Berkshire Hathaway 2014 Annual Report & Letter Roundup

The Berkshire Hathaway 2014 Annual Report and Warren Buffett's Letter to Shareholders was released today. This year's letter, celebrating the company's 50th anniversary of Buffett's ownership, also includes a special letter from Vice Chairman Charlie Munger.

• Buffett and Munger's Letters.
• The Annual Financial Report. This PDF also includes the letters, so if you download this one, you don't need the first link.

Don't have time to read the 148 page annual report? Here are some good articles I have found around the internet today that summarize and highlight.

Warren Buffett, Charlie Munger say their eventual departures won't slow Berkshire Hathaway (Omaha World Herald)

In an essay on the company’s past and future, Chairman and CEO Warren Buffett, 84, said it’s likely to keep growing but not as rapidly as in the past, and he said the company might pay its first dividend sometime in the next 10 or 20 years. Vice Chairman Charlie Munger, 91, writing directly to Berkshire shareholders for the first time, said that his and Buffett’s eventual departures won’t slow down the company and that Berkshire already has executives qualified to be CEO.

Warren Buffett vows never to spin off Berkshire Hathaway subsidiaries (Financial Times)

Warren Buffett has vowed never to spin off any of Berkshire Hathaway’s subsidiaries, in a full-throated defence of the “sprawling conglomerate” he has assembled over the past 50 years. [...] “Berkshire is now a sprawling conglomerate, constantly trying to sprawl further,” he said.

Warren Buffett knows who next Berkshire CEO is (CNN Money)

"The board and I believe we now have the right person to succeed me as CEO -- a successor ready to assume the job the day after I die or step down," he wrote in his latest annual letter to investors. Buffett added that the next Berkshire CEO would be someone that already works at Berkshire and is "relatively young." And while Buffett chose to be coy, Berkshire's vice chairman and long-time Buffett friend Charlie Munger seemed to suggest that it's a two-man race to succeed Buffett. Munger, in his own remarks in Buffett's letter, specifically named Berkshire reinsurance head Ajit Jain and Berkshire Energy CEO Greg Abel as "proven performers who would probably be under-described as 'world-class.'"

If you want a summary of the actual financials reported, there's this one:

Berkshire Hathaway net falls, operating profit rises (Reuters)

Net income fell to $4.16 billion, or $2,529 per Class A share, from $4.99 billion, or $3,035 per share, a year earlier. Quarterly operating profit rose 5 percent to $3.96 billion, or $2,412 per share, from $3.78 billion, or $2,297 per share. [...] Book value per share, which Buffett considers a good measure of Berkshire's worth, rose 8.3 percent from a year earlier to $146,186. For all of 2014, profit rose 2 percent to $19.87 billion, or $12,092 per share, while operating profit rose 9 percent to $16.55 billion, or $10,071 per share.

And finally, a really long one where Wall Street Journal writers live-blogged as they read the letter this morning. It's almost shorter to just read the letter than read their notes. But some of their commentary is interesting:

Analysis: Warren Buffett’s Annual Berkshire Letter (WSJ MoneyBeat)

We’ve read everything through a few times now, and one thing about this year’s letter stands out above all else: Mr. Buffett isn’t writing solely for the people who will read the letter this weekend. He’s clearly hoping this document will be one Berkshire’s leaders will look back on for decades to come. Scattered throughout are instructions to the men and women who will oversee Berkshire after he’s gone, even if they’re not always couched that way. For example, when he writes on page 9 that underwriting profitability “is a religion” at Berkshire’s insurance units, it’s a reminder to guard against a slippage in standards in that part of the company. And when he writes on page 28 that Berkshire’s CEO and board will be very careful before using stock to fund a future acquisition, it’ll later serve as a warning for those executives if they ever consider such a maneuver. And lest the board forget, he says that for a Berkshire CEO, “character is crucial.” He also says that “neither ego nor avarice” should drive him to earn as much as other CEOs of big-name companies. Other parts of the letter use far loftier rhetoric to rally the troops and look to the future. Berkshire rests on “a rock-solid formation” of the company’s existing big operating units. “Looking ahead, Charlie and I see a world made to order for Berkshire,” he says. “Our ambitions have no finish line.”