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Which U.S. company has the most tangible assets on its books?

March 2, 2021, 10:25 AM UTC

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Good morning.

I’ve written here before that the biggest change in business is the switch from tangible assets—which accounted for 80% of the value of U.S. corporations four decades ago—to intangibles—which account for 85% today.

But here’s a question I didn’t know the answer to until yesterday: Which U.S. company has the most tangible assets on its books? Answer: Berkshire Hathaway. In his annual shareholder letter, Warren Buffett said the company’s holdings of plant, machinery and buildings add up to $154 billion—more than any other U.S. company. Second place is AT&T, with $127 billion.

A big chunk of that is in Berkshire’s railroad business. Another big chunk is in its electric utility business. Buffett said the shift to green energy means that “unlike railroads, our country’s electric utilities need a massive makeover in which the ultimate costs will be staggering” and “absorb all of Berkshire Hathaway Energy’s earnings for decades to come.” But he added: “we welcome the challenge and believe the added investment will be appropriately rewarded.” An infrastructure push from the federal government, no doubt, also would help.

Separately, former Amgen CEO Kevin Sharer has a new book out today, written with Adam Bryant, called “The CEO Test.” Sharer ran Amgen from 2000 to 2012, then spent eight years teaching at Harvard Business School. I talked to him recently, and asked if he thought the job of CEO had changed since he stepped down. “Oh sure, it is always changing,” he said. “Things happen faster.  Social media is a distortion device. The visibility into what’s going on and wider comment make it more challenging.” The book offers seven key tests CEOs should pass to succeed in today’s world. I asked him to give his one, best piece of advice. His answer:

“The team. Don’t break the law. Don’t run out of cash. But there is no substitute for the best team. Without the team, it isn’t going to work.”

And finally, S&P CEO Douglas Peterson was our guest on Leadership Next this week. He confirmed what we’ve said here before: that investor appetites are changing rapidly. “Investors are asking for new types of investor funds, with themes around the environment, social activities…(They) want to make sure companies are doing something that will improve the planet and give us a better future.” You can listen to the podcast on Apple or Spotify.

More news below.

Alan Murray
@alansmurray

alan.murray@fortune.com

TOP NEWS

Carbon pricing

The American Petroleum Institute, the industry's top lobbying group, is reportedly about to endorse the pricing of carbon emissions "as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action." Wall Street Journal

Citi pledge

New Citigroup CEO Jane Fraser kicked off her tenure with a pledge for the bank to achieve net-zero greenhouse-gas emissions in its financing activities within the next three decades. Fraser: "The climate crisis is among the top critical challenges facing our global society and economy. We are committed to bringing as many clients as we can along with us on this journey and working with them relentlessly to get it right." Bloomberg

Bubble fear

China's top banking regulator is "very worried" about bubbles, both in China's property sector and in global financial markets. Guo Shuqing's warning of corrections "sooner or later" knocked stocks across Asia. Fortune

AstraZeneca and Moderna

AstraZeneca sold its 7.7% stake in Moderna for over $1 billion last year. It invested in its now-rival eight years ago, but now AstraZeneca needs to shore up its finances as it buys Alexion Pharmaceuticals and develops its own pipeline. MarketWatch

AROUND THE WATER COOLER

Fighting variants

Health experts say there's a "race against time" to get ahead of the coronavirus variants that are emerging around the world. The losing formula would be to "open too quickly, vaccinate too slowly, and the variants therefore can take greater hold," says KFF global health director Jennifer Kates. Fortune

Five-year plan

Fortune's Eamon Barrett has a terrific explainer regarding China's 14th five-year plan, which is due to be ratified this week. Crucially, this one will formalize President Xi Jinping's "dual circulation" economic policy, and will also give much-needed detail about China's decarbonization drive. Fortune

Privacy compensation

A case that began when a company spammed a German lawyer could end up with severe repercussions across the EU, as the bloc's highest court will soon have to decide whether compensation should be paid out in data-protection cases even where there was insignificant harm. Politico

Fake Tom

Why do deepfake creators like Tom Cruise so much? As Fortune's Jeremy Kahn explains, one reason is probably the fact that he's been photographed so often, providing loads of the data that's needed to train an A.I. system to impersonate him. His distinctive voice and mannerisms help too. Fortune

This edition of CEO Daily was edited by David Meyer.