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Wall Street JournalBERKSHIRE HATHAWAY INC. (Exact name of Registrant as specified in its charter)" This is the title of the annual report (Form 10-K) filed by Berkshire Hathaway Inc. with the Securities and Exchange Commission (SEC).
BERKSHIRE HATHAWAY INC. (Exact name of Registrant as specified in its charter)" This is the title of the annual report (Form 10-K) filed by Berkshire Hathaway Inc. with the Securities and Exchange Commission (SEC).
Berkshire Hathaway Inc. filed its annual report (Form 10-K) for the fiscal year ended December 31, 2024. The company reported a significant increase in its market value, with an aggregate market value of $749.4 billion held by non-affiliates as of June 30, 2024. Berkshire Hathaway’s Class A common stock had 546,189 shares outstanding, while its Class B common stock had 1,338,051,639 shares outstanding as of February 10, 2025. The company did not report any restatements of previously issued financial statements or recoveries of incentive-based compensation received by executive officers. Berkshire Hathaway is a large accelerated filer and has filed all reports required by the Securities Exchange Act of 1934 during the preceding 12 months.
Berkshire Hathaway’s Diverse Businesses Deliver Strong Results in 2024
Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, reported impressive financial results in 2024 despite ongoing macroeconomic and geopolitical challenges. The company’s diverse portfolio of insurance, manufacturing, service, and retailing businesses generated net earnings of $89 billion for the year, up from $96.2 billion in 2023 and a loss of $22.8 billion in 2022.
Insurance Segment Rebounds
Berkshire’s insurance operations were a standout performer in 2024. The company’s insurance underwriting business generated $9 billion in after-tax earnings, up from $5.4 billion in 2023 and a loss of $30 million in 2022. This turnaround was driven by significantly improved results at GEICO, which had posted a major loss in 2022 but rebounded in 2024 and 2023.
GEICO’s pre-tax underwriting earnings increased to $7.8 billion in 2024, up from $3.6 billion in 2023, as the company benefited from higher average premiums, lower claims frequencies, and improved operating efficiencies. The GEICO loss ratio improved to 71.8% in 2024 from 81% in 2023 as the company was able to raise rates to offset rising claims costs.
The Berkshire Hathaway Primary Group, which includes several commercial insurance businesses, also saw its pre-tax underwriting earnings decline to $855 million in 2024 from $1.4 billion in 2023. This was primarily due to higher loss estimates, particularly at the GUARD Insurance group, as well as lower favorable development of prior year claims.
Berkshire’s reinsurance operations, through the Berkshire Hathaway Reinsurance Group, generated $2.7 billion in pre-tax underwriting earnings in 2024, up from $1.9 billion in 2023. This improvement was driven by lower catastrophe losses and increased favorable development of prior year claims.
Diverse Businesses Deliver Mixed Results
Berkshire’s non-insurance businesses delivered mixed results in 2024. BNSF, the company’s railroad subsidiary, saw its after-tax earnings decline 1.1% to $5 billion, impacted by charges related to a labor agreement and litigation.
Berkshire Hathaway Energy (BHE), the company’s utilities and energy business, fared better, with after-tax earnings increasing 54.3% to $4 billion. This was primarily due to lower wildfire loss accruals at PacifiCorp and higher earnings from natural gas pipelines.
Berkshire’s manufacturing, service, and retailing businesses saw their combined pre-tax earnings decline 4.2% to $16.8 billion in 2024. The manufacturing segment, which includes industrial, building, and consumer products businesses, saw a 3.9% increase in pre-tax earnings to $11.9 billion. However, the service and retailing segments experienced declines of 23% and 19.2%, respectively, due to lower sales and margins.
Pilot Travel Centers, which Berkshire acquired a controlling interest in during 2023, saw its pre-tax earnings decline 41.9% to $614 million in 2024 compared to the full year 2023, primarily due to lower fuel margins and higher operating costs.
Investment Gains Contribute Significantly
Investment gains and losses continued to be a significant driver of Berkshire’s overall financial performance. The company recorded pre-tax investment gains of $52.8 billion in 2024, down from $74.9 billion in 2023 but up significantly from a loss of $67.9 billion in 2022. These gains were primarily due to changes in the market prices of Berkshire’s equity securities portfolio.
Berkshire’s equity investments, excluding its stakes in Kraft Heinz and Occidental Petroleum, were valued at $271.6 billion at the end of 2024. A hypothetical 30% increase in the market prices of these investments would have resulted in an estimated $62.6 billion increase in net earnings, while a 30% decrease would have led to a $62.5 billion decline.
Strong Balance Sheet and Liquidity
Berkshire’s financial condition remains exceptionally strong, with shareholders’ equity increasing to $649.4 billion at the end of 2024, up from $561.3 billion a year earlier. The company’s insurance and other businesses held $318 billion in cash, cash equivalents, and U.S. Treasury Bills at the end of 2024, providing ample liquidity.
Berkshire’s total consolidated borrowings stood at $124.8 billion at the end of 2024, with the majority issued by the parent company, BNSF, and BHE. The company continues to maintain high credit ratings, allowing it to access debt markets at favorable terms.
During 2024, Berkshire repurchased $2.9 billion of its own stock, underscoring its commitment to returning capital to shareholders when the company’s shares trade below Buffett’s assessment of intrinsic value.
Outlook and Risks
Berkshire’s diverse business model and strong financial position provide a degree of resilience in the face of ongoing macroeconomic and geopolitical uncertainties. However, the company’s results remain subject to various risks, including the impact of inflation, supply chain disruptions, and potential catastrophe losses in its insurance operations.
The company’s large equity portfolio also exposes it to significant market risk, as evidenced by the volatility in investment gains and losses. Berkshire’s concentration in a few large investments, such as its stakes in Kraft Heinz and Occidental Petroleum, further amplifies this risk.
Additionally, Berkshire’s reinsurance and retroactive reinsurance businesses face inherent uncertainties in estimating ultimate claims liabilities, particularly for long-tail casualty exposures. Adverse developments in these areas could have a material impact on the company’s future financial performance.
Overall, Berkshire Hathaway’s 2024 results demonstrate the strength and resilience of its diversified business model. The company’s insurance operations have rebounded, and its non-insurance businesses continue to contribute significantly to its financial performance. However, Berkshire remains exposed to a range of risks that could affect its future earnings and cash flows. Investors will closely monitor the company’s ability to navigate these challenges and maintain its strong financial position in the years ahead.