Document and Entity Information
Document and Entity Information | 6 Months Ended |
Apr. 28, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | DEERE JOHN CAPITAL CORP |
Entity Central Index Key | 0000027673 |
Document Type | 10-Q |
Document Period End Date | Apr. 28, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --11-03 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 2,500 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Statement of Consolidated Incom
Statement of Consolidated Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
Revenues | ||||
Finance income earned on retail notes | $ 214.6 | $ 185.3 | $ 423.5 | $ 368.9 |
Revolving charge account income | 76.6 | 74.8 | 148.7 | 143.9 |
Finance income earned on wholesale receivables | 142.7 | 114.6 | 259 | 209.2 |
Lease revenues | 245.4 | 223.3 | 484.9 | 439.7 |
Other income | 23.7 | 19.5 | 47.7 | 41 |
Total revenues | 703 | 617.5 | 1,363.8 | 1,202.7 |
Expenses | ||||
Interest expense | 252 | 180.3 | 478.5 | 334.4 |
Operating expenses: | ||||
Administrative and operating expenses | 112.5 | 111.2 | 210.7 | 214.3 |
Fees paid to John Deere | 12 | 16.8 | 26.8 | 33 |
Provision for credit losses | 26.1 | 13.3 | 26.9 | 16.1 |
Depreciation of equipment on operating leases | 180.9 | 170.5 | 356.3 | 337.8 |
Total operating expenses | 331.5 | 311.8 | 620.7 | 601.2 |
Total expenses | 583.5 | 492.1 | 1,099.2 | 935.6 |
Income of consolidated group before income taxes | 119.5 | 125.4 | 264.6 | 267.1 |
Provision (credit) for income taxes | 35.7 | 6.6 | 59.6 | (250.3) |
Income of consolidated group | 83.8 | 118.8 | 205 | 517.4 |
Equity in income of unconsolidated affiliate | 0.4 | 0.4 | 1 | 1.2 |
Net income | 84.2 | 119.2 | 206 | 518.6 |
Less: Net loss attributable to noncontrolling interests | (0.1) | |||
Net income attributable to the Company | $ 84.3 | $ 119.2 | $ 206 | $ 518.6 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
Statement of Consolidated Comprehensive Income | ||||
Net income | $ 84.2 | $ 119.2 | $ 206 | $ 518.6 |
Other comprehensive income (loss), net of income taxes | ||||
Cumulative translation adjustment | (7.2) | (17.2) | (6.4) | 13.8 |
Unrealized gain (loss) on derivatives | (6.7) | 4.9 | (15.1) | 10.2 |
Other comprehensive income (loss), net of income taxes | (13.9) | (12.3) | (21.5) | 24 |
Comprehensive income of consolidated group | 70.3 | 106.9 | 184.5 | 542.6 |
Less: Comprehensive loss attributable to noncontrolling interests | (0.1) | |||
Comprehensive income attributable to the Company | $ 70.4 | $ 106.9 | $ 184.5 | $ 542.6 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Assets | |||
Cash and cash equivalents | $ 525.7 | $ 608.4 | $ 1,060.9 |
Marketable securities | 4 | ||
Receivables: | |||
Total receivables | 32,687.6 | 30,646.7 | 29,856 |
Allowance for credit losses | (110.4) | (106.7) | (114.8) |
Total receivables - net | 32,577.2 | 30,540 | 29,741.2 |
Other receivables | 106.1 | 532 | 94.6 |
Receivables from John Deere | 113.5 | 59.3 | 73.2 |
Equipment on operating leases - net | 5,169.5 | 5,102.5 | 4,793.5 |
Notes receivable from John Deere | 224 | 195.4 | 151.3 |
Investment in unconsolidated affiliate | 15.6 | 15.2 | 15.3 |
Deferred income taxes | 36.5 | 36.8 | 40.8 |
Other assets | 563 | 575.9 | 522.2 |
Total Assets | 39,335.1 | 37,665.5 | 36,493 |
Short-term borrowings: | |||
Commercial paper and other notes payable | 3,484.1 | 2,112.9 | 1,908.9 |
Securitization borrowings | 4,643.9 | 3,881.7 | 4,287.9 |
John Deere | 1,062 | 1,376.8 | 1,382.8 |
Current maturities of long-term borrowings | 4,629.7 | 4,587.6 | 5,664.8 |
Total short-term borrowings | 13,819.7 | 11,959 | 13,244.4 |
Other payables to John Deere | 144.6 | 342.5 | 342.6 |
Accounts payable and accrued expenses | 839.2 | 871.6 | 827.8 |
Deposits withheld from dealers and merchants | 138.2 | 166 | 170.8 |
Deferred income taxes | 662.9 | 824.2 | 475.7 |
Long-term borrowings | 19,705.9 | 19,432.2 | 17,596.9 |
Total liabilities | 35,310.5 | 33,595.5 | 32,658.2 |
Commitments and contingencies (Note 7) | |||
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 | 1,482.8 |
Retained earnings | 2,628.4 | 2,652.4 | 2,383.3 |
Accumulated other comprehensive income (loss) | (87.4) | (65.9) | (31.8) |
Total Company stockholder's equity | 4,023.8 | 4,069.3 | 3,834.3 |
Noncontrolling interests | 0.8 | 0.7 | 0.5 |
Total stockholder's equity | 4,024.6 | 4,070 | 3,834.8 |
Total Liabilities and Stockholder's Equity | 39,335.1 | 37,665.5 | 36,493 |
Retail notes | |||
Receivables: | |||
Total receivables | 18,015 | 16,907 | |
Allowance for credit losses | (54.1) | (51.6) | (56.6) |
Retail notes | Unrestricted | |||
Receivables: | |||
Total receivables | 13,248.6 | 14,156 | 12,570 |
Retail notes | Securitized | |||
Receivables: | |||
Total receivables | 4,766.4 | 3,954.9 | 4,337 |
Revolving charge accounts | |||
Receivables: | |||
Total receivables | 3,235.9 | 3,797.6 | 3,152.5 |
Allowance for credit losses | (42.3) | (42.3) | (39.7) |
Wholesale receivables | |||
Receivables: | |||
Total receivables | 10,809.7 | 7,967.6 | 9,129.7 |
Allowance for credit losses | (8) | (8) | (9.9) |
Financing leases | |||
Receivables: | |||
Total receivables | 627 | 770.6 | 666.8 |
Allowance for credit losses | $ (6) | $ (4.8) | $ (8.6) |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Consolidated Balance Sheet | |||
Common stock, issued shares | 2,500 | 2,500 | 2,500 |
Common stock, outstanding shares | 2,500 | 2,500 | 2,500 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Apr. 28, 2019 | Apr. 29, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 206 | $ 518.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 26.9 | 16.1 |
Provision for depreciation and amortization | 367.7 | 348.8 |
Credit for deferred income taxes | (157) | (347.6) |
Undistributed earnings of unconsolidated affiliate | (0.8) | (1) |
Change in accounts payable and accrued expenses | 3.2 | 40.3 |
Change in accrued income taxes payable/receivable | 440 | (28.9) |
Other | 133.7 | 97.2 |
Net cash provided by operating activities | 1,019.7 | 643.5 |
Cash Flows from Investing Activities: | ||
Cost of receivables acquired (excluding wholesale) | (8,360.2) | (7,938.4) |
Collections of receivables (excluding wholesale) | 8,991.2 | 8,610.6 |
Increase in wholesale receivables - net | (2,863.7) | (2,195.5) |
Cost of equipment on operating leases acquired | (1,062.3) | (1,024.4) |
Proceeds from sales of equipment on operating leases | 627 | 560.3 |
Cost of notes receivable with John Deere | (56.6) | (4.9) |
Collections of notes receivable with John Deere | 31.4 | 2.5 |
Purchases of marketable securities | (4) | |
Other | (39.2) | (18.2) |
Net cash used for investing activities | (2,736.4) | (2,008) |
Cash Flows from Financing Activities: | ||
Increase (decrease) in commercial paper and other notes payable - net | 1,364.1 | (142.2) |
Increase in securitization borrowings - net | 762.8 | 169.2 |
Increase (decrease) in payable to John Deere - net | (302.4) | 823.9 |
Proceeds from issuance of long-term borrowings | 3,051 | 3,307 |
Payments of long-term borrowings | (3,002.8) | (2,412.5) |
Dividends paid | (230) | (365) |
Capital investment from John Deere | 0.1 | |
Debt issuance costs | (16.2) | (16.5) |
Net cash provided by financing activities | 1,626.6 | 1,363.9 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (4.5) | 0.3 |
Net decrease in cash, cash equivalents, and restricted cash | (94.6) | (0.3) |
Cash, cash equivalents, and restricted cash at beginning of period | 711.8 | 1,181.4 |
Cash, cash equivalents, and restricted cash at end of period | $ 617.2 | $ 1,181.1 |
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 Oct. 29, 2017 | $ 1,482.8 | $ 2,229.7 | $ (55.8) | $ 0.5 | $ 3,657.2 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 518.6 | 518.6 | |||
Other comprehensive income (loss) | 24 | 24 | |||
Dividends declared | (365) | (365) | |||
Balance at Apr. 29, 2018 | 1,482.8 | 2,383.3 | (31.8) | 0.5 | 3,834.8 |
Balance at Jan. 28, 2018 | 1,482.8 | 2,609.1 | (19.5) | 0.5 | 4,072.9 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 119.2 | 119.2 | |||
Other comprehensive income (loss) | (12.3) | (12.3) | |||
Dividends declared | (345) | (345) | |||
Balance at Apr. 29, 2018 | 1,482.8 | 2,383.3 | (31.8) | 0.5 | 3,834.8 |
Balance at Oct. 28, 2018 | 1,482.8 | 2,652.4 | (65.9) | 0.7 | 4,070 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 206 | 206 | |||
Other comprehensive income (loss) | (21.5) | (21.5) | |||
Dividends declared | (230) | (230) | |||
Capital investment | 0.1 | 0.1 | |||
Balance at Apr. 28, 2019 | 1,482.8 | 2,628.4 | (87.4) | 0.8 | 4,024.6 |
Balance at Jan. 27, 2019 | 1,482.8 | 2,574.1 | (73.5) | 0.8 | 3,984.2 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 84.3 | (0.1) | 84.2 | ||
Other comprehensive income (loss) | (13.9) | (13.9) | |||
Dividends declared | (30) | (30) | |||
Capital investment | 0.1 | 0.1 | |||
Balance at Apr. 28, 2019 | $ 1,482.8 | $ 2,628.4 | $ (87.4) | $ 0.8 | $ 4,024.6 |
Organization and Consolidation
Organization and Consolidation | 6 Months Ended |
Apr. 28, 2019 | |
Organization and Consolidation | |
Organization and Consolidation | (1) Organization and Consolidation The interim consolidated financial statements of John Deere Capital Corporation (Capital Corporation) and its subsidiaries (collectively called the Company) have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest annual report on Form 10‑K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. 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. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2019 and 2018 were April 28, 2019 and April 29, 2018, respectively. Both periods contained 13 weeks. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company’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 Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere generally acquires these retail notes through John Deere retail dealers. The Company also purchases and finances a limited amount of non-Deere retail notes. The Company also finances and services revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). The Company also provides wholesale financing for inventories of John Deere agriculture and turf and construction and forestry equipment for dealers of those products (wholesale receivables). In addition, the Company leases John Deere equipment and a limited amount of non‑Deere equipment to retail customers (financing and operating leases). The Company also offers credit enhanced international export financing to select customers and dealers, which generally involves John Deere products. 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.” |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Apr. 28, 2019 | |
New Accounting Standards | |
New Accounting Standards | (2) New Accounting Standards Adopted In the first quarter of 2019, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) 605, Revenue Recognition, using a modified-retrospective approach. The 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. A five-step model is used to determine the amount and timing of revenue recognized. The adoption did not have a material effect on the Company’s consolidated financial statements. In the first quarter of 2019, the Company adopted ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments – Overall. This ASU changed 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 (OCI). The Company does not own any available-for-sale equity securities. As a result, the adoption did not have a material effect on the Company’s consolidated financial statements. In the first quarter of 2019, the Company adopted ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. The ASU requires that restricted cash be included with cash and cash equivalents in the statement of cash flows. The Company held restricted cash of $91.5 million, $103.4 million, $120.2 million, and $125.9 million at April 28, 2019, October 28, 2018, April 29, 2018, and October 29, 2017, respectively. The restricted cash primarily relates to the securitization of receivables and is reported in other assets on the consolidated balance sheet. The ASU was adopted using a retrospective transition approach resulting in an update to the 2018 statement of consolidated cash flows. The ASU did not have a material effect on the Company’s consolidated financial statements. In the first quarter of 2019, the Company early adopted 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 adoption did not have a material effect on the Company’s consolidated financial statements (see Note 10). The Company continues to evaluate potential additional hedge accounting relationships provided by the new standard to further improve risk management. The Company also adopted the following standards in the first quarter of 2019, none of which had a material effect on the Company’s consolidated financial statements: Accounting Standards Updates 2016-15 Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows 2016-16 Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes 2017-01 Clarifying the Definition of a Business, which amends ASC 805, Business Combinations 2017-09 Scope of Modification Accounting, which amends ASC 718, Compensation - Stock Compensation 2018-13 Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement 2018-16 Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which amends ASC 815, Derivatives and Hedging New Accounting Standards to be Adopted 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. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases: Targeted Improvements. Both ASUs amend ASC 842, Leases. The provisions affecting the Company in these ASUs are an option that will not require earlier periods to be restated at the adoption date and an option for lessors, if certain criteria are met, to avoid separating the lease and nonlease components (such as preventative maintenance services) in an agreement. In December 2018, the FASB issued ASU No. 2018-20, Narrow-Scope Improvements for Lessors. This ASU provides an election for lessors to exclude sales and related taxes from consideration in the contract, requires lessors to exclude from revenue and expense lessor costs paid directly to a third party by lessees, and clarifies lessors’ accounting for variable payments related to both lease and nonlease components. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. The ASU allows certain lessors, including captive finance companies, to use their cost as the fair value of the to-be-leased asset. The ASU also clarifies the presentation of lease payments in the statement of cash flows and the required transition disclosures. The effective date will be the first quarter of fiscal year 2020. The Company is evaluating the potential effects on the consolidated financial statements and plans to adopt the ASU using the modified-retrospective approach that will not require earlier periods to be restated. 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 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The effective date will be the first quarter of fiscal year 2021. The ASUs will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. This ASU requires customers in a hosting arrangement that is a service contract to evaluate the implementation costs of the hosting arrangement using the guidance to develop internal-use software. The project development stage determines the implementation costs that are capitalized or expensed. Capitalized implementation costs are amortized over the term of the service arrangement and are presented in the same income statement line item as the service contract costs. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted. The Company will adopt the ASU on a prospective basis. The Company is evaluating the potential effects on the Company’s consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The effective dates for the separate portions of the ASU and the expected effect on the consolidated financial statements are as follows: (1) clarifications to ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, is the first quarter of fiscal year 2021, which is under evaluation, (2) clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities is the first quarter of fiscal year 2020, with early adoption permitted, which will not have a material effect, and (3) clarifications to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities is the first quarter of fiscal year 2021, with early adoption permitted, which will not have a material effect. |
Other Comprehensive Income Item
Other Comprehensive Income Items | 6 Months Ended |
Apr. 28, 2019 | |
Other Comprehensive Income Items | |
Other Comprehensive Income Items | (3) Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): Unrealized Accumulated Cumulative Gain (Loss) Other Translation on Comprehensive Adjustment Derivatives Income (Loss) Balance October 29, 2017 $ (60.0) $ 4.2 $ (55.8) Other comprehensive income (loss) items before reclassification 13.8 10.9 24.7 Amounts reclassified from accumulated other comprehensive income (.7) (.7) Net current period other comprehensive income (loss) 13.8 10.2 24.0 Balance April 29, 2018 $ (46.2) $ 14.4 $ (31.8) Balance October 28, 2018 $ (80.7) $ 14.8 $ (65.9) Other comprehensive income (loss) items before reclassification (6.4) (11.5) (17.9) Amounts reclassified from accumulated other comprehensive income (3.6) (3.6) Net current period other comprehensive income (loss) (6.4) (15.1) (21.5) Balance April 28, 2019 $ (87.1) $ (.3) $ (87.4) 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 Three Months Ended April 28, 2019 Amount Credit Amount Cumulative translation adjustment $ (7.2) $ (7.2) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (6.0) $ 1.3 (4.7) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (2.5) .5 (2.0) Net unrealized gain (loss) on derivatives (8.5) 1.8 (6.7) Total other comprehensive income (loss) $ (15.7) $ 1.8 $ (13.9) Six Months Ended April 28, 2019 Cumulative translation adjustment $ (6.4) $ (6.4) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (14.6) $ 3.1 (11.5) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (4.6) 1.0 (3.6) Net unrealized gain (loss) on derivatives (19.2) 4.1 (15.1) Total other comprehensive income (loss) $ (25.6) $ 4.1 $ (21.5) Three Months Ended April 29, 2018 Cumulative translation adjustment $ (17.2) $ (17.2) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 7.1 $ (1.5) 5.6 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (.9) .2 (.7) Net unrealized gain (loss) on derivatives 6.2 (1.3) 4.9 Total other comprehensive income (loss) $ (11.0) $ (1.3) $ (12.3) Six Months Ended April 29, 2018 Cumulative translation adjustment $ 13.8 $ 13.8 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 14.7 $ (3.8) 10.9 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (.9) .2 (.7) Net unrealized gain (loss) on derivatives 13.8 (3.6) 10.2 Total other comprehensive income (loss) $ 27.6 $ (3.6) $ 24.0 |
Receivables
Receivables | 6 Months Ended |
Apr. 28, 2019 | |
Receivables | |
Receivables | (4) Receivables 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 based on delinquency status. Non-performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes, revolving charge accounts, and finance lease accounts are 90 days delinquent, accrual of finance income and lease revenue is suspended. 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. 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. During the first quarter of 2019, the Company amended the timing in which finance income and lease revenue is generally suspended on retail notes, revolving charge accounts, and finance lease accounts from 120 days delinquent to 90 days delinquent. This change in estimate was made on a prospective basis and did not have a significant effect on the Company’s consolidated financial statements. Management’s methodology to determine the collectability of delinquent accounts was not affected by the change. Receivable balances are written off to the allowance for credit losses when, in the judgement of management, they are considered uncollectible. Generally, when retail notes and finance lease accounts are 120 days delinquent, 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 account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses. An age analysis of past due Receivables that are still accruing interest and non-performing Receivables was as follows (in millions of dollars): April 28, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 116.7 $ 66.8 $ .7 $ 184.2 Construction and forestry 86.7 39.8 126.5 Revolving charge accounts: Agriculture and turf 23.6 11.8 35.4 Construction and forestry 3.7 1.3 5.0 Wholesale receivables: Agriculture and turf 5.1 2.1 .8 8.0 Construction and forestry .4 .4 Financing leases: Agriculture and turf 4.4 1.7 .1 6.2 Construction and forestry 2.6 .7 3.3 Total Receivables $ 243.2 $ 124.2 $ 1.6 $ 369.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 184.2 $ 197.7 $ 14,621.5 $ 15,003.4 Construction and forestry 126.5 110.7 2,774.4 3,011.6 Revolving charge accounts: Agriculture and turf 35.4 47.1 3,059.2 3,141.7 Construction and forestry 5.0 1.0 88.2 94.2 Wholesale receivables: Agriculture and turf 8.0 6.2 8,606.6 8,620.8 Construction and forestry .4 4.5 2,184.0 2,188.9 Financing leases: Agriculture and turf 6.2 11.6 462.9 480.7 Construction and forestry 3.3 2.9 140.1 146.3 Total Receivables $ 369.0 $ 381.7 $ 31,936.9 $ 32,687.6 October 28, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 119.7 $ 67.5 $ 57.5 $ 244.7 Construction and forestry 75.9 44.8 49.7 170.4 Revolving charge accounts: Agriculture and turf 22.8 8.3 4.6 35.7 Construction and forestry 4.0 1.2 .8 6.0 Wholesale receivables: Agriculture and turf 1.7 .4 1.1 3.2 Construction and forestry 1.2 1.2 Financing leases: Agriculture and turf 9.9 6.1 2.3 18.3 Construction and forestry 1.7 1.1 .9 3.7 Total Receivables $ 236.9 $ 129.4 $ 116.9 $ 483.2 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 244.7 $ 95.9 $ 14,838.6 $ 15,179.2 Construction and forestry 170.4 28.5 2,732.8 2,931.7 Revolving charge accounts: Agriculture and turf 35.7 1.3 3,659.2 3,696.2 Construction and forestry 6.0 95.4 101.4 Wholesale receivables: Agriculture and turf 3.2 7.3 6,135.5 6,146.0 Construction and forestry 1.2 1,820.4 1,821.6 Financing leases: Agriculture and turf 18.3 8.4 597.5 624.2 Construction and forestry 3.7 .6 142.1 146.4 Total Receivables $ 483.2 $ 142.0 $ 30,021.5 $ 30,646.7 April 29, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 104.1 $ 51.1 $ 40.1 $ 195.3 Construction and forestry 89.7 43.2 34.3 167.2 Revolving charge accounts: Agriculture and turf 16.4 9.7 25.4 51.5 Construction and forestry 2.9 1.6 .7 5.2 Wholesale receivables: Agriculture and turf 3.0 1.8 2.1 6.9 Construction and forestry .6 .6 Financing leases: Agriculture and turf 12.7 3.2 .9 16.8 Construction and forestry 2.2 1.2 .7 4.1 Total Receivables $ 231.6 $ 111.8 $ 104.2 $ 447.6 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 195.3 $ 70.6 $ 13,917.1 $ 14,183.0 Construction and forestry 167.2 28.8 2,528.0 2,724.0 Revolving charge accounts: Agriculture and turf 51.5 1.5 3,015.3 3,068.3 Construction and forestry 5.2 .1 78.9 84.2 Wholesale receivables: Agriculture and turf 6.9 5.9 7,552.2 7,565.0 Construction and forestry .6 1,564.1 1,564.7 Financing leases: Agriculture and turf 16.8 9.3 494.8 520.9 Construction and forestry 4.1 1.0 140.8 145.9 Total Receivables $ 447.6 $ 117.2 $ 29,291.2 $ 29,856.0 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 in the Company’s major markets and geographies, and credit risk quality. An analysis of the allowance for credit losses and investment in Receivables was as follows (in millions of dollars): Three Months Ended April 28, 2019 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 51.2 $ 42.3 $ 7.9 $ 5.3 $ 106.7 Provision for credit losses 8.1 16.3 .2 1.5 26.1 Write-offs (6.4) (21.5) (1.0) (28.9) Recoveries 1.3 5.2 .2 6.7 Translation adjustments (.1) (.1) (.2) End of period balance $ 54.1 $ 42.3 $ 8.0 $ 6.0 $ 110.4 Six Months Ended April 28, 2019 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 51.6 $ 42.3 $ 8.0 $ 4.8 $ 106.7 Provision (credit) for credit losses 12.6 15.4 (3.7) 2.6 26.9 Write-offs (13.2) (25.4) (1.6) (40.2) Recoveries 3.2 10.0 3.6 .2 17.0 Translation adjustments (.1) .1 End of period balance $ 54.1 $ 42.3 $ 8.0 $ 6.0 $ 110.4 Balance individually evaluated * $ 1.8 $ 2.9 $ .7 $ 5.4 Receivables: End of period balance $ 18,015.0 $ 3,235.9 $ 10,809.7 $ 627.0 $ 32,687.6 Balance individually evaluated * $ 73.6 $ 2.4 $ 9.4 $ 1.1 $ 86.5 * Remainder is collectively evaluated. Three Months Ended April 29, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.8 $ 39.7 $ 10.2 $ 8.4 $ 114.1 Provision for credit losses 3.7 8.8 .3 .5 13.3 Write-offs (4.7) (14.3) (.4) (.6) (20.0) Recoveries 2.0 5.5 .2 7.7 Translation adjustments (.2) (.2) .1 (.3) End of period balance $ 56.6 $ 39.7 $ 9.9 $ 8.6 $ 114.8 Six Months Ended April 29, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Provision for credit losses 6.0 8.4 .4 1.3 16.1 Write-offs (9.9) (18.9) (.5) (1.5) (30.8) Recoveries 4.6 10.6 .3 15.5 Translation adjustments .2 (.1) .1 .2 End of period balance $ 56.6 $ 39.7 $ 9.9 $ 8.6 $ 114.8 Balance individually evaluated * $ .1 $ 2.5 $ .1 $ 2.7 Receivables: End of period balance $ 16,907.0 $ 3,152.5 $ 9,129.7 $ 666.8 $ 29,856.0 Balance individually evaluated * $ 45.8 $ 1.1 $ 10.3 $ .2 $ 57.4 * Remainder is collectively evaluated. 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 that are impaired are generally classified as non‑performing. An analysis of impaired Receivables was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 28, 2019 * Receivables with specific allowance: Retail notes $ 4.8 $ 4.6 $ 1.8 $ 4.9 Wholesale receivables 5.9 5.9 2.9 5.8 Financing leases .7 .6 .7 .7 Total with specific allowance 11.4 11.1 5.4 11.4 Receivables without specific allowance: Retail notes 25.3 24.8 26.5 Wholesale receivables 1.3 1.3 .5 Total without specific allowance 26.6 26.1 27.0 Total $ 38.0 $ 37.2 $ 5.4 $ 38.4 Agriculture and turf $ 32.7 $ 32.1 $ 5.1 $ 33.1 Construction and forestry 5.3 5.1 .3 5.3 Total $ 38.0 $ 37.2 $ 5.4 $ 38.4 October 28, 2018 * Receivables with specific allowance: Retail notes $ .8 $ .6 $ .1 $ .9 Wholesale receivables 5.8 5.8 2.8 6.7 Total with specific allowance 6.6 6.4 2.9 7.6 Receivables without specific allowance: Retail notes 23.9 23.6 26.1 Wholesale receivables 2.4 2.4 2.6 Total without specific allowance 26.3 26.0 28.7 Total $ 32.9 $ 32.4 $ 2.9 $ 36.3 Agriculture and turf $ 28.8 $ 28.4 $ 2.9 $ 31.7 Construction and forestry 4.1 4.0 4.6 Total $ 32.9 $ 32.4 $ 2.9 $ 36.3 April 29, 2018 * Receivables with specific allowance: Retail notes $ .8 $ .8 $ .1 $ .9 Wholesale receivables 6.7 6.7 2.5 8.1 Financing leases .2 .2 .1 .2 Total with specific allowance 7.7 7.7 2.7 9.2 Receivables without specific allowance: Retail notes 25.7 25.6 26.6 Wholesale receivables 1.9 1.8 4.2 Total without specific allowance 27.6 27.4 30.8 Total $ 35.3 $ 35.1 $ 2.7 $ 40.0 Agriculture and turf $ 29.4 $ 29.2 $ 2.6 $ 33.8 Construction and forestry 5.9 5.9 .1 6.2 Total $ 35.3 $ 35.1 $ 2.7 $ 40.0 * 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 the first six months of 2019, the Company identified 135 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $4.3 million pre‑modification and $4.0 million post‑modification. During the first six months of 2018, there were 212 Receivable contracts, primarily retail notes, with aggregate balances of $11.2 million pre‑modification and $10.6 million post‑modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At April 28, 2019, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. |
Securitization of Receivables
Securitization of Receivables | 6 Months Ended |
Apr. 28, 2019 | |
Securitization of Receivables | |
Securitization of Receivables | (5) Securitization of Receivables The Company, as a part of its overall funding strategy, periodically transfers certain Receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (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 balance sheet. The securitized retail notes are recorded as “Retail notes securitized” on the 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. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the retail notes securitized or a fixed percentage of the outstanding balance of the retail notes securitized. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. 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 $2,770.9 million, $2,592.4 million, and $2,488.9 million at April 28, 2019, October 28, 2018, and April 29, 2018, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $2,693.4 million, $2,519.6 million, and $2,438.4 million at April 28, 2019, October 28, 2018, and April 29, 2018, 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 $611.7 million, $427.9 million, and $572.8 million at April 28, 2019, October 28, 2018, and April 29, 2018, respectively. The liabilities (securitization borrowings and accrued interest) were $572.4 million, $399.8 million, and $542.6 million at April 28, 2019, October 28, 2018, and April 29, 2018, 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 conduit) 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 $1,477.2 million, $1,033.2 million, and $1,383.1 million at April 28, 2019, October 28, 2018, and April 29, 2018, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,382.0 million, $965.5 million, and $1,310.3 million at April 28, 2019, October 28, 2018, and April 29, 2018, 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 was as follows (in millions of dollars): April 28 2019 Carrying value of liabilities $ 1,382.0 Maximum exposure to loss 1,477.2 The total assets of unconsolidated VIEs related to securitizations were approximately $37.5 billion at April 28, 2019. The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Retail notes securitized $ 4,766.4 $ 3,954.9 $ 4,337.0 Allowance for credit losses (11.7) (9.6) (13.8) Other assets 105.1 108.2 121.6 Total restricted securitized assets $ 4,859.8 $ 4,053.5 $ 4,444.8 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Securitization borrowings $ 4,643.9 $ 3,881.7 $ 4,287.9 Accrued interest on borrowings 3.9 3.2 3.4 Total liabilities related to restricted securitized assets $ 4,647.8 $ 3,884.9 $ 4,291.3 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 April 28, 2019, the maximum remaining term of all restricted securitized retail notes was approximately seven years. |
Notes Receivable from John Deer
Notes Receivable from John Deere | 6 Months Ended |
Apr. 28, 2019 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | (6) 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 mature over the next six years. Interest earned from John Deere was $4.0 million in the second quarter and $7.6 million in the first six months of 2019, compared with $2.3 million and $5.1 million for the same periods last year. The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Limited Liability Company John Deere Financial $ 128.4 $ 123.5 $ 98.6 Banco John Deere S.A. 95.6 71.9 52.7 Total Notes Receivable from John Deere $ 224.0 $ 195.4 $ 151.3 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 28, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7) Commitments and Contingencies At April 28, 2019, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $852.8 million of medium-term notes outstanding, and a fair value liability of $24.7 million for derivatives outstanding, prior to considering applicable netting provisions, with a notional amount of $2,708.9 million that were guaranteed by Capital Corporation. The weighted average interest rate on the medium-term notes at April 28, 2019 was 2.9 percent with a maximum remaining maturity of approximately five years. 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 $1,853.9 million at April 28, 2019. The weighted average interest rate on the debt at April 28, 2019 was 2.3 percent with a maximum remaining maturity of approximately four 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 $5.6 billion at April 28, 2019. The amount of unused commitments to extend credit to customers was $29.3 billion at April 28, 2019. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely 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 the unused commitments to extend credit to customers relate to revolving charge accounts. At April 28, 2019, Capital Corporation had $60.3 million in unused loan commitments denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia. At April 28, 2019, the Company had restricted other assets associated with borrowings related to securitizations (see Note 5). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of April 28, 2019. 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 matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements. |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 28, 2019 | |
Income Taxes | |
Income Taxes | (8) Income Taxes In 2019, the Company is subject to additional provisions of the U.S. tax reform legislation enacted in December 2017 (tax reform). Tax reform reduced the corporate income tax rate and transitioned from a worldwide corporate tax system to a modified territorial corporate tax system. The Company’s 2019 U.S. statutory corporate income tax rate is 21 percent and was approximately 23.3 percent for 2018. The provisions of tax reform affecting the Company in 2019 include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion and anti-abuse tax benefits (BEAT) for certain payments between a U.S. corporation and foreign subsidiaries, a limitation on the deductibility of certain executive compensation, a deduction for foreign derived intangible income (FDII), and interest expense limitations. Based on the current interpretations of tax reform legislation and related regulations, along with the Company’s 2019 forecasts, the Company does not expect the combined effect of these provisions to be significant for the 2019 provision for income taxes. In 2018, the Company recorded discrete tax measurement period adjustments related to the remeasurement of the Company’s net deferred tax liabilities to the new corporate income tax rate and a tax expense related to the deemed earnings repatriation tax (repatriation tax). Those adjustments for the second quarter and first six months of 2018 were as follows (in millions of dollars): April 29, 2018 Three Months Ended Six Months Ended Net deferred tax liability remeasurement $ (18.5) $ (322.4) Deemed earnings repatriation tax .1 15.7 Total discrete tax (benefit) expense $ (18.4) $ (306.7) The full year 2018 discrete tax benefit for the remeasurement of the net deferred tax liabilities was $362.9 million and the repatriation tax expense was $20.6 million. The final repatriation tax amount will be determined later in 2019 based on completing the 2018 income tax filings and the interpretation of regulations. Based on current law, the Company paid the repatriation tax in 2019 with an expected U.S. income tax overpayment. The taxable income of the Company is included in the consolidated U.S. income tax return of Deere & Company. Under a tax sharing agreement with Deere & Company, the Company’s provision (credit) for income taxes is generally recorded as if Capital Corporation and each of its subsidiaries filed separate income tax returns, with a modification for realizability of certain tax benefits. The difference between the provision (credit) for income taxes recorded by the Company and the provision (credit) for income taxes calculated on an unmodified, separate return basis was not significant for any periods presented. The Company’s unrecognized tax benefits at April 28, 2019 were $30.4 million, compared to $36.3 million at October 28, 2018. The liability at April 28, 2019, October 28, 2018, and April 29, 2018 consisted of approximately $15.4 million, $19.4 million, and $19.8 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. 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 12 months would not be significant. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Apr. 28, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | (9) 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 were as follows (in millions of dollars): April 28, 2019 October 28, 2018 April 29, 2018 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed – net $ 27,822.5 $ 27,765.7 $ 26,594.7 $ 26,390.4 $ 25,418.0 $ 25,259.1 Retail notes securitized – net 4,754.7 4,726.6 3,945.3 3,894.6 4,323.2 4,272.5 Securitization borrowings 4,643.9 4,652.5 3,881.7 3,869.5 4,287.9 4,273.9 Current maturities of long-term borrowings 4,629.7 4,619.4 4,587.6 4,577.8 5,664.8 5,665.7 Long-term borrowings 19,705.9 19,924.3 19,432.2 19,535.8 17,596.9 17,661.7 * 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 fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Marketable securities International debt securities $ 4.0 Receivables from John Deere Derivatives: Interest rate contracts 112.4 $ 55.9 $ 70.2 Cross-currency interest rate contracts 1.1 3.4 3.0 Other assets Derivatives: Interest rate contracts .1 .4 .9 Foreign exchange contracts 36.6 22.0 30.1 Total assets * $ 154.2 $ 81.7 $ 104.2 Other payables to John Deere Derivatives: Interest rate contracts $ 142.4 $ 342.4 $ 341.0 Cross-currency interest rate contracts 2.2 .1 1.6 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 4.5 1.4 Total liabilities $ 149.1 $ 343.9 $ 342.6 * Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds. The international debt securities mature within one year or less. At April 28, 2019, the amortized cost basis and fair value of these available-for-sale debt securities were $4.0 million and $4.0 million, respectively. Fair value, nonrecurring Level 3 measurements related to Receivables with specific allowances were not significant during any periods presented. See Note 4 for additional information. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable Securities – The international debt securities were valued using quoted prices for identical assets in inactive markets. 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. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Apr. 28, 2019 | |
Derivative Instruments | |
Derivative Instruments | (10) Derivative 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 a cash flow hedge, a fair value hedge, or remains undesignated. 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Cash flow hedges Certain 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 April 28, 2019, October 28, 2018, and April 29, 2018 were $2,800.0 million, $3,050.0 million, and $1,800.0 million, respectively. Fair value gains or losses on these cash flow hedges were recorded in OCI and subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. 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 April 28, 2019 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $1.2 million after-tax. These contracts mature in up to 20 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 these receive-fixed/pay-variable interest rate contracts at April 28, 2019, October 28, 2018, and April 29, 2018 were $9,093.2 million, $8,096.6 million, and $8,071.6 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense. The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued April 28, 2019 Hedged Item Relationships Relationships Total Current maturities of long-term borrowings $ 189.6 $ 1.3 $ (4.4) $ (3.1) Long-term borrowings 8,798.3 (31.1) (37.6) (68.7) 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 these interest rate swaps at April 28, 2019, October 28, 2018, and April 29, 2018 were $1,880.3 million, $1,899.6 million, and $2,419.9 million, the foreign exchange contracts were $2,261.5 million, $1,564.3 million, and $1,487.4 million, and the cross‑currency interest rate contracts were $89.5 million, $71.8 million, and $82.4 million, respectively. At April 28, 2019, October 28, 2018, and April 29, 2018 there were also $2,034.0 million, $1,519.1 million, and $1,932.5 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 were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 100.3 $ 29.0 $ 34.0 Not designated as hedging instruments: Interest rate contracts 12.1 26.9 36.2 Cross-currency interest rate contracts 1.1 3.4 3.0 Total not designated 13.2 30.3 39.2 Other Assets Not designated as hedging instruments: Interest rate contracts .1 .4 .9 Foreign exchange contracts 36.6 22.0 30.1 Total not designated 36.7 22.4 31.0 Total derivative assets $ 150.2 $ 81.7 $ 104.2 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 122.1 $ 314.5 $ 309.5 Not designated as hedging instruments: Interest rate contracts 20.3 27.9 31.5 Cross-currency interest rate contracts 2.2 .1 1.6 Total not designated 22.5 28.0 33.1 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 4.5 1.4 Total derivative liabilities $ 149.1 $ 343.9 $ 342.6 The classification 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): Three Months Ended Six Months Ended April 28 April 29 April 28 April 29 2019 2018 2019 2018 Fair Value Hedges Interest rate contracts - Interest expense $ 139.2 $ (118.7) $ 269.6 $ (252.4) Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (6.0) 7.1 (14.6) 14.7 Reclassified from OCI Interest rate contracts - Interest expense 2.5 .9 4.6 .9 Not Designated as Hedges Interest rate contracts - Interest expense * $ (8.0) $ (3.1) $ (11.7) $ (1.8) Foreign exchange contracts - Administrative and operating expenses * 39.5 71.9 16.5 (31.4) Total not designated $ 31.5 $ 68.8 $ 4.8 $ (33.2) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. Included in the table above are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amounts the Company recognized on these affiliate party transactions for the three months ended April 28, 2019 and April 29, 2018 were a gain of $133.9 million and a loss of $120.0 million, respectively. The amounts the Company recognized on these affiliate party transactions for the six months ended April 28, 2019 and April 29, 2018 were a gain of $260.2 million and a loss of $254.7 million, respectively. Counterparty Risk and Collateral 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. Each master agreement executed with an unrelated external counterparty permits the net settlement of amounts owed in the event of default or termination. 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 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 the 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 April 28, 2019, October 28, 2018, and April 29, 2018, 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 an amount equal to any liability position, prior to considering applicable netting provisions. 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 loss sharing agreement increased the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, by $17.4 million as of April 28, 2019. The loss sharing agreement did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of October 28, 2018 and April 29, 2018. 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): April 28, 2019 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 36.7 $ (1.0) $ 35.7 John Deere 113.5 (97.1) 16.4 Liabilities External 4.5 (1.0) 3.5 John Deere 144.6 (97.1) 47.5 October 28, 2018 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 22.4 $ (.1) $ 22.3 John Deere 59.3 (27.6) 31.7 Liabilities External 1.4 (.1) 1.3 John Deere 342.5 (27.6) 314.9 April 29, 2018 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 31.0 $ 31.0 John Deere 73.2 $ (32.9) 40.3 Liabilities John Deere 342.6 (32.9) 309.7 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Apr. 28, 2019 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | (11) 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 $.1 million for the second quarter and $.2 million for the first six months of 2019, compared with $1.7 million and $3.4 million for the same periods last year. The accumulated benefit obligation and plan net assets for the employees of the Company are not determined separately from Deere & Company. The Company provides defined benefit health care and life insurance plans for certain 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 $1.3 million for the second quarter and $2.5 million for the first six months of 2019, compared with $.6 million and $1.3 million for the same periods last year. Further disclosure for these plans is included in Deere & Company’s Form 10-Q for the quarter ended April 28, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Apr. 28, 2019 | |
Summary of Significant Accounting Policies | |
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. |
Fiscal Year | The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The second quarter ends for fiscal year 2019 and 2018 were April 28, 2019 and April 29, 2018, respectively. Both periods contained 13 weeks. |
Receivables - Non-Performing, Policy | 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 based on delinquency status. Non-performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes, revolving charge accounts, and finance lease accounts are 90 days delinquent, accrual of finance income and lease revenue is suspended. 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. 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. During the first quarter of 2019, the Company amended the timing in which finance income and lease revenue is generally suspended on retail notes, revolving charge accounts, and finance lease accounts from 120 days delinquent to 90 days delinquent. This change in estimate was made on a prospective basis and did not have a significant effect on the Company’s consolidated financial statements. Management’s methodology to determine the collectability of delinquent accounts was not affected by the change. Receivable balances are written off to the allowance for credit losses when, in the judgement of management, they are considered uncollectible. Generally, when retail notes and finance lease accounts are 120 days delinquent, 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 account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses. 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 that are impaired are generally classified as non-performing. |
Receivables - Allowance for Credit Losses, Policy | 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 in the Company’s major markets and geographies, 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. |
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. |
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 a cash flow hedge, a fair value hedge, or remains undesignated. 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. |
Other Comprehensive Income It_2
Other Comprehensive Income Items (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
Other Comprehensive Income Items | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): Unrealized Accumulated Cumulative Gain (Loss) Other Translation on Comprehensive Adjustment Derivatives Income (Loss) Balance October 29, 2017 $ (60.0) $ 4.2 $ (55.8) Other comprehensive income (loss) items before reclassification 13.8 10.9 24.7 Amounts reclassified from accumulated other comprehensive income (.7) (.7) Net current period other comprehensive income (loss) 13.8 10.2 24.0 Balance April 29, 2018 $ (46.2) $ 14.4 $ (31.8) Balance October 28, 2018 $ (80.7) $ 14.8 $ (65.9) Other comprehensive income (loss) items before reclassification (6.4) (11.5) (17.9) Amounts reclassified from accumulated other comprehensive income (3.6) (3.6) Net current period other comprehensive income (loss) (6.4) (15.1) (21.5) Balance April 28, 2019 $ (87.1) $ (.3) $ (87.4) |
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 Three Months Ended April 28, 2019 Amount Credit Amount Cumulative translation adjustment $ (7.2) $ (7.2) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (6.0) $ 1.3 (4.7) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (2.5) .5 (2.0) Net unrealized gain (loss) on derivatives (8.5) 1.8 (6.7) Total other comprehensive income (loss) $ (15.7) $ 1.8 $ (13.9) Six Months Ended April 28, 2019 Cumulative translation adjustment $ (6.4) $ (6.4) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (14.6) $ 3.1 (11.5) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (4.6) 1.0 (3.6) Net unrealized gain (loss) on derivatives (19.2) 4.1 (15.1) Total other comprehensive income (loss) $ (25.6) $ 4.1 $ (21.5) Three Months Ended April 29, 2018 Cumulative translation adjustment $ (17.2) $ (17.2) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 7.1 $ (1.5) 5.6 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (.9) .2 (.7) Net unrealized gain (loss) on derivatives 6.2 (1.3) 4.9 Total other comprehensive income (loss) $ (11.0) $ (1.3) $ (12.3) Six Months Ended April 29, 2018 Cumulative translation adjustment $ 13.8 $ 13.8 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 14.7 $ (3.8) 10.9 Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense (.9) .2 (.7) Net unrealized gain (loss) on derivatives 13.8 (3.6) 10.2 Total other comprehensive income (loss) $ 27.6 $ (3.6) $ 24.0 |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
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 was as follows (in millions of dollars): April 28, 2019 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 116.7 $ 66.8 $ .7 $ 184.2 Construction and forestry 86.7 39.8 126.5 Revolving charge accounts: Agriculture and turf 23.6 11.8 35.4 Construction and forestry 3.7 1.3 5.0 Wholesale receivables: Agriculture and turf 5.1 2.1 .8 8.0 Construction and forestry .4 .4 Financing leases: Agriculture and turf 4.4 1.7 .1 6.2 Construction and forestry 2.6 .7 3.3 Total Receivables $ 243.2 $ 124.2 $ 1.6 $ 369.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 184.2 $ 197.7 $ 14,621.5 $ 15,003.4 Construction and forestry 126.5 110.7 2,774.4 3,011.6 Revolving charge accounts: Agriculture and turf 35.4 47.1 3,059.2 3,141.7 Construction and forestry 5.0 1.0 88.2 94.2 Wholesale receivables: Agriculture and turf 8.0 6.2 8,606.6 8,620.8 Construction and forestry .4 4.5 2,184.0 2,188.9 Financing leases: Agriculture and turf 6.2 11.6 462.9 480.7 Construction and forestry 3.3 2.9 140.1 146.3 Total Receivables $ 369.0 $ 381.7 $ 31,936.9 $ 32,687.6 October 28, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 119.7 $ 67.5 $ 57.5 $ 244.7 Construction and forestry 75.9 44.8 49.7 170.4 Revolving charge accounts: Agriculture and turf 22.8 8.3 4.6 35.7 Construction and forestry 4.0 1.2 .8 6.0 Wholesale receivables: Agriculture and turf 1.7 .4 1.1 3.2 Construction and forestry 1.2 1.2 Financing leases: Agriculture and turf 9.9 6.1 2.3 18.3 Construction and forestry 1.7 1.1 .9 3.7 Total Receivables $ 236.9 $ 129.4 $ 116.9 $ 483.2 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 244.7 $ 95.9 $ 14,838.6 $ 15,179.2 Construction and forestry 170.4 28.5 2,732.8 2,931.7 Revolving charge accounts: Agriculture and turf 35.7 1.3 3,659.2 3,696.2 Construction and forestry 6.0 95.4 101.4 Wholesale receivables: Agriculture and turf 3.2 7.3 6,135.5 6,146.0 Construction and forestry 1.2 1,820.4 1,821.6 Financing leases: Agriculture and turf 18.3 8.4 597.5 624.2 Construction and forestry 3.7 .6 142.1 146.4 Total Receivables $ 483.2 $ 142.0 $ 30,021.5 $ 30,646.7 April 29, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 104.1 $ 51.1 $ 40.1 $ 195.3 Construction and forestry 89.7 43.2 34.3 167.2 Revolving charge accounts: Agriculture and turf 16.4 9.7 25.4 51.5 Construction and forestry 2.9 1.6 .7 5.2 Wholesale receivables: Agriculture and turf 3.0 1.8 2.1 6.9 Construction and forestry .6 .6 Financing leases: Agriculture and turf 12.7 3.2 .9 16.8 Construction and forestry 2.2 1.2 .7 4.1 Total Receivables $ 231.6 $ 111.8 $ 104.2 $ 447.6 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 195.3 $ 70.6 $ 13,917.1 $ 14,183.0 Construction and forestry 167.2 28.8 2,528.0 2,724.0 Revolving charge accounts: Agriculture and turf 51.5 1.5 3,015.3 3,068.3 Construction and forestry 5.2 .1 78.9 84.2 Wholesale receivables: Agriculture and turf 6.9 5.9 7,552.2 7,565.0 Construction and forestry .6 1,564.1 1,564.7 Financing leases: Agriculture and turf 16.8 9.3 494.8 520.9 Construction and forestry 4.1 1.0 140.8 145.9 Total Receivables $ 447.6 $ 117.2 $ 29,291.2 $ 29,856.0 |
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): Three Months Ended April 28, 2019 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 51.2 $ 42.3 $ 7.9 $ 5.3 $ 106.7 Provision for credit losses 8.1 16.3 .2 1.5 26.1 Write-offs (6.4) (21.5) (1.0) (28.9) Recoveries 1.3 5.2 .2 6.7 Translation adjustments (.1) (.1) (.2) End of period balance $ 54.1 $ 42.3 $ 8.0 $ 6.0 $ 110.4 Six Months Ended April 28, 2019 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 51.6 $ 42.3 $ 8.0 $ 4.8 $ 106.7 Provision (credit) for credit losses 12.6 15.4 (3.7) 2.6 26.9 Write-offs (13.2) (25.4) (1.6) (40.2) Recoveries 3.2 10.0 3.6 .2 17.0 Translation adjustments (.1) .1 End of period balance $ 54.1 $ 42.3 $ 8.0 $ 6.0 $ 110.4 Balance individually evaluated * $ 1.8 $ 2.9 $ .7 $ 5.4 Receivables: End of period balance $ 18,015.0 $ 3,235.9 $ 10,809.7 $ 627.0 $ 32,687.6 Balance individually evaluated * $ 73.6 $ 2.4 $ 9.4 $ 1.1 $ 86.5 * Remainder is collectively evaluated. Three Months Ended April 29, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.8 $ 39.7 $ 10.2 $ 8.4 $ 114.1 Provision for credit losses 3.7 8.8 .3 .5 13.3 Write-offs (4.7) (14.3) (.4) (.6) (20.0) Recoveries 2.0 5.5 .2 7.7 Translation adjustments (.2) (.2) .1 (.3) End of period balance $ 56.6 $ 39.7 $ 9.9 $ 8.6 $ 114.8 Six Months Ended April 29, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Provision for credit losses 6.0 8.4 .4 1.3 16.1 Write-offs (9.9) (18.9) (.5) (1.5) (30.8) Recoveries 4.6 10.6 .3 15.5 Translation adjustments .2 (.1) .1 .2 End of period balance $ 56.6 $ 39.7 $ 9.9 $ 8.6 $ 114.8 Balance individually evaluated * $ .1 $ 2.5 $ .1 $ 2.7 Receivables: End of period balance $ 16,907.0 $ 3,152.5 $ 9,129.7 $ 666.8 $ 29,856.0 Balance individually evaluated * $ 45.8 $ 1.1 $ 10.3 $ .2 $ 57.4 * Remainder is collectively evaluated. |
Analysis of Impaired Receivables | An analysis of impaired Receivables was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment April 28, 2019 * Receivables with specific allowance: Retail notes $ 4.8 $ 4.6 $ 1.8 $ 4.9 Wholesale receivables 5.9 5.9 2.9 5.8 Financing leases .7 .6 .7 .7 Total with specific allowance 11.4 11.1 5.4 11.4 Receivables without specific allowance: Retail notes 25.3 24.8 26.5 Wholesale receivables 1.3 1.3 .5 Total without specific allowance 26.6 26.1 27.0 Total $ 38.0 $ 37.2 $ 5.4 $ 38.4 Agriculture and turf $ 32.7 $ 32.1 $ 5.1 $ 33.1 Construction and forestry 5.3 5.1 .3 5.3 Total $ 38.0 $ 37.2 $ 5.4 $ 38.4 October 28, 2018 * Receivables with specific allowance: Retail notes $ .8 $ .6 $ .1 $ .9 Wholesale receivables 5.8 5.8 2.8 6.7 Total with specific allowance 6.6 6.4 2.9 7.6 Receivables without specific allowance: Retail notes 23.9 23.6 26.1 Wholesale receivables 2.4 2.4 2.6 Total without specific allowance 26.3 26.0 28.7 Total $ 32.9 $ 32.4 $ 2.9 $ 36.3 Agriculture and turf $ 28.8 $ 28.4 $ 2.9 $ 31.7 Construction and forestry 4.1 4.0 4.6 Total $ 32.9 $ 32.4 $ 2.9 $ 36.3 April 29, 2018 * Receivables with specific allowance: Retail notes $ .8 $ .8 $ .1 $ .9 Wholesale receivables 6.7 6.7 2.5 8.1 Financing leases .2 .2 .1 .2 Total with specific allowance 7.7 7.7 2.7 9.2 Receivables without specific allowance: Retail notes 25.7 25.6 26.6 Wholesale receivables 1.9 1.8 4.2 Total without specific allowance 27.6 27.4 30.8 Total $ 35.3 $ 35.1 $ 2.7 $ 40.0 Agriculture and turf $ 29.4 $ 29.2 $ 2.6 $ 33.8 Construction and forestry 5.9 5.9 .1 6.2 Total $ 35.3 $ 35.1 $ 2.7 $ 40.0 * Finance income recognized was not material. |
Securitization of Receivables (
Securitization of Receivables (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
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 was as follows (in millions of dollars): April 28 2019 Carrying value of liabilities $ 1,382.0 Maximum exposure to loss 1,477.2 |
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 were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Retail notes securitized $ 4,766.4 $ 3,954.9 $ 4,337.0 Allowance for credit losses (11.7) (9.6) (13.8) Other assets 105.1 108.2 121.6 Total restricted securitized assets $ 4,859.8 $ 4,053.5 $ 4,444.8 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Securitization borrowings $ 4,643.9 $ 3,881.7 $ 4,287.9 Accrued interest on borrowings 3.9 3.2 3.4 Total liabilities related to restricted securitized assets $ 4,647.8 $ 3,884.9 $ 4,291.3 |
Notes Receivable from John De_2
Notes Receivable from John Deere (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Limited Liability Company John Deere Financial $ 128.4 $ 123.5 $ 98.6 Banco John Deere S.A. 95.6 71.9 52.7 Total Notes Receivable from John Deere $ 224.0 $ 195.4 $ 151.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
Income Taxes | |
Tax Reform Measurement Period Adjustments and Effects on Results | Those adjustments for the second quarter and first six months of 2018 were as follows (in millions of dollars): April 29, 2018 Three Months Ended Six Months Ended Net deferred tax liability remeasurement $ (18.5) $ (322.4) Deemed earnings repatriation tax .1 15.7 Total discrete tax (benefit) expense $ (18.4) $ (306.7) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
Fair Value Measurements | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars): April 28, 2019 October 28, 2018 April 29, 2018 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed – net $ 27,822.5 $ 27,765.7 $ 26,594.7 $ 26,390.4 $ 25,418.0 $ 25,259.1 Retail notes securitized – net 4,754.7 4,726.6 3,945.3 3,894.6 4,323.2 4,272.5 Securitization borrowings 4,643.9 4,652.5 3,881.7 3,869.5 4,287.9 4,273.9 Current maturities of long-term borrowings 4,629.7 4,619.4 4,587.6 4,577.8 5,664.8 5,665.7 Long-term borrowings 19,705.9 19,924.3 19,432.2 19,535.8 17,596.9 17,661.7 * Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value as Level 2 Measurements on a Recurring Basis | Assets and liabilities measured at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Marketable securities International debt securities $ 4.0 Receivables from John Deere Derivatives: Interest rate contracts 112.4 $ 55.9 $ 70.2 Cross-currency interest rate contracts 1.1 3.4 3.0 Other assets Derivatives: Interest rate contracts .1 .4 .9 Foreign exchange contracts 36.6 22.0 30.1 Total assets * $ 154.2 $ 81.7 $ 104.2 Other payables to John Deere Derivatives: Interest rate contracts $ 142.4 $ 342.4 $ 341.0 Cross-currency interest rate contracts 2.2 .1 1.6 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 4.5 1.4 Total liabilities $ 149.1 $ 343.9 $ 342.6 * Excluded from this table were the Company’s cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of time deposits and money market funds. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Apr. 28, 2019 | |
Derivative Instruments | |
Amounts Recorded in the Consolidated Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows: Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued April 28, 2019 Hedged Item Relationships Relationships Total Current maturities of long-term borrowings $ 189.6 $ 1.3 $ (4.4) $ (3.1) Long-term borrowings 8,798.3 (31.1) (37.6) (68.7) |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet were as follows (in millions of dollars): April 28 October 28 April 29 2019 2018 2018 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 100.3 $ 29.0 $ 34.0 Not designated as hedging instruments: Interest rate contracts 12.1 26.9 36.2 Cross-currency interest rate contracts 1.1 3.4 3.0 Total not designated 13.2 30.3 39.2 Other Assets Not designated as hedging instruments: Interest rate contracts .1 .4 .9 Foreign exchange contracts 36.6 22.0 30.1 Total not designated 36.7 22.4 31.0 Total derivative assets $ 150.2 $ 81.7 $ 104.2 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 122.1 $ 314.5 $ 309.5 Not designated as hedging instruments: Interest rate contracts 20.3 27.9 31.5 Cross-currency interest rate contracts 2.2 .1 1.6 Total not designated 22.5 28.0 33.1 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 4.5 1.4 Total derivative liabilities $ 149.1 $ 343.9 $ 342.6 |
Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income | The classification 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): Three Months Ended Six Months Ended April 28 April 29 April 28 April 29 2019 2018 2019 2018 Fair Value Hedges Interest rate contracts - Interest expense $ 139.2 $ (118.7) $ 269.6 $ (252.4) Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (6.0) 7.1 (14.6) 14.7 Reclassified from OCI Interest rate contracts - Interest expense 2.5 .9 4.6 .9 Not Designated as Hedges Interest rate contracts - Interest expense * $ (8.0) $ (3.1) $ (11.7) $ (1.8) Foreign exchange contracts - Administrative and operating expenses * 39.5 71.9 16.5 (31.4) Total not designated $ 31.5 $ 68.8 $ 4.8 $ (33.2) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. |
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): April 28, 2019 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 36.7 $ (1.0) $ 35.7 John Deere 113.5 (97.1) 16.4 Liabilities External 4.5 (1.0) 3.5 John Deere 144.6 (97.1) 47.5 October 28, 2018 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 22.4 $ (.1) $ 22.3 John Deere 59.3 (27.6) 31.7 Liabilities External 1.4 (.1) 1.3 John Deere 342.5 (27.6) 314.9 April 29, 2018 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 31.0 $ 31.0 John Deere 73.2 $ (32.9) 40.3 Liabilities John Deere 342.6 (32.9) 309.7 |
Organization and Consolidation
Organization and Consolidation (Details) | 3 Months Ended | |
Apr. 28, 2019 | Apr. 29, 2018 | |
Organization and Consolidation | ||
Fiscal period duration | 91 days | 91 days |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 | Oct. 29, 2017 |
New Accounting Standards | ||||
Restricted cash | $ 91.5 | $ 103.4 | $ 120.2 | $ 125.9 |
Other Comprehensive Income It_3
Other Comprehensive Income Items - After-Tax Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | $ 3,984.2 | $ 4,072.9 | $ 4,070 | $ 3,657.2 |
Net current period other comprehensive income (loss) | (13.9) | (12.3) | (21.5) | 24 |
Balance | 4,024.6 | 3,834.8 | 4,024.6 | 3,834.8 |
Accumulated Other Comprehensive Income (Loss) | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (65.9) | (55.8) | ||
Other comprehensive income (loss) items before reclassification | (17.9) | 24.7 | ||
Amounts reclassified from accumulated other comprehensive income | (3.6) | (0.7) | ||
Net current period other comprehensive income (loss) | (21.5) | 24 | ||
Balance | (87.4) | (31.8) | (87.4) | (31.8) |
Cumulative Translation Adjustment | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (80.7) | (60) | ||
Other comprehensive income (loss) items before reclassification | (6.4) | 13.8 | ||
Net current period other comprehensive income (loss) | (7.2) | (17.2) | (6.4) | 13.8 |
Balance | (87.1) | (46.2) | (87.1) | (46.2) |
Unrealized Gain (Loss) on Derivatives | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | 14.8 | 4.2 | ||
Other comprehensive income (loss) items before reclassification | (4.7) | 5.6 | (11.5) | 10.9 |
Amounts reclassified from accumulated other comprehensive income | (3.6) | (0.7) | ||
Net current period other comprehensive income (loss) | (6.7) | 4.9 | (15.1) | 10.2 |
Balance | $ (0.3) | $ 14.4 | $ (0.3) | $ 14.4 |
Other Comprehensive Income It_4
Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
Other comprehensive income (loss), before tax | ||||
Interest expense | $ (252) | $ (180.3) | $ (478.5) | $ (334.4) |
Total other comprehensive income (loss), before tax | (15.7) | (11) | (25.6) | 27.6 |
Other comprehensive income (loss), tax (expense) credit | ||||
Total other comprehensive income (loss), tax (expense) credit | 1.8 | (1.3) | 4.1 | (3.6) |
Other comprehensive income (loss), after tax | ||||
Other comprehensive income (loss), net of income taxes | (13.9) | (12.3) | (21.5) | 24 |
Cumulative Translation Adjustment | ||||
Other comprehensive income (loss), before tax | ||||
Total other comprehensive income (loss), before tax | (7.2) | (17.2) | (6.4) | 13.8 |
Other comprehensive income (loss), after tax | ||||
Unrealized hedging gain (loss), after tax | (6.4) | 13.8 | ||
Other comprehensive income (loss), net of income taxes | (7.2) | (17.2) | (6.4) | 13.8 |
Unrealized Gain (Loss) on Derivatives | ||||
Other comprehensive income (loss), before tax | ||||
Unrealized hedging gain (loss), before tax | (6) | 7.1 | (14.6) | 14.7 |
Total other comprehensive income (loss), before tax | (8.5) | 6.2 | (19.2) | 13.8 |
Other comprehensive income (loss), tax (expense) credit | ||||
Unrealized hedging gain (loss), tax (expense) credit | 1.3 | (1.5) | 3.1 | (3.8) |
Total other comprehensive income (loss), tax (expense) credit | 1.8 | (1.3) | 4.1 | (3.6) |
Other comprehensive income (loss), after tax | ||||
Unrealized hedging gain (loss), after tax | (4.7) | 5.6 | (11.5) | 10.9 |
Reclassification of realized (gain) loss, after tax | (3.6) | (0.7) | ||
Other comprehensive income (loss), net of income taxes | (6.7) | 4.9 | (15.1) | 10.2 |
Unrealized Gain (Loss) on Derivatives | Interest rate contracts | Reclassifications of realized gain (loss) | ||||
Other comprehensive income (loss), before tax | ||||
Interest expense | (2.5) | (0.9) | (4.6) | (0.9) |
Other comprehensive income (loss), tax (expense) credit | ||||
Reclassification of realized (gain) loss, tax expense (credit) | 0.5 | 0.2 | 1 | 0.2 |
Other comprehensive income (loss), after tax | ||||
Reclassification of realized (gain) loss, after tax | $ (2) | $ (0.7) | $ (3.6) | $ (0.7) |
Receivables - Past Due Age Anal
Receivables - Past Due Age Analysis (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 | |
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 | $ 369 | $ 483.2 | $ 447.6 |
Total Non-Performing | 381.7 | 142 | 117.2 |
Current | 31,936.9 | 30,021.5 | 29,291.2 |
Total Receivables | 32,687.6 | 30,646.7 | 29,856 |
30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 243.2 | 236.9 | 231.6 |
60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 124.2 | 129.4 | 111.8 |
90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 1.6 | $ 116.9 | 104.2 |
Retail notes | |||
Receivable, Past Due | |||
Generally the number of days for a financing receivable to be considered non-performing | 90 days | 120 days | |
Generally the number of days before a receivable is delinquent 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 | $ 18,015 | 16,907 | |
Retail notes | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 184.2 | $ 244.7 | 195.3 |
Total Non-Performing | 197.7 | 95.9 | 70.6 |
Current | 14,621.5 | 14,838.6 | 13,917.1 |
Total Receivables | 15,003.4 | 15,179.2 | 14,183 |
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 | 116.7 | 119.7 | 104.1 |
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 | 66.8 | 67.5 | 51.1 |
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 | 0.7 | 57.5 | 40.1 |
Retail notes | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 126.5 | 170.4 | 167.2 |
Total Non-Performing | 110.7 | 28.5 | 28.8 |
Current | 2,774.4 | 2,732.8 | 2,528 |
Total Receivables | 3,011.6 | 2,931.7 | 2,724 |
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 | 86.7 | 75.9 | 89.7 |
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 | $ 39.8 | 44.8 | 43.2 |
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 | $ 49.7 | 34.3 | |
Revolving charge accounts | |||
Receivable, Past Due | |||
Generally the number of days for a financing receivable to be considered non-performing | 90 days | 120 days | |
Generally the number of days before a receivable is delinquent 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 | $ 3,235.9 | $ 3,797.6 | 3,152.5 |
Revolving charge accounts | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 35.4 | 35.7 | 51.5 |
Total Non-Performing | 47.1 | 1.3 | 1.5 |
Current | 3,059.2 | 3,659.2 | 3,015.3 |
Total Receivables | 3,141.7 | 3,696.2 | 3,068.3 |
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 | 23.6 | 22.8 | 16.4 |
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 | 11.8 | 8.3 | 9.7 |
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 | 4.6 | 25.4 | |
Revolving charge accounts | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 5 | 6 | 5.2 |
Total Non-Performing | 1 | 0.1 | |
Current | 88.2 | 95.4 | 78.9 |
Total Receivables | 94.2 | 101.4 | 84.2 |
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 | 3.7 | 4 | 2.9 |
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 | $ 1.3 | 1.2 | 1.6 |
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 | 0.8 | 0.7 | |
Wholesale receivables | |||
Receivable, Past Due | |||
Generally the number of days for a financing receivable to be considered non-performing | 60 days | ||
Generally the number of days before a receivable is delinquent 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 | $ 10,809.7 | 7,967.6 | 9,129.7 |
Wholesale receivables | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 8 | 3.2 | 6.9 |
Total Non-Performing | 6.2 | 7.3 | 5.9 |
Current | 8,606.6 | 6,135.5 | 7,552.2 |
Total Receivables | 8,620.8 | 6,146 | 7,565 |
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 | 5.1 | 1.7 | 3 |
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 | 2.1 | 0.4 | 1.8 |
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 | 0.8 | 1.1 | 2.1 |
Wholesale receivables | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.4 | 1.2 | 0.6 |
Total Non-Performing | 4.5 | ||
Current | 2,184 | 1,820.4 | 1,564.1 |
Total Receivables | 2,188.9 | 1,821.6 | 1,564.7 |
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 | $ 0.4 | $ 1.2 | 0.6 |
Financing leases | |||
Receivable, Past Due | |||
Generally the number of days for a financing receivable to be considered non-performing | 90 days | 120 days | |
Generally the number of days before a receivable is delinquent 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 | $ 627 | $ 770.6 | 666.8 |
Financing leases | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 6.2 | 18.3 | 16.8 |
Total Non-Performing | 11.6 | 8.4 | 9.3 |
Current | 462.9 | 597.5 | 494.8 |
Total Receivables | 480.7 | 624.2 | 520.9 |
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 | 4.4 | 9.9 | 12.7 |
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 | 1.7 | 6.1 | 3.2 |
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 | 0.1 | 2.3 | 0.9 |
Financing leases | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.3 | 3.7 | 4.1 |
Total Non-Performing | 2.9 | 0.6 | 1 |
Current | 140.1 | 142.1 | 140.8 |
Total Receivables | 146.3 | 146.4 | 145.9 |
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 | 2.6 | 1.7 | 2.2 |
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 | $ 0.7 | 1.1 | 1.2 |
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 | $ 0.9 | $ 0.7 |
Receivables - Allowance for Cre
Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | Oct. 28, 2018 | |
Allowance: | |||||
Beginning of period balance | $ 106.7 | $ 114.1 | $ 106.7 | $ 113.8 | |
Provision (credit) for credit losses | 26.1 | 13.3 | 26.9 | 16.1 | |
Write-offs | (28.9) | (20) | (40.2) | (30.8) | |
Recoveries | 6.7 | 7.7 | 17 | 15.5 | |
Translation adjustments | (0.2) | (0.3) | 0.2 | ||
End of period balance | 110.4 | 114.8 | 110.4 | 114.8 | |
Balance individually evaluated | 5.4 | 2.7 | 5.4 | 2.7 | |
Receivables: | |||||
End of period balance | 32,687.6 | 29,856 | 32,687.6 | 29,856 | $ 30,646.7 |
Balance individually evaluated | 86.5 | 57.4 | 86.5 | 57.4 | |
Retail notes | |||||
Allowance: | |||||
Beginning of period balance | 51.2 | 55.8 | 51.6 | 55.7 | |
Provision (credit) for credit losses | 8.1 | 3.7 | 12.6 | 6 | |
Write-offs | (6.4) | (4.7) | (13.2) | (9.9) | |
Recoveries | 1.3 | 2 | 3.2 | 4.6 | |
Translation adjustments | (0.1) | (0.2) | (0.1) | 0.2 | |
End of period balance | 54.1 | 56.6 | 54.1 | 56.6 | |
Balance individually evaluated | 1.8 | 0.1 | 1.8 | 0.1 | |
Receivables: | |||||
End of period balance | 18,015 | 16,907 | 18,015 | 16,907 | |
Balance individually evaluated | 73.6 | 45.8 | 73.6 | 45.8 | |
Revolving charge accounts | |||||
Allowance: | |||||
Beginning of period balance | 42.3 | 39.7 | 42.3 | 39.7 | |
Provision (credit) for credit losses | 16.3 | 8.8 | 15.4 | 8.4 | |
Write-offs | (21.5) | (14.3) | (25.4) | (18.9) | |
Recoveries | 5.2 | 5.5 | 10 | 10.6 | |
Translation adjustments | (0.1) | ||||
End of period balance | 42.3 | 39.7 | 42.3 | 39.7 | |
Receivables: | |||||
End of period balance | 3,235.9 | 3,152.5 | 3,235.9 | 3,152.5 | 3,797.6 |
Balance individually evaluated | 2.4 | 1.1 | 2.4 | 1.1 | |
Wholesale receivables | |||||
Allowance: | |||||
Beginning of period balance | 7.9 | 10.2 | 8 | 9.9 | |
Provision (credit) for credit losses | 0.2 | 0.3 | (3.7) | 0.4 | |
Write-offs | (0.4) | (0.5) | |||
Recoveries | 3.6 | ||||
Translation adjustments | (0.1) | (0.2) | 0.1 | 0.1 | |
End of period balance | 8 | 9.9 | 8 | 9.9 | |
Balance individually evaluated | 2.9 | 2.5 | 2.9 | 2.5 | |
Receivables: | |||||
End of period balance | 10,809.7 | 9,129.7 | 10,809.7 | 9,129.7 | 7,967.6 |
Balance individually evaluated | 9.4 | 10.3 | 9.4 | 10.3 | |
Financing leases | |||||
Allowance: | |||||
Beginning of period balance | 5.3 | 8.4 | 4.8 | 8.5 | |
Provision (credit) for credit losses | 1.5 | 0.5 | 2.6 | 1.3 | |
Write-offs | (1) | (0.6) | (1.6) | (1.5) | |
Recoveries | 0.2 | 0.2 | 0.2 | 0.3 | |
Translation adjustments | 0.1 | ||||
End of period balance | 6 | 8.6 | 6 | 8.6 | |
Balance individually evaluated | 0.7 | 0.1 | 0.7 | 0.1 | |
Receivables: | |||||
End of period balance | 627 | 666.8 | 627 | 666.8 | $ 770.6 |
Balance individually evaluated | $ 1.1 | $ 0.2 | $ 1.1 | $ 0.2 |
Receivables - Impaired Receivab
Receivables - Impaired Receivables (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Apr. 28, 2019 | Apr. 29, 2018 | Oct. 28, 2018 | |
Recorded Investment | |||
Receivables with specific allowance | $ 11.4 | $ 7.7 | $ 6.6 |
Receivables without specific allowance | 26.6 | 27.6 | 26.3 |
Total | 38 | 35.3 | 32.9 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 11.1 | 7.7 | 6.4 |
Receivables without specific allowance | 26.1 | 27.4 | 26 |
Total | 37.2 | 35.1 | 32.4 |
Specific Allowance | 5.4 | 2.7 | 2.9 |
Average Recorded Investment | |||
Receivables with specific allowance | 11.4 | 9.2 | 7.6 |
Receivables without specific allowance | 27 | 30.8 | 28.7 |
Total | 38.4 | 40 | 36.3 |
Agriculture and turf | |||
Recorded Investment | |||
Total | 32.7 | 29.4 | 28.8 |
Unpaid Principal Balance | |||
Total | 32.1 | 29.2 | 28.4 |
Specific Allowance | 5.1 | 2.6 | 2.9 |
Average Recorded Investment | |||
Total | 33.1 | 33.8 | 31.7 |
Construction and forestry | |||
Recorded Investment | |||
Total | 5.3 | 5.9 | 4.1 |
Unpaid Principal Balance | |||
Total | 5.1 | 5.9 | 4 |
Specific Allowance | 0.3 | 0.1 | |
Average Recorded Investment | |||
Total | 5.3 | 6.2 | 4.6 |
Retail notes | |||
Recorded Investment | |||
Receivables with specific allowance | 4.8 | 0.8 | 0.8 |
Receivables without specific allowance | 25.3 | 25.7 | 23.9 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 4.6 | 0.8 | 0.6 |
Receivables without specific allowance | 24.8 | 25.6 | 23.6 |
Specific Allowance | 1.8 | 0.1 | 0.1 |
Average Recorded Investment | |||
Receivables with specific allowance | 4.9 | 0.9 | 0.9 |
Receivables without specific allowance | 26.5 | 26.6 | 26.1 |
Wholesale receivables | |||
Recorded Investment | |||
Receivables with specific allowance | 5.9 | 6.7 | 5.8 |
Receivables without specific allowance | 1.3 | 1.9 | 2.4 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 5.9 | 6.7 | 5.8 |
Receivables without specific allowance | 1.3 | 1.8 | 2.4 |
Specific Allowance | 2.9 | 2.5 | 2.8 |
Average Recorded Investment | |||
Receivables with specific allowance | 5.8 | 8.1 | 6.7 |
Receivables without specific allowance | 0.5 | 4.2 | $ 2.6 |
Financing leases | |||
Recorded Investment | |||
Receivables with specific allowance | 0.7 | 0.2 | |
Unpaid Principal Balance | |||
Receivables with specific allowance | 0.6 | 0.2 | |
Specific Allowance | 0.7 | 0.1 | |
Average Recorded Investment | |||
Receivables with specific allowance | $ 0.7 | $ 0.2 |
Receivables - Troubled Debt Res
Receivables - Troubled Debt Restructurings (Details) $ in Millions | 6 Months Ended | |
Apr. 28, 2019USD ($)item | Apr. 29, 2018USD ($)item | |
Receivables Related to Troubled Debt Restructurings | ||
Receivable contracts in troubled debt restructuring, number | item | 135 | 212 |
Receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 4.3 | $ 11.2 |
Receivables in troubled debt restructurings, aggregate balances, post-modification | 4 | 10.6 |
Receivable contracts in troubled debt restructuring, subsequently defaulted | 0 | $ 0 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
Securitization of Receivables_2
Securitization of Receivables (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 | |
Securitization of Receivables | |||
Unconsolidated conduits, carrying value of liabilities | $ 1,382 | ||
Unconsolidated conduits, maximum exposure to loss | 1,477.2 | ||
Retail notes securitized | 4,766.4 | $ 3,954.9 | $ 4,337 |
Allowance for credit losses - securitization transactions | (11.7) | (9.6) | (13.8) |
Other assets - securitization transactions | 105.1 | 108.2 | 121.6 |
Total restricted securitized assets - securitization transactions | 4,859.8 | 4,053.5 | 4,444.8 |
Securitization borrowings | 4,643.9 | 3,881.7 | 4,287.9 |
Accrued interest on borrowings - securitization transactions | 3.9 | 3.2 | 3.4 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,647.8 | 3,884.9 | 4,291.3 |
Maximum remaining term of all restricted receivables | 7 years | ||
VIE-Primary Beneficiary | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | $ 2,770.9 | 2,592.4 | 2,488.9 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,693.4 | 2,519.6 | 2,438.4 |
Non-VIE Banking Operation | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | 611.7 | 427.9 | 572.8 |
Total liabilities related to restricted securitized assets - securitization transactions | 572.4 | 399.8 | 542.6 |
VIE-Not Primary Beneficiary | |||
Securitization of Receivables | |||
Total assets | 37,500 | ||
Total restricted securitized assets - securitization transactions | 1,477.2 | 1,033.2 | 1,383.1 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,382 | $ 965.5 | $ 1,310.3 |
Notes Receivable from John De_3
Notes Receivable from John Deere (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | Oct. 28, 2018 | |
John Deere | |||||
Notes Receivable from John Deere | |||||
Interest earned | $ 4 | $ 2.3 | $ 7.6 | $ 5.1 | |
Notes receivable from John Deere | 224 | 151.3 | $ 224 | 151.3 | $ 195.4 |
John Deere | Maximum | |||||
Notes Receivable from John Deere | |||||
Maximum remaining term for related party notes receivable | 6 years | ||||
Limited Liability Company John Deere Financial | |||||
Notes Receivable from John Deere | |||||
Notes receivable from John Deere | 128.4 | 98.6 | $ 128.4 | 98.6 | 123.5 |
Banco John Deere S.A. | |||||
Notes Receivable from John Deere | |||||
Notes receivable from John Deere | $ 95.6 | $ 52.7 | $ 95.6 | $ 52.7 | $ 71.9 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | 6 Months Ended |
Apr. 28, 2019USD ($) | |
John Deere Financial Inc. | Guarantees of debt and derivatives | Medium-term notes | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 852.8 |
Weighted average interest rate (as a percent) | 2.90% |
Maximum remaining maturity | 5 years |
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 24.7 |
Notional amount | 2,708.9 |
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 | $ 1,853.9 |
Weighted average interest rate (as a percent) | 2.30% |
Maximum remaining maturity | 4 years |
Commitments and Contingencies_2
Commitments and Contingencies - Commitments (Details) $ in Millions | Apr. 28, 2019USD ($) |
Limited Liability Company John Deere Financial | |
Commitments | |
Unused commitments | $ 60.3 |
John Deere dealers | |
Commitments | |
Unused commitments | 5,600 |
Customers | |
Commitments | |
Unused commitments | $ 29,300 |
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts | 95.00% |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | Oct. 28, 2018 | |
U.S. Tax Reform | ||||
Federal corporate statutory tax rate (as a percent) | 21.00% | 23.30% | ||
Net deferred tax liability remeasement | $ (18.5) | $ (322.4) | $ (362.9) | |
Deemed earnings repatriation tax | 0.1 | 15.7 | $ 20.6 | |
Total discrete tax (benefit) expense | $ (18.4) | $ (306.7) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Unrecognized Tax Benefits | |||
Unrecognized tax benefits | $ 30.4 | $ 36.3 | |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 15.4 | $ 19.4 | $ 19.8 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Fair Values of Financial Instruments | |||
Securitization borrowings | $ 4,643.9 | $ 3,881.7 | $ 4,287.9 |
Current maturities of long-term borrowings | 4,629.7 | 4,587.6 | 5,664.8 |
Long-term borrowings | 19,705.9 | 19,432.2 | 17,596.9 |
Level 3 | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 27,765.7 | 26,390.4 | 25,259.1 |
Retail notes securitized - net | 4,726.6 | 3,894.6 | 4,272.5 |
Level 2 | |||
Fair Values of Financial Instruments | |||
Securitization borrowings | 4,652.5 | 3,869.5 | 4,273.9 |
Current maturities of long-term borrowings | 4,619.4 | 4,577.8 | 5,665.7 |
Long-term borrowings | 19,924.3 | 19,535.8 | 17,661.7 |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 27,822.5 | 26,594.7 | 25,418 |
Retail notes securitized - net | 4,754.7 | 3,945.3 | 4,323.2 |
Securitization borrowings | 4,643.9 | 3,881.7 | 4,287.9 |
Current maturities of long-term borrowings | 4,629.7 | 4,587.6 | 5,664.8 |
Long-term borrowings | $ 19,705.9 | $ 19,432.2 | $ 17,596.9 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $ 4 | ||
Derivative assets | 150.2 | $ 81.7 | $ 104.2 |
Derivative liabilities | 149.1 | 343.9 | 342.6 |
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 | |||
Total assets | 154.2 | 81.7 | 104.2 |
Total liabilities | 149.1 | 343.9 | 342.6 |
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 | 112.4 | 55.9 | 70.2 |
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 | 0.1 | 0.4 | 0.9 |
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 | 142.4 | 342.4 | 341 |
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 | 36.6 | 22 | 30.1 |
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 | 4.5 | 1.4 | |
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 | 1.1 | 3.4 | 3 |
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 | 2.2 | $ 0.1 | $ 1.6 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | Marketable Securities | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $ 4 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Debt Securities (Details) $ in Millions | Apr. 28, 2019USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 4 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | $ 4 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 | |
Cash Flow Hedges | |||
Cash flow hedge gain recorded in OCI to be reclassified within twelve months | $ 1.2 | ||
Maximum maturity of cash flow hedge interest rate contracts | 20 months | ||
Gains or losses reclassified from OCI to earnings | $ 0 | ||
Interest rate contracts | Cash flow hedges | Designated as hedges | |||
Cash Flow Hedges | |||
Notional amounts | $ 2,800 | $ 3,050 | $ 1,800 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Fair Value Hedges | Designated as hedges | |||
Fair Value Hedges | |||
Notional amounts | $ 9,093.2 | $ 8,096.6 | $ 8,071.6 |
Current Maturities of Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 189.6 | ||
Active Hedging Relationships | 1.3 | ||
Discontinued Relationships | (4.4) | ||
Total | (3.1) | ||
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 8,798.3 | ||
Active Hedging Relationships | (31.1) | ||
Discontinued Relationships | (37.6) | ||
Total | $ (68.7) |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 1,880.3 | $ 1,899.6 | $ 2,419.9 |
Interest rate caps | Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 2,034 | 1,519.1 | 1,932.5 |
Interest rate caps | Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 2,034 | 1,519.1 | 1,932.5 |
Foreign exchange contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 2,261.5 | 1,564.3 | 1,487.4 |
Cross-currency interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 89.5 | $ 71.8 | $ 82.4 |
Derivative Instruments - Fair_2
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 150.2 | $ 81.7 | $ 104.2 |
Total derivative liabilities | 149.1 | 343.9 | 342.6 |
Designated as hedges | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 100.3 | 29 | 34 |
Designated as hedges | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 122.1 | 314.5 | 309.5 |
Not Designated as Hedging Instruments | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 13.2 | 30.3 | 39.2 |
Not Designated as Hedging Instruments | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 36.7 | 22.4 | 31 |
Not Designated as Hedging Instruments | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 22.5 | 28 | 33.1 |
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 12.1 | 26.9 | 36.2 |
Not Designated as Hedging Instruments | Interest rate contracts | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 0.1 | 0.4 | 0.9 |
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 20.3 | 27.9 | 31.5 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 36.6 | 22 | 30.1 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 4.5 | 1.4 | |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 1.1 | 3.4 | 3 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 2.2 | $ 0.1 | $ 1.6 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ 31.5 | $ 68.8 | $ 4.8 | $ (33.2) |
John Deere | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Gain (loss) on derivative transactions with affiliate party | 133.9 | (120) | 260.2 | (254.7) |
Interest rate contracts | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | (6) | 7.1 | (14.6) | 14.7 |
Interest rate contracts | Interest expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 139.2 | (118.7) | 269.6 | (252.4) |
Cash flow hedges, reclassified from OCI | 2.5 | 0.9 | 4.6 | 0.9 |
Not designated as hedges, gains (losses) | (8) | (3.1) | (11.7) | (1.8) |
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) | $ 39.5 | $ 71.9 | $ 16.5 | $ (31.4) |
Derivative Instruments - Counte
Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Apr. 28, 2019 | Oct. 28, 2018 | Apr. 29, 2018 |
Derivative assets | |||
Gross Amounts Recognized | $ 150.2 | $ 81.7 | $ 104.2 |
Derivative liabilities | |||
Gross Amounts Recognized | 149.1 | 343.9 | 342.6 |
John Deere | |||
Derivative assets | |||
Gross Amounts Recognized | 113.5 | 59.3 | 73.2 |
Netting Arrangements | (97.1) | (27.6) | (32.9) |
Net Amount | 16.4 | 31.7 | 40.3 |
Derivative liabilities | |||
Gross Amounts Recognized | 144.6 | 342.5 | 342.6 |
Netting Arrangements | (97.1) | (27.6) | (32.9) |
Net Amount | 47.5 | 314.9 | 309.7 |
External | |||
Derivative assets | |||
Gross Amounts Recognized | 36.7 | 22.4 | 31 |
Netting Arrangements | (1) | (0.1) | |
Net Amount | 35.7 | 22.3 | 31 |
Derivative liabilities | |||
Gross Amounts Recognized | 4.5 | 1.4 | |
Netting Arrangements | (1) | (0.1) | |
Net Amount | 3.5 | 1.3 | |
Derivative Instruments | |||
Counterparty Risk and Collateral | |||
Aggregate liability positions for derivatives with credit risk related contingent features | 0 | 0 | 0 |
Derivative Instruments | John Deere | |||
Counterparty Risk and Collateral | |||
Increase in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement | $ 17.4 | $ 0 | $ 0 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 28, 2019 | Apr. 29, 2018 | Apr. 28, 2019 | Apr. 29, 2018 | |
Pensions | ||||
Defined Benefit Plan Disclosure | ||||
Expenses related to defined benefit plans | $ 0.1 | $ 1.7 | $ 0.2 | $ 3.4 |
OPEB | ||||
Defined Benefit Plan Disclosure | ||||
Expenses related to defined benefit plans | $ 1.3 | $ 0.6 | $ 2.5 | $ 1.3 |