10-KPeriod: FY2012

BERKSHIRE HATHAWAY INC Annual Report, Year Ended Dec 31, 2012

Filed March 1, 2013For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. reported robust performance for the fiscal year ending December 31, 2012. The company's diverse business segments, including insurance, railroads, utilities, and manufacturing, service, and retailing, all contributed to its strong financial results. Notably, the insurance segment demonstrated solid underwriting gains, while significant investment and derivative gains boosted overall net earnings. The company highlighted its continued financial strength, with substantial shareholders' equity and cash reserves. Berkshire also continued its practice of repurchasing its own stock, signaling management's confidence in the company's intrinsic value. Looking ahead, Berkshire announced its intention to invest in the acquisition of H.J. Heinz Company, indicating ongoing strategic growth initiatives.

Financial Highlights

31 data points
Beta

Revenue

$162.46B

Net Income

$14.82B

9.1% Net Margin

Total Assets

$427.45B

Cash & Equivalents

$46.99B

Free Cash Flow

$11.18B

Financial Statements
Beta
Revenue$162.46B
Operating Expenses$140.23B
Operating Income$20.08B
Net Income$14.82B
Shares Outstanding (Basic)1.65M

Key Highlights

  • 1Berkshire Hathaway Inc. reported net earnings attributable to shareholders of $14.824 billion for the fiscal year ended December 31, 2012.
  • 2The company's insurance underwriting operations generated a net underwriting gain of $1.046 billion.
  • 3GEICO, a key insurance subsidiary, saw premiums earned increase by 9.0% year-over-year, with a favorable loss ratio of 75.9%.
  • 4The railroad segment (BNSF) contributed significantly with net earnings of $3.372 billion, driven by increased revenues and a 7% rise in cars/units handled.
  • 5The utilities and energy segment, primarily through MidAmerican, reported earnings of $1.323 billion, supported by regulated utility operations and real estate brokerage growth.
  • 6Manufacturing, service, and retailing businesses collectively earned $3.699 billion, boosted by the acquisition of The Lubrizol Corporation and strong performance in various sectors.
  • 7Berkshire Hathaway repurchased 9,475 Class A shares and 606,499 Class B shares for approximately $1.3 billion in December 2012, continuing its capital allocation strategy.

Frequently Asked Questions

Berkshire Hathaway demonstrated strong financial performance in 2012, reporting net earnings attributable to shareholders of $14.824 billion. This was driven by solid underwriting gains in its insurance businesses, significant contributions from its railroad and utilities segments, and the positive impact of acquisitions like Lubrizol.

The insurance segment was a key driver of Berkshire's success, generating a net underwriting gain of $1.046 billion. GEICO, in particular, showed strong growth in premiums earned and maintained a favorable loss ratio. Other insurance groups also contributed positively, despite some impact from Hurricane Sandy.

Berkshire's growth is driven by its diverse portfolio of operating businesses, including insurance, railroads, utilities, and manufacturing. The company continues to execute its strategy of prudent capital allocation, including share repurchases when shares trade at a discount to intrinsic value. Furthermore, Berkshire announced a significant investment in the acquisition of H.J. Heinz Company, indicating a commitment to strategic growth through acquisitions.

Berkshire Hathaway maintains a strong financial position with substantial cash reserves and shareholders' equity. The company prioritizes financial strength and liquidity. It has not declared a cash dividend since 1967, instead focusing on reinvesting earnings and repurchasing its own stock when management believes it is trading below its intrinsic value.