Available-For-Sale Securities

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Available-For-Sale Securities

Available-for-sale securities

We have investments in certain debt and equity securities, primarily at Insurance Services, that have been classified as available-for-sale and recorded at fair value based upon quoted market prices. These investments are primarily included in Other assets in the Consolidated Statement of Financial Position. Unrealized gains and losses arising from the revaluation of available-for-sale securities are included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position).  Realized gains and losses on sales of investments are generally determined using the specific identification method for debt and equity securities and are included in Other income (expense) in the Consolidated Statement of Results of Operations.

	March 31, 2015						December 31, 2014
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt
U.S. treasury bonds	$	10	$	—	$	10	$	10	$	—	$	10
Other U.S. and non-U.S. government bonds	97		1		98		94		—		94
Corporate bonds
Corporate bonds	642		20		662		677		16		693
Asset-backed securities	101		2		103		103		2		105
Mortgage-backed debt securities
U.S. governmental agency	277		4		281		292		2		294
Residential	14		—		14		15		—		15
Commercial	60		4		64		63		4		67
Equity securities
Large capitalization value	169		87		256		150		83		233
Smaller company growth	23		24		47		17		26		43
Total	$	1,393	$	142	$	1,535	$	1,421	$	133	$	1,554

Investments in an unrealized loss position that are not other-than-temporarily impaired:
	March 31, 2015
	Less than 12 months1				12 months or more1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed debt securities
U.S. governmental agency	$	16	$	—	$	111	$	2	$	127	$	2
Equity securities
Large capitalization value	31		3		—		—		31		3
Total	$	47	$	3	$	111	$	2	$	158	$	5

	December 31, 2014
	Less than 12 months1				12 months or more1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate bonds
Corporate bonds	$	195	$	1	$	32	$	—	$	227	$	1
Mortgage-backed debt securities
U.S. governmental agency	34		—		140		3		174		3
Equity securities
Large capitalization value	15		2		1		—		16		2
Total	$	244	$	3	$	173	$	3	$	417	$	6

¹  Indicates length of time that individual securities have been in a continuous unrealized loss position.

Mortgage-Backed Debt Securities.  The unrealized losses on our investments in mortgage-backed securities relate to changes in interest rates and credit-related yield spreads since time of purchase.  We do not intend to sell the investments and it is not likely that we will be required to sell these investments before recovery of their amortized cost basis.  We do not consider these investments to be other-than-temporarily impaired as of March 31, 2015.

Equity Securities.  Insurance Services maintains a well-diversified equity portfolio consisting of two specific mandates:  large capitalization value stocks and smaller company growth stocks. The unrealized losses on our investments in equity securities relate to inherent risks of individual holdings and/or their respective sectors. U.S. equity valuations were higher on average during the first quarter of 2015 on generally favorable economic data.  We do not consider these investments to be other-than-temporarily impaired as of March 31, 2015.

The cost basis and fair value of the available-for-sale debt securities at March 31, 2015, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.

	March 31, 2015
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	58	$	58
Due after one year through five years	723		743
Due after five years through ten years	39		41
Due after ten years	30		31
U.S. governmental agency mortgage-backed securities	277		281
Residential mortgage-backed securities	14		14
Commercial mortgage-backed securities	60		64
Total debt securities – available-for-sale	$	1,201	$	1,232

Sales of Securities:
	Three Months Ended March 31,
(Millions of dollars)	2015		2014
Proceeds from the sale of available-for-sale securities	$	83	$	115
Gross gains from the sale of available-for-sale securities	$	5	$	14
Gross losses from the sale of available-for-sale securities	$	1	$	—