Berkshire Hathaway Inc.

BRK.A – NYSE
Sell
Insurance: Standard/Specialty/Brokers

From To July 8, 2010

Changes (Previous) (Current) Blah-Shaped Recovery Not Priced in – Downgrading to Sell
Rating Hold Sell
Meyer Shields, FCAS (443) 224-1331 mshields@stifel.com
Target Price — —
Vincent M. DeAugustino (443) 224-1330 deaugustinov@stifel.com
FY10E EPS (Net) $5,764 $5,685
Arash Soleimani, CPA (443) 224-1377 soleimania@stifel.com
FY11E EPS (Net) $6,241 $6,097
FY10E Revenue (Net)
$122.37B $121.91B Company Update
FY11E Revenue (Net)
$126.84B $125.19B
We’re downgrading the shares of Berkshire Hathaway to Sell from Hold as
Stock Data our weak macroeconomic outlook implies poor 2H10 earnings. In this note
Price (07/07/10): $119,889.00 we outline the signs we see for a 2H10 economic retreat, and why BRK
52-Week Range: $125,252 – should outpace market declines.
$84,600
Market Cap.(mm): 197,457 • We think declining consumer confidence will slow consumer spending, as
Shr.O/S-Diluted (mm): 1.6 employment very slowly recovers. Additionally, a shrinking appetite for
Avg Daily Vol (3 Mo): 937 increased public spending should limit the size of any future economic
Dividend ($): $0.00 stimulus packages. Middle Eastern political instability could also drive real
Yield (%): 0.0% oil prices above $85 a barrel, further impacting consumers’ discretionary
Book Value/Share: 89,374 expenditures.
Stated Book: 89,374
Price/Stated Book: 134% • Aside from Berkshire’s operating units’ exposure to economic weakness,
Tangible Book: 59,799 its shares face a “double whammy,” as its equity portfolio and derivative
Price/Tangible Book: 200% positions expose it to additional book value pressure. Investors’ focus on
S&P Index: 1,060.27 Berkshire’s book value for valuation imply that its shares could outpace
broader market’s declines.

EPS (Net) 2009A 2010E 2011E • BRK’s YTD outperformance versus the S&P 500 is nearing an apex that
seems poised for a correction based on the shares' history.
Q1 $1,100 $1,390A $1,488
Q2 1,147 1,319 1,437 • Berkshire’s property/casualty reserve releases have recently ramped up,
but we see that as unsustainable in an enduring soft market, implying
Q3 1,325 1,459 1,564 additional earnings pressure as releases slow.
Q4 1,306 1,518 1,608
We’ve reduced our EPS estimates to reflect the expected challenging 2H10
FY Dec $4,878A $5,685 $6,097
environment, with modest economic growth expected in 2011. Our EPS
P/E 24.6x 21.1x 19.7x estimates move to $5,685 from $5,764 (2010E), and to $6,097 from $6,241
Revenue (Net) 2009A 2010E 2011E
(2011E). Our sum-of-the-parts valuation method suggests fair value for the
shares at about $104,000, about 13% downside from current levels.
FY Dec $112.49B $121.91B $125.19B

1 Year Price History for BRK/A

135,000
120,000
105,000
90,000
75,000
60,000
Q2 Q3 Q1 Q2 Q3
2010

Created by BlueMatrix

All relevant disclosures and certifications appear on pages 10 - 11 of this report. Page 1
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

(1) Economic Pullback

Investor and Consumer Expectations Poised for Disappointment: We think the market’s recent 13% pullback and
deteriorating consumer confidence reflect investors’ and consumers’ disillusioned hopes for a robust economic
recovery that looks less likely, primarily because of steadily high unemployment data. Our skepticism stems from
recent recessions' pattern of slowing employment recovery highlighted in Figure 1.
Figure 1: Employment Recovery Takes Increasingly Longer Each Time
75 $10,000

73

71

69
$1,000
Employment Ratio

SPX (Log Scale)

67

65

63
$100
61
?
59

57

55 $10

1E
1

1
M

M
70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04

06

08

10

12
19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20
Employment to Population Ratio (12MMA) SPX Price

Source: FactSet Research and BLS, Stifel Nicolaus analyst Barry Bannister’s format
Figure 2 traces the employment headcount trajectory for the current and recent recessions (i.e., headcounts indexed
to the point of initial employment decline), which illustrates the severity of the current employment environment, and the
likely protracted recovery timeline.
Figure 2: Employment Recovery Trajectories during Past Recessions
1970 1974 1981 1991 2001
101% 2008

100%

99% 2001

98%

97% 1990

96%

95% 1981

Current excl. census

94%
1974
93%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

Months Since R ecession Start 1970

Source: BLS, Stifel Nicolaus analyst Michael Widner’s Format

Page 2
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Given that we think the current employment situation will take longer than most consumers and many investors are
expecting, consumer confidence will probably suffer as expectations reconcile with reality. Figure 3 tracks the inverse
relationship between unemployment and consumer confidence.
Figure 3: Slower-than-Expected Employment Recovery Likely to Drag on Consumer Confidence
Unemployment Rate (SA)

13% 8%
11% 6%

Expenditures
4%
9%
2%
7%
0%
5% -2%
3% -4%
0

8
-8

-8

-8

-8

-8

-9

-9

-9

-9

-9

-0

-0

-0

-0

-0
n

n
Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju

Ju
Unemployment Rate Expenditures

Source: BLS and Consumer Conference Board, via FactSet Research, Inc.
In turn, weak consumer confidence tends to go hand-in-hand with weak personal expenditures (Figure 4), which would
otherwise be the key to a sustained economic recovery, as the “shot in the arm” of increased government spending
subsides.
Figure 4: Consumer Confidence and Personal Spending
8% 160
140
Y/Y Expenditures

6%
120
4% 100

CCI
2% 80
0% 60
40
-2% 20
-4% 0
1980M6

1982M6

1984M6

1986M6

1988M6

1990M6

1992M6

1994M6

1996M6

1998M6

2000M6

2002M6

2004M6

2006M6

2008M6

Personal Consumption Expenditures, (Bil. $, SAAR) CCI

Source: BLS and Consumer Conference Board, via FactSet Research, Inc.
The Chicken and the Egg: We think consumers are waiting for an employment recovery, while the employment
recovery is waiting on increased consumer spending. We’re concerned government spending won’t provide the same
relative stimulus strength as a temporary proxy for consumer spending this time around, for two reasons. First, even
though the drop in personal expenditures, and consequently GDP, is much deeper than in other recent recessions, the
increase in government spending is trailing off (Figure 5). Second, we don’t see much political appetite for additional
stimulus spending without either offsetting budget reductions, or at least definitive repayment plans. Although fiscal
responsibility is (temporarily) great for voter support, zero-sum spending initiatives do little to stimulate increased
spending (the recently failed Senate extension of unemployment benefits is a good example of a faltering appetite for
increased stimulus spending, in our view).

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Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Figure 5: Y/Y Personal Consumption and Government Spending (Treasury Outlays)

30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
2005Q1

2005Q2

2005Q3

2005Q4

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1
Treasury Outlays Personal Consumption & Gross Investment

Source: BLS, Department of Treasury

Further, in no recent recessions have households deleveraged to the same degree (Figure 6) as they have in this
recession. Even if we were to assume the U.S. government can keep issuing paper at ultra-low rates (in fact, we don’t)
to effectively jump-start the economy, we think consumers won’t take the lead in driving GDP growth, as favorable
financing terms and a housing bubble likely won't work this time around. We believe consumers' spending growth will
slow as they gradually work off the last decade of added leverage (regardless of low interest rates), which we think
widens the gap between investors’ expectations and economic reality.
Figure 6: Y/Y Debt Balance Changes
45% 15%

Household Debt Balance

Fed. Govt. Debt Balance

30% 10%

Change, Y/Y
Change, Y/Y

15% 5%

0% 0%

-15% -5%
2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

Federal Government Households

Source: BLS
The Oil Wild Card: While the U.S. is not directly dependent on Iranian oil, any Iranian/Israeli conflict intensification
could induce a worldwide oil supply shock. We think such a scenario could push real oil prices well above $85 a barrel.
Figure 7 illustrates that rising oil prices have foretold recessions, with oil above $85 per barrel leading to particularly
deep recessions (late 70’s and current recession). Rising oil prices deter GDP growth even without a shock, but the
situation could get far worse if geopolitical tensions worsen.

Page 4
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Figure 7: Real Crude Oil Prices vs. GDP Growth

$160 10%
$140 8%
$120 6%
$100 4%
$80 2%
$60 0%
$40 -2%
$20 -4%
$- -6%
Jan-75

Jan-77

Jan-79

Jan-81

Jan-83

Jan-85

Jan-87

Jan-89

Jan-91

Jan-93

Jan-95

Jan-97

Jan-99

Jan-01

Jan-03

Jan-05

Jan-07
Real Crude Oil $ per Barrel Real GDP Y/Y%
Source: EIA, and BLS
(2) Double-Dip's Double-Whammy Impact to Book Value
We’ve taken our EPS estimates down to $5,685 from $5,764 (2010E) and $6,097 from $6,241 (2011E). Using the
sum-of-the-parts calculator built into our model (available for clients to alter per their assumptions), our more
conservative earnings outlook and float-based valuation assumption changes produce an estimated fair value of
$104,000 (Table 1) - implying 13% downside from current levels.
Table 1: Sum-of-the-Parts Valuation
$ in millions, except per share data
Step Float Valuation Input Result
(1) Estimated "float" (Insurance Float at 3/31/10, Derivative Float at 12/31/09) 69,800.0
(2) After-tax "look-though" investment return on float 7.50%
(3) Projected "look-through" investment growth 2.0%

(4) Risk-free rate (R f) 3.85%

(5) Beta ( ) 0.90
(6) Equity Risk Premium (ERP) 6.75%
(7) Required rate of return (R f+ *ERP) 9.93%
(8) "Float" perpetuity = ((1)X(2))/((7)-(4)) 66,057

Operating companies 2011E After-tax Earnings Peer P/E Valuation

GEICO 472 10.0x 4,716
Other insurance/reinsurance (90) 7.0x (629)
Investment income (excluding float) 2,427 15.0x 36,405
Railroads, Utilities and Energy 3,334 12.8x 42,671
Manufacturing, Service and Retailing 1,356 13.0x 17,630
Finance and Financial Products 445 10.0x 4,453
Total valuation, operating companies 7,944 13.2x 105,246
Total valuation, float 66,057

Total 171,303

Shares outstanding (est. 2011) 1.651

Valuation, Class A 103,742

Valuation, Class B 69.16

Source: Stifel Nicolaus estimates

Page 5
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

In particular, we think that widespread institutional ownership of BRK's Class B shares means that the stock will
behave less like a cult stock, and more like a "normal" stock following earnings beats and misses - in other words, we
expect a much higher 'beta' than in the past.
Given Berkshire’s sizable investment portfolio and derivative positions, many investors use book value as a valuation
basis. In that vein, we adjust Berkshire’s investment portfolio (and book value) for an expected 8% market pullback in
2H10. Table 2 includes a +/-10% scale for its equity and derivative portfolios, while we assume its fixed income
portfolio remains unchanged, reflecting expected sustained low yields.
Table 2: Book Value Impact from Declining Equity Markets
$ millions except per share amounts
Base Case

Equity Market Price Change Assumption Range

Equity Related Investments: 2Q10E Value -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Equity securities $51,863 -$5,186 -$4,149 -$3,112 -$2,075 -$1,037 $0 $1,037 $2,075 $3,112 $4,149 $5,186
Derivatives (Assuming no F/X change) -$7,947 -568 -429 -291 -152 -14 0 263 401 540 678 817
GS Warrants 707 -571 -457 -342 -228 -114 0 114 228 342 457 571

Fixed Income (No Price Change):

Fixed Income and Other 60,121 0 0 0 0 0 0 0 0 0 0 0

Total BVPS Impact 112,691 -2,496 -1,987 -1,478 -969 -460 0 558 1,067 1,576 2,085 2,594

Price Change w/ 1.3x P/BVPS -3,245 -2,583 -1,921 -1,260 -598 0 726 1,387 2,049 2,711 3,373
% of Current -2.8% -2.2% -1.7% -1.1% -0.5% 0.0% 0.6% 1.2% 1.8% 2.3% 2.9%

Source: Stifel Nicolaus estimates

(3) Relative Performance Correction
We think BRK's 13% outperformance since early June leaves the shares poised for a correction. YTD, the shares have
outperformed the S&P by about 26%; over the past 20 years, 30% annual outperformance has typically been a turning
point for a correction (Figure 8). Additionally, while we've speculated that Berkshire should be a perpetual Hold based
on its size and diversification, Figure 8 contradicts this thesis, highlighting that the shares either outperform or
underperform the S&P 500 by at least 10% about 75% of the time.
Figure 8: Annual BRK Relative Performance
75% of Years' Relative Performance > +/- 10%
50% $160,000
Relative Performance

40% $140,000
30%
$120,000

BRK.A Price
20%
10% $100,000
0% $80,000
-10% $60,000
-20%
-30% $40,000
-40% $20,000
-50% $0
2009 YTD
12/31/1991
12/31/1992
12/31/1993
12/30/1994
12/29/1995
12/31/1996
12/31/1997
12/31/1998
12/31/1999
12/29/2000
12/31/2001
12/31/2002
12/31/2003
12/31/2004
12/30/2005
12/29/2006
12/31/2007
12/31/2008
12/31/2009

BRK Relative Performance +10% Threshold

-10% Threshold BRK.A Price

Source: FactSet Research Systems, Inc.

Page 6
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Table 3 shows Berkshire’s performance vs. the S&P since several key dates. Most recently the shares have
outperformed the S&P since the beginning of June without much of a catalyst, putting it at risk for a correction, in our
view.
Table 3: Relative Performance from Key Dates
Event Date BRK.A SPX Diff
Start of Relative Outperformance Resurgence June 7th, 2010 14.2% 0.9% 13.3%
Recent Market High April 23rd, 2010 1.3% -12.9% 14.2%
BRK Addition to S&P Announcement January 26th, 2010 17.8% -2.9% 20.8%
Year Ago July 7th, 2009 37.5% 20.3% 17.2%
BRK Bear Market Low March 5th, 2009 65.6% 55.3% 10.3%
Source: FactSet Research Systems, Inc.
Estimate Changes
Table 4 includes a summary of our earnings model and estimate changes.
Table 4: Model and Estimate Change Summary
($ in millions, except per share data) Previous Estimates % Change
2008 2009 2010E 2011E 2010E 2011E 2010E 2011E
Revenues
Insurance and Other: $95,698 $92,780 $92,572 $93,172 $92,649 $94,118 0% -1%
Utilities and Energy: 13,971 11,443 24,448 27,535 24,809 28,217 -1% -2%
Finance and Financial Products: (1,883) 8,270 4,891 4,483 4,907 4,500 0% 0%
Total revenues 107,786 112,493 121,910 125,190 122,365 126,835 0% -1%

Cost and expenses

Insurance and Other: 85,044 87,219 82,531 84,290 82,515 85,052 0% -1%
Utilities and Energy: 11,008 9,915 20,175 22,406 20,432 22,899 -1% -2%
Finance and Financial Products: 4,160 3,807 3,759 3,765 3,774 3,780 0% 0%
Total Costs and Expenses 100,212 100,941 106,465 110,461 106,721 111,731 0% -1%

Pretax operating income 15,035 10,765 13,716 14,729 13,915 15,104 -1% -2%
Income tax on operating income 4,794 2,812 3,698 4,242 3,767 4,378 -2% -3%
Minority shareholders' interests 602 386 479 420 479 420 0% 0%
Operating income 9,639 7,567 9,540 10,067 9,669 10,306 -1% -2%

W eighted average common shares outstanding (Class A basis) 1.549 1.551 1.636 1.651 1.636 1.651 0% 0%

Operating EPS $6,223 $4,878 $5,685 $6,097 $5,764 $6,241 -1% -2%
Non-operating EPS ($2,999) $313 $973 $121 $973 $121 0% 0%
Net EPS $3,224 $5,190 $6,658 $6,218 $6,737 $6,363 -1% -2%

Book value per share $70,530 $84,487 $90,883 $96,914 $93,702 $99,871 -3% -3%
TTM Operating ROE 6.5% 6.5% 6.4% 6.5% 6.4% 6.5% 1% 1%
TTM Net ROE 6.9% 6.9% 7.5% 6.6% 7.5% 6.6% 1% 1%

Source: Company reports and Stifel Nicolaus estimates

Consistent with our unenthusiastic 2H10 outlook, and slower anticipated 2011 economic growth, we’ve adjusted our
estimates for many of Berkshire’s non-insurance subsidiaries' revenues and earnings. While its insurance businesses
are typically more insulated from macroeconomic fluctuation, recent reserve release increases (Figure 9) are probably
unsustainable (reserve redundancies tend to fade as soft markets persist), leading to additional earnings pressure as
reserve releases slow.

Page 7
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Figure 9: Recent Reserve Releases Likely to Decelerate as Soft Market Persists

$ in millions
a a a a a a a a a a a a
a
2,000 a a a a a a a a a a a
a a a a a a a a a a a a
a a 1,453
a a a a a a a a a a
1,500
a a a a a a a a a a a a
a a a a a a a a a a a a
1,026
a a a a a a a a a a a a
1,000
a a a a a a a a a a a a
a a a a a a a a a a a a
a500 a a a a a a a a a a a
a a a a 193 a a a a a a a a
60 20 55 46
a a a a a a a a a a a a
0
a a a(20) a a a (11) a a a a a a
(126) (96) (88)
a (229)
a a a a (196)a a ( 204)( 205) a(204)
(211) a (139) a (163) a a
(296) (287)
a(500) a a a a a (314) a a (391)(418)(311)
(388) a a a
(406) a
(449)
(502)
a a a a a a a a a (587) a a a
a a a a a a a a a a a a
(1,000) (892)
a a a a a a a a a a a a
a a a a a a a a a a a a
(1,270)
a
(1,500) a a a a a a a a a a a
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
a a a a a a a a a a a a
a a a a a a a a a a a a
a a a a a a a a a a a a
a a a a a a a a a a a a
Source: Highline data and Stifel Nicolaus analysis
Company Description
Berkshire Hathaway Inc. is the holding company of a diverse group of businesses including personal and commercial
insurance and reinsurance, energy generation, transmission, and distribution, consumer and commercial lending, and
an extensive array of manufacturing, retail, and service businesses. Its primary strategy is to grow earnings through
acquisitions.

Page 8
Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Berkshire Hathaway Inc. 6,223 4,878 5,685 6,097 1,100 1,147 1,325 1,306 1,390 1,319 1,459 1,518 1,488 1,437 1,564 1,608
6,223 4,878 5,739 6,240 1,100 1,147 1,325 1,306 1,262 1,415 1,513 1,549 1,433 1,495 1,626 1,686
$ in millions, except per share data 0 0 (53) (143) 0 0 0 0 128 (97) (54) (31) 55 (58) (62) (79)
2008 2009 2010E 2011E 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E 1Q11E 2Q11E 3Q11E 4Q11E
Revenues
Insurance and Other:
Insurance premiums earned $25,525 $27,884 $27,167 $26,902 $8,183 $6,485 $6,595 $6,621 $7,426 $6,446 $6,672 $6,623 $6,478 $6,614 $6,921 $6,888
Sales and service revenues 65,854 62,555 59,290 61,242 14,310 15,587 16,178 16,480 15,531 14,462 14,983 14,314 16,086 14,928 15,468 14,760
Interest, dividend, and other investment income 4,966 5,245 4,800 5,029 1,374 1,454 1,361 1,056 1,295 1,143 1,168 1,193 1,219 1,244 1,270 1,296
Investment gains/(losses) (647) 251 1,315 0 (370) 33 115 473 1,315 0 0 0 0 0 0 0
Other-than-temporary impairments of investments 0 (3,155) 0 0 (3,096) (30) (25) (4) 0 0 0 0 0 0 0 0
Total, insurance and other 95,698 92,780 92,572 93,172 20,401 23,529 24,224 24,626 25,567 22,051 22,823 22,131 23,783 22,786 23,659 22,944

Railroads, Utilities and Energy:

Operating revenues 12,668 11,204 24,243 27,358 2,969 2,502 2,741 2,992 5,010 5,922 6,444 6,868 7,160 6,222 6,799 7,177
Other 1,303 239 205 177 (20) 153 71 35 40 55 70 40 12 55 70 40
Total, utilities and energy 13,971 11,443 24,448 27,535 2,949 2,655 2,812 3,027 5,050 5,976 6,514 6,907 7,172 6,277 6,869 7,217

Finance and Financial Products:

Interest income 1,790 1,886 1,444 1,390 362 419 420 685 401 348 348 348 348 348 348 348
Investment gains/(losses) 7 67 3 0 0 (30) (5) 102 3 0 0 0 0 0 0 0
Derivative gains/(losses) (6,821) 3,624 411 0 (1,517) 2,357 1,732 1,052 411 0 0 0 0 0 0 0
Other 3,141 2,693 3,033 3,093 589 677 721 706 605 722 769 937 635 734 791 932
Total, finance and financial products (1,883) 8,270 4,891 4,483 (566) 3,423 2,868 2,545 1,420 1,070 1,116 1,285 983 1,081 1,139 1,280

Total Revenues 107,786 112,493 121,910 125,190 22,784 29,607 29,904 30,198 32,037 29,097 30,454 30,322 31,938 30,144 31,667 31,441

Cost and expenses

Insurance and Other:
Insurance losses and LAE 16,259 18,251 17,352 18,004 6,014 4,072 4,125 4,040 4,186 4,323 4,500 4,343 4,335 4,453 4,678 4,539
Life, annuity and health insurance benefits 1,840 1,838 1,492 0 508 403 435 492 1,492 0 0 0 0 0 0 0
Insurance underwriting expenses 4,634 6,236 7,430 8,310 1,348 1,885 1,475 1,528 1,403 1,943 2,004 2,080 2,034 2,009 2,090 2,177
Cost of sales and services 54,103 52,647 48,709 50,099 11,958 13,128 13,614 13,947 12,906 11,833 12,243 11,727 13,210 12,205 12,617 12,068
Selling, general and administrative expenses 8,052 8,117 7,189 7,486 1,963 2,073 2,015 2,066 1,839 1,768 1,829 1,752 1,974 1,824 1,885 1,803
Interest expense 156 130 360 390 48 38 29 15 67 98 98 98 98 98 98 98
Total, insurance and other 85,044 87,219 82,531 84,290 21,839 21,599 21,693 22,088 21,893 19,965 20,674 19,999 21,650 20,587 21,368 20,686

Railroads, Utilities and Energy:

Cost of sales and operating expenses 9,840 8,739 18,262 20,318 2,355 1,955 2,080 2,349 3,832 4,513 4,768 5,149 5,298 4,641 5,014 5,365
Interest expense 1,168 1,176 1,913 2,088 291 298 291 296 347 522 522 522 522 522 522 522
Total, utilities and energy 11,008 9,915 20,175 22,406 2,646 2,253 2,371 2,645 4,179 5,035 5,290 5,671 5,820 5,163 5,536 5,887

Finance and Financial Products:

Interest expense 639 686 723 726 149 174 174 189 179 181 181 181 181 181 181 181
Other 3,521 3,121 3,036 3,040 693 790 827 811 688 751 789 808 702 749 794 794
Total, finance and financial products 4,160 3,807 3,759 3,765 842 964 1,001 1,000 867 932 971 989 883 931 975 976

Total Costs and Expenses 100,212 100,941 106,465 110,461 25,327 24,816 25,065 25,733 26,939 25,931 26,935 26,659 28,354 26,681 27,879 27,548

Earnings before income taxes and minority interests 7,574 11,552 15,445 14,729 (2,543) 4,791 4,839 4,465 5,098 3,166 3,518 3,663 3,584 3,463 3,788 3,893
Income taxes 1,978 3,538 4,303 4,242 (1,014) 1,520 1,601 1,431 1,336 893 1,014 1,060 1,024 986 1,100 1,132
Earnings from equity method investments 0 427 200 200 83 113 111 120 50 50 50 50 50 50 50 50
Net earnings 5,596 8,441 11,343 10,687 (1,446) 3,384 3,349 3,154 3,812 2,323 2,554 2,653 2,610 2,528 2,738 2,811

Earnings attributable to noncontrolling interests 602 386 479 420 88 89 111 98 179 100 100 100 105 105 105 105
Net earnings attributable to Berkshire Hathaway 4,994 8,055 10,864 10,267 (1,534) 3,295 3,238 3,056 3,633 2,223 2,454 2,553 2,505 2,423 2,633 2,706

Pretax operating income 15,035 10,765 13,716 14,729 2,440 2,461 3,022 2,842 3,369 3,166 3,518 3,663 3,584 3,463 3,788 3,893
Income tax on operating income 4,794 2,812 3,698 4,242 648 592 855 717 968 893 1,014 1,060 1,024 986 1,100 1,132
Minority shareholders' interests 602 386 479 420 88 89 111 98 179 100 100 100 105 105 105 105
Operating income 9,639 7,567 9,540 10,067 1,704 1,780 2,056 2,027 2,222 2,173 2,404 2,503 2,455 2,373 2,583 2,656

Weighted average common shares outstanding (Class A basis) 1.549 1.551 1.636 1.651 1.549 1.552 1.552 1.552 1.59917 1.648 1.648 1.649 1.650 1.651 1.652 1.652

Operating EPS $6,223 $4,878 $5,685 $6,097 $1,100 $1,147 $1,325 $1,306 $1,390 $1,319 $1,459 $1,518 $1,488 $1,437 $1,564 $1,608
Non-operating EPS (2,999) 313 973 121 (2,090) 976 762 665 882 30 30 30 30 30 30 30
Net EPS $3,224 $5,190 $6,658 $6,218 ($990) $2,123 $2,087 $1,969 $2,272 $1,349 $1,489 $1,548 $1,518 $1,467 $1,594 $1,638

Book value per share $70,530 $84,487 $90,883 $96,914 $66,248 $73,806 $81,247 $84,487 $89,374 $87,936 $89,380 $90,883 $92,356 $93,777 $95,324 $96,914
TTM Operating ROE 6.5% 6.5% 6.4% 6.5% 8.3% 7.9% 7.8% 6.5% 6.5% 6.4% 6.3% 6.4% 6.4% 6.5% 6.5% 6.5%
TTM Net ROE 6.9% 6.9% 7.5% 6.6% 2.2% 2.6% 4.5% 6.9% 10.7% 9.2% 8.2% 7.5% 6.6% 6.6% 6.6% 6.6%
Source: Company reports and Stifel Nicolaus estimates

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Berkshire Hathaway Inc. (BRK.A) July 8, 2010

Important Disclosures and Certifications

I, Meyer Shields, certify that the views expressed in this research report accurately reflect my personal views
about the subject securities or issuers; and I, Meyer Shields, certify that no part of my compensation was, is,
or will be directly or indirectly related to the specific recommendation or views contained in this research
report.

Rating and Price Target History for: Berkshire Hathaway Inc. (BRK/A) as of 07-02-2010

10/01/09
I:H:NA

175,000

150,000

125,000

100,000

75,000

50,000
Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3
2008 2009 2010

Rating Key

B - Buy UR - Under Review

H - Hold NR - No Rating
S - Sell NA - Not Applicable
I - Initiation RS - Rating Suspended
D - Dropped

Created by BlueMatrix

For a price chart with our ratings and target price changes for BRK.A go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=BRK.A
Stifel, Nicolaus & Company, Inc.'s research analysts receive compensation that is based upon (among other factors)
Stifel Nicolaus' overall investment banking revenues.

Our investment rating system is three tiered, defined as follows:

BUY -We expect this stock to outperform the S&P 500 by more than 10% over the next 12 months. For higher-yielding
equities such as REITs and Utilities, we expect a total return in excess of 12% over the next 12 months.

HOLD -We expect this stock to perform within 10% (plus or minus) of the S&P 500 over the next 12 months. A Hold
rating is also used for those higher-yielding securities where we are comfortable with the safety of the dividend, but
believe that upside in the share price is limited.

SELL -We expect this stock to underperform the S&P 500 by more than 10% over the next 12 months and believe the
stock could decline in value.
Of the securities we rate, 43% are rated Buy, 54% are rated Hold, and 3% are rated Sell.
Within the last 12 months, Stifel, Nicolaus & Company, Inc. or an affiliate has provided investment banking services for
17%, 11% and 8% of the companies whose shares are rated Buy, Hold and Sell, respectively.

Additional Disclosures
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please see our stand-alone company reports and notes for all Buy-rated stocks.

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securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the

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Berkshire Hathaway Inc. (BRK.A) July 8, 2010

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