Berkshire Hathaway Inc.

The stable outlook on BRK reflects S&P Global Ratings' expectation that the group will continue to report solid profitability metrics, significant cash flow generation, and strong EBITDA margins--in line with its favorable view of the group's strong competitive position, supported by a strong and diversified portfolio of various business segments and management's strategic focus on operating profitability. We also expect BRK to maintain a supportive financial policy with debt-to-EBITDA below 2.0x and funds from operations (FFO)-to-debt above 45% on a sustained basis. Furthermore, we expect the insurance segment's financial risk profile to remain very strong, anchored by risk-adjusted capitalization consistent with an 'AA' confidence level (as measured by S&P Global Ratings' capital model). We could lower the ratings over the

...Significant increase in third-quarter 2019 year-to-date net income from recovery in equity valuations, and increase in operating earnings from last year with gains in major operating segments.We project organic growth of low-to-mid single digits in 2019-2021 with the top line increasing across a number of business segments. A robust economy along with re/insurance rate hikes, modest improvement in traffic and pricing for the company's railroads, solid commercial aerospace demand, and robust housing market activity, among other factors, support this growth, partially offset by rate declines in the energy sector and increased competition at certain retail businesses and McLane Co. We expect EBITDA margins of 16%-18%% over the next two-to-three years accounting for normalized catastrophe-related losses, and flat-to-slightly lower capital expenditure. A combination of solid businesses in a variety of sectors provides significant diversification benefit compared with peers, which underlies BRK's...

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