Berkshire Hathaway 2014 Annual Report Download - page 84

Notes to Consolidated Financial Statements (Continued)
(22) Contingencies and Commitments (Continued)
On November 13, 2014 Berkshire entered into a definitive agreement with Procter & Gamble Company (“P&G”) whereby
it will acquire the Duracell battery business from P&G. Pursuant to the agreement, in exchange for a recapitalized Duracell
Company, which will include approximately $1.7 billion in cash at closing, P&G will receive shares of its common stock
currently held by Berkshire subsidiaries having a fair value at December 31, 2014 of approximately $4.8 billion. The transaction
is expected to close in the second half of 2015 and is subject to obtaining various regulatory approvals as well as certain other
customary closing conditions.
We own a 50% interest in a joint venture, Berkadia Commercial Mortgage LLC (“Berkadia”), with Leucadia National
Corporation (“Leucadia”) owning the other 50% interest. Berkadia is a servicer of commercial real estate loans in the U.S.,
performing primary, master and special servicing functions for U.S. government agency programs, commercial mortgage-
backed securities transactions, banks, insurance companies and other financial institutions. A significant source of funding for
Berkadia’s operations is through the issuance of commercial paper. Repayment of the commercial paper is supported by a $2.5
billion surety policy issued by a Berkshire insurance subsidiary. Leucadia has agreed to indemnify us for one-half of any losses
incurred under the policy. As of December 31, 2014, the aggregate amount of Berkadia commercial paper outstanding was
$2.47 billion.
(23) Business segment data
Our operating businesses include a large and diverse group of insurance, finance, manufacturing, service and retailing
businesses. Our 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 our
Consolidated Financial Statements. Intersegment transactions are not eliminated when management considers those transactions
in assessing the results of the respective segments. Furthermore, our management does not consider investment and derivative
gains/losses or amortization of purchase accounting adjustments related to Berkshire’s acquisition 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
insurers and reinsurers
Berkshire Hathaway Primary Group Underwriting multiple lines of property and casualty
insurance policies for primarily commercial accounts
BNSF Operates one of the largest railroad systems in North
America
Berkshire Hathaway Energy Regulated electric and gas utility, including power
generation and distribution activities, and domestic real
estate brokerage and brokerage franchisor
McLane Company Wholesale distribution of groceries and non-food items
Manufacturing Manufacturers of numerous products including industrial and
end-user products, building products and apparel
Service and retailing Providers of numerous services including fractional aircraft
ownership programs, aviation pilot training, electronic
components distribution and retailing
Finance and financial products Manufactured housing and related consumer financing;
transportation equipment, manufacturing and leasing; and
furniture leasing
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