10-QPeriod: Q2 FY2011

BERKSHIRE HATHAWAY INC Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 5, 2011For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. reported solid financial results for the second quarter and the first six months of 2011, demonstrating resilience across its diverse business segments. The company saw an increase in consolidated shareholders' equity to $163.0 billion, reflecting a robust balance sheet. Total revenues across all segments reached $38.27 billion for the second quarter and $71.99 billion for the first six months, indicating healthy operational performance. Key drivers of this performance include strong contributions from the Insurance and Other segment, which saw increased premiums earned and investment income. The Railroad, Utilities, and Energy segment, particularly Burlington Northern Santa Fe (BNSF), experienced significant revenue growth. While the Finance and Financial Products segment faced some headwinds, particularly in manufactured housing, the overall diversification of Berkshire's operations helped to mitigate these challenges. The company also continued to manage its significant investment portfolio, with notable gains from the redemption of preferred stock and ongoing management of fixed maturity and equity securities.

Financial Highlights

28 data points
Beta

Revenue

$38.27B

Net Income

$3.42B

8.9% Net Margin

EPS (Diluted)

$2072.00

Total Assets

$382.70B

Cash & Equivalents

$47.89B

Free Cash Flow

$4.52B

Financial Statements
Beta
Revenue$38.27B
Operating Expenses$33.01B
Operating Income$4.32B
Net Income$3.42B
EPS (Basic)$2072.00
Shares Outstanding (Basic)1.65M

Key Highlights

  • 1Consolidated shareholders' equity grew to $163.0 billion by June 30, 2011.
  • 2Total revenues for the first six months of 2011 reached $71.99 billion, up from $63.75 billion in the prior year period.
  • 3The Insurance and Other segment reported increased premiums earned and generated substantial investment income.
  • 4Burlington Northern Santa Fe (BNSF) demonstrated strong revenue growth, with a 17% increase in both the second quarter and first six months of 2011.
  • 5Berkshire Hathaway recorded a significant after-tax gain of $806 million from the redemption of its Goldman Sachs preferred stock investment.
  • 6Despite challenges in the manufactured housing sector, the Finance and Financial Products segment remained a notable contributor, with stable earnings.
  • 7The company maintained substantial liquidity, with cash and cash equivalents totaling $47.9 billion at the end of the first six months of 2011.

Frequently Asked Questions

Berkshire Hathaway demonstrated strong financial performance in the first half of 2011. Net earnings attributable to Berkshire Hathaway shareholders were $4.93 billion, and total revenues increased to $71.99 billion. The company's consolidated shareholders' equity grew to $163.0 billion, indicating a solid financial position. The diverse business segments, particularly insurance and BNSF, contributed significantly to these results.

The Insurance and Other segment performed well, with increased premiums earned across its various businesses like GEICO and General Re. Investment income from this segment remained strong. However, underwriting results were impacted by significant catastrophe losses, particularly from the earthquakes in Japan and New Zealand, leading to a net underwriting loss of $828 million for the first six months of 2011.

The report indicates that Berkshire Hathaway entered into an agreement to acquire The Lubrizol Corporation for approximately $9 billion in March 2011, with an expected closing within the next one to three months. The financial statements reflect the period ending June 30, 2011, so Lubrizol's results are not yet consolidated in these filings. The acquisition was planned to be funded with existing cash and cash equivalents.

Berkshire Hathaway's investment portfolio remains a key aspect of its financial strength. The company holds substantial investments in fixed maturity and equity securities. In the first six months of 2011, Berkshire recorded significant investment gains, including $1.25 billion from the redemption of its Goldman Sachs preferred stock. The company also recognized other-than-temporary impairment losses of $506 million on certain equity securities, notably Kraft Foods and Wells Fargo, though these had no impact on consolidated shareholders' equity. The overall portfolio continues to be managed with a focus on long-term value.