Berkshire Hathaway Corporate Structure

Berkshire Hathaway Corporate Structure

| Mark Little | Legal Entity Management

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.

Corporate Structure of Berkshire Hathaway

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.

The Basic Structure of Berkshire

This article builds up a visual display of the Berkshire Hathaway corporate structure starting with basic parent information.1 We are focused on the subsidiaries.

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

Berkshire discloses the ownership interests of several individuals, including Warren Buffet's Class A ownership percentage, in its 10-K3 and 10-Q4 filings.

Disclosed owners of Class A and Class B Berkshire shares
Disclosed owners of Class A and Class B Berkshire shares

Reporting Segments

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.

Berkshire Hathaway 10-K reporting segments
Berkshire Hathaway 10-K reporting segments

To visualize Berkshire Hathaway's segments, we display them as entity nodes under the primary entity: Berkshire itself.7

Org chart of Berkshire Hathaway segments
Org chart of Berkshire Hathaway segments

Berkshire Hathaway Subsidiaries

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.

Berkshire Hathaway subsidiaries grouped by segment
Berkshire Hathaway subsidiaries grouped by segment

Given the number of entities and the lack of hierarchy, it is better to focus on the chart for each segment.

Berkshire Hathaway Railroad Segment

The Railroad segment is straightforward and dominated by Buffet's acquisition of BNSF in 200910.

Berkshire Hathaway Railroad segment
Berkshire Hathaway Railroad segment

Berkshire Hathaway Utilities and Energy Segment

We can zoom in to highlight the Utilities and Energy segment in context.

Berkshire Hathaway Utilities and Energy segment in context
Berkshire Hathaway 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.

Utilities and Energy segment in focus
Utilities and Energy segment in focus

Berkshire Hathaway Insurance 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.

Berkshire Hathaway Insurance segment
Berkshire Hathaway Insurance segment

Selecting the Insurance segment node reveals a hierarchical structure.

Berkshire Hathaway Insurance segment structure
Berkshire Hathaway Insurance segment structure

The top GEICO entity is a segment itself, grouping the GEICO entities together.

GEICO organizational chart in Insurance segment
GEICO organizational chart in Insurance segment

Berkshire Hathaway Manufacturing, Service, and Retailing Segment

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.

Berkshire Hathaway Manufacturing, Service, and Retailing Segment in focus
Berkshire Hathaway Manufacturing, Service, and Retailing Segment in focus

Like the GEICO example, selecting the Duracell segment reveals the substructure of the Manufacturing, Service, and Retailing segment.

Duracell org chart in the Manufacturing, Service, and Retailing segment
Duracell org chart in the Manufacturing, Service, and Retailing segment

Conclusion

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.


  1. "Top Berkshire Hathaway Shareholders," updated July 15, 2020, Investopedia. ↩︎

  2. 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. ↩︎

  3. Berkshire Hathaway, Inc. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, for the Fiscal Year Ended 2019 (10-K). ↩︎

  4. Berkshire Hathaway, Inc. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, for the Quarterly Period Ended March 31, 2019 (10-Q). ↩︎

  5. Exhibit 21 to Berkshire's 10-K. ↩︎

  6. This article combines the two insurance segments ("underwriting" and "investment income"). ↩︎

  7. The product used to produce these charts is Lextree from Berkman Solutions. The user name "Frank Keller" is a fictional user for demonstration purposes. ↩︎

  8. PacifiCorp ↩︎

  9. MidAmerican Energy Company ↩︎

  10. "[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. ↩︎

  11. "Warren Buffett Explains The Genius of the Float," National Public Radio, March 1, 2010 ↩︎

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