v3.26.1
Fair value measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair value measurements

Note 17. Fair value measurements

Our financial assets and liabilities are summarized below, 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 or otherwise approximate the fair values.

 

Carrying
Value

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in fixed maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury, U.S. government corporations
   and agencies

$

3,880

 

 

$

3,880

 

 

$

3,847

 

 

$

33

 

 

$

—

 

Foreign governments

 

12,391

 

 

 

12,391

 

 

 

12,268

 

 

 

123

 

 

 

—

 

Corporate and other

 

1,398

 

 

 

1,398

 

 

 

—

 

 

 

964

 

 

 

434

 

Investments in equity securities

 

288,034

 

 

 

288,034

 

 

 

277,285

 

 

 

10

 

 

 

10,739

 

Investments in Kraft Heinz & Occidental common stock

 

19,497

 

 

 

24,545

 

 

 

24,545

 

 

 

—

 

 

 

—

 

Loans and finance receivables

 

30,101

 

 

 

29,655

 

 

 

—

 

 

 

223

 

 

 

29,432

 

Other assets

 

193

 

 

 

193

 

 

 

13

 

 

 

168

 

 

 

12

 

Other liabilities

 

365

 

 

 

365

 

 

 

15

 

 

 

281

 

 

 

69

 

Notes payable and other borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance and other

 

42,835

 

 

 

37,441

 

 

 

—

 

 

 

37,418

 

 

 

23

 

Railroad, utilities and energy

 

86,051

 

 

 

78,118

 

 

 

—

 

 

 

78,118

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in fixed maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury, U.S. government corporations
   and agencies

$

3,849

 

 

$

3,849

 

 

$

3,815

 

 

$

34

 

 

$

—

 

Foreign governments

 

12,542

 

 

 

12,542

 

 

 

12,411

 

 

 

131

 

 

 

—

 

Corporate and other

 

1,425

 

 

 

1,425

 

 

 

—

 

 

 

983

 

 

 

442

 

Investments in equity securities

 

297,778

 

 

 

297,778

 

 

 

288,232

 

 

 

10

 

 

 

9,536

 

Investments in Kraft Heinz & Occidental common stock

 

19,528

 

 

 

18,791

 

 

 

18,791

 

 

 

—

 

 

 

—

 

Loans and finance receivables

 

29,836

 

 

 

30,532

 

 

 

—

 

 

 

294

 

 

 

30,238

 

Other assets

 

141

 

 

 

141

 

 

 

13

 

 

 

119

 

 

 

9

 

Other liabilities

 

188

 

 

 

188

 

 

 

13

 

 

 

119

 

 

 

56

 

Notes payable and other borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance and other

 

45,763

 

 

 

40,924

 

 

 

—

 

 

 

40,892

 

 

 

32

 

Railroad, utilities and energy

 

83,318

 

 

 

76,803

 

 

 

—

 

 

 

76,803

 

 

 

—

 

 

Notes to Consolidated Financial Statements

Note 17. Fair value measurements

The fair values of substantially all of our financial instruments were measured using market or income approaches. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.

Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.

Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector.

Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or 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) follow (in millions).

 

Balance at the beginning of the year

 

 

Gains (losses)
in earnings

 

 

Balance at
March 31

 

Investments in equity securities:

 

 

 

 

 

 

 

 

2026

$

9,529

 

 

$

1,203

 

 

$

10,732

 

2025

 

9,663

 

 

 

117

 

 

 

9,780

 

Quantitative information as of March 31, 2026 for the 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

$

8,825

 

 

Discounted cash flow

 

Expected duration

 

4 years

 

 

 

 

 

Discounts for liquidity
   and subordination

 

325 bps

Common stock warrants

 

1,907

 

 

Warrant pricing model

 

Expected duration

 

5 years

 

 

 

 

 

Volatility

 

43%

Investments in equity securities in the preceding table include our investments in certain preferred and common stock warrants, which do not have readily determinable market values as defined by GAAP. These investments are private placements and are not traded in securities markets. We applied discounted cash flow techniques in valuing the preferred stock and we made assumptions regarding the expected duration of the investment and the effects of illiquidity and subordination in liquidation. In valuing the common stock warrants, we used a warrant valuation model. While most of the inputs to the warrant model are observable, we made assumptions regarding the expected duration and volatility.