Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017 and December 31, 2016 are summarized below:



	March 31, 2017
(Millions of dollars)	Level 1		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		58		—		58
Corporate bonds
Corporate bonds	—		482		—		482
Asset-backed securities	—		88		—		88
Mortgage-backed debt securities
U.S. governmental agency	—		212		—		212
Residential	—		9		—		9
Commercial	—		31		—		31
Equity securities
Large capitalization value	325		—		—		325
Smaller company growth	60		—		—		60
Total available-for-sale securities	394		880		—		1,274
REIT	—		—		88		88
Total Assets	$	394	$	880	$	88	$	1,362
Liabilities
Derivative financial instruments, net	—		21		—		21
Total Liabilities	$	—	$	21	$	—	$	21



	December 31, 2016
(Millions of dollars)	Level 1		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		60		—		60
Corporate bonds
Corporate bonds	—		492		—		492
Asset-backed securities	—		90		—		90
Mortgage-backed debt securities
U.S. governmental agency	—		223		—		223
Residential	—		10		—		10
Commercial	—		36		—		36
Equity securities
Large capitalization value	312		—		—		312
Smaller company growth	56		—		—		56
Total available-for-sale securities	377		911		—		1,288
REIT	—		—		79		79
Total Assets	$	377	$	911	$	79	$	1,367
Liabilities
Derivative financial instruments, net	$	—	$	72	$	—	$	72
Total Liabilities	$	—	$	72	$	—	$	72

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

The fair value of our REIT investment is measured based on NAV, which is considered a Level 3 input. A roll-forward for the three months ended March 31, 2017 of our REIT investment is as follows.



(Millions of dollars)	REIT
Balance at December 31, 2016	$	79
Purchases of securities	7
Sale of securities	—
Gains (losses) included in Accumulated other comprehensive income (loss)	2
Balance at March 31, 2017	$	88

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, 2017				December 31, 2016
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Cash and short-term investments	$	9,472	$	9,472	$	7,168	$	7,168	1
Restricted cash and short-term investments	63		63		31		31		1
Investments in debt and equity securities	1,362		1,362		1,367		1,367		1, 2 & 3	Note 8
Finance receivables – net (excluding finance leases ¹)	16,002		15,983		16,172		16,056		3	Note 16
Wholesale inventory receivables – net (excluding finance leases ¹)	1,424		1,391		1,500		1,464		3	Note 16
Interest rate contracts – net	2		2		3		3		2	Note 4
Commodity contracts – net	7		7		10		10		2	Note 4

Liabilities
Short-term borrowings	7,821		7,821		7,303		7,303		1
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,309		10,771		8,943		10,348		2
Financial Products	21,152		21,341		20,537		20,724		2
Foreign currency contracts – net	30		30		85		85		2	Note 4
Guarantees	8		8		8		8		3	Note 10


¹	Total excluded items have a net carrying value at March 31, 2017 and December 31, 2016 of $6,301 million and $6,111 million, respectively.