===============================================================
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, 2001
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, 2001, 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.
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Index to Exhibits: Page 14
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,
2001 2000
----------------------
Revenues
Finance income earned on retail notes $ 113.6 $ 87.6
Lease revenues 106.7 88.9
Finance income earned on wholesale notes 23.4 21.8
Revolving charge account income 27.5 26.7
Operating loan income 8.7 6.5
Securitization and servicing fee income 8.1 8.1
Net gain on receivables and leases sold 9.6 3.8
Interest income from short-term investments .9 2.5
Other income 5.0 5.2
- --------------------------------------------------------------
Total revenues 303.5 251.1
- --------------------------------------------------------------
Expenses
Interest expense 123.4 99.1
Operating expenses:
Administrative and operating expenses 39.8 33.3
Provision for credit losses 7.6 8.4
Fees paid to John Deere 3.8 3.1
Depreciation of equipment on operating
leases 62.7 52.0
- --------------------------------------------------------------
Total operating expenses 113.9 96.8
- ---------------------------------------------------------------
Total expenses 237.3 195.9
- --------------------------------------------------------------
Income of consolidated group before income
taxes 66.2 55.2
Provision for income taxes 22.2 19.1
- --------------------------------------------------------------
Income of consolidated group 44.0 36.1
Equity in income of unconsolidated affiliates .5 .1
- --------------------------------------------------------------
Net income 44.5 36.2
Cash dividends declared (5.0)
Retained earnings at beginning of period 1,005.5 884.7
- --------------------------------------------------------------
Retained earnings at end of period $ 1,050.0 $ 915.9
==============================================================
See Notes to Interim Financial Statements.
Page 2
John Deere Capital Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in millions)
Jan 31, Oct 31, Jan 31,
2001 2000 2000
------------------------------------
Assets
Cash and cash equivalents $ 154.8 $ 155.9 $ 160.9
Receivables and leases:
Retail notes 4,176.1 4,587.7 3,846.4
Wholesale notes 847.5 937.0 945.2
Revolving charge accounts 573.0 688.3 552.4
Operating loans 384.5 422.2 221.6
Financing leases 449.3 456.4 429.4
- -------------------------------------------------------------
Total receivables 6,430.4 7,091.6 5,995.0
- -------------------------------------------------------------
Equipment on operating
leases - net 1,482.9 1,517.1 1,337.0
- -------------------------------------------------------------
Total receivables and
leases 7,913.3 8,608.7 7,332.0
Allowance for credit losses (87.7) (93.3) (84.2)
- -------------------------------------------------------------
Total receivables and
leases - net 7,825.6 8,515.4 7,247.8
- -------------------------------------------------------------
Notes receivable -
unconsolidated affiliates 141.9 140.0 86.9
Notes receivable - John Deere 259.0 33.7
Other receivables 111.1 86.2 81.9
Investment in unconsolidated
affiliates 4.0 9.7 10.7
Other assets 136.5 130.8 104.9
- -------------------------------------------------------------
Total Assets $ 8,632.9 $ 9,038.0 $ 7,726.8
==============================================================
Liabilities and Stockholder's Equity
Short-term borrowings:
Commercial paper $ 1,486.2 $ 2,474.1 $ 1,644.3
Extendible commercial notes
and other notes payable 13.7 3.7 56.5
John Deere 495.4
Current maturities of
long-term borrowings 1,963.9 1,769.5 2,350.6
- -------------------------------------------------------------
Total short-term
borrowings 3,463.8 4,742.7 4,051.4
- -------------------------------------------------------------
Accounts payable and accrued
liabilities:
Accrued interest on debt 82.2 52.3 66.1
Other payables 542.1 415.5 371.7
- -------------------------------------------------------------
Total accounts payable and
accrued liabilities 624.3 467.8 437.8
- -------------------------------------------------------------
Deposits withheld from dealers
and merchants 133.5 132.6 124.3
- -------------------------------------------------------------
Long-term borrowings:
Senior debt 3,127.9 2,436.8 1,934.9
Subordinated debt 150.0 150.0 150.0
- -------------------------------------------------------------
Total long-term borrowings 3,277.9 2,586.8 2,084.9
- -------------------------------------------------------------
Total liabilities 7,499.5 7,929.9 6,698.4
- -------------------------------------------------------------
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 1,050.0 1,005.5 915.9
Accumulated other comprehensive
income (loss) (29.4) (10.2) (.3)
- -------------------------------------------------------------
Total stockholder's equity 1,133.4 1,108.1 1,028.4
- -------------------------------------------------------------
Total Liabilities and
Stockholder's Equity $ 8,632.9 $ 9,038.0 $ 7,726.8
==============================================================
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,
2001 2000
-----------------------------
Cash Flows from Operating Activities:
Net income $ 44.5 $ 36.2
Adjustments to reconcile net
income to net cash provided by
operating activities:
Provision for credit losses 7.6 8.4
Provision for depreciation
and amortization 63.7 52.6
Undistributed earnings of
unconsolidated affiliates (.5) (.1)
Other 2.9 47.4
- -------------------------------------------------------------
Net cash provided by
operating activities 118.2 144.5
- -------------------------------------------------------------
Cash Flows from Investing Activities:
Cost of Receivables acquired (1,783.5) (1,722.4)
Collections of Receivables 1,499.7 1,588.8
Cost of operating leases acquired (89.6) (165.0)
Proceeds from sale of equipment on
operating leases 61.0 37.3
Change in notes receivable -
unconsolidated affiliates (1.9) (54.6)
Proceeds from sales of receivables 912.9 71.3
Other 123.5 51.7
- -------------------------------------------------------------
Net cash provided by (used for)
investing activities 722.1 (192.9)
- -------------------------------------------------------------
Cash Flows from Financing Activities:
Change in commercial paper (987.9) 379.6
Change in extendible commercial notes
and other notes payable 10.0 50.1
Change in receivable from/payable to
John Deere (739.9) (161.6)
Proceeds from issuance of long-term
borrowings 1,400.0 150.0
Principal payments on long-term
borrowings (523.6) (353.2)
Dividends paid (5.0)
- -------------------------------------------------------------
Net cash provided by (used for)
financing activities (841.4) 59.9
- -------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents (1.1) 11.5
Cash and cash equivalents at beginning
of period 155.9 149.4
- -------------------------------------------------------------
Cash and cash equivalents at end
of period $ 154.8 $ 160.9
=============================================================
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 accounting principles
generally accepted in the United States of America 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
year.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America requires management to make estimates and
assumptions that affect the reported amounts and related
disclosures. Actual results could differ from those estimates.
Certain amounts for prior years have been reclassified to
conform with 2001 financial statement presentation.
Based on the way the Company's operations are managed and
evaluated by management, the Company is viewed as having one
operating segment.
(2) The Company provides and administers financing for retail
purchases of new and used equipment manufactured by Deere &
Company's agricultural, commercial and consumer and construction
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 John Deere
equipment 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 vehicle and
manufactured housing unit retail notes acquired from dealers
(recreational product retail notes). The Company leases
equipment to retail customers (financing and operating leases).
The Company also finances and services revolving charge accounts
and operating loans 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
operating loans), and provides wholesale financing for
inventories of 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, operating loans, financing leases and wholesale notes
receivable are collectively called "Receivables." Receivables
and operating leases are collectively called "Receivables and
Leases."
(3) In the first quarter of fiscal 2001, John Deere Bank S.A.
(JDB), a wholly-owned subsidiary of the Capital Corporation,
purchased the portfolio held by John Deere Credit - Germany,
which had been one of the Company's joint ventures. Future
equipment financing in Germany will be offered through JDB. The
purchase of this portfolio added approximately $176 million to
the Company's Receivables and Leases held at the acquisition
date.
Page 5
(4) In the first quarter of 2001, the Company formed a joint
venture company, iVesta Financial Solutions LLC (iVesta).
iVesta will develop and manage a new service that will enable
customers to execute secure financial transactions with
companies selling goods or services in an e-business
environment. The service, named Isis, will provide an
electronic financial network for the agricultural market.
Agricultural customers will be able to use the service to
select from a choice of Isis network lenders when purchasing a
product or seeking financing and complete entire loan
transactions online. The investment in iVesta is being
accounted for as an equity basis investment.
(5) Subsequent to the first quarter of 2001, the Company
discontinued offering wholesale note financing for yacht dealer
inventories. Acquisition volumes for this product totaled $37
million for the first three months of 2001 and the wholesale
notes outstanding were $77 million at January 31, 2001.
(6) The Company's ratio of earnings before fixed charges to
fixed charges was 1.53 to 1 for the first quarter of 2001
compared with 1.55 to 1 for the first quarter of 2000.
"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.
(7) In the first quarter of 2001, the Company adopted
Financial Accounting Standards Board (FASB) Statement 133,
Accounting for Derivative Instruments and Hedging Activities,
as amended by FASB 138. Under the new standards, all
derivatives have been recorded at fair value in the financial
statements. Changes in fair values of the derivatives are
recognized periodically in other comprehensive income (equity)
for derivatives designated as hedges of future cash flows or
net income for all other derivatives. The after-tax transition
adjustments for adopting the new standards at November 1, 2000
were an unrealized loss of $3.6 million recorded in "Unrealized
loss on Derivatives" (other comprehensive income) and a loss of
$0.1 million recorded in income. The amount of the transition
adjustment loss which was recorded in other comprehensive
income at November 1, 2000 that will be reclassified to
earnings in fiscal year 2001 is approximately $1 million. The
effects of the adoption of the new standards on the Company's
financial position and net income were not material.
(8) Comprehensive income, which includes all changes in the
Company's equity during the period except for transactions with
the stockholder, was as follows in millions of dollars:
Three Months Ended January 31,
2001 2000
------------------------------
Net income $ 44.5 $ 36.2
Other comprehensive income
(loss), net of tax:
Change in cumulative translation
adjustment 3.4 (0.5)
Unrealized loss on derivatives (22.6)
------------------------------
Comprehensive income $ 25.3 $ 35.7
==============================
Page 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Net income was $44.5 million for the first quarter of 2001,
compared with $36.2 million last year. First quarter results
benefited from higher income on a larger average receivable and
lease portfolio and higher income from increased sales of
retail notes, partially offset by higher selling and
administrative expenses related to the larger portfolio.
Revenues totaled $303.5 million for the first quarter, compared
to $251.1 million for the same period a year ago. Revenues
increased primarily due to a 16 percent increase in the average
balance of Receivables and Leases financed. Finance income
earned on retail notes increased $26.0 million to $113.6
million for the first three months of 2001, from $87.6 million
for the same period in 2000. This increase was primarily due to
the increase in the average balance of Receivables financed and
higher yields on variable rate contracts compared to one year
ago. Lease revenues were $106.7 million during the first three
months of 2001, compared to $88.9 million for the first three
months of 2000. Finance income earned on wholesale notes was
$23.4 million for the first three months of 2001, compared to
$21.8 million for the first three months of 2000. Revolving
charge account income was $27.5 million for the first quarter,
compared to $26.7 million during the same period last year.
Operating loan income increased $2.2 million to $8.7 million,
from $6.5 million in the first quarter of 2000.
Net gain on the sales of receivables and leases, including
adjustments to prior sales, totaled $9.6 million during the
first three months of 2001, compared to $3.8 million for the
same period a year ago. The increase was primarily related to
the sale of agricultural retail notes (approximately $800
million total principal value) during the first quarter of
2001. There were no similar sales during the first quarter of
2000. Additional sales of receivables and leases are expected
to be made in the future.
Interest expense totaled $123.4 million for the first quarter
of 2001, compared to $99.1 million for the same period in 2000.
This increase was primarily due to an increase in the weighted
annual interest rate incurred on all borrowings from 6.3
percent for the first three months of 2000 to 7.3 percent for
the first three months of 2001. In addition, average borrowings
increased 16 percent to $7,103 million in the first three
months of 2001 from $6,144 million in the first three months of
2000.
Administrative and operating expenses were $39.8 million in the
first quarter of 2001, compared with $33.3 million during the
same period in 2000. These increases were attributable to the
higher costs associated with administering a larger Receivable
and Lease portfolio. Depreciation of equipment on operating
leases increased $10.7 million to $62.7 million in the first
quarter of 2001, compared to $52.0 million for the same period
in 2000, as a result of the increase in equipment on operating
leases held.
During the first quarter of 2001, the provision for credit
losses totaled $7.6 million, compared with $8.4 million in the
same period last year. Despite the higher write-offs, the
reduction in the provision for credit losses was primarily due
to lower growth of the portfolio for the quarter, compared to
the same period last year. The annualized provision for credit
losses, as a percent of the total average portfolio held, was
.36 percent for the first quarter of 2001, compared with .47
percent for the same period last year.
Page 7
Receivable and Lease acquisition volumes were as follows (in
millions of dollars):
Three Months
Ended January 31,
2001 2000 $ Chng % Chng
---------------------------------
Retail notes:
Agricultural equipment $ 615 $ 670 $ (55) (8)%
Construction equipment 167 133 34 26
Lawn and grounds care
equipment 43 45 (2) (4)
Recreational products 88 72 16 22
---------------------------------
Total 913 920 (7) (1)
---------------------------------
Wholesale notes 239 352 (113) (32)
Revolving charge accounts 354 324 30 9
Operating loans 243 96 147 153
Financing leases 34 31 3 10
Equipment on operating leases 90 165 (75) (45)
---------------------------------
Total $ 1,873 $ 1,888 $ (15) (1)
=================================
Receivable and Lease volumes decreased by $15 million for the
first three months of 2001, compared to the first three months
of 2000 primarily because the Company discontinued offering
wholesale note financing for manufactured housing and
recreational vehicle dealer inventory. The decrease was
partially offset by an increase in operating note volumes.
Retail note volumes decreased when compared to the first quarter
of 2000, primarily because of a decrease in United States
agricultural equipment retail note volumes. Operating lease
volumes decreased when compared to the same period one year ago,
primarily due to a decrease in agricultural operating lease
volumes. Operating loan volumes increased compared to the same
period last year, due to the increased demand for operating
loans by agricultural customers.
Total Receivables and Leases held were as follows (in millions
of dollars):
January 31, October 31, January 31,
2001 2000 2000
-----------------------------------
Retail notes:
Agricultural equipment $ 2,545 $ 2,983 $ 2,676
Construction equipment 1,043 1,000 671
Lawn and grounds care
equipment 463 465 349
Recreational products 125 140 150
-----------------------------------
Total 4,176 4,588 3,846
-----------------------------------
Wholesale notes 847 937 945
Revolving charge accounts 573 689 552
Operating loans 385 422 222
Financing leases 449 456 430
Equipment on operating leases 1,483 1,517 1,337
-----------------------------------
Total $ 7,913 $ 8,609 $ 7,332
Page 8
Receivables and Leases administered by the Company were as
follows in (millions of dollars):
Jan 31, Oct 31, Jan 31,
2001 2000 2000
---------------------------------
Receivables and Leases
administered:
Owned by the Company $ 7,913 $ 8,609 $ 7,332
Sold and Serviced -
with limited recourse* 2,301 1,867 1,949
Sold and Serviced - without
recourse** 90 91 111
Serviced - without
recourse*** 20 24 38
---------------------------------
Total Receivables and
Leases administered $10,324 $10,591 $ 9,430
* The Company's maximum exposure under all Receivable and
Lease recourse provisions at January 31, 2001, October 31, 2000
and January 31, 2000 was $172 million, $168 million and $155
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 three retail
note sales. At January 31, 2001, October 31, 2000 and January
31, 2000, the maximum exposure under these agreements was
approximately $8 million, $6 million and $7 million,
respectively.
** These Receivables and Leases represent a portfolio of
recreational product retail notes which the Company continues
to administer for a fee until the servicing rights are assumed
by their owners.
*** On February 1, 1999, the Company began servicing a
receivable portfolio on behalf of Farming and Agricultural
Financing Limited. These servicing rights were obtained in
conjunction with the Company's acquisition of the remaining 50
percent interest in John Deere Credit Limited.
Total Receivable and Lease amounts 60 days or more past due, by
product and as a percent of total balances held, were as
follows (in millions of dollars):
January 31, October 31, January 31,
2001 2000 2000
$ % $ % $ %
------------------------------------
Retail notes:
Agricultural equipment $11.2 .44% $ 8.9 .30% $10.7 .40%
Construction equipment 4.7 .45 4.5 .45 2.1 .31
Lawn and grounds care
equipment 1.0 .22 .9 .19 .9 .26
Recreational products .1 .08 .1 .07 .2 .13
------------------------------------
Total 17.0 .41 14.4 .31 13.9 .36
------------------------------------
Wholesale notes 6.0 .71 3.0 .32 1.6 .17
Revolving charge accounts 12.1 2.11 9.3 1.35 10.6 1.92
Operating loans 1.6 .42 .7 .17 .1 .05
Leases 6.7 .35 5.5 .28 5.2 .29
------------------------------------
Total $43.4 .55 $32.9 .38 $31.4 .43
====================================
The balance of retail notes held (principal plus accrued
interest) with any installment 60 days or more past due was $86
million, $68 million and $51 million at January 31, 2001,
October 31, 2000 and January 31, 2000, respectively. The
balance of retail notes held on which any installment is 60
days or more past due as a percent of retail notes held
represented 2.06, 1.48 and 1.33 percent of the ending retail
notes receivable at January 31, 2001, October 31, 2000 and
January 31, 2000, respectively.
Page 9
During the first quarter of 2001, write-offs (net of
recoveries) of Receivables and Leases totaled $9.8 million,
compared with $6.4 million in the same period last year.
Annualized write-offs as a percent of the average total
Receivables and Leases held were .47 percent for the first
quarter of 2001, compared with .35 percent for the same period
last year. Write-offs relating to retail notes increased $2.1
million in the first three months of 2001, when compared with
the first three months of 2000, primarily due to increased
write-offs of construction equipment retail notes. Lease write-
offs increased $0.8 million in the first three months of 2001
when compared to last year, primarily due to higher write-offs
on construction leases. Revolving charge account and operating
loan write-offs were unchanged in the first three months of
2001 when compared to the same period last year. Wholesale note
write-offs increased $0.4 million in the first three months of
2001 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 $134 million at January 31,
2001, compared with $133 million at October 31, 2000 and $124
million at January 31, 2000.
The Company's allowance for credit losses on all Receivables
and Leases held totaled $88 million at January 31, 2001, $93
million at October 31, 2000 and $84 million at January 31,
2000. The allowance for credit losses represented 1.11 percent
of the total Receivables and Leases held at January 31, 2001,
1.08 percent at October 31, 2000 and 1.15 percent at January
31, 2000. The allowance is subject to an ongoing evaluation
based on loss experience. The Company believes the allowance is
sufficient to provide for losses in its existing Receivable and
Lease portfolio.
Safe Harbor Statement
Statements herein that relate to future operating periods are
subject to important risks and uncertainties that could cause
actual results to differ materially. Interest rate changes by
the Federal Reserve Board may affect the cost of financing the
Company and the rates it is able to offer. In addition, the
Company's business is closely related to John Deere's business.
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-Q and other Deere & Company 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 Receivables and Leases. 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 receivables and
leases 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.
Page 10
The Company's business is somewhat seasonal, with overall
acquisition volumes of Receivables and Leases traditionally
higher in the second half of the 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 year.
During the first three months of 2001, the aggregate net cash
provided by operating and investing activities was primarily
used to decrease borrowings. Net cash provided by operating
activities was $118 million in the first three months of 2001.
Investing activities provided $722 million in the first three
months of 2001, primarily due to Receivable and Lease sales
providing $913 million, which was partially offset by
Receivable and Lease acquisitions exceeding collections by $312
million. Financing activities used $841 million during the same
period, resulting primarily from a decrease in total
borrowings. Cash and cash equivalents decreased $1 million
during the first three months of 2001. See "Statement of
Consolidated Cash Flows."
During the first three months of 2000, the aggregate net cash
provided by operating and financing activities was primarily
used to acquire 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 $261 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.
Total interest-bearing indebtedness amounted to $6,742 million
at January 31, 2001, compared with $7,330 million at October
31, 2000 and $6,136 million at January 31, 2000, generally
corresponding with the level of Receivables and Leases financed
and the level of cash and cash equivalents. Total short-term
indebtedness amounted to $3,464 million at January 31, 2001,
compared with $4,743 million at October 31, 2000 and $4,051
million at January 31, 2000, while total long-term indebtedness
amounted to $3,278 million, $2,587 million and $2,085 million
these dates, respectively. The ratio of total interest-bearing
debt to stockholder's equity was 5.9 to 1, 6.6 to 1 and 6.0 to
1 at January 31, 2001, October 31, 2000 and January 31, 2000,
respectively.
During the first three months of 2001, the Company retired $200
million of 5.85% long-term notes due in 2001. During the same
quarter, the Capital Corporation's subsidiary, John Deere
Credit Limited in Gloucester, England, retired $24 million of
long-term debt. The Capital Corporation issued $1,400 million
and retired $300 million of medium-term notes during the first
three months of 2001.
At January 31, 2001, the Capital Corporation and Deere &
Company jointly maintained $4,703 million of unsecured lines of
credit with various banks in North America and overseas, $1,422
million of which were 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 and Deere & Company,
were considered to constitute utilization. These agreements
include a $2,338 million 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.
Page 11
Item 3. Quantitative and Qualitative Disclosures About Market
Risk.
See the information under "Management's Discussion and
Analysis," Note 14 "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.
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 21, 2000
(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 7, 2001
By: /s/ NATHAN J. JONES
------------------------
Nathan J. Jones
Senior Vice President and
Principal Financial Officer
Page 13
INDEX TO EXHIBITS
Exhibit
(4.1) Five-Year Credit Agreement among registrant, Deere &
Company, various financial institutions, The Chase
Manhattan Bank, as administrative agent, Bank of America,
N.A. and Bank One, NA as documentation agents, and
Deutsche Bank AG, New York Branch as syndication agent,
et al, dated as of February 20, 2000. (Exhibit 4.1 to
Form 10-Q of Deere & Company for the quarter ended
January 31, 2001, Securities and Exchange Commission file
number 1-4121*)
(4.2) 364-Day Credit Agreement among registrant, Deere &
Company, various financial institutions, The Chase
Manhattan Bank, as administrative agent, Bank of America,
N.A. and Bank One, NA as documentation agents, and
Deutsche Bank AG, New York Branch as syndication agent,
et al, dated as of February 20, 2000. (Exhibit 4.2 to
Form 10-Q of Deere & Company for the quarter ended
January 31, 2001, Securities and Exchange Commission file
number 1-4121*)
(12) Computation of ratio of earnings to fixed charges
(99) Part I of Deere & Company Form 10-Q for the quarter
ended January 31, 2001 ---(Securities and Exchange
Commission file number 1-4121*)
__________________________
*Incorporated by reference. Copies of these exhibits are
available from the Company upon request.