John Deere 2015 Annual Report Download - page 58

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26. FAIR VALUE MEASUREMENTS
Before Tax After
The fair values of financial instruments that do not approximate
Tax (Expense) Tax
the carrying values at October 31 in millions of dollars follow:
Amount Credit Amount
2013 2015 2014
Cumulative translation adjustment ............... $ (74) $ 3 $ (71)
Carrying Fair Carrying Fair
Unrealized gain (loss) on derivatives: Value Value* Value Value*
Unrealized hedging gain......................... 43 (14) 29
Reclassification of realized (gain) loss to: Financing receivables – net .......... $ 24,809 $ 24,719 $ 27,422 $ 27,337
Interest rate contracts – Interest expense ... 22 (8) 14 Financing receivables
Foreign exchange contracts – securitized – net..................... $ 4,835 $ 4,820 $ 4,602 $ 4,573
Other operating expenses ................ (49) 17 (32)
Short-term securitization
Net unrealized gain on derivatives ............ 16 (5) 11 borrowings............................ $ 4,590 $ 4,590 $ 4,559 $ 4,562
Unrealized gain (loss) on investments:
Long-term borrowings due within
Unrealized holding (loss) ........................ (17) 6 (11)
one year:
Net unrealized (loss) on investments ......... (17) 6 (11) Equipment operations .......... $ 86 $ 78 $ 243 $ 233
Retirement benefits adjustment: Financial services ................ 5,167 5,167 4,730 4,743
Pensions Total ............................. $ 5,253 $ 5,245 $ 4,973 $ 4,976
Net actuarial gain and prior
service credit ................................ 1,507 (552) 955 Long-term borrowings:
Reclassification through amortization of Equipment operations .......... $ 4,461 $ 4,835 $ 4,643 $ 5,095
actuarial (gain) loss and prior service Financial services ................ 19,372 19,348 19,738 19,886
(credit) cost to net income:* Total ............................. $ 23,833 $ 24,183 $ 24,381 $ 24,981
Actuarial loss ............................. 265 (101) 164
* Fair value measurements above were Level 3 for all financing receivables and
Prior service cost ........................ 12 (6) 6
Level 2 for all borrowings.
Settlements/curtailments ............. 2 2
Health care and life insurance Fair values of the financing receivables that were issued
Net actuarial gain and prior long-term were based on the discounted values of their related
service credit ................................ 1,167 (426) 741
cash flows at interest rates currently being offered by the
Reclassification through amortization of
actuarial (gain) loss and prior service company for similar financing receivables. The fair values of the
(credit) cost to net income:* remaining financing receivables approximated the carrying
Actuarial loss ............................. 141 (54) 87 amounts.
Prior service (credit) .................... (8) 3 (5) Fair values of long-term borrowings and short-term
Net unrealized gain on retirement securitization borrowings were based on current market quotes
benefits adjustment ........................... 3,086 (1,136) 1,950 for identical or similar borrowings and credit risk, or on the
Total other comprehensive income (loss) ....... $ 3,011 $(1,132) $ 1,879 discounted values of their related cash flows at current market
interest rates. Certain long-term borrowings have been swapped
* These accumulated other comprehensive income amounts are included in net
periodic postretirement costs. See Note 7 for additional detail. to current variable interest rates. The carrying values of these
long-term borrowings included adjustments related to fair value
The noncontrolling interests’ comprehensive income was hedges.
$.5 million in 2015, $1.3 million in 2014 and $.4 million in 2013,
which consisted of net income of $.9 million in 2015,
$1.6 million in 2014 and $.3 million in 2013 and cumulative
translation adjustments of $(.4) million in 2015, $(.3) million in
2014 and $.1 million in 2013.
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