2013 Annual Report: a Quick Look

As you probably know by now, the Berkshire Hathaway Annual Report came out on Saturday. The whole thing is 144 pages, though only 115 pages if you exclude the historical Nebraska Furniture Mart documents at the end.

Buffett's Annual Letter to Shareholders is only the first 24 pages, and I'd encourage everyone who is a shareholder to read that part in your spare time this week. You can stop reading when you get to the picture of the Berkshire Hathaway office staff having lunch. (A photograph in a BRK Annual Report? Is that a first?)

If you're in a hurry to get a quick summary of what's in there, here is an excellent review by Carol Loomis at Fortune, who also happens to edit the annual letters for Warren Buffett:

In a first, Buffett gets beat by the S&P 500 over five years. (But wins over six.) (Fortune)

Announcing Berkshire's 2013 results this morning, Buffett said in his annual letter to shareholders that book value per share -- Buffett's standard yardstick in this competition -- rose by 18.2% to $134,973. That's a very solid performance. But the S&P 500 index (SPX), having its best year since 1997, had a huge total return of 32.4%. [...]

Buffett uses book value as a yardstick because it includes all capital gains -- including those unrealized, which the more popular indicator of earnings does not. Even so, many press accounts of Berkshire's 2013 record will surely report the earnings figures that the company released today, and these will be excellent. For the company's A shares, earnings per share were up 32% to $11,850. [...]

Berkshire's increase in pretax profits from $22.2 billion in 2012 to $28.8 billion in 2013 reflected $3.9 billion in realized investment gains (emanating from both equities and fixed-income securities) and generally favorable operating results throughout this hugely complex company.