BRKA 251010 - BC

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EQUITY RESEARCH Financial Services | U.S. Insurance/Non-Life | 25 October 20

BERKSHIRE HATHAWAY INC.

Warren Buffett Names One of HisInvestment Manager SuccessorsWarren Buffetts succession plans are top of mind for Berkshire Hathaway investors.

Mr. Buffett, age 80, has no plans currently to retire. His plan is to ultimately split

operating duties between a new CEO (all three leading candidates are internal

according to him), who would be responsible for the oversight of Berkshires business

operations. Separately, two or more investment managers would be expected to

ultimately manage Berkshires $133-billion portfolio.

Mr. Buffett announced today Todd Combs, age 39, will be one of the managers to join Berkshire and handle a significant portion of its investment portfolio. Mr.

Combs is chief investment officer for Castle Point Capital, a Greenwich,

Connecticut-based long-short hedge fund which manages just over $400 million.

The majority of the Castle Point funds investments are in the financial services

sector with top holdings including MasterCard, U.S. Bancorp, State Street, Western

Union, RenaissanceRe, Starwood Property Trust, Chubb, and CME.

Another candidate highlighted recently to potentially manage part of theBerkshires investment portfolio is hedge-fund manager Li Lu*. Mr. Li, 44, currently

manages a $600-million fund. His long-term performance is impressive an

annualized return of 26.4% since 1998 (versus a 2.25% return for the S&P 500),

including a 200% return in 2009 (vs a 23.5% gain for the S&P 500) employing no

leverage

Warren Buffetts successor as CEO is presumed to be David Sokol*, chairman ofMidAmercan Energy (Berkshires utility business). Mr. Sokol (age 53) has been

involved in the energy industry for 30 years. He successfully improved results at

Berkshires NetJets operation and was instrumental in the MidAmericans $5 bn

acquisition of PacifiCorp. Based on Mr. Sokols strong track record, we believe he

would be successful as the next CEO of Berkshire Hathaway.

BRK.B: Quarterly and Annual EPS USD

2009 2010 2011 Change y/y

FY Dec Actual Old New Cons Old New Cons 2010 2011

Q1 0.73A 0.93A 0.93A N/A N/A N/A N/A 27% N/A

Q2 0.76A 1.24A 1.24A N/A N/A N/A N/A 63% N/A

Q3 0.88A 1.31E 1.31E N/A N/A N/A N/A 49% N/A

Q4 0.87A 1.26E 1.26E N/A N/A N/A N/A 45% N/A

Year 3.25A 4.75E 4.75E N/A 5.00E 5.00E N/A 46% 5%

P/E 17.7 16.9

Source: Barclays Capital

Consensus numbers are from Thomson Reuters

Barclays Capital does and seeks to do business with companies covered in its research reports. As aresult, investors should be aware that the firm may have a conflict of interest that could affect theobjectivity of this report.

Investors should consider this report as only a single factor in making their investment decision.

PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 9.

Stock Rating 2-EQUAL WEIGH

Unchang

Sector View 2-NEUTRAUnchang

Price Target USD 88.0

Unchang

Price (29-Jul-2010) USD 78.

Potential Upside/Downside +13

Tickers BRK

Market Cap (USD mn) 756

Shares Outstanding (mn) 968.

Free Float (%) 94.

52 Wk Avg Daily Volume (mn) 6Dividend Yield (%) N

Return on Equity TTM (%) 9.

Current BVPS (USD) 57.

Source: FactSet Fundamentals

Price Performance Exchange-NY

52 Week range USD 83.57-62.

0 1- Oct 0 1- Jan 0 1- Ap r 0 1- Ju l

60

66

72

78

84

Link to Barclays Capital Live for interactive charting

U.S. Insurance/Non-Life

Jay Gelb, CFA

1.212.526.1561

[email protected]

BCI, New York

Sarah DeWitt, CFA

1.212.526.9947

[email protected]

BCI, New York

Erica Schaul, CFA

1.212.526.8190

[email protected]

BCI, New York
https://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.B&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.B&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPShttps://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.B&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.B&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPS

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Barclays Capital | Berkshire Hathaway Inc.

25 October 2010 2

* From Tiananmen Square to Possible Buffett Successor published in The Wall Street Journal

on July 30, 2010

We anticipate Berkshire should deliver strong 3Q operating results with robust results in

Manufacturing, Service, & Retail and Burlington Northern, stable results in Insurance and

Utilities, and perhaps volatile investment results.

BRK.B currently trades at 1.44x 2Q10 BV (2.09x tangible BV), which is below its historical

median of 1.7x (historical range: 1.1x-2.7x). Our $88 price target is based on 1.3x YE 2011E

BV of $68.

3Q10 Berkshire Hathaway Earnings Preview

Earnings release details: We expect Berkshire Hathaway to report 3Q results on November 5

after the close. The company does not hold a quarterly conference call.

Berkshire Hathaways 3Q10 operating EPS per Class B share could be $1.31 ($1,960 perA share), up 48% compared to a year ago, driven by improved results in Insurance,

Burlington Northern, and the Manufacturing, Service & Retail segments.

First-quarter comprehensive EPS per B share could be $2.48 vs. $4.96 per B share a yearago. Based on our assessment of potential investment marks, our current thinking is

that Berkshires linked-qtr BV could rise 4% in 3Q10 to $60.25 per B share.

Pre-tax unrealized net investment gains could be $4.5 billion in the most recent quarterversus gains of $12.7 billion a year ago.

Total Insurance pre-tax operating income could increase 17% year-over-year to $2.2billion. Total underwriting income could be $740 million in 3Q10 versus $560 million a

year ago, reflecting solid results at GEICO, Berkshire Hathaway Re, and GenRe. The

segments total investment income could increase 11% year over year to $1.5 billion

due to increased invested assets.

Within the Insurance segment, GEICOs pre-tax underwriting income could increase43% year-over-year to $285 million, reflecting 5% premium growth and improvement

in underwriting margins due to benign loss cost trends. GenRe could report

underwriting income of $220 million versus $186 million a year ago due to improved

underwriting margins. Pre-tax underwriting income at Berkshire Hathaway Re could

improve to a $235 million versus $167 million a year ago, reflecting the lumpy nature of

the business.

Earned premiums at Berkshire Hathaway Re could include a $2 billion benefit related toretroactive reinsurance deal with CNA. As part of the deal, Berkshire Hathaway Re

assumes $4 billion of asbestos and environmental liabilities in return for $2 billion of

premiums. These transactions typically produce GAAP underwriting losses but the

economics should be attractive over the life of the contract, taking into account

investment income generated by the upfront premiums before claims are paid (float).

The Utilities and Energy (MidAmerican) segment (excluding BNSF) revenues couldincrease 2% year-over-year to $2.9 billion. Pre-tax income could decline 13% year-over-

year to $374 million

Burlington Northerns revenues could increase 22% year over year to $4.3 billion, andpre-tax earnings could increase 46% year over year to $1.3 billion. Notably, the

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25 October 2010 3

Burlington Northern acquisition closed on February 12, 2010, and therefore did not

contribute to Berkshires operating earnings result a year ago.

The Manufacturing, Service, and Retailing segment revenues could increase 9% yearover year to $17.4 billion in 3Q10. Pre-tax earnings are expected to nearly double year

over year to $1.2 billion, reflecting strong improvement in Other Service (includes

NetJets) and Other Manufacturing.

The Finance and Financial Products segment (mostly Clayton Homes) revenues couldbe $1.2 billion, +8% vs. the year ago quarter. Pretax earnings could increase 6% year

over year to $150 million.

Figure 1: BRK 3Q10 Estimates

3Q10A 3Q10E % chg est

(in $ mil, except per share)

After-tax earnings

Insurance-underwriting $363 $481 33%

Insurance-investment income 976 1,085 -11%Non-insurance businesses 774 1,698 119%

Other (58) (34) -41%

Operating earnings $2,055 $3,229 57%

Investment and derivative gains (losses) 1,183 0 NA

Net earnings (loss) attributable to Berkshire shareholders 3,238 3,229 0%

Other comprehensive income 8,311 2,897 NM

Comprehensive earnings 11,549 6,127 -47%

Net earnings (loss) per Class A equiv. shr attributable to

Berkshire shareholders $2,087 $1,960 -6%Investment and derivative gains (losses) per Class A equiv. shr 762 0 NA

Operating earnings per Class A equivalent share 1,324 1,960 48%

Net earnings (loss) per Class B equiv. shr attributable to

Berkshire shareholders $1.39 $1.31 -6%

Investment and derivative gains (losses) per Class B equiv. shr $0.51 $0.00 NA

Operating earnings per Class B equivalent share $0.88 $1.31 48%

Source: Company data, Barclays Capital estimates

Valuation

Our price target of $88 per Class B share ($132,000 per Class A share) for BerkshireHathaway based on a multiple of 1.29x (below the average historical multiple of 1.67x since

2000) our YE11 book value estimate of $68 per Class B share ($102,300 per A share). We

also estimate Berkshires fair value using sum-of-the-parts and intrinsic value methods,

which generate an outlook of approximately $90 per Class B share and $76 per Class B

share, respectively.

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25 October 2010 4

Figure 2: BRK Valuation Methods

Valuation

Method

Price-to-stated book Sum-of-the-parts Intrinsic value

Approximate estimated fair value

per share

$88 per Class B share

$132,000 per Class A share





Strengths of this method Easy to calculate.

Historical basis for valuation.

Applies separate valuation for eachbusiness.

Warren Buffett uses a modifiedversion.

Separately values investments andoperating units.

Drawbacks of this method Book value is believed to be lowerthan intrinsic value.

BNSF is newly acquired, sohistorical valuation is not highlyrelevant.

Valuation based on comprehensiveincome (incl. est. investment gains).

Determining the right valuation foreach segment can be a challenge.

Many estimated inputs, includingWACC and terminal value of futureearnings.

Source: Company data, Barclays Capital estimates

Figure 3: Trailing Price-to-Stated Book Since 2000 Figure 4: Trailing Price-to-Tangible Book Since 2000

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Source: FactSet, Barclays Capital research. Source: FactSet, Barclays Capital research.

Figure 5: Trailing Price-to-StatedBook Since 2008 Figure 6: Trailing Price-to-Tangible Book Since 2008

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Trailing Price-to-Tangible Book Multiple

Source: FactSet, Barclays Capital research. Source: FactSet, Barclays Capital research.

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25 October 2010 5

Figure 7: Berkshire Hathaway Sum Of The Parts Analysis

(In $billions, except where noted and per share)

Pre-Tax Non-Insurance Segment Operating EarningsPre-tax earnings Pct. 2011E After-tax

2011E Earnings P/E valuation, (a)BNSF 4.5 27% 13.0 38Manufacturing, service & retail 5.6 33% 13.0 47

MidAmerican 1.5 9% 11.0 11Finance and financial products 0.6 4% 12.0 5Total 12.2 100Unrealized appreciation of investments 4.6 28% 15.0 45Grand total 16.8 100% 13.3 146

Plus: value of Insurance business 77

Berkshire Hathaway sum-of-the-parts valuation 222Class A and equivalent shares outstanding (in millions) 1.65

Sum-of-the-parts valuation per Class A and equivalent shares $135,052Sum-of-the-parts valuation per Class B and equivalent shares $90

U.S. P&C Statutory Capital - YE09 (in $bn)YE09 Statutory Estimated Est.

Capital Valuation ValueNational Indemnity Co. $38 1.20 $46Columbia Insurance Co. 8 1.00 8General Re 10 1.00 10

GEICO 8 1.50 12Total 65 1.18 77

Multiple applied 1.18 x

Insurance valuation 77

(a) After-tax assuming 34% tax rate. Source: Company data, Barclays Capital estimates

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25 October 2010 6

Figure 8: Berkshire Hathaway Intrinsic Value Analysis

(In $millions, except per share) Weighted avg. cost of capital (WACC)Mkt value of equity 205,948 78%Debt 57,970 22%

Valuation Summary Total 263,918 100%

(In $mn except per share)Value of investments & cash $135,502 Beta 0.96PV of non-insurance A/T income 124,144 10 Yr US Treasury yield 2.6%

Company value 259,646 Risk premium 7.0%Less: debt (57,970) Market return 9.6%

Value of shareholders' equity 201,676 Cost of equity 9.3%Class A and equivalent shares out 1.65

Value of equity per Class A equiv. share $122,423 Cost of debt, pre-tax 4.8%Value of equity per Class B equiv. share $82 1-Tax rate 0.66

Cost of debt, after-tax 3.2%

WACC 7.9%

Perpetual growth rate (g) 1.5%

Terminal

2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E ValueNon-Insurance income

Burlington Northern Santa Fe $3,538 $4,490 4,715 4,832 4,953 5,077 5,204 5,334 5,467 5,604 5,744 5,888Utilities & Energy (MidAmerican) $1,511 1,498 1,573 1,612 1,653 1,694 1,736 1,780 1,824 1,870 1,916 1,964

Manufacturing, Service & Retail $4,441 $5,575 5,854 6,000 6,150 6,304 6,461 6,623 6,789 6,958 7,132 7,311Finance & Financial Products $566 $600 630 646 662 678 695 713 731 749 768 787Less: Minority interest ($541) ($480) (504) (517) (530) (543) (556) (570) (584) (599) (614) (629)

Total Segment pre-tax income 9,515 11,683 12,267 12,574 12,888 13,210 13,541 13,879 14,226 14,582 14,946 15,320

Effective tax rate 30% 34% 34% 34% 34% 34% 34% 34% 34% 34% 34% 34%Total Segment after-tax income 6,660 7,711 8,096 8,299 8,506 8,719 8,937 9,160 9,389 9,624 9,865 10,111Discount period 1 2 3 4 5 6 7 8 9 10 11 12

PV after-tax income + terminal value 6,171 6,619 6,439 6,115 5,807 5,514 5,237 4,973 4,723 4,485 4,259 63,803

WACC 7.9% Terminal mult. 15.8

(1+g)/(WACC-g) Source: Company data, Barclays Capital estimates

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25 October 2010 7

Figure 9: Berkshire Hathaway Annual Summary Model

(In $millions, except per share)

2006 2007 2008 2009 2010E 2011E

Insurance:

Total P&C insurance net premiums earned $21,600 $29,321 $22,945 $25,258 $27,388 $26,000

Life/health net premiums earned 2,364 2,462 2,580 2,626 2,857 3,000

Total insurance premiums earned 23,964 31,783 25,525 27,884 30,245 29,000

P&C incurred losses & claims expense 17,915 28,409 22,733 26,378 27,794 24,375

Loss reserve change 3,060 12,950 7,342 10,856 12,294 8,875

Paid claims 14,855 15,459 15,391 15,522 15,500 15,500P&C pre-tax underwriting gain/(loss) 3,685 3,294 2,613 1,329 2,221 1,625

Life/health pre-tax underwriting gain/(loss) 153 80 179 177 230 200

Total Insurance underwriting income 3,838 3,374 2,792 1,506 2,451 1,825

Insurance Investment Income 4,316 4,758 4,722 5,173 5,777 6,000

Insurance pre-tax income 8,154 8,132 7,514 6,679 8,228 7,825

Utilities, Energy, & Railroad:

MidAmerican pre-tax income 1,476 1,774 2,963 1,528 1,511 1,498

Burlington Northern Santa Fe pre-tax income - - - - 3,538 4,490

Utilities, Energy & Railroad pre-tax income 1,476 1,774 2,963 1,528 5,049 5,988

Manufacturing Service & Retail pre-tax income 3,526 3,947 4,023 2,058 4,441 5,575

Finance & Financial Products pre-tax income 1,157 1,006 787 781 566 600

Total segment pre-tax income 14,313 14,859 15,287 11,046 18,284 19,988

Investment gains/losses 1,953 5,599 918 387 1,701 559

Other-than-temporary losses on investments (142) (1) (1,558) (3,224) - -

Derivative gains/losses 824 (89) (6,821) 3,624 (1,765)

Interest expense, ex. interest allocated to op businesses 76 52 35 42 208 212

Eliminations & other (94) (155) (217) (292) (286) (320)

Earnings before taxes & equity method 16,778 20,161 7,574 11,499 17,726 20,015

Income tax expense 5,505 6,594 1,978 3,538 5,285 6,805

Earnings from equity method investments - - - 427 50 -

Net earnings 11,273 13,567 5,596 8,388 12,491 13,210

Less earnings attributable to non-controlling interests 258 354 602 386 541 480

Net earnings attributable To Berkshire Hathaway 11,015 13,213 4,994 8,002 11,950 12,730

Investment & derivative gains/(losses) 1,709 3,579 (4,645) 486 305 369

Operating income, A/T 9,306 9,634 9,639 7,516 11,645 12,361

Net earnings attributable To Berkshire Hathaway 11,015 13,213 4,994 8,002 11,950 12,730

Net chg in unrealized appreciation of investments 9,278 2,523 (23,342) 17,607 (393) 4,584

Applicable income taxes 3,246 872 (8,257) 6,263 (116) 1,604

Foreign currency translation & other (493) (4,803) (2,376) 3,372 (901) -

Applicable income taxes (381) (1,795) (194) 987 (24) -

Other comprehensive income, net 5,920 (1,357) (17,267) 13,729 (1,154) 2,979

Comprehensive income attributable to Berkshire 16,935 11,856 (12,273) 21,731 10,796 15,709

Per share

Operating earnings per Class A equivalent share $6,036 $6,232 $6,223 $4,845 $7,121 $7,503

Operating earnings per Class B share $4.02 $4.16 $4.15 $3.23 $4.75 $5.00

Net income per Class A equivalent share $7,145 $8,548 $3,224 $5,158 $7,307 $7,727

Comprehensive earnings per Class A equivalent share $10,985 $7,670 ($7,924) $14,007 $6,602 $9,536

Class A shares outstanding 1.12 1.08 1.06 1.06 0.99 0.99

Class B shares outstanding 637.62 700.00 735.35 744.70 986.77 986.77

Class B shrs on equivalent class A basis 0.43 0.47 0.49 0.50 0.66 0.66

Class A equivalent shrs outstanding 1.54 1.55 1.55 1.55 1.65 1.65

Avg. Class A equivalent shrs outstanding 1.54 1.55 1.55 1.55 1.64 1.65

Book value per Class A equivalent share $70,281 $78,008 $70,530 $84,487 $92,717 $102,253

Book value per Class B equivalent share $46.85 $52.01 $47.02 $56.32 $61.81 $68.17

Linked-qtr growth NM NM NM NM NM NM

Book value per share, ex AOCI per A share $55,387 $64,039 $67,977 $73,020 $82,715 $90,442

Tangible book value per Class A share $49,383 $56,775 $48,725 $62,594 $62,904 $72,440

Tangible book value per Class B share $32.92 $37.85 $32.48 $41.73 $41.94 $48.29

Operating return on equity 9.3% 8.4% 8.4% 6.3% 8.2% 7.7%

Operating ROE, ex. AOCI 11.7% 10.4% 9.4% 6.9% 9.3% 8.7%

Return on tangible equity 12.9% 11.7% 11.8% 8.7% 11.6% 11.1%

Comprehensive ROE 16.9% 10.3% -10.7% 18.1% 7.6% 9.8%

Comprehensive tangible ROE 23.5% 14.5% -15.0% 25.2% 10.8% 14.1%

Cash dividends per share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

P&C Insurance combined ratio 82.9% 88.8% 88.6% 94.7% 91.9% 93.8%

Pretax catastrophe losses 254 226 1,022 131 830 450

Catastrophe comb. ratio impact 1.2% 0.8% 4.5% 0.5% 3.0% 1.7%

Prior year reserve development (612) (1,478) (1,140) (905) (150) 0

Prior year development comb. ratio impact -2.8% -5.0% -5.0% -3.6% -0.5% 0.0%

P&C Insurance combined ratio ex cats 81.8% 88.0% 84.2% 94.2% 88.9% 92.0%

P&C Insurance CR ex cats & PY devel. 84.6% 93.0% 89.1% 97.8% 89.4% 92.0%

Year-over-year percentage change

Insurance:

P&C net premiums earned 9.6% 35.7% -21.7% 10.1% 8.4% -5.1%

Investment income 24.0% 10.2% -0.8% 9.6% 11.7% 3.9%

Operating income 130.8% -0.3% -7.6% -11.1% 23.2% -4.9%

MidAmerican pre-tax income NM 20.2% 67.0% -48.4% -1.1% -0.9%

BNSF pre-tax income NM NM NM NM NM 26.9%Total Utilities & Energy pre-tax income NM 20.2% 67.0% -48.4% NM 18.6%

Manufacturing Service & Retail pre-tax income 34.4% 11.9% 1.9% -48.8% NM 25.5%

Finance & Financial Products pre-tax income 40.8% -13.1% -21.8% -0.8% -27.5% 6.0%

Total pre-tax segment income 105.1% 3.8% 2.9% -27.7% 65.5% 9.3%

Operating EPS 86.1% 3.3% -0.2% -22.1% 47.0% 5.4%

Book value per share 18.4% 11.0% -9.6% 19.8% 9.7% 10.3%

Effective tax rate 32.8% 32.7% 26.1% 30.8% 29.8% 34.0%

Adjusted total debt/capital 18.0% 17.1% 19.3% 16.5% 23.3% 21.6%

Total insurance float $50,887 $58,698 $58,488 $61,911

Avg Insurance investments (excl cash, fixed income at cost) $79,855 $94,183 $98,046 $104,019 $118,225 $129,816

Average Insurance pre-tax yield 5.4% 5.1% 4.8% 5.0% 4.9% 4.6%

Insurance invested assets (at fair value) per A share $80,636 $90,343 $77,793 $98,672 $88,116 $97,488

Non Insurance pre-tax earnings $5,901 $6,373 $7,171 $3,981 $9,515 $11,683

Non-Insurance earnings per A share $3,828 $4,123 $4,630 $2,566 $5,818 $7,092

Free cash flow $5,624 $7,177 $5,114 $10,909 $7,512 $10,255 Source: Company data, Barclays Capital estimates.

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25 October 2010 9

ANALYST(S) CERTIFICATION(S)

I, Jay Gelb, CFA, hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of thesubject securities or issuers referred to in this research report and (2) no part of my compensation was, is or will be directly or indirectly related tothe specific recommendations or views expressed in this research report.

IMPORTANT DISCLOSURES CONTINUED

For current important disclosures, including, where relevant, price target charts, regarding companies that are the subject of this research report,please send a written request to: Barclays Capital Research Compliance, 745 Seventh Avenue, 17th Floor, New York, NY 10019 or refer tohttp://publicresearch.barcap.com or call 1-212-526-1072.

The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's totalrevenues, a portion of which is generated by investment banking activities.

On September 20, 2008, Barclays Capital acquired Lehman Brothers' North American investment banking, capital markets, and private investmentmanagement businesses. All ratings and price targets prior to this date relate to coverage under Lehman Brothers Inc.

Barclays Capital produces a variety of research products including, but not limited to, fundamental analysis, equity-linked analysis, quantitativeanalysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in othertypes of research products, whether as a result of differing time horizons, methodologies, or otherwise.

Primary Stocks (Ticker, Date, Price)

Berkshire Hathaway Inc. (BRK.B, 29-Jul-2010, USD 78.04), 2-Equal Weight/2-Neutral

Materially Mentioned Stocks (Ticker, Date, Price)

Berkshire Hathaway Inc. (BRK.A, 29-Jul-2010, USD 116866.00), 2-Equal Weight/2-Neutral

Guide to the Barclays Capital Fundamental Equity Research Rating System:

Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2-Equal Weight or 3-Underweight (see definitionsbelow) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (the sectorcoverage universe).

In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investorsshould carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone.

Stock Rating

1-Overweight - The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-monthinvestment horizon.

2-Equal Weight - The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

3-Underweight - The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-monthinvestment horizon.

RS-Rating Suspended - The rating and target price have been suspended temporarily due to market events that made coverage impracticable orto comply with applicable regulations and/or firm policies in certain circumstances including when Barclays Capital is acting in an advisorycapacity in a merger or strategic transaction involving the company.

Sector View

1-Positive - sector coverage universe fundamentals/valuations are improving.

2-Neutral - sector coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.

3-Negative - sector coverage universe fundamentals/valuations are deteriorating.

Below is the list of companies that constitute the "sector coverage universe":

U.S. Insurance/Non-Life

ACE Limited (ACE) Allied World Assurance Co. (AWH) Allstate Corp. (ALL)

Aon Corporation (AON) Arch Capital Group Ltd. (ACGL) Arthur J. Gallagher & Co. (AJG)

Aspen Insurance Holdings (AHL) Berkshire Hathaway Inc. (BRK.A) Berkshire Hathaway Inc. (BRK.B)

Brown & Brown, Inc. (BRO) Chubb Corp. (CB) Everest Re Group (RE)

Flagstone Reinsurance Holdings Ltd. (FSR) Marsh & McLennan Cos. (MMC) Montpelier Re Holdings (MRH)

OneBeacon Insurance Group (OB) PartnerRe Ltd. (PRE) Progressive Corp. (PGR)

RenaissanceRe Holdings (RNR) The Hanover Insurance Group (THG) The Travelers Companies, Inc. (TRV)

Willis Group Holdings Ltd. (WSH) XL Group plc (XL)

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Distribution of Ratings:

Barclays Capital Inc. Equity Research has 1607 companies under coverage.

42% have been assigned a 1-Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 53% of

companies with this rating are investment banking clients of the Firm.44% have been assigned a 2-Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 46% ofcompanies with this rating are investment banking clients of the Firm.

11% have been assigned a 3-Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 37% ofcompanies with this rating are investment banking clients of the Firm.

Barclays Capital offices involved in the production of equity research:

London

Barclays Capital, the investment banking division of Barclays Bank PLC (Barclays Capital, London)

New York

Barclays Capital Inc. (BCI, New York)

Tokyo

Barclays Capital Japan Limited (BCJL, Tokyo)

So Paulo

Banco Barclays S.A. (BBSA, So Paulo)

Hong Kong

Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong)

Toronto

Barclays Capital Canada Inc. (BCC, Toronto)

Johannesburg

Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg)

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25 October 2010 11


Berkshire Hathaway Inc. (BRK.B) Stock Rating Sector View

USD 78.04 (29-Jul-2010) 2-EQUAL WEIGHT 2-NEUTRAL

Rating and Price Target Chart - USD (as of 29-Jul-2010) Currency=USD

Date Closing Price Rating Price Target

Clos ing Pr i ce Target Pr i ce Rat i ng Change

Jan- 08 Ju l- 0 8 Jan - 0 9 Ju l- 09 Jan - 10 Jul- 10

45

52

60

68

75

82

90

98

105

12-Apr-2010 80.48 2-Equal Weight 88.00


Barclays Bank PLC and/or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities of Berkshire HathawayInc. in the previous 12 months.

Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by Berkshire Hathaway Inc. or one of itsaffiliates.

Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from Berkshire Hathaway Inc. in the past 12

months.Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from BerkshireHathaway Inc. within the next 3 months.

Barclays Bank PLC and/or an affiliate trades regularly in the shares of Berkshire Hathaway Inc..

Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from Berkshire Hathaway Inc. within the past12 months.

Berkshire Hathaway Inc. is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate.

Berkshire Hathaway Inc. is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays BankPLC and/or an affiliate.

Barclays Bank PLC is associated with specialist firm Barclays Capital Market Makers, which makes a market in Berkshire Hathaway Inc. stock. Atany given time, the associated specialist may have "long" or "short" inventory position in the stock; and the associated specialist may be on theopposite side of orders executed on the Floor of the Exchange in the stock.

Valuation Methodology: We determine our price target for Berkshire Hathaway of $88 primarily by applying a price-to-book multiple of 1.3x

(versus a historical average since 2000 of 1.59x) to our YE 2011 book value estimate of around $70. As a point of reference, our price targetvaluation implies a price-to-tangible book multiple of 1.86x, versus a historical average since 2000 of 2.30x.

Risks which May Impede the Achievement of the Price Target: There are several risks that could impede the achievement of our price target forBerkshire Hathaway including managment succession, large and concentrated stock investments, derivative losses, earnings volatility,catastrophe losses, M&A risk and regulatory risk.
https://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.B&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.B&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPShttps://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.B&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.B&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPS

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Berkshire Hathaway Inc. (BRK.A) Stock Rating Sector View

USD 116866.00 (29-Jul-2010) 2-EQUAL WEIGHT 2-NEUTRAL

Rating and Price Target Chart - USD (as of 29-Jul-2010) Currency=USD

Date Closing Price Rating Price Target

Clos ing Pr i ce Target Pr i ce Rat i ng Change

Jan - 08 Jul- 0 8 Jan- 0 9 Jul- 0 9 Jan- 1 0 Jul- 10

70K

80K

90K

100K

110K

120K

130K

140K

150K

12-Apr-2010 120465.00 2-Equal Weight 132000.00


Barclays Bank PLC and/or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities of Berkshire HathawayInc. in the previous 12 months.

Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by Berkshire Hathaway Inc. or one of itsaffiliates.

Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from Berkshire Hathaway Inc. in the past 12

months.Barclays Bank PLC and/or an affiliate expects to receive or intends to seek compensation for investment banking services from BerkshireHathaway Inc. within the next 3 months.

Barclays Bank PLC and/or an affiliate trades regularly in the shares of Berkshire Hathaway Inc..

Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from Berkshire Hathaway Inc. within the past12 months.

Berkshire Hathaway Inc. is, or during the past 12 months has been, an investment banking client of Barclays Bank PLC and/or an affiliate.

Berkshire Hathaway Inc. is, or during the past 12 months has been, a non-investment banking client (securities related services) of Barclays BankPLC and/or an affiliate.

Barclays Bank PLC is associated with specialist firm Barclays Capital Market Makers, which makes a market in Berkshire Hathaway Inc. stock. Atany given time, the associated specialist may have "long" or "short" inventory position in the stock; and the associated specialist may be on theopposite side of orders executed on the Floor of the Exchange in the stock.

Valuation Methodology: We determine our price target for Berkshire Hathaway of $132,000 primarily by applying a price-to-book multiple of

1.3x (versus a historical average since 2000 of 1.59x) to our YE 2011 book value estimate of around $105,000. As a point of reference, our pricetarget valuation implies a price-to-tangible book multiple of 1.80x, versus a historical average since 2000 of 2.30x.

Risks which May Impede the Achievement of the Price Target: There are several risks that could impede the achievement of our price target forBerkshire Hathaway including managment succession, large and concentrated stock investments, derivative losses, earnings volatility,catastrophe losses, M&A risk and regulatory risk.
https://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.A&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.A&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPShttps://live.barcap.com/go/NYF/flex/equity/EquityChart.jsp?ticker=BRK.A&legend=Berkshire%20Hathaway%20Inc.&shortlegend=BRK.A&currency=USD&yfraction=0&enddate=20100729&begindate=20090729&userId=schaule&appName=RPS

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This publication has been prepared by Barclays Capital; the investment banking division of Barclays Bank PLC, and/or one or more of its affiliates as provided below. Thipublication is provided to you for information purposes only, and Barclays Capital makes no express or implied warranties, and expressly disclaims all warranties omerchantability or fitness for a particular purpose or use with respect to any data included in this publication. Prices shown in this publication are indicative and BarclaysCapital is not offering to buy or sell or soliciting offers to buy or sell any financial instrument.

Without limiting any of the foregoing and to the extent permitted by law, in no event shall Barclays Capital, nor any affiliate, nor any of their respective officers, directors,partners, or employees have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savingsor loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents.

Other than disclosures relating to Barclays Capital, the information contained in this publication has been obtained from sources that Barclays Capital believes to bereliable, but Barclays Capital does not represent or warrant that it is accurate or complete. The views in this publication are those of Barclays Capital and are subject tochange, and Barclays Capital has no obligation to update its opinions or the information in this publication.

The analyst recommendations in this report reflect solely and exclusively those of the author(s), and such opinions were prepared independently of any other interestsincluding those of Barclays Capital and/or its affiliates.

The securities discussed in this publication may not be suitable for all investors. Barclays Capital recommends that investors independently evaluate each issuer, securityor instrument discussed in this publication and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuatefrom day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information in this publication is not intended topredict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.

This communication is being made available in the UK and Europe primarily to persons who are investment professionals as that term is defined in Article 19 of theFinancial Services and Markets Act 2000 (Financial Promotion Order) 2005. It is directed at, and therefore should only be relied upon by, persons who have professionalexperience in matters relating to investments. The investments to which it relates are available only to such persons and will be entered into only with such personsBarclays Capital is authorized and regulated by the Financial Services Authority ('FSA') and member of the London Stock Exchange.

Barclays Capital Inc., US registered broker/dealer and member of FINRA (www.finra.org), is distributing this material in the United States and, in connection therewith

accepts responsibility for its contents. Any U.S. person wishing to effect a transaction in any security discussed herein should do so only by contacting a representativeof Barclays Capital Inc. in the U.S. at 745 Seventh Avenue, New York, New York 10019.

Non-U.S. persons should contact and execute transactions through a Barclays Bank PLC branch or affiliate in their home jurisdiction unless local regulations permotherwise.

This material is distributed in Canada by Barclays Capital Canada Inc., a registered investment dealer and member of IIROC (www.iiroc.ca).

Subject to the conditions of this publication as set out above, Absa Capital, the Investment Banking Division of Absa Bank Limited, an authorised financial servicesprovider (Registration No.: 1986/004794/06), is distributing this material in South Africa. Absa Bank Limited is regulated by the South African Reserve Bank. Thipublication is not, nor is it intended to be, advice as defined and/or contemplated in the (South African) Financial Advisory and Intermediary Services Act, 37 of 2002, orany other financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever. Any South African person oentity wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Absa Capital in South Africa, 15 Alice LaneSandton, Johannesburg, Gauteng 2196. Absa Capital is an affiliate of Barclays Capital.

In Japan, foreign exchange research reports are prepared and distributed by Barclays Bank PLC Tokyo Branch. Other research reports are distributed to institutionainvestors in Japan by Barclays Capital Japan Limited. Barclays Capital Japan Limited is a joint-stock company incorporated in Japan with registered office of 6-10-1Roppongi, Minato-ku, Tokyo 106-6131, Japan. It is a subsidiary of Barclays Bank PLC and a registered financial instruments firm regulated by the Financial ServicesAgency of Japan. Registered Number: Kanto Zaimukyokucho (kinsho) No. 143.

Barclays Bank PLC, Hong Kong Branch is distributing this material in Hong Kong as an authorised institution regulated by the Hong Kong Monetary AuthorityRegistered Office: 41/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong.

Barclays Bank PLC Frankfurt Branch is distributing this material in Germany under the supervision of Bundesanstalt fr Finanzdienstleistungsaufsicht (BaFin).

This material is distributed in Malaysia by Barclays Capital Markets Malaysia Sdn Bhd.

This material is distributed in Brazil by Banco Barclays S.A.

Barclays Bank PLC in the Dubai International Financial Centre (Registered No. 0060) is regulated by the Dubai Financial Services Authority (DFSA). Barclays Bank PLC-DIFC Branch, may only undertake the financial services activities that fall within the scope of its existing DFSA licence.

Barclays Bank PLC in the UAE is regulated by the Central Bank of the UAE and is licensed to conduct business activities as a branch of a commercial bank incorporatedoutside the UAE in Dubai (Licence No.: 13/1844/2008, Registered Office: Building No. 6, Burj Dubai Business Hub, Sheikh Zayed Road, Dubai City) and Abu Dhabi(Licence No.: 13/952/2008, Registered Office: Al Jazira Towers, Hamdan Street, PO Box 2734, Abu Dhabi).

Barclays Bank PLC in the Qatar Financial Centre (Registered No. 00018) is authorised by the Qatar Financial Centre Regulatory Authority (QFCRA). Barclays Bank PLC-QFC Branch may only undertake the regulated activities that fall within the scope of its existing QFCRA licence. Principal place of business in Qatar: Qatar FinanciaCentre, Office 1002, 10th Floor, QFC Tower, Diplomatic Area, West Bay, PO Box 15891, Doha, Qatar.

This material is distributed in Dubai, the UAE and Qatar by Barclays Bank PLC. Related financial products or services are only available to Professional Clients as definedby the DFSA, and Business Customers as defined by the QFCRA.

This material is distributed in Saudi Arabia by Barclays Saudi Arabia ('BSA'). It is not the intention of the Publication to be used or deemed as recommendation, option oradvice for any action (s) that may take place in future. Barclays Saudi Arabia is a Closed Joint Stock Company, (CMA License No. 09141-37). Registered office AFaisaliah Tower | Level 18 | Riyadh 11311 | Kingdom of Saudi Arabia. Authorised and regulated by the Capital Market Authority, Commercial Registration Number1010283024.

This material is distributed in Russia by Barclays Capital, affiliated company of Barclays Bank PLC, registered and regulated in Russia by the FSFM. Broker License #177-11850-100000; Dealer License #177-11855-010000. Registered address in Russia: 125047 Moscow, 1st Tverskaya-Yamskaya str. 21.

This material is distributed in India by Barclays Bank PLC, India Branch.

This material is distributed in Singapore by the Singapore branch of Barclays Bank PLC, a bank licensed in Singapore by the Monetary Authority of Singapore. Fomatters in connection with this report, recipients in Singapore may contact the Singapore branch of Barclays Bank PLC, whose registered address is One Raffles QuayLevel 28, South Tower, Singapore 048583.

Barclays Bank PLC, Australia Branch (ARBN 062 449 585, AFSL 246617) is distributing this material in Australia. It is directed at 'wholesale clients' as defined by

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Australian Corporations Act 2001.

IRS Circular 230 Prepared Materials Disclaimer: Barclays Capital and its affiliates do not provide tax advice and nothing contained herein should be construed to be taxadvice. Please be advised that any discussion of U.S. tax matters contained herein (including any attachments) (i) is not intended or written to be used, and cannot beused, by you for the purpose of avoiding U.S. tax-related penalties; and (ii) was written to support the promotion or marketing of the transactions or other matteraddressed herein. Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor.

Copyright Barclays Bank PLC (2010). All rights reserved. No part of this publication may be reproduced in any manner without the prior written permission of BarclayCapital or any of its affiliates. Barclays Bank PLC is registered in England No. 1026167. Registered office 1 Churchill Place, London, E14 5HP. Additional information

regarding this publication will be furnished upon request.

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