Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2015

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

Our financial assets and liabilities are summarized below as of September 30, 2015 and December 31, 2014 with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, accounts receivable 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, 2015
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	3,819		$	3,819		$	2,542		$	1,277		$	—
States, municipalities and political subdivisions			1,868			1,868			—			1,868			—
Foreign governments			11,644			11,644			6,982			4,662			—
Corporate bonds			8,116			8,116			—			8,005			111
Mortgage-backed securities			1,713			1,713			—			1,713			—
Investments in equity securities			110,288			110,288			110,250			37			1
Investment in Kraft Heinz common stock			15,816			22,970			22,970			—			—
Investment in Kraft Heinz Preferred Stock			7,710			8,568			—			—			8,568
Other investments			20,576			20,576			303			—			20,273
Loans and finance receivables			12,686			13,067			—			16			13,051
Derivative contract assets ⁽¹⁾			109			109			—			10			99
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾			257			257			12			196			49
Finance and financial products:
Equity index put options			4,188			4,188			—			—			4,188
Credit default			242			242			—			—			242
Notes payable and other borrowings:
Insurance and other			14,556			14,716			—			14,716			—
Railroad, utilities and energy			57,872			63,044			—			63,044			—
Finance and financial products			12,483			12,918			—			12,433			485
December 31, 2014
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	2,930		$	2,930		$	2,264		$	666		$	—
States, municipalities and political subdivisions			1,912			1,912			—			1,912			—
Foreign governments			12,270			12,270			7,981			4,289			—
Corporate bonds			8,771			8,771			—			8,763			8
Mortgage-backed securities			1,753			1,753			—			1,753			—
Investments in equity securities			117,470			117,470			117,424			45			1
Investment in Kraft Heinz Preferred Stock			7,710			8,416			—			—			8,416
Other investments			22,324			22,324			329			—			21,995
Loans and finance receivables			12,566			12,891			—			33			12,858
Derivative contract assets ⁽¹⁾			108			108			1			13			94
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾			230			230			18			169			43
Finance and financial products:
Equity index put options			4,560			4,560			—			—			4,560
Credit default			250			250			—			—			250
Notes payable and other borrowings:
Insurance and other			11,894			12,484			—			12,484			—
Railroad, utilities and energy			55,579			62,802			—			62,802			—
Finance and financial products			12,736			13,417			—			12,846			571

⁽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, 2015 and 2014 follow (in millions).


	Investments in fixed maturity securities				Investments in equity securities and other investments				Net derivative contract liabilities
Nine months ending September 30, 2015
Balance at December 31, 2014		$	8			$	21,996			$	(4,759	)
Gains (losses) included in:
Earnings			—				—				467
Other comprehensive income			—				(1,722	)			(5	)
Regulatory assets and liabilities			—				—				(21	)
Acquisitions, dispositions and settlements			103				—				(65	)
Transfers into/out of Level 3			—				—				3

Balance at September 30, 2015		$	111			$	20,274			$	(4,380	)


Nine months ending September 30, 2014
Balance at December 31, 2013		$	372			$	17,958			$	(5,255	)
Gains (losses) included in:
Earnings			—				—				644
Other comprehensive income			13				1,228				4
Regulatory assets and liabilities			—				—				(3	)
Dispositions and settlements			(1	)			—				(1	)
Transfers into/out of Level 3			(375	)			(6	)			(35	)

Balance at September 30, 2014		$	9			$	19,180			$	(4,646	)

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

Quantitative information as of September 30, 2015, 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

Other investments:
Preferred stocks	$	14,526	Discounted cash flow	Expected duration	7 years

				Discount for transferability restrictions and subordination	134 basis points

Common stock warrants		5,747	Warrant pricing model	Discount for transferability and hedging restrictions	8%

Net derivative liabilities:

Equity index put options		4,188	Option pricing model	Volatility	22%

Credit default		242	Discounted cash flow	Credit spreads	31 basis points