Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair values of financial assets and liabilities

The estimated fair values of our financial instruments are shown in the following table (in millions). The carrying values of cash and cash equivalents, accounts receivable and accounts payable, accruals and other liabilities are deemed to be reasonable estimates of their fair values.

	Carrying Value				Fair Value
	March 31,		December 31,		March 31,		December 31,
	2012		2011		2012		2011
Investments in fixed maturity securities	$	31,698	$	32,188	$	31,698	$	32,188
Investments in equity securities		89,115		76,991		89,115		76,991
Other investments		19,411		16,921		20,426		17,927
Loans and finance receivables		13,799		13,934		13,016		13,126
Derivative contract assets (1)		293		327		293		327
Notes payable and other borrowings:
Insurance and other		13,635		13,768		14,186		14,334
Railroad, utilities and energy		34,523		32,580		38,697		38,257
Finance and financial products		13,677		14,036		14,549		14,959
Derivative contract liabilities:
Railroad, utilities and energy (2)		472		336		472		336
Finance and financial products		9,055		10,139		9,055		10,139

(1) Included in other assets

(2) Included in accounts payable, accruals and other liabilities

Financial assets and liabilities measured and carried at fair value on a recurring basis in the financial statements

Financial instruments measured at fair value on a recurring basis are summarized, according to the hierarchy previously described, as follows (in millions).

	Total Fair Value			Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
March 31, 2012
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	2,652		$	1,022	$	1,628		$	2
States, municipalities and political subdivisions		2,951			—		2,950			1
Foreign governments		10,991			4,582		6,409			—
Corporate bonds		12,297			—		11,645			652
Mortgage-backed securities		2,807			—		2,807			—
Investments in equity securities		89,115			89,018		65			32
Other investments		14,158			—		—			14,158
Loans and finance receivables (1)		13,016			—		1,019			11,997
Notes payable and other borrowings (1):
Insurance and other		14,186			—		14,186			—
Railroad, utilities and energy		38,697			—		38,697			—
Finance and financial  products		14,549			—		13,667			882
Net derivative contract (assets)/liabilities:
Railroad, utilities and energy		411			31		405			(25	)
Finance and financial products:
Equity index put options		7,810			—		—			7,810
Credit default obligations		1,086			—		—			1,086
Other		(73	)		—		(51	)		(22	)

(1) Not carried at fair value in our financial statements.

	Total Fair Value			Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
December 31, 2011
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	2,935		$	843	$	2,090		$	2
States, municipalities and political subdivisions		3,070			—		3,069			1
Foreign governments		10,843			4,444		6,265			134
Corporate bonds		12,448			—		11,801			647
Mortgage-backed securities		2,892			—		2,892			—
Investments in equity securities		76,991			76,906		63			22
Other investments		11,669			—		—			11,669
Net derivative contract (assets)/liabilities:
Railroad, utilities and energy		265			12		276			(23	)
Finance and financial products:
Equity index put options		8,499			—		—			8,499
Credit default obligations		1,472			—		—			1,472
Other		(88	)		—		(48	)		(40	)

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 first quarter of 2012 and 2011 follow (in millions).

	Investments in fixed maturity securities			Investments in equity securities			Other investments			Net derivative contract (liabilities)
Balance at December 31, 2010	$	801		$	35		$	17,589		$	(8,222	)
Gains (losses) included in:
Earnings		—			—			—			307
Other comprehensive income		(3	)		9			(319	)		—
Regulatory assets and liabilities		—			—			—			(13	)
Dispositions		(31	)		—			—			—
Settlements		—			—			—			(16	)
Transfers out of Level 3		—			—			(5,500	)		—
Balance at March 31, 2011	$	767		$	44		$	11,770		$	(7,944	)
Balance at December 31, 2011	$	784		$	22		$	11,669		$	(9,908	)
Gains (losses) included in:
Earnings		—			(1	)		—			1,022
Other comprehensive income		6			11			2,489			(3	)
Regulatory assets and liabilities		—			—			—			9
Dispositions		(6	)		—			—			—
Settlements		—			—			—			31
Transfers out of Level 3		(129	)		—			—			—
Balance at March 31, 2012	$	655		$	32		$	14,158		$	(8,849	)

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

Quantitative information as of March 31, 2012, 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 Input	Weighted Average
Other investments:
Preferred stocks	$	11,307	Discounted cash flow	Expected duration	10 years
				Discount for transferability restrictions and subordination	97 Bps
Common stock warrants		2,851	Warrant pricing model	Discount for transferability and hedging restrictions	18%
Net derivative liabilities:
Equity index put options		7,810	Option pricing model	Volatility	22%
Credit default-states/municipalities		1,025	Discounted cash flow	Credit default spreads	120 Bps