FINANCIAL INSTRUMENTS

A summary of the Company's financial instruments, risk management policies, derivative instruments and hedging activities can be found in Note 10 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. If applicable, updates have been included in the respective section below.

The following table summarizes the fair value of financial instruments at March 31, 2014 and December 31, 2013:



Fair Value of Financial Instruments
	At March 31, 2014											At December 31, 2013
In millions	Cost			Gain		Loss			Fair Value			Cost			Gain		Loss			Fair Value
Marketable securities: (1)
Debt securities:
Government debt (2)	$	534		$	29	$	(4	)	$	559		$	544		$	28	$	(8	)	$	564
Corporate bonds	655			46		(3		)	698			659			43		(7		)	695
Total debt securities	$	1,189		$	75	$	(7	)	$	1,257		$	1,203		$	71	$	(15	)	$	1,259
Equity securities	661			169		(7		)	823			605			196		(4		)	797
Total marketable securities	$	1,850		$	244	$	(14	)	$	2,080		$	1,808		$	267	$	(19	)	$	2,056
Long-term debt including debt due within one year (3)	$	(17,287	)	$	170	$	(2,232	)	$	(19,349	)	$	(17,517	)	$	296	$	(2,246	)	$	(19,467	)
Derivatives relating to:
Interest rates	$	—		$	—	$	(6	)	$	(6	)	$	—		$	—	$	(5	)	$	(5	)
Commodities (4)	$	—		$	13	$	(5	)	$	8		$	—		$	11	$	(2	)	$	9
Foreign currency	$	—		$	13	$	(29	)	$	(16	)	$	—		$	45	$	(13	)	$	32


(1)	Included in “Other investments” in the consolidated balance sheets.


(2)	U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.


(3)	The cost basis includes fair value hedge adjustments of $22 million at March 31, 2014 and $22 million at December 31, 2013.


(4)	Presented net of cash collateral, as disclosed in Note 7.

Investments

The Company’s investments in marketable securities are primarily classified as available-for-sale.



Investing Results	Three Months Ended
In millions	Mar 31, 2014			Mar 31, 2013
Proceeds from sales of available-for-sale securities	$	208		$	214
Gross realized gains	$	46		$	36
Gross realized losses	$	(1	)	$	(9	)

The following table summarizes the contractual maturities of the Company’s investments in debt securities:



Contractual Maturities of Debt Securities at March 31, 2014
In millions	Amortized Cost		Fair Value
Within one year	$	10	$	10
One to five years	601		635
Six to ten years	451		464
After ten years	127		148
Total	$	1,189	$	1,257

At March 31, 2014, the Company had $1,250 million ($1,581 million at December 31, 2013) of held-to-maturity securities (primarily Treasury Bills) classified as cash equivalents, as these securities had original maturities of three months or less at the time of purchase. The Company’s investments in held-to-maturity securities are held at amortized cost, which approximates fair value. At March 31, 2014, the Company had investments in money market funds of $384 million classified as cash equivalents ($1,331 million at December 31, 2013).

The aggregate cost of the Company’s cost method investments totaled $177 million at March 31, 2014 ($185 million at December 31, 2013). Due to the nature of these investments, either the cost basis approximates fair value or fair value is not readily determinable. These investments are reviewed quarterly for impairment indicators. The Company's impairment analysis resulted in a $5 million reduction in the cost basis of these investments for the three-month period ended March 31, 2014 (no reduction in the three-month period ended March 31, 2013).

Accounting for Derivative Instruments and Hedging Activities

The following table provides the fair value and gross balance sheet classification of derivative instruments at March 31, 2014 and December 31, 2013:



Fair Value of Derivative Instruments In millions	Balance Sheet Classification	Mar 31, 2014		Dec 31, 2013
Asset Derivatives
Derivatives designated as hedges:
Commodities	Other current assets	$	21	$	13
Total derivatives designated as hedges		$	21	$	13
Derivatives not designated as hedges:
Commodities	Other current assets	$	1	$	1
Foreign currency	Accounts and notes receivable – Other	27		65
Total derivatives not designated as hedges		$	28	$	66
Total asset derivatives		$	49	$	79
Liability Derivatives
Derivatives designated as hedges:
Interest rates	Accounts payable – Other	$	6	$	5
Commodities	Accounts payable – Other	14		5
Foreign currency	Accounts payable – Other	4		9
Total derivatives designated as hedges		$	24	$	19
Derivatives not designated as hedges:
Commodities	Accounts payable – Other	$	1	$	1
Foreign currency	Accounts payable – Other	39		24
Total derivatives not designated as hedges		$	40	$	25
Total liability derivatives		$	64	$	44

Foreign currency derivatives not designated as hedges are used to offset foreign exchange gains/losses resulting from the underlying exposures of foreign currency denominated assets and liabilities.

The net after-tax amounts to be reclassified from "Accumulated other comprehensive income (loss)" to income within the next 12 months are a $4 million loss for interest rate contracts, a $7 million gain for commodity contracts and a $6 million loss for foreign currency contracts.