Business Activities

         Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted on both a direct and reinsurance basis through a number of subsidiaries. Included in this group of subsidiaries is GEICO Corporation, the sixth largest auto insurer in the United States and General Re Corporation, one of the four largest reinsurers in the world.

         Investment portfolios of insurance subsidiaries include meaningful equity ownership percentages of other publicly traded companies. Investments in excess of 5% of the investees outstanding capital stock at the end of 1998 include approximately 11% of the outstanding capital stock of American Express Company, approximately 8% of the capital stock of The Coca-Cola Company, approximately 9% of the capital stock of Federal Home Loan Mortgage Corporation ("Freddie Mac"), approximately 81/2% of the capital stock of The Gillette Company, and approximately 17% of the capital stock of The Washington Post Company. Much information about these publicly-owned companies is available, including information released from time to time by the companies themselves.

         Other business activities conducted by non-insurance subsidiaries include publication of a daily and Sunday newspaper in Western New York (Buffalo News), manufacture and sale of boxed chocolates and other confectionery products (See's Candies), diversified manufacturing and distribution (managed by Scott Fetzer and whose principal products are sold under the Kirby and Campbell Hausfeld brand names), retailing of home furnishings (Nebraska Furniture Mart, R.C. Willey Home Furnishings and Star Furniture Company), manufacture, import and distribution of footwear (H.H. Brown Shoe Company, Lowell Shoe, Inc. and Dexter Shoe Company), retailing of fine jewelry (Borsheim's and Helzberg's Diamond Shops), training to operators of aircraft and ships throughout the world (FlightSafety International), providing fractional ownership programs for general aviation aircraft (Executive Jet), and licensing and servicing a system of approximately 5,900 Dairy Queen stores.

         Operating decisions for the various Berkshire businesses are made by managers of the business units. Investment decisions and all other capital allocation decisions are made for Berkshire and its subsidiaries by Warren E. Buffett, in consultation with Charles T. Munger. Mr. Buffett is Chairman and Mr. Munger is Vice Chairman of Berkshire's Board of Directors.

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