Stockholders' Equity

6 Months Ended

Jun. 30, 2013

Stockholders' Equity

NOTE F – Stockholders’ Equity

Comprehensive Income

The components of comprehensive income were as follows:

	Three Months Ended			Six Months Ended
	June 30, 2013			June 30, 2013
Net income	$	291.6		$	527.7
Other comprehensive income (OCI):
Unrealized gains on derivative contracts		10.1			13.3
Tax effect		(3.0	)		(4.1	)
		7.1			9.2
Unrealized losses on marketable debt securities		(5.5	)		(5.8	)
Tax effect		1.5			1.6
		(4.0	)		(4.2	)
Employee benefit plans		13.0			34.3
Tax effect		(4.4	)		(11.1	)
		8.6			23.2
Currency translation losses		(82.6	)		(178.6	)
Net other comprehensive loss		(70.9	)		(150.4	)
Comprehensive income	$	220.7		$	377.3

	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012
Net income	$	297.2		$	624.5
Other comprehensive income (OCI):
Unrealized losses on derivative contracts		(4.8	)		(6.2	)
Tax effect		1.3			1.7
		(3.5	)		(4.5	)
Unrealized gains on marketable debt securities		2.2			2.7
Tax effect		(.6	)		(.8	)
		1.6			1.9
Employee benefit plans		12.7			19.1
Tax effect		(4.2	)		(6.1	)
		8.5			13.0
Currency translation losses		(118.6	)		(27.3	)
Net other comprehensive loss		(112.0	)		(16.9	)
Comprehensive income	$	185.2		$	607.6

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss (AOCI) as of June 30, 2013 and December 31, 2012 and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets, consisted of the following:

	Gains and (Losses) on Derivative Contracts			Unrealized Gains and (Losses) on Marketable Debt Securities			Defined Benefit Pension Plans			Foreign Currency Translation			Total
Balance at December 31, 2012	$	(27.2	)	$	6.6		$	(496.5	)	$	357.6		$	(159.5	)
Amounts recorded in AOCI		54.1			(4.2	)		8.5			(176.6	)		(118.2	)
Amounts reclassified out of AOCI		(44.9	)					14.7			(2.0	)		(32.2	)
Net other comprehensive income (loss)		9.2			(4.2	)		23.2			(178.6	)		(150.4	)
Balance at June 30, 2013	$	(18.0	)	$	2.4		$	(473.3	)	$	179.0		$	(309.9	)

Reclassifications out of AOCI during the six months ended June 30, 2013 are as follows:

AOCI Components	Line Item in the Consolidated Statement of Comprehensive Income	Amount Reclassified Out of AOCI**
Gains and losses on cash flow hedges:
Truck, Parts and Other
Foreign-exchange contracts	Cost of sales and revenues	$	(2.3	)
	Interest and other (income) expense, net		.3
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		(61.9	)
	Pre-tax expense reduction		(63.9	)
	Tax expense		19.0
	After-tax expense reduction		(44.9	)
Defined benefit pension plans:
Truck, Parts and Other
Prior service costs	Cost of sales and revenues		.6
Actuarial loss	Cost of sales and revenues $11.5, SG&A $9.6, R&D $.1		21.2
Financial Services
Actuarial loss	SG&A		.8
	Pre-tax expense		22.6
	Tax benefit		(7.9	)
	After-tax expense		14.7
Foreign Currency Translation:
Truck, Parts and Other	Interest and other (income) expense, net		(1.1	)
Financial Services	Interest and other borrowing expenses		(.9	)
	Expense reduction		(2.0	)
Total reclassifications out of AOCI		$	(32.2	)

** Amounts in parentheses indicate reductions in expenses, and amounts without parenthesis indicate expenses.

Stock Compensation Plans

Stock-based compensation expense was $2.7 and $8.5 for the three and six months ended June 30, 2013, respectively, and $2.5 and $8.4 for the three and six months ended June 30, 2012, respectively. Realized tax benefits related to the excess of deductible amounts over expense recognized amounted to $1.0 and $1.6 for the three and six months ended June 30, 2013, respectively, and nil and $.8 for the three and six months ended June 30, 2012, respectively, and have been classified as a financing cash flow.

During the first half of 2013, the Company issued 627,691 common shares under deferred and stock compensation arrangements.