Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Assets and liabilities measured at fair value

(Millions of dollars)	June 30, 2011
	Level 1	Level 2	Level 3	TotalAssets / 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	—	78	—	78
Corporate bonds
Corporate bonds	—	533	—	533
Asset-backed securities	—	121	—	121
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—	279	—	279
Residential mortgage-backed securities	—	35	—	35
Commercial mortgage-backed securities	—	166	—	166
Equity securities
Large capitalization value	146	—	—	146
Smaller company growth	33	—	—	33
Total available-for-sale securities	189	1,212	—	1,401
Derivative financial instruments, net	—	259	—	259
Total Assets	$189	$1,471	$—	$1,660
Liabilities
Guarantees	$—	$—	$7	$7
Total Liabilities	$—	$—	$7	$7

(Millions of dollars)	December 31, 2010
	Level 1	Level 2	Level 3	TotalAssets / Liabilities,at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$12	$—	$—	$12
Other U.S. and non-U.S. government bonds	—	77	—	77
Corporate bonds
Corporate bonds	—	511	—	511
Asset-backed securities	—	136	—	136
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—	273	—	273
Residential mortgage-backed securities	—	40	—	40
Commercial mortgage-backed securities	—	168	—	168
Equity securities
Large capitalization value	122	—	—	122
Smaller company growth	31	—	—	31
Total available-for-sale securities	165	1,205	—	1,370
Derivative financial instruments, net	—	267	—	267
Total Assets	$165	$1,472	$—	$1,637
Liabilities
Guarantees	$—	$—	$10	$10
Total Liabilities	$—	$—	$10	$10

Roll-forwards of assets and liabilities measured at fair value using Level 3 inputs

(Millions of dollars)	Securitized RetainedInterests	Guarantees
Balance at December 31, 2010	$—	$10
Issuance of guarantees	—	1
Expiration of guarantees	—	(4)
Balance at June 30, 2011	$—	$7
Balance at December 31, 2009	$102	$17
Adjustment to adopt accounting for variable-interest entities	(102)	—
Issuance of guarantees	—	4
Expiration of guarantees	—	(4)
Balance at June 30, 2010	$—	$17

Fair Values of Financial Instruments

Fair Values of Financial Instruments

	June 30,		December 31,
	2011		2010
(Millions of dollars)	CarryingAmount	FairValue	CarryingAmount	FairValue	Reference
Assets
Cash and short-term investments	$10,715	$10,715	$3,592	$3,592
Restricted cash and short-term investments	11	11	91	91
Available-for-sale securities	1,401	1,401	1,370	1,370	Note 8
Finance receivables—net (excluding finance leases1)	12,873	12,771	12,568	12,480
Wholesale inventory receivables—net (excluding finance leases1)	1,237	1,177	1,062	1,017
Foreign currency contracts—net	55	55	63	63	Note 4
Interest rate swaps—net	195	195	187	187	Note 4
Commodity contracts—net	9	9	17	17	Note 4
Liabilities
Short-term borrowings	4,368	4,368	4,056	4,056
Long-term debt (including amounts due within one year)
Machinery and Power Systems	9,110	10,075	5,000	5,968
Financial Products	20,904	21,919	19,362	20,364
Guarantees	7	7	10	10	Note 10

1Total excluded items have a net carrying value at June 30, 2011 and December 31, 2010 of $7,644 million and $7,292 million, respectively.