Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2020

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

Our financial assets and liabilities are summarized below as of September 30, 2020 and December 31, 2019, with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, other 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, 2020
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,377	$	3,377	$	3,331	$	46	$	—
Foreign governments		9,969		9,969		6,890		3,079		—
Corporate bonds		5,574		5,574		—		5,574		—
Other		515		515		—		515		—
Investments in equity securities		245,317		245,317		236,804		38		8,475
Investment in Kraft Heinz common stock		13,101		9,747		9,747		—		—
Loans and finance receivables		18,584		19,737		—		2,509		17,228
Derivative contract assets ⁽¹⁾		261		261		2		64		195
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		109		109		5		93		11
Equity index put options		1,547		1,547		—		—		1,547
Notes payable and other borrowings:
Insurance and other		38,891		43,439		—		43,426		13
Railroad, utilities and energy		68,800		84,315		—		84,315		—
December 31, 2019
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,090	$	3,090	$	3,046	$	44	$	—
Foreign governments		8,638		8,638		5,437		3,201		—
Corporate bonds		6,352		6,352		—		6,350		2
Other		605		605		—		605		—
Investments in equity securities		248,027		248,027		237,271		46		10,710
Investment in Kraft Heinz common stock		13,757		10,456		10,456		—		—
Loans and finance receivables		17,527		17,861		—		1,809		16,052
Derivative contract assets ⁽¹⁾		145		145		—		23		122
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		76		76		6		59		11
Equity index put options		968		968		—		—		968
Notes payable and other borrowings:
Insurance and other		37,590		40,589		—		40,569		20
Railroad, utilities and energy		65,778		76,237		—		76,237		—

⁽¹⁾	^{Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.}

Reconciliations of significant 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 ended September 30, 2020 and 2019 follow (in millions).

				Gains (losses) included in:
	Balance at beginning of year			Earnings			Regulatory assets and liabilities			Acquisitions, dispositions and settlements			Balance at September 30
Investments in fixed maturity and equity securities:
2020	$	10,407		$	(2,235	)	$	—		$	(2	)	$	8,170
2019		7			499			—			10,002			10,508

Net derivative contract liabilities:
2020		(857	)		(72	)		(36	)		(398	)		(1,363	)
2019		(2,343	)		1,528			(41	)		(282	)		(1,138	)

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

Quantitative information as of September 30, 2020 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 (dollars in millions).

Fair

Value

Principal Valuation

Techniques

Unobservable

Inputs

Weighted

Average

Investments in equity securities:

Preferred stock

8,159

Discounted cash flow

Expected duration

9 years

Discount for transferability

restrictions and subordination

375 basis points

Common stock warrants

Warrant pricing model

Expected duration

9 years

Volatility

28%

Derivative contract liabilities

1,547

Option pricing model

Volatility

20%