Notes payable and other borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Notes payable and other borrowings

(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 December 31, 2017.

	Weighted Average Interest Rate		December 31,
			2017		2016
Insurance and other:
Issued by Berkshire:
U.S. Dollar denominated borrowings due 2018-2047		2.8%	$	10,603	$	11,709
Euro denominated borrowings due 2020-2035		1.1%		8,164		5,994
Short-term subsidiary borrowings		3.4%		1,832		2,094
Other subsidiary borrowings due 2018-2045		3.6%		6,725		7,378
			$	27,324	$	27,175

In January 2017, Berkshire issued €1.1 billion in senior unsecured notes. The notes consisted of €550 million of 0.25% notes due in 2021 and €550 million of 0.625% notes due in 2023. In January 2017, senior notes of $1.1 billion matured. In 2017, the carrying value of Berkshire’s Euro denominated senior notes increased $990 million due to changes in the Euro/U.S. Dollar exchange rates. This increase produced a corresponding charge to pre-tax earnings of $990 million which was recorded as additional non-cash interest expense.

	Weighted Average Interest Rate		December 31,
			2017		2016
Railroad, utilities and energy:
Issued by Berkshire Hathaway Energy Company (“BHE”) and its subsidiaries:
BHE senior unsecured debt due 2018-2045		5.1%	$	6,452	$	7,818
Subsidiary and other debt due 2018-2064		4.8%		28,739		27,354
Short-term debt		2.0%		4,488		1,869
Issued by BNSF due 2018-2097		4.8%		22,499		22,044
			$	62,178	$	59,085

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 debt. These borrowing arrangements generally contain various covenants including, but not limited to, leverage ratios, interest coverage ratios and debt service coverage ratios, among other covenants. During 2017, BHE and its subsidiaries issued approximately $1.9 billion of term debt with maturity dates ranging from 2022 to 2057 with a weighted average interest rate of 3.2%.

BHE’s short-term debt outstanding increased, in part to fund the prepayment of approximately $1.0 billion of BHE senior unsecured debt in connection with a tender offer in December 2017. BHE recognized a pre-tax loss of $410 million, which was included in interest expense in the Consolidated Statement of Earnings. In January 2018, BHE issued $2.2 billion of senior notes with maturity dates ranging from 2021 to 2048 with a weighted average interest rate of 3.2%. Proceeds from this debt issuance were used to repay short-term debt and for general corporate purposes.

BNSF’s borrowings are primarily senior unsecured debentures. In March 2017, BNSF issued $1.25 billion of senior unsecured debentures consisting of $500 million of 3.25% debentures due in 2027 and $750 million of 4.125% debentures due in 2047. As of December 31, 2017, 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.

	Weighted Average Interest Rate		December 31,
			2017		2016
Finance and financial products:
Issued by Berkshire Hathaway Finance Corporation (“BHFC”) due 2018-2043		2.8%	$	12,926	$	14,423
Issued by other subsidiaries due 2018-2036		4.5%		159		961
			$	13,085	$	15,384

In January 2017, BHFC issued $1.3 billion of senior notes consisting of $950 million of floating rate notes due in 2019 and $350 million of floating rate notes due in 2020. During 2017, senior notes of $2.8 billion matured. The borrowings of BHFC, a wholly owned finance subsidiary of Berkshire, are fully and unconditionally guaranteed by Berkshire.

As of December 31, 2017, our subsidiaries had unused lines of credit and commercial paper capacity aggregating approximately $7.7 billion to support short-term borrowing programs and provide additional liquidity. Such unused lines of credit included about $4.0 billion related to BHE and its subsidiaries. In addition to BHFC’s borrowings, at December 31, 2017, Berkshire guaranteed approximately $1.9 billion of other subsidiary borrowings. 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.

Principal repayments expected during each of the next five years are as follows (in millions).

	2018		2019		2020		2021		2022
Insurance and other	$	4,741	$	844	$	1,800	$	2,527	$	850
Railroad, utilities and energy		8,659		2,939		2,245		1,804		3,395
Finance and financial products		4,661		4,016		931		750		775
	$	18,061	$	7,799	$	4,976	$	5,081	$	5,020