TRANSFERS OF FINANCIAL ASSETS

The Company sells trade accounts receivable of select North American entities and qualifying trade accounts receivable of select European entities on a revolving basis to certain multi-seller commercial paper conduit entities ("conduits"). The proceeds received are comprised of cash and interests in specified assets of the conduits (the receivables sold by the Company) that entitle the Company to the residual cash flows of such specified assets in the conduits after the commercial paper has been repaid. Neither the conduits nor the investors in those entities have recourse to other assets of the Company in the event of nonpayment by the debtors.

In the fourth quarter of 2017, the Company suspended further sales of trade accounts receivable through these facilities and began reducing outstanding balances under these facilities through collections of trade accounts receivable previously sold to such conduits. The Company has the ability to resume such sales to the conduits, subject to certain prior notice requirements, at the discretion of the Company.

For the year ended December 31, 2017, the Company recognized a loss of $25 million on the sale of these receivables ($20 million loss for the year ended December 31, 2016 and $15 million loss for the year ended December 31, 2015), which is included in “Interest expense and amortization of debt discount” in the consolidated statements of income.

The Company's interests in the conduits are carried at fair value and included in “Accounts and notes receivable – Other” in the consolidated balance sheets. Fair value of the interests is determined by calculating the expected amount of cash to be received and is based on unobservable inputs (a Level 3 measurement). The key input in the valuation is the percentage 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 rates and prepayments are not factors in determining the fair value of the interests.

The following table summarizes the carrying value of interests held, which represents the Company's maximum exposure to loss related to the receivables sold, and the percentage of anticipated credit losses related to the trade accounts receivable sold. Also provided is the sensitivity of the fair value of the interests held to hypothetical adverse changes in the anticipated credit losses; amounts shown below are the corresponding hypothetical decreases in the carrying value of interests.



Interests Held at Dec 31
In millions	2017			2016
Carrying value of interests held	$	677		$	1,237
Percentage of anticipated credit losses	2.64		%	0.36		%
Impact to carrying value - 10% adverse change	$	—		$	1
Impact to carrying value - 20% adverse change	$	1		$	1

Credit losses, net of any recoveries, were insignificant for the year ended December 31, 2017 (insignificant for the year ended December 31, 2016, and $1 million for the year ended December 31, 2015).

Following is an analysis of certain cash flows between the Company and the conduits:



Cash Proceeds
In millions	2017		2016		2015
Sale of receivables	$	1	$	1	$	18
Collections reinvested in revolving receivables	$	21,293	$	21,652	$	22,951
Interests in conduits ¹	$	2,269	$	1,257	$	1,034


1.	Presented in "Operating Activities" in the consolidated statements of cash flows.

Following is additional information related to the sale of receivables under these facilities:

In 2017, the Company repurchased $5 million of previously sold receivables ($4 million in 2016).

Trade Accounts Receivable Sold at Dec 31

In millions

Delinquencies on sold receivables still outstanding

Trade accounts receivable outstanding and derecognized