Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2021

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

Our financial assets and liabilities are summarized below as of March 31, 2021 and December 31, 2020, 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)
March 31, 2021
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,280	$	3,280	$	3,237	$	43	$	—
Foreign governments		12,148		12,148		10,039		2,109		—
Corporate bonds		4,170		4,170		—		4,170		—
Other		429		429		—		429		—
Investments in equity securities		282,097		282,097		271,382		8		10,707
Investment in Kraft Heinz common stock		13,380		13,018		13,018		—		—
Loans and finance receivables		19,449		20,738		—		2,500		18,238
Derivative contract assets ⁽¹⁾		301		301		1		99		201
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		105		105		3		66		36
Equity index put options		577		577		—		—		577
Notes payable and other borrowings:
Insurance and other		39,556		42,072		—		42,061		11
Railroad, utilities and energy		74,975		85,357		—		85,357		—
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		—

⁽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 significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the three months ended March 31, 2021 and 2020 follow (in millions).

				Gains (losses) included in:
	Balance at beginning of year			Earnings			Regulatory assets and liabilities		Acquisitions, dispositions and settlements			Balance at March 31
Investments in equity securities:
2021	$	8,978		$	823		$	—	$	600		$	10,401
2020		10,405			(4,861	)		—		—			5,544

Equity index put option contract liabilities:
2021		(1,065	)		489			—		(1	)		(577	)
2020		(968	)		(1,393	)		—		—			(2,361	)

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

Quantitative information as of March 31, 2021 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

9,898

Discounted cash flow

Expected duration

8 years

Discount for transferability

restrictions and subordination

372 basis points

Common stock warrants

503

Warrant pricing model

Expected duration

8 years

Volatility

37%

Equity index put option contract liabilities

577

Option pricing model

Volatility

19%