BERKSHIRE HATHAWAY INC.

(Parent Company)

Condensed Financial Information

(Dollars in millions)

Schedule I

Balance Sheets

 

		December 31,
		2018				2017
Assets:
Cash and cash equivalents		$	3,437			$	4,039
Short-term investments in U.S. Treasury Bills			22,957				13,132
Investments in and advances to/from consolidated subsidiaries			328,898				335,668
Investment in The Kraft Heinz Company			13,813				17,635
Other assets			80				79
		$	369,185			$	370,553
Liabilities and Shareholders’ Equity:
Accounts payable, accrued interest and other liabilities		$	1,507			$	196
Income taxes, principally deferred			2,104				3,294
Notes payable and other borrowings			16,871				18,767
			20,482				22,257
Berkshire Hathaway shareholders’ equity			348,703				348,296
		$	369,185			$	370,553

Statements of Earnings and Comprehensive Income

 

		Year ended December 31,
		2018				2017				2016
Income items:
From consolidated subsidiaries:
Dividends		$	9,658			$	5,367			$	9,862
Undistributed earnings (losses)			(3,952	)			37,832				13,264
			5,706				43,199				23,126
Investment gains (losses)			(4	)			(1	)			700
Equity in net earnings (losses) of The Kraft Heinz Company			(2,730	)			2,938				923
Other income			649				350				262
			3,621				46,486				25,011
Cost and expense items:
General and administrative			216				159				80
Interest expense			601				522				452
Foreign exchange (gains) losses Euro-denominated senior notes			(366	)			1,008				(244	)
Income tax expense (benefit)			(851	)			(143	)			649
			(400	)			1,546				937
Net earnings attributable to Berkshire Hathaway shareholders			4,021				44,940				24,074
Other comprehensive income attributable to Berkshire Hathaway shareholders			(2,211	)			21,273				3,316
Comprehensive income attributable to Berkshire Hathaway shareholders		$	1,810			$	66,213			$	27,390

See Note to Condensed Financial Information

 

BERKSHIRE HATHAWAY INC.

(Parent Company)

Condensed Financial Information

(Dollars in millions)

Schedule I (continued)

Statements of Cash Flows

 

		Year ended December 31,
		2018				2017				2016
Cash flows from operating activities:
Net earnings attributable to Berkshire Hathaway shareholders		$	4,021			$	44,940			$	24,074
Adjustments to reconcile net earnings to cash flows from operating activities:
Investment gains (losses)			4				1				(700	)
Undistributed earnings of consolidated subsidiaries			3,952				(37,832	)			(13,264	)
Income taxes payable			(972	)			(135	)			629
Other			3,062				(1,234	)			(161	)
Net cash flows from operating activities			10,067				5,740				10,578
Cash flows from investing activities:
Redemption of Kraft Heinz Company preferred stock			—				—				8,320
Investments in and advances to/from consolidated subsidiaries, net			460				(239	)			(26,398	)
Purchases of U.S. Treasury Bills			(29,740	)			(19,663	)			(9,350	)
Sales and maturities of U.S. Treasury Bills			21,442				14,847				1,145
Net cash flows from investing activities			(7,838	)			(5,055	)			(26,283	)
Cash flows from financing activities:
Proceeds from borrowings			17				1,201				9,278
Repayments of borrowings			(1,563	)			(1,145	)			(1,125	)
Acquisition of treasury stock			(1,346	)			—				—
Other			61				77				164
Net cash flows from financing activities			(2,831	)			133				8,317
Increase (decrease) in cash and cash equivalents			(602	)			818				(7,388	)
Cash and cash equivalents at beginning of year			4,039				3,221				10,609
Cash and cash equivalents at end of year		$	3,437			$	4,039			$	3,221
Other cash flow information:
Income taxes paid		$	2,790			$	2,076			$	3,583
Interest paid			388				386				307

Note to Condensed Financial Information

Berkshire acquired 50% of the outstanding common stock of Heinz Holding Company in 2013. After a series of transactions in 2015, that interest represented 26.8% of the outstanding common stock of The Kraft Heinz Company (“Kraft Heinz”). Berkshire currently owns 26.7% of the outstanding shares of Kraft Heinz common stock. Reference is made to Note 5 to the Consolidated Financial Statements for additional information concerning Berkshire’s investment in Kraft Heinz.

Prior to 2018, the Parent Company issued Euro-denominated senior notes and the aggregate par amount outstanding of these borrowings was €6.85 billion as of December 31, 2018 and 2017. The gains and losses from the periodic remeasurement of the Euro notes due to changes in foreign currency exchange rates are included in earnings.

Parent Company debt maturities over the next five years are as follows: 2019—$752 million; 2020—$1,149 million; 2021—$2,131 million; 2022—$613 million and 2023—$3,991 million. Berkshire guarantees debt obligations of certain of its subsidiaries, which as of December 31, 2018, totaled approximately $12.4 billion. Such guarantees are an absolute, unconditional and irrevocable guarantee for the full and prompt payment when due of all present and future payment obligations. Berkshire also provides guarantees in connection with equity index put option contracts and certain retroactive reinsurance contracts of subsidiaries. The amounts of subsidiary payments under these contracts, if any, is contingent upon the outcome of future events.

In December 2017, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted, which reduced the Parent Company’s income tax expense in 2017 by $550 million, primarily due to the reduction in deferred tax liabilities attributable to the lower U.S. statutory rate, partly offset by a one-time income tax expense on certain accumulated undistributed earnings of foreign subsidiaries. The effects of the TCJA on income tax expense of consolidated subsidiaries is included in undistributed earnings in consolidated subsidiaries.