Berkshire Hathaway

From Firmopedia
Jump to: navigation, search

Profile Overview: Berkshire Hathaway

Contents

Fortune 1000 Rank: 7 (Up 4 positions from 11)

http://www.berkshirehathaway.com/"
NYSE: BRK.A BRK.B Warren Buffet's Letters to Shareholders


Wikipedia on Berkshire Hathaway

Rankings

  • 7 in FORTUNE 1000 (May 2011)
    • 7 in FORTUNE 500 (May 2011)
  • 12 in FT Global 500 (June 2011)
  • S&P 500
Berkshire Hathaway Inc. Rank 7, Public
Number of Employees 260,519
HeadQuarters 3555 Farnam St., Suite 1440 Omaha, NE 68131
CEO Warren E. Buffett
Phone 402-346-1400
Fax 402-346-3375
Toll Free 866-638-5390
Industry Insurance: Property and Casualty (stock)
Current Market Cap 107.4b


Fortune Snapshot

Company Financials $ millions  % Change From Latest Quarter $ Millions
Revenue 136,185.0 21.1 38,242.0
Profits 12,967.0 61.0 3764.0
Assets 372,229.0
Stockholder Equity 157,318.0

Abstract

Is is possible to discuss the conglomerate Berkshire Hathaway without mentioning its CEO Warren Buffett? Obviously not. This is not because the famed executive is reviled, despised, or even unliked. Rather, it is because the living legend is the embodiment of the entire philosophy of the company.

Of course, it takes only a minimal amount of research on the insurance juggernaunt to realize there's something a little different going on behind those company doors. Simply visit the company's website and one is greeted by a simple, clean page, one that gives the impression of, if not openess, at least honesty.

Here, the words of Buffett himself describe the company's attitude - one that is, like their website and business dealings, a stark contrast compared to other Fortune 1000 companies. Though they can be summarized, that would be an injustice to the excellent writing and phrasing of the letter quoted.


“Life and Debt

The fundamental principle of auto racing is that to finish first, you must first finish. That dictum is equally applicable to business and guides our every action at Berkshire.

Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade – and some relearned in 2008 – any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people.

Leverage, of course, can be lethal to businesses as well. Companies with large debts often assume that these obligations can be refinanced as they mature. That assumption is usually valid. Occasionally, though, either because of company-specific problems or a worldwide shortage of credit, maturities must actually be met by payment. For that, only cash will do the job.

Borrowers then learn that credit is like oxygen. When either is abundant, its presence goes unnoticed. When either is missing, that’s all that is noticed. Even a short absence of credit can bring a company to its knees. In September 2008, in fact, its overnight disappearance in many sectors of the economy came dangerously close to bringing our entire country to its knees.

Charlie and I have no interest in any activity that could pose the slightest threat to Berkshire’s wellbeing. (With our having a combined age of 167, starting over is not on our bucket list.) We are forever conscious of the fact that you, our partners, have entrusted us with what in many cases is a major portion of your savings. In addition, important philanthropy is dependent on our prudence. Finally, many disabled victims of accidents caused by our insureds are counting on us to deliver sums payable decades from now. It would be irresponsible for us to risk what all these constituencies need just to pursue a few points of extra return”

([1] Warren Buffet, in the 2010 letter to shareholders.


It is not only stockholders that trust in the company. Other corporations recognize the stability and integrity of the company as well - as evidenced by Pepsi's trust in Berkshire Hathaway to underwrite their potential billion dollar prize in 2003. Considering Berkshire Hathaway owns the largest share of Coca-Cola, one of Pepsi's biggest competitors, that is saying something. [2]

Relevant Information

Corporate Body

[3] Company About Us Page

Chairman and CEO Warren Buffett

Age 81
$100,000 salary

Vice Chairman; Chairman, President, and CEO, Wesco Financial Charles Munger

Age 87
$100,000 salary

SVP and CFO Marc Hamburg

Age 61
$912,500 salary

[4] Hoover's

Fiscal Information

Fiscal Year-End

December

2010 Sales (mil.)

$2,483.9

2010 Net Income (mil.)

12,967.0

1-Year Net Income Growth

61%

2010 Employees

260,000

Top 5 Competition

United States

  1. American International Group
  2. Liberty Mutual Insurance Group
  3. Allstate
  4. Travelers Cos.
  5. Hartford Financial Services

External Links & References

References, Resources, Citations

  1. http://www.berkshirehathaway.com/
  2. [5] Fortune Snapshots
  3. http://www.berkshirehathaway.com/letters/2010ltr.pdf
  4. [6] New York Times
  5. Warren Buffet's Letters to Shareholders
  6. [7] Berkshire Hathaway Governence Page
  7. http://money.cnn.com/2003/04/09/news/companies/pepsi_billion_game/
Copyright

The templates and all content on this page, including original content, are protected under a CC BY-SA
Creative Commons

ShareAlike 3.0 Unported License.
Any and all use of this content must be done only with the complete attribution and credit being given to all parties involved at any point in its creation.

Contributors

Lissa

Personal tools
Namespaces

Variants
Actions
Navigation
Toolbox
Share