FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to

Commission file number 001-14905

BERKSHIRE HATHAWAY INC.

(Exact name of registrant as specified in its charter)

Delaware	47-0813844
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

3555 Farnam Street, Omaha, Nebraska 68131

(Address of principal executive office) (Zip Code)

(402) 346-1400

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Class A Common Stock Class B Common Stock 0.750% Senior Notes due 2023 1.125% Senior Notes due 2027 1.625% Senior Notes due 2035 0.500% Senior Notes due 2020 1.300% Senior Notes due 2024 2.150% Senior Notes due 2028 0.250% Senior Notes due 2021 0.625% Senior Notes due 2023 2.375% Senior Notes due 2039 2.625% Senior Notes due 2059	BRK.A BRK.B BRK23 BRK27 BRK35 BRK20 BRK24 BRK28 BRK21 BRK23A BRK39 BRK59	New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated  filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Number of shares of common stock outstanding as of October 24, 2019:

Class A —	707,755
Class B —	1,383,414,987

BERKSHIRE HATHAWAY INC.

		Page No.
Part I – Financial Information
Item 1.  Financial Statements
	Consolidated Balance Sheets—September 30, 2019 and December 31, 2018	2-3
	Consolidated Statements of Earnings—Third Quarter and First Nine Months 2019 and 2018	4
	Consolidated Statements of Comprehensive Income—Third Quarter and First Nine Months 2019 and 2018	5
	Consolidated Statements of Changes in Shareholders’ Equity—Third Quarter and First Nine Months 2019 and 2018	6
	Consolidated Statements of Cash Flows—First Nine Months 2019 and 2018	7
	Notes to Consolidated Financial Statements	8-27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28-48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
Part II – Other Information		49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
Signature		50

1

Part I Financial Information

Item 1. Financial Statements

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

	September 30, 2019		December 31, 2018
	(Unaudited)
ASSETS
Insurance and Other:
Cash and cash equivalents*	$	71,064	$	27,749
Short-term investments in U.S. Treasury Bills		53,378		81,506
Investments in fixed maturity securities		19,172		19,898
Investments in equity securities		220,051		172,757
Equity method investments		17,535		17,325
Loans and finance receivables		17,135		16,280
Other receivables		34,511		31,564
Inventories		19,951		19,069
Property, plant and equipment		21,230		20,628
Equipment held for lease		14,934		14,298
Goodwill		56,478		56,323
Other intangible assets		30,788		31,499
Deferred charges under retroactive reinsurance contracts		13,359		14,104
Other		13,430		9,307
		603,016		532,307
Railroad, Utilities and Energy:
Cash and cash equivalents*		3,712		2,612
Receivables		3,756		3,666
Property, plant and equipment		135,326		131,780
Goodwill		24,750		24,702
Regulatory assets		3,007		3,067
Other		14,915		9,660
		185,466		175,487
	$	788,482	$	707,794

* Cash and cash equivalents included U.S. Treasury Bills with maturities of three months or less when purchased of $40.6 billion at September 30, 2019 and $3.9 billion at December 31, 2018.

See accompanying Notes to Consolidated Financial Statements

2

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

	September 30, 2019			December 31, 2018
	(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance and Other:
Unpaid losses and loss adjustment expenses	$	71,997		$	68,458
Unpaid losses and loss adjustment expenses under retroactive reinsurance contracts		41,364			41,834
Unearned premiums		20,764			18,093
Life, annuity and health insurance benefits		19,422			18,632
Other policyholder liabilities		7,686			7,675
Accounts payable, accruals and other liabilities		25,880			23,696
Payable for purchases of U.S. Treasury Bills		8,123			2,080
Derivative contract liabilities		1,236			2,452
Aircraft repurchase liabilities and unearned lease revenues		5,106			4,593
Notes payable and other borrowings		37,176			34,975
		238,754			222,488
Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities		15,309			11,410
Regulatory liabilities		7,454			7,506
Notes payable and other borrowings		65,018			62,515
		87,781			81,431
Income taxes, principally deferred		60,389			51,375
Total liabilities		386,924			355,294
Shareholders’ equity:
Common stock		8			8
Capital in excess of par value		35,612			35,707
Accumulated other comprehensive income		(5,408	)		(5,015	)
Retained earnings		373,334			321,112
Treasury stock, at cost		(5,937	)		(3,109	)
Berkshire Hathaway shareholders’ equity		397,609			348,703
Noncontrolling interests		3,949			3,797
Total shareholders’ equity		401,558			352,500
	$	788,482		$	707,794

See accompanying Notes to Consolidated Financial Statements

3

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

(dollars in millions except per share amounts)

	Third Quarter				First Nine Months
	2019		2018		2019		2018
	(Unaudited)				(Unaudited)
Revenues:
Insurance and Other:
Insurance premiums earned	$	15,323	$	14,333	$	44,505	$	41,855
Sales and service revenues		34,026		33,832		100,563		99,492
Leasing revenues		1,438		1,474		4,365		4,378
Interest, dividend and other investment income		2,483		1,993		6,895		5,583
		53,270		51,632		156,328		151,308
Railroad, Utilities and Energy:
Freight rail transportation revenues		5,982		6,112		17,558		17,547
Energy operating revenues		4,338		4,419		11,729		11,818
Service revenues and other income		1,382		1,287		3,633		3,450
		11,702		11,818		32,920		32,815
Total revenues		64,972		63,450		189,248		184,123
Investment and derivative contract gains (losses):
Investment gains (losses)		10,692		14,569		40,079		12,750
Derivative contract gains (losses)		234		137		1,217		303
		10,926		14,706		41,296		13,053
Costs and expenses:
Insurance and Other:
Insurance losses and loss adjustment expenses		10,858		9,932		31,701		28,296
Life, annuity and health insurance benefits		1,176		1,448		3,245		4,153
Insurance underwriting expenses		2,708		2,352		8,033		7,079
Cost of sales and services		26,950		27,084		79,764		79,254
Cost of leasing		1,010		978		3,030		2,949
Selling, general and administrative expenses		4,384		4,494		13,645		13,434
Interest expense		261		252		790		772
		47,347		46,540		140,208