Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2017

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

Our financial assets and liabilities are summarized below as of March 31, 2017 and December 31, 2016 with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, 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)
March 31, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$ 4,641		$ 4,641		$ 3,187		$ 1,454		$ —
States, municipalities and political subdivisions		1,105		1,105		—		1,105		—
Foreign governments		8,669		8,669		6,835		1,834		—
Corporate bonds		7,467		7,467		—		7,405		62
Mortgage-backed securities		1,051		1,051		—		1,051		—
Investments in equity securities		135,020		135,020		135,012		8		—
Investment in Kraft Heinz common stock		15,431		29,553		29,553		—		—
Other investments		18,412		18,412		—		—		18,412
Loans and finance receivables		13,365		13,639		—		14		13,625
Derivative contract assets ⁽¹⁾		128		128		1		20		107
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		156		156		3		127		26
Equity index put options		2,430		2,430		—		—		2,430
Notes payable and other borrowings:
Insurance and other		27,416		28,022		—		28,022		—
Railroad, utilities and energy		60,925		67,655		—		67,655		—
Finance and financial products		15,615		16,064		—		15,725		339

December 31, 2016
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$ 4,527		$ 4,527		$ 3,099		$1,428		$ —
States, municipalities and political subdivisions		1,216		1,216		—		1,216		—
Foreign governments		9,001		9,001		7,237		1,764		—
Corporate bonds		7,604		7,604		—		7,540		64
Mortgage-backed securities		1,117		1,117		—		1,117		—
Investments in equity securities		122,032		122,032		122,031		—		1
Investment in Kraft Heinz common stock		15,345		28,418		28,418		—		—
Other investments		17,256		17,256		—		—		17,256
Loans and finance receivables		13,300		13,717		—		13		13,704
Derivative contract assets ⁽¹⁾		142		142		5		43		94
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		145		145		3		114		28
Equity index put options		2,890		2,890		—		—		2,890
Notes payable and other borrowings:
Insurance and other		27,175		27,712		—		27,712		—
Railroad, utilities and energy		59,085		65,774		—		65,774		—
Finance and financial products		15,384		15,825		—		15,469		356

⁽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 ending March 31, 2017 and 2016 follow (in millions).


	Investments in fixed maturity securities				Investments in equity securities and other investments			Net derivative contract liabilities
Three months ending March 31, 2017
Balance at December 31, 2016		$	64		$	17,257		$	(2,824	)
Gains (losses) included in:
Earnings			—			—			499
Other comprehensive income			1			1,156			(2	)
Regulatory assets and liabilities			—			—			1
Acquisitions, dispositions and settlements			(3	)		—			(23	)
Transfers into/out of Level 3			—			(1	)		—

Balance at March 31, 2017		$	62		$	18,412		$	(2,349	)

Three months ending March 31, 2016
Balance at December 31, 2015		$	100		$	21,403		$	(3,785	)
Gains (losses) included in:
Earnings			—			—			(766	)
Other comprehensive income			2			(1,920	)		(6	)
Regulatory assets and liabilities			—			—			(6	)
Acquisitions, dispositions and settlements			4			—			(14	)
Transfers into/out of Level 3			(1	)		—			—

Balance at March 31, 2016		$	105		$	19,483		$	(4,577	)

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

Quantitative information as of March 31, 2017, 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	$ 7,730	Discounted cash flow	Expected duration		7 years

			Discount for transferability restrictions and subordination		145 basis points

Common stock warrants	10,682	Warrant pricing model	Discount for transferability and hedging restrictions		4%
Net derivative liabilities:

Equity index put options	2,430	Option pricing model	Volatility		19%