Berkshire Hathaway(BRK_B) - 2024 Q3 - Quarterly Report

Earnings and Financial Performance - Net earnings attributable to Berkshire Hathaway shareholders for the third quarter of 2024 were $26.251 billion, compared to a loss of$ 12.767 billion in the same period in 2023[85] - Net earnings for Q3 2024 were $16.2 billion, compared to a loss of$ 23.5 billion in Q3 2023[132] - Net earnings attributable to Berkshire shareholders were $69.3 billion for the first nine months of 2024[134] - Investment gains in Q3 2024 were$ 20.5 billion, compared to a loss of $29.8 billion in Q3 2023[132] - Pre-tax unrealized investment gains were$ 18.6 billion in Q3 2024 and $45.1 billion in the first nine months of 2024[132] - Taxable gains from equity securities sales were$ 23.4 billion in Q3 2024 and $97.1 billion in the first nine months of 2024[132] - Berkshire's shareholders' equity increased by$ 67.8 billion to $629.1 billion as of September 30, 2024[134] Insurance Operations - Insurance underwriting after-tax earnings decreased by$ 1.7 billion in the third quarter of 2024, primarily due to Hurricane Helene losses of $565 million[84] - Insurance investment income after-tax earnings increased by$ 1.2 billion in the third quarter of 2024, driven by higher interest income from U.S. Treasury Bills[84] - GEICO's pre-tax underwriting earnings increased to $2.033 billion in the third quarter of 2024, up from$ 1.053 billion in 2023, driven by higher average premiums and lower claims frequencies[91] - GEICO's premiums written increased by $761 million (7.3%) in the third quarter of 2024, with average written premiums per auto policy rising by 10.1%[91] - GEICO's loss ratio improved to 71.4% in the third quarter of 2024, down from 80.0% in 2023, reflecting higher average earned premiums and lower claims frequencies[91] - Hurricane Milton is estimated to cause pre-tax incurred losses between$ 1.3 billion and $1.5 billion, which will be reflected in the fourth quarter of 2024[87] - Premiums written increased by$ 85 million (1.7%) in Q3 2024 and $594 million (4.3%) in the first nine months of 2024 compared to 2023, driven by growth at NICO Primary, BH Direct, and BHHC[94] - Premiums earned increased by 5.3% in Q3 2024 and 9.8% in the first nine months of 2024 compared to 2023[94] - Losses and loss adjustment expenses increased by$ 1.3 billion (48.8%) in Q3 2024 and $1.7 billion (20.9%) in the first nine months of 2024, with a loss ratio increase of 25.4 percentage points in Q3 and 6.5 percentage points in the first nine months[94] - Underwriting expenses increased by$ 102 million (8.5%) in Q3 2024 and $492 million (14.7%) in the first nine months of 2024 compared to 2023[94] - Property/casualty premiums written were relatively unchanged in Q3 and the first nine months of 2024 compared to 2023, with premiums earned decreasing by 5.0% in Q3 and 1.7% in the first nine months[99] - Losses from significant catastrophe events (Hurricane Helene) were approximately$ 380 million in 2024, compared to $550 million in the first nine months of 2023[99] - Underwriting expenses increased by$ 677 million (50.8%) in Q3 2024 and $793 million (19.3%) in the first nine months of 2024, including a$ 490 million pre-tax charge related to a settlement agreement[99] - Estimated liabilities for unpaid losses and loss adjustment expenses from insurance contracts were $148.9 billion as of September 30, 2024[137] Railroad Operations (BNSF) - BNSF after-tax earnings increased by 13.3% in the third quarter of 2024, benefiting from higher unit volume and improved employee productivity[84] - BNSF's railroad operating revenues increased to$ 5.881 billion in Q3 2024 from $5.719 billion in Q3 2023, with total railroad operating earnings rising to$ 2.053 billion in Q3 2024 from $1.809 billion in Q3 2023[108] - BNSF's net earnings for Q3 2024 were$ 1.383 billion, up from $1.221 billion in Q3 2023, with an effective income tax rate of 25.1%[108] - Consumer products revenue increased by 7.0% to$ 2.1 billion in Q3 2024 and by 8.2% to $6.2 billion in the first nine months of 2024, driven by higher volumes of 16.7% and 16.9% respectively[109] - Industrial products revenue decreased by 1.6% to$ 1.4 billion in Q3 2024 and by 1.1% to $4.2 billion in the first nine months of 2024, due to lower volumes of 1.9% and 1.2% respectively[109] - Agricultural products revenue increased by 14.1% to$ 1.4 billion in Q3 2024 and by 6.5% to $4.2 billion in the first nine months of 2024, driven by higher volumes of 14.9% and 9.6% respectively[109] - Coal revenue decreased by 14.7% to$ 795 million in Q3 2024 and by 25.2% to $2.2 billion in the first nine months of 2024, due to reduced volumes of 12.5% and 20.5% respectively[111] - Railroad operating expenses decreased by 2.1% to$ 3.8 billion in Q3 2024 and by 1.5% to $11.6 billion in the first nine months of 2024, primarily due to lower fuel expenses[111] Energy Operations (Berkshire Hathaway Energy) - Berkshire Hathaway Energy (BHE) after-tax earnings increased by$ 1.1 billion in the third quarter of 2024, reflecting lower litigation-related charges and higher earnings from natural gas pipelines[84] - BHE's net earnings attributable to Berkshire Hathaway shareholders increased to $1.629 billion in Q3 2024 and$ 3.001 billion in the first nine months of 2024, compared to $498 million and$ 1.699 billion respectively in 2023[112] - U.S. utilities net earnings increased by 190.6% to $1.569 billion in the first nine months of 2024, driven by higher retail customer rates and volumes[113] - Natural gas pipelines net earnings increased by 26.8% to$ 927 million in the first nine months of 2024, due to higher transportation revenue and increased margin on gas sales[113] - Other energy businesses net earnings increased by 17.4% to $1.019 billion in the first nine months of 2024, driven by higher distribution revenue and lower income tax expense[113] Manufacturing, Service, and Retailing - Manufacturing, service, and retailing after-tax earnings decreased by 5.9% in the third quarter of 2024, with lower earnings from service and retailing businesses partially offset by gains in manufacturing[84] - Manufacturing revenues increased by 2.6% in Q3 2024 and 2.6% in the first nine months of 2024 compared to 2023, with pre-tax earnings rising by 1.9% in Q3 and 4.4% in the first nine months[116] - Service and retailing revenues declined by 3.7% in Q3 2024 and 3.3% in the first nine months of 2024, with pre-tax earnings decreasing by 21.5% in Q3 and 20.4% in the first nine months[116] - Industrial products revenues increased by$ 289 million (3.3%) in Q3 2024 and $706 million (2.7%) in the first nine months of 2024, with pre-tax earnings rising by$ 62 million (4.3%) in Q3 and $322 million (7.3%) in the first nine months[118] - PCC's revenues increased by 11.9% in Q3 2024 and 12.4% in the first nine months of 2024, driven by higher demand for aerospace and power generation products[118] - Lubrizol's pre-tax earnings increased by 36.2% in Q3 2024 and 44.7% in the first nine months of 2024, primarily due to lower raw material costs and higher sales volumes[118] - Marmon's revenues remained flat in Q3 2024 but declined by 2.6% in the first nine months of 2024, with pre-tax earnings decreasing by 13.0% in Q3 and 9.4% in the first nine months[118] - Building products group revenues increased by$ 167 million (2.5%) in Q3 2024 and $450 million (2.3%) in the first nine months of 2024 compared to 2023[119] - Clayton Homes' revenues increased by 8.7% to$ 3.2 billion in Q3 2024 and 8.8% to $9.1 billion in the first nine months of 2024 compared to 2023[121] - Clayton Homes' loan balances, net of allowances for credit losses, were approximately$ 26.4 billion as of September 30, 2024, an increase of 14.2% since September 30, 2023[121] - Consumer products group revenues increased by 1.2% to $3.8 billion in Q3 2024 and 3.0% to$ 11.0 billion in the first nine months of 2024 compared to 2023[122] - Forest River revenues increased by 6.5% in the first nine months of 2024, reflecting a 9.1% increase in unit sales[122] - Service group revenues increased by $30 million (0.6%) in Q3 2024 but declined by$ 108 million (0.7%) in the first nine months of 2024 compared to 2023[125] - Retailing group revenues declined by 2.8% to $4.7 billion in Q3 2024 and 2.9% to$ 14.0 billion in the first nine months of 2024 compared to 2023[127] - McLane revenues declined by 5.6% in Q3 2024 and 4.5% in the first nine months of 2024 compared to 2023[128] - Pre-tax earnings of the building products group decreased by $97 million (8.3%) in Q3 2024 and$ 135 million (4.1%) in the first nine months of 2024 compared to 2023[119] Investments and Cash Management - Dividend income declined by $131 million (10.7%) in Q3 2024 and$ 207 million (5.2%) in the first nine months of 2024 compared to 2023, reflecting changes in equity security holdings[104] - Interest and other investment income increased by $1.8 billion in Q3 2024 and$ 3.8 billion in the first nine months of 2024, driven by increased short-term investments including U.S. Treasury Bills[104] - Float approximated $174 billion at September 30, 2024, up from$ 169 billion at December 31, 2023[104] - Cash, cash equivalents, and U.S. Treasury Bills increased to $271.835 billion at September 30, 2024, from$ 121.845 billion at December 31, 2023[105] - Cash, cash equivalents, and U.S. Treasury Bills held by insurance and other businesses totaled $305.5 billion as of September 30, 2024[134] - After-tax equity earnings in non-controlled businesses declined by$ 27 million in Q3 2024 and $505 million in the first nine months of 2024 compared to 2023[129] Legal and Regulatory Risks - Berkshire does not believe routine litigation will have a material effect on its financial condition[141] - The company faces risks from changes in market prices of equity securities, catastrophic events, and changes in laws or regulations[139] - Berkshire is involved in various legal actions, some of which may seek punitive or exemplary damages[141] - The company's forward-looking statements are subject to risks and uncertainties, including economic and market factors[139] - Berkshire's significant business risks are described in its 2023 Form 10-K, with additional risks potentially impacting operations[142] Share Repurchases and Capital Expenditures - Berkshire repurchased$ 2.9 billion of its common stock in the first nine months of 2024[134] - No Class A or Class B shares were repurchased in the third quarter of 2024[144] - Berkshire's common stock repurchase program allows repurchases when the price is below intrinsic value[144] - Consolidated capital expenditures for property, plant, and equipment were $13.6 billion in the first nine months of 2024[134] Internal Controls and Disclosure - Berkshire's disclosure controls and procedures are effective in timely alerting management to material information[140] - No material changes in market risks as of September 30, 2024[140] - The company's internal control over financial reporting has not seen significant changes during the quarter[140] Life and Health Insurance - Life/health premiums earned declined by$ 110 million (8.3%) in Q3 2024 and $171 million (4.5%) in the first nine months of 2024, primarily due to reductions in non-U.S. life business[100] - Life and health benefits decreased to 67.1% in Q3 2024 from 77.9% in Q3 2023, and to 68.0% in the first nine months of 2024 from 74.3% in the same period of 2023[100] - Pre-tax underwriting earnings for life/health were$ 98 million in Q3 2024 and $279 million in the first nine months of 2024, compared to$ 50 million and $234 million in the respective periods of 2023[100] - Pre-tax underwriting earnings for Life/health increased by$ 48 million in Q3 2024 and $45 million in the first nine months of 2024 compared to 2023, driven by gains from life contract commutations and increased U.S. life business earnings[101] - Pre-tax underwriting losses from retroactive reinsurance decreased to$ 498 million in the first nine months of 2024 from $622 million in 2023, primarily due to net reductions in estimated ultimate claim liabilities[101] - Unpaid losses assumed under retroactive reinsurance contracts declined by$ 1.6 billion to $33.1 billion at September 30, 2024, mainly due to loss payments[101] Real Estate and Other Businesses - Real estate brokerage net earnings decreased by$ 121 million in the first nine months of 2024, primarily due to expense accruals related to ongoing litigation matters[113] - Pilot's revenues declined by $2.5 billion (19.3%) in Q3 2024 and$ 6.3 billion (14.9%) in the first nine months of 2024 compared to 2023, primarily due to lower fuel prices and reduced wholesale fuel volumes[115] - Pilot's pre-tax earnings decreased by 25.4% in Q3 2024 and 30.8% in the first nine months of 2024 compared to 2023, with gross sales margins increasing by 1.0% in Q3 but declining by 2.3% in the first nine months[115] - Pilot's selling, general, and administrative expenses increased by 14.3% in Q3 2024 and 6.6% in the first nine months of 2024, driven by higher labor, marketing, and maintenance costs[115] - Pilot's interest expense decreased by 41.6% in Q3 2024 and 24.3% in the first nine months of 2024, due to reduced borrowings and lower interest rates[115]