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Berkshire Hathaway Inc. News Release

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Berkshire Hathaway Inc. (BRK.A; BRK.B) –

Berkshire's operating results for the second quarter and first six
months of 2018 and 2017 are summarized in the following paragraphs.
However, we urge investors and reporters to read our 10-Q, which has
been posted at www.berkshirehathaway.com.
The limited information that follows in this press release is not
adequate for making an informed investment judgment
.

Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries
for the second quarter and first six months of 2018 and 2017 are
summarized below. Earnings are stated on an after-tax basis. (Dollar
amounts are in millions, except for per share amounts).

   

Second Quarter

First Six Months

2018

 

2017

2018

 

2017

 
Net earnings attributable to Berkshire shareholders $12,011 $4,262 $10,873 $8,322
Net earnings includes:
Investment and derivative gains/losses –
Investments 4,824 185 (1,439 ) 390
Derivatives 294 (42 ) 131 257
5,118 143 (1,308 ) 647
Operating earnings 6,893 4,119 12,181 7,675
Net earnings attributable to Berkshire shareholders $12,011 $4,262 $10,873 $8,322
 
Net earnings per Class A equivalent share attributable to Berkshire
shareholders

$7,301

$2,592

$6,610

$5,060

 
Average Class A equivalent shares outstanding 1,645,057 1,644,580 1,645,008 1,644,503
 

Note: Per share amounts for the Class B shares are
1/1,500
th of those shown for the Class A.

 

In 2018, due to a change in Generally Accepted Accounting
Principles ("GAAP"), we are now required to include the changes in
unrealized gains/losses of our equity security investments as a
component of investment gains/losses in our earnings statements.
In the table above, investment gains/losses in 2018 include a gain
of approximately $4.5 billion in the second quarter and a loss of
approximately $1.7 billion in the first six months of 2018 due to
changes during the second quarter of 2018 and changes during the
first six months of 2018 in the unrealized gains/losses of equity
security investments held at June 30, 2018. In 2017 and in prior
years, while changes in unrealized gains/losses were reflected in
our shareholders' equity, they were not included in our earnings
statements. Accordingly, the following statement which has been
included in each of Berkshire's earnings releases for many years
along with some additional comments (additional comments
underlined) is even more important when analyzing Berkshire's
periodic results. The amount of investment gains/losses in
any given quarter is usually meaningless and
delivers figures for net earnings per share that can be misleading
to investors who have little or no knowledge of accounting rules
.

 

An analysis of Berkshire's operating earnings follows (dollar
amounts are in millions).

 

Second Quarter

First Six Months

2018

2017

2018

2017

 
Insurance-underwriting $943 $(22 ) $1,350 $(289 )
Insurance-investment income 1,142 965 2,154 1,873
Railroad, utilities and energy 1,890 1,467 3,620 2,785
Other businesses 2,570 1,985 4,766 3,593
Other 348 (276 ) 291 (287 )
Operating earnings $6,893 $4,119 $12,181 $7,675
 

At June 30, 2018, our book value per Class A equivalent share was
$217,677. Insurance float (the net liabilities we assume under insurance
contracts) was approximately $116 billion at June 30, 2018, an increase
of $2 billion since yearend 2017.

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures. The
reconciliations of such measures to the most comparable GAAP figures in
accordance with Regulation G are included herein.

Berkshire presents its results in the way it believes will be most
meaningful and useful, as well as most transparent, to the investing
public and others who use Berkshire's financial information. That
presentation includes the use of certain non-GAAP financial measures. In
addition to the GAAP presentations of net earnings, Berkshire shows
operating earnings defined as net earnings exclusive of investment and
derivative gains/losses.

Although the investment of insurance and reinsurance premiums to
generate investment income and investment gains or losses is an integral
part of Berkshire's operations, the generation of investment gains or
losses is independent of the insurance underwriting process. Moreover,
as previously described, under applicable GAAP accounting requirements,
we are now required to include the changes in unrealized gains/losses of
our equity security investments as a component of investment
gains/losses in our periodic earnings statements. In sum, investment
gains/losses for any particular period are not indicative of quarterly
business performance.

About Berkshire

Berkshire Hathaway and its subsidiaries engage in diverse business
activities including insurance and reinsurance, utilities and energy,
freight rail transportation, finance, manufacturing, retailing and
services. Common stock of the company is listed on the New York Stock
Exchange, trading symbols BRK.A and BRK.B.

Cautionary Statement

Certain statements contained in this press release are "forward looking"
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are not guaranties of future
performance and actual results may differ materially from those
forecasted.

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