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Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 213702  
Subject: Re: Dec 31, 2012 Book Value estimate? Date: 12/14/2012 9:42 AM
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My take on current book value:

(A) 13-F Portfolio. If my accounting for the Kraft/Mondelez situation is accurate, it appears that Berkshire's portfolio based on positions reported in the 13-F is down 1.93% from 9/30/12 which is $1,456 million, or $946 million net of tax effects.

(B) Normalized net income for Q4: If we assume that net income for the first nine months of the year was "normalized", then Q4 normalized net income should be around $3.4 billion.

(C) Accounting for Sandy very roughly, I assume a $1 billion pre-tax hit, or $650 million after tax.

(D) Derivatives: I have no real insight into the derivatives position. The S&P is probably going to be flat to down with interest rates flat to somewhat higher. I'd call it a wash but wouldn't be surprised to see a $500 million swing one way or another.

(E) Repurchases: We just repurchased $1.2 billion of stock, so book value (total, not per share) will fall by that $1.2 billion.

So my guess is as follows (in millions)

Current BV = 9/30/12 BV +A+B+C+D+E

Current BV = 184,602 - 946 + 3,400 - 650 + (punt on derivatives) - 1,200 = 185,206

Book Value per share can be estimated by taking estimated current book value divided by estimated A equivalents outstanding. There were 1,652,388 million A equivalents outstanding at 9/30/12. Let's assume that no shares were issued and subtract the 9,200 shares repurchased from the 9/30 figure. That indicates shares outstanding of 1,643,188.

Current BV/Share estimate = 185,206/1.643188 = $112,711

Which means the current share price about 1.19x current book value.
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