Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 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:

	June 30, 2019						December 31, 2018
	ASSETS			LIABILITIES			ASSETS			LIABILITIES

Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	64.3					$	84.5
Deferred taxes and other liabilities				$	27.7					$	18.5
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		4.7						8.9
Accounts payable, accrued expenses and other					3.4						4.2
	$	69.0		$	31.1		$	93.4		$	22.7
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	.5					$	.4
Accounts payable, accrued expenses and other				$	2.1					$	.9
Financial Services:
Other assets								.9
Deferred taxes and other liabilities					.9						1.0
	$	.5		$	3.0		$	1.3		$	1.9
Gross amounts recognized in Balance Sheets	$	69.5		$	34.1		$	94.7		$	24.6
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(1.0	)		(1.0	)		(.9	)		(.9	)
Financial Services:
Interest-rate contracts		(8.1	)		(8.1	)		(3.9	)		(3.9	)
Pro forma net amount	$	60.4		$	25.0		$	89.9		$	19.8

Amount of Expense (Income) from Derivative Financial Instruments Recognized in Consolidated Statements of Comprehensive Income

The following table presents the amount of expense (income) from derivative financial instruments recognized in the Consolidated Statements of Comprehensive Income:

	Three Months Ended					Six Months Ended
	June 30					June 30
	2019		2018			2019		2018
Truck, Parts and Other:
Cash flow hedges	$	6.3	$	(5.0	)	$	14.1	$	(2.5	)

Financial Services:
Fair value hedges		.3		.5			.9		.9
Cash flow hedges		5.0		(92.1	)		11.7		(82.8	)
Total	$	11.6	$	(96.6	)	$	26.7	$	(84.4	)

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

	June 30		December 31
	2019		2018
Financial Services
Term notes:
Carrying amount of the hedged liabilities	$	90.6	$	188.7
Cumulative basis adjustment included in the carrying amount		.6		(1.3	)

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						Six Months Ended
	June 30, 2019						June 30, 2019
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS
Loss recognized in OCI:
Truck, Parts and Other				$	(.2	)				$	(16.2	)
Financial Services	$	(11.7	)				$	(26.0	)
	$	(11.7	)	$	(.2	)	$	(26.0	)	$	(16.2	)

	Three Months Ended				Six Months Ended
	June 30, 2018				June 30, 2018
	INTEREST-		FOREIGN-		INTEREST-		FOREIGN-
	RATE		EXCHANGE		RATE		EXCHANGE
	CONTRACTS		CONTRACTS		CONTRACTS		CONTRACTS
Gain recognized in OCI:
Truck, Parts and Other			$	10.8			$	6.4
Financial Services	$	93.1			$	81.6
	$	93.1	$	10.8	$	81.6	$	6.4

Foreign Currency And Interest Rate Contract

Gains/Losses of Derivative Financial Instruments

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

	Three Months Ended				Six Months Ended
	June 30, 2019				June 30, 2019
	INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	(.2	)
Interest and other (income), net			1.1			$	2.6
Financial Services:
Interest and other borrowing expenses			1.5				(4.7	)
Total		$	2.4			$	(2.1	)

	Three Months Ended				Six Months Ended
	June 30, 2018				June 30, 2018
	INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues						$	1.2
Interest and other (income), net		$	.3				3.7
Financial Services:
Interest and other borrowing expenses			(8.9	)			(8.4	)
Selling, general and administrative			(.7	)			.5
Total		$	(9.3	)		$	(3.0	)