Berkshire Hathaway 2002 Annual Report Download - page 37

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Notes to Consolidated Financial Statements (Continued)
(2) Significant business acquisitions (Continued)
MiTek Inc. (MiTek)
On July 31, 2001, Berkshire acquired a 90% interest in MiTek for approximately $400 million. Existing MiTek
management acquired the remaining 10% interest. MiTek produces steel connector products, design engineering
software and ancillary services for the building components market.
XTRA Corporation (XTRA)
On September 20, 2001, Berkshire acquired all of the outstanding shares of XTRA for approximately $578
million. XTRA is a leading operating lessor of transportation equipment, including over-the-road trailers, marine
containers and intermodal equipment.
Berkshire completed five acquisitions in 2000. Aggregate consideration paid for the five business acquisitions
consummated in 2000 totaled $2,370 million, consisting of $2,146 million in cash and the remainder in Berkshire Class A
and Class B common stock. Information concerning these acquisitions follows.
On February 18, 2000, Wesco Financial Corporation, an 80.1% owned subsidiary of Berkshire, acquired CORT
Business Services Corporation, a leading national provider of rental furniture, accessories and related services in the
rent-to-rent segment of the furniture industry. On July 3, 2000, Berkshire acquired Ben Bridge Jeweler, a leading
operator of upscale jewelry stores based in major shopping malls in the Western U.S. On August 1, 2000, Berkshire
acquired Justin Industries, Inc., a leading manufacturer and producer of face brick, concrete masonry products and
ceramic and marble floor and wall tile (Acme Brick) and a leading manufacturer of Western footwear under a number of
brand names (Justin Brands). On August 8, 2000, Berkshire acquired U.S. Investment Corporation, the parent of the
United States Liability Insurance Group, one of the premier U.S. writers of specialty insurance. On December 18, 2000,
Berkshire acquired Benjamin Moore & Co., a formulator, manufacturer and retailer of a broad range of architectural and
industrial coatings, available principally in the U.S. and Canada.
The results of operations for each of the entities acquired are included in Berkshire's consolidated results of
operations from the effective date of each acquisition. The following table sets forth certain unaudited consolidated
earnings data for 2002 and 2001, as if each of the acquisitions discussed above were consummated on the same terms at
the beginning of each year. Dollars are in millions, except per share amounts.
2002 2001
Total revenues ............................................................................................................................ $43,634 $42,120
Net earnings ............................................................................................................................... 4,402 997
Earnings per equivalent Class A common share........................................................................ 2,870 651
(3) Investments in MidAmerican Energy Holdings Company
On March 14, 2000, Berkshire acquired 900,942 shares of common stock and 34,563,395 shares of convertible
preferred stock of MidAmerican Energy Holdings Company ("MidAmerican") for $35.05 per share, or approximately
$1.24 billion in the aggregate. During 2002, Berkshire acquired an additional 6,700,000 shares of convertible preferred
stock for $402 million. Such investments currently give Berkshire about a 9.7% voting interest and an 83.4% economic
interest in the equity of MidAmerican (80.2% on a fully diluted basis). Berkshire and certain of its subsidiaries have
also acquired approximately $1,728 million of 11% non-transferable trust preferred securities, of which $455 million
were acquired in 2000 and $1,273 million were acquired in 2002. Mr. Walter Scott, Jr., a member of Berkshire's Board
of Directors, controls approximately 86% of the voting interest in MidAmerican.
MidAmerican is a U.S. based global energy company whose principal businesses are regulated electric and natural
gas utilities, regulated interstate natural gas transmission and electric power generation. Through its subsidiaries it
owns and operates a combined electric and natural gas utility company in the U.S., two natural gas pipeline companies
in the U.S., two electricity distribution companies in the United Kingdom and a diversified portfolio of domestic and
international electric power projects. It also owns the second largest residential real estate brokerage firm in the U.S.
While the convertible preferred stock does not vote generally with the common stock in the election of directors, the
convertible preferred stock gives Berkshire the right to elect 20% of MidAmericans Board of Directors. The convertible
preferred stock is convertible into common stock only upon the occurrence of specified events, including modification or
elimination of the Public Utility Holding Company Act of 1935 so that holding company registration would not be
triggered by conversion. Additionally, the prior approval of the holders of convertible preferred stock is required for
certain fundamental transactions by MidAmerican. Such transactions include, among others: a) significant asset sales or
dispositions; b) merger transactions; c) significant business acquisitions or capital expenditures; d) issuances or repurchases
of equity securities and e) the removal or appointment of the Chief Executive Officer. Through its investments in common
and convertible preferred stock of MidAmerican, Berkshire has the ability to exercise significant influence on the
operations of MidAmerican.