01—Abstract
Summary
Summary of the 10-K filed February 27, 2023. Cited figures are marked; the original filing is the authoritative source.
Berkshire Hathaway Inc. (BRK-B) reported a net loss attributable to shareholders of $22.8 billiona for the year ended December 31, 2022.
This significant loss was largely driven by substantial investment and derivative contract losses totaling $67.9 billionb, primarily due to market volatility in equity securities. Despite the net loss, the company's diverse operating businesses demonstrated resilience, with strong performance in insurance investment income, utilities and energy, and manufacturing, service, and retailing segments. The insurance underwriting segment experienced a slight loss of $90 million, impacted by catastrophe events and increased claims frequencies and severities at GEICO.
However, positive investment income within the insurance segment significantly offset underwriting results. Key strategic moves during the year included the acquisition of Alleghany Corporation for $11.5 billionc, which expanded its property and casualty reinsurance and insurance operations. Berkshire also continued its share repurchase program, demonstrating a commitment to returning value to shareholders.
The company maintains a strong financial position with substantial liquidity and significant equity, although the balance sheet reflects a decrease in shareholders' equity due to investment market fluctuations. Management anticipates that certain businesses, like GEICO, may return to profitability in the upcoming year.
02—Key points
Key Highlights
- Berkshire Hathaway reported a net loss of $22.8 billion for the year, primarily due to a $67.9 billion loss on investments and derivative contracts.
- Insurance underwriting resulted in a net loss of $90 million, impacted by $2.4 billion in catastrophe losses and higher claims costs at GEICO.
- Insurance investment income increased significantly by $1.7 billion to $6.5 billion, driven by higher dividend income and increased interest rates.
- Acquired Alleghany Corporation in October 2022 for $11.5 billion, adding significant property and casualty insurance and reinsurance businesses.
- Burlington Northern Santa Fe (BNSF) railroad revenues increased 11.9% to $25.2 billion, though pre-tax earnings slightly decreased by 1.9% to $7.7 billion due to higher fuel and operating costs.
- Berkshire Hathaway Energy (BHE) reported a net earning of $3.9 billion, a 9.3% increase, driven by U.S. utilities, natural gas pipelines, and other energy businesses.
- The company repurchased $7.9 billion of its own stock during 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 27, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $302.02B$276.19B | +9.4% |
| Operating Expenses | $266.48B$243.75B | +9.3% |
| Interest Expense | $4.35B$4.17B | +4.3% |
| Net Income | -$22.76B$90.95B | −125.0% |
05—Questions
Frequently Asked Questions
What was Berkshire Hathaway's net earnings/loss for the year ended December 31, 2022?
Berkshire Hathaway reported a net loss attributable to shareholders of $22.8 billion for the year ended December 31, 2022. This was primarily driven by significant investment and derivative contract losses of $67.9 billion.
How did the insurance segments perform?
The insurance underwriting segment experienced a net loss of $90 million, impacted by substantial catastrophe losses and increased claims frequencies and severities at GEICO. However, insurance investment income saw a significant increase, rising by $1.7 billion to $6.5 billion, due to higher dividend income and interest rates, which helped offset the underwriting results.
What were the significant strategic activities or acquisitions during the year?
Berkshire Hathaway acquired Alleghany Corporation for $11.5 billion in October 2022, significantly expanding its property and casualty insurance and reinsurance operations. Additionally, the company continued its share repurchase program, buying back $7.9 billion of its stock.
06—Continue