UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2003

Commission file no: 1-4121

DEERE  &  COMPANY

Delaware
(State of incorporation)

36-2382580
(IRS employer identification no.)

One John Deere Place

Moline, Illinois 61265

(Address of principal executive offices)

Telephone Number: (309) 765-8000

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes

X

No

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes

X

No

        At April 30, 2003, 239,382,305 shares of common stock, $1 par value, of the registrant were outstanding.

Index to Exhibits: Page 35

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended April 30, 2003 and 2002
(In millions of dollars except per share amounts) Unaudited

2003

2002

Net Sales and Revenues

Net sales

$

3,867.3

$

3,409.0

Finance and interest income

317.9

328.6

Health care premiums and fees

166.1

170.0

Other income

48.7

78.9

     Total

4,400.0

3,986.5

Costs and Expenses

Cost of sales

3,055.2

2,749.6

Research and development expenses

144.3

132.0

Selling, administrative and general expenses

425.4

450.5

Interest expense

160.6

156.7

Health care claims and costs

135.9

141.7

Other operating expenses

80.4

115.9

     Total

4,001.8

3,746.4

Income of Consolidated Group

  Before Income Taxes

398.2

240.1

Provision for income taxes

140.4

93.1

Income of Consolidated Group

257.8

147.0

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

.1

(1.1

)

  Other

(1.0

)

(4.1

)

     Total

(.9

)

(5.2

)

Net Income

$

256.9

$

141.8

Per Share:

Net income - basic

$

1.08

$

.60

Net income - diluted

$

1.07

$

.59

See Notes to Interim Financial Statements.

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Six Months Ended April 30, 2003 and 2002
(In millions of dollars except per share amounts) Unaudited

2003

2002

Net Sales and Revenues

Net sales

$

6,141.1

$

5,346.5

Finance and interest income

628.7

667.9

Health care premiums and fees

317.2

331.5

Other income

106.6

162.7

     Total

7,193.6

6,508.6

Costs and Expenses

Cost of sales

4,912.7

4,428.2

Research and development expenses

261.8

259.2

Selling, administrative and general expenses

782.8

816.0

Interest expense

312.5

318.6

Health care claims and costs

256.2

275.1

Other operating expenses

163.9

224.8

     Total

6,689.9

6,321.9

Income of Consolidated Group

  Before Income Taxes

503.7

186.7

Provision for income taxes

177.9

68.7

Income of Consolidated Group

325.8

118.0

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

.2

(2.0

)

  Other

(1.1

)

(12.4

)

     Total

(.9

)

(14.4

)

Net Income

$

324.9

$

103.6

Per Share:

Net income - basic

$

1.36

$

.44

Net income - diluted

$

1.35

$

.43

See Notes to Interim Financial Statements.

DEERE & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions of dollars) Unaudited

April 30

October 31

April 30

2003

2002

2002

Assets

Cash and cash equivalents

$

3,324.2

$

2,814.9

$

2,616.5

Marketable securities

211.9

189.2

214.0

Receivables from unconsolidated

   affiliates

326.2

265.8

277.1

Trade accounts and notes

   receivable - net

3,711.2

2,733.6

3,517.3

Financing receivables - net

9,455.9

9,067.5

7,670.2

Other receivables

264.5

426.4

382.8

Equipment on operating leases - net

1,425.5

1,609.2

1,713.9

Inventories

2,006.8

1,371.8

1,806.7

Property and equipment - net

2,010.5

1,998.3

2,010.1

Investments in unconsolidated affiliates

175.9

180.6

190.2

Goodwill

846.6

804.0

827.1

Other intangible assets - net

90.2

90.9

26.5

Prepaid pension costs

54.2

49.6

678.7

Other assets

628.8

582.1

423.1

Deferred income taxes

1,538.5

1,490.1

971.8

Deferred charges

113.6

94.0

113.4

          Total assets

$

26,184.5

$

23,768.0

$

23,439.4

Liabilities and Stockholders' Equity

Short-term borrowings

$

5,056.9

$

4,437.3

$

4,971.4

Payables to unconsolidated

   affiliates

97.3

64.0

42.0

Accounts payable and accrued

   expenses

3,181.7

3,142.2

2,900.4

Health care claims and reserves

103.2

92.8

109.3

Accrued taxes

246.2

87.4

136.5

Deferred income taxes

28.1

24.5

19.6

Long-term borrowings

10,412.5

8,950.4

8,471.5

Retirement benefit accruals

   and other liabilities

3,528.8

3,806.2

2,698.6

     Total liabilities

22,654.7

20,604.8

19,349.3

Common Stock, $1 par value (issued shares at

   April 30, 2003 - 268,215,602)

1,957.0

1,957.0

1,947.7

Common stock in treasury

(1,306.0

)

(1,322.2

)

(1,344.8

)

Unamortized restricted stock compensation

(8.1

)

(17.8

)

(17.7

)

Retained earnings

4,128.4

3,912.6

3,808.6

   Total

4,771.3

4,529.6

4,393.8

Accumulated other comprehensive income (loss)

(1,241.5

)

(1,366.4

)

(303.7

)

Total stockholders' equity

3,529.8

3,163.2

4,090.1

          Total liabilities and stockholders' equity

$

26,184.5

$

23,768.0

$

23,439.4

See Notes to Interim Financial Statements.

DEERE & COMPANY
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
For the Six Months Ended April 30, 2003 and 2002
(In millions of dollars) Unaudited

2003

2002

Cash Flows from Operating Activities

Net income

$

324.9

$

103.6

Adjustments to reconcile net income to net cash

  used for operating activities

(1,217.7

)

(328.8

)

     Net cash used for operating activities

(892.8

)

(225.2

)

Cash Flows from Investing Activities

Collections of receivables

4,228.2

3,734.3

Proceeds from sales of financing receivables

606.2

2,613.0

Proceeds from maturities and sales of marketable securities

27.4

28.1

Proceeds from sales of equipment on operating leases

277.8

308.6

Proceeds from sales of businesses

22.5

50.1

Cost of receivables acquired

(5,038.8

)

(4,933.7

)

Purchases of marketable securities

(49.0

)

(67.1

)

Purchases of property and equipment

(117.1

)

(142.6

)

Cost of operating leases acquired

(195.8

)

(249.9

)

Acquisitions of businesses, net of cash acquired

(8.0

)

(11.7

)

Decrease (increase) in receivables with unconsolidated affiliates

(8.4

)

10.2

Other

(27.0

)

(80.7

)

     Net cash provided by (used for) investing activities

(282.0

)

1,258.6

Cash Flows from Financing Activities

Increase (decrease) in short-term borrowings

1,061.4

(1,145.9

)

Proceeds from long-term borrowings

2,002.5

3,179.7

Principal payments on long-term borrowings

(1,323.6

)

(1,406.5

)

Proceeds from issuance of common stock

20.4

33.4

Repurchases of common stock

(.4

)

(1.2

)

Dividends paid

(105.2

)

(104.0

)

Other

(1.4

)

(1.8

)

     Net cash provided by financing activities

1,653.7

553.7

Effect of Exchange Rate Changes on Cash

30.4

(.6

)

Net Increase in Cash and Cash Equivalents

509.3

1,586.5

Cash and Cash Equivalents at Beginning of Period

2,814.9

1,030.0

Cash and Cash Equivalents at End of Period

$

3,324.2

$

2,616.5