01—Abstract
Summary
Summary of the 10-K filed February 29, 2016. Cited figures are marked; the original filing is the authoritative source.
Berkshire Hathaway Inc. (BRK-B) reported strong financial performance for the fiscal year ended December 31, 2015.
The company demonstrated significant growth across its diverse business segments, including insurance and reinsurance, railroad, utilities and energy, manufacturing, service, and retailing. Net earnings attributable to Berkshire Hathaway shareholders reached $24.08 billiona, a notable increase from the previous year. This growth was driven by robust operating results from its core businesses, particularly the insurance and railroad segments, as well as favorable investment and derivative gains.
The company maintained a strong financial position with consolidated shareholders' equity increasing to $255.6 billionb, underpinned by substantial cash reserves and a well-capitalized insurance operation. Berkshire Hathaway's decentralized management structure continues to yield positive results, with operating businesses demonstrating solid performance. The company strategically deployed capital through acquisitions and organic growth initiatives.
Notably, the acquisition of Van Tuyl Group (now Berkshire Hathaway Automotive) and AltaLink were significant contributors to revenue growth. Looking ahead, Berkshire Hathaway remains focused on long-term value creation, maintaining financial strength, and pursuing opportunities that align with its established investment philosophy.
02—Key points
Key Highlights
- Net earnings attributable to Berkshire Hathaway shareholders were $24.08 billion for the year ended December 31, 2015.
- Total revenues increased to $210.82 billion.
- Consolidated shareholders' equity grew to $255.55 billion.
- Insurance underwriting generated a net gain of $1.16 billion.
- The railroad business (BNSF) saw a 9.8% increase in after-tax earnings.
- Utilities and energy businesses experienced a 13.3% increase in after-tax earnings, aided by acquisitions.
- The company maintained significant liquidity, with cash and cash equivalents of $61.2 billion in its insurance and other businesses.
- Berkshire Hathaway acquired The Van Tuyl Group (now Berkshire Hathaway Automotive) for $4.1 billion and AltaLink, L.P. for approximately $2.7 billion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 29, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $210.94B$194.70B | +8.3% |
| Operating Expenses | $175.88B$166.57B | +5.6% |
| Interest Expense | $3.52B$3.25B | +8.1% |
| Net Income | $24.08B$19.87B | +21.2% |
05—Questions
Frequently Asked Questions
What was Berkshire Hathaway's overall financial performance in 2015?
Berkshire Hathaway reported a strong financial performance in 2015, with net earnings attributable to shareholders reaching $24.08 billion, an increase from $19.87 billion in 2014. Total revenues grew to $210.82 billion, and consolidated shareholders' equity increased to $255.55 billion. The company's diverse operations, particularly insurance and railroad, contributed significantly to these results.
How did the insurance segment perform?
The insurance segment generated a net underwriting gain of $1.16 billion in 2015, a decrease from $1.69 billion in 2014, primarily due to higher claim costs at GEICO. However, investment income from the insurance operations was strong at $3.73 billion. GEICO experienced growth in premiums written and earned, but its loss ratio increased, impacting underwriting profit.
What were the significant capital allocation activities during 2015?
Berkshire Hathaway continued its strategy of strategic acquisitions and capital deployment. Key acquisitions in 2015 included The Van Tuyl Group (now Berkshire Hathaway Automotive) for $4.1 billion and AltaLink, L.P. for approximately $2.7 billion. The company also maintained a strong focus on capital preservation and did not repurchase any of its own shares under its repurchase program during 2015, keeping its cash and cash equivalent holdings above the $20 billion threshold.
What are the key drivers of Berkshire Hathaway's earnings?
Berkshire Hathaway's earnings are driven by a combination of its insurance underwriting profits, investment income generated from its vast insurance float, and the operating results of its non-insurance businesses, which include railroads, utilities, manufacturing, and retail operations. Investment and derivative gains/losses also contribute to earnings but can cause significant volatility.
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