EQUITY RESEARCH Financial Services | U.S.

Insurance/Non-Life | 25 October 2010

BERKSHIRE HATHAWAY INC. Stock Rating 2-EQUAL WEIGHT

Unchanged

Warren Buffett Names One of His Sector View 2-NEUTRAL

Unchanged
Investment Manager Successors Price Target USD 88.00
Warren Buffett’s succession plans are top of mind for Berkshire Hathaway investors. Unchanged
Mr. Buffett, age 80, has no plans currently to retire. His plan is to ultimately split
operating duties between a new CEO (all three leading candidates are internal Price (29-Jul-2010) USD 78.04
according to him), who would be responsible for the oversight of Berkshire’s business Potential Upside/Downside +13%
Tickers BRK.B
operations. Separately, two or more investment managers would be expected to
ultimately manage Berkshire’s $133-billion portfolio. Market Cap (USD mn) 75601
„ Mr. Buffett announced today Todd Combs, age 39, will be one of the managers to Shares Outstanding (mn) 968.75
join Berkshire and handle a significant portion of its investment portfolio. Mr. Free Float (%) 94.43
Combs is chief investment officer for Castle Point Capital, a Greenwich, 52 Wk Avg Daily Volume (mn) 6.4
Connecticut-based long-short hedge fund which manages just over $400 million. Dividend Yield (%) N/A
The majority of the Castle Point fund’s investments are in the financial services Return on Equity TTM (%) 9.25
sector with top holdings including MasterCard, U.S. Bancorp, State Street, Western Current BVPS (USD) 57.77
Union, RenaissanceRe, Starwood Property Trust, Chubb, and CME. Source: FactSet Fundamentals

„ Another candidate highlighted recently to potentially manage part of the

Price Performance Exchange-NYSE
Berkshire’s investment portfolio is hedge-fund manager Li Lu*. Mr. Li, 44, currently
52 Week range USD 83.57-62.12
manages a $600-million fund. His long-term performance is impressive – an
annualized return of 26.4% since 1998 (versus a 2.25% return for the S&P 500),
84
including a 200% return in 2009 (vs a 23.5% gain for the S&P 500) employing no
78
leverage
72
„ Warren Buffett’s successor as CEO is presumed to be David Sokol*, chairman of 66
MidAmercan Energy (Berkshire’s utility business). Mr. Sokol (age 53) has been 60
involved in the energy industry for 30 years. He successfully improved results at 01- Oct 01- Jan 01- Apr 01- Jul
Berkshire’s NetJets operation and was instrumental in the MidAmerican’s $5 bn
Link to Barclays Capital Live for interactive charting
acquisition of PacifiCorp. Based on Mr. Sokol’s strong track record, we believe he
would be successful as the next CEO of Berkshire Hathaway.
U.S. Insurance/Non-Life
BRK.B: Quarterly and Annual EPS USD Jay Gelb, CFA
2009 2010 2011 Change y/y 1.212.526.1561
jay.gelb@barcap.com
FY Dec Actual Old New Cons Old New Cons 2010 2011
BCI, New York
Q1 0.73A 0.93A 0.93A N/A N/A N/A N/A 27% N/A
Sarah DeWitt, CFA
Q2 0.76A 1.24A 1.24A N/A N/A N/A N/A 63% N/A
1.212.526.9947
Q3 0.88A 1.31E 1.31E N/A N/A N/A N/A 49% N/A sarah.dewitt@barcap.com
Q4 0.87A 1.26E 1.26E N/A N/A N/A N/A 45% N/A BCI, New York
Year 3.25A 4.75E 4.75E N/A 5.00E 5.00E N/A 46% 5%
Erica Schaul, CFA
P/E 17.7 16.9 1.212.526.8190
Source: Barclays Capital erica.schaul@barcap.com
Consensus numbers are from Thomson Reuters
BCI, New York

Barclays Capital does and seeks to do business with companies covered in its research reports. As a
result, investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 9.
Barclays Capital | Berkshire Hathaway Inc.

* From Tiananmen Square to Possible Buffett Successor published in The Wall Street Journal
on July 30, 2010

We anticipate Berkshire should deliver strong 3Q operating results with robust results in
Manufacturing, Service, & Retail and Burlington Northern, stable results in Insurance and
Utilities, and perhaps volatile investment results.

BRK.B currently trades at 1.44x 2Q10 BV (2.09x tangible BV), which is below its historical
median of 1.7x (historical range: 1.1x-2.7x). Our $88 price target is based on 1.3x YE 2011E
BV of $68.

3Q10 Berkshire Hathaway Earnings Preview

Earnings release details: We expect Berkshire Hathaway to report 3Q results on November 5

after the close. The company does not hold a quarterly conference call.

„ Berkshire Hathaway’s 3Q10 operating EPS per Class B share could be $1.31 ($1,960 per
A share), up 48% compared to a year ago, driven by improved results in Insurance,
Burlington Northern, and the Manufacturing, Service & Retail segments.

„ First-quarter comprehensive EPS per B share could be $2.48 vs. $4.96 per B share a year
ago. Based on our assessment of potential investment marks, our current thinking is
that Berkshire’s linked-qtr BV could rise 4% in 3Q10 to $60.25 per B share.

„ Pre-tax unrealized net investment gains could be $4.5 billion in the most recent quarter
versus gains of $12.7 billion a year ago.

„ Total Insurance pre-tax operating income could increase 17% year-over-year to $2.2
billion. Total underwriting income could be $740 million in 3Q10 versus $560 million a
year ago, reflecting solid results at GEICO, Berkshire Hathaway Re, and GenRe. The
segment’s total investment income could increase 11% year over year to $1.5 billion
due to increased invested assets.

„ Within the Insurance segment, GEICO’s pre-tax underwriting income could increase
43% year-over-year to $285 million, reflecting 5% premium growth and improvement
in underwriting margins due to benign loss cost trends. GenRe could report
underwriting income of $220 million versus $186 million a year ago due to improved
underwriting margins. Pre-tax underwriting income at Berkshire Hathaway Re could
improve to a $235 million versus $167 million a year ago, reflecting the lumpy nature of
the business.

„ Earned premiums at Berkshire Hathaway Re could include a $2 billion benefit related to

retroactive reinsurance deal with CNA. As part of the deal, Berkshire Hathaway Re
assumes $4 billion of asbestos and environmental liabilities in return for $2 billion of
premiums. These transactions typically produce GAAP underwriting losses but the
economics should be attractive over the life of the contract, taking into account
investment income generated by the upfront premiums before claims are paid (float).

„ The Utilities and Energy (MidAmerican) segment (excluding BNSF) revenues could
increase 2% year-over-year to $2.9 billion. Pre-tax income could decline 13% year-over-
year to $374 million

„ Burlington Northern’s revenues could increase 22% year over year to $4.3 billion, and
pre-tax earnings could increase 46% year over year to $1.3 billion. Notably, the

25 October 2010 2
Barclays Capital | Berkshire Hathaway Inc.

Burlington Northern acquisition closed on February 12, 2010, and therefore did not
contribute to Berkshire’s operating earnings result a year ago.

„ The Manufacturing, Service, and Retailing segment revenues could increase 9% year
over year to $17.4 billion in 3Q10. Pre-tax earnings are expected to nearly double year
over year to $1.2 billion, reflecting strong improvement in Other Service (includes
NetJets) and Other Manufacturing.

„ The Finance and Financial Products segment (mostly Clayton Homes) revenues could
be $1.2 billion, +8% vs. the year ago quarter. Pretax earnings could increase 6% year
over year to $150 million.

Figure 1: BRK 3Q10 Estimates

3Q10A 3Q10E % chg est

(in $ mil, except per share)

After-tax earnings
Insurance-underwriting $363 $481 33%
Insurance-investment income 976 1,085 -11%
Non-insurance businesses 774 1,698 119%
Other (58) (34) -41%
Operating earnings $2,055 $3,229 57%
Investment and derivative gains (losses) 1,183 0 NA
Net earnings (loss) attributable to Berkshire shareholders 3,238 3,229 0%
Other comprehensive income 8,311 2,897 NM
Comprehensive earnings 11,549 6,127 -47%

Net earnings (loss) per Class A equiv. shr attributable to

Berkshire shareholders $2,087 $1,960 -6%
Investment and derivative gains (losses) per Class A equiv. shr 762 0 NA
Operating earnings per Class A equivalent share 1,324 1,960 48%

Net earnings (loss) per Class B equiv. shr attributable to

Berkshire shareholders $1.39 $1.31 -6%
Investment and derivative gains (losses) per Class B equiv. shr $0.51 $0.00 NA
Operating earnings per Class B equivalent share $0.88 $1.31 48%
Source: Company data, Barclays Capital estimates

Valuation
Our price target of $88 per Class B share ($132,000 per Class A share) for Berkshire
Hathaway based on a multiple of 1.29x (below the average historical multiple of 1.67x since
2000) our YE11 book value estimate of $68 per Class B share ($102,300 per A share). We
also estimate Berkshire’s fair value using sum-of-the-parts and intrinsic value methods,
which generate an outlook of approximately $90 per Class B share and $76 per Class B
share, respectively.

25 October 2010 3
Barclays Capital | Berkshire Hathaway Inc.

Figure 2: BRK Valuation Methods

Valuation Price-to-stated book Sum-of-the-parts Intrinsic value

Method

$88 per Class B share $90 per Class B share $82 per Class B share
Approximate estimated fair value $132,000 per Class A share $135,000 per Class A share $122,400 per Class A share
per share

Strengths of this method Easy to calculate. Applies separate valuation for each Warren Buffett uses a modified
business. version.
Historical basis for valuation.
Separately values investments and
operating units.
Drawbacks of this method Book value is believed to be lower Valuation based on comprehensive Many estimated inputs, including
than intrinsic value. income (incl. est. investment gains). WACC and terminal value of future
BNSF is newly acquired, so Determining the right valuation for earnings.
historical valuation is not highly each segment can be a challenge.
relevant.

Source: Company data, Barclays Capital estimates

Figure 3: Trailing Price-to-Stated Book Since 2000 Figure 4: Trailing Price-to-Tangible Book Since 2000
2.1 3.3 Trailing Price-to-Tangible Book Multiple
Trailing Price-to-Stated Book Multiple
2.0 3.1
1.9 2.9
1.8 2.7
1.7 2.5
1.6 2.3
1.5 2.1
1.4
1.9
1.3
1.7
1.2
1.5
1.1
Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09
Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Source: FactSet, Barclays Capital research. Source: FactSet, Barclays Capital research.

Figure 5: Trailing Price-to-Stated Book Since 2008 Figure 6: Trailing Price-to-Tangible Book Since 2008
2.1 Trailing Price-to-Stated Book Multiple 2.7 Trailing Price-to-Tangible Book Multiple
2.0
2.5
1.9
1.8
2.3
1.7
1.6 2.1
1.5
1.9
1.4
1.3
1.7
1.2
1.1 1.5
Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Source: FactSet, Barclays Capital research. Source: FactSet, Barclays Capital research.

25 October 2010 4
Barclays Capital | Berkshire Hathaway Inc.

Figure 7: Berkshire Hathaway Sum Of The Parts Analysis

(In $billions, except where noted and per share)

Pre-Tax Non-Insurance Segment Operating Earnings

Pre-tax earnings Pct. 2011E After-tax
2011E Earnings P/E valuation, (a)
BNSF 4.5 27% 13.0 38
Manufacturing, service & retail 5.6 33% 13.0 47
MidAmerican 1.5 9% 11.0 11
Finance and financial products 0.6 4% 12.0 5
Total 12.2 100
Unrealized appreciation of investments 4.6 28% 15.0 45
Grand total 16.8 100% 13.3 146

Plus: value of Insurance business 77

Berkshire Hathaway sum-of-the-parts valuation 222

Class A and equivalent shares outstanding (in millions) 1.65
Sum-of-the-parts valuation per Class A and equivalent shares $135,052
Sum-of-the-parts valuation per Class B and equivalent shares $90

U.S. P&C Statutory Capital - YE09 (in $bn)

YE09 Statutory Estimated Est.
Capital Valuation Value
National Indemnity Co. $38 1.20 $46
Columbia Insurance Co. 8 1.00 8
General Re 10 1.00 10
GEICO 8 1.50 12
Total 65 1.18 77

Multiple applied 1.18 x

Insurance valuation 77

(a) After-tax assuming 34% tax rate.

Source: Company data, Barclays Capital estimates

25 October 2010 5
Barclays Capital | Berkshire Hathaway Inc.

Figure 8: Berkshire Hathaway Intrinsic Value Analysis

(In $millions, except per share) Weighted avg. cost of capital (WACC)
Mkt value of equity 205,948 78%
Debt 57,970 22%
Valuation Summary Total 263,918 100%
(In $mn except per share)
Value of investments & cash $135,502 Beta 0.96
PV of non-insurance A/T income 124,144 10 Yr US Treasury yield 2.6%
Company value 259,646 Risk premium 7.0%
Less: debt (57,970) Market return 9.6%
Value of shareholders' equity 201,676 Cost of equity 9.3%
Class A and equivalent shares out 1.65
Value of equity per Class A equiv. share $122,423 Cost of debt, pre-tax 4.8%
Value of equity per Class B equiv. share $82 1-Tax rate 0.66
Cost of debt, after-tax 3.2%

WACC 7.9%

Perpetual growth rate (g) 1.5%

Terminal
2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E Value
Non-Insurance income
Burlington Northern Santa Fe $3,538 $4,490 4,715 4,832 4,953 5,077 5,204 5,334 5,467 5,604 5,744 5,888
Utilities & Energy (MidAmerican) $1,511 1,498 1,573 1,612 1,653 1,694 1,736 1,780 1,824 1,870 1,916 1,964
Manufacturing, Service & Retail $4,441 $5,575 5,854 6,000 6,150 6,304 6,461 6,623 6,789 6,958 7,132 7,311
Finance & Financial Products $566 $600 630 646 662 678 695 713 731 749 768 787
Less: Minority interest ($541) ($480) (504) (517) (530) (543) (556) (570) (584) (599) (614) (629)
Total Segment pre-tax income 9,515 11,683 12,267 12,574 12,888 13,210 13,541 13,879 14,226 14,582 14,946 15,320
Effective tax rate 30% 34% 34% 34% 34% 34% 34% 34% 34% 34% 34% 34%
Total Segment after-tax income 6,660 7,711 8,096 8,299 8,506 8,719 8,937 9,160 9,389 9,624 9,865 10,111
Discount period 1 2 3 4 5 6 7 8 9 10 11 12
PV after-tax income + terminal value 6,171 6,619 6,439 6,115 5,807 5,514 5,237 4,973 4,723 4,485 4,259 63,803

WACC 7.9% Terminal mult. 15.8

(1+g)/(WACC-g)
Source: Company data, Barclays Capital estimates

25 October 2010 6
Barclays Capital | Berkshire Hathaway Inc.

Figure 9: Berkshire Hathaway Annual Summary Model

(In $millions, except per share)

2006 2007 2008 2009 2010E 2011E
Insurance:
Total P&C insurance net premiums earned $21,600 $29,321 $22,945 $25,258 $27,388 $26,000
Life/health net premiums earned 2,364 2,462 2,580 2,626 2,857 3,000
Total insurance premiums earned 23,964 31,783 25,525 27,884 30,245 29,000
P&C incurred losses & claims expense 17,915 28,409 22,733 26,378 27,794 24,375
Loss reserve change 3,060 12,950 7,342 10,856 12,294 8,875
Paid claims 14,855 15,459 15,391 15,522 15,500 15,500
P&C pre-tax underwriting gain/(loss) 3,685 3,294 2,613 1,329 2,221 1,625
Life/health pre-tax underwriting gain/(loss) 153 80 179 177 230 200
Total Insurance underwriting income 3,838 3,374 2,792 1,506 2,451 1,825
Insurance Investment Income 4,316 4,758 4,722 5,173 5,777 6,000
Insurance pre-tax income 8,154 8,132 7,514 6,679 8,228 7,825
Utilities, Energy, & Railroad:
MidAmerican pre-tax income 1,476 1,774 2,963 1,528 1,511 1,498
Burlington Northern Santa Fe pre-tax income - - - - 3,538 4,490
Utilities, Energy & Railroad pre-tax income 1,476 1,774 2,963 1,528 5,049 5,988
Manufacturing Service & Retail pre-tax income 3,526 3,947 4,023 2,058 4,441 5,575
Finance & Financial Products pre-tax income 1,157 1,006 787 781 566 600
Total segment pre-tax income 14,313 14,859 15,287 11,046 18,284 19,988
Investment gains/losses 1,953 5,599 918 387 1,701 559
Other-than-temporary losses on investments (142) (1) (1,558) (3,224) - -
Derivative gains/losses 824 (89) (6,821) 3,624 (1,765)
Interest expense, ex. interest allocated to op businesses 76 52 35 42 208 212
Eliminations & other (94) (155) (217) (292) (286) (320)
Earnings before taxes & equity method 16,778 20,161 7,574 11,499 17,726 20,015
Income tax expense 5,505 6,594 1,978 3,538 5,285 6,805
Earnings from equity method investments - - - 427 50 -
Net earnings 11,273 13,567 5,596 8,388 12,491 13,210
Less earnings attributable to non-controlling interests 258 354 602 386 541 480
Net earnings attributable To Berkshire Hathaway 11,015 13,213 4,994 8,002 11,950 12,730
Investment & derivative gains/(losses) 1,709 3,579 (4,645) 486 305 369
Operating income, A/T 9,306 9,634 9,639 7,516 11,645 12,361
Net earnings attributable To Berkshire Hathaway 11,015 13,213 4,994 8,002 11,950 12,730
Net chg in unrealized appreciation of investments 9,278 2,523 (23,342) 17,607 (393) 4,584
Applicable income taxes 3,246 872 (8,257) 6,263 (116) 1,604
Foreign currency translation & other (493) (4,803) (2,376) 3,372 (901) -
Applicable income taxes (381) (1,795) (194) 987 (24) -
Other comprehensive income, net 5,920 (1,357) (17,267) 13,729 (1,154) 2,979
Comprehensive income attributable to Berkshire 16,935 11,856 (12,273) 21,731 10,796 15,709
Per share
Operating earnings per Class A equivalent share $6,036 $6,232 $6,223 $4,845 $7,121 $7,503
Operating earnings per Class B share $4.02 $4.16 $4.15 $3.23 $4.75 $5.00
Net income per Class A equivalent share $7,145 $8,548 $3,224 $5,158 $7,307 $7,727
Comprehensive earnings per Class A equivalent share $10,985 $7,670 ($7,924) $14,007 $6,602 $9,536
Class A shares outstanding 1.12 1.08 1.06 1.06 0.99 0.99
Class B shares outstanding 637.62 700.00 735.35 744.70 986.77 986.77
Class B shrs on equivalent class A basis 0.43 0.47 0.49 0.50 0.66 0.66
Class A equivalent shrs outstanding 1.54 1.55 1.55 1.55 1.65 1.65
Avg. Class A equivalent shrs outstanding 1.54 1.55 1.55 1.55 1.64 1.65
Book value per Class A equivalent share $70,281 $78,008 $70,530 $84,487 $92,717 $102,253
Book value per Class B equivalent share $46.85 $52.01 $47.02 $56.32 $61.81 $68.17
Linked-qtr growth NM NM NM NM NM NM
Book value per share, ex AOCI per A share $55,387 $64,039 $67,977 $73,020 $82,715 $90,442
Tangible book value per Class A share $49,383 $56,775 $48,725 $62,594 $62,904 $72,440
Tangible book value per Class B share $32.92 $37.85 $32.48 $41.73 $41.94 $48.29
Operating return on equity 9.3% 8.4% 8.4% 6.3% 8.2% 7.7%
Operating ROE, ex. AOCI 11.7% 10.4% 9.4% 6.9% 9.3% 8.7%
Return on tangible equity 12.9% 11.7% 11.8% 8.7% 11.6% 11.1%
Comprehensive ROE 16.9% 10.3% -10.7% 18.1% 7.6% 9.8%
Comprehensive tangible ROE 23.5% 14.5% -15.0% 25.2% 10.8% 14.1%
Cash dividends per share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
P&C Insurance combined ratio 82.9% 88.8% 88.6% 94.7% 91.9% 93.8%
Pretax catastrophe losses 254 226 1,022 131 830 450
Catastrophe comb. ratio impact 1.2% 0.8% 4.5% 0.5% 3.0% 1.7%
Prior year reserve development (612) (1,478) (1,140) (905) (150) 0
Prior year development comb. ratio impact -2.8% -5.0% -5.0% -3.6% -0.5% 0.0%
P&C Insurance combined ratio ex cats 81.8% 88.0% 84.2% 94.2% 88.9% 92.0%
P&C Insurance CR ex cats & PY devel. 84.6% 93.0% 89.1% 97.8% 89.4% 92.0%
Year-over-year percentage change
Insurance:
P&C net premiums earned 9.6% 35.7% -21.7% 10.1% 8.4% -5.1%
Investment income 24.0% 10.2% -0.8% 9.6% 11.7% 3.9%
Operating income 130.8% -0.3% -7.6% -11.1% 23.2% -4.9%
MidAmerican pre-tax income NM 20.2% 67.0% -48.4% -1.1% -0.9%
BNSF pre-tax income NM NM NM NM NM 26.9%
Total Utilities & Energy pre-tax income NM 20.2% 67.0% -48.4% NM 18.6%
Manufacturing Service & Retail pre-tax income 34.4% 11.9% 1.9% -48.8% NM 25.5%
Finance & Financial Products pre-tax income 40.8% -13.1% -21.8% -0.8% -27.5% 6.0%
Total pre-tax segment income 105.1% 3.8% 2.9% -27.7% 65.5% 9.3%
Operating EPS 86.1% 3.3% -0.2% -22.1% 47.0% 5.4%
Book value per share 18.4% 11.0% -9.6% 19.8% 9.7% 10.3%

Effective tax rate 32.8% 32.7% 26.1% 30.8% 29.8% 34.0%

Adjusted total debt/capital 18.0% 17.1% 19.3% 16.5% 23.3% 21.6%
Total insurance float $50,887 $58,698 $58,488 $61,911
Avg Insurance investments (excl cash, fixed income at cost) $79,855 $94,183 $98,046 $104,019 $118,225 $129,816
Average Insurance pre-tax yield 5.4% 5.1% 4.8% 5.0% 4.9% 4.6%
Insurance invested assets (at fair value) per A share $80,636 $90,343 $77,793 $98,672 $88,116 $97,488
Non Insurance pre-tax earnings $5,901 $6,373 $7,171 $3,981 $9,515 $11,683
Non-Insurance earnings per A share $3,828 $4,123 $4,630 $2,566 $5,818 $7,092
Free cash flow $5,624 $7,177 $5,114 $10,909 $7,512 $10,255
Source: Company data, Barclays Capital estimates.

25 October 2010 7
Barclays Capital | Berkshire Hathaway Inc.

Figure 10: Berkshire Hathaway Quarterly Summary Model

(In $millions, except per share) 2008 2009 2010E
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1QA 2QA 3Q 4Q
Insurance:
Total P&C insurance net premiums earned $5,543 $5,564 $5,826 $6,012 $7,567 $5,873 $5,939 $5,879 $6,735 $6,188 $8,280 $6,185
Life/health net premiums earned 666 667 639 608 616 612 656 742 691 676 700 790
Total insurance premiums earned 6209 6231 6465 6620 8,183 6,485 6,595 6621 7,426 6,864 8,980 6,975
P&C incurred losses & claims expense 5288 5051 5767 4226 7,261 5,837 5,458 5373 6,412 5,530 7,630 5,595
Loss reserve change NA NA NA NA NA NA NA NA NA NA NA NA
Paid claims NA NA NA NA NA NA NA NA NA NA NA NA
P&C pre-tax underwriting gain/(loss) 255 513 59 1786 306 36 481 506 323 658 650 590
Life/health pre-tax underwriting gain/(loss) 27 47 67 38 7 62 79 29 22 58 90 60
Total Insurance underwriting income 282 560 126 1,824 313 98 560 535 345 716 740 650
Insurance Investment Income 1,089 1,204 1,074 1,355 1,354 1,482 1,348 989 1,283 1,494 1,500 1,500
Insurance pre-tax income 1,371 1,764 1,200 3,179 1,667 1,580 1,908 1,524 1,628 2,210 2,240 2,150
Utilities, Energy, & Railroad:
MidAmerican pre-tax income 516 329 526 1,592 303 402 441 382 395 338 374 404
Burlington Northern Santa Fe pre-tax income - - - - - - - - 476 974 1,095 993
Utilities, Energy & Railroad pre-tax income 516 329 526 1,592 303 402 441 382 871 1,312 1,469 1,397
Manufacturing Service & Retail pre-tax income 845 1,285 1,113 780 511 437 608 502 853 1,188 1,200 1,200
Finance & Financial Products pre-tax income 241 254 163 129 112 115 142 412 111 155 150 150
Total segment pre-tax income 2,973 3,632 3,002 5,680 2,593 2,534 3,099 2,820 3,463 4,865 5,059 4,897
Investment gains/losses 115 675 (46) 174 (370) 3 110 644 1,318 383 - -
Other-than-temporary losses on investments 0 (429) (250) (879) (3,096) (30) (25) (73) 0 0 - -
Derivative gains/losses (1,641) 689 (1,261) (4,608) (1,517) 2,357 1,732 1,052 411 (2,176) - -
Interest expense, ex. interest allocated to op businesses 8 9 9 9 23 28 11 -20 49 53 53 53
Eliminations & other 14 (87) 66 (210) (130) (45) (66) (51) (45) (81) (80) (80)
Earnings before taxes & equity method 1,453 4,471 1,502 148 (2,543) 4,791 4,839 4,412 5,098 2,938 4,926 4,764
Income tax expense 408 1,443 294 (167) (1,014) 1,520 1,601 1,431 1,336 848 1,576 1,525
Earnings from equity method investments 0 0 0 0 83 113 111 120 50 0 - -
Net earnings 1,045 3,028 1,208 315 (1,446) 3,384 3,349 3,101 3,812 2,090 3,349 3,240
Less earnings attributable to non-controlling interests 105 148 151 198 88 89 111 98 179 122 120 120
Net earnings attributable To Berkshire Hathaway 940 2,880 1,057 117 (1,534) 3,295 3,238 3,003 3,633 1,968 3,229 3,120
Investment & derivative gains/(losses) (991) 610 (1,012) (3,252) (3,239) 1,515 1,183 1,027 1,411 (1,106) - -
Operating income, A/T 1,931 2,270 2,069 3,369 1,705 1,780 2,055 1,976 2,222 3,074 3,229 3,120
Net earnings attributable To Berkshire Hathaway 940 2,880 1,057 117 (1,534) 3,295 3,238 3,003 3,633 1,968 3,229 3,120
Net chg in unrealized appreciation of investments (3,998) (6,690) 3,184 (15,838) (7,034) 11,596 12,723 322 3,058 (9,032) 4,458 1,123
Applicable income taxes (1,408) (2,331) 1,113 (5,631) (2,460) 4,063 4,534 126 1,110 (3,179) 1,560 393
Foreign currency translation & other 103 72 (1,039) (1,512) (506) 982 221 2,675 (435) (466) - -
Applicable income taxes (38) 3 (71) (88) (87) (5) 99 980 0 (24) - -
Other comprehensive income, net (2,449) (4,290) 1,103 (11,631) (4,993) 8,435 8,311 1,891 1,513 (6,457) 2,897 730
Comprehensive income attributable to Berkshire (1,509) (1,410) 2,160 (11,514) (6,527) 11,730 11,549 4,894 5,146 (4,489) 6,127 3,850
Per share
Operating earnings per Class A equivalent share $1,247 $1,465 $1,336 $2,175 $1,100 $1,147 $1,324 $1,273 $1,390 $1,866 $1,960 $1,894
Operating earnings per Class B share $0.83 $0.98 $0.89 $1.45 $0.73 $0.76 $0.88 $0.85 $0.93 $1.24 $1.31 $1.26
Net income per Class A equivalent share $607 $1,859 $682 $76 ($989) $2,123 $2,087 $1,935 $2,271 $1,195 $1,960 $1,894
Comprehensive earnings per Class A equivalent share -$975 -$910 $1,394 -$7,432 ($4,210) $7,559 $7,443 $3,154 $3,217 ($2,725) $3,719 $2,337
Class A shares outstanding 1.08 1.07 1.07 1.06 1.06 1.06 1.06 1.06 1.01 0.99 0.99 0.99
Class B shares outstanding 702.11 714.30 724.79 735.35 741.32 741.62 742.02 744.70 957.96 986.77 986.77 986.77
Class B shrs on equivalent class A basis 0.47 0.48 0.48 0.49 0.49 0.49 0.49 0.50 0.64 0.66 0.66 0.66
Class A equivalent shrs outstanding 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.65 1.65 1.65 1.65
Avg. Class A equivalent shrs outstanding 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.60 1.65 1.65 1.65
Book value per Class A equivalent share $77,072 $76,163 $77,558 $70,530 $66,248 $73,806 $81,247 $84,487 $89,374 $86,661 $90,380 $92,717
Book value per Class B equivalent share $51.38 $50.78 $51.71 $47.02 $44.17 $49.20 $54.16 $56.32 $59.58 $57.77 $60.25 $61.81
Linked-qtr growth -1.2% -1.2% 1.8% -9.1% -6.1% 11.4% 10.1% 4.0% 5.8% -3.0% 4.3% 2.6%
Book value per share, ex AOCI per A share $64,695 $66,558 $67,241 $67,977 $66,847 $68,970 $71,054 $73,020 $77,653 $78,861 $80,821 $82,715
Tangible book value per Class A share $55,415 $54,524 $55,914 $48,725 $44,479 $51,945 $59,353 $62,594 $59,799 $56,848 $60,567 $62,904
Tangible book value per Class B share $36.94 $36.35 $37.28 $32.48 $29.65 $34.63 $39.57 $41.73 $39.87 $37.90 $40.38 $41.94
Operating return on equity 6.1% 6.1% 6.7% 6.6% 7.1% 9.6% 9.4% 8.8%
Operating ROE, ex. AOCI 6.7% 6.8% 7.7% 7.2% 7.7% 10.4% 10.6% 10.0%
Return on tangible equity 8.8% 8.6% 9.2% 9.2% 10.6% 14.1% 13.5% 12.4%
Comprehensive ROE -23.5% 40.4% 37.5% 16.3% 16.5% -14.0% 17.8% 10.9%
Comprehensive tangible ROE -33.7% 56.8% 51.7% 22.7% 24.6% -20.6% 25.5% 15.3%
Cash dividends per share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
P&C Insurance combined ratio 95.4% 90.8% 99.0% 70.3% 96.0% 99.4% 91.9% 91.4% 95.2% 89.4% 92.1% 90.5%
Pretax catastrophe losses 32 78 1,049 -137 71 63 101 -104 500 150 105 75
Catastrophe comb. ratio impact 0.6% 1.4% 18.0% -2.3% 0.9% 1.1% 1.7% -1.8% 7.4% 2.4% 1.3% 1.2%
Prior year reserve development
Prior year development comb. ratio impact
P&C Insurance combined ratio ex cats 94.8% 89.4% 81.0% 72.6% 95.0% 98.3% 90.2% 93.2% 87.8% 86.9% 90.9% 89.2%
P&C Insurance CR ex cats & PY devel.
Year-over-year percentage change
Insurance:
P&C net premiums earned -57.1% 4.4% 7.6% 6.0% 36.5% 5.6% 1.9% -2.2% -11.0% 5.4% 39.4% 5.2%
Investment income 1.0% -2.6% -11.8% 10.4% 24.3% 23.1% 25.5% -27.0% -5.2% 0.8% 11.3% 51.7%
Operating income -31.6% -20.2% -39.1% 63.2% 21.6% -10.4% 59.0% -52.1% -2.3% 39.9% 17.4% 41.1%
MidAmerican pre-tax income 0.6% -11.6% 9.4% 290.2% -41.3% 22.2% -16.2% -76.0% 30.4% -15.9% -15.3% 5.8%
BNSF pre-tax income NA NA NA NA NM NM NM NM NM NM NM NM
Total Utilities & Energy pre-tax income 0.6% -11.6% 9.4% 290.2% -41.3% 22.2% -16.2% -76.0% NM NM NM NM
Manufacturing Service & Retail pre-tax income 8.2% 18.2% 4.0% -22.7% -39.5% -66.0% -45.4% -35.6% 66.9% NM 97.4% NM
Finance & Financial Products pre-tax income -0.4% -8.3% -40.3% -39.7% -53.5% -54.7% -12.9% 219.4% -0.9% 34.8% 5.6% -63.6%
Total pre-tax segment income -16.0% -8.0% -20.9% 58.7% -12.8% -30.2% 3.2% -50.4% 33.6% 92.0% 63.2% 73.7%
Operating EPS -13.0% -9.8% -19.3% 43.2% -11.8% -21.7% -0.8% -41.4% 26.4% 62.7% 48.0% 48.7%
Book value per share 8.2% 2.2% 0.1% -9.6% -14.0% -3.1% 4.8% 19.8% 34.9% 17.4% 11.2% 9.7%

Effective tax rate 28.1% 32.3% 19.6% NM 39.9% 31.7% 33.1% 32.4% 26.2% 28.9% 32.0% 32.0%
Adjusted total debt/capital 18.2% 17.7% 17.6% 19.3% 20.7% 18.9% 17.1% 16.5% 23.8% 24.5% 23.8% 23.3%
Total insurance float $60,000 $61,000 $62,000 $61,911 $63,500 $63,000
Avg Insurance investments (excl cash, fixed income at cost) $102,494 $102,021 $103,386 $99,774 $92,319 $97,086 $107,666 $112,958 $111,655 $105,568 $102,940 $105,014
Average Insurance pre-tax yield 4.3% 4.7% 4.2% 5.4% 5.9% 6.1% 5.0% 3.5% 4.6% 5.7% 5.8% 5.7%
Insurance invested assets (at fair value) per A share $87,441 $83,978 $86,188 $74,337 $73,997 $83,530 $92,437 $98,672 $86,466 $82,253 $86,287 $88,116
Non Insurance pre-tax earnings $1,497 $1,720 $1,651 $2,303 $838 $865 $1,080 $1,198 $1,656 $2,533 $2,699 $2,627
Non-Insurance earnings per A share $967 $1,110 $1,066 $1,487 $540 $557 $696 $772 $1,035 $1,538 $1,638 $1,595
Free cash flow $2,643 $748 $2,337 $1,588 NA NA NA NA $2,428 $2,142 $1,878 $1,878

Source: Company data, Barclays Capital estimates.

25 October 2010 8
Barclays Capital | Berkshire Hathaway Inc.

ANALYST(S) CERTIFICATION(S)
I, Jay Gelb, CFA, hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of the
subject securities or issuers referred to in this research report and (2) no part of my compensation was, is or will be directly or indirectly related to
the specific recommendations or views expressed in this research report.

IMPORTANT DISCLOSURES CONTINUED

For current important disclosures, including, where relevant, price target charts, regarding companies that are the subject of this research report,
please send a written request to: Barclays Capital Research Compliance, 745 Seventh Avenue, 17th Floor, New York, NY 10019 or refer to
http://publicresearch.barcap.com or call 1-212-526-1072.
The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's total
revenues, a portion of which is generated by investment banking activities.
On September 20, 2008, Barclays Capital acquired Lehman Brothers' North American investment banking, capital markets, and private investment
management businesses. All ratings and price targets prior to this date relate to coverage under Lehman Brothers Inc.
Barclays Capital produces a variety of research products including, but not limited to, fundamental analysis, equity-linked analysis, quantitative
analysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in other
types of research products, whether as a result of differing time horizons, methodologies, or otherwise.
Primary Stocks (Ticker, Date, Price)
Berkshire Hathaway Inc. (BRK.B, 29-Jul-2010, USD 78.04), 2-Equal Weight/2-Neutral
Materially Mentioned Stocks (Ticker, Date, Price)
Berkshire Hathaway Inc. (BRK.A, 29-Jul-2010, USD 116866.00), 2-Equal Weight/2-Neutral
Guide to the Barclays Capital Fundamental Equity Research Rating System:
Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2-Equal Weight or 3-Underweight (see definitions
below) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (the “sector
coverage universe”).
In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-
Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investors
should carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone.
Stock Rating
1-Overweight - The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month
investment horizon.
2-Equal Weight - The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-
month investment horizon.
3-Underweight - The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-month
investment horizon.
RS-Rating Suspended - The rating and target price have been suspended temporarily due to market events that made coverage impracticable or
to comply with applicable regulations and/or firm policies in certain circumstances including when Barclays Capital is acting in an advisory
capacity in a merger or strategic transaction involving the company.
Sector View
1-Positive - sector coverage universe fundamentals/valuations are improving.
2-Neutral - sector coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.
3-Negative - sector coverage universe fundamentals/valuations are deteriorating.
Below is the list of companies that constitute the "sector coverage universe":

U.S. Insurance/Non-Life
ACE Limited (ACE)
Aon Corporation (AON)
Aspen Insurance Holdings (AHL)
Brown & Brown, Inc. (BRO)
Flagstone Reinsurance Holdings Ltd. (FSR)
OneBeacon Insurance Group (OB)
RenaissanceRe Holdings (RNR)
Willis Group Holdings Ltd. (WSH)
Allied World Assurance Co. (AWH)
Arch Capital Group Ltd. (ACGL)
Berkshire Hathaway Inc. (BRK.A)
Chubb Corp. (CB)
Marsh & McLennan Cos. (MMC)
PartnerRe Ltd. (PRE)
The Hanover Insurance Group (THG)
XL Group plc (XL)
Allstate Corp. (ALL)
Arthur J. Gallagher & Co. (AJG)
Berkshire Hathaway Inc. (BRK.B)
Everest Re Group (RE)
Montpelier Re Holdings (MRH)
Progressive Corp. (PGR)
The Travelers Companies, Inc. (TRV)

25 October 2010 9
Barclays Capital | Berkshire Hathaway Inc.

IMPORTANT DISCLOSURES CONTINUED

Distribution of Ratings:
Barclays Capital Inc. Equity Research has 1607 companies under coverage.
42% have been assigned a 1-Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 53% of
companies with this rating are investment banking clients of the Firm.
44% have been assigned a 2-Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 46% of
companies with this rating are investment banking clients of the Firm.
11% have been assigned a 3-Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 37% of
companies with this rating are investment banking clients of the Firm.
Barclays Capital offices involved in the production of equity research:
London
Barclays Capital, the investment banking division of Barclays Bank PLC (Barclays Capital, London)
New York
Barclays Capital Inc. (BCI, New York)
Tokyo
Barclays Capital Japan Limited (BCJL, Tokyo)
São Paulo
Banco Barclays S.A. (BBSA, São Paulo)
Hong Kong
Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong)
Toronto
Barclays Capital Canada Inc. (BCC, Toronto)
Johannesburg
Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg)

25 October 2010 10
Barclays Capital | Berkshire Hathaway Inc.

IMPORTANT DISCLOSURES CONTINUED

Berkshire Hathaway Inc. (BRK.B) Stock Rating Sector View
USD 78.04 (29-Jul-2010) 2-EQUAL WEIGHT 2-NEUTRAL
Rating and Price Target Chart - USD (as of 29-Jul-2010) Currency=USD

Date Closing Price Rating Price Target

105
12-Apr-2010 80.48 2-Equal Weight 88.00
98

90

82

75

68

60

52

45

Jan- 08 Jul- 08 Jan- 09 Jul- 09 Jan- 10 Jul- 10

Closing Price Target Price Rating Change

Link to Barclays Capital Live for interactive charting

Barclays Bank PLC and/or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities of Berkshire Hathaway
Inc. in the previous 12 months.
Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by Berkshire Hathaway Inc. or one of its
affiliates.
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from Berkshire Hathaway Inc. in the past 12
months.
Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from Berkshire
Hathaway Inc. within the next 3 months.
Barclays Bank PLC and/or an affiliate trades regularly in the shares of Berkshire Hathaway Inc..
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from Berkshire Hathaway Inc. within the past
12 months.
Berkshire Hathaway Inc. is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate.
Berkshire Hathaway Inc. is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays Bank
PLC and/or an affiliate.
Barclays Bank PLC is associated with specialist firm Barclays Capital Market Makers, which makes a market in Berkshire Hathaway Inc. stock. At
any given time, the associated specialist may have "long" or "short" inventory position in the stock; and the associated specialist may be on the
opposite side of orders executed on the Floor of the Exchange in the stock.
Valuation Methodology: We determine our price target for Berkshire Hathaway of $88 primarily by applying a price-to-book multiple of 1.3x
(versus a historical average since 2000 of 1.59x) to our YE 2011 book value estimate of around $70. As a point of reference, our price target
valuation implies a price-to-tangible book multiple of 1.86x, versus a historical average since 2000 of 2.30x.
Risks which May Impede the Achievement of the Price Target: There are several risks that could impede the achievement of our price target for
Berkshire Hathaway including managment succession, large and concentrated stock investments, derivative losses, earnings volatility,
catastrophe losses, M&A risk and regulatory risk.

25 October 2010 11
Barclays Capital | Berkshire Hathaway Inc.

IMPORTANT DISCLOSURES CONTINUED

Berkshire Hathaway Inc. (BRK.A) Stock Rating Sector View
USD 116866.00 (29-Jul-2010) 2-EQUAL WEIGHT 2-NEUTRAL
Rating and Price Target Chart - USD (as of 29-Jul-2010) Currency=USD

Date Closing Price Rating Price Target

150K
12-Apr-2010 120465.00 2-Equal Weight 132000.00

140K

130K

120K

110K

100K

90K

80K

70K

Jan- 08 Jul- 08 Jan- 09 Jul- 09 Jan- 10 Jul- 10

Closing Price Target Price Rating Change

Link to Barclays Capital Live for interactive charting

Barclays Bank PLC and/or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities of Berkshire Hathaway
Inc. in the previous 12 months.
Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by Berkshire Hathaway Inc. or one of its
affiliates.
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from Berkshire Hathaway Inc. in the past 12
months.
Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from Berkshire
Hathaway Inc. within the next 3 months.
Barclays Bank PLC and/or an affiliate trades regularly in the shares of Berkshire Hathaway Inc..
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from Berkshire Hathaway Inc. within the past
12 months.
Berkshire Hathaway Inc. is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate.
Berkshire Hathaway Inc. is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays Bank
PLC and/or an affiliate.
Barclays Bank PLC is associated with specialist firm Barclays Capital Market Makers, which makes a market in Berkshire Hathaway Inc. stock. At
any given time, the associated specialist may have "long" or "short" inventory position in the stock; and the associated specialist may be on the
opposite side of orders executed on the Floor of the Exchange in the stock.
Valuation Methodology: We determine our price target for Berkshire Hathaway of $132,000 primarily by applying a price-to-book multiple of
1.3x (versus a historical average since 2000 of 1.59x) to our YE 2011 book value estimate of around $105,000. As a point of reference, our price
target valuation implies a price-to-tangible book multiple of 1.80x, versus a historical average since 2000 of 2.30x.
Risks which May Impede the Achievement of the Price Target: There are several risks that could impede the achievement of our price target for
Berkshire Hathaway including managment succession, large and concentrated stock investments, derivative losses, earnings volatility,
catastrophe losses, M&A risk and regulatory risk.

25 October 2010 12
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