Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the second quarter and six months ended June 30, 2001 and 2000 are summarized below. Amounts are stated on an after-tax basis (dollar amounts are in millions, except per share amounts).

Selected highlights regarding results for the quarter ended June 30, 2001 follow:

• Underwriting results at General Re continue to be very unsatisfactory, deteriorating from the preceding quarter, in part because of the increased amount of catastrophe and other large individual property losses reported in the current quarter. While greater for the quarter, for the first half catastrophe and other large individual property losses were slightly less than last year and not above our long-term expectations. Of more importance, our estimate of the losses we incurred in the 1998 – 2000 period was significantly increased and charged against the current quarter’s earnings. Unfortunately such underreserving leads to inadequate pricing, a problem that has plagued the entire reinsurance industry during the past few years. Prices are now improving but much remains to be done. General Re has the people, the culture and the determination to get the job done.

• Underwriting results at GEICO improved from the preceding quarter. A small underwriting profit was recognized in the second quarter versus a small underwriting loss in the preceding quarter. Tightened underwriting standards and reductions in advertising accompanied by a lower closure ratio has resulted in a slight reduction in policies-in-force at June 30, down 0.8% from December 31, 2000. Premium volume for the first half, however, increased 7.0%. Little change in policies-in-force is expected during the remainder of the year though premium growth should continue due to higher prices.

• Berkshire’s consolidated "float" totaled $30.8 billion at June 30, 2001, up approximately $2.9 billion from year-end 2000. The annualized cost of float for the first half of 2001 was 4.3%, down from 2000’s full year cost of 6.0%, but unexpectedly up from the 3.1% reported for the first quarter. Absent a mega-catastrophe or further adverse loss development at General Re, the full-year cost is likely to decline from its current level.

• Overall our smaller insurance operations produced excellent results and their prospects are favorable. Our non-insurance subsidiaries, in aggregate, performed well considering the backdrop of a deteriorating economy. Because of the multiple acquisitions we have made of various retail, manufacturing and service businesses, this group accounted for the entire gain in second quarter operating earnings reported above.

• Realized investment gain has been a recurring element in Berkshire’s net earnings for many years. The amount may fluctuate significantly from period to period with a meaningful effect on Berkshire’s consolidated net earnings. However, the amount of realized investment gain or loss for any given period has no predictive value or analytical value, in view of the net unrealized price appreciation now existing in Berkshire’s consolidated investment portfolio.

Berkshire’s second quarter interim report to shareholders will be posted on the Internet later today at approximately 6:00 p.m. central time where it can be accessed via www.berkshirehathaway.com.

Berkshire Hathaway and its subsidiaries engage in a number of diverse business activities among which the most important is the property and casualty insurance business conducted on both a direct and reinsurance basis. Common stock of the Company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.

Certain statements contained in this press release are "forward looking" statements within the meaning of the Private Securities Litigation Act of 1995. These statements are not guaranties of future performance and actual results may differ materially from those forecasted.