FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

The following tables summarize the bases used to measure certain assets and liabilities at fair value on a recurring basis:

Basis of Fair Value Measurements on a Recurring Basis at June 30, 2012 In millions	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting (1)			Total
Assets at fair value:
Interests in trade accounts receivable conduits (2)	$	—	$	—	$	1,220	$	—		$	1,220
Equity securities (3)	671		33		—		—			704
Debt securities: (3)
Government debt (4)	—		582		—		—			582
Corporate bonds	—		777		—		—			777
Derivatives relating to: (5)
Commodities	11		14		—		(3		)	22
Foreign currency	—		41		—		(18		)	23
Total assets at fair value	$	682	$	1,447	$	1,220	$	(21	)	$	3,328
Liabilities at fair value:
Long-term debt (6)	$	—	$	23,308	$	—	$	—		$	23,308
Derivatives relating to: (5)
Interest rates	—		6		—		—			6
Commodities	27		17		—		(33		)	11
Foreign currency	—		46		—		(18		)	28
Total liabilities at fair value	$	27	$	23,377	$	—	$	(51	)	$	23,353

Basis of Fair Value Measurements on a Recurring Basis at December 31, 2011 In millions	Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting (1)			Total
Assets at fair value:
Interests in trade accounts receivable conduits (2)	$	—	$	—	$	1,141	$	—		$	1,141
Equity securities (3)	634		33		—		—			667
Debt securities: (3)
Government debt (4)	—		618		—		—			618
Corporate bonds	—		723		—		—			723
Derivatives relating to: (5)
Commodities	10		14		—		(8		)	16
Foreign currency	—		75		—		(44		)	31
Total assets at fair value	$	644	$	1,463	$	1,141	$	(52	)	$	3,196
Liabilities at fair value:
Long-term debt (6)	$	—	$	23,789	$	—	$	—		$	23,789
Derivatives relating to: (5)
Commodities	13		7		—		(19		)	1
Foreign currency	—		61		—		(44		)	17
Total liabilities at fair value	$	13	$	23,857	$	—	$	(63	)	$	23,807

(1) Cash collateral is classified as “Accounts and notes receivable – Other” in the consolidated balance sheets. Amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.

(2) Included in “Accounts and notes receivable – Other” in the consolidated balance sheets. See Note J for additional information on transfers of financial assets.

(3) The Company’s investments in equity and debt securities are primarily classified as available-for-sale and are included in “Other investments” in the consolidated balance sheets.

(4) U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.

(5) See Note G for the classification of derivatives in the consolidated balance sheets.

(6) See Note G for information on fair value adjustments to long-term debt, included at cost in the consolidated balance sheets.

Assets and liabilities related to forward contracts, interest rate swaps, currency swaps, options and other conditional or exchange contracts executed with the same counterparty under a master netting arrangement are netted. Collateral accounts are netted with corresponding assets and liabilities. The Company posted cash collateral of $30 million at June 30, 2012 ($11 million at December 31, 2011) classified as “Accounts and notes receivable – Other” in the consolidated balance sheets.

For assets and liabilities classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange in which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.

For assets and liabilities classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by using observable market data points of similar, more liquid securities to imply the price. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks.

For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates, interest rates and implied volatilities obtained from various market sources. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks.

For all other assets and liabilities for which observable inputs are used, fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models. See Note G for further information on the types of instruments used by the Company for risk management.

There were no transfers between Levels 1 and 2 in the six-month period ended June 30, 2012 or the year ended December 31, 2011.

For assets classified as Level 3 measurements, the fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity. The fair value of the Company’s interests held in trade receivable conduits is determined by calculating the expected amount of cash to be received using the key input of anticipated credit losses in the portfolio of receivables sold that have not yet been collected. Given the short-term nature of the underlying receivables, discount rate and prepayments are not factors in determining the fair value of the interests. See Note J for further information on assets classified as Level 3 measurements.

The following table summarizes the changes in fair value measurements using Level 3 inputs for the three and six-month periods ended June 30, 2012 and 2011:

Fair Value Measurements Using Level 3 Inputs	Three Months Ended						Six Months Ended
Interests Held in Trade Receivable Conduits(1) In millions	Jun 30, 2012			Jun 30, 2011			Jun 30, 2012			Jun 30, 2011
Balance at beginning of period	$	1,429		$	1,343		$	1,141		$	1,267
Gain (Loss) included in earnings (2)	1			3			(2		)	(5		)
Purchases	100			277			2,053			1,351
Settlements	(310		)	(234		)	(1,972		)	(1,224		)
Balance at June 30	$	1,220		$	1,389		$	1,220		$	1,389

(1) Included in “Accounts and notes receivable – Other” in the consolidated balance sheets.

(2) Included in “Selling, general and administrative expenses” in the consolidated statements of income.

Fair Value Measurements on a Nonrecurring Basis

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a nonrecurring basis in the consolidated balance sheets:

Basis of Fair Value Measurements on a Nonrecurring Basis at June 30, 2012	Significant Other Unobservable Inputs		Total Losses
In millions	(Level 3)		2012
Assets at fair value:
Long-lived assets and other assets	$	—	$	(94	)

As part of the restructuring plan that was approved on March 27, 2012, the Company will shut down a number of manufacturing facilities during the next two years. The manufacturing assets and facilities associated with this plan were written down to zero in the first quarter of 2012 and a $94 million impairment charge was included in "Restructuring charges" in the consolidated statements of income. See Note C for additional information.