[PUBLIC 2019.01.17] BRK.B Valuation Model
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Segment Operating Metrics
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Non-Insurance (Sales and service; Railroad, utilities and energy; Leasing)
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200420052006200720082009201020112012201320142015201620172018
14-Year CAGR
10-Year CAGR
5-Year CAGR
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Revenue$47,916$51,455$68,428$76,847$85,017$77,695$97,238$107,259$119,947$134,339$145,068$154,987$165,029$174,880$184,90110.13%8.08%6.60%
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Operating Income$3,065$3,445$6,159$6,727$7,773$4,367$10,113$12,211$14,000$15,458$17,511$18,827$18,795$19,754$21,64314.98%10.78%6.96%
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Intangible Asset Amortization
$0.00$0.00$0.00$0.00$0.00$0.006928091008109011551106149014691393
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Op Margin6.40%6.70%9.00%8.75%9.14%5.62%11.11%12.14%12.51%12.32%12.87%12.86%12.29%12.14%12.46%
Average Op Margin
10.42%
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Median Op Margin
12.14%
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Insurance (Insurance premiums)
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200420052006200720082009201020112012201320142015201620172018
14-Year CAGR
10-Year CAGR
5-Year CAGR
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Revenue$21,085$21,997$23,964$31,783$25,525$27,884$30,749$32,075$34,545$36,684$41,253$41,294$45,881$60,597$57,4187.42%8.44%9.37%
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Operating Income$1,533$32$3,807$3,341$2,755$1,509$1,972$227$1,605$3,067$2,655$1,825$2,091-$3,249$1,9951.90%-3.18%-8.24%
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Op Margin7.27%0.15%15.89%10.51%10.79%5.41%6.41%0.71%4.65%8.36%6.44%4.42%4.56%-5.36%3.47%
Average Op Margin
5.58%
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Median Op Margin
5.41%
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Investment Income (Interest, dividend and other)
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200420052006200720082009201020112012201320142015201620172018
14-Year CAGR
10-Year CAGR
5-Year CAGR
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Revenue$2,842$3,501$4,347$4,791$4,759$5,223$5,186$4,746$4,474$4,735$4,370$4,562$4,522$4,865$5,5184.85%1.49%3.11%
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Operating Income$2,842$3,501$4,347$4,791$4,759$5,223$5,186$4,746$4,474$4,735$4,370$4,562$4,522$4,865$5,5184.85%1.49%3.11%
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Op Margin100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%
Average Op Margin
100.00%
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Median Op Margin
100.00%
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Consolidated Operating Metrics
Dividend Payment Average (5-years)
$4,767
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Growth Rate
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Revenue (5-Year Avg)
% Total RevenueLT ProjectionNotes
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Non-Insurance$824,86575.32%2.50%
Decreasing as conglomerate gets larger; unlikely to grow much faster than GDP
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Insurance$246,44322.50%8.44%
Use 10-year CAGR
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Investments$23,8372.18%6.10%
Use long term average for historical dividend growth since 1960
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$1,095,145
Weighted Avg
3.92%
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Margins
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Revenue (5-Year Avg)
% Total RevenueLT Op Margin ProjectionNotes
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Non-Insurance$824,86575.32%10.42%
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Insurance$246,44322.50%5.66%
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Investments$23,8372.18%100.00%
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$1,095,145
Weighted Avg
11.30%
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Reinvestment Rate
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201820172016201520142013201220112010
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Depreciation$9,779$9,188$8,901$7,779$7,370$6,508$6,154$5,492$4,279
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Intangible Asset Amortization-$1,393-$1,469-$1,490-$1,106-$1,155-$1,090-$1,008-$809-$692
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Capex-$14,537-$11,708-$12,954-$16,082-$15,185-$11,087-$9,775-$8,191-$5,980
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Change in Working Cap-$1,813-$7,861$7,033$7,920$8,386$5,043$1,159$5,510$1,952
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Acquisitions-$3,279-$2,708-$31,399-$4,902-$4,824-$6,431-$3,188-$8,685-$15,924
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Net Reinvesment-$11,243-$14,558-$29,909-$6,391-$5,408-$7,057-$6,658-$6,683-$16,365
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Average Reinvestment (Smoothed)
-$11,585.78
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data is pretty lumpy, but assume Buffett is going to continue to make smaller acquisitions punctuated by a much larger acquisition, which is still a "reinvestment" of capital in growth and earnings
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