What were the major acquisitions during the quarter and how were they financed?

The most significant acquisition was Precision Castparts Corp. (PCC) for approximately $32.7 billion, completed in January 2016. The Duracell business was also acquired in February 2016. These acquisitions were funded by existing cash balances and a $10 billion revolving credit facility, which was subsequently refinanced with proceeds from new senior note issuances.

How did the insurance segment perform in terms of underwriting and investment income?

The insurance segment's underwriting operations generated a pre-tax gain of $348 million, a decrease from $747 million in the prior year quarter. This decline was influenced by lower results at the Reinsurance Group and increased storm losses at GEICO. However, investment income within the insurance segment saw an increase to $1.14 billion from $1.09 billion.

What is the impact of the large acquisitions on Berkshire's balance sheet?

The acquisitions of PCC and Duracell significantly increased Berkshire's assets, particularly property, plant and equipment, and goodwill. Goodwill increased substantially, reflecting the premium paid over the fair value of net identifiable assets acquired. The company's debt also increased due to the financing of these acquisitions, though this was subsequently refinanced.

How did the railroad segment (BNSF) perform, and what were the key drivers of the performance?

BNSF experienced a 25% decrease in pre-tax earnings to $1.26 billion. This was primarily driven by a 5.5% decline in overall volume and a decrease in average revenue per unit, largely influenced by lower coal volumes due to reduced utility demand and lower fuel surcharge revenues as fuel prices declined. Industrial product volumes also decreased due to softer market conditions.

BRK-B/BRK-A 10-Q Quarterly Report Q1 FY2016

Summary

Berkshire Hathaway Inc. reported solid results for the first quarter of 2016, driven by strong performance across its diverse operating businesses and significant investment gains. Net earnings attributable to Berkshire Hathaway shareholders increased to $5.59 billion from $5.16 billion in the prior year period, reflecting robust contributions from insurance, manufacturing, service, and energy sectors. The company's balance sheet remains exceptionally strong, with consolidated shareholders' equity growing to $258.7 billion. A significant event during the quarter was the completion of the acquisition of Precision Castparts Corp. (PCC) for approximately $32.7 billion, further expanding Berkshire's industrial manufacturing footprint. The Duracell business was also acquired from Procter & Gamble in February 2016. These acquisitions, while adding to the company's asset base and goodwill, were funded through a combination of existing cash and debt, with subsequent refinancing of debt through senior note issuances. While investment and derivative gains/losses can cause volatility in reported earnings, Berkshire Hathaway's core operating businesses continue to deliver consistent performance. The company maintains a substantial cash position, providing flexibility for future investments and share repurchases, while adhering to its principle of maintaining significant liquidity.

Financial Highlights

27 data points

Beta

Revenue

$52.16B

Net Income

$5.59B

0.1% Net Margin

Total Assets

$586.32B

Cash & Equivalents

$42.38B

Free Cash Flow

$4.61B

Financial Statements

Beta

Revenue	$52.16B
Operating Expenses	$45.95B
Net Income	$5.59B

Key Highlights

1Net earnings attributable to Berkshire Hathaway shareholders increased by 8.2% to $5.59 billion in Q1 2016, compared to $5.16 billion in Q1 2015.
2The acquisition of Precision Castparts Corp. (PCC) for approximately $32.7 billion was completed in January 2016, significantly increasing goodwill and tangible assets.
3The Duracell business was acquired in February 2016.
4Insurance underwriting generated a pre-tax gain of $348 million, a significant decrease from $747 million in Q1 2015, primarily due to lower gains from Berkshire Hathaway Reinsurance Group and increased storm losses at GEICO.
5Railroad (BNSF) earnings decreased by 25% to $1.26 billion, primarily due to a decline in coal volumes and lower average revenue per unit.
6Manufacturing, Service, and Retailing businesses saw revenues increase by 19% to $28.25 billion, driven by the inclusion of PCC and Duracell, with pre-tax earnings rising 12.7% to $1.94 billion.
7Consolidated shareholders' equity increased to $258.7 billion as of March 31, 2016, up from $255.6 billion at December 31, 2015.

BERKSHIRE HATHAWAY INC Quarterly Report for Q1 Ended Mar 31, 2016

Summary

Financial Highlights

Key Highlights

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