BERKSHIRE HATHAWAY INC.
FOR IMMEDIATE RELEASE
MAY 15, 1996
Earnings of Berkshire Hathaway Inc. and its consolidated
subsidiaries for the first quarter ended March 31, 1996 and
1995 are summarized below. Amounts are stated on an after-tax
basis (dollar amounts are in millions except per share amounts):
1996 1995 *
Earnings from operations $ 160.2 $ 144.0
Realized investment gain (loss) 1,508.5 (4.8)
Net earnings $1,668.7 $ 139.2
Average shares outstanding 1,193,512 1,177,750
Earnings per share:
Earnings from operations $134 $122
Net earnings $1,398 $118
The net earnings figures for 1996 are meaningless in
evaluating the Company or charting its progress: 1996's first
quarter earnings include $1.5 billion of after-tax realized
investment gains compared to after-tax realized investment
losses of $4.8 million in the comparable prior year period.
Most of 1996's realized gain arose in connection with The Walt
Disney Company's acquisition of Capital Cities/ABC, Inc. While
the realized gain had a material impact on Berkshire's reported
earnings, it had a very minor impact on Berkshire's
shareholders' equity. Berkshire records its investments at
market value and the appreciation in the Capital Cities stock
had been previously reflected as a component of shareholders'
equity in periods prior to 1996's first quarter.
Earnings from operations in 1996 include the results of
GEICO Corporation. As previously announced, on January 2,
1996, Berkshire completed the acquisition of the approximately
49% of GEICO common stock not previously owned. In prior years
Berkshire's investment in GEICO common stock had been carried
at market value. As a result of obtaining control of GEICO in
1996, generally accepted accounting principles currently require
that prior year results be restated to reflect Berkshire's
prior investment in GEICO under the equity method. Accordingly,
the 1995 results have been restated.
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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CONTACT: Marc Hamburg, 402-346-1400