John Deere 2009 Annual Report Download - page 41

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2009 2008
Accrued expenses:
Unearned revenue .................................................... $ 280 $ 289
Accrued interest ....................................................... 204 150
Employee benefi ts .................................................... 51 81
Accrued income taxes .............................................. 55 29
Other ....................................................................... 231 197
______ ______
Total .................................................................... 1,263 1,165
______ ______
Eliminations* ................................................................ 506 447
______ ______
Accounts payable and accrued expenses ............... $ 5,371 $ 6,39 4
______ ______
______ ______
* Primarily trade receivable valuation accounts which are reclassifi ed as accrued
expenses by the Equipment Operations as a result of their trade receivables being
sold to Financial Services.
20. LONG-TERM BORROWINGS
Long-term borrowings at October 31 consisted of the following
in millions of dollars:
2009 2008
Equipment Operations**
Notes and debentures:
7.85% debentures due 2010 ................................. $ 306
6.95% notes due 2014: ($700 principal)
Swapped $300 to variable interest rates of
1.25% – 2009 and $700 to 4.5% – 2008 ......... $ 800* 770*
4.375% notes due 2019 ........................................ 750
8.95% debentures due 2019 ................................. 56
8-1/2% debentures due 2022 ............................... 105 105
6.55% debentures due 2028 ................................. 200 200
5.375% notes due 2029 ....................................... 500
8.10% debentures due 2030 ................................. 250 250
7.125% notes due 2031 ........................................ 300 300
Other notes ........................................................... 168 5
Total ................................................................. 3,073 1,992
Financial Services**
Notes and debentures:
Medium-term notes due 2010 – 2018:
(principal $11,186 - 2009, $9,189 - 2008)
Average interest rates of 3.5% – 2009,
4.7% – 2008 .................................................... 11,430* 9,267*
7% notes due 2012: ($1,500 principal)
Swapped $1,225 to variable interest rates of
1.3% – 2009, 2.8% – 2008 ............................. 1,640* 1,618*
5.10% debentures due 2013: ($650 principal)
Swapped to variable interest rates of
1.0% – 2009, 4.8% – 2008 ............................. 699* 668*
Other notes ........................................................... 550 354
Total ................................................................. 14,319 11,907
Long-term borrowings ........................................... $ 17,392 $ 13,899
* Includes fair value adjustments related to interest rate swaps.
** All interest rates are as of year end.
The Financial Services’ long-term borrowings represent
obligations of the credit subsidiaries.
The approximate principal amounts of the Equipment
Operations’ long-term borrowings maturing in each of the
next fi ve years in millions of dollars are as follows: 2010 – $312,
2011 – none, 2012 – $173, 2013 – none and 2014 – $700.
quarter according to accounting principles generally accepted in
the U.S. in effect at October 31, 2006. Under this provision, the
company’s excess equity capacity and retained earnings balance
free of restriction at October 31, 2009 was $6,494 million.
Alternatively under this provision, the Equipment Operations
had the capacity to incur additional debt of $12,060 million
at October 31, 2009. All of these requirements of the credit
agreement have been met during the periods included in the
fi nancial statements.
Deere & Company has an agreement with the Capital
Corporation pursuant to which it has agreed to continue to
own at least 51 percent of the voting shares of capital stock
of Capital Corporation and to maintain Capital Corporation’s
consolidated tangible net worth at not less than $50 million.
This agreement also obligates Deere & Company to make
income maintenance payments to Capital Corporation such
that its consolidated ratio of earnings to fi xed charges is not less
than 1.05 to 1 for each fi scal quarter. Deere & Company’s
obligations to make payments to Capital Corporation under the
agreement are independent of whether Capital Corporation is
in default on its indebtedness, obligations or other liabilities.
Further, Deere & Company’s obligations under the agreement
are not measured by the amount of Capital Corporation’s
indebtedness, obligations or other liabilities. Deere & Company’s
obligations to make payments under this agreement are expressly
stated not to be a guaranty of any specifi c indebtedness,
obligation or liability of Capital Corporation and are enforceable
only by or in the name of Capital Corporation. No payments
were required under this agreement during the periods included
in the fi nancial statements.
19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses at October 31 consisted
of the following in millions of dollars:
2009 2008
Equipment Operations
Accounts payable:
Trade payables ......................................................... $ 1,093 $ 1,773
Dividends payable .................................................... 118 118
Other ....................................................................... 131 108
Accrued expenses:
Employee benefi ts .................................................... 861 1,175
Product warranties ................................................... 513 586
Dealer sales discounts .............................................. 774 711
Accrued income taxes .............................................. 5 79
Other ....................................................................... 1,119 1,126
______ ______
Total .................................................................... 4,614 5,676
______ ______
Financial Services
Accounts payable:
Deposits withheld from dealers and merchants .......... $ 181 $ 189
Other ....................................................................... 261 230
(continued)