SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________
FORM 10-Q
___________________
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 31, 1994
Commission file no: 1-6458
______________________________
JOHN DEERE CAPITAL CORPORATION
Delaware 36-2386361
State of incorporation) IRS employer identification no.)
Suite 600
First Interstate Bank Building
1 East First Street
Reno, Nevada 89501
(Address of principal executive offices)
Telephone Number: (702) 786-5527
______________________________
Indicate by check mark whether the registrant (1) has filed
all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
At January 31, 1994, 2,500 shares of common stock, without
par value, of the
registrant were outstanding, all of which were owned by John
Deere Credit Company, a
wholly-owned subsidiary of Deere & Company.
The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b)
of Form 10-Q and is therefore filing this Form with certain
reduced disclosures as
permitted by those instructions.
Page 1 of 17 Pages.
Index to Exhibits: Page 16.<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
Condensed Statement of Consolidated Income
(UNAUDITED)
(In millions of dollars)
Three Months Ended
January 31
1994 1993
Revenues:
Finance income earned on retail notes $ 65.9 $ 84.9
Revolving charge account income 13.3 11.3
Lease revenues 10.1 8.6
Finance income earned on wholesale notes 2.5 2.6
Net gain on retail notes sold 1.1 2.4
Interest income from short-term investments 1.4 1.4
Securitization and servicing fee income 9.7 2.5
Other income .7 1.4
Total revenues 04.7 115.1
Expenses:
Interest expense 35.9 43.6
Administrative and operating expenses 17.6 15.5
Provision for credit losses 9.2 8.6
Insurance expense .1 .1
Fees paid to Deere & Company 1.5 1.9
Depreciation of equipment on
operating leases 5.1 4.0
Total expenses 69.4 73.7
Income before Income Taxes and Changes
in Accounting 35.3 41.4
Provision for Income Taxes 12.3 14.0
Income Before Changes in Accounting 23.0 27.4
Changes in Accounting (3.8)
Net Income $ 23.0 $ 23.6
______________
See Notes to Interim Financial Statements
<PAGE>
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(UNAUDITED)
(In millions of dollars)
Jan 31 Oct 31 Jan 31
1994 1993 1993
ASSETS
Cash and Cash Equivalents $ 58.7 $ 165.2 $ 165.2
Receivables and Leases:
Retail notes 2,942.8 2,791.7 3,509.2
Revolving charge accounts 281.8 331.1 215.6
Financing leases 87.5 84.9 76.0
Wholesale notes 121.7 109.6 124.7
Total receivables 3,433.8 3,317.3 3,925.5
Equipment on operating leases 121.9 119.3 90.4
Total receivables and leases 3,555.7 3,436.6 4,015.9
Allowance for credit losses (78.4) (77.5) (83.3)
Total receivables and leases - net 3,477.3 3,359.1 3,932.6
Other Receivables 190.1 182.8 94.3
Other Assets 45.2 46.4 51.9
TOTAL $3,771.3 $3,753.5 $4,244.0
LIABILITIES AND STOCKHOLDER'S EQUITY
Short-Term Borrowings:
Commercial paper $1,096.3 $ 454.0 $1,115.3
Deere & Company 13.8 439.5 81.9
Current maturities of long-term
borrowings 469.2 405.2 464.5
Total short-term borrowings 1,579.3 1,298.7 1,661.7
Accounts Payable and Accrued
Liabilities 208.2 120.5 157.7
Deposits Withheld from Dealers
and Merchants 97.6 104.9 93.2
Long-Term Borrowings:
Notes and debentures 961.3 1,178.2 1,237.7
Subordinated debt 300.0 300.0 345.0
Total long-term borrowings 1,261.3 1,478.2 1,582.7
Retirement Benefit Accruals & Other
Liabilities 12.8 12.1 11.2
Stockholder's Equity:
Common stock, without par value (authorized,
issued and outstanding - 2,500 shares
owned by John Deere Credit Company) 112.8 112.8 112.8
Retained earnings 499.3 626.3 624.7
Total stockholder's equity 12.1 739.1 737.5
TOTAL $3,771.3 $3,753.5 $4,244.0
See Notes to Interim Financial Statements<PAGE>
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
Condensed Statement of Consolidated Cash Flows
(UNAUDITED)
(In millions of dollars)
Three Months Ended
January 31
1994 1993
Cash Flows from Operating Activities:
Net Income $ 23.0 $ 23.6
Adjustments to reconcile net income
to net cash provided by operating
activities .4 (1.2)
Net cash provided by operating
activities 23.4 22.4
Cash Flows from Investing Activities:
Cost of receivables and leases
acquired (828.7) (749.7)
Collections of receivables 686.7 804.3
Proceeds from sales of
receivables 4.9 3.9
Other 93.5 4.4
Net cash provided by (used for)
investing activities (43.6) 62.9
Cash Flows from Financing
Activities:
Increase (Decrease)
in notes payable
to other 642.3 (371.4)
Change in receivable/payable with
Deere & Company (425.6) 16.2
Proceeds from the issuance of long-term
borrowings -- 344.0
Principal payment on long-term
borrowings (153.0) --
Dividends paid (150.0)
Net cash used for financing
activities (86.3) (11.2)
Net increase (decrease) in cash and cash
equivalents (106.5) 74.1
Cash and cash equivalents at
beginning of period 165.2 91.1
Cash and cash equivalents at
end of period $ 58.7 $ 165.2
See Notes to Interim Financial Statements<PAGE>
Notes to Interim Financial Statements
(1) The consolidated financial statements of John Deere Capital
Corporation
(Capital Corporation) and its wholly owned subsidiaries,
Deere Credit, Inc.
(DCI), Deere Credit Services, Inc. (DCS), Farm Plan
Corporation (FPC) and
John Deere Receivables, Inc. (JDRI), (collectively referred
to as the
Company) have been prepared by the Company, without audit,
pursuant to
the rules and regulations of the Securities and Exchange
Commission.
Certain information and footnote disclosures normally
included in annual
financial statements prepared in accordance with generally
accepted
accounting principles have been condensed or omitted as
permitted by
such rules and regulations. All adjustments, consisting of
normal recurring
adjustments, have been included. Management believes that
the
disclosures are adequate to present fairly the financial
position, results of
operations and cash flows at the dates and for the periods
presented. It is
suggested that these condensed financial statements be read
in
conjunction with the financial statements and the notes
thereto included in
the Company's latest annual report on Form 10-K. Results
for interim
periods are not necessarily indicative of those to be
expected for the fiscal
year.
(2) Providing and administering financing for retail purchases
of new and used
John Deere agricultural, industrial and lawn and grounds
care equipment is
the principal business of the Capital Corporation. The
Capital Corporation
purchases retail installment sales and loan contracts
(retail notes) from
Deere & Company and its wholly owned subsidiaries
(collectively called
John Deere). These retail notes are acquired by John Deere
through John
Deere retail dealers in the United States. The Company
also purchases
and finances retail notes unrelated to John Deere,
representing primarily
recreational vehicle and recreational marine product notes
acquired from
independent dealers of those products and from marine
mortgage service
companies (recreational product retail notes). The Company
also leases
John Deere equipment to retail customers, finances and
services
unsecured revolving charge accounts acquired from merchants
in the
agricultural, lawn and grounds care and marine retail
markets, and
provides wholesale financing for recreational vehicles and
John Deere
engine inventories held by dealers of those products.
Retail notes,
revolving charge accounts, financing leases and wholesale
notes
receivable are collectively called "Receivables."
Receivables and operating
leases are collectively called "Receivables and Leases."
(3) The consolidated ratio of earnings before fixed charges to
fixed charges
was 1.97 to 1 during the first three months this year
compared with 1.94 to <PAGE>
1 (excluding the effect of accounting changes)
in the comparable
period of
1993. "Earnings" consist of income before income taxes and
changes in
accounting to which are added fixed charges. "Fixed charges"
consist of
interest on indebtedness, amortization of debt discount and
expense, an
estimated amount of rental expense under capitalized leases
which is
deemed to be representative of the interest factor and rental
expense
under operating leases.
(4) In the fourth quarter of 1993, the Company adopted FASB
Statement No.
106, Employers' Accounting for Postretirement Benefits
Other Than
Pensions, and FASB Statement No. 112, Employers' Accounting
for
Postemployment Benefits, effective November 1, 1992.
Previous quarters
of 1993 were restated as required by these Statements. As
a result, the
first quarter of 1993 has been restated to reflect the
cumulative pretax
effect of these changes in accounting of $5.7 million ($3.8
million after
income taxes) and an incremental pretax benefits expense of
$.1 million.
(5) In December 1993, the Company declared and paid a dividend
of $150
million to John Deere Credit Company, which in turn
declared and paid a
dividend of $150 million to Deere & Company.
(6) The Company is subject to various unresolved legal actions
which arise in
the normal course of its business. The most prevalent of
such actions
relates to state and federal regulations concerning retail
credit. There are
various claims and pending actions against the Company with
respect to
commercial and consumer financing matters. These matters
include
lawsuits pending in federal and state courts in Texas
alleging that certain of
the Company's retail finance contracts for recreational
vehicles and boats
violate certain technical provisions of Texas consumer
credit statutes
dealing with maximum rates, licensing and disclosures. The
plaintiffs in
Texas claim they are entitled to common law and statutory
damages and
penalties. On November 6, 1992 the federal District Court
certified a
federal class action under Rule 23(b)(3) of the Federal
Rules of Civil
Procedure in an action brought by Russell Durrett,
individually and on
behalf of others, against John Deere Company (filed in
state court on
February 19, 1992 and removed on February 26, 1992 to the
United States
District Court for the Northern District of Texas, Dallas
Division). On
October 12, 1993, in a case named Deere Credit, Inc. v
Shirley Y. Morgan,
et al., filed February 20, 1992, the 281st District Court
for Harris County,
Texas, certified a class under Rules 42(b)(1)(A),
42(b)(1)(B) and 42(b)(2) of
the Texas Rules of Civil Procedure, of all persons who opt
out of the federal
class action. The Company believes that it has substantial
defenses and
intends to defend the actions vigorously. Although, it is
not possible to
predict with certainty the outcome of these unresolved
legal actions or
reasonably estimate the range of possible loss and the
amounts of claimed
damages and penalties are unspecified, the Company believes
that these
unresolved legal actions will not be material..
(7) Certain amounts for 1993 have been reclassified to conform
with 1994
financial statement presentations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and
Results of Operations.
Results of Operations
During the first three months of 1994, the volume of net retail
notes (face value
less unearned finance income) acquired by the Company totaled
$592 million, an
increase of eight percent, compared with net acquisitions of $548
million during
the same period last year. Net retail note acquisitions from
John Deere increased
by approximately $41 million for the three months ended January
31, 1994
compared with the same period last year. Acquisitions of
agricultural and
industrial equipment retail notes were higher in the first three
months of 1994,
whereas acquisitions of lawn and grounds care retail notes
declined. The lower
acquistions of lawn and grounds care retail notes were more than
offset by a
corresponding increase in John Deere Credit Revolving Plan
acquisitions. Note
aquisitions from John Deere continued to represent a significant
proportion of the
total United States retail sales of John Deere equipment. Net
acquisitions of
recreational product retail notes were $3 million higher in the
first quarter of 1994
as compared to the first quarter of 1993. The primary reason for
this increase
was the marine financing business, which was up 35 percent in the
first quarter of
1994 compared with the same period last year.
At January 31, 1994, the net amount of retail notes held by the
Company was
$2.943 billion compared with $2.792 billion at October 31, 1993
and $3.509 billion
at January 31, 1993. Within this category, recreational product
notes totalled
$780 million, $804 million and $854 million at January 31, 1994,
October 31, 1993
and January 31, 1993, respectively. Retail notes increased
during the first
quarter of 1994 as the cost of net retail notes acquired exceeded
collections by
$158 million. Although the cost of retail notes acquired
exceeded collections by
$720 million during the past 12 months, the balance of retail
notes decreased
during the same period mainly due to sales of John Deere retail
notes from which
the Company received proceeds of $1.143 billion.
The amount of retail notes administered by the Company, which
includes retail
notes previously sold, totaled $4.080 billion at January 31,
1994, $4.185 billion at
October 31, 1993, and $4.050 billion at January 31, 1993. At
January 31, 1994,
the amount of retail notes previously sold was $1.137 billion
compared with
$1.394 billion at October 31, 1993 and $541 million at January
31, 1993. On
January 31, 1994, the Company was contingently liable for
recourse in the
maximum amount of $106 million on retail notes previously sold.
Revolving charge accounts receivable totaled $282 million at
January 31, 1994
compared with $331 million at October 31, 1993 and $216 million
at January 31,
1993. Acquisitions increased 27 percent in the first quarter of
1994 compared
with the same period last year. The balance of revolving charge
accounts
receivable increased in the first three months of 1994 due to the
growth in both
Farm Plan and John Deere Credit Revolving Plan volumes. The
balance of
revolving charge accounts receivable at January 31, 1994 included
$143 million
of Farm Plan receivables and $139 million of John Deere Credit
Revolving Plan
receivables. This balance compared with $117 million and $99
million,
respectively, at January 31, 1993. The growth in John Deere
Credit Revolving
Plan receivables resulted primarily from the financing of lawn
and grounds care
equipment sales.
At January 31, 1994, the net investment in financing and
operating leases on
John Deere equipment was $209 million compared with $204 million
at October
31, 1993 and $166 million at January 31, 1993. Lease
acquisitions increased
during the first quarter of 1994 compared with the same periods
last year due
substantially to the continuation of a lease program applicable
to certain models
of John Deere tractors. The Company also administers municipal
leases owned
by Deere & Company which totaled $42 million at January 31, 1994,
$43 million at
October 31, 1993, and $46 million at January 31, 1993.
Wholesale notes receivable on recreational vehicle and John Deere
engine
inventories totaled $122 million at January 31, 1994, $110
million at October 31,
1993 and $125 million at January 31, 1993. Wholesale note
acquisitions
increased seven percent during the first quarter of 1994
primarily due to
acquisitions related to recreational vehicle inventories.
Total Receivables and Leases acquired totaled $829 million during
the first
quarter of 1994, an 11 percent increase compared with
acquisitions of $750
million during the same period of 1993.
Total Receivables and Leases financed by the Company were $3.556
billion at
January 31, 1994, $3.437 billion at October 31, 1993 and $4.016
billion at January
31, 1993. Total Receivables and Leases administered by the
Company on those
same dates were $4.735 billion, $4.873 billion and $4.603
billion, respectively.
The total face value of retail notes outstanding with any
installment 60 days or
more past due was $43 million at January 31, 1994 compared with
$42 million at
October 31, 1993 and $67 million at January 31, 1993. The amount
of retail note
installments 60 days or more past due was $8 million at January
31, 1994, $7
million at October 31, 1993 and $10 million at January 31, 1993.
These past-due
installments represented .22 percent of the unpaid face value of
retail notes held
at January 31, 1994, .19 percent at October 31, 1993 and .22
percent at January
31, 1993.
The total balance of revolving charge accounts past due 60 days
or more was
$6.6 million, $5.3 million and $7.4 million at January 31, 1994,
October 31, 1993
and January 31, 1993, respectively. These past-due amounts
represented 2.3
percent, 1.6 percent and 3.4 percent of the revolving charge
accounts receivable
held at those respective dates.
The total balance of financing and operating lease payments 60
days or more
past due was $.9 million at January 31, 1994, $.5 million at
October 31, 1993 and
$1.4 million at January 31, 1993. These past-due installments
represented .6
percent, .3 percent and 1.0 percent of the total lease payments
receivable at
those respective dates.
The total Receivable and Lease amounts 60 days or more past-due
were $16.7
million at January 31, 1994 compared with $12.7 million at
October 31, 1993 and
$18.9 million at January 31, 1993. These past-due amounts
represent .38
percent, .30 percent and .38 percent of the face value of
Receivables and Leases
held at those same dates.
Deposits withheld from dealers and merchants, representing mainly
the
aggregate dealer retail note and lease withholding accounts from
individual John
Deere dealers to which losses from retail notes and leases
originating from the
respective dealers can be charged, amounted to $98 million at
January 31, 1994
compared with $105 million at October 31, 1993 and $93 million at
January 31,
1993. Since January 1992, all industrial equipment retail notes
have been
accepted on a non-recourse basis, thereby eliminating dealer
deposits related to
these acquisitions. The Company's allowance for credit losses on
all Receivables
and Leases financed, which totaled $78 million at January 31,
1994, $77 million at
October 31, 1993 and $83 million at January 31, 1993, also
provides for potential
uncollectibility. As a percent of the unpaid balance of total
Receivables and
Leases financed, the allowance for credit losses represented 2.2
percent, 2.3
percent and 2.1 percent at January 31, 1994, October 31, 1993 and
January 31,
1993, respectively.
During 1992 and 1993, the Company sold retail notes to
limited-purpose business
trusts, which utilized the notes as collateral for the issuance
of asset backed
securities to the public. At the time of the sales, "other
receivables" from the
trusts were recorded at net present value. The receivables
relate to deposits
made pursuant to recourse provisions and other payments to be
received under
the sales agreements. The receivables are amortized to their
value at maturity
using the interest method. The Company is also compensated by
the trusts for
certain expenses incurred in the administration of these
receivables.
Net income for the first quarter of 1994 was $23.0 million
compared with $27.4
million in the same period last year, excluding the cumulative
effect of accounting
changes ($23.6 million after the accounting changes). The
earnings were down
from last year primarily reflecting lower revenues from a smaller
Receivable and
Lease portfolio caused by the sales of retail notes in 1993. The
impact of these
lower revenues was partially offset by higher securitization and
servicing fee
income from retail notes previously sold but still administered.
Revenues totaled $104.7 million in the first quarter of 1994, a
decrease of nine
percent compared with revenues of $115.1 million last year. The
average balance
of total net Receivables and Leases financed was 14 percent lower
than in the
first three months of last year, due primarily to the sales of
receivables during
1993. Revenues have also been affected by a lower level of
interest rates and the
corresponding lower finance charges earned on the Receivable and
Lease
portfolio compared with the first quarter last year. These
developments were
partially offset by the increase in securitization and servicing
fee income from
retail notes previously sold to $9.7 million in the first quarter
of 1994 compared to
$2.5 million in the first quarter of 1993. Additionally, lower
borrowing rates and a
decrease in average borrowings this year resulted in an 18
percent decrease in
interest expense compared with the first quarter of 1993. The
ratio of earnings
before fixed charges to fixed charges was 1.97 to 1 for the first
quarter of 1994
compared with 1.94 to 1 (excluding the effects of accounting
changes) in the
same period of 1993.
Revolving charge account income and lease revenues were higher in
the first
quarter of 1994 compared with the same period in 1993, due
primarily to higher
average balances of these receivables and leases financed this
year.
Interest expense for the first quarter was down from $43.6
million last year to
$35.9 million in 1994. As previously mentioned, interest expense
decreased
during the first quarter of 1994 as a result of the reduced
borrowings required to
finance the lower average Receivable and Lease portfolio and
lower interest
rates. Total average borrowings during the first quarter of 1994
were $2.843
billion, a 13 percent decrease from last year's first quarter
average borrowings of
$3.254 billion. The weighted average interest rate incurred on
all interest-bearing
borrowings for the first quarter of this year was 4.8 percent
compared to 5.1
percent during last year's first quarter.
Administrative and operating expenses during the first quarter of
1993 were
reduced by $1.4 million of reimbursed administrative expenses
(servicing fee
income) relating to retail notes previously sold. Beginning in
the second quarter
of 1993, such reimbursed expenses were reclassified as
"Securitization and
servicing fee income." Excluding the effects of the
reclassification, administrative
and operating expenses increased only slightly during the first
quarter of 1994.
During the first quarter of 1994, the provision for credit losses
totaled $9.2 million
compared with $8.6 million in the same period last year. The
increase during the
first quarter of 1994 was due to an increase in the balance of
Receivables and
Leases financed since October 31, 1993 compared to an overall
decrease in the
first quarter of 1993. Total write-offs of Receivables and
Leases financed were
$8.2 million during the first quarter of 1994 compared with $8.3
million last year.
Write-offs of John Deere notes totaled $1.4 million during the
first quarter of 1994
compared with $1.1 million last year. Write-offs of recreational
product retail
notes totaled $5.3 million in the first quarter of 1994 compared
with $5.5 million in
last year's first quarter.
Capital Resources and Liquidity
The Company relies on its ability to raise substantial amounts of
funds to finance
its Receivable and Lease portfolios. The Company's primary
sources of funds for
this purpose are a combination of borrowings and equity capital.
Additionally,
the Company periodically sells substantial amounts of retail
notes in the public
market. The Company's ability to obtain funds is affected by its
debt ratings,
which are closely related to the outlook for and the financial
condition of Deere &
Company, and the nature and availability of support facilities,
such as its lines of
credit. For information regarding Deere & Company and its
business, see Exhibit
99.
The Company's ability to meet its debt obligations is supported
in a number of
ways as described below. All commercial paper issued is backed
by bank credit
lines. The assets of the Company are self-liquidating in nature.
A strong equity
position is available to absorb unusual losses on these assets.
Liquidity is also
provided by the Company's ability to sell or "securitize" these
assets. Asset-
liability risk is also actively managed to minimize exposure to
interest rate
fluctuations.
The Company's business is somewhat seasonal, with overall
acquisitions of
Receivables and Leases traditionally higher in the second half of
the fiscal year
than in the first half, and overall collections of Receivables
and Leases
traditionally somewhat higher in the first six months than in the
last half of the
fiscal year.
During the first quarter of 1994, $23 million in cash was
provided from operating
activities and $106 million of cash and cash equivalent were used
for financing
and investing activities. Cash outlays for financing activities
totaled $86 million
during the first quarter of 1994, resulting from a $426 million
decrease in
payables to Deere & Company and payment of $150 million dividend
which were
partially offset by a $490 million net increase in outside
borrowings. Cash used
for investing activities totaled $44 million in the current
quarter, primarily because
the cost of Receivables and Leases acquired exceeded the
collections of
receivables. Other cash flows from investing activities
increased in 1994 mainly
due to collections on receivables previously sold that were being
held for
payment to the trusts.
During the first quarter of 1993, the aggregate cash provided
from operating and
investing activities was used mainly to increase cash and cash
equivalents and to
reduce outside borrowings. Cash provided from the Company's
operating
activities was $22 million during the first three months of 1993.
Investing
activities provided $63 million of cash in the first quarter of
1993, primarily
because seasonally high collections of credit receivables
exceeded the cost of
Receivables and Leases acquired by $55 million. Cash used for
financing
activities totaled $11 million during the first three months of
1993, representing a
net decrease in outside borrowings of $27 million and a net
increase of $16
million in payables to Deere & Company.
Total interest-bearing indebtedness amounted to $2.841 billion at
January 31,
1994 compared with $2.777 billion at October 31, 1993 and $3.244
billion at
January 31, 1993. Total borrowing levels increased during the
first three months
of 1994 but decreased during the last twelve months, generally
corresponding
with the level of net Receivables and Leases financed. The ratio
of total interest-
bearing debt to stockholder's equity was 4.6 to 1, 3.8 to 1 and
4.4 to 1 at January
31, 1994, October 31, 1993 and January 31, 1993, respectively.
In January 1994, the Company redeemed the $40 million balance of
its
outstanding 9.35% subordinated debentures due in 2003. During
the first three
months of this year, the Company retired $103 million of
medium-term notes.
At January 31, 1994, the Capital Corporation and Deere & Company,
jointly, had
unsecured lines of credit with various banks in North America and
overseas
totaling $2.509 billion which included a long-term credit
agreement totaling
$1.675 billion. In addition, the Capital Corporation, Deere &
Company, John
Deere Limited (Canada) and John Deere Finance Limited (Canada),
jointly, have
a long-term credit agreement with various banks in North America
and overseas
totaling $774 million. In total, the Capital Corporation had
$3.283 billion
aggregate lines of credit available at January 31, 1994 of which
$1.663 billion
were unused. For the purpose of computing unused credit lines,
the aggregate
of total short-term borrowings, excluding the current portion of
long-term
borrowings, of the Capital Corporation, Deere & Company, John
Deere Limited
(Canada) and John Deere Finance Limited (Canada) were considered
to
constitute utilization. Annual facility fees on the credit
agreements are charged to
the Capital Corporation based on utilization.
During the first quarter of 1994, the Company declared and paid a
dividend of
$150 million to John Deere Credit Company, which in turn declared
and paid a
dividend of $150 million to Deere & Company. On February 25,
1994, the
Company declared a dividend of $20 million to John Deere Credit
Company,
which in turn declared a dividend to Deere & Company, each to be
paid on March
7, 1994.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
See Note (6) to the Interim Financial Statements.
Item 2. Changes in Securities.
On January 4, 1994, the Company redeemed all of its
outstanding
9.35% subordinated debentures due 2003.
Item 3. Defaults upon Senior Securities.
Omitted pursuant to instruction H(2).
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted pursuant to instruction H(2).
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
See the index to exhibits immediately preceding the
exhibits
filed with this report.
Certain instruments relating to long-term debt,
constituting
less than 10% of the registrant's total assets, are
not filed as
exhibits herewith pursuant to Item
601(b)(4)(iii)(A) of
Regulation S-K. The registrant will file copies of
such
instruments upon request of the Commission.
(b) Reports on Form 8-K.
Current report on Form 8-K dated November 17, 1993
(item 5).
Current report on Form 8-K dated December 7, 1993
(items 5
and 7).
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
JOHN DEERE CAPITAL CORPORATION
Date: ____________________
By: /s/ P. E. Leroy
Vice President and Treasurer
(Chief Financial Officer)<PAGE>
EXHIBIT INDEX
Exhibit Page No.
(12) Computation of ratio of earnings to
fixed charges. 17
(99) Part I of Deere & Company Form 10-Q for the quarter
ended January 31, 1994.*
_______________________
*Incorporated by reference. Copies of these exhibits are
available from the
Company upon request.
Exhibit 12
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS)
Three Months Ended 31 January
1994 1993
Earnings:
Income before income
taxes and changes
in accounting $35,276 $41,439
Fixed charges 36,520 44,212
Total earnings $71,796 $85,651
Fixed charges:
Interest expense $35,901 $43,583
Rent expense 619 629
Total fixed charges $36,520 $44,212
Ratio of earnings to
fixed charges* 1.97 1.94
Year Ended 31 October
Earnings: 1993 1992 1991
Income before income
taxes and changes
in accounting $169,339 $142,920 $110,820
Fixed charges 170,226 191,930 $230,901
Total earnings $339,565 $334,850 $341,721
Fixed charges:
Interest expense $167,787 $189,288 $228,308
Rent expense 2,439 2,642 2,593
Total fixed charges $170,226 $191,930 $230,901
Ratio of earnings to
fixed charges* 1.99 1.74 1.48
Year Ended 31 October
Earnings: 1990 1989
Income before income
taxes and changes
in accounting $ 99,366 $ 99,971
Fixed charges 216,985 214,038
Total earnings $316,351 $314,009
Fixed charges:
Interest expense $214,707 $212,144
Rent expense 2,278 1,894
Total fixed charges $216,985 $214,038
Ratio of earnings to
fixed charges* 1.46 1.47
_____
"Earnings" consist of income before income taxes, changes in
accounting and fixed charges. "Fixed charges" consist of
interest
on indebtedness, amortization of debt discount and expense, an
estimated amount of rental expense under capitalized leases which
is deemed to be representative of the interest factor and rental
expense under operating leases.
* The Company has not issued preferred stock, therefore, the
ratios of earnings to combined fixed charges and preferred
stock dividends are the same as the ratios presented above.
