10-KPeriod: FY2010

BERKSHIRE HATHAWAY INC Annual Report, Year Ended Dec 31, 2010

Filed February 28, 2011For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc.'s (BRK-B) 2010 10-K filing reveals a year of significant growth and strategic expansion, notably the full acquisition of Burlington Northern Santa Fe (BNSF) in February 2010. This acquisition substantially increased the company's asset base and diversified its operations into the railroad sector. The company reported robust performance across its diverse subsidiaries, with strong underwriting results from its insurance operations, including GEICO and General Re. Manufacturing, service, and retailing segments also showed improvement, reflecting a gradual stabilization of economic conditions. Berkshire Hathaway maintained its strategy of decentralized management, allowing subsidiaries to operate with autonomy while benefiting from the conglomerate's strong financial position and capital allocation expertise. The company ended the year with substantial shareholders' equity and significant liquidity, positioning it well for future opportunities.

Financial Highlights

28 data points
Beta

Revenue

$136.19B

Net Income

$12.97B

9.5% Net Margin

Total Assets

$372.23B

Cash & Equivalents

$38.23B

Free Cash Flow

$11.91B

Financial Statements
Beta
Revenue$136.19B
Operating Expenses$117.13B
Operating Income$17.27B
Net Income$12.97B
Shares Outstanding (Basic)1.64M

Key Highlights

  • 1Completed the full acquisition of Burlington Northern Santa Fe (BNSF) for approximately $26.5 billion, significantly expanding its railroad operations.
  • 2Reported net earnings attributable to Berkshire Hathaway of $12.967 billion, a substantial increase from $8.055 billion in 2009, driven by improved underwriting results and investment gains.
  • 3Insurance underwriting businesses showed strong performance, with GEICO's premiums earned increasing by 5.2% and General Re maintaining underwriting profitability.
  • 4Invested heavily in property, plant, and equipment across various segments, with significant capital expenditures in the utilities and energy, and railroad businesses.
  • 5Float for insurance businesses grew to approximately $66 billion, demonstrating the continued strength and cost-effectiveness of its insurance operations.
  • 6Maintained extraordinary capital strength across its insurance subsidiaries, with statutory surplus of approximately $94 billion at year-end 2010.

Frequently Asked Questions

The most significant strategic move was the full acquisition of Burlington Northern Santa Fe (BNSF) Corporation for approximately $26.5 billion. This acquisition marked a major diversification into the railroad industry and significantly expanded Berkshire's asset base and operational scope.

Berkshire's insurance operations performed strongly. Underwriting profits were robust across the key segments like GEICO, General Re, and the Berkshire Hathaway Reinsurance Group. GEICO saw a 5.2% increase in premiums earned, and the company maintained its strategy of exceptional capital strength, with statutory surplus reaching approximately $94 billion.

Berkshire's investment income is derived from a mix of fixed maturity and equity securities, managed centrally. While the company held substantial invested assets, it noted that investment income in 2011 might decline compared to 2010 due to the maturity of higher-yielding investments and low interest rates for reinvestment. The company's strategy remains focused on acquiring attractively priced businesses and securities with strong long-term prospects.