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

Sep. 28, 2014

Investments, Debt and Equity Securities [Abstract]

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



	September 28, 2014							December 31, 2013
In millions	Cost		Gross unrealized gains/(losses)			Estimated fair value		Cost		Gross unrealized gains/(losses)			Estimated fair value
Available-for-sale
Level 1⁽¹⁾
Debt mutual funds	$	26	$	—		$	26	$	72	$	—		$	72
Equity securities and other	7		—			7		10		13			23
Total level 1	33		—			33		82		13			95
Level 2⁽²⁾
Debt mutual funds	14		1			15		27		2			29
Bank debentures	3		—			3		2		—			2
Certificates of deposit	—		—			—		22		—			22
Government debt securities-non-U.S.	3		(1		)	2		3		(1		)	2
Total level 2	20		—			20		54		1			55
Total marketable securities	$	53	$	—		$	53	$	136	$	14		$	150

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⁽¹⁾ The fair value of Level 1 securities is estimated primarily by referencing quoted prices in active markets for identical assets.

⁽²⁾The fair value of Level 2 securities is estimated primarily using actively quoted prices for similar instruments from brokers and observable inputs, including market transactions and third-party pricing services. We do not currently have any Level 3 securities, and there were no transfers into or out of Level 2 or 3 during the first nine months of 2014 and 2013.

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	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
Proceeds from sales and maturities of marketable securities	$	137	$	153	$	316	$	433
Gross realized gains from the sale of available-for-sale securities	1		1		14		12

Summary of fair value of available-for-sale investments with contractual maturities

At September 28, 2014, the fair value of available-for-sale investments in debt securities that utilize a Level 2 fair value measure by contractual maturity was as follows:



Maturity date	Fair value (in millions)
1 year or less	$	16
1 - 5 years	3
5 - 10 years	1
Total	$	20

- 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