UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2003

Commission file no: 1-6458

JOHN DEERE CAPITAL CORPORATION

Delaware
(State of incorporation)

36-2386361
(IRS employer identification no.)

1 East First Street, Suite 600
Reno, Nevada 89501
(Address of principal executive offices)

Telephone Number: (775) 786-5527

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

  x  

No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes

No

  x  

     At January 31, 2003, 2,500 shares of common stock, without par value, of the registrant were outstanding, all of which were owned by John Deere Credit Company, a wholly-owned subsidiary of Deere & Company.

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

Page 1 of 22 Pages
Index to Exhibits: Page 20

PART I.  FINANCIAL INFORMATION

Item 1.     Financial Statements.

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Income and Retained Earnings

For the Three Months Ended January 31, 2003 and 2002

(Unaudited)

(in millions)

2003

2002

Revenues

Finance income earned on retail notes

$

97.8

$

102.7

Lease revenues

90.9

110.1

Revolving charge account income

31.8

29.3

Finance income earned on wholesale receivables

52.0

50.6

Operating loan income

7.2

6.4

Securitization and servicing fee income

14.3

9.6

Net gain on receivables and leases sold

6.4

29.8

Interest income from short-term investments

3.2

2.8

Other income

6.0

7.6

     Total revenues

309.6

348.9

Expenses

Interest expense

86.7

97.6

Operating expenses:

Administrative and operating expenses

47.5

46.4

Provision for credit losses

12.9

20.3

Fees paid to John Deere

8.1

5.4

Depreciation of equipment on operating leases

58.5

67.2

     Total operating expenses

127.0

139.3

     Total expenses

213.7

236.9

Income of consolidated group before income taxes

95.9

112.0

Provision for income taxes

33.7

39.2

Income of consolidated group

62.2

72.8

Equity in income (loss) of unconsolidated affiliates

0.1

(0.9

)

Net income

62.3

71.9

Cash dividends declared

(140.0

)

Retained earnings at beginning of period

1,043.9

1,163.3

Retained earnings at end of period

$

1,106.2

$

1,095.2

See Notes to Interim Financial Statements.

John Deere Capital Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in millions)

January 31, 2003

October 31,
2002

January 31,
2002

Assets

Cash and cash equivalents

$

335.7

$

147.8

$

425.1

Receivables

Retail notes

5,423.8

5,311.7

4,323.2

Revolving charge accounts

750.2

896.0

678.7

Operating loans

574.7

561.2

472.8

Wholesale receivables

3,268.3

2,942.2

2,757.0

Financing leases

450.6

467.5

465.3

Total receivables

10,467.6

10,178.6

8,697.0

Allowance for credit losses

(122.4

)

(118.3

)

(101.1

)

Total receivables - net

10,345.2

10,060.3

8,595.9

Notes receivable - unconsolidated affiliates

267.7

259.9

297.2

Notes receivable - John Deere

23.4

320.2

Other receivables

115.5

96.9

140.5

Equipment on operating leases - net

1,077.9

1,180.0

1,382.3

Investment in unconsolidated affiliates

2.5

7.1

5.3

Other assets

419.7

350.4

206.4

Total Assets

$

12,587.6

$

12,102.4

$

11,372.9

Liabilities and Stockholder's Equity

Short-term borrowings:

Commercial paper

$

1,387.1

$

1,422.0

$

2,430.9

Other notes payable

37.7

37.5

27.6

John Deere

654.0

Current maturities of long-term borrowings

1,779.1

2,158.6

2,693.0

Total short-term borrowings

3,203.9

4,272.1

5,151.5

Accounts payable and accrued liabilities

Accrued interest on debt

91.0

52.3

54.2

Other payables

426.9

446.3

508.5

Total accounts payable and accrued liabilities

517.9

498.6

562.7

Deposits withheld from dealers and merchants

138.8

138.4

132.0

Long-term borrowings:

Senior debt

6,699.3

5,231.3

3,521.9

Subordinated debt

150.0

150.0

150.0

     Total long-term borrowings

6,849.3

5,381.3

3,671.9

     Total liabilities

10,709.9

10,290.4

9,518.1

Stockholder's equity:

Common stock, without par value (issued and outstanding - 2,500 shares    owned by John Deere Credit Company)

812.8

812.8

812.8

Retained earnings

1,106.2

1,043.9

1,095.2

Cumulative translation adjustment

1.5

(2.2

)

(8.2

)

Unrealized loss on derivatives

(47.1

)

(44.1

)

(46.6

)

Unrealized gain on investments

4.3

1.6

1.6

     Total accumulated other comprehensive income (loss)

(41.3

)

(44.7

)

(53.2

)

     Total stockholder's equity

1,877.7

1,812.0

1,854.8

Total Liabilities and Stockholder's Equity

$

12,587.6

$

12,102.4

$

11,372.9

See Notes to Interim Financial Statements.

John Deere Capital Corporation and Subsidiaries

Statements of Consolidated Cash Flows

For the Three Months Ended January 31, 2003 and 2002

(Unaudited)

(in millions)

2003

2002

Cash Flows from Operating Activities:

   Net income

$

62.3

$

71.9

     Adjustments to reconcile net income to net cash

          provided by operating activities:

        Provision for credit losses

12.9

20.3

        Provision for depreciation and amortization

59.9

68.6

      Provision for deferred income taxes

(0.4

)

1.3

        Undistributed earnings of unconsolidated affiliates

(0.1

)

0.9

        Other

(35.2

)

(116.5

)

          Net cash provided by operating activities

99.4

46.5

Cash Flows from Investing Activities:

   Cost of receivables acquired

(3,911.2

)

(3,158.5

)

   Collections of receivables

3,395.2

3,086.6

   Cost of operating leases acquired

(41.4

)

(67.9

)

   Proceeds from sales of equipment on operating leases