Fair value disclosures (Tables)

12 Months Ended

Dec. 31, 2018

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, 2018 and 2017 are summarized below:



	December 31, 2018
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		42		—		—		42

Corporate bonds
Corporate bonds	—		720		—		—		720
Asset-backed securities	—		63		—		—		63

Mortgage-backed debt securities
U.S. governmental agency	—		297		—		—		297
Residential	—		7		—		—		7
Commercial	—		13		—		—		13
Total debt securities	9		1,142		—		—		1,151
Equity securities
Large capitalization value	260		—		—		—		260
Smaller company growth	46		—		—		—		46
REIT	—		—		—		119		119
Total equity securities	306		—		—		119		425

Total Assets	$	315	$	1,142	$	—	$	119	$	1,576

Liabilities
Derivative financial instruments, net	$	—	$	19	$	—	$	—	$	19
Total Liabilities	$	—	$	19	$	—	$	—	$	19



	December 31, 2017
(Millions of dollars)	Level 1		Level 2		Level 3		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt
U.S. treasury bonds	$	10	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		42		—		42

Corporate bonds
Corporate bonds	—		584		—		584
Asset-backed securities	—		67		—		67

Mortgage-backed debt securities
U.S. governmental agency	—		261		—		261
Residential	—		8		—		8
Commercial	—		17		—		17
Total debt securities	10		979		—		989
Equity securities
Large capitalization value	284		—		—		284
Smaller company growth	56		—		—		56
REIT	—		—		110		110
Total equity securities	340		—		110		450
Total Assets	$	350	$	979	$	110	$	1,439

Liabilities
Derivative financial instruments, net	$	—	$	19	$	—	$	19
Total Liabilities	$	—	$	19	$	—	$	19

Roll-forward of REIT investments

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
	2018				2017
(Millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets at December 31,
Cash and short-term investments	$	7,857	$	7,857	$	8,261	$	8,261	1	Statement 3
Restricted cash and short-term investments	33		33		194		194		1	Statement 3
Investments in debt and equity securities	1,576		1,576		1,439		1,439		1, 2 & 3	Notes 11 & 19
Finance receivables–net (excluding finance leases ¹)	14,714		14,798		15,452		15,438		3	Notes 7 & 19
Wholesale inventory receivables–net (excluding finance leases ¹)	1,050		1,025		1,153		1,123		3	Notes 7 & 19
Foreign currency contracts–net	47		47		—		—		2	Notes 4 & 19
Interest rate swaps–net	—		—		1		1		2	Notes 4 & 19
Commodity contracts–net	—		—		21		21		2	Notes 4 & 19

Liabilities at December 31,
Short-term borrowings	5,723		5,723		4,837		4,837		1	Note 13
Long-term debt (including amounts due within one year):
Machinery, Energy & Transportation	8,015		9,046		7,935		9,863		2	Note 14
Financial Products	22,815		22,684		22,106		22,230		2	Note 14
Foreign currency contracts–net	—		—		41		41		2	Notes 4 & 19
Interest rate swaps–net	36		36		—		—		2	Notes 4 & 19
Commodity contracts–net	30		30		—		—		2	Notes 4 & 19
Guarantees	8		8		8		8		3	Note 21


¹	Total excluded items have a net carrying value at December 31, 2018 and 2017 of $7,463 million and $7,063 million, respectively.