================================================================================
                                  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, 2002
                                       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. [ ]

       The aggregate market value of common equity held by persons other than
directors and officers was approximately $21 million as of March 31, 2002, based
on the last reported sale price at that date reported by the New York Stock
Exchange. At that date, 5,540,908 shares of Class A Common Stock and 7,450,492
shares of Class B Common Stock were outstanding for a total of 12,991,400 shares
of Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

       Portions of the proxy statement for the annual meeting to be held on June
4, 2002 ("Proxy Statement") are incorporated by reference in Part III.

================================================================================


<PAGE>
                         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 2002,
the Company operated 47 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 45% of the
Company's sales in fiscal 2002. No other supplier accounted for more than 10% of
the Company's new product sales in fiscal 2002. 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.

         For the fiscal year ended January 31, 2002, the Company's revenues were
generated from the following areas of business:

         New equipment and truck sales............................    50%
         Used equipment and truck sales...........................    19%
         Product support (parts and service revenues).............    30%
         Equipment rental.........................................     1%
         Financial services....................................... less than 1%

         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.



                                       2
<PAGE>


         The Company's business is organized, managed, and internally reported
as a single segment. Business line sales information is contained in Note 14 of
the Company's financial statements on pages 52 and 53 of this report and is
incorporated in this item by reference.

         During fiscal 2002, the Company was affected by various economic
conditions in all operating segments. The Company's agricultural operations
continued to reflect the challenging farm economy. 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 operations were adversely affected by the
depressed market demand for trucks.

CONSTRUCTION EQUIPMENT OPERATIONS

         The Company estimates that North American retail sales of new
construction equipment in its target product market in calendar 2001 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 83 construction dealers
who operate approximately 398 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 2001. As of the end of fiscal 2002, 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 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 to medium size
applications and related product support to their customers. Primary products
include John Deere backhoes, excavators, crawler dozers and four-wheel-drive
loaders. More recently, the Company began handling new products being introduced
into the market by Deere including articulated dump trucks, large excavators,
compact excavators, and large construction dozers. 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 2001 totaled
over $11 billion. Deere is the leading supplier of



                                       3
<PAGE>

agricultural 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 1.8 percent of Deere's North American sales of
agricultural equipment, parts and attachments in calendar 2001. As of the end of
fiscal 2002, 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 John Deere Company, 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 North American retail sales of heavy-duty
trucks in calendar 2001 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 128 dealers that operate
approximately 252 locations in the United States, while Volvo has approximately
132 dealers that operate approximately 215 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 Mack truck centers in Fargo and Grand
Forks, North Dakota. Its Volvo truck centers are located in Riverside,
California and Fargo and Grand Forks, North Dakota. The Company's truck centers
in Fargo, Grand Forks and Riverside also sell and service GMC trucks; and its
stores in Fargo, Grand Forks and Fontana, California handle Isuzu trucks. The
Company also conducts a used truck operation in Fontana, California. The
Company's truck centers are located in high truck traffic areas on or near major
highways.



                                       4
<PAGE>

         Trucks sold by the Company are generally classified as Class 4 through
Class 8 by the American Automobile 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, including body shops.

MATERIAL HANDLING EQUIPMENT OPERATIONS

         The Company estimates that North American retail sales of lift trucks
in its target product market in calendar 2001 totaled approximately $6 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 50 geographic sales territories with
approximately 200 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.

         Shortly after its appointment as a Hyster dealer in fiscal 1999, the
Company acquired the operating assets of two companies engaged in the
distribution, sale, service and rental of material handling equipment with
stores located in Grand Island, Lincoln and Omaha, Nebraska and North Sioux
City, South Dakota. This acquisition provided the Company with an established
platform which complemented its Hyster operations, including aerial and
high-reach man lifts manufactured by Genie, Grove, Skyjack and Upright and other
equipment used to move, protect, store or control products and materials in
manufacturing and distribution. During the second quarter of fiscal 2002, the
Company closed three of the acquired locations in Grand Island and Lincoln,
Nebraska and North Sioux City, South Dakota. The stores were closed to reduce
overhead in response to declining unit market potential and competitive
pressures in the material handling equipment business. The territories
associated with the closed stores are continuing to be serviced from the
remaining material handling locations in Eagan, Minnesota and Omaha, Nebraska.

         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.



                                       5
<PAGE>

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") 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 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,
Texas; Minneapolis, Minnesota; and Riverside, California 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 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 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




                                       6
<PAGE>

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, trucks 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 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. Floor plan financing
of truck inventories is primarily supplied by Volvo Commercial Finance LLC The
Americas ("Volvo Finance"), General Motors Acceptance Corporation ("GMAC"), and
CitiCapital. Rental equipment on- and off-balance sheet financing is primarily
provided by Deutsche Financial Services Corporation ("Deutsche Financial") and
Deere Credit. 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 Global N.V. ("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. Competing Deere agricultural stores may be located in
close proximity to the Company's agricultural equipment stores.



                                       7
<PAGE>

         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 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 2003.

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




                                       8
<PAGE>

of the Midwest and Southern California that the Company represents Deere.
Hitachi is a joint venture partner with Deere and generally offer 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 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, 2002, the
equity-to-asset ratio for the Company, construction operations and agricultural
operations were 41%, 37%, and 32%, 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




                                       9
<PAGE>

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, 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.

         RELEASE AND COVENANT NOT TO SUE. Related to the settlement of previous
legal proceedings with John Deere Construction & Forestry Company. ("JDCFC"),
the Company signed a Release and Covenant not to Sue agreement. 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 licensed from their respective owners. The




                                       10
<PAGE>

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 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, 2002, the Company employed 1,325 full-time employees.
Of this number, 7 employees were located at the Company's corporate offices and
employed in corporate administration. A total of 77 employees were employed in
field support roles located in various offices. The remaining employees were
involved in the Company's operations: 731 in construction operations, 347 in
agriculture operations and 163 in truck operations. None of the Company's
employees are covered by a collective bargaining agreement.

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




                                       11
<PAGE>

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; (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 Ronald D.
Offutt, the Company's Chairman, Chief Executive Officer and principal
stockholder, 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




                                       12
<PAGE>

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 audit. 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.

         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, 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



                                       13
<PAGE>

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 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 Volvo Finance)
and major independent finance companies (e.g., CitiCapital). To the extent such
financing cannot be



                                       14
<PAGE>

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.

         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 of these important factors (but
not necessarily all 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



                                       15
<PAGE>

                  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.

         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.

         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 2002, the Company owned the real estate for
seven of its stores and leased its executive offices, real estate for a
potential dealership site and 20 stores from an Offutt Entity (as defined in
Item 4A below). The Company also leased two administrative offices and 20 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                          5
         Minnesota                           8
         Montana                             2
         Nebraska                            1
         North Dakota                       13
         South Dakota                        3
         Texas                               6
         Washington                          2
         ------------------------------------------------------
         TOTAL LOCATIONS                    47
         ======================================================


ITEM 3.    LEGAL PROCEEDINGS.

         There are no material pending legal, governmental, administrative or
other proceedings to which the Company is a party or of which any of its
property is subject.


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, 2002, are as follows:

<TABLE>
<CAPTION>

NAME                           AGE        OFFICE
----                           ---        ------
<S>                            <C>        <C>
Ronald D. Offutt               59         Chairman of the Board, Chief Executive Officer and President

Allan F. Knoll                 58         Secretary

Christi J. Offutt              32         Chief Operating Officer

Steven B. Dewald               41         Chief Financial Officer

Kenneth J. Horner, Jr.         38         Executive Vice President - Project/Process Management

Thomas K. Espel                43         Treasurer and Assistant Secretary

</TABLE>


         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, auto dealerships and
agricultural financing activities, 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 2002. 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 2002. 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. 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.

         KENNETH J. HORNER, JR. has served as Executive Vice President -
Project/Process Management since February 2001. He previously served as
Executive Vice President - Construction Equipment from June 1999 to February
2001 and Vice President - Business Practices from July 1998 until June 1999.
Prior to joining the Company, Mr. Horner was Vice President and General Counsel
for Prairieland Foods Corporation, a restaurant management company, and
Executive Vice President of Cross Country Courier, Inc., a regional freight
carrier. He is a graduate of University of Mary with a degree in accounting, and
received his law degree from the University of North Dakota.

         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 Company ("Ag Capital") since its inception in 1989 and
continues to serve as a member of its Board of Directors. Under his direction,
Ag Capital, an Offutt entity, grew to more than $450 million in assets managed.
RDO Financial Services Co., a subsidiary of the Company, was formed from the
retail credit activities of Ag Capital. From 1981 through 1988, Mr. Espel held
various lending positions at St. Paul Bank for Cooperatives, a $4 billion
institution located in St. Paul, Minnesota. 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.




                                       19
<PAGE>


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

FISCAL 2001
     High            $  6.06          $   6.44          $  4.44         $  4.56
     Low             $  4.75          $   4.31          $  2.75         $  2.00

         As of April 19, 2002, the Company had 243 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 2002.

         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.






                                       20
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.

RDO EQUIPMENT CO. AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                                                FISCAL YEARS ENDED JANUARY 31,
------------------------------------------------------------------------------------------------------------------------------
[in thousands, except store and per share data]        2002         2001          2000          1999         1998         1997
------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Revenues:
<S>                                               <C>          <C>           <C>           <C>          <C>          <C>
       Equipment and truck sales                  $ 378,182    $ 484,727     $ 476,773     $ 404,093    $ 301,684    $ 224,094
       Parts and service                            163,032      181,173       173,336       143,335      113,268       75,820
       Rental                                         6,442        8,706        32,178        26,208       14,451        2,499
       Financial services                             2,264        5,772         6,683         4,988           --           --
------------------------------------------------------------------------------------------------------------------------------
                       Total revenues               549,920      680,378       688,970       578,624      429,403      302,413
Cost of revenues (1)                                456,697      581,583       566,877       479,275      340,987      245,287
------------------------------------------------------------------------------------------------------------------------------
Gross profit                                         93,223       98,795       122,093        99,349       88,416       57,126
Selling, general and administrative expenses         91,321      106,918        97,431        81,682       60,382       41,275
Loss on sale, restructuring charges
       and asset impairment                              --       11,200            --         2,200           --           --
------------------------------------------------------------------------------------------------------------------------------
Operating income (loss)                               1,902      (19,323)       24,662        15,467       28,034       15,851
Gain on sale of RDO Rental Co.                           --           --           786            --           --           --
Interest expense, net                                (5,952)     (11,961)      (13,719)      (12,427)      (5,538)      (5,046)
------------------------------------------------------------------------------------------------------------------------------
Income (loss) before taxes                           (4,050)     (31,284)       11,729         3,040       22,496       10,805
Income tax provision (benefit) (2)                   (1,620)     (12,733)        5,252         1,237        9,156        4,322
Minority interest                                        --           11           (60)          135           89           --
==============================================================================================================================
Net income (loss)                                 $  (2,430)   $ (18,562)    $   6,537     $   1,668    $  13,251    $   6,483
==============================================================================================================================
Net income (loss) per share - basic and diluted   $   (0.18)   $   (1.41)    $    0.50     $    0.13    $    1.00    $    0.77
==============================================================================================================================

SELECTED OPERATING DATA
Comparable store revenues increase (decrease)            (8)%         (2)%          (2)%           5%          11%          26%
Stores open at beginning of year                         53           56            64            50           32           26
   Stores opened                                         --           --            --             6            3            1
   Stores acquired                                       --           --             5            10           16            5
   Stores consolidated/closed/sold                       (6)          (3)          (13)           (2)          (1)          --
------------------------------------------------------------------------------------------------------------------------------
Stores open at end of year                               47           53            56            64           50           32
------------------------------------------------------------------------------------------------------------------------------
Net purchases (sales) of rental equipment         $    (654)   $   2,118     $     485     $  19,769    $  14,185    $   1,519
Net purchases of property and equipment                 888        2,357         3,409         5,132        3,766        2,137
Depreciation and amortization                         6,003        7,465        12,950        10,506        5,308        2,606

As of January 31,
------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
Working capital                                   $  48,904    $  49,842     $  64,225     $  36,739    $  69,265    $  72,744
Inventories                                         128,504      169,090       217,556       208,368      220,841      130,955
Total assets                                        216,594      305,988       361,997       379,220      319,432      181,551
Floor plan/borrowing base payables (3)               97,416      149,191       190,242       191,030      163,988       64,331
Total debt                                            4,969       20,417        26,604        55,533       31,353       14,409
Stockholders' equity                                 87,857       90,713       109,275       102,738      101,070       87,795

</TABLE>

(1)  Fiscal 1999 included a special $15 million inventory charge.
(2)  Prior to January 20, 1997, the Company elected to be treated as an S
     corporation under the Internal Revenue Code. A pro forma provision for
     income taxes was computed as if the Company were subject to corporate
     income taxes based on the tax laws in effect during these fiscal years.
(3)  Includes interest-bearing and noninterest-bearing liabilities incurred in
     connection with inventory financing.



                                       21
<PAGE>


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

         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 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
margins 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.

         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.

         During fiscal 2002, the Company was affected by various economic
conditions in all operating segments. The Company's agricultural operations
continued to reflect the challenging farm economy. The Company expects the
general agricultural economic climate to remain stable yet challenging in fiscal
2003. During fiscal 2002, the Company's 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 resulted in decreased market demand for
equipment and increased competitive pressures in the Company's operating
regions. The Company expects these competitive pressures to continue into fiscal
2003. The Company's truck operations were adversely affected by the depressed
market demand for trucks.



                                       22
<PAGE>

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

         During the fourth quarter of fiscal 2001, the Company approved a
comprehensive plan 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.
The Company recognized charges to operations of $11.2 million in the fourth
quarter of fiscal 2001, reflecting the costs the Company incurred. The charges
were comprised of a $3.0 million loss on the sale of the Company's Roseville,
Minnesota truck business, approximately $800,000 of severance costs and the
remainder consisted of asset impairments of long-lived assets, such as fixed
assets, leasehold imporvements and associated lease obligations, and goodwill
related to the Company's truck division. Severance costs paid during fiscal 2002
totaled approximately $500,000 resulting in a remaining severance accrual of
approximately $200,000. Cost incurred related to lease and other obligations
totaled approximately $200,000 leaving an accrual of $100,000 as of the end of
fiscal 2002.

         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. In
connection with the Company's plan to divest itself of the majority of its truck
division, the truck dealership located in Roseville, Minnesota was sold. The
Company consolidated the Volvo dealership location in Long Beach, California
into the Company's Riverside, California location. The Long Beach market is
being serviced through the Company's Riverside truck dealership. The
Barnesville, Minnesota agricultural retail store was consolidated with the
Fargo, North Dakota agricultural operations.

         In fiscal 2000, the Company purchased five heavy-duty truck retail
stores and commenced truck operations in its Waco, Texas location. The Company
also closed one construction equipment rental store and sold its 80 percent
interest in a construction equipment rental operation located in the
southwestern United States.

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, which are described in Note 2 of Notes to Consolidated
Financial Statements, affect its more significant judgments and estimates used
in the preparation of its consolidated financial statements.

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



                                       23
<PAGE>

         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. Revenue is not recognized
until the option is exercised.

         OTHER ASSETS. Other assets consist primarily of goodwill related to
acquisitions and other intangible assets. As stated in Note 2, SFAS No. 142,
provides that goodwill and other intangible assets that have indefinite useful
lives will not be amortized, but instead must be tested at least annually for
impairment, and intangible assets that have finite useful lives should continue
to be amortized over their useful lives. SFAS No. 142 also provides specific
guidance for testing goodwill and other nonamortized intangible assets for
impairment. SFAS No. 142 requires management to make certain estimates and
assumptions in order to allocate goodwill to reporting units and to determine
the fair value of reporting unit net assets and liabilities, including, among
other things, an assessment of market condition, projected cash flows, interest
rates and growth rates, which could significantly impact the reported value of
goodwill and other intangible assets. SFAS No. 142 requires, in lieu of
amortization, an initial impairment review of goodwill in the Company's 2003
fiscal year and annual impairment test thereafter. The Company currently does
not expect to record an impairment charge upon completion of the initial
impairment review. However, there can be no assurance that at the time the
review is completed an impairment charge will not be recorded. The impact of
adopting SFAS No. 142, effective February 1, 2002, will result in the cessation
of goodwill amortization which approximates $1.0 million annually. In addition,
the Company is exposed to the possibility that changes in market conditions
could result in significant impairment charges in the future, thus resulting in
a potential increase in earnings volatility.









                                       24
<PAGE>


RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                         FOR FISCAL YEARS ENDED JANUARY 31,
-------------------------------------------------------------------------------------------
                                                          2002          2001          2000
-------------------------------------------------------------------------------------------
<S>                                                  <C>           <C>           <C>
REVENUE DATA (IN MILLIONS):
Total revenues                                       $   549.9     $   680.4     $   689.0
    Construction                                          53.6%         46.5%         48.9%
    Agricultural                                          30.7%         25.1%         20.2%
    Truck                                                 15.3%         27.5%         25.9%
    Rental                                                  --            --           4.0%
    Financial                                              0.4%          0.9%          1.0%

Construction revenues                                $   294.9     $   316.6     $   337.0
    Equipment sales                                       68.1%         68.8%         70.8%
    Parts and service                                     31.2%         30.1%         28.1%
    Rental                                                 0.7%          1.1%          1.1%

Agricultural revenues                                $   168.4     $   170.9     $   139.2
    Equipment sales                                       69.2%         71.0%         66.3%
    Parts and service                                     28.2%         26.0%         30.3%
    Rental                                                 2.6%          3.0%          3.4%

Truck revenues                                       $    84.3     $   187.1     $   178.8
    Truck sales                                           72.1%         77.9%         80.1%
    Parts and service                                     27.9%         22.1%         19.9%

Rental revenues                                      $      --     $      --     $    27.3
    Equipment sales                                         --            --          10.0%
    Parts and service                                       --            --           3.6%
    Rental                                                  --            --          86.4%

STATEMENT OF OPERATIONS DATA
(AS A PERCENTAGE OF REVENUES):
Revenues
    Equipment and truck sales                             68.8%         71.2%         69.2%
    Parts and service                                     29.6          26.6          25.1
    Rental                                                 1.2           1.3           4.7
    Financial services                                     0.4           0.9           1.0
-------------------------------------------------------------------------------------------
Total revenues                                           100.0%        100.0%        100.0%
-------------------------------------------------------------------------------------------
Gross profit                                              17.0%         14.5%         17.7%
Selling, general and
    administrative expenses                               16.6          15.7          14.1
Loss on sale, restructuring charges
    and asset impairment                                    --           1.6            --
-------------------------------------------------------------------------------------------
Operating income (loss)                                    0.4          (2.8)          3.6
Gain on sale of RDO Rental Co.                              --            --           0.1
Interest expense, net                                      1.1           1.8           2.0
Provision for (benefit from) taxes                        (0.3)         (1.9)          0.8
-------------------------------------------------------------------------------------------
Net income (loss)                                         (0.4)%        (2.7)%         0.9%
==========================================================================================

</TABLE>



                                       25
<PAGE>

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

REVENUES

         Total revenues of $549.9 million during fiscal 2002 were $130.5
million, or 19.2%, lower than revenues of the previous 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 last 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 is 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 $378.2 million in fiscal 2002, a
decrease of $106.5 million, or 22.0%, 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 $16.9 million, or 7.8% to $200.8 million and
agricultural equipment sales decreased $4.7 million, or 3.9%, to $116.6 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.

         Rental revenues were approximately $6.4 million in fiscal 2002 compared
to $8.7 million in fiscal 2001, a decrease of $2.3 million, or 26.4%. The
decline in rental revenues reflects the Company's decision to reduce its
dedicated rental fleet and focus on rental activity which has a high probability
of converting into a sale. Rental revenue from equipment not in a dedicated
rental fleet is classified as equipment sales. Construction operations had
approximately a 41.7% decrease with rental revenues of $2.1 million, while
agricultural operations had approximately a 15.7% decrease with rental revenues
of $4.3 million.

         Financial services revenues of approximately $2.3 million were
generated in fiscal 2002 compared to $5.8 million in fiscal 2001, a decrease of
60.3%. Financial services revenues are comprised primarily of earnings from
interest rate additions on retail installment contracts, and finance charges
from revolving credit accounts available to a portion of the Company's
customers. The decrease is a direct result of the truck dealership sales and
manufacturer sponsored low rate financing programs.

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




                                       26
<PAGE>

Company has 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

         Selling, general and administrative (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 and financial services operations than for agricultural
and truck operations, and lower for equipment and truck sales than for parts and
service and rental revenues. A primary contributing factor to the decrease in
SG&A expenses was the truck dealership sales. The Company's efforts to
streamline the management structure have and will continue to cause a reduction
in the SG&A expenses. However, the Company is currently experiencing revenue
reductions that are out-pacing SG&A expense reduction efforts, thus SG&A
expenses as a percentage of revenues have 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 truck dealership sales 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 excluding those related to the financial services
revolving credit accounts that are included in financial services revenues.

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.

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.







                                       27
<PAGE>

FISCAL YEAR ENDED JANUARY 31, 2001 COMPARED
TO FISCAL YEAR ENDED JANUARY 31, 2000

REVENUES

         Total Revenues of $680.4 million for fiscal 2001 were $8.6 million, or
1.3%, lower than the revenues for fiscal 2000. Construction, truck, agricultural
and financial services operations represented $316.6 million, $187.1 million,
$170.9 million and $5.8 million of revenues, respectively. Truck and
agricultural operations had revenue increases of $8.3 million, or 4.6%, and
$31.7 million, or 22.8%, respectively. Agricultural revenues increased in all
areas primarily attributable to the Company's gains in market share and a
stabilizing agricultural economy, particularly in the Midwest. Construction
revenues decreased $20.4 million, or 6.1%, due to continuing competitive
pressures and overall declining unit market potential; these factors were offset
to some extent by the Company's gains in market share. Financial services
revenues decreased approximately $900,000 primarily attributable to lower loan
and lease originations due to lower construction revenues, along with increased
interest rates and a tightening credit environment. Total revenues decreased
$27.3 million as a result of the sale of the Company's construction equipment
rental operations.

         Equipment and truck sales were $484.7 million in fiscal 2001, an
increase of $7.9 million, or 1.7%, over fiscal 2000. Truck sales contributed
$2.4 million to the total sales increase, with truck sales increasing 1.7% to
$145.7 million. Agricultural equipment sales increased $29.0 million, or 31.4%,
to $121.3 million. Construction equipment sales decreased $20.8 million, or 8.7%
to $217.7 million due to previously stated reasons. The construction equipment
rental operations had equipment sales of $2.7 million in fiscal 2000.

         Parts and service revenues were $181.2 million in fiscal 2001, an
increase of $7.9 million, or 4.6%, from the prior fiscal year. Truck operations
contributed $5.9 million of the increase as sales grew 16.6% to $41.4 million.
Construction operations contributed $600,000 of the increase as sales grew 0.6%
to $95.3 million. Parts and service revenues from agricultural operations
increased approximately $2.3 million, or 5.5%, to $44.5 million. The
construction equipment rental operations had parts and service revenues of
approximately $900,000 in fiscal 2000.

         Rental revenues were approximately $8.7 million in fiscal 2001 compared
to $32.2 million in fiscal 2000, a decrease of $23.5 million, or 73.0%,
primarily attributable to the sale of the Company's construction equipment
rental operations.

         Financial services revenues of $5.8 million were generated in fiscal
2001, a decrease of $900,000, or 13.4%, compared to fiscal 2000. Financial
services revenues are comprised primarily of earnings from interest rate
additions on retail installment contracts, and finance charges from revolving
credit accounts available to a portion of the Company's customers.

GROSS PROFIT

         Gross profit for fiscal 2001 was approximately $98.8 million, or 14.5%
of total revenues, compared to $122.1 million, or 17.7% of total revenues in
fiscal 2000, a decrease of $23.3 million, or 19.1%. Gross profit is affected by
the contribution of revenues by business segment, by the mix of revenues within
each business segment and by competition. Revenues from construction, rental and
financial services operations generally provide the Company with higher gross
margins than do agricultural and truck operations. The Company's highest gross
margins are generally derived from its parts and service, rental and financial
services revenues. During fiscal 2001, construction margins declined due to
competitive pressures as the




                                       28
<PAGE>

Company, along with competitors, attempted to capture a share of a declining
market potential. Truck margins also declined during fiscal 2001, related to
competitive pressures due to high used truck inventory levels throughout the
industry and declining demand primarily attributable to higher fuel prices,
driver shortages and higher interest rates. Both construction and truck margins
were affected by wholesale sales to reduce inventory levels to correlate to the
current market environments. Financial services experienced margin declines due
to higher interest rates and a tightening credit environment. The sale of the
construction equipment rental operations was another contributing factor to the
decrease in gross profit from fiscal 2000 to 2001.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative (SG&A) expenses increased $9.5
million, from $97.4 million for fiscal 2000 to $106.9 million for fiscal 2001.
Total SG&A expenses as a percentage of total revenues for fiscal 2001 and 2000
were 15.7% and 14.1%, 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 and financial services operations than for agricultural,
truck and rental operations and lower for equipment and truck sales than for
parts and service and rental revenues. The increase in SG&A was primarily
attributable to operating the Riverside, California truck location for a full
year, increased legal fees and higher than normal levels of SG&A expenses
related to the consolidation and integration of the Company's acquired truck
dealerships. SG&A as percentage of total revenues was higher in fiscal 2001 due
to SG&A levels in construction and truck operations not adjusting as rapidly as
revenues declined.

INTEREST EXPENSE

         Interest expense decreased approximately $1.9 million, or 13.1%, from
$14.5 million for fiscal 2000 to $12.6 million for fiscal 2001. Interest expense
as a percentage of total revenues decreased from 2.1% for fiscal 2000 to 1.9%
for fiscal 2001. Interest expense as a percentage of total revenues decreased,
despite higher interest rates, primarily due to a decrease in the level of
interest-bearing floor plan payables along with a lower level of long-term debt.
This debt reduction resulted primarily from the sale of the Company's
construction equipment rental operations.

INTEREST INCOME

         Interest income decreased approximately $200,000, or 25.0%, from fiscal
2000 to fiscal 2001. Interest income is primarily comprised of finance charges
from trade receivables excluding those related to the financial services
revolving credit accounts that are included in financial services revenues.

INCOME TAXES

         The estimated provision for (benefit from) income taxes as a percentage
of pretax income (loss) was (40.7%) and 44.8% for fiscal 2001 and 2000,
respectively. The higher effective tax rate for fiscal 2000 was related to the
Company's sale of its 80% owned subsidiary, RDO Rental Co.

NET INCOME (LOSS)

         The Company reported a net loss of $(18.6) million, or $(1.41) per
share for fiscal 2001 compared to net income of $6.5 million, or $0.50 per share
for fiscal 2000.



                                       29
<PAGE>

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, Deutsche Financial, Volvo Finance, GMAC, 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 floor plan financing provide 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 are currently four to twelve months for agricultural equipment and four
months for construction equipment. The interest-free periods may be longer
depending on special financing programs offered from time-to-time. Deere and
Deere Credit also provide financing to dealers on used equipment accepted in
trade and approved equipment from other suppliers. During fiscal 2002, the Deere
Credit financing program was expanded to provide funding for certain
receivables. Collectively, the Deere Credit financing is a borrowing base
facility. Volvo Finance, GMAC and CitiCapital provide truck floor plan financing
with variable market rates of interest based on the prime rate.

         On January 31, 2002, in addition to manufacturer provided floor plan
financing, the Company had unused credit commitments related to floor plan
financing and on- and off-balance sheet financing of rental equipment of $62.4
million. The Company had outstanding floor plan payables of approximately $102.1
million, of which $70.8 million was interest-bearing as of January 31, 2002. The
collateral of equipment and truck inventories along with eligible receivables
would support $15.1 million of additional borrowing at January 31, 2002. During
fiscal 2002, 2001, and 2000 the average interest rate under interest-bearing
floor plan financing was approximately 7.13%, 8.82% and 7.37%, respectively.

         Currently, the Company has an unsecured bank line of credit totaling
$1.9 million with a maturity date of July 1, 2002 and with a variable interest
rate based on the prime rate (4.75% at January 31, 2002). The Company had
approximately $925,000 of unused availability relating to this line of credit at
January 31, 2002. The average interest rates on the Company's lines of credit
during fiscal 2002, 2001 and 2000 were 7.04%, 9.03% and 7.92%, 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 2003.

         The Company's financing agreements contain various covenants which,
among other matters, require the Company to maintain minimum financial ratios,
as defined, and a minimum level of tangible



                                       30
<PAGE>

equity. The Company was in compliance with or obtained waiver letters for all
covenants as of January 31, 2002.

         Operating activities, including changes in inventories and related
floor plan payables, provided net cash of $5.8 million, $10.6 million and $20.2
million for fiscal 2002, 2001 and 2000, respectively. 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. The net cash provided by operating
activities for fiscal 2001 was after the truck sale and restructure.

         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 and 2000 was $3.2
million and $4.9, respectively. The cash used in fiscal 2001 was 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. The cash used in fiscal 2000
was primarily related to acquisitions and the purchase of property and equipment
for the Company's operations.

         Cash used for financing activities amounted to $14.6 million, $3.9
million and $11.1 million for fiscal 2002, 2001 and 2000, respectively. 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. Cash used for
financing activities in fiscal 2000 was primarily attributable to payment of
long-term debt associated with the construction equipment rental company.

         During the third quarter of fiscal 2002, the Company's Board of
Directors approved a stock repurchase program that allows 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. Under the program, the Company has repurchased 148,000 shares of
Class A common stock at a total cost of $426,000, as of January 31, 2002. The
Company also expects to continue to repurchase shares in the future as deemed
appropriate.

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




                                       31
<PAGE>

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") 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 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.
These factors, which are subject to change, include: general economic conditions
worldwide and locally; global acts of terrorism; interest rates; housing starts;
fuel prices; 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




                                       32
<PAGE>

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 financial systems to manage rapidly
growing 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; 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. A one percentage point increase
in interest rates would result in a net increase to the unrealized fair market
value of the Company's fixed rate debt by approximately $3,500. At January 31,
2002, the Company had variable rate floor plan payables, notes payable and
long-term debt of $75.6 million and fixed rate notes payable and long-term debt
of $147,000. Holding other variables constant, the pre-tax earnings and cash
flow impact for the next year resulting from a one percentage point increase in
interest rates would be approximately $756,000.

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


ITEM 8A. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Statements of Operations                               34

         Consolidated Balance Sheets                                         35

         Consolidated Statements of  Stockholders' Equity                    36

         Consolidated Statements of Cash Flows                               37

         Notes to Consolidated Financial Statements                          38

         Report of Independent Public Accountants                            55




                                       33
<PAGE>

RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED JANUARY 31,
--------------------------------------------------------------------------------------------------
[in thousands, except per share amounts]                            2002         2001         2000
--------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>          <C>
REVENUES
          Equipment and truck sales                            $ 378,182    $ 484,727    $ 476,773
          Parts and service                                      163,032      181,173      173,336
          Rental                                                   6,442        8,706       32,178
          Financial services                                       2,264        5,772        6,683
--------------------------------------------------------------------------------------------------
                  Total revenues                                 549,920      680,378      688,970
COST OF REVENUES                                                 456,697      581,583      566,877
--------------------------------------------------------------------------------------------------
GROSS PROFIT                                                      93,223       98,795      122,093
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                      91,321      106,918       97,431
LOSS ON SALE, RESTRUCTURING CHARGES
          AND ASSET IMPAIRMENT (Note 3)                               --       11,200           --
--------------------------------------------------------------------------------------------------
          Operating income (loss)                                  1,902      (19,323)      24,662
INTEREST EXPENSE                                                  (6,649)     (12,578)     (14,536)
INTEREST INCOME                                                      697          617          817
GAIN ON SALE OF RDO RENTAL CO                                         --           --          786
--------------------------------------------------------------------------------------------------
          Income (loss) before income taxes and minority interest (4,050)     (31,284)      11,729
INCOME TAX PROVISION (BENEFIT)                                    (1,620)     (12,733)       5,252
--------------------------------------------------------------------------------------------------
          Income (loss) before minority interest                  (2,430)     (18,551)       6,477
MINORITY INTEREST                                                     --           11          (60)
--------------------------------------------------------------------------------------------------

NET INCOME (LOSS)                                              $  (2,430)   $ (18,562)   $   6,537
==================================================================================================

          Basic and diluted net income (loss) per share        $   (0.18)   $   (1.41)   $    0.50
==================================================================================================
          Weighted average shares outstanding - basic             13,160       13,182       13,182
          Weighted average shares outstanding - diluted           13,160       13,182       13,184
==================================================================================================
</TABLE>

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



                                       34
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               AS OF JANUARY 31,
----------------------------------------------------------------------------------------------------------------
[in thousands]                                                                                  2002        2001
----------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>          <C>
ASSETS
CURRENT ASSETS:
         Cash and cash equivalents                                                         $     852    $  7,635
         Accounts receivable (less allowance for doubtful accounts of $2,666 and $2,476)      26,726      41,612
         Income tax receivable                                                                 4,550       8,143
         Receivables from affiliates                                                              38         114
         Inventories                                                                         128,504     169,090
         Prepaid expenses                                                                      1,417       1,499
         Assets held for sale                                                                  8,862      22,987
         Deferred income tax asset                                                             5,310       7,000
----------------------------------------------------------------------------------------------------------------
                 Total current assets                                                        176,259     258,080
PROPERTY AND EQUIPMENT, NET                                                                   13,192      18,716
OTHER ASSETS:
         Goodwill and other, net of accumulated amortization of $4,725 and $3,686             25,126      25,619
         Deferred income tax asset                                                               504       2,400
         Deposits                                                                              1,513       1,173
----------------------------------------------------------------------------------------------------------------
                 Total assets                                                              $ 216,594    $305,988
================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
         Floor plan/borrowing base payables                                                $  97,416    $149,191
         Notes payable                                                                           975      10,923
         Current maturities of long-term debt                                                  2,612       2,876
         Accounts payable                                                                      2,042       4,764
         Accrued liabilities                                                                  12,656      18,233
         Liabilities associated with assets held for sale                                      6,356      17,615
         Customer advance deposits                                                             5,298       3,905
         Dividends payable (Note 10)                                                              --         731
----------------------------------------------------------------------------------------------------------------
                 Total current liabilities                                                   127,355     208,238

LONG-TERM DEBT, net of current maturities                                                      1,382       6,618
----------------------------------------------------------------------------------------------------------------
                 Total liabilities                                                           128,737     214,856
----------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 8 and 11)
MINORITY INTEREST                                                                                 --         419
STOCKHOLDERS' EQUITY (Note 10):
         Preferred stock                                                                          --          --
         Common stocks-
                 Class A                                                                          57          57
                 Class B                                                                          75          75
         Additional paid-in-capital                                                           84,471      84,471
         Retained earnings                                                                     3,680       6,110
         Treasury stock, at cost                                                                (426)         --
----------------------------------------------------------------------------------------------------------------
                 Total stockholders' equity                                                   87,857      90,713
----------------------------------------------------------------------------------------------------------------
                 Total liabilities and stockholders' equity                                $ 216,594    $305,988
================================================================================================================
</TABLE>

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



                                       35
<PAGE>


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



<TABLE>
<CAPTION>
                                                                               FOR THE YEARS ENDED JANUARY 31, 2002, 2001 AND 2000
----------------------------------------------------------------------------------------------------------------------------------
                                        COMMON STOCK
                                     ------------------
                                     CLASS A     CLASS B       TOTAL  ADDITIONAL                     TREASURY STOCK
[in thousands,                        SHARES      SHARES      COMMON     PAID-IN    RETAINED       ------------------
except share amounts]                 ISSUED      ISSUED       STOCK     CAPITAL    EARNINGS       SHARES      AMOUNT        TOTAL
----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>         <C>         <C>         <C>         <C>                <C>   <C>          <C>
BALANCE, JANUARY 31, 1999          5,731,008   7,450,492   $     132   $  84,471   $  18,135           --   $      --    $ 102,738
Net income                                --          --          --          --       6,537           --          --        6,537
----------------------------------------------------------------------------------------------------------------------------------

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
==================================================================================================================================

</TABLE>

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














                                       36
<PAGE>


RDO EQUIPMENT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                FOR THE YEARS ENDED JANUARY 31,
---------------------------------------------------------------------------------------------------------------
[in thousands]                                                                     2002        2001        2000
---------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>         <C>         <C>
OPERATING ACTIVITIES
Net income (loss)                                                              $ (2,430)   $(18,562)   $  6,537
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
         Depreciation and amortization                                            6,003       7,465      12,950
         Deferred taxes                                                           3,586      (5,950)     (2,980)
         Minority interest                                                           --          11         (60)
         Gain on sale of RDO Rental Co.                                              --          --        (786)
         Loss on sale, restructuring charges and asset impairment                    --      11,200          --
         Change in operating assets and liabilities:
                 Accounts receivable                                             20,685       5,790        (972)
                 Inventories                                                     45,247      20,756       8,098
                 Prepaid expenses                                                   122        (984)        524
                 Deposits                                                          (333)       (236)         57
                 Floor plan/borrowing base payables                             (58,414)     (6,301)    (11,987)
                 Accounts payable and accrued liabilities                        (8,785)     (5,002)      8,093
                 Customer advance deposits                                           92       2,382         702
---------------------------------------------------------------------------------------------------------------
                        Net cash provided by operating activities                 5,773      10,569      20,176
---------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Net sales (purchases) of rental equipment                                           654      (2,118)       (485)
Net purchases of property and equipment                                            (888)     (2,357)     (3,409)
Net assets of acquisitions                                                         (822)     (1,495)     (4,404)
Proceeds on sale of dealership                                                    3,248       2,687          --
Retained investment and service fee on securitized receivables                       --          --       3,813
Other, net                                                                         (143)         42        (389)
---------------------------------------------------------------------------------------------------------------
                        Net cash provided by (used for) investing activities      2,049      (3,241)     (4,874)
---------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt                                             --          89       7,322
Payments on long-term debt                                                       (3,500)     (2,582)    (15,403)
Purchase of common stock                                                           (426)         --          --
Payment of dividends                                                               (731)         --          --
Net payments of bank lines and short-term notes payable                          (9,948)     (1,407)     (3,065)
---------------------------------------------------------------------------------------------------------------
                        Net cash used for financing activities                  (14,605)     (3,900)    (11,146)
---------------------------------------------------------------------------------------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 (6,783)      3,428       4,156
CASH AND CASH EQUIVALENTS, beginning of year                                      7,635       4,207          51
---------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of year                                         $    852    $  7,635    $  4,207
===============================================================================================================

</TABLE>

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







                                       37
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE OF BUSINESS:

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the results of RDO
Equipment Co., a C corporation ("RDO") 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., Salinas Equipment Distributors, Inc. ("SED"), and its
majority-owned subsidiary RDO Rental Co. (80%). In January 2000, RDO sold all of
its shares of RDO Rental Co.

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 suppliers of new equipment, trucks and parts for
sale are Deere and Volvo. The percentage of the Company's revenues generated
from these major suppliers' products are as follows:

                                     2002            2001            2000
-------------------------------------------------------------------------
Deere & Company                        45%             36%             35%
Volvo AB                                4%              9%             10%
=========================================================================

         No other suppliers' products accounted for more than 10% of the
Company's total revenues.

         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, 2002.



                                       38
<PAGE>

         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.

2. SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses during the reporting period and disclosure of
contingent assets and liabilities. The ultimate results could differ from those
estimates. Estimates are used for such items as valuation of used equipment and
truck inventory, depreciable lives of property and equipment, allowance for
uncollectible accounts, guarantees, inventory, self-insurance reserves,
restructuring charges and asset impairment charges. As additional information
becomes available or as actual amounts are determinable, the recorded estimates
are revised.

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 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. Cost is
determined using the first-in, first-out method for new equipment, trucks and
parts inventory. The specific identification method is used to determine cost
for used equipment and trucks.

Inventories consisted of the following as of January 31:

(IN THOUSANDS)                                              2002           2001
--------------------------------------------------------------------------------
New equipment and trucks                              $   80,013      $ 112,190
Used equipment and trucks                                 27,070         33,090
Parts and other                                           21,421         23,810
--------------------------------------------------------------------------------
Total                                                  $ 128,504      $ 169,090
--------------------------------------------------------------------------------



                                       39
<PAGE>

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 accelerated and
straight-line methods. Depreciation expense was $5.0 million, $6.0 million and
$11.5 million for the fiscal years ended January 31, 2002, 2001 and 2000,
respectively.

         The Company follows the guidelines of Statements of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and 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 flow 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)                              2002              2001         LIVES
--------------------------------------------------------------------------------
Land                                      $  479            $  481            --
Buildings and improvements                 6,987             6,828        5-31.5
Equipment, furniture and fixtures         20,640            20,382           3-7
Rental equipment                           2,903             8,603           3-7
Construction in progress                     126               203            --
--------------------------------------------------------------------------------
     Total                                31,135            36,497
Accumulated depreciation                 (17,943)          (17,781)
--------------------------------------------------------------------------------
Property and equipment, net             $ 13,192          $ 18,716
================================================================================

INCOME TAXES

         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.

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. Revenue is not recognized until the option is exercised.



                                       40
<PAGE>

RECEIVABLES

         During fiscal 2000, certain loan and lease receivables were securitized
wherein they were sold to a special-purpose corporation which is a related
party. The Company retained a minimum investment in sold receivables, limited to
10%. Upon sale, a gain was recognized on the receivables for the difference
between carrying values and the sales proceeds based on estimates of future
expected cash flows including adjustments for prepayments and credit losses. The
Company serviced the underlying receivables on behalf of the special-purpose
corporation in return for a fee. The Company sold approximately $29.4 million of
loan and lease receivables during fiscal 2000. Approximately $1.6 million of
gains on sales and servicing fee income were recognized as financial service
revenues in the accompanying statement of operations during fiscal 2000. In
December 1999, the Company replaced its securitization financing structure in
favor of new financing arrangements and incurred a one-time loss of $399,000
reflected as a reduction of financial service revenues.

SALE OF RECEIVABLES WITH LIMITED RECOURSE

         During fiscal 2002, the Company entered into an agreement to sell
certain trade receivable accounts to a third party (the transferee). The Company
transferred approximately $3.5 million of receivables under this agreement as of
January 31, 2002. These transfers were recorded as sales with limited recourse
by removing the receivables from the Company's balance sheet and recording the
cash received and the related discount on the sale. These transactions did not
have a material effect on the Company's fiscal 2002 results of operations.

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, and notes payable approximate fair value because of
relatively short terms or variable rates on these instruments.

NEW ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations." All business combinations in the scope of SFAS No. 141 are to be
accounted for using the purchase method. The provisions of SFAS No. 141 apply to
all business combinations initiated after June 30, 2001 and apply to all
business combinations accounted for using the purchase method for which the date
of acquisition is July 1, 2001 or later. The application of the new accounting
standard did not have an impact on the Company's financial statements.

         In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 addresses financial accounting and reporting
for acquired goodwill and other intangible assets and addresses how intangible
assets that are acquired individually or with a group of other assets (but not
those acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The provisions of SFAS No. 142
are required to be applied in fiscal years beginning after December 15, 2001.
This Statement is required to be applied at the beginning of an entity's fiscal
year and to be applied to all goodwill and other intangible assets recognized in
its financial statements at that date. Impairment losses for goodwill and
indefinite-lived intangible assets that arise due to the initial application of
SFAS No. 142 are to be reported as resulting from a change in accounting
principle. The Company currently does not expect to record an impairment



                                       41
<PAGE>

charge upon completion of the initial impairment review. However, there can be
no assurance that at the time the review is completed an impairment charge will
not be recorded. The impact of adopting the Statement, effective February 1,
2002, will result in the cessation of goodwill amortization which approximates
$1.0 million annually. In addition, the Company is exposed to the possibility
that changes in market conditions could result in significant impairment charges
in the future, thus resulting in a potential increase in earnings volatility.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement establishes
accounting standards for the impairment and disposal of long-lived assets and
criteria for determining when a long-lived asset is held for sale. The statement
removes the requirement to allocate goodwill to long-lived assets to be tested
for impairment, requires that the depreciable life of a long-lived asset to be
abandoned be revised in accordance with APB Opinion No. 20, "Accounting
Changes," provides that one accounting model be used for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired and
broadens the presentation of discontinued operations to include more disposal
transactions. SFAS No. 144 will be effective for the Company's financial
statements beginning February 1, 2002. The Company does not expect the adoption
of this statement to have a material impact on its 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 included a loss of $3.0 million related to the sale of its
Roseville, Minnesota, truck business during the fourth quarter of fiscal 2001;
estimated losses on the anticipated sale of the Riverside, California, and
Dallas and Fort Worth, Texas truck businesses in fiscal 2002; severance related
to employee terminations; and asset impairments. The Company accrued
approximately $800,000 of severance costs relating to the elimination of
approximately 11 salaried management positions. The asset impairments consisted
of long-lived assets, including fixed assets, leasehold improvements and
associated lease obligations, and goodwill relating to the Company's truck
division. Impairment was measured based on estimated proceeds from the expected
sales of the Company's truck businesses. 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 and $23.0 million as of the end of
fiscal 2002 and 2001, respectively. These assets are no longer being depreciated
as they are no longer being used in continuing operations. Liabilities
associated with assets held for sale totaled approximately $6.4 million and
$17.6 million as of the end of fiscal 2002 and 2001, respectively, 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 $230,000 and $13.3
million during fiscal 2002 and 2001, respectively, and are included in the
Company's truck segment (Note 14).

         During fiscal 2002, the Company continued the execution of the
above-described restructuring plan established during the fourth quarter of
fiscal 2001 to restructure management and to divest itself of the majority of
its heavy-duty truck division. During fiscal 2002, the Company eliminated the
remaining ten management positions of the eleven identified in the plan.
Severance costs paid during fiscal 2002 totaled approximately $500,000 resulting
in a remaining severance accrual of approximately $200,000. Costs incurred
related to lease and other obligations totaled approximately $200,000 leaving an
accrual of approximately $100,000 as of January 31, 2002.



                                       42
<PAGE>

         The Company also completed the sale of the Dallas and Fort Worth, Texas
truck businesses during the second quarter of fiscal 2002. The financial effects
of the sale of the Dallas and Fort Worth, truck business were in line with loss
estimates made during the fourth quarter of fiscal 2001. The Company actively
pursued the sale of its Riverside, California, truck business in fiscal 2002,
and the business is still considered held for sale.

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 was
amortized over 30 years, through January 31, 2002.

         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 period prior to these acquisitions were not
significant.

5. FLOOR PLAN/BORROWING BASE PAYABLES:

         Floor plan/borrowing base payables are financing arrangements for
inventory and receivables. The terms of 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.









                                       43
<PAGE>


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

<TABLE>
<CAPTION>

(IN THOUSANDS)                                                                        2002         2001
=======================================================================================================
<S>                                                                              <C>          <C>
NONINTEREST-BEARING:
   Deere & Company                                                               $  31,259    $  36,167
   Deere Credit Services, Inc.                                                          --        1,515
-------------------------------------------------------------------------------------------------------
                                                                                    31,259       37,682
-------------------------------------------------------------------------------------------------------
INTEREST-BEARING:
   Deere Credit Services, Inc., revolving borrowing base facility, interest at
      5.00% at January 31, 2002, based on prime                                     40,000       73,900
   Deere Credit Services, Inc., inventory notes, due as inventory is sold,
      Interest at various rates, 4.75% to 8.5% at January 31, 2002                     452          283
   Deere & Company, due as inventory is sold, 4.75% to 5.75% at January 31,
      2002, based on prime                                                          12,124        8,205
   Ag Capital Company (affiliate), 6.63% at January 31, 2002,
      based on LIBOR                                                                10,000       24,000
   Volvo Commercial Finance LLC The Americas, 4.79% at January 31,
      2002, based on LIBOR (included in liabilities associated with
      assets held for sale)                                                          4,657       13,611
   General Motors Acceptance Corporation, 4.25% at January 31, 2002,
      based on prime                                                                 2,824        4,068
   CitiCapital Commercial Corporation, 4.75% at January 31, 2002,
       based on prime                                                                  657          291
   Other                                                                               100          762
   Amount included in liabilities associated with assets held for sale              (4,657)     (13,611)
-------------------------------------------------------------------------------------------------------
                                                                                    66,157      111,509
=======================================================================================================
   Total                                                                         $  97,416    $ 149,191
=======================================================================================================
</TABLE>

         On January 31, 2002, the Deere Credit Services, Inc. revolving
borrowing base facility commitment was $105.0 million. The above noted $40.0
million outstanding on the facility and off-balance sheet leases of $6.1 million
consume the commitment leaving $58.9 million unused. The collateral of equipment
inventories along with eligible receivables would support $15.1 million of
additional borrowings at January 31, 2002. The current facility, which is
reviewed and renewed annually, expires on October 31, 2002. The Company believes
it will be able to renew or extend this facility or replace it with other
facilities which will provide the necessary liquidity.

         In addition to manufacturer floor plan financing, the Company had an
additional $3.5 million of unused credit commitments form various other sources
as of January 31, 2002.

         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, as defined, and a
minimum level of tangible equity. The Company was in compliance with or obtained
waiver letters for all floor plan covenants at January 31, 2002.







                                       44
<PAGE>

6. NOTES PAYABLE AND LONG-TERM DEBT:

NOTES PAYABLE

Notes payable consisted of the following as of January 31:

(IN THOUSANDS)                                              2002          2001
------------------------------------------------------------------------------
Ag Capital Company (affiliate), operating lines           $   --       $10,923
Bank operating lines                                         975            --
------------------------------------------------------------------------------
Total notes payable                                       $  975       $10,923
==============================================================================

         As of January 31, 2002, the Company had one operating line of credit
that provided maximum borrowings totaling $1.9 million. This operating line has
a maturity date of July 1, 2002 with a variable interest rate based on prime
(4.75% at January 31, 2002). During fiscal years 2002 and 2001, the Company had
two operating lines of credit. As of January 31, 2001, these operating lines
provided maximum borrowings totaling $20.0 million with varying maturities and
variable interest rates based on LIBOR and prime. The highest balances
outstanding under these lines were $15.1 million and $17.7 million for fiscal
years ended January 31, 2002 and 2001, respectively. The weighted average
interest rates on these lines during such periods were 7.04% and 9.03%,
respectively.

LONG-TERM DEBT

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

<TABLE>
<CAPTION>

(IN THOUSANDS)                                                                          2002          2001
---------------------------------------------------------------------------------------------------------
<S>                                                                              <C>           <C>
Ag Capital Company (affiliate), due in various amounts through February 2006,
   interest (variable 6.33% to 6.77%), collateralized by
   stock of a subsidiary and certain fixed assets of the Company                 $    3,203    $    6,323
Volvo Trucks North America, Inc., due September 2004, 4.75% at
    January 31, 2002, based on prime, unsecured                                         640         2,640
Volvo Trucks North America, Inc.                                                         --           114
Other                                                                                   151           417
---------------------------------------------------------------------------------------------------------
Total                                                                                 3,994         9,494
Less current maturities of long-term debt                                            (2,612)       (2,876)
---------------------------------------------------------------------------------------------------------
Total long-term debt, net of current maturities                                  $    1,382    $    6,618
=========================================================================================================
</TABLE>


Future long-term debt maturities as of January 31, 2002 are as follows:

(IN THOUSANDS)
-------------------------------------------------------------------------
2003                                                              $ 2,612
2004                                                                  107
2005                                                                1,256
2006                                                                   19
2007                                                                   --
Thereafter                                                             --
-------------------------------------------------------------------------
Total                                                             $ 3,994
-------------------------------------------------------------------------



                                       45
<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, 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, 2002.

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)                                           2002          2001         2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>           <C>            <C>
Net income (loss) available to common shareholders                             $  (2,430)    $ (18,562)     $ 6,537
===================================================================================================================
Weighted average number of common shares outstanding - basic                      13,160        13,182       13,182
Dilutive effect of option plan                                                        --            --            2
-------------------------------------------------------------------------------------------------------------------
Common and potential common shares outstanding - diluted                          13,160        13,182       13,184
===================================================================================================================
Basic and diluted net income (loss) per share                                  $   (0.18)    $   (1.41)     $  0.50
===================================================================================================================
</TABLE>

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 $684,000, $750,000 and
$643,000 for the fiscal years ended January 31, 2002, 2001 and 2000,
respectively.

EMPLOYEE HEALTH BENEFIT TRUST

         The Company participates in a tax-exempt voluntary employee benefit
trust sponsored by an affiliate, which provides health and dental benefits for
full-time employees. In the event of a deficiency in the trust, additional
monthly premiums could be assessed to the Company. The maximum liability to the
Company is limited by stop-loss insurance to the lesser of $35,000 per employee
or 120% of expected claims for the year.

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



                                       46
<PAGE>

options granted under the Plan. Options outstanding at January 31, 2002 vest
immediately or according to an up to a five year schedule and expire five to ten
years after the date of grant.

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

<TABLE>
<CAPTION>
                                                2002                      2001                      2000
-------------------------------------------------------------------------------------------------------------------
                                                      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            586,974       $ 9.88      829,250      $ 10.35      696,525       $ 11.74
Granted                                   228,849         3.23      121,834         5.33      220,000          5.95
Canceled                                  (88,724)        6.46     (364,110)        9.44      (87,275)         10.3
Exercised                                      --           --           --           --           --            --
-------------------------------------------------------------------------------------------------------------------
Outstanding, end of year                  727,099       $ 8.20      586,974       $ 9.88      829,250       $ 10.35
===================================================================================================================
Exercisable, end of year                  639,309       $ 7.87      359,094      $ 10.19      406,010        $ 9.68
===================================================================================================================
Weighted average fair value of
  options granted                                       $ 1.22                    $ 2.27                     $ 2.81
===================================================================================================================
</TABLE>

         Options outstanding at January 31, 2002 have exercise prices ranging
from $3.00 to $15.50 and a weighted average remaining contractual life of 6.73
years.

         The Company accounts for the Plan under APB Opinion No. 25, under which
no compensation cost has been recognized for options granted to employees. Had
compensation cost for the Plan been determined consistent with Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), 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)                                      2002              2001             2000
------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>             <C>
Net income (loss):
   As reported                                                       $   (2,430)        $ (18,562)      $    6,537
==================================================================================================================
   Pro forma                                                         $   (2,844)        $ (19,083)      $    5,680
==================================================================================================================
Basic and diluted net income (loss) per share:
   As reported                                                       $    (0.18)        $   (1.41)      $     0.50
==================================================================================================================
   Pro forma                                                         $    (0.22)        $   (1.45)      $     0.43
==================================================================================================================
</TABLE>

         In determining the pro forma compensation cost of the options granted
during fiscal 2002, 2001 and 2000, as specified by SFAS 123, 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:

<TABLE>
<CAPTION>
                                                                            2002             2001              2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>              <C>               <C>
Risk free interest rate                                                    4.42%            6.30%             6.24%
Expected life                                                         3.00 years       3.28 years        4.60 years
Expected volatility                                                       49.40%           55.70%            46.29%
===================================================================================================================
</TABLE>




                                       47
<PAGE>

9. INCOME TAXES:

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

<TABLE>
<CAPTION>

(IN THOUSANDS)                                                                 2002            2001            2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>            <C>              <C>
Current:
   Federal                                                                  $ (5,206)      $ (6,783)        $ 7,080
   State                                                                          --             --           1,152
Deferred income tax provision (benefit)                                        3,586         (5,950)         (2,980)
-------------------------------------------------------------------------------------------------------------------
Income tax provision (benefit)                                              $ (1,620)      $(12,733)        $ 5,252
===================================================================================================================
</TABLE>

         The current year components of the benefit from income taxes includes a
receivable of federal tax relating to the Internal Revenue Service allowing the
Company to carry back the current year net operating loss to recapture taxes
paid in previous years. The Company has recorded an income tax receivable of
$4.6 million related to this recapture of taxes.

         The primary difference between the federal statutory rate of 35% for
the fiscal years ended January 31, 2002, 2001 and 2000, and the income tax
provision (benefit) represents the impact of state income taxes, net of the
federal benefit. In addition, the fiscal 2000 tax rate was affected by
additional taxes relating to the structure of the sale of RDO Rental Co.

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

<TABLE>
<CAPTION>

(IN THOUSANDS)                                                                               2002              2001
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>               <C>
Accruals and other reserves                                                               $ 2,310           $ 3,430
Inventory                                                                                   2,140             2,530
Compensation accruals                                                                         860             1,040
-------------------------------------------------------------------------------------------------------------------
   Net current deferred tax asset                                                         $ 5,310           $ 7,000
-------------------------------------------------------------------------------------------------------------------
Property and equipment                                                                       (220)           (1,130)
Goodwill                                                                                     (550)            1,360
Credits and net operating loss carryforwards                                                1,170             2,050
Other                                                                                         104               120
-------------------------------------------------------------------------------------------------------------------
   Net long-term deferred tax asset (liability)                                               504             2,400
-------------------------------------------------------------------------------------------------------------------
   Total                                                                                  $ 5,814           $ 9,400
-------------------------------------------------------------------------------------------------------------------
</TABLE>

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.



                                       48
<PAGE>

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. 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 begun the execution of the repurchase program and has
repurchased 148,000 shares of the Class A common stock as of January 31, 2002.
The Company also expects to continue to repurchase shares in the future as
deemed appropriate.

DIVIDENDS PAYABLE

         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 $9.7 million,
$10.9 million and $13.7 million for fiscal 2002, 2001 and 2000, 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)
-------------------------------------------------------------------------
2003                                                              $ 9,330
2004                                                                7,197
2005                                                                5,067
2006                                                                4,103
2007                                                                3,776
Thereafter                                                         12,975
-------------------------------------------------------------------------
Total                                                             $42,448
=========================================================================

GUARANTEES

         Certain credit companies provide financing to the Company's customers.
A portion of this financing is with recourse to the Company. 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



                                       49
<PAGE>

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 customer notes are collateralized by the
customer-owned equipment.

As of January 31, 2002, the contingent liability and off-setting deposits are as
follows:

                                                                         FINANCE
                                                 GUARANTEED             DEPOSITS
(IN THOUSANDS)                                      AMOUNTS           RECEIVABLE
-------------------------------------------------------------------------------
Deere Credit Services, Inc.                        $  4,583              $ 1,154
CitiCapital Commercial Corporation                   10,517                   --
ACL Company, LLC (affiliate)                            131                   --
Ag Capital Company (affiliate)                           41                   --
Other                                                   351                   --
--------------------------------------------------------------------------------
Total                                              $ 15,623              $ 1,154
================================================================================

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 significant transactions which have a guaranteed repurchase feature
as leases.

The Company's existing repurchase agreements as of January 31, 2002 expire as
follows:

(IN THOUSANDS)
-------------------------------------------------------------------------
2003                                                              $ 2,561
2004                                                                1,573
2005                                                                1,814
2006                                                                1,802
2007                                                                  464
Thereafter                                                             --
-------------------------------------------------------------------------
Total                                                             $ 8,214
=========================================================================

LITIGATION

         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 the resolution of such claims
will not have a material adverse effect on the results of operations and cash
flows of the Company.





                                       50
<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 is as
follows:

         a.       Ag Capital and ACL Company, LLC provide 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 has floor plan payables, notes
                  payable and long-term debt owed to Ag Capital to finance
                  inventory, various receivables and fixed assets as summarized
                  in Notes 5 and 6. Interest expense paid to related parties
                  totaled $2.5 million, $3.2 million and $3.6 million in fiscal
                  2002, 2001 and 2000, respectively.

         c.       The Company had sales to related parties totaling $2.2
                  million, $2.7 million and $2.2 in fiscal 2002, 2001 and 2000,
                  respectively. The Company also leases certain retail space and
                  vehicles from related parties. Total lease expense under these
                  arrangements totaled $3.6 million, $4.7 million and $6.2
                  million in fiscal 2002, 2001 and 2000, respectively.

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

         The Company believes the transactions with related parties listed above
are on terms no less favorable to the Company than those obtainable in
arm's-length transactions with unaffiliated third parties.

13. SUPPLEMENTAL CASH FLOW DISCLOSURES:

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

<TABLE>
<CAPTION>

(IN THOUSANDS)                                                                    2002           2001          2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>             <C>            <C>
Cash payments for interest                                                 $     6,383     $   13,230     $  13,744
===================================================================================================================
Cash payments for income taxes                                             $       159     $    4,663     $   2,444
===================================================================================================================
Supplemental disclosures of non-cash investing and financing activities:
      Increase in assets related to acquisitions through issuance
         and assumption of debt                                                     --             --      $ 20,843
      Decrease in assets related to sale of RDO Rental Co. stock                    --             --      $ 39,217
      Increase in long-term debt related to refinancing
          of short-term debt                                                        --             --      $  5,000
      Sale of rental assets for purchaser's assumption of debt                      --             --      $  2,526
      Decrease in assets related to sale of dealership assets
         through issuance of a receivable and purchaser's
         assumption of debt                                                $        --     $   10,818            --
===================================================================================================================
</TABLE>




                                       51
<PAGE>


14. SEGMENT INFORMATION:

         The Company's operations are currently classified into four business
segments: construction, agricultural, truck and financial services and
corporate. In past reporting, a fifth business segment, rental, was designated
which included both construction equipment rental operations and agricultural
equipment rental operations. At the end of fiscal 2000, the construction
equipment rental operations were sold. To coincide with how management currently
views the Company's operations, current and future segment reporting will
include the agricultural equipment rental operations in the agricultural
segment. For historical comparisons only, the construction equipment rental
operations are included in the rental segment. 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. Truck operations include the sale and
service of heavy-duty and medium-duty trucks to customers primarily in the
transportation and construction industries and to units of government.
Agricultural operations include the sale, service and rental of agricultural
equipment primarily to customers in the agricultural industry. The financial
services operations primarily provide financing arrangements to customers of the
Company's other business segments, and these operations are therefore combined
with corporate activities.

         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, certain property and equipment, and deferred
income taxes. Interest income and interest expense are included in revenues and
cost of revenues, respectively, for the financial services segment.














                                       52
<PAGE>


The following table shows the Company's business segments and related financial
information for fiscal 2002, 2001 and 2000:

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

2001:
-------------------------------------------------------------------------------------------------------------------
   Revenues from
      external customers           $ 316,577     $ 170,891     $ 187,138       $     --      $  5,772     $ 680,378
   Interest income                         2           562            53             --            --           617
   Interest expense                    6,506         2,059         4,013             --            --        12,578
   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
   Capital expenditures, net             786         1,856           268             --         1,565         4,475
===================================================================================================================

2000:
-------------------------------------------------------------------------------------------------------------------
   Revenues from                                                                       (1)           (1)
      external customers           $ 336,964     $ 139,160     $ 178,774      $  27,389      $  6,683     $ 688,970
   Interest income                        53           570           167             27            --           817
   Interest expense                    6,594         3,152         2,416          2,374            --        14,536
   Depreciation and
     amortization                      2,509         3,235           909          5,079         1,218        12,950
   Income (loss) before income
     taxes and minority interest       9,687         1,032          (223)        (1,185)        2,418        11,729
   Identifiable assets               153,790        76,524        89,363             --        42,320       361,997
   Capital expenditures, net            (383)         (341)          918          2,231         1,469         3,894
</TABLE>

(1)      The Company sold RDO Rental Co. January 31, 2000. The rental segment
         includes the operations for RDO Rental Co. for a full year and
         identifiable assets are net of the sale. The financial services and
         corporate segment includes the receivable and gain on the sale.




                                       53
<PAGE>


15. UNAUDITED QUARTERLY FINANCIAL DATA:

<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT PER SHARE DATA)         FIRST          SECOND           THIRD          FOURTH      TOTAL YEAR
-------------------------------------------------------------------------------------------------------------------
FISCAL 2002:
-------------------------------------------------------------------------------------------------------------------
<S>                                       <C>              <C>             <C>             <C>             <C>
   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)
===================================================================================================================

-------------------------------------------------------------------------------------------------------------------
FISCAL 2001:
-------------------------------------------------------------------------------------------------------------------
   Total revenues                         $ 185,935        $183,452        $176,424        $134,567        $680,378
   Gross profit                              28,968          27,955          24,060          17,812          98,795
   Net income (loss)                            871          (1,297)         (4,171)        (13,965)        (18,562)
   Net income (loss) per share
      - basic and diluted                      0.07           (0.10)          (0.32)          (1.06)          (1.41)
===================================================================================================================

</TABLE>


See Note 3 for unusual and restructuring charges incurred during the fourth
quarter of fiscal 2001.









                                       54
<PAGE>


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



Minneapolis, Minnesota,
March 8, 2002






                                       55
<PAGE>


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

         None.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information regarding directors under the captions "Election of
Directors--Information About Nominees" and "Election of Directors--Other
Information about Nominees" in the Proxy Statement is incorporated herein by
reference. Information regarding executive officers is presented in Part I of
this Form 10-K as Item 4A.

         The information under the caption "Beneficial Ownership of Management -
Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement
is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

         The information under the captions "Election of Directors--Compensation
of Directors", "Executive Compensation and Other Benefits", and "Comparative
Performance Graph" in the Proxy Statement is incorporated herein by reference.

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

         The information under the captions "Principal Stockholders" and
"Beneficial Ownership of Management" in the Proxy Statement is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information under the caption "Election of Directors - Certain
Relationships and Related Transactions" in the Proxy Statement is incorporated
herein by reference.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a)(1)   FINANCIAL STATEMENTS.

                  None.

         (a)(2)   FINANCIAL STATEMENT SCHEDULES.

                  Schedule II, Valuation and Qualifying Accounts for the Year
         Ended January 31, 2002, is included in this Form 10-K at page 59,
         including Report of Independent Public Accountants.






                                       56
<PAGE>

                  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 60, 61, 62 and 63 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.

                  None.















                                       57
<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 29, 2002
                            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 29, 2002 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 officer)
Ronald D. 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




                                       58
<PAGE>


                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED JANUARY 31, 2002, 2001, AND 2000

<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, 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

January 31, 2000:
  Accounts Receivable:
     Allowance for doubtful accounts           $1,616,102       $1,123,099       $  865,506       $1,873,695
  Accrued Liabilities:
     Restructuring Reserve                     $  285,000               --       $  285,000               --
============================================================================================================
</TABLE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


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



                                       59
<PAGE>


              EXHIBIT INDEX FOR FISCAL YEAR ENDED JANUARY 31, 2002

<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           Incorporated by reference to Exhibit 4.2 to the
                 Common 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>



                                       60
<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)
</TABLE>




                                       61
<PAGE>

<TABLE>
<CAPTION>

ITEM NO.         ITEM                                             METHOD OF FILING
--------         ----                                             ----------------
<S>              <C>                                              <C>

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)

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 Indemnification Agreement*               Incorporated by reference to Exhibit 10.9 to
                                                                  the Company's Registration Statement on Form
                                                                  S-1 (File No. 333-13267).

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   Filed herewith
                 Co. Credit Agreement with Ag Capital Company

10.21            RDO Construction Equipment Co. and RDO           Incorporated by reference to Exhibit 10.1 to
                 Agriculture Equipment Co. amended and restated   the Company's Quarterly Report on Form 10-Q for
                 loan agreement with John Deere Construction      the fiscal quarter ended July 31, 2000. (File
                 Equipment Company, Deere Credit, Inc., and       No. 1-12641)
                 John Deere Company

10.22            RDO Construction Equipment Co. and RDO           Incorporated by reference to Exhibit 10.2 to
                 Agriculture Equipment Co. amended and restated   the Company's Quarterly Report on Form 10-Q for
                 security agreement with John Deere               the fiscal quarter ended July 31, 2000. (File
                 Construction Equipment Company, Deere Credit,    No. 1-12641)
                 Inc., and John Deere Company

10.23            RDO Construction Equipment Co. and RDO           Incorporated by reference to Exhibit 10.3 to
                 Agriculture Equipment Co. guaranty with John     the Company's Quarterly Report on Form 10-Q for
                 Deere Construction Equipment Company, Deere      the fiscal quarter ended July 31, 2000. (File
                 Credit, Inc., and John Deere Company             No. 1-12641)

10.24            RDO Agriculture Equipment Co. and RDO            Incorporated by reference to Exhibit 10.1 to
                 Construction Equipment Co. Addendum to Amended   the Company's Quarterly Report on Form 10-Q for
                 and Restated Loan Agreement with John Deere      the fiscal quarter ended October 31, 2000.
                 Construction Equipment Company, Deere Credit,    (File No. 1-12641)
                 Inc., and John Deere Company

</TABLE>


                                       62
<PAGE>

<TABLE>
<CAPTION>

ITEM NO.         ITEM                                             METHOD OF FILING
--------         ----                                             ----------------
<S>              <C>                                              <C>
10.25            Second Addendum to Amended and Restated Loan     Incorporated by reference to Exhibit 10.3 to
                 Agreement  between John Deere Construction and   the Company's Quarterly Report on Form 10-Q for
                 Forestry Equipment Company (f/k/a John Deere     the fiscal quarter ended July 31, 2001. (File
                 Construction Equipment Company), Deere Credit,   No. 1-12641)
                 Inc., and John Deere Company, A Division of
                 Deere & Company and RDO Agriculture Equipment
                 Co., RDO Equipment Co., RDO Financial
                 Services Co., RDO Material Handling Co., RDO
                 Truck Center Co., RDO Construction Equipment
                 Co.

10.26            Third Addendum to Amended and Restated Loan      Incorporated by reference to Exhibit 10.1 to
                 Agreement  between John Deere Construction and   the Company's Quarterly Report on Form 10-Q for
                 Forestry Equipment Company (f/k/a John Deere     the fiscal quarter ended October 31, 2001.
                 Construction Equipment Company), Deere Credit,   (File No. 1-12641)
                 Inc., and John Deere Company, A Division of
                 Deere & Company and RDO Agriculture Equipment
                 Co., RDO Equipment Co., RDO Financial
                 Services Co., RDO Material Handling Co., RDO
                 Truck Center Co., RDO Construction Equipment
                 Co.

21.1             Subsidiaries                                     Filed herewith.

23.1             Consent of Independent Public Accountants        Filed herewith.

99.1             Letter to Securities and Exchange Commission     Filed here with.
                 Regarding Arthur Andersen LLP Representations
</TABLE>

-----------------------
*        Management contract or compensatory plan or arrangement filed as an
         exhibit pursuant to Item 14(c) of Form 10-K.





                                       63