Berkshire Hathaway 2002 Annual Report Download - page 12

11
(in millions) Berkshire’s Share
of Net Earnings
(after taxes and
Pre-Tax Earnings Minority interests)
2002 2001 2002 2001
Operating Earnings:
Insurance Group:
Underwriting – General Re.................................... $(1,393) $(3,671) $(930) $(2,391)
Underwriting – Berkshire Group ........................... 534 (647) 347 (433)
Underwriting – GEICO.......................................... 416 221 271 144
Underwriting – Other Primary............................... 32 30 20 18
Net Investment Income.......................................... 3,050 2,824 2,096 1,968
Apparel(1) .................................................................. 229 (33) 156 (28)
Building Products(2) .................................................. 516 461 313 287
Finance and Financial Products Business................. 1,016 519 659 336
Flight Services .......................................................... 225 186 133 105
MidAmerican Energy (80% owned)......................... 613 565 359 230
Retail Operations ...................................................... 166 175 97 101
Scott Fetzer (excluding finance operation)............... 129 129 83 83
Shaw Industries(3)...................................................... 424 292 258 156
Other Businesses....................................................... 256 212 160 131
Purchase-Accounting Adjustments........................... (119) (726) (65) (699)
Corporate Interest Expense....................................... (86) (92) (55) (60)
Shareholder-Designated Contributions..................... (17) (17) (11) (11)
Other......................................................................... 19 25 12 16
Operating Earnings...................................................... 6,010 453 3,903 (47)
Capital Gains from Investments .................................. 603 1,320 383 842
Total Earnings – All Entities ....................................... $6,613 $1,773 $4,286 $ 795
(1) Includes Fruit of the Loom from April 30, 2002 and Garan from September 4, 2002.
(2) Includes Johns Manville from February 27, 2001 and MiTek from July 31, 2001.
(3) From date of acquisition, January 8, 2001.
Here’ s a summary of major developments at our non-insurance businesses:
• MidAmerican Energy’ s earnings grew in 2002 and will likely do so again this year. Most of the
increase, both present and expected, results from the acquisitions described earlier. To fund these,
Berkshire purchased $1,273 million of MidAmerican junior debt (bringing our total holdings of
these 11% obligations to $1,728 million) and also invested $402 million in a “common-equivalent”
stock. We now own (on a fully-diluted basis) 80.2% of MidAmerican’ s equity. MidAmerican’ s
financial statements are presented in detail on page 37.
• Last year I told you of the problems at Dexter that led to a huge loss in our shoe business. Thanks to
Frank Rooney and Jim Issler of H.H. Brown, the Dexter operation has been turned around. Despite
the cost of unwinding our problems there, we earned $24 million in shoes last year, an upward swing
of $70 million from 2001.
Randy Watson at Justin also contributed to this improvement, increasing margins significantly while
trimming invested capital. Shoes are a tough business, but we have terrific managers and believe
that in the future we will earn reasonable returns on the capital we employ in this operation.