Berkshire Hathaway 2001 Annual Report Download - page 30

29
(1) Significant accounting policies and practices (Continued)
(n) Accounting pronouncements to be adopted subsequent to December 31, 2001 (Continued)
SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” generally retains the
basic accounting model for the identification and measurement of impairments to long-lived assets to be
held and such assets to be disposed. SFAS No. 144 also addresses several implementation and financial
statement presentation issues not previously addressed under GAAP. The provisions of SFAS No. 144
will be effective for Berkshire at the beginning of 2002.
Although Berkshire has not completed its assessment of these new accounting standards, it expects that the
provisions of SFAS No. 142 related to accounting for goodwill will have a significant impact on its
consolidated earnings in 2002 when compared to consolidated earnings for years prior to 2002. The
accompanying Consolidated Statement of Earnings for 2001 includes goodwill amortization of $572
million. Additionally Berkshire’ s equity income from its investment in MidAmerican Energy Holdings
Company includes its share of MidAmerican’ s $96 million of goodwill amortization.
(2) Significant business acquisitions
During 2001, Berkshire completed four significant business acquisitions. Information concerning these
acquisitions follows.
Shaw Industries, Inc. (“Shaw”)
On January 8, 2001, Berkshire acquired approximately 87.3% of the common stock of Shaw for $19 per share or
$2.1 billion in total. An investment group consisting of Robert E. Shaw, Chairman and CEO of Shaw, Julian D. Saul,
President of Shaw, certain family members and related family interests of Messrs. Shaw and Saul, and certain other
directors and members of management acquired the remaining 12.7% of Shaw. In January 2002, Berkshire acquired all
of the shares of Shaw held by the investment group in exchange for 4,505 shares of Berkshire Class A common stock
and 7,063 shares of Class B common stock.
Shaw is the world’ s largest manufacturer of tufted broadloom carpet and rugs for residential and commercial
applications throughout the U.S. and exports to most markets worldwide. Shaw markets its residential and commercial
products under a variety of brand names.
Johns Manville Corporation (“Johns Manville”)
On February 27, 2001, Berkshire acquired Johns Manville. Berkshire purchased all of the outstanding shares of
Johns Manville common stock for $13 per share or $1.8 billion in total. Johns Manville is a leading manufacturer of
insulation and building products. Johns Manville manufactures and markets products for building and equipment
insulation, commercial and industrial roofing systems, high-efficiency filtration media, and fibers and non-woven mats
used as reinforcements in building and industrial applications.
MiTek Inc. (“MiTek”)
On July 31, 2001, Berkshire acquired a 90% equity interest in MiTek from Rexam PLC for approximately $400
million. Existing MiTek management acquired the remaining 10% interest. MiTek, headquartered in Chesterfield,
Missouri, produces steel connector products, design engineering software and ancillary services for the building
components market.
XTRA Corporation (“XTRA”)
On September 20, 2001, Berkshire acquired XTRA through a cash tender offer and subsequent statutory merger
for all of the outstanding shares. Holders of XTRA common stock received aggregate consideration of approximately
$578 million. XTRA, headquartered in Westport, Connecticut, is a leading operating lessor of transportation
equipment, including over-the-road trailers, marine containers and intermodal equipment.
In addition, Berkshire completed six significant acquisitions in 2000. Information concerning five of these
acquisitions follows. Information concerning the other acquisition is contained in Note 3 (Investments in MidAmerican
Energy Holdings Company).
CORT Business Services Corporation (“CORT”)
Effective February 18, 2000, Wesco Financial Corporation, an indirect 80.1% owned subsidiary of Berkshire,
acquired CORT. CORT is a leading national provider of rental furniture, accessories and related services in the “rent-
to-rent” segment of the furniture industry.
Ben Bridge Jeweler (“Ben Bridge”)
Effective July 3, 2000, Berkshire acquired Ben Bridge. Ben Bridge is the leading operator of upscale jewelry
stores based in major shopping malls in the Western U.S.