Berkshire Hathaway 2006 Annual Report Download - page 2

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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,
utilities and energy, finance, manufacturing, services and retailing. Included in the group of
subsidiaries that underwrite property and casualty insurance and reinsurance is GEICO, one of the
four largest auto insurers 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, Medical Protective
Company, Applied Underwriters, U.S. Liability Insurance Company, Central States Indemnity
Company, Kansas Bankers Surety, Cypress Insurance Company and several other subsidiaries
referred to as the “Homestate Companies.”
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 and Yorkshire Electric; 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). Shaw Industries is
the world’ s largest manufacturer of tufted broadloom carpet. McLane Company is a wholesale
distributor of groceries and nonfood items to convenience stores, wholesale clubs, mass
merchandisers, quick service restaurants and others.
Numerous business activities are conducted through Berkshire’ s other manufacturing,
services and retailing subsidiaries. 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, Garan, Fechheimer, H.H. Brown Shoe Group and
Justin Brands manufacture, license and distribute apparel and footwear under a variety of brand
names. FlightSafety International provides training of aircraft and ship 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.
Borsheim’s, Helzberg Diamond Shops and Ben Bridge Jeweler are retailers of fine jewelry.
In addition, other manufacturing, service and retail businesses include: Buffalo News, a
publisher of a daily and Sunday newspaper; 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, the principal products are sold under the Kirby
and Campbell Hausfeld brand names; Albecca, 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
6,000 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;
and Iscar Metalworking Companies, an industry leader in the metal cutting tools business.
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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