Berkshire Letter to Shareholders

[gret]

"Part of the mess was caused by executives who made foolish and/or extravagant decisions."

Could you provide some specific examples?

 

[CALRepublic]

The mess is over.

Its like your $211M profitable business got hit with a Tsunami and an Earthquake one day. You take the financial hit and press on.

"the mess is over"

don't start counting your chickens yet... remember the majors were hiring two years ago, now look at'em

In my six years at NJ I've seen the good the bad and the ugly. I wonder what's next??


by the way, good job so far Mr. Sokol

 

[imacdog]

"Part of the mess was caused by executives who made foolish and/or extravagant decisions."

Could you provide some specific examples?

Spending like drunken sailors on projects that were entirely unnecessary, or unnecessarily expensive for starters.

 

[gunfyter]

"the mess is over"

don't start counting your chickens yet... remember the majors were hiring two years ago, now look at'em

The mess I am talking about is the fallout from the financial crisis.

The economy still sucks but Berkshire says we are solidly profitable.... I don't think they are allowed to lie in SEC reports....

So we'll see what the numbers are, in the next few reports.... But if we are really making a profit in the crap economy we are in now ... that ain't a bad thing....

 

[shroomwell]

The 676 million loss on asset write downs is a non cash charge. This actual cash effect may be more or may be less. It all depends on the prices they get for the aircraft that were bought back. Time will tell.

 

[netjetwife]

Spending like drunken sailors on projects that were entirely unnecessary, or unnecessarily expensive for starters.

Imacdog, that is what I was referring to in my post. I'd also note that while the value of some purchases/projects may have been debatable, foolishly jumping into them without first doing the required research incurred additional expenses that could have easily been avoided.

Gret, those responsible were immediately removed from the company when Mr. Sokol took over so there's no need to scrutinize, in detail, an issue that has already been corrected. NJ employees that frowned over past practices are relieved to see them come to an end. The point of my post was simply to show that there are valid reasons to be optimistic for the future.

 

[HazMat]

Njw what happened to the kudos you gave netjet management when the voluntary measures were agreed to. Something about Netjets having the best management how quickly things can change

 

[gunfyter]

Oh we fixed that!

The former President of the Union is now the President of the company... and look we already turned a $711M loss into a "solidly profitable" company.

Where is B19?:laugh: Bet he can't do that!

 

[ArtVandalay]

Its very simple... Before the mess we made $211 Million in 2008.

We have an aggregate loss of $157M since BRK bought us... $711M in 2009 alone... This means before 2009 we had made an aggregate profit of 711-157 = $554M.

Elsewhere previously it has been said he expects 2010 profit to be about $250M. If so the aggregate will be Back in the Black.

The mess is over.

"...asset writedowns and other downsizing costs of $676 million...."

Those are over... and accounted for $676M of the $711M loss. Leaving only $35M in operational losses ... more than offset by the manpower and other reductions made in costs over the last 6 months. We will not likely encounter similar write downs again... barring another devastating collapse of the US and global economy.

Its like your $211M profitable business got hit with a Tsunami and an Earthquake one day. You take the financial hit and press on.

Obviously you did not get a degree in business. This makes absolutely no sense whatsoever.

 

[netjetwife]

Haz, I still applaud them for being willing to try other alternatives first. My support for a cooperative labor-management relationship wasn't intended to imply that I thought RTS (the past CEO) was perfect and hadn't made mistakes. I was just giving credit where it was due. The new management team is now ready to focus on their relationship with NJASAP and I give them kudos for that, as well.