BERKSHIRE HATHAWAY INC. 2011 ANNUAL REPORT Business Activities Berkshire Hathaway Inc. is a holding company owning subsidiaries that engage in a number of diverse business activities including property and casualty insurance and reinsurance, freight rail transportation, utilities and energy, finance, manufacturing, services and retailing. Included in the group of subsidiaries that underwrite property and casualty insurance and reinsurance is GEICO, the third largest private passenger auto insurer in the United States and two of the largest reinsurers in the world, General Re and the Berkshire Hathaway Reinsurance Group. Other subsidiaries that underwrite property and casualty insurance include National Indemnity Company and affiliated insurance entities, Medical Protective Company, Applied Underwriters, U.S. Liability Insurance Company, Central States Indemnity Company, Kansas Bankers Surety, Cypress Insurance Company, BoatU.S. and several other subsidiaries referred to as the “Berkshire Hathaway Homestate Companies.” Burlington Northern Santa Fe (“BNSF”) operates one of the largest railroad systems in North America. In serving the Midwest, Pacific Northwest and the Western, Southwestern and Southeastern regions and ports of the U.S., BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. MidAmerican Energy Holdings Company (“MidAmerican”) is an international energy holding company owning a wide variety of operating companies engaged in the generation, transmission and distribution of energy. Among MidAmerican’s operating energy companies are Northern Powergrid; MidAmerican Energy Company; Pacific Power and Rocky Mountain Power; and Kern River Gas Transmission Company and Northern Natural Gas. In addition, MidAmerican owns HomeServices of America, a real estate brokerage firm. Berkshire’s finance and financial products businesses primarily engage in proprietary investing strategies (BH Finance), commercial and consumer lending (Berkshire Hathaway Credit Corporation and Clayton Homes) and transportation equipment and furniture leasing (XTRA and CORT). McLane Company is a wholesale distributor of groceries and nonfood items to discount retailers, convenience stores, quick service restaurants and others. The Marmon Group is an international association of approximately 140 manufacturing and service businesses that operate independently within diverse business sectors. Numerous business activities are conducted through Berkshire’s other manufacturing, services and retailing subsidiaries. Shaw Industries is the world’s largest manufacturer of tufted broadloom carpet. Benjamin Moore is a formulator, manufacturer and retailer of architectural and industrial coatings. Johns Manville is a leading manufacturer of insulation and building products. Acme Building Brands is a manufacturer of face brick and concrete masonry products. MiTek Inc. produces steel connector products and engineering software for the building components market. Fruit of the Loom, Russell, Vanity Fair, Garan, Fechheimer, H.H. Brown Shoe Group, Justin Brands and Brooks Athletic manufacture, license and distribute apparel and footwear under a variety of brand names. FlightSafety International provides training to aircraft operators. NetJets provides fractional ownership programs for general aviation aircraft. Nebraska Furniture Mart, R.C. Willey Home Furnishings, Star Furniture and Jordan’s Furniture are retailers of home furnishings. Borsheims, Helzberg Diamond Shops and Ben Bridge Jeweler are retailers of fine jewelry. In addition, other manufacturing, service and retail businesses include: The Buffalo News and The Omaha World-Herald (acquired by Berkshire on December 23, 2011), publishers of daily and Sunday newspapers; See’s Candies, a manufacturer and seller of boxed chocolates and other confectionery products; Scott Fetzer, a diversified manufacturer and distributor of commercial and industrial products; Larson-Juhl, a designer, manufacturer and distributor of high-quality picture framing products; CTB International, a manufacturer of equipment for the livestock and agricultural industries; International Dairy Queen, a licensor and service provider to about 6,100 stores that offer prepared dairy treats and food; The Pampered Chef, the premier direct seller of kitchen tools in the U.S.; Forest River, a leading manufacturer of leisure vehicles in the U.S.; Business Wire, the leading global distributor of corporate news, multimedia and regulatory filings; Iscar Metalworking Companies, an industry leader in the metal cutting tools business; TTI, Inc., a leading distributor of electronic components and Richline Group, a leading jewelry manufacturer. The Lubrizol Corporation, acquired by Berkshire on September 16, 2011, is a specialty chemical company that produces and supplies chemical products for transportation, industrial and consumer markets. Operating decisions for the various Berkshire businesses are made by managers of the business units. Investment decisions and all other capital allocation decisions are made for Berkshire and its subsidiaries by Warren E. Buffett, in consultation with Charles T. Munger. Mr. Buffett is Chairman and Mr. Munger is Vice Chairman of Berkshire’s Board of Directors. ************ BERKSHIRE HATHAWAY INC. 2011 ANNUAL REPORT TABLE OF CONTENTS Business Activities ....................................... Inside Front Cover Corporate Performance vs. the S&P 500 .................................. 2 Chairman’s Letter* ................................................... 3 Acquisition Criteria ................................................... 23 Management’s Report on Internal Control Over Financial Reporting ............ 23 Selected Financial Data for the Past Five Years ............................. 24 Report of Independent Registered Public Accounting Firm .................... 25 Consolidated Financial Statements ....................................... 26 Management’s Discussion .............................................. 62 Owner’s Manual ..................................................... 93 Intrinsic Value ....................................................... 99 Common Stock Data .................................................. 100 Operating Companies ................................................. 101 Directors and Officers of the Company ....................... Inside Back Cover *Copyright© 2012 By Warren E. Buffett All Rights Reserved Berkshire’s Corporate Performance vs. the S&P 500 Annual Percentage Change in Per-Share in S&P 500 Book Value of with Dividends Relative Berkshire Included Results Year (1) (2) (1)-(2) 1965 ..................................................... 23.8 10.0 13.8 1966 ..................................................... 20.3 (11.7) 32.0 1967 ..................................................... 11.0 30.9 (19.9) 1968 ..................................................... 19.0 11.0 8.0 1969 ..................................................... 16.2 (8.4) 24.6 1970 ..................................................... 12.0 3.9 8.1 1971 ..................................................... 16.4 14.6 1.8 1972 ..................................................... 21.7 18.9 2.8 1973 ..................................................... 4.7 (14.8) 19.5 1974 ..................................................... 5.5 (26.4) 31.9 1975 ..................................................... 21.9 37.2 (15.3) 1976 ..................................................... 59.3 23.6 35.7 1977 ..................................................... 31.9 (7.4) 39.3 1978 ..................................................... 24.0 6.4 17.6 1979 ..................................................... 35.7 18.2 17.5 1980 ..................................................... 19.3 32.3 (13.0) 1981 ..................................................... 31.4 (5.0) 36.4 1982 ..................................................... 40.0 21.4 18.6 1983 ..................................................... 32.3 22.4 9.9 1984 ..................................................... 13.6 6.1 7.5 1985 ..................................................... 48.2 31.6 16.6 1986 ..................................................... 26.1 18.6 7.5 1987 ..................................................... 19.5 5.1 14.4 1988 ..................................................... 20.1 16.6 3.5 1989 ..................................................... 44.4 31.7 12.7 1990 ..................................................... 7.4 (3.1) 10.5 1991 ..................................................... 39.6 30.5 9.1 1992 ..................................................... 20.3 7.6 12.7 1993 ..................................................... 14.3 10.1 4.2 1994 ..................................................... 13.9 1.3 12.6 1995 ..................................................... 43.1 37.6 5.5 1996 ..................................................... 31.8 23.0 8.8 1997 ..................................................... 34.1 33.4 .7 1998 ..................................................... 48.3 28.6 19.7 1999 ..................................................... .5 21.0 (20.5) 2000 ..................................................... 6.5 (9.1) 15.6 2001 ..................................................... (6.2) (11.9) 5.7 2002 ..................................................... 10.0 (22.1) 32.1 2003 ..................................................... 21.0 28.7 (7.7)