Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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:

	March 31, 2019						December 31, 2018
	ASSETS			LIABILITIES			ASSETS			LIABILITIES
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	62.8					$	84.5
Deferred taxes and other liabilities				$	17.3					$	18.5
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		3.6						8.9
Accounts payable, accrued expenses and other					7.5						4.2
	$	66.4		$	24.8		$	93.4		$	22.7
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	$	.7					$	.4
Accounts payable, accrued expenses and other				$	1.4					$	.9
Financial Services:
Other assets		.9						.9
Deferred taxes and other liabilities					.3						1.0
	$	1.6		$	1.7		$	1.3		$	1.9
Gross amounts recognized in Balance Sheets	$	68.0		$	26.5		$	94.7		$	24.6
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(1.8	)		(1.8	)		(.9	)		(.9	)
Financial Services:
Interest-rate contracts		(7.6	)		(7.6	)		(3.9	)		(3.9	)
Pro forma net amount	$	58.6		$	17.1		$	89.9		$	19.8

The following table presents the amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

	March 31		December 31
	2019		2018
Financial Services
Term notes:
Carrying amount of the hedged liabilities	$	89.5	$	188.7
Cumulative basis adjustment included in the carrying amount		.5		(1.3	)

The following table presents the location and amount of (income) expense on fair value hedges recognized in the Consolidated Statements of Comprehensive Income. The (gain) loss on fair value hedges for foreign-exchange contracts was nil for the three months ended March 31, 2019 and 2018. The amounts related to interest-rate contracts were as follows:

Three Months Ended March 31,	2019			2018
Financial Services:
Interest and other borrowing expenses:
Derivatives	$	(.8	)	$	.8
Hedged term notes		1.4			(.4	)
	$	.6		$	.4

Foreign Currency And Interest Rate Contract

Gains/Losses of Derivative Financial Instruments

The expense (income) recognized in earnings related to derivatives not designated as hedging instruments was as follows:

Three Months Ended March 31,	2019				2018
	INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	.2			$	1.2
Interest and other (income), net			1.5				3.4
Financial Services:
Interest and other borrowing expenses			(6.2	)			.5
Selling, general and administrative							1.2
Total		$	(4.5	)		$	6.3

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 March 31,	2019						2018
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS
Loss recognized in OCI:
Truck, Parts and Other				$	(16.0	)				$	(4.4	)
Financial Services	$	(14.3	)				$	(11.5	)
	$	(14.3	)	$	(16.0	)	$	(11.5	)	$	(4.4	)

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

Three Months Ended March 31,	2019					2018
	INTEREST-		FOREIGN-			INTEREST-		FOREIGN-
	RATE		EXCHANGE			RATE		EXCHANGE
	CONTRACTS		CONTRACTS			CONTRACTS		CONTRACTS
Truck, Parts and Other:
Net sales and revenues			$	9.4				$	4.6
Cost of sales and revenues				(2.1	)				(1.1	)
Interest and other (income), net				.5					(1.0	)
Financial Services:
Interest and other borrowing expenses	$	6.7				$	9.3
	$	6.7	$	7.8		$	9.3	$	2.5