Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2016

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

Our financial assets and liabilities are summarized below as of September 30, 2016 and December 31, 2015 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)
September 30, 2016
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$ 4,565		$ 4,565		$ 3,318		$ 1,247		$ —
States, municipalities and political subdivisions		1,279		1,279		—		1,279		—
Foreign governments		9,795		9,795		7,704		2,091		—
Corporate bonds		7,789		7,789		—		7,682		107
Mortgage-backed securities		1,219		1,219		—		1,219		—
Investments in equity securities		102,535		102,535		102,534		—		1
Investment in Kraft Heinz common stock		15,711		29,130		29,130		—		—
Other investments		17,493		17,493		376		—		17,117
Loans and finance receivables		13,213		13,650		—		14		13,636
Derivative contract assets ⁽¹⁾		105		105		1		5		99
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		198		198		5		161		32
Finance and financial products:
Equity index put options		3,973		3,973		—		—		3,973
Notes payable and other borrowings:
Insurance and other		27,514		29,119		—		29,119		—
Railroad, utilities and energy		58,811		69,130		—		69,130		—
Finance and financial products		15,473		16,251		—		15,862		389

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

⁽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, 2016 and 2015 follow (in millions).


	Investments in fixed maturity securities				Investments in equity securities and other investments				Net derivative contract liabilities
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	)

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	)
Acquisition, dispositions and settlements			103				—				(65	)
Transfers into/out of Level 3			—				—				3

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

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

Quantitative information as of September 30, 2016, 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

11,615

Discounted cash flow

Expected duration

6 years

Discount for transferability
restrictions and subordination

159 basis points

Common stock warrants

5,502

Warrant pricing model

Discount for transferability and
hedging restrictions

Net derivative liabilities:

Equity index put options

3,973

Option pricing model

Volatility

21%