Berkshire Hathaway 2011 Annual Report Download - page 46

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Notes to Consolidated Financial Statements (Continued)
(10) Property, plant and equipment (Continued)
Property, plant and equipment of our railroad, utilities and energy businesses is comprised of the following (in millions).
Ranges of
estimated useful life
December 31,
2011 2010
Railroad:
Land ............................................................. — $ 5,925 $ 5,901
Track structure and other roadway ..................................... 5–100years 36,760 35,463
Locomotives, freight cars and other equipment ........................... 5–37years 5,533 4,329
Construction in progress ............................................. — 885 453
Utilities and energy:
Utility generation, distribution and transmission system .................... 5–80years 40,180 37,643
Interstate pipeline assets ............................................. 3–80years 6,245 5,906
Independent power plants and other assets ............................... 3–30years 1,106 1,097
Construction in progress ............................................. — 1,559 1,456
98,193 92,248
Accumulated depreciation ................................................ (15,979) (14,863)
$ 82,214 $ 77,385
Railroad property, plant and equipment include the land, other roadway, track structure and rolling stock (primarily
locomotives and freight cars) of BNSF. The utility generation, distribution and transmission system and interstate pipeline
assets are the regulated assets of public utility and natural gas pipeline subsidiaries.
(11) Derivative contracts
Derivative contracts are used primarily by our finance and financial products, railroad and utilities and energy businesses.
As of December 31, 2011 and December 31, 2010, substantially all of the derivative contracts of our finance and financial
products businesses were not designated as hedges for financial reporting purposes. These contracts were initially entered into
with the expectation that the premiums received would exceed the amounts ultimately paid to counterparties. Changes in the fair
values of such contracts are reported in earnings as derivative gains/losses. A summary of derivative contracts of our finance
and financial products businesses follows (in millions).
December 31, 2011 December 31, 2010
Assets (3) Liabilities
Notional
Value Assets (3) Liabilities
Notional
Value
Equity index put options ................................. $ — $ 8,499 $34,014(1) $ — $6,712 $33,891(1)
Credit default contracts:
High yield indexes ................................. — 198 4,489(2) — 159 4,893(2)
States/municipalities ................................ — 1,297 16,042(2) — 1,164 16,042(2)
Individual corporate ................................ 55 32 3,565(2) 84 — 3,565(2)
Other ................................................ 268 156 341 375
Counterparty netting .................................... (67) (43) (82) (39)
$256 $10,139 $343 $8,371
(1) Represents the aggregate undiscounted amount payable at the contract expiration dates assuming that the value of each
index is zero at the contract expiration date.
(2) Represents the maximum undiscounted future value of losses payable under the contracts. The number of losses required to
exhaust contract limits under substantially all of the contracts is dependent on the loss recovery rate related to the specific
obligor at the time of a default.
(3) Included in other assets of finance and financial products businesses.
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