Notes payable and other borrowings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Notes payable and other borrowings

Note 15. Notes payable and other borrowings

Notes payable and other borrowings are summarized below (in millions). The weighted average interest rates and maturity date ranges shown in the following tables are based on borrowings as of September 30, 2022.

	Weighted Average Interest Rate			September 30, 2022		December 31, 2021
Insurance and other:
Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2023-2047		3.3	%	$	6,227	$	6,820
Euro denominated due 2023-2041		1.0	%		6,722		7,792
Japanese Yen denominated due 2023-2060		0.6	%		6,289		6,797
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2027-2052		3.6	%		14,456		10,758
Great Britain Pound denominated due 2039-2059		2.5	%		1,920		2,325
Euro denominated due 2030-2034		1.8	%		1,219		—
Other subsidiary borrowings due 2022-2045		4.1	%		4,328		4,438
Subsidiary short-term borrowings		4.7	%		374		342
				$	41,535	$	39,272

Notes to Consolidated Financial Statements (Continued)

Note 15. Notes payable and other borrowings (Continued)

In January 2022, Berkshire repaid $600 million of maturing senior notes and issued ¥128.5 billion (approximately $1.1 billion) of senior notes with maturity dates ranging from 2027 to 2052 and a weighted average interest rate of 0.5%. Borrowings of BHFC, a wholly owned finance subsidiary of Berkshire, consist of senior unsecured notes used to fund manufactured housing loans originated or acquired and equipment held for lease of certain subsidiaries. BHFC borrowings are fully and unconditionally guaranteed by Berkshire. In March 2022, BHFC issued $4.5 billion of senior notes with maturity dates ranging from 2027 to 2052 with a weighted average interest rate of 3.4% and €1.25 billion (approximately $1.4 billion) of senior notes maturing in 2030 and 2034 with a weighted average interest rate of 1.8%. In May 2022, BHFC repaid $775 million of maturing senior notes.

The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€8.15 billion, £1.75 billion and ¥914 billion par at September 30, 2022) reflect the applicable exchange rates as of each balance sheet date. The effects of changes in foreign currency exchange rates during the period are recorded in earnings as a component of selling, general and administrative expenses. Changes in the exchange rates resulted in pre-tax gains of $1.2 billion in the third quarter and $3.3 billion in the first nine months of 2022 as compared to $264 million in the third quarter and $939 million in the first nine months of 2021.

Berkshire also guarantees debt of other subsidiaries, aggregating approximately $3.7 billion at September 30, 2022. Generally, Berkshire’s guarantee of a subsidiary’s debt obligation is an absolute, unconditional and irrevocable guarantee for the full and prompt payment when due of all payment obligations.

	Weighted Average Interest Rate			September 30, 2022		December 31, 2021
Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
BHE senior unsecured debt due 2023-2053		4.3	%	$	13,992	$	13,003
Subsidiary and other debt due 2022-2064		4.2	%		36,226		36,759
Short-term borrowings		4.2	%		1,441		2,009
Burlington Northern Santa Fe ("BNSF") and subsidiaries due 2022-2097		4.5	%		23,302		23,219
				$	74,961	$	74,990

BHE subsidiary debt represents amounts issued pursuant to separate financing agreements. Substantially all of the assets of certain BHE subsidiaries are, or may be, pledged or encumbered to support or otherwise secure such debt. These borrowing arrangements generally contain various covenants, which pertain to leverage ratios, interest coverage ratios and/or debt service coverage ratios. In April 2022, BHE issued $1.0 billion of 4.6% senior notes due in 2053. During the first nine months of 2022, BHE subsidiaries issued approximately $1.3 billion of variable and fixed rate term debt with a weighted average interest rate of 3.9% as of September 30 and maturity dates ranging from 2024 to 2052.

BNSF’s borrowings are primarily senior unsecured debentures. In June 2022, BNSF issued $1.0 billion of 4.45% debentures due in 2053. During the first nine months of 2022, BNSF repaid $900 million of term debt. As of September 30, 2022, BNSF, BHE and their subsidiaries were in compliance with all applicable debt covenants. Berkshire does not guarantee any debt, borrowings or lines of credit of BNSF, BHE or their subsidiaries.

Our subsidiaries have unused lines of credit and commercial paper capacity to support short-term borrowing programs and provide additional liquidity. Unused lines of credit were approximately $10.7 billion at September 30, 2022, which included approximately $9.2 billion related to BHE and its subsidiaries.