Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

Assets and liabilities measured at fair value

(Millions of dollars)	September 30, 2011
	Level 1	Level 2	Level 3	Total Assets / Liabilities, at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$10	$—	$—	$10
Other U.S. and non-U.S. government bonds	—	74	—	74
Corporate bonds
Corporate bonds	—	556	—	556
Asset-backed securities	—	116	—	116
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—	290	—	290
Residential mortgage-backed securities	—	32	—	32
Commercial mortgage-backed securities	—	157	—	157
Equity securities
Large capitalization value	122	—	—	122
Smaller company growth	27	—	—	27
Total available-for-sale securities	159	1,225	—	1,384
Derivative financial instruments, net	—	261	—	261
Total Assets	$159	$1,486	$—	$1,645
Liabilities
Guarantees	$—	$—	$7	$7
Total Liabilities	$—	$—	$7	$7

(Millions of dollars)	December 31, 2010
	Level 1	Level 2	Level 3	TotalAssets / Liabilities,at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$12	$—	$—	$12
Other U.S. and non-U.S. government bonds	—	77	—	77
Corporate bonds
Corporate bonds	—	511	—	511
Asset-backed securities	—	136	—	136
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—	273	—	273
Residential mortgage-backed securities	—	40	—	40
Commercial mortgage-backed securities	—	168	—	168
Equity securities
Large capitalization value	122	—	—	122
Smaller company growth	31	—	—	31
Total available-for-sale securities	165	1,205	—	1,370
Derivative financial instruments, net	—	267	—	267
Total Assets	$165	$1,472	$—	$1,637
Liabilities
Guarantees	$—	$—	$10	$10
Total Liabilities	$—	$—	$10	$10

Roll-forwards of assets and liabilities measured at fair value using Level 3 inputs

(Millions of dollars)	Securitized RetainedInterests	Guarantees
Balance at December 31, 2010	$—	$10
Issuance of guarantees	—	2
Expiration of guarantees	—	(5)
Balance at September 30, 2011	$—	$7
Balance at December 31, 2009	$102	$17
Adjustment to adopt accounting for variable-interest entities	(102)	—
Issuance of guarantees	—	6
Expiration of guarantees	—	(6)
Balance at September 30, 2010	$—	$17

Fair Values of Financial Instruments

Fair Values of Financial Instruments
	September 30,		December 31,
	2011		2010
(Millions of dollars)	CarryingAmount	FairValue	CarryingAmount	FairValue	Reference
Assets
Cash and short-term investments	$3,229	$3,229	$3,592	$3,592
Restricted cash and short-term investments	10	10	91	91
Available-for-sale securities	1,384	1,384	1,370	1,370	Note 8
Finance receivables—net (excluding finance leases1)	12,452	12,283	12,568	12,480	Note 15
Wholesale inventory receivables—net (excluding finance leases1)	1,377	1,300	1,062	1,017	Note 15
Foreign currency contracts—net	14	14	63	63	Note 4
Interest rate swaps—net	261	261	187	187	Note 4
Commodity contracts—net	—	—	17	17	Note 4
Liabilities
Short-term borrowings	3,914	3,914	4,056	4,056
Long-term debt (including amounts due within one year)
Machinery and Power Systems	8,975	10,743	5,000	5,968
Financial Products	21,400	22,434	19,362	20,364
Commodity contracts—net	14	14	—	—	Note 4
Guarantees	7	7	10	10	Note 10
1Total excluded items have a net carrying value at September 30, 2011 and December 31, 2010 of $7,304 million and $7,292 million, respectively.