-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pmh9wgR751iPNyABWHy7cbqb9tFLwdoDNTEfEzvKusOedG061YFFulErS1QjE+ut DDKruJpuLUz3KaRZBMnFmw== 0000027673-97-000013.txt : 19970508 0000027673-97-000013.hdr.sgml : 19970508 ACCESSION NUMBER: 0000027673-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970307 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEERE JOHN CAPITAL CORP CENTRAL INDEX KEY: 0000027673 STANDARD INDUSTRIAL CLASSIFICATION: 6153 IRS NUMBER: 362386361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06458 FILM NUMBER: 97552967 BUSINESS ADDRESS: STREET 1: FIRST INTERSTATE BANK BLDG STREET 2: 1 E FIRST ST STE 600 CITY: RENO STATE: NV ZIP: 89501 BUSINESS PHONE: 7027865527 MAIL ADDRESS: STREET 1: JOHN DEERE RD CITY: MOLINE STATE: IL ZIP: 61265 FORMER COMPANY: FORMER CONFORMED NAME: DEERE JOHN CREDIT CO DATE OF NAME CHANGE: 19890130 10-Q 1 ---------------------------------------------------------- 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, 1997 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 January 31, 1997, 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. - - ----------------------------------------------------------------- Page 1 of 15 Pages 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 Ended January 31 1997 1996 Revenues Finance income earned on retail notes $ 92.2 $ 92.1 Revolving charge account income 22.0 21.5 Lease revenues 22.7 12.7 Finance income earned on wholesale notes 11.8 7.6 Net gain on retail notes sold .7 .3 Interest income from short-term investments 2.6 2.8 Securitization and servicing fee income 10.4 11.4 Other income 1.1 2.3 Total revenues 163.5 150.7 Expenses Interest expense: On obligations to others 70.8 64.9 On notes payable to Deere & Company .7 1.4 Total interest expense 71.5 66.3 Operating expenses: Administrative and operating expenses 22.7 20.3 Provision for credit losses 6.5 5.9 Fees paid to Deere & Company 2.2 1.9 Depreciation of equipment on operating leases 14.3 6.6 Total operating expenses 45.7 34.7 Total expenses 117.2 101.0 Income of consolidated group before income taxes 46.3 49.7 Provision for income taxes 16.1 17.4 Income of consolidated group 30.2 32.3 Equity in loss of unconsolidated affiliate (.5) --- Net income 29.7 32.3 Cash dividends declared (20.0) (20.0) Retained earnings at beginning of the period 644.4 580.3 Retained earnings at end of the period $ 654.1 $ 592.6 See Notes to Interim Financial Statements. John Deere Capital Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in millions) Jan 31 Oct 31 Jan 31 1997 1996 1996 Assets Cash and cash equivalents $ 173.9 $ 171.0 $ 128.4 Receivables and leases: Retail notes 4,347.9 4,075.9 4,023.5 Revolving charge accounts 472.7 564.8 443.8 Financing leases 192.4 181.5 149.3 Wholesale notes 538.4 524.5 321.5 Total receivables 5,551.4 5,346.7 4,938.1 Equipment on operating leases-net 325.1 276.8 151.3 Total receivables and leases 5,876.5 5,623.5 5,089.4 Allowance for credit losses (88.5) (87.4) (84.3) Total receivables and leases-net 5,788.0 5,536.1 5,005.1 Other receivables 185.2 189.9 180.3 Investment in unconsolidated affiliate 5.7 6.3 --- Other assets 68.1 67.8 66.9 Total Assets $6,220.9 $5,971.1 $5,380.7 Liabilities and Stockholder's Equity Short-term borrowings: Commercial paper $2,125.1 $1,689.9 $2,423.3 Deere & Company 168.5 544.8 118.9 Current maturities of long-term borrowings 955.3 863.7 296.0 Total short-term borrowings 3,248.9 3,098.4 2,838.2 Accounts payable and accrued liabilities: Accrued interest on senior debt 49.2 35.9 35.7 Other payables 174.9 144.8 156.1 Total accounts payable and accrued liabilities 224.1 180.7 191.8 Deposits withheld from dealers and merchants 128.1 135.4 122.3 Long-term borrowings: Senior debt 1,703.0 1,649.5 1,223.0 Subordinated debt 150.0 150.0 300.0 Total long-term borrowings 1,853.0 1,799.5 1,523.0 Total liabilities 5,454.1 5,214.0 4,675.3 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 654.1 644.4 592.6 Cumulative translation adjustment (0.1) (0.1) --- Total stockholder's equity 766.8 757.1 705.4 Total Liabilities and Stockholder's Equity $6,220.9 $5,971.1 $5,380.7 See Notes to Interim Financial Statements. John Deere Capital Corporation and Subsidiaries Statements of Consolidated Cash Flows (Unaudited) (in millions) Three Months Ended January 31 1997 1996 Cash Flows from Operating Activities: Net income $ 29.7 $ 32.3 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 6.5 5.9 Provision for depreciation 14.2 7.0 Equity in loss of unconsolidated affiliate .5 --- Other (2.6) (15.0) Net cash provided by operating activities 48.3 30.2 Cash Flows from Investing Activities: Cost of receivables and leases acquired (1,604.4) (1,241.7) Collections of receivables 1,323.3 1,047.9 Proceeds from sales of receivables 2.3 2.9 Other 49.5 47.5 Net cash used for investing activities (229.3) (143.4) Cash Flows from Financing Activities: Increase in commercial paper 435.2 436.6 Change in receivable/payable with Deere & Company (376.3) (341.3) Proceeds from issuance of long-term borrowings 145.0 50.0 Principal payments on long-term borrowings --- (48.0) Dividends paid (20.0) (20.0) Net cash provided by financing activities 183.9 77.3 Net increase (decrease) in cash and cash equivalents 2.9 (35.9) Cash and cash equivalents at the beginning of period 171.0 164.3 Cash and cash equivalents at the end of period $ 173.9 $ 128.4 See Notes to Interim Financial Statements. 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, Deere Credit, Inc., Deere Credit Services, Inc., Farm Plan Corporation, John Deere Receivables, Inc., John Deere Funding Corporation and Arrendadora John Deere, S.A. de C.V. (collectively referred to as 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. (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, industrial 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). These retail notes are acquired by John Deere through independent John Deere retail dealers. The Company also purchases and finances certain agricultural, industrial and lawn and grounds care retail notes unrelated to John Deere, primarily used equipment accepted by dealers in trade. 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, lawn and grounds care and recreational product retail markets (revolving charge accounts), and provides wholesale financing for inventories of recreational vehicles, manufactured housing units, yachts, John Deere engines, John Deere industrial equipment and the Sabre line of 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 consolidated ratio of earnings to fixed charges was 1.64 to 1 for the first quarter of 1997 compared with 1.74 to 1 for the first quarter of 1996. "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) 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 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. (5) In the first quarter of 1997, the Company adopted the Financial Accounting Standards Board (FASB) Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of. This Statement requires that long- lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future cash flows from the use of the asset are less than the carrying amount, the asset must be written down to fair value. The adoption of this Statement had no effect on the Company's financial position or results of operations. In the first quarter of 1997, the Company also adopted FASB Statement No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement provides the conditions for distinguishing sales of financial assets from secured borrowings and gives the criteria for recognizing extinguishments of liabilities. The adoption of this Statement had no effect on the Company's financial position or results of operations. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Net income was $29.7 million in the first quarter of 1997 compared with $32.3 million for the same period last year. Higher income from a 15 percent increase in the average balance of Receivables and Leases financed was more than offset by lower financing spreads and higher expenditures associated with several growth initiatives. Revenues totaled $163.5 million for the first quarter ended January 31, 1997, compared to $150.7 million for the same period a year ago. Revenues increased due to a larger average portfolio financed, particularly in the wholesale note and operating lease areas. Finance income earned on wholesale notes increased $4.2 million to $11.8 million for the first quarter of 1997 from $7.6 million earned in the first quarter of 1996. The higher finance income earned on wholesale notes were primarily a result of the continued growth in the manufactured housing, industrial and yacht markets. In addition, operating lease revenues increased $10 million, to $22.7 million from $12.7 million in the first quarter of 1996, largely due to a number of low-rate leasing initiatives related to John Deere agricultural and industrial equipment. Total interest expense for the first quarter increased from $66.3 million in 1996 to $71.5 million in 1997. The increase in interest expense was the result of increased borrowings required to finance the higher average portfolio of Receivables and Leases, partially offset by lower average borrowing costs. Total average borrowings during the first quarter of 1997 were $5.015 billion, compared to $4.359 billion in the first quarter of 1996. Administrative and operating expenses increased to $22.7 million in the first quarter of 1997, compared to $20.3 million for the same period in 1996. This increase was the result of higher employment costs associated with administering a larger Receivable and Lease portfolio and certain expenses relating to several growth initiatives. These growth initiatives include an emphasis on international expansion, golf and turf financing, and continued efforts related to business finance opportunities, such as production input loans. In addition, depreciation of equipment on operating leases increased to $14.3 million in the first quarter of 1997, compared to $6.6 million for the same period in 1996, a direct reflection of the Company's increased operating lease volume. During the first quarter of 1997, the provision for credit losses totaled $6.5 million compared with $5.9 million in the same period last year, an increase of 10 percent. The increase in the Company's loss provision was due primarily to the growth in the portfolio of Receivables and Leases. The provision for credit losses, as a percentage of the total average portfolio outstanding was .48 percent for the first quarter of both 1997 and 1996. In October 1996, the Capital Corporation entered into an unconsolidated joint venture, John Deere Credit Limited (JDCL), to offer equipment financing products in the United Kingdom. Through January 31, 1997, the Capital Corporation's equity loss in JDCL was $.5 million, representing primarily fixed administrative and operating expenses associated with this new affiliate. Receivables and Leases Receivable and Lease acquisition volumes during the first quarter ended January 31, 1997 and 1996 were as follows (dollars in millions): Three Months Ended January 31 $ % 1997 1996 Change Change Retail notes volumes: Agricultural equipment $ 840 $ 640 $ 200 31% Industrial equipment 100 121 (21) (17) Lawn and grounds care equipment 23 15 8 53 Recreational products 64 58 6 10 Total retail note volumes 1,027 834 193 23 Revolving charge accounts 231 197 34 17 Wholesale notes 252 162 90 56 Leases 95 49 46 94 Total Receivable and Lease volumes $ 1,605 $ 1,242 $ 363 29 Total Receivables and Leases held at January 31, 1997, October 31, 1996 and January 31, 1996 were as follows (in millions): Jan 31 Oct 31 Jan 31 1997 1996 1996 Retail notes held: Agricultural equipment $ 2,675 $ 2,424 $ 2,446 Industrial equipment 644 629 560 Lawn and grounds care equipment 180 183 155 Recreational products 849 840 863 Total retail notes held 4,348 4,076 4,024 Revolving charge accounts 473 565 444 Wholesale notes 538 524 321 Leases 518 459 300 Total Receivables and Leases held $ 5,877 $ 5,624 $ 5,089 For the quarter ended January 31, 1997, total retail note volumes increased 23 percent over the same period in 1996. Agricultural equipment note volumes increased $200 million, or 31 percent, due primarily to a low-rate incentive program offered on certain new and used John Deere agricultural equipment. Industrial equipment retail note volumes declined $21 million, or 17 percent, when compared to volumes in the first quarter of last year. Wholesale note volumes, driven by increases in manufactured housing and industrial equipment business, increased $90 million, or 56 percent. Lease volumes increased from $49 million in the first quarter of 1996 to $95 million in the first quarter of 1997, the result of agricultural and industrial equipment low-rate and guaranteed value leasing programs sponsored by John Deere and the Company. Total revolving charge account also increased during the first quarter of 1997, when compared to 1996 volumes, due to continued strong demand. The amount of retail notes administered by the Company, which includes retail notes previously sold, totaled $5.317 billion at January 31, 1997, $5.253 billion at October 31, 1996, and $4.970 billion at January 31, 1996. At January 31, 1997, the balance of retail notes previously sold was $969 million compared with $1.177 billion at October 31, 1996 and $947 million at January 31, 1996. The Company's maximum exposure under all retail note recourse provisions at January 31, 1997 was $183 million. Total Receivables and Leases 60 days or more past due, by product and as a percentage of total balances held at January 31, 1997, October 31, 1996 and January 31, 1996, were as follows (dollars in millions): January 31, October 31, January 31, 1997 1996 1996 Dol- Per- Dol- Per- Dol- Per- lars cent lars cent lars cent Retail notes: Agricultural equipment $6.4 .24% $4.4 .18% $5.3 .22% Industrial equipment 3.0 .47 2.5 .39 1.9 .34 Lawn and grounds care equipment .9 .49 .7 .38 .7 .49 Recreational products .4 .05 .3 .03 .3 .03 Total retail notes 10.7 .25 7.9 .19 8.2 .21 Revolving charge accounts 12.0 2.57 8.9 1.58 11.0 2.48 Wholesale notes 1.8 .34 1.0 .17 .2 .06 Leases 3.0 .57 1.7 .38 1.4 .47 Total Receivables and Leases $27.5 .47 $19.5 .35 $20.8 .41 The balance of retail notes held (principal plus accrued interest) with any installment 60 days or more past due was $60.6 million, $47.2 million and $48.9 million at January 31, 1997, October 31, 1996 and January 31, 1996, respectively. 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 1.39%, 1.16% and 1.21% at January 31, 1997, October 31, 1996 and January 31, 1996, respectively. 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 $128.1 million at January 31, 1997, compared with $135.4 million at October 31, 1996 and $122.3 million at January 31, 1996. The Company's allowance for credit losses on all Receivables and Leases financed totaled $88.5 million at January 31, 1997, $87.4 million at October 31, 1996 and $84.3 million at January 31, 1996. Allowance for credit losses represented 1.51 percent of the unpaid balance of Receivables and Leases financed at January 31, 1997, 1.55 percent at October 31, 1996, and 1.66 percent at January 31, 1996. 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 insure that the allowance for credit losses is maintained at an adequate level. Management believes the allowance for credit losses at January 31, 1997, is sufficient to provide adequate protection against losses in all areas of its portfolio. 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. 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 and securitize these assets. Asset-liability risk is also actively managed to minimize exposure to interest rate fluctuations. Total interest-bearing indebtedness amounted to $5.102 billion at January 31, 1997, compared with $4.898 billion at October 31, 1996 and $4.361 billion at January 31, 1996, generally corresponding with the level of Receivables and Leases financed. Total short- term indebtedness amounted to $3.249 billion at January 31, 1997, compared with $3.098 billion at October 31, 1996 and $2.838 billion at January 31, 1996. Total long-term indebtedness amounted to $1.853 billion, $1.800 billion and $1.523 billion at January 31 1997, October 31, 1996 and January 31, 1996, respectively. The ratio of total interest-bearing debt to stockholder's equity was 6.7 to 1, 6.5 to 1 and 6.2 to 1 at January 31, 1997, October 31, 1996 and January 31, 1996, respectively. During the first quarter of 1997, the Capital Corporation also issued $145 million of medium-term notes. At January 31, 1997, the Capital Corporation, Deere & Company and John Deere Credit, Inc. (Canada), jointly, maintained $4.208 billion of unsecured lines of credit with various banks in North America and overseas, $1.428 billion of which was unused. For the purpose of computing unused credit lines, the total short-term borrowings, excluding the current portion of long-term borrowings, of the Capital Corporation, Deere & Company and John Deere Credit, Inc. (Canada), were considered to constitute utilization. Included in the total credit lines is a long-term credit agreement expiring on February 27, 2001, for $3.675 billion. An annual facility fee on the credit agreement is charged to the Capital Corporation based on utilization. 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 quarter 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 $48 million in the first quarter of 1997. Financing activities provided $184 million during the same period, resulting from a $204 million increase in total borrowings, which was offset by a $20 million dividend payment to John Deere Credit Company. Net cash used for investing activities totaled $229 million in 1997, primarily due to Receivable and Lease acquisitions exceeding collections by $281 million. Cash and cash equivalents increased $3 million during the first quarter of 1997. During the first quarter of 1996, the aggregate cash provided by operating and financing activities was used to increase Receivables and Leases. Cash provided from operating activities was $30 million during the first quarter of 1996. Financing activities provided $77 million during the first quarter of 1996, resulting from a $97 million increase in total borrowings, which was offset by a $20 million dividend payment. Cash used for investing activities totaled $143 million in the first quarter of 1996, primarily because the cost of Receivables and Leases acquired exceeded the collections. Cash and cash equivalents decreased $36 million during the first quarter of 1996. The Capital Corporation paid a cash dividend to John Deere Credit Company of $20 million in the first quarter of 1997. John Deere Credit Company paid a comparable dividend to Deere & Company. On February 28, 1997, the Capital Corporation declared a dividend of $20 million to John Deere Credit Company, which in turn, declared a dividend of $20 million to Deere & Company, each payable on March 11, 1997. PART II. OTHER INFORMATION Item 1. Legal Proceedings. See Note (4) to the Interim Financial Statements. Item 2. Changes in Securities. 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 26, 1996 (items 5 and 7). 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: 7 March 1997 By: /s/ R. W. Lane R. W. Lane Vice President (Principal Financial Officer) INDEX TO EXHIBITS Exhibit Page No. (12) Computation of ratio of earnings to fixed charges 13 (27) Financial data schedule 14 (99) Part I of Deere & Company Form 10-Q for the quarter ended January 31, 1997 (Securities and Exchange Commission file number 1-4121*). __________________________ * Incorporated by reference. Copies of these exhibits are available from the Company upon request. EX-12 2 Exhibit 12 John Deere Capital Corporation and Subsidiaries Computation of Ratio of Earnings to Fixed Charges (dollars in thousands) Three Months For the Years Ended Ended 31 January 31 October 1997 1996 1996 1995 Earnings: Income before income taxes and changes in accounting $ 46,326 $ 49,690 $206,588 $175,360 Fixed charges 72,342 66,976 276,726 240,913 Total earnings $118,668 $116,666 $483,314 $416,273 Fixed charges: Interest expense $ 71,485 $ 66,321 $273,748 $238,445 Rent expense 857 655 2,978 2,468 Total fixed charges $ 72,342 $ 66,976 $276,726 $240,913 Ratio of earnings to fixed charges * 1.64 1.74 1.75 1.73 - - ----------------------------------------------------------------- For the Years Ended 31 October 1994 1993 1992 Earnings: Income before income taxes and changes in accounting $161,809 $169,339 $142,920 Fixed charges 168,507 170,226 191,930 Total earnings $330,316 $339,565 $334,850 Fixed charges: Interest expense $166,591 $167,787 $189,288 Rent expense 1,916 2,439 2,642 Total fixed charges $168,507 $170,226 $191,930 Ratio of earnings to 1.96 1.99 1.74 fixed charges * __________ "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. * The Company has not issued preferred stock. Therefore, the ratios of earnings to combined fixed charges and preferred stock dividends are the same as the ratios presented above. EX-27 3
5 This schedule contains summary financial information extracted from Form 10-Q and is qualified in its entirety by reference to such financial information. 0000027673 JOHNDEERECAPITALCORP 1000000 U.S. DOLLARS 3-MOS OCT-31-1997 NOV-01-1996 JAN-31-1997 1 174 0 5737 89 0 0 19 12 6221 0 1853 113 0 0 654 6221 0 164 0 14 0 7 72 46 16 30 0 0 0 30 0 0
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