Warren Buffet has assembled a vast array of businesses under the Berkshire Hathaway corporate structure. This article visualizes the Berkshire Hathaway structure blending the Berkshire segments with the disclosed subsidiaries.
Warren Buffet's Berkshire Hathaway corporate acquisition strategy has built one of the most valuable public companies over decades. Berkshire Hathaway lacks the complex share class structure of many companies.
Berkshire has two classes of stock: Class A (BRK.A) and Class B (BRK.B). There are several debt issuances, which this article ignores to focus the chart on the subsidiaries of Berkshire Hathaway.2
The subsidiaries for this corporate organizational chart appear in Exhibit 21 to Berkshire's 10-K5. We leverage the financial reporting segments to group and organize the subsidiaries.
Those reporting segments are: Insurance;6 Railroad; Utilities and Energy; and Manufacturing, Service, and Retailing.
To visualize Berkshire Hathaway's segments, we display them as entity nodes under the primary entity: Berkshire itself.7
Berkshire discloses under which segments a few subsidiaries operate. The majority of the legal entities in Exhibit 21 receive no discussion in the 10-K. We have supplemented the entities listed in Exhibit 21 with disclosed entities such as PacifiCorp8 and MidAmerican Energy Company9. This org chart of Berkshire Hathaway makes assumptions about where those legal entities operate.
The segments in this Berkshire Hathaway org chart organize the legal entities into collections, but are not legal entities themselves.
The entire org chart with all subsidiaries listed in Exhibit 21 displays a flat organization.
Given the number of entities and the lack of hierarchy, it is better to focus on the chart for each segment.
The Railroad segment is straightforward and dominated by Buffet's acquisition of BNSF in 200910.
We can zoom in to highlight the Utilities and Energy segment in context.
With the Utilities and Energy segment in focus, there is a clear view of the legal entities in the segment.
It is no secret that the insurance companies in Berkshire Hathaway provide the float11 which fuels much of Berkshire's investment growth.
The Insurance segment focus reveals an interesting potential for using segments to create corporate organizational charts.
Selecting the Insurance segment node reveals a hierarchical structure.
The top GEICO entity is a segment itself, grouping the GEICO entities together.
The widest ranging segment of Berkshire Hathaway is the Manufacturing, Service, and Retailing segment. This segment brings together businesses across several industrial sectors.
Even when we highlight the Manufacturing, Service, and Retailing segment, we need to zoom in to see the detail.
Like the GEICO example, selecting the Duracell segment reveals the substructure of the Manufacturing, Service, and Retailing segment.
Many of these entities likely have their own legal structure. With full access to the ownership structure, we could recreate the corporate hierarchy effectively. This article's sole objective is to show how the legal entities can be grouped in segments and subsegments, using a tool like Lextree.
Nothing in this article is to be construed as investment advice, nor as an accurate representation of the legal structure of any company, or ownership by a natural person. ↩︎
This article combines the two insurance segments ("underwriting" and "investment income"). ↩︎
"[Berkshire Hathaway Inc. to Acquire Burlington Northern Santa Fe Corporation (BNSF) for $100 Per Share in Cash and Stock],"(https://www.businesswire.com/news/home/20091103005847/en/Berkshire-Hathaway-Acquire-Burlington-Northern-Santa-Fe) BusinessWire, November 3, 2009. ↩︎