Document and Entity Information
Document and Entity Information | 6 Months Ended |
May 03, 2020shares | |
Document and Entity Information | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | May 3, 2020 |
Entity File Number | 1-6458 |
Entity Registrant Name | DEERE JOHN CAPITAL CORP |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-2386361 |
Entity Address, Address Line One | 10587 Double R Boulevard, Suite 100 |
Entity Address, City or Town | Reno |
Entity Address, State or Province | NV |
Entity Address, Postal Zip Code | 89521 |
City Area Code | 775 |
Local Phone Number | 786-5527 |
Title of 12(b) Security | 2.75% Senior Notes Due 2022 |
Trading Symbol | DE22B |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 2,500 |
Current Fiscal Year End Date | --11-01 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0000027673 |
Amendment Flag | false |
Statement of Consolidated Incom
Statement of Consolidated Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Revenues | ||||
Finance income earned on retail notes | $ 231.7 | $ 214.6 | $ 466.5 | $ 423.5 |
Revolving charge account income | 74.2 | 76.6 | 154.9 | 148.7 |
Finance income earned on wholesale receivables | 110.4 | 142.7 | 220.7 | 259 |
Lease revenues | 272.6 | 245.4 | 547.5 | 484.9 |
Other income | 11.2 | 23.7 | 29.1 | 47.7 |
Total revenues | 700.1 | 703 | 1,418.7 | 1,363.8 |
Expenses | ||||
Interest expense | 216.6 | 252 | 436.4 | 478.5 |
Operating expenses: | ||||
Administrative and operating expenses | 142.4 | 112.5 | 265.9 | 210.7 |
Fees paid to John Deere | 23.3 | 12 | 48.2 | 26.8 |
Provision for credit losses | 72.7 | 26.1 | 84.8 | 26.9 |
Depreciation of equipment on operating leases | 214.3 | 180.9 | 427.8 | 356.3 |
Total operating expenses | 452.7 | 331.5 | 826.7 | 620.7 |
Total expenses | 669.3 | 583.5 | 1,263.1 | 1,099.2 |
Income of consolidated group before income taxes | 30.8 | 119.5 | 155.6 | 264.6 |
Provision for income taxes | 5.4 | 35.7 | 31.5 | 59.6 |
Income of consolidated group | 25.4 | 83.8 | 124.1 | 205 |
Equity in income of unconsolidated affiliate | 0.4 | 0.4 | 1.1 | 1 |
Net income | 25.8 | 84.2 | 125.2 | 206 |
Less: Net income (loss) attributable to noncontrolling interests | (0.1) | (0.1) | 0.1 | |
Net income attributable to the Company | $ 25.9 | $ 84.3 | $ 125.1 | $ 206 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Statement of Consolidated Comprehensive Income | ||||
Net income | $ 25.8 | $ 84.2 | $ 125.2 | $ 206 |
Other comprehensive income (loss), net of income taxes | ||||
Cumulative translation adjustment | (17) | (7.2) | (21.8) | (6.4) |
Unrealized loss on derivatives | (8.7) | (6.7) | (9) | (15.1) |
Unrealized loss on debt securities | (0.2) | (0.6) | ||
Other comprehensive income (loss), net of income taxes | (25.9) | (13.9) | (31.4) | (21.5) |
Comprehensive income (loss) of consolidated group | (0.1) | 70.3 | 93.8 | 184.5 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | $ (0.1) | (0.1) | 0.1 | |
Comprehensive income attributable to the Company | $ 70.4 | $ 93.7 | $ 184.5 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Assets | |||
Cash and cash equivalents | $ 1,266.3 | $ 632.6 | $ 525.7 |
Marketable securities | 1.7 | 3.2 | 4 |
Receivables: | |||
Total receivables | 32,941.3 | 32,821.5 | 32,687.6 |
Allowance for credit losses | (139.8) | (100.6) | (110.4) |
Total receivables - net | 32,801.5 | 32,720.9 | 32,577.2 |
Other receivables | 101.7 | 75.1 | 106.1 |
Receivables from John Deere | 759.8 | 331.9 | 113.5 |
Equipment on operating leases - net | 5,421.6 | 5,530.5 | 5,169.5 |
Notes receivable from John Deere | 294.6 | 291.7 | 224 |
Investment in unconsolidated affiliate | 17.1 | 16.4 | 15.6 |
Deferred income taxes | 33.8 | 33.2 | 36.5 |
Other assets | 423.5 | 454.4 | 563 |
Total Assets | 41,121.6 | 40,089.9 | 39,335.1 |
Short-term borrowings: | |||
Commercial paper and other notes payable | 2,181.4 | 1,460.9 | 3,484.1 |
Securitization borrowings | 4,603.5 | 4,277 | 4,643.9 |
John Deere | 2,550.4 | 1,855.3 | 1,062 |
Current maturities of long-term borrowings | 5,447.1 | 5,716.6 | 4,629.7 |
Total short-term borrowings | 14,782.4 | 13,309.8 | 13,819.7 |
Other payables to John Deere | 46.8 | 47.4 | 144.6 |
Accounts payable and accrued expenses | 877.9 | 886.7 | 839.2 |
Deposits withheld from dealers and merchants | 109 | 137.5 | 138.2 |
Deferred income taxes | 452.9 | 527.7 | 662.9 |
Long-term borrowings | 20,855.4 | 21,052.4 | 19,705.9 |
Total liabilities | 37,124.4 | 35,961.5 | 35,310.5 |
Commitments and contingencies (Note 8) | |||
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 | 2,641.7 | 2,741.6 | 2,628.4 |
Accumulated other comprehensive loss | (128.8) | (97.4) | (87.4) |
Total Company stockholder's equity | 3,995.7 | 4,127 | 4,023.8 |
Noncontrolling interests | 1.5 | 1.4 | 0.8 |
Total stockholder's equity | 3,997.2 | 4,128.4 | 4,024.6 |
Total Liabilities and Stockholder's Equity | 41,121.6 | 40,089.9 | 39,335.1 |
Retail notes | |||
Receivables: | |||
Total receivables | 19,538.6 | 18,015 | |
Allowance for credit losses | (83.3) | (48.3) | (54.1) |
Retail notes | Unrestricted | |||
Receivables: | |||
Total receivables | 14,874.5 | 15,150.5 | 13,248.6 |
Retail notes | Securitized | |||
Receivables: | |||
Total receivables | 4,664.1 | 4,349.6 | 4,766.4 |
Revolving charge accounts | |||
Receivables: | |||
Total receivables | 3,388.7 | 3,863 | 3,235.9 |
Allowance for credit losses | (42.3) | (39.3) | (42.3) |
Wholesale receivables | |||
Receivables: | |||
Total receivables | 9,343.4 | 8,706.8 | 10,809.7 |
Allowance for credit losses | (9.1) | (7.6) | (8) |
Financing leases | |||
Receivables: | |||
Total receivables | 670.6 | 751.6 | 627 |
Allowance for credit losses | $ (5.1) | $ (5.4) | $ (6) |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
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 | |
May 03, 2020 | Apr. 28, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 125.2 | $ 206 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 84.8 | 26.9 |
Provision for depreciation and amortization | 435.8 | 367.7 |
Credit for deferred income taxes | (72) | (157) |
Impairment charges | 30.8 | |
Undistributed earnings of unconsolidated affiliate | (0.9) | (0.8) |
Change in accounts payable and accrued expenses | 4 | 3.2 |
Change in accrued income taxes payable/receivable | (7.7) | 440 |
Other | 148.5 | 133.7 |
Net cash provided by operating activities | 748.5 | 1,019.7 |
Cash Flows from Investing Activities: | ||
Cost of receivables acquired (excluding wholesale) | (9,012.6) | (8,360.2) |
Collections of receivables (excluding wholesale) | 9,398.8 | 8,991.2 |
Increase in wholesale receivables - net | (713.3) | (2,863.7) |
Cost of equipment on operating leases acquired | (1,004.9) | (1,062.3) |
Proceeds from sales of equipment on operating leases | 669.5 | 627 |
Cost of notes receivable acquired from John Deere | (61.9) | (56.6) |
Collections of notes receivable from John Deere | 38.2 | 31.4 |
Purchases of marketable securities | (4) | |
Other | (34.5) | (39.2) |
Net cash used for investing activities | (720.7) | (2,736.4) |
Cash Flows from Financing Activities: | ||
Increase in commercial paper and other notes payable - net | 720.2 | 1,364.1 |
Increase in securitization borrowings - net | 326.9 | 762.8 |
Increase (decrease) in payable to John Deere - net | 724.1 | (302.4) |
Proceeds from issuance of long-term borrowings | 2,129.9 | 3,051 |
Payments of long-term borrowings | (3,033.1) | (3,002.8) |
Dividends paid | (225) | (230) |
Capital investment from John Deere | 0.1 | |
Debt issuance costs | (18.2) | (16.2) |
Net cash provided by financing activities | 624.8 | 1,626.6 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (5.3) | (4.5) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 647.3 | (94.6) |
Cash, cash equivalents, and restricted cash at beginning of period | 710.9 | 711.8 |
Cash, cash equivalents, and restricted cash at end of period | $ 1,358.2 | $ 617.2 |
Statement of Consolidated Cas_2
Statement of Consolidated Cash Flows (Parenthetical) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 | Oct. 28, 2018 |
Statement of Consolidated Cash Flows | ||||
Restricted cash | $ 91.9 | $ 78.3 | $ 91.5 | $ 103.4 |
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. 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 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 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 |
Balance at Nov. 03, 2019 | 1,482.8 | 2,741.6 | (97.4) | 1.4 | 4,128.4 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 125.1 | 0.1 | 125.2 | ||
Other comprehensive loss | (31.4) | (31.4) | |||
Dividends declared | (225) | (225) | |||
Balance at May. 03, 2020 | 1,482.8 | 2,641.7 | (128.8) | 1.5 | 3,997.2 |
Balance at Feb. 02, 2020 | 1,482.8 | 2,715.8 | (102.9) | 1.6 | 4,097.3 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 25.9 | (0.1) | 25.8 | ||
Other comprehensive loss | (25.9) | (25.9) | |||
Dividends declared | (100) | (100) | |||
Balance at May. 03, 2020 | $ 1,482.8 | $ 2,641.7 | $ (128.8) | $ 1.5 | $ 3,997.2 |
Organization and Consolidation
Organization and Consolidation | 6 Months Ended |
May 03, 2020 | |
Organization and Consolidation | |
Organization and Consolidation | (1) Organization and Consolidation John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company 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.” The Company has prepared its interim consolidated financial statements, 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. The identification and rapid spread of COVID-19 (COVID) has resulted in governments and other authorities implementing numerous measures designed to contain the virus. These and other actions have resulted in uncertainties in the Company’s business, which may result in actual results differing from those estimates. Examples of estimates used in the financial statements affected by this uncertainty include incurred credit losses, operating lease residual values and return rates, the forecasted annual effective income tax rate, and fair value measurements. 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 2020 and 2019 were May 3, 2020 and April 28, 2019, respectively. Both periods contained 13 weeks. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
May 03, 2020 | |
New Accounting Standards | |
New Accounting Standards | (2) New Accounting Standards New Accounting Standards Adopted In the first quarter of 2020, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes Accounting Standards Codification (ASC) 840, Leases. This ASU was adopted using a modified-retrospective In the first quarter of 2020, the Company adopted the clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, included in ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The adoption did not have a material effect on the Company’s consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which establishes ASC 848, Reference Rate Reform. Regulators in several countries are requiring initiatives to identify alternative reference rates to the London Interbank Offered Rates and other interbank rates. This regulatory requirement will likely result in contract revisions that will transition to alternative reference rates. This ASU provides optional, temporary guidance, simplifications, and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions resulting from the transition. The guidance in this ASU is elective and effective beginning in the second quarter of 2020 through December 31, 2022. The Company is evaluating the contracts that could be affected by an alternative reference rate and assessing the potential effects of the ASU on the consolidated financial statements. New Accounting Standards to be Adopted 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 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. The effective date will be the first quarter of fiscal year 2021. The ASU will be adopted using a modified-retrospective approach. The Company is developing models to estimate expected credit losses, assessing appropriate assumptions, designing new procedures and controls, and 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 for the portions that have not yet been adopted: (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, and (2) clarifications to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities is the first quarter of fiscal year 2021, which will not have a material effect on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes. This ASU simplifies the accounting for income taxes by modifying the treatment of intraperiod tax allocation in certain circumstances, eliminating an exception to recognizing deferred tax liabilities for outside basis differences for foreign equity method investments and foreign subsidiaries when ownership or control changes, and modifying interim period tax calculations when a loss is forecast. In addition, the ASU also provides guidance for the accounting of a franchise tax that is partially based on income, requires that enacted changes in tax laws or rates be included in the annual effective rate determination in the period that includes the enactment date, and clarifies the tax accounting of a step up in tax basis of goodwill. The effective date will be the first quarter of fiscal year 2022, with early adoption permitted. The guidance related to the foreign equity method investments, foreign subsidiaries, and franchise taxes will be adopted using a modified-retrospective approach. The remaining provisions will be adopted prospectively. The adoption is not expected to have a material effect on the Company’s consolidated financial statements. |
Other Comprehensive Income Item
Other Comprehensive Income Items | 6 Months Ended |
May 03, 2020 | |
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 Unrealized Accumulated Cumulative Gain (Loss) Gain (Loss) Other Translation on on Comprehensive Adjustment Derivatives Debt Securities Income (Loss) 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) Balance November 3, 2019 $ (88.4) $ (7.0) $ (2.0) $ (97.4) Other comprehensive income (loss) items before reclassification (21.8) (13.0) (.6) (35.4) Amounts reclassified from accumulated other comprehensive income 4.0 4.0 Net current period other comprehensive income (loss) (21.8) (9.0) (.6) (31.4) Balance May 3, 2020 $ (110.2) $ (16.0) $ (2.6) $ (128.8) 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 May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (17.0) $ (17.0) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (14.9) $ 3.1 (11.8) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 3.9 (.8) 3.1 Net unrealized gain (loss) on derivatives (11.0) 2.3 (8.7) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (.6) .4 (.2) Total other comprehensive income (loss) $ (28.6) $ 2.7 $ (25.9) Six Months Ended May 3, 2020 Cumulative translation adjustment $ (21.8) $ (21.8) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (16.5) $ 3.5 (13.0) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5.1 (1.1) 4.0 Net unrealized gain (loss) on derivatives (11.4) 2.4 (9.0) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (1.5) .9 (.6) Total other comprehensive income (loss) $ (34.7) $ 3.3 $ (31.4) Three Months Ended April 28, 2019 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) |
Receivables
Receivables | 6 Months Ended |
May 03, 2020 | |
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 finance lease Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and finance lease Due to the significant, negative effects of COVID, the Company provided short-term relief to dealers and retail customers during the second quarter of 2020. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. For retail receivable customers, which include retail notes, financing leases revolving charge accounts An age analysis of past due Receivables that are still accruing interest and non-performing Receivables was as follows (in millions of dollars): May 3, 2020 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 151.2 $ 75.3 $ 2.6 $ 229.1 Construction and forestry 97.7 44.3 142.0 Revolving charge accounts: Agriculture and turf 30.7 11.9 42.6 Construction and forestry 4.0 1.2 5.2 Wholesale receivables: Agriculture and turf 8.1 .9 2.6 11.6 Construction and forestry 1.5 1.6 1.0 4.1 Financing leases: Agriculture and turf 19.0 6.8 .7 26.5 Construction and forestry 2.0 1.5 3.5 Total Receivables $ 314.2 $ 143.5 $ 6.9 $ 464.6 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 229.1 $ 204.4 $ 15,692.0 $ 16,125.5 Construction and forestry 142.0 121.0 3,150.1 3,413.1 Revolving charge accounts: Agriculture and turf 42.6 41.4 3,215.9 3,299.9 Construction and forestry 5.2 1.1 82.5 88.8 Wholesale receivables: Agriculture and turf 11.6 3.4 7,557.5 7,572.5 Construction and forestry 4.1 2.0 1,764.8 1,770.9 Financing leases: Agriculture and turf 26.5 12.1 487.5 526.1 Construction and forestry 3.5 4.6 136.4 144.5 Total Receivables $ 464.6 $ 390.0 $ 32,086.7 $ 32,941.3 November 3, 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 $ 120.0 $ 64.2 $ 1.5 $ 185.7 Construction and forestry 73.9 26.6 100.5 Revolving charge accounts: Agriculture and turf 19.1 9.2 28.3 Construction and forestry 3.2 1.2 4.4 Wholesale receivables: Agriculture and turf 4.1 1.9 .8 6.8 Construction and forestry .1 .3 .3 .7 Financing leases: Agriculture and turf 14.6 7.8 .5 22.9 Construction and forestry 2.8 .7 3.5 Total Receivables $ 237.8 $ 111.9 $ 3.1 $ 352.8 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 185.7 $ 168.7 $ 15,831.5 $ 16,185.9 Construction and forestry 100.5 112.9 3,100.8 3,314.2 Revolving charge accounts: Agriculture and turf 28.3 6.1 3,727.9 3,762.3 Construction and forestry 4.4 .9 95.4 100.7 Wholesale receivables: Agriculture and turf 6.8 6.3 6,544.6 6,557.7 Construction and forestry .7 2.9 2,145.5 2,149.1 Financing leases: Agriculture and turf 22.9 11.6 569.8 604.3 Construction and forestry 3.5 2.5 141.3 147.3 Total Receivables $ 352.8 $ 311.9 $ 32,156.8 $ 32,821.5 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 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 May 3, 2020 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 48.5 $ 39.3 $ 9.9 $ 5.4 $ 103.1 Provision (credit) for credit losses 53.5 19.2 (.3) .3 72.7 Write-offs (19.8) (22.4) (.4) (42.6) Recoveries 1.3 6.2 .1 .1 7.7 Translation adjustments (.2) (.6) (.3) (1.1) End of period balance $ 83.3 $ 42.3 $ 9.1 $ 5.1 $ 139.8 Six Months Ended May 3, 2020 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 48.3 $ 39.3 $ 7.6 $ 5.4 $ 100.6 Provision (credit) for credit losses 66.6 18.1 (.5) .6 84.8 Write-offs (33.3) (28.8) (.8) (.8) (63.7) Recoveries 1.9 13.7 .9 .2 16.7 Translation adjustments (.2) 1.9 (.3) 1.4 End of period balance $ 83.3 $ 42.3 $ 9.1 $ 5.1 $ 139.8 Balance individually evaluated * $ 2.5 $ 4.7 $ 7.2 Receivables: End of period balance $ 19,538.6 $ 3,388.7 $ 9,343.4 $ 670.6 $ 32,941.3 Balance individually evaluated * $ 94.5 $ .1 $ 17.6 $ 1.0 $ 113.2 * Remainder is collectively evaluated. The negative economic effects related to COVID and other macroeconomic issues have significantly affected certain retail borrowers, particularly of construction equipment. As a result, the allowance for credit losses increased $36.7 million in the second quarter of 2020, reflecting higher estimated credit losses inherent in the Receivable portfolio. 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. 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 May 3, 2020 * Receivables with specific allowance: Retail notes $ 4.1 $ 4.0 $ 2.5 $ 4.2 Wholesale receivables 15.5 15.5 4.7 15.9 Total with specific allowance 19.6 19.5 7.2 20.1 Receivables without specific allowance: Retail notes 24.4 23.9 25.5 Wholesale receivables 2.0 2.0 2.2 Total without specific allowance 26.4 25.9 27.7 Total $ 46.0 $ 45.4 $ 7.2 $ 47.8 Agriculture and turf $ 41.0 $ 40.4 $ 7.2 $ 42.5 Construction and forestry 5.0 5.0 5.3 Total $ 46.0 $ 45.4 $ 7.2 $ 47.8 November 3, 2019 * Receivables with specific allowance: Retail notes $ 4.9 $ 4.6 $ 1.9 $ 5.0 Wholesale receivables 5.3 5.3 2.9 5.7 Total with specific allowance 10.2 9.9 4.8 10.7 Receivables without specific allowance: Retail notes 22.9 22.4 25.0 Wholesale receivables 3.9 3.9 4.1 Total without specific allowance 26.8 26.3 29.1 Total $ 37.0 $ 36.2 $ 4.8 $ 39.8 Agriculture and turf $ 30.3 $ 29.7 $ 4.6 $ 32.0 Construction and forestry 6.7 6.5 .2 7.8 Total $ 37.0 $ 36.2 $ 4.8 $ 39.8 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 * 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 2020, the Company identified 192 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $7.3 million pre-modification and $7.1 million post-modification. The short-term relief related to COVID mentioned earlier did not meet the definition of a troubled debt restructuring. During the first six months of 2019, there were 135 Receivable contracts, primarily retail notes, with aggregate balances of $4.3 million pre-modification and $4.0 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At May 3, 2020, 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 |
May 03, 2020 | |
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 $3,017.3 million, $2,894.4 million, and $2,770.9 million at May 3, 2020, November 3, 2019, and April 28, 2019, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $2,976.9 million, $2,847.2 million, and $2,693.4 million at May 3, 2020, November 3, 2019, and April 28, 2019, 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 $505.3 million, $447.0 million, and $611.7 million at May 3, 2020, November 3, 2019, and April 28, 2019, respectively. The liabilities (securitization borrowings and accrued interest) were $477.8 million, $420.5 million, and $572.4 million at May 3, 2020, November 3, 2019, and April 28, 2019, 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 $1,220.4 million, $1,079.2 million, and $1,477.2 million at May 3, 2020, November 3, 2019, and April 28, 2019, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,153.9 million, $1,015.2 million, and $1,382.0 million at May 3, 2020, November 3, 2019, and April 28, 2019, 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): May 3 2020 Carrying value of liabilities $ 1,153.9 Maximum exposure to loss 1,220.4 The total assets of unconsolidated VIEs related to securitizations were approximately $37.1 billion at May 3, 2020. The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars): May 3 November 3 April 28 2020 2019 2019 Retail notes securitized $ 4,664.1 $ 4,349.6 $ 4,766.4 Allowance for credit losses (16.4) (11.2) (11.7) Other assets 95.3 82.2 105.1 Total restricted securitized assets $ 4,743.0 $ 4,420.6 $ 4,859.8 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): May 3 November 3 April 28 2020 2019 2019 Securitization borrowings $ 4,603.5 $ 4,277.0 $ 4,643.9 Accrued interest on borrowings 5.1 5.9 3.9 Total liabilities related to restricted securitized assets $ 4,608.6 $ 4,282.9 $ 4,647.8 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 May 3, 2020, the maximum remaining term of all restricted securitized retail notes was approximately seven years. |
Leases
Leases | 6 Months Ended |
May 03, 2020 | |
Lessor Disclosure [Abstract] | |
Leases | (6) Leases The Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in financing leases on the consolidated balance sheet. Operating leases are reported in equipment on operating leases – net on the consolidated balance sheet. Initial lease terms generally range from less than one year to seven years. Leases offered by the Company may include early termination and renewal options. At the end of a lease, the lessee generally has the option to purchase the underlying equipment for a fixed price or return it to the dealer. If the equipment is returned to the dealer, the dealer also has the option to purchase the equipment or return it to the Company for remarketing. The Company estimates the residual values for operating leases at lease inception based on several factors, including lease term, expected hours of usage, historical wholesale sale prices, return experience, intended use of the equipment, market dynamics and trends, and dealer residual guarantees. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates decline. Lease agreements include usage limits and specifications on machine condition, which allow the Company to assess lessees for excess use or damages to the underlying equipment. During the second quarter of 2020, the Company recorded impairment losses on operating leases of $21.0 million due to higher expected return rates and lower estimated values of used construction equipment. Operating lease impairments are recorded in administrative and operating expenses on the statement of consolidated income. The Company has elected to combine lease and nonlease components. The nonlease components primarily relate to preventative maintenance and extended warranty agreements financed by the customer. The Company has also elected to report consideration related to sales and value-added taxes net of the related tax expense. Property taxes on leased assets are recorded on a gross basis in lease revenues and administrative and operating expenses on the statement of consolidated income. Variable lease revenues primarily relate to separately invoiced property taxes on leased equipment in certain markets, and late fees. Due to the significant, negative effects of COVID, the Company provided short-term relief to lessees during the second quarter of 2020. The relief, which included payment deferrals of three months or less, was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief, which primarily related to construction accounts, represented approximately 2 percent of the Company’s operating lease portfolio at May 3, 2020. See Note 4 for information related to short-term relief on financing leases. Lease revenues earned by the Company were as follows (in millions of dollars): Three Months Ended Six Months Ended May 3, 2020 May 3, 2020 Sales-type and direct financing lease revenues $ 10.7 $ 22.3 Operating lease revenues 256.8 515.3 Variable lease revenues 5.1 9.9 Total lease revenues $ 272.6 $ 547.5 At the time of accepting a lease that qualifies as a sales-type or direct financing lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment, and unearned finance income. The unearned finance income is recognized as revenue over the lease term using the interest method. Sales-type and direct financing lease receivables by product category were as follows (in millions of dollars): May 3 November 3 2020 2019 Agriculture and turf $ 405.6 $ 422.7 Construction and forestry 149.9 153.2 Total 555.5 575.9 Guaranteed residual values 138.1 195.1 Unguaranteed residual values 53.5 61.1 Unearned finance income (76.5) (80.5) Financing leases receivable $ 670.6 $ 751.6 Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at May 3, 2020 were as follows (in millions of dollars): May 3 2020 Due in: Remainder of 2020 $ 172.8 2021 226.4 2022 142.1 2023 84.2 2024 46.6 2025 16.1 Later years 5.4 Total $ 693.6 Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 were as follows (in millions of dollars): November 3 2019 Due in: 2020 $ 225.6 2021 155.2 2022 103.8 2023 58.3 2024 24.2 Later years 8.8 Total $ 575.9 Lease payments from equipment on operating leases are recorded as income on a straight-line method over the lease terms. Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The cost of equipment on operating leases by product category was as follows (in millions of dollars): May 3 November 3 2020 2019 Agriculture and turf $ 5,112.6 $ 5,109.4 Construction and forestry 1,742.9 1,778.6 Total 6,855.5 6,888.0 Accumulated depreciation (1,433.9) (1,357.5) Equipment on operating leases - net $ 5,421.6 $ 5,530.5 The total operating lease residual values at May 3, 2020 and November 3, 2019 were $3,859.9 million and $3,876.5 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $76.5 million and $65.7 million at May 3, 2020 and November 3, 2019, respectively. Lease payments for equipment on operating leases at May 3, 2020 were scheduled as follows (in millions of dollars): May 3 2020 Due in: Remainder of 2020 $ 403.0 2021 636.6 2022 357.9 2023 153.0 2024 50.4 2025 2.7 Later years .2 Total $ 1,603.8 Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows (in millions of dollars): November 3 2019 Due in: 2020 $ 738.3 2021 484.4 2022 231.6 2023 92.8 2024 14.1 Later years .3 Total $ 1,561.5 The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at May 3, 2020 and November 3, 2019 were $100.7 million and $160.8 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheet. During the second quarter of 2020, the Company recorded impairment losses on matured operating lease inventory of $9.8 million due to lower estimated values of used construction equipment. Impairment losses on matured operating lease inventory are included in administrative and operating expenses on the statement of consolidated income. |
Notes Receivable from John Deer
Notes Receivable from John Deere | 6 Months Ended |
May 03, 2020 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | (7) 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 seven years. Interest earned from John Deere was $3.6 million for the second quarter and $8.0 million in the first six months of 2020, compared with $4.0 million and $7.6 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): May 3 November 3 April 28 2020 2019 2019 Limited Liability Company John Deere Financial $ 102.6 $ 148.3 $ 128.4 Banco John Deere S.A. 192.0 143.4 95.6 Total Notes Receivable from John Deere $ 294.6 $ 291.7 $ 224.0 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
May 03, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | (8) Commitments and Contingencies At May 3, 2020, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $1,578.1 million of medium-term notes outstanding, and a fair value liability of $67.0 million for derivatives outstanding, prior to considering applicable netting provisions, with a notional amount of $2,837.7 million that were guaranteed by Capital Corporation. The weighted average interest rate on the medium-term notes at May 3, 2020 was 2.6 percent with a maximum remaining maturity of approximately seven 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 $1,578.1 million at May 3, 2020. The weighted average interest rate on the debt at May 3, 2020 was 2.3 percent with a maximum remaining maturity of approximately three 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 $7.7 billion at May 3, 2020. The amount of unused commitments to extend credit to customers was $29.0 billion at May 3, 2020. 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 May 3, 2020, Capital Corporation had $222.1 million in unused loan commitments denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia. At May 3, 2020, 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 May 3, 2020. 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 |
May 03, 2020 | |
Income Taxes | |
Income Taxes | (9) Income Taxes The Company’s unrecognized tax benefits at May 3, 2020 were $28.1 million, compared to $32.5 million at November 3, 2019. The liability at May 3, 2020, November 3, 2019, and April 28, 2019 consisted of approximately $14.1 million, $17.6 million, and $15.4 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 |
May 03, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | (10) 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): May 3, 2020 November 3, 2019 April 28, 2019 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed – net $ 28,153.8 $ 28,328.5 $ 28,382.5 $ 28,396.6 $ 27,822.5 $ 27,765.7 Retail notes securitized – net 4,647.7 4,722.2 4,338.4 4,361.9 4,754.7 4,726.6 Securitization borrowings 4,603.5 4,632.2 4,277.0 4,301.7 4,643.9 4,652.5 Current maturities of long-term borrowings 5,447.1 5,473.6 5,716.6 5,727.9 4,629.7 4,619.4 Long-term borrowings 20,855.4 20,996.0 21,052.4 21,369.9 19,705.9 19,924.3 * 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): May 3 November 3 April 28 2020 2019 2019 Marketable securities International debt securities $ 1.7 $ 3.2 $ 4.0 Receivables from John Deere Derivatives: Interest rate contracts 742.9 331.4 112.4 Cross-currency interest rate contracts 16.9 .5 1.1 Other assets Derivatives: Interest rate contracts .1 Foreign exchange contracts 7.9 1.9 36.6 Total assets * $ 769.4 $ 337.0 $ 154.2 Other payables to John Deere Derivatives: Interest rate contracts $ 46.8 $ 44.4 $ 142.4 Cross-currency interest rate contracts 3.0 2.2 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 20.8 9.9 4.5 Total liabilities $ 67.6 $ 57.3 $ 149.1 * 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 May 3, 2020, the amortized cost basis and fair value of these available-for-sale debt securities were $5.9 million and $1.7 million, respectively. Fair value, nonrecurring Level 3 measurements from impairments were as follows (in millions of dollars): Fair Value * Losses Three Six Months Ended May 3 November 3 April 28 May 3 April 28 May 3 April 28 2020 2019 2019 2020 2019 2020 2019 Equipment on operating leases – net $ 340.3 $ 855.4 $ 21.0 $ 21.0 Other assets 56.5 141.9 9.8 9.8 Total $ 396.8 $ 997.3 $ 30.8 $ 30.8 * See Receivables with specific allowances in Note 4 that were not significant. See Note 6 for impairments on lease residual values. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable securities Derivatives – Receivables – Equipment on operating leases - net Other assets |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
May 03, 2020 | |
Derivative Instruments | |
Derivative Instruments | (11) 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, the underlying hedged transaction is no longer likely to occur, 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 May 3, 2020, November 3, 2019, and April 28, 2019 were $2,450.0 million, $3,150.0 million, and $2,800.0 million, respectively. Fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (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 loss recorded in OCI at May 3, 2020 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $14.7 million after-tax. 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 May 3, 2020, November 3, 2019, and April 28, 2019 were $8,337.8 million, $8,336.9 million, and $9,093.2 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 (in millions of dollars): Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued May 3, 2020 Hedged Item Relationships Relationships Total Current maturities of long-term borrowings $ (1.7) $ (1.7) $ (1.7) Long-term borrowings 9,047.8 $ 706.7 35.6 742.3 November 3, 2019 Current maturities of long-term borrowings $ 185.4 $ .3 $ (4.4) $ (4.1) Long-term borrowings 8,378.1 292.8 (31.6) 261.2 April 28, 2019 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 May 3, 2020, November 3, 2019, and April 28, 2019 were $2,191.1 million, $2,312.4 million, and $1,880.3 million, the foreign exchange contracts were $718.6 million, $691.6 million, and $2,261.5 million, and the cross-currency interest rate contracts were $87.2 million, $91.1 million, and $89.5 million, respectively. To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $1,743.9 million, $1,611.3 million, and $2,034.0 million at May 3, 2020, November 3, 2019, and April 28, 2019, respectively. Interest rate caps were also purchased with notional amounts of $1,743.9 million, $1,611.3 million, and $2,034.0 million at the same dates. 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): May 3 November 3 April 28 2020 2019 2019 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 736.3 $ 328.8 $ 100.3 Not designated as hedging instruments: Interest rate contracts 6.6 2.6 12.1 Cross-currency interest rate contracts 16.9 .5 1.1 Total not designated 23.5 3.1 13.2 Other Assets Not designated as hedging instruments: Interest rate contracts .1 Foreign exchange contracts 7.9 1.9 36.6 Total not designated 7.9 1.9 36.7 Total derivative assets $ 767.7 $ 333.8 $ 150.2 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 29.9 $ 26.5 $ 122.1 Not designated as hedging instruments: Interest rate contracts 16.9 17.9 20.3 Cross-currency interest rate contracts 3.0 2.2 Total not designated 16.9 20.9 22.5 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 20.8 9.9 4.5 Total derivative liabilities $ 67.6 $ 57.3 $ 149.1 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 May 3 April 28 May 3 April 28 2020 2019 2020 2019 Fair Value Hedges Interest rate contracts - Interest expense $ 400.2 $ 139.2 $ 491.3 $ 269.6 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (14.9) (6.0) (16.5) (14.6) Reclassified from OCI Interest rate contracts - Interest expense (3.9) 2.5 (5.1) 4.6 Not Designated as Hedges Interest rate contracts - Interest expense * $ (2.8) $ (8.0) $ (.8) $ (11.7) Foreign exchange contracts - Administrative and operating expenses * 90.8 39.5 94.5 16.5 Total not designated $ 88.0 $ 31.5 $ 93.7 $ 4.8 * 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 May 3, 2020 and April 28, 2019 were gains of $415.5 million and $133.9 million, respectively. The amounts the Company recognized on these affiliate party transactions for the six months ended May 3, 2020 and April 28, 2019 were gains of $505.3 million and $260.2 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 May 3, 2020, November 3, 2019, and April 28, 2019, 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 did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of May 3, 2020 and November 3, 2019. 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. 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): May 3, 2020 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 7.9 $ (1.7) $ 6.2 John Deere 759.8 (40.6) 719.2 Liabilities External 20.8 (1.7) 19.1 John Deere 46.8 (40.6) 6.2 November 3, 2019 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 1.9 $ (.2) $ 1.7 John Deere 331.9 (42.6) 289.3 Liabilities External 9.9 (.2) 9.7 John Deere 47.4 (42.6) 4.8 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 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
May 03, 2020 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | (12) 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 was not significant for the three and six months ended May 3, 2020 and April 28, 2019. 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 $1.6 million for the second quarter and $6.7 million for the first six months of 2020, compared with $1.3 million and $2.5 million for the same periods last year. The increase from the prior year is primarily due to a $3.3 million curtailment loss in the first quarter of 2020 related to voluntary employee-separation programs (See Note 13). Further disclosure for these plans is included in Deere & Company’s Form 10-Q for the quarter ended May 3, 2020. |
Employee-Separation Program
Employee-Separation Program | 6 Months Ended |
May 03, 2020 | |
Employee-Separation Program | |
Employee-Separation Programs | (13) Employee-Separation Programs During the second quarter and first six months of 2020, the Company incurred voluntary employee-separation program expenses of $1.0 million and $8.7 million, respectively, as part of its efforts to create a more efficient organization structure and reduce operating costs. The programs provided for cash payments based on years of service. The expenses were recorded primarily in the period in which the employees irrevocably accepted the separation offer. Included in the total pretax expense noted above for the first six months of 2020 was a non-cash charge of $3.3 million resulting from a curtailment in certain OPEB plans during the first quarter of 2020 (See Note 12). The expenses were recorded in administrative and operating expenses |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
May 03, 2020 | |
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. The identification and rapid spread of COVID-19 (COVID) has resulted in governments and other authorities implementing numerous measures designed to contain the virus. These and other actions have resulted in uncertainties in the Company’s business, which may result in actual results differing from those estimates. Examples of estimates used in the financial statements affected by this uncertainty include incurred credit losses, operating lease residual values and return rates, the forecasted annual effective income tax rate, and fair value measurements. |
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 2020 and 2019 were May 3, 2020 and April 28, 2019, 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 finance lease Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and finance lease 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. During the first six months of 2020, the Company identified 192 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $7.3 million pre-modification and $7.1 million post-modification. The short-term relief related to COVID mentioned earlier did not meet the definition of a troubled debt restructuring. During the first six months of 2019, there were 135 Receivable contracts, primarily retail notes, with aggregate balances of $4.3 million pre-modification and $4.0 million post-modification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At May 3, 2020, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. |
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, the underlying hedged transaction is no longer likely to occur, 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 |
May 03, 2020 | |
Other Comprehensive Income Items | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): Unrealized Unrealized Accumulated Cumulative Gain (Loss) Gain (Loss) Other Translation on on Comprehensive Adjustment Derivatives Debt Securities Income (Loss) 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) Balance November 3, 2019 $ (88.4) $ (7.0) $ (2.0) $ (97.4) Other comprehensive income (loss) items before reclassification (21.8) (13.0) (.6) (35.4) Amounts reclassified from accumulated other comprehensive income 4.0 4.0 Net current period other comprehensive income (loss) (21.8) (9.0) (.6) (31.4) Balance May 3, 2020 $ (110.2) $ (16.0) $ (2.6) $ (128.8) |
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 May 3, 2020 Amount Credit Amount Cumulative translation adjustment $ (17.0) $ (17.0) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (14.9) $ 3.1 (11.8) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 3.9 (.8) 3.1 Net unrealized gain (loss) on derivatives (11.0) 2.3 (8.7) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (.6) .4 (.2) Total other comprehensive income (loss) $ (28.6) $ 2.7 $ (25.9) Six Months Ended May 3, 2020 Cumulative translation adjustment $ (21.8) $ (21.8) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) (16.5) $ 3.5 (13.0) Reclassification of realized (gain) loss to: Interest rate contracts – Interest expense 5.1 (1.1) 4.0 Net unrealized gain (loss) on derivatives (11.4) 2.4 (9.0) Unrealized gain (loss) on debt securities: Unrealized holding gain (loss) (1.5) .9 (.6) Total other comprehensive income (loss) $ (34.7) $ 3.3 $ (31.4) Three Months Ended April 28, 2019 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) |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended |
May 03, 2020 | |
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): May 3, 2020 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 151.2 $ 75.3 $ 2.6 $ 229.1 Construction and forestry 97.7 44.3 142.0 Revolving charge accounts: Agriculture and turf 30.7 11.9 42.6 Construction and forestry 4.0 1.2 5.2 Wholesale receivables: Agriculture and turf 8.1 .9 2.6 11.6 Construction and forestry 1.5 1.6 1.0 4.1 Financing leases: Agriculture and turf 19.0 6.8 .7 26.5 Construction and forestry 2.0 1.5 3.5 Total Receivables $ 314.2 $ 143.5 $ 6.9 $ 464.6 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 229.1 $ 204.4 $ 15,692.0 $ 16,125.5 Construction and forestry 142.0 121.0 3,150.1 3,413.1 Revolving charge accounts: Agriculture and turf 42.6 41.4 3,215.9 3,299.9 Construction and forestry 5.2 1.1 82.5 88.8 Wholesale receivables: Agriculture and turf 11.6 3.4 7,557.5 7,572.5 Construction and forestry 4.1 2.0 1,764.8 1,770.9 Financing leases: Agriculture and turf 26.5 12.1 487.5 526.1 Construction and forestry 3.5 4.6 136.4 144.5 Total Receivables $ 464.6 $ 390.0 $ 32,086.7 $ 32,941.3 November 3, 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 $ 120.0 $ 64.2 $ 1.5 $ 185.7 Construction and forestry 73.9 26.6 100.5 Revolving charge accounts: Agriculture and turf 19.1 9.2 28.3 Construction and forestry 3.2 1.2 4.4 Wholesale receivables: Agriculture and turf 4.1 1.9 .8 6.8 Construction and forestry .1 .3 .3 .7 Financing leases: Agriculture and turf 14.6 7.8 .5 22.9 Construction and forestry 2.8 .7 3.5 Total Receivables $ 237.8 $ 111.9 $ 3.1 $ 352.8 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 185.7 $ 168.7 $ 15,831.5 $ 16,185.9 Construction and forestry 100.5 112.9 3,100.8 3,314.2 Revolving charge accounts: Agriculture and turf 28.3 6.1 3,727.9 3,762.3 Construction and forestry 4.4 .9 95.4 100.7 Wholesale receivables: Agriculture and turf 6.8 6.3 6,544.6 6,557.7 Construction and forestry .7 2.9 2,145.5 2,149.1 Financing leases: Agriculture and turf 22.9 11.6 569.8 604.3 Construction and forestry 3.5 2.5 141.3 147.3 Total Receivables $ 352.8 $ 311.9 $ 32,156.8 $ 32,821.5 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 |
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 May 3, 2020 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 48.5 $ 39.3 $ 9.9 $ 5.4 $ 103.1 Provision (credit) for credit losses 53.5 19.2 (.3) .3 72.7 Write-offs (19.8) (22.4) (.4) (42.6) Recoveries 1.3 6.2 .1 .1 7.7 Translation adjustments (.2) (.6) (.3) (1.1) End of period balance $ 83.3 $ 42.3 $ 9.1 $ 5.1 $ 139.8 Six Months Ended May 3, 2020 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 48.3 $ 39.3 $ 7.6 $ 5.4 $ 100.6 Provision (credit) for credit losses 66.6 18.1 (.5) .6 84.8 Write-offs (33.3) (28.8) (.8) (.8) (63.7) Recoveries 1.9 13.7 .9 .2 16.7 Translation adjustments (.2) 1.9 (.3) 1.4 End of period balance $ 83.3 $ 42.3 $ 9.1 $ 5.1 $ 139.8 Balance individually evaluated * $ 2.5 $ 4.7 $ 7.2 Receivables: End of period balance $ 19,538.6 $ 3,388.7 $ 9,343.4 $ 670.6 $ 32,941.3 Balance individually evaluated * $ 94.5 $ .1 $ 17.6 $ 1.0 $ 113.2 * Remainder is collectively evaluated. 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. |
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 May 3, 2020 * Receivables with specific allowance: Retail notes $ 4.1 $ 4.0 $ 2.5 $ 4.2 Wholesale receivables 15.5 15.5 4.7 15.9 Total with specific allowance 19.6 19.5 7.2 20.1 Receivables without specific allowance: Retail notes 24.4 23.9 25.5 Wholesale receivables 2.0 2.0 2.2 Total without specific allowance 26.4 25.9 27.7 Total $ 46.0 $ 45.4 $ 7.2 $ 47.8 Agriculture and turf $ 41.0 $ 40.4 $ 7.2 $ 42.5 Construction and forestry 5.0 5.0 5.3 Total $ 46.0 $ 45.4 $ 7.2 $ 47.8 November 3, 2019 * Receivables with specific allowance: Retail notes $ 4.9 $ 4.6 $ 1.9 $ 5.0 Wholesale receivables 5.3 5.3 2.9 5.7 Total with specific allowance 10.2 9.9 4.8 10.7 Receivables without specific allowance: Retail notes 22.9 22.4 25.0 Wholesale receivables 3.9 3.9 4.1 Total without specific allowance 26.8 26.3 29.1 Total $ 37.0 $ 36.2 $ 4.8 $ 39.8 Agriculture and turf $ 30.3 $ 29.7 $ 4.6 $ 32.0 Construction and forestry 6.7 6.5 .2 7.8 Total $ 37.0 $ 36.2 $ 4.8 $ 39.8 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 * Finance income recognized was not material. |
Securitization of Receivables (
Securitization of Receivables (Tables) | 6 Months Ended |
May 03, 2020 | |
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): May 3 2020 Carrying value of liabilities $ 1,153.9 Maximum exposure to loss 1,220.4 |
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): May 3 November 3 April 28 2020 2019 2019 Retail notes securitized $ 4,664.1 $ 4,349.6 $ 4,766.4 Allowance for credit losses (16.4) (11.2) (11.7) Other assets 95.3 82.2 105.1 Total restricted securitized assets $ 4,743.0 $ 4,420.6 $ 4,859.8 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): May 3 November 3 April 28 2020 2019 2019 Securitization borrowings $ 4,603.5 $ 4,277.0 $ 4,643.9 Accrued interest on borrowings 5.1 5.9 3.9 Total liabilities related to restricted securitized assets $ 4,608.6 $ 4,282.9 $ 4,647.8 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
May 03, 2020 | |
Lessor Disclosure [Abstract] | |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows (in millions of dollars): Three Months Ended Six Months Ended May 3, 2020 May 3, 2020 Sales-type and direct financing lease revenues $ 10.7 $ 22.3 Operating lease revenues 256.8 515.3 Variable lease revenues 5.1 9.9 Total lease revenues $ 272.6 $ 547.5 |
Schedule of Sales-type and Direct Financing Lease Receivables by Product Category | Sales-type and direct financing lease receivables by product category were as follows (in millions of dollars): May 3 November 3 2020 2019 Agriculture and turf $ 405.6 $ 422.7 Construction and forestry 149.9 153.2 Total 555.5 575.9 Guaranteed residual values 138.1 195.1 Unguaranteed residual values 53.5 61.1 Unearned finance income (76.5) (80.5) Financing leases receivable $ 670.6 $ 751.6 |
Schedule of Scheduled Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Leases Receivables | Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at May 3, 2020 were as follows (in millions of dollars): May 3 2020 Due in: Remainder of 2020 $ 172.8 2021 226.4 2022 142.1 2023 84.2 2024 46.6 2025 16.1 Later years 5.4 Total $ 693.6 |
Schedule of Finance Lease Scheduled Payments under the Previous Lease Standard | Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 were as follows (in millions of dollars): November 3 2019 Due in: 2020 $ 225.6 2021 155.2 2022 103.8 2023 58.3 2024 24.2 Later years 8.8 Total $ 575.9 |
Schedule of Cost of Equipment on Operating Leases by Product Category | The cost of equipment on operating leases by product category was as follows (in millions of dollars): May 3 November 3 2020 2019 Agriculture and turf $ 5,112.6 $ 5,109.4 Construction and forestry 1,742.9 1,778.6 Total 6,855.5 6,888.0 Accumulated depreciation (1,433.9) (1,357.5) Equipment on operating leases - net $ 5,421.6 $ 5,530.5 |
Schedule of Lease Payments for Equipment on Operating Leases | Lease payments for equipment on operating leases at May 3, 2020 were scheduled as follows (in millions of dollars): May 3 2020 Due in: Remainder of 2020 $ 403.0 2021 636.6 2022 357.9 2023 153.0 2024 50.4 2025 2.7 Later years .2 Total $ 1,603.8 |
Schedule of Rental Payments for Equipment on Operating Leases under the Previous Lease Standard | Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows (in millions of dollars): November 3 2019 Due in: 2020 $ 738.3 2021 484.4 2022 231.6 2023 92.8 2024 14.1 Later years .3 Total $ 1,561.5 |
Notes Receivable from John De_2
Notes Receivable from John Deere (Tables) | 6 Months Ended |
May 03, 2020 | |
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): May 3 November 3 April 28 2020 2019 2019 Limited Liability Company John Deere Financial $ 102.6 $ 148.3 $ 128.4 Banco John Deere S.A. 192.0 143.4 95.6 Total Notes Receivable from John Deere $ 294.6 $ 291.7 $ 224.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
May 03, 2020 | |
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): May 3, 2020 November 3, 2019 April 28, 2019 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed – net $ 28,153.8 $ 28,328.5 $ 28,382.5 $ 28,396.6 $ 27,822.5 $ 27,765.7 Retail notes securitized – net 4,647.7 4,722.2 4,338.4 4,361.9 4,754.7 4,726.6 Securitization borrowings 4,603.5 4,632.2 4,277.0 4,301.7 4,643.9 4,652.5 Current maturities of long-term borrowings 5,447.1 5,473.6 5,716.6 5,727.9 4,629.7 4,619.4 Long-term borrowings 20,855.4 20,996.0 21,052.4 21,369.9 19,705.9 19,924.3 * 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): May 3 November 3 April 28 2020 2019 2019 Marketable securities International debt securities $ 1.7 $ 3.2 $ 4.0 Receivables from John Deere Derivatives: Interest rate contracts 742.9 331.4 112.4 Cross-currency interest rate contracts 16.9 .5 1.1 Other assets Derivatives: Interest rate contracts .1 Foreign exchange contracts 7.9 1.9 36.6 Total assets * $ 769.4 $ 337.0 $ 154.2 Other payables to John Deere Derivatives: Interest rate contracts $ 46.8 $ 44.4 $ 142.4 Cross-currency interest rate contracts 3.0 2.2 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 20.8 9.9 4.5 Total liabilities $ 67.6 $ 57.3 $ 149.1 * 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. |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | Fair value, nonrecurring Level 3 measurements from impairments were as follows (in millions of dollars): Fair Value * Losses Three Six Months Ended May 3 November 3 April 28 May 3 April 28 May 3 April 28 2020 2019 2019 2020 2019 2020 2019 Equipment on operating leases – net $ 340.3 $ 855.4 $ 21.0 $ 21.0 Other assets 56.5 141.9 9.8 9.8 Total $ 396.8 $ 997.3 $ 30.8 $ 30.8 * See Receivables with specific allowances in Note 4 that were not significant. See Note 6 for impairments on lease residual values. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
May 03, 2020 | |
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 (in millions of dollars): Cumulative Increase (Decrease) of Fair Value Hedging Adjustments Included in the Carrying Amount Carrying Active Amount of Hedging Discontinued May 3, 2020 Hedged Item Relationships Relationships Total Current maturities of long-term borrowings $ (1.7) $ (1.7) $ (1.7) Long-term borrowings 9,047.8 $ 706.7 35.6 742.3 November 3, 2019 Current maturities of long-term borrowings $ 185.4 $ .3 $ (4.4) $ (4.1) Long-term borrowings 8,378.1 292.8 (31.6) 261.2 April 28, 2019 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): May 3 November 3 April 28 2020 2019 2019 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 736.3 $ 328.8 $ 100.3 Not designated as hedging instruments: Interest rate contracts 6.6 2.6 12.1 Cross-currency interest rate contracts 16.9 .5 1.1 Total not designated 23.5 3.1 13.2 Other Assets Not designated as hedging instruments: Interest rate contracts .1 Foreign exchange contracts 7.9 1.9 36.6 Total not designated 7.9 1.9 36.7 Total derivative assets $ 767.7 $ 333.8 $ 150.2 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 29.9 $ 26.5 $ 122.1 Not designated as hedging instruments: Interest rate contracts 16.9 17.9 20.3 Cross-currency interest rate contracts 3.0 2.2 Total not designated 16.9 20.9 22.5 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 20.8 9.9 4.5 Total derivative liabilities $ 67.6 $ 57.3 $ 149.1 |
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 May 3 April 28 May 3 April 28 2020 2019 2020 2019 Fair Value Hedges Interest rate contracts - Interest expense $ 400.2 $ 139.2 $ 491.3 $ 269.6 Cash Flow Hedges Recognized in OCI Interest rate contracts - OCI (pretax) (14.9) (6.0) (16.5) (14.6) Reclassified from OCI Interest rate contracts - Interest expense (3.9) 2.5 (5.1) 4.6 Not Designated as Hedges Interest rate contracts - Interest expense * $ (2.8) $ (8.0) $ (.8) $ (11.7) Foreign exchange contracts - Administrative and operating expenses * 90.8 39.5 94.5 16.5 Total not designated $ 88.0 $ 31.5 $ 93.7 $ 4.8 * 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): May 3, 2020 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 7.9 $ (1.7) $ 6.2 John Deere 759.8 (40.6) 719.2 Liabilities External 20.8 (1.7) 19.1 John Deere 46.8 (40.6) 6.2 November 3, 2019 Derivatives: Gross Amounts Netting Cash Collateral Received/Paid Net Assets External $ 1.9 $ (.2) $ 1.7 John Deere 331.9 (42.6) 289.3 Liabilities External 9.9 (.2) 9.7 John Deere 47.4 (42.6) 4.8 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 |
Organization and Consolidation
Organization and Consolidation (Details) | 3 Months Ended | |
May 03, 2020 | Apr. 28, 2019 | |
Organization and Consolidation | ||
Fiscal year duration | 91 days | 91 days |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | 6 Months Ended | |
May 03, 2020 | Nov. 04, 2019 | |
ASU 2016-02 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List] | Modified Retrospective | |
Lease, Practical Expedients, Package [true false] | true | |
Lease, Practical Expedient, Use of Hindsight [true false] | false | |
Right of use asset | $ 5.1 | |
Lease liability | $ 5.1 | |
ASU 2020-04 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
ASU 2016-13 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |
ASU 2018-15 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false | |
ASU 2019-12 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false |
Other Comprehensive Income It_3
Other Comprehensive Income Items - After-Tax Changes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | $ 4,127 | |||
Net current period other comprehensive income (loss) | $ (25.9) | $ (13.9) | (31.4) | $ (21.5) |
Balance | 3,995.7 | 4,023.8 | 3,995.7 | 4,023.8 |
Accumulated Other Comprehensive Income (Loss) | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (97.4) | (65.9) | ||
Other comprehensive income (loss) items before reclassification | (35.4) | (17.9) | ||
Amounts reclassified from accumulated other comprehensive income | 4 | (3.6) | ||
Net current period other comprehensive income (loss) | (25.9) | (13.9) | (31.4) | (21.5) |
Balance | (128.8) | (87.4) | (128.8) | (87.4) |
Cumulative Translation Adjustment | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (88.4) | (80.7) | ||
Other comprehensive income (loss) items before reclassification | (21.8) | (6.4) | ||
Net current period other comprehensive income (loss) | (21.8) | (6.4) | ||
Balance | (110.2) | (87.1) | (110.2) | (87.1) |
Unrealized Gain (Loss) on Derivatives | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (7) | 14.8 | ||
Other comprehensive income (loss) items before reclassification | (13) | (11.5) | ||
Amounts reclassified from accumulated other comprehensive income | 4 | (3.6) | ||
Net current period other comprehensive income (loss) | (9) | (15.1) | ||
Balance | (16) | $ (0.3) | (16) | $ (0.3) |
Unrealized Gain (Loss) on Debt Securities | ||||
After-tax changes in accumulated other comprehensive income (loss) | ||||
Balance | (2) | |||
Other comprehensive income (loss) items before reclassification | (0.6) | |||
Net current period other comprehensive income (loss) | (0.6) | |||
Balance | $ (2.6) | $ (2.6) |
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 | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Other comprehensive income (loss), before tax | ||||
Interest expense | $ (216.6) | $ (252) | $ (436.4) | $ (478.5) |
Total other comprehensive income (loss), before tax | (28.6) | (15.7) | (34.7) | (25.6) |
Other comprehensive income (loss), tax (expense) credit | ||||
Total other comprehensive income (loss), tax (expense) credit | 2.7 | 1.8 | 3.3 | 4.1 |
Other comprehensive income (loss), after tax | ||||
Other comprehensive income (loss), net of income taxes | (25.9) | (13.9) | (31.4) | (21.5) |
Cumulative Translation Adjustment | ||||
Other comprehensive income (loss), before tax | ||||
Total other comprehensive income (loss), before tax | (17) | (7.2) | (21.8) | (6.4) |
Other comprehensive income (loss), after tax | ||||
Other comprehensive income (loss), net of income taxes | (17) | (7.2) | (21.8) | (6.4) |
Unrealized Gain (Loss) on Derivatives | ||||
Other comprehensive income (loss), before tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (14.9) | (6) | (16.5) | (14.6) |
Total other comprehensive income (loss), before tax | (11) | (8.5) | (11.4) | (19.2) |
Other comprehensive income (loss), tax (expense) credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 3.1 | 1.3 | 3.5 | 3.1 |
Total other comprehensive income (loss), tax (expense) credit | 2.3 | 1.8 | 2.4 | 4.1 |
Other comprehensive income (loss), after tax | ||||
Other comprehensive income (loss) before reclassification, after tax | (11.8) | (4.7) | (13) | (11.5) |
Other comprehensive income (loss), net of income taxes | (8.7) | (6.7) | (9) | (15.1) |
Unrealized Gain (Loss) on Derivatives | Interest rate contracts | Reclassifications of gains (losses) out of accumulated other comprehensive income | ||||
Other comprehensive income (loss), before tax | ||||
Interest expense | 3.9 | (2.5) | 5.1 | (4.6) |
Other comprehensive income (loss), tax (expense) credit | ||||
Reclassification of realized (gain) loss, tax expense (credit) | (0.8) | 0.5 | (1.1) | 1 |
Other comprehensive income (loss), after tax | ||||
Reclassification of realized (gain) loss, after tax | 3.1 | $ (2) | 4 | $ (3.6) |
Unrealized Gain (Loss) on Debt Securities | ||||
Other comprehensive income (loss), before tax | ||||
Other comprehensive income (loss) before reclassification, before tax | (0.6) | (1.5) | ||
Other comprehensive income (loss), tax (expense) credit | ||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 0.4 | 0.9 | ||
Other comprehensive income (loss), after tax | ||||
Other comprehensive income (loss) before reclassification, after tax | $ (0.2) | $ (0.6) |
Receivables - Past Due Age Anal
Receivables - Past Due Age Analysis (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 | |
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 | $ 464.6 | $ 464.6 | $ 352.8 | $ 369 |
Total Non-Performing | 390 | 390 | 311.9 | 381.7 |
Current | 32,086.7 | 32,086.7 | 32,156.8 | 31,936.9 |
Total Receivables | $ 32,941.3 | $ 32,941.3 | 32,821.5 | 32,687.6 |
COVID | ||||
Receivable, Past Due | ||||
Percentage of retail receivables granted relief | 4.00% | 4.00% | ||
30-59 Days Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 314.2 | $ 314.2 | 237.8 | 243.2 |
60-89 Days Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 143.5 | 143.5 | 111.9 | 124.2 |
90 Days or Greater Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 6.9 | $ 6.9 | 3.1 | 1.6 |
Retail notes | ||||
Receivable, Past Due | ||||
Generally the number of days for a financing receivable to be considered non-performing | 90 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 | $ 19,538.6 | $ 19,538.6 | 18,015 | |
Retail notes | COVID | Maximum | ||||
Receivable, Past Due | ||||
Retail customer payment deferral period | 3 months | |||
Retail notes | Agriculture and turf | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 229.1 | 229.1 | 185.7 | 184.2 |
Total Non-Performing | 204.4 | 204.4 | 168.7 | 197.7 |
Current | 15,692 | 15,692 | 15,831.5 | 14,621.5 |
Total Receivables | 16,125.5 | 16,125.5 | 16,185.9 | 15,003.4 |
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 | 151.2 | 151.2 | 120 | 116.7 |
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 | 75.3 | 75.3 | 64.2 | 66.8 |
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 | 2.6 | 2.6 | 1.5 | 0.7 |
Retail notes | Construction and forestry | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 142 | 142 | 100.5 | 126.5 |
Total Non-Performing | 121 | 121 | 112.9 | 110.7 |
Current | 3,150.1 | 3,150.1 | 3,100.8 | 2,774.4 |
Total Receivables | 3,413.1 | 3,413.1 | 3,314.2 | 3,011.6 |
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 | 97.7 | 97.7 | 73.9 | 86.7 |
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 | 44.3 | $ 44.3 | 26.6 | 39.8 |
Revolving charge accounts | ||||
Receivable, Past Due | ||||
Generally the number of days for a financing receivable to be considered non-performing | 90 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 | $ 3,388.7 | $ 3,388.7 | 3,863 | 3,235.9 |
Revolving charge accounts | COVID | Maximum | ||||
Receivable, Past Due | ||||
Retail customer payment deferral period | 3 months | |||
Revolving charge accounts | Agriculture and turf | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 42.6 | 42.6 | 28.3 | 35.4 |
Total Non-Performing | 41.4 | 41.4 | 6.1 | 47.1 |
Current | 3,215.9 | 3,215.9 | 3,727.9 | 3,059.2 |
Total Receivables | 3,299.9 | 3,299.9 | 3,762.3 | 3,141.7 |
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 | 30.7 | 30.7 | 19.1 | 23.6 |
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 | 11.9 | 11.9 | 9.2 | 11.8 |
Revolving charge accounts | Construction and forestry | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 5.2 | 5.2 | 4.4 | 5 |
Total Non-Performing | 1.1 | 1.1 | 0.9 | 1 |
Current | 82.5 | 82.5 | 95.4 | 88.2 |
Total Receivables | 88.8 | 88.8 | 100.7 | 94.2 |
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 | 4 | 4 | 3.2 | 3.7 |
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 | 1.2 | $ 1.2 | 1.2 | 1.3 |
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 | $ 9,343.4 | $ 9,343.4 | 8,706.8 | 10,809.7 |
Wholesale receivables | COVID | ||||
Receivable, Past Due | ||||
Percentage of wholesale notes granted relief | 5.00% | 5.00% | ||
Wholesale receivables | COVID | Maximum | ||||
Receivable, Past Due | ||||
Wholesale notes payment deferral period | 3 months | |||
Wholesale receivables | Agriculture and turf | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 11.6 | $ 11.6 | 6.8 | 8 |
Total Non-Performing | 3.4 | 3.4 | 6.3 | 6.2 |
Current | 7,557.5 | 7,557.5 | 6,544.6 | 8,606.6 |
Total Receivables | 7,572.5 | 7,572.5 | 6,557.7 | 8,620.8 |
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 | 8.1 | 8.1 | 4.1 | 5.1 |
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 | 0.9 | 0.9 | 1.9 | 2.1 |
Wholesale receivables | Agriculture and turf | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 2.6 | 2.6 | 0.8 | 0.8 |
Wholesale receivables | Construction and forestry | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 4.1 | 4.1 | 0.7 | 0.4 |
Total Non-Performing | 2 | 2 | 2.9 | 4.5 |
Current | 1,764.8 | 1,764.8 | 2,145.5 | 2,184 |
Total Receivables | 1,770.9 | 1,770.9 | 2,149.1 | 2,188.9 |
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 | 1.5 | 1.5 | 0.1 | 0.4 |
Wholesale receivables | Construction and forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 1.6 | 1.6 | 0.3 | |
Wholesale receivables | Construction and forestry | 90 Days or Greater Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 1 | $ 1 | 0.3 | |
Financing leases | ||||
Receivable, Past Due | ||||
Generally the number of days for a financing receivable to be considered non-performing | 90 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 | $ 670.6 | $ 670.6 | 751.6 | 627 |
Financing leases | COVID | Maximum | ||||
Receivable, Past Due | ||||
Retail customer payment deferral period | 3 months | |||
Financing leases | Agriculture and turf | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 26.5 | 26.5 | 22.9 | 6.2 |
Total Non-Performing | 12.1 | 12.1 | 11.6 | 11.6 |
Current | 487.5 | 487.5 | 569.8 | 462.9 |
Total Receivables | 526.1 | 526.1 | 604.3 | 480.7 |
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 | 19 | 19 | 14.6 | 4.4 |
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 | 6.8 | 6.8 | 7.8 | 1.7 |
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 | 0.7 | 0.7 | 0.5 | 0.1 |
Financing leases | Construction and forestry | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | 3.5 | 3.5 | 3.5 | 3.3 |
Total Non-Performing | 4.6 | 4.6 | 2.5 | 2.9 |
Current | 136.4 | 136.4 | 141.3 | 140.1 |
Total Receivables | 144.5 | 144.5 | 147.3 | 146.3 |
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 | 2 | 2.8 | 2.6 |
Financing leases | Construction and forestry | 60-89 Days Past Due | ||||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | ||||
Total Past Due | $ 1.5 | $ 1.5 | $ 0.7 | $ 0.7 |
Receivables - Allowance for Cre
Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | Nov. 03, 2019 | |
Allowance: | |||||
Beginning of period balance | $ 103.1 | $ 106.7 | $ 100.6 | $ 106.7 | |
Provision (credit) for credit losses | 72.7 | 26.1 | 84.8 | 26.9 | |
Write-offs | (42.6) | (28.9) | (63.7) | (40.2) | |
Recoveries | 7.7 | 6.7 | 16.7 | 17 | |
Translation adjustments | (1.1) | (0.2) | 1.4 | ||
End of period balance | 139.8 | 110.4 | 139.8 | 110.4 | |
Balance individually evaluated | 7.2 | 5.4 | 7.2 | 5.4 | |
Receivables: | |||||
End of period balance | 32,941.3 | 32,687.6 | 32,941.3 | 32,687.6 | $ 32,821.5 |
Balance individually evaluated | 113.2 | 86.5 | 113.2 | 86.5 | |
Increase in allowance for credit losses | 36.7 | ||||
Retail notes | |||||
Allowance: | |||||
Beginning of period balance | 48.5 | 51.2 | 48.3 | 51.6 | |
Provision (credit) for credit losses | 53.5 | 8.1 | 66.6 | 12.6 | |
Write-offs | (19.8) | (6.4) | (33.3) | (13.2) | |
Recoveries | 1.3 | 1.3 | 1.9 | 3.2 | |
Translation adjustments | (0.2) | (0.1) | (0.2) | (0.1) | |
End of period balance | 83.3 | 54.1 | 83.3 | 54.1 | |
Balance individually evaluated | 2.5 | 1.8 | 2.5 | 1.8 | |
Receivables: | |||||
End of period balance | 19,538.6 | 18,015 | 19,538.6 | 18,015 | |
Balance individually evaluated | 94.5 | 73.6 | 94.5 | 73.6 | |
Revolving charge accounts | |||||
Allowance: | |||||
Beginning of period balance | 39.3 | 42.3 | 39.3 | 42.3 | |
Provision (credit) for credit losses | 19.2 | 16.3 | 18.1 | 15.4 | |
Write-offs | (22.4) | (21.5) | (28.8) | (25.4) | |
Recoveries | 6.2 | 5.2 | 13.7 | 10 | |
End of period balance | 42.3 | 42.3 | 42.3 | 42.3 | |
Receivables: | |||||
End of period balance | 3,388.7 | 3,235.9 | 3,388.7 | 3,235.9 | 3,863 |
Balance individually evaluated | 0.1 | 2.4 | 0.1 | 2.4 | |
Wholesale receivables | |||||
Allowance: | |||||
Beginning of period balance | 9.9 | 7.9 | 7.6 | 8 | |
Provision (credit) for credit losses | (0.3) | 0.2 | (0.5) | (3.7) | |
Write-offs | (0.8) | ||||
Recoveries | 0.1 | 0.9 | 3.6 | ||
Translation adjustments | (0.6) | (0.1) | 1.9 | 0.1 | |
End of period balance | 9.1 | 8 | 9.1 | 8 | |
Balance individually evaluated | 4.7 | 2.9 | 4.7 | 2.9 | |
Receivables: | |||||
End of period balance | 9,343.4 | 10,809.7 | 9,343.4 | 10,809.7 | 8,706.8 |
Balance individually evaluated | 17.6 | 9.4 | 17.6 | 9.4 | |
Financing leases | |||||
Allowance: | |||||
Beginning of period balance | 5.4 | 5.3 | 5.4 | 4.8 | |
Provision (credit) for credit losses | 0.3 | 1.5 | 0.6 | 2.6 | |
Write-offs | (0.4) | (1) | (0.8) | (1.6) | |
Recoveries | 0.1 | 0.2 | 0.2 | 0.2 | |
Translation adjustments | (0.3) | (0.3) | |||
End of period balance | 5.1 | 6 | 5.1 | 6 | |
Balance individually evaluated | 0.7 | 0.7 | |||
Receivables: | |||||
End of period balance | 670.6 | 627 | 670.6 | 627 | $ 751.6 |
Balance individually evaluated | $ 1 | $ 1.1 | $ 1 | $ 1.1 |
Receivables - Impaired Receivab
Receivables - Impaired Receivables (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
May 03, 2020 | Apr. 28, 2019 | Nov. 03, 2019 | |
Recorded Investment | |||
Receivables with specific allowance | $ 19.6 | $ 11.4 | $ 10.2 |
Receivables without specific allowance | 26.4 | 26.6 | 26.8 |
Total | 46 | 38 | 37 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 19.5 | 11.1 | 9.9 |
Receivables without specific allowance | 25.9 | 26.1 | 26.3 |
Total | 45.4 | 37.2 | 36.2 |
Specific Allowance | 7.2 | 5.4 | 4.8 |
Average Recorded Investment | |||
Receivables with specific allowance | 20.1 | 11.4 | 10.7 |
Receivables without specific allowance | 27.7 | 27 | 29.1 |
Total | 47.8 | 38.4 | 39.8 |
Agriculture and turf | |||
Recorded Investment | |||
Total | 41 | 32.7 | 30.3 |
Unpaid Principal Balance | |||
Total | 40.4 | 32.1 | 29.7 |
Specific Allowance | 7.2 | 5.1 | 4.6 |
Average Recorded Investment | |||
Total | 42.5 | 33.1 | 32 |
Construction and forestry | |||
Recorded Investment | |||
Total | 5 | 5.3 | 6.7 |
Unpaid Principal Balance | |||
Total | 5 | 5.1 | 6.5 |
Specific Allowance | 0.3 | 0.2 | |
Average Recorded Investment | |||
Total | 5.3 | 5.3 | 7.8 |
Retail notes | |||
Recorded Investment | |||
Receivables with specific allowance | 4.1 | 4.8 | 4.9 |
Receivables without specific allowance | 24.4 | 25.3 | 22.9 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 4 | 4.6 | 4.6 |
Receivables without specific allowance | 23.9 | 24.8 | 22.4 |
Specific Allowance | 2.5 | 1.8 | 1.9 |
Average Recorded Investment | |||
Receivables with specific allowance | 4.2 | 4.9 | 5 |
Receivables without specific allowance | 25.5 | 26.5 | 25 |
Wholesale receivables | |||
Recorded Investment | |||
Receivables with specific allowance | 15.5 | 5.9 | 5.3 |
Receivables without specific allowance | 2 | 1.3 | 3.9 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 15.5 | 5.9 | 5.3 |
Receivables without specific allowance | 2 | 1.3 | 3.9 |
Specific Allowance | 4.7 | 2.9 | 2.9 |
Average Recorded Investment | |||
Receivables with specific allowance | 15.9 | 5.8 | 5.7 |
Receivables without specific allowance | $ 2.2 | 0.5 | $ 4.1 |
Financing leases | |||
Recorded Investment | |||
Receivables with specific allowance | 0.7 | ||
Unpaid Principal Balance | |||
Receivables with specific allowance | 0.6 | ||
Specific Allowance | 0.7 | ||
Average Recorded Investment | |||
Receivables with specific allowance | $ 0.7 |
Receivables - Troubled Debt Res
Receivables - Troubled Debt Restructurings (Details) $ in Millions | 6 Months Ended | |
May 03, 2020USD ($)item | Apr. 28, 2019USD ($)item | |
Receivables Related to Troubled Debt Restructurings | ||
Receivable contracts in troubled debt restructuring, number | item | 192 | 135 |
Receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 7.3 | $ 4.3 |
Receivables in troubled debt restructurings, aggregate balances, post-modification | 7.1 | 4 |
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 | ||
May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 | |
Securitization of Receivables | |||
Unconsolidated conduits, carrying value of liabilities | $ 1,153.9 | ||
Unconsolidated conduits, maximum exposure to loss | 1,220.4 | ||
Retail notes securitized | 4,664.1 | $ 4,349.6 | $ 4,766.4 |
Allowance for credit losses - securitization transactions | (16.4) | (11.2) | (11.7) |
Other assets - securitization transactions | 95.3 | 82.2 | 105.1 |
Total restricted securitized assets - securitization transactions | 4,743 | 4,420.6 | 4,859.8 |
Securitization borrowings | 4,603.5 | 4,277 | 4,643.9 |
Accrued interest on borrowings - securitization transactions | 5.1 | 5.9 | 3.9 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,608.6 | 4,282.9 | 4,647.8 |
Maximum remaining term of all restricted receivables | 7 years | ||
VIE-Primary Beneficiary | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | $ 3,017.3 | 2,894.4 | 2,770.9 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,976.9 | 2,847.2 | 2,693.4 |
Non-VIE Banking Operation | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | 505.3 | 447 | 611.7 |
Total liabilities related to restricted securitized assets - securitization transactions | 477.8 | 420.5 | 572.4 |
VIE-Not Primary Beneficiary | |||
Securitization of Receivables | |||
Total assets | 37,100 | ||
Total restricted securitized assets - securitization transactions | 1,220.4 | 1,079.2 | 1,477.2 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,153.9 | $ 1,015.2 | $ 1,382 |
Leases - Lessor Lease Terms (De
Leases - Lessor Lease Terms (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
May 03, 2020USD ($) | May 03, 2020 | |
Lessor | ||
Sales-type lease early termination options | true | |
Sales-type lease renewal options | true | |
Sales-type lease option to purchase the underlying equipment | true | |
Direct financing lease early termination options | true | |
Direct financing lease renewal options | true | |
Direct financing lease option to purchase the underlying equipment | true | |
Operating lease early termination options | true | |
Operating lease renewal options | true | |
Operating lease option to purchase the underlying equipment | true | |
Elected to combine lease and nonlease components | true | true |
Elected to report consideration related to sales and value added taxes net of the related tax expense | true | |
Impairment losses on operating leases | $ 21 | |
COVID | ||
Lessor | ||
Percentage of operating lease portfolio granted relief | 2.00% | 2.00% |
Minimum | ||
Lessor | ||
Lessor, term of contract | 1 year | |
Maximum | ||
Lessor | ||
Lessor, term of contract | 7 years | |
Maximum | COVID | ||
Lessor | ||
Operating lease payment deferral period | 3 months |
Leases - Lease Revenues (Detail
Leases - Lease Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Lessor | ||||
Sales-type and direct finance lease revenues | $ 10.7 | $ 22.3 | ||
Operating lease revenues | 256.8 | 515.3 | ||
Variable lease revenues | 5.1 | 9.9 | ||
Total lease revenues | $ 272.6 | $ 245.4 | $ 547.5 | $ 484.9 |
Leases - Sales-type and Direct
Leases - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 |
Lessor | ||
Total sales-type and direct financing lease receivables | $ 555.5 | $ 575.9 |
Guaranteed residual values | 138.1 | 195.1 |
Unguaranteed residual values | 53.5 | 61.1 |
Unearned finance income | (76.5) | (80.5) |
Financing lease receivables | 670.6 | 751.6 |
Agriculture and turf equipment | ||
Lessor | ||
Total sales-type and direct financing lease receivables | 405.6 | 422.7 |
Construction and forestry | ||
Lessor | ||
Total sales-type and direct financing lease receivables | $ 149.9 | $ 153.2 |
Leases - Scheduled Payments on
Leases - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Current Year (Details) $ in Millions | May 03, 2020USD ($) |
Payments on Sales-type and Direct Financing Leases Receivables | |
Remainder of 2020 | $ 172.8 |
2021 | 226.4 |
2022 | 142.1 |
2023 | 84.2 |
2024 | 46.6 |
2025 | 16.1 |
Later years | 5.4 |
Total | $ 693.6 |
Leases - Scheduled Payments o_2
Leases - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Prior Year (Details) $ in Millions | Nov. 03, 2019USD ($) |
Scheduled Payments on Finance Leases under the Previous Lease Standard | |
2020 | $ 225.6 |
2021 | 155.2 |
2022 | 103.8 |
2023 | 58.3 |
2024 | 24.2 |
Later years | 8.8 |
Total | $ 575.9 |
Leases - Cost of Equipment on O
Leases - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 6,855.5 | $ 6,888 | |
Accumulated depreciation | (1,433.9) | (1,357.5) | |
Equipment on operating leases - net | 5,421.6 | 5,530.5 | $ 5,169.5 |
Operating lease residual value | 3,859.9 | 3,876.5 | |
Operating lease residual value guarantees | 76.5 | 65.7 | |
Agriculture and turf equipment | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | 5,112.6 | 5,109.4 | |
Construction and forestry | |||
Cost of Equipment on Operating Leases | |||
Equipment on operating leases - gross | $ 1,742.9 | $ 1,778.6 |
Leases - Lease payments for equ
Leases - Lease payments for equipment on operating leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2020 | Nov. 03, 2019 | |
Lease Payments for Equipment on Operating Leases | ||
Remainder of 2020 | $ 403 | |
2021 | 636.6 | |
2022 | 357.9 | |
2023 | 153 | |
2024 | 50.4 | |
2025 | 2.7 | |
Later years | 0.2 | |
Total | 1,603.8 | |
Matured operating lease inventory | 100.7 | $ 160.8 |
Impairment losses on matured operating lease inventory | $ 9.8 | |
Rental Payments for Equipment on Operating Leases | ||
2020 | 738.3 | |
2021 | 484.4 | |
2022 | 231.6 | |
2023 | 92.8 | |
2024 | 14.1 | |
Later years | 0.3 | |
Total | $ 1,561.5 |
Notes Receivable from John De_3
Notes Receivable from John Deere (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | Nov. 03, 2019 | |
John Deere | |||||
Notes Receivable from John Deere | |||||
Maximum remaining term for related party notes receivable | 7 years | ||||
Interest earned | $ 3.6 | $ 4 | $ 8 | $ 7.6 | |
Notes receivable from John Deere | 294.6 | 224 | 294.6 | 224 | $ 291.7 |
Limited Liability Company John Deere Financial | |||||
Notes Receivable from John Deere | |||||
Notes receivable from John Deere | 102.6 | 128.4 | 102.6 | 128.4 | 148.3 |
Banco John Deere S.A. | |||||
Notes Receivable from John Deere | |||||
Notes receivable from John Deere | $ 192 | $ 95.6 | $ 192 | $ 95.6 | $ 143.4 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | 6 Months Ended |
May 03, 2020USD ($) | |
John Deere Financial Inc. | Guarantees of debt and derivatives | Medium-term notes | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 1,578.1 |
Weighted average interest rate (as a percent) | 2.60% |
Maximum remaining maturity | 7 years |
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 67 |
Notional amount | 2,837.7 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | |
Guarantee Obligations | |
Carrying value of assets or liabilities related to JDCFI | 0 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 1,578.1 |
Weighted average interest rate (as a percent) | 2.30% |
Maximum remaining maturity | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Commitments (Details) $ in Millions | May 03, 2020USD ($) |
Limited Liability Company John Deere Financial | |
Commitments | |
Unused commitments | $ 222.1 |
John Deere dealers | |
Commitments | |
Unused commitments | 7,700 |
Customers | |
Commitments | |
Unused commitments | $ 29,000 |
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts | 95.00% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Unrecognized Tax Benefits | |||
Unrecognized tax benefits | $ 28.1 | $ 32.5 | |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 14.1 | $ 17.6 | $ 15.4 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Fair Values of Financial Instruments | |||
Securitization borrowings | $ 4,603.5 | $ 4,277 | $ 4,643.9 |
Current maturities of long-term borrowings | 5,447.1 | 5,716.6 | 4,629.7 |
Long-term borrowings | 20,855.4 | 21,052.4 | 19,705.9 |
Level 3 | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 28,328.5 | 28,396.6 | 27,765.7 |
Retail notes securitized - net | 4,722.2 | 4,361.9 | 4,726.6 |
Level 2 | |||
Fair Values of Financial Instruments | |||
Securitization borrowings | 4,632.2 | 4,301.7 | 4,652.5 |
Current maturities of long-term borrowings | 5,473.6 | 5,727.9 | 4,619.4 |
Long-term borrowings | 20,996 | 21,369.9 | 19,924.3 |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 28,153.8 | 28,382.5 | 27,822.5 |
Retail notes securitized - net | 4,647.7 | 4,338.4 | 4,754.7 |
Securitization borrowings | 4,603.5 | 4,277 | 4,643.9 |
Current maturities of long-term borrowings | 5,447.1 | 5,716.6 | 4,629.7 |
Long-term borrowings | $ 20,855.4 | $ 21,052.4 | $ 19,705.9 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Marketable securities | $ 1.7 | $ 3.2 | $ 4 |
Derivative assets | 767.7 | 333.8 | 150.2 |
Derivative liabilities | 67.6 | 57.3 | 149.1 |
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 | 769.4 | 337 | 154.2 |
Total liabilities | 67.6 | 57.3 | 149.1 |
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 | 742.9 | 331.4 | 112.4 |
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 | ||
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 | 46.8 | 44.4 | 142.4 |
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 | 7.9 | 1.9 | 36.6 |
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 | 20.8 | 9.9 | 4.5 |
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 | 16.9 | 0.5 | 1.1 |
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 | 3 | 2.2 | |
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 | $ 1.7 | $ 3.2 | $ 4 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Debt Securities (Details) $ in Millions | May 03, 2020USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost, due in one year or less | $ 5.9 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value, due in one year or less | $ 1.7 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring, Level 3 Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 | |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | ||||
Equipment on operating leases - net | $ 5,421.6 | $ 5,421.6 | $ 5,530.5 | $ 5,169.5 |
Losses, Equipment on operating leases - net | 21 | |||
Losses, Other assets | 9.8 | |||
Fair Value, Nonrecurring Measurements | Level 3 | ||||
Fair Value, Nonrecurring Level 3 Measurements from Impairments | ||||
Equipment on operating leases - net | 340.3 | 340.3 | 855.4 | |
Losses, Equipment on operating leases - net | 21 | 21 | ||
Other assets | 56.5 | 56.5 | 141.9 | |
Losses, Other assets | 9.8 | 9.8 | ||
Total assets | 396.8 | 396.8 | $ 997.3 | |
Total losses | $ 30.8 | $ 30.8 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 6 Months Ended | ||
May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 | |
Cash Flow Hedges | |||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (14.7) | ||
Gains or losses reclassified from OCI to earnings | 0 | ||
Interest rate contracts | Cash flow hedges | Designated as Hedging Instruments | |||
Cash Flow Hedges | |||
Notional amounts | $ 2,450 | $ 3,150 | $ 2,800 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Fair Value Hedges | Designated as Hedging Instruments | |||
Fair Value Hedges | |||
Notional amounts | $ 8,337.8 | $ 8,336.9 | $ 9,093.2 |
Current Maturities of Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 185.4 | 189.6 | |
Carrying Amount of Hedged Item | (1.7) | ||
Active Hedging Relationships | 0.3 | 1.3 | |
Discontinued Relationships | (1.7) | (4.4) | (4.4) |
Total | (1.7) | (4.1) | (3.1) |
Long-term Borrowings | |||
Borrowings Designated in Fair Value Hedging Relationships | |||
Carrying Amount of Hedged Item | 9,047.8 | 8,378.1 | 8,798.3 |
Active Hedging Relationships | 706.7 | 292.8 | (31.1) |
Discontinued Relationships | 35.6 | (31.6) | (37.6) |
Total | $ 742.3 | $ 261.2 | $ (68.7) |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 2,191.1 | $ 2,312.4 | $ 1,880.3 |
Interest rate caps | Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 1,743.9 | 1,611.3 | 2,034 |
Interest rate caps | Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 1,743.9 | 1,611.3 | 2,034 |
Foreign exchange contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 718.6 | 691.6 | 2,261.5 |
Cross-currency interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 87.2 | $ 91.1 | $ 89.5 |
Derivative Instruments - Fair_2
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 767.7 | $ 333.8 | $ 150.2 |
Total derivative liabilities | 67.6 | 57.3 | 149.1 |
Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 736.3 | 328.8 | 100.3 |
Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 29.9 | 26.5 | 122.1 |
Not Designated as Hedging Instruments | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 23.5 | 3.1 | 13.2 |
Not Designated as Hedging Instruments | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 7.9 | 1.9 | 36.7 |
Not Designated as Hedging Instruments | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 16.9 | 20.9 | 22.5 |
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 6.6 | 2.6 | 12.1 |
Not Designated as Hedging Instruments | Interest rate contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 0.1 | ||
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 16.9 | 17.9 | 20.3 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Other Assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 7.9 | 1.9 | 36.6 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 20.8 | 9.9 | 4.5 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 16.9 | 0.5 | 1.1 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 3 | $ 2.2 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 03, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Not designated as hedges, gains (losses) | $ 88 | $ 31.5 | $ 93.7 | $ 4.8 |
John Deere | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Gain (loss) on derivative transactions with affiliate party | 415.5 | 133.9 | 505.3 | 260.2 |
Interest rate contracts | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Cash flow hedges, recognized in OCI | (14.9) | (6) | (16.5) | (14.6) |
Interest rate contracts | Interest expense | ||||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||||
Fair value hedges, gains (losses) | 400.2 | 139.2 | 491.3 | 269.6 |
Cash flow hedges, reclassified from OCI | (3.9) | 2.5 | (5.1) | 4.6 |
Not designated as hedges, gains (losses) | (2.8) | (8) | (0.8) | (11.7) |
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) | $ 90.8 | $ 39.5 | $ 94.5 | $ 16.5 |
Derivative Instruments - Counte
Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | May 03, 2020 | Nov. 03, 2019 | Apr. 28, 2019 |
Derivative assets | |||
Gross Amounts Recognized | $ 767.7 | $ 333.8 | $ 150.2 |
Derivative liabilities | |||
Gross Amounts Recognized | 67.6 | 57.3 | 149.1 |
John Deere | |||
Derivative assets | |||
Gross Amounts Recognized | 759.8 | 331.9 | 113.5 |
Netting Arrangements | (40.6) | (42.6) | (97.1) |
Net Amount | 719.2 | 289.3 | 16.4 |
Derivative liabilities | |||
Gross Amounts Recognized | 46.8 | 47.4 | 144.6 |
Netting Arrangements | (40.6) | (42.6) | (97.1) |
Net Amount | 6.2 | 4.8 | 47.5 |
External | |||
Derivative assets | |||
Gross Amounts Recognized | 7.9 | 1.9 | 36.7 |
Netting Arrangements | (1.7) | (0.2) | (1) |
Net Amount | 6.2 | 1.7 | 35.7 |
Derivative liabilities | |||
Gross Amounts Recognized | 20.8 | 9.9 | 4.5 |
Netting Arrangements | (1.7) | (0.2) | (1) |
Net Amount | 19.1 | 9.7 | 3.5 |
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 | $ 0 | $ 0 | $ 17.4 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Details) - Health Care and Life Insurance - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 03, 2020 | Feb. 02, 2020 | Apr. 28, 2019 | May 03, 2020 | Apr. 28, 2019 | |
Defined Benefit Plan Disclosure | |||||
Expenses related to defined benefit plans | $ 1.6 | $ 1.3 | $ 6.7 | $ 2.5 | |
Voluntary Employee-Separation Program | |||||
Defined Benefit Plan Disclosure | |||||
Curtailments | $ 3.3 |
Employee-Separation Program (De
Employee-Separation Program (Details) - Voluntary Employee-Separation Program - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
May 03, 2020 | Feb. 02, 2020 | May 03, 2020 | |
Voluntary Employee Separation Program | |||
Total voluntary employee-separation programs' expenses | $ 1 | $ 8.7 | |
Health Care and Life Insurance | |||
Voluntary Employee Separation Program | |||
Curtailment expense | $ (3.3) | ||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | Selling, General and Administrative Expense |