WASHINGTON, DC. 20549
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
A - D
ESCRIPTION
OF
P
LAN
The following description of the Benjamin Moore & Co. Deferred Savings and Investment Plan (the Plan) provides only general information.
The Participants should refer to the Plan document for a more complete description of the Plans provisions and accounting policies. The Plan is sponsored and administered by Benjamin Moore & Co. (the Company). The Company is a
wholly-owned
subsidiary of Berkshire Hathaway, Inc. (the Parent). Charles Schwab Bank (Schwab) is the appointed trustee (Trustee) and Charles Schwab Corporation Schwab
Retirement Plan Services, Inc. is the recordkeeper of the Plan.
The Plan is a safe-harbor plan and permits new employees of the Company
to participate in the Plan on the first day of the month following the date of hire. Also, the Plan accepts Roth elective deferrals on behalf of participants. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
The Plan permits participants to make voluntary elective transfers of their entire
account balance to this Plan from another qualified section 401(k) plan of the Company or from this Plan to another qualified section 401(k) plan of the Company. The plan transfer must be made in connection with a participants change in
employment status which results in the participant not being entitled to additional allocations under the prior plan.
Participants have the option of investing their contributions in
one fund or dividing their investment in more than one fund.
[3]
|
Participant accounts:
|
Each participants account is adjusted for the
participants contribution and allocations of (a) the Companys contributions and (b) Plan earnings and losses, and charged with an allocation of certain administrative expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account.
[4]
|
Contributions and eligibility:
|
All employees can voluntarily contribute up to 25
percent of annual compensation up to the Internal Revenue Service (IRS) maximum allowance. The IRS maximum allowance was $18,000 and $17,500 in 2015 and 2014, respectively. Annual compensation includes overtime, incentive compensation,
and certain bonuses as part of the total eligible compensation. Participants age 50 and older can contribute an additional $6,000 and $5,500 as a catch-up contribution in 2015 and 2014, respectively, resulting in a total pre-tax contribution limit
of $24,000 and $23,000 for 2015 and 2014, respectively, for such individuals.
The Plan has been amended and restated to
automatically enroll employees who have completed one month during the first calendar year of employment with the Company and defer two percent of their compensation as a contribution into the Plan. Each subsequent anniversary date, the deferral
percentage increases by one percent until reaching seven percent. There is an opt-out election that is available each February for employees who are not currently contributing to the Plan and are scheduled to be automatically enrolled in
the Plan with a March 1st effective date. A participant may opt-out of the Plan at any time, however, each February thereafter, the participant will need to make this election for it to continue to be in effect.
4
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
A - D
ESCRIPTION
OF
P
LAN
(
CONTINUED
)
[4]
|
Contributions and eligibility: (continued)
|
Contributions are matched for 100 percent of the participant directed contribution, up
to three percent of eligible earnings, plus 50 percent of the participant directed contribution on the next two percent of eligible earnings. Matching contributions are funded each pay period. There is no Company match on catch-up
contributions. In November 2013, the Company amended the Plan so that effective February 1, 2014 wage and hour employees employed on the last day of the Plan year will receive a 3 percent special discretionary contribution to be contributed by
the Plan Sponsor. The special discretionary contribution for 2015 was $663,084.
As stated above, the IRS sets a maximum limit
on the amount of pre-tax salary deferrals a participant can contribute each year. If a participant reaches this limit early in the year, the participant will also no longer receive the Company matching contributions. In this situation, it is
possible that the participant will not receive the maximum Company match for the year. To address this issue, the Company makes an additional true-up contribution to all participant accounts that did not receive the full match amount and
would have done so had they not reached the IRS deferral limit before the end of the year.
True-up contributions are
included in employer contributions receivable and were $326,609 and $272,763 as of December 31, 2015 and 2014, respectively.
After participants reach age 59-1/2, they may withdraw all
or a portion of their participant-directed account balance at any time and for any reason. Prior to age 59-1/2, in-service withdrawals from the Plan are only allowed for unusual financial hardships and must be approved by the Company. While
employed, a participant may withdraw all or part of the employee and vested employer contributions, subject to certain restrictions imposed pursuant to the Plan and excise taxes imposed by IRS guidelines. A participant, who is performing service in
the military (while on active duty for a period of more than thirty days) may elect an in-service withdrawal of participant deferral amounts provided that the participant does not make elective deferrals to the Plan during the six month period
beginning on the date of such distribution. Termination withdrawals are a result of disability, termination of employment, retirement or death. Once a participants employment ends, the participant must take a full distribution of their account
by April 1
st
of the calendar year following the year in which the participant reaches age 70-1/2. If a participant remains employed by the Company after reaching age 70-1/2, the participant
may delay the distribution of their account until retirement.
Distributions are paid directly to an eligible retirement plan
specified by the participant (or designated beneficiary) in a direct rollover or to an Individual Retirement Account. Distributions can also be paid in cash, if so elected. In addition, terminated employees with account balances in excess
of $1,000 may elect to leave their account balance in the Plan and share in future investment results only.
[6]
|
Notes receivable from participants:
|
Participants may borrow from their
participant-directed account balance, with a minimum loan amount of $500, up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. No more than one loan per participant may be outstanding at any time. All loans shall be
evidenced by a promissory note. The loans are secured by the balance in the participants account and interest is accrued at the defined prime rate at the beginning of the month that the loan was originated plus one percentage point. Principal
plus interest on participant loans is generally repaid in five years in equal installments through payroll deductions each pay period. The maximum term for participant loans used for first-time home purchases is fifteen years. Delinquent notes
receivable from participants are reclassified as distributions based upon the terms of the Plan Document. Interest rates on loan balances outstanding as of December 31, 2015 range from 4.25% to 9.25%.
5
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
A - D
ESCRIPTION
OF
P
LAN
(
CONTINUED
)
Each participant is fully vested in their account at all times
including matching contributions.
N
OTE
B - S
UMMARY
OF
A
CCOUNTING
P
OLICIES
The financial statements and accompanying notes are
prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.
The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect reported amounts of assets and liabilities and changes therein, and when applicable, disclosure of contingent
assets and liabilities at the date of the financial statements. Accordingly, actual results may differ from these estimates.
Participants contributions are collected by the Company
through payroll deductions and forwarded to the Trustee. Contributions withheld from salaries and not yet forwarded to the Trustee are reflected as participant contributions receivable.
[4]
|
Benefits paid to participants:
|
Distributions from the Plan are recorded in the
period in which they are paid to participants in accordance with the terms of the Plan.
[5]
|
Investment valuation and income recognition:
|
The Plans investments are
reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note D for discussion of fair value
measurements. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net realized/unrealized appreciation/(depreciation) in fair value
of investments includes the Plans gains and losses on investments bought, sold and held during the year. Investment income and appreciation/(depreciation) for each participant-directed investment fund is allocated to each participant in the
same ratio that the participants account balance in that fund bears to the total account balances for all participants in that fund.
6
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
B - S
UMMARY
OF
A
CCOUNTING
P
OLICIES
(
CONTINUED
)
[6]
|
Notes receivable from participants:
|
Loans issued to participants in the form of
promissory notes are measured at their unpaid principal balance plus any accrued but unpaid interest.
[7]
|
Administrative expenses:
|
Investment-related and recordkeeping expenses are paid
from the Plans assets. Certain investment-related expenses are recorded as a reduction of net investment income and are not identifiable on the financial statements. Personnel and facilities of the Company have been used by the Plan for
its accounting and other activities at no cost to the Plan.
[8]
|
Recent accounting pronouncements:
|
In May 2015, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update No. 2015-07 (ASU 2015-07), Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), an amendment to Fair Value
Measurement Topic 820. ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. ASU 2015-07 is effective for fiscal
years beginning after December 15, 2016. Early adoption is permitted. The Plan elected to early adopt ASU 2015-07 as of and for the year ended December 31, 2015. Accordingly, investments measured using the net asset value per share practical
expedient have not been categorized within the fair value hierarchy. The amendment has been applied retrospectively to all periods presented.
In July 2015, the FASB issued Accounting Standards Update No. 2015-12 (ASU 2015-12), Plan Accounting: Defined Benefit
Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965) (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, and (Part III) Measurement Date
Practical Expedient. Part I eliminates the requirement to measure the fair value of fully benefit responsive investment contracts and provide certain disclosures. Contract value is the only required measure for fully benefit-responsive investment
contracts. Part II eliminates the requirements to disclose individual investments that represent 5 percent or more of net assets available for benefits and the net appreciation or depreciation in fair value of investments by general type. Part II
also simplifies the level of disaggregation of investments that are measured using fair value. Plans will continue to disaggregate investments that are measured using fair value by general type; however, plans are no longer required to also
disaggregate investments by nature, characteristics and risks. Further, the disclosure of information about fair value measurements shall be provided by general type of plan asset. Part III allows an employee benefit plan with a fiscal year end that
does not coincide with the end of a calendar month to measure its investments using the month end closest to its fiscal year end. The amendments are effective for fiscal years beginning after December 15, 2015. Earlier application is permitted. The
Plan elected to early adopt ASU 2015-12 as of and for the year ended December 31, 2015. The applicable amendments of ASU 2015-12 have been applied retrospectively to all periods presented.
7
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
C - S
TABLE
V
ALUE
F
UND
The Plan invests in a common collective trust fund whose underlying assets are fully benefit-responsive investment contracts. This stable value fund
seeks to provide preservation of capital and relatively stable returns by investing primarily in short-term investments and investment-grade stable value investment contracts. The underlying investments of the Morley Stable Value Fund consist of
Conventional Guaranteed Investment Contracts (GICs) and Synthetic Guaranteed Investment Contracts (wrap contracts) and cash equivalents. The GICs are typically issued with a fixed crediting rate and a fixed maturity date that does not
change over the life of the contract. Whereas, wrap contracts typically reset on a monthly or quarterly basis as negotiated with the issuer and do not have a final stated maturity date. Gains and losses on the underlying portfolio are amortized
over the duration of the investment, through adjustments to the future interest crediting rate.
A number of factors can influence future crediting
rates of wrap contracts, which may include but are not limited to: portfolio cash flows, underlying portfolio performance, current market interest rates for reinvestment, duration posture, change in credit ratings, default or bankruptcy by an asset
or wrap issuer, the unexpected receipt of principal and interest payments, extraordinary withdrawals and certain wrap contract terms, including wrap fees.
N
OTE
D - F
AIR
V
ALUE
M
EASUREMENTS
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
The established framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value. The three levels of the fair value hierarchy are described as follows:
|
|
|
Level 1
-
|
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan
has the ability to access.
|
|
|
Level 2
-
|
|
Inputs to the valuation methodology that are observable, either directly or indirectly, such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. If the asset or liability has a
specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
|
|
|
Level 3
-
|
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
A financial instruments categorization within the valuation hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for the
Plans instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. There have been no changes in the methodologies used as of December 31, 2015 and 2014.
Stable Value Collective Trust Fund
A stable value fund is a
form of common collective trust fund which is composed primarily of fully benefit-responsive investment contracts and is valued at the net asset value of units of the bank collective trust. The net asset value is used as a practical expedient to
estimate fair value. This practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported net asset value. Participant transactions (purchases and sales) may
occur daily. If the Plan initiates a full redemption of the collective trust, the issuer reserves the right to require 12 months notification in order to ensure that securities liquidations will be carried out in an orderly business manner.
8
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
D - F
AIR
V
ALUE
M
EASUREMENTS
(
CONTINUED
)
Common Collective Trust Funds
Common collective trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these
funds are primarily publicly traded equity securities, fixed income securities, and
commodity-related
securities and are valued at their NAV, as a practical expedient, that is calculated by the investment
manager or sponsor of the fund and have varying liquidity, redemption period notices and other restrictions. This practical expedient is not used when it is determined to be probable that the Plan will sell the investment for an amount
different than the reported NAV.
Mutual Funds
The
investments in mutual funds are valued utilizing a market approach wherein the Plan uses the quoted prices in the active market for identical assets. All of these investments are traded in active markets at their net asset value per share and
are primarily categorized as Level 1.
Berkshire Hathaway Stock Fund
The Plan allows investment in the common stock of the Companys Parent. Berkshire Hathaway common stock trades on an active market. This investment
option (referred to as the Berkshire Hathaway Stock Fund) also includes a cash component, thus resulting in a level 2 valuation.
A summary of the
Plans investments measured at fair value on a recurring basis at December 31, 2015 and 2014, set forth by level within the fair value hierarchy (if applicable), is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, at Fair Value as of December 31, 2015
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds
|
|
$
|
122,462,477
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
122,462,477
|
|
|
|
|
|
|
Berkshire Hathaway Stock Fund (see Note G)
|
|
|
-
|
|
|
|
19,179,117
|
|
|
|
-
|
|
|
|
19,179,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments measured within fair value hierarchy
|
|
|
122,462,477
|
|
|
|
19,179,117
|
|
|
|
-
|
|
|
|
141,641,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Collective Trust Funds (A)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55,420,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at fair value
|
|
$
|
122,462,477
|
|
|
$
|
19,179,117
|
|
|
$
|
-
|
|
|
$
|
197,061,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Certain investments that are measured at fair value using the net asset value
per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value of investments in the fair value
hierarchy to the amounts presented in the statement of net assets available for benefits.
9
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
D - F
AIR
V
ALUE
M
EASUREMENTS
(
CONTINUED
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, at Fair Value as of December 31, 2014
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Mutual Funds
|
|
$
|
121,449,787
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
121,449,787
|
|
|
|
|
|
|
Berkshire Hathaway Stock Fund (see Note G)
|
|
|
-
|
|
|
|
23,177,974
|
|
|
|
-
|
|
|
|
23,177,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments measured within the fair value hierarchy
|
|
|
121,449,787
|
|
|
|
23,177,974
|
|
|
|
-
|
|
|
|
144,627,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Collective Trust Funds (A)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
53,778,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at fair value
|
|
$
|
121,449,787
|
|
|
$
|
23,177,974
|
|
|
$
|
-
|
|
|
$
|
198,406,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Certain investments that are measured at fair value using the net asset value
per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value of investments in the fair value
hierarchy to the amounts presented in the statement of net assets available for benefits.
The following table summarizes investments for which fair
value is measured using the net asset value per share practical expedient as of December 31, 2015 and 2014, respectively.
|
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|
|
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|
|
December 31, 2015
|
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
(if currently
eligible)
|
|
Plan Level
Redemption
Notice
Period
|
|
|
|
|
|
Schwab Indexed Retirement Funds
(1)
|
|
$
|
33,823,519
|
|
|
n/a
|
|
Daily
|
|
30 days
|
|
|
|
|
|
Morley Stable Value Fund
(2)
|
|
|
21,330,420
|
|
|
n/a
|
|
Daily
|
|
12 months
|
|
|
|
|
|
Schwab Managed Retirement Trust Fund
(3)
|
|
|
266,383
|
|
|
n/a
|
|
Daily
|
|
30 days
|
|
|
|
|
December 31, 2014
|
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
(if
currently
eligible)
|
|
Plan Level
Redemption
Notice Period
|
|
|
|
|
|
Schwab Indexed Retirement Funds
(1)
|
|
$
|
31,679,557
|
|
|
n/a
|
|
Daily
|
|
30 days
|
|
|
|
|
|
Morley Stable Value Fund
(2)
|
|
|
21,813,964
|
|
|
n/a
|
|
Daily
|
|
12 months
|
|
|
|
|
|
Schwab Managed Retirement Trust Fund
(3)
|
|
|
284,996
|
|
|
n/a
|
|
Daily
|
|
30 days
|
10
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
D - F
AIR
V
ALUE
M
EASUREMENTS
(
CONTINUED
)
(1) These funds seek to provide total returns for investors retiring
approximately at or near their specified year of retirement. These funds are designed as a single investment portfolio that adjusts asset allocations over time to better match the anticipated changing tolerances and returns objectives over
their expected investment horizon. The funds may diversify holdings by investing in a variety of asset classes, including, but not limited to, domestic equity, international equity, emerging markets equity, global real estate, commodities,
short term bond, intermediate-term bond, inflation-protected bond, world bond, and cash equivalents.
(2) The objective of this fund is to provide preservation of capital and relatively stable returns. The
fund primarily consists of a diversified portfolio of stable value investment contracts issued by life insurance companies, banks and other financial institutions.
(3)
The fund seeks to provide total return for investors near or in retirement. The fund is designed as
a single investment portfolio that maintains a policy allocation that is intended to remain static and does not seek to distribute income. The funds may diversify holdings by investing in a variety of asset classes, including, but not limited
to, domestic equity, international equity, emerging markets equity, global real estate, commodities, short term bond, intermediate-term bond, inflation-protected bond, world bond, and cash equivalents.
N
OTE
E - T
ERMINATION
OF
THE
P
LAN
The Company expects and intends to continue the Plan indefinitely but reserves the right to amend or terminate the Plan at any future
date. However, no such amendment or termination shall affect the account balance of any participant as of the date such amendment or termination takes effect.
N
OTE
F - T
AX
S
TATUS
The IRS has determined and informed the Company by letter dated September 24, 2002 that the Plan and related trust are designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan received a new determination letter dated April 22, 2014. The Plan has been amended since receiving the tax determination letter. The Company believes that the Plan is
designed and currently being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been provided in the Plans financial statements and the Company believes the Plan is qualified, and
the related trust is tax-exempt.
Accounting principles generally accepted in the United States of America require the Company and Plan to evaluate
tax positions taken by the Plan and recognize a related tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by a government authority. Plan management has
analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2015 and 2014, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the
financial statements. The Plan is subject to routine examinations by taxing jurisdictions; however, there are currently no examinations for any tax periods in progress.
11
BENJAMIN MOORE & CO. DEFERRED SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 2015 and 2014
N
OTE
G R
ELATED
P
ARTY
AND
P
ARTIES
-
IN
-I
NTEREST
T
RANSACTIONS
For the year ended December 31, 2015, there were
transactions involving the investment of Plan assets in investments funds maintained by Schwab which qualify as party-in-interest transactions. Fees paid by the Plan to Schwab for administrative fees were $8,658 for the year ended December 31,
2015.
The Plan has investments in its Parents common stock, which is accumulated in an investment account labeled the Berkshire Hathaway Stock
Fund. This fund, which qualifies as party-in-interest transaction also has a cash component of $895,031 and $1,303,193 as of December 31, 2015 and 2014, respectively. At December 31, 2015, the Berkshire Hathaway Stock Fund held 138,480 shares
of Berkshire Hathaway Class B Common Stock, which had a market value of $18,284,086. At December 31, 2014, the Berkshire Hathaway Stock Fund held 145,700 shares of Berkshire Hathaway Class B Common Stock, which had a market value of
$21,874,781. The net realized/unrealized appreciation/(depreciation) in fair value of Parent common stock held by the Berkshire Hathaway Stock Fund was ($2,639,255) for the year ended December 31, 2015.
In addition, certain participants borrowed from the Plan. As of December 31, 2015 and 2014, the outstanding notes due from Plan participants were
$3,720,178 and $3,647,066, respectively. Participants are a party-in-interest to the Plan and these loans were exempt party-in-interest transactions pursuant to Section 408(b)(1) of ERISA.
N
OTE
H R
ISKS
AND
U
NCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks.
Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term, and that such changes could materially affect the
participants account balances and the amounts reported in the statement of net assets available for benefits.
Users of these financial
statements should be aware that the financial markets volatility may significantly impact the subsequent valuation of the Plans investments. Accordingly, the valuation of investments at December 31, 2015 may not necessarily be indicative
of amounts that could be realized in a current market exchange.
N
OTE
I M
UTUAL
F
UND
F
EES
Investments in mutual funds are subject to sales charges in the form of front-end loads, back-end loads or 12b-1 fees. 12b-1 fees are ongoing
fees allowable under Section 12b-1 of the Investment Company Act of 1940. These annual fees are used to pay for marketing and distribution costs of the funds. These funds are deducted prior to the allocation of the Plans investment earnings
activity, and thus not separately identifiable as an expense.
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