Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Oct. 29, 2017 | Nov. 26, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | DEERE JOHN CAPITAL CORP | |
Entity Central Index Key | 27,673 | |
Document Type | 10-K | |
Document Period End Date | Oct. 29, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-29 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 2,500 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY |
Statement of Consolidated Incom
Statement of Consolidated Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Revenues | |||
Finance income earned on retail notes | $ 693.6 | $ 695 | $ 723 |
Revolving charge account income | 297.2 | 260.7 | 241.4 |
Finance income earned on wholesale receivables | 363.8 | 354.5 | 376.2 |
Lease revenues | 812.9 | 740.2 | 578.7 |
Other income - net | 59.5 | 43.8 | 32.4 |
Total revenues | 2,227 | 2,094.2 | 1,951.7 |
Expenses | |||
Interest expense | 521.1 | 422.1 | 311.9 |
Operating expenses: | |||
Administrative and operating expenses | 422.5 | 466.9 | 374.7 |
Fees paid to John Deere | 66.3 | 51.7 | 50 |
Provision for credit losses | 70.3 | 68.8 | 32.3 |
Depreciation of equipment on operating leases | 648 | 564.5 | 415.9 |
Total operating expenses | 1,207.1 | 1,151.9 | 872.9 |
Total expenses | 1,728.2 | 1,574 | 1,184.8 |
Income of consolidated group before income taxes | 498.8 | 520.2 | 766.9 |
Provision for income taxes | 171.5 | 180.3 | 269.9 |
Income of consolidated group | 327.3 | 339.9 | 497 |
Equity in income of unconsolidated affiliate | 1.2 | 1.6 | 1.2 |
Net income | 328.5 | 341.5 | 498.2 |
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | (0.1) | |
Net income attributable to the Company | $ 328.4 | $ 341.6 | $ 498.2 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Statement of Consolidated Comprehensive Income | |||
Net income | $ 328.5 | $ 341.5 | $ 498.2 |
Other comprehensive income (loss), net of income taxes | |||
Cumulative translation adjustment | 24.1 | (23.7) | (66.4) |
Unrealized gain (loss) on derivatives | 3.9 | 3 | (2.1) |
Other comprehensive income (loss), net of income taxes | 28 | (20.7) | (68.5) |
Comprehensive income of consolidated group | 356.5 | 320.8 | 429.7 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | (0.1) | |
Comprehensive income attributable to the Company | $ 356.4 | $ 320.9 | $ 429.7 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Assets | ||
Cash and cash equivalents | $ 1,055.5 | $ 1,089.6 |
Receivables: | ||
Total receivables | 28,395.7 | 27,714.5 |
Allowance for credit losses | (113.8) | (111.7) |
Total receivables - net | 28,281.9 | 27,602.8 |
Other receivables | 89.1 | 74.6 |
Receivables from John Deere | 91 | 252 |
Equipment on operating leases - net | 4,718.3 | 4,396.2 |
Notes receivable from John Deere | 156.7 | |
Investment in unconsolidated affiliate | 13.8 | 11.9 |
Deferred income taxes | 41 | 28.1 |
Other assets | 555.5 | 574.1 |
Total Assets | 35,002.8 | 34,029.3 |
Short-term borrowings: | ||
Commercial paper and other notes payable | 2,051.2 | 386.4 |
Securitization borrowings | 4,118.7 | 4,997.8 |
John Deere | 553.2 | 2,270.3 |
Current maturities of long-term borrowings | 5,056.9 | 4,509.3 |
Total short-term borrowings | 11,780 | 12,163.8 |
Other payables to John Deere | 126.5 | 24 |
Accounts payable and accrued expenses | 902.1 | 799.6 |
Deposits withheld from dealers and merchants | 181 | 205.9 |
Deferred income taxes | 821.6 | 713.8 |
Long-term borrowings | 17,534.4 | 16,536.5 |
Total liabilities | 31,345.6 | 30,443.6 |
Commitments and contingencies (Note 19) | ||
Stockholder's equity: | ||
Common stock, without par value (issued and outstanding - 2,500 shares owned by John Deere Financial Services, Inc.) | 1,482.8 | 1,482.8 |
Retained earnings | 2,229.7 | 2,186.3 |
Accumulated other comprehensive income (loss) | (55.8) | (83.8) |
Total Company stockholder's equity | 3,656.7 | 3,585.3 |
Noncontrolling interests | 0.5 | 0.4 |
Total stockholder's equity | 3,657.2 | 3,585.7 |
Total Liabilities and Stockholder's Equity | 35,002.8 | 34,029.3 |
Retail notes | ||
Receivables: | ||
Total receivables | 17,214.6 | 17,468.2 |
Allowance for credit losses | (55.7) | (56.3) |
Retail notes | Unrestricted | ||
Receivables: | ||
Total receivables | 13,042.3 | 12,327 |
Retail notes | Securitized | ||
Receivables: | ||
Total receivables | 4,172.3 | 5,141.2 |
Revolving charge accounts | ||
Receivables: | ||
Total receivables | 3,572.6 | 3,078.5 |
Allowance for credit losses | (39.7) | (39.7) |
Wholesale receivables | ||
Receivables: | ||
Total receivables | 6,894.3 | 6,562.5 |
Allowance for credit losses | (9.9) | (7.2) |
Financing leases | ||
Receivables: | ||
Total receivables | $ 714.2 | $ 605.3 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Oct. 29, 2017 | Oct. 30, 2016 |
Consolidated Balance Sheet | ||
Common stock, issued shares | 2,500 | 2,500 |
Common stock, outstanding shares | 2,500 | 2,500 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Cash Flows from Operating Activities: | |||
Net income | $ 328.5 | $ 341.5 | $ 498.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 70.3 | 68.8 | 32.3 |
Provision for depreciation and amortization | 670 | 577.7 | 427.1 |
Provision for deferred income taxes | 92.8 | 277.8 | 125.3 |
Impairment charges | 59.7 | 19.4 | |
Undistributed earnings of unconsolidated affiliate | (1.1) | (1.5) | (1) |
Change in accounts payable and accrued expenses | 58.6 | 13.2 | 82 |
Change in accrued income taxes payable/receivable | 33.2 | (13.1) | 5.9 |
Other | 156.4 | 162.1 | 90.5 |
Net cash provided by operating activities | 1,408.7 | 1,486.2 | 1,279.7 |
Cash Flows from Investing Activities: | |||
Cost of receivables acquired (excluding wholesale) | (14,644.7) | (13,523.7) | (14,287.7) |
Collections of receivables (excluding wholesale) | 14,176.8 | 14,220.1 | 14,604.7 |
Decrease (increase) in wholesale receivables - net | (273) | 591.2 | 497.3 |
Cost of equipment on operating leases acquired | (2,099.4) | (2,497.9) | (2,293.9) |
Proceeds from sales of equipment on operating leases | 1,073.7 | 900.7 | 737.1 |
Cost of notes receivable with John Deere | (160.3) | ||
Collections of notes receivable with John Deere | 8.1 | ||
Change in restricted cash | 18 | (10) | (7) |
Other | (41.2) | 28.6 | (36.3) |
Net cash used for investing activities | (1,942) | (291) | (785.8) |
Cash Flows from Financing Activities: | |||
Increase (decrease) in commercial paper and other notes payable - net | 1,663.5 | (1,979.7) | 379 |
Increase (decrease) in securitization borrowings - net | (879.6) | 412.3 | 31.4 |
Increase (decrease) in payable to John Deere - net | (1,727.7) | 1,161.8 | (870.7) |
Proceeds from issuance of long-term borrowings | 6,264 | 4,096.8 | 4,478.8 |
Payments of long-term borrowings | (4,508.8) | (4,451.7) | (3,889.2) |
Dividends paid | (285) | (485) | (485) |
Capital investment from John Deere | 0.1 | ||
Debt issuance costs | (30.5) | (26) | (23.6) |
Net cash provided by (used for) financing activities | 495.9 | (1,271.4) | (379.3) |
Effect of exchange rate changes on cash and cash equivalents | 3.3 | 2.1 | (10.3) |
Net increase (decrease) in cash and cash equivalents | (34.1) | (74.1) | 104.3 |
Cash and cash equivalents at the beginning of year | 1,089.6 | 1,163.7 | 1,059.4 |
Cash and cash equivalents at the end of year | $ 1,055.5 | $ 1,089.6 | $ 1,163.7 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Stockholder's Equity - USD ($) $ in Millions | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total |
Balance at Nov. 02, 2014 | $ 1,482.8 | $ 2,316.5 | $ 5.4 | $ 0.4 | $ 3,805.1 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 498.2 | 498.2 | |||
Other comprehensive income (loss) | (68.5) | (68.5) | |||
Dividends declared | (485) | (485) | |||
Balance at Nov. 01, 2015 | 1,482.8 | 2,329.7 | (63.1) | 0.4 | 3,749.8 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 341.6 | (0.1) | 341.5 | ||
Other comprehensive income (loss) | (20.7) | (20.7) | |||
Dividends declared | (485) | (485) | |||
Capital investment | 0.1 | 0.1 | |||
Balance at Oct. 30, 2016 | 1,482.8 | 2,186.3 | (83.8) | 0.4 | 3,585.7 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 328.4 | 0.1 | 328.5 | ||
Other comprehensive income (loss) | 28 | 28 | |||
Dividends declared | (285) | (285) | |||
Balance at Oct. 29, 2017 | $ 1,482.8 | $ 2,229.7 | $ (55.8) | $ 0.5 | $ 3,657.2 |
Organization and Consolidation
Organization and Consolidation | 12 Months Ended |
Oct. 29, 2017 | |
Organization and Consolidation | |
Organization and Consolidation | John Deere Capital Corporation and Subsidiaries Notes to Consolidated Financial Statements Note 1. Organization and Consolidation Corporate Organization John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company conducts business in Australia, New Zealand, the U.S., and in several countries in Africa, Asia, Europe and Latin America. Deere & Company and its wholly-owned subsidiaries are collectively called John Deere. Retail notes, revolving charge accounts, wholesale receivables, and financing leases are collectively called “Receivables.” Receivables and equipment on operating leases are collectively called “Receivables and Leases.” The Company bears substantially all of the credit risk (net of recovery from withholdings from certain John Deere dealers and merchants) associated with its holding of Receivables and Leases. A small portion of the Receivables and Leases held (less than 5 percent) is guaranteed by certain subsidiaries of Deere & Company. The Company also performs substantially all servicing and collection functions. Servicing and collection functions for a small portion of the Receivables and Leases held (less than 5 percent) are provided by John Deere. John Deere is reimbursed for staff and other administrative services at estimated cost, and for credit lines provided to the Company based on utilization of those lines. Principles of Consolidation The consolidated financial statements include the financial statements of Capital Corporation and its subsidiaries. The consolidated financial statements represent primarily the consolidation of all companies in which Capital Corporation has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 25). Fiscal Year The Company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2017, 2016, and 2015 were October 29, 2017, October 30, 2016, and November 1, 2015, respectively. All fiscal years contained 52 weeks. Variable Interest Entities The Company is the primary beneficiary of and consolidates certain VIEs that are special purpose entities (SPEs) related to the securitization of receivables. These restricted retail notes are included in the retail notes securitized shown in the table in Note 6. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 29, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The following are significant accounting policies in addition to those included in other Notes to the Consolidated Financial Statements. Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. Revenue Recognition Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight‑line basis over the scheduled lease terms in finance revenue. Securitization of Receivables Certain financing receivables are periodically transferred to SPEs in securitization transactions (see Note 6). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Retail notes securitized.” The Company recognizes finance income over the lives of these retail notes using the interest method. Depreciation Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Fees Paid to John Deere Fees paid to John Deere include corporate support fees and interest on intercompany borrowings from John Deere based on approximate market rates. Derivative Financial Instruments It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge, a fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income to the extent the hedge was effective by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All ineffective changes in derivative fair values are recognized currently in net income. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk‑management strategy. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, the hedge accounting discussed above is discontinued (see Note 22). Foreign Currency Translation The functional currencies for most of the Company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net losses for foreign exchange in 2017, 2016, and 2015 were $8.1 million, $13.9 million and $19.7 million, respectively. |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Oct. 29, 2017 | |
New Accounting Standards | |
New Accounting Standards | Note 3. New Accounting Standards New Accounting Standards Adopted In the first quarter of 2017, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which amends Accounting Standards Codification (ASC) 835-30, Interest – Imputation of Interest. This ASU requires that debt issuance costs related to borrowings be presented in the balance sheet as a direct deduction from the carrying amount of the borrowing. As required, the presentation and disclosure requirements were adopted through retrospective application with the consolidated balance sheet and related notes in prior periods adjusted for a consistent presentation. Debt issuance costs of $38.5 million at October 30, 2016 were reclassified from other assets to borrowings in the consolidated balance sheet. In the third quarter of 2017, the Company early adopted ASU No. 2016-09, Improvements to Employee Share‑Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU changes the treatment of share based payment transactions by recognizing the impact of excess tax benefits or deficiencies related to exercised or vested awards in income tax expense in the period of exercise or vesting, instead of common stock. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company also adopted the following standards in the first quarter of 2017, none of which had a material effect on the Company’s consolidated financial statements: Accounting Standards Update 2014-12 Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which amends ASC 718, Compensation–Stock Compensation 2015-05 Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350‑40, Intangibles–Goodwill and Other–Internal-Use Software 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest–Imputation of Interest New Accounting Standards to be Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue. In August 2015, the FASB amended the effective date to be the first quarter of fiscal year 2019 with early adoption permitted in the first quarter of fiscal year 2018. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The Company plans to adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The Company’s evaluation of the ASU is largely complete. At this point of the evaluation, the Company has not identified an item that will have a material effect on the Company’s consolidated financial statements. The Company continues to evaluate the ASU’s potential effects on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments – Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in other comprehensive income. The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASU’s primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lessee’s recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. Lessees and lessors will use a modified retrospective transition approach. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments – Equity Method and Joint Ventures. This ASU eliminates the requirement to retroactively restate the investment, results of operations, and retained earnings on a step by step basis when an investment qualifies for use of the equity method as a result of an increase in ownership or degree of influence. The effective date will be the first quarter of fiscal year 2018, with early adoption permitted, and will be adopted prospectively. The adoption will not have a material effect on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments – Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends ASC 715, Compensation – Retirement Benefits. This ASU requires that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of income from operations. In addition, only the service cost component of the benefit costs is eligible for capitalization. The ASU will be adopted on a retrospective basis for the presentation of the benefit costs and on a prospective basis for the capitalization of only the service cost. The effective date is fiscal year 2019, with early adoption permitted. The Company will adopt the ASU in the first quarter of fiscal year 2018. If adopted in fiscal year 2017, operating profit would have decreased by approximately $7.5 million. The adoption is estimated to decrease operating profit in fiscal year 2018 by approximately $7.9 million. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year 2019, with early adoption permitted. The adoption will not have a material effect on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. |
Receivables
Receivables | 12 Months Ended |
Oct. 29, 2017 | |
Receivables | |
Receivables | Note 4. Receivables Retail Notes Receivable The Company provides and administers financing for retail purchases of new equipment manufactured by John Deere’s agriculture and turf and construction and forestry operations and used equipment taken in trade for this equipment. The Company generally purchases retail installment sales and loan contracts (retail notes) from John Deere. These retail notes are acquired by John Deere through John Deere dealers. The Company also purchases and finances a limited amount of retail notes unrelated to John Deere. Retail notes receivable by product category at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Unrestricted Securitized Unrestricted Securitized Agriculture and turf – new $ 7,300.4 $ 1,554.1 $ 6,683.4 $ 1,983.7 Agriculture and turf – used 4,179.0 2,097.4 4,093.1 2,631.1 Construction and forestry – new 1,731.3 521.6 1,669.4 544.3 Construction and forestry – used 319.5 77.0 281.6 75.6 Total 13,530.2 4,250.1 12,727.5 5,234.7 Unearned finance income (487.9) (77.8) (400.5) (93.5) Retail notes receivable $ 13,042.3 $ 4,172.3 $ 12,327.0 $ 5,141.2 Retail notes acquired by the Company during the years ended October 29, 2017, October 30, 2016, and November 1, 2015 had an average original term (based on dollar amounts) of 56 months, 55 months, and 55 months, respectively. Historically, because of prepayments, the average actual life of retail notes has been considerably shorter than the average original term. The average actual life for retail notes liquidated in 2017, 2016, and 2015 was 40 months, 37 months, and 33 months, respectively. Gross retail note installments at October 29, 2017 and October 30, 2016 were scheduled to be received as follows (in millions of dollars): 2017 2016 Unrestricted Securitized Unrestricted Securitized Due in: 0-12 months $ 4,424.7 $ 2,027.6 $ 4,224.6 $ 2,268.6 13-24 months 3,405.6 1,256.1 3,258.3 1,535.5 25-36 months 2,651.4 671.8 2,503.7 931.3 37-48 months 1,819.5 242.8 1,665.0 407.8 49-60 months 992.5 50.2 869.4 84.2 Over 60 months 236.5 1.6 206.5 7.3 Total $ 13,530.2 $ 4,250.1 $ 12,727.5 $ 5,234.7 Company guidelines relating to down payment requirements and contract terms on retail notes are generally as follows: Down Contract Payment Terms Agriculture and turf (new and used): Seasonal payments 10% - 30% 3 - 7 years Monthly payments 10% - 20% 36 - 84 months Construction and forestry: New 10% 48 - 60 months Used 15% 36 - 48 months Finance income is recognized over the lives of the retail notes using the interest method. During 2017, the average effective yield on retail notes held by the Company was approximately 4.1 percent, compared with 3.9 percent in 2016 and 2015. Finance income on variable-rate retail notes is adjusted monthly based on fluctuations in the base rate of a specified bank. Net costs incurred in the acquisition of retail notes are deferred and recognized over the expected lives of the retail notes using the interest method. A portion of the finance income earned by the Company arises from financing of retail sales of John Deere equipment on which finance charges are waived or reduced by John Deere for a period from the date of the retail sale to a specified subsequent date. The Company receives compensation from John Deere equal to competitive market interest rates for periods during which finance charges have been waived or reduced. The Company computes the compensation from John Deere for waived or reduced finance charges based on the Company’s estimated funding costs, administrative and operating expenses, credit losses, and required return on equity. The financing rate following the waiver or interest reduction period is not significantly different from the compensation rate from John Deere. The portions of the Company’s finance income earned that were received from John Deere on retail notes containing waiver of finance charges or reduced rates were 34 percent, 30 percent, and 26 percent in 2017, 2016, and 2015, respectively. During 2017, 2016, and 2015, the A deposit is withheld by the Company on certain John Deere agriculture and turf equipment retail notes originating from dealers. Any subsequent retail note losses are charged against the withheld deposits. At the end of each calendar quarter, the balance of each dealer’s withholding account in excess of a specified percent (ranging from one-half to three percent based on dealer qualifications) of the total balance outstanding on retail notes originating with that dealer is remitted to the dealer. To the extent that these deposits withheld from the dealer from whom the retail note was acquired cannot absorb a loss on a retail note, it is charged against the Company’s allowance for credit losses. There is generally no withholding of dealer deposits on John Deere construction and forestry equipment retail notes. The Company generally requires that theft and physical damage insurance be carried on all goods leased or securing retail notes and wholesale receivables. The customer may, at the customer’s own expense, have the Company or the seller of the goods purchase this insurance or obtain it from other sources. Revolving Charge Accounts Receivable Revolving charge account income is generated primarily by three revolving credit products: John Deere Financial multi-use, PowerPlan â , and the John Deere Financial Revolving Plan. John Deere Financial multi-use is primarily used by farmers and ranchers to finance day-to-day operating expenses, such as parts and services. Merchants, including agribusinesses and dealers, offer John Deere Financial multi-use as an alternative to carrying in-house accounts receivable and can initially sell existing balances to the Company under a recourse arrangement. John Deere Financial multi-use income includes a discount paid by merchants for transaction processing and support and finance charges paid by customers on their outstanding account balances. PowerPlan â is primarily used by construction companies to finance day‑to-day operating expenses, such as parts and services, and is otherwise similar to John Deere Financial multi-use. John Deere construction and forestry dealers offer PowerPlan â as an alternative to carrying in-house accounts receivable and can initially sell existing balances to the Company under a recourse arrangement. PowerPlan â income includes a discount paid by dealers for transaction processing and support and finance charges paid by customers on their outstanding account balances. The John Deere Financial Revolving Plan is used primarily by retail customers of John Deere dealers to finance turf and utility equipment. Income includes a discount paid by dealers on most transactions and finance charges paid by customers on their outstanding account balances. Revolving charge account income is also generated through waiver of finance charges or reduced rates from sponsoring merchants. During 2017, 2016, and 2015, the finance income earned from John Deere on revolving charge accounts containing waiver of finance charges or reduced rates was $13.6 million, $11.3 million, and $11.4 million, respectively. Revolving charge accounts receivable at October 29, 2017 and October 30, 2016 totaled $3,572.6 million and $3,078.5 million, respectively. Generally, account holders may pay the account balance in full at any time or make payments over a number of months according to a payment schedule. Wholesale Receivables The Company also finances wholesale inventories of John Deere agriculture and turf equipment and construction and forestry equipment owned by dealers of those products in the form of wholesale receivables. Wholesale finance income related to these notes is generally recognized monthly based on the daily balance of wholesale receivables outstanding and the applicable effective interest rate. Interest rates vary with a bank base rate, the type of equipment financed, and the balance outstanding. Substantially all wholesale receivables are secured by equipment financed or other financial securities. The average actual life for wholesale receivables is less than 12 months. Wholesale receivables at October 29, 2017 and October 30, 2016 totaled $6,894.3 million and $6,562.5 million, respectively. The Company purchases certain wholesale trade receivables from John Deere. These trade receivables arise from John Deere’s sales of goods to independent dealers. Under the terms of the sales to dealers, interest is primarily 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 at the time of the sale to the dealer, until payment is received by the Company. Dealers cannot cancel purchases after the equipment is shipped and are responsible for payment even if the equipment is not sold to retail customers. The interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one to twelve months for most equipment. Interest-free periods may not be extended. Interest charged may not be forgiven and the past due interest rates exceed market rates. The Company receives compensation from John Deere at approximate market interest rates for these interest-free periods. The Company computes the compensation from John Deere for interest-free periods based on the Company’s estimated funding costs, administrative and operating expenses, credit losses, and required return on equity. During 2017, 2016, and 2015, the compensation earned from John Deere on wholesale receivables for waiver of finance charges or reduced rates was $225.5 million, $209.7 million, and $196.9 million, respectively. Financing Leases The Company leases agriculture and turf equipment and construction and forestry equipment directly to retail customers. At the time of accepting a lease that qualifies as a financing lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is equal to the excess of the gross lease receivable plus the estimated residual value over the cost of the equipment. The unearned finance income is recognized as revenue over the lease term using the interest method. Net costs incurred in the acquisition of financing leases are deferred and recognized over the expected lives of the financing leases using the interest method. Financing leases receivable by product category at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Agriculture and turf $ 408.4 $ 351.2 Construction and forestry 151.7 173.3 Total 560.1 524.5 Estimated residual values 222.3 136.2 Unearned finance income (68.2) (55.4) Financing leases receivable $ 714.2 $ 605.3 Initial lease terms for financing leases generally range from 4 months to 60 months. Payments on financing leases receivable at October 29, 2017 and October 30, 2016 were scheduled as follows (in millions of dollars): 2017 2016 Due in: 0-12 months $ 216.0 $ 208.4 13-24 months 147.5 147.6 25-36 months 106.8 88.9 37-48 months 59.4 52.2 Over 48 months 30.4 27.4 Total $ 560.1 $ 524.5 Deposits withheld from John Deere dealers and related losses on financing leases are handled in a manner similar to the procedures for retail notes. As with retail notes, there are generally no deposits withheld from dealers on financing leases related to construction and forestry equipment. In addition, a lease payment discount program, allowing reduced payments over the term of the lease, is administered in a manner similar to finance waiver on retail notes. During 2017, 2016, and 2015, the finance income earned from John Deere on financing leases containing waiver of finance charges or reduced rates was $3.0 million, $2.3 million, and $2.0 million, respectively. Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded at the lower of net book value or estimated fair value of the equipment less cost to sell and is not depreciated. Concentration of Credit Risk Receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry sectors as shown in the previous tables. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral a security interest in the goods associated with those Receivables or with the use of other financial securities. |
Allowance for Credit Losses and
Allowance for Credit Losses and Credit Quality of Receivables | 12 Months Ended |
Oct. 29, 2017 | |
Allowance for Credit Losses and Credit Quality of Receivables | |
Allowance for Credit Losses and Credit Quality of Receivables | Note 5. Allowance for Credit Losses and Credit Quality of Receivables Delinquencies Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. The Company monitors the credit quality of Receivables as either performing or non-performing monthly. Non‑performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes are approximately 120 days delinquent, accrual of finance income is suspended, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended, the collateral should be repossessed or the account should be designated for litigation, and the estimated uncollectible amount written off to the allowance for credit losses. Generally, when a financing lease account becomes 120 days delinquent, the accrual of lease revenue is suspended, the equipment is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is written off to the allowance for credit losses. Finance income for non-performing Receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at October 29, 2017 was as follows (in millions of dollars): 90 Days or 30-59 Days 60-89 Days Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.2 $ 48.3 $ 45.3 $ 199.8 Construction and forestry 73.0 31.9 39.2 144.1 Revolving charge accounts: Agriculture and turf 15.4 5.6 2.3 23.3 Construction and forestry 2.9 1.1 .3 4.3 Wholesale receivables: Agriculture and turf 4.5 1.6 2.4 8.5 Construction and forestry .1 .1 .1 .3 Financing leases: Agriculture and turf 8.9 7.5 3.6 20.0 Construction and forestry .5 1.1 .1 1.7 Total Receivables $ 211.5 $ 97.2 $ 93.3 $ 402.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 199.8 $ 63.1 $ 14,379.9 $ 14,642.8 Construction and forestry 144.1 24.2 2,403.5 2,571.8 Revolving charge accounts: Agriculture and turf 23.3 1.8 3,458.7 3,483.8 Construction and forestry 4.3 84.5 88.8 Wholesale receivables: Agriculture and turf 8.5 10.8 5,469.6 5,488.9 Construction and forestry .3 1,405.1 1,405.4 Financing leases: Agriculture and turf 20.0 6.2 541.3 567.5 Construction and forestry 1.7 1.7 143.3 146.7 Total Receivables $ 402.0 $ 107.8 $ 27,885.9 $ 28,395.7 An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at October 30, 2016 was as follows (in millions of dollars): 90 Days or 30-59 Days 60-89 Days Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.3 $ 51.0 $ 59.6 $ 216.9 Construction and forestry 73.6 32.4 25.1 131.1 Revolving charge accounts: Agriculture and turf 12.9 3.5 2.1 18.5 Construction and forestry 2.4 .7 .4 3.5 Wholesale receivables: Agriculture and turf 5.5 1.3 1.5 8.3 Construction and forestry 1.4 1.4 Financing leases: Agriculture and turf 8.8 4.6 3.6 17.0 Construction and forestry 2.8 1.6 .2 4.6 Total Receivables $ 212.3 $ 95.1 $ 93.9 $ 401.3 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 216.9 $ 90.2 $ 14,658.7 $ 14,965.8 Construction and forestry 131.1 23.7 2,347.6 2,502.4 Revolving charge accounts: Agriculture and turf 18.5 1.3 2,979.2 2,999.0 Construction and forestry 3.5 76.0 79.5 Wholesale receivables: Agriculture and turf 8.3 .3 5,530.7 5,539.3 Construction and forestry 1.4 1,021.8 1,023.2 Financing leases: Agriculture and turf 17.0 6.1 409.0 432.1 Construction and forestry 4.6 2.6 166.0 173.2 Total Receivables $ 401.3 $ 124.2 $ 27,189.0 $ 27,714.5 Allowance for Credit Losses Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions, and credit risk quality. An analysis of the allowance for credit losses and investment in Receivables was as follows (in millions of dollars): Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables 2017 Allowance: Beginning of year balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Provision for credit losses 29.7 32.3 3.0 5.3 70.3 Write-offs (38.2) (52.2) (.2) (5.7) (96.3) Recoveries 7.8 19.9 .3 28.0 Translation adjustments .1 (.1) .1 .1 End of year balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Balance individually evaluated * $ .6 $ 2.6 $ 3.2 Receivables: End of year balance $ 17,214.6 $ 3,572.6 $ 6,894.3 $ 714.2 $ 28,395.7 Balance individually evaluated * $ 41.0 $ 3.1 $ 24.0 $ 4.0 $ 72.1 2016 Allowance: Beginning of year balance $ 53.3 $ 39.7 $ 8.1 $ 8.7 $ 109.8 Provision for credit losses 27.3 35.8 3.1 2.6 68.8 Write-offs (29.9) (54.3) (4.1) (3.0) (91.3) Recoveries 5.8 18.5 .1 .5 24.9 Translation adjustments (.2) (.3) (.5) End of year balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Balance individually evaluated * $ 2.3 $ .2 $ .1 $ 2.6 Receivables: End of year balance $ 17,468.2 $ 3,078.5 $ 6,562.5 $ 605.3 $ 27,714.5 Balance individually evaluated * $ 44.5 $ 8.4 $ .8 $ .6 $ 54.3 2015 Allowance: Beginning of year balance $ 56.1 $ 39.9 $ 7.6 $ 8.8 $ 112.4 Provision for credit losses 9.4 20.7 .6 1.6 32.3 Write-offs (17.8) (36.2) (.3) (1.6) (55.9) Recoveries 6.5 15.3 .6 .2 22.6 Translation adjustments (.9) (.4) (.3) (1.6) End of year balance $ 53.3 $ 39.7 $ 8.1 $ 8.7 $ 109.8 Balance individually evaluated * $ 1.0 $ .2 $ 1.2 Receivables: End of year balance $ 18,659.0 $ 2,680.8 $ 7,185.5 $ 567.1 $ 29,092.4 Balance individually evaluated * $ 20.2 $ .2 $ 10.9 $ .8 $ 32.1 * Remainder is collectively evaluated. Investments in non-performing Receivables at October 29, 2017 and October 30, 2016 were $107.8 million and $124.2 million, respectively. These Receivables as a percentage of total Receivables outstanding were .38 percent and .45 percent at October 29, 2017 and October 30, 2016, respectively. Total Receivable amounts 30 days or more past due and still accruing finance income were $402.0 million at October 29, 2017, compared with $401.3 million at October 30, 2016. These past due amounts represented 1.42 percent and 1.45 percent of total Receivables outstanding at October 29, 2017 and October 30, 2016, respectively. The allowance for credit losses as a percentage of total Receivables outstanding represented .40 percent at both October 29, 2017 and October 30, 2016. In addition, at October 29, 2017 and October 30, 2016, the Company had $129.1 million and $138.1 million, respectively, of deposits primarily withheld from John Deere dealers and merchants available for potential credit losses. Impaired Receivables Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due or have provided bankruptcy notification, or require significant collection efforts. Receivables, which are impaired, are generally classified as non-performing. An analysis of impaired Receivables at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2017 * Receivables with specific allowance: Retail notes $ 2.2 $ 2.1 $ .6 $ 2.2 Wholesale receivables 11.7 11.7 2.6 11.0 Total with specific allowance 13.9 13.8 3.2 13.2 Receivables without specific allowance: Retail notes 18.3 18.0 14.0 Wholesale receivables 9.0 9.0 2.3 Total without specific allowance 27.3 27.0 16.3 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 Agriculture and turf $ 36.0 $ 35.6 $ 3.2 $ 23.9 Construction and forestry 5.2 5.2 5.6 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 2016 * Receivables with specific allowance: Retail notes $ 10.2 $ 9.9 $ 2.3 $ 10.6 Wholesale receivables .3 .3 .2 1.5 Financing leases .4 .3 .1 .4 Total with specific allowance 10.9 10.5 2.6 12.5 Receivables without specific allowance: Retail notes 9.5 9.4 10.6 Wholesale receivables .2 .2 .3 Total without specific allowance 9.7 9.6 10.9 Total $ 20.6 $ 20.1 $ 2.6 $ 23.4 Agriculture and turf $ 11.9 $ 11.6 $ 1.9 $ 10.2 Construction and forestry 8.7 8.5 .7 13.2 Total $ 20.6 $ 20.1 $ 2.6 $ 23.4 * Finance income recognized was not material. A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During 2017, 2016, and 2015, the Company identified 424, 150, and 106 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $14.0 million, $5.0 million, and $3.1 million pre-modification and $12.6 million, $4.0 million, and $2.4 million post-modification, respectively. In 2017, there were $2.0 million of troubled debt restructurings that subsequently defaulted and were written off. In 2016 and 2015, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At October 29, 2017, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. Write-offs Total Receivable write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars): 2017 2016 2015 Dollars Percent Dollars Percent Dollars Percent Write-offs: Retail notes: Agriculture and turf $ (17.0) (.12) % $ (10.5) (.07) % $ (9.5) (.06) % Construction and forestry (21.2) (.85) (19.4) (.79) (8.3) (.35) Total retail notes (38.2) (.23) (29.9) (.17) (17.8) (.10) Revolving charge accounts (52.2) (1.76) (54.3) (2.13) (36.2) (1.58) Wholesale receivables (.2) (4.1) (.05) (.3) Financing leases (5.7) (.92) (3.0) (.54) (1.6) (.29) Total write-offs (96.3) (.35) (91.3) (.32) (55.9) (.19) Recoveries: Retail notes: Agriculture and turf 5.8 .04 4.3 .03 4.7 .03 Construction and forestry 2.0 .08 1.5 .06 1.8 .08 Total retail notes 7.8 .05 5.8 .03 6.5 .03 Revolving charge accounts 19.9 .68 18.5 .73 15.3 .68 Wholesale receivables .1 .6 .01 Financing leases .3 .05 .5 .09 .2 .04 Total recoveries 28.0 .10 24.9 .09 22.6 .08 Total net write-offs $ (68.3) (.25) % $ (66.4) (.23) % $ (33.3) (.11) % |
Securitization of Receivables
Securitization of Receivables | 12 Months Ended |
Oct. 29, 2017 | |
Securitization of Receivables | |
Securitization of Receivables | Note 6. Securitization of Receivables The Company, as a part of its overall funding strategy, periodically transfers certain receivables (retail notes) into VIEs that are SPEs, or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes did not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions. In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third party investors result in secured borrowings, which are recorded as “Securitization borrowings” on the consolidated balance sheet. The securitized retail notes are recorded as “Retail notes securitized” on the consolidated balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the retail notes securitized less an allowance for credit losses, and other assets primarily representing restricted cash. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods. In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the Receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,630.5 million and $2,717.6 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $2,571.1 million and $2,655.1 million at October 29, 2017 and October 30, 2016, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit. In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $478.4 million and $663.6 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (securitization borrowings and accrued interest) were $454.1 million and $616.5 million at October 29, 2017 and October 30, 2016, respectively. In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduits) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,155.1 million and $1,861.0 million at October 29, 2017 and October 30, 2016, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,096.3 million and $1,728.8 million at October 29, 2017 and October 30, 2016, respectively. The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets at October 29 was as follows (in millions of dollars): 2017 Carrying value of liabilities $ 1,096.3 Maximum exposure to loss 1,155.1 The total assets of unconsolidated VIEs related to securitizations were approximately $39.6 billion at October 29, 2017. The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Retail notes securitized $ 4,172.3 $ 5,141.2 Allowance for credit losses (13.5) (14.7) Other assets 105.2 115.7 Total restricted securitized assets $ 4,264.0 $ 5,242.2 The components of consolidated secured borrowings and other liabilities related to securitizations at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Securitization borrowings $ 4,118.7 $ 4,997.8 Accrued interest on borrowings 2.8 2.6 Total liabilities related to restricted securitized assets $ 4,121.5 $ 5,000.4 The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At October 29, 2017, the maximum remaining term of all restricted securitized retail notes was approximately five years. |
Equipment on Operating Leases
Equipment on Operating Leases | 12 Months Ended |
Oct. 29, 2017 | |
Equipment on Operating Leases | |
Equipment on Operating Leases | Note 7. Equipment on Operating Leases Operating leases arise primarily from the leasing of John Deere equipment to retail customers. Rental payments applicable to equipment on operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. Residual values represent estimates of the value of the leased assets at the end of the lease terms. The Company evaluates the carrying value of its operating lease assets and tests for impairment when events or circumstances necessitate the evaluation. Generally, impairment is determined to exist if the undiscounted expected future cash flows from the operating leases are lower than the carrying value of the leased assets. During 2017, 2016, and 2015, the Company recorded impairment losses on operating leases of none, $31.1 million, and $10.3 million, respectively. Operating lease impairments are included in administrative and operating expenses on the statement of consolidated income. The cost of equipment on operating leases by product category at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): 2017 2016 Agriculture and turf $ 4,418.6 $ 3,924.3 Construction and forestry 1,364.9 1,336.7 Total 5,783.5 5,261.0 Accumulated depreciation (1,065.2) (864.8) Equipment on operating leases – net $ 4,718.3 $ 4,396.2 Initial lease terms for equipment on operating leases generally range from 12 months to 60 months. Rental payments for equipment on operating leases at October 29, 2017 and October 30, 2016 were scheduled as follows (in millions of dollars): 2017 2016 Due in: 0-12 months $ 581.0 $ 573.0 13-24 months 354.4 342.7 25-36 months 165.8 151.2 37-48 months 71.0 62.6 Over 48 months 9.8 10.1 Total $ 1,182.0 $ 1,139.6 Deposits withheld from John Deere dealers and related losses on operating leases are handled in a manner similar to the procedures for retail notes. At October 29, 2017 and October 30, 2016, the Company had $51.9 million and $67.8 million, respectively, of deposits withheld from John Deere dealers available for potential losses on residual values. In addition, a lease payment discount program, allowing reduced payments over the term of the lease, is administered in a manner similar to finance waivers on retail notes. During 2017, 2016, and 2015, the operating lease revenue earned from John Deere was $30.9 million, $28.7 million, and $20.7 million, respectively. Equipment returned to the Company upon termination of leases and held for subsequent sale or lease is recorded in other assets at the lower of net book value or estimated fair value of the equipment less cost to sell and is not depreciated. During 2017, 2016, and 2015, the Company recorded impairment losses on matured operating lease inventory of none, $28.6 million, and $9.1 million, respectively. Impairment losses on matured operating lease inventory are included in administrative and operating expenses on the statement of consolidated income. Past due balances of operating leases represent the total balance held (net book value plus accrued lease payments) and still accruing finance income with any payment amounts 30 days or more past the contractual payment due date. These amounts were $76.0 million and $97.8 million at October 29, 2017 and October 30, 2016, respectively. |
Notes Receivable from John Deer
Notes Receivable from John Deere | 12 Months Ended |
Oct. 29, 2017 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | Note 8. Notes Receivable from John Deere The Company makes loans to affiliated companies. The Company receives interest from John Deere at competitive market interest rates. The lending agreements range in maturity up to 4 years. Interest earned from John Deere was $3.4 million in 2017 and none for 2016 and 2015. The Company had notes receivable from John Deere at October 29, 2017 and October 30, 2016 with the following affiliated companies as follows (in millions of dollars): 2017 2016 Limited Liability Company John Deere Financial $ 102.2 Banco John Deere S.A. 54.5 Total Notes Receivable from John Deere $ 156.7 |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Oct. 29, 2017 | |
Short-Term Borrowings | |
Short-Term Borrowings | Note 9. Short-Term Borrowings Short-term borrowings of the Company at October 29, 2017 and October 30, 2016 consisted of the following (in millions of dollars): 2017 2016 Commercial paper and other notes payable $ 2,051.2 $ 386.4 Securitization borrowings 4,118.7 * 4,997.8 * John Deere 553.2 2,270.3 Current maturities of long-term borrowings 5,056.9 ** 4,509.3 ** Total $ 11,780.0 $ 12,163.8 * Includes unamortized debt issuance costs of $4.5 million and $4.9 million, respectively. ** Includes unamortized fair value adjustments related to interest rate swaps. Unamortized debt issuance costs were $1.6 million and $1.4 million, respectively. Securitization borrowings are secured by retail notes securitized on the balance sheet (see Note 6). Although these securitization borrowings are classified as short-term since payment is required if the retail notes are liquidated early, the payment schedule for these borrowings of $4,118.7 million, which are net of debt acquisition costs, at October 29, 2017 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2018 - $2,233.8, 2019 - $1,248.9, 2020 - $488.8, 2021 - $146.4, and 2022 - $5.3. The Company’s short-term debt also includes amounts borrowed from John Deere. The Company pays interest on a monthly basis to John Deere for these borrowings based on a market rate. The weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings, at October 29, 2017 and October 30, 2016, were 1.7 percent and 1.2 percent, respectively. Lines of credit available from U.S. and foreign banks were $7,558.0 million at October 29, 2017. Some of these credit lines are available to both the Company and Deere & Company. At October 29, 2017, $4,060.7 million of these worldwide lines of credit were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, of the Company and John Deere were primarily considered to constitute utilization. Included in the total credit lines at October 29, 2017 were 364-day credit facility agreements of $1,750.0 million, expiring in February 2018, and $750.0 million, expiring in October 2018. In addition, total credit lines included long‑term credit facility agreements of $2,500.0 million, expiring in April 2021, and $2,500.0 million, expiring in April 2022. The agreements are mutually extendable and the annual facility fees are not significant. These credit agreements require the Company to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. “Senior debt” consists of the Company’s total interest-bearing obligations, excluding subordinated debt and certain securitization indebtedness, but including borrowings from John Deere. All of these requirements of the credit agreements have been met during the periods included in the consolidated financial statements. The facility fees on these lines of credit are divided between Deere & Company and the Company based on the proportion of their respective forecasted liquidity requirements. Deere & Company has an agreement with Capital Corporation pursuant to which it has agreed to continue to own, directly or through one or more wholly-owned subsidiaries, at least 51 percent of the voting shares of capital stock of Capital Corporation and to maintain the Company’s consolidated tangible net worth at not less than $50.0 million. This agreement also obligates Deere & Company to make payments to the Company such that its consolidated ratio of earnings to fixed charges is not less than 1.05 to 1 for each fiscal quarter. Deere & Company’s obligations to make payments to the Company under the agreement are independent of whether the Company is in default on its indebtedness, obligations, or other liabilities. Further, Deere & Company’s obligations under the agreement are not measured by the amount of the Company’s indebtedness, obligations, or other liabilities. Deere & Company’s obligations to make payments under this agreement are expressly stated not to be a guaranty of any specific indebtedness, obligation, or liability of the Company and are enforceable only by or in the name of Capital Corporation. No payments were required under this agreement during the periods included in the consolidated financial statements. |
Long-Term Borrowings
Long-Term Borrowings | 12 Months Ended |
Oct. 29, 2017 | |
Long-Term Borrowings | |
Long-Term Borrowings | Note 10. Long-Term Borrowings Long-term borrowings of the Company at October 29, 2017 and October 30, 2016 consisted of the following (in millions of dollars): 2017 2016 Senior Debt: Medium-term notes due 2018-2027 (principal $17,121.1 - 2017, $15,821.1 - 2016): $ 17,049.9 * $ 16,046.0 * Average interest rate of 2.0% - 2017, 1.7% - 2016 2.75% Senior notes due 2022 ($500.0 principal): 501.5 * 519.0 * Swapped $500.0 to variable interest rate of 2.0% - 2017, 1.6% - 2016 Other notes 30.8 11.3 Total senior debt 17,582.2 16,576.3 Unamortized debt discount and debt issuance costs (47.8) (39.8) Total ** $ 17,534.4 $ 16,536.5 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end. The approximate principal amounts of long-term borrowings maturing in each of the next five years, in millions of dollars, are as follows: 2018 - $5,043.8, 2019 - $4,582.7, 2020 - $4,129.2, 2021 - $2,047.7 and 2022 - $2,943.7. |
Leases
Leases | 12 Months Ended |
Oct. 29, 2017 | |
Leases | |
Leases | Note 11. Leases Total rental expense for operating leases was $2.1 million, $1.9 million, and $2.2 million for 2017, 2016, and 2015, respectively. At October 29, 2017, future minimum lease payments under operating leases amounted to $6.5 million as follows (in millions of dollars): 2018 - $1.7, 2019 - $1.3 2020 - $1.0, 2021 - $.8, 2022 - $.8, and later years $.9. |
Capital Stock
Capital Stock | 12 Months Ended |
Oct. 29, 2017 | |
Capital Stock | |
Capital Stock | Note 12. Capital Stock All of Capital Corporation’s common stock is owned by JDFS, a wholly-owned finance holding subsidiary of Deere & Company. No shares of common stock of Capital Corporation were reserved for officers or employees or for options, warrants, conversions, or other rights at October 29, 2017 or October 30, 2016. At October 29, 2017 and October 30, 2016, Capital Corporation had authorized, but not issued, 10,000 shares of $1 par value preferred stock. |
Dividends
Dividends | 12 Months Ended |
Oct. 29, 2017 | |
Dividends | |
Dividends | Note 13. Dividends In 2017, 2016, and 2015, Capital Corporation declared and paid cash dividends of $285.0 million, $485.0 million, and $485.0 million, respectively, to JDFS. In each case, JDFS paid comparable dividends to Deere & Company. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 12 Months Ended |
Oct. 29, 2017 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | Note 14. Pension and Other Postretirement Benefits The Company is a participating employer in certain Deere & Company sponsored defined benefit pension plans for employees in the U.S. and certain defined benefit pension plans outside the U.S. These pension plans provide for benefits that are based primarily on years of service and employee compensation. Pension expense is actuarially determined based on the Company’s employees included in the plan. The Company’s pension expense amounted to $5.5 million in 2017, $5.7 million in 2016, and $9.7 million in 2015. The accumulated benefit obligation and plan net assets for the employees of the Company are not determined separately from Deere & Company. The Company generally provides defined benefit health care and life insurance plans for retired employees in the U.S. as a participating employer in Deere & Company’s sponsored plans. Health care and life insurance benefits expense is actuarially determined based on the Company’s employees included in the plans and amounted to $2.9 million in 2017, $2.4 million in 2016, and $3.7 million in 2015. Further disclosure for these plans is included in the notes to the Deere & Company 2017 Annual Report on Form 10-K. The Company is a participating employer in certain Deere & Company sponsored defined contribution plans related to employee investment and savings plans primarily in the U.S. The Company’s contributions and costs under these plans were $12.0 million in 2017, $12.2 million in 2016, and $12.4 million in 2015. The contribution rate varies primarily based on Deere & Company’s performance in the prior year and employee participation in the plans. |
Stock Option and Restricted Sto
Stock Option and Restricted Stock Awards | 12 Months Ended |
Oct. 29, 2017 | |
Stock Option and Restricted Stock Awards | |
Stock Option and Restricted Stock Awards | Note 15. Stock Option and Restricted Stock Awards Certain employees of the Company participate in Deere & Company share-based compensation plans. During 2017, 2016, and 2015, the total share-based compensation expense was $6.4 million, $5.7 million, and $5.7 million, respectively, with an income tax benefit recognized in net income of $2.4 million, $2.1 million, and $2.1 million, respectively. Further disclosure for these plans is included in the notes to the Deere & Company 2017 Annual Report on Form 10-K. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 29, 2017 | |
Income Taxes | |
Income Taxes | Note 16. Income Taxes The taxable income of the Company is included in the consolidated U.S. income tax return of Deere & Company. Provisions for income taxes are made generally as if Capital Corporation and each of its subsidiaries filed separate income tax returns. The provision for income taxes by taxing jurisdiction and by significant component consisted of the following (in millions of dollars): 2017 2016 2015 Current: U.S.: Federal $ 50.0 $ (119.0) $ 119.1 State 3.1 4.4 5.4 Foreign 25.6 17.1 20.1 Total current 78.7 (97.5) 144.6 Deferred: U.S.: Federal 93.5 273.4 121.2 State .3 (.7) 1.7 Foreign (1.0) 5.1 2.4 Total deferred 92.8 277.8 125.3 Provision for income taxes $ 171.5 $ 180.3 $ 269.9 A comparison of the statutory and effective income tax provision and reasons for related differences follows (in millions of dollars): 2017 2016 2015 U.S. federal income tax provision at a statutory rate of 35 percent $ 174.6 $ 182.0 $ 268.4 Increase (decrease) resulting from: Tax rates on foreign earnings (6.8) (5.9) (6.0) Municipal lease income not taxable (1.3) (1.4) (1.4) State and local income taxes, net of federal income tax benefit 2.2 2.4 4.6 Other – net 2.8 3.2 4.3 Provision for income taxes $ 171.5 $ 180.3 $ 269.9 At October 29, 2017, accumulated earnings in certain subsidiaries outside the U.S. totaled $379.1 million for which no provision for U.S. income taxes or foreign withholding taxes has been made, because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 29, 2017, the amount of cash and cash equivalents held by these foreign subsidiaries was $150.0 million. Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of deferred income tax assets and liabilities at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): 2017 2016 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Lease transactions $ 898.4 $ 789.9 Tax over book depreciation 2.5 12.0 Deferred retail note finance income 4.6 5.4 Allowance for credit losses $ 54.5 $ 53.6 Accrual for retirement and other benefits 29.9 26.3 Tax loss and tax credit carryforwards 29.5 20.8 Federal taxes on deferred state tax deductions 14.5 14.6 Miscellaneous accruals and other 1.7 2.3 8.3 .2 Less valuation allowances (2.9) (1.8) Deferred income tax assets and liabilities $ 127.2 $ 907.8 $ 121.8 $ 807.5 At October 29, 2017, certain tax affected tax loss and tax credit carryforwards of $29.5 million were available, with $24.2 million expiring from 2018 through 2037 and $5.3 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at October 29, 2017, October 30, 2016, and November 1, 2015 was as follows (in millions of dollars): 2017 2016 2015 Beginning of year balance $ 36.5 $ 36.0 $ 36.2 Increases to tax positions taken during the current year 7.6 9.7 11.1 Increases to tax positions taken during prior years 1.2 1.1 1.6 Decreases to tax positions taken during prior years (5.9) (7.3) (7.8) Decreases due to lapse of statute of limitations (3.9) (3.0) (3.9) Settlements (1.1) Foreign exchange (.1) End of year balance $ 35.5 $ 36.5 $ 36.0 The amount of unrecognized tax benefits at October 29, 2017 and October 30, 2016 that would affect the effective tax rate if the tax benefits were recognized was $18.0 million and $19.0 million, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant. The Company files its tax returns according to the tax laws of the jurisdictions in which it operates, which includes the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is included in the consolidated U.S. income tax return and various state returns of Deere & Company. The U.S. Internal Revenue Service has completed the examination of Deere & Company’s federal income tax returns for periods prior to 2009. The years’ 2009 through 2014 federal income tax returns are currently under examination. Various state and foreign income tax returns also remain subject to examination by taxing authorities. The Company’s policy is to recognize interest related to income taxes in interest expense and other income, and recognize penalties in administrative and operating expenses. During 2017, 2016, and 2015, the total amount of expense from interest and penalties was $.6 million, $1.8 million, and $1.4 million and the interest income was not material for any of the periods. At October 29, 2017 and October 30, 2016, the liability for accrued interest and penalties totaled $17.4 million and $16.8 million, respectively. |
Other Income and Administrative
Other Income and Administrative and Operating Expenses | 12 Months Ended |
Oct. 29, 2017 | |
Other Income and Administrative and Operating Expenses | |
Other Income and Administrative and Operating Expenses | Note 17. Other Income and Administrative and Operating Expenses The major components of other income and administrative and operating expenses were as follows (in millions of dollars): 2017 2016 2015 Other income – net Fees from John Deere $ 11.9 $ 6.5 $ 15.9 Fees from customers 31.0 27.5 21.4 Other 16.6 9.8 (4.9) Total $ 59.5 $ 43.8 $ 32.4 Administrative and operating expenses Compensation and benefits $ 241.1 $ 222.9 $ 231.4 Other 181.4 244.0 143.3 Total $ 422.5 $ 466.9 $ 374.7 |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Oct. 29, 2017 | |
Cash Flow Information | |
Cash Flow Information | Note 18. Cash Flow Information For purposes of the statement of consolidated cash flows, the Company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the Company’s short-term borrowings, excluding the securitization borrowings and current maturities of long-term borrowings, mature or may require payment within three months or less. Cash payments by the Company for interest in 2017, 2016, and 2015 were $531.7 million, $421.4 million, and $308.3 million, respectively. Cash payments (receipts) for income taxes during these same periods were $48.5 million, $(80.6) million, and $134.5 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 29, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 19. Commitments and Contingencies At October 29, 2017, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $475.0 million of commercial paper and a fair value liability of $20.0 million for derivatives outstanding, prior to considering applicable netting provisions, with a notional amount of $1,786.7 million that were guaranteed by Capital Corporation. Capital Corporation has a variable interest in John Deere Canada Funding Inc. (JDCFI), a wholly-owned subsidiary of John Deere Financial Inc., which was created as a VIE to issue debt in public markets to fund the operations of affiliated companies in Canada. Capital Corporation has a variable interest in JDCFI because it provides guarantees for all debt issued by JDCFI, however it does not consolidate JDCFI because it does not have the power to direct the activities that most significantly impact JDCFI’s economic performance. Capital Corporation has no carrying value of assets or liabilities related to JDCFI. Its maximum exposure to loss is the amount of the debt issued by JDCFI and guaranteed by Capital Corporation, which was $2,024.1 million at October 29, 2017. The weighted average interest rate on the debt at October 29, 2017 was 2.1 percent with a maximum remaining maturity of approximately five years. No additional support beyond what was previously contractually required has been provided to JDCFI during the reporting periods. The Company has commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. The Company applies the same credit policies and approval process for these commitments to extend credit as it does for its Receivables. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. The amount of unused commitments to extend credit to John Deere dealers was $8.9 billion at October 29, 2017. The amount of unused commitments to extend credit to customers was $26.7 billion at October 29, 2017. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of these unused commitments to extend credit to customers relate to revolving charge accounts. At October 29, 2017, Capital Corporation had $38.9 million in unused loan commitments denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia. At October 29, 2017, the Company had restricted other assets of approximately $40.0 million. In addition, see Note 6 for restricted assets associated with borrowings related to securitizations. The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to retail credit. The Company believes the reasonably possible range of losses for these unresolved legal actions in addition to the amounts accrued would not have a material effect on its consolidated financial statements. |
Other Comprehensive Income Item
Other Comprehensive Income Items | 12 Months Ended |
Oct. 29, 2017 | |
Other Comprehensive Income Items | |
Other Comprehensive Income Items | Note 20. Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): 2017 2016 2015 Cumulative translation adjustment: Beginning of year balance $ (84.1) $ (60.4) $ 6.0 Current period activity 24.1 (23.7) (66.4) End of year balance $ (60.0) $ (84.1) $ (60.4) Unrealized gain (loss) on derivatives: Beginning of year balance $ .3 $ (2.7) $ (.6) Current period activity 3.9 3.0 (2.1) End of year balance $ 4.2 $ .3 $ (2.7) Following are amounts recorded in and reclassifications out of other comprehensive income (loss) and the income tax effects (in millions of dollars): Before Tax After Tax (Expense) Tax Amount Credit Amount 2017 Cumulative translation adjustment $ 24.1 $ 24.1 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 4.9 $ (1.7) 3.2 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 1.1 (.4) .7 Net unrealized gain (loss) on derivatives 6.0 (2.1) 3.9 Total other comprehensive income (loss) $ 30.1 $ (2.1) $ 28.0 2016 Cumulative translation adjustment $ (23.7) $ (23.7) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (.4) $ .1 (.3) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5.0 (1.7) 3.3 Net unrealized gain (loss) on derivatives 4.6 (1.6) 3.0 Total other comprehensive income (loss) $ (19.1) $ (1.6) $ (20.7) 2015 Cumulative translation adjustment $ (66.4) $ (66.4) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (11.9) $ 4.2 (7.7) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 8.6 (3.0) 5.6 Net unrealized gain (loss) on derivatives (3.3) 1.2 (2.1) Total other comprehensive income (loss) $ (69.7) $ 1.2 $ (68.5) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 29, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 21. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Carrying Fair Carrying Fair Value Value * Value Value * Receivables financed – net $ 24,123.1 $ 24,016.0 $ 22,476.3 $ 22,429.5 Retail notes securitized – net 4,158.8 4,129.6 5,126.5 5,114.2 Securitization borrowings 4,118.7 4,118.4 4,997.8 5,004.9 Current maturities of long-term borrowings 5,056.9 5,080.6 4,509.3 4,530.0 Long-term borrowings 17,534.4 17,763.6 16,536.5 16,724.5 * Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings. Fair values of Receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar Receivables. The fair values of the remaining Receivables approximated the carrying amounts. Fair values of long-term borrowings and short-term securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges. Assets and liabilities measured at October 29, 2017 and October 30, 2016 at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): 2017 2016 Receivables from John Deere Derivatives: Interest rate contracts $ 85.4 $ 241.8 Cross-currency interest rate contracts 5.6 10.2 Other assets Derivatives: Interest rate contracts 8.1 35.3 Foreign exchange contracts 24.6 13.8 Total assets * $ 123.7 $ 301.1 Other payables to John Deere Derivatives: Interest rate contracts $ 125.6 $ 24.0 Cross-currency interest rate contracts .9 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 6.0 4.3 Total liabilities $ 132.5 $ 28.3 * Excluded from this table are the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. Fair value, nonrecurring, Level 3 measurements from impairments at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): Fair Value Losses * 2017 2016 2017 2016 2015 Equipment on operating leases - net $ 654.4 $ 31.1 $ 10.3 Other assets 184.0 28.6 9.1 Total $ 838.4 $ 59.7 $ 19.4 * See Receivables with specific allowances in Note 5. Losses were not significant. See Note 7 for impairments on lease residual values. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Derivatives – The Company’s derivative financial instruments consist of interest rate swaps and caps, foreign currency forwards and swaps, and cross-currency interest rate swaps. The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values. Equipment on operating leases - net – The impairments are based on an income approach (discounted cash flow), using the contractual payments, plus an estimate of equipment sale price at lease maturity. Inputs include realized sales values. Other assets – Impairments are based on the fair value of the matured operating lease inventory, which is measured using a market approach. Inputs include realized sales values. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Oct. 29, 2017 | |
Derivative Instruments | |
Derivative Instruments | Note 22. Derivative Instruments Cash Flow Hedges Certain interest rate and cross-currency interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at October 29, 2017 and October 30, 2016 were $1,700.0 million and $1,600.0 million, respectively. There were no cross‑currency interest rate contracts at October 29, 2017 and October 30, 2016. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense or administrative and operating expenses (foreign exchange) in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate or foreign currency exchange rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense or administrative and operating expenses (foreign exchange) and were not material during any years presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of gain recorded in OCI at October 29, 2017 that is expected to be reclassified to interest expense or administrative and operating expenses in the next twelve months if interest rates or exchange rates remain unchanged is approximately $1.6 million after-tax. These contracts mature in up to 28 months. There were no gains or losses reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at October 29, 2017 and October 30, 2016 were $8,077.2 million and $8,283.7 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a gain of $2.7 million and a loss of $1.6 million during 2017 and 2016, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows (in millions of dollars): 2017 2016 Interest rate contracts * $ (273.9) $ 9.0 Borrowings ** 276.6 (10.6) * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $75.8 million and $142.1 million during 2017 and 2016, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $229.5 million and $276.8 million during 2017 and 2016, respectively. Derivatives Not Designated as Hedging Instruments The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (forwards and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings. The total notional amounts of the interest rate swaps at October 29, 2017 and October 30, 2016 were $2,311.3 million and $2,101.2 million, the foreign exchange contracts were $1,455.9 million and $1,263.6 million, and the cross‑currency interest rate contracts were $65.8 million and $63.4 million, respectively. At October 29, 2017 and October 30, 2016, there were also $1,594.3 million and $2,430.3 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in administrative and operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows. Fair values of derivative instruments in the consolidated balance sheet at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 64.8 $ 226.0 Not designated as hedging instruments: Interest rate contracts 20.6 15.8 Cross-currency interest rate contracts 5.6 10.2 Total not designated 26.2 26.0 Other Assets Designated as hedging instruments: Interest rate contracts 7.0 34.7 Not designated as hedging instruments: Interest rate contracts 1.1 .6 Foreign exchange contracts 24.6 13.8 Total not designated 25.7 14.4 Total derivative assets $ 123.7 $ 301.1 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 107.2 $ 10.2 Not designated as hedging instruments: Interest rate contracts 18.4 13.8 Cross-currency interest rate contracts .9 Total not designated 19.3 13.8 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 6.0 4.3 Total not designated 6.0 4.3 Total derivative liabilities $ 132.5 $ 28.3 The classifications and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following (in millions of dollars): Expense or OCI Classification 2017 2016 2015 Fair Value Hedges Interest rate contracts Interest expense $ (198.1) $ 151.1 $ 268.7 Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts OCI -pretax * 4.9 (.4) (11.9) Foreign exchange contracts OCI -pretax * Reclassified from OCI (Effective Portion): Interest rate contracts Interest expense * (1.1) (5.0) (8.6) Foreign exchange contracts Administrative and operating expenses * Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts Interest expense * $ (2.6) $ (1.5) $ (8.2) Foreign exchange contracts Administrative and operating expenses * (79.2) 59.0 165.6 Total not designated $ (81.8) $ 57.5 $ 157.4 * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts were not significant. Included in the above table are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amount the Company recognized on these affiliate party transactions were a loss of $201.0 million in 2017 and gains of $151.9 million and $262.7 million during 2016 and 2015, respectively. Counterparty Risk and Collateral The Company’s outstanding derivatives have been transacted with both unrelated external counterparties and with John Deere. For derivatives transacted with John Deere, the Company utilizes a centralized hedging center structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with the Company. Except for collateral provisions, the terms of the transaction between the Company and John Deere are identical to the terms of the transaction between John Deere and its unrelated external counterparty. Certain of the Company’s derivative agreements executed directly with unrelated external counterparties contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. At October 29, 2017 and October 30, 2016, there were no aggregate liability positions for derivatives with credit-risk-related contingent features. If the credit-risk-related contingent features were triggered, the Company would be required to post collateral up to any liability position, prior to considering applicable netting provisions. Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual unrelated external counterparty exposure by setting limits that consider the credit rating of the unrelated external counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the unrelated external counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Some of these agreements executed with unrelated external counterparties include credit support provisions. Each master agreement executed with an unrelated external counterparty permits the net settlement of amounts owed in the event of default or termination. The maximum amount of loss that the Company would incur on derivatives transacted directly with unrelated external counterparties, if the counterparties to those derivative transactions fail to meet their obligations, not considering collateral received or netting arrangements, was the gross amount of the external derivatives shown in the subsequent table. None of the concentrations of risk with any individual unrelated external counterparty was considered significant at October 29, 2017 and October 30, 2016. The Company also has ISDA agreements with John Deere that permit the net settlement of amounts owed between counterparties in the event of early termination. In addition, the Company has a loss sharing agreement with John Deere in which it has agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage exposures of the Company. The maximum amount of loss that the Company would incur on derivatives transacted with John Deere if the unrelated external counterparty would fail to meet its obligations, not considering collateral received or netting arrangements, was the gross asset amount of the John Deere derivatives shown in the subsequent table. The loss sharing agreement increases the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, by $23.5 million and $1.9 million as of October 29, 2017 and October 30, 2016, respectively. Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars): 2017 Derivatives: Gross Amounts Recognized Netting Arrangements Collateral Net Assets External $ 32.7 $ (.1) $ 32.6 John Deere 91.0 (65.9) 25.1 Liabilities External 6.0 (.1) 5.9 John Deere 126.5 (65.9) 60.6 2016 Derivatives: Gross Amounts Recognized Netting Arrangements Collateral Net Assets External $ 49.1 $ (1.1) $ 48.0 John Deere 252.0 (24.0) 228.0 Liabilities External 4.3 (1.1) 3.2 John Deere 24.0 (24.0) |
Voluntary Employee Separation P
Voluntary Employee Separation Program | 12 Months Ended |
Oct. 29, 2017 | |
Voluntary Employee Separation Program | |
Voluntary Employee Separation Program | Note 23. Voluntary Employee Separation Program During the fourth quarter of 2016, the Company announced a voluntary employee-separation program as part of its effort to reduce operating costs. The program provided for cash payments based on previous years of service. The expense was recorded in the period the employees accepted the separation offer. The program’s total pretax expenses were $8.4 million, of which $.2 million was recorded in the fourth quarter of 2016 and $8.2 million in 2017. The payment for the program was substantially made in the first quarter of 2017. The 2017 expense was recorded in administrative and operating expenses. |
Geographic Area Information
Geographic Area Information | 12 Months Ended |
Oct. 29, 2017 | |
Geographic Area Information | |
Geographic Area Information | Note 24. Geographic Area Information Based on the way the operations are managed and evaluated by management and materiality considerations, the Company is viewed as one operating segment. However, geographic area information for revenues, operating profit, which is income of consolidated group before income taxes plus equity in income of unconsolidated affiliate, and Receivables attributed to the U.S. and countries outside the U.S. is disclosed below. No individual foreign country’s revenues, operating profit, or Receivables were material for disclosure purposes. Geographic area information as of and for the years ended October 29, 2017, October 30, 2016, and November 1, 2015 is presented below (in millions of dollars): 2017 2016 2015 Revenues: U.S. $ 2,030.3 $ 1,899.3 $ 1,736.9 Outside the U.S. 196.7 194.9 214.8 Total $ 2,227.0 $ 2,094.2 $ 1,951.7 Operating profit: U.S. $ 407.6 $ 441.7 $ 681.6 Outside the U.S. 92.4 80.1 86.5 Total $ 500.0 $ 521.8 $ 768.1 Receivables: U.S. $ 24,189.6 $ 24,287.9 $ 25,779.4 Outside the U.S. 4,206.1 3,426.6 3,313.0 Total $ 28,395.7 $ 27,714.5 $ 29,092.4 |
Unconsolidated Affiliated Compa
Unconsolidated Affiliated Company | 12 Months Ended |
Oct. 29, 2017 | |
Unconsolidated Affiliated Company | |
Unconsolidated Affiliated Company | Note 25. Unconsolidated Affiliated Company The Company’s investment in an unconsolidated affiliated company consists of a 50% ownership in John Deere Financial S.A.S., a joint venture in France that primarily offers lease financing to customers. The Company does not control the joint venture and accounts for its investment in the joint venture on the equity basis. The Company’s share of the income or loss of this joint venture is reported in the consolidated income statement under “Equity in income of unconsolidated affiliate.” The investment in this joint venture is reported in the consolidated balance sheet under “Investment in unconsolidated affiliate.” Summarized financial information of the unconsolidated affiliated company for the years ended October 29, 2017, October 30, 2016, and November 1, 2015 was as follows (in millions of dollars): 2017 2016 2015 Operations: Total revenue $ 10.1 $ 10.7 $ 11.3 Net income 2.3 3.2 2.4 The Company’s equity in net income 1.2 1.6 1.2 2017 2016 Financial Position: Total assets $ 212.2 $ 200.9 Total external borrowings 176.8 168.1 Total net assets 27.6 23.7 The Company’s share of net assets 13.8 11.9 |
Supplemental Information (Unaud
Supplemental Information (Unaudited) | 12 Months Ended |
Oct. 29, 2017 | |
Supplemental Information (Unaudited) | |
Supplemental Information (Unaudited) | Note 26. Supplemental Information (Unaudited) Quarterly Information The Company’s fiscal year ends in October and its interim periods (quarters) end in January, April, and July. Supplemental quarterly information for the Company follows (in millions of dollars): First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year 2017: Revenues $ 522.4 $ 543.9 $ 571.8 $ 588.9 $ 2,227.0 Interest expense 115.1 127.1 130.1 148.8 521.1 Operating expenses 299.9 316.0 304.0 287.2 1,207.1 Provision for income taxes 33.6 36.6 49.7 51.6 171.5 Equity in income of unconsolidated affiliate .5 .3 .3 .1 1.2 Net income attributable to noncontrolling interests .1 .1 Net income attributable to the Company $ 74.2 $ 64.5 $ 88.3 $ 101.4 $ 328.4 2016: Revenues $ 487.2 $ 526.9 $ 538.6 $ 541.5 $ 2,094.2 Interest expense 89.6 105.6 109.8 117.1 422.1 Operating expenses 249.7 312.6 287.4 302.2 1,151.9 Provision for income taxes 48.9 39.3 51.2 40.9 180.3 Equity in income of unconsolidated affiliate .8 .2 .2 .4 1.6 Net loss attributable to noncontrolling interests (.1) (.1) Net income attributable to the Company $ 99.9 $ 69.6 $ 90.4 $ 81.7 $ 341.6 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Oct. 29, 2017 | |
Subsequent Events | |
Subsequent Events | Note 27. Subsequent Events In December 2017, Capital Corporation paid a $20.0 million dividend to JDFS. JDFS, in turn, paid a $20.0 million dividend to Deere & Company. In November 2017, the Company entered into a retail note securitization using its bank conduit facility that resulted in securitization borrowings of approximately $985.0 million. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 29, 2017 | |
Summary of Significant Accounting Policies | |
Consolidation, Policy | Principles of Consolidation The consolidated financial statements include the financial statements of Capital Corporation and its subsidiaries. The consolidated financial statements represent primarily the consolidation of all companies in which Capital Corporation has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (see Note 25). |
Fiscal Year | Fiscal Year The Company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2017, 2016, and 2015 were October 29, 2017, October 30, 2016, and November 1, 2015, respectively. All fiscal years contained 52 weeks. |
Use of Estimates in Financial Statements | Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight‑line basis over the scheduled lease terms in finance revenue. |
Securitization of Receivables | Securitization of Receivables Certain financing receivables are periodically transferred to SPEs in securitization transactions (see Note 6). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as “Retail notes securitized.” The Company recognizes finance income over the lives of these retail notes using the interest method. |
Depreciation | Depreciation Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. |
Fees Paid to John Deere | Fees Paid to John Deere Fees paid to John Deere include corporate support fees and interest on intercompany borrowings from John Deere based on approximate market rates. |
Derivative Financial Instruments | Derivative Financial Instruments It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to financing in currencies other than the functional currencies. All derivatives are recorded at fair value on the balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the balance sheet. Each derivative is designated as either a cash flow hedge, a fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income to the extent the hedge was effective by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All ineffective changes in derivative fair values are recognized currently in net income. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk‑management strategy. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, the hedge accounting discussed above is discontinued (see Note 22). |
Foreign Currency Translation | Foreign Currency Translation The functional currencies for most of the Company’s foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in other comprehensive income. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange forward contracts are included in net income. The pretax net losses for foreign exchange in 2017, 2016, and 2015 were $8.1 million, $13.9 million and $19.7 million, respectively. |
Receivables - Non-Performing, Policy | Delinquencies Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. The Company monitors the credit quality of Receivables as either performing or non-performing monthly. Non‑performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes are approximately 120 days delinquent, accrual of finance income is suspended, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended, the collateral should be repossessed or the account should be designated for litigation, and the estimated uncollectible amount written off to the allowance for credit losses. Generally, when a financing lease account becomes 120 days delinquent, the accrual of lease revenue is suspended, the equipment is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer’s withholding account, if any, is written off to the allowance for credit losses. Finance income for non-performing Receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured. Impaired Receivables Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due or have provided bankruptcy notification, or require significant collection efforts. Receivables, which are impaired, are generally classified as non-performing. |
Receivables - Allowance for Credit Losses, Policy | Allowance for Credit Losses Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions, and credit risk quality. |
Troubled Debt Restructuring, Policy | A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
Unremitted Earnings in Foreign Investment, Policy | At October 29, 2017, accumulated earnings in certain subsidiaries outside the U.S. totaled $379.1 million for which no provision for U.S. income taxes or foreign withholding taxes has been made, because it is expected that such earnings will be reinvested outside the U.S. indefinitely. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable. At October 29, 2017, the amount of cash and cash equivalents held by these foreign subsidiaries was $150.0 million. |
Cash and Cash Equivalents, Policy | For purposes of the statement of consolidated cash flows, the Company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the Company’s short-term borrowings, excluding the securitization borrowings and current maturities of long-term borrowings, mature or may require payment within three months or less. |
Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Retail notes | |
Receivables | |
Schedule of Receivables by Product Category | Retail notes receivable by product category at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Unrestricted Securitized Unrestricted Securitized Agriculture and turf – new $ 7,300.4 $ 1,554.1 $ 6,683.4 $ 1,983.7 Agriculture and turf – used 4,179.0 2,097.4 4,093.1 2,631.1 Construction and forestry – new 1,731.3 521.6 1,669.4 544.3 Construction and forestry – used 319.5 77.0 281.6 75.6 Total 13,530.2 4,250.1 12,727.5 5,234.7 Unearned finance income (487.9) (77.8) (400.5) (93.5) Retail notes receivable $ 13,042.3 $ 4,172.3 $ 12,327.0 $ 5,141.2 |
Schedule of Receivable Installments | Gross retail note installments at October 29, 2017 and October 30, 2016 were scheduled to be received as follows (in millions of dollars): 2017 2016 Unrestricted Securitized Unrestricted Securitized Due in: 0-12 months $ 4,424.7 $ 2,027.6 $ 4,224.6 $ 2,268.6 13-24 months 3,405.6 1,256.1 3,258.3 1,535.5 25-36 months 2,651.4 671.8 2,503.7 931.3 37-48 months 1,819.5 242.8 1,665.0 407.8 49-60 months 992.5 50.2 869.4 84.2 Over 60 months 236.5 1.6 206.5 7.3 Total $ 13,530.2 $ 4,250.1 $ 12,727.5 $ 5,234.7 |
Schedule of Guidelines Relating to Down Payment Requirements and Contract Terms | Company guidelines relating to down payment requirements and contract terms on retail notes are generally as follows: Down Contract Payment Terms Agriculture and turf (new and used): Seasonal payments 10% - 30% 3 - 7 years Monthly payments 10% - 20% 36 - 84 months Construction and forestry: New 10% 48 - 60 months Used 15% 36 - 48 months |
Financing leases | |
Receivables | |
Schedule of Receivables by Product Category | Financing leases receivable by product category at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Agriculture and turf $ 408.4 $ 351.2 Construction and forestry 151.7 173.3 Total 560.1 524.5 Estimated residual values 222.3 136.2 Unearned finance income (68.2) (55.4) Financing leases receivable $ 714.2 $ 605.3 |
Schedule of Receivable Installments | Initial lease terms for financing leases generally range from 4 months to 60 months. Payments on financing leases receivable at October 29, 2017 and October 30, 2016 were scheduled as follows (in millions of dollars): 2017 2016 Due in: 0-12 months $ 216.0 $ 208.4 13-24 months 147.5 147.6 25-36 months 106.8 88.9 37-48 months 59.4 52.2 Over 48 months 30.4 27.4 Total $ 560.1 $ 524.5 |
Allowance for Credit Losses a37
Allowance for Credit Losses and Credit Quality of Receivables (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Allowance for Credit Losses and Credit Quality of Receivables | |
Age Analysis of past due Receivables that are still accruing interest and non-performing Receivables | An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at October 29, 2017 was as follows (in millions of dollars): 90 Days or 30-59 Days 60-89 Days Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.2 $ 48.3 $ 45.3 $ 199.8 Construction and forestry 73.0 31.9 39.2 144.1 Revolving charge accounts: Agriculture and turf 15.4 5.6 2.3 23.3 Construction and forestry 2.9 1.1 .3 4.3 Wholesale receivables: Agriculture and turf 4.5 1.6 2.4 8.5 Construction and forestry .1 .1 .1 .3 Financing leases: Agriculture and turf 8.9 7.5 3.6 20.0 Construction and forestry .5 1.1 .1 1.7 Total Receivables $ 211.5 $ 97.2 $ 93.3 $ 402.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 199.8 $ 63.1 $ 14,379.9 $ 14,642.8 Construction and forestry 144.1 24.2 2,403.5 2,571.8 Revolving charge accounts: Agriculture and turf 23.3 1.8 3,458.7 3,483.8 Construction and forestry 4.3 84.5 88.8 Wholesale receivables: Agriculture and turf 8.5 10.8 5,469.6 5,488.9 Construction and forestry .3 1,405.1 1,405.4 Financing leases: Agriculture and turf 20.0 6.2 541.3 567.5 Construction and forestry 1.7 1.7 143.3 146.7 Total Receivables $ 402.0 $ 107.8 $ 27,885.9 $ 28,395.7 An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at October 30, 2016 was as follows (in millions of dollars): 90 Days or 30-59 Days 60-89 Days Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.3 $ 51.0 $ 59.6 $ 216.9 Construction and forestry 73.6 32.4 25.1 131.1 Revolving charge accounts: Agriculture and turf 12.9 3.5 2.1 18.5 Construction and forestry 2.4 .7 .4 3.5 Wholesale receivables: Agriculture and turf 5.5 1.3 1.5 8.3 Construction and forestry 1.4 1.4 Financing leases: Agriculture and turf 8.8 4.6 3.6 17.0 Construction and forestry 2.8 1.6 .2 4.6 Total Receivables $ 212.3 $ 95.1 $ 93.9 $ 401.3 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 216.9 $ 90.2 $ 14,658.7 $ 14,965.8 Construction and forestry 131.1 23.7 2,347.6 2,502.4 Revolving charge accounts: Agriculture and turf 18.5 1.3 2,979.2 2,999.0 Construction and forestry 3.5 76.0 79.5 Wholesale receivables: Agriculture and turf 8.3 .3 5,530.7 5,539.3 Construction and forestry 1.4 1,021.8 1,023.2 Financing leases: Agriculture and turf 17.0 6.1 409.0 432.1 Construction and forestry 4.6 2.6 166.0 173.2 Total Receivables $ 401.3 $ 124.2 $ 27,189.0 $ 27,714.5 |
Analysis of the Allowance for Credit Losses and Investment in Receivables | An analysis of the allowance for credit losses and investment in Receivables was as follows (in millions of dollars): Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables 2017 Allowance: Beginning of year balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Provision for credit losses 29.7 32.3 3.0 5.3 70.3 Write-offs (38.2) (52.2) (.2) (5.7) (96.3) Recoveries 7.8 19.9 .3 28.0 Translation adjustments .1 (.1) .1 .1 End of year balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Balance individually evaluated * $ .6 $ 2.6 $ 3.2 Receivables: End of year balance $ 17,214.6 $ 3,572.6 $ 6,894.3 $ 714.2 $ 28,395.7 Balance individually evaluated * $ 41.0 $ 3.1 $ 24.0 $ 4.0 $ 72.1 2016 Allowance: Beginning of year balance $ 53.3 $ 39.7 $ 8.1 $ 8.7 $ 109.8 Provision for credit losses 27.3 35.8 3.1 2.6 68.8 Write-offs (29.9) (54.3) (4.1) (3.0) (91.3) Recoveries 5.8 18.5 .1 .5 24.9 Translation adjustments (.2) (.3) (.5) End of year balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Balance individually evaluated * $ 2.3 $ .2 $ .1 $ 2.6 Receivables: End of year balance $ 17,468.2 $ 3,078.5 $ 6,562.5 $ 605.3 $ 27,714.5 Balance individually evaluated * $ 44.5 $ 8.4 $ .8 $ .6 $ 54.3 2015 Allowance: Beginning of year balance $ 56.1 $ 39.9 $ 7.6 $ 8.8 $ 112.4 Provision for credit losses 9.4 20.7 .6 1.6 32.3 Write-offs (17.8) (36.2) (.3) (1.6) (55.9) Recoveries 6.5 15.3 .6 .2 22.6 Translation adjustments (.9) (.4) (.3) (1.6) End of year balance $ 53.3 $ 39.7 $ 8.1 $ 8.7 $ 109.8 Balance individually evaluated * $ 1.0 $ .2 $ 1.2 Receivables: End of year balance $ 18,659.0 $ 2,680.8 $ 7,185.5 $ 567.1 $ 29,092.4 Balance individually evaluated * $ 20.2 $ .2 $ 10.9 $ .8 $ 32.1 * Remainder is collectively evaluated. |
Analysis of Impaired Receivables | An analysis of impaired Receivables at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment 2017 * Receivables with specific allowance: Retail notes $ 2.2 $ 2.1 $ .6 $ 2.2 Wholesale receivables 11.7 11.7 2.6 11.0 Total with specific allowance 13.9 13.8 3.2 13.2 Receivables without specific allowance: Retail notes 18.3 18.0 14.0 Wholesale receivables 9.0 9.0 2.3 Total without specific allowance 27.3 27.0 16.3 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 Agriculture and turf $ 36.0 $ 35.6 $ 3.2 $ 23.9 Construction and forestry 5.2 5.2 5.6 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 2016 * Receivables with specific allowance: Retail notes $ 10.2 $ 9.9 $ 2.3 $ 10.6 Wholesale receivables .3 .3 .2 1.5 Financing leases .4 .3 .1 .4 Total with specific allowance 10.9 10.5 2.6 12.5 Receivables without specific allowance: Retail notes 9.5 9.4 10.6 Wholesale receivables .2 .2 .3 Total without specific allowance 9.7 9.6 10.9 Total $ 20.6 $ 20.1 $ 2.6 $ 23.4 Agriculture and turf $ 11.9 $ 11.6 $ 1.9 $ 10.2 Construction and forestry 8.7 8.5 .7 13.2 Total $ 20.6 $ 20.1 $ 2.6 $ 23.4 * Finance income recognized was not material. |
Total Receivable Write-offs and Recoveries, by Product, and as a Percentage of Average Balances Held | Total Receivable write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars): 2017 2016 2015 Dollars Percent Dollars Percent Dollars Percent Write-offs: Retail notes: Agriculture and turf $ (17.0) (.12) % $ (10.5) (.07) % $ (9.5) (.06) % Construction and forestry (21.2) (.85) (19.4) (.79) (8.3) (.35) Total retail notes (38.2) (.23) (29.9) (.17) (17.8) (.10) Revolving charge accounts (52.2) (1.76) (54.3) (2.13) (36.2) (1.58) Wholesale receivables (.2) (4.1) (.05) (.3) Financing leases (5.7) (.92) (3.0) (.54) (1.6) (.29) Total write-offs (96.3) (.35) (91.3) (.32) (55.9) (.19) Recoveries: Retail notes: Agriculture and turf 5.8 .04 4.3 .03 4.7 .03 Construction and forestry 2.0 .08 1.5 .06 1.8 .08 Total retail notes 7.8 .05 5.8 .03 6.5 .03 Revolving charge accounts 19.9 .68 18.5 .73 15.3 .68 Wholesale receivables .1 .6 .01 Financing leases .3 .05 .5 .09 .2 .04 Total recoveries 28.0 .10 24.9 .09 22.6 .08 Total net write-offs $ (68.3) (.25) % $ (66.4) (.23) % $ (33.3) (.11) % |
Securitization of Receivables (
Securitization of Receivables (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Securitization of Receivables | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets at October 29 was as follows (in millions of dollars): 2017 Carrying value of liabilities $ 1,096.3 Maximum exposure to loss 1,155.1 |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Retail notes securitized $ 4,172.3 $ 5,141.2 Allowance for credit losses (13.5) (14.7) Other assets 105.2 115.7 Total restricted securitized assets $ 4,264.0 $ 5,242.2 The components of consolidated secured borrowings and other liabilities related to securitizations at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Securitization borrowings $ 4,118.7 $ 4,997.8 Accrued interest on borrowings 2.8 2.6 Total liabilities related to restricted securitized assets $ 4,121.5 $ 5,000.4 |
Equipment on Operating Leases (
Equipment on Operating Leases (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Equipment on Operating Leases | |
Schedule of Cost of Equipment on Operating Leases by Product Category | The cost of equipment on operating leases by product category at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): 2017 2016 Agriculture and turf $ 4,418.6 $ 3,924.3 Construction and forestry 1,364.9 1,336.7 Total 5,783.5 5,261.0 Accumulated depreciation (1,065.2) (864.8) Equipment on operating leases – net $ 4,718.3 $ 4,396.2 |
Schedule of Rental Payments for Equipment on Operating Leases | Initial lease terms for equipment on operating leases generally range from 12 months to 60 months. Rental payments for equipment on operating leases at October 29, 2017 and October 30, 2016 were scheduled as follows (in millions of dollars): 2017 2016 Due in: 0-12 months $ 581.0 $ 573.0 13-24 months 354.4 342.7 25-36 months 165.8 151.2 37-48 months 71.0 62.6 Over 48 months 9.8 10.1 Total $ 1,182.0 $ 1,139.6 |
Notes Receivable from John De40
Notes Receivable from John Deere (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | The Company had notes receivable from John Deere at October 29, 2017 and October 30, 2016 with the following affiliated companies as follows (in millions of dollars): 2017 2016 Limited Liability Company John Deere Financial $ 102.2 Banco John Deere S.A. 54.5 Total Notes Receivable from John Deere $ 156.7 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Short-Term Borrowings | |
Short-Term Borrowings | Short-term borrowings of the Company at October 29, 2017 and October 30, 2016 consisted of the following (in millions of dollars): 2017 2016 Commercial paper and other notes payable $ 2,051.2 $ 386.4 Securitization borrowings 4,118.7 * 4,997.8 * John Deere 553.2 2,270.3 Current maturities of long-term borrowings 5,056.9 ** 4,509.3 ** Total $ 11,780.0 $ 12,163.8 * Includes unamortized debt issuance costs of $4.5 million and $4.9 million, respectively. ** Includes unamortized fair value adjustments related to interest rate swaps. Unamortized debt issuance costs were $1.6 million and $1.4 million, respectively. |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Long-Term Borrowings | |
Long-Term Borrowings | Long-term borrowings of the Company at October 29, 2017 and October 30, 2016 consisted of the following (in millions of dollars): 2017 2016 Senior Debt: Medium-term notes due 2018-2027 (principal $17,121.1 - 2017, $15,821.1 - 2016): $ 17,049.9 * $ 16,046.0 * Average interest rate of 2.0% - 2017, 1.7% - 2016 2.75% Senior notes due 2022 ($500.0 principal): 501.5 * 519.0 * Swapped $500.0 to variable interest rate of 2.0% - 2017, 1.6% - 2016 Other notes 30.8 11.3 Total senior debt 17,582.2 16,576.3 Unamortized debt discount and debt issuance costs (47.8) (39.8) Total ** $ 17,534.4 $ 16,536.5 * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year-end. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Income Taxes | |
Provision for Income Taxes by Taxing Jurisdiction and by Significant Component | The provision for income taxes by taxing jurisdiction and by significant component consisted of the following (in millions of dollars): 2017 2016 2015 Current: U.S.: Federal $ 50.0 $ (119.0) $ 119.1 State 3.1 4.4 5.4 Foreign 25.6 17.1 20.1 Total current 78.7 (97.5) 144.6 Deferred: U.S.: Federal 93.5 273.4 121.2 State .3 (.7) 1.7 Foreign (1.0) 5.1 2.4 Total deferred 92.8 277.8 125.3 Provision for income taxes $ 171.5 $ 180.3 $ 269.9 |
Comparison of Statutory and Effective Income Tax Provision | A comparison of the statutory and effective income tax provision and reasons for related differences follows (in millions of dollars): 2017 2016 2015 U.S. federal income tax provision at a statutory rate of 35 percent $ 174.6 $ 182.0 $ 268.4 Increase (decrease) resulting from: Tax rates on foreign earnings (6.8) (5.9) (6.0) Municipal lease income not taxable (1.3) (1.4) (1.4) State and local income taxes, net of federal income tax benefit 2.2 2.4 4.6 Other – net 2.8 3.2 4.3 Provision for income taxes $ 171.5 $ 180.3 $ 269.9 |
Analysis of Deferred Income Tax Assets and Liabilities | Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of deferred income tax assets and liabilities at October 29, 2017 and October 30, 2016 was as follows (in millions of dollars): 2017 2016 Deferred Deferred Deferred Deferred Tax Tax Tax Tax Assets Liabilities Assets Liabilities Lease transactions $ 898.4 $ 789.9 Tax over book depreciation 2.5 12.0 Deferred retail note finance income 4.6 5.4 Allowance for credit losses $ 54.5 $ 53.6 Accrual for retirement and other benefits 29.9 26.3 Tax loss and tax credit carryforwards 29.5 20.8 Federal taxes on deferred state tax deductions 14.5 14.6 Miscellaneous accruals and other 1.7 2.3 8.3 .2 Less valuation allowances (2.9) (1.8) Deferred income tax assets and liabilities $ 127.2 $ 907.8 $ 121.8 $ 807.5 |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at October 29, 2017, October 30, 2016, and November 1, 2015 was as follows (in millions of dollars): 2017 2016 2015 Beginning of year balance $ 36.5 $ 36.0 $ 36.2 Increases to tax positions taken during the current year 7.6 9.7 11.1 Increases to tax positions taken during prior years 1.2 1.1 1.6 Decreases to tax positions taken during prior years (5.9) (7.3) (7.8) Decreases due to lapse of statute of limitations (3.9) (3.0) (3.9) Settlements (1.1) Foreign exchange (.1) End of year balance $ 35.5 $ 36.5 $ 36.0 |
Other Income and Administrati44
Other Income and Administrative and Operating Expenses (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Other Income and Administrative and Operating Expenses | |
Schedule of major components of other income and administrative and operating expenses | The major components of other income and administrative and operating expenses were as follows (in millions of dollars): 2017 2016 2015 Other income – net Fees from John Deere $ 11.9 $ 6.5 $ 15.9 Fees from customers 31.0 27.5 21.4 Other 16.6 9.8 (4.9) Total $ 59.5 $ 43.8 $ 32.4 Administrative and operating expenses Compensation and benefits $ 241.1 $ 222.9 $ 231.4 Other 181.4 244.0 143.3 Total $ 422.5 $ 466.9 $ 374.7 |
Other Comprehensive Income It45
Other Comprehensive Income Items (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Other Comprehensive Income Items | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): 2017 2016 2015 Cumulative translation adjustment: Beginning of year balance $ (84.1) $ (60.4) $ 6.0 Current period activity 24.1 (23.7) (66.4) End of year balance $ (60.0) $ (84.1) $ (60.4) Unrealized gain (loss) on derivatives: Beginning of year balance $ .3 $ (2.7) $ (.6) Current period activity 3.9 3.0 (2.1) End of year balance $ 4.2 $ .3 $ (2.7) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss) and the income tax effects (in millions of dollars): Before Tax After Tax (Expense) Tax Amount Credit Amount 2017 Cumulative translation adjustment $ 24.1 $ 24.1 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 4.9 $ (1.7) 3.2 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 1.1 (.4) .7 Net unrealized gain (loss) on derivatives 6.0 (2.1) 3.9 Total other comprehensive income (loss) $ 30.1 $ (2.1) $ 28.0 2016 Cumulative translation adjustment $ (23.7) $ (23.7) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (.4) $ .1 (.3) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5.0 (1.7) 3.3 Net unrealized gain (loss) on derivatives 4.6 (1.6) 3.0 Total other comprehensive income (loss) $ (19.1) $ (1.6) $ (20.7) 2015 Cumulative translation adjustment $ (66.4) $ (66.4) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (11.9) $ 4.2 (7.7) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 8.6 (3.0) 5.6 Net unrealized gain (loss) on derivatives (3.3) 1.2 (2.1) Total other comprehensive income (loss) $ (69.7) $ 1.2 $ (68.5) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Fair Value Measurements | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Carrying Fair Carrying Fair Value Value * Value Value * Receivables financed – net $ 24,123.1 $ 24,016.0 $ 22,476.3 $ 22,429.5 Retail notes securitized – net 4,158.8 4,129.6 5,126.5 5,114.2 Securitization borrowings 4,118.7 4,118.4 4,997.8 5,004.9 Current maturities of long-term borrowings 5,056.9 5,080.6 4,509.3 4,530.0 Long-term borrowings 17,534.4 17,763.6 16,536.5 16,724.5 * Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at October 29, 2017 and October 30, 2016 at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): 2017 2016 Receivables from John Deere Derivatives: Interest rate contracts $ 85.4 $ 241.8 Cross-currency interest rate contracts 5.6 10.2 Other assets Derivatives: Interest rate contracts 8.1 35.3 Foreign exchange contracts 24.6 13.8 Total assets * $ 123.7 $ 301.1 Other payables to John Deere Derivatives: Interest rate contracts $ 125.6 $ 24.0 Cross-currency interest rate contracts .9 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 6.0 4.3 Total liabilities $ 132.5 $ 28.3 * Excluded from this table are the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring, Level 3 measurements from impairments at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): Fair Value Losses * 2017 2016 2017 2016 2015 Equipment on operating leases - net $ 654.4 $ 31.1 $ 10.3 Other assets 184.0 28.6 9.1 Total $ 838.4 $ 59.7 $ 19.4 * See Receivables with specific allowances in Note 5. Losses were not significant. See Note 7 for impairments on lease residual values. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Derivative Instruments | |
Fair Value Hedge Interest Rate Contracts and Underlying Borrowings | The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows (in millions of dollars): 2017 2016 Interest rate contracts * $ (273.9) $ 9.0 Borrowings ** 276.6 (10.6) * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $75.8 million and $142.1 million during 2017 and 2016, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $229.5 million and $276.8 million during 2017 and 2016, respectively. |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at October 29, 2017 and October 30, 2016 were as follows (in millions of dollars): 2017 2016 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 64.8 $ 226.0 Not designated as hedging instruments: Interest rate contracts 20.6 15.8 Cross-currency interest rate contracts 5.6 10.2 Total not designated 26.2 26.0 Other Assets Designated as hedging instruments: Interest rate contracts 7.0 34.7 Not designated as hedging instruments: Interest rate contracts 1.1 .6 Foreign exchange contracts 24.6 13.8 Total not designated 25.7 14.4 Total derivative assets $ 123.7 $ 301.1 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 107.2 $ 10.2 Not designated as hedging instruments: Interest rate contracts 18.4 13.8 Cross-currency interest rate contracts .9 Total not designated 19.3 13.8 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 6.0 4.3 Total not designated 6.0 4.3 Total derivative liabilities $ 132.5 $ 28.3 |
Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classifications and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following (in millions of dollars): Expense or OCI Classification 2017 2016 2015 Fair Value Hedges Interest rate contracts Interest expense $ (198.1) $ 151.1 $ 268.7 Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts OCI -pretax * 4.9 (.4) (11.9) Foreign exchange contracts OCI -pretax * Reclassified from OCI (Effective Portion): Interest rate contracts Interest expense * (1.1) (5.0) (8.6) Foreign exchange contracts Administrative and operating expenses * Recognized Directly in Income (Ineffective Portion) ** ** ** Not Designated as Hedges Interest rate contracts Interest expense * $ (2.6) $ (1.5) $ (8.2) Foreign exchange contracts Administrative and operating expenses * (79.2) 59.0 165.6 Total not designated $ (81.8) $ 57.5 $ 157.4 * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts were not significant. |
Impact on Derivative Assets and Liabilities for External Derivatives and those with John Deere Related to Netting Arrangements and Collateral | Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars): 2017 Derivatives: Gross Amounts Recognized Netting Arrangements Collateral Net Assets External $ 32.7 $ (.1) $ 32.6 John Deere 91.0 (65.9) 25.1 Liabilities External 6.0 (.1) 5.9 John Deere 126.5 (65.9) 60.6 2016 Derivatives: Gross Amounts Recognized Netting Arrangements Collateral Net Assets External $ 49.1 $ (1.1) $ 48.0 John Deere 252.0 (24.0) 228.0 Liabilities External 4.3 (1.1) 3.2 John Deere 24.0 (24.0) |
Geographic Area Information (Ta
Geographic Area Information (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Geographic Area Information | |
Schedule of Geographic Area Information | Geographic area information as of and for the years ended October 29, 2017, October 30, 2016, and November 1, 2015 is presented below (in millions of dollars): 2017 2016 2015 Revenues: U.S. $ 2,030.3 $ 1,899.3 $ 1,736.9 Outside the U.S. 196.7 194.9 214.8 Total $ 2,227.0 $ 2,094.2 $ 1,951.7 Operating profit: U.S. $ 407.6 $ 441.7 $ 681.6 Outside the U.S. 92.4 80.1 86.5 Total $ 500.0 $ 521.8 $ 768.1 Receivables: U.S. $ 24,189.6 $ 24,287.9 $ 25,779.4 Outside the U.S. 4,206.1 3,426.6 3,313.0 Total $ 28,395.7 $ 27,714.5 $ 29,092.4 |
Unconsolidated Affiliated Com49
Unconsolidated Affiliated Company (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Unconsolidated Affiliated Company | |
Unconsolidated Affiliated Company | Summarized financial information of the unconsolidated affiliated company for the years ended October 29, 2017, October 30, 2016, and November 1, 2015 was as follows (in millions of dollars): 2017 2016 2015 Operations: Total revenue $ 10.1 $ 10.7 $ 11.3 Net income 2.3 3.2 2.4 The Company’s equity in net income 1.2 1.6 1.2 2017 2016 Financial Position: Total assets $ 212.2 $ 200.9 Total external borrowings 176.8 168.1 Total net assets 27.6 23.7 The Company’s share of net assets 13.8 11.9 |
Supplemental Information (Una50
Supplemental Information (Unaudited) (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Supplemental Information (Unaudited) | |
Quarterly Financial Information | The Company’s fiscal year ends in October and its interim periods (quarters) end in January, April, and July. Supplemental quarterly information for the Company follows (in millions of dollars): First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year 2017: Revenues $ 522.4 $ 543.9 $ 571.8 $ 588.9 $ 2,227.0 Interest expense 115.1 127.1 130.1 148.8 521.1 Operating expenses 299.9 316.0 304.0 287.2 1,207.1 Provision for income taxes 33.6 36.6 49.7 51.6 171.5 Equity in income of unconsolidated affiliate .5 .3 .3 .1 1.2 Net income attributable to noncontrolling interests .1 .1 Net income attributable to the Company $ 74.2 $ 64.5 $ 88.3 $ 101.4 $ 328.4 2016: Revenues $ 487.2 $ 526.9 $ 538.6 $ 541.5 $ 2,094.2 Interest expense 89.6 105.6 109.8 117.1 422.1 Operating expenses 249.7 312.6 287.4 302.2 1,151.9 Provision for income taxes 48.9 39.3 51.2 40.9 180.3 Equity in income of unconsolidated affiliate .8 .2 .2 .4 1.6 Net loss attributable to noncontrolling interests (.1) (.1) Net income attributable to the Company $ 99.9 $ 69.6 $ 90.4 $ 81.7 $ 341.6 |
Organization and Consolidation
Organization and Consolidation (Details) | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Organization and Consolidation | |||
Fiscal year duration | 364 days | 364 days | 364 days |
Maximum portion of receivables guaranteed by related parties | |||
Maximum portion of receivables guaranteed by related parties (as a percent) | 5.00% | ||
Maximum portion of receivables serviced by related parties | |||
Maximum portion of receivables serviced by related parties (as a percent) | 5.00% |
Summary of Significant Accoun52
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Summary of Significant Accounting Policies | |||
Pretax net loss for foreign exchange | $ 8.1 | $ 13.9 | $ 19.7 |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
New accounting standards adopted | ||||
Debt issuance costs | $ 38.5 | |||
Operating Income (Loss) | $ 500 | $ 521.8 | $ 768.1 | |
ASU 2017-07 | If adopted | ||||
New accounting standards adopted | ||||
Operating Income (Loss) | $ (7.5) | |||
ASU 2017-07 | Forecasted Adjustment | ||||
New accounting standards adopted | ||||
Operating Income (Loss) | $ (7.9) |
Receivables - Retail Notes (Det
Receivables - Retail Notes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Receivables, by Product Category | |||
Total receivables | $ 28,395.7 | $ 27,714.5 | $ 29,092.4 |
Retail notes | |||
Receivables, by Product Category | |||
Total receivables | $ 17,214.6 | $ 17,468.2 | $ 18,659 |
Average original term of receivables | 56 months | 55 months | 55 months |
Average actual life of receivables | 40 months | 37 months | 33 months |
Retail notes | Agriculture and turf | |||
Receivables, by Product Category | |||
Total receivables | $ 14,642.8 | $ 14,965.8 | |
Retail notes | Construction and forestry | |||
Receivables, by Product Category | |||
Total receivables | 2,571.8 | 2,502.4 | |
Retail notes | Unrestricted | |||
Receivables, by Product Category | |||
Receivables, Gross | 13,530.2 | 12,727.5 | |
Unearned finance income | (487.9) | (400.5) | |
Total receivables | 13,042.3 | 12,327 | |
Retail notes | Unrestricted | Agriculture and turf | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 7,300.4 | 6,683.4 | |
Retail notes | Unrestricted | Agriculture and turf | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 4,179 | 4,093.1 | |
Retail notes | Unrestricted | Construction and forestry | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 1,731.3 | 1,669.4 | |
Retail notes | Unrestricted | Construction and forestry | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 319.5 | 281.6 | |
Retail notes | Securitized | |||
Receivables, by Product Category | |||
Receivables, Gross | 4,250.1 | 5,234.7 | |
Unearned finance income | (77.8) | (93.5) | |
Total receivables | 4,172.3 | 5,141.2 | |
Retail notes | Securitized | Agriculture and turf | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 1,554.1 | 1,983.7 | |
Retail notes | Securitized | Agriculture and turf | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 2,097.4 | 2,631.1 | |
Retail notes | Securitized | Construction and forestry | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 521.6 | 544.3 | |
Retail notes | Securitized | Construction and forestry | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | $ 77 | $ 75.6 |
Receivables - Retail Note Insta
Receivables - Retail Note Installments (Details) - Retail notes - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Unrestricted | ||
Receivable Installments, Due in Months: | ||
Receivables, due in 0 - 12 months | $ 4,424.7 | $ 4,224.6 |
Receivables, due in 13 - 24 months | 3,405.6 | 3,258.3 |
Receivables, due in 25 - 36 months | 2,651.4 | 2,503.7 |
Receivables, due in 37 - 48 months | 1,819.5 | 1,665 |
Receivables, due in 49 - 60 months | 992.5 | 869.4 |
Receivables, Over 60 months | 236.5 | 206.5 |
Receivables, Gross | 13,530.2 | 12,727.5 |
Securitized | ||
Receivable Installments, Due in Months: | ||
Receivables, due in 0 - 12 months | 2,027.6 | 2,268.6 |
Receivables, due in 13 - 24 months | 1,256.1 | 1,535.5 |
Receivables, due in 25 - 36 months | 671.8 | 931.3 |
Receivables, due in 37 - 48 months | 242.8 | 407.8 |
Receivables, due in 49 - 60 months | 50.2 | 84.2 |
Receivables, Over 60 months | 1.6 | 7.3 |
Receivables, Gross | $ 4,250.1 | $ 5,234.7 |
Receivables - Down Payment and
Receivables - Down Payment and Contract Terms (Details) - Retail notes | 12 Months Ended |
Oct. 29, 2017 | |
Agriculture and turf | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Down Payment (as a percent) | 10.00% |
Monthly payments - Down Payment (as a percent) | 10.00% |
Seasonal payments - Contract Terms | 3 years |
Monthly payments - Contract Terms | 36 months |
Receivables - Other Disclosures | |
Percentage of balances outstanding used to determine excess withholdings to be remitted to dealers | 0.50% |
Agriculture and turf | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Down Payment (as a percent) | 30.00% |
Monthly payments - Down Payment (as a percent) | 20.00% |
Seasonal payments - Contract Terms | 7 years |
Monthly payments - Contract Terms | 84 months |
Receivables - Other Disclosures | |
Percentage of balances outstanding used to determine excess withholdings to be remitted to dealers | 3.00% |
Construction and forestry | New | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Down Payment (as a percent) | 10.00% |
Construction and forestry | New | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 48 months |
Construction and forestry | New | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 60 months |
Construction and forestry | Used | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Down Payment (as a percent) | 15.00% |
Construction and forestry | Used | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 36 months |
Construction and forestry | Used | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 48 months |
Receivables - Other (Details)
Receivables - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Receivables - Other Disclosures | |||
Total receivables | $ 28,395.7 | $ 27,714.5 | $ 29,092.4 |
Retail notes | |||
Receivables - Other Disclosures | |||
Average effective yield on Retail Notes Receivable (as a percent) | 4.10% | 3.90% | 3.90% |
Total receivables | $ 17,214.6 | $ 17,468.2 | $ 18,659 |
Retail notes | John Deere | |||
Receivables - Other Disclosures | |||
Portion of finance income earned on retail notes receivable containing waiver of finance charges or reduced rates (as a percent) | 34.00% | 30.00% | 26.00% |
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 236.4 | $ 211 | $ 184.9 |
Revolving charge accounts | |||
Receivables - Other Disclosures | |||
Total receivables | 3,572.6 | 3,078.5 | 2,680.8 |
Revolving charge accounts | John Deere | |||
Receivables - Other Disclosures | |||
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 13.6 | 11.3 | 11.4 |
Wholesale receivables | |||
Receivables - Other Disclosures | |||
Term that the average term for wholesale notes is less than | 12 months | ||
Total receivables | $ 6,894.3 | 6,562.5 | 7,185.5 |
Wholesale receivables | John Deere | |||
Receivables - Other Disclosures | |||
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 225.5 | $ 209.7 | $ 196.9 |
Wholesale receivables | Minimum | |||
Receivables - Other Disclosures | |||
Interest-free periods granted at the time of sale to dealer | 1 month | ||
Wholesale receivables | Maximum | |||
Receivables - Other Disclosures | |||
Interest-free periods granted at the time of sale to dealer | 12 months |
Receivables - Financing Leases
Receivables - Financing Leases Receivable (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 |
Financing Leases Receivable | |||
Total Receivables | $ 28,395.7 | $ 27,714.5 | $ 29,092.4 |
Financing leases | |||
Financing Leases Receivable | |||
Receivables, Gross | 560.1 | 524.5 | |
Estimated residual values | 222.3 | 136.2 | |
Unearned finance income | (68.2) | (55.4) | |
Total Receivables | 714.2 | 605.3 | |
Financing leases | Agriculture and turf | |||
Financing Leases Receivable | |||
Receivables, Gross | 408.4 | 351.2 | |
Total Receivables | 567.5 | 432.1 | |
Financing leases | Construction and forestry | |||
Financing Leases Receivable | |||
Receivables, Gross | 151.7 | 173.3 | |
Total Receivables | $ 146.7 | $ 173.2 |
Receivables - Scheduled Payment
Receivables - Scheduled Payments on Financing Leases (Details) - Financing leases - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Gross Receivable Installments | |||
Receivables, due in 0 - 12 months | $ 216 | $ 208.4 | |
Receivables, due in 13 - 24 months | 147.5 | 147.6 | |
Receivables, due in 25 - 36 months | 106.8 | 88.9 | |
Receivables, due in 37 - 48 months | 59.4 | 52.2 | |
Receivables, Over 48 months | 30.4 | 27.4 | |
Receivables, Gross | 560.1 | 524.5 | |
John Deere | |||
Receivables - Other Disclosures | |||
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 3 | $ 2.3 | $ 2 |
Minimum | |||
Financing Leases Receivable | |||
Initial lease terms of financing leases | 4 months | ||
Maximum | |||
Financing Leases Receivable | |||
Initial lease terms of financing leases | 60 months |
Allowance for Credit Losses a60
Allowance for Credit Losses and Credit Quality of Receivables - Past Due Age Analysis (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Receivable, Past Due | |||
Minimum number of days for a receivable to be considered past due | 30 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 402 | $ 401.3 | |
Total Non-Performing | 107.8 | 124.2 | |
Current | 27,885.9 | 27,189 | |
Total Receivables | 28,395.7 | 27,714.5 | $ 29,092.4 |
30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 211.5 | 212.3 | |
60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 97.2 | 95.1 | |
90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 93.3 | 93.9 | |
Retail notes | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 17,214.6 | 17,468.2 | 18,659 |
Retail notes | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 199.8 | 216.9 | |
Total Non-Performing | 63.1 | 90.2 | |
Current | 14,379.9 | 14,658.7 | |
Total Receivables | 14,642.8 | 14,965.8 | |
Retail notes | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 106.2 | 106.3 | |
Retail notes | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 48.3 | 51 | |
Retail notes | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 45.3 | 59.6 | |
Retail notes | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 144.1 | 131.1 | |
Total Non-Performing | 24.2 | 23.7 | |
Current | 2,403.5 | 2,347.6 | |
Total Receivables | 2,571.8 | 2,502.4 | |
Retail notes | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 73 | 73.6 | |
Retail notes | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 31.9 | 32.4 | |
Retail notes | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 39.2 | 25.1 | |
Revolving charge accounts | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 3,572.6 | 3,078.5 | 2,680.8 |
Revolving charge accounts | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 23.3 | 18.5 | |
Total Non-Performing | 1.8 | 1.3 | |
Current | 3,458.7 | 2,979.2 | |
Total Receivables | 3,483.8 | 2,999 | |
Revolving charge accounts | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 15.4 | 12.9 | |
Revolving charge accounts | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 5.6 | 3.5 | |
Revolving charge accounts | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.3 | 2.1 | |
Revolving charge accounts | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 4.3 | 3.5 | |
Current | 84.5 | 76 | |
Total Receivables | 88.8 | 79.5 | |
Revolving charge accounts | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.9 | 2.4 | |
Revolving charge accounts | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.1 | 0.7 | |
Revolving charge accounts | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.3 | 0.4 | |
Wholesale receivables | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 60 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 6,894.3 | 6,562.5 | $ 7,185.5 |
Wholesale receivables | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 8.5 | 8.3 | |
Total Non-Performing | 10.8 | 0.3 | |
Current | 5,469.6 | 5,530.7 | |
Total Receivables | 5,488.9 | 5,539.3 | |
Wholesale receivables | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 4.5 | 5.5 | |
Wholesale receivables | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.6 | 1.3 | |
Wholesale receivables | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.4 | 1.5 | |
Wholesale receivables | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.3 | 1.4 | |
Current | 1,405.1 | 1,021.8 | |
Total Receivables | 1,405.4 | 1,023.2 | |
Wholesale receivables | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.1 | ||
Wholesale receivables | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.1 | ||
Wholesale receivables | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.1 | 1.4 | |
Financing leases | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 714.2 | 605.3 | |
Financing leases | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 20 | 17 | |
Total Non-Performing | 6.2 | 6.1 | |
Current | 541.3 | 409 | |
Total Receivables | 567.5 | 432.1 | |
Financing leases | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 8.9 | 8.8 | |
Financing leases | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 7.5 | 4.6 | |
Financing leases | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.6 | 3.6 | |
Financing leases | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.7 | 4.6 | |
Total Non-Performing | 1.7 | 2.6 | |
Current | 143.3 | 166 | |
Total Receivables | 146.7 | 173.2 | |
Financing leases | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.5 | 2.8 | |
Financing leases | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.1 | 1.6 | |
Financing leases | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.1 | $ 0.2 |
Allowance for Credit Losses a61
Allowance for Credit Losses and Credit Quality of Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Allowance: | |||
Beginning of year balance | $ 111.7 | $ 109.8 | $ 112.4 |
Provision for credit losses | 70.3 | 68.8 | 32.3 |
Write-offs | (96.3) | (91.3) | (55.9) |
Recoveries | 28 | 24.9 | 22.6 |
Translation adjustments | 0.1 | (0.5) | (1.6) |
End of year balance | 113.8 | 111.7 | 109.8 |
Balance individually evaluated | 3.2 | 2.6 | 1.2 |
Receivables: | |||
End of year balance | 28,395.7 | 27,714.5 | 29,092.4 |
Balance individually evaluated | 72.1 | 54.3 | 32.1 |
Retail notes | |||
Allowance: | |||
Beginning of year balance | 56.3 | 53.3 | 56.1 |
Provision for credit losses | 29.7 | 27.3 | 9.4 |
Write-offs | (38.2) | (29.9) | (17.8) |
Recoveries | 7.8 | 5.8 | 6.5 |
Translation adjustments | 0.1 | (0.2) | (0.9) |
End of year balance | 55.7 | 56.3 | 53.3 |
Balance individually evaluated | 0.6 | 2.3 | |
Receivables: | |||
End of year balance | 17,214.6 | 17,468.2 | 18,659 |
Balance individually evaluated | 41 | 44.5 | 20.2 |
Revolving charge accounts | |||
Allowance: | |||
Beginning of year balance | 39.7 | 39.7 | 39.9 |
Provision for credit losses | 32.3 | 35.8 | 20.7 |
Write-offs | (52.2) | (54.3) | (36.2) |
Recoveries | 19.9 | 18.5 | 15.3 |
End of year balance | 39.7 | 39.7 | 39.7 |
Receivables: | |||
End of year balance | 3,572.6 | 3,078.5 | 2,680.8 |
Balance individually evaluated | 3.1 | 8.4 | 0.2 |
Wholesale receivables | |||
Allowance: | |||
Beginning of year balance | 7.2 | 8.1 | 7.6 |
Provision for credit losses | 3 | 3.1 | 0.6 |
Write-offs | (0.2) | (4.1) | (0.3) |
Recoveries | 0.1 | 0.6 | |
Translation adjustments | (0.1) | (0.4) | |
End of year balance | 9.9 | 7.2 | 8.1 |
Balance individually evaluated | 2.6 | 0.2 | 1 |
Receivables: | |||
End of year balance | 6,894.3 | 6,562.5 | 7,185.5 |
Balance individually evaluated | 24 | 0.8 | 10.9 |
Financing leases | |||
Allowance: | |||
Write-offs | (5.7) | (3) | (1.6) |
Recoveries | 0.3 | 0.5 | 0.2 |
Receivables: | |||
End of year balance | 714.2 | 605.3 | |
Other | |||
Allowance: | |||
Beginning of year balance | 8.5 | 8.7 | 8.8 |
Provision for credit losses | 5.3 | 2.6 | 1.6 |
Write-offs | (5.7) | (3) | (1.6) |
Recoveries | 0.3 | 0.5 | 0.2 |
Translation adjustments | 0.1 | (0.3) | (0.3) |
End of year balance | 8.5 | 8.5 | 8.7 |
Balance individually evaluated | 0.1 | 0.2 | |
Receivables: | |||
End of year balance | 714.2 | 605.3 | 567.1 |
Balance individually evaluated | $ 4 | $ 0.6 | $ 0.8 |
Allowance for Credit Losses a62
Allowance for Credit Losses and Credit Quality of Receivables - Other (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Additional Receivable Disclosures | ||
Investment in non-performing Receivables | $ 107.8 | $ 124.2 |
Total non-performing Receivables as a percentage of Receivables outstanding | 0.38% | 0.45% |
Minimum number of days for a receivable to be considered past due | 30 days | |
Total Receivables 30 days or more past due and still accruing finance income | $ 402 | $ 401.3 |
Total past due amounts as a percentage of total Receivables outstanding | 1.42% | 1.45% |
Allowance for credit losses as a percentage of total Receivables outstanding | 0.40% | 0.40% |
Deposits primarily withheld from John Deere dealers and merchants available for potential credit losses | $ 129.1 | $ 138.1 |
Allowance for Credit Losses a63
Allowance for Credit Losses and Credit Quality of Receivables - Impaired Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Recorded Investment | ||
Receivables with specific allowance | $ 13.9 | $ 10.9 |
Receivables without specific allowance | 27.3 | 9.7 |
Total | 41.2 | 20.6 |
Unpaid Principal Balance | ||
Receivables with specific allowance | 13.8 | 10.5 |
Receivables without specific allowance | 27 | 9.6 |
Total | 40.8 | 20.1 |
Specific Allowance | 3.2 | 2.6 |
Average Recorded Investment | ||
Receivables with specific allowance | 13.2 | 12.5 |
Receivables without specific allowance | 16.3 | 10.9 |
Total | 29.5 | 23.4 |
Agriculture and turf | ||
Recorded Investment | ||
Total | 36 | 11.9 |
Unpaid Principal Balance | ||
Total | 35.6 | 11.6 |
Specific Allowance | 3.2 | 1.9 |
Average Recorded Investment | ||
Total | 23.9 | 10.2 |
Construction and forestry | ||
Recorded Investment | ||
Total | 5.2 | 8.7 |
Unpaid Principal Balance | ||
Total | 5.2 | 8.5 |
Specific Allowance | 0.7 | |
Average Recorded Investment | ||
Total | 5.6 | 13.2 |
Retail notes | ||
Recorded Investment | ||
Receivables with specific allowance | 2.2 | 10.2 |
Receivables without specific allowance | 18.3 | 9.5 |
Unpaid Principal Balance | ||
Receivables with specific allowance | 2.1 | 9.9 |
Receivables without specific allowance | 18 | 9.4 |
Specific Allowance | 0.6 | 2.3 |
Average Recorded Investment | ||
Receivables with specific allowance | 2.2 | 10.6 |
Receivables without specific allowance | 14 | 10.6 |
Wholesale receivables | ||
Recorded Investment | ||
Receivables with specific allowance | 11.7 | 0.3 |
Receivables without specific allowance | 9 | 0.2 |
Unpaid Principal Balance | ||
Receivables with specific allowance | 11.7 | 0.3 |
Receivables without specific allowance | 9 | 0.2 |
Specific Allowance | 2.6 | 0.2 |
Average Recorded Investment | ||
Receivables with specific allowance | 11 | 1.5 |
Receivables without specific allowance | $ 2.3 | 0.3 |
Financing leases | ||
Recorded Investment | ||
Receivables with specific allowance | 0.4 | |
Unpaid Principal Balance | ||
Receivables with specific allowance | 0.3 | |
Specific Allowance | 0.1 | |
Average Recorded Investment | ||
Receivables with specific allowance | $ 0.4 |
Allowance for Credit Losses a64
Allowance for Credit Losses and Credit Quality of Receivables - Troubled Debt Restructurings (Details) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017USD ($)item | Oct. 30, 2016USD ($)item | Nov. 01, 2015USD ($)item | |
Receivables Related to Troubled Debt Restructurings | |||
Receivable contracts in troubled debt restructuring, number | item | 424 | 150 | 106 |
Receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 14 | $ 5 | $ 3.1 |
Receivables in troubled debt restructurings, aggregate balances, post-modification | 12.6 | $ 4 | $ 2.4 |
Receivable contracts in troubled debt restructuring, subsequently defaulted | 2 | ||
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
Allowance for Credit Losses a65
Allowance for Credit Losses and Credit Quality of Receivables - Write-offs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Dollars | |||
Total write-offs | $ (96.3) | $ (91.3) | $ (55.9) |
Total recoveries | 28 | 24.9 | 22.6 |
Total net write-offs | $ (68.3) | $ (66.4) | $ (33.3) |
Percent | |||
Total write-offs (as a percent) | (0.35%) | (0.32%) | (0.19%) |
Total recoveries (as a percent) | 0.10% | 0.09% | 0.08% |
Total net write-offs (as a percent) | (0.25%) | (0.23%) | (0.11%) |
Retail notes | |||
Dollars | |||
Total write-offs | $ (38.2) | $ (29.9) | $ (17.8) |
Total recoveries | $ 7.8 | $ 5.8 | $ 6.5 |
Percent | |||
Total write-offs (as a percent) | (0.23%) | (0.17%) | (0.10%) |
Total recoveries (as a percent) | 0.05% | 0.03% | 0.03% |
Retail notes | Agriculture and turf | |||
Dollars | |||
Total write-offs | $ (17) | $ (10.5) | $ (9.5) |
Total recoveries | $ 5.8 | $ 4.3 | $ 4.7 |
Percent | |||
Total write-offs (as a percent) | (0.12%) | (0.07%) | (0.06%) |
Total recoveries (as a percent) | 0.04% | 0.03% | 0.03% |
Retail notes | Construction and forestry | |||
Dollars | |||
Total write-offs | $ (21.2) | $ (19.4) | $ (8.3) |
Total recoveries | $ 2 | $ 1.5 | $ 1.8 |
Percent | |||
Total write-offs (as a percent) | (0.85%) | (0.79%) | (0.35%) |
Total recoveries (as a percent) | 0.08% | 0.06% | 0.08% |
Revolving charge accounts | |||
Dollars | |||
Total write-offs | $ (52.2) | $ (54.3) | $ (36.2) |
Total recoveries | $ 19.9 | $ 18.5 | $ 15.3 |
Percent | |||
Total write-offs (as a percent) | (1.76%) | (2.13%) | (1.58%) |
Total recoveries (as a percent) | 0.68% | 0.73% | 0.68% |
Wholesale receivables | |||
Dollars | |||
Total write-offs | $ (0.2) | $ (4.1) | $ (0.3) |
Total recoveries | $ 0.1 | $ 0.6 | |
Percent | |||
Total write-offs (as a percent) | (0.05%) | ||
Total recoveries (as a percent) | 0.01% | ||
Financing leases | |||
Dollars | |||
Total write-offs | (5.7) | $ (3) | $ (1.6) |
Total recoveries | $ 0.3 | $ 0.5 | $ 0.2 |
Percent | |||
Total write-offs (as a percent) | (0.92%) | (0.54%) | (0.29%) |
Total recoveries (as a percent) | 0.05% | 0.09% | 0.04% |
Securitization of Receivables66
Securitization of Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Securitization of Receivables | ||
Unconsolidated conduits, carrying value of liabilities | $ 1,096.3 | |
Unconsolidated conduits, maximum exposure to loss | 1,155.1 | |
Retail notes securitized | 4,172.3 | $ 5,141.2 |
Allowance for credit losses - securitization transactions | (13.5) | (14.7) |
Other assets - securitization transactions | 105.2 | 115.7 |
Total restricted securitized assets - securitization transactions | 4,264 | 5,242.2 |
Securitization borrowings | 4,118.7 | 4,997.8 |
Accrued interest on borrowings - securitization transactions | 2.8 | 2.6 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,121.5 | 5,000.4 |
Maximum remaining term of all restricted receivables | 5 years | |
VIE-Primary Beneficiary | ||
Securitization of Receivables | ||
Total restricted securitized assets - securitization transactions | $ 2,630.5 | 2,717.6 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,571.1 | 2,655.1 |
Non-VIE Banking Operation | ||
Securitization of Receivables | ||
Total restricted securitized assets - securitization transactions | 478.4 | 663.6 |
Total liabilities related to restricted securitized assets - securitization transactions | 454.1 | 616.5 |
VIE-Not Primary Beneficiary | ||
Securitization of Receivables | ||
Total assets | 39,600 | |
Total restricted securitized assets - securitization transactions | 1,155.1 | 1,861 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,096.3 | $ 1,728.8 |
Equipment on Operating Leases67
Equipment on Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Equipment on Operating Leases | |||
Impairment losses on operating leases | $ 0 | $ 31.1 | $ 10.3 |
Total | 5,783.5 | 5,261 | |
Accumulated depreciation | (1,065.2) | (864.8) | |
Equipment on operating leases - net | 4,718.3 | 4,396.2 | |
Deposits withheld from John Deere dealers available for potential losses on residual values | 51.9 | 67.8 | |
Due in: | |||
0-12 months | 581 | 573 | |
13-24 months | 354.4 | 342.7 | |
25-36 months | 165.8 | 151.2 | |
37-48 months | 71 | 62.6 | |
Over 48 months | 9.8 | 10.1 | |
Total | 1,182 | 1,139.6 | |
Impairment losses on matured operating lease inventory | $ 0 | 28.6 | 9.1 |
Minimum payment default period | 30 days | ||
Past due balances of operating leases | $ 76 | 97.8 | |
John Deere | Operating Leases | |||
Equipment on Operating Leases | |||
Operating lease revenue | $ 30.9 | 28.7 | $ 20.7 |
Minimum | |||
Equipment on Operating Leases | |||
Initial lease terms, operating | 12 months | ||
Maximum | |||
Equipment on Operating Leases | |||
Initial lease terms, operating | 60 months | ||
Agriculture and turf | |||
Equipment on Operating Leases | |||
Total | $ 4,418.6 | 3,924.3 | |
Construction and forestry | |||
Equipment on Operating Leases | |||
Total | $ 1,364.9 | $ 1,336.7 |
Notes Receivable from John De68
Notes Receivable from John Deere (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
John Deere | |||
Notes Receivable from John Deere | |||
Maximum terms for related party notes receivable | 4 years | ||
Interest earned | $ 3.4 | $ 0 | $ 0 |
Notes receivable from John Deere | 156.7 | ||
Limited Liability Company John Deere Financial | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | 102.2 | ||
Banco John Deere S.A. | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | $ 54.5 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Short-Term Borrowings | ||
Commercial paper and other notes payable | $ 2,051.2 | $ 386.4 |
Securitization borrowings | 4,118.7 | 4,997.8 |
John Deere | 553.2 | 2,270.3 |
Current maturities of long-term borrowings | 5,056.9 | 4,509.3 |
Total short-term borrowings | $ 11,780 | $ 12,163.8 |
Payment Schedule for Securitization Borrowings Based on Expected Liquidation of Retail Notes | ||
Weighted-average interest rate on total short-term borrowings, excluding current maturities of long-term borrowings (as a percent) | 1.70% | 1.20% |
Securitization Borrowings | ||
Short-Term Borrowings | ||
Unamortized debt issuance costs | $ 4.5 | $ 4.9 |
Payment Schedule for Securitization Borrowings Based on Expected Liquidation of Retail Notes | ||
Total payments for securitization borrowings | 4,118.7 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2018 | 2,233.8 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2019 | 1,248.9 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2020 | 488.8 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2021 | 146.4 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2022 | 5.3 | |
Current Maturities of Long-term Borrowings | ||
Short-Term Borrowings | ||
Unamortized debt issuance costs | $ 1.6 | $ 1.4 |
Short-Term Borrowings - Other (
Short-Term Borrowings - Other (Details) $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($) | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 7,558 |
Lines of credit unused | $ 4,060.7 |
Consolidated ratio of earnings to fixed charges required by the credit agreements, minimum at the end of each fiscal quarter | 1.05 |
Ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder's equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of any fiscal quarter | 11 |
Deere & Company | |
Agreement with Deere & Company | |
Minimum ownership percentage by Deere & Company in Capital Corporation capital stock | 51.00% |
Minimum consolidated tangible net worth of Capital Corporation to be maintained by Deere & Company | $ 50 |
Minimum ratio of earnings to fixed charges of Capital Corporation to be maintained by Deere & Company | 1.05 |
364-Day Credit Facilities Expiring February, 2018 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 1,750 |
364-Day Credit Facilities Expiring October, 2018 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 750 |
Line of Credit Facilities Expiring April, 2021 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 2,500 |
Line of Credit Facilities Expiring April, 2022 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 2,500 |
Long-Term Borrowings (Details)
Long-Term Borrowings (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Long-Term Borrowings | ||
Total senior debt | $ 17,582.2 | $ 16,576.3 |
Unamortized debt discount and debt issuance costs | (47.8) | (39.8) |
Total | 17,534.4 | 16,536.5 |
Principal Amounts of Long-Term Borrowings Maturing in Each of Next Five Years | ||
2,018 | 5,043.8 | |
2,019 | 4,582.7 | |
2,020 | 4,129.2 | |
2,021 | 2,047.7 | |
2,022 | 2,943.7 | |
Medium-term notes due 2018-2027 | ||
Long-Term Borrowings | ||
Total senior debt | 17,049.9 | 16,046 |
Principal amount | $ 17,121.1 | $ 15,821.1 |
Average interest rates (as a percent) | 2.00% | 1.70% |
2.75% Senior notes due 2022 | ||
Long-Term Borrowings | ||
Total senior debt | $ 501.5 | $ 519 |
Debt instrument, stated interest rate (as a percent) | 2.75% | 2.75% |
Principal amount | $ 500 | $ 500 |
Portion of debt swapped to variable interest rates, amount | $ 500 | $ 500 |
Variable interest rates, debt swaps (as a percent) | 2.00% | 1.60% |
Other notes | ||
Long-Term Borrowings | ||
Total senior debt | $ 30.8 | $ 11.3 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Leases | |||
Total rental expense for operating leases | $ 2.1 | $ 1.9 | $ 2.2 |
Operating Leases, Future Minimum Lease Payments | |||
Future minimum lease payments under operating leases | 6.5 | ||
2,018 | 1.7 | ||
2,019 | 1.3 | ||
2,020 | 1 | ||
2,021 | 0.8 | ||
2,022 | 0.8 | ||
Later years | $ 0.9 |
Capital Stock (Details)
Capital Stock (Details) - $ / shares | Oct. 29, 2017 | Oct. 30, 2016 |
Capital Stock | ||
Number of shares of preferred stock authorized, but not issued | 10,000 | 10,000 |
Par value of preferred stock (in dollars per share) | $ 1 | $ 1 |
Dividends (Details)
Dividends (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Dividends | |||
Cash dividends declared and paid to JDFS | $ 285 | $ 485 | $ 485 |
Pension and Other Postretirem75
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Defined contribution plans related to employee investment and savings primarily in the U.S. | |||
Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 12 | $ 12.2 | $ 12.4 |
Pensions | |||
Defined Benefit Plan Disclosure | |||
Expenses related to defined benefit plans | 5.5 | 5.7 | 9.7 |
Health Care and Life Insurance | |||
Defined Benefit Plan Disclosure | |||
Expenses related to defined benefit plans | $ 2.9 | $ 2.4 | $ 3.7 |
Stock Option and Restricted S76
Stock Option and Restricted Stock Awards (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Stock Option and Restricted Stock Awards | |||
Total share-based compensation expense | $ 6.4 | $ 5.7 | $ 5.7 |
Income tax benefit recognized in net income | $ 2.4 | $ 2.1 | $ 2.1 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes and Statutory and Effective (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Current: | |||||||||||
U.S. - Federal | $ 50 | $ (119) | $ 119.1 | ||||||||
U.S. - State | 3.1 | 4.4 | 5.4 | ||||||||
Foreign | 25.6 | 17.1 | 20.1 | ||||||||
Total current | 78.7 | (97.5) | 144.6 | ||||||||
Deferred: | |||||||||||
U.S. - Federal | 93.5 | 273.4 | 121.2 | ||||||||
U.S. - State | 0.3 | (0.7) | 1.7 | ||||||||
Foreign | (1) | 5.1 | 2.4 | ||||||||
Total deferred | 92.8 | 277.8 | 125.3 | ||||||||
Provision for income taxes | $ 51.6 | $ 49.7 | $ 36.6 | $ 33.6 | $ 40.9 | $ 51.2 | $ 39.3 | $ 48.9 | $ 171.5 | $ 180.3 | $ 269.9 |
Comparison of the Statutory and Effective Income Tax Provision | |||||||||||
U.S. federal income tax provision statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | ||||||||
U.S. federal income tax provision at a statutory rate of 35 percent | $ 174.6 | $ 182 | $ 268.4 | ||||||||
Increase (Decrease) Resulting from: | |||||||||||
Tax rates on foreign earnings | (6.8) | (5.9) | (6) | ||||||||
Municipal lease income not taxable | (1.3) | (1.4) | (1.4) | ||||||||
State and local income taxes, net of federal income tax benefit | 2.2 | 2.4 | 4.6 | ||||||||
Other - net | 2.8 | 3.2 | 4.3 | ||||||||
Provision for income taxes | 51.6 | $ 49.7 | $ 36.6 | $ 33.6 | $ 40.9 | $ 51.2 | $ 39.3 | $ 48.9 | 171.5 | $ 180.3 | $ 269.9 |
Accumulated earnings of certain subsidiaries outside the U.S. for which no provision for U.S. income or foreign withholding taxes has been made | 379.1 | 379.1 | |||||||||
Provision for income and withholding taxes on accumulated earnings in certain subsidiaries outside the U.S. | 0 | 0 | |||||||||
Cash and cash equivalents held by foreign subsidiaries | $ 150 | $ 150 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Deferred Tax Assets | ||
Allowance for credit losses | $ 54.5 | $ 53.6 |
Accrual for retirement and other benefits | 29.9 | 26.3 |
Tax loss and tax credit carryforwards | 29.5 | 20.8 |
Federal taxes on deferred state tax deductions | 14.5 | 14.6 |
Miscellaneous accruals and other | 1.7 | 8.3 |
Less valuation allowances | (2.9) | (1.8) |
Deferred income tax assets | 127.2 | 121.8 |
Deferred Tax Liabilities | ||
Lease transactions | 898.4 | 789.9 |
Tax over book depreciation | 2.5 | 12 |
Deferred retail note finance income | 4.6 | 5.4 |
Miscellaneous accruals and other | 2.3 | 0.2 |
Deferred income tax liabilities | 907.8 | $ 807.5 |
Additional Deferred income Tax Information | ||
Tax loss and tax credit carryforwards, expiring from 2018 through 2037 | 24.2 | |
Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 5.3 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
Beginning of year balance | $ 36.5 | $ 36 | $ 36.2 |
Increases to tax positions taken during the current year | 7.6 | 9.7 | 11.1 |
Increases to tax positions taken during prior years | 1.2 | 1.1 | 1.6 |
Decreases to tax positions taken during prior years | (5.9) | (7.3) | (7.8) |
Decreases due to lapse of statute of limitations | (3.9) | (3) | (3.9) |
Settlements | (1.1) | ||
Foreign exchange | (0.1) | ||
End of year balance | 35.5 | 36.5 | 36 |
Unrecognized tax benefits affecting effective tax rate if recognized | 18 | 19 | |
Total amount of expense from interest and penalties | 0.6 | 1.8 | $ 1.4 |
Accrued interest and penalties on income tax | $ 17.4 | $ 16.8 |
Other Income and Administrati80
Other Income and Administrative and Operating Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Other income - net | |||
Fees from John Deere | $ 11.9 | $ 6.5 | $ 15.9 |
Fees from customers | 31 | 27.5 | 21.4 |
Other | 16.6 | 9.8 | (4.9) |
Total | 59.5 | 43.8 | 32.4 |
Administrative and operating expenses | |||
Compensation and benefits | 241.1 | 222.9 | 231.4 |
Other | 181.4 | 244 | 143.3 |
Total | $ 422.5 | $ 466.9 | $ 374.7 |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Cash Flow Information | |||
Cash payments for interest | $ 531.7 | $ 421.4 | $ 308.3 |
Cash payments (receipts) for income taxes | $ 48.5 | $ (80.6) | $ 134.5 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($) | |
John Deere Financial Inc. | Guarantees of debt and derivatives | Commercial paper | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 475 |
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 20 |
Notional amount | 1,786.7 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | |
Guarantee Obligations | |
Carrying value of assets or liabilities related to JDCFI | 0 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 2,024.1 |
Weighted average interest rate (as a percent) | 2.10% |
Maximum remaining maturity | 5 years |
Commitments and Contingencies83
Commitments and Contingencies - Commitments (Details) $ in Millions | Oct. 29, 2017USD ($) |
Commitments | |
Restricted other assets | $ 40 |
Limited Liability Company John Deere Financial | |
Commitments | |
Unused commitments | 38.9 |
John Deere dealers | |
Commitments | |
Unused commitments | 8,900 |
Customers | |
Commitments | |
Unused commitments | $ 26,700 |
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts | 95.00% |
Other Comprehensive Income It84
Other Comprehensive Income Items - After-Tax Changes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | $ 3,585.7 | $ 3,749.8 | $ 3,805.1 |
Current period activity | 28 | (20.7) | (68.5) |
Balance | 3,657.2 | 3,585.7 | 3,749.8 |
Cumulative Translation Adjustment | |||
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | (84.1) | (60.4) | 6 |
Current period activity | 24.1 | (23.7) | (66.4) |
Balance | (60) | (84.1) | (60.4) |
Unrealized Gain (Loss) on Derivatives | |||
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | 0.3 | (2.7) | (0.6) |
Current period activity | 3.9 | 3 | (2.1) |
Balance | $ 4.2 | $ 0.3 | $ (2.7) |
Other Comprehensive Income It85
Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Other comprehensive income (loss), before tax | |||||||||||
Interest expense | $ (148.8) | $ (130.1) | $ (127.1) | $ (115.1) | $ (117.1) | $ (109.8) | $ (105.6) | $ (89.6) | $ (521.1) | $ (422.1) | $ (311.9) |
Total other comprehensive income (loss), before tax | 30.1 | (19.1) | (69.7) | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Total other comprehensive income (loss), tax (expense) credit | (2.1) | (1.6) | 1.2 | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss), net of income taxes | 28 | (20.7) | (68.5) | ||||||||
Cumulative Translation Adjustment | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Total other comprehensive income (loss), before tax | 24.1 | (23.7) | (66.4) | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss), net of income taxes | 24.1 | (23.7) | (66.4) | ||||||||
Unrealized Gain (Loss) on Derivatives | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Unrealized hedging gain (loss), before tax | 4.9 | (0.4) | (11.9) | ||||||||
Total other comprehensive income (loss), before tax | 6 | 4.6 | (3.3) | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Unrealized hedging gain (loss), tax (expense) credit | (1.7) | 0.1 | 4.2 | ||||||||
Total other comprehensive income (loss), tax (expense) credit | (2.1) | (1.6) | 1.2 | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Unrealized hedging gain (loss), after tax | 3.2 | (0.3) | (7.7) | ||||||||
Other comprehensive income (loss), net of income taxes | 3.9 | 3 | (2.1) | ||||||||
Unrealized Gain (Loss) on Derivatives | Interest rate contracts | Reclassifications of realized gain (loss) | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Interest expense | 1.1 | 5 | 8.6 | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Reclassification of realized (gain) loss, tax expense (credit) | (0.4) | (1.7) | (3) | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Reclassification of realized (gain) loss, after tax | $ 0.7 | $ 3.3 | $ 5.6 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Fair Values of Financial Instruments | ||
Securitization borrowings | $ 4,118.7 | $ 4,997.8 |
Current maturities of long-term borrowings | 5,056.9 | 4,509.3 |
Long-term borrowings | 17,534.4 | 16,536.5 |
Level 3 | ||
Fair Values of Financial Instruments | ||
Receivables financed - net | 24,016 | 22,429.5 |
Retail notes securitized - net | 4,129.6 | 5,114.2 |
Level 2 | ||
Fair Values of Financial Instruments | ||
Securitization borrowings | 4,118.4 | 5,004.9 |
Current maturities of long-term borrowings | 5,080.6 | 4,530 |
Long-term borrowings | 17,763.6 | 16,724.5 |
Carrying Value | ||
Fair Values of Financial Instruments | ||
Receivables financed - net | 24,123.1 | 22,476.3 |
Retail notes securitized - net | 4,158.8 | 5,126.5 |
Securitization borrowings | 4,118.7 | 4,997.8 |
Current maturities of long-term borrowings | 5,056.9 | 4,509.3 |
Long-term borrowings | $ 17,534.4 | $ 16,536.5 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | $ 123.7 | $ 301.1 |
Derivative liabilities | 132.5 | 28.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 123.7 | 301.1 |
Derivative liabilities | 132.5 | 28.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Receivables from John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 85.4 | 241.8 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Other assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 8.1 | 35.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Other payables to John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 125.6 | 24 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign exchange contracts | Other assets | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 24.6 | 13.8 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign exchange contracts | Accounts payable and accrued expenses | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 6 | 4.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-currency interest rate contracts | Receivables from John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 5.6 | $ 10.2 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-currency interest rate contracts | Other payables to John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | $ 0.9 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring, Level 3 Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | |||
Equipment on operating leases - net | $ 4,718.3 | $ 4,396.2 | |
Losses, Equipment on operating leases - net | $ 0 | 31.1 | $ 10.3 |
Fair Value, Nonrecurring Measurements | Level 3 | |||
Fair Value, Nonrecurring Level 3 Measurements from Impairments | |||
Equipment on operating leases - net | 654.4 | ||
Losses, Equipment on operating leases - net | 31.1 | 10.3 | |
Other assets | 184 | ||
Losses, Other assets | 28.6 | 9.1 | |
Total fair value | 838.4 | ||
Total (gains) losses | $ 59.7 | $ 19.4 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Cash Flow Hedges | ||
Cash flow hedge gain (loss) recorded in OCI to be reclassified within twelve months | $ 1.6 | |
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 28 months | |
Gains or losses reclassified from OCI to earnings | $ 0 | |
Interest rate contracts | Cash flow hedges | Designated as hedges | ||
Cash Flow Hedges | ||
Notional amounts | 1,700 | $ 1,600 |
Cross-currency interest rate contracts | Cash flow hedges | Designated as hedges | ||
Cash Flow Hedges | ||
Notional amounts | $ 0 | $ 0 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Fair Value Hedges | ||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ 2.7 | $ (1.6) |
Gain (Loss) on Fair Value Hedges | ||
Gains (losses) on interest rate contracts | (273.9) | 9 |
Net accrued interest income on interest rate contracts | 75.8 | 142.1 |
Gains (losses) on borrowings | 276.6 | (10.6) |
Accrued interest expense on borrowings | 229.5 | 276.8 |
Fair Value Hedges | Designated as hedges | ||
Fair Value Hedges | ||
Notional amounts | $ 8,077.2 | $ 8,283.7 |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Interest rate contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 2,311.3 | $ 2,101.2 |
Interest rate contracts | Purchased | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,594.3 | 2,430.3 |
Interest rate contracts | Sold | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,594.3 | 2,430.3 |
Foreign exchange contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,455.9 | 1,263.6 |
Cross-currency interest rate contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 65.8 | $ 63.4 |
Derivative Instruments - Fair92
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 123.7 | $ 301.1 |
Total derivative liabilities | 132.5 | 28.3 |
Designated as hedges | Interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 64.8 | 226 |
Designated as hedges | Interest rate contracts | Other assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 7 | 34.7 |
Designated as hedges | Interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 107.2 | 10.2 |
Not Designated as Hedging Instruments | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 26.2 | 26 |
Not Designated as Hedging Instruments | Other assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 25.7 | 14.4 |
Not Designated as Hedging Instruments | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 19.3 | 13.8 |
Not Designated as Hedging Instruments | Accounts payable and accrued expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 6 | 4.3 |
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 20.6 | 15.8 |
Not Designated as Hedging Instruments | Interest rate contracts | Other assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 1.1 | 0.6 |
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 18.4 | 13.8 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Other assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 24.6 | 13.8 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 6 | 4.3 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 5.6 | $ 10.2 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | $ 0.9 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ (81.8) | $ 57.5 | $ 157.4 |
John Deere | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Gain (loss) on derivatives transactions with affiliate party | (201) | 151.9 | 262.7 |
Interest rate contracts | Interest expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Fair value hedges, gains (losses) | (198.1) | 151.1 | 268.7 |
Not designated as hedges, gains (losses) | (2.6) | (1.5) | (8.2) |
Interest rate contracts | Interest expense | Cash flow hedges | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | (1.1) | (5) | (8.6) |
Interest rate contracts | OCI (pretax) | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | 4.9 | (0.4) | (11.9) |
Foreign exchange contracts | Administrative and operating expenses | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ (79.2) | $ 59 | $ 165.6 |
Derivative Instruments - Counte
Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Derivative assets | ||
Gross Amounts Recognized | $ 123.7 | $ 301.1 |
Derivative liabilities | ||
Gross Amounts Recognized | 132.5 | 28.3 |
John Deere | ||
Derivative assets | ||
Gross Amounts Recognized | 91 | 252 |
Netting Arrangements | (65.9) | (24) |
Net Amount | 25.1 | 228 |
Derivative liabilities | ||
Gross Amounts Recognized | 126.5 | 24 |
Netting Arrangements | (65.9) | (24) |
Net Amount | 60.6 | |
External | ||
Derivative assets | ||
Gross Amounts Recognized | 32.7 | 49.1 |
Netting Arrangements | (0.1) | (1.1) |
Net Amount | 32.6 | 48 |
Derivative liabilities | ||
Gross Amounts Recognized | 6 | 4.3 |
Netting Arrangements | (0.1) | (1.1) |
Net Amount | 5.9 | 3.2 |
Derivative Instruments | ||
Counterparty Risk and Collateral | ||
Aggregate liability positions for derivatives with credit risk related contingent features | 0 | 0 |
Derivative Instruments | John Deere | ||
Counterparty Risk and Collateral | ||
Increase (decrease) in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement | $ 23.5 | $ 1.9 |
Voluntary Employee Separation95
Voluntary Employee Separation Progaram (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Oct. 30, 2016 | Oct. 29, 2017 | Oct. 29, 2017 | |
Voluntary Employee Separation Program | |||
Voluntary Employee Separation Program | |||
Total voluntary employee-separation programs' expenses, pretax | $ 0.2 | $ 8.2 | $ 8.4 |
Geographic Area Information (De
Geographic Area Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017USD ($) | Jul. 30, 2017USD ($) | Apr. 30, 2017USD ($) | Jan. 29, 2017USD ($) | Oct. 30, 2016USD ($) | Jul. 31, 2016USD ($) | May 01, 2016USD ($) | Jan. 31, 2016USD ($) | Oct. 29, 2017USD ($)item | Oct. 30, 2016USD ($) | Nov. 01, 2015USD ($) | |
Geographic Area Information | |||||||||||
Number of operating segments | item | 1 | ||||||||||
Revenues | $ 588.9 | $ 571.8 | $ 543.9 | $ 522.4 | $ 541.5 | $ 538.6 | $ 526.9 | $ 487.2 | $ 2,227 | $ 2,094.2 | $ 1,951.7 |
Operating profit (loss) | 500 | 521.8 | 768.1 | ||||||||
Receivables | 28,395.7 | 27,714.5 | 28,395.7 | 27,714.5 | 29,092.4 | ||||||
U.S. | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 2,030.3 | 1,899.3 | 1,736.9 | ||||||||
Operating profit (loss) | 407.6 | 441.7 | 681.6 | ||||||||
Receivables | 24,189.6 | 24,287.9 | 24,189.6 | 24,287.9 | 25,779.4 | ||||||
Outside the U.S. | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 196.7 | 194.9 | 214.8 | ||||||||
Operating profit (loss) | 92.4 | 80.1 | 86.5 | ||||||||
Receivables | $ 4,206.1 | $ 3,426.6 | $ 4,206.1 | $ 3,426.6 | $ 3,313 |
Unconsolidated Affiliated Com97
Unconsolidated Affiliated Company (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Unconsolidated Affiliated Company | |||||||||||
Ownership percentage in equity method investee | 50.00% | 50.00% | |||||||||
Operations: | |||||||||||
Total revenue | $ 10.1 | $ 10.7 | $ 11.3 | ||||||||
Net income | 2.3 | 3.2 | 2.4 | ||||||||
The Company's equity in net income | $ 0.1 | $ 0.3 | $ 0.3 | $ 0.5 | $ 0.4 | $ 0.2 | $ 0.2 | $ 0.8 | 1.2 | 1.6 | $ 1.2 |
Financial Position: | |||||||||||
Total assets | 212.2 | 200.9 | 212.2 | 200.9 | |||||||
Total external borrowings | 176.8 | 168.1 | 176.8 | 168.1 | |||||||
Total net assets | 27.6 | 23.7 | 27.6 | 23.7 | |||||||
The Company's share of net assets | $ 13.8 | $ 11.9 | $ 13.8 | $ 11.9 |
Supplemental Information (Una98
Supplemental Information (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | |
Supplemental Information (Unaudited) | |||||||||||
Revenues | $ 588.9 | $ 571.8 | $ 543.9 | $ 522.4 | $ 541.5 | $ 538.6 | $ 526.9 | $ 487.2 | $ 2,227 | $ 2,094.2 | $ 1,951.7 |
Interest expense | 148.8 | 130.1 | 127.1 | 115.1 | 117.1 | 109.8 | 105.6 | 89.6 | 521.1 | 422.1 | 311.9 |
Operating expenses | 287.2 | 304 | 316 | 299.9 | 302.2 | 287.4 | 312.6 | 249.7 | 1,207.1 | 1,151.9 | 872.9 |
Provision for income taxes | 51.6 | 49.7 | 36.6 | 33.6 | 40.9 | 51.2 | 39.3 | 48.9 | 171.5 | 180.3 | 269.9 |
Equity in income of unconsolidated affiliate | 0.1 | 0.3 | 0.3 | 0.5 | 0.4 | 0.2 | 0.2 | 0.8 | 1.2 | 1.6 | 1.2 |
Net income (loss) attributable to noncontrolling interests | 0.1 | (0.1) | 0.1 | (0.1) | |||||||
Net income attributable to the Company | $ 101.4 | $ 88.3 | $ 64.5 | $ 74.2 | $ 81.7 | $ 90.4 | $ 69.6 | $ 99.9 | $ 328.4 | $ 341.6 | $ 498.2 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 24, 2017 | Oct. 29, 2017 | Oct. 30, 2016 | Nov. 01, 2015 | Nov. 26, 2017 | |
Subsequent Event | |||||
Cash dividends declared and paid to JDFS | $ 285 | $ 485 | $ 485 | ||
Securitization borrowings | $ 4,118.7 | $ 4,997.8 | |||
Subsequent Event | |||||
Subsequent Event | |||||
Dividend from JDFS paid to Deere & Co. | $ 20 | ||||
Securitization borrowings | $ 985 | ||||
Subsequent Event | John Deere Financial Services, Inc. | |||||
Subsequent Event | |||||
Cash dividends declared and paid to JDFS | $ 20 |