Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2018

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

Our financial assets and liabilities are summarized below as of March 31, 2018 and December 31, 2017 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)
March 31, 2018
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,608	$	3,608	$	2,399		$ 1,209		$ —
States, municipalities and political subdivisions		759		759		—		759		—
Foreign governments		7,888		7,888		5,906		1,982		—
Corporate bonds		6,819		6,819		—		6,813		6
Mortgage-backed securities		846		846		—		846		—
Investments in equity securities		172,976		172,976		172,928		48		—
Investment in Kraft Heinz common stock		17,687		20,272		20,272		—		—
Loans and finance receivables		13,845		14,084		—		18		14,066
Derivative contract assets ⁽¹⁾		141		141		1		26		114
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		105		105		—		88		17
Equity index put options		2,378		2,378		—		—		2,378
Notes payable and other borrowings:
Insurance and other		25,663		26,046		—		26,046		—
Railroad, utilities and energy		62,667		68,603		—		68,603		—
Finance and financial products		10,755		11,059		—		11,035		24
December 31, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,953	$	3,953	$	2,360		$ 1,593		$ —
States, municipalities and political subdivisions		854		854		—		854		—
Foreign governments		8,822		8,822		6,946		1,876		—
Corporate bonds		6,862		6,862		—		6,856		6
Mortgage-backed securities		862		862		—		862		—
Investments in equity securities		170,540		170,540		170,494		46		—
Investment in Kraft Heinz common stock		17,635		25,306		25,306		—		—
Loans and finance receivables		13,748		14,136		—		17		14,119
Derivative contract assets ⁽¹⁾		142		142		1		28		113
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		82		82		3		69		10
Equity index put options		2,172		2,172		—		—		2,172
Notes payable and other borrowings:
Insurance and other		27,324		28,180		—		28,180		—
Railroad, utilities and energy		62,178		70,538		—		70,538		—
Finance and financial products		13,085		13,582		—		13,577		5

(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 three months ended March 31, 2018 and 2017 follow (in millions).


	Investments in equity and fixed maturity securities			Net derivative contract liabilities
Three months ending March 31, 2018
Balance at December 31, 2017	$	6		$	(2,069	)
Gains (losses) included in:
Earnings		—			(176	)
Other comprehensive income		—			(1	)
Regulatory assets and liabilities		—			(9	)
Acquisitions, dispositions and settlements		—			(26	)
Transfers into/out of Level 3		—			—

Balance at March 31, 2018	$	6		$	(2,281	)

Three months ending March 31, 2017
Balance at December 31, 2016	$	17,321		$	(2,824	)
Gains (losses) included in:
Earnings		—			499
Other comprehensive income		1,157			(2	)
Regulatory assets and liabilities		—			1
Acquisitions, dispositions and settlements		(3	)		(23	)
Transfers into/out of Level 3		(1	)		—

Balance at March 31, 2017	$	18,474		$	(2,349	)

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

Quantitative information as of March 31, 2018, with respect to 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 liabilities:

Equity index put options

$2,378

Option pricing model

Volatility

18%