Document and Entity Information
Document and Entity Information | 3 Months Ended |
Jan. 28, 2018shares | |
Document and Entity Information | |
Entity Registrant Name | DEERE JOHN CAPITAL CORP |
Entity Central Index Key | 27,673 |
Document Type | 10-Q |
Document Period End Date | Jan. 28, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --10-28 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 2,500 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Statement of Consolidated Incom
Statement of Consolidated Income - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Revenues | ||
Finance income earned on retail notes | $ 183.6 | $ 171.3 |
Revolving charge account income | 69.1 | 61.2 |
Finance income earned on wholesale receivables | 94.6 | 80.5 |
Lease revenues | 216.4 | 196 |
Other income - net | 21.5 | 13.4 |
Total revenues | 585.2 | 522.4 |
Expenses | ||
Interest expense | 154.1 | 115.1 |
Operating expenses: | ||
Administrative and operating expenses | 103.1 | 122.6 |
Fees paid to John Deere | 16.2 | 17.4 |
Provision for credit losses | 2.8 | 3.7 |
Depreciation of equipment on operating leases | 167.3 | 156.2 |
Total operating expenses | 289.4 | 299.9 |
Total expenses | 443.5 | 415 |
Income of consolidated group before income taxes | 141.7 | 107.4 |
Provision (credit) for income taxes | (256.9) | 33.6 |
Income of consolidated group | 398.6 | 73.8 |
Equity in income of unconsolidated affiliate | 0.8 | 0.5 |
Net income | 399.4 | 74.3 |
Less: Net income attributable to noncontrolling interests | 0.1 | |
Net income attributable to the Company | $ 399.4 | $ 74.2 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Statement of Consolidated Comprehensive Income | ||
Net income | $ 399.4 | $ 74.3 |
Other comprehensive income (loss), net of income taxes | ||
Cumulative translation adjustment | 30.9 | (5.7) |
Unrealized gain on derivatives | 5.4 | 2.1 |
Other comprehensive income (loss), net of income taxes | 36.3 | (3.6) |
Comprehensive income of consolidated group | 435.7 | 70.7 |
Less: Comprehensive income attributable to noncontrolling interests | 0.1 | |
Comprehensive income attributable to the Company | $ 435.7 | $ 70.6 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Assets | |||
Cash and cash equivalents | $ 1,103 | $ 1,055.5 | $ 1,079.5 |
Receivables: | |||
Total receivables | 27,890.1 | 28,395.7 | 26,473.7 |
Allowance for credit losses | (114.1) | (113.8) | (109.9) |
Total receivables - net | 27,776 | 28,281.9 | 26,363.8 |
Other receivables | 98.7 | 89.1 | 88.6 |
Receivables from John Deere | 68.2 | 91 | 114.3 |
Equipment on operating leases - net | 4,672.9 | 4,718.3 | 4,279.3 |
Notes receivable from John Deere | 158.1 | 156.7 | |
Investment in unconsolidated affiliate | 15.5 | 13.8 | 12.2 |
Deferred income taxes | 40.7 | 41 | 27.8 |
Other assets | 516 | 555.5 | 588.1 |
Total Assets | 34,449.1 | 35,002.8 | 32,553.6 |
Short-term borrowings: | |||
Commercial paper and other notes payable | 1,283.9 | 2,051.2 | 31.7 |
Securitization borrowings | 4,302.5 | 4,118.7 | 4,220.2 |
John Deere | 238.3 | 553.2 | 2,255.5 |
Current maturities of long-term borrowings | 5,321.9 | 5,056.9 | 5,009 |
Total short-term borrowings | 11,146.6 | 11,780 | 11,516.4 |
Other payables to John Deere | 247 | 126.5 | 104.3 |
Accounts payable and accrued expenses | 785.7 | 902.1 | 675.3 |
Deposits withheld from dealers and merchants | 176.1 | 181 | 194.3 |
Deferred income taxes | 500.6 | 821.6 | 731.6 |
Long-term borrowings | 17,520.2 | 17,534.4 | 15,815.3 |
Total liabilities | 30,376.2 | 31,345.6 | 29,037.2 |
Commitments and contingencies (Note 7) | |||
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 | 2,609.1 | 2,229.7 | 2,120.5 |
Accumulated other comprehensive income (loss) | (19.5) | (55.8) | (87.4) |
Total Company stockholder's equity | 4,072.4 | 3,656.7 | 3,515.9 |
Noncontrolling interests | 0.5 | 0.5 | 0.5 |
Total stockholder's equity | 4,072.9 | 3,657.2 | 3,516.4 |
Total Liabilities and Stockholder's Equity | 34,449.1 | 35,002.8 | 32,553.6 |
Retail notes | |||
Receivables: | |||
Total receivables | 16,938.8 | 16,730.3 | |
Allowance for credit losses | (55.8) | (55.7) | (54.7) |
Retail notes | Unrestricted | |||
Receivables: | |||
Total receivables | 12,576.7 | 13,042.3 | 12,467.7 |
Retail notes | Securitized | |||
Receivables: | |||
Total receivables | 4,362.1 | 4,172.3 | 4,262.6 |
Revolving charge accounts | |||
Receivables: | |||
Total receivables | 2,606.1 | 3,572.6 | 2,418.2 |
Allowance for credit losses | (39.7) | (39.7) | (39.7) |
Wholesale receivables | |||
Receivables: | |||
Total receivables | 7,683.3 | 6,894.3 | 6,761.5 |
Allowance for credit losses | (10.2) | (9.9) | (7) |
Financing leases | |||
Receivables: | |||
Total receivables | 661.9 | 714.2 | 563.7 |
Allowance for credit losses | $ (8.4) | $ (8.5) | $ (8.5) |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Consolidated Balance Sheet | |||
Common stock, issued shares | 2,500 | 2,500 | 2,500 |
Common stock, outstanding shares | 2,500 | 2,500 | 2,500 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 399.4 | $ 74.3 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 2.8 | 3.7 |
Provision for depreciation and amortization | 172.9 | 161.6 |
Provision for deferred income taxes | (321.3) | 17 |
Undistributed earnings of unconsolidated affiliate | (0.8) | (0.5) |
Change in accounts payable and accrued expenses | (0.1) | (12.6) |
Change in accrued income taxes payable/receivable | (39.6) | (9.5) |
Other | 71.7 | 75.1 |
Net cash provided by operating activities | 285 | 309.1 |
Cash Flows from Investing Activities: | ||
Cost of receivables acquired (excluding wholesale) | (3,928) | (3,473.7) |
Collections of receivables (excluding wholesale) | 5,208.1 | 4,799.4 |
Increase in wholesale receivables - net | (694.9) | (224.5) |
Cost of equipment on operating leases acquired | (431.4) | (451.4) |
Proceeds from sales of equipment on operating leases | 252.8 | 284.2 |
Collections of notes receivable with John Deere | 1.4 | |
Change in restricted cash | 6 | 15.4 |
Other | (9) | (14.1) |
Net cash provided by investing activities | 405 | 935.3 |
Cash Flows from Financing Activities: | ||
Decrease in commercial paper and other notes payable - net | (769) | (350) |
Increase (decrease) in securitization borrowings - net | 182.7 | (778.8) |
Decrease in payable to John Deere - net | (329.6) | (12.3) |
Proceeds from issuance of long-term borrowings | 1,787.6 | 1,036.4 |
Payments of long-term borrowings | (1,504.8) | (1,002.5) |
Dividends paid | (20) | (140) |
Debt issuance costs | (8) | (5) |
Net cash used for financing activities | (661.1) | (1,252.2) |
Effect of exchange rate changes on cash and cash equivalents | 18.6 | (2.3) |
Net increase (decrease) in cash and cash equivalents | 47.5 | (10.1) |
Cash and cash equivalents at the beginning of period | 1,055.5 | 1,089.6 |
Cash and cash equivalents at the end of period | $ 1,103 | $ 1,079.5 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Stockholder's Equity - USD ($) $ in Millions | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total |
Balance at Oct. 30, 2016 | $ 1,482.8 | $ 2,186.3 | $ (83.8) | $ 0.4 | $ 3,585.7 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income | 74.2 | 0.1 | 74.3 | ||
Other comprehensive income (loss) | (3.6) | (3.6) | |||
Dividends declared | (140) | (140) | |||
Balance at Jan. 29, 2017 | 1,482.8 | 2,120.5 | (87.4) | 0.5 | 3,516.4 |
Balance at Oct. 29, 2017 | 1,482.8 | 2,229.7 | (55.8) | 0.5 | 3,657.2 |
Increase (Decrease) in Stockholder's Equity | |||||
Net income | 399.4 | 399.4 | |||
Other comprehensive income (loss) | 36.3 | 36.3 | |||
Dividends declared | (20) | (20) | |||
Balance at Jan. 28, 2018 | $ 1,482.8 | $ 2,609.1 | $ (19.5) | $ 0.5 | $ 4,072.9 |
Organization and Consolidation
Organization and Consolidation | 3 Months Ended |
Jan. 28, 2018 | |
Organization and Consolidation | |
Organization and Consolidation | (1) ββββThe interim consolidated financial statements of John Deere Capital Corporation (Capital Corporation) and its subsidiaries (collectively called the Company) have been prepared by the Company, without audit, pursuant to the rules and regulations of the 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 that the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested that these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Companyβs latest annual report on Form 10βK. 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. Actual results could differ from those estimates. The Company uses a 52/53 week fiscal year with quarters ending on the last Sunday in the reporting period. The first quarter ends for fiscal year 2018 and 2017 were January 28, 2018 and January 29, 2017, respectively. Both periods contained 13 weeks. The Company provides and administers financing for retail purchases of new equipment manufactured by Deere & Companyβs agriculture and turf 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 owned by dealers of those products (wholesale receivables). In addition, the Company leases John Deere equipment and a limited amount of nonβDeere 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 βReceivables.β Receivables and equipment on operating leases are collectively called βReceivables and Leases.β |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Jan. 28, 2018 | |
New Accounting Standards | |
New Accounting Standards | (2) ββ New accounting standards adopted are as follows: In the first quarter of 2018, the Company early adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends Accounting Standards Codification (ASC) 715, Compensation β Retirement Benefits. This ASU required that employers report only the service cost component of the total defined benefit pension and postretirement benefit cost in the same income statement lines as compensation for the participating employees. The other components of these benefit costs are reported outside of operating profit. The ASU was adopted on a retrospective basis that decreased first quarter of 2018 and 2017 operating profit by $2.0 million and $1.7 million, respectively. The adoption did not impact the presentation of defined benefit pension and postretirement benefit costs on the income statement, as the Company reports both the service cost component and other components of these benefit costs in the income statement line administrative and operating expenses. In addition, only the service cost component of the benefit costs is eligible for capitalization, which was adopted beginning the first quarter of 2018. In the first quarter of 2018, the Company adopted ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which amends ASC 323, Investments β Equity Method and Joint Ventures, which did not have a material effect on the Companyβs consolidated financial statements. New accounting standards to be adopted are as follows: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue. The FASB issued several amendments clarifying various aspects of the ASU, including revenue transactions that involve a third party, goods or services that are immaterial in the context of the contract, and licensing arrangements. The Company will adopt the ASU effective the first quarter of fiscal year 2019 using a modified retrospective method. The Companyβs evaluation of the ASU is largely complete. At this point of the evaluation, the Company has not identified an item that will have a material effect on the Companyβs consolidated financial statements. The Company continues to evaluate the ASUβs potential effects on the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends ASC 825-10, Financial Instruments β Overall. This ASU changes the treatment for available-for-sale equity investments by recognizing unrealized fair value changes directly in net income and no longer in Other Comprehensive Income (OCI). The effective date will be the first quarter of fiscal year 2019. Early adoption of the provisions affecting the Company is not permitted. The ASU will be adopted with a cumulative-effect adjustment to the balance sheet in the year of adoption. The Company is evaluating the potential effects on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The ASUβs primary change is the requirement for lessee entities to recognize a lease liability for payments and a right of use asset during the term of operating lease arrangements. The ASU does not significantly change the lesseeβs recognition, measurement, and presentation of expenses and cash flows from the previous accounting standard. Lessorsβ accounting under the ASC is largely unchanged from the previous accounting standard. The ASU currently requires that lessees and lessors use a modified retrospective transition approach. In January 2018, the FASB issued an exposure draft to provide for an adoption option that would not require earlier periods to be restated at the adoption date. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the potential adoption options and the effects on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments β Credit Losses. The ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. The effective date will be the first quarter of fiscal year 2021, with early adoption permitted beginning in fiscal year 2020. The ASU will be adopted using a modified-retrospective approach. The Company is evaluating the potential effects on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Companyβs consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which amends ASC 740, Income Taxes. This ASU requires that the income tax consequences of an intra-entity asset transfer other than inventory are recognized at the time of the transfer. The effective date will be the first quarter of fiscal year 2019. The ASU will be adopted using a modified-retrospective transition approach. The adoption will not have a material effect on the Companyβs consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted, and will be adopted using a retrospective transition approach. The adoption will not have a material effect on the Companyβs consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which amends ASC 805, Business Combinations. This ASU provides further guidance on the definition of a business to determine whether transactions should be accounted for as acquisitions of assets or businesses. The effective date will be the first quarter of fiscal year 2019, with early adoption permitted in certain cases. The ASU will be adopted on a prospective basis and will not have a material effect on the Companyβs consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which amends ASC 718, Compensation β Stock Compensation. This ASU provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. The ASU will be adopted on a prospective basis. The effective date is the first quarter of fiscal year 2019, with early adoption permitted. The adoption will not have a material effect on the Companyβs consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends ASC 815, Derivatives and Hedging. The purpose of this ASU is to better align a companyβs risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The effective date is fiscal year 2020, with early adoption permitted. The Company is evaluating the potential effects on the consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which amends ASC 220, Income Statement β Reporting Comprehensive Income. In December 2017, the U.S. government enacted new tax legislation (tax reform). Included in the provisions of tax reform is a reduction of the corporate income tax rate from 35 percent to 21 percent. Accounting principles generally accepted in the U.S. require that deferred taxes are remeasured to the new corporate tax rate in the period legislation is enacted. The deferred tax adjustment is recorded in the provision for income taxes, including items for which the tax effects were originally recorded in OCI. This treatment results in the items in OCI not reflecting the appropriate tax rate, which are referred to as stranded tax effects. This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. The effective date is fiscal year 2020, with early adoption permitted, including in interim periods. The ASU can be adopted at the beginning of an interim or annual period or retrospectively to each period affected by tax reform. The Company is evaluating the potential effects of the ASU on the consolidated financial statements. The effects of tax reform on the Companyβs consolidated financial statements are outlined in Note 8. |
Other Comprehensive Income Item
Other Comprehensive Income Items | 3 Months Ended |
Jan. 28, 2018 | |
Other Comprehensive Income Items | |
Other Comprehensive Income Items | (3) ββββThe after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): Unrealized Accumulated Cumulative Gain (Loss) Other Translation on Comprehensive Adjustment Derivatives Income (Loss) Balance October 30, 2016 $ (84.1) $ .3 $ (83.8) Other comprehensive income (loss) items before reclassification (5.7) 2.0 (3.7) Amounts reclassified from accumulated other comprehensive income .1 .1 Net current period other comprehensive income (loss) (5.7) 2.1 (3.6) Balance January 29, 2017 $ (89.8) $ 2.4 $ (87.4) Balance October 29, 2017 $ (60.0) $ 4.2 $ (55.8) Other comprehensive income (loss) items before reclassification 30.9 5.4 36.3 Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) 30.9 5.4 36.3 Balance January 28, 2018 $ (29.1) $ 9.6 $ (19.5) Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, (in millions of dollars): Before Tax After Tax (Expense) Tax Three Months Ended January 28, 2018 Amount Credit Amount Cumulative translation adjustment $ 30.9 $ 30.9 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 7.6 $ (2.2) 5.4 Reclassification of realized (gain) loss Net unrealized gain (loss) on derivatives 7.6 (2.2) 5.4 Total other comprehensive income (loss) $ 38.5 $ (2.2) $ 36.3 Three Months Ended January 29, 2017 Cumulative translation adjustment $ (5.7) $ (5.7) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3.1 $ (1.1) 2.0 Reclassification of realized (gain) loss to: Interest rate contracts β Interest expense .2 (.1) .1 Net unrealized gain (loss) on derivatives 3.3 (1.2) 2.1 Total other comprehensive income (loss) $ (2.4) $ (1.2) $ (3.6) |
Receivables
Receivables | 3 Months Ended |
Jan. 28, 2018 | |
Receivables | |
Receivables | (4)ββββPast 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. The Company monitors the credit quality of Receivables as either performing or non-performing monthly. Non-performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes are approximately 120 days delinquent, accrual of finance income is suspended, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer's withholding account, if any, 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 receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended, the collateral should be repossessed or the account should be designated for litigation, and the estimated uncollectible amount written off to the allowance for credit losses. Generally, when a financing lease account becomes 120 days delinquent, the accrual of lease revenue is suspended, the equipment is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer's withholding account, if any, is written off to the allowance for credit losses. 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. An age analysis of past due Receivables that are still accruing interest and non-performing Receivables was as follows (in millions of dollars): January 28, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 130.3 $ 41.6 $ 52.8 $ 224.7 Construction and forestry 76.4 37.2 35.9 149.5 Revolving charge accounts: Agriculture and turf 37.2 9.7 2.0 48.9 Construction and forestry 3.9 1.3 .7 5.9 Wholesale receivables: Agriculture and turf 3.4 3.8 4.1 11.3 Construction and forestry 1.1 .2 1.3 Financing leases: Agriculture and turf 8.9 8.0 2.5 19.4 Construction and forestry 1.3 1.1 .7 3.1 Total Receivables $ 262.5 $ 102.9 $ 98.7 $ 464.1 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 224.7 $ 65.5 $ 13,993.3 $ 14,283.5 Construction and forestry 149.5 27.8 2,478.0 2,655.3 Revolving charge accounts: Agriculture and turf 48.9 1.2 2,476.2 2,526.3 Construction and forestry 5.9 73.9 79.8 Wholesale receivables: Agriculture and turf 11.3 9.2 6,245.7 6,266.2 Construction and forestry 1.3 1,415.8 1,417.1 Financing leases: Agriculture and turf 19.4 6.5 487.1 513.0 Construction and forestry 3.1 1.1 144.7 148.9 Total Receivables $ 464.1 $ 111.3 $ 27,314.7 $ 27,890.1 October 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.2 $ 48.3 $ 45.3 $ 199.8 Construction and forestry 73.0 31.9 39.2 144.1 Revolving charge accounts: Agriculture and turf 15.4 5.6 2.3 23.3 Construction and forestry 2.9 1.1 .3 4.3 Wholesale receivables: Agriculture and turf 4.5 1.6 2.4 8.5 Construction and forestry .1 .1 .1 .3 Financing leases: Agriculture and turf 8.9 7.5 3.6 20.0 Construction and forestry .5 1.1 .1 1.7 Total Receivables $ 211.5 $ 97.2 $ 93.3 $ 402.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 199.8 $ 63.1 $ 14,379.9 $ 14,642.8 Construction and forestry 144.1 24.2 2,403.5 2,571.8 Revolving charge accounts: Agriculture and turf 23.3 1.8 3,458.7 3,483.8 Construction and forestry 4.3 84.5 88.8 Wholesale receivables: Agriculture and turf 8.5 10.8 5,469.6 5,488.9 Construction and forestry .3 1,405.1 1,405.4 Financing leases: Agriculture and turf 20.0 6.2 541.3 567.5 Construction and forestry 1.7 1.7 143.3 146.7 Total Receivables $ 402.0 $ 107.8 $ 27,885.9 $ 28,395.7 January 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 115.1 $ 60.1 $ 72.3 $ 247.5 Construction and forestry 66.9 40.2 27.5 134.6 Revolving charge accounts: Agriculture and turf 32.7 12.0 2.4 47.1 Construction and forestry 2.4 1.2 .6 4.2 Wholesale receivables: Agriculture and turf 2.6 2.9 1.6 7.1 Construction and forestry .5 1.4 1.9 Financing leases: Agriculture and turf 8.5 4.3 1.4 14.2 Construction and forestry 1.7 1.2 .8 3.7 Total Receivables $ 230.4 $ 121.9 $ 108.0 $ 460.3 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 247.5 $ 89.8 $ 13,891.2 $ 14,228.5 Construction and forestry 134.6 26.7 2,340.5 2,501.8 Revolving charge accounts: Agriculture and turf 47.1 1.5 2,296.8 2,345.4 Construction and forestry 4.2 68.6 72.8 Wholesale receivables: Agriculture and turf 7.1 .2 5,772.0 5,779.3 Construction and forestry 1.9 980.3 982.2 Financing leases: Agriculture and turf 14.2 8.6 374.9 397.7 Construction and forestry 3.7 2.0 160.3 166.0 Total Receivables $ 460.3 $ 128.8 $ 25,884.6 $ 26,473.7 Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions, and credit risk quality. An analysis of the allowance for credit losses and investment in Receivables was as follows (in millions of dollars): Three Months Ended January 28, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Provision (credit) for credit losses 2.4 (.4) .8 2.8 Write-offs (5.2) (4.6) (.9) (10.7) Recoveries 2.6 5.0 .1 7.7 Translation adjustments .3 .3 (.1) .5 End of period balance $ 55.8 $ 39.7 $ 10.2 $ 8.4 $ 114.1 Balance individually evaluated * $ 2.7 $ 2.7 Receivables: End of period balance $ 16,938.8 $ 2,606.1 $ 7,683.3 $ 661.9 $ 27,890.1 Balance individually evaluated * $ 58.9 $ 2.1 $ 19.3 $ .1 $ 80.4 Three Months Ended January 29, 2017 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Provision (credit) for credit losses 4.9 (2.2) 1.0 3.7 Write-offs (7.4) (3.1) (.1) (1.1) (11.7) Recoveries .9 5.3 .1 6.3 Translation adjustments (.1) (.1) End of period balance $ 54.7 $ 39.7 $ 7.0 $ 8.5 $ 109.9 Balance individually evaluated * $ .6 $ .2 $ .8 Receivables: End of period balance $ 16,730.3 $ 2,418.2 $ 6,761.5 $ 563.7 $ 26,473.7 Balance individually evaluated * $ 43.3 $ 4.5 $ 1.9 $ .6 $ 50.3 * Remainder is collectively evaluated. Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as nonβperforming. An analysis of impaired Receivables was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment January 28, 2018 * Receivables with specific allowance: Wholesale receivables $ 8.2 $ 8.2 $ 2.7 $ 9.6 Total with specific allowance 8.2 8.2 2.7 9.6 Receivables without specific allowance: Retail notes 22.9 22.6 20.5 Wholesale receivables 5.3 5.3 6.5 Total without specific allowance 28.2 27.9 27.0 Total $ 36.4 $ 36.1 $ 2.7 $ 36.6 Agriculture and turf $ 30.1 $ 29.8 $ 2.7 $ 30.9 Construction and forestry 6.3 6.3 5.7 Total $ 36.4 $ 36.1 $ 2.7 $ 36.6 October 29, 2017 * Receivables with specific allowance: Retail notes $ 2.2 $ 2.1 $ .6 $ 2.2 Wholesale receivables 11.7 11.7 2.6 11.0 Total with specific allowance 13.9 13.8 3.2 13.2 Receivables without specific allowance: Retail notes 18.3 18.0 14.0 Wholesale receivables 9.0 9.0 2.3 Total without specific allowance 27.3 27.0 16.3 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 Agriculture and turf $ 36.0 $ 35.6 $ 3.2 $ 23.9 Construction and forestry 5.2 5.2 5.6 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 January 29, 2017 * Receivables with specific allowance: Retail notes $ 5.1 $ 5.0 $ .6 $ 5.1 Financing Leases .5 .4 .2 .4 Total with specific allowance 5.6 5.4 .8 5.5 Receivables without specific allowance: Retail notes 10.2 10.1 11.2 Wholesale receivables .2 .2 .2 Total without specific allowance 10.4 10.3 11.4 Total $ 16.0 $ 15.7 $ .8 $ 16.9 Agriculture and turf $ 9.5 $ 9.4 $ .3 $ 10.1 Construction and forestry 6.5 6.3 .5 6.8 Total $ 16.0 $ 15.7 $ .8 $ 16.9 * Finance income recognized was not material. 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 dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. During the first quarter of 2018, the Company identified 83 Receivable contracts, primarily retail notes, as troubled debt restructurings with aggregate balances of $4.8 million preβmodification and $4.6 million postβmodification. During the first quarter of 2017, there were 164 Receivable contracts, primarily retail notes, with aggregate balances of $3.2 million preβmodification and $2.4 million postβmodification. During these same periods, there were no significant troubled debt restructurings that subsequently defaulted and were written off. At January 28, 2018, the Company had no commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings. |
Securitization of Receivables
Securitization of Receivables | 3 Months Ended |
Jan. 28, 2018 | |
Securitization of Receivables | |
Securitization of Receivables | (5)ββ 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 nonβVIE 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 did 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 Companyβs consolidated statements because the assets they hold are legally isolated. Use of the assets held by the SPEs or the nonβVIEs 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 resulted in secured borrowings, which are recorded as βSecuritization borrowingsβ on the balance sheet. The securitized retail notes are recorded as βRetail notes securitizedβ on the balance sheet. The total restricted assets on the balance sheet related to these securitizations include the retail notes securitized less an allowance for credit losses, and other assets primarily representing restricted cash. 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 SPEsβ 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 SPEsβ 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 $2,127.9 million, $2,630.5 million, and $2,213.2 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. The liabilities (securitization borrowings and accrued interest) of these SPEs totaled $2,092.4 million, $2,571.1 million, and $2,174.9 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. The credit holders of these SPEs do not have legal recourse to the Companyβs 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 Companyβs 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 $684.4 million, $478.4 million, and $490.4 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. The liabilities (securitization borrowings and accrued interest) were $647.9 million, $454.1 million, and $468.1 million at January 28, 2018, October 29, 2017, and January 29, 2017, 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 conduitsβ receivables, and therefore, does not have the power to direct the activities that most significantly impact the conduitsβ 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 Companyβs carrying values and variable interest related to these conduits were restricted assets (retail notes securitized, allowance for credit losses, and other assets) of $1,652.4 million, $1,155.1 million, and $1,655.1 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. The liabilities (securitization borrowings and accrued interest) related to these conduits were $1,564.6 million, $1,096.3 million, and $1,579.5 million at January 28, 2018, October 29, 2017, and January 29, 2017, respectively. The Companyβs 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): January 28 2018 Carrying value of liabilities $ 1,564.6 Maximum exposure to loss 1,652.4 The total assets of unconsolidated VIEs related to securitizations were approximately $42.8 billion at January 28, 2018. The components of consolidated restricted assets related to secured borrowings in securitization transactions were as follows (in millions of dollars): January 28 October 29 January 29 2018 2017 2017 Retail notes securitized $ 4,362.1 $ 4,172.3 $ 4,262.6 Allowance for credit losses (13.0) (13.5) (12.2) Other assets 115.6 105.2 108.3 Total restricted securitized assets $ 4,464.7 $ 4,264.0 $ 4,358.7 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): January 28 October 29 January 29 2018 2017 2017 Securitization borrowings $ 4,302.5 $ 4,118.7 $ 4,220.2 Accrued interest on borrowings 2.4 2.8 2.3 Total liabilities related to restricted securitized assets $ 4,304.9 $ 4,121.5 $ 4,222.5 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 January 28, 2018, the maximum remaining term of all restricted securitized retail notes was approximately seven years. |
Notes Receivable from John Deer
Notes Receivable from John Deere | 3 Months Ended |
Jan. 28, 2018 | |
Notes Receivable from John Deere | |
Notes Receivable from John Deere | (6)ββNotes 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 range in maturity up to four years. Interest earned from John Deere was $2.8 million in the first three months of 2018 and none for the same period in 2017. The Company had notes receivable from John Deere with the following affiliated companies as follows (in millions of dollars): January 28 October 29 January 29 2018 2017 2017 Limited Liability Company John Deere Financial $ 104.7 $ 102.2 Banco John Deere S.A. 53.4 Total Notes Receivable from John Deere $ 158.1 $ 156.7 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jan. 28, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7)ββ Commitments and contingencies: At January 28, 2018, John Deere Financial Inc., the John Deere finance subsidiary in Canada, had $349.8 million of commercial paper and a fair value liability of $34.1 million for derivatives outstanding, prior to considering applicable netting provisions, with a notional amount of $2,107.4 million that were guaranteed by Capital Corporation. 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 JDCFIβs 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 $2,100.3 million at January 28, 2018. The weighted average interest rate on the debt at January 28, 2018 was 2.2 percent with a maximum remaining maturity of approximately five 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 $8.3 billion at January 28, 2018. The amount of unused commitments to extend credit to customers was $27.8 billion at January 28, 2018. 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 January 28, 2018, Capital Corporation had $40.2 million in unused loan commitments denominated in rubles to Limited Liability Company John Deere Financial, the John Deere finance subsidiary in Russia. At January 28, 2018, the Company had restricted other assets of approximately $33.5 million. See Note 5 for additional restricted assets associated with borrowings related to securitizations. 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. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 28, 2018 | |
Income Taxes | |
Income Taxes | (8) ββββ On December 22, 2017, the U.S. government enacted new tax legislation (tax reform). The primary provisions of tax reform expected to impact the Company in fiscal year 2018 are a reduction to the corporate income tax rate from 35 percent to 21 percent and a transition from a worldwide corporate tax system to a territorial tax system. The reduction in the corporate income tax rate requires the Company to remeasure its net deferred tax liabilities to the new corporate tax rate and the transition to a territorial tax system requires payment of a oneβtime tax on deemed repatriation of undistributed and previously untaxed non-U.S. earnings. Primarily as a result of those provisions of tax reform, the Company recorded a net provisional income tax benefit of $303.1 million in the first quarter of 2018. The discrete tax benefit related to the remeasurement of the Companyβs net deferred tax liabilities to the new corporate income tax rate was $303.9 million and the deemed earnings repatriation tax expense was $15.6 million. The net provisional income tax benefit includes a net benefit of $14.8 million, primarily related to the lower income tax rate on the first quarter of 2018 income. The provisional tax benefit related to the remeasurement of the net deferred tax liabilities is a non-cash benefit. The Company currently plans to pay the deemed repatriation tax over an eight year period, as allowed by tax reform. The 21 percent corporate income tax rate is effective January 1, 2018. Based on the Companyβs October fiscal year end, the U.S. statutory income tax rate for fiscal year 2018 will be approximately 23.3 percent. The first quarter 2018 tax benefit is provisional as outlined below and may change. Tax reform includes expanded bonus depreciation provisions that allow for an immediate tax deduction of certain capital expenses, which could affect the Companyβs 2017 U.S. taxable income. The Company completed a preliminary assessment of earnings that could be repatriated based on reinvestment needs of non-U.S. operations and earnings available for repatriation. The estimated withholding tax that would be incurred from the repatriation of those earnings is included in the first quarter of 2018 net provisional income tax benefit. The Company continues to analyze the provisions of tax reform addressing the net deferred tax liability remeasurement and its calculations, the deemed earnings repatriation, including the determination of undistributed non-U.S. earnings, and evaluate potential Company actions, including repatriating additional non-U.S. earnings and actions that could affect the Companyβs 2017 U.S. taxable income. In addition, the Company continues to prepare its 2017 U.S. income tax returns, undergo income tax audits, and monitor potential legislative action and regulatory interpretations of tax reform. Based on the effective date of certain provisions, the Company will be subject to additional requirements of tax reform beginning in fiscal year 2019. Those provisions include a tax on global intangible low-taxed income (GILTI), a tax determined by base erosion tax benefits (BEAT) from certain payments between a U.S. corporation and foreign subsidiaries, a limitation of certain executive compensation, a deduction for foreign derived intangible income (FDII), and interest expense limitations. The Company has not completed its analysis of those provisions and the estimated impact. The Company also has not determined its accounting policy to treat the taxes due on GILTI as a period cost or include them in the determination of deferred taxes. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 that allows for a measurement period up to one year after the enactment date of tax reform to complete the accounting requirements. The Company will complete the adjustments related to tax reform within the allowed period. The Companyβs unrecognized tax benefits at January 28, 2018 were $39.1 million, compared to $35.5 million at October 29, 2017. The liability at January 28, 2018 consisted of approximately $18.5 million, which would affect the effective tax rate if it was 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 changes in the unrecognized tax benefits for the first three months of 2018 were not significant. The Company expects that any reasonably possible change in the amounts of unrecognized tax benefits in the next 12 months would not be significant. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jan. 28, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | (9) ββββFair 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): January 28, 2018 October 29, 2017 January 29, 2017 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed β net $ 23,426.9 $ 23,266.2 $ 24,123.1 $ 24,016.0 $ 22,113.4 $ 22,011.2 Retail notes securitized β net 4,349.1 4,303.3 4,158.8 4,129.6 4,250.4 4,218.4 Securitization borrowings 4,302.5 4,293.4 4,118.7 4,118.4 4,220.2 4,220.4 Current maturities of long-term borrowings 5,321.9 5,335.9 5,056.9 5,080.6 5,009.0 5,023.2 Long-term borrowings 17,520.2 17,729.8 17,534.4 17,763.6 15,815.3 16,000.5 * 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 short-term 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 included 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): January 28 October 29 January 29 2018 2017 2017 Receivables from John Deere Derivatives: Interest rate contracts $ 64.7 $ 85.4 $ 100.3 Cross-currency interest rate contracts 3.5 5.6 14.0 Other assets Derivatives: Interest rate contracts 9.5 8.1 37.2 Foreign exchange contracts 24.6 0.9 Total derivative assets * $ 77.7 $ 123.7 $ 152.4 Other payables to John Deere Derivatives: Interest rate contracts $ 245.0 $ 125.6 $ 104.3 Cross-currency interest rate contracts 2.0 .9 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 40.9 6.0 12.4 Total derivative liabilities $ 287.9 $ 132.5 $ 116.7 * Excluded from this table were the Companyβs cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. Fair value, nonrecurring Level 3 measurements related to Receivables with specific allowances were not significant during any periods presented. See Note 4 for additional information. The following is a description of the valuation methodologies the Company uses to measure certain financial instruments on the balance sheet at fair value: Derivatives β The Companyβs derivative financial instruments consist of interest rate swaps and caps, foreign currency forwards and swaps, and cross-currency interest rate 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 β 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. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Jan. 28, 2018 | |
Derivative Instruments | |
Derivative Instruments | (10)βββ It is the Companyβs 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 balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivativeβs fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. 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 January 28, 2018, October 29, 2017, and January 29, 2017 were $1,500.0 million, $1,700.0 million, and $1,850.0 million, respectively. The effective portions of the fair value gains or losses on these cash flow hedges were recorded in OCI and subsequently reclassified into interest expense in the same periods during which the hedged transactions affected earnings. These amounts offset the effects of interest rate changes on the related borrowings. Any ineffective portions of the gains or losses on all cash flow interest rate contracts designated as cash flow hedges were recognized currently in interest expense and were not material during any periods presented. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The amount of gain recorded in OCI at January 28, 2018 that is expected to be reclassified to interest expense in the next twelve months if interest rates remain unchanged is approximately $5.7 million after-tax. These contracts mature in up to 25 months. There were no gains or losses 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 these receive-fixed/pay-variable interest rate contracts at January 28, 2018, October 29, 2017, and January 29, 2017 were $8,746.5 million, $8,077.2 million, and $7,307.2 million, respectively. The effective portions of the fair value gains or losses on these contracts were offset by fair value gains or losses on the hedged items (fixed-rate borrowings). Any ineffective portions of the gains or losses were recognized currently in interest expense. The ineffective portions were a loss of $1.3 million and a gain of $2.0 million during the first three months of 2018 and 2017, respectively. The cash flows from these contracts were recorded in operating activities in the statement of consolidated cash flows. The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows (in millions of dollars): Three Months Ended January 28 January 29 2018 2017 Interest rate contracts * $ (145.6) $ (229.7) Borrowings ** 144.3 231.7 * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $11.9 million and $24.7 million during the first three months of 2018 and 2017, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $59.5 million and $61.4 million during the first three months of 2018 and 2017, respectively. Derivatives not designated as hedging instruments The Company has certain interest rate contracts (swaps and caps), foreign exchange contracts (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 these interest rate swaps at January 28, 2018, October 29, 2017, and January 29, 2017 were $2,524.7 million, $2,311.3 million, and $1,981.1 million, the foreign exchange contracts were $1,469.2 million, $1,455.9 million, and $1,064.0 million, and the crossβcurrency interest rate contracts were $75.8 million, $65.8 million, and $67.7 million, respectively. At January 28, 2018, October 29, 2017, and January 29, 2017 there were also $2,197.0 million, $1,594.3 million, and $2,127.3 million, respectively, of interest rate caps purchased and the same amounts sold at the same capped interest rate to facilitate borrowings through securitization of retail notes. 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): January 28 October 29 January 29 2018 2017 2017 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 30.9 $ 64.8 $ 76.2 Not designated as hedging instruments: Interest rate contracts 33.8 20.6 24.1 Cross-currency interest rate contracts 3.5 5.6 14.0 Total not designated 37.3 26.2 38.1 Other Assets Designated as hedging instruments: Interest rate contracts 8.3 7.0 35.8 Not designated as hedging instruments: Interest rate contracts 1.2 1.1 1.4 Foreign exchange contracts 24.6 .9 Total not designated 1.2 25.7 2.3 Total derivative assets $ 77.7 $ 123.7 $ 152.4 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 216.6 $ 107.2 $ 83.7 Not designated as hedging instruments: Interest rate contracts 28.4 18.4 20.6 Cross-currency interest rate contracts 2.0 .9 Total not designated 30.4 19.3 20.6 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 40.9 6.0 12.4 Total not designated 40.9 6.0 12.4 Total derivative liabilities $ 287.9 $ 132.5 $ 116.7 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 Expense or OCI January 28 January 29 Classification 2018 2017 Fair Value Hedges Interest rate contracts Interest expense $ (133.7) $ (205.0) Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * 7.6 3.1 Reclassified from OCI (Effective Portion): Interest rate contracts Interest expense * (.2) Recognized Directly in Income (Ineffective Portion) ** ** Not Designated as Hedges Interest rate contracts Interest expense * $ 1.3 $ .6 Foreign exchange contracts Administrative and operating expenses * (103.3) (5.6) Total not designated $ (102.0) $ (5.0) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts were not significant. Included in the above table are interest expense and administrative and operating expense amounts the Company incurred on derivatives transacted with John Deere. The amount the Company recognized on these affiliate party transactions for the three months ended January 28, 2018 and January 29, 2017 were losses of $134.7 million and $196.8 million, respectively. Counterparty Risk and Collateral The Companyβs 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 center 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. Certain of the Companyβs derivative agreements executed directly with the unrelated external counterparties contain credit support provisions that may require the Company to post collateral based on the size of the net liability positions and credit ratings. At January 28, 2018, October 29, 2017, and January 29, 2017, there were no aggregate liability positions for derivatives with credit-risk-related contingent features. If the creditβriskβrelated contingent features were triggered, the Company would be required to post collateral up to an amount equal to any liability position, prior to considering applicable netting provisions. 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. Some of these agreements executed with unrelated external counterparties include credit support provisions. Each master agreement executed with an unrelated external counterparty permits the net settlement of amounts owed in the event of default or termination. The Company also 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 does not increase the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, as of January 28, 2018. The loss sharing agreement increases the maximum amount of loss that the Company would incur, after considering collateral received and netting arrangements, by $23.5 million and $49.5 million as of October 29, 2017 and January 29, 2017, respectively. 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): January 28, 2018 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 9.5 $ 9.5 John Deere 68.2 $ (33.7) 34.5 Liabilities External 40.9 40.9 John Deere 247.0 (33.7) 213.3 October 29, 2017 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 32.7 $ (.1) $ 32.6 John Deere 91.0 (65.9) 25.1 Liabilities External 6.0 (.1) 5.9 John Deere 126.5 (65.9) 60.6 January 29, 2017 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 38.1 $ (.9) $ 37.2 John Deere 114.3 (90.7) 23.6 Liabilities External 12.4 (.9) 11.5 John Deere 104.3 (90.7) 13.6 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Jan. 28, 2018 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | (11)βββ 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 Companyβs employees included in the plan. The Companyβs pension expense amounted to $1.7 million for the first three months of 2018, compared with $1.4 million for the same period last year. The accumulated benefit obligation and plan net assets for the employees of the Company are not determined separately from Deere & Company. The Company generally provides defined benefit health care and life insurance plans for retired employees in the U.S. as a participating employer in Deere & Companyβs sponsored plans. Health care and life insurance benefits expense is actuarially determined based on the Companyβs employees included in the plans and amounted to $.7 million for the first three months of 2018, compared with $.9 million for the same period last year. Further disclosure for these plans is included in Deere & Companyβs Form 10-Q for the quarter ended January 28, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 28, 2018 | |
Summary of Significant Accounting Policies | |
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. Actual results could differ 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 first quarter ends for fiscal year 2018 and 2017 were January 28, 2018 and January 29, 2017, respectively. Both periods contained 13 weeks. |
Receivables - Non-Performing, Policy | 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. The Company monitors the credit quality of Receivables as either performing or non-performing monthly. Non-performing Receivables represent loans for which the Company has ceased accruing finance income. Generally, when retail notes are approximately 120 days delinquent, accrual of finance income is suspended, the collateral is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer's withholding account, if any, 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 receivable becomes 60 days delinquent, the Company determines whether the accrual of finance income on interest-bearing wholesale receivables should be suspended, the collateral should be repossessed or the account should be designated for litigation, and the estimated uncollectible amount written off to the allowance for credit losses. Generally, when a financing lease account becomes 120 days delinquent, the accrual of lease revenue is suspended, the equipment is repossessed or the account is designated for litigation, and the estimated uncollectible amount, after charging the dealer's withholding account, if any, is written off to the allowance for credit losses. 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. Receivables are considered impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms. Receivables reviewed for impairment generally include those that are either past due, or have provided bankruptcy notification, or require significant collection efforts. Receivables that are impaired are generally classified as non-performing. |
Receivables - Allowance for Credit Losses, Policy | Allowances for credit losses on Receivables are maintained in amounts considered to be appropriate in relation to the Receivables outstanding based on historical loss experience by product category, portfolio duration, delinquency trends, economic conditions, and credit risk quality. |
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 dates, a reduction of the face amount or maturity amount of the debt, or a reduction of accrued interest. |
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 Companyβs 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 balance sheet. Cash collateral received or paid is not offset against the derivative fair values on the 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, or the underlying hedged transaction is no longer likely to occur, or the hedge designation is removed, or the derivative is terminated, hedge accounting is discontinued. Any past or future changes in the derivativeβs fair value, which will not be effective as an offset to the income effects of the item being hedged, are recognized currently in the income statement. |
Other Comprehensive Income It20
Other Comprehensive Income Items (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
Other Comprehensive Income Items | |
Schedule of After-Tax Changes in Accumulated Other Comprehensive Income (Loss) | ββββThe after-tax changes in accumulated other comprehensive income (loss) were as follows (in millions of dollars): Unrealized Accumulated Cumulative Gain (Loss) Other Translation on Comprehensive Adjustment Derivatives Income (Loss) Balance October 30, 2016 $ (84.1) $ .3 $ (83.8) Other comprehensive income (loss) items before reclassification (5.7) 2.0 (3.7) Amounts reclassified from accumulated other comprehensive income .1 .1 Net current period other comprehensive income (loss) (5.7) 2.1 (3.6) Balance January 29, 2017 $ (89.8) $ 2.4 $ (87.4) Balance October 29, 2017 $ (60.0) $ 4.2 $ (55.8) Other comprehensive income (loss) items before reclassification 30.9 5.4 36.3 Amounts reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) 30.9 5.4 36.3 Balance January 28, 2018 $ (29.1) $ 9.6 $ (19.5) |
Schedule of Amounts Recorded in and Reclassifications out of Other Comprehensive Income (Loss) and the Income Tax Effects | Following are amounts recorded in and reclassifications out of other comprehensive income (loss), and the income tax effects, (in millions of dollars): Before Tax After Tax (Expense) Tax Three Months Ended January 28, 2018 Amount Credit Amount Cumulative translation adjustment $ 30.9 $ 30.9 Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 7.6 $ (2.2) 5.4 Reclassification of realized (gain) loss Net unrealized gain (loss) on derivatives 7.6 (2.2) 5.4 Total other comprehensive income (loss) $ 38.5 $ (2.2) $ 36.3 Three Months Ended January 29, 2017 Cumulative translation adjustment $ (5.7) $ (5.7) Unrealized gain (loss) on derivatives: Unrealized hedging gain (loss) 3.1 $ (1.1) 2.0 Reclassification of realized (gain) loss to: Interest rate contracts β Interest expense .2 (.1) .1 Net unrealized gain (loss) on derivatives 3.3 (1.2) 2.1 Total other comprehensive income (loss) $ (2.4) $ (1.2) $ (3.6) |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
Receivables | |
Age Analysis of past due Receivables that are still accruing interest and non-performing Receivables | An age analysis of past due Receivables that are still accruing interest and non-performing Receivables was as follows (in millions of dollars): January 28, 2018 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 130.3 $ 41.6 $ 52.8 $ 224.7 Construction and forestry 76.4 37.2 35.9 149.5 Revolving charge accounts: Agriculture and turf 37.2 9.7 2.0 48.9 Construction and forestry 3.9 1.3 .7 5.9 Wholesale receivables: Agriculture and turf 3.4 3.8 4.1 11.3 Construction and forestry 1.1 .2 1.3 Financing leases: Agriculture and turf 8.9 8.0 2.5 19.4 Construction and forestry 1.3 1.1 .7 3.1 Total Receivables $ 262.5 $ 102.9 $ 98.7 $ 464.1 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 224.7 $ 65.5 $ 13,993.3 $ 14,283.5 Construction and forestry 149.5 27.8 2,478.0 2,655.3 Revolving charge accounts: Agriculture and turf 48.9 1.2 2,476.2 2,526.3 Construction and forestry 5.9 73.9 79.8 Wholesale receivables: Agriculture and turf 11.3 9.2 6,245.7 6,266.2 Construction and forestry 1.3 1,415.8 1,417.1 Financing leases: Agriculture and turf 19.4 6.5 487.1 513.0 Construction and forestry 3.1 1.1 144.7 148.9 Total Receivables $ 464.1 $ 111.3 $ 27,314.7 $ 27,890.1 October 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 106.2 $ 48.3 $ 45.3 $ 199.8 Construction and forestry 73.0 31.9 39.2 144.1 Revolving charge accounts: Agriculture and turf 15.4 5.6 2.3 23.3 Construction and forestry 2.9 1.1 .3 4.3 Wholesale receivables: Agriculture and turf 4.5 1.6 2.4 8.5 Construction and forestry .1 .1 .1 .3 Financing leases: Agriculture and turf 8.9 7.5 3.6 20.0 Construction and forestry .5 1.1 .1 1.7 Total Receivables $ 211.5 $ 97.2 $ 93.3 $ 402.0 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 199.8 $ 63.1 $ 14,379.9 $ 14,642.8 Construction and forestry 144.1 24.2 2,403.5 2,571.8 Revolving charge accounts: Agriculture and turf 23.3 1.8 3,458.7 3,483.8 Construction and forestry 4.3 84.5 88.8 Wholesale receivables: Agriculture and turf 8.5 10.8 5,469.6 5,488.9 Construction and forestry .3 1,405.1 1,405.4 Financing leases: Agriculture and turf 20.0 6.2 541.3 567.5 Construction and forestry 1.7 1.7 143.3 146.7 Total Receivables $ 402.0 $ 107.8 $ 27,885.9 $ 28,395.7 January 29, 2017 90 Days 30-59 Days 60-89 Days or Greater Total Past Due Past Due Past Due Past Due Retail notes: Agriculture and turf $ 115.1 $ 60.1 $ 72.3 $ 247.5 Construction and forestry 66.9 40.2 27.5 134.6 Revolving charge accounts: Agriculture and turf 32.7 12.0 2.4 47.1 Construction and forestry 2.4 1.2 .6 4.2 Wholesale receivables: Agriculture and turf 2.6 2.9 1.6 7.1 Construction and forestry .5 1.4 1.9 Financing leases: Agriculture and turf 8.5 4.3 1.4 14.2 Construction and forestry 1.7 1.2 .8 3.7 Total Receivables $ 230.4 $ 121.9 $ 108.0 $ 460.3 Total Total Non- Total Past Due Performing Current Receivables Retail notes: Agriculture and turf $ 247.5 $ 89.8 $ 13,891.2 $ 14,228.5 Construction and forestry 134.6 26.7 2,340.5 2,501.8 Revolving charge accounts: Agriculture and turf 47.1 1.5 2,296.8 2,345.4 Construction and forestry 4.2 68.6 72.8 Wholesale receivables: Agriculture and turf 7.1 .2 5,772.0 5,779.3 Construction and forestry 1.9 980.3 982.2 Financing leases: Agriculture and turf 14.2 8.6 374.9 397.7 Construction and forestry 3.7 2.0 160.3 166.0 Total Receivables $ 460.3 $ 128.8 $ 25,884.6 $ 26,473.7 |
Analysis of the Allowance for Credit Losses and Investment in Receivables | An analysis of the allowance for credit losses and investment in Receivables was as follows (in millions of dollars): Three Months Ended January 28, 2018 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 55.7 $ 39.7 $ 9.9 $ 8.5 $ 113.8 Provision (credit) for credit losses 2.4 (.4) .8 2.8 Write-offs (5.2) (4.6) (.9) (10.7) Recoveries 2.6 5.0 .1 7.7 Translation adjustments .3 .3 (.1) .5 End of period balance $ 55.8 $ 39.7 $ 10.2 $ 8.4 $ 114.1 Balance individually evaluated * $ 2.7 $ 2.7 Receivables: End of period balance $ 16,938.8 $ 2,606.1 $ 7,683.3 $ 661.9 $ 27,890.1 Balance individually evaluated * $ 58.9 $ 2.1 $ 19.3 $ .1 $ 80.4 Three Months Ended January 29, 2017 Revolving Retail Charge Wholesale Financing Total Notes Accounts Receivables Leases Receivables Allowance: Beginning of period balance $ 56.3 $ 39.7 $ 7.2 $ 8.5 $ 111.7 Provision (credit) for credit losses 4.9 (2.2) 1.0 3.7 Write-offs (7.4) (3.1) (.1) (1.1) (11.7) Recoveries .9 5.3 .1 6.3 Translation adjustments (.1) (.1) End of period balance $ 54.7 $ 39.7 $ 7.0 $ 8.5 $ 109.9 Balance individually evaluated * $ .6 $ .2 $ .8 Receivables: End of period balance $ 16,730.3 $ 2,418.2 $ 6,761.5 $ 563.7 $ 26,473.7 Balance individually evaluated * $ 43.3 $ 4.5 $ 1.9 $ .6 $ 50.3 * Remainder is collectively evaluated. |
Analysis of Impaired Receivables | An analysis of impaired Receivables was as follows (in millions of dollars): Unpaid Average Recorded Principal Specific Recorded Investment Balance Allowance Investment January 28, 2018 * Receivables with specific allowance: Wholesale receivables $ 8.2 $ 8.2 $ 2.7 $ 9.6 Total with specific allowance 8.2 8.2 2.7 9.6 Receivables without specific allowance: Retail notes 22.9 22.6 20.5 Wholesale receivables 5.3 5.3 6.5 Total without specific allowance 28.2 27.9 27.0 Total $ 36.4 $ 36.1 $ 2.7 $ 36.6 Agriculture and turf $ 30.1 $ 29.8 $ 2.7 $ 30.9 Construction and forestry 6.3 6.3 5.7 Total $ 36.4 $ 36.1 $ 2.7 $ 36.6 October 29, 2017 * Receivables with specific allowance: Retail notes $ 2.2 $ 2.1 $ .6 $ 2.2 Wholesale receivables 11.7 11.7 2.6 11.0 Total with specific allowance 13.9 13.8 3.2 13.2 Receivables without specific allowance: Retail notes 18.3 18.0 14.0 Wholesale receivables 9.0 9.0 2.3 Total without specific allowance 27.3 27.0 16.3 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 Agriculture and turf $ 36.0 $ 35.6 $ 3.2 $ 23.9 Construction and forestry 5.2 5.2 5.6 Total $ 41.2 $ 40.8 $ 3.2 $ 29.5 January 29, 2017 * Receivables with specific allowance: Retail notes $ 5.1 $ 5.0 $ .6 $ 5.1 Financing Leases .5 .4 .2 .4 Total with specific allowance 5.6 5.4 .8 5.5 Receivables without specific allowance: Retail notes 10.2 10.1 11.2 Wholesale receivables .2 .2 .2 Total without specific allowance 10.4 10.3 11.4 Total $ 16.0 $ 15.7 $ .8 $ 16.9 Agriculture and turf $ 9.5 $ 9.4 $ .3 $ 10.1 Construction and forestry 6.5 6.3 .5 6.8 Total $ 16.0 $ 15.7 $ .8 $ 16.9 * Finance income recognized was not material. |
Securitization of Receivables (
Securitization of Receivables (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
Securitization of Receivables | |
Unconsolidated Conduits, Carrying Amount of Liabilities Compared to Maximum Exposure to Loss | The Companyβs 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): January 28 2018 Carrying value of liabilities $ 1,564.6 Maximum exposure to loss 1,652.4 |
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): January 28 October 29 January 29 2018 2017 2017 Retail notes securitized $ 4,362.1 $ 4,172.3 $ 4,262.6 Allowance for credit losses (13.0) (13.5) (12.2) Other assets 115.6 105.2 108.3 Total restricted securitized assets $ 4,464.7 $ 4,264.0 $ 4,358.7 The components of consolidated secured borrowings and other liabilities related to securitizations were as follows (in millions of dollars): January 28 October 29 January 29 2018 2017 2017 Securitization borrowings $ 4,302.5 $ 4,118.7 $ 4,220.2 Accrued interest on borrowings 2.4 2.8 2.3 Total liabilities related to restricted securitized assets $ 4,304.9 $ 4,121.5 $ 4,222.5 |
Notes Receivable from John De23
Notes Receivable from John Deere (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
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): January 28 October 29 January 29 2018 2017 2017 Limited Liability Company John Deere Financial $ 104.7 $ 102.2 Banco John Deere S.A. 53.4 Total Notes Receivable from John Deere $ 158.1 $ 156.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
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): January 28, 2018 October 29, 2017 January 29, 2017 Carrying Fair Carrying Fair Carrying Fair Value Value * Value Value * Value Value * Receivables financed β net $ 23,426.9 $ 23,266.2 $ 24,123.1 $ 24,016.0 $ 22,113.4 $ 22,011.2 Retail notes securitized β net 4,349.1 4,303.3 4,158.8 4,129.6 4,250.4 4,218.4 Securitization borrowings 4,302.5 4,293.4 4,118.7 4,118.4 4,220.2 4,220.4 Current maturities of long-term borrowings 5,321.9 5,335.9 5,056.9 5,080.6 5,009.0 5,023.2 Long-term borrowings 17,520.2 17,729.8 17,534.4 17,763.6 15,815.3 16,000.5 * Fair value measurements above were Level 3 for all Receivables and Level 2 for all borrowings. |
Assets and Liabilities Measured at Fair Value 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): January 28 October 29 January 29 2018 2017 2017 Receivables from John Deere Derivatives: Interest rate contracts $ 64.7 $ 85.4 $ 100.3 Cross-currency interest rate contracts 3.5 5.6 14.0 Other assets Derivatives: Interest rate contracts 9.5 8.1 37.2 Foreign exchange contracts 24.6 0.9 Total derivative assets * $ 77.7 $ 123.7 $ 152.4 Other payables to John Deere Derivatives: Interest rate contracts $ 245.0 $ 125.6 $ 104.3 Cross-currency interest rate contracts 2.0 .9 Accounts payable and accrued expenses Derivatives: Foreign exchange contracts 40.9 6.0 12.4 Total derivative liabilities $ 287.9 $ 132.5 $ 116.7 * Excluded from this table were the Companyβs cash equivalents, which were carried at cost that approximates fair value. The cash equivalents consist primarily of money market funds that were Level 1 measurements. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Jan. 28, 2018 | |
Derivative Instruments | |
Fair Value Hedge Interest Rate Contracts and Underlying Borrowings | The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows (in millions of dollars): Three Months Ended January 28 January 29 2018 2017 Interest rate contracts * $ (145.6) $ (229.7) Borrowings ** 144.3 231.7 * Includes changes in fair values of interest rate contracts excluding net accrued interest income of $11.9 million and $24.7 million during the first three months of 2018 and 2017, respectively. ** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $59.5 million and $61.4 million during the first three months of 2018 and 2017, respectively. |
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): January 28 October 29 January 29 2018 2017 2017 Receivables from John Deere Designated as hedging instruments: Interest rate contracts $ 30.9 $ 64.8 $ 76.2 Not designated as hedging instruments: Interest rate contracts 33.8 20.6 24.1 Cross-currency interest rate contracts 3.5 5.6 14.0 Total not designated 37.3 26.2 38.1 Other Assets Designated as hedging instruments: Interest rate contracts 8.3 7.0 35.8 Not designated as hedging instruments: Interest rate contracts 1.2 1.1 1.4 Foreign exchange contracts 24.6 .9 Total not designated 1.2 25.7 2.3 Total derivative assets $ 77.7 $ 123.7 $ 152.4 Other Payables to John Deere Designated as hedging instruments: Interest rate contracts $ 216.6 $ 107.2 $ 83.7 Not designated as hedging instruments: Interest rate contracts 28.4 18.4 20.6 Cross-currency interest rate contracts 2.0 .9 Total not designated 30.4 19.3 20.6 Accounts Payable and Accrued Expenses Not designated as hedging instruments: Foreign exchange contracts 40.9 6.0 12.4 Total not designated 40.9 6.0 12.4 Total derivative liabilities $ 287.9 $ 132.5 $ 116.7 |
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 Expense or OCI January 28 January 29 Classification 2018 2017 Fair Value Hedges Interest rate contracts Interest expense $ (133.7) $ (205.0) Cash Flow Hedges Recognized in OCI (Effective Portion): Interest rate contracts OCI (pretax) * 7.6 3.1 Reclassified from OCI (Effective Portion): Interest rate contracts Interest expense * (.2) Recognized Directly in Income (Ineffective Portion) ** ** Not Designated as Hedges Interest rate contracts Interest expense * $ 1.3 $ .6 Foreign exchange contracts Administrative and operating expenses * (103.3) (5.6) Total not designated $ (102.0) $ (5.0) * Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts. ** The amounts were not significant. |
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): January 28, 2018 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 9.5 $ 9.5 John Deere 68.2 $ (33.7) 34.5 Liabilities External 40.9 40.9 John Deere 247.0 (33.7) 213.3 October 29, 2017 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 32.7 $ (.1) $ 32.6 John Deere 91.0 (65.9) 25.1 Liabilities External 6.0 (.1) 5.9 John Deere 126.5 (65.9) 60.6 January 29, 2017 Derivatives: Gross Amounts Netting Collateral Net Assets External $ 38.1 $ (.9) $ 37.2 John Deere 114.3 (90.7) 23.6 Liabilities External 12.4 (.9) 11.5 John Deere 104.3 (90.7) 13.6 |
New Accounting Standards (Detai
New Accounting Standards (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 28, 2018 | Jan. 28, 2018 | Jan. 29, 2017 | Dec. 31, 2017 | |
New accounting standards adopted | ||||
Corporate federal statutory tax rate (as a percent) | 21.00% | 35.00% | ||
ASU 2017-07 | Early Adoption | ||||
New accounting standards adopted | ||||
Operating profit (loss) | $ (2) | $ (1.7) |
Other Comprehensive Income It27
Other Comprehensive Income Items - After-Tax Changes (Details) 10Q - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
After-tax changes in accumulated other comprehensive income (loss) | ||
Balance | $ 3,657.2 | $ 3,585.7 |
Net current period other comprehensive income (loss) | 36.3 | (3.6) |
Balance | 4,072.9 | 3,516.4 |
Accumulated Other Comprehensive Income (Loss) | ||
After-tax changes in accumulated other comprehensive income (loss) | ||
Balance | (55.8) | (83.8) |
Other comprehensive income (loss) items before reclassification | 36.3 | (3.7) |
Amounts reclassified from accumulated other comprehensive income | 0.1 | |
Net current period other comprehensive income (loss) | 36.3 | (3.6) |
Balance | (19.5) | (87.4) |
Cumulative Translation Adjustment | ||
After-tax changes in accumulated other comprehensive income (loss) | ||
Balance | (60) | (84.1) |
Other comprehensive income (loss) items before reclassification | 30.9 | (5.7) |
Net current period other comprehensive income (loss) | 30.9 | (5.7) |
Balance | (29.1) | (89.8) |
Unrealized Gain (Loss) on Derivatives | ||
After-tax changes in accumulated other comprehensive income (loss) | ||
Balance | 4.2 | 0.3 |
Other comprehensive income (loss) items before reclassification | 5.4 | 2 |
Amounts reclassified from accumulated other comprehensive income | 0.1 | |
Net current period other comprehensive income (loss) | 5.4 | 2.1 |
Balance | $ 9.6 | $ 2.4 |
Other Comprehensive Income It28
Other Comprehensive Income Items - Amounts Recorded in and Reclassifications out of (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Other comprehensive income (loss), before tax | ||
Interest expense | $ (154.1) | $ (115.1) |
Total other comprehensive income (loss), before tax | 38.5 | (2.4) |
Other comprehensive income (loss), tax (expense) credit | ||
Total other comprehensive income (loss), tax (expense) credit | (2.2) | (1.2) |
Other comprehensive income (loss), after tax | ||
Other comprehensive income (loss), net of income taxes | 36.3 | (3.6) |
Cumulative Translation Adjustment | ||
Other comprehensive income (loss), before tax | ||
Total other comprehensive income (loss), before tax | 30.9 | (5.7) |
Other comprehensive income (loss), after tax | ||
Unrealized hedging gain (loss), after tax | 30.9 | (5.7) |
Other comprehensive income (loss), net of income taxes | 30.9 | (5.7) |
Unrealized Gain (Loss) on Derivatives | ||
Other comprehensive income (loss), before tax | ||
Unrealized hedging gain (loss), before tax | 7.6 | 3.1 |
Total other comprehensive income (loss), before tax | 7.6 | 3.3 |
Other comprehensive income (loss), tax (expense) credit | ||
Unrealized hedging gain (loss), tax (expense) credit | (2.2) | (1.1) |
Total other comprehensive income (loss), tax (expense) credit | (2.2) | (1.2) |
Other comprehensive income (loss), after tax | ||
Unrealized hedging gain (loss), after tax | 5.4 | 2 |
Reclassification of realized (gain) loss, after tax | 0.1 | |
Other comprehensive income (loss), net of income taxes | $ 5.4 | 2.1 |
Unrealized Gain (Loss) on Derivatives | Interest rate contracts | Reclassifications of realized gain (loss) | ||
Other comprehensive income (loss), before tax | ||
Interest expense | 0.2 | |
Other comprehensive income (loss), tax (expense) credit | ||
Reclassification of realized (gain) loss, tax expense (credit) | (0.1) | |
Other comprehensive income (loss), after tax | ||
Reclassification of realized (gain) loss, after tax | $ 0.1 |
Receivables - Past Due Age Anal
Receivables - Past Due Age Analysis (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 | |
Receivable, Past Due | |||
Minimum number of days for a receivable to be considered past due | 30 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 464.1 | $ 402 | $ 460.3 |
Total Non-Performing | 111.3 | 107.8 | 128.8 |
Current | 27,314.7 | 27,885.9 | 25,884.6 |
Total Receivables | 27,890.1 | 28,395.7 | 26,473.7 |
30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 262.5 | 211.5 | 230.4 |
60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 102.9 | 97.2 | 121.9 |
90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 98.7 | 93.3 | 108 |
Retail notes | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 16,938.8 | 16,730.3 | |
Retail notes | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 224.7 | 199.8 | 247.5 |
Total Non-Performing | 65.5 | 63.1 | 89.8 |
Current | 13,993.3 | 14,379.9 | 13,891.2 |
Total Receivables | 14,283.5 | 14,642.8 | 14,228.5 |
Retail notes | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 130.3 | 106.2 | 115.1 |
Retail notes | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 41.6 | 48.3 | 60.1 |
Retail notes | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 52.8 | 45.3 | 72.3 |
Retail notes | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 149.5 | 144.1 | 134.6 |
Total Non-Performing | 27.8 | 24.2 | 26.7 |
Current | 2,478 | 2,403.5 | 2,340.5 |
Total Receivables | 2,655.3 | 2,571.8 | 2,501.8 |
Retail notes | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 76.4 | 73 | 66.9 |
Retail notes | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 37.2 | 31.9 | 40.2 |
Retail notes | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 35.9 | 39.2 | 27.5 |
Revolving charge accounts | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 2,606.1 | 3,572.6 | 2,418.2 |
Revolving charge accounts | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 48.9 | 23.3 | 47.1 |
Total Non-Performing | 1.2 | 1.8 | 1.5 |
Current | 2,476.2 | 3,458.7 | 2,296.8 |
Total Receivables | 2,526.3 | 3,483.8 | 2,345.4 |
Revolving charge accounts | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 37.2 | 15.4 | 32.7 |
Revolving charge accounts | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 9.7 | 5.6 | 12 |
Revolving charge accounts | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2 | 2.3 | 2.4 |
Revolving charge accounts | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 5.9 | 4.3 | 4.2 |
Current | 73.9 | 84.5 | 68.6 |
Total Receivables | 79.8 | 88.8 | 72.8 |
Revolving charge accounts | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.9 | 2.9 | 2.4 |
Revolving charge accounts | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.3 | 1.1 | 1.2 |
Revolving charge accounts | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.7 | 0.3 | 0.6 |
Wholesale receivables | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 60 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 7,683.3 | 6,894.3 | 6,761.5 |
Wholesale receivables | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 11.3 | 8.5 | 7.1 |
Total Non-Performing | 9.2 | 10.8 | 0.2 |
Current | 6,245.7 | 5,469.6 | 5,772 |
Total Receivables | 6,266.2 | 5,488.9 | 5,779.3 |
Wholesale receivables | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.4 | 4.5 | 2.6 |
Wholesale receivables | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.8 | 1.6 | 2.9 |
Wholesale receivables | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 4.1 | 2.4 | 1.6 |
Wholesale receivables | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.3 | 0.3 | 1.9 |
Current | 1,415.8 | 1,405.1 | 980.3 |
Total Receivables | 1,417.1 | 1,405.4 | 982.2 |
Wholesale receivables | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.1 | 0.1 | 0.5 |
Wholesale receivables | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.2 | 0.1 | |
Wholesale receivables | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 0.1 | 1.4 | |
Financing leases | |||
Receivable, Past Due | |||
Generally the approximate number of days before a receivable is considered to be non-performing, accrual of finance income is suspended and the estimated uncollectible amount is written off | 120 days | ||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Receivables | $ 661.9 | 714.2 | 563.7 |
Financing leases | Agriculture and turf | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 19.4 | 20 | 14.2 |
Total Non-Performing | 6.5 | 6.2 | 8.6 |
Current | 487.1 | 541.3 | 374.9 |
Total Receivables | 513 | 567.5 | 397.7 |
Financing leases | Agriculture and turf | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 8.9 | 8.9 | 8.5 |
Financing leases | Agriculture and turf | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 8 | 7.5 | 4.3 |
Financing leases | Agriculture and turf | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 2.5 | 3.6 | 1.4 |
Financing leases | Construction and forestry | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 3.1 | 1.7 | 3.7 |
Total Non-Performing | 1.1 | 1.7 | 2 |
Current | 144.7 | 143.3 | 160.3 |
Total Receivables | 148.9 | 146.7 | 166 |
Financing leases | Construction and forestry | 30-59 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.3 | 0.5 | 1.7 |
Financing leases | Construction and forestry | 60-89 Days Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | 1.1 | 1.1 | 1.2 |
Financing leases | Construction and forestry | 90 Days or Greater Past Due | |||
Age Analysis of Past Due Receivables That Are Still Accruing Interest and Non-Performing Receivables | |||
Total Past Due | $ 0.7 | $ 0.1 | $ 0.8 |
Receivables - Allowance for Cre
Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Oct. 29, 2017 | |
Allowance: | |||
Beginning of period balance | $ 113.8 | $ 111.7 | |
Provision (credit) for credit losses | 2.8 | 3.7 | |
Write-offs | (10.7) | (11.7) | |
Recoveries | 7.7 | 6.3 | |
Translation adjustments | 0.5 | (0.1) | |
End of period balance | 114.1 | 109.9 | |
Balance individually evaluated | 2.7 | 0.8 | |
Receivables: | |||
End of year balance | 27,890.1 | 26,473.7 | $ 28,395.7 |
Balance individually evaluated | 80.4 | 50.3 | |
Retail notes | |||
Allowance: | |||
Beginning of period balance | 55.7 | 56.3 | |
Provision (credit) for credit losses | 2.4 | 4.9 | |
Write-offs | (5.2) | (7.4) | |
Recoveries | 2.6 | 0.9 | |
Translation adjustments | 0.3 | ||
End of period balance | 55.8 | 54.7 | |
Balance individually evaluated | 0.6 | ||
Receivables: | |||
End of year balance | 16,938.8 | 16,730.3 | |
Balance individually evaluated | 58.9 | 43.3 | |
Revolving charge accounts | |||
Allowance: | |||
Beginning of period balance | 39.7 | 39.7 | |
Provision (credit) for credit losses | (0.4) | (2.2) | |
Write-offs | (4.6) | (3.1) | |
Recoveries | 5 | 5.3 | |
End of period balance | 39.7 | 39.7 | |
Receivables: | |||
End of year balance | 2,606.1 | 2,418.2 | 3,572.6 |
Balance individually evaluated | 2.1 | 4.5 | |
Wholesale receivables | |||
Allowance: | |||
Beginning of period balance | 9.9 | 7.2 | |
Write-offs | (0.1) | ||
Translation adjustments | 0.3 | (0.1) | |
End of period balance | 10.2 | 7 | |
Balance individually evaluated | 2.7 | ||
Receivables: | |||
End of year balance | 7,683.3 | 6,761.5 | 6,894.3 |
Balance individually evaluated | 19.3 | 1.9 | |
Financing leases | |||
Allowance: | |||
Beginning of period balance | 8.5 | 8.5 | |
Provision (credit) for credit losses | 0.8 | 1 | |
Write-offs | (0.9) | (1.1) | |
Recoveries | 0.1 | 0.1 | |
Translation adjustments | (0.1) | ||
End of period balance | 8.4 | 8.5 | |
Balance individually evaluated | 0.2 | ||
Receivables: | |||
End of year balance | 661.9 | 563.7 | $ 714.2 |
Balance individually evaluated | $ 0.1 | $ 0.6 |
Receivables - Impaired Receivab
Receivables - Impaired Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | Oct. 29, 2017 | |
Recorded Investment | |||
Receivables with specific allowance | $ 8.2 | $ 5.6 | $ 13.9 |
Receivables without specific allowance | 28.2 | 10.4 | 27.3 |
Total | 36.4 | 16 | 41.2 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 8.2 | 5.4 | 13.8 |
Receivables without specific allowance | 27.9 | 10.3 | 27 |
Total | 36.1 | 15.7 | 40.8 |
Specific Allowance | 2.7 | 0.8 | 3.2 |
Average Recorded Investment | |||
Receivables with specific allowance | 9.6 | 5.5 | 13.2 |
Receivables without specific allowance | 27 | 11.4 | 16.3 |
Total | 36.6 | 16.9 | 29.5 |
Agriculture and turf | |||
Recorded Investment | |||
Total | 30.1 | 9.5 | 36 |
Unpaid Principal Balance | |||
Total | 29.8 | 9.4 | 35.6 |
Specific Allowance | 2.7 | 0.3 | 3.2 |
Average Recorded Investment | |||
Total | 30.9 | 10.1 | 23.9 |
Construction and forestry | |||
Recorded Investment | |||
Total | 6.3 | 6.5 | 5.2 |
Unpaid Principal Balance | |||
Total | 6.3 | 6.3 | 5.2 |
Specific Allowance | 0.5 | ||
Average Recorded Investment | |||
Total | 5.7 | 6.8 | 5.6 |
Retail notes | |||
Recorded Investment | |||
Receivables with specific allowance | 5.1 | 2.2 | |
Receivables without specific allowance | 22.9 | 10.2 | 18.3 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 5 | 2.1 | |
Receivables without specific allowance | 22.6 | 10.1 | 18 |
Specific Allowance | 0.6 | 0.6 | |
Average Recorded Investment | |||
Receivables with specific allowance | 5.1 | 2.2 | |
Receivables without specific allowance | 20.5 | 11.2 | 14 |
Wholesale receivables | |||
Recorded Investment | |||
Receivables with specific allowance | 8.2 | 11.7 | |
Receivables without specific allowance | 5.3 | 0.2 | 9 |
Unpaid Principal Balance | |||
Receivables with specific allowance | 8.2 | 11.7 | |
Receivables without specific allowance | 5.3 | 0.2 | 9 |
Specific Allowance | 2.7 | 2.6 | |
Average Recorded Investment | |||
Receivables with specific allowance | 9.6 | 11 | |
Receivables without specific allowance | $ 6.5 | 0.2 | $ 2.3 |
Financing leases | |||
Recorded Investment | |||
Receivables with specific allowance | 0.5 | ||
Unpaid Principal Balance | |||
Receivables with specific allowance | 0.4 | ||
Specific Allowance | 0.2 | ||
Average Recorded Investment | |||
Receivables with specific allowance | $ 0.4 |
Receivables - Troubled Debt Res
Receivables - Troubled Debt Restructurings (Details) $ in Millions | 3 Months Ended | |
Jan. 28, 2018USD ($)item | Jan. 29, 2017USD ($)item | |
Receivables Related to Troubled Debt Restructurings | ||
Receivable contracts in troubled debt restructuring, number | item | 83 | 164 |
Receivables in troubled debt restructurings, aggregate balances, pre-modification | $ 4.8 | $ 3.2 |
Receivables in troubled debt restructurings, aggregate balances, post-modification | 4.6 | 2.4 |
Receivable contracts in troubled debt restructuring, subsequently defaulted | 0 | $ 0 |
Commitments to lend additional funds to borrowers whose accounts were modified in troubled debt restructurings | $ 0 |
Securitization of Receivables33
Securitization of Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 | |
Securitization of Receivables | |||
Unconsolidated conduits, carrying value of liabilities | $ 1,564.6 | ||
Unconsolidated conduits, maximum exposure to loss | 1,652.4 | ||
Retail notes securitized | 4,362.1 | $ 4,172.3 | $ 4,262.6 |
Allowance for credit losses - securitization transactions | (13) | (13.5) | (12.2) |
Other assets - securitization transactions | 115.6 | 105.2 | 108.3 |
Total restricted securitized assets - securitization transactions | 4,464.7 | 4,264 | 4,358.7 |
Securitization borrowings | 4,302.5 | 4,118.7 | 4,220.2 |
Accrued interest on borrowings - securitization transactions | 2.4 | 2.8 | 2.3 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 4,304.9 | 4,121.5 | 4,222.5 |
Maximum remaining term of all restricted receivables | 7 years | ||
VIE-Primary Beneficiary | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | $ 2,127.9 | 2,630.5 | 2,213.2 |
Total liabilities related to restricted securitized assets - securitization transactions | 2,092.4 | 2,571.1 | 2,174.9 |
Non-VIE Banking Operation | |||
Securitization of Receivables | |||
Total restricted securitized assets - securitization transactions | 684.4 | 478.4 | 490.4 |
Total liabilities related to restricted securitized assets - securitization transactions | 647.9 | 454.1 | 468.1 |
VIE-Not Primary Beneficiary | |||
Securitization of Receivables | |||
Total assets | 42,800 | ||
Total restricted securitized assets - securitization transactions | 1,652.4 | 1,155.1 | 1,655.1 |
Total liabilities related to restricted securitized assets - securitization transactions | $ 1,564.6 | $ 1,096.3 | $ 1,579.5 |
Notes Receivable from John De34
Notes Receivable from John Deere (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Oct. 29, 2017 | |
John Deere | |||
Notes Receivable from John Deere | |||
Interest earned | $ 2.8 | $ 0 | |
Notes receivable from John Deere | $ 158.1 | $ 156.7 | |
John Deere | Maximum | |||
Notes Receivable from John Deere | |||
Maximum terms for related party notes receivable | 4 years | ||
Limited Liability Company John Deere Financial | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | $ 104.7 | 102.2 | |
Banco John Deere S.A. | |||
Notes Receivable from John Deere | |||
Notes receivable from John Deere | $ 53.4 | $ 54.5 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | 3 Months Ended |
Jan. 28, 2018USD ($) | |
John Deere Financial Inc. | Guarantees of debt and derivatives | Commercial paper | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 349.8 |
John Deere Financial Inc. | Guarantees of debt and derivatives | Derivative Instruments | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | 34.1 |
Notional amount | 2,107.4 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | |
Guarantee Obligations | |
Carrying value of assets or liabilities related to JDCFI | 0 |
John Deere Canada Funding Inc. (JDCFI) | VIE-Not Primary Beneficiary | Guarantees of debt and derivatives | |
Guarantee Obligations | |
Guarantee obligations maximum exposure | $ 2,100.3 |
Weighted average interest rate (as a percent) | 2.20% |
Maximum remaining maturity | 5 years |
Commitments and Contingencies36
Commitments and Contingencies - Commitments (Details) $ in Millions | Jan. 28, 2018USD ($) |
Commitments | |
Restricted other assets | $ 33.5 |
Limited Liability Company John Deere Financial | |
Commitments | |
Unused commitments | 40.2 |
John Deere dealers | |
Commitments | |
Unused commitments | 8,300 |
Customers | |
Commitments | |
Unused commitments | $ 27,800 |
Minimum percentage of unused commitments to extend credit to customers that relate to revolving charge accounts | 95.00% |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 28, 2018 | Jan. 28, 2018 | Oct. 28, 2018 | Dec. 31, 2017 | |
U.S. Tax Reform | ||||
Corporate federal statutory tax rate (as a percent) | 21.00% | 35.00% | ||
Net provisional income tax expense (benefit) | $ (303.1) | |||
Discrete tax benefit related to the remeasurement of net deferred tax liabilities | (303.9) | |||
Deemed earnings repatriation tax | 15.6 | |||
Net tax expense (benefit) related to lower income tax rate | $ (14.8) | |||
Deemed repatriation tax payment period | 8 years | |||
Forecasted | ||||
U.S. Tax Reform | ||||
Effective statutory income tax rate (as a percent) | 23.30% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 |
Unrecognized Tax Benefits | ||
Unrecognized tax benefits | $ 39.1 | $ 35.5 |
Unrecognized tax benefits affecting effective tax rate if recognized | $ 18.5 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Fair Values of Financial Instruments | |||
Securitization borrowings | $ 4,302.5 | $ 4,118.7 | $ 4,220.2 |
Current maturities of long-term borrowings | 5,321.9 | 5,056.9 | 5,009 |
Long-term borrowings | 17,520.2 | 17,534.4 | 15,815.3 |
Level 3 | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 23,266.2 | 24,016 | 22,011.2 |
Retail notes securitized - net | 4,303.3 | 4,129.6 | 4,218.4 |
Level 2 | |||
Fair Values of Financial Instruments | |||
Securitization borrowings | 4,293.4 | 4,118.4 | 4,220.4 |
Current maturities of long-term borrowings | 5,335.9 | 5,080.6 | 5,023.2 |
Long-term borrowings | 17,729.8 | 17,763.6 | 16,000.5 |
Carrying Value | |||
Fair Values of Financial Instruments | |||
Receivables financed - net | 23,426.9 | 24,123.1 | 22,113.4 |
Retail notes securitized - net | 4,349.1 | 4,158.8 | 4,250.4 |
Securitization borrowings | 4,302.5 | 4,118.7 | 4,220.2 |
Current maturities of long-term borrowings | 5,321.9 | 5,056.9 | 5,009 |
Long-term borrowings | $ 17,520.2 | $ 17,534.4 | $ 15,815.3 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liaibilities - Recurring (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Derivative assets | $ 77.7 | $ 123.7 | $ 152.4 |
Derivative liabilities | 287.9 | 132.5 | 116.7 |
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 | |||
Derivative assets | 77.7 | 123.7 | 152.4 |
Derivative liabilities | 287.9 | 132.5 | 116.7 |
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 | 64.7 | 85.4 | 100.3 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Level 2 | Interest rate contracts | Other assets | |||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | |||
Derivative assets | 9.5 | 8.1 | 37.2 |
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 | 245 | 125.6 | 104.3 |
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 | 24.6 | 0.9 | |
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 | 40.9 | 6 | 12.4 |
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 | 3.5 | 5.6 | $ 14 |
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 | $ 0.9 |
Derivative Instruments - Cash F
Derivative Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 | |
Cash Flow Hedges | |||
Cash flow hedge gain (loss) recorded in OCI to be reclassified within twelve months | $ 5.7 | ||
Maximum maturity of cash flow hedge interest rate and cross-currency interest rate contracts | 25 months | ||
Gains or losses reclassified from OCI to earnings | $ 0 | ||
Interest rate contracts | Cash flow hedges | Designated as hedges | |||
Cash Flow Hedges | |||
Notional amounts | $ 1,500 | $ 1,700 | $ 1,850 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value Hedges (Details) - Interest rate contracts - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Oct. 29, 2017 | |
Fair Value Hedges | |||
Gains (losses) on ineffective portion of interest rate fair value hedge derivatives | $ (1.3) | $ 2 | |
Gain (Loss) on Fair Value Hedges | |||
Gains (losses) on interest rate contracts | (145.6) | (229.7) | |
Net accrued interest income on interest rate contracts | 11.9 | 24.7 | |
Gains (losses) on borrowings | 144.3 | 231.7 | |
Accrued interest expense on borrowings | 59.5 | 61.4 | |
Fair Value Hedges | Designated as hedges | |||
Fair Value Hedges | |||
Notional amounts | $ 8,746.5 | $ 7,307.2 | $ 8,077.2 |
Derivative Instruments - Not De
Derivative Instruments - Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 2,524.7 | $ 2,311.3 | $ 1,981.1 |
Interest rate caps | Purchased | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 2,197 | 1,594.3 | 2,127.3 |
Interest rate caps | Sold | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 2,197 | 1,594.3 | 2,127.3 |
Foreign exchange contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | 1,469.2 | 1,455.9 | 1,064 |
Cross-currency interest rate contracts | |||
Derivatives Not Designated as Hedging Instruments | |||
Notional amounts | $ 75.8 | $ 65.8 | $ 67.7 |
Derivative Instruments - Fair44
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Oct. 29, 2017 | Jan. 29, 2017 |
Fair Value of Derivative Instruments | |||
Total derivative assets | $ 77.7 | $ 123.7 | $ 152.4 |
Total derivative liabilities | 287.9 | 132.5 | 116.7 |
Designated as hedges | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 30.9 | 64.8 | 76.2 |
Designated as hedges | Interest rate contracts | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 8.3 | 7 | 35.8 |
Designated as hedges | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 216.6 | 107.2 | 83.7 |
Not Designated as Hedging Instruments | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 37.3 | 26.2 | 38.1 |
Not Designated as Hedging Instruments | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 1.2 | 25.7 | 2.3 |
Not Designated as Hedging Instruments | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 30.4 | 19.3 | 20.6 |
Not Designated as Hedging Instruments | Accounts payable and accrued expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 40.9 | 6 | 12.4 |
Not Designated as Hedging Instruments | Interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 33.8 | 20.6 | 24.1 |
Not Designated as Hedging Instruments | Interest rate contracts | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 1.2 | 1.1 | 1.4 |
Not Designated as Hedging Instruments | Interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 28.4 | 18.4 | 20.6 |
Not Designated as Hedging Instruments | Foreign exchange contracts | Other assets | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 24.6 | 0.9 | |
Not Designated as Hedging Instruments | Foreign exchange contracts | Accounts payable and accrued expenses | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | 40.9 | 6 | 12.4 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Receivables from John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative assets | 3.5 | 5.6 | $ 14 |
Not Designated as Hedging Instruments | Cross-currency interest rate contracts | Other payables to John Deere | |||
Fair Value of Derivative Instruments | |||
Total derivative liabilities | $ 2 | $ 0.9 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Statement of Consolidated Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Not designated as hedges, gains (losses) | $ (102) | $ (5) |
John Deere | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Gain (loss) on derivatives transactions with affiliate party | (134.7) | (196.8) |
Interest rate contracts | Interest expense | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Fair value hedges, gains (losses) | (133.7) | (205) |
Not designated as hedges, gains (losses) | 1.3 | 0.6 |
Interest rate contracts | Interest expense | Cash flow hedges | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Cash flow hedges, reclassified from OCI, effective portion, gains (losses) | (0.2) | |
Interest rate contracts | OCI (pretax) | ||
Classification and gains (losses) including accrued interest expense related to derivative instruments | ||
Cash flow hedges, recognized in OCI, effective portion, gains (losses) | 7.6 | 3.1 |
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) | $ (103.3) | $ (5.6) |
Derivative Instruments - Counte
Derivative Instruments - Counterparty Risk and Collateral (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | Oct. 29, 2017 | |
Derivative assets | |||
Gross Amounts Recognized | $ 77.7 | $ 152.4 | $ 123.7 |
Derivative liabilities | |||
Gross Amounts Recognized | 287.9 | 116.7 | 132.5 |
John Deere | |||
Derivative assets | |||
Gross Amounts Recognized | 68.2 | 114.3 | 91 |
Netting Arrangements | (33.7) | (90.7) | (65.9) |
Net Amount | 34.5 | 23.6 | 25.1 |
Derivative liabilities | |||
Gross Amounts Recognized | 247 | 104.3 | 126.5 |
Netting Arrangements | (33.7) | (90.7) | (65.9) |
Net Amount | 213.3 | 13.6 | 60.6 |
External | |||
Derivative assets | |||
Gross Amounts Recognized | 9.5 | 38.1 | 32.7 |
Netting Arrangements | (0.9) | (0.1) | |
Net Amount | 9.5 | 37.2 | 32.6 |
Derivative liabilities | |||
Gross Amounts Recognized | 40.9 | 12.4 | 6 |
Netting Arrangements | (0.9) | (0.1) | |
Net Amount | 40.9 | 11.5 | 5.9 |
Derivative Instruments | |||
Counterparty Risk and Collateral | |||
Aggregate liability positions for derivatives with credit risk related contingent features | 0 | 0 | 0 |
Derivative Instruments | John Deere | |||
Counterparty Risk and Collateral | |||
Increase (decrease) in maximum loss if derivative counterparties fail to meet obligations - loss sharing agreement | $ 0 | $ 49.5 | $ 23.5 |
Pension and Other Postretirem47
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Pensions | ||
Defined Benefit Plan Disclosure | ||
Expenses related to defined benefit plans | $ 1.7 | $ 1.4 |
Health Care and Life Insurance | ||
Defined Benefit Plan Disclosure | ||
Expenses related to defined benefit plans | $ 0.7 | $ 0.9 |