Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

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, 2018						December 31, 2017
	ASSETS			LIABILITIES			ASSETS			LIABILITIES

Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	58.9					$	53.3
Deferred taxes and other liabilities				$	28.6					$	98.3
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		2.1						3.8
Accounts payable, accrued expenses and other					4.5						1.9
	$	61.0		$	33.1		$	57.1		$	100.2
Derivatives not designated as hedging instruments:
Interest-rate contracts:
Financial Services:
Deferred taxes and other liabilities
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	.5					$	.6
Accounts payable, accrued expenses and other				$	.2					$	.6
Financial Services:
Other assets		.3						.1
Deferred taxes and other liabilities					1.2						2.2
	$	.8		$	1.4		$	.7		$	2.8
Gross amounts recognized in Balance Sheets	$	61.8		$	34.5		$	57.8		$	103.0
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(1.4	)		(1.4	)		(.4	)		(.4	)
Financial Services:
Interest-rate contracts		(4.8	)		(4.8	)		(8.7	)		(8.7	)
Pro forma net amount	$	55.6		$	28.3		$	48.7		$	93.9

As of September 30, 2018, the following amounts were recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

			Cumulative Basis
	Carrying Amount of		Amount Included in
Hedged Balance Sheet Line Item	the Hedged Liabilities		the Carrying Amount
Medium-term notes	$	230.3	$	(4.7	)

Foreign Currency And Interest Rate Contract

Gains/Losses of Derivative Financial Instruments

For the three and nine months ended September 30, 2018 and 2017 the (income) expense recognized in earnings related to derivatives not designated as hedging instruments was as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2018				September 30, 2018
	INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	(1.1	)		$	.1
Interest and other (income), net			(.3	)			3.4
Financial Services:
Interest and other borrowing expenses			(.5	)			(8.9	)
Selling, general and administrative			1.1				1.6
Total		$	(.8	)		$	(3.8	)

	Three Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2017
	INTEREST-	FOREIGN-			INTEREST-			FOREIGN-
	RATE	EXCHANGE			RATE			EXCHANGE
	CONTRACTS	CONTRACTS			CONTRACTS			CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	.6					$	1.3
Interest and other (income), net			(1.0	)					3.2
Financial Services:
Interest and other borrowing expenses			4.8		$	(.1	)		43.4
Selling, general and administrative									.8
Total		$	4.4		$	(.1	)	$	48.7

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, 2018					September 30, 2018
	INTEREST-		FOREIGN-			INTEREST-		FOREIGN-
	RATE		EXCHANGE			RATE		EXCHANGE
	CONTRACTS		CONTRACTS			CONTRACTS		CONTRACTS
Gain (loss) recognized in OCI:
Truck, Parts and Other			$	(11.3	)			$	(4.9	)
Financial Services	$	2.9				$	84.5
	$	2.9	$	(11.3	)	$	84.5	$	(4.9	)

	Three Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2017
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS
Loss recognized in OCI:
Truck, Parts and Other				$	(3.0	)				$	(23.4	)
Financial Services	$	(23.2	)				$	(106.3	)
	$	(23.2	)	$	(3.0	)	$	(106.3	)	$	(23.4	)

The following table presents the location and amount of expense (income) on fair value hedges recognized in the Consolidated Statements of Comprehensive Income. The loss (gain) on fair value hedges for foreign-exchange contracts was nil for the three and nine months ended September 30, 2018 and 2017. The amounts related to interest-rate contracts were as follows:

	Three Months Ended					Nine Months Ended
	September 30					September 30
	2018		2017			2018		2017
Financial Services:
Interest and other borrowing expenses:
Derivatives			$	.4		$	1.1	$	1.0
Hedged term notes	$	.4		(.2	)		.2		(.6	)
	$	.4	$	.2		$	1.3	$	.4

The following presents the amount of (gain) loss from cash flow hedges reclassified from AOCI into income:

	Three Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2018
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS
Truck, Parts and Other:
Net sales and revenues				$	4.3					$	6.1
Cost of sales and revenues					(1.6	)					(5.2	)
Interest and other (income), net					.5						(.2	)
Financial Services:
Interest and other borrowing expenses	$	(3.7	)				$	(86.5	)
	$	(3.7	)	$	3.2		$	(86.5	)	$	.7

	Three Months Ended					Nine Months Ended
	September 30, 2017					September 30, 2017
	INTEREST-		FOREIGN-			INTEREST-		FOREIGN-
	RATE		EXCHANGE			RATE		EXCHANGE
	CONTRACTS		CONTRACTS			CONTRACTS		CONTRACTS
Truck, Parts and Other:
Net sales and revenues			$	(3.0	)			$	13.3
Cost of sales and revenues				5.5					4.3
Interest and other (income), net				1.0					1.6
Financial Services:
Interest and other borrowing expenses	$	24.6				$	110.4
	$	24.6	$	3.5		$	110.4	$	19.2