Berkshire Hathaway 2005 Annual Report Download - page 39

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38
Notes to Consolidated Financial Statements (Continued)
(6) Investments in equity securities
Data with respect to investments in equity securities are shown below. Amounts are in millions.
Unrealized Fair
Cost Gains/losses Value
December 31, 2005
Common stock of:
American Express Company .................................................................................. $ 1,287 $ 6,515 $ 7,802
The Coca-Cola Company ....................................................................................... 1,299 6,763 8,062
The Procter & Gamble Company ........................................................................... 5,963 (175) 5,788
Wells Fargo & Company........................................................................................ 2,754 3,221 5,975
Other ....................................................................................................................... 10,036 9,058 19,094
$21,339 $25,382 $46,721
December 31, 2004
Common stock of:
American Express Company .................................................................................. $ 1,470 $ 7,076 $ 8,546
The Coca-Cola Company ....................................................................................... 1,299 7,029 8,328
The Gillette Company ............................................................................................ 600 3,699 4,299
Wells Fargo & Company........................................................................................ 463 3,045 3,508
Other ....................................................................................................................... 5,505 7,531 13,036
$ 9,337 $28,380 $37,717
Common shares of American Express Company (“AXP”) owned by Berkshire and its subsidiaries possessed approximately
12% of the voting rights of all AXP shares outstanding at December 31, 2005. The shares are held subject to various agreements
which, generally, prohibit Berkshire from (i) unilaterally seeking representation on the Board of Directors of AXP, (ii) possessing
17% or more of the aggregate voting securities of AXP and (iii) subject to certain exceptions, selling AXP common shares to any
person who owns 5% or more of AXP voting securities or seeks to control AXP, without the consent of AXP. In addition, so long as
Kenneth Chenault is chief executive officer of AXP, Berkshire will vote its shares in accordance with the recommendations of AXP’ s
Board of Directors.
The investment in AXP as of December 31, 2005 excludes the values associated with Ameriprise Financial, Inc. (“AMP”),
which was spun-off by AXP on September 30, 2005. At December 31, 2005, the fair value of AMP common stock ($1,243 million)
is included in other equity securities.
Effective October 1, 2005, The Procter & Gamble Company (“PG”) acquired 100% of The Gillette Company (“Gillette”) by
issuing 0.975 shares of its common stock for each outstanding share of Gillette common stock. Berkshire recognized a non-cash pre-
tax investment gain of approximately $5.0 billion upon the exchange of Gillette shares for PG shares. The cost of PG shares in the
table above includes the fair value of Gillette shares exchanged for PG shares.
Total unrealized losses of equity securities at December 31, 2005 were $510 million, all of which related to securities in an
unrealized loss position for less than twelve months. There were no unrealized losses at December 31, 2004.
(7) Investment gains (losses)
Investment gains (losses) are summarized below (in millions).
2005 2004 2003
Fixed maturity securities —
Gross gains from sales and other disposals ........................................................... $ 792 $ 883 $2,559
Gross losses from sales and other disposals.......................................................... (23) (63) (31)
Equity securities —
Gross gains from sales and other disposals ........................................................... 5,612 769 850
Gross losses from sales.......................................................................................... (6) (1) (167)
Losses from other-than-temporary impairments ....................................................... (114) (19) (289)
Life settlement contracts............................................................................................ (82) (207) —
Other investments...................................................................................................... 17 274 382
$6,196 $1,636 $3,304
Net gains are reflected in the Consolidated Statements of Earnings as follows.
Insurance and other ................................................................................................... $5,728 $1,746 $2,914
Finance and financial products.................................................................................. 468 (110) 390
$6,196 $1,636 $3,304
Gross gains from sales and other disposals of equity securities during 2005 includes the $5.0 billion gain on the exchange of
Gillette shares for PG shares described in Note 6.