Berkshire Hathaway 1998 Annual Report Download - page 2

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Business Activities
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in
a number of diverse business activities. The most important of these is the property
and casualty insurance business conducted on both a direct and reinsurance basis
through a number of subsidiaries. Included in this group of subsidiaries is GEICO
Corporation, the sixth largest auto insurer in the United States and General Re
Corporation, one of the four largest reinsurers in the world.
Investment portfolios of insurance subsidiaries include meaningful equity
ownership percentages of other publicly traded companies. Investments in excess of
5% of the investees outstanding capital stock at the end of 1998 include approximately
11% of the outstanding capital stock of American Express Company, approximately
8% of the capital stock of The Coca-Cola Company, approximately 9% of the capital
stock of Federal Home Loan Mortgage Corporation ("Freddie Mac"), approximately
8½% of the capital stock of The Gillette Company, and approximately 17% of the
capital stock of The Washington Post Company. Much information about these
publicly-owned companies is available, including information released from time to
time by the companies themselves.
Other business activities conducted by non-insurance subsidiaries include
publication of a daily and Sunday newspaper in Western New York (Buffalo News),
manufacture and sale of boxed chocolates and other confectionery products (See's
Candies), diversified manufacturing and distribution (managed by Scott Fetzer and
whose principal products are sold under the Kirby and Campbell Hausfeld brand
names), retailing of home furnishings (Nebraska Furniture Mart, R.C. Willey Home
Furnishings and Star Furniture Company), manufacture, import and distribution of
footwear (H.H. Brown Shoe Company, Lowell Shoe, Inc. and Dexter Shoe Company),
retailing of fine jewelry (Borsheim's and Helzberg's Diamond Shops), training to
operators of aircraft and ships throughout the world (FlightSafety International),
providing fractional ownership programs for general aviation aircraft (Executive Jet),
and licensing and servicing a system of approximately 5,900 Dairy Queen stores.
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.
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