Berkshire Hathaway 2007 Annual Report Download - page 41

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Notes to Consolidated Financial Statements (Continued)
(12) Notes payable and other borrowings (Continued)
2007 2006
Finance and financial products:
Issued by Berkshire Hathaway Finance Corporation (“BHFC”) and guaranteed by Berkshire:
Notes due 2007 ............................................................................................................................ $ — $ 700
Notes due 2008 ............................................................................................................................ 3,100 3,098
Notes due 2010 ............................................................................................................................ 1,996 1,994
Notes due 2012-2015 ................................................................................................................... 3,790 3,039
Issued by other subsidiaries and guaranteed by Berkshire due 2008-2027 ........................................ 804 398
Issued by other subsidiaries and not guaranteed by Berkshire due 2008-2030 .................................. 2,454 2,732
$12,144 $11,961
BHFC, a wholly-owned subsidiary of Berkshire, issued senior notes at various times in recent years. In the third quarter of
2007, BHFC issued $750 million par amount of senior notes due in 2012. BHFC issued $2 billion par amount of senior notes in
January 2008, including $1.5 billion par amount of notes due in 2011 and $500 million par amount of notes due in 2013 and repaid
maturing notes of $1.25 billion par amount. Borrowings by BHFC are used to provide financing for installment loans issued or
acquired by subsidiaries of Clayton Homes. At December 31, 2007, debt issued by other finance subsidiaries and not guaranteed by
Berkshire includes approximately $1.4 billion whereby all principal and interest collected under certain manufactured housing loan
portfolios, together with any repurchased principal on such loans will be used to pay the principal and interest on these borrowings.
During 2007, XTRA Finance Corporation, a wholly owned subsidiary, issued $400 million par amount of senior notes due 2017,
which is included in other subsidiary borrowings guaranteed by Berkshire.
Berkshire subsidiaries in the aggregate have approximately $4.8 billion of available unused lines of credit and commercial
paper capacity to support their short-term borrowing programs and provide additional liquidity. Generally, Berkshire’ s guarantee of
a subsidiary’ s debt obligation is an absolute, unconditional and irrevocable guarantee for the full and prompt payment when due of all
present and future payment obligations of the issuer.
Principal payments expected during the next five years are as follows (in millions).
2008 2009 2010 2011 2012
Insurance and other........................................................................ $1,268 $ 298 $ 55 $ 12 $ 21
Utilities and energy........................................................................ 2,096 422 140 1,138 1,461
Finance and financial products ...................................................... 3,938 198 2,165 139 1,632
$7,302 $ 918 $2,360 $1,289 $3,114
(13) Income taxes
The liability for income taxes as of December 31, 2007 and 2006 as reflected in the accompanying Consolidated Balance
Sheets is as follows (in millions).
2007 2006
Payable currently............................................................................................. $ (182) $ 189
Deferred........................................................................................................... 18,156 18,271
Other................................................................................................................ 851 710
$18,825 $19,170
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at
December 31, 2007 and 2006 are shown below (in millions).
2007 2006
Deferred tax liabilities:
Investments – unrealized appreciation and cost basis differences ................ $13,501 $14,520
Deferred charges reinsurance assumed......................................................... 1,395 687
Property, plant and equipment...................................................................... 4,890 4,775
Other ............................................................................................................ 2,743 2,591
22,529 22,573
Deferred tax assets:
Unpaid losses and loss adjustment expenses ................................................ (756) (681)
Unearned premiums ..................................................................................... (425) (443)
Accrued liabilities ........................................................................................ (1,259) (1,335)
Other ............................................................................................................ (1,933) (1,843)
(4,373) (4,302)
Net deferred tax liability.................................................................................. $18,156 $18,271