BERKSHIRE HATHAWAY INC

Previous wording

Net earnings (loss) attributable to Berkshire Hathaway shareholders for the third quarter and first nine months ended September 30, 2024 and 2023 are disaggregated in the table that follows. Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests (in millions).

Current wording

Net earnings attributable to Berkshire shareholders are disaggregated in the table that follows. Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests (in millions).

Previous wording

Through our subsidiaries, we engage in numerous diverse business activities. We manage our operating businesses on an unusually decentralized basis. There are few centralized or integrated business functions. Our senior corporate management team participates in and is ultimately responsible for significant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of the operating businesses. The business segment data (Note 25 to the accompanying Consolidated Financial Statements and Note 26 to the Consolidated Financial Statements included in Form 10-K for the year ended December 31, 2023) should be read in conjunction with this discussion.

Current wording

Through our subsidiaries, we engage in numerous diverse business activities. The business segment data (Note 24 to the accompanying Consolidated Financial Statements and Note 26 to the Consolidated Financial Statements included in Form 10-K for the year ended December 31, 2024) should be read in conjunction with this discussion.

Previous wording

Our periodic operating results may be affected in future periods due to impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events. We cannot reliably predict the future economic effects of these factors or events on our businesses.

Current wording

Our periodic operating results may be affected in future periods by impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events. The pace of changes in these events, including international trade policies and tariffs, has accelerated in 2025. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the potential impact on our businesses, whether through changes in product costs, supply chain costs and efficiency, and customer demand for our products and services. It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses, as well as on our investments in equity securities, which could significantly affect our future results.

Previous wording

After-tax earnings from our manufacturing, service and retailing businesses decreased 5.9% in the third quarter and 3.5% in the first nine months of 2024 compared to 2023. Earnings in 2024 reflected lower earnings from our service and retailing businesses, partially offset by earnings increases at several of our manufacturing businesses.

Current wording

After-tax earnings from our manufacturing, service and retailing businesses decreased slightly in the first quarter of 2025 compared to 2024. Earnings in 2025 reflected an overall increase from our service and retailing businesses and an overall decrease from our manufacturing businesses. The majority of our businesses experienced lower revenues and earnings in the first quarter of 2025 compared to 2024.

Previous wording

Investment gains (losses) predominantly derive from our investments in equity securities and include significant unrealized gains and losses from changes in market prices and foreign currency exchange rates applicable to certain of our investments. We believe that investment gains and losses, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings. Investment gains in the first nine months of 2023 also included an after-tax non-cash remeasurement gain of approximately $2.4 billion related to our previously held 38.6% interest in Pilot through the application of the acquisition accounting method.

Current wording

Investment gains (losses) predominantly derive from our investments in equity securities and include significant unrealized gains and losses from changes in market prices and foreign currency exchange rates applicable to certain of our investments. We believe that investment gains and losses, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.

Previous wording

Changes in estimates for unpaid losses and loss adjustment expenses, including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the changes in the valuation of non-U.S. Dollar denominated assets and liabilities can also significantly affect our periodic underwriting results.

Current wording

Our periodic underwriting earnings may be subject to considerable volatility from the timing and magnitude of significant property catastrophe loss events. Further, we generally do not retrocede the risks we assume. We currently consider consolidated pre-tax losses exceeding $150 million from an event occurring in the current year to be significant. We incurred significant losses from the Southern California wildfires in the first quarter of 2025, while we experienced no significant catastrophe events in the first quarter of 2024. Changes in estimates for unpaid losses and loss adjustment expenses, including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the remeasurement of non-U.S. Dollar denominated assets and liabilities can also significantly affect our periodic underwriting results.

Previous wording

We provide primary insurance and reinsurance products covering property and casualty risks, as well as life and health risks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). We strive to produce pre-tax underwriting earnings (defined as premiums earned less insurance losses/benefits incurred and underwriting expenses) over the long term in all business categories, except in our retroactive reinsurance and periodic payment annuity businesses. Time-value-of-money is an important element in establishing prices for retroactive reinsurance and periodic payment annuity policies. We normally receive premiums at the contract inception date, which are then available for investment. Ultimate claim payments can extend for decades and are expected to exceed premiums, producing underwriting losses over the claim settlement periods through deferred charge asset amortization and accretion of discounted liabilities.

Current wording

We write primary insurance and reinsurance policies covering property and casualty risks, as well as life and health risks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). We strive to generate pre-tax underwriting earnings (defined as premiums earned less insurance losses/benefits incurred and underwriting expenses) over the long term in all business categories, except in our retroactive reinsurance and periodic payment annuity businesses. Time-value-of-money concepts are important considerations in establishing premiums for these policies, which are recognized as charges to earnings over the claim settlement periods.

Previous wording

GEICO writes property and casualty policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia. GEICO markets its policies mainly by direct response methods where most customers apply for coverage directly to the company via the Internet or over the telephone. GEICO also operates an insurance agency that offers primarily homeowners and renters insurance to its auto policyholders. A summary of GEICO’s underwriting results follows (dollars in millions).

Current wording

GEICO writes property and casualty policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia. GEICO offers policies mainly by direct response methods where most customers apply for coverage directly to the company via the Internet or over the telephone. GEICO also operates an insurance agency that offers primarily homeowners and renters insurance to its auto policyholders. A summary of GEICO’s underwriting results follows (dollars in millions).

Previous wording

Losses and loss adjustment expenses declined $245 million (3.1%) in the third quarter and $1.3 billion (5.2%) in the first nine months of 2024 compared to 2023. GEICO’s loss ratio (losses and loss adjustment expenses to premiums earned) was 71.4% in the third quarter and 72.6% in the first nine months of 2024, decreases of 8.6 percentage points and 9.9 percentage points, respectively, compared to 2023. The loss ratio declines reflected the impact of higher average earned premiums per auto policy and lower claims frequencies, partially offset by increases in average claims severities and less favorable development of prior accident years’ claims estimates.

Current wording

Losses and loss adjustment expenses increased $10 million (0.1%) in the first quarter of 2025 compared to 2024. GEICO’s loss ratio (losses and loss adjustment expenses to premiums earned) was 69.0% in the first quarter of 2025, a decrease of 3.5 percentage points compared to 2024. The loss ratio decline reflected the impact of higher average premiums per auto policy and lower claims frequencies, partially offset by increases in average claims severities and less favorable development of prior accident years’ claims estimates.

Previous wording

Claims frequencies in 2024 declined for property damage (two to three percent range) and collision coverages (eight to nine percent range) versus 2023, with bodily injury coverage down slightly. Average claims severities in 2024 increased for property damage (five to seven percent range), collision (four to six percent range) and bodily injury (eight to ten percent range) coverages compared to 2023. Losses and loss adjustment expenses in the first nine months included reductions in the ultimate loss estimates for prior accident years’ claims of $339 million in 2024 and $1.2 billion in 2023. Losses and loss adjustment expenses incurred in the third quarter of 2024 from Hurricane Helene were approximately $260 million.

Current wording

Private passenger automobile claims frequencies declined in the first quarter of 2025 versus 2024 for property damage and collision coverages (six to nine percent range), with bodily injury coverage down slightly. Average auto claims severities increased in the first quarter of 2025 for property damage and collision coverages (one to three percent range) and bodily injury coverage (six to eight percent range) compared to 2024. Losses and loss adjustment expenses included reductions in the ultimate loss estimates for prior accident years’ claims of $45 million in the first quarter of 2025 compared to $155 million in 2024.

Previous wording

Underwriting expenses were relatively flat in the first nine months of 2024 compared to 2023. GEICO’s expense ratio (underwriting expense to premiums earned) in the first nine months of 2024 was 9.1%, a decrease of 0.6 percentage points compared to 2023, attributable to improved operating efficiencies and increased operating leverage, partially offset by increased advertising expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.

Current wording

Underwriting expenses increased $263 million in the first quarter of 2025 compared to 2024. GEICO’s expense ratio (underwriting expense to premiums earned) was 10.8% in the first quarter of 2025, an increase of 2.1 percentage points compared to 2024, attributable to increased policy acquisition related expenses, partially offset by increased operating leverage. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.

Previous wording

BH Primary consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients. BH Primary’s insurers include Berkshire Hathaway Specialty Insurance (“BHSI”), RSUI Group Inc. and CapSpecialty, Inc. (“RSUI and CapSpecialty”), Berkshire Hathaway Homestate Companies (“BHHC”), MedPro Group, GUARD Insurance Companies (“GUARD”), National Indemnity Company (“NICO Primary”), Berkshire Hathaway Direct Insurance Company (“BH Direct”) and U.S. Liability Insurance Company (“USLI”).

Current wording

BH Primary consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients. BH Primary’s insurers include Berkshire Hathaway Specialty Insurance (“BHSI”), RSUI Group Inc. and CapSpecialty, Inc. (“RSUI and CapSpecialty”), Berkshire Hathaway Homestate companies (“BHHC”), MedPro Group, GUARD Insurance group of companies (“GUARD”), National Indemnity Company (“NICO Primary”), Berkshire Hathaway Direct (“BH Direct”) and U.S. Liability Insurance companies (“USLI”).

Previous wording

Premiums written increased $85 million (1.7%) in the third quarter and $594 million (4.3%) in the first nine months of 2024 compared to 2023, primarily due to increases at NICO Primary, BH Direct and BHHC, partially offset by lower volumes at GUARD. The increases at NICO Primary and BHHC were primarily attributable to commercial auto coverage while the increase at BH Direct reflected growth across several product lines. The decline in premium volumes at GUARD were as a result of new management’s decision to exit admitted homeowners business and to tighten underwriting guidelines in other lines of business. Premiums earned increased 5.3% in the third quarter and 9.8% in the first nine months of 2024 versus 2023.

Current wording

Premiums written declined 1.6% in the first quarter of 2025 compared to 2024. The decline was primarily due to a 34% reduction at GUARD and, to a lesser degree at RSUI, partially offset by higher volumes at NICO Primary, BHHC and BH Direct. GUARD’s premium decline reflected volume reductions across multiple product categories through exiting certain unprofitable lines and tightened overall underwriting standards. The decline at RSUI was primarily due to lower volumes, partly offset by increased retentions. The increases at NICO Primary and BHHC were primarily attributable to commercial auto business, while the increase at BH Direct reflected growth across several lines of business and product categories.

Previous wording

The Berkshire Hathaway Reinsurance Group offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company (“NICO”), General Reinsurance Corporation, General Reinsurance AG and Transatlantic Reinsurance Company. We also write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”). We assume property and casualty risks under retroactive reinsurance contracts written through NICO and we write periodic payment annuity contracts through BHLN. A summary of BHRG’s pre-tax underwriting results follows (in millions).

Current wording

The Berkshire Hathaway Reinsurance Group offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company, General Reinsurance Corporation, General Reinsurance AG and Transatlantic Reinsurance Company. We also write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska. A summary of BHRG’s pre-tax underwriting results follows (in millions).

Previous wording

Losses and loss adjustment expenses increased $364 million (12.5%) in the third quarter and $301 million (3.3%) in the first nine months of 2024 versus 2023. The loss ratio increased 9.4 percentage points in the third quarter and 0.9 percentage points in the first nine months of 2024 compared to 2023. In 2024, losses from significant catastrophe events (Hurricane Helene) were approximately $380 million. Losses from significant catastrophe events were approximately $550 million in the first nine months of 2023. Reductions in liabilities for losses and loss adjustment expenses attributable to prior accident years were $1.2 billion in the first nine months of 2024, mostly attributable to lower than expected property losses, compared to $1.5 billion in 2023 attributable to both property and casualty losses.

Current wording

Losses and loss adjustment expenses increased $606 million (20.2%) and the loss ratio increased 13.6 percentage points in the first quarter of 2025 compared to 2024. Losses incurred from the Southern California wildfires were approximately $770 million in the first quarter of 2025. Estimated ultimate liabilities for losses occurring in prior accident years were reduced $330 million in the first quarter of 2025 and $386 million in 2024, mostly attributable to lower-than-expected property losses.

Previous wording

Pre-tax underwriting losses from retroactive reinsurance derive from deferred charge amortization, changes in the estimated timing and amounts of future claim payments and foreign currency exchange gains and losses attributable to non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates produced pre-tax losses of $75 million in the first nine months of 2024 and pre-tax gains of $38 million in the corresponding 2023 period. Pre-tax underwriting losses before foreign currency effects were $498 million in the first nine months of 2024 compared to $622 million in 2023. The decline was primarily attributable to net reductions in estimated ultimate claim liabilities for contracts written in prior years.

Current wording

We have written no significant new retroactive reinsurance contracts over the past several years. Pre-tax underwriting results derive from changes in the ultimate claim liability estimates and changes in the related deferred charge assets, as well as from foreign currency exchange gains and losses attributable to non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates produced losses of $40 million in the first quarter of 2025 and gains of $45 million in 2024. Pre-tax underwriting losses before foreign currency exchange gains were $169 million in the first quarter of 2025 and $192 million in 2024.

Previous wording

Unpaid losses assumed under retroactive reinsurance contracts declined $1.6 billion in the first nine months of 2024 to $33.1 billion at September 30, 2024, primarily due to loss payments. Deferred charges on retroactive reinsurance contracts declined $610 million in the first nine months of 2024 to $8.9 billion at September 30, primarily due to periodic amortization. Deferred charge amortization is included in underwriting earnings over the expected remaining claims settlement periods.

Current wording

Unpaid losses and loss adjustment expenses for retroactive reinsurance contracts declined $469 million in the first quarter of 2025 to $32.0 billion at March 31, 2025, primarily due to loss payments. Deferred charge assets on retroactive reinsurance contracts declined $169 million in the first quarter of 2025 to $8.6 billion at March 31, 2025. Deferred charge balances will be charged to earnings over the expected remaining claims settlement periods.

Previous wording

Periodic payment annuity business is price and demand-sensitive and the supply of available business is affected by the timing of underlying legal claim settlements. In 2023 and through the first nine months of 2024, prices for new business were at unacceptable levels and we wrote no new business in either period.

Current wording

Periodic payment annuity business is price and demand sensitive, and the supply of available business is affected by the timing of underlying legal claim settlements. Premium rates for new business continue to be at unacceptable levels. We have written no new business since 2022.

Previous wording

Pre-tax underwriting losses from periodic payment annuity contracts in each period were attributable to the accretion of time-value discounted liabilities, including liabilities for contracts without life contingencies, and to foreign currency exchange gains and losses on non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates produced pre-tax losses of $96 million in the first nine months of 2024 compared to $27 million in 2023. Pre-tax underwriting losses before foreign currency effects in the first nine months were $447 million in 2024 and $439 million in 2023. Discounted periodic payment annuity liabilities were $15.1 billion at September 30, 2024, including liabilities of $4.0 billion for contracts without life contingencies, as well as the effects of the quarterly discount rate changes on contracts with life-contingent liabilities recorded in accumulated other comprehensive income.

Current wording

Pre-tax underwriting losses from periodic payment annuity contracts in each period included the accretion of discounted liabilities and includes liabilities for contracts without life contingencies, as well as foreign currency exchange gains and losses on non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates produced losses of $49 million in the first quarter of 2025 and were insignificant in the first quarter of 2024. Pre-tax underwriting losses before foreign currency effects were $150 million in the first quarter of 2025 and $149 million in 2024. Periodic payment annuity liabilities were $14.4 billion at March 31, 2025, including liabilities of $4.0 billion for contracts without life contingencies and the effects of discount rate changes recorded in accumulated other comprehensive income.

Previous wording

Our variable annuity guarantee reinsurance contracts produced pre-tax losses of $75 million in the third quarter and earnings of $30 million in the first nine months of 2024. Pre-tax earnings were $116 million in the third quarter and $309 million in the first nine months of 2023. Earnings are affected by changes in securities markets, interest rates and foreign currency exchange rates. These contracts have been in run-off for many years.

Current wording

Our variable annuity guarantee reinsurance contracts produced pre-tax losses of $37 million in the first quarter of 2025 compared to earnings of $94 million in 2024. Earnings are affected by changes in securities markets, interest rates and foreign currency exchange rates. These contracts have been in run-off for many years.

Previous wording

Interest and other investment income increased $1.8 billion in the third quarter and $3.8 billion in the first nine months of 2024 over 2023. The increases were attributable to increased short-term investments, including U.S. Treasury Bills. We continue to believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments.

Current wording

Interest and other investment income in the first quarter of 2025 increased $588 million (30.5%) compared to 2024. The increase was primarily attributable to increases in U.S. Treasury Bills and other short-term investment balances, partially offset by lower interest rates. We continue to believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments.

Previous wording

Dividend income declined $131 million (10.7%) in the third quarter and $207 million (5.2%) in the first nine months of 2024 compared to 2023. The reductions reflected the impact of changes in our equity security holdings, partially offset by higher dividend rates on certain of our holdings. Dividend income also varies from period to period due to the frequency and timing of dividends from certain investees.

Current wording

Dividend income in the first quarter of 2025 declined $179 million (14.7%) compared to 2024. The decline was primarily due to net dispositions of equity securities, partially offset by higher dividend rates on certain of our holdings. Dividend income also varies from period to period due to changes in the investment portfolio and the frequency and timing of dividends from certain investees.

Previous wording

Invested assets of our insurance businesses derive from shareholder capital and net liabilities assumed under insurance and reinsurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and other liabilities due to policyholders, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges on retroactive reinsurance contracts and deferred policy acquisition costs. The effects of discount rate changes recorded in accumulated other comprehensive income for long-duration insurance contracts are excluded from float, as such amounts are not included in underwriting earnings. Float approximated $174 billion at September 30, 2024 and $169 billion at December 31, 2023.

Current wording

Invested assets of our insurance businesses derive from shareholder capital and net liabilities assumed under insurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and certain other liabilities, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs. The effect of discount rate changes on long-duration insurance contracts, recorded in accumulated other comprehensive income, are excluded from float, as such amounts are not included in earnings in the Consolidated Statements of Earnings.

Previous wording

A summary of cash and investments held by our insurance businesses as of September 30, 2024 and December 31, 2023 follows (in millions).

Current wording

A summary of cash and investments held in our insurance businesses follows (in millions).

Previous wording

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately 94% of our foreign government obligations were rated AA or higher by at least one of the major rating agencies. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.

Current wording

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately 94% of our foreign government investments were rated AA or higher by at least one of the major rating agencies. Foreign government securities are issued or unconditionally guaranteed by national or provincial government entities.

Previous wording

Burlington Northern Santa Fe, LLC (“BNSF”) operates one of the largest railroad systems in North America, with over 32,500 route miles of track in 28 states. BNSF also operates in three Canadian provinces. BNSF classifies its major business groups by type of product shipped including consumer products, industrial products, agricultural products and coal. A summary of BNSF’s earnings follows (dollars in millions).

Current wording

Burlington Northern Santa Fe, LLC (“BNSF”) operates one of the largest railroad systems in North America, with over 32,500 route miles of track in 28 states. BNSF also operates in three Canadian provinces. BNSF classifies its major business groups by type of product shipped, including consumer products, agricultural and energy products, industrial products and coal. A summary of BNSF’s earnings follows (dollars in millions).

Previous wording

A summary of BNSF’s railroad freight volumes by business group (cars/units in thousands) follows.

Current wording

A summary of BNSF’s railroad freight volumes by business group follows (cars/units in thousands).

Previous wording

Berkshire Hathaway Energy Company (“BHE”) operates a global energy business. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas pipeline systems and a 75% interest in a liquefied natural gas export, import and storage facility (“Cove Point”). Other energy businesses include subsidiaries that operate two regulated electricity distribution businesses in Great Britain (“Northern Powergrid”), a regulated electricity transmission-only business in Alberta, Canada, a diversified portfolio of mostly renewable independent power projects and investments and an unregulated retail energy services company. BHE also operates HomeServices of America (“HomeServices”), a residential real estate brokerage business and a large network of real estate brokerage franchises in the United States.

Current wording

Berkshire Hathaway Energy Company (“BHE”) is a holding company with subsidiaries that primarily operate within the energy industry. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas pipeline systems and a 75% interest in a liquefied natural gas export, import and storage facility (“Cove Point”). Other energy subsidiaries operate two regulated electricity distribution businesses in Great Britain (“Northern Powergrid”), a regulated electricity transmission-only business in Alberta, Canada, and a diversified portfolio of mostly renewable independent power projects and investments. Another BHE subsidiary, HomeServices of America, Inc. (“HomeServices”), operates a residential real estate brokerage business and a large network of real estate brokerage franchises in the United States.

Previous wording

Includes significant production tax credits from wind-powered electricity generation.

Current wording

Includes significant production tax credits primarily from wind-powered electricity generation.

Previous wording

The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE (“net earnings”) follows (dollars in millions).

Current wording

The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE follows (dollars in millions).

Previous wording

The U.S. utilities’ electric utility margin was $2.4 billion in the third quarter and $6.0 billion in the first nine months of 2024, increases of $50 million (2.1%) and $152 million (2.6%) compared to 2023. The increases reflected higher retail customer rates in certain territories and higher retail customer volumes, partially offset by higher energy costs and lower wholesale volumes and rates. Retail customer volumes increased 3.6% overall (up 6.6% at NV Energy, 3.2% at PacifiCorp and 0.6% at MEC) in the first nine months of 2024 compared to the same period in 2023, primarily due to increases in customer usage and in the average number of customers, partially offset by an overall unfavorable impact of weather.

Current wording

The U.S. utilities’ electric utility margin was $1.9 billion in the first quarter of 2025, an increase of $225 million (13.2%) compared to 2024. The increase reflected higher retail customer rates in certain territories, higher retail customer volumes and higher wholesale prices and volumes, partially offset by higher energy costs. Retail customer volumes increased 4.2% overall (up 11.3% at MEC, 2.4% at PacifiCorp and 0.8% at NV Energy) in the first quarter of 2025 compared to 2024, primarily due to an overall favorable impact of weather and an increase in the average number of customers. The increase in energy operating expenses was primarily due to depreciation and amortization expense, insurance expenses and general and plant maintenance costs.

Previous wording

Net earnings of real estate brokerage decreased $5 million in the third quarter and $121 million in the first nine months of 2024 compared to 2023. The decline for the first nine months of 2024 was primarily attributable to expense accruals in connection with the ongoing real estate industry litigation matters. In April 2024, HomeServices agreed to terms with the plaintiffs to settle all claims asserted against HomeServices and certain of its affiliates as part of a proposed nationwide class settlement. See Note 23 to the accompanying Consolidated Financial Statements for additional information.

Current wording

Net losses of real estate brokerage decreased by $144 million in the first quarter of 2025 compared to 2024, primarily attributable to charges in 2024 with respect to the ongoing real estate industry litigation matters. In April 2024, HomeServices agreed to terms with the plaintiffs to settle all claims asserted against HomeServices and certain of its subsidiaries and effectuate a nationwide class settlement. See Note 22 to the accompanying Consolidated Financial Statements for additional information. The real estate brokerage business continues to be negatively impacted by the availability of homes for sale and high home prices.

Previous wording

Excludes certain acquisition accounting expenses, which primarily related to the amortization of identifiable intangible assets recorded in connection with certain of our business acquisitions. The after-tax acquisition accounting expenses excluded from earnings were $127 million in the third quarter and $389 million in the first nine months of 2024 and $173 million in the third quarter and $525 million in the first nine months of 2023. These expenses are included in “Other” in the summary of earnings on page 31 and in the “Other” earnings section on page 47.

Current wording

Excludes certain acquisition accounting expenses, which primarily relate to the amortization of intangible assets recorded in connection with certain of our business acquisitions. The after-tax acquisition accounting expenses excluded from earnings were $124 million in the first quarter of 2025 and $125 million in the first quarter of 2024. These expenses are included in “Other” in the summary of earnings on page 29 and in the “Other” earnings table on page 43.

Previous wording

The industrial products group includes metal products for aerospace, power and general industrial markets (Precision Castparts Corp. (“PCC”)), specialty chemicals (The Lubrizol Corporation (“Lubrizol”)), metal cutting tools/systems (IMC International Metalworking Companies (“IMC”)) and Marmon, which consists of more than 100 autonomous manufacturing and service businesses, internally aggregated into twelve groups. The industrial products group also includes equipment and systems for the livestock and agricultural industries (CTB International), pipeline flow improvement technology and products (LiquidPower Specialty Products) and a structural steel fabrication products business (W&W|AFCO Steel).

Current wording

The industrial products group includes metal products for aerospace, power and general industrial markets (Precision Castparts Corp. (“PCC”)), specialty chemicals (The Lubrizol Corporation (“Lubrizol”)), metal cutting tools/systems (IMC International Metalworking Companies (“IMC”)), and Marmon, which consists of more than 100 autonomous manufacturing and service businesses, internally aggregated into twelve groups, and includes equipment leasing for the rail, intermodal tank container and mobile crane industries. The industrial products group also includes equipment and systems for the livestock and agricultural industries (CTB International), a leader in drag reducing agents for pipelines (LiquidPower Specialty Products) and a structural steel fabrication products business (W&W|AFCO).

Previous wording

Revenues of the industrial products group increased $289 million (3.3%) in the third quarter and $706 million (2.7%) in the first nine months of 2024 compared to 2023. Pre-tax earnings increased $62 million (4.3%) in the third quarter and $322 million (7.3%) in the first nine months of 2024 compared to 2023. Pre-tax earnings as a percentage of revenues for the first nine months of 2024 increased 0.8 percentage points compared to the first nine months of 2023.

Current wording

Revenues of the industrial products group were $9.1 billion in the first quarter of 2025, an increase of $174 million (2.0%) compared to the first quarter of 2024. Pre-tax earnings in 2025 increased $24 million (1.5%) compared to 2024. Pre-tax earnings as a percentage of revenues for the group were 17.5% for the first quarter of 2025, unchanged from 2024.

Previous wording

IMC’s revenues were approximately $1.0 billion in the third quarter and $3.0 billion in the first nine months of 2024, decreases of 1.4% and 1.3%, respectively, compared to the same periods in 2023. Revenues in the first nine months of 2024 reflected lower organic sales and unfavorable foreign currency translation from a stronger U.S. Dollar, partially offset by business acquisitions and higher interest income. The declines in organic sales were attributable to weaker general economic conditions and ongoing geopolitical conflicts. IMC’s pre-tax earnings declined 13.0% in the third quarter and 8.2% in the first nine months of 2024 compared to 2023, primarily attributable to lower gross sales margins and higher selling, general and administrative expenses. IMC operates globally and a large portion of its products are manufactured in Israel. IMC’s operations in Israel have not been significantly impacted to date by the conflicts in the region.

Current wording

IMC’s revenues were $1.0 billion in the first quarter of 2025, a decrease of 3.3% compared to the first quarter of 2024. The decline reflected lower organic sales attributable to sluggish customer demand across all major regions, unfavorable foreign currency translation from a stronger U.S. Dollar and lower investment income, partially offset by the impact of business acquisitions. The decline in organic sales was attributable to weaker general economic conditions and ongoing geopolitical conflicts. IMC’s pre-tax earnings declined 18.7% in the first quarter of 2025 compared to 2024, primarily attributable to lower sales and gross margin rates and lower investment and other income. IMC operates globally and a large portion of its products are manufactured in Israel. IMC’s operations in Israel have not been significantly impacted by the conflicts in the region.

Previous wording

The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Brick Company), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek).

Current wording

The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Building Brands), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek).

Previous wording

Revenues of the building products group increased $167 million (2.5%) in the third quarter and $450 million (2.3%) in the first nine months of 2024 compared to 2023. Pre-tax earnings decreased $97 million (8.3%) in the third quarter and $135 million (4.1%) in the first nine months of 2024 compared to 2023.

Current wording

Revenues of the building products group increased $79 million (1.3%) and pre-tax earnings declined $117 million (11.7%) in the first quarter of 2025 compared to the first quarter of 2024.

Previous wording

Clayton Homes’ revenues increased 8.7% to $3.2 billion in the third quarter and 8.8% to $9.1 billion in the first nine months of 2024 compared to 2023. Revenues from home sales increased $446 million (6.9%) in the first nine months of 2024, reflecting higher new home unit sales of 11.8%, partially offset by changes in sales mix and lower average selling prices. Also, financial services revenues increased 15.2% in the first nine months of 2024 compared to 2023, primarily due to increased interest income from higher average loan balances. 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. Loan portfolio balances are largely funded by borrowings from Berkshire finance affiliates.

Current wording

Clayton Homes’ revenues increased 7.4% to $2.9 billion in the first quarter of 2025 compared to 2024. Revenues from home sales increased $92 million (4.5%), reflecting a 6.3% increase in new home unit sales and higher average selling prices attributable to changes in sales mix. Financial services revenues in the first quarter of 2025 increased 14.7% compared to 2024, primarily due to increased interest income from higher average loan balances. Loan balances, net of allowances for credit losses, were approximately $27.6 billion as of March 31, 2025, an increase of 12.2% since March 31, 2024. Loan portfolio balances are largely funded by borrowings from Berkshire finance affiliates.

Previous wording

Clayton Homes’ pre-tax earnings declined $86 million (15.6%) in the third quarter and $95 million (6.3%) in the first nine months of 2024 compared to 2023, primarily attributable to lower earnings from financial services in each period, as well as comparatively lower earnings from manufacturing in the first nine months. The earnings declines from financial services reflected increased losses from insurance claims, attributable to weather events, increased expected loan loss provisions and higher interest expense on borrowings from Berkshire finance affiliates. Interest expense on such borrowings increased $83 million (61.9%) in the third quarter and $107 million (27.1%) in the first nine months of 2024 versus 2023 as borrowings increased $5.4 billion in the third quarter to better match the increase in loan receivable balances in recent years. The corresponding interest income is included in the “Other” earnings section on page 47. The year-to-date decline in earnings from manufacturing reflected lower gross margin rates due to the increased cost of building Zero Energy Ready homes (such incremental costs are partially offset by income tax credits) and higher operating expenses.

Current wording

Pre-tax earnings of Clayton Homes declined $23 million (5.0%) in the first quarter of 2025 compared to 2024, attributable to lower earnings from financial services, partially offset by higher earnings from manufacturing and site-building activities. The decrease in earnings from financial services earnings was primarily attributable to increases in interest expense on borrowings from Berkshire finance affiliates and losses from homeowner property insurance claims. Interest expense increased $99 million (71.3%) in 2025 versus 2024, as borrowings from affiliates increased $6.6 billion to $24.6 billion at March 31, 2025 compared to March 31, 2024. The corresponding interest income on such borrowings is included in the “Other” earnings section on page 43. The increase in manufacturing and site-building earnings was primarily attributable to the increase in sales, partially offset by lower gross margin rates.