Financial Services Financial Services Operations - Worldwide Deere & Company Worldwide Financial Services Operations

Transcription

1 Financial Services Financial Services Operations - Worldwide Deere & Company Worldwide Financial Services Operations (millions of dollars) John Deere Financial Services, Inc (3) 2012 Moline, Illinois Revenues $1,556 $1,492 $1,687 $2,035 $2,370 $2,447 $2,283 $2,298 $2,373 $2,454 Johnston, Iowa Operating profit John Deere Capital Corporation* (1) Net income Reno, Nevada John Deere Leasing Company* Total assets 14,714 15,937 19,057 21,316 23,518 24,866 25,964 27,507 29,795 34,495 Johnston, Iowa Financing receivables and leases-net (2) 11,281 12,456 15,657 17,863 19,615 19,290 20,091 21,847 24,965 28,293 John Deere Insurance Co.* Trade accounts and notes receivable-net 2,279 2,766 2,622 2,486 2,476 2,665 2,346 2,980 2,807 3,333 Johnston, Iowa John Deere Risk Protection* Receivables and leases administered 16,476 18,620 20,298 21,547 22,543 22,281 22,729 25,029 27,918 31,746 Johnston, Iowa Banco John Deere S.A.** (1) See pages 2 through 5. Indaiatuba, Brazil John Deere Credit Oy** Tampere, Finland John Deere Financial, Inc.** Burlington, Ontario, Canada Edmonton, Alberta, Canada John Deere Limited** Grimsby, Ontario, Canada John Deere Finance Lease Co., Ltd.** Tianjin, China John Deere Financial LLC** Moscow, Russia John Deere Financial India Private Limited** Pune, India John Deere Leasing Limited** Bangkok, Thailand John Deere Warranty Inc.*** Williston, Vermont John Deere Indemnity Inc.*** Williston, Vermont (2) Beginning in 2005, includes Securitized financing receivables. (3) Beginning in fiscal year 2011, the previous Credit segment and the "Other" segment were combined into the Financial Services segment. The "Other" segment consisted of an insurance business related to extended warranty policies for equipment that did not meet the materiality threshold of reporting. Periods prior to 2009 were not restated for this change. *Entities owned by John Deere Financial Services, Inc. **Entities owned by Deere & Company equipment subsidiaries ***Entities owned by Deere & Company. These entities were part of the "Other" segment prior to Financial Services-1

2 John Deere Capital Corporation and Subsidiaries (millions of dollars) as of October 31 John Deere Capital Corporation Deere Receivables Corporation John Deere Financial Mexico S.A. Reno, Nevada Reno, Nevada Monterrey, Mexico Deere Credit, Inc. John Deere Funding Corporation Servicios Administrativos John Deere S.A. De C.V. Johnston, Iowa Reno, Nevada Monterrey, Mexico Deere Credit Services, Inc. John Deere Receivables, Inc. John Deere Credit Compañía Financiera S.A. Johnston, Iowa Reno, Nevada Rosario, Argentina Deere Capital Inc. John Deere Bank S.A. John Deere Financial Limited Reno, Nevada Luxembourg, Luxembourg Brisbane, Australia Farm Plan Corporation John Deere Financial S.A.S. (1) John Deere Financial Chile SpA Madison, Wisconsin Ormes, France Santiago, Chile John Deere Financial, f.s.b. Madison, Wisconsin John Deere Acceptances S.r.l. Vignate, Italy (1) Joint venture Past Dues and Losses Retail Notes: Balances 30 days or more past due $195.6 $153.0 Percent of ending retail notes receivable 1.41%.97% Payments 60 days or more past due $24.2 $15.8 $13.9 $17.8 $22.8 $22.0 $38.0 $15.5 Percent of ending retail notes receivable.40%.23%.15%.17%.19%.19%.33%.13% Retail note losses $20.5 $7.9 $1.4 $7.3 $17.5 $30.3 $64.9 $22.9 $7.7 $.6 Percent of average retail notes receivable.36%.13%.02%.07%.16%.26%.59%.20%.06%.00% Revolving Charge Accounts and Operating Loans: Balances 30 days or more past due $27.0 $20.9 Percent of ending revolving charge accounts and operating loans receivable 1.06%.85% Payments 60 days or more past due $13.3 $13.5 $12.5 $21.1 $15.3 $15.1 $19.8 $12.7 Percent of ending revolving charge accounts and operating loans receivable.80%.74%.65% 1.12%.83%.69%.80%.50% Revolving charge account and operating loans losses $24.0 $16.5 $20.1 $25.3 $26.8 $26.7 $54.3 $65.5 $13.0 $8.8 Percent of average revolving charge accounts and operating loans receivable 1.59%.99% 1.17% 1.47% 1.55% 1.35% 2.46% 2.82%.55%.38% Financing Leases: Balances 30 days or more past due $11.4 $10.5 Percent of ending financing leases receivable 2.49% 2.01% Payments 60 days or more past due $4.2 $3.2 $4.5 $3.5 $4.7 $5.4 $6.0 $6.9 Percent of ending financing leases receivable.98%.79% 1.09%.83% 1.09% 1.29% 1.53% 1.64% Financing lease losses $7.7 $3.1 $.4 $2.3 $3.0 $2.2 $4.0 $2.0 $3.5 $1.3 Percent of average financing leases receivable 1.76%.75%.10%.57%.74%.51% 1.03%.52%.82%.28% Wholesale Notes: Balances 30 days or more past due $5.7 $15.4 Percent of ending wholesale notes receivable.11%.24% Payments 60 days or more past due $5.9 $7.9 $1.7 $.9 $.9 $2.3 $1.6 $3.8 Percent of ending wholesale notes receivable.20%.23%.05%.02%.03%.06%.04%.08% Wholesale note losses $3.9 $6.8 $.4 ($0.6) $1.4 $.4 $2.7 ($1.1) $0.5 $0.9 Percent of average wholesale notes receivable.11%.20%.01% -.01%.04%.01%.06% -.02%.01%.01% (2) Beginning in 2011, the Company switched to reporting past due balances 30 days or more past due from reporting payments 60 days or more past due. Prior periods were not restated. Capital Corp-2

3 Capital Corp-3 John Deere Capital Corporation and Subsidiaries (millions of dollars) as of October 31 Retail Notes Receivable by Product Category (1)(2) Agriculture and turf equipment - new $3,761.0 $4,572.5 $4,874.2 $5,284.1 $5,957.2 $6,187.6 $5,332.2 $5,725.7 $6,151.5 $6,884.7 Agriculture and turf equipment - new (securitized) , , ,254.2 Agriculture and turf equipment - used 1, , , , , , , , , ,637.8 Agriculture and turf equipment - used (securitized) , , , , , ,871.9 Construction and forestry equipment new 1, , , , , , Construction and forestry equipment new (securitized) Construction and forestry equipment used Construction and forestry equipment used (securitized) Recreational products Total 6, , , , , , , , , ,075.4 Unearned finance income Equipment (633.0) (683.0) (894.5) (1,048.0) (1,195.9) (1,129.2) (446.9) (294.7) (309.4) (302.5) Equipment (securitized) (186.1) (330.6) (280.0) (152.6) (423.4) (26.8) (36.3) (44.1) Recreational products (28.4) (18.5) (12.8) (7.8) (5.4) (3.8) Total (661.4) (701.5) (1,093.4) (1,386.4) (1,481.3) (1,285.6) (870.3) (321.5) (345.7) (346.6) Retail notes receivable $6,109.7 $6,873.7 $9,233.6 $10,757.6 $11,960.7 $11,729.1 $11,344.2 $12,254.2 $13,871.7 $15,728.8 (1) Beginning in 2005, the Capital Corporation's new securitizations of receivables met the criteria for secured borrowings rather than sales of receivables under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. At October 31, 2012, 2011, 2010, 2009, 2008, 2007, 2006 and 2005, $3,635.3 million, $2,923.2 million, $2,264.9 million, $3,110.1 million, $1,592.5 million, $2,150.4 million, $2,173.4 million and $1,340.1 million, respectively, was recorded as "Retail notes securitized" on the balance sheet. During 2004 and 2003, the Capital Corporation received net proceeds of $2,219 million and $1,730 million, respectively, from the sale of receivables to special purpose entities (SPEs) and to private third parties. The Company acts as agent for the buyers in collection and administration of the notes it has sold. (2) John Deere's agricultural equipment operations and the commerical and consumer equipment operations were combined into the agriculture and turf segment at the beginning of the third quarter of Information about Deere & Company's business segments has been revised to conform to the current organization. Financing and Operating Leases by Product Category (3) Financing Leases Receivable: Agriculture and turf equipment $284.5 $302.3 $314.5 $330.2 $329.3 $289.1 $283.1 $298.2 $325.1 $375.9 Construction and forestry equipment Other equipment Total Estimated residual values Unearned finance income (66.7) (64.4) (64.6) (69.3) (69.6) (64.4) (61.8) (61.7) (65.6) (66.8) Financing leases receivable $427.3 $406.0 $411.7 $420.8 $430.3 $417.9 $392.8 $420.4 $458.7 $522.4 Cost of Equipment on Operating Leases: Agriculture and turf equipment $801.7 $594.5 $531.0 $522.8 $569.6 $676.2 $780.7 $971.2 $1,105.9 $1,302.7 Construction and forestry equipment Other equipment Total 1, , , , , , , , , ,768.5 Accumulated depreciation (386.7) (306.0) (281.4) (313.7) (348.4) (371.7) (375.0) (350.8) (345.9) (350.3) Equipment on operating leases-net $879.2 $757.6 $793.9 $900.1 $995.2 $1,053.4 $1,023.2 $1,141.8 $1,232.1 $1,418.2 (3) John Deere's agricultural equipment operations and the commerical and consumer equipment operations were combined into the agriculture and turf segment at the beginning of the third quarter of Information about Deere & Company's business segments has been revised to conform to the current organization.

4 John Deere Capital Corporation and Subsidiaries (millions of dollars) for the year ended October 31 Statement of Consolidated Income and Retained Earnings Revenues Finance income earned on retail notes $ $ $ $ $ $ $ $ $ $ Lease revenues Revolving charge account income Finance income earned on wholesale receivables Operating loan income Income on receivables sold (1) Crop insurance commissions Other income - net Total revenues 1, , , , , , , , , ,674.6 Expenses Interest expense Operating expenses: Administrative and operating expenses Fees paid to John Deere Provision (credit) for credit losses (.2) Depreciation of equipment on operating leases Total operating expenses Total expenses , , , , , , ,075.5 Income of consolidated group before income taxes Provision for income taxes Income of consolidated group Equity in income of unconsolidated affiliate Net income $ $ $ $ $ $ $ $ $ $ Less: Net income attributable to noncontrolling interest Net income attributable to the Company $ $ $ $ $ $ $ $ $ $ Dividends paid (205.0) (420.0) (150.0) (85.0) (525.0) (465.1) (195.0) (294.0) Retained earnings at beginning of year 1, , , , , , , ,226.1 Retained earnings at end of year $ 1,119.4 $ $ 1,094.7 $ 1,300.9 $ 1,087.1 $ $ 1,032.1 $ 1,156.5 $ 1,226.1 $ 1,608.8 Ratio of earnings to fixed charges (1) Beginning in 2010, "Income on receivables sold" is included in "Other income - net" JDCC - Income-4

5 John Deere Capital Corporation and Subsidiaries (millions of dollars) as of October 31 Consolidated Balance Sheet Assets Cash and cash equivalents $342.5 $209.5 $250.2 $119.2 $190.8 $1,082.6 $870.6 $355.7 $362.1 $628.4 Receivables: Retail notes 6, , , , , , , , , ,093.5 Retail notes securitized 1, , , , , , , ,635.3 Revolving charge accounts 1, , , , , , , , , ,427.7 Wholesale receivables 2, , , , , , , , , ,483.1 Financing leases Operating loans Total receivables 11, , , , , , , , , ,204.3 Allowance for credit losses (123.8) (112.6) (96.4) (92.8) (99.2) (105.2) (158.2) (148.6) (126.3) (114.0) Total receivables net 10, , , , , , , , , ,090.3 Other receivables Receivable from John Deere Equipment on operating leases - net , , , , ,418.2 Notes receivable from John Deere Notes receivable - unconsolidated affiliates Investment in unconsolidated affiliate Deferred income taxes 14.6 Other assets , Total Assets $12,955.6 $13,888.7 $16,567.4 $18,377.4 $19,761.5 $21,313.6 $21,701.5 $22,624.5 $24,331.3 $28,093.9 Liabilities and Stockholder's Equity Short-term borrowings: Commercial paper and other notes payable (1) $1,691.8 $1,553.8 $1,696.0 $2,289.5 $2,679.2 $2,814.5 $35.9 $1,349.5 $761.2 $1,009.3 Other notes payable (2) , , , ,622.2 Securitization borrowings (3) 3, , , ,574.8 John Deere , , , Current maturities of long-term borrowings 1, , , , , , , , , ,912.9 Total short-term borrowings 3, , , , , , , , , ,013.4 Other payables to John Deere Accounts payable and accrued expenses (4) Deposits withheld from dealers and merchants Deferred income taxes (5) Long-term borrowings 6, , , , , , , , , ,769.9 Total liabilities 11, , , , , , , , , ,030.3 Stockholder s equity: Common stock, without par value (issued and outstanding - 2,500 shares owned by John Deere Financial Services, Inc.) , , , , ,432.8 Retained earnings 1, , , , , , , ,608.8 Accumulated other comprehensive income (loss): Cumulative translation adjustment Unrealized gain on investments Unrealized gain (loss) on derivatives (19.3) (5.1) (8.3) (40.0) (44.1) (29.2) (8.3) (11.6) Total accumulated other comprehensive income (loss) (30.8) Total Company stockholder s equity 1, , , , , , , , , ,063.2 Noncontrolling interests (4) Total stockholder s equity 1, , , , , , , , , ,063.6 Total Liabilities and Stockholder's Equity $12,955.6 $13,888.7 $16,567.4 $18,377.4 $19,761.5 $21,313.6 $21,701.5 $22,624.5 $24,331.3 $28,093.9 Receivables and Leases Administered (millions of dollars) Total Receivables and Leases owned by the Company $11,979.6 $13,342.1 $16,002.3 $17,668.6 $18,747.3 $18,954.0 $19,123.2 $21,002.1 $23,310.7 $26,622.5 Administered - with limited recourse (6) 2, , , Administered - without recourse (7) Total Receivables and Leases administered $14,574.4 $16,394.2 $17,721.6 $18,622.3 $18,969.8 $19,116.7 $19,251.6 $21,082.3 $23,349.2 $26,638.8 Average Interest Cost of All Indebtedness Weighted average annual interest rates 3.5% 3.1% 3.9% 5.0% 5.4% 4.7% 4.0% 3.0% 2.7% 2.2% (1) Prior to 2009, this line included commercial paper only. (2) Prior to 2009, this line included other notes payable and securitization borrowings. (3) Prior to 2009, securitization borrowings were included in the Other notes payable line. (4) In the first quarter of 2010, the Company adopted Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) 810, Consolidation (FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements). Periods prior to 2009 were not restated for this change and were included in Accounts payable and accrued expenses. (5) Prior to 2005, these amounts were included in Accounts payable and accrued expenses. (6) The Company's maximum exposure under all Receivable and Lease recourse provisions at October 31, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004 and 2003 was $2 million, $3 million, $5 million, $7 million, $8 million, $25 million, $105 million, $140 million, $203 million and $221 million, respectively. The Company does not record the recourse obligations as liabilities as they are contingent liabilities that are remote at this time. However, the probable loss on Receivables and Leases that have been sold was accrued at the time of sale, and any subsequent necessary adjustments are made as part of ongoing reviews. (7) Represents Receivables and Leases that the Company has sold but continues to administer for a fee. JDCC - Balance Sheet-5