Report to shareholders

Berkshire 's Corporate Performance

It is necessary to outline that in 2006 the performance of Berkshire Corporation was rather successful . Their net worth was about 16 .9 billions and , therefore , the values of Class A and Class B stocks significantly increased . Actually , their value increased up to 18 .4 According to company 's accounting statistics the book values has grown up to 70 .281 over the last 42 years , whereas a rate of 21 .4 compounded annually . Warren Buffet , the chairmen of Berkshire Corporation , claims that the mentioned 16 .9 billion was

a record for a one-year gain in net worth . Such figure hasn 't been mentioned by any American businesses Buffet admits that Charlie Munger is his partner as at the same time vice chairmen and he helped to turn Berkshire into big business with 27 ,000 employees and annual revenues of about 100 billion

Speaking about yardsticks , Buffet notes that two statistics are of real importance for the company . The first statistics aims at evaluating the amount of investment , cash-equivalents and cash that the company owns on a per-share basis . Per-share investment in 1965 were 4 , in 1975 - 159 in 1985 - 2 ,407 , in 1995 - 21 ,817 and , finally , in 2006 - 80 ,636 Therefore , swift growth is apparent and can 't be neglected or ignored Summing up , the compound growth rate during 1965-2006 was 27 .5 , whereas compound growth rate during 1995-2006 was only 12 .6 . Buffet writes that the company focused more on acquisitions of operating businesses Nevertheless , the company had to use their funds to purchase acquisitions and , thus , the investment growth decrease , though the gains in pre-taxed earnings increased . Thus , the second statistics shows pre-tax earnings per-share from the non-insurance businesses to show the company 's growth . Pre-tax earnings per share in 1965 were 4 , in 1975 - 4 , in 1985 - 52 , in 1985 - 52 , in 1995 - 175 and , finally , in 2006 - 3 ,625 . Summing up the compound growth rate during 1965-2006 was 17 .9 and in 1995-2006 compound growth rate increased up to 31 .7

Speaking about acquisitions Buffet writes that in 2006 the company completed three acquisitions spending 6 billion - Applied Under PacifiCorp and Business Wire . Berkshire Corporation also made tuck-in ' acquisitions 2006 at Fruit of the Loom , Shaw and Clayton MiTek , and CTB . However , the largest purchases were made by Fruit that bought Russell Corp , a famous producer of athletic apparel and uniforms Then it Fruit bought intimate apparel business of VF Corp and , thus together the acquisitions added up to 2 .2 billion to company 's sales bringing about 23 ,000 new employees

The next moment to mention is that in 2005 Berkshire decided to enter huge retroactive reinsurance contract . The company agreed that it was necessary to implement policy which would protect insurer against possible losses that are likely to happen or yet unknown . Speaking about Lloyd , Buffet argues that no company appeared able to estimate company 's liabilities in one place because it would provide certain advantages for example...