Financial Performance - Net earnings attributable to Berkshire Hathaway shareholders decreased to $(2.688) billion in Q3 2022 from $10.344 billion in Q3 2021, and $(40.983) billion in the first nine months of 2022 compared to $50.149 billion in the same period of 2021[110]. - Net earnings for the third quarter of 2022 were $1.442 billion, compared to $1.538 billion in Q3 2021[135]. - Consolidated shareholders' equity attributable to Berkshire shareholders was $455.4 billion as of September 30, 2022, a decrease of $50.8 billion since December 31, 2021[171]. - Net loss attributable to Berkshire shareholders for the first nine months of 2022 was $41.0 billion, including after-tax losses on investments of $64.9 billion[171]. Insurance Operations - After-tax insurance underwriting earnings decreased by $178 million in Q3 2022 and $690 million in the first nine months of 2022 compared to 2021, with significant catastrophe losses of approximately $2.7 billion from Hurricane Ian in 2022[110][112]. - GEICO's pre-tax underwriting losses were $(759) million in Q3 2022 and $(1.424) billion in the first nine months of 2022, reflecting increased claims severities and a 4.6% decline in voluntary auto policies-in-force[113][115]. - Losses and loss adjustment expenses for GEICO increased by $1.0 billion (12.1%) in Q3 2022 and $4.6 billion (20.4%) in the first nine months of 2022 compared to 2021, with a loss ratio of 97.0% in Q3 2022[115]. - Berkshire acquired Alleghany Corporation on October 19, 2022, which will be included in the insurance results from the acquisition date[112]. Investment Income - After-tax earnings from insurance investment income increased by $247 million in Q3 2022 and $896 million in the first nine months of 2022 compared to 2021, driven by higher dividend income and interest rates[110]. - Pre-tax net investment income rose by 25.5% in Q3 2022 and 26.6% in the first nine months of 2022 compared to 2021[131]. - Dividend income increased by 7.1% in Q3 2022 and 21.0% in the first nine months of 2022 compared to the same periods in 2021[131]. - Interest and other investment income surged by 181.6% in Q3 2022 and 72.3% in the first nine months of 2022 compared to 2021, primarily due to rising short-term interest rates[131]. Revenue and Earnings by Segment - BNSF railroad after-tax earnings declined by 6.2% in Q3 2022 but increased by 4.0% in the first nine months of 2022 compared to 2021, reflecting higher revenue per car/unit and increased operating costs[110]. - Utilities and energy business after-tax earnings increased by 5.9% in Q3 2022 and 5.5% in the first nine months of 2022 compared to 2021, attributed to higher earnings from tax equity investments and natural gas pipeline operations[110]. - Manufacturing, service, and retailing businesses saw a 20.0% increase in after-tax earnings in Q3 2022 and a 14.3% increase in the first nine months of 2022 compared to 2021, despite rising input costs[110]. - Energy operating revenue for BHE was $6.095 billion in Q3 2022, an increase from $5.225 billion in Q3 2021[141]. Premiums and Underwriting - Premiums written increased by $389 million (11.1%) in Q3 2022 and $1.4 billion (15.3%) in the first nine months compared to 2021, driven by increases at BH Specialty (20%), USLI (17%), and BHHC (15%)[116]. - The loss ratio for BH Primary was 81.1% in Q3 2022 and 74.0% for the first nine months, reflecting an increase of 5.5 percentage points and 1.8 percentage points, respectively, compared to 2021[118]. - Catastrophe event losses amounted to approximately $660 million in Q3 2022 and $740 million in the first nine months, compared to $260 million and $420 million in the same periods of 2021[118]. - Underwriting expenses rose by $194 million (26.0%) in Q3 2022 and $541 million (27.3%) in the first nine months compared to 2021, with the expense ratio increasing by 1.8 percentage points in Q3 and 1.9 percentage points year-to-date[118]. Cash and Capital Management - Cash, cash equivalents, and U.S. Treasury Bills totaled $59.7 billion as of September 30, 2022, down from $90.7 billion at December 31, 2021[134]. - Cash, cash equivalents, and U.S. Treasury Bills held by insurance and other businesses totaled $105.2 billion, including $77.9 billion in U.S. Treasury Bills[171]. - Berkshire repurchased $5.2 billion of its Class A and B common stock in the first nine months of 2022[171]. - Outstanding borrowings at Berkshire parent company were $19.2 billion as of September 30, 2022, a decrease of $2.2 billion since December 31, 2021[173]. Market Conditions and Economic Impact - The company does not expect a material impact from the Inflation Reduction Act of 2022 on its consolidated financial statements[173]. - Effective income tax rate for the third quarter of 2022 was 23.5%, compared to 24.2% in Q3 2021[135]. - Effective income tax rate was 20.9% in Q3 2022 compared to 20.7% in Q3 2021[165]. Miscellaneous - The financial information for the quarter ended September 30, 2022, includes consolidated balance sheets and statements of earnings, cash flows, and changes in shareholders' equity[188]. - The report was signed by Marc D. Hamburg, Senior Vice President and Principal Financial Officer, on November 5, 2022[190].
Berkshire Hathaway(BRK_B) - 2022 Q3 - Quarterly Report