Berkshire Hathaway(BRK_A) - 2024 Q3 - Quarterly Report

Insurance Underwriting Performance - Insurance underwriting after-tax earnings decreased by $1.7 billion in Q3 2024 compared to 2023, primarily due to Hurricane Helene losses ($ 565 million), increased liabilities for prior claims, and foreign currency exchange losses[84] - Hurricane Milton is estimated to cause pre-tax incurred losses between $1.3 billion and$ 1.5 billion, which will be reflected in Q4 2024 earnings[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 the loss ratio rising by 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 remained relatively unchanged in Q3 and the first nine months of 2024 compared to 2023, while premiums earned decreased by 5.0% in Q3 and 1.7% in the first nine months[99] - Losses and loss adjustment expenses for property/casualty increased by $364 million (12.5%) in Q3 2024 and$ 301 million (3.3%) in the first nine months of 2024, with the loss ratio rising by 9.4 percentage points in Q3 and 0.9 percentage points in the first nine months[99] - Underwriting expenses for property/casualty increased by $677 million (50.8%) in Q3 2024 and$ 793 million (19.3%) in the first nine months of 2024, including a $490 million pre-tax charge in Q3 2024[99] - Life/health premiums earned declined by$ 110 million (8.3%) in Q3 2024 and $171 million (4.5%) in the first nine months of 2024 compared to 2023, primarily due to reductions in non-U.S. life business[100] - Life and health benefits decreased by$ 217 million (21.0%) in Q3 2024 and $240 million (8.8%) in the first nine months of 2024 compared to 2023[100] - Pre-tax underwriting earnings for life/health increased to$ 98 million in Q3 2024 and $279 million in the first nine months of 2024, compared to$ 50 million and $234 million in 2023[100] - Pre-tax underwriting earnings for Life/health increased by$ 48 million in Q3 2024 and $45 million in the first nine months of 2024 compared to 2023, with gains of$ 50 million from life contract commutations in 2024[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, primarily due to loss payments[101] Insurance Investment Income - Insurance investment income after-tax earnings increased by $1.2 billion in Q3 2024 and$ 2.8 billion in the first nine months of 2024, driven by higher interest income from U.S. Treasury Bills[84] - Pre-tax net investment income increased by 56.6% in Q3 2024 and 43.5% in the first nine months of 2024 compared to 2023, driven by higher interest and other investment income[102] - Dividend income declined by 10.7% in Q3 2024 and 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 over 2023, driven by increased short-term investments[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] BNSF Performance - BNSF after-tax earnings increased by 13.3% in Q3 2024, benefiting from higher unit volume and improved employee productivity, but were offset by higher litigation charges[84] - BNSF's railroad operating revenues increased to $5.881 billion in Q3 2024 from$ 5.719 billion in Q3 2023, with operating earnings rising to $2.053 billion from$ 1.809 billion[108] - BNSF's net earnings increased to $1.383 billion in Q3 2024 from$ 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 a 16.7% volume increase in Q3 and a 16.9% increase in the first nine months[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 a 1.9% volume decline in Q3 and a 1.2% decline in the first nine months[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 a 14.9% volume increase in Q3 and a 9.6% increase in the first nine months[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 a 12.5% volume decline in Q3 and a 20.5% decline in the first nine months[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 and cost reductions[111] Berkshire Hathaway Energy (BHE) Performance - Berkshire Hathaway Energy (BHE) after-tax earnings increased by $1.1 billion in Q3 2024 and$ 1.3 billion in the first nine months of 2024, driven by lower litigation charges and higher earnings from natural gas pipelines[84] - BHE's net earnings increased by 218.1% to $1.778 billion in Q3 2024 and by 72.7% to$ 3.288 billion in the first nine months of 2024, driven by higher earnings from U.S. utilities and natural gas pipelines[113] - U.S. utilities net earnings increased by 190.6% to $926 million in Q3 2024 and by 72.7% to$ 1.569 billion in the first nine months of 2024, reflecting higher electric utility margins and income tax benefits[113] - Natural gas pipelines net earnings increased by 10.9% to $194 million in Q3 2024 and by 26.8% to$ 927 million in the first nine months of 2024, driven by higher transportation revenue and gas sales margins[113] - Other energy businesses net earnings increased by 20.9% to $358 million in Q3 2024 and by 17.4% to$ 1.019 billion in the first nine months of 2024, primarily due to higher earnings at Northern Powergrid[113] - Real estate brokerage net earnings decreased by 20.0% to $20 million in Q3 2024 and by 72.7% to -$ 96 million in the first nine months of 2024, mainly due to expense accruals related to ongoing litigation[113] Manufacturing, Service, and Retailing Performance - Manufacturing, service, and retailing after-tax earnings decreased by 5.9% in Q3 2024 and 3.5% in the first nine months of 2024, reflecting lower earnings from service and retailing businesses[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 grew 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, with pre-tax earnings increasing by 25.1% in Q3 and 23.4% in the first nine months[118] - Lubrizol's revenues increased by 2.8% in Q3 2024, with pre-tax earnings rising by 36.2% in Q3 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 relatively unchanged 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, driven by lower revenues in the Transportation Products, Metals Services, and Retail Solutions groups[118] - Building products group revenues increased by $167 million (2.5%) in Q3 and$ 450 million (2.3%) in the first nine months of 2024 compared to 2023, while pre-tax earnings decreased by $97 million (8.3%) in Q3 and$ 135 million (4.1%) in the first nine months[119] - Clayton Homes' revenues increased by 8.7% to $3.2 billion in Q3 and 8.8% to$ 9.1 billion in the first nine months of 2024, with financial services revenues up 15.2% due to higher average loan balances of $26.4 billion as of September 30, 2024[121] - Clayton Homes' pre-tax earnings declined by$ 86 million (15.6%) in Q3 and $95 million (6.3%) in the first nine months of 2024, primarily due to increased losses from insurance claims and higher interest expenses[121] - Consumer products group revenues increased by 1.2% to$ 3.8 billion in Q3 and 3.0% to $11.0 billion in the first nine months of 2024, driven by higher revenues from Forest River, Jazwares, and Brooks Sports[122] - Consumer products group pre-tax earnings increased by$ 93 million (19.3%) in Q3 and $200 million (18.0%) in the first nine months of 2024, primarily due to higher earnings from apparel and footwear businesses and Duracell[122] - Service group revenues increased by$ 30 million (0.6%) in Q3 but declined by $108 million (0.7%) in the first nine months of 2024, with TTI revenues declining by 10.0% in Q3 and 12.1% in the first nine months[125] - Service group pre-tax earnings decreased by 26.3% in both Q3 and the first nine months of 2024, primarily due to lower earnings from TTI and aviation services businesses[125] - Retailing group revenues declined by 2.8% to$ 4.7 billion in Q3 and 2.9% to $14.0 billion in the first nine months of 2024, with BHA vehicle sales revenues decreasing by 1.4% in the first nine months[127] - Retailing group pre-tax earnings declined by$ 106 million (25.6%) in Q3 and $275 million (22.2%) in the first nine months of 2024, primarily due to lower vehicle gross margins[127] - McLane revenues declined by 5.6% in Q3 and 4.5% in the first nine months of 2024, but pre-tax earnings increased by$ 29 million (25.0%) in Q3 and $94 million (26.3%) in the first nine months due to higher gross margin rates and lower operating expenses[128] GEICO Performance - GEICO's pre-tax underwriting earnings increased to$ 2.033 billion in Q3 2024 and $5.747 billion in the first nine months of 2024, driven by higher average premiums per auto policy and lower claims frequencies[91] - GEICO's premiums written increased by$ 761 million (7.3%) in Q3 2024 and $2.5 billion (8.4%) in the first nine months of 2024, reflecting a 10.1% increase in average written premiums per auto policy[91] - GEICO's loss ratio decreased to 71.4% in Q3 2024 and 72.6% in the first nine months of 2024, down by 8.6 and 9.9 percentage points respectively, due to higher earned premiums and lower claims frequencies[91] - GEICO's expense ratio decreased to 9.1% in the first nine months of 2024, down by 0.6 percentage points, due to improved operating efficiencies and increased operating leverage[91] Investment Performance - Investment gains in Q3 2024 were$ 20.5 billion, compared to a loss of $29.8 billion in Q3 2023[132] - Net earnings for Q3 2024 were$ 16.2 billion, compared to a loss of $23.5 billion in Q3 2023[132] - Pre-tax unrealized investment gains were$ 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 $629.1 billion as of September 30, 2024[134] - Berkshire repurchased$ 2.9 billion of its common stock in the first nine months of 2024[134] - Cash, cash equivalents, and U.S. Treasury Bills held by insurance and other businesses totaled $305.5 billion as of September 30, 2024[134] - Investments in equity and fixed maturity securities, excluding Kraft Heinz and Occidental, were$ 287.7 billion as of September 30, 2024[134] - Net operating cash flows for the first nine months of 2024 were $26.0 billion, including$ 17.5 billion in income tax payments[134] - Consolidated capital expenditures for property, plant, and equipment were $13.6 billion in the first nine months of 2024[134] - No Class A or Class B shares were repurchased in the third quarter of 2024[144] Legal and Regulatory Matters - Legal proceedings are not expected to have a material effect on financial condition or results of operations[141] - Significant business risks are described in the 2023 Form 10-K[142] - Forward-looking statements are subject to risks and uncertainties, including market price changes and catastrophic events[139] - No significant changes in internal control over financial reporting during the quarter[140] - Berkshire's disclosure controls and procedures are effective in timely alerting management to material information[140] - No material changes in market risks as of September 30, 2024[140] - Berkshire's common stock repurchase program allows repurchases when the price is below intrinsic value[144] Pilot Performance - Pilot's revenues declined by$ 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 average fuel prices and reduced volumes in wholesale fuel and fuel marketing businesses[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 1.0% in Q3 but declining 2.3% in the first nine months[115] - 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, as well as increased depreciation and amortization expenses[115] - Interest expense decreased by 41.6% in Q3 2024 and 24.3% in the first nine months of 2024, attributed to reduced borrowings and lower rates[115]