10-QPeriod: Q1 FY2012

BERKSHIRE HATHAWAY INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 4, 2012For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. (BRK-B) reported strong financial results for the first quarter ending March 31, 2012, with net earnings attributable to Berkshire Hathaway shareholders significantly increasing to $3.245 billion, up from $1.511 billion in the same period last year. This substantial growth was driven by a combination of improved underwriting results across its insurance segments, robust performance from its railroad, utilities, and energy operations, and a notable surge in investment and derivative gains. The company's balance sheet remains exceptionally strong, with total shareholders' equity reaching $175.997 billion and substantial cash reserves providing ample liquidity. The filing also highlights a considerable increase in the fair value of equity securities and positive movements in derivative contract valuations, contributing to the overall positive financial performance.

Financial Highlights

29 data points
Beta

Revenue

$38.15B

Net Income

$3.25B

8.5% Net Margin

EPS (Diluted)

$1966.00

Total Assets

$411.36B

Cash & Equivalents

$37.83B

Free Cash Flow

$2.49B

Financial Statements
Beta
Revenue$38.15B
Operating Expenses$33.22B
Operating Income$4.34B
Net Income$3.25B
EPS (Basic)$1966.00
Shares Outstanding (Basic)1.65M

Key Highlights

  • 1Net earnings attributable to Berkshire Hathaway shareholders more than doubled to $3.245 billion in Q1 2012, compared to $1.511 billion in Q1 2011.
  • 2Insurance underwriting results improved significantly, moving from a net loss of $821 million in Q1 2011 to a net gain of $54 million in Q1 2012, primarily due to the absence of major catastrophe losses.
  • 3Railroad, Utilities and Energy segment earnings showed strong growth, with pre-tax earnings increasing to $1.856 billion from $1.566 billion year-over-year.
  • 4Investment and derivative gains significantly boosted net earnings, contributing $580 million after taxes in Q1 2012, a substantial improvement from a net loss of $82 million in Q1 2011, largely driven by positive derivative contract valuations.
  • 5Total shareholders' equity increased by $11.1 billion to $175.997 billion as of March 31, 2012, reflecting strong retained earnings and a significant increase in accumulated other comprehensive income.
  • 6Investments in equity securities saw a substantial unrealized gain of $11.6 billion, increasing their fair value significantly and contributing to overall shareholder equity growth.
  • 7The company maintained a strong liquidity position with $37.8 billion in cash and cash equivalents at the end of the quarter.

Frequently Asked Questions

The significant increase in net earnings was primarily driven by a strong rebound in insurance underwriting results, which moved from a substantial loss in Q1 2011 (largely due to catastrophe losses) to a gain in Q1 2012. Additionally, robust earnings from the Railroad, Utilities and Energy segments, along with a substantial increase in investment and derivative gains, contributed significantly to the improved bottom line.

Berkshire Hathaway's insurance operations showed a marked improvement. The insurance underwriting segment transitioned from a net loss of $821 million in Q1 2011 to a net gain of $54 million in Q1 2012. This improvement was largely due to the absence of significant catastrophe losses in Q1 2012, contrasting with substantial losses incurred in the prior year from events like the earthquakes in Japan and New Zealand.

The investment portfolio showed strong performance, particularly in equity securities. The fair value of equity securities increased significantly, with a substantial unrealized gain of $11.6 billion recognized in other comprehensive income for the quarter. This indicates a positive market performance of Berkshire's equity holdings, which are a core part of its investment strategy.

No, Berkshire Hathaway did not engage in significant share repurchases during the first quarter of 2012. While a share repurchase program was authorized in late 2011, management indicated that repurchases would only occur if cash levels remained above $20 billion and if shares were trading at a significant discount to intrinsic value. No repurchases were made during this period.