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, 2014. If applicable, updates have been included in the respective section below.

The following table summarizes the fair value of financial instruments at March 31, 2015 and December 31, 2014:



Fair Value of Financial Instruments
	At March 31, 2015											At December 31, 2014
In millions	Cost			Gain		Loss			Fair Value			Cost			Gain		Loss			Fair Value
Marketable securities: (1)
Debt securities:
Government debt (2)	$	517		$	31	$	—		$	548		$	559		$	26	$	(1	)	$	584
Corporate bonds	677			54		(1		)	730			654			45		(2		)	697
Total debt securities	$	1,194		$	85	$	(1	)	$	1,278		$	1,213		$	71	$	(3	)	$	1,281
Equity securities	557			164		(19		)	702			566			177		(15		)	728
Total marketable securities	$	1,751		$	249	$	(20	)	$	1,980		$	1,779		$	248	$	(18	)	$	2,009
Long-term debt including debt due within one year (3)	$	(19,307	)	$	3	$	(2,606	)	$	(21,910	)	$	(19,232	)	$	100	$	(2,318	)	$	(21,450	)
Derivatives relating to:
Interest rates	$	—		$	—	$	(12	)	$	(12	)	$	—		$	—	$	(12	)	$	(12	)
Commodities (4)	$	—		$	5	$	(164	)	$	(159	)	$	—		$	3	$	(81	)	$	(78	)
Foreign currency	$	—		$	23	$	(139	)	$	(116	)	$	—		$	26	$	(71	)	$	(45	)


(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)	Cost includes fair value hedge adjustments of $20 million at March 31, 2015 and $21 million at December 31, 2014.


(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. The following table provides the investing results from available-for-sale securities for the three-month periods ended March 31, 2015 and March 31, 2014:



Investing Results	Three Months Ended
In millions	Mar 31, 2015			Mar 31, 2014
Proceeds from sales of available-for-sale securities	$	114		$	208
Gross realized gains	$	23		$	46
Gross realized losses	$	(1	)	$	(1	)

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



Contractual Maturities of Debt Securities at March 31, 2015
In millions	Amortized Cost		Fair Value
Within one year	$	17	$	17
One to five years	468		491
Six to ten years	511		542
After ten years	198		228
Total	$	1,194	$	1,278

At March 31, 2015, the Company had $2,102 million ($1,050 million at December 31, 2014) of held-to-maturity securities (primarily Treasury Bills) classified as cash equivalents, as these securities had 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, 2015, the Company had investments in money market funds of $1,369 million classified as cash equivalents ($1,655 million at December 31, 2014).

The aggregate cost of the Company’s cost method investments totaled $190 million at March 31, 2015 ($181 million at December 31, 2014). Due to the nature of these investments, either the cost basis approximates fair market value or fair value is not readily determinable. These investments are reviewed quarterly for impairment indicators. The Company's impairment analysis resulted in no reduction in the cost basis of these investments for the three-month period ended March 31, 2015 ($5 million reduction in the three-month period ended March 31, 2014).

Accounting for Derivative Instruments and Hedging Activities

Fair Value Hedges

For interest rate swap instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current period income and reflected as “Interest expense and amortization of debt discount” in the consolidated statements of income. The short-cut method is used when the criteria are met. At March 31, 2015, the Company had an interest rate swap with a notional amount of $100 million (zero at December 31, 2014) designated as a fair value hedge of underlying fixed rate debt obligations with a maturity date of May 2019. The fair value adjustments resulting from this swap were a gain on the derivative of less than $1 million at March 31, 2015 (zero at December 31, 2014).

The following table provides the fair value and gross balance sheet classification of derivative instruments at March 31, 2015 and December 31, 2014:



Fair Value of Derivative Instruments In millions	Balance Sheet Classification	Mar 31, 2015		Dec 31, 2014
Asset Derivatives
Derivatives designated as hedges:
Commodities	Other current assets	$	2	$	4
Foreign currency	Accounts and notes receivable – Other	48		25
Total derivatives designated as hedges		$	50	$	29
Derivatives not designated as hedges:
Commodities	Other current assets	$	4	$	2
Foreign currency	Accounts and notes receivable – Other	64		91
Total derivatives not designated as hedges		$	68	$	93
Total asset derivatives		$	118	$	122
Liability Derivatives
Derivatives designated as hedges:
Interest rates	Accounts payable – Other	$	12	$	12
Commodities	Accounts payable – Other	165		106
Foreign currency	Accounts payable – Other	1		—
Total derivatives designated as hedges		$	178	$	118
Derivatives not designated as hedges:
Commodities	Accounts payable – Other	$	2	$	2
Foreign currency	Accounts payable – Other	227		161
Total derivatives not designated as hedges		$	229	$	163
Total liability derivatives		$	407	$	281

Foreign currency derivatives not designated as hedges are used to offset foreign exchange gains or 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 loss" to income within the next 12 months are a $4 million loss for interest rate contracts, a $37 million loss for commodity contracts and a $61 million gain for foreign currency contracts.