Derivative Instruments (Tables)

6 Months Ended

Apr. 30, 2015

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

	* Includes changes in fair value of interest rate contracts excluding net accrued interest income of $42.5 million and $39.6 million during the second quarter of 2015 and 2014, respectively, and $85.5 million and $74.3 million during the first six months of 2015 and 2014, respectively.

	** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $64.6 million and $60.9 million during the second quarter of 2015 and 2014, respectively, and $130.2 million and $115.4 million during the first six months of 2015 and 2014, respectively.

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

	April 30 2015		October 31 2014		April 30 2014
Receivables from John Deere
Designated as hedging instruments:
Interest rate contracts	$	178.6	$	148.1	$	118.9

Not designated as hedging instruments:
Interest rate contracts	37.8		35.6		34.5
Cross-currency interest rate contracts	12.4		2.8		2.1
Total not designated	50.2		38.4		36.6

Other Assets
Designated as hedging instruments:
Interest rate contracts	91.5		107.5		118.2

Not designated as hedging instruments:
Interest rate contracts	5.9		9.8		9.7
Foreign exchange contracts	.6		3.1		2.9
Total not designated	6.5		12.9		12.6

Total derivatives	$	326.8	$	306.9	$	286.3

Other Payables to John Deere
Designated as hedging instruments:
Interest rate contracts	$	14.4	$	35.3	$	91.9

Not designated as hedging instruments:
Interest rate contracts	17.9		16.9		15.1
Cross-currency interest rate contracts					.3
Total not designated	17.9		16.9		15.4

Accounts Payable and Accrued Expenses
Not designated as hedging instruments:
Interest rate contracts	21.5		23.0		24.7
Foreign exchange contracts	19.7		8.6		7.7
Total not designated	41.2		31.6		32.4

Total derivatives	$	73.5	$	83.8	$	139.7

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 April 30				Six Months Ended April 30
		Classification	2015		2014		2015		2014
Fair Value Hedges:
Interest rate contracts		Interest expense	$	(73.6)	$	29.1	$	137.6	$	(6.8)

Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts		OCI (pretax) *	(.3)		(1.8)		(3.9)		(3.6)
Foreign exchange contracts		OCI (pretax) *							(4.1)

Reclassified from OCI
(Effective Portion):
Interest rate contracts		Interest expense *	(1.8)		(2.3)		(3.9)		(5.9)
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	$	2.2	$	(3.4)	$	4.9
Foreign exchange contracts		Administrative and operating expenses *	(16.0)		(62.1)		112.2		(8.6)
Total not designated			$	(15.7)	$	(59.9)	$	108.8	$	(3.7)

*	Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.
**	The amount is not significant.

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):

April 30, 2015
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral Received	Net Amount
Assets
External	$	98.0	$	(21.8)		$	76.2
John Deere	228.8		(32.3)			196.5
Liabilities
External	41.2		(21.8)			19.4
John Deere	32.3		(32.3)

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

April 30, 2014
Derivatives:	Gross Amounts Recognized		Netting Arrangements		Collateral Received	Net Amount
Assets
External	$	130.8	$	(25.9)		$	104.9
John Deere	155.5		(105.4)			50.1
Liabilities
External	32.4		(25.9)			6.5
John Deere	107.3		(105.4)			1.9