Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)

9 Months Ended

Oct. 02, 2016

Investments, Debt and Equity Securities [Abstract]

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



	October 2, 2016						December 31, 2015
In millions	Cost		Gross unrealized gains/(losses)		Estimated fair value		Cost		Gross unrealized gains/(losses)			Estimated fair value
Available-for-sale
Level 2⁽¹⁾
Bank debentures	$	118	$	—	$	118	$	—	$	—		$	—
Debt mutual funds	118		—		118		88		—			88
Equity mutual funds	12		—		12		11		(1		)	10
Government debt securities	2		—		2		2		—			2
Total marketable securities	$	250	$	—	$	250	$	101	$	(1	)	$	100

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⁽¹⁾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 the first nine months of 2016 or for the year ended December 31, 2015.

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 and losses from the sale of available-for-sale securities were as follows:



	Three months ended				Nine months ended
In millions	October 2, 2016		September 27, 2015		October 2, 2016		September 27, 2015
Proceeds from sales and maturities of marketable securities	$	54	$	73	$	291	$	228
Gross realized gains from the sale of marketable 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 available-for-sale investments with contractual maturities

At October 2, 2016, the fair value of available-for-sale investments in debt securities that utilize a Level 2 fair value measure is shown by contractual maturity below:



Contractual Maturity	(In millions)
1 year or less	$	237
5 - 10 years	1
Total	$	238

- 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.

+ References + Details