Investments in debt and equity securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments in debt and equity securities

We have investments in certain debt and equity securities, primarily at Insurance Services, which are recorded at fair value and are primarily included in Other assets in Statement 3.

Debt securities have been classified as available-for-sale, and the unrealized gains and losses arising from the revaluation of these debt securities are included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in Statement 3). The unrealized gains and losses arising from the revaluation of the equity securities are included in Other income (expense) in Statement 1. 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 securities with unrealized gains and losses included in equity (Accumulated other comprehensive income (loss) in Statement 3) were as follows:



	December 31, 2019						December 31, 2018
(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	54		—		54		42		—			42

Corporate bonds
Corporate bonds	836		20		856		735		(15		)	720
Asset-backed securities	62		—		62		63		—			63

Mortgage-backed debt securities
U.S. governmental agency	327		4		331		301		(4		)	297
Residential	6		—		6		7		—			7
Commercial	46		1		47		14		(1		)	13
Total debt securities	$	1,340	$	25	$	1,365	$	1,171	$	(20	)	$	1,151

As of December 31 2019 and 2018, the total unrealized loss for available -for-sale investments in an unrealized loss position that are not other-than-temporarily impaired was $1 million and $21 million, respectively.

The cost basis and fair value of the available-for-sale debt securities at December 31, 2019, 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, 2019
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	80	$	80
Due after one year through five years	701		715
Due after five years through ten years	148		153
Due after ten years	32		33
U.S. governmental agency mortgage-backed securities	327		331
Residential mortgage-backed securities	6		6
Commercial mortgage-backed securities	46		47
Total debt securities – available-for-sale	$	1,340	$	1,365




Sales of Securities:
	Years Ended December 31,
(Millions of dollars)	2019		¹	2018		¹	2017
Proceeds from the sale of available-for-sale securities	$	260		$	247		$	930
Gross gains from the sale of available-for-sale securities	$	1		$	—		$	109
Gross losses from the sale of available-for-sale securities	$	1		$	—		$	5

¹ Beginning January 1, 2018, equity securities are no longer classified as available-for-sale securities.

For the years ended December 31 2019 and 2018, the net unrealized gains (losses) for equity securities held at December 31, 2019 and 2018 were $29 million and $(25) million, respectively.