John Deere 2012 Annual Report Download - page 48

The company currently uses shares that have been
repurchased through its stock repurchase programs to satisfy
share option exercises. At October 31, 2012, the company
had 149 million shares in treasury stock and 29 million shares
remaining to be repurchased under its current publicly
announced repurchase program (see Note 23).
25. OTHER COMPREHENSIVE INCOME ITEMS
Other comprehensive income items are transactions recorded in
stockholders’ equity during the year, excluding net income and
transactions with stockholders. Following are the items included
in other comprehensive income (loss) for Deere & Company
and the related tax effects in millions of dollars:
Before Tax After
Tax (Expense) Tax
Amount Credit Amount
2010
Retirement benefits adjustment:
Net actuarial losses and
prior service cost .............................. $ (213) $ 77 $ (136)
Reclassification of actuarial losses
and prior service cost
to net income .................................... 474 (180 ) 294
Net unrealized gain ................................ 261 (103) 158
Cumulative translation adjustment .............. 49 (13 ) 36
Unrealized gain on derivatives:
Hedging loss ......................................... (56) 19 (37)
Reclassification of realized loss
to net income .................................... 79 (27) 52
Net unrealized gain ................................ 23 (8) 15
Unrealized holding gain and net
unrealized gain on investments .............. 8 (3) 5
Total other comprehensive income (loss) .... $ 341 $ (127) $ 214
2011
Retirement benefits adjustment:
Net actuarial losses and
prior service cost .............................. $ (989) $ 368 $ (621)
Reclassification of actuarial losses
and prior service cost
to net income .................................... 450 (167) 283
Net unrealized loss ................................ (539) 201 (338)
Cumulative translation adjustment .............. 14 4 18
Unrealized gain on derivatives:
Hedging gain ......................................... 31 (11) 20
Reclassification of realized loss
to net income .................................... 1 1
Net unrealized gain ................................ 32 (11) 21
Unrealized holding gain and net
unrealized gain on investments .............. 2 (1) 1
Total other comprehensive income (loss) .... $ (491) $ 193 $ (298)
(continued)
Before Tax After
Tax (Expense) Tax
Amount Credit Amount
2012
Retirement benefits adjustment:
Net actuarial losses and
prior service cost .............................. $ (1,341) $ 477 $ (864)
Reclassification of actuarial losses
and prior service cost
to net income .................................... 380 (140) 240
Net unrealized loss ................................ (961) 337 (624)
Cumulative translation adjustment .............. (272) 2 (270)
Unrealized loss on derivatives:
Hedging loss ......................................... (61) 21 (40)
Reclassification of realized loss
to net income .................................... 54 (19) 35
Net unrealized loss ................................ (7) 2 (5)
Unrealized holding gain and net
unrealized gain on investments .............. 7 (2) 5
Total other comprehensive income (loss) .... $ (1,233 ) $ 339 $ (894)
26. FAIR VALUE MEASUREMENTS
The fair values of financial instruments that do not approximate
the carrying values at October 31 in millions of dollars follow:
2012 2011
______________ ______________
Carrying Fair Carrying Fair
Value Value* Value Value
Financing receivables – net .............. $ 22,159 $ 2 2,24 4 $ 19,924 $ 19,919
Financing receivables
securitized – net .......................... $ 3,618 $ 3,615 $ 2,905 $ 2,907
Short-term securitization
borrowings .................................. $ 3,575 $ 3,584 $ 2,777 $ 2,789
Long-term borrowings due
within one year:
Equipment operations .............. $ 195 $ 194 $ 244 $ 233
Financial services .................... 4,790 4,871 5,249 5,331
Total ....................................... $ 4,985 $ 5,065 $ 5,493 $ 5,564
Long-term borrowings:
Equipment operations .................. $ 5,445 $ 6,237 $ 3,167 $ 3,771
Financial services ........................ 17,0 08 17,4 3 8 13,793 14,154
Total ....................................... $ 2 2,45 3 $ 23,675 $ 16,960 $ 17, 92 5
* Fair value measurements above were Level 3 for all financing receivables and
Level 2 for all borrowings.
Fair values of the financing receivables that were issued
long-term were based on the discounted values of their related
cash flows at interest rates currently being offered by the
company for similar financing receivables. The fair values of the
remaining financing receivables approximated the carrying
amounts.
Fair values of long-term borrowings and short-term
securitization borrowings were based on current market quotes
for identical or similar borrowings and credit risk, or on the
discounted values of their related cash flows at current market
48