SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________
FORM 10-Q
___________________
Quarterly Report Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
For the quarterly period ended July 31, 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 July 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 15.
<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
July 31
1994 1993
Revenues:
Finance income earned on retail notes $ 75.8 $ 75.3
Revolving charge account income 18.1 15.1
Lease revenues 11.1 10.5
Finance income earned on wholesale notes 2.7 2.6
Net gain on retail notes sold (.4) 2.1
Interest income from short-term investments 1.4 1.9
Securitization and servicing fee income 5.6 6.1
Other income 1.0 .8
Total revenues 115.3 114.4
Expenses:
Interest expense 43.7 40.7
Administrative and operating expenses 17.9 17.1
Provision for credit losses 7.3 6.3
Fees paid to Deere & Company 1.6 1.8
Depreciation of equipment on
operating leases 5.2 5.2
Total expenses 75.7 71.1
Income before Income Taxes and Changes
in Accounting 39.6 43.3
Provision for Income Taxes 13.8 14.7
Income Before Changes in Accounting 25.8 28.6
Changes in Accounting
Net Income $ 25.8 $ 28.6
______________
See Notes to Interim Financial Statements
<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)
Nine Months Ended
July 31
1994 1993
Revenues:
Finance income earned on retail notes $210.4 $241.4
Revolving charge account income 45.7 37.7
Lease revenues 32.0 29.2
Finance income earned on wholesale notes 8.1 7.9
Net gain on retail notes sold 1.7 8.1
Interest income from short-term investments 4.2 4.8
Securitization and servicing fee income 22.3 14.2
Other income 2.8 3.0
Total revenues 327.2 346.3
Expenses:
Interest expense 116.0 127.1
Administrative and operating expenses 57.3 51.9
Provision for credit losses 18.8 22.5
Fees paid to Deere & Company 4.7 5.4
Depreciation of equipment on
operating leases 15.6 14.1
Total expenses 212.4 221.0
Income before Income Taxes and Changes
in Accounting 114.8 125.3
Provision for Income Taxes 40.1 42.5
Income Before Changes in Accounting 74.7 82.8
Changes in Accounting (3.8)
Net Income $ 74.7 $ 79.0
______________
See Notes to Interim Financial Statements
<PAGE>
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(UNAUDITED)
(In millions of dollars)
Jul 31 Oct 31 Jul 31
1994 1993 1993
ASSETS
Cash and Cash Equivalents $164.0 $165.2 $267.8
Receivables and Leases:
Retail notes 3,468.0 2,791.7 3,164.5
Revolving charge accounts 401.0 331.1 319.6
Financing leases 103.0 84.9 78.2
Wholesale notes 112.7 109.6 113.1
Total receivables 4,084.7 3,317.3 3,675.4
Equipment on operating leases 128.5 119.3 118.9
Total receivables and leases 4,213.2 3,436.6 3,794.3
Allowance for credit losses (79.2) (77.5) (84.1)
Total receivables and
leases - net 4,134.0 3,359.1 3,710.2
Other Receivables 133.0 182.8 121.8
Other Assets 54.0 46.4 50.4
TOTAL $4,485.0 $3,753.5 $4,150.2
LIABILITIES AND STOCKHOLDER'S EQUITY
Short-Term Borrowings:
Commercial paper $1,919.8 $ 454.0 $1,096.0
Deere & Company 189.4 439.5 60.0
Current maturities of long-term
borrowings 555.1 405.2 647.9
Total short-term borrowings 2,664.3 1,298.7 1,803.9
Accounts Payable and Accrued
Liabilities 129.8 120.5 104.3
Deposits Withheld from Dealers and
Merchants 106.3 104.9 100.3
Long-Term Borrowings:
Notes and debentures 645.3 1,178.2 990.0
Subordinated debt 300.0 300.0 345.0
Total long-term borrowings 945.3 1,478.2 1,335.0
Retirement Benefit Accruals &
Other Liabilities 15.5 12.1 13.8
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 511.0 626.3 680.1
Total stockholder's equity 623.8 739.1 792.9
TOTAL $4,485.0 $3,753.5 $4,150.2
See Notes to Interim Financial Statements
<PAGE>
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
Condensed Statement of Consolidated Cash Flows
(UNAUDITED)
(In millions of dollars)
Nine Months Ended
July 31
1994 1993
Cash Flows from Operating Activities:
Net income $ 74.7 $ 79.0
Adjustments to reconcile net income
to net cash provided by
operating activities 45.4 41.4
Net cash provided by operating
activities 120.1 120.4
Cash Flows from Investing Activities:
Cost of receivables and leases
acquired (2,798.6) (2,452.5)
Collections of receivables 1,957.2 2,040.8
Proceeds from sales of
receivables 61.4 590.2
Other 16.5 (5.3)
Net cash provided by (used for)
investing activities (763.5) 173.2
Cash Flows from Financing Activities:
Increase (decrease) in notes
payable to others 1,465.7 (390.6)
Change in receivable/payable with
Deere & Company (250.1) (5.8)
Proceeds from the issuance of
long-term borrowings 10.0 487.0
Principal payment on long-term
borrowings (393.4) (207.5)
Dividends paid (190.0)
Net cash provided by (used for)
financing activities 642.2 (116.9)
Net increase (decrease) in cash and
cash equivalents (1.2) 176.7
Cash and cash equivalents at beginning
of period 165.2 91.1
Cash and cash equivalents at end
of period $ 164.0 $ 267.8
_______________
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) The principal business of the Capital Corporation is
providing and administering
financing for retail purchases of new and used John Deere
agricultural, industrial
and lawn and grounds care equipment. 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 to fixed charges was
1.97 to 1 in both the first
nine months of this year and the comparable period of
1993 and was 1.89 to 1 for
the third quarter of 1994 compared with 2.05 to 1 in the
same period last year.
"Earnings" consist of income before income taxes and the
cumulative effect of
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
Financial Accounting
Standards Board (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 nine months of 1993 have been restated
to reflect the cumulative
pre-tax effect of these changes in accounting of $5.7
million ($3.8 million after
income taxes) and an incremental pre-tax benefits expense
of $.2 million.
(5) Dividends declared and paid to John Deere Credit Company
which in turn were
declared and paid to Deere & Company, in the third
quarter and first nine months
of 1994, were $20 and $190 million, respectively. There
were no dividends paid
during the same periods in 1993. On September 2, 1994
the Company declared
a dividend of $20 million to John Deere Credit Company,
which in turn declared
a dividend of $20 million to Deere & Company, each of
which was paid on
September 13, 1994.
(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
(see the Company's most recent annual report on Form 10-K
and the report on
Form 10-Q for the prior quarter.) The plaintiffs in
Texas claim they are entitled to
common law and statutory damages and penalties. The
Company obtained
certification of a mandatory class in the 281st District
Court for Harris County,
Texas, in a case named Deere Credit, Inc. v. Shirley Y.
Morgan, et al., filed
February 20, 1992. The Company believes that it has
substantial defenses and
intends to defend the Morgan and the other pending
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 nine months of 1994, the volume of retail notes
(face value less unearned
finance income) acquired by the Company totaled $1.780 billion,
an increase of 14
percent, compared with net acquisitions of $1.568 billion during
the same period last year.
Retail note acquisitions from John Deere increased by
approximately $161 million for the
nine months ended July 31, 1994 compared with the same period
last year. Acquisitions
of agricultural equipment retail notes increased and industrial
equipment retail note activity
was significantly higher in the first nine months of 1994.
Acquisitions of lawn and grounds
care retail notes declined, however, the lower acquisitions of
lawn and grounds care retail
notes were more than offset by a corresponding increase in
financings under the John
Deere Credit Revolving Plan, under which lawn and grounds care
equipment is also
financed. Note acquisitions from John Deere continued to
represent a significant
proportion of the total United States retail sales of John Deere
equipment. Acquisitions
of recreational product retail notes were $51 million higher in
the first nine months of 1994
as compared to the first nine months of 1993. The increases
resulted primarily from more
competitive financing programs in both the recreational vehicle
and recreational marine
product markets.
During the third quarter of 1994, total retail note acquisitions
increased 14 percent to $550
million compared with $484 million in the same quarter of 1993.
Retail note acquisitions
from John Deere increased by $47 million in the third quarter of
1994. Acquisitions of
recreational product retail notes increased by $19 million in the
third quarter of 1994 when
compared to the same period in 1993.
At July 31, 1994, the net amount of retail notes held by the
Company was $3.468 billion
compared with $2.792 billion at October 31, 1993 and $3.165
billion at July 31, 1993.
Within this category, recreational product notes totalled $802
million, $804 million and
$828 million at July 31, 1994, October 31, 1993 and July 31,
1993, respectively. The
balance of retail notes increased during the first nine months of
1994 as retail note
acquisitions exceeded collections by $689 million.
The amount of retail notes administered by the Company, which
includes retail notes
previously sold, totaled $4.241 billion at July 31, 1994, $4.185
billion at October 31, 1993,
and $4.082 billion at July 31, 1993. At July 31, 1994, the
amount of retail notes previously
sold was $773 million compared with $1.394 billion at October 31,
1993 and $918 million
at July 31, 1993. On July 31, 1994, the Company was contingently
liable for recourse in
the maximum amount of $75 million on retail notes previously
sold.
Revolving charge accounts receivable totaled $401 million at July
31, 1994 compared with
$331 million at October 31, 1993 and $320 million at July 31,
1993. Acquisitions
increased 17 percent in the third quarter of 1994 and 21 percent
in the first nine months
of 1994 compared with the same periods last year. The balance of
revolving charge
accounts receivable increased in the first nine 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 July 31, 1994 included $201 million
of Farm Plan
receivables and $200 million of John Deere Credit Revolving Plan
receivables compared
with $161 million and $159 million, respectively, at July 31,
1993.
At July 31, 1994, the net investment in financing and operating
leases on John Deere
equipment was $232 million compared with $204 million at October
31, 1993 and $197
million at July 31, 1993. While lease acquisitions increased 13
percent during the third
quarter compared to the same period last year, year-to-date lease
acquisitions were lower
during the first nine months of 1994 compared with the same
period last year. This
decline reflects the particularly strong leasing activity during
the first half of 1993 due to
the introduction of a lease program applicable to certain models
of John Deere tractors.
The Company also administers municipal leases owned by Deere &
Company, which
totaled $40 million at July 31, 1994, $43 million at October 31,
1993, and $42 million at
July 31, 1993.
Wholesale notes receivable on recreational vehicle and John Deere
engine inventories
totaled $113 million at July 31, 1994, $110 million at October
31, 1993 and $113 million
at July 31, 1993. Wholesale note acquisitions increased 12
percent during the first nine
months of 1994 primarily due to acquisitions related to
recreational vehicle inventories.
Total Receivables and Leases acquired totaled $2.799 billion
during the first nine months
of 1994, a 14 percent increase compared with acquisitions of
$2.452 billion during the
same period of 1993.
Total Receivables and Leases financed by the Company were $4.213
billion at July 31,
1994, $3.437 billion at October 31, 1993 and $3.794 billion at
July 31, 1993. Total
Receivables and Leases administered by the Company on those same
dates were $5.027
billion, $4.873 billion and $4.754 billion, respectively.
The balance (principal plus earned interest) of retail notes
outstanding with any installment
60 days or more past due was $23 million at July 31, 1994
compared with $33 million at
October 31, 1993 and $28 million at July 31, 1993. The amount of
retail note installments
60 days or more past due was $6 million at July 31, 1994, $7
million at October 31, 1993
and $6 million at July 31, 1993. These past-due installments
represented .17 percent of
the unpaid balance of retail notes held at July 31, 1994, .24
percent at October 31, 1993
and .18 percent at July 31, 1993.
The total balance of revolving charge accounts past due 60 days
or more was $4.9
million, $5.3 million and $3.8 million at July 31, 1994, October
31, 1993 and July 31,
1993, respectively. These past-due amounts represented 1.22
percent, 1.62 percent and
1.17 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 $.6 million at July 31, 1994, $.5 million at October 31, 1993
and $ .7 million at July
31, 1993. These past-due installments represented .26 percent,
.25 percent and .35
percent of the investment in financing and operating leases at
those respective dates.
The total balance of wholesale notes receivable 60 days or more
past due was $.1 million
at July 31, 1994, October 31, 1993 and July 31, 1993,
respectively. These past-due
amounts represented .10 percent, .11 percent and .12 percent of
the wholesale notes
receivable held at those respective dates.
The total Receivable and Lease amounts 60 days or more past-due
were $11.6 million
at July 31, 1994 compared with $12.7 million at October 31, 1993
and $10.1 million at July
31, 1993. These past-due amounts represent .28 percent, .37
percent and .27 percent
of the total Receivables and Leases held at those respective
dates.
Deposits withheld from dealers and merchants, representing mainly
the aggregate 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 $106 million at July 31, 1994 compared with $105
million at October 31,
1993 and $100 million at July 31, 1993. The Company's allowance
for credit losses on
all Receivables and Leases financed, which totaled $79 million at
July 31, 1994, $77
million at October 31, 1993 and $84 million at July 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 1.9
percent, 2.3 percent and 2.2
percent at July 31, 1994, October 31, 1993 and July 31, 1993,
respectively.
Net income for the third quarter of 1994 was $25.8 million
compared with $28.6 million in
the same period last year. The decrease in income reflects
unfavorable adjustments
related to notes previously sold and slightly lower financing
margins due to a competitive
market place.
Net income for the first nine months of 1994 totaled $74.7
million, compared with income
of $82.8 million in 1993, excluding the cumulative effect of
accounting changes ($79.0
million after the accounting changes). Compared with last year,
net income for the first
nine months of 1994 was unfavorably affected by the impact of a
smaller average
Receivable and Lease portfolio caused mainly by the sales of
retail notes in 1993, and
lower gains related to notes previously sold. This decrease was
partially offset by higher
securitization and servicing fee income from notes previously
sold but still administered
and a lower provision for credit losses.
Total revenues of $115.3 million in the third quarter of 1994
were slightly higher compared
with revenues of $114.4 million during the third quarter last
year, due primarily to the nine
percent higher average receivable and lease portfolio financed,
partially offset by lower
finance yields during the quarter and lower gains related to
notes previously sold.
Revenues for the first nine months of 1994 totaled $327.2 million
compared to $346.3 for
the same period last year. The average Receivable and Lease
portfolio financed was
approximately four percent lower during the first nine months of
1994 compared with a
year ago, primarily contributing to the lower year-to-date
revenues. This decrease was
also due to lower gains from the sale of retail notes and lower
levels of interest rates
resulting in lower finance charges earned by the Company in 1994.
The decrease in
revenues was partially offset by the previously mentioned
increase in securitization and
servicing fee income.
Revolving charge account income and lease revenues were higher in
the third quarter and
the first nine months of 1994 compared with the same periods in
1993, due primarily to
higher average balances of revolving charge accounts and leases
financed this year.
Finance income earned on wholesale notes was also slightly higher
in the third quarter
and during the first nine months of 1994 compared to the same
periods one year ago.
Interest expense for the third quarter of 1994 was $43.7 million,
an increase of seven
percent compared with $40.7 million incurred during the same
period last year due to an
increase in average borrowings. Interest expense for the first
nine months of the year
was down from $127.1 million last year to $116.0 million in 1994.
Interest expense
decreased during the first nine months 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 third quarter and
the first nine months of
1994, were $3.449 billion and $3.128 billion, respectively, a 12
percent increase from last
year's third quarter average borrowings of $3.078 billion and a
one percent decrease from
the average borrowings of $3.156 billion during the first nine
months of 1993. The
weighted average interest rate incurred on all interest-bearing
borrowings for the third
quarter and the first nine months of this year was 5.0 percent
and 4.8 percent,
respectively, compared to 5.2 and 5.1 percent during the same
periods last year.
Administrative and operating expenses increased by ten percent
during the first nine
months of 1994 primarily due to an additional provision during
the second quarter of 1994
related to a legal settlement in Texas.
During the third quarter of 1994, the provision for credit losses
totaled $7.3 million
compared with $6.3 million in the same period last year. The
increase was due primarily
to growth in the overall portfolio. The provision for credit
losses decreased from $22.5
million to $18.8 million primarily reflecting a favorable $4.5
million adjustment made in the
second quarter of 1994 related to current and expected losses on
agricultural loans.
Total write-offs of Receivables and Leases financed were $3.1
million during the third
quarter of 1994 compared with $6.2 million last year, and were
$17.1 million during the
first nine months of 1994 compared with $21.5 million last year.
Net of recoveries, there
were no write-offs of John Deere notes financed during the third
quarter of 1994
compared with $.8 million last year, while write-offs of John
Deere notes financed totaled
$2.0 million during the first nine months of 1994 compared with
$2.6 million for the same
period last year. Write-offs of recreational product retail
notes totaled $10.7 million in the
first nine months of 1994 compared with $13.2 million in the
first nine months of 1993.
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 nine months of 1994, the aggregate cash provided
from operating and
financing activities was used primarily to acquire Receivables
and Leases. Cash provided
from the Company's operating activities was $120 million during
the first nine months of
1994. Financing activities provided $642 million during the same
period, resulting from
a $1.082 billion increase in outside borrowings which was
partially offset by a $250 million
decrease in payables to Deere & Company and dividend payments
totaling $190 million.
Cash used for investing activities totaled $764 million in the
first nine months of 1994,
primarily due to the cost of Receivables and Leases acquired
exceeding collections.
Other cash flows from investing activities increased in 1994
mainly due to the collection
activity on receivables previously sold that were being held for
payment to the trusts.
Cash and cash equivalents decreased $1 million in the first nine
months of 1994.
During the first nine months of 1993, the aggregate cash provided
from operating and
investing activities was used mainly to reduce outside borrowings
and increase cash and
cash equivalents. Cash provided from the Company's operating
activities was $120
million during the first nine months of 1993. Investing
activities provided $173 million of
cash in the first nine months of 1993, resulting primarily from
$577 million of net proceeds
received from the sale of securitized retail notes. As a partial
offset of these receivable
sales proceeds, funds used for Receivable and Lease acquisitions
exceeded collections
by $412 million in the nine month period last year. Cash used
for financing activities
totaled $117 million during the first nine months of 1993,
representing a net decrease in
outside borrowings of $111 million and a decrease of $6 million
in obligations to Deere
& Company. Additionally, there was a $177 million increase in
cash and cash equivalents
during the first nine months of 1993.
Total interest-bearing indebtedness amounted to $3.610 billion at
July 31, 1994 compared
with $2.777 billion at October 31, 1993 and $3.139 billion at
July 31, 1993. Total
borrowing levels increased during the first nine months of 1994
and during the last twelve
months, generally corresponding with the level of Receivables and
Leases financed and
dividends paid. The ratio of total interest-bearing debt to
stockholder's equity was 5.8 to
1, 3.8 to 1 and 4.0 to 1 at July 31, 1994, October 31, 1993 and
July 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 nine
months of this year, the
Company issued $10 million and retired $343 million of
medium-term notes.
At July 31, 1994, the Capital Corporation and Deere & Company,
jointly, had unsecured
lines of credit with various banks in North America and overseas
totaling $2.508 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, had a long-term credit
agreement with various banks
in North America and overseas totaling $741 million. In total,
the Capital Corporation had
$3.249 billion in aggregate lines of credit available at July 31,
1994 of which $824 million
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.
Stockholder's equity was $624 million at July 31, 1994 compared
with $739 million at
October 31, 1993 and $793 million at July 31, 1993. The decrease
of $115 million in the
first nine months of 1994 resulted from dividends declared of
$190 million offset by net
income of $74.7 million.
On September 2, 1994 the Company declared a dividend of $20
million to John Deere
Credit Company, which in turn declared a dividend of $20 million
to Deere & Company,
each of which was paid on September 13, 1994.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
See Note (6) to the Interim Financial Statements.
Item 2. Changes in Securities.
None.
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 percent 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 May 24, 1994
(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: 13 September 1994 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 16
fixed charges.
(27) Financial Data Schedule 17
(99) Part I of Deere & Company Form 10-Q for the quarter
ended July 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)
Nine Months Ended 31 July
1994 1993
Earnings:
Income before income
taxes and changes
in accounting $114,788 $125,314
Fixed charges 117,883 128,980
Total earnings $232,671 $254,294
Fixed charges:
Interest expense $115,967 $127,104
Rent expense 1,916 1,876
Total fixed charges $117,883 $128,980
Ratio of earnings to
fixed charges* 1.97 1.97
Year Ended October 31
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, the cumulative
effect of 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.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
(In millions of dollars except per share amounts)
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Form 10-Q and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
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<NAME> JOHDDEERECAPITALCORP
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-START> NOV-01-1993
<PERIOD-END> JUL-31-1994
<EXCHANGE-RATE> 1
<CASH> 164
<SECURITIES> 0
<RECEIVABLES> 4085
<ALLOWANCES> 79
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14
<DEPRECIATION> 9
<TOTAL-ASSETS> 4485
<CURRENT-LIABILITIES> 0
<BONDS> 945
<COMMON> 113
0
0
<OTHER-SE> 511
<TOTAL-LIABILITY-AND-EQUITY> 4485
<SALES> 0
<TOTAL-REVENUES> 327
<CGS> 0
<TOTAL-COSTS> 16
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<LOSS-PROVISION> 19
<INTEREST-EXPENSE> 116
<INCOME-PRETAX> 115
<INCOME-TAX> 40
<INCOME-CONTINUING> 75
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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