What was the primary driver of Berkshire Hathaway's financial performance in 2002?

The primary driver was the strong performance of its diverse insurance operations, which generated significant premiums earned and investment income. Additionally, the successful integration and growth of its non-insurance businesses, including recent acquisitions, contributed substantially to overall results.

How did the September 11th terrorist attacks impact Berkshire Hathaway's financial results?

The insurance industry, including Berkshire's reinsurers, experienced severe losses from the September 11th terrorist attack in 2001. While this negatively impacted General Re's underwriting results significantly in 2001, Berkshire's robust capital strength and diversified operations helped mitigate the overall impact on the company's consolidated results.

What is Berkshire Hathaway's strategy regarding acquisitions?

Berkshire Hathaway's long-standing acquisition strategy focuses on purchasing businesses with consistent earning power, good returns on equity, able and honest management, and that are acquired at sensible prices. The company actively pursues acquisitions that align with these principles, as demonstrated by the significant acquisitions completed in 2001 and 2002 across various sectors like apparel and building products.

How does Berkshire Hathaway manage its investment portfolio?

Berkshire Hathaway prefers to invest in businesses that possess excellent economics, have capable and honest management, and are acquired at sensible prices. Their equity investments are concentrated in a relatively small number of companies, with a strategy to hold these investments for very long periods. They also maintain substantial holdings in fixed-income securities. Management actively directs these investment portfolios.

BRK-B/BRK-A 10-K FY2002 Annual Report — Revenue, Net Income, EPS

Summary

Berkshire Hathaway Inc.'s 2002 10-K filing reveals a strong financial performance, driven primarily by its diverse insurance operations and a growing stable of non-insurance businesses. The company demonstrates robust growth in both premiums earned and investment income, highlighting the effectiveness of its underwriting and investment strategies. Significant acquisitions in the apparel and building products sectors have broadened the company's revenue streams. Despite the impact of the September 11th terrorist attacks on the insurance industry, Berkshire Hathaway's substantial capital reserves and prudent risk management have enabled it to navigate these challenges effectively. The company's financial statements show a substantial increase in total revenues and net earnings, reflecting successful integration of acquired businesses and organic growth. Shareholder equity continues to grow, underscoring the company's long-term value creation strategy. The management's discussion and analysis emphasizes the strength of Berkshire's balance sheet, ample liquidity, and a disciplined approach to capital allocation, positioning the company for continued success.

Key Highlights

1Significant growth in insurance premiums earned, totaling $19.18 billion in 2002, with strong contributions from GEICO and General Re.
2Robust investment income from insurance operations, amounting to $3.06 billion before taxes in 2002, demonstrating effective asset management.
3Successful integration of substantial acquisitions in 2001 and 2002, including Shaw Industries, Johns Manville, Fruit of the Loom, and Garan, diversifying revenue streams.
4Strong financial position with total shareholders' equity reaching $64.04 billion at year-end 2002, supported by consistent retained earnings and capital appreciation.
5Net earnings of $4.29 billion in 2002, a significant increase from $795 million in 2001, showcasing operational resilience and growth.
6Management's focus on long-term value creation, evidenced by disciplined capital allocation and a preference for holding equity investments for extended periods.
7Exceptional capital strength in insurance subsidiaries, with statutory surplus of approximately $28.4 billion at December 31, 2002, providing a strong foundation for operations.

BERKSHIRE HATHAWAY INC Annual Report, Year Ended Dec 31, 2002

Summary

Key Highlights

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