Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

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:

	March 31, 2014				December 31, 2013
	Assets		Liabilities		Assets		Liabilities
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	47.5			$	46.3
Deferred taxes and other liabilities			$	49.6			$	67.7
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		.1
Accounts payable, accrued expenses and other				.6				.6
Total	$	47.6	$	50.2	$	46.3	$	68.3
Economic hedges:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	.1			$	.6
Accounts payable, accrued expenses and other			$	.6			$	.2
Financial Services:
Other assets		.1				1.1
Deferred taxes and other liabilities				2.1				.1
Total	$	.2	$	2.7	$	1.7	$	.3

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 March 31, 2014	Gross Amount Recognized in Balance Sheet		Amount Not Offset in Financial Instruments			Pro Forma Net Amount
Assets:
Truck, Parts and Other
Foreign-exchange contracts	$	.2	$	(.2	)
Financial Services
Interest-rate contracts		47.5		(11.5	)	$	36.0
Foreign-exchange contracts		.1					.1
Total derivative assets	$	47.8	$	(11.7	)	$	36.1
Liabilities:
Truck, Parts and Other
Foreign-exchange contracts	$	1.2	$	(.2	)	$	1.0
Financial Services
Interest-rate contracts		49.6		(11.5	)		38.1
Foreign-exchange contracts		2.1					2.1
Total derivative liabilities	$	52.9	$	(11.7	)	$	41.2
As of December 31, 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	$	.6	$	(.2	)	$	.4
Financial Services
Interest-rate contracts		46.3		(16.1	)		30.2
Foreign-exchange contracts		1.1					1.1
Total derivative assets	$	48.0	$	(16.3	)	$	31.7
Liabilities:
Truck, Parts and Other
Foreign-exchange contracts	$	.8	$	(.2	)	$	.6
Financial Services
Interest-rate contracts		67.7		(16.1	)		51.6
Foreign-exchange contracts		.1					.1
Total derivative liabilities	$	68.6	$	(16.3	)	$	52.3

Economic Hedges

Gains/Losses of Derivative Financial Instruments

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

Three Months Ended March 31,	2014				2013
	Interest- Rate Contracts	Foreign- Exchange Contracts			Interest- Rate Contracts			Foreign- Exchange Contracts
Truck, Parts and Other:
Cost of sales and revenues		$	.2					$	(.1	)
Interest and other expense, net			(.9	)					1.7
Financial Services:
Interest and other borrowing expenses			.5		$	(1.3	)		.3
Total		$	(.2	)	$	(1.3	)	$	1.9

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 March 31,	2014				2013
	Interest- Rate Contracts		Foreign- Exchange Contracts		Interest- Rate Contracts		Foreign- Exchange Contracts
Gain (loss) recognized in other comprehensive income:
Truck, Parts and Other			$	.2			$	1.6
Financial Services	$	8.4			$	19.7
Total	$	8.4	$	.2	$	19.7	$	1.6

Expense (income) reclassified out of AOCI into income:

Three Months Ended March 31,	2014						2013
	Interest- Rate Contracts			Foreign- Exchange Contracts			Interest- Rate Contracts			Foreign- Exchange Contracts
Truck, Parts and Other:
Cost of sales and revenues				$	.1					$	(2.3	)
Interest and other expense, net					(.1	)					(.2	)
Financial Services:
Interest and other borrowing expenses	$	(6.9	)				$	(15.6	)
Total	$	(6.9	)				$	(15.6	)	$	(2.5	)

Financial Services | Fair Value Hedge

Gains/Losses of Derivative Financial Instruments

The (income) or expense 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 March 31,	2014			2013
Interest-rate swaps	$	.1		$	.2
Term notes		(1.1	)		(1.4	)