Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Balance Sheet Classifications, Fair Value, Gross and Pro-Forma Net Amounts of Derivative Financial Instruments

The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments:

	September 30, 2015						December 31, 2014
	Assets			Liabilities			Assets			Liabilities
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	149.8					$	82.7
Deferred taxes and other liabilities				$	61.5					$	45.7
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		4.5						1.2
Accounts payable, accrued expenses and other											1.9
Total	$	154.3		$	61.5		$	83.9		$	47.6
Economic hedges:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	3.7					$	1.9
Accounts payable, accrued expenses and other				$	.3					$	.9
Financial Services:
Other assets		.7						3.4
Deferred taxes and other liabilities					.3
Total	$	4.4		$	.6		$	5.3		$	.9
Gross amounts recognized in Balance Sheet	$	158.7		$	62.1		$	89.2		$	48.5
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(.3	)		(.3	)		(.9	)		(.9	)
Financial Services:
Foreign-exchange contracts		(.1	)		(.1	)
Interest-rate contracts		(3.7	)		(3.7	)		(3.9	)		(3.9	)
Pro forma net amount	$	154.6		$	58.0		$	84.4		$	43.7

Cash Flow Hedging

Gains/Losses of Derivative Financial Instruments

The following table presents the pre-tax effects of derivative instruments recognized in OCI:

	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Interest- Rate Contracts		Foreign- Exchange Contracts		Interest- Rate Contracts			Foreign- Exchange Contracts
Gain recognized in OCI:
Truck, Parts and Other			$	8.5				$	5.5
Financial Services	$	26.9			$	38.7
Total	$	26.9	$	8.5	$	38.7		$	5.5
	Three Months Ended				Nine Months Ended
	September 30, 2014				September 30, 2014
	Interest-		Foreign-		Interest-			Foreign-
	Rate		Exchange		Rate			Exchange
	Contracts		Contracts		Contracts			Contracts
Gain (loss) recognized in OCI:
Truck, Parts and Other			$	2.5				$	(.3	)
Financial Services	$	28.7			$	(1.6	)
Total	$	28.7	$	2.5	$	(1.6	)	$	(.3	)

Expense (income) reclassified out of AOCI into the Consolidated Statements of Comprehensive Income as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2015						September 30, 2015
	Interest-			Foreign-			Interest-			Foreign-
	Rate			Exchange			Rate			Exchange
	Contracts			Contracts			Contracts			Contracts
Truck, Parts and Other:
Net sales and revenues				$	(.3	)
Cost of sales and revenues					(.6	)				$	2.8
Interest and other expense, net					(1.5	)					(3.2	)
Financial Services:
Interest and other borrowing expenses	$	(29.3	)				$	(37.1	)
Total	$	(29.3	)	$	(2.4	)	$	(37.1	)	$	(.4	)
	Three Months Ended						Nine Months Ended
	September 30, 2014						September 30, 2014
	Interest-			Foreign-			Interest-			Foreign-
	Rate			Exchange			Rate			Exchange
	Contracts			Contracts			Contracts			Contracts
Truck, Parts and Other:
Cost of sales and revenues				$	(.1	)				$	1.7
Interest and other expense, net											.1
Financial Services:
Interest and other borrowing expenses	$	(23.6	)				$	8.0
Total	$	(23.6	)	$	(.1	)	$	8.0		$	1.8

Economic Hedges

Gains/Losses of Derivative Financial Instruments

The expense (income) recognized in earnings related to economic hedges is as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2015						September 30, 2015
	Interest-			Foreign-			Interest-	Foreign-
	Rate			Exchange			Rate	Exchange
	Contracts			Contracts			Contracts	Contracts
Truck, Parts and Other:
Cost of sales and revenues				$	(.8	)		$	.6
Interest and other expense, net					(4.9	)			(4.1	)
Financial Services:
Interest and other borrowing expenses					(.3	)			(7.8	)
Selling, general and administrative					(.7	)			(1.4	)
Total				$	(6.7	)		$	(12.7	)
	Three Months Ended						Nine Months Ended
	September 30, 2014						September 30, 2014
	Interest-			Foreign-			Interest-	Foreign-
	Rate			Exchange			Rate	Exchange
	Contracts			Contracts			Contracts	Contracts
Truck, Parts and Other:
Cost of sales and revenues				$	(3.8	)		$	(4.0	)
Interest and other expense, net					1.9				2.2
Financial Services:
Interest and other borrowing expenses	$	(.3	)		(7.8	)			(3.1	)
Total	$	(.3	)	$	(9.7	)		$	(4.9	)

Financial Services | Fair Value Hedging

Gains/Losses of Derivative Financial Instruments

The (income) or expense recognized in earnings related to fair value hedges was included in interest and other borrowing expenses in the Financial Services segment of the Consolidated Statements of Comprehensive Income as follows:

	Three Months Ended September 30						Nine Months Ended September 30
	2015			2014			2015			2014
Interest-rate swaps	$	(4.2	)	$	.6		$	(5.3	)	$	.1
Term notes		4.0			(1.0	)		4.6			(2.2	)