25 Surprising Facts About Berkshire Hathaway

This article has been updated on 11/6/2014

1. For the five-year period ending 2013, Berkshire Hathaway  (NYSE: BRK-A  ) (NYSE: BRK-B  )  underperformed the S&P 500. This was the first such underperformance in 44 such five-year periods since Buffett took the helm in 1964. 

2. If you had taken $10,000 back then and achieved the same rate of return as Berkshire's growth in per share book value, at the end of 2013 you would have had $69,351,800.

3. Under Buffett, Berkshire shareholders have collected just one dividend: A $0.10 per share payout in 1967. Buffett jokes he "must have been in the bathroom when that decision was made."

4. Berkshire's roots go back more than 174 years to the founding of textile manufacturer Valley Falls Company, which itself merged with Berkshire Cotton Manufacturing Company in 1929. The resulting company merged with Hathaway Manufacturing to create Berkshire Hathaway in 1955.

5. In 2010, Warren Buffett said he considered Berkshire the "dumbest" stock he ever bought. Why? Because in 1962 he acquired his controlling stake in anger when one of its managers short-changed him in a tender offer to the tune of $0.125 per share. After he fired the manager, Buffett realized he had committed too much of his money to a "terrible" textiles business, which he fought to save for 20 years before giving up. By Buffett's estimation, that mistake cost him more than $200 billion in compounded returns. 

6. In 1981, just 12 people attended Berkshire's annual shareholder meeting. This year, an estimated 40,000 shareholders made the trip to Omaha.

7. Over the course of just nine hours at last year's annual meeting, Berkshire shareholders bought 1,062 pairs of Justin Boots, 12,792 pounds of See's candy, 11,162 Quikut knives, and 6,344 pairs of Wells Lamont gloves. No wonder Buffett joked a few months earlier, "Anyone who says money can't buy happiness simply hasn't shopped at our meeting."

8. At the end of 2013, Berkshire employed 330,745 people.

9. That included just 25 people at Berkshire's headquarters office -- a testament to Buffett's decentralized management structure, which entrusts business unit leaders to make the best possible decisions with minimal bureaucracy.

10. Not including its equity holdings, Berkshire is made up of 57 distinct subsidiary businesses.

11. That doesn't include the 25 smaller companies on which Berkshire quietly spent $3.1 billion last year as "bolt-on" acquisitions to be melded into its existing operations.

12. In keeping with his principles on maintaining an adequate margin of safety, Buffett insists on having at least $20 billion in cash on Berkshire's balance sheet at any given time.

13. Berkshire's insurance operations have operated at an underwriting profit for the past 11 consecutive years, good for a total pre-tax gain of $22 billion -- and an incredible feat in the insurance industry. For some context, consider rival insurer State Farm (a well-managed company in its own right) has operated at an underwriting loss for nine of the last 13 years.

14. GEICO's Gecko got a mention in Buffett's latest shareholder letter in praise for the company's outstanding performance and ability to "gobble up market share year after year." Still, I think GEICO's "Did you know" ad campaign deserves at least some credit:

15. As of the middle of last year, Berkshire's MidAmerican energy had 2,285 megawatts of energy generation capacity coming from 1,267 wind turbines, making it the No. 1 owner of wind-powered energy generation among U.S. rate-regulated entities. 

16. That doesn't include another 1,050 megawatts of capacity -- dubbed the "Wind VIII expansion -- which MidAmerican is adding in Iowa by year-end 2015. Once that expansion is complete, roughly 39% of MidAmerican's total owned generation capacity will come from 1,715 wind turbines.

17. But don't forget solar power, which currently comprises just 8% of MidAmerican's renewable generation capacity. In particular, consider its 579 Megawatt Antelope Valley Solar joint venture with SunPower Corporation  (NASDAQ: SPWR  ) , construction for which began last year and is expected to complete by the end of 2015. When all is said and done, this project will have provided 650 jobs and more than $500 million in regional economic impact, and should provide enough clean energy to power around 255,000 average California homes.

18. Berkshire's currently carries about 15% of all inter-city freight in the U.S. through its Burlington Northern Santa Fe subsidiary. That calculation includes all goods transported by truck, rail, water, air, or pipeline.

19. Even better, BNSF is able to carry each ton of freight about 500 miles on a single gallon of diesel fuel, which is around four times more efficient than the trucking industry.

20. Buffett is rapidly increasing the equity portfolio responsibilities of 43 year-old Todd Combs and 50 year-old Ted Weschler, both of whom have worked for Berkshire for less than 4 years. By the end of 2013, Buffett says both Combs and Weschler had each "handily" outperformed the S&P 500, and collectively managed around $14 billion of Berkshire's money.

21. Weschler, a former managing partner of the Peninsula Capital Advisors hedge fund, won the job after placing the winning bid in both 2010 and 2011 for Buffett's annual charity auction to the benefit of San Francisco's Glide foundation. Though he remained anonymous until after his hiring was announced, Weschler paid more than $2.6 million each year to have lunch with Buffett.

22. While Buffett owns nearly 14.5% of American Express through Berkshire, he says the best advice he can offer young people is to avoid credit cards. Why? In his words: "If I borrowed money at 18 or 20 percent, I'd be broke."

23. Berkshire "lost" around $2.5 billion last month after its huge stakes in both IBM (NYSE: IBM  )  and Coca-Cola  (NYSE: KO  ) plummeted following the companies' respective disappointing quarterly financial results. But Buffett was likely thrilled about those short-term losses considering he suggested earlier this year Berkshire's ownership interest in both IBM and Coke was likely to increase in the future. In the end, I wouldn't be the least bit surprised if Buffett used the drops as an opportunity to add to his positions.

24. In times of financial duress, Berkshire is more than happy to lend a hand to other struggling companies, including loans of $3 billion and $5 billion to Swiss Re and Bank of America in 2009 and 2011, respectively, as well as loans in 2008 to both Goldman Sachs (NYSE: GS  ) and General Electric for $5 billion and $3 billion, respectively. Of course, each of those loans made Buffett a bundle of money, with the Goldman Sachs deal culminating last year in Berkshire becoming one of Goldman's top 10 shareholders for next to nothing.

25. Buffett holds more than 98 percent of his $70.2 billion net worth in Berkshire Hathaway stock, and plans to gradually give nearly all of it to the Bill and Melinda Gates Foundation before he dies. Through the Giving Pledge he and Mrs. Gates formed in June, 2010, they have so far convinced over 120 more of the world's wealthiest individuals and families to follow suit, giving at least half their wealth to philanthropy or charitable causes either during their lifetime or after their death. 

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