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95
NOTE 11 – FINANCIAL INSTRUMENTS
The following table summarizes the fair value of financial instruments at December 31, 2015 and 2014:
Fair Value of Financial Instruments at December 31
2015 2014
In millions Cost Gain Loss
Fair
Value Cost Gain Loss
Fair
Value
Marketable securities: (1)
Debt securities:
Government debt (2) $ 597 $ 22 $ (7) $ 612 $ 559 $ 26 $ (1) $ 584
Corporate bonds 633 26 (8) 651 654 45 (2) 697
Total debt securities $ 1,230 $ 48 $ (15) $ 1,263 $ 1,213 $ 71 $ (3) $ 1,281
Equity securities 555 108 (60) 603 566 177 (15) 728
Total marketable securities $ 1,785 $ 156 $ (75) $ 1,866 $ 1,779 $ 248 $ (18) $ 2,009
Long-term debt including debt
due within one year (3) (4) $ (16,756) $ 424 $ (1,668) $ (18,000) $ (19,123) $ 69 $ (2,396) $ (21,450)
Derivatives relating to:
Interest rates $ — $ — $ (4) $ (4) $ — $ — $ (12) $ (12)
Commodities (5) $ — $ 6 $ (248) $ (242) $ — $ 3 $ (81) $ (78)
Foreign currency $ — $ 109 $ (32) $ 77 $ — $ 26 $ (71) $ (45)
(1) Included in “Other investments” in the consolidated balance sheets.
(2) U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
(3) Cost includes fair value adjustments of $18 million at December 31, 2015 and $21 million at December 31, 2014.
(4) Presented in accordance with newly implemented ASU 2015-03. See Note 2 for further information.
(5) Presented net of cash collateral, as disclosed in Note 12.
Cost approximates fair value for all other financial instruments.
Investments
The Company’s investments in marketable securities are primarily classified as available-for-sale securities. The following
table provides the investing results from available-for-sale securities for the years ended December 31, 2015, 2014 and 2013.
Investing Results
In millions 2015 2014 2013
Proceeds from sales of available-for-sale securities $ 565 $ 675 $ 486
Gross realized gains $ 96 $ 99 $ 66
Gross realized losses $ (14) $ (6) $ (4)
The following table summarizes the contractual maturities of the Company’s investments in debt securities:
Contractual Maturities of Debt Securities
at December 31, 2015
In millions Amortized Cost Fair Value
Within one year $ 18 $ 18
One to five years 442 453
Six to ten years 567 578
After ten years 203 214
Total $ 1,230 $ 1,263
At December 31, 2015, the Company had $3,354 million ($1,050 million at December 31, 2014) of held-to-maturity securities
(primarily Treasury Bills) classified as cash equivalents as these securities had maturities of three months or less at the time of
purchase. The Company’s investments in held-to-maturity securities are held at amortized cost, which approximates fair value.
At December 31, 2015, the Company had investments in money market funds of $1,689 million classified as cash equivalents
($1,655 million at December 31, 2014).