Derivative Instruments (Tables)

3 Months Ended

Jan. 31, 2015

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
	2015			2014
Interest rate contracts *	$	168.2		$	(70.6	)
Borrowings **		(165.4	)		68.7

*   Includes changes in fair value of interest rate contracts excluding net accrued interest income of $43.0 million and $34.7 million during the first three months of 2015 and 2014, respectively.

**   Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $65.6 million and $54.5 million during the first three months of 2015 and 2014, 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 2015		October 31 2014		January 31  2014
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	276.9	$	148.1	$		130.4
Not designated as hedging instruments:
Interest rate contracts	39.3		35.6		34.7
Cross-currency interest rate contracts	10.4		2.8		4.2
Total not designated	49.7		38.4		38.9
Other Assets
Designated as hedging instruments:
Interest rate contracts		116.2		107.5		140.1
Not designated as hedging instruments:
Interest rate contracts	6.0		9.8		7.2
Foreign exchange contracts	25.7		3.1		13.0
Cross-currency interest rate contracts					.1
Total not designated	31.7		12.9		20.3
Total derivatives	$	474.5	$	306.9	$		329.7
Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	6.6	$	35.3	$		94.6
Not designated as hedging instruments:
Interest rate contracts	15.5		16.9		13.9
Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Interest rate contracts	27.1		23.0		29.3
Foreign exchange contracts	2.4		8.6		6.2
Total not designated	29.5		31.6		35.5
Total derivatives	$	51.6	$	83.8	$		144.0

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):

	Expense or OCI	Three Months Ended January 31
	Classification	2015		2014
Fair Value Hedges:
Interest rate contracts	Interest expense	$	211.2	$	(35.9)
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *		(3.6)		(1.8)
Foreign exchange contracts	OCI (pretax) *				(4.1)
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest expense *		(2.1)		(3.6)
Foreign exchange contracts	Administrative and operating expenses *				(5.5)
Recognized Directly in Income
(Ineffective Portion)			**		**
Not Designated as Hedges:
Interest rate contracts	Interest expense *	$	(3.7)	$	2.7
Foreign exchange contracts	Administrative and operating expenses *	128.2		53.5
Total not designated		$	124.5	$	56.2

*	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, 2015
Derivatives:	Gross Amounts Recognized		Netting Arrangements	Collateral Received	Net Amount
Assets
External	$	147.9	$            (29.3)		$       118.6
John Deere	326.6		(21.5)		305.1
Liabilities
External	29.5		(29.3)		.2
John Deere	22.1		(21.5)		.6
October 31, 2014
Derivatives:	Gross Amounts Recognized		Netting Arrangements	Collateral Received	Net Amount
Assets
External	$	120.4	$            (24.3)		$        96.1
John Deere	186.5		(50.4)		136.1
Liabilities
External	31.6		(24.3)		7.3
John Deere	52.2		(50.4)		1.8
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