Berkshire Hathaway 2009 Annual Report Download - page 39

Notes to Consolidated Financial Statements (Continued)
(6) Other Investments
A summary of other investments follows (in millions).
Cost
Unrealized
Gains/Losses
Fair
Value
Carrying
Value
December 31, 2009
Fixed maturity and equity .............................................. $21,089 $5,879 $26,968 $26,014
Equity method ...................................................... 5,851 1,721 7,572 6,586
$26,940 $7,600 $34,540 $32,600
Insurance and other ................................................... $23,738 $7,094 $30,832 $28,980
Finance and financial products .......................................... 3,202 506 3,708 3,620
$26,940 $7,600 $34,540 $32,600
December 31, 2008
Fixed maturity and equity .............................................. $14,452 $ 36 $14,488 $14,675
Equity method ...................................................... 5,919 352 6,271 6,860
$20,371 $ 388 $20,759 $21,535
Insurance and other ................................................... $17,269 $ 391 $17,660 $18,419
Finance and financial products .......................................... 3,102 (3) 3,099 3,116
$20,371 $ 388 $20,759 $21,535
Fixed maturity and equity investments in the preceding table include our investments in The Goldman Sachs Group, Inc.
(“GS”) and The General Electric Company (“GE”), which were acquired in 2008 and investments in Swiss Reinsurance
Company Ltd. (“Swiss Re”) and The Dow Chemical Company (“Dow”) that were made in 2009. In addition, fixed maturity and
equity investments include investments in Wm. Wrigley Jr. Company (“Wrigley”) that we acquired in both 2008 and 2009.
Additional information regarding these investments follows.
We own 50,000 shares of 10% Cumulative Perpetual Preferred Stock of GS (“GS Preferred”) and Warrants to purchase
43,478,260 shares of common stock of GS (“GS Warrants”) which were acquired for a combined cost of $5 billion. The GS
Preferred may be redeemed at any time by GS at a price of $110,000 per share ($5.5 billion in aggregate). The GS Warrants
expire in 2013 and can be exercised for an additional aggregate cost of $5 billion ($115/share). We also own 30,000 shares of
10% Cumulative Perpetual Preferred Stock of GE (“GE Preferred”) and Warrants to purchase 134,831,460 shares of common
stock of GE (“GE Warrants”) which were acquired for a combined cost of $3 billion. The GE Preferred may be redeemed by GE
beginning in October 2011 at a price of $110,000 per share ($3.3 billion in aggregate). The GE Warrants expire in 2013 and can
be exercised for an additional aggregate cost of $3 billion ($22.25/share).
We own $4.4 billion par amount of 11.45% subordinated notes due 2018 of Wrigley (“Wrigley Notes”) and $2.1 billion of
5% preferred stock of Wrigley (“Wrigley Preferred”). The Wrigley Notes and Wrigley Preferred were acquired in 2008 in
connection with Mars, Incorporated’s acquisition of Wrigley. During 2009, we also acquired $1.0 billion par amount of Wrigley
senior notes due in 2013 and 2014. The Wrigley subordinated and senior notes are classified as held-to-maturity and
accordingly we are carrying such investments at cost.
On March 23, 2009, we acquired a 12% convertible perpetual capital instrument issued by Swiss Re at a cost of
$2.7 billion. The instrument has a face amount of 3 billion Swiss Francs (“CHF”) and has no maturity or mandatory redemption
date but can be redeemed under certain conditions at the option of Swiss Re at 140% of the face amount until March 23, 2011
and thereafter at 120% of the face amount. The instrument possesses no voting rights and is subordinated to senior securities of
Swiss Re as defined in the agreement. Beginning on March 23, 2012, the instrument can be converted at our option into
120,000,000 common shares of Swiss Re (a rate of 25 CHF per share of Swiss Re common stock).
On April 1, 2009, we acquired 3,000,000 shares of Series A Cumulative Convertible Perpetual Preferred Stock of Dow
(“Dow Preferred”) for a cost of $3 billion. The Dow Preferred was issued in connection with Dow’s acquisition of the Rohm
and Haas Company. Under certain conditions, each share of the Dow Preferred is convertible into 24.201 shares of Dow
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