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, 2004

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, 2004, 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 20 Pages
Index to Exhibits: Page 16

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, 2004 and 2003
(Unaudited)
(in millions)

2004

2003

Revenues

Finance income earned on retail notes

$

97.1

$

97.8

Lease revenues

69.7

90.9

Revolving charge account income

36.0

31.8

Finance income earned on wholesale receivables

51.3

52.0

Operating loan income

6.0

7.2

Securitization and servicing fee income

12.7

14.3

Net gain on receivables and leases sold

14.1

6.4

Interest income from short-term investments

5.7

3.2

Other income

6.6

6.0

     Total revenues

299.2

309.6

Expenses

Interest expense

81.7

86.7

Operating expenses:

Administrative and operating expenses

51.8

47.5

Provision for credit losses

7.6

12.9

Fees paid to John Deere

7.3

8.1

Depreciation of equipment on operating leases

44.8

58.5

     Total operating expenses

111.5

127.0

     Total expenses

193.2

213.7

Income of consolidated group before income taxes

106.0

95.9

Provision for income taxes

36.9

33.7

Income of consolidated group

69.1

62.2

Equity in income of unconsolidated affiliates

0.2

0.1

Net income

69.3

62.3

Cash dividends declared

( 65.0

)

Retained earnings at beginning of period

1,119.4

1,043.9

Retained earnings at end of period

$

1,123.7

$

1,106.2

John Deere Capital Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in millions)

January 31, 2004

October 31,
2003

January 31,
2003

Assets

Cash and cash equivalents

$

583.2

$

342.5

$

335.7

Receivables:

Retail notes

5,839.8

6,109.7

5,423.8

Revolving charge accounts

944.2

1,117.4

750.2

Operating loans

510.1

541.4

574.7

Wholesale receivables

3,042.8

2,904.6

3,268.3

Financing leases

408.0

427.3

450.6

Total receivables

10,744.9

11,100.4

10,467.6

Allowance for credit losses

(121.4

)

(123.8

)

(122.4

)

Total receivables - net

10,623.5

10,976.6

10,345.2

Notes receivable - unconsolidated affiliates

274.3

267.7

Notes receivable - John Deere

23.4

Other receivables

154.2

142.9

115.5

Equipment on operating leases - net

802.3

879.2

1,077.9

Investments in unconsolidated affiliates

3.4

3.0

2.5

Other assets

341.5

337.1

419.7

Total Assets

$

12,508.1

$

12,955.6

$

12,587.6

Liabilities and Stockholder's Equity

Short-term borrowings:

Commercial paper

$

1,237.7

$

1,691.8

$

1,387.1

Other notes payable

51.8

66.4

37.7

John Deere

369.5

166.0

Current maturities of long-term borrowings

1,111.7

1,592.2

1,779.1

Total short-term borrowings

2,770.7

3,516.4

3,203.9

Accounts payable and accrued liabilities:

Accrued interest on debt

92.0

65.1

91.0

Other payables

335.4

374.2

426.9

Total accounts payable and accrued liabilities

427.4

439.3

517.9

Deposits withheld from dealers and merchants

161.4

159.5

138.8

Long-term borrowings:

Senior debt

7,045.6

6,757.4

6,699.3

Subordinated debt

150.0

150.0

150.0

     Total long-term borrowings

7,195.6

6,907.4

6,849.3

     Total liabilities

10,555.1

11,022.6

10,709.9

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

1,123.7

1,119.4

1,106.2

Cumulative translation adjustment

22.8

13.5

1.5

Unrealized loss on derivatives

(17.7

)

(19.3

)

(47.1

)

Unrealized gain on investments

11.4

6.6

4.3

     Total accumulated other comprehensive income (loss)

16.5

.8

(41.3

)

     Total stockholder's equity

1,953.0

1,933.0

1,877.7

Total Liabilities and Stockholder's Equity

$

12,508.1

$

12,955.6

$

12,587.6

See Notes to Interim Financial Statements.

John Deere Capital Corporation and Subsidiaries
Condensed Statements of Consolidated Cash Flows
For the Three Months Ended January 31, 2004 and 2003
(Unaudited)
(in millions)

2004

2003

Cash Flows from Operating Activities:

   Net income

$

69.3

$

62.3

   Adjustments to reconcile net income to net cash

          provided by operating activities

53.3

37.1

          Net cash provided by operating activities

122.6

99.4

Cash Flows from Investing Activities:

   Cost of receivables acquired

(4,843.3

)

(3,911.2

)

   Collections of receivables

4,606.9

3,395.2

   Cost of operating leases acquired

(50.2

)

(41.4

)

   Proceeds from sales of equipment on operating leases

93.7

90.6

   Change in notes receivable - unconsolidated affiliates

274.3