Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Assets and liabilities measured on a recurring basis at fair value

Assets and liabilities measured on a recurring basis at fair value, primarily related to Financial Products, included in our Consolidated Statement of Financial Position as of March 31, 2014 and December 31, 2013 are summarized below:

(Millions of dollars)	March 31, 2014
	Level 1		Level 2		Level 3		Total Assets / 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	—		118		—		118
Corporate bonds
Corporate bonds	—		651		—		651
Asset-backed securities	—		77		—		77
Mortgage-backed debt securities
U.S. governmental agency	—		326		—		326
Residential	—		18		—		18
Commercial	—		76		—		76
Equity securities
Large capitalization value	238		—		—		238
Smaller company growth	48		—		—		48
Total available-for-sale securities	296		1,266		—		1,562
Derivative financial instruments, net	—		97		—		97
Total Assets	$	296	$	1,363	$	—	$	1,659
Liabilities
Guarantees	$	—	$	—	$	13	$	13
Total Liabilities	$	—	$	—	$	13	$	13

(Millions of dollars)	December 31, 2013
	Level 1		Level 2		Level 3		Total Assets / 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	—		120		—		120
Corporate bonds
Corporate bonds	—		633		—		633
Asset-backed securities	—		72		—		72
Mortgage-backed debt securities
U.S. governmental agency	—		321		—		321
Residential	—		18		—		18
Commercial	—		93		—		93
Equity securities
Large capitalization value	254		—		—		254
Smaller company growth	49		—		—		49
Total available-for-sale securities	313		1,257		—		1,570
Derivative financial instruments, net	—		161		—		161
Total Assets	$	313	$	1,418	$	—	$	1,731
Liabilities
Guarantees	$	—	$	—	$	13	$	13
Total Liabilities	$	—	$	—	$	13	$	13

Roll-forward of liabilities measured at fair value using Level 3 inputs

Below are roll-forwards of liabilities measured at fair value using Level 3 inputs for the three months ended March 31, 2014 and 2013.  These instruments were valued using pricing models that, in management’s judgment, reflect the assumptions of a marketplace participant.

(Millions of dollars)	Guarantees
Balance at December 31, 2013	$	13
Issuance of guarantees	—
Expiration of guarantees	—
Balance at March 31, 2014	$	13
Balance at December 31, 2012	$	14
Issuance of guarantees	5
Expiration of guarantees	(3		)
Balance at March 31, 2013	$	16

Fair values of financial instruments

Please refer to the table below for the fair values of our financial instruments.

	Fair Value of Financial Instruments
	March 31, 2014				December 31, 2013
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Cash and short-term investments	$	5,345	$	5,345	$	6,081	$	6,081	1
Restricted cash and short-term investments	86		86		53		53		1
Available-for-sale securities	1,562		1,562		1,570		1,570		1 & 2	Note 8
Finance receivables – net (excluding finance leases 1)	16,394		16,113		16,049		15,913		2	Note 16
Wholesale inventory receivables – net (excluding finance leases 1)	1,428		1,361		1,529		1,467		2	Note 16
Foreign currency contracts – net	34		34		45		45		2	Note 4
Interest rate swaps – net	64		64		116		116		2	Note 4
Liabilities
Short-term borrowings	4,515		4,515		3,679		3,679		1
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	8,757		10,136		8,759		9,905		2
Financial Products	24,819		25,399		25,312		25,849		2
Commodity contracts – net	1		1		—		—		2	Note 4
Guarantees	13		13		13		13		3	Note 10

¹  Total excluded items have a net carrying value at March 31, 2014 and December 31, 2013 of $8,093 million and $8,053 million, respectively.