Berkshire Hathaway (BRK-A) (BRK-B) was a struggling textile company when Warren Buffett first invested in it in 1962.

Today, it's a $360 billion behemoth. In Warren Buffett’s own words, it's a “sprawling conglomerate, constantly trying to sprawl further."

While there aren’t many regular disclosures for Berkshire's enormous portfolio of wholly-owned companies and equity investments, Buffett has always been about one thing: “maximizing long-term capital growth.”

Here's a brief introduction to Berkshire Hathaway.

The insurance business is the backbone of the company

Since it acquired National Indemnity in 1967, Berkshire's insurance businesses have powered much of the company’s expansion.

As Berkshire has gotten bigger and diversified its businesses, its insurance operations have become a smaller contributor to earnings than in the past. But they remain an important part of the company's access to a permanent capital base by generating what’s known as “float.”  

“Float” is money collected up front that is not paid out until later. In Berkshire’s property & casualty (P&C) insurance businesses, premiums are collected up front, but claims are paid out often years or decades later, allowing the float to be used for investments.

Today, Berkshire's insurance group consists of four segments: GEICO (auto insurance), General Re (reinsurance), BH Reinsurance Group (retroactive reinsurance through subsidiaries), and BH Primary (focused on commercial markets, led by National Indemnity Co).

The property and casualty insurance business faces headwinds--including deteriorating pricing and margin compression. And certainly their underperformance in 2015 hurt Berkshire’s shares. GEICO in particular was hurt by higher personal auto claims as a result of more driving from low gas prices, which led to elevated loss ratios and lower unit volume growth. However, Berkshire’s diversification, large balance sheet and long-term view has put it in solid position, according to analysts at UBS. Berkshire has also taken advantage of dislocation at other insurers like AIG.

Berkshire's insurance float was only $1.6 billion in 1990, but sits at $87.7 billion as of 2015, a 17.3% CAGR over that time period.

Equity portfolio

Berkshire’s investment portfolio represents Buffett's long-term conviction ideas.

At the end of 2015, about 60% of his equity portfolio was invested in five companies--Wells Fargo (WFC), Kraft Heinz (KHC), Coca-Cola (KO), IBM (IBM) and American Express (AXP). And other than Kraft Heinz, which was part of an investment with partner 3G in 2013, Berkshire has held large stakes in these positions for many years.

Shift to non-insurance businesses

In addition to $88 billion in insurance float, Berkshire has accumulated $259 billion in equity, according to UBS, giving it an accumulated permanent capital base of $350 billion. This allows Berkshire to fund organic growth and also acquisitions without the need to access capital markets and to take long-term views on investment and capital allocation decisions.

Berkshire in its early years was an insurance company driven by outperformance on investments. But it has evolved into a large conglomerate that includes many non-insurance businesses.

Berkshire has developed regulated, capital intensive businesses. Burlington Northern Santa Fe Railroad (BNSF), which Berkshire acquired in 2009 for $44 billion, is one of seven major railroads in North America and carries 17% of all inter-city freight. Berkshire has been investing heavily in this business. Additionally, BH Energy owns four utilities servicing customers in 11 Western/mid-western states, two electricity distribution companies in England, two interstate pipelines, a renewable energy business, and a residential real estate brokerage firm.

Berkshire’s manufacturing, service and retailing (MSR) operations include everything from candy to jets. Companies include food supply chain company McLane, manufacturing businesses (like specialty chemicals company Lubrizol, industrial components company Marmon, flooring company Shaw Industries, and paint and coatings company Benjamin Moore), service and retailing businesses (including NetJets, See’s Candy, Borsheim Jewelry Company, the Pampered Chef, and Oriental Trading Company), recently-acquired battery maker Duracell, and aerospace components manufacturer Precision Castparts, which Berkshire bought in 2015 for $37 billion.

Its finance businesses focus largely on the manufacturing and financing of homes and the leasing of transportation equipment. They  include Clayton Homes, ULTX, XTRA, and other leasing and financing activities.

The manufacturing, service and retailing operations currently make up over half of the revenues.  

Valuation

Warren Buffett's preferred method for evaluating the attractiveness of investments and businesses is intrinsic value, which represents the sum of all of discounted cash flows that can be taken out of a business during its remaining life.  Whitney Tilson sees the current intrinsic value at $283,000 per share, significantly above the recent share price of $218,000.

Book value is another approach used to value Berkshire, but--as Buffett has discussed--as Berkshire began acquiring more operating businesses, the metric has underrepresented Berkshire’s intrinsic value. A book value calculation does, however, provide a floor for investors. Berkshire has an open-ended share repurchase program that authorizes management to repurchase shares if the stock price drops below 1.2x Price/Book.

The bottom line: Berkshire’s business has transformed over the years, but remains focused on long-term return and the efficient use of capital.

On April 30th, Yahoo Finance will have an exclusive live stream of the Berkshire Hathaway annual meeting. Click here for more information.