Derivative Instruments (Tables)

3 Months Ended

Jan. 31, 2013

Derivative Instruments

Fair Value Hedge Interest Rate Contracts and Underlying Borrowings

The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows (in millions of dollars):

	Three Months Ended January 31
	2013			2012
Interest rate contracts *	$	(70.9	)	$	105.3
Borrowings **	73.1			(108.5		)

*      Includes changes in fair value of interest rate contracts excluding net accrued interest income of $36.2 million and $38.6 million during the first three months of 2013 and 2012.

**    Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $61.3 million and $65.8 million during the first three months of 2013 and 2012.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheets were as follows (in millions of dollars):
		January 31, 2013		October 31, 2012		January 31, 2012
	Receivables from John Deere
	Designated as hedging instruments:
	Interest rate contracts	$	280.5	$	314.2	$	220.3
	Cross-currency interest rate contracts	4.8		8.7		5.5
	Total designated	285.3		322.9		225.8
	Not designated as hedging instruments:
	Interest rate contracts	41.7		41.6		43.9
	Cross-currency interest rate contracts	.4		1.2		.8
	Total not designated	42.1		42.8		44.7
	Other Assets
	Designated as hedging instruments:
	Interest rate contracts	185.5		197.0		234.7
	Not designated as hedging instruments:
	Interest rate contracts	20.9		30.6		30.7
	Foreign exchange contracts	6.2		1.9		1.4
	Cross-currency interest rate contracts			.3		1.2
	Total not designated	27.1		32.8		33.3
	Total derivatives	$	540.0	$	595.5	$	538.5
	Other Payables to John Deere
	Designated as hedging instruments:
	Interest rate contracts	$	18.0	$	11.8	$	2.4
	Cross-currency interest rate contracts	.6		2.2		1.7
	Total designated	18.6		14.0		4.1
	Not designated as hedging instruments:
	Interest rate contracts	11.6		13.5		6.1
	Cross-currency interest rate contracts	1.6		.7		.6
	Total not designated	13.2		14.2		6.7
	Accounts Payable and Accrued Expenses
	Designated as hedging instruments:
	Cross-currency interest rate contracts	30.2		56.3		42.7
	Not designated as hedging instruments:
	Interest rate contracts	40.9		41.3		45.0
	Foreign exchange contracts	11.2		5.4		37.5
	Cross-currency interest rate contracts	.1		.1		.2
	Total not designated	52.2		46.8		82.7
	Total derivatives	$	114.2	$	131.3	$	136.2

Gains (Losses) Related to Derivative Instruments on Statements of Consolidated Income

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statements of consolidated income consisted of the following (in millions of dollars):

			Three Months Ended
		Expense or OCI	January 31
		Classification	2013			2012
Fair Value Hedges:
Interest rate contracts		Interest expense	$	(34.7	)	$	143.9
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts		OCI (pretax) *	(2.8		)	(6.0		)
Foreign exchange contracts		OCI (pretax) *	21.4			(35.2		)
Reclassified from OCI
(Effective Portion):
Interest rate contracts		Interest expense *	(4.4		)	(2.7		)
Foreign exchange contracts		Administrative and operating expenses *	19.1			(33.0		)
Recognized Directly in Income
(Ineffective Portion)			**			**
Not Designated as Hedges:
Interest rate contracts		Interest expense *	$	.6		$	(1.4	)
Foreign exchange contracts		Administrative and operating expenses *	(24.7		)	7.6
Total not designated			$	(24.1	)	$	6.2
*	Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.
**	The amount is not significant.