8-KOther Events

BERKSHIRE HATHAWAY INC 8-K Report, Corporate Update (Jan 24, 2012)

Filed January 24, 2012For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. (BRK-B) filed a Form 8-K on January 24, 2012, to report its ratio of consolidated earnings to consolidated fixed charges for the nine months ended September 30, 2011, and for the prior five fiscal years. This filing provides a snapshot of the company's ability to cover its interest and other fixed charge obligations with its earnings. For the nine months ended September 30, 2011, the ratio stood at 5.54x, indicating that earnings were more than five and a half times the amount of fixed charges. This is a key metric for assessing financial leverage and solvency. While the ratio for the most recent nine-month period shows a solid coverage, it's notably lower than the ratios reported for the full years of 2010 (7.18x) and 2007 (10.16x), though it remains stronger than 2008 (4.33x) and 2009 (6.13x). Investors should note the variability in this ratio across periods, influenced by fluctuations in net earnings and the level of fixed charges. The data illustrates Berkshire Hathaway's consistent ability to meet its fixed charge obligations over the reported periods, a crucial indicator of financial stability.

Key Highlights

  • 1Berkshire Hathaway Inc. reported its ratio of consolidated earnings to consolidated fixed charges for the nine months ended September 30, 2011, and for the fiscal years 2006-2010.
  • 2For the nine months ended September 30, 2011, the ratio of earnings to fixed charges was 5.54x.
  • 3This ratio indicates that Berkshire Hathaway's earnings were approximately 5.54 times greater than its fixed charges for the specified period.
  • 4The company's fixed charges primarily consist of interest on indebtedness and rentals representing interest.
  • 5The reported ratio for the nine months of 2011 (5.54x) is lower than the full year 2010 ratio (7.18x) but higher than 2009 (6.13x) and 2008 (4.33x).
  • 6The highest ratio reported in the filing was 10.16x for the year ended December 31, 2007.
  • 7This filing provides investors with a key metric to assess the company's financial leverage and its capacity to service its debt obligations.

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