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 July 31, 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 July 31, 2003, 240,002,297 shares of common stock, $1 par value, of the registrant were outstanding.

Index to Exhibits:  Page 30

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended July 31, 2003 and 2002
(In millions of dollars except per share amounts) Unaudited

2003

2002

Net Sales and Revenues

Net sales

$

3,833.0

$

3,409.6

Finance and interest income

328.6

336.5

Health care premiums and fees

173.6

174.9

Other income

66.4

48.0

     Total

4,401.6

3,969.0

Costs and Expenses

Cost of sales

3,065.1

2,746.9

Research and development expenses

143.3

125.2

Selling, administrative and general expenses

447.8

406.3

Interest expense

162.4

158.3

Health care claims and costs

139.2

142.5

Other operating expenses

73.5

101.0

     Total

4,031.3

3,680.2

Income of Consolidated Group

  Before Income Taxes

370.3

288.8

Provision for income taxes

126.7

134.8

Income of Consolidated Group

243.6

154.0

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

(.9

)

  Other

3.9

(5.5

)

     Total

3.9

(6.4

)

Net Income

$

247.5

$

147.6

Per Share:

Net income - basic

$

1.03

$

.62

Net income - diluted

$

1.02

$

.61

See Notes to Interim Financial Statements.

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Nine Months Ended July 31, 2003 and 2002
(In millions of dollars except per share amounts) Unaudited

2003

2002

Net Sales and Revenues

Net sales

$

9,974.1

$

8,756.1

Finance and interest income

957.4

1,004.3

Health care premiums and fees

490.7

506.4

Other income

173.0

210.8

     Total

11,595.2

10,477.6

Costs and Expenses

Cost of sales

7,977.8

7,175.1

Research and development expenses

405.1

384.5

Selling, administrative and general expenses

1,230.5

1,222.3

Interest expense

474.9

476.9

Health care claims and costs

395.5

417.5

Other operating expenses

237.4

325.8

     Total

10,721.2

10,002.1

Income of Consolidated Group

  Before Income Taxes

874.0

475.5

Provision for income taxes

304.6

203.5

Income of Consolidated Group

569.4

272.0

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

.2

(3.0

)

  Other

2.8

(17.8

)

     Total

3.0

(20.8

)

Net Income

$

572.4

$

251.2

Per Share:

Net income - basic

$

2.39

$

1.06

Net income - diluted

$

2.37

$

1.04

See Notes to Interim Financial Statements.

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

July 31

October 31

July 31

  2003

2002

2002

Assets

Cash and cash equivalents

$

3,757.2

$

2,814.9

$

2,327.5

Marketable securities

232.7

189.2

211.6

Receivables from unconsolidated

   affiliates

333.4

265.8

273.8

Trade accounts and notes

   receivable - net

3,355.3

2,733.6

3,302.4

Financing receivables - net

9,522.0

9,067.5

8,351.2

Other receivables

333.5

426.4

273.6

Equipment on operating leases - net

1,384.3

1,609.2

1,663.6

Inventories

1,710.5

1,371.8

1,606.5

Property and equipment - net

2,021.7

1,998.3

2,008.0

Investments in unconsolidated affiliates

181.6

180.6

186.7

Goodwill

859.7

804.0

835.1

Other intangible assets - net

90.0

90.9

25.9

Prepaid pension costs

57.1

49.6

687.6

Other assets

576.4

582.1

610.0

Deferred income taxes

1,479.7

1,490.1

1,030.0

Deferred charges

102.7

94.0

93.3

          Total assets

$

25,997.8

$

23,768.0

$

23,486.8

Liabilities and Stockholders' Equity

Short-term borrowings

$

4,403.0

$

4,437.3

$

5,121.6

Payables to unconsolidated

   affiliates

100.5

64.0

51.7

Accounts payable and accrued

   expenses

3,169.6

3,142.2

2,957.7

Health care claims and reserves

111.8

92.8

109.2

Accrued taxes

228.3

87.4

126.6

Deferred income taxes

29.0

24.5

19.5

Long-term borrowings

10,544.8

8,950.4

8,163.1

Retirement benefit accruals

   and other liabilities

3,618.6

3,806.2

2,753.5

     Total liabilities

22,205.6

20,604.8

19,302.9

Common Stock, $1 par value (issued shares at

   July 31, 2003 - 268,215,602)

1,957.0

1,957.0

1,947.7

Common stock in treasury

(1,279.3

)

(1,322.2

)

(1,334.7

)

Unamortized restricted stock compensation

(6.8

)

(17.8

)

(16.5

)

Retained earnings

4,317.3

3,912.6

3,899.5

   Total

4,988.2

4,529.6

4,496.0

Accumulated other comprehensive income (loss)

(1,196.0

)

(1,366.4

)

(312.1

)

Stockholders' equity

3,792.2

3,163.2

4,183.9

          Total liabilities and stockholders' equity

$

25,997.8

$

23,768.0

$

23,486.8

See Notes to Interim Financial Statements.

DEERE & COMPANY
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended July 31, 2003 and 2002
(In millions of dollars) Unaudited

2003

2002

Cash Flows from Operating Activities

Net income

$

572.4

$

251.2

Adjustments to reconcile net income to net cash

  provided by operating activities

(377.4

)

427.4

     Net cash provided by operating activities

195.0

678.6

Cash Flows from Investing Activities

Collections of receivables

6,472.8

5,479.3

Proceeds from sales of financing receivables

1,542.9

2,789.1

Proceeds from maturities and sales of marketable securities

46.4

43.6

Proceeds from sales of equipment on operating leases

398.6

437.7

Proceeds from sales of businesses

22.5

50.1

Cost of receivables acquired

(8,199.0

)

(7,548.8

)

Purchases of marketable securities

(88.6

)

(78.1

)

Purchases of property and equipment

(185.4

)

(229.3

)

Cost of operating leases acquired

(333.6

)

(430.1

)

Acquisitions of businesses, net of cash acquired

(10.6

)

(15.4

)

Decrease (increase) in receivables with unconsolidated affiliates

(25.7

)

15.3

Other

(7.9

)

(80.6

)

     Net cash provided by (used for) investing activities

(367.6

)

432.8

Cash Flows from Financing Activities

Increase (decrease) in short-term borrowings

503.8

(1,020.0

)

Proceeds from long-term borrowings

2,857.2

3,592.1

Principal payments on long-term borrowings

(2,171.9

)

(2,273.6

)

Proceeds from issuance of common stock

41.5

39.7

Repurchases of common stock

(.4

)

(1.2

)

Dividends paid

(157.8

)

(156.5

)

Other

(1.4

)

(1.5

)

     Net cash provided by financing activities

1,071.0

179.0

Effect of Exchange Rate Changes on Cash

43.9

7.1