Selected highlights regarding results for the quarter ended September 30, 2000 follow:

• Overall, trends in Berkshire’s insurance business during the third quarter were modestly favorable, though a special reinsurance transaction at General Re obscures this fact. At that company an underwriting loss of $135 million was recorded on a contract that will provide more than commensurate investment benefits in future years. This transaction is comparable to two other contracts that generated losses of $50 million during the second quarter of 2000 and $400 million in 1999 (both recorded at the reinsurance division of National Indemnity). Warren E. Buffett, Berkshire’s chairman stated, "From time to time we will have such transactions in the future and we will post you of their effects upon our current earnings. When priced properly, this pain-today, gain-tomorrow business is welcomed by us and benefits our shareholders."
• Though it has a long way to go, reinsurance pricing has turned upward. Additionally, Berkshire recorded a $1.3 billion increase in float during the quarter, an important element in future performance. None of this gain was due to the transaction described in the previous paragraph; it will be reflected in the fourth quarter. Mr. Buffett added, "From negotiated, but uncompleted, transactions, we expect significant gains in float during the next six months. We also expect underwriting results in traditional reinsurance to improve during the next year, excluding any effects from special reinsurance and also absent the occurrence of a mega catastrophe."

• At GEICO, only a nominal gain in policyholders was experienced during the quarter. Mr. Buffett commented, "The extra dollars we have been spending on advertising this year have not proven effective, as the cost of inquiries has risen and closure rates have moved lower. We expected the former phenomenon, but not the latter. Therefore, we are cutting media budgets somewhat. Nevertheless, our expenditures continue at an extraordinary level compared to others in the industry. We emphasize that advertising is being reduced because we are not getting our money’s worth from the incremental dollars spent rather than to improve profitability, though that will be a result. We are eager to spend additional sums on advertising when conditions favor this action." Rates at GEICO are being increased and it is anticipated that profitability will improve somewhat — though not dramatically — next year.

• Berkshire completed three acquisitions during the third quarter — U.S. Liability, Ben Bridge, and Justin Industries. Since June 30, Berkshire has also agreed to complete three other acquisitions which are expected to close later this year and early in 2001: Homemakers, Shaw Industries and Benjamin Moore Paint. In aggregate these six transactions will cost about $4 billion, about 94% of which will be paid in cash and the remainder in stock.

• 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. 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 third 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.