Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2018

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

Our financial assets and liabilities are summarized below as of June 30, 2018 and December 31, 2017 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, 2018
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,438	$	3,438	$	2,413	$	1,025	$	—
U.S. states, municipalities and political subdivisions		464		464		—		464		—
Foreign governments		7,565		7,565		5,715		1,850		—
Corporate bonds		6,413		6,413		—		6,408		5
Mortgage-backed securities		644		644		—		644		—
Investments in equity securities		179,729		179,729		179,681		48		—
Investment in Kraft Heinz common stock		17,530		20,444		20,444		—		—
Loans and finance receivables		14,211		14,485		—		87		14,398
Derivative contract assets ⁽¹⁾		149		149		1		30		118
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		93		93		—		75		18
Equity index put options		2,006		2,006		—		—		2,006
Notes payable and other borrowings:
Insurance and other		25,158		25,422		—		25,422		—
Railroad, utilities and energy		62,664		67,284		—		67,284		—
Finance and financial products		8,951		9,148		—		9,121		27
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	$	—
U.S. 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

(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, 2018 and 2017 follow (in millions).


	Investments in equity and fixed maturity securities		Net derivative contract liabilities
Six months ending June 30, 2018
Balance at December 31, 2017	$	6	$	(2,069)
Gains (losses) included in:
Earnings		—		256
Regulatory assets and liabilities		—		(14)
Acquisitions, dispositions and settlements		(1)		(79)

Balance at June 30, 2018	$	5	$	(1,906)

Six months ending June 30, 2017
Balance at December 31, 2016	$	17,321	$	(2,824)
Gains (losses) included in:
Earnings		—		473
Other comprehensive income		1,157		(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	$	8	$	(2,405)

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

Quantitative information as of June 30, 2018, 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
Technique

Unobservable Input

Weighted
Average

Derivative liabilities:

Equity index put options

2,006

Option pricing model

Volatility

17%