John Deere 2012 Annual Report Download - page 51

Fair values of derivative instruments in the consolidated
balance sheet at October 31 in millions of dollars follow:
2012 2011
Other Assets
Designated as hedging instruments:
Interest rate contracts ............................................. $ 536 $ 404
Cross-currency interest rate contracts ..................... 10
Total designated ................................................. 546 404
Not designated as hedging instruments:
Interest rate contracts ............................................. 73 67
Foreign exchange contracts .................................... 17 12
Cross-currency interest rate contracts ..................... 1 2
Total not designated ........................................... 91 81
Total derivatives ...................................................... $ 637 $ 485
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts ............................................. $ 12 $ 13
Cross-currency interest rate contracts ..................... 58 7
Total designated ................................................. 70 20
Not designated as hedging instruments:
Interest rate contracts ............................................. 60 48
Foreign exchange contracts .................................... 18 100
Cross-currency interest rate contracts ..................... 1
Total not designated ........................................... 79 148
Total derivatives ...................................................... $ 149 $ 168
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:
2012 2011 2010
Fair Value Hedges
Interest rate contracts – Interest expense ..... $ 335 $ 188 $ 372
Cash Flow Hedges
Recognized in OCI
(Effective Portion):
Interest rate contracts – OCI (pretax)* .......... (28) (5) (14)
Foreign exchange contracts –
OCI (pretax)* ........................................... (33) 36 (42)
Reclassified from OCI
(Effective Portion):
Interest rate contracts – Interest expense* .... (16) (20) (68)
Foreign exchange contracts –
Other expense* ....................................... (38) 19 (11)
Recognized Directly in Income
(Ineffective Portion) ..................................... ** ** **
Not Designated as Hedges
Interest rate contracts – Interest expense* .... $ (13) $ (1) $ 25
Foreign exchange contracts –
Cost of sales ........................................... (12) (51) (19)
Foreign exchange contracts –
Other expense* ....................................... 7 (127) (92)
Total not designated ................................ $ (18) $ (179 ) $ (86)
* Includes interest and foreign exchange gains (losses) from cross-currency interest
rate contracts.
** The amounts are not significant.
28. SEGMENT AND GEOGRAPHIC AREA DATA FOR THE YEARS
ENDED OCTOBER 31, 2012, 2011 AND 2010
The company’s operations are presently organized and reported
in three major business segments described as follows:
The agriculture and turf segment primarily manufactures
and distributes a full line of agriculture and turf equipment and
related service parts – including large, medium and utility
tractors; loaders; combines, corn pickers, cotton and sugarcane
harvesters and related front-end equipment and sugarcane
loaders; tillage, seeding and application equipment, including
sprayers, nutrient management and soil preparation machinery;
hay and forage equipment, including self-propelled forage
harvesters and attachments, balers and mowers; turf and utility
equipment, including riding lawn equipment and walk-behind
mowers, golf course equipment, utility vehicles, and commer-
cial mowing equipment, along with a broad line of associated
implements; integrated agricultural management systems
technology; precision agricultural irrigation equipment and
supplies; landscape and nursery products; and other outdoor
power products.
The construction and forestry segment primarily manufac-
tures and distributes a broad range of machines and service parts
used in construction, earthmoving, material handling and
timber harvesting – including backhoe loaders; crawler dozers
and loaders; four-wheel-drive loaders; excavators; motor
graders; articulated dump trucks; landscape loaders; skid-steer
loaders; and log skidders, feller bunchers, log loaders, log
forwarders, log harvesters and related attachments.
The products and services produced by the segments
above are marketed primarily through independent retail dealer
networks and major retail outlets.
The financial services segment primarily finances sales
and leases by John Deere dealers of new and used agriculture
and turf equipment and construction and forestry equipment.
In addition, the financial services segment provides wholesale
financing to dealers of the foregoing equipment, finances retail
revolving charge accounts and operating loans and offers crop
risk mitigation products and extended equipment warranties.
Because of integrated manufacturing operations and
common administrative and marketing support, a substantial
number of allocations must be made to determine operating
segment and geographic area data. Intersegment sales and
revenues represent sales of components and finance charges,
which are generally based on market prices.
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