=============================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2000 Commission file no: 1-6458 __________________________ JOHN DEERE CAPITAL CORPORATION Delaware 36-2386361 (State of incorporation) (IRS employer identification no.) 1 East First Street, Suite 600 Reno, Nevada 89501 (Address of principal executive offices) Telephone Number: (775) 786-5527 ________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- At January 31, 2000, 2,500 shares of common stock, without par value, of the registrant were outstanding, all of which were owned by John Deere Credit Company, a wholly-owned subsidiary of Deere & Company. The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with certain reduced disclosures as permitted by those instructions. ============================================================= PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS John Deere Capital Corporation and Subsidiaries Statements of Consolidated Income and Retained Earnings (Unaudited) (in millions) Three Months Ended January 31, ------------------------------ 2000 1999 ---- ---- Revenues Finance income earned on retail notes $87.6 $95.7 Lease revenues 88.9 58.9 Revolving charge account income 33.2 27.2 Finance income earned on wholesale notes 21.8 18.9 Securitization and servicing fee income 8.1 8.8 Net gain on retail notes sold 3.8 5.8 Interest income from short-term Investments 2.5 2.6 Other income 5.2 3.3 - ---------------------------------------------------------- Total revenues 251.1 221.2 - ---------------------------------------------------------- Expenses Interest expense 99.1 86.0 Operating expenses: Administrative and operating expenses 33.3 28.4 Provision for credit losses 8.4 11.3 Fees paid to John Deere 3.1 3.1 Depreciation of equipment on operating leases 52.0 35.2 - ---------------------------------------------------------- Total operating expenses 96.8 78.0 - ---------------------------------------------------------- Total expenses 195.9 164.0 - ---------------------------------------------------------- Income of consolidated group before income taxes 55.2 57.2 Provision for income taxes 19.1 20.2 - ---------------------------------------------------------- Income of consolidated group 36.1 37.0 Equity in income of unconsolidated affiliates .1 .4 - ---------------------------------------------------------- Net income 36.2 37.4 Cash dividends declared (5.0) (5.0) Retained earnings at beginning of period 884.7 806.4 - ---------------------------------------------------------- Retained earnings at end of period $915.9 $838.8 ========================================================== See Notes to Interim Financial Statements. Page 2 John Deere Capital Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (in millions) January 31, October 31, January 31, 2000 1999 1999 ----------- ----------- ----------- Assets Cash and cash equivalents $ 160.9 $ 149.4 $ 182.8 Receivables and leases: Retail notes 3,846.4 3,716.2 4,272.5 Revolving charge accounts 774.0 900.6 609.4 Wholesale notes 1,033.4 957.2 831.2 Financing leases 429.4 402.2 242.5 - ------------------------------------------------------------ Total receivables 6,083.2 5,976.2 5,955.6 Equipment on operating leases - net 1,337.0 1,254.8 923.6 - ------------------------------------------------------------ Total receivables and leases 7,420.2 7,231.0 6,879.2 Allowance for credit losses (85.5) (83.6) (83.0) - ------------------------------------------------------------ Total receivables and leases - net 7,334.7 7,147.4 6,796.2 - ------------------------------------------------------------ Other receivables 81.9 83.0 146.1 Notes receivable - John Deere 33.7 Investment in unconsolidated affiliates 10.7 9.5 20.5 Other assets 104.9 116.0 155.2 - ------------------------------------------------------------ Total Assets $ 7,726.8 $ 7,505.3 $ 7,300.8 ============================================================= Liabilities and Stockholder's Equity Short-term borrowings: Commercial paper $ 1,644.3 $ 1,264.7 $ 1,540.0 Extendible commercial notes and other notes payable 56.5 6.4 7.2 John Deere 117.7 93.2 Current maturities of long-term borrowings 2,350.6 2,137.6 1,673.0 - ------------------------------------------------------------ Total short-term borrowings 4,051.4 3,526.4 3,313.4 - ------------------------------------------------------------ Accounts payable and accrued liabilities: Accrued interest on debt 66.1 33.1 64.4 Other payables 371.7 324.2 285.7 - ------------------------------------------------------------ Total accounts payable and accrued liabilities 437.8 357.3 350.1 - ------------------------------------------------------------ Deposits withheld from dealers and merchants 124.3 122.8 154.2 - ------------------------------------------------------------ Long-term borrowings: Senior debt 1,934.9 2,351.1 2,382.3 Subordinated debt 150.0 150.0 150.0 - ----------------------------------------------------------- Total long-term borrowings 2,084.9 2,501.1 2,532.3 - ------------------------------------------------------------ Total liabilities 6,698.4 6,507.6 6,350.0 - ------------------------------------------------------------ Stockholder's equity: Common stock, without par value (issued and outstanding -- 2,500 shares owned by John Deere Credit Company) 112.8 112.8 112.8 Retained earnings 915.9 884.7 838.8 Accumulated other comprehensive income (loss) - cumulative translation adjustment (.3) .2 (.8) - ------------------------------------------------------------ Total stockholder's equity 1,028.4 997.7 950.8 - ------------------------------------------------------------ Total Liabilities and Stockholder's Equity $ 7,726.8 $ 7,505.3 $ 7,300.8 ============================================================= See Notes to Interim Financial Statements. Page 3 John Deere Capital Corporation and Subsidiaries Statements of Consolidated Cash Flows (Unaudited) (in millions) Three Months Ended January 31, ------------------------------ 2000 1999 ---- ---- Cash Flows from Operating Activities: Net income $ 36.2 $ 37.4 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 8.4 11.3 Provision for depreciation and amortization 52.6 35.8 Equity in income of unconsolidated affiliates (.1) (.4) Other 47.4 8.8 - ------------------------------------------------------- Net cash provided by operating activities 144.5 92.9 - ------------------------------------------------------- Cash Flows from Investing Activities: Cost of receivables and leases acquired (1,985.9)(1,977.2) Collections of receivables 1,632.7 1,478.4 Proceeds from sales of receivables 71.3 102.2 Other 89.0 82.6 - ------------------------------------------------------- Net cash used for investing activities (192.9) (314.0) - ------------------------------------------------------- Cash Flows from Financing Activities: Change in commercial paper 379.6 (132.0) Change in extendible commercial notes and other notes payable 50.1 .4 Change in receivable/payable with John Deere (161.6) 21.9 Proceeds from issuance of long-term borrowings 150.0 625.0 Principal payments on long-term borrowings (353.2) (297.5) Dividends paid (5.0) (5.0) - ------------------------------------------------------- Net cash provided by financing activities 59.9 212.8 - ------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 11.5 (8.3) Cash and cash equivalents at beginning of period 149.4 191.1 - ------------------------------------------------------- Cash and cash equivalents at end of period $ 160.9 $ 182.8 ======================================================= See Notes to Interim Financial Statements. Page 4 JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO INTERIM FINANCIAL STATEMENTS (1) The consolidated financial statements of John Deere Capital Corporation (Capital Corporation) and its subsidiaries (collectively called the Company) have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations and cash flows at the dates and for the periods presented. It is suggested that these interim financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. Based on the way the Company's operations are managed and evaluated by management and materiality considerations, the Company is viewed as one operating segment. (2) The principal business of the Company is providing and administering financing for retail purchases of new and used equipment manufactured by Deere & Company's agricultural, construction and commercial and consumer equipment divisions. The Company purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly- owned subsidiaries (collectively called John Deere). John Deere acquires these retail notes through independent John Deere retail dealers. The Company also purchases and finances certain agricultural, construction and lawn and grounds care retail notes unrelated to John Deere. In addition, the Company purchases and finances recreational product retail notes acquired from independent dealers (recreational product retail notes). The Company also leases equipment to retail customers, finances and services revolving charge accounts acquired from and offered through merchants or farm input providers in the agricultural, construction, and lawn and grounds care markets as well as insured international export financing products (revolving charge accounts), and provides wholesale financing for inventories of recreational vehicles, manufactured housing units, yachts, John Deere engines, and John Deere agricultural and John Deere construction equipment owned by dealers of those products (wholesale notes). Retail notes, revolving charge accounts, financing leases and wholesale notes receivable are collectively called "Receivables." Receivables and operating leases are collectively called "Receivables and Leases." (3) The Company's ratio of earnings before fixed charges to fixed charges was 1.55 to 1 for the first quarter of 2000 compared with 1.66 to 1 for the first quarter of 1999. "Earnings before fixed charges" consist of income before income taxes, the cumulative effect of changes in accounting and fixed charges. "Fixed charges" consist of interest on indebtedness, amortization of debt discount and expense, an estimated amount of rental expense under capitalized leases which is deemed to be representative of the interest factor and rental expense under operating leases. Page 5 (4) Comprehensive income for the first three months of 2000 and 1999 consisted of the following in millions of dollars: Three Months Ended January 31, ------------------ 2000 1999 ------------------ Net income $ 36.2 $ 37.4 Change in cumulative translation adjustment (0.5) -- ------------------ Comprehensive income $ 35.7 $ 37.4 ================== Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS Net income was $36.2 million for the first quarter of 2000, compared with $37.4 million last year. First quarter results were affected by higher operating expenses and lower income from the sale of retail notes, partially offset by higher income on a larger average Receivables and Lease portfolio financed. Revenues totaled $251.1 million for the first quarter of 2000 compared to $221.2 million for the same period last year. Revenues increased primarily due to an 8 percent increase in the average balance of Receivables and Leases financed. Finance income earned on retail notes totaled $87.6 million for the first three months of 2000, compared to $95.7 million for the same period in 1999. This decrease was primarily due to a 71 percent decrease in the average balance of recreational product installment notes financed. Lease revenues increased $30.0 million, to $88.9 million in the first three months of 2000, from $58.9 million in the first three months of 1999, due to a 51 percent increase in the average balance of equipment on operating leases and financing leases. Finance income earned on wholesale notes increased $2.9 million, to $21.8 million for the first three months of 2000, from $18.9 million in the first three months of 1999. This increase was primarily the result of continued growth in the financing for inventories of John Deere construction equipment, John Deere agricultural equipment and recreational vehicles. Revolving charge account income increased $6.0 million, to $33.2 million for the first three months of 2000, from $27.2 million in the first three months of 1999. This increase was primarily due to growth in the agricultural operating loan portfolio. Net gains on the sales of retail notes, including adjustments to prior sales, totaled $3.8 million for the first quarter of 2000 compared to $5.8 million for the same period a year ago. Additional sales of retail notes are expected to be made in the future. Interest expense totaled $99.1 million for the first quarter of 2000 compared to $86.0 million for the same period in 1999. This increase was primarily due to an increase in the weighted annual interest rate incurred on all borrowings from 5.9 percent for the first three months of 1999 to 6.3 percent for the first three months of 2000. In addition, average borrowings increased 8 percent to $6.144 billion in the first three months of 2000 compared to $5.686 billion in the first three months of 1999. Administrative and operating expenses increased 17 percent from $28.4 million in the first quarter of 1999 to $33.3 million for the same quarter in 2000. These increases were attributable to the costs associated with administering a larger Receivable and Lease portfolio as well as higher employment costs relating to the increased level of new acquisition volumes. Depreciation of equipment on operating leases increased to $52.0 million in the first quarter of 2000 compared to $35.2 million for the same periods in 1999, as a result of the increase in equipment on operating leases financed. During the first quarter of 2000, the provision for credit losses totaled $8.4 million compared with $11.3 million for the same period last year. This decrease in the provision for credit losses for the first three months of 2000 was primarily the result of less growth in the portfolio of Receivables and Leases financed compared to the first quarter of fiscal 1999 and lower write-offs on the owned portfolio. The annualized Page 6 provision for credit losses, as a percentage of the total average Receivable and Lease portfolio outstanding, was .47 percent for the first quarter of 2000 compared with .67 percent for the same period last year. Receivable and Lease acquisition volumes were as follows (in millions of dollars): Three Months Ended January 31, ----------------- 2000 1999 $ Change % Change -------------------------------------- Retail notes: Agricultural equipment $670 $906 ($236) (26%) Construction equipment 133 117 16 14 Lawn and grounds care equipment 45 38 7 18 Recreational products 72 84 (12) (14) -------------------------------------- Total 920 1,145 (225) (20) Revolving charge Accounts 420 321 99 31 Wholesale notes 450 394 56 14 Financing leases 31 27 4 15 Equipment on operating Leases 165 90 75 83 -------------------------------------- Total $ 1,986 $ 1,977 $ 9 -- ====================================== Retail note volumes decreased by $225 million for the first three months of 2000 compared to the first three months of 1999, due to a decrease in United States agricultural equipment retail note volumes. Revolving charge volumes increased due to the strong demand for the Farm Plan and operating loans offered to agricultural customers. Wholesale note volumes increased significantly during the first three months of 2000 primarily due to higher construction equipment floor planning notes and recreational vehicle wholesale notes. Operating lease volumes increased in the first three months over last year due to agricultural low-rate and guaranteed residual value leasing programs sponsored by the Company or John Deere. Total Receivables and Leases held were as follows (in millions of dollars): January 31, October 31, January 31, 2000* 1999* 1999 ------------------------------------ Retail notes: Agricultural equipment $2,676 $2,602 $2,751 Construction equipment 671 611 722 Lawn and grounds care Equipment 349 347 273 Recreational products 150 156 526 ------------------------------------ Total 3,846 3,716 4,272 Revolving charge accounts 774 901 609 Wholesale notes 1,033 957 831 Financing leases 430 402 243 Equipment on operating Leases 1,337 1,255 924 ------------------------------------ Total $7,420 $7,231 $6,879 ==================================== * - Includes the acquisition of John Deere Credit Limited (JDCL), Farming and Agricultural Finance Limited (FAF) and Senstar Capital Corporation (Senstar) installment, lease and revolving charge balances. JDCL and FAF receivables were acquired in the second quarter of fiscal 1999 and Senstar receivables were acquired in the fourth quarter of fiscal 1999. Page 7 Receivables and Leases administered by the Company, which include retail notes sold, were as follows in (millions of dollars): January 31, October 31, January 31, 2000 1999 1999 ------------------------------------- Receivables and Leases administered: Receivables and Leases owned by the Company $7,420 $7,231 $6,879 Retail notes sold and securitized (with limited recourse)* 1,949 2,275 1,348 Retail notes sold (without recourse)** 111 118 429 Receivables serviced (without recourse)*** 38 46 ------------------------------------- Total Receivables and Leases administered $9,518 $9,670 $8,656 ===================================== * The Company's maximum exposure under all retail note recourse provisions at January 31, 2000, October 31, 1999 and January 31, 1999 was $155 million, $161 million and $174 million, respectively. In addition, the Company has guaranteed letters of credit on behalf of John Deere Credit Inc., the John Deere finance subsidiary in Canada, as part of two retail note sales. At January 31, 2000, the maximum exposure under these agreements was approximately $7 million. ** On recreational product retail note sales, the Company continues to administer the portfolio outstanding for a fee until the servicing rights are assumed by their owner. The Company anticipates the servicing relationship will generally terminate within twelve months from the date of sale. *** On February 1, 1999, the Company began servicing a receivable portfolio on behalf of FAF. These servicing rights were obtained in conjunction with the Company's acquisition of the remaining 50 percent interest in JDCL. Total Receivable and Lease amounts 60 days or more past due, by product and as a percentage of total balances held were as follows (in millions of dollars): January 31, October 31, January 31, 2000 1999 1999 --------------------------------------- Dollars % Dollars % Dollars % --------------------------------------- Retail notes: Agricultural equipment $10.7 .40% $11.7 .45% $10.8 .39% Construction Equipment 2.1 .31 2.1 .34 2.8 .39 Lawn and grounds care equipment .9 .26 .8 .23 .8 .29 Recreational products .2 .13 .1 .06 .2 .04 ----- ----- ----- Total 13.9 .36 14.7 .40 14.6 .34 Revolving charge Accounts 10.7 1.38 8.9 .99 9.7 1.59 Wholesale notes 1.6 .15 1.1 .11 1.0 .12 Leases 5.2 .29 5.2 .31 5.9 .51 ----- ----- ----- Total $31.4 .42 $29.9 .41 $31.2 .45 ===== ===== ===== The balance of retail notes held (principal plus accrued interest) with any installment 60 days or more past due was $51 million, $54 million and $63 million at January 31, 2000, October 31, 1999 and January 31, 1999, respectively. The balance of retail notes held on which any installment is 60 days or more past due, expressed as a percentage of the ending balance of retail notes receivable, was 1.33 percent, 1.45 percent and 1.47 percent at January 31, 2000, October 31, 1999 and January 31, 1999, respectively. Page 8 During the first quarter of 2000, write-offs (net of recoveries) of Receivables and Leases totaled $6.4 million compared with $7.2 million in the same period last year. Annualized write-offs, as a percentage of the total average Receivables and Leases held, were .35 percent for the first quarter of 2000 compared with .43 percent during the same period last year. Write-offs relating to retail notes decreased $.9 million in the first three months of 2000, when compared with the first three months of 1999, primarily due to decreased write-offs of recreational product retail notes. Lease write- offs increased $.1 million in the first three months of 2000 when compared to last year primarily due to higher write-offs on agricultural leases. Revolving charge account and wholesale write-offs in the first three months of 2000 remained relatively stable when compared to the same period last year. Deposits withheld from dealers and merchants, representing mainly the aggregate dealer retail note and lease withholding accounts from individual John Deere dealers to which losses from retail notes and leases originating from the respective dealers can be charged, amounted to $124 million at January 31, 2000, compared with $123 million at October 31, 1999 and $154 million at January 31, 1999. Effective February 1, 1999, the U.S. John Deere agricultural dealer reserve program was modified to evaluate and adjust reserves outstanding quarterly rather than annually under the previous program. In addition, the minimum required reserve for select dealers was adjusted from 3 percent to 2 percent of the aggregate balance outstanding on all installment contracts originated through that dealer. The Company's allowance for credit losses on all Receivables and Leases held totaled $86 million at January 31, 2000, $84 million at October 31, 1999 and $83 million at January 31, 1999. The allowance for credit losses represented 1.15 percent of the total Receivables and Leases held at January 31, 2000, 1.16 percent at October 31, 1999 and 1.21 percent at January 31, 1999. The allowance is subject to an ongoing evaluation based on loss experience and related estimates to ensure the allowance for credit losses is maintained at an adequate level. Management believes the allowance for credit losses at January 31, 2000 is sufficient to provide adequate protection against losses. YEAR 2000 No public infrastructure problems or any facilities related problems were encountered by the Company's locations during the rollover to the year 2000. After extensive system verification and testing, the Company's systems are operating normally. The Company is not aware of any significant issues related to the Year 2000 problem. The total cost of the modifications and upgrades to date has been $6 million since the beginning of 1997 and the future costs are not expected to be significant. These costs were expensed as incurred and did not include the cost of scheduled replacement software. Other major systems projects were not deferred due to the Year 2000 compliance projects. EURO CONVERSION The Company is well advanced in the process of identification, implementation and testing of its systems to adopt the euro currency in its operations affected by this change. The Company's affected suppliers, distribution network and financial institutions have been contacted and the Company does not believe the currency change will significantly impact these relationships. As a result, the Company expects to have its systems ready to process the euro conversion during the transition period from January 1, 1999 through January 1, 2002. The cost of information systems modifications, effects on product pricing and purchase contracts, and the impact on foreign currency financial instruments, including derivatives, are not expected to be material. Page 9 SAFE HARBOR STATEMENT Statements under the "Euro Conversion" heading and other statements herein that relate to future operating periods are subject to important risks and uncertainties that could cause actual results to differ materially. Further information, including factors that potentially could materially affect the Company's and John Deere's financial results, is included in the most recent Deere & Company Form 10-K and other John Deere and Capital Corporation filings with the Securities and Exchange Commission CAPITAL RESOURCES AND LIQUIDITY The Company relies on its ability to raise substantial amounts of funds to finance its Receivable and Lease portfolios. The Company's primary sources of funds for this purpose are a combination of borrowings and equity capital. Additionally, the Company periodically sells substantial amounts of retail notes in the public market and in private sales. The Company's ability to obtain funds is affected by its debt ratings, which are closely related to the outlook for and the financial condition of Deere & Company, and the nature and availability of support facilities, such as its lines of credit. For information regarding Deere & Company and its business, see Exhibit 99. The Company's ability to meet its debt obligations is supported in a number of ways. All commercial paper issued is backed by bank credit lines. The assets of the Company are self- liquidating in nature. A strong equity position is available to absorb unusual losses on these assets. Liquidity is also provided by the Company's ability to sell these assets. The Company's business is somewhat seasonal, with overall acquisition volumes of Receivables and Leases traditionally higher in the second half of the fiscal year than in the first half, and overall collections of Receivables and Leases traditionally somewhat higher in the first six months than in the last six months of the fiscal year. During the first three months of 2000, the aggregate net cash provided by operating and financing activities was primarily used to increase Receivables and Leases. Net cash provided by operating activities was $145 million in the first three months of 2000. Financing activities provided $60 million during the same period, resulting from a $65 million net increase in total borrowings, which was partially offset by a $5 million dividend payment to John Deere Credit Company. During the quarter, the change in the Company's borrowings was affected by a $162 million change in the receivable payable to John Deere. Net cash used for investing activities totaled $193 million in the first three months of 2000, primarily due to Receivable and Lease acquisitions exceeding collections by $353 million, which was partially offset by the $71 million in proceeds from the sale of receivables. Cash and cash equivalents increased $12 million during the first three months of 2000. During the first three months of 1999, the aggregate net cash provided by operating and financing activities was primarily used to increase Receivables and Leases. Net cash provided by operating activities was $93 million in the first three months of 1999. Financing activities provided $213 million during the same period, resulting from a $218 million net increase in total borrowings, which was partially offset by a $5 million dividend payment to John Deere Credit Company. Net cash used for investing activities totaled $314 million in the first three months of 1999, primarily due to Receivable and Lease acquisitions exceeding collections by $499 million, which was partially offset by the $102 million in proceeds from the sale of receivables. Cash and cash equivalents decreased $8 million during the first three months of 1999. Total interest-bearing indebtedness amounted to $6.136 billion at January 31, 2000, compared with $6.028 billion at October 31, 1999 and $5.846 billion at January 31, 1999, generally corresponding with the level of Receivables and Leases financed and the level of cash and cash equivalents. Total short-term indebtedness amounted to $4.051 billion at January 31, 2000, compared with $3.526 billion at October 31, 1999 and $3.313 billion at January 31, 1999. Total long-term indebtedness amounted to $2.085 billion, Page 10 $2.501 billion and $2.532 billion at January 31, 2000, October 31, 1999 and January 31, 1999, respectively. The ratio of total interest-bearing debt to stockholder's equity was 6.0 to 1, 6.0 to 1 and 6.1 to 1 at January 31, 2000, October 31, 1999 and January 31, 1999, respectively. The Capital Corporation's subsidiary, John Deere Credit Limited in Gloucester, England, retired $61 million of long-term debt due in 2000. The Capital Corporation issued $150 million and retired $292 million of medium-term notes during the first quarter. At January 31, 2000, the Capital Corporation, Deere & Company, John Deere Limited (Canada) and John Deere Credit Inc. (Canada), jointly, maintained $5.534 billion of unsecured lines of credit with various banks in North America and overseas, $2.817 billion of which was unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding the current portion of long-term borrowings, of the Capital Corporation, Deere & Company, John Deere Limited (Canada) and John Deere Credit Inc. (Canada) were considered to constitute utilization. On February 22, 2000, the Capital Corporation and Deere & Company jointly terminated agreements for $5.5 billion in unsecured lines of credit (including the lines available to John Deere Limited (Canada) and John Deere Credit Inc. (Canada)) and entered into new agreements. The new agreements provide Deere & Company and the Capital Corporation with $4.5 billion in unsecured lines of credit with various banks in North America and overseas. These agreements include a $2.250 billion long-term commitment of the banks expiring on February 22, 2005. The facility fees payable under these credit agreements are divided between Deere & Company and the Capital Corporation based on the proportion of their respective commercial paper outstanding. The Capital Corporation declared and paid a cash dividend of $5 million to John Deere Credit Company during the first quarter of 2000. John Deere Credit Company paid a comparable dividend to Deere & Company. On February 25, 2000, the Capital Corporation declared a cash dividend of $5 million to John Deere Credit Company, which in turn declared a cash dividend of $5 million to Deere & Company, each payable on March 7, 2000. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. See the information under "Management's Discussion and Analysis," Note 13 "Financial Instruments" and "Supplemental Information (Unaudited)" in the Company's most recent annual report filed on Form 10-K. There has been no material change in this information. Page 11 PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS. 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 state and federal laws and regulations concerning retail credit. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes these unresolved legal actions will not have a material effect on its financial position or results of operations. Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. Omitted pursuant to instruction H(2). Item 3. DEFAULTS UPON SENIOR SECURITIES. Omitted pursuant to instruction H(2). Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Omitted pursuant to instruction H(2). Item 5. OTHER INFORMATION. None. Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. See the index to exhibits immediately preceding the exhibits filed with this report. Certain instruments relating to long-term debt, constituting less than 10% of the registrant's total assets, are not filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant will file copies of such instruments upon request of the Commission. (b) Reports on Form 8-K. Current report on Form 8-K dated November 23, 1999 (Items 5 and 7). Page 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. JOHN DEERE CAPITAL CORPORATION Date: March 13, 2000 By: /s/ Nathan J. Jones --------------------------- Nathan J. Jones Senior Vice President and Principal Financial Officer Page 13 INDEX TO EXHIBITS Exhibit - --------- (12) Computation of ratio of earnings to fixed charges (27) Financial data schedule (99) Part I of Deere & Company Form 10-Q for the quarter ended January 31, 2000 (Securities and Exchange Commission file number 1-4121*) __________________________ *Incorporated by reference. Copies of these exhibits are available from the Company upon request. Page 14