Berkshire Hathaway Inc

Matt pauls
PO Box 523714, 6200 Rolling Road

Springfield, Virginia 22152
Berkshire Hathaway Inc. matt@mattpauls.com
(703) 659-9391
(BRK-A) Matt Pauls
Class A $ 119,135
Market Capitalization 196,324,000,000
Reasonably Valued 217,000,000,000 April 19, 2010
Last year I discussed Berkshire Hathaways valuation at

length. Lets continue the tradition with an update.
April 2009 (LAST YEAR) April 2010 (CURRENT)
Last year Berkshire Hathaway sold for At the time of this writing, Berkshire
what I believed was a clearly Hathaway sells for $200,000,000,000.
undervalued, $135.9 billion. My Though Mr. Market was way off last year,
assessment at that time was that Berkshire currently sells right around
Berkshire Hathaway was worth, at where it should.
minimum, $160 billion, but could
reasonably command $172 billion.
April 2009 market value:

$135,946,000,000!
! Current Business
April 2009 estimated business value (Intrinsic) Value Estimate
range:!
$217,000,000,000
$160,000,000,000 - $172,000,000,000
! ! ! ! to
$230,000,000,000
Last 119,135 52 Week High 125,252
Change 735 52 Week Low 83,957
% Change 0.621 1 Year Total Return(%) 33.03
Open 116,410 3 Years Total Return(%) 8.23
High 119,357
Low 116,410 Common Primary Shares (mil) 1
Volume 588 Market Cap Consolidated (mil) 194,791
Currency USD 217,000

Valuation Range (mil) to
230,000
PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com
! BERKSHIRE HATHAWAY, INC.
Matt Pauls
CONTENTS
Major Shareholders....................................................... 1
Debt Maturity Profile.................................................... 1
Major Subsidiaries......................................................... 2
Berkshire Hathaway, Inc. Tearsheet............................... 3
Annual Financials Statements........................................ 4

Balance Sheet 4
Statement of Income 5
Statement of Cash Flows 6
Annual Financial Ratios 7
Limitations of Consolidated Financial Statements 8
Overview........................................................................ 9
Derivatives in More Detail 10
Itemized Derivatives Contracts 11
Operating Units.............................................................. 12
Insurance 13
Total Investments 14
Other Investments 15
Float 18
Equities 19
Value of Insurance Operations 20
Non-Insurance Business 21
Burlington Northern Santa Fe........................................ 22

BNSF Tear Sheet 23
BNSF Merger 24
Berkshire Hathaway Inc., Business Value....................... 26

Matt Pauls
Major
shareholders
Major
All Shareholders
Shareholders - Berkshire Hathaway Inc:
Investor Name Current Position % OS Pos Change % Change Val($MM) Val Chg($MM) Style Equity Assets($MM) Turnover City Country Position Date Source
1 Buffett (Warren) 350,000 33.98 0 0.00 41,930.00 0.00 47,940.80 Low Omaha United States 28-Feb-2010 Proxy
2 Fidelity Management & Research 25,305 2.46 -154 -0.60 2,510.26 -15.28 GARP 554,917.46 Low Boston United States 31-Dec-2009 13F
3 Capital World Investors 25,200 2.45 -340 -1.33 2,499.84 -33.73 Core Value 351,320.13 Low Los Angeles United States 31-Dec-2009 13F
4 Davis Selected Advisers, L.P. 22,905 2.22 -88 -0.38 2,272.18 -8.73 GARP 68,889.74 Low New York United States 31-Dec-2009 13F
5 Gottesman (David S) 19,044 1.85 -166 -0.86 2,281.47 -19.89 2,490.16 Low 28-Feb-2010 Proxy
6 Ruane, Cunniff & Goldfarb, Inc. 18,616 1.81 -12 -0.06 1,846.71 -1.19 GARP 8,981.01 Low New York United States 31-Dec-2009 13F
7 First Manhattan Company 15,795 1.53 -155 -0.97 1,566.86 -15.38 Deep Value 9,708.16 Low New York United States 31-Dec-2009 13F
8 BlackRock Institutional Trust Company, N.A. 15,423 1.50 1,534 11.04 1,529.96 152.17 Index 713,263.55 Low San Francisco United States 31-Dec-2009 13F
9 Munger (Charles T) 13,057 1.27 -124 -0.94 1,564.23 -14.86 1,576.86 Low United States 28-Feb-2010 Proxy
10 Capital Research Global Investors 7,054 0.68 -800 -10.19 699.76 -79.36 Core Value 376,278.34 Low Los Angeles United States 31-Dec-2009 13F
11 Norges Bank 5,804 0.56 2,118 57.46 560.67 204.60 Core Value 169,918.64 Low Oslo Norway 31-Dec-2008 13F
12 Southeastern Asset Management, Inc. 5,801 0.56 0 0.00 575.46 0.00 Deep Value 29,902.43 Low Memphis United States 31-Dec-2009 13F
13 First Eagle Investment Management LLC 5,159 0.50 0 0.00 511.77 0.00 GARP 29,038.52 Low New York United States 31-Dec-2009 13F
14 Cascade Investment, L.L.C. 4,350 0.42 0 0.00 537.02 0.00 Specialty 14,856.29 Low Kirkland United States 01-Mar-2010 13D
15 Fairholme Capital Management, L.L.C. 3,925 0.38 1,711 77.28 389.36 169.73 GARP 10,405.06 Moderate Miami United States 31-Dec-2009 13F
16 Franklin Mutual Advisers, LLC 3,717 0.36 -290 -7.24 368.73 -28.77 Deep Value 40,778.35 Low Short Hills United States 31-Dec-2009 13F
17 Gardner Russo & Gardner 3,292 0.32 128 4.05 326.57 12.70 GARP 1,968.14 Low Lancaster United States 31-Dec-2009 13F
18 California Public Employees' Retirement System 3,156 0.31 -188 -5.62 313.08 -18.65 Index 36,791.59 Low Sacramento United States 31-Dec-2009 13F
19 Legal & General Investment Management Ltd. (UK) 3,091 0.30 -52 -1.65 306.63 -5.16 Index 150,817.42 Low London United Kingdom 31-Dec-2009 13F
20 State Street Global Advisors (US) 3,019 0.29 420 16.16 299.48 41.66 Index 494,949.99 Low Boston United States 31-Dec-2009 13F
21 Geode Capital Management, L.L.C. 2,538 0.25 -8 -0.31 251.77 -0.79 Index 65,254.70 Low Boston United States 31-Dec-2009 13F
22 PNC Wealth Management 2,460 0.24 -6 -0.24 244.03 -0.60 Core Growth 40,043.89 Low Philadelphia United States 31-Dec-2009 13F
23 BNY Mellon Asset Management 2,188 0.21 346 18.78 217.05 34.32 Income Value 72,030.15 Low New York United States 31-Dec-2009 13F
24 Columbia Management Advisors, LLC 2,090 0.20 383 22.44 207.33 37.99 GARP 115,404.12 Low Boston United States 31-Dec-2009 13F
25 Water Street Capital, Inc. 2,072 0.20 79 3.96 205.54 7.84 Hedge Fund 2,090.26 Moderate Jacksonville United States 31-Dec-2009 13F
26 ClearBridge Advisors 1,904 0.18 -137 -6.71 188.88 -13.59 GARP 52,903.84 Low New York United States 31-Dec-2009 13F
27 Vanguard Group, Inc. 1,620 0.16 21 1.31 201.01 2.61 Index 533,842.59 Low Malvern United States 31-Dec-2009 13F
28 Everett Harris & Co. 1,443 0.14 -25 -1.70 143.15 -2.48 Growth 1,282.48 Low Los Angeles United States 31-Dec-2009 13F
29 Boulder Investment Advisers, LLC 1,410 0.14 0 0.00 139.87 0.00 GARP 452.83 Low Boulder United States 31-Dec-2009 13F
30 Buffett (Howard G) 1,406 0.14 0 0.00 168.44 0.00 236.40 Low 28-Feb-2010 Proxy
31 Hikari Tsushin Inc 1,312 0.13 0 0.00 130.15 0.00 599.56 Low Toshima-ku (Tokyo) Japan 31-Dec-2009 13F
32 Murphy (Thomas S) 1,310 0.13 173 15.22 156.94 20.73 157.87 Low 28-Feb-2010 Proxy
33 Invesco Aim Management Group, Inc. 1,305 0.13 -11 -0.84 129.46 -1.09 GARP 44,078.44 Low Houston United States 31-Dec-2009 13F
34 BlackRock Advisors (UK) Limited 1,244 0.12 -263 -17.45 123.40 -26.09 Index 177,849.47 Low London United Kingdom 31-Dec-2009 13F
35 I. G. Investment Management, Ltd. 1,239 0.12 0 0.00 122.91 0.00 GARP 29,314.15 Low Winnipeg Canada 31-Dec-2009 13F
36 Deutsche Asset Management Americas 1,231 0.12 930 308.97 122.12 92.26 Core Growth 42,305.45 Moderate New York United States 31-Dec-2009 13F
37 Clifford Swan Investment Counsel, LLC 1,216 0.12 1,188 4,242.86 120.63 117.85 Core Growth 1,010.34 Low Pasadena United States 31-Dec-2009 13F
38 BNY Mellon Wealth Management 1,131 0.11 -737 -39.45 112.20 -73.11 Core Growth 25,133.59 Low New York United States 31-Dec-2009 13F
39 Wells Fargo Bank, N.A. 1,111 0.11 -29 -2.54 110.21 -2.88 Core Value 23,323.05 Low San Francisco United States 31-Dec-2009 13F
40 Sound Shore Management, Inc. 1,085 0.11 2 0.18 107.63 0.20 Deep Value 6,419.83 Moderate Greenwich United States 31-Dec-2009 13F
41 CPP Investment Board 995 0.10 -60 -5.69 98.70 -5.95 Core Value 29,858.67 Moderate Toronto Canada 31-Dec-2009 13F
42 Public Employees' Retirement Association of CO 990 0.10 0 0.00 98.21 0.00 Index 13,629.71 Low Denver United States 31-Dec-2009 13F
43 QVT Financial LP 981 0.10 981 100.00 97.32 97.32 Hedge Fund 1,632.19 Moderate New York United States 31-Dec-2009 13F
44 Brown Brothers Harriman & Company 974 0.09 106 12.21 96.62 10.52 Core Growth 7,315.28 Low New York United States 31-Dec-2009 13F
45 Capital Guardian Trust Company 911 0.09 -386 -29.76 90.37 -38.29 GARP 39,266.05 Low Los Angeles United States 31-Dec-2009 13F
46 Markel-Gayner Asset Management Corp. 897 0.09 -1 -0.11 88.98 -0.10 Core Value 1,456.76 Low Glen Allen United States 31-Dec-2009 13F
47 Tyrus Capital LLP 880 0.09 880 100.00 87.30 87.30 Hedge Fund 549.69 Low London United Kingdom 31-Dec-2009 13F
48 Baldwin Investment Management, LLC 845 0.08 -8 -0.94 83.82 -0.79 Growth 143.57 Low West Conshohocken United States 31-Dec-2009 13F
49 Obermeyer Asset Management Co. 800 0.08 792 9,900.00 79.36 78.57 Income Value 388.26 Low Aspen United States 31-Dec-2009 13F
50 Maverick Capital, Ltd. 769 0.07 -450 -36.92 76.28 -44.64 GARP 9,015.89 High Dallas United States 31-Dec-2009 13F
51 Horizon Asset Management, Inc. 755 0.07 -48 -5.98 74.90 -4.76 Core Growth 8,933.83 Low New York United States 31-Dec-2009 13F
52 T. Rowe Price Associates, Inc. 726 0.07 10 1.40 72.02 0.99 GARP 249,165.81 Low Baltimore United States 31-Dec-2009 13F
53 FAF Advisors, Inc. 698 0.07 -1,553 -68.99 69.24 -154.06 Core Value 28,714.87 Low Minneapolis United States 31-Dec-2009 13F
54 Van Kampen Asset Management 685 0.07 0 0.00 67.95 0.00 Core Value 46,472.93 Low Houston United States 31-Dec-2009 13F
55 Fayez Sarofim & Co. 682 0.07 -48 -6.58 67.65 -4.76 Core Growth 18,892.93 Low Houston United States 31-Dec-2009 13F
56 Eaton Vance Management 671 0.07 0 0.00 66.56 0.00 Core Growth 53,652.85 Low Boston United States 31-Dec-2009 13F
Debt
57
58
International Value Advisers, LLC
American Century Investment Management, Inc.
667 0.06
641 0.06
161
-36
31.82
-5.32
66.17
63.59
15.97 Core Value
-3.57 Core Growth
2,410.80 High New York
47,816.58 Moderate Kansas City
United States
United States
31-Dec-2009 13F
31-Dec-2009 13F
maturity profile
59
60
61
Henry H. Armstrong Associates, Inc.
Northern Trust Global Investments
Wilmington Trust FSB
629 0.06
582 0.06
563 0.05
-5
-16
-88
-0.79
-2.68
-13.52
62.40
57.73
55.85
-0.50 Growth
-1.59 Core Growth
-8.73 Core Value
309.74 Low
50,802.72 Low
1,696.35 Low
Pittsburgh
Chicago
North Palm Beach
United States
United States
United States
31-Dec-2009 13F
31-Dec-2009 13F
31-Dec-2009 13F
62 Deutsche Investment Management Americas, Inc. 6.8@%=A(B=, 554 0.05
D%0;D78%>;=, 39 7.57 54.96 3.87 Core Value
=B8(:78=, 25,138.64
>7,7@7>(8%>,.9, >;@7=78A!, Moderate New York
E;=0786%@(, United States
A7=78;@,87, 31-Dec-2009 13F
6789/:%87, =B8(:78=, 7=78A!,:B@0%=A/, D%0;D78%>;=, /;@(B=,/7;, 7@7>(8%>, C.=0%=A, >;2%(;@,(8./(, DB8(A;A7,F, C.=0%=A,
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PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 1

Matt Pauls
Major subsidiaries
!"#$%&"'()*)+,-(% Utilities & Energy
MidAmerican Energy:
MidAmerican
!"#$%&"'( Energy Company
! !!!"#$%&'#(!)'*+,'%$- InterCoast Capital Company
! !!!.&(/,0%#!)'1/2#'3+!.&4 Midwest Capital Group
! !!!56).7 PacifiCorp:
! !!!5+'8+ PacifiCorp Energy
! !!!"#$%&'#(!9%2+!#'*!:#2%'+!)'1/2#'3+!.&4 Pacific Power
! !!!;+2<1=%2+!>#$=#?#-!@11/2#'3+!.&4 Rocky Mountain Power
GEICO Underwriting private passenger automobile insurance mainly by direct CE Electric UK:
response methods Northern Electric Distribution
+,-(% Integrated Utility Services
General Re Underwriting excess-of-loss, quota-share and facultative reinsurance
worldwide
:#'/A#3$/2%'B Yorkshire Electricity Distribution
! @3,+!;/%(*%'B!;2#'*1 CalEnergy Gas (U.K.) Ltd.
Berkshire Hathaway Reinsurance Underwriting excess-of-loss and quota-share reinsurance for property and ! ;+'C#,%'!:&&2+ CalEnergy Generation:
Group casualty insurers and reinsurers CE Generation LLC (50 percent interest)
! >4>4!;2&?'!D=&+!52&/E
Berkshire Hathaway Primary Group Underwriting multiple lines of property and casualty insurance policies for ! .F; CE International Investments, Inc.
primarily commercial accounts ! 9+3==+%,+2!;2&$=+21 CE Electric (NY) Inc.
CalEnergy Pacific Holding Corp.
BH Finance, Clayton Homes, XTRA, Proprietary investing, manufactured housing and related consumer financing, ! 9&2+1$!8%G+2
HomeServices of America, Inc.:
CORT and other financial services transportation equipment leasing, furniture leasing, life annuities and risk ! 92/%$!&A!$=+!H&&, Carol Jones REALTORS
(Finance and financial products) management products ! 5#2#'I!):. CBSHOME Real Estate
Marmon An association of approximately 130 manufacturing and service businesses ! J&='1!:#'G%((+ Champion Realty, Inc.
that operate within 11 diverse business sectors ! J/1$%'!;2#'*1 Edina Realty Home Services
! H#21&'KJ/=( EWM REALTORS
McLane Company Wholesale distribution of groceries and non-food items
! :#2,&' Harry Norman REALTORS
MidAmerican Regulated electric and gas utility, including power generation and distribution ! :%F+< HOME Real Estate
activities in the U.S. and internationally; domestic real estate brokerage Huff Realty
! 8%3=(%'+
Iowa Realty
Shaw Industries Manufacturing and distribution of carpet and floor coverings under a variety ! D3&$$!9+$L+2 Long Realty Company
of brand names ! D=#?!)'*/1$2%+1 Prudential California Realty
D+2G%3+ Prudential Carolinas Realty
! ;/AA#(&!"+?1 Prudential First Realty
Other Segments Prudential York Simpson Underwood Realty
! ;/1%'+11!M%2+
Manufacturing Acme Building Brands, Benjamin Moore, H.H. Brown Shoe Group, CTB, ! 9(%B=$D#A+$- RealtySouth
Fechheimer Brothers, Forest River, Fruit of the Loom, Garan, IMC, Johns ! )'$+2'#$%&'#(!N#%2-!O/++' Rector-Hayden REALTORS
Manville, Justin Brands, Larson- Juhl, MiTek, Richline and Scott Fetzer Reece & Nichols
! :3H#'+!.&,E#'-
Roberts Brothers, Inc.
Service Buffalo News, Business Wire, FlightSafety, International Dairy Queen, ! P#,E+2+*!.=+A Semonin REALTORS
Pampered Chef, NetJets and TTI ! "+$J+$1 Woods Bros. Realty
Retailing Ben Bridge Jeweler, Borsheims, Helzberg Diamond Shops, Jordans Furni- ! !FF)
ture, Nebraska Furniture Mart, Sees Candies, Star Furniture and R.C. Willey 8+$#%( Finance & Financial Products
! ;+'!;2%*B+!J+?+(+2 BH Finance
! ;&21=+%,1I!>+(L0+2B!N%#,&'*! Clayton Homes
D=&E1 XTRA
CORT
! .78F
! J&2*#'Q1!9/2'%$/2+
! "+02#1<#!9/2'%$/2+!:#2$
! D++Q1!.#'*%+1
! D$#2!9/2'%$/2+
! 84.4!M%((+-
2

Matt Pauls
BERKSHIRE HATHAWAY TEARSHEET

Ticker/Key: Recent Price P/E Ratio Div. Yld. (%) Total Return 1 Yr. (%)
BERKSHIRE HATHAWAY INC. 121050.000 23.31 0.00
BRK'A 40.48
SEDOL: 2093666 Shares Out.(mil): 2 YTD High 140710.500 27.10 Ind. Ann. Div. Total Return 5 Yr. (%)
Exchange: NYSE Market Value(mil): 199,329 YTD Low 97205.000 18.72 0.00 40%
Key Ratios FYE: 12/31/09

$160,000
48-Month Price Evolution
Oper Margin 14.46 Curr Ratio 2.28 $140,000
Net Margin 7.19 Debt/Equity 0.25
ROE 6.14 Int Coverage 6.80 $120,000
ROA 2.71 CF/Share 9190.46

$100,000
Currency: USD
PER SHARE OVERVIEW $80,000
Date Earnings Dividend Sales/Shr.
$60,000
Q4Y2009 5193.00 0.00 19460.62
Q3Y2009 3299.00 0.00 19271.16 $40,000
Q2Y2009 1893.00 0.00 20579.36
$20,000
Q1Y2009 1628.00 0.00 14682.79
Q4Y2008 3224.00 0.00 15847.92 $0
Q3Y2008 5052.00 0.00 17996.47 Apr2006 Aug2006 Dec2006 Apr2007 Aug2007 Dec2007 Apr2008 Aug2008 Dec2008 Apr2009 Aug2009 Dec2009
Q2Y2008 7312.00 0.00 19392.96
Q1Y2008 7472.00 0.00 16223.63
INCOME STATEMENT (Millions) Y2009 Y2008 Y2007 Y2006 QUARTERLY REVENUE YEAR OVER YEAR*
Net Sales 112,024 107,786 118,245 98,539 Y2008 Y2009
Cost of Goods Sold 84,584 83,866 83,175 68,665 35000
Selling and Admin Expenses 8,117 8,052 7,098 5,932 30000
Amortization & Depreciation 3,127 2,810 2,407 2,066 25000
Operating Income 16,196 13,058 25,565 21,876 20000
Interest Expense 1,992 1,963 1,910 1,724 15000
Pretax Income 11,552 7,574 20,161 16,778 10000
5000
Income Taxes 3,538 1,978 6,594 5,505
0
Net Income before Extraordinary Items/Pref Div 8,055 4,994 13,213 11,015
Net Income 8,055 4,994 13,213 11,015 -3Q -2Q -1Q 0Q
BALANCE SHEET (Millions) Y2009 Y2008 Y2007 Y2006 FIVE YR SALES TO NET INCOME
ASSETS
Cash & Short-Term Investments 31,012 26,071 45,425 44,851 Net Income* Sales*
Receivables - Total 28,781 28,867 25,698 24,379
Inventories - Total 6,147 7,500 5,793 5,257 14000 140000
Total Current Assets 65,940 62,438 76,916 74,487 12000 120000
Net Property, Plant, and Equipment 46,656 45,157 36,190 33,342 10000 100000
Total Assets 297,119 267,399 273,342 248,437 8000 80000
LIABILITIES AND STOCKHOLDERS' EQUITY 6000 60000
4000 40000
Accounts Payable 23,207 19,974 18,881 19,711
2000 20000
Debt In Current Liabilities 4,637 3,924 7,302 5,155 0 0
Total Current Liabilities 28,955 25,591 26,948 25,944
Y2005 Y2006 Y2007 Y2008 Y2009
Long-Term Debt - Total 33,272 32,958 26,524 27,450
Total Liabilities 161,334 153,820 149,941 137,756
Minority Interests 4,683 4,312 2,668 2,262 FIVE YEAR SUMMARY DATA
Preferred Stock 0 0 0 0 Year Sales* Net Income* EPS
Common Stock 8 8 8 8 Y2005 81,663 8,528 5,538
Retained Earnings 86,227 78,172 72,153 58,912 Y2006 98,539 11,015 7,144
Capital Surplus 27,074 27,133 26,952 26,522 Y2007 118,245 13,213 8,548
Treasury Stock 0 0 0 0 Y2008 107,786 4,994 3,224
Total Common Equity 131,102 109,267 120,733 108,419 Y2009 112,024 8,055 5,193
CASH FLOW SUMMARY (Millions) Y2009 Y2008 Y2007 Y2006
Net Cash Provided by Operations 15,846 11,252 12,550 10,195 Growth Rate 8.22% -1.42% -1.60%
Net Cash Provided by Investments 11,161 32,066 13,428 14,077
Net Cash Provided by Financing 233 2,286 1,366 2,607 * Millions
COMPANY DESCRIPTION PRIMARY SIC CODE: 6331 KEY FINANCIAL ITEMS IN US$ (Millions)
Y2009 Y2008 Y2007 Y2006
Market Cap. 153,934 149,655 219,153 169,676
Total Assets 297,119 267,399 273,342 248,437
Sales 112,024 107,786 118,245 98,539
Berkshire Hathaway Inc.. The Group's principal activities are to provide insurance and reinsurance of property also casualty risks Inc. Bef. Pref. 8,055 4,994 13,213 11,015
and reinsure life, accident and health risks world-wide. The Group also manufactures and distributes variety of clothing and EXECUTIVE OFFICERS
footwear. It also manufactures and distributes clay brick, concrete blocks and cut limestone. It produces water and solvent- Chairman & Chief Executive Warren E. Buffett
thinnable general purpose architectural coatings; fiber glass wool insulation products for walls and floors, pipe, duct and equipment Senior Vice President & Chief Financial Marc D. Hamburg
insulation products; nonwoven mats, fabrics, and fibres' used as reinforcements in building and industrial applications and roofing Officer Forrest N. Krutter
systems and components. The Group also provides rental furniture and accessories and wholesale distribution and logistics Secretary
services. On 18-Mar-2008 the Group acquired 60% of Marmon Holdings Inc and in Apr-2008 an additional 4.4% interest in
Marmon.
ADDRESS
3555 Farnam Street Tel +1 402 346-1400
City: State Zip
Omaha NEBRASKA 68131
DATA SOURCE: THOMSON FINANCIAL

Matt Pauls
ANNUAL FINANCIALS
5 YR ANNUAL BALANCE SHEET

ASSETS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Cash And ST Investments 31,012.00 26,071.00 45,425.00 44,851.00 45,461.00

Receivables (Net) 28,781.00 28,867.00 25,698.00 24,379.00 23,484.00
Total Inventories 6,147.00 7,500.00 5,793.00 5,257.00 4,143.00
Other Current Assets - - - - -
Current Assets - Total 65,940.00 62,438.00 76,916.00 74,487.00 73,088.00
Other Assets 58,230.00 57,564.00 53,666.00 49,858.00 35,033.00
Total Assets 297,119.00 267,399.00 273,342.00 248,437.00 198,325.00
LIABILITIES & SHAREHOLDERS' EQUITY 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Accounts Payable 23,207.00 19,974.00 18,881.00 19,711.00 8,699.00

ST Debt & Current Portion of LT Debt 4,637.00 3,924.00 7,302.00 5,155.00 3,088.00
Income Taxes Payable 530.00 964.00 - 189.00 258.00
Other Current Liabilities 581.00 729.00 765.00 889.00 -
Current Liabilities - Total 28,955.00 25,591.00 26,948.00 25,944.00 12,045.00
Long Term Debt 33,272.00 32,958.00 26,524.00 27,450.00 12,523.00
Other Liabilities 80,412.00 85,955.00 77,462.00 66,091.00 69,463.00
Total Liabilities 161,334.00 153,820.00 149,941.00 137,756.00 106,025.00
Shareholders' Equity
Minority Interest 4,683.00 4,312.00 2,668.00 2,262.00 816.00
Preferred Stock - - - - -
Common Equity 131,102.00 109,267.00 120,733.00 108,419.00 91,484.00
Retained Earnings 86,227.00 78,172.00 72,153.00 58,912.00 47,717.00
Total Liabilities & Shareholders' Equity 297,119.00 267,399.00 273,342.00 248,437.00 198,325.00
Rate Used to Translate From USD to USD 1.00 1.00 1.00 1.00 1.00
BALANCE SHEET YR OVER YR % CHANGE 12/31/09 12/31/08 12/31/07 12/31/06
Total Current Assets 5.61% -18.82% 3.26% 1.91%

Total Assets 11.11% -2.17% 10.02% 25.27%
Total Current Liabilities 13.15% -5.04% 3.87% 115.39%
Total Long Term Debt 0.95% 24.26% -3.37% 119.20%
Total Liabilities 4.88% 2.59% 8.85% 29.93%
Total Shareholders' Equity 19.98% -9.50% 11.36% 18.51%
Total Liabilities & Shareholders' Equity 11.11% -2.17% 10.02% 25.27%

Matt Pauls
ANNUAL FINANCIALS
5 YR INCOME STATEMENT 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Net Sales or Revenues 112,024.00 107,786.00 118,245.00 98,539.00 81,663.00

Cost of Goods Sold 84,584.00 83,866.00 83,175.00 68,665.00 59,250.00
Depreciation, Depletion & Amortization 3,127.00 2,810.00 2,407.00 2,066.00 982.00
Gross Income 24,313.00 21,110.00 32,663.00 27,808.00 21,431.00
Selling, General & Admin Expenses 8,117.00 8,052.00 7,098.00 5,932.00 5,328.00
Operating Expenses - Total 95,828.00 94,728.00 92,680.00 76,663.00 65,560.00
Operating Income 16,196.00 13,058.00 25,565.00 21,876.00 16,103.00
Non-Operating Interest Income - - - - -
Earnings Before Interest And Taxes (EBIT) 13,544.00 9,537.00 22,071.00 18,502.00 12,991.00
Interest Expense On Debt 1,992.00 1,963.00 1,910.00 1,724.00 723.00
Pretax Income 11,552.00 7,574.00 20,161.00 16,778.00 12,268.00
IncomeTaxes 3,538.00 1,978.00 6,594.00 5,505.00 4,159.00
Minority Interest 386.00 602.00 354.00 258.00 104.00
Equity In Earnings 427.00 - - - 523.00
Net Income Before Extra Items/Preferred Div 8,055.00 4,994.00 13,213.00 11,015.00 8,528.00
Extr Items & Gain(Loss) Sale of Assets - - - - -
Net Income Before Preferred Dividends 8055 4994 13213 11015 8528
Preferred Dividend Requirements - - - - -
Net Income Available to Common 8,055.00 4,994.00 13,213.00 11,015.00 8,528.00
COMMON SIZE INCOME STATEMENT 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Cost of Goods Sold 75.51% 77.81% 70.34% 69.68% 72.55%

Selling, General & Admin Expenses 7.25% 7.47% 6.00% 6.02% 6.52%
Depreciation, Depletion & Amortization 2.79% 2.61% 2.04% 2.10% 1.20%
Operating Profit 14.46% 12.11% 21.62% 22.20% 19.72%
Earnings Before Interest And Taxes (EBIT) 12.09% 8.85% 18.67% 18.78% 15.91%
Interest Expense On Debt 1.78% 1.82% 1.62% 1.75% 0.89%
Pretax Earnings 10.31% 7.03% 17.05% 17.03% 15.02%
IncomeTaxes 3.16% 1.84% 5.58% 5.59% 5.09%
Minority Interest 0.34% 0.56% 0.30% 0.26% 0.13%
Net Income Before Extra Items/Preferred Div 7.19% 4.63% 11.17% 11.18% 10.44%
Extr Items & Gain(Loss) Sale of Assets 0.00% 0.00% - 0.00% 0.00%
Net Income Before Preferred Dividends 7.19% 4.63% 11.17% 11.18% 10.44%
Preferred Dividend Requirements 0.00% 0.00% - 0.00% 0.00%
INCOME STMENT YR OVER YR % CHANGE 12/31/09 12/31/08 12/31/07 12/31/06
Sales 3.93% -8.85% 20.00% 20.67%

Cost of Goods Sold 0.86% 0.83% 21.13% 15.89%
Depreciation, Depletion & Amortn. 11.28% 16.74% 16.51% 110.39%
Gross Income 15.17% -35.37% 17.46% 29.76%
Selling, General & Admin Expenses 0.81% 13.44% 19.66% 11.34%
Total Operating Expenses 1.16% 2.21% 20.89% 16.94%
Operating Income 24.03% -48.92% 16.86% 35.85%
Pretax Equity Interest Earnings - - - -100.00%
Earnings Bef Interest & Taxes 42.02% -56.79% 19.29% 42.42%
Interest Expense on Debt 1.48% 2.77% 10.79% 138.45%
Pretax Income 52.52% -62.43% 20.16% 36.76%
Income Taxes 78.87% -70.00% 19.78% 32.36%
Minority Interest -35.88% 70.06% 37.21% 148.08%
Equity Interest Earnings - - - -100.00%
Net Income Bef Extordry Items & Disc Ops 61.29% -62.20% 19.95% 29.16%
Preferred Dividends - - - -
Extordry Items & Gain(Loss) Sale of Asst - - - -
Net Income Bef Preferred Dividends 61.29% -62.20% 19.95% 29.16%
Preferred Dividend Requirements - - - -
Net Income Available To Common 61.29% -62.20% 19.95% 29.16%

Matt Pauls
ANNUAL FINANCIALS
5 YEAR ANNUAL CASH FLOW STATEMENT 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Operating Activities
Income Bef Extraordinary Items 8,055.00 4,994.00 13,213.00 11,015.00 8,528.00
Depreciation, Depletion & Amortn 3,127.00 2,810.00 2,407.00 2,066.00 982.00
Deferred Taxes - - - - -
Other Cash Flow 3,074.00 -6.00 -5,244.00 -1,811.00 -6,196.00
Funds From Operations 14,256.00 7,798.00 10,376.00 11,270.00 3,314.00
Extraordinary Items - - - - -
Funds From/For Other Oper Activs 1,590.00 3,454.00 2,174.00 -1,075.00 6,132.00
Net Cash Flow From Operating Activities 15,846.00 11,252.00 12,550.00 10,195.00 9,446.00
Investing Activities
Capital Expenditures 4,937.00 6,138.00 5,373.00 4,571.00 2,195.00
Net Assets From Acquisitions 108.00 6,050.00 1,602.00 10,132.00 2,387.00
Decrease In Investments 15,198.00 40,186.00 25,033.00 15,909.00 12,014.00
Disposal of Fixed Assets - - - - -
Other Use/(Source) - Investing 2,830.00 3,035.00 3,035.00 2,367.00 4,659.00
Net Cash Flow From Investing Activities 11,161.00 32,066.00 13,428.00 14,077.00 13,841.00
Financing Activities
Com/Prf Purchased,Retired,Converted,Redeemed - - - - -
Long Term Borrowings 3,114.00 7,476.00 4,812.00 3,912.00 6,149.00
Inc(Dec) In ST Borrowings -885.00 1,183.00 -596.00 245.00 361.00
Reduction In Long Term Debt 1,586.00 6,241.00 3,237.00 1,751.00 947.00
Cash Dividends Paid - Total - - - - -
Other Source/(Use) - Financing 410.00 132.00 387.00 201.00 65.00
Net Cash Flow From Financing Activities 233.00 2,286.00 1,366.00 2,607.00 5,628.00
Exchange Rate Effect 101.00 -262.00 98.00 - -

Cash & Cash Equivalents - Inc(Dec) 5,019.00 -18,790.00 586.00 -1,275.00 1,233.00
Com/Pfd Purchased,Retired,Converted,Redeemed - - - - -
Long Term Borrowings 3,114.00 7,476.00 4,812.00 3,912.00 6,149.00
Inc./Dec. In S.T. Borrowings -885.00 1,183.00 -596.00 245.00 361.00
Reduction In L.T. Debt 1,586.00 6,241.00 3,237.00 1,751.00 947.00
Cash Dividends Paid - Total - - - - -
Other Source/(Use) - Financing 410.00 132.00 387.00 201.00 65.00
Net Cash Flow - Financing Activities 233.00 2,286.00 1,366.00 2,607.00 5,628.00
Exchange Rate Effect 101.00 -262.00 98.00 - -
Cash & Cash Equivalents - IncDec 5,019.00 -18,790.00 586.00 -1,275.00 1,233.00

Matt Pauls
ANNUAL FINANCIAL RATIOS
PROFITABILITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Return On Equity 6.69 4.34 11.53 11.02 9.61

Reinvestment Rate 6.69 4.34 11.53 11.02 9.61
Return On Assets 3.31 2.32 5.54 5.43 4.65
Return On Invested Capital 5.77 4.08 9.62 9.66 8.60
Cash Flow To Sales 12.73 7.23 8.78 11.44 4.06
Net Margin 7.19 4.63 11.17 11.18 10.44
ASSET UTILIZATION RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Assets Per Employee 1,338,373.87 1,086,987.80 1,173,141.63 1,144,870.97 1,032,942.71

Asset Turnover 0.38 0.40 0.43 0.40 0.41
Capital Expend Pct Total Assets 1.85 2.25 2.16 2.30 1.16
Capital Expend Pct Sales 4.41 5.69 4.54 4.64 2.69
LEVERAGE RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Total Debt Pct Common Equity 28.92 33.75 28.02 30.07 17.06
LT Debt Pct Common Equity 25.38 30.16 21.97 25.32 13.69
LT Debt Pct Total Capital 19.68 22.49 17.69 19.87 11.95
Equity Pct Total Capital 77.55 74.57 80.53 78.49 87.27
Total Debt Pct Total Assets 12.76 13.79 12.37 13.12 7.87
Common Equity Pct Total Assets 44.12 40.86 44.17 43.64 46.13
Total Capital Pct Total Assets 56.90 54.80 54.85 55.60 52.85
Dividend Payout - - - - -
Cash Dividend Coverage Ratio - - - - -
Working Cap Pct Total Capital 21.88 25.15 33.33 35.14 58.23
LIQUIDITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Quick Ratio 2.07 2.15 2.64 2.67 5.72

Current Ratio 2.28 2.44 2.85 2.87 6.07
Cash And Equiv Pct Curr Assets 47.03 41.76 59.06 60.21 62.20
Receivables Pct Current Assets 43.65 46.23 33.41 32.73 32.13
Inventories Days Held 29.45 28.93 24.25 24.98 24.60
GROWTH RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05
Sales 1Yr Growth 3.93 -8.85 20.00 20.67 9.79

Sales5 Yr Growth 8.53 10.97 23.02 21.31 19.24
Operating Income 1Yr Growth 24.03 -48.92 16.86 35.85 15.05
Operating Income 5Yr Growth 2.96 -1.81 29.61 41.09 22.47
Net Income 1Yr Growth 61.29 -62.20 19.95 29.16 16.69
Net Income 5Yr Growth 1.97 -9.33 25.25 69.17 20.71
Net Margin 1Yr Growth 55.19 -58.54 -0.04 7.04 6.29
Net Margin 5Yr Growth -6.05 -18.30 1.82 39.45 1.23
EPS 1Yr Growth 61.07 -62.28 19.65 29.00 16.52
EPS5Yr Growth 1.79 -9.49 25.05 68.82 20.44
Equity 1Yr Growth 19.98 -9.50 11.36 18.51 6.50
Equity 5Yr Growth 8.82 7.09 13.52 13.35 8.19

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equally bad. An investor could easily look at berkshires numbers and

be confused in two very different respects. Both
Berkshires consolidated presentation is not altogether reported earnings and equity are significantly
useless. Over time, the annual compounded rate of misrepresented and have been for several years. For
return of either equity or book value will provide a 2009, Berkshire Hathaway reported earnings of $8
rough benchmark with which investors may use to billion, however more accurately earned roughly $5.7
measure changes in the value of their respective billion, a difference of about $2.3 billion.
holdings. To arrive at any reasonable estimate of
$ in millions
As reported: 2009 2008 2007 2006
Earnings $ 8,055 $ 4,994 $ 13,213 $ 11,015
Net worth 131,102 109,267 120,733 108,419
Derivative liabilities 9,269 14,612 6,887 3,883
Adjusted Net Worth
Adjusted Earnings
10,000 145,000
7,500 108,750
Net Worth
Earnings
5,000 72,500
2,500 36,250
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2009 2008 2007 2006 2009 2008 2007 2006
Necessary adjustments 2009 2008 2007 2006

Non-cash derivative gains/losses $ (2,283 ) $ 4,645 $ (3,579 ) $ (1709 )
Adjusted earnings 5,772 9,639 9,634 9,306
Adjusted net worth 140,371 123,879 127,620 112,302

Matt Pauls
This is not intended to be a complete explanation of related to required accounting standards, primarily with
Berkshire Hathaways intrinsic value, rather, it is meant to respect to derivative contracts. The organizational chart
provide a clearer understanding of complicating factors and below provides a general overview of important items
how to adjust them sensibly. In the broader sense, there are discussed.
two general complications the first of which is the holding
company structure of Berkshire Hathaway and the second is
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There are several potentially confusing adjustments that I billion, $6.6 billion of which is deducted from other
make to Berkshire Hathaway which I will describe here in investments, leaving about $21 billion.
brief and describe in greater detail throughout the
remaining discussion. I do not treat Berkshire's derivative liabilities as liabilities
whatsoever. The primary reason for this is that I believe
Berkshires investments represent a significant amount of Buffett to have effectively hedged derivative contract
Berkshire's business value. As reported, investments are exposures. That is, Buffett received $8.1 billion in
broken down into four categories: (i) cash and cash derivative premiums (float) most of which came from
equivalents, (ii) fixed maturity investments, (iii) equities, equity put contracts which provided $5.9 billion. I suggest
and (iv) other investments all of which are held by later that even under the worse case scenario, Buffett
Berkshire's various insurance companies. should break even on equity put contracts so long as he
earns 10.4% annually over the contracts life.
Other investments consist of preferreds, warrants, notes,
and other convertible investments specifically interests in I do not therefore treat Berkshires derivatives as liabilities
Wrigley's, Goldman Sachs, General Electric, Swiss Re, and and I either add back or deduct from earnings, respective
Dow Chemical. Also included within other investments derivative gains and losses.
are securities reported under the equity method i.e.
Burlington Northern Santa Fe. Since the most recent Note, these adjustments ultimately do not play a significant role
annual filing, Berkshire subsequently acquired the in Berkshire's underlying value as we are here concerned. It does
remaining interest of Burlington Northern. however add about $9 billion to equity of the finance and
financial products business unit. There are other ways to
In 2011, Burlington Northern will be placed under reasonably adjust this, however with the same net effect.
Utilities for financial reporting purposes. To adjust the
2010 annual report for this, I transfer Berkshire's 22.5%
Burlington Northern holding to the utilities operating unit
also adding thereto the $8 billion in cash earmarked by
Berkshire Hathaway Inc. That is, a total of about $14.6

Matt Pauls
Derivatives
in more detail
Derivative contracts not designated as a hedge, for Berkshire Hathaway would need to compound
example, sold European Style Equity Index Puts (receiving $5.9 billion at about 10%. Buffetts track record
premiums up front) are accounted for by recording is well above 15% over the last 50 years and his
premiums as liabilities on the balance sheet. Changes in current investments are certain to outlive him-
the fair value of these contracts are adjusted quarterly with and I expect will exceed the break-even 10%.
changes reflected in the income
statement as derivative gains or CONSIDER: how [Amendments made in 2009 with respect to certain
losses and correspondingly in the equity put contracts reduced the strike price by
would a smart
balance sheet account as an between 29% and 39% and reduced the related
increase or decrease in derivative p r i v a t e b u s i n e s s m a n contract expiration dates by between 3.5 and 9.5
contract liabilities. think about such a years. This effectively reduced the annual rate of
transaction and compounding on these contracts to 8% in order to
The $8.1 Billion Berkshire would it change the break even. The remaining contracts were unaltered
initially received in premiums and remain as they did in 2008.] If markets are
businesses underlying
(Derivative Float) was initially at par with the initial and amended strike
recorded as a liability on the v a l u e , t h a t i s , h o w prices over the next 14 years, Berkshire will
balance sheet and gains or losses would this affect not have made and will not be required to
in the Fair-Value of Mark-to- the selling price in a make any payment. Meaning, derivative float
Market securities are either private business will explicitly become equity. In this case, the
added or subtracted from value of Equity Put Float will have definitely
transaction?
earnings in the period of gain or compounded well above 15% annually.
loss, irrespective of actual
economic gains or losses. In What is not discussed, is that these contracts
2008, Berkshires mark-to-market changes in derivative are effectively hedged and the probability of having to
values increased to $14.6 billion and as a consequence a actually pay anything is negligible. While Berkshire has the
pretax loss of $6.821 billion was recorded as negative use of between $6 and $8 billion, the balance sheet has
revenue (expense) understating reported earnings. In shown derivative liabilities of up to $14 billion.
2009, Berkshires earnings were overstated, recording a
pretax gain of $3.624 billion as derivative liabilities fell to These contracts, though technically, are liabilities should
$9.269 billion, however, this reduction included what not be considered such insofar as a private investor is
appears to be a real derivative loss of $1.9 billion. concerned. I adjust the income statement from period to
period, by either reducing or increasing earnings by the
Berkshires Derivative liabilities are effectively hedged. corresponding amount of derivative gains or losses that
Last year I tried to put the derivative contracts into proper result from a change in the contracts fair value. I eliminate
context, restated below: derivative liabilities altogether from the balance sheet,
since I am of the impression that the contracts are
In December 1929 the Dow Jones Industrial effectively hedged.
Index was at about 370. In 1944, 15 years later,
the index had fallen a total of 60% i.e. a 6% That said, investors need to arrive at their own conclusions about
annual loss. In equivalent terms, Berkshires the risks involved and may very well wish to keep some or all
Equity puts would require payment of about $22 derivative liabilities on Berkshires Books.
billion. To break even on this transaction

Matt Pauls
Itemized
derivative contracts
Equity Put Contracts Individual Companies

Equity puts are very similar to selling insurance-the Counter party risk exists to the extent the purchasers of
purchaser pays a premium and in return is protected these contracts are able to pay the full $4 billion
from future loss. The loss in this case is a decline in the premiums over the 5 year life of the contracts. Annually
general stock market. Berkshire receives $93 million for premiums on these
contracts. Berkshire was initially liable for 42
Berkshire sold puts and collected premiums of $5.9 corporations. Should any of these companies default on
billion up front, which Buffett invested. Derivative their loans, Berkshire is liable for the decline in the
premiums, like insurance premiums, are invested until market value of the debt relative to the value of the debt
the contracts expire. These are European style contracts, specified in the CDS contract.
meaning the seller (Berkshire) is liable only for losses that
exist on the expiration date of the contract. The Tax Exempt (Muni) Bond Insurance Contracts
amended contracts have an average weighted expiration Last year I mistakenly reported that premiums for State/
of 11.5 years. In the meantime Buffett gets the benefit of Muni contracts would be paid annually. Premiums were
the use of this money. received upfront and therefore counter-party risk does
not exist. These contracts are mostly second-to-pay
Credit Default Swaps contracts meaning Berkshire is liable to pay only what the
High Yield Index first insurer cannot.
Last year I suggested that, of Buffetts derivative book,
these were the most likely to produce a loss. Indeed it Berkshire received premiums of $595 million in 2008 on
appears as though this was the case for 2009 as Berkshire contracts extending as far as 40 years.
had to pay $1.9 billion in real losses. These contracts
now account for approximately $1.1 billion of Buffetts Berkshire now have total Derivative Float of about $6.3
derivative float. billion primarily from Equity Puts and Credit Default
Insurance (high yield index).

Matt Pauls
Operating units
Berkshire is made up of several separate business units. I related, however, if we look at regulatory capital
like to think of Berkshire in terms of the insurance required for normal insurance operations we find that
business and the non-insurance business. Within the Berkshire has significant excess capital better treated
non-insurance business there are several subgroups: separate from the insurance business. If we compare
manufacturing, service, & retail; utilities & energy; and Buffett's stated amount of float which is approximately
finance & financial products. Within the insurance $62 billion to cash, fixed income securities, and other
business group there are two subgroups, the insurance investments it's clear that equity investments are not
business itself and the investment business. It may seem required capital of the insurance business. Therefore I
a bit strange to separate these two as they are very much treat equities as separate from the insurance business.
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Matt Pauls
Insurance operation
The value of an insurance company comes from the insurance policies and the investment of surplus and float
amount of investable funds it generates. Investable funds are separate operations.
can come from underwriting profits, from investment
income, or from securities gains. In the simple sense, if Berkshire Hathaway has, on average, earned
insurance premiums are sufficient to cover the losses underwriting profits. Float at the end of 2009 was $62
incurred over the insurable period, the insurer produces billion, up $4 billion from last year. For several reasons
an underwriting profit. These profits may be added to not discussed here, most insurers earn underwriting
surplus, which allows the insurer to write additional losses. These losses must be made up for with interest
business. The amount of business an insurer can write is income and securities gains. If this does not happen,
generally limited to 3 times the insurers surplus, surplus declines and the amount of business written must
Statutory Accounting Principles (SAP) definition for also decline. If a privately owned insurance company
shareholders equity. owns very attractive securities, but consistently writes at
an underwriting loss, then the owners equity interest
As stated above, the amount of business an insurer can will decline either via liquidating investments or by
write is dependent upon surplus. Investable funds are a raising new capital. The key here is that its critically
combination of surplus and float. important to earn underwriting profit. Berkshire
Hathaways insurers clearly do this quite well.
The amount of float depends upon the amount of
business written. The amount of business written
depends upon the amount of surplus. The amount of
surplus depends upon underwriting profit or loss,
investment income from interest and dividends, and/or
capital gains on investments. The underwriting of

Matt Pauls
Insurance operation
It is important to recognize that Berkshire Hathaways was earmarked for the Burlington Northern Santa Fe
insurance business holds cash, fixed income securities, acquisition and is deducted from the cash account below.
and equity securities. Berkshire Hathaway has about Cash and cash equivalents, fixed income securities, and
$144 billion in cash & cash equivalents, fixed maturity other investments clearly support potential normal
investments, and Equity investments all of which are held insurance underwriting losses, meaning these
within various insurance businesses, primarily by investments are required for the normal operation of the
National Indemnity, Columbia Insurance Company, insurance business, whereas, equity securities are not.
GEICO, GenRe, National Fire and Marine Insurance
Company, and Berkshire Hathaway Assurance Company. This is very important and a fundamental
As of December 31, 2009, $8 billion of this $144 billion component of value which must be considered
separately.
TOTAL INVESTMENTS 2009 2008 2007 2006

Cash and cash equivalents $ 18,655 $ 18,845 $ 28,257 $ 34,590
Fixed maturity investments 32,331 27,115 28,515 25,272
Equities 56,289 49,073 79,999 61,168
Other 28,780 21,535 - -
9
Net investments 136,055 116,568 136,771 121,030 200 $
55
Float 62,000 58,500 58,700 50,887 18,6
TS $
M EN ts 31
ES T al en 32,3
INV q uiv
sh e
nts 89
n d ca s tme 56,2
h a v e 80
Cas rity in 28,7
u
ed mat ,055
INVESTMENTS Fi x 136
s
2009 2008 2007 2006 itie
Equ
ies
er s
ent
Utilit
Net investments $ 136,055 116,568 136,771 121,030
Cash and cash Oth es tm
inv
Net
equivalents 18,655 $ 18,845 $ 28,257 $ 34,590
y to
+2 $6,600
Fixed Securities
1,232,331 27,115 28,515 25,272
equit
00
BNSF
Total Fixed 53,531
Other investments consist of warrants, preferreds, notes, and similar

investment securities-itemized on the following page. Though Burlington
Northern Santa Fe is included within other assets (above,) I transfer the
$6.6 billion equity securities held by Berkshire to the utilities business
for valuation purposes.
Matt Pauls
To think clearly, think independently. To
think independently, base your decisions
Insurance operation
on the facts and sound logic.
OTHER INVESTMENTS - A wonderful lesson in parsimony. 2008 - Initial Purchases

If professional investors spent more time thinking, they might recognize a fallacy in the
underlying logic that prevents them from holding cash, namely the excuse, Our investors Wrigleys
dont pay us to do nothing. We have to be fully invested. The fundamental job of a Berkshire bought $4.4 billion fixed income notes yielding 11.5% due
professional money manager is, or at least should be, to decide when and where to invest. For 2018 and $2.2 billion cumulative preferred stock which convert into
some reason investors often forget the when. (This has everything to to with knowledge of Wrigleys equity. The preferreds also pay a 5% dividend annually.
underlying business value and I am in no way talking about market timing so please dont
Goldman Sachs
confuse the two.) Attractive investments are not always attractively priced. When sensible
Berkshire invested $5 billion in Goldman Sachs preferred stock
investments arent readily available, the facts and sound logic are clearly telling you to hold
yielding 10%, however attached thereto, Berkshire also received
cash, and by the way, so too was Warren Buffett. Berkshire Hathaway had more than $40
warrants convertible into 43 million shares of Goldman Sachs equity.
billion in cash leading up to 2007. As the financial crisis unfolded, Buffett put to work as
much as could be invested without overextending the insurance business. Many of these General Electric
investments are itemized under the line item, Other Investments. Buffetts other Berkshire invested $3 billion in GE, on terms nearly identical to the
investments were private placements, made at a time of corporate desperation (mid-2008 Goldman deal.
to mid-2009). Not only did Buffett have the luxury of where and when to invest, he also
determined the specific terms under which he invested. (Necessity never made a good
bargain.) 2009 - Additions
Shares Cost Total Per share
PREFERREDS, WARRANTS, NOTES
Wrigleys
Wrigleys
2018 notes 11.5s -
In addition to Securities purchased in 2008, Berkshire added $1 billion
$ 4,400,000,000
Preferreds 5s - 2,100,000,000 in fixed notes due 2013 & 2014.
2013 & 2014 senior notes - 1,000,000,000 SwissRe
Goldman Sachs Berkshire bought a $2.7 billion fixed income security yielding 12%
Preferreds 10s 50,000 5,000,000,000 $ 5,500,000,000 $ 110,000 forever until converted or called (under favorable terms).
Warrants (expire 2013) 43,478,260 5,000,000,000 115,000 Dow Chemical
General Electric Finally, Berkshire Invested $3 billion in Dow Chemical convertible
Preferreds 10s 30,000 3,000,000,000 3,300,000,000 110,000 preferreds yielding 8.5%.
Warrants (expire 2013) 134,831,460 3,000,000,000 22.25
SwissRe
12% Cv Perp. 120,000,000 2,700,000,000 CHF 3,000,000,000 CHF 25
Dow Chemical
Preferreds 8.5s 3,000,000 3,000,000,000 53.72
Net 21,200,000,000
15

Matt Pauls
Insurance operation
!"#$%&'()$*"+$("*&,!("'(-$.
EQUITY INVESTMENTS, GAAP EQUITY METHOD Shares Cost est.

Burlington Northern Santa Fe 22.5% 76,800,000 $ 6,600,000,000
Burlington Northern Santa Fe remaining 77.5% 264,500,000 26,500,000,000
Burlington Northern Santa Fe 100% 33,100,000,000
PREFERREDS, WARRANTS, NOTES, BNSF 100% - NET $ 54,300,000,000

PREFERREDS, WARRANTS, NOTES, BNSF 22.5% - NET 27,800,000,000
16

Matt Pauls
Insurance operation
Cash
$70,000
INVESTMENTS
2009 2008 2007 2006
Other fixed
Net investments $ 136,055 116,568 136,771 121,030
$35,000
Fixed Maturities 32,331 27,115 28,515 25,272
(Other) Fixed income 21,200
Fixed
Float
Total Fixed 53,531
$0
Cash and cash equivalents 18,655 $ 18,845 $ 28,257 $ 34,590 Fixed Float
Securities held by
Berkshire insurers 72,186
$72 billion exceeds Berkshires
insurance float ($62 billion) and
does not include equity
securities.
2009 2008 2007 2006

Float $ 62,000 $ 58,500 $ 58,700 $ 50,887
Cash & fixed maturity
72,186 60,460 56,772 59,862
investments (adjusted)
Excess cash for equities 8,000 - - 7,000
Berkshires insurance float is roughly $62 billion and is leaving $10.6 billion with the insurers for the normal
largely supported with $32.3 billion fixed maturity course of business. Income earned on fixed investments
securities and $21.2 billion fixed income securities, listed and cash generated by non-utility subsidiaries contribute
under line item Other Investments (less equity in to the cash account available for investing operations.
BNSF,) the sum of which comes to $53.5 billion.
Berkshire Hathaways insurance units also hold a (See page 20 for a table of Berkshire Hathaway Equity
combined $18.6 billion in cash and cash equivalents. Investments.)
Naturally a portion of this cash is available for equity
investment to which I arbitrarily assign $8 billion,

Matt Pauls
$65,000 BERKSHIRE HATHAWAY INSURANCE FLOAT
$51,250
$37,500
$23,750
$10,000
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Insurance operation
The above steps are useful only to the extent that The value of float is not easily calculated and will
investors can reasonably estimate how much vary from investor to investor, however, I am of
capital from total investments is required for the opinion that Berkshires float is
normal insurance operations, the amount which conservatively worth $78 billion.
support float funds. In Berkshires case, the value
of float (the truly important value in insurance,)
commands an economic value in excess of its
carrying amount. Meaning, residual capital not
required for normal insurance operations should
be treated separately for valuation purposes.
0 Berkshire Hathaways float is

conservatively worth $78
billion.
/
Insurance operation
Equities
As mentioned above, equities are not an essential part of operation. Equities are itemized below with few
Berkshires insurance regulatory capital. We can exceptions-one of which is BYD. With respect to this
therefore separate equity securities from the insurance discussion, equities are valued at market as of December
31, 2009 ($56,289,000,000).
Security Name Val ($MM) Ticker Pos % Port % O/S Filing Date Pos Chg % Pos Chg Val Chg ($MM) Market Cap ($MM) Filing Type
!"#$%&'()&*+)#(,-#&*./&(/*0-*1)#2* 34,196.06 341,244,000 40.17 100 12-Feb-10 264,466,971 344.46 26,502.24 34,196.06 13D
1)3/41)$/*1)* 10,544.00 KO-N 200,000,000 12.39 8.68 22-Feb-10 0 0 0 122,161.78 Proxy
5-$$6*0/#')*7*1)* 8,639.19 WFC-N 320,088,385 10.15 6.18 31-Dec-09 6,732,728 2.15 181.72 139,784.77 13F
89-#%3/&*:;2#-66*1)* 6,143.27 AXP-N 151,610,700 7.22 12.67 31-Dec-09 0 0 0 45,703.00 13F
<#)3(-#*7*=/9>$-*1)* 5,305.33 PG-N 87,503,411 6.23 3.01 31-Dec-09 -8,812,599 -9.15 -534.31 183,802.64 13F
?#/@*0))A6*B&3* 3,824.62 KFT-N 138,272,500 4.49 9.35 5-Jan-10 0 0 0 42,058.52 13G
5/$4C/#(*.()#-6*B&3* 2,086.54 WMT-N 39,037,142 2.45 1.02 31-Dec-09 1,200,500 3.17 64.17 206,016.00 13F
5-63)*0%&/&3%/$*1)#2* 1,956.16 WSC-A 5,703,087 2.3 80.1 31-Dec-09 0 0 0 2,673.92 13F
1)&)3)<,%$$%26*1)* 1,925.92 COP-N 37,711,330 2.26 2.54 31-Dec-09 -19,718,838 -34.34 -1,007.04 71,368.23 13F
D),&6)&*7*D),&6)&* 1,747.60 JNJ-N 27,132,467 2.05 0.99 31-Dec-09 -9,782,166 -26.5 -630.07 173,823.30 13F
E.*!/&3)#2*F-$* 1,554.08 USB-N 69,039,426 1.83 3.6 31-Dec-09 0 0 0 47,078.93 13F
C))AG6*1)#2* 852.63 MCO-N 31,814,610 1 13.44 31-Dec-09 -7,404,702 -18.88 -198.45 6,306.28 13F
5/6,%&'()&*<)6(*1)* 759.53 WPO-N 1,727,765 0.89 21.7 31-Dec-09 0 0 0 3,407.87 13F
H-63)*<$3*4E&A-#$G%&'* 604.39 TSCO-LN 90,000,000 0.71 1.13 25-Oct-09 0 0 0 50,816.88 UK Registers
.I%66*J-%&6"#/&3-*1)*4*E&A-#$G%&'* 527.66 RUKN-VX 11,262,000 0.62 3.04 12-Mar-10 0 0 0 16,682.93 Other Substantial/Declarable
+%K-*B&3*4*1$/66*!* 504.84 NKE-N 7,641,000 0.59 1.92 31-Dec-09 0 0 0 26,868.43 13F
C*7*H*!/&K*1)#2* 449.17 MTB-N 6,715,060 0.53 5.66 31-Dec-09 0 0 0 9,143.79 13F
1)6(3)*5,)$-6/$-*1)#2* 310.88 COST-O 5,254,000 0.37 1.2 31-Dec-09 0 0 0 26,786.13 13F
E.=*1)#2* 239.86 USG-N 17,072,192 0.28 17.19 31-Dec-09 0 0 0 1,338.56 13F
J-2">$%3*.-#L%3-6*B&3* 234.7 RSG-N 8,290,500 0.28 2.18 31-Dec-09 4,665,500 128.7 132.08 10,720.89 13F
+/$3)*M)$A%&'*1)* 229.59 NLC-N 9,000,000 0.27 6.51 31-Dec-09 0 0 0 3,214.42 13F
.G9-(#/*0%&/&3%/$*1)#2* 223.59 SYA-N 17,400,000 0.26 14.75 21-Jan-10 17,400,000 100 223.59 1,532.68 13G
B&'-#6)$$4J/&A*<$3* 201.45 IR-N 5,636,600 0.24 1.76 31-Dec-09 -2,146,000 -27.57 -76.7 10,213.12 13F
1/#C/;*B&3* 194 KMX-N 8,000,000 0.23 3.59 31-Dec-09 -1,000,000 -11.11 -24.25 4,499.52 13F
1)93/6(*1)#2*4*1$*8*.2-3%/$* 192.12 CMCSK-O 12,000,000 0.23 1.57 31-Dec-09 0 0 0 11,850.72 13F
+-6($-*.8*4*F-2*J32(* 164.39 NSRGY-5 3,400,000 0.19 0.09 31-Dec-09 0 0 0 181,853.56 13F
B#)&*C)"&(/%&*B&3*</* 159.32 IRM-N 7,000,000 0.19 3.44 31-Dec-09 3,627,800 107.58 82.57 5,262.83 13F
./&)N48L-&O6*4*F-2*J32(* 153.31 SNY-N 3,903,933 0.18 0.15 31-Dec-09 0 0 0 96,660.15 13F
P)I-Q6*1)92/&%-6*B&3* 152.04 LOW-N 6,500,000 0.18 0.45 31-Dec-09 0 0 0 34,592.89 13F
+J=*:&-#'G*B&3* 141.66 NRG-N 6,000,000 0.17 2.29 31-Dec-09 0 0 0 5,719.85 13F
H)#3,9/#K*1)#2* 124.11 TMK-N 2,823,879 0.15 3.41 31-Dec-09 0 0 0 3,849.50 13F
!-3()&*F%3K%&6)&*7*1)* 118.29 BDX-N 1,500,000 0.14 0.64 31-Dec-09 300,000 25 23.66 18,353.88 13F
=-&-#/$*:$-3(#%3*1)* 117.68 GE-N 7,777,900 0.14 0.07 31-Dec-09 0 0 0 170,998.77 13F
E&%(-A*</#3-$*.-#L%3-*B&3* 81.99 UPS-N 1,429,200 0.1 0.2 31-Dec-09 0 0 0 41,483.71 13F
M)9-*F-2)(*B&3* 79.79 HD-N 2,757,898 0.09 0.16 31-Dec-09 0 0 0 53,052.86 13F
5-$$2)%&(*B&3* 78.33 WLP-N 1,343,820 0.09 0.3 31-Dec-09 -2,050,393 -60.41 -119.52 27,466.01 13F
!/&K*)R*89-#%3/*1)#2* 75.3 BAC-N 5,000,000 0.09 0.05 31-Dec-09 0 0 0 165,689.84 13F
=$/;).9%(,?$%&-*<$3*4*F-2*J32(* 63.82 GSK-N 1,510,500 0.07 0.06 31-Dec-09 0 0 0 95,986.05 13F
."&(#"6(*!/&K6*B&3* 48.66 STI-N 2,398,206 0.06 0.48 31-Dec-09 -681,572 -22.13 -13.83 11,889.52 13F
E&%(-A*M-/$(,*=#)"2*B&3* 35.81 UNH-N 1,175,000 0.04 0.1 31-Dec-09 -2,225,000 -65.44 -67.82 39,345.89 13F
=/&&-S*1)*B&3* 32.7 GCI-N 2,202,200 0.04 0.93 31-Dec-09 -1,245,400 -36.12 -18.49 3,595.96 13F
:;;)&*C)>%$*1)#2* 28.76 XOM-N 421,800 0.03 0.01 31-Dec-09 -854,490 -66.95 -58.27 307,573.38 13F
1)9A%63)*M)$A%&'*1)*B&3* 15.38 CDCO-U 1,538,377 0.02 38.18 31-Dec-09 0 0 0 34.45 13F
?#)9%*P)'%6OK*8=* 4.45 K1R-XE 401,863 0.01 9.74 21-Sep-09 0 0 0 43.74 Other Substantial/Declarable
H#/L-$-#6*1)6*B&3* 1.36 TRV-N 27,336 0 0.01 31-Dec-09 0 0 0 27,008.86 13F

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PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152

j a t s itu
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BERKSHIRE HATHAWAY, INC.
e
nc
ra
su
In
Insurance Operations
Hathaway, Inc.
Net insurance est.

Berkshire
Value of Float
!
Matt Pauls
Non-insurance
operations
2009 2008 2007
Manufacturing, Service and Retailing
Pre-tax earnings $ 2,058 $ 4,023 $ 3,947 Non-Insurance Operating Businesses
Net earnings 1,113 2,283 2,353
Approximate net worth 16,804 17,227 12,112
On the low end of the valuation range, Berkshires non-insurance
Finance & Financial Products operating businesses are worth their adjusted net worth.
Pre-tax earnings $ 781 $ 787 $ 1,006
Net earnings 494 479 632 Pre-merger (BNSF) net worth was roughly equal to
Approximate net worth 10,874 6,874 9,658 $56,000,000,000.
Post-merger (BNSF) net worth is roughly, $75,000,000,000.
Utilities
Net earnings $ 1,071 $ 1,704 $ 1,114
Approximate net worth 13,963 10,970 8,600 Although, currently suffering from the global economic downturn,
I am still of the opinion that Berkshire Hathaways non-insurance
(BNSF earmarked cash & 22.5% equity $14.6b) 28,563 - - operating businesses command a liberal premium over basic net
(BNSF 100% consolidated) 47,963 - - worth.
Manufacturing, Service and Retailing, Finance & Estimated value of Berkshire Hathaways non-insurance operating
Financial Products, and Utilities units sold in private transactions:
Combined net earnings $ 2,678 $ 4,466 $ 4,099 BNSF 100% consolidated $88,000,000,000
Combined net worth
22.5% BNSF Pre-merger 56,241 35,071 30,370
100% BNSF Post-merger 75,641 - -
2009
Non-insurance Value in Private
Negotiations $ 88,000
21

Matt Pauls
Burlington
Northern Santa Fe
BNSF is very capital intensive, why did In terms of replacement cost, I'm certain BNSF is
Berkshire Hathaway buy Burlington worth considerably more than $34 billion. Moreover, I
Northern? find it hard to believe that anyone wanting to enter this
There is literally no close substitute to railroad business could acquire enough (connected) real estate
transportation, a service that is also both needed and to build an equivalent network of roads. The cost
desired. Were the industry not subject to price would certainly be well in excess of $34 billion. The
regulation, we would be talking about an economic merger must be considered as a truly long-term
franchise, but we would also be talking about a clear investment. Sometime in the future, say 50 years
monopoly subject to anti-trust law. Instead, we have a hence, Burlington may very well be a 20% return
utility business and as is the case with utility business. Today it is somewhere between 13% and
companies, railroads are effectively a regulated 15%. It has some, but not excessive leverage.
monopoly. As the cost of goods increases over time
Burlington will pass along their capital costs to Though I consider this very much a speculative
customers. However as the cost of oil increases with comment, I am also of the impression that the
inflation, the relative attractiveness of rail transport merger will benefit the utilities operation directly.
will also increase, but without proportional cost Mid-American produces significant amounts of its
increases. The extremely high fixed costs and similarly energy production via coal. The Powder River
high initial investment or replacement costs are Basin provides 40% of all coal used in the U.S. for
gigantic barriers to entry. Utility and railroad electrical power generation. Significant coal bed
businesses alike, have fairly calculable future earning methane deposits are also located in the Powder
streams, which makes the use of leverage both River Basin. The Powder River Basin consists of 18
reasonable and smart. coal mines, from which, 30 states receive
approximately 400 million tons of coal every year.
How much is Burlington Northern According to the U.S. Energy Information
worth? Administration, coal from Powder River Basin is
Debating whether or not Buffett paid a reasonable significantly less expensive than coal extracted
price seems to me ridiculous. However, I had elsewhere in the U.S. selling, for instance, 1/6 the
calculated BNSF before mention of the merger and as price of Central Appalachian coal. The majority of
it turns out he appears to have paid what I thought to coal moved from Powder River Basin must first
be his maximum price. (This is also supported by travel 103 miles on a BNSF-Union Pacific jointly
comments made by Buffett about the use of Berkshire owned line. Though partially owned by Union
Hathaway shares in the acquisition.) Pacific, the line is primarily owned, and fully
operated by, BNSF. There are now a total of four
(It is important to recognize that Berkshire tracks jointly used in the basin by BNSF and UP.
Hathaway is enormous in size, limiting the Approximately 65 unit trains (115 cars) leave
universe of opportunities within which Buffett can daily, laden with coal.
invest meaningful amounts of shareholder capital.
As the universe gets smaller, so too must overall
investment returns, the consequence of an ever-
growing huge amount of capital. Berkshire owner
expectations should be significantly lower over the
next 20 years. That is not to discount Berkshire
altogether-owner partners should also expect to
earn quite reasonable rates of return over the same
period.)

Matt Pauls
BURLINGTON NORTHERN SANTA FE TEARSHEET
Key Ratios FYE: 12/31/09

$140
48-Month Price
Oper Margin 23.05 Curr Ratio 0.98
$120
Net Margin 12.28 Debt/Equity 0.76
ROE 13.45 Int Coverage 5.22 $100
ROA 4.45 CF/Share 10.42
Currency: USD $80
PER SHARE OVERVIEW
Date Earnings Dividend Sales/Shr. $60
Q4Y2009 5.01 0.40 10.80

$40
Q3Y2009 5.25 0.40 10.55
Q2Y2009 5.83 0.40 9.73
$20
Q1Y2009 5.64 0.40 10.05
Q4Y2008 6.08 0.40 12.83 $0
Q3Y2008 5.75 0.40 14.40 Feb2006 Jun2006 Oct2006 Feb2007 Jun2007 Oct2007 Feb2008 Jun2008 Oct2008 Feb2009 Jun2009 Oct2009
Q2Y2008 5.23 0.32 13.14
Q1Y2008 5.43 0.32 12.51
INCOME STATEMENT (Millions) Y2009 Y2008 Y2007 Y2006 QUARTERLY REVENUE YEAR OVER YEAR*
Net Sales 14,016 18,018 15,802 14,985 Y2008 Y2009
Cost of Goods Sold 5,768 8,825 7,169 5,594 6000
Selling and Admin Expenses 3,481 3,884 3,773 3,816 5000
Amortization & Depreciation 1,537 1,397 1,293 1,130 4000
Operating Income 3,230 3,912 3,567 3,495 3000
Interest Expense 621 550 528 499 2000
Pretax Income 2,641 3,368 2,962 3,001 1000
Income Taxes 920 1,253 1,128 1,105
0
Net Income before Extraordinary Items/Pref Div 1,721 2,115 1,829 1,887
Net Income 1,721 2,115 1,829 1,887 -3Q -2Q -1Q 0Q
BALANCE SHEET (Millions) Y2009 Y2008 Y2007 Y2006 FIVE YR SALES TO NET INCOME
ASSETS
Cash & Short-Term Investments 1,303 633 330 375 Net Income* Sales*
Receivables - Total 787 847 790 805

Inventories - Total 633 525 579 488 2500 20000
Total Current Assets 3,256 2,665 2,181 2,181 18000
2000 16000
Net Property, Plant, and Equipment 32,294 30,847 29,567 27,676 14000
Total Assets 38,675 36,403 33,583 31,643 1500 12000
10000
LIABILITIES AND STOCKHOLDERS' EQUITY 1000 8000
6000
Accounts Payable 244 290 296 282 500 4000
Debt In Current Liabilities 644 456 411 473 2000
0 0
Total Current Liabilities 3,339 3,646 3,235 3,326
Long-Term Debt - Total 9,691 9,099 7,735 6,912 Y2005 Y2006 Y2007 Y2008 Y2009
Total Liabilities 25,877 25,272 22,439 21,247
Minority Interests 0 0 0 0 FIVE YEAR SUMMARY DATA
Preferred Stock 0 0 0 0 Year Sales* Net Income* EPS
Common Stock 5 5 5 5 Y2005 12,987 1,531 4.01
Retained Earnings 13,941 12,764 11,152 9,607 Y2006 14,985 1,887 5.10
Capital Surplus 7,776 7,631 7,348 6,990 Y2007 15,802 1,829 5.10
Treasury Stock 8,428 8,395 7,222 5,929 Y2008 18,018 2,115 6.08
Total Common Equity 12,798 11,131 11,144 10,396 Y2009 14,016 1,721 5.01
CASH FLOW SUMMARY (Millions) Y2009 Y2008 Y2007 Y2006
Net Cash Provided by Operations 3,413 3,977 3,492 3,108 Growth Rate 1.92% 2.97% 5.72%
Net Cash Provided by Investments 2,637 3,073 2,415 2,086
Net Cash Provided by Financing (140) (601) (1,122) (722) * Millions
COMPANY DESCRIPTION PRIMARY SIC CODE: 4011 KEY FINANCIAL ITEMS IN US$ (Millions)
Y2009 Y2008 Y2007 Y2006
Market Cap. 33,604 25,679 28,939 26,415
Total Assets 38,675 36,403 33,583 31,643
Sales 14,016 18,018 15,802 14,985
Inc. Bef. Pref. 1,721 2,115 1,829 1,887
Burlington Northern Santa Fe Corporation. The Group's principal activity is operating railroad networks in North America. Through EXECUTIVE OFFICERS
its subsidiaries, it is engaged primarily in the freight rail transportation business. As on 31-Dec-2009, it operated in about 32,000 Chairman, President & Chief Executive Matthew K. Rose
route miles covering 28 states and two Canadian provinces. Approximately 9,000 route miles of BNSF Railway's system consist of Executive Vice President & Chief Carl R. Ice
trackage rights that permit BNSF Railway to operate its trains with its crews over other railroads' tracks. The BNSF railway Operating Officer Thomas N. Hund
transports a range of products and commodities including transportation of consumer products, coal, industrial products and Executive Vice President & Chief Roger Nober
agricultural products, derived from manufacturing, agricultural and natural resource industries. Financial Officer
Executive Vice President & Secretary
ADDRESS
2650 Lou Menk Drive Tel +1 800 795-2673
City: State Zip
Fort Worth TEXAS 76131-2830
DATA SOURCE: THOMSON FINANCIAL

Matt Pauls
Burlington
Northern Santa Fe
Utilities and BNSF The Merger

Significant transportation contracts between Mid- As of December 31, 2009, Berkshire Hathaway had
American and Burlington Northern expire within 2 acquired 76,800,000 shares (22.5%) of Burlington
years. The new, generally long term contracts, would Northern through market share purchases. The
almost certainly include rate increases chargeable to weighted cost of these share purchases was
Mid-American. Given the heavily regulated nature of approximately $6.6 billion. BNSF shareholders agreed
both of these industries, I am uncertain whether to sell the remaining 77.5% of BNSF to Berkshire
favorable terms are allowable between affiliate Hathaway in a cash and stock deal. The reported value of
companies, however I think it's fair to assume some the transaction was valued at $26.4 billion, or $100 per
benefit will trickle down to the parent company. share, thereby valuing Burlington Northern at
approximately $34 billion.

Matt Pauls
Burlington
Northern Santa Fe
Berkshire acquired the remaining 77.5% of BNSF not when Berkshire was selling for $180 billion. Based upon
already owned. Were this consideration paid strictly with conservative estimates at the time of offer, Berkshires
cash, there would be nothing further to discuss, but intrinsic value was, roughly $200 billion. The stock-
Berkshire used cash and stock. Meaning, stock, in effect, currency used in the transaction adjusted for underlying
was used as currency. The underlying value of stock- value, suggests that the total cost of the deal was
currency (unlike cash-currency,) may be quite a bit understated by roughly $1.4 billion. If reference is made
different from its traded market value; generally the to the cost as provided within the merger proxy,
important value as far as the seller is concerned. Berkshire adjustment should be made to the value of stock purchased
Hathaway's stock-currency traded for about $180 billion at at market, before merger. This number was adjusted up
the time of offer. Shares issued in conjunction with the from cost to market which inflated this portion of the
merger amount to approximately 6% of Berkshire acquisition cost, however the increase will come through
Hathaway. That is, 30% of BNSFs total shares (or 39.9% the income statement in the first quarter. There are many
of BNSFs shares not already owned) were acquired in ways to treat this. I take the actual cost to berkshire and
exchange for 6% of Berkshire Hathaway's stock-currency, add thereto, the cost of undervalued stock-currency.
% BNSF % BNSF Shares Total cost Cost per

stock stock share
acquired in
outstanding
merger
Stock already owned, at cost 22.5 - 76,800,000 $ 6,600,000,000 $ 85.9375
MERGER OFFER
Acquired with cash 46.7 60.1 158,400,000 15,800,000,000 99.74747
Acquired with stock 30.8 39.9 , 105,200,000 12,000,000,000 114.0684
Net Acquisition 100.0 340,400,000 34,400,000,000 101.0511
158,400,000 shares represent 46.7% of BNSF total shares outstanding or 60%

of BNSF shares not already owned; to be acquired.
Stock-currency value is equivocally 6% of Berkshire Hathaway

(i.e. 6% for 30.8%)
Analysis of Multiples at Offer Price. Goldman Sachs calculated and compared various financial multiples and ratios for BNSF based on
information that it obtained from BNSF management and estimates from the Institutional Brokers Estimate System (IBES):
Implied Implied
As of October Consideration As of October Consideration
30, 2009 Value 30, 2009 Value
Enterprise Value/2010E
EBITDA Price/2010E EPS
IBES 6.8 x 8.5 x IBES 13.5 x 17.9 x
2010 Recovery Case 7.0 8.7 2010 Recovery Case 14.9 19.8
2011 Recovery Case 7.4 9.3 2011 Recovery Case 17.1 22.7
No Recovery Case 7.6 9.5 No Recovery Case 17.6 23.4
Deeper Recession Case 8.0 10.0 Deeper Recession Case 19.7 26.2

Matt pauls
PO Box 523714, 6200 Rolling Road
! BERKSHIRE HATHAWAY, INC. Springfield, Virginia 22152
matt@mattpauls.com
(703) 659-9391
Matt Pauls
INTRINSIC VALUE ESTIMATE, Berkshire Hathaway, Inc .
CURRENT
(BNSF 100% CONSOLIDATED)
ADJUSTED NET WORTH 2009 2008

Net insurance est. $ 142,200 $ 128,500
Combined non-insurance operating businesses 75,641 35,071
Conservative value, Berkshire Hathaway inc. 217,841 163,571
NEGOTIATED SALE 2009 2008

DECEMBER 31, 2009

(PRE-MERGER)
ADJUSTED NET WORTH 2009 2008
Retained Earnings
Non-Insurance
$142,200
Market Cap
23% 22%
Insurance
20% 20%
18% 17% $128,500
Equity
14%
12%
$75,641
3% $35,071
10 Years 15 Years 20 Years 2009 2008
26
CONTACT THE AUTHOR
Email questions, comments and general feedback to
matt@mattpauls.com

Berkshire Hathaway Inc

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Matt pauls

PO Box 523714, 6200 Rolling Road

Reasonably Valued 217,000,000,000 April 19, 2010

Last year I discussed Berkshire Hathaways valuation at

April 2009 (LAST YEAR) April 2010 (CURRENT)

April 2009 market value:

Last 119,135 52 Week High 125,252

Change 735 52 Week Low 83,957

% Change 0.621 1 Year Total Return(%) 33.03

Open 116,410 3 Years Total Return(%) 8.23

Low 116,410 Common Primary Shares (mil) 1

Volume 588 Market Cap Consolidated (mil) 194,791

Currency USD 217,000

Annual Financials Statements........................................ 4

Burlington Northern Santa Fe........................................ 22

Berkshire Hathaway Inc., Business Value....................... 26

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 1

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com

BERKSHIRE HATHAWAY TEARSHEET

Key Ratios FYE: 12/31/09

ROA 2.71 CF/Share 9190.46

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 3

5 YR ANNUAL BALANCE SHEET

Cash And ST Investments 31,012.00 26,071.00 45,425.00 44,851.00 45,461.00

LIABILITIES & SHAREHOLDERS' EQUITY 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Accounts Payable 23,207.00 19,974.00 18,881.00 19,711.00 8,699.00

BALANCE SHEET YR OVER YR % CHANGE 12/31/09 12/31/08 12/31/07 12/31/06

Total Current Assets 5.61% -18.82% 3.26% 1.91%

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 4

5 YR INCOME STATEMENT 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Net Sales or Revenues 112,024.00 107,786.00 118,245.00 98,539.00 81,663.00

COMMON SIZE INCOME STATEMENT 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Cost of Goods Sold 75.51% 77.81% 70.34% 69.68% 72.55%

INCOME STMENT YR OVER YR % CHANGE 12/31/09 12/31/08 12/31/07 12/31/06

Sales 3.93% -8.85% 20.00% 20.67%

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 5

Exchange Rate Effect 101.00 -262.00 98.00 - -

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 6

ANNUAL FINANCIAL RATIOS

PROFITABILITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Return On Equity 6.69 4.34 11.53 11.02 9.61

ASSET UTILIZATION RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Assets Per Employee 1,338,373.87 1,086,987.80 1,173,141.63 1,144,870.97 1,032,942.71

LEVERAGE RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

LIQUIDITY RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Quick Ratio 2.07 2.15 2.64 2.67 5.72

GROWTH RATIOS 12/31/09 12/31/08 12/31/07 12/31/06 12/31/05

Sales 1Yr Growth 3.93 -8.85 20.00 20.67 9.79

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 7

D 26 om m ble hir 5,2 1 9

Reported earnings and

equity are significantly

information and conclusions drawn therefrom will be De es p bilit

equally bad. An investor could easily look at berkshires numbers and

Necessary adjustments 2009 2008 2007 2006

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 8

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 9

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 10

Equity Put Contracts Individual Companies

PO Box 523714, 6200 Rolling Road Springfield, Virginia 22152 matt@mattpauls.com 11

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