Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2020

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 September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
(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	$	16	$	—	$	—	$	—	$	16
Other U.S. and non-U.S. government bonds	—		51		—		—		51
Corporate bonds
Corporate bonds	—		1,001		—		—		1,001
Asset-backed securities	—		158		—		—		158
Mortgage-backed debt securities
U.S. governmental agency	—		364		—		—		364
Residential	—		5		—		—		5
Commercial	—		65		—		—		65
Total debt securities	16		1,644		—		—		1,660
Equity securities
Large capitalization value	173		—		—		—		173
Smaller company growth	32		—		—		—		32
REIT	—		—		—		139		139
Total equity securities	205		—		—		139		344

Derivative financial instruments, net	—		82		—		—		82
Total assets	$	221	$	1,726	$	—	$	139	$	2,086


	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

Fair values of financial instruments

Fair values of our financial instruments were as follows:


	Fair Value of Financial Instruments
	September 30, 2020				December 31, 2019
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Cash and short-term investments	$	9,315	$	9,315	$	8,284	$	8,284	1
Restricted cash and short-term investments	4		4		8		8		1
Investments in debt and equity securities	2,004		2,004		1,711		1,711		1, 2 & 3	Note 8
Finance receivables – net (excluding finance leases 1)	13,817		14,145		14,473		14,613		3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	1,000		975		1,105		1,076		3
Foreign currency contracts – net	27		27		62		62		2	Note 5
Interest rate contracts – net	52		52		—		—		2	Note 5
Commodity contracts – net	3		3		3		3		2	Note 5

Liabilities
Short-term borrowings	2,660		2,660		5,166		5,166		1
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	11,139		14,200		9,157		11,216		2
Financial Products	24,327		24,982		23,334		23,655		2

Interest rate contracts – net	—		—		20		20		2	Note 5

Guarantees	5		5		5		5		3	Note 11

1 Represents finance leases and failed sales leasebacks of $7,644 million and $7,800 million at September 30, 2020 and December 31, 2019, respectively.