Retailing

Merger With Diversified Retailing Company, Inc. Your Directors have approved the merger of Diversified Retailing Company, Inc. into Berkshire Hathaway Inc. on terms involving issuance of 195,000 shares of Berkshire stock for the 1,000,000 shares of Diversified stock outstanding. Because Diversified and its subsidiaries own 109,551 shares of Berkshire, the net increase in the number of shares of Berkshire outstanding after giving effect to this transaction will not exceed 85,449. Various regulatory approvals must be obtained before this merger can be completed, and proxy material will be submitted to you later this year so that you may vote upon it.

First, a few words about accounting.  The merger with Diversified Retailing Company, Inc. at yearend adds two new complications in the presentation of our financial results.  After the merger, our ownership of Blue Chip Stamps increased to approximately 58% and, therefore, the accounts of that company must be fully consolidated in the Balance Sheet and Statement of Earnings presentation of Berkshire.  In previous reports, our share of the net earnings only of Blue Chip had been included as a single item on Berkshire’s Statement of Earnings, and there had been a similar one-line inclusion on our Balance Sheet of our share of their net assets. Retailing

Manufacturing, Service and Retailing Operations COMPANY CEO Benjamin Moore (paint) Dennis Abrams Borsheims (jewelry retailing) Susan Jacques H. H. Brown (manufacturing and retailing of shoes) Jim Issler CTB (agricultural equipment) Vic Mancinelli Dairy Queen John Gainor Nebraska Furniture Mart (furniture retailing) Ron and Irv Blumkin Pampered Chef (direct sales of kitchen tools) Marla Gottschalk See’s (manufacturing and retailing of candy) Brad Kinstler Star Furniture (furniture retailing) Bill Kimbrell

Manufacturing, Service and Retailing Operations The largest earner in our manufacturing, service and retailing sector is Marmon, a collection of 130 businesses. We will soon increase our ownership in this company to 80% by carrying out our scheduled purchase of 17% of its stock from the Pritzker family. The cost will be about $1.5 billion. We will then purchase the remaining Pritzker holdings in 2013 or 2014, whichever date is selected by the family. Frank Ptak runs Marmon wonderfully, and we look forward to 100% ownership.