Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Balance Sheet Classifications and Fair Value of Derivative Financial Instruments

The following table presents the balance sheet classification and fair value of derivative financial instruments:

	September 30, 2013				December 31, 2012
	Assets		Liabilities		Assets		Liabilities
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	30.3			$	4.6
Deferred taxes and other liabilities			$	71.0			$	111.7
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		.2				.2
Accounts payable, accrued expenses and other				2.6				.1
Total	$	30.5	$	73.6	$	4.8	$	111.8
Economic hedges:
Interest-rate contracts:
Financial Services:
Deferred taxes and other liabilities							$	.6
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	.2			$	.3
Accounts payable, accrued expenses and other			$	.5				.2
Financial Services:
Other assets		.2
Deferred taxes and other liabilities				1.4				.4
Total	$	.4	$	1.9	$	.3	$	1.2

Balance Sheet Classification of Gross and Proforma Net Amounts of Derivative Financial Instruments

The following tables present the balance sheet classification of the gross and pro forma net amounts of derivative financial instruments:

As of September 30, 2013	Gross Amount Recognized in Balance Sheet		Amount Not Offset in Financial Instruments			Pro Forma Net Amount
Assets:
Truck, Parts and Other
Foreign-exchange contracts	$	.4	$	(.1	)	$	.3
Financial Services
Interest-rate contracts		30.3		(12.3	)		18.0
Foreign-exchange contracts		.2					.2
Total derivative assets	$	30.9	$	(12.4	)	$	18.5
Liabilities:
Truck, Parts and Other
Foreign-exchange contracts	$	3.1	$	(.1	)	$	3.0
Financial Services
Interest-rate contracts		71.0		(12.3	)		58.7
Foreign-exchange contracts		1.4					1.4
Total derivative liabilities	$	75.5	$	(12.4	)	$	63.1
As of December 31, 2012	Gross Amount Recognized in Balance Sheet		Amount Not Offset in Financial Instruments			Pro Forma Net Amount
Assets:
Truck, Parts and Other
Foreign-exchange contracts	$	.5				$	.5
Financial Services
Interest-rate contracts		4.6	$	(2.6	)		2.0
Total derivative assets	$	5.1	$	(2.6	)	$	2.5
Liabilities:
Truck, Parts and Other
Foreign-exchange contracts	$	.3				$	.3
Financial Services
Interest-rate contracts		112.3	$	(2.6	)		109.7
Foreign-exchange contracts		.4					.4
Total derivative liabilities	$	113.0	$	(2.6	)	$	110.4

Cash Flow Hedging

Gains/Losses of Derivative Financial Instruments

The following table presents the pre-tax effects of derivative instruments recognized in OCI:

	Three Months Ended				Nine Months Ended
	September 30, 2013				September 30, 2013
	Interest-Rate		Foreign-Exchange		Interest-Rate			Foreign-Exchange
	Contracts		Contracts		Contracts			Contracts
Loss (gain) recognized in OCI:
Truck, Parts and Other			$	4.6				$	1.7
Financial Services	$	33.1			$	(41.3	)
	$	33.1	$	4.6	$	(41.3	)	$	1.7
	Three Months Ended				Nine Months Ended
	September 30, 2012				September 30, 2012
	Interest-Rate		Foreign-Exchange		Interest-Rate			Foreign-Exchange
	Contracts		Contracts		Contracts			Contracts
Loss recognized in OCI:
Truck, Parts and Other			$	1.3				$	2.2
Financial Services	$	5.7			$	29.4
	$	5.7	$	1.3	$	29.4		$	2.2

Expense (income) reclassified out of accumulated other comprehensive loss into income:

	Three Months Ended September 30, 2013					Nine Months Ended September 30, 2013
	Interest-Rate		Foreign-Exchange			Interest-Rate			Foreign-Exchange
	Contracts		Contracts			Contracts			Contracts
Truck, Parts and Other:
Cost of sales and revenues			$	1.8					$	(.5	)
Interest and other expense (income), net				(.5	)					(.2	)
Financial Services:
Interest and other borrowing expenses	$	32.8				$	(29.1	)
	$	32.8	$	1.3		$	(29.1	)	$	(.7	)
	Three Months Ended					Nine Months Ended
	September 30, 2012					September 30, 2012
	Interest-Rate		Foreign-Exchange			Interest-Rate			Foreign-Exchange
	Contracts		Contracts			Contracts			Contracts
Truck, Parts and Other:
Cost of sales and revenues			$	1.6					$	4.3
Interest and other expense (income), net				.4						.4
Financial Services:
Interest and other borrowing expenses	$	1.6				$	17.7
	$	1.6	$	2.0		$	17.7		$	4.7

Economic Hedges

Gains/Losses of Derivative Financial Instruments

The expense (income) recognized in earnings related to economic hedges is as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2013						September 30, 2013
	Interest-Rate			Foreign-Exchange			Interest-Rate			Foreign-Exchange
	Contracts			Contracts			Contracts			Contracts
Truck, Parts and Other:
Cost of sales and revenues				$	(1.3	)				$	(.9	)
Interest and other expense (income), net					.4						.8
Financial Services:
Interest and other borrowing expenses	$	(.1	)		(4.3	)	$	(1.5	)		(8.9	)
	$	(.1	)	$	(5.2	)	$	(1.5	)	$	(9.0	)
	Three Months Ended						Nine Months Ended
	September 30, 2012						September 30, 2012
	Interest-Rate			Foreign-Exchange			Interest-Rate			Foreign-Exchange
	Contracts			Contracts			Contracts			Contracts
Truck, Parts and Other:
Cost of sales and revenues										$	(.3	)
Interest and other expense (income), net				$	2.0						(.4	)
Financial Services:
Interest and other borrowing expenses	$	1.6			(.5	)	$	1.5			.6
	$	1.6		$	1.5		$	1.5		$	(.1	)

Financial Services | Fair Value Hedge

Gains/Losses of Derivative Financial Instruments

The expense or (income) recognized in earnings related to fair value hedges was included in interest and other borrowing expenses in the Financial Services segment of the Consolidated Statements of Comprehensive Income as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2013			2012			2013			2012
Interest-rate swaps	$	.2		$	(2.4	)	$	.5		$	(4.0	)
Term notes		(.2	)		3.2			(.6	)		4.7