Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGIST****ERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Berkshire Hathaway Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Berkshire Hathaway Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive income, changes in shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

K-64

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Continued)

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Unpaid Losses and Loss Adjustment Expenses — Refer to Notes 1 and 16 to the financial statements

Critical Audit Matter Description

The Company’s unpaid losses and loss adjustment expenses (“claim liabilities”) include short duration property and casualty insurance and reinsurance contracts. Key assumptions affecting certain of these claim liabilities include anticipated claims and their severity, expected loss ratios, and expected patterns of paid and incurred losses.

Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether certain of these claim liabilities were appropriately recorded as of December 31, 2024 required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the key assumptions affecting certain of these claim liabilities included the following, among others:

We tested the operating effectiveness of controls over claim liabilities, including those over the key assumptions.

We tested the underlying data that served as the basis for the actuarial analysis to evaluate that the inputs to the actuarial estimate were accurate and complete.

With the assistance of our actuarial specialists:

We developed independent estimates of the claim liabilities, including loss data and industry claim development factors as needed, and compared our estimates to management’s estimates.

We compared prior year estimates of expected incurred losses to actual experience during the most recent year to identify potential bias in management’s determination of the claim liabilities.

Unpaid Losses and Loss Adjustment Expenses — Retroactive Reinsurance Contracts — Refer to Notes 1 and 17 to the financial statements

Critical Audit Matter Description

The Company’s unpaid losses and loss adjustment expenses under retroactive reinsurance contracts (“retroactive claim liabilities”) include property and casualty retroactive reinsurance contracts. Key assumptions affecting certain of these retroactive claim liabilities include anticipated claims and their severity, expected loss ratios, and expected patterns of paid and incurred losses.

Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether certain of these claim liabilities were appropriately recorded as of December 31, 2024, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the key assumptions affecting claim liabilities included the following, among others:

We tested the operating effectiveness of controls over claim liabilities, including those over the key assumptions.

We tested the underlying data that served as the basis for the actuarial analysis, including historical claims, to test that the inputs to the actuarial estimate were accurate and complete.

With the assistance of our actuarial specialists:

We developed independent claim liability estimates for certain retroactive reinsurance contracts and compared our estimates to management’s estimates. For other retroactive reinsurance contracts, we evaluated the process used by management to develop the estimated claim liabilities.

We compared prior year estimates of expected incurred losses to actual experience during the most recent year to identify potential bias in management’s determination of the claim liabilities.

/s/ Deloitte & Touche LLP

Omaha, Nebraska

February 22, 2025

We have served as the Company’s auditor since 1985.

K-65

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED B****ALANCE SHEETS

(dollars in millions)

	December 31,
	2024				2023
Assets:
Insurance and Other:
Cash and cash equivalents*	$	44,333			$	34,268
Short-term investments in U.S. Treasury Bills		286,472				129,619
Investments in fixed maturity securities		15,364				23,758
Investments in equity securities		271,588				353,842
Equity method investments		31,134				29,066
Loans and finance receivables		27,798				24,681
Other receivables		43,887				46,261
Inventories		24,008				25,856
Property, plant and equipment		30,071				30,199
Equipment held for lease		17,828				16,947
Goodwill		56,860				57,473
Other intangible assets		34,638				35,884
Deferred charges - retroactive reinsurance		8,797				9,495
Other		24,994				21,866
		917,772				839,215
Railroad, Utilities and Energy:
Cash and cash equivalents*		3,396				3,754
Receivables		4,503				4,999
Property, plant and equipment		175,030				169,447
Goodwill		27,020				27,153
Regulatory assets		5,349				5,565
Other		20,811				19,845
		236,109				230,763
Total assets	$	1,153,881			$	1,069,978

*** Includes U.S. Treasury Bills *with maturities of three months or less when purchased of $*14.4 *billion at December 31, 2024 and $*4.8 billion at December 31, 2023.

See accompanying Notes to Consolidated Financial Statements

K-66

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

	December 31,
	2024				2023
Liabilities:
Insurance and Other:
Unpaid losses and loss adjustment expenses	$	115,151			$	111,082
Unpaid losses and loss adjustment expenses - retroactive reinsurance contracts		32,443				34,647
Unearned premiums		30,808				30,507
Life, annuity and health insurance benefits		17,616				20,213
Other policyholder liabilities		10,703				11,545
Accounts payable, accruals and other liabilities		37,489				36,559
Payable for purchase of U.S. Treasury Bills		12,769				—
Aircraft repurchase liabilities and unearned lease revenues		9,356				8,253
Notes payable and other borrowings		44,885				48,468
		311,220				301,274
Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities		18,226				18,304
Regulatory liabilities		7,033				6,818
Notes payable and other borrowings		79,877				79,803
		105,136				104,925
Income taxes, principally deferred		85,870				93,009
Total liabilities		502,226				499,208
Redeemable noncontrolling interests		—				3,261
Shareholders’ equity:
Common stock		8				8
Capital in excess of par value		35,665				34,480
Accumulated other comprehensive income		(3,584	)			(3,763	)
Retained earnings		696,218				607,350
Treasury stock, at cost		(78,939	)			(76,802	)
Berkshire shareholders’ equity		649,368				561,273
Noncontrolling interests		2,287				6,236
Total shareholders’ equity		651,655				567,509
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	1,153,881			$	1,069,978

See accompanying Notes to Consolidated Financial Statements

K-67

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED STATE****MENTS OF EARNINGS

(dollars in millions except per share amounts)

	Year Ended December 31,
	2024				2023				2022
Revenues:
Insurance and Other:
Insurance premiums earned	$	88,257			$	83,403			$	74,576
Sales and service revenues		202,334				207,148				157,518
Leasing revenues		9,227				8,416				7,514
Interest, dividend and other investment income		21,825				15,764				10,263
		321,643				314,731				249,871
Railroad, Utilities and Energy:
Railroad transportation revenues		23,355				23,791				25,802
Utility and energy operating revenues		21,518				21,232				21,023
Service revenues and other income		4,917				4,728				5,324
		49,790				49,751				52,149
Total revenues		371,433				364,482				302,020
Investment gains (losses)		52,799				74,855				(67,899	)
Costs and expenses:
Insurance and Other:
Insurance losses and loss adjustment expenses		56,186				57,187				57,646
Life, annuity and health benefits		3,858				4,029				5,243
Insurance underwriting expenses		16,808				15,270				11,706
Cost of sales and services		163,642				169,281				124,319
Cost of leasing		7,069				6,037				5,550
Selling, general and administrative expenses		25,642				25,458				19,506
Interest expense		1,594				1,671				1,187
		274,799				278,933				225,157
Railroad, Utilities and Energy:
Freight rail transportation expenses		15,965				16,464				17,282
Utilities and energy cost of sales and other expenses		16,984				18,399				15,896
Other expenses		4,343				4,016				4,984
Interest expense		3,606				3,332				3,165
		40,898				42,211				41,327
Total costs and expenses		315,697				321,144				266,484
Earnings (loss) before income taxes and equity method earnings		108,535				118,193				(32,363	)
Equity method earnings		1,841				1,973				1,863
Earnings (loss) before income taxes		110,376				120,166				(30,500	)
Income tax expense (benefit)		20,815				23,019				(8,502	)
Net earnings (loss)		89,561				97,147				(21,998	)
Earnings attributable to noncontrolling interests		566				924				761
Net earnings (loss) attributable to Berkshire shareholders	$	88,995			$	96,223			$	(22,759	)
Net earnings (loss) per average equivalent Class A share	$	61,900			$	66,412			$	(15,494	)
Net earnings (loss) per average equivalent Class B share*	$	41.27			$	44.27			$	(10.33	)
Average equivalent Class A shares outstanding		1,437,720				1,448,880				1,468,876
Average equivalent Class B shares outstanding		2,156,580,296				2,173,319,709				2,203,313,642

*** Net earnings (loss) per average equivalent Class B share outstanding are equal to one-fifteen-hundredth of the equivalent Class A amount. See Note 22.

See accompanying Notes to Consolidated Financial Statements

K-68

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in millions)

		Year Ended December 31,
		2024				2023				2022
Net earnings (loss)		$	89,561			$	97,147			$	(21,998	)
Other comprehensive income:
Unrealized gains (losses) on investments			(82	)			477				(713	)
Applicable income taxes			9				(100	)			158
Foreign currency translation			(1,500	)			782				(2,138	)
Applicable income taxes			(36	)			(7	)			22
Long-duration insurance contract discount rate changes			807				(237	)			7,177
Applicable income taxes			(144	)			49				(1,540	)
Defined benefit pension plans			1,628				578				(253	)
Applicable income taxes			(350	)			(123	)			47
Other, net			(162	)			(101	)			250
Other comprehensive income, net			170				1,318				3,010
Comprehensive income			89,731				98,465				(18,988	)
Comprehensive income attributable to noncontrolling interests			557				953				700
Comprehensive income attributable to Berkshire shareholders		$	89,174			$	97,512			$	(19,688	)

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CH****ANGES IN SHAREHOLDERS’ EQUITY

(dollars in millions)

		Berkshire shareholders’ equity
		Common stock and capital in excess of par value			Accumulated other comprehensive income			Retained earnings			Treasury stock			Non- controlling interests			Total
Balance at December 31, 2021		$	35,600		$	(8,123	)	$	533,886		$	(59,795	)	$	8,731		$	510,299
Net earnings (loss)			—			—			(22,759	)		—			761			(21,998	)
Other comprehensive income, net			—			3,071			—			—			(61	)		3,010
Acquisitions of common stock			—			—			—			(8,031	)		—			(8,031	)
Transactions with noncontrolling interests and other			(425	)		—			—			—			(1,174	)		(1,599	)
Balance at December 31, 2022			35,175			(5,052	)		511,127			(67,826	)		8,257			481,681
Net earnings			—			—			96,223			—			924			97,147
Other comprehensive income, net			—			1,289			—			—			29			1,318
Acquisitions of common stock			—			—			—			(8,976	)		—			(8,976	)
Transactions with noncontrolling interests and other			(687	)		—			—			—			(2,974	)		(3,661	)
Balance at December 31, 2023			34,488			(3,763	)		607,350			(76,802	)		6,236			567,509
Net earnings			—			—			88,995			—			566			89,561
Adoption of ASU 2023-02			—			—			(127	)		—			—			(127	)
Other comprehensive income, net			—			179			—			—			(9	)		170
Acquisitions of common stock			—			—			—			(2,918	)		—			(2,918	)
Transactions with noncontrolling interests and other			1,185			—			—			781			(4,506	)		(2,540	)
Balance at December 31, 2024		$	35,673		$	(3,584	)	$	696,218		$	(78,939	)	$	2,287		$	651,655

See accompanying Notes to Consolidated Financial Statements

K-69

BERKSHIRE HATHAWAY INC.

and Subsidiaries

CONSOLIDATED STATEM****ENTS OF CASH FLOWS

(dollars in millions)

		Year Ended December 31,
		2024				2023				2022
Cash flows from operating activities:
Net earnings (loss)		$	89,561			$	97,147			$	(21,998	)
Adjustments to reconcile net earnings (loss) to operating cash flows:
Investment (gains) losses			(52,799	)			(74,855	)			67,899
Depreciation and amortization			12,855				12,486				10,899
Discount accretion on investments, principally U.S. Treasury Bills			(11,349	)			(5,510	)			(1,132	)
Other			(892	)			(513	)			(3,074	)
Changes in operating assets and liabilities:
Unpaid losses and loss adjustment expenses			2,173				2,628				4,057
Deferred charges - retroactive reinsurance			698				375				769
Unearned premiums			376				1,854				1,861
Receivables and originated loans			626				(1,949	)			(5,621	)
Inventories			591				1,426				(4,779	)
Other assets			(797	)			(1,328	)			(378	)
Other liabilities			(2,288	)			2,570				1,719
Income taxes			(8,163	)			14,865				(12,872	)
Net cash flows from operating activities			30,592				49,196				37,350
Cash flows from investing activities:
Purchases of equity securities			(9,237	)			(16,462	)			(67,930	)
Sales of equity securities			143,359				40,631				33,664
Purchases of U.S. Treasury Bills and fixed maturity securities			(526,842	)			(235,007	)			(183,922	)
Sales of U.S. Treasury Bills and fixed maturity securities			48,462				52,302				90,088
Redemptions and maturities of U.S. Treasury Bills and fixed maturity securities			353,538				153,201				66,318
Acquisitions of businesses, net of cash acquired			(396	)			(8,604	)			(10,594	)
Purchases of property, plant and equipment and equipment held for lease			(18,976	)			(19,409	)			(15,464	)
Other			(195	)			685				239
Net cash flows from investing activities			(10,287	)			(32,663	)			(87,601	)
Cash flows from financing activities:
Proceeds from borrowings of insurance and other businesses			5,528				2,133				7,822
Repayments of borrowings of insurance and other businesses			(7,796	)			(6,027	)			(1,502	)
Proceeds from borrowings of railroad, utilities and energy businesses			7,658				5,684				4,873
Repayments of borrowings of railroad, utilities and energy businesses			(4,151	)			(5,284	)			(2,426	)
Changes in short-term borrowings, net			(3,059	)			2,407				(596	)
Acquisitions of treasury stock			(2,918	)			(9,171	)			(7,854	)
Other, principally transactions with noncontrolling interests			(5,622	)			(4,147	)			(1,979	)
Net cash flows from financing activities			(10,360	)			(14,405	)			(1,662	)
Effects of foreign currency exchange rate changes			(212	)			116				(394	)
Increase (decrease) in cash and cash equivalents and restricted cash			9,733				2,244				(52,307	)
Cash and cash equivalents and restricted cash at the beginning of the year*			38,643				36,399				88,706
Cash and cash equivalents and restricted cash at the end of the year*		$	48,376			$	38,643			$	36,399
** Cash and cash equivalents and restricted cash at the end of the year:*
Insurance and Other		$	44,333			$	34,268			$	32,260
Railroad, Utilities and Energy			3,396				3,754				3,551
Restricted cash included in other assets			647				621				588
		$	48,376			$	38,643			$	36,399

See accompanying Notes to Consolidated Financial Statements

K-70

BERKSHIRE HATHAWAY INC.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(1)

Significant accounting policies and practices

(a)

Nature of operations and basis of consolidation

Berkshire Hathaway Inc. (“Berkshire”) is a holding company owning subsidiaries engaged in numerous diverse business activities, including insurance and reinsurance, freight rail transportation, utilities and energy, manufacturing, service and retailing. In these notes the terms “us,” “we,” or “our” refer to Berkshire and its consolidated subsidiaries. Further information regarding our reportable business segments is contained in Note 26. Information concerning significant business acquisitions completed over the past three years appears in Note 2.

The accompanying Consolidated Financial Statements include the accounts of Berkshire consolidated with the accounts of all subsidiaries and affiliates in which we hold a controlling financial interest as of the financial statement date. Normally a controlling financial interest reflects ownership of a majority of the voting interests. We consolidate variable interest entities (“VIE”) when we possess both the power to direct the activities of the VIE that most significantly affect its economic performance, and we (a) are obligated to absorb the losses that could be significant to the VIE or (b) hold the right to receive benefits from the VIE that could be significant to the VIE. Intercompany accounts and transactions have been eliminated.

Certain balances in the accompanying Consolidated Financial Statements for 2023 have been reclassified to conform to current year presentations. We reclassified the asset, liability, revenue and expense balances in 2023 associated with Pilot Travel Centers LLC (“Pilot”) from the Railroad, Utilities and Energy sections of the Balance Sheet, Statement of Earnings and Statement of Cash Flows to the Insurance and Other sections of those statements. We also reclassified the balances within the affected Notes to the Consolidated Financial Statements. These reclassifications conform presentations for comparability to presentations in 2024. These reclassifications had no effect on consolidated total assets, liabilities, shareholders’ equity, revenues, expenses, or on net earnings or cash flows from the amounts previously reported. See Note 1(y) for a summary of the reclassifications.

We continue to believe that reporting the railroad, utilities and energy subsidiaries separately in our Consolidated Balance Sheets and Consolidated Statements of Earnings is appropriate, given relative significance of property, plant and equipment, capital expenditures and debt. Further, these subsidiaries are not supported by Berkshire debt guarantees or other financial commitments.

(b)

Use of estimates in preparation of financial statements

We prepare our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities at the balance sheet date and the reported amounts of certain revenues and expenses during the period. Our estimates of unpaid losses and loss adjustment expenses for property and casualty insurance claims are subject to considerable estimation error due to the inherent uncertainty in projecting ultimate claim costs. In addition, estimates and assumptions associated with determinations of deferred charges on retroactive reinsurance contracts, fair values of certain financial instruments and evaluations of goodwill and indefinite-lived intangible assets for impairment require considerable judgment. Additionally, significant estimates may be required in the evaluation of certain other long-lived assets for impairments and the recognition of expected credit losses on amounts owed to us. Estimates may be subject to significant adjustments in future periods due to ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events. Actual results may differ from the estimates used in preparing our Consolidated Financial Statements.

(c)

Cash and cash equivalents and short-term investments in U.S. Treasury Bills

Cash equivalents consist of demand deposit and money market accounts and investments with maturities of three months or less when purchased. Short-term investments in U.S. Treasury Bills have maturities exceeding three months and less than one year at the time of purchase.

K-71

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(d)

Investments in fixed maturity securities

We classify investments in fixed maturity securities on the acquisition date and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes in fair value reported in earnings. All other securities are classified as available-for-sale and are carried at fair value. Our investments in fixed maturity securities are classified as available-for-sale. We amortize the difference between the original cost and maturity value of a fixed maturity security to earnings using the interest method.

We record investment gains and losses on available-for-sale fixed maturity securities in earnings when the securities are sold. For securities in an unrealized loss position, we recognize a loss in earnings for the excess of amortized cost over fair value if we intend to sell before the price recovers. As of the balance sheet date, we evaluate unrealized losses, considering the severity of the decline in value, creditworthiness of the issuer and other relevant factors. We record an allowance for credit losses, limited to the excess of amortized cost over fair value, with a corresponding charge to earnings if the present value of estimated expected cash flows is less than the present value of contractual cash flows. The allowance may be subsequently increased or decreased based on the prevailing facts and circumstances. The portion of the unrealized loss that is not related to a credit loss is recognized in other comprehensive income.

(e)

Investments in equity securities

We carry investments in equity securities at fair value and record the changes in fair values in the Consolidated Statements of Earnings as a component of investment gains and losses.

(f)

Investments under the equity method

We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. We apply the equity method to investments in common stock and other investments when such investments possess substantially identical subordinated interests to common stock, and do not apply the equity method to investments that are not in-substance common stock as defined by GAAP.

In applying the equity method, we increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the investee. We record additional investments at cost and equity distributions received as reductions in the carrying value of the investment. If net losses reduce our carrying amount to zero, additional net losses may be recorded if other investments in the investee are at-risk, even if we have not committed to provide financial support to the investee.

(g)

Loans and finance receivables

Loans and finance receivables are primarily manufactured home loans, and to a lesser extent, commercial loans and site-built home loans. We carry substantially all loans and finance receivables at amortized cost, net of allowances for expected credit losses, based on our ability and intent to hold such loans to maturity. Acquisition costs and loan origination and commitment costs paid and fees received, as well as acquisition premiums or discounts, are capitalized and accrued to investment income as yield adjustments over the lives of the loans.

Measurements of expected credit losses include provisions for non-collection, whether the risk is probable or remote. Expected credit losses on manufactured home loans are based on the net present value of future principal payments less estimated expenses related to the charge-off and foreclosure of expected uncollectible loans and include provisions for loans that are not in foreclosure. Our principal credit quality indicator is whether the loans are performing. Expected credit loss estimates consider historical default rates, collateral recovery rates, historical runoff rates, interest rates, reductions of future cash flows for modified loans and the historical time elapsed from last payment until foreclosure, among other factors. In addition, our estimates consider current conditions and reasonable and supportable forecasts.

K-72

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(g) Loans and finance receivables

Loans are considered delinquent when payments are more than 30 days past due. We place loans over 90 days past due on nonaccrual status and accrued but uncollected interest is reversed. Subsequent collections on the loans are first applied to the principal and interest owed for the most delinquent amount. We resume interest income accrual once a loan is less than 90 days delinquent.

Loans are considered non-performing when the foreclosure process has started. Once a loan is in the process of foreclosure, interest income is not recognized until the foreclosure is cured or the loan is modified. Once a modification is complete, interest income is recognized based on the terms of the new loan. Foreclosed loans are charged off when the collateral is sold. Loans not in foreclosure are evaluated for charge-off based on individual circumstances concerning the future collectability of the loan and the condition of the collateral securing the loan.

(h)

Other receivables

Other receivables include balances due from customers, insurance premiums receivable and reinsurance losses recoverable, as well as other receivables. Trade receivables, insurance premiums receivables and other receivables are primarily short-term in nature with stated collection terms of less than one year from the date of origination. Reinsurance recoverables are comprised of amounts ceded under reinsurance contracts or pursuant to mandatory government-sponsored insurance programs. Reinsurance recoverables arise from unpaid losses and loss adjustment expenses on property and casualty claims and benefits under life and health contracts. Receivables are stated net of estimated allowances for uncollectible balances.

We measure expected credit losses primarily utilizing credit loss history. In addition, our credit loss estimates consider current conditions and reasonable and supportable forecasts. In evaluating expected credit losses of reinsurance recoverables on unpaid losses, we review the credit quality of the counterparty and consider right-of-offset provisions within reinsurance contracts and other forms of credit enhancement including collateral, guarantees and other available information. We charge off receivables against the allowances after reasonable collection efforts are exhausted.

(i)

Derivatives

We carry assets and liabilities arising from derivative contracts at fair value in other assets and accounts payable, accruals and other liabilities in our Consolidated Balance Sheets. Balances are net of reductions permitted under master netting agreements with counterparties. We record the changes in fair value of derivative contracts that do not qualify as hedging instruments for financial reporting purposes in earnings or if such contracts involve our regulated utilities subsidiaries, as regulatory assets or liabilities when inclusion in regulated rates is probable.

(j)

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets when estimating fair value. In such circumstances, alternative valuation techniques may be appropriate to determine the value that would be received to sell an asset or paid to transfer a liability in an orderly transaction. Market participants are assumed to be independent, knowledgeable, and able and willing to transact an exchange and not acting under duress. Our nonperformance or credit risk is considered in determining the fair value of liabilities. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.

(k)

Inventories

Inventories consist of manufactured products, goods or products acquired for resale, materials and supplies and homes constructed for sale. Manufactured inventory costs include materials, direct and indirect labor and factory overhead. At December 31, 2024, we used the last-in-first-out (“LIFO”) method to value 32% of consolidated inventories with the remainder primarily determined under first-in-first-out and average cost methods. Non-LIFO inventories are stated at the lower of cost or net realizable value. The excess of current or replacement costs over costs determined under LIFO was approximately $2.3 billion as of December 31, 2024 and December 31, 2023.

K-73

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(l)

Property, plant and equipment and equipment held for lease

We use property, plant and equipment in our operations. We also own equipment that we lease to others under lease contracts. We record additions, improvements and betterments to such properties at cost. With respect to constructed assets, all materials, direct labor and contract services as well as certain indirect costs, including interest over the construction period, are capitalized. With respect to constructed assets that are subject to authoritative guidance for regulated operations, capitalized costs also include an allowance for funds used during construction, which represents the cost of equity funds used to finance the construction of the regulated facilities. Normal repairs and maintenance and other costs that do not improve the property, extend its useful life or otherwise do not meet capitalization criteria are charged to expense as incurred.

Depreciation expense of our regulated utilities and railroad is generally determined using group depreciation methods where rates are based on periodic depreciation studies approved by the applicable regulator. Under group depreciation, a composite rate is applied to the gross investment in a particular class of property, despite differences in the service life or salvage value of individual property units within the same class. When such assets are retired or sold, no gain or loss is recognized. Gains or losses on disposals of all other assets are recorded through earnings. Ranges of estimated useful lives of depreciable assets unique to our railroad business are as follows: track structure and other roadway – 10 to 100 years and locomotives, freight cars and other equipment – 6 to 45 years. Ranges of estimated useful lives of assets unique to our utilities and energy businesses are as follows: utility generation, transmission and distribution systems – 5 to 80 years, interstate natural gas pipeline assets – 3 to 80 years and independent power plants and other assets – 2 to 50 years.

We depreciate property, plant and equipment used in operations by our other businesses to the estimated salvage value primarily using the straight-line method over estimated service lives. Ranges of estimated service lives of depreciable assets used in our other businesses are as follows: buildings and improvements – 5 to 50 years, machinery and equipment – 3 to 30 years and furniture, fixtures and other – 4 to 15 years. We depreciate the equipment held for lease to estimated salvage value primarily using the straight-line method over estimated useful lives ranging from 3 to 35 years. We use declining balance depreciation methods for assets when the revenue-earning power of the asset is greater during the earlier years of its life.

We evaluate property, plant and equipment and equipment held for lease for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable or when the assets are held for sale. Upon the occurrence of a triggering event, we assess whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. If the carrying value exceeds the estimated recoverable amounts, we reduce the carrying value to fair value and record an impairment loss in earnings, except with respect to impairment of assets of our regulated utility and energy subsidiaries where the impacts of regulation are considered in evaluating the carrying value.

(m)

Leases

We are party to contracts where we lease property from others. When we lease assets from others, we record right-of-use assets and lease liabilities. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. In this regard, lease payments include fixed payments and variable payments that depend on an index or rate. The lease term is considered the non-cancellable lease period. Certain lease contracts contain renewal options or other terms that provide variable payments based on performance or usage. Options are not included in determining right-of-use assets or lease liabilities unless it is reasonably certain that options will be exercised. Generally, incremental borrowing rates are used in measuring lease liabilities. Right-of-use assets are subject to review for impairment. As permitted under GAAP, for some leases we do not separate lease components from non-lease components by class of asset and we do not record assets or liabilities for leases with terms of one year or less.

K-74

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(n)

Goodwill and other intangible assets

Goodwill represents the excess of the acquisition price of a business over the acquisition date values of identified net assets of that business. We evaluate goodwill for impairment at least annually. When evaluating goodwill for impairment, we estimate the fair value of the reporting unit. Several methods may be used to estimate a reporting unit’s fair value, including market quotations, asset and liability fair values and other valuation techniques, including, but not limited to, discounted projected future net earnings or net cash flows and multiples of earnings. When the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess up to the balance of goodwill is charged to earnings as an impairment loss.

Other intangible assets with indefinite lives are also tested for impairment at least annually and when events or changes in circumstances indicate that, more likely-than-not, the asset is impaired. When the asset carrying value exceeds fair value, the excess is charged to earnings as an impairment loss. Significant judgment is required in estimating fair values and evaluating goodwill and indefinite-lived intangible assets for impairment. We amortize intangible assets with finite lives in a pattern that reflects the expected consumption of related economic benefits or on a straight-line basis over the estimated economic useful lives. Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

(o)

Revenue recognition

We earn insurance premiums on prospective property/casualty insurance and reinsurance contracts over the loss exposure or coverage period in proportion to the level of protection provided. We earn such premiums, in most cases ratably, over the term of the contract with unearned premiums computed on a monthly or daily pro-rata basis. Premiums on retroactive property/casualty reinsurance contracts are normally received in full and are fully earned at the inception of the contracts, as all underlying loss events covered by the policies occurred prior to contract inception. Premiums for life reinsurance and periodic payment annuity contracts are earned when due. Premiums for periodic payment annuity contracts are received in full and fully earned at the inception of the contracts. Premiums earned are stated net of amounts ceded to reinsurers. Premiums earned on contracts with experience-rating provisions reflect estimated loss experience under such contracts.

Sales and service revenues are recognized when goods or services are transferred to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. Revenues are based on the consideration we expect to receive in connection with our promises to deliver goods and services to our customers.

We manufacture and/or distribute a wide variety of industrial, building and consumer products. We also sell fuels, including diesel, gasoline and related products, on a retail and wholesale basis.

Our sales contracts provide customers with products directly or through wholesale and retail channels in exchange for consideration specified under the contracts. Contracts generally represent customer orders for individual products at stated prices. Sales contracts may contain either single or multiple performance obligations. In instances where contracts contain multiple performance obligations, we allocate the revenue to each obligation based on the relative stand-alone selling prices of each product or service.

Sales revenues reflect reductions for returns, allowances, late delivery penalties, volume discounts and other incentives, some of which may be contingent on future events. In certain customer contracts, sales revenues include certain state and local excise taxes billed to customers on specified products when those taxes are levied directly upon us by the taxing authorities. Sales revenues exclude sales taxes and value-added taxes collected on behalf of taxing authorities. Sales revenues include consideration for shipping and other fulfillment activities performed prior to the customer obtaining control of the goods. We also elect to treat consideration for such services that are performed after control has passed to the customer as sales revenue.

Product sales revenues are generally recognized at a point in time when control of the product transfers to the customer, which coincides with customer pickup or product delivery or acceptance, depending on terms of the arrangement. We recognize sales revenues and related costs over time with respect to certain contracts, including certain bridge and structural steel, castings, forgings and aerostructures contracts. Control of the product units under these contracts transfers continuously to the customer as the product is manufactured. These products generally have no alternative use and the contract requires the customer to provide reasonable compensation if terminated for reasons other than breach of contract.

K-75

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(o)

Revenue recognition

The primary performance obligation under our freight rail transportation service contracts is to move freight from a point of origin to a point of destination. The performance obligations are represented by bills of lading which create a series of distinct services that have a similar pattern of transfer to the customer. The revenues for each performance obligation are based on various factors including the product being shipped, the origin and destination pair and contract incentives, which are outlined in various private rate agreements, common carrier public tariffs, interline foreign road agreements and pricing quotes. The transaction price is generally a per car/unit amount to transport railcars from a specified origin to a specified destination. Freight revenues are recognized over time as the service is performed because the customer simultaneously receives and consumes the benefits of the service. Revenues recognized represent the portion of the service completed as of the balance sheet date. Invoices for freight transportation services are generally issued to customers and paid within 30 days or less. Customer incentives, which are primarily provided for shipping a specified cumulative volume or shipping to/from specific locations, are recorded as a reduction to revenue on a pro-rata basis based on actual or projected future customer shipments.

Utilities and energy revenues derive primarily from regulated electricity and natural gas sales. Regulated electricity and natural gas revenues are primarily tariff-based sales arrangements approved by various regulatory commissions. These tariff-based revenues are mainly comprised of energy, transmission, distribution and natural gas and have performance obligations to deliver energy products and services to customers which are satisfied over time as energy is delivered or services are provided. Such revenues are equivalent to the amounts we have the right to invoice and correspond directly with the value to the customer of the performance to date and include billed and unbilled amounts. Payments from customers are generally due within 30 days of billing. Rates charged for regulated energy products and services are established by regulators or contractual arrangements that establish the transaction price, as well as the allocation of price among the separate performance obligations. When preliminary regulated rates are permitted to be billed prior to final approval by the applicable regulator, certain revenue collected may be subject to refund and a liability for estimated refunds is accrued.

Other service revenues derive from contracts with customers in which performance obligations are satisfied over time, where customers receive and consume benefits as we perform the services or at a point in time when the services are completed. Other service revenues primarily derive from real estate brokerage, construction management and consulting, automotive repair, aircraft management, aviation training, franchising activities and news distribution.

Leasing revenue is generally recognized ratably over the term of the lease or based on usage, if applicable under the terms of the contract. A substantial portion of our lessor contracts are classified as operating leases.

(p)

Losses and loss adjustment expenses

We record liabilities for unpaid losses and loss adjustment expenses under property and casualty insurance and reinsurance contracts for loss events that have occurred on or before the balance sheet date. Such liabilities represent the undiscounted estimated ultimate payment amounts.

We base liability estimates on (1) loss reports from policyholders and cedents, (2) individual case estimates and (3) estimates of incurred but not reported losses. Losses and loss adjustment expenses in the Consolidated Statements of Earnings include paid claims, claim settlement costs and changes in estimated claim liabilities. Losses and loss adjustment expenses in the Consolidated Statements of Earnings are stated net of amounts recovered and estimates of amounts recoverable ceded under reinsurance contracts. Reinsurance contracts do not relieve the ceding company of its obligations to indemnify policyholders with respect to the underlying insurance and reinsurance contracts.

(q)

Retroactive reinsurance contracts

We record liabilities for unpaid losses and loss adjustment expenses under short-duration retroactive reinsurance contracts consistent with property and casualty contracts described in Note 1(p). With respect to retroactive reinsurance contracts, we also record deferred charge assets at the inception of the contracts, representing the excess, if any, of the estimated ultimate claim liabilities over the premiums earned. We subsequently adjust deferred charge assets as of the balance sheet date based on changes in the estimated timing and amount of ultimate loss payments, with retrospective application to the inception of the contract using the interest method. The resulting changes in deferred charge assets are included as a component of insurance losses and loss adjustment expenses in the Consolidated Statements of Earnings.

K-76

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(r)

Insurance policy acquisition costs

Deferred policy acquisition costs are included in other assets and were approximately $4.6 billion at December 31, 2024 and 2023, of which $3.9 billion in each year related to property and casualty insurance contracts. We capitalize the direct incremental costs that relate to the successful sale of insurance contracts, subject to ultimate recoverability. Direct incremental acquisition costs include commissions, premium taxes and certain other costs associated with successful efforts. We expense all other underwriting costs as incurred. For short-duration property and casualty insurance contracts, deferred policy acquisition costs are reflected in expenses over the contract term as the related premiums are earned. For long-duration life contracts, we expense deferred policy acquisition costs at a constant level based on the expected amount of insurance in-force and the expected term of the contract using the assumptions consistent with those used in determining related insurance liabilities.

(s)

Life, annuity and health insurance benefits

Liabilities for life, annuity and health insurance benefits under long-duration insurance contracts represent the present value of expected future cash outflows from future benefit payments and certain non-acquisition costs, less the present value of expected future “net premiums,” which is the portion of gross premiums required to provide for all expected future benefits and variable expenses. Periodic payment and annuity reinsurance contracts are regarded as limited payment contracts. Such liabilities include the present value of expected future payments based on the discount rates used to measure benefit liabilities and deferred profit liabilities, which are based on the excess of gross premiums received over the net premiums established at the inception of the contract.

In estimating future cash flows, we consider the timing and amount of future claims, premiums and expenses, which require estimates of expected mortality, morbidity and lapse rates. Cash flow assumptions are reviewed at least annually, with the effects of assumption changes recorded in earnings. The discount rate assumptions used to measure benefit liabilities are revised each reporting period based on the prevailing upper-medium-grade corporate bond yields (generally single-A rated credit ratings) that reflect the duration and currency attributes of the liabilities. In measuring benefit liabilities, we generally group contracts by contract issue year. The effects of changes in discount rates are recorded in accumulated other comprehensive income.

(t)

Regulated utilities and energy businesses

Certain regulated utility and energy subsidiaries prepare their financial statements in accordance with authoritative guidance for regulated operations, reflecting the economic effects of regulation from the ability to recover certain costs from customers and the requirement to return revenues to customers in the future through the regulated rate-setting process. Accordingly, certain costs are deferred as regulatory assets and certain income is accrued as regulatory liabilities.

Regulatory assets and liabilities are subsequently amortized into operating expenses and revenues over various future periods. Regulatory assets and liabilities are continually assessed for probable future inclusion in regulatory rates by considering factors such as applicable regulatory or legislative changes and recent rate orders received by other regulated entities. If future inclusion in regulatory rates ceases to be probable, the amount no longer probable of inclusion in regulatory rates is charged or credited to earnings (or other comprehensive income, if applicable) or returned to customers.

(u)

Foreign currency

The accounts of certain subsidiaries are measured using functional currencies other than the U.S. Dollar. Revenues and expenses in the financial statements of these subsidiaries are translated into U.S. Dollars at the average exchange rate for the period and assets and liabilities are translated at the exchange rate as of the end of the reporting period. The net effects of translating the financial statements of these subsidiaries are included in shareholders’ equity as a component of accumulated other comprehensive income. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity, including gains and losses from the remeasurement of assets and liabilities due to changes in currency exchange rates, are included in earnings.

K-77

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(v)

Income taxes

Berkshire files a consolidated federal income tax return in the U.S. with eligible subsidiaries. In addition, we file income tax returns in U.S. state and local and foreign jurisdictions. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions.

Deferred income tax assets and liabilities are computed on differences between the financial statement bases and tax bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities associated with components of other comprehensive income are charged or credited directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred income tax assets when realization is deemed to be unlikely.

Liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense.

(w)

Accounting pronouncements adopted in 2024

We adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2023-02, “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”). ASU 2023-02 permits reporting entities to elect to account for tax equity investments from which the income tax credits are received using the proportional amortization method at the program level if certain conditions are met. We elected to apply the proportional accounting method to eligible affordable housing tax credit investments using the modified retrospective method. We recorded a charge to retained earnings of $127 million, representing the cumulative effect of applying the proportional method to these investments as of January 1, 2024.

We adopted FASB Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”) beginning December 31, 2024. ASU 2023-07 requires disclosures of significant expenses by segment and interim disclosure of items that were previously required only on an annual basis. We adopted ASU 2023-07 retrospectively with such disclosures included in Note 26 to the accompanying Consolidated Financial Statements.

(x)

Accounting pronouncements to be adopted subsequent to December 31, 2024

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional income tax rate reconciliation and income taxes paid disclosures. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

In November 2024, the FASB issued Accounting Standards Update 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires detailed disclosure in the notes to the financial statements of specific categories underlying certain expense captions on the income statement. ASU 2024-03 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

On March 6, 2024, the U.S. Securities Exchange Commission (“SEC”) issued Release No. 33-11275 and No. 34-99678 “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (“Climate Disclosure Rules”). Among its provisions, the Climate Disclosure Rules will require certain disclosures related to severe weather events and other natural conditions, and other disclosures about climate-related risks that materially impacted or are reasonably likely to materially impact the business strategy, results of operations or financial condition of the registrant. The Climate Disclosure Rules were to become effective for large-accelerated SEC filers in annual reports for years beginning on or after January 1, 2025. However, on April 4, 2024, the SEC stayed implementation of the Climate Disclosure Rules, which remains in place pending the completion of an ongoing judicial review.

K-78

Notes to Consolidated Financial Statements

(1)

Significant accounting policies and practices

(y)

Reclassifications of certain balances in 2023

A summary of reclassifications to the amounts previously reported in our Consolidated Balance Sheet and Statement of Earnings as of and for the year ended December 31, 2023 associated with Pilot’s balance sheet, revenue and expense accounts are summarized below. We also reclassified the December 31, 2023 amounts in the applicable Notes to the Consolidated Financial Statements. The reclassifications to the Consolidated Statement of Cash Flows for the year ended December 31, 2023 were immaterial. These reclassifications conform presentations of balances in 2023 for comparability to current year presentations. Amounts are in millions.

	December 31, 2023
	As previously reported				Reclassification				As reclassified
Assets:
Insurance and Other:
Cash and cash equivalents	$	33,672			$	596			$	34,268
Other receivables		44,174				2,087				46,261
Inventories		24,159				1,697				25,856
Property, plant and equipment		22,030				8,169				30,199
Goodwill		50,868				6,605				57,473
Other intangible assets		29,327				6,557				35,884
Other		19,568				2,298				21,866
Railroad, Utilities and Energy:
Cash and cash equivalents		4,350				(596	)			3,754
Receivables		7,086				(2,087	)			4,999
Property, plant and equipment		177,616				(8,169	)			169,447
Goodwill		33,758				(6,605	)			27,153
Other		30,397				(10,552	)			19,845
Liabilities:
Insurance and Other:
Accounts payable, accruals and other liabilities		32,402				4,157				36,559
Notes payable and other borrowings		42,692				5,776				48,468
Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities		22,461				(4,157	)			18,304
Notes payable and other borrowings		85,579				(5,776	)			79,803
	Year ended December 31, 2023
	As previously reported				Reclassification				As reclassified
Revenues:
Insurance and Other:
Sales and service revenues	$	155,687			$	51,461			$	207,148
Interest, dividend and other investment income		15,561				203				15,764
Railroad, Utilities and Energy:
Utility and energy operating revenues		72,693				(51,461	)			21,232
Service revenues and other income		4,931				(203	)			4,728
Costs and expenses:
Insurance and Other:
Cost of sales and services		122,569				46,712				169,281
Selling, general and administrative expenses		22,605				2,853				25,458
Interest expense		1,258				413				1,671
Railroad, Utilities and Energy:
Utilities and energy cost of sales and other expenses		67,964				(49,565	)			18,399
Interest expense		3,745				(413	)			3,332

K-79

Notes to Consolidated Financial Statements

(2)

Significant business acquisitions and other transactions

Our long-held acquisition strategy is to acquire businesses that have consistent earning power, good returns on equity and able and honest management. Financial results attributable to business acquisitions are included in our Consolidated Financial Statements beginning on their respective acquisition dates.

On January 31, 2023, we acquired an additional 41.4% interest in Pilot Travel Centers, LLC (“Pilot”) for approximately $8.2 billion. The acquisition increased our interest to 80%, representing a controlling interest in Pilot for financial reporting purposes as of that date. Accordingly, we began consolidating Pilot’s financial statements in our Consolidated Financial Statements on February 1, 2023. Prior to that date, we accounted for our 38.6% interest in Pilot under the equity method.

Pilot operates travel centers and fuel-only retail locations across the U.S. and in five Canadian provinces, primarily under the names Pilot or Flying J, as well as large wholesale fuel and fuel marketing businesses in the U.S. Pilot also sells diesel fuel at other locations in the U.S. and Canada through various arrangements with third party travel centers and operates a water disposal business in the oil fields sector.

In applying the acquisition method of accounting, we remeasured our previously held 38.6% investment in Pilot to fair value as of the acquisition date. We recognized a one-time, non-cash remeasurement gain of approximately $3.0 billion in the first quarter of 2023, representing the excess of the fair value of that interest over the carrying value under the equity method.

In January 2024, we acquired the remaining noncontrolling interests in Pilot for $2.6 billion, increasing our ownership of Pilot to 100%. The acquisition of a noncontrolling interest represents an equity transaction and we recorded an increase of $517 million to capital in excess of par value for the excess of the carrying value of the noncontrolling interest acquired over the consideration paid, net of deferred income tax liabilities arising from the transaction.

A summary of the values of Pilot’s assets acquired, liabilities assumed and noncontrolling interests as of January 31, 2023 follows (in millions).

Assets acquired					Liabilities assumed and noncontrolling interests
Property, plant and equipment	$	8,015			Notes payable	$	5,876
Goodwill*		6,605			Other liabilities		4,918
Other intangible assets		6,853			Liabilities assumed		10,794
Other assets		7,047			Noncontrolling interests, predominantly redeemable		3,361
					Liabilities assumed and noncontrolling interests	$	14,155
Assets acquired	$	28,520			Net assets	$	14,365

——————

** Goodwill from this acquisition is expected to be deductible for income tax purposes.*

On October 19, 2022, Berkshire acquired all of the outstanding common stock of Alleghany Corporation (“Alleghany”) for $11.5 billion, which operates property and casualty insurance and reinsurance businesses. Acquired assets were $35.6 billion, including cash and investments of $19.7 billion and goodwill of $3.9 billion, which is not expected to be deductible for income tax purposes. Liabilities were $24.1 billion, including unpaid losses and loss adjustment expenses of $15.1 billion.

Certain unaudited pro forma revenue and consolidated earnings (loss) data for the year ended December 31, 2022 as if the Alleghany and Pilot acquisitions were completed on the same terms at the beginning of 2022 follows (in millions, except per share amounts).

	2022
Revenues	$	383,115
Net earnings (loss) attributable to Berkshire shareholders		(23,947	)
Net earnings (loss) per equivalent Class A common share		(16,303	)

On September 30, 2024, Berkshire Hathaway Energy Company (“BHE”) repurchased 5.85% of its outstanding common stock held by certain noncontrolling BHE shareholders for $2.9 billion. We recorded the difference between the value of the consideration paid for the noncontrolling interests acquired and the carrying value in capital in excess of par value.

Additionally, in September and October 2024, Berkshire acquired the remaining 2.12% of BHE’s outstanding common stock held by noncontrolling shareholders in exchange for 2,291,631 shares of Berkshire Class B common stock valued at $1.045 billion. After these transactions, BHE became a wholly-owned subsidiary of Berkshire.

K-80

Notes to Consolidated Financial Statements

(2)

Significant business acquisitions and other transactions

On September 1, 2023, a BHE subsidiary acquired an additional 50% limited partner interest in Cove Point LNG, LP (“Cove Point”) for $3.3 billion, which increased our economic interest from 25% to 75%. Prior to the transaction, we also held 100% of the general partner interest and we consolidated Cove Point for financial reporting purposes. Accordingly, the interest acquired was an acquisition of a noncontrolling interest. We recorded a charge of $667 million in 2023 to our capital in excess of par for the excess of the consideration paid over the carrying value of the noncontrolling interest acquired and deferred income tax assets arising from the transaction.

(3)

Investments in fixed maturity securities

Investments in fixed maturity securities are summarized by type below (in millions).

	Amortized Cost				Unrealized Gains				Unrealized Losses				Fair Value
December 31, 2024
U.S. Treasury, U.S. government corporations and agencies	$	4,447			$	16			$	(4	)		$	4,459
Foreign governments		9,443				16				(97	)			9,362
Corporate and other		1,324				225				(6	)			1,543
	$	15,214			$	257			$	(107	)		$	15,364
December 31, 2023
U.S. Treasury, U.S. government corporations and agencies	$	10,308			$	14			$	(53	)		$	10,269
Foreign governments		11,788				58				(41	)			11,805
Corporate and other		1,429				262				(7	)			1,684
	$	23,525			$	334			$	(101	)		$	23,758

As of December 31, 2024, approximately 94% of our foreign government holdings were rated AA or higher by at least one of the major rating agencies. The amortized cost and estimated fair value of fixed maturity securities at December 31, 2024 are summarized below by contractual maturity dates (in millions). Actual maturities may differ from contractual maturities due to prepayment rights held by issuers.

	Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years				Mortgage-backed securities				Total
Amortized cost	$	10,228			$	4,202			$	532			$	123			$	129			$	15,214
Fair value		10,107				4,267				718				133				139				15,364

(4)

Investments in equity securities

Investments in equity securities are summarized as follows (in millions).

		Cost Basis				Net Unrealized Gains				Fair Value
December 31, 2024
Banks, insurance and finance		$	15,707			$	75,936			$	91,643
Consumer products			12,658				92,091				104,749
Commercial, industrial and other			47,141				28,055				75,196
		$	75,506			$	196,082			$	271,588
December 31, 2023
Banks, insurance and finance		$	27,136			$	51,176			$	78,312
Consumer products			34,248				166,895				201,143
Commercial, industrial and other			48,032				26,355				74,387
		$	109,416			$	244,426			$	353,842

K-81

Notes to Consolidated Financial Statements

(4)

Investments in equity securities

Our investments in equity securities over the years have been concentrated in relatively few companies. The fair value of our five largest holdings at December 31, 2024 and 2023 represented 71% and 79%, respectively, of the aggregate fair value of our equity securities shown in the preceding tables. The five largest holdings at each date were American Express Company, Apple Inc., Bank of America Corporation, The Coca-Cola Company and Chevron Corporation.

Since 2019, we have also owned non-voting Cumulative Perpetual Preferred Stock of Occidental Petroleum Corporation (“Occidental”) and Occidental common stock warrants. Our investments in the Occidental preferred stock and Occidental common stock warrants are recorded at fair value and included as equity securities in our Consolidated Balance Sheets, as such investments are not in-substance common stock under GAAP and are not eligible for the equity method. We account for our investment in Occidental common stock under the equity method. See Note 5.

The Occidental preferred stock accrues dividends at 8% per annum and is redeemable at the option of Occidental commencing in 2029 at a redemption price equal to 105% of the liquidation value. As of December 31, 2024, our investment in Occidental preferred stock had an aggregate liquidation value of approximately $8.5 billion. During 2023, Occidental issued mandatory redemption notifications for approximately $1.5 billion of the aggregate liquidation value due to excess distributions by Occidental to its common stockholders, as defined under the terms of the Occidental preferred stock certificate of designations.

The Occidental common stock warrants allow us to purchase up to 83.86 million shares of Occidental common stock at an exercise price of $59.62 per share. The warrants are exercisable in whole or in part until one year after the date the preferred stock is fully redeemed.

As of December 31, 2024, we owned 151.6 million shares of American Express Company (“American Express”) common stock representing 21.6% of the outstanding common stock of American Express. Since 1995, we have been party to an agreement with American Express whereby we agreed to vote a significant portion of our shares in accordance with the recommendations of the American Express Board of Directors. We have also agreed to passivity commitments as requested by the Board of Governors of the Federal Reserve System, which collectively, in our judgment, restrict our ability to exercise significant influence over the operating and financial policies of American Express. Accordingly, we do not use the equity method with respect to our investment in American Express common stock and we continue to record our investment at fair value.

(5)

Equity method investments

Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method. The most significant of these are our investments in the common stock of The Kraft Heinz Company (“Kraft Heinz”) and Occidental. We began acquiring common stock of Occidental in 2022 and our aggregate voting interest in Occidental common stock exceeded 20% on August 4, 2022. We adopted the equity method as of that date. As of December 31, 2024, we owned 27.2% of the Kraft Heinz outstanding common stock and 28.2% of the outstanding Occidental common stock which excludes the potential effect of the exercise of Occidental’s outstanding common stock warrants.

Kraft Heinz manufactures and markets food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Occidental is an international energy company, whose activities include oil and natural gas exploration, development and production, and chemicals manufacturing businesses.

We also own a 50% interest in Berkadia Commercial Mortgage LLC (“Berkadia”), which is included in other in the following table. Jefferies Financial Group Inc. (“Jefferies”) owns the other 50% interest. Berkadia engages in mortgage banking, investment sales and servicing commercial/multi-family real estate loans. Berkadia’s commercial paper borrowing capacity (limited to $1.5 billion) is supported by a surety policy issued by a Berkshire insurance subsidiary. Jefferies is obligated to indemnify us for one-half of any losses incurred under the policy.

The fair values and carrying values of these investments are included in the following table (in millions).

	Carrying Value								Fair Value
	December 31,								December 31,
	2024				2023				2024				2023
Kraft Heinz	$	13,395			$	13,230			$	9,994			$	12,035
Occidental		17,287				15,410				13,053				14,552
Other		452				426
	$	31,134			$	29,066

K-82

Notes to Consolidated Financial Statements

(5)

Equity method investments

Kraft Heinz and Occidental common stocks are publicly traded. As of December 31, 2024, the excess of our carrying value over the fair value of each of these investments based on their respective market prices was approximately 25% of the carrying value. We evaluated these investments for other-than-temporary impairment as of December 31, 2024. For each investment, we considered our ability and intent to hold the investment until the fair value exceeds carrying value, the magnitude and duration of the decline in fair value, the operating results of the company, as well as other factors. Based on the prevailing facts and circumstances, we concluded the recognition of an impairment charge in earnings was not required.

As of December 31, 2024, the carrying values of our investments in Kraft Heinz and Berkadia approximated our share of shareowners’ equity of each of these entities. The carrying value of our investment in Occidental common stock exceeded our share of its shareholders’ equity as of September 30, 2024 by approximately $9.9 billion. Based upon the limited information available to us, we concluded the excess represents goodwill.

As described in Note 2, we ceased accounting for Pilot under the equity method as of February 1, 2023. Equity method earnings attributable to Pilot were $105 million for the month ending January 31, 2023 and are reported in other in the following table. Occidental’s financial information is not available in time for concurrent reporting in our Consolidated Financial Statements. Therefore, we report the equity method effects for Occidental on a one-quarter lag. Our earnings and distributions received from equity method investments are summarized in the following table (in millions).

	Equity in Earnings												Distributions Received
	Year ended December 31,												Year ended December 31,
	2024				2023				2022				2024				2023				2022
Kraft Heinz	$	745			$	758			$	628			$	521			$	521			$	521
Occidental		1,005				1,077				323				207				142				24
Other		91				138				912				65				58				284
	$	1,841			$	1,973			$	1,863			$	793			$	721			$	829

Summarized consolidated financial information of Kraft Heinz follows (in millions).

	December 28, 2024				December 30, 2023
Assets	$	88,287			$	90,339
Liabilities		38,962				40,617

	Year ended
	December 28, 2024				December 30, 2023				December 31, 2022
Sales	$	25,846			$	26,640			$	26,485
Net earnings attributable to common shareholders		2,744				2,855				2,363

Summarized consolidated financial information of Occidental follows (in millions).

	September 30, 2024				September 30, 2023
Assets	$	85,803			$	71,287
Liabilities		50,869				42,515

	Twelve months ending September 30,
	2024				2023
Total revenues and other income	$	27,572			$	29,715
Net earnings attributable to common shareholders		3,703				4,471

K-83

Notes to Consolidated Financial Statements

(6)

Investment gains (losses)

Investment gains (losses) for each of the three years ending December 31, 2024 are summarized as follows (in millions).

		2024				2023				2022
Investment gains (losses):
Equity securities:
Change in unrealized investment gains (losses) during the year on securities held at the end of the year		$	49,297			$	69,144			$	(63,120	)
Investment gains (losses) during the year on securities sold			3,523				2,698				(3,927	)
			52,820				71,842				(67,047	)
Fixed maturity securities:
Gross realized gains			28				139				134
Gross realized losses			(71	)			(86	)			(684	)
Other			22				2,960				(302	)
		$	52,799			$	74,855			$	(67,899	)

Equity securities gains and losses include unrealized gains and losses from changes in fair values during the year on equity securities we still own, as well as gains and losses on securities we sold during the year. As shown in the Consolidated Statements of Cash Flows, our proceeds from sales of equity securities were approximately $143.4 billion in 2024, $40.6 billion in 2023 and $33.7 billion in 2022. In the preceding table, investment gains and losses on equity securities sold during the year represent the difference between the sales proceeds and the fair value of the equity securities sold at the beginning of the applicable year or, if later, the purchase date. Our taxable gains and losses on equity securities sold are generally the difference between the proceeds from sales and cost at the acquisition date. Equity securities sold produced taxable gains of $101.1 billion in 2024, $5.0 billion in 2023 and $769.0 million in 2022. Other investment gains included approximately $3.0 billion in 2023 from the remeasurement of our pre-existing 38.6% interest in Pilot through the application of acquisition accounting under GAAP.

(7)

Loans and finance receivables

Loans and finance receivables are summarized as follows (in millions).

	December 31,
	2024				2023
Loans and finance receivables, before allowances and discounts	$	29,700			$	26,289
Allowances for credit losses		(1,134	)			(950	)
Unamortized acquisition discounts and points		(768	)			(658	)
	$	27,798			$	24,681

Loans and finance receivables are principally manufactured home loans, and to a lesser extent, commercial loans and site-built home loans. Reconciliations of the allowance for credit losses on loans and finance receivables for each of the three years ending December 31, 2024 follow (in millions).

	2024				2023				2022
Balance at the beginning of the year	$	950			$	856			$	765
Provision for credit losses		298				169				124
Charge-offs, net of recoveries		(114	)			(75	)			(33	)
Balance at December 31	$	1,134			$	950			$	856

K-84

Notes to Consolidated Financial Statements

(7)

Loans and finance receivables

At December 31, 2024, substantially all manufactured and site-built home loan balances were evaluated collectively for impairment, and we considered approximately 96% of these loans to be current as to payment status. A summary of performing and non-performing home loans, before discounts and credit loss allowances, by year of loan origination as of December 31, 2024 follows (in millions).

	Origination Year
	2024				2023				2022				2021				2020				Prior				Total
Performing	$	6,578			$	4,969			$	3,651			$	3,052			$	2,358			$	8,172			$	28,780
Non-performing		13				22				16				11				10				45				117
	$	6,591			$	4,991			$	3,667			$	3,063			$	2,368			$	8,217			$	28,897

(8)

Other receivables

Other receivables are comprised of the following (in millions).

	December 31,
	2024				2023
Insurance and other:
Insurance premiums receivable	$	18,548			$	19,052
Reinsurance recoverables		5,177				7,060
Trade receivables		15,638				16,450
Other		5,199				4,383
Allowances for credit losses		(675	)			(684	)
	$	43,887			$	46,261
Railroad, utilities and energy:
Trade receivables	$	3,764			$	4,034
Other		862				1,114
Allowances for credit losses		(123	)			(149	)
	$	4,503			$	4,999

Aggregate provisions for credit losses with respect to receivables in the preceding table were $469 million in 2024, $513 million in 2023 and $409 million in 2022. Charge-offs, net of recoveries, were $498 million in 2024, $474 million in 2023 and $432 million in 2022.

(9)

Inventories

Inventories of our insurance and other businesses are comprised of the following (in millions).

		December 31,
		2024				2023
Raw materials		$	5,421			$	6,026
Work in process and other			3,150				3,345
Finished manufactured goods			4,898				4,969
Goods acquired for resale			10,539				11,516
		$	24,008			$	25,856

Inventories, materials and supplies of our railroad, utilities and energy businesses are included in other assets and were approximately $3.0 billion at December 31, 2024 and $2.5 billion at December 31, 2023.

K-85

Notes to Consolidated Financial Statements

(10)

Property, plant and equipment

A summary of property, plant and equipment of our insurance and other businesses follows (in millions).

		December 31,
		2024				2023
Land, buildings and improvements		$	20,735			$	19,598
Machinery and equipment			32,475				31,865
Furniture, fixtures and other			5,501				5,850
			58,711				57,313
Accumulated depreciation			(28,640	)			(27,114	)
		$	30,071			$	30,199

A summary of property, plant and equipment of our railroad and utilities and energy businesses follows (in millions). The utility generation, transmission and distribution systems and interstate natural gas pipeline assets are owned by regulated public utility and natural gas pipeline subsidiaries.

		December 31,
		2024				2023
Railroad:
Land, track structure and other roadway		$	74,093			$	71,692
Locomotives, freight cars and other equipment			15,766				16,256
Construction in progress			1,813				1,715
			91,672				89,663
Accumulated depreciation			(20,411	)			(19,464	)
			71,261				70,199
Utilities and energy:
Utility generation, transmission and distribution systems		$	103,015			$	96,195
Interstate natural gas pipeline assets			20,237				19,226
Independent power plants and other			14,840				14,781
Construction in progress			8,793				9,267
			146,885				139,469
Accumulated depreciation			(43,116	)			(40,221	)
			103,769				99,248
		$	175,030			$	169,447

Depreciation expense for each of the three years ending December 31, 2024 is summarized below (in millions).

		2024				2023				2022
Insurance and other		$	3,117			$	2,898			$	2,276
Railroad, utilities and energy			6,514				6,494				6,181
		$	9,631			$	9,392			$	8,457

K-86

Notes to Consolidated Financial Statements

(11)

Equipment held for lease

Equipment held for lease includes railcars, aircraft, and other equipment, including over-the-road trailers, intermodal tank containers, cranes, storage units and furniture. Equipment held for lease is summarized below (in millions).

		December 31,
		2024				2023
Railcars		$	10,137			$	10,031
Aircraft			14,201				12,537
Other			5,686				5,576
			30,024				28,144
Accumulated depreciation			(12,196	)			(11,197	)
		$	17,828			$	16,947

Depreciation expense for equipment held for lease was $1,429 million in 2024, $1,266 million in 2023 and $1,209 million in 2022. Operating lease revenues for each of the three years ending December 31, 2024 are summarized below (in millions).

		2024				2023				2022
Fixed lease revenue		$	6,456			$	5,902			$	5,184
Variable lease revenue			2,771				2,514				2,330
		$	9,227			$	8,416			$	7,514

A summary of future operating lease receipts as of December 31, 2024 follows (in millions).

2025				2026				2027				2028				2029				Thereafter				Total
$	4,263			$	3,455			$	2,596			$	1,724			$	769			$	339			$	13,146

(12)

Leases

We are party to contracts where we lease property from others under contracts classified as operating leases. We primarily lease buildings, offices, facilities and equipment. Operating lease right-of-use assets are included in other assets and operating lease liabilities are included in accounts payable, accruals and other liabilities. Information related to our operating leases follows (dollars in millions).

		Right-of-use assets				Lease liabilities				Weighted average remaining term in years				Weighted average discount rate used to measure liabilities
December 31, 2024		$	5,843			$	5,996				7.5				4.5	%
December 31, 2023			5,277				5,299				7.0				4.2	%

A summary of our remaining future operating lease payments reconciled to lease liabilities as of December 31, 2024 and December 31, 2023 follows (in millions).

		Year 1				Year 2				Year 3				Year 4				Year 5				Thereafter				Total lease payments				Amount representing interest				Lease liabilities
December 31:
2024		$	1,491			$	1,161			$	982			$	766			$	600			$	2,197			$	7,197			$	(1,201	)		$	5,996
2023			1,422				1,172				815				666				463				1,680				6,218				(919	)			5,299

Components of operating lease expense for each of the three years ending December 31, 2024 are summarized as follows (in millions).

		2024				2023				2022
Operating lease expense		$	1,652			$	1,535			$	1,361
Short-term lease expense			171				219				233
Variable lease expense			225				216				217
		$	2,048			$	1,970			$	1,811

K-87

Notes to Consolidated Financial Statements

(13)

Goodwill and other intangible assets

Reconciliations of the changes in the carrying value of goodwill during 2024 and 2023 follow (in millions).

		December 31,
		2024				2023
Balance at the beginning of the year*		$	84,626			$	78,119
Business acquisitions			87				7,347
Other, including acquisition period remeasurements and foreign currency translation			(833	)			(840	)
Balance at the end of the year*		$	83,880			$	84,626

*** *Net of accumulated goodwill impairments of $*11.5 *billion as of December 31, 2024, $*11.1 *billion as of December 31, 2023 and $*11.0 billion as of December 31, 2022.

Other intangible assets are summarized below (in millions).

		December 31, 2024												December 31, 2023
		Gross carrying amount				Accumulated amortization				Net carrying value				Gross carrying amount				Accumulated amortization				Net carrying value
Insurance and other:
Customer relationships		$	30,941			$	8,840			$	22,101			$	30,832			$	8,048			$	22,784
Trademarks and trade names			9,007				1,041				7,966				8,997				899				8,098
Patents and technology			5,375				4,359				1,016				5,238				4,109				1,129
Other			5,551				1,996				3,555				5,764				1,891				3,873
		$	50,874			$	16,236			$	34,638			$	50,831			$	14,947			$	35,884
Railroad, utilities and energy:
Customer relationships and contracts		$	1,553			$	728			$	825			$	1,565			$	644			$	921
Other			437				126				311				450				115				335
		$	1,990			$	854			$	1,136			$	2,015			$	759			$	1,256

Intangible assets of the railroad, utilities and energy businesses are included in other assets in our Consolidated Balance Sheets.

Intangible assets with indefinite lives were $18.9 billion as of December 31, 2024 and December 31, 2023 and primarily related to certain customer relationships and trademarks and trade names. Intangible asset amortization expense was $1.8 billion in 2024 and 2023 and $1.2 billion in 2022. Estimated amortization expense over the next five years follows (in billions): 2025 – $1.7; 2026 – $1.6; 2027 – $1.4; 2028 – $1.4 and 2029 – $1.3.

(14)

Supplemental cash flow information

A summary of supplemental cash flow information follows (in millions).

		2024				2023				2022
Cash paid during the year for:
Income taxes		$	28,544			$	7,765			$	4,236
Interest:
Insurance and other			1,362				1,670				1,150
Railroad, utilities and energy			3,577				3,327				3,195
Non-cash investing and financing activities:
Liabilities assumed in connection with business acquisitions			22				10,938				24,186
Operating lease liabilities arising from obtaining right-of-use assets			2,007				1,645				1,118
Class B common stock issued in exchange for noncontrolling interests			1,045				—				—

K-88

Notes to Consolidated Financial Statements

(15)

Dividend restrictions – Insurance subsidiaries

Payments of dividends by our insurance subsidiaries are restricted by insurance statutes and regulations. Without prior regulatory approval, our principal insurance subsidiaries may declare up to approximately $31 billion as ordinary dividends during 2025. Investments in fixed maturity and equity securities and short-term investments on deposit with U.S. state insurance authorities in accordance with state insurance regulations were approximately $5.6 billion at December 31, 2024 and $5.2 billion at December 31, 2023.

Combined shareholders’ equity of U.S.-based insurance subsidiaries determined pursuant to statutory accounting rules (Surplus as Regards Policyholders) was approximately $310 billion at December 31, 2024 and $303 billion at December 31, 2023. Statutory surplus differs from the corresponding amount based on GAAP due to differences in accounting for certain assets and liabilities. For instance, the recognition of deferred charges on retroactive reinsurance, life, annuity and health insurance benefits liabilities, deferred policy acquisition costs, unrealized gains on certain investments and deferred income taxes under GAAP differs from recognition under U.S. statutory reporting. In addition, the carrying values of certain assets, such as goodwill and non-insurance entities owned by our insurance subsidiaries, are not fully recognized for statutory reporting purposes.

(16)

Unpaid losses and loss adjustment expenses

Reconciliations of the changes in unpaid losses and loss adjustment expenses (“claim liabilities”), excluding liabilities under retroactive reinsurance contracts (see Note 17), for each of the three years ended December 31, 2024 follow (in millions). Net liabilities of acquired businesses in 2022 related to the acquisition of Alleghany’s insurance companies in October 2022.

	2024				2023				2022
Balance at the beginning of the year:
Gross liabilities	$	111,082			$	107,472			$	86,664
Reinsurance recoverable on unpaid losses		(4,893	)			(5,025	)			(2,960	)
Net liabilities		106,189				102,447				83,704
Losses and loss adjustment expenses incurred:
Current accident year		57,563				59,244				59,463
Prior accident years		(2,322	)			(3,541	)			(2,672	)
Total		55,241				55,703				56,791
Losses and loss adjustment expenses paid:
Current accident year		(24,139	)			(25,184	)			(27,236	)
Prior accident years		(26,436	)			(27,065	)			(23,083	)
Total		(50,575	)			(52,249	)			(50,319	)
Foreign currency effect		(297	)			288				(508	)
Net liabilities of acquired businesses		—				—				12,779
Balance at December 31:
Net liabilities		110,558				106,189				102,447
Reinsurance recoverable on unpaid losses		4,593				4,893				5,025
Gross liabilities	$	115,151			$	111,082			$	107,472

Our claim liabilities under property and casualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim events that have occurred as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. Losses and loss adjustment expenses incurred shown in the preceding table related to events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident years”). Losses and loss adjustment expenses incurred and paid are net of reinsurance recoveries. Current accident year incurred losses included losses from significant catastrophe events (losses exceeding $150 million per event) of approximately $1.5 billion in 2024, $925 million in 2023 and $3.1 billion in 2022. Current accident year incurred losses for private passenger auto insurance declined in 2024 compared to 2023, reflecting lower claims frequencies and higher average claims severities. Current accident year incurred losses in 2023 also reflected a decline in private passenger auto insurance losses and the impact of the Alleghany acquisition compared to 2022.

K-89

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

We recorded net reductions of estimated ultimate liabilities for prior accident years of $2.3 billion in 2024, $3.5 billion in 2023 and $2.7 billion in 2022, which produced corresponding reductions in losses and loss adjustment expenses incurred in those periods. These reductions, as percentages of the net liabilities at the beginning of each year, were 2.2% in 2024, 3.5% in 2023 and 3.2% in 2022.

Estimated ultimate liabilities for prior accident years of our primary insurance businesses declined $602 million in 2024, $2.1 billion in 2023 and $1.1 billion in 2022. The decline in estimated liabilities in 2024 reflected lower-than-expected private passenger auto, medical professional liability and property losses, partially offset by increased casualty losses. The estimated liability reductions in 2023 and 2022 were primarily from private passenger auto, medical professional liability and property coverages. Estimated ultimate liabilities for prior accident years of our reinsurance businesses were reduced $1.7 billion in 2024, $1.4 billion in 2023 and $1.6 billion in 2022. The reductions in 2024 and 2023 were primarily attributable to lower-than-expected property losses, while the reductions in 2022 were attributable to both property and casualty losses.

Estimated net claim liabilities for environmental and asbestos exposures, excluding liabilities under retroactive reinsurance contracts, were approximately $1.9 billion at December 31, 2024 and $2.0 billion at December 31, 2023. These liabilities are subject to change due to changes in the legal and regulatory environment, among other factors. We are unable to reliably estimate additional losses or a range of losses that are reasonably possible to arise from these factors.

Disaggregated information concerning our claim liabilities is provided below and in the pages that follow for GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). In this discussion, “claim-tail” refers to the period between the claim occurrence date and claim settlement or payment date. A reconciliation of the disaggregated net unpaid losses and allocated loss adjustment expenses (the latter referred to as “ALAE”) to our consolidated claim liabilities as of December 31, 2024 follows (in millions).

	GEICO								BH Primary								BHRG
	Physical Damage				Auto Liability				Medical Professional Liability				Workers’ Compensation/ Other Casualty				Property				Casualty				Total
Unpaid losses and ALAE, net	$	885			$	20,818			$	9,432			$	24,335			$	15,851			$	33,350			$	104,671
Reinsurance recoverable		3				884				29				1,473				634				1,369				4,392
Unallocated loss adjustment expenses																										2,414
Other losses and loss adjustment expenses																										3,674
Unpaid losses and loss adjustment expenses																									$	115,151

GEICO

GEICO’s claim liabilities predominantly relate to various types of private passenger auto liability and physical damage claims. For such claims, we establish and evaluate unpaid claim liabilities using standard actuarial loss development methods and techniques. The actuarial methods utilize historical claims data, adjusted when deemed appropriate to reflect perceived changes in loss patterns. Claim liabilities include average, case, case development and IBNR estimates.

Average liabilities are based on expected severities for newly reported physical damage and liability claims prior to establishing individual case reserves when insufficient time or information is available for specific claim estimates and for large volumes of minor physical damage claims that are quickly settled. Case loss estimates for liability claims, including estimates for loss adjustment expenses, are based on the facts and merits of the claim.

Claim estimates for liability coverages normally reflect greater uncertainty than for physical damage coverages, primarily due to the longer claim-tails, the greater chance of litigation and the time needed to evaluate facts at the time the case estimate is first established. Consequently, additional case development liabilities are established, which are usually percentages of the case liabilities. For unreported claims, IBNR claim liabilities are estimated by projecting the ultimate number of claims expected (reported and unreported) for each significant coverage based on historical data, from which reported claims are deducted to produce the estimated number of unreported claims. The product of the average cost per unreported claim and the number of unreported claims produces the IBNR liability estimate. We may record supplemental IBNR liabilities in certain situations when actuarial techniques are difficult to apply.

K-90

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

GEICO’s net auto physical damage and liability losses and ALAE incurred and paid are summarized by accident year below. IBNR and case development liabilities are as of December 31, 2024 and are net of estimated salvage and subrogation recoveries. Claim counts are established when accidents that could result in a liability are reported and are based on policy coverage. Each claim event may generate claims under multiple coverages and may result in multiple counts. The “Cumulative Number of Reported Claims” includes the combined number of reported claims for all auto policy coverages. Dollars are in millions.

Physical Damage

		Losses and ALAE Incurred through December 31,														Cumulative Number of
Accident Year				2023*				2024				IBNR and Case Development Liabilities				Reported Claims (in thousands)
2023				$	12,273			$	11,900			$	111				7,430
2024									11,095				(454	)			6,380
		Losses and ALAE incurred						$	22,995
		Cumulative Losses and ALAE Paid through December 31,
Accident Year				2023*				2024
2023				$	11,567			$	11,771
2024									10,495
		Losses and ALAE paid							22,266
		Net unpaid losses and ALAE for 2023 – 2024 accident years							729
		Net unpaid losses and ALAE for accident years before 2023							156
		Net unpaid losses and ALAE						$	885

Auto Liability

		Losses and ALAE Incurred through December 31,																								Cumulative Number of
Accident Year		2020*				2021*				2022*				2023*				2024				IBNR and Case Development Liabilities				Reported Claims (in thousands)
2020		$	14,637			$	14,024			$	13,697			$	13,593			$	13,462			$	382				2,127
2021							17,481				17,457				17,229				17,033				907				2,457
2022											19,645				18,903				18,818				2,065				2,387
2023															17,948				18,073				3,864				1,956
2024																			17,081				4,730				1,694
		Losses and ALAE incurred																$	84,467
		Cumulative Losses and ALAE Paid through December 31,
Accident Year		2020*				2021*				2022*				2023*				2024
2020		$	5,395			$	9,839			$	11,794			$	12,608			$	12,946
2021							6,450				12,681				14,863				15,796
2022											7,614				13,838				16,031
2023															7,191				12,682
2024																			7,084
		Losses and ALAE paid																	64,539
		Net unpaid losses and ALAE for 2020 – 2024 accident years																	19,928
		Net unpaid losses and ALAE for accident years before 2020																	890
		Net unpaid losses and ALAE																$	20,818

*** Unaudited required supplemental information

K-91

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

BH Primary

BH Primary’s liabilities for unpaid losses and loss adjustment expenses primarily derive from medical professional liability and workers’ compensation and other casualty insurance, which includes commercial auto and general liability insurance. Net losses and ALAE incurred and paid are summarized by accident year in the following tables, disaggregated by medical professional liability and workers’ compensation and other casualty coverages. IBNR and case development liabilities are as of December 31, 2024. The cumulative number of reported claims reflects the number of individual claimants and includes claims that ultimately resulted in no liability or payment. Dollars are in millions.

Medical Professional Liability

Estimates of the ultimate expected losses and loss adjustment expenses incurred for medical professional claim liabilities are based on a variety of commonly accepted actuarial methodologies, such as the paid and incurred development method and Bornhuetter-Ferguson based methods, as well as other techniques that consider insured loss exposures and historical and expected loss trends, among other factors. These methodologies produce loss estimates from which we determine our best estimate. In addition, we study developments in older accident years and adjust initial loss estimates to reflect recent developments based upon claim age, coverage and litigation experience.

		Losses and ALAE Incurred through December 31,																																												Cumulative Number of
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024				IBNR and Case Development Liabilities				Reported Claims (in thousands)
2015		$	1,374			$	1,342			$	1,269			$	1,290			$	1,218			$	1,157			$	1,093			$	1,033			$	1,016			$	1,010			$	37				12
2016							1,392				1,416				1,414				1,394				1,341				1,288				1,216				1,188				1,172				78				15
2017											1,466				1,499				1,495				1,474				1,382				1,349				1,315				1,310				89				21
2018															1,602				1,650				1,659				1,580				1,616				1,606				1,583				140				24
2019																			1,670				1,691				1,663				1,614				1,534				1,579				180				22
2020																							1,704				1,751				1,698				1,631				1,606				369				33
2021																											1,852				1,855				1,787				1,714				718				27
2022																															1,927				1,912				1,846				981				25
2023																																			1,964				1,918				1,428				27
2024																																							2,004				1,793				22
		Losses and ALAE incurred																																				$	15,742
		Cumulative Losses and ALAE Paid through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024
2015		$	23			$	108			$	218			$	382			$	543			$	663			$	719			$	799			$	843			$	879
2016							22				115				274				461				620				712				822				908				957
2017											27				128				300				457				582				739				877				977
2018															35				166				367				543				728				949				1,080
2019																			39				160				314				536				757				963
2020																							34				148				321				531				767
2021																											36				136				333				548
2022																															38				182				441
2023																																			28				156
2024																																							34
		Losses and ALAE paid																																					6,802
		Net unpaid losses and ALAE for 2015 – 2024 accident years																																					8,940
		Net unpaid losses and ALAE for accident years before 2015																																					492
		Net unpaid losses and ALAE																																				$	9,432

** Unaudited required supplemental information*

K-92

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

Workers’ Compensation and Other Casualty

We evaluate ultimate loss and loss adjustment expense estimates for workers’ compensation and other casualty claims using a combination of commonly accepted actuarial methodologies such as the Bornhuetter-Ferguson and chain-ladder approaches using paid and incurred loss data. Paid and incurred loss data is segregated and analyzed by state due to the different state regulatory frameworks that may impact the duration and amount of loss payments. We also separately study the various components of liabilities, such as employee lost wages, medical expenses and the costs of claims investigations and administration. We establish case liabilities for reported claims based upon the facts and circumstances of the claim. The excess of the ultimate projected losses, including the case development estimates over the case-basis liabilities, is included in IBNR liabilities.

		Losses and ALAE Incurred through December 31,																																												Cumulative Number of
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024				IBNR and Case Development Liabilities				Reported Claims (in thousands)
2015		$	2,580			$	2,539			$	2,455			$	2,426			$	2,428			$	2,402			$	2,408			$	2,393			$	2,358			$	2,367			$	178				120
2016							2,931				2,848				2,793				2,772				2,815				2,825				2,864				2,840				2,809				277				125
2017											3,473				3,337				3,299				3,310				3,322				3,320				3,321				3,357				395				143
2018															3,998				3,886				3,967				4,030				4,091				4,177				4,230				570				164
2019																			4,584				4,623				4,692				4,763				4,847				4,919				691				185
2020																							5,030				4,881				4,775				4,774				4,866				1,167				157
2021																											5,899				5,856				5,882				5,983				1,923				318
2022																															6,796				6,757				6,866				2,801				316
2023																																			7,299				7,363				3,887				187
2024																																							7,962				5,552				169
		Losses and ALAE incurred																																				$	50,722
		Cumulative Losses and ALAE Paid through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024
2015		$	329			$	804			$	1,187			$	1,507			$	1,766			$	1,873			$	1,966			$	2,041			$	2,070			$	2,095
2016							373				908				1,359				1,765				1,998				2,140				2,303				2,377				2,420
2017											480				1,133				1,645				2,050				2,279				2,492				2,673				2,784
2018															583				1,340				1,902				2,324				2,746				3,120				3,396
2019																			725				1,598				2,214				2,898				3,430				3,812
2020																							736				1,498				2,066				2,598				3,138
2021																											869				1,751				2,440				3,168
2022																															962				2,012				2,905
2023																																			1,056				2,152
2024																																							1,245
		Losses and ALAE paid																																					27,115
		Net unpaid losses and ALAE for 2015 – 2024 accident years																																					23,607
		Net unpaid losses and ALAE for accident years before 2015																																					728
		Net unpaid losses and ALAE																																				$	24,335

** Unaudited required supplemental information*

BHRG

We use a variety of methodologies to establish BHRG’s estimates for property and casualty claim liabilities. These methodologies include paid and incurred loss development techniques, incurred and paid loss Bornhuetter-Ferguson techniques and frequency and severity techniques, as well as ground-up techniques when appropriate.

K-93

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

Our claim liabilities are principally a function of reported losses from ceding companies, case development and IBNR liability estimates. Case loss estimates are reported either individually or in bulk as provided under the terms of the contracts. We may independently evaluate case losses reported by the ceding company, and if deemed appropriate, establish additional case liabilities based on our estimates.

Estimated IBNR liabilities are affected by expected case loss emergence patterns and expected loss ratios, which are evaluated as groups of contracts with similar exposures or on a contract-by-contract basis. Estimated case and IBNR liabilities for major catastrophe events are generally based on a per-contract assessment of the ultimate cost associated with the individual loss event. Claim count data is not provided consistently by ceding companies under our contracts or is otherwise considered unreliable.

BHRG’s net losses and ALAE incurred and paid are disaggregated and summarized by accident year based on losses that are expected to have shorter claim-tails (property) and losses expected to have longer claim-tails (casualty). Under certain contracts, the coverage can apply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the ceding company may not report loss data by such lines consistently, if at all. In those instances, we allocated losses to property and casualty coverages based on internal estimates. IBNR and case development liabilities are as of December 31, 2024. Dollars are in millions.

Property

		Losses and ALAE Incurred through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024				IBNR and Case Development Liabilities
2015		$	3,587			$	3,392			$	2,827			$	3,218			$	3,214			$	3,236			$	3,238			$	3,232			$	3,255			$	3,225			$	94
2016							3,905				4,492				4,170				4,134				4,132				4,121				4,099				4,088				4,091				30
2017											6,374				6,071				5,893				5,767				5,689				5,608				5,590				5,577				51
2018															5,456				5,542				5,402				5,260				5,267				5,218				5,238				207
2019																			4,951				5,064				4,838				4,537				4,488				4,447				112
2020																							6,914				7,188				6,825				6,620				6,450				376
2021																											8,063				7,919				7,585				7,289				450
2022																															8,852				8,412				7,916				1,102
2023																																			7,953				7,379				1,632
2024																																							7,750				4,225
Losses and ALAE Incurred																																						$	59,362
		Cumulative Losses and ALAE Paid through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024
2015		$	669			$	1,793			$	2,196			$	2,414			$	2,522			$	2,705			$	2,791			$	2,843			$	2,917			$	2,966
2016							913				2,203				2,662				3,151				3,419				3,615				3,724				3,802				3,889
2017											1,346				3,494				4,564				4,915				5,150				5,343				5,432				5,456
2018															1,204				3,073				3,709				3,992				4,236				4,444				4,571
2019																			1,009				2,826				3,532				3,856				4,018				4,082
2020																							1,252				3,569				4,613				5,275				5,546
2021																											1,621				4,070				5,377				6,073
2022																															1,813				4,322				5,588
2023																																			1,771				4,107
2024																																							1,720
Losses and ALAE Paid																																							43,998
Net unpaid losses and ALAE for 2015 – 2024 accident years																																							15,364
Net unpaid losses and ALAE for accident years before 2015																																							487
Net unpaid losses and ALAE																																						$	15,851

** Unaudited required supplemental information*

K-94

Notes to Consolidated Financial Statements

(16)

Unpaid losses and loss adjustment expenses

Casualty

		Losses and ALAE Incurred through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024				IBNR and Case Development Liabilities
2015		$	3,409			$	3,615			$	3,655			$	3,568			$	3,426			$	3,388			$	3,351			$	3,298			$	3,300			$	3,276			$	311
2016							3,777				3,987				3,891				3,859				3,808				3,765				3,735				3,763				3,793				370
2017											4,028				4,462				4,339				4,232				4,164				4,154				4,211				4,214				432
2018															4,875				5,523				5,476				5,345				5,273				5,359				5,429				647
2019																			5,559				6,025				5,885				5,718				5,678				5,751				1,002
2020																							6,203				6,215				6,033				6,079				6,053				1,371
2021																											6,300				6,270				5,942				5,959				1,838
2022																															6,047				6,092				6,045				2,829
2023																																			6,053				6,144				3,528
2024																																							6,093				4,660
		Losses and ALAE incurred																																				$	52,757
		Cumulative Losses and ALAE Paid through December 31,
Accident Year		2015*				2016*				2017*				2018*				2019*				2020*				2021*				2022*				2023*				2024
2015		$	445			$	990			$	1,425			$	1,724			$	1,996			$	2,190			$	2,338			$	2,473			$	2,582			$	2,678
2016							653				1,355				1,795				2,143				2,414				2,607				2,782				2,957				3,095
2017											605				1,306				1,823				2,472				2,720				2,938				3,164				3,350
2018															693				1,737				2,786				3,252				3,631				3,948				4,224
2019																			839				1,865				2,414				3,181				3,727				4,094
2020																							866				1,900				2,709				3,373				3,967
2021																											765				1,781				2,654				3,225
2022																															620				1,333				1,963
2023																																			689				1,575
2024																																							678
		Losses and ALAE paid																																					28,849
		Net unpaid losses and ALAE for 2015 – 2024 accident years																																					23,908
		Net unpaid losses and ALAE for accident years before 2015																																					9,442
		Net unpaid losses and ALAE																																				$	33,350

** Unaudited required supplemental information*

Required supplemental unaudited average historical claims duration information based on the net losses and ALAE incurred and paid accident year data in the preceding tables follows. The percentages show the average portions of net losses and ALAE paid by each succeeding year, with year 1 representing the current accident year.

Average Annual Percentage Payout of Losses Incurred by Age, Net of Reinsurance
In Year	1		2		3		4		5		6		7		8		9		10
GEICO Physical Damage	97%		3%
GEICO Auto Liability	41%		31%		13%		7%		4%
BH Primary Medical Professional Liability	2%		8%		12%		14%		13%		12%		8%		8%		4%		4%
BH Primary Workers’ Compensation and Other Casualty	14%		17%		14%		12%		10%		7%		5%		3%		1%		1%
BHRG Property	22%		35%		15%		8%		4%		4%		2%		1%		2%		2%
BHRG Casualty	13%		17%		13%		11%		8%		6%		5%		4%		4%		3%

K-95

Notes to Consolidated Financial Statements

(17)

Retroactive reinsurance contracts

Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date. Exposures may include significant asbestos, environmental and other mass tort claims. Retroactive reinsurance contracts are generally subject to aggregate policy limits and thus, our exposure to such claims under these contracts is likewise limited. Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment expenses for each of the three years ended December 31, 2024 follow (in millions).

	2024				2023				2022
Balance at the beginning of the year	$	34,647			$	35,415			$	37,855
Losses and loss adjustment expenses incurred		247				1,109				86
Losses and loss adjustment expenses paid		(2,399	)			(1,934	)			(2,358	)
Foreign currency effect		(52	)			57				(168	)
Balance at December 31	$	32,443			$	34,647			$	35,415
Losses and loss adjustment expenses incurred above	$	247			$	1,109			$	86
Deferred charge adjustments		698				375				769
Losses and loss adjustment expenses incurred, including deferred charge adjustments	$	945			$	1,484			$	855

We classify incurred and paid losses and loss adjustment expenses based on the inception dates of the contracts, which reflect when our exposure to losses began. We believe that analysis of losses incurred and paid by the accident year of the underlying event is irrelevant given that our exposure to losses incepted when the contract incepted. We also believe that the classification of reported claims and case development liabilities has little or no practical analytical value. Substantially all of the losses and loss adjustment expenses incurred and paid related to contracts written in prior years.

Losses and loss adjustment expenses incurred include changes in estimated ultimate liabilities and related adjustments to deferred charge assets arising from the changes in the estimated timing and amount of loss payments. In 2023, we increased estimated ultimate liabilities under certain contracts by $1.1 billion, primarily attributable to revised estimates for asbestos, environmental and other casualty claims. Including the adjustments to related deferred charge assets, the increase in ultimate liabilities produced a net expense of approximately $650 million in 2023. Deferred charge assets on retroactive reinsurance contracts were $8.8 billion at December 31, 2024 and $9.5 billion at December 31, 2023.

In establishing retroactive reinsurance claim liabilities, we analyze historical aggregate loss payment patterns and project losses under various probability-weighted scenarios. We expect the claim-tails for many contracts to be very long, with some lasting several decades. We monitor claim payment activity and review ceding company reports and other information concerning the underlying losses. We revise the expected timing and amounts of ultimate losses periodically or when significant events occur.

We monitor evolving case law and its effect on asbestos, environmental and other mass tort claims. Changing laws or government regulations, as well as newly identified toxins and injury events, newly reported claims, new theories of liability, new contract interpretations and other factors could result in increases in these liabilities, which could be material to our results of operations. We are unable to reliably estimate the amount of additional net loss or the range of net loss that is reasonably possible. Our estimates of ultimate liabilities for asbestos and environmental exposures under our contracts were approximately $11.9 billion at December 31, 2024 and $12.2 billion at December 31, 2023.

K-96

Notes to Consolidated Financial Statements

(18)

Long-duration insurance contracts

A summary of our long-duration life, annuity and health insurance benefits liabilities disaggregated by our two principal product categories, periodic payment annuity (“annuities”) and life and health insurance, follows (in millions). Other liabilities include IBNR claims and claims in the course of settlement.

	December 31,
	2024				2023
Annuities	$	10,276			$	11,212
Life and health		4,490				5,749
Other liabilities		2,850				3,252
	$	17,616			$	20,213

Reconciliations of the liabilities for each of our principal product categories for each of the two years ended December 31, 2024 follow. This information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums before reinsurance ceded. Net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses. Amounts are in millions.

	Annuities								Life and health
	2024				2023				2024				2023
Expected future policy benefits:
Balance at the beginning of the year	$	11,212			$	10,640			$	52,665			$	52,008
Balance at the beginning of the year - original discount rates		11,681				11,549				65,871				63,584
Effect of cash flow assumption changes		—				—				(348	)			(829	)
Effect of actual from expected experience		3				5				(12,711	)			(352	)
Change in benefits, net		(478	)			(470	)			1,991				1,616
Interest accrual		550				537				1,234				1,787
Foreign currency effect		1				60				(867	)			65
Balance at December 31 - original discount rates		11,757				11,681				55,170				65,871
Effect of changes in discount rate assumptions		(1,481	)			(469	)			(11,386	)			(13,206	)
Balance at December 31	$	10,276			$	11,212			$	43,784			$	52,665
Expected future net premiums:
Balance at the beginning of the year									$	46,916			$	46,129
Balance at the beginning of the year - original discount rates										58,731				56,535
Effect of cash flow assumption changes										(416	)			(880	)
Effect of actual from expected experience										(11,104	)			(181	)
Change in premiums, net										1,984				1,645
Interest accrual										1,099				1,566
Foreign currency effect										(794	)			46
Balance at December 31 - original discount rates										49,500				58,731
Effect of changes in discount rate assumptions										(10,206	)			(11,815	)
Balance at December 31									$	39,294			$	46,916
Liability for future policy benefits:
Balance at December 31	$	10,276			$	11,212			$	4,490			$	5,749
Reinsurance recoverables		—				—				(46	)			(1,571	)
Balance at December 31, net of reinsurance recoverables	$	10,276			$	11,212			$	4,444			$	4,178

Liabilities for future policy benefits and reinsurance recoverables declined in 2024 primarily attributable to the commutations of certain life reinsurance contracts. The impacts of these contract commutations on expected future policy benefits and future net premiums were included in the effects of actual versus expected experience.

K-97

Notes to Consolidated Financial Statements

(18)

Long-duration insurance contracts

Other information relating to our long-duration insurance liabilities as of December 31, 2024 and 2023 follows (dollars in millions).

	Annuities								Life and health
	2024				2023				2024				2023
Undiscounted expected future gross premiums	$	—			$	—			$	100,413			$	117,078
Discounted expected future gross premiums		—				—				58,881				66,692
Undiscounted expected future benefits		30,592				31,066				91,493				111,630
Weighted average discount rate		5.8	%			5.1	%			4.9	%			5.1	%
Weighted average accretion rate		4.8	%			4.8	%			2.7	%			3.3	%
Weighted average duration	16 years				18 years				13 years				13 years

Gross premiums earned and interest expense before reinsurance ceded for each of the two years ended December 31, 2024 follows (in millions).

	Gross Premiums								Interest Expense
	2024				2023				2024				2023
Annuities	$	—			$	—			$	550			$	537
Life and health		3,830				3,627				135				221

(19)

Notes payable and other borrowings

Notes payable and other borrowings of our insurance and other businesses are summarized below (dollars in millions). The weighted average interest rates and maturity date ranges are based on borrowings as of December 31, 2024.

		Weighted Average				December 31,
		Interest Rate				2024				2023
Insurance and other:
Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2025-2047			3.5	%		$	3,749			$	3,740
Euro denominated due 2025-2041			1.1	%			4,733				6,145
Japanese Yen denominated due 2025-2060			1.0	%			12,609				8,896
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2027-2052			3.6	%			14,469				14,463
Great Britain Pound denominated due 2039-2059			2.5	%			2,156				2,191
Euro denominated due 2030-2034			1.8	%			1,290				1,374
Pilot Travel Centers (“Pilot”)			—				—				5,776
Other subsidiary borrowings due 2025-2051			4.5	%			4,564				4,696
Short-term subsidiary borrowings			6.3	%			1,315				1,187
						$	44,885			$	48,468

Berkshire parent company borrowings consist of senior unsecured debt. In 2024, Berkshire repaid approximately $1.9 billion of maturing senior notes. At various dates in 2024, Berkshire borrowed approximately ¥837.4 billion (approximately $5.5 billion) under senior note issuances and term loan agreements. The borrowings have interest rates ranging from 0.974% to 2.625% and maturity dates ranging from 2027 to 2054.

K-98

Notes to Consolidated Financial Statements

(19)

Notes payable and other borrowings

Borrowings of BHFC, a wholly-owned finance subsidiary of Berkshire, consist of senior unsecured notes used to fund manufactured housing loans originated or acquired and equipment held for lease of certain subsidiaries. BHFC borrowings are fully and unconditionally guaranteed by Berkshire. Berkshire also guarantees certain debt of other subsidiaries, aggregating approximately $2.7 billion at December 31, 2024. Generally, Berkshire’s guarantee of a subsidiary’s debt obligation is an absolute, unconditional and irrevocable guarantee of the full and prompt payment when due of all payment obligations.

Pilot’s borrowings at December 31, 2023 were primarily secured syndicated loans. In 2024, Pilot borrowed $5.7 billion from certain Berkshire insurance subsidiaries, which Pilot used to repay its then outstanding third-party borrowings.

The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€5.85 billion, £1.75 billion and ¥1,988 billion par at December 31, 2024) reflect the applicable exchange rates as of each balance sheet date. The effects of changes in foreign currency exchange rates during the period on our borrowings are recorded in earnings as a component of selling, general and administrative expenses. Changes in the exchange rates produced pre-tax gains of $1.5 billion in 2024, $217 million in 2023 and $1.7 billion in 2022.

Notes payable and other borrowings of our railroad, utilities and energy businesses are summarized below (dollars in millions). The weighted average interest rates and maturity date ranges are based on borrowings as of December 31, 2024.

	Weighted Average				December 31,
	Interest Rate				2024			2023
Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
BHE senior unsecured debt due 2025-2053		4.4	%		$	13,107		$	13,101
Subsidiary and other debt due 2025-2064		4.6	%			42,150			39,072
Short-term borrowings		5.0	%			1,123			4,148
Burlington Northern Santa Fe (“BNSF”) and subsidiaries due 2025-2097		4.7	%			23,497			23,482
					$	79,877		$	79,803

BHE subsidiary debt represents amounts issued pursuant to separate financing agreements. Substantially all of the assets of certain BHE subsidiaries are, or may be, pledged or encumbered to support or otherwise secure such debt. These borrowing arrangements generally contain various covenants, including covenants which pertain to leverage ratios, interest coverage ratios and/or debt service coverage ratios. In 2024, BHE subsidiaries issued $6.4 billion of term debt with a weighted average interest rate of 5.4% and maturity dates ranging from 2029 to 2055 and BHE and its subsidiaries repaid term debt and short-term borrowings aggregating approximately $5.9 billion. In 2025, BHE subsidiaries issued term debt of $1.5 billion, with maturities ranging from 2035 to 2055 and a weighted average interest rate of 6.0%.

BNSF’s borrowings are primarily senior unsecured debentures. In 2024, BNSF issued $1.3 billion of 5.5% debentures due in 2055 and repaid $1.3 billion of debentures. As of December 31, 2024, BHE, BNSF and their subsidiaries were in compliance with all applicable debt covenants. Berkshire does not guarantee any debt, borrowings or lines of credit of BHE, BNSF or their subsidiaries.

Unused and available lines of credit and commercial paper capacity to support operations and provide additional liquidity for our subsidiaries were approximately $11.4 billion at December 31, 2024, of which approximately $10.1 billion related to BHE and its subsidiaries.

Debt principal repayments expected during each of the next five years are as follows (in millions). Amounts in 2025 include short-term borrowings.

		2025				2026				2027				2028				2029
Insurance and other		$	4,334			$	4,313			$	4,788			$	2,214			$	2,595
Railroad, utilities and energy			5,032				1,435				1,632				1,749				3,731
		$	9,366			$	5,748			$	6,420			$	3,963			$	6,326

K-99

Notes to Consolidated Financial Statements

(20)

Income taxes

Our liabilities for income taxes are as follows (in millions).

		December 31,
		2024				2023
Currently payable		$	1,806			$	185
Deferred			83,563				92,344
Other			501				480
		$	85,870			$	93,009

Our deferred income tax assets and liabilities summarized by type of temporary difference are as follows (in millions).

		December 31,
		2024				2023
Deferred income tax liabilities:
Investments, including unrealized appreciation		$	47,158			$	56,766
Deferred charges retroactive reinsurance			1,847				1,994
Property, plant and equipment and equipment held for lease			33,590				32,991
Goodwill and other intangible assets			7,498				7,546
Other			5,043				4,452
			95,136				103,749
Deferred income tax assets:
Unpaid losses and loss adjustment expenses		$	1,226			$	1,255
Unearned premiums			1,284				1,285
Accrued liabilities			2,713				2,626
Regulatory liabilities			1,364				1,248
Deferred revenue			2,539				2,282
Other			2,447				2,709
			11,573				11,405
Net deferred income tax liability		$	83,563			$	92,344

We have not established deferred income taxes on accumulated undistributed earnings of certain foreign subsidiaries, which are expected to be reinvested indefinitely. Repatriation of all accumulated earnings of foreign subsidiaries would be impracticable to the extent that such earnings represent capital to support ongoing business operations. Generally, no U.S. federal income taxes will be imposed on future distributions of foreign earnings under current law. However, distributions to the U.S. or other foreign jurisdictions could be subject to withholding and other local taxes.

Income tax expense (benefit) for each of the three years ending December 31, 2024 is summarized as follows (in millions).

		2024				2023				2022
U.S. federal		$	18,481			$	20,764			$	(10,316	)
U.S. state			767				763				762
Foreign			1,567				1,492				1,052
		$	20,815			$	23,019			$	(8,502	)
Current		$	30,464			$	7,642			$	4,815
Deferred			(9,649	)			15,377				(13,317	)
		$	20,815			$	23,019			$	(8,502	)

K-100

Notes to Consolidated Financial Statements

(20)

Income taxes

Income tax expense (benefit) is reconciled to hypothetical amounts computed at the U.S. federal statutory rate for each of the three years ending December 31, 2024 in the table below (dollars in millions).

		2024				2023				2022
Earnings (loss) before income taxes		$	110,376			$	120,166			$	(30,500	)
Hypothetical income tax expense (benefit) at the U.S. federal statutory rate		$	23,179			$	25,235			$	(6,405	)
Dividends received deduction			(491	)			(678	)			(512	)
State income taxes, less U.S. federal income tax effect			606				603				602
U.S. income tax credits*			(2,575	)			(2,186	)			(2,187	)
Other differences, net			96				45				—
		$	20,815			$	23,019			$	(8,502	)
Effective income tax rate			18.9	%			19.2	%			27.9	%

*** U.S. income tax credits derive primarily from production tax credits associated with wind-energy generation of BHE and tax credits arising from affordable housing investments.

We file income tax returns in the U.S. and in state, local and foreign jurisdictions. We have settled income tax liabilities with the U.S. federal taxing authority (“IRS”) for tax years through 2013, and the IRS is currently auditing tax years 2014 through 2019. We are also under audit or subject to audit with respect to income taxes in various state and foreign jurisdictions. It is reasonably possible that certain of these income tax examinations will be settled in 2025. We currently do not believe that the outcome of unresolved issues or claims will be material to our Consolidated Financial Statements.

At December 31, 2024 and 2023, net unrecognized tax benefits were $501 million and $480 million, respectively. Included in the balance at December 31, 2024, were $448 million of tax positions that, if recognized, would impact the effective tax rate. We do not expect material increases to the estimated amount of unrecognized tax benefits during 2025.

The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the U.S. has not yet adopted Pillar Two rules, various other governments around the world are enacting legislation to adopt the rules. As currently designed, Pillar Two would apply to our worldwide operations. We do not currently have material operations in jurisdictions with tax rates lower than the Pillar Two minimum tax rate, and we do not currently expect these rules will materially increase our global tax costs. There remains uncertainty as to the final Pillar Two model rules.

K-101

Notes to Consolidated Financial Statements

(21)

Fair value measurements

Our financial assets and liabilities are summarized below, with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, other receivables and accounts payable, accruals and other liabilities are considered to be reasonable estimates of or otherwise approximate the fair values.

		Carrying Value				Fair Value				Quoted Prices (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
December 31, 2024
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	4,459			$	4,459			$	4,425			$	34			$	—
Foreign governments			9,362				9,362				9,199				163				—
Corporate and other			1,543				1,543				—				1,041				502
Investments in equity securities			271,588				271,588				261,910				10				9,668
Investments in Kraft Heinz & Occidental common stock			30,682				23,047				23,047				—				—
Loans and finance receivables			27,798				27,579				—				810				26,769
Derivative contract assets (1)			201				201				33				158				10
Derivative contract liabilities (1)			234				234				15				143				76
Notes payable and other borrowings:
Insurance and other			44,885				40,181				—				40,158				23
Railroad, utilities and energy			79,877				72,506				—				72,506				—
December 31, 2023
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	10,269			$	10,269			$	10,234			$	35			$	—
Foreign governments			11,805				11,805				11,559				246				—
Corporate and other			1,684				1,684				—				1,095				589
Investments in equity securities			353,842				353,842				343,358				10				10,474
Investments in Kraft Heinz & Occidental common stock			28,640				26,587				26,587				—				—
Loans and finance receivables			24,681				24,190				—				892				23,298
Derivative contract assets (1)			334				334				39				282				13
Derivative contract liabilities (1)			213				213				7				111				95
Notes payable and other borrowings:
Insurance and other			48,468				44,981				—				44,950				31
Railroad, utilities and energy			79,803				75,239				—				75,239				—

(1)

Assets are included in other assets, and liabilities are included in accounts payable, accruals and other liabilities.

K-102

Notes to Consolidated Financial Statements

(21)

Fair value measurements

The fair values of substantially all of our financial instruments were measured using market or income approaches. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.

Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.

Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector.

Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or liabilities.

Reconciliations of significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for each of the three years ending December 31, 2024 follow (in millions).

		Balance at the beginning of the year				Gains (losses) included in earnings				Acquisitions, dispositions and settlements				Balance at the end of the year
Investments in equity securities:
2024		$	10,468			$	(805	)		$	—			$	9,663
2023			12,169				(40	)			(1,661	)			10,468
2022			11,480				689				—				12,169

Quantitative information as of December 31, 2024 for the significant assets measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follows (dollars in millions).

		Fair Value				Principal Valuation Techniques		Unobservable Inputs		Weighted Average
Investments in equity securities:
Preferred stock		$	8,429			Discounted cash flow		Expected duration		5 years
								Discount for illiquidity and subordination		372 bps
Common stock warrants			1,234			Warrant pricing model		Expected duration		6 years
								Volatility		42%

Investments in equity securities in the preceding table include our investments in certain preferred and common stock warrants that do not have readily determinable market values as defined under GAAP. These investments are private placements and are not traded in securities markets. We applied discounted cash flow techniques in valuing the preferred stock and we made assumptions regarding the expected duration of the investment and the effects of illiquidity and subordination in liquidation. In valuing the common stock warrants, we used a warrant valuation model. While most of the inputs to the warrant model are observable, we made assumptions regarding the expected duration and volatility.

K-103

Notes to Consolidated Financial Statements

(22)

Common stock

The changes in Berkshire’s issued, treasury and outstanding common stock for each of the three years ending December 31, 2024 are shown in the table below. In addition, one million shares of preferred stock are authorized, but none are issued.

	**Class A, $**5 **Par Value (**1.65 million shares authorized)										**Class B, $**0.0033 **Par Value (**3.225 billion shares authorized)
	Issued			Treasury			Outstanding				Issued			Treasury			Outstanding
Balance at December 31, 2021		665,901			(48,788	)		617,113				1,488,292,852			(197,818,349	)		1,290,474,503
Conversions of Class A to Class B common stock		(14,451	)		—			(14,451	)			21,676,500			—			21,676,500
Treasury stock acquired		—			(11,098	)		(11,098	)			—			(9,896,927	)		(9,896,927	)
Balance at December 31, 2022		651,450			(59,886	)		591,564				1,509,969,352			(207,715,276	)		1,302,254,076
Conversions of Class A to Class B common stock		(12,122	)		—			(12,122	)			18,183,000			—			18,183,000
Treasury stock acquired		—			(11,667	)		(11,667	)			—			(9,875,568	)		(9,875,568	)
Balance at December 31, 2023		639,328			(71,553	)		567,775				1,528,152,352			(217,590,844	)		1,310,561,508
Conversions of Class A to Class B common stock		(15,426	)		—			(15,426	)			23,139,000			—			23,139,000
Treasury stock acquired		—			(4,787	)		(4,787	)			—			—			—
Treasury stock issued		—			—			—				—			2,291,631			2,291,631
Balance at December 31, 2024		623,902			(76,340	)		547,562				1,551,291,352			(215,299,213	)		1,335,992,139

Each Class A common share is entitled to one vote per share. Class B common stock possesses dividend and distribution rights equal to one-fifteen-hundredth (1/1,500) of such rights of Class A common stock. Each Class B common share possesses voting rights equal to one-ten-thousandth (1/10,000) of the voting rights of a Class A share. Unless otherwise required under Delaware General Corporation Law, Class A and Class B common shares vote as a single class. Each share of Class A common stock is convertible, at the option of the holder, into 1,500 shares of Class B common stock. Class B common stock is not convertible into Class A common stock. On an equivalent Class A common stock basis, there were 1,438,223 shares outstanding as of December 31, 2024 and 1,441,483 shares outstanding as of December 31, 2023.

Since we have two classes of common stock, we provide earnings per share data on the Consolidated Statements of Earnings for average equivalent Class A shares outstanding and average equivalent Class B shares outstanding. Class B shares are economically equivalent to one-fifteen-hundredth (1/1,500) of a Class A share. Average equivalent Class A shares outstanding represents average Class A shares outstanding plus one-fifteen-hundredth (1/1,500) of the average Class B shares outstanding. Average equivalent Class B shares outstanding represents average Class B shares outstanding plus 1,500 times average Class A shares outstanding.

Berkshire’s common stock repurchase program, as amended, permits Berkshire to repurchase shares any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. The program continues to allow share repurchases in the open market or through privately negotiated transactions and does not specify a maximum number of shares to be repurchased. However, repurchases will not be made if they would reduce the total value of Berkshire’s consolidated cash, cash equivalents and U.S. Treasury Bill holdings below $30 billion. The repurchase program does not obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the program.

K-104

Notes to Consolidated Financial Statements

(23)

Revenues from contracts with customers

The following table summarizes customer contract revenues disaggregated by reportable segment and the source of the revenue for each of the three years ended December 31, 2024 (in millions). Other revenues, which are not considered to be revenues from contracts with customers under GAAP, are primarily insurance premiums earned, interest, dividend and other investment income and leasing revenues.

2024		BNSF				Berkshire Hathaway Energy				Manufacturing				Service and Retailing				Pilot*				McLane				Insurance, Corporate and other				Total
Manufactured products:
Industrial and commercial		$	—			$	—			$	28,907			$	210			$	—			$	—			$	—			$	29,117
Building			—				—				19,892				—				—				—				—				19,892
Consumer			—				—				18,204				—				—				—				—				18,204
Grocery and convenience store distribution			—				—				—				—				—				31,841				—				31,841
Food and beverage distribution			—				—				—				—				—				18,068				—				18,068
Auto sales			—				—				—				10,802				—				—				—				10,802
Other retail and wholesale distribution			—				—				3,390				15,035				46,433				—				—				64,858
Service			23,278				4,059				1,570				5,761				274				999				—				35,941
Electricity and natural gas			—				20,991				—				—				—				—				—				20,991
Total			23,278				25,050				71,963				31,808				46,707				50,908				—				249,714
Other revenues			212				1,250				5,185				7,975				149				178				106,770				121,719
		$	23,490			$	26,300			$	77,148			$	39,783			$	46,856			$	51,086			$	106,770			$	371,433
2023
Manufactured products:
Industrial and commercial		$	—			$	—			$	28,066			$	233			$	—			$	—			$	—			$	28,299
Building			—				—				20,119				—				—				—				—				20,119
Consumer			—				—				17,702				—				—				—				—				17,702
Grocery and convenience store distribution			—				—				—				—				—				31,524				—				31,524
Food and beverage distribution			—				—				—				—				—				19,040				—				19,040
Auto sales			—				—				—				10,747				—				—				—				10,747
Other retail and wholesale distribution			—				—				3,289				16,289				51,197				—				—				70,775
Service			23,724				4,055				1,457				5,474				264				1,079				—				36,053
Electricity and natural gas			—				20,647				—				—				—				—				—				20,647
Total			23,724				24,702				70,633				32,743				51,461				51,643				—				254,906
Other revenues			67				1,258				4,650				7,136				203				171				96,091				109,576
		$	23,791			$	25,960			$	75,283			$	39,879			$	51,664			$	51,814			$	96,091			$	364,482
2022
Manufactured products:
Industrial and commercial		$	—			$	—			$	24,566			$	199							$	—			$	—			$	24,765
Building			—				—				22,762				—								—				—				22,762
Consumer			—				—				19,912				—								—				—				19,912
Grocery and convenience store distribution			—				—				—				—								32,599				—				32,599
Food and beverage distribution			—				—				—				—								19,388				—				19,388
Auto sales			—				—				—				10,486								—				—				10,486
Other retail and wholesale distribution			—				—				3,195				16,931								—				—				20,126
Service			25,742				4,933				1,199				4,439								1,103				—				37,416
Electricity and natural gas			—				20,317				—				—								—				—				20,317
Total			25,742				25,250				71,634				32,055								53,090				—				207,771
Other revenues			60				1,097				4,016				6,154								119				82,803				94,249
		$	25,802			$	26,347			$	75,650			$	38,209							$	53,209			$	82,803			$	302,020

——————

*** Revenues from Pilot are principally fuel sales and revenues in 2023 are for the eleven months ending December 31.

K-105

Notes to Consolidated Financial Statements

(23)

Revenues from contracts with customers

A summary of the transaction price allocated to the significant unsatisfied remaining performance obligations related to contracts with expected durations exceeding one year as of December 31, 2024 and the timing of when the performance obligations are expected to be satisfied follows (in millions).

		Less than 12 months				Greater than 12 months				Total
Electricity and natural gas		$	3,716			$	18,958			$	22,674
Other sales and service contracts			3,499				4,630				8,129

(24)

Pension plans

Certain Berkshire subsidiaries sponsor defined benefit pension plans. Plan benefits are generally based on years of service and compensation or fixed benefit rates. Plan sponsors may make contributions to the plans to meet regulatory requirements or may make discretionary contributions. Benefits under qualified U.S. and certain non-U.S. defined benefit pension plans are funded with assets held in trusts. Certain other non-qualified retirement plans are unfunded. Our net periodic pension expense for each of the three years ending December 31, 2024 was as follows (in millions).

		2024				2023				2022
Service cost		$	107			$	111			$	181
Interest cost			617				640				482
Expected return on plan assets			(818	)			(785	)			(975	)
Other			41				2				156
Net periodic pension expense		$	(53	)		$	(32	)		$	(156	)

The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits earned based on service and compensation prior to the valuation date. The ABO was $11.2 billion at December 31, 2024 and $12.3 billion at December 31, 2023. The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation levels.

Reconciliations of the changes in plan assets and PBOs for each of the two years ending December 31, 2024 and the asset and liability balances reflected in the Consolidated Balance Sheets at year end 2024 and 2023 follow (in millions).

		2024				2023
Plan assets
Balance at the beginning of the year		$	13,379			$	12,592
Employer contributions			111				145
Benefits paid			(810	)			(852	)
Settlements paid			(354	)			(448	)
Actual return on plan assets			1,909				1,783
Other			(55	)			159
Balance at the end of the year		$	14,180			$	13,379
Projected benefit obligations
Balance at the beginning of the year		$	12,767			$	12,738
Service cost			107				111
Interest cost			617				640
Benefits paid			(810	)			(852	)
Settlements paid			(354	)			(448	)
Actuarial (gains) losses and other			(607	)			578
Balance at the end of the year		$	11,720			$	12,767
Net funded status - asset (liability)		$	2,460			$	612
Balances included in other assets		$	3,490			$	1,823
Balances included in accounts payable and other liabilities		$	1,030			$	1,211

Liabilities include benefit obligations of unfunded plans of $1.0 billion at December 31, 2024 and 2023, respectively.

K-106

Notes to Consolidated Financial Statements

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Pension plans

Weighted average assumptions used in determining PBOs and net periodic pension expense follow.

	2024			2023			2022
Discount rate applicable to PBOs		5.5	%		5.0	%		5.2	%
Expected long-term rate of return on plan assets		5.9			6.0		5.9
Rate of compensation increase	2.6			2.6			2.5
Discount rate applicable to net periodic pension expense		5.1			5.3			2.9

Expected benefit payments over the next ten years are (in millions): 2025 – $893; 2026 – $873; 2027 – $875; 2028 – $884; 2029 – $883; and 2030 through 2034 – $4,379. Our subsidiaries expect to make contributions of $114 million to the pension plans in 2025.

Fair value measurements of plan assets as of December 31, 2024 and 2023 follow (in millions).

		Fair Value																Investments carried at net
		Total				Level 1				Level 2				Level 3				asset value
December 31, 2024
Cash and cash equivalents		$	600			$	556			$	44			$	—			$	—
Equity securities			9,757				9,036				581				140				—
Fixed maturity securities			1,747				953				794				—				—
Investment funds and other			2,076				385				144				23				1,524
		$	14,180			$	10,930			$	1,563			$	163			$	1,524
December 31, 2023
Cash and cash equivalents		$	449			$	370			$	79			$	—			$	—
Equity securities			8,487				7,808				543				136				—
Fixed maturity securities			2,138				1,277				851				10				—
Investment funds and other			2,305				342				272				42				1,649
		$	13,379			$	9,797			$	1,745			$	188			$	1,649

Plan assets are generally invested with the long-term objective of producing earnings to adequately cover expected benefit obligations. The expected rates of return on plan assets reflect subjective assessments of expected long-term investment returns. Generally, past investment returns are not given significant consideration when establishing assumptions for expected long-term rates of return on plan assets. Actual experience will differ from the assumed rates of return.

K-107

Notes to Consolidated Financial Statements

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Pension plans

A reconciliation of the pre-tax accumulated other comprehensive income (loss) of our defined benefit pension plans for each of the two years ending December 31, 2024 follows (in millions).

		2024				2023
Balance at the beginning of the year		$	(161	)		$	(738	)
Amount included in net periodic pension expense			29				(12	)
Actuarial gains (losses) and other			1,599				589
Balance at the end of the year		$	1,467			$	(161	)

Our subsidiaries may also sponsor defined contribution retirement plans, such as 401(k) or profit-sharing plans. Employee contributions are subject to regulatory limitations and specific plan provisions. Several of these plans provide for employer matching contributions as specified in the plans and may provide for additional discretionary employer contributions. Our defined contribution plan expense was approximately $1.3 billion in 2024, $1.1 billion in 2023 and $0.8 billion in 2022.

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Accumulated other comprehensive income

A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire shareholders for each of the three years ending December 31, 2024 follows (in millions).

		Unrealized investment gains (losses)			Foreign currency translation			Long-duration insurance contracts			Defined benefit pension plans			Other			Total
Balance at December 31, 2021		$	369		$	(4,092	)	$	(4,096	)	$	(347	)	$	43		$	(8,123	)
Other comprehensive income			(991	)		(2,047	)		5,637			(298	)		283			2,584
Reclassifications into net earnings			435			(3	)		—			93			(38	)		487
Balance at December 31, 2022			(187	)		(6,142	)		1,541			(552	)		288			(5,052	)
Other comprehensive income			420			741			(188	)		466			(25	)		1,414
Reclassifications into net earnings			(43	)		8			—			(11	)		(79	)		(125	)
Balance at December 31, 2023			190			(5,393	)		1,353			(97	)		184			(3,763	)
Other comprehensive income			(43	)		(1,647	)		662			1,222			2			196
Reclassifications into net earnings			(30	)		1			—			23			(11	)		(17	)
Balance at December 31, 2024		$	117		$	(7,039	)	$	2,015		$	1,148		$	175		$	(3,584	)

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Business segment data

Berkshire’s numerous and diverse businesses are managed on an unusually decentralized basis. These businesses are aggregated into operating segments in a manner that reflects how Berkshire views the business activities. Berkshire’s chief operating decision maker consists of the Chairman and Chief Executive Officer, the Vice Chairman of Insurance Operations and the Vice Chairman of Non-Insurance Operations. This group participates in and is ultimately responsible for significant capital allocation decisions, evaluating operating performance and selecting the chief executive to head each of the operating segments. Investing decisions are the responsibility of Berkshire’s Chairman and Chief Executive Officer and Berkshire’s corporate investment managers. Certain operating segments are aggregated into reportable business segments based upon similar products or product lines, marketing strategies, and selling and distribution characteristics.

K-108

Notes to Consolidated Financial Statements

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Business segment data

Berkshire’s reportable business segments are as follows.

Business Segment		Principal Business Activities
Insurance:
GEICO		Underwriting private passenger automobile insurance mainly by direct response methods
Berkshire Hathaway Primary Group		Underwriting multiple lines of property and casualty insurance policies for primarily commercial accounts
Berkshire Hathaway Reinsurance Group		Underwriting excess-of-loss, quota-share and facultative reinsurance worldwide
Burlington Northern Santa Fe (“BNSF”)		Operator of one of the largest railroad systems in North America
Berkshire Hathaway Energy (“BHE”)		Regulated electric and gas utility, including power generation and distribution activities and real estate brokerage activities
Manufacturing		Manufacturers of numerous products including industrial, consumer and building products, including home building and related financial services
Pilot Travel Centers (“Pilot”) (1)		Operator of travel centers in North America and a marketer of wholesale fuel
McLane Company (“McLane”)		Wholesale distribution of food and non-food items to retailers and restaurants
Service and retailing		Providers of numerous services including shared aircraft ownership programs, aviation pilot training, electronic components distribution, various retailing businesses, including automobile dealerships and over-the-road trailer and furniture leasing

——————

(1) Pilot’s statement of earnings and capital expenditure segment data in 2023 is for the eleven months ending December 31, 2023. Our earnings from Pilot in 2022 and for the month of January 2023 were determined under the equity method and included in earnings from non-controlled businesses.

The tabular information that follows shows data of Berkshire’s business segments reconciled to amounts reflected in our Consolidated Financial Statements. Intersegment transactions are not eliminated from segment results when those transactions are considered in assessing the results of the respective segments and are not considered to be material. Furthermore, investment gains and losses, goodwill and indefinite-lived intangible asset impairments and amortization of certain acquisition accounting adjustments or certain other corporate income and expense items are not considered in assessing the financial performance of operating businesses. Collectively, these items are included in corporate, eliminations and other to reconcile segment totals to consolidated amounts.

The cost and expense information provided is based on the information regularly provided to the chief operating decision maker. Given the number and diversity of Berkshire’s operating segments and the differences in revenue streams and cost structures, there are wide variances in the form, content and levels of such expense information significant to the business. Expenses considered significant for one operating segment may not be significant in others.

With respect to insurance underwriting, the chief operating decision maker considers pre-tax underwriting earnings to allocate resources and capital, together with perceived risks and opportunities in the insurance markets that affect rates and risks of loss. Typically, there are no budgeted or forecasted premiums or underwriting results.

For most non-insurance businesses, pre-tax earnings are considered in allocating resources and capital, although income taxes are also considered at BHE, given the magnitude of production tax credits associated with wind-powered electricity generation investments and the related impacts from regulation. The chief operating decision maker generally considers actual operating results versus budgets or forecasts, as well as unique perceived risks and opportunities associated with the individual operating businesses.

K-109

Notes to Consolidated Financial Statements

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Business segment data

We view our insurance segment as possessing two distinct activities – underwriting and investing. Underwriting decisions are the responsibility of the underwriting managers, while investment decisions are the responsibility of Berkshire’s CEO and other corporate investment managers. Accordingly, performance of underwriting operations is evaluated without any allocation of investment income. As such, the insurance net investment income is presented in the aggregate as a separate component of insurance segment operating earnings. Earnings data of our business segments for each of the three years ended December 31, 2024 are shown in the following tables (in millions).

	2024
	GEICO			BH Primary			BHRG			Total Underwriting			Investment Income			Total
Revenues	$	42,252		$	18,733		$	27,272		$	88,257		$	16,812		$	105,069
Costs and Expenses:
Losses and LAE		30,331			12,666			13,189			56,186			—			56,186
Life, annuity and health benefits		—			—			3,858			3,858			—			3,858
Other segment items		4,108			5,212			7,488			16,808			64			16,872
Total costs and expenses		34,439			17,878			24,535			76,852			64			76,916
Earnings before income taxes	$	7,813		$	855		$	2,737		$	11,405		$	16,748		$	28,153
	2023
	GEICO			BH Primary			BHRG			Total Underwriting			Investment Income			Total
Revenues	$	39,264		$	17,129		$	27,010		$	83,403		$	11,619		$	95,022
Costs and Expenses:
Losses and LAE		31,814			11,224			14,149			57,187			—			57,187
Life, annuity and health benefits		—			—			4,029			4,029			—			4,029
Other segment items		3,815			4,531			6,928			15,274			38			15,312
Total costs and expenses		35,629			15,755			25,106			76,490			38			76,528
Earnings before income taxes	$	3,635		$	1,374		$	1,904		$	6,913		$	11,581		$	18,494
	2022
	GEICO			BH Primary			BHRG			Total Underwriting			Investment Income			Total
Revenues	$	38,984		$	13,746		$	21,846		$	74,576		$	7,734		$	82,310
Costs and Expenses:
Losses and LAE		36,297			9,889			11,460			57,646			—			57,646
Life, annuity and health benefits		—			—			5,243			5,243			—			5,243
Other segment items		4,567			3,464			3,678			11,709			10			11,719
Total costs and expenses		40,864			13,353			20,381			74,598			10			74,608
Earnings before income taxes	$	(1,880	)	$	393		$	1,465		$	(22	)	$	7,724		$	7,702

Insurance other segment items include commissions and brokerage expenses and other insurance underwriting expenses.

				BNSF
				2024			2023			2022
Revenues				$	23,572		$	23,876		$	25,888
Costs and Expenses:
Compensation and benefits					5,872			5,551			5,321
Fuel					3,267			3,684			4,581
Depreciation and amortization					2,621			2,627			2,510
Interest expense					1,078			1,048			1,025
Other segment items					4,086			4,352			4,743
Total costs and expenses					16,924			17,262			18,180
Earnings before income taxes				$	6,648		$	6,614		$	7,708

BNSF other segment items include purchased services, equipment rents and materials expenses.

K-110

Notes to Consolidated Financial Statements

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Business segment data

				BHE
				2024			2023			2022
Revenues				$	26,348		$	26,008		$	26,393
Costs and Expenses:
Energy cost of sales					6,616			7,057			6,757
Energy operations and maintenance					5,470			6,456			4,216
Energy depreciation and amortization					3,957			3,960			3,695
Real estate costs and expenses					4,509			4,316			5,117
Interest expense					2,528			2,283			2,140
Other segment items					976			996			1,322
Total costs and expenses					24,056			25,068			23,247
Earnings before income taxes				$	2,292		$	940		$	3,146

BHE other segment items primarily consist of property taxes and other expenses. Energy operations and maintenance includes losses associated with the 2020 and 2022 Wildfires. See Note 27.

	Manufacturing									Service and Retailing
	2024			2023			2022			2024			2023			2022
Revenues	$	77,231		$	75,405		$	75,781		$	39,874		$	39,996		$	38,303
Costs and Expenses:
Cost of sales and services		50,702			50,389			52,297			23,818			23,915			22,952
Cost of leasing		1,142			1,051			1,083			5,917			5,011			4,462
Interest expense		934			784			739			118			101			42
Other segment items		12,558			11,736			10,485			6,321			6,248			6,076
Total costs and expenses		65,336			63,960			64,604			36,174			35,275			33,532
Earnings before income taxes	$	11,895		$	11,445		$	11,177		$	3,700		$	4,721		$	4,771

Other segment items of manufacturing, services and retailing segments primarily consist of selling, general and administrative expenses.

	Pilot							McLane
	2024			2023				2024			2023			2022
Revenues	$	46,891		$	51,739			$	51,907		$	52,607		$	53,209
Costs and Expenses:
Cost of sales and services		42,591			47,505				47,604			48,495			49,236
Depreciation and amortization		1,012			796				217			208			176
Other segment items		2,674			2,470				3,452			3,449			3,526
Total costs and expenses		46,277			50,771				51,273			52,152			52,938
Earnings before income taxes	$	614		$	968			$	634		$	455		$	271

Pilot other segment items primarily consist of store operating, interest and general and administrative expenses. McLane other segment items include general and administrative expenses.

Reconciliations of revenues and earnings (loss) before income taxes of our business segments to the consolidated amounts for each of the three years ended December 31, 2024 follows (in millions).

	Revenues									Earnings (loss) before income taxes
	2024			2023			2022			2024			2023			2022
Total operating businesses	$	370,892		$	364,653		$	301,884		$	53,936		$	43,637		$	34,775
Investment gains (losses)		—			—			—			52,799			74,855			(67,899	)
Interest expense, not allocated to segments		—			—			—			(427	)		(426	)		(420	)
Non-controlled businesses		—			—			—			1,841			1,973			1,863
Corporate, eliminations and other		541			(171	)		136			2,227			127			1,181
	$	371,433		$	364,482		$	302,020		$	110,376		$	120,166		$	(30,500	)

K-111

Notes to Consolidated Financial Statements

(26)

Business segment data

Additional segment data for each of the three most recent years follows (in millions).

	Interest expense										Income tax expense (benefit)
	2024			2023			2022				2024			2023			2022
Business segments
Insurance	$	—		$	—		$	—			$	5,462		$	3,497		$	1,247
BNSF		1,078			1,048			1,025				1,617			1,527			1,763
BHE		2,528			2,283			2,140				(1,871	)		(2,022	)		(1,629	)
Manufacturing		934			784			739				2,598			2,487			2,403
Pilot		302			414			—				—			169			—
McLane		22			—			—				152			117			66
Service and retailing		118			101			42				912			1,135			1,131
		4,982			4,630			3,946				8,870			6,910			4,981
Reconciliation to consolidated amount
Investment gains (losses)		—			—			—				11,179			15,930			(14,166	)
Interest expense, not allocated to segments		427			426			420				(90	)		(90	)		(88	)
Non-controlled businesses		—			—			—				322			223			334
Corporate, eliminations and other		(209	)		(53	)		(14	)			534			46			437
	$	5,200		$	5,003		$	4,352			$	20,815		$	23,019		$	(8,502	)

	Capital expenditures										Depreciation and amortization
	2024			2023			2022				2024			2023			2022
Business segments
Insurance	$	99		$	68		$	82			$	411		$	401		$	260
BNSF		3,690			3,920			3,532				2,621			2,627			2,510
BHE		9,013			9,148			7,505				4,003			4,010			3,751
Manufacturing		2,779			2,714			2,477				2,422			2,290			2,140
Pilot		799			705			—				1,012			796			—
McLane		236			264			93				217			208			176
Service and retailing		2,360			2,590			1,775				1,522			1,335			1,245
	$	18,976		$	19,409		$	15,464				12,208			11,667			10,082
Reconciliation to consolidated amount
Corporate, eliminations and other												647			819			817
											$	12,855		$	12,486		$	10,899

	Goodwill at year-end										Identifiable assets at year-end
	2024			2023			2022				2024			2023			2022
Business segments
Insurance	$	16,557		$	16,563		$	16,548			$	539,884		$	538,860		$	459,917
BNSF		15,351			15,350			14,852				80,813			79,227			77,752
BHE		11,669			11,804			11,745				128,276			124,383			118,114
Manufacturing		27,716			27,831			28,460				119,860			115,875			113,578
Pilot		6,477			6,605			—				19,652			21,404			—
McLane		232			232			232				7,165			6,861			7,049
Service and retailing		5,878			6,241			6,282				37,198			34,600			31,291
	$	83,880		$	84,626		$	78,119				932,848			921,210			807,701
Reconciliation to consolidated amount
Corporate and other												137,153			64,142			62,645
Goodwill												83,880			84,626			78,119
											$	1,153,881		$	1,069,978		$	948,465

K-112

Notes to Consolidated Financial Statements

(26)

Business segment data

Property/casualty and life/health insurance premiums written and earned are summarized below (in millions).

	Property/Casualty										Life/Health
	2024			2023			2022				2024			2023			2022
Premiums Written:
Direct	$	65,495		$	61,990		$	56,700			$	19		$	—		$	582
Assumed		20,422			20,751			15,143				5,016			5,126			5,222
Ceded		(2,231	)		(2,402	)		(1,155	)			(28	)		(33	)		(37	)
	$	83,686		$	80,339		$	70,688			$	5,007		$	5,093		$	5,767
Premiums Earned:
Direct	$	64,880		$	60,437		$	55,879			$	18		$	—		$	582
Assumed		20,738			20,442			14,184				5,008			5,105			5,263
Ceded		(2,359	)		(2,548	)		(1,293	)			(28	)		(33	)		(39	)
	$	83,259		$	78,331		$	68,770			$	4,998		$	5,072		$	5,806

Insurance premiums written by geographic region (based upon the domicile of the insured or reinsured) are summarized below (in millions).

	Property/Casualty										Life/Health
	2024			2023			2022				2024			2023			2022
United States	$	71,723		$	67,831		$	59,648			$	1,358		$	1,285		$	2,107
Western Europe		5,252			5,014			4,901				1,407			1,323			1,235
Asia Pacific		5,043			5,306			4,699				1,548			1,760			1,704
All other		1,668			2,188			1,440				694			725			721
	$	83,686		$	80,339		$	70,688			$	5,007		$	5,093		$	5,767

Consolidated sales, service and leasing revenues were $211.6 billion in 2024, $215.6 billion in 2023 and $165.0 billion in 2022. Sales, service and leasing revenues attributable to the United States were 86% in 2024, 87% in 2023 and 86% in 2022 of such amounts. The remainder of sales, service and leasing revenues were primarily in Europe, the Asia-Pacific region and Canada. Railroad, utilities and energy revenues were $49.8 billion in 2024 and 2023 and $52.1 billion in 2022. Railroad, utilities and energy revenues attributable to the United States were 95% in 2024 and 96% in 2023 and 2022. At December 31, 2024, approximately 91% of our consolidated net property, plant and equipment and equipment held for lease was located in the United States with the remainder primarily in the United Kingdom and Canada.

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Contingencies and commitments

We are parties in a variety of legal actions that routinely arise out of the normal course of business, including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations.

PacifiCorp, a wholly-owned subsidiary of Berkshire Hathaway Energy Company (“BHE”), operates as a regulated electric utility in Utah, Oregon, Wyoming and other Western states. HomeServices of America, Inc. (“HomeServices”) is also a wholly-owned subsidiary of BHE. Certain legal matters related to these entities are described below.

PacifiCorp

In September 2020, a severe weather event resulting in high winds, low humidity and warm temperatures, contributed to several major wildfires, which resulted in real and personal property and natural resource damage, personal injuries, loss of life and widespread power outages in Oregon and Northern California. These wildfires spread across certain parts of PacifiCorp’s service territory and surrounding areas across multiple counties in Oregon and California, including Siskiyou County, California; Jackson County, Oregon; Douglas County, Oregon; Marion County, Oregon; Lincoln County, Oregon; and Klamath County, Oregon, burning over 500,000 acres in aggregate. Third-party reports for these wildfires (the “2020 Wildfires”) indicate over 2,000 structures destroyed, including residences; several other structures damaged; multiple individuals injured; and several fatalities. Investigations into the cause and origin of each of the 2020 Wildfires are complex and ongoing and have been or are being conducted by various entities, including the U.S. Forest Service, the California Public Utilities Commission, the Oregon Department of Forestry, the Oregon Department of Justice, PacifiCorp and various experts engaged by PacifiCorp.

K-113

Notes to Consolidated Financial Statements

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Contingencies and commitments

According to the California Department of Forestry and Fire Protection, a wildfire began on July 29, 2022, in the Oak Knoll Ranger District of the Klamath National Forest in Siskiyou County, California located in PacifiCorp’s service territory (the “2022 Wildfire”) burning over 60,000 acres. Third-party reports indicate that the 2022 Wildfire resulted in 11 structures damaged, 185 structures destroyed, 12 injuries and four fatalities. The U.S. Forest Service issued a Wildland Fire Origin and Cause Supplemental Incident Report. The report concluded that a tree coming in contact with a power line is the probable cause of the 2022 Wildfire. The 2020 Wildfires and 2022 Wildfire, together, are referred to as the “Wildfires.”

As of the date of this filing, a significant number of complaints and demands alleging similar claims related to the Wildfires have been filed in Oregon and California, including a class action complaint in Oregon associated with the 2020 Wildfires for which certain jury verdicts were issued as described below. The plaintiffs seek damages for economic losses, noneconomic losses, including mental suffering, emotional distress, personal injury and loss of life, as well as punitive damages, other damages and attorneys’ fees. Several insurance carriers have filed subrogation complaints in Oregon and California with allegations similar to those made in the aforementioned complaints.

Additionally, PacifiCorp received correspondence from the U.S. and Oregon Departments of Justice regarding the potential recovery of certain costs and damages alleged to have occurred on federal and state lands in connection with certain of the Oregon 2020 Wildfires. In December 2024, the United States of America filed a complaint against PacifiCorp in conjunction with the correspondence from the U.S. Department of Justice. The civil cover sheet accompanying the complaint demands damages estimated to exceed $900 million. PacifiCorp is actively cooperating with the U.S. and Oregon Departments of Justice on resolving these alleged claims.

Amounts sought in outstanding complaints and demands filed in Oregon and in certain demands in California approximate $3 billion, excluding any doubling or trebling of damages included in the complaints and the mass complaints described below that seek $48 billion. Generally, the complaints filed in California do not specify damages sought and are excluded from this amount.

Based on available information to date, we believe it is probable that losses will be incurred associated with the Wildfires. Final determinations of liability will only be made following the completion of comprehensive investigations, litigation and similar processes.

On September 30, 2020, a class action complaint against PacifiCorp was filed captioned Jeanyne James et al. v. PacifiCorp et al. (the “James case”), in Oregon Circuit Court in Multnomah County, Oregon (the “Multnomah Court”) in connection with the 2020 Wildfires. In April 2023, a jury trial for the James case with respect to 17 named plaintiffs began in Multnomah Court. In June 2023, the jury issued its verdict finding PacifiCorp liable to the 17 named plaintiffs and to the class with respect to four wildfires. The jury found PacifiCorp’s conduct grossly negligent, reckless and willful as to each plaintiff and the entire class. The jury awarded the 17 named plaintiffs $90 million of damages, including $4 million of economic damages, $68 million of noneconomic damages and $18 million of punitive damages based on a 0.25 multiplier of the economic and noneconomic damages.

In September 2023, the Multnomah Court ordered trial dates for three damages phase trials for the James case, wherein plaintiffs in each of the three damages phase trials would present evidence regarding their damages.

In January 2024, the Multnomah Court entered a limited judgment and money award for the June 2023 James case verdict of $92 million based on the amounts awarded by the jury, as well as doubling of the economic damages and offsetting of insurance proceeds received by plaintiffs. In January 2024, PacifiCorp filed a notice of appeal associated with the June 2023 verdict in the James case, including whether the case can proceed as a class action, and filed a motion to stay further damages phase trials. On February 14, 2024, the Oregon Court of Appeals denied PacifiCorp’s request to stay the damages phase trials. On February 13, 2024, the 17 named plaintiffs filed a notice of cross-appeal as to the January 2024 limited judgment and money award. The appeals process and further actions could take several years.

In January 2024, the jury for the first James case damages phase trial awarded nine plaintiffs $62 million of damages, including $6 million of economic damages and $56 million of noneconomic damages. Subsequently, the Multnomah Court increased the economic damages by $6 million and added $16 million of punitive damages, bringing the aggregate damages awarded to $84 million. In March 2024, the Multnomah Court granted in large part PacifiCorp’s request to offset the damage awards by deducting insurance proceeds received by any of the nine plaintiffs. In April 2024, the Multnomah Court entered a limited judgment and money award of $80 million for the January 2024 James verdict, based on the aggregate damages awarded, offset by insurance proceeds received by plaintiffs.

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Notes to Consolidated Financial Statements

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Contingencies and commitments

In March 2024, the jury for the second James case damages phase trial awarded ten plaintiffs $42 million of damages, including $12 million of doubled economic damages and $30 million of noneconomic and punitive damages. In May 2024, the Multnomah Court granted PacifiCorp’s request to offset the damage awards by deducting insurance proceeds received by any of the ten plaintiffs. In June 2024, the Multnomah Court entered a limited judgment and money award of $38 million for the March 2024 James verdict, based on the aggregate amounts awarded, offset by insurance proceeds received by plaintiffs.

The January, April and June 2024 limited judgments created liens against PacifiCorp, attaching a debt for the money awards. In each instance, PacifiCorp posted a supersedeas bond, which stays any effort to seek payment of the judgment pending final resolution of any appeals. Under ORS 82.010, interest at a rate of 9% per annum will accrue on the judgment commencing at the date the judgment was entered until the entire money award is paid, amended or reversed by an appellate court. PacifiCorp amended its January 2024 appeal of the June 2023 James verdict to include the January 2024 jury verdict and further amended its appeal of the June 2023 verdict to include the March 2024 jury verdict. PacifiCorp’s opening brief is due to be filed with the Oregon Court of Appeals on or before February 25, 2025, in connection with its appeal of the June 2023 James verdict and the January and March 2024 verdicts for the first two James damages phase trials.

In February 2025, the jury for the third James case damages phase trial awarded seven plaintiffs $32 million of noneconomic damages in addition to $4 million of economic damages stipulated for eight plaintiffs prior to the trial. In accordance with Oregon law, plaintiffs asked the court to double the economic damages to $8 million after the verdict. PacifiCorp expects the court will award the doubling of economic damages and also increase the award for $9 million in punitive damages by applying the 0.25 multiplier of economic and noneconomic damages consistent with the June 2023 James verdict. As a result, PacifiCorp expects the total award for the eight plaintiffs to be approximately $49 million. PacifiCorp filed post-trial motions with the Multnomah Court requesting the court offset the damage awards by deducting insurance proceeds received by any of the eight plaintiffs. PacifiCorp intends to appeal the jury’s damage awards associated with the February 2025 jury verdict once judgment is entered.

In March 2024, settlement was reached with five commercial timber plaintiffs in the James case, and the jury trial scheduled for April 2024 was cancelled.

Between April 2024 and January 2025, six separate mass complaints against PacifiCorp naming 1,591 individual class members were filed in the Multnomah Court referencing the James case as the lead case. Complaints for five of the plaintiffs in the mass complaints were subsequently dismissed. These James case mass complaints make damages-only allegations seeking economic, noneconomic and punitive damages, as well as doubling of economic damages. In December 2024, two additional complaints were filed in Multnomah Court on behalf of eight plaintiffs also referencing the James case as the lead case. PacifiCorp believes the magnitude of damages sought by the class members in the James case mass complaints and additional two complaints to be of remote likelihood of being awarded based on the amounts awarded in the jury verdicts described above that are being appealed.

In October 2024, the Multnomah Court issued a case management order, which sets forth nine additional damages phase trials with up to ten plaintiffs per trial. The trials are scheduled to occur throughout 2025, with the verdict for the first trial received in February 2025, as described above.

A provision for a loss contingency is recorded when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. PacifiCorp evaluates the related range of reasonably estimated losses and records a loss based on its best estimate within that range or the lower end of the range if there is no better estimate.

Estimated probable losses associated with the Wildfires were based on the information available to the date of this filing, including (i) ongoing cause and origin investigations; (ii) ongoing settlement and mediation discussions; (iii) other litigation matters and upcoming legal proceedings; and (iv) the status of the James case. Wildfire estimated losses include estimates for fire suppression costs, real and personal property damages, natural resource damages and noneconomic damages such as personal injury damages and loss of life damages that are considered probable of being incurred and that it is able to reasonably estimate at this time, and which is subject to change as additional relevant information becomes available.

Through December 31, 2024, PacifiCorp recorded cumulative estimated probable Wildfire losses, before taxes and expected related insurance recoveries, of approximately $2.75 billion. Wildfire loss accruals were $346 million in 2024, $1.9 billion in 2023 and $225 million in 2022. Insurance recoveries recorded to date in connection with the Wildfires were $530 million, including $253 million in 2023 and $161 million in 2022. No further insurance recoveries are expected to become available. Cumulative Wildfire loss payments through December 31, 2024 were approximately $1.2 billion, of which $533 million was paid in 2024. Estimated unpaid liabilities for the Wildfires were approximately $1.54 billion at December 31, 2024.

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Notes to Consolidated Financial Statements

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Contingencies and commitments

It is reasonably possible PacifiCorp will incur significant additional Wildfire losses beyond the amounts currently accrued; however, it is currently unable to reasonably estimate the range of possible additional losses that could be incurred due to the number of properties and parties involved, including claimants in the class to the James case and the 2022 Wildfire, the variation in the types of properties and damages and the ultimate outcome of legal actions, including mediation, settlement negotiations, jury verdicts and the appeals process.

HomeServices of America, Inc.

HomeServices is currently defending against several antitrust cases, all in federal district courts. In each case, plaintiffs claim HomeServices and certain of its subsidiaries (and in one case BHE) conspired with co-defendants to artificially inflate real estate commissions by following and enforcing multiple listing service (“MLS”) rules that require listing agents to offer a commission split to cooperating agents in order for the property to appear on the MLS (“Cooperative Compensation Rule”). None of the complaints specify damages sought. However, two cases also allege Texas state law deceptive trade practices claims, for which plaintiffs have asserted damages totaling approximately $9 billion by separate written notice as required by Texas law.

In one of these cases, Burnett (formerly Sitzer) et al. v. HomeServices of America, Inc. et al. (the “Burnett case”), a jury trial in the U.S. District Court for the Western District of Missouri commenced on October 16, 2023, and the jury returned a verdict for the plaintiffs on October 31, 2023, finding that the named defendants participated in a conspiracy to follow and enforce the Cooperative Compensation Rule, which conspiracy had the purpose or effect of raising, inflating, or stabilizing broker commission rates paid by home sellers. The jury further found that the class plaintiffs had proved damages in the amount of $1.8 billion. Joint and several liability applies for the co-defendants. Federal law authorizes trebling of damages and the award of pre-judgment interest and attorney fees. To date, all co-defendants have reached settlements with the plaintiffs. The U.S District Court approved certain of these settlements in May 2024, which has been appealed to the U.S. Court of Appeals for the Eighth Circuit.

In April 2024, HomeServices agreed to terms with the plaintiffs to settle all claims asserted against HomeServices and certain of its subsidiaries in the Burnett case to effectuate a nationwide class settlement. The final settlement agreement includes scheduled payments over the next four years aggregating $250 million. HomeServices received final court approval on November 27, 2024, which has been appealed to the U.S. Court of Appeals for the Eighth Circuit. If the settlement is not affirmed by the U.S. Court of Appeals for the Eighth Circuit, HomeServices intends to vigorously appeal on multiple grounds the jury’s findings and damage award in the Burnett case, including whether the case can proceed as a class action. The appeals process and further actions could take several years.

Other legal matters

In September 2024, National Indemnity Company (“NICO”) recorded a pre-tax charge of $490 million in connection with a settlement agreement reached concerning certain non-insurance affiliates that filed voluntary petitions under Chapter 11 of bankruptcy code in the United States Bankruptcy Court for the District of New Jersey (the “Court”) in 2023. Under the terms of the settlement agreement, NICO has agreed to pay $535 million to the bankruptcy estate in consideration of a release of all estate causes of action against NICO and its affiliates. The settlement agreement, which is opposed by certain creditors, is subject to approval by the Court. NICO also accrued a recoverable of $45 million from a third party that is covered under the release, which was received in the fourth quarter.

Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties. We currently believe that liabilities that may arise as a result of such other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.

Commitments

Our subsidiaries regularly make commitments in the ordinary course of business to purchase goods and services in the future, which are not yet reflected in our Consolidated Financial Statements. The most significant of our long-term commitments relate to our railroad, utilities and energy businesses, our shared aircraft ownership and leasing business and certain materials purchase commitments. As of December 31, 2024, estimated future payments under those arrangements over the next five years were as follows: $12 billion in 2025, $6 billion in 2026, $5 billion in 2027, $4 billion in 2028, $3 billion in 2029, and thereafter $28 billion.

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