Berkshire Hathaway(BRK_A) - 2019 Q1 - Quarterly Report

Part I – Financial Information Item 1. Financial Statements This section presents Berkshire Hathaway Inc.'s consolidated financial statements for the first quarter ended March 31, 2019, including balance sheets, statements of earnings, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes explaining accounting policies, investments, liabilities, and segment data Consolidated Balance Sheets Consolidated Balance Sheet Highlights (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | Change (QoQ) | | :------------------- | :------------- | :---------------- | :----------- | | Assets: | | | | | Total Assets | $738,724 | $707,794 | +$30,930 | | Cash & Equivalents (Insurance & Other) | $22,487 | $27,749 | -$5,262 | | Equity Securities | $191,771 | $172,757 | +$19,014 | | Goodwill | $81,220 | $81,025 | +$195 | | Liabilities: | | | | | Total Liabilities | $366,133 | $355,294 | +$10,839 | | Shareholders' Equity: | | | | | Total Shareholders' Equity | $372,591 | $352,500 | +$20,091 | Consolidated Statements of Earnings Consolidated Statements of Earnings Highlights (First Quarter 2019 vs. 2018) | Metric (in millions, except per share) | Q1 2019 | Q1 2018 | Change (YoY) | | :----------------------------------- | :--------- | :--------- | :----------- | | Total Revenues | $60,678 | $58,473 | +$2,205 | | Investment & Derivative Gains (Losses) | $20,322 | $(8,015) | +$28,337 | | Total Costs & Expenses | $53,521 | $52,382 | +$1,139 | | Net Earnings (Loss) | $21,732 | $(1,071) | +$22,803 | | Net Earnings (Loss) Attributable to Berkshire Hathaway Shareholders | $21,661 | $(1,138) | +$22,799 | | Net Earnings (Loss) per Class A Share | $13,209 | $(692) | +$13,901 | | Net Earnings (Loss) per Class B Share | $8.81 | $(0.46) | +$9.27 | Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income Highlights (First Quarter 2019 vs. 2018) | Metric (in millions) | Q1 2019 | Q1 2018 | Change (YoY) | | :------------------- | :--------- | :--------- | :----------- | | Net Earnings (Loss) | $21,732 | $(1,071) | +$22,803 | | Other Comprehensive Income, Net | $310 | $335 | -$25 | | Comprehensive Income | $22,042 | $(736) | +$22,778 | | Comprehensive Income Attributable to Berkshire Hathaway Shareholders | $21,949 | $(811) | +$22,760 | Consolidated Statements of Changes in Shareholders' Equity Consolidated Statements of Changes in Shareholders' Equity Highlights (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | | :------------------- | :------------- | :---------------- | | Common Stock | $8 | $8 | | Capital in Excess of Par Value | $35,622 | $35,707 | | Accumulated Other Comprehensive Income | $(4,727) | $(5,015) | | Retained Earnings | $342,773 | $321,112 | | Treasury Stock, at cost | $(4,799) | $(3,109) | | Berkshire Hathaway Shareholders' Equity | $368,877 | $348,703 | | Noncontrolling Interests | $3,714 | $3,797 | | Total Shareholders' Equity | $372,591 | $352,500 | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (First Quarter 2019 vs. 2018) | Metric (in millions) | Q1 2019 | Q1 2018 | Change (YoY) | | :------------------- | :--------- | :--------- | :----------- | | Net Cash Flows from Operating Activities | $7,577 | $7,556 | +$21 | | Net Cash Flows from Investing Activities | $(10,201) | $22,308 | -$32,509 | | Net Cash Flows from Financing Activities | $(1,678) | $(3,794) | +$2,116 | | Increase (Decrease) in Cash & Equivalents | $(4,287) | $26,162 | -$30,449 | | Cash & Equivalents at End of First Quarter | $26,524 | $58,374 | -$31,850 | Notes to Consolidated Financial Statements Note 1. General - Berkshire Hathaway Inc. (Berkshire) consolidates all subsidiaries and affiliates where it holds controlling financial interests. Interim results are not always indicative of full-year results due to factors like catastrophe losses, equity security market price volatility, and fair value changes in derivatives and foreign currency denominated assets/liabilities[20] Note 2. New Accounting Pronouncements - Berkshire adopted ASC 842 'Leases' on January 1, 2019, recognizing approximately $6.2 billion in operating lease assets and $5.9 billion in lease liabilities, increasing consolidated assets and liabilities by $5.9 billion. Prior period financial statements were not restated[21] - On January 1, 2018, Berkshire adopted ASU 2016-01, ASU 2018-02, and ASC 606. ASU 2016-01 now includes unrealized gains and losses from equity securities in earnings, leading to significant volatility. ASU 2018-02 reclassified stranded deferred income tax effects to retained earnings. ASC 606 re-characterized certain aircraft fractional ownership contracts as lease contracts, increasing equipment held for lease and aircraft repurchase liabilities by approximately $3.5 billion[21][22][24] - The company is evaluating the effects of ASU 2016-13 (Credit Losses), ASU 2017-04 (Goodwill Impairment), and ASU 2018-12 (Long-Duration Contracts), which are effective for fiscal years beginning after December 15, 2019 or 2020[24] Note 3. Investments in fixed maturity securities Investments in Fixed Maturity Securities (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 (Value) | December 31, 2018 (Value) | Change (QoQ) | | :--------------------- | :--------------------- | :------------------------ | :----------- | | U.S. Treasury, Gov. Corps & Agencies | $3,918 | $4,223 | -$305 | | States, Municipalities & Political Subdivisions | $151 | $189 | -$38 | | Foreign Governments | $8,091 | $7,502 | +$589 | | Corporate Bonds | $6,724 | $7,440 | -$716 | | Mortgage-backed Securities | $531 | $544 | -$13 | | Total | $19,415 | $19,898 | -$483 | - As of March 31, 2019, approximately 88% of foreign government holdings were rated AA or higher. The majority of fixed maturity securities mature after one year through five years ($10,443 million fair value)[25][28] Note 4. Investments in equity securities Investments in Equity Securities by Industry (March 31, 2019 vs. December 31, 2018) | Industry (in millions) | March 31, 2019 (Fair Value) | December 31, 2018 (Fair Value) | Change (QoQ) | | :--------------------- | :-------------------------- | :----------------------------- | :----------- | | Banks, Insurance & Finance | $90,739 | $82,592 | +$8,147 | | Consumer Products | $70,141 | $61,621 | +$8,520 | | Commercial, Industrial & Other | $30,891 | $28,544 | +$2,347 | | Total | $191,771 | $172,757 | +$19,014 | - Approximately 68% of the aggregate fair value of equity securities was concentrated in five companies as of March 31, 2019: Apple Inc. ($48.5 billion), Bank of America Corporation ($25.4 billion), Wells Fargo & Company ($20.9 billion), The Coca-Cola Company ($18.7 billion), and American Express Company ($16.6 billion)[30] Note 5. Equity method investments - Berkshire's most significant equity method investment is in The Kraft Heinz Company, owning 26.7% of outstanding shares. The fair value of this investment was approximately $10.6 billion at March 31, 2019, down from $14.0 billion at December 31, 2018. Berkshire did not record its share of Kraft Heinz's Q1 2019 earnings due to unavailable financial information[32][35] Equity Method Earnings (First Quarter 2019 vs. 2018) | Entity (in millions) | Q1 2019 | Q1 2018 | | :------------------- | :------ | :------ | | Kraft Heinz (dividends) | $130 | $203 | | Berkadia, Pilot Flying J, ETT | $167 | $136 | | Total Equity Method Earnings | $168 | $401 | - Berkshire acquired a 38.6% interest in Pilot Flying J in October 2017 and plans to acquire an additional 41.4% interest in 2023, becoming the majority owner[35] Note 6. Investment gains/losses Investment Gains/Losses (First Quarter 2019 vs. 2018) | Category (in millions) | Q1 2019 | Q1 2018 | | :--------------------- | :--------- | :--------- | | Equity Securities (Unrealized) | $19,393 | $(7,807) | | Equity Securities (Realized) | $161 | $(240) | | Fixed Maturity Securities (Net Realized) | $(2) | $221 | | Total Investment Gains (Losses) | $19,552 | $(7,809) | - Beginning in 2018, unrealized gains and losses from changes in fair values of equity securities are included in earnings, significantly increasing volatility. Prior to 2018, these were recorded in other comprehensive income[37] Note 7. Loans and finance receivables Loans and Finance Receivables (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | | :------------------- | :------------- | :---------------- | | Loans & Finance Receivables (before allowances & discounts) | $16,767 | $16,622 | | Allowances for Uncollectible Loans | $(176) | $(177) | | Unamortized Acquisition Discounts | $(159) | $(165) | | Total | $16,432 | $16,280 | - Loans and finance receivables primarily consist of installment loans from the manufactured housing business. Provisions for loan losses were $32 million in Q1 2019 (vs. $34 million in Q1 2018), and net loan charge-offs were $33 million (vs. $35 million in Q1 2018). Approximately 99% of loan balances were performing and 97% current as of March 31, 2019[41] - An insurance subsidiary provided a $2.0 billion term loan facility to Seritage Growth Properties, with approximately $1.6 billion outstanding as of March 31, 2019[41] Note 8. Other receivables Other Receivables (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Insurance and Other: | | | | Insurance Premiums Receivable | $13,766 | $12,452 | | Reinsurance Recoverable on Unpaid Losses | $3,164 | $3,060 | | Trade Receivables | $12,957 | $12,617 | | Other | $4,188 | $3,823 | | Allowances for Uncollectible Accounts | $(365) | $(388) | | Total Insurance and Other | $33,710 | $31,564 | | Railroad, Utilities and Energy: | | | | Trade Receivables | $3,237 | $3,433 | | Other | $354 | $362 | | Allowances for Uncollectible Accounts | $(131) | $(129) | | Total Railroad, Utilities and Energy | $3,460 | $3,666 | Note 9. Inventories Inventories (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Raw Materials | $4,249 | $4,182 | | Work in Process and Other | $2,678 | $2,625 | | Finished Manufactured Goods | $4,789 | $4,541 | | Goods Acquired for Resale | $7,738 | $7,721 | | Total Inventories | $19,454 | $19,069 | Note 10. Property, plant and equipment Property, Plant and Equipment (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Insurance and Other: | | | | Gross PP&E | $40,408 | $39,827 | | Accumulated Depreciation | $(19,583) | $(19,199) | | Net Insurance and Other PP&E | $20,825 | $20,628 | | Railroad, Utilities and Energy: | | | | Gross PP&E | $170,999 | $169,435 | | Accumulated Depreciation | $(38,829) | $(37,655) | | Net Railroad, Utilities and Energy PP&E | $132,170 | $131,780 | | Total Depreciation Expense (Q1) | $1,798 | $1,760 | Note 11. Equipment held for lease Equipment Held for Lease (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Railcars | $8,992 | $8,862 | | Aircraft | $7,485 | $7,376 | | Other Equipment | $4,478 | $4,379 | | Gross Equipment Held for Lease | $20,955 | $20,617 | | Accumulated Depreciation | $(6,526) | $(6,319) | | Net Equipment Held for Lease | $14,429 | $14,298 | - Depreciation expense for equipment held for lease in Q1 2019 was $286 million, an increase from $275 million in Q1 2018[51] Note 12. Leases - As of March 31, 2019, operating lease right-of-use assets were approximately $6.2 billion and lease liabilities were approximately $6.0 billion, with a weighted average term of 7.7 years and a discount rate of 3.9%[52] Operating Lease Costs (First Quarter 2019) | Lease Cost Type (in millions) | Q1 2019 | | :---------------------------- | :------ | | Operating Lease Cost | $361 | | Short-term Lease Cost | $44 | | Variable Lease Cost | $69 | | Sublease Income | $(6) | | Total Lease Cost | $468 | Future Operating Lease Rentals to be Received (as of March 31, 2019) | Year (in millions) | Amount | | :----------------- | :----- | | 2019 | $1,932 | | 2020 | $1,928 | | 2021 | $1,363 | | 2022 | $893 | | 2023 | $529 | | Thereafter | $485 | | Total | $7,130 | Note 13. Goodwill and other intangible assets Goodwill Carrying Value (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | | :------------------- | :------------- | :---------------- | | Balance at Beginning of Year | $81,025 | $81,258 | | Acquisitions of Businesses | $159 | $376 | | Other (incl. FX translation) | $36 | $(609) | | Balance at End of Period | $81,220 | $81,025 | Other Intangible Assets (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 (Net) | December 31, 2018 (Net) | | :--------------------- | :------------------- | :---------------------- | | Trademarks and Trade Names | $4,610 | $4,618 | | Patents and Technology | $1,610 | $1,656 | | Customer Relationships | $23,644 | $23,802 | | Other | $2,040 | $2,072 | | Total | $31,904 | $32,148 | - Intangible asset amortization expense in Q1 2019 was $333 million, down from $352 million in Q1 2018. Intangible assets with indefinite lives were $18.9 billion at March 31, 2019[59] Note 14. Derivative contracts Equity Index Put Option Contracts (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | | :------------------- | :------------- | :---------------- | | Liabilities | $1,682 | $2,452 | | Notional Value | $26,522 | $26,759 | | Aggregate Intrinsic Value | $957 | $1,653 | - Berkshire recorded pre-tax gains of $770 million in Q1 2019 from equity index put option contracts, a significant improvement from losses of $206 million in Q1 2018. The weighted average life of unexpired contracts was approximately 1.65 years at March 31, 2019, with $12.2 billion in notional value expiring over the remainder of 2019[61] - Derivative contract liabilities for regulated utilities were $99 million at March 31, 2019, largely offset by regulatory assets, indicating probable recovery through rates[61] Note 15. Supplemental cash flow information Supplemental Cash Flow Information (First Quarter 2019 vs. 2018) | Metric (in millions) | Q1 2019 | Q1 2018 | | :------------------- | :------ | :------ | | Cash Paid for Income Taxes | $464 | $289 | | Cash Paid for Interest (Insurance & Other) | $395 | $421 | | Cash Paid for Interest (Railroad, Utilities & Energy) | $683 | $747 | | Right-of-Use Assets Obtained for New Operating Lease Liabilities | $170 | $0 | Note 16. Unpaid losses and loss adjustment expenses Changes in Claim Liabilities (First Quarter 2019 vs. 2018) | Metric (in millions) | Q1 2019 | Q1 2018 | | :------------------- | :------ | :------ | | Gross Liabilities (Beginning of Year) | $68,458 | $61,122 | | Total Incurred Losses & LAE | $9,899 | $8,722 | | Total Paid Losses & LAE | $(9,007) | $(7,850) | | Gross Liabilities (March 31) | $69,535 | $62,094 | - In Q1 2019, estimated ultimate liabilities for prior years' events increased by $112 million, compared to a net decrease of $753 million in Q1 2018. This included a $100 million reduction in primary insurance liabilities (vs. $571 million in 2018) and a $212 million increase in property and casualty reinsurance liabilities (vs. $182 million decrease in 2018)[65][67] Note 17. Retroactive reinsurance contracts Retroactive Reinsurance Liabilities and Deferred Charges (March 31, 2019 vs. December 31, 2018) | Metric (in millions) | March 31, 2019 | December 31, 2018 | | :------------------- | :------------- | :---------------- | | Unpaid Losses & LAE | $41,633 | $41,834 | | Deferred Charges Reinsurance Assumed | $(13,831) | $(14,104) | - Incurred losses and loss adjustment expenses related to prior years' contracts were $275 million in Q1 2019, up from $241 million in Q1 2018. This includes approximately $156 million in deferred charge amortization related to the AIG contract in Q1 2019[69] - Estimated ultimate claim liabilities for the AIG contract were $18.2 billion at March 31, 2019, with related deferred charge assets of approximately $6.8 billion[69] Note 18. Notes payable and other borrowings Notes Payable and Other Borrowings (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Insurance and Other: | | | | Berkshire Hathaway Inc. (USD) | $9,066 | $9,065 | | Berkshire Hathaway Inc. (Euro) | $7,638 | $7,806 | | BHFC | $9,928 | $10,650 | | Other Subsidiary Borrowings | $5,519 | $5,597 | | Subsidiary Short-term Borrowings | $1,696 | $1,857 | | Total Insurance and Other | $33,847 | $34,975 | | Railroad, Utilities and Energy: | | | | BHE Senior Unsecured Debt | $8,578 | $8,577 | | Subsidiary & Other Debt | $29,337 | $28,196 | | Short-term Borrowings | $2,214 | $2,516 | | BNSF | $23,217 | $23,226 | | Total Railroad, Utilities and Energy | $63,346 | $62,515 | - Berkshire's Euro-denominated senior notes generated pre-tax gains of $170 million in Q1 2019 due to changes in the Euro/U.S. Dollar exchange rate, compared to losses of $217 million in Q1 2018[71] - BHFC issued $2.0 billion in senior notes and repaid $2.7 billion in Q1 2019. BHE and its subsidiaries issued approximately $3.0 billion in long-term debt in Q1 2019, with proceeds used for debt repayment, capital expenditures, and general corporate purposes[71][72] Note 19. Fair value measurements - Berkshire categorizes financial assets and liabilities into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[79] Fair Value Hierarchy for Key Financial Instruments (March 31, 2019, in millions) | Instrument | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | | :----------------------------------- | :------------- | :--------- | :------ | :------ | :------ | | Investments in Fixed Maturity Securities | $19,415 | $19,415 | $8,686 | $10,755 | $4 | | Investments in Equity Securities | $191,771 | $191,771 | $191,420 | $50 | $301 | | Investment in Kraft Heinz Common Stock | $13,686 | $10,626 | $10,626 | $0 | $0 | | Loans and Finance Receivables | $16,432 | $16,459 | $0 | $1,641 | $14,818 | | Equity Index Put Options (Liabilities) | $1,682 | $1,682 | $0 | $0 | $1,682 | - Equity index put option contracts are classified as Level 3 due to illiquidity and non-standard terms, valued using the Black-Scholes model with observable inputs for index price, duration, dividend, and interest rates, but unobservable volatility inputs[83] Note 20. Common stock - As of March 31, 2019, there were 723,755 Class A shares and 1,367,516,917 Class B shares outstanding. Class A shares have 1 vote per share, Class B shares have 1/10,000th of a Class A vote, and Class B shares are economically equivalent to 1/1,500th of a Class A share[2][84] - Berkshire's common stock repurchase program was amended on July 17, 2018, allowing repurchases when Warren Buffett and Charlie Munger believe the price is below intrinsic value, provided consolidated cash, cash equivalents, and U.S. Treasury Bills remain above $20 billion[86][180] - In Q1 2019, Berkshire repurchased Class A and B common stock for an aggregate cost of approximately $1.7 billion[180] Note 21. Accumulated other comprehensive income Accumulated Other Comprehensive Income (March 31, 2019 vs. December 31, 2018) | Category (in millions) | March 31, 2019 | December 31, 2018 | | :--------------------- | :------------- | :---------------- | | Unrealized Appreciation of Investments, Net | $463 | $370 | | Foreign Currency Translation | $(4,446) | $(4,603) | | Defined Benefit Pension Plans | $(766) | $(816) | | Other | $22 | $34 | | Total | $(4,727) | $(5,015) | - Net other comprehensive income before reclassifications was $271 million in Q1 2019, primarily driven by unrealized appreciation of investments and foreign currency translation[88] Note 22. Income taxes - Consolidated effective income tax rates were 21.4% in Q1 2019 and 29.7% in Q1 2018. The rate reflects benefits from dividends-received deductions and production tax credits[89] - In Q1 2019, Berkshire recorded a $377 million income tax expense for uncertain tax positions related to investments in tax equity investment funds, believing the previously recognized tax benefits are likely invalid due to alleged fraudulent conduct by the sponsor[89][177] Note 23. Revenues from contracts with customers Customer Contract Revenues by Segment (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 | Q1 2018 | | :------------------------ | :------ | :------ | | Manufacturing | $14,193 | $13,886 | | McLane Company | $12,180 | $12,172 | | Service & Retailing | $5,894 | $5,647 | | BNSF | $5,713 | $5,580 | | Berkshire Hathaway Energy | $4,412 | $4,224 | | Total Customer Contract Revenues | $42,392 | $41,509 | - Other revenues, not within the scope of ASC 606, primarily include insurance premiums earned, interest, dividend, and other investment income, and leasing revenues[92] Transaction Price Allocated to Unsatisfied Performance Obligations (March 31, 2019, in millions) | Category | Less than 12 months | Greater than 12 months | Total | | :------------------------ | :------------------ | :--------------------- | :---- | | Electricity and Natural Gas | $918 | $5,796 | $6,714 | | Other Sales and Service Contracts | $1,278 | $1,750 | $3,028 | Note 24. Contingencies and Commitments - Berkshire is involved in various legal actions arising from normal business operations, including insurance and reinsurance contracts. Management believes these will not have a material effect on financial condition or results of operations[96] - On April 30, 2019, Berkshire committed to invest $10 billion in Occidental Petroleum Corporation, contingent on Occidental's acquisition of Anadarko. The investment includes newly issued Occidental Cumulative Perpetual Preferred Stock (8% dividends) and warrants to purchase 80.0 million shares of common stock at $62.50 per share[97] Note 25. Business segment data - Berkshire organizes its reportable business segments based on how management views business activities, grouping similar products/services, marketing, selling, and distribution characteristics[98] Revenues of Operating Businesses (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 | Q1 2018 | | :------------------------ | :------ | :------ | | Insurance | $15,806 | $14,586 | | BNSF | $5,762 | $5,624 | | Berkshire Hathaway Energy | $4,672 | $4,512 | | Manufacturing | $15,070 | $14,722 | | McLane Company | $12,199 | $12,189 | | Service and Retailing | $7,025 | $6,815 | | Total Operating Businesses | $60,534 | $58,448 | Earnings (Loss) Before Income Taxes of Operating Businesses (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 | Q1 2018 | | :------------------------ | :------ | :------ | | Insurance | $1,972 | $1,723 | | BNSF | $1,665 | $1,513 | | Berkshire Hathaway Energy | $540 | $487 | | Manufacturing | $2,194 | $2,207 | | McLane Company | $111 | $60 | | Service and Retailing | $621 | $573 | | Total Operating Businesses | $7,103 | $6,563 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Berkshire Hathaway's financial performance and condition for the first quarter of 2019, highlighting significant changes in net earnings driven by investment and derivative gains, and detailing results across its diverse operating segments including insurance, railroad, utilities and energy, and manufacturing, service and retailing Net Earnings (Loss) Attributable to Berkshire Hathaway Shareholders (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 | Q1 2018 | | :----------------------------------- | :------ | :------ | | Insurance – Underwriting | $389 | $407 | | Insurance – Investment Income | $1,237 | $1,012 | | Railroad | $1,253 | $1,145 | | Utilities and Energy | $605 | $585 | | Manufacturing, Service and Retailing | $2,200 | $2,127 | | Investment and Derivative Gains/Losses | $16,106 | $(6,426) | | Other | $(129) | $12 | | Total Net Earnings (Loss) | $21,661 | $(1,138) | - Net earnings attributable to shareholders significantly increased to $21.7 billion in Q1 2019 from a loss of $1.1 billion in Q1 2018, primarily due to $16.1 billion in after-tax investment and derivative gains, which included $15.1 billion from unrealized gains on equity securities[102] - The company operates on a highly decentralized basis, with minimal corporate involvement in day-to-day business activities, focusing instead on capital allocation, investment, and CEO selection for operating businesses[102] Results of Operations - Insurance underwriting earnings decreased slightly to $389 million in Q1 2019 (from $407 million in Q1 2018), while insurance investment income increased 22.2% due to higher short-term interest rates and dividend income[102] - Railroad earnings increased 9.4% in Q1 2019, benefiting from higher rates per car/unit and a retirement plan curtailment gain, despite negative impacts from severe winter weather and flooding[102] - Utilities and energy earnings rose 3.4%, and manufacturing, service, and retailing earnings increased 3.4% in Q1 2019, though underlying business operations were mixed[102] Insurance—Underwriting Berkshire's insurance businesses are managed with distinct underwriting and investing activities. Underwriting performance is evaluated separately from investment income and gains/losses, which are considered non-operating. Catastrophe losses and changes in unpaid loss estimates can significantly impact periodic underwriting results Pre-tax Underwriting Gain (Loss) by Insurance Business (First Quarter 2019 vs. 2018, in millions) | Business | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | GEICO | $770 | $677 | | Berkshire Hathaway Reinsurance Group | $(253) | $(258) | | Berkshire Hathaway Primary Group | $(30) | $99 | | Total Pre-tax Underwriting Gain | $487 | $518 | - Unpaid loss estimates, including retroactive reinsurance contracts, were approximately $111 billion as of March 31, 2019[104] GEICO GEICO Underwriting Results (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Premiums Written | $9,263 | $8,689 | | Premiums Earned | $8,622 | $7,915 | | Losses & Loss Adjustment Expenses | $6,556 | $6,075 | | Underwriting Expenses | $1,296 | $1,163 | | Pre-tax Underwriting Gain | $770 | $677 | - GEICO's premiums written and earned increased by 6.6% and 8.9% respectively in Q1 2019, driven by 3.6% policy-in-force growth and a 4.0% increase in premiums per auto policy due to rate increases and mix changes[108] - The loss ratio improved to 76.1% in Q1 2019 (from 76.7% in Q1 2018), partly due to an $83 million reduction in prior years' claim loss estimates (vs. $407 million in 2018). Underwriting expenses increased 11.4% due to higher advertising, premium taxes, and employee costs[108] Berkshire Hathaway Reinsurance Group BHRG offers property/casualty, life/health, and retroactive reinsurance, as well as periodic payment annuity contracts. The group aims for pre-tax underwriting profits, except for retroactive reinsurance and periodic payment annuities where time-value-of-money concepts lead to expected underwriting losses due to long liability durations BHRG Premiums Earned and Pre-tax Underwriting Results (First Quarter 2019 vs. 2018, in millions) | Product Line | Q1 2019 Premiums Earned | Q1 2018 Premiums Earned | Q1 2019 Pre-tax Underwriting Gain (Loss) | Q1 2018 Pre-tax Underwriting Gain (Loss) | | :-------------------------- | :---------------------- | :---------------------- | :--------------------------------------- | :--------------------------------------- | | Property/Casualty | $2,322 | $2,026 | $(40) | $130 | | Retroactive Reinsurance | $3 | $0 | $(323) | $(311) | | Life/Health | $1,027 | $1,234 | $280 | $96 | | Periodic Payment Annuity | $194 | $280 | $(170) | $(173) | | Total | $3,546 | $3,540 | $(253) | $(258) | Property/casualty - Property/casualty premiums earned increased 14.6% to $2.3 billion in Q1 2019, driven by new business and increased participations in both property and casualty lines. Losses and loss adjustment expenses increased 27.5% to $1.8 billion[113] - Q1 2019 losses included a $212 million increase in estimated ultimate claim liabilities for prior years' events (compared to a $182 million decrease in Q1 2018), resulting in a pre-tax underwriting loss of $40 million (vs. a $130 million gain in Q1 2018)[113] Retroactive reinsurance - Pre-tax underwriting losses from retroactive reinsurance were $323 million in Q1 2019 (vs. $311 million in Q1 2018), including $52 million in foreign currency re-measurement losses (vs. $60 million in Q1 2018)[114] - Deferred charge amortization, primarily from the AIG contract, contributed approximately $156 million to losses in Q1 2019 (vs. $147 million in Q1 2018). Gross unpaid losses were $41.6 billion at March 31, 2019[114] Life/health - Life/health premiums earned decreased 16.8% to $1.0 billion in Q1 2019, mainly due to a contract amendment that eliminated BHLN's exposure under a major U.S. reinsurer contract, partially offset by growth in Asia life markets[117] - Pre-tax underwriting gains significantly increased to $280 million in Q1 2019 (from $96 million in Q1 2018), including a one-time pre-tax gain of approximately $160 million from the BHLN contract amendment[117] Periodic payment annuity - Periodic payment annuity premiums earned decreased 30.7% to $194 million in Q1 2019, reflecting the price-sensitive nature of the business. Pre-tax losses were $170 million (vs. $173 million in Q1 2018)[118] - Losses included $28 million from foreign currency re-measurement in Q1 2019 (vs. $70 million in Q1 2018). Discounted annuity liabilities were approximately $12.7 billion at March 31, 2019, with a weighted average discount rate of 4.1%[118] Berkshire Hathaway Primary Group BH Primary Underwriting Results (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Premiums Written | $2,341 | $2,161 | | Premiums Earned | $2,151 | $1,918 | | Losses & Loss Adjustment Expenses | $1,570 | $1,251 | | Underwriting Expenses | $611 | $568 | | Pre-tax Underwriting Gain (Loss) | $(30) | $99 | - Premiums written and earned increased by 8.3% and 12.1% respectively in Q1 2019, driven by growth in BH Specialty, GUARD, NICO Primary, and the MLMIC acquisition[122] - BH Primary reported a pre-tax underwriting loss of $30 million in Q1 2019 (vs. a $99 million gain in Q1 2018), with the aggregate loss ratio increasing to 73.0% (from 65.2%). This was due to additional estimated claim liabilities for legacy casualty exposures and lower net gains from prior accident years' liabilities[122] Insurance—Investment Income Insurance investment income increased significantly in Q1 2019, driven by higher interest rates on short-term investments and increased dividend income from a larger investment portfolio. The company maintains substantial liquidity, prioritizing safety over yield for short-term investments Net Investment Income Attributable to Insurance Operations (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Interest & Other Investment Income | $513 | $452 | | Dividend Income | $972 | $753 | | Pre-tax Investment Income | $1,485 | $1,205 | | Net Investment Income | $1,237 | $1,012 | - Pre-tax interest and other investment income increased 13.5% in Q1 2019, primarily due to higher interest rates on short-term investments. Dividend income increased 29.1% due to overall increased investment levels and higher dividend rates[124] - Float (net liabilities under insurance contracts) approximated $124 billion at March 31, 2019, with an average cost of float being negative in Q1 2019 due to underwriting earnings[124] Railroad ("Burlington Northern Santa Fe") BNSF, one of North America's largest railroad systems, saw increased revenues and pre-tax earnings in Q1 2019 despite severe weather and flooding. Growth was driven by higher average revenue per car/unit, particularly in consumer and industrial products, while coal and agricultural products experienced volume declines BNSF Earnings Summary (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Revenues | $5,762 | $5,624 | | Total Operating Expenses | $3,829 | $3,855 | | Interest Expense | $268 | $256 | | Pre-tax Earnings | $1,665 | $1,513 | | Net Earnings | $1,253 | $1,145 | - BNSF's revenues increased 2.5% to $5.8 billion in Q1 2019, with an 8.5% increase in average revenue per car/unit, but aggregate volumes decreased 5.4% due to severe weather and flooding[132] - Operating expenses decreased 0.7% to $3.8 billion, improving the operating ratio by 2.0 percentage points to 66.5%. This was partly due to a retirement plan curtailment gain, offsetting increased compensation and benefits[132] Utilities and Energy ("Berkshire Hathaway Energy Company") BHE, a global energy business, saw increased revenues and pre-tax earnings in Q1 2019. Regulated utilities are passing benefits of lower income tax expense from TCJA to customers. Performance varied across its diverse portfolio, including regulated utilities, natural gas pipelines, and real estate brokerage BHE Revenues and Earnings (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 Revenues | Q1 2018 Revenues | Q1 2019 Earnings | Q1 2018 Earnings | | :-------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | PacifiCorp | $1,281 | $1,202 | $222 | $173 | | MidAmerican Energy Company | $872 | $767 | $84 | $40 | | NV Energy | $628 | $625 | $36 | $40 | | Northern Powergrid | $263 | $275 | $99 | $109 | | Natural Gas Pipelines | $376 | $379 | $238 | $219 | | Other Energy Businesses | $464 | $500 | $(7) | $20 | | Real Estate Brokerage | $788 | $764 | $(24) | $(10) | | Corporate Interest | $0 | $0 | $(108) | $(104) | | Total BHE | $4,672 | $4,512 | $540 | $487 | - BHE's effective income tax rates were (24.1%) in Q1 2019 and (34.3%) in Q1 2018, reflecting significant production tax credits from wind-powered electricity generation[150] PacifiCorp - PacifiCorp's revenues increased 7% to $1.3 billion in Q1 2019, driven by a 4.3% increase in retail volumes and higher average rates. Pre-tax earnings increased 28% to $222 million[137][138] MidAmerican Energy Company - MEC's revenues increased 14% to $872 million in Q1 2019, with electric operating revenues up $73 million and natural gas revenues up $20 million. Pre-tax earnings increased $44 million[139][141] - After-tax earnings increased 84% to $190 million, benefiting from significant production tax credits related to wind-powered generating facilities[141] NV Energy - NV Energy's revenues were relatively unchanged at $628 million in Q1 2019, with lower natural gas rates offset by higher customer usage and retail electric volumes. Pre-tax earnings decreased 10% to $36 million[142][143] Northern Powergrid - Northern Powergrid's revenues decreased $12 million in Q1 2019 due to unfavorable foreign currency translation effects, leading to a 9% decrease in pre-tax earnings[144] Natural gas pipelines - Natural gas pipelines' revenues declined 1% in Q1 2019, but pre-tax earnings increased 9% to $238 million, primarily due to higher transportation revenues at Northern Natural Gas[145] Other energy businesses - Other energy revenues declined 7% in Q1 2019, and pre-tax earnings decreased $27 million due to increased pre-tax losses from tax equity renewable energy investments, largely offset by income tax benefits[146] Real estate brokerage - Real estate brokerage revenues increased 3% in Q1 2019 due to acquisitions, but pre-tax losses increased $14 million due to lower net revenues at existing businesses and higher interest expense[147] Corporate interest - Corporate interest expense increased 4% in Q1 2019 due to higher average borrowings[148] Income taxes - BHE's effective income tax rate increased in Q1 2019 primarily due to benefits recognized in 2018 related to foreign earnings and accrued repatriation tax, partially offset by increased production tax credits and favorable ratemaking[150] Manufacturing, Service and Retailing This segment encompasses a diverse range of industrial, building, consumer products, and various service and retailing businesses. Overall revenues increased slightly in Q1 2019, but pre-tax earnings saw a minor decrease, with mixed results across sub-groups due to varying market demands, cost pressures, and foreign currency effects Manufacturing, Service and Retailing Revenues and Earnings (First Quarter 2019 vs. 2018, in millions) | Segment | Q1 2019 Revenues | Q1 2018 Revenues | Q1 2019 Pre-tax Earnings | Q1 2018 Pre-tax Earnings | | :-------------------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Manufacturing | $15,070 | $14,722 | $2,194 | $2,207 | | Service and Retailing | $19,224 | $19,004 | $732 | $633 | | Total | $34,294 | $33,726 | $2,926 | $2,840 | - Aggregate revenues increased 1.7% to $34.3 billion in Q1 2019, while pre-tax earnings increased 3.0% to $2.9 billion. The effective income tax rate remained stable at 24.5%[152] Manufacturing The manufacturing group, comprising industrial, building, and consumer products, experienced a slight revenue increase but a minor decline in pre-tax earnings in Q1 2019. Performance was mixed, with some sectors benefiting from demand while others faced cost pressures and foreign currency headwinds Manufacturing Revenues and Pre-tax Earnings by Group (First Quarter 2019 vs. 2018, in millions) | Group | Q1 2019 Revenues | Q1 2018 Revenues | Q1 2019 Pre-tax Earnings | Q1 2018 Pre-tax Earnings | | :-------------------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Industrial Products | $7,677 | $7,619 | $1,431 | $1,467 | | Building Products | $4,562 | $4,080 | $482 | $447 | | Consumer Products | $2,831 | $3,023 | $281 | $293 | | Total | $15,070 | $14,722 | $2,194 | $2,207 | - Aggregate revenues increased 2.4% to $15.1 billion, while pre-tax earnings decreased 0.6% to $2.2 billion in Q1 2019[157] Industrial products - Industrial products revenues increased 0.8% to $7.7 billion in Q1 2019, but pre-tax earnings decreased 2.5% to $1.4 billion, with margins declining to 18.6% (from 19.3%)[158] - PCC's revenues increased 3.1% due to aerospace demand, but margins were affected by incremental production costs. Lubrizol's revenues declined 3.6% due to lower volumes and unfavorable foreign currency, impacting earnings[158] - Marmon's revenues increased 1.2%, but pre-tax earnings decreased 3.1% due to lower railcar lease rates, sales volume declines in some sectors, and depressed margins from U.S. tariffs[158] Building products - Building products revenues increased 11.8% to $4.6 billion in Q1 2019, and pre-tax earnings increased 7.8% to $482 million, though margins slightly declined to 10.6% (from 11.0%)[160] - Clayton Homes' revenues increased 25% to $1.6 billion, driven by a 33% increase in home sales and higher interest income from lending activities. Pre-tax earnings increased 11% to $216 million[160] - Other building products businesses saw a 6% revenue increase due to higher hard surface flooring and roofing volumes, with generally higher selling prices offsetting moderating raw material costs[160] Consumer products - Consumer products revenues decreased 6.4% to $2.8 billion in Q1 2019, primarily due to declines at Forest River (16% revenue decline, 18% unit sales decline) and Duracell (6% revenue decline)[161] - Pre-tax earnings decreased 4.1% to $281 million, with a 24% decline at Forest River partially offset by increases from Brooks Sports, apparel businesses, and Richline[161] Service and retailing The service and retailing group experienced mixed results in Q1 2019. Service businesses saw revenue and earnings growth, particularly in electronic components distribution and fractional aircraft ownership. Retailing, however, faced revenue declines in home furnishings, candies, and party supplies, leading to a decrease in pre-tax earnings Service and Retailing Revenues and Pre-tax Earnings (First Quarter 2019 vs. 2018, in millions) | Group | Q1 2019 Revenues | Q1 2018 Revenues | Q1 2019 Pre-tax Earnings | Q1 2018 Pre-tax Earnings | | :-------------------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Service | $3,418 | $3,173 | $472 | $415 | | Retailing | $3,607 | $3,642 | $149 | $158 | | McLane Company | $12,199 | $12,189 | $111 | $60 | | Total | $19,224 | $19,004 | $732 | $633 | Service - Service group revenues increased 7.7% to $3.4 billion in Q1 2019, primarily driven by TTI (15% increase due to demand for electronic components) and NetJets (5% increase from more aircraft on lease and flight hours)[165] - Pre-tax earnings increased 13.7% to $472 million, with margins improving to 13.8% (from 13.1%), largely attributable to TTI and NetJets[165] Retailing - Retailing group revenues decreased 1.0% to $3.6 billion in Q1 2019. BHA revenues increased 1.3% due to pre-owned vehicle sales and finance activities, but new auto sales declined 4%[166] - Revenues for See's Candies and Oriental Trading declined 19% and 11% respectively, due to the timing of the Easter holiday. Home furnishings revenues declined 4% due to slowing consumer demand and unfavorable weather[166] - Pre-tax earnings decreased 5.7% to $149 million, with home furnishings retailers experiencing a 42% decline in earnings. This was partially offset by increased earnings from BHA's finance and service contract activities[166] McLane Company - McLane's revenues were relatively unchanged at $12.2 billion in Q1 2019, with a 1.5% decrease in grocery sales and a 2.7% increase in foodservice sales[167] - Pre-tax earnings increased 85% to $111 million in Q1 2019, primarily due to lower LIFO inventory valuation allowances and gains from increased prices on certain inventory items. The company expects competitive business conditions and low operating margins to continue[167][168] Investment and Derivative Gains/Losses This section details the significant impact of investment and derivative gains/losses on Berkshire's earnings. The adoption of a new accounting standard in 2018 has introduced substantial volatility by including unrealized gains/losses from equity securities in periodic earnings. Derivative contracts, particularly equity index put options, also contributed to significant gains in Q1 2019 Investment and Derivative Gains/Losses (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Investment Gains (Losses) | $19,552 | $(7,809) | | Derivative Gains (Losses) | $770 | $(206) | | Pre-tax Gains (Losses) | $20,322 | $(8,015) | | Net Gains (Losses) | $16,106 | $(6,426) | Investment gains/losses - Pre-tax investment gains/losses in Q1 2019 included $19.4 billion in net unrealized gains from equity securities still held, compared to $7.8 billion in net unrealized losses in Q1 2018. This change is due to a new accounting pronouncement adopted in 2018[172] - Management believes these investment gains/losses, whether realized or unrealized, are often meaningless for understanding reported consolidated earnings or evaluating periodic economic performance due to their inherent volatility[172] Derivative gains/losses - Derivative contracts, primarily equity index put options, generated pre-tax gains of $770 million in Q1 2019, a significant improvement from losses of $206 million in Q1 2018. Gains were driven by higher equity index values, favorable foreign currency exchange rates, and shorter average contract durations[173] - As of March 31, 2019, the intrinsic value of equity index put option contracts was approximately $1.0 billion, with recorded liabilities at fair value of $1.7 billion. Contracts with an aggregate notional value of $12.2 billion are set to expire over the remainder of 2019[173] Other The 'Other' category reflects a net loss in Q1 2019, primarily due to a significant income tax expense adjustment related to uncertain tax positions in investment funds, partially offset by positive foreign exchange rate effects on Euro-denominated debt After-tax Other Earnings/Losses (First Quarter 2019 vs. 2018, in millions) | Metric | Q1 2019 | Q1 2018 | | :-------------------------- | :------ | :------ | | Equity Method Earnings | $166 | $340 | | Acquisition Accounting Expenses | $(192) | $(218) | | Corporate Interest Expense (before FX) | $(74) | $(77) | | Corporate Interest Expense (Euro note FX) | $134 | $(163) | | Income Tax Expense Adjustment | $(377) | $0 | | Other | $214 | $130 | | Net Earnings (Losses) | $(129) | $12 | - Equity method earnings in Q1 2019 did not include Berkshire's share of Kraft Heinz's earnings due to unavailable financial statements. Kraft Heinz contributed $234 million in Q1 2018[177] - A $377 million income tax expense adjustment was recorded in Q1 2019 for uncertain tax positions related to investments in tax equity investment funds, as previously recognized tax benefits are now believed to be invalid[177] Financial Condition Berkshire Hathaway maintains a strong financial condition with significant liquidity and capital. Consolidated shareholders' equity increased by $20.2 billion in Q1 2019, driven by net earnings. The company holds substantial cash and investments, while managing its diverse debt portfolio across parent and subsidiary levels - Consolidated shareholders' equity increased by $20.2 billion to approximately $369 billion at March 31, 2019, primarily due to $21.7 billion in net earnings, which included $15.5 billion in after-tax investment gains[178] - Insurance and other businesses held approximately $110.5 billion in cash, cash equivalents, and U.S. Treasury Bills at March 31, 2019, including $89.9 billion in U.S. Treasury Bills[178] - Berkshire's parent company debt decreased by $167 million to $16.7 billion, while insurance and other subsidiary borrowings declined by $1 billion to $17.1 billion. BNSF's debt was stable at $23.2 billion, and BHE's borrowings increased by $840 million to $40.1 billion[178] Contractual Obligations - Contractual obligations as of March 31, 2019, were not materially different from those disclosed in the 2018 Annual Report on Form 10-K, except for the inclusion of operating lease obligations in the balance sheet due to a new accounting pronouncement[181] - The timing and amount of payments under certain contracts, such as insurance and reinsurance, are contingent on future events and may vary materially from current estimates[181] Critical Accounting Policies - Key accounting policies involve significant estimates and judgments, particularly for estimated liabilities for unpaid losses and loss adjustment expenses (approximately $111 billion at March 31, 2019) and goodwill of acquired businesses (approximately $81 billion). Small changes in these estimates can materially affect periodic earnings[182] - Goodwill is evaluated for impairment at least annually, with the most recent review in Q4 2018. A goodwill impairment charge could materially affect periodic earnings[182] Forward-Looking Statements - The report contains forward-looking statements, which are predictive and subject to risks, uncertainties, and assumptions. Actual results may differ materially due to factors such as changes in market prices of investments, losses from derivative contracts, catastrophic events, regulatory changes, tax law changes, and general economic conditions[184] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the market risk disclosures in Berkshire's most recent Annual Report on Form 10-K, stating that there were no material changes in market risks as of March 31, 2019 - No material changes in market risks were identified as of March 31, 2019, compared to those described in the Annual Report on Form 10-K for the year ended December 31, 2018[185] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of the end of the reporting period. No significant changes in internal control over financial reporting occurred during the quarter - The Company's disclosure controls and procedures were evaluated and deemed effective in timely alerting management to material information for SEC filings[186] - No significant changes in the Company's internal control over financial reporting or other factors that could significantly affect it occurred during the quarter[186] Part II – Other Information Item 1. Legal Proceedings Berkshire and its subsidiaries are involved in routine legal actions arising from normal business, including insurance and reinsurance claims. Management believes these proceedings, including those seeking punitive damages or imposing fines, will not materially affect the company's financial condition or results of operations - Routine legal actions, including those seeking punitive damages or fines, are not expected to have a material effect on Berkshire's financial condition or results of operations[188] Item 1A. Risk Factors This section refers to the significant business risks detailed in Item 1A of Berkshire's Form 10-K for the year ended December 31, 2018 - Significant business risks are consistent with those described in Item 1A of the Form 10-K for the year ended December 31, 2018[189] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities Berkshire's common stock repurchase program, amended in July 2018, allows repurchases when the price is below intrinsic value, as determined by Warren Buffett and Charlie Munger, provided consolidated cash, cash equivalents, and U.S. Treasury Bills remain above $20 billion. The company repurchased approximately $1.7 billion of Class A and B common stock in Q1 2019 - The common stock repurchase program allows repurchases when the price is below intrinsic value, with no specified maximum number of shares or expiration date, but requires maintaining over $20 billion in cash, cash equivalents, and U.S. Treasury Bills[190][193] Issuer Repurchases of Equity Securities (First Quarter 2019) | Period | Class | Total Shares Purchased | Average Price Paid Per Share | | :-------------------------- | :---------- | :--------------------- | :--------------------------- | | Feb 26 – Feb 28 | Class A | 293 | $302,622.16 | | Feb 26 – Feb 28 | Class B | 595,412 | $201.73 | | Mar 1 – Mar 29 | Class A | 965 | $304,175.15 | | Mar 1 – Mar 29 | Class B | 5,924,418 | $200.63 | Item 3. Defaults Upon Senior Securities This section indicates that there are no reported defaults upon senior securities - No defaults upon senior securities are reported[194] Item 4. Mine Safety Disclosures Information regarding the company's mine safety violations and other legal matters, as required by Section 1503(a) of the Dodd-Frank Reform Act, is included in Exhibit 95 to this Form 10-Q - Mine safety disclosures are provided in Exhibit 95 of this Form 10-Q, as required by the Dodd-Frank Reform Act[191] Item 5. Other Information This section states that there is no other information to report - No other information is reported in this section[194] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate organizational documents, certifications, mine safety disclosures, and XBRL financial information - Exhibits include Restated Certificate of Incorporation, By-Laws, Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certifications, Mine Safety Disclosures, and XBRL financial information[196] Signature The report is duly signed on behalf of Berkshire Hathaway Inc. by Marc D. Hamburg, Senior Vice President and Principal Financial Officer, on May 4, 2019 - The report was signed by Marc D. Hamburg, Senior Vice President and Principal Financial Officer, on May 4, 2019[198]