FAIR VALUE MEASUREMENTS

A summary of the Company's recurring and nonrecurring fair value measurements can be found in Note 12 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016. If applicable, updates have been included in the respective section below.

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, 2017 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:
Cash equivalents (2)	$	—	$	1,159	$	—	$	—		$	1,159
Interests in trade accounts receivable conduits (3)	—		—		1,684		—			1,684
Equity securities (4)	656		89		—		—			745
Debt securities: (4)
Government debt (5)	—		617		—		—			617
Corporate bonds	—		637		—		—			637
Derivatives relating to: (6)
Commodities	23		54		—		(16		)	61
Foreign currency	—		175		—		(150		)	25
Total assets at fair value	$	679	$	2,731	$	1,684	$	(166	)	$	4,928
Liabilities at fair value:
Long-term debt (7)	$	—	$	23,239	$	—	$	—		$	23,239
Derivatives relating to: (6)
Interest rates	—		5		—		—			5
Commodities	28		279		—		(38		)	269
Foreign currency	—		332		—		(150		)	182
Total liabilities at fair value	$	28	$	23,855	$	—	$	(188	)	$	23,695


(1)	Counterparty and cash collateral 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 cash collateral placed with the same counterparty.


(2)	Treasury Bills and money market funds included in "Cash and cash equivalents" in the consolidated balance sheets and held at amortized cost, which approximates fair value.


(3)	Included in “Accounts and notes receivable – Other” in the consolidated balance sheets. See Note 11 for additional information on transfers of financial assets.


(4)	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.


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


(6)	See Note 7 for the classification of derivatives in the consolidated balance sheets.


(7)	See Note 7 for information on fair value measurements of long-term debt.



Basis of Fair Value Measurements on a Recurring Basis at December 31, 2016 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:
Cash equivalents (2)	$	—	$	500	$	—	$	—		$	500
Interests in trade accounts receivable conduits (3)	—		—		1,237		—			1,237
Equity securities (4)	619		87		—		—			706
Debt securities: (4)
Government debt (5)	—		608		—		—			608
Corporate bonds	—		645		—		—			645
Derivatives relating to: (6)
Commodities	48		29		—		(21		)	56
Foreign currency	—		193		—		(109		)	84
Total assets at fair value	$	667	$	2,062	$	1,237	$	(130	)	$	3,836
Liabilities at fair value:
Long-term debt (7)	$	—	$	22,807	$	—	$	—		$	22,807
Derivatives relating to: (6)
Interest rates	—		5		—		—			5
Commodities	20		214		—		(21		)	213
Foreign currency	—		139		—		(109		)	30
Total liabilities at fair value	$	20	$	23,165	$	—	$	(130	)	$	23,055


(1)	Counterparty and cash collateral 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 cash collateral placed with the same counterparty.


(2)	Treasury Bills and money market funds included in "Cash and cash equivalents" in the consolidated balance sheets and held at amortized cost, which approximates fair value.


(3)	Included in “Accounts and notes receivable – Other” in the consolidated balance sheets. See Note 11 for additional information on transfers of financial assets.


(4)	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.


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


(6)	See Note 7 for the classification of derivatives in the consolidated balance sheets.


(7)	See Note 7 for information on fair value measurements of long-term debt.

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 liabilities. The Company posted cash collateral of $44 million at June 30, 2017 (less than $1 million at December 31, 2016).

The following table summarizes the changes in fair value measurements of interests held in trade receivable conduits using Level 3 inputs for the three- and six-month periods ended June 30, 2017 and 2016:



Fair Value Measurements Using Level 3 Inputs	Three Months Ended						Six Months Ended
Interests Held in Trade Receivable Conduits (1) In millions	Jun 30, 2017			Jun 30, 2016			Jun 30, 2017			Jun 30, 2016
Balance at beginning of period	$	1,663		$	1,195		$	1,237		$	943
Loss included in earnings (2)	(2		)	—			(2		)	(1		)
Purchases	713			520			1,253			960
Settlements	(690		)	(566		)	(804		)	(753		)
Balance at end of period	$	1,684		$	1,149		$	1,684		$	1,149


(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.