UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT
TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal years ended December 31, 2015 and 2014
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-14905
The Nebraska Furniture Mart, Inc.
Profit Sharing Plan
700 South 72nd Street
Omaha, NE 68114
(Full title of the plan and the address of the plan, if different from that of the issuer named below)
BERKSHIRE HATHAWAY INC.
3555 Farnam Street
Omaha, Nebraska 68131
(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)
THE NEBRASKA FURNITURE MART, INC.
PROFIT SHARING PLAN
Page Number | ||
2 | ||
Financial Statements: |
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Statements of Net Assets Available for Benefits |
3 | |
4 | ||
5 | ||
Additional Information:* |
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Schedule H, Line 4i - Schedule of Assets (Held at End of Year) |
11 |
* All other supplemental schedules required by Section 2520.103-10 of the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable or the information required therein has been included in the financial statements or notes hereto.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Fiduciary Committee of
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits of The Nebraska Furniture Mart, Inc. Profit Sharing Plan (the Plan) as of December 31, 2015 and 2014 and the related statements of changes in net assets available for benefits for the years then ended. The Plans management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plans internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2015 and 2014, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The supplemental information in the accompanying schedule of Form 5500, Schedule H, Line 4i Schedule of Assets (Held at End of Year) as of December 31, 2015, has been subjected to audit procedures performed in conjunction with the audit of the Plans financial statements. The supplemental schedule is the responsibility of the Plans management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedule, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedule is fairly stated in all material respects in relation to the financial statements as a whole.
/s/ Whitley Penn LLP |
Fort Worth, Texas |
June 20, 2016 |
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Statements of Net Assets Available for Benefits
As of December 31, 2015 and 2014
2015 | 2014 | |||||||
ASSETS: |
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Investments, at fair value |
$ | 144,660,050 | $ | 139,029,615 | ||||
Receivables: |
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Employers contributions |
-- | 91,421 | ||||||
Participant contributions |
-- | 328,302 | ||||||
Notes receivable from participants |
920,720 | 895,081 | ||||||
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Total receivables |
920,720 | 1,314,804 | ||||||
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Net Assets Available for Benefits at Fair Value |
$ | 145,580,770 | $ | 140,344,419 | ||||
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See notes to financial statements
3
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2015 and 2014
2015 | 2014 | |||||||
Additions to net assets: |
||||||||
Investment Income: |
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Net appreciation (depreciation) in fair value of investments |
$ | (5,733,306) | $ | 8,009,504 | ||||
Interest and dividends |
5,779,720 | 5,082,583 | ||||||
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Total investment income |
46,414 | 13,092,087 | ||||||
Interest income from notes receivable from participants |
40,239 | 34,644 | ||||||
Contributions: |
||||||||
Employers |
2,916,590 | 2,449,000 | ||||||
Participants |
10,601,365 | 7,624,429 | ||||||
Participant rollovers |
1,116,080 | 722,112 | ||||||
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Total contributions |
14,634,035 | 10,795,541 | ||||||
Other additions |
20,430 | 15,525 | ||||||
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Total additions to net assets |
14,741,118 | 23,937,797 | ||||||
Deductions from net assets: |
||||||||
Benefit payments to participants |
9,277,330 | 7,416,239 | ||||||
Administrative expenses |
227,437 | 186,532 | ||||||
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Total deductions from net assets |
9,504,767 | 7,602,771 | ||||||
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Net increase in net assets |
5,236,351 | 16,335,026 | ||||||
Net assets available for benefits: |
||||||||
Beginning of year |
140,344,419 | 124,009,393 | ||||||
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End of year |
$ | 145,580,770 | $ | 140,344,419 | ||||
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See notes to financial statements
4
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(1) | Description of Plan |
The following description of The Nebraska Furniture Mart, Inc. Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plans provisions.
A. | General |
The Plan is a defined contribution profit-sharing plan covering all employees, as defined in the Plan document, as of the start date of the employee. The employees covered under the Plan include those employed by Nebraska Furniture Mart, Inc., Floors, Inc., Nebraska Furniture Mart of Kansas, Inc., and TXFM, Inc. (collectively the Company or Employers). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
B. | Contributions |
Each year, participants may contribute up to 50% of their eligible compensation, as defined by the Plan document. Contributions are subject to certain dollar limitations, as imposed by the Internal Revenue Code (IRC). Participants also may rollover amounts representing distributions from other qualified plans. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions, provided they also have maximized (or are on track to maximize) their Internal Revenue Service (IRS) 402(g) annual dollar limit for the calendar year. Participants direct the investment of employee and Employer contributions into various investment options offered by the Plan.
Once an employee has completed one year of service with 1,000 or more hours of work during the year and attained the age of 21, they are eligible for discretionary matching contributions (Matching Contributions) starting the first of the following month. During 2015 and 2014, the Company made Matching Contributions equal to 50% of the first 6% of the employees contributions, up to 3% of the employees eligible compensation. In addition, the Company may make additional profit sharing contributions, subject to limitations established by the IRC. No additional profit sharing contributions were made for the years ended December 31, 2015 and 2014.
C. | Participant Accounts |
Each participants account is credited with the participants contribution and allocations of (a) the Companys contributions and (b) Plan earnings, and charged with an allocation of 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.
D. | Vesting |
Participants are fully vested in their contributions plus any income or loss thereon. Matching and Profit Sharing Contributions become fully vested according to the following schedule:
Periods of Service
|
Vested Percentage
| |
Less than two | 0% | |
Two | 20% | |
Three | 40% | |
Four | 60% | |
Five | 80% | |
Six | 100% |
5
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(1) | Description of Plan continued |
In the event of disability or death, the participant will become fully vested.
E. | Notes Receivable from Participants |
Participants may borrow from their accounts a minimum of $1,000 up to a maximum of 50% of their vested account balance relating to participants contributions and rollovers under the Plan, or a maximum of $50,000. The notes are secured by the participants account balance in the participants account and bear interest rates which are equal to the Prime Rate plus 1%. Principal and interest are paid ratably through biweekly payroll deductions over a period not to exceed five years, unless the purpose of the loan is to acquire or construct the primary residence of the participant, in which case the repayment period shall not exceed ten years. As of December 31, 2015 and 2014, interest rates ranged from 4.25% to 9.25%. As of December 31, 2015 and 2014, notes receivable from participants mature between January 2016 and December 2025, and January 2015 and December 2024, respectively.
F. | Payment of Benefits |
If the participants vested account balance exceeds $1,000 and he or she is terminated due to death, disability or retirement, a participant may elect to receive either a lump sum amount equal to the value of the participants vested interest in his or her account or monthly or other periodical installments by Vanguard Fiduciary Trust Company in approximate equal amounts over the life expectancy of the participant or of the participant and his or her designated beneficiary. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. If the participants account balance is less than $1,000, the Plan can automatically cash out the account at the participants termination in the form of a lump-sum distribution.
G. | Forfeited Accounts |
Participants leaving employment with the Company before becoming fully vested forfeit their non-vested interest in the Matching and Profit Sharing Contributions. These forfeitures are used to pay expenses and to reduce the Companys current or future contributions under the Plan. At December 31, 2015 and 2014, forfeited non-vested accounts totaled $84,000, and $49,000, respectively. During the years ended December 31, 2015 and 2014, the Company used approximately $80,000 and $119,000, of forfeitures to pay Plan expenses, respectively.
H. | Voting Rights |
Each participant is entitled to exercise voting rights attributable to the shares of Berkshires Class B common stock fund allocated to the participants account.
(2) | Summary of Significant Accounting Policies |
The following accounting policies, which conform with generally accepted in the United States of America and with the requirements of ERISA, have been used consistently in the preparation of the Plans financial statements.
A. | Basis of Accounting |
The accompanying financial statements have been prepared on the accrual basis of accounting.
B. | Use of Estimates |
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
6
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(2) | Summary of Significant Accounting Policies continued |
C. | Investment Valuation and Income Recognition |
The Plans investments are stated 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 3 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 appreciation includes the Plans gains and losses on investments bought and sold as well as held during the year.
D. | Payment of Benefits |
Benefits are recorded when paid.
E. | Administrative Expenses |
Administrative fees and expenses of the Plan may be paid out of the Plan assets unless paid by the Company. Certain administrative fees are paid by the Company and are not reflected in the accompanying financial statements.
F. | Notes Receivable from Participants |
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are recorded as a distribution based upon the terms of the Plan document.
G. | New Accounting Pronouncement |
In July 2015, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. Parts I and III are not applicable to the Plan. Part II eliminates the requirements to disclose individual investments that represent 5% 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. In addition, plans are no longer required to also disaggregate investments by nature, characteristics and risks, and the disclosure of information about fair value measurements will be provided by the general type of the plan asset. The ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted on a retrospective basis. Plan management has elected to early adopt this guidance for the year ended December 31, 2015. The prior year amounts have been changed to confirm to this new standard.
(3) | Fair Value Measurements |
Various inputs are used to determine the fair value of the Plans investments. These inputs are summarized in three broad levels described below:
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. |
7
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(3) | Fair Value Measurements continued |
Level 2 | Inputs to the valuation methodology include: | |
Quoted prices for similar assets or liabilities in active markets; | ||
Quoted prices for identical or similar assets or liabilities in inactive markets; | ||
Inputs other than quoted prices that are observable for the asset or liability; | ||
Inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||
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. |
The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the lowest level of any 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.
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 or 2014.
Mutual Funds: Valued at fair value as determined by quoted market prices, which represents the net asset value of shares held by the Plan at year end.
Money Market Funds: Money market funds are valued based on the short-term cash component as of the measurement date and classified within Level 2 of the valuation hierarchy as they are not publicly traded.
Berkshire Hathaway Class B Common Stock Fund: The Berkshire Hathaway Class B Common Stock Fund is valued using a quoted active market price which is considered a Level 1 input.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the Plans investments at fair value as of December 31, 2015 and 2014. The Plan has no assets classified within Level 3 of the valuation hierarchy.
December 31, 2015 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Money market fund |
$ - | $ 3,656,064 | $ - | $ 3,656,064 | ||||||||||||
Berkshire Hathaway Class |
578,369 | - | - | 578,369 | ||||||||||||
Mutual funds |
140,425,617 | - | - | 140,425,617 | ||||||||||||
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Total investments at fair value |
$141,003,986 | $ 3,656,064 | $ - | $144,660,050 | ||||||||||||
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8
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(3) | Fair Value Measurements continued |
December 31, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Money market fund |
$ - | $ 3,577,939 | $ - | $ 3,577,939 | ||||||||||||
Berkshire Hathaway Class |
246,305 | - | - | 246,305 | ||||||||||||
Mutual funds |
135,205,371 | - | - | 135,205,371 | ||||||||||||
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Total investments at fair value |
$135,451,676 | $ 3,577,939 | $ - | $139,029,615 | ||||||||||||
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(4) | Plan Termination |
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in their entire account.
(5) | Tax Status |
The Plan has adopted a prototype plan. The prototype plan has received an opinion letter from the IRS dated May 28, 2014 as to the prototype plans qualified status. The prototype plan opinion letter has been relied upon by this Plan. Although the Plan has amended the prototype plan document, the plan administrator believes the Plan is designed and is being operated in compliance with the applicable provisions of the IRC.
(6) | Risks and Uncertainties |
The Plan invests in various marketable securities. Marketable securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain marketable securities and the level of uncertainty related to changes in the value of marketable securities, it is at least reasonably possible that changes in values of marketable securities in the near term would materially affect participants account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.
(7) | Party-in-Interest Transactions |
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is the trustee for the Plan and, therefore, these transactions qualify as party-in-interest transactions which are exempt from the prohibited transaction rules. Additionally, the Plan has a number of service providers which qualify as parties-in-interest. Fees paid by the Plan to parties-in-interest amounted to approximately $228,000 and $182,000 for the years ended December 31, 2015 and 2014, respectively. The Plan also invests in the Class B common stock fund of Berkshire Hathaway. The Trustee recorded purchases of approximately $461,000 and sales of approximately $76,000 of Berkshire Class B common stock fund during the year ended December 31, 2015. Transactions in such investments qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules.
9
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2015 and 2014
(8) | Reconciliation of Financial Statements to Form 5500 |
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2015 and 2014, to Form 5500:
2015 | 2014 | |||||||
Net assets available for benefits per the financial statements |
$ 145,580,770 | $ 140,344,419 | ||||||
Delinquent loans reported as distributions for tax |
(4,287) | (3,823) | ||||||
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Net assets available for benefits per the Form |
$ 145,576,483 | $ 140,340,596 | ||||||
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2015 | 2014 | |||||||
Changes in assets available for benefits per the financial statements |
$ 5,236,351 | $ 16,335,026 | ||||||
Delinquent loans reported as distributions for tax |
(464) | (546) | ||||||
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Changes in assets available for benefits per the |
$ 5,235,887 | $ 16,334,480 | ||||||
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10
The Nebraska Furniture Mart, Inc. Profit Sharing Plan | Schedule 1 | |||||
Schedule H, Line 4i Schedule of Assets (Held at End of Year) | EIN# 47-0428274 | |||||
December 31, 2015 | Plan# 092344 |
Identity of Issue, Borrower, Lessor or Similar Party |
Description of Investment, including Maturity Date, Rate of Interest, Collateral, Par, or Maturity Value |
Current Value |
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* | Vanguard | Vanguard PRIMECAP Investor | $ 32,089,340 | |||||||
* | Vanguard | Vanguard 500 Index Investor | 27,367,325 | |||||||
* | Vanguard | Vanguard Wellington Inv | 15,662,784 | |||||||
* | Vanguard | Vanguard Target Retirement 2045 Inv | 10,040,508 | |||||||
* | Vanguard | Vanguard Target Retirement 2025 Inv | 9,682,649 | |||||||
* | Vanguard | Vanguard Total Bond Market Index Inv | 8,902,848 | |||||||
* | Vanguard | Vanguard Target Retirement 2035 Inv | 5,773,920 | |||||||
* | Vanguard | Vanguard Total Intl Stock Index Inv | 5,586,391 | |||||||
* | Vanguard | Vanguard Target Retirement 2050 Inv | 4,624,916 | |||||||
* | Vanguard | Vanguard Target Retirement 2015 Inv | 3,889,973 | |||||||
* | Vanguard | Vanguard Prime Money Market Fund | 3,656,064 | |||||||
* | Vanguard | Vanguard Extended Market Index Investor | 2,607,553 | |||||||
* | Vanguard | Vanguard Target Retirement 2030 Inv | 2,415,448 | |||||||
* | Vanguard | Vanguard Target Retirement 2040 Inv | 2,243,528 | |||||||
* | Vanguard | Vanguard Windsor Fund | 2,213,694 | |||||||
* | Vanguard | Vanguard Target Retirement 2020 Inv | 1,997,456 | |||||||
* | Vanguard | Vanguard Explorer Inv | 1,512,552 | |||||||
* | Vanguard | Vanguard Target Retirement 2055 Inv | 1,285,876 | |||||||
* | Vanguard | Vanguard Target Retirement 2010 Inv | 1,012,377 | |||||||
* | Vanguard | Vanguard Target Retirement Income Inv | 1,000,632 | |||||||
* | Berkshire Hathaway Inc. | Berkshire Hathaway Class B Common Stock Fund | 578,369 | |||||||
* | Vanguard | Vanguard Target Retirement 2060 Inv | 515,847 | |||||||
|
|
|||||||||
$ 144,660,050 | ||||||||||
* | Participants | Participant loans: Interest rates of 4.25% to 9.25% maturing January 2016 through December 2025 |
916,433 | |||||||
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$ 145,576,483 | ||||||||||
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* | Represents a party-in-interest |
11
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
The Nebraska Furniture Mart, Inc. Profit Sharing Plan | ||||||||
By: | /s/ Tiffaney Kuper | |||||||
|
||||||||
Tiffaney Kuper | ||||||||
Plan Administrator and Benefits Manager |
Date: June 20, 2016
12
The Nebraska Furniture Mart, Inc. Profit Sharing Plan
EXHIBITS
Exhibit No. |
Page No. | |||
23.1 | Consent of Whitley Penn LLP | 14 |
13