Fair value disclosures (Tables)

12 Months Ended

Dec. 31, 2016

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 Statement 3 as of December 31, 2016 and 2015 are summarized below:



	December 31, 2016
(Millions of dollars)	Level 1		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		60		—		60

Corporate bonds
Corporate bonds	—		492		—		492
Asset-backed securities	—		90		—		90

Mortgage-backed debt securities
U.S. governmental agency	—		223		—		223
Residential	—		10		—		10
Commercial	—		36		—		36

Equity securities
Large capitalization value	312		—		—		312
Smaller company growth	56		—		—		56
Total available-for-sale securities	377		911		—		1,288

REIT	—		—		79		79
Derivative financial instruments, net	—		—		—		—
Total Assets	$	377	$	911	$	79	$	1,367

Liabilities
Derivative financial instruments, net	$	—	$	72	$	—	$	72
Total Liabilities	$	—	$	72	$	—	$	72



	December 31, 2015
(Millions of dollars)	Level 1		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		72		—		72

Corporate bonds
Corporate bonds	—		708		—		708
Asset-backed securities	—		129		—		129

Mortgage-backed debt securities
U.S. governmental agency	—		292		—		292
Residential	—		12		—		12
Commercial	—		61		—		61

Equity securities
Large capitalization value	273		—		—		273
Smaller company growth	54		—		—		54
Total available-for-sale securities	336		1,274		—		1,610

REIT	—		—		25		25
Derivative financial instruments, net	—		49		—		49
Total Assets	$	336	$	1,323	$	25	$	1,684

Roll-forward of REIT investments

A roll-forward of our REIT investment for the year ended December 31, 2016 is as follows:



(Millions of dollars)
Balance at December 31, 2015	$	25
Purchases of securities	50
Sale of securities	—
Gains (losses) included in Accumulated other comprehensive income (loss)	4
Balance at December 31, 2016	$	79

Fair values of financial instruments

Please refer to the table below for the fair values of our financial instruments.



TABLE III—Fair Values of Financial Instruments
	2016				2015
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets at December 31,
Cash and short-term investments	$	7,168	$	7,168	$	6,460	$	6,460	1	Statement 3
Restricted cash and short-term investments	31		31		52		52		1	Statement 3
Investments in debt and equity securities	1,367		1,367		1,635		1,635		1, 2 & 3	Notes 11 & 19
Finance receivables–net (excluding finance leases ¹)	16,172		16,056		16,515		16,551		3	Notes 6 & 19
Wholesale inventory receivables–net (excluding finance leases ¹)	1,500		1,464		1,821		1,775		3	Notes 6 & 19
Foreign currency contracts–net	—		—		13		13		2	Notes 3 & 19
Interest rate swaps–net	3		3		48		48		2	Notes 3 & 19
Commodity contracts–net	10		10		—		—		2	Notes 3 & 19

Liabilities at December 31,
Short-term borrowings	7,303		7,303		6,967		6,967		1	Note 13
Long-term debt (including amounts due within one year):
Machinery, Energy & Transportation	8,943		10,348		9,477		10,691		2	Note 14
Financial Products	20,537		20,724		21,569		21,904		2	Note 14
Foreign currency contracts–net	85		85		—		—		2	Notes 3 & 19
Commodity contracts–net	—		—		12		12		2	Notes 3 & 19
Guarantees	8		8		12		12		3	Note 21


¹	Total excluded items have a net carrying value at December 31, 2016 and 2015 of $6,111 million and $6,452 million, respectively.