Berkshire Hathaway 2001 Annual Report Download - page 43

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Notes to Consolidated Financial Statements (Continued)
(17) Insurance premium and supplemental cash flow information (Continued)
A summary of supplemental cash flow information is presented in the following table (in millions).
2001 2000 1999
Cash paid during the year for:
Income taxes............................................................................................................... $ 905 $1,396 $2,215
Interest of finance and financial products businesses ................................................. 672 794 513
Other interest .............................................................................................................. 225 157 136
Non-cash investing and financing activities:
Liabilities assumed in connection with acquisitions of businesses............................. 3,507 901 61
Common shares issued in connection with acquisitions of businesses....................... — 224 —
Contingent value of Exchange Notes recognized in earnings..................................... 105 117 87
Value of equity securities used to redeem Exchange Notes ....................................... 228 278 298
(18) Pension plans
Certain Berkshire insurance and non-insurance subsidiaries individually sponsor defined benefit pension plans
covering their employees. Benefits under the plans are generally based on years of service and compensation, although
benefits under certain plans are based on years of service and fixed benefit rates. Funding policies are generally to
contribute amounts required to meet regulatory requirements plus additional amounts determined by management based
on actuarial valuations. Most U.S. plans are funded through assets held in trust. However, pension obligations under
plans for non-U.S. employees are unfunded. Plan assets are primarily invested in fixed income obligations of U.S.
Government Corporations and agencies and cash equivalents and equity securities.
The components of net periodic pension expense for all plans are as follows (in millions).
2001 2000 1999
Service cost ...................................................................................................................... $ 71 $ 44 $ 44
Interest cost ...................................................................................................................... 140 73 66
Expected return on plan assets.......................................................................................... (136) (73) (66)
Net amortization, deferral and other................................................................................. 2 (2) 6
Net pension expense......................................................................................................... $ 77 $ 42 $ 50
Changes in projected benefit obligations and plan assets are as follows (in millions).
2001 2000
Projected benefit obligation, beginning of year................................................................ $1,335 $ 978
Service cost ...................................................................................................................... 71 44
Interest cost ...................................................................................................................... 140 73
Benefits paid..................................................................................................................... (101) (53)
Benefit obligations of acquired businesses....................................................................... 730 257
Actuarial (gain) loss and other.......................................................................................... 208 36
Projected benefit obligation, end of year.......................................................................... $2,383 $1,335
Plan assets at fair value, beginning of year....................................................................... $1,433 $1,015
Employer contributions .................................................................................................... 34 10
Benefits paid..................................................................................................................... (98) (49)
Plan assets of acquired businesses.................................................................................... 707 346
Actual return on plan assets.............................................................................................. 140 112
Expenses and other........................................................................................................... (2) (1)
Plan assets at fair value, end of year................................................................................. $2,214 $1,433
The funded status of the plans is as follows (in millions).
Dec. 31,
2001 Dec. 31, 2000
Plan assets over (under) benefit obligations ...................................................................... $ (169) $ 98
Unrecognized net actuarial gains and other....................................................................... (107) (308)
Accrued benefit cost liability............................................................................................. $ (276) $ (210)