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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED JANUARY 31, 2003
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
        FOR THE TRANSITION PERIOD FROM _______________ TO _______________

                           COMMISSION FILE NO. 1-12641

                                RDO EQUIPMENT CO.
             (Exact name of registrant as specified in its charter)

        DELAWARE                                         45-0306084
(State of incorporation)                    (I.R.S. Employer Identification No.)

                           2829 SOUTH UNIVERSITY DRIVE
                            FARGO, NORTH DAKOTA 58103
               (Address of principal executive offices) (Zip code)

       Registrant's telephone number, including area code: (701) 297-4288

           Securities registered pursuant to Section 12(b) of the Act:
                      CLASS A COMMON STOCK, $.01 PAR VALUE
          Name of exchange on which registered: NEW YORK STOCK EXCHANGE
        Securities registered pursuant to Section 12(g) of the Act: NONE

         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. _X_ YES ___ NO

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes ___ No _X_

         The aggregate market value of common equity held by persons other than
directors and officers was approximately $22 million as of July 31, 2002, based
on the last reported sale price at that date reported by the New York Stock
Exchange.

         The Company had 5,179,808 shares of Class A Common Stock and 7,450,492
shares of Class B Common Stock outstanding for a total of 12,630,300 shares of
Common Stock as of March 31, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

       None.

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                         CAUTIONARY STATEMENT REGARDING
                  FUTURE RESULTS AND FORWARD-LOOKING STATEMENTS

         The future results of RDO Equipment Co. (the "Company"), including
results reflected in any forward-looking statement made by or on behalf of the
Company will be impacted by a number of important factors. The factors
identified below in the section entitled "Certain Important Factors" are
important factors (but not necessarily all important factors) that could cause
the Company's actual future results to differ materially from those expressed in
any forward-looking statement made by or on behalf of the Company. Any
statements contained or incorporated by reference in this Form 10-K that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, words such as "may," "will," "expect,"
"believe," "anticipate," "estimate" or "continue" or comparable terminology are
intended to identify forward-looking statements. Forward-looking statements, by
their nature, involve substantial risks and uncertainties.


                                     PART I
ITEM 1. BUSINESS.

GENERAL

         The Company specializes in the distribution, sale, service, rental and
finance of equipment and trucks to the agricultural, construction,
manufacturing, transportation and warehousing industries, as well as to public
service entities, government agencies and utilities. At the end of fiscal 2003,
the Company operated 45 retail stores in nine states - Arizona, California,
Minnesota, Montana, Nebraska, North Dakota, South Dakota, Texas and Washington.
Its stores include one of the largest networks of Deere & Company ("Deere")
construction equipment dealerships and agricultural equipment dealerships in
North America.

         Deere, a leading manufacturer and supplier of construction and
agricultural equipment, is the primary supplier of new products sold by the
Company. Sales of new Deere products accounted for approximately 48% of the
Company's sales in fiscal 2003 with no other supplier accounting for more than
10%. The Company's stores also offer complementary products from other
suppliers, used products, new and used parts, product servicing, product rental,
loans, leases and other related products and services. Revenues for product
rental, loans, leases and other related products and services were not
significant for fiscal 2003, 2002, or 2001.

         For the fiscal year ended January 31, 2003, the Company's revenues were
generated from the following areas of business:

         New equipment and truck sales...........................    51%
         Used equipment and truck sales..........................    20%
         Product support (parts and service revenues)............    29%

         The Company was incorporated in April 1968 and re-incorporated in
Delaware in January 1997. The Company's executive offices are located at 2829
South University Drive, Fargo, North Dakota 58103. The Company's phone number is
(701) 297-4288. References to the Company in this Form 10-K include its
subsidiaries.


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<PAGE>


         The Company's business is organized, managed and internally reported as
three business segments. Business segment information is contained in Note 14 of
the Company's financial statements on pages 60 and 61 of this report and is
incorporated in this item by reference.

         During fiscal 2003, the Company was affected by various economic
conditions in all operating segments. New farm legislation along with generally
favorable growing conditions in the Company's agricultural store regions,
resulted in increased farmer confidence and increased revenues in this operating
segment. Construction operations were affected by a general slowdown in
equipment purchasing by construction equipment contractors in the Company's
geographic areas of responsibility, especially in the Company's southern
regions. These conditions provided for increased competitive pressures and a
decline in unit market potential in the Company's operating regions. The
Company's truck revenues continued to decline reflecting the sale of the
majority of the Company's truck operations at various times during the past two
years.

CONSTRUCTION EQUIPMENT OPERATIONS

         The Company estimates that North American retail sales of new
construction equipment in its target product market in calendar 2002 totaled
over $8 billion. Deere is one of the leading suppliers of construction equipment
in North America for light to medium applications and offers a broad array of
products. The Company believes Deere has approximately 80 construction dealers
who operate approximately 400 main stores and sales and service centers in North
America. Each dealer within the Deere construction dealer system is assigned
designated geographic areas of responsibility within which it has the right to
sell new Deere construction products.

         The Company believes it is one of the largest Deere construction
equipment dealers in North America, both in number of stores and total
purchases, accounting for approximately seven percent of Deere's North American
construction equipment sales in calendar 2002. As of the end of fiscal 2003, the
Company operated 25 Deere construction equipment stores located in metropolitan
areas in Arizona, southern California, Minnesota, Montana, North Dakota, South
Dakota and central Texas.

         Customers of the Company's construction equipment and material handling
stores are diverse and include contractors for both residential and commercial
construction, utility companies, and federal, state and local government
agencies. The Company's stores provide a full line of equipment for light,
medium and heavy size applications and related product support to their
customers. Primary products include Deere backhoes, excavators, crawler dozers,
four-wheel-drive loaders and articulated dump trucks. The Company's construction
equipment stores also offer complementary equipment from other suppliers, as
well as used equipment generally acquired as trade-ins.

         The Company's construction equipment stores are located in areas with
significant construction activity, including Austin, Dallas/Fort Worth,
southeastern Los Angeles, Minneapolis/St. Paul, Phoenix, San Antonio and San
Diego. Each construction equipment store displays a broad array of new and used
equipment and has a series of fully equipped service bays to provide on-site
service and maintenance of construction equipment and well-equipped service
trucks are maintained to handle in-the-field customer services. In addition to
selling and servicing new and used construction equipment, the Company engages
in rent-to-purchase and rent-to-rent transactions as part of its dealership
activities.

AGRICULTURAL EQUIPMENT OPERATIONS

         The Company estimates that North American retail sales of new
agricultural equipment in its target product market in calendar 2002 totaled
over $10 billion. Deere is the leading supplier of agricultural


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equipment in North America. Within the Deere agricultural dealer system, dealers
are not assigned exclusive territories, but are authorized to operate at
specific store locations. The Company believes Deere has in excess of 1,000
agricultural dealers that operate approximately 1,600 stores and parts and
service centers in North America.

         The Company believes it is the largest Deere agricultural equipment
dealer in North America, both in number of stores and total purchases,
accounting for approximately 2.9 percent of Deere's North American sales of
agricultural equipment, parts and attachments in calendar 2002. As of the end of
fiscal 2003, the Company operated 14 Deere agricultural equipment stores located
in Arizona, southern California, Minnesota, North Dakota, South Dakota and
Washington.

         The Company's agricultural equipment stores are a full-service supplier
to farmers, offering a broad range of farm equipment and related products for
the crops grown in each of their areas. As a result of the customer mix and
Deere's product offering, the core products include combines, tractors, planting
equipment and tillage equipment. The Company's agricultural equipment stores
also carry other harvesting and crop handling machinery, as well as lawn and
grounds care equipment. Certain locations also have the commercial work-site
products dealer agreement with Deere, offering Deere skid steer products. The
sale of new Deere agricultural equipment is the primary focus of the Company's
agricultural equipment sales and accounts for a majority of new equipment sales.
A wide variety of additional agricultural equipment lines, which complement the
Deere products, are also offered according to local market demand. The
agricultural stores also sell used equipment, generally acquired as trade-ins.

         The agricultural equipment stores are located in areas with significant
concentrations of farmers and typically serve customers within a 25 to 50 mile
radius. Each store displays a broad array of new and used equipment and has
fully-equipped service bays to provide on-site service and maintenance of
agricultural equipment.

         The Company also conducts agricultural equipment rental operations in
Arizona and California. The Company believes the agricultural equipment rental
business is a growing trend being driven primarily by agricultural customers
that are increasingly outsourcing their equipment needs. Outsourcing allows
producers to reduce their investment in non-core assets and to convert equipment
costs from fixed to variable, especially in the western, southwestern and south
central regions of the United States.

TRUCK OPERATIONS

         The Company estimates that United States retail sales of heavy-duty
trucks in calendar 2002 exceeded $8 billion. Mack Trucks, Inc. ("Mack") and
Volvo AB ("Volvo") are leading suppliers of heavy-duty trucks in North America.
The Company believes Mack has approximately 123 dealers that operate
approximately 254 locations in the United States, while Volvo has approximately
134 dealers that operate approximately 240 locations in the United States. Each
Mack or Volvo truck dealer is assigned designated geographical areas of
responsibility within which it has the right to sell new trucks made by the
truck manufacturer.

         The Company currently operates truck centers in Fargo and Grand Forks,
North Dakota that sell and service Mack, Volvo, GMC and Isuzu trucks. The
Company's truck centers are located in high truck traffic areas on or near major
highways.

         The Company sells light, medium and heavy-duty trucks. The medium and
heavy-duty trucks sold by the Company are generally classified as Class 4
through Class 8 by the American Automobile


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Manufacturers Association. Class 8 trucks have a minimum gross vehicle weight
rating above 33,000 pounds, and are primarily used for over-the-road and
off-highway transportation of general freight and various vocational
applications including the hauling of construction materials, logging, mining,
petroleum, refuse, waste and other specialty uses. Customers generally purchase
these trucks for commercial purposes that are outfitted to perform according to
the user's specifications.

         The Company's truck centers display a broad array of new and used
trucks and have fully-equipped service bays to provide on-site service and
maintenance of trucks.

MATERIAL HANDLING EQUIPMENT OPERATIONS

         The Company estimates that North American retail sales of lift trucks
in its target product market in calendar 2002 totaled approximately $7 billion.
Hyster Company, part of the material-handling group of NACCO Industries, Inc.,
("Hyster") is a leading supplier of lift trucks in North America. The Company
believes Hyster has approximately 54 geographic sales territories with
approximately 230 stores in North America. Each Hyster dealer is assigned
designated geographical areas of responsibility within which it has the right to
sell new Hyster lift trucks and parts. The Company is the designated Hyster lift
truck dealer for the upper Midwest - Minnesota, Nebraska, North Dakota, South
Dakota, western Iowa and northwestern Wisconsin.

         Hyster lift trucks (also referred to as forklift trucks or forklifts)
are used in a wide variety of business applications, including manufacturing and
warehousing. The principal categories of lift trucks include electric rider,
electric narrow-aisle and electric-motorized hand forklift trucks primarily for
indoor use and internal combustion engine forklift trucks for indoor or outdoor
use.

         The Company currently conducts its material handling operations from
two locations dedicated solely to material handling equipment. The remaining
authorized territories are serviced by several of the Company's agricultural and
construction equipment stores in Minnesota and North Dakota. These stores
display a variety of equipment for sale or rent, and have fully-equipped service
bays to provide on-site service and maintenance. Full service trucks also
provide mobile service to customers on site at their businesses. Customers
include commercial, manufacturing, trucking and warehousing businesses, some of
which have fleets of material handling equipment to maintain.

USED EQUIPMENT AND TRUCKS

         The Company believes that an integral part of its operations is the
handling of used equipment and trucks. Accordingly, each of the Company's
divisions has established a management team to assist in the valuation and sale
of used products that the Company receives in trade and assist in the purchase
of used products for sale or rent by its dealerships. These activities include
the purchase and remarket on the open market of used equipment manufactured by
companies other than Deere such as Caterpillar Inc. ("Caterpillar"), Komatsu
Corporation ("Komatsu"), CNH Global N.V. ("CNH") and Volvo.

PARTS AND SERVICE

         The Company's stores offer a broad range of replacement parts and fully
equipped service and repair facilities for their respective product lines. The
Company believes that product support through parts and service is increasingly
important to its ability to attract and retain customers for its operations.
Each store includes service bays staffed by highly trained service technicians.
Technicians are also available to make on-site repairs of equipment that cannot
be brought in for service. The Company's service


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technicians receive training from Deere and certain other suppliers, as well as
additional on-site training conducted by the Company. The construction equipment
stores located in Dallas and San Antonio, Texas; Riverside, California and
Minneapolis, Minnesota also operate undercarriage shops for all makes and sizes
of crawler equipment.

FINANCIAL SERVICES

         The Company facilitates the sale and/or lease of equipment and trucks
by providing on site finance professionals to assist in completing transactions.
The Company has developed a private label financing/leasing program with
CitiCapital Commercial Corporation ("CitiCapital"). Under the program the
Company markets financial services which are provided by CitiCapital. The
Company has also developed relationships with other vendors of financial
products which include loans, leases, extended warranties, credit life insurance
and casualty insurance, which are sold to the Company's customers.

         The Company believes there is a growing trend in the equipment and
truck distribution business toward selling new and used products with financing
and service contracts. In addition, financing incentives are an important
element in the Company's selling efforts. Many customers want to purchase
products from retailers who can also provide financing and other products and
services of the types being offered by the Company.

INVENTORY AND ASSET MANAGEMENT

         The Company maintains substantial inventories of equipment, trucks and
parts in order to facilitate sales to customers on a timely basis. The Company
also is required to build its inventory of construction and agricultural
equipment and parts in advance of its second and third fiscal quarters, which
historically have higher sales, to ensure that it will have sufficient inventory
available to meet the needs of its construction and agricultural customers and
to avoid shortages or delays.

         The Company maintains a database on sales and inventory, and has a
centralized real-time inventory control system. This system enables each store
to access the available inventory of the Company's other stores before ordering
additional items from the supplier. As a result, the Company minimizes its
investment in inventory while effectively and promptly satisfying its customers'
needs. Using this system, the Company also monitors inventory levels and mix in
its network and at each store and makes adjustments as needed in accordance with
its operating plan.

INVENTORY FINANCING

         Having adequate equipment, truck and parts inventories at each of the
Company's stores is important to meeting its customer needs and to its sales.
Accordingly, the Company attempts to maintain at each store, or have readily
available at other stores in its network, sufficient inventory to satisfy
anticipated customer needs. Inventory levels fluctuate throughout the year and
tend to increase before the primary sales seasons for construction and
agricultural equipment. The cost of financing its inventory is an important
factor affecting the Company's results of operations.

         Floor plan financing from Deere and Deere Credit Services, Inc. ("Deere
Credit") represents the primary source of borrowing base financing for equipment
inventories, particularly for equipment supplied by Deere. The Company also has
a borrowing base credit facility for financing of equipment inventories with
CitiCapital. Floor plan financing of truck inventories is primarily supplied by
General Motors Acceptance Corporation ("GMAC"). Operating and capital leases,
primarily provided by GE Commercial


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Distribution Finance Corporation ("CDF") and Deere Credit, are used to finance
some rental equipment. All lenders generally receive a security interest in the
inventory or rental equipment being financed.

CUSTOMER FINANCING OPTIONS

         Financing options for customer purchases support the sales activities
of the Company. Financing for purchases by the Company's customers are available
through the Company's private label financing/leasing program provided by
CitiCapital, by manufacturer-sponsored sources (such as Deere Credit) and by
major finance companies. The Company's finance subsidiary coordinates
arrangements for most of the Company's customers who request financing. The
Company does not grant extended payment terms.

PRODUCT WARRANTIES

         The manufacturer generally provides warranties for new products and
parts. The term and scope of these warranties vary greatly by manufacturer and
product. The manufacturer (such as Deere) pays the Company for repairs to
equipment under warranty. The Company generally sells used products "as is" and
without manufacturer's warranty, although manufacturers sometimes provide
limited warranties if the manufacturer's original warranty is transferable and
has not yet expired. The Company also sells warranty products offered by third
parties on new and used equipment. The Company itself has not generally provided
additional warranties.

COMPETITION

         The Company's construction equipment stores compete with distributors
of equipment produced by manufacturers other than Deere, including Caterpillar,
CNH and Komatsu. The Company also faces competition from distributors of
manufacturers of specific types of construction equipment, including JCB
backhoes, Kobelco excavators, and Bobcat skid loaders. The Company's
agricultural equipment stores compete with distributors of equipment from
suppliers other than Deere, including AGCO Corporation, Caterpillar and CNH. The
Company's agricultural equipment stores also compete with other Deere
agricultural dealerships that may be located in close proximity to the Company's
agricultural equipment stores.

         The Company's equipment rental operations compete with equipment rental
companies and dealers. Equipment rental businesses generally make available for
short-term rent used equipment manufactured by the foregoing manufacturers,
including those who are suppliers to the Company.

         The Company's truck centers compete with distributors of trucks
produced by manufacturers other than Mack and Volvo, including Daimler Chrysler
AG (Freightliner and Sterling), Ford Motor Co., Navistar International Corp. and
Paccar Inc. (Peterbilt and Kenworth).

         The Company's material handling stores compete with distributors of
lift trucks produced by manufacturers other than Hyster. Competing manufacturers
include Clark Material Handling Company, Crown Equipment Corporation, Nissan
Motor Co., Toyota Motor Corp., another division of the NACCO material handling
group (Yale), and equipment rental companies that rent aerial and high-reach man
lifts, lift trucks and other material handling equipment.

         Competition among equipment and truck retailers is primarily based on
price, value, reputation, quality, design and performance of the products
offered by the retailer, the customer service and product servicing provided by
the retailer, and the accessibility of the retailer's stores. The Company
believes that


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its store locations, broad product lines, quality products, product support and
other customer and financial services enable it to compete effectively.

BACKLOG

         In the current economic environment affecting all of the Company's
operating segments, all equipment and trucks are readily available from the
Company's manufacturers and currently there is no backlog of orders which will
not be filled in fiscal 2004.

AGREEMENTS WITH MANUFACTURERS

         DEERE CONSTRUCTION DEALER AGREEMENTS. The Company has agreements with
Deere which authorize the Company to act as a dealer of Deere construction,
utility and forestry equipment (the "Construction Dealer Agreements"). The
Company's areas of responsibility for the sale of Deere construction equipment
are: (i) in the midwest: most of Minnesota, Montana, North Dakota and South
Dakota, and small portions of Iowa and Wyoming; (ii) in the southwest: Arizona
and part of southern California; and (iii) in south central: central Texas,
including the Austin, Dallas-Fort Worth and San Antonio metropolitan areas.

         Pursuant to the Construction Dealer Agreements, the Company is
required, among other things, to maintain suitable facilities, provide competent
management, actively promote the sale of construction equipment in the
designated areas of responsibility, fulfill the warranty obligations of Deere,
maintain inventory in proportion to the sales potential in each area of
responsibility, provide service and maintain sufficient parts inventory to
service the needs of its customers, maintain adequate working capital and
maintain stores only in authorized locations. Deere is obligated to make
available to the Company any finance plans, lease plans, floor plans, parts
return programs, sales or incentive programs or similar plans or programs it
offers to other dealers. Deere also provides the Company with promotional items
and marketing materials prepared by Deere for its construction equipment
dealers. The Construction Dealer Agreements also entitle the Company to use John
Deere trademarks and tradenames, with certain restrictions.

         In addition to the Deere Construction Dealer Agreements, the Company
also has dealer agreements with Hitachi Construction Machinery (America)
Corporation ("Hitachi") for similar territories of the midwest and southern
California that the Company represents Deere. Hitachi is a joint venture partner
with Deere and generally offers products which complement Deere including large
excavators, shovels and rigid frame mining trucks.

         DEERE AGRICULTURAL DEALER AGREEMENTS. The Company has non-exclusive
dealership agreements with Deere for each of its Deere agricultural equipment
stores, each of which authorizes the Company to act as a dealer in Deere
agricultural equipment (the "Agricultural Dealer Agreements") at a specific
authorized store location. The terms of the Agricultural Dealer Agreements are
substantially the same as the Construction Dealer Agreements. The Deere
agricultural equipment stores also offer John Deere lawn and grounds equipment,
for which the Company has entered into non-exclusive Lawn and Garden Dealer
Agreements containing substantially the same terms as the Agricultural Dealer
Agreements.

         DEERE DEALERSHIP AGREEMENTS - OTHER PROVISIONS. The Company operates
its Deere construction and agricultural stores pursuant to its agreements with
Deere, including Deere's customary construction or agricultural dealership
agreements for each of the Company's construction areas of responsibility and
agricultural store locations. These agreements impose a number of restrictions
and


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obligations on the Company with respect to its operations, including a
prohibition on carrying construction products which are competitive with Deere
products, and an obligation to maintain suitable facilities. In addition, the
Company must provide competent management, actively promote the sale of Deere
equipment in the Company's designated areas of responsibility, fulfill the
warranty obligations of Deere, provide service and maintain sufficient parts
inventory to service the needs of its customers. The Company must also maintain
inventory in proportion to the sales potential in each of the Company's
designated areas of responsibility, maintain adequate working capital and
maintain stores only in authorized locations. Under an agreement with Deere, the
Company cannot engage in discussions to acquire other Deere dealerships without
Deere's prior written consent, which Deere may withhold in its sole discretion.
There can be no assurance that any such consent will be given by Deere. In
addition, Deere has the right to have input into the selection of the Company's
management personnel, including managers of the Company's Deere equipment
stores, and to have input with respect to the selection of nominees to the
Company's Board of Directors and the removal of directors. The prior consent of
Deere is required for the opening of any Deere equipment store within the
Company's designated areas of responsibility and for the acquisition of any
other Deere dealership. With respect to the Company, the Company's Deere
construction equipment dealerships (construction operations) and the Company's
agricultural equipment dealerships (agricultural operations), a minimum
equity-to-asset ratio of 25% must be maintained. As of January 31, 2003, the
equity-to-asset ratio for the Company, construction operations and agricultural
operations were 44%, 42%, and 38%, respectively. The Company is prohibited from
paying any dividends and may not effect any stock repurchase, repay or discharge
its indebtedness for any subordinate loans, make any other distributions to
owners, make acquisitions or initiate new business without complying with
certain financial ratios related to minimum equity-to-assets levels and tangible
net worth ratios before and after such actions. In the event of the death of
Ronald D. Offutt, the Company's Chairman, Chief Executive Officer and principal
stockholder, Deere has the right to terminate the Company's dealer appointments
upon the occurrence of a "change of control."

         The Company's Deere dealer appointments are not exclusive. Deere could
appoint other dealers in close proximity to the Company's existing stores. Deere
can reduce the areas of responsibility assigned to the Company's construction
equipment dealerships upon 120 days prior written notice. In addition, the
dealer agreements can be amended at any time without the Company's consent, so
long as the same amendment is made to the dealer agreements of all other Deere
dealers. Deere also has the right to sell directly to federal, state or local
governments, as well as national accounts. To the extent Deere appoints other
dealers in the Company's markets, reduces the areas of responsibility relating
to the Company's construction equipment stores, or amends the dealer agreements
or directly sells substantial amounts of equipment to government entities and
national accounts, the Company's results of operations and financial condition
could be adversely affected.

         DEERE INDEMNIFICATION AGREEMENT. Some time after the Company's initial
public offering in January 1997, Deere advised the Company that it was requiring
Deere dealerships to sign an indemnification agreement before "going public".
Deere also informed the Company that it would not be willing to consider
possible future acquisitions of Deere dealerships by the Company unless and
until the Company signed such an agreement. After prolonged discussions and
negotiations, the Company signed an indemnification agreement in March 2000. In
general, this agreement provides that the Company will indemnify Deere (and its
directors, officers, employees and agents) from and against lawsuits and other
proceedings commenced by shareholders of the Company and by governmental
agencies arising from (a) the registration, listing, offer, sale, distribution
or resale of any security of the Company, (b) an untrue statement or omission,
whether actual or alleged, in connection with any security of the Company, or
(c) an allegation that Deere is a "controlling person" of the Company within the
meaning of federal securities laws. The Company will pay, or reimburse Deere
for, any judgments, penalties, expenses and other losses


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resulting from any such lawsuit or other proceeding. The Company has no
obligation to indemnify Deere with respect to any judgment rendered against
Deere as a result of Deere's own intentional or reckless misconduct or as a
result of an untrue written statement of fact signed by an officer of Deere.

         RELEASE AND COVENANT NOT TO SUE. The Company signed a Release and
Covenant not to Sue agreement with John Deere Construction & Forestry Company
("JDCFC"). The agreement states the Company and Mr. Offutt, on behalf of
themselves, their successors and assigns, and on behalf of any person or entity
claiming by, through, or on behalf of any of them:

         1.       release and forever discharge JDCFC, its successors, and all
                  other persons or entities affiliated with JDCFC (the "Released
                  Parties"), from any and all claims the Company or Mr. Offutt
                  may have or which may arise in the future that relate to the
                  Market Potential Limitation (see part b. of "Certain Important
                  Factors", "Growth Through Acquisitions and Store Openings" of
                  this Form 10-K, for definition), including disapproval or
                  withholding of approval, by JDCFC, of an acquisition, merger,
                  or other transaction which would result in noncompliance with
                  the Market Potential Limitation; and

         2.       agree that they will not bring any legal proceeding or assist
                  any other person or entity in bringing any legal proceeding
                  against any Released Party based in whole or in part on any
                  claim released in the Release and Covenant Not to Sue.

         OTHER SUPPLIERS. The Company is an authorized dealer at various stores
for suppliers of other products. The terms of such arrangements vary, but most
of the dealership agreements contain termination provisions allowing the
supplier to terminate the agreement after a specified notice period (usually 180
days) upon a change of control and in the event of Mr. Offutt's death.

INTELLECTUAL PROPERTY RIGHTS

         RDO Equipment Co. is a registered service mark owned by the Company.
John Deere is a registered trademark of Deere & Company, the Company's use of
which is authorized under the Deere dealership agreements. Trademarks and
tradenames with respect to new equipment and trucks obtained from manufacturers
other than Deere are authorized under their respective dealership agreements.
The Company historically has operated each of its dealerships under either the
RDO Equipment Co. service mark and tradename or, for purposes of continuity at a
particular store if there was strong local name recognition and customer
loyalty, the name historically used by the dealership in that location. Each
dealership store is generally identified as an authorized dealer or
representative of the manufacturer or manufacturers of the equipment, trucks or
other products sold at the store, and may also display signs of other suppliers.

ENVIRONMENTAL AND GOVERNMENTAL REGULATIONS

         The Company's operations are subject to numerous federal, state and
local rules and regulations, including laws and regulations designed to regulate
workplace health and safety, to protect the environment and to regulate the
discharge of materials into the environment, primarily relating to its service
operations. Based on current laws and regulations, the Company believes that it
is in compliance with such laws and regulations and that its policies, practices
and procedures are designed to prevent unreasonable risk of environmental damage
or violation of environmental laws and regulations and any resulting material
financial liability to the Company. The Company is not aware of any federal,
state or local laws or regulations that have been enacted or adopted, the
compliance with which would have a material adverse


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effect on the Company's results of operations or would require the Company to
make any material capital expenditures. No assurance can be given that future
changes in such laws or regulations or changes in the nature of the Company's
operations or the effects of activities of prior occupants or activities at
neighboring facilities will not have an adverse impact on the Company's
operations.

         The Company's truck operations are subject to the National Traffic and
Motor Vehicle Safety Act, Federal Motor Vehicle Safety standards promulgated by
the U.S. Department of Transportation and various state motor vehicle regulatory
agencies. State and local laws and regulations require each truck dealership to
obtain licenses to operate as a dealer in heavy-duty vehicles. The Company
believes that its truck operations are in compliance with all federal, state and
local laws and regulations and that it has obtained all necessary licenses and
permits.

         The Company's financial services operations are subject to laws and
regulations with respect to financing, commercial finance regulations that may
be similar to consumer finance regulations in some states, including those
governing interest rates and charges, maximum amounts and maturities of credit
and customer disclosure of transaction terms. The Company's insurance products
and services are subject to laws and regulations with respect to insurance,
licensing, insurance premiums, financing rates and insurance agencies. The
Company believes that it is in compliance with these laws and regulations.

EMPLOYEES

         As of January 31, 2003, the Company employed 1,182 full-time employees.
Of this number, nine employees were located at the Company's corporate offices
and employed in corporate administration. A total of 75 employees were employed
in field support roles located in various offices. The remaining employees were
involved in the Company's operations: 650 in construction operations, 360 in
agriculture operations and 88 in truck operations. None of the Company's
employees are covered by a collective bargaining agreement. The Company believes
that its relations with its employees are good.

CERTAIN IMPORTANT FACTORS

         In addition to the matters discussed above or included from time to
time in filings with the Securities and Exchange Commission, there are important
factors that could cause the Company's future results to differ materially from
those anticipated or planned by the Company or which are reflected in any
forward-looking statement which may be made by or on behalf of the Company. Some
of these important factors (but not necessarily all important factors) include
the following:

         DEPENDENCE ON DEERE. The Company is an authorized dealer of Deere
construction and agricultural equipment, consumer products and parts in its
Deere designated areas of responsibility and store locations. A substantial
portion of the Company's new equipment sales represents sales of new equipment
supplied by Deere and a substantial portion of the Company's sales from parts
and service also are directly related to Deere equipment. The Company depends on
Deere for floor plan financing to finance a substantial portion of its
inventory. In addition, Deere provides a significant percentage of the financing
used by the Company's customers to purchase Deere equipment from the Company.
Deere also provides incentive programs and discounts from time to time, which
enable the Company to price its products more competitively. In addition, Deere
conducts promotional and marketing activities on national, regional and local
levels. The Company believes its success depends, in significant part, on: (i)
the overall success of Deere; (ii) the availability and terms of floor plan
financing and customer financing from Deere; (iii) the incentive and discount
programs provided by Deere and its promotional and marketing efforts for its
construction and agricultural products; (iv) the goodwill associated with Deere
trademarks;


                                       11
<PAGE>


(v) the introduction of new and innovative products by Deere; (vi) the
manufacture and delivery of competitively-priced, high-quality equipment and
parts by Deere in quantities sufficient to meet the requirements of the
Company's customers on a timely basis; and (vii) the quality, consistency and
management of the overall Deere dealership system. If Deere does not provide,
maintain or improve any of the foregoing, there could be a material adverse
effect on the Company's results of operations.

         DEERE TERMINATION RIGHTS. Under agreements with Deere, Deere has the
right to terminate the Company's dealer appointments immediately if Mr. Offutt
ceases to: (i) own or control a minimum percentage of the outstanding voting
power, 50 percent in relation to agricultural operations and 30 percent in
relation to construction operations, or whatever greater percentage is required
to control corporate actions that require a stockholder vote; and (ii) own
Common Stock representing a minimum percentage of the Company's shareholders'
equity, 35 percent in relation to agricultural operations and 30 percent in
relation to construction operations. Deere also has a right to terminate the
Company's dealer appointments in the event of Mr. Offutt's death; however, Deere
cannot exercise this right to terminate if at that time: (i) there is in place
an ownership succession plan approved by Deere; (ii) the Company and Deere have
identified events which would thereafter constitute changes of control of the
Company entitling Deere to terminate the dealer appointments; (iii) the Company
and each of its Deere stores are under continuing management acceptable to
Deere; (iv) there is no existing breach and no grounds for termination exist
with respect to any of the Company's agreements with Deere, including the
ownership requirements; and (v) Deere in its sole discretion has determined that
each of the Company's Deere areas of responsibility and store locations
justifies the continuation of the Deere appointment for such area or location.

         In the event of Mr. Offutt's death and change in control without
Deere's consent, Deere thereafter has the right to terminate the Company's
dealer appointments. A "change of control" is defined for these purposes as: (i)
the sale, lease, exchange or other transfer of substantially all of the
Company's assets; (ii) a merger, consolidation, reorganization or similar
transaction in which the Company's stockholders do not own more than 50 percent
of the voting power of the surviving entity (provided that if they own more than
50 percent but less than 80 percent of the voting power, the merger must be
approved by a majority of the directors who were directors at the time of Mr.
Offutt's death or subsequent directors whose election has been approved by
existing directors ("Continuity Directors")); (iii) a vote by the stockholders
to approve a transaction set forth in (i) or (ii), (iv) the acquisition by a
person other than Mr. Offutt or his heirs of 50 percent or more of the voting
power of the Company (20 percent if such acquisition has not been approved by a
majority of the Continuity Directors); (v) a change in the corporate executive
officers without Deere's approval; or (vi) if Continuity Directors cease to
constitute a majority of the Company's Board of Directors.

         In addition, Deere is entitled to terminate the Company's applicable
dealer appointments on one year's notice if the equity-to-assets ratio of the
Company, the Company's construction operations, or the Company's agricultural
operations, is below 25 percent as calculated by Deere based on the Company's
fiscal year end audited financial statements. The Company has a right to cure
such deficiency within 180 days of such fiscal year end.

         The Company's dealer appointments terminate immediately upon the
commencement of the dissolution or liquidation of the Company or a sale of a
substantial part of the business, change in the location of a dealership without
Deere's prior written consent, or a default under any security agreement with
Deere. The appointments also may be terminated upon the revocation or
discontinuance of any guaranty of Mr. Offutt or the Company to Deere, unless
replaced by a letter of credit acceptable to Deere.


                                       12
<PAGE>


         In addition, without regard to any subsequent attempts to cure, upon
one year's written notice Deere may terminate agricultural dealer appointments
for which the Company fails to submit acceptable business plans to Deere or to
make meaningful progress toward the objectives in the business plans. Also,
without regard to any subsequent attempts to cure, upon 180 days written notice,
JDCFC can terminate construction dealer appointments for which the Company fails
to make Meaningful Progress, as defined in the dealership agreement, with
respect to a Performance Criterion, as defined in the dealership agreement, in
any fiscal or calendar year. Deere can also terminate the Company's dealer
appointments for cause or if Deere determines there is not sufficient market
potential to support a dealership in a particular location or area of
responsibility, upon prior written notice to the Company of 180 days for
agricultural dealerships and one year's notice for construction dealerships.

         Any effort by Deere to terminate any of the Company's Deere dealer
appointments may be subject to various legal rights to which the Company is
entitled, including dealer protection statutes. Termination of certain or all of
the Company's Deere dealer appointments could have a material adverse effect on
the results of operations and financial condition of the Company. Any effort by
Deere to terminate any of the Company's Deere dealer appointments could also
have a material adverse effect on the results of operations and financial
condition of the Company whether or not the Company prevails in any resulting
lawsuit or other dispute resolution process.

         EFFECTS OF DOWNTURN IN GENERAL ECONOMIC CONDITIONS, CYCLICALITY,
SEASONALITY AND WEATHER. The Company's business, and particularly the sale of
new equipment and trucks, is dependent on a number of factors relating to
general economic conditions worldwide and locally. Such factors include
agricultural industry cycles, construction spending, federal, state and local
government spending on highways and other construction projects, federal
government spending on agricultural programs, housing starts, interest rate
fluctuations, fuel prices, economic recessions, customer business cycles, and
customer confidence in the economy. Accordingly, any general downward economic
pressures, or adverse cyclical trends may materially and adversely affect the
Company's financial condition and results of operations.

         The ability to finance affordable purchases, of which the interest rate
charged is a significant component, is an important part of a customer's
decision to purchase equipment or a truck. Interest rate increases may make
equipment and truck purchases less affordable for customers and, as a result,
the Company's revenues and profitability may decrease. To the extent the Company
cannot pass on to its customers the increased costs of its own inventory
financing resulting from increased interest rates, its net income also may
decrease. Similarly, the number of housing starts is especially important to
sales of construction equipment, and fuel prices can significantly affect truck
operations. As a result of the foregoing, the Company's results of operations
have fluctuated in the past and are expected to fluctuate in the future.

         The Company generally experiences lower revenue levels during the first
and fourth quarters of each fiscal year due to the crop growing season, winter
weather conditions in the midwest, and a general slowdown in construction
activity at the end of the calendar year. Typically, farmers purchase
agricultural equipment immediately prior to planting or harvesting crops, which
occurs during the Company's second and third fiscal quarters, especially in the
midwest. As a result, sales of agricultural equipment may be somewhat lower in
the first and fourth fiscal quarters. Winter weather in the midwest also limits
construction to some degree and, therefore, also typically results in lower
sales of construction equipment in the first and fourth fiscal quarters.

         The Company's results of operations have been and are expected to be
affected by weather. Climatic phenomena such as La Nina and El Nino, and severe
weather such as extreme cold and snowfall


                                       13
<PAGE>


in the winter and major flooding in the spring or summer, can adversely impact
the agricultural and construction industries. The results may include delayed
delivery and servicing of equipment or decreased demand for the Company's
products and services and a corresponding delay or loss in revenues. To the
extent adverse weather occurs, the Company's results of operations and financial
condition could be adversely affected.

         COMPETITION. The Company anticipates that its operations will continue
to face strong, and perhaps increasing, competition. Some of these competitors
may be larger and have substantially greater capital resources than the Company.
The Company's Deere stores also compete to a degree with other Deere
dealerships. Competition among distributors can be intense and is primarily
based on the price, value, reputation, quality and design of the products
offered by the dealer, the customer service and product support provided by the
dealer, and the accessibility of stores. Although the Company believes that it
is competitive in all of these categories, there can be no assurance that the
Company will remain competitive in general or in any particular area in which
the Company has operations. To the extent competitors of the Company's suppliers
provide their distributors with more innovative and/or higher quality products,
better pricing or more favorable customer financing, or have more effective
marketing efforts, the Company's ability to compete and its financial condition
and results of operations could be adversely affected. In addition, to the
extent products sold by the Company are not as competitive or in demand as those
of suppliers not used by the Company, the Company's results of operations could
be adversely affected.

         Worldwide economic conditions can impact competition in the geographic
areas where the Company does business. For example, a downturn in the economies
of foreign countries could result in an increased supply of equipment in U.S.
markets with a corresponding increase in competitive pressures such as lower
equipment prices. To the extent the Company experiences increased competition,
the Company's results of operations and financial condition could be adversely
affected.

         AVAILABLE FINANCING FOR CUSTOMERS. The sale of equipment, trucks and
parts requires the availability of financing for customers. The Company has
established multiple sources of financing for the customer, including
manufacturer-sponsored finance companies (e.g., Deere Credit) and major
independent finance companies (e.g., CitiCapital). To the extent such financing
cannot be obtained on reasonable terms, the Company's revenues and results of
operations could be adversely affected.

         SUBSTANTIAL INVENTORY FINANCING REQUIREMENTS, AND LENDING INDUSTRY
CHANGES. The sale of equipment, trucks and parts requires substantial
inventories to be maintained in order to facilitate sales to customers on a
timely basis. As the Company grows, whether through acquisitions, opening new
stores or internal growth, its inventory requirements will increase and, as a
result, the Company's financing requirements also will increase. In the event
that the Company's available financing sources are not sufficient to satisfy its
future requirements, the Company would be required to obtain additional
financing from other sources. While the Company believes that it could obtain
additional financing or alternative financing if required, there can be no
assurance that such financing could be obtained on commercially reasonable
terms. To the extent such additional financing cannot be obtained on
commercially reasonable terms, the Company's growth and results of operations
could be adversely affected. In addition, consolidation among key lenders to the
equipment industry and changes in such lenders policies could adversely affect
the availability and pricing of funding for the Company's inventory financing
needs.

         DEPENDENCE UPON KEY PERSONNEL. The Company believes its success depends
upon the continued services of Mr. Offutt. The loss of Mr. Offutt could
materially and adversely affect the Company. The Company does not maintain key
person life insurance on Mr. Offutt.


                                       14
<PAGE>


         DEPENDENCE ON INFORMATION TECHNOLOGY SYSTEMS. The ability to monitor
and control operations depends to a large extent on the proper functioning of
information technology systems. Any disruption in these systems or the failure
of these systems to operate as expected could, depending on the magnitude and
duration of the problem, adversely affect the Company.

         GROWTH BY ACQUISITIONS AND STORE OPENINGS. The Company's ability to
grow through acquisitions of additional dealerships, stores or other businesses
is dependent upon many important factors. Some, but not necessarily all, of
these important factors are:

         a.       As discussed above, the Company cannot engage in discussions
                  to acquire other Deere dealerships without Deere's prior
                  written consent, which Deere can withhold in its sole
                  discretion. In addition, an acquisition of a Deere dealership
                  or the opening of a new Deere store requires Deere's consent.
                  From time to time since the Company's formation in 1968, Deere
                  has withheld its consent to acquisitions proposed by the
                  Company or by other Deere dealers expressing an interest in
                  being acquired by the Company. There can be no assurance that
                  Deere will approve any future acquisitions or store openings
                  proposed by the Company.

         b.       Deere has informed the Company there are limits to acceptable
                  ownership concentration of Deere dealerships. The current
                  restriction for consolidation of JDCFC dealerships with
                  respect to the Company is 9.9% of the total market potential
                  for Deere construction products in North America. Such market
                  potential is measured as of the 12-month period ended January
                  31, 1997, or such other limitation, but not less than 9.9%, as
                  determined by JDCFC in its sole discretion (Market Potential
                  Limitation). The Company believes Deere's current restriction
                  for consolidation by any one dealer of Deere agricultural
                  dealerships is two to three percent of Deere's market
                  potential in North America. Accordingly, there can be no
                  assurance that Deere will approve acquisitions or store
                  openings up to or beyond these levels.

         c.       The ability to grow the Company through acquisitions or store
                  openings is dependent upon (i) the availability of suitable
                  acquisition candidates at an acceptable cost, (ii) receiving
                  the manufacturer's approval of acquisitions as required or
                  appropriate, (iii) the Company's ability to compete
                  effectively for available acquisition candidates, and (iv) the
                  availability of capital to complete the acquisitions. There
                  can be no assurance the Company can overcome these factors to
                  complete future acquisitions or store openings.

         d.       The Company could face risks commonly encountered with growth
                  through acquisitions. These risks include incurring
                  significantly higher than anticipated capital expenditures and
                  operating expenses, and failing to assimilate the operations
                  and personnel of acquired dealerships. Related risks include
                  disrupting the Company's ongoing business, dissipating the
                  Company's management resources, failing to maintain uniform
                  standards, controls and policies, and impairing relationships
                  with employees and customers as a result of changes in
                  management. Realization of the full benefit of the Company's
                  strategies, operating model and systems as to an acquired
                  dealership may take several years. There can be no assurance
                  that the Company will be successful in overcoming these risks
                  or any other problems encountered with acquisitions. To the
                  extent the Company does not successfully avoid or overcome the
                  risks or problems related to acquisitions, the Company's
                  results of operations and financial condition could be
                  adversely affected. Acquisitions also could have a significant
                  impact on the Company's financial position and capital needs,
                  and could cause substantial fluctuations in the Company's
                  quarterly and yearly results of operations.


                                       15
<PAGE>


         e.       The Company has grown significantly in recent years and may
                  continue to grow through acquisitions, opening new stores and
                  internal growth. Management has expended, and may continue to
                  expend, significant time and effort in evaluating, completing
                  and integrating acquisitions, opening new stores, and
                  supporting internal growth. There can be no assurance that the
                  Company's systems, procedures and controls will be adequate to
                  support the Company's operations as they may expand. Any
                  future growth also will impose significant added
                  responsibilities on members of senior management, including
                  the need to identify, recruit and integrate new senior level
                  managers and executives. There can be no assurance that such
                  additional management will be identified and retained by the
                  Company. If the Company is unable to manage its growth
                  efficiently and effectively, or is unable to attract and
                  retain additional qualified management, there could be a
                  material adverse effect on the Company's financial condition
                  and results of operations.

RECENT DEVELOPMENTS

         On March 6, 2003, the Company received an updated letter from Mr.
Offutt, the Company's Chairman, Chief Executive Officer and President, proposing
to acquire at a purchase price of $6.01 per share all of the outstanding shares
of the Company's Class A Common Stock that Mr. Offutt does not currently own or
control ("Tender Offer"). This represented a substantial increase from the
$5.22-$5.66 per share price range originally proposed by Mr. Offutt in December
2002 and was the result of discussions and negotiations between Mr. Offutt and
the Special Committee of the Company's Board of Directors comprised of
non-management directors that was formed to review and evaluate the offer from
Mr. Offutt. On March 7, 2003, the Special Committee announced that it had
received an opinion, with customary assumptions and qualifications, from its
financial advisor, Houlihan Lokey Howard & Zukin, that Mr. Offutt's proposal to
acquire the outstanding Class A shares that he does not own or control for cash
consideration of $6.01 per share is fair, from a financial point of view, to the
Company's stockholders holding those other shares. Based upon this opinion and
the Special Committee's deliberations prior to March 7, 2003, the Committee also
announced that if Mr. Offutt formally commenced a tender offer as proposed, the
Special Committee intended to recommend that stockholders tender their shares,
assuming no material changes have occurred prior to the formal commencement of
Mr. Offutt's tender offer that would alter the views of the Committee or its
financial advisors.

         In his March 6, 2003 letter, Mr. Offutt reiterated that until RDO
Tender Co. formally commences a tender offer to the Company's stockholders, he
reserves the right, in his sole and absolute discretion, not to proceed with the
offer for any reason. Mr. Offutt beneficially owns 8,125,884 Class A shares
(assuming conversion of his 7,450,492 Class B shares into an equal number of
Class A shares), or approximately 63.5% of the outstanding shares of RDO
Equipment.

         On April 8, 2003, the Company announced that Mr. Offutt indicated to
the Company that he plans to cause RDO Tender Co., an acquisition entity Mr.
Offutt intends to form, to commence the proposed tender offer by filing tender
offer materials with the Securities and Exchange Commission and mailing such
materials to the Company's stockholders on or about April 28, 2003.

         THE FOREGOING FACTORS ARE NOT EXHAUSTIVE AND NEW FACTORS MAY EMERGE, OR
CHANGES TO THE FOREGOING FACTORS MAY OCCUR, WHICH WOULD IMPACT THE COMPANY'S
BUSINESS. THE COMPANY MAKES NO COMMITMENT TO REVISE FORWARD-LOOKING STATEMENTS,
OR TO DISCLOSE SUBSEQUENT FACTS, EVENTS OR CIRCUMSTANCES THAT MAY BEAR UPON
FORWARD-LOOKING STATEMENTS.


                                       16
<PAGE>


ITEM 2. PROPERTIES.

         As of the end of fiscal 2003, the Company owned the real estate for
seven of its stores and leased its executive offices and 21 stores from an
Offutt Entity (as defined in Item 4A. below). The Company also leased 17 stores
from unrelated third parties. Lease terms range from one to twelve years and
some leases include an option to purchase the leased property. The Company
believes that all of its facilities are in good operating condition.

         The Company's retail stores are located in the following states:

         -------------------------------------
         Arizona                             7
         California                          3
         Minnesota                           8
         Montana                             2
         Nebraska                            1
         North Dakota                       13
         South Dakota                        3
         Texas                               6
         Washington                          2
         -------------------------------------
         TOTAL LOCATIONS                    45
         =====================================

ITEM 3. LEGAL PROCEEDINGS.

         On March 31, 2003, one of the Company's stockholders filed a complaint
in the Delaware Court of Chancery purporting to commence a class action lawsuit
on behalf of the Company's public stockholders against the Company, Mr. Offutt
and each of the individual directors of the Company. The complaint was
encaptioned as SRZ TRADING, LLC V. RDO EQUIPMENT CO., ET AL (C.A. No. 20214-NC).
In general, the complaint alleges, among other things: (1) breaches of fiduciary
duty by each of the Company, Mr. Offutt and the members of the Company's Board
of Directors in connection with Mr. Offutt's contemplated Tender Offer; (2)
inadequate disclosure to minority stockholders of RDOE; and (3) that the
consideration offered is inadequate. Among other remedies, the complaint seeks
to enjoin the Tender Offer (and the follow-up merger) or, alternatively, damages
in an unspecified amount and rescission in the event the Tender Offer (and the
follow-up merger) occur. The Company and Mr. Offutt believe the complaint is
without merit and intend to vigorously defend against these claims.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.


                                       17
<PAGE>


ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT.

         The executive officers of the Company, their ages and offices held as
of March 31, 2003, are as follows:

NAME                           AGE        OFFICE
----                           ---        ------
Ronald D. Offutt               60         Chairman of the Board, Chief Executive
                                          Officer and President

Allan F. Knoll                 59         Secretary

Christi J. Offutt              33         Chief Operating Officer

Steven B. Dewald               42         Chief Financial Officer

Thomas K. Espel                44         Treasurer and Assistant Secretary


         RONALD D. OFFUTT is the Company's founder, President, Chairman, Chief
Executive Officer and principal stockholder. He has served as Chairman and Chief
Executive Officer since the Company's formation in 1968. He has served as the
Company's President since December 2000 and he served as a member of the
Company's Office of the Chairman from December 1998 to December 2000. Mr. Offutt
also serves as Chief Executive Officer and Chairman of the Board of R.D. Offutt
Company ("Offutt Co.") and other entities he owns, controls or manages
(collectively, "Offutt Entities"). The Offutt Entities are engaged in a variety
of businesses such as farming, food processing and auto dealerships, some of
which transact business with the Company. See Item 13 of this Form 10-K,
"Certain Relationships and Related Transactions." Mr. Offutt spent approximately
one-half of his time on the business of the Company during fiscal 2003. He is
Former Chairman of the Board of Regents of Concordia College of Moorhead and is
a graduate of Concordia College of Moorhead with a degree in Economics. Mr.
Offutt is the father of Christi J. Offutt, Chief Operating Officer.

         ALLAN F. KNOLL has served as Secretary and a director of the Company
since 1974. Mr. Knoll also served as a member of the Company's Office of the
Chairman from December 1998 to December 2000. He served as Chief Financial
Officer of the Company from 1974 through January 1999. Mr. Knoll also serves as
Chief Financial Officer and Secretary of Offutt Co., and serves as a director
and officer and is a beneficial stockholder of many of the Offutt Entities. Mr.
Knoll spent approximately twenty percent of his time on the business of the
Company during fiscal 2003. Mr. Knoll is a graduate of Moorhead State University
with degrees in Business Administration and Accounting.

         CHRISTI J. OFFUTT has served as Chief Operating Officer since January
2001. She previously served as Senior Vice President - Midwest Agriculture from
June 1999 to January 2001 and as Vice President - Strategic Planning from
December 1998 until June 1999, and as Legal Counsel of Offutt Co. from January
1997 until December 1998. Ms. Offutt is a graduate of University of Puget Sound
with degrees in politics and government and in business administration, and
received her law degree in May 1996 from Boston University. She is the daughter
of Ronald D. Offutt, Chairman and Chief Executive Officer.


                                       18
<PAGE>


         STEVEN B. DEWALD has served as Chief Financial Officer since July 2001.
He previously served as Senior Vice President - Director of Finance Construction
Division from January 2001 to July 2001. Mr. Dewald served as Senior Vice
President - RDO Financial Services Co. from its formation in December 1997 until
January 2001. Mr. Dewald also served as Director of Finance of Ag Capital
Company ("Ag Capital"). Prior to joining Ag Capital in 1996, he served as Chief
Financial Officer of Metropolitan Financial Corporation. Mr. Dewald began his
career with Ernst & Young focusing primarily in the financial services industry.
He is a graduate of Concordia College of Moorhead with a degree in accounting
and finance.

         THOMAS K. ESPEL has served as Treasurer and Assistant Secretary since
March 2000. Mr. Espel also served as Chief Financial Officer from February 1999
until July 2001. He previously served as Executive Vice President - Finance from
August 1998 until February 1999. Prior to joining the Company, he served as
manager of Ag Capital since its inception in 1989 and continues to serve as a
member of its board of directors. From 1981 through 1988, Mr. Espel held various
lending positions at St. Paul Bank for Cooperatives. He has a bachelor's degree
from the University of Illinois and a master's degree from Michigan State
University, both in Agricultural Economics - Finance.


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Class A Common Stock of RDO Equipment Co. is traded on the New York
Stock Exchange under the symbol "RDO". The quarterly high and low reported sales
prices on the New York Stock Exchange during the Company's two most recent
fiscal years were:

                    FIRST            SECOND            THIRD            FOURTH
                   QUARTER           QUARTER          QUARTER           QUARTER
FISCAL 2003
     High          $  4.73           $  6.10          $  5.23           $  5.18
     Low           $  3.52           $  4.25          $  3.90           $  3.96

FISCAL 2002
     High          $  4.05           $  3.45          $  3.50           $  3.67
     Low           $  2.80           $  3.05          $  1.92           $  2.30

         As of April 17, 2003, the Company had 248 record holders and
approximately 2,200 beneficial holders of its Class A Common Stock, and one
holder of its Class B Common Stock. The Company did not have any unregistered
sales of equity securities during fiscal 2003.

         The Company intends to retain the earnings of the Company to support
the Company's operations and to finance expansion and growth, and it does not
intend to pay cash dividends in the foreseeable future. Payment of dividends
rests within the discretion of the Board of Directors and will depend upon,
among other factors, the Company's earnings, capital requirements, financial
condition, and any dividend restrictions under its dealership and credit
agreements.


                                       19
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA.

         The data presented below have been derived from the Company's
Consolidated Financial Statements and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements and Notes
thereto included in this Annual Report on Form 10-K.

RDO EQUIPMENT CO. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                         FISCAL YEARS ENDED JANUARY 31,
------------------------------------------------------------------------------------------------------------------------
[in thousands, except store and per share data]       2003           2002           2001           2000           1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>            <C>            <C>            <C>            <C>
CONSOLIDATED INCOME STATEMENT DATA
Revenues:
         Equipment and truck sales                 $ 381,205      $ 386,888      $ 499,205      $ 515,634      $ 435,289
         Parts and service                           153,259        163,032        181,173        173,336        143,335
------------------------------------------------------------------------------------------------------------------------
                            Total revenues           534,464        549,920        680,378        688,970        578,624
Cost of revenues(1)                                  440,660        456,697        581,583        566,877        479,275
------------------------------------------------------------------------------------------------------------------------
Gross profit                                          93,804         93,223         98,795        122,093         99,349
Selling, general and administrative expenses(2)       87,558         91,321        106,918         97,431         81,682
Loss on sale, restructuring charges
         and asset impairment                             --             --         11,200             --          2,200
------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                6,246          1,902        (19,323)        24,662         15,467
Gain on sale of dealerships                              734             --             --            786             --
Interest expense, net                                 (1,883)        (5,952)       (11,961)       (13,719)       (12,427)
------------------------------------------------------------------------------------------------------------------------
Income (loss) before taxes                             5,097         (4,050)       (31,284)        11,729          3,040
Income tax provision (benefit)                         2,090         (1,620)       (12,733)         5,252          1,237
Minority interest                                         --             --             11            (60)           135
------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                  $   3,007      $  (2,430)     $ (18,562)     $   6,537      $   1,668
------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share - basic and diluted    $    0.23      $   (0.18)     $   (1.41)     $    0.50      $    0.13
------------------------------------------------------------------------------------------------------------------------

CONSOLIDATED SELECTED OPERATING DATA
Comparable store revenues increase (decrease)              2%            (8)%           (2)%           (2)%            5%
Stores open at beginning of year                          47             53             56             64             50
   Stores opened                                          --             --             --             --              6
   Stores acquired                                        --             --             --              5             10
   Stores consolidated/closed/sold                        (2)            (6)            (3)           (13)            (2)
------------------------------------------------------------------------------------------------------------------------
Stores open at end of year                                45             47             53             56             64
------------------------------------------------------------------------------------------------------------------------
Net purchases (sales) of rental equipment          $     906      $    (654)     $   2,118      $     485      $  19,769
Net purchases of property and equipment                3,283            888          2,357          3,409          5,132
Treasury stock purchases                               1,806            426             --             --             --
Depreciation and amortization                          4,541          6,003          7,465         12,950         10,506

As of January 31,
------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET DATA
Working capital                                    $  44,526      $  48,904      $  49,842      $  64,225      $  36,739
Inventories                                          125,048        128,504        169,090        217,556        208,368
Total assets                                         202,666        216,594        305,988        361,997        379,220
Floor plan/borrowing base payables(3)                 76,752         97,416        149,191        190,242        191,030
Total debt                                             8,488          4,969         20,417         26,604         55,533
Stockholders' equity                                  89,058         87,857         90,713        109,275        102,738
</TABLE>

(1) Fiscal 1999 included a $15 million inventory charge.

(2) In fiscal 2003, with the adoption of Statement of Financial Accounting
Standards No. 142, the Company ceased amortization of goodwill. See Note 2,
"Significant Accounting Policies", to the consolidated financial statements for
effects on comparability.

(3) Includes interest-bearing and noninterest-bearing liabilities incurred in
connection with inventory financing.


                                       20
<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

THE BUSINESS

         The Company specializes in the distribution, sale, service, rental and
finance of equipment and trucks to the agricultural, construction,
manufacturing, transportation and warehousing industries, as well as to public
service entities, government agencies and utilities. The Company's stores are
located in Arizona, California, Minnesota, Montana, Nebraska, North Dakota,
South Dakota, Texas and Washington. The Company's largest supplier is Deere.

         The Company generates its revenues from sales of new and used equipment
and trucks, sales of parts and service, rental of equipment, customer financing
and related products and services. In addition to outright sales of new and used
equipment, sales include equipment purchased under rent-to-purchase agreements.
Generally under such agreements, the customer is given a period of several
months to exercise the option to purchase the rented equipment and is allowed to
apply a portion of the rental payments to the purchase price. This
rent-to-purchase equipment is included in the Company's inventory until the
option is exercised and the equipment is purchased.

         The Company's highest gross margins as a percentage of revenues have
historically been generated from its parts and service revenues. One of the
Company's operating strategies is to increase the demand for parts and service
by establishing, and then increasing, the base of equipment and trucks held by
its customers. Due to product warranty time frames and usage patterns by
customers, there generally is a time lag between equipment and truck sales and
the generation of significant parts and service revenues from such sales. As a
result of this time lag, increases in parts and service revenues do not
necessarily coincide with increases in equipment and truck sales. In addition,
due to differences in gross margin percentages between equipment and truck sales
and parts and service revenues, gross margin percentages may increase during
periods of declining equipment and truck sales and decline when equipment and
truck sales are strong.

         Deere, a leading manufacturer and supplier of construction and
agricultural equipment, is the primary supplier of new products sold by the
Company. Sales of new Deere products accounted for approximately 48% of the
Company's sales in fiscal 2003 with no other supplier accounting for more than
10%. The Company's stores also offer complementary products from other
suppliers, used products, new and used parts, product servicing, product rental,
loans, leases and other related products and services.

         The Company generally experiences lower revenue levels during its first
and fourth quarters primarily due to the crop-growing season, winter weather
conditions in the midwest and a general slowdown in construction activity at the
end of the calendar year. See "Seasonality" below.

         Price increases by suppliers of the Company's products have not
historically had a significant impact on the Company's results of operations.
See "Effects of Inflation" below.

         The Company requires cash primarily for financing its inventories of
equipment, trucks and replacement parts, rental equipment, receivables and
capital expenditures, including acquisitions. Historically, the Company has met
these liquidity requirements primarily through cash flow generated from
operating activities, floor plan financing and borrowings under credit
agreements. See "Liquidity and Capital Resources" below.


                                       21
<PAGE>


         The Company was incorporated in April 1968 and re-incorporated in
Delaware in January 1997. The Company's executive offices are located at 2829
South University Drive, Fargo, North Dakota 58103. The Company's phone number is
(701) 297-4288. References to the Company in this Form 10-K include its
subsidiaries.

DEERE DEALERSHIP AGREEMENTS

         The Company operates its Deere construction and agricultural stores
pursuant to its agreements with Deere, including Deere's customary construction
or agricultural dealership agreements for each of the Company's construction
areas of responsibility and agricultural store locations. These agreements
impose a number of restrictions and obligations on the Company with respect to
its operations, including a prohibition on carrying construction products which
are competitive with Deere products, and an obligation to maintain suitable
facilities. In addition, the Company must provide competent management, actively
promote the sale of Deere equipment in the Company's designated areas of
responsibility, fulfill the warranty obligations of Deere, provide service and
maintain sufficient parts inventory to service the needs of its customers. The
Company must also maintain inventory in proportion to the sales potential in
each of the Company's designated areas of responsibility, maintain adequate
working capital and maintain stores only in authorized locations. Under an
agreement with Deere, the Company cannot engage in discussions to acquire other
Deere dealerships without Deere's prior written consent, which Deere may
withhold in its sole discretion. There can be no assurance that any such consent
will be given by Deere. In addition, Deere has the right to have input into the
selection of the Company's management personnel, including managers of the
Company's Deere equipment stores, and to have input with respect to the
selection of nominees to the Company's Board of Directors and the removal of
directors. The prior consent of Deere is required for the opening of any Deere
equipment store within the Company's designated areas of responsibility and for
the acquisition of any other Deere dealership. With respect to the Company, the
Company's Deere construction equipment dealerships (construction operations) and
the Company's agricultural equipment dealerships (agricultural operations), a
minimum equity-to-asset ratio of 25% must be maintained. As of January 31, 2003,
the equity-to-asset ratio for the Company, construction operations and
agricultural operations were 44%, 42%, and 38%, respectively. The Company is
prohibited from paying any dividends and may not effect any stock repurchase,
repay or discharge its indebtedness for any subordinate loans, make any other
distributions to owners, make acquisitions or initiate new business without
complying with certain financial ratios related to minimum equity-to-assets
levels and tangible net worth ratios before and after such actions. In the event
of the death of Mr. Offutt, the Company's Chairman and CEO, Deere has the right
to terminate the Company's dealer appointments upon the occurrence of a "change
of control."

         The Company's Deere dealer appointments are not exclusive. Deere could
appoint other dealers in close proximity to the Company's existing stores. Deere
can reduce the areas of responsibility assigned to the Company's construction
equipment dealerships upon 120 days prior written notice. In addition, the
dealer agreements can be amended at any time without the Company's consent, so
long as the same amendment is made to the dealer agreements of all other Deere
dealers. Deere also has the right to sell directly to federal, state or local
governments, as well as national accounts. To the extent Deere appoints other
dealers in the Company's markets, reduces the areas of responsibility relating
to the Company's construction equipment stores, or amends the dealer agreements
or directly sells substantial amounts of equipment to government entities and
national accounts, the Company's results of operations and financial condition
could be adversely affected.


                                       22
<PAGE>


DEERE INDEMNIFICATION AGREEMENT

         Some time after the Company's initial public offering in January 1997,
Deere advised the Company that it was requiring Deere dealerships to sign an
indemnification agreement before "going public". Deere also informed the Company
that it would not be willing to consider possible future acquisitions of Deere
dealerships by the Company unless and until the Company signed such an
agreement. After prolonged discussions and negotiations, the Company signed an
indemnification agreement in March 2000. In general, this agreement provides
that the Company will indemnify Deere (and its directors, officers, employees
and agents) from and against lawsuits and other proceedings commenced by
shareholders of the Company and by governmental agencies arising from (a) the
registration, listing, offer, sale, distribution or resale of any security of
the Company, (b) an untrue statement or omission, whether actual or alleged, in
connection with any security of the Company, or (c) an allegation that Deere is
a "controlling person" of the Company within the meaning of federal securities
laws. The Company will pay, or reimburse Deere for, any judgments, penalties,
expenses and other losses resulting from any such lawsuit or other proceeding.
The Company has no obligation to indemnify Deere with respect to any judgment
rendered against Deere as a result of Deere's own intentional or reckless
misconduct or as a result of an untrue written statement of fact signed by an
officer of Deere.

NEW ACCOUNTING PRONOUNCEMENTS

         On February 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets
("SFAS No. 142"). This statement addresses accounting and financial reporting
for goodwill and intangible assets. Under the new statement, goodwill and
intangible assets with indefinite lives are no longer amortized, but are subject
to impairment testing on at least an annual basis. Other than goodwill, the
Company does not have any intangible assets with indefinite lives or other
intangible assets. The effect of discontinuing goodwill amortization during
fiscal 2003 was to increase net income by approximately $612,000, or $0.05 per
share.

         Effective February 1, 2002, the Company also adopted SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. This standard broadens the presentation of
discontinued operations to include more disposal transactions, thus the
recognition of discontinued operations is expected to become more common under
this standard. This statement retains the requirements of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, to recognize impairments on property, plant and equipment, but
removes goodwill from its scope. The adoption of SFAS No. 144 had no impact on
the Company's consolidated financial statements. The Company's plan of
disposition of certain of its truck operations occurred prior to the
implementation requirement of SFAS No. 144.

         In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, Accounting for Asset Retirement Obligations, requiring the
recognition of a liability for an asset retirement obligation in the period in
which it is incurred. When the liability is initially recorded, the carrying
amount of the related long-lived asset is correspondingly increased. Over time,
the liability is accreted to its present value and the related capitalized
charge is depreciated over the useful life of the asset. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002. The Company believes
the adoption of the provisions of this statement will not have a material effect
on the Company's financial statements.

         In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability


                                       23
<PAGE>


Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). The provisions
of this statement are effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged. The
Company believes the adoption of the provisions of this statement will not have
a material effect on the Company's financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for Stock
Based Compensation - Transition and Disclosure - as Amendment to FAS 123. SFAS
No. 148 provides two additional transition methods for entities that adopt the
preferable fair value based method of accounting for stock based compensation.
In addition, the statement requires disclosure of comparable information for all
companies regardless of whether, when, or how an entity adopts the preferable,
fair value based method of accounting. These disclosures are now required for
interim periods in addition to the traditional annual disclosure. The amendments
to SFAS No. 123, which provides for additional transition methods, are effective
for periods beginning after December 15, 2002, although earlier application is
permitted. Certain disclosure amendments are required for financial statements
for fiscal years ending after December 15, 2002, and have been reflected in
these consolidated financial statements. The remaining amendments to the
disclosure requirements are required for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. The
Company adopted the disclosure provisions of this statement which had no impact
on the Company's financial statements.

         In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires that
upon issuance of a guarantee, a grantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 will be effective for any guarantees that are
issued or modified after December 31, 2002. The Company is reviewing the
requirements of this interpretation and expects the recognition of guarantees
will not have a material effect on the Company's financial statements. The
Company has adopted the disclosure provisions of this statement.

         In January 2003, the FASB issued FIN 46, Consolidation of Variable
Interest Entities - an Interpretation of ARB No. 51. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements, to entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The transitional disclosure
provisions of FIN 46 are effective for all financial statements issued after
January 31, 2003. The Company is reviewing the requirements of this
interpretation and expects that it will have no impact on the Company's
financial statements.

CRITICAL ACCOUNTING POLICIES

         The Company's discussion and analysis of its financial condition and
results of operations are based on the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these consolidated
financial statements requires the Company to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. There can be no assurance that actual
results will not differ from those estimates. The Company believes the following
accounting policies affect


                                       24
<PAGE>


its more significant judgments and estimates used in the preparation of its
consolidated financial statements.

         RECEIVABLES. Receivables are valued net of an allowance for doubtful
accounts to arrive at a net realizable amount. The Company estimates its
allowance for doubtful accounts considering a number of factors, including: (1)
historical experience, (2) aging of the accounts receivable and (3) specific
information obtained by the Company on the condition and the current
creditworthiness of its customers. If the financial conditions of the Company's
customers were to deteriorate and affect the ability of its customers to make
payments on their accounts, the Company may be required to increase its
allowance by recording additional bad debt expense. Likewise, should the
financial condition of these customers improve and result in payments or
settlements of previously reserved amounts, the Company may be required to
record a reduction in bad debt expense to reverse the recorded allowance.

         INVENTORIES. All inventories are valued at the lower of cost or market.
The specific identification method is used to determine cost for new and used
equipment and trucks. Cost is determined using the first-in, first-out method
for parts inventory. The Company utilizes recent sales information, third party
valuation guides and recent auction results as well as judgements of various
inventory managers within the Company to determine the net realizable value of
inventory. An allowance is provided when it is anticipated that cost will exceed
net realizable value.

         LONG-LIVED ASSETS. The Company's long-lived assets are stated at cost
and depreciated over estimated useful lives. The Company periodically reviews
its long-lived assets for impairment and assesses whether significant events or
changes in business circumstances indicate that the carrying value of the assets
may not be fully recoverable. An impairment loss is recognized when the carrying
amount of an asset exceeds the anticipated future undiscounted cash flows
expected to result from the use of the asset and its eventual disposition. The
amount of the impairment loss to be recorded, if any, is calculated by the
excess of the asset's carrying value over its fair value.

         GOODWILL. Goodwill is the excess of cost of an acquired entity over the
amounts assigned to assets acquired and liabilities assumed in a purchase of a
business combination. Prior to February 1, 2002, goodwill was amortized on a
straight-line basis over 30 years. Effective February 1, 2002, the Company
ceased amortization of goodwill balances. See discussion under "Recent
Accounting Pronouncements." Goodwill is tested for impairment on an annual basis
or at the time of a triggering event in accordance with the provisions of SFAS
No. 142. Fair values are estimated based on the Company's best estimate of the
expected present value of future cash flows compared with the corresponding
carrying value of the reporting unit, including goodwill. Currently, the Company
has identified three reporting units under the criteria set forth by SFAS No.
142. On February 1, 2002, goodwill was tested for impairment in this manner, and
the estimated fair value of the reporting units exceeded their carrying amounts,
indicating no impairment of goodwill. The Company performs its annual goodwill
impairment testing during its first quarter.

         DEFERRED TAX ASSETS AND LIABILITIES. Deferred tax assets and
liabilities are recognized for the future consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to reverse. The realization of the
Company's deferred tax assets is dependent upon the ability to generate
sufficient future taxable income which is believed to be more likely than not.
The Company anticipates future taxable income sufficient to realize the recorded
deferred tax assets. Future taxable income is


                                       25
<PAGE>


based on the Company's forecasts of operating results, and there can be no
assurance that such results will be achieved.

         REVENUE RECOGNITION. Revenue on equipment, truck and parts sales is
recognized upon delivery of product to customers. Rental and service revenue is
recognized at the time such services are provided. In addition to outright sales
of new and used equipment, certain rentals include rent-to-purchase option
agreements. Under such agreements, customers are given a period of several
months to exercise the option to purchase the rented equipment and may be
allowed to apply a portion of the rental payments to the purchase price. This
rent-to-purchase equipment is included in the Company's inventory until the
option is exercised and the equipment is purchased. Rental revenue is recognized
during the rental period of rent-to-purchase transactions and equipment sales
revenue is recognized when the purchase option is exercised.

GENERAL

         During fiscal 2003, the Company was affected by various economic
conditions in all operating segments. New farm legislation along with generally
favorable growing conditions in the Company's agricultural store regions,
resulted in increased farmer confidence and increased revenues in this operating
segment. The Company expects the general agricultural economic climate to remain
stable in fiscal 2004. Construction operations were affected by a general
slowdown in equipment purchasing by construction equipment contractors in the
Company's geographic areas of responsibility, especially in the Company's
southern regions. These conditions provided for increased competitive pressures
and a decline in unit market potential in the Company's operating regions. The
Company expects these competitive pressures to continue into fiscal 2004. The
Company's truck revenues continued to decline reflecting the sale of the
majority of the Company's truck operations at various times during the past two
years. Remaining truck store revenues increased 8.1 percent during fiscal 2003.

         The Company continued its previously announced stock repurchase program
and expanded the program, approving the repurchase of an additional five percent
of the outstanding shares of Class A Common Stock bringing the total authorized
to 15% of the outstanding shares of Class A Common Stock. At January 31, 2003,
the Company had repurchased 551,200 shares, or 9.6%, of the outstanding shares
of Class A Common Stock at a total cost of $2,232,000. On December 16, 2002,
after receiving a letter from Ronald D. Offutt, the Chairman of the Board of
Directors, Chief Executive Officer and majority stockholder of the Company,
expressing an interest in acquiring all of the shares of the Class A Common
Stock of the Company that Mr. Offutt does not currently own or control, the
Company ceased its repurchase program pending the outcome of this action.

         During the third quarter of fiscal 2003, the Company sold the assets of
its Riverside, California truck business realizing a gain on sale of $734,000.
The sale of the Riverside, California truck business completed the execution of
its plan established during the fourth quarter of fiscal 2001 to restructure
management and to divest the majority of its heavy-duty truck business,
retaining only the stores that are showing significant short-term earnings
potential and have generally been profitable through the years. These actions
allowed the Company to increase its focus on its traditional core business lines
of construction and agricultural equipment.

         In fiscal 2002, the Company purchased the remaining 8% minority
interest in Salinas Equipment Distributors, Inc. As part of the Company's plan
to divest itself of the majority of its heavy-duty truck business, the Company
completed transactions selling its truck center business located in Dallas, Fort
Worth, and Waco, Texas. The Company closed its Material Handling locations in
Grand Island and


                                       26
<PAGE>


Lincoln, Nebraska, and North Sioux City, South Dakota. These territories are
being serviced from the remaining locations in Eagan, Minnesota and Omaha,
Nebraska.

         The Company recognized charges to operations of $11.2 million in the
fourth quarter of fiscal 2001. The charges were primarily comprised of a loss on
the sale of the Company's Roseville, Minnesota truck business, asset impairments
of long-lived assets, such as property and equipment, leasehold improvements and
goodwill related to the Company's truck division. The charge also included
approximately $700,000 and $300,000 of severance costs and lease and other
obligations. There are no remaining accruals relating to severance, lease or
other obligations as of the January 31, 2003.

         Also in fiscal 2001, the Company purchased the remaining 15% minority
interest in Hall GMC, Inc. and Hall Truck Center, Inc., as well as approximately
3% of the minority interest in Salinas Equipment Distributors, Inc. The
Barnesville, Minnesota agricultural retail store was consolidated with the
Fargo, North Dakota agricultural operations.







                                       27
<PAGE>


RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain financial
data:

                                      FOR FISCAL YEARS ENDED JANUARY 31,
                                          2003       2002        2001
------------------------------------------------------------------------
REVENUE DATA (IN MILLIONS):
Total revenues                          $ 534.5    $ 549.9     $ 680.4
    Construction                           52.6%      53.6%       46.5%
    Agricultural                           35.5%      30.7%       25.1%
    Truck                                  11.9%      15.3%       27.5%
    Financial *                              --        0.4%        0.9%

Construction revenues                  $  281.0   $  294.9    $  316.6
    Equipment sales                        68.7%      68.8%       69.9%
    Parts and service                      31.3%      31.2%       30.1%

Agricultural revenues                  $  189.8   $  168.4    $  170.9
    Equipment sales                        74.8%      71.8%       74.0%
    Parts and service                      25.2%      28.2%       26.0%

Truck revenues                         $   63.7   $   84.3    $  187.1
    Truck sales                            72.6%      72.1%       77.9%
    Parts and service                      27.4%      27.9%       22.1%


STATEMENT OF OPERATIONS DATA (AS A PERCENTAGE OF REVENUES):

Revenues
    Equipment and truck sales              71.3%      70.4%       73.4%
    Parts and service                      28.7       29.6        26.6
------------------------------------------------------------------------
Total revenues                            100.0%     100.0%      100.0%
------------------------------------------------------------------------
Gross profit                               17.6%      17.0%       14.5%
Selling, general and
    administrative expenses                16.4       16.6        15.7
Loss on sale, restructuring charges
    and asset impairment                     --         --         1.6
------------------------------------------------------------------------
Operating income (loss)                     1.2        0.4        (2.8)
Gain on sale of dealerships                 0.1         --          --
Interest expense, net                       0.3        1.1         1.8
Provision for (benefit from) taxes          0.4       (0.3)       (1.9)
------------------------------------------------------------------------
Net income (loss)                           0.6%      (0.4)%      (2.7)%
------------------------------------------------------------------------

*  Due to the current size and function of financial services activities in
   fiscal 2003, the revenues from financial services operations are included in
   the operating segment that generated these revenues.


                                       28
<PAGE>


FISCAL YEAR ENDED JANUARY 31, 2003 COMPARED TO FISCAL YEAR ENDED JANUARY 31,
2002

NET INCOME (LOSS)

         The Company reported net income of $3.0 million, or $0.23 per share,
for fiscal 2003 compared to a net loss of $2.4 million, or $(0.18) per share,
for fiscal 2002.

REVENUES

         Total revenues of $534.5 million during fiscal 2003 were $15.4 million,
or 2.8%, lower than revenues of the previous fiscal year. Construction revenues,
which represent the largest segment of the Company, were $281.0 million for
fiscal 2003, a $13.9 million, or 4.7%, decrease compared to the prior year. This
decline was due to the current soft demand for construction equipment,
especially in the Company's southern regions. Agricultural revenues of $189.8
million for fiscal 2003 were $21.4 million, or 12.7%, higher than fiscal 2002.
The Company's agricultural dealerships are located in areas which experienced
favorable crop growing conditions, thus creating farmer optimism supporting
higher sales. Truck revenues of $63.7 million were down $20.6 million, or 24.4%,
compared to last fiscal year. The decrease in truck revenues reflects the sale
of the majority of the Company's truck operations at various times during the
past two years. Remaining truck store revenues increased $3.0 million, or 8.1%.
Financial services revenues were $2.3 million for fiscal 2002. Due to the
current size and function of financial services activities, current and future
revenues will be included in the operating segment that generated the financial
services revenues.

         Equipment and truck sales were $381.2 million during fiscal 2003, a
decrease of $5.7 million, or 1.5%, from fiscal 2002. Agricultural equipment
sales increased $21.0 million, or 17.4%, to $141.9 million. Offsetting the
agricultural sales increases were construction equipment sales which decreased
$9.8 million, or 4.8%, to $193.1 million and truck sales which decreased $14.6
million, or 24.0%, to $46.2 million.

         Parts and service revenues were $153.3 million in fiscal 2003,
representing a decrease of $9.7 million, or 6.0%, from the prior fiscal year.
Parts and service revenues from truck operations decreased approximately $6.0
million, or 25.5%, to $17.5 million. The decrease in truck parts and service
revenues was attributable to the sale of truck dealerships. Construction parts
and service revenues decreased approximately $4.1 million, or 4.5%, to $87.9
million. Agricultural parts and service revenues increased approximately
$400,000, or 0.8%, as sales increased to $47.9 million.

GROSS PROFIT

         Gross profit of $93.8 million for fiscal year 2003 increased $600,000
from last fiscal year. Total gross profit as a percentage of total revenues for
fiscal 2003 and 2002 was 17.6% and 17.0%, respectively. Although equipment and
truck sales dollars decreased during fiscal 2003 compared to fiscal 2002, gross
margin dollars for equipment and trucks for fiscal 2003 increased approximately
$3.1 million. Approximately $400,000 of the increase was attributable to the
discounting and settlement of a manufacturer-sponsored obligation that
originated in fiscal 1999 as part of the Company's acquisition of the Riverside
truck dealership. Parts and service gross margins were approximately $57.1
million, or 37.3% of revenues, and $59.6 million, or 36.6% of revenues, for
fiscal 2003 and 2002, respectively.


                                       29
<PAGE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative ("SG&A") expenses of $87.6 million
for fiscal year 2003 decreased $3.7 million from last fiscal year. Total SG&A
expenses as a percentage of total revenues for fiscal 2003 and 2002 were 16.4%
and 16.6%, respectively. Approximately $1.0 million of the decrease occurred as
a result of the discontinuance of amortization of goodwill in fiscal 2003. The
remaining reduction of SG&A costs is largely attributable to the restructuring
accomplished in the second half of fiscal 2002, the sale of the majority of the
Company's truck operations at various times during the past two years and
continuing cost controls. SG&A expenses are affected by the contribution of
revenues by business segment and by the mix of revenues within each business
segment. As a percentage of revenues, SG&A expenses are generally higher for
construction operations than for agricultural and truck operations, and lower
for equipment and truck sales than for parts and service revenues. The truck
dealership downsizing as previously discussed along with streamlining the
management structure and tight expense controls throughout the Company, were the
primary contributing factors to the decrease in fiscal 2003 SG&A expenses
compared to fiscal 2002.

INTEREST EXPENSE

         Interest expense for fiscal 2003 was $2.3 million, a decrease of $4.3
million, or 65.2%, from fiscal 2002. Lower levels of inventory and reductions in
interest rates were the contributing factors to the decrease in interest
expense.

INTEREST INCOME

         Interest income decreased approximately $300,000, or 42.9%, from fiscal
2003 to fiscal 2002. Interest income is primarily comprised of finance charges
from trade receivables.

GAIN ON SALE OF DEALERSHIPS

         During the third quarter of fiscal 2003, the Company sold the assets of
its Riverside, California truck business realizing a gain on sale of $734,000.

INCOME TAXES

         The estimated provision for income taxes as a percentage of pretax
income was 41.0% for fiscal 2003, compared to the estimated benefit from income
taxes as a percentage of pretax loss of 40.0% for fiscal 2002.


FISCAL YEAR ENDED JANUARY 31, 2002 COMPARED TO FISCAL YEAR ENDED JANUARY 31,
2001

NET LOSS

         The Company reported a net loss of $2.4 million, or $(0.18) per share
for fiscal 2002 compared to a net loss of $18.6 million, or $(1.41) per share
for fiscal 2001.


                                       30
<PAGE>


REVENUES

         Total revenues of $549.9 million during fiscal 2002 were $130.5
million, or 19.2%, lower than revenues of the previous fiscal year. Construction
revenues, which represent the largest segment of the Company, were $294.9
million during the year. A general slowdown in equipment purchasing by
construction contractors, especially in the Company's southern regions, resulted
in a $21.7 million, or 6.9%, decrease in revenue in the segment compared to the
prior year. Agricultural revenues of $168.4 million in fiscal 2002 were $2.5
million, or 1.5%, lower than in fiscal 2001. The challenging but relatively
stable economic conditions in the farm economy caused the slight revenue
decrease. Truck revenues of $84.3 million were down $102.8 million, or 54.9%,
compared to the previous year. The sale of the Roseville, Minnesota truck
dealership in January 2001 and the Texas truck dealerships in May 2001 accounted
for $82.4 million of the decrease. The remaining decline was attributable to the
depressed market demand for trucks. Financial services revenues decreased
approximately $3.5 million from fiscal 2001 to fiscal 2002. Lower loan and lease
originations due to lower construction and truck revenues contributed to the
decrease, as well as competition from low rate financing programs offered by
manufacturers.

         Equipment and truck sales were $386.9 million in fiscal 2002, a
decrease of $112.3 million, or 22.5%, from fiscal 2001. The sale of truck
dealerships caused $65.0 million of the change and depressed demand for trucks
resulted in an additional $19.9 million in sales reductions. Construction
equipment sales decreased $18.4 million, or 8.3% to $202.9 million and
agricultural equipment sales decreased $5.5 million, or 4.4%, to $120.9 million
due to the reasons stated previously.

         Parts and service revenues were $163.0 million in fiscal 2002,
representing a decrease of $18.2 million, or 10.0%, from the prior year. Parts
and service revenues from truck operations decreased approximately $17.9
million, or 43.2%, to $23.5 million. The decrease in truck parts and service
revenues was primarily due to the truck dealership sales. Construction parts and
service revenues decreased approximately $3.3 million, or 3.5%, to $92.0
million. Agricultural parts and service revenues increased approximately $3.0
million, or 6.7%, as sales increased from $44.5 million to $47.5 million.

GROSS PROFIT

         Gross profit for fiscal 2002 was approximately $93.2 million, or 17.0%
of total revenues, compared to $98.8 million, or 14.5% of total revenues in
fiscal 2001, a decrease of $5.6 million, or 5.7%. The Company experienced an
increase in gross profit as a percentage of total revenues due to increased
parts and service revenues as a percentage of the Company's total revenues. The
Company's gross margins are significantly higher from its parts and service
revenues than from equipment and truck sales. The Company's divestiture of
significant truck dealerships also contributed to the increase in gross profit
as a percentage of revenues. Revenues from construction and agricultural
operations provide the Company with higher gross margins than do truck
operations.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         SG&A expenses decreased $15.6 million, from $106.9 million for fiscal
2001 to $91.3 million for fiscal 2002. Total SG&A expenses as a percentage of
total revenues for fiscal 2002 and 2001 were 16.6% and 15.7%, respectively. SG&A
expenses are affected by the contribution of revenues by business segment and by
the mix of revenues within each business segment. As a percentage of revenues,
SG&A expenses are generally higher for construction operations than for
agricultural and truck operations, and lower for equipment and truck sales than
for parts and service revenues. A primary contributing factor to the decrease in
SG&A expenses was the sale of truck dealerships. The Company's efforts to
streamline


                                       31
<PAGE>


the management structure also contributed to a reduction in the SG&A expenses.
However, the Company was experiencing revenue reductions that were out-pacing
SG&A expense reduction efforts, thus SG&A expenses as a percentage of revenues
increased slightly.

INTEREST EXPENSE

         Interest expense decreased approximately $6.0 million, or 47.6%, from
$12.6 million for fiscal 2001 to $6.6 million for fiscal 2002. Interest expense
as a percentage of total revenues decreased from 1.9% for fiscal 2001 to 1.2%
for fiscal 2002. Lower levels of interest-bearing floor plan payables and
reductions in interest rates as well as the sale of truck dealerships were the
contributing factors to the decrease in interest expense.

INTEREST INCOME

         Interest income increased approximately $100,000, or 16.7%, from fiscal
2001 to fiscal 2002. Interest income is primarily comprised of finance charges
from trade receivables.

INCOME TAXES

         The estimated benefit from income taxes as a percentage of pretax loss
was 40.0% and 40.7% for fiscal 2002 and 2001, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         The Company requires cash primarily for financing its inventories of
equipment, trucks and replacement parts, rental equipment, receivables and
capital expenditures, including acquisitions and openings of additional retail
locations. Historically, the Company has met these liquidity requirements
primarily through cash flow generated from operating activities, floor plan
financing, and borrowings under credit agreements with Deere, Deere Credit, Ag
Capital, CDF, GMAC, Volvo Commercial Finance LLC The Americas ("Volvo Finance"),
CitiCapital and commercial banks.

         Deere and Deere Credit provide the primary source of financing for
equipment inventories, particularly for equipment supplied by Deere. The Deere
and Deere Credit financings are provided through two vehicles, the dealer
statement and a borrowing base revolving credit facility. The dealer statement
provides extended terms and varying interest-free periods, depending on the type
of equipment, to enable dealers to carry representative inventories of equipment
and to encourage the purchase of goods by dealers in advance of seasonal retail
demand. Down payments are not required and interest might not be charged for a
substantial part of the period for which inventories are financed. Often,
purchase discounts are available in lieu of interest-free periods. Variable
market rates of interest based on the prime rate are charged on balances
outstanding after any interest-free periods, which in the past have generally
been four to twelve months for agricultural equipment and four months for
construction equipment. These interest-free periods may be changed at Deere and
Deere Credit's discretion and may be longer depending on special financing
programs offered from time to time. Deere and Deere Credit also provide dealer
statement financing to dealers on used equipment accepted in trade and approved
equipment from other suppliers. The Deere Credit borrowing base revolving credit
facility provides financing for eligible equipment inventories (generally
equipment inventories not financed through the dealer statement) and
receivables. The Deere and Deere Credit financing sources have a combined
maximum outstanding


                                       32
<PAGE>


allowed of $125.0 million. The maximum outstanding allowed is reduced to $105.0
million beginning May 1, 2003. The total amount outstanding to Deere and Deere
Credit was $42.3 million at January 31, 2003.

         The Company also has a borrowing base credit facility with CitiCapital
to provide up to $30.0 million in financing for equipment inventories, with
variable rates of interest based on LIBOR. The total amount outstanding at
January 31, 2003 was $29.0 million.

         GMAC and Volvo Finance provide truck floor plan financing with variable
market rates of interest based on the prime rate or LIBOR rate. None of the
financing sources for trucks have a set credit limit.

         On January 31, 2003, the Company had unused credit commitments subject
to borrowing base requirements related to inventory and receivable financing and
operating lease financing of dedicated rental equipment of $92.3 million. The
Company had outstanding floor plan/borrowing base payables of approximately
$76.8 million, of which $44.1 million was interest-bearing as of January 31,
2003. The collateral of equipment and truck inventories along with eligible
receivables would support $30.4 million of additional borrowing at January 31,
2003. During fiscal 2003, 2002 and 2001, the average interest rate under
interest-bearing floor plan/borrowing base financing was approximately 5.15%,
7.13% and 8.82%, respectively.

         Currently, the Company has an unsecured bank line of credit totaling
$1,585,000 with a maturity date of July 1, 2003 and with a variable interest
rate based on the prime rate (4.25% at January 31, 2003). The Company had
approximately $20,000 of unused availability relating to this line of credit at
January 31, 2003. The average interest rates on the Company's lines of credit
during fiscal 2003, 2002 and 2001 were 5.06%, 7.04% and 9.03%, respectively.

         The Company believes it has sufficient credit availability from its
existing credit facilities and manufacturers to finance its current and future
operations. Various credit facilities are reviewed and renewed annually. As the
credit facilities approach maturity, the Company believes it will be able to
renew or extend these facilities, or replace these facilities with other
facilities. The Company believes cash from operations, available cash and
borrowing capacity will be sufficient to fund its planned internal capital
expenditures and other cash needs for fiscal 2004.

         The Company's financing agreements contain various covenants which,
among other matters, require the Company to maintain minimum financial ratios,
including earnings before interest and income taxes, as defined, and a minimum
level of tangible equity. The Company was in compliance with all covenants as of
January 31, 2003.




                                       33
<PAGE>


         The Company has various commitments relating to its operations. The
following is a summary of these commitments as of January 31, 2003.

               Contractual Obligations and Commercial Commitments
               --------------------------------------------------

<TABLE>
<CAPTION>
                                   Within                                                  Year 5
(Dollars in Thousands)             1 year       Year 2        Year 3         Year 4       or after       Total
---------------------------------------------------------------------------------------------------------------
<S>                              <C>           <C>           <C>           <C>           <C>           <C>
Inventory floor plan/
  borrowing base payables        $ 76,752      $     --      $     --      $     --      $     --      $ 76,752
Note payable/operating line         1,565            --            --            --            --         1,565
Long-term debt                      1,783         1,881         2,243           259           757         6,923
Operating leases and other          7,397         6,053         5,848         4,118        11,613        35,029
---------------------------------------------------------------------------------------------------------------
Total                            $ 87,497      $  7,934      $  8,091      $  4,377      $ 12,370      $120,269
===============================================================================================================
</TABLE>

         The Company's long-term debt is primarily related to a note payable
collateralized by certain property and equipment and to the financing of
dedicated rental assets and one dealership location facility. Operating lease
and other commitments are primarily related to operating leases for dealership
locations of $27.5 million, minimum repurchase guarantees of equipment of $5.7
million, and operating leases for dedicated rental assets of $1.2 million and
vehicles of $0.6 million.

         In addition to the above commitments, certain credit companies provide
direct customer financing (collateralized by customer owned equipment) and
credit accounts with recourse to the Company totaling $16.6 million and $1.3
million as of January 31, 2003, respectively. These commitments represent only a
small portion of the total related account balances (generally 5%); thus only
accruals and payments for probable losses are recognized until the recourse
(guarantee) expires. Credit risk represents the accounting loss that would be
recognized at the reporting date if the counter-parties failed to perform
completely as contracted. The credit risk amounts are equal to the recourse
(guaranteed) portion of the contractual amounts. These contracts related to
customer financing have various maturity dates over the next one to five years.

         Operating activities, including changes in inventories and related
floor plan payables, provided net cash of $20.4 million, $5.8 million and $10.6
million for fiscal 2003, 2002 and 2001, respectively. Net income plus
depreciation and amortization along with reduced levels of trade receivables and
inventories, partially offset by reduced levels of floor plan payables, were the
primary contributing factors to cash provided by operating activities for fiscal
2003. Reduced levels of trade receivables and inventories, partially offset by
reduced levels of floor plan payables, were the primary contributing factors to
cash provided by operating activities for fiscal 2002. The cash generated by
operating activities for fiscal 2001 primarily resulted from depreciation and
amortization and reduced inventory levels and trade receivables, partially
offset by reduced levels of payables, including floor plan payables.

         Cash used for investing activities in fiscal 2003 was $1.7 million
primarily related to purchases of rental equipment and purchases of property and
equipment, partially offset by the proceeds from the sale of the Riverside,
California truck dealership. Cash provided by investing activities was $2.0
million for fiscal 2002, which was primarily related to proceeds from the sale
of the Texas truck dealerships. Cash used for investing activities in fiscal
2001 was $3.2 million, primarily related to purchases of agricultural rental
equipment, purchases of property and equipment, the purchase of the remaining
15% minority interest in Hall GMC, Inc. and Hall Truck Center Inc. and the
purchase of approximately 3% of the minority interest in Salinas Equipment
Distributors, Inc.


                                       34
<PAGE>


         Cash used for financing activities amounted to $18.0 million, $14.6
million and $3.9 million for fiscal 2003, 2002 and 2001, respectively. Payments
on short-term notes payable and revolving credit facilities, payments on
long-term debt and repurchase of the Company's Common Stock, partially offset by
proceeds from the issuance of long-term debt, were the primary uses of cash in
fiscal 2003. The primary contributing factors for the use of cash in fiscal 2002
were payments of long-term debt and the Company's operating lines. Cash used for
financing activities in fiscal 2001 was primarily attributable to payment of
long-term debt and net payments of bank lines and short-term notes payable.

         During fiscal 2003, the Company continued its previously announced
stock repurchase program and expanded the program, approving the repurchase of
an additional five percent of the outstanding shares of Class A Common Stock
bringing the total authorized to 15% of the outstanding shares of Class A Common
Stock. At January 31, 2003, the Company had repurchased 551,200 shares, or 9.6%,
of the outstanding shares of Class A Common Stock at a total cost of $2,232,000.
On December 16, 2002, after receiving a letter from Ronald D. Offutt, the
Chairman of the Board of Directors, Chief Executive Officer and majority
stockholder of the Company, expressing an interest in acquiring all of the
shares of the Class A Common Stock of the Company that Mr. Offutt does not
currently own or control, the Company ceased its repurchase program pending the
outcome of this action.

EFFECTS OF INFLATION

         Inflation has not had a material impact upon operating results and the
Company does not expect it to have such an impact in the future. To date, in
those instances in which the Company has experienced cost increases, it has been
able to increase selling prices to offset such increases. There can be no
assurance, however, that the Company's business will not be affected by
inflation or that it can continue to increase its selling prices to offset
increased costs and remain competitive.

CYCLICALITY

         Sales of equipment and trucks, particularly new units, historically
have been cyclical, fluctuating with general economic cycles. During economic
downturns, equipment and truck retailers tend to experience similar periods of
decline and recession as the general economy. The impact of an economic downturn
on retailers is generally less than the impact on manufacturers due to the sale
of parts and service by retailers to maintain used equipment and trucks. The
Company believes that its businesses are influenced by worldwide and local
economic conditions (see "Safe Harbor Statement" below) and that its geographic
and business diversification will generally reduce the overall impact of
economic cycles on the Company's operations.

SEASONALITY

         The Company's agricultural operations, particularly in the Midwest,
generally experience a higher volume of equipment sales in the second and third
fiscal quarters due to the crop-growing season. Typically, farmers purchase
equipment prior to planting or harvesting crops. Winter weather conditions in
the Midwest limit equipment purchases during the Company's first and fourth
fiscal quarters. This seasonal effect can be diminished during periods of
significant and sustained weakness in the agricultural economy during which
farmers generally purchase less equipment.

         The Company's construction operations generally experience a higher
volume of equipment sales in the second and third fiscal quarters due to
favorable weather patterns, particularly in the Midwest. The general slowdown in
construction activity at the end of the calendar year influences the fourth
fiscal


                                       35
<PAGE>


quarter. Further, winter weather conditions in parts of the Southwest and South
Central also limit construction activity to some degree, typically resulting in
lower sales and rentals of construction equipment.

         If the Company acquires businesses in geographic areas other than where
it currently has operations, or disposes of certain businesses, it may be
affected more by the above mentioned or other seasonal and equipment buying
trends.

SAFE HARBOR STATEMENT

         This statement is made under the Private Securities Litigation Reform
Act of 1995. The future results of the Company, including results related to
forward-looking statements in this Report, involve a number of risks and
uncertainties. Important factors that will affect future results of the Company,
including factors that could cause actual results to differ materially from
those indicated by forward-looking statements, include, but may not be limited
to, those set forth under the caption "Certain Important Factors" in Item 1 of
this Form 10-K and in other filings with the Securities and Exchange Commission.
The important factors discussed in this Form 10-K include:

         o        Dependence on Deere

         o        Deere termination rights

         o        Effects of downturn in general economic conditions,
                  cyclicality, seasonality and weather

         o        Competition

         o        Available financing for customers

         o        Substantial inventory financing requirements and lending
                  industry changes

         o        Dependence on key personnel

         o        Growth by acquisition and store openings

         In general, the factors that will affect the Company, which are subject
to change, include: general economic conditions worldwide and locally; global
acts of terrorism; interest rates; housing starts; fuel prices; the factors that
affect the construction contractors' confidence and financial health including
construction demand, the amount of government sponsored projects and weather;
the many interrelated factors that affect farmers' confidence, including farm
cash income, farmer debt levels, credit availability, worldwide demand for
agricultural products, world grain stocks, commodity prices, weather, animal and
plant diseases, crop pests, harvest yields, real estate values and government
farm programs; legislation, primarily legislation relating to agriculture, the
environment, commerce, transportation and government spending on infrastructure;
climatic phenomena such as flooding, droughts, La Nina and El Nino; pricing,
product initiatives and other actions of competitors in the various industries
in which the Company competes, including manufacturers and retailers; the levels
of new and used inventories in these industries; the Company's relationships
with its suppliers; production difficulties, including capacity and supply
constraints experienced by the Company's suppliers; practices by the Company's
suppliers; changes in governmental regulations; labor shortages; employee
relations; currency exchange rates; availability, sufficiency and cost of
insurance; financing arrangements relating to the Company's financial services
operations, including credit availability and customer credit risks; dependence
upon the Company's suppliers; termination rights and other provisions which the
Company's suppliers have under dealer and other agreements; risks associated
with growth, expansion and acquisitions; the positions of the Company's
suppliers and other manufacturers with respect to publicly-traded dealers,
dealer consolidation and specific acquisition opportunities; the Company's
acquisition strategies and the integration and successful operation of acquired
businesses; capital needs and capital market conditions; operating and


                                       36
<PAGE>


financial systems to manage operations; dependence upon key personnel;
accounting standards; technological difficulties, especially involving the
Company's suppliers and other third parties which could cause the Company to be
unable to process customer orders, deliver products or services, or perform
other essential functions; developments with respect to Mr. Offutt's offer to
acquire outstanding publicly traded Class A common shares and other risks and
uncertainties. The Company's forward-looking statements are based upon
assumptions relating to these factors. These assumptions are sometimes based
upon estimates, data, communications and other information from suppliers,
government agencies and other sources, which are often revised. The Company
makes no commitment to revise forward-looking statements, or to disclose
subsequent facts, events or circumstances that may bear upon forward-looking
statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company is exposed to market risk from changes in interest rates.
Market risk is the potential loss arising from adverse changes in market rates
and prices such as interest rates. For fixed rate debt, interest rate changes
affect the fair value of financial instruments but do not impact earnings or
cash flows. Conversely for floating rate debt, interest rate changes generally
do not affect the fair market value but do impact future earnings and cash
flows, assuming other factors are held constant. During fiscal 2003, the Company
has renegotiated and/or signed several new credit facilities. Many of these
credit agreements are floating rate facilities now containing minimum rates of
interest to be charged. The Company has also entered into fixed rate financing
for certain rental equipment. Based upon balances and interest rates as of
January 31, 2003, a one percentage point fluctuation in interest rates would
result in a net change to unrealized market value of the Company's fixed rate
debt by approximately $62,000. Holding other variables constant, a one
percentage point increase in interest rates for the next twelve month period
would decrease pre-tax earnings and cash flow by approximately $280,000.
Conversely, a one percentage point decrease in interest rates for the next
twelve month period would result in an increase to pre-tax earnings and cash
flow of approximately $112,000. At January 31, 2003, the Company had variable
rate floor plan payables, notes payable and long-term debt of $47.4 million and
fixed rate notes payable and long-term debt of $5.2 million.

         The Company's policy is not to enter into derivatives or other
financial instruments for trading or speculative purposes.






                                       37
<PAGE>


ITEM 8A. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Statements of Operations                           39

         Consolidated Balance Sheets                                     40

         Consolidated Statements of Stockholders' Equity                 41

         Consolidated Statements of Cash Flows                           42

         Notes to Consolidated Financial Statements                      43

         Report of Independent Accountants                               63








                                       38
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                          FOR THE YEARS ENDED JANUARY 31,
-----------------------------------------------------------------------------------------------------------
[in thousands, except per share amounts]                                  2003         2002          2001
-----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>          <C>           <C>
REVENUES
            Equipment and truck sales                                  $ 381,205    $ 386,888     $ 499,205
            Parts and service                                            153,259      163,032       181,173
-----------------------------------------------------------------------------------------------------------
                      Total revenues                                     534,464      549,920       680,378
COST OF REVENUES
            Equipment and truck                                          344,512      353,298       464,454
            Parts and service                                             96,148      103,399       117,129
-----------------------------------------------------------------------------------------------------------
                      Total cost of revenues                             440,660      456,697       581,583
-----------------------------------------------------------------------------------------------------------
GROSS PROFIT                                                              93,804       93,223        98,795
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                              87,558       91,321       106,918
LOSS ON SALE, RESTRUCTURING CHARGES
            AND ASSET IMPAIRMENT (Note 3)                                     --           --        11,200
-----------------------------------------------------------------------------------------------------------
            Operating income (loss)                                        6,246        1,902       (19,323)
INTEREST EXPENSE                                                           2,331        6,649        12,578
INTEREST INCOME                                                              448          697           617
GAIN ON SALE OF DEALERSHIPS                                                  734           --            --
-----------------------------------------------------------------------------------------------------------
            Income (loss) before income taxes and minority interest        5,097       (4,050)      (31,284)
INCOME TAX PROVISION (BENEFIT)                                             2,090       (1,620)      (12,733)
-----------------------------------------------------------------------------------------------------------
            Income (loss) before minority interest                         3,007       (2,430)      (18,551)
MINORITY INTEREST                                                             --           --            11
-----------------------------------------------------------------------------------------------------------

NET INCOME (LOSS)                                                      $   3,007    $  (2,430)    $ (18,562)
-----------------------------------------------------------------------------------------------------------

            Basic and diluted net income (loss) per share              $    0.23    $   (0.18)    $   (1.41)
-----------------------------------------------------------------------------------------------------------
            Weighted average shares outstanding - basic                   12,750       13,160        13,182
            Weighted average shares outstanding - diluted                 12,802       13,160        13,182
-----------------------------------------------------------------------------------------------------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.





                                       39
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     AS OF JANUARY 31,
----------------------------------------------------------------------------------------
[in thousands]                                                      2003          2002
----------------------------------------------------------------------------------------
<S>                                                              <C>           <C>
ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                    $   1,497     $     852
    Accounts receivable, less allowance for
       doubtful accounts of $2,664 and $2,666                       23,738        26,726
    Income tax receivable                                              800         4,550
    Receivables from affiliates                                         83            38
    Inventories                                                    125,048       128,504
    Prepaid expenses                                                 1,828         1,417
    Assets held for sale                                                --         8,862
    Deferred income tax asset                                           --         5,310
----------------------------------------------------------------------------------------
       Total current assets                                        152,994       176,259
PROPERTY AND EQUIPMENT, NET                                         16,820        13,192
OTHER ASSETS:
    Goodwill                                                        24,322        24,322
    Deferred income tax asset                                        5,620           504
    Deposits and other                                               2,910         2,317
----------------------------------------------------------------------------------------
                    Total assets                                 $ 202,666     $ 216,594
----------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Floor plan/borrowing base payables                           $  76,752     $  97,416
    Notes payable                                                    1,565           975
    Current maturities of long-term debt                             1,783         2,612
    Accounts payable                                                 4,625         2,042
    Accrued liabilities                                             16,174        12,656
    Liabilities associated with assets held for sale                    --         6,356
    Customer advance deposits                                        5,389         5,298
    Deferred tax liability                                           2,180            --
----------------------------------------------------------------------------------------
       Total current liabilities                                   108,468       127,355

LONG-TERM DEBT, net of current maturities                            5,140         1,382
----------------------------------------------------------------------------------------
       Total liabilities                                           113,608       128,737
----------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY (Note 10):
   Preferred stock, par value $.01 per share; 500,000 shares
      authorized; no shares issued in fiscal 2003 and 2002              --            --
   Common stocks-
      Class A, par value $.01 per share; 20,000,000 shares
         authorized; 5,731,008 issued in fiscal 2003 and 2002           57            57
      Class B, par value $.01 per share; 7,500,000 shares
         authorized; 7,450,492 issued in fiscal 2003 and 2002           75            75
   Additional paid-in-capital                                       84,471        84,471
   Retained earnings                                                 6,687         3,680
   Treasury stock, at cost (551,200 and 148,000 Class A
      shares in fiscal 2003 and 2002, respectively)                 (2,232)         (426)
----------------------------------------------------------------------------------------
      Total stockholders' equity                                    89,058        87,857
----------------------------------------------------------------------------------------
      Total liabilities and stockholders' equity                 $ 202,666     $ 216,594
----------------------------------------------------------------------------------------
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       40
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           FOR THE YEARS ENDED JANUARY 31, 2003, 2002 AND 2001
------------------------------------------------------------------------------------------------------------------------------
                                             COMMON STOCK
                                        ----------------------
                                         CLASS A      CLASS B    TOTAL   ADDITIONAL             TREASURY STOCK
                                          SHARES       SHARES    COMMON   PAID-IN   RETAINED  ---------------------
[in thousands, except share amounts]      ISSUED       ISSUED    STOCK     CAPITAL  EARNINGS    SHARES     AMOUNT      TOTAL
------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>         <C>         <C>       <C>       <C>        <C>       <C>        <C>
BALANCE, JANUARY 31, 2000                5,731,008   7,450,492    132       84,471    24,672         --        --      109,275
Net loss                                        --          --     --           --   (18,562)        --        --      (18,562)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 31, 2001                5,731,008   7,450,492    132       84,471     6,110         --        --       90,713
Purchase of Class A common stock                --          --     --           --        --    148,000      (426)        (426)
Net loss                                        --          --     --           --    (2,430)        --        --       (2,430)
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 31, 2002                5,731,008   7,450,492    132       84,471     3,680    148,000      (426)      87,857
Purchase of Class A common stock                --          --     --           --        --    403,200    (1,806)      (1,806)
Net income                                      --          --     --           --     3,007         --        --        3,007
------------------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 31, 2003                5,731,008   7,450,492   $132      $84,471   $ 6,687    551,200   $(2,232)   $  89,058
------------------------------------------------------------------------------------------------------------------------------
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       41
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               FOR THE YEARS ENDED JANUARY 31,
--------------------------------------------------------------------------------------------------------------
[in thousands]                                                                 2003         2002         2001
--------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>          <C>          <C>
OPERATING ACTIVITIES
Net income (loss)                                                           $  3,007     $ (2,430)    $(18,562)
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
       Depreciation and amortization                                           4,541        6,003        7,465
       Deferred taxes                                                          2,374        3,586       (5,950)
       Minority interest                                                          --           --           11
       Gain on sale of dealerships                                              (734)          --           --
       Loss on sale, restructuring charges and asset impairment                   --           --       11,200
       Change in operating assets and liabilities:
           Accounts receivable                                                 8,480       20,685        5,790
           Inventories                                                        10,276       45,247       20,756
           Prepaid expenses                                                     (408)         122         (984)
           Deposits                                                              (98)        (333)        (236)
           Floor plan/borrowing base payables                                 (9,171)     (58,414)      (6,301)
           Accounts payable and accrued liabilities                            2,025       (8,785)      (5,002)
           Customer advance deposits                                              91           92        2,382
--------------------------------------------------------------------------------------------------------------
               Net cash provided by operating activities                      20,383        5,773       10,569
--------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Net sales (purchases) of rental equipment                                       (906)         654       (2,118)
Net purchases of property and equipment                                       (3,283)        (888)      (2,357)
Net assets of acquisitions                                                        --         (822)      (1,495)
Proceeds on sale of dealership                                                 2,847        3,248        2,687
Other, net                                                                      (394)        (143)          42
--------------------------------------------------------------------------------------------------------------
               Net cash (used for) provided by investing activities           (1,736)       2,049       (3,241)
--------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt                                       5,301           --           89
Payments on long-term debt                                                    (5,937)      (3,500)      (2,582)
Purchase of common stock                                                      (1,806)        (426)          --
Payment of dividends                                                              --         (731)          --
Net payments of short-term notes payable and revolving credit facilities     (15,560)      (9,948)      (1,407)
--------------------------------------------------------------------------------------------------------------
               Net cash used for financing activities                        (18,002)     (14,605)      (3,900)
--------------------------------------------------------------------------------------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 645       (6,783)       3,428
CASH AND CASH EQUIVALENTS, beginning of year                                     852        7,635        4,207
--------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of year                                      $  1,497     $    852     $  7,635
==============================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       42
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS:

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the results of RDO
Equipment Co., a C corporation and its wholly-owned subsidiaries, RDO
Construction Equipment Co., RDO Agriculture Equipment Co., RDO Truck Center Co.,
RDO Financial Services Co., RDO Material Handling Co., Hall GMC, Inc., Hall
Truck Center, Inc. and Salinas Equipment Distributors, Inc. Herein referred to
as "Company". All significant inter-company accounts and transactions have been
eliminated in consolidation.

BUSINESS

         As a specialty retailer, the Company distributes, sells, services,
rents and finances equipment and trucks to the agricultural, construction,
manufacturing, transportation and warehousing industries, as well as to public
service entities, government agencies and utilities. Accordingly, the Company's
results of operations can be significantly impacted by the general economic
health of these industries. The Company's stores are located in Arizona,
California, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Texas and
Washington.

         The Company's major supplier of new equipment and parts for sale is
Deere & Company ("Deere"). Revenues from new Deere equipment and parts accounted
for 48%, 45% and 36% of total revenues for fiscal years 2003, 2002 and 2001,
respectively with no other suppliers' products accounting for more than 10%.

         As discussed in Note 12, the Company has significant transactions with
related parties, primarily related to financing arrangements.

DEERE DEALERSHIP AGREEMENTS

         The Company has agreements with Deere, which authorize the Company to
act as an authorized dealer of Deere construction and agricultural equipment.
The dealer agreements continue until terminated by Deere or the Company in
accordance with the specified provisions.

         The Company is required to meet certain performance criteria and equity
ratios, maintain suitable facilities, actively promote the sale of Deere
equipment, fulfill warranty obligations and maintain stores only in the
authorized locations. Ronald D. Offutt, the Company's Chairman and CEO, is also
required to maintain certain voting control and ownership interests. The
agreements also contain certain provisions that must be complied with in order
to retain the Company's dealership agreements in the event of the death of
Ronald D. Offutt and a subsequent change in control, as defined. The Company was
in compliance with the terms of the Deere agreements at January 31, 2003.

         Deere is obligated to make floor plan and other financing programs
available to the Company that it offers to other dealers, provide promotional
and marketing materials, and authorize the Company to use Deere trademarks and
trade names.


                                       43
<PAGE>


RECENT DEVELOPMENTS (UNAUDITED)

         On March 6, 2003, the Company received an updated letter from Mr.
Offutt, the Company's Chairman, Chief Executive Officer and President, proposing
to acquire at a purchase price of $6.01 per share all of the outstanding shares
of the Company's Class A Common Stock that Mr. Offutt does not currently own or
control ("Tender Offer"). On March 7, 2003, the Special Committee announced that
it had received an opinion, with customary assumptions and qualifications, from
its financial advisor, Houlihan Lokey Howard & Zukin, that Mr. Offutt's proposal
to acquire the outstanding Class A shares that he does not own or control for
cash consideration of $6.01 per share is fair, from a financial point of view,
to the Company's stockholders holding those other shares. Based upon this
opinion and the Special Committee's deliberations prior to March 7, 2003, the
Committee also announced that if Mr. Offutt formally commenced a tender offer as
proposed, the Special Committee intended to recommend that stockholders tender
their shares, assuming no material changes have occurred prior to the formal
commencement of Mr. Offutt's tender offer that would alter the views of the
Committee or its financial advisors.

         On March 6, 2003, Mr. Offutt reiterated that until RDO Tender Co.
formally commences a tender offer to the Company's stockholders, he reserves the
right, in his sole and absolute discretion, not to proceed with the offer for
any reason. Mr. Offutt beneficially owns 8,125,884 Class A shares (assuming
conversion of his 7,450,492 Class B shares into an equal number of Class A
shares), or approximately 63.5% of the outstanding shares of RDO Equipment.

         On April 8, 2003, the Company announced that Mr. Offutt, indicated to
the Company that he plans to cause RDO Tender Co., an acquisition entity Mr.
Offutt intends to form, to commence the proposed tender offer by filing tender
offer materials with the Securities and Exchange Commission and mailing such
materials to the Company's stockholders on or about April 28, 2003.

2. SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. The actual
results could differ from those estimates.

CASH AND CASH EQUIVALENTS

         The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.

CONCENTRATION OF CREDIT RISK

         Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of temporary cash investments
in financial institutions in excess of federally insured limits and accounts
receivable. Temporary cash investments are held with financial institutions,
which the Company believes subject it to minimal risk. The Company monitors its
customers' financial condition to minimize its


                                       44
<PAGE>


risks associated with accounts receivable, but does not require collateral on
all receivables from its customers.

INVENTORIES

         All inventories are valued at the lower of cost or market. The specific
identification method is used to determine cost for new and used equipment and
trucks. The first-in, first-out method is used to determine cost for parts
inventory.

Inventories consisted of the following as of January 31:

(IN THOUSANDS)                                             2003           2002
--------------------------------------------------------------------------------
New equipment and trucks                               $   73,908      $  80,013
Used equipment and trucks                                  30,683         27,070
Parts and other                                            20,457         21,421
--------------------------------------------------------------------------------
Total                                                   $ 125,048      $ 128,504
================================================================================

PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Maintenance and repairs are
charged to expense as incurred. Improvements which extend the useful life of the
related item are capitalized and depreciated. Depreciation is provided for over
the estimated useful lives of the individual assets using straight-line methods.
Depreciation expense was $4.5 million, $5.0 million and $6.0 million for the
fiscal years ended January 31, 2003, 2002 and 2001, respectively.

         The Company follows the guidelines of Statements of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in determining
whether an impairment of property and equipment or other long-lived assets has
occurred. Specifically, the Company's policy is to evaluate, at each balance
sheet date, whether events and circumstances have taken place to indicate the
remaining book value of the assets may not be recoverable. If an evaluation is
required, the estimated future undiscounted cash flows associated with the asset
is compared to the asset's carrying value to determine if a write-down to
recoverable value is necessary.

Property and equipment consisted of the following as of January 31:

(IN THOUSANDS)                                   2003         2002       LIVES
--------------------------------------------------------------------------------
Land                                          $  1,604     $    479      --
Buildings and improvements                       6,994        6,987     5-31.5
Equipment, furniture and fixtures               21,230       20,640     3-7
Rental equipment                                 7,830        2,903     3-7
Construction in progress                           456          126      --
--------------------------------------------------------------------------------
     Total                                      38,114       31,135
Accumulated depreciation                       (21,294)     (17,943)
--------------------------------------------------------------------------------
Property and equipment, net                   $ 16,820     $ 13,192
================================================================================


                                       45
<PAGE>


INCOME TAXES

         Deferred income taxes are computed using the asset and liability
method, such that deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary differences between financial
reporting amounts and the tax bases of existing assets and liabilities based on
currently enacted tax laws and tax rates in effect for the periods in which the
differences are expected to reverse. Income tax expense is the tax payable for
the period plus the change during the period in deferred income taxes. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized.

MANUFACTURER INCENTIVES AND DISCOUNTS

         The Company is the recipient of incentives and discounts from
manufacturers. These incentives are variable, the receipt of which are based,
among other things, upon the number of new units purchased and end-user
transaction pricing. All such incentive payments are treated as a reduction of
cost of goods sold when earned.

STOCK-BASED COMPENSATION

         The Company accounts for stock-based compensation using the intrinsic
value method. Accordingly, compensation cost for stock options is measured as
the excess, if any, of the quoted market price of the Company's stock at the
date of grant over the amount an employee must pay to acquire the stock. Had the
Company used the fair value method of accounting to measure compensation expense
for its stock option plan and charged compensation expense against income over
the vesting periods, the Company's pro forma net income (loss) and pro forma net
income (loss) per common share would have been as follows at January 31:

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)                                 2003         2002         2001
-----------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>          <C>
Net income (loss), as reported                                     $  3,007     $ (2,430)    $(18,562)
   Less: Total stock-based employee compensation
      expense under fair value-based method, net of tax                (364)        (414)        (521)
-----------------------------------------------------------------------------------------------------
Pro forma net income (loss)                                        $  2,643     $ (2,844)    $(19,083)
=====================================================================================================
Basic and diluted net income (loss) per share:
   As reported                                                     $   0.23     $  (0.18)    $  (1.41)
=====================================================================================================
   Pro forma net income (loss) per share                           $   0.21     $  (0.22)    $  (1.45)
=====================================================================================================
</TABLE>

         Note 8 to the financial statements contains the significant assumptions
used in determining the underlying fair value of options.

REVENUE RECOGNITION

         Revenue on equipment, truck and parts sales is recognized upon delivery
of product to customers. Rental and service revenue is recognized at the time
such services are provided. In addition to outright sales of new and used
equipment, certain rentals include rent-to-purchase option agreements. Under
such agreements, customers are given a period of several months to exercise the
option to purchase the rented equipment and may be allowed to apply a portion of
the rental payments to the purchase price. This rent-to-purchase equipment is
included in the Company's inventory until the option is exercised and the


                                       46
<PAGE>


equipment is purchased. Rental revenue is recognized during the rental period of
rent-to-purchase transactions and equipment sales revenue is recognized when the
purchase option is exercised.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         Unless otherwise disclosed, the carrying amounts of financial
instruments, including cash and cash equivalents, receivables, accounts payable,
floor plan payables, notes payable and long-term debt approximate fair value
because of relatively short terms or variable rates on these instruments.

NEW ACCOUNTING PRONOUNCEMENTS

         On February 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets
("SFAS No. 142"). This statement addresses accounting and financial reporting
for goodwill and intangible assets. Under the new statement, goodwill and
intangible assets with indefinite lives are no longer amortized, but are subject
to impairment testing on at least an annual basis. Other than goodwill, the
Company does not have any intangible assets with indefinite lives or other
intangible assets. The Company completed the process of testing goodwill for
impairment in accordance with the provisions of SFAS No. 142. An independent
valuation was performed utilizing, among other things, the Company's best
estimate of expected future cash flows. No amounts were impaired at the time of
implementation, February 1, 2002.

         The effect of discontinuance of goodwill amortization during fiscal
2003 was to increase net income by approximately $612,000 or $0.05 per share.
Prior to February 1, 2002, goodwill was amortized on a straight-line basis over
30 years. The following pro forma information reflects the Company's results of
operations as they would have appeared had the Company not recorded goodwill
amortization and its related tax effects during fiscal 2002 and 2001 (dollars in
thousands, except per share amounts):

                                      2003         2002          2001
                                   ---------    ---------     ----------

Reported net income (loss)         $   3,007    $  (2,430)    $  (18,562)
Add back goodwill
      amortization, net of tax            --          623            888
                                   ---------    ---------     ----------
Pro forma net income (loss)        $   3,007    $  (1,807)    $  (17,674)
                                   =========    =========     ==========

Reported basic and diluted
      earnings (loss) per share    $    0.23    $   (0.18)    $    (1.41)
Add back goodwill
      amortization, net of tax            --         0.05           0.07
                                   ---------    ---------     ----------
Pro forma basic and diluted
      earnings (loss) per share    $    0.23    $   (0.13)    $    (1.34)
                                   =========    =========     ==========

         The Company evaluates the carrying value of goodwill on an annual basis
and when events occur or circumstances change which may reduce the fair value of
the reporting unit to which the goodwill is assigned below its carrying amount.
Such circumstances could include, but are not limited to, (1) a significant
adverse change in business climate or in legislation, (2) unanticipated
competition, or (3) a loss of key manufacturing relationships.


                                       47
<PAGE>


         When evaluating whether goodwill is impaired, the Company compares the
fair value of the reporting unit to which the goodwill is assigned to its
carrying amount, including goodwill. The Company considers its three business
segments (Note 14) to be reporting units when it tests for goodwill impairment
based on how it manages its business and because the operating segment level is
where the Company believes goodwill naturally resides. If the carrying amount of
a reporting unit exceeds its fair value, then the amount of the impairment loss
must be measured. The impairment loss would be calculated by comparing the
implied fair value of reporting unit goodwill with its carrying amount. In
calculating the implied fair value of goodwill, the fair value of the reporting
unit is allocated to all of the other assets and liabilities of that unit based
on their fair values. The excess of the fair value of a reporting unit over the
amount assigned to its other assets and liabilities is the implied fair value of
goodwill. An impairment loss would be recognized when the carrying amount of
goodwill exceeds its implied fair value. The Company performs its annual
goodwill impairment testing during its first quarter.

         Effective February 1, 2002, the Company also adopted SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. This standard broadens the presentation of
discontinued operations to include more disposal transactions, thus the
recognition of discontinued operations is expected to become more common under
this standard. This statement retains the requirements of SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, to recognize impairments on property, plant and equipment, but
removes goodwill from its scope. The adoption of SFAS No. 144 had no impact on
the Company's consolidated financial statements. The Company's plan of
disposition of certain of its truck operations occurred prior to the
implementation requirement of SFAS No. 144.

         In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, Accounting for Asset Retirement Obligations, requiring the
recognition of a liability for an asset retirement obligation in the period in
which it is incurred. When the liability is initially recorded, the carrying
amount of the related long-lived asset is correspondingly increased. Over time,
the liability is accreted to its present value and the related capitalized
charge is depreciated over the useful life of the asset. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002. The Company believes
the adoption of the provisions of this statement will not have a material effect
on the Company's financial statements.

         In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). The provisions
of this statement are effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged. The
Company is reviewing the requirements of this standard and expects this to have
no impact on the Company's financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for Stock
Based compensation - Transition and Disclosure - as Amendment to FAS 123. SFAS
No. 148 provides two additional transition methods for entities that adopt the
preferable fair value based method of accounting for stock based compensation.
In addition, the statement requires disclosure of comparable information for all
companies regardless of whether, when, or how an entity adopts the preferable,
fair value based method of accounting. These disclosures are now required for
interim periods in addition to the traditional annual disclosure. The amendments
to SFAS No. 123, which provides for additional transition methods, are effective
for periods beginning after December 15, 2002, although earlier application is
permitted. Certain disclosure amendments are required for financial statements
for fiscal years ending after December 15, 2002, and have been reflected in
these consolidated financial statements. The remaining amendments to the
disclosure requirements are required for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002.


                                       48
<PAGE>


The Company adopted the disclosure provisions of this statement which had no
impact on the Company's financial statements.

         In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires that
upon issuance of a guarantee, a grantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 will be effective for any guarantees that are
issued or modified after December 31, 2002. The Company is reviewing the
requirements of this interpretation and expects the recognition of guarantees
will not have a material effect on the Company's financial statements. The
Company has adopted the disclosure provisions of this statement.

         In January 2003, the FASB issued FIN 46, Consolidation of Variable
Interest Entities - an Interpretation of ARB No. 51. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements, to entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The transitional disclosure
provisions of FIN 46 are effective for all financial statements issued after
January 31, 2003. The Company is reviewing the requirements of this
interpretation and expects that it will have no impact on the Company's
financial statements.

3. LOSS ON SALE, RESTRUCTURING CHARGES AND ASSET IMPAIRMENT:

         During the fourth quarter of fiscal 2001, the Company approved a
comprehensive plan to restructure management and to divest itself of the
majority of its heavy-duty truck business. The Company recognized charges to
operations of $11.2 million in the fourth quarter of fiscal 2001. The charges
were primarily comprised of a loss on the sale of the Company's Roseville,
Minnesota truck business, asset impairments of long-lived assets, such as
property and equipment, leasehold improvements, and goodwill related to the
Company's truck division. The charge also included approximately $700,000 and
$300,000 of severance costs and lease and other obligations, respectively.
Severance cost paid totaled approximately $200,000 and $500,000 in fiscal 2003
and 2002, respectively, and costs related to lease and other obligations paid
totaled approximately $100,000 and $200,000 in fiscal 2003 and 2002,
respectively. There are no remaining accruals relating to severance, lease or
other obligations as of the January 31, 2003.

         The assets associated with the truck business planned for sale were
classified as assets held for sale on the balance sheet totaling approximately
$8.9 million as of the end of fiscal 2002. Liabilities associated with assets
held for sale totaled approximately $6.4 million as of the end of fiscal 2002
and were primarily comprised of truck floor plan financing, trade payables and
other current liabilities. Operating losses from the truck dealership sold and
the truck businesses planned for sale totaled approximately $45,000, $230,000
and $13.3 million during fiscal 2003, 2002 and 2001, respectively, and are
included in the Company's truck segment (Note 14).

         The Company completed the execution of the above-described
restructuring plan by completing the sale of its Riverside, California truck
business during fiscal 2003 and the Dallas and Fort Worth, Texas truck


                                       49
<PAGE>


business during fiscal 2002. The financial effects of the sale of the Riverside,
California truck business resulted in a gain of $734,000 in fiscal 2003 while
the sale of the Dallas and Fort Worth, truck business did not result in any gain
or loss in fiscal 2002.

4. BUSINESS COMBINATIONS:

         The Company's acquisitions have been accounted for using the purchase
method of accounting and, accordingly, the assets acquired and liabilities
assumed have been recorded at their estimated fair values as of the dates of
acquisition. The excess purchase price over the fair value of the assets
acquired and liabilities assumed has been recorded as goodwill which, prior to
adoption of SFAS No. 142 on February 1, 2002, was amortized over 30 years.

         During the first quarter of fiscal 2002, the Company purchased the
remaining 8% minority interest in Salinas Equipment Distributors, Inc.
Approximately 3% of the minority interest was purchased during the fourth
quarter of fiscal 2001. The net purchase price totaled approximately $800,000
and $300,000, respectively. During the first quarter of fiscal 2001, the Company
purchased the remaining 15% minority interest in Hall GMC, Inc. and Hall Truck
Center, Inc. for a total purchase price of approximately $1.2 million. Pro forma
operating results for the periods prior to these acquisitions were not
significant.












                                       50
<PAGE>


5. FLOOR PLAN/BORROWING BASE PAYABLES:

         Floor plan/borrowing base payables are financing arrangements for
inventory and receivables. The terms of certain floor plan arrangements may
include a one- to twelve-month interest-free term followed by a term during
which interest is charged. The interest-free periods may be longer depending on
special financing programs that may be offered from time to time, and
occasionally, additional discounts are available in lieu of interest-free
periods. Payoff of the floor plan payables generally occurs at the earlier of
sale of the inventory or in accordance with the terms of the financing
arrangements. All amounts owed to Deere & Company are guaranteed by Ronald D.
Offutt and are collateralized by inventory.

Floor plan/borrowing base payables consisted of the following as of January 31:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                                    2003          2002
------------------------------------------------------------------------------------------------------
NONINTEREST-BEARING:
<S>                                                                             <C>           <C>
   Deere & Company                                                              $ 32,487      $ 31,259
   Other                                                                             151            --
------------------------------------------------------------------------------------------------------
                                                                                  32,638        31,259
------------------------------------------------------------------------------------------------------
INTEREST-BEARING:
   CitiCapital Commercial Corporation, revolving borrowing base facility,
      interest at 4.75% at January 31, 2003, based on prime                       29,000            --
   Deere & Company, due as inventory is sold, 4.25% to 4.75% at
      January 31, 2003 based on prime                                              4,914        12,124
   Deere Credit Services, Inc., revolving borrowing base facility, interest at
      4.75% at January 31, 2003, based on prime                                    4,850        40,000
   General Motors Acceptance Corporation, 3.75% to 4.25% at
      January 31, 2003, based on prime                                             4,094         2,824
   GE Commercial Distribution Finance Corporation, interest at 5.5% at
      January 31, 2003                                                               654            --
   Volvo Commercial Finance LLC The Americas, 4.26% at January 31,
      2003, based on LIBOR                                                           602         4,657
   Ag Capital Company (affiliate), paid off during the year                           --        10,000
   Other, paid off during the year                                                    --         1,209
   Amount included in liabilities associated with assets held for sale                --        (4,657)
------------------------------------------------------------------------------------------------------
                                                                                  44,114        66,157
------------------------------------------------------------------------------------------------------
   Total                                                                        $ 76,752      $ 97,416
======================================================================================================
</TABLE>

         The Deere and Deere Credit financing sources have a combined maximum
outstanding allowed of $125.0 million. On January 31, 2003, the above noted
$42.3 million outstanding to Deere and Deere Credit on the facility and
operating lease commitments and other items of $2.8 million consumed a portion
of the commitment leaving $79.9 million unused. The CitiCapital borrowing base
credit facility provides up to $30.0 million in financing and had an outstanding
balance of $29.0 million at January 31, 2003, leaving $1.0 million unused. The
collateral of equipment inventories along with eligible receivables would
support $30.4 million of additional borrowings at January 31, 2003 under the
Deere and Deere Credit and CitiCapital agreements. The Deere and Deere Credit
and CitiCapital facilities, which are reviewed and renewed annually, expire on
October 31, 2004 and September 30, 2003, respectively.

         The Company also had an additional $11.4 million of unused credit
commitments from other sources as of January 31, 2003.


                                       51
<PAGE>


         The Company has certain floor plan/borrowing base financing agreements
containing various restrictive covenants, which, among other restrictions,
require the Company to maintain minimum financial ratios, including earnings
before interest and income taxes, as defined, and a minimum level of tangible
equity. The Company was in compliance with all floor plan covenants at January
31, 2003.

6. NOTES PAYABLE AND LONG-TERM DEBT:

NOTES PAYABLE

         Currently, the Company has an unsecured bank line of credit totaling
$1,585,000 with a maturity date of July 1, 2003 and with a variable interest
rate based on the prime rate (4.25% at January 31, 2003). The balances
outstanding under this bank line of credit totaled $1,565,000 and $975,000 as of
January 31, 2003 and 2002, respectively. The Company had approximately $20,000
of unused availability relating to this line of credit at January 31, 2003. This
bank line of credit totaled $1,900,000 at January 31, 2002 with unused
availability of $925,000. During fiscal year 2002, the Company had an additional
operating line of credit with a variable interest rate based on LIBOR. The
highest balances outstanding under these lines were $1.9 million and $15.1
million for fiscal years ended January 31, 2003 and 2002, respectively. The
weighted average interest rates on these lines during such periods were 5.06%
and 7.04%, respectively.

LONG-TERM DEBT

Long-term debt consisted of the following as of January 31:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                                         2003          2002
---------------------------------------------------------------------------------------------------------
<S>                                                                              <C>            <C>
CIT, due February 1, 2006, 5.25% at January 31, 2003 based on prime,
   collateralized by certain property and equipment of the Company               $    3,501     $      --
Ag Capital Company (affiliate), paid off during the year                                 --         3,203
GE Commercial Distribution Finance Corporation, due January 15, 2005,
   5.5% at January 31, 2003 based on prime, collateralized by certain
   rental equipment of the Company                                                    1,676            --
First State Bank of North Dakota, due May 15, 2017, 7.0% at January 31,
   2003, collateralized by underlying asset of mortgage                                 779            --
Volvo Trucks North America, Inc., paid off during the year                               --           640
Other                                                                                   967           151
---------------------------------------------------------------------------------------------------------
Total                                                                                 6,923         3,994
Less current maturities of long-term debt                                            (1,783)       (2,612)
---------------------------------------------------------------------------------------------------------
Total long-term debt, net of current maturities                                  $    5,140     $   1,382
=========================================================================================================
</TABLE>

Future long-term debt maturities as of January 31, 2003 are as follows:

(IN THOUSANDS)
------------------------------------------------------------------------
2004                                                          $    1,783
2005                                                               1,881
2006                                                               2,243
2007                                                                 259
2008                                                                 168
Thereafter                                                           589
------------------------------------------------------------------------
Total                                                         $    6,923
========================================================================


                                       52
<PAGE>


         The Company has notes payable and long-term debt agreements containing
various restrictive covenants, which, among other matters, require the Company
to maintain minimum financial ratios including earnings before interest and
income taxes, as defined, and a minimum level of tangible equity. The Company
was in compliance with all notes payable and long-term debt covenants at January
31, 2003.

7. EARNINGS PER SHARE:

         Basic net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of common shares outstanding during
the year. Diluted net income (loss) per share is computed by dividing net income
(loss) by the sum of the weighted average number of common shares outstanding
plus all additional common shares that would have been outstanding if
potentially dilutive common shares related to stock options had been issued. The
following table reconciles the number of shares utilized in the net income
(loss) per common share calculations:

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)                              2003          2002          2001
-------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>           <C>
Net income (loss) available to common shareholders               $    3,007     $  (2,430)    $ (18,562)
=======================================================================================================
Weighted average number of common shares outstanding - basic         12,750        13,160        13,182
Dilutive effect of option plan                                           52            --            --
-------------------------------------------------------------------------------------------------------
Common and potential common shares outstanding - diluted             12,802        13,160        13,182
=======================================================================================================
Basic and diluted net income (loss) per share                    $     0.23     $   (0.18)    $   (1.41)
=======================================================================================================
</TABLE>

         Options to purchase 897,399 shares of Common Stock were outstanding as
of January 31, 2003. Outstanding options of 682,050 were not included in the
computations of diluted earnings per share for the fiscal year ended January 31,
2003, because the exercise prices were greater than the average market price of
the common shares for the period.

8. EMPLOYEE BENEFIT PLANS:

401(k) EMPLOYEE SAVINGS PLAN

         The Company's employees participate in a 401(k) employee savings plan,
which covers substantially all employees. The Company matches a portion of
employee contributions. Company contributions were $563,000, $684,000 and
$750,000 for the fiscal years ended January 31, 2003, 2002 and 2001,
respectively.

STOCK-BASED COMPENSATION PLAN

         The Company's 1996 Stock Incentive Plan ("the Plan") provides
incentives to key employees, directors, advisors and consultants of the Company.
The Plan, which is administered by the Compensation Committee of the Board of
Directors ("the Committee"), provides for an authorization of shares of Class A
Common Stock for issuance thereunder limited to 10% of the total number of
shares of Common Stock issued and outstanding. Under the Plan, the Company may
grant eligible recipients incentive stock options, nonqualified stock options,
restricted stock, stock appreciation rights, stock awards, or any combination
thereof. The Committee establishes the exercise price, vesting schedule and
expiration date of any stock options granted under the Plan. Historically, the
exercise price has been equal to the market price for all stock options granted
under the Plan on the date of grant. Stock options outstanding at January 31,
2003 vest immediately or according to an up to a five year schedule and expire
five to ten years after the date of grant.


                                       53
<PAGE>


Information regarding the Plan as of January 31 is as follows:

<TABLE>
<CAPTION>
                                                  2003                      2002                       2001
--------------------------------------------------------------------------------------------------------------
                                                 WEIGHTED                  WEIGHTED                   WEIGHTED
                                                  AVERAGE                   AVERAGE                    AVERAGE
                                                 EXERCISE                  EXERCISE                   EXERCISE
                                     OPTIONS        PRICE      OPTIONS        PRICE      OPTIONS         PRICE
--------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>           <C>         <C>           <C>          <C>
Outstanding, beginning of year       727,099     $   8.20      586,974     $   9.88      829,250      $  10.35
Granted                              211,000         5.33      228,849         3.23      121,834          5.33
Canceled                             (40,700)        9.34      (88,724)        6.46     (364,110)         9.44
Exercised                                 --           --           --           --           --            --
--------------------------------------------------------------------------------------------------------------
Outstanding, end of year             897,399     $   7.47      727,099     $   8.20      586,974      $   9.88
==============================================================================================================
Exercisable, end of year             864,599     $   7.47      639,309     $   7.87      359,094      $  10.19
==============================================================================================================
Weighted average fair value of
options granted                                  $   2.09                  $   1.22                   $   2.27
==============================================================================================================
</TABLE>

         Options outstanding at January 31, 2003 have exercise prices ranging
from $3.00 to $15.50 and a weighted average remaining contractual life of 6.77
years.

         In determining the pro forma compensation cost of the options granted
during fiscal 2003, 2002 and 2001, as specified by SFAS 123, in Note 2 to the
financial statements, the fair value of each option grant was estimated on the
date of grant using the Black-Scholes option pricing model. The weighted average
assumptions used in these calculations are summarized below:

                                        2003             2002              2001
--------------------------------------------------------------------------------
Risk free interest rate                 3.61%            4.42%             6.30%
Expected life                      3.00 years       3.00 years        3.28 years
Expected volatility                    53.34%           49.40%            55.70%
================================================================================

9. INCOME TAXES:

The components of the income tax provision (benefit) are summarized as follows
as of January 31:

(IN THOUSANDS)                                 2003         2002          2001
-------------------------------------------------------------------------------
Current:
   Federal                                   $  (284)    $ (5,206)    $  (6,783)
   State                                          --           --            --
Deferred income tax provision (benefit)        2,374        3,586        (5,950)
-------------------------------------------------------------------------------
Income tax provision (benefit)               $ 2,090     $ (1,620)   $  (12,733)
===============================================================================

         In Fiscal 2003, the difference between the federal statutory rate of
35% the income tax provision represents the impact of state income taxes, net of
the federal benefit of 5% and other items of representing 1%. The primary
difference between the federal statutory rate of 35% for the fiscal years ended
January 31, 2002 and 2001, and the income tax provision (benefit) represents the
impact of state income taxes, net of the federal benefit.


                                       54
<PAGE>


         The net current deferred tax asset (liability) and the net long-term
deferred tax asset consisted of the following temporary differences between the
financial statement carrying amounts and the tax basis of assets and liabilities
at January 31:

(IN THOUSANDS)                                          2003           2002
-----------------------------------------------------------------------------
Accruals and other reserves                           $  2,190       $  2,310
Inventory                                               (4,970)         2,140
Compensation accruals                                      600            860
-----------------------------------------------------------------------------
   Net current deferred tax asset (liability)         $ (2,180)      $  5,310
-----------------------------------------------------------------------------
Property and equipment                                    (560)          (220)
Goodwill                                                (1,540)          (550)
Net operating loss carryforwards                         7,570          1,170
Other                                                      150            104
-----------------------------------------------------------------------------
   Net long-term deferred tax asset                      5,620            504
-----------------------------------------------------------------------------
   Total                                              $  3,440       $  5,814
=============================================================================

         The Company has a federal net operating loss carry-forward of
approximately $16.0 million, which expires in fiscal 2018. The Company also has
state net operating loss carry-forwards of approximately $43.0 million, which
expire in fiscal years 2016 through 2018.

10. CAPITAL STOCK AND DIVIDENDS PAYABLE:

CAPITAL STOCK

         The authorized capital stock of the Company consists of 20,000,000
shares of Class A Common Stock, 7,500,000 shares of Class B Common Stock and
500,000 shares of preferred stock, each with a par value of $0.01 per share. The
economic rights of each class of Common Stock are the same, but the voting
rights differ. Each share of Class A Common Stock is entitled to one vote per
share and each share of Class B Common Stock is entitled to four votes per
share. In addition, the shares of Class B Common Stock contain restrictions as
to transferability and are convertible into shares of Class A Common Stock on a
one-for-one basis.

TREASURY STOCK

         During the third quarter of fiscal 2002, the Company's Board of
Directors approved a stock repurchase program that will allow the Company to
repurchase up to ten percent of the Company's outstanding Class A Common Stock
from time to time in both the open market and in privately negotiated
transactions. During the third quarter of fiscal 2003, the Company's Board of
Directors approved to expand the repurchase program up an additional five
percent of the Company's outstanding Class A Common Stock. The Company's
repurchases of shares of Class A Common Stock are recorded at cost and is
presented as a separate reduction of stockholders' equity. The Company has
repurchased 551,200 shares of the Class A Common Stock as of January 31, 2003.
On December 16, 2002, after receiving a letter from Ronald D. Offutt, the
Chairman of the Board of Directors, Chief Executive Officer and majority
stockholder of the Company, expressing an interest in acquiring all of the
shares of the Class A Common Stock of the Company that Mr. Offutt does not
currently own or control, the Company ceased its repurchase program pending the
outcome of this action.


                                       55
<PAGE>


DIVIDEND PAYMENT

         Prior to the Company's initial public offering in January 1997, an S
corporation distribution was made in connection with the termination of the
Company's S corporation tax status. A portion of this distribution was retained
by the Company for any potential tax liabilities related to the previously filed
federal and state S corporation tax returns. During the second quarter of fiscal
2002, the balance of $731,000 was paid to individuals who were the Company's
shareholders at the time the Company's S corporation status was terminated.

11. COMMITMENTS AND CONTINGENCIES:

OPERATING LEASES

         The Company leases retail space, vehicles and rental equipment under
various non-cancelable operating leases. The leases have varying terms and
expire at various dates through 2012. Generally, the leases require the Company
to pay taxes, insurance and maintenance costs. Lease expense was $7.9 million,
$9.7 million and $10.9 million for fiscal 2003, 2002 and 2001, respectively.

         Future minimum lease payments, by year, required under leases with
initial or remaining terms of one year or more consist of the following:

(IN THOUSANDS)               Affiliates       Other         Total
-------------------------------------------------------------------
2004                         $    2,814    $    3,103    $    5,917
2005                              2,511         1,901         4,412
2006                              2,490         1,606         4,096
2007                              2,438         1,141         3,579
2008                              2,108           670         2,778
Thereafter                        7,645           941         8,586
-------------------------------------------------------------------
Total                        $   20,006    $    9,362    $   29,368
===================================================================

GUARANTEES

         Certain credit companies provide direct customer financing
(collateralized by customer owned equipment) and credit accounts with recourse
to the Company. The Company would be required to perform under the recourse
agreements if the Company's customers fail to perform completely as contracted.
These contracts related to customer financing have various maturity dates over
the next one to five years. The contingent liability relating to affiliate
contracts is capped at 10% of the amount of the aggregate outstanding contracts.
Certain construction contracts with Deere Credit are full recourse while
agricultural contracts are limited to a cash deposit amounting to 3% of the
aggregate outstanding contracts. The Company also factors certain accounts
receivable to Deere Credit with recourse, which therefore may be charged back to
the Company. The contingent liability relating to CitiCapital is limited to 5%
of the originated loans for any given year. These commitments represent only a
small portion of the total related account balances; thus only accruals and
payments for probable losses are recognized until the recourse (guarantee)
expires. The financial risk amount is equal to the recourse (guaranteed) portion
of the contractual amounts.


                                       56
<PAGE>


As of January 31, 2003, the contingent liability and required deposits for the
above guarantees are as follows:

                                                               FINANCE
                                            GUARANTEED        DEPOSITS
(IN THOUSANDS)                                 AMOUNTS      RECEIVABLE
----------------------------------------------------------------------
Deere Credit Services, Inc.                $     3,114       $   1,670
CitiCapital Commercial Corporation              13,166             ---
ACL Company, LLC (affiliate)                        44             ---
Ag Capital Company (affiliate)                       2             ---
Other                                              261             ---
----------------------------------------------------------------------
Total                                       $   16,587       $   1,670
======================================================================

MINIMUM REPURCHASE GUARANTEES

         The Company has entered into sales agreements with certain customers,
which are subject to repurchase agreements. Pursuant to these agreements, the
Company, at the discretion of the customer, may be required to repurchase
equipment at specified future dates at specified repurchase prices. With respect
to these agreements, the Company believes the estimated future retail values of
the equipment equals or exceeds the guaranteed repurchase prices. The Company
accounts for transactions which have a guaranteed repurchase feature as leases.

The Company's existing repurchase agreements as of January 31, 2003 expire as
follows:

(IN THOUSANDS)
----------------------------------------------------------
2004                                            $    1,480
2005                                                 1,641
2006                                                 1,752
2007                                                   539
2008                                                   249
----------------------------------------------------------
Total                                           $    5,661
==========================================================

LITIGATION

         On March 31, 2003, one of the Company's stockholders filed a complaint
in the Delaware Court of Chancery purporting to commence a class action lawsuit
on behalf of the Company's public stockholders against the Company, Mr. Offutt
and each of the individual directors of the Company. In general, the complaint
alleges, among other things: (1) breaches of fiduciary duty by each of the
Company, Mr. Offutt and the members of the Company's Board of Directors in
connection with Mr. Offutt's contemplated Tender Offer; (2) inadequate
disclosure to minority stockholders of RDOE; and (3) that the consideration
offered is inadequate. Among other remedies, the complaint seeks to enjoin the
Tender Offer (and the follow-up merger) or, alternatively, damages in an
unspecified amount and rescission in the event the Tender Offer (and the
follow-up merger) occur. The Company and Mr. Offutt believe the complaint is
without merit and intend to vigorously defend against these claims and after
consultation with counsel, that it is remote that resolution of such claims will
have a material adverse effect on the results of operations and cash flows of
the Company.


                                       57
<PAGE>


         In the normal course of business, the Company is subject to various
claims, legal actions, contract negotiations and disputes. Although the ultimate
outcome of such claims cannot be ascertained at this time, it is the opinion of
management, after consultation with counsel, that it is remote that resolution
of such claims will have a material adverse effect on the results of operations
and cash flows of the Company.

DEERE INDEMNIFICATION AGREEMENT

         Some time after the Company's initial public offering in January 1997,
Deere advised the Company that it was requiring Deere dealerships to sign an
indemnification agreement before "going public". Deere also informed the Company
that it would not be willing to consider possible future acquisitions of Deere
dealerships by the Company unless and until the Company signed such an
agreement. After prolonged discussions and negotiations, the Company signed an
indemnification agreement in March 2000. In general, this agreement provides
that the Company will indemnify Deere (and its directors, officers, employees
and agents) from and against lawsuits and other proceedings commenced by
shareholders of the Company and by governmental agencies arising from (a) the
registration, listing, offer, sale, distribution or resale of any security of
the Company, (b) an untrue statement or omission, whether actual or alleged, in
connection with any security of the Company, or (c) an allegation that Deere is
a "controlling person" of the Company within the meaning of federal securities
laws. The Company will pay, or reimburse Deere for, any judgments, penalties,
expenses and other losses resulting from any such lawsuit or other proceeding.
The Company has no obligation to indemnify Deere with respect to any judgment
rendered against Deere as a result of Deere's own intentional or reckless
misconduct or as a result of an untrue written statement of fact signed by an
officer of Deere.












                                       58
<PAGE>


12. RELATED-PARTY TRANSACTIONS:

         The Company's significant related party transactions are with entities
that are related as a result of mutual controlling ownership interest by Ronald
D. Offutt, the Company's Chairman and CEO. A summary of these transactions in
addition to other related party transactions disclosed elsewhere in the notes
herein is as follows:

         a.   Ag Capital and ACL Company, LLC in past years have provided
              financing to customers purchasing equipment, parts and repair
              service from the Company. The Company is contingently liable to
              these related parties on a portion of this customer financing as
              summarized in Note 11.

         b.   In addition, the Company had floor plan payables, notes payable
              and long-term debt owed to Ag Capital to finance inventory,
              various receivables and property and equipment as summarized in
              Notes 5 and 6. Interest expense paid to related parties totaled
              $243,000, $2.5 million and $3.2 million in fiscal 2003, 2002 and
              2001, respectively. During fiscal 2003, these facilities were
              paid in full. The Company currently has no lending relationship
              with Ag Capital.

         c.   The Company had sales to related parties totaling $2.3 million,
              $2.2 million and $2.7 in fiscal 2003, 2002 and 2001,
              respectively. The Company also leases certain retail space, real
              estate for a potential dealership site and vehicles from related
              parties. Total lease expense under these arrangements totaled
              $3.6 million, $3.6 million and $4.7 million in fiscal 2003, 2002
              and 2001, respectively. In November 2002, the real estate for a
              potential dealership site that was being leased was purchased for
              the original cost of $1.1 million pursuant to the Company's
              original commitment.

         d.   The Company paid a distribution to Ronald D. Offutt of $711,000
              in fiscal 2002 relating to the Company's final S corporation
              distribution (See Note 10).

13. SUPPLEMENTAL CASH FLOW DISCLOSURES:

Supplemental cash flow disclosures for the Company as of January 31 are as
follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                               2003       2002       2001
--------------------------------------------------------------------------------------------------------
<S>                                                                        <C>        <C>        <C>
Cash payments for interest                                                 $ 3,205    $ 6,383    $ 3,230
========================================================================================================
Cash payments for income taxes                                             $   838    $   159    $ 4,663
========================================================================================================
Supplemental disclosures of non-cash investing and financing activities:
      Increase in assets and related long-term debt due to
         refinancing of operating lease                                    $ 3,565    $    --    $    --
      Decrease in assets related to sale of dealership through
         issuance of a receivable                                              454         --         --
      Decrease in assets related to sale of dealership assets
         through issuance of a receivable and purchaser's
         assumption of debt                                                     --         --     10,818
========================================================================================================
</TABLE>


                                       59
<PAGE>


14. SEGMENT INFORMATION:

         Effective February 1, 2002, the Company's operations are classified
into three business segments, based upon the way the Company manages its
business: construction, agricultural and truck. In past reporting, the corporate
business segment was designated as financial services and corporate. The Company
has not restated the prior years' segment information as it is impractical to
due so. Due to the current size and function of financial services activities,
current and future segment reporting will include financial services information
in the operating segment that generated the financial services revenues and
expense. Construction operations include the sale, service and rental of
construction and material handling equipment to customers primarily in the
construction, manufacturing, warehousing and utility industries and to units of
government. Agricultural operations include the sale, service and rental of
agricultural equipment primarily to customers in the agricultural industry.
Truck operations include the sale and service of heavy, medium, and light-duty
trucks to customers primarily in the transportation and construction industries,
to units of government and retail customers.

         The Company's performance measurement for its operating segments is
income before income taxes. In addition, all corporate expenses are allocated on
a reasonable basis to the Company's operating segments. Identifiable assets are
those used exclusively in the operations of each business segment or which are
allocated when used jointly. Corporate assets are principally comprised of cash,
income tax receivables, certain property and equipment, and deferred income
taxes.












                                       60
<PAGE>


The following table shows the Company's business segments and related financial
information for fiscal years 2003, 2002 and 2001:

<TABLE>
<CAPTION>
(IN THOUSANDS)                   CONSTRUCTION   AGRICULTURAL        TRUCK        CORPORATE(1)      TOTAL
---------------------------------------------------------------------------------------------------------
2003:
---------------------------------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>            <C>            <C>
   Revenues from
      external customers          $ 280,976       $ 189,765       $  63,723      $      --      $ 534,464
   Interest expense                   1,638             655              38             --          2,331
   Interest income                       38             369              41             --            448
   Depreciation and
     amortization                     2,918           1,386             237             --          4,541
   Income (loss) before
     income taxes                    (1,251)          4,536           1,812             --          5,097
   Identifiable assets              112,531          63,604          15,728         10,803        202,666
   Goodwill                          10,256           9,494           4,572             --         24,322
   Capital expenditures, net          2,649             (11)            105          1,446          4,189
=========================================================================================================
</TABLE>

(1)  For fiscal 2003, had the Company reported Financial Services and Corporate
     consistently with fiscal 2002 and 2001, the comparable numbers for fiscal
     2003 would have been (in thousands): Revenues from external customers
     $2,549; Depreciation and amortization $606; Income before income taxes
     $1,038; Identifiable assets $21,731; Capital expenditures, net $1,476.

<TABLE>
<CAPTION>
                                                                                 FINANCIAL
                                                                              SERVICES AND
(IN THOUSANDS)                   CONSTRUCTION   AGRICULTURAL        TRUCK        CORPORATE         TOTAL
---------------------------------------------------------------------------------------------------------
2002:
---------------------------------------------------------------------------------------------------------
<S>                               <C>             <C>            <C>             <C>           <C>
   Revenues from
      external customers          $ 294,863       $ 168,462      $   84,331      $   2,264     $  549,920
   Interest expense                   4,390           1,309             950             --          6,649
   Interest income                       76             546              75             --            697
   Depreciation and
     amortization                     2,286           2,452             355            910          6,003
   Income (loss) before
     income taxes                    (6,422)          1,612             (49)           809         (4,050)
   Identifiable assets              110,786          59,314          21,690         24,804        216,594
   Goodwill                          10,256           9,494           4,572             --         24,322
   Capital expenditures, net            208            (323)             23            326            234
=========================================================================================================

2001:
---------------------------------------------------------------------------------------------------------
   Revenues from
      external customers          $ 316,577       $ 170,891       $ 187,138       $  5,772      $ 680,378
   Interest expense                   6,506           2,059           4,013             --         12,578
   Interest income                        2             562              53             --            617
   Depreciation and
     amortization                     2,530           2,697           1,205          1,033          7,465
   Income (loss) before income
     taxes and minority interest     (9,575)          1,385         (24,486)         1,392        (31,284)
   Identifiable assets              153,512          69,131          42,746         40,599        305,988
   Goodwill                          10,702           9,502           4,754             --         24,958
   Capital expenditures, net            786           1,856             268          1,565          4,475
=========================================================================================================
</TABLE>



                                       61
<PAGE>


15. UNAUDITED QUARTERLY FINANCIAL DATA:

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)           FIRST          SECOND          THIRD         FOURTH        TOTAL YEAR
---------------------------------------------------------------------------------------------------------------------
FISCAL 2003:
---------------------------------------------------------------------------------------------------------------------
<S>                                           <C>             <C>            <C>            <C>             <C>
      Total revenues                          $ 148,250       $ 144,647      $ 139,172      $ 102,395       $ 534,464
      Gross profit                               24,269          25,123         25,596         18,816          93,804
      Net income (loss)                           1,034           1,333          1,522           (882)          3,007
      Net income (loss) per share
         - basic and diluted                       0.08            0.10           0.12          (0.07)           0.23
=====================================================================================================================

---------------------------------------------------------------------------------------------------------------------
   FISCAL 2002:
---------------------------------------------------------------------------------------------------------------------
      Total revenues                          $ 154,683       $ 149,015      $ 135,544      $ 110,678       $ 549,920
      Gross profit                               25,363          25,302         24,349         18,209          93,223
      Net income (loss)                            (356)            478              3         (2,555)         (2,430)
      Net income (loss) per share
         - basic and diluted                      (0.03)           0.04           0.00          (0.19)          (0.18)
=====================================================================================================================
</TABLE>

See Note 3 for details of gain on sale of dealerships in the third quarter of
fiscal 2003.










                                       62
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
RDO Equipment Co.:

In our opinion, the accompanying consolidated balance sheet as of January 31,
2003, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended present fairly, in all material
respects, the financial position of RDO Equipment Co. and its subsidiaries as of
January 31, 2003, and the results of their operations and their cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The financial statements of
the Company as of January 31, 2002 and for each of the two years in the period
ended January 31, 2002, prior to the revision discussed in "New Accounting
Pronouncements" in Note 2, were audited by other independent accountants who
have ceased operations. Those independent accountants expressed an unqualified
opinion on those financial statements in their report dated March 8, 2002.

As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for goodwill effective February 1, 2002.

As discussed above, the financial statements of RDO Equipment Co. as of January
31, 2002, and for each of the two years in the period ended January 31, 2002,
were audited by other independent accountants who have ceased operations.
 As described in "New Accounting Pronouncements" in Note 2, those financial
statements have been revised to include the transitional disclosures required by
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets", which was adopted by the Company as of February 1, 2002. We
audited the transitional disclosures for 2002 and 2001 included in "New
Accounting Pronouncements" in Note 2. In our opinion, the transitional
disclosures for 2002 and 2001 in Note 2 are appropriate and have been
appropriately applied. However, we were not engaged to audit, review or apply
any procedures to the 2002 or 2001 financial statements of the Company other
than with respect to such disclosures and, accordingly, we do not express an
opinion or any other form of assurance on the 2002 or 2001 financial statements
taken as a whole.


/S/ PRICEWATERHOUSECOOPERS LLP

Minneapolis Minnesota
March 14, 2003, except for the seventh paragraph of Note 11 for which the date
is March 31, 2003


                                       63
<PAGE>


         The following report is a copy of a report previously issued by Arthur
Andersen LLP and has not been reissued by Arthur Andersen LLP. As discussed in
"New Accounting Pronouncements" in Note 2 to the accompanying consolidated
financial statements, the Company has adopted SFAS No. 142. As discussed in "New
Accounting Pronouncements" in Note 2, the Company has presented the transitional
disclosures for 2002 and 2001 required by SFAS No. 142. The Arthur Andersen LLP
report below does not extend to this change to the 2002 and 2001 consolidated
financial statements. The transitional disclosures for the 2002 and 2001
consolidated financial statements were reported on by PricewaterhouseCoopers LLP
as stated in their report appearing herein.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To RDO Equipment Co.:

We have audited the accompanying consolidated balance sheets of RDO Equipment
Co. (a Delaware corporation) and Subsidiaries as of January 31, 2002 and 2001*,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended January 31, 2002*.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RDO Equipment Co. and
Subsidiaries as of January 31, 2002 and 2001*, and the results of their
operations and their cash flows for each of the three years in the period ended
January 31, 2002* in conformity with accounting principles generally accepted in
the United States.



Arthur Andersen LLP

/S/ Arthur Andersen LLP

Minneapolis, Minnesota,
March 8, 2002

* The fiscal 2001 consolidated balance sheet and the fiscal 2000 consolidated
statements of operations, stockholders equity and cash flows are not required to
be presented in this Form 10-K.


                                       64
<PAGE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

         On May 17, 2002, the Board of Directors of the Company, at the
recommendation of its audit committee, dismissed Arthur Andersen LLP
("Andersen") as the Company's independent public accountants and engaged
PricewaterhouseCoopers LLP to serve as the Company's independent accountants for
fiscal year 2003.

         Andersen's reports on the Company's consolidated financial statements
for each of the years ended January 31, 2002 and 2001 did not contain an adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

INFORMATION ABOUT DIRECTORS

         The following table sets forth certain information as of March 31,
2003, which has been furnished to the Company by the persons who currently serve
as directors and will serve until the Company's next annual stockholders
meeting.

<TABLE>
<CAPTION>
                                                                                               DIRECTOR
DIRECTORS                  AGE     PRINCIPAL OCCUPATION                                         SINCE
---------                  ---     --------------------                                         -----
<S>                         <C>    <C>                                                           <C>
Ronald D. Offutt            60     Chairman and Chief Executive Officer of the Company           1968
                                   and R.D. Offutt Company

Allan F. Knoll(1)(2)        59     Chief Financial Officer and Secretary of R.D. Offutt          1974
                                   Company

Paul T. Horn                60     Retired Member, Board of Directors of R.D. Offutt             1986
                                   Company

Bradford M. Freeman(1)      61     Partner of Freeman Spogli & Co.                               1997

Ray A. Goldberg(2)          76     George M. Moffett Professor of Agriculture and                1997
                                   Business, Emeritus, at the Harvard Graduate School of
                                   Business Administration

Norman M. Jones(2)          72     Member, Board of Directors of LB Community Bank & Trust       1997

James D. Watkins(1)         55     Owner and President of J.D. Watkins Enterprises, Inc.         1997

Edward T. Schafer(2)        56     Chief Executive Officer of Extend America                     2001

Christi J. Offutt           33     Chief Operating Officer of the Company                        2002
</TABLE>

------------------------
(1) Member of  the Compensation Committee

(2) Member of the Audit Committee


                                       65
<PAGE>


OTHER INFORMATION ABOUT DIRECTORS

     RONALD D. OFFUTT is the Company's founder, President, Chairman, Chief
Executive Officer and principal stockholder. He has served as Chairman and Chief
Executive Officer since the Company's formation in 1968. He has served as the
Company's President since December 2000 and he served as a member of the
Company's Office of the Chairman from December 1998 to December 2000. Mr. Offutt
also serves as Chief Executive Officer and Chairman of the Board of R.D. Offutt
Company ("Offutt Co.") and other entities he owns, controls or manages
(collectively, "Offutt Entities") which are engaged in a variety of businesses
such as farming, food processing, auto dealerships and agricultural financing
activities, some of which transact business with the Company. See Item 13
"Certain Relationships and Related Transactions" of this Form 10-K. Mr. Offutt
spent approximately one-half of his time on the business of the Company during
fiscal 2003. He is former Chairman of the Board of Regents of Concordia College
of Moorhead and is a graduate of Concordia College of Moorhead with a degree in
Economics. Mr. Offutt is the father of Christi J. Offutt, Chief Operating
Officer.

     ALLAN F. KNOLL has served as Secretary and a director of the Company since
1974. Mr. Knoll also served as a member of the Company's Office of the Chairman
from December 1998 to December 2000. He served as Chief Financial Officer of the
Company from 1974 through January 1999. Mr. Knoll also serves as Chief Financial
Officer and Secretary of Offutt Co., and serves as a director and officer and is
a beneficial stockholder of many of the Offutt Entities. Mr. Knoll spent
approximately twenty percent of his time on the business of the Company during
fiscal 2003. Mr. Knoll is a graduate of Moorhead State University with degrees
in Business Administration and Accounting.

     PAUL T. HORN has served as a director of the Company since 1986. Mr. Horn
served as a member of the Company's Office of the Chairman from December 1998 to
December 2000, and as President of the Company from August 1996 to December
2000. Mr. Horn also served as Chief Operating Officer of the Company from 1986
through 1999. Mr. Horn served as a director and officer and was a beneficial
stockholder of many of the Offutt Entities until his retirement in December
2002. Mr. Horn currently serves as Vice Chairman of the board of directors of
Northern Grain Company, a regional grain elevator. Mr. Horn is a graduate of
Michigan State University with degrees in Business Administration and Agronomy.

     BRADFORD M. FREEMAN has been a director of the Company since January 1997.
Mr. Freeman is a founding partner of Freeman Spogli & Co., a private equity
investment firm with offices in Los Angeles and New York. Since its founding in
1983, Freeman Spogli & Co. has organized the acquisitions of 34 companies with
aggregate transaction values in excess of $12 billion. Mr. Freeman is a director
of Edison International/Southern California Edison. Mr. Freeman serves on the
board of trustees of Stanford University, St. Johns Hospital and the Smithsonian
Museum. Mr. Freeman is a graduate of Stanford University and Harvard Business
School.

     RAY A. GOLDBERG has been a director of the Company since January 1997. Mr.
Goldberg has been a professor at the Harvard Graduate School of Business
Administration since 1955 and became emeritus in July 1997. He also serves as a
faculty member of the Agribusiness Senior Management Seminar. Mr. Goldberg
serves on the board of directors of the following companies: Smithfield Foods,
Inc., the largest vertically integrated producer and marketer of fresh pork and
processed meats in the United States; Daymon Associates, a private label food
leader that also provides coordination between food manufacturers and retailers;
and Veritec Inc., a technology company that monitors quality control for food
and pharmaceutical products.


                                       66
<PAGE>


     NORMAN M. JONES has been a director of the Company since January 1997. In
December 1996, Mr. Jones organized Metro Bancorp, Inc., a regional banking firm
located in Minneapolis, Minnesota, and served as its Chairman until its
acquisition by AAL Bank & Trust ("AAL") in March 1999 at which time he became a
member of the board of directors of AAL. From 1995 to July 1997, Mr. Jones was
the Chairman of First Bank Savings, fsb, the thrift subsidiary of U.S. Bancorp
(formerly First Bank System, Inc.). Prior to 1995, Mr. Jones was the Chairman
and Chief Executive Officer of Metropolitan Financial Corporation, a regional
thrift holding company, where he was employed from 1952 through 1995 when U.S.
Bancorp acquired it. Mr. Jones is a board member and Chairman of Luther Seminary
Foundation and an advisory board member for Slumberland, Inc., a retail
furniture chain. Mr. Jones attended Concordia College of Moorhead. Mr. Jones is
the brother-in-law to fellow Board member Mr. Schafer.

     JAMES D. WATKINS has been a director of the Company since January 1997. Mr.
Watkins launched POPZ(R)popcorn in June of 1999 under the Soller group of
companies which he owns and operates. Mr. Watkins founded J.D. Watkins
Enterprises, Inc. (an investment company involved in domestic and international
companies, acquisitions and investments) in June 1993 and continues to serve as
its President. Mr. Watkins founded Golden Valley Microwave Foods, Inc. (a
company specializing in food products designed for use in microwave ovens) in
1978 and continuously served as its Chairman and Chief Executive Officer until
it was acquired by ConAgra, Inc. (a diversified international food company) in
July 1991. Mr. Watkins served in ConAgra's Office of the President as President
and Chief Operating Officer of ConAgra Diversified Products Companies until July
1997. Mr. Watkins currently serves as a Trustee of Ronald McDonald House
Charities. Mr. Watkins is a graduate of the University of Minnesota with a
degree in Economics and Fine Arts.

     EDWARD T. SCHAFER has been a director since August 2001. Mr. Schafer is
currently the Chief Executive Officer of Extend America, a telecommunications
company. Mr. Schafer is the former governor of the State of North Dakota serving
from 1992 to 2000. Mr. Schafer has a bachelor's degree from the University of
North Dakota and a master's degree in Business Administration from the
University of Denver. Mr. Schafer is the brother-in-law to fellow Board member
Mr. Jones.

     CHRISTI J. OFFUTT has served as Chief Operating Officer of the Company
since January 2001. She previously served as Senior Vice President - Midwest
Agriculture from June 1999 to January 2001 and as Vice President - Strategic
Planning from December 1998 until June 1999, and as Legal Counsel of Offutt Co.
from January 1997 until December 1998. Ms. Offutt is a graduate of University of
Puget Sound with degrees in politics and government and in business
administration, and received her law degree in May 1996 from Boston University.
She is the daughter of Ronald D. Offutt, Chairman and Chief Executive Officer.

     The Company's audit committee consists of Messrs. Knoll, Jones, Goldberg
and Schafer. Mr. Knoll is the audit committee financial expert, but is not
independent under Section 303.01(B)(3) of the New York Stock Exchange's Listed
Company Manual.

     Information regarding executive officers is presented in Part I of this
Form 10-K as Item 4A.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and all persons who beneficially own more than 10% of the
outstanding shares of the Company's Class A


                                       67
<PAGE>


Common Stock to file with the SEC initial reports of ownership and reports of
changes in ownership of the Company's Class A Common Stock. Executive officers,
directors and greater than 10% beneficial owners are also required to furnish
the Company with copies of all Section 16(a) reports they file. The Company
believes that all directors, executive officers and beneficial owners of more
than 10% of the Company's Class A Common Stock have filed with the SEC on a
timely basis all reports required to be filed under Section 16 of the Exchange
Act.

CODE OF ETHICS

         The Company currently has not adopted a code of ethics that applies to
the Company's principal executive officer, principal financial officer and
principal accounting officer. The Company along with legal counsel is currently
in the process of developing a code of ethics for the above mentioned officers
of the Company. Once the code of ethics is finalized and adopted by the Company,
the Company will, as required, file a copy as an exhibit to its next annual
report and post the text of the code of ethics on its internet website and
disclose in its next annual report the address of the internet website
containing the Company's code of ethics.












                                       68
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION.

EXECUTIVE COMPENSATION AND OTHER BENEFITS

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

         The following table sets forth the cash and non-cash compensation for
each of the last three fiscal years awarded to or earned by the Chief Executive
Officer and by each of the four most highly paid executive officers of the
Company for fiscal 2003.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                 LONG-TERM
                                                                                COMPENSATION
                                                       ANNUAL COMPENSATION     NUMBER OF SHARES
NAME AND PRINCIPAL POSITION(S)             FISCAL     ---------------------      UNDERLYING         ALL OTHER
DURING FISCAL 2003                          YEAR      SALARY     CASH BONUS      OPTIONS(1)        COMPENSATION
------------------                           ----     ------     ----------      ----------        ------------
<S>                                          <C>     <C>            <C>               <C>                 <C>
Ronald D. Offutt                             2003          --            --           30,000              --
     PRESIDENT,CHAIRMAN AND                  2002          --            --               --              --
     CHIEF EXECUTIVE OFFICER                 2001          --            --               --              --

Christi J. Offutt                            2003    $171,600       $84,000           35,000               --
     CHIEF OPERATING OFFICER                 2002    $163,523         --              33,333               --
                                             2001    $119,677       $30,000            7,000               --

Steven B. Dewald                             2003    $156,022       $66,000           30,000               --
     CHIEF FINANCIAL OFFICER                 2002    $143,331         --              25,000               --
                                             2001    $139,797         --                --                 --

Thomas K. Espel(2)                           2003    $ 40,000         --                --                 --
     TREASURER AND                           2002    $134,335         --              33,333               --
     ASSISTANT SECRETARY                     2001    $199,615         --                --                 --

Kenneth J. Horner, Jr.(3)                    2003    $156,024         --              20,000               --
     FORMER EXECUTIVE VICE PRESIDENT -       2002    $164,100         --              33,333               --
     PROJECT/PROCESS MANAGEMENT              2001    $187,693         --               7,000               --
</TABLE>

---------------------------------
(1)  All options were granted under the Incentive Plan.

(2)  Mr. Espel is currently the Treasurer and Assistant Secretary of the Company
     and also served as Chief Financial Officer until July 2001.

(3)  Mr. Horner served as Executive Vice President - Project/Process Management
     during fiscal 2003 and left the Company in February 2003.


                                       69
<PAGE>


OPTIONS GRANTED

         The following table provides information regarding the persons named in
the foregoing Summary Compensation Table who received an option grant during
fiscal 2003:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                      POTENTIAL REALIZABLE VALUE AT
                             NUMBER OF      PERCENT OF                                   ASSUMED ANNUAL RATES OF
                              SHARES      TOTAL OPTIONS     EXERCISE                    STOCK PRICE APPRECIATION
                            UNDERLYING      GRANTED TO      OR BASE                        FOR OPTION TERM(1)
                              OPTIONS      EMPLOYEES IN    PRICE PER    EXPIRATION         ------------------
NAME                          GRANTED      FISCAL 2003       SHARE       DATE              5%             10%
----                          -------      -----------       -----       ----              --             ---
<S>                          <C>               <C>          <C>         <C>             <C>             <C>
Ronald D. Offutt             30,000(2)         14.3%        $5.35       6/3/07          $44,343         $97,987

Christi J. Offutt            30,000(2)         14.3%        $5.35       6/3/07          $44,343         $97,987
                              5,000(2)          2.4%        $5.35       6/3/12          $16,823         $42,633

Steven B. Dewald             25,000(2)         11.8%        $5.35       6/3/07          $36,953         $81,656
                              5,000(2)          2.4%        $5.35       6/3/12          $16,823         $42,633

Kenneth J. Horner            15,000(2)          7.1%        $5.35       6/3/07          $22,172         $48,993
                              5,000(2)          2.4%        $5.35       6/3/12          $16,823         $42,633
</TABLE>

(1)  The five and ten percent rates of appreciation are set by the rules of the
     Securities and Exchange Commission and are not intended to forecast
     possible future appreciation, if any, of the price of Common Stock.

(2)  This option was granted under the Incentive Plan on June 4, 2002 at the
     then fair market value of Common Stock. It became exercisable in full at
     the date of grant.







                                       70
<PAGE>


OPTION EXERCISES AND OPTION VALUES

         The following table provides information regarding option exercises and
the value of unexercised options held by the persons named in the foregoing
Summary Compensation Table:

                   AGGREGATED OPTION EXERCISES IN FISCAL 2003
                   AND OPTION VALUES AT THE END OF FISCAL 2003

<TABLE>
<CAPTION>
                                                                                          VALUE OF UNEXERCISED
                                SHARES                 NUMBER OF UNEXERCISED OPTIONS      IN-THE-MONEY OPTIONS
                               ACQUIRED                    AT JANUARY 31, 2003            AT JANUARY 31, 2003(1)
                                 ON          VALUE     ----------------------------    ----------------------------
NAME                           EXERCISE    REALIZED    EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
----                           --------    --------    -----------    -------------    -----------    -------------
<S>                               <C>         <C>        <C>               <C>           <C>                   <C>
Ronald D. Offutt                  0           0          160,000              --              --               --
Christi J. Offutt                 0           0           73,133           4,700         $57,333               --
Steven B. Dewald                  0           0           75,000              --         $47,250               --
Thomas K. Espel                   0           0           59,333           6,500         $57,333               --
Kenneth J. Horner, Jr.            0           0           58,133           4,700         $57,333               --
</TABLE>

(1)  Value based on the difference between the fair market value of one share of
     Class A Common Stock at January 31, 2003 ($5.02) and the exercise price of
     the options ranging from $3.00 to $15.50 per share. Options are
     in-the-money if the market price of the shares exceeds the option exercise
     price.

CONFIDENTIALITY AGREEMENTS

         Option grants to officers of the Company are conditioned upon the
recipient having signed an agreement regarding confidential information. These
agreements generally prohibit disclosure of confidential information to anyone
outside the Company both during and after employment. In addition, option grants
to executive officers of the Company are conditioned upon the recipient having
signed an agreement regarding non-competition and inventions. These agreements
generally restrict the employee from competing with the Company for a period of
time after termination of employment with the Company, and provides any
inventions or other works of authorship relating to or resulting from the
employee's work for the Company will be the exclusive property of the Company.

COMPENSATION OF DIRECTORS

         Directors who are not employees or officers of the Company receive
$1,000 per month and $500 for each Board and committee meeting attended.
Directors who are employees or officers of the Company do not receive additional
compensation for service as a director. In addition, all directors are entitled
to be reimbursed for certain expenses in connection with attendance of Board and
committee meetings.

         The Incentive Plan provides that a non-employee who becomes a director
of the Company will receive an option to purchase 10,000 shares of Class A
Common Stock, with such vesting periods as the Board or the Compensation
Committee may determine. Directors are eligible to receive options in addition
to these initial grants. On June 4, 2002, each non-employee director of the
Company received an option grant of 2,000 shares at an exercise price of $5.35
that vested immediately on the date of grant.


                                       71
<PAGE>


         On December 16, 2002, after receiving a letter from Ronald D. Offutt,
the Chairman of the Board of Directors, Chief Executive Officer and majority
stockholder of the Company, expressing an interest in acquiring all of the
shares of the Class A Common Stock of the Company that Mr. Offutt does not
currently own or control, the Company's Board of Directors appointed a Special
Committee to evaluate the fairness of the offer and make a recommendation with
respect to the offer. Each member of the Special Committee is entitled to
payment by the Company of a meeting fee of $1,000 (except for the chair of the
Special Committee, Norman M. Jones, who will receive a meeting fee of $2,000).
In addition, the Company has agreed to reimburse the Special Committee for all
out-of-pocket expenses incurred in connection with service on the Special
Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         During fiscal 2003, no member of the Compensation Committee (i) was an
officer, former officer or employee of the Company, except Mr. Knoll, or (ii)
had any business relationship or conducted any transactions with the Company,
other than the relationships disclosed under Item 13 "Certain Relationships and
Related Transactions" in this Form 10-K involving Mr. Knoll.

         During fiscal 2003, no officer of the Company served as (i) a member of
the compensation committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose officers served on the Board, other
than Messrs. Offutt and Knoll with respect to the Offutt Entities, Mr. Espel
with respect to Ag Capital, and Ms. Offutt with respect to PROffutt Limited
Partnership (an Offutt Entity), or (ii) a director of another entity, one of
whose officers served on the Board, other than Messrs. Offutt and Knoll with
respect to the Offutt Entities and Mr. Espel with respect to Ag Capital.








                                       72
<PAGE>


             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

         The Compensation Committee of the Board (the "Compensation Committee")
is authorized to recommend compensation for the Company's directors and
corporate officers, review compensation for the Company's operating officers,
review the Company's retirement, health and welfare plans that cover
substantially all employees (including the management of such plans), and
administer the Incentive Plan (including determining the participants in the
Incentive Plan and the amount, timing and other terms and conditions of awards
under the Incentive Plan). During fiscal 2003, the Compensation Committee was
comprised of Bradford M. Freeman, Allan F. Knoll and James D. Watkins. The
Compensation Committee has furnished this report on executive compensation for
fiscal 2003.

COMPENSATION PHILOSOPHY AND OBJECTIVES

         The Company has developed a compensation policy that is designed to
attract and retain executive officers responsible for the success of the Company
and to motivate these persons to enhance long-term stockholder value. The
executive compensation program presently consists primarily of annual base
salary, short-term incentives in the form of annual cash bonuses, and long-term
incentives in the form of stock options.

BASE SALARY

         Base salaries for executive officers of the Company are determined
annually. This assessment involves a number of criteria and information
including individual performance, cost of living and total compensation being
paid for comparable positions at companies with which the Company competes for
executive and management talent (e.g., specialty retailers such as equipment and
truck dealership and rental companies). Principles of internal equity are also
considered by evaluating salaries of comparable levels of responsibility within
the Company.

CASH BONUS

         All executive officers are eligible to receive annual cash bonuses. The
amount and performance criteria are determined annually and are based, in part,
on an assessment of total compensation being paid for comparable positions at
companies with which the Company competes for executive and management talent.

         Cash bonuses for executive corporate officers are based on individual
performance and the Company's overall performance. Cash bonuses for executive
operating officers are determined based on achievement of a variety of
performance factors and criteria, including targeted return on assets, earnings
per share growth, efficiency of asset management, profitability, sales growth,
productivity and product support. Bonuses accrue monthly based on performance
targets and are paid at the end of the fiscal year.

STOCK OPTION PROGRAM

         The Company adopted the Incentive Plan in connection with becoming a
public company as a mechanism to advance the best interests of the Company and
its stockholders by attracting, retaining and motivating employees, directors,
advisors and consultants of the Company. The Incentive Plan provides for the
grant of stock options (which may be non-qualified stock options or incentive
stock options for tax purposes), stock appreciation rights issued independent of
or in tandem with such options ("SARs"), restricted stock awards and performance
stock awards, thereby increasing the personal stake of Incentive


                                       73
<PAGE>


Plan participants in the continued success and growth of the Company. Equity
participation in the Company, particularly through the grant of stock options,
is anticipated to continue as an important part of future executive and
management compensation.

CEO COMPENSATION

         Mr. Offutt serves as the Company's Chief Executive Officer since the
Office of the Chairman was dissolved in December 2000. Mr. Offutt did not
receive a salary in fiscal 2003. In addition, Mr. Offutt was not compensated for
the personal guarantee he provided to Deere. The Compensation Committee believes
that Mr. Offutt was fully motivated to enhance long-term stockholder value as a
result of his beneficial ownership of the Common Stock of the Company (see
"Beneficial Ownership of Management").

SECTION 162(m)

         The Omnibus Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code of 1986, as amended (the "Code"), limiting corporate
deductions to $1,000,000 for certain compensation paid to the chief executive
officer and each of the four other most highly compensated executives of
publicly held companies. The Compensation Committee does not anticipate the
Company will pay "compensation" within the meaning of Section 162(m) to such
executive officers in excess of $1,000,000 in the foreseeable future. Therefore,
the Compensation Committee and the Company do not have a policy at this time
regarding qualifying compensation paid to its executive officers for
deductibility under Section 162(m), but the Compensation Committee will
formulate a policy on behalf of the Company if compensation levels approach
$1,000,000

         The following members of the Compensation Committee are giving this
report:

                                            Bradford M. Freeman
                                            Allan F. Knoll
                                            James D. Watkins






                                       74
<PAGE>


                          COMPARATIVE PERFORMANCE GRAPH

         The following performance graph compares the performance of the
Company's Common Stock to the Standard & Poor's 500 Stock Index and the Standard
& Poor's Construction & Farm Machinery Index. Previously, the Company's Common
Stock was compared to Standard & Poor's Diversified Machinery Group Index. In
2001, Standard and Poor deleted the Diversified Machinery Group Index under the
restructuring and transition to the Global Industry Classification Standard
"GICS". This graph assumes that $100 was invested in the Company's Common Stock
and in each of the two indices at January 31, 1998 and that subsequent dividends
were reinvested in connection with those indices.



                              [PLOT POINTS CHART]

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                              1/98           1/99          1/00           1/01           1/02           1/03
-------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>           <C>            <C>            <C>            <C>
RDO                          100.00          45.95         32.09          21.62          19.35          27.14
-------------------------------------------------------------------------------------------------------------
S & P Machinery              100.00          77.88         90.60          94.36         109.39          99.73
-------------------------------------------------------------------------------------------------------------
S & P 500                    100.00         132.49        146.20         144.88         121.49          93.52
-------------------------------------------------------------------------------------------------------------
</TABLE>






                                       75
<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

                             PRINCIPAL STOCKHOLDERS

     The following table sets forth information with respect to each stockholder
who the Company believes to be a beneficial owner of more than five percent of
either class of outstanding Common Stock. Percentages are calculated based upon
shares outstanding as of March 31, 2003:

<TABLE>
<CAPTION>
                                           NUMBER OF         PERCENT        NUMBER OF         PERCENT
NAME AND ADDRESS                         CLASS A SHARES     OF CLASS      CLASS B SHARES     OF CLASS
----------------                         --------------     --------      --------------     --------
<S>                                         <C>               <C>           <C>                <C>
Rutabaga Capital Management(1)              545,100           10.5%                --             --
     64 Broad Street
     Boston, Massachusetts  02109

Dimensional Fund Advisors Inc.(2)           370,550            6.5%                --             --
     1299 Ocean Avenue
     Santa Monica, California  90401

Ronald D. Offutt(3)                         675,392           12.7%         7,450,492          100.0%
     2829 South University Drive
     Fargo, North Dakota  58103

Allan F. Knoll(4)                           674,670           12.7%                --             --
     2829 South University Drive
     Fargo, North Dakota  58103

Paul T. Horn(4)                             453,080            8.7%                --             --
     2829 South University Drive
     Fargo, North Dakota  58103
</TABLE>

----------------------
(1)  Based solely upon information contained in Schedule 13G of Rutabaga Capital
     Management ("Rutabaga") dated February 19, 2003. According to this filing
     with the Securities and Exchange Commission ("SEC"), Rutabaga is a
     registered investment advisor and has sole voting power over 285,900 shares
     and shared voting power over 259,200 shares and has sole dispositive power
     over all of these shares.

(2)  Based solely upon information contained in Schedule 13G of Dimensional Fund
     Advisors Inc. ("DFA") dated February 3, 2003. According to this filing with
     the SEC, DFA is a registered investment advisor, and these shares are owned
     by registered investment companies to which DFA furnishes investment advice
     and by other investment vehicles for which DFA serves as investment
     manager. This filing also indicates that DFA has sole voting power and sole
     dispositive power over these shares.

(3)  Mr. Offutt is the Company's founder and principal stockholder. See
     "Information about Directors" above and "Beneficial Ownership of
     Management" below for more information about Mr. Offutt and his beneficial
     ownership of Common Stock.

(4)  See "Information about Directors" above and "Beneficial Ownership of
     Management" below for more information about Mr. Knoll, who is a director
     and officer of the Company and Mr. Horn, who is a director of the Company,
     and their respective beneficial ownership of Class A Common Stock.


                                       76
<PAGE>


                       BENEFICIAL OWNERSHIP OF MANAGEMENT

     The following table sets forth information regarding the beneficial
ownership of Common Stock of the Company as of March 31, 2003, unless otherwise
noted, for (a) each director and officer named in the Summary Compensation Table
(set forth below) except for Kenneth J. Horner who is no longer an officer as of
March 31, 2003, and (b) all officers and directors of the Company as a group.
The address for all officers and directors of the Company is 2829 South
University Drive, Fargo, North Dakota 58103.

<TABLE>
<CAPTION>
                                      NUMBER OF SHARES        PERCENT OF TOTAL
                                --------------------------      CLASS A AND       PERCENT OF TOTAL
NAME OF STOCKHOLDER             CLASS A(1)         CLASS B     CLASS B SHARES      VOTING POWER(2)
-------------------             ----------         -------     --------------      ---------------
<S>                             <C>              <C>                   <C>                  <C>
Ronald D. Offutt                675,392(3)(4)    7,450,492             63.5%                86.7%
Allan F. Knoll                  674,670(5)              --              5.3%                 1.9%
Paul T. Horn                    453,080(6)              --              3.6%                 1.3%
Bradford M. Freeman              79,000                 --               *                    *
Ray A. Goldberg                  30,500                 --               *                    *
Norman M. Jones                 107,615                 --               *                    *
James D. Watkins                 64,000                 --               *                    *
Edward T. Schafer                12,000                 --               *                    *
Christi J. Offutt                86,033                 --               *                    *
Steven B. Dewald                 95,000                 --               *                    *
Thomas K. Espel                  76,906                 --               *                    *
All officers and directors
  as a group (11 persons)     1,400,896(3)(4)    7,450,492             67.1%                87.8%
</TABLE>

* Less than one percent.

(1)  Includes 160,000, 32,500, 32,500, 29,000, 29,000, 29,000, 29,000, 12,000,
     74,533, 75,000, 59,333, and 561,866 shares subject to options which are
     held by Offutt, Knoll, Horn, Freeman, Goldberg, Jones, Watkins, Schafer,
     Offutt, Dewald, Espel and all officers and directors as a group,
     respectively, which were exercisable on or within 60 days after March 31,
     2003.

(2)  In calculating the percentage of total voting power, the voting power of
     shares of Class A Common Stock (one vote per share) and Class B Common
     Stock (four votes per share) is aggregated.

(3)  Excludes 7,450,492 shares of Class A Common Stock into which Mr. Offutt's
     7,450,492 shares of Class B Common Stock are convertible on a one-for-one
     basis.

(4)  Excludes 12,903 shares of Class A Common Stock owned by Mr. Offutt's spouse
     as to which shares he disclaims any beneficial ownership.

(5)  Includes 608,595 shares of Class A Common Stock that Mr. Knoll has the
     right to acquire from Mr. Offutt pursuant to an option agreement. Excludes
     100 shares of Class A Common Stock owned by Mr. Knoll's spouse as to which
     shares he disclaims any beneficial ownership.

(6)  Includes 344,705 shares of Class A Common Stock that Mr. Horn has the right
     to acquire from Mr. Offutt pursuant to an option agreement.


                                       77
<PAGE>


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table summarizes outstanding options under the Company's
1996 Stock Incentive Plan as of January 31, 2003. Options granted in the future
under the plan are within the discretion of our Compensation Committee and
therefore cannot be ascertained at this time.

<TABLE>
<CAPTION>
                                                                                            NUMBER OF SECURITIES
                                                                                           REMAINING AVAILABLE FOR
                                  NUMBER OF SECURITIES TO BE      WEIGHTED-AVERAGE      FUTURE ISSUANCE UNDER EQUITY
                                    ISSUED UPON EXERCISE OF       EXERCISE PRICE OF          COMPENSATION PLANS
                                     OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,        (EXCLUDING SECURITIES
         PLAN CATEGORY                WARRANTS AND RIGHTS        WARRANTS AND RIGHTS      REFLECTED IN COLUMN (A))
         -------------                -------------------        -------------------      ------------------------
<S>                                         <C>                         <C>                        <C>
Equity compensation plans
approved by security holders                897,399                     $7.47                      365,631

Equity compensation plans not
approved by security holders                     --                        --                          --

Total                                       897,399                     $7.47                      365,631
</TABLE>

         The Company's only equity compensation plan is the 1996 Stock Incentive
Plan. We do not have any other equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The Company historically has engaged, and expects to engage in the
future, in business transactions with various Offutt Entities, including Ag
Capital, ACL Company, LLC ("ACL") and Farmers Equipment Rental, Inc. ("FER"),
financing institutions which are controlled by Mr. Offutt and provide working
capital and floor plan financing to the Company and/or financing to the
Company's customers. Messrs. Offutt and Knoll each serve as officers or
directors and have ownership interests in various of the Offutt Entities,
including all of the Offutt Entities which have engaged in and will continue to
engage in transactions with the Company, as described below. All transactions
between the Company and any of the Offutt Entities or any of the Company's
officers, directors, principal stockholders and their affiliates are approved
both by a majority of all members of the Board and by a majority of the
independent and disinterested outside directors, and are on terms believed to be
no less favorable to the Company than could be obtained from unaffiliated third
parties.

         The Company had sales to various Offutt Entities of equipment, trucks
and related parts and service totaling $2.3 million in fiscal 2003. At times
during fiscal 2003, the Company leased its executive offices and 21 of its store
locations and real estate for a potential dealership site from an Offutt Entity,
and leased some of its service vehicles from ACL. Total rent expense for these
leases was $3.6 million in fiscal 2003. These leases have terms expiring at
various times from 2003 to 2012. In November 2002, the


                                       78
<PAGE>


real estate for a potential dealership site that was being leased from an Offutt
Entity was purchased for the original cost of $1.1 million pursuant to the
Company's original commitment.

         The Company receives corporate support services from various Offutt
Entities, including office space for its executive offices, use of conference
and meeting facilities, use of an aircraft for Company business, administration
of the Company's tax exempt voluntary employee benefit trust, real estate
management services, and clerical and legal services. Total charges for such
services were $790,000 in fiscal 2003. All such services are provided to the
Company pursuant to a corporate services agreement, which is terminable by the
Company in whole or in part on 30 days' notice, on the same cost basis as in
prior years (based on pro rata usage of services or at a fixed charge).

         Ag Capital, ACL and FER in past years have provided financing to the
Company's customers. The total amount of such customer financing outstanding as
of the end of fiscal 2003 was $460,000. To facilitate sales to certain
customers, the Company guarantees a portion of the outstanding balances of
certain customer notes and lease contracts financed by third parties, including
customer financing provided by Ag Capital, ACL and FER. The amount guaranteed by
the Company to Ag Capital, ACL and FER for customer financing was $46,000 as of
January 31, 2003.

         In the past, the Company financed certain of its working capital needs,
primarily inventory financing for non-Deere equipment, receivables, property and
equipment and acquisitions, through Ag Capital. These financing arrangements
were paid off during fiscal 2003. Interest rates for these financing
arrangements were based on LIBOR and the prime rate. Total interest paid by the
Company to Ag Capital was $243,000 in fiscal 2003. The Company currently has no
lending relationship with Ag Capital.

         Under an agreement with Deere, Mr. Offutt personally guarantees all
Company obligations to Deere. Mr. Offutt has the right to terminate his personal
guaranty at any time, which would require the Company to obtain a letter of
credit in an amount meeting Deere's then current guidelines from a bank
acceptable to Deere. As of January 31, 2003, the required amount of the letter
of credit to replace Mr. Offutt's personal guaranty was approximately $14.9
million. The Company estimates that it would cost approximately $299,000 per
year to replace Mr. Offutt's personal guarantee with a letter of credit.

ITEM 14. CONTROLS AND PROCEDURES

         The Company's disclosure controls and procedures are designed to ensure
that information required to be disclosed in reports that the Company files or
submits under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission. The Company's Chief
Executive Officer and the Chief Financial Officer have reviewed the
effectiveness of the Company's "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) within
the last ninety days and have concluded that the disclosure controls and
procedures are effective. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls subsequent to the last day they were evaluated by the Company's Chief
Executive Officer and Chief Financial Officer.


                                       79
<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a)(1) FINANCIAL STATEMENTS.
            ---------------------

          o    Consolidated Balance Sheets as of January 31, 2003 and 2002

          o    Consolidated Statements of Operations for the years ended January
               31, 2003, 2002 and 2001

          o    Consolidated Statements of Stockholders' Equity for the years
               ended January 31, 2003, 2002 and 2001

          o    Consolidated Statements of Cash Flows for the years ended January
               31, 2003, 2002 and 2001

          o    Notes to Consolidated Financial Statements

          o    Reports of Independent Accountants

     (a)(2) FINANCIAL STATEMENT SCHEDULES.
            ------------------------------

          Schedule II, Valuation and Qualifying Accounts for the year ended
     January 31, 2003 is included in this Form 10-K at page 84, including
     Reports of Independent Accountants at page 85.

          All other financial statement schedules are omitted because of the
     absence of the conditions under which they are required or because the
     information required is included in the consolidated financial statements
     or notes thereto.

          (a)(3) EXHIBITS.
                 ---------

          The exhibits to this Form 10-K are listed in the Exhibit Index on
     pages 87 through 91 below. Copies of these exhibits are available upon
     request to RDO Equipment Co., Stockholder Relations, P. O. Box 7160, Fargo,
     North Dakota 58106-7160 or to invest@rdoequipment.com.

          (b) REPORTS ON FORM 8-K.
              --------------------

          The Company filed a Current Report on Form 8-K dated December 17, 2002
     under Item 5 regarding the letter received from Ronald D. Offutt expressing
     an interest in acquiring all of the shares of the Class A Common Stock of
     the Company that Mr. Offutt does not currently own or control.

          (c) See Exhibit Index on pages 87 through 91 below for a list of each
     management contract or compensatory plan or arrangement required to be
     filed as an exhibit to the Annual Report on Form 10-K pursuant to Item
     15(c).


                                       80
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date:  April 22, 2003
                                        RDO EQUIPMENT CO.

                                        By: /s/ Ronald D. Offutt
                                            ------------------------------------
                                            Ronald D. Offutt
                                            Chairman and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on April 22, 2003 by the following persons on
behalf of the registrant and in the capacities indicated.


Signature                        Title
---------                        -----


/s/ Ronald D. Offutt             Chairman of the Board, Chief Executive Officer,
----------------------------     President and Director (principal executive
Ronald D. Offutt                 officer)


/s/ Christi J. Offutt            Chief Operating Officer and Director
----------------------------
Christi J. Offutt


/s/ Steven B. Dewald             Chief Financial Officer
----------------------------     (principal financial officer)
Steven B. Dewald


/s/ David M. Horner              Director of Accounting and Reporting
----------------------------     (principal accounting officer)
David M. Horner


/s/ Allan F. Knoll               Secretary and Director
----------------------------
Allan F. Knoll


/s/ Paul T. Horn                 Director
----------------------------
Paul T. Horn


/s/ Bradford M. Freeman          Director
----------------------------
Bradford M. Freeman


/s/ Ray A. Goldberg              Director
-----------------------------
Ray A. Goldberg


/s/ Norman M. Jones              Director
----------------------------
Norman M. Jones


/s/ James D. Watkins             Director
----------------------------
James D. Watkins


/s/ Edward T. Schafer            Director
----------------------------
Edward T. Schafer


                                       81
<PAGE>


                                 CERTIFICATIONS

I, Ronald D. Offutt, certify that:

1.   I have reviewed this annual report on Form 10-K of RDO Equipment Co.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 22, 2003                               /s/ Ronald D. Offutt
                                                   -----------------------------
                                                   Ronald D. Offutt
                                                   Chief Executive Officer
                                                   (principal executive officer)


                                       82
<PAGE>


                                 CERTIFICATIONS

I, Steven B. Dewald, certify that:

1.   I have reviewed this annual report on Form 10-K of RDO Equipment Co.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 22, 2002                               /s/ Steven B. Dewald
                                                   -----------------------------
                                                   Steven B. Dewald
                                                   Chief Financial Officer
                                                   (principal financial officer)


                                       83
<PAGE>

                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED JANUARY 31, 2003, 2002, AND 2001

<TABLE>
<CAPTION>
                                                         ADDITIONS
                                        BALANCE AT       CHARGED TO                     BALANCE AT
                                        BEGINNING          COSTS                          END OF
                                        OF PERIOD       AND EXPENSES      DEDUCTIONS      PERIOD
--------------------------------------------------------------------------------------------------
<S>                                     <C>              <C>              <C>           <C>
January 31, 2003:
  Accounts Receivable:
     Allowance for doubtful accounts    $2,665,557       $4,642,399       $4,644,084    $2,663,872
  Accrued Liabilities:
     Restructuring reserve                 235,655               --          235,655            --

January 31, 2002:
  Accounts Receivable:
     Allowance for doubtful accounts     2,475,860        3,515,683        3,325,986     2,665,557
  Accrued Liabilities:
     Restructuring reserve                 985,232               --          749,577       235,655

January 31, 2001:
  Accounts Receivable:
     Allowance for doubtful accounts     1,873,695        1,973,128        1,370,963     2,475,860
  Accrued Liabilities:
     Restructuring reserve                      --          985,232               --       985,232
==================================================================================================
</TABLE>











                                       84
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders,
of RDO Equipment Co.

Our audit of the consolidated financial statements referred to in our report
dated March 14, 2003, except for the seventh paragraph of Note 11 for which the
date is March 31, 2003, appearing in the 2003 Annual Report on Form 10-K also
included an audit of the financial statement schedule listed in Item 15(a)(2) of
this Form 10-K. In our opinion, the financial statement schedule for the year
ended January 31, 2003 presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. The financial statement schedule of RDO
Equipment Co. for the years ended January 31, 2002 and 2001, was audited by
other independent accountants who have ceased operations. Those independent
accountants expressed an unqualified opinion on that financial statement
schedule in their report dated March 8, 2002.

/S/ PRICEWATERHOUSECOOPERS LLP

Minneapolis, Minnesota
March 14, 2003










                                       85
<PAGE>


The following report is a copy of a report previously issued by Arthur Andersen
LLP and has not been reissued by Arthur Andersen LLP. This report originally
applied to supplemental Schedule II - Valuation and Qualifying Accounts for the
years ended January 31, 2002, 2001 and 2000. The financial statement schedule
information for the year ended January 31, 2000, is not included in this Form
10-K.

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To RDO Equipment Co.:

We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of RDO Equipment Co. and
Subsidiaries included in this Form 10-K and have issued our report thereon dated
March 8, 2002. Our audit was made for the purpose of forming an opinion on the
basic consolidated financial statements taken as a whole. The schedule of
valuation and qualifying accounts appearing elsewhere in this Form 10-K is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

Arthur Andersen LLP

Minneapolis, Minnesota,
March 8, 2002









                                       86
<PAGE>


              EXHIBIT INDEX FOR FISCAL YEAR ENDED JANUARY 31, 2003

<TABLE>
<CAPTION>
ITEM NO.    ITEM                                             METHOD OF FILING
--------    ----                                             ----------------
<S>         <C>                                              <C>
3.1         Certificate of Incorporation                     Incorporated by reference to Exhibit 3.1 to the
                                                             Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

3.2         Bylaws                                           Incorporated by reference to Exhibit 3.2 to the
                                                             Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

4.1         Specimen Form of the Company's Class A Common    Incorporated by reference to Exhibit 4.2 to the
            Stock Certificate                                Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

4.2         Specimen Form of the Company's Class B           Incorporated by reference to Exhibit 4.3 to the
            Common Stock Certificate                         Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

10.1        Agreement between Ronald D. Offutt, RDO          Incorporated by reference to Exhibit 10.1 to the
            Equipment Co., John Deere Company and John       Company's Registration Statement on Form S-1
            Deere Construction Equipment Company             (File No. 333-13267).

10.2        Agreement between RDO Equipment Co., John        Incorporated by reference to Exhibit 10.15 to
            Deere Company and John Deere Construction        the Company's Registration Statement on Form S-1
            Equipment Company                                (File No. 333-13267).

10.3        Form of Deere Agricultural Dealer Agreement      Incorporated by reference to Exhibit 10.2 to the
            Package                                          Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

10.4        Dealer Agreement dated December 28, 2000         Incorporated by reference to Exhibit 10.1 to the
            between John Deere Construction Equipment        Company's Form 8-K dated December 29, 2001.
            Company and RDO Construction Equipment Co.       (File No. 1-12641)

10.5        Form of Deere Construction Equipment Dealer      Incorporated by reference to Exhibit 10.17 to
            Agreement for Special Products                   the Company's Annual Report on Form 10-K for the
                                                             fiscal year ended January 31, 2000. (File No.
                                                             1-12641)

10.6        Deere Agricultural Dealer Finance Agreement      Incorporated by reference to Exhibit 10.6 to the
                                                             Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).

10.7        Deere Construction Dealer Finance Agreement      Incorporated by reference to Exhibit 10.7 to the
                                                             Company's Registration Statement on Form S-1
                                                             (File No. 333-13267).
</TABLE>


                                       87
<PAGE>


<TABLE>
<CAPTION>
ITEM NO.    ITEM                                               METHOD OF FILING
--------    ----                                               ----------------
<S>         <C>                                                <C>
10.8        Indemnification Agreement between RDO              Incorporated by reference to Exhibit 10.16 to
            Equipment Co. and Deere & Company                  the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 2000. (File
                                                               No. 1-12641)

10.9        Release and Covenant Not to Sue dated December     Incorporated by reference to Exhibit 10.2 to
            28, 2000 by RDO Equipment Co., RDO                 the Company's Form 8-K dated December 29, 2001.
            Construction Equipment Co., and Ronald D.          (File No. 1-12641)
            Offutt and accepted by John Deere Construction
            Equipment Company

10.10       Settlement Agreement and Mutual Release            Incorporated by reference to Exhibit 10.10 to
            between and among Ronald D. Offutt, RDO            the Company's Annual Report on Form 10-K for
            Equipment Co., its affiliates and                  the fiscal year ended January 31, 2001. (File
            subsidiaries, John Deere Construction              No. 1-12641)
            Equipment Company, its affiliates and
            subsidiaries and Nortrax, Inc., its affiliates
            and subsidiaries

10.11       Settlement Agreement and Mutual Release            Incorporated by reference to Exhibit 10.11 to
            between and among RDO Equipment Co., its           the Company's Annual Report on Form 10-K for
            affiliates and subsidiaries, including RDO         the fiscal year ended January 31, 2001. (File
            Agriculture Equipment Co. and Salinas              No. 1-12641)
            Equipment Distributors, Inc. and John Deere
            Company - a Division of Deere & Company

10.12       Corporate Service Agreement between RDO            Incorporated by reference to Exhibit 10.10 to
            Equipment Co. and R.D. Offutt Company, dated       the Company's Registration Statement on Form
            as of November 1, 1996                             S-1 (File No. 333-13267).

10.13       RDO Equipment Co. 1996 Stock Incentive Plan*       Incorporated by reference to Exhibit 10.8 to
                                                               the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 1997. (File
                                                               No. 1-12641)

10.14       Form of Agreement re: Incentive Stock Option*      Incorporated by reference to Exhibit 10.4 to
                                                               the Company's Quarterly Report on Form 10-Q for
                                                               the fiscal quarter ended July 31, 2001. (File
                                                               No. 1-12641)

10.15       Form of Agreement re: Non-Statutory Stock          Incorporated by reference to Exhibit 10.5 to
            Option*                                            the Company's Quarterly Report on Form 10-Q for
                                                               the fiscal quarter ended July 31, 2001. (File
                                                               No. 1-12641)

10.16       Form of Agreement re: Confidentiality,             Incorporated by reference to Exhibit 10.15 to
            Assignment of Inventions and Non-Competition*      the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 1997. (File
                                                               No. 1-12641)
</TABLE>


                                       88
<PAGE>


<TABLE>
<CAPTION>
ITEM NO.    ITEM                                               METHOD OF FILING
--------    ----                                               ----------------
<S>         <C>                                                <C>
10.17       Form of Agreement re: Confidential Information     Incorporated by reference to Exhibit 10.6 to
            and Inventions*                                    the Company's Quarterly Report on Form 10-Q for
                                                               the fiscal quarter ended July 31, 2001. (File
                                                               No. 1-12641)

10.18       Form of Amended and Restated Indemnification       Filed herewith.
            Agreement and Guarantee*

10.19       RDO Equipment Co. Credit Agreement with Ag         Incorporated by reference to Exhibit 10.2 to
            Capital Company                                    the Company's Quarterly Report on Form 10-Q for
                                                               the fiscal quarter ended October 31, 2000.
                                                               (File No. 1-12641)

10.20       Credit Agreement Modification to RDO Equipment     Incorporated by reference to Exhibit 10.20 to
            Co. Credit Agreement with Ag Capital Company       the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 2002. (File
                                                               No. 1-12641)

10.21       First Addendum to Amended and Restated             Filed herewith.
            Security Agreement between John Deere
            Construction and Forestry Company (f/k/a John
            Deere Construction Equipment Company, Deere
            Credit, Inc. and John Deere Company and RDO
            Agriculture Equipment Co., RDO Equipment Co.,
            RDO Financial Services Co., RDO Material
            Handling Co., RDO Truck Center Co. and RDO
            Construction Equipment Co.

10.22       Guaranty by RDO Equipment Co. of Loan              Incorporated by reference to Exhibit 10.2 to
            Agreement between John Deere Construction &        the Company's Quarterly Report on Form 10-Q for
            Forestry Company, Deere Credit, Inc., and John     the fiscal quarter ended July 31, 2002. (File
            Deere Company and RDO Agriculture Equipment        No. 1-12641)
            Co., RDO Construction Equipment Co., RDO
            Financial Services Co. and RDO Material
            Handling Co.

10.23       Loan and Security Agreement between RDO            Incorporated by reference to Exhibit 10.1 to
            Construction Equipment Co. and CitiCapital         the Company's Quarterly Report on Form 10-Q for
            Commercial Corporation                             the fiscal quarter ended October 31, 2002.
                                                               (File No. 1-12641)

10.24       Loan and Security Agreement between RDO            Incorporated by reference to Exhibit 10.2 to
            Agriculture Equipment Co. and CitiCapital          the Company's Quarterly Report on Form 10-Q for
            Commercial Corporation                             the fiscal quarter ended October 31, 2002.
                                                               (File No. 1-12641)
</TABLE>


                                       89
<PAGE>


<TABLE>
<CAPTION>
ITEM NO.    ITEM                                               METHOD OF FILING
--------    ----                                               ----------------
<S>         <C>                                                <C>
10.25       Loan and Security Agreement between RDO            Incorporated by reference to Exhibit 10.3 to
            Material Handling Co. and CitiCapital              the Company's Quarterly Report on Form 10-Q for
            Commercial Corporation                             the fiscal quarter ended October 31, 2002.
                                                               (File No. 1-12641)

10.26       Third Amended and Restated Loan Agreement          Filed herewith.
            between John Deere Construction and Forestry
            Company, Deere Credit, Inc., and John Deere
            Company and RDO Agriculture Equipment Co., RDO
            Construction Equipment Co., RDO Financial
            Services Co. and RDO Material Handling Co.

10.27       First Addendum to Third Amended and Restated       Filed herewith.
            Loan Agreement between John Deere Construction
            and Forestry Company, Deere Credit, Inc., and
            John Deere Company and RDO Agriculture
            Equipment Co., RDO Construction Equipment Co.,
            RDO Financial Services Co. and RDO Material
            Handling Co.

10.28       Second Addendum to Third Amended and Restated      Filed herewith.
            Loan Agreement between John Deere Construction
            and Forestry Company, Deere Credit, Inc., and
            John Deere Company and RDO Agriculture
            Equipment Co., RDO Construction Equipment Co.,
            RDO Financial Services Co. and RDO Material
            Handling Co.

10.29       Amendment to Loan and Security Agreement           Filed herewith.
            between RDO Construction Equipment Co. and
            CitiCapital Commercial Corporation

10.30       Amendment to Loan and Security Agreement           Filed herewith.
            between RDO Agriculture Equipment Co. and
            CitiCapital Commercial Corporation

10.31       Amendment to Loan and Security Agreement           Filed herewith.
            between RDO Material Handling Co. and
            CitiCapital Commercial Corporation
</TABLE>


                                       90
<PAGE>


<TABLE>
<CAPTION>
ITEM NO.    ITEM                                               METHOD OF FILING
--------    ----                                               ----------------
<S>         <C>                                                <C>
21.1        Subsidiaries                                       Filed herewith.

23.1        Consent of Independent Public Accountants          Filed herewith.

23.2        Consent of Independent Public Accountants          Incorporated by reference to Exhibit 23.1 to
                                                               the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 2002. (File
                                                               No. 1-12641)

99.1        Letter to Securities and Exchange Commission       Incorporated by reference to Exhibit 99.1 to
            Regarding Arthur Andersen LLP Representations      the Company's Annual Report on Form 10-K for
                                                               the fiscal year ended January 31, 2002. (File
                                                               No. 1-12641)

99.2        Certifications of CEO and CFO pursuant to          Filed herewith.
            Section 906 of the Sarbanes-Oxley Act of 2002,
            18 U.S.C. Section 1350
</TABLE>

-------------------------
*    Management contract or compensatory plan or arrangement filed as an exhibit
     pursuant to Item 15(c) of Form 10-K.









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