Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Nov. 01, 2020 | Nov. 29, 2020 | |
Document and Entity Information | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 1, 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, SuiteĀ 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 Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
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 | |
ICFR Auditor Attestation Flag | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,500 | |
Entity Public Float | $ 0 | |
Current Fiscal Year End Date | --11-01 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Entity Central Index Key | 0000027673 | |
Amendment Flag | false |
Statement of Consolidated Incom
Statement of Consolidated Income - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Revenues | |||
Finance income earned on retail notes | $ 941.4 | $ 919.3 | $ 765.9 |
Revolving charge account income | 333.8 | 346.2 | 330.3 |
Finance income earned on wholesale receivables | 385 | 535.4 | 447 |
Lease revenues | 1,088.9 | 1,009.8 | 910.2 |
Other income | 58.5 | 79.6 | 78.8 |
Total revenues | 2,807.6 | 2,890.3 | 2,532.2 |
Expenses | |||
Interest expense | 743.9 | 987.8 | 737.2 |
Operating expenses: | |||
Administrative and operating expenses | 470.6 | 533 | 402.1 |
Fees paid to John Deere | 101.6 | 67.5 | 79 |
Provision for credit losses | 89.4 | 45.4 | 47.2 |
Depreciation of equipment on operating leases | 845.1 | 743.6 | 686.8 |
Total operating expenses | 1,506.7 | 1,389.5 | 1,215.1 |
Total expenses | 2,250.6 | 2,377.3 | 1,952.3 |
Income of consolidated group before income taxes | 557 | 513 | 579.9 |
Provision (credit) for income taxes | 134.1 | 95.5 | (217.2) |
Income of consolidated group | 422.9 | 417.5 | 797.1 |
Equity in income of unconsolidated affiliate | 2.2 | 1.8 | 1.9 |
Net income | 425.1 | 419.3 | 799 |
Less: Net income (loss) attributable to noncontrolling interests | 0.1 | 0.1 | (0.2) |
Net income attributable to the Company | $ 425 | $ 419.2 | $ 799.2 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Statement of Consolidated Comprehensive Income | |||
Net income | $ 425.1 | $ 419.3 | $ 799 |
Other comprehensive income (loss), net of income taxes | |||
Cumulative translation adjustment | 18.9 | (7.7) | (20.7) |
Unrealized gain (loss) on derivatives | 0.3 | (21.8) | 9.1 |
Unrealized gain (loss) on debt securities | 0.4 | (2) | |
Other comprehensive income (loss), net of income taxes | 19.6 | (31.5) | (11.6) |
Comprehensive income of consolidated group | 444.7 | 387.8 | 787.4 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | 0.1 | (0.2) |
Comprehensive income attributable to the Company | $ 444.6 | $ 387.7 | $ 787.6 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Assets | ||
Cash and cash equivalents | $ 674.6 | $ 632.6 |
Marketable securities | 2.2 | 3.2 |
Receivables: | ||
Total receivables | 33,557.3 | 32,821.5 |
Allowance for credit losses | (129.1) | (100.6) |
Total receivables - net | 33,428.2 | 32,720.9 |
Other receivables | 88.1 | 75.1 |
Receivables from John Deere | 583.2 | 331.9 |
Equipment on operating leases - net | 5,297.8 | 5,530.5 |
Notes receivable from John Deere | 350 | 291.7 |
Investment in unconsolidated affiliate | 19.3 | 16.4 |
Deferred income taxes | 27.1 | 33.2 |
Other assets | 386.7 | 454.4 |
Total Assets | 40,857.2 | 40,089.9 |
Short-term borrowings: | ||
Commercial paper and other notes payable | 187.5 | 1,460.9 |
Securitization borrowings | 4,656.2 | 4,277 |
John Deere | 5,249.5 | 1,855.3 |
Current maturities of long-term borrowings | 5,741.6 | 5,716.6 |
Total short-term borrowings | 15,834.8 | 13,309.8 |
Other payables to John Deere | 30.1 | 47.4 |
Accounts payable and accrued expenses | 922.3 | 886.7 |
Deposits withheld from dealers and merchants | 114.8 | 137.5 |
Deferred income taxes | 345.9 | 527.7 |
Long-term borrowings | 19,311.1 | 21,052.4 |
Total liabilities | 36,559 | 35,961.5 |
Commitments and contingencies (Note 18) | ||
Stockholder's equity: | ||
Common stock, without par value (issued and outstanding - 2,500 shares owned by John Deere Financial Services, Inc.) | 1,482.8 | 1,482.8 |
Retained earnings | 2,891.6 | 2,741.6 |
Accumulated other comprehensive loss | (77.8) | (97.4) |
Total Company stockholder's equity | 4,296.6 | 4,127 |
Noncontrolling interests | 1.6 | 1.4 |
Total stockholder's equity | 4,298.2 | 4,128.4 |
Total Liabilities and Stockholder's Equity | 40,857.2 | 40,089.9 |
Retail notes | ||
Receivables: | ||
Total receivables | 21,847.2 | 19,500.1 |
Allowance for credit losses | (72.4) | (48.3) |
Retail notes | Unrestricted | ||
Receivables: | ||
Total receivables | 17,158 | 15,150.5 |
Retail notes | Securitized | ||
Receivables: | ||
Total receivables | 4,689.2 | 4,349.6 |
Revolving charge accounts | ||
Receivables: | ||
Total receivables | 3,827.4 | 3,863 |
Allowance for credit losses | (42.3) | (39.3) |
Wholesale receivables | ||
Receivables: | ||
Total receivables | 7,093.3 | 8,706.8 |
Allowance for credit losses | (9.9) | (7.6) |
Financing Leases | ||
Receivables: | ||
Total receivables | 789.4 | 751.6 |
Allowance for credit losses | $ (4.5) | $ (5.4) |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Nov. 01, 2020 | Nov. 03, 2019 |
Consolidated Balance Sheet | ||
Common stock, issued shares | 2,500 | 2,500 |
Common stock, outstanding shares | 2,500 | 2,500 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Cash Flows from Operating Activities: | |||
Net income | $ 425.1 | $ 419.3 | $ 799 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 89.4 | 45.4 | 47.2 |
Provision for depreciation and amortization | 861.6 | 765.1 | 709.7 |
Provision (credit) for deferred income taxes | (175.6) | (286.5) | 3.7 |
Impairment charges | 30.8 | 77.4 | |
Undistributed earnings of unconsolidated affiliate | (2) | (1.6) | (1.8) |
Change in accounts payable and accrued expenses | (25.1) | 85.9 | 63.7 |
Change in accrued income taxes payable/receivable | 45.7 | 444 | (496.3) |
Other | 200.3 | 211.1 | 63.8 |
Net cash provided by operating activities | 1,450.2 | 1,760.1 | 1,189 |
Cash Flows from Investing Activities: | |||
Cost of receivables acquired (excluding wholesale) | (19,060) | (17,714.8) | (16,435.7) |
Collections of receivables (excluding wholesale) | 16,768.9 | 16,097.1 | 15,085.2 |
Decrease (increase) in wholesale receivables - net | 1,649.1 | (758.8) | (1,132.1) |
Cost of equipment on operating leases acquired | (1,904.9) | (2,466.9) | (2,204.8) |
Proceeds from sales of equipment on operating leases | 1,334.6 | 1,213.6 | 1,086.3 |
Cost of notes receivable acquired from John Deere | (198.1) | (126.6) | (58.3) |
Collections of notes receivable from John Deere | 110.7 | 36.5 | 8.5 |
Purchases of marketable securities | (11) | ||
Proceeds from maturities and sales of marketable securities | 5.1 | ||
Other | (35.9) | (52.6) | (35.1) |
Net cash used for investing activities | (1,335.6) | (3,778.4) | (3,686) |
Cash Flows from Financing Activities: | |||
Increase (decrease) in commercial paper and other notes payable - net | (1,269.1) | (658.5) | 92 |
Increase (decrease) in securitization borrowings - net | 379.1 | 395.8 | (237) |
Increase in payable to John Deere - net | 3,291.8 | 491.8 | 832.5 |
Proceeds from issuance of long-term borrowings | 3,561.9 | 6,743.9 | 6,818 |
Payments of long-term borrowings | (5,719.7) | (4,583.3) | (5,055.9) |
Dividends paid | (275) | (330) | (375) |
Capital investment from John Deere | 0.1 | 0.6 | 0.4 |
Debt issuance costs | (24.8) | (31.8) | (29) |
Net cash provided by (used for) financing activities | (55.7) | 2,028.5 | 2,046 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (0.4) | (11.1) | (18.6) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 58.5 | (0.9) | (469.6) |
Cash, cash equivalents, and restricted cash at beginning of year | 710.9 | 711.8 | 1,181.4 |
Cash, cash equivalents, and restricted cash at end of year | $ 769.4 | $ 710.9 | $ 711.8 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Stockholder's Equity - USD ($) $ in Millions | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests | Total |
Balance at Oct. 29, 2017 | $ 1,482.8 | $ 2,229.7 | $ (55.8) | $ 0.5 | $ 3,657.2 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income (loss) | 799.2 | (0.2) | 799 | ||
Other comprehensive income (loss) | (11.6) | (11.6) | |||
Dividends declared | (375) | (375) | |||
Capital investment | 0.4 | 0.4 | |||
ASU No. 2018-02 adoption | (1.5) | 1.5 | |||
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) | 419.2 | 0.1 | 419.3 | ||
Other comprehensive income (loss) | (31.5) | (31.5) | |||
Dividends declared | (330) | (330) | |||
Capital investment | 0.6 | 0.6 | |||
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) | 425 | 0.1 | 425.1 | ||
Other comprehensive income (loss) | 19.6 | 19.6 | |||
Dividends declared | (275) | (275) | |||
Capital investment | 0.1 | 0.1 | |||
Balance at Nov. 01, 2020 | $ 1,482.8 | $ 2,891.6 | $ (77.8) | $ 1.6 | $ 4,298.2 |
Organization and Consolidation
Organization and Consolidation | 12 Months Ended |
Nov. 01, 2020 | |
Organization and Consolidation | |
Organization and Consolidation | John Deere Capital Corporation and Subsidiaries Notes to Consolidated Financial Statements Note 1. Organization and Consolidation Corporate Organization John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company conducts business in Australia, New Zealand, the U.S., and in several countries in Africa, Asia, Europe, and Latin America. Deere & Company and its wholly-owned subsidiaries are collectively called John Deere. Retail notes, revolving charge accounts, wholesale receivables, and financing leases are collectively called āReceivables.ā Receivables and equipment on operating leases are collectively called āReceivables and Leases.ā The Company bears substantially all of the credit risk (net of recovery from withholdings from certain John Deere dealers and merchants) associated with its holding of Receivables and Leases. A small portion of the Receivables and Leases held (less than 5 percent) is guaranteed by certain subsidiaries of Deere & Company. The Company also performs substantially all servicing and collection functions. Servicing and collection functions for a small portion of the Receivables and Leases held (less than 5 percent) are provided by John Deere. John Deere is reimbursed for staff and other administrative services at estimated cost, and for credit lines provided to the Company based on utilization of those lines. Principles of Consolidation The consolidated financial statements include the financial statements of Capital Corporation and its subsidiaries. The consolidated financial statements represent primarily the consolidation of all companies in which Capital Corporation has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEsā economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (See Note 24). Fiscal Year The Company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2020, 2019, and 2018 were November 1, 2020, November 3, 2019, and October 28, 2018, respectively. Fiscal years 2020 and 2018 contained 52 weeks compared to 53 weeks in fiscal year 2019. Variable Interest Entities The Company is the primary beneficiary of and consolidates certain VIEs that are special purpose entities (SPEs) related to the securitization of receivables. See Note 6 for more information on these SPEs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Nov. 01, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The following are significant accounting policies in addition to those included in other Notes to the Consolidated Financial Statements. Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID-19 (COVID) pandemic has resulted in uncertainties in the Companyās business, which may result in actual outcomes differing from those estimates. Revenue Recognition Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in lease revenue. Securitization of Receivables Certain financing receivables are periodically transferred to SPEs in securitization transactions (See Note 6). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as āRetail notes securitized.ā The Company recognizes finance income over the lives of these receivables using the interest method. Depreciation Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. Impairment of Long-Lived Assets The Company evaluates the carrying value of long-lived assets when events or circumstances warrant such a review. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (See Notes 7 and 20). Fees Paid to John Deere Fees paid to John Deere include corporate support fees and interest on intercompany borrowings from John Deere based on approximate market rates. Derivative Financial Instruments The Companyās policy is 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, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All 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 (See Note 21). Foreign Currency Translation The functional currencies for most of the Companyās foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net losses for foreign exchange in 2020 and 2018 were $18.8 million and $11.4 million, respectively. The pretax net gain for foreign exchange in 2019 was $3.9 million. |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Nov. 01, 2020 | |
New Accounting Standards | |
New Accounting Standards | Note 3. 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 The Company also adopted the following standards in 2020, none of which had a material effect on the Companyās consolidated financial statements: Accounting Standards Updates No. 2019-04 Codification Improvements to Topic 326, Financial Instruments ā Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The adoption was for clarifications to ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities No. 2020-04 Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which establishes ASC 848, Reference Rate Reform ā 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 ā Credit Losses. The ASU, along with related amendments, 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. The Company holds deposits from dealers (dealer deposits) to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and credit insurance contracts will be presented in other income and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU will also modify the treatment of the estimated write-off of delinquent receivables by no longer including the estimated benefit of charges to the dealer deposit in the write-off amount (see Note 5). This change will increase the estimated write-offs on delinquent receivables with the benefit of credit losses recovered from dealer deposits also presented in other income. This benefit in both situations will be recorded when the dealer deposits are charged and no longer based on estimated recoveries. The ASU also requires additional disclosures about significant estimates and credit quality. The effective date is the first quarter of fiscal year 2021. The ASU will be adopted using a modified-retrospective approach resulting in an estimated after-tax reduction to retained earnings of $25 million. The Company will also adopt the following standards in future periods, none of which are expected to have a material effect on the Companyās consolidated financial statements: Accounting Standards Updates No. 2018-15 Customerās Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles ā Goodwill and Other ā Internal-Use Software No. 2019-04 Codification Improvements to Topic 326, Financial Instruments ā Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments No. 2019-12 Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes No. 2020-08 Codification Improvements to Subtopic 310-20, Receivables ā Nonrefundable Fees and Other Costs ā |
Receivables
Receivables | 12 Months Ended |
Nov. 01, 2020 | |
Receivables | |
Receivables | Note 4. Receivables Retail Notes Receivable The Company provides and administers financing for retail purchases of new equipment manufactured by John Deereās agriculture and turf and construction and forestry operations and used equipment taken in trade for this equipment. The Company generally purchases retail installment sales and loan contracts (retail notes) from John Deere. These retail notes are acquired by John Deere through John Deere retail dealers. The Company also purchases and finances a limited amount of retail notes unrelated to John Deere. Retail notes receivable by product category at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Unrestricted Securitized Unrestricted Securitized Agriculture and turf ā new ā $ 10,154.9 ā $ 1,812.1 ā $ 8,959.8 ā $ 1,612.7 ā Agriculture and turf ā used ā 4,385.1 ā 2,321.6 ā 4,033.2 ā 2,186.0 ā Construction and forestry ā new ā 2,568.8 ā 535.7 ā 2,255.3 ā 561.9 ā Construction and forestry ā used ā 692.1 ā 117.3 ā 519.6 ā 89.8 ā Total ā 17,800.9 ā 4,786.7 ā 15,767.9 ā 4,450.4 ā Unearned finance income ā (642.9) ā (97.5) ā (617.4) ā (100.8) ā Retail notes receivable ā $ 17,158.0 ā $ 4,689.2 ā $ 15,150.5 ā $ 4,349.6 ā ā Retail notes acquired by the Company had an average original term (based on dollar amounts) of 57 months for the year ended November 1, 2020 and 56 months for the years ended November 3, 2019 and October 28, 2018. Historically, because of prepayments, the average actual life of retail notes has been considerably shorter than the average original term. The average actual life for retail notes liquidated in 2020, 2019, and 2018 was 38 months, 40 months, and 41 months, respectively. Gross retail note installments at November 1, 2020 and November 3, 2019 were scheduled to be received as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Unrestricted Securitized Unrestricted Securitized Due in: ā ā ā ā ā ā ā ā ā ā ā ā ā 0-12 months ā $ 5,466.8 ā $ 1,950.2 ā $ 5,346.7 ā $ 2,041.4 ā 13-24 months ā 4,397.4 ā 1,347.8 ā 3,856.9 ā 1,200.5 ā 25-36 months ā 3,501.9 ā 888.3 ā 3,031.4 ā 770.7 ā 37-48 months ā 2,502.6 ā 460.0 ā 2,076.1 ā 368.6 ā 49-60 months ā 1,462.1 ā 129.2 ā 1,150.0 ā 66.9 ā Over 60 months ā 470.1 ā 11.2 ā 306.8 ā 2.3 ā Total ā $ 17,800.9 ā $ 4,786.7 ā $ 15,767.9 ā $ 4,450.4 ā ā Company guidelines relating to down payment requirements and contract terms on retail notes are generally as follows: ā ā ā ā ā ā ā Down ā Contract ā ā Payment ā Terms Agriculture (new and used): ā ā ā ā ā Seasonal payments 20% ā 3 ā Monthly payments 10% ā 36 ā Turf (new and used): ā ā ā ā ā Seasonal payments ā 10% ā 3 ā Monthly payments ā 0% ā 36 ā Construction and forestry: ā ā ā ā ā New ā 10% ā 24 ā Used ā 15% ā 36 ā ā Finance income is recognized over the lives of the retail notes using the interest method. During 2020, the average effective yield on retail notes held by the Company was approximately 4.7 percent, compared with 5.0 percent in 2019 and 4.5 percent in 2018. Finance income on variable-rate retail notes is adjusted monthly based on fluctuations in the base rate of a specified bank. Net costs incurred in the acquisition of retail notes are deferred and recognized over the expected lives of the retail notes using the interest method. A portion of the finance income earned by the Company arises from financing of retail sales of John Deere equipment on which finance charges are waived or reduced by John Deere for a period from the date of the retail sale to a specified subsequent date. The Company receives compensation from John Deere equal to competitive market interest rates for periods during which finance charges have been waived or reduced. The Company computes the compensation from John Deere for waived or reduced finance charges based on the Companyās estimated funding costs, administrative and operating expenses, credit losses, and required return on equity. The financing rate following the waiver or interest reduction period is not significantly different from the compensation rate from John Deere. The portions of the Companyās finance income earned that were received from John Deere on retail notes containing waiver of finance charges or reduced rates were 36 percent, 36 percent, and 37 percent in 2020, 2019, and 2018, respectively. During 2020, 2019, and 2018, the finance income earned from John Deere on retail notes containing waiver of finance charges or reduced rates was $339.5 million, $334.8 million, and $282.5 million, respectively. A deposit is withheld by the Company on certain John Deere agriculture and turf equipment retail notes originating from dealers. Any subsequent retail note losses, subject to certain limitations by customer, are charged against the withheld deposits. At the end of each calendar quarter, the balance of each dealerās withholding account in excess of a specified percent (ranging from one The Company generally requires that theft and physical damage insurance be carried on all goods leased or securing retail notes and wholesale receivables. In certain markets, the customer may, at the customerās own expense, have the Company or the seller of the goods purchase this insurance or obtain it from other sources. Revolving Charge Accounts Receivable Revolving charge account income is generated primarily by three revolving credit products: John Deere Financial Multi-Use Account, PowerPlan Ć¢ Ć¢ Ć¢ Ć¢ During 2020, 2019, and 2018, the finance income earned from John Deere on revolving charge accounts containing waiver of finance charges or reduced rates was $15.2 million, $14.1 million, and $12.7 million, respectively. Revolving charge accounts receivable at November 1, 2020 and November 3, 2019 totaled $3,827.4 million and $3,863.0 million, and were net of unearned interest income of $58.9 million and $59.8 million for the same periods, respectively. Generally, account holders may pay the account balance in full at any time or make payments over a number of months according to a payment schedule. Wholesale Receivables The Company also finances wholesale inventories of John Deere agriculture and turf equipment and construction and forestry equipment for dealers of those products in the form of wholesale receivables. Wholesale finance income related to these notes is generally recognized monthly based on the daily balance of wholesale receivables outstanding and the applicable effective interest rate. Interest rates vary with a bank base rate, the type of equipment financed, and the balance outstanding. Substantially all wholesale receivables are secured by equipment financed or other collateral. The average actual life for wholesale receivables is less than 12 months. Wholesale receivables at November 1, 2020 and November 3, 2019 totaled $7,093.3 million and $8,706.8 million, respectively. The Company purchases certain wholesale trade receivables from John Deere. These trade receivables arise from John Deereās sales of goods to independent dealers. Under the terms of the sales to dealers, interest is primarily charged to dealers on outstanding balances, from the earlier of the date when goods are sold to retail customers by the dealer or the expiration of certain interest-free periods granted at the time of the sale to the dealer, until payment is received by the Company. Dealers cannot cancel purchases after John Deere recognizes a sale and are responsible for payment even if the equipment is not sold to retail customers. The interest-free periods are determined based on the type of equipment sold and the time of year of the sale. These periods range from one Financing Leases The Company leases agriculture and turf equipment and construction and forestry equipment directly to retail customers. Leases classified as sales-type or direct financing leases are reported in financing leases on the consolidated balance sheet. See Note 7 to the Consolidated Financial Statements for detailed disclosures related to financing leases. Concentration of Credit Risk Receivables have significant concentrations of credit risk in the agriculture and turf and construction and forestry sectors as shown in the previous tables. On a geographic basis, there is not a disproportionate concentration of credit risk in any area. The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral a security interest in the goods associated with those Receivables or with the use of other collateral. |
Allowance for Credit Losses and
Allowance for Credit Losses and Credit Quality of Receivables | 12 Months Ended |
Nov. 01, 2020 | |
Allowance for Credit Losses and Credit Quality of Receivables | |
Allowance for Credit Losses and Credit Quality of Receivables | Note 5. Allowance for Credit Losses and Credit Quality of Receivables Delinquencies Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. The Company monitors the credit quality of Receivables 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 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 Due to the significant, negative effects of COVID, the Company provided short-term relief to dealers and retail customers during 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 An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at November 1, 2020 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 90 Days or ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā Greater ā Total ā ā Past Due ā Past Due ā Past Due ā Past Due Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 101.2 ā $ 43.6 ā $ .5 ā $ 145.3 ā Construction and forestry ā 80.0 ā 38.1 ā ā 1.9 ā 120.0 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 11.5 ā 3.5 ā ā ā ā 15.0 ā Construction and forestry ā 2.4 ā 1.1 ā ā ā ā 3.5 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 3.9 ā 4.4 ā ā 1.1 ā 9.4 ā Construction and forestry ā .3 ā ā ā ā ā ā ā .3 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 10.2 ā 4.0 ā ā 1.5 ā 15.7 ā Construction and forestry ā 2.0 ā .7 ā ā ā ā 2.7 ā Total Receivables ā $ 211.5 ā $ 95.4 ā $ 5.0 ā $ 311.9 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Total Non- ā ā Total ā ā ā Past Due ā Performing ā Current ā Receivables Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 145.3 ā $ 158.3 ā $ 17,727.4 ā $ 18,031.0 ā Construction and forestry ā 120.0 ā 73.5 ā ā 3,622.7 ā 3,816.2 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 15.0 ā 5.4 ā ā 3,710.3 ā 3,730.7 ā Construction and forestry ā 3.5 ā .9 ā ā 92.3 ā 96.7 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 9.4 ā 4.0 ā ā 5,693.7 ā 5,707.1 ā Construction and forestry ā .3 ā ā ā ā ā 1,385.9 ā 1,386.2 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 15.7 ā 14.4 ā ā 613.8 ā 643.9 ā Construction and forestry ā 2.7 ā 6.0 ā ā 136.8 ā 145.5 ā Total Receivables ā $ 311.9 ā $ 262.5 ā $ 32,982.9 ā $ 33,557.3 ā ā An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 90 Days or ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā Greater ā Total ā ā Past Due ā Past Due ā Past Due ā Past Due Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 120.0 ā $ 64.2 ā $ 1.5 ā $ 185.7 ā Construction and forestry ā 73.9 ā 26.6 ā ā ā ā 100.5 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 19.1 ā 9.2 ā ā ā ā 28.3 ā Construction and forestry ā 3.2 ā 1.2 ā ā ā ā 4.4 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 4.1 ā 1.9 ā ā .8 ā 6.8 ā Construction and forestry ā .1 ā ā .3 ā ā .3 ā .7 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 14.6 ā 7.8 ā ā .5 ā 22.9 ā Construction and forestry ā 2.8 ā .7 ā ā ā ā 3.5 ā Total Receivables ā $ 237.8 ā $ 111.9 ā $ 3.1 ā $ 352.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Total Non- ā ā Total ā ā Past Due ā Performing ā Current ā Receivables Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 185.7 ā $ 168.7 ā $ 15,831.5 ā $ 16,185.9 ā Construction and forestry ā 100.5 ā 112.9 ā ā 3,100.8 ā 3,314.2 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 28.3 ā 6.1 ā ā 3,727.9 ā 3,762.3 ā Construction and forestry ā 4.4 ā .9 ā ā 95.4 ā 100.7 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 6.8 ā 6.3 ā ā 6,544.6 ā 6,557.7 ā Construction and forestry ā .7 ā ā 2.9 ā ā 2,145.5 ā 2,149.1 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 22.9 ā 11.6 ā ā 569.8 ā 604.3 ā Construction and forestry ā 3.5 ā 2.5 ā ā 141.3 ā 147.3 ā Total Receivables ā $ 352.8 ā $ 311.9 ā $ 32,156.8 ā $ 32,821.5 ā ā Allowance for Credit Losses Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions in the Companyās major markets and geographies, commodity price trends, and credit risk quality. An analysis of the allowance for credit losses and investment in Receivables at November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revolving ā ā ā ā ā ā ā ā Retail ā Charge ā Wholesale ā Financing ā Total ā ā Notes ā Accounts ā Receivables ā Leases ā Receivables 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 48.3 ā $ 39.3 ā $ 7.6 ā $ 5.4 ā $ 100.6 ā Provision (credit) for credit losses ā 65.2 ā ā 25.1 ā ā (1.9) ā ā 1.0 ā 89.4 ā Write-offs ā (46.9) ā ā (51.6) ā ā (.9) ā ā (2.2) ā (101.6) ā Recoveries ā 5.9 ā ā 29.5 ā ā 1.3 ā ā .5 ā 37.2 ā Other changes ā (.1) ā ā ā ā ā 3.8 ā ā (.2) ā 3.5 ā End of year balance ā $ 72.4 ā $ 42.3 ā $ 9.9 ā $ 4.5 ā $ 129.1 ā Balance individually evaluated * ā $ .8 ā ā ā ā $ 5.0 ā ā ā ā $ 5.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 21,847.2 ā $ 3,827.4 ā $ 7,093.3 ā $ 789.4 ā $ 33,557.3 ā Balance individually evaluated * ā $ 83.8 ā $ .9 ā $ 13.0 ā $ 1.9 ā $ 99.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 51.6 ā $ 42.3 ā $ 8.0 ā $ 4.8 ā $ 106.7 ā Provision (credit) for credit losses ā 18.3 ā ā 28.6 ā ā (4.2) ā ā 2.7 ā 45.4 ā Write-offs ā (28.7) ā ā (56.9) ā ā (.3) ā ā (2.4) ā (88.3) ā Recoveries ā 7.3 ā ā 25.3 ā ā 4.1 ā ā .3 ā 37.0 ā Translation adjustments ā (.2) ā ā ā ā ā ā ā ā ā ā (.2) ā End of year balance ā $ 48.3 ā $ 39.3 ā $ 7.6 ā $ 5.4 ā $ 100.6 ā Balance individually evaluated * ā $ 1.9 ā ā ā ā $ 2.9 ā ā ā ā $ 4.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 19,500.1 ā $ 3,863.0 ā $ 8,706.8 ā $ 751.6 ā $ 32,821.5 ā Balance individually evaluated * ā $ 65.9 ā $ .1 ā $ 9.6 ā $ 1.9 ā $ 77.5 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2018 ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 55.7 ā $ 39.7 ā $ 9.9 ā $ 8.5 ā $ 113.8 ā Provision (credit) for credit losses ā 11.9 ā ā 36.7 ā ā (.8) ā ā (.6) ā 47.2 ā Write-offs ā (22.1) ā ā (54.1) ā ā (1.1) ā ā (3.9) ā (81.2) ā Recoveries ā 6.4 ā ā 20.0 ā ā .2 ā ā .8 ā 27.4 ā Translation adjustments ā (.3) ā ā ā ā ā (.2) ā ā ā ā (.5) ā End of year balance ā $ 51.6 ā $ 42.3 ā $ 8.0 ā $ 4.8 ā $ 106.7 ā Balance individually evaluated * ā $ .1 ā ā ā ā $ 2.8 ā ā ā ā $ 2.9 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 18,110.9 ā $ 3,797.6 ā $ 7,967.6 ā $ 770.6 ā $ 30,646.7 ā Balance individually evaluated * ā $ 59.2 ā $ 2.3 ā $ 8.8 ā ā ā ā $ 70.3 ā * Remainder is collectively evaluated. During 2020, the allowance for credit losses increased primarily due to the negative economic effects related to COVID and other macroeconomic issues, which have significantly affected certain retail borrowers, particularly of construction equipment. Investments in non-performing Receivables at November 1, 2020 and November 3, 2019 were $262.5 million and $311.9 million, respectively. These Receivables as a percentage of total Receivables outstanding were .78 percent and .95 percent at November 1, 2020 and November 3, 2019, respectively. Total Receivable amounts 30 days or more past due and still accruing finance income were $311.9 million at November 1, 2020, compared with $352.8 million at November 3, 2019. These past due amounts represented .93 percent and 1.07 percent of total Receivables outstanding at November 1, 2020 and November 3, 2019, respectively. The allowance for credit losses as a percentage of total Receivables outstanding represented .38 percent at November 1, 2020 and .31 percent at November 3, 2019. In addition, at November 1, 2020 and November 3, 2019, the Company had $110.1 million and $126.0 million, respectively, of deposits primarily withheld from John Deere dealers and merchants available for potential credit losses. Impaired Receivables Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are past due, have provided bankruptcy notification, or require significant collection efforts. Receivables considered to be impaired are generally classified as non-performing. An analysis of impaired Receivables at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unpaid ā ā Average ā ā Recorded ā Principal ā Specific ā Recorded ā ā Investment ā Balance ā Allowance ā Investment 2020 * ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables with specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā $ 1.4 ā $ 1.4 ā $ .8 ā $ 3.0 ā Wholesale receivables ā ā 13.1 ā ā 13.0 ā ā 5.0 ā ā 14.7 ā Total with specific allowance ā 14.5 ā 14.4 ā 5.8 ā 17.7 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables without specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā ā 29.4 ā ā 28.5 ā ā ā ā ā 31.7 ā Total without specific allowance ā 29.4 ā 28.5 ā ā ā ā 31.7 ā Total ā $ 43.9 ā $ 42.9 ā $ 5.8 ā $ 49.4 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 40.8 ā $ 39.9 ā $ 5.8 ā $ 46.1 ā Construction and forestry ā 3.1 ā ā 3.0 ā ā ā ā ā 3.3 ā Total ā $ 43.9 ā $ 42.9 ā $ 5.8 ā $ 49.4 ā (continued) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unpaid ā ā Average ā ā ā Recorded ā Principal ā Specific ā Recorded ā ā ā Investment ā Balance ā Allowance ā Investment ā 2019 * ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables with specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā $ 4.9 ā $ 4.6 ā $ 1.9 ā $ 5.0 ā Wholesale receivables ā ā 5.3 ā ā 5.3 ā ā 2.9 ā ā 5.7 ā Total with specific allowance ā 10.2 ā 9.9 ā 4.8 ā 10.7 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables without specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā 22.9 ā ā 22.4 ā ā ā ā ā 25.0 ā Wholesale receivables ā ā 3.9 ā ā 3.9 ā ā ā ā ā 4.1 ā Total without specific allowance ā 26.8 ā 26.3 ā ā ā ā 29.1 ā Total ā $ 37.0 ā $ 36.2 ā $ 4.8 ā $ 39.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 30.3 ā $ 29.7 ā $ 4.6 ā $ 32.0 ā Construction and forestry ā 6.7 ā ā 6.5 ā ā .2 ā ā 7.8 ā Total ā $ 37.0 ā $ 36.2 ā $ 4.8 ā $ 39.8 ā * 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 2020, 2019, and 2018, the Company identified 468, 328, and 378 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $19.0 million, $14.6 million, and $18.0 million pre-modification and $17.4 million, $13.7 million, and $17.3 million post-modification, respectively. The short-term relief related to COVID mentioned on page 44 did not meet the definition of a troubled debt restructuring. In 2020, 2019 and 2018, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At November 1, 2020, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. Write-offs Total Receivable write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 ā Dollars Percent Dollars Percent Dollars Percent Write-offs: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ (13.7) (.08) % $ (8.0) (.05) % $ (6.4) (.04) % Construction and forestry ā (33.2) (.96) ā (20.7) (.67) ā (15.7) (.57) ā Total retail notes ā (46.9) (.24) ā (28.7) (.15) ā (22.1) (.13) ā Revolving charge accounts ā (51.6) (1.51) ā (56.9) (1.65) ā (54.1) (1.67) ā Wholesale receivables ā (.9) (.01) ā (.3) ā ā (1.1) (.01) ā Financing leases ā (2.2) (.31) ā (2.4) (.34) ā (3.9) (.55) ā Total write-offs ā (101.6) (.31) ā (88.3) (.27) ā (81.2) (.27) ā Recoveries: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 4.2 .03 ā 6.0 .04 ā 4.7 .03 ā Construction and forestry ā 1.7 .05 ā 1.3 .04 ā 1.7 .06 ā Total retail notes ā 5.9 .03 ā 7.3 .04 ā 6.4 .04 ā Revolving charge accounts ā 29.5 .86 ā 25.3 .73 ā 20.0 .62 ā Wholesale receivables ā 1.3 .02 ā 4.1 .04 ā .2 ā ā Financing leases ā .5 .07 ā .3 .04 ā .8 .11 ā Total recoveries ā 37.2 .11 ā 37.0 .11 ā 27.4 .09 ā Total net write-offs ā $ (64.4) (.20) % $ (51.3) (.16) % $ (53.8) (.18) % ā |
Securitization of Receivables
Securitization of Receivables | 12 Months Ended |
Nov. 01, 2020 | |
Securitization of Receivables | |
Securitization of Receivables | Note 6. Securitization of Receivables The Company, as a part of its overall funding strategy, periodically transfers certain Receivables (retail notes) into VIEs that are SPEs, or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does 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 Companyās 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 āSecuritization borrowingsā on the balance sheet. The securitized retail notes are recorded as āRetail notes securitizedā on the balance sheet. The total restricted assets on the 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 SPEsā 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 SPEsā economic performance through its role as servicer of all the Receivables held by the SPEs, and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $2,897.5 million and $2,894.4 million at November 1, 2020 and November 3, 2019, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $2,856.2 million and $2,847.2 million at November 1, 2020 and November 3, 2019, respectively. The credit holders of these SPEs do not have legal recourse to the Companyās 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 Companyās 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 $549.7 million and $447.0 million at November 1, 2020 and November 3, 2019, respectively. The liabilities (securitization borrowings and accrued interest) were $528.1 million and $420.5 million at November 1, 2020 and November 3, 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 conduitsā receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduitsā 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 Companyās carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,327.3 million and $1,079.2 million at November 1, 2020 and November 3, 2019, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,275.1 million and $1,015.2 million at November 1, 2020 and November 3, 2019, respectively. The Companyās carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets at November 1, 2020 was as follows (in millions of dollars): ā ā ā ā ā ā 2020 Carrying value of liabilities ā $ 1,275.1 ā Maximum exposure to loss ā 1,327.3 ā ā The total assets of unconsolidated VIEs related to securitizations were approximately $32.6 billion at November 1, 2020. The components of consolidated restricted assets related to secured borrowings in securitization transactions at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Retail notes securitized ā $ 4,689.2 ā $ 4,349.6 ā Allowance for credit losses ā (12.6) ā (11.2) ā Other assets ā 97.9 ā 82.2 ā Total restricted securitized assets ā $ 4,774.5 ā $ 4,420.6 ā ā The components of consolidated secured borrowings and other liabilities related to securitizations at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Securitization borrowings ā $ 4,656.2 ā $ 4,277.0 ā Accrued interest on borrowings ā 3.2 ā 5.9 ā Total liabilities related to restricted securitized assets ā $ 4,659.4 ā $ 4,282.9 ā ā 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 Companyās 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 November 1, 2020, the maximum remaining term of all restricted securitized retail notes was approximately six years. |
Leases
Leases | 12 Months Ended |
Nov. 01, 2020 | |
Leases | |
Leases | Note 7. 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 ā 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. The Company recorded impairment losses on operating leases of $21.0 million during 2020 due to higher expected return rates and lower estimated values of used construction equipment. During 2019, the Company recorded impairment losses on operating leases of $59.4 million due to lower estimated values of used agriculture and construction equipment. There were no impairment losses on operating leases recorded during 2018. 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 2020. The relief, which generally 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 3 percent of the Companyās operating lease portfolio at November 1, 2020. See Note 5 for information related to short-term relief on financing leases. Lease revenues earned by the Company were as follows (in millions of dollars): ā ā ā ā ā ā 2020 Sales-type and direct financing lease revenues ā $ 46.0 Operating lease revenues ā ā 1,022.5 Variable lease revenues ā 20.4 Total lease revenues ā $ 1,088.9 ā A lease payment discount program, allowing reduced payments over the term of the lease, is administered in a manner similar to finance waivers on retail notes. During 2020, 2019, and 2018, the finance income earned from John Deere on sales-type and direct financing leases containing waiver of finance charges or reduced rates was $3.3 million, $3.5 million, and $3.8 million, respectively. The operating lease revenue earned from John Deere during 2020, 2019, and 2018 was $57.2 million, $42.9 million, and $39.2 million, respectively. 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 at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 ā 2019 Agriculture and turf ā $ 447.5 ā $ 422.7 Construction and forestry ā ā 152.7 ā 153.2 Total ā ā 600.2 ā ā 575.9 Guaranteed residual values ā ā 240.8 ā ā 195.1 Unguaranteed residual values ā ā 32.6 ā ā 61.1 Unearned finance income ā (84.2) ā ā (80.5) Financing leases receivable ā $ 789.4 ā $ 751.6 ā Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at November 1, 2020 were as follows (in millions of dollars): ā ā ā ā ā ā 2020 Due in: ā ā ā 2021 ā $ 415.0 2022 ā ā 186.6 2023 ā ā 122.7 2024 ā ā 71.9 2025 ā ā 34.6 Later years ā 10.2 Total ā $ 841.0 ā Scheduled payments on financing lease receivables under the previous lease standard at November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā 2019 Due in: ā ā ā 2020 ā $ 225.6 2021 ā ā 155.2 2022 ā ā 103.8 2023 ā ā 58.3 2024 ā ā 24.2 Later years ā ā 8.8 Total ā $ 575.9 ā 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 at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 ā 2019 Agriculture and turf ā $ 5,210.4 ā $ 5,109.4 Construction and forestry ā ā 1,595.3 ā 1,778.6 Total ā ā 6,805.7 ā ā 6,888.0 Accumulated depreciation ā (1,507.9) ā ā (1,357.5) Equipment on operating leases - net ā $ 5,297.8 ā $ 5,530.5 ā The total operating lease residual values at November 1, 2020 and November 3, 2019 were $3,826.3 million and $3,876.5 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $141.0 million and $65.7 million at November 1, 2020 and November 3, 2019, respectively. The residual value guarantees at November 1, 2020 and November 3, 2019 include $4.7 million and $11.5 million, respectively, of deposits withheld from John Deere dealers, which are available for potential losses on residual values. Lease payments for equipment on operating leases at November 1, 2020 were scheduled as follows (in millions of dollars): ā ā ā ā ā ā 2020 Due in: ā ā ā 2021 ā $ 744.1 2022 ā ā 472.4 2023 ā ā 231.0 2024 ā ā 97.7 2025 ā ā 16.3 Later years ā 2.3 Total ā $ 1,563.8 ā Rental payments for equipment on operating leases under the previous lease standard at November 3, 2019 were scheduled as follows (in millions of dollars): ā ā ā ā ā ā 2019 Due in: ā ā ā 2020 ā $ 738.3 2021 ā ā 484.4 2022 ā ā 231.6 2023 ā ā 92.8 2024 ā ā 14.1 Later years ā ā .3 Total ā $ 1,561.5 ā Past due balances of operating leases represent the total balance held (net book value plus accrued lease payments) and still accruing finance income with any payment amounts 30 days or more past the contractual payment due date. These amounts were $61.3 million and $85.4 million at November 1, 2020 and November 3, 2019, respectively. The delinquency status of operating leases granted relief due to COVID is based on the modified payment schedule. 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 November 1, 2020 and November 3, 2019 were $64.5 million and $160.8 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheet. During 2020, the Company recorded impairment losses on matured operating lease inventory of $9.8 million due to lower estimated values of used construction equipment. During 2019, the Company recorded impairment losses on matured operating lease inventory of $18.0 million. There were no impairment losses on matured operating lease inventory in 2018. 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 | 12 Months Ended |
Nov. 01, 2020 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | Note 8. Notes Receivable from John Deere The Company makes loans to affiliated companies. The Company receives interest from John Deere at competitive market interest rates. The lending agreements mature over the next seven years. Interest earned from John Deere was $16.6 million, $17.4 million, and $11.1 million in 2020, 2019, and 2018, respectively. The Company had notes receivable from John Deere at November 1, 2020 and November 3, 2019 with the following affiliated companies as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Limited Liability Company John Deere Financial ā $ 132.5 ā $ 148.3 ā Banco John Deere S.A. ā ā 217.5 ā ā 143.4 ā Total Notes Receivable from John Deere ā $ 350.0 ā $ 291.7 ā ā |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Nov. 01, 2020 | |
Short-Term Borrowings | |
Short-Term Borrowings | Note 9. Short-Term Borrowings Short-term borrowings of the Company at November 1, 2020 and November 3, 2019 consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Commercial paper and other notes payable ā $ 187.5 ā $ 1,460.9 ā Securitization borrowings ā 4,656.2 ā 4,277.0 ā John Deere ā 5,249.5 ā 1,855.3 ā Current maturities of long-term borrowings * ā 5,741.6 ā 5,716.6 ā Total ā $ 15,834.8 ā $ 13,309.8 ā ā * Includes unamortized fair value adjustments related to interest rate swaps. Securitization borrowings are secured by retail notes securitized on the balance sheet (See Note 6). Although these securitization borrowings are classified as short-term since payment is required if the retail notes are liquidated early, the payment schedule for these borrowings of $4,656.2 million, which are net of debt acquisition costs, at November 1, 2020 based on the expected liquidation of the retail notes in millions of dollars is as follows: 2021 - $2,346.1, 2022 - $1,360.9, 2023 - $681.1, 2024 - $217.3, 2025 - $50.2, and 2026 - $5.7. The Companyās short-term debt also includes amounts borrowed from John Deere. The Company pays interest on a monthly basis to John Deere for these borrowings based on a market rate. The weighted-average interest rates on total short-term borrowings, excluding current maturities of long-term borrowings, at November 1, 2020 and November 3, 2019, were 1.2 percent and 2.2 percent, respectively. Lines of credit available from U.S. and foreign banks were $8,062.5 million at November 1, 2020. Some of these credit lines are available to both the Company and Deere & Company. At November 1, 2020, $6,801.2 million of these worldwide lines of credit were unused. For the purpose of computing the unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, of the Company and John Deere were primarily considered to constitute utilization. Included in the total credit lines at November 1, 2020 was a 364-day credit facility agreement of $3,000.0 million, expiring in fiscal April 2021. In addition, total credit lines included long-term credit facility agreements of $2,500.0 million, expiring in fiscal April 2024, and $2,500.0 million, expiring in fiscal April 2025. The agreements are mutually extendable and the annual facility fees are not significant. These credit agreements require the Company to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and the ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholderās equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. āSenior debtā consists of the Companyās total interest-bearing obligations, excluding subordinated debt and certain securitization indebtedness, but including borrowings from John Deere. All of the requirements of the credit agreements have been met during the periods included in the consolidated financial statements. The facility fees on these lines of credit are divided between Deere & Company and the Company based on the proportion of their respective forecasted liquidity requirements. Deere & Company has an agreement with Capital Corporation pursuant to which it has agreed to continue to own, directly or through one or more wholly-owned subsidiaries, at least 51 percent of the voting shares of capital stock of Capital Corporation and to maintain the Companyās consolidated tangible net worth at not less than $50.0 million. This agreement also obligates Deere & Company to make payments to the Company such that its consolidated ratio of earnings to fixed charges is not less than 1.05 to 1 for each fiscal quarter. Deere & Companyās obligations to make payments to the Company under the agreement are independent of whether the Company is in default on its indebtedness, obligations, or other liabilities. Further, Deere & Companyās obligations under the agreement are not measured by the amount of the Companyās indebtedness, obligations, or other liabilities. Deere & Companyās obligations to make payments under this agreement are expressly stated not to be a guaranty of any specific indebtedness, obligation, or liability of the Company and are enforceable only by or in the name of Capital Corporation. No payments were required under this agreement during the periods included in the consolidated financial statements. |
Long-Term Borrowings
Long-Term Borrowings | 12 Months Ended |
Nov. 01, 2020 | |
Long-Term Borrowings | |
Long-Term Borrowings | Note 10. Long-Term Borrowings Long-term borrowings of the Company at November 1, 2020 and November 3, 2019 consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Senior Debt: ā ā ā ā ā ā ā Medium-term notes due 2021-2030 (principal $18,668.9 - 2020, $20,794.7 - 2019): ā $ 19,320.6 * $ 21,055.9 * Average interest rate of 1.6% - 2020, 2.8% - 2019 ā ā ā ā ā ā ā Other notes ā 38.2 ā 51.1 ā Total senior debt ā 19,358.8 ā 21,107.0 ā Unamortized debt discount and debt issuance costs ā (47.7) ā (54.6) ā Total ** ā $ 19,311.1 ā $ 21,052.4 ā ā * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year end. The approximate principal amounts of long-term borrowings maturing in each of the next five years, in millions of dollars, are as follows: 2021 - $5,741.3, 2022 - $5,797.4, 2023 - $4,581.5, 2024 - $2,453.2, and 2025 - $1,775.0. |
Capital Stock
Capital Stock | 12 Months Ended |
Nov. 01, 2020 | |
Capital Stock | |
Capital Stock | Note 11. Capital Stock All of Capital Corporationās common stock is owned by JDFS, a wholly-owned finance holding subsidiary of Deere & Company. No shares of common stock of Capital Corporation were reserved for officers or employees or for options, warrants, conversions, or other rights at November 1, 2020 or November 3, 2019. At November 1, 2020 and November 3, 2019, Capital Corporation had authorized, but not issued, 10,000 shares of $1 par value preferred stock. |
Dividends
Dividends | 12 Months Ended |
Nov. 01, 2020 | |
Dividends | |
Dividends | Note 12. Dividends In 2020, 2019, and 2018, Capital Corporation declared and paid cash dividends of $275.0 million, $330.0 million, and $375.0 million, respectively, to JDFS. In each case, JDFS paid comparable dividends to Deere & Company. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 12 Months Ended |
Nov. 01, 2020 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | Note 13. 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 Companyās employees included in the plan. The Companyās pension expense amounted to $2.3 million in 2020, $.7 million in 2019, and $6.2 million in 2018. 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 & Companyās sponsored plans. Health care and life insurance benefits expense is actuarially determined based on the Companyās employees included in the plans and amounted to $12.3 million in 2020, $4.3 million in 2019, and $2.5 million in 2018. The increase in 2020 from the prior year is primarily due to curtailment losses of $5.5 million in 2020 related to voluntary employee-separation programs (See Note 22). Further disclosure for these plans is included in the notes to the Deere & Company 2020 Annual Report on Form 10-K. The Company is a participating employer in certain Deere & Company sponsored defined contribution plans related to employee investment and savings plans primarily in the U.S. The Companyās contributions and costs under these plans were $10.7 million in 2020, $13.2 million in 2019, and $12.7 million in 2018. The contribution rate varies primarily based on Deere & Companyās performance in the prior year and employee participation in the plans. |
Stock Option and Restricted Sto
Stock Option and Restricted Stock Awards | 12 Months Ended |
Nov. 01, 2020 | |
Stock Option and Restricted Stock Awards | |
Stock Option and Restricted Stock Awards | Note 14. Stock Option and Restricted Stock Awards Certain employees of the Company participate in Deere & Company share-based compensation plans. During 2020, 2019, and 2018, the total share-based compensation expense was $6.2 million, $6.9 million, and $7.9 million, respectively, with an income tax benefit recognized in net income of $1.4 million, $1.7 million, and $1.9 million, respectively. Further disclosure for these plans is included in the notes to the Deere & Company 2020 Annual Report on Form 10-K. |
Income Taxes
Income Taxes | 12 Months Ended |
Nov. 01, 2020 | |
Income Taxes | |
Income Taxes | Note 15. Income Taxes The provision (credit) for income taxes by taxing jurisdiction and by significant component consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Current: ā ā ā ā ā ā ā ā ā ā U.S.: ā ā ā ā ā ā ā ā ā ā Federal ā $ 273.2 ā $ 351.1 ā $ (244.5) ā State ā 9.0 ā 1.9 ā 6.0 ā Foreign ā 27.5 ā 29.0 ā 17.6 ā Total current ā 309.7 ā 382.0 ā (220.9) ā ā ā ā ā ā ā ā ā ā ā ā Deferred: ā ā ā ā ā ā ā ā ā ā U.S.: ā ā ā ā ā ā ā ā ā ā Federal ā (179.1) ā (279.9) ā (3.4) ā State ā (4.1) ā (.6) ā 4.2 ā Foreign ā 7.6 ā (6.0) ā 2.9 ā Total deferred ā (175.6) ā (286.5) ā 3.7 ā Provision (credit) for income taxes ā $ 134.1 ā $ 95.5 ā $ (217.2) ā ā On December 22, 2017, the U.S. government enacted tax reform. The primary provisions of tax reform affecting the Company in 2018 were a reduction to the corporate income tax rate from 35 percent to 21 percent and a transition from a worldwide corporate tax system to a primarily territorial tax system. The reduction in the corporate income tax rate required the Company to remeasure its U.S. net deferred tax liabilities to the new corporate tax rate and the transition to a territorial tax system required payment of a one-time tax on the deemed repatriation of undistributed and previously untaxed non-U.S. earnings (repatriation tax). The repatriation tax was paid in 2019. The Companyās U.S. statutory corporate income tax rate was 21 percent for 2020 and 2019, and approximately 23.3 percent for 2018. Beginning in 2019, the Company was subject to additional provisions of the U.S. tax reform legislation. The main provisions of tax reform affecting the Company beginning in 2019 include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion and anti-abuse tax benefits (BEAT) for certain payments between a U.S. corporation and foreign subsidiaries, a limitation on the deductibility of certain executive compensation, and interest expense limitations. The combined effect of these provisions did not have a significant effect on the 2020 or 2019 provision for income taxes. In 2019 and 2018, the Company recorded discrete tax adjustments related to the remeasurement of the Companyās net deferred tax liabilities to the new corporate income tax rate and for the repatriation tax. The income tax expense (benefit) for the net deferred tax liability remeasurement and the repatriation tax adjustments were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2019 ā 2018 ā Net deferred tax liability remeasurement ā $ 4.8 ā $ (362.9) ā Deemed earnings repatriation tax ā (13.9) ā 20.6 ā Total discrete tax expense (benefit) ā $ (9.1) ā $ (342.3) ā ā The repatriation tax expense is based on interpretations of existing laws, regulations, and certain assumptions. The Company continues to analyze the repatriation tax provisions, and monitor legislative and regulatory developments. The taxable income of the Company is included in the consolidated U.S. income tax return of Deere & Company. Under a tax sharing agreement with Deere & Company, the Companyās provision (credit) for income taxes is generally recorded as if Capital Corporation and each of its subsidiaries filed separate income tax returns, with a modification for realizability of certain tax benefits. The difference between the provision (credit) for income taxes recorded by the Company and the provision (credit) for income taxes calculated on an unmodified, separate return basis was not significant in 2020 or 2019. In 2018, the Company recorded a tax benefit under the tax sharing agreement that was $19.0 million higher than an unmodified, separate return basis. The additional tax benefit was related to deductions that were included in the 2018 consolidated U.S. income tax return of Deere & Company at Deere & Companyās 2018 U.S. statutory income tax rate of 23.3 percent. On an unmodified, separate return basis, a net operating loss would have been generated and a deferred tax asset recorded in 2018 at a U.S. statutory income tax rate of 21 percent. The pro forma provision (credit) for income taxes and net income on this basis would have been as follows (in millions of dollars): ā ā ā ā ā ā ā 2018 Provision (credit) for income taxes assuming computation on an unmodified, separate return basis ā $ (198.2) Pro forma net income attributable to the Company ā 780.2 ā The amounts payable to Deere & Company under the tax sharing agreement at November 1, 2020 and November 3, 2019 were $42.9 million and $2.5 million, respectively. The tax sharing payable is included in accounts payable and accrued expenses on the consolidated balance sheet. A comparison of the statutory and effective income tax provision and reasons for related differences follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 U.S. federal income tax provision at a statutory rate (2020 - 21 percent, 2019 - 21 percent, 2018 - 23.3 percent) ā $ 116.9 ā $ 107.7 ā $ 135.3 ā Increase (decrease) resulting from: ā ā ā ā ā ā ā ā ā ā Net deferred tax liability remeasurement ā ā ā ā ā 4.8 ā ā (362.9) ā Deemed earnings repatriation tax ā ā ā ā ā (13.9) ā ā 20.6 ā Other effects of tax reform ā ā ā ā ā ā ā ā (8.5) ā Tax rates on foreign earnings ā 5.8 ā 4.4 ā 2.1 ā Municipal lease income not taxable ā (.9) ā (.8) ā (.8) ā State and local income taxes, net of federal income tax benefit ā 3.8 ā 1.0 ā 7.8 ā Other ā net ā 8.5 ā (7.7) ā (10.8) ā Provision (credit) for income taxes ā $ 134.1 ā $ 95.5 ā $ (217.2) ā ā At November 1, 2020, accumulated earnings in certain subsidiaries outside the U.S. totaled $51.6 million. A provision for foreign withholding taxes has not been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of foreign withholding tax liability on these unremitted earnings is not practicable. Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of deferred income tax assets and liabilities at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Deferred Deferred Deferred Deferred ā ā Tax ā Tax ā Tax ā Tax ā ā Assets ā Liabilities ā Assets ā Liabilities Lease transactions ā ā ā ā $ 404.6 ā ā ā ā $ 571.5 ā Tax over book depreciation ā ā ā ā 3.8 ā ā ā ā 4.7 ā Deferred retail note finance income ā ā ā ā .8 ā ā ā ā 3.2 ā Accrual for retirement and other benefits ā $ 6.2 ā ā ā ā $ 4.9 ā ā ā ā Accrual for other employee benefits ā ā 12.1 ā ā ā ā ā 11.6 ā ā ā ā Allowance for credit losses ā ā 37.1 ā ā ā ā ā 29.1 ā ā ā ā Tax loss and tax credit carryforwards ā 25.3 ā ā ā ā 24.6 ā ā ā ā Federal taxes on deferred state tax deductions ā 10.7 ā ā ā ā 10.8 ā ā ā ā Miscellaneous accruals and other ā 13.5 ā ā 4.5 ā 9.1 ā ā 2.5 ā Less valuation allowances ā (10.0) ā ā ā ā (2.7) ā ā ā ā Deferred income tax assets and liabilities ā $ 94.9 ā $ 413.7 ā $ 87.4 ā $ 581.9 ā ā At November 1, 2020, tax loss and tax credit carryforwards of $25.3 million were available, with $20.0 million expiring from 2021 through 2038 and $5.3 million with an indefinite carryforward period. A reconciliation of the total amounts of unrecognized tax benefits at November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Beginning of year balance ā $ 32.5 ā $ 36.3 ā $ 35.5 ā Increases to tax positions taken during the current year ā 7.4 ā 6.9 ā 9.1 ā Increases to tax positions taken during prior years ā 3.1 ā .8 ā .9 ā Decreases to tax positions taken during prior years ā (4.9) ā (7.1) ā (4.6) ā Decreases due to lapse of statute of limitations ā (4.8) ā (4.4) ā (4.6) ā End of year balance ā $ 33.3 ā $ 32.5 ā $ 36.3 ā ā The amount of unrecognized tax benefits at November 1, 2020 and November 3, 2019 that would affect the effective tax rate if the tax benefits were recognized was $17.2 million and $17.6 million, respectively. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next twelve months would not be significant. The Company files its tax returns according to the tax laws of the jurisdictions in which it operates, which includes the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is included in the consolidated U.S. income tax return and various state returns of Deere & Company. The U.S. Internal Revenue Service has completed the examination of Deere & Companyās federal income tax returns for periods prior to 2015. The years 2015, 2016, and 2017 federal income tax returns are currently under examination. Various state and foreign income tax returns also remain subject to examination by taxing authorities. The Companyās policy is to recognize interest related to income taxes in interest expense and other income, and recognize penalties in administrative and operating expenses. During 2020, 2019, and 2018, the total amount of expense from interest and penalties was $.5 million, none, and $1.8 million, respectively. The total amount of income from interest and penalties for 2020 and 2019 was $.7 million and $5.3 million, respectively, and was not significant in 2018. At November 1, 2020 and November 3, 2019, the liability for accrued interest and penalties totaled $14.6 million and $14.1 million, respectively. |
Other Income and Administrative
Other Income and Administrative and Operating Expenses | 12 Months Ended |
Nov. 01, 2020 | |
Other Income and Administrative and Operating Expenses | |
Other Income and Administrative and Operating Expenses | Note 16. Other Income and Administrative and Operating Expenses The major components of other income and administrative and operating expenses were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 Other income ā ā ā ā ā ā ā ā ā ā Fees from customers * ā ā ā ā ā ā ā $ 22.4 ā Fees from John Deere ā $ 25.5 ā $ 30.7 ā ā 20.1 ā Interest income ā ā 13.8 ā ā 33.1 ā ā 23.3 ā Other ā 19.2 ā 15.8 ā 13.0 ā Total ā $ 58.5 ā $ 79.6 ā $ 78.8 ā ā ā ā ā ā ā ā ā ā ā ā Administrative and operating expenses ā ā ā ā ā ā ā ā ā ā Compensation and benefits ā $ 251.0 ā $ 260.5 ā $ 255.4 ā Operating lease residual losses and impairments ā ā 53.6 ā ā 159.5 ā ā 25.0 ā Other ā 166.0 ā 113.0 ā 121.7 ā Total ā $ 470.6 ā $ 533.0 ā $ 402.1 ā *āā During 2020 and 2019, late fees of $23.2 million and $24.5 million, respectively, from customer retail notes were classified as finance income on the statement of consolidated income. Customer late fees of $22.2 million were included in other income in 2018. ā |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Nov. 01, 2020 | |
Cash Flow Information | |
Cash Flow Information | Note 17. Cash Flow Information For purposes of the statement of consolidated cash flows, the Company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the Companyās short-term borrowings, excluding the securitization borrowings and current maturities of long-term borrowings, mature or may require payment within three months or less. The Companyās restricted cash held at November 1, 2020, November 3, 2019, October 28, 2018, and October 29, 2017 was $94.8 million, $78.3 million, $103.4 million and $125.9 million, respectively. The restricted cash primarily relates to the securitization of receivables and is reported in other assets on the consolidated balance sheet (See Note 6). Cash payments by the Company for interest in 2020, 2019, and 2018 were $806.0 million, $953.8 million, and $751.9 million, respectively. Cash payments (receipts) for income taxes during these same periods were $254.0 million, $(36.1) million, and $268.4 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Nov. 01, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 18. Commitments and Contingencies At November 1, 2020, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $1,914.0 million of medium-term notes outstanding, and a fair value liability of $60.4 million for derivatives outstanding, prior to considering applicable netting provisions, with a notional amount of $3,141.9 million that were guaranteed by Capital Corporation. The weighted average interest rate on the medium-term notes at November 1, 2020 was 2.4 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 JDCFIās 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 $1,088.3 million at November 1, 2020. The weighted average interest rate on the debt at November 1, 2020 was 2.5 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 $9.8 billion at November 1, 2020. The amount of unused commitments to extend credit to customers was $27.9 billion at November 1, 2020. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of the unused commitments to extend credit to customers relate to revolving charge accounts. At November 1, 2020, Capital Corporation had $173.3 million in unused loan commitments, which are unconditionally cancellable, denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia. At November 1, 2020, the Company had restricted other assets associated with borrowings related to securitizations (See Note 6). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of November 1, 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. |
Other Comprehensive Income Item
Other Comprehensive Income Items | 12 Months Ended |
Nov. 01, 2020 | |
Other Comprehensive Income Items | |
Other Comprehensive Income Items | Note 19. Other Comprehensive Income Items The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Cumulative translation adjustment: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (88.4) ā $ (80.7) ā $ (60.0) ā Current period activity ā 18.9 ā (7.7) ā (20.7) ā End of year balance ā $ (69.5) ā $ (88.4) ā $ (80.7) ā ā ā ā ā ā ā ā ā ā ā ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (7.0) ā $ 14.8 ā $ 4.2 ā Current period activity ā .3 ā (21.8) ā 9.1 ā ASU No. 2018-02 adoption ā ā ā ā ā ā ā ā 1.5 ā End of year balance ā $ (6.7) ā $ (7.0) ā $ 14.8 ā ā ā ā ā ā ā ā ā ā ā ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (2.0) ā ā ā ā ā ā ā Current period activity ā ā .4 ā $ (2.0) ā ā ā End of year balance ā $ (1.6) ā $ (2.0) ā ā ā ā ā Following are amounts recorded in and reclassifications out of other comprehensive income (loss) and the income tax effects (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā Before Tax After ā ā Tax ā (Expense) ā Tax ā ā Amount ā Credit ā Amount 2020 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ 18.9 ā ā ā ā $ 18.9 ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā (17.4) ā $ 3.6 ā (13.8) ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā 17.9 ā (3.8) ā 14.1 ā Net unrealized gain (loss) on derivatives ā .5 ā (.2) ā .3 ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Unrealized holding gain (loss) ā ā (.9) ā ā .4 ā ā (.5) ā Reclassification of realized (gain) loss ā Administrative and operating expenses ā ā 1.3 ā ā (.4) ā ā .9 ā Net unrealized gain (loss) on debt securities ā ā .4 ā ā ā ā ā .4 ā Total other comprehensive income (loss) ā $ 19.8 ā $ (.2) ā $ 19.6 ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ (7.7) ā ā ā ā $ (7.7) ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā (22.2) ā $ 4.7 ā (17.5) ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā (5.5) ā 1.2 ā (4.3) ā Net unrealized gain (loss) on derivatives ā (27.7) ā 5.9 ā (21.8) ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Unrealized holding gain (loss) ā ā (2.7) ā ā .7 ā ā (2.0) ā Total other comprehensive income (loss) ā $ (38.1) ā $ 6.6 ā $ (31.5) ā ā ā ā ā ā ā ā ā ā ā ā 2018 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ (20.7) ā ā ā ā $ (20.7) ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā 17.8 ā $ (4.5) ā 13.3 ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā (5.5) ā 1.3 ā (4.2) ā Net unrealized gain (loss) on derivatives ā 12.3 ā (3.2) ā 9.1 ā Total other comprehensive income (loss) ā $ (8.4) ā $ (3.2) ā $ (11.6) ā ā |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Nov. 01, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 20. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs. The fair values of financial instruments that do not approximate the carrying values at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā ā Carrying Fair Carrying Fair ā ā Value ā Value * ā Value ā Value * Receivables financed ā net ā $ 28,751.6 ā $ 28,931.7 ā $ 28,382.5 ā $ 28,396.6 ā Retail notes securitized ā net ā 4,676.6 ā 4,772.9 ā 4,338.4 ā 4,361.9 ā Securitization borrowings ā 4,656.2 ā 4,697.6 ā 4,277.0 ā 4,301.7 ā Current maturities of long-term borrowings ā 5,741.6 ā 5,801.1 ā 5,716.6 ā 5,727.9 ā Long-term borrowings ā 19,311.1 ā 19,784.4 ā 21,052.4 ā 21,369.9 ā ā *āā 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 November 1, 2020 and November 3, 2019 at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2020 2019 ā ā ā ā ā ā ā ā ā Marketable securities ā ā ā ā ā ā ā International debt securities ā $ 2.2 ā $ 3.2 ā Receivables from John Deere ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Interest rate contracts ā ā 575.5 ā ā 331.4 ā Cross-currency interest rate contracts ā 7.7 ā .5 ā Other assets ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Foreign exchange contracts ā 3.8 ā 1.9 ā Total assets * ā $ 589.2 ā $ 337.0 ā ā ā ā ā ā ā ā ā Other payables to John Deere ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Interest rate contracts ā $ 29.4 ā $ 44.4 ā Cross-currency interest rate contracts ā ā .7 ā 3.0 ā Accounts payable and accrued expenses ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Foreign exchange contracts ā .9 ā 9.9 ā Total liabilities ā $ 31.0 ā $ 57.3 ā ā *āā Excluded from this table are the Companyās 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 over the next ten years. At November 1, 2020, the amortized cost basis and fair value of these available-for-sale debt securities were $4.6 million and $2.2 million, respectively. Fair value, nonrecurring Level 3 measurements from impairments at November 1, 2020, November 3, 2019, and October 28, 2018 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value ā Losses ** ā 2020 * 2019 2020 2019 2018 Equipment on operating leases - net ā $ 340.3 ā $ 855.4 ā $ 21.0 ā $ 59.4 ā ā ā ā Other assets ā ā 56.5 ā ā 141.9 ā ā 9.8 ā ā 18.0 ā ā ā ā Total ā $ 396.8 ā $ 997.3 ā $ 30.8 ā $ 77.4 ā ā ā ā *āāāFair value as of May 3, 2020. ** See Receivables with specific allowances in Note 5 that were not significant. See Note 7 for impairments on lease residual values. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Marketable securities ā Derivatives ā Receivables ā Equipment on operating leases - net Other assets ā |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Nov. 01, 2020 | |
Derivative Instruments | |
Derivative Instruments | Note 21. Derivative Instruments 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 November 1, 2020 and November 3, 2019 were $1,550.0 million and $3,150.0 million, respectively. Fair value gains or losses on these cash flow hedges were recorded in OCI and subsequently reclassified into interest expense in the same periods during which the hedged transactions impact 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 November 1, 2020 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $6.7 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur. Fair Value Hedges Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at November 1, 2020 and November 3, 2019 were $6,525.7 million and $8,336.9 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, at November 1, 2020 and November 3, 2019, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cumulative Increase (Decrease) of Fair Value ā ā ā ā ā ā Hedging Adjustments Included in the ā ā ā ā ā ā Carrying Amount ā ā ā Carrying ā Active ā ā ā ā ā ā ā ā ā Amount of ā Hedging ā Discontinued ā ā ā 2020 ā Hedged Item ā Relationships ā Relationships ā Total ā Current maturities of long-term borrowings ā $ 2.5 ā ā ā ā $ 2.5 ā $ 2.5 ā Long-term borrowings ā ā 7,149.8 ā $ 530.0 ā ā 121.6 ā ā 651.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā Current maturities of long-term borrowings ā $ 185.4 ā $ .3 ā $ (4.4) ā $ (4.1) ā Long-term borrowings ā ā 8,378.1 ā ā 292.8 ā ā (31.6) ā ā 261.2 ā ā Derivatives Not Designated as Hedging Instruments The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings. The total notional amounts of the interest rate swaps at November 1, 2020 and November 3, 2019 were $2,336.6 million and $2,312.4 million, the foreign exchange contracts were $172.6 million and $691.6 million, and the cross-currency interest rate contracts were $111.5 million and $91.1 million, respectively. To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $1,961.4 million and $1,611.3 million at November 1, 2020 and November 3, 2019, respectively. Interest rate caps were also purchased with notional amounts of $1,961.4 million and $1,611.3 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 at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Receivables from John Deere ā ā ā ā ā ā ā Designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā $ 565.2 ā $ 328.8 ā ā ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā 10.3 ā 2.6 ā Cross-currency interest rate contracts ā 7.7 ā .5 ā Total not designated ā 18.0 ā 3.1 ā ā ā ā ā ā ā ā ā Other Assets ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Foreign exchange contracts ā 3.8 ā 1.9 ā Total not designated ā 3.8 ā 1.9 ā ā ā ā ā ā ā ā ā Total derivative assets ā $ 587.0 ā $ 333.8 ā ā ā ā ā ā ā ā ā Other Payables to John Deere ā ā ā ā ā ā ā Designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā $ 12.7 ā $ 26.5 ā ā ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā 16.7 ā 17.9 ā Cross-currency interest rate contracts ā ā .7 ā 3.0 ā Total not designated ā 17.4 ā 20.9 ā ā ā ā ā ā ā ā ā Accounts Payable and Accrued Expenses ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Foreign exchange contracts ā .9 ā 9.9 ā ā ā ā ā ā ā ā ā Total derivative liabilities ā $ 31.0 ā $ 57.3 ā ā 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): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 Fair Value Hedges ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense $ 477.3 ā $ 583.2 ā $ (281.4) ā ā ā ā ā ā ā ā ā ā ā ā Cash Flow Hedges ā ā ā ā ā ā ā ā ā ā Recognized in OCI ā ā ā ā ā ā ā ā ā ā Interest rate contracts - OCI (pretax) (17.4) ā (22.2) ā 17.8 ā ā ā ā ā ā ā ā ā ā ā ā Reclassified from OCI ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense (17.9) ā 5.5 ā 5.5 ā ā ā ā ā ā ā ā ā ā ā ā Not Designated as Hedges ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense * $ (5.4) ā $ (25.8) ā $ (6.6) ā Foreign exchange contracts - Administrative and operating expenses * 57.0 ā 45.1 ā 96.7 ā Total not designated ā $ 51.6 ā $ 19.3 ā $ 90.1 ā ā * āā ā ā ā 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 were gains of $468.7 million and $561.9 million during 2020 and 2019, respectively, and a loss of $281.1 million during 2018. 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 Companyās 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 Companyās derivative agreements executed directly with unrelated external counterparties contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. At November 1, 2020 and November 3, 2019, there were no aggregate liability positions for derivatives with credit-risk-related contingent features. In accordance with these agreements, no collateral was posted at November 1, 2020 or November 3, 2019. In addition, the Company paid $2.6 million of collateral either in cash or pledged securities that was outstanding at November 1, 2020, to participate in an international futures market to hedge currency exposure, not included in the table on the subsequent page. 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 November 1, 2020 and November 3, 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 collateral were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā ā ā ā ā ā ā ā ā ā Derivatives: ā Gross Amounts Recognized ā Netting Arrangements ā Cash Collateral Received/Paid ā Net Assets ā ā ā ā ā ā ā ā ā ā ā ā ā External ā $ 3.8 ā $ (.7) ā ā ā $ 3.1 ā John Deere ā 583.2 ā (23.5) ā ā ā ā 559.7 ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā External ā .9 ā (.7) ā ā ā ā .2 ā John Deere ā 30.1 ā (23.5) ā ā ā ā 6.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Derivatives: ā Gross Amounts Recognized ā Netting Arrangements ā Cash Collateral Received/Paid ā Net Assets ā ā ā ā ā ā ā ā ā ā ā ā ā External ā $ 1.9 ā $ (.2) ā ā ā $ 1.7 ā John Deere ā 331.9 ā (42.6) ā ā ā ā 289.3 ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā External ā 9.9 ā (.2) ā ā ā ā 9.7 ā John Deere ā 47.4 ā (42.6) ā ā ā ā 4.8 ā ā |
Employee-Separation Programs
Employee-Separation Programs | 12 Months Ended |
Nov. 01, 2020 | |
Employee-Separation Programs | |
Employee-Separation Programs | Note 22. Employee-Separation Programs During 2020, the Company implemented employee-separation programs for the Companyās salaried workforce in several geographic areas, including the United States, Europe, and Latin America. The programsā main purpose was to improve efficiency through a leaner, more flexible organization. The programs were largely voluntary in nature with the expense recorded primarily in the period in which the employees irrevocably accepted a separation offer. For the limited involuntary employee-separation programs, the expense was recorded when management committed to a plan, the plan was communicated to the employees, and the employees were not required to provide service beyond the legal notification period. The programs provided for cash payments based on years of service, and in some countries subsidized healthcare for a limited period and outplacement services. The programsā total pretax expense in 2020 was $19.7 million, which was recorded in administrative and operating expenses During 2019, the Company incurred voluntary employee-separation program expenses of $8.4 million as part of its effort to reduce operating costs. The programs provided cash payments based on years of service. The expenses were recognized in the periods the employees irrevocably accepted the separation offer and were recorded in administrative and operating expenses. The Company did not offer similar programs in 2018. |
Geographic Area Information
Geographic Area Information | 12 Months Ended |
Nov. 01, 2020 | |
Geographic Area Information | |
Geographic Area Information | Note 23. Geographic Area Information Based on the way the operations are managed and evaluated by management and materiality considerations, the Company is viewed as one operating segment. However, geographic area information for revenues and Receivables attributed to the U.S. and countries outside the U.S. is disclosed below. No individual foreign countryās revenues or Receivables were material for disclosure purposes. Geographic area information as of and for the years ended November 1, 2020, November 3, 2019, and October 28, 2018 is presented below (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Revenues: ā ā ā ā ā ā ā ā ā ā U.S. ā $ 2,517.6 ā $ 2,588.1 ā $ 2,266.8 ā Outside the U.S. ā 290.0 ā 302.2 ā 265.4 ā Total ā $ 2,807.6 ā $ 2,890.3 ā $ 2,532.2 ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā U.S. ā $ 28,196.8 ā $ 27,854.5 ā $ 26,039.6 ā Outside the U.S. ā 5,360.5 ā 4,967.0 ā 4,607.1 ā Total ā $ 33,557.3 ā $ 32,821.5 ā $ 30,646.7 ā ā |
Unconsolidated Affiliated Compa
Unconsolidated Affiliated Company | 12 Months Ended |
Nov. 01, 2020 | |
Unconsolidated Affiliated Company | |
Unconsolidated Affiliated Company | Note 24. Unconsolidated Affiliated Company The Companyās investment in an unconsolidated affiliated company consists of a 50 percent ownership in John Deere Financial S.A.S., a joint venture in France that primarily offers loans and leases to customers. The Company does not control the joint venture and accounts for its investment in the joint venture on the equity basis. The Companyās share of the income or loss of this joint venture is reported in the consolidated income statement under āEquity in income of unconsolidated affiliate.ā The investment in this joint venture is reported in the consolidated balance sheet under āInvestment in unconsolidated affiliate.ā Summarized financial information of the unconsolidated affiliated company for the years ended November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Operations: ā ā ā ā ā ā ā ā ā ā Total revenue ā $ 13.4 ā $ 12.4 ā $ 11.7 ā Net income ā 4.4 ā 3.6 ā 3.9 ā The Companyās equity in net income ā 2.2 ā 1.8 ā 1.9 ā ā ā ā ā ā ā ā ā ā ā 2020 2019 Financial Position: ā ā ā ā ā ā ā Total assets ā $ 327.1 ā $ 258.1 ā Total external borrowings ā 285.2 ā 221.0 ā Total net assets ā 38.5 ā 32.9 ā The Companyās share of net assets ā 19.3 ā 16.4 ā ā |
Supplemental Information (Unaud
Supplemental Information (Unaudited) | 12 Months Ended |
Nov. 01, 2020 | |
Supplemental Information (Unaudited) | |
Supplemental Information (Unaudited) | Note 25. Supplemental Information (Unaudited) Quarterly Information The Company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period (See Note 1). Fiscal year 2020 contained 52 weeks and the fourth quarter contained 13 weeks compared to 53 weeks and 14 weeks in the respective periods in fiscal year 2019. The interim periods (quarters) end in January, April, and July. Supplemental quarterly information for the Company follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth Fiscal ā ā Quarter ā Quarter ā Quarter ā Quarter ā Year 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenues ā $ 718.6 ā $ 700.1 ā $ 696.0 ā $ 692.9 ā $ 2,807.6 ā Interest expense ā 219.8 ā 216.6 ā 161.3 ā 146.2 ā 743.9 ā Operating expenses ā 374.0 ā 452.7 ā 344.6 ā 335.4 ā 1,506.7 ā Provision for income taxes ā 26.1 ā 5.4 ā 44.4 ā 58.2 ā 134.1 ā Equity in income of unconsolidated affiliate ā .7 ā .4 ā .5 ā .6 ā 2.2 ā Net income (loss) attributable to noncontrolling interests ā ā .2 ā ā (.1) ā ā ā ā ā ā ā ā .1 ā Net income attributable to the Company ā $ 99.2 ā $ 25.9 ā $ 146.2 ā $ 153.7 ā $ 425.0 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenues ā $ 660.8 ā $ 703.0 ā $ 741.8 ā $ 784.7 ā $ 2,890.3 ā Interest expense ā 226.5 ā 252.0 ā 256.2 ā 253.1 ā 987.8 ā Operating expenses ā 289.2 ā 331.5 ā 329.2 ā 439.6 ā 1,389.5 ā Provision for income taxes ā 23.9 ā 35.7 ā 11.8 ā 24.1 ā 95.5 ā Equity in income of unconsolidated affiliate ā .6 ā .4 ā .4 ā .4 ā 1.8 ā Net income (loss) attributable to noncontrolling interests ā ā .1 ā ā (.1) ā ā .2 ā ā (.1) ā ā .1 ā Net income attributable to the Company ā $ 121.7 ā $ 84.3 ā $ 144.8 ā $ 68.4 ā $ 419.2 ā ā |
Subsequent Events
Subsequent Events | 12 Months Ended |
Nov. 01, 2020 | |
Subsequent Events | |
Subsequent Events | Note 26. Subsequent Events In December 2020, Capital Corporation paid a $135.0 million dividend to JDFS. JDFS, in turn, paid a $135.0 million dividend to Deere & Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Nov. 01, 2020 | |
Summary of Significant Accounting Policies | |
Consolidation, Policy | Principles of Consolidation The consolidated financial statements include the financial statements of Capital Corporation and its subsidiaries. The consolidated financial statements represent primarily the consolidation of all companies in which Capital Corporation has a controlling interest. Certain variable interest entities (VIEs) are consolidated since the Company has both the power to direct the activities that most significantly impact the VIEsā economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The Company records its investment in each unconsolidated affiliated company (generally 20 to 50 percent ownership) at its related equity in the net assets of such affiliate (See Note 24). |
Fiscal Year | Fiscal Year The Company uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. The fiscal year ends for 2020, 2019, and 2018 were November 1, 2020, November 3, 2019, and October 28, 2018, respectively. Fiscal years 2020 and 2018 contained 52 weeks compared to 53 weeks in fiscal year 2019. |
Use of Estimates in Financial Statements | Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID-19 (COVID) pandemic has resulted in uncertainties in the Companyās business, which may result in actual outcomes differing from those estimates. |
Revenue Recognition | Revenue Recognition Financing revenue is recorded over the lives of the related receivables using the interest method. Deferred costs on the origination of receivables are recognized as a reduction in finance revenue over the expected lives of the receivables using the interest method. Income and deferred costs on the origination of operating leases are recognized on a straight-line basis over the scheduled lease terms in lease revenue. |
Securitization of Receivables | Securitization of Receivables Certain financing receivables are periodically transferred to SPEs in securitization transactions (See Note 6). These securitizations qualify as collateral for secured borrowings and no gains or losses are recognized at the time of securitization. The receivables remain on the balance sheet and are classified as āRetail notes securitized.ā The Company recognizes finance income over the lives of these receivables using the interest method. |
Depreciation | Depreciation Equipment on operating leases is depreciated over the terms of the leases using the straight-line method. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates the carrying value of long-lived assets when events or circumstances warrant such a review. If the carrying value of the long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset (See Notes 7 and 20). |
Fees Paid to John Deere | Fees Paid to John Deere Fees paid to John Deere include corporate support fees and interest on intercompany borrowings from John Deere based on approximate market rates. |
Derivative Financial Instruments | Derivative Financial Instruments The Companyās policy is 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, fair value hedge, or remains undesignated. Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in other comprehensive income (OCI) and reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. Changes in the fair value of derivatives that are designated and effective as fair value hedges are recognized currently in net income. These changes are offset in net income by fair value changes related to the risk being hedged on the hedged item. Changes in the fair value of undesignated hedges are recognized currently in the income statement. All 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 (See Note 21). |
Foreign Currency Translation | Foreign Currency Translation The functional currencies for most of the Companyās foreign operations are their respective local currencies. The assets and liabilities of these operations are translated into U.S. dollars at the end of the period exchange rates. The revenues and expenses are translated at weighted-average rates for the period. The gains or losses from these translations are recorded in OCI. Gains or losses from transactions denominated in a currency other than the functional currency of the subsidiary involved and foreign exchange derivative contracts are included in net income. The pretax net losses for foreign exchange in 2020 and 2018 were $18.8 million and $11.4 million, respectively. The pretax net gain for foreign exchange in 2019 was $3.9 million. |
Receivables - Non-Performing, Policy | Delinquencies Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. The Company monitors the credit quality of Receivables 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 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 Impaired Receivables Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are past due, have provided bankruptcy notification, or require significant collection efforts. Receivables considered to be impaired are generally classified as non-performing. |
Receivables - Allowance for Credit Losses, Policy | Allowance for Credit Losses Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions in the Companyās major markets and geographies, commodity price trends, 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.Ā 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. |
Lessor Leases, Policy | 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 ā 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. |
Lease and Non-lease Components, Policy | The Company has elected to combine lease and nonlease components. |
Unremitted Earnings in Foreign Investment, Policy | At November 1, 2020, accumulated earnings in certain subsidiaries outside the U.S. totaled $51.6 million. A provision for foreign withholding taxes has not been made since these earnings are expected to remain indefinitely reinvested outside the U.S. Determination of the amount of foreign withholding tax liability on these unremitted earnings is not practicable. |
Cash and Cash Equivalents, Policy | For purposes of the statement of consolidated cash flows, the Company considers investments with purchased maturities of three months or less to be cash equivalents. Substantially all of the Companyās short-term borrowings, excluding the securitization borrowings and current maturities of long-term borrowings, mature or may require payment within three months or less. |
Fair Value of Financial Instruments, Policy | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied. |
Receivables (Tables)
Receivables (Tables) - Retail notes | 12 Months Ended |
Nov. 01, 2020 | |
Receivables | |
Schedule of Receivables by Product Category | Retail notes receivable by product category at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Unrestricted Securitized Unrestricted Securitized Agriculture and turf ā new ā $ 10,154.9 ā $ 1,812.1 ā $ 8,959.8 ā $ 1,612.7 ā Agriculture and turf ā used ā 4,385.1 ā 2,321.6 ā 4,033.2 ā 2,186.0 ā Construction and forestry ā new ā 2,568.8 ā 535.7 ā 2,255.3 ā 561.9 ā Construction and forestry ā used ā 692.1 ā 117.3 ā 519.6 ā 89.8 ā Total ā 17,800.9 ā 4,786.7 ā 15,767.9 ā 4,450.4 ā Unearned finance income ā (642.9) ā (97.5) ā (617.4) ā (100.8) ā Retail notes receivable ā $ 17,158.0 ā $ 4,689.2 ā $ 15,150.5 ā $ 4,349.6 ā |
Schedule of Receivable Installments | Gross retail note installments at November 1, 2020 and November 3, 2019 were scheduled to be received as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Unrestricted Securitized Unrestricted Securitized Due in: ā ā ā ā ā ā ā ā ā ā ā ā ā 0-12 months ā $ 5,466.8 ā $ 1,950.2 ā $ 5,346.7 ā $ 2,041.4 ā 13-24 months ā 4,397.4 ā 1,347.8 ā 3,856.9 ā 1,200.5 ā 25-36 months ā 3,501.9 ā 888.3 ā 3,031.4 ā 770.7 ā 37-48 months ā 2,502.6 ā 460.0 ā 2,076.1 ā 368.6 ā 49-60 months ā 1,462.1 ā 129.2 ā 1,150.0 ā 66.9 ā Over 60 months ā 470.1 ā 11.2 ā 306.8 ā 2.3 ā Total ā $ 17,800.9 ā $ 4,786.7 ā $ 15,767.9 ā $ 4,450.4 ā |
Schedule of Guidelines Relating to Down Payment Requirements and Contract Terms | Company guidelines relating to down payment requirements and contract terms on retail notes are generally as follows: ā ā ā ā ā ā ā Down ā Contract ā ā Payment ā Terms Agriculture (new and used): ā ā ā ā ā Seasonal payments 20% ā 3 ā Monthly payments 10% ā 36 ā Turf (new and used): ā ā ā ā ā Seasonal payments ā 10% ā 3 ā Monthly payments ā 0% ā 36 ā Construction and forestry: ā ā ā ā ā New ā 10% ā 24 ā Used ā 15% ā 36 ā |
Allowance for Credit Losses a_2
Allowance for Credit Losses and Credit Quality of Receivables (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Allowance for Credit Losses and Credit Quality of Receivables | |
Age Analysis of past due Receivables that are still accruing interest and non-performing Receivables | An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at November 1, 2020 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 90 Days or ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā Greater ā Total ā ā Past Due ā Past Due ā Past Due ā Past Due Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 101.2 ā $ 43.6 ā $ .5 ā $ 145.3 ā Construction and forestry ā 80.0 ā 38.1 ā ā 1.9 ā 120.0 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 11.5 ā 3.5 ā ā ā ā 15.0 ā Construction and forestry ā 2.4 ā 1.1 ā ā ā ā 3.5 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 3.9 ā 4.4 ā ā 1.1 ā 9.4 ā Construction and forestry ā .3 ā ā ā ā ā ā ā .3 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 10.2 ā 4.0 ā ā 1.5 ā 15.7 ā Construction and forestry ā 2.0 ā .7 ā ā ā ā 2.7 ā Total Receivables ā $ 211.5 ā $ 95.4 ā $ 5.0 ā $ 311.9 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Total Non- ā ā Total ā ā ā Past Due ā Performing ā Current ā Receivables Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 145.3 ā $ 158.3 ā $ 17,727.4 ā $ 18,031.0 ā Construction and forestry ā 120.0 ā 73.5 ā ā 3,622.7 ā 3,816.2 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 15.0 ā 5.4 ā ā 3,710.3 ā 3,730.7 ā Construction and forestry ā 3.5 ā .9 ā ā 92.3 ā 96.7 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 9.4 ā 4.0 ā ā 5,693.7 ā 5,707.1 ā Construction and forestry ā .3 ā ā ā ā ā 1,385.9 ā 1,386.2 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 15.7 ā 14.4 ā ā 613.8 ā 643.9 ā Construction and forestry ā 2.7 ā 6.0 ā ā 136.8 ā 145.5 ā Total Receivables ā $ 311.9 ā $ 262.5 ā $ 32,982.9 ā $ 33,557.3 ā ā An age analysis of past due Receivables that are still accruing interest and non-performing Receivables at November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 90 Days or ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā Greater ā Total ā ā Past Due ā Past Due ā Past Due ā Past Due Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 120.0 ā $ 64.2 ā $ 1.5 ā $ 185.7 ā Construction and forestry ā 73.9 ā 26.6 ā ā ā ā 100.5 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 19.1 ā 9.2 ā ā ā ā 28.3 ā Construction and forestry ā 3.2 ā 1.2 ā ā ā ā 4.4 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 4.1 ā 1.9 ā ā .8 ā 6.8 ā Construction and forestry ā .1 ā ā .3 ā ā .3 ā .7 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 14.6 ā 7.8 ā ā .5 ā 22.9 ā Construction and forestry ā 2.8 ā .7 ā ā ā ā 3.5 ā Total Receivables ā $ 237.8 ā $ 111.9 ā $ 3.1 ā $ 352.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Total Non- ā ā Total ā ā Past Due ā Performing ā Current ā Receivables Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 185.7 ā $ 168.7 ā $ 15,831.5 ā $ 16,185.9 ā Construction and forestry ā 100.5 ā 112.9 ā ā 3,100.8 ā 3,314.2 ā Revolving charge accounts: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 28.3 ā 6.1 ā ā 3,727.9 ā 3,762.3 ā Construction and forestry ā 4.4 ā .9 ā ā 95.4 ā 100.7 ā Wholesale receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 6.8 ā 6.3 ā ā 6,544.6 ā 6,557.7 ā Construction and forestry ā .7 ā ā 2.9 ā ā 2,145.5 ā 2,149.1 ā Financing leases: ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 22.9 ā 11.6 ā ā 569.8 ā 604.3 ā Construction and forestry ā 3.5 ā 2.5 ā ā 141.3 ā 147.3 ā Total Receivables ā $ 352.8 ā $ 311.9 ā $ 32,156.8 ā $ 32,821.5 ā ā |
Analysis of the Allowance for Credit Losses and Investment in Receivables | An analysis of the allowance for credit losses and investment in Receivables at November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revolving ā ā ā ā ā ā ā ā Retail ā Charge ā Wholesale ā Financing ā Total ā ā Notes ā Accounts ā Receivables ā Leases ā Receivables 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 48.3 ā $ 39.3 ā $ 7.6 ā $ 5.4 ā $ 100.6 ā Provision (credit) for credit losses ā 65.2 ā ā 25.1 ā ā (1.9) ā ā 1.0 ā 89.4 ā Write-offs ā (46.9) ā ā (51.6) ā ā (.9) ā ā (2.2) ā (101.6) ā Recoveries ā 5.9 ā ā 29.5 ā ā 1.3 ā ā .5 ā 37.2 ā Other changes ā (.1) ā ā ā ā ā 3.8 ā ā (.2) ā 3.5 ā End of year balance ā $ 72.4 ā $ 42.3 ā $ 9.9 ā $ 4.5 ā $ 129.1 ā Balance individually evaluated * ā $ .8 ā ā ā ā $ 5.0 ā ā ā ā $ 5.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 21,847.2 ā $ 3,827.4 ā $ 7,093.3 ā $ 789.4 ā $ 33,557.3 ā Balance individually evaluated * ā $ 83.8 ā $ .9 ā $ 13.0 ā $ 1.9 ā $ 99.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 51.6 ā $ 42.3 ā $ 8.0 ā $ 4.8 ā $ 106.7 ā Provision (credit) for credit losses ā 18.3 ā ā 28.6 ā ā (4.2) ā ā 2.7 ā 45.4 ā Write-offs ā (28.7) ā ā (56.9) ā ā (.3) ā ā (2.4) ā (88.3) ā Recoveries ā 7.3 ā ā 25.3 ā ā 4.1 ā ā .3 ā 37.0 ā Translation adjustments ā (.2) ā ā ā ā ā ā ā ā ā ā (.2) ā End of year balance ā $ 48.3 ā $ 39.3 ā $ 7.6 ā $ 5.4 ā $ 100.6 ā Balance individually evaluated * ā $ 1.9 ā ā ā ā $ 2.9 ā ā ā ā $ 4.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 19,500.1 ā $ 3,863.0 ā $ 8,706.8 ā $ 751.6 ā $ 32,821.5 ā Balance individually evaluated * ā $ 65.9 ā $ .1 ā $ 9.6 ā $ 1.9 ā $ 77.5 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2018 ā ā ā ā ā ā ā ā ā ā Allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ 55.7 ā $ 39.7 ā $ 9.9 ā $ 8.5 ā $ 113.8 ā Provision (credit) for credit losses ā 11.9 ā ā 36.7 ā ā (.8) ā ā (.6) ā 47.2 ā Write-offs ā (22.1) ā ā (54.1) ā ā (1.1) ā ā (3.9) ā (81.2) ā Recoveries ā 6.4 ā ā 20.0 ā ā .2 ā ā .8 ā 27.4 ā Translation adjustments ā (.3) ā ā ā ā ā (.2) ā ā ā ā (.5) ā End of year balance ā $ 51.6 ā $ 42.3 ā $ 8.0 ā $ 4.8 ā $ 106.7 ā Balance individually evaluated * ā $ .1 ā ā ā ā $ 2.8 ā ā ā ā $ 2.9 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā End of year balance ā $ 18,110.9 ā $ 3,797.6 ā $ 7,967.6 ā $ 770.6 ā $ 30,646.7 ā Balance individually evaluated * ā $ 59.2 ā $ 2.3 ā $ 8.8 ā ā ā ā $ 70.3 ā * Remainder is collectively evaluated. |
Analysis of Impaired Receivables | An analysis of impaired Receivables at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unpaid ā ā Average ā ā Recorded ā Principal ā Specific ā Recorded ā ā Investment ā Balance ā Allowance ā Investment 2020 * ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables with specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā $ 1.4 ā $ 1.4 ā $ .8 ā $ 3.0 ā Wholesale receivables ā ā 13.1 ā ā 13.0 ā ā 5.0 ā ā 14.7 ā Total with specific allowance ā 14.5 ā 14.4 ā 5.8 ā 17.7 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables without specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā ā 29.4 ā ā 28.5 ā ā ā ā ā 31.7 ā Total without specific allowance ā 29.4 ā 28.5 ā ā ā ā 31.7 ā Total ā $ 43.9 ā $ 42.9 ā $ 5.8 ā $ 49.4 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 40.8 ā $ 39.9 ā $ 5.8 ā $ 46.1 ā Construction and forestry ā 3.1 ā ā 3.0 ā ā ā ā ā 3.3 ā Total ā $ 43.9 ā $ 42.9 ā $ 5.8 ā $ 49.4 ā (continued) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unpaid ā ā Average ā ā ā Recorded ā Principal ā Specific ā Recorded ā ā ā Investment ā Balance ā Allowance ā Investment ā 2019 * ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables with specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā $ 4.9 ā $ 4.6 ā $ 1.9 ā $ 5.0 ā Wholesale receivables ā ā 5.3 ā ā 5.3 ā ā 2.9 ā ā 5.7 ā Total with specific allowance ā 10.2 ā 9.9 ā 4.8 ā 10.7 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Receivables without specific allowance: ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes ā 22.9 ā ā 22.4 ā ā ā ā ā 25.0 ā Wholesale receivables ā ā 3.9 ā ā 3.9 ā ā ā ā ā 4.1 ā Total without specific allowance ā 26.8 ā 26.3 ā ā ā ā 29.1 ā Total ā $ 37.0 ā $ 36.2 ā $ 4.8 ā $ 39.8 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ 30.3 ā $ 29.7 ā $ 4.6 ā $ 32.0 ā Construction and forestry ā 6.7 ā ā 6.5 ā ā .2 ā ā 7.8 ā Total ā $ 37.0 ā $ 36.2 ā $ 4.8 ā $ 39.8 ā * Finance income recognized was not material. |
Total Receivable Write-offs and Recoveries, by Product, and as a Percentage of Average Balances Held | Total Receivable write-offs and recoveries, by product, and as a percentage of average balances held during the year, were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 ā Dollars Percent Dollars Percent Dollars Percent Write-offs: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā $ (13.7) (.08) % $ (8.0) (.05) % $ (6.4) (.04) % Construction and forestry ā (33.2) (.96) ā (20.7) (.67) ā (15.7) (.57) ā Total retail notes ā (46.9) (.24) ā (28.7) (.15) ā (22.1) (.13) ā Revolving charge accounts ā (51.6) (1.51) ā (56.9) (1.65) ā (54.1) (1.67) ā Wholesale receivables ā (.9) (.01) ā (.3) ā ā (1.1) (.01) ā Financing leases ā (2.2) (.31) ā (2.4) (.34) ā (3.9) (.55) ā Total write-offs ā (101.6) (.31) ā (88.3) (.27) ā (81.2) (.27) ā Recoveries: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Retail notes: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Agriculture and turf ā 4.2 .03 ā 6.0 .04 ā 4.7 .03 ā Construction and forestry ā 1.7 .05 ā 1.3 .04 ā 1.7 .06 ā Total retail notes ā 5.9 .03 ā 7.3 .04 ā 6.4 .04 ā Revolving charge accounts ā 29.5 .86 ā 25.3 .73 ā 20.0 .62 ā Wholesale receivables ā 1.3 .02 ā 4.1 .04 ā .2 ā ā Financing leases ā .5 .07 ā .3 .04 ā .8 .11 ā Total recoveries ā 37.2 .11 ā 37.0 .11 ā 27.4 .09 ā Total net write-offs ā $ (64.4) (.20) % $ (51.3) (.16) % $ (53.8) (.18) % |
Securitization of Receivables (
Securitization of Receivables (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Securitization of Receivables | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Companyās carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets at November 1, 2020 was as follows (in millions of dollars): ā ā ā ā ā ā 2020 Carrying value of liabilities ā $ 1,275.1 ā Maximum exposure to loss ā 1,327.3 ā ā |
Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions | The components of consolidated restricted assets related to secured borrowings in securitization transactions at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Retail notes securitized ā $ 4,689.2 ā $ 4,349.6 ā Allowance for credit losses ā (12.6) ā (11.2) ā Other assets ā 97.9 ā 82.2 ā Total restricted securitized assets ā $ 4,774.5 ā $ 4,420.6 ā ā The components of consolidated secured borrowings and other liabilities related to securitizations at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Securitization borrowings ā $ 4,656.2 ā $ 4,277.0 ā Accrued interest on borrowings ā 3.2 ā 5.9 ā Total liabilities related to restricted securitized assets ā $ 4,659.4 ā $ 4,282.9 ā ā |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Leases | |
Schedule of Lease Revenues Earned | Lease revenues earned by the Company were as follows (in millions of dollars): ā ā ā ā ā ā 2020 Sales-type and direct financing lease revenues ā $ 46.0 Operating lease revenues ā ā 1,022.5 Variable lease revenues ā 20.4 Total lease revenues ā $ 1,088.9 |
Schedule of Sales-type and Direct Financing Lease Receivables by Product Category | Sales-type and direct financing lease receivables by product category at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 ā 2019 Agriculture and turf ā $ 447.5 ā $ 422.7 Construction and forestry ā ā 152.7 ā 153.2 Total ā ā 600.2 ā ā 575.9 Guaranteed residual values ā ā 240.8 ā ā 195.1 Unguaranteed residual values ā ā 32.6 ā ā 61.1 Unearned finance income ā (84.2) ā ā (80.5) Financing leases receivable ā $ 789.4 ā $ 751.6 |
Schedule of Scheduled Payments, Including Guaranteed Residual Values, on Sales-type and Direct Financing Lease Receivables | Scheduled payments, including guaranteed residual values, on sales-type and direct financing lease receivables at November 1, 2020 were as follows (in millions of dollars): ā ā ā ā ā ā 2020 Due in: ā ā ā 2021 ā $ 415.0 2022 ā ā 186.6 2023 ā ā 122.7 2024 ā ā 71.9 2025 ā ā 34.6 Later years ā 10.2 Total ā $ 841.0 |
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): ā ā ā ā ā ā 2019 Due in: ā ā ā 2020 ā $ 225.6 2021 ā ā 155.2 2022 ā ā 103.8 2023 ā ā 58.3 2024 ā ā 24.2 Later years ā ā 8.8 Total ā $ 575.9 |
Schedule of Cost of Equipment on Operating Leases by Product Category | The cost of equipment on operating leases by product category at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 ā 2019 Agriculture and turf ā $ 5,210.4 ā $ 5,109.4 Construction and forestry ā ā 1,595.3 ā 1,778.6 Total ā ā 6,805.7 ā ā 6,888.0 Accumulated depreciation ā (1,507.9) ā ā (1,357.5) Equipment on operating leases - net ā $ 5,297.8 ā $ 5,530.5 |
Schedule of Lease Payments for Equipment on Operating Leases | Lease payments for equipment on operating leases at November 1, 2020 were scheduled as follows (in millions of dollars): ā ā ā ā ā ā 2020 Due in: ā ā ā 2021 ā $ 744.1 2022 ā ā 472.4 2023 ā ā 231.0 2024 ā ā 97.7 2025 ā ā 16.3 Later years ā 2.3 Total ā $ 1,563.8 |
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): ā ā ā ā ā ā 2019 Due in: ā ā ā 2020 ā $ 738.3 2021 ā ā 484.4 2022 ā ā 231.6 2023 ā ā 92.8 2024 ā ā 14.1 Later years ā ā .3 Total ā $ 1,561.5 |
Notes Receivable from John De_2
Notes Receivable from John Deere (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | The Company had notes receivable from John Deere at November 1, 2020 and November 3, 2019 with the following affiliated companies as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Limited Liability Company John Deere Financial ā $ 132.5 ā $ 148.3 ā Banco John Deere S.A. ā ā 217.5 ā ā 143.4 ā Total Notes Receivable from John Deere ā $ 350.0 ā $ 291.7 ā |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Short-Term Borrowings | |
Short-Term Borrowings | Short-term borrowings of the Company at November 1, 2020 and November 3, 2019 consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Commercial paper and other notes payable ā $ 187.5 ā $ 1,460.9 ā Securitization borrowings ā 4,656.2 ā 4,277.0 ā John Deere ā 5,249.5 ā 1,855.3 ā Current maturities of long-term borrowings * ā 5,741.6 ā 5,716.6 ā Total ā $ 15,834.8 ā $ 13,309.8 ā ā * Includes unamortized fair value adjustments related to interest rate swaps. |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Long-Term Borrowings | |
Long-Term Borrowings | Long-term borrowings of the Company at November 1, 2020 and November 3, 2019 consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Senior Debt: ā ā ā ā ā ā ā Medium-term notes due 2021-2030 (principal $18,668.9 - 2020, $20,794.7 - 2019): ā $ 19,320.6 * $ 21,055.9 * Average interest rate of 1.6% - 2020, 2.8% - 2019 ā ā ā ā ā ā ā Other notes ā 38.2 ā 51.1 ā Total senior debt ā 19,358.8 ā 21,107.0 ā Unamortized debt discount and debt issuance costs ā (47.7) ā (54.6) ā Total ** ā $ 19,311.1 ā $ 21,052.4 ā ā * Includes unamortized fair value adjustments related to interest rate swaps. ** All interest rates are as of year end. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Income Taxes | |
Provision (Credit) for Income Taxes by Taxing Jurisdiction and by Significant Component | The provision (credit) for income taxes by taxing jurisdiction and by significant component consisted of the following (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Current: ā ā ā ā ā ā ā ā ā ā U.S.: ā ā ā ā ā ā ā ā ā ā Federal ā $ 273.2 ā $ 351.1 ā $ (244.5) ā State ā 9.0 ā 1.9 ā 6.0 ā Foreign ā 27.5 ā 29.0 ā 17.6 ā Total current ā 309.7 ā 382.0 ā (220.9) ā ā ā ā ā ā ā ā ā ā ā ā Deferred: ā ā ā ā ā ā ā ā ā ā U.S.: ā ā ā ā ā ā ā ā ā ā Federal ā (179.1) ā (279.9) ā (3.4) ā State ā (4.1) ā (.6) ā 4.2 ā Foreign ā 7.6 ā (6.0) ā 2.9 ā Total deferred ā (175.6) ā (286.5) ā 3.7 ā Provision (credit) for income taxes ā $ 134.1 ā $ 95.5 ā $ (217.2) ā |
Tax Reform Measurement Period Adjustments and Effects on Results | In 2019 and 2018, the Company recorded discrete tax adjustments related to the remeasurement of the Companyās net deferred tax liabilities to the new corporate income tax rate and for the repatriation tax. The income tax expense (benefit) for the net deferred tax liability remeasurement and the repatriation tax adjustments were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2019 ā 2018 ā Net deferred tax liability remeasurement ā $ 4.8 ā $ (362.9) ā Deemed earnings repatriation tax ā (13.9) ā 20.6 ā Total discrete tax expense (benefit) ā $ (9.1) ā $ (342.3) ā |
Pro forma Provision (Credit) for Income Taxes and Net Income | The pro forma provision (credit) for income taxes and net income on this basis would have been as follows (in millions of dollars): ā ā ā ā ā ā ā 2018 Provision (credit) for income taxes assuming computation on an unmodified, separate return basis ā $ (198.2) Pro forma net income attributable to the Company ā 780.2 |
Comparison of Statutory and Effective Income Tax Provision | A comparison of the statutory and effective income tax provision and reasons for related differences follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 U.S. federal income tax provision at a statutory rate (2020 - 21 percent, 2019 - 21 percent, 2018 - 23.3 percent) ā $ 116.9 ā $ 107.7 ā $ 135.3 ā Increase (decrease) resulting from: ā ā ā ā ā ā ā ā ā ā Net deferred tax liability remeasurement ā ā ā ā ā 4.8 ā ā (362.9) ā Deemed earnings repatriation tax ā ā ā ā ā (13.9) ā ā 20.6 ā Other effects of tax reform ā ā ā ā ā ā ā ā (8.5) ā Tax rates on foreign earnings ā 5.8 ā 4.4 ā 2.1 ā Municipal lease income not taxable ā (.9) ā (.8) ā (.8) ā State and local income taxes, net of federal income tax benefit ā 3.8 ā 1.0 ā 7.8 ā Other ā net ā 8.5 ā (7.7) ā (10.8) ā Provision (credit) for income taxes ā $ 134.1 ā $ 95.5 ā $ (217.2) ā |
Analysis of Deferred Income Tax Assets and Liabilities | Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. An analysis of deferred income tax assets and liabilities at November 1, 2020 and November 3, 2019 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā Deferred Deferred Deferred Deferred ā ā Tax ā Tax ā Tax ā Tax ā ā Assets ā Liabilities ā Assets ā Liabilities Lease transactions ā ā ā ā $ 404.6 ā ā ā ā $ 571.5 ā Tax over book depreciation ā ā ā ā 3.8 ā ā ā ā 4.7 ā Deferred retail note finance income ā ā ā ā .8 ā ā ā ā 3.2 ā Accrual for retirement and other benefits ā $ 6.2 ā ā ā ā $ 4.9 ā ā ā ā Accrual for other employee benefits ā ā 12.1 ā ā ā ā ā 11.6 ā ā ā ā Allowance for credit losses ā ā 37.1 ā ā ā ā ā 29.1 ā ā ā ā Tax loss and tax credit carryforwards ā 25.3 ā ā ā ā 24.6 ā ā ā ā Federal taxes on deferred state tax deductions ā 10.7 ā ā ā ā 10.8 ā ā ā ā Miscellaneous accruals and other ā 13.5 ā ā 4.5 ā 9.1 ā ā 2.5 ā Less valuation allowances ā (10.0) ā ā ā ā (2.7) ā ā ā ā Deferred income tax assets and liabilities ā $ 94.9 ā $ 413.7 ā $ 87.4 ā $ 581.9 ā ā |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits at November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Beginning of year balance ā $ 32.5 ā $ 36.3 ā $ 35.5 ā Increases to tax positions taken during the current year ā 7.4 ā 6.9 ā 9.1 ā Increases to tax positions taken during prior years ā 3.1 ā .8 ā .9 ā Decreases to tax positions taken during prior years ā (4.9) ā (7.1) ā (4.6) ā Decreases due to lapse of statute of limitations ā (4.8) ā (4.4) ā (4.6) ā End of year balance ā $ 33.3 ā $ 32.5 ā $ 36.3 ā ā |
Other Income and Administrati_2
Other Income and Administrative and Operating Expenses (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Other Income and Administrative and Operating Expenses | |
Schedule of major components of other income and administrative and operating expenses | The major components of other income and administrative and operating expenses were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 Other income ā ā ā ā ā ā ā ā ā ā Fees from customers * ā ā ā ā ā ā ā $ 22.4 ā Fees from John Deere ā $ 25.5 ā $ 30.7 ā ā 20.1 ā Interest income ā ā 13.8 ā ā 33.1 ā ā 23.3 ā Other ā 19.2 ā 15.8 ā 13.0 ā Total ā $ 58.5 ā $ 79.6 ā $ 78.8 ā ā ā ā ā ā ā ā ā ā ā ā Administrative and operating expenses ā ā ā ā ā ā ā ā ā ā Compensation and benefits ā $ 251.0 ā $ 260.5 ā $ 255.4 ā Operating lease residual losses and impairments ā ā 53.6 ā ā 159.5 ā ā 25.0 ā Other ā 166.0 ā 113.0 ā 121.7 ā Total ā $ 470.6 ā $ 533.0 ā $ 402.1 ā *āā During 2020 and 2019, late fees of $23.2 million and $24.5 million, respectively, from customer retail notes were classified as finance income on the statement of consolidated income. Customer late fees of $22.2 million were included in other income in 2018. |
Other Comprehensive Income It_2
Other Comprehensive Income Items (Tables) | 12 Months Ended |
Nov. 01, 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): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Cumulative translation adjustment: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (88.4) ā $ (80.7) ā $ (60.0) ā Current period activity ā 18.9 ā (7.7) ā (20.7) ā End of year balance ā $ (69.5) ā $ (88.4) ā $ (80.7) ā ā ā ā ā ā ā ā ā ā ā ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (7.0) ā $ 14.8 ā $ 4.2 ā Current period activity ā .3 ā (21.8) ā 9.1 ā ASU No. 2018-02 adoption ā ā ā ā ā ā ā ā 1.5 ā End of year balance ā $ (6.7) ā $ (7.0) ā $ 14.8 ā ā ā ā ā ā ā ā ā ā ā ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Beginning of year balance ā $ (2.0) ā ā ā ā ā ā ā Current period activity ā ā .4 ā $ (2.0) ā ā ā End of year balance ā $ (1.6) ā $ (2.0) ā ā ā ā ā |
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): ā ā ā ā ā ā ā ā ā ā ā ā Before Tax After ā ā Tax ā (Expense) ā Tax ā ā Amount ā Credit ā Amount 2020 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ 18.9 ā ā ā ā $ 18.9 ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā (17.4) ā $ 3.6 ā (13.8) ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā 17.9 ā (3.8) ā 14.1 ā Net unrealized gain (loss) on derivatives ā .5 ā (.2) ā .3 ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Unrealized holding gain (loss) ā ā (.9) ā ā .4 ā ā (.5) ā Reclassification of realized (gain) loss ā Administrative and operating expenses ā ā 1.3 ā ā (.4) ā ā .9 ā Net unrealized gain (loss) on debt securities ā ā .4 ā ā ā ā ā .4 ā Total other comprehensive income (loss) ā $ 19.8 ā $ (.2) ā $ 19.6 ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ (7.7) ā ā ā ā $ (7.7) ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā (22.2) ā $ 4.7 ā (17.5) ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā (5.5) ā 1.2 ā (4.3) ā Net unrealized gain (loss) on derivatives ā (27.7) ā 5.9 ā (21.8) ā Unrealized gain (loss) on debt securities: ā ā ā ā ā ā ā ā ā ā Unrealized holding gain (loss) ā ā (2.7) ā ā .7 ā ā (2.0) ā Total other comprehensive income (loss) ā $ (38.1) ā $ 6.6 ā $ (31.5) ā ā ā ā ā ā ā ā ā ā ā ā 2018 ā ā ā ā ā ā ā ā ā ā Cumulative translation adjustment ā $ (20.7) ā ā ā ā $ (20.7) ā Unrealized gain (loss) on derivatives: ā ā ā ā ā ā ā ā ā ā Unrealized hedging gain (loss) ā 17.8 ā $ (4.5) ā 13.3 ā Reclassification of realized (gain) loss to: ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā Interest expense ā (5.5) ā 1.3 ā (4.2) ā Net unrealized gain (loss) on derivatives ā 12.3 ā (3.2) ā 9.1 ā Total other comprehensive income (loss) ā $ (8.4) ā $ (3.2) ā $ (11.6) ā |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Fair Value Measurements | |
Fair Value of Financial Instruments | The fair values of financial instruments that do not approximate the carrying values at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā ā Carrying Fair Carrying Fair ā ā Value ā Value * ā Value ā Value * Receivables financed ā net ā $ 28,751.6 ā $ 28,931.7 ā $ 28,382.5 ā $ 28,396.6 ā Retail notes securitized ā net ā 4,676.6 ā 4,772.9 ā 4,338.4 ā 4,361.9 ā Securitization borrowings ā 4,656.2 ā 4,697.6 ā 4,277.0 ā 4,301.7 ā Current maturities of long-term borrowings ā 5,741.6 ā 5,801.1 ā 5,716.6 ā 5,727.9 ā Long-term borrowings ā 19,311.1 ā 19,784.4 ā 21,052.4 ā 21,369.9 ā ā *āā 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 November 1, 2020 and November 3, 2019 at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā 2020 2019 ā ā ā ā ā ā ā ā ā Marketable securities ā ā ā ā ā ā ā International debt securities ā $ 2.2 ā $ 3.2 ā Receivables from John Deere ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Interest rate contracts ā ā 575.5 ā ā 331.4 ā Cross-currency interest rate contracts ā 7.7 ā .5 ā Other assets ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Foreign exchange contracts ā 3.8 ā 1.9 ā Total assets * ā $ 589.2 ā $ 337.0 ā ā ā ā ā ā ā ā ā Other payables to John Deere ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Interest rate contracts ā $ 29.4 ā $ 44.4 ā Cross-currency interest rate contracts ā ā .7 ā 3.0 ā Accounts payable and accrued expenses ā ā ā ā ā ā ā Derivatives: ā ā ā ā ā ā ā Foreign exchange contracts ā .9 ā 9.9 ā Total liabilities ā $ 31.0 ā $ 57.3 ā ā *āā Excluded from this table are the Companyās 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 at November 1, 2020, November 3, 2019, and October 28, 2018 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value ā Losses ** ā 2020 * 2019 2020 2019 2018 Equipment on operating leases - net ā $ 340.3 ā $ 855.4 ā $ 21.0 ā $ 59.4 ā ā ā ā Other assets ā ā 56.5 ā ā 141.9 ā ā 9.8 ā ā 18.0 ā ā ā ā Total ā $ 396.8 ā $ 997.3 ā $ 30.8 ā $ 77.4 ā ā ā ā *āāāFair value as of May 3, 2020. ** See Receivables with specific allowances in Note 5 that were not significant. See Note 7 for impairments on lease residual values. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Derivative Instruments | |
Amounts Recorded in the Consolidated Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships | The amounts recorded, at November 1, 2020 and November 3, 2019, in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cumulative Increase (Decrease) of Fair Value ā ā ā ā ā ā Hedging Adjustments Included in the ā ā ā ā ā ā Carrying Amount ā ā ā Carrying ā Active ā ā ā ā ā ā ā ā ā Amount of ā Hedging ā Discontinued ā ā ā 2020 ā Hedged Item ā Relationships ā Relationships ā Total ā Current maturities of long-term borrowings ā $ 2.5 ā ā ā ā $ 2.5 ā $ 2.5 ā Long-term borrowings ā ā 7,149.8 ā $ 530.0 ā ā 121.6 ā ā 651.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā Current maturities of long-term borrowings ā $ 185.4 ā $ .3 ā $ (4.4) ā $ (4.1) ā Long-term borrowings ā ā 8,378.1 ā ā 292.8 ā ā (31.6) ā ā 261.2 ā |
Fair Value of Derivative Instruments in Consolidated Balance Sheet | Fair values of derivative instruments in the consolidated balance sheet at November 1, 2020 and November 3, 2019 were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā 2020 2019 Receivables from John Deere ā ā ā ā ā ā ā Designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā $ 565.2 ā $ 328.8 ā ā ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā 10.3 ā 2.6 ā Cross-currency interest rate contracts ā 7.7 ā .5 ā Total not designated ā 18.0 ā 3.1 ā ā ā ā ā ā ā ā ā Other Assets ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Foreign exchange contracts ā 3.8 ā 1.9 ā Total not designated ā 3.8 ā 1.9 ā ā ā ā ā ā ā ā ā Total derivative assets ā $ 587.0 ā $ 333.8 ā ā ā ā ā ā ā ā ā Other Payables to John Deere ā ā ā ā ā ā ā Designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā $ 12.7 ā $ 26.5 ā ā ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Interest rate contracts ā 16.7 ā 17.9 ā Cross-currency interest rate contracts ā ā .7 ā 3.0 ā Total not designated ā 17.4 ā 20.9 ā ā ā ā ā ā ā ā ā Accounts Payable and Accrued Expenses ā ā ā ā ā ā ā Not designated as hedging instruments: ā ā ā ā ā ā ā Foreign exchange contracts ā .9 ā 9.9 ā ā ā ā ā ā ā ā ā Total derivative liabilities ā $ 31.0 ā $ 57.3 ā ā |
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): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 Fair Value Hedges ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense $ 477.3 ā $ 583.2 ā $ (281.4) ā ā ā ā ā ā ā ā ā ā ā ā Cash Flow Hedges ā ā ā ā ā ā ā ā ā ā Recognized in OCI ā ā ā ā ā ā ā ā ā ā Interest rate contracts - OCI (pretax) (17.4) ā (22.2) ā 17.8 ā ā ā ā ā ā ā ā ā ā ā ā Reclassified from OCI ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense (17.9) ā 5.5 ā 5.5 ā ā ā ā ā ā ā ā ā ā ā ā Not Designated as Hedges ā ā ā ā ā ā ā ā ā ā Interest rate contracts - Interest expense * $ (5.4) ā $ (25.8) ā $ (6.6) ā Foreign exchange contracts - Administrative and operating expenses * 57.0 ā 45.1 ā 96.7 ā Total not designated ā $ 51.6 ā $ 19.3 ā $ 90.1 ā ā * āā ā ā ā 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 collateral were as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā ā ā ā ā ā ā ā ā ā Derivatives: ā Gross Amounts Recognized ā Netting Arrangements ā Cash Collateral Received/Paid ā Net Assets ā ā ā ā ā ā ā ā ā ā ā ā ā External ā $ 3.8 ā $ (.7) ā ā ā $ 3.1 ā John Deere ā 583.2 ā (23.5) ā ā ā ā 559.7 ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā External ā .9 ā (.7) ā ā ā ā .2 ā John Deere ā 30.1 ā (23.5) ā ā ā ā 6.6 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā Derivatives: ā Gross Amounts Recognized ā Netting Arrangements ā Cash Collateral Received/Paid ā Net Assets ā ā ā ā ā ā ā ā ā ā ā ā ā External ā $ 1.9 ā $ (.2) ā ā ā $ 1.7 ā John Deere ā 331.9 ā (42.6) ā ā ā ā 289.3 ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā External ā 9.9 ā (.2) ā ā ā ā 9.7 ā John Deere ā 47.4 ā (42.6) ā ā ā ā 4.8 ā |
Geographic Area Information (Ta
Geographic Area Information (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Geographic Area Information | |
Schedule of Geographic Area Information | Geographic area information as of and for the years ended November 1, 2020, November 3, 2019, and October 28, 2018 is presented below (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Revenues: ā ā ā ā ā ā ā ā ā ā U.S. ā $ 2,517.6 ā $ 2,588.1 ā $ 2,266.8 ā Outside the U.S. ā 290.0 ā 302.2 ā 265.4 ā Total ā $ 2,807.6 ā $ 2,890.3 ā $ 2,532.2 ā ā ā ā ā ā ā ā ā ā ā ā Receivables: ā ā ā ā ā ā ā ā ā ā U.S. ā $ 28,196.8 ā $ 27,854.5 ā $ 26,039.6 ā Outside the U.S. ā 5,360.5 ā 4,967.0 ā 4,607.1 ā Total ā $ 33,557.3 ā $ 32,821.5 ā $ 30,646.7 ā |
Unconsolidated Affiliated Com_2
Unconsolidated Affiliated Company (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Unconsolidated Affiliated Company | |
Unconsolidated Affiliated Company | Summarized financial information of the unconsolidated affiliated company for the years ended November 1, 2020, November 3, 2019, and October 28, 2018 was as follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā 2020 2019 2018 Operations: ā ā ā ā ā ā ā ā ā ā Total revenue ā $ 13.4 ā $ 12.4 ā $ 11.7 ā Net income ā 4.4 ā 3.6 ā 3.9 ā The Companyās equity in net income ā 2.2 ā 1.8 ā 1.9 ā ā ā ā ā ā ā ā ā ā ā 2020 2019 Financial Position: ā ā ā ā ā ā ā Total assets ā $ 327.1 ā $ 258.1 ā Total external borrowings ā 285.2 ā 221.0 ā Total net assets ā 38.5 ā 32.9 ā The Companyās share of net assets ā 19.3 ā 16.4 ā |
Supplemental Information (Una_2
Supplemental Information (Unaudited) (Tables) | 12 Months Ended |
Nov. 01, 2020 | |
Supplemental Information (Unaudited) | |
Quarterly Financial Information | Supplemental quarterly information for the Company follows (in millions of dollars): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth Fiscal ā ā Quarter ā Quarter ā Quarter ā Quarter ā Year 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenues ā $ 718.6 ā $ 700.1 ā $ 696.0 ā $ 692.9 ā $ 2,807.6 ā Interest expense ā 219.8 ā 216.6 ā 161.3 ā 146.2 ā 743.9 ā Operating expenses ā 374.0 ā 452.7 ā 344.6 ā 335.4 ā 1,506.7 ā Provision for income taxes ā 26.1 ā 5.4 ā 44.4 ā 58.2 ā 134.1 ā Equity in income of unconsolidated affiliate ā .7 ā .4 ā .5 ā .6 ā 2.2 ā Net income (loss) attributable to noncontrolling interests ā ā .2 ā ā (.1) ā ā ā ā ā ā ā ā .1 ā Net income attributable to the Company ā $ 99.2 ā $ 25.9 ā $ 146.2 ā $ 153.7 ā $ 425.0 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenues ā $ 660.8 ā $ 703.0 ā $ 741.8 ā $ 784.7 ā $ 2,890.3 ā Interest expense ā 226.5 ā 252.0 ā 256.2 ā 253.1 ā 987.8 ā Operating expenses ā 289.2 ā 331.5 ā 329.2 ā 439.6 ā 1,389.5 ā Provision for income taxes ā 23.9 ā 35.7 ā 11.8 ā 24.1 ā 95.5 ā Equity in income of unconsolidated affiliate ā .6 ā .4 ā .4 ā .4 ā 1.8 ā Net income (loss) attributable to noncontrolling interests ā ā .1 ā ā (.1) ā ā .2 ā ā (.1) ā ā .1 ā Net income attributable to the Company ā $ 121.7 ā $ 84.3 ā $ 144.8 ā $ 68.4 ā $ 419.2 ā |
Organization and Consolidation
Organization and Consolidation (Details) | 3 Months Ended | 12 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Organization and Consolidation | |||||
Fiscal year duration | 91 days | 98 days | 364 days | 371 days | 364 days |
Maximum portion of receivables guaranteed by related parties | |||||
Maximum portion of receivables guaranteed by related parties (as a percent) | 5.00% | ||||
Maximum portion of receivables serviced by related parties | |||||
Maximum portion of receivables serviced by related parties (as a percent) | 5.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Summary of Significant Accounting Policies | |||
Pretax net gain (loss) for foreign exchange | $ (18.8) | $ 3.9 | $ (11.4) |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
New accounting standards | ||
Retained earnings | $ 2,891.6 | $ 2,741.6 |
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] | us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember | |
Lease, Practical Expedients, Package [true false] | true | |
Lease, Practical Expedient, Use of Hindsight [true false] | false | |
ASU 2016-02 | Cumulative Effect from Adoption | ||
New accounting standards | ||
Operating Lease, Right-of-Use Asset | 5.1 | |
Operating 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 2016-13 | Cumulative Effect from Adoption | Pro Forma | ||
New accounting standards | ||
Retained earnings | $ (25) | |
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 | |
ASU 2020-08 | ||
New accounting standards | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | false |
Receivables - Retail Notes (Det
Receivables - Retail Notes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Receivables, by Product Category | |||
Total receivables | $ 33,557.3 | $ 32,821.5 | $ 30,646.7 |
Retail notes | |||
Receivables, by Product Category | |||
Total receivables | $ 21,847.2 | $ 19,500.1 | $ 18,110.9 |
Average original term of receivables | 57 months | 56 months | 56 months |
Average actual life of receivables | 38 months | 40 months | 41 months |
Retail notes | Agriculture and turf | |||
Receivables, by Product Category | |||
Total receivables | $ 18,031 | $ 16,185.9 | |
Retail notes | Construction and forestry | |||
Receivables, by Product Category | |||
Total receivables | 3,816.2 | 3,314.2 | |
Retail notes | Unrestricted | |||
Receivables, by Product Category | |||
Receivables, Gross | 17,800.9 | 15,767.9 | |
Unearned finance income | (642.9) | (617.4) | |
Total receivables | 17,158 | 15,150.5 | |
Retail notes | Unrestricted | Agriculture and turf | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 10,154.9 | 8,959.8 | |
Retail notes | Unrestricted | Agriculture and turf | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 4,385.1 | 4,033.2 | |
Retail notes | Unrestricted | Construction and forestry | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 2,568.8 | 2,255.3 | |
Retail notes | Unrestricted | Construction and forestry | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 692.1 | 519.6 | |
Retail notes | Securitized | |||
Receivables, by Product Category | |||
Receivables, Gross | 4,786.7 | 4,450.4 | |
Unearned finance income | (97.5) | (100.8) | |
Total receivables | 4,689.2 | 4,349.6 | |
Retail notes | Securitized | Agriculture and turf | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 1,812.1 | 1,612.7 | |
Retail notes | Securitized | Agriculture and turf | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | 2,321.6 | 2,186 | |
Retail notes | Securitized | Construction and forestry | New | |||
Receivables, by Product Category | |||
Receivables, Gross | 535.7 | 561.9 | |
Retail notes | Securitized | Construction and forestry | Used | |||
Receivables, by Product Category | |||
Receivables, Gross | $ 117.3 | $ 89.8 |
Receivables - Retail Note Insta
Receivables - Retail Note Installments (Details) - Retail notes - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Unrestricted | ||
Receivable Installments, Due in Months: | ||
Receivables, due in 0 - 12 months | $ 5,466.8 | $ 5,346.7 |
Receivables, due in 13 - 24 months | 4,397.4 | 3,856.9 |
Receivables, due in 25 - 36 months | 3,501.9 | 3,031.4 |
Receivables, due in 37 - 48 months | 2,502.6 | 2,076.1 |
Receivables, due in 49 - 60 months | 1,462.1 | 1,150 |
Receivables, Over 60 months | 470.1 | 306.8 |
Receivables, Gross | 17,800.9 | 15,767.9 |
Securitized | ||
Receivable Installments, Due in Months: | ||
Receivables, due in 0 - 12 months | 1,950.2 | 2,041.4 |
Receivables, due in 13 - 24 months | 1,347.8 | 1,200.5 |
Receivables, due in 25 - 36 months | 888.3 | 770.7 |
Receivables, due in 37 - 48 months | 460 | 368.6 |
Receivables, due in 49 - 60 months | 129.2 | 66.9 |
Receivables, Over 60 months | 11.2 | 2.3 |
Receivables, Gross | $ 4,786.7 | $ 4,450.4 |
Receivables - Down Payment and
Receivables - Down Payment and Contract Terms (Details) - Retail notes | 12 Months Ended |
Nov. 01, 2020 | |
Agriculture and turf | Minimum | |
Receivables - Other Disclosures | |
Percentage of balances outstanding used to determine excess withholdings to be remitted to dealers | 0.50% |
Agriculture and turf | Maximum | |
Receivables - Other Disclosures | |
Percentage of balances outstanding used to determine excess withholdings to be remitted to dealers | 3.00% |
Agriculture | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Down Payment (as a percent) | 20.00% |
Monthly payments - Down Payment (as a percent) | 10.00% |
Agriculture | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Contract Terms | 3 years |
Monthly payments - Contract Terms | 36 months |
Agriculture | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Contract Terms | 7 years |
Monthly payments - Contract Terms | 84 months |
Turf | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Down Payment (as a percent) | 10.00% |
Monthly payments - Down Payment (as a percent) | 0.00% |
Turf | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Contract Terms | 3 years |
Monthly payments - Contract Terms | 36 months |
Turf | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Seasonal payments - Contract Terms | 7 years |
Monthly payments - Contract Terms | 84 months |
Construction and forestry | New | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Down Payment (as a percent) | 10.00% |
Construction and forestry | New | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 24 months |
Construction and forestry | New | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 60 months |
Construction and forestry | Used | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Down Payment (as a percent) | 15.00% |
Construction and forestry | Used | Minimum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 36 months |
Construction and forestry | Used | Maximum | |
Guidelines Relating to Down Payment Requirements and Contract Terms on Retail Notes | |
Contract Terms | 60 months |
Receivables - Other (Details)
Receivables - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Receivables - Other Disclosures | |||
Total receivables | $ 33,557.3 | $ 32,821.5 | $ 30,646.7 |
Retail notes | |||
Receivables - Other Disclosures | |||
Average effective yield on Retail Notes Receivable (as a percent) | 4.70% | 5.00% | 4.50% |
Total receivables | $ 21,847.2 | $ 19,500.1 | $ 18,110.9 |
Retail notes | John Deere | |||
Receivables - Other Disclosures | |||
Portion of finance income earned on retail notes receivable containing waiver of finance charges or reduced rates (as a percent) | 36.00% | 36.00% | 37.00% |
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 339.5 | $ 334.8 | $ 282.5 |
Revolving charge accounts | |||
Receivables - Other Disclosures | |||
Total receivables | 3,827.4 | 3,863 | 3,797.6 |
Unearned interest income | 58.9 | 59.8 | |
Revolving charge accounts | John Deere | |||
Receivables - Other Disclosures | |||
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 15.2 | 14.1 | 12.7 |
Wholesale receivables | |||
Receivables - Other Disclosures | |||
Term that the average term for wholesale notes is less than | 12 months | ||
Total receivables | $ 7,093.3 | 8,706.8 | 7,967.6 |
Wholesale receivables | John Deere | |||
Receivables - Other Disclosures | |||
Finance income earned on Receivables and Leases containing waiver of finance charges or reduced rates | $ 228.8 | $ 320 | $ 285 |
Wholesale receivables | Minimum | |||
Receivables - Other Disclosures | |||
Interest-free periods granted at the time of sale to dealer | 1 month | ||
Wholesale receivables | Maximum | |||
Receivables - Other Disclosures | |||
Interest-free periods granted at the time of sale to dealer | 12 months |
Allowance for Credit Losses a_3
Allowance for Credit Losses and Credit Quality of Receivables - Past Due Age Analysis (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Receivable, Past Due | |||
Minimum number of days for a receivable to be considered past due | 30 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 311.9 | $ 352.8 | |
Total Non-Performing | 262.5 | 311.9 | |
Current | 32,982.9 | 32,156.8 | |
Total Receivables | 33,557.3 | 32,821.5 | $ 30,646.7 |
30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 211.5 | 237.8 | |
60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 95.4 | 111.9 | |
90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 5 | 3.1 | |
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 | $ 21,847.2 | 19,500.1 | 18,110.9 |
Retail notes | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 145.3 | 185.7 | |
Total Non-Performing | 158.3 | 168.7 | |
Current | 17,727.4 | 15,831.5 | |
Total Receivables | 18,031 | 16,185.9 | |
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 | 101.2 | 120 | |
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 | 43.6 | 64.2 | |
Retail notes | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.5 | 1.5 | |
Retail notes | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 120 | 100.5 | |
Total Non-Performing | 73.5 | 112.9 | |
Current | 3,622.7 | 3,100.8 | |
Total Receivables | 3,816.2 | 3,314.2 | |
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 | 80 | 73.9 | |
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 | 38.1 | 26.6 | |
Retail notes | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 1.9 | ||
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 | $ 3,827.4 | 3,863 | 3,797.6 |
Revolving charge accounts | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 15 | 28.3 | |
Total Non-Performing | 5.4 | 6.1 | |
Current | 3,710.3 | 3,727.9 | |
Total Receivables | 3,730.7 | 3,762.3 | |
Revolving charge accounts | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 11.5 | 19.1 | |
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 | 3.5 | 9.2 | |
Revolving charge accounts | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.5 | 4.4 | |
Total Non-Performing | 0.9 | 0.9 | |
Current | 92.3 | 95.4 | |
Total Receivables | 96.7 | 100.7 | |
Revolving charge accounts | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.4 | 3.2 | |
Revolving charge accounts | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 1.1 | 1.2 | |
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 | $ 7,093.3 | 8,706.8 | 7,967.6 |
Wholesale receivables | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 9.4 | 6.8 | |
Total Non-Performing | 4 | 6.3 | |
Current | 5,693.7 | 6,544.6 | |
Total Receivables | 5,707.1 | 6,557.7 | |
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 | 3.9 | 4.1 | |
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 | 4.4 | 1.9 | |
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 | 1.1 | 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 | 0.3 | 0.7 | |
Total Non-Performing | 2.9 | ||
Current | 1,385.9 | 2,145.5 | |
Total Receivables | 1,386.2 | 2,149.1 | |
Wholesale receivables | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.3 | 0.1 | |
Wholesale receivables | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.3 | ||
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 | 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 | $ 789.4 | 751.6 | $ 770.6 |
Financing Leases | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 15.7 | 22.9 | |
Total Non-Performing | 14.4 | 11.6 | |
Current | 613.8 | 569.8 | |
Total Receivables | 643.9 | 604.3 | |
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 | 10.2 | 14.6 | |
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 | 4 | 7.8 | |
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 | 1.5 | 0.5 | |
Financing Leases | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.7 | 3.5 | |
Total Non-Performing | 6 | 2.5 | |
Current | 136.8 | 141.3 | |
Total Receivables | 145.5 | 147.3 | |
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 | 2.8 | |
Financing Leases | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.7 | $ 0.7 |
Allowance for Credit Losses a_4
Allowance for Credit Losses and Credit Quality of Receivables - COVID Loan Modifications (Details) - COVID-19 | 9 Months Ended |
Nov. 01, 2020 | |
COVID Loan Modifications | |
Percentage of retail receivables granted relief | 4.00% |
Retail notes | Maximum | |
COVID Loan Modifications | |
Retail customer payment deferral period | 3 months |
Financing Leases | Maximum | |
COVID Loan Modifications | |
Retail customer payment deferral period | 3 months |
Revolving charge accounts | Maximum | |
COVID Loan Modifications | |
Retail customer payment deferral period | 3 months |
Wholesale receivables | |
COVID Loan Modifications | |
Percentage of wholesale notes granted relief | 1.00% |
Wholesale receivables | Maximum | |
COVID Loan Modifications | |
Wholesale notes payment deferral period | 3 months |
Allowance for Credit Losses a_5
Allowance for Credit Losses and Credit Quality of Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Allowance: | |||
Beginning of year balance | $ 100.6 | $ 106.7 | $ 113.8 |
Provision (credit) for credit losses | 89.4 | 45.4 | 47.2 |
Write-offs | (101.6) | (88.3) | (81.2) |
Recoveries | 37.2 | 37 | 27.4 |
Translation adjustments | (0.2) | (0.5) | |
Other changes | 3.5 | ||
End of year balance | 129.1 | 100.6 | 106.7 |
Balance individually evaluated | 5.8 | 4.8 | 2.9 |
Receivables: | |||
End of year balance | 33,557.3 | 32,821.5 | 30,646.7 |
Balance individually evaluated | 99.6 | 77.5 | 70.3 |
Retail notes | |||
Allowance: | |||
Beginning of year balance | 48.3 | 51.6 | 55.7 |
Provision (credit) for credit losses | 65.2 | 18.3 | 11.9 |
Write-offs | (46.9) | (28.7) | (22.1) |
Recoveries | 5.9 | 7.3 | 6.4 |
Translation adjustments | (0.2) | (0.3) | |
Other changes | (0.1) | ||
End of year balance | 72.4 | 48.3 | 51.6 |
Balance individually evaluated | 0.8 | 1.9 | 0.1 |
Receivables: | |||
End of year balance | 21,847.2 | 19,500.1 | 18,110.9 |
Balance individually evaluated | 83.8 | 65.9 | 59.2 |
Revolving charge accounts | |||
Allowance: | |||
Beginning of year balance | 39.3 | 42.3 | 39.7 |
Provision (credit) for credit losses | 25.1 | 28.6 | 36.7 |
Write-offs | (51.6) | (56.9) | (54.1) |
Recoveries | 29.5 | 25.3 | 20 |
End of year balance | 42.3 | 39.3 | 42.3 |
Receivables: | |||
End of year balance | 3,827.4 | 3,863 | 3,797.6 |
Balance individually evaluated | 0.9 | 0.1 | 2.3 |
Wholesale receivables | |||
Allowance: | |||
Beginning of year balance | 7.6 | 8 | 9.9 |
Provision (credit) for credit losses | (1.9) | (4.2) | (0.8) |
Write-offs | (0.9) | (0.3) | (1.1) |
Recoveries | 1.3 | 4.1 | 0.2 |
Translation adjustments | (0.2) | ||
Other changes | 3.8 | ||
End of year balance | 9.9 | 7.6 | 8 |
Balance individually evaluated | 5 | 2.9 | 2.8 |
Receivables: | |||
End of year balance | 7,093.3 | 8,706.8 | 7,967.6 |
Balance individually evaluated | 13 | 9.6 | 8.8 |
Financing Leases | |||
Allowance: | |||
Beginning of year balance | 5.4 | 4.8 | 8.5 |
Provision (credit) for credit losses | 1 | 2.7 | (0.6) |
Write-offs | (2.2) | (2.4) | (3.9) |
Recoveries | 0.5 | 0.3 | 0.8 |
Other changes | (0.2) | ||
End of year balance | 4.5 | 5.4 | 4.8 |
Receivables: | |||
End of year balance | 789.4 | 751.6 | $ 770.6 |
Balance individually evaluated | $ 1.9 | $ 1.9 |
Allowance for Credit Losses a_6
Allowance for Credit Losses and Credit Quality of Receivables - Other (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Additional Receivable Disclosures | ||
Investment in non-performing Receivables | $ 262.5 | $ 311.9 |
Total non-performing Receivables as a percentage of Receivables outstanding | 0.78% | 0.95% |
Minimum number of days for a receivable to be considered past due | 30 days | |
Total Receivables 30 days or more past due and still accruing finance income | $ 311.9 | $ 352.8 |
Total past due amounts as a percentage of total Receivables outstanding | 0.93% | 1.07% |
Allowance for credit losses as a percentage of total Receivables outstanding | 0.38% | 0.31% |
Deposits primarily withheld from John Deere dealers and merchants available for potential credit losses | $ 110.1 | $ 126 |
Allowance for Credit Losses a_7
Allowance for Credit Losses and Credit Quality of Receivables - Impaired Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Recorded Investment | ||
Receivables with specific allowance | $ 14.5 | $ 10.2 |
Receivables without specific allowance | 29.4 | 26.8 |
Total | 43.9 | 37 |
Unpaid Principal Balance | ||
Receivables with specific allowance | 14.4 | 9.9 |
Receivables without specific allowance | 28.5 | 26.3 |
Total | 42.9 | 36.2 |
Specific Allowance | 5.8 | 4.8 |
Average Recorded Investment | ||
Receivables with specific allowance | 17.7 | 10.7 |
Receivables without specific allowance | 31.7 | 29.1 |
Total | 49.4 | 39.8 |
Agriculture and turf | ||
Recorded Investment | ||
Total | 40.8 | 30.3 |
Unpaid Principal Balance | ||
Total | 39.9 | 29.7 |
Specific Allowance | 5.8 | 4.6 |
Average Recorded Investment | ||
Total | 46.1 | 32 |
Construction and forestry | ||
Recorded Investment | ||
Total | 3.1 | 6.7 |
Unpaid Principal Balance | ||
Total | 3 | 6.5 |
Specific Allowance | 0.2 | |
Average Recorded Investment | ||
Total | 3.3 | 7.8 |
Retail notes | ||
Recorded Investment | ||
Receivables with specific allowance | 1.4 | 4.9 |
Receivables without specific allowance | 29.4 | 22.9 |
Unpaid Principal Balance | ||
Receivables with specific allowance | 1.4 | 4.6 |
Receivables without specific allowance | 28.5 | 22.4 |
Specific Allowance | 0.8 | 1.9 |
Average Recorded Investment | ||
Receivables with specific allowance | 3 | 5 |
Receivables without specific allowance | 31.7 | 25 |
Wholesale receivables | ||
Recorded Investment | ||
Receivables with specific allowance | 13.1 | 5.3 |
Receivables without specific allowance | 3.9 | |
Unpaid Principal Balance | ||
Receivables with specific allowance | 13 | 5.3 |
Receivables without specific allowance | 3.9 | |
Specific Allowance | 5 | 2.9 |
Average Recorded Investment | ||
Receivables with specific allowance | $ 14.7 | 5.7 |
Receivables without specific allowance | $ 4.1 |
Allowance for Credit Losses a_8
Allowance for Credit Losses and Credit Quality of Receivables - Troubled Debt Restructurings (Details) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020USD ($)item | Nov. 03, 2019USD ($)item | Oct. 28, 2018USD ($)item | |
Receivables Related to Troubled Debt Restructurings | |||
Receivable contracts in troubled debt restructuring, number | item | 468 | 328 | 378 |
Receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 19 | $ 14.6 | $ 18 |
Receivables in troubled debt restructurings, aggregate balances, post-modification | 17.4 | 13.7 | 17.3 |
Receivable contracts in troubled debt restructuring, subsequently defaulted | 0 | $ 0 | $ 0 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
Allowance for Credit Losses a_9
Allowance for Credit Losses and Credit Quality of Receivables - Write-offs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Dollars | |||
Total write-offs | $ (101.6) | $ (88.3) | $ (81.2) |
Total recoveries | 37.2 | 37 | 27.4 |
Total net write-offs | $ (64.4) | $ (51.3) | $ (53.8) |
Percent | |||
Total write-offs (as a percent) | (0.31%) | (0.27%) | (0.27%) |
Total recoveries (as a percent) | 0.11% | 0.11% | 0.09% |
Total net write-offs (as a percent) | (0.20%) | (0.16%) | (0.18%) |
Retail notes | |||
Dollars | |||
Total write-offs | $ (46.9) | $ (28.7) | $ (22.1) |
Total recoveries | $ 5.9 | $ 7.3 | $ 6.4 |
Percent | |||
Total write-offs (as a percent) | (0.24%) | (0.15%) | (0.13%) |
Total recoveries (as a percent) | 0.03% | 0.04% | 0.04% |
Retail notes | Agriculture and turf | |||
Dollars | |||
Total write-offs | $ (13.7) | $ (8) | $ (6.4) |
Total recoveries | $ 4.2 | $ 6 | $ 4.7 |
Percent | |||
Total write-offs (as a percent) | (0.08%) | (0.05%) | (0.04%) |
Total recoveries (as a percent) | 0.03% | 0.04% | 0.03% |
Retail notes | Construction and forestry | |||
Dollars | |||
Total write-offs | $ (33.2) | $ (20.7) | $ (15.7) |
Total recoveries | $ 1.7 | $ 1.3 | $ 1.7 |
Percent | |||
Total write-offs (as a percent) | (0.96%) | (0.67%) | (0.57%) |
Total recoveries (as a percent) | 0.05% | 0.04% | 0.06% |
Revolving charge accounts | |||
Dollars | |||
Total write-offs | $ (51.6) | $ (56.9) | $ (54.1) |
Total recoveries | $ 29.5 | $ 25.3 | $ 20 |
Percent | |||
Total write-offs (as a percent) | (1.51%) | (1.65%) | (1.67%) |
Total recoveries (as a percent) | 0.86% | 0.73% | 0.62% |
Wholesale receivables | |||
Dollars | |||
Total write-offs | $ (0.9) | $ (0.3) | $ (1.1) |
Total recoveries | $ 1.3 | $ 4.1 | $ 0.2 |
Percent | |||
Total write-offs (as a percent) | (0.01%) | (0.01%) | |
Total recoveries (as a percent) | 0.02% | 0.04% | |
Financing Leases | |||
Dollars | |||
Total write-offs | $ (2.2) | $ (2.4) | $ (3.9) |
Total recoveries | $ 0.5 | $ 0.3 | $ 0.8 |
Percent | |||
Total write-offs (as a percent) | (0.31%) | (0.34%) | (0.55%) |
Total recoveries (as a percent) | 0.07% | 0.04% | 0.11% |
Securitization of Receivables_2
Securitization of Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Securitization of Receivables | ||
Unconsolidated conduits, carrying value of liabilities | $ 36,559 | $ 35,961.5 |
Retail notes securitized | 4,689.2 | 4,349.6 |
Allowance for credit losses - securitization transactions | (12.6) | (11.2) |
Other assets - securitization transactions | 97.9 | 82.2 |
Total restricted securitized assets - securitization transactions | 4,774.5 | 4,420.6 |
Securitization borrowings | 4,656.2 | 4,277 |
Accrued interest on borrowings - securitization transactions | 3.2 | 5.9 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,659.4 | 4,282.9 |
Maximum remaining term of all restricted receivables | 6 years | |
VIE-Primary Beneficiary | ||
Securitization of Receivables | ||
Total restricted securitized assets - securitization transactions | $ 2,897.5 | 2,894.4 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,856.2 | 2,847.2 |
Non-VIE Banking Operation | ||
Securitization of Receivables | ||
Total restricted securitized assets - securitization transactions | 549.7 | 447 |
Total liabilities related to restricted securitized assets - securitization transactions | 528.1 | 420.5 |
VIE-Not Primary Beneficiary | ||
Securitization of Receivables | ||
Unconsolidated conduits, carrying value of liabilities | 1,275.1 | |
Unconsolidated conduits, maximum exposure to loss | 1,327.3 | |
Total assets | 32,600 | |
Total restricted securitized assets - securitization transactions | 1,327.3 | 1,079.2 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,275.1 | $ 1,015.2 |
Leases - Lessor Lease Terms (De
Leases - Lessor Lease Terms (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
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 | $ 59.4 | $ 0 | |
COVID-19 | ||||
Lessor | ||||
Percentage of operating lease portfolio granted relief | 3.00% | 3.00% | ||
Minimum | ||||
Lessor | ||||
Lessor, term of contract | 1 year | |||
Maximum | ||||
Lessor | ||||
Lessor, term of contract | 7 years | |||
Maximum | COVID-19 | ||||
Lessor | ||||
Operating lease payment deferral period | 3 months |
Leases - Lease Revenues (Detail
Leases - Lease Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Lessor | |||
Sales-type and direct finance lease revenues | $ 46 | ||
Operating lease revenues | 1,022.5 | ||
Variable lease revenues | 20.4 | ||
Total lease revenues | 1,088.9 | $ 1,009.8 | $ 910.2 |
John Deere | Operating Leases | |||
Receivables - Other Disclosures | |||
Finance income and Operating lease revenue | 57.2 | 42.9 | 39.2 |
John Deere | Financing Leases | |||
Receivables - Other Disclosures | |||
Finance income and Operating lease revenue | $ 3.3 | $ 3.5 | $ 3.8 |
Leases - Sales-type and Direct
Leases - Sales-type and Direct Financing Lease Receivables (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Lessor | ||
Total sales-type and direct financing lease receivables | $ 600.2 | $ 575.9 |
Guaranteed residual values | 240.8 | 195.1 |
Unguaranteed residual values | 32.6 | 61.1 |
Unearned finance income | (84.2) | (80.5) |
Financing lease receivables | 789.4 | 751.6 |
Agriculture and turf equipment | ||
Lessor | ||
Total sales-type and direct financing lease receivables | 447.5 | 422.7 |
Construction and forestry | ||
Lessor | ||
Total sales-type and direct financing lease receivables | $ 152.7 | $ 153.2 |
Leases - Scheduled Payments on
Leases - Scheduled Payments on Sales-type and Direct Financings Leases Receivables, Current Year (Details) $ in Millions | Nov. 01, 2020USD ($) |
Payments on Sales-type and Direct Financing Leases Receivables | |
2021 | $ 415 |
2022 | 186.6 |
2023 | 122.7 |
2024 | 71.9 |
2025 | 34.6 |
Later years | 10.2 |
Total | $ 841 |
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 Lease Receivables 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 | Nov. 01, 2020 | Nov. 03, 2019 |
Cost of Equipment on Operating Leases | ||
Equipment on operating leases - gross | $ 6,805.7 | $ 6,888 |
Accumulated depreciation | (1,507.9) | (1,357.5) |
Equipment on operating leases - net | 5,297.8 | 5,530.5 |
Operating lease residual value | 3,826.3 | 3,876.5 |
Operating lease residual value guarantees | 141 | 65.7 |
Dealer deposits available for potential losses on residual values | 4.7 | 11.5 |
Agriculture and turf equipment | ||
Cost of Equipment on Operating Leases | ||
Equipment on operating leases - gross | 5,210.4 | 5,109.4 |
Construction and forestry | ||
Cost of Equipment on Operating Leases | ||
Equipment on operating leases - gross | $ 1,595.3 | $ 1,778.6 |
Leases - Lease payments for equ
Leases - Lease payments for equipment on operating leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Lease Payments for Equipment on Operating Leases | |||
2021 | $ 744.1 | ||
2022 | 472.4 | ||
2023 | 231 | ||
2024 | 97.7 | ||
2025 | 16.3 | ||
Later years | 2.3 | ||
Total | $ 1,563.8 | ||
Minimum payment default period | 30 days | ||
Past due balances of operating leases | $ 61.3 | $ 85.4 | |
Matured operating lease inventory | 64.5 | 160.8 | |
Impairment losses on matured operating lease inventory | $ 9.8 | 18 | $ 0 |
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 | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
John Deere | |||
Notes Receivable from John Deere | |||
Maximum remaining term for related party notes receivable | 7 years | ||
Interest earned | $ 16.6 | $ 17.4 | $ 11.1 |
Notes receivable from John Deere | 350 | 291.7 | |
Limited Liability Company John Deere Financial | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | 132.5 | 148.3 | |
Banco John Deere S.A. | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | $ 217.5 | $ 143.4 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Short-Term Borrowings | ||
Commercial paper and other notes payable | $ 187.5 | $ 1,460.9 |
Securitization borrowings | 4,656.2 | 4,277 |
John Deere | 5,249.5 | 1,855.3 |
Current maturities of long-term borrowings | 5,741.6 | 5,716.6 |
Total short-term borrowings | $ 15,834.8 | $ 13,309.8 |
Payment Schedule for Securitization Borrowings Based on Expected Liquidation of Retail Notes | ||
Weighted-average interest rate on total short-term borrowings, excluding current maturities of long-term borrowings (as a percent) | 1.20% | 2.20% |
Securitization borrowings | ||
Short-Term Borrowings | ||
Securitization borrowings | $ 4,656.2 | |
Payment Schedule for Securitization Borrowings Based on Expected Liquidation of Retail Notes | ||
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2021 | 2,346.1 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2022 | 1,360.9 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2023 | 681.1 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2024 | 217.3 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2025 | 50.2 | |
Payment schedule for securitization borrowings based on expected liquidation of the retail notes, 2026 | $ 5.7 |
Short-Term Borrowings - Other (
Short-Term Borrowings - Other (Details) $ in Millions | 12 Months Ended |
Nov. 01, 2020USD ($) | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 8,062.5 |
Lines of credit unused | $ 6,801.2 |
Consolidated ratio of earnings to fixed charges required by the credit agreements, minimum at the end of each fiscal quarter | 1.05 |
Ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder's equity excluding accumulated other comprehensive income (loss)) required by the credit agreements, maximum at the end of any fiscal quarter | 11 |
Deere & Company | |
Agreement with Deere & Company | |
Minimum ownership percentage by Deere & Company in Capital Corporation capital stock | 51.00% |
Minimum consolidated tangible net worth of Capital Corporation to be maintained by Deere & Company | $ 50 |
Minimum ratio of earnings to fixed charges of Capital Corporation to be maintained by Deere & Company | 1.05 |
364-Day Credit Facilities Expiring April, 2021 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 3,000 |
Line of Credit Facilities Expiring April, 2024 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | 2,500 |
Line of Credit Facilities Expiring April, 2025 | |
Line of Credit Facility | |
Lines of credit available from U.S. and foreign banks | $ 2,500 |
Long-Term Borrowings (Details)
Long-Term Borrowings (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Long-Term Borrowings | ||
Total senior debt | $ 19,358.8 | $ 21,107 |
Unamortized debt discount and debt issuance costs | (47.7) | (54.6) |
Total | 19,311.1 | 21,052.4 |
Principal Amounts of Long-Term Borrowings Maturing in Each of Next Five Years | ||
2021 | 5,741.3 | |
2022 | 5,797.4 | |
2023 | 4,581.5 | |
2024 | 2,453.2 | |
2025 | 1,775 | |
Medium-term notes due 2021-2030 | ||
Long-Term Borrowings | ||
Total senior debt | 19,320.6 | 21,055.9 |
Principal amount | $ 18,668.9 | $ 20,794.7 |
Average interest rates (as a percent) | 1.60% | 2.80% |
Other notes | ||
Long-Term Borrowings | ||
Total senior debt | $ 38.2 | $ 51.1 |
Capital Stock (Details)
Capital Stock (Details) - $ / shares | Nov. 01, 2020 | Nov. 03, 2019 |
Capital Stock | ||
Number of shares of preferred stock authorized, but not issued | 10,000 | 10,000 |
Par value of preferred stock (in dollars per share) | $ 1 | $ 1 |
Dividends (Details)
Dividends (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Dividends | |||
Cash dividends declared and paid to JDFS | $ 275 | $ 330 | $ 375 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits - Defined Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Pensions | |||
Defined Benefit Plan Disclosure | |||
Expenses related to defined benefit plans | $ 2.3 | $ 0.7 | $ 6.2 |
Health Care and Life Insurance | |||
Defined Benefit Plan Disclosure | |||
Expenses related to defined benefit plans | 12.3 | $ 4.3 | $ 2.5 |
Health Care and Life Insurance | 2020 Employee-Separation Programs | |||
Defined Benefit Plan Disclosure | |||
Curtailments | $ 5.5 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Pension and Other Postretirement Benefits | |||
Defined contribution plans employer contributions and costs (primarily in the U.S.) | $ 10.7 | $ 13.2 | $ 12.7 |
Stock Option and Restricted S_2
Stock Option and Restricted Stock Awards (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Stock Option and Restricted Stock Awards | |||
Total share-based compensation expense | $ 6.2 | $ 6.9 | $ 7.9 |
Income tax benefit recognized in net income | $ 1.4 | $ 1.7 | $ 1.9 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Current: | |||||||||||
U.S. - Federal | $ 273.2 | $ 351.1 | $ (244.5) | ||||||||
U.S. - State | 9 | 1.9 | 6 | ||||||||
Foreign | 27.5 | 29 | 17.6 | ||||||||
Total current | 309.7 | 382 | (220.9) | ||||||||
Deferred: | |||||||||||
U.S. - Federal | (179.1) | (279.9) | (3.4) | ||||||||
U.S. - State | (4.1) | (0.6) | 4.2 | ||||||||
Foreign | 7.6 | (6) | 2.9 | ||||||||
Total deferred | (175.6) | (286.5) | 3.7 | ||||||||
Provision (credit) for income taxes | $ 58.2 | $ 44.4 | $ 5.4 | $ 26.1 | $ 24.1 | $ 11.8 | $ 35.7 | $ 23.9 | $ 134.1 | $ 95.5 | $ (217.2) |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 |
U.S. Tax Reform | |||||
Federal corporate statutory tax rate (as a percent) | 21.00% | 35.00% | 21.00% | 21.00% | 23.30% |
Net deferred tax liability remeasurement | $ 4.8 | $ (362.9) | |||
Deemed earnings repatriation tax | (13.9) | 20.6 | |||
Total discrete tax (benefit) expense | $ (9.1) | $ (342.3) |
Income Taxes - Tax Sharing Agre
Income Taxes - Tax Sharing Agreement (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 |
Tax Sharing Agreement | |||||||||||||
Federal corporate statutory tax rate (as a percent) | 21.00% | 35.00% | 21.00% | 21.00% | 23.30% | ||||||||
Provision (credit) for income taxes assuming computation on an unmodified, separate return basis | $ 58.2 | $ 44.4 | $ 5.4 | $ 26.1 | $ 24.1 | $ 11.8 | $ 35.7 | $ 23.9 | $ 134.1 | $ 95.5 | $ (217.2) | ||
Pro forma net income attributable to the Company | 153.7 | $ 146.2 | $ 25.9 | $ 99.2 | 68.4 | $ 144.8 | $ 84.3 | $ 121.7 | 425 | 419.2 | 799.2 | ||
Pro Forma | |||||||||||||
Tax Sharing Agreement | |||||||||||||
Provision (credit) for income taxes assuming computation on an unmodified, separate return basis | (198.2) | ||||||||||||
Pro forma net income attributable to the Company | 780.2 | ||||||||||||
Tax Sharing Agreement | John Deere | |||||||||||||
Tax Sharing Agreement | |||||||||||||
Additional tax benefit under the tax sharing agreement | $ 19 | ||||||||||||
Federal corporate statutory tax rate (as a percent) | 23.30% | ||||||||||||
Amounts payable to Deere and Company under the tax sharing agreement | $ 42.9 | $ 2.5 | $ 42.9 | $ 2.5 |
Income Taxes - Statutory and Ef
Income Taxes - Statutory and Effective Income Tax Provision (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 |
Comparison of the Statutory and Effective Income Tax Provision | |||||||||||||
Federal corporate statutory tax rate (as a percent) | 21.00% | 35.00% | 21.00% | 21.00% | 23.30% | ||||||||
U.S. federal income tax provision at a statutory rate (2020 - 21 percent, 2019 - 21 percent, 2018 - 23.3 percent) | $ 116.9 | $ 107.7 | $ 135.3 | ||||||||||
Increase (Decrease) Resulting from: | |||||||||||||
Net deferred tax liability remeasurement | 4.8 | (362.9) | |||||||||||
Deemed earnings repatriation tax | (13.9) | 20.6 | |||||||||||
Other effects of tax reform | (8.5) | ||||||||||||
Tax rates on foreign earnings | 5.8 | 4.4 | 2.1 | ||||||||||
Municipal lease income not taxable | (0.9) | (0.8) | (0.8) | ||||||||||
State and local income taxes, net of federal income tax benefit | 3.8 | 1 | 7.8 | ||||||||||
Other - net | 8.5 | (7.7) | (10.8) | ||||||||||
Provision (credit) for income taxes | $ 58.2 | $ 44.4 | $ 5.4 | $ 26.1 | $ 24.1 | $ 11.8 | $ 35.7 | $ 23.9 | 134.1 | $ 95.5 | $ (217.2) | ||
Accumulated earnings of certain subsidiaries outside the U.S. for which no provision for U.S. income or foreign withholding taxes has been made | $ 51.6 | 51.6 | |||||||||||
Provision for foreign withholding taxes for earnings expected to remain indefinitely reinvested outside the U.S. | $ 0 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Deferred Tax Assets | ||
Accrual for retirement and other benefits | $ 6.2 | $ 4.9 |
Accrual for other employee benefits | 12.1 | 11.6 |
Allowance for credit losses | 37.1 | 29.1 |
Tax loss and tax credit carryforwards | 25.3 | 24.6 |
Federal taxes on deferred state tax deductions | 10.7 | 10.8 |
Miscellaneous accruals and other | 13.5 | 9.1 |
Less valuation allowances | (10) | (2.7) |
Deferred income tax assets | 94.9 | 87.4 |
Deferred Tax Liabilities | ||
Lease transactions | 404.6 | 571.5 |
Tax over book depreciation | 3.8 | 4.7 |
Deferred retail note finance income | 0.8 | 3.2 |
Miscellaneous accruals and other | 4.5 | 2.5 |
Deferred income tax liabilities | $ 413.7 | $ 581.9 |
Income Taxes - Additional Defer
Income Taxes - Additional Deferred Income Tax Information (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Additional Deferred Income Tax Information | ||
Tax loss and tax credit carryforwards | $ 25.3 | $ 24.6 |
Tax loss and tax credit carryforwards, expiring from 2021 through 2038 | 20 | |
Tax loss and tax credit carryforwards with an indefinite carryforward period | $ 5.3 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Reconciliation of the Total Amounts of Unrecognized Tax Benefits | |||
Beginning of year balance | $ 32.5 | $ 36.3 | $ 35.5 |
Increases to tax positions taken during the current year | 7.4 | 6.9 | 9.1 |
Increases to tax positions taken during prior years | 3.1 | 0.8 | 0.9 |
Decreases to tax positions taken during prior years | (4.9) | (7.1) | (4.6) |
Decreases due to lapse of statute of limitations | (4.8) | (4.4) | (4.6) |
End of year balance | 33.3 | 32.5 | 36.3 |
Unrecognized tax benefits affecting effective tax rate if recognized | 17.2 | 17.6 | |
Total amount of expense from interest and penalties | 0.5 | 0 | $ 1.8 |
Total amount of income from interest and penalties | 0.7 | 5.3 | |
Accrued interest and penalties on income tax | $ 14.6 | $ 14.1 |
Other Income and Administrati_3
Other Income and Administrative and Operating Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Other income - net | |||
Fees from customers | $ 22.4 | ||
Fees from John Deere | $ 25.5 | $ 30.7 | 20.1 |
Interest income | 13.8 | 33.1 | 23.3 |
Other | 19.2 | 15.8 | 13 |
Total | 58.5 | 79.6 | 78.8 |
Administrative and operating expenses | |||
Compensation and benefits | 251 | 260.5 | 255.4 |
Operating lease residual losses and impairments | 53.6 | 159.5 | 25 |
Other | 166 | 113 | 121.7 |
Total | 470.6 | 533 | 402.1 |
Customer late fees | $ 23.2 | $ 24.5 | $ 22.2 |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | Oct. 29, 2017 | |
Cash Flow Information | ||||
Restricted cash | $ 94.8 | $ 78.3 | $ 103.4 | $ 125.9 |
Cash payments for interest | 806 | 953.8 | 751.9 | |
Cash payments (receipts) for income taxes | $ 254 | $ (36.1) | $ 268.4 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | 12 Months Ended |
Nov. 01, 2020USD ($) | |
John Deere Financial Inc. | Guarantees of debt and derivatives | Medium-term notes | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 1,914 |
Weighted average interest rate (as a percent) | 2.40% |
Maximum remaining maturity | 7 years |
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 60.4 |
Notional amount | 3,141.9 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | |
Guarantee Obligations | |
Carrying value of assets or liabilities related to JDCFI | 0 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 1,088.3 |
Weighted average interest rate (as a percent) | 2.50% |
Maximum remaining maturity | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Commitments (Details) $ in Millions | Nov. 01, 2020USD ($) |
Limited Liability Company John Deere Financial | |
Commitments | |
Unused commitments | $ 173.3 |
John Deere dealers | |
Commitments | |
Unused commitments | 9,800 |
Customers | |
Commitments | |
Unused commitments | $ 27,900 |
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts | 95.00% |
Other Comprehensive Income It_3
Other Comprehensive Income Items - After-Tax Changes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | $ 4,127 | ||
Current period activity | 19.6 | $ (31.5) | $ (11.6) |
Balance | 4,296.6 | 4,127 | |
Cumulative Translation Adjustment | |||
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | (88.4) | (80.7) | (60) |
Current period activity | 18.9 | (7.7) | (20.7) |
Balance | (69.5) | (88.4) | (80.7) |
Unrealized Gain (Loss) on Derivatives | |||
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | (7) | 14.8 | 4.2 |
Current period activity | 0.3 | (21.8) | 9.1 |
ASU No. 2018-02 adoption | 1.5 | ||
Balance | (6.7) | (7) | $ 14.8 |
Unrealized Gain (Loss) on Debt Securities | |||
After-tax changes in accumulated other comprehensive income (loss) | |||
Balance | (2) | ||
Current period activity | 0.4 | (2) | |
Balance | $ (1.6) | $ (2) |
Other Comprehensive Income It_4
Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Other comprehensive income (loss), before tax | |||||||||||
Interest expense | $ (146.2) | $ (161.3) | $ (216.6) | $ (219.8) | $ (253.1) | $ (256.2) | $ (252) | $ (226.5) | $ (743.9) | $ (987.8) | $ (737.2) |
Administrative and operating expenses | (470.6) | (533) | (402.1) | ||||||||
Total other comprehensive income (loss), before tax | 19.8 | (38.1) | (8.4) | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Total other comprehensive income (loss), tax (expense) credit | (0.2) | 6.6 | (3.2) | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss), net of income taxes | 19.6 | (31.5) | (11.6) | ||||||||
Cumulative Translation Adjustment | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Total other comprehensive income (loss), before tax | 18.9 | (7.7) | (20.7) | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss), net of income taxes | 18.9 | (7.7) | (20.7) | ||||||||
Unrealized Gain (Loss) on Derivatives | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Other comprehensive income (loss) before reclassification, before tax | (17.4) | (22.2) | 17.8 | ||||||||
Total other comprehensive income (loss), before tax | 0.5 | (27.7) | 12.3 | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 3.6 | 4.7 | (4.5) | ||||||||
Total other comprehensive income (loss), tax (expense) credit | (0.2) | 5.9 | (3.2) | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss) before reclassification, after tax | (13.8) | (17.5) | 13.3 | ||||||||
Other comprehensive income (loss), net of income taxes | 0.3 | (21.8) | 9.1 | ||||||||
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 | 17.9 | (5.5) | (5.5) | ||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Reclassification of realized (gain) loss, tax expense (credit) | (3.8) | 1.2 | 1.3 | ||||||||
Other comprehensive income (loss), after tax | |||||||||||
Reclassification of realized (gain) loss, after tax | 14.1 | (4.3) | $ (4.2) | ||||||||
Unrealized Gain (Loss) on Debt Securities | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Other comprehensive income (loss) before reclassification, before tax | (0.9) | (2.7) | |||||||||
Total other comprehensive income (loss), before tax | 0.4 | ||||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Other comprehensive income (loss) before reclassification, tax (expense) credit | 0.4 | 0.7 | |||||||||
Other comprehensive income (loss), after tax | |||||||||||
Other comprehensive income (loss) before reclassification, after tax | (0.5) | (2) | |||||||||
Other comprehensive income (loss), net of income taxes | 0.4 | $ (2) | |||||||||
Unrealized Gain (Loss) on Debt Securities | Reclassifications of gains (losses) out of accumulated other comprehensive income | |||||||||||
Other comprehensive income (loss), before tax | |||||||||||
Administrative and operating expenses | 1.3 | ||||||||||
Other comprehensive income (loss), tax (expense) credit | |||||||||||
Reclassification of realized (gain) loss, tax expense (credit) | (0.4) | ||||||||||
Other comprehensive income (loss), after tax | |||||||||||
Reclassification of realized (gain) loss, after tax | $ 0.9 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Fair Values of Financial Instruments | ||
Securitization borrowings | $ 4,656.2 | $ 4,277 |
Current maturities of long-term borrowings | 5,741.6 | 5,716.6 |
Long-term borrowings | 19,311.1 | 21,052.4 |
Level 3 | ||
Fair Values of Financial Instruments | ||
Receivables financed - net | 28,931.7 | 28,396.6 |
Retail notes securitized - net | 4,772.9 | 4,361.9 |
Level 2 | ||
Fair Values of Financial Instruments | ||
Securitization borrowings | 4,697.6 | 4,301.7 |
Current maturities of long-term borrowings | 5,801.1 | 5,727.9 |
Long-term borrowings | 19,784.4 | 21,369.9 |
Carrying Value | ||
Fair Values of Financial Instruments | ||
Receivables financed - net | 28,751.6 | 28,382.5 |
Retail notes securitized - net | 4,676.6 | 4,338.4 |
Securitization borrowings | 4,656.2 | 4,277 |
Current maturities of long-term borrowings | 5,741.6 | 5,716.6 |
Long-term borrowings | $ 19,311.1 | $ 21,052.4 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Marketable securities | $ 2.2 | $ 3.2 |
Derivative assets | 587 | 333.8 |
Derivative liabilities | 31 | 57.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Total assets | 589.2 | 337 |
Total liabilities | 31 | 57.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Receivables from John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative assets | 575.5 | 331.4 |
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 | 29.4 | 44.4 |
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 | 3.8 | 1.9 |
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 | 0.9 | 9.9 |
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 | 7.7 | 0.5 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-currency interest rate contracts | Other payables to John Deere | ||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | ||
Derivative liabilities | 0.7 | 3 |
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 | $ 2.2 | $ 3.2 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Debt Securities (Details) $ in Millions | Nov. 01, 2020USD ($) |
Contractual Maturities of Debt Securities, Amortized Cost | |
Amortized cost basis | $ 4.6 |
Contractual Maturities of Debt Securities, Fair Value | |
Fair value | $ 2.2 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring, Level 3 Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | May 03, 2020 | |
Fair Value, Nonrecurring Level 3 Measurements from Impairments | ||||
Equipment on operating leases - net | $ 5,297.8 | $ 5,530.5 | ||
Losses, Equipment on operating leases - net | 21 | 59.4 | $ 0 | |
Losses, Other assets | 9.8 | 18 | $ 0 | |
Fair Value, Nonrecurring Measurements | Level 3 | ||||
Fair Value, Nonrecurring Level 3 Measurements from Impairments | ||||
Equipment on operating leases - net | 855.4 | $ 340.3 | ||
Losses, Equipment on operating leases - net | 21 | 59.4 | ||
Other assets | 141.9 | 56.5 | ||
Losses, Other assets | 9.8 | 18 | ||
Total assets | 997.3 | $ 396.8 | ||
Total losses | $ 30.8 | $ 77.4 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Cash Flow Hedges | ||
Cash flow hedge loss recorded in OCI to be reclassified within twelve months | $ (6.7) | |
Gains or losses reclassified from OCI to earnings | 0 | |
Interest rate contracts | Cash flow hedges | Designated as Hedging Instruments | ||
Cash Flow Hedges | ||
Notional amounts | $ 1,550 | $ 3,150 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Fair Value Hedges | Designated as Hedging Instruments | ||
Fair Value Hedges | ||
Notional amounts | $ 6,525.7 | $ 8,336.9 |
Current Maturities of Long-term Borrowings | ||
Borrowings Designated in Fair Value Hedging Relationships | ||
Carrying Amount of Hedged Item | 2.5 | 185.4 |
Active Hedging Relationships | 0.3 | |
Discontinued Relationships | 2.5 | (4.4) |
Total | 2.5 | (4.1) |
Long-term Borrowings | ||
Borrowings Designated in Fair Value Hedging Relationships | ||
Carrying Amount of Hedged Item | 7,149.8 | 8,378.1 |
Active Hedging Relationships | 530 | 292.8 |
Discontinued Relationships | 121.6 | (31.6) |
Total | $ 651.6 | $ 261.2 |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Interest rate contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 2,336.6 | $ 2,312.4 |
Interest rate caps | Sold | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,961.4 | 1,611.3 |
Interest rate caps | Purchased | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 1,961.4 | 1,611.3 |
Foreign exchange contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | 172.6 | 691.6 |
Cross-currency interest rate contracts | ||
Derivatives Not Designated as Hedging Instruments | ||
Notional amounts | $ 111.5 | $ 91.1 |
Derivative Instruments - Fair_2
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Fair Value of Derivative Instruments | ||
Total derivative assets | $ 587 | $ 333.8 |
Total derivative liabilities | 31 | 57.3 |
Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 565.2 | 328.8 |
Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 12.7 | 26.5 |
Not Designated as Hedging Instruments | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 18 | 3.1 |
Not Designated as Hedging Instruments | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 3.8 | 1.9 |
Not Designated as Hedging Instruments | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 17.4 | 20.9 |
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 10.3 | 2.6 |
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 16.7 | 17.9 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Other Assets | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 3.8 | 1.9 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | 0.9 | 9.9 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative assets | 7.7 | 0.5 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere | ||
Fair Value of Derivative Instruments | ||
Total derivative liabilities | $ 0.7 | $ 3 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Not designated as hedges, gains (losses) | $ 51.6 | $ 19.3 | $ 90.1 |
John Deere | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Gain (loss) on derivative transactions with affiliate party | 468.7 | 561.9 | (281.1) |
Interest rate contracts | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Cash flow hedges, recognized in OCI | (17.4) | (22.2) | 17.8 |
Interest rate contracts | Interest expense | |||
Classification and gains (losses) including accrued interest expense related to derivative instruments | |||
Fair value hedges, gains (losses) | 477.3 | 583.2 | (281.4) |
Cash flow hedges, reclassified from OCI | (17.9) | 5.5 | 5.5 |
Not designated as hedges, gains (losses) | (5.4) | (25.8) | (6.6) |
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) | $ 57 | $ 45.1 | $ 96.7 |
Derivative Instruments - Counte
Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Nov. 03, 2019 |
Counterparty Risk and Collateral | ||
Cash collateral paid | $ 0 | $ 0 |
Derivative assets | ||
Gross Amounts Recognized | 587 | 333.8 |
Derivative liabilities | ||
Gross Amounts Recognized | 31 | 57.3 |
Cash Collateral Paid | 0 | 0 |
John Deere | ||
Derivative assets | ||
Gross Amounts Recognized | 583.2 | 331.9 |
Netting Arrangements | (23.5) | (42.6) |
Net Amount | 559.7 | 289.3 |
Derivative liabilities | ||
Gross Amounts Recognized | 30.1 | 47.4 |
Netting Arrangements | (23.5) | (42.6) |
Net Amount | 6.6 | 4.8 |
External | ||
Derivative assets | ||
Gross Amounts Recognized | 3.8 | 1.9 |
Netting Arrangements | (0.7) | (0.2) |
Net Amount | 3.1 | 1.7 |
Derivative liabilities | ||
Gross Amounts Recognized | 0.9 | 9.9 |
Netting Arrangements | (0.7) | (0.2) |
Net Amount | 0.2 | 9.7 |
Derivative Instruments | ||
Counterparty Risk and Collateral | ||
Aggregate liability positions for derivatives with credit risk related contingent features | 0 | 0 |
Derivative Instruments | John Deere | ||
Counterparty Risk and Collateral | ||
Increase in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement | 0 | $ 0 |
International Futures Market | ||
Counterparty Risk and Collateral | ||
Collateral to participate in an international futures market | $ 2.6 |
Employee-Separation Programs (D
Employee-Separation Programs (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | Oct. 30, 2022 | |
2020 Employee-Separation Programs | |||
Employee Separation Programs | |||
Total employee-separation programs' expenses | $ 19.7 | ||
Employee-separation program payments | 5.7 | ||
2020 Employee-Separation Programs | Forecasted | |||
Employee Separation Programs | |||
Employee-separation program payments | $ 8.5 | ||
2020 Employee-Separation Programs | Health Care and Life Insurance | |||
Employee Separation Programs | |||
Curtailment expense | $ 5.5 | ||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | Selling, General and Administrative Expense | ||
Voluntary Employee-Separation Programs | |||
Employee Separation Programs | |||
Total employee-separation programs' expenses | $ 8.4 |
Geographic Area Information (De
Geographic Area Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 01, 2020USD ($) | Aug. 02, 2020USD ($) | May 03, 2020USD ($) | Feb. 02, 2020USD ($) | Nov. 03, 2019USD ($) | Jul. 28, 2019USD ($) | Apr. 28, 2019USD ($) | Jan. 27, 2019USD ($) | Nov. 01, 2020USD ($)item | Nov. 03, 2019USD ($) | Oct. 28, 2018USD ($) | |
Geographic Area Information | |||||||||||
Number of operating segments | item | 1 | ||||||||||
Revenues | $ 692.9 | $ 696 | $ 700.1 | $ 718.6 | $ 784.7 | $ 741.8 | $ 703 | $ 660.8 | $ 2,807.6 | $ 2,890.3 | $ 2,532.2 |
Receivables | 33,557.3 | 32,821.5 | 33,557.3 | 32,821.5 | 30,646.7 | ||||||
U.S. | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 2,517.6 | 2,588.1 | 2,266.8 | ||||||||
Receivables | 28,196.8 | 27,854.5 | 28,196.8 | 27,854.5 | 26,039.6 | ||||||
Outside the U.S. | |||||||||||
Geographic Area Information | |||||||||||
Revenues | 290 | 302.2 | 265.4 | ||||||||
Receivables | $ 5,360.5 | $ 4,967 | $ 5,360.5 | $ 4,967 | $ 4,607.1 |
Unconsolidated Affiliated Com_3
Unconsolidated Affiliated Company (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | Oct. 29, 2017 | |
Operations: | ||||||||||||
Total revenue | $ 692.9 | $ 696 | $ 700.1 | $ 718.6 | $ 784.7 | $ 741.8 | $ 703 | $ 660.8 | $ 2,807.6 | $ 2,890.3 | $ 2,532.2 | |
Net income | 425.1 | 419.3 | 799 | |||||||||
The Company's equity in net income | 0.6 | $ 0.5 | $ 0.4 | $ 0.7 | 0.4 | $ 0.4 | $ 0.4 | $ 0.6 | 2.2 | 1.8 | 1.9 | |
Financial Position: | ||||||||||||
Total assets | 40,857.2 | 40,089.9 | 40,857.2 | 40,089.9 | ||||||||
Total net assets | 4,298.2 | 4,128.4 | 4,298.2 | 4,128.4 | 4,070 | $ 3,657.2 | ||||||
The Company's share of net assets | $ 19.3 | 16.4 | $ 19.3 | 16.4 | ||||||||
Unconsolidated Affiliated Companies | ||||||||||||
Ownership percentage in equity method investee | 50.00% | 50.00% | ||||||||||
Operations: | ||||||||||||
Total revenue | $ 13.4 | 12.4 | 11.7 | |||||||||
Net income | 4.4 | 3.6 | 3.9 | |||||||||
The Company's equity in net income | 2.2 | 1.8 | $ 1.9 | |||||||||
Financial Position: | ||||||||||||
Total assets | $ 327.1 | 258.1 | 327.1 | 258.1 | ||||||||
Total external borrowings | 285.2 | 221 | 285.2 | 221 | ||||||||
Total net assets | 38.5 | 32.9 | 38.5 | 32.9 | ||||||||
The Company's share of net assets | $ 19.3 | $ 16.4 | $ 19.3 | $ 16.4 |
Supplemental Information (Una_3
Supplemental Information (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 01, 2020 | Aug. 02, 2020 | May 03, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Quarterly Information | |||||||||||
Fiscal period duration | 91 days | 98 days | 364 days | 371 days | 364 days | ||||||
Revenues | $ 692.9 | $ 696 | $ 700.1 | $ 718.6 | $ 784.7 | $ 741.8 | $ 703 | $ 660.8 | $ 2,807.6 | $ 2,890.3 | $ 2,532.2 |
Interest expense | 146.2 | 161.3 | 216.6 | 219.8 | 253.1 | 256.2 | 252 | 226.5 | 743.9 | 987.8 | 737.2 |
Operating expenses | 335.4 | 344.6 | 452.7 | 374 | 439.6 | 329.2 | 331.5 | 289.2 | 1,506.7 | 1,389.5 | 1,215.1 |
Provision (credit) for income taxes | 58.2 | 44.4 | 5.4 | 26.1 | 24.1 | 11.8 | 35.7 | 23.9 | 134.1 | 95.5 | (217.2) |
Equity in income of unconsolidated affiliate | 0.6 | 0.5 | 0.4 | 0.7 | 0.4 | 0.4 | 0.4 | 0.6 | 2.2 | 1.8 | 1.9 |
Net income (loss) attributable to noncontrolling interests | (0.1) | 0.2 | (0.1) | 0.2 | (0.1) | 0.1 | 0.1 | 0.1 | (0.2) | ||
Net income attributable to the Company | $ 153.7 | $ 146.2 | $ 25.9 | $ 99.2 | $ 68.4 | $ 144.8 | $ 84.3 | $ 121.7 | $ 425 | $ 419.2 | $ 799.2 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 27, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | Oct. 28, 2018 | |
Subsequent Event | ||||
Cash dividends declared and paid to JDFS | $ 275 | $ 330 | $ 375 | |
Subsequent Event | ||||
Subsequent Event | ||||
Dividend from JDFS paid to Deere & Co. | $ 135 | |||
Subsequent Event | John Deere Financial Services, Inc. | ||||
Subsequent Event | ||||
Cash dividends declared and paid to JDFS | $ 135 |