S&P Rates Berkshire Hathaway Finance Corp.

October 1, 2003

Standard & Poor’s has assigned its ‘AAA’ senior debt rating to Berkshire Hathaway Finance Corp.’s (BHFC) $1.5 billion private-placement debt securities offering based on a gurantee by the company’s parent, Berkshire Hathaway Inc. The notes will be issued with five- and 10-year maturities.

The net proceeds of this issuance are expected to be used to fund the finance operations of Vanderbilt Mortgage and Finance Inc., a wholly owned subsidiary of Clayton Homes Inc. (Clayton). Clayton is a vertically integratedmanufacturing housing company.

“The rating is based on the parent’s extremely strong financial flexibility and earnings diversification and its insurance operations’ extremely strong consolidated capital adequacy,” said Standard & Poor’s credit analyst Damien Magarelli. “Partially offsetting these strengths is the company’s exposure to market risk, execution risk in managing an amalgam of disparate risks, and reinsurance operations’ susceptibility to loss severity.”

Standard & Poor’s believes BRK will maintain its extremely strong financial leverage and insurance operations’ consolidated capital adequacy, supported by a strong, diversified earnings stream.

Although BRK is exposed to the potential negative earnings impact of large loss events and investment risk, Standard & Poor’s believes BRK’s prospective financial leverage and interest coverage will remain well within the range for the rating category.

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