Summary

• Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in numerous diverse business activities.
• The subsidiaries mainly in insurance businesses, a freight rail transportation business and a group of utility and energy generation and distribution businesses.
• Berkshire Hathaway is known for its long-term investment horizon and its focus on value investing.

Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B, LSE: 0R37) with its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.

Recent Developments

Berkshire Hathaway increases its passive stakes in each of five leading Japanese trading companies.¹

June 19, 2023; Berkshire Hathaway’s wholly-owned subsidiary, National Indemnity Company, has increased its ownership interest in five of the leading Japanese trading companies. The companies are Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.

Financial Highlights

Q3 2023 Result²

• Net Loss: $12.8 billion (primarily due to unrealized investment losses)
• Operating Earnings: $10.76 billion (40.6% increase year-over-year)
• Cash Position: $157.2 billion (record high)
• Stock Price: Up 10.5% year-to-date, but down 6% from Q3 peak

Performance Details:

Insurance: Strong rebound with $2.4 billion underwriting profit (compared to $1.1 billion loss in Q3 2022)

Railroads: BNSF Railway continues to excel with increased volume and pricing power

Utilities: Steady performance from Berkshire Hathaway Energy

Other businesses: Mixed results with some gains and losses across various segments

Investments: $24.1 billion loss primarily due to decline in Apple stake

Company Overview

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in numerous diverse business activities. The most important of these are insurance businesses conducted on both a primary basis and a reinsurance basis, a freight rail transportation business and a group of utility and energy generation and distribution businesses. Berkshire also owns and operates numerous other businesses engaged in a variety of manufacturing, services, retailing and other activities. Berkshire is domiciled in the state of Delaware, and its corporate headquarters is in Omaha, Nebraska.³

Business Overview

Insurance and Reinsurance Businesses

Berkshire’s insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance subsidiaries. Berkshire’s insurance subsidiaries provide insurance and reinsurance of property and casualty risks and reinsurance of life and health risks worldwide. Berkshire’s insurance subsidiaries employed approximately 50,000 people at the end of 2022.

Manufacturing Businesses

Berkshire’s numerous and diverse manufacturing subsidiaries are grouped into three categories: (1) industrial products, (2) building products and (3) consumer products. Berkshire’s industrial products businesses manufacture components for aerospace and power generation applications, specialty chemicals, metal cutting tools, and a variety of other products primarily for industrial use. The building products group produces prefabricated and site-built residential homes, flooring products, insulation, roofing and engineered products, building and engineered components, paint and coatings and bricks and masonry products. The consumer products group manufactures and distributes recreational vehicles, batteries, and various apparel, footwear and other products. Berkshire’s manufacturing businesses employed approximately 191,000 people at the end of 2022.

Service and Retailing Businesses

Berkshire’s service businesses provide grocery and foodservice distribution, professional aviation training programs, shared aircraft ownership programs and distribution of electronic components. Other service businesses include franchising and servicing of quick service restaurants, media businesses (television and information distribution), as well as logistics businesses. Berkshire’s service businesses employed approximately 55,000 people at the end of 2022.

Berkshire’s retailing businesses include automotive, home furnishings and several other operations that sell various consumer products. Berkshire’s retailing businesses employed approximately 26,000 people at the end of 2022.

Berkshire or a subsidiary owns 26.6% of the outstanding common stock of The Kraft Heinz Company (“Kraft Heinz”) and 21.4% of the outstanding Occidental Petroleum Corporation (“Occidental”) common stock. Kraft Heinz manufactures and markets food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Occidental is an international energy company, including oil and natural gas exploration, development and production, and chemicals manufacturing businesses. Occidental’s midstream businesses purchase, market, gather, process, transport and store various oil, natural gas, carbon dioxide and other products. Berkshire subsidiaries also own a 50% joint venture interest in Berkadia Commercial Mortgage LLC.

Utilities and Energy Businesses

Berkshire Hathaway Energy BHE’s energy properties consist of the physical assets necessary to support its electricity and natural gas businesses. Properties of BHE’s electricity businesses include electric generation, transmission and distribution facilities, as well as coal mining assets that support certain of BHE’s electric generating facilities. Properties of BHE’s natural gas businesses include natural gas distribution facilities, interstate pipelines, storage facilities, liquefied natural gas facilities, compressor stations and meter stations. The transmission and distribution assets are primarily within each of BHE’s utility service territories. In addition to these physical assets, BHE has rights-of-way, mineral rights and water rights that enable BHE to utilize its facilities. Pursuant to separate financing agreements, the majority of these properties are pledged or encumbered to support or otherwise provide the security for the related subsidiary debt.

Subsidiary Companies

• Acme Brick Company⁴
• Alleghany Corporation
• Ben Bridge Jeweler
• Benjamin Moore & Co.
• Berkshire Hathaway Automotive
• Berkshire Hathaway Direct Insurance Company (THREE)
• Berkshire Hathaway Energy Company
• Berkshire Hathaway GUARD Insurance Companies
• Berkshire Hathaway Homestate Companies
• Berkshire Hathaway Specialty Insurance
• biBERK Business Insurance
• BoatU.S.
• Borsheims Fine Jewelry
• Brooks
• BNSF
• Business Wire
• Central States Indemnity Company
• Charter Brokerage
• Clayton Homes
• CORT Business Services
• CTB Inc.
• Duracell
• Fechheimer Brothers Company
• FlightSafety
• Forest River
• Fruit of the Loom Companies
• Garan Incorporated
• Gateway Underwriters Agency
• GEICO Auto Insurance
• General Re
• Helzberg Diamonds
• H.H. Brown Shoe Group
• HomeServices of America
• International Dairy Queen, Inc.
• IMC International Metalworking Companies
• IPS
• Jazwares
• Johns Manville
• Jordan's Furniture
• Justin Brands
• Kraft Heinz
• Larson-Juhl
• LiquidPower Specialty Products Inc. (LSPI)
• Louis - Motorcycle & Leisure
• Lubrizol Corporation
• Marmon Holdings, Inc.
• McLane Company
• MedPro Group
• MiTek Inc.
• MLMIC Insurance Company
• National Indemnity Company
• NetJets®
• NFM
• Oriental Trading Company
• Pampered Chef®
• Pilot Travel Centers
• Precision Castparts Corp.
• RC Willey Home Furnishings
• Richline Group
• Scott Fetzer Companies
• See's Candies
• Shaw Industries
• Star Furniture
• TTI, Inc.
• United States Liability Insurance Group
• W&W/AFCO Steel
• XTRA Corporation

Company History

The company was founded in 1839 as a textile manufacturer, but it was transformed into a holding company under Buffett's leadership in the 1960s. Since then, Berkshire Hathaway has grown through a combination of acquisitions and organic growth.

Berkshire Hathaway is known for its long-term investment horizon and its focus on value investing. Buffett has said that he prefers to buy companies with strong competitive advantages and predictable earnings, and to hold them for the long term.

References

1. ^ https://www.berkshirehathaway.com/news/jun1923.pdf
2. ^ https://www.berkshirehathaway.com/news/nov0423.pdf
3. ^ https://fintel.io/doc/sec-berkshire-hathaway-inc-1067983-10k-2023-february-27-19415-7749
4. ^ https://www.berkshirehathaway.com/subs/sublinks.html