Warren E. Buffett is eager to make one point about Berkshire Hathaway, the conglomerate he controls: It’s a good American citizen.
When announcing Berkshire’s nearly $90 billion profit for 2021 on Saturday, the billionaire emphasized his annual letter to shareholders the larger role the company – whose businesses run from BNSF railroads to Geico insurance to See’s Candies – plays in the US economy.
It’s Buffett’s latest attempt to turn himself and his $713 billion company into one of America’s most successful businesses. Last year, Berkshire performed well as the company reported earnings of $89.8 billion, more than double that of 2020.
Income growth marks an uptick in the broader economy, as the United States and other countries recover from the depths of the pandemic.
Much of Berkshire’s results are also fueled by its massive portfolio, which is funded by the vast sums of money its insurance business generates and is its traditional source of financial strength. Those holdings include a 5.5% stake in Apple, making Mr. Buffett one of the iPhone maker’s top shareholders – and a beneficiary of the strong stock performance of the year. last.
The group has outperformed the S&P 500 stock index so far this year, as a diverse mix of business and investment sectors has benefited from the broad economic recovery. .
And the company has huge financial resources, including $144 billion in cash and equivalents, which will partly be used to buy back its own stock, helping to boost the company’s share price, with shares Class A notes closed on Friday at $479,345. Over the past two years, Berkshire has spent nearly $52 billion buying back its shares. (Mr. Buffett has turned down Berkshire’s perennial cash option, massive corporate acquisitions, saying “inside opportunities” offer better returns.)
But as the corporate giants have faced criticism over a range of issues, including how many taxpayers are too few, Mr. Buffett has a headache in his annual shareholder letter, according to tradition. The system is scrutinized by many of his fans, to underline how much Berkshire contributes to the national economy.
Take a tax example: Mr. Buffett noted that Berkshire paid $3.3 billion in federal taxes last year, as well as “significant” amounts in state and foreign taxes. By his account, that illustrates how much the company pays back to the US, calling the Treasury Department a “silent partner” in its business.
Mr. Buffett also praised the government’s role in facilitating his business. “Our shareholders should acknowledge – indeed trumpet – the fact that Berkshire’s prosperity has been boosted. strong because the company already operates in the US,” he wrote.
“However, without our American home, Berkshire would never have come close to becoming what it is today,” he wrote. “When you see the flag, say thank you.”
In his letter, Mr. Buffett also said that Berkshire owns and operates more US-based infrastructure assets than any other US company, a side that comes as the federal government prepares to spend $1 trillion to upgrade the country’s roads, bridges and other infrastructure. .
He called the BNSF railroad, one of Berkshire’s largest divisions, “the number one lifeblood of American commerce” and said it carried 535 million tons of freight over 143 million miles last year.
Saturday’s letter also seeks to ignite Berkshire’s climate credentials, as Mr. Buffett faces pressure from some investors to do more to improve both its environmental record and effective disclosure. its capacity there. Last year, the company faced a shareholder proposal, backed by a number of major investors, that will require more reporting on the response of operations to climate change. (This measure was defeated, in part because of Mr. Buffett’s substantial control of Berkshire stock.)
When discussing the BNSF, Mr. Buffett said the railway had helped reduce the country’s carbon footprint. “If many of the essential products BNSF transports were shipped by truck, then America’s carbon footprint would skyrocket,” he wrote.
And he argues that Berkshire Hathaway Energy, the company’s vast power arm, has outlined its goals and achievements in the renewable energy sector since 2007. A review of the company’s website, he said. I will show “the company has Long are making climate-conscious moves to match all its income. “
While the division “did not have solar or wind power in 2000,” he wrote, it was now “a leading force”. He added: “BHE has the management team, experience, capital and interest in the massive power projects our country needs.”
Mr. Buffett is set to continue another Berkshire tradition – an in-person annual meeting of the company’s shareholders – in late April, after hosting the event almost since the outbreak of the pandemic. The annual meeting, long known as the “Woodstock for capitalists,” typically draws tens of thousands of Berkshire shareholders to Omaha for the chance to hear directly from Mr. Buffett for hours.
https://www.nytimes.com/2022/02/26/business/dealbook/warren-buffett-berkshire-hathaway-letter-shareholders.html Berkshire Hathaway revived from the pandemic