Fair value disclosures (Tables)

12 Months Ended

Dec. 31, 2011

Fair value disclosures

Assets and liabilities measured at fair value

	December 31, 2011
(Millions of dollars)	Level 1		Level 2		Level 3		TotalAssets / 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	—		92		—		92
Corporate bonds
Corporate bonds	—		572		—		572
Asset-backed securities	—		111		—		111
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—		310		—		310
Residential mortgage-backed securities	—		30		—		30
Commercial mortgage-backed securities	—		145		—		145
Equity securities
Large capitalization value	148		—		—		148
Smaller company growth	29		—		—		29
Total available-for-sale securities	187		1,260		—		1,447
Derivative financial instruments, net	—		145		—		145
Total Assets	$	187	$	1,405	$	—	$	1,592
Liabilities
Guarantees	$	—	$	—	$	7	$	7
Total Liabilities	$	—	$	—	$	7	$	7

	December 31, 2010
(Millions of dollars)	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

	December 31, 2009
(Millions of dollars)	Level 1		Level 2		Level 3		TotalAssets / Liabilities,at Fair Value
Assets
Available-for-sale securities
Government debt
U.S. treasury bonds	$	14	$	—	$	—	$	14
Other U.S. and non-U.S. government bonds	—		65		—		65
Corporate bonds
Corporate bonds	—		475		—		475
Asset-backed securities	—		134		—		134
Mortgage-backed debt securities
U.S. governmental agency mortgage-backed securities	—		308		—		308
Residential mortgage-backed securities	—		51		—		51
Commercial mortgage-backed securities	—		162		—		162
Equity securities
Large capitalization value	89		—		—		89
Smaller company growth	24		—		—		24
Total available-for-sale securities	127		1,195		—		1,322
Derivative financial instruments, net	—		236		—		236
Securitized retained interests	—		—		102		102
Total Assets	$	127	$	1,431	$	102	$	1,660
Liabilities
Guarantees	$	—	$	—	$	17	$	17
Total Liabilities	$	—	$	—	$	17	$	17

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

(Millions of dollars)	SecuritizedRetainedInterests			Guarantees
Balance at December 31, 2008	$	52		$	14
Gains or losses included in earnings (realized and unrealized)	(31		)	—
Changes in Accumulated other comprehensive income (loss)	6			—
Purchases, issuances and settlements	75			3
Balance at December 31, 2009	$	102		$	17
Adjustment to adopt accounting for variable-interest entities	(102		)	—
Valuation adjustment	—			(6		)
Issuance of guarantees	—			7
Expiration of guarantees	—			(8		)
Balance at December 31, 2010	$	—		$	10
Issuance of guarantees	—			4
Expiration of guarantees	—			(7		)
Balance at December 31, 2011	$	—		$	7

Fair Values of Financial Instruments

	2011				2010				2009
(Millions of dollars)	CarryingAmount		FairValue		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Reference
Assets at December 31,
Cash and short-term investments	$	3,057	$	3,057	$	3,592	$	3,592	$	4,867	$	4,867	Statement 2
Restricted cash and short-term investments	87		87		91		91		37		37		Statement 2
Available-for-sale securities	1,447		1,447		1,370		1,370		1,322		1,322		Notes 11 & 18
Finance receivables—net (excluding finance leases1)	12,689		12,516		12,568		12,480		13,077		13,234		Note 6
Wholesale inventory receivables—net (excluding finance leases1)	1,591		1,505		1,062		1,017		660		646		Note 6
Foreign currency contracts—net	—		—		63		63		192		192		Notes 3 & 18
Interest rate swaps—net	241		241		187		187		34		34		Note 3
Commodity contracts—net	—		—		17		17		10		10		Note 3
Securitized retained interests	—		—		—		—		102		102		Note 6
Liabilities at December 31,
Short-term borrowings	3,988		3,988		4,056		4,056		4,083		4,083		Note 13
Long-term debt (including amounts due within one year):
Machinery and Power Systems	8,973		10,737		5,000		5,968		5,954		6,674		Note 14
Financial Products	21,631		22,674		19,362		20,364		21,594		22,367		Note 14
Foreign currency contracts—net	89		89		—		—		—		—		Notes 3 & 18
Commodity contracts—net	7		7		—		—		—		—		Note 3
Guarantees	7		7		10		10		17		17		Note 20

1Total excluded items have a net carrying value at December 31, 2011, 2010 and 2009 of $7,324 million, $7,292 million and $7,780 million, respectively.