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Good evening,

WEB made very specific comments about Coke, Gillette, Fruit of the Loom, and Johns Manville, which I found helpful.

It has 71% of the blade and razor business in the world, which is a very good business. Not all its portfolio is so good. For example, they own the Duracell battery business, and traded 18% of the shares in the razor business for the acquisition!

Sells 50% of the world's soft drinks. Per capita consumption grows every year. The world population grows 2% per year. Therefore, Coke grows its business 4% per year.

Coke did not unfairly offload capital costs on its bottlers. The bottling business is very capital intensive. 5% - 6% of a bottlers' revenues are required for capital expenditures just to stay in place. Since they can earn only 15% on revenues, its easy for them to get overextended if they incur too much debt service expense.

For example, Coca Cola Enterprises, for a time, became over-leveraged acquiring other bottlers. This problem may have subsided by now.

The syrup business (Coke) is a much better business than the bottling business (Coca Cola Enterprises). There is more value in the trademark than in the bottler. The bottler needs the trademark and not visa- versa. Therefore, it's entirely appropriate that the syrup business has a much higher return on revenues.

Fruit of the Loom:

Fruit got in trouble for two reasons: 1)borrowing too much money, $1 billion to $2 billion. 2)operating problems (management problems).

But we did not inherit the capital structure when we bought it, and we did not inherit the management that created all the leverage. We brought back John Holland, who had retired before the trouble started. We would not have purchased Fruit without the return of John Holland, and the exodus of existing management.

Fruit has a quality image, 40% of the market, and is a very low-cost producer of a basic product.

Johns Manville:

Asbestos litigation creates oppportunities for Berkshire to buy companies which are "cleansed" of liability emerging from bankruptcy, such as Johns Manville. The way they cleanse themselves is to assign most of their net worth to plaintiffs and lawyers.



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