Deere John Capital (DE22B) 10-Q/A 2002 Q2 Quarterly report (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
	FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2002
Commission file no: 1-6458
JOHN DEERE CAPITAL CORPORATION
Delaware (State of incorporation)		36-2386361 (IRS employer identification no.)
1 East First Street, Suite 600
Reno, Nevada 89501
(Address of principal executive offices)
Telephone Number:(775) 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 April 30, 2002, 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 18 Pages Index to Exhibits: Page 17

PART I.  FINANCIAL INFORMATION

Item 1.     Financial Statements

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Income and Retained Earnings

(Unaudited)

(in millions)

				Three Months Ended April 30,						Six Months Ended April 30,
				2002			2001			2002			2001
Revenues
	Finance income earned on retail notes			$	101.0		$	109.2		$	203.7		$	222.8
	Lease revenues				101.9			107.8			212.0			214.5
	Finance income earned on wholesale receivables				54.3			20.0			104.9			43.4
	Revolving charge account income				32.4			28.2			61.7			55.7
	Operating loan income				6.4			9.1			12.8			17.8
	Securitization and servicing fee income				13.7			9.2			23.3			17.3
	Net gain on receivables and leases sold				41.8			7.3			71.6			16.9
	Interest income from short-term investments				2.6			6.3			5.4			7.2
	Other income				2.0			5.9			9.6			10.9
			Total revenues		356.1			303.0			705.0			606.5
Expenses
	Interest expense				88.4			119.8			186.0			243.2
	Operating expenses:
		Administrative and operating expenses			60.1			39.7			106.5			79.5
		Provision for credit losses			69.1			20.6			89.4			28.2
		Fees paid to John Deere			5.3			4.1			10.7			7.9
		Depreciation of equipment on operating leases			60.8			60.7			128.0			123.4
			Total operating expenses		195.3			125.1			334.6			239.0
			Total expenses		283.7			244.9			520.6			482.2
Income of consolidated group before income taxes					72.4			58.1			184.4			124.3
Provision for income taxes					28.7			21.2			67.9			43.4
Income of consolidated group					43.7			36.9			116.5			80.9
Equity in loss of unconsolidated affiliates					(1.1	)		(1.5	)		(2.0	)		(1.0	)
Net income					42.6			35.4			114.5			79.9
Cash dividends declared					(60.0	)					(200.0	)
Retained earnings at beginning of period					1,095.2			1,050.0			1,163.3			1,005.5
Retained earnings at end of period				$	1,077.8		$	1,085.4		$	1,077.8		$	1,085.4

See Notes to Interim Financial Statements.

Page 2

John Deere Capital Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in millions)
								April 30, 2002				October 31, 2001				April 30, 2001
Assets
	Cash and cash equivalents						$		462.6		$		502.2		$		289.4
	Receivables and leases
			Retail notes						4,273.2				5,625.3				4,592.0
			Revolving charge accounts						781.0				814.3				640.9
			Operating loans						490.4				501.2				428.7
			Wholesale receivables						3,187.5				2,995.5				725.3
			Financing leases						461.2				479.5				444.8
						Total receivables			9,193.3				10,415.8				6,831.7
			Equipment on operating leases - net						1,276.8				1,484.8				1,489.0
						Total receivables and leases			10,470.1				11,900.6				8,320.7
			Allowance for credit losses						(157.5	)			(110.4	)			(90.6	)
						Total receivables and leases - net			10,312.6				11,790.2				8,230.1
	Notes receivable - unconsolidated affiliates								273.2				313.9				195.3
	Other receivables								139.4				77.7				97.4
	Investment in unconsolidated affiliates								10.5				5.9				7.0
	Other assets								237.7				236.6				180.2
Total Assets							$		11,436.0		$		12,926.5		$		8,999.4
Liabilities and Stockholder's Equity
		Short-term borrowings:
				Commercial paper			$		1,262.2		$		2,358.5		$		1,128.4
				Extendible commercial notes and other notes payable					32.7				23.9				23.3
				John Deere					523.2				1,612.4				67.6
				Current maturities of long-term borrowings					2,489.1				2,528.7				2,179.4
					Total short-term borrowings				4,307.2				6,523.5				3,398.7
		Accounts payable and accrued liabilities
				Accrued interest on debt					49.3				44.4				52.7
				Other payables					299.3				459.0				559.1
					Total accounts payable and accrued liabilities				348.6				503.4				611.8
		Deposits withheld from dealers and merchants							130.8				134.2				131.0
		Long-term borrowings:
				Senior debt					4,651.2				3,708.8				3,553.9
				Subordinated debt					150.0				150.0				150.0
				Total long-term borrowings					4,801.2				3,858.8				3,703.9
				Total liabilities					9,587.8				11,019.9				7,845.4
		Stockholder's equity:
				Common stock, without par value (issued and outstanding 2,500 shares owned by John Deere Credit Company)					812.8				812.8				112.8
				Retained earnings					1,077.8				1,163.3				1,085.4
				Accumulated other comprehensive income (loss)					(42.4	)			(69.5	)			(44.2	)
				Total stockholder's equity					1,848.2				1,906.6				1,154.0
Total Liabilities and Stockholder's Equity							$		11,436.0		$		12,926.5		$		8,999.4
See Notes to Interim Financial Statements

Page 3

John Deere Capital Corporation and Subsidiaries
Statements of Consolidated Cash Flows
(Unaudited)
(in millions)
	Six Months Ended April 30,
	2002			2001
Cash Flows from Operating Activities:
Net income	$	114.5			$	79.9
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses		89.4				28.2
Provision for depreciation and amortization		130.7				125.5
Undistributed earnings of unconsolidated affiliates		2.0				1.0
Other		(113.1	)			38.4
Net cash provided by operating activities		223.5				273.0
Cash Flows from Investing Activities:
Cost of receivables and leases acquired		(7,678.1	)			(4,157.8	)
Collections of receivables		6,018.2				2,915.3
Change in notes receivable - unconsolidated affiliates		40.8				(55.3	)
Proceeds from sales of receivables and leases		2,613.0				1,359.4
Acquisition of business		(7.3	)			(5.1	)
Other		176.7				56.2
Net cash provided by investing activities		1,163.3				112.7
Cash Flows from Financing Activities:
Change in commercial paper		(1,118.2	)			(1,340.6	)
Change in extendible commercial notes and other notes payable		9.2				19.6
Change in receivable from/payable to John Deere		(1,031.5	)			(439.0	)
Proceeds from issuance of long-term borrowings		2,213.6				2,427.2
Principal payments on long-term borrowings		(1,298.1	)			(919.4	)
Dividends paid		(200.0	)
Net cash used for financing activities		(1,425.0	)			(252.2	)
Effect of Exchange Rate Changes on Cash		(1.4	)
Net increase (decrease) in cash and cash equivalents		(39.6	)			133.5
Cash and cash equivalents at beginning of period		502.2				155.9
Cash and cash equivalents at end of period	$	462.6			$	289.4

See Notes to Interim Financial Statements.

Page 4

John Deere Capital Corporation and Subsidiaries

Notes to Interim Financial Statements

(Unaudited)

(1)

The consolidated financial statements of John Deere Capital Corporation (Capital Corporation) and its subsidiaries (collectively called 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 accounting principles generally accepted in the United States 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 interim 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 int erim periods are not necessarily indicative of those to be expected for the year. 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 and related disclosures. Actual results could differ from those estimates. Certain amounts for prior years have been reclassified to conform with 2002 financial statement presentation. Based on the way the Company's operations are managed and evaluated by management, the Company is viewed as having one operating segment. The consolidated financial statements represent the consolidation of all companies in which the Capital Corporation has a controlling interest. The Capital Corporation records its investment in each unconsolidated affiliated company at its related equity in the net assets of such affiliate. For securitizations, the Company uses entities that meet the requirements of qualified special purpose entities as defined by Financial Accounting Standards Board Statement No. 140 (Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities) and, accordingly, the Company does not consolidate the entities.

(2)

The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company's agricultural equipment, commercial and consumer equipment, and construction and forestry divisions and used equipment taken in trade for this equipment. The Company purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere acquires these retail notes through John Deere retail dealers. The Company also purchases and finances a limited amount of non-Deere retail notes and continues to service a small portfolio of recreational products and other retail notes. In addition, the Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers (financing and operating leases). The Company also finances and services revolving charge accounts and operating loans, in most cases acquired from and offered through merchants or farm in put providers in the agricultural, commercial and consumer, and construction and forestry markets, as well as insured international export financing products (revolving charge accounts and operating loans). The Company also finances John Deere engines, John Deere agricultural, John Deere commercial and consumer, and John Deere construction and forestry equipment owned by dealers of those products (wholesale receivables). In addition, the Company purchases and administers certain trade receivables from John Deere which are included in wholesale receivables. Retail notes, revolving charge accounts, operating loans, financing leases and wholesale receivables are collectively called "Receivables." Receivables and operating leases are collectively called "Receivables and Leases."

Page 5

(3) The Company's ratio of earnings before fixed charges to fixed charges was 1.81 to 1 for the second quarter of 2002 compared with 1.48 to 1 for the second quarter of 2001. The ratio of earnings before fixed charges was 1.98 to 1 for the first six months of 2002 and 1.50 to 1 for the first six months of 2001. Earnings before fixed charges" 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.

(4) Comprehensive income, which includes all changes in the Company's equity during the period except for transactions with the stockholder, was as follows in millions of dollars:

	Three Months Ended April 30,								Six Months Ended April 30,
			2002				2001			2002			2001
Net income		$		42.6		$	35.4		$	114.5		$	79.9
Other comprehensive income (loss), net of tax:
Change in cumulative translation adjustment			(.1		)		(2.8	)		(.4	)		.6
Unrealized gain (loss) on derivatives			10.6				(12.0	)		25.6			(34.6	)
Unrealized gain on investments			.3							1.9
Comprehensive income	$		53.4			$	20.6		$	141.6		$	45.9

(5)	At April 30, 2002, the Company had guaranteed $30 million of residual value related to property being used under an operating lease.
(6)	In October 2001, the Company purchased $2.2 billion of trade receivables from John Deere. During the first six months of 2002, a significant portion of newly originated trade receivables were purchased from John Deere. These trade receivables arise from John Deere's sales of goods to dealers. Under the terms of the sales to dealers, interest is charged to dealers on outstanding balances, from the earlier of the date when goods are sold to retail customers by the dealer or the expiration of certain interest-free periods granted to the dealer at the time of the sale, until payment is received by the Company. John Deere compensates the Company for the carrying costs related to these interest-free periods.
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
Net income was $42.6 million for the second quarter and $114.5 million for the first six months of 2002, compared with $35.4 million and $79.9 million, respectively, last year. As stated in Note 6 to the financial statements, beginning at the end of the last fiscal year, Deere Capital, Inc., a wholly-owned subsidiary of the Capital Corporation, began acquiring most of the United States dealer receivables from Deere & Company's equipment operations. The increases in income are due to higher gains on retail note sales, an improved financing spread and the income earned on trade receivables purchased from John Deere. Partially offsetting these factors were loan-loss provisions recorded in the second quarter, including $28 million after-tax for potential losses related to two international trade finance customers, Allied Deals, Inc. and one of its affiliates. In addition, the Company incurred a $13 million pretax loss related to the Argentine peso devaluation in the second quarter, which b rings the total pretax loss for the first six months to $21 million. As of April 30, 2002, the Argentine portfolio of Receivables and Leases had a carrying value of approximately $8 million.

Page 6

Revenues totaled $356.1 million and $705.0 million for the second quarter and for the first six months of 2002, respectively, compared to $303.0 million and $606.5 million for the same periods a year ago. Revenues increased primarily due to a 24 percent increase in the average balance of Receivables and Leases financed during the first six months of the year. Finance income earned on retail notes totaled $203.7 million for the first six months of 2002, compared to $222.8 million for the same period in 2001. This decrease was primarily due to declining interest rates earned on the average retail note portfolio balance. Lease revenues decreased $2.5 million, to $212.0 million in the first six months of 2002, from $214.5 million in the first six months of 2001. Finance income earned on wholesale receivables increased $61.5 million, to $104.9 million for the first six months of 2002, from $43.4 million in the first six months of 2001. This increase was primarily the result of the Company purch asing trade receivables from John Deere, as disclosed in Note 6 above. Revolving charge account income was $61.7 million for the first six months of 2002, compared to $55.7 million during the same period last year. Operating loan income decreased $5.0 million to $12.8 million in the first six months of 2002, from $17.8 million in the first six months of 2001. This decrease was primarily due to declining interest rates earned on the average operating loan portfolio balance.

The net gain on Receivables and Leases sold totaled $41.8 million and $71.6 million for the second quarter and for the first six months of 2002, respectively, compared to $7.3 million and $16.9 million for the same periods a year ago. The increase was primarily due to sales of agricultural and construction and forestry retail notes (approximately $2,631 million total principal value) during the first six months of 2002, compared to the sale of agricultural retail notes (approximately $830 million total principal value) during the first six months of 2001. Additional sales of Receivables and Leases are expected to be made in the future.

Interest expense totaled $88.4 million for the second quarter of 2002, and $186.0 million for the first six months of 2002, compared to $119.8 million and $243.2 million for the same periods in 2001. This decrease was due to lower average borrowing rates.

Administrative and operating expenses were $60.1 million in the second quarter of 2002 and $106.5 million for the first six months of 2002, compared with $39.7 million and $79.5 million for the same periods in 2001. This increase is primarily due to the loss related to the Argentine peso devaluation and the higher costs associated with administering a larger Receivable and Lease portfolio. Depreciation of equipment on operating leases increased to $60.8 million in the second quarter of 2002 and $128.0 million for the first six months of 2002, compared to $60.7 million and $123.4 million for the same periods in 2001, as a result of lower residual values on newly originated operating leases and an increase in the depreciation of equipment on operating leases.

During the second quarter and first six months of 2002, the provision for credit losses totaled $69.1 million and $89.4 million, respectively, compared with $20.6 million and $28.2 million in the same periods last year. The increases were primarily due to the additional loan-loss provisions related to two international trade finance customers, Allied Deals, Inc. and one of its affiliates, a larger portfolio financed and a weaker United States economy. Additionally, write-offs increased during the first six months of 2002. The annualized provision for credit losses, as a percentage of the total average balance of Receivables and Leases financed, was 2.65 percent for the second quarter of 2002 and 1.69 percent for the first six months of 2002, compared with 1.03 percent and .68 percent for the same periods last year.

Of the additional loan-loss provisions, $44 million ($28 million after-tax) cover the Company's exposure on operating lines of credit provided to Allied Deals, Inc. and one of its affiliates for international trade accounts. The loans became non-performing and were accelerated in April 2002, after some of the underlying receivables collateral went into default in February 2002. During the second quarter of 2002, the Company obtained a judgment against Allied Deals, Inc. on one of the loans in the United States District Court for the Western District of Pennsylvania. Since then, involuntary bankruptcy petitions and other actions have been filed against Allied Deals, Inc. and some of its affiliates and principals. As a result, the Company has determined that collection of the loans is doubtful.

Page 7

Receivable and Lease acquisition volumes were as follows (in millions of dollars):

	Three Months
	Ended April 30,
		2002		2001		$ Change		% Change
Retail notes:
Agricultural equipment	$	853	$	647	$	206		32	%
Construction and forestry equipment		281		180		101		56
Commercial and consumer equipment		137		99		38		38
Recreational products				202		(202	)	(100	)
Total		1,271		1,128		143		13
Revolving charge accounts		542		459		83		18
Operating loans		269		254		15		6
Wholesale receivables		2,220		216		2,004		928
Financing leases		44		44
Equipment on operating leases		106		184		(78	)	(42	)
Total	$	4,452	$	2,285	$	2,167		95	%

	Six Months
	Ended April 30,
		2002		2001		$ Change		% Change
Retail notes:
Agricultural equipment	$	1,736	$	1,262	$	474		38	%
Construction and forestry equipment		487		347		140		40
Commercial and consumer equipment		199		142		57		40
Recreational products				290		(290	)	(100	)
Total		2,422		2,041		381		19
Revolving charge accounts		946		813		133		16
Operating loans		531		497		34		7
Wholesale receivables		3,529		455		3,074		676
Financing leases		76		78		(2	)	(3	)
Equipment on operating leases		174		274		(100	)	(36	)
Total	$	7,678	$	4,158	$	3,520		85	%

Wholesale receivable volumes increased $2,004 million in the second quarter and $3,074 million in the first six months of 2002, when compared to the same periods of 2001, primarily as a result of the Company's purchase of trade receivables from John Deere beginning in October 2001, as described in Note 6. Agricultural and construction and forestry retail note volumes increased in the second quarter and first six months of 2002 compared to the same periods last year, primarily due to retail finance programs on targeted models of equipment. These increases were partially offset by decreases in recreational product retail note volumes when compared to the same periods last year due to the Company discontinuing offering financing for recreational vehicles and yachts.

Page 8

Total Receivables and Leases held were as follows (in millions of dollars):

		April 30,		October 31,		April 30,
		2002		2001		2001
Retail notes:
Agricultural equipment	$	2,393	$	3,610	$	2,858
Construction and forestry equipment		1,125		1,293		1,096
Commercial and consumer equipment		661		611		506
Recreational products		94		111		132
Total		4,273		5,625		4,592
Revolving charge accounts		781		814		641
Operating loans		490		501		429
Wholesale receivables		3,188		2,996		725
Financing leases		462		480		445
Equipment on operating leases		1,276		1,485		1,489
Total	$	10,470	$	11,901	$	8,321

Receivables and Leases administered by the Company were as follows (in millions of dollars):

		April 30,		October 31,		April 30,
		2002		2001		2001
Receivables and Leases administered:
Owned by the Company	$	10,470	$	11,901	$	8,321
Sold and serviced - with limited recourse*		2,967		1,371		1,865
Sold and serviced - without recourse**		61		71		85
Serviced - without recourse***				10		15
Total Receivables and Leases administered	$	13,498	$	13,353	$	10,286

Receivables and Leases administered were higher at April 20, 2002 and October 31, 2001 compared to April 30, 2001, primarily due to the purchase of trade receivables from John Deere beginning in October 2001, as previously mentioned.
*	The Company's maximum exposure under all recourse provisions on its Receivables and Leases at April 30, 2002, October 31, 2001 and April 30, 2001 was $283 million, $166 million and $188 million, respectively. In addition, the Company has guaranteed letters of credit on behalf of John Deere Credit Inc., the John Deere finance subsidiary in Canada, as part of two retail note sales. At April 30, 2002, October 31, 2001 and April 30, 2001, the exposure under these agreements was approximately $7 million, $9 million and $11 million, respectively.
**	These Receivables and Leases represent recreational product retail notes, which the Company has sold but continues to administer for a fee until the servicing rights are assumed by their owners.
***	On February 1, 1999, the Company began servicing a receivable portfolio on behalf of Farming and Agricultural Financing Limited, an unaffiliated entity. These servicing rights were obtained in conjunction with the Company's acquisition of John Deere Credit Limited (United Kingdom). This receivable portfolio was sold during the first quarter of 2002.

Page 9

Total Receivable and Lease amounts 60 days or more past due, by product and as a percent of total balances held, were as follows (in millions of dollars):

	April 30,				October 31,					April 30,
	2002				2001					2001
		Dollars	Percent				Dollars	Percent				Dollars	Percent
Retail notes:
Agricultural equipment	$	10.3	.43	%		$	13.3	.37	%		$	10.9	.38	%
Construction and forestry equipment		3.8	.34				4.9	.38				5.1	.47
Commercial and consumer equipment		1.3	.20				1.4	.23				1.0	.20
Recreational products		.1	.11				.3	.27				.1	.08
Total retail notes		15.5	.36				19.9	.35				17.1	.37
Revolving charge accounts		16.1	2.06				9.5	1.17				12.2	1.90
Operating loans		16.0	3.26				.1	.02				2.6	.61
Wholesale receivables		17.2	.54				9.9	.33				8.7	1.20
Leases		12.3	.71				7.7	.39				10.0	.52
Total Receivables and Leases	$	77.1	.74	%		$	47.1	.40	%		$	50.6	.61	%

The balance of retail notes held (principal plus accrued interest) with any installment 60 days or more past due was $69 million, $100 million and $81 million at April 30, 2002, October 31, 2001 and April 30, 2001, respectively. The balance of retail notes held on which any installment is 60 days or more past due as a percent of retail notes held represented 1.61, 1.78 and 1.76 percent of the ending retail notes receivable at April 30, 2002, October 31, 2001 and April 30, 2001, respectively. Amounts of operating loans 60 days or more past due have increased primarily due to the previously mentioned international trade finance customers, Allied Deals, Inc. and one of its affiliates.

Total Receivable and Lease write-off amounts, by product, and as an annualized percentage of average balances held during the year, were as follows (in millions of dollars):

			Three Months Ended April 30, 2002					Three Months Ended April 30, 2001
			Dollars		Percent			Dollars		Percent
Retail notes:
	Agricultural equipment		$	1.3	.09		%	$	2.3	.17	%
	Construction and forestry equipment			2.3	.46				3.4	.65
	Commercial and consumer equipment			.2	.06				.1	.04
	Recreational products			(.1	)	(.15	)		.5	.79
		Total retail notes		3.7		.17			6.3	.29
Revolving charge accounts				4.5		1.11			3.7	1.08
Operating loans				.8		.46			.7	.47
Wholesale receivables				2.2		.14			2.6	.49
Leases				0.2		0.3			2.3	.24
	Total Receivables and Leases		$	11.4		.22	%	$	15.6	.38	%

Page 10

			Six Months Ended April 30, 2002						Six Months Ended April 30, 2001
			Dollars		Percent				Dollars		Percent
Retail notes:
	Agricultural equipment		$	3.1		.23		%	$	3.9	.28	%
	Construction and forestry equipment			6.2		1.24				6.2	1.20
	Commercial and consumer equipment			.4		.13				.2	.09
	Recreational products			1.5			2.97			1.0	1.73
		Total retail notes		11.2			.51			11.3	.52
Revolving charge accounts				7.7			1.91			6.1	1.73
Operating loans				1.0			.57			.8	.51
Wholesale receivables				2.3			.14			3.0	.57
Leases				5.4			.60			4.2	.45
	Total Receivables and Leases		$	27.6			.52	%	$	25.4	.61	%

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 $131 million at April 30, 2002, compared with $134 million at October 31, 2001 and $131 million at April 30, 2001.

The Company's allowance for credit losses on all Receivables and Leases held totaled $158 million at April 30, 2002, $110 million at October 31, 2001 and $91 million at April 30, 2001. The allowance for credit losses represented 1.5 percent of the total Receivables and Leases held at April 30, 2002, 0.9 percent at October 31, 2001 and 1.1 percent at April 30, 2001. The increase in the allowance at April 30, 2002 was primarily due to the previously mentioned international trade finance receivables for which a loan-loss has been accrued. The allowance is subject to an ongoing evaluation based on loss experience. The Company believes the allowance is sufficient to provide for losses in its existing Receivable and Lease portfolio.

The Company's other receivables totaled $139 million at April 30, 2002, $78 million at October 31, 2001, and $97 million at April 30, 2001. The increase was primarily the result of additional retained interests related to retail note sales during the first six months of 2002.

FASB Statements to be Adopted

In June 2001, the FASB issued Statement No. 142, Goodwill and Other Intangible Assets, which requires that goodwill related to acquisitions after June 30, 2001 not be amortized and only written down for impairments. Upon adoption of Statement No. 142, the same accounting requirements will apply to goodwill related to acquisitions prior to June 30, 2001. The Company will adopt this Statement in the first quarter of 2003. In the first six months of 2002, the Company did not have goodwill or goodwill amortization. This Statement will not have an effect on the Company's financial position or net income.

Safe Harbor Statement

Statements under "Financial Instrument Risk Information" and other statements herein that relate to future operating periods are subject to important risks and uncertainties that could cause actual results to differ materially. Interest rate changes by the Federal Reserve Board may affect the cost of financing the Company and the rates it is able to offer. In addition, the Company's business is closely related to John Deere's business. Further information, including factors that potentially could materially affect the Company's and John Deere's financial results, is included in the most recent Deere & Company Form 10-Q and other Deere & Company and Capital Corporation filings with the Securities and Exchange Commission.

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Accounting Policies

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States, management must make a variety of decisions that impact the reported amounts and the related disclosures. These decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching these decisions, management applies judgment based on its understanding and analysis of the relevant circumstances. Note 1 to the consolidated financial statements in the annual report on Form 10-K provides a summary of the significant accounting policies followed in the preparation of the financial statements; other footnotes describe various elements of the financial statements and the assumptions on which specific amounts were determined. While actual results could, in fact, differ from those estimated at the time of preparation of the financial statements, management is committed to prepari ng financial statements that incorporate accounting principles, assumptions and estimates that promote the representational faithfulness, verifiability, neutrality and transparency of the accounting information included in the financial statements.

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 source of funds for this purpose is a combination of borrowings and equity capital. Additionally, the Company periodically sells substantial amounts of retail notes in the public market and in private sales. 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. 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 these assets.

The Company's business is somewhat seasonal, with overall acquisition volumes 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 six months of the fiscal year.

During the first six months of 2002, the aggregate net cash provided by operating and investing activities was used primarily to decrease borrowings. Net cash provided by operating activities was $223 million in the first six months of 2002. Cash provided by investing activities totaled $1,163 million in the first six months of 2002, primarily due to the collections of Receivables and Leases and proceeds from sales of Receivables and Leases exceeding the cost of Receivables and Leases acquired. Cash used for financing activities totaled $1,425 million in the first six months of 2002, resulting from a decrease in borrowings and dividends paid to John Deere Credit Company, which in turn declared and paid comparable dividends to Deere & Company. Cash and cash equivalents decreased $40 million during the first six months of 2002.

During the first six months of 2001, the aggregate net cash provided by operating and investing activities was used primarily to decrease borrowings from Deere & Company. Cash provided by operating activities was $273 million in the first six months of 2001. Cash provided by investing activities totaled $113 million in the first six months of 2001 primarily due to the collections of Receivables and Leases and proceeds from sales of Receivables and Leases exceeding the cost of Receivables and Leases acquired. Cash used for financing activities totaled $252 million in the first six months of 2001, resulting primarily from a decrease in total borrowings, including a reduction in amounts payable to John Deere. Cash and cash equivalents increased $134 million during the first six months of 2001.

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Total interest-bearing indebtedness amounted to $9,108 million at April 30, 2002, compared with $10,383 million at October 31, 2001 and $7,103 million at April 30, 2001, generally corresponding with the level of Receivables and Leases financed and the level of cash and cash equivalents. Total short-term indebtedness amounted to $4,307 million at April 30, 2002, compared with $6,524 million at October 31, 2001 and $3,399 million at April 30, 2001, while total long-term indebtedness amounted to $4,801 million, $3,859 million and $3,704 million at these dates, respectively. The ratio of total interest-bearing debt to stockholder's equity was 4.9 to 1, 5.4 to 1 and 6.2 to 1 at April 30, 2002, October 31, 2001 and April 30, 2001, respectively.

During the first six months of 2002, the Company issued $1,500 million of 7.0% global notes due in 2012. The Company also entered into interest rate swaps related to these notes which swapped the fixed rate of 7.0% to a variable rate of approximately 3.0% at April 30, 2002. Additionally, the Company issued $714 million and retired $1,298 million of other long-term debt.

Sources of liquidity for the Company include cash and short-term investments, funds from operations, the issuance of commercial paper and term debt, the securitization and sale of retail notes, and committed, unsecured bank lines of credit.

To access public debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings to the Company's securities as an indicator of credit quality for fixed income investors. A credit rating agency may change Company ratings based on its assessment of the Company's current and future ability to meet interest and principal repayment obligations. Such rating changes generally impact the availability and cost of funds.

The short-term and long-term debt ratings assigned to Company securities by Moody's Investors Service, Inc., Standard & Poor's and Fitch Ratings are investment grade ratings. On May 28, 2002, Standard & Poor's lowered the long-term rating of the Company to "A-" from "A", and the short-term rating to "A-2" from "A-1". At the same time, Standard & Poor's removed the ratings from CreditWatch, where they had been placed on March 11, 2002 and assigned a stable outlook. On May 24, 2002, Fitch Ratings affirmed the Company's "A" senior long-term and "F1" short-term ratings while maintaining a negative rating outlook. On February 15, 2002, Moody's Investors Service lowered the long-term rating of the Company to "A3" from "A2", and the short-term rating to "Prime-2" from "Prime-1". Moody's assigned a stable outlook as part of this rating action. Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. On each of these dates, the relevant rating agency took similar action with respect to Deere & Company's ratings.

The Company expects to have sufficient sources of liquidity to meet its funding needs. The Company's worldwide commercial paper outstanding at April 30, 2002, October 31 2001 and April 30, 2001 was approximately $1.3 billion, $2.4 billion and $1.1 billion, respectively, while the total cash and short-term investment position was $.5 billion, $.5 billion and $.3 billion, respectively. Additionally, the Company had access to approximately $2.1 billion, $.5 billion and $.2 billion, respectively, of cash and short-term investments held by its parent, Deere & Company (if Deere & Company would have chosen to make these funds available to the Company). In addition, the Company has for many years accessed diverse funding sources, including short-term and long-term unsecured debt capital markets in the United States, Europe and Australia, as well as public and private securitization markets in the United States. In order to further enhance its liquidity profile, the Company has decreased it s commercial paper balances and increased its use of long-term debt since October 2001. Because of the multiple funding sources that have been and continue to be available to the Company, the lowering of the Company's credit ratings has not had, and is not expected to have, a material impact on its ability to fund its operations and maintain its liquidity.

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The financing of retail purchases and leases of John Deere products and of trade receivables owed by John Deere dealers represents a substantial majority of the Company's business. Any extended reduction or suspension of John Deere's sale or production of products due to a decline in demand or production, technological difficulties, governmental actions or other events could have an adverse effect on the Company's acquisition volume of Receivables and Leases. For additional information on the Company's dependence on and relationships with Deere & Company, see the Company's most recently filed annual report on Form 10-K.
At April 30, 2002, the Capital Corporation and Deere & Company jointly maintained $4,055 million of unsecured lines of credit with various banks in North America and overseas, $1,947 million of which were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding the current portion of long-term borrowings of the Capital Corporation and Deere & Company, were considered to constitute utilization. These agreements include a$2,150 million long-term bank credit agreement expiring on February 20, 2006. The facility fees payable under these credit agreements are divided between Deere & Company and the Capital Corporation based on the proportion of their respective commercial paper outstanding.
Stockholder's equity was $1,848 million at April 30, 2002, compared with $1,907 million at October 31, 2001 and $1,154 million at April 30, 2001. The decrease of $59 million in the first six months of 2002 resulted primarily from dividend payments of $200 million, offset by net income of $115 million and a decrease in the unrealized loss on derivatives of $26 million.
The Capital Corporation declared and paid cash dividends of $200 million to John Deere Credit Company during the first six months of fiscal 2002. John Deere Credit Company paid comparable dividends to Deere & Company. On May 30, 2002, the Capital Corporation also declared a $140 million dividend, to be paid to John Deere Credit Company on June 7, 2002. John Deere Credit Company, in turn, declared a $140 million dividend to Deere & Company, also payable on June 7, 2002.
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.
See the information under "Management's Discussion and Analysis" on pages 8 to 14 and under "Supplemental Information (Unaudited)" on pages 40 to 42 in the Company's most recent annual report filed on Form 10-K. There has been no material change in this information.

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PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings.
	The Company is party to various unresolved legal actions that arise in the normal course of its business, including but not limited to actions which involve: laws and regulations concerning the granting of retail and wholesale credit and related collection activity; security interests in goods or real estate granted to the Company; and enforcement of other obligations related to the Company's financing businesses. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes these unresolved legal actions will not have a material effect on its financial position or results of operations.
Item 2.	Changes in Securities and Use of Proceeds.
	Omitted pursuant to instruction H(2).
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 February 12, 2002 (Items 5 and 7).

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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:	July 8, 2002	By:	/s/ Nathan J. Jones
			Nathan J. Jones Senior Vice President and Principal Financial Officer

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INDEX TO EXHIBITS

Exhibit		Page No.
12.	Computation of ratio of earnings to fixed charges.	18
99.	Part I of Deere & Company Form 10-Q for the quarter ended April 30, 2002 (Securities and Exchange Commission file number 1-4121*).	----

* Incorporated by reference. Copies of these exhibits are available from the Company upon request.

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John Deere Capital Corporation and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

(thousands of dollars)

			Six Months Ended April 30,					For the Years Ended October 31,
			2002		2001			2001		2000		1999		1998		1997
Earnings:
	Income before income taxes and    changes in accounting		$	184,354		$	124,298	$	245,662	$	216,712	$	235,760	$	233,514	$	211,251
	Fixed charges		188,374			246,793		459,348		447,169		366,102		373,237		330,648
		Total earnings	$	372,728		$	371,091	$	705,010	$	663,881	$	601,862	$	606,771	$	541,899
Fixed charges:
	Interest expense		$	185,987		$	243,183	$	452,032	$	440,220	$	360,925	$	368,381	$	326,867
	Rent Expense		2,387			3,610		7,316		6,949		5,177		4,856		3,782
		Total fixed charges	$	188,374		$	246,793	$	459,348	$	447,169	$	366,102	$	373,237	$	330,649
Ratio of earnings to fixed charges*			1.98			1.50		1.53		1.48		1.64		1.63		1.64

"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.

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