Investments in debt and equity securities

12 Months Ended

Dec. 31, 2021

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 we record at fair value and primarily include in Other assets in Statement 3.

We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in Statement 3). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in Statement 1. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in Statement 1.

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in Statement 3) were as follows:


	December 31, 2021						December 31, 2020
(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	$	10	$	—	$	10	$	10	$	—	$	10
Other U.S. and non-U.S. government bonds	61		—		61		58		1		59

Corporate bonds
Corporate bonds	1,027		19		1,046		962		50		1,012
Asset-backed securities	175		1		176		156		3		159

Mortgage-backed debt securities
U.S. governmental agency	319		6		325		362		12		374
Residential	4		—		4		5		—		5
Commercial	98		1		99		60		4		64
Total debt securities	$	1,694	$	27	$	1,721	$	1,613	$	70	$	1,683

As of December 31, 2021, the total unrealized losses for available-for-sale investments with net losses in AOCI was $6 million. As of December 31, 2020, there was no available-for-sale investments with net losses in AOCI.

The cost basis and fair value of available-for-sale debt securities at December 31, 2021, by contractual maturity, are 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, 2021
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	120	$	121
Due after one year through five years	750		763
Due after five years through ten years	332		337
Due after ten years	71		72
U.S. governmental agency mortgage-backed securities	319		325
Residential mortgage-backed securities	4		4
Commercial mortgage-backed securities	98		99
Total debt securities – available-for-sale	$	1,694	$	1,721



Sales of available-for-sale debt securities:
	Years Ended December 31,
(Millions of dollars)	2021		2020		2019
Proceeds from the sale of available-for-sale securities	$	454	$	290	$	260
Gross gains from the sale of available-for-sale securities	$	4	$	2	$	1
Gross losses from the sale of available-for-sale securities	$	—	$	1	$	1

In addition, we had $964 million of investments in time deposits classified as held-to-maturity debt securities as of December 31, 2021. All these investments mature within one year and we include them in Prepaid expenses and other current assets in Statement 3. We did not have any investments classified as held-to-maturity debt securities as of December 31, 2020. We record held-to-maturity debt securities at amortized cost, which approximates fair value. We did not have any unrealized gains or losses on these securities as of December 31, 2021 and 2020.

For the years ended December 31 2021 and 2020, the net unrealized gains (losses) for equity securities held at December 31, 2021 and 2020 were $105 million and $47 million, respectively.