10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 1, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file no: 1-6458

JOHN DEERE CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State of Incorporation)	36-2386361 (IRS Employer Identification No.)
10587 Double R Boulevard, Suite 100 Reno, Nevada 89521 (Address of principal executive offices)
Telephone Number: (775) 786-5527

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
2.75% Senior Notes Due 2022	DE22B	New York Stock Exchange

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 ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

At August 1, 2021, 2,500 shares of common stock, without par value, of the registrant were outstanding, all of which were owned by John Deere Financial Services, Inc., a wholly-owned subsidiary of Deere & Company.

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with certain reduced disclosures as permitted by those instructions.

PART I. FINANCIAL INFORMATION

Item 1.     Financial Statements.

John Deere Capital Corporation and Subsidiaries

Statement of Consolidated Income

(Unaudited)

(in millions)

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Revenues
Finance income earned on retail notes	$	234.4	$	234.9	$	705.9	$	701.4
Revolving charge account income		77.3		87.8		216.1		242.7
Finance income earned on wholesale receivables		77.5		84.6		231.1		305.3
Lease revenues		255.7		270.3		775.5		817.8
Other income		38.0		18.4		86.6		47.5
Total revenues		682.9		696.0		2,015.2		2,114.7
Expenses
Interest expense		114.1		161.3		373.1		597.7
Operating expenses:
Administrative and operating expenses		105.5		92.0		304.3		357.9
Fees paid to John Deere		40.8		24.8		111.7		73.0
Provision (credit) for credit losses		15.7		16.0		(.5)		100.8
Depreciation of equipment on operating leases		180.1		211.8		559.5		639.6
Total operating expenses		342.1		344.6		975.0		1,171.3
Total expenses		456.2		505.9		1,348.1		1,769.0
Income of consolidated group before income taxes		226.7		190.1		667.1		345.7
Provision for income taxes		41.5		44.4		139.5		75.9
Income of consolidated group		185.2		145.7		527.6		269.8
Equity in income of unconsolidated affiliate		.7		.5		2.2		1.6
Net income		185.9		146.2		529.8		271.4
Less: Net income attributable to noncontrolling interests		.2				.2		.1
Net income attributable to the Company	$	185.7	$	146.2	$	529.6	$	271.3

See Condensed Notes to Interim Consolidated Financial Statements.

2

John Deere Capital Corporation and Subsidiaries

Statement of Consolidated Comprehensive Income

(Unaudited)

(in millions)

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Net income	$	185.9	$	146.2	$	529.8	$	271.4
Other comprehensive income (loss), net of income taxes
Cumulative translation adjustment		(16.7)		50.0		22.6		28.2
Unrealized gain (loss) on derivatives		.6		4.2		5.9		(4.8)
Unrealized gain (loss) on debt securities		(.2)		.6		(.1)
Other comprehensive income (loss), net of income taxes		(16.3)		54.8		28.4		23.4
Comprehensive income of consolidated group		169.6		201.0		558.2		294.8
Less: Comprehensive income attributable to noncontrolling interests		.2				.2		.1
Comprehensive income attributable to the Company	$	169.4	$	201.0	$	558.0	$	294.7

See Condensed Notes to Interim Consolidated Financial Statements.

3

John Deere Capital Corporation and Subsidiaries

Consolidated Balance Sheet

(Unaudited)

(in millions)

	August 1		November 1		August 2
	2021		2020		2020
Assets
Cash and cash equivalents	$	682.7	$	674.6	$	624.9
Marketable securities		2.1		2.2		2.4
Receivables:
Retail notes		19,009.6		17,158.0		15,112.4
Retail notes securitized		5,408.2		4,689.2		5,446.2
Revolving charge accounts		3,687.7		3,827.4		3,918.3
Wholesale receivables		7,731.2		7,093.3		8,428.8
Financing leases		846.5		789.4		743.6
Total receivables		36,683.2		33,557.3		33,649.3
Allowance for credit losses		(139.0)		(129.1)		(140.6)
Total receivables – net		36,544.2		33,428.2		33,508.7
Other receivables		96.6		88.1		106.9
Receivables from John Deere		333.7		583.2		804.5
Equipment on operating leases – net		4,963.8		5,297.8		5,257.2
Notes receivable from John Deere		366.0		350.0		366.8
Investment in unconsolidated affiliate		21.6		19.3		18.9
Deferred income taxes		34.9		27.1		37.3
Other assets		367.2		386.7		427.8
Total Assets	$	43,412.8	$	40,857.2	$	41,155.4
Liabilities and Stockholder’s Equity
Short-term borrowings:
Commercial paper and other notes payable	$	507.0	$	187.5	$	1,012.0
Securitization borrowings		5,264.6		4,656.2		5,324.1
John Deere		5,859.2		5,249.5		3,796.3
Current maturities of long-term borrowings		5,746.0		5,741.6		4,910.2
Total short-term borrowings		17,376.8		15,834.8		15,042.6
Other payables to John Deere		45.7		30.1		42.6
Accounts payable and accrued expenses		839.0		922.3		876.0
Deposits withheld from dealers and merchants		125.5		114.8		105.6
Deferred income taxes		288.9		345.9		423.3
Long-term borrowings		20,136.7		19,311.1		20,492.1
Total liabilities		38,812.6		36,559.0		36,982.2
Commitments and contingencies (Note 9)
Stockholder’s equity:
Common stock, without par value (issued and outstanding – 2,500 shares owned by John Deere Financial Services, Inc.)		1,482.8		1,482.8		1,482.8
Retained earnings		3,165.0		2,891.6		2,762.9
Accumulated other comprehensive loss		(49.4)		(77.8)		(74.0)
Total Company stockholder’s equity		4,598.4		4,296.6		4,171.7
Noncontrolling interests		1.8		1.6		1.5
Total stockholder’s equity		4,600.2		4,298.2		4,173.2
Total Liabilities and Stockholder’s Equity	$	43,412.8	$	40,857.2	$	41,155.4

See Condensed Notes to Interim Consolidated Financial Statements.

4

John Deere Capital Corporation and Subsidiaries

Statement of Consolidated Cash Flows

(Unaudited)

(in millions)

	Nine Months Ended
	August 1		August 2
	2021		2020
Cash Flows from Operating Activities:
Net income	$	529.8	$	271.4
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision (credit) for credit losses		(.5)		100.8
Provision for depreciation and amortization		576.6		652.2
Credit for deferred income taxes		(59.8)		(106.3)
Impairment charges				30.8
Undistributed earnings of unconsolidated affiliate		(2.0)		(1.4)
Change in accounts payable and accrued expenses		(26.7)		(16.1)
Change in accrued income taxes payable/receivable		(22.8)		32.0
Other		48.8		129.3
Net cash provided by operating activities		1,043.4		1,092.7
Cash Flows from Investing Activities:
Cost of receivables acquired (excluding wholesale)		(16,373.9)		(13,844.2)
Collections of receivables (excluding wholesale)		13,854.5		12,760.9
(Increase) decrease in wholesale receivables – net		(578.3)		353.8
Cost of equipment on operating leases acquired		(1,290.3)		(1,359.4)
Proceeds from sales of equipment on operating leases		1,121.4		978.3
Cost of notes receivable acquired from John Deere		(234.4)		(163.9)
Collections of notes receivable from John Deere		229.2		78.2
Other		(2.1)		(44.0)
Net cash used for investing activities		(3,273.9)		(1,240.3)
Cash Flows from Financing Activities:
Increase (decrease) in commercial paper and other notes payable – net		319.5		(444.5)
Increase in securitization borrowings – net		610.4		1,048.5
Increase in payable to John Deere – net		578.4		1,775.8
Proceeds from issuance of long-term borrowings		5,210.4		3,062.5
Payments of long-term borrowings		(4,214.2)		(5,008.7)
Dividends paid		(230.0)		(250.0)
Debt issuance costs		(27.7)		(21.9)
Net cash provided by financing activities		2,246.8		161.7
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		3.9		(.9)
Net increase in cash, cash equivalents, and restricted cash		20.2		13.2
Cash, cash equivalents, and restricted cash at beginning of period *		769.4		710.9
Cash, cash equivalents, and restricted cash at end of period *	$	789.6	$	724.1

* At August 1, 2021, November 1, 2020, August 2, 2020, and November 3, 2019, restricted cash, which is reported in other assets on the consolidated balance sheet, was $106.9 million, $94.8 million, $99.2 million and $78.3 million, respectively. The restricted cash primarily relates to the securitization of receivables (see Note 5).

See Condensed Notes to Interim Consolidated Financial Statements.

5

John Deere Capital Corporation and Subsidiaries

Statement of Changes in Consolidated Stockholder’s Equity

For the Three and Nine Months Ended August 1, 2021 and August 2, 2020

(Unaudited)

(in millions)

			Company Stockholder
							Accumulated
	Total						Other		Non-
	Stockholder’s		Common		Retained		Comprehensive		Controlling
	Equity		Stock		Earnings		Income (Loss)		Interests
Three Months Ended August 2, 2020
Balance May 3, 2020	$	3,997.2	$	1,482.8	$	2,641.7	$	(128.8)	$	1.5
Net income		146.2				146.2
Other comprehensive income		54.8						54.8
Dividends declared		(25.0)				(25.0)
Balance August 2, 2020	$	4,173.2	$	1,482.8	$	2,762.9	$	(74.0)	$	1.5
Nine Months Ended August 2, 2020
Balance November 3, 2019	$	4,128.4	$	1,482.8	$	2,741.6	$	(97.4)	$	1.4
Net income		271.4				271.3				.1
Other comprehensive income		23.4						23.4
Dividends declared		(250.0)				(250.0)
Balance August 2, 2020	$	4,173.2	$	1,482.8	$	2,762.9	$	(74.0)	$	1.5
Three Months Ended August 1, 2021
Balance May 2, 2021	$	4,525.6	$	1,482.8	$	3,074.3	$	(33.1)	$	1.6
Net income		185.9				185.7				.2
Other comprehensive loss		(16.3)						(16.3)
Dividends declared		(95.0)				(95.0)
Balance August 1, 2021	$	4,600.2	$	1,482.8	$	3,165.0	$	(49.4)	$	1.8
Nine Months Ended August 1, 2021
Balance November 1, 2020	$	4,298.2	$	1,482.8	$	2,891.6	$	(77.8)	$	1.6
ASU No. 2016-13 adoption (see Note 2)		(26.2)				(26.2)
Net income		529.8				529.6				.2
Other comprehensive income		28.4						28.4
Dividends declared		(230.0)				(230.0)
Balance August 1, 2021	$	4,600.2	$	1,482.8	$	3,165.0	$	(49.4)	$	1.8

See Condensed Notes to Interim Consolidated Financial Statements.

6

John Deere Capital Corporation and Subsidiaries

Condensed Notes to Interim Consolidated Financial Statements

(Unaudited)

(1)  Organization and Consolidation

John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company’s production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations and used equipment taken in trade for this equipment. The Company generally purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere generally acquires these retail notes through John Deere retail dealers. The Company also purchases and finances a limited amount of non-Deere retail notes. The Company also finances and services revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). The Company also provides wholesale financing for inventories of John Deere agriculture and turf and construction and forestry equipment for dealers of those products (wholesale receivables). In addition, the Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers (financing and operating leases). The Company also offers credit enhanced international export financing to select customers and dealers, which generally involves John Deere products. Retail notes, revolving charge accounts, wholesale receivables, and financing leases are collectively called “Receivables.” Receivables and equipment on operating leases are collectively called “Receivables and Leases.” The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral a security interest in the goods associated with those Receivables or with the use of other collateral.

Beginning in fiscal year 2021, John Deere implemented a new operating model and reporting structure. With this change, John Deere’s agriculture and turf operations were divided into two new segments: production and precision agriculture and small agriculture and turf. There were no changes to John Deere’s construction and forestry or financial services segments. Receivables and Leases managed by the Company continue to be evaluated by market (agriculture and turf and construction and forestry). References to agriculture and turf include both production and precision agriculture and small agriculture and turf.

The Company has prepared its interim consolidated financial statements, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes 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 these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing 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 accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the Company’s business, which may result in actual outcomes differing from those estimates.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2021 and 2020 were August 1, 2021 and August 2, 2020, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company's fiscal years generally ending in October and the associated periods in those fiscal years.

7

(2)  New Accounting Standards

New Accounting Standards Adopted

In the first quarter of 2021, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments – Credit Losses. This ASU was adopted using a modified-retrospective approach. The ASU, along with related amendments, revised the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash.

The Company holds deposits from dealers (dealer deposits), which are recorded in deposits withheld from dealers and merchants, to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of recoveries from dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and certain credit insurance contracts are presented in other income and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU also modified the treatment of the estimated write-off on delinquent receivables by no longer including the estimated benefit of charges to the dealer deposits in the write-off amount (see Note 4). This change increases the estimated write-offs on delinquent financing receivables with the benefit of credit losses recovered from dealer deposits presented in other income. This benefit, in both situations, is recorded when the dealer deposits are charged and no longer based on estimated recoveries.

The effects of adopting the ASU on the consolidated balance sheet were as follows (in millions of dollars):

	November 1		Cumulative Effect		November 2
	2020		from Adoption		2020
Assets
Allowance for credit losses	$	(129.1)	$	(19.7)	$	(148.8)
Deferred income taxes		27.1		.7		27.8
Liabilities
Accounts payable and accrued expenses	$	922.3	$	(.5)	$	921.8
Deposits withheld from dealers and merchants		114.8		13.5		128.3
Deferred income taxes		345.9		(5.8)		340.1
Stockholder’s equity
Retained earnings	$	2,891.6	$	(26.2)	$	2,865.4

Note 4 contains additional disclosures as well as the Company’s updated allowance for credit losses accounting policy.

The Company also adopted the following standards in 2021, none of which had a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

No. 2018-15	Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software
No. 2019-04	Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
No. 2021-01	Reference Rate Reform (Topic 848): Scope

8

New Accounting Standards to be Adopted

The Company will adopt the following standards in future periods, none of which are expected to have a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

No. 2019-12	Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes
No. 2020-08	Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs

(3)  Other Comprehensive Income Items

The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars):

			Unrealized		Unrealized		Accumulated
	Cumulative		Gain (Loss)		Gain (Loss)		Other
	Translation		on		on		Comprehensive
	Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance November 3, 2019	$	(88.4)	$	(7.0)	$	(2.0)	$	(97.4)
Other comprehensive income (loss) items before reclassification		28.2		(13.9)				14.3
Amounts reclassified from accumulated other comprehensive income				9.1				9.1
Net current period other comprehensive income (loss)		28.2		(4.8)				23.4
Balance August 2, 2020	$	(60.2)	$	(11.8)	$	(2.0)	$	(74.0)
Balance November 1, 2020	$	(69.5)	$	(6.7)	$	(1.6)	$	(77.8)
Other comprehensive income (loss) items before reclassification		22.6		(.6)		(.1)		21.9
Amounts reclassified from accumulated other comprehensive income				6.5				6.5
Net current period other comprehensive income (loss)		22.6		5.9		(.1)		28.4
Balance August 1, 2021	$	(46.9)	$	(.8)	$	(1.7)	$	(49.4)

9

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended August 1, 2021	Amount		Credit		Amount
Cumulative translation adjustment	$	(16.7)			$	(16.7)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.9)	$	.2		(.7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.6		(.3)		1.3
Net unrealized gain (loss) on derivatives		.7		(.1)		.6
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)				(.2)		(.2)
Total other comprehensive income (loss)	$	(16.0)	$	(.3)	$	(16.3)
Nine Months Ended August 1, 2021
Cumulative translation adjustment	$	22.6			$	22.6
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.8)	$	.2		(.6)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		8.2		(1.7)		6.5
Net unrealized gain (loss) on derivatives		7.4		(1.5)		5.9
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.2)		.1		(.1)
Total other comprehensive income (loss)	$	29.8	$	(1.4)	$	28.4
Three Months Ended August 2, 2020
Cumulative translation adjustment	$	50.0			$	50.0
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.1)	$	.2		(.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		6.4		(1.3)		5.1
Net unrealized gain (loss) on derivatives		5.3		(1.1)		4.2
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.6				.6
Total other comprehensive income (loss)	$	55.9	$	(1.1)	$	54.8
Nine Months Ended August 2, 2020
Cumulative translation adjustment	$	28.2			$	28.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(17.6)	$	3.7		(13.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		11.5		(2.4)		9.1
Net unrealized gain (loss) on derivatives		(6.1)		1.3		(4.8)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.8)		.8
Total other comprehensive income (loss)	$	21.3	$	2.1	$	23.4

10

(4)  Receivables

Credit Quality

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when retail notes, revolving charge accounts, and financing lease accounts are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. Finance income for non-performing Receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

Due to the economic effects of COVID, the Company provided short-term payment relief to dealers and retail customers during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. Receivables granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 3 percent of the Receivables balance. The majority of Receivables granted short-term relief are beyond the deferral period and have either resumed making payments or are reported as delinquent based on the modified payment schedule.

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, Customer Receivables) at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	8,075.6	$	6,472.1	$	3,246.0	$	1,695.6	$	733.9	$	207.4	$	3,570.9	$	24,001.5
30-59 days past due		31.1		42.1		25.1		14.9		5.3		2.7		11.4		132.6
60-89 days past due		11.7		21.4		10.0		4.4		2.6		1.1		3.4		54.6
90+ days past due		.1		.5		.2		.2								1.0
Non-performing		11.0		45.8		31.6		28.3		13.1		14.4		5.7		149.9
Construction and forestry
Current		1,765.6		1,413.7		715.0		281.3		63.2		10.6		91.5		4,340.9
30-59 days past due		28.2		38.0		21.8		8.0		2.7		.7		2.9		102.3
60-89 days past due		11.3		16.1		8.6		4.2		1.3		.3		1.1		42.9
90+ days past due		3.2				4.5										7.7
Non-performing		9.0		44.1		36.0		17.7		7.2		3.8		.8		118.6
Total Customer Receivables	$	9,946.8	$	8,093.8	$	4,098.8	$	2,054.6	$	829.3	$	241.0	$	3,687.7	$	28,952.0

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The credit quality analysis of Customer Receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020						August 2, 2020
	Retail Notes & Financing Leases		Revolving Charge Accounts		Total		Retail Notes & Financing Leases		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	18,341.2	$	3,710.3	$	22,051.5	$	17,188.9	$	3,794.6	$	20,983.5
30-59 days past due		111.4		11.5		122.9		114.3		18.3		132.6
60-89 days past due		47.6		3.5		51.1		59.4		3.5		62.9
90+ days past due		2.0				2.0		3.6				3.6
Non-performing		172.7		5.4		178.1		204.9		7.4		212.3
Construction and forestry
Current		3,759.5		92.3		3,851.8		3,572.8		90.2		3,663.0
30-59 days past due		82.0		2.4		84.4		60.4		2.6		63.0
60-89 days past due		38.8		1.1		39.9		14.6		1.0		15.6
90+ days past due		1.9				1.9
Non-performing		79.5		.9		80.4		83.3		.7		84.0
Total Customer Receivables	$	22,636.6	$	3,827.4	$	26,464.0	$	21,302.2	$	3,918.3	$	25,220.5

The credit quality analysis of wholesale receivables at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	260.9	$	106.2	$	30.6	$	12.5	$	3.1	$	.5	$	5,946.0	$	6,359.8
30-59 days past due														10.1		10.1
60-89 days past due														3.8		3.8
90+ days past due														2.8		2.8
Non-performing														4.3		4.3
Construction and forestry
Current		7.5		5.1		3.9		.4						1,332.0		1,348.9
30-59 days past due														1.3		1.3
60-89 days past due														.2		.2
90+ days past due
Non-performing
Total wholesale receivables	$	268.4	$	111.3	$	34.5	$	12.9	$	3.1	$	.5	$	7,300.5	$	7,731.2

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The credit quality analysis of wholesale receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020		August 2, 2020
Wholesale receivables:
Agriculture and turf
Current	$	5,693.7	$	6,905.0
30-59 days past due		3.9		10.9
60-89 days past due		4.4		1.1
90+ days past due		1.1		1.4
Non-performing		4.0		3.8
Construction and forestry
Current		1,385.9		1,499.6
30-59 days past due		.3		3.4
60-89 days past due				.3
90+ days past due				1.1
Non-performing				2.2
Total wholesale receivables	$	7,093.3	$	8,428.8

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.  

The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex Customer Receivable pools, while weighted average remaining maturity (WARM) models are used for smaller and less complex Customer Receivable pools. Transition matrix models, which are used for the majority of the Customer Receivables, estimate credit losses using historical delinquency and default information to assign probabilities that a receivable will pay as contractually scheduled or become delinquent and advance through the various delinquency stages. The model simulates the runoff of the portfolio, month-by-month, over the life of the receivables until the balances are fully repaid or default, using roll rates applied to the outstanding portfolio. The roll rates are applied based on the delinquency status of the customer accounts and are further segmented based on the credit risk and remaining duration of the underlying receivables. Estimated recovery rates are applied to the balance at default to calculate the expected credit losses. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. The WARM models apply historical average annual loss rates, adjusted for current and forecasted economic conditions, to the projected portfolio runoff. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions and reasonable and supportable forecasts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary.

Recoveries from freestanding credit enhancements, such as dealer deposits, are not included in the estimate of expected credit losses. Recoveries from dealer deposits are recognized in other income on the statement of consolidated income when the dealer’s withholding account is charged. During the three and nine months ended August 1, 2021, $3.2 million and $9.8 million, respectively, were recorded in other income related to recoveries from freestanding credit enhancements. Prior to the adoption of ASU No. 2016-13, the allowance for credit losses was estimated on probable credit losses incurred after consideration of expected recoveries from freestanding credit enhancements.

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An analysis of the allowance for credit losses and investment in Receivables during 2021 was as follows (in millions of dollars):

	Three Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	101.3	$	18.9	$	9.6	$	129.8
Provision (credit) for credit losses*		13.6		(.1)		2.2		15.7
Write-offs		(8.5)		(8.4)		(.2)		(17.1)
Recoveries		3.2		7.6				10.8
Translation adjustments		(.2)		.1		(.1)		(.2)
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0

	Nine Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption (see Note 2)		32.5		(12.2)		(.6)		19.7
Provision (credit) for credit losses*		11.2		(15.9)		2.1		(2.6)
Write-offs		(19.7)		(22.7)		(.3)		(42.7)
Recoveries		8.1		26.6				34.7
Translation adjustments		.4				.4		.8
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0
Receivables:
End of period balance	$	25,264.3	$	3,687.7	$	7,731.2	$	36,683.2

*Excludes provision for credit losses on unfunded commitments of $2.1 million for the nine months ended August 1, 2021, which is recorded in accounts payable and accrued expenses on the consolidated balance sheet. There was no change in the provision for credit losses on unfunded commitments for the third quarter of 2021.

The allowance for credit losses on Receivables increased $9.2 million in the third quarter of 2021, primarily due to growth in the retail notes and financing leases portfolio.

For the first nine months of 2021, the allowance for credit losses increased $9.9 million, primarily due to the adoption of ASU No. 2016-13 and growth in the retail notes and financing leases portfolio. These increases were partially offset by a reduction in the allowance on revolving charge accounts and a lower allowance on construction and forestry retail notes and financing leases. The allowance on revolving charge accounts was favorably impacted by strong payment performance due to continued improvements in the agriculture market, while expected credit losses on construction and forestry retail notes and financing leases decreased due to improving market conditions and better than expected performance of accounts granted payment relief due to the economic effects of COVID.

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An analysis of the allowance for credit losses and investment in Receivables during 2020 was as follows (in millions of dollars):

	Three Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	88.4	$	42.3	$	9.1	$	139.8
Provision (credit) for credit losses		3.3		13.2		(.5)		16.0
Write-offs		(5.5)		(21.3)		(.1)		(26.9)
Recoveries		2.4		8.1		.4		10.9
Translation adjustments		.4				.4		.8
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6

	Nine Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	53.7	$	39.3	$	7.6	$	100.6
Provision (credit) for credit losses		70.5		31.3		(1.0)		100.8
Write-offs		(39.6)		(50.1)		(.9)		(90.6)
Recoveries		4.5		21.8		1.3		27.6
Translation adjustments		(.1)				2.3		2.2
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6
Receivables:
End of period balance	$	21,302.2	$	3,918.3	$	8,428.8	$	33,649.3

The allowance for credit losses increased $40.0 million in the first nine months of 2020 primarily due to the negative economic effects of COVID and other macroeconomic issues, which significantly affected certain retail borrowers, particularly of construction equipment.

Troubled Debt Restructurings

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first nine months of 2021, the Company identified 287 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $10.3 million pre-modification and $9.4 million post-modification. During the first nine months of 2020, there were 328 Receivable contracts, primarily retail notes, with aggregate balances of $12.6 million pre-modification and $11.6 million post-modification. The short-term relief related to COVID mentioned on page 11 did not meet the definition of a troubled debt restructuring. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At August 1, 2021, the Company had no commitments to provide additional financing to customers whose accounts were modified in troubled debt restructurings.

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(5)  Securitization of Receivables

The Company, as a part of its overall funding strategy, periodically transfers certain Receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third-party investors result in secured borrowings, which are recorded as “Securitization borrowings” on the consolidated balance sheet. The securitized retail notes are recorded as “Retail notes securitized” on the consolidated balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the retail notes securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the retail notes securitized or a fixed percentage of the outstanding balance of the retail notes securitized. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the Receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $3,605.3 million, $2,897.5 million, and $3,342.5 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $3,487.2 million, $2,856.2 million, and $3,258.8 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $554.5 million, $549.7 million, and $642.4 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) were $520.5 million, $528.1 million, and $606.0 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

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In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,341.2 million, $1,327.3 million, and $1,551.3 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,259.0 million, $1,275.1 million, and $1,463.4 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets was as follows (in millions of dollars):

	August 1
	2021
Carrying value of liabilities	$	1,259.0
Maximum exposure to loss		1,341.2

The total assets of unconsolidated VIEs related to securitizations were approximately $37 billion at August 1, 2021.

The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Retail notes securitized	$	5,408.2	$	4,689.2	$	5,446.2
Allowance for credit losses		(19.9)		(12.6)		(14.0)
Other assets		112.7		97.9		104.0
Total restricted securitized assets	$	5,501.0	$	4,774.5	$	5,536.2

The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Securitization borrowings	$	5,264.6	$	4,656.2	$	5,324.1
Accrued interest on borrowings		2.1		3.2		4.1
Total liabilities related to restricted securitized assets	$	5,266.7	$	4,659.4	$	5,328.2

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At August 1, 2021, the maximum remaining term of all restricted securitized retail notes was approximately seven years.

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(6)  Leases

The Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in financing leases on the consolidated balance sheet. Operating leases are reported in equipment on operating leases – net on the consolidated balance sheet.

Lease revenues earned by the Company were as follows (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Sales-type and direct financing lease revenues	$	12.7	$	12.0	$	35.8	$	34.3
Operating lease revenues		237.9		253.5		724.3		768.8
Variable lease revenues		5.1		4.8		15.4		14.7
Total lease revenues	$	255.7	$	270.3	$	775.5	$	817.8

Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets and late fees.

The cost of equipment on operating leases by product category was as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Agriculture and turf	$	5,043.4	$	5,210.4	$	5,082.8
Construction and forestry		1,391.3		1,595.3		1,648.3
Total		6,434.7		6,805.7		6,731.1
Accumulated depreciation		(1,470.9)		(1,507.9)		(1,473.9)
Equipment on operating leases - net	$	4,963.8	$	5,297.8	$	5,257.2

Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates are revised. There were no impairment losses on operating leases recorded during the nine months ended August 1, 2021. During the nine months ended August 2, 2020, the Company recorded impairment losses on operating leases of $21.0 million due to higher expected return rates and lower estimated values of used construction equipment. The operating lease impairment losses were recorded in administrative and operating expenses on the statement of consolidated income.

The total operating lease residual values at August 1, 2021, November 1, 2020, and August 2, 2020 were $3,598.9 million, $3,826.3 million, and $3,791.7 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $247.3 million, $141.0 million, and $110.1 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The increase in residual value guarantees is primarily due to guarantees provided by John Deere dealers, which generally provide a first-loss residual value guarantee on operating lease originations effective after January 2020.

The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to operating lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at August 1, 2021, November 1, 2020, and August 2, 2020 were $46.9 million, $64.5 million, and $100.7 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheet. During the nine months ended August 2, 2020, the Company recorded impairment losses on matured operating lease inventory of $9.8 million due to lower estimated values of used construction equipment. There were no impairment losses recorded on matured operating lease inventory during the nine months ended August 1, 2021. The impairment losses on

18

matured operating lease inventory were included in administrative and operating expenses on the statement of consolidated income.

Due to the economic effects of COVID, the Company provided short-term payment relief to lessees during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 2 percent of the Company’s operating lease portfolio. The majority of operating leases granted short-term relief are beyond the deferral period and have resumed making payments.

(7)  Notes Receivable from John Deere

The Company makes loans to affiliated companies. The Company receives interest from John Deere at competitive market interest rates. The lending agreements mature over the next seven years. Interest earned from John Deere was $3.8 million for the third quarter and $10.3 in the first nine months of 2021, compared with $4.4 million and $12.4 million for the same periods last year, respectively.

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Limited Liability Company John Deere Financial	$	198.6	$	132.5	$	125.6
Banco John Deere S.A.		167.4		217.5		241.2
Total Notes Receivable from John Deere	$	366.0	$	350.0	$	366.8

(8)  Long-Term Borrowings

Long-term borrowings of the Company at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of the following (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Senior Debt:
Medium-term notes	$	20,174.1	$	19,320.6	$	20,499.8
Other notes		19.8		38.2		43.3
Total senior debt		20,193.9		19,358.8		20,543.1
Unamortized debt discount and debt issuance costs		(57.2)		(47.7)		(51.0)
Total	$	20,136.7	$	19,311.1	$	20,492.1

The medium-term notes in the table above include fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $19,722.5, $18,668.9, and $19,722.7 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

(9)  Commitments and Contingencies

At August 1, 2021, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $2,049.2 million of medium-term notes outstanding, and a fair value liability of $43.6 million for derivatives outstanding, prior to considering applicable netting provisions, with notional amounts of $3,021.5 million that were guaranteed by Capital Corporation. The weighted average interest rate on the medium-term notes at August 1, 2021 was 2.2 percent with a maximum remaining maturity of approximately six years.

Capital Corporation has a variable interest in John Deere Canada Funding Inc. (JDCFI), a wholly-owned subsidiary of John Deere Financial Inc., which was created as a VIE to issue debt in public markets to fund the operations of affiliated companies in Canada. Capital Corporation has a variable interest in JDCFI because it provides guarantees for all debt issued by JDCFI, however it does not consolidate JDCFI because it does not have the power to direct the activities that most significantly impact JDCFI’s economic performance. Capital

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Corporation has no carrying value of assets or liabilities related to JDCFI. Its maximum exposure to loss is the amount of the debt issued by JDCFI and guaranteed by Capital Corporation, which was $964.3 million at August 1, 2021. The weighted average interest rate on the debt at August 1, 2021 was 2.6 percent with a maximum remaining maturity of approximately two years. No additional support beyond what was previously contractually required has been provided to JDCFI during the reporting periods.

The Company has commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. The Company applies the same credit policies and approval process for these commitments to extend credit as it does for its Receivables. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. The amount of unused commitments to extend credit to John Deere dealers was $10.0 billion at August 1, 2021. The amount of unused commitments to extend credit to customers was $28.8 billion at August 1, 2021. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of the unused commitments to extend credit to customers relate to revolving charge accounts. At August 1, 2021, Capital Corporation had $131.2 million in unused loan commitments, which are unconditionally cancellable, denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia.

At August 1, 2021, the Company had restricted other assets associated with borrowings related to securitizations (see Note 5). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of August 1, 2021.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to retail credit matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements.

(10)  Income Taxes

The Company’s unrecognized tax benefits at August 1, 2021 were $29.6 million, compared to $33.3 million at November 1, 2020, and $31.0 million at August 2, 2020. The liability at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of approximately $19.9 million, $17.2 million, and $16.1 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be material.

(11)   Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

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The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	August 1, 2021				November 1, 2020				August 2, 2020
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	31,155.9	$	31,264.6	$	28,751.6	$	28,931.7	$	28,076.5	$	28,275.8
Retail notes securitized – net		5,388.3		5,454.3		4,676.6		4,772.9		5,432.2		5,543.9
Securitization borrowings		5,264.6		5,289.3		4,656.2		4,697.6		5,324.1		5,380.7
Current maturities of long-term borrowings		5,746.0		5,800.4		5,741.6		5,801.1		4,910.2		4,958.2
Long-term borrowings		20,136.7		20,557.9		19,311.1		19,784.4		20,492.1		21,038.2

Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings.

Fair values of Receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar Receivables. The fair values of the remaining Receivables approximated the carrying amounts.

Fair values of long-term borrowings and securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges.

Assets and liabilities measured at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Marketable securities
International debt securities	$	2.1	$	2.2	$	2.4
Receivables from John Deere
Derivatives:
Interest rate contracts		331.7		575.5		795.4
Cross-currency interest rate contracts		2.0		7.7		9.1
Other assets
Derivatives:
Foreign exchange contracts		.5		3.8		3.7
Total assets	$	336.3	$	589.2	$	810.6
Other payables to John Deere
Derivatives:
Interest rate contracts	$	43.4	$	29.4	$	42.5
Cross-currency interest rate contracts		2.3		.7		.1
Accounts payable and accrued expenses
Derivatives:
Foreign exchange contracts		1.7		.9		6.2
Total liabilities	$	47.4	$	31.0	$	48.8

Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value.  The cash equivalents consist primarily of time deposits and money market funds.

The international debt securities mature over the next nine years. At August 1, 2021, the amortized cost basis and fair value of these available-for-sale debt securities were $4.7 million and $2.1 million, respectively.

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Fair value, nonrecurring Level 3 measurements from impairments, excluding Receivables with specific allowances which were not material, were as follows (in millions of dollars):

	Fair Value				Losses
					Three Months Ended		Nine Months Ended
	August 1	November 1		August 2	August 1	August 2	August 1	August 2
	2021	2020		2020	2021	2020	2021	2020
Equipment on operating leases – net		$	340.3					$	21.0
Other assets			56.5						9.8
Total		$	396.8					$	30.8

The fair value shown for November 1, 2020 in the table above represents the fair value assessment at May 3, 2020, as the result of impairments taken on operating leases and matured operating lease inventory in the second quarter of 2020 (see Note 6).

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the consolidated balance sheet at fair value:

Marketable securities – The international debt securities are valued using quoted prices for identical assets in inactive markets.

Derivatives – The Company’s derivative financial instruments consist of interest rate contracts (swaps and caps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values.

Equipment on operating leases - net – The impairments were based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs included historical return rates and realized sales values.

Other assets – The impairments of the matured operating lease inventory were measured at the fair value of that inventory. The valuations were based on a market approach. The inputs included sales of comparable assets.

(12)  Derivative Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

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Cash Flow Hedges

Certain interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $1,750.0 million, $1,550.0 million, and $1,900.0 million, respectively. Fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of loss recorded in OCI at August 1, 2021 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $1.0 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair Value Hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $7,934.9 million, $6,525.7 million, and $8,179.8 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows (in millions of dollars):

			Cumulative Increase (Decrease) of Fair Value
			Hedging Adjustments Included in the
			Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
August 1, 2021	Hedged Item		Relationships		Relationships		Total
Current maturities of long-term borrowings	$	187.8	$	4.0	$	(.9)	$	3.1
Long-term borrowings		8,165.4		261.3		190.3		451.6
November 1, 2020
Current maturities of long-term borrowings	$	2.5			$	2.5	$	2.5
Long-term borrowings		7,149.8	$	530.0		121.6		651.6
August 2, 2020
Current maturities of long-term borrowings	$	104.6	$	2.6	$	2.0	$	4.6
Long-term borrowings		8,826.4		737.6		39.5		777.1

Derivatives Not Designated as Hedging Instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings. The total notional amounts of the interest rate swaps at August 1, 2021, November 1, 2020, and August 2, 2020 were $2,921.4 million, $2,336.6 million, and $2,423.2 million, the foreign exchange contracts were $98.0 million, $172.6 million, and $211.1 million, and the cross-currency interest rate contracts were $197.4 million, $111.5 million, and $123.5 million, respectively.

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To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $1,807.6 million, $1,961.4 million, and $2,171.0 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. Interest rate caps were also purchased with notional amounts of $1,807.6 million, $1,961.4 million, and $2,171.0 million at the same dates. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in administrative and operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the consolidated balance sheet were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	321.0	$	565.2	$	785.3
Not designated as hedging instruments:
Interest rate contracts		10.7		10.3		10.1
Cross-currency interest rate contracts		2.0		7.7		9.1
Total not designated		12.7		18.0		19.2
Other Assets
Not designated as hedging instruments:
Foreign exchange contracts		.5		3.8		3.7
Total not designated		.5		3.8		3.7
Total derivative assets	$	334.2	$	587.0	$	808.2
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	32.3	$	12.7	$	24.1
Not designated as hedging instruments:
Interest rate contracts		11.1		16.7		18.4
Cross-currency interest rate contracts		2.3		.7		.1
Total not designated		13.4		17.4		18.5
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign exchange contracts		1.7		.9		6.2
Total derivative liabilities	$	47.4	$	31.0	$	48.8

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The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Fair Value Hedges
Interest rate contracts - Interest expense	$	139.9	$	76.7	$	(70.7)	$	568.0
Cash Flow Hedges
Recognized in OCI
Interest rate contracts - OCI (pretax)		(.9)		(1.1)		(.8)		(17.6)
Reclassified from OCI
Interest rate contracts - Interest expense		(1.6)		(6.4)		(8.2)		(11.5)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(2.9)	$	(2.2)	$	(4.5)	$	(3.0)
Foreign exchange contracts - Administrative and operating expenses *		(4.5)		(47.2)		(20.0)		47.3
Total not designated	$	(7.4)	$	(49.4)	$	(24.5)	$	44.3

*    Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

Included in the table above are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amounts the Company recognized on these affiliate party transactions for the three months ended August 1, 2021 and August 2, 2020 were gains of $133.3 million and $62.8 million, respectively. The amounts the Company recognized on these affiliate party transactions for the nine months ended August 1, 2021 and August 2, 2020 were a loss of $91.6 million and a gain of $568.1 million, respectively.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual unrelated external counterparty exposure by setting limits that consider the credit rating of the unrelated external counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the unrelated external counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Each master agreement permits the net settlement of amounts owed in the event of default or termination. None of the Company’s derivative agreements contain credit-risk-related contingent features.

The Company’s outstanding derivatives have been transacted with both unrelated external counterparties and with John Deere. For derivatives transacted with John Deere, the Company utilizes a centralized hedging structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with the Company. Except for collateral provisions, the terms of the transaction between the Company and John Deere are identical to the terms of the transaction between John Deere and its unrelated external counterparty.

The Company has ISDA agreements with John Deere that permit the net settlement of amounts owed between counterparties in the event of early termination. In addition, the Company has a loss sharing agreement with John Deere in which it has agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage exposures of the Company. The loss sharing agreement did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of August 1, 2021, November 1, 2020, and August 2, 2020.

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Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

August 1, 2021
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	.5	$	(.1)		$	.4
John Deere		333.7		(43.1)			290.6
Liabilities
External		1.7		(.1)			1.6
John Deere		45.7		(43.1)			2.6

November 1, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.8	$	(.7)		$	3.1
John Deere		583.2		(23.5)			559.7
Liabilities
External		.9		(.7)			.2
John Deere		30.1		(23.5)			6.6

August 2, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.7	$	(.2)		$	3.5
John Deere		804.5		(35.4)			769.1
Liabilities
External		6.2		(.2)			6.0
John Deere		42.6		(35.4)			7.2

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(13)   Pension and Other Postretirement Benefits

The Company is a participating employer in certain Deere & Company sponsored defined benefit pension plans for employees in the U.S. and certain defined benefit pension plans outside the U.S. These pension plans provide for benefits that are based primarily on years of service and employee compensation. Pension expense is actuarially determined based on the Company’s employees included in the plan. The Company’s pension expense was not material for the three and nine month periods ended August 1, 2021 and August 2, 2020. The accumulated benefit obligation and plan net assets for the employees of the Company are not determined separately from Deere & Company. The Company provides defined benefit health care and life insurance plans for certain retired employees in the U.S. as a participating employer in Deere & Company’s sponsored plans. Health care and life insurance benefits expense is actuarially determined based on the Company’s employees included in the plans and amounted to $1.5 million for the third quarter and $4.6 million for the first nine months of 2021, compared with $1.7 million and $8.3 million for the same periods last year. The decrease from the prior year is primarily due to a $3.3 million curtailment loss in the first quarter of 2020 related to voluntary employee-separation programs (see Note 14). Further disclosure for these plans is included in Deere & Company’s Form 10-Q for the quarter ended August 1, 2021.

(14)   Employee-Separation Programs

During the first nine months of 2020, the Company incurred voluntary employee-separation program expenses of $8.7 million as part of its efforts to create a more efficient organization structure and reduce operating costs. The programs provided for cash payments based on years of service. The expenses were recorded primarily in the period in which the employees irrevocably accepted the separation offer. Included in the total pretax expense noted above for the first nine months of 2020 was a non-cash charge of $3.3 million resulting from a curtailment in certain other postretirement benefit plans during the first quarter of 2020 (see Note 13). The expenses were recorded in administrative and operating expenses.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Overview

Organization

The Company primarily generates revenues and cash by financing John Deere dealers’ sales and leases of new and used agriculture and turf equipment and construction and forestry equipment. In addition, the Company also provides wholesale financing to dealers of the foregoing equipment and finances retail revolving charge accounts.

Trends and Economic Conditions

The Company’s acquisition volume of Receivables and Leases is largely dependent upon the level of retail sales and leases of John Deere products. The level of John Deere retail sales and leases is responsive to a variety of economic, financial, climatic, legislative, and other factors that influence demand for its products.

Industry sales of large agricultural machinery in the U.S. and Canada are expected to be up about 25 percent for 2021 compared to the prior year. Industry sales of small agricultural and turf equipment in the U.S. and Canada are expected to be up about 10 percent in 2021. Industry sales of agricultural machinery in Europe are forecast to be up about 10 to 15 percent. In South America, industry sales of tractors and combines are projected to be up about 20 percent in 2021. Industry sales of agricultural machinery in Asia are forecast to be up significantly. Construction industry sales in the U.S. and Canada for 2021 are expected to increase about 15 to 20 percent, while compact construction equipment in the U.S. and Canada are forecast to increase about 20 to 25 percent. In forestry, global industry sales are expected to be about 15 percent higher.

Compared to the prior year, the Company’s full year 2021 results are expected to benefit from improvement on operating lease residual values, a lower provision for credit losses, more favorable financing spreads, and income earned on a higher average portfolio.

Items of concern include uncertainty of the effectiveness of governmental and private sector actions to address COVID, trade agreements, the uncertainty of the results of monetary and fiscal policies, the impact of elevated levels of sovereign and state debt, capital market disruptions, changes in demand and pricing for new and used equipment, geopolitical events, and the other items discussed in the “Safe Harbor Statement” below. Significant fluctuations in foreign currency exchange rates and volatility in the price of many commodities could also impact the Company’s results. The future financial effects of COVID are unknown due to many factors. As a result, predicting the Company’s forecasted financial performance is subject to many assumptions.

COVID Effects, Actions, and Recent Developments

The effects of COVID and the related actions of governments and other authorities to contain COVID continue to affect the Company’s operations, results, cash flows, and forecasts.

The Company’s first priority in addressing the effects of COVID continues to be the health, safety, and overall welfare of its employees. The Company effectively activated previously established business continuity plans and proactively implemented health and safety measures at its operations around the world.

The Company continued to work closely with its customers, including John Deere dealers and retail customers, in the first nine months of 2021 in connection with short-term payment relief on obligations owed to the Company. Receivables and operating leases granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 3 percent and 2 percent of the portfolio balances, respectively (see Notes 4 and 6).

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2021 Compared with 2020

The total revenues and net income attributable to the Company were as follows (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Total revenues	$	682.9	$	696.0	$	2,015.2	$	2,114.7
Net income attributable to the Company		185.7		146.2		529.6		271.3

Total revenues for the third quarter and first nine months of 2021 decreased primarily due to lower average financing rates, partially offset by a higher average portfolio and gains on operating lease dispositions in the current year. Net income for the third quarter and first nine months was higher than the same periods in 2020 mainly due to income earned on a higher average portfolio, improvement on operating lease residual values, and more favorable financing spreads. Additionally, a lower provision for credit losses contributed to the improvement for the first nine months of fiscal 2021. Results for the nine-month period last year also included impairments on lease residual values.

Revenues

The finance income, lease revenues, and other income earned by the Company were as follows (in millions of dollars):

	Three Months Ended					Nine Months Ended
	August 1		August 2		%	August 1		August 2		%
	2021		2020		Change	2021		2020		Change
Finance income earned from:
Retail notes	$	234.4	$	234.9		$	705.9	$	701.4	1
Revolving charge accounts		77.3		87.8	(12)		216.1		242.7	(11)
Wholesale receivables		77.5		84.6	(8)		231.1		305.3	(24)
Lease revenues		255.7		270.3	(5)		775.5		817.8	(5)
Other income		38.0		18.4	107		86.6		47.5	82

Finance income earned on retail notes was similar to comparable periods in 2020 primarily due to higher average portfolio balances, offset by lower average financing rates. Finance income earned on revolving charge accounts and wholesale receivables was lower primarily due to lower average financing rates and lower average portfolio balances. Lease revenues decreased primarily due to lower average portfolio balances.

Revenues earned from John Deere totaled $157.6 million for the third quarter and $464.4 million in the first nine months of 2021, compared with $165.8 million and $510.0 million for the same periods last year. The decrease was primarily due to decreased compensation paid by John Deere for waived or reduced finance charges on wholesale receivables and retail notes. Revenues earned from John Deere are included in the revenue amounts discussed above and in “Other income” on the statement of consolidated income.

Other income increased for the third quarter and first nine months of 2021 primarily due to gains on operating lease residual values, which had been revised downward over the term of the leases. Better than expected conditions in the agriculture and construction markets are leading to favorable results when the matured lease equipment is sold. The Company recognized losses on operating lease dispositions in 2020, which were recorded in administrative and operating expenses. In addition, both periods in 2021 benefited from freestanding credit enhancement recoveries (see Note 4), partially offset by lower interest income.

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Expenses

Significant expenses incurred by the Company were as follows (in millions of dollars):

	Three Months Ended					Nine Months Ended
	August 1		August 2		%	August 1		August 2		%
	2021		2020		Change	2021		2020		Change
Interest expense	$	114.1	$	161.3	(29)	$	373.1	$	597.7	(38)
Administrative and operating expenses		105.5		92.0	15		304.3		357.9	(15)
Provision (credit) for credit losses		15.7		16.0	(2)		(.5)		100.8	(100)
Depreciation of equipment on operating leases		180.1		211.8	(15)		559.5		639.6	(13)
Provision for income taxes		41.5		44.4	(7)		139.5		75.9	84

The decrease in interest expense for the third quarter and first nine months of 2021 was primarily due to lower average interest rates.

Administrative and operating expenses increased for the third quarter of 2021 compared to 2020, primarily due to higher employee incentive compensation. The decrease for the first nine months of 2021 compared to 2020 was primarily due to losses and impairments on operating lease residual values recorded in the prior year (see Note 6). In the current year, the Company recognized gains on the sale of operating lease equipment in other income. Administrative and operating expenses were also impacted by higher employee incentive compensation during the first nine months of 2021.

The provision (credit) for credit losses decreased $.3 million for the third quarter and $101.3 million for the first nine months of 2021, compared to similar periods in 2020. The decrease in the first nine months is primarily due to lower expected losses on retail notes and financing leases caused by improving conditions in the construction and forestry market and better than expected performance of accounts granted payment relief due to the economic effects of COVID. The provision (credit) for credit losses also decreased on revolving charge accounts in 2021, reflecting strong payment performance due to continued improvements in the agriculture market. In addition to the factors noted above, the prior year provision also included an increase in the allowance for credit losses in the second quarter of 2020 related to the negative economic effects of COVID and other macroeconomic issues. The annualized provision (credit) for credit losses, as a percentage of the average balance of total Receivables financed, was .18 percent in the third quarter and zero in the first nine months of 2021, compared with .20 percent and .42 percent for the same periods last year. See Note 2 and Note 4 for further information regarding the Company’s allowance for credit losses policies.

The depreciation of equipment on operating leases for the third quarter and first nine months of 2021 decreased primarily due to updated depreciation estimates and lower average balances of equipment on operating leases.

The provision for income taxes decreased in the third quarter of 2021 due to a lower effective tax rate and favorable discrete items, partially offset by higher pretax income.  The provision for income taxes increased during the first nine months of 2021 primarily due to higher pretax income.

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Receivables and Leases

Receivable and Lease (excluding wholesale) acquisition volumes were as follows (in millions of dollars):

	Three Months Ended
	August 1		August 2		$		%
	2021		2020		Change		Change
Retail notes:
Agriculture and turf	$	2,948.6	$	2,399.9	$	548.7	23
Construction and forestry		710.7		568.3		142.4	25
Total retail notes		3,659.3		2,968.2		691.1	23
Revolving charge accounts		1,642.3		1,723.0		(80.7)	(5)
Financing leases		184.8		144.7		40.1	28
Equipment on operating leases		475.9		351.2		124.7	36
Total Receivables and Leases (excluding wholesale)	$	5,962.3	$	5,187.1	$	775.2	15

	Nine Months Ended
	August 1		August 2		$		%
	2021		2020		Change		Change
Retail notes:
Agriculture and turf	$	8,465.7	$	6,525.4	$	1,940.3	30
Construction and forestry		2,042.5		1,490.0		552.5	37
Total retail notes		10,508.2		8,015.4		2,492.8	31
Revolving charge accounts		5,429.0		5,487.2		(58.2)	(1)
Financing leases		416.9		335.7		81.2	24
Equipment on operating leases		1,271.1		1,343.3		(72.2)	(5)
Total Receivables and Leases (excluding wholesale)	$	17,625.2	$	15,181.6	$	2,443.6	16

Total Receivables and Leases owned were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Retail notes:
Agriculture and turf	$	20,056.6	$	18,031.0	$	16,970.9
Construction and forestry		4,361.2		3,816.2		3,587.7
Total retail notes		24,417.8		21,847.2		20,558.6
Revolving charge accounts		3,687.7		3,827.4		3,918.3
Wholesale receivables		7,731.2		7,093.3		8,428.8
Financing leases		846.5		789.4		743.6
Equipment on operating leases		4,963.8		5,297.8		5,257.2
Total Receivables and Leases	$	41,647.0	$	38,855.1	$	38,906.5

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Total Receivables 30 days or more past due, non-performing Receivables, and the allowance for credit losses were as follows (in millions of dollars and as a percentage of the Receivables balance):

	August 1			November 1			August 2
	2021			2020			2020
	Dollars		Percent	Dollars		Percent	Dollars		Percent
Receivables 30 days or more past due *	$	359.3	.98	$	311.9	.93	$	295.9	.88
Non-performing Receivables *		272.8	.74		262.5	.78		302.3	.90
Allowance for credit losses		139.0	.38		129.1	.38		140.6	.42

*   The delinquency status of receivables granted payment relief due to COVID is based on the modified payment schedule (see Note 4).

Receivables 30 days or more past due continue to accrue finance income. The Company ceases to accrue finance income once Receivables are considered non-performing. An allowance for credit losses is recorded for the estimated credit losses expected over the life of the Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. While the Company believes its allowance is sufficient to provide for losses over the life of its existing Receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses and the provision for credit losses. See Note 4 for additional information related to the allowance for credit losses.

Deposits withheld from dealers and merchants amounted to $125.5 million at August 1, 2021, compared with $114.8 million at November 1, 2020 and $105.6 million at August 2, 2020. These balances primarily represent 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. Upon the adoption of ASU 2016-13, recoveries from dealer deposits are recognized in other income when the dealer’s withholding account is charged.

During the third quarter and first nine months ended August 1, 2021, $3.2 million and $9.8 million, respectively, were recorded in other income related to recoveries from dealer deposits and other freestanding credit enhancements. Prior to the adoption of ASU No. 2016-13, the benefit of credit losses recovered from freestanding credit enhancements, such as dealer deposits, were recognized in the provision for credit losses based on estimated recoveries.

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Write-offs and recoveries of Receivables, by product, and as an annualized percentage of average balances held during the period, were as follows (in millions of dollars):

	Three Months Ended
	August 1, 2021			August 2, 2020
	Dollars		Percent	Dollars		Percent
Write-offs:
Retail notes:
Agriculture and turf	$	(2.5)	(.05)	$	(2.1)	(.05)
Construction and forestry		(5.1)	(.48)		(2.9)	(.33)
Total retail notes		(7.6)	(.13)		(5.0)	(.10)
Revolving charge accounts		(8.4)	(.95)		(21.3)	(2.30)
Wholesale receivables		(.2)	(.01)		(.1)
Financing leases		(.9)	(.44)		(.5)	(.28)
Total write-offs		(17.1)	(.19)		(26.9)	(.33)
Recoveries:
Retail notes:
Agriculture and turf		2.8	.06		1.6	.04
Construction and forestry		.3	.03		.5	.06
Total retail notes		3.1	.05		2.1	.04
Revolving charge accounts		7.6	.86		8.1	.87
Wholesale receivables					.4	.02
Financing leases		.1	.05		.3	.17
Total recoveries		10.8	.12		10.9	.13
Total net write-offs	$	(6.3)	(.07)	$	(16.0)	(.20)

	Nine Months Ended
	August 1, 2021			August 2, 2020
	Dollars		Percent	Dollars		Percent
Write-offs:
Retail notes:
Agriculture and turf	$	(8.5)	(.06)	$	(8.2)	(.07)
Construction and forestry		(8.9)	(.29)		(30.1)	(1.18)
Total retail notes		(17.4)	(.10)		(38.3)	(.26)
Revolving charge accounts		(22.7)	(.97)		(50.1)	(2.06)
Wholesale receivables		(.3)	(.01)		(.9)	(.01)
Financing leases		(2.3)	(.39)		(1.3)	(.25)
Total write-offs		(42.7)	(.17)		(90.6)	(.37)
Recoveries:
Retail notes:
Agriculture and turf		6.7	.05		2.9	.02
Construction and forestry		1.1	.04		1.1	.04
Total retail notes		7.8	.05		4.0	.03
Revolving charge accounts		26.6	1.13		21.8	.90
Wholesale receivables					1.3	.02
Financing leases		.3	.05		.5	.10
Total recoveries		34.7	.14		27.6	.11
Total net write-offs	$	(8.0)	(.03)	$	(63.0)	(.26)

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Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements under “Overview” and other forward-looking statements herein that relate to future events, expectations and trends involve factors that are subject to change and risks and uncertainties that could cause actual results to differ materially.

Factors that could materially affect the Company’s operations, access to capital, expenses, and results include changes in, uncertainty surrounding, and the impact of governmental trade, banking, monetary, and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs, and other areas. Actions by central banks, financial, and securities regulators may affect the costs and expenses of financing the Company and the financing rates it is able to offer. The Company’s business is affected by general economic conditions in the global markets in which the Company operates because deteriorating economic conditions and political instability can result in decreased customer confidence, lower demand for equipment, higher credit losses, and greater currency risk. The Company’s business is also affected by changes in demand and pricing for used equipment and resulting impacts on lease residual values; actions of banks, financing and leasing companies, and other lenders that compete with the Company for customers; capital market disruptions; significant changes in capital market liquidity and associated funding costs; interest rates (including the availability of IBOR reference rates) and foreign currency exchange rates and their volatility; changes to accounting standards; changes in tax rates, estimates, laws, and regulations and Company actions related thereto; changes to and compliance with privacy, banking, and other regulations; changes to and compliance with economic sanctions and export controls laws and regulations; compliance with U.S. and foreign laws when expanding to new markets and otherwise; actions by other regulatory bodies; governmental programs, policies, and tariffs for the benefit of certain industries or sectors; sanctions in particular jurisdictions; retaliatory actions to such changes in trade, banking, monetary, and fiscal policies; the political and social stability of the global markets in which the Company operates; changes in weather patterns; the effects of, or response to, terrorism and security threats; wars and other conflicts; natural disasters; the spread of major epidemics (including the COVID pandemic) and government and industry responses to epidemics, such as travel restrictions and extended shut down of businesses; events that damage the Company’s reputation or brand; significant investigations, claims, lawsuits or other legal proceedings; changes in the ability to attract, develop, engage, and retain qualified personnel; the implementation of the smart industrial operating model and other organizational changes; the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts; difficulties related to the conversion and implementation of the Company’s information technology systems; and security breaches, cybersecurity attacks, technology failures and other disruptions to the information technology infrastructure of the Company and John Deere dealers.

Uncertainties related to the magnitude and duration of the COVID pandemic may significantly adversely affect John Deere’s and the Company’s business and outlook. These uncertainties include: the duration and impact of any resurgence in COVID cases in any country, state, or region; the emergence, contagiousness, and threat of new and different strains of coronavirus; the availability, acceptance, and effects of vaccines; prolonged reduction or closure of John Deere’s and the Company’s operations, or a delayed recovery in our operations; additional closures as mandated or otherwise made necessary by governmental authorities; additional operating costs due to remote working arrangements, adherence to social distancing guidelines and other COVID-related challenges; increased risk of cyber-attacks on network connections used in remote working arrangements; increased privacy-related risks due to processing health-related personal information; legal claims related to personal protective equipment designed, made, or provided by the Company or alleged exposure to COVID on Company premises; absence of employees due to illness; the impact of the pandemic on the financial condition and credit risk of the Company's customers and dealers, which could affect the demand for financing and lead to higher credit losses and losses on lease residual values; requests by the Company’s customers or dealers for payment deferrals and contract modifications; the impact of disruptions in the global capital markets and/or declines in John Deere’s and the Company’s financial performance, outlook or credit ratings, which could impact John Deere’s and the Company’s ability to obtain funding in the future; and the impact of the pandemic on demand for John Deere’s products and services. It remains unclear when a sustained economic recovery could occur and what a recovery may look like. All of these factors could materially and adversely affect our business, liquidity, results of operations, and financial position.

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Significant changes in market liquidity conditions, changes in the Company’s credit ratings, and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the Company’s earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of John Deere’s products and customer confidence and purchase decisions, financing and repayment practices, and the number and size of customer delinquencies and defaults. A debt crisis in Europe, Latin America, or elsewhere could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, and Company operations and results. The Company’s operations could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings.

The withdrawal of the United Kingdom from the European Union and the perceptions as to the impact of the withdrawal may adversely affect business activity, political stability, and economic conditions in the United Kingdom, the European Union, and elsewhere. The economic conditions and outlook could be further adversely affected by (i) uncertainty regarding any new or modified trade arrangements between the United Kingdom and the European Union and/or other countries, (ii) the risk that one or more other European Union countries could come under increasing pressure to leave the European Union, or (iii) the risk that the euro as the single currency of the Eurozone could cease to exist. Any of these developments, or the perception that any of these developments are likely to occur, could affect economic growth or business activity in the United Kingdom or the European Union, and could result in the relocation of businesses, cause business interruptions, lead to economic recession or depression, and impact the stability of the financial markets, availability of credit, currency exchange rates, interest rates, financial institutions, and political, financial, and monetary systems. Any of these developments could affect our businesses, liquidity, results of operations, and financial position.

The liquidity and ongoing profitability of the Company depend largely on timely access to capital in order to meet future cash flow requirements, and to fund operations, costs, and purchases of John Deere’s products. If general economic conditions deteriorate or capital markets become more volatile, including as a result of the COVID pandemic, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact the Company’s write-offs and provision for credit losses.

The Company’s forward-looking statements are based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The Company, except as required by law, undertakes no obligation to update or revise its forward-looking statements, whether as a result of new developments or otherwise. In addition, the Company’s business is closely related to John Deere’s business. Further information, including factors that could materially affect the Company’s and John Deere’s financial results, is included in the most recent Deere & Company annual report on Form 10-K and quarterly reports on Form 10-Q (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the annual report on Form 10-K and quarterly reports on Form 10-Q) and other Deere & Company and Capital Corporation filings with the SEC.

Critical Accounting Policies

See the Company’s critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent annual report filed on Form 10-K. There have been no material changes to these policies, other than as described below related to the allowance for credit losses, as a result of the adoption of ASU No. 2016-13 during the first quarter of 2021.

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis.

The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large

35

and complex Customer Receivable pools, while weighted average remaining maturity models are used for smaller and less complex Customer Receivable pools. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary. While the Company believes its allowance is sufficient to provide for losses over the life of its existing Receivable portfolio, different assumptions or changes in economic conditions would result in changes to the allowance for credit losses and the provision for credit losses.

Capital Resources and Liquidity

For additional information on the Company’s dependence on and relationships with Deere & Company, see the Company’s most recently filed annual report on Form 10-K.

During the first nine months of 2021, the aggregate net cash provided by operating and financing activities was used primarily to fund Receivables and Leases. Net cash provided by operating activities was $1,043.4 million in the first nine months of 2021. Net cash provided by financing activities totaled $2,246.8 million in the first nine months of 2021, resulting primarily from a net increase in total external borrowings of $1,926.1 million and a net increase in payables to John Deere of $578.4 million, partially offset by dividends paid of $230.0 million. Net cash used by investing activities totaled $3,273.9 million in the first nine months of 2021, primarily due to the cost of Receivables acquired (excluding wholesale) exceeding the collections of Receivables (excluding wholesale) by $2,519.4 million, an increase in net wholesale receivables of $578.3 million, and the cost of equipment on operating leases acquired exceeding the proceeds from sales of equipment on operating leases by $168.9 million. Cash, cash equivalents, and restricted cash increased $20.2 million during the first nine months of 2021.

During the first nine months of 2020, the aggregate net cash provided by operating and financing activities was used primarily to fund Receivables and Leases. Net cash provided by operating activities was $1,092.7 million in the first nine months of 2020. Net cash provided by financing activities totaled $161.7 million in the first nine months of 2020, resulting primarily from a net increase in payables to John Deere of $1,775.8 million, partially offset by a net decrease in total external borrowings of $1,342.2 million and dividends paid of $250.0 million. Net cash used for investing activities totaled $1,240.3 million in the first nine months of 2020, primarily due to the cost of Receivables acquired (excluding wholesale) exceeding the collections of Receivables (excluding wholesale) by $1,083.3 million and the cost of equipment on operating leases acquired exceeding proceeds from sales of equipment on operating leases by $381.1 million, partially offset by a decrease in net wholesale receivables of $353.8 million. Cash, cash equivalents, and restricted cash increased $13.2 million during the first nine months of 2020.

The Company relies on its ability to raise substantial amounts of funds to finance its Receivable and Lease portfolios. The Company has access to most global markets at a reasonable cost and expects to have sufficient sources of global funding and liquidity to meet its funding needs. The Company’s ability to meet its debt obligations is supported in a number of ways. The assets of the Company are self-liquidating in nature. A solid equity position is available to absorb unusual losses on these assets and all commercial paper is backed by unsecured, committed borrowing lines from various banks. Liquidity is also provided by the Company’s ability to securitize these assets and through the issuance of term debt. Additionally, liquidity may be provided through loans from John Deere. The Company’s commercial paper outstanding at August 1, 2021, November 1, 2020, and August 2, 2020 was $507.0 million, $125.0 million, and $940.9 million, respectively, while the total cash, cash equivalents, and marketable securities position was $684.8 million, $676.8 million, and $627.3 million, respectively. The amount of cash, cash equivalents, and marketable securities held by foreign subsidiaries was $184.3 million, $163.7 million, and $124.6 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

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Capital Corporation has a revolving credit agreement to utilize bank conduit facilities to securitize retail notes (see Note 5). At August 1, 2021, this facility had a total capacity, or “financing limit,” of $2,000.0 million of secured financings at any time. After a two-year revolving period, unless the banks and Capital Corporation agree to renew, Capital Corporation would liquidate the secured borrowings over time as payments on the retail notes are collected. At August 1, 2021, $1,778.9 million of short-term securitization borrowings were outstanding under the agreement.

During the first nine months of 2021, the Company issued $5,210.4 million and retired $4,214.2 million of long-term borrowings, which were primarily medium-term notes. During the first nine months of 2021, the Company also issued $2,800.8 million and retired $2,190.4 million of retail note securitization borrowings and maintained an average commercial paper balance of $919.9 million. At August 1, 2021, the Company’s funding profile included $507.0 million of commercial paper and other notes payable, $5,264.6 million of securitization borrowings, $5,859.2 million of loans from John Deere, $25,882.7 million of unsecured term debt, and $4,600.2 million of equity capital. The Company’s funding profile may be altered to reflect such factors as relative costs of funding sources, assets available for securitizations, and capital market accessibility.

Total interest-bearing indebtedness amounted to $37,513.5 million at August 1, 2021, compared with $35,145.9 million at November 1, 2020 and $35,534.7 million at August 2, 2020. Total short-term indebtedness amounted to $17,376.8 million at August 1, 2021, compared with $15,834.8 million at November 1, 2020 and $15,042.6 million at August 2, 2020. Total long-term indebtedness amounted to $20,136.7 million at August 1, 2021, compared with $19,311.1 million at November 1, 2020 and $20,492.1 million at August 2, 2020. The ratio of total interest-bearing debt, including securitization indebtedness, to stockholder’s equity was 8.2 to 1 at August 1, 2021, compared with 8.2 to 1 at November 1, 2020 and 8.5 to 1 at August 2, 2020.

Stockholder’s equity was $4,600.2 million at August 1, 2021, compared with $4,298.2 million at November 1, 2020 and $4,173.2 million at August 2, 2020. The increase in the first nine months of 2021 was primarily due to net income attributable to the Company of $529.6 million and a change in the cumulative translation adjustment of $22.6 million, partially offset by dividends paid of $230.0 million and the adoption of ASU No. 2016-13 of $26.2 million.

Lines of Credit

The Company has access to bank lines of credit with various banks throughout the world. Some of the lines are available to both the Company and Deere & Company. Worldwide lines of credit totaled $8,000.0 million at August 1, 2021, $6,131.1 million of which were unused. For the purpose of computing unused credit lines, commercial paper and short-term bank borrowings, excluding secured borrowings and the current portion of long-term borrowings, of the Company and Deere & Company were primarily considered to constitute utilization. Included in the total credit lines at August 1, 2021 was a 364-day credit facility agreement of $3,000.0 million, expiring in fiscal April 2022. In addition, total credit lines included long-term credit facility agreements of $2,500.0 million, expiring in fiscal April 2025, and $2,500.0 million, expiring in fiscal March 2026. These credit agreements require the Company to maintain its consolidated ratio of earnings to fixed charges at not less than 1.05 to 1 for each fiscal quarter and its ratio of senior debt, excluding securitization indebtedness, to capital base (total subordinated debt and stockholder’s equity excluding accumulated other comprehensive income (loss)) at not more than 11 to 1 at the end of any fiscal quarter. All of these credit agreement requirements have been met during the periods included in the consolidated financial statements.

Debt Ratings

The Company’s ability to obtain funding is affected by its debt ratings, which are closely related to the outlook for and the financial condition of John Deere, and the nature and availability of support facilities, such as its lines of credit and the support agreement from Deere & Company.

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To access public debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings to the Company’s securities as an indicator of credit quality for fixed income investors. A security rating is not a recommendation by the rating agency to buy, sell, or hold Company securities. A credit rating agency may change or withdraw Company ratings based on its assessment of the Company’s current and future ability to meet interest and principal repayment obligations. Each agency’s rating should be evaluated independently of any other rating. Lower credit ratings generally result in higher borrowing costs, including costs of derivative transactions, and reduced access to debt capital markets.

The senior long-term and short-term debt ratings and outlook currently assigned to unsecured Company debt securities by the rating agencies engaged by the Company are the same as those for John Deere. Those ratings are as follows:

	Senior Long-Term	Short-Term	Outlook
Fitch Ratings	A	F1	Stable
Moody’s Investors Service, Inc.	A2	Prime-1	Stable
Standard & Poor’s	A	A-1	Stable

Dividends

Capital Corporation declared and paid cash dividends to John Deere Financial Services, Inc. (JDFS) of $230.0 million and $250.0 million in the first nine months of 2021 and 2020, respectively. In each case, JDFS paid comparable dividends to Deere & Company.

On August 26, 2021, Capital Corporation declared a $255.0 million dividend to be paid to JDFS on September 15, 2021. JDFS, in turn, declared a $255.0 million dividend to Deere & Company, also payable on September 15, 2021.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

See the Company’s most recent annual report filed on Form 10-K (Part II, Item 7A). There has been no material change in this information.

Item 4.     Controls and Procedures.

The Company’s principal executive officer and its principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (Act)) were effective as of August 1, 2021, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Act. During the third quarter, there were no changes that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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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 retail credit matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its financial statements.

Item 1A.  Risk Factors.

See the Company’s most recent annual report on Form 10-K (Part I, Item 1A). There has been no material change in this information. The risks described in the annual report on Form 10-K, and the “Safe Harbor Statement” in this report, are not the only risks faced by the Company. Additional risks and uncertainties may also materially affect the Company’s business, financial condition, or operating results. One should not consider the risk factors to be a complete discussion of risks, uncertainties, and assumptions.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds.

Omitted pursuant to instruction H.

Item 3.     Defaults Upon Senior Securities.

Omitted pursuant to instruction H.

Item 4.     Mine Safety Disclosures.

Not applicable.

Item 5.     Other Information.

None.

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Item 6.     Exhibits.

Certain instruments relating to long-term borrowings, constituting less than 10 percent 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 SEC.

3.1	Certificate of Incorporation, as amended (Exhibit 3.1 to Form 10-K of the registrant for the year ended October 31, 1999, Securities and Exchange Commission file number 1-6458*)
3.2	Bylaws, as amended (Exhibit 3.2 to Form 10-K of the registrant for the year ended October 31, 1999, Securities and Exchange Commission file number 1-6458*)
31.1	Rule 13a-14(a)/15d-14(a) Certification
31.2	Rule 13a-14(a)/15d-14(a) Certification
32	Section 1350 Certifications
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*     Incorporated by reference. Copies of these exhibits are available from the Company upon request.

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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:	August 26, 2021	By:	/s/ Ryan D. Campbell
			Ryan D. Campbell
			Senior Vice President and
			Principal Financial Officer and Principal Accounting Officer

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John C. May, certify that:

1.I have reviewed this quarterly report on Form 10-Q of John Deere Capital Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 26, 2021	By:	/s/ John C. May
			John C. May
			Chairman and Chief Executive Officer and Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ryan D. Campbell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of John Deere Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 26, 2021	By:	/s/ Ryan D. Campbell
			Ryan D. Campbell
			Senior Vice President and
			Principal Financial Officer and Principal Accounting Officer

EX-32

Exhibit 32

STATEMENT PURSUANT TO
18 U.S.C. SECTION 1350
AS REQUIRED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of John Deere Capital Corporation (the “Company”) on Form 10-Q for the period ending August 1, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that to the best of our knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 26, 2021	/s/ John C. May	Chairman and Chief Executive Officer and  Principal Executive Officer
	John C. May
August 26, 2021	/s/ Ryan D. Campbell	Senior Vice President and Principal Financial Officer and Principal Accounting Officer
	Ryan D. Campbell

A signed original of this written statement required by Section 906 has been provided to John Deere Capital Corporation and will be retained by John Deere Capital Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	9 Months Ended
	Aug. 01, 2021 shares
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Aug. 01, 2021
Entity File Number	1-6458
Entity Registrant Name	DEERE JOHN CAPITAL CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-2386361
Entity Address, Address Line One	10587 Double R Boulevard, Suite 100
Entity Address, City or Town	Reno
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89521
City Area Code	775
Local Phone Number	786-5527
Title of 12(b) Security	2.75% Senior Notes Due 2022
Trading Symbol	DE22B
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	2,500
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000027673
Amendment Flag	false

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Statement of Consolidated Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Revenues
Finance income earned on retail notes	$ 234.4	$ 234.9	$ 705.9	$ 701.4
Revolving charge account income	77.3	87.8	216.1	242.7
Finance income earned on wholesale receivables	77.5	84.6	231.1	305.3
Lease revenues	255.7	270.3	775.5	817.8
Other income	38.0	18.4	86.6	47.5
Total revenues	682.9	696.0	2,015.2	2,114.7
Expenses
Interest expense	114.1	161.3	373.1	597.7
Operating expenses:
Administrative and operating expenses	105.5	92.0	304.3	357.9
Fees paid to John Deere	40.8	24.8	111.7	73.0
Provision (credit) for credit losses	15.7	16.0	(0.5)	100.8
Depreciation of equipment on operating leases	180.1	211.8	559.5	639.6
Total operating expenses	342.1	344.6	975.0	1,171.3
Total expenses	456.2	505.9	1,348.1	1,769.0
Income of consolidated group before income taxes	226.7	190.1	667.1	345.7
Provision for income taxes	41.5	44.4	139.5	75.9
Income of consolidated group	185.2	145.7	527.6	269.8
Equity in income of unconsolidated affiliate	0.7	0.5	2.2	1.6
Net income	185.9	146.2	529.8	271.4
Less: Net income attributable to noncontrolling interests	0.2		0.2	0.1
Net income attributable to the Company	$ 185.7	$ 146.2	$ 529.6	$ 271.3

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Statement of Consolidated Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Statement of Consolidated Comprehensive Income
Net income	$ 185.9	$ 146.2	$ 529.8	$ 271.4
Other comprehensive income (loss), net of income taxes
Cumulative translation adjustment	(16.7)	50.0	22.6	28.2
Unrealized gain (loss) on derivatives	0.6	4.2	5.9	(4.8)
Unrealized gain (loss) on debt securities	(0.2)	0.6	(0.1)
Other comprehensive income (loss), net of income taxes	(16.3)	54.8	28.4	23.4
Comprehensive income of consolidated group	169.6	201.0	558.2	294.8
Less: Comprehensive income attributable to noncontrolling interests	0.2		0.2	0.1
Comprehensive income attributable to the Company	$ 169.4	$ 201.0	$ 558.0	$ 294.7

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Consolidated Balance Sheet - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Assets
Cash and cash equivalents	$ 682.7	$ 674.6	$ 624.9
Marketable securities	2.1	2.2	2.4
Receivables:
Total receivables	36,683.2	33,557.3	33,649.3
Allowance for credit losses	(139.0)	(129.1)	(140.6)
Total receivables - net	36,544.2	33,428.2	33,508.7
Other receivables	96.6	88.1	106.9
Receivables from John Deere	333.7	583.2	804.5
Equipment on operating leases - net	4,963.8	5,297.8	5,257.2
Notes receivable from John Deere	366.0	350.0	366.8
Investment in unconsolidated affiliate	21.6	19.3	18.9
Deferred income taxes	34.9	27.1	37.3
Other assets	367.2	386.7	427.8
Total Assets	43,412.8	40,857.2	41,155.4
Short-term borrowings:
Commercial paper and other notes payable	507.0	187.5	1,012.0
Securitization borrowings	5,264.6	4,656.2	5,324.1
John Deere	5,859.2	5,249.5	3,796.3
Current maturities of long-term borrowings	5,746.0	5,741.6	4,910.2
Total short-term borrowings	17,376.8	15,834.8	15,042.6
Other payables to John Deere	45.7	30.1	42.6
Accounts payable and accrued expenses	839.0	922.3	876.0
Deposits withheld from dealers and merchants	125.5	114.8	105.6
Deferred income taxes	288.9	345.9	423.3
Long-term borrowings	20,136.7	19,311.1	20,492.1
Total liabilities	38,812.6	36,559.0	36,982.2
Commitments and contingencies (Note 9)
Stockholder's equity:
Common stock, without par value (issued and outstanding - 2,500 shares owned by John Deere Financial Services, Inc.)	1,482.8	1,482.8	1,482.8
Retained earnings	3,165.0	2,891.6	2,762.9
Accumulated other comprehensive loss	(49.4)	(77.8)	(74.0)
Total Company stockholder's equity	4,598.4	4,296.6	4,171.7
Noncontrolling interests	1.8	1.6	1.5
Total stockholder's equity	4,600.2	4,298.2	4,173.2
Total Liabilities and Stockholder's Equity	43,412.8	40,857.2	41,155.4
Retail notes | Unrestricted
Receivables:
Total receivables	19,009.6	17,158.0	15,112.4
Retail notes | Securitized
Receivables:
Total receivables	5,408.2	4,689.2	5,446.2
Revolving charge accounts
Receivables:
Total receivables	3,687.7	3,827.4	3,918.3
Allowance for credit losses	(18.1)	(42.3)	(42.3)
Wholesale Receivables
Receivables:
Total receivables	7,731.2	7,093.3	8,428.8
Allowance for credit losses	(11.5)	(9.9)	(9.3)
Financing Leases
Receivables:
Total receivables	$ 846.5	$ 789.4	$ 743.6

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Consolidated Balance Sheet (Parenthetical) - shares	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Consolidated Balance Sheet
Common stock, issued shares	2,500	2,500	2,500
Common stock, outstanding shares	2,500	2,500	2,500

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Statement of Consolidated Cash Flows - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020
Cash Flows from Operating Activities:
Net income	$ 529.8	$ 271.4
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for credit losses	(0.5)	100.8
Provision for depreciation and amortization	576.6	652.2
Credit for deferred income taxes	(59.8)	(106.3)
Impairment charges		30.8
Undistributed earnings of unconsolidated affiliate	(2.0)	(1.4)
Change in accounts payable and accrued expenses	(26.7)	(16.1)
Change in accrued income taxes payable/receivable	(22.8)	32.0
Other	48.8	129.3
Net cash provided by operating activities	1,043.4	1,092.7
Cash Flows from Investing Activities:
Cost of receivables acquired (excluding wholesale)	(16,373.9)	(13,844.2)
Collections of receivables (excluding wholesale)	13,854.5	12,760.9
(Increase) decrease in wholesale receivables - net	(578.3)	353.8
Cost of equipment on operating leases acquired	(1,290.3)	(1,359.4)
Proceeds from sales of equipment on operating leases	1,121.4	978.3
Cost of notes receivable acquired from John Deere	(234.4)	(163.9)
Collections of notes receivable from John Deere	229.2	78.2
Other	(2.1)	(44.0)
Net cash used for investing activities	(3,273.9)	(1,240.3)
Cash Flows from Financing Activities:
Increase (decrease) in commercial paper and other notes payable - net	319.5	(444.5)
Increase in securitization borrowings - net	610.4	1,048.5
Increase in payable to John Deere - net	578.4	1,775.8
Proceeds from issuance of long-term borrowings	5,210.4	3,062.5
Payments of long-term borrowings	(4,214.2)	(5,008.7)
Dividends paid	(230.0)	(250.0)
Debt issuance costs	(27.7)	(21.9)
Net cash provided by financing activities	2,246.8	161.7
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	3.9	(0.9)
Net increase in cash, cash equivalents, and restricted cash	20.2	13.2
Cash, cash equivalents, and restricted cash at beginning of period	769.4	710.9
Cash, cash equivalents, and restricted cash at end of period	$ 789.6	$ 724.1

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Statement of Consolidated Cash Flows (Parenthetical) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020	Nov. 03, 2019
Statement of Consolidated Cash Flows
Restricted cash	$ 106.9	$ 94.8	$ 99.2	$ 78.3

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Statement of Changes in Consolidated Stockholder's Equity - USD ($) $ in Millions	Common Stock	Retained Earnings Cumulative Effect from Adoption	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-Controlling Interests	Cumulative Effect from Adoption	Total
Balance at Nov. 03, 2019	$ 1,482.8		$ 2,741.6	$ (97.4)	$ 1.4		$ 4,128.4
Increase (Decrease) in Stockholder's Equity
Net income			271.3		0.1		271.4
Other comprehensive income (loss)				23.4			23.4
Dividends declared			(250.0)				(250.0)
Balance at Aug. 02, 2020	1,482.8		2,762.9	(74.0)	1.5		4,173.2
Balance at May. 03, 2020	1,482.8		2,641.7	(128.8)	1.5		3,997.2
Increase (Decrease) in Stockholder's Equity
Net income			146.2				146.2
Other comprehensive income (loss)				54.8			54.8
Dividends declared			(25.0)				(25.0)
Balance at Aug. 02, 2020	1,482.8		2,762.9	(74.0)	1.5		4,173.2
Balance (ASU 2016-13) at Nov. 01, 2020		$ (26.2)				$ (26.2)
Balance at Nov. 01, 2020	1,482.8		2,891.6	(77.8)	1.6		4,298.2
Increase (Decrease) in Stockholder's Equity
Net income			529.6		0.2		529.8
Other comprehensive income (loss)				28.4			28.4
Dividends declared			(230.0)				(230.0)
Balance at Aug. 01, 2021	1,482.8		3,165.0	(49.4)	1.8		4,600.2
Balance at May. 02, 2021	1,482.8		3,074.3	(33.1)	1.6		4,525.6
Increase (Decrease) in Stockholder's Equity
Net income			185.7		0.2		185.9
Other comprehensive income (loss)				(16.3)			(16.3)
Dividends declared			(95.0)				(95.0)
Balance at Aug. 01, 2021	$ 1,482.8		$ 3,165.0	$ (49.4)	$ 1.8		$ 4,600.2

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Organization and Consolidation

9 Months Ended

Aug. 01, 2021

Organization and Consolidation

Organization and Consolidation

(1)  Organization and Consolidation

John Deere Capital Corporation (Capital Corporation) and its subsidiaries are collectively called the Company. John Deere Financial Services, Inc. (JDFS), a wholly-owned finance holding subsidiary of Deere & Company, owns all of the outstanding common stock of Capital Corporation. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Company’s production and precision agriculture operations, small agriculture and turf operations, and construction and forestry operations and used equipment taken in trade for this equipment. The Company generally purchases retail installment sales and loan contracts (retail notes) from Deere & Company and its wholly-owned subsidiaries (collectively called John Deere). John Deere generally acquires these retail notes through John Deere retail dealers. The Company also purchases and finances a limited amount of non-Deere retail notes. The Company also finances and services revolving charge accounts, in most cases acquired from and offered through merchants in the agriculture and turf and construction and forestry markets (revolving charge accounts). The Company also provides wholesale financing for inventories of John Deere agriculture and turf and construction and forestry equipment for dealers of those products (wholesale receivables). In addition, the Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers (financing and operating leases). The Company also offers credit enhanced international export financing to select customers and dealers, which generally involves John Deere products. Retail notes, revolving charge accounts, wholesale receivables, and financing leases are collectively called “Receivables.” Receivables and equipment on operating leases are collectively called “Receivables and Leases.” The Company generally secures its Receivables, other than certain revolving charge accounts, by retaining as collateral a security interest in the goods associated with those Receivables or with the use of other collateral.

Beginning in fiscal year 2021, John Deere implemented a new operating model and reporting structure. With this change, John Deere’s agriculture and turf operations were divided into two new segments: production and precision agriculture and small agriculture and turf. There were no changes to John Deere’s construction and forestry or financial services segments. Receivables and Leases managed by the Company continue to be evaluated by market (agriculture and turf and construction and forestry). References to agriculture and turf include both production and precision agriculture and small agriculture and turf.

The Company has prepared its interim consolidated financial statements, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes 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 these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing 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 accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the Company’s business, which may result in actual outcomes differing from those estimates.

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2021 and 2020 were August 1, 2021 and August 2, 2020, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company's fiscal years generally ending in October and the associated periods in those fiscal years.

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New Accounting Standards

9 Months Ended

Aug. 01, 2021

New Accounting Standards

New Accounting Standards

(2)  New Accounting Standards

New Accounting Standards Adopted

In the first quarter of 2021, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes Accounting Standards Codification (ASC) 326, Financial Instruments – Credit Losses. This ASU was adopted using a modified-retrospective approach. The ASU, along with related amendments, revised the measurement of credit losses for financial assets measured at amortized cost from an incurred loss to an expected loss methodology. The ASU affects receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash.

The Company holds deposits from dealers (dealer deposits), which are recorded in deposits withheld from dealers and merchants, to absorb certain credit losses. Prior to adopting this ASU, the allowance for credit losses was estimated on probable credit losses incurred after consideration of recoveries from dealer deposits. The ASU considers dealer deposits and certain credit insurance contracts as freestanding credit enhancements. As a result, after adoption, credit losses recovered from dealer deposits and certain credit insurance contracts are presented in other income and no longer as part of the allowance for credit losses or the provision for credit losses. The ASU also modified the treatment of the estimated write-off on delinquent receivables by no longer including the estimated benefit of charges to the dealer deposits in the write-off amount (see Note 4). This change increases the estimated write-offs on delinquent financing receivables with the benefit of credit losses recovered from dealer deposits presented in other income. This benefit, in both situations, is recorded when the dealer deposits are charged and no longer based on estimated recoveries.

The effects of adopting the ASU on the consolidated balance sheet were as follows (in millions of dollars):

	November 1		Cumulative Effect		November 2
	2020		from Adoption		2020
Assets
Allowance for credit losses	$	(129.1)	$	(19.7)	$	(148.8)
Deferred income taxes		27.1		.7		27.8
Liabilities
Accounts payable and accrued expenses	$	922.3	$	(.5)	$	921.8
Deposits withheld from dealers and merchants		114.8		13.5		128.3
Deferred income taxes		345.9		(5.8)		340.1
Stockholder’s equity
Retained earnings	$	2,891.6	$	(26.2)	$	2,865.4

Note 4 contains additional disclosures as well as the Company’s updated allowance for credit losses accounting policy.

The Company also adopted the following standards in 2021, none of which had a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

No. 2018-15	Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software
No. 2019-04	Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
No. 2021-01	Reference Rate Reform (Topic 848): Scope

New Accounting Standards to be Adopted

The Company will adopt the following standards in future periods, none of which are expected to have a material effect on the Company’s consolidated financial statements:

Accounting Standards Updates

No. 2019-12	Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes
No. 2020-08	Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs

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Other Comprehensive Income Items

9 Months Ended

Aug. 01, 2021

Other Comprehensive Income Items

Other Comprehensive Income Items

(3)  Other Comprehensive Income Items

The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars):

			Unrealized		Unrealized		Accumulated
	Cumulative		Gain (Loss)		Gain (Loss)		Other
	Translation		on		on		Comprehensive
	Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance November 3, 2019	$	(88.4)	$	(7.0)	$	(2.0)	$	(97.4)
Other comprehensive income (loss) items before reclassification		28.2		(13.9)				14.3
Amounts reclassified from accumulated other comprehensive income				9.1				9.1
Net current period other comprehensive income (loss)		28.2		(4.8)				23.4
Balance August 2, 2020	$	(60.2)	$	(11.8)	$	(2.0)	$	(74.0)
Balance November 1, 2020	$	(69.5)	$	(6.7)	$	(1.6)	$	(77.8)
Other comprehensive income (loss) items before reclassification		22.6		(.6)		(.1)		21.9
Amounts reclassified from accumulated other comprehensive income				6.5				6.5
Net current period other comprehensive income (loss)		22.6		5.9		(.1)		28.4
Balance August 1, 2021	$	(46.9)	$	(.8)	$	(1.7)	$	(49.4)

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended August 1, 2021	Amount		Credit		Amount
Cumulative translation adjustment	$	(16.7)			$	(16.7)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.9)	$	.2		(.7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.6		(.3)		1.3
Net unrealized gain (loss) on derivatives		.7		(.1)		.6
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)				(.2)		(.2)
Total other comprehensive income (loss)	$	(16.0)	$	(.3)	$	(16.3)
Nine Months Ended August 1, 2021
Cumulative translation adjustment	$	22.6			$	22.6
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.8)	$	.2		(.6)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		8.2		(1.7)		6.5
Net unrealized gain (loss) on derivatives		7.4		(1.5)		5.9
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.2)		.1		(.1)
Total other comprehensive income (loss)	$	29.8	$	(1.4)	$	28.4
Three Months Ended August 2, 2020
Cumulative translation adjustment	$	50.0			$	50.0
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.1)	$	.2		(.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		6.4		(1.3)		5.1
Net unrealized gain (loss) on derivatives		5.3		(1.1)		4.2
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.6				.6
Total other comprehensive income (loss)	$	55.9	$	(1.1)	$	54.8
Nine Months Ended August 2, 2020
Cumulative translation adjustment	$	28.2			$	28.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(17.6)	$	3.7		(13.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		11.5		(2.4)		9.1
Net unrealized gain (loss) on derivatives		(6.1)		1.3		(4.8)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.8)		.8
Total other comprehensive income (loss)	$	21.3	$	2.1	$	23.4

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Receivables

9 Months Ended

Aug. 01, 2021

Receivables

Receivables

(4)  Receivables

Credit Quality

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when retail notes, revolving charge accounts, and financing lease accounts are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. Finance income for non-performing Receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

Due to the economic effects of COVID, the Company provided short-term payment relief to dealers and retail customers during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. Receivables granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 3 percent of the Receivables balance. The majority of Receivables granted short-term relief are beyond the deferral period and have either resumed making payments or are reported as delinquent based on the modified payment schedule.

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, Customer Receivables) at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	8,075.6	$	6,472.1	$	3,246.0	$	1,695.6	$	733.9	$	207.4	$	3,570.9	$	24,001.5
30-59 days past due		31.1		42.1		25.1		14.9		5.3		2.7		11.4		132.6
60-89 days past due		11.7		21.4		10.0		4.4		2.6		1.1		3.4		54.6
90+ days past due		.1		.5		.2		.2								1.0
Non-performing		11.0		45.8		31.6		28.3		13.1		14.4		5.7		149.9
Construction and forestry
Current		1,765.6		1,413.7		715.0		281.3		63.2		10.6		91.5		4,340.9
30-59 days past due		28.2		38.0		21.8		8.0		2.7		.7		2.9		102.3
60-89 days past due		11.3		16.1		8.6		4.2		1.3		.3		1.1		42.9
90+ days past due		3.2				4.5										7.7
Non-performing		9.0		44.1		36.0		17.7		7.2		3.8		.8		118.6
Total Customer Receivables	$	9,946.8	$	8,093.8	$	4,098.8	$	2,054.6	$	829.3	$	241.0	$	3,687.7	$	28,952.0

The credit quality analysis of Customer Receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020						August 2, 2020
	Retail Notes & Financing Leases		Revolving Charge Accounts		Total		Retail Notes & Financing Leases		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	18,341.2	$	3,710.3	$	22,051.5	$	17,188.9	$	3,794.6	$	20,983.5
30-59 days past due		111.4		11.5		122.9		114.3		18.3		132.6
60-89 days past due		47.6		3.5		51.1		59.4		3.5		62.9
90+ days past due		2.0				2.0		3.6				3.6
Non-performing		172.7		5.4		178.1		204.9		7.4		212.3
Construction and forestry
Current		3,759.5		92.3		3,851.8		3,572.8		90.2		3,663.0
30-59 days past due		82.0		2.4		84.4		60.4		2.6		63.0
60-89 days past due		38.8		1.1		39.9		14.6		1.0		15.6
90+ days past due		1.9				1.9
Non-performing		79.5		.9		80.4		83.3		.7		84.0
Total Customer Receivables	$	22,636.6	$	3,827.4	$	26,464.0	$	21,302.2	$	3,918.3	$	25,220.5

The credit quality analysis of wholesale receivables at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	260.9	$	106.2	$	30.6	$	12.5	$	3.1	$	.5	$	5,946.0	$	6,359.8
30-59 days past due														10.1		10.1
60-89 days past due														3.8		3.8
90+ days past due														2.8		2.8
Non-performing														4.3		4.3
Construction and forestry
Current		7.5		5.1		3.9		.4						1,332.0		1,348.9
30-59 days past due														1.3		1.3
60-89 days past due														.2		.2
90+ days past due
Non-performing
Total wholesale receivables	$	268.4	$	111.3	$	34.5	$	12.9	$	3.1	$	.5	$	7,300.5	$	7,731.2

The credit quality analysis of wholesale receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020		August 2, 2020
Wholesale receivables:
Agriculture and turf
Current	$	5,693.7	$	6,905.0
30-59 days past due		3.9		10.9
60-89 days past due		4.4		1.1
90+ days past due		1.1		1.4
Non-performing		4.0		3.8
Construction and forestry
Current		1,385.9		1,499.6
30-59 days past due		.3		3.4
60-89 days past due				.3
90+ days past due				1.1
Non-performing				2.2
Total wholesale receivables	$	7,093.3	$	8,428.8

Allowance for Credit Losses

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.  

The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex Customer Receivable pools, while weighted average remaining maturity (WARM) models are used for smaller and less complex Customer Receivable pools. Transition matrix models, which are used for the majority of the Customer Receivables, estimate credit losses using historical delinquency and default information to assign probabilities that a receivable will pay as contractually scheduled or become delinquent and advance through the various delinquency stages. The model simulates the runoff of the portfolio, month-by-month, over the life of the receivables until the balances are fully repaid or default, using roll rates applied to the outstanding portfolio. The roll rates are applied based on the delinquency status of the customer accounts and are further segmented based on the credit risk and remaining duration of the underlying receivables. Estimated recovery rates are applied to the balance at default to calculate the expected credit losses. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. The WARM models apply historical average annual loss rates, adjusted for current and forecasted economic conditions, to the projected portfolio runoff. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions and reasonable and supportable forecasts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary.

Recoveries from freestanding credit enhancements, such as dealer deposits, are not included in the estimate of expected credit losses. Recoveries from dealer deposits are recognized in other income on the statement of consolidated income when the dealer’s withholding account is charged. During the three and nine months ended August 1, 2021, $3.2 million and $9.8 million, respectively, were recorded in other income related to recoveries from freestanding credit enhancements. Prior to the adoption of ASU No. 2016-13, the allowance for credit losses was estimated on probable credit losses incurred after consideration of expected recoveries from freestanding credit enhancements.

An analysis of the allowance for credit losses and investment in Receivables during 2021 was as follows (in millions of dollars):

	Three Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	101.3	$	18.9	$	9.6	$	129.8
Provision (credit) for credit losses*		13.6		(.1)		2.2		15.7
Write-offs		(8.5)		(8.4)		(.2)		(17.1)
Recoveries		3.2		7.6				10.8
Translation adjustments		(.2)		.1		(.1)		(.2)
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0

	Nine Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption (see Note 2)		32.5		(12.2)		(.6)		19.7
Provision (credit) for credit losses*		11.2		(15.9)		2.1		(2.6)
Write-offs		(19.7)		(22.7)		(.3)		(42.7)
Recoveries		8.1		26.6				34.7
Translation adjustments		.4				.4		.8
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0
Receivables:
End of period balance	$	25,264.3	$	3,687.7	$	7,731.2	$	36,683.2

*Excludes provision for credit losses on unfunded commitments of $2.1 million for the nine months ended August 1, 2021, which is recorded in accounts payable and accrued expenses on the consolidated balance sheet. There was no change in the provision for credit losses on unfunded commitments for the third quarter of 2021.

The allowance for credit losses on Receivables increased $9.2 million in the third quarter of 2021, primarily due to growth in the retail notes and financing leases portfolio.

For the first nine months of 2021, the allowance for credit losses increased $9.9 million, primarily due to the adoption of ASU No. 2016-13 and growth in the retail notes and financing leases portfolio. These increases were partially offset by a reduction in the allowance on revolving charge accounts and a lower allowance on construction and forestry retail notes and financing leases. The allowance on revolving charge accounts was favorably impacted by strong payment performance due to continued improvements in the agriculture market, while expected credit losses on construction and forestry retail notes and financing leases decreased due to improving market conditions and better than expected performance of accounts granted payment relief due to the economic effects of COVID.

An analysis of the allowance for credit losses and investment in Receivables during 2020 was as follows (in millions of dollars):

	Three Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	88.4	$	42.3	$	9.1	$	139.8
Provision (credit) for credit losses		3.3		13.2		(.5)		16.0
Write-offs		(5.5)		(21.3)		(.1)		(26.9)
Recoveries		2.4		8.1		.4		10.9
Translation adjustments		.4				.4		.8
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6

	Nine Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	53.7	$	39.3	$	7.6	$	100.6
Provision (credit) for credit losses		70.5		31.3		(1.0)		100.8
Write-offs		(39.6)		(50.1)		(.9)		(90.6)
Recoveries		4.5		21.8		1.3		27.6
Translation adjustments		(.1)				2.3		2.2
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6
Receivables:
End of period balance	$	21,302.2	$	3,918.3	$	8,428.8	$	33,649.3

The allowance for credit losses increased $40.0 million in the first nine months of 2020 primarily due to the negative economic effects of COVID and other macroeconomic issues, which significantly affected certain retail borrowers, particularly of construction equipment.

Troubled Debt Restructurings

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first nine months of 2021, the Company identified 287 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $10.3 million pre-modification and $9.4 million post-modification. During the first nine months of 2020, there were 328 Receivable contracts, primarily retail notes, with aggregate balances of $12.6 million pre-modification and $11.6 million post-modification. The short-term relief related to COVID mentioned on page 11 did not meet the definition of a troubled debt restructuring. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At August 1, 2021, the Company had no commitments to provide additional financing to customers whose accounts were modified in troubled debt restructurings.

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Securitization of Receivables

9 Months Ended

Aug. 01, 2021

Securitization of Receivables

Securitization of Receivables

(5)  Securitization of Receivables

The Company, as a part of its overall funding strategy, periodically transfers certain Receivables (retail notes) into variable interest entities (VIEs) that are special purpose entities (SPEs), or non-VIE banking operations, as part of its asset-backed securities programs (securitizations). The structure of these transactions is such that the transfer of the retail notes does not meet the accounting criteria for sales of receivables, and is, therefore, accounted for as a secured borrowing. SPEs utilized in securitizations of retail notes differ from other entities included in the Company’s consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the non-VIEs is restricted by terms of the documents governing the securitization transactions.

In these securitizations, the retail notes are transferred to certain SPEs or to non-VIE banking operations, which in turn issue debt to investors. The debt securities issued to the third-party investors result in secured borrowings, which are recorded as “Securitization borrowings” on the consolidated balance sheet. The securitized retail notes are recorded as “Retail notes securitized” on the consolidated balance sheet. The total restricted assets on the consolidated balance sheet related to these securitizations include the retail notes securitized less an allowance for credit losses, and other assets primarily representing restricted cash. Restricted cash results from contractual requirements in securitized borrowing arrangements and serves as a credit enhancement. The restricted cash is used to satisfy payment deficiencies, if any, in the required payments on secured borrowings. The balance of restricted cash is contractually stipulated and is either a fixed amount as determined by the initial balance of the retail notes securitized or a fixed percentage of the outstanding balance of the retail notes securitized. The restriction is removed either after all secured borrowing payments are made or proportionally as these receivables are collected and borrowing obligations reduced. For those securitizations in which retail notes are transferred into SPEs, the SPEs supporting the secured borrowings are consolidated unless the Company does not have both the power to direct the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the SPEs. No additional support to these SPEs beyond what was previously contractually required has been provided during the reporting periods.

In certain securitizations, the Company consolidates the SPEs since it has both the power to direct the activities that most significantly impact the SPEs’ economic performance through its role as servicer of all the Receivables held by the SPEs and the obligation through variable interests in the SPEs to absorb losses or receive benefits that could potentially be significant to the SPEs. The restricted assets (retail notes securitized, allowance for credit losses, and other assets) of the consolidated SPEs totaled $3,605.3 million, $2,897.5 million, and $3,342.5 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $3,487.2 million, $2,856.2 million, and $3,258.8 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The credit holders of these SPEs do not have legal recourse to the Company’s general credit.

In certain securitizations, the Company transfers retail notes to non-VIE banking operations, which are not consolidated since the Company does not have a controlling interest in the entities. The Company’s carrying values and interests related to the securitizations with the unconsolidated non-VIEs were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $554.5 million, $549.7 million, and $642.4 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) were $520.5 million, $528.1 million, and $606.0 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

In certain securitizations, the Company transfers retail notes into bank-sponsored, multi-seller, commercial paper conduits, which are SPEs that are not consolidated. The Company does not service a significant portion of the conduits’ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduits’ economic performance. These conduits provide a funding source to the Company (as well as other transferors into the conduit) as they fund the retail notes through the issuance of commercial paper. The Company’s carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,341.2 million, $1,327.3 million, and $1,551.3 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,259.0 million, $1,275.1 million, and $1,463.4 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets was as follows (in millions of dollars):

	August 1
	2021
Carrying value of liabilities	$	1,259.0
Maximum exposure to loss		1,341.2

The total assets of unconsolidated VIEs related to securitizations were approximately $37 billion at August 1, 2021.

The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Retail notes securitized	$	5,408.2	$	4,689.2	$	5,446.2
Allowance for credit losses		(19.9)		(12.6)		(14.0)
Other assets		112.7		97.9		104.0
Total restricted securitized assets	$	5,501.0	$	4,774.5	$	5,536.2

The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Securitization borrowings	$	5,264.6	$	4,656.2	$	5,324.1
Accrued interest on borrowings		2.1		3.2		4.1
Total liabilities related to restricted securitized assets	$	5,266.7	$	4,659.4	$	5,328.2

The secured borrowings related to these restricted securitized retail notes are obligations that are payable as the retail notes are liquidated. Repayment of the secured borrowings depends primarily on cash flows generated by the restricted assets. Due to the Company’s short-term credit rating, cash collections from these restricted assets are not required to be placed into a segregated collection account until immediately prior to the time payment is required to the secured creditors. At August 1, 2021, the maximum remaining term of all restricted securitized retail notes was approximately seven years.

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Leases

9 Months Ended

Aug. 01, 2021

Leases

Leases

(6)  Leases

The Company leases John Deere equipment and a limited amount of non-Deere equipment to retail customers through sales-type, direct financing, and operating leases. Sales-type and direct financing leases are reported in financing leases on the consolidated balance sheet. Operating leases are reported in equipment on operating leases – net on the consolidated balance sheet.

Lease revenues earned by the Company were as follows (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Sales-type and direct financing lease revenues	$	12.7	$	12.0	$	35.8	$	34.3
Operating lease revenues		237.9		253.5		724.3		768.8
Variable lease revenues		5.1		4.8		15.4		14.7
Total lease revenues	$	255.7	$	270.3	$	775.5	$	817.8

Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets and late fees.

The cost of equipment on operating leases by product category was as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Agriculture and turf	$	5,043.4	$	5,210.4	$	5,082.8
Construction and forestry		1,391.3		1,595.3		1,648.3
Total		6,434.7		6,805.7		6,731.1
Accumulated depreciation		(1,470.9)		(1,507.9)		(1,473.9)
Equipment on operating leases - net	$	4,963.8	$	5,297.8	$	5,257.2

Operating lease assets are recorded at cost and depreciated to their estimated residual value on a straight-line method over the terms of the leases. The Company reviews residual value estimates during the lease term and tests the carrying value of its operating lease assets for impairment when events or circumstances necessitate. The depreciation is adjusted on a straight-line basis over the remaining lease term if residual value estimates are revised. There were no impairment losses on operating leases recorded during the nine months ended August 1, 2021. During the nine months ended August 2, 2020, the Company recorded impairment losses on operating leases of $21.0 million due to higher expected return rates and lower estimated values of used construction equipment. The operating lease impairment losses were recorded in administrative and operating expenses on the statement of consolidated income.

The total operating lease residual values at August 1, 2021, November 1, 2020, and August 2, 2020 were $3,598.9 million, $3,826.3 million, and $3,791.7 million, respectively. Certain operating leases are subject to residual value guarantees. The total residual value guarantees were $247.3 million, $141.0 million, and $110.1 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. The increase in residual value guarantees is primarily due to guarantees provided by John Deere dealers, which generally provide a first-loss residual value guarantee on operating lease originations effective after January 2020.

The Company discusses with lessees and dealers options to purchase the equipment or extend the lease prior to operating lease maturity. Equipment returned to the Company upon termination of leases is remarketed by the Company. The matured operating lease inventory balances at August 1, 2021, November 1, 2020, and August 2, 2020 were $46.9 million, $64.5 million, and $100.7 million, respectively. Matured operating lease inventory is reported in other assets on the consolidated balance sheet. During the nine months ended August 2, 2020, the Company recorded impairment losses on matured operating lease inventory of $9.8 million due to lower estimated values of used construction equipment. There were no impairment losses recorded on matured operating lease inventory during the nine months ended August 1, 2021. The impairment losses on

matured operating lease inventory were included in administrative and operating expenses on the statement of consolidated income.

Due to the economic effects of COVID, the Company provided short-term payment relief to lessees during 2020, and to a much lesser extent in 2021. The relief was provided in regional programs and on a case-by-case basis with customers that were generally current in their payment obligations. The operating leases granted relief since the beginning of the pandemic that remained outstanding at August 1, 2021 represented approximately 2 percent of the Company’s operating lease portfolio. The majority of operating leases granted short-term relief are beyond the deferral period and have resumed making payments.

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Notes Receivable from John Deere

9 Months Ended

Aug. 01, 2021

Notes Receivable from John Deere

Notes Receivable from John Deere

(7)  Notes Receivable from John Deere

The Company makes loans to affiliated companies. The Company receives interest from John Deere at competitive market interest rates. The lending agreements mature over the next seven years. Interest earned from John Deere was $3.8 million for the third quarter and $10.3 in the first nine months of 2021, compared with $4.4 million and $12.4 million for the same periods last year, respectively.

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Limited Liability Company John Deere Financial	$	198.6	$	132.5	$	125.6
Banco John Deere S.A.		167.4		217.5		241.2
Total Notes Receivable from John Deere	$	366.0	$	350.0	$	366.8

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Long-Term Borrowings

9 Months Ended

Aug. 01, 2021

Long-Term Borrowings

Long-Term Borrowings

(8)  Long-Term Borrowings

Long-term borrowings of the Company at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of the following (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Senior Debt:
Medium-term notes	$	20,174.1	$	19,320.6	$	20,499.8
Other notes		19.8		38.2		43.3
Total senior debt		20,193.9		19,358.8		20,543.1
Unamortized debt discount and debt issuance costs		(57.2)		(47.7)		(51.0)
Total	$	20,136.7	$	19,311.1	$	20,492.1

The medium-term notes in the table above include fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $19,722.5, $18,668.9, and $19,722.7 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

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Commitments and Contingencies

9 Months Ended

Aug. 01, 2021

Commitments and Contingencies

Commitments and Contingencies

(9)  Commitments and Contingencies

At August 1, 2021, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $2,049.2 million of medium-term notes outstanding, and a fair value liability of $43.6 million for derivatives outstanding, prior to considering applicable netting provisions, with notional amounts of $3,021.5 million that were guaranteed by Capital Corporation. The weighted average interest rate on the medium-term notes at August 1, 2021 was 2.2 percent with a maximum remaining maturity of approximately six years.

Capital Corporation has a variable interest in John Deere Canada Funding Inc. (JDCFI), a wholly-owned subsidiary of John Deere Financial Inc., which was created as a VIE to issue debt in public markets to fund the operations of affiliated companies in Canada. Capital Corporation has a variable interest in JDCFI because it provides guarantees for all debt issued by JDCFI, however it does not consolidate JDCFI because it does not have the power to direct the activities that most significantly impact JDCFI’s economic performance. Capital

Corporation has no carrying value of assets or liabilities related to JDCFI. Its maximum exposure to loss is the amount of the debt issued by JDCFI and guaranteed by Capital Corporation, which was $964.3 million at August 1, 2021. The weighted average interest rate on the debt at August 1, 2021 was 2.6 percent with a maximum remaining maturity of approximately two years. No additional support beyond what was previously contractually required has been provided to JDCFI during the reporting periods.

The Company has commitments to extend credit to customers and John Deere dealers through lines of credit and other pre-approved credit arrangements. The Company applies the same credit policies and approval process for these commitments to extend credit as it does for its Receivables. Collateral is not required for these commitments, but if credit is extended, collateral may be required upon funding. The amount of unused commitments to extend credit to John Deere dealers was $10.0 billion at August 1, 2021. The amount of unused commitments to extend credit to customers was $28.8 billion at August 1, 2021. A significant portion of these commitments is not expected to be fully drawn upon; therefore, the total commitment amounts likely do not represent a future cash requirement. The Company generally has the right to unconditionally cancel, alter, or amend the terms of these commitments at any time. Over 95 percent of the unused commitments to extend credit to customers relate to revolving charge accounts. At August 1, 2021, Capital Corporation had $131.2 million in unused loan commitments, which are unconditionally cancellable, denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia.

At August 1, 2021, the Company had restricted other assets associated with borrowings related to securitizations (see Note 5). Excluding the securitization programs, the remaining balance of restricted other assets was not material as of August 1, 2021.

The Company is subject to various unresolved legal actions which arise in the normal course of its business, the most prevalent of which relate to retail credit matters. The Company believes the reasonably possible range of losses for these unresolved legal actions would not have a material effect on its consolidated financial statements.

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Income Taxes

9 Months Ended

Aug. 01, 2021

Income Taxes

Income Taxes

(10)  Income Taxes

The Company’s unrecognized tax benefits at August 1, 2021 were $29.6 million, compared to $33.3 million at November 1, 2020, and $31.0 million at August 2, 2020. The liability at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of approximately $19.9 million, $17.2 million, and $16.1 million, respectively, which would affect the effective tax rate if the tax benefits were recognized. The remaining liability was related to tax positions for which there are offsetting tax receivables, or the uncertainty was only related to timing. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be material.

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Fair Value Measurements

9 Months Ended

Aug. 01, 2021

Fair Value Measurements

Fair Value Measurements

(11)   Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include significant other observable inputs such as quoted prices for similar assets or liabilities in active markets; identical assets or liabilities in inactive markets; observable inputs such as interest rates and yield curves; and other market-corroborated inputs. Level 3 measurements include significant unobservable inputs.

The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	August 1, 2021				November 1, 2020				August 2, 2020
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	31,155.9	$	31,264.6	$	28,751.6	$	28,931.7	$	28,076.5	$	28,275.8
Retail notes securitized – net		5,388.3		5,454.3		4,676.6		4,772.9		5,432.2		5,543.9
Securitization borrowings		5,264.6		5,289.3		4,656.2		4,697.6		5,324.1		5,380.7
Current maturities of long-term borrowings		5,746.0		5,800.4		5,741.6		5,801.1		4,910.2		4,958.2
Long-term borrowings		20,136.7		20,557.9		19,311.1		19,784.4		20,492.1		21,038.2

Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings.

Fair values of Receivables that were issued long-term were based on the discounted values of their related cash flows at interest rates currently being offered by the Company for similar Receivables. The fair values of the remaining Receivables approximated the carrying amounts.

Fair values of long-term borrowings and securitization borrowings were based on current market quotes for identical or similar borrowings and credit risk, or on the discounted values of their related cash flows at current market interest rates. Certain long-term borrowings have been swapped to current variable interest rates. The carrying values of these long-term borrowings include adjustments related to fair value hedges.

Assets and liabilities measured at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Marketable securities
International debt securities	$	2.1	$	2.2	$	2.4
Receivables from John Deere
Derivatives:
Interest rate contracts		331.7		575.5		795.4
Cross-currency interest rate contracts		2.0		7.7		9.1
Other assets
Derivatives:
Foreign exchange contracts		.5		3.8		3.7
Total assets	$	336.3	$	589.2	$	810.6
Other payables to John Deere
Derivatives:
Interest rate contracts	$	43.4	$	29.4	$	42.5
Cross-currency interest rate contracts		2.3		.7		.1
Accounts payable and accrued expenses
Derivatives:
Foreign exchange contracts		1.7		.9		6.2
Total liabilities	$	47.4	$	31.0	$	48.8

Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value.  The cash equivalents consist primarily of time deposits and money market funds.

The international debt securities mature over the next nine years. At August 1, 2021, the amortized cost basis and fair value of these available-for-sale debt securities were $4.7 million and $2.1 million, respectively.

Fair value, nonrecurring Level 3 measurements from impairments, excluding Receivables with specific allowances which were not material, were as follows (in millions of dollars):

	Fair Value				Losses
					Three Months Ended		Nine Months Ended
	August 1	November 1		August 2	August 1	August 2	August 1	August 2
	2021	2020		2020	2021	2020	2021	2020
Equipment on operating leases – net		$	340.3					$	21.0
Other assets			56.5						9.8
Total		$	396.8					$	30.8

The fair value shown for November 1, 2020 in the table above represents the fair value assessment at May 3, 2020, as the result of impairments taken on operating leases and matured operating lease inventory in the second quarter of 2020 (see Note 6).

The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the consolidated balance sheet at fair value:

Marketable securities – The international debt securities are valued using quoted prices for identical assets in inactive markets.

Derivatives – The Company’s derivative financial instruments consist of interest rate contracts (swaps and caps), foreign currency exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps). The portfolio is valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies.

Receivables – Specific reserve impairments are based on the fair value of the collateral, which is measured using a market approach (appraisal values or realizable values). Inputs include a selection of realizable values.

Equipment on operating leases - net – The impairments were based on an income approach (discounted cash flow), using the contractual payments, plus estimates of return rates and equipment sale price at lease maturity. Inputs included historical return rates and realized sales values.

Other assets – The impairments of the matured operating lease inventory were measured at the fair value of that inventory. The valuations were based on a market approach. The inputs included sales of comparable assets.

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Derivative Instruments

9 Months Ended

Aug. 01, 2021

Derivative Instruments

Derivative Instruments

(12)  Derivative Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

Cash Flow Hedges

Certain interest rate contracts (swaps) were designated as hedges of future cash flows from borrowings. The total notional amounts of the receive-variable/pay-fixed interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $1,750.0 million, $1,550.0 million, and $1,900.0 million, respectively. Fair value gains or losses on these cash flow hedges were recorded in other comprehensive income (OCI) and subsequently reclassified into interest expense in the same periods during which the hedged transactions impact earnings. These amounts offset the effects of interest rate changes on the related borrowings. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows.

The amount of loss recorded in OCI at August 1, 2021 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $1.0 million after-tax. No gains or losses were reclassified from OCI to earnings based on the probability that the original forecasted transaction would not occur.

Fair Value Hedges

Certain interest rate contracts (swaps) were designated as fair value hedges of borrowings. The total notional amounts of the receive-fixed/pay-variable interest rate contracts at August 1, 2021, November 1, 2020, and August 2, 2020 were $7,934.9 million, $6,525.7 million, and $8,179.8 million, respectively. The fair value gains or losses on these contracts were generally offset by fair value gains or losses on the hedged items (fixed-rate borrowings) with both items recorded in interest expense.

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows (in millions of dollars):

			Cumulative Increase (Decrease) of Fair Value
			Hedging Adjustments Included in the
			Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
August 1, 2021	Hedged Item		Relationships		Relationships		Total
Current maturities of long-term borrowings	$	187.8	$	4.0	$	(.9)	$	3.1
Long-term borrowings		8,165.4		261.3		190.3		451.6
November 1, 2020
Current maturities of long-term borrowings	$	2.5			$	2.5	$	2.5
Long-term borrowings		7,149.8	$	530.0		121.6		651.6
August 2, 2020
Current maturities of long-term borrowings	$	104.6	$	2.6	$	2.0	$	4.6
Long-term borrowings		8,826.4		737.6		39.5		777.1

Derivatives Not Designated as Hedging Instruments

The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (futures, forwards, and swaps), and cross-currency interest rate contracts (swaps), which were not formally designated as hedges. These derivatives were held as economic hedges for underlying interest rate or foreign currency exposures primarily for certain borrowings. The total notional amounts of the interest rate swaps at August 1, 2021, November 1, 2020, and August 2, 2020 were $2,921.4 million, $2,336.6 million, and $2,423.2 million, the foreign exchange contracts were $98.0 million, $172.6 million, and $211.1 million, and the cross-currency interest rate contracts were $197.4 million, $111.5 million, and $123.5 million, respectively.

To facilitate borrowings through securitization of retail notes, interest rate caps were sold with notional amounts of $1,807.6 million, $1,961.4 million, and $2,171.0 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively. Interest rate caps were also purchased with notional amounts of $1,807.6 million, $1,961.4 million, and $2,171.0 million at the same dates. The fair value gains or losses from the interest rate contracts were recognized currently in interest expense and the gains or losses from foreign exchange contracts in administrative and operating expenses, generally offsetting over time the expenses on the exposures being hedged. The cash flows from these non-designated contracts were recorded in operating activities in the statement of consolidated cash flows.

Fair values of derivative instruments in the consolidated balance sheet were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	321.0	$	565.2	$	785.3
Not designated as hedging instruments:
Interest rate contracts		10.7		10.3		10.1
Cross-currency interest rate contracts		2.0		7.7		9.1
Total not designated		12.7		18.0		19.2
Other Assets
Not designated as hedging instruments:
Foreign exchange contracts		.5		3.8		3.7
Total not designated		.5		3.8		3.7
Total derivative assets	$	334.2	$	587.0	$	808.2
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	32.3	$	12.7	$	24.1
Not designated as hedging instruments:
Interest rate contracts		11.1		16.7		18.4
Cross-currency interest rate contracts		2.3		.7		.1
Total not designated		13.4		17.4		18.5
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign exchange contracts		1.7		.9		6.2
Total derivative liabilities	$	47.4	$	31.0	$	48.8

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Fair Value Hedges
Interest rate contracts - Interest expense	$	139.9	$	76.7	$	(70.7)	$	568.0
Cash Flow Hedges
Recognized in OCI
Interest rate contracts - OCI (pretax)		(.9)		(1.1)		(.8)		(17.6)
Reclassified from OCI
Interest rate contracts - Interest expense		(1.6)		(6.4)		(8.2)		(11.5)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(2.9)	$	(2.2)	$	(4.5)	$	(3.0)
Foreign exchange contracts - Administrative and operating expenses *		(4.5)		(47.2)		(20.0)		47.3
Total not designated	$	(7.4)	$	(49.4)	$	(24.5)	$	44.3

*    Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

Included in the table above are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amounts the Company recognized on these affiliate party transactions for the three months ended August 1, 2021 and August 2, 2020 were gains of $133.3 million and $62.8 million, respectively. The amounts the Company recognized on these affiliate party transactions for the nine months ended August 1, 2021 and August 2, 2020 were a loss of $91.6 million and a gain of $568.1 million, respectively.

Counterparty Risk and Collateral

Derivative instruments are subject to significant concentrations of credit risk to the banking sector. The Company manages individual unrelated external counterparty exposure by setting limits that consider the credit rating of the unrelated external counterparty, the credit default swap spread of the counterparty, and other financial commitments and exposures between the Company and the unrelated external counterparty banks. All interest rate derivatives are transacted under International Swaps and Derivatives Association (ISDA) documentation. Each master agreement permits the net settlement of amounts owed in the event of default or termination. None of the Company’s derivative agreements contain credit-risk-related contingent features.

The Company’s outstanding derivatives have been transacted with both unrelated external counterparties and with John Deere. For derivatives transacted with John Deere, the Company utilizes a centralized hedging structure in which John Deere enters into a derivative transaction with an unrelated external counterparty and simultaneously enters into a derivative transaction with the Company. Except for collateral provisions, the terms of the transaction between the Company and John Deere are identical to the terms of the transaction between John Deere and its unrelated external counterparty.

The Company has ISDA agreements with John Deere that permit the net settlement of amounts owed between counterparties in the event of early termination. In addition, the Company has a loss sharing agreement with John Deere in which it has agreed to absorb any losses and expenses John Deere incurs if an unrelated external counterparty fails to meet its obligations on a derivative transaction that John Deere entered into to manage exposures of the Company. The loss sharing agreement did not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of August 1, 2021, November 1, 2020, and August 2, 2020.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

August 1, 2021
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	.5	$	(.1)		$	.4
John Deere		333.7		(43.1)			290.6
Liabilities
External		1.7		(.1)			1.6
John Deere		45.7		(43.1)			2.6

November 1, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.8	$	(.7)		$	3.1
John Deere		583.2		(23.5)			559.7
Liabilities
External		.9		(.7)			.2
John Deere		30.1		(23.5)			6.6

August 2, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.7	$	(.2)		$	3.5
John Deere		804.5		(35.4)			769.1
Liabilities
External		6.2		(.2)			6.0
John Deere		42.6		(35.4)			7.2

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Pension and Other Postretirement Benefits

9 Months Ended

Aug. 01, 2021

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

(13)   Pension and Other Postretirement Benefits

The Company is a participating employer in certain Deere & Company sponsored defined benefit pension plans for employees in the U.S. and certain defined benefit pension plans outside the U.S. These pension plans provide for benefits that are based primarily on years of service and employee compensation. Pension expense is actuarially determined based on the Company’s employees included in the plan. The Company’s pension expense was not material for the three and nine month periods ended August 1, 2021 and August 2, 2020. The accumulated benefit obligation and plan net assets for the employees of the Company are not determined separately from Deere & Company. The Company provides defined benefit health care and life insurance plans for certain retired employees in the U.S. as a participating employer in Deere & Company’s sponsored plans. Health care and life insurance benefits expense is actuarially determined based on the Company’s employees included in the plans and amounted to $1.5 million for the third quarter and $4.6 million for the first nine months of 2021, compared with $1.7 million and $8.3 million for the same periods last year. The decrease from the prior year is primarily due to a $3.3 million curtailment loss in the first quarter of 2020 related to voluntary employee-separation programs (see Note 14). Further disclosure for these plans is included in Deere & Company’s Form 10-Q for the quarter ended August 1, 2021.

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Employee-Separation Programs

9 Months Ended

Aug. 01, 2021

Employee-Separation Programs

Employee-Separation Programs

(14)   Employee-Separation Programs

During the first nine months of 2020, the Company incurred voluntary employee-separation program expenses of $8.7 million as part of its efforts to create a more efficient organization structure and reduce operating costs. The programs provided for cash payments based on years of service. The expenses were recorded primarily in the period in which the employees irrevocably accepted the separation offer. Included in the total pretax expense noted above for the first nine months of 2020 was a non-cash charge of $3.3 million resulting from a curtailment in certain other postretirement benefit plans during the first quarter of 2020 (see Note 13). The expenses were recorded in administrative and operating expenses.

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Organization and Consolidation (Policies)

9 Months Ended

Aug. 01, 2021

Organization and Consolidation

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The COVID pandemic has resulted in uncertainties in the Company’s business, which may result in actual outcomes differing from those estimates.

Fiscal Year

The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The third quarter ends for fiscal year 2021 and 2020 were August 1, 2021 and August 2, 2020, respectively. Both third quarters contained 13 weeks, while both year-to-date periods contained 39 weeks. Unless otherwise stated, references to particular years, quarters, or months refer to the Company's fiscal years generally ending in October and the associated periods in those fiscal years.

Receivables - Non-Performing, Policy

The Company monitors the credit quality of Receivables based on delinquency status. Past due balances of Receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing Receivables represent receivables for which the Company has ceased accruing finance income. Generally, when retail notes, revolving charge accounts, and financing lease accounts are 90 days delinquent, accrual of finance income and lease revenue is suspended, and accrued finance income previously recognized is reversed. Generally, when a wholesale receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended and whether accrued finance income previously recognized should be reversed. Finance income for non-performing Receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

Receivable balances are written off to the allowance for credit losses when, in the judgment of management, they are considered uncollectible. Generally, when retail notes and financing lease accounts are 120 days delinquent, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Revolving charge accounts are generally deemed to be uncollectible and written off to the allowance for credit losses when delinquency reaches 120 days. Generally, when a wholesale account becomes 60 days delinquent, the Company determines whether the collateral should be repossessed or the account designated for litigation, and the estimated uncollectible amount is written off to the allowance for credit losses.

Allowance for Credit Losses, Policy

The allowance for credit losses is an estimate of the credit losses expected over the life of the Company’s Receivable portfolio. The Company measures expected credit losses on a collective basis when similar risk characteristics exist. Risk characteristics considered by the Company include product category, market, geography, credit risk, and remaining duration. Receivables that do not share risk characteristics with other receivables in the portfolio are evaluated on an individual basis. Non-performing Receivables are included in the estimate of expected credit losses.  

The Company utilizes loss forecast models, which are selected based on the size and credit risk of the underlying pool of receivables, to estimate expected credit losses. Transition matrix models are used for large and complex Customer Receivable pools, while weighted average remaining maturity (WARM) models are used for smaller and less complex Customer Receivable pools. Transition matrix models, which are used for the majority of the Customer Receivables, estimate credit losses using historical delinquency and default information to assign probabilities that a receivable will pay as contractually scheduled or become delinquent and advance through the various delinquency stages. The model simulates the runoff of the portfolio, month-by-month, over the life of the receivables until the balances are fully repaid or default, using roll rates applied to the outstanding portfolio. The roll rates are applied based on the delinquency status of the customer accounts and are further segmented based on the credit risk and remaining duration of the underlying receivables. Estimated recovery rates are applied to the balance at default to calculate the expected credit losses. The modeled expected credit losses are adjusted based on reasonable and supportable forecasts, which may include economic indicators such as commodity prices, industry equipment sales, unemployment rates, and housing starts. The WARM models apply historical average annual loss rates, adjusted for current and forecasted economic conditions, to the projected portfolio runoff. Expected credit losses on wholesale receivables are based on historical loss rates, adjusted for current economic conditions and reasonable and supportable forecasts. Management reviews each model’s output quarterly, and qualitative adjustments are incorporated as necessary.

Troubled Debt Restructuring, Policy

A troubled debt restructuring is generally the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include a reduction of the stated interest rate, an extension of the maturity date, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first nine months of 2021, the Company identified 287 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $10.3 million pre-modification and $9.4 million post-modification. During the first nine months of 2020, there were 328 Receivable contracts, primarily retail notes, with aggregate balances of $12.6 million pre-modification and $11.6 million post-modification. The short-term relief related to COVID mentioned on page 11 did not meet the definition of a troubled debt restructuring. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At August 1, 2021, the Company had no commitments to provide additional financing to customers whose accounts were modified in troubled debt restructurings.

Fair Value of Financial Instruments, Policy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, the Company uses various methods including market and income approaches. The Company utilizes valuation models and techniques that maximize the use of observable inputs. The models are industry-standard models that consider various assumptions including time values and yield curves as well as other economic measures. These valuation techniques are consistently applied.

Derivative Financial Instruments

It is the Company’s policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. The Company manages the relationship of the types and amounts of its funding sources to its Receivable and Lease portfolios in an effort to diminish risk due to interest rate and foreign currency fluctuations, while responding to favorable financing opportunities. The Company also has foreign currency exposures at some of its foreign and domestic operations related to financing in currencies other than the functional currencies.

All derivatives are recorded at fair value on the consolidated balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the consolidated balance sheet. Each derivative is designated as a cash flow hedge, a fair value hedge, or remains undesignated. All designated hedges are formally documented as to the relationship with the hedged item as well as the risk-management strategy. Both at inception and on an ongoing basis the hedging instrument is assessed as to its effectiveness. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued.

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New Accounting Standards (Tables)

9 Months Ended

Aug. 01, 2021

New Accounting Standards

Schedule of Affected Lines on the Consolidated Balance Sheet from Initially Applying the New Measurement of Credit Losses on Financial Instruments Guidance

The effects of adopting the ASU on the consolidated balance sheet were as follows (in millions of dollars):

	November 1		Cumulative Effect		November 2
	2020		from Adoption		2020
Assets
Allowance for credit losses	$	(129.1)	$	(19.7)	$	(148.8)
Deferred income taxes		27.1		.7		27.8
Liabilities
Accounts payable and accrued expenses	$	922.3	$	(.5)	$	921.8
Deposits withheld from dealers and merchants		114.8		13.5		128.3
Deferred income taxes		345.9		(5.8)		340.1
Stockholder’s equity
Retained earnings	$	2,891.6	$	(26.2)	$	2,865.4

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Other Comprehensive Income Items (Tables)

9 Months Ended

Aug. 01, 2021

Other Comprehensive Income Items

Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss)

The after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars):

			Unrealized		Unrealized		Accumulated
	Cumulative		Gain (Loss)		Gain (Loss)		Other
	Translation		on		on		Comprehensive
	Adjustment		Derivatives		Debt Securities		Income (Loss)
Balance November 3, 2019	$	(88.4)	$	(7.0)	$	(2.0)	$	(97.4)
Other comprehensive income (loss) items before reclassification		28.2		(13.9)				14.3
Amounts reclassified from accumulated other comprehensive income				9.1				9.1
Net current period other comprehensive income (loss)		28.2		(4.8)				23.4
Balance August 2, 2020	$	(60.2)	$	(11.8)	$	(2.0)	$	(74.0)
Balance November 1, 2020	$	(69.5)	$	(6.7)	$	(1.6)	$	(77.8)
Other comprehensive income (loss) items before reclassification		22.6		(.6)		(.1)		21.9
Amounts reclassified from accumulated other comprehensive income				6.5				6.5
Net current period other comprehensive income (loss)		22.6		5.9		(.1)		28.4
Balance August 1, 2021	$	(46.9)	$	(.8)	$	(1.7)	$	(49.4)

Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects

Amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects were as follows (in millions of dollars):

	Before		Tax		After
	Tax		(Expense)		Tax
Three Months Ended August 1, 2021	Amount		Credit		Amount
Cumulative translation adjustment	$	(16.7)			$	(16.7)
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.9)	$	.2		(.7)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		1.6		(.3)		1.3
Net unrealized gain (loss) on derivatives		.7		(.1)		.6
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)				(.2)		(.2)
Total other comprehensive income (loss)	$	(16.0)	$	(.3)	$	(16.3)
Nine Months Ended August 1, 2021
Cumulative translation adjustment	$	22.6			$	22.6
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(.8)	$	.2		(.6)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		8.2		(1.7)		6.5
Net unrealized gain (loss) on derivatives		7.4		(1.5)		5.9
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.2)		.1		(.1)
Total other comprehensive income (loss)	$	29.8	$	(1.4)	$	28.4
Three Months Ended August 2, 2020
Cumulative translation adjustment	$	50.0			$	50.0
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(1.1)	$	.2		(.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		6.4		(1.3)		5.1
Net unrealized gain (loss) on derivatives		5.3		(1.1)		4.2
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		.6				.6
Total other comprehensive income (loss)	$	55.9	$	(1.1)	$	54.8
Nine Months Ended August 2, 2020
Cumulative translation adjustment	$	28.2			$	28.2
Unrealized gain (loss) on derivatives:
Unrealized hedging gain (loss)		(17.6)	$	3.7		(13.9)
Reclassification of realized (gain) loss to:
Interest rate contracts – Interest expense		11.5		(2.4)		9.1
Net unrealized gain (loss) on derivatives		(6.1)		1.3		(4.8)
Unrealized gain (loss) on debt securities:
Unrealized holding gain (loss)		(.8)		.8
Total other comprehensive income (loss)	$	21.3	$	2.1	$	23.4

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Receivables (Tables)

9 Months Ended

Aug. 01, 2021

Receivables

Analysis of the Allowance for Credit Losses and Investment in Receivables

An analysis of the allowance for credit losses and investment in Receivables during 2021 was as follows (in millions of dollars):

	Three Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	101.3	$	18.9	$	9.6	$	129.8
Provision (credit) for credit losses*		13.6		(.1)		2.2		15.7
Write-offs		(8.5)		(8.4)		(.2)		(17.1)
Recoveries		3.2		7.6				10.8
Translation adjustments		(.2)		.1		(.1)		(.2)
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0

	Nine Months Ended
	August 1, 2021
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	76.9	$	42.3	$	9.9	$	129.1
ASU No. 2016-13 adoption (see Note 2)		32.5		(12.2)		(.6)		19.7
Provision (credit) for credit losses*		11.2		(15.9)		2.1		(2.6)
Write-offs		(19.7)		(22.7)		(.3)		(42.7)
Recoveries		8.1		26.6				34.7
Translation adjustments		.4				.4		.8
End of period balance	$	109.4	$	18.1	$	11.5	$	139.0
Receivables:
End of period balance	$	25,264.3	$	3,687.7	$	7,731.2	$	36,683.2

*Excludes provision for credit losses on unfunded commitments of $2.1 million for the nine months ended August 1, 2021, which is recorded in accounts payable and accrued expenses on the consolidated balance sheet. There was no change in the provision for credit losses on unfunded commitments for the third quarter of 2021.

An analysis of the allowance for credit losses and investment in Receivables during 2020 was as follows (in millions of dollars):

	Three Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	88.4	$	42.3	$	9.1	$	139.8
Provision (credit) for credit losses		3.3		13.2		(.5)		16.0
Write-offs		(5.5)		(21.3)		(.1)		(26.9)
Recoveries		2.4		8.1		.4		10.9
Translation adjustments		.4				.4		.8
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6

	Nine Months Ended
	August 2, 2020
	Retail Notes		Revolving
	& Financing		Charge		Wholesale		Total
	Leases		Accounts		Receivables		Receivables
Allowance:
Beginning of period balance	$	53.7	$	39.3	$	7.6	$	100.6
Provision (credit) for credit losses		70.5		31.3		(1.0)		100.8
Write-offs		(39.6)		(50.1)		(.9)		(90.6)
Recoveries		4.5		21.8		1.3		27.6
Translation adjustments		(.1)				2.3		2.2
End of period balance	$	89.0	$	42.3	$	9.3	$	140.6
Receivables:
End of period balance	$	21,302.2	$	3,918.3	$	8,428.8	$	33,649.3

Customer Receivables

Receivables

Credit Quality Analysis

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, Customer Receivables) at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	8,075.6	$	6,472.1	$	3,246.0	$	1,695.6	$	733.9	$	207.4	$	3,570.9	$	24,001.5
30-59 days past due		31.1		42.1		25.1		14.9		5.3		2.7		11.4		132.6
60-89 days past due		11.7		21.4		10.0		4.4		2.6		1.1		3.4		54.6
90+ days past due		.1		.5		.2		.2								1.0
Non-performing		11.0		45.8		31.6		28.3		13.1		14.4		5.7		149.9
Construction and forestry
Current		1,765.6		1,413.7		715.0		281.3		63.2		10.6		91.5		4,340.9
30-59 days past due		28.2		38.0		21.8		8.0		2.7		.7		2.9		102.3
60-89 days past due		11.3		16.1		8.6		4.2		1.3		.3		1.1		42.9
90+ days past due		3.2				4.5										7.7
Non-performing		9.0		44.1		36.0		17.7		7.2		3.8		.8		118.6
Total Customer Receivables	$	9,946.8	$	8,093.8	$	4,098.8	$	2,054.6	$	829.3	$	241.0	$	3,687.7	$	28,952.0

Age Credit Quality Analysis

The credit quality analysis of Customer Receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020						August 2, 2020
	Retail Notes & Financing Leases		Revolving Charge Accounts		Total		Retail Notes & Financing Leases		Revolving Charge Accounts		Total
Customer Receivables:
Agriculture and turf
Current	$	18,341.2	$	3,710.3	$	22,051.5	$	17,188.9	$	3,794.6	$	20,983.5
30-59 days past due		111.4		11.5		122.9		114.3		18.3		132.6
60-89 days past due		47.6		3.5		51.1		59.4		3.5		62.9
90+ days past due		2.0				2.0		3.6				3.6
Non-performing		172.7		5.4		178.1		204.9		7.4		212.3
Construction and forestry
Current		3,759.5		92.3		3,851.8		3,572.8		90.2		3,663.0
30-59 days past due		82.0		2.4		84.4		60.4		2.6		63.0
60-89 days past due		38.8		1.1		39.9		14.6		1.0		15.6
90+ days past due		1.9				1.9
Non-performing		79.5		.9		80.4		83.3		.7		84.0
Total Customer Receivables	$	22,636.6	$	3,827.4	$	26,464.0	$	21,302.2	$	3,918.3	$	25,220.5

Wholesale Receivables

Receivables

Credit Quality Analysis

The credit quality analysis of wholesale receivables at August 1, 2021 was as follows (in millions of dollars):

	Year of Origination
	2021		2020		2019		2018		2017		Prior		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	260.9	$	106.2	$	30.6	$	12.5	$	3.1	$	.5	$	5,946.0	$	6,359.8
30-59 days past due														10.1		10.1
60-89 days past due														3.8		3.8
90+ days past due														2.8		2.8
Non-performing														4.3		4.3
Construction and forestry
Current		7.5		5.1		3.9		.4						1,332.0		1,348.9
30-59 days past due														1.3		1.3
60-89 days past due														.2		.2
90+ days past due
Non-performing
Total wholesale receivables	$	268.4	$	111.3	$	34.5	$	12.9	$	3.1	$	.5	$	7,300.5	$	7,731.2

Age Credit Quality Analysis

The credit quality analysis of wholesale receivables at November 1, 2020 and August 2, 2020 was as follows (in millions of dollars):

	November 1, 2020		August 2, 2020
Wholesale receivables:
Agriculture and turf
Current	$	5,693.7	$	6,905.0
30-59 days past due		3.9		10.9
60-89 days past due		4.4		1.1
90+ days past due		1.1		1.4
Non-performing		4.0		3.8
Construction and forestry
Current		1,385.9		1,499.6
30-59 days past due		.3		3.4
60-89 days past due				.3
90+ days past due				1.1
Non-performing				2.2
Total wholesale receivables	$	7,093.3	$	8,428.8

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Securitization of Receivables (Tables)

9 Months Ended

Aug. 01, 2021

Securitization of Receivables

Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss

The Company’s carrying amount of the liabilities to the unconsolidated conduits, compared to the maximum exposure to loss related to these conduits, which would only be incurred in the event of a complete loss on the restricted assets was as follows (in millions of dollars):

	August 1
	2021
Carrying value of liabilities	$	1,259.0
Maximum exposure to loss		1,341.2

Components of Consolidated Restricted Assets, Secured Borrowings and Other Liabilities Related to Securitization Transactions

The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Retail notes securitized	$	5,408.2	$	4,689.2	$	5,446.2
Allowance for credit losses		(19.9)		(12.6)		(14.0)
Other assets		112.7		97.9		104.0
Total restricted securitized assets	$	5,501.0	$	4,774.5	$	5,536.2

The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Securitization borrowings	$	5,264.6	$	4,656.2	$	5,324.1
Accrued interest on borrowings		2.1		3.2		4.1
Total liabilities related to restricted securitized assets	$	5,266.7	$	4,659.4	$	5,328.2

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Leases (Tables)

9 Months Ended

Aug. 01, 2021

Leases

Schedule of Lease Revenues Earned

Lease revenues earned by the Company were as follows (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Sales-type and direct financing lease revenues	$	12.7	$	12.0	$	35.8	$	34.3
Operating lease revenues		237.9		253.5		724.3		768.8
Variable lease revenues		5.1		4.8		15.4		14.7
Total lease revenues	$	255.7	$	270.3	$	775.5	$	817.8

Variable lease revenues reported above primarily relate to separately invoiced property taxes on leased equipment in certain markets and late fees.

Schedule of Cost of Equipment on Operating Leases by Product Category

The cost of equipment on operating leases by product category was as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Agriculture and turf	$	5,043.4	$	5,210.4	$	5,082.8
Construction and forestry		1,391.3		1,595.3		1,648.3
Total		6,434.7		6,805.7		6,731.1
Accumulated depreciation		(1,470.9)		(1,507.9)		(1,473.9)
Equipment on operating leases - net	$	4,963.8	$	5,297.8	$	5,257.2

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Notes Receivable from John Deere (Tables)

9 Months Ended

Aug. 01, 2021

Notes Receivable from John Deere

Notes Receivable from John Deere

The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Limited Liability Company John Deere Financial	$	198.6	$	132.5	$	125.6
Banco John Deere S.A.		167.4		217.5		241.2
Total Notes Receivable from John Deere	$	366.0	$	350.0	$	366.8

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Long-Term Borrowings (Tables)

9 Months Ended

Aug. 01, 2021

Long-Term Borrowings

Long-Term Borrowings

Long-term borrowings of the Company at August 1, 2021, November 1, 2020, and August 2, 2020 consisted of the following (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Senior Debt:
Medium-term notes	$	20,174.1	$	19,320.6	$	20,499.8
Other notes		19.8		38.2		43.3
Total senior debt		20,193.9		19,358.8		20,543.1
Unamortized debt discount and debt issuance costs		(57.2)		(47.7)		(51.0)
Total	$	20,136.7	$	19,311.1	$	20,492.1

The medium-term notes in the table above include fair value adjustments related to interest rate swaps. The principal balances of the medium-term notes were $19,722.5, $18,668.9, and $19,722.7 million at August 1, 2021, November 1, 2020, and August 2, 2020, respectively.

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Fair Value Measurements (Tables)

9 Months Ended

Aug. 01, 2021

Fair Value Measurements

Fair Value of Financial Instruments

The fair values of financial instruments that do not approximate the carrying values were as follows (in millions of dollars):

	August 1, 2021				November 1, 2020				August 2, 2020
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value		Value		Value
Receivables financed – net	$	31,155.9	$	31,264.6	$	28,751.6	$	28,931.7	$	28,076.5	$	28,275.8
Retail notes securitized – net		5,388.3		5,454.3		4,676.6		4,772.9		5,432.2		5,543.9
Securitization borrowings		5,264.6		5,289.3		4,656.2		4,697.6		5,324.1		5,380.7
Current maturities of long-term borrowings		5,746.0		5,800.4		5,741.6		5,801.1		4,910.2		4,958.2
Long-term borrowings		20,136.7		20,557.9		19,311.1		19,784.4		20,492.1		21,038.2

Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings.

Assets and Liabilities Measured at Fair Value as Level 2 Measurements on a Recurring Basis

Assets and liabilities measured at fair value as Level 2 measurements on a recurring basis were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Marketable securities
International debt securities	$	2.1	$	2.2	$	2.4
Receivables from John Deere
Derivatives:
Interest rate contracts		331.7		575.5		795.4
Cross-currency interest rate contracts		2.0		7.7		9.1
Other assets
Derivatives:
Foreign exchange contracts		.5		3.8		3.7
Total assets	$	336.3	$	589.2	$	810.6
Other payables to John Deere
Derivatives:
Interest rate contracts	$	43.4	$	29.4	$	42.5
Cross-currency interest rate contracts		2.3		.7		.1
Accounts payable and accrued expenses
Derivatives:
Foreign exchange contracts		1.7		.9		6.2
Total liabilities	$	47.4	$	31.0	$	48.8

Excluded from the table above were the Company’s cash equivalents, which were carried at cost that approximates fair value.  The cash equivalents consist primarily of time deposits and money market funds.

Fair Value, Nonrecurring Level 3 Measurements from Impairments

Fair value, nonrecurring Level 3 measurements from impairments, excluding Receivables with specific allowances which were not material, were as follows (in millions of dollars):

	Fair Value				Losses
					Three Months Ended		Nine Months Ended
	August 1	November 1		August 2	August 1	August 2	August 1	August 2
	2021	2020		2020	2021	2020	2021	2020
Equipment on operating leases – net		$	340.3					$	21.0
Other assets			56.5						9.8
Total		$	396.8					$	30.8

The fair value shown for November 1, 2020 in the table above represents the fair value assessment at May 3, 2020, as the result of impairments taken on operating leases and matured operating lease inventory in the second quarter of 2020 (see Note 6).

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Derivative Instruments (Tables)

9 Months Ended

Aug. 01, 2021

Derivative Instruments

Amounts Recorded in the Consolidated Balance Sheet Related to Borrowings Designated in Fair Value Hedging Relationships

The amounts recorded in the consolidated balance sheet related to borrowings designated in fair value hedging relationships were as follows (in millions of dollars):

			Cumulative Increase (Decrease) of Fair Value
			Hedging Adjustments Included in the
			Carrying Amount
	Carrying		Active
	Amount of		Hedging		Discontinued
August 1, 2021	Hedged Item		Relationships		Relationships		Total
Current maturities of long-term borrowings	$	187.8	$	4.0	$	(.9)	$	3.1
Long-term borrowings		8,165.4		261.3		190.3		451.6
November 1, 2020
Current maturities of long-term borrowings	$	2.5			$	2.5	$	2.5
Long-term borrowings		7,149.8	$	530.0		121.6		651.6
August 2, 2020
Current maturities of long-term borrowings	$	104.6	$	2.6	$	2.0	$	4.6
Long-term borrowings		8,826.4		737.6		39.5		777.1

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheet were as follows (in millions of dollars):

	August 1		November 1		August 2
	2021		2020		2020
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	321.0	$	565.2	$	785.3
Not designated as hedging instruments:
Interest rate contracts		10.7		10.3		10.1
Cross-currency interest rate contracts		2.0		7.7		9.1
Total not designated		12.7		18.0		19.2
Other Assets
Not designated as hedging instruments:
Foreign exchange contracts		.5		3.8		3.7
Total not designated		.5		3.8		3.7
Total derivative assets	$	334.2	$	587.0	$	808.2
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	32.3	$	12.7	$	24.1
Not designated as hedging instruments:
Interest rate contracts		11.1		16.7		18.4
Cross-currency interest rate contracts		2.3		.7		.1
Total not designated		13.4		17.4		18.5
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Foreign exchange contracts		1.7		.9		6.2
Total derivative liabilities	$	47.4	$	31.0	$	48.8

Gains (Losses) Related to Derivative Instruments on Statement of Consolidated Income

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following (in millions of dollars):

	Three Months Ended				Nine Months Ended
	August 1		August 2		August 1		August 2
	2021		2020		2021		2020
Fair Value Hedges
Interest rate contracts - Interest expense	$	139.9	$	76.7	$	(70.7)	$	568.0
Cash Flow Hedges
Recognized in OCI
Interest rate contracts - OCI (pretax)		(.9)		(1.1)		(.8)		(17.6)
Reclassified from OCI
Interest rate contracts - Interest expense		(1.6)		(6.4)		(8.2)		(11.5)
Not Designated as Hedges
Interest rate contracts - Interest expense *	$	(2.9)	$	(2.2)	$	(4.5)	$	(3.0)
Foreign exchange contracts - Administrative and operating expenses *		(4.5)		(47.2)		(20.0)		47.3
Total not designated	$	(7.4)	$	(49.4)	$	(24.5)	$	44.3

*    Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

Impact on Derivative Assets and Liabilities for External Derivatives and those with John Deere Related to Netting Arrangements and Collateral

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

August 1, 2021
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	.5	$	(.1)		$	.4
John Deere		333.7		(43.1)			290.6
Liabilities
External		1.7		(.1)			1.6
John Deere		45.7		(43.1)			2.6

November 1, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.8	$	(.7)		$	3.1
John Deere		583.2		(23.5)			559.7
Liabilities
External		.9		(.7)			.2
John Deere		30.1		(23.5)			6.6

August 2, 2020
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral	Net Amount
Assets
External	$	3.7	$	(.2)		$	3.5
John Deere		804.5		(35.4)			769.1
Liabilities
External		6.2		(.2)			6.0
John Deere		42.6		(35.4)			7.2

XML

Organization and Consolidation (Details)	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Fiscal Period Duration
Fiscal year duration	91 days	91 days	273 days	273 days

XML

New Accounting Standards (Details) - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	May 02, 2021	Nov. 02, 2020	Nov. 01, 2020	Aug. 02, 2020	May 03, 2020	Nov. 03, 2019
Assets
Allowance for credit losses	$ (139.0)	$ (129.8)	$ (148.8)	$ (129.1)	$ (140.6)	$ (139.8)	$ (100.6)
Deferred income taxes	34.9		27.8	27.1	37.3
Liabilities
Accounts payable and accrued expenses	839.0		921.8	922.3	876.0
Deposits withheld from dealers and merchants	125.5		128.3	114.8	105.6
Deferred income taxes	288.9		340.1	345.9	423.3
Retained earnings	$ 3,165.0		$ 2,865.4	2,891.6	$ 2,762.9
ASU 2016-13
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List]	jdcc:AccountingStandardsUpdate201613CumulativeEffectPeriodOfAdoptionMember
ASU 2016-13 | Cumulative Effect from Adoption
Assets
Allowance for credit losses				(19.7)
Deferred income taxes				0.7
Liabilities
Accounts payable and accrued expenses				(0.5)
Deposits withheld from dealers and merchants				13.5
Deferred income taxes				(5.8)
Retained earnings				$ (26.2)
ASU 2018-15
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2019-04
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2021-01
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2019-12
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false
ASU 2020-08
New accounting standards
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false

XML

Other Comprehensive Income Items - After-Tax Changes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
After-tax changes in accumulated other comprehensive income (loss)
Balance			$ 4,296.6
Net current period other comprehensive income (loss)	$ (16.3)	$ 54.8	28.4	$ 23.4
Balance	4,598.4	4,171.7	4,598.4	4,171.7
Accumulated Other Comprehensive Income (Loss)
After-tax changes in accumulated other comprehensive income (loss)
Balance			(77.8)	(97.4)
Other comprehensive income (loss) items before reclassification			21.9	14.3
Amounts reclassified from accumulated other comprehensive income			6.5	9.1
Net current period other comprehensive income (loss)	(16.3)	54.8	28.4	23.4
Balance	(49.4)	(74.0)	(49.4)	(74.0)
Cumulative Translation Adjustment
After-tax changes in accumulated other comprehensive income (loss)
Balance			(69.5)	(88.4)
Other comprehensive income (loss) items before reclassification			22.6	28.2
Net current period other comprehensive income (loss)			22.6	28.2
Balance	(46.9)	(60.2)	(46.9)	(60.2)
Unrealized Gain (Loss) on Derivatives
After-tax changes in accumulated other comprehensive income (loss)
Balance			(6.7)	(7.0)
Other comprehensive income (loss) items before reclassification			(0.6)	(13.9)
Amounts reclassified from accumulated other comprehensive income			6.5	9.1
Net current period other comprehensive income (loss)			5.9	(4.8)
Balance	(0.8)	(11.8)	(0.8)	(11.8)
Unrealized Gain (Loss) on Debt Securities
After-tax changes in accumulated other comprehensive income (loss)
Balance			(1.6)	(2.0)
Other comprehensive income (loss) items before reclassification			(0.1)
Net current period other comprehensive income (loss)			(0.1)
Balance	$ (1.7)	$ (2.0)	$ (1.7)	$ (2.0)

XML

Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Other comprehensive income (loss), before tax
Interest expense	$ (114.1)	$ (161.3)	$ (373.1)	$ (597.7)
Administrative and operating expenses	(105.5)	(92.0)	(304.3)	(357.9)
Total other comprehensive income (loss), before tax	(16.0)	55.9	29.8	21.3
Other comprehensive income (loss), tax (expense) credit
Total other comprehensive income (loss), tax (expense) credit	(0.3)	(1.1)	(1.4)	2.1
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	(16.3)	54.8	28.4	23.4
Cumulative Translation Adjustment
Other comprehensive income (loss), before tax
Total other comprehensive income (loss), before tax	(16.7)	50.0	22.6	28.2
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	(16.7)	50.0	22.6	28.2
Unrealized Gain (Loss) on Derivatives
Other comprehensive income (loss), before tax
Other comprehensive income (loss) before reclassification, before tax	(0.9)	(1.1)	(0.8)	(17.6)
Total other comprehensive income (loss), before tax	0.7	5.3	7.4	(6.1)
Other comprehensive income (loss), tax (expense) credit
Other comprehensive income (loss) before reclassification, tax (expense) credit	0.2	0.2	0.2	3.7
Total other comprehensive income (loss), tax (expense) credit	(0.1)	(1.1)	(1.5)	1.3
Other comprehensive income (loss), after tax
Other comprehensive income (loss) before reclassification, after tax	0.7	(0.9)	(0.6)	(13.9)
Other comprehensive income (loss), net of income taxes	0.6	4.2	5.9	(4.8)
Unrealized Gain (Loss) on Derivatives | Interest rate contracts | Reclassifications of gains (losses) out of accumulated other comprehensive income
Other comprehensive income (loss), before tax
Interest expense	1.6	6.4	8.2	11.5
Other comprehensive income (loss), tax (expense) credit
Reclassification of realized (gain) loss, tax expense (credit)	(0.3)	(1.3)	(1.7)	(2.4)
Other comprehensive income (loss), after tax
Reclassification of realized (gain) loss, after tax	1.3	5.1	6.5	9.1
Unrealized Gain (Loss) on Debt Securities
Other comprehensive income (loss), before tax
Total other comprehensive income (loss), before tax		0.6	(0.2)	(0.8)
Other comprehensive income (loss), tax (expense) credit
Total other comprehensive income (loss), tax (expense) credit	(0.2)		0.1	$ 0.8
Other comprehensive income (loss), after tax
Other comprehensive income (loss), net of income taxes	$ (0.2)	$ 0.6	$ (0.1)

XML

Receivables - Financing Receivables Past Due (Details)	9 Months Ended
	Aug. 01, 2021
Receivable, Past Due
Minimum number of days for a receivable to be considered past due	30 days
COVID-19
Receivable, Past Due
Percentage of financing receivables granted relief (as a percent)	3.00%
Retail notes
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	90 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	120 days
Revolving charge accounts
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	90 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	120 days
Wholesale Receivables
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	60 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	60 days
Financing Leases
Receivable, Past Due
Generally the number of days for a financing receivable to be considered non-performing	90 days
Generally the number of days before a receivable is delinquent and the estimated uncollectible amount is written off	120 days

XML

Receivables - Customer Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Credit Quality Analysis
Total Receivables	$ 36,683.2	$ 33,557.3	$ 33,649.3
Customer Receivables
Credit Quality Analysis
2021	9,946.8
2020	8,093.8
2019	4,098.8
2018	2,054.6
2017	829.3
Prior	241.0
Revolving	3,687.7
Total Receivables	28,952.0	26,464.0	25,220.5
Customer Receivables | Agriculture and turf | 30-59 Days Past Due
Credit Quality Analysis
2021	31.1
2020	42.1
2019	25.1
2018	14.9
2017	5.3
Prior	2.7
Revolving	11.4
Total Receivables	132.6	122.9	132.6
Customer Receivables | Agriculture and turf | 60-89 Days Past Due
Credit Quality Analysis
2021	11.7
2020	21.4
2019	10.0
2018	4.4
2017	2.6
Prior	1.1
Revolving	3.4
Total Receivables	54.6	51.1	62.9
Customer Receivables | Agriculture and turf | 90 Days or Greater Past Due
Credit Quality Analysis
2021	0.1
2020	0.5
2019	0.2
2018	0.2
Total Receivables	1.0	2.0	3.6
Customer Receivables | Agriculture and turf | Current
Credit Quality Analysis
2021	8,075.6
2020	6,472.1
2019	3,246.0
2018	1,695.6
2017	733.9
Prior	207.4
Revolving	3,570.9
Total Receivables	24,001.5
Customer Receivables | Agriculture and turf | Non-performing
Credit Quality Analysis
2021	11.0
2020	45.8
2019	31.6
2018	28.3
2017	13.1
Prior	14.4
Revolving	5.7
Total Receivables	149.9
Customer Receivables | Construction and forestry | 30-59 Days Past Due
Credit Quality Analysis
2021	28.2
2020	38.0
2019	21.8
2018	8.0
2017	2.7
Prior	0.7
Revolving	2.9
Total Receivables	102.3	84.4	63.0
Customer Receivables | Construction and forestry | 60-89 Days Past Due
Credit Quality Analysis
2021	11.3
2020	16.1
2019	8.6
2018	4.2
2017	1.3
Prior	0.3
Revolving	1.1
Total Receivables	42.9	39.9	$ 15.6
Customer Receivables | Construction and forestry | 90 Days or Greater Past Due
Credit Quality Analysis
2021	3.2
2019	4.5
Total Receivables	7.7	$ 1.9
Customer Receivables | Construction and forestry | Current
Credit Quality Analysis
2021	1,765.6
2020	1,413.7
2019	715.0
2018	281.3
2017	63.2
Prior	10.6
Revolving	91.5
Total Receivables	4,340.9
Customer Receivables | Construction and forestry | Non-performing
Credit Quality Analysis
2021	9.0
2020	44.1
2019	36.0
2018	17.7
2017	7.2
Prior	3.8
Revolving	0.8
Total Receivables	$ 118.6

XML

Receivables - Customer Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Age Credit Quality Analysis
Total Receivables	$ 36,683.2	$ 33,557.3	$ 33,649.3
Customer Receivables
Age Credit Quality Analysis
Total Receivables	28,952.0	26,464.0	25,220.5
Customer Receivables | Agriculture and turf
Age Credit Quality Analysis
Non-performing		178.1	212.3
Customer Receivables | Agriculture and turf | Current
Age Credit Quality Analysis
Total Receivables		22,051.5	20,983.5
Customer Receivables | Agriculture and turf | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables	132.6	122.9	132.6
Customer Receivables | Agriculture and turf | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables	54.6	51.1	62.9
Customer Receivables | Agriculture and turf | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables	1.0	2.0	3.6
Customer Receivables | Construction and forestry
Age Credit Quality Analysis
Non-performing		80.4	84.0
Customer Receivables | Construction and forestry | Current
Age Credit Quality Analysis
Total Receivables		3,851.8	3,663.0
Customer Receivables | Construction and forestry | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables	102.3	84.4	63.0
Customer Receivables | Construction and forestry | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables	42.9	39.9	15.6
Customer Receivables | Construction and forestry | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables	7.7	1.9
Retail Notes and Financing Leases
Age Credit Quality Analysis
Total Receivables	25,264.3	22,636.6	21,302.2
Retail Notes and Financing Leases | Agriculture and turf
Age Credit Quality Analysis
Non-performing		172.7	204.9
Retail Notes and Financing Leases | Agriculture and turf | Current
Age Credit Quality Analysis
Total Receivables		18,341.2	17,188.9
Retail Notes and Financing Leases | Agriculture and turf | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables		111.4	114.3
Retail Notes and Financing Leases | Agriculture and turf | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables		47.6	59.4
Retail Notes and Financing Leases | Agriculture and turf | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables		2.0	3.6
Retail Notes and Financing Leases | Construction and forestry
Age Credit Quality Analysis
Non-performing		79.5	83.3
Retail Notes and Financing Leases | Construction and forestry | Current
Age Credit Quality Analysis
Total Receivables		3,759.5	3,572.8
Retail Notes and Financing Leases | Construction and forestry | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables		82.0	60.4
Retail Notes and Financing Leases | Construction and forestry | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables		38.8	14.6
Retail Notes and Financing Leases | Construction and forestry | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables		1.9
Revolving charge accounts
Age Credit Quality Analysis
Total Receivables	$ 3,687.7	3,827.4	3,918.3
Revolving charge accounts | Agriculture and turf
Age Credit Quality Analysis
Non-performing		5.4	7.4
Revolving charge accounts | Agriculture and turf | Current
Age Credit Quality Analysis
Total Receivables		3,710.3	3,794.6
Revolving charge accounts | Agriculture and turf | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables		11.5	18.3
Revolving charge accounts | Agriculture and turf | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables		3.5	3.5
Revolving charge accounts | Construction and forestry
Age Credit Quality Analysis
Non-performing		0.9	0.7
Revolving charge accounts | Construction and forestry | Current
Age Credit Quality Analysis
Total Receivables		92.3	90.2
Revolving charge accounts | Construction and forestry | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables		2.4	2.6
Revolving charge accounts | Construction and forestry | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables		$ 1.1	$ 1.0

XML

Receivables - Wholesale Receivables Credit Quality Analysis (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Credit Quality Analysis
Total Receivables	$ 36,683.2	$ 33,557.3	$ 33,649.3
Wholesale Receivables
Credit Quality Analysis
2021	268.4
2020	111.3
2019	34.5
2018	12.9
2017	3.1
Prior	0.5
Revolving	7,300.5
Total Receivables	7,731.2	7,093.3	8,428.8
Wholesale Receivables | Agriculture and turf | 30-59 Days Past Due
Credit Quality Analysis
Revolving	10.1
Total Receivables	10.1	3.9	10.9
Wholesale Receivables | Agriculture and turf | 60-89 Days Past Due
Credit Quality Analysis
Revolving	3.8
Total Receivables	3.8	4.4	1.1
Wholesale Receivables | Agriculture and turf | 90 Days or Greater Past Due
Credit Quality Analysis
Revolving	2.8
Total Receivables	2.8	1.1	1.4
Wholesale Receivables | Agriculture and turf | Current
Credit Quality Analysis
2021	260.9
2020	106.2
2019	30.6
2018	12.5
2017	3.1
Prior	0.5
Revolving	5,946.0
Total Receivables	6,359.8
Wholesale Receivables | Agriculture and turf | Non-performing
Credit Quality Analysis
Revolving	4.3
Total Receivables	4.3
Wholesale Receivables | Construction and forestry | 30-59 Days Past Due
Credit Quality Analysis
Revolving	1.3
Total Receivables	1.3	$ 0.3	3.4
Wholesale Receivables | Construction and forestry | 60-89 Days Past Due
Credit Quality Analysis
Revolving	0.2
Total Receivables	0.2		0.3
Wholesale Receivables | Construction and forestry | 90 Days or Greater Past Due
Credit Quality Analysis
Total Receivables			$ 1.1
Wholesale Receivables | Construction and forestry | Current
Credit Quality Analysis
2021	7.5
2020	5.1
2019	3.9
2018	0.4
Revolving	1,332.0
Total Receivables	$ 1,348.9

XML

Receivables - Wholesale Receivables Age Credit Quality Analysis (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Age Credit Quality Analysis
Total Receivables	$ 36,683.2	$ 33,557.3	$ 33,649.3
Wholesale Receivables
Age Credit Quality Analysis
Total Receivables	7,731.2	7,093.3	8,428.8
Wholesale Receivables | Agriculture and turf
Age Credit Quality Analysis
Non-performing		4.0	3.8
Wholesale Receivables | Agriculture and turf | Current
Age Credit Quality Analysis
Total Receivables		5,693.7	6,905.0
Wholesale Receivables | Agriculture and turf | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables	10.1	3.9	10.9
Wholesale Receivables | Agriculture and turf | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables	3.8	4.4	1.1
Wholesale Receivables | Agriculture and turf | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables	2.8	1.1	1.4
Wholesale Receivables | Construction and forestry
Age Credit Quality Analysis
Non-performing			2.2
Wholesale Receivables | Construction and forestry | Current
Age Credit Quality Analysis
Total Receivables		1,385.9	1,499.6
Wholesale Receivables | Construction and forestry | 30-59 Days Past Due
Age Credit Quality Analysis
Total Receivables	1.3	$ 0.3	3.4
Wholesale Receivables | Construction and forestry | 60-89 Days Past Due
Age Credit Quality Analysis
Total Receivables	$ 0.2		0.3
Wholesale Receivables | Construction and forestry | 90 Days or Greater Past Due
Age Credit Quality Analysis
Total Receivables			$ 1.1

XML

Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020	Nov. 01, 2020
Receivable, Allowance for Credit Losses
Recoveries from credit enhancements	$ 3.2		$ 9.8
Allowance:
Beginning of period balance	129.8	$ 139.8	129.1	$ 100.6
Provision (credit) for credit losses	15.7	16.0	(2.6)	100.8
Write-offs	(17.1)	(26.9)	(42.7)	(90.6)
Recoveries	10.8	10.9	34.7	27.6
Translation adjustments	(0.2)	0.8	0.8	2.2
End of period balance	139.0	140.6	139.0	140.6
Receivables:
End of period balance	36,683.2	33,649.3	36,683.2	33,649.3	$ 33,557.3
Increase (decrease) in allowance for credit losses	9.2		9.9	40.0
Cumulative Effect from Adoption | ASU 2016-13
Allowance:
Beginning of period balance			19.7
Unfunded Commitments
Allowance:
Provision (credit) for credit losses	0.0		2.1
Customer Receivables
Receivables:
End of period balance	28,952.0	25,220.5	28,952.0	25,220.5	26,464.0
Retail Notes and Financing Leases
Allowance:
Beginning of period balance	101.3	88.4	76.9	53.7
Provision (credit) for credit losses	13.6	3.3	11.2	70.5
Write-offs	(8.5)	(5.5)	(19.7)	(39.6)
Recoveries	3.2	2.4	8.1	4.5
Translation adjustments	(0.2)	0.4	0.4	(0.1)
End of period balance	109.4	89.0	109.4	89.0
Receivables:
End of period balance	25,264.3	21,302.2	25,264.3	21,302.2	22,636.6
Retail Notes and Financing Leases | Cumulative Effect from Adoption | ASU 2016-13
Allowance:
Beginning of period balance			32.5
Revolving charge accounts
Allowance:
Beginning of period balance	18.9	42.3	42.3	39.3
Provision (credit) for credit losses	(0.1)	13.2	(15.9)	31.3
Write-offs	(8.4)	(21.3)	(22.7)	(50.1)
Recoveries	7.6	8.1	26.6	21.8
Translation adjustments	0.1
End of period balance	18.1	42.3	18.1	42.3
Receivables:
End of period balance	3,687.7	3,918.3	3,687.7	3,918.3	3,827.4
Revolving charge accounts | Cumulative Effect from Adoption | ASU 2016-13
Allowance:
Beginning of period balance			(12.2)
Wholesale Receivables
Allowance:
Beginning of period balance	9.6	9.1	9.9	7.6
Provision (credit) for credit losses	2.2	(0.5)	2.1	(1.0)
Write-offs	(0.2)	(0.1)	(0.3)	(0.9)
Recoveries		0.4		1.3
Translation adjustments	(0.1)	0.4	0.4	2.3
End of period balance	11.5	9.3	11.5	9.3
Receivables:
End of period balance	$ 7,731.2	$ 8,428.8	7,731.2	$ 8,428.8	$ 7,093.3
Wholesale Receivables | Cumulative Effect from Adoption | ASU 2016-13
Allowance:
Beginning of period balance			$ (0.6)

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Receivables - Troubled Debt Restructurings (Details) $ in Millions	9 Months Ended
	Aug. 01, 2021 USD ($) item	Aug. 02, 2020 USD ($) item
Receivables Related to Troubled Debt Restructurings
Receivable contracts in troubled debt restructuring, number | item	287	328
Receivables in troubled debt restructurings, aggregate balances, pre-modification	$ 10.3	$ 12.6
Receivables in troubled debt restructurings, aggregate balances, post-modification	9.4	11.6
Receivable contracts in troubled debt restructuring, subsequently defaulted	0.0	$ 0.0
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings	$ 0.0

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Securitization of Receivables (Details) - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Securitization of Receivables
Unconsolidated conduits, carrying value of liabilities	$ 38,812.6	$ 36,559.0	$ 36,982.2
Retail notes securitized	5,408.2	4,689.2	5,446.2
Allowance for credit losses - securitization transactions	(19.9)	(12.6)	(14.0)
Other assets - securitization transactions	112.7	97.9	104.0
Total restricted securitized assets - securitization transactions	5,501.0	4,774.5	5,536.2
Securitization borrowings	5,264.6	4,656.2	5,324.1
Accrued interest on borrowings - securitization transactions	2.1	3.2	4.1
Total liabilities related to restricted securitized assets - securitization transactions	$ 5,266.7	4,659.4	5,328.2
Maximum remaining term of all restricted receivables	7 years
VIE-Primary Beneficiary
Securitization of Receivables
Total restricted securitized assets - securitization transactions	$ 3,605.3	2,897.5	3,342.5
Total liabilities related to restricted securitized assets - securitization transactions	3,487.2	2,856.2	3,258.8
Non-VIE Banking Operation
Securitization of Receivables
Total restricted securitized assets - securitization transactions	554.5	549.7	642.4
Total liabilities related to restricted securitized assets - securitization transactions	520.5	528.1	606.0
VIE-Not Primary Beneficiary
Securitization of Receivables
Unconsolidated conduits, carrying value of liabilities	1,259.0
Unconsolidated conduits, maximum exposure to loss	1,341.2
Total assets	37,000.0
Total restricted securitized assets - securitization transactions	1,341.2	1,327.3	1,551.3
Total liabilities related to restricted securitized assets - securitization transactions	$ 1,259.0	$ 1,275.1	$ 1,463.4

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Leases - Lease Revenues (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Lessor
Sales-type and direct finance lease revenues	$ 12.7	$ 12.0	$ 35.8	$ 34.3
Operating lease revenues	237.9	253.5	724.3	768.8
Variable lease revenues	5.1	4.8	15.4	14.7
Total lease revenues	$ 255.7	$ 270.3	$ 775.5	$ 817.8

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Leases - Cost of Equipment on Operating Leases (Details) - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Nov. 01, 2020
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 6,434.7	$ 6,731.1	$ 6,805.7
Accumulated depreciation	(1,470.9)	(1,473.9)	(1,507.9)
Equipment on operating leases - net	4,963.8	5,257.2	5,297.8
Impairment losses on operating leases	0.0	21.0
Operating lease residual value	3,598.9	3,791.7	3,826.3
Operating lease residual value guarantees	247.3	110.1	141.0
Matured operating lease inventory	46.9	100.7	64.5
Impairment losses on matured operating lease inventory	0.0	9.8
Agriculture and turf equipment
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	5,043.4	5,082.8	5,210.4
Construction and forestry
Cost of Equipment on Operating Leases
Equipment on operating leases - gross	$ 1,391.3	$ 1,648.3	$ 1,595.3

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Leases - Short-term Relief to Lessees (Details)	Aug. 01, 2021
COVID-19
Lessor
Percentage of operating lease portfolio granted relief	2.00%

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Notes Receivable from John Deere (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020	Nov. 01, 2020
John Deere
Notes Receivable from John Deere
Maximum remaining term for related party notes receivable			7 years
Interest earned	$ 3.8	$ 4.4	$ 10.3	$ 12.4
Notes receivable from John Deere	366.0	366.8	366.0	366.8	$ 350.0
Limited Liability Company John Deere Financial
Notes Receivable from John Deere
Notes receivable from John Deere	198.6	125.6	198.6	125.6	132.5
Banco John Deere S.A.
Notes Receivable from John Deere
Notes receivable from John Deere	$ 167.4	$ 241.2	$ 167.4	$ 241.2	$ 217.5

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Long-Term Borrowings (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Long-Term Borrowings
Total senior debt	$ 20,193.9	$ 19,358.8	$ 20,543.1
Unamortized debt discount and debt issuance costs	(57.2)	(47.7)	(51.0)
Total	20,136.7	19,311.1	20,492.1
Medium-term notes
Long-Term Borrowings
Total senior debt	20,174.1	19,320.6	20,499.8
Principal amount	19,722.5	18,668.9	19,722.7
Other notes
Long-Term Borrowings
Total senior debt	$ 19.8	$ 38.2	$ 43.3

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Commitments and Contingencies - Guarantees (Details) $ in Millions	9 Months Ended
	Aug. 01, 2021 USD ($)
John Deere Financial Inc. | Guarantees of debt and derivatives | Medium-term notes.
Guarantee Obligations
Guarantee obligations maximum exposure	$ 2,049.2
Weighted average interest rate (as a percent)	2.20%
Maximum remaining maturity	6 years
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments
Guarantee Obligations
Guarantee obligations maximum exposure	$ 43.6
Notional amount	3,021.5
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary
Guarantee Obligations
Carrying value of assets or liabilities related to JDCFI	0.0
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives
Guarantee Obligations
Guarantee obligations maximum exposure	$ 964.3
Weighted average interest rate (as a percent)	2.60%
Maximum remaining maturity	2 years

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Commitments and Contingencies - Commitments (Details) $ in Millions	Aug. 01, 2021 USD ($)
Limited Liability Company John Deere Financial
Commitments
Unused commitments	$ 131.2
John Deere dealers
Commitments
Unused commitments	10,000.0
Customers
Commitments
Unused commitments	$ 28,800.0
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts	95.00%

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Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Unrecognized Tax Benefits
Unrecognized tax benefits	$ 29.6	$ 33.3	$ 31.0
Unrecognized tax benefits affecting effective tax rate if recognized	$ 19.9	$ 17.2	$ 16.1

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Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Fair Values of Financial Instruments
Securitization borrowings	$ 5,264.6	$ 4,656.2	$ 5,324.1
Current maturities of long-term borrowings	5,746.0	5,741.6	4,910.2
Long-term borrowings	20,136.7	19,311.1	20,492.1
Level 3
Fair Values of Financial Instruments
Receivables financed - net	31,264.6	28,931.7	28,275.8
Retail notes securitized - net	5,454.3	4,772.9	5,543.9
Level 2
Fair Values of Financial Instruments
Securitization borrowings	5,289.3	4,697.6	5,380.7
Current maturities of long-term borrowings	5,800.4	5,801.1	4,958.2
Long-term borrowings	20,557.9	19,784.4	21,038.2
Carrying Value
Fair Values of Financial Instruments
Receivables financed - net	31,155.9	28,751.6	28,076.5
Retail notes securitized - net	5,388.3	4,676.6	5,432.2
Securitization borrowings	5,264.6	4,656.2	5,324.1
Current maturities of long-term borrowings	5,746.0	5,741.6	4,910.2
Long-term borrowings	$ 20,136.7	$ 19,311.1	$ 20,492.1

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Fair Value Measurements - Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Marketable securities	$ 2.1	$ 2.2	$ 2.4
Derivative assets	334.2	587.0	808.2
Derivative liabilities	47.4	31.0	48.8
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Total assets	336.3	589.2	810.6
Total liabilities	47.4	31.0	48.8
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Receivables from John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative assets	331.7	575.5	795.4
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Other payables to John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative liabilities	43.4	29.4	42.5
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign exchange contracts | Other Assets
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative assets	0.5	3.8	3.7
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Foreign exchange contracts | Accounts payable and accrued expenses
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative liabilities	1.7	0.9	6.2
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-currency interest rate contracts | Receivables from John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative assets	2.0	7.7	9.1
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Cross-currency interest rate contracts | Other payables to John Deere
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Derivative liabilities	2.3	0.7	0.1
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | International Debt Securities | Marketable Securities
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis
Marketable securities	$ 2.1	$ 2.2	$ 2.4

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Fair Value Measurements - Contractual Maturities of Debt Securities (Details) $ in Millions	Aug. 01, 2021 USD ($)
Contractual Maturities of Debt Securities, Amortized Cost
Amortized cost basis	$ 4.7
Contractual Maturities of Debt Securities, Fair Value
Fair value	$ 2.1

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Fair Value Measurements - Nonrecurring, Level 3 Measurements (Details) - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Nov. 01, 2020
Fair Value, Nonrecurring Level 3 Measurements from Impairments
Equipment on operating leases - net	$ 4,963.8	$ 5,257.2	$ 5,297.8
Losses, Equipment on operating leases - net	0.0	21.0
Losses, Other assets	$ 0.0	9.8
Fair Value, Nonrecurring Measurements | Level 3
Fair Value, Nonrecurring Level 3 Measurements from Impairments
Equipment on operating leases - net			340.3
Losses, Equipment on operating leases - net		21.0
Other assets			56.5
Losses, Other assets		9.8
Total assets			$ 396.8
Total losses		$ 30.8

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Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions	9 Months Ended
	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Cash Flow Hedges
Cash flow hedge loss recorded in OCI to be reclassified within twelve months	$ (1.0)
Gains or losses reclassified from OCI to earnings	0.0
Interest rate contracts | Cash flow hedges | Designated as Hedging Instruments
Cash Flow Hedges
Notional amounts	$ 1,750.0	$ 1,550.0	$ 1,900.0

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Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Fair Value Hedges | Designated as Hedging Instruments
Fair Value Hedges
Notional amounts	$ 7,934.9	$ 6,525.7	$ 8,179.8
Current Maturities of Long-term Borrowings
Borrowings Designated in Fair Value Hedging Relationships
Carrying Amount of Hedged Item	187.8	2.5	104.6
Active Hedging Relationships	4.0		2.6
Discontinued Relationships	(0.9)	2.5	2.0
Total	3.1	2.5	4.6
Long-term Borrowings
Borrowings Designated in Fair Value Hedging Relationships
Carrying Amount of Hedged Item	8,165.4	7,149.8	8,826.4
Active Hedging Relationships	261.3	530.0	737.6
Discontinued Relationships	190.3	121.6	39.5
Total	$ 451.6	$ 651.6	$ 777.1

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Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Interest rate contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 2,921.4	$ 2,336.6	$ 2,423.2
Interest rate caps | Sold
Derivatives Not Designated as Hedging Instruments
Notional amounts	1,807.6	1,961.4	2,171.0
Interest rate caps | Purchased
Derivatives Not Designated as Hedging Instruments
Notional amounts	1,807.6	1,961.4	2,171.0
Foreign exchange contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	98.0	172.6	211.1
Cross-currency interest rate contracts
Derivatives Not Designated as Hedging Instruments
Notional amounts	$ 197.4	$ 111.5	$ 123.5

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Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Fair Value of Derivative Instruments
Total derivative assets	$ 334.2	$ 587.0	$ 808.2
Total derivative liabilities	47.4	31.0	48.8
Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	321.0	565.2	785.3
Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	32.3	12.7	24.1
Not Designated as Hedging Instruments | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	12.7	18.0	19.2
Not Designated as Hedging Instruments | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	0.5	3.8	3.7
Not Designated as Hedging Instruments | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	13.4	17.4	18.5
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	10.7	10.3	10.1
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	11.1	16.7	18.4
Not Designated as Hedging Instruments | Foreign exchange contracts | Other Assets
Fair Value of Derivative Instruments
Total derivative assets	0.5	3.8	3.7
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses
Fair Value of Derivative Instruments
Total derivative liabilities	1.7	0.9	6.2
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere
Fair Value of Derivative Instruments
Total derivative assets	2.0	7.7	9.1
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere
Fair Value of Derivative Instruments
Total derivative liabilities	$ 2.3	$ 0.7	$ 0.1

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Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ (7.4)	$ (49.4)	$ (24.5)	$ 44.3
John Deere
Classification and gains (losses) including accrued interest expense related to derivative instruments
Gain (loss) on derivative transactions with affiliate party	133.3	62.8	(91.6)	568.1
Interest rate contracts
Classification and gains (losses) including accrued interest expense related to derivative instruments
Cash flow hedges, recognized in OCI	(0.9)	(1.1)	(0.8)	(17.6)
Interest rate contracts | Interest expense
Classification and gains (losses) including accrued interest expense related to derivative instruments
Fair value hedges, gains (losses)	139.9	76.7	(70.7)	568.0
Cash flow hedges, reclassified from OCI	(1.6)	(6.4)	(8.2)	(11.5)
Not designated as hedges, gains (losses)	(2.9)	(2.2)	(4.5)	(3.0)
Foreign exchange contracts | Administrative and operating expenses
Classification and gains (losses) including accrued interest expense related to derivative instruments
Not designated as hedges, gains (losses)	$ (4.5)	$ (47.2)	$ (20.0)	$ 47.3

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Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions	Aug. 01, 2021	Nov. 01, 2020	Aug. 02, 2020
Derivative assets
Gross Amounts Recognized	$ 334.2	$ 587.0	$ 808.2
Derivative liabilities
Gross Amounts Recognized	47.4	31.0	48.8
John Deere
Derivative assets
Gross Amounts Recognized	333.7	583.2	804.5
Netting Arrangements	(43.1)	(23.5)	(35.4)
Net Amount	290.6	559.7	769.1
Derivative liabilities
Gross Amounts Recognized	45.7	30.1	42.6
Netting Arrangements	(43.1)	(23.5)	(35.4)
Net Amount	2.6	6.6	7.2
External
Derivative assets
Gross Amounts Recognized	0.5	3.8	3.7
Netting Arrangements	(0.1)	(0.7)	(0.2)
Net Amount	0.4	3.1	3.5
Derivative liabilities
Gross Amounts Recognized	1.7	0.9	6.2
Netting Arrangements	(0.1)	(0.7)	(0.2)
Net Amount	1.6	0.2	6.0
Derivative Instruments | John Deere
Counterparty Risk and Collateral
Increase in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement	$ 0.0	$ 0.0	$ 0.0

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Pension and Other Postretirement Benefits - Defined Benefit Plan (Details) - Health Care and Life Insurance - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Aug. 01, 2021	Aug. 02, 2020	Feb. 02, 2020	Aug. 01, 2021	Aug. 02, 2020
Defined Benefit Plan Disclosure
Expenses related to defined benefit plans	$ 1.5	$ 1.7		$ 4.6	$ 8.3
2020 Employee-Separation Programs
Defined Benefit Plan Disclosure
Curtailments			$ 3.3

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Employee-Separation Programs (Details) - 2020 Employee-Separation Programs - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Feb. 02, 2020	Aug. 02, 2020
Employee Separation Programs
Total employee separation programs' expenses, pretax		$ 8.7
Health Care and Life Insurance
Employee Separation Programs
Curtailment expense	$ 3.3
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible List]	Selling, General and Administrative Expense