Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the first quarters ended March 31, 1999 and 1998 are summarized below. Amounts are stated on an after-tax basis (dollar amounts are in millions, except per share amounts).

There are two primary factors which impacted first quarter 1999 earnings from operations. First, 1999's first quarter includes the results of General Re which was acquired by Berkshire on December 21, 1998. General Re's first quarter earnings from operations, before purchase-accounting adjustments of $112 million, were $151 million in 1999 as compared to $250 million in 1998. The comparative decline in earnings from operations of General Re is primarily due to significant underwriting losses in both its International property/casualty business and its life/health business.

Second, GEICO, which had a pre-tax underwriting profit of $61 million in the first quarter of 1998 broke even from underwriting in 1999's first quarter. Such results had been anticipated given the rate reductions taken during the past two years and the increased promotional and other expenses incurred to substantially raise the level of new business. GEICO's business continues to accelerate in all categories of auto insurance-preferred, standard and nonstandard. Over the past twelve months, voluntary policies in force increased 22.5%. GEICO expects the growth to continue in the future and is moving forward with a major expansion of its physical facilities.

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 upon Berkshire's consolidated net earnings. However, the amount of realized investment gain or loss for any given period has no predictive value, and variations in amount from period to period have no practical analytical value, particularly in view of the net unrealized price appreciation now existing in Berkshire's consolidated investment portfolio.

Berkshire's first quarter interim report to shareholders report will be posted on the Internet on May 15, 1999 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.

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