Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2017

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

Our financial assets and liabilities are summarized below as of December 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, 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, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	3,953		$	3,953		$	2,360		$	1,593		$	—
States, municipalities and political subdivisions			854			854			—			854			—
Foreign governments			8,822			8,822			6,946			1,876			—
Corporate bonds			6,862			6,862			—			6,856			6
Mortgage-backed securities			862			862			—			862			—
Investments in equity securities			170,540			170,540			170,494			46			—
Investment in Kraft Heinz common stock			17,635			25,306			25,306			—			—
Loans and finance receivables			13,748			14,136			—			17			14,119
Derivative contract assets ⁽¹⁾			142			142			1			28			113
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾			82			82			3			69			10
Equity index put options			2,172			2,172			—			—			2,172
Notes payable and other borrowings:
Insurance and other			27,324			28,180			—			28,180			—
Railroad, utilities and energy			62,178			70,538			—			70,538			—
Finance and financial products			13,085			13,582			—			13,577			5
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			1,084			1,084			—			1,084			—
Investments in equity securities			139,288			139,288			122,031			—			17,257
Investment in Kraft Heinz common stock			15,345			28,418			28,418			—			—
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 each of the three years ending December 31, 2017 follow (in millions).


	Investments in fixed maturity securities			Investments in equity securities			Net derivative contract liabilities
Balance 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 December 31, 2015		100			21,403			(3,785	)
Gains (losses) included in:
Earnings		—			3,593			880
Other comprehensive income		(4	)		876			(2	)
Regulatory assets and liabilities		—			—			(11	)
Acquisitions		10			—			—
Dispositions and settlements		(41	)		(8,615	)		(101	)
Transfers into/out of Level 3		(1	)		—			195

Balance December 31, 2016		64			17,257			(2,824	)
Gains (losses) included in:
Earnings		—			—			888
Other comprehensive income		1			1,156			(3	)
Regulatory assets and liabilities		—			—			(1	)
Dispositions and settlements		(59	)		—			(129	)
Transfers into/out of Level 3		—			(18,413	)		—

Balance December 31, 2017	$	6		$	—		$	(2,069	)

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

Quantitative information as of December 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

Derivative liabilities:

Equity index put options

2,172

Option pricing model

Volatility

17%