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Notes to Consolidated Financial Statements (Continued)
(22) Contingencies and Commitments (Continued)
We have owned a controlling interest in Marmon Holdings, Inc. (“Marmon”) since 2008 when we acquired 63.6% of its
outstanding shares of common stock. In 2010, we acquired 16.6% of its outstanding common stock for approximately $1.5
billion and in 2012, we acquired an additional 9.8% of its outstanding common stock for aggregate consideration of
approximately $1.4 billion. In 2013, we acquired an additional 9.7% of its outstanding common stock for aggregate
consideration of approximately $1.47 billion of which $1.2 billion is payable in March 2014. As of December 31, 2013, we own
substantially all of Marmon outstanding common stock. On April 29, 2013, we acquired the remaining noncontrolling interests
of IMC International Metalworking Companies B.V., the parent company of Iscar, for consideration of $2.05 billion. Berkshire
now owns 100% of IMC International Metalworking Companies B.V. Each of these transactions was accounted for as an
acquisition of noncontrolling interests. The differences between the consideration paid or payable and the carrying amounts of
these noncontrolling interests were recorded as reductions in Berkshire’s shareholders’ equity and aggregated approximately
$1.8 billion in 2013 and $700 million in 2012.
Pursuant to the terms of shareholder agreements with noncontrolling shareholders in our other less than wholly-owned
subsidiaries, we may be obligated to acquire their equity ownership interests. If we had acquired all outstanding noncontrolling
interests as of December 31, 2013, we estimate the cost would have been approximately $3.1 billion. However, the timing and
the amount of any such future payments that might be required are contingent on future actions of the noncontrolling owners.
On October 16, 2013, Marmon announced it entered into an agreement to acquire the beverage dispensing and
merchandising operations of British engineering company, IMI plc for approximately $1.1 billion. The acquisition closed in
January 2014.
On December 30, 2013, we entered into an agreement with Phillips 66 (“PSX”) whereby we would exchange up to the
20,668,118 shares of PSX common stock that we owned on that date for 100% of the outstanding common stock of PSX’s flow
improver business, Phillips Specialty Products Inc. (“PSPI”). Per the agreement, the exact number of shares of PSX common
stock to be exchanged was to be determined based upon the volume weighted average price of PSX common stock on the
closing date. On February 25, 2014, the closing occurred and we exchanged 17,422,615 shares of PSX common stock for the
outstanding common stock of PSPI. At the time of the closing, the assets of PSPI included approximately $450 million of cash
and cash equivalents.
Berkshire has a 50% interest in a joint venture, Berkadia Commercial Mortgage (“Berkadia”), with Leucadia National
Corporation (“Leucadia”) having the other 50% interest. Berkadia is a servicer of commercial real estate loans in the U.S.,
performing primary, master and special servicing functions for U.S. government agency programs, commercial mortgagebacked
securities transactions, banks, insurance companies and other financial institutions. A significant source of funding for
Berkadia’s operations is through the issuance of commercial paper. Repayment of the commercial paper is supported by a $2.5
billion surety policy issued by a Berkshire insurance subsidiary. Leucadia has agreed to indemnify Berkshire for one-half of any
losses incurred under the policy. As of December 31, 2013, the aggregate amount of Berkadia commercial paper outstanding
was $2.47 billion.
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