XML 35 R14.htm IDEA: XBRL DOCUMENT v3.22.2.2
Investments in Debt and Equity Securities
 9 Months Ended
Sep. 30, 2022
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, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position.

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 the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. 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 the Consolidated Statement of Results of Operations.

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows:
Available-for-sale debt securities
September 30, 2022December 31, 2021
(Millions of dollars)
Cost
Basis
Unrealized Pretax Net Gains
(Losses)
Fair
Value
Cost
Basis
Unrealized Pretax Net Gains
(Losses)
Fair
Value
Government debt securities      
U.S. treasury bonds$10 $— $10 $10 $— $10 
Other U.S. and non-U.S. government bonds51 (2)49 61 — 61 
Corporate debt securities     
Corporate bonds and other debt securities2,156 (108)2,048 1,027 19 1,046 
Asset-backed securities185 (5)180 175 1 176 
Mortgage-backed debt securities  
U.S. governmental agency384 (36)348 319 6 325 
Residential3 — 3 4 — 4 
Commercial139 (10)129 98 1 99 
Total available-for-sale debt securities$2,928 $(161)$2,767 $1,694 $27 $1,721 
Available-for-sale debt securities in an unrealized loss position:
 September 30, 2022
 
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
Government debt securities      
Other U.S. and non-U.S. government bonds$31 $1 $15 $1 $46 $2 
Corporate debt securities
Corporate bonds1,774 75 218 33 1,992 108 
Asset-backed securities102 4 35 1 137 5 
Mortgage-backed debt securities
U.S. governmental agency293 27 51 9 344 36 
Commercial88 7 41 3 129 10 
$2,288 $114 $360 $47 $2,648 $161 
 December 31, 2021
 
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 debt securities      
Corporate bonds$270 $4 $33 $1 $303 $5 
Mortgage-backed debt securities      
U.S. governmental agency89 1 22 — 111 1 
Total$359 $5 $55 $1 $414 $6 
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.
The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt 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 respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2022.
The cost basis and fair value of available-for-sale debt securities at September 30, 2022, 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.        
September 30, 2022
(Millions of dollars)Cost BasisFair Value
Due in one year or less$696 $687 
Due after one year through five years1,354 1,277 
Due after five years through ten years282 256 
Due after ten years70 67 
U.S. governmental agency mortgage-backed securities384 348 
Residential mortgage-backed securities3 3 
Commercial mortgage-backed securities139 129 
Total debt securities – available-for-sale$2,928 $2,767 
  
Sales of available-for-sale debt securities:  
 Three Months Ended September 30Nine Months Ended September 30
(Millions of dollars)2022202120222021
Proceeds from the sale of available-for-sale securities$204 $97 $474 $322 
Gross gains from the sale of available-for-sale securities— 1 1 3 
Gross losses from the sale of available-for-sale securities— — 1 — 
We did not have any investments classified as held-to-maturity debt securities as of September 30, 2022. 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 the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value.
For the three months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(12) million and $46 million, respectively. For the nine months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(97) million and $65 million, respectively.