NOTE F - Stockholders’ Equity

Comprehensive Income

The components of comprehensive income are as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
		2017			2016			2017			2016
Net income	$	402.7		$	346.2		$	1,086.0		$	232.9
Other comprehensive income (loss) (OCI):
Unrealized gains (losses) on derivative contracts		1.9			5.1			(.1	)		8.0
Tax effect		(.7	)		(2.2	)		.2			(2.7	)
		1.2			2.9			.1			5.3
Unrealized (losses) gains on marketable debt securities		(.4	)		(3.7	)		2.5			2.1
Tax effect		.1			1.2			(1.1	)		(.6	)
		(.3	)		(2.5	)		1.4			1.5
Pension plans		.6			10.3			3.1			32.7
Tax effect		(.6	)		(3.4	)		(1.9	)		(10.6	)
					6.9			1.2			22.1
Foreign currency translation gains (losses)		108.1			(6.9	)		309.2			61.4
Net other comprehensive income		109.0			.4			311.9			90.3
Comprehensive income	$	511.7		$	346.6		$	1,397.9		$	323.2

Accumulated Other Comprehensive Income (Loss)

The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets consisted of the following:

Three Months Ended September 30, 2017	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at July 1, 2017	$	(5.4	)	$	1.4		$	(412.9	)	$	(508.3	)	$	(925.2	)
Recorded into AOCI		(19.8	)		(.2	)		(4.5	)		108.1			83.6
Reclassified out of AOCI		21.0			(.1	)		4.5						25.4
Net other comprehensive income (loss)		1.2			(.3	)					108.1			109.0
Balance at September 30, 2017	$	(4.2	)	$	1.1		$	(412.9	)	$	(400.2	)	$	(816.2	)

Three Months Ended September 30, 2016	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at July 1, 2016	$	(4.0	)	$	6.1		$	(375.2	)	$	(554.0	)	$	(927.1	)
Recorded into AOCI		(7.9	)		(.7	)		2.1			(6.9	)		(13.4	)
Reclassified out of AOCI		10.8			(1.8	)		4.8						13.8
Net other comprehensive income (loss)		2.9			(2.5	)		6.9			(6.9	)		.4
Balance at September 30, 2016	$	(1.1	)	$	3.6		$	(368.3	)	$	(560.9	)	$	(926.7	)

Nine Months Ended September 30, 2017	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2017	$	(4.3	)	$	(.3	)	$	(414.1	)	$	(709.4	)	$	(1,128.1	)
Recorded into AOCI		(93.9	)		1.8			(12.3	)		309.2			204.8
Reclassified out of AOCI		94.0			(.4	)		13.5						107.1
Net other comprehensive income		.1			1.4			1.2			309.2			311.9
Balance at September 30, 2017	$	(4.2	)	$	1.1		$	(412.9	)	$	(400.2	)	$	(816.2	)

Nine Months Ended September 30, 2016	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2016	$	(6.4	)	$	2.1		$	(390.4	)	$	(622.3	)	$	(1,017.0	)
Recorded into AOCI		(33.9	)		4.1			7.8			61.4			39.4
Reclassified out of AOCI		39.2			(2.6	)		14.3						50.9
Net other comprehensive income		5.3			1.5			22.1			61.4			90.3
Balance at September 30, 2016	$	(1.1	)	$	3.6		$	(368.3	)	$	(560.9	)	$	(926.7	)

Reclassifications out of AOCI during the three months ended September 30, 2017 and 2016 are as follows:

		Three Months Ended
	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF	September 30
AOCI COMPONENTS	COMPREHENSIVE INCOME (LOSS)		2017			2016
Unrealized (gains) and losses on derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	(3.0	)	$	(11.1	)
	Cost of sales and revenues		5.5
	Interest and other expense, net		1.0			(.3	)
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		24.6			28.2
	Pre-tax expense increase		28.1			16.8
	Tax benefit		(7.1	)		(6.0	)
	After-tax expense increase		21.0			10.8
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(.2	)		(2.4	)
	Tax expense		.1			.6
	After-tax income increase		(.1	)		(1.8	)
Pension plans:
Truck, Parts and Other
Actuarial loss	Cost of sales and revenues		3.1			3.4
	Selling, general and administrative		3.0			3.2
			6.1			6.6
Prior service costs	Cost of sales and revenues		.2			.2
	Selling, general and administrative		.1			.1
			.3			.3
Financial Services
Actuarial loss	Selling, general and administrative		.2			.3
	Pre-tax expense increase		6.6			7.2
	Tax benefit		(2.1	)		(2.4	)
	After-tax expense increase		4.5			4.8
Total reclassifications out of AOCI		$	25.4		$	13.8

Reclassifications out of AOCI during the nine months ended September 30, 2017 and 2016 are as follows:

		Nine Months Ended
	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF	September 30
AOCI COMPONENTS	COMPREHENSIVE INCOME (LOSS)		2017			2016
Unrealized losses and (gains) on derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	13.3		$	(17.6	)
	Cost of sales and revenues		4.3			.6
	Interest and other expense, net		1.6			1.6
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		110.4			78.5
	Pre-tax expense increase		129.6			63.1
	Tax benefit		(35.6	)		(23.9	)
	After-tax expense increase		94.0			39.2
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(.6	)		(3.5	)
	Tax expense		.2			.9
	After-tax income increase		(.4	)		(2.6	)
Pension plans:
Truck, Parts and Other
Actuarial loss	Cost of sales and revenues		9.2			10.3
	Selling, general and administrative		9.1			9.7
			18.3			20.0
Prior service costs	Cost of sales and revenues		.7			.7
	Selling, general and administrative		.2			.2
			.9			.9
Financial Services
Actuarial loss	Selling, general and administrative		.6			.8
	Pre-tax expense increase		19.8			21.7
	Tax benefit		(6.3	)		(7.4	)
	After-tax expense increase		13.5			14.3
Total reclassifications out of AOCI		$	107.1		$	50.9

Stock Compensation Plans

Stock-based compensation expense was $1.9 and $10.9 for the three and nine months ended September 30, 2017, respectively, and $2.0 and $11.1 for the three and nine months ended September 30, 2016, respectively. Realized tax benefits related to the excess of deductible amounts over expense recognized was nil for the three and nine months ended September 30, 2017 and $.1 and $.3 for the three and nine months ended September 30, 2016, respectively.

During the first nine months of 2017, the Company issued 777,808 common shares under deferred and stock compensation arrangements.