Thu, Sep 18, 2014, 2:07 PM EDT - U.S. Markets close in 1 hr 53 mins

Recent

% | $
Quotes you view appear here for quick access.

Berkshire Hathaway Inc. Message Board

  • balak_joshi balak_joshi Mar 14, 2012 7:03 AM Flag

    BRK's bad energy debt write-off

    Can someone send the investment that BRK wrote off. Also is there chance of recovering it or is it gone?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Page 4 of the annual report.

      http://www.berkshirehathaway.com/2011ar/2011ar.pdf

      "A few years back, I spent about $2 billion buying several bond issues of Energy Future Holdings, an electric utility operation serving portions of Texas. That was a mistake – a big mistake. In large measure, the company’s prospects were tied to the price of natural gas, which tanked shortly after our purchase and remains depressed. Though we have annually received interest payments of about $102 million since our purchase, the company’s ability to pay will soon be exhausted unless gas prices rise substantially. We wrote down our investment by $1 billion in 2010 and by an additional $390 million last year.
      At yearend, we carried the bonds at their market value of $878 million. If gas prices remain at present levels, we will likely face a further loss, perhaps in an amount that will virtually wipe out our current carrying value. Conversely, a substantial increase in gas prices might allow us to recoup some, or even all, of our write-down. However things turn out, I totally miscalculated the gain/loss probabilities when I purchased the bonds. In tennis parlance, this was a major unforced error by your chairman."

      TF

 
BRK-B
140.5801+0.9701(+0.69%)2:07 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.