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Investments in debt and equity securities
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Investments in debt and equity securities
Investments in debt and equity securities
 
We have investments in certain debt and equity securities, primarily at Insurance Services, that have been classified as available-for-sale and recorded at fair value. In addition, Insurance Services has an equity security investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment. These investments are primarily included in Other assets in Statement 3. Unrealized gains and losses arising from the revaluation of debt and equity securities are included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in Statement 3).  Realized gains and losses on sales of investments are generally determined using the specific identification method for debt and equity securities and are included in Other income (expense) in Statement 1.

The cost basis and fair value of debt and equity securities were as follows:
 
 
 
December 31, 2016
 
December 31, 2015
(Millions of dollars)
 
Cost
Basis
 
Unrealized
Pretax Net
Gains
(Losses)
 
Fair
Value
 
Cost
Basis
 
Unrealized
Pretax Net
Gains
(Losses)
 
Fair
Value
Government debt
 
 

 
 

 
 

 
 

 
 

 
 

U.S. treasury bonds
 
$
9

 
$
—

 
$
9

 
$
9

 
$
—

 
$
9

Other U.S. and non-U.S. government bonds
 
60

 
—

 
60

 
71

 
1

 
72

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
489

 
3

 
492

 
701

 
7

 
708

Asset-backed securities
 
90

 
—

 
90

 
129

 
—

 
129

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 
 
 
 
 

 
 

 
 

 
 

U.S. governmental agency
 
225

 
(2
)
 
223

 
291

 
1

 
292

Residential
 
10

 
—

 
10

 
12

 
—

 
12

Commercial
 
36

 
—

 
36

 
59

 
2

 
61

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 

 
 

 
 

 
 

Large capitalization value
 
280

 
32

 
312

 
243

 
30

 
273

Real estate investment trust (REIT)
 
77

 
2

 
79

 
25

 
—

 
25

Smaller company growth
 
41

 
15

 
56

 
37

 
17

 
54

Total
 
$
1,317

 
$
50

 
$
1,367

 
$
1,577

 
$
58

 
$
1,635

 
 
 
 
 
 
 
 
 
 
 
 
 
  
Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired:
 
 
December 31, 2016
 
 
Less than 12 months 1
 
12 months or more 1
 
Total
(Millions of dollars)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
$
131

 
$
1

 
$
13

 
$
—

 
$
144

 
$
1

Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
167

 
2

 
11

 
—

 
178

 
2

Equity securities
 
 

 
 

 
 

 
 

 
 

 
 

Large capitalization value
 
68

 
6

 
11

 
2

 
79

 
8

Smaller company growth
 
10

 
1

 
3

 
1

 
13

 
2

Total
 
$
376

 
$
10

 
$
38

 
$
3

 
$
414

 
$
13

 
 
December 31, 2015
 
 
Less than 12 months 1
 
12 months or more 1
 
Total
(Millions of dollars)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
$
242

 
$
3

 
$
27

 
$
1

 
$
269

 
$
4

Asset-backed securities
 
84

 
1

 
10

 
1

 
94

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
135

 
1

 
57

 
1

 
192

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
 
 

 
 

Large capitalization value
 
97

 
8

 
2

 
—

 
99

 
8

Smaller company growth
 
14

 
1

 
—

 
—

 
14

 
1

Total
 
$
572

 
$
14

 
$
96

 
$
3

 
$
668

 
$
17


1 
Indicates length of time that individual securities have been in a continuous unrealized loss position.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Corporate Bonds. The unrealized losses on our investments in corporate bonds relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

Mortgage-Backed Debt Securities.  The unrealized losses on our investments in mortgage-backed securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

Equity Securities.  The unrealized losses on our investments in equity securities relate to inherent risks of individual holdings and/or their respective sectors. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

The cost basis and fair value of the available-for-sale debt securities at December 31, 2016, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.
 
 
 
 
 
 
 
December 31, 2016
(Millions of dollars)
 
Cost Basis
 
Fair Value
Due in one year or less
 
$
188

 
$
189

Due after one year through five years
 
421

 
423

Due after five years through ten years
 
13

 
13

Due after ten years
 
26

 
26

U.S. governmental agency mortgage-backed securities
 
225

 
223

Residential mortgage-backed securities
 
10

 
10

Commercial mortgage-backed securities
 
36

 
36

Total debt securities – available-for-sale
 
$
919

 
$
920

 
 
 
 
 
  
 
 
 
 
 
 
 
Sales of Securities:
 
 
 
 
 
 
 
 
Years Ended December 31,
(Millions of dollars)
 
2016
 
2015
 
2014
Proceeds from the sale of available-for-sale securities
 
$
694

 
$
351

 
$
434

Gross gains from the sale of available-for-sale securities
 
$
55

 
$
64

 
$
38

Gross losses from the sale of available-for-sale securities
 
$
4

 
$
2

 
$
2

 
 
 
 
 
 
 
securities
 
We have investments in certain debt and equity securities, primarily at Insurance Services, that have been classified as available-for-sale and recorded at fair value. In addition, Insurance Services has an equity security investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment. These investments are primarily included in Other assets in Statement 3. Unrealized gains and losses arising from the revaluation of debt and equity securities are included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in Statement 3).  Realized gains and losses on sales of investments are generally determined using the specific identification method for debt and equity securities and are included in Other income (expense) in Statement 1.

The cost basis and fair value of debt and equity securities were as follows:
 
 
 
December 31, 2016
 
December 31, 2015
(Millions of dollars)
 
Cost
Basis
 
Unrealized
Pretax Net
Gains
(Losses)
 
Fair
Value
 
Cost
Basis
 
Unrealized
Pretax Net
Gains
(Losses)
 
Fair
Value
Government debt
 
 

 
 

 
 

 
 

 
 

 
 

U.S. treasury bonds
 
$
9

 
$
—

 
$
9

 
$
9

 
$
—

 
$
9

Other U.S. and non-U.S. government bonds
 
60

 
—

 
60

 
71

 
1

 
72

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
489

 
3

 
492

 
701

 
7

 
708

Asset-backed securities
 
90

 
—

 
90

 
129

 
—

 
129

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 
 
 
 
 

 
 

 
 

 
 

U.S. governmental agency
 
225

 
(2
)
 
223

 
291

 
1

 
292

Residential
 
10

 
—

 
10

 
12

 
—

 
12

Commercial
 
36

 
—

 
36

 
59

 
2

 
61

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 

 
 

 
 

 
 

Large capitalization value
 
280

 
32

 
312

 
243

 
30

 
273

Real estate investment trust (REIT)
 
77

 
2

 
79

 
25

 
—

 
25

Smaller company growth
 
41

 
15

 
56

 
37

 
17

 
54

Total
 
$
1,317

 
$
50

 
$
1,367

 
$
1,577

 
$
58

 
$
1,635

 
 
 
 
 
 
 
 
 
 
 
 
 
  
Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired:
 
 
December 31, 2016
 
 
Less than 12 months 1
 
12 months or more 1
 
Total
(Millions of dollars)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
$
131

 
$
1

 
$
13

 
$
—

 
$
144

 
$
1

Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
167

 
2

 
11

 
—

 
178

 
2

Equity securities
 
 

 
 

 
 

 
 

 
 

 
 

Large capitalization value
 
68

 
6

 
11

 
2

 
79

 
8

Smaller company growth
 
10

 
1

 
3

 
1

 
13

 
2

Total
 
$
376

 
$
10

 
$
38

 
$
3

 
$
414

 
$
13

 
 
December 31, 2015
 
 
Less than 12 months 1
 
12 months or more 1
 
Total
(Millions of dollars)
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
$
242

 
$
3

 
$
27

 
$
1

 
$
269

 
$
4

Asset-backed securities
 
84

 
1

 
10

 
1

 
94

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
135

 
1

 
57

 
1

 
192

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
 
 

 
 

Large capitalization value
 
97

 
8

 
2

 
—

 
99

 
8

Smaller company growth
 
14

 
1

 
—

 
—

 
14

 
1

Total
 
$
572

 
$
14

 
$
96

 
$
3

 
$
668

 
$
17


1 
Indicates length of time that individual securities have been in a continuous unrealized loss position.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Corporate Bonds. The unrealized losses on our investments in corporate bonds relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

Mortgage-Backed Debt Securities.  The unrealized losses on our investments in mortgage-backed securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

Equity Securities.  The unrealized losses on our investments in equity securities relate to inherent risks of individual holdings and/or their respective sectors. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2016.

The cost basis and fair value of the available-for-sale debt securities at December 31, 2016, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.
 
 
 
 
 
 
 
December 31, 2016
(Millions of dollars)
 
Cost Basis
 
Fair Value
Due in one year or less
 
$
188

 
$
189

Due after one year through five years
 
421

 
423

Due after five years through ten years
 
13

 
13

Due after ten years
 
26

 
26

U.S. governmental agency mortgage-backed securities
 
225

 
223

Residential mortgage-backed securities
 
10

 
10

Commercial mortgage-backed securities
 
36

 
36

Total debt securities – available-for-sale
 
$
919

 
$
920

 
 
 
 
 
  
 
 
 
 
 
 
 
Sales of Securities:
 
 
 
 
 
 
 
 
Years Ended December 31,
(Millions of dollars)
 
2016
 
2015
 
2014
Proceeds from the sale of available-for-sale securities
 
$
694

 
$
351

 
$
434

Gross gains from the sale of available-for-sale securities
 
$
55

 
$
64

 
$
38

Gross losses from the sale of available-for-sale securities
 
$
4

 
$
2

 
$
2