Berkshire Hathaway Inc. News Release
27 Februar 2021 - 2:00PM
Business Wire
Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B):
Berkshire’s operating results for the fourth quarter and full
year of 2020 and 2019 are summarized in the following paragraphs.
However, we urge investors and reporters to read our 2020 Annual
Report, which has been posted at www.berkshirehathaway.com. The
limited information that follows in this press release is not
adequate for making an informed investment judgment.
Earnings of Berkshire Hathaway Inc. and its consolidated
subsidiaries for the fourth quarter and full year of 2020 and 2019
are summarized below. Earnings are stated on an after-tax basis.
(Dollar amounts are in millions, except for per share amounts).
Fourth Quarter
Full
Year
2020
2019
2020
2019
Net earnings attributable to Berkshire
shareholders
$
35,835
$
29,159
$
42,521
$
81,417
Net earnings (loss) includes:
Investment and derivative gains/losses
–
Investments (1)
$
30,446
$
24,527
$
31,717
$
56,272
Derivatives
380
212
(126
)
1,173
30,826
24,739
31,591
57,445
Impairment of intangible assets (2)
(12
)
–
(10,992
)
–
Operating earnings
5,021
4,420
21,922
23,972
Net earnings attributable to Berkshire
shareholders
$
35,835
$
29,159
$
42,521
$
81,417
Net earnings per average equivalent Class
A Share
$
23,015
$
17,909
$
26,668
$
49,828
Net earnings per average equivalent Class
B Share
$
15.34
$
11.94
$
17.78
$
33.22
Average equivalent Class A shares
outstanding
1,557,026
1,628,138
1,594,469
1,633,946
Average equivalent Class B shares
outstanding
2,335,539,124
2,442,207,505
2,391,703,454
2,450,919,020
Note: Per share amounts for the Class B shares are 1/1,500th of
those shown for the Class A.
(1) Generally Accepted Accounting Principles (“GAAP”) require
that we include the changes in unrealized gains/losses of our
equity security investments as a component of investment
gains/losses in our earnings statements. In the table above,
investment gains/losses in 2020 include gains of $24.5 billion in
the fourth quarter and $26.8 billion in the full year and in 2019
include gains of $23.6 billion in the fourth quarter and $53.7
billion for the full year due to changes during the fourth quarter
and the full year in the unrealized gains that existed in our
equity security investment holdings. Investment gains/losses in
2020 also include after-tax realized gains on sales of investments
of $4.4 billion during the fourth quarter and $4.9 million during
the full year. In 2019, investment gains/losses include after-tax
realized gains of $1.0 billion during the fourth quarter and $2.6
billion during the full year.
The amount of investment gains/losses in any given quarter is
usually meaningless and delivers figures for net earnings per share
that can be extremely misleading to investors who have little or no
knowledge of accounting rules.
(2) Impairments of intangible assets in 2020 include charges of
$9.8 billion recorded in the second quarter attributable to
impairments of goodwill and certain identifiable intangible assets
that were recorded in connection with Berkshire’s acquisition of
Precision Castparts Corp. in 2016. After-tax impairments of
intangible assets in 2019 were $435 million and are included in
operating earnings.
An analysis of Berkshire’s operating earnings follows (dollar
amounts are in millions).
Fourth Quarter
Full
Year
2020
2019
2020
2019
Insurance-underwriting
$
(299
)
$
(857
)
$
657
$
325
Insurance-investment income
1,270
1,443
5,039
5,530
Railroad, utilities and energy
1,995
1,874
8,252
8,321
Other businesses
2,467
2,230
8,300
9,372
Other
(412
)
(270
)
(326
)
424
Operating earnings
$
5,021
$
4,420
$
21,922
$
23,972
Approximately $9 billion was used to purchase shares during the
fourth quarter bringing the total for the year to approximately $25
billion. On December 31, 2020, there were 1,543,960 Class A
equivalent shares outstanding. Insurance float (the net liabilities
we assume under insurance contracts) was approximately $138 billion
at December 31, 2020, an increase of $9 billion since yearend
2019.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures.
The reconciliations of such measures to the most comparable GAAP
figures in accordance with Regulation G are included herein.
Berkshire presents its results in the way it believes will be
most meaningful and useful, as well as most transparent, to the
investing public and others who use Berkshire’s financial
information. That presentation includes the use of certain non-GAAP
financial measures. In addition to the GAAP presentations of net
earnings, Berkshire shows operating earnings defined as net
earnings exclusive of investment and derivative gains/losses and
impairments of goodwill and intangible assets.
Although the investment of insurance and reinsurance premiums to
generate investment income and investment gains or losses is an
integral part of Berkshire’s operations, the generation of
investment gains or losses is independent of the insurance
underwriting process. Moreover, as previously described, under
applicable GAAP accounting requirements, we are now required to
include the changes in unrealized gains/losses of our equity
security investments as a component of investment gains/losses in
our periodic earnings statements. In sum, investment gains/losses
for any particular period are not indicative of quarterly business
performance.
About Berkshire
Berkshire Hathaway and its subsidiaries engage in diverse
business activities including insurance and reinsurance, utilities
and energy, freight rail transportation, manufacturing, retailing
and services. Common stock of the company is listed on the New York
Stock Exchange, trading symbols BRK.A and BRK.B.
Cautionary Statement
Certain statements contained in this press release are “forward
looking” statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are not guaranties
of future performance and actual results may differ materially from
those forecasted.
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version on businesswire.com: https://www.businesswire.com/news/home/20210227005002/en/
Marc D. Hamburg 402-346-1400
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