Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2020

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

Our financial assets and liabilities are summarized below as of December 31, 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, 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, 2020
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,403	$	3,403	$	3,358	$	45	$	—
Foreign governments		11,338		11,338		9,259		2,079		—
Corporate bonds		5,191		5,191		—		5,191		—
Other		478		478		—		478		—
Investments in equity securities		281,170		281,170		271,848		38		9,284
Investment in Kraft Heinz common stock		13,336		11,280		11,280		—		—
Loans and finance receivables		19,201		20,554		—		2,692		17,862
Derivative contract assets ⁽¹⁾		270		270		1		72		197
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		121		121		6		96		19
Equity index put options		1,065		1,065		—		—		1,065
Notes payable and other borrowings:
Insurance and other		41,522		46,676		—		46,665		11
Railroad, utilities and energy		75,373		92,593		—		92,593		—

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 each of the three years ending December 31, 2020 follow (in millions).

	Investments in equity and fixed maturity securities			Net derivative contract liabilities
Balance December 31, 2017	$	6		$	(2,069	)
Gains (losses) included in:
Earnings		—			(118	)
Other comprehensive income		—			2
Regulatory assets and liabilities		—			3
Acquisitions		2			3
Dispositions and settlements		(1	)		(164	)
Balance December 31, 2018		7			(2,343	)
Gains (losses) included in:
Earnings		404			1,972
Other comprehensive income		—			(1	)
Regulatory assets and liabilities		—			(26	)
Acquisitions		10,000			6
Dispositions and settlements		(4	)		(465	)
Balance December 31, 2019		10,407			(857	)
Gains (losses) included in:
Earnings		(1,426	)		603
Other comprehensive income		—			—
Regulatory assets and liabilities		—			(17	)
Acquisitions		—			5
Dispositions and settlements		(2	)		(621	)
Balance December 31, 2020	$	8,979		$	(887	)

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

Quantitative information as of December 31, 2020, 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

Investments in equity securities:

Preferred stock

8,891

Discounted cash flow

Expected duration

9 years

Discount for transferability restrictions and subordination

375 bps

Common stock warrants

Warrant pricing model

Expected duration

9 years

Volatility

32%

Derivative contract liabilities

1,065

Option pricing model

Volatility

19%