================================================================= 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 April 30, 1998 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: (702) 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 April 30, 1998, 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. ================================================================= Index to Exhibits: Page 13 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 Six Months Ended Ended April 30, April 30, ------------------------------ 1998 1997 1998 1997 Revenues ------ ------ ------ ------ Finance income earned on retail notes $107.2 $103.4 $211.6 $195.6 Revolving charge account income 24.6 22.6 49.9 44.6 Lease revenues 44.8 27.7 84.5 50.4 Finance income earned on wholesale notes 14.4 11.9 28.3 23.7 Net gain on retail notes sold 10.5 1.1 12.6 1.8 Interest income from short-term investments 2.4 2.4 5.0 5.0 Securitization and servicing fee income 6.6 7.2 14.4 17.6 Other income 3.0 2.8 5.4 3.9 - ---------------------------------------------------------------- Total revenues 213.5 179.1 411.7 342.6 - ---------------------------------------------------------------- Expenses Interest expense 91.1 78.6 179.4 150.1 Operating expenses: Administrative and operating expenses 28.5 26.0 55.0 48.7 Provision for credit losses 15.2 9.7 24.5 16.2 Fees paid to Deere & Company 2.7 2.2 5.9 4.4 Depreciation of equipment on operating leases 25.4 17.5 48.8 31.8 - ---------------------------------------------------------------- Total operating expenses 71.8 55.4 134.2 101.1 - ---------------------------------------------------------------- Total expenses 162.9 134.0 313.6 251.2 - ---------------------------------------------------------------- Income of consolidated group before income taxes 50.6 45.1 98.1 91.4 Provision for income taxes 17.9 15.8 34.6 31.9 - ---------------------------------------------------------------- Income of consolidated group 32.7 29.3 63.5 59.5 Equity in income (loss) of unconsolidated affiliates .2 (.3) --- (.8) - ---------------------------------------------------------------- Net income 32.9 29.0 63.5 58.7 Cash dividends declared (12.5) (20.0) (25.0) (40.0) Retained earnings at beginning of period 723.3 654.1 705.2 644.4 - ---------------------------------------------------------------- Retained earnings at end of period $743.7 $663.1 $743.7 $663.1 ================================================================ See Notes to Interim Financial Statements. Page 2 John Deere Capital Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in millions) April 30, October 31, April 30, 1998 1997 1997 Assets -------- -------- -------- Cash and cash equivalents $ 188.6 $ 204.4 $ 167.9 Receivables and leases: Retail notes 4,671.1 4,349.4 4,605.5 Wholesale notes 669.7 593.4 522.3 Revolving charge accounts 627.0 618.5 510.9 Financing leases 218.1 214.6 194.0 ----------------------------------------------------------------- Total receivables 6,185.9 5,775.9 5,832.7 Equipment on operating leases -- net 712.2 527.2 402.6 - ----------------------------------------------------------------- Total receivables and leases 6,898.1 6,303.1 6,235.3 Allowance for credit losses (85.7) (85.9) (89.2) - ----------------------------------------------------------------- Total receivables and leases -- net 6,812.4 6,217.2 6,146.1 - ----------------------------------------------------------------- Other receivables 133.6 157.9 126.1 Investment in unconsolidated affiliates 17.5 12.8 5.4 Other assets 73.3 66.8 75.4 - ----------------------------------------------------------------- Total Assets $7,225.4 $6,659.1 $6,520.9 ================================================================= Liabilities and Stockholder's Equity Short-term borrowings: Commercial paper $2,131.7 $1,991.9 $2,259.4 Deere & Company 229.5 349.9 57.7 Current maturities of long-term borrowings 1,632.5 1,042.5 1,143.7 Other notes payable 5.2 2.4 --- - ----------------------------------------------------------------- Total short-term borrowings 3,998.9 3,386.7 3,460.8 - ----------------------------------------------------------------- Accounts payable and accrued liabilities: Accrued interest on senior debt 41.0 39.2 36.1 Other payables 220.2 188.3 167.4 - ----------------------------------------------------------------- Total accounts payable and accrued liabilities 261.2 227.5 203.5 - ----------------------------------------------------------------- Deposits withheld from dealers and merchants 143.9 144.2 131.2 - ----------------------------------------------------------------- Long-term borrowings: Senior debt 1,815.2 1,782.9 1,799.6 Subordinated debt 150.0 300.0 150.0 - ----------------------------------------------------------------- Total long-term borrowings 1,965.2 2,082.9 1,949.6 - ----------------------------------------------------------------- Total liabilities 6,369.2 5,841.3 5,745.1 - ----------------------------------------------------------------- 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 743.7 705.2 663.1 Cumulative translation adjustment (.3) (.2) (.1) - ----------------------------------------------------------------- Total stockholder's equity 856.2 817.8 775.8 - ----------------------------------------------------------------- Total Liabilities and Stockholder's Equity $7,225.4 $6,659.1 $6,520.9 ================================================================= See Notes to Interim Financial Statements. Page 3 John Deere Capital Corporation and Subsidiaries Statements of Consolidated Cash Flows (Unaudited) (in millions) Six Months Ended April 30, -------------------------- 1998 1997 -------------------------- Cash Flows from Operating Activities: Net income $ 63.5 $ 58.7 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 24.5 16.2 Provision for depreciation 50.3 31.7 Equity in loss of unconsolidated affiliates --- .8 Other 2.1 (.3) - ----------------------------------------------------------------- Net cash provided by operating activities 140.4 107.1 - ----------------------------------------------------------------- Cash Flows from Investing Activities: Cost of receivables and leases acquired (3,591.0) (3,203.6) Collections of receivables 2,679.5 2,555.4 Proceeds from sales of receivables 243.4 29.1 Other 45.2 33.4 - ----------------------------------------------------------------- Net cash used for investing activities (622.9) (585.7) - ----------------------------------------------------------------- Cash Flows from Financing Activities: Increase in commercial paper 139.8 569.5 Change in receivable/payable with Deere & Company (124.4) (481.5) Change in other notes payable 2.8 --- Proceeds from issuance of long-term borrowings 781.0 455.0 Principal payments on long-term borrowings (307.5) (27.5) Dividends paid (25.0) (40.0) - ----------------------------------------------------------------- Net cash provided by financing activities 466.7 475.5 - ----------------------------------------------------------------- Net decrease in cash and cash equivalents (15.8) (3.1) Cash and cash equivalents at the beginning of period 204.4 171.0 - ----------------------------------------------------------------- Cash and cash equivalents at the end of period $ 188.6 $ 167.9 ================================================================= 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 (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. (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 and marine product mortgage service companies (recreational product retail notes). The Company also leases equipment to retail customers, finances and services revolving charge accounts acquired from and offered through merchants in the agricultural, construction, lawn and grounds care and yacht markets (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, direct 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 to fixed charges was 1.55 to 1 for the second quarter of 1998 compared with 1.57 to 1 for the second quarter of 1997. The consolidated ratio of earnings to fixed charges was 1.54 to 1 for the first six months of 1998 and 1.60 to 1 for the first six months of 1997. "Earnings" 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. (4) Beginning in September 1997, certain notes from dealers for the financing of "purchase for rental equipment" were considered wholesale notes. Prior to that time, such notes were considered retail notes. During the first six months of 1998, $92 million of these wholesale notes were acquired. Prior period volumes and ending balances have not been adjusted to reflect this change in policy. Page 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Net income was $32.9 million for the second quarter of 1998 and $63.5 million for the first six months of 1998 compared with $29.0 million and $58.7 million for the same periods last year. The 1998 second quarter and year-to-date results benefited from gains of $10.3 million on sales of recreational vehicle retail notes and higher income from a 12 percent increase in the average balance of receivables and leases financed during the first six months. These results were partially offset by narrower financing spreads, higher write-offs of receivables and higher operating expenses. Revenues totaled $213.5 million and $411.7 million for the second quarter and for the first six months of 1998 compared to $179.1 million and $342.6 million for the same periods a year ago. In addition to gains on sales of receivables, revenues increased due to continued growth in operating leases, retail notes on John Deere equipment, wholesale notes and revolving charge accounts. Lease revenues increased $34.1 million, to $84.5 million in the first six months of 1998, from $50.4 million in the first six months of 1997, largely due to a number of leasing incentives related to John Deere agricultural and construction equipment. Finance income earned on retail notes increased $16 million to $211.6 million for the first six months of 1998 from $195.6 million earned in the first six months of 1997. This increase was primarily due to a larger average retail installment portfolio financed. Increases in wholesale note revenues were the result of increased activity for John Deere agricultural, construction, and lawn and grounds care equipment owned by dealers as well as a larger yacht wholesale portfolio (see note 4 to the consolidated financial statements for additional information). Revolving charge accounts continue to benefit from strong demand for agricultural operating loans and Farm Plan financing. In March 1998, the Company sold approximately $210 million in recreational vehicle retail notes, without recourse, to unrelated third parties. These transactions resulted in gains on notes sold of $10.3 million. The Company continues to offer retail installment financing on recreational vehicles. Total interest expense for the second quarter increased from $78.6 million in 1997 to $91.1 million in 1998. Interest expense increased from $150.1 million for the first six months of 1997 to $179.4 million for the first six months of 1998. The increase in interest expense was the result of higher average borrowing costs and increased borrowings required to finance the larger average portfolio of Receivables and Leases. Total average borrowings during the first six months of 1998 were $5.667 billion, compared to $5.150 billion in the first six months of 1997. Administrative and operating expenses were $28.5 million in the second quarter of 1998 and $55.0 million for the first six months of 1998, compared with $26.0 million and $48.7 million for the same periods in 1997. This increase was the result of higher employment costs associated with administering a larger Receivable and Lease portfolio. Depreciation of equipment on operating leases increased to $25.4 million in the second quarter of 1998 and $48.8 million for the first six months of 1998, compared to $17.5 million in the second quarter of 1997 and $31.8 million for the first six months of 1997. During the second quarter and the first six months of 1998, the provision for credit losses totaled $15.2 million and $24.5 million, respectively, compared with $9.7 million and $16.2 million in the same periods last year. The increase in the provision for credit losses was primarily the result of increases in agricultural and construction retail note write-offs in 1998. The annualized provision for credit losses, as a percentage of the total average portfolio outstanding, was .90 percent for the second quarter of 1998 and .74 percent for the first six months of 1998, compared with .65 percent and .57 percent for the same periods last year. Page 6 Receivable and Lease acquisition volumes were as follows (dollars in millions): Three Months Ended April 30, ---------------- 1998 1997 $ Chng % Chng ------------------------------------- Retail note volumes: Agricultural equipment $ 607 $ 610 $ (3) --% Construction equipment 109 85 24 28 Lawn and grounds care equipment 46 35 11 31 Recreational products 100 146 (46) (32) --------------------------- Total retail note volumes 862 876 (14) (2) Wholesale notes 395 260 135 52 Revolving charge accounts 441 324 117 36 Financing Leases 29 30 (1) (3) Equipment on operating leases 188 109 79 72 --------------------------- Total Receivable and Lease volumes $1,915 $1,599 $ 316 20 =========================== Six Months Ended April 30, ---------------- 1998 1997 $ Chng % Chng ------------------------------------- Retail note volumes: Agricultural equipment $1,445 $1,449 $ (4) --% Construction equipment 206 185 21 11 Lawn and grounds care equipment 67 58 9 16 Recreational products 165 210 (45) (21) --------------------------- Total retail note volumes 1,883 1,902 (19) (1) Wholesale notes 674 512 162 32 Revolving charge accounts 697 556 141 25 Financing Leases 52 53 (1) (1) Equipment on operating leases 284 181 103 57 --------------------------- Total Receivable and Lease volumes $ 3,590 $ 3,204 $ 386 12 ============================ Total Receivables and Leases owned were as follows (in millions): April 30, October 31, April 30, 1998 1997 1997 ------------------------------- Retail notes owned: Agricultural equipment $ 3,039 $ 2,556 $ 2,870 Construction equipment 677 660 639 Lawn and grounds care equipment 220 216 185 Recreational products 735 917 911 ------------------------------ Total retail notes held 4,671 4,349 4,605 Wholesale notes 670 593 522 Revolving charge accounts 627 619 511 Financing leases 218 215 194 Equipment on operating leases 712 527 403 ------------------------------ Total Receivables and Leases owned $ 6,898 $ 6,303 $ 6,235 ============================== Page 7 For the second quarter and first six months of 1998, agricultural retail note volumes remained relatively stable when compared to the same periods in 1997. Construction and lawn and grounds care retail notes increased in both periods in 1998 over 1997. Recreational product retail note volumes declined in both the second quarter and the first six months of 1998, due to a decrease in yacht retail note volumes when compared to last year. During the second quarter of 1997, the Company purchased $17 million of yacht retail notes from a third party. Revolving charge accounts increased significantly in the second quarter and first six months of 1998 primarily due to increases in agricultural operating loans and Farm Plan volumes, when compared to 1997. Wholesale notes also increased due to higher agricultural dealer purchase-for-rental volumes and yacht wholesale activity. Operating lease volumes continued to increase significantly over last year due to agricultural low- rate and guaranteed residual value leasing programs sponsored by the Company or John Deere. Receivables and Leases administered by the Company, which include retail notes previously sold, were as follows (in millions): April 30, October 31, April 30, 1998 1997 1997 --------------------------------- Receivables and Leases administered: Receivables and Leases owned by the Company $ 6,898 $ 6,303 $ 6,235 Retail notes sold and securitized (with recourse)* 782 1,314 720 Retail notes sold (without recourse) 196 --- --- --------------------------------- Total Receivables and Leases administered $ 7,876 $ 7,617 $ 6,955 ================================= * The Company's estimated maximum exposure under all retail note recourse provisions at April 30, 1998 was $150 million. Additional sales of retail notes are expected in the future. Total Receivable and Lease amounts 60 days or more past due, by product and as a percentage of total balances held were as follows (dollars in millions): April 30, October 31, April 30, 1998 1997 1997 ----------------------------------------- Dollars % Dollars % Dollars % ----------------------------------------- Retail notes: Agricultural equipment $ 10.0 .33% $ 6.8 .27% $ 9.6 .33% Construction equipment 2.4 .36 2.0 .31 2.1 .33 Lawn and grounds care equipment .7 .31 .6 .28 .8 .41 Recreational products .1 .02 .3 .03 .1 .02 ----- ----- ----- Total retail notes 13.2 .28 9.7 .22 12.6 .27 Wholesale notes 2.3 .34 2.0 .33 1.6 .31 Revolving charge accounts 8.8 1.41 8.3 1.34 9.9 1.98 Leases 4.1 .44 2.0 .27 3.2 .53 ----- ----- ----- Total Receivables and Leases $28.4 .41 $22.0 .35 $27.3 .44 ===== ===== ===== Page 8 The balance of retail notes owned (principal plus accrued interest) with any installment 60 days or more past due was $57.2 million, $44.4 million and $57.6 million at April 30, 1998, October 31, 1997 and April 30, 1997, respectively. The balance of retail notes held on which any installment is 60 days or more past due as a percentage of ending retail notes receivable was 1.23 percent, 1.02 percent and 1.25 percent at April 30, 1998, October 31, 1997 and April 30, 1997, respectively. During the second quarter and the first six months of 1998, write-offs (net of recoveries) of Receivables and Leases totaled $11.6 million and $18.8 million, respectively, compared with $8.9 million and $14.4 million in the same periods last year. Annualized write-offs, as a percentage of the total average portfolio outstanding, were .69 percent for the second quarter of 1998 and .57 percent for the first six months of 1998, compared with .60 percent and .50 percent for the same periods last year. Write-offs relating to retail notes increased 30 percent, or $2.3 million, in the first six months of 1998, when compared with the first six months of 1997, primarily due to increased write-offs of agricultural and construction equipment retail notes. Revolving charge account write-offs in 1998 remain relatively stable when compared to last year, while recreational product retail note write-offs declined. Deposits withheld from dealers and merchants, representing mainly withholding accounts from individual John Deere dealers to which losses from retail notes and leases can be charged, amounted to $143.9 million at April 30, 1998, compared with $144.2 million at October 31, 1997 and $131.2 million at April 30, 1997. The Company's allowance for credit losses on all Receivables and Leases totaled $85.7 million at April 30, 1998, $85.9 million at October 31, 1997 and $89.2 million at April 30, 1997. Allowance for credit losses represented 1.24 percent of the unpaid balance of Receivables and Leases financed at April 30, 1998, 1.36 percent at October 31, 1997, and 1.43 percent at April 30, 1997. The Company's allowance for credit losses, as a percentage of total Receivables and Leases, has declined during the last twelve months due to an ongoing reevaluation of loss experience and related adjustments to ensure that the allowance is maintained at an adequate level. 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 as described below. 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. Asset-liability risk is also actively managed to minimize exposure to interest rate fluctuations. Total interest-bearing indebtedness amounted to $5.963 billion at April 30, 1998, compared with $5.470 billion at October 31, 1997 and $5.411 billion at April 30, 1997, generally corresponding with the level of Receivables and Leases financed. Total short- term indebtedness amounted to $3.998 billion at April 30, 1998, compared with $3.387 billion at October 31, 1997 and $3.461 billion at April 30, 1997. Total long-term indebtedness amounted to $1.965 billion, $2.083 billion and $1.950 billion at April 30 1998, October 31, 1997 and April 30, 1997, respectively. The ratio of total interest-bearing debt to stockholder's equity was 7.0 to 1, 6.7 to 1 and 7.0 to 1 at April 30, 1998, October 31, 1997 and April 30, 1997, respectively. During the first six months of 1998, the Capital Corporation issued $200 million of 5.85% Notes due in 2001, and retired $150 million of floating- rate notes due in 1998. The Capital Corporation also issued $581 million and retired $157.5 million of medium-term notes during the same period. At April 30, 1998, the Capital Corporation, Deere & Company, John Deere Limited (Canada) and John Deere Credit Inc. (Canada), jointly, maintained $5.015 billion of unsecured lines of credit with various banks in North America and overseas, $717 million of which was unused. For the purpose of computing unused credit lines, total short-term 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. Included in the total credit lines is a long-term credit agreement for $3.500 billion. An annual facility fee on the credit agreement is charged to the Capital Corporation based on utilization. Page 9 The Company's business is somewhat seasonal, with overall acquisitions 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 half of the fiscal year. During the first six months of 1998, 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 $140 million in the first six months of 1998. Financing activities provided $467 million during the same period, resulting from a $492 million net increase in total borrowings, which was offset by $25 million in dividend payments to John Deere Credit Company. Net cash used for investing activities totaled $623 million in 1998, primarily due to Receivable and Lease acquisitions exceeding collections and sales of receivables by $668 million. Cash and cash equivalents decreased $16 million during the first six months of 1998. During the first six months of 1997, 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 $107 million in the first six months of 1997. Financing activities provided $476 million during the same period, resulting from a $516 million net increase in total borrowings, which was offset by $40 million in dividend payments to John Deere Credit Company. Net cash used for investing activities totaled $586 million in 1997, primarily due to Receivable and Lease acquisitions exceeding collections by $648 million. Cash and cash equivalents decreased $3 million during the first six months of 1997. The Capital Corporation paid a cash dividend to John Deere Credit Company of $12.5 million in each of the first two quarters of 1998. John Deere Credit Company paid comparable dividends to Deere & Company. On May 29, 1998, the Capital Corporation declared a cash dividend of $12.5 million to John Deere Credit Company, which, in turn, declared a cash dividend of $12.5 million to Deere & Company, each payable on June 9, 1998. Item 3. Quantitative and Qualitative Disclosures About Market Risk. See the information under "Management's Discussion and Analysis," Note 12 "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 10 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 February 17, 1998 (items 5 and 7). Page 11 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: June 8, 1998 By: /s/ N. J. Jones -------------------------- N. J. Jones Senior Vice President (Principal Financial Officer) Page 12 INDEX TO EXHIBITS Exhibit - ------- (4.1) Amended and restated credit agreements among Deere & Company, the registrant, various financial institutions and The Chase Manhattan Bank, Bank of America National Trust and Savings Association, Deutsche Bank AG New York Branch, The Toronto-Dominion Bank, Morgan Guaranty Trust Company of New York, Nationsbank, N.A. and The First National Bank of Chicago as Managing Agents, dated as of February 24, 1998 (Exhibit 4.1 to Form 10-Q of Deere & Company for the quarter ended April 30, 1998, Securities and Exchange Commission file number 1-4121*). (4.2) Third Amending Agreements to Loan Agreements among John Deere Limited, John Deere Credit Inc., various financial institutions and The Toronto- Dominion Bank as agent, dated as of February 24, 1998 (Exhibit 4.2 to Form 10-Q of Deere & Company for the quarter ended April 30, 1998, Securities and Exchange Commission file number 1-4121*). (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 April 30, 1998 (Securities and Exchange Commission file number 1-4121*). - ------------------------------ * Incorporated by reference. Copies of these exhibits are available from the Company upon request. Page 13