Berkshire Hathaway 2015 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2015 Berkshire Hathaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

Notes to Consolidated Financial Statements (Continued)
(2) Significant business acquisitions
Our long-held acquisition strategy is to acquire businesses at sensible prices that have consistent earning power, good
returns on equity and able and honest management. Financial results attributable to business acquisitions are included in our
Consolidated Financial Statements beginning on their respective acquisition dates.
In the first quarter of 2015, Berkshire acquired the Van Tuyl Group (now named Berkshire Hathaway Automotive), which
included 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto auctions and a
distributor of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire
Hathaway Automotive group offers repair and other services and products, including extended warranty services and other
automotive protection plans. Consideration paid for the acquisition was $4.1 billion. On December 1, 2014, we acquired
AltaLink, L.P. (“AltaLink”) for a cash purchase price of C$3.1 billion (approximately $2.7 billion). AltaLink is a regulated
electric transmission-only business, headquartered in Calgary, Alberta. The goodwill related to the AltaLink acquisition is not
amortizable for income tax purposes, while substantially all of the goodwill related to Berkshire Hathaway Automotive is
amortizable for income tax purposes.
The fair values of identified assets acquired and liabilities assumed and residual goodwill of Berkshire Hathaway
Automotive and AltaLink at their respective acquisition dates are summarized as follows (in millions).
Berkshire Hathaway
Automotive AltaLink
Cash and investments ............................................................. $1,274 $ 15
Inventories ..................................................................... 1,219 —
Property, plant and equipment ...................................................... 1,045 5,610
Goodwill ....................................................................... 1,833 1,744
Other assets ..................................................................... 1,269 300
Assets acquired .................................................................. $6,640 $7,669
Accounts payable, accruals and other liabilities ........................................ $1,399 $1,090
Notes payable and other borrowings ................................................. 1,129 3,851
Liabilities assumed ............................................................... $2,528 $4,941
Net assets ...................................................................... $4,112 $2,728
The following table sets forth certain unaudited pro forma consolidated earnings data for 2014 as if the acquisitions
discussed previously were consummated on the same terms at the beginning of the year preceding their respective acquisition
dates (in millions, except per share amount). Pro forma data for 2015 was not materially different from the amounts reflected in
the Consolidated Statement of Earnings.
2014
Revenues ..................................................................................... $203,514
Net earnings attributable to Berkshire Hathaway shareholders ............................................ 20,048
Net earnings per equivalent Class A common share attributable to Berkshire Hathaway shareholders ............. 12,199
On January 1, 2014, we acquired the beverage dispensing equipment manufacturing and merchandising operations of
British engineering company, IMI plc for approximately $1.12 billion. On February 25, 2014, we acquired 100% of the
outstanding common stock of Phillips Specialty Products Inc. (“PSPI”) from Phillips 66 (“PSX”) in exchange for 17,422,615
shares of PSX common stock with an aggregate fair value of $1.35 billion. PSPI, which has been renamed as Lubrizol Specialty
Products Inc. (“LSPI”), provides flow improver products to customers worldwide. Assets of PSPI included cash of
approximately $450 million. On June 30, 2014, we acquired WPLG, Inc. (“WPLG”) from Graham Holding Company (“GHC”)
in exchange for 1,620,190 shares of GHC common stock with an aggregate fair value of $1.13 billion. At the date of the
acquisition, the assets of WPLG, which operates a Miami, Florida, ABC affiliated television station, included 2,107 shares of
Berkshire Hathaway Class A common stock, 1,278 shares of Berkshire Hathaway Class B common stock and cash of $328
million. At their respective acquisition dates, the aggregate fair value of the identified net assets related to these acquisitions was
approximately $2.2 billion and the residual goodwill was approximately $1.4 billion.
47