Fair value disclosures (Tables)

12 Months Ended

Dec. 31, 2019

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 Statement 3 as of December 31, 2019 and 2018 are summarized below:



	December 31, 2019
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		54		—		—		54

Corporate bonds
Corporate bonds	—		856		—		—		856
Asset-backed securities	—		62		—		—		62

Mortgage-backed debt securities
U.S. governmental agency	—		331		—		—		331
Residential	—		6		—		—		6
Commercial	—		47		—		—		47
Total debt securities	9		1,356		—		—		1,365
Equity securities
Large capitalization value	187		—		—		—		187
Smaller company growth	29		—		4		—		33
REIT	—		—		—		126		126
Total equity securities	216		—		4		126		346

Derivative financial instruments, net	—		45		—		—		45
Total Assets	$	225	$	1,401	$	4	$	126	$	1,756



	December 31, 2018
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		42		—		—		42

Corporate bonds
Corporate bonds	—		720		—		—		720
Asset-backed securities	—		63		—		—		63

Mortgage-backed debt securities
U.S. governmental agency	—		297		—		—		297
Residential	—		7		—		—		7
Commercial	—		13		—		—		13
Total debt securities	9		1,142		—		—		1,151
Equity securities
Large capitalization value	260		—		—		—		260
Smaller company growth	46		—		—		—		46
REIT	—		—		—		119		119
Total equity securities	306		—		—		119		425
Total Assets	$	315	$	1,142	$	—	$	119	$	1,576

Liabilities
Derivative financial instruments, net	$	—	$	19	$	—	$	—	$	19
Total Liabilities	$	—	$	19	$	—	$	—	$	19

Fair values of financial instruments

Fair values of our financial instruments were as follows:



TABLE III—Fair Values of Financial Instruments
	2019				2018
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets at December 31,
Cash and short-term investments	$	8,284	$	8,284	$	7,857	$	7,857	1	Statement 3
Restricted cash and short-term investments	8		8		33		33		1	Statement 3
Investments in debt and equity securities	1,711		1,711		1,576		1,576		1, 2 & 3	Notes 11 & 19
Finance receivables–net (excluding finance leases ¹)	14,473		14,613		14,714		14,798		3	Notes 7 & 19
Wholesale inventory receivables–net (excluding finance leases ¹)	1,105		1,076		1,050		1,025		3	Notes 7 & 19
Foreign currency contracts–net	62		62		47		47		2	Notes 4 & 19
Commodity contracts–net	3		3		—		—		2	Notes 4 & 19

Liabilities at December 31,
Short-term borrowings	5,166		5,166		5,723		5,723		1	Note 13
Long-term debt (including amounts due within one year):
Machinery, Energy & Transportation	9,157		11,216		8,015		9,046		2	Note 14
Financial Products	23,334		23,655		22,815		22,684		2	Note 14
Interest rate swaps–net	20		20		36		36		2	Notes 4 & 19
Commodity contracts–net	—		—		30		30		2	Notes 4 & 19
Guarantees	5		5		8		8		3	Note 21


¹	Represents finance leases and failed sale leasebacks of $7,800 million at December 31, 2019 and finance leases of $7,463 million at December 31, 2018, respectively.