Notes payable and other borrowings

6 Months Ended

Jun. 30, 2021

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 June 30, 2021.

	Weighted Average Interest Rate			June 30, 2021		December 31, 2020
Insurance and other:
Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2021-2047		3.3	%	$	7,314	$	8,308
Euro denominated due 2023-2041		1.0	%		8,123		8,326
Japanese Yen denominated due 2023-2060		0.6	%		7,038		6,031
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2022-2051		3.6	%		10,756		10,766
Great Britain Pound denominated due 2039-2059		2.5	%		2,376		2,347
Other subsidiary borrowings due 2021-2045		4.1	%		4,568		4,682
Subsidiary short-term borrowings		2.5	%		386		1,062
				$	40,561	$	41,522

Notes to Consolidated Financial Statements (Continued)

Note 15. Notes payable and other borrowings (Continued)

In the first quarter of 2021, Berkshire repaid €550 million and $1.0 billion of maturing senior notes and issued €600 million of 0.5% senior notes due in 2041. In April 2021, Berkshire issued ¥160 billion (approximately $1.5 billion) of senior notes with maturity dates ranging from 2026 to 2041 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 January 2021, BHFC repaid $750 million of maturing senior notes and issued $750 million of 2.5% senior notes due in 2051.

The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€6.9 billion, £1.75 billion and ¥785.5 billion par at June 30, 2021) reflect the applicable exchange rates as of the balance sheet dates. 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 $675 million in the first six months of 2021 and $102 million in the first six months of 2020.

In addition to BHFC borrowings, Berkshire guaranteed approximately $4.0 billion of other subsidiary borrowings at June 30, 2021. 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			June 30, 2021		December 31, 2020
Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
BHE senior unsecured debt due 2023-2051		4.3	%	$	13,000	$	13,447
Subsidiary and other debt due 2021-2064		4.2	%		35,873		36,420
Short-term borrowings		1.5	%		2,536		2,286
Burlington Northern Santa Fe ("BNSF") and subsidiaries due 2021-2097		4.6	%		23,253		23,220
				$	74,662	$	75,373

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 the first six months of 2021, BHE and its subsidiaries repaid $1.7 billion of term debt. In April 2021, a BHE subsidiary issued $550 million of 3.4% term debt due in 2051.

BNSF’s borrowings are primarily senior unsecured debentures. During the first six months of 2021, BNSF repaid $886 million of debt. In April 2021, BNSF issued $925 million of 3.3% term debt due in 2051. As of June 30, 2021, 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.

As of June 30, 2021, our subsidiaries had unused lines of credit and commercial paper capacity aggregating approximately $9.9 billion to support short-term borrowing programs and provide additional liquidity. Such unused lines of credit included approximately $8.4 billion related to BHE and its subsidiaries.