Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016						December 31, 2015
	Assets			Liabilities			Assets			Liabilities
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	82.7					$	132.2
Deferred taxes and other liabilities				$	64.2					$	46.7
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		10.0						3.9
Accounts payable, accrued expenses and other					.3						.2
Total	$	92.7		$	64.5		$	136.1		$	46.9
Economic hedges:
Interest-rate contracts:
Financial Services:
Deferred taxes and other liabilities				$	.1
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	.2					$	.9
Accounts payable, accrued expenses and other					.4					$	.3
Financial Services:
Other assets		4.8						.3
Deferred taxes and other liabilities					.7						1.0
Total	$	5.0		$	1.2		$	1.2		$	1.3
Gross amounts recognized in Balance Sheets	$	97.7		$	65.7		$	137.3		$	48.2
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(.5	)		(.5	)		(.4	)		(.4	)
Financial Services:
Interest-rate contracts		(7.8	)		(7.8	)		(3.3	)		(3.3	)
Foreign-exchange contracts								(.2	)		(.2	)
Pro forma net amount	$	89.4		$	57.4		$	133.4		$	44.3

Fair Value Hedging | Financial Services

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						Nine Months Ended
	September 30						September 30
	2016			2015			2016			2015
Interest-rate swaps	$	3.7		$	(4.2	)	$	(1.3	)	$	(5.3	)
Term notes		(3.8	)		4.0			.6			4.6

Economic Hedges

Gains/Losses of Derivative Financial Instruments

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

	Three Months Ended					Nine Months Ended
	September 30, 2016					September 30, 2016
	Interest-		Foreign-			Interest-		Foreign-
	Rate		Exchange			Rate		Exchange
	Contracts		Contracts			Contracts		Contracts
Truck, Parts and Other:
Net sales and revenues			$	(.4	)			$	(.4	)
Cost of sales and revenues				.3					1.4
Interest and other expense, net				(1.3	)				(.5	)
Financial Services:
Interest and other borrowing expenses	$	.1		(3.1	)	$	.1		(11.3	)
Selling, general and administrative				(.9	)				(2.5	)
Total	$	.1	$	(5.4	)	$	.1	$	(13.3	)
	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	)

Cash Flow Hedging

Gains/Losses of Derivative Financial Instruments

The following table presents the pre-tax effects of derivative instruments recognized in other comprehensive income (loss) (OCI):

	Three Months Ended					Nine Months Ended
	September 30 2016					September 30 2016
	Interest-			Foreign-		Interest-			Foreign-
	Rate			Exchange		Rate			Exchange
	Contracts			Contracts		Contracts			Contracts
Gain (loss) recognized in OCI:
Truck, Parts and Other				$	13.9				$	23.8
Financial Services	$	(25.6	)			$	(78.9	)
Total	$	(25.6	)	$	13.9	$	(78.9	)	$	23.8
	Three Months Ended					Nine Months Ended
	September 30 2015					September 30 2015
	Interest-			Foreign-		Interest-			Foreign-
	Rate			Exchange		Rate			Exchange
	Contracts			Contracts		Contracts			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

Expense (income) reclassified out of AOCI into income was as follows:

	Three Months Ended						Nine Months Ended
	September 30 2016						September 30 2016
	Interest-			Foreign-			Interest-			Foreign-
	Rate			Exchange			Rate			Exchange
	Contracts			Contracts			Contracts			Contracts
Truck, Parts and Other:
Net sales and revenues				$	(11.1	)				$	(17.6	)
Cost of sales and revenues											.6
Interest and other expense, net					(.3	)					1.6
Financial Services:
Interest and other borrowing expenses	$	28.2					$	78.5
Total	$	28.2		$	(11.4	)	$	78.5		$	(15.4	)
	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	)