Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

Assets and liabilities measured at fair value

	March 31, 2012
(Millions of dollars)	Level 1		Level 2		Level 3		TotalAssets / Liabilities,at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	12	$	—	$	—	$	12
Other U.S. and non-U.S. government bonds	—		123		—		123
Corporate bonds
Corporate bonds	—		604		—		604
Asset-backed securities	—		98		—		98
Mortgage-backed debt securities
U.S. governmental agency	—		279		—		279
Residential	—		29		—		29
Commercial	—		143		—		143
Equity securities
Large capitalization value	168		—		—		168
Smaller company growth	42		—		—		42
Total available-for-sale securities	222		1,276		—		1,498
Derivative financial instruments, net	—		183		—		183
Total Assets	$	222	$	1,459	$	—	$	1,681
Liabilities
Guarantees	$	—	$	—	$	7	$	7
Total Liabilities	$	—	$	—	$	7	$	7

	December 31, 2011
(Millions of dollars)	Level 1		Level 2		Level 3		TotalAssets / Liabilities,at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	10	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		92		—		92
Corporate bonds
Corporate bonds	—		572		—		572
Asset-backed securities	—		111		—		111
Mortgage-backed debt securities
U.S. governmental agency	—		310		—		310
Residential	—		30		—		30
Commercial	—		145		—		145
Equity securities
Large capitalization value	148		—		—		148
Smaller company growth	29		—		—		29
Total available-for-sale securities	187		1,260		—		1,447
Derivative financial instruments, net	—		145		—		145
Total Assets	$	187	$	1,405	$	—	$	1,592
Liabilities
Guarantees	$	—	$	—	$	7	$	7
Total Liabilities	$	—	$	—	$	7	$	7

Roll-forwards of assets and liabilities measured at fair value using Level 3 inputs

(Millions of dollars)	Guarantees
Balance at December 31, 2011	$	7
Issuance of guarantees	—
Expiration of guarantees	—
Balance at March 31, 2012	$	7
Balance at December 31, 2010	$	10
Issuance of guarantees	1
Expiration of guarantees	(1		)
Balance at March 31, 2011	$	10

Fair Values of Financial Instruments

Fair Value of Financial Instruments

	March 31, 2012				December 31, 2011
(Millions of dollars)	CarryingAmount		Fair Value		CarryingAmount		FairValue		Fair  Value  Levels	Reference
Assets
Cash and short-term investments	$	2,864	$	2,864	$	3,057	$	3,057	1
Restricted cash and short-term investments	51		51		87		87		1
Available-for-sale securities	1,498		1,498		1,447		1,447		1 & 2	Note 8
Finance receivables—net (excluding finance leases(1))	13,276		13,099		12,689		12,516		2	Note 15
Wholesale inventory receivables—net (excluding finance leases(1))	1,519		1,448		1,591		1,505		2	Note 15
Interest rate swaps—net	233		233		241		241		2	Note 4
Commodity contracts—net	1		1		—		—		2	Note 4
Liabilities
Short-term borrowings	4,774		4,774		3,988		3,988		1
Long-term debt (including amounts due within one year)
Machinery and Power Systems	8,966		10,566		8,973		10,737		2
Financial Products	22,213		23,265		21,631		22,674		1 & 2
Foreign currency contracts—net	51		51		89		89		2	Note 4
Commodity contracts—net	—		—		7		7		2	Note 4
Guarantees	7		7		7		7		3	Note 10

(1) Total excluded items have a net carrying value at March 31, 2012 and December 31, 2011 of $7,452 million and $7,324 million, respectively.