Fractional Ownership News
Buffett admits to major problem at NetJets
Warren Buffett, the legendary investor who heads up the Berkshire Hathaway empire has admitted that fractional jet operator NetJets was “the major problem for Berkshire last year.”
Buffett is known to be fond of NetJets, but in his annual letter to shareholders he said: “In the 11 years that we have owned the company, it has recorded an aggregate pre-tax loss of $157 million. Moreover, the company's debt has soared from $102 million at the time of purchase to $1.9 billion in April of last year. Without Berkshire's guarantee of this debt, NetJets would have been out of business. It's clear that I failed you in letting NetJets descend into this condition."
Buffett went on to say that he had been "bailed out" by David L. Sokol, who took over as CEO of NetJets last year. "Debt has already been reduced to $1.4 billion, and, after suffering a staggering loss of $711 million in 2009, the company is now solidly profitable.”
He described Sokol's influence, which has included laying off 500 pilots and delaying an expansion of NetJets' Columbus, Ohio, headquarters as “transforming”.
www.netjets.com
01/03/10
More news
Got a Fractional news story? Contact Us.
