BERKSHIRE HATHAWAY INC.
NEWS RELEASE
FOR IMMEDIATE RELEASE NOVEMBER 14, 1997
Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries
for the third quarter and first nine months ended September 30, 1997 and
1996 are summarized below. Amounts are stated on an after-tax basis
(dollar amounts are in millions except per share amounts):
Third Quarter First Nine Months
1997 1996 1997 1996
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Earnings from operations . . . . . $248.1 $201.4 $766.1 555.3
Realized investment gain . . . . . 118.5 62.6 162.7 1,568.6
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Net earnings . . . . . . . . . . . $366.6 $264.0 $928.8 $2,123.9
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Average Class A equivalent
shares outstanding. . . . . 1,234,121 1,210,762 1,232,878 1,202,704
Earnings per share:
Earnings from operations . . . . $201 $166 $621 $ 462
Net earnings . . . . . . . . . . $297 $218 $753 $1,766
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There are three principal reasons for the comparative increase in
operating earnings in 1997. First, GEICO's underwriting results continue
to be outstanding. Over the last twelve months, GEICO's voluntary auto
policy growth was 15.6% led by major gains in both standard and non-standard
auto lines. Second, investment income earned by GEICO and Berkshire's other
insurance subsidiaries increased significantly, reflecting increased levels
of invested assets as well as increased amounts of dividend income from
investments in US Airways Cumulative Convertible Preferred Stock. For the
first nine months of 1997, Berkshire received dividends of $72 million
($62 million after-tax), including $47 million applicable to arrearages
existing at December 31, 1996. For the first nine months of 1996, dividends
from the USAirways investment were $26 million ($22 million after-tax).
Finally, 1997's third quarter and first nine months earnings include the
results of FlightSafety which Berkshire acquired at the end of 1996.
The net earnings figures for 1996 are meaningless in evaluating the
Company. 1996's first nine months earnings include $1.6 billion of after-tax
realized investment gains compared to $162.7 million in 1997. 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 1996 reported earnings, it had a very minor impact on Berkshire's
shareholders' equity. Berkshire records its investments at market value
and most of 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.
Berkshire's third quarter interim report to shareholders will be
posted on the Internet on November 15, 1997 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.
Contact: Marc D. Hamburg (402) 346-1400
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