Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2017

Financial assets and liabilities measured at fair value on a recurring basis

Our financial assets and liabilities are summarized below as of September 30, 2017 and December 31, 2016 with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, receivables and accounts payable, accruals and other liabilities are considered to be reasonable estimates of their fair values.


	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	4,321	$	4,321	$	2,752	$	1,569	$	—
States, municipalities and political subdivisions		1,038		1,038		—		1,038		—
Foreign governments		8,765		8,765		6,849		1,916		—
Corporate bonds		7,149		7,149		—		7,142		7
Mortgage-backed securities		983		983		—		983		—
Investments in equity securities		157,650		157,650		157,641		9		—
Investment in Kraft Heinz common stock		15,695		25,238		25,238		—		—
Other investments		3,311		3,311		—		3,311		—
Loans and finance receivables		13,593		13,886		—		17		13,869
Derivative contract assets ⁽¹⁾		136		136		1		19		116
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		131		131		1		113		17
Equity index put options		2,187		2,187		—		—		2,187
Notes payable and other borrowings:
Insurance and other		27,262		28,093		—		28,093		—
Railroad, utilities and energy		61,147		68,881		—		68,881		—
Finance and financial products		13,081		13,578		—		13,577		1

December 31, 2016
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	4,527	$	4,527	$	3,099	$	1,428	$	—
States, municipalities and political subdivisions		1,216		1,216		—		1,216		—
Foreign governments		9,001		9,001		7,237		1,764		—
Corporate bonds		7,604		7,604		—		7,540		64
Mortgage-backed securities		1,117		1,117		—		1,117		—
Investments in equity securities		122,032		122,032		122,031		—		1
Investment in Kraft Heinz common stock		15,345		28,418		28,418		—		—
Other investments		17,256		17,256		—		—		17,256
Loans and finance receivables		13,300		13,717		—		13		13,704
Derivative contract assets ⁽¹⁾		142		142		5		43		94
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		145		145		3		114		28
Equity index put options		2,890		2,890		—		—		2,890
Notes payable and other borrowings:
Insurance and other		27,175		27,712		—		27,712		—
Railroad, utilities and energy		59,085		65,774		—		65,774		—
Finance and financial products		15,384		15,825		—		15,469		356

⁽¹⁾

Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.

Reconciliations of assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3)

Reconciliations of assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the nine months ending September 30, 2017 and 2016 follow (in millions).


	Investments in fixed maturity securities			Investments in equity securities and other investments			Net derivative contract liabilities
Nine months ending September 30, 2017
Balance at December 31, 2016	$	64		$	17,257		$	(2,824	)
Gains (losses) included in:
Earnings		—			—			822
Other comprehensive income		1			1,156			(3	)
Regulatory assets and liabilities		—			—			(5	)
Acquisitions, dispositions and settlements		(58	)		—			(78	)
Transfers into/out of Level 3		—			(18,413	)		—

Balance at September 30, 2017	$	7		$	—		$	(2,088	)

Nine months ending September 30, 2016
Balance at December 31, 2015	$	100		$	21,403		$	(3,785	)
Gains (losses) included in:
Earnings		—			2,409			(221	)
Other comprehensive income		3			(2,233	)		(2	)
Regulatory assets and liabilities		—			—			(12	)
Acquisitions, dispositions and settlements		5			(4,461	)		(81	)
Transfers into/out of Level 3		(1	)		—			195

Balance at September 30, 2016	$	107		$	17,118		$	(3,906	)

Fair value assets and liabilities measured on recurring basis, unobservable inputs, additional information

Quantitative information as of September 30, 2017, with respect to significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follows (in millions).

Fair
Value

Principal Valuation
Techniques

Unobservable Inputs

Weighted
Average

Derivative contract liabilities:

Equity index put options

2,187

Option pricing model

Volatility

18%