial equipment 21 percent, and commercial/consumer equipment 13 percent, while in 1996 the figures were 63 percent, 20 percent, and 17 percent, respectively. Likewise, the company was becoming more geographically diverse, as sales from outside the United States and Canada increased from 22.8 percent of overall sales in 1989 to 28.6 percent in 1996. It seemed certain that into the 21st century Deere & Company would maintain its leading position in agricultural equipment through innovative new product development and would continue its history of careful diversification.
Principal Subsidiaries: Homelite, Inc.; John Deere Company; John Deere Credit Company; John Deere Health Care, Inc.; John Deere Insurance Group Inc.; Chamberlain John Deere Pty. Ltd. (Australia); John Deere Intercontinental Ltd. S.A. (Belgium); SLC S.A. Industria e Comercio (Brazil); John Deere Finance Limited (Canada); John Deere Limited (Canada); John Deere Jiamusi Harvester Company Ltd. (China; 60%); John Deere (France); John Deere-Lanz Verwaltungs A.G. (Germany; 99.9%); John Deere Vertrieb Deutschland (Germany); John Deere Italiana S.p.A. (Italy); John Deere Foreign Sales Corp. Limited (Jamaica); John Deere S.A. de C.V. (Mexico); SABO Maschinenfabrik AG (The Netherlands); John Deere (Proprietary) Ltd. (South Africa); John Deere Iberica S.A. (Spain); John Deere S.A. (Spain); John Deere Limited (U.K.).
Principal Divisions: Worldwide Agricultural Equipment Division; Worldwide Industrial Equipment Division; Worldwide Commercial & Consumer Equipment Division; Deere Power Systems Group; Worldwide Parts Division; John Deere Credit; John Deere Insurance Group; John Deere Health Care.
OVERALL
Beta: 1.51
Market Cap (Mil.): $39,990.48
Shares Outstanding (Mil.): 421.04
Annual Dividend: 1.40
Yield (%): 1.47
FINANCIALS
DE Industry Sector
P/E (TTM): 19.07 23.53 16.70
EPS (TTM): 131.98 -- --
ROI: 7.39 8.47 3.22
ROE: 36.94 13.46 5.81
Statistics:
Public Company
Incorporated: 1868
Employees: 33,900
Sales: $9.64 billion (1996)
Stock Exchanges: New York Midwest Frankfurt
SICs: 3519 Internal Combustion Engines, Not Elsewhere Classified; 3523 Farm Machinery & Equipment; 3524 Lawn & Garden Tractors, Home Lawn & Garden Equipment; 3531 Construction Machinery & Equipment; 3543 Industrial Patterns; 5084 Industrial Machinery & Equipment; 6141 Personal Credit Institutions; 6311 Security Brokers, Dealers & Flotation Companies; 6321 Accident & Health Insurance; 7373 Computer Integrated Systems Design; 8734 Testing Laboratories
Name Age Since Current Position
Allen, Samuel 57 2010 Chairman of the Board, Chief Executive Officer
Field, James 47 2009 Chief Financial Officer, Senior Vice President
Everitt, David 58 2009 President, Agriculture & Turf Division-North America, Asia, Australia
Israel, James 54 2006 President - Worldwide Financial Services Division
Mack, Michael 54 2009 President - Worldwide Construction & Forestry Division
von Pentz, Markwart 47 2009 President - Agriculture and Turf Division, Europe, CIS, Northern Africa, Middle East, Latin America
Jenkins, James 65 2000 Senior Vice President, General Counsel
Gilles, Jean 53 2010 SVP - Deere Power Systems, Worldwide Parts Svs., Advanced Tech. & Engineering
Bowles, Crandall 63 1999 Director
Patrick, Thomas 67 2000 Director
Jain, Dipak 53 2002 Director
Peters, Aulana 69 2002 Director
Milberg, Joachim 68 2003 Director
Coffman, Vance 67 2004 Director
Myers, Richard 69 2006 Director
Holliday, Charles 63 2009 Presiding Director
Jones, Clayton 61 2007 Director
Speer, David 59 2008 Director
Address:
John Deere Road
Moline, Illinois 61265
U.S.A.
The company's slogan is "Nothing runs like a Deere" and has a picture of a deer as a logo, a word play pun on "nothing runs like a deer."
Additionally, John Deere manufactures engines used in heavy equipment and provides financial services and other related activities that support the core businesses.
The company was founded in 1837 by John Deere, who developed and manufactured the first commercially successful cast-steel plow.
Deere & Company, together with its subsidiaries (John Deere), incorporated in 1958, operates in three business segments: agriculture and turf, construction and forestry and credit. The agriculture and turf segment manufactures and distributes a line of farm and turf equipment and related service parts including large, medium and utility tractors; loaders; combines, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders; tillage, seeding and application equipment. The construction and forestry segment manufactures, distributes to dealers and sells at retail a range of machines and service parts used in construction, earthmoving, material handling and timber harvesting. The credit segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment.
Agriculture and Turf
The John Deere agriculture and turf segment manufactures and distributes a full line of agricultural and turf equipment and related service parts. Its equipment operations are consolidated into five product platforms: crop harvesting (combines, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders); turf and utility (utility vehicles, riding lawn equipment, walk behind mowers, commercial mowing equipment, golf course equipment, implements for mowing, tilling, snow and debris handling, aerating and many other residential, commercial, golf and sports turf care applications, and other outdoor power products); hay and forage (self-propelled forage harvesters and attachments, balers and mowers); crop care (tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery), and tractors (loaders and large, medium and utility tractors). John Deere also purchases certain products from other manufacturers for resale. Additionally, the segment offers ancillary products and services supporting its agricultural and turf equipment customers. John Deere Landscapes, a unit of the segment, distributes irrigation equipment, nursery products and landscape supplies, including seed, fertilizer and hardscape materials, primarily to landscape service professionals. John Deere Water, also a unit of the agriculture and turf segment, manufactures and distributes precision agricultural irrigation equipment and supplies.
The segment also provides integrated agricultural business and equipment management systems. John Deere has developed a comprehensive agricultural management systems approach using advanced communications, data collection and global satellite positioning technologies to enable farmers to better control input costs and yields, improve soil conservation and minimize chemical use and to gather information. In addition to the John Deere brand, the agriculture and turf segment manufactures and sells a variety of equipment attachments under the Frontier brand name, walk-behind mowers and scarifiers in Europe under the SABO brand name, and tractors in China under the Benye brand name. John Deere manufactures its agricultural and turf equipment for sale primarily through independent retail dealer networks, and also builds products for sale by mass retailers, including The Home Depot and Lowe’s.
Construction and Forestry
John Deere construction, earthmoving, material handling and forestry equipment includes a broad range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape loaders, skid-steer loaders, log skidders, log feller bunchers, log loaders, log forwarders, log harvesters and a variety of attachments. The segment’s forestry machines are distributed under the John Deere brand name and forestry attachments are distributed under the John Deere and Waratah brand names. In addition to the equipment manufactured by the construction and forestry segment, John Deere purchases certain products from other manufacturers for resale. The segment also provides comprehensive fleet management telematics solutions.
John Deere and Hitachi Construction Machinery Co. (Hitachi) have a joint venture for the manufacture of hydraulic excavators and track log loaders in the United States and Canada. John Deere distributes Hitachi brands of construction and mining equipment in North, Central and South America. John Deere also has supply agreements with Hitachi under which a range of construction, earthmoving, material handling and forestry products manufactured by John Deere in the United States Finland and New Zealand are distributed by Hitachi in certain Asian markets. John Deere also owns Nortrax, Inc. and Nortrax Canada Inc. (collectively called Nortrax). Nortrax is an authorized John Deere dealer for construction, earthmoving, material handling and forestry equipment in a variety of markets in the United States and Canada. John Deere also owns retail forestry sales operations in Australia, Brazil, Finland, Ireland, New Zealand, Norway, Russia, Sweden and the United Kingdom.
Credit Operations
The Company’s credit segment (collectively referred to as the Credit Companies) primarily provide and administer financing for retail purchases from John Deere dealers of new equipment manufactured by the Company’s agriculture and turf and construction and forestry divisions and used equipment taken in trade for this equipment. In the United States certain subsidiaries included in the credit segment also offer crop risk mitigation products. The Company and John Deere Construction & Forestry Company are referred to as the sales companies. John Deere Capital Corporation (Capital Corporation), a United States credit subsidiary, generally purchases retail installment sales and loan contracts (retail notes) from the sales companies. These retail notes are acquired by the sales companies through John Deere retail dealers in the United States. John Deere Credit Inc., a Canadian credit subsidiary, purchases and finances retail notes acquired by John Deere Limited, the Company’s Canadian sales branch. The terms of retail notes and the basis on which the Credit Companies acquire retail notes from the sales companies are governed by agreements with the sales companies.
The Credit Companies also finance and service revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). Further, the Credit Companies finance and service operating loans, in most cases offered through and acquired from farm input providers or through direct relationships with agricultural producers or agribusinesses (operating loans). Additionally, the Credit Companies provide wholesale financing for inventories of John Deere agriculture and turf equipment and construction and forestry equipment owned by dealers of those products (wholesale notes). The various financing options offered by the Credit Companies are designed to enhance sales of John Deere products and generate financing income for the Credit Companies.
The Credit Companies offer retail leases to equipment users in the United States. A small number of leases are executed with units of local government. Leases are usually written for periods of 2 to 5 years, and typically contain an option permitting the customer to purchase the equipment at the end of the lease term. Retail leases are also offered in a generally similar manner to customers in Canada through John Deere Credit Inc. and John Deere Limited. The Credit Companies also offer financing, primarily for John Deere products, in Australia, New Zealand, Russia, and in several countries in Europe and in Latin America. In certain areas, financing is offered through cooperation agreements or joint ventures. Financing outside of the United States and Canada is affected by a variety of customs and regulations. The Credit Companies also offer to select incorporatedcustomers and dealers credit enhanced international export financing for the purchase of John Deere products.
The Company competes with AGCO Corporation, CNH Global N.V., Kubota Tractor Corporation, The Toro Company, Caterpillar Inc., Komatsu Ltd., Volvo Group AB, CNH Global N.V., Tigercat Industries Inc. and Ponsse Plc.
In 1987 Hans W. Becherer was named president of Deere and Hanson remained CEO. In 1988 the farm economy began to recover from its slump because of the lower dollar and the improvement of the North American agricultural economy. As the main survivor in the industry, Deere had increased its market share during the recession from 45 percent to 55 percent. In 1988 sales increased 30 percent to $5.4 billion and net income reached a record $315 million, a one-year turnaround of $414 million. Sales of tractors rose 90 percent and sales of harvesting machinery tripled. As the recession lifted, many farmers were ready to buy new equipment.
Deere offered its largest selection of new agricultural products ever in 1988 and 1989, spending about $16 million to display its 44 new combines, tractors, and balers in Denver, Colorado and in Palm Springs, Colorado. In 1988 Deere formed a joint venture with Hitachi called Deere-Hitachi Construction Machinery, which would produce and market earth excavators.
In March 1989, Deere settled a court dispute with the Equal Employment Opportunity Commission (EEOC), which was acting on behalf of 116 former employees who were laid off as part of the labor reductions in 1984. The EEOC alleged that age discrimination was involved, and although Deere denied the allegation, it agreed to pay $4.3 million to settle the dispute rather than go through further litigation. In October 1989, a one-month strike slowed production at Deere's Wisconsin lawn care products plant. Also in 1989, Deere paid $87 million for Funk Manufacturing, a maker of powertrain components.
Difficult Early 1990s Gave Way to Record Mid-1990s
In August 1989 Becherer became CEO of Deere, then became chairman as well in June 1990 when Hanson retired. Although Deere enjoyed profits of $411.1 million in 1990, it then lost $20.2 million in 1991 and made only $37.4 million in 1992. Sales fell in both 1991 and 1992. The difficulties stemmed in part from the early 1990s recession, which hit Deere's $1 billion construction equipment business particularly hard, and in part from farmers' reluctance to buy new equipment despite an improved farm sector economy.
In response, Deere poured money into a $120 million 1991 restructuring program and into research and development--$280 million in 1992 alone. The result was the company's 1992 introduction of the 6000/7000 series of tractors, touted as Deere's most significant new products since 1960. The line consisted of six new tractors with horsepower ranging from 66 to 145, and featuring the largest cabs in the industry--cabs that included comfortable seats, stereo cassettes, air conditioning, and better visibility thanks to 29 percent more glass. Deere's revitalized new product development efforts did not let up, however. Just two years later, the company introduced the 8000 series tractors, including the 8400 model, which was the world's first 225-horsepower row-crop tractor.
Meanwhile, Deere continued to seek ways to bolster its nonfarming sectors. In 1990 the company had established a Worldwide Lawn & Grounds Care Division, separating this product group from the agricultural equipment business. Deere then made a series of moves to strengthen its new division. In 1991 the company purchased a majority stake in SABO Maschinenfabrik AG, a maker of high-quality walk-behind mowers and commercial lawn mowers based in Germany. Three years later, Deere acquired the Homelite division of the conglomerate Textron, Inc. Homelite, based in Charlotte, North Carolina, was a leading manufacturer of handheld and walk-behind power products for the consumer and commercial markets. With this acquisition, Deere's lawn and ground care equipment business generated almost as much revenue as the industrial equipment division. The company in 1995 introduced the new "Sabre by John Deere" line of mid-priced lawn tractors and walk-behind mowers. The following year the name of this division was changed to Worldwide Commercial & Consumer Equipment Division.
Although Deere had long been active manufacturing its farm product overseas, the company had not been as aggressive as its competitors in selling tractors and other farm equipment outside the United States and Canada. The mid-1990s saw Deere become much more active in this area. In 1993 the company entered into a marketing agreement with Zetor s.p., a tractor manufacturer in the Czech Republic, whereby Zetor would provide Deere with a lower-priced line of 43 to 93 horsepower tractors, which Deere would sell into developing markets worldwide, particularly in Latin America and Asia. In 1996 Deere concluded its largest single agricultural sale in history when it sold $187 million in combines to Ukraine. The following year, the company established a joint venture with the Jiamusi Combine Harvester Factory based in China. The venture, called John Deere Jiamusi Harvester Company Ltd., of which Deere held a 60 percent interest, would produce smaller combines for export in the Asia-Pacific region.
Following the middling success of 1993 (in which Deere would have posted profits of $184.4 million were it not forced to take a noncash charge of $1.11 billion as the result of new accounting standards in relation to retiree health care and life insurance benefits), Deere enjoyed three consecutive years of record sales and profits. Farmers, whose coffers were overflowing as a result of high commodity prices, were finally replacing their old equipment with the innovative new models Deere introduced earlier in the decade. Sales outside the United States and Canada were becoming increasingly important to the company's success as they increased more than 75 percent from 1993 to 1996, going from $1.55 billion to $2.75 billion.
Despite the impressive results of the mid-1990s, Deere remained vulnerable to the inevitable economic downturn. The Deere of the mid-1990s, however, was somewhat more diversified than the Deere of the late 1980s. In 1989 agricultural equipment was responsible for 66 percent of net sales, industrial equipment 21 percent, and commercial/consumer equipment 13 percent, while in 1996 the figures were 63 percent, 20 percent, and 17 percent, respectively. Likewise, the company was becoming more geographically diverse, as sales from outside the United States and Canada increased from 22.8 percent of overall sales in 1989 to 28.6 percent in 1996. It seemed certain that into the 21st century Deere & Company would maintain its leading position in agricultural equipment through innovative new product development and would continue its history of careful diversification.
Principal Subsidiaries: Homelite, Inc.; John Deere Company; John Deere Credit Company; John Deere Health Care, Inc.; John Deere Insurance Group Inc.; Chamberlain John Deere Pty. Ltd. (Australia); John Deere Intercontinental Ltd. S.A. (Belgium); SLC S.A. Industria e Comercio (Brazil); John Deere Finance Limited (Canada); John Deere Limited (Canada); John Deere Jiamusi Harvester Company Ltd. (China; 60%); John Deere (France); John Deere-Lanz Verwaltungs A.G. (Germany; 99.9%); John Deere Vertrieb Deutschland (Germany); John Deere Italiana S.p.A. (Italy); John Deere Foreign Sales Corp. Limited (Jamaica); John Deere S.A. de C.V. (Mexico); SABO Maschinenfabrik AG (The Netherlands); John Deere (Proprietary) Ltd. (South Africa); John Deere Iberica S.A. (Spain); John Deere S.A. (Spain); John Deere Limited (U.K.).
Principal Divisions: Worldwide Agricultural Equipment Division; Worldwide Industrial Equipment Division; Worldwide Commercial & Consumer Equipment Division; Deere Power Systems Group; Worldwide Parts Division; John Deere Credit; John Deere Insurance Group; John Deere Health Care.
OVERALL
Beta: 1.51
Market Cap (Mil.): $39,990.48
Shares Outstanding (Mil.): 421.04
Annual Dividend: 1.40
Yield (%): 1.47
FINANCIALS
DE Industry Sector
P/E (TTM): 19.07 23.53 16.70
EPS (TTM): 131.98 -- --
ROI: 7.39 8.47 3.22
ROE: 36.94 13.46 5.81
Statistics:
Public Company
Incorporated: 1868
Employees: 33,900
Sales: $9.64 billion (1996)
Stock Exchanges: New York Midwest Frankfurt
SICs: 3519 Internal Combustion Engines, Not Elsewhere Classified; 3523 Farm Machinery & Equipment; 3524 Lawn & Garden Tractors, Home Lawn & Garden Equipment; 3531 Construction Machinery & Equipment; 3543 Industrial Patterns; 5084 Industrial Machinery & Equipment; 6141 Personal Credit Institutions; 6311 Security Brokers, Dealers & Flotation Companies; 6321 Accident & Health Insurance; 7373 Computer Integrated Systems Design; 8734 Testing Laboratories
Name Age Since Current Position
Allen, Samuel 57 2010 Chairman of the Board, Chief Executive Officer
Field, James 47 2009 Chief Financial Officer, Senior Vice President
Everitt, David 58 2009 President, Agriculture & Turf Division-North America, Asia, Australia
Israel, James 54 2006 President - Worldwide Financial Services Division
Mack, Michael 54 2009 President - Worldwide Construction & Forestry Division
von Pentz, Markwart 47 2009 President - Agriculture and Turf Division, Europe, CIS, Northern Africa, Middle East, Latin America
Jenkins, James 65 2000 Senior Vice President, General Counsel
Gilles, Jean 53 2010 SVP - Deere Power Systems, Worldwide Parts Svs., Advanced Tech. & Engineering
Bowles, Crandall 63 1999 Director
Patrick, Thomas 67 2000 Director
Jain, Dipak 53 2002 Director
Peters, Aulana 69 2002 Director
Milberg, Joachim 68 2003 Director
Coffman, Vance 67 2004 Director
Myers, Richard 69 2006 Director
Holliday, Charles 63 2009 Presiding Director
Jones, Clayton 61 2007 Director
Speer, David 59 2008 Director
Address:
John Deere Road
Moline, Illinois 61265
U.S.A.