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What changed in Berkshire Hathaway's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Berkshire Hathaway's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+638 added−649 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-27)

Top changes in Berkshire Hathaway's 2023 10-K

638 paragraphs added · 649 removed · 501 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

209 edited+28 added−28 removed147 unchanged
Biggest change(“Borsheims”) operates from a single store in Omaha, Nebraska. Borsheims is a high-volume retailer of fine jewelry, watches, crystal, china, stemware, flatware, gifts and collectibles. Helzberg’s Diamond Shops, LLC. (“Helzberg”) is based in North Kansas City, Missouri, and operates a chain of 170 retail jewelry stores in 34 states, which includes approximately 400,000 square feet of retail space.
Biggest changeStar’s retail facilities currently include about 700,000 square feet of retail space in 10 locations in Texas, including seven in Houston. Other retailing Borsheim Jewelry Company, Inc. (“Borsheims”) operates from a single store in Omaha, Nebraska. Borsheims is a high-volume retailer of fine jewelry, watches, crystal, china, stemware, flatware, gifts and collectibles.
In direct or primary insurance activities, the insurer assumes the risk of loss from persons or organizations that are directly subject to the risks. Such risks may relate to property, casualty (or liability), life, accident, health, financial or other perils that may arise from an insurable event.
In direct or primary insurance activities, the insurer assumes the risk of loss from persons or organizations that are directly subject to the risks. Such risks may relate to property, casualty (or liability), life, accident, health, financial or other perils that arise from an insurable event.
The IAIS is developing capital standards for internationally active insurance groups (the “Insurance Capital Standard”) based on a consolidated group approach and is also evaluating a potentially comparable group capital standard based on the aggregation of regulated entities and their underlying local capital requirements (the “Aggregation Method”).
The IAIS is developing capital standards for internationally active insurance groups (“Insurance Capital Standard”) based on a consolidated group approach and is also evaluating a potentially comparable group capital standard based on the aggregation of regulated entities and their underlying local capital requirements (“Aggregation Method”).
Contracts are primarily in the form of treaties, and to a lesser degree, on a facultative basis. General Re Group conducts business in North America, primarily marketed on a direct basis through General Reinsurance Corporation (“GRC”), which is licensed in the District of Columbia and all states, except Hawaii, where it is an accredited reinsurer.
Contracts are primarily in the form of treaties, and to a lesser degree, on a facultative basis. The General Re Group conducts business in North America, primarily marketed on a direct basis through General Reinsurance Corporation (“GRC”), which is licensed in the District of Columbia and all states, except Hawaii, where it is an accredited reinsurer.
Under federal (in particular, the Comprehensive Environmental Response, Compensation and Liability Act) and state statutes, BNSF may be held jointly and severally liable for cleanup and enforcement costs associated with a particular site without regard to fault or the legality of the original conduct.
Under federal statutes (in particular, the Comprehensive Environmental Response, Compensation and Liability Act) and state statutes, BNSF may be held jointly and severally liable for cleanup and enforcement costs associated with a particular site without regard to fault or the legality of the original conduct.
Historically, state regulatory commissions have established retail electric and natural gas rates on a cost-of-service basis, which are designed to allow a utility the opportunity to recover what each state regulatory commission deems to be the utility’s reasonable costs of providing services, including a fair opportunity to earn a reasonable return on its investments based on its cost of debt and equity.
Historically, state regulatory commissions have established retail electric and natural gas rates on a cost-of-service basis, which are designed to allow a utility the opportunity to recover what each state regulatory commission deems to be the utility’s reasonable costs of providing services, including the opportunity to earn a fair and reasonable return on its investments based on its cost of debt and equity.
JM operates in highly competitive markets, with competitors comprising primarily large global and national manufacturers and smaller regional manufacturers. JM holds leadership positions in the key markets that it serves. JM’s products compete primarily on value, differentiation and customization, breadth of product line, quality and service.
JM operates in highly competitive markets, with competitors comprising primarily of large global and national manufacturers and smaller regional manufacturers. JM holds leadership positions in the key markets that it serves. JM’s products compete primarily on value, differentiation and customization, breadth of product line, quality and service.
MiTek’s primary customers are component manufacturers who manufacture prefabricated roof and floor trusses and wall panels for the residential building market. MiTek also sells construction hardware to commercial distributors and do-it-yourself retail stores. A significant raw material used by MiTek is hot dipped galvanized sheet steel.
MiTek’s primary customers are component manufacturers who manufacture prefabricated roof and floor trusses and wall panels for the residential building market. MiTek also sells construction hardware to commercial distributors and retail stores for do-it-yourself customers. A significant raw material used by MiTek is hot dipped galvanized sheet steel.
Several factors, including long-standing customer relationships, technical expertise, state-of-the-art facilities and dedicated employees, aid PCC in maintaining competitive advantages. Several raw materials used in PCC products, including certain metals such as nickel, titanium, cobalt, tantalum and molybdenum, are found in only a few parts of the world. These metals are required for the alloys used in manufactured products.
Several factors, including long-standing customer relationships, technical expertise, state-of-the-art facilities and dedicated employees, aid PCC in maintaining competitive advantages. Several raw materials used in PCC products, including certain metals such as nickel, titanium, cobalt, tantalum, hafnium and molybdenum, are found in only a few parts of the world. These metals are required for the alloys used in manufactured products.
Contracts are written on both a treaty and facultative basis to insurance and other reinsurance companies in the U.S. and in foreign markets through subsidiaries and branches in numerous countries. Business is written primarily through brokers, and to a lesser extent on a direct basis. Life/health The General Re Group conducts a global life and health reinsurance business.
Contracts are written on both a treaty and facultative basis to insurance and other reinsurance companies in the U.S. and in foreign markets through subsidiaries and branches in numerous countries. Business is written primarily through brokers, and to a lesser extent on a direct basis. Life/health The General Re Group also conducts a global life and health reinsurance business.
With its considerable patent portfolio, Lubrizol uses its technological leadership position and applies its science capabilities, formulation know-how and market expertise in product development to improve the demand, quality and value of its solutions. Lubrizol also leverages its scientific and applications knowledge to meet and exceed customer performance and sustainability requirements.
With its considerable patent portfolio, Lubrizol uses its technological leadership position and applies its scientific capabilities, formulation know-how and market expertise in product development to improve the demand, quality and value of its solutions. Lubrizol also leverages its scientific and applications knowledge to meet and exceed customer performance and sustainability requirements.
These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance. Certain assets (such as petroleum tanks, dispensers, and disposal wells) impose retirement obligations.
These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance. Certain assets (such as petroleum tanks, dispensers, and disposal wells) impose asset retirement obligations.
The building products group produces prefabricated and site-built residential homes, flooring products, insulation, roofing and engineered products, building and engineered components, paint and coatings and bricks and masonry products. The consumer products group manufactures and distributes recreational vehicles, batteries, and various apparel, footwear and other products. Information concerning the major activities of these three groups follows.
The building products group produces prefabricated and site-built residential homes, flooring products, insulation, roofing and engineered products, building and engineered components, paint and coatings and bricks and masonry products. The consumer products group manufactures and/or distributes recreational vehicles, batteries, and various apparel, footwear and other products. Information concerning the major activities of these three groups follows.
Treaty reinsurance refers to reinsurance coverage for all or a portion of a specified group or class of risks ceded by a direct insurer or reinsurer, while facultative reinsurance involves coverage of specific individual underlying risks. Reinsurance contracts are further classified as quota-share or excess.
Reinsurance contracts are normally classified as treaty or facultative contracts. Treaty reinsurance refers to reinsurance coverage for all or a portion of a specified group or class of risks ceded by a direct insurer or reinsurer, while facultative reinsurance involves coverage of specific individual underlying risks. Reinsurance contracts are further classified as quota-share or excess.
NFM is the largest furniture retailer in each of these markets. R.C. Willey, based in Salt Lake City, Utah, currently operates ten full-line retail home furnishings stores and three distribution centers.
NFM is the largest home furnishings retailer in each of these markets. R.C. Willey, based in Salt Lake City, Utah, currently operates ten full-line retail home furnishings stores and three distribution centers.
Berkshire’s corporate senior management team participates in and is ultimately responsible for significant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of the operating businesses.
Berkshire’s senior management team participates in and is ultimately responsible for significant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of the operating businesses.
K- 11 PCC has several significant customers, including aerospace original equipment manufacturers (“OEMs”) (Boeing and Airbus) and aircraft engine manufacturer suppliers (General Electric, Rolls Royce and Pratt &Whitney). The majority of PCC’s sales are from customer orders or demand schedules pursuant to long-term agreements. Contractual terms may provide for termination by the customer, subject to payment for work performed.
PCC has several significant customers, including aerospace original equipment manufacturers (“OEMs”) (Boeing and Airbus) and aircraft engine manufacturer suppliers (General Electric, Rolls Royce and Pratt &Whitney). The majority of PCC’s sales are from customer orders or demand schedules pursuant to long-term agreements. Contractual terms may provide for termination by the customer, subject to payment for work performed.
BNSF may also be subject to claims by third parties for investigation, cleanup, restoration or other environmental costs under environmental statutes or common law with respect to properties they own that have been impacted by BNSF operations. Consumption of diesel fuel by locomotives accounted for approximately 80% of BNSF’s greenhouse gas (“GHG”) emissions in its baseline year of 2018.
BNSF may also be subject to claims by third parties for investigation, cleanup, restoration or other environmental costs under environmental statutes or common law with respect to properties they own that have been impacted by BNSF operations. Consumption of diesel fuel by locomotives accounted for approximately 80% of BNSF Railway’s greenhouse gas (“GHG”) emissions in its baseline year of 2018.
Union Tank Car Company (“UTLX”) is the largest component of the Rail & Leasing group and is a leading designer, builder and full-service lessor of railroad tank cars and other specialized railcars. Together with its Canadian affiliate Procor, UTLX owns a fleet of approximately 120,000 railcars for lease to customers in chemical, petrochemical, energy and agricultural/food industries.
Union Tank Car Company (“UTLX”) is the largest component of the Rail & Leasing group and is a leading designer, builder and full-service lessor of railroad tank cars and other specialized railcars. Together with its Canadian affiliate Procor, UTLX owns a fleet of approximately 119,000 railcars for lease to customers in chemical, petrochemical, energy and agricultural/food industries.
K- 15 Historically, access to key housing inputs such as lumber, steel and resin products has been adequate. During 2021 and the first half of 2022, the availability and pricing of these and other inputs was volatile. Input shortages coupled with reduced labor and subcontractor availability increased the time needed to construct a home, increasing the levels of work-in-process inventory.
Historically, access to key housing inputs such as lumber, steel and resin products has been adequate. During 2021 and the first half of 2022, the availability and pricing of these and other inputs was volatile. Input shortages coupled with reduced labor and subcontractor availability increased the time needed to construct a home, increasing the levels of work-in-process inventory.
The materials that Lubrizol chooses to purchase from a single source typically are subject to long-term supply contracts to ensure supply reliability. K- 12 Lubrizol operates its business on a global basis through more than 100 offices, laboratories, production facilities and warehouses on six continents, the most significant of which are North America, Europe, Asia and South America.
The materials that Lubrizol chooses to purchase from a single source typically are subject to long-term supply contracts to ensure supply reliability. Lubrizol operates its business on a global basis through more than 100 offices, laboratories, production facilities and warehouses on six continents, the most significant of which are North America, Europe, Asia and South America.
Other services XTRA Corporation (“XTRA”), headquartered in St. Louis, Missouri, is a leading transportation equipment lessor operating under the XTRA Lease® brand name. XTRA manages a diverse fleet of approximately 89,000 units located at 47 facilities throughout the U.S. The fleet includes over-the-road and storage trailers, chassis, temperature-controlled vans and flatbed trailers.
Other services XTRA Corporation (“XTRA”), headquartered in St. Louis, Missouri, is a leading transportation equipment lessor operating under the XTRA Lease® brand name. XTRA manages a diverse fleet of approximately 90,000 units located at 47 facilities throughout the U.S. The fleet includes over-the-road and storage trailers, chassis, temperature-controlled vans and flatbed trailers.
Each business unit is a manufacturer and/or distributor of precious metal, non-precious metal, diamond and gem products to specific target markets including large jewelry chains, department stores, shopping networks, mass merchandisers, e-commerce retailers and artisans as well as certain global manufacturers and wholesalers in the medical, electronics and aerospace industries.
Each business unit is a manufacturer and/or distributor of precious metal, non-precious metal, diamond and gem products to specific target markets, including large jewelry chains, department stores, shopping networks, mass merchandisers, e-commerce retailers and artisans as well as certain global manufacturers and wholesalers in the medical, electronics and aerospace industries. Albecca Inc.
K- 22 NFM operates its business from four retail complexes with almost 4.5 million square feet of retail, warehouse and administrative facilities located in Omaha, Nebraska, Clive, Iowa, Kansas City, Kansas and The Colony, Texas. NFM also owns Homemakers Furniture located in Urbandale, Iowa, which has approximately 600,000 square feet of retail, warehouse and administrative space.
NFM operates its business from four retail complexes with almost 4.5 million square feet of retail, warehouse and administrative facilities located in Omaha, Nebraska, Clive, Iowa, Kansas City, Kansas and The Colony, Texas. NFM also owns Homemakers Furniture located in Urbandale, Iowa, which has approximately 600,000 square feet of retail, warehouse and administrative space.
K- 14 Crane Services is a provider of mobile cranes and operators in North America and Australia with a combined fleet of approximately 1,100 cranes, primarily serving the energy, mining, petrochemical and infrastructure markets. Cranes are leased on either a fully operated and maintained service basis or on an equipment-only basis.
Crane Services is a provider of mobile cranes and operators in North America and Australia with a combined fleet of approximately 1,100 cranes, primarily serving the energy, mining, petrochemical and infrastructure markets. Cranes are leased on either a fully operated and maintained service basis or on an equipment-only basis.
USLI companies also underwrite and market a wide variety of specialty insurance products. USLI is based in Wayne, Pennsylvania. Berkshire Hathaway GUARD Insurance Companies (“GUARD”) is a group of five insurance companies that provide a full suite of commercial insurance products, as well as homeowners policies to over 350,000 small to mid-sized businesses and homeowners.
USLI companies also underwrite and market a wide variety of specialty insurance products. USLI is based in Wayne, Pennsylvania. Berkshire Hathaway GUARD Insurance Companies (“GUARD”) is a group of five insurance companies that provide a full suite of commercial insurance products, as well as homeowners policies to over 450,000 small to mid-sized businesses and homeowners.
Lubrizol markets its products worldwide through direct sales, sales agents and distributors. Lubrizol’s customers principally consist of major global and regional oil companies and industrial and consumer products companies. Some of Lubrizol’s largest customers also may be suppliers. During 2022, no single customer accounted for more than 10% of Lubrizol’s consolidated revenues.
Lubrizol markets its products worldwide through direct sales, sales agents and distributors. Lubrizol’s customers principally consist of major global and regional oil companies and industrial and consumer products companies. Some of Lubrizol’s largest customers also may be suppliers. During 2023, no single customer accounted for more than 10% of Lubrizol’s consolidated revenues.
MiTek operates worldwide with sales in over 100 countries and with manufacturing facilities and/or sales/engineering offices located in 20 countries. In the residential building market, MiTek is a leading supplier of engineered connector products, construction hardware, engineering software and services, and computer-driven manufacturing machinery to the truss component market of the building components industry.
MiTek operates worldwide with sales in over 60 countries and with manufacturing facilities and/or sales/engineering offices located in 20 countries. In the residential building market, MiTek is a leading supplier of engineered connector products, construction hardware, engineering software and services, and computer-driven manufacturing machinery to the truss component market of the building components industry.
Garan Incorporated (“Garan”), headquartered in New York, New York designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademarks Garanimals® and 365 Kids from Garanimals® and easy-peasy®, as well as customer private label brands.
K- 19 Garan Incorporated (“Garan”), headquartered in New York, New York, designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademarks Garanimals® and 365 Kids from Garanimals® and easy-peasy®, as well as customer private label brands.
GRC also conducts operations in North America through 11 branch offices in the U.S. and Canada. In North America, the General Re Group includes General Star National Insurance Company, General Star Indemnity Company and Genesis Insurance Company, which offer a broad array of specialty and surplus lines and property, casualty and professional liability coverages.
GRC also conducts operations in North America through numerous branch offices in the U.S. and Canada. In North America, the General Re Group includes General Star National Insurance Company, General Star Indemnity Company and Genesis Insurance Company, which offer a broad array of specialty and surplus lines and property, casualty and professional liability coverages.
IMC production facilities are built with the highest standards and follow all applicable regulations. K- 13 Marmon Marmon Holdings, Inc. (“Marmon”), headquartered in Chicago, Illinois, is a global industrial organization comprising eleven diverse business groups and more than 100 autonomous manufacturing and service businesses.
IMC production facilities are built with the highest standards and follow all applicable regulations. Marmon Marmon Holdings, Inc. (“Marmon”), headquartered in Chicago, Illinois, is a global industrial organization comprising eleven diverse business groups and more than 100 autonomous manufacturing and service businesses.
Plumbing & Refrigeration supplies copper tubing and copper, brass, aluminum and stainless-steel fittings and components for the plumbing, heating, ventilation and air conditioning (HVAC) and refrigeration markets; custom coils, ducting, air handling units and heat pipe for the HVAC market; HVAC systems and structures for military, nuclear and medical markets and aluminum and brass forgings for many commercial and industrial applications.
K- 14 Plumbing & Refrigeration supplies copper tubing and copper, brass, aluminum and stainless-steel fittings and components for the plumbing, heating, ventilation and air conditioning (HVAC) and refrigeration markets; custom coils, ducting, air handling units and heat pipe for the HVAC market; HVAC systems and structures for military, nuclear and medical markets and aluminum and brass forgings for many commercial and industrial applications.
Forest River is a member of the Recreational Vehicle Industry Association, a voluntary association of RV manufacturers which promotes safety standards for RVs. Forest River believes its products comply in all material respects with the standards that govern its products. K- 18 Apparel and footwear Fruit of the Loom Inc.
Forest River is a member of the Recreational Vehicle Industry Association, a voluntary association of RV manufacturers which promotes safety standards for RVs. Forest River believes its products comply in all material respects with the standards that govern its products. Apparel and footwear Fruit of the Loom, Inc.
Nevertheless, this business is written, in part, because of the large amounts of policyholder funds generated for investment, the economic benefit of which will be reflected through investment results in future periods. Periodic payment annuity BHLN writes periodic payment annuity insurance policies and reinsures annuity-like obligations.
Nevertheless, this business is written, in part, because of the large amounts of policyholder funds generated for investment, the economic benefit of which is reflected through investment results in future periods. Periodic payment annuity BHLN writes periodic payment annuity insurance policies and reinsures annuity-like obligations.
The industry has consolidated over the past several years and is currently concentrated in a few companies, the largest of which had a market share of approximately 42% based on industry data as of September 2022. Forest River held a market share of approximately 33% at that time.
The industry has consolidated over the past several years and is currently concentrated in a few companies, the largest of which had a market share of approximately 42% based on industry data as of September 2023. Forest River held a market share of approximately 33% at that time.
EXSIF is a leading international lessor of intermodal tank containers with a fleet of approximately 74,000 units, primarily serving chemical producers and logistics operators. In May 2022, EXSIF exited its Russia business, which resulted in the sale of approximately 7,300 intermodal tank containers.
EXSIF is a leading international lessor of intermodal tank containers with a fleet of approximately 75,000 units, primarily serving chemical producers and logistics operators. In May 2022, EXSIF exited its Russia business, which resulted in the sale of approximately 7,300 intermodal tank containers.
Berkshire’s consolidated U.S. workforce demographics, based on U.S. Equal Employment Opportunity Commission guidelines, are available on its website ( https://www.berkshirehathaway.com) , under sustainability. Insurance and Reinsurance Businesses Berkshire’s insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance subsidiaries.
Berkshire’s combined U.S. workforce demographics, based on U.S. Equal Employment Opportunity Commission guidelines, are available on its website ( https://www.berkshirehathaway.com) , under sustainability. Insurance and Reinsurance Businesses Berkshire’s insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance subsidiaries.
The agreement was renewed, and extended, effective January 1, 2023, with an expiration of December 31, 2029. IAG is a multi-line insurer in Australia, New Zealand and other Asia-Pacific countries. The General Re Group conducts a global property and casualty reinsurance business. Reinsurance contracts are written on both a quota-share and excess basis for multiple lines of business.
This quota-share agreement was renewed and extended effective January 1, 2023, with an expiration of December 31, 2029. IAG is a multi-line insurer in Australia, New Zealand and other Asia-Pacific countries. The General Re Group includes a global property and casualty reinsurance business. Reinsurance contracts are written on both a quota-share and excess basis for multiple lines of business.
Coverages under such contracts are provided on an excess basis (above a stated retention) or for losses payable after the inception of the contract with no additional ceding company retention. Contracts are normally subject to aggregate limits of indemnification, which can be exceptionally large in amount. Significant amounts of asbestos, environmental and latent injury claims may arise under these contracts.
Coverage under such contracts is provided on an excess basis (above a stated retention) or for losses payable after the inception of the contract with no additional ceding company retention. Contracts are normally subject to aggregate limits of indemnification, which can be exceptionally large in amount. Significant amounts of asbestos, environmental and latent injury claims may arise under these contracts.
TRIA currently also excludes certain forms of direct insurance (such as personal and commercial auto, burglary, theft, surety and certain professional liability lines). Reinsurers are not required to offer terrorism coverage and are not eligible for federal reinsurance of terrorism losses.
TRIA excludes certain forms of direct insurance, such as personal and commercial auto, burglary, theft, surety and certain professional liability lines. Reinsurers are not required to offer terrorism coverage and are not eligible for federal reinsurance of terrorism losses.
Northern Natural, based in Nebraska, operates the largest interstate natural gas pipeline system in the U.S., as measured by pipeline miles, reaching from west Texas to Michigan’s Upper Peninsula. Northern Natural’s pipeline system consists of approximately 14,400 miles of natural gas pipelines.
Northern Natural, based in Nebraska, operates the largest interstate natural gas pipeline system in the U.S., as measured by pipeline miles, reaching from west Texas to Michigan’s Upper Peninsula. Northern Natural’s pipeline system consists of approximately 14,200 miles of natural gas pipelines.
Additional information with respect to Berkshire’s businesses Revenue, earnings before taxes and identifiable assets attributable to Berkshire’s reportable business segments are included in Note 25 to Berkshire’s Consolidated Financial Statements contained in Item 8, Financial Statements and Supplementary Data.
Additional information with respect to Berkshire’s businesses Revenue, earnings before taxes and identifiable assets attributable to Berkshire’s reportable business segments are included in Note 26 to Berkshire’s Consolidated Financial Statements contained in Item 8, Financial Statements and Supplementary Data.
No single segment of the economy dominates the combined service territory, which helps mitigate PacifiCorp’s exposure to economic fluctuations. In addition to retail sales, PacifiCorp sells electricity on a wholesale basis.
No single segment of the economy dominates the combined service territory, which helps mitigate PacifiCorp’s exposure to economic fluctuations. In addition to retail sales, PacifiCorp buys and sells electricity on a wholesale basis.
BNSF’s financial performance is influenced by, among other things, general and industry economic conditions at the international, national and regional levels. BNSF’s primary routes, including trackage rights, allow it to access major cities and ports in the western and southern U.S. as well as parts of Canada and Mexico.
BNSF’s financial performance is influenced by, among other things, general and industry economic conditions at the international, national and regional levels. BNSF Railway’s primary routes, including trackage rights, allow it to access major cities and certain ports in the western and southern U.S. as well as parts of Canada and Mexico.
Willey sell a full line of major household appliances, electronics, computers and other home furnishings and offer customer financing to complement their retail operations. An important feature of each of these businesses is their ability to control costs and to produce high business volume by offering significant value to their customers.
Willey sell a full line of major household appliances, electronics, floor coverings, and other home furnishings and offer customer financing to complement their retail operations. An important feature of each of these businesses is their ability to control costs and to produce high business volume by offering significant value to their customers.
U.S. state regulators require insurance groups to file an annual report and an Own Risk Solvency Assessment or ORSA, with the group’s lead supervisor. The NAIC recently adopted a group capital calculation based on methodology similar to the Aggregation Method, which leverages the NAIC’s existing Risk Based Capital standards.
U.S. state regulators require insurance groups to file an annual report and an Own Risk Solvency Assessment or ORSA, with the group’s lead supervisor. The NAIC adopted a group capital calculation based on methodology similar to the Aggregation Method, which leverages the NAIC’s existing risk based capital calculation methods.
Marmon’s manufacturing and service operations are conducted at approximately 400 manufacturing, distribution and service facilities located primarily in the U.S., as well as 18 other countries worldwide. Marmon’s business groups are as follows.
Marmon’s manufacturing and service operations are conducted at approximately 400 manufacturing, distribution and service facilities located primarily in the U.S., as well as 16 other countries worldwide. Marmon’s business groups are as follows.
CTB manufactures its products primarily from galvanized steel, steel wire, stainless steel and polymer materials. The availability of these materials in recent years has been adequate. LiquidPower Specialty Products Inc.
CTB manufactures its products primarily from galvanized steel, steel wire, stainless steel and polymer materials. The availability of these materials in recent years has been adequate. K- 15 LiquidPower Specialty Products Inc.
BHE and its subsidiaries, also own interests in independent power projects having approximately 6,000 net megawatts of generation capacity that are in service in California, Texas, Illinois, Nebraska, Montana, Australia, New York, Arizona, Canada, Minnesota, Kansas, Iowa and Hawaii. These independent power projects sell power generated primarily from wind, solar, geothermal and hydro sources under long-term contracts.
BHE and its subsidiaries, also own interests in independent power projects having approximately 5,900 net megawatts of generation capacity that are in service in California, Texas, Illinois, Nebraska, Montana, Australia, New York, Arizona, Canada, Minnesota, Kansas, Iowa and Hawaii. These independent power projects sell power generated primarily from wind, solar, geothermal and hydro sources under long-term contracts.
NetJets’ shared aircraft ownership programs permit customers to acquire a specific percentage of a certain aircraft type and allows customers to utilize the aircraft for a specified number of flight hours annually.
NetJets’ shared aircraft ownership programs permit customers to acquire a specific percentage of a certain aircraft type and allow customers to utilize the aircraft for a specified number of flight hours annually.
The Berkshire Hathaway Homestate Companies (“BHHC”) is a group of insurers offering workers’ compensation, commercial automobile and commercial property coverages to a diverse client base.
The Berkshire Hathaway Homestate Companies (“BHHC”) are a group of insurers offering workers’ compensation, commercial automobile and commercial property coverages to a diverse client base.
K- 6 In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the U.S., BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Freight revenues are covered by contractual agreements of varying durations or common carrier published prices or company quotations.
In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and certain ports of the U.S., BNSF Railway transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Freight revenues are covered by contractual agreements of varying durations or common carrier published prices or company quotations.
Retail Solutions provides retail environment design services; in-store digital merchandising, dispensing and display fixtures; shopping, material handling and security carts. Operations and business are conducted in the U.S., the U.K. and Czech Republic. Metal Services provides specialty metal pipe, tubing and related value-added services to customers across a broad range of industries.
Retail Solutions provides retail environment design services; in-store digital merchandising, dispensing and display fixtures; shopping, material handling and security carts. Operations and business are conducted in the U.S., the U.K. and Czech Republic. Metal Services provides specialty metal pipe, tubing and related value-added services to customers across a broad range of industries including aerospace, construction and agricultural.
U.S. state regulators have formed supervisory colleges intended to promote communication and cooperation amongst the various domestic and international insurance regulators. The Nebraska Department of Insurance acts as the lead supervisor for our group of insurance companies and chairs the Berkshire supervisory college.
U.S. state regulators have formed supervisory colleges intended to promote communication and cooperation amongst the various domestic and international insurance regulators. The Nebraska Department of Insurance acts as the lead supervisor for Berkshire’s insurance companies and chairs the Berkshire supervisory college.
HomeServices’ principal sources of revenue are dependent on residential real estate sales, which are generally higher in the second and third quarters of each year. This business is highly competitive and subject to general real estate market conditions.
HomeServices’ principal sources of revenue are dependent on residential real estate transaction volumes, which are generally higher in the second and third quarters of each year. This business is highly competitive and subject to general real estate market conditions.
BHE’s domestic regulated energy interests are comprised of four regulated U.S. utility companies (collectively, “U.S. utilities”) serving approximately 5.2 million retail customers and five U.S. interstate natural gas pipeline companies with approximately 21,200 miles of operated pipeline having a design capacity of approximately 21 billion cubic feet of natural gas per day.
BHE’s domestic regulated energy interests are comprised of four regulated U.S. utility companies (collectively, “U.S. utilities”) serving approximately 5.3 million retail customers and five U.S. interstate natural gas pipeline companies with approximately 21,000 miles of operated pipeline having a design capacity of approximately 21 billion cubic feet of natural gas per day.
McLane’s grocery distribution unit, based in Temple, Texas, maintains a dominant market share within the convenience store industry and serves most of the national convenience store chains and major oil company retail outlets. Grocery operations provide products to approximately 48,500 retail locations nationwide. McLane’s grocery distribution unit operates 25 distribution facilities in 20 states.
McLane’s grocery distribution unit, based in Temple, Texas, maintains a dominant market share within the convenience store industry and serves most of the national convenience store chains and major oil company retail outlets. Grocery operations provide products to approximately 47,500 retail locations nationwide. McLane’s grocery distribution unit operates 26 distribution facilities in 20 states.
These constraints began to lessen in the latter half of 2022 due to improved availability and pricing of key inputs, increased order cancellations and lower overall demand for new home construction. Clayton’s building products business has benefited in recent years from the low interest rate environment.
These constraints began to lessen in the latter half of 2022 due to improved availability and pricing of key inputs, increased order cancellations and lower overall demand for new home construction. Clayton’s building products business benefited in recent years from the low interest rate environment and the strong residential construction market.
Duracell manufactures batteries in the U.S., Europe and China and provides a network of worldwide sales and distribution centers. Duracell sells its products to a diverse group of retailers and distributors across the globe. There are several competitors in the battery manufacturing market with Duracell holding an approximately 29% market share of the global alkaline battery market.
Duracell manufactures batteries in the U.S., Europe and China and provides a network of worldwide sales and distribution centers. Duracell sells its products to a diverse group of retailers and distributors across the globe. There are several competitors in the battery manufacturing market with Duracell holding a 31% market share of the global alkaline battery market.
Industrial Products supplies construction fasteners; masonry and stone anchoring systems used in commercial construction; two component polymer products for anchoring, bonding and repair applications, gloves and other protective wear; gear drives, gearboxes, fan and pump drives for various markets; wind machines for agricultural use; wheels, axles and gears for rail, mining and other applications; lighting products for industrial and mining; and equipment for the manufacture and assembly of lead acid batteries.
Industrial Products supplies construction fasteners; masonry and stone anchoring systems used in commercial construction; two component polymer products for anchoring, bonding and repair applications, gloves and other protective wear; gear drives, gearboxes, fan and pump drives for various markets; wind machines for agricultural use; wheels, axles and gears for rail, mining and other applications; lighting products for industrial and mining; and equipment for the manufacture and assembly of lead acid batteries; and the manufacturing and installation of after life service products.
However, an insurer’s state of domicile has ultimate authority over these matters. In addition to its activities relating to the annual statement, the NAIC develops or adopts statutory accounting principles, model laws, regulations and programs for use by its members. Such matters deal with regulatory oversight of solvency, risk management, compliance with financial regulation standards and risk-based capital reporting requirements.
However, an insurer’s state of domicile has ultimate authority over these matters. In addition, the NAIC develops or adopts statutory accounting principles, model laws, regulations and programs for use by its members. Such matters deal with regulatory oversight of solvency, risk management, compliance with financial regulation standards and risk-based capital reporting requirements.
TTI services a variety of industries including telecommunications, medical devices, computers and office equipment, military/aerospace, automotive and industrial electronics. TTI’s core customers include businesses in the design through production stages in the electronic component supply chain, which supports its high-volume business, and its Mouser subsidiary, which supports a broader base of customers with lower volume purchases through internet-based marketing.
K- 21 TTI services a variety of industries including telecommunications, medical devices, computers and office equipment, military/aerospace, automotive and industrial electronics. TTI’s core businesses serve customers in the design through production stages in the electronic component supply chain, which supports high-volume customers. Its Mouser subsidiary supports a broader base of customers with lower volume purchases through internet-based marketing.
K- 19 Richline Group, Inc., headquartered in New York, New York, operates five strategic business units: Richline Jewelry, Richline Digital, LeachGarner, Rio Grande and Inverness.
Richline Group, Inc., headquartered in New York, New York, operates five strategic business units: Richline Jewelry, Richline Digital, LeachGarner, Rio Grande and Inverness.
Underwriting profit is defined as earned premiums less associated incurred losses, loss adjustment expenses and underwriting and policy acquisition expenses. Underwriting profit does not include income earned from investments. Additional information related to each of Berkshire’s underwriting groups follows. K- 3 GEICO —GEICO is headquartered in Chevy Chase, Maryland.
Underwriting profit is defined as earned premiums less incurred losses, loss adjustment expenses and policy acquisition and other underwriting expenses. Underwriting profit does not include income earned from investments. Additional information related to each of Berkshire’s underwriting groups follows. GEICO —GEICO is headquartered in Chevy Chase, Maryland.
Rail operations are subject to the regulatory jurisdiction of the Surface Transportation Board (“STB”), the Federal Railroad Administration of the United States Department of Transportation (“DOT”), the Occupational Safety and Health Administration (“OSHA”), the Environmental Protection Agency (“EPA”), as well as other federal and state regulatory agencies and Canadian regulatory agencies for operations in Canada.
Rail operations are subject to the regulatory jurisdiction of the Surface Transportation Board (“STB”), the Federal Railroad Administration of the U.S. Department of Transportation (“DOT”), the Occupational Safety and Health Administration (“OSHA”), the Environmental Protection Agency (“EPA”), as well as other federal and state regulatory agencies and Canadian regulatory agencies for operations in Canada.
Benjamin Moore also allows customers to directly order coatings or color samples online or, for national accounts and government agencies, via its customer information center, for delivery to the customer or a retailer near the customer. K- 17 Benjamin Moore competes with numerous manufacturers, distributors and paint, coatings and related products retailers.
Benjamin Moore also allows customers to directly order coatings or color samples online or, for national accounts via its customer information center, for delivery to the customer or a retailer near the customer. Benjamin Moore competes with numerous manufacturers, distributors and paint, coatings and related products retailers.
International Dairy Queen Inc. develops and services a worldwide system of over 7,000 franchised restaurants operating primarily under the names DQ Grill and Chill®, Dairy Queen® and Orange Julius® that offer various dairy desserts, beverages, prepared foods and blended fruit drinks. Business Wire Inc.
International Dairy Queen Inc. develops and services a worldwide system of approximately 7,500 franchised restaurants operating primarily under the names DQ Grill and Chill®, Dairy Queen®, DQ® and Orange Julius® that offer various dairy desserts, beverages, prepared foods and blended fruit drinks. Business Wire Inc.
Given the pricing transparency available via the Internet, and the fact that franchised dealers acquire vehicles from the manufacturers on the same terms irrespective of volume, the location and quality of the dealership facility, customer service and transaction speed are key differentiators in attracting customers. BHA’s overall relationships with the automobile manufacturers are governed by framework agreements.
Given the retail price transparency available via the Internet, and the fact that franchised dealers acquire vehicles from the manufacturers on the same terms irrespective of volume, the location and quality of the dealership facility, customer service and transaction speed are key differentiators in attracting customers. K- 22 BHA’s overall relationships with the automobile manufacturers are governed by framework agreements.
Berkshire Hathaway Reinsurance Group —Berkshire’s combined global reinsurance business, referred to as the Berkshire Hathaway Reinsurance Group (“BHRG”), offers a wide range of coverages on property, casualty, life and health risks to insurers and reinsurers worldwide. BHRG conducts business activities in 27 countries.
K- 4 Berkshire Hathaway Reinsurance Group —Berkshire’s combined global reinsurance business, referred to as the Berkshire Hathaway Reinsurance Group (“BHRG”), offers a wide range of coverages on property, casualty, life and health risks to insurers and reinsurers worldwide. BHRG conducts business activities in 26 countries.
McLane’s foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service and casual dining restaurant industry with high quality, timely-delivered products. Operations are conducted through 47 facilities in 22 states. The foodservice distribution unit services approximately 33,600 restaurants nationwide. Through its subsidiaries, McLane also operates wholesale distributors of distilled spirits, wine and beer.
K- 20 McLane’s foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service and casual dining restaurant industry with high quality, timely-delivered products. Operations are conducted through 47 facilities in 22 states. The foodservice distribution unit services approximately 32,700 restaurants nationwide. Through its subsidiaries, McLane also operates wholesale distributors of distilled spirits, wine and beer.
Under the Program, the deductible is 20% of the aggregate direct subject earned premium for relevant commercial lines of business in the immediately preceding calendar year. The aggregate deductible in 2023 for Berkshire’s insurance group is expected to approximate $2.25 billion.
Under the Program, the deductible is 20% of the aggregate direct subject earned premium for relevant commercial lines of business in the immediately preceding calendar year. The aggregate deductible for Berkshire’s insurance group is expected to approximate $2.5 billion in 2024.
Key elements of the MACT Rule include emission limits established for certain hazardous air pollutants and acidic gases. Acme’s brick plants are in compliance with the current Rule. Consumer Products Recreational vehicles Forest River, Inc.
Key elements of the MACT Rule include emission limits established for certain hazardous air pollutants and acidic gases. Acme’s brick plants comply with the current Rule. Consumer Products Recreational vehicles Forest River, Inc.
Berkshire’s manufacturing businesses employed approximately 191,000 people at the end of 2022. Industrial products Precision Castparts Precision Castparts Corp. (“PCC”), based in Lake Oswego, Oregon, manufactures complex metal components and products, provides high-quality investment castings, forgings, fasteners/fastener systems and aerostructures for critical aerospace and power and energy applications.
Berkshire’s manufacturing businesses employed approximately 184,000 people at the end of 2023. K- 11 Industrial products Precision Castparts Precision Castparts Corp. (“PCC”), based in Lake Oswego, Oregon, manufactures complex metal components and products, provides high-quality investment castings, forgings, fasteners/fastener systems and aerostructures for critical aerospace and power and energy applications.
The beverage unit operates as Empire Distributors and operations are conducted through 14 distribution centers in Georgia, North Carolina, Tennessee and Colorado. Empire Distributors services approximately 27,600 retail locations in the southeastern U.S. and Colorado. FlightSafety FlightSafety International Inc. (“FlightSafety”) is an industry leading provider of professional aviation training services and flight simulation products.
The beverage unit operates as Empire Distributors, with operations conducted through 14 distribution centers in Georgia, North Carolina, Tennessee and Colorado. Empire Distributors services approximately 29,200 retail locations in the southeastern U.S. and Colorado. FlightSafety FlightSafety International Inc. (“FlightSafety”) is an industry leading provider of professional aviation training services and flight simulation products.
Operations are based in the U.S., Canada and Mexico and business is conducted primarily in those countries. Electrical produces electrical wire for use in residential and commercial buildings, and specialty wire and cable for use in energy, transit, aerospace, defense, communication and other industrial applications. Operations are based in the U.S., Canada, India and England.
Operations are based in the U.S., India, Poland, Singapore, the U.K., Netherlands, Canada and Mexico and business is conducted primarily in those countries. Electrical produces electrical wire for use in residential and commercial buildings, and specialty wire and cable for use in energy, transit, aerospace, defense, communication and other industrial applications.
The Benjamin Moore premium portfolio includes Aura®, Regal® Select, Ultra Spec®, ben®, ADVANCE®, ARBORCOAT® and others. The Benjamin Moore diversified brands include specialty and architectural paints from Coronado® and Insl-x®.
The Benjamin Moore premium portfolio includes Aura®, Regal® Select, ben®, ADVANCE®, Element Guard®, Woodluxe®, Ultra Spec® and others. The Benjamin Moore diversified brands include specialty and architectural paints from Coronado® and Insl-x®.
Other Class I railroads and numerous regional railroads and motor carriers also operate in parts of the same territories served by BNSF Railway. K- 7 Utilities and Energy Businesses—Berkshire Hathaway Energy Berkshire currently holds a 92% ownership interest in Berkshire Hathaway Energy Company (“BHE”), based in Des Moines, Iowa.
Other Class I railroads and numerous regional railroads and motor carriers also operate in parts of the same territories served by BNSF Railway. Utilities and Energy Businesses Berkshire’s energy businesses include a 92% ownership interest in Berkshire Hathaway Energy Company (“BHE”), based in Des Moines, Iowa.
McLane’s business model is based on a high volume of sales, rapid inventory turnover and stringent expense controls. Operations are currently divided into three business units: grocery distribution, foodservice distribution and beverage distribution.
Brands, (approximately 12.3% of revenues). McLane’s business model is based on a high volume of sales, rapid inventory turnover and stringent expense controls. Operations are currently divided into three business units: grocery distribution, foodservice distribution and beverage distribution.
Since 2015, Clayton’s site-built division, Clayton Properties Group, has expanded through the acquisition of nine builders across 18 states with over 310 subdivisions, supplementing the portfolio of housing products offered to customers. Clayton’s site-builders currently own and control approximately 70,000 homesites, with a home order backlog of approximately $1.4 billion as of December 2022.
Since 2015, Clayton’s site-built division, Clayton Properties Group, has expanded through the acquisition of nine builders across 18 states with over 290 subdivisions, supplementing the portfolio of housing products offered to customers. Clayton’s site-builders currently own and control approximately 67,000 homesites, with a home order backlog of approximately $1.6 billion as of December 2023.
Reinsurance business is written through NICO and several other Berkshire insurance subsidiaries (“NICO Group”), General Re Corporation, and its subsidiaries (“General Re Group”) and Alleghany’s Transatlantic Reinsurance Company and affiliates (“TransRe Group”). The NICO Group and Gen Re Group underwriting operations in the U.S. are based in Stamford, Connecticut and the TransRe Group is based in New York, New York.
Reinsurance business is written through NICO and affiliates (“NICO Group”), General Re Corporation and its subsidiaries (“General Re Group”) and Transatlantic Reinsurance Company and affiliates (“TransRe Group”). The NICO Group and General Re Group underwriting operations in the U.S. are based in Stamford, Connecticut and the TransRe Group is based in New York, New York.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf for any reason the services of our key personnel, particularly Mr. Buffett, were to become unavailable, there could be a material adverse effect on our operations. Should a replacement for Mr. Buffett be needed currently, Berkshire’s Board of Directors has agreed that Mr. Abel should replace Mr. Buffett.
Biggest changeBuffett, were to become unavailable, there could be a material adverse effect on our operations. Should a replacement for Mr. Buffett be needed currently, Berkshire’s Board of Directors has agreed that Mr. Abel should replace Mr. Buffett. The Board continually monitors this risk and could alter its current view regarding a replacement for Mr. Buffett in the future.
Although we have taken steps intended to mitigate these risks, including business continuity planning, disaster recovery planning and business impact analysis, a significant disruption or cyber intrusion at one or more of our significant operations could adversely affect our results of operations, financial condition and liquidity.
Although we have taken steps intended to mitigate these risks, including business continuity planning, disaster recovery planning and business impact analysis, a significant disruption or cyber intrusion at one or more of our significant operations could adversely affect our results of operations, financial condition and/or liquidity.
Increased regulatory compliance costs could have a significant negative impact on our operating businesses, as well as on the businesses in which we have a significant, but not controlling economic interests. We cannot predict whether such initiatives will have a material adverse impact on our consolidated financial position, results of operations and/or cash flows.
Increased regulatory compliance costs could have a significant negative impact on our operating businesses, as well as on the businesses in which we have significant, but not controlling, economic interests. We cannot predict whether such initiatives will have a material adverse impact on our consolidated financial position, results of operations and/or cash flows.
We employ various disciplined underwriting practices intended to mitigate potential losses and attempt to take into account all possible correlations and avoid writing groups of policies from which pre-tax losses from a single catastrophe event might aggregate in excess of $15 billion.
We employ various disciplined underwriting practices intended to mitigate potential losses, attempt to take into account all possible correlations and avoid writing groups of policies from which pre-tax losses from a single catastrophe event might aggregate in excess of $15 billion.
However, it will take decades before all claims that have occurred as of any given balance sheet date will be reported and settled. Although we believe that liabilities for unpaid losses are adequate, we will not know whether these liabilities or the premiums charged for the coverages provided were sufficient until well after the balance sheet date.
However, it will take decades before all claims that have occurred as of any given balance sheet date will be reported and settled. Although we believe that recorded liabilities for unpaid losses are adequate, we will not know whether these liabilities or the premiums charged for the coverages provided were sufficient until well after the balance sheet date.
Data privacy regulations have recently been enacted in various jurisdictions in the U.S. and throughout the world. These regulations address numerous aspects related to the security of personal information that is stored in our information systems, networks and facilities. Failure to comply with these regulations could result in reputational damage and significant penalties.
Data privacy regulations have recently been enacted in various jurisdictions in the U.S. and throughout the world. These regulations address numerous aspects related to the security of personal information that is stored in our information systems, networks and facilities. Failure to comply with these regulations could result in reputational damage and significant economic penalties.
System assets may need to be operational for long periods of time in order to justify the financial investment. The operational or financial failure of capital projects may not be recoverable through rates that are charged to customers. Further, a significant portion of costs of capital improvements may be funded through debt issued by BNSF and BHE and their subsidiaries.
System assets may need to be operational for long periods of time to justify the financial investment. The operational or financial failure of capital projects may not be recoverable through rates that are charged to customers. Further, a significant portion of costs of capital improvements may be funded through debt issued by BNSF and BHE and their subsidiaries.
K- 27 Our utilities and energy businesses operated under BHE are highly regulated by numerous federal, state, local and foreign governmental authorities in the jurisdictions in which they operate. These laws and regulations are complex, dynamic and subject to new interpretations or change. Regulations affect almost every aspect of our utilities and energy businesses.
Our utilities and energy businesses operated under BHE are highly regulated by numerous federal, state, local and foreign governmental authorities in the jurisdictions in which they operate. These laws and regulations are complex, dynamic and subject to new interpretations or change. Regulations affect almost every aspect of our utilities and energy businesses.
Our railroad business conducted through BNSF is also subject to a significant number of laws and regulations with respect to rates and practices, taxes, railroad operations and a variety of health, safety, labor, environmental and other matters. Failure to comply with applicable laws and regulations could have a material adverse effect on BNSF’s business.
K- 27 Our railroad business conducted through BNSF is also subject to a significant number of laws and regulations with respect to rates and practices, taxes, railroad operations and a variety of health, safety, labor, environmental and other matters. Failure to comply with applicable laws and regulations could have a material adverse effect on BNSF’s business.
Climate change and the regulation of greenhouse gas (“GHG”) emissions may impact our businesses. The impacts of climate change and the regulation of GHG emissions could impact our businesses to varying degrees. Climate change could cause or intensify hurricanes, floods, wildfires, and other extreme weather events that may increase physical risks to and impacts on our operations.
K- 26 Climate change and the regulation of greenhouse gas (“GHG”) emissions may impact our businesses. The impacts of climate change and the regulation of GHG emissions could impact our businesses to varying degrees. Climate change could cause or intensify hurricanes, floods, wildfires, and other extreme weather events that may increase the physical risks to and impacts on our operations.
Our inability to recruit, train and retain qualified and competent managers and personnel could negatively affect the operating results, financial condition and liquidity of our subsidiaries and Berkshire as a whole. K- 25 Investments are unusually concentrated in equity securities and fair values are subject to loss in value.
Our inability to recruit, train and retain qualified and competent managers and personnel could negatively affect the operating results, financial condition and/or liquidity of our subsidiaries and Berkshire as a whole. Investments are unusually concentrated in equity securities and fair values are subject to loss in value.
The failure to comply with new or existing regulations or reinterpretation of existing regulations relating to climate change could have a significant adverse effect on our financial results. K- 26 Risks unique to our regulated businesses Our tolerance for risk in our insurance businesses may result in significant underwriting losses.
The failure to comply with new or existing regulations or reinterpretation of existing regulations relating to climate change could have a significant adverse effect on our financial results. Risks unique to our regulated businesses Our tolerance for underwriting risk in our various insurance businesses may result in significant underwriting losses.
Additional risks and uncertainties that are presently unknown or are currently deemed immaterial may also impair our business operations. General Business Risks Terrorist acts could hurt our operating businesses. A cyber, biological, nuclear or chemical terrorist attack could produce significant losses to our worldwide operations.
Additional risks and uncertainties that are presently unknown or are currently deemed immaterial may also impair our business operations. General Business Risks Terrorist acts could hurt our operating businesses. A nuclear, biological or chemical terrorist attack or armed terrorist incursions could produce significant losses to our worldwide operations.
Our estimated unpaid losses arising under contracts covering property and casualty insurance risks are large ($143 billion at December 31, 2022), and a small percentage increase to those liabilities can result in materially lower reported earnings. Changes in regulations and regulatory actions can adversely affect our operating results and our ability to allocate capital.
Our estimated unpaid losses arising under contracts covering property and casualty insurance risks are large ($146 billion at December 31, 2023), and a small percentage increase to those liabilities can result in materially lower reported earnings. Changes in regulations and regulatory actions can adversely affect our operating results and our ability to allocate capital.
To the extent that changes in government policies limit or restrict the usage of coal as a source of fuel in generating electricity or alternate fuels, such as natural gas, or displace coal on a competitive basis, revenues and earnings could be adversely affected.
To the extent that changes in government policies limit or restrict the usage of coal as a fuel source in generating electricity or alternate fuels, such as natural gas, or otherwise displace coal as an energy source, revenues and earnings could be adversely affected.
Our business operations could be adversely affected from such acts through the loss of human resources or destruction of production facilities and information systems. We share the risk with all businesses. Cyber security risks We rely on technology in virtually all aspects of our business.
Our business operations could be adversely affected from such acts through the loss of human life, destruction of production facilities and information systems or other property damage. We share these risks with all businesses. Cybersecurity risks. We rely on technology in virtually all aspects of our business.
We are dependent on a few key people for our major investment and capital allocation decisions. Major investment decisions and all major capital allocation decisions are made by Warren E. Buffett, Chairman of the Board of Directors and Chief Executive Officer, age 92, in consultation with Charles T. Munger, Vice Chairman of the Board of Directors, age 99.
We are dependent on a few key people for our major investment and capital allocation decisions. Major investment decisions and all major capital allocation decisions are made by Warren E. Buffett, Chairman of the Board of Directors and Chief Executive Officer, age 93. In 2018, Berkshire’s Board of Directors appointed Mr.
In 2018, Berkshire’s Board of Directors appointed Mr. Gregory Abel as Vice Chairman of Berkshire’s non-insurance operations and Mr. Ajit Jain as Vice Chairman of Berkshire’s insurance operations. Mr. Abel and Mr. Jain each report directly to Mr. Buffett. Mr. Buffett continues to be responsible for major capital allocation and investment decisions.
Gregory Abel as Vice Chairman of Berkshire’s non-insurance operations and Mr. Ajit Jain as Vice Chairman of Berkshire’s insurance operations. Mr. Abel and Mr. Jain each report directly to Mr. Buffett. Mr. Buffett continues to be responsible for major capital allocation and investment decisions. If for any reason the services of our key personnel, particularly Mr.
The Board continually monitors this risk and could alter its current view regarding a replacement for Mr. Buffett in the future. We believe that the Board’s succession plan, together with the outstanding managers running our numerous and highly diversified operating units helps to mitigate this risk. We need qualified personnel to manage and operate our various businesses.
We believe that the Board’s succession plan, together with the outstanding managers running our numerous and highly diversified operating units, helps to mitigate this risk. K- 25 We need qualified personnel to manage and operate our various businesses.
Added
Geopolitical events could cause losses to our business and losses in the values of securities we own. We believe risks of adverse effects from geopolitical events are rising, through armed and diplomatic conflicts involving governments in various parts of the world.
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Government policies and actions taken, including responses of other governments to such actions, may adversely affect our operating businesses through reduced sales, increased costs, restricted supply chains, physical damage to our properties and loss of life of our employees. We share these risks with all businesses.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeKern River’s system consists of approximately 1,400 miles of natural gas pipelines, which extends from the system’s point of origination in Wyoming through the Central Rocky Mountains into California. Other Segments Significant physical properties used by Berkshire’s other business segments are summarized below: Number of Properties Business Country Locations Property/Facility type Owned Leased Insurance: GEICO U.S.
Biggest changeKern River’s system consists of approximately 1,400 miles of natural gas pipelines, which extends from the system’s point of origination in Wyoming through the Central Rocky Mountains into California.
BNSF owns over 23,000 route miles, including easements, and operates over 9,000 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads’ tracks. As of December 31, 2022, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings, consisted of over 50,000 operated miles of track.
BNSF owns over 23,000 route miles, including easements, and operates over 9,000 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads’ tracks. As of December 31, 2023, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings, consisted of over 50,000 operated miles of track.
The BHE GT&S pipeline system consists of approximately 5,400 miles of natural gas transmission, gathering and storage pipelines located in portions of Maryland, New York, Ohio, Pennsylvania, Virginia, West Virginia, South Carolina and Georgia. Storage services are provided through the operation of 17 underground natural gas storage fields located in Pennsylvania, West Virginia and New York.
K- 30 The BHE GT&S pipeline system consists of approximately 5,400 miles of natural gas transmission, gathering and storage pipelines located in portions of Maryland, New York, Ohio, Pennsylvania, Virginia, West Virginia, South Carolina and Georgia. Storage services are provided through the operation of 17 underground natural gas storage fields located in Pennsylvania, West Virginia and New York.
BHE GT&S also operates, as the general partner, and owns a 25% limited partnership interest in one liquefied natural gas export, import and storage facility in Maryland and operates and has ownership interests in three smaller liquefied natural gas facilities in Alabama, Florida and Pennsylvania.
BHE GT&S also operates, as the general partner, and owns a 75% limited partnership interest in one liquefied natural gas export, import and storage facility in Maryland and operates and has ownership interests in three smaller liquefied natural gas facilities in Alabama, Florida and Pennsylvania.
Transfer facilities are maintained for rail-to-rail as well as intermodal transfer of containers, trailers and other freight traffic and include approximately 25 intermodal hubs located across the system. BNSF owns or holds under non-cancelable leases exceeding one year approximately 7,500 locomotives and 68,000 freight cars, in addition to maintenance of way and other equipment.
Transfer facilities are maintained for rail-to-rail as well as intermodal transfer of containers, trailers and other freight traffic and include approximately 25 intermodal hubs located across the system. BNSF owns or holds under non-cancelable leases exceeding one year approximately 7,500 locomotives and 72,800 freight cars, in addition to maintenance of way and other equipment.
An intermittent resource’s nominal rating is the manufacturer’s contractually specified capability (in MW) under specified conditions. Net Owned Capacity indicates BHE’s ownership of Facility Net Capacity. As of December 31, 2022, BHE’s subsidiaries also have electric generating facilities that are under construction in Nevada and Wyoming having total Facility Net Capacity and Net Owned Capacity of 243 MW.
An intermittent resource’s nominal rating is the manufacturer’s contractually specified capability (in MW) under specified conditions. Net Owned Capacity indicates BHE’s ownership of Facility Net Capacity. As of December 31, 2023, BHE’s subsidiaries also have electric generating facilities that are under construction in Nevada, Wyoming and California having total Facility Net Capacity and Net Owned Capacity of 1,284 MW.
PacifiCorp, MEC and NV Energy own electric transmission and distribution systems, including approximately 27,800 miles of transmission lines and approximately 1,670 substations, and gas distribution facilities, including approximately 28,200 miles of gas mains and service lines.
PacifiCorp, MEC and NV Energy own electric transmission and distribution systems, including approximately 27,900 miles of transmission lines and approximately 1,670 substations, and gas distribution facilities, including approximately 28,500 miles of gas mains and service lines.
In the ordinary course of business, BNSF incurs significant costs in repairing and maintaining its properties. In 2022, BNSF recorded approximately $2 billion in repairs and maintenance expense. K- 28 Utilities and Energy Businesses—Berkshire Hathaway Energy BHE’s energy properties consist of the physical assets necessary to support its electricity and natural gas businesses.
In the ordinary course of business, BNSF incurs significant costs in repairing and maintaining its properties. In 2023, BNSF recorded approximately $2.5 billion in repairs and maintenance expense. K- 29 Utilities and Energy Businesses Berkshire Hathaway Energ y BHE’s energy properties consist of the physical assets necessary to support its electricity and natural gas businesses.
BHE or its affiliates own or have interests in the following types of operating electric generating facilities at December 31, 2022: Energy Source Entity Location by Significance Facility Net Capacity (MW) (1) Net Owned Capacity (MW) (1) Wind PacifiCorp, MEC, BHE Canada, BHE Montana and BHE Renewables Iowa, Wyoming, Texas, Montana, Nebraska, Washington, California, Illinois, Canada, Oregon and Kansas 12,282 12,282 Natural gas PacifiCorp, MEC, NV Energy, BHE Canada and BHE Renewables Nevada, Utah, Iowa, Illinois, Washington, Wyoming, Oregon, Texas, New York, Arizona and Canada 11,284 11,005 Coal PacifiCorp, MEC and NV Energy Wyoming, Iowa, Utah, Nevada, Colorado and Montana 13,210 8,178 Solar MEC, NV Energy, Northern Powergrid and BHE Renewables California, Australia, Texas, Arizona, Iowa, Minnesota and Nevada 2,120 1,972 Hydroelectric PacifiCorp, MEC and BHE Renewables Washington, Oregon, Idaho, Utah, Hawaii, Montana, Illinois, California and Wyoming 985 985 Nuclear MEC Illinois 1,822 455 Geothermal PacifiCorp and BHE Renewables California and Utah 377 377 Total 42,080 35,254 (1) Facility Net Capacity in megawatts (MW) represents the lesser of nominal ratings or any limitations under applicable interconnection, power purchase, or other agreements for intermittent resources and the total net dependable capability available during summer conditions for all other units.
BHE or its affiliates own or have interests in the following types of operating electric generating facilities at December 31, 2023: Energy Source Entity Location by Significance Facility Net Capacity (MW) (1) Net Owned Capacity (MW) (1) Wind PacifiCorp, MEC, BHE Canada, BHE Montana and BHE Renewables Iowa, Wyoming, Texas, Montana, Nebraska, Washington, California, Illinois, Canada, Oregon and Kansas 12,524 12,524 Natural gas PacifiCorp, MEC, NV Energy, BHE Canada and BHE Renewables Nevada, Utah, Iowa, Illinois, Washington, Wyoming, Oregon, New York, Texas, Arizona and Canada 11,250 10,971 Coal PacifiCorp, MEC and NV Energy Iowa, Wyoming, Utah, Nevada, Colorado and Montana 12,174 7,483 Solar MEC, NV Energy, Northern Powergrid and BHE Renewables California, Australia, Texas, Arizona, Iowa, Minnesota and Nevada 2,120 1,972 Hydroelectric PacifiCorp, MEC and BHE Renewables Washington, Oregon, Idaho, Utah, Hawaii, Montana, Illinois, California and Wyoming 985 985 Nuclear MEC Illinois 1,809 452 Geothermal PacifiCorp and BHE Renewables California and Utah 377 377 Total 41,239 34,764 (1) Facility Net Capacity in megawatts (MW) represents the lesser of nominal ratings or any limitations under applicable interconnection, power purchase, or other agreements for intermittent resources and the total net dependable capability available during summer conditions for all other units.
Northern Powergrid (Northeast) and Northern Powergrid (Yorkshire) operate an electricity distribution network that includes approximately 17,040 miles of overhead lines, approximately 43,400 miles of underground cables and approximately 810 major substations. AltaLink’s electricity transmission system includes approximately 8,300 miles of transmission lines and approximately 310 substations.
Northern Powergrid (Northeast) and Northern Powergrid (Yorkshire) operate an electricity distribution network that includes approximately 17,100 miles of overhead lines, approximately 44,000 miles of underground cables and approximately 790 major substations. AltaLink’s electricity transmission system includes approximately 8,300 miles of transmission lines and approximately 310 substations.
K- 29 Northern Natural’s pipeline system consists of approximately 14,400 miles of natural gas pipelines, including approximately 5,900 miles of mainline transmission pipelines and approximately 8,500 miles of branch and lateral pipelines.
Northern Natural’s pipeline system consists of approximately 14,200 miles of natural gas pipelines, including approximately 5,800 miles of mainline transmission pipelines and approximately 8,400 miles of branch and lateral pipelines.
Offices and claims centers 10 107 BHRG U.S. Offices 1 34 Non-U.S. Locations in 26 countries Offices 1 51 BH Primary U.S. Offices 5 52 Non-U.S. Locations in 7 countries Offices — 15 Manufacturing U.S. Manufacturing facility 513 114 Offices/Warehouses 225 472 Retail/Showroom 230 205 Housing subdivisions 322 — Non-U.S.
Offices and claims centers 9 91 BHRG U.S. Offices 1 34 Non-U.S. Locations in 25 countries Offices 1 52 BH Primary U.S. Offices 5 55 Non-U.S. Locations in 8 countries Offices — 15 Manufacturing U.S. Manufacturing facility 536 178 Offices/Warehouses 224 461 Retail/Showroom 232 208 Housing subdivisions 296 — Non-U.S.
Locations in 63 countries Manufacturing facility 176 107 Offices/Warehouses 109 465 Service U.S. Training facilities/Hangars 11 88 Offices/Distribution 16 136 Production facilities 4 4 Leasing/Showroom/Retail 34 40 Non-U.S. Locations in 18 countries Training facilities/Hangars 1 16 Offices/Distribution — 39 McLane U.S. Distribution centers/Offices 63 28 Retailing U.S. Offices/Warehouses 23 27 Retail/Showroom 141 466 Non-U.S.
Locations in 61 countries Manufacturing facility 172 102 Offices/Warehouses 111 437 Service U.S. Training facilities/Hangars 11 86 Offices/Distribution 13 140 Production facilities 3 3 Leasing/Showroom/Retail 35 38 Non-U.S. Locations in 18 countries Training facilities/Hangars 1 14 Offices/Distribution — 49 McLane U.S. Distribution centers/Offices 64 28 Retailing U.S. Offices/Warehouses 23 25 Retail/Showroom 145 467 Non-U.S.
Added
BHE’s subsidiaries also have battery energy storage systems in Nevada having total Facility Net Capacity and Net Owned Capacity in operation of 220 MW and under construction of 100 MW.
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Pilot Travel Centers PTC owns and operates approximately 600 travel center locations across the U.S., primarily under the names Pilot or Flying J, owning approximately 90% and leasing 10% of the properties.
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Additionally, PTC operates 12 wholesale and retail fuel distribution facilities, 37 fuel mixing and processing facilities, 47 cardlock locations, an ethanol plant and a water disposal business in the oil fields sector. Other Segments Significant physical properties used by Berkshire’s other business segments are summarized below: Number of Properties Business Country Locations Property/Facility type Owned Leased Insurance: GEICO U.S.
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Locations in 7 countries Retail/Offices/Warehouses — 94 K- 31

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations. Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties.
Biggest changeBerkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties.
Added
We do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations. Reference is made to Note 27 to the accompanying Consolidated Financial Statements for information concerning certain litigation involving Berkshire subsidiaries.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Saf ety Disclosures Information regarding the Company’s mine safety violations and other legal matters disclosed in accordance with Section 1503 (a) of the Dodd-Frank Reform Act is included in Exhibit 95 to this Form 10-K.
Biggest changeItem 4. Mine Saf ety Disclosures Information regarding the Company’s mine safety violations and other legal matters disclosed in accordance with Section 1503(a) of the Dodd-Frank Reform Act is included in Exhibit 95 to this Form 10-K. Executive Officers of the Registrant Following is a list of the Registrant’s named executive officers: Name Age Position with Registrant Since Warren E.
The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, changes in market prices of our investments in fixed maturity and equity securities; losses realized from derivative contracts; the occurrence of one or more catastrophic events, such as an earthquake, hurricane, act of terrorism or cyber-attack that causes losses insured by our insurance subsidiaries and/or losses to our business operations; the frequency and severity of epidemics, pandemics or other outbreaks, that negatively affect our operating results and restrict our access to borrowed funds through the capital markets at reasonable rates; changes in laws or regulations affecting our insurance, railroad, utilities and energy and finance subsidiaries; changes in federal income tax laws; and changes in general economic and market factors that affect the prices of securities or the industries in which we do business.
The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, changes in market prices of our investments in fixed maturity and equity securities; losses realized from derivative contracts; the occurrence of one or more catastrophic events, such as an earthquake, hurricane, geopolitical conflict, act of terrorism or cyber-attack that causes losses insured by our insurance subsidiaries and/or losses to our business operations; the frequency and severity of epidemics, pandemics or other outbreaks, that negatively affect our operating results and restrict our access to borrowed funds through the capital markets at reasonable rates; changes in laws or regulations affecting our insurance, railroad, utilities and energy and finance subsidiaries; changes in federal income tax laws; and changes in general economic and market factors that affect the prices of securities or the industries in which we do business.
Hamburg 73 Senior Vice-President – Chief Financial Officer 1992 Each executive officer serves, in accordance with the by-laws of the Registrant, until the first meeting of the Board of Directors following the next annual meeting of shareholders and until a successor is chosen and qualified or until such executive officer sooner dies, resigns, is removed or becomes disqualified.
Hamburg 74 Senior Vice-President – Chief Financial Officer 1992 Each executive officer serves, in accordance with the by-laws of the Registrant, until the first meeting of the Board of Directors following the next annual meeting of shareholders and until a successor is chosen and qualified or until such executive officer sooner dies, resigns, is removed or becomes disqualified.
Abel 60 Vice Chairman – Non-Insurance Operations 2018 Ajit Jain 71 Vice Chairman – Insurance Operations 2018 Marc D.
Buffett 93 Chairman and Chief Executive Officer 1970 Gregory E. Abel 61 Vice Chairman – Non-Insurance Operations 2018 Ajit Jain 72 Vice Chairman – Insurance Operations 2018 Marc D.
Removed
K- 30 Executive Officers of the Registrant Following is a list of the Registrant’s named executive officers: Name Age Position with Registrant Since Warren E. Buffett 92 Chairman and Chief Executive Officer 1970 Charles T. Munger 99 Vice Chairman 1978 Gregory E.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeK- 31 Common Stock Repurchase Program Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charles Munger, Vice Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.
Biggest changeDividends Berkshire has not declared a cash dividend since 1967. Common Stock Repurchase Program Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.
Repurchases may be in the open market or through privately negotiated transactions. Information with respect to Berkshire’s Class A and Class B common stock repurchased during the fourth quarter of 2022 follows.
Repurchases may be in the open market or through privately negotiated transactions. Information with respect to Berkshire’s Class A and Class B common stock repurchased during the fourth quarter of 2023 follows.
Stock Performance Graph The following chart compares the subsequent value of $100 invested in Berkshire common stock on December 31, 2017 with a similar investment in the Standard & Poor’s 500 Stock Index and in the Standard & Poor’s Property – Casualty Insurance Index**. * Cumulative return for the Standard & Poor’s indices based on reinvestment of dividends. ** It would be difficult to develop a peer group of companies similar to Berkshire.
K- 33 Stock Performance Graph The following chart compares the subsequent value of $100 invested in Berkshire common stock on December 31, 2018 with a similar investment in the Standard & Poor’s 500 Stock Index and in the Standard & Poor’s Property & Casualty Insurance Index.** * Cumulative return for the Standard & Poor’s indices based on reinvestment of dividends. ** It is difficult to develop a peer group of companies similar to Berkshire.
The Corporation owns subsidiaries engaged in a number of diverse business activities of which an important component is the property and casualty insurance business. Accordingly, management has used the Standard & Poor’s Property—Casualty Insurance Index for comparative purposes. Item 6. [Reserved] K- 32
Berkshire owns subsidiaries engaged in a number of diverse business activities of which an important component is the property and casualty insurance business. Accordingly, Berkshire uses the Standard & Poor’s Property & Casualty Insurance Index for comparative purposes. Item 6. [Reserved] K- 34
Shareholders Berkshire had approximately 1,300 record holders of its Class A common stock and 18,700 record holders of its Class B common stock at February 13, 2023. Record owners included nominees holding at least 334,000 shares of Class A common stock and 1,297,000,000 shares of Class B common stock on behalf of beneficial-but-not-of-record owners.
K- 32 Shareholders Berkshire had approximately 1,200 record holders of its Class A common stock and 18,000 record holders of its Class B common stock at February 12, 2024. Record owners included nominees holding at least 323,000 shares of Class A common stock and 1,307,000,000 shares of Class B common stock on behalf of beneficial-but-not-of-record owners.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Maximum number or value of shares that yet may be repurchased under the program October Class A common stock 1,550 $ 426,592.77 1,550 * Class B common stock — $ — — * November Class A common stock 2,146 $ 463,584.86 2,146 * Class B common stock — $ — — * December Class A common stock 584 $ 468,113.93 584 * Class B common stock 3,046,794 $ 303.83 3,046,794 * * The program does not specify a maximum number of shares to be repurchased or obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the repurchase program.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Maximum number or value of shares that yet may be repurchased under the program October Class A common stock 1,815 $ 522,756.10 1,815 * Class B common stock — $ — — * November Class A common stock 1,705 $ 536,048.49 1,705 * Class B common stock 660,585 $ 347.16 660,585 * December Class A common stock 103 $ 541,062.03 103 * Class B common stock — $ — — * * The program does not specify a maximum number of shares to be repurchased or obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the repurchase program.
Removed
Dividends Berkshire has not declared a cash dividend since 1967.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data K- 67 Consolidated Balance Sheets— December 31, 2022 and December 31, 2021 K- 70 Consolidated Statements of Earnings— Years Ended December 31, 2022, December 31, 2021, and December 31, 2020 K- 72 Consolidated Statements of Comprehensive Income— Years Ended December 31, 2022, December 31, 2021, and December 31, 2020 K- 73 Consolidated Statements of Changes in Shareholders’ Equity— Years Ended December 31, 2022, December 31, 2021, and December 31, 2020 K- 73 Consolidated Statements of Cash Flows— Years Ended December 31, 2022, December 31, 2021, and December 31, 2020 K- 74 Notes to Consolidated Financial Statements K- 75
Biggest changeFinancial Statements and Supplementary Data K- 67 Consolidated Balance Sheets— December 31, 2023 and December 31, 2022 K- 70 Consolidated Statements of Earnings— Years Ended December 31, 2023, December 31, 2022, and December 31, 2021 K- 72 Consolidated Statements of Comprehensive Income— Years Ended December 31, 2023, December 31, 2022, and December 31, 2021 K- 73 Consolidated Statements of Changes in Shareholders’ Equity— Years Ended December 31, 2023, December 31, 2022, and December 31, 2021 K- 73 Consolidated Statements of Cash Flows— Years Ended December 31, 2023, December 31, 2022, and December 31, 2021 K- 74 Notes to Consolidated Financial Statements K- 75
Item 6. [Reserved] K- 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations K- 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk K- 66 Item 8.
Item 6. [Reserved] K- 34 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations K- 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk K- 66 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePremiums earned Pre-tax underwriting earnings (loss) 2022 2021 2020 2022 2021 2020 Property/casualty $ 16,040 $ 13,740 $ 12,214 $ 2,180 $ 667 $ (799 ) Life/health 5,279 5,648 5,861 292 (421 ) (18 ) Retroactive reinsurance — 136 38 (668 ) (782 ) (1,248 ) Periodic payment annuity 582 658 566 (532 ) (508 ) (617 ) Variable annuity 14 15 14 117 114 (18 ) $ 21,915 $ 20,197 $ 18,693 $ 1,389 $ (930 ) $ (2,700 ) Property/casualty A summary of property/casualty reinsurance underwriting results follows (dollars in millions). 2022 2021 2020 Amount % Amount % Amount % Premiums written $ 16,962 $ 14,149 $ 13,295 Premiums earned $ 16,040 100.0 $ 13,740 100.0 $ 12,214 100.0 Losses and loss adjustment expenses 10,605 66.1 9,878 71.9 9,898 81.0 Underwriting expenses 3,255 20.3 3,195 23.2 3,115 25.5 Total losses and expenses 13,860 86.4 13,073 95.1 13,013 106.5 Pre-tax underwriting earnings (loss) $ 2,180 $ 667 $ (799 ) Premiums written increased $2.8 billion (19.9%) in 2022 compared to 2021, primarily due to net increases in new property business and higher rates, and the inclusion of the TransRe Group ($986 million), partially offset by unfavorable foreign currency translation effects.
Biggest changePremiums earned Pre-tax underwriting earnings (loss) 2023 2022 2021 2023 2022 2021 Property/casualty $ 21,938 $ 16,040 $ 13,740 $ 3,508 $ 2,180 $ 667 Life/health 5,072 5,224 5,648 354 109 (237 ) Retroactive reinsurance — — 136 (1,541 ) (668 ) (782 ) Periodic payment annuity — 582 655 (650 ) (623 ) (572 ) Variable annuity — — — 233 467 169 $ 27,010 $ 21,846 $ 20,179 $ 1,904 $ 1,465 $ (755 ) K- 39 Management’s Discussion and Analysis Insurance—Underwriting Berkshire Hathaway Reinsurance Group (Continued) Property/casualty A summary of property/casualty reinsurance underwriting results follows (dollars in millions). 2023 2022 2021 Amount % Amount % Amount % Premiums written $ 22,360 $ 16,962 $ 14,149 Premiums earned $ 21,938 100.0 $ 16,040 100.0 $ 13,740 100.0 Losses and loss adjustment expenses 12,664 57.7 10,605 66.1 9,878 71.9 Underwriting expenses 5,766 26.3 3,255 20.3 3,195 23.2 Total losses and expenses 18,430 84.0 13,860 86.4 13,073 95.1 Pre-tax underwriting earnings $ 3,508 $ 2,180 $ 667 Premiums written in 2023 increased 31.8% over 2022, which increased 19.9% over 2021.
Our ratio of railroad operating expenses to railroad operating revenues increased 5.0 percentage points to 65.9% in 2022 versus 2021. The operating expense increase was primarily attributable to significant increases in the cost of fuel, as well as higher compensation and benefits expense.
Our ratio of railroad operating expenses to railroad operating revenues increased 5.0 percentage points to 65.9% in 2022 versus 2021. The operating expense increase was primarily attributable to significant increases in the cost of fuel, as well as higher compensation and benefits expenses.
IMC’s revenues increased 4.5% to $3.7 billion in 2022 compared to 2021, reflecting increased sales in most regions, partially offset by the foreign currency translation effects of a stronger U.S. Dollar, lower sales in China (attributable to the pandemic) and the effects the Russia-Ukraine conflict in Europe.
IMC’s revenues increased 4.5% to $3.7 billion in 2022 compared to 2021, reflecting increased sales in most regions, partially offset by the foreign currency translation effects of a stronger U.S. Dollar, lower sales in China (attributable to the pandemic) and the effects of the Russia-Ukraine conflict in Europe.
Our claim liability estimation process for short-tail lines, primarily property exposures, utilizes a combination of the paid and incurred loss development methods and the incurred and paid loss Bornhuetter-Ferguson methods. Certain catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses.
Our claim liability estimation process for short-tail lines, primarily property exposures, utilizes a combination of the paid and incurred loss development methods and the incurred and paid loss Bornhuetter-Ferguson methods. Certain property catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses.
We evaluate these assets for impairment annually in the fourth quarter and on an interim basis if the facts and circumstances lead us to believe that more likely than not there has been an impairment. Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets.
We evaluate these assets for impairment annually in the fourth quarter and on an interim basis if the facts and circumstances lead us to believe that more likely than not there has been an impairment. Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and of indefinite-lived intangible assets.
Average claims severities in 2022 were higher for all coverages, including property damage (twenty-one to twenty-two percent range), collision (fourteen to sixteen percent range) and bodily injury (nine to eleven percent range). Losses and loss adjustment expenses reflected reductions in the ultimate loss estimates for prior years’ loss events of $653 million in 2022 compared to $1.8 billion in 2021.
Average claims severities in 2022 were higher for all coverages, including property damage (twenty-one to twenty-two percent range), collision (fourteen to sixteen percent range) and bodily injury (nine to eleven percent range). Losses and loss adjustment expenses reflected reductions in the ultimate loss estimates for prior years’ loss events of $653 million in 2022 and $1.8 billion in 2021.
The earnings decline reflected lower aggregate earnings from the apparel and footwear businesses (68.0%) and Duracell (30.6%), partially offset by higher earnings from Forest River (7.6%). Our apparel businesses were negatively affected in 2022 by low sales volumes, reduced manufacturing efficiencies and higher input costs, including raw materials, freight, labor and other operating costs.
The earnings decline reflected lower earnings from the apparel and footwear businesses (68.0%) and Duracell (30.6%), partially offset by higher earnings from Forest River (7.6%). Our apparel businesses were negatively affected in 2022 by low sales volumes, reduced manufacturing efficiencies and higher input costs, including raw materials, freight, labor and other operating costs.
As reinsurers, the premium and loss data we receive is at least one level removed from the underlying claimant, so there is a risk that the loss data reported is incomplete, inaccurate or the claim is outside the coverage terms. We maintain certain internal procedures to determine that the information is complete and in compliance with the contract terms.
As reinsurers, the premium and loss data we receive is at least one level removed from the underlying claimant, so there is a risk that the loss data reported is incomplete, inaccurate or the claim is outside the coverage terms. We maintain internal procedures to determine that the information is complete and in compliance with the contract terms.
Collectively, these factors influence our selections of expected case loss emergence patterns. Incurred and paid loss Bornhuetter-Ferguson methods – These methods consider actual paid and incurred losses and expected patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of the expected unpaid or unreported losses.
Collectively, these factors influence our selections of expected case loss emergence patterns. Incurred and paid loss Bornhuetter-Ferguson methods consider actual paid and incurred losses and expected reporting patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of the expected unpaid or unreported losses.
The methodologies generally fall into or are hybrids of one or more of the following categories: Paid and incurred loss development methods – These methods consider expected case loss emergence and development patterns, together with expected loss ratios by year.
The methodologies generally fall into or are hybrids of one or more of the following categories: Paid and incurred loss development methods consider expected case loss emergence and development patterns, together with expected loss ratios by year.
Investment and derivative contract gains (losses) in each of the three years presented predominantly derived from our investments in equity securities and included significant net unrealized gains and losses from market price changes.
Investment and derivative contract gains (losses) in each of the three years predominantly derived from our investments in equity securities and included significant net unrealized gains and losses from market price changes.
We believe that investment gains and losses on investments in equity securities, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our reported quarterly or annual results or evaluating the economic performance of our operating businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.
We believe that investment gains and losses on investments in equity securities, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.
Substantially all of the increase was derived from BHE GT&S, primarily attributable to higher regulated storage and service revenues from a general rate case settlement and higher revenues and margins from non-regulated activities, as well as income tax adjustments. Other energy businesses’ after-tax earnings increased $359 million in 2022 compared to 2021.
Substantially all of the increase was derived from BHE GT&S, primarily attributable to higher regulated storage and service revenues from a general rate case settlement and higher revenues and margins from non-regulated activities, as well as income tax adjustments. Other energy businesses’ after-tax earnings increased $369 million in 2022 compared to 2021.
Earnings in 2021 were negatively impacted by severe winter storms, which caused industry-wide temporary facilities closures, including at our Additives facilities, which experienced lost sales and incremental manufacturing and other operating costs. Marmon’s revenues were $10.7 billion in 2022, an increase of $934 million (9.6%) compared to 2021.
Earnings in 2021 were negatively impacted by severe winter storms, which caused industry-wide temporary facilities closures, including at our Additives facilities, which experienced lost sales and incremental operating costs. Marmon’s revenues were $10.7 billion in 2022, an increase of $934 million (9.6%) compared to 2021.
K- 65 Management’s Discussion and Analysis (Continued) Foreign Currency Risk (Continued) Our net assets subject to financial statement translation into U.S. Dollars are primarily in our insurance, utilities and energy and certain manufacturing and service subsidiaries. A portion of our financial statement translation-related impact from changes in foreign currency rates is recorded in other comprehensive income.
K- 65 Management’s Discussion and Analysis Foreign Currency Risk Our net assets subject to financial statement translation into U.S. Dollars are primarily in our insurance, utilities and energy and certain manufacturing subsidiaries. A portion of our financial statement translation-related impact from changes in foreign currency rates is recorded in other comprehensive income.
BHE also operates a residential real estate brokerage business and a large network of real estate brokerage franchises in the United States. The rates our regulated businesses charge customers for energy and services are based in large part on the costs of business operations, including income taxes and a return on capital, and are subject to regulatory approval.
BHE also operates a residential real estate brokerage business and a large network of real estate brokerage franchises in the United States. The rates our regulated businesses charge customers for energy and services are largely based on the costs of business operations, including income taxes and a return on capital, and are subject to regulatory approval.
Accordingly, certain amounts currently recorded in our Consolidated Financial Statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. A discussion of our principal accounting policies that required the application of significant judgments as of December 31, 2022 follows.
Accordingly, certain amounts currently recorded in our Consolidated Financial Statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. A discussion of our principal accounting policies that required the application of significant judgments as of December 31, 2023 follows.
For our long-tail lines, primarily casualty exposures, we may rely on different methods depending on the maturity of the business, with estimates for the most recent years being based on priced loss expectations and more mature years reflecting the paid or incurred development pattern indications. In 2022, certain workers’ compensation claims reported losses were less than expected.
For our long-tail lines, primarily casualty exposures, we may rely on different methods depending on the maturity of the business, with estimates for the most recent years being based on priced loss expectations and more mature years reflecting the paid or incurred development pattern indications. In 2023, workers’ compensation claims reported losses were less than expected.
The earnings increase also reflected higher operating revenue from owned renewable energy projects and earnings from new gas exploration and solar projects, partially offset by lower earnings from natural gas generating facilities and unfavorable foreign currency translation effects in 2022.
The earnings increase also reflected higher operating revenue from owned renewable energy projects and earnings from new gas exploration and solar projects, partially offset by lower earnings from natural gas generating facilities and unfavorable foreign currency translation effects.
The increase in wind tax equity investment earnings reflected the impact of losses in 2021 on pre-existing tax equity investments due to the February 2021 winter storms as well as increased income tax benefits from projects reaching commercial operation over the past twelve months. Real estate brokerage after-tax earnings decreased $287 million in 2022 compared to 2021.
The increase in wind tax equity investment earnings was attributable to the impact of losses in 2021 on pre-existing tax equity investments due to the February 2021 winter storms, as well as increased income tax benefits from projects reaching commercial operation over the past twelve months. Real estate brokerage after-tax earnings decreased $287 million in 2022 compared to 2021.
As a result, we reduced estimated ultimate losses for prior years’ loss events by $114 million. We estimate that increases of ten percent in the tail of the expected loss emergence pattern and in the expected loss ratios would produce a net increase of approximately $1.1 billion in IBNR liabilities, producing a corresponding decrease in pre-tax earnings.
As a result, we reduced estimated ultimate losses for prior years’ loss events by $116 million. We estimate that increases of ten percent in the tail of the expected loss emergence pattern and in the expected loss ratios would produce a net increase of approximately $1.0 billion in IBNR liabilities, producing a corresponding decrease in pre-tax earnings.
Earnings in 2022 also included aggregate losses related to the Rockton, Illinois fire of $36 million compared to aggregate losses and asset impairment charges in 2021 of $257 million related to the Rockton facility fire and an underperforming business in the Advanced Materials product lines.
Earnings in 2022 also included aggregate losses related to the Rockton fire of $36 million compared to aggregate losses and asset impairment charges in 2021 of $257 million related to the Rockton fire and an underperforming business in the Advanced Materials product lines.
Earnings in 2022 benefitted from higher selling prices and strong demand in certain product categories, as well as an increase in gains from certain business divestitures and asset sales and reduced impairment and restructuring charges.
Earnings in 2022 benefited from higher selling prices and strong demand in certain product categories, as well as an increase in gains from certain business divestitures and asset sales and reduced impairment and restructuring charges.
We estimate that a one percentage point increase or decrease in BI severities would produce a $245 million increase or decrease in recorded liabilities, with a corresponding decrease or increase in pre-tax earnings.
We estimate that a one percentage point increase or decrease in BI severities would produce a $210 million increase or decrease in recorded liabilities, with a corresponding decrease or increase in pre-tax earnings.
Commercial aircraft delivery rates by original equipment manufacturers (“OEMs”) of narrow-body aircraft have rebounded since the onset of the pandemic. Deliveries of wide-body aircraft remain relatively low, in part, attributable to the pause in the Boeing 787 program. However, Boeing resumed deliveries in the third quarter of 2022.
Commercial aircraft delivery rates by original equipment manufacturers (“OEMs”) of narrow-body aircraft rebounded since the onset of the pandemic. Deliveries of wide-body aircraft were relatively low, in part, attributable to the pause in the Boeing 787 program. However, Boeing resumed deliveries in the third quarter of 2022.
A summary of BHRG’s property and casualty unpaid losses and loss adjustment expenses, other than retroactive reinsurance losses and loss adjustment expenses, as of December 31, 2022 follows (in millions).
A summary of BHRG’s property and casualty unpaid losses and loss adjustment expenses, other than retroactive reinsurance losses and loss adjustment expenses, as of December 31, 2023 follows (in millions).
Strategically, we strive to invest in businesses that possess excellent economics and able and honest management, and we prefer to invest a meaningful amount in each company. Historically, equity investments have been concentrated in relatively few issuers. At December 31, 2022, approximately 75% of the total fair value of equity securities was concentrated in five companies.
Strategically, we strive to invest in businesses that possess excellent economics and able and honest management, and we prefer to invest a meaningful amount in each company. Historically, equity investments have been concentrated in relatively few issuers. At December 31, 2023, approximately 79% of the total fair value of equity securities was concentrated in five companies.
As of December 31, 2022, the largest categories of our long-term contractual obligations primarily related to fuel, capacity, transmission and maintenance contracts and capital expenditure commitments of BHE and BNSF, aircraft purchase commitments of NetJets and certain raw materials purchase commitments.
As of December 31, 2023, the largest categories of our long-term contractual obligations primarily related to fuel, capacity, transmission and maintenance contracts and capital expenditure commitments of BHE and BNSF, aircraft purchase commitments of NetJets and certain materials purchase commitments.
In connection with reinsurance contracts, the nature, extent, timing and perceived reliability of loss information received from ceding companies varies widely depending on the type of coverage and the contractual reporting terms. Reinsurance contract terms, conditions and coverages also tend to lack standardization and may evolve more rapidly than primary insurance policies.
The nature, extent, timing and perceived reliability of loss information received from ceding companies varies widely depending on the type of coverage and the contractual reporting terms. Reinsurance contract terms, conditions and coverages also tend to lack standardization and may evolve more rapidly than primary insurance policies.
The increase was primarily due to increased wind tax equity investment earnings of $200 million and the impact in 2021 on income tax expense of $109 million at Northern Powergrid related to the enactment in June 2021 of an increase in the United Kingdom corporate income tax rate from 19% to 25%, effective April 1, 2023.
The increase was primarily due to increased wind tax equity investment earnings of $200 million and the impact in 2021 on income tax expense of $109 million related to the enactment in 2021 of an increase in the United Kingdom corporate income tax rate from 19% to 25%, effective April 1, 2023.
Earnings in 2022 reflected increases in the Transportation, Metal Services, Retail, Crane and several other business groups due to higher volumes and pricing, which were partially offset by lower earnings from the Rail & Leasing group, reflecting lower renewal rates, higher repair costs and losses of approximately $90 million related to the shutdown in the second quarter of its business in Russia.
Earnings in 2022 reflected increases in the Transportation, Metal Services, Retail, Crane and several other business groups due to higher volumes and pricing, which were partially offset by lower earnings from the Rail & Leasing group, reflecting lower renewal rates, higher repair costs and the losses related to the shutdown of its business in Russia.
When detailed loss information is unavailable, we develop estimates by applying recent industry trends and projections to aggregate client data. Judgments in these areas necessarily consider the stability of the legal and regulatory environment under which we expect claims will be adjudicated. Legal reform and legislation could also have a significant impact on our ultimate liabilities.
When detailed loss information is unavailable, we may apply recent industry trends and projections to aggregate client data. Judgments in these areas necessarily consider the stability of the legal and regulatory environment under which we expect claims will be adjudicated. Legal reform and legislation could also have a significant impact on our ultimate liabilities.
Pre-tax earnings as a percentage of revenues in 2022 was 15.8%, a decrease of 0.1 percentage points compared 2021. PCC’s revenues were $7.5 billion in 2022, an increase of $1.1 billion (16.5%) compared to 2021. PCC derives significant revenues and earnings from aerospace products. The revenue increase in 2022 was primarily attributable to higher demand for aerospace products.
Pre-tax earnings as a percentage of revenues in 2022 was 15.8%, a decrease of 0.1 percentage points compared to 2021. PCC’s revenues were $7.5 billion in 2022, an increase of $1.1 billion (16.5%) compared to 2021. The revenue increase in 2022 was primarily attributable to higher demand for aerospace products.
Pre-tax investment gains and losses included net unrealized losses of approximately $63.1 billion in 2022 and gains of approximately $76.4 billion in 2021 and $55.0 billion in 2020 attributable to changes in market prices of equity securities we held at the end of each year.
Pre-tax investment gains and losses included net unrealized gains of approximately $69.1 billion in 2023, losses of approximately $63.1 billion in 2022 and gains of approximately $76.4 billion in 2021 attributable to changes in market prices of equity securities we held at the end of each year.
In the U.S., client reporting is generally required at quarterly intervals ranging from 30 to 90 days after the end of the quarterly period, while outside of the U.S., reinsurance reporting practices may vary further. In certain countries, clients report annually from 90 to 180 days after the end of the annual period.
In the U.S., client reporting is generally required at quarterly intervals ranging from 30 to 90 days after the end of the quarterly period, while outside of the U.S., reinsurance reporting practices may vary further, with some clients reporting annually ranging from 90 to 180 days after the end of the annual period.
Approximately 93% of all foreign government obligations were rated AA or higher by at least one of the major rating agencies. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.
Approximately 95% of our foreign government obligations were rated AA or higher by at least one of the major rating agencies. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.
Berkshire Hathaway Reinsurance Group The Berkshire Hathaway Reinsurance Group (“BHRG”) offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company (“NICO”), General Reinsurance Corporation, General Reinsurance AG and, beginning October 19, 2022, Alleghany’s Transatlantic Reinsurance Company and affiliates (“TransRe Group”).
Berkshire Hathaway Reinsurance Group The Berkshire Hathaway Reinsurance Group (“BHRG”) offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company (“NICO”), General Reinsurance Corporation, General Reinsurance AG and, beginning on October 19, 2022, TransRe Group.
We do not consistently receive reliable detailed data regarding asbestos, environmental and latent injury claims from all ceding companies, particularly with respect to multi-line or aggregate excess-of-loss policies. When possible, we conduct a detailed analysis of the underlying loss data to make an estimate of ultimate reinsured losses.
We do not consistently receive reliable detailed underlying claims data from all ceding companies, particularly with respect to multi-line or aggregate excess-of-loss policies. When possible, we conduct a detailed analysis of the underlying loss data to make an estimate of ultimate reinsured losses.
The increase in 2022 reflected higher earnings from other energy businesses, including tax equity investments and the Northern Powergrid businesses, as well as from the natural gas pipeline businesses, partly offset by lower earnings from the real estate brokerage business. The increase in 2021 reflected higher earnings from the U.S. utilities and natural gas pipelines businesses.
The increase in 2022 reflected higher earnings from other energy businesses, including tax equity investments and the Northern Powergrid businesses, as well as from the natural gas pipeline businesses, partly offset by lower earnings from the real estate brokerage business.
K- 58 Management’s Discussion and Analysis (Continued) Property and casualty insurance unpaid losses We record liabilities for unpaid losses and loss adjustment expenses (also referred to as “gross unpaid losses” or “claim liabilities”) based upon estimates of the ultimate amounts payable for loss events occurring on or before the balance sheet date.
Property and casualty insurance unpaid losses We record liabilities for unpaid losses and loss adjustment expenses (also referred to as “gross unpaid losses” or “claim liabilities”) based upon estimates of the ultimate amounts payable for loss events occurring on or before the balance sheet date.
In each year, we also recorded pre-tax gains and losses from market value changes during each year on equity securities sold during such year, including losses of $3.9 billion in 2022, gains of $1.0 billion in 2021 and losses of $14.0 billion in 2020.
We also recorded pre-tax gains and losses from market value changes during each year on equity securities sold during such year, including gains of $2.7 billion in 2023, losses of $3.9 billion in 2022 and gains of $1.0 billion in 2021.
Claim liability estimates for automobile liability coverages (such as bodily injury (“BI”), uninsured motorists, and personal injury protection) are more uncertain due to the longer claim-tails, so we establish additional case development estimates. As of December 31, 2022, case development liabilities averaged approximately 38% of the case reserves.
Claim liability estimates for liability coverages (such as bodily injury (“BI”), uninsured motorists, and personal injury protection) are more uncertain due to the longer claim-tails, so we establish additional case development estimates. As of December 31, 2023, case development liabilities averaged approximately 28% of reported reserves.
Taxable investment gains on equity securities sold, which is generally the difference between sales proceeds and the original cost basis of the securities sold, were $769 million in 2022, $3.6 billion in 2021 and $6.2 billion in 2020.
Taxable investment gains on equity securities sold, which is generally the difference between sales proceeds and the original cost basis of the securities sold, were $5.0 billion in 2023, $769 million in 2022 and $3.6 billion in 2021.
K- 44 Management’s Discussion and Analysis (Continued) Utilities and Energy (Continued) The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE follows (dollars in millions).
The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE follows (dollars in millions).
K- 36 Management’s Discussion and Analysis (Continued) Insurance—Underwriting (Continued) Berkshire Hathaway Primary Group The Berkshire Hathaway Primary Group consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients.
Berkshire Hathaway Primary Group The Berkshire Hathaway Primary Group consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients.
K- 40 Management’s Discussion and Analysis (Continued) Insurance—Investment Income (Continued) Invested assets of our insurance businesses derive from shareholder capital and from net liabilities under insurance and reinsurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including liabilities under retroactive reinsurance contracts, life, annuity and health insurance benefit liabilities, unearned premiums and other liabilities due to policyholders, reduced by insurance premiums and reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs.
Invested assets of our insurance businesses derive from shareholder capital and net liabilities assumed under insurance and reinsurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and other liabilities due to policyholders, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs.
A summary of these gains (losses), after-tax, for each of the years ending December 31, 2022 and 2021 follows (in millions). 2022 2021 Non-U.S. denominated debt included in net earnings $ 1,263 $ 955 Net liabilities under certain reinsurance contracts included in net earnings 263 58 Foreign currency translation included in other comprehensive income (2,045 ) (1,021 ) Commodity Price Risk Our subsidiaries use commodities in various ways in manufacturing and providing services.
A summary of these gains (losses), after-tax, for each of the years ending December 31, 2023 and 2022 follows (in millions). 2023 2022 Non-U.S. denominated debt included in net earnings $ 211 $ 1,263 Net liabilities under certain reinsurance contracts included in net earnings (241 ) 482 Foreign currency translation included in other comprehensive income 749 (2,050 ) Commodity Price Risk Our subsidiaries use commodities in various ways in manufacturing and providing services.
Our after-tax earnings from Kraft Heinz were $550 million in 2022, $317 million in 2021 and $170 million in 2020, which included our after-tax share of goodwill and other intangible asset impairment charges recorded by Kraft Heinz of $157 million in 2022, $259 million in 2021 and $611 million in 2020.
Our after-tax earnings from Kraft Heinz were $790 million in 2023, $550 million in 2022 and $317 million in 2021, which included our after-tax share of goodwill and other intangible asset impairment charges recorded by Kraft Heinz of $126 million in 2023, $157 million in 2022 and $259 million in 2021.
Operating revenues from coal increased 21.7% to $3.9 billion in 2022 compared to 2021, attributable to higher average revenue per car/unit. Coal volumes were unchanged compared to 2021. K- 42 Management’s Discussion and Analysis (Continued) Railroad (Continued) Railroad operating expenses were $16.6 billion in 2022, an increase of $2.9 billion (21.2%) compared to 2021.
Operating revenues from coal increased 21.7% to $3.9 billion in 2022 compared to 2021, attributable to higher average revenue per car/unit. Coal volumes were unchanged compared to 2021. Railroad operating expenses were $16.6 billion in 2022, an increase of $2.9 billion (21.2%) compared to 2021.
GEICO’s claim reserving methodologies produce liability estimates based upon the individual claims. The key assumptions affecting our liability estimates include projections of ultimate claim counts (“frequency”) and average loss per claim (“severity”). We utilize a combination of several actuarial estimation methods, including Bornhuetter-Ferguson and chain-ladder methodologies.
The key assumptions affecting our liability estimates include projections of ultimate claim counts (“frequency”) and average loss per claim (“severity”). We utilize a combination of several actuarial estimation methods, including Bornhuetter-Ferguson and chain-ladder methodologies.
For certain significant casualty and general liability portfolios, we estimate that increases of five percent in the claim-tails of the expected loss emergence patterns and in the expected loss ratios would produce a net increase in our nominal IBNR liabilities and a corresponding reduction in pre-tax earnings of approximately $980 million, although outcomes of greater than or less than $980 million are possible given the diversification in worldwide business.
For certain significant casualty and general liability portfolios, we estimate that increases of five percent in the claim-tails of the expected loss emergence patterns and in the expected loss ratios could produce a net increase in our nominal IBNR liabilities and a corresponding reduction in pre-tax earnings of approximately $2 billion, although outcomes of greater than or less than $2 billion are possible.
In 2022, we recorded foreign currency exchange rate gains on these debt issues, due to strengthening of the U.S. Dollar, which reduced the U.S Dollar carrying value of the debt. The gains and losses recorded in any given period can be significant due to the magnitude of the borrowings and the inherent volatility in foreign currency exchange rates.
Dollar, which reduced the U.S Dollar carrying value of the debt. The gains and losses recorded in any given period can be significant due to the magnitude of the borrowings and the inherent volatility in foreign currency exchange rates.
We believe it is reasonably possible for these assumptions to increase at these rates. For other casualty losses, other than asbestos, environmental and other latent injury claims, we reduced estimated ultimate liabilities for prior years’ events by approximately $650 million in 2022.
We believe it is reasonably possible for these assumptions to increase at these rates. For other casualty losses, other than asbestos and environmental, we reduced estimated ultimate liabilities for prior years’ events by approximately $225 million in 2023.
We estimate future payments associated with these contracts over the next five years of approximately $24 billion, including $12 billion in 2023. Critical Accounting Policies Certain accounting policies require us to make estimates and judgments in determining the amounts reflected in our Consolidated Financial Statements. Such estimates and judgments necessarily involve varying and possibly significant degrees of uncertainty.
We currently estimate future payments associated with these contracts over the next five years will approximate $22 billion, including $10 billion in 2024. Critical Accounting Estimates Certain accounting policies require us to make estimates and judgments in determining the amounts reflected in our Consolidated Financial Statements. Such estimates and judgments necessarily involve varying and possibly significant degrees of uncertainty.
The change in estimated ultimate liabilities for asbestos, environmental and other latent injury claims, excluding amounts assumed under retroactive reinsurance contracts was not significant in 2022. Net liabilities for such claims were approximately $2.1 billion at December 31, 2022.
The change in estimated ultimate liabilities for asbestos and environmental claims, excluding amounts assumed under retroactive reinsurance contracts was not significant in 2023. Net liabilities for such claims were approximately $2.0 billion at December 31, 2023.
Retail customer volumes increased 2.4% (1.6% at PacifiCorp, 4.3% at MEC and 2.2% at NV Energy) in 2022 compared to 2021, primarily due to higher customer usage, an increase in the average number of customers and the favorable impact of weather. Natural gas pipelines’ after-tax earnings increased $233 million in 2022 compared to 2021.
Retail customer volumes increased 2.4% (1.6% at PacifiCorp, 4.3% at MEC and 2.2% at NV Energy) in 2022 compared to 2021, primarily due to higher customer usage, an increase in the average number of customers and the favorable impact of weather.
K- 48 Management’s Discussion and Analysis (Continued) Manufacturing, Service and Retailing (Continued) Industrial products (Continued) Marmon’s pre-tax earnings in 2022 increased 11.3% compared to 2021.
K- 50 Management’s Discussion and Analysis Manufacturing, Service and Retailing Marmon’s pre-tax earnings increased 11.3% in 2022 compared to 2021.
Investment and Derivative Contract Gains (Losses) A summary of investment and derivative contract gains (losses) follows (dollars in millions). 2022 2021 2020 Investment gains (losses) $ (67,623 ) $ 77,576 $ 40,905 Derivative contract gains (losses) (276 ) 966 (159 ) Gains (losses) before income taxes and noncontrolling interests (67,899 ) 78,542 40,746 Income taxes and noncontrolling interests (14,287 ) 16,202 9,155 Net earnings (loss) $ (53,612 ) $ 62,340 $ 31,591 Effective income tax rate 20.9 % 20.4 % 21.7 % K- 55 Management’s Discussion and Analysis (Continued) Investment and Derivative Contract Gains (Losses) (Continued) Investment gains (losses) Unrealized gains and losses arising from changes in market prices of our investments in equity securities are included in our reported earnings, which significantly increases the volatility of our periodic net earnings due to the magnitude of our equity securities portfolio and the inherent volatility of equity securities prices.
K- 56 Management’s Discussion and Analysis Investment and Derivative Contract Gains (Losses) A summary of investment and derivative contract gains (losses) follows (dollars in millions). 2023 2022 2021 Investment gains (losses) $ 74,855 $ (67,623 ) $ 77,576 Derivative contract gains (losses) — (276 ) 966 Gains (losses) before income taxes and noncontrolling interests 74,855 (67,899 ) 78,542 Income taxes and noncontrolling interests 15,982 (14,287 ) 16,202 Net earnings (loss) $ 58,873 $ (53,612 ) $ 62,340 Effective income tax rate 21.3 % 20.9 % 20.4 % Unrealized gains and losses arising from changes in market prices of our investments in equity securities are included in our reported earnings, which significantly increases the volatility of our periodic net earnings due to the magnitude of our equity securities portfolio and the inherent volatility of equity securities prices.
BHA’s revenues in 2022 increased 6.1% compared to 2021. Revenues from new and used retail vehicle sales increased 5.9% compared to 2021, attributable to higher average vehicle transaction prices, partly offset by a 4.5% decline in total retail units sold.
BHA’s revenues increased 6.1% in 2022 compared to 2021. Revenues from new and used retail vehicle sales increased 5.9% compared to 2021, attributable to higher average vehicle transaction prices, partly offset by a 4.5% decline in total retail units sold. New vehicle unit sales in 2022 were constrained by relatively low, but gradually rising, new vehicle supplies.
K- 53 Management’s Discussion and Analysis (Continued) Manufacturing, Service and Retailing (Continued) Retailing (Continued) Other retailing businesses include three jewelry businesses (Borsheims, Helzberg and Ben Bridge), See’s Candies (confectionary products), Pampered Chef (high quality kitchen tools), Oriental Trading Company (party supplies, school supplies and toys and novelties) and Detlev Louis Motorrad (“Louis”), a retailer of motorcycle accessories based in Germany. 2022 versus 2021 Retailing group revenues in 2022 increased $337 million (1.8%) compared to 2021, reflecting an increase at BHA, partially offset by combined lower revenues from our other retailers.
Other retailing businesses include three jewelry businesses (Borsheims, Helzberg and Ben Bridge), See’s Candies (confectionary products), Pampered Chef (high quality kitchen tools), Oriental Trading Company (party supplies, school supplies and toys and novelties) and Detlev Louis Motorrad (“Louis”), a retailer of motorcycle accessories based in Germany. 2023 versus 2022 Retailing group revenues increased $111 million (0.6%) in 2023 compared to 2022, reflecting an increase at BHA, partially offset by lower revenues from our other retailers.
Percentage change 2022 2021 2020 2022 vs 2021 2021 vs 2020 Revenues Manufacturing $ 75,781 $ 68,730 $ 59,079 10.3 % 16.3 % Service and retailing 91,512 84,282 75,018 8.6 12.3 $ 167,293 $ 153,012 $ 134,097 9.3 14.1 Pre-tax earnings Manufacturing $ 11,177 $ 9,841 $ 8,010 13.6 % 22.9 % Service and retailing 5,042 4,711 2,879 7.0 63.6 16,219 14,552 10,889 11.5 33.6 Income taxes and noncontrolling interests 3,707 3,432 2,589 Net earnings* $ 12,512 $ 11,120 $ 8,300 Effective income tax rate 22.2 % 23.0 % 23.3 % Pre-tax earnings as a percentage of revenues 9.7 % 9.5 % 8.1 % * Excludes certain acquisition accounting expenses, which primarily related to the amortization of identified intangible assets recorded in connection with our business acquisitions.
Percentage change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenues Manufacturing $ 75,405 $ 75,781 $ 68,730 (0.5 )% 10.3 % Service and retailing 92,603 91,512 84,282 1.2 8.6 $ 168,008 $ 167,293 $ 153,012 0.4 9.3 Pre-tax earnings Manufacturing $ 11,445 $ 11,177 $ 9,841 2.4 % 13.6 % Service and retailing 5,176 5,042 4,711 2.7 7.0 16,621 16,219 14,552 2.5 11.5 Income taxes and noncontrolling interests 3,862 3,707 3,432 Net earnings* $ 12,759 $ 12,512 $ 11,120 Effective income tax rate 22.5 % 22.2 % 23.0 % Pre-tax earnings as a percentage of revenues 9.9 % 9.7 % 9.5 % —————— * Excludes certain acquisition accounting expenses, which primarily related to the amortization of identified intangible assets recorded in connection with our business acquisitions.
If disputes cannot be resolved, our contracts generally provide arbitration or alternative dispute resolution processes. We believe there are no coverage disputes at this time for which an adverse resolution would likely have a material impact on our consolidated results of operations or financial condition.
If disputes cannot be resolved, our contracts generally provide arbitration or alternative dispute resolution processes. We believe there are no coverage disputes at this time for which an adverse resolution would likely have a material impact on our consolidated results of operations or financial condition. Establishing claim liability estimates for reinsurance requires evaluation of loss information received from our clients.
We are taking measures to right-size our operations for the long-term and reduce product inventories to more appropriate levels. Duracell’s earnings in 2022 declined, primarily due to lower sales, cost inflation and foreign currency translation effects.
The reductions in sales volumes and supply chain issues in 2021 and 2022 also elevated inventories. We began taking measures to right-size our operations for the long-term and reduce product inventories to more appropriate levels. Duracell’s earnings in 2022 declined, primarily due to lower sales, cost inflation and foreign currency translation effects.
Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions.
Increases and decreases in interest rates generally translate into decreases and increases in fair values of these instruments. Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions.
Building products The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Building Brands), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek). 2022 versus 2021 Revenues of the building products group increased $3.9 billion (15.7%) in 2022 and pre-tax earnings increased $1.4 billion (41.3%) compared to 2021.
Building products The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Building Brands), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek). 2023 versus 2022 Revenues of the building products group decreased $2.9 billion (10.1%) and pre-tax earnings decreased $602 million (12.6%) in 2023 compared to 2022.
If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to earnings as an impairment loss.
If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, is charged to earnings as an impairment loss. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss.
Earnings from Forest River increased in 2022, primarily due to the increase in unit sales in the first half of the year and higher average selling prices, partly offset by higher materials costs.
Earnings from Forest River increased in 2022, primarily due to an increase in unit sales in the first half of the year and higher average selling prices, partly offset by higher materials costs. However, unit sales and earnings declined over the second half of the year compared to the elevated levels in the first half of 2022 and in 2021.
We also write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”). We assume property and casualty risks under retroactive reinsurance contracts written through NICO and we write periodic payment annuity contracts through BHLN.
We also write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”). We assume property and casualty risks under retroactive reinsurance contracts written through NICO and we write periodic payment annuity contracts through BHLN. A summary of BHRG’s premiums and pre-tax underwriting results follows (in millions).
After-tax earnings increased $84 million in 2022 compared to 2021. The earnings increase reflected higher electric utility margin (operating revenue less cost of sales) and a $157 million increase in production tax credits recognized on new wind-powered generating facilities placed in-service at PacifiCorp and MEC, partially offset by higher operating expenses and state income taxes.
The earnings increase reflected higher electric utility margin and a $157 million increase in production tax credits recognized on new wind-powered generating facilities placed in-service at PacifiCorp and MEC, partially offset by higher operating expenses and state income taxes.
Loss estimations for these exposures are difficult to determine due to the changing legal environment and increases may be required in the future if new exposures or claimants are identified, new claims are reported or new theories of liability emerge.
Loss estimations for these exposures are difficult to determine due to the changing legal environment and increases may be required in the future if new exposures or claimants are identified, new claims are reported or new theories of liability emerge. Retroactive reinsurance Our retroactive reinsurance contracts cover loss events occurring before the contract inception dates.
In connection with our retroactive reinsurance contracts, we also record deferred charges, which at contract inception represents the excess, if any, of the estimated ultimate liability for unpaid losses over premiums received. We amortize deferred charges, which produces charges to pre-tax earnings in future periods based on the expected timing and amount of loss payments.
Deferred charges for retroactive reinsurance contracts, which at contract inception, represents the excess of the estimated ultimate liability for unpaid losses over premiums received. Deferred charges are subsequently charged to pre-tax earnings in future periods based on the expected timing and amount of loss payments.
A summary of BHE’s net earnings follows (dollars in millions). 2022 2021 2020 Revenues: Energy operating revenue $ 21,069 $ 18,935 $ 15,556 Real estate operating revenue 5,268 6,215 5,396 Other income (loss) 56 (54 ) 148 Total revenue 26,393 25,096 21,100 Costs and expense: Energy cost of sales 6,757 5,504 4,187 Energy operating expense 9,233 8,535 7,539 Real estate operating costs and expense 5,117 5,710 4,885 Interest expense 2,140 2,054 1,941 Total costs and expense 23,247 21,803 18,552 Pre-tax earnings 3,146 3,293 2,548 Income tax expense (benefit)* (1,629 ) (1,153 ) (996 ) Net earnings after income taxes 4,775 4,446 3,544 Noncontrolling interests of BHE subsidiaries 423 399 71 Net earnings attributable to BHE 4,352 4,047 3,473 Noncontrolling interests and preferred stock dividends 448 475 332 Net earnings attributable to Berkshire Hathaway shareholders $ 3,904 $ 3,572 $ 3,141 Effective income tax rate (51.8 )% (35.0 )% (39.1 )% * Includes significant production tax credits from wind-powered electricity generation.
A summary of BHE’s net earnings follows (dollars in millions). 2023 2022 2021 Revenues: Energy operating revenue $ 21,280 $ 21,069 $ 18,935 Real estate operating revenue 4,322 5,268 6,215 Other income (loss) 406 56 (54 ) Total revenue 26,008 26,393 25,096 Costs and expense: Energy cost of sales 7,057 6,757 5,504 Energy operating expenses 11,412 9,233 8,535 Real estate operating costs and expenses 4,316 5,117 5,710 Interest expense 2,283 2,140 2,054 Total costs and expenses 25,068 23,247 21,803 Pre-tax earnings 940 3,146 3,293 Income tax benefit* (2,022 ) (1,629 ) (1,153 ) Net earnings after income taxes 2,962 4,775 4,446 Noncontrolling interests of BHE subsidiaries 352 423 399 Net earnings attributable to BHE 2,610 4,352 4,047 Noncontrolling interests and preferred stock dividends 279 448 475 Net earnings attributable to Berkshire Hathaway shareholders $ 2,331 $ 3,904 $ 3,572 Effective income tax rate (215.1 )% (51.8 )% (35.0 )% —————— * Includes significant production tax credits from wind-powered electricity generation.
Pre-tax earnings increased $41 million (17.8%) in 2022 as compared to 2021. The increase reflected slightly higher gross margin rates in the grocery and foodservice businesses, partly offset by higher personnel costs, fuel expense and insurance costs.
Revenues from the grocery business increased 4.4%, while revenues from the foodservice and beverage businesses increased 14.1% and 6.0%, respectively. Pre-tax earnings increased $41 million (17.8%) in 2022 compared to 2021. The increase reflected slightly higher gross margin rates in the grocery and foodservice businesses, partly offset by higher personnel costs, fuel expense and insurance costs.
Percentage change 2022 2021 2020 2022 vs 2021 2021 vs 2020 Revenues Industrial products $ 30,824 $ 28,176 $ 25,667 9.4 % 9.8 % Building products 28,896 24,974 21,244 15.7 17.6 Consumer products 16,061 15,580 12,168 3.1 28.0 $ 75,781 $ 68,730 $ 59,079 Pre-tax earnings Industrial products $ 4,862 $ 4,469 $ 3,755 8.8 % 19.0 % Building products 4,789 3,390 2,858 41.3 18.6 Consumer products 1,526 1,982 1,397 (23.0 ) 41.9 $ 11,177 $ 9,841 $ 8,010 Pre-tax earnings as a percentage of revenues Industrial products 15.8 % 15.9 % 14.6 % Building products 16.6 % 13.6 % 13.5 % Consumer products 9.5 % 12.7 % 11.5 % K- 47 Management’s Discussion and Analysis (Continued) Manufacturing, Service and Retailing (Continued) Industrial products The industrial products group includes metal products for aerospace, power and general industrial markets (Precision Castparts Corp.
Percentage change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenues Industrial products $ 34,884 $ 30,824 $ 28,176 13.2 % 9.4 % Building products 25,965 28,896 24,974 (10.1 ) 15.7 Consumer products 14,556 16,061 15,580 (9.4 ) 3.1 $ 75,405 $ 75,781 $ 68,730 Pre-tax earnings Industrial products $ 5,686 $ 4,862 $ 4,469 16.9 % 8.8 % Building products 4,187 4,789 3,390 (12.6 ) 41.3 Consumer products 1,572 1,526 1,982 3.0 (23.0 ) $ 11,445 $ 11,177 $ 9,841 Pre-tax earnings as a percentage of revenues Industrial products 16.3 % 15.8 % 15.9 % Building products 16.1 % 16.6 % 13.6 % Consumer products 10.8 % 9.5 % 12.7 % K- 48 Management’s Discussion and Analysis Manufacturing, Service and Retailing Industrial products The industrial products group includes metal products for aerospace, power and general industrial markets (Precision Castparts Corp.
Pre-tax earnings of the other building products businesses were approximately $2.4 billion in 2022, an increase of 41.9% over 2021. Pre-tax earnings as a percentage of revenues was 15.0% in 2022, a 3.2 percentage point increase compared to 2021.
Significant cost inflation in 2021, that continued through 2022, largely drove the increases in selling prices. Pre-tax earnings of the other building products businesses were approximately $2.4 billion in 2022, an increase of 41.9% over 2021. Pre-tax earnings as a percentage of revenues were 15.0% in 2022, a 3.2 percentage point increase compared to 2021.
Our significant market risks are primarily associated with equity prices, interest rates, foreign currency exchange rates and commodity prices. The fair values of our investment portfolios remain subject to considerable volatility. The following sections address the significant market risks associated with our business activities. Equity Price Risk Equity securities represent the most significant portion of our consolidated investment portfolio.
The fair values of our investment portfolios remain subject to considerable volatility. The following sections address the significant market risks associated with our business activities. Equity Price Risk Investments in equity securities represent the most significant portion of our consolidated investment portfolio.
The grocery and foodservice businesses generate high sales and very low profit margins. These businesses have several significant customers, including Walmart, 7-Eleven, Yum! Brands and others. Grocery sales comprised about 62% of McLane’s consolidated sales in 2022 with food service comprising most of the remainder.
These businesses have several significant customers, including Walmart, 7-Eleven, Yum! Brands and others. Grocery sales comprised 62% of McLane’s consolidated sales in 2023 with foodservice comprising most of the remainder.
Absent significant judicial or legislative changes affecting asbestos, environmental or latent injury exposures, we also currently believe it unlikely that losses will develop upward to the maximum losses payable or downward by more than 15% of our estimated gross liability. We establish liability estimates by individual contract, considering exposure and development trends.
Absent significant judicial or legislative changes affecting asbestos, environmental or mass tort exposures, we also currently believe it unlikely that losses will develop upward to the maximum losses payable or downward by more than 15% of our current estimated gross liability.
Percentage change 2022 2021 2020 2022 vs 2021 2021 vs 2020 Revenues Service $ 19,006 $ 15,872 $ 12,346 19.7 % 28.6 % Retailing 19,297 18,960 15,832 1.8 19.8 McLane 53,209 49,450 46,840 7.6 5.6 $ 91,512 $ 84,282 $ 75,018 Pre-tax earnings Service $ 3,047 $ 2,672 $ 1,600 14.0 % 67.0 % Retailing 1,724 1,809 1,028 (4.7 ) 76.0 McLane 271 230 251 17.8 (8.4 ) $ 5,042 $ 4,711 $ 2,879 Pre-tax earnings as a percentage of revenues Service 16.0 % 16.8 % 13.0 % Retailing 8.9 % 9.5 % 6.5 % McLane 0.5 % 0.5 % 0.5 % K- 52 Management’s Discussion and Analysis (Continued) Manufacturing, Service and Retailing (Continued) Service Our service group consists of several businesses.
Percentage change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenues Service $ 20,588 $ 19,006 $ 15,872 8.3 % 19.7 % Retailing 19,408 19,297 18,960 0.6 1.8 McLane 52,607 53,209 49,450 (1.1 ) 7.6 $ 92,603 $ 91,512 $ 84,282 Pre-tax earnings Service $ 2,995 $ 3,047 $ 2,672 (1.7 )% 14.0 % Retailing 1,726 1,724 1,809 0.1 (4.7 ) McLane 455 271 230 67.9 17.8 $ 5,176 $ 5,042 $ 4,711 Pre-tax earnings as a percentage of revenues Service 14.5 % 16.0 % 16.8 % Retailing 8.9 % 8.9 % 9.5 % McLane 0.9 % 0.5 % 0.5 % K- 53 Management’s Discussion and Analysis Manufacturing, Service and Retailing Service Our service group consists of several businesses.
Other earnings included after-tax foreign exchange rate gains of approximately $1.3 billion in 2022 and $1.0 billion in 2021 and after-tax losses of $764 million in 2020 related to the non-U.S. Dollar denominated debt issued by Berkshire and its U.S.-based finance subsidiary, Berkshire Hathaway Finance Corporation (“BHFC”).
Other earnings included after-tax foreign exchange rate gains of approximately $200 million in 2023, $1.3 billion in 2022 and $1.0 billion in 2021 related to the non-U.S. Dollar denominated debt issued by Berkshire and its U.S.-based finance subsidiary, Berkshire Hathaway Finance Corporation (“BHFC”). Insurance—Underwriting Our management views our insurance businesses as possessing two distinct activities – underwriting and investing.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears on page K-67. Berkshire Hathaway Inc. February 25, 2023 K- 66
Biggest changeThe effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears on page K-67. Berkshire Hathaway Inc. February 24, 2024 K- 66
In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, as required by the Securities Exchange Act of 1934 Rule 13a-15(c).
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, as required by the Securities Exchange Act of 1934 Rule 13a-15(c).

Other BRK.B 10-K year-over-year comparisons