Derivative Instruments (Tables)

3 Months Ended

Jan. 31, 2014

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
	2014		2013
Interest rate contracts *	$	(70.6)	$	(70.9)
Borrowings **	68.7		73.1

* Includes changes in fair value of interest rate contracts excluding net accrued interest income of $34.7 million and $36.2 million during the first three months of 2014 and 2013, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $54.5 million and $61.3 million during the first three months of 2014 and 2013, respectively.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheet were as follows (in millions of dollars):

	January 31		October 31		January 31
	2014		2013		2013
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	130.4	$	144.3	$	280.5
Cross-currency interest rate contracts					4.8
Total designated	130.4		144.3		285.3
Not designated as hedging instruments:
Interest rate contracts	34.7		31.2		41.7
Cross-currency interest rate contracts	4.2		1.1		.4
Total not designated	38.9		32.3		42.1
Other Assets
Designated as hedging instruments:
Interest rate contracts	140.1		140.5		185.5
Not designated as hedging instruments:
Interest rate contracts	7.2		16.3		20.9
Foreign exchange contracts	13.0		1.0		6.2
Cross-currency interest rate contracts	.1		.1
Total not designated	20.3		17.4		27.1
Total derivatives	$	329.7	$	334.5	$	540.0
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	94.6	$	71.0	$	18.0
Cross-currency interest rate contracts			.4		.6
Total designated	94.6		71.4		18.6
Not designated as hedging instruments:
Interest rate contracts	13.9		13.8		11.6
Cross-currency interest rate contracts			.7		1.6
Total not designated	13.9		14.5		13.2
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Cross-currency interest rate contracts			16.0		30.2
Not designated as hedging instruments:
Interest rate contracts	29.3		29.9		40.9
Foreign exchange contracts	6.2		15.8		11.2
Cross-currency interest rate contracts					.1
Total not designated	35.5		45.7		52.2
Total derivatives	$	144.0	$	147.6	$	114.2

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

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

		Three Months Ended
	Expense or OCI	January 31
	Classification	2014		2013
Fair Value Hedges:
Interest rate contracts	Interest expense	$	(35.9)	$	(34.7)
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *	(1.8)		(2.8)
Foreign exchange contracts	OCI (pretax) *	(4.1)		21.4
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest expense *	(3.6)		(4.4)
Foreign exchange contracts	Administrative and operating expenses *	(5.5)		19.1
Recognized Directly in Income
(Ineffective Portion)		**		**
Not Designated as Hedges:
Interest rate contracts	Interest expense *	$	2.7	$	.6
Foreign exchange contracts	Administrative and operating expenses *	53.5		(24.7)
Total not designated		$	56.2	$	(24.1)

* Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

** The amount is not significant.

Impact on Derivative Assets and Liabilities for External Derivatives and those with John Deere Related to Netting Arrangements and Collateral

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities for external derivatives and those with John Deere related to netting arrangements and any collateral received or paid were as follows (in millions of dollars):

January 31, 2014
Derivatives:	Gross Amounts Recognized		Netting Arrangements			Collateral Received			Net Amount
Assets
External	$	160.4	$	(29.5	)	$	(2.4	)	$	128.5
John Deere	169.3		(105.9		)				63.4
Liabilities
External	35.5		(29.5		)				6.0
John Deere	108.5		(105.9		)				2.6

October 31, 2013
Derivatives:	Gross Amounts Recognized		Netting Arrangements			Collateral Received			Net Amount
Assets
External	$	157.9	$	(42.6	)	$	(2.4	)	$	112.9
John Deere	176.6		(82.9		)				93.7
Liabilities
External	61.7		(42.6		)				19.1
John Deere	85.9		(82.9		)				3.0

January 31, 2013
Derivatives:	Gross Amounts Recognized		Netting Arrangements			Collateral Received			Net Amount
Assets
External	$	212.6	$	(58.3	)	$	(21.5	)	$	132.8
John Deere	327.4		(27.3		)				300.1
Liabilities
External	82.4		(58.3		)				24.1
John Deere	31.8		(27.3		)				4.5