Aug 5, 2017   SOURCE: BusinessWire

Berkshire Hathaway Inc. News Release

Berkshire Hathaway (BRK.A; BRK.B) –

Berkshire’s operating results for the second quarter and first six months of 2017 and 2016 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 2017 and 2016 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

2017

 

2016

2017

 

2016

 
Net earnings attributable to Berkshire shareholders $ 4,262   $ 5,001 $ 8,322   $ 10,590  
Net earnings includes:
Investment and derivative gains/losses –
Investments 185 380 390 2,759
Derivatives   (42 )   14   257     (513 )
143 394 647 2,246
Operating earnings   4,119     4,607   7,675     8,344  
Net earnings attributable to Berkshire shareholders $ 4,262   $ 5,001 $ 8,322   $ 10,590  
 
Investment and derivative gains/losses per Class A equivalent share $ 87 $ 239 $ 393 $ 1,366
Operating earnings per Class A equivalent share   2,505     2,803   4,667     5,077  
Net earnings per Class A equivalent share attributable to Berkshire shareholders

$

2,592

 

$

3,042

$

5,060

 

$

6,443

 
 
Average Class A equivalent shares outstanding 1,644,580 1,643,745 1,644,503 1,643,616
 

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

 

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

 

Second Quarter

First Six Months

2017

2016

2017

2016

 
Insurance-underwriting $ (22 ) $ 337 $ (289 ) $ 550
Insurance-investment income 965 978 1,873 1,897
Railroad, utilities and energy 1,474 1,254 2,813 2,479
Other businesses 1,994 1,889 3,614 3,466
Other   (292 )   149   (336 )   (48 )
Operating earnings $ 4,119   $ 4,607 $ 7,675   $ 8,344  
 

Operating earnings in 2017 are net of after-tax foreign currency exchange rate losses of $464 million in the second quarter and $595 million in the first six months related to the revaluation of certain liabilities of Berkshire and its U.S. based subsidiaries denominated in currencies other than the U.S. dollar. In 2016, operating earnings included after-tax foreign currency exchange rate gains of $286 million in the second quarter and $163 million in the first six months.

In the table at the top of the page (which, as noted, reports after-tax results), we give investment and derivative gains/losses lines of their own because the amounts of these in any given quarter or year are usually meaningless.

At June 30, 2017, our book value had increased by 6.2% since yearend 2016 to $182,816 per Class A equivalent share. Insurance float (the net liabilities we assume under insurance contracts) at June 30, 2017 was approximately $107 billion, an increase of approximately $16 billion since yearend 2016.

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, under applicable GAAP accounting requirements, losses can be created as the result of other-than-temporary declines in value without actual realization or when certain types of investments are marked-to-market through earnings. In sum, investment and derivative 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.