Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2015

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

Our financial assets and liabilities are summarized below as of December 31, 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, 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)
December 31, 2015
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,427	$	3,427	$	2,485	$	942	$	—
States, municipalities and political subdivisions		1,764		1,764		—		1,764		—
Foreign governments		11,468		11,468		9,188		2,280		—
Corporate bonds		7,926		7,926		—		7,826		100
Mortgage-backed securities		1,442		1,442		—		1,442		—
Investments in equity securities		111,822		111,822		111,786		35		1
Investment in Kraft Heinz common stock		15,714		23,679		23,679		—		—
Investment in Kraft Heinz Preferred Stock		7,710		8,363		—		—		8,363
Other investments		21,717		21,717		315		—		21,402
Loans and finance receivables		12,772		13,112		—		16		13,096
Derivative contract assets ⁽¹⁾		103		103		—		5		98
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		237		237		13		177		47
Finance and financial products:
Equity index put options		3,552		3,552		—		—		3,552
Credit default		284		284		—		—		284
Notes payable and other borrowings:
Insurance and other		14,599		14,773		—		14,773		—
Railroad, utilities and energy		57,739		62,471		—		62,471		—
Finance and financial products		11,951		12,363		—		11,887		476
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		11,854		12,484		—		12,484		—
Railroad, utilities and energy		55,306		62,802		—		62,802		—
Finance and financial products		12,730		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 each of the three years ending December 31, 2015 follow (in millions).


	Investments in fixed maturity securities			Investments in equity securities and other investments			Net derivative contract liabilities
Balance at December 31, 2012	$	652		$	15,785		$	(7,847	)
Gains (losses) included in:
Earnings		312			522			2,652
Other comprehensive income		(14	)		3,177			(1	)
Regulatory assets and liabilities		—			—			1
Dispositions and settlements		(578	)		(31	)		(60	)
Transfers into/out of Level 3		—			(1,495	)		—

Balance at December 31, 2013		372			17,958			(5,255	)
Gains (losses) included in:
Earnings		—			—			524
Other comprehensive income		13			1,373			—
Regulatory assets and liabilities		—			—			5
Acquisitions		—			3,000			1
Dispositions and settlements		(2	)		—			1
Transfers into/out of Level 3		(375	)		(335	)		(35	)

Balance at December 31, 2014		8			21,996			(4,759	)
Gains (losses) included in:
Earnings		—			—			1,080
Other comprehensive income		(2	)		(593	)		(7	)
Regulatory assets and liabilities		—			—			(19	)
Acquisitions		101			—			—
Dispositions and settlements		(7	)		—			(83	)
Transfers into/out of Level 3		—			—			3

Balance at December 31, 2015	$	100		$	21,403		$	(3,785	)

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

Quantitative information as of December 31, 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	$	14,822	Discounted cash flow	Expected duration	6 years

				Discount for transferability restrictions and subordination	134 basis points

Warrants		6,580	Warrant pricing model	Discount for transferability and hedging restrictions	7%
Net derivative liabilities:
Equity index put options		3,552	Option pricing model	Volatility	21%

Credit default		284	Discounted cash flow	Credit spreads	31 basis points