Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2017

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

Our financial assets and liabilities are summarized below as of June 30, 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, 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)
June 30, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$ 4,792		$ 4,792		$ 3,326		$ 1,466		$ —
States, municipalities and political subdivisions		1,103		1,103		—		1,103		—
Foreign governments		8,922		8,922		7,143		1,779		—
Corporate bonds		7,559		7,559		—		7,552		7
Mortgage-backed securities		1,035		1,035		—		1,035		—
Investments in equity securities		137,113		137,113		137,104		8		1
Investment in Kraft Heinz common stock		15,584		27,871		27,871		—		—
Other investments		20,234		20,234		—		20,234		—
Loans and finance receivables		14,559		15,015		—		1,095		13,920
Derivative contract assets ⁽¹⁾		123		123		2		15		106
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		139		139		2		120		17
Equity index put options		2,494		2,494		—		—		2,494
Notes payable and other borrowings:
Insurance and other		27,781		28,489		—		28,489		—
Railroad, utilities and energy		60,701		68,603		—		68,603		—
Finance and financial products		13,788		14,296		—		13,973		323

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 six months ending June 30, 2017 and 2016 follow (in millions).


	Investments in fixed maturity securities		Investments in equity securities and other investments				Net derivative contract liabilities
Six months ending June 30, 2017
Balance at December 31, 2016		$ 64		$	17,257			$	(2,824	)
Gains (losses) included in:
Earnings		—			—				473
Other comprehensive income		1			1,156				(2	)
Regulatory assets and liabilities		—			—				(2	)
Acquisitions, dispositions and settlements		(58)			—				(50	)
Transfers into/out of Level 3		—			(18,412	)			—

Balance at June 30, 2017		$ 7		$	1			$	(2,405	)

Six months ending June 30, 2016
Balance at December 31, 2015		$100		$	21,403			$	(3,785	)
Gains (losses) included in:
Earnings		—			—				(737	)
Other comprehensive income		1			(927	)			—
Regulatory assets and liabilities		—			—				(11	)
Acquisitions, dispositions and settlements		5			—				(35	)
Transfers into/out of Level 3		(1)			—				195

Balance at June 30, 2016		$105		$	20,476			$	(4,373	)

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

Quantitative information as of June 30, 2017, with respect to significant 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

Derivative contract liabilities:

Equity index put options

2,494

Option pricing model

Volatility

19%