John Deere 2013 Annual Report Download - page 48

The components of other intangible assets are as follows
in millions of dollars:
Useful Lives*
(Years) 2013 2012
Amortized intangible assets:
Customer lists and relationships ........... 15 $ 20 $ 99
Technology, patents, trademarks
and other ........................................ 18 88 109
Total at cost .................................... 108 208
Less accumulated amortization** ......... 35 107
Total ............................................... 73 101
Unamortized intangible assets:
Licenses ............................................. 4 4
Other intangible assets-net ................ $ 77 $ 105
* Weighted-averages
** Accumulated amortization at 2013 and 2012 for customer lists and relationships
was $8 million and $60 million and technology, patents, trademarks and other was
$27 million and $47 million, respectively.
Other intangible assets are stated at cost less accumulated
amortization. The amortization of other intangible assets in
2013, 2012 and 2011 was $22 million, $21 million and
$20 million, respectively. The estimated amortization expense
for the next five years is as follows in millions of dollars:
2014 - $12, 2015 - $11, 2016 - $10, 2017 – $10 and 2018 - $6.
18. TOTAL SHORT-TERM BORROWINGS
Total short-term borrowings at October 31 consisted of the
following in millions of dollars:
2013 2012
Equipment Operations
Commercial paper ....................................................... $ 146
Notes payable to banks ................................................ $ 259 84
Long-term borrowings due within one year ................... 821 195
Total ....................................................................... 1,080 425
Financial Services
Commercial paper ....................................................... 3,162 1,061
Notes payable to banks ................................................ 139 117
Long-term borrowings due within one year ................... 4,408* 4,790*
Total ....................................................................... 7,70 9 5,968
Short-term borrowings ............................................ 8,789 6,393
Financial Services
Short-term securitization borrowings ............................ 4,109 3,575
Total short-term borrowings ................................... $ 12,898 $ 9,968
* Includes unamortized fair value adjustments related to interest rate swaps.
The short-term securitization borrowings for financial
services are secured by financing receivables (retail notes) on
the balance sheet (see Note 13). Although these securitization
borrowings are classified as short-term since payment is required
if the retail notes are liquidated early, the payment schedule for
these borrowings of $4,109 million at October 31, 2013 based
on the expected liquidation of the retail notes in millions of
dollars is as follows: 2014 - $2,162, 2015 - $1,177, 2016 - $577,
2017 - $166, 2018 - $25 and 2019 - $2.
The weighted-average interest rates on total short-term
borrowings, excluding current maturities of long-term
borrowings, at October 31, 2013 and 2012 were .8 percent
and 1.0 percent, respectively.
Lines of credit available from U.S. and foreign banks were
$6,498 million at October 31, 2013. At October 31, 2013,
$2,939 million of these worldwide lines of credit were unused.
For the purpose of computing the unused credit lines, com-
mercial paper and short-term bank borrowings, excluding
secured borrowings and the current portion of long-term
borrowings, were primarily considered to constitute utilization.
Included in the above lines of credit were long-term credit
facility agreements for $2,500 million, expiring in April 2017,
and $2,500 million, expiring in April 2018. The agreements are
mutually extendable and the annual facility fees are not signifi-
cant. These credit agreements require Capital Corporation to
maintain its consolidated ratio of earnings to fixed charges at
not less than 1.05 to 1 for each fiscal quarter and the ratio of
senior debt, excluding securitization indebtedness, to capital
base (total subordinated debt and stockholder’s equity excluding
accumulated other comprehensive income (loss)) at not more
than 11 to 1 at the end of any fiscal quarter. The credit agree-
ments also require the equipment operations to maintain a ratio
of total debt to total capital (total debt and stockholders’ equity
excluding accumulated other comprehensive income (loss)) of
65 percent or less at the end of each fiscal quarter. Under this
provision, the company’s excess equity capacity and retained
earnings balance free of restriction at October 31, 2013 was
$9,756 million. Alternatively under this provision, the equip-
ment operations had the capacity to incur additional debt of
$18,119 million at October 31, 2013. All of these requirements
of the credit agreements have been met during the periods
included in the consolidated financial statements.
Deere & Company has an agreement with Capital
Corporation pursuant to which it has agreed to continue to own,
directly or through one or more wholly-owned subsidiaries,
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 payments to Capital
Corporation such that its consolidated ratio of earnings to fixed
charges is not less than 1.05 to 1 for each fiscal 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 specific 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 consolidated
financial statements.
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