Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)

12 Months Ended

Dec. 31, 2017

A summary of marketable securities, all of which are classified as current, was as follows:



	December 31,
	2017						2016
In millions	Cost		Gross unrealized gains/(losses)		Estimated fair value		Cost		Gross unrealized gains/(losses)		Estimated fair value
Available-for-sale ⁽¹⁾
Debt mutual funds	$	170	$	—	$	170	$	132	$	—	$	132
Bank debentures	—		—		—		114		—		114
Equity mutual funds	12		3		15		12		—		12
Certificates of deposit	12		—		12		—		—		—
Government debt securities	1		—		1		2		—		2
Total marketable securities	$	195	$	3	$	198	$	260	$	—	$	260

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⁽¹⁾ All marketable securities are classified as Level 2 securities. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities and there were no transfers between Level 2 or 3 during 2017 or 2016.

Schedule of proceeds from sales and maturities and gross realized gains and losses

The proceeds from sales and maturities of marketable securities and gross realized gains from the sale of available-for-sale (AFS) securities were as follows:



	Years ended December 31,
In millions	2017		2016		2015
Proceeds from sales and maturities of marketable securities	$	266	$	306	$	270
Gross realized gains from the sale of available-for-sale securities⁽¹⁾	—		—		1

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⁽¹⁾ Gross realized losses from the sale of available-for-sale securities were immaterial.

Summary of fair value of AFS investments in debt securities by contractual maturity

At December 31, 2017, the fair value of AFS investments in debt securities that utilize a Level 2 fair value measure is shown by contractual maturity below:



Maturity date	(in millions)
1 year or less	$	182
1 - 5 years	1
Total	$	183

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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