Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2021

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

Our financial assets and liabilities are summarized below as of June 30, 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)
June 30, 2021
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,471	$	3,471	$	3,428	$	43	$	—
Foreign governments		12,704		12,704		10,355		2,349		—
Corporate bonds		3,877		3,877		—		3,877		—
Other		408		408		—		408		—
Investments in equity securities		307,942		307,942		295,990		8		11,944
Investment in Kraft Heinz common stock		13,300		13,272		13,272		—		—
Loans and finance receivables		19,900		21,175		—		2,438		18,737
Derivative contract assets ⁽¹⁾		414		414		5		209		200
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		141		141		4		83		54
Equity index put options		355		355		—		—		355
Notes payable and other borrowings:
Insurance and other		40,561		44,162		—		44,118		44
Railroad, utilities and energy		74,662		87,965		—		87,965		—
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 six months ended June 30, 2021 and 2020 follow (in millions).

	Balance at beginning of year			Gains (losses) included in earnings			Acquisitions, dispositions and settlements		Balance at June 30
Investments in equity securities:
2021	$	8,978		$	1,559		$	1,100	$	11,637
2020		10,405			(2,469	)		—		7,936

Equity index put option contract liabilities:
2021		(1,065	)		710			—		(355	)
2020		(968	)		(597	)		—		(1,565	)

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

Quantitative information as of June 30, 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

10,935

Discounted cash flow

Expected duration

8 years

Discount for transferability

restrictions and subordination

355 basis points

Common stock warrants

702

Warrant pricing model

Expected duration

8 years

Volatility

36%

Equity index put option contract liabilities

355

Option pricing model

Volatility

17%