Berkshire Hathaway issues first ever-negative coupon security

Omaha, Nebraska¾ May 22, 2002¾ Berkshire Hathaway Inc. (NYSE: BRK.A and BRK.B), announced today that it has sold $400 million of a new type of security, named "SQUARZ", in a private placement to qualified institutional investors. The initial purchasers will have an option to purchase an additional $100 million of securities to cover over-allotment. The issuance was upsized from $250 million due to strong market demand. The SQUARZ security, which was created by sole underwriter Goldman, Sachs & Co., is a unit consisting primarily of a Berkshire senior note due in 2007 and a warrant to purchase Berkshire common stock at a premium. The new security is believed to be the first security to carry a negative coupon.

The warrants will give the holder the right to purchase either shares of the Company's class A or class B common stock at the holder’s option. The initial exercise price represents a 15% premium over the closing price of the class A shares on the NYSE on May 21, 2002. The Notes will pay holders a 3.0% interest rate per annum and holders will pay 3.75% installment payments per annum on the warrants. The warrant payments due from holders will be greater than the coupon on the senior notes, effectively making SQUARZ the first negative coupon security. Berkshire Hathaway will use the net proceeds from the issuance for general corporate purposes, including possible acquisitions, none of which are pending.

"Despite the lack of precedent, a negative coupon security seemed possible in the present interest rate environment", said Warren E. Buffett, Chairman of Berkshire Hathaway. Mr. Buffett added, "I asked Goldman Sachs to create such an instrument and they responded promptly with the innovative security being announced today."

The securities have not been registered under the Securities Act of 1933 as amended, will be sold in the United States pursuant to an exemption from the registration requirements of the Securities Act, and may not be re-offered or re-sold in the United States unless they are registered or unless such sale is exempt from registration requirements of the Securities Act.

Berkshire Hathaway Inc. 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.

Cautionary Notice: 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 guarantees of future performance and actual results may differ materially from those forecasted.

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