Berkshire Hathaway 2007 Annual Report Download - page 45

44
Notes to Consolidated Financial Statements (Continued)
(17) Pension plans (Continued)
The defined benefit plans expect to pay benefits to participants over the next ten years, reflecting expected future service as
appropriate, as follows (in millions): 2008 - $418; 2009 - $415; 2010 - $419; 2011 - $435; 2012 - $459; and 2013 to 2017 - $2,594.
Sponsoring subsidiaries expect to contribute $265 million to defined benefit pension plans in 2008.
As of December 31, 2007 and 2006, the net funded status of the plans is summarized in the table that follows (in millions).
2007 2006
Amounts recognized in the Consolidated Balance Sheets:
Other liabilities ................................................................................................................................ $ 981 $1,398
Other assets...................................................................................................................................... (361) (264)
Amounts recognized.............................................................................................................................. $ 620 $1,134
A reconciliation of amounts not yet recognized as components of net periodic benefit costs for the years ending December 31,
2007 and 2006 follows (in millions).
Net amount included in accumulated other comprehensive income, beginning of year ........................ $(303) $ (392)
Amount included in net periodic pension expense........................................................................... 25 45
Gains and losses current period ....................................................................................................... 114 322
Adoption of SFAS 158..................................................................................................................... — (278)
Net amount included in accumulated other comprehensive income, end of year .................................. $(164) $(303)
Amount included in accumulated other comprehensive income as of December 31, 2007 and
expected to be included in net periodic pension expense next year (in millions)............................. $ 22
Weighted average interest rate assumptions used in determining projected benefit obligations were as follows. These rates are
substantially the same as the weighted average rates used in determining the net periodic pension expense.
2007 2006
Discount rate ....................................................................................................................................................... 6.1 5.7
Expected long-term rate of return on plan assets................................................................................................. 6.9 6.9
Rate of compensation increase ............................................................................................................................ 4.4 4.4
Several Berkshire subsidiaries also sponsor defined contribution retirement plans, such as 401(k) or profit sharing plans.
Employee contributions to the plans are subject to regulatory limitations and the specific plan provisions. Several of the plans require
that the subsidiary match these contributions up to levels specified in the plans and provide for additional discretionary contributions
as determined by management. The total expenses related to employer contributions for these plans were $506 million, $498 million
and $395 million for the years ended December 31, 2007, 2006 and 2005, respectively.
(18) Business segment data
Berkshire’ s reportable business segments are organized in a manner that reflects how management views those business
activities. Certain businesses have been grouped together for segment reporting based upon similar products or product lines,
marketing, selling and distribution characteristics, even though those business units are operated under separate local management.
The tabular information that follows shows data of reportable segments reconciled to amounts reflected in the Consolidated
Financial Statements. Intersegment transactions are not eliminated in instances where management considers those transactions in
assessing the results of the respective segments. Furthermore, Berkshire management does not consider investment and derivative
gains/losses or amortization of purchase accounting adjustments in assessing the performance of reporting units. Collectively, these
items are included in reconciliations of segment amounts to consolidated amounts.
Business Identity Business Activity
GEICO Underwriting private passenger automobile insurance mainly by
direct response methods
General Re Underwriting excess-of-loss, quota-share and facultative
reinsurance worldwide
Berkshire Hathaway Reinsurance Group Underwriting excess-of-loss and quota-share reinsurance for
property and casualty insurers and reinsurers
Berkshire Hathaway Primary Group Underwriting multiple lines of property and casualty insurance
policies for primarily commercial accounts
BH Finance, Clayton Homes, XTRA, CORT and other
financial services (“Finance and financial products”)
Proprietary investing, manufactured housing and related consumer
financing, transportation equipment leasing, furniture leasing, life
annuities and risk management products
McLane Company Wholesale distribution of groceries and non-food items
MidAmerican Regulated electric and gas utility, including power generation and
distribution activities in the U.S. and internationally; domestic real
estate brokerage
Shaw Industries Manufacturing and distribution of carpet and floor coverings under
a variety of brand names