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, 2004

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, 2004, 248,936,765 shares of common stock, $1 par value, of the registrant were outstanding.

Index to Exhibits: Page 32

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended April 30, 2004 and 2003
(In millions of dollars except per share amounts) Unaudited

2004

2003

Net Sales and Revenues

Net sales

$

5,296.1

$

3,867.3

Finance and interest income

294.0

317.9

Health care premiums and fees

194.3

166.1

Other income

92.6

48.7

     Total

5,877.0

4,400.0

Costs and Expenses

Cost of sales

3,983.3

3,055.2

Research and development expenses

150.6

144.3

Selling, administrative and general expenses

583.7

425.4

Interest expense

151.2

160.6

Health care claims and costs

180.7

135.9

Other operating expenses

85.7

80.4

     Total

5,135.2

4,001.8

Income of Consolidated Group

  Before Income Taxes

741.8

398.2

Provision for income taxes

262.6

140.4

Income of Consolidated Group

479.2

257.8

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

.2

.1

  Other

(2.1

)

(1.0

)

     Total

(1.9

)

(.9

)

Net Income

$

477.3

$

256.9

Per Share:

Net income - basic

$

1.93

$

1.08

Net income - diluted

$

1.88

$

1.07

See Notes to Interim Financial Statements.

DEERE & COMPANY
STATEMENT OF CONSOLIDATED INCOME
For the Six Months Ended April 30, 2004 and 2003
(In millions of dollars except per share amounts) Unaudited

2004

2003

Net Sales and Revenues

Net sales

$

8,207.7

$

6,141.1

Finance and interest income

588.7

628.7

Health care premiums and fees

375.6

317.2

Other income

188.8

106.6

     Total

9,360.8

7,193.6

Costs and Expenses

Cost of sales

6,277.7

4,912.7

Research and development expenses

288.8

261.8

Selling, administrative and general expenses

1,001.5

782.8

Interest expense

298.6

312.5

Health care claims and costs

331.3

256.2

Other operating expenses

158.9

163.9

     Total

8,356.8

6,689.9

Income of Consolidated Group

  Before Income Taxes

1,004.0

503.7

Provision for income taxes

355.1

177.9

Income of Consolidated Group

648.9

325.8

Equity in Income (Loss) of Unconsolidated Affiliates

  Credit

.3

.2

  Other

(1.1

)

(1.1

)

     Total

(.8

)

(.9

)

Net Income

$

648.1

$

324.9

Per Share:

Net income - basic

$

2.63

$

1.36

Net income - diluted

$

2.56

$

1.35

See Notes to Interim Financial Statements.

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

April 30

October 31

April 30

   2004

2003

2003

Assets

Cash and cash equivalents

$

2,995.7

$

4,384.5

$

3,324.2

Marketable securities

250.8

231.8

211.9

Receivables from unconsolidated

   affiliates

31.2

303.2

326.2

Trade accounts and notes

   receivable - net

3,887.1

2,619.3

3,711.2

Financing receivables - net

9,655.1

9,974.2

9,455.9

Other receivables

428.3

428.3

264.5

Equipment on operating leases - net

1,204.4

1,381.9

1,425.5

Inventories

2,226.2

1,366.1

2,006.8

Property and equipment - net

2,071.4

2,075.6

2,010.5

Investments in unconsolidated affiliates

109.2

195.5

175.9

Goodwill

928.4

872.1

846.6

Other intangible assets - net

255.5

252.9

90.2

Prepaid pension costs

60.8

62.6

54.2

Other assets

494.2

534.3

628.8

Deferred income taxes

1,249.2

1,476.1

1,538.5

Deferred charges

109.8

99.6

113.6

          Total Assets

$

25,957.3

$

26,258.0

$

26,184.5

Liabilities and Stockholders' Equity

Short-term borrowings

$

3,076.9

$

4,347.2

$

5,056.9

Payables to unconsolidated

   affiliates

146.0

87.8

97.3

Accounts payable and accrued

   expenses

3,612.0

3,105.5

3,181.7

Health care claims and reserves

128.3

94.1

103.2

Accrued taxes

205.1

226.5

246.2

Deferred income taxes

29.2

30.7

28.1

Long-term borrowings

10,878.3

10,404.2

10,412.5

Retirement benefit accruals

   and other liabilities

3,140.7

3,959.9

3,528.8

     Total liabilities

21,216.5

22,255.9

22,654.7

Common stock, $1 par value (issued shares at

   April 30, 2004 - 268,215,602)

1,987.7

1,987.8

1,957.0

Common stock in treasury

(897.4

)

(1,141.4

)

(1,306.0

)

Unamortized restricted stock compensation

(16.7

)

(5.8

)

(8.1

)

Retained earnings

4,841.4

4,329.5

4,128.4

   Total

5,915.0

5,170.1

4,771.3

Accumulated other comprehensive income (loss)

(1,174.2

)

(1,168.0

)

(1,241.5

)

Stockholders' equity

4,740.8

4,002.1

3,529.8

          Total Liabilities and Stockholders' Equity

$

25,957.3

$

26,258.0

$

26,184.5

See Notes to Interim Financial Statements.

DEERE & COMPANY
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
For the Six Months Ended April 30, 2004 and 2003
(In millions of dollars) Unaudited

2004

2003

Cash Flows from Operating Activities

Net income

$

648.1

$

324.9

Adjustments to reconcile net income to net cash

  used for operating activities

(1,556.6

)

(1,217.7

)

     Net cash used for operating activities

(908.5

)

(892.8

)

Cash Flows from Investing Activities

Collections of receivables

5,160.6

4,228.2

Proceeds from sales of financing receivables

1,602.6

606.2

Proceeds from maturities and sales of marketable securities

30.4

27.4

Proceeds from sales of equipment on operating leases

260.2

277.8

Proceeds from sales of businesses

78.7

22.5

Cost of receivables acquired

(6,445.5

)

(5,038.8

)

Purchases of marketable securities

(51.2

)

(49.0

)

Purchases of property and equipment

(140.6

)

(117.1

)

Cost of operating leases acquired

(221.2

)

(195.8

)

Acquisitions of businesses, net of cash acquired

(163.3

)

(8.0

)

Increase in receivables with unconsolidated affiliates

(14.9

)

(8.4

)

Other

16.6

(27.0

)

     Net cash provided by (used for) investing activities

112.4

(282.0

)

Cash Flows from Financing Activities

Increase (decrease) in short-term borrowings

(452.5

)

1,061.4

Proceeds from long-term borrowings

802.8

2,002.5

Principal payments on long-term borrowings

(1,080.2

)

(1,323.6

)

Proceeds from issuance of common stock

216.5

20.4

Repurchases of common stock

(.2

)

(.4

)

Dividends paid

(107.6

)

(105.2

)

Other

(.6

)

(1.4

)

     Net cash provided by (used for) financing activities

(621.8

)

1,653.7

Effect of Exchange Rate Changes on Cash

29.1

30.4

Net Increase (Decrease) in Cash and Cash Equivalents

(1,388.8

)

509.3

Cash and Cash Equivalents at Beginning of Period

4,384.5

2,814.9

Cash and Cash Equivalents at End of Period

$

2,995.7

$