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Notes to Consolidated Financial Statements (Continued)
(14) Unpaid losses and loss adjustment expenses (Continued)
We are exposed to environmental, asbestos and other latent injury claims arising from insurance and reinsurance contracts.
Liability estimates for environmental and asbestos exposures include case basis reserves and also reflect reserves for legal and
other loss adjustment expenses and IBNR reserves. IBNR reserves are based upon our historic general liability exposure base
and policy language, previous environmental loss experience and the assessment of current trends of environmental law,
environmental cleanup costs, asbestos liability law and judgmental settlements of asbestos liabilities.
The liabilities for environmental, asbestos and other latent injury claims and claims expenses net of reinsurance
recoverables were approximately $13.7 billion at December 31, 2013 and $14.0 billion at December 31, 2012. These liabilities
included approximately $11.9 billion at December 31, 2013 and $12.4 billion at December 31, 2012 of liabilities assumed under
retroactive reinsurance contracts. Liabilities arising from retroactive contracts with exposure to claims of this nature are
generally subject to aggregate policy limits. Thus, our exposure to environmental and other latent injury claims under these
contracts is, likewise, limited. We monitor evolving case law and its effect on environmental and other latent injury claims.
Changing government regulations, newly identified toxins, newly reported claims, new theories of liability, new contract
interpretations and other factors could result in significant increases in these liabilities. Such development could be material to
our results of operations. We are unable to reliably estimate the amount of additional net loss or the range of net loss that is
reasonably possible.
(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, 2013.
Weighted
Average
December 31,
Interest Rate 2013 2012
Insurance and other:
Issued by Berkshire due 2014-2047 .......................................... 2.7% $ 8,311 $ 8,323
Short-term subsidiary borrowings ............................................ 0.4% 949 1,416
Other subsidiary borrowings due 2014-2035 ................................... 5.9% 3,642 3,796
$12,902 $13,535
In 2013, Berkshire issued $2.6 billion of senior notes with interest rates ranging from 0.8% to 4.5% and maturities that
range from 2016 to 2043 and repaid $2.6 billion of maturing senior notes.
Weighted
Average
December 31,
Interest Rate 2013 2012
Railroad, utilities and energy:
Issued by MidAmerican Energy Holdings Company (“MidAmerican”) and its
subsidiaries:
MidAmerican senior unsecured debt due 2014-2043 ......................... 5.5% $ 6,616 $ 4,621
Subsidiary and other debt due 2014-2043 .................................. 5.3% 23,033 17,002
Issued by BNSF due 2014-2097 ............................................. 5.3% 17,006 14,533
$46,655 $36,156
As of December 31, 2013, MidAmerican subsidiary debt included approximately $5.3 billion of debt of NV Energy and its
regulated utility subsidiaries. In addition, MidAmerican issued $2.0 billion of senior unsecured notes in connection with funding
the NV Energy acquisition. The new senior unsecured notes were issued with interest rates ranging from 1.1% to 5.15% and
maturities ranging from 2017 to 2043. MidAmerican subsidiary debt represents amounts issued pursuant to separate financing
agreements. All, or substantially all, of the assets of certain MidAmerican subsidiaries are, or may be, pledged or encumbered to
support or otherwise secure the debt. These borrowing arrangements generally contain various covenants including, but not
limited to, leverage ratios, interest coverage ratios and debt service coverage ratios. In 2013, MidAmerican subsidiaries issued
term debt of $2.5 billion in the aggregate and MidAmerican and its subsidiaries repaid approximately $2.0 billion of term debt
and short-term borrowings.
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