Berkshire's BNSF Railway keeps American economy movingBusiness | 28 Feb 2021 2:56 pm
American billionaire Warren Buffett, shared a fact in his annual letter to shareholders to illustrate Berkshire Hathaway's American credentials.
He said the conglomerate owns the biggest amount of U.S. assets (property, plant and equipment) by value than any other company in the country, CNBC reports.
“Berkshire’s depreciated cost of these domestic ‘fixed assets’ is US$154 billion. Next in line on this list is AT&T, with property, plant and equipment of US$127 billion,” he wrote.
The billionaire highlighted Berkshire’s two wholly owned American businesses — BNSF Railway and Berkshire Hathaway Energy (BHE) — which earned US$8.3 billion in 2020 despite a plunge in demand amid the coronavirus pandemic.
“Your railroad carries about 15 percent of all non-local ton-miles (a ton of freight moved one mile) of goods that move in the United States, whether by rail, truck, pipeline, barge or aircraft,” Buffett said. “The history of American railroads is fascinating. After 150 years or so of frenzied construction, skullduggery, overbuilding, bankruptcies, reorganizations and mergers, the railroad industry finally emerged a few decades ago as mature and rationalized.”
Buffett believes BHE will be a leader in delivering clean energy in the future. BHE began a US$18 billion endeavor to rework and expand a substantial portion of the outdated grid that now transmits electricity throughout the West, Buffett noted.
“Unlike railroads, our country’s electric utilities need a massive makeover in which the ultimate costs will be staggering,” Buffett said in the letter. “The effort will absorb all of BHE’s earnings for decades to come. We welcome the challenge and believe the added investment will be appropriately rewarded.”
And Buffett reminded investors that miracles do occur in middle America despite much of the attention on coastal areas. After all, the legend started his conglomerate in Omaha, Nebraska and its home office remains based in the Cornhusker State.
“Success stories abound throughout America,” the investor said. “Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.”